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                                                                   EXHIBIT 10.15

                                 LOAN AGREEMENT

         THIS LOAN AGREEMENT made and entered into as of March 20, 2003, by and
between THE DIRECTOR OF DEVELOPMENT OF THE STATE OF OHIO, acting on behalf of
the State of Ohio (the "Director"), and REPUBLIC ENGINEERED PRODUCTS LLC, a
Delaware limited liability company (the "Company"), under the circumstances
summarized in the following recitals (the capitalized terms not defined in the
recitals are being used therein as defined in Article I hereof):

         A.       Pursuant to the Act, the Director is authorized, among other
things, to make loans to assist in the financing of an Eligible Project.

         B.       The Company has requested that the Director provide the
financial assistance for the Project hereinafter described.

         C.       The Director has determined that the Project constitutes an
Eligible Project and that the financial assistance to be provided pursuant to
this Loan Agreement is appropriate under the Act and will be in furtherance and
in implementation of the public policy set forth in the Act.

         D.       The financial assistance to be provided pursuant to this Loan
Agreement has been reviewed and approved by the a Development Financing Advisory
Council and the Controlling Board pursuant to the Act.

         NOW, THEREFORE, in consideration of the premises and the
representations and agreements herein contained, the Director and the Company
agree as follows:

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                                    ARTICLE I

                                   DEFINITIONS

         Section 1.1. Use of Defined Terms. In addition to the words and terms
elsewhere defined in this Loan Agreement or by reference to the Security
Documents or other instruments, the words and terms set forth in Section 1.2
hereof shall have the meanings therein set forth unless the context or use
expressly indicates a different meaning or intent. Such definitions shall be
equally applicable to both the singular and plural forms of any of the words and
terms therein defined.

         Section 1.2. Definitions. As used herein:

         "Act" means Chapter 166, Ohio Revised Code, as from time to time
amended and supplemented.

         "Allowable Costs" means "allowable costs" of the Project within the
meaning of the Act.

         "Application" means the Application of the Company submitted to the
Director requesting assistance under the Act.

         "Closing Date" means March 20, 2003, the date of execution and delivery
of the Loan Documents.

         "Commitment" means the Commitment Letter between the Director and the
Company dated October 28, 2002.

         "Controlling Board" means the Controlling Board of the State.

         "Cost Certification" means a certification of the Company, as of a
specified date, setting forth in reasonable detail the costs incurred and, if
appropriate, to be incurred, by the Company in completing the Provision of the
Project, including a detail by category of all Allowable Costs.

         "Development Financing Advisory Council" means the Development
Financing Advisory Council of the State.

         "Disbursement Date" means the date upon which the proceeds of the Loan
are disbursed to, or for the benefit of, the Company, which shall be on or
before June 30, 2003, or such subsequent date as may be established by the
Director in writing in accordance with Section 3.7 hereof for the disbursement
of the Loan.

         "Eligible Project" means an "eligible project" within the meaning of
the Act and, with respect to the Loan, means the Project Equipment.

         "Environmental Law" means any federal, state or local law, regulation,
ordinance, order or directive pertaining to the protection of the environment.

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         "ERISA" means the Employee Retirement Income Security Act of 1974, and
any successor statute of similar import, together with all rules and regulations
thereunder, as amended, reformed or otherwise modified from time to time.
References to sections or titles of ERISA shall be construed to also refer to
successor sections or titles.

         "Event of Default" means any of the events described as an event of
default in Section 5.1 hereof.

         "Final Cost Certification" means the Cost Certification dated as of the
Closing Date or Disbursement Date, as applicable.

         "Governing Instruments" means the Certificate of Formation and
Operating Agreement of the Company.

         "Governmental Authority" means, collectively, the United States of
America, the State, any political subdivision thereof, any municipality, and any
agency, department, commission, board or bureau of any of the foregoing having
jurisdiction over the Project.

         "Hazardous Substance" means a hazardous substance as defined under the
Comprehensive Emergency Response Compensation and Liability Act of 1980, 42
U.S.C. Section 9601, as from time to time amended.

         "Hazardous Waste" means a hazardous waste as defined under the Resource
Conservation and Recovery Act of 1976, 42 U.S.C. Section 6901, as from time to
time amended.

         "Indenture" means that certain Indenture dated as of August 16, 2002,
among the Indenture Trustee, the Collateral Agent, the Company, Blue Bar, L.P.,
Blue Steel Capital Corp. and N & T Railway Company, LLC, pursuant to which the
Company and Blue Steel issued the Senior Notes.

         "Indenture Trustee" and/or "Collateral Agent" means LaSalle Bank
National Association in its capacity as indenture trustee and/or collateral
agent under the Indenture.

         "Intercreditor Agreement" means the Intercreditor Agreement dated as of
March 20, 2003, between the Director and the Indenture Trustee relating to the
Project Equipment, as the same may be amended, modified, supplemented, restated
or replaced from time to time.

         "Interest Rate for Advances" means the rate per annum equal to the
lesser of: (i) eighteen percent (18%), or (ii) the maximum rate permitted by
law.

         "Loan" means the loan by the Director to the Company in the total sum
of the Loan Amount, to be disbursed pursuant to Section 3.8 hereof.

         "Loan Agreement" means this Loan Agreement, as the same may be amended,
modified, supplemented, restated or replaced from time to time.

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         "Loan Amount" means the lesser of (i) Five Million Dollars ($5,000,000)
or (ii) thirty and thirty-four hundredths percent (30.34%) of the total
Allowable Costs of the Project, as determined by the Director in the Director's
sole discretion pursuant to this Loan Agreement.

         "Loan Approval Documents" means, with respect to the Loan, the
Recommendation of the Director to the Development Financing Advisory Council
dated September 30, 2002, the Resolution of the Development Financing Advisory
Council dated September 30, 2002, the Approval of the Controlling Board dated
October 28, 2002, and the Commitment.

         "Loan Documents" means this Loan Agreement, the Note, the Security
Agreement and all other documents or instruments delivered to or required by the
Director to evidence or secure the Loan as required by the Commitment and this
Loan Agreement, as the same may be amended, modified, supplemented, restated or
replaced from time to time.

         "Note" means the Cognovit Promissory Note of even date herewith, in the
form attached hereto as EXHIBIT A, evidencing the unconditional obligation of
the Company to repay the Loan, as the same may be amended, modified,
supplemented, restated or replaced from time to time.

         "Notice Address" means:

         (a)      As to the Director:

                           Department of Development
                           Economic Development Finance Division, 28th Floor
                           77 South High Street
                           P.O. Box 1001
                           Columbus, Ohio 43216-1001
                           Attention: Loan Servicing

         (b)      As to the Company:

                           Republic Engineered Products LLC
                           3370 Embassy Parkway
                           Fairlawn, Ohio 44333
                           Attn: Ronald A. Lawson

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

         "Petroleum" means petroleum as defined under the Resource Conservation
and Recovery Act of 1976, 42 U.S.C. Section 6901, as from time to time amended.

         "Project" means the Project Equipment constituting an Eligible Project.

         "Project Equipment" means the machinery, equipment and personal
property described in EXHIBIT B attached hereto, as from time to time amended or
supplemented.

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         "Project Purposes" means the acquisition of the Project Equipment for
use by the Company in connection with its manufacturing operations at the
Project Site.

         "Project Site" means the real property described in EXHIBIT C attached
hereto, together with all appurtenances thereto.

         "Provision" means, as applicable, the acquiring, constructing,
reconstructing, rehabilitating, renovation, enlarging, installing, improving, or
furnishing of the Project.

         "Required Equity Funding" means One Million Six Hundred Forty-Eight
Thousand Dollars ($1,648,000) to be provided by the Company in cash to pay a
portion of the Allowable Costs of the Project.

         "Senior Notes" means the $80,000,000 10% Senior Secured Notes Due 2009
issued by the Company and Blue Steel Capital Corp. pursuant to the Indenture.

         "Senior Note Documents" means the Indenture together with all other
documents or instruments evidencing or securing the Senior Notes.

         "Security Agreement" means the Security Agreement between the Company
and the Director of even date herewith securing the Loan, as the same may be
amended, modified, supplemented, restated or replaced from time to time.

         "Security Documents" means, collectively, the Security Agreement, UCC
Financing Statements and any ancillary documents, as the same may be amended,
modified, supplemented, restated or replaced from time to time.

         "State" means the State of Ohio.

         "Toxic Chemicals" means toxic chemicals as defined under Title III of
The Superfund Amendments and Reauthorization Act of 1986 (also cited as the
Emergency Planning and Community Right-to-Know Act) 42 U.S.C. Section 11001, as
from time to time amended.

         "UCC Financing Statements" means the financing statements evidencing
the Director's security interest in the collateral described in the Security
Agreement.

         Section 1.3. Certain Words and References. Any reference herein to the
Director shall include those succeeding to the Director's functions, duties or
responsibilities pursuant to or by operation of law or lawfully performing such
functions. Any reference to a section or provision of the Constitution of the
State or to a section or provision of the Act or to a section, provision or
chapter of the Ohio Revised Code shall include such section, provision or
chapter as from time to time amended.

         The terms "hereof," "hereby," "herein," "hereto," "hereunder" and
similar terms refer to this Loan Agreement; and the term "heretofore" means
before, and the term "hereafter" means after, the Closing Date. Words of the
masculine gender include the feminine and the neuter, and when the sense so
indicates, words of the neuter gender may refer to any gender.

                                      - 5 -

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                                   ARTICLE II

                       DETERMINATIONS AND REPRESENTATIONS

         Section 2.1. Determinations of the Director. Pursuant to the Act and on
the basis of the representations and other information provided by the Company,
the Director has heretofore made certain determinations, as set forth in the
Loan Approval Documents, which are hereby confirmed, and the Director hereby
determines that the financial assistance to be provided by the State pursuant to
this Loan Agreement will conform to the requirements of the Act, including
Section 166.07 thereof, and will further implement the purposes of the Act by
creating new jobs or preserving existing jobs and employment opportunities and
improving the economic welfare of the people of the State.

         Section 2.2. Representations, Warranties and Covenants of the Company.
The Company hereby represents, warrants and covenants that:

         (a)      The Company is a limited liability company duly organized,
                  validly existing and in good standing under the laws of the
                  State of Delaware, and has all requisite power, corporate or
                  otherwise, to conduct its business and to own, or hold under
                  lease, its assets and properties.

         (b)      The Company is qualified to do business as a foreign limited
                  liability company in the State, and in each other jurisdiction
                  wherein the character of the properties owned or held under
                  lease by the Company or the nature of the business conducted
                  or proposed to be conducted by the Company makes such
                  qualification necessary, except in such jurisdiction where the
                  failure to be so qualified, licensed, admitted or approved
                  will not have a material adverse effect on the business,
                  operations or financial condition of the Company. The Company
                  is in full force and effect under the laws of the State.

         (c)      The Company has full power and authority to execute, deliver
                  and perform the Loan Documents and Senior Note Documents and
                  to enter into and carry out the transactions contemplated
                  thereby. Such execution, delivery and performance do not, and
                  will not, violate any provision of law applicable to the
                  Company or the Governing Instruments of the Company and do
                  not, and will not, conflict with or result in a default under
                  any material agreement or instrument to which the Company is a
                  party or by which the Company or any property or assets of the
                  Company is or may be bound. The Loan Documents and Senior Note
                  Documents have, by proper action, been duly authorized,
                  executed and delivered and all necessary actions have been
                  taken to constitute the Loan Documents and Senior Note
                  Documents as legal, valid and binding obligations of the
                  Company, except as such enforceability may be limited by (1)
                  bankruptcy, insolvency, reorganization, or other laws relating
                  to or affecting the enforcement of creditor's rights, and (2)
                  general principles of equity.

         (d)      The provision of financial assistance pursuant to the Loan
                  Approval Documents and this Loan Agreement induced the Company
                  to provide the Project, thereby creating

                                      - 6 -

<PAGE>

                  new jobs or preserving existing jobs and employment
                  opportunities and improving the economic welfare of the people
                  of the State.

         (e)      The Provision of the Project will be completed by the Company
                  and the Project will be operated and maintained by the Company
                  in such manner as to conform with all applicable laws,
                  including without limitation, all Environmental Laws and
                  zoning, planning, building and other governmental regulations
                  imposed by any Governmental Authority and as to be consistent
                  with the purposes of the Act.

         (f)      The Company presently intends that the Project will be used
                  and operated in a manner consistent with the Project Purposes
                  in Lorain, Lorain County, Ohio until the date on which the
                  Loan has been fully repaid, and the Company knows of no reason
                  why the Project will not be so operated.

         (g)      There are no actions, suits or proceedings pending or, to the
                  knowledge of the Company, threatened against or affecting the
                  Company or the Project which, if adversely determined, would
                  individually or in the aggregate materially impair the ability
                  of the Company to perform any of the Company's obligations
                  under the Loan Documents or Senior Note Documents, or
                  materially and adversely affect the financial condition of the
                  Company.

         (h)      The Company is not in default under any of the Loan Documents
                  or Senior Note Documents, or in the payment of any
                  indebtedness for borrowed money or under any agreement or
                  instrument evidencing any such indebtedness, and no event has
                  occurred which by notice, the passage of time or otherwise
                  would constitute any such event of default.

         (i)      The Project Site is zoned by the City of Lorain, Lorain
                  County, Ohio under zoning ordinances which permit the
                  Provision of the Project thereon and the operation of the
                  Company's business; and all utilities, including water, storm
                  and sanitary sewer, gas, electric and telephone, and rights of
                  access to public ways are currently available or will be
                  provided to the Project Site in sufficient locations and
                  capacities to meet the requirements of operating the Project
                  and of any applicable Governmental Authority.

         (j)      The Company has made no contract or arrangement of any kind,
                  other than the Loan Documents and Senior Note Documents, which
                  has given rise to, or the performance of which by the other
                  party thereto would give rise to, a lien or claim of lien on
                  the Project or other collateral covered by the Loan Documents,
                  other than liens as set forth in Section 4.2(f) hereof.

         (k)      No representation or warranty of the Company contained in any
                  of the Loan Approval Documents, Loan Documents or Senior Note
                  Documents, and no statement contained in any certificate,
                  schedule, list, financial statement or other instrument
                  furnished to the Director by or on behalf of the Company,
                  including, without limitation, the Application, contains any
                  untrue statement of a material fact,

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<PAGE>

                  or omits to state a material fact necessary to make the
                  statements contained herein or therein not misleading.

         (l)      All proceeds of the Loan shall be used for the payment of
                  Allowable Costs relating to Provision of the Project. No part
                  of any such proceeds shall be knowingly paid to or retained by
                  the Company or any partner, officer, shareholder, director or
                  employee of the Company as a fee, kick-back or consideration
                  of any type. The Company has no identity of interest with any
                  supplier, contractor, architect, subcontractor, laborer or
                  materialman performing work or services or supplying materials
                  in connection with the Provision of the Project.

         (m)      The Company shall provide the Required Equity Funding by the
                  Disbursement Date.

         (n)      The financial statements of the Company heretofore delivered
                  to the Director are true and correct in all material respects,
                  have been prepared in accordance with generally accepted
                  accounting principles consistently applied, and fairly present
                  in all material respects the financial condition and the
                  results of operations of the Company as of the dates thereof.
                  No materially adverse change has occurred in the financial
                  condition of the Company reflected therein since the
                  respective dates thereof.

         (o)      To the best of the Company's knowledge after due inquiry, no
                  Hazardous Substance, Hazardous Waste, Toxic Chemical or
                  Petroleum has been or shall be discharged, dispersed,
                  released, stored or treated at the Project Site in violation
                  of any applicable laws or Environmental Laws. No asbestos or
                  asbestos-containing materials have been installed, used,
                  incorporated into any buildings, structures, additions,
                  improvements, facilities, fixtures or installations at the
                  Project Site, or disposed of on or otherwise released at or
                  from the Project Site. To the best of the Company's knowledge
                  after due inquiry, no underground storage tanks are located at
                  the Project Site. No investigation, administrative order,
                  consent order and agreement, litigation, or settlement under
                  any Environmental Law with respect to any Hazardous Substance,
                  Hazardous Waste, Toxic Chemical, Petroleum, asbestos or
                  asbestos-containing material is proposed, in existence, or, to
                  the best of the knowledge of the Company, threatened or
                  anticipated with respect to the Eligible Project and/or
                  Project Site. To the best of the Company's knowledge after due
                  inquiry, the Eligible Project and Project Site are in
                  compliance with all applicable Environmental Laws and the
                  Company has received no notice from any entity, governmental
                  body, or individual claiming any violation of, or requiring
                  compliance with any Environmental Law. The Company has
                  received no request for information, notice of claim, demand
                  or other notification that the Company may be responsible for
                  a threatened or actual release of any Toxic Chemical,
                  Hazardous Substance, Hazardous Waste, Petroleum, asbestos or
                  asbestos-containing material or for any damage to the
                  environment or to natural resources.

         (p)      The Company is the owner of the Project Site, and is, or will
                  be upon its acquisition, the owner of the Project Equipment.

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<PAGE>

All representations and warranties contained in, or made in connection with,
this Loan Agreement and the other Loan Documents shall survive the Closing Date
and the disbursement of the Loan by the Director, and shall not be limited or
otherwise affected by any and all inspections, investigations, reviews or other
inquiries made or other actions taken by the Director or any of the Director's
agents, representatives and designees or any other person or board assisting any
of the foregoing or acting for or on behalf of the State in connection with the
Application, the Loan Approval Documents, the Loan Documents or the consummation
of the Loan.

                   [Balance of page intentionally left blank.]

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<PAGE>

                                   ARTICLE III

            LOAN, PROVISION OF PROJECT AND CONDITIONS TO DISBURSEMENT

         Section 3.1. Loan and Repayment. On the terms and conditions of this
Loan Agreement and the Commitment, the Director shall lend to the Company the
Loan Amount to assist in the Provision of the Project. The Loan shall be
evidenced by this Loan Agreement and the Note and secured by the Security
Documents and other Loan Documents, as applicable. Those instruments shall be
executed and delivered by the Company to the Director on the Closing Date,
concurrently with the execution and delivery of this Loan Agreement and the
delivery of all other documents and the satisfaction of all other closing
conditions required by this Loan Agreement and the Commitment. The Loan shall be
disbursed pursuant to Section 3.8 hereof upon the satisfaction of the conditions
set forth in Section 3.6 hereof. The Loan shall be disbursed only from, and only
to the extent that on the Disbursement Date, funds not heretofore committed are
available to make the Loan from moneys in, the "Facilities Establishment Fund"
created by the Act and as defined in such Act.

         The terms of repayment of the Loan shall be as set forth in the Note
and the Company shall make all payments required to be made under the Note as
and when due.

         Section 3.2. Provision of Project. The Company (a) has commenced or
shall promptly hereafter commence the Provision of the Project, (b) shall pay
all expenses incurred in such Provision from funds made available therefor in
accordance with this Loan Agreement, the Senior Note Documents or otherwise, and
(c) shall, where commercially reasonable, demand, sue for, levy and recover all
sums of money and debts which may be due and payable under the terms of any
contract, order, receipt, guaranty, warranty, writing or instruction in
connection with the Provision of the Project and will enforce the material terms
of any contract, agreement, obligation, and or other performance security with
respect thereto. The Company confirms its agreement in the Commitment that all
wages paid to laborers and mechanics employed on the Provision of the Project
shall be paid, as required by Chapter 4115, Ohio Revised Code, at not less than
the prevailing rates of wages for laborers and mechanics for the class of work
called for by the Project, which wages shall be determined in accordance with
the requirements of Chapter 4115, Ohio Revised Code, for determination of
prevailing wage rates; provided, that if the Company undertakes, as part of the
Project, work to be performed by the Company's regular bargaining unit employees
who are covered under collective bargaining agreements which were in existence
prior to the date of the Commitment, the rate of pay provided under the
applicable collective bargaining agreement may be paid to such employees.

         Section 3.3. [Reserved]

         Section 3.4. Company Required to Pay Costs in Event Proceeds
Insufficient. In the event that the proceeds of the Loan, the Senior Notes and
the Required Equity Contribution are not sufficient to pay all costs of the
Project, the Company shall, nonetheless and irrespective of the cause of such
deficiency, complete the Project and pay all costs of such completion in full
from the Company's own funds.

         Section 3.5. [Reserved]

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         Section 3.6. Conditions to Disbursement. The disbursement of the Loan
shall be made on the Disbursement Date, provided the Director shall have
received the following on or before the Disbursement Date:

         (a)      this Loan Agreement, duly executed;

         (b)      the duly executed Note;

         (c)      the duly executed Security Agreement;

         (d)      the duly executed UCC Financing Statements;

         (e)      the duly executed Intercreditor Agreement;

         (f)      certification by the Company that (i) the Company's
                  representations and warranties made in the Loan Approval
                  Documents, Loan Documents and Senior Note Documents remain
                  true, accurate and complete as of the Disbursement Date in all
                  material respects, (ii) no default or event which, by notice,
                  the passage of time or otherwise, would constitute a default,
                  exists under the Loan Documents or Senior Note Documents,
                  (iii) that the value of the Project is, or upon completion
                  will be, equal to or greater than the total amount of money
                  expended in the Provision of the Project, and (iv) the amount
                  of the Loan will not exceed thirty and thirty-four hundredths
                  percent (30.34%) of the total Allowable Costs of the Project;

         (g)      a Certificate of Compliance from the Ohio Department of
                  Development, certifying as to full compliance with Chapter
                  4115, Ohio Revised Code;

         (h)      evidence of the liability and property insurance required by
                  the Loan Documents;

         (i)      Cost Certifications or a Final Cost Certification, as the case
                  may be;

         (j)      evidence of ownership of the Project Equipment and copies of
                  executed purchase agreements therefor, together with a
                  complete list of all costs and expenses incurred in connection
                  with the Provision of the Project, including invoices and
                  receipts (or cancelled checks or other evidence of payment
                  and/or supporting documentation for all such costs and
                  expenses incurred by the Company), which items shall
                  constitute evidence of the Required Equity Contribution;

         (k)      the Company's Certificates of Good Standing issued by the
                  Secretary of State of the States of Delaware and Ohio, dated
                  not more than twenty (20) days prior to the Disbursement Date;

         (l)      certified copies of the resolutions of the Company authorizing
                  execution and delivery of all documents with respect to the
                  Loan, the Senior Notes and performance thereunder;

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<PAGE>

         (m)      a certificate of incumbency as to the officers executing the
                  Loan Documents on behalf of the Company;

         (n)      copies, certified by the Company to be true, correct and
                  complete, of the Governing Instruments of the Company;

         (o)      copy of the Indenture, certified by the Company as being true,
                  accurate and complete;

         (p)      an opinion of the Company's counsel, which sets forth the
                  following:

                  (i)      the Company has been duly organized and is validly
                           existing as a limited liability company in good
                           standing under the laws of the State of Delaware, is
                           qualified to do business as a foreign limited
                           liability company in good standing in the State, and
                           has all requisite power and authority to conduct the
                           Company's business and to own, or hold under lease,
                           the Company's properties;

                  (ii)     the Company has full power and authority to execute
                           and deliver the Loan Documents and Senior Note
                           Documents;

                  (iii)    the Company has duly authorized the taking of any and
                           all actions necessary to carry out and give effect to
                           the transactions contemplated to be performed on the
                           Company's part under the Loan Documents and Senior
                           Note Documents;

                  (iv)     each Loan Document and Senior Note Document has been
                           duly and validly authorized, executed and delivered
                           by the Company, is in full force and effect and is a
                           legal, valid and binding obligation of the Company,
                           enforceable in accordance with its terms, except as
                           such enforcement may be limited by the application of
                           bankruptcy, insolvency, reorganization, moratorium
                           and other similar laws or equitable principles
                           affecting creditors' rights generally;

                  (v)      the execution and delivery of each of the Loan
                           Documents and Senior Note Documents and the
                           performance by the Company of the actions required of
                           the Company thereby and the consummation of the
                           transactions contemplated therein do not and will not
                           (A) conflict with or violate any provisions of the
                           Company's Governing Instruments, or (B) constitute a
                           default under or conflict with or violate any
                           resolution of the board of directors of the Company,
                           or (C) conflict with or violate any provisions of any
                           applicable law, or (D) to the best knowledge of such
                           counsel, any judgment, decree, indenture, mortgage,
                           deed of trust, guaranty, lease, agreement or other
                           instrument to which the Company is a party or by
                           which the Company or any of the property of the
                           Company is bound;

                                     - 12 -

<PAGE>

                  (vi)     there is no action, temporary restraining order,
                           injunction, suit, proceeding, inquiry or
                           investigation at law or in equity, before or by any
                           judicial or administrative court or agency, pending
                           or to the best knowledge of such counsel threatened
                           against, affecting or involving the Company or the
                           Project which, if adversely determined, would
                           individually or in the aggregate materially impair
                           the ability of the Company to perform any of its
                           obligations under the Loan Documents or Senior Note
                           Documents, or would materially adversely affect the
                           financial condition of the Company; and

                  (vii)    the Company has obtained any and all requisite
                           governmental consents, permits, licenses and
                           approvals necessary for it to operate the Eligible
                           Project, as defined in the Loan Agreement, and to
                           enter into, execute and deliver the Loan Documents
                           and Senior Note Documents and to perform the
                           Company's obligations thereunder.

         (q)      evidence satisfactory to the Director that the Project is not
                  located in a "Flood Hazard Area" as defined by the United
                  States Department of Housing and Urban Development in the
                  Flood Disaster Protection Act of 1973, as amended, or if the
                  Project is located in a such flood-prone area, that
                  appropriate flood insurance or other satisfactory measures
                  have been taken to protect the Project from flood damage;

         (r)      UCC record searches of the financing statements in the Office
                  of the Lorain County Recorder and the Office of the Secretary
                  of State of Delaware showing no liens, pledges, mortgages or
                  security interests in the Collateral (as defined in the
                  Security Agreement);

         (s)      a duly executed disbursement request pursuant to Section 3.8;

         (t)      a duly executed Power of Attorney to authorize wire transfers,
                  if any;

         (u)      an Authorization Agreement for Preauthorized Payment; and

         (v)      such other certifications, documents or opinions as the
                  Director may reasonably request.

         Section 3.7. Postponement of the Disbursement Date. At the written
request of the Company setting forth the reasons therefor and received at least
(20) days prior to the Disbursement Date, the Director may, but shall be under
no obligation to, postpone the Disbursement Date to a later date. No such
postponement shall be deemed to have been granted unless stated in a writing
signed by the Director specifying the length of the extension given. If for any
reason the Loan shall not have been disbursed on or before the Disbursement
Date, or such subsequent date as the Director shall have specified in writing
pursuant to the preceding sentence, this Loan Agreement and the Commitment shall
automatically terminate and, subject to the provisions of Section 3.9 hereof, be
of no further force and effect. For purposes of this Section, time is of the
essence.

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<PAGE>

         Section 3.8. Disbursement of Loan. At the request of the Company for
disbursement of the Loan Amount hereunder, the Director shall disburse the Loan
by delivering funds in the Loan Amount, as determined by the Director in the
Director's sole discretion based on the Final Cost Certification, to the order
of, or at the direction of, the Company on the Disbursement Date.

         Section 3.9. Payment of Costs; Indemnification. The Company shall pay
all costs incident to the Loan, including recording fees, insurance fees, escrow
fees, filing fees, and all other costs and expenses incurred by the Director,
other than the initial fees (but including all of the expenses) of the counsel
assisting the Director in connection with the closing and disbursement of the
Loan. The Company shall defend, indemnify and hold the Director and any
officers, employees, agents or representatives of the Director or the State
harmless from and against any and all loss, cost, expense, claims or actions
arising out of or connected with the execution and delivery of this Loan
Agreement or any of the other Loan Documents and the transactions contemplated
thereby, and the preparation of documents relating to the disbursement of the
Loan, including all aforementioned costs and expenses, regardless of whether or
not the disbursement of the Loan shall actually occur. The provisions of this
Section will survive the termination of this Loan Agreement.

                   [Balance of page intentionally left blank.]

                                     - 14 -

<PAGE>

                                   ARTICLE IV

                       ADDITIONAL COVENANTS AND AGREEMENTS

         Section 4.1. Affirmative Covenants of the Company. Throughout the term
of this Loan Agreement, the Company shall:

         (a)      Taxes and Assessments. Pay and discharge promptly, or cause to
                  be paid and discharged promptly, when due and payable, all
                  taxes, assessments and governmental charges or levies imposed
                  upon the Company, the Company's income or any of the Company's
                  property, or upon any part thereof, as well as all claims of
                  any kind (including claims for labor, materials and supplies)
                  which, if unpaid, might by law become a lien or charge upon
                  the Company's property.

                  Notwithstanding the preceding paragraph, the Company may, at
                  the Company's expense and after prior notice to the Director,
                  by appropriate proceedings diligently prosecuted, contest in
                  good faith the validity or amount of any such taxes,
                  assessments, governmental charges, levies and claims and
                  during the period of contest, and after notice to the
                  Director, may permit the items so contested to remain unpaid.
                  However, if at any time the Director shall notify the Company
                  that, in the opinion of legal counsel satisfactory to the
                  Director, by nonpayment of any such items, the lien or
                  security interest created by the Security Documents as to any
                  part of the Project will be materially affected or that the
                  Project or any part thereof will be subject to imminent loss
                  or forfeiture, the Company shall promptly pay such taxes,
                  assessments, charges, levies or claims.

         (b)      Maintain Existence. Do or cause to be done all things
                  necessary to preserve and keep in full force and effect the
                  Company's existence and the Company's material rights and
                  franchises.

         (c)      Maintain Property. Maintain and keep the Company's property in
                  good repair, working order and condition and from time to time
                  make all repairs, renewals and replacements which, in the
                  opinion of the Company, are necessary and proper so that the
                  business carried on in connection therewith may be properly
                  conducted at all times; provided, however, that nothing in
                  this subsection shall prevent the Company from selling or
                  otherwise disposing of any property whenever, in the good
                  faith judgment of the Company, such property is obsolete, worn
                  out, without economic value or unnecessary for the conduct of
                  the business of the Company; provided, further, that with
                  respect to the Collateral (as defined in the Security
                  Agreement), the Company shall comply with the terms of the
                  Security Agreement.

         (d)      Maintain Insurance. Keep the Project Equipment insured against
                  loss or damage by fire and other risks, maintain public
                  liability insurance against claims for personal injury, death,
                  or property damage suffered by others upon, in or about the
                  Project Site; and maintain all such worker's compensation or
                  similar insurance as may be required under the laws of any
                  state or jurisdiction in which the Company may be engaged in
                  business. All insurance for which provision has been made in
                  this

                                     - 15 -

<PAGE>

                  subsection (d) shall be maintained against such risks and in
                  at least such amounts as required by the Security Agreement,
                  except that the Company may effect worker's compensation or
                  similar insurance in respect of operations in any state or
                  other jurisdiction either through an insurance fund operated
                  by such state or other jurisdiction or by causing to be
                  maintained a system or systems of self-insurance which is in
                  accordance with applicable law.

         (e)      Furnish Information. Furnish or cause to be furnished to the
                  Director:

                  (i)      Quarterly Reports. Within forty-five (45) days after
                           the end of each of the first three quarterly periods
                           of each fiscal year of the Company, the compiled
                           financial statements of the Company, including the
                           balance sheets, as at the end of such quarterly
                           period, together with related statements of income
                           and retained earnings (or accumulated deficit) and
                           changes in financial position for such quarterly
                           period, setting forth in comparative form the
                           corresponding figures as at the end of or for the
                           corresponding quarter of the previous fiscal year,
                           all in reasonable detail, prepared in accordance with
                           generally accepted accounting principles applied on a
                           consistent basis, subject to usual year-end audit
                           adjustments.

                  (ii)     Annual Reports. Within ninety (90) days after the
                           last day of each fiscal year of the Company, a copy
                           of the Company's reviewed annual financial statements
                           containing a balance sheet of the Company as at the
                           end of such fiscal year, together with related
                           statements of income and retained earnings (or
                           accumulated deficit) and changes in financial
                           position 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 all examined by, and
                           accompanied by a certificate of, the Company's chief
                           financial officer or accountant to the effect that
                           such financial statements were prepared in accordance
                           with generally accepted accounting principles
                           consistently applied, and present fairly the
                           Company's financial position at the close of the
                           period covered by such financial statements and the
                           results of the Company's operations for such period.

                  (iii)    Employment Statement. The Company shall furnish to
                           the Director upon request, but in any event not less
                           frequently than concurrently with the annual
                           financial statements to be furnished pursuant to this
                           Section throughout the term of the Loan, a statement
                           certifying: (a) the number of employees of the
                           Company employed on the Eligible Project as of the
                           Closing Date; (b) the number of employees of the
                           Company currently employed on the Eligible Project;
                           (c) the number of any and all employees of the
                           Company laid off or terminated from the Eligible
                           Project since the Closing Date; (d) the current
                           number of women and minority employees of the Company
                           employed on the Eligible Project; and (e) such other
                           employment, economic and statistical data concerning
                           the Project as may be reasonably requested by the
                           Director.

                                     - 16 -

<PAGE>

                  (iv)     Certificate; No Default. With each of the financial
                           statements required to be furnished pursuant to this
                           Section, a certificate of the Company's chief
                           executive officer, chief financial officer,
                           treasurer, assistant treasurer or other authorized
                           officer stating that (a) no Event of Default has
                           occurred and is continuing and no event or
                           circumstance which would constitute an Event of
                           Default, but for the requirement that notice be given
                           or time elapse or both, has occurred and is
                           continuing, or, if such an Event of Default or such
                           event or circumstance has occurred and is continuing,
                           a statement as to the nature thereof and the action
                           which the Company proposes to take with respect
                           thereto, and (b) no action, suit or proceeding by the
                           Company or against the Company at law or in equity,
                           or before any governmental instrumentality or agency,
                           is pending or, to the best of the Company's
                           knowledge, threatened, which, if adversely
                           determined, would materially impair the right or
                           ability of the Company to carry on the business which
                           is contemplated in connection with the Project or
                           would materially impair the right or ability of the
                           Company to perform the transactions contemplated by
                           the Loan Documents or Senior Note Documents, or would
                           materially and adversely affect the Company's
                           business, operations, properties, assets or
                           condition, all as of the date of such certificate,
                           except as disclosed in such certificate.

                  (v)      Other Information. Such other information respecting
                           the business, properties or the condition or
                           operations, financial or otherwise, of the Company as
                           the Director may reasonably request.

         (f)      Deliver Notice. Promptly upon learning of any of the
                  following, deliver written notice thereof to the Director,
                  describing the same and the steps being taken by the Company
                  with respect thereto:

                  (i)      the occurrence of an Event of Default or an event or
                           circumstance which would constitute an Event of
                           Default, but for the requirement that notice be given
                           or time elapse or both; or

                  (ii)     any action, suit or proceeding by or against the
                           Company at law or in equity, or before any
                           governmental instrumentality or agency, instituted or
                           to the knowledge of the Company threatened which, if
                           adversely determined, would materially impair the
                           right or ability of the Company to carry on the
                           business which is contemplated in connection with the
                           Project or would materially impair the right or
                           ability of the Company to perform the transactions
                           contemplated by the Loan Documents or Senior Note
                           Documents, or would materially and adversely affect
                           the Company's business, operations, properties,
                           assets or condition; or

                  (iii)    the occurrence of a Reportable Event, as defined in
                           ERISA, under, or the institution of steps by the
                           Company to withdraw from, or the institution of any
                           steps to terminate, any Plan, as defined in Section
                           4.2(d) hereof, as to which the Company may have
                           liability; or

                                     - 17 -

<PAGE>

                  (iv)     any material communication affecting the Project, the
                           Project Site or the Senior Note Documents, and the
                           Company will promptly respond fully to any inquiry of
                           the Director made with respect thereto.

         (g)      Inspection Rights. At any reasonable time and from time to
                  time during normal business hours, and with prior notice,
                  permit the Director, or any agents or representatives thereof,
                  to visit the location of the Project and discuss the general
                  business affairs of the Company with any of the Company's
                  officers.

         (i)      Preference for Ohio Goods and Services. The Company will use
                  its best efforts to purchase goods and services relating to
                  the Project from persons, partnerships and corporations
                  located in Ohio.

         Section 4.2. Negative Covenants of the Company. Throughout the term of
this Loan Agreement, the Company shall not:

         (a)      Maintain Existence. Sell, transfer or otherwise dispose of
                  all, or substantially all, of the Company's assets,
                  consolidate with or merge into any other entity, or permit one
                  or more entities to consolidate with or merge into the
                  Company; provided, however, that the Company may, without
                  violating the agreement contained in this subsection (a),
                  consolidate with or merge into another corporation, or permit
                  one or more other corporations to consolidate with or merge
                  into the Company, or sell, transfer, or otherwise dispose of
                  all, or substantially all, of its assets and thereafter
                  dissolve, if: (i) the prior written consent of the Director is
                  obtained, which consent shall not be unreasonably withheld;
                  (ii) the surviving, resulting or transferee entity, as the
                  case may be, assumes in writing all of the respective
                  obligations of the Company hereunder (if such surviving,
                  resulting or transferee entity is other than the Company); and
                  (iii) the surviving, resulting or transferee entity, as the
                  case may be, is an entity duly organized and validly existing
                  under the laws of the State or duly qualified to do business
                  therein, and has a net worth of not less than that of the
                  Company immediately prior to such disposition, consolidation
                  or merger, transfer or change of form.

         (b)      Agreements. Enter into any agreement containing any provision
                  which would be violated or breached by the performance of the
                  Company's obligations hereunder or under any instrument or
                  document delivered or to be delivered by the Company hereunder
                  or in connection herewith.

         (c)      Assignment, Sale or Lease. In whole or in part, assign this
                  Loan Agreement or sell, lease or grant the right to occupy or
                  use any portion of the Project to others, without the prior
                  written consent of the Director, which consent shall not be
                  unreasonably withheld.

         (d)      ERISA. Voluntarily terminate any employee benefit plan or
                  other plan (a "Plan") maintained for employees of the Company
                  and covered by Title IV of ERISA, so as to result in any
                  material liability of the Company to the Pension Benefit
                  Guaranty Corporation ("PBGC"), enter into any Prohibited
                  Transaction (as defined in Section

                                     - 18 -

<PAGE>

                  4975 of the Internal Revenue Code of 1986, as amended, and in
                  ERISA) involving any Plan which results in any material
                  liability of the Company to the PBGC, cause any occurrence of
                  any Reportable Event (as defined in Title IV of ERISA) which
                  results in any material liability of it to the PBGC, or allow
                  or suffer to exist any other event or condition which results
                  in any material liability of the Company to the PBGC.

         (e)      Suspension of Operation. Suspend or discontinue operation of
                  the Project (other than for routine repairs and/or
                  maintenance) without the prior written consent of the
                  Director.

         (f)      Encumbered Assets. Without the prior written consent of the
                  Director, pledge, assign, sell, leaseback, hypothecate or in
                  any manner encumber the Project Equipment except as follows:

                  (i)      Mortgages, liens, pledges, and security interests in
                           favor of the Director and the Indenture Trustee
                           and/or Collateral Agent covering all of the Project
                           Equipment, which mortgages, liens, pledges, and
                           security interests shall be subject to the terms and
                           conditions of the Intercreditor Agreement;

                  (ii)     Liens, charges, conditions, or restrictions arising
                           from any personal property tax abatement agreements;
                           and

                  (iii)    (1) Liens arising from judgments or awards in respect
                           of which the Company shall in good faith be
                           prosecuting an appeal or proceedings for review and
                           in respect of which the Company shall have secured a
                           subsisting stay of execution pending such appeal or
                           proceedings for review, provided the Company shall
                           have set aside on the Company's books adequate
                           reserves with respect to such judgment or award; (2)
                           liens for taxes, assessments, or governmental charges
                           or levies, provided the Director shall not have
                           notified the Company in accordance with Section
                           4.1(a) hereof with respect to such liens; (3)
                           deposits, liens or pledges to secure payments of
                           workmen's compensation, unemployment insurance,
                           pensions or other social security obligations, public
                           or statutory obligations, surety, stay or appeal
                           bonds, or other similar obligations arising in the
                           ordinary course of business; and (4) mechanic's,
                           workmen's, repairmen's, warehousemen's, vendor's or
                           carriers' liens, or other similar liens arising in
                           the ordinary course of business and securing sums
                           which are not past due, or deposits or pledges to
                           obtain the release of any such liens, provided that
                           the Company shall have complied with Section 3.2 of
                           the Security Agreement.

         (g)      Leasebacks. Enter into any arrangements, directly or
                  indirectly, with any person, whereby the Company shall sell or
                  transfer any property, whether now owned or hereafter
                  acquired, used or useful in the Company's business, in
                  connection with the rental or lease of the property so sold or
                  transferred or of other property which the Company intends to
                  use for substantially the same purpose or purposes as the
                  property so sold or transferred.

                                     - 19 -

<PAGE>

         (h)      Change of Business. Enter into any business which is
                  substantially different from that presently conducted by the
                  Company without the written consent of the Director, which
                  consent shall not be unreasonably withheld.

         (i)      Modification of Senior Note Documents. Enter into any
                  modification, amendment or alteration of the Senior Note
                  Documents which changes the outstanding amount of the Senior
                  Notes or which changes the payment schedule for the Senior
                  Notes without the prior written consent of the Director.

                   [Balance of page intentionally left blank.]

                                     - 20 -

<PAGE>

                                    ARTICLE V

                   EVENTS OF DEFAULT, REMEDIES AND TERMINATION

         Section 5.1. Events of Default. Each of the following shall be an
"Event of Default":

         (a)      The Company shall fail to pay any amount payable pursuant to
                  this Loan Agreement, the Note, any Security Document or any
                  other Loan Document on the date on which such payment is due
                  and payable, or within five (5) business days thereafter; or

         (b)      The Company shall fail to observe and perform any agreement,
                  term or condition contained in this Loan Agreement or any
                  other Loan Document, other than as required pursuant to
                  subsection (a) above, and such failure shall continue for a
                  period of thirty (30) days after the Company has knowledge
                  thereof; provided, however, that if the nature of the
                  Company's failure is such that more than thirty (30) days are
                  reasonably required for its cure, then the Company shall not
                  be deemed to be in default if the Company commences such cure
                  as soon as possible within said thirty (30) day period and
                  thereafter diligently prosecutes such cure to completion;
                  provided, further that such cure period will not apply to (i)
                  any failure which in the Director's good faith determination
                  is incapable of cure, (ii) any failure which has previously
                  occurred, (iii) any failure to maintain and keep in effect any
                  insurance required by the Loan Documents, or (iv) any failure
                  to permit the Director to inspect the Project and/or Project
                  Site, or the books and records of the Company; or

         (c)      Any representation or warranty made by the Company, or any of
                  the Company's officers, herein or in any other Loan Documents,
                  the Loan Approval Documents or in connection herewith or
                  therewith shall prove to have been incorrect in any material
                  respect when made; or

         (d)      The Company shall fail to pay any indebtedness of the Company,
                  or any interest or premium thereon, when due (whether by
                  scheduled maturity, required prepayment, by acceleration, on
                  demand or otherwise) and such failure shall continue after the
                  applicable grace period, if any, specified in the agreement or
                  instrument relating to such indebtedness; or any other default
                  under any agreement or instrument relating to any such
                  indebtedness, or any other event, shall occur and shall
                  continue after the applicable grace period, if any, specified
                  in such agreement or instrument, if the effect of such default
                  or event is to accelerate, or to permit the acceleration of,
                  the maturity of such indebtedness; or any such indebtedness
                  shall be declared to be due and payable, or required to be
                  prepaid (other than by a regularly scheduled required
                  prepayment), prior to the stated maturity thereof; provided
                  that, the foregoing shall not be deemed to be an Event of
                  Default if, at the Company's expense and after prior notice to
                  the Director, by appropriate proceedings diligently
                  prosecuted, the Company contests in good faith the validity or
                  amount of any of the foregoing items and during the period of
                  contest, and after notice to the Director, may permit the
                  items so contested to remain unpaid; provided further that, if
                  at any time the Director, in the Director's reasonable
                  discretion, shall instruct the Company to pay

                                     - 21 -

<PAGE>

                  any such items and such items are not paid within three (3)
                  days after notice from the Director, such failure to pay shall
                  be an Event of Default hereunder; or

         (e)      The Company commences a voluntary case concerning it under
                  Title 11 of the United States Code entitled "Bankruptcy" as
                  now or hereafter in effect, or any successor thereto (the
                  "Bankruptcy Code"); or an involuntary case is commenced
                  against the Company under the Bankruptcy Code and relief is
                  ordered against the Company, or the petition is controverted
                  but is not dismissed within sixty (60) days after the
                  commencement of the case; or the Company is not generally
                  paying its debts as such debts become due; or a custodian (as
                  defined in the Bankruptcy Code) is appointed for, or takes
                  charge of, all or substantially all of the property of the
                  Company; or the Company commences any other proceeding under
                  any reorganization, arrangement, readjustment of debt, relief
                  of debtors, dissolution, insolvency or liquidation or similar
                  law of any jurisdiction whether now or hereafter in effect; or
                  there is commenced against the Company any such proceeding
                  which remains undismissed for a period of sixty (60) days; or
                  the Company is adjudicated insolvent or bankrupt; or the
                  Company fails to controvert in a timely manner any such case
                  under the Bankruptcy Code or any such proceeding or any order
                  of relief or other order approving any such case or proceeding
                  or in the appointment of any custodian or the like of or for
                  it or any substantial part of its property or suffers any such
                  appointment to continue undischarged or unstayed for a period
                  of sixty (60) days; or the Company makes a general assignment
                  of for the benefit of creditors; or any action is taken by the
                  Company for the purpose of effecting any of the foregoing; or
                  a receiver or trustee or any other officer or representative
                  of the court or of creditors, or any court, governmental
                  officer or agency, shall under color of legal authority, take
                  and hold possession of any substantial part of the property or
                  assets of the Company for a period in excess of sixty (60)
                  days; or

         (f)      A judgment or order for the payment of money in excess of
                  Fifty Thousand Dollars ($50,000) shall be rendered against the
                  Company and either (i) enforcement proceedings shall have been
                  commenced by any creditor upon such judgment or order, or (ii)
                  there shall be any period of thirty (30) consecutive days
                  during which a stay of enforcement of such judgment or order,
                  by reason of a pending appeal or otherwise, shall not be in
                  effect; or

         (g)      The Company fails to meet the Company's minimum funding
                  requirements under Section 301 et seq. of ERISA, with respect
                  to any of the Company's Plans; or

         (h)      Any event of default under the Senior Note Documents shall
                  have occurred and be continuing.

         Section 5.2. Remedies on Default. If any Event of Default shall have
occurred and be continuing, the Director, at any time, at the Director's
election, may exercise any or all or any combination of the remedies conferred
upon or reserved to the Director under this Loan Agreement, the Security
Documents, the Note, any other Loan Document or any instrument or document
collateral thereto, or now or hereafter existing at law, or in equity or by
statute. Subject to the foregoing, any one or more of the following remedies may
be exercised:

                                     - 22 -

<PAGE>

         (a)      If the Loan has not been disbursed, the Director may terminate
                  any and all of the Director's obligations under this Loan
                  Agreement and the Commitment;

         (b)      The Director may declare all payments under the Note to be
                  immediately due and payable, whereupon the same shall become
                  immediately due and payable;

         (c)      The Director may exercise any or all or any combination of the
                  remedies provided to the Director under this Loan Agreement or
                  any of the other Loan Documents or any instrument or document
                  collateral thereto;

         (d)      The Director may have access to, inspect, examine and make
                  copies of the books, records, accounts and financial data of
                  the Company; and/or

         (e)      The Director 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 Loan Agreement, the Note,
                  the Security Documents or any other Loan Document, or to
                  enforce the performance and observance of any other obligation
                  or agreement of the Company under the Loan Documents,
                  including without limitation, as a secured party under the
                  Commercial Code (as defined in the Security Agreement) or
                  other similar laws in effect.

         Section 5.3. No Remedy Exclusive. No remedy conferred upon or reserved
to the Director by this Loan 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 Loan Agreement,
the Note, the Security Documents, each other Loan Document, the Intercreditor
Agreement, 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 any such 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 Director to exercise any remedy
reserved to it in this Article, it shall not be necessary to give any notice,
other than such notice as may be expressly provided herein or required by law.

         Section 5.4. Agreement to Pay Expenses and Attorneys' Fees. If an Event
of Default shall occur and the Director shall incur expenses, including
attorney's fees, in connection with the enforcement of this Loan Agreement, the
Note, the Security Documents, the Intercreditor Agreement, any other Loan
Document or the collection of sums due thereunder, the Company shall reimburse
the Director for the expenses so incurred upon demand. If any such expenses are
not so reimbursed, the amount thereof, together with interest thereon from the
date of demand for payment at the Interest Rate for Advances, shall constitute
additional indebtedness secured by the Security Documents, and in any action
brought to collect such indebtedness or to enforce the Security Documents, the
Director shall be entitled to seek the recovery of such expenses in such action.

         Section 5.5. No Waiver. No failure by the Director to insist upon the
strict performance by the Company of any provision hereof shall constitute a
waiver of the Director's 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 Company to observe or comply with any provision hereof.

                                     - 23 -

<PAGE>

                                   ARTICLE VI

                            MISCELLANEOUS PROVISIONS

         Section 6.1. Term of Loan Agreement. This Loan Agreement shall be and
remain in full force and effect from the date of its delivery until (a) the
termination of this Loan Agreement pursuant to Section 5.2(a) hereof, or (b)
such time as the Loan shall have been fully repaid and all other sums payable by
the Company under this Loan Agreement, the Security Documents, the Note and any
other Loan Documents shall have been indefeasibly paid in full.

         Section 6.2. 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,
or sent by nationally recognized overnight courier service, or sent by facsimile
and confirmed by telephone and in each case addressed to the appropriate Notice
Address. The Company or the Director may, by notice given hereunder, designate
any further or different addresses to which subsequent notices, certificates,
requests or communications shall be sent.

         Section 6.3. Extent of Covenants of the Director; No Personal
Liability. All covenants, obligations and agreements of the Director contained
in this Loan Agreement or any other Loan Document 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
former, present or future Director in other than such Director's official
capacity acting pursuant to the Act, an no such Director shall be personally
liable or in any way personally obligated by reason hereof or any responsibility
under the Act.

         Section 6.4. Binding Effect. This Loan Agreement shall inure to the
benefit of and shall be binding in accordance with its terms upon the Director,
the Company and their respective successors and assigns, provided, however, the
Company may not assign this Loan Agreement or any of the Loan Documents without
the prior written consent of the Director.

         Section 6.5. Amendments and Supplements. This Loan Agreement may not be
amended or supplemented except by an instrument in writing executed by the
Director and the Company.

         Section 6.6. Execution Counterparts. This Loan 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 6.7. Severability. If any provision of this Loan Agreement, or
any covenant, obligation or agreement contained herein is determined by a court
to be invalid or unenforceable, such determination shall not affect any other
provision, covenant, obligation or agreement, each of which shall be construed
and enforced as if such invalid or unenforceable provision were not contained
herein. Such 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.

                                     - 24 -

<PAGE>

         Section 6.8. Captions; Entire Agreement. The captions and headings in
this Loan Agreement shall be solely for convenience of reference and shall in no
way define, limit or describe the scope or intent of any provisions or Sections
of this Loan Agreement. All exhibits and schedules to this Loan Agreement shall
be annexed hereto and shall be deemed to be part of this Loan Agreement. This
Loan Agreement and the other Loan Documents embody the entire agreement and
understanding between the Director and the Company and supersede all prior
agreements and understandings relating to the subject matter hereof.

         Section 6.9. Interpretation. This Agreement shall be deemed to have
been prepared jointly by the parties hereto and any uncertainty or ambiguity
existing herein shall not be interpreted against any party but shall be
interpreted according to the rules for the interpretation of arm's-length
agreements.

         Section 6.10. Mutual Waiver of Jury Trial. THE COMPANY AND THE
DIRECTOR, AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH
COUNSEL, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT EITHER OF THEM
MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS
LOAN AGREEMENT, THE NOTE, THE SECURITY DOCUMENTS OR ANY RELATED INSTRUMENT OR
AGREEMENT, OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREBY, OR ANY COURSE OF
CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF EITHER OF
THEM. THIS WAIVER SHALL NOT IN ANY WAY AFFECT THE DIRECTOR'S ABILITY TO PURSUE
REMEDIES PURSUANT TO ANY CONFESSION OF JUDGMENT OR COGNOVIT PROVISION CONTAINED
IN THE NOTE, IN THE SECURITY DOCUMENTS OR ANY RELATED INSTRUMENT OR AGREEMENT.
NEITHER THE COMPANY NOR THE DIRECTOR SHALL SEEK TO CONSOLIDATE, BY COUNTERCLAIM
OR OTHERWISE, ANY ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER
ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THESE PROVISIONS
SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY THE
COMPANY OR THE DIRECTOR EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY BOTH OF THEM.

         Section 6.11. Consent to Jurisdiction/Service of Process. The Company
hereby irrevocably agrees and submits to the exclusive jurisdiction of any state
or federal court located within Franklin County, Ohio, or, at the option of the
Director in its sole discretion, of any state or federal court(s) located within
any other county, state or jurisdiction in which the Director at any time or
from time to time chooses in its sole discretion to bring an action or otherwise
exercise a right or remedy, and the Company irrevocably waives any and all
objections based on forum non conveniens and/or objection to venue of any such
action or proceeding. The Company hereby irrevocably consents that all service
of process be made by certified mail directed to the Company at its address set
forth herein for notice purposes and service so made will be deemed completed
upon the earlier of the Company's actual receipt thereof or three (3) business
days after the same has been deposited in the U.S. Mail, postage prepaid.
Nothing contained herein will prevent the Director from servicing process in any
other manner permitted by law.

                                     - 25 -

<PAGE>

         Section 6.12. Governing Law. This Loan 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.

         Section 6.13. Attorney Review. The terms and conditions of this Loan
Agreement (including all Exhibits) were reviewed by an attorney for the Company,
and said terms and conditions were explained to the appropriate
officers/representatives of the Company who, by their execution hereof, hereby
acknowledged that they fully understand the terms hereof.

         Section 6.14. Time is of the Essence. Time is of the essence in all
respects hereunder.

                   [Balance of page intentionally left blank.]

                                     - 26 -

<PAGE>

         IN WITNESS WHEREOF, this Loan Agreement has been executed and delivered
all as of the date first hereinbefore written.

                                THE DIRECTOR OF DEVELOPMENT OF THE STATE
                                OF OHIO, acting on behalf of the State of Ohio

                                By:_____________________________________________
                                    Name:_______________________________________
                                    Title:______________________________________

                                REPUBLIC ENGINEERED PRODUCTS LLC,
                                a Delaware limited liability company

                                By:_____________________________________________
                                   Joseph F. Lapinsky, President and CEO

                                By:_____________________________________________
                                   Joseph A. Kaczka, Vice President of Finance
                                   and Controller

                                     - 27 -

<PAGE>

                                                                       EXHIBIT A

                        Form of Cognovit Promissory Note

                                [To be attached]

<PAGE>

                                                                       EXHIBIT B

                                Project Equipment

                                [To be attached]

<PAGE>

                                                                       EXHIBIT C

                        Legal Description of Project Site

                                [To be attached]

<PAGE>

                                TABLE OF CONTENTS

          (This Table of Contents is not a part of this Loan Agreement
                   and is only for convenience of reference.)

<TABLE>
<S>                                                                                                         <C>
  Preambles..............................................................................................    1

                                                   ARTICLE I
                                                  DEFINITIONS

  Section 1.1.      Use of Defined Terms.................................................................    2
  Section 1.2.      Definitions..........................................................................    2
  Section 1.3.      Certain Words and References.........................................................    5

                                                   ARTICLE II
                                       DETERMINATIONS AND REPRESENTATIONS

  Section 2.1.      Determinations of the Director.......................................................    6
  Section 2.2.      Representations, Warranties and Covenants of the Company.............................    6

                                                  ARTICLE III
                           LOAN, PROVISION OF PROJECT AND CONDITIONS TO DISBURSEMENT

  Section 3.1.      Loan and Repayment...................................................................   10
  Section 3.2.      Provision of Project.................................................................   10
  Section 3.3.      [Reserved]...........................................................................   10
  Section 3.4.      Company Required to Pay Costs in Event Proceeds Insufficient.........................   10
  Section 3.5.      [Reserved]...........................................................................   10
  Section 3.6.      Conditions to Disbursement...........................................................   11
  Section 3.7.      Postponement of the Disbursement Date................................................   13
  Section 3.8.      Disbursement of Loan.................................................................   14
  Section 3.9.      Payment of Costs; Indemnification....................................................   14

                                                   ARTICLE IV
                                      ADDITIONAL COVENANTS AND AGREEMENTS

  Section 4.1.      Affirmative Covenants of the Company.................................................   15
  Section 4.2.      Negative Covenants of the Company....................................................   18
</TABLE>

                                      i

<PAGE>

<TABLE>
<S>                                                                                                         <C>

                                                   ARTICLE V
                                  EVENTS OF DEFAULT, REMEDIES AND TERMINATION

  Section 5.1.      Events of Default....................................................................   21
  Section 5.2.      Remedies on Default..................................................................   22
  Section 5.3.      No Remedy Exclusive..................................................................   23
  Section 5.4.      Agreement to Pay Expenses and Attorneys' Fees........................................   23
  Section 5.5.      No Waiver............................................................................   23

                                                   ARTICLE VI
                                            MISCELLANEOUS PROVISIONS

  Section 6.1.      Term of Loan Agreement...............................................................   24
  Section 6.2.      Notices..............................................................................   24
  Section 6.3.      Extent of Covenants of the Director; No Personal Liability...........................   24
  Section 6.4.      Binding Effect.......................................................................   24
  Section 6.5.      Amendments and Supplements...........................................................   24
  Section 6.6.      Execution Counterparts...............................................................   24
  Section 6.7.      Severability.........................................................................   24
  Section 6.8.      Captions; Entire Agreement...........................................................   25
  Section 6.9.      Interpretation.......................................................................   25
  Section 6.10.     Mutual Waiver of Jury Trial..........................................................   25
  Section 6.11.     Consent to Jurisdiction/Service of Process...........................................   25
  Section 6.12.     Governing Law........................................................................   26
  Section 6.13.     Attorney Review......................................................................   26
  Section 6.14.     Time is of the Essence...............................................................   26

Signatures ..............................................................................................   27
</TABLE>

Exhibit A - Form of Cognovit Promissory Note
Exhibit B - Project Equipment
Exhibit C - Legal Description of Project Site

                                       ii

<PAGE>

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

                                 LOAN AGREEMENT

                                     between

                           THE DIRECTOR OF DEVELOPMENT
                              OF THE STATE OF OHIO

                                       and

                        REPUBLIC ENGINEERED PRODUCTS LLC

                                      Dated

                                      as of

                                 March 20, 2003

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