Authorizing the execution of an agreement with South Bend Forge, Inc.

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the Issuer will enter into an acreement (the "Financing Agreement ").with respect to the Facility and the financing therefor with the Company. The Financing Agreement shall be in the form of a supplemental loan agreement whereby the Issuer will make a loan to provide funds to finance such additional acquisition, construction and installation. The Financing Agreement shall contain such terms and conditions as provided or permitted under the Act and desired by the purchasers of the Series 1980 Bonds; provided, however, that the Financing Agreement shall require payments sufficient to pay the principal of and premium, if any, and interest on the Series 1980 Bonds. In order to secure the payment of the principal of and premium, if anv, and interest on the Series 1980 Bonds, the parties hereto agree that the Facility will be subject to a mortgage in favor of the holders of the Series 1980 Bonds with such terms and conditions as may be provided or permitted under. the Act. Upon request of the purchasers of the Series 1980 Ponds, TBS Industries, Inc., the parent of the Company, shall give the holders of the Series 1980 Bands a guaranty of the full and prompt payment of the principal of and premium, if anv, and interest on the Series 1980 Bonds. The Issuer shall not have any financial responsibility with respect to the Series 1980 Bonds or the Facility except from the revenues and receipts derived by the Issuer with respect to the Series 1980 Fonds, the Financing Agreement and the Facility. -he parties hereto understand and agree that the Company will utilize the Facility to further the purposes of the Act. 2. Upon receipt of a request from the Company, the Issuer will promptly issue the Series 1980 Bonds, in an amount not exceeding Three Million Dollars ($3,000,000) and maturing at such times, bearing interest at such rate or