Document:

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EXHIBIT 10.7

                                 LEASE AGREEMENT
                                 ---------------

         THIS AGREEMENT OF LEASE is made and executed at Wooster, Ohio, as of
____________, 2001, by and between SHEE-BREE'S, LLC, an Ohio limited liability
company, its successors and assigns (hereinafter referred to as the "Lessor"),
and OHIO LEGACY CORP, an Ohio corporation (hereinafter referred to as the
"Lessee").

         Upon the terms, covenants and conditions hereinafter set forth, Lessor
leases to Lessee and Lessee leases from Lessor, a portion of the premises
described in paragraph 1 below.

1. CONDITIONS SUBSEQUENT. The enforceability of this Lease by either party
(other than the provisions of this Section) shall be subject to the satisfaction
of the following conditions subsequent.

         (a) Approval by the Office of the Comptroller of the Currency (OCC) for
         a branch office to be located in Millersburg, Ohio ("Regulatory
         Approval"); and

         (b) Obtaining of all required or necessary building permits, variances
         or other governmental approvals relating to the use of the real estate.

         Both parties are charged with a duty to act in good faith and due
diligence in fulfilling these obligations.

         In the event either of the Conditions Subsequent are not satisfied,
this Lease shall be null and void and of no further force and effect.

2. DESCRIPTION, CONSTRUCTION OF IMPROVEMENTS AND USE OF PREMISES. Lessor is a
party to a contract to acquire certain real estate located at 219 N. Clay
Street, Millersburg, Ohio, and more particularly described in Exhibit A,
attached hereto and made a part hereof. Lessor further agrees to build a
building on the real property described on Exhibit A, which building shall be
approximately 4,000 square feet inside, together with all necessary and related
appurtenances and improvements thereto, other than as set forth below, all which
shall be built in accordance with requirements set forth in Section 3 below, and
as otherwise set forth herein ("the Improvements") and approximately the same
amount in the basement. The real property described on Exhibit A and the
Improvements shall hereinafter be referred to as the "Premises." Upon completion
of the Improvements, Lessee hereby agrees that it shall use the Premises for the
sole purpose of operating a full service bank branch. Lessee shall not use the
Premises for any other purpose without first obtaining a written consent from
Lessor. Lessee shall be responsible for the construction and all related costs
of those leasehold improvements described in Exhibit B attached.

3. CONSTRUCTION OF IMPROVEMENTS.

         (a) Lessor shall retain a contractor acceptable to Lessee to act as the
         general contractor and shall construct or cause to be constructed upon
         the Premises the above-referenced Improvements in accordance with
         certain plans and specifications (the

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         "Plans") to be prepared by Lessee's architect which shall be approved
         and initialed by Lessor and Lessee upon completion of the Plans. The
         construction budget shall not exceed $550,000. Any amount in excess of
         $550,000 necessary to complete construction of the Premises shall be
         paid by Lessee, provided that Lessee approves such additional
         expenditure in advance. Construction of the Improvements shall be
         subject to the following conditions:

                  (i) The cost of constructing the Improvements shall be the
                  sole expense of Lessor except as set forth above; and

                  (ii) The Improvements being constructed on the Premises shall
                  be completed by Lessor and Lessee's contractors in a good and
                  workmanlike manner, pursuant to the terms of a construction
                  contract which has been reviewed and approved by Lessor and
                  Lessee and which shall be duly and properly executed by Lessor
                  and Lessee's contractors. As noted below, Lessor shall assign
                  to Lessee any warranties obtained by Lessor from any third
                  party contractors, covering all or part of the Premises, the
                  maintenance and repair of which may be the obligation of
                  Lessee hereunder.

         (b) Upon the satisfaction of the Conditions Subsequent, Lessor shall
         diligently attempt to obtain a building permit and shall cause
         construction of the Improvements (hereinafter being defined as the date
         that digging commences for footer locations) to be commenced as soon as
         possible after such building permit has been obtained, and Lessor shall
         proceed with reasonable diligence to complete the construction of said
         Improvements within an eight month construction period thereafter. Once
         construction has been commenced, Lessor shall diligently and
         conscientiously pursue the construction of the Improvements to
         completion. Lessee shall cooperate fully in the construction process to
         assure the timely completion of the Improvements. Further, Lessee
         agrees that Lessor shall not be held responsible for any delay in
         completion of the Improvements when such delay results from any act or
         omission of Lessee, or its employees or agents, strikes, lockouts,
         fires, riots, unusual delay in transportation, failure of supply of
         construction materials, labor, machinery or equipment, other than such
         failure which results from an act or omission on the part of Lessor,
         natural occurrences resulting in damage or delay or any other cause
         beyond the control of Lessor.

         (c) Upon completion Lessor hereby agrees that Lessor shall assign all
         of its rights and options under its separate construction contracts
         with third party contractors, to Lessee and that Lessee shall be a
         third party beneficiary under each such contract and shall be
         authorized to enforce the terms thereof and be entitled to exercise all
         rights of Lessor thereunder. In addition, Lessee shall have the right
         to inspect the Premises and the Improvements during construction, the
         right to receive notice, schedules and test results, the right to make
         a checklist upon substantial completion of the Improvements, the right
         to make a final inspection thereof, and the right to enforce any
         warranty rights or claims in connection with the Improvements. The
         above rights granted to Lessee are for the

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         express purpose of permitting Lessee to monitor construction of the
         Improvements and thereafter, during the term of this Lease, to permit
         Lessee to enforce any representations and warranties and/or to cause
         the applicable contractor to make any repairs required under the
         construction contract. (d) Lessor and Lessee hereby agree that no
         changes shall be made to the Plans for construction of the Improvements
         unless in each case Lessor and Lessee agree in writing upon such
         changes and upon impact which the same shall have upon the cost of
         construction.

4. RESERVED.

5. TERM. The term of this Lease shall be fifteen (15) years. The term will be
measured as commencing upon Lessee's actual occupancy of the Premises. Unless
extended as hereinafter provided, the Lease shall terminate on the fifteenth
anniversary date of such commencement date. Notwithstanding the commencement
date of the term of this Lease, the parties shall be entitled to enforce the
provisions of this Lease prior to such commencement date in accordance herewith.

         Lessee covenants and agrees that it will remain obligated under this
Lease in accordance with its terms and that Lessee will not take any action to
terminate, rescind, or avoid this Lease, notwithstanding the bankruptcy,
insolvency, receivership, reorganization, composition, readjustment,
liquidation, dissolution, winding-up or other proceeding affecting Lessor or any
assignee of Lessor. Lessee will remain obligated under this Lease regardless of
any action with respect to this Lease which may be taken by any trustee or
receiver of Lessor or of any assignee of Lessor in any proceeding or by any
court in any proceeding.

         This Lease shall not terminate and Lessee's duties shall not be
affected by the prohibition, limitation or restriction of Lessee's use of the
Premises, or interference with such use by any private person or corporation.
The rent and all other charges payable under this Lease shall continue to be
payable and the obligations of Lessee shall continue unaffected, for so long as
Lessor or a successor in title which takes subject to this Lease owns the
Premises, unless the requirements to pay or perform are terminated pursuant to
Section 11.

         If not sooner terminated, this Lease shall terminate on the expiration
of the original term or at the end of any subsequent extension or renewal
thereof, and Lessee hereby waives notice to vacate or quit the Premises and
agrees that Lessor shall be entitled to the benefit of all provisions of law
respecting the summary recovery of possession of the Premises from a Lessee
holding over to the same extent as if such notice had been given. Lessee hereby
agrees that if it fails to surrender the Premises at the end of the primary term
hereof or any extension or renewal hereof, Lessee will be liable to Lessor for
any and all damages which Lessor shall suffer by reason thereof, and Lessee will
indemnify Lessor against all claims and demands made by any succeeding Lessee
against Lessor founded upon delay by Lessee in delivering possession of the
Premises to such succeeding Lessee.

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         For the period of six months prior to the expiration of the term
hereof, including any extension or renewal hereof, Lessor shall have the right
to display on the exterior of the Premises the customary sign "For Rent",
provided that in any event such sign shall not exceed 2' by 1 1/2'; and during
such period Lessor may show the Premises and all parts thereof to prospective
tenants during normal business hours.

6. RENEWAL TERM. Provided that Lessee is not in default under the terms of this
Lease, Lessee shall have the right to renew this Lease for two additional five
year terms by providing Lessor with notice of Lessee's election to renew at
least six months prior to the expiration of the then current lease term. Upon
such renewal, any reference to the term of this Lease shall be interpreted to
include any renewal term pursuant to this Section.

7. SECURITY DEPOSIT. No security deposit shall be required.

8. RENT. The Rent for the premises shall be Seven Thousand Two Hundred Fifty
Dollars ($7,250) per month commencing on the Commencement Date and continuing
thereafter monthly throughout the first five years of the Lease. This amount
will be re-adjusted every five years, based upon the following schedule: $8,000
per month years 6-10 and $8,800 per month for years 11-15. All monthly
installments of the rent shall be paid in advance by the fifth day of each
calendar month, in legal tender of the United States, without demand or set-off,
at Millersburg, Ohio, or such other place as Lessor may designate from time to
time in writing. In the event the commencement date or the expiration date of
this Lease is other than the first day or last day of a calendar month,
respectively, then Lessee shall pay the rent hereunder for the fractional first
or last month, as applicable, prorated on the basis of a thirty day month.

9. COVENANTS OF LESSEE. Lessee hereby covenants with Lessor that during the term
of this Lease:

         (a) PAYMENT OF RENT. As provided in Section 8 above, Lessee will
         promptly pay the Rent when due at the office of Lessor at Millersburg,
         Ohio, or at such other place as Lessor may designate to Lessee in
         writing.

         (b) UTILITIES. Lessee shall pay during the lease term hereof all
         electrical, water, gas, sewer, telephone, and other public utility
         charges in connection with its occupancy and use of the Premises.

         Other than all necessary wiring, conduits, and other fixtures which are
         necessary to provide basic telephone and other data transmission
         services to the building, and the conduit capacity for Lessee to expand
         such capabilities which are included in the Plans, Lessee shall be
         responsible for providing any telephones, and telephone or data
         transmission equipment necessary for supplying telephone or data
         processing services to the Premises. However, Lessor shall be
         responsible for bringing all of the utilities to the Premises and for
         installing the same to the Building thereon as required by the Plans.

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         (c) REAL ESTATE TAXES. Lessee shall pay, at least five business days
         prior, when due, all real estate taxes and assessments, general and
         special assessments, fees or late charges, or any other tax imposed or
         levied against the Premises and the buildings and improvements thereon
         ("Taxes") relating to each calendar year during the term of this Lease.
         Lessor shall be responsible for Taxes due and payable during the first
         year of this Lease relating to the period prior to the term of the
         Lease. Lessee shall be responsible for Taxes due and payable after the
         expiration of the Lease, but relating to Taxes due during the period of
         time that the Premises were occupied by Lessee. Five days prior to the
         applicable due date, Lessee shall provide proof of payment of the Taxes
         to Lessor. In addition, and when and if applicable, Lessee shall also
         pay the reasonable cost (including fees of attorneys, consultants and
         appraisers) of any negotiation, contest or appeal pursued by Lessor or
         Lessee in an effort to reduce any such Taxes. For the calendar year in
         which the term of this Lease commences or terminates, the provisions of
         this Section shall apply but Lessee's liability for any such Taxes for
         such year shall be subject to a pro rata adjustment based upon the
         number of days of such tax year falling within the term of this Lease
         and the number of days which the Premises are unimproved.

         (d) PERSONAL PROPERTY TAXES. Lessee will promptly pay when due all
         personal property taxes levied against all personal property of Lessee
         (including but not limited to trade fixtures and equipment) in or on
         the Premises.

         (e) MAINTENANCE AND REPAIR. Lessee, at its sole expense, shall keep and
         maintain all portions of the Premises, including fixtures and
         improvements thereon and personal property therein or thereon, in good
         order, repair, and operating condition. Lessee will not commit or
         suffer to be committed any waste upon or about the Premises, and shall
         promptly, at its own cost and expense, make all necessary repairs,
         whether ordinary or extraordinary, foreseen or unforeseen, to maintain
         the Premises, including all fixtures and leasehold improvements
         thereon, as the same were in at the commencement of the term of this
         Lease (ordinary wear and tear excepted). At its sole expense, Lessee
         shall maintain the exterior of the Premises (including all signs,
         parking lot, and abutting landscape and sidewalks) in good order and
         repair, keeping them clear of all rubbish, debris, dirt, ice, snow and
         other obstacles. In the event a single item of repair or maintenance to
         the Premises exceeds $5,000, Lessee shall not commence such work
         (unless an emergency or required to prevent additional damage to the
         Premises) without Lessor's prior consent, which consent shall not be
         unreasonably withheld.

         (f) LESSEE'S USE AND OCCUPANCY. Lessee shall occupy the Premises upon
         commencement of this Lease and thereafter will continuously use the
         Premises for the permitted use set forth in Section 2 and for no other
         purpose whatsoever. Lessee will use and occupy the Premises in a
         careful, safe, and proper manner; will carefully control and guard all
         machines, equipment, and fires that may be operated therein; and will
         keep all HVAC, plumbing and sewer systems free from obstructions and
         will not at any time

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         overburden or exceed the capacity of the mains, feeders, ducts,
         conduits, or other facilities by which utilities are supplied to the
         Premises.

         (g) COMPLIANCE WITH LAWS AND REGULATIONS. Lessee will not use or occupy
         the Premises for any unlawful purpose, and at its sole cost and
         expense, Lessee shall comply with and shall cause the Premises to
         comply with:

                  (i) all present and future federal, state, county, municipal
                  and other applicable governmental statutes, laws, rules,
                  orders, regulations and ordinances affecting the Premises or
                  any part thereof or the occupation or use thereof, including
                  specifically but not limited to CERCLA (Comprehensive
                  Environmental Response Compensation and Liability Act), RCRA
                  (Resource Conservation and Recovery Act) and OSHA
                  (Occupational Safety and Health Act), and those which require
                  the making of any structural, unforeseen or extraordinary
                  changes, whether or not such statutes, etc., which may be
                  hereafter enacted, involve a change of policy on the part of
                  the governmental body enacting the same; and

                  (ii) all rules, orders and regulations of the National Board
                  of Fire Underwriters (or other similar organizations
                  exercising similar functions) in connection with the
                  prevention of fire or the correction of hazardous conditions
                  which apply to the Premises.

         (h) LESSOR' ENTRY. Lessee will permit Lessor or its agents or other
         representatives to enter upon the Premises, at reasonable times, to
         examine the condition of the same.

         (i) SURRENDER OF PREMISES. At the end of the term of this Lease, Lessee
         will surrender and deliver up the Premises in as good order and
         condition as the same now are, or may be put by said Lessor.

         (j) RESTRICTION AGAINST MECHANIC'S LIENS. Lessee covenants and agrees
         that it shall not, during the term of this Lease, permit any lien to be
         attached to or upon the Premises or any part of the Premises by reason
         of any act or omission on the part of Lessee. Lessee agrees to save and
         hold the Lessor harmless from or against any lien or claim of lien. If
         any lien does attach, and is not released within thirty days after
         notice to Lessee, or if Lessee has not indemnified Lessor against the
         lien within the thirty day period, Lessor, in its sole discretion, may
         pay and discharge the lien and relieve the Premises. Lessee agrees to
         repay and reimburse Lessor upon demand, as additional Rent, for any
         amount paid by Lessor to discharge a lien with interest, at a rate
         equal to ten percent per annum.

         Lessee shall be responsible for preparing and filing, subject to
         Lessor's review and approval, all notices of commencement and other
         documents required of property owners by Ohio's Mechanics Lien Law.
         Notwithstanding the above, Lessee may in good faith contest any
         mechanic's, laborers', materialmen's or other liens filed or
         established against

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         the Premises. Lessee may permit the items so contested to remain
         undischarged and unsatisfied during the period of the contest and any
         appeal therefrom, unless the nonpayment of any of the items would
         materially endanger the interest of the Lessor or the Premises or any
         portion which would be subject to loss or forfeiture. If nonpayment
         would impair the Lessor's interest or subject the Premises to loss or
         forfeiture, Lessee shall promptly pay, satisfy and discharge all unpaid
         items or secure the payment by posting a bond, in a form satisfactory
         to Lessor; provided, however, that Lessee shall first notify the Lessor
         of its intention to contest the lien. Lessor will cooperate fully with
         the Lessee in any such contest.

         (k) FIXTURES, EQUIPMENT, ADDITIONS AND LEASEHOLD IMPROVEMENTS. Lessee
         will pay for all business fixtures installed in and leasehold
         improvements made to the Premises for Lessee's use and as required by
         Lessee. Lessee may make such leasehold improvements to the Premises as
         may be acceptable to Lessor upon a showing of Lessee's reasonable need
         for such leasehold improvements. All leasehold improvements including
         business fixtures installed in or upon the Premises shall not be
         removed from the Premises at any time, unless such removal is consented
         to in advance and in writing by Lessor. At the expiration of this Lease
         (either upon the Termination Date or upon such earlier termination as
         provided in this Lease) all such business fixtures shall be deemed to
         be a part of the Premises, shall not be removed by Lessee when it
         vacates the Premises, and title thereto shall vest solely in Lessor
         without payment of any kind to Lessee. However, leasehold improvements
         not deemed fixtures shall be removable by Lessee if so doing will not
         in any way damage the Premises.

         Notwithstanding any of the foregoing to the contrary, Lessee shall be
         permitted to remove all equipment, fixtures, or leasehold improvements
         relating to Lessee's drive-thru banking facilities which were paid for
         by Lessee. In the event the removal causes damage to the Premises,
         Lessee shall restore the Premises to the same condition as existed
         prior to the removal.

         (l) INSURANCE. At its sole cost and expense, Lessee will procure and
         maintain in force during the term of this Lease (including
         construction) policies of: (i) commercial (general liability)
         insurance, covering both Lessee and Lessor (as an additional named
         insured) against liability or damage to all persons or property while
         in or on the Premises, the entry ways thereto, and sidewalks and
         streets abutting thereon, with limits of not less than $1,000,000 in
         general aggregate; and (ii) fire and extended coverage casualty
         insurance on the Premises, including all additions and leasehold
         improvements thereto in an amount equal to the replacement value of the
         Premises. The amount of insurance shall be reviewed from time to time
         by the parties to assure such amounts remain reasonable in light of
         inflation and the general business environment. Any change shall be
         made promptly. Such policies of insurance shall be with companies and
         through brokers qualified to do business in Ohio. Each such policy
         shall contain an endorsement for the benefit of Lessor as an additional
         named insured, and each such policy shall contain an

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         agreement or endorsement that such policy will not be canceled by the
         insurer without at least ten days prior notice to Lessor and Lessee.

         (m) PERSONAL PROPERTY INSURANCE. Lessee shall obtain such coverage as
         it may desire upon all personal property located in or upon the
         Premises and owned or otherwise in the possession of Lessee (including
         specifically, but not by way of limitation, stock in trade, equipment,
         and fixtures).

         (n) INDEMNITY BY LESSEE. Lessee shall indemnify, hold harmless and
         defend Lessor from and against any and all claims, actions, damages,
         liability and expense (including, but not limited to, fees of attorneys
         and other professional fees) in connection with:

                           (i) any failure of Lessee to perform its obligations
                  as provided in Section 9(g);

                           (ii) any loss of life, personal injury and/or damage
                  to property arising from or out of the occupancy or use by
                  Lessee (or any other party using the Premises under Lessee) of
                  the Premises or any part thereof, occasioned wholly or in part
                  by any act or omission of the Lessee, its officers, employees,
                  contractors, agents or invitees; or

                           (iii) by any failure of Lessee to abide by or perform
                  any other term, covenant or condition of this Lease.

         (o)      ASSIGNMENT AND SUBLETTING.

                  (i) Lessee covenants not to assign this Lease, sublet all or
                  any part of the Premises or allow a change in the ownership of
                  the leasehold interest without the prior written consent of
                  the Lessor, which consent shall not be unreasonably withheld.
                  An assignment for the benefit of creditors of Lessee or by
                  operation of law, or by the order or action of any
                  governmental agency, shall not be effective to transfer or
                  assign the Lessee's interest without and unless the Lessor
                  first consents in writing.

                  (ii) Any assignment or subletting by Lessee shall not result
                  in Lessee being released or discharged from any liability
                  under this Lease. As a condition to Lessor's prior written
                  consent as provided for in this Section, the assignee(s) or
                  subtenant(s) shall agree in writing to comply with and be
                  bound by all of the terms of this Lease.
                           (iii) Lessor's consent to any assignment,
                  encumbrance, subletting, occupation, lien or other transfer
                  shall not release Lessee from any of Lessee's obligations
                  under this Lease or be deemed to be a consent to any
                  subsequent occurrence. Any assignment, encumbrance,
                  subletting, occupation, lien or other

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                  transfer of this Lease which does not comply with the
                  provisions of this Section shall be void.

                  (iv) Any assignment or sublease shall recite that it is and
                  shall be subject and subordinate to the provisions of this
                  Lease, and the termination or cancellation of this Lease shall
                  constitute a termination and cancellation of every assignment
                  or sublease.

         (p) LATE CHARGES. If payment due to Lessor from Lessee is not received
         by Lessor within ten days after the due date, a "late charge" of $25.00
         may be charged by Lessor to Lessee, as Rent. The purpose of this
         additional payment is to defray the expense incident to the handling of
         such delinquent payments, and the fee shall be payable by Lessee to
         Lessor upon demand.

         (q) PAYMENT BY CHECK. Payment by check shall always be subject to
         timely collection of the funds represented by the check. If any check
         tendered by or on behalf of Lessee in payment of any sum due under this
         Lease is dishonored and returned to Lessor for any reason, Lessee shall
         be charged the sum of Twenty-five Dollars ($25.00) for each such check,
         which shall be payable as Rent, to defray the expense of handling,
         processing and bookkeeping. Tenant shall promptly replace any
         dishonored check with a check which is the direct obligation of a bank
         or savings and loan institution (certified check, cashier's check,
         official check or money order). The amount of the replacement check
         shall be in the aggregate amount of the payment tendered, plus the late
         charges provided in this Lease, plus the One Hundred Dollar ($100.00)
         charge required by this Section.

         (r)      MORTGAGE SUBORDINATION.

                  (i) Lessor shall have the right to demand and obtain from
                  Lessee a subordination of Lessee's lien arising by virtue of
                  this lease, thereby subordinating Lessee's lien in favor of a
                  mortgage arising from a mortgage loan, or in favor of any
                  mortgage lien of any refinancing or replacing mortgage loan
                  that may become necessary or desirable to Lessor from time to
                  time in the future, and Lessee upon demand by Lessor for same,
                  agrees to execute at any and all times such instruments that
                  may be required by any lending institution or prospective
                  mortgagee in order to effectuate such subordination of
                  Lessee's lien, provided that such documents or agreements are
                  reasonably acceptable to Lessee and Lessee's legal counsel.

                  (ii) It is a condition, however, of the subordination of lien
                  provisions herein provided, that Lessor shall procure from any
                  such mortgagee an agreement, in writing, which shall be
                  delivered to Lessee, providing in substance that so long as
                  Lessee shall faithfully discharge the obligations on its part
                  to be kept and performed under the terms of this lease,
                  Lessee's tenancy will not be disturbed and this lease will not
                  be affected by any default under such mortgage.

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         (s) CONSTRUCTION PLANS. Lessee shall be responsible for providing
         Lessor with all necessary information with respect to Lessee's
         specifications for and requirements to be included within the
         Improvements such that Lessor shall then be able to obtain the
         preparation of necessary plans and specifications for the construction
         of the Improvements on the Premises pursuant to this lease and shall
         cause them to comply with all applicable laws and building regulations.
         As noted above, upon completion of the Plans, Lessor and Lessee shall
         review and approve of the same and shall evidence such approval by
         initialing the same.

10. COVENANTS OF LESSOR. Lessor hereby covenants with Lessee that during the
term of this Lease (and, where applicable, for such further period as may be
required):

         (a) QUIET ENJOYMENT. If Lessee pays the Rent when due, and keeps and
         performs the covenants of this Lease on the part of Lessee, Lessee
         shall peaceably and quietly hold, occupy, and enjoy the Premises,
         during the term of this Lease and any extension thereof, without any
         hindrance or molestation by Lessor or any person or persons lawfully
         claiming under Lessor.

         (b) WARRANTIES AS TO TITLE AND FITNESS FOR USE. Prior to accepting
         Rent, Lessor warrants that:

                  (i) it shall be the true and lawful owner of the Premises; and

                  (ii) it has good, right and full power to lease the same in
                  the manner aforesaid.

         Except for the foregoing, this Lease is made without warranty of any
         kind, express or implied, as to the fitness of the Premises, for any
         particular use or purpose, and by executing this Lease, Lessee shall be
         deemed to have:

                  (i) accepted the Premises;

                  (ii) acknowledged that the same are in the condition called
                  for hereunder; and

                  (iii) agreed that the obligations of Lessor imposed hereunder
                  have been fully performed.

         (c) INDEMNITY BY LESSOR. Lessor shall indemnify, hold harmless and
         defend Lessee from and against any and all claims, actions, damages,
         liability and expense (including, but not limited to, fees of attorneys
         and other professional fees) in connection with:

                  (i) any loss of life, personal injury and/or damage to
                  property arising from or out of the occupancy or use by Lessor
                  of the Premises or any part thereof,

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                  occasioned wholly or in part by any act or omission of the
                  Lessor, their officers, employees, contractors, agents or
                  invitees; or

                  (ii) by any failure of Lessor to abide by or perform any other
                  term, covenant or condition of this Lease.

11. MUTUAL COVENANTS OF LESSOR AND LESSEE. Both Lessor and Lessee mutually
covenant and agree:

         (a) PARTIAL DESTRUCTION. If, during the lease term and any extensions
         thereto, the building or its appurtenances on the Premises are damaged
         or destroyed by fire, or by any other cause, Lessor shall repair and/or
         rebuild the damaged property. Repair or reconstruction shall be in
         conformance with plans and designs as existed immediately before the
         damage or destruction occurred, subject to changes as may be reasonably
         attributable to governmental restriction or inability to obtain like
         materials or labor, or other causes (other than financial), beyond the
         control of Lessee. All proceeds of insurance carried on the
         improvements pursuant to Section 9(l) of this Lease, payable as a
         result of any damage or destruction, shall be payable jointly to Lessor
         and Lessee and used only for the purpose of such repair or rebuilding.
         Lessor shall restore, repair and/or rebuild the Premises including
         Lessee's leasehold improvements, to the condition existing prior to the
         damage or destruction. Lessee's obligation to pay Rent hereunder shall
         not abate.

         (b) COMPLETE DESTRUCTION. If, during the lease term and any extension
         thereto, the building on the Premises is completely destroyed by fire
         or by any other cause, this Lease shall not terminate and the Rent
         shall not be abated unless Lessor has received the insurance funds on
         the Premises pursuant to Section 9(l) above and Lessee is unable to
         recommence its operations within 90 days of the casualty or such
         destruction occurs within 18 months of the end of the term, as
         extended, in which event, Lessee may terminate the Lease by written
         notice to Lessor. If Lessee exercises Lessee's right to terminate the
         Lease, Lessor shall refund all Rent paid after the casualty and any
         insurance proceeds belonging to Lessee paid to Lessor. Repair or
         reconstruction shall be in conformance with the plans and designs as
         existed immediately before the damage or destruction occurred, subject
         to any changes as may be reasonably attributable to governmental
         restriction, inability to obtain like materials or labor or other like
         causes. If operations are not expected to recommence within 90 days of
         the date of casualty and Lessee elects not to terminate the Lease,
         Lessee's Rental obligation shall abate six months from the date of
         casualty to recommencement of operations.

         (c) DEMAND FOR RENT AND LESSOR'S REMEDIES ON LESSEE'S BREACH.

                  (i) The occurrence of any one or more of the following shall
                  constitute an event of default under this Lease:

                                       11
<PAGE>

                           1. The filing of a petition by or against Lessee for
                           adjudication as a bankrupt or insolvent, or for its
                           reorganization or for the appointment of a receiver
                           trustee of Lessee's property; any receivership
                           proceedings under any provisions of federal law; any
                           assignment by Lessee for the benefit of creditors; or
                           the taking possession of the property of Lessee by
                           any governmental office or agency pursuant to the
                           statutory authority for the receivership,
                           dissolution, or liquidation of Lessee; or any other
                           action by any governmental agency or department which
                           has the effect of divesting Lessee of its interest or
                           control over the Premises.

                           2. Failure of Lessee to pay within ten days after
                           written demand any installment of the Rent or other
                           Rental charge required to be paid by Lessee;

                           3. Failure of Lessee to pay within ten days after
                           written notice and demand any other charges payable
                           to or on behalf of Lessor under this Lease;

                           4. Lessee's failure to perform or abide by any other
                           term, covenant, or condition of this Lease within ten
                           days after written notice and demand, unless the
                           failure absolutely requires more than ten days to
                           cure. In that event, Lessee's failure to proceed
                           expeditiously, continuously, and diligently to cure
                           fully and completely the failure shall constitute an
                           event of default.

                           5. The Lessee shall abandon or vacate said Premises
                           for more than 30 consecutive days due to any reason
                           except partial or total destruction of the Premises.

                  (ii) If an event of default as provided in subsection (i)
                  immediately above occurs, then the Lessor, in addition to all
                  rights and remedies granted under the laws of the State of
                  Ohio, shall have the following rights:

                           1. To re-enter and remove all persons and property
                           from the Premises, and the property may be removed
                           and stored in a public warehouse or elsewhere at the
                           cost of and for the account and sole risk of Lessee,
                           all without service of notice or resort to legal
                           process;

                           2. To terminate the Lease and re-let the Premises for
                           the account of the Lessor or, within the sole
                           discretion of Lessor, to retake possession of the
                           Premises without terminating the Lease and to re-let
                           them for the account of Lessee. In the event that
                           Lessor re-let the Premises for the account of Lessee,
                           then Lessor shall have the right to make any
                           alterations and repairs as may be necessary and to
                           re-let the Premises, or any part

                                       12
<PAGE>

                           thereof, at such Rent and for such term and subject
                           to such terms and conditions as Lessor may deem
                           advisable and receive the Rent. Upon each re-letting
                           for the account of Lessee, all Rentals received by
                           Lessor shall be applied, first to the payment of any
                           indebtedness other than Rent under the Lease from
                           Lessee to Lessor; second, to the payment of any loss
                           and expenses of the re-letting, including brokerage
                           fees and attorney's fees and costs of alterations and
                           repairs; third, to the payment of Rent and other
                           charges payable to and on behalf of Lessor due and
                           unpaid under the Lease; and the residue, if any,
                           shall be held by Lessor and applied in payment of
                           future Rent and other charges payable on behalf of
                           Lessor as it may become due and payable under the
                           Lease. Lessee agrees to pay to Lessor on demand any
                           deficiency that may arise by reason of re-letting,
                           Notwithstanding any re-letting without termination,
                           Lessor may at any time thereafter elect to terminate
                           this Lease for the previous breach.

                           3. Lessee agrees to pay all costs, including "court
                           costs," and expenses of collection and reasonable
                           attorney's fees on any part of the Rent, sums agreed
                           to be treated as Rent and other charges payable by
                           Lessee that may be collected by an attorney, with or
                           without instituting legal action. If Lessee fails
                           promptly and fully to perform and comply with each
                           and every term, covenant, agreement, undertaking, or
                           condition under this Lease and the matter is turned
                           over to Lessor's attorney(s), Lessee shall pay
                           Lessor's reasonable attorney's fees plus costs, where
                           deemed necessary or appropriate by Lessor, whether
                           suit is instituted or not. Lessee shall not be
                           required to reimburse Lessor for attorneys' fees and
                           related costs in excess of $5,000.

         (d) APPROPRIATION BY RIGHT OF EMINENT DOMAIN. If the Premises, or
         substantially all thereof, shall be taken in appropriation proceedings
         or by any right of eminent domain, then this Lease shall terminate and
         be utterly void from the time when possession thereof is required for
         the public use, and such taking shall not operate as or be deemed an
         eviction of Lessee or a breach of Lessor's covenant of quiet enjoyment;
         but Lessee shall pay all Rent due and perform and observe all of the
         covenants hereof, up to the time when possession is required for public
         use. Provided, however, that if only a part of the Premises be so
         taken, and if eight months or more of the term of this Lease, then
         remains unexpired, and if the remaining Premises can be substantially
         restored within 30 days, this Lease shall not terminate, but Lessor
         shall, at the sole expense of Lessee, restore the Premises as near as
         possible to the condition it was in prior to such taking, the Rent
         payable by Lessee during the period of restoration not being reduced,
         and after such restoration, if any, the entire Rent herein reserved
         shall be paid by Lessee as herein provided during the remainder of the
         term of this Lease.

         Lessor shall be entitled to retain any proceeds payable in connection
with the appropriation of the Premises.

                                       13
<PAGE>

         If the Premises, or any part thereof, shall be taken in appropriation
         proceedings or by any right of eminent domain, Lessee shall not share
         any award relating to the taking of any portion of the fee and Lessee's
         award, if any, shall be limited to an award arising out of Lessee's
         interest in the Lease and any claims against the condemning authority
         for loss of Lessee's fixtures and equipment (other than leasehold
         improvements made by Lessee to the Premises).

         Lessor and Lessee agree that, in any proceedings incident to recovery
         of damages resulting from any taking or condemnation, they will, at the
         request of the other, join and cooperate in the prosecution of their
         several respective claims for damages resulting from such taking or
         condemnation.

         (e) RISK OF LOSS AND WAIVER OF LIABILITY. All personal property located
         in or upon the Premises (including, but not limited to, additions and
         improvements made by Lessee to the interior of the Premises, and
         Lessee's inventory, stock in trade, equipment, and fixtures) shall be
         at the sole risk of Lessee.

         Neither Lessee nor any assignee or subrogee of Lessee shall have any
         claim or action, either at law or in equity, over and against Lessor or
         their agents or employees for any loss, cost or damage to the Premises
         caused by or resulting from fire, the elements, or any other cause, of
         whatsoever origin. Lessor likewise agrees that no claims shall be made
         and that no suit or action, either at law or in equity, shall be
         brought by Lessor or by any person, firm or corporation claiming by,
         through, or under Lessor, against Lessee, its successors and assigns,
         for any loss, cost or damage to the Premises (or to any other buildings
         or appurtenances which are or may be located upon the Premises) caused
         by or resulting from fire, the elements, or any other cause, of
         whatsoever origin.

         (f) OWNERSHIP OF IMPROVEMENTS. All equipment and business fixtures
         installed in or made by Lessee to the Premises shall remain the
         personal property of Lessee, any law to the contrary notwithstanding;
         moreover, Lessor shall be the owner of both equipment and business
         fixtures and leasehold improvements without the necessity of payment of
         any kind from Lessor to Lessee upon:

         (i)      the Termination Date; or

                  (ii) any default by Lessee in the performance of any term,
                  covenant or condition of this Lease as provided in Section
                  11(c); or

                  (iii) any governmental condemnation of the Premises.

12. SIGNAGE. Any signage on the exterior of the building on the Premises shall
be in accordance with the plans and specifications approved by Lessor as set
forth in Section 3.

                                       14
<PAGE>

13. NOTICES. All notices and other communications provided for under this Lease
shall be in writing and will be deemed to have been duly given only if delivered
personally or mailed certified return receipt requested to the parties at the
following addresses:

if to the Lessor:

         Shee-Bree's, LLC
         5163 TR 313
         Millersburg, Ohio  44654

if to the Lessee:

         Ohio Legacy Corp.
         305 West Liberty Street
         Wooster, OH 44691
         Attention: L. Dwight Douce

Any party from time to time may change its address by giving notice specifying
such change to the other party hereto.

14. MISCELLANEOUS.

         (a) LEASE APPLICABLE TO SUCCESSORS AND ASSIGNS. This Lease and all the
         covenants, terms, provisions and conditions herein contained shall
         inure to the benefit of and be binding upon the heirs, legal
         representatives and assigns of Lessor, and the successors and assigns
         of Lessee; provided, however, that no assignment or sublease by, from,
         through or under this Lease in violation of any covenant, provision,
         term or condition hereof shall vest in the assigns or sublessee any
         right, title or interest whatever.

         (b) RECORDING. If either party shall desire to record this Lease, the
         parties will execute and record a short Memorandum of Lease.

         (c) HEADINGS. The section headings are inserted only as a matter of
         convenience and reference and in no way define, limit, or describe the
         scope and intent of this Lease nor in any manner affect this Lease.

         (d) GOVERNING LAW. This Lease shall be governed in accordance with Ohio
         law.

         IN WITNESS WHEREOF, the parties hereto have signed this Lease Agreement
the day and year first above written.

         Witnesses:                                           LESSOR:

                                       15
<PAGE>

                                             SHEE-BREE'S, LLC,
                                             an Ohio limited liability company

                                             By:
--------------------------                   Name:___________________________
                                             Its ____________________________
--------------------------

                                             LESSEE:

                                             OHIO LEGACY CORP.

                                             By:
-------------------------
                                                  L. Dwight Douce, President

STATE OF OHIO              )
                           )  ss:
COUNTY OF ___________      )

         Before me, a Notary Public in and for said State, personally appeared
the above named SHEE-BREE'S, LLC, an Ohio limited liability company, by
_______________, its ______________, who acknowledged that he did sign the
foregoing instrument and that the same is the free act and deed of such limited
liability company and of him personally and as such member.

         In Testimony Whereof, I have hereunto set my hand and official seal at
_______________, Ohio, this _____ day of _________, 2001.

                                          Notary Public

STATE OF OHIO     )
                  )  ss:
COUNTY OF WAYNE   )

         Before me, a Notary Public in and for said State, personally appeared
the above named Ohio Legacy Corp, an Ohio corporation, by L. Dwight Douce, its
President, who acknowledged

                                       16
<PAGE>

that he did sign the foregoing instrument and that the same is the free act and
deed of said corporation, and the free act and deed of him personally and as
such officer.

         In Testimony Whereof, I have hereunto set my hand and official seal at
Wooster, Ohio, this ______ day of _________________, 2001.

                                              Notary Public

This instrument prepared by:
Daniel H. Plumly, Esq.
Critchfield, Critchfield & Johnston, Ltd.
225 N. Market Street
P. O. Box 599
Wooster, OH  44691-0599
Telephone:  (330) 264-4444

                                       17
<PAGE>

                                    EXHIBIT A
                                    ---------

         Situated in the State of Ohio, County of Holmes and Village of
Millersburg, and being more fully described as follows:

PARCEL A:
---------

Being a part of Outlot Number Ten (10) in the Second Addition to the Town of
Millersburg, Ohio, commencing on the West line of said Lot 103 feet North of the
South West corner thereof, thence North 53 feet 6 inches, thence East 231 feet,
thence South 53 feet 6 inches, thence West 231 feet to the place of beginning,
and known on the Auditor's duplicate as Part of Inlot No. 398.

PARCEL B:
---------

Being a part of Out Lot Number Ten (10) in said Village of Millersburg;
commencing on the West line of said Lot 44 feet North of the southwest corner of
said lot; thence North 59 feet along said West line; thence East parallel with
the south line of said lot 142 feet; thence South parallel with the East line 59
feet; thence West parallel with said South line 142 feet to the place of
beginning. Said premises numbered by the Auditor for taxation as Part of Inlot
No. 397.

EXCEPTING FROM PARCEL A: Beginning at an iron pin set at the southeast corner of
Lot 398 the TRUE POINT OF BEGINNING.

Thence with the following FOUR (4) COURSES:

1)       N 85E 14' 30" W 51.00 feet along the south line of Lot 398 to an iron
         pin set;

2)       N 4E 54' 00" E 53.50 feet to an iron pin set on the lot line;

3)       S 85E 14' 30" E 51.00 feet along the north line of Lot 398 to an iron
         pin set at the NE corner of said Lot 398;

4)       S 4E 54' 00" W 53.50 feet along the E line of Lot 398 to the TRUE POINT
         OF BEGINNING.

This parcel contains 0.063 acre, but subject to all easements of record.
See Holmes County Plat Book 12, Page 495 for survey
This Survey made and description prepared by Donald C. Baker, PS 6938.
April 27, 1990. Parcel No. 07-03327 & Parcel No. 07-01221.

                                       18<PAGE>
                                                                EXHIBIT 10(a)(1)

                          CORE MATERIALS CORPORATION

                           SECURED PROMISSORY NOTE
                           -----------------------

December 31, 1996                                                 $25,504,000.00

                  FOR VALUE RECEIVED, Core Materials Corporation, a Delaware
corporation (the "Company"), hereby promises to pay to the order of Navistar
International Transportation Corp., a Delaware corporation ("NAVISTAR"), the
principal amount of Twenty-Five Million Five Hundred Four Thousand and 00/100
Dollars ($25,504,000.00) (or the unpaid principal amount from time to time
outstanding hereunder) together with interest thereon calculated from the date
hereof in accordance with the provisions of this Note.

                  This Note was issued pursuant to that certain Asset Purchase
Agreement, dated as of September 12, 1996 (as amended and modified from time to
time, the "PURCHASE AGREEMENT"), between the RYMAC Mortgage Investment
Corporation (predecessor in interest to the Company) and Navistar. The Purchase
Agreement contains certain terms governing the rights of the holder of this Note
which are incorporated herein by reference. Except as defined in paragraph 10
hereof and unless otherwise indicated herein, capitalized terms used in this
Note have the same meanings set forth in the Purchase Agreement. Notwithstanding
anything to the contrary herein, it is expressly agreed that the outstanding
principal amount of this Note may, from time to time, be increased pursuant to
certain purchase price adjustments set forth in Section 1(g) of the Purchase
Agreement (the "Purchase Price Adjustments").

1. PAYMENTS OF PRINCIPAL AND INTEREST.

         (a) PRINCIPAL PAYMENT. The Company shall pay principal installments
under this Note to the Noteholder as follows:

                  (i) Within ninety (90) days after the end of each fiscal year
of the Company during the term hereof, the Company shall pay principal in an
amount equal to the amount, if any, by which the total cash and Cash Equivalents
of the Company, as shown on the Company's audited balance sheet and statement of
financial condition as of the end of such fiscal year, prepared in accordance
with GAAP, exceeds Three Million Dollars ($3,000,000.00); and

                  (ii) In the event the Company obtains, from time to time, any
Refinancing Loan, the Company shall promptly upon obtaining such loan pay
principal in an amount equal to the proceeds of such loan.

If not sooner paid, the Company shall pay the entire principal amount of this
Note then outstanding to the Noteholder in full on December 31, 2006 (the
"Maturity Date"), together with any and all accrued and unpaid interest and any
other amounts due hereunder.

         (b) INTEREST. Except as otherwise expressly provided herein, interest
shall accrue at the rate of eight percent (8.0%) per annum, (computed on the
basis of a 360-day year and the actual

                                      -6-
<PAGE>

number of days elapsed in any year) on the unpaid principal amount of this Note
outstanding from time to time from and including the date hereof until the date
paid, or (if less) at the highest rate then permitted under applicable law. The
Company shall pay to the Noteholder all accrued interest on the last business
day of each June and December, beginning after the date hereof. Notwithstanding
anything to the contrary contained herein, on the date any such scheduled
interest payment becomes due the Company may elect to add such interest payment
to the outstanding principal balance of the Note to be repaid with interest in
accordance with the provisions of this Note; provided, that (i) the board of
directors of the Company by resolution declares that the payment of such
scheduled interest payment would be reasonably expected to significantly effect
the Company's and any of its Subsidiaries' ability to fund current operations
and (ii) the Noteholder shall have received written notice of such election at
least thirty (30) days before the date of such scheduled interest payment, which
notice shall be accompanied by a certified copy of the resolution of the board
of directors of the Company referred to in clause (i) above and an amendment to
this Note, in form and substance satisfactory to the Noteholder, duly executed
by the Company and dated as of the date such scheduled interest payment becomes
due, which amendment shall increase the principal amount of this Note by the
amount of such scheduled interest payment. Payments received by the Noteholder
from the Company on this Note shall be applied first to the payment of interest
which is due and payable and only thereafter to the outstanding principal
balance hereof. Unless prohibited under applicable law, any accrued interest
which is not paid on the date on which it is due and payable shall bear interest
at the same rate at which interest is then accruing on the principal amount of
this Note until such interest is paid. Any accrued interest which for any reason
has not theretofore been paid shall be paid in full on the date on which the
final principal payment on this Note is made.

2. PREPAYMENTS; SETOFF.

         (a) OPTIONAL PREPAYMENTS. The Company may, without premium or penalty,
at any time and from time to time, prepay all or any portion (in whole number
multiples of $50,000) of the outstanding principal amount of this Note, provided
that the Company has paid all interest on this Note accrued through the
immediately preceding scheduled interest payment date. In connection with any
prepayment of principal pursuant to this paragraph 2(a), the Company shall also
pay all accrued and unpaid interest on the principal amount of this Note being
prepaid.

         (b) RIGHT OF SETOFF. In addition to all other rights and remedies
available to Navistar hereunder or otherwise, Navistar shall have the right,
after the occurrence and during the continuance of any Default or Event of
Default, to setoff against and to apply to the accrued and unpaid interest and
outstanding principal balance of the Note (in each case, to the extent then due
and payable), any obligation owing by Navistar to the Company. Any such setoff
shall be applied first to the payment of interest which is due and payable and
only thereafter to the outstanding principal balance hereof.

3. COLLATERAL SECURITY. This Note is secured by a first priority lien upon and
security interest in all of the Company's assets, whether now owned or hereafter
acquired, and is entitled to the

                                      -7-
<PAGE>

benefits of the Security Documents. Notwithstanding the foregoing, Noteholder
agrees that it will (if requested to do so by the holder of the Senior
Obligations), upon terms reasonably acceptable to Noteholder, subordinate its
security interest and lien in the Collateral (as defined in the Security
Documents) in connection with and to the extent reasonably required to
facilitate a Refinancing Loan, and promptly upon the request of the holder of
the Senior Obligations, it will execute and deliver such documents, instruments
and agreements as are necessary to evidence such subordination.

4. COVENANTS.

         (a) AFFIRMATIVE COVENANTS; OTHER INFORMATION. The Company hereby agrees
that, so long as any amount is owing to the Noteholder hereunder, the Company
shall and (except in the case of delivery of financial information, reports and
notices) shall cause each of its Subsidiaries to:

                  (i) PERFORMANCE OF OBLIGATIONS. (A) Pay, discharge or
otherwise satisfy at or before maturity or before they become delinquent, as the
case may be, all its obligations of whatever nature, except where the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of the Company or its Subsidiaries, as the case may be or
the failure to pay, discharge or otherwise satisfy such obligations would not be
reasonably expected to have a Material Adverse Effect; and (B) comply with all
material applicable laws, rules and regulations of all governmental authorities,
except to the extent that the failure to comply therewith would not be
reasonably expected to cause a Material Adverse Effect.

                  (ii) CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE.
Continue to engage in business of the same general type as conducted by it on
the Closing Date (after giving effect to the transactions contemplated by the
Purchase Agreement) and preserve, renew and keep in full force and effect its
corporate existence and take all reasonable action to maintain all rights,
privileges and franchises necessary or desirable in the normal conduct of its
business except as otherwise permitted pursuant to subparagraph 4(b)(iv), and
except to the extent that the failure to do so would not be reasonably expected
to have a Material Adverse Effect.

                  (iii) MAINTENANCE OF PROPERTY; INSURANCE. Keep all property
useful and necessary in its business in good working order and condition;
maintain with financially sound and reputable insurance companies insurance on
all its property in at least such amounts and against at least such risks (but
including in any event public liability) as are usually insured against in the
same general area by companies engaged in the same or a similar business; and
furnish to the Noteholder, upon written request, full information as to the
insurance carried.

                  (iv) INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS.
Keep proper books of records and account in which full, true and correct entries
in conformity with GAAP and applicable law shall be made of all dealings and
transactions in relation to its business and activities; and permit
representatives of the Noteholder to visit and inspect any of its properties and
examine and make abstracts from any of its books and records at any reasonable
time and upon reasonable notice and as often as may reasonably be desired and to
discuss the business,
                                      -8-
<PAGE>

operations, properties and financial and other condition of the Company and
its Subsidiaries with officers and employees of the Company and its
Subsidiaries and with its independent certified public accountants;
provided that the Noteholder shall bear its own expenses if any such
inspection, examination or discussion occurs at a time when no Default or
Event of Default shall have occurred and be continuing.

                  (v)INFORMATION. Provide to Navistar:

                           (A) within five days after the same are sent, copies
of all financial statements and reports which the Company sends to its
stockholders, and within five days after the same are filed, copies of all
financial statements and reports which the Company may make to, or file with,
the Securities and Exchange Commission or any successor or analogous
governmental authority;

                           (B) promptly upon receipt thereof, any additional
reports, management letters or other detailed information concerning significant
aspects of the Company's operations or financial affairs given to the Company by
its independent accountants (and not otherwise contained in other materials
provided hereunder); and

                           (C) promptly, such additional financial and other
information as the Noteholder may from time to time reasonably request.

                  (vi) NOTICES. Reasonably promptly after obtaining knowledge of
any of the following (or within such other time period designated in clause (E)
below) give notice to the Noteholder thereof:

                           (A) the occurrence of any Default or Event of
Default;

                           (B) any (1) default or event of default under any
contractual obligation of the Company or any of its Subsidiaries or (2)
litigation, investigation or proceeding which may exist at any time between the
Company or any of its Subsidiaries and any governmental authority, which in
either case, if not cured or if adversely determined, as the case may be, could
reasonably be expected to have a Material Adverse Effect;

                           (C) any litigation or proceeding affecting the
Company or any of its Subsidiaries in which the amount involved is $250,000 or
more and not covered by insurance or in which injunctive or similar relief is
sought;

                           (D) the occurrence of or existence of any event or
condition that, in the judgment of Company, could be reasonably expected to give
rise to a claim for indemnification by the Noteholder under Section 10 of the
Purchase Agreement;

                           (E) as soon as possible and in any event within 30
days after the Company or any Commonly Controlled Entity knows or has reason to
know of (1) the occurrence or expected occurrence of any Reportable Event with
respect to any Plan, and (2) within 15 days after the Company or any Commonly
Controlled Entity knows or has reason to know of the occurrence or expected
occurrence of any of the following events: (i) a failure to make any

                                      -9-

<PAGE>

required contribution to a Plan, (ii) the filing of a request for a minimum
funding waiver under Section 412 of the Code with respect to a Plan, (iii) the
creation of any Lien in favor of the PBGC or a Plan, (iv) any withdrawal from,
or the termination, Reorganization or Insolvency of, any Multiemployer Plan, (v)
the institution of proceedings or the taking of any other action by the PBGC or
the Company or any Commonly Controlled Entity or any Multiemployer Plan with
respect to the withdrawal from, or the termination, Reorganization or Insolvency
of, any Plan, (vi) the disqualification of any Plan that is intended to be
qualified under Section 401(a) of the Code, (vii) the filing of a notice of
intent to terminate a Plan or the treatment of a Plan amendment as a termination
under Section 4041 of ERISA, or (viii) any other event or condition which might
reasonably be expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan or the
imposition of any liability under Title IV of ERISA;

                           (F) any Lien (other than security interests created
by the Security Agreement or Liens permitted hereunder) on any of the Collateral
(as defined in the Security Agreement) which is not permitted under subparagraph
4(b)(ii) and which, in the judgment of the Company, would be reasonably expected
to materially and adversely affect the ability of the Noteholder to exercise any
of its remedies under the Security Agreement;

                           (G) the occurrence of any event that, in the judgment
of the Company, would reasonably be expected to have a material adverse effect
on the aggregate value of the Collateral or on the security interests created by
the Security Agreement; and

                           (H) any material adverse change in the business,
operations, property or condition (financial or otherwise) of the Company and
its Subsidiaries taken as a whole.

Each notice pursuant to this paragraph shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action (if any) the Company proposes to take with respect
thereto.

                  (vii) ADDITIONAL COLLATERAL; SUBSIDIARIES.

                           (A) With respect to any assets of the type covered by
the Security Agreement acquired after the Closing Date by the Company or any of
its Subsidiaries, and, upon the occurrence and during the continuance of an
Event of Default and at the request of the Noteholder, with respect to any other
assets or property of the Company or any of its Subsidiaries, as to which the
Noteholder does not have a perfected Lien, (1) execute and deliver to the
Noteholder such amendments to the Security Agreement or such other documents as
the Noteholder reasonably requests in order to grant to the Noteholder a
security interest in such assets, (2) take all actions reasonably requested by
the Noteholder to grant to the Noteholder a perfected security interest in such
assets, including, without limitation, the filing of Uniform Commercial Code
financing statements in such jurisdictions as may be required by the Security
Agreement or by law or as may be reasonably requested by the Noteholder and (3)
if reasonably requested by the Noteholder deliver to the Noteholder legal
opinions relating to the matters described in the preceding clauses (1) and (2),
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Noteholder.

                                      -10-
<PAGE>

                           (B) With respect to any Subsidiary of the Company
created or acquired after the Closing Date by the Company, prior to or
concurrently with becoming such Subsidiary (1) have the Company amend the
Security Agreement so as to grant to the Noteholder a perfected security
interest in the Capital Stock and assets of such Subsidiary, (2) deliver to the
Noteholder or its agent the certificates representing such Capital Stock, if
any, together with undated stock powers, executed in blank, in form and
substance reasonably satisfactory to the Noteholder, in respect of such stock,
(3) cause such Subsidiary to enter into a guarantee in form and substance
reasonably satisfactory to the Noteholder guarantying the prompt payment and
performance by the Company of all of its obligations hereunder, and (4) if
requested by the Noteholder, deliver to the Noteholder legal opinions relating
to the matters described in the preceding clauses (1), (2) and (3) which
opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Noteholder.

                  (viii) OBTAIN REFINANCING LOAN. To use reasonable commercial
efforts to obtain a Refinancing Loan within six (6) months from the date hereof
in amounts and with terms reasonably satisfactory to the Company and the
Noteholder.

         (b) NEGATIVE COVENANTS. The Company hereby agrees that, so long as any
amount is owing to the Noteholder, the Company shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly:

                  (i) LIMITATION ON INDEBTEDNESS. Create, incur, assume or
suffer to exist any Indebtedness, except:

                           (A) the Senior Obligations;

                           (B) Indebtedness of the Company to any Subsidiary and
of any Subsidiary to the Company or any other Subsidiary;

                           (C) Indebtedness of the Company or any of its
Subsidiaries incurred to finance the acquisition of fixed or capital assets
(whether pursuant to a loan, a Financing Lease or otherwise) after the date
hereof;

                           (D) Indebtedness assumed by the Company pursuant to
the Purchase Agreement, and any refinancings, refundings, renewals or extensions
thereof; PROVIDED, that the principal amount of any such Indebtedness shall not
be increased to more than the principal amount outstanding on the Closing Date
(after giving effect to the transactions contemplated by the Purchase
Agreement);

                           (E) Indebtedness of a corporation which becomes a
Subsidiary after the date hereof, PROVIDED that (i) such Indebtedness existed at
the time such corporation became a Subsidiary and was not created in
anticipation thereof and (ii) immediately after giving effect to the acquisition
of such corporation by the Company no Default or Event of Default shall have
occurred and be continuing;

                           (F) Indebtedness of the Company on an unsecured basis
in an aggregate principal amount not to exceed $3,000,000 at any one time
outstanding under the lines of credit

                                      -11-
<PAGE>

offered by commercial banks to the Company or its Subsidiaries to finance the
working capital needs of the Company and its Subsidiaries; and

                           (G) Indebtedness of the Company in respect of this
Note, as may be amended from time to time (including without limitation any
increase in the principal amount of this Note pursuant hereto or the Purchase
Agreement).

                  (ii) LIMITATION ON LIENS. Create, incur, assume or suffer to
exist any Lien upon any of its property, assets or revenues, whether now owned
or hereafter acquired, except for:

                           (A) Liens and encumbrances of the type described in
Sections 4(c), (d) and (e) of the Purchase Agreement;

                           (B) Liens securing Indebtedness of the Company and
its Subsidiaries permitted by clause (C) of subparagraph 4(b)(i) hereof incurred
to finance the acquisition of fixed or capital assets, PROVIDED that (i) such
Liens shall be created substantially simultaneously with the acquisition of such
fixed or capital assets, (ii) such Liens do not at any time encumber any
property other than the property financed by such Indebtedness, (iii) the amount
of Indebtedness secured thereby is not increased to more than the principal
amount originally incurred and (iv) the principal amount of Indebtedness secured
by any such Lien shall at no time exceed 100% of the fair value (as determined
in good faith by the board of directors of the Company) of such property at the
time it was acquired;

                           (C) Liens on the property or assets of a corporation
which becomes a Subsidiary after the date hereof securing Indebtedness permitted
by clause (E) of subparagraph 4(b)(i) hereof, PROVIDED that (i) such Liens
existed at the time such corporation became a Subsidiary and were not created in
anticipation thereof, (ii) any such Lien is not spread to cover any property or
assets of such corporation after the time such corporation becomes a Subsidiary,
and (iii) the amount of Indebtedness secured thereby is not increased to more
than the principal amount originally incurred;

                           (D) Liens created to secure the Senior Obligations;

                           (E) Liens for taxes not yet due or which are being
contested in good faith by appropriate proceedings, provided that adequate
reserves with respect thereto are maintained on the books of the Company or its
Subsidiaries, as the case may be, in conformity with GAAP;

                           (F) carriers', warehousemen's, mechanics',
materialmen's, repairmen's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 60 days or which are
being contested in good faith by appropriate proceedings;

                           (G) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security legislation and
deposits securing liability to insurance carriers under insurance or
self-insurance arrangements;

                                      -12-
<PAGE>

                           (H) deposits to secure the performance of bids, trade
contracts (other than borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature incurred
in the ordinary course of business;

                           (I) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case materially
detract from the value of the property subject thereto or materially interfere
with the ordinary conduct of the business of the Company or such Subsidiary; and

                           (J) Liens created by the Security Documents.

                  (iii) LIMITATION ON GUARANTEE OBLIGATIONS. Create, incur,
assume or suffer to exist any Guarantee Obligation except:

                           (A) Guarantee Obligations assumed by the Company
pursuant to the Purchase Agreement and any refinancings, refundings, renewals or
extensions thereof, PROVIDED, that the principal amount of any such Guarantee
Obligations shall not be increased to more than the principal amount outstanding
on the Closing Date (after giving effect to the transactions contemplated by the
Purchase Agreement);

                           (B) guarantees made in the ordinary course of
business, not to exceed $250,000 in the aggregate, by the Company of obligations
of any of its Subsidiaries or by any Subsidiary of obligations of the Company,
in each case to the extent such guaranty obligations are otherwise permitted
under this Agreement;

                           (C) guarantees made in respect of the Senior
Obligations;

                           (D) guarantees by the Company or any of its
Subsidiaries of indebtedness permitted by subparagraph 4(b)(i);

                           (E) Guarantee Obligations in respect of the undrawn
portion of the face amount of letters of credit issued for the account of the
Company or any Subsidiary in an aggregate amount not to exceed $250,000 at any
one time outstanding for the Company and its Subsidiaries; and

                           (F) guarantees made in favor of the Noteholder as
contemplated by this Note.

                  (iv) LIMITATION ON FUNDAMENTAL CHANGES. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, or make any material change in its present method of conducting
business, except:

                           (A) any Subsidiary of the Company may be merged or
consolidated with or into the Company (PROVIDED that the Company shall be the
continuing or surviving

                                      -13-
<PAGE>

corporation) or with or into any one or more wholly owned Subsidiaries of the
Company (PROVIDED that the wholly owned Subsidiary or Subsidiaries shall be the
continuing or surviving corporation);

                           (B) any wholly owned Subsidiary may sell, lease,
transfer or otherwise dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to the Company or any other wholly owned Subsidiary of
the Company; and

                           (C) any Person may be merged with or into the
Company, (PROVIDED that the continuing or surviving corporation assumes all of
the obligations and liabilities of the Company in respect of this Note, the
Purchase Agreement, the Ancillary Agreements, and Related Documents) with the
prior written consent of the Noteholder.

                  (v) LIMITATION ON SALE OF ASSETS. Convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, receivables and leasehold interests) or any
product line, whether now owned or hereafter acquired, or, in the case of any
Subsidiary, issue or sell any shares of such Subsidiary's Capital Stock to any
Person other than the Company or any wholly owned Subsidiary, except:

                           (A) the sale or other disposition of any property in
the ordinary course of business;

                           (B) the sale or discount without recourse of accounts
receivable arising in the ordinary course of business in connection with the
compromise or collection thereof;

                           (C) as permitted by subparagraph 4(b)(iv);

                           (D) the sale or other disposition of any property,
provided the aggregate book value of all property sold or disposed of by the
Company pursuant to this clause (D) does not exceed $1,000,000 in any fiscal
year of the Company; and

                           (E) the sale or other disposition of any assets, the
net proceeds of which are used to prepay this Note or are otherwise distributed
in accordance with the Intercreditor Agreement.

                  (vi) LIMITATION ON DIVIDENDS. Declare or pay any dividend
(other than dividends payable solely in common stock or preferred stock of the
Company and dividends payable by any Subsidiary of the Company to the Company,
or any other Subsidiary of the Company) on, or make any payment on account of,
or set apart assets for a sinking or other analogous fund for, the purchase,
redemption, defeasance, retirement or other acquisition of, any shares of any
class of Capital Stock of the Company or any warrants or options to purchase any
such Capital Stock, whether now or hereafter outstanding, or make any other
distribution in respect thereof, either directly or indirectly, whether in cash
or property or in obligations of the Company or any Subsidiary.

                  (vii) LIMITATION ON INVESTMENTS, LOANS AND ADVANCES. Make any
advance, loan, extension of credit or capital contribution to, or purchase
any stock, bonds, notes, debentures or

                                      -14-
<PAGE>

other securities of or any assets constituting a business unit of, or
make any other investment (collectively, "Investments") in, any Person, except:

                           (A) extensions of trade credit in the ordinary course
of business;

                           (B) investments in Cash Equivalents;

                           (C) investments by the Company in its Subsidiaries
and investments by such Subsidiaries in the Company and in other Subsidiaries;

                           (D) Investments in existence on the date hereof and
disclosed in the Purchase Agreement;

                           (E) additional Investments or acquisitions made after
the date hereof and approved by the board of directors of the Company; and

                           (F) loans and advances to employees of the Company or
its Subsidiaries for travel and entertainment expenses in the ordinary course of
business.

                  (viii) LIMITATION ON OPTIONAL PAYMENTS AND MODIFICATIONS OF
DEBT INSTRUMENTS. (A) Make any optional payment or prepayment on or redemption
or purchase of any Indebtedness for borrowed money other than any prepayment of
this Note or any prepayment of any revolving loans or term loans made under the
Credit Agreement; (B) amend, modify or change, or consent or agree to any
amendment, modification or change to any of the terms of any such Indebtedness
other than any such amendment, modification or change which would extend the
maturity or reduce the amount of any payment of principal thereof or which would
reduce the rate or extend the date for payment of interest thereon) or (C)
amend, modify or change, or consent or agree to any amendment, modification or
change to the Credit Agreement to increase the interest rate on the Senior
Obligations (including any default rate).

                  (ix) LIMITATION ON CHANGES IN FISCAL YEAR. Permit the fiscal
year of the Company to end on a day other than December 31.

                  (x) LIMITATION ON NEGATIVE PLEDGE CLAUSES. Enter into with any
Person any agreement, other than (A) this Note, (B) the Credit Agreement and (C)
purchase money mortgages or Financing Leases permitted by this Note (provided in
the case of this clause (C), any prohibition or limitation shall only be
effective against the assets financed thereby), which prohibits or limits the
ability of the Company or any of its Subsidiaries to create, incur, assume or
suffer to exist any Lien upon any of its property, assets or revenues, whether
now owned or hereafter acquired.

                  (xi) LIMITATION ON AMENDMENTS OF CERTIFICATES OF INCORPORATION
AND BY-LAWS. Permit any material modification, amendment or supplement to the
certificate of incorporation or by-laws of the Company or any of its
Subsidiaries.

                  (xii) LIMITATION ON CERTAIN RESTRICTIONS. Become subject to,
or permit any of its Subsidiaries to become subject to, (including, without
limitation, by way of amendment to or

                                      -15-
<PAGE>

modification of) any agreement (other than the Credit Agreement) which by its
terms would (under any circumstances) restrict (A) the right of any Subsidiary
to make loans or advances or any dividends to, transfer property to, or repay
any Indebtedness owed to, the Company or another Subsidiary or (B) the Company's
right to perform the provisions of this Note (including, without limitation,
provisions relating to the payment or prepayment of principal and interest on
this Note).

5. INTERCREDITOR AGREEMENT.

         The Noteholder hereby acknowledges and agrees that the exercise of
remedies pursuant to paragraph 6 is, and shall at all times be, subject to the
limitations on the Noteholder's remedies set forth in the Intercreditor
Agreement.

6. EVENTS OF DEFAULT.

         (a) DEFINITION. For purposes of this Note, an Event of Default shall be
deemed to have occurred if

                  (i) The Company shall fail to pay any principal when due in
accordance with the terms hereof; or the Company shall fail to pay any interest
when due in accordance with the terms hereof, or any other amount payable
hereunder, within five days after any such interest or other amount becomes due
in accordance with the terms hereof; or

                  (ii) Any representation or warranty made or deemed made by the
Company in the Purchase Agreement or any Related Document or which is contained
in any certificate, document or financial or other statement furnished by it at
any time under or in connection with this Note, the Purchase Agreement or any
Related Document shall prove to have been incorrect in any material respect on
or as of the date made or deemed made; or

                  (iii) The Company shall default in the observance or
performance of any agreement contained in subparagraph 4(a) (vii) of this Note
or contained in the Purchase Agreement or any Related Document, subject to
applicable cure periods, if any; or

                  (iv) The Company shall default in the observance or
performance of any other agreement contained in this Note subject to 30 day cure
(other than as provided in subparagraphs (i) through (iii) of this paragraph);
or

                  (v) The Company or any of its Subsidiaries shall (A) default
in any payment of principal of any Indebtedness for borrowed money in excess of
$50,000 at the final maturity thereof; or (B) default in the observance or
performance of any other agreement or condition relating to any such
Indebtedness or any Guarantee Obligation in respect of any such Indebtedness or
contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event shall occur or condition exist, the effect of which
default or other event or condition is to cause such Indebtedness to become due
prior to its stated maturity or such Guarantee Obligation to become payable
(whether by the terms of any document evidencing such Indebtedness or Guarantee
Obligation, upon the election of any holder of Indebtedness or beneficiary of
any Guarantee Obligation or otherwise); or

                                      -16-
<PAGE>

                  (vi) (A) The Company or any of its Subsidiaries shall commence
any case, proceeding or other action (1) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or (2)
seeking appointment of a receiver, trustee, custodian, conservator or other
similar official for it or for all or any substantial part of its assets, or the
Company or any of its Subsidiaries shall make a general assignment for the
benefit of its creditors; or (B) there shall be commenced against the Company or
any of its Subsidiaries any case, proceeding or other action of a nature
referred to in clause (A) above which (1) results in the entry of an order for
relief or any such adjudication or appointment or (2) remains undismissed,
undischarged or unbonded for a period of 60 days; or (C) there shall be
commenced against the Company or any of its Subsidiaries any case, proceeding or
other action seeking issuance of a warrant of attachment, execution, distraint
or similar process against all or any substantial part of its assets which
results in the entry of an order for any such relief which shall not have been
vacated, discharged, or stayed or bonded pending appeal within 60 days from the
entry thereof; or (D) the Company or any of its Subsidiaries shall take any
action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (A), (B), or (C) above; or
(E) the Company or any of its Subsidiaries shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts as they
become due; or

                  (vii) (A) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (B) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect to any
Plan or any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Company or any Commonly Controlled Entity, (C) a Reportable Event shall occur
with respect to, or proceedings shall commence to have a trustee appointed, or a
trustee shall be appointed, to administer or to terminate, any Plan that is a
Single-Employer Plan, (D) any Plan that is a Single-Employer Plan shall
terminate for purposes of Title IV of ERISA, (E) the Company or any Commonly
Controlled Entity shall, or in the reasonable opinion of Noteholder is likely
to, incur any liability in connection with a withdrawal from, or the Insolvency
or Reorganization of, a Multiemployer Plan or (F) any other event or condition
shall occur or exist with respect to a Plan; and in each case in clauses (A)
through (F) above, such event or condition, together with all other such events
or conditions, if any, could reasonably be expected to have a Material Adverse
Effect; or

                  (viii) One or more judgments or decrees shall be entered
against the Company or any of its Subsidiaries involving in the aggregate a
liability (not fully covered by insurance) of $1,000,000 or more, and all such
judgments or decrees shall not have been vacated, discharged, stayed or bonded
pending appeal within 60 days from the entry thereof; or

                  (ix) (A) Any of the Security Documents shall cease, for any
reason, to be in full force and effect, or the Company or any Subsidiary which
is a party to any of the Security Documents shall so assert or (B) the Lien
created by any of the Security Documents shall cease to be enforceable and of
the same effect and priority purported to be created thereby, except to the
extent, if any, otherwise provided in the Intercreditor Agreement.

                                      -17-
<PAGE>

         (b)      CONSEQUENCES OF EVENTS OF DEFAULT.

                  (i) If any Event of Default has occurred, the interest rate on
this Note shall increase immediately by an increment of 1 percentage point(s) to
the extent permitted by law. Any increase of the interest rate resulting from
the operation of this subparagraph shall terminate as of the close of business
on the date on which no Events of Default exist.

                  (ii) If an Event of Default of the type described in
subparagraph 6(a) (vi) has occurred with respect to the Company, the aggregate
principal amount of this Note (together with all accrued interest thereon and
all other amounts due and payable with respect thereto) shall become immediately
due and payable without any action on the part of the Noteholder, and the
Company shall immediately pay to the Noteholder all amounts due and payable with
respect to this Note.

                  (iii) If any Event of Default has occurred (other than under
subparagraph 6(a) (vi)), the Noteholder may declare all or any portion of the
outstanding principal amount of this Note (together with all accrued interest
thereon and all other amounts due and payable with respect thereto) to be
immediately due and payable and may demand immediate payment of all or any
portion of the outstanding principal amount of this Note (together with all such
other amounts then due and payable).

                  (iv) The Noteholder shall also have any other rights which
such holder may have been afforded under any contract or agreement (including,
without limitation, the Security Documents) at any time and any other rights
which such holder may have pursuant to applicable law.

7. WAIVER OF CERTAIN RIGHTS. The Company hereby waives diligence, presentment,
protest and demand and notice of protest and demand, dishonor and nonpayment of
this Note, and expressly agrees that this Note, or any payment hereunder, may be
extended from time to time and that the holder hereof may accept security for
this Note or release security for this Note, all without in any way affecting
the liability of the Company hereunder.

8. ASSIGNMENT. The rights and obligations of the Company and the Noteholder
shall be binding upon and benefit the permitted successors, assigns and
transferee of the parties; provided that in no event shall the Company assign
its rights hereunder without the prior written consent of the Noteholder. The
Noteholder shall provide the Company with notice of any assignment or transfer
of Noteholder's rights hereunder.

9. AMENDMENT AND WAIVER. Except as otherwise expressly provided herein, the
provisions of this Note may be amended and the Company may take any action
herein prohibited, or omit to perform any act herein required to be performed by
it, only if the Company has obtained the written consent of the Noteholder.

10. DEFINITIONS. For purposes of this Note, the following capitalized terms have
the following meaning:

                                      -18-
<PAGE>

         "CAPITAL STOCK" shall mean any and all shares, interests,
participations or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person (other than
a corporation) and any and all warrants or options to purchase any of the
foregoing.

         "CASH EQUIVALENTS" shall mean (a) securities with maturities of one
year or less from the date of acquisition issued or fully guaranteed or insured
by the United States Government or any agency thereof, (b) certificates of
deposit and eurodollar time deposits with maturities of one year or less from
the date of acquisition and overnight bank deposits of any commercial bank
having capital and surplus in excess of $250,000,000, or party to the Credit
Agreement (c) repurchase obligations of any commercial bank satisfying the
requirements of clause (b) of this definition, having a term of not more than 30
days with respect to securities issued or fully guaranteed or insured by the
United States Government, (d) commercial paper of a domestic issuer rated at
least A-2 by Standard and Poor's Ratings Group ("S&P") or P-2 by Moody's
Investors Service, Inc. ("Moody's"), (e) securities with maturities of one year
or less from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States or by any political subdivision
or taxing authority of any such state, commonwealth or territory or by any
foreign government, the securities of which state, commonwealth, territory,
political subdivision, taxing authority or foreign government (as the case may
be) are rated at least A by S&P or A by Moody's, (f) securities with maturities
of one year or less from the date of acquisition backed by standby letters of
credit issued by any commercial bank satisfying the requirements of clause (b)
of this definition or (g) shares of money market mutual or similar funds which
invest exclusively in assets satisfying the requirements of clauses (b) through
(f) of this definition;

         "COMMONLY CONTROLLED ENTITY" shall mean an entity, whether or not
incorporated, which is under common control with the Company within the meaning
of Section 4001 of ERISA or is part of a group which includes the Company and
which is treated as a single employer under Section 414 of the Code.

         "CONSOLIDATED LEASE EXPENSE" shall mean for any period, the aggregate
amount of fixed and contingent rentals payable by the Company and its
Subsidiaries for such period with respect to leases of real and personal
property, determined in accordance with GAAP on a consolidated basis.

         "DEFAULT" shall mean any of the events specified in paragraph 6,
whether or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.

         "EMPLOYEE BENEFIT PLAN" shall have the meaning set forth in Section
3(3) of ERISA.

         "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.

         "EVENT OF DEFAULT" shall mean each of the events described in paragraph
6; PROVIDED, HOWEVER, that any requirement for the giving of notice, the lapse
of time, or both, or any other condition, has been satisfied.

                                      -19-
<PAGE>

         "FINANCING LEASE" shall mean any lease of property, real or personal,
the obligations of the lessee in respect of which are required in accordance
with GAAP to be capitalized on a balance sheet of the lessee.

         "GUARANTEE OBLIGATION" shall mean as to any Person (the "GUARANTEEING
PERSON"), any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to induce
the creation of which the guaranteeing person has issued a reimbursement,
counterindemnity or similar obligation, in either case guaranteeing or in effect
guaranteeing any Indebtedness, leases, dividends or other obligations (the
"PRIMARY OBLIGATIONS") of any other third Person (the "PRIMARY OBLIGOR") in any
manner, whether directly or indirectly, including, without limitation, any
obligation of the guaranteeing person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for the purchase
or payment of any such primary obligation or (2) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the owner of any such
primary obligation against loss in respect thereof; PROVIDED, HOWEVER, that the
term Guarantee Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Guarantee Obligation of any guaranteeing person shall be deemed to be the lower
of (a) an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guarantee Obligation is made and (b) the
maximum amount for which such guaranteeing person may be liable pursuant to the
terms of the instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person may be
liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by the Company in good
faith.

         "INDEBTEDNESS" shall mean of any Person at any date, (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (other than current trade liabilities incurred in
the ordinary course of business and payable in accordance with customary
practices), (b) any other indebtedness of such Person which is evidenced by a
note, bond, debenture or similar instrument, (c) all obligations of such Person
under Financing Leases, (d) all obligations of such Person in respect of
acceptances issued or created for the account of such Person, (e) all
obligations in respect of deferred compensation and (f) all liabilities secured
by any Lien on any property owned by such Person even though such Person has not
assumed or otherwise become liable for the payment thereof.

         "INSOLVENCY" shall mean with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.

         "INTERCREDITOR AGREEMENT" shall mean the intercreditor agreement
entered into between the holders of Senior Obligations and Navistar, as amended
or otherwise modified from time to time.

                                      -20-
<PAGE>

         "LIEN" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement and any
Financing Lease having substantially the same economic effect as any of the
foregoing).

         "MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on (a)
the business, operations, property or condition (financial or otherwise) of the
Company and its Subsidiaries taken as a whole or (b) the validity or
enforceability of this Note or any of the other Related Documents (other than
the Intercreditor Agreement) or the rights or remedies of Noteholder hereunder
or thereunder.

         "MULTIEMPLOYER PLAN" shall mean a Plan which is a multiemployer plan as
defined in Section 400l(a)(3) of ERISA.

         "NOTEHOLDER" shall mean Navistar and its permitted successors,
transferees and assigns.

         "PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.

         "PERSON" shall mean an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.

         "PLAN" shall mean any Employee Benefit Plan in respect of which the
Company or a Commonly Controlled Entity is (or, if such plan were terminated at
such time, would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.

         "REFINANCING LOAN" shall mean any loan, extension of credit or other
financial accommodation (other than a revolving line of credit for working
capital purposes or loans for project finance use) made as of or after the
Closing to the Company by a Person other than the Noteholder, to refinance and
pay indefeasibly in full or in part the outstanding principal amount now or at
any time or times hereafter owing by the Company to Noteholder under this Note,
and which is secured by Company's equipment or other assets in which Noteholder
holds security interests on the date hereof, provided that (i) the proceeds of
such loan are disbursed directly to Noteholder pursuant to written authorization
given by Company to the Person making the loan; and (ii) to the extent such
Person intends to take a security interest in any of Company's equipment or
other assets, such person has entered into an intercreditor agreement with the
Noteholder in form and substance acceptable to Noteholder.

         "RELATED DOCUMENTS" shall mean this Note, the Security Documents and
the Intercreditor Agreement.

         "REORGANIZATION" shall mean with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.

                                      -21-
<PAGE>

         "REPORTABLE EVENT" shall mean any of the events set forth in Section
4043(b) of ERISA, other than those events as to which the thirty day notice
period is waived by regulation.

         "RESPONSIBLE OFFICER" shall mean the chief executive officer and the
president of the Company or, with respect to financial matters, the chief
financial officer of the Company.

         "SENIOR OBLIGATIONS" shall mean all obligations and liabilities of the
Company in respect of the loan agreement entered into by the Company in
connection with the Refinancing Loan (the "CREDIT AGREEMENT") and all loan and
security documents executed and delivered in connection therewith, and any
refinancing, refunding, renewals or extensions thereof (PROVIDED, that the
principal amount of such Indebtedness shall not be increased to more than the
principal amount outstanding as of the date of such loan agreement), including,
without limitation, any interest accruing subsequent to the commencement of any
bankruptcy, insolvency or similar proceedings with respect to the Company,
whether or not such interest constitutes an allowed claim in such proceeding.

         "SECURITY AGREEMENT" shall mean (i) the Open-End Mortgage Deed and
Security Agreement dated as of December 31, 1996 given by the Company in favor
of the Navistar and filed for record with the Franklin County, Ohio, Recorder,
and (ii) the Security Agreement dated as of December 31, 1996 given by the
Company in favor of Navistar.

         "SECURITY DOCUMENTS" shall mean the Security Agreement, and the
subsidiary guarantees contemplated hereby.

         "SINGLE-EMPLOYER PLAN" shall have the meaning set forth in Section
4001(a)(15) of ERISA.

         "SUBSIDIARY" shall mean as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests having
such power only by reason of the happening of a contingency) to elect a majority
of the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise qualified, all references to a "Subsidiary" or
to "Subsidiaries" in this Note shall refer to a Subsidiary or Subsidiaries of
the Company.

11. CANCELLATION. After all principal, accrued interest and all other amounts
hereunder at any time owed on this Note, including all Purchase Price
Adjustments, have been paid in full, this Note shall be surrendered to the
Company for cancellation, and the Noteholder shall take such action as the
Company may reasonably request to evidence such discharge and the release of the
Liens created by the Security Documents. Notwithstanding anything herein to the
contrary, it is expressly agreed that the outstanding principal balance under
this Note may be reduced to a zero balance without such repayment operating to
cancel this Note or extinguish or release the Liens, security title and security
interest created by the Security Documents. This Note and the Security Documents
shall remain in full force and effect as to any subsequent Purchase Price
Adjustments made after the zero balance without loss or priority until all
Indebtedness of the Company to the

                                      -22-
<PAGE>

Noteholder arising under or in connection with this Note, the Purchase
Agreement, or any other instrument or document now or at any time evidencing,
securing or guaranteeing the same is paid in full and satisfied. The Company
waives the operation of any applicable statute, law or regulation having a
contrary effect.

12. PAYMENT OF EXPENSES AND TAXES. The Company hereby agrees (a) to pay or
reimburse the Noteholder for all its costs and expenses incurred in connection
with the enforcement or preservation of any rights under this Note and the other
Related Documents after the occurrence of any Event of Default, including,
without limitation, the reasonable fees and disbursements of counsel to the
Noteholder, (b) to pay, indemnify, and hold the Noteholder harmless from, any
and all recording and filing fees and any and all liabilities with respect to,
or resulting from any delay in paying, stamp, excise and other similar taxes, if
any, which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, this Note and the other Related
Documents and (c) to pay, indemnify, and hold the Noteholder harmless from and
against any and all other liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Note and the other Related Documents,
including, without limitation, any of the foregoing relating to the violation
of, noncompliance with or liability under, any Environmental Law applicable to
the operations of the Company, any of its Subsidiaries or any of their
properties (all the foregoing in this clause (c), collectively, the "indemnified
liabilities"), PROVIDED that the Company shall have no obligation hereunder to
the Noteholder with respect to indemnified liabilities arising from (i) the
gross negligence or willful misconduct of the Noteholder, (ii) legal proceedings
commenced against the Noteholder by any security holder or creditor thereof
arising out of and based upon rights afforded any such security holder or
creditor solely in its capacity as such or (iii) any matter relating to the
Intercreditor Agreement. The agreements in this paragraph shall survive
repayment of this Note and all other amounts payable hereunder.

13. PAYMENTS. All payments to be made to the Noteholder shall be made in the
lawful money of the United States of America in immediately available funds and,
except as otherwise expressly provided herein or as may be required by law,
without any setoff, counterclaim, withholding or deduction whatsoever.

14. PLACE OF PAYMENT. Payments of principal and interest shall be delivered to
Navistar by wire transfer of immediately available funds to the following
account:

                                    Bank of America, Illinois
                                    231 South LaSalle Street
                                    Chicago, Illinois  60697
                                    ABA Routing Number:  071000039
                                    For the account of
                                    Navistar International Transportation Corp.

                                      -23-
<PAGE>

or to such other Noteholder at such other address or to the attention of such
other person or to such other account as specified by prior written notice to
the Company.

15. SEVERABILITY. Whenever possible, each provision of this Note shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Note is held to be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of this Note.

16. DESCRIPTIVE HEADINGS; INTERPRETATION. The descriptive headings of this Note
are inserted for convenience only and do not constitute a substantive part of
this Note. The use of the word "including" in this Note shall be by way of
example rather than by limitation.

17. GOVERNING LAW. ALL ISSUES AND QUESTIONS CONCERNING THE CONSTRUCTION,
VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS NOTE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS, WITHOUT GIVING
EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW RULES OR PROVISIONS (WHETHER OF
THE STATE OF ILLINOIS OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE
APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF ILLINOIS.

18. WAIVERS. TO THE EXTENT PERMITTED BY LAW, THE COMPANY HEREBY WAIVES PERSONAL
SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF
PROCESS BE MADE BY CERTIFIED REGISTERED MAIL DIRECTED TO IT AT ITS ADDRESS SET
FORTH IN PARAGRAPH 19 HEREOF. IN ADDITION, THE COMPANY HEREBY WAIVES TRIAL BY
JURY, ANY OBJECTIONS BASED ON FORUM NON CONVENIENS AND ANY OBJECTIONS TO VENUE
OF ANY ACTION ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE
TRANSACTIONS CONTEMPLATED BY OR THE RELATIONSHIPS ESTABLISHED IN CONNECTION WITH
THIS NOTE.

19. NOTICES. All notices, requests, demands, waivers and other communication
required or permitted to be given under this Note shall be in writing and shall
be deemed to have been duly given if (i) delivered personally, (ii) mailed by
first-class, registered or certified mail, return receipt requested, postage
prepaid, or (iii) sent by next-day or overnight mail or delivery or (iv) sent by
telecopy (with verbal confirmation of receipt) or telegram.

         IF TO NAVISTAR:
         ---------------

         455 North City Front Plaza Drive
         Chicago, IL  60611
         Attn:    Treasurer
         Fax Number: (312) 836-2573

         WITH A COPY, WHICH WILL
         NOT CONSTITUTE NOTICE TO
         NAVISTAR, TO:
         455 North City Front Plaza Drive
         Chicago, IL  60611

                                      -24-
<PAGE>

         Attn:    General Counsel
         Fax Number: (312) 836-3982

         and:

         Kirkland & Ellis
         200 East Randolph Drive
         Chicago, IL  60601
         Attn:    Michael Kerr
         Fax Number: (312) 861-2200
         Confirm Number: (312) 861-2356

         IF TO THE COMPANY:

         Core Materials Corporation
         800 Manor Park Drive
         Columbus, Ohio 43228
         Attn:  President
         Fax Number:  (614) 870-5051

         WITH A COPY, WHICH WILL
         NOT CONSTITUTE NOTICE TO
         THE COMPANY, TO:

         Brown & Wood LLP
         One World Trade Center
         New York, New York, 10048
         Attn:  Edward J. Fine, Esquire
         Fax Number:  (212) 839-5599

or, in each case, to such other Noteholder at such other address as may be
specified in writing to the other Parties.

All such notices, requests, demands, waivers and other communications shall be
deemed to have been received (i) if by personal delivery on the date after such
delivery, (ii) if by certified or registered mail, on the seventh business day
after the mailing thereof, (iii) if by next-day or overnight mail or delivery,
on the day delivered, or (iv) if by telecopy or telegram, on the next day
following the day on which such telecopy or telegram was sent, provided that a
copy is also sent by certified or registered mail.

20. BUSINESS DAYS. If any payment is due, or any time period for giving notice
or taking action expires, on a day which is a Saturday, Sunday or legal holiday
in the State of Illinois, the payment shall be due and payable on, and the time
period shall automatically be extended to, the next business day immediately
following such Saturday, Sunday or legal holiday, and interest shall continue to
accrue at the required rate hereunder until any such payment is made.

                                      -25-
<PAGE>

21. USURY LAWS. It is the intention of the Company and the Noteholder to conform
strictly to all applicable usury laws now or hereafter in force, and any
interest payable under this Note shall be subject to reduction to the amount not
in excess of the maximum legal amount allowed under the applicable usury laws as
now or hereafter construed by the courts having jurisdiction over such matters.
If the maturity of this Note is accelerated by reason of an election by the
holder hereof resulting from an Event of Default, voluntary prepayment by the
Company or otherwise, then earned interest may never include more than the
maximum amount permitted by law, computed from the date hereof until payment,
and any interest in excess of the maximum amount permitted by law shall be
canceled automatically and, if theretofore paid, shall at the option of the
holder hereof either be rebated to the Company or credited on the principal
amount of this Note, or if this Note has been paid, then the excess shall be
rebated to the Company. The aggregate of all interest (whether designated as
interest, service charges, points or otherwise) contracted for, chargeable, or
receivable under this Note shall under no circumstances exceed the maximum legal
rate upon the unpaid principal balance of this Note remaining unpaid from time
to time. If such interest does exceed the maximum legal rate, it shall be deemed
a mistake and such excess shall be canceled automatically and, if theretofore
paid, rebated to the Company or credited on the principal amount of this Note,
or if this Note has been repaid, then such excess shall be rebated to the
Company.

         IN WITNESS WHEREOF, the Company has executed and delivered this Note as
of December 31, 1996.

                           CORE MATERIALS CORPORATION

                           By: /s/ Richard R. Conte
                               ----------------------------

                           Its: President
                                ----------------------------

                                      -26-

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