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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>0000950152-02-004111.txt : 20020513
<SEC-HEADER>0000950152-02-004111.hdr.sgml : 20020513
ACCESSION NUMBER:		0000950152-02-004111
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		9
CONFORMED PERIOD OF REPORT:	20020331
FILED AS OF DATE:		20020513

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SIFCO INDUSTRIES INC
		CENTRAL INDEX KEY:			0000090168
		STANDARD INDUSTRIAL CLASSIFICATION:	AIRCRAFT ENGINES & ENGINE PARTS [3724]
		IRS NUMBER:				340553950
		STATE OF INCORPORATION:			OH
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-05978
		FILM NUMBER:		02643631

	BUSINESS ADDRESS:	
		STREET 1:		970 E 64TH ST
		CITY:			CLEVELAND
		STATE:			OH
		ZIP:			44103
		BUSINESS PHONE:		2168818600

	MAIL ADDRESS:	
		STREET 1:		970 EAST 64TH STREET
		CITY:			CLEVELAND
		STATE:			OH
		ZIP:			44103

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	STEEL IMPROVEMENT & FORGE CO
		DATE OF NAME CHANGE:	19690520
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>l93943ae10-q.txt
<DESCRIPTION>SIFCO INDUSTRIES, INC.             10-Q
<TEXT>
<PAGE>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549



                                    FORM 10-Q



                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934



                 For the quarterly period ended: March 31, 2002

                         Commission File Number: 1-5978

                             SIFCO Industries, Inc.
             (Exact name of registrant as specified in its charter)


<TABLE>
<S>                                                          <C>
                  Ohio                                           34-0553950
    (State or other jurisdiction of                           (I.R.S. Employer
     incorporation or organization)                          Identification No.)

 970 East 64th Street, Cleveland, Ohio                             44103
(Address of principal executive offices)                         (Zip Code)
</TABLE>

                                 (216) 881-8600
              (Registrant's telephone number, including area code)


Indicated by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirement for the past 90 days. Yes X No

As of April 30, 2002, the issuer had 5,207,733 shares of common stock
outstanding.
<PAGE>
                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                     SIFCO INDUSTRIES, INC. AND SUBSIDIARIES
                 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                                   (Unaudited)
                  (Amounts in thousands, except per share data)

<TABLE>
<CAPTION>
                                                                       Three Months                      Six Months
                                                                           Ended                           Ended
                                                                         March 31                         March 31
                                                                -------------------------         -------------------------
                                                                  2002             2001             2002             2001
                                                                --------         --------         --------         --------
<S>                                                             <C>              <C>              <C>              <C>
Net sales                                                       $ 20,747         $ 27,726         $ 41,085         $ 52,911
Operating expenses:
    Cost of goods sold -- products and services                   18,075           22,859           36,332           43,610
    Cost of goods sold -- inventory impairment charges               335              214            3,149              317
    Selling, general and administrative expenses                   4,074            3,394            6,992            6,349
    Asset impairment charges                                        --               --              1,380             --
                                                                --------         --------         --------         --------
         Total operating expenses                                 22,484           26,467           47,853           50,276
                                                                --------         --------         --------         --------

               Operating income (loss)                            (1,737)           1,259           (6,768)           2,635

Interest income                                                      (73)            (105)            (165)            (177)
Interest expense                                                     203              261              429              552
Foreign currency exchange loss (gain), net                            47             (593)             152                2
Other income, net                                                    (37)             (15)            (147)             (41)
                                                                --------         --------         --------         --------
               Income (loss) before income tax provision          (1,877)           1,711           (7,037)           2,299
Income tax provision (benefit)                                      (544)             716           (2,014)           1,002
                                                                --------         --------         --------         --------

               Net income (loss)                                $ (1,333)        $    995         $ (5,023)        $  1,297
                                                                ========         ========         ========         ========

Net income (loss) per share (basic)                             $  (0.26)        $   0.19         $  (0.96)        $   0.25
Net income (loss) per share (diluted)                           $  (0.26)        $   0.19         $  (0.96)        $   0.25

Weighted-average number of common shares (basic)                   5,214            5,135            5,221            5,135
Weighted-average number of common shares (diluted)                 5,232            5,150            5,241            5,153
</TABLE>

See accompanying notes to unaudited consolidated condensed financial statements.


                                      -2-
<PAGE>
                     SIFCO INDUSTRIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                  (Amounts in thousands, except per share data)


<TABLE>
<CAPTION>
                                                                                      March 31           September 30
                                                                                        2002                 2001
                                                                                      --------             --------
                                                                                     (unaudited)
<S>                                                                                  <C>                  <C>
                                                       ASSETS

CURRENT ASSETS:
       Cash and cash equivalents                                                      $  8,172             $ 13,787
       Receivables, net                                                                 15,248               18,705
       Inventories                                                                      14,798               18,013
       Deferred income taxes                                                             1,709                1,709
       Prepaid expenses and other current assets                                           491                  578
                                                                                      --------             --------
                  Total current assets                                                  40,418               52,792

PROPERTY, PLANT AND EQUIPMENT, NET                                                      29,717               29,383

OTHER ASSETS:
       Funds held by trustee for capital project                                          --                     92
       Goodwill and other intangible assets, net                                         2,670                3,558
       Other assets                                                                        950                  771
                                                                                      --------             --------
                  Total other assets                                                     3,620                4,421
                                                                                      --------             --------

                      Total assets                                                    $ 73,755             $ 86,596
                                                                                      ========             ========

                                        LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
       Current maturities of long-term debt                                           $  1,430             $  1,430
       Accounts payable                                                                  5,242                6,717
       Other accrued liabilities                                                         5,296                7,702
                                                                                      --------             --------
                  Total current liabilities                                             11,968               15,849

LONG-TERM DEBT -- NET OF CURRENT MATURITIES                                             12,294               15,107

OTHER LONG-TERM LIABILITIES                                                              5,692                6,266

SHAREHOLDERS' EQUITY:
       Serial preferred shares, no par value                                              --                   --
       Common shares, par value $1 per share                                             5,308                5,308
       Additional paid-in capital                                                        6,783                6,783
       Retained earnings                                                                40,592               45,615
       Accumulated other comprehensive loss                                             (7,876)              (7,423)
       Unearned compensation -- restricted common shares                                  (414)                (460)
       Common shares held in treasury at cost                                             (592)                (449)
                                                                                      --------             --------
                  Total shareholders' equity                                            43,801               49,374
                                                                                      --------             --------

                      Total liabilities and shareholders' equity                      $ 73,755             $ 86,596
                                                                                      ========             ========
</TABLE>

See accompanying notes to unaudited consolidated condensed financial statements.


                                       -3-
<PAGE>
                     SIFCO INDUSTRIES, INC. AND SUBSIDIARIES
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                             (Amounts in thousands)

<TABLE>
<CAPTION>
                                                                                        Six Months Ended
                                                                                             March 31
                                                                                  -----------------------------
                                                                                    2002                 2001
                                                                                  --------             --------
<S>                                                                               <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income (loss)                                                             $ (5,023)            $  1,297
    Adjustments to reconcile net income to net cash
        provided by operating activities:
           Depreciation and amortization                                             2,449                2,259
           Loss (gain) on disposal of property and equipment                            (5)                  32
           Deferred income taxes                                                        29                 --
           Inventory and asset impairment charges                                    4,529                  317

           CHANGES IN OPERATING ASSETS AND LIABILITIES:
               Receivables                                                           3,457                1,050
               Inventories                                                              66               (1,533)
               Prepaid expenses and other current assets                                87                   (6)
               Other assets                                                           (364)                 (74)
               Accounts payable                                                     (1,474)               1,720
               Accrued liabilities                                                  (2,972)                 701
               Other long-term liabilities                                            (438)                (336)
                                                                                  --------             --------
                  Net cash provided by operating activities                            341                5,427

CASH FLOWS FROM INVESTING ACTIVITIES:
    Capital expenditures                                                            (3,107)              (1,885)
    Decrease (increase) in funds held by trustee for capital project                    92                  (17)
    Proceeds from sale of property, plant and equipment                                 24                 --
    Other                                                                              (55)                 (24)
                                                                                  --------             --------
                  Net cash used for investing activities                            (3,046)              (1,926)

CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from revolving credit agreement                                        12,770               14,532
    Repayments of revolving credit agreement                                       (14,983)             (11,553)
    Repayments of long-term debt                                                      (600)                (600)
    Repurchase of common shares                                                       (143)                --
    Issuance of common shares                                                           46                    7
                                                                                  --------             --------
                  Net cash provided by (used for) financing activities              (2,910)               2,386

Increase (decrease) in cash and cash equivalents                                    (5,615)               5,887
Cash and cash equivalents at the beginning of the period                            13,787                4,687
Effect of exchange rate changes on cash and cash equivalents                          --                    (61)
                                                                                  --------             --------
Cash and cash equivalents at the end of the period                                $  8,172             $ 10,513
                                                                                  ========             ========
Supplemental disclosure of cash flow information:
    Cash paid for interest                                                        $   (452)            $   (513)
    Cash paid for income taxes, net                                                   (764)                (373)
</TABLE>

See accompanying notes to unaudited consolidated condensed financial statements.


                                      -4-
<PAGE>
                     SIFCO INDUSTRIES, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                             (Amounts in thousands)
                                   (Unaudited)

1.       BASIS OF PRESENTATION

The unaudited consolidated condensed financial statements included herein
include the accounts of the Company and its wholly-owned subsidiaries. All
significant intercompany accounts and transactions have been eliminated. In the
opinion of management, all adjustments, which include only normal recurring
adjustments necessary for a fair presentation of the results of operations,
financial position, and cash flows for the periods presented, have been
included. These consolidated condensed financial statements should be read in
conjunction with the consolidated financial statements and related notes
included in the SIFCO Industries, Inc. ("Company") fiscal 2001 Annual Report on
Form 10-K. The results of operations for any interim period are not necessarily
indicative of the results to be expected for other interim periods or the full
year. Certain prior period amounts have been reclassified in order to conform to
current period classifications.

2.       INVENTORIES

Inventories consist of:

<TABLE>
<CAPTION>
                                              March 31         September 30
                                                2002               2001
                                               -------            -------
<S>                                            <C>                <C>
         Raw materials and supplies            $ 4,687            $ 5,714
         Work-in-process                         4,639              5,905
         Finished goods                          5,472              6,394
                                               -------            -------

               Total inventories               $14,798            $18,013
                                               =======            =======
</TABLE>

If the FIFO method had been used for the entire Company, inventories would have
been $2,918 and $2,884 higher than reported at March 31, 2002 and September 30,
2001, respectively.

3.       LONG-TERM DEBT

The maturity date of the Company's existing $10.0 million revolving credit
agreement with National City Bank was extended to March 31, 2004.

4.     COMPREHENSIVE INCOME (LOSS) AND ACCUMULATED OTHER COMPREHENSIVE LOSS

Total comprehensive income (loss) is as follows:

<TABLE>
<CAPTION>
                                                             Three Months Ended                      Six Months Ended
                                                                  March 31                                March 31
                                                         ---------------------------             ---------------------------
                                                          2002                2001                2002                 2001
                                                         -------             -------             -------             -------
<S>                                                      <C>                 <C>                 <C>                 <C>
Net income (loss)                                        $(1,333)            $   995             $(5,023)            $ 1,297
Foreign currency translation adjustment                      (20)             (1,529)                (54)                  5
Cumulative effect adjustment of interest rate
    swap agreement, net of tax                              --                  --                  --                   135
Interest rate swap adjustment                                 58                (128)                 98                (280)
Currency exchange contract adjustment                         (8)                (86)               (423)                (86)
Minimum pension liability adjustment                        --                  --                   (74)               --
                                                         -------             -------             -------             -------
           Total comprehensive income (loss)             $(1,303)            $  (748)            $(5,476)            $ 1,071
                                                         =======             =======             =======             =======
</TABLE>


                                      -5-
<PAGE>
The components of accumulated other comprehensive loss are as follows:

<TABLE>
<CAPTION>
                                                                March 31           September 30
                                                                  2002                 2001
                                                                 -------             -------
<S>                                                              <C>                 <C>
Foreign currency translation adjustment                          $(7,173)            $(7,119)
Interest rate swap adjustment                                       (206)               (304)
Currency exchange contract adjustment                               (423)               --
Minimum pension liability adjustment                                 (74)               --
                                                                 -------             -------
           Total accumulated other comprehensive loss            $(7,876)            $(7,423)
                                                                 =======             =======
</TABLE>

5.     BUSINESS SEGMENTS

The Company identifies reportable segments based upon distinct products
manufactured and services provided. The Turbine Component Services and Repair
("Repair") segment consists primarily of the repair and remanufacture of jet
engine (aerospace) turbine components. The Repair business is also involved in
the repair of industrial land-based gas turbine components and precision
machining for aerospace applications. The Aerospace Component Manufacturing
("ACM") segment consists of the production, heat treatment and some machining of
forgings in various alloys utilizing a variety of processes for application in
the aerospace industry as well as several other industrial markets. The Metal
Finishing segment is a provider of a specialized electroplating process called
brush plating, which is used to apply metal coatings to a selective area of a
component. The Company's reportable segments are separately managed.

Segment information is as follows:

<TABLE>
<CAPTION>
                                                                       Three Months Ended                  Six Months Ended
                                                                            March 31                           March 31
                                                                     -------------------------         -------------------------
                                                                       2002             2001             2002             2001
                                                                     --------         --------         --------         --------
<S>                                                                  <C>              <C>              <C>              <C>
Net sales:
   Turbine Component Services and Repair                             $  9,539         $ 14,742         $ 19,151         $ 28,518
   Aerospace Component Manufacturing                                    8,704           10,328           16,840           19,297
   Metal Finishing                                                      2,504            2,656            5,094            5,096
                                                                     --------         --------         --------         --------
       Consolidated net sales                                        $ 20,747         $ 27,726         $ 41,085         $ 52,911
                                                                     ========         ========         ========         ========

Operating income (loss):
    Turbine Component Services and Repair                            $   (883)        $    696         $ (6,167)        $  1,714
    Aerospace Component Manufacturing                                    (691)             592             (398)           1,050
    Metal Finishing                                                       307              485              672              783
    Corporate unallocated expenses                                       (470)            (514)            (875)            (912)
                                                                     --------         --------         --------         --------
       Consolidated operating income (loss)                            (1,737)           1,259           (6,768)           2,635

Interest expense, net                                                     130              156              264              375
Foreign currency exchange loss , net                                       47             (593)             152                2
Other (income) expense, net                                               (37)             (15)            (147)             (41)
                                                                     --------         --------         --------         --------
       Consolidated income (loss) before income tax provision        $ (1,877)        $  1,711         $ (7,037)        $  2,299
                                                                     ========         ========         ========         ========
</TABLE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

Management's Discussion and Analysis of Financial Condition and Results of
Operations may contain various forward-looking statements and includes
assumptions concerning the Company's operations, future results and prospects.
These forward-looking statements are based on current expectations and are
subject to risk and uncertainties. In connection with the "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995, the Company
provides this cautionary statement identifying important economic, political and
technological factors, among others, the absence or effect of which could cause
the actual results or events to differ materially from those set forth in or
implied by the forward-looking statements and related assumptions. Such factors
include the following: (1) future business environment, including capital and
consumer spending; (2) competitive factors, including the ability to replace
business which may be

                                      -6-
<PAGE>
lost due to increased direct involvement by the jet engine manufacturers into
turbine component services and repair markets; (3) successful procurement of new
repair process licenses; (4) fluctuating foreign currency (euros) exchange
rates; (5) successful development and market introductions of new products,
including an advanced coating technology and the continued development of
land-based turbine repair processes; (6) regressive pricing pressures on the
Company's products or services, with productivity improvements as the primary
way to maintain margins; (7) success with the further development of strategic
alliances, including joint ventures, with certain jet engine manufacturers for
turbine component repair services; (8) the long-term impact on the aerospace
industry of the September 11, 2001 terrorist attacks on the United States,
including collection risks due to the failure of airlines/engine over-haul
companies, reduced number of aircraft in service, and accelerated declining use
of older model jet engines such as the JT8D; (9) successful replacement of
declining demand for repair services for turboprop engine components with
component repair services for small turbojet engines utilized in the regional
airline market; (10) stability of government laws and regulations, including
taxes; and (11) stable governments and business conditions in economies where
business is conducted.

SIFCO Industries, Inc. and its subsidiaries engage in the production and sale of
a variety of metalworking processes, services and products produced primarily to
the specific design requirements of its customers. The processes and services
include forging, heat treating, coating, welding, machining and brush plating.
The products include forgings, machined forged parts and other machined metal
parts, remanufactured component parts for turbine engines, and brush plating
solutions and equipment.

A.       RESULTS OF OPERATIONS

SIX MONTHS ENDED MARCH 31, 2002 COMPARED WITH SIX MONTHS ENDED MARCH 31, 2001

Net sales in the first six months of fiscal 2002 decreased 22.4% to $41.1
million, compared with $52.9 million for the comparable period in fiscal 2001.
Loss before income tax benefit in the first six months of fiscal 2002 was $7.0
million, compared with income before income tax provision of $2.3 million for
the comparable period in fiscal 2001. For the first six months of fiscal 2002
the Company incurred a net loss of $5.0 million, or $0.96 per share (diluted),
compared with net income of $1.3 million, or $0.25 per share (diluted) for the
comparable period in fiscal 2001.

TURBINE COMPONENT SERVICES AND REPAIR GROUP ("REPAIR GROUP")

The Repair Group had net sales of $19.2 million in the first six months of
fiscal 2002, down $9.3 million, or 32.8%, from $28.5 million in the comparable
fiscal 2001 period. Component repair sales were down $5.0 million in the first
six months of fiscal 2002 compared with the same period in 2001. Demand for
component repairs for virtually all models of large jet engines, especially the
older models, was down in the first six months of fiscal 2002 compared with the
same period in fiscal 2001. The continued retirement and reduced utilization of
older generation aircraft that negatively impacted the Repair Group in fiscal
2001 was accelerated during the first six months of fiscal 2002. This was a
direct consequence of the September 11, 2001 terrorist attacks on the United
States, as many airlines chose to reduce capacity by retiring many of the older
aircraft in their fleets. In addition, the terrorist attacks have reduced
commercial flight demand, which in turn negatively impacts the demand for
repairs to newer model engines. Revenues from the sale of replacement parts that
complement component repair services were down $4.3 million in the first six
months of fiscal 2002 compared with the same period in 2001, due principally to
lower overall component repair volumes.

During the first six months of fiscal 2002, the Repair Group's selling, general
and administrative expenses increased $1.2 million to $4.0 million, or 21.0% of
net sales, from $2.8 million, or 9.8% of net sales, in the same period in fiscal
2001. Included in the $4.0 million of selling, general and administrative
expenses for the first six months of fiscal 2002 were $1.4 million of charges
related to goodwill and equipment impairment. The remaining $2.6 million of
selling, general and administrative expenses for the first six months of fiscal
2002 represented 13.8 % of net sales and benefited from a $0.2 million reduction
in bad debt expense when compared with the same period in 2001. Off-setting this
benefit, the Repair Group incurred $0.2 million of severance charges in the
first six months of fiscal 2002, associated with the reduction of the Repair
Group's capacity to repair components related to older generation jet engines,
principally JT8D.

Operating income (loss) in the first six months of fiscal 2002 decreased $7.9
million to a $6.2 million loss from $1.7 million of income in the same period in
fiscal 2001. Included in the decreased operating results for the first six
months of fiscal 2002 were increased charges during the first quarter of fiscal
2002 aggregating $4.1 million related to inventory write-down ($2.7 million),
the impairment of goodwill ($0.7 million) and the impairment of equipment ($0.7
million). During the

                                      -7-
<PAGE>
first quarter of fiscal 2002, the Repair Group performed an evaluation of its
existing operations in light of the current and anticipated effects of the
September 11, 2001 terrorist attacks on its business. The principal result of
this evaluation process was the decision to optimize the Repair Group's
operations by reducing certain capacity for the repairing of components related
to older generation jet engines, principally the JT8D. As a result of this
decision, the Repair Group recognized, during the first six months of fiscal
2002, the charges mentioned above. The remaining $3.6 million decrease in
operating results during the first six months of fiscal 2002 compared to the
same period in fiscal 2001 was primarily due to the overall lower net sales
levels.

AEROSPACE COMPONENT MANUFACTURING GROUP ("ACM GROUP")

Net sales in the first six months of fiscal 2002 declined 12.7% to $16.8
million, compared with $19.3 million in the same fiscal 2001 period.
Approximately $3.2 million of this decrease in net sales is attributable to a
decrease in the number of AE series new generation jet engines built by
Rolls-Royce for business and regional jets as a direct consequence of reduced
flight schedules, cancellation of aircraft orders, workforce reductions, and
declining financial performance of the airline industry in response to the
September 11, 2001 terrorist attacks on the United States. As a consequence of
the overall decline in the airline industry, net sales of commercial aircraft
airframe components declined approximately $0.9 million in the first six months
of fiscal 2002, compared with the same period in fiscal 2001. Net sales in the
first six months of fiscal 2002 were also negatively impacted by a $0.4 million
reduction in selling prices to the ACM Group's largest customer, Rolls-Royce
Corporation, that was implemented during the first quarter of fiscal 2002. These
decreases in net sales were partially offset by an approximately $1.8 million
increase in shipments of military airframe components.

Selling, general and administrative expenses in the first six months of fiscal
2002 were $2.0 million. The primary factor impacting the ACM Group's selling,
general and administrative expenses in the first six months of fiscal 2002 is a
$0.9 million charge incurred in connection with the settlement, during the
second quarter of fiscal 2002, of an employment action and a related claim that
the Company had filed against its insurance carrier for its failure to provide
coverage. Selling, general and administrative expenses before this legal
contingency accrual were $1.1 million in the first six months of both fiscal
2002 and fiscal 2001. Selling, general and administrative expenses were also
negatively impacted in the first six months of fiscal 2002 by higher variable
selling expense due to product mix, offset by lower travel and other
discretionary expenses.

The ACM Group's operating loss in the first six months of fiscal 2002 was $0.4
million. The primary factor impacting the ACM Group's operating results in the
first six months of fiscal 2002 is the $0.9 million legal contingency accrual
mentioned above. For the first six months of fiscal 2002 the ACM Group's
operating income before legal contingency accrual was $0.5 million, or 2.7% of
net sales, compared with $1.0 million, or 5.4% of net sales in the same fiscal
2001 period. The ACM Group's operating income was also negatively impacted in
the first six months of fiscal 2002 by a $0.4 million reduction in selling
prices to Rolls-Royce Corporation, its largest customer, that was implemented
during the first quarter of fiscal 2002 and is expected to affect future
periods. The Company believes that the impact of this selling price reduction
may be at least partially offset in future periods by the implementation of
several cost savings initiatives that the Company is pursuing. The ACM Group's
operating income in the first six months of fiscal 2002 also was negatively
impacted by the overall lower net sales level.

Due to the overall declining financial performance of the airline industry in
response to the September 11, 2001 terrorist attacks on the United States, the
ACM Group's backlog as of March 31, 2002 decreased to $25.6 million, compared
with $28.0 million as of September 30, 2001. Approximately $2.5 million is
scheduled for delivery beyond the next twelve months. All orders are subject to
modification or cancellation by the customer with limited charges. The Company
believes that backlog may not necessarily be indicative of actual sales for any
succeeding period.

METAL FINISHING GROUP

Net sales were $5.1 million in the first six months of both fiscal 2002 and
2001. In the first six months of fiscal 2002 product net sales, consisting of
brush plating equipment and solutions, declined $0.4 million, or 12.2%, to $2.8
million. Product net sales continued the decline that began in the first quarter
of fiscal 2002 due to the overall economic weakness in aerospace, steel,
railroad and pulp and paper industries. Contract service net sales increased
$0.4 million, or 20.6%, to $2.2 million in the first six months of fiscal 2002.
Contract service net sales benefited from several large contracts in the first
quarter of fiscal 2002.


                                      -8-
<PAGE>
The Metal Finishing Group's operating income in the first six months of fiscal
2002 was $0.7 million, or 13.2% of net sales, compared with $0.8 million, or
15.4% of net sales in the comparable period in fiscal 2001. Operating income in
the first six months of fiscal 2002 was negatively impacted by a shift in the
mix of contract service sales towards smaller contracts that, by their nature,
tend to be less profitable. Operating income in the first six months of fiscal
2002 also was negatively impacted by additional fixed costs associated with a
new facility that opened in fiscal 2002. Selling, general and administrative
expenses were $1.5 million in the first six months of both fiscal 2002 and 2001.
Selling, general and administrative expenses in the first six months of fiscal
2002 benefited from lower advertising and travel expenditures, offset by higher
compensation and other administrative expenses. The Company does not necessarily
anticipate experiencing similar levels of expenditures for advertising and
travel in future periods as business activity returns to historical levels.

CORPORATE UNALLOCATED EXPENSES

Corporate unallocated expenses, consisting of corporate salaries and benefits,
legal and professional and other corporate expenses, were $0.9 million in the
first six months of both fiscal 2002 and 2001. Lower expenses related to
management incentive expense and legal and professional expense favorably
impacted corporate unallocated expenses. Higher compensation, benefit and
consulting expenses partially offset these decreases.

OTHER/GENERAL

Interest income was $0.2 million in the first six months of both fiscal 2002 and
2001. Higher average cash and cash equivalent balances outstanding during the
first six months of fiscal 2002 compared with the comparable period in fiscal
2001 were offset by lower interest rates during this period compared with the
comparable period in fiscal 2001. Interest expense for the first six months of
fiscal 2002 was $0.4 million, compared with $0.6 million in the first six months
of fiscal 2001. The decrease in interest expense is attributable to overall
lower borrowings under the Company's revolving credit agreement, as well as
lower interest rates.

Foreign currency exchange loss was $0.2 million in the first six months of
fiscal 2002, compared with $0.002 million in the comparable period of fiscal
2001. Effective October 1, 2001, the Company changed the functional currency of
its Irish subsidiary from the euro to the U.S. dollar. The functional currency
was changed because a substantial majority of the subsidiary's transactions are
now denominated in U.S. dollars. Other income increased $0.1 million due to an
increase in the amount of income from Irish government agency grants that was
recognized by the Company's Irish subsidiary, as well as a one-time gain from
the sale of the ACM Group's interest in certain natural gas wells.

The Company's consolidated income tax benefit of $2.0 million results in an
effective tax benefit rate of 28.6% in the first six months of fiscal 2002. The
Company did not recognize, in the first six months of fiscal 2002, a U.S. income
tax benefit for losses incurred by certain of the Company's non-U.S.
subsidiaries, as such losses reduce the accumulated earnings of a subsidiary,
but do not currently reduce any U.S. income taxes.

THREE MONTHS ENDED MARCH 31, 2002 COMPARED WITH THREE MONTHS ENDED MARCH 31,
2001

Net sales in the second quarter of fiscal 2002 decreased 25.2% to $20.7 million
compared with $27.7 million for the comparable period in fiscal 2001. Loss
before income tax benefit was $1.9 million in the second quarter of fiscal 2002
compared with income before income tax provision of $1.7 million for the
comparable period in fiscal 2001. In the second quarter of fiscal 2002 the
Company incurred a net loss of $1.3 million, or $0.26 per share (diluted),
compared with net income of $1.0 million, or $0.19 per share (diluted) for the
comparable period in fiscal 2001.

TURBINE COMPONENT SERVICES AND REPAIR GROUP ("REPAIR GROUP")

The Repair Group had net sales of $9.5 million in the second quarter of fiscal
2002, down $5.2 million, or 35.3%, from $14.7 million in the comparable fiscal
2001 period. Component repair sales were down $2.9 million in the second quarter
of fiscal 2002 compared with the same period in fiscal 2001. Demand for
component repairs for virtually all models of large jet engines, especially the
older models, was down in the second quarter of fiscal 2002 compared with the
same period in fiscal 2001. The continued retirement and reduced utilization of
older generation aircraft that negatively impacted the Repair Group in fiscal
2001 was accelerated during the second quarter of fiscal 2002. This was a direct
consequence of the September 11, 2001 terrorist attacks on the United States as
many airlines chose to reduce capacity by retiring many of the older aircraft in
their fleets. In addition, the terrorist attacks have reduced commercial flight
demand, which in

                                      -9-
<PAGE>
turn negatively impacts the demand for repairs to newer model engines. Revenues
from the sale of replacement parts that complement component repair services
were down $2.3 million in the second quarter of fiscal 2002 compared with the
same period in fiscal 2001, due principally to lower overall component repair
volumes.

During the second quarter of fiscal 2002, the Repair Group's selling, general
and administrative expenses decreased $0.1 million to $1.4 million, or 15.0% of
net sales, from $1.5 million, or 10.6% of net sales, in the same period in
fiscal 2001. Selling, general and administrative expenses for the second quarter
of fiscal 2002 benefited from a $0.3 million reduction in bad debt expense when
compared with the same period in 2001. Partially off-setting this benefit, the
Repair Group incurred $0.1 million of severance charges in the second quarter of
fiscal 2002, associated with the reduction of the Repair Group's capacity to
repair components related to older generation jet engines, principally JT8D.

Operating income (loss) in the second quarter of fiscal 2002 decreased $1.6
million to a $0.9 million loss from $0.7 million of income in the same period in
fiscal 2001. Included in the decreased operating results for the second quarter
of fiscal 2002 were increased charges of $0.2 million related to inventory
write-down. The remaining decrease in operating results during the second
quarter of fiscal 2002 compared to the same period in fiscal 2001 was primarily
due to the overall lower net sales level.

AEROSPACE COMPONENT MANUFACTURING GROUP ("ACM GROUP")

Net sales in the second quarter of fiscal 2002 decreased 15.7% to $8.7 million,
compared with $10.3 million in the same fiscal 2001 period. The decrease in net
sales is attributable to a decrease in the number of AE series new generation
jet engines built by Rolls-Royce for business and regional jets as a direct
consequence of the reduced flight schedules, cancellation of aircraft orders,
workforce reductions, and declining financial performance of the airline
industry in response to the September 11, 2001 terrorist attacks on the United
States. As a consequence of the overall decline in the airline industry, net
sales of commercial aircraft airframe components declined as well in the second
quarter of fiscal 2002, compared with the same period in fiscal 2001. Net sales
in the second quarter of fiscal 2002 were also negatively impacted by a $0.2
million reduction in selling prices to the ACM Group's largest customer,
Rolls-Royce Corporation, that was implemented during the first quarter of fiscal
2002. These decreases in net sales were partially offset by an increase in
shipments of military airframe components.

Selling, general and administrative expenses in the second quarter of fiscal
2002 were $1.4 million. The primary factor impacting the ACM Group's selling,
general and administrative expenses in the second quarter of fiscal 2002 is a
$0.9 million charge incurred in connection with the settlement, during the
second quarter of fiscal 2002, of an employment action and a related claim that
the Company had filed against its insurance carrier for its failure to provide
coverage. Selling, general and administrative expenses before this legal
contingency accrual were $0.6 million in the second quarter of fiscal 2002 and
fiscal 2001. Selling, general and administrative expenses were also negatively
impacted in the first six months of fiscal 2002 by higher variable selling
expense due to product mix, offset by lower travel and other discretionary
expenses.

The ACM Group's operating loss in the second quarter of fiscal 2002 was $0.7
million. The primary factor impacting the ACM Group's operating results in the
second quarter of fiscal 2002 is the $0.9 million legal contingency accrual
mentioned above. For the second quarter of fiscal 2002 the ACM Group's operating
income before legal contingency accrual was $0.2 million, or 1.8% of net sales,
compared with $0.6 million, or 5.7% of net sales in the same fiscal 2001 period.
The ACM Group's operating income was also negatively impacted in the second
quarter of fiscal 2002 by a $0.2 million reduction in selling prices to Rolls-
Royce Corporation, its largest customer, that was implemented during the first
quarter of fiscal 2002 and is expected to impact future periods. The Company
believes that the impact of this selling price reduction may be at least
partially offset in future periods by the implementation of several cost savings
initiatives that the Company is pursuing. The ACM Group's operating income in
the second quarter of fiscal 2002 also was negatively impacted by the overall
lower net sales level.

METAL FINISHING

Net sales were $2.5 million in the second quarter of fiscal 2002, compared with
$2.7 for the comparable period in fiscal 2001. In the second quarter of fiscal
2002 product net sales, consisting of brush plating equipment and solutions,
declined $0.2 million, or 11.9%, to $1.4 million. Product net sales continued
the decline that began in the first quarter of

                                      -10-
<PAGE>
fiscal 2002 due to the overall economic weakness in aerospace, steel, railroad
and pulp and paper industries. Contract service net sales were $1.0 million in
the second quarters of both fiscal 2002 and 2001.

The Metal Finishing Group's operating income in the second quarter of fiscal
2002 was $0.3 million, or 12.3% of net sales, compared with $0.5 million, or
18.3% of net sales in the comparable period in fiscal 2001. Operating income in
the second quarter of fiscal 2002 was negatively impacted by a shift in the mix
of contract service sales towards smaller contracts that, by their nature, tend
to be less profitable. Operating income in the second quarter of fiscal 2002
also was negatively impacted by additional fixed costs associated with a new
facility that opened in fiscal 2002. Selling, general and administrative
expenses were $0.7 million in the second quarter of fiscal 2002, compared with
$0.8 million in the same period in fiscal 2001. Selling, general and
administrative expenses in the second quarter of fiscal 2002 benefited from
lower advertising and travel expenditures, offset by higher compensation and
other administrative expenses. The Company does not necessarily anticipate
experiencing similar levels of expenditures for advertising and travel in future
periods as business activity returns to historical levels.

CORPORATE UNALLOCATED EXPENSES

Corporate unallocated expenses, consisting of corporate salaries and benefits,
legal and professional and other corporate expenses, were $0.5 million in the
second quarter of both fiscal 2002 and 2001. Lower expenses related to
management incentive expense and legal and professional expense favorably
impacted corporate unallocated expenses. Higher compensation, benefits, public
company and consulting expenses partially offset these decreases.

OTHER/GENERAL

Interest income was $0.1 million in the second quarter of both fiscal 2002 and
2001. Higher average cash and cash equivalent balances outstanding during the
second quarter of fiscal 2002 compared with the comparable period in fiscal 2001
were offset by lower interest rates during this period compared with the
comparable period in fiscal 2001. Interest expense for the second quarter of
fiscal 2002 was $0.2 million, compared with $0.3 million in the second quarter
of fiscal 2001. The decrease in interest expense is attributable to overall
lower borrowings under the Company's revolving credit agreement, as well as
lower interest rates.

Foreign currency exchange loss was $0.05 million in the second quarter of fiscal
2002 compared with foreign currency exchange income of $0.6 million in the
second quarter of fiscal 2001. Effective October 1, 2001, the Company changed
the functional currency of its Irish subsidiary from the euro to the U.S.
dollar. The functional currency was changed because a substantial majority of
the subsidiary's transactions are now denominated in U.S. dollars.

The Company's consolidated income tax benefit of $0.5 million results in an
effective tax benefit rate of 29.0% in the second quarter of fiscal 2002. The
Company did not recognize, in the second quarter of fiscal 2002, a U.S. income
tax benefit for losses incurred by certain of the Company's non-U.S.
subsidiaries, as such losses reduce the accumulated earnings of a subsidiary,
but do not currently reduce any U.S. income taxes.

B.       LIQUIDITY AND CAPITAL RESOURCES

Cash and cash equivalents decreased during the first six months of fiscal 2002
to $8.2 million from $13.8 million at September 30, 2001. At present,
essentially all of the Company's cash and cash equivalents are in the possession
of its non-U.S. subsidiaries and relate to undistributed earnings of these
non-U.S. subsidiaries. During the first six months of fiscal 2002, the Company
received a distribution of $2.5 million from one of its non-U.S. subsidiaries.
This distribution was utilized to repay a portion of the outstanding balance
under the Company's revolving credit agreement.

Cash flow activity for the first six months of fiscal 2002 is presented in the
Consolidated Condensed Statement of Cash Flows. Due to lower net sales, cash was
provided by a $1.6 million decrease in the ACM Group's accounts receivable, as
well as a $2.0 million decrease in the Repair Group's accounts receivable,
offset by an increase in the Metal Finishing Group's accounts receivable of $0.1
million. ACM Group inventories increased $0.2 million in the first six months of
fiscal 2002, offset by a $0.3 million decrease in the Repair Group's
inventories. The combined $4.4 million decrease in accounts payable and accrued
liabilities is due primarily to lower operating expenses and inventory
purchases, the payment of fiscal 2001 incentives and lower overall purchasing
activity during the first six months of fiscal 2002 due to

                                      -11-
<PAGE>
lower sales. Working capital was $28.4 million at March 31, 2002, compared with
$36.9 million at September 30, 2001. The current ratio was 3.4 and 3.3 at March
31, 2002 and September 30, 2001, respectively.

Capital expenditures were $3.1 million in the first six months of fiscal 2002,
compared with $1.9 million in the comparable period in fiscal 2001. The Company
anticipates making a total of $5.0 million of capital expenditures during fiscal
2002. These capital expenditures consist of expenditures that will expand and
enhance the Repair Group's turbine repair capabilities, provide other new
equipment and upgrade existing equipment. The Company's projection of capital
expenditures for fiscal 2002 increased by $1.8 million from its previous
projection due primarily to $1.7 million of projected expenditures that will
enhance the Company's land-based turbine repair services.

The Company's long-term debt as a percentage of equity at March 31, 2002 was
28.1%, compared with 30.6% at September 30, 2001. At March 31, 2002, the Company
had $2.8 million outstanding against its $10.0 million revolving credit
agreement. The maturity date of the Company's $10.0 million revolving credit
agreement with National City Bank was extended to March 31, 2004.

During the first six months of fiscal 2002, the Company repurchased 29,300
shares of its Common Shares. The total number of shares repurchased under the
Company's 100,000 Common Share repurchase program, approved by the Board of
Directors, is 100,000. No dividends were declared during the first six months of
fiscal 2002.

The Company believes that the funds available under its revolving credit
facility and anticipated funds generated from its operations will be adequate to
meet its liquidity requirements through the foreseeable future.

C.       EFFECTS OF FOREIGN CURRENCY AND INFLATION

The Company operates internationally and enters into transactions denominated in
non-U.S. dollar currencies. As a result, the Company is subject to the
variability that arises from exchange rate movements. The impact of changes in
exchange rates on the operating results of the Company was discussed previously.

The Company believes that inflation has not materially affected its results of
operations in the first six months of fiscal 2002 and does not expect inflation
to be a significant factor for the balance of fiscal 2002.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In the ordinary course of business, the Company is subject to foreign currency
and interest rate risk. The risks primarily relate to the sale of the Company's
products in transactions denominated in non-U.S. dollar currencies (primarily
the euro); the payment, in local currency, of wages and other costs related to
the Company's non-U.S. operations; and changes in interest rates on the
Company's long-term debt obligations. The Company does not hold or issue
financial instruments for trading purposes.

FOREIGN CURRENCY RISK

The U.S. dollar is the functional currency for all of the Company's U.S.
operations. Effective October 1, 2001, the Company changed the functional
currency of its Irish subsidiary from the euro to the U.S. dollar. The
functional currency was changed because a substantial majority of the
subsidiary's transactions are now denominated in U.S. dollars. For these
operations, all gains and losses from completed currency transactions are
included in income currently. For the Company's other non-U.S. subsidiaries, the
functional currency is the local currency. Assets and liabilities are translated
into U.S. dollars at the rates of exchange at the end of the period and revenues
and expenses are translated using average rates of exchange. Foreign currency
translation adjustments are reported as a component of accumulated other
comprehensive income.

Historically, the Company has been able to mitigate the impact of foreign
currency risk by means of hedging such risk through the use of foreign currency
exchange contracts. However, such risk is mitigated only for the periods for
which the Company has foreign currency exchange contracts in effect, and only to
the extent of the U.S. dollar amounts of such contracts. At March 31, 2002, the
Company had several forward exchange contracts outstanding, for durations of up
to six months, to sell U.S. dollars aggregating $8.6 million. A ten percent
strengthening in the value of the U.S. dollar,

                                      -12-
<PAGE>
relative to the currencies in which the forward exchange contracts outstanding
at March 31, 2002 are denominated, would result in a $0.8 million loss in value.

During the third quarter of fiscal 2002, the Company entered into a number of
additional foreign currency exchange contracts expiring through June 2003 to
sell U.S. dollars aggregating $10.9 million.

INTEREST RATE RISK

The Company's primary interest rate risk exposure results from the variable
interest rate mechanisms associated with the Company's long-term debt consisting
of a term note payable to the Company's bank, revolving credit agreement and
industrial development variable rate demand revenue bonds. This interest rate
exposure is managed in part by an interest rate swap agreement to fix the
interest rate on the term note payable to the Company's bank. If interest rates
were to increase 100 basis points (1%) from March 31, 2002 rates, and assuming
no changes in the amounts outstanding under the revolving credit agreement and
industrial development variable rate demand revenue bonds, the additional annual
interest expense to the Company would be approximately $0.1 million.

The Company's sensitivity analyses of the effects of changes in interest rates
do not consider the impact of a potential change in the level of variable rate
borrowings or derivative instruments outstanding that could take place if these
hypothetical conditions prevail.

                           PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

In May 1999, an employee ("Employee") filed an employment action against the
Company in conjunction with an injury suffered by the employee during 1998. In
March 2002, the Employee agreed to dismiss this claim in conjunction with
entering into a settlement agreement between the Employee, the Company and the
Company's insurance carrier. The Employee dismissed this claim in April 2002.
The Company issued payment in March 2002 equal to the remaining balance of its
self-insured retention, which balance was accrued in previous periods and,
therefore, did not impact the results of operations during the period in which
payment was made.

In connection with the preceding claim, the Company filed a complaint in the
Cuyahoga County Court of Common Pleas against the Company's insurance carrier on
the grounds that it has refused to provide indemnity to the Company for the
preceding employment action. The Company's complaint sought a declaratory
judgment that the insurance carrier owes a duty to indemnify the Company with
respect to the preceding action. In March 2002, the Company received a Ruling on
its Motion for Summary Judgment denying the Company's complaint. Management of
the Company believes that the Court's Ruling on its Motion for Summary Judgment
was not consistent with existing case law and, therefore, the Company intends to
appeal this decision. However, because the outcome of this appeal is uncertain
and the initial Ruling was unfavorable, the Company has provided $0.9 million in
its March 31, 2002 financial statements, the full amount of this contingent
obligation.

The Company is subject to routine litigation arising in the normal course of its
business. While the outcome of these proceedings cannot be predicted with
certainty, the Company does not expect these matters to have a material adverse
effect on the Company's consolidated financial position or results of
operations.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

At the Annual Meeting of Shareholders held on January 29, 2002, there were a
total of 4,865,445 shareholders voting either in person or by proxy. The
shareholders:

         A.       Approved an amendment to the Company's Code of Regulations to
                  decrease the number of directors from not less than nine nor
                  more than eleven to not less than six nor more than nine.
                  There were 3,902,191 votes cast for the amendment, 51,300
                  votes cast against the amendment, 28,041 abstentions and
                  883,913 broker non-votes.


                                      -13-
<PAGE>
         B.       Approved an amendment to the Company's Code of Regulations to
                  declassify the Board of Directors so that each director would
                  stand for re-election on an annual basis. There were 3,767,130
                  votes cast for the amendment, 185,129 votes cast against the
                  amendment, 29,273 abstentions and 883,913 broker non-votes.

         C.       Elected three directors to the Company's Board of Directors,
                  Michael S. Lipscomb, Hudson D. Smith and J. Douglas Whelan to
                  serve on the Board of Directors until the Company's Annual
                  Meeting in 2003.

                  The results of the voting for directors were as follows:

<TABLE>
<CAPTION>
                         Name                        Votes For              Votes Withheld
                         ----                        ---------              --------------
<S>                                                  <C>                    <C>
                  Michael S. Lipscomb                4,811,395                  54,050
                  Hudson D. Smith                    4,806,705                  58,740
                  J. Douglas Whelan                  4,814,017                  51,428
</TABLE>

                  The remaining directors of the Company whose term in office as
                  a director continued after the Annual Meeting were Jeffrey P.
                  Gotschall, Richard S. Gray, Charles H. Smith, Jr., and Thomas
                  J. Vild. Richard S. Gray, Charles H. Smith, Jr., and Thomas J.
                  Vild retired as directors of the Company effective with the
                  conclusion of the Annual Meeting. At a meeting of the Board of
                  Directors subsequent to the Annual Meeting, the Board of
                  Directors appointed P. Charles Miller and Alayne Reitman as
                  directors to serve until the 2003 Annual Meeting.

         D.       Approved an amendment to the Company's Articles of
                  Incorporation to eliminate cumulative voting rights of the
                  Company's shareholders. There were 3,439,136 votes cast for
                  the amendment, 516,162 votes cast against the amendment,
                  26,234 abstentions and 883,913 broker non-votes.

         E.       Approved the appointment of Arthur Andersen LLP as the
                  Company's auditors for fiscal year ending September 30, 2002.
                  There were 4,536,193 votes cast for the appointment, 285,715
                  votes cast against the appointment and 43,537 abstentions.

Georgeson Shareholder solicited proxies on behalf of the Company as set forth in
the Company's definitive proxy statement dated December 14, 2001.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

<TABLE>
<CAPTION>
Exhibit No.                                Description
- -----------                                -----------
<S>              <C>                                                                       <C>
(3)

     (a)         Third Amended Articles of Incorporation of SIFCO Industries, Inc.         *

     (b)         SIFCO Industries, Inc. Amended and Restated Code of Regulations           *
                 dated January 29, 2002
(4)

     (a)         Amended and Restated Reimbursement Agreement dated April 30, 2002         *
                 Between SIFCO Industries, Inc. and National City Bank

     (b)         Amended and Restated Credit Agreement Between SIFCO Industries,           *
                 Inc. and National City Bank dated April 30, 2002

     (c)         Promissory Note (Term Note) dated April 14, 1998 Between SIFCO            *
                 Industries, Inc. and National City Bank

     (d)         Loan Agreement Between Hillsborough County Industrial Development         *
                 Authority and SIFCO Industries, Inc., dated as of May 1, 1998
</TABLE>


                                      -14-
<PAGE>
<TABLE>
<S>              <C>                                                                       <C>
(10)

     (a)         1989 Key Employee Stock Option Plan, filed as Exhibit B of the
                 Company's Form S-8 dated January 9, 1990 and incorporated herein
                 by reference.
     (b)         Deferred Compensation Program for Directors and Executive                 *
                 Officers (as amended and restated April 26, 1984)

     (c)         SIFCO Industries, Inc. 1998 Long-term Incentive Plan, filed as
                 Appendix A of the Company's Schedule 14A dated December 21, 1998,
                 and incorporated herein by reference.

     (d)         SIFCO Industries, Inc. 1995 Stock Option Plan                             *
</TABLE>

         * Indicates filed with this Quarterly Report on Form 10(Q).

(b) Reports on Form 8-K

         The Company did not file a Current Report on Form 8-K in the second
quarter of fiscal 2002.

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereto duly authorized.

                                             SIFCO Industries, Inc.
                                                  (Registrant)


Date    May 13, 2002                       /s/ Jeffrey P. Gotschall
                                             Jeffrey P. Gotschall
                                                   Chairman,
                                                President and
                                           Chief Executive Officer



Date    May 13, 2002                        /s/ Frank A. Cappello
                                               Frank A. Cappello
                                            Vice President-Finance
                                         (Principal Financial Officer)



                                      -15-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.A
<SEQUENCE>3
<FILENAME>l93943aex3-a.txt
<DESCRIPTION>EXHIBIT 3(A)
<TEXT>
<PAGE>
                                                                   EXHIBIT 3 (a)


                     THIRD AMENDED ARTICLES OF INCORPORATION

                                       OF

                             SIFCO INDUSTRIES, INC.



         FIRST: The name of said corporation shall be SIFCO INDUSTRIES, INC.

         SECOND: Said corporation is to be located at Cleveland, in Cuyahoga
County, Ohio.

         THIRD: Said corporation is formed for the purpose of carrying on a
general manufacturing business within and without the State of Ohio, including
the forging, casting, machining, manufacturing, selling and treating of metals
and metal products, and the manufacture and sale of compounds for the treating
of metals, and the manufacturing, building, forging, casting and machining
various metals and metal parts, accessories, patterns, dies, tools, and all
other metal products of every kind and description, and the manufacturing of all
such other products as may be incidental thereto.

         As incidental thereto and in connection therewith, said corporation is
to have and exercise all the powers now or hereafter conferred by the laws of
the State of Ohio upon similar corporations, and in addition thereto and not in
limitation thereof, to purchase, lease, erect or otherwise acquire, exchange,
sell, let, mortgage, assign, transfer, pledge, or otherwise dispose of, own,
maintain, develop and improve any and all property, real, personal or mixed,
including plants, depots, factories, warehouses, stores, buildings and other
structures necessary to effect the purpose for which it is created; to acquire
the good will, rights and property, and to take over the whole or any part of
the assets and liabilities of any person, firm, association or corporation; to
purchase or otherwise acquire and hold shares of stock in other corporations,
domestic or foreign; to from time to time as it may be lawful so to do, sell,
lease, assign, mortgage, pledge, transfer or otherwise dispose of any or all of
its property; to from time to time as it may be lawful so to do, borrow money
for the purposes of the corporation and to issue, sell or pledge bonds, notes,
debentures and other obligations, and to secure the same by pledge or mortgage
of the whole or any part of the property or assets of the corporation, either
real or personal; to apply for, obtain, register, lease, or otherwise acquire
and to hold, own, use and operate, and to sell, assign and grant licenses in
respect of, or otherwise dispose of and deal with and turn to account any and
all inventions, improvements, formulae, processes, trademarks, trade-names,
copyrights, letters patent of the United States and of any and all foreign
governments and incorporeal rights of all kinds; and to do any and all such
other lawful things as may be necessary, useful or desirable in the judgment of
the corporation to carry out its business or to enhance the value of the
corporation's property or business.


         FOURTH: The number of shares which the Corporation is authorized to
have outstanding is 11,000,000 consisting of 1,000,000 Serial Preferred Shares
without Par Value (hereinafter called "Serial Preferred Shares") and 10,000,000
Common Shares of the Par Value of $1.00 each (hereinafter called "Common
Shares").

                                      -1-
<PAGE>

      Except as otherwise determined by the Board of Directors, no holder of
shares in this Corporation shall be entitled as such, as a matter of right, to
purchase or subscribe for any shares of the Corporation, or any obligation
convertible into or exchangeable for shares of the Corporation, whether now or
hereafter authorized, which the Corporation may at any time issue or sell or
offer for sale.

      Serial Preferred Shares and Common Shares shall have the following express
terms:

                                   DIVISION A

                  EXPRESS TERMS OF THE SERIAL PREFERRED SHARES

      SECTION 1. The Serial Preferred Shares may be issued from time to time in
one or more series. All Serial Preferred Shares shall be of equal rank and shall
be identical, except in respect of the matters that may be fixed by the Board of
Directors as hereinafter provided, and each share of each series shall be
identical with all other shares of such series, except as to the date from which
dividends are cumulative. Subject to the provisions of Sections 2 to 7, both
inclusive, of this Division, which provisions shall apply to all Serial
Preferred Shares, the Board of Directors hereby is authorized to cause such
shares to be issued in one or more series and with respect to each such series
prior to the issuance thereof to fix:

         (a)      The designation of the series, which may be by distinguishing
                  number, letter or title.

         (b)      The number of shares of the series, which number the Board of
                  Directors may (except where otherwise provided in the creation
                  of the series) increase or decrease (but not below the number
                  of shares thereof then outstanding).

         (c)      The annual dividend rate of the series.

         (d)      The dates at which dividends, if declared, shall be payable,
                  and the dates from which dividends shall be cumulative.

         (e)      The redemption rights and price or prices, if any, for shares
                  of the series.

         (f)      The terms and amount of any sinking fund provided for the
                  purchase or redemption of shares of the series.

         (g)      The amounts payable on shares of the series in the event of
                  any voluntary or involuntary liquidation, dissolution or
                  winding up of the affairs of the Corporation.

                                      -2-
<PAGE>

         (h)      Whether the shares of the series shall be convertible into
                  Common Shares, and, if so, the conversion price or prices, any
                  adjustments thereof, and all other terms and conditions upon
                  which such conversion may be made.

         (i)      Restrictions (in addition to those set forth in Sections 5(b)
                  and 5(c) of this Division) on the issuance of shares of the
                  same series or of any other class or series.

      The Board of Directors is authorized to adopt from time to time amendments
to the Articles of Incorporation fixing, with respect to each series, the
matters described in clauses (a) to (i), both inclusive, of this Section 1.

      SECTION 2. The holders of Serial Preferred Shares of each series, in
preference to the holders of Common Shares and of any other class of shares
ranking junior to the Serial Preferred Shares, shall be entitled to receive out
of any funds legally available and when and as declared by the Board of
Directors dividends in cash at the rate for such series fixed in accordance with
the provisions of Section 1 of this Division and no more, payable quarterly on
the dates fixed for such series. Such dividends shall be cumulative, in the case
of shares of each particular series, from and after the date or dates fixed with
respect to such series. No dividends may be paid upon or declared or set apart
for any of the Serial Preferred Shares for any quarterly dividend period unless
at the same time a like proportionate dividend for the same quarterly dividend
period, ratably in proportion to the respective annual dividend rates fixed
therefor, shall be paid upon or declared or set apart for all Serial Preferred
Shares of all series then issued and outstanding and entitled to receive such
dividend.

      SECTION 3. In no event so long as any Serial Preferred Shares shall be
outstanding shall any dividends, except a dividend payable in Common Shares or
other ranking junior to the Serial Preferred Shares, be paid or declared or any
distribution be made except as aforesaid on the Common Shares or any other
shares ranking junior to the Serial Preferred Shares, nor shall any Common
Shares or any other shares ranking junior to the Serial Preferred Shares be
purchased, retired or otherwise acquired by the Corporation (except out of the
proceeds of the sale of Common Shares or other shares ranking junior to the
Serial Preferred Shares received by the Corporation subsequent to January 1,
1969):

         (a) Unless all accrued and unpaid dividends on Serial Preferred Shares,
including the full dividends for the current quarterly dividend period, shall
have been declared and paid or a sum sufficient for payment thereof set apart;
and

         (b) Unless there shall be no arrearages with respect to the redemption
of Serial Preferred Shares of any series from any sinking fund provided for
shares of such series in accordance with the provisions of Section 1 of this
Division.

                                      -3-
<PAGE>

      SECTION 4. (a) The holders of Serial Preferred Shares of any series shall,
in case of voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Corporation, be entitled to receive in full out of the assets
of the Corporation, including its capital, before any amount shall be paid or
distributed among the holders of the Common Shares or any other shares ranking
junior to the Serial Preferred Shares, the amounts fixed with respect to the
shares of such series in accordance with Section 1 of this Division; plus an
amount equal to all dividends accrued and unpaid thereon to the date of payment
of the amount due pursuant to such liquidation, dissolution or winding up of the
affairs of the Corporation. In case the net assets of the Corporation legally
available therefor are insufficient to permit the payment upon all outstanding
Serial Preferred Shares of the full preferential amount to which they are
respectively entitled, then such net assets shall be distributed ratably upon
outstanding Serial Preferred Shares in proportion to the full preferential
amount to which each such share is entitled.

      After payment to holders of Serial Preferred Shares of the full
preferential amounts as aforesaid, holders of Serial Preferred Shares as such
shall have no right or claim to any of the remaining assets of the Corporation.

         (b) The merger or consolidation of the Corporation into or with any
other corporation or the merger of any other corporation into it, or the sale,
lease or conveyance of all or substantially all the property or business of the
Corporation, shall not be deemed to be a dissolution, liquidation or winding up,
voluntary or involuntary, for the purposes of this Section 4.

      SECTION 5. (a) The holders of Serial Preferred Shares shall be entitled to
one vote for each share of such stock upon all matters presented to the
shareholders; and except as otherwise provided herein or required by law, the
holders of Serial Preferred Shares and the holders of Common Shares shall vote
together as one class on all matters.

      If, and so often as, the Corporation shall be in default in the payment of
ten (10) full quarterly dividends (whether or not consecutive) on any series of
Serial Preferred Shares at the time outstanding, whether or not earned or
declared, the holders of Serial Preferred Shares of all series, voting
separately as a class and in addition to all other rights to vote for Directors,
shall be entitled to elect, as herein provided, two (2) members of the Board of
Directors of the Corporation; provided, however, that the holders of Serial
Preferred Shares shall not have or exercise such special class voting rights
except at meetings of the shareholders for the election of Directors at which
the holders of not less than fifty percent (50%) of the outstanding Serial
Preferred Shares of all series then outstanding are present in person or by
proxy; and provided further that the special class voting rights provided for
herein when the same shall have become vested shall remain so vested until all
accrued and unpaid dividends on the Serial Preferred Shares of all series then
outstanding shall have been paid, whereupon the holders of Serial Preferred
Shares shall be divested of their special class voting rights in respect of
subsequent elections of Directors, subject to the revesting of such special
class voting rights in the event hereinabove specified in this paragraph.

                                      -4-
<PAGE>

      In the event of default entitling the holders of Serial Preferred Shares
to elect two (2) Directors as above specified, a special meeting of the
shareholders for the purpose of electing such Directors shall be called by the
Secretary of the Corporation upon written request of, or may be called by, the
holders of record of at least fifteen percent (15%) of the Serial Preferred
Shares of all series at the time outstanding, and notice thereof shall be given
in the same manner as that required for the annual meeting of shareholders;
provided, however, that the Corporation shall not be required to call such
special meeting if the annual meeting of shareholders shall be held within
ninety (90) days after the date of receipt of the foregoing written request from
the holders of Serial Preferred Shares. At any meeting at which the holders of
Serial Preferred Shares shall be entitled to elect Directors, the holders of
fifty percent (50%) of the then outstanding Serial Preferred Shares of all
series, present in person or by proxy, shall be sufficient to constitute a
quorum, and the vote of the holders of a majority of such shares so present at
any such meeting at which there shall be such a quorum shall be sufficient to
elect the members of the Board of Directors which the holders of Serial
Preferred Shares are entitled to elect as hereinabove provided.

         (b) The affirmative vote of the holders of at least two-thirds of the
Serial Preferred Shares at the time outstanding, given in person or by proxy at
a meeting called for the purpose at which the holders of Serial Preferred Shares
shall vote separately as a class, shall be necessary to effect any one or more
of the following (but so far as the holders of Serial Preferred Shares are
concerned, such action may be effected with such vote):

                  (i) Any amendment, alteration or repeal of any of the
                  provisions of the Articles of Incorporation or of the
                  Regulations of the Corporation which affects adversely the
                  voting powers, rights or preferences of the holders of Serial
                  Preferred Shares; provided, however, that, for the purpose of
                  this clause (i) only, neither the amendment of the Articles of
                  Incorporation so as to authorize or create, or to increase the
                  authorized or outstanding amount of, Serial Preferred Shares
                  or of any shares of any class ranking on a parity with or
                  junior to the Serial Preferred Shares, nor the amendment of
                  the provisions of the Regulations so as to increase the number
                  of Directors of the Corporation shall be deemed to affect
                  adversely the voting powers, rights or preferences of the
                  holders of Serial Preferred Shares; and provided further, that
                  if such amendment, alteration or repeal affects adversely the
                  rights or preferences of one or more but not all series of
                  Serial Preferred Shares at the time outstanding, only the
                  affirmative vote of the holders of at least two-thirds of the
                  number of the shares at the time outstanding of the series so
                  affected shall be required;

                  (ii) The authorization or creation of, or the increase in the
                  authorized amount of, any shares of any class, or any security
                  convertible into shares of any class, ranking prior to the
                  Serial Preferred Shares; or

                  (iii) The purchase or redemption (for sinking fund purposes or
                  otherwise) of less than all of the Serial Preferred Shares
                  then outstanding except in accordance with a stock purchase
                  offer to all holders of record of Serial Preferred Shares,

                                      -5-
<PAGE>

                  unless all dividends upon all Serial Preferred Shares then
                  outstanding for all previous quarterly dividend periods shall
                  have been declared and paid or funds therefor set apart and
                  all accrued sinking fund obligations applicable thereto shall
                  have been complied with.

         (c) The affirmative vote of the holders of at least a majority of the
Serial Preferred Shares at the time outstanding, given in person or by proxy at
a meeting called for the purpose at which the holders of Serial Preferred Shares
shall vote separately as a class, shall be necessary to effect any one or more
of the following (but so far as the holders of Serial Preferred Shares are
concerned, such action may be effected with such vote):

                  (i) The consolidation of the Corporation with or its merger
                  into any other corporation unless the corporation resulting
                  from such consolidation or merger will have after such
                  consolidation or merger no class of shares either authorized
                  or outstanding ranking prior to the Serial Preferred Shares
                  except the same number of shares ranking prior to the Serial
                  Preferred Shares and having the same rights and preferences as
                  the shares of the Corporation authorized and outstanding
                  immediately preceding such consolidation or merger, and each
                  holder of Serial Preferred Shares immediately preceding such
                  consolidation or merger shall receive the same number of
                  shares, with the same rights and preferences, of the resulting
                  corporation or the redemption price of such shares; or

                  (ii) The authorization of any shares ranking on a parity with
                  the Serial Preferred Shares or an increase in the authorized
                  number of Serial Preferred Shares.

      SECTION 6. The holders of Serial Preferred Shares shall have no
pre-emptive right to purchase or have offered to them for purchase any shares or
other securities of the corporation, whether now or hereafter authorized.

      SECTION 7.  For the purpose of this Division A:

      Whenever reference is made to shares "ranking prior to the Serial
Preferred Shares" or "on a parity with the Serial Preferred Shares", such
reference shall mean and include all shares of the Corporation in respect of
which the rights of the holders thereof as to the payment of dividends or as to
distributions in the event of a voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation are given preference
over, or rank on an equality with (as the case may be) the rights of the holders
of Serial Preferred Shares; and whenever reference is made to shares "ranking
junior to the Serial Preferred Shares", such reference shall mean and include
all shares of the Corporation in respect of which the rights of the holders
thereof as to the payment of dividends and as to distributions in the event of a
voluntary or involuntary liquidation, dissolution or, winding up of the affairs
of the Corporation are junior and subordinate to the rights of the holders of
Serial Preferred Shares.

                                      -6-
<PAGE>

                                   DIVISION B

                       EXPRESS TERMS OF THE COMMON SHARES

      The Common Shares shall be subject to the express terms of the Serial
Preferred Shares and any series thereof. Each Common Share shall be equal to
every other Common Share. The holders of Common Shares shall be entitled to one
vote for each share upon all matters presented to the shareholders.

         FIFTH: The Corporation, by action of its Board of Directors, may
purchase any issued shares of the Corporation.


         SIXTH: These Third Amended Articles of Incorporation supersede the
heretofore existing Amended Articles of Incorporation.

         SEVENTH: No holder of shares of the Corporation shall be entitled to
vote cumulatively in the election of the directors of the Company.



                                      -7-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.B
<SEQUENCE>4
<FILENAME>l93943aex3-b.txt
<DESCRIPTION>EXHIBIT 3(B)
<TEXT>
<PAGE>
                                                                    EXHIBIT 3(b)
                         [LOGO: SIFCO INDUSTRIES, INC.]


                    AMENDED AND RESTATED CODE OF REGULATIONS
                    ----------------------------------------
                             (Last Amended 1/29/02)


                                    LOCATION

ARTICLE I.

         The principal office of the Company shall be in the City of Cleveland,
Cuyahoga County, Ohio. The Company may also have offices at such other places,
within or without the State of Ohio, as the Board of Directors may designate.

                             MEETING OF SHAREHOLDERS

ARTICLE II.

         All meetings of the shareholders shall be held at the principal office
of the company in the City of Cleveland, Ohio, or at such other place in
Cuyahoga County, Ohio, as may be directed by the Board of Directors.

ARTICLE III.

         The annual meeting of the shareholders for the election of directors
and the consideration of the reports to be laid before such meeting shall be
held on the third Friday in January, in each year, at 10:30 o'clock A.M.;
provided that by action taken before the preceding December the Board of
Directors may fix another time for the annual meeting in any year which shall be
not earlier than the 15th of January and not later than the 31st of January.
Special meetings of the shareholders may be called at any time by the Chairman
of the Board of Directors or by the President or by a majority of the members of
the Board of Directors, acting with or without a meeting, or by persons who hold
fifty percent (50%) or more of all of the shares outstanding and entitled to
vote at such shareholders' meeting. Upon request in writing delivered in person
or by registered mail to the Chairman of the Board of Directors or to the
Secretary by any persons entitled to call a meeting of shareholders and stating
the purposes of such meeting, it shall be the duty of the officer receiving the
request forthwith to cause a notice to be given, according to law and this Code
of Regulations, of a meeting to be held at such time, not less than thirty (30)
nor more than ninety (90) days after the receipt of such request, as such
officer may fix, and if such notice shall not be given within thirty (30) days
after the receipt by such officer of such request, the persons requesting such
meeting may fix the time of such meeting and give notice thereof in the manner
provided by law or this Code of Regulations or cause such notice to be so given
by a designated representative.

<PAGE>



ARTICLE IV.

         A notice in writing of each annual or special meeting of the
shareholders, stating the purpose or purposes of such meeting and the time when
and the place where it is to be held, shall be served or mailed by the
Secretary, or by any other person or persons authorized to give such notice,
upon or to each shareholder entitled to vote at, or to receive notice of, such
meeting not more than sixty (60) days nor less than ten (10) days prior to the
date fixed for the holding of such meeting, and if mailed, such notice shall be
addressed to each shareholder at his address as it appears upon the stock
records of the Company.

ARTICLE V.

         Each shareholder present in person or by proxy at any annual or special
meeting of the shareholders shall be entitled to one vote for each voting share
registered in his name at the close of business on the twenty-eighth (28th) day
preceding the date of the meeting, unless a different record date shall be fixed
by the Board of Directors as hereinafter in this Article V provided. The Board
of Directors, by action taken at least thirty-five (35) days before the date
fixed for any meeting of the shareholders, may fix a record date for the
determination of the shareholders entitled to notice of and to vote at such
meeting or any adjournment thereof, which shall not be a past date and which
shall be not more than sixty (60) days nor less than twelve (12) days prior to
the date fixed for such meeting, and which shall continue to be the record date
for all adjournments thereof, even though such meeting is adjourned to a date
more than sixty (60) days after the date of the original meeting, unless the
Board of Directors shall fix another date, which shall not be a past date and
which shall be a date not more than sixty (60) days nor less than twelve (12)
days prior to the date of any adjourned meeting, as the record date for the
determination of the shareholders entitled to notice of and to vote at such
adjourned meeting and shall cause notice of such new record date and of the date
of such adjourned meeting to be given, at least ten (10) days prior to the date
of such adjourned meeting, to all shareholders entitled to notice in accordance
with the new record date so fixed.

ARTICLE VI.

         At any meeting of the shareholders, the holders of a majority of the
shares of the Company issued and outstanding and entitled to vote thereat shall
constitute a quorum for such meeting; provided, however, that no action required
by law or by the Articles of Incorporation to be taken by a specified proportion
of the voting power of the Company may be taken by a lesser proportion, and
provided, further, that the shareholders present in person or by proxy at any
meeting of the shareholders, though less than a quorum, may adjourn such meeting
from time to time to reconvene at such time and at such place stated in the
minutes, as shall be determined by the vote of the holders of shares, present in
person or by proxy at such meeting, entitled to exercise a majority of the
voting power of the shares represented at such meeting. No notice as to any such
adjourned meeting need be given other than by announcement at the meeting at
which such adjournment is taken.

                                      -2-
<PAGE>

ARTICLE VII

         The order of business of any shareholders' meeting shall be determined
by the meeting. The Chairman of the Board of Directors or, in his absence, the
President of the Company shall preside at all shareholders' meetings, and the
Secretary, or, in the absence of the Secretary, the Assistant Secretary, of the
Company shall act as Secretary of all shareholders' meetings and record all
votes and proceedings taken at such meetings in books to be kept for that
purpose; provided, however, that, in case of the absence or disability of the
Chairman of the Board of Directors and the President, or of a vacancy in their
respective offices, the shareholders present, in person or by proxy, and
entitled to vote at any meeting of the shareholders, shall elect a Chairman of
such meeting by the vote of the holders of a majority of the voting shares
represented at such meeting, and, in case of the absence or disability of the
Secretary and of the Assistant Secretary, or of a vacancy in their respective
offices, the shareholders present, in person or by proxy, and entitled to vote
at any meeting of the shareholders, shall elect a Secretary of such meeting by
the vote of the holders of a majority of the voting shares represented at such
meeting.

                                    DIRECTORS

ARTICLE VIII.


           The Company shall have a board of directors of not less than six (6)
nor more than nine (9) persons as may be determined by the affirmative vote of
the holders of record of shares of the stock of the Company entitling them to
exercise a majority of the voting power of the Company at an annual or special
meeting called for the purpose of electing directors, and when so fixed such
number shall continue to be the authorized number of directors until changed by
the shareholders by a vote of the aforesaid or by the directors as hereinafter
provided. In addition to the authority of the shareholders to fix or change the
number of directors, the directors by majority vote of the directors in office,
may change the number of directors and may fill any director's office that is
created by an increase in the number of directors. In case of any vacancy in the
Board of Directors, the remaining directors, though less than a majority of the
whole authorized number of directors, may, by a vote of the majority of their
number, fill the vacancy for the unexpired term. A director need not be a
shareholder of the Company.

         At each annual meeting of shareholders, all directors will be elected
for a one-year term. No director shall be removed without an affirmative vote of
the holders of record of shares of the stock of the Company entitling them to
exercise at least two-thirds of the voting power of the Company in favor of such
removal. No individual director shall be removed in case the votes of a
sufficient number of shares are cast against his removal which, if cumulatively
voted in an election of the class of directors of which the director was a
member, would be sufficient to elect at least one director.


         Notwithstanding any other provision of these Regulations or any
provision of law which might otherwise permit a lesser vote or no vote, but in
addition to any affirmative vote of the holders of any particular class or
series of stock required by law or these Regulations, the

                                      -3-
<PAGE>

affirmative vote of the holders of record of shares of the stock of the Company
entitling them to exercise at least two-thirds of the Company's voting power
shall be required to alter, amend or repeal this Article VIII of these
Regulations.

                       POWERS AND DUTIES OF THE DIRECTORS

ARTICLE IX.

         The Board of Directors shall have complete and absolute jurisdiction of
all questions relating to the property, affairs, management and business of the
Company, including the election, removal, appointment, tenure, duties and
compensation of the officers of the Company. The Board of Directors, subject to
repeal by the shareholders, may fix their own compensation. The Board shall meet
at such times and places, within or without the State of Ohio, as they may from
time to time determine, may adopt such by-laws for their government and may
exercise all such powers and do all such things as may be lawfully exercised and
done by the Company, subject only to its Articles, this Code of Regulations and
the Constitution and Laws of the State of Ohio. The directors present at any
directors' meeting, though less than a majority, may adjourn such meeting from
time to time, to reconvene without further notice at such time and place stated
in the minutes as shall be determined at such meeting by a majority vote of the
directors there present.

         Without in anywise limiting the general powers by law or hereinabove
conferred, and subject to the provisions of the Company's Articles, the Board of
Directors shall have the following express powers:

         To purchase or otherwise acquire for the Company any property, rights
         or privileges which the Company is authorized to acquire at such
         prices, on such terms and conditions and for such considerations as the
         Board shall see fit, and, at its direction, to pay for any property,
         rights or privileges acquired by the Company either wholly or partly in
         money, stocks, debentures, securities, or other property, rights or
         privileges of the Company;

         To sell, transfer, lease, mortgage, pledge or otherwise dispose of the
         Company's property; to borrow money, and to issue the obligations of
         the Company therefore, and to secure the same by mortgage or pledge of
         all or any part of the property of the Company, real or personal, and
         to pledge or sell the same for such considerations and at such prices
         as the Board may deem expedient;

         To prescribe the terms on which stock certificates and shares may be
         issued, and the manner in which and conditions upon which stock
         certificates and shares may be transferred;

         To appoint and to remove or suspend any such officers, agents or
         employees as the Board may from time to time think proper, and to fix
         and determine, and from time to time, change the duties, powers,
         salaries and emoluments of such officers, agents or employees;


                                      -4-


<PAGE>

         To determine who shall be authorized to sign on the Company's behalf
         bills, notes, receipts, acceptances, endorsements, checks, releases,
         contracts, deeds, stock certificates and other documents;

         To create an Executive Committee composed of members of the Board of
         Directors and to delegate to such Executive Committee such powers of
         the Board of Directors and to such extent as the Board of Directors may
         from time to time determine.

                                 INDEMNIFICATION

ARTICLE IX-A.

         (a)      The Company shall indemnify any director or officer or any
                  former director or officer of the Company and any person who
                  is serving or has served at the request of the Company as a
                  director, officer, or trustee of another corporation, joint
                  venture, trust or other enterprise against expenses, including
                  attorneys' fees, judgments, fines, and amounts paid in
                  settlement actually and reasonably incurred by him in
                  connection with any threatened, pending, or completed action,
                  suit, or proceeding, whether civil, criminal, administrative
                  or investigative, other than an action by or in the right of
                  the Company, to which he was, is, or is threatened to be made
                  a party by reason of the fact that he is or was such director,
                  officer, or trustee, provided it is determined in the manner
                  set forth in paragraph (c) of this Article that he acted in
                  good faith and in a manner he reasonably believed to be in or
                  not opposed to the best interests of the Company and that,
                  with respect to any criminal action or proceeding, he had no
                  reasonable cause to believe his conduct was unlawful.

         (b)      In the case of any threatened, pending or completed action or
                  suit by or in the right of the Company, the Company shall
                  indemnify each person indicated in paragraph (a) of this
                  Section against expenses, including attorneys' fees, actually
                  and reasonably incurred in connection with the defense or
                  settlement thereof, provided it is determined in the manner
                  set forth in paragraph (c) of this Article that he acted in
                  good faith and in a manner he reasonably believed to be in or
                  not opposed to the best interests of the Company except that
                  no indemnification shall be made in respect of any claim,
                  issue, or matter as to which such person shall have been
                  adjudged to be liable for negligence or misconduct in the
                  performance of his duty of the Company unless and only to the
                  extent that the court of common pleas or the court in which
                  such action or suit was brought shall determine upon
                  application that, despite the adjudication of liability, but
                  in view of all circumstances of the case, such person is
                  fairly and reasonably entitled to indemnity for such expenses
                  as the court of common pleas or such other court shall deem
                  proper.

                                      -5-
<PAGE>

         (c)      The determinations referred to in paragraphs (a) and (b) of
                  this Article shall be made (i) by a majority vote of a quorum
                  consisting of directors of the Company who were not and are
                  not parties to or threatened with any such action, suit or
                  proceeding, or (ii) if such a quorum is not obtainable or if a
                  majority vote of a quorum of disinterested directors so
                  directs, in a written opinion by independent legal counsel
                  other than an attorney, or a firm having associated with it an
                  attorney, who has been retained by or who has performed
                  services for the Company, or any person to be indemnified,
                  within the past five years, or (iii) by the shareholders, or
                  (iv) by the court of common pleas or the court in which such
                  action, suit or proceeding was brought.

         (d)      Expenses, including attorneys' fees, incurred in defending any
                  action, suit, or proceeding referred to in paragraphs (a) and
                  (b) of this Article, may be paid by the Company in advance of
                  the final disposition of such action, suit, or proceeding as
                  authorized by the directors in the specific case upon receipt
                  of an undertaking by or on behalf of the director, officer, or
                  trustee to repay such amount, unless it shall ultimately be
                  determined that he is entitled to be indemnified by the
                  Company as authorized in this Article.

         (e)      The indemnification provided by this Article shall not be
                  deemed exclusive (i) of any other rights to which those
                  seeking indemnification may be entitled under the articles,
                  the regulations, any agreement, any insurance purchased by the
                  Company, vote of shareholders or disinterested directors, or
                  otherwise, both as to action in his official capacity and as
                  to action in another capacity while holding such office, or of
                  (ii) the power of the Company to indemnify any person who is
                  or was an employee or agent of the Company or of another
                  corporation, joint venture, trust or other enterprise which he
                  is serving or has served at the request of the Company, to the
                  same extent and in the same situations and subject to the same
                  determinations as are hereinabove set forth with respect to a
                  director, officer or trustee. As used in this paragraph (e)
                  references to the "Company" include all constituent
                  corporations in a consolidation or merger in which the Company
                  or a predecessor to the Company by consolidation or merger was
                  involved. The indemnification provided by this Article shall
                  continue as to a person who has ceased to be a director,
                  officer, or trustee and shall inure to the benefit of the
                  heirs, executors, and administrators of such a person.

         (f)      The Company may purchase and maintain insurance on behalf of
                  any person who or was a director, officer or employee or
                  former director, officer or employee of the Company or any
                  person who is serving or has served at the request of the
                  Company as a director, officer or trustee of another
                  corporation, joint venture, trust or other enterprise,
                  insuring him against liability asserted against or incurred by
                  him in any such capacity or arising out of his status as such
                  whether or not the Company would have the power to indemnify
                  him against such liability under this Article.

                                      -6-
<PAGE>


         (g)      The provisions of this Article shall apply to actions, suits
                  and proceedings commenced or threatened after the adoption of
                  this Article, whether arising from acts or omissions to act
                  occurring before or after its adoption.

                                    AMENDMENT

ARTICLE X.

         Except as provided in Article VIII hereof, these Regulations may be
amended at any time by the affirmative vote of the holders of record of shares
of the stock of the Company entitling them to exercise a majority of the voting
power on such proposal or, without a meeting, by the written consent of the
holders of record of shares of stock of the Company entitling them to exercise
two-thirds of the voting power on such proposal.


                                      -7-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.A
<SEQUENCE>5
<FILENAME>l93943aex4-a.txt
<DESCRIPTION>EXHIBIT 4(A)
<TEXT>
<PAGE>
Chs90353.rmb                                                        EXHIBIT 4(a)
5/07/02

                              AMENDED AND RESTATED
                             REIMBURSEMENT AGREEMENT

         Reimbursement Agreement, dated as of April 30, 2002, is made by SIFCO
INDUSTRIES, INC., an Ohio corporation (the "Company"), having its principal
office in Cleveland, Ohio, in favor of NATIONAL CITY BANK, a national banking
association, having its principal office at Cleveland, Ohio (the "Bank").

         WHEREAS, the Company has requested the Hillsborough County Industrial
Development Authority (the "Issuer") to finance, pursuant to a Loan Agreement
dated as of May 1, 1998 (the "Loan Agreement") between the Issuer and the
Company, the cost of equipping and expanding a manufacturing facility pursuant
to the Trust Indenture dated as of May 1, 1998 (the "Indenture"), between the
Issuer and National City Bank, as Trustee (the "Trustee"), by the issuance of
Four Million One Hundred Thousand and No/100ths Dollars ($4,100,000.00)
principal amount of Hillsborough County Industrial Development Authority
Industrial Development Variable Rate Demand Revenue Bonds, Series 1998 (Sifco
Industries, Inc. Project) (the "Bonds"); and

         WHEREAS, the Company has requested from the Issuer that upon the
issuance of the Bonds, that such Bonds be immediately sold under a Bond Purchase
Agreement (the "Bond Purchase Agreement") between the Issuer, the Company and
NatCity Investments, Inc. as the Underwriter; and

         WHEREAS, the Company and NatCity Investments, Inc. (the "Remarketing
Agent") are entering into a certain Remarketing Agreement, dated as of May 1,
1998 (the "Remarketing Agreement") pursuant to which the Remarketing Agent has
agreed to act as "Remarketing Agent" in respect to the Bonds; and

         WHEREAS, under the Indenture, the Issuer has assigned to the Trustee
certain of the Issuer's rights under the Loan Agreement together with the right
to receive payments thereunder;

         WHEREAS, to secure its obligations to the Bank, the Company has
granted, and has caused Sifco Turbine Components Services, an Ohio partnership,
whose general partners are wholly owned subsidiaries of the company, to grant, a
lien upon and security interest in, certain equipment owned by them pursuant to
a Security Agreement dated as of May 1, 1998 (the "Security Agreement") and has
caused Sifco Turbine Component Services to grant a lien on certain real property
pursuant to an Open End Mortgage, Security Agreement and Assignment of Rents and
Leases dated as of May 1, 1998 (the "Mortgage"); and

         WHEREAS, the Bank has issued an irrevocable letter of credit in favor
of the Trustee, in the form of Annex 1 hereto (the "Letter of Credit") in an
amount not exceeding Four Million

<PAGE>


Two Hundred Twenty Five Thousand Two Hundred Eighty and No/100ths Dollars
($4,225,280), (the "Letter of Credit Commitment").

         NOW, THEREFORE, in consideration of the premises and in order to induce
the Bank to issue the Letter of Credit, the Company and the Bank hereby agree as
follows:

         SECTION 1. DEFINITIONS. In addition to the terms heretofore defined,
the following terms shall have the meaning provided below.

         "AGREEMENT" means this Reimbursement Agreement as the same may be
         amended from time to time.

         "BANK'S INTEREST RATE" means, with respect to any unreimbursed B
         Drawing until the date of reimbursement, a rate of interest equal to
         the Bank's Prime Rate, changing when and as the Prime Rate changes,
         computed, in on the amount of unreimbursed B Drawings from time to time
         outstanding calculated on the basis of a 360-day year and on actual
         days elapsed;

         "BONDS" shall mean the Hillsborough County Industrial Development
         Authority Industrial Development Variable Rate Demand Revenue Bonds,
         Series 1998 (Sifco Industries, Inc. Project).

         "BOND LEGISLATION" means the resolution enacted by the Issuer
         authorizing the issuance of the Bonds.

         "BOND PLEDGE AGREEMENT" shall mean that certain agreement, dated as of
         May 1, 1998, between the Bank, the Company, and the Trustee, pursuant
         to which the Company has pledged to the Bank Drawing Bonds which the
         Trustee will hold for the benefit of the Bank.

         "BUSINESS DAY" means any day other than a Saturday or Sunday or
         holiday, or other day on which banks located in the city or cities in
         which the principal corporate trust office of the Trustee, the
         principal office of the Remarketing Agent or the principal office of
         the Letter of Credit Bank are authorized or required to close for
         general banking business or on which The New York Stock Exchange is
         closed.

         "COMMITMENT FEE" means the fee payable by the Company pursuant to
         Section 2(a) hereof.

         "DATE OF ISSUANCE" means the date of issuance of the Letter of Credit.

         "DRAWING" means any "A Drawing", "B Drawing" or "C Drawing".



                                      -2-
<PAGE>


         "A DRAWING" shall mean a drawing made by sight draft accompanied by a
         certificate in the form of Exhibit A to Annex 1 hereto to pay the
         interest payments due on the Bonds.

         "B DRAWING" means a drawing made by a sight draft accompanied by a
         certificate in the form of Exhibit B to Annex 1 hereto to pay a portion
         of the purchase price of the Bonds corresponding to the principal
         amounts of the Bonds being purchased pursuant to the exercise of a
         "put" by a holder of the Bonds pursuant to the Indenture, provided,
         however, that Bonds "put" by a holder, which Bonds shall also be
         redeemed by the Trustee as part of any redemption, shall not be subject
         to a B drawing and shall not become Drawing Bonds.

         "C DRAWING" means a drawing made by sight draft accompanied by a
         certificate in the form of Exhibit C to Annex 1 hereto to pay the
         portion of the redemption price of Bonds corresponding to the principal
         amount of such Bonds redeemed by the Issuer pursuant to the Indenture
         and delivered to the Trustee for cancellation, or to pay the principal
         portion of the Bonds at their stated maturities or upon acceleration of
         payments due on such Bonds pursuant to the Indenture.

         "DRAWING BONDS" means Bonds purchased by the Company, or by the Trustee
         for the account of the Company, pursuant to the Bond Pledge Agreement
         with the proceeds of a drawing on the Letter of Credit by means of a B
         Drawing.

         "EVENT OF DEFAULT" shall mean the occurrence of any of the events
         specified in Section 8 hereof and the passage of any period of grace as
         specified by Section 8.

         "EXPIRATION DATE" means MAY 16, 2004 (which date is the "STATED
         EXPIRATION DATE"), or such other date as may be established pursuant to
         Section 18 hereof.

         "FUNDED INDEBTEDNESS" means indebtedness, in excess of $50,000, which
         matures or which (including each renewal or extension, if any, in whole
         or in part) remains unpaid more than twelve (12) months after the date
         originally incurred.

         "INDENTURE" means the Trust Indenture under which the Bonds are being
         issued, as the same may be duly amended or supplemented in accordance
         with the provisions thereof.

         "INTEREST PAYMENT DATE" means an Interest Payment Date for the Bonds as
         defined by the Indenture.

         "INTEREST PORTION" means the Interest Portion of the Stated Amount of
         the Letter of Credit as provided in Section 3(a) hereof, as it may be
         reduced or reinstated from time to time as provided by Section 15
         hereof.


                                      -3-
<PAGE>


         "LETTER OF CREDIT" means the Bank's letter of credit to be issued in
         the form of Annex 1 to this Agreement.

         "LETTER OF CREDIT COMMITMENT" means the Bank's commitment to issue the
         Letter of Credit in the Stated Amount.

         "LETTER OF CREDIT DOCUMENTS" means this Agreement, the Letter of
         Credit, the Mortgage, the Security Agreement, the Bond Pledge Agreement
         or any instrument or agreement relating to or supplementing any of the
         foregoing.

         "PERSON" means an individual, corporation, partnership, joint venture,
         trust or unincorporated organization, a government or any agency or
         political subdivision thereof and other legal entities.

         "POTENTIAL EVENT OF DEFAULT" shall mean an event which but for the
         lapse of time or the giving of notice or both would constitute an Event
         of Default under Section 8 hereof.

         "PRETAX INTEREST COVERAGE RATIO" means net income plus net interest
         expense plus federal, state and local taxes accrued arriving at net
         income DIVIDED BY net interest expense.

         "PRIME RATE" means that rate of interest publicly announced, from time
         to time, in Cleveland, Ohio, by National City Bank, as its "Prime
         Rate".

         "PRINCIPAL PORTION" means the Principal Portion of the Letter of Credit
         as provided by Section 3(a) hereof, which may be reduced or reinstated
         from time to time as provided by Section 15 hereof, or by the terms of
         the Letter of Credit.

         "REMARKETING AGENT" means the Remarketing Agent appointed in accordance
         with the Indenture, initially, NatCity Investments, Inc. and any
         successors thereto as determined or designated under or pursuant to the
         Indenture.

         "STATED AMOUNT" means the maximum aggregate Stated Amount of the Letter
         of Credit as provided in Section 3(a) hereof, which may be reduced from
         time to time as provided in Section 15 hereof, or by the terms of the
         Letter of Credit.

         "TENDER AGENT" means the Trustee.

         "TERMINATION DATE" means the date on which the Trustee's right to draw
         under the Letter of Credit terminates, determined as provided by the
         Letter of Credit and described as the Stated Expiration Date therein.


                                      -4-
<PAGE>


         "TRANSACTION DOCUMENTS" means the Bonds, the Indenture, the Loan
         Agreement, the Remarketing Agreement, or any other instrument or
         agreement relating to or supplementing any of the foregoing.

         "TRUSTEE" means National City Bank, of Cleveland, Ohio, as Trustee, or
         any successor Trustee under the Trust Indenture.

         The terms "hereof", "hereby", "hereto", "hereunder" and similar terms
mean this Agreement, and the term "heretofore" means before, and the term
"hereafter" means after, the effective date hereof.

         SECTION 2. COMMITMENT FEE; AMOUNTS PAYABLE IN RESPECT OF A DRAWING;
OTHER FEES.

         (a) The Company agrees to pay to the Bank a Commitment Fee with respect
to the issuance and maintenance of the Letter of Credit from the Date of
Issuance to and including the Termination Date. The Commitment Fee shall be
calculated on a 360 day basis and payable as follows: (x) the Commitment Fee is
payable annually in advance on each May 1st through the Termination Date; (y)
the Commitment Fee shall be calculated on the Stated Amount in effect (the then
maximum amount that the Trustee is capable of drawing), including any amounts
which are reinstatable on such date, and taking into account any principal
redemption payments on the date the Commitment Fee is payable, at the rate of
one and one quarter percent (1.25%) per annum for the first year and each year
thereafter in accordance with the schedule set forth below. If the Termination
Date shall occur prior to the Stated Expiration Date set forth in the Letter of
Credit, the Company shall have no obligation to pay a Commitment Fee after the
Termination Date. The Company shall not be entitled to a rebate of any portion
of the Commitment Fee paid to the Bank.

                  PRETAX INTEREST COVERAGE           ANNUAL COMMITMENT FEE

                  >10x                                        1.00%
                  >7.5x - 10x                                 1.25%
                   2.5x - 7.5x                                1.50%

         (b) In the event of any "A Drawing" or "C Drawing" the Company shall on
the date of such Drawing pay to the Bank a sum equal to the amount of such
Drawing plus a draw fee in the amount of two hundred dollars ($200.00). Draw
fees are payable annually in advance in the amount of Eight Hundred and
no/100ths Dollars ($800).

         (c) In the event of any "B Drawing" under the Letter of Credit, the
Company shall, on the later of (x) the date of such Drawing, or (y) on the date
the Trustee delivers the proceeds of the Drawing to the Remarketing Agent,
deliver, or cause to be delivered (i) to the Trustee as security for the
obligation of the Company to reimburse the Bank for the amount of such B Drawing
and to be held by the Trustee under the Bond Pledge Agreement, Bonds pledged to
the


                                      -5-
<PAGE>


Bank, in an aggregate principal amount equal to the amount of the B Drawing or
funds, if any, from a remarketing of the Bonds or any combination thereof; and
(ii) to the Bank a sum equal to (x) a fee in the amount of Five Hundred Dollars
($500) for such Drawing.

         (d) (i) If not paid earlier, on the Termination Date, the Company shall
pay to the Bank the full amount of principal and accrued interest, computed at
the Bank's Interest Rate, for amounts drawn under the Letter of Credit as B
Drawings for which the Bank has not been previously reimbursed. If the
Termination Date occurs for reasons other than the passage of the Stated
Expiration Date, all such indebtedness of the Company under this Reimbursement
Agreement shall be immediately due and payable at the close of the Business Day
on which the Termination Date occurs.

             (ii) The Company may, at any time after the Bank has honored a B
Drawing and from time to time thereafter, prepay, without premium or penalty,
its obligation to reimburse the Bank for the amounts of any B Drawings then
outstanding, provided that (x) any such prepayment shall be accompanied by all
accrued but unpaid interest to the date of prepayment on the amount being
prepaid, computed at the Bank's Interest Rate, and (y) such prepayment
(exclusive of interest) shall be in the amount of five thousand dollars ($5,000)
or any whole multiple thereof. On the date of such prepayment, the Bank shall
notify the Trustee to deliver to the Remarketing Agent, or at the Company's
written direction, to the Company, Drawing Bonds in a principal amount equal to
the principal amount so prepaid. Upon receipt of such prepayment, the obligation
of the Company to reimburse the Bank for B Drawings under this Section 2(d)
shall be appropriately reduced.

             (iii) Prior to the Termination Date, the Trustee may notify the
Bank and the Company that Drawing Bonds pledged to the Bank have been
remarketed, at par, and that it is delivering to the Bank the proceeds thereof,
and upon receipt of such notice the Company shall deliver to the Bank the
accrued but unpaid interest on the principal amount of the Drawing Bonds so
remarketed, at the Bank Interest Rate. Upon notification that the Bonds have
been remarketed and receipt by the Bank of the proceeds thereof, the Company's
obligation to reimburse the Bank for such B Drawing shall be appropriately
reduced.

             (iv) Monthly, on the first day of each month, and at the
Termination Date, the Company shall pay to the Bank all accrued but unpaid
interest, computed at the Bank Interest Rate, on the amounts of any B Drawings
for which the Bank has not been reimbursed in full.

         (e) The Company hereby agrees to pay to the Bank

         (i) interest, payable on demand, on any and all amounts not paid by the
         Company when due under this Section of this Agreement from the date
         such amounts become due until payment in full, such interest at a
         fluctuating interest rate per annum (computed on the basis of a year of
         360 days but calculated on the actual number of days outstanding) equal
         to two percent (2%) per annum in excess of the Prime Rate, changing
         when and as


                                      -6-
<PAGE>


         said Prime Rate changes; provided, however, that this Section 2(e)(i)
         shall not apply to amounts due but not yet payable or amounts
         representing accrued interest under Section 2 (d) hereof;

         (ii) upon each transfer of the Letter of Credit in accordance with its
         terms and as a condition thereto, a fee in the amount of $1,000 plus
         such amount as shall be necessary to cover the costs and expenses of
         the Bank incurred in connection with such transfer;

         (iii)    intentionally left blank; and

         (iv) on demand, any and all reasonable expenses, to the extent
         permitted by law, incurred by the Bank in enforcing any of its rights
         under this Agreement.

         (f) (i) If any law or regulation or any change in any law or regulation
or in the interpretation thereof by any court or administrative or governmental
authority charged with the administration thereof shall impose, modify or deem
applicable any reserve, special deposit, risk-based capital requirement or
similar requirement which would impose on the Bank any additional costs (A)
generally upon the issuance or maintenance of so called "stand-by" letters of
credit by the Bank, or (B) specifically in respect of this Agreement or the
Letter of Credit, and the result of such imposition of additional costs upon
either clause (A) or (B) above shall be to increase the cost to the Bank of
issuing or maintaining the Letter of Credit (which increase in cost shall be the
result of the Bank's reasonable allocation of the aggregate of such cost
increases resulting from such events), then, (x) within thirty (30) days of the
Bank's obtaining knowledge of such change in law, regulations or interpretation
thereof, the Bank shall so notify the Company, and (y) within sixty (60) days of
receipt of such notice from the Bank, accompanied by a certificate as to such
increased cost, the Company shall pay, computed as of the effective date of such
change or interpretation, all additional amounts which are necessary to
compensate the Bank for such increased cost incurred by the Bank. The
certificate of Bank as to such increased costs shall show the manner of
calculation and shall be conclusive (absent manifest error) as to the amount
thereof. The provisions of this Section 2(f) shall also be applicable to other
banks acquiring participations in the Letter of Credit draws to the extent of
the interest acquired by such banks.

             (ii) If any such law, regulation, or change in law, regulation or
interpretation shall eliminate, modify or deem inapplicable any such reserve,
risk-based capital requirement, special deposit or similar requirement, the
result of which is to relieve the Bank from any costs imposed on the date of
this Agreement (or hereafter imposed as to which the Bank has charged the
Company additional amounts pursuant to Section 2(f) (i) above) either (A)
generally upon the issuance or maintenance of so called "stand-by" letters of
credit by the Bank, or (B) specifically in respect of this Agreement or the
Letter of Credit, and the result of such relief of costs shall be to decrease
the cost to the Bank of issuing or maintaining the Letter of Credit, then,
within thirty (30) days of the Bank's obtaining knowledge of such change in law,
regulations or interpretation thereof, the Bank shall so notify the Company,
accompanied by a certificate as to such decreased


                                      -7-
<PAGE>


costs, and shall pay to the Company, computed as of the effective date of such
change or interpretation, such amounts as have been paid by the Company since
the effective date of such change as are attributable to such decrease in cost.

             (iii) without limiting the generality of the foregoing, if:

         (a) at any time any governmental authority shall require National City
         Corporation or Bank, whether or not the requirement has the force of
         law, to maintain, as support for the subject commitment, capital in a
         specified minimum amount that either is not required or is greater than
         that required at the date of this Agreement, whether the requirement is
         implemented pursuant to the "risk-based capital guidelines" published
         at 54 F.R. 4168 and 54 F.R. 4186 or otherwise, and

         (b) as a result thereof the rate of return on capital of National City
         Corporation or Bank or both (taking into account their then policies as
         to capital adequacy and assuming full utilization of their capital)
         shall be directly or indirectly reduced by reason of any new or added
         capital thereby allocable to the subject commitment,

then and in each such case the Company shall, on Bank's demand, pay Bank as an
additional fee such amounts as will in Bank's reasonable opinion reimburse
National City Corporation and Bank for any such reduced rate of return.

Each demand by Bank for payment pursuant to this section (f) shall be
accompanied by a certificate setting forth the reason for the payment, the
amount to be paid, and the computations and assumptions in determining the
amount, which certificate shall be presumed to be correct in the absence of
manifest error. In determining the amount of any such payment, Bank may use
reasonable averaging and attribution methods. In the event of a demand pursuant
to this section (f), the Company shall have the right to obtain an Alternate
Letter of Credit. There shall be no charges from the Bank in connection with the
obtaining of such Alternate Letter of Credit.

             (iv) If (A) at any time any governmental authority shall reduce any
requirement in effect as of the date of this Agreement (or that may hereafter be
imposed and as to which the Bank has required the Company to pay an additional
fee under Section 2 (f) (iii) above) to maintain, as support for the subject
commitment, capital in a specified amount, and (B) as a result thereof the rate
of return on capital of National City Corporation or Bank or both (taking into
account their then policies as to capital adequacy and assuming full utilization
of their capital) shall be directly or indirectly increased by reason of any
capital no longer allocable to the subject commitment, then and in each such
case, the Bank shall reduce the Company's Commitment Fee by such amount as will
maintain the rate of return to the Bank which is in effect as of the date of
this Agreement, and shall reimburse the Company for any amount paid by the
Company after the effective date of such governmental action, which is in excess
of the amount necessary to provide the Bank with the rate of return to the Bank
in effect on the date of this Agreement.


                                      -8-
<PAGE>


         (g) Annually, on each May 1, the Company shall pay to the Bank a letter
of credit maintenance fee equal to One Thousand Five Hundred and no/100ths
Dollars ($1,500).

         (h) All payments by the Company to the Bank hereunder shall be made in
lawful currency of the United States and in immediately available funds at the
Bank's office at 23000 Millcreek Boulevard, Highland Hills, Ohio 44122.

         SECTION 3. LETTER OF CREDIT COMMITMENT OF BANK; CONDITIONS PRECEDENT TO
THE ISSUANCE OF THE LETTER OF CREDIT.

         (a) AGREEMENT OF BANK. Subject to the terms and conditions of this
Agreement, the Bank has issued its Letter of Credit in an aggregate amount, the
"Stated Amount" which shall be Four Million Two Hundred Twenty Five Thousand Two
Hundred Eighty and No/100ths Dollars ($4,225,280), of which (1) an amount not
exceeding Four Million One Hundred Thousand and No/100ths Dollars ($4,100,000)
(the "Principal Portion") may be drawn with respect to payment of the principal
portion of the Bonds at their maturity, by acceleration or otherwise, or payment
of the portion of redemption or "put" purchase price corresponding to the
principal of the Bonds, and (2) an amount not exceeding One Hundred Twenty Five
Thousand Two Hundred Eighty and no/100ths Dollars ($125,280) (the "Interest
Portion") may be drawn upon with respect to the payment of accrued interest, or
to the portion of redemption price corresponding to accrued interest on the
Bonds equal to one hundred ten (110) days' interest (computed on the basis of a
360-day year) with respect to the Bonds (computed at the maximum rate of ten
percent (10%) per annum) on or prior to their stated maturity date, all prior to
10:00 A.M. on the Business Day which is the Expiration Date. All payments on the
Letter of Credit shall be made with the Bank's funds, and no such payments shall
be made with funds furnished by the Company.

         (b) CONDITIONS PRECEDENT TO ISSUANCE OF LETTER OF CREDIT. It was a
condition precedent to the issuance by the Bank of its Letter of Credit that

         (i) the Bank shall have received on or before the Date of Issuance the
         following, in form and substance satisfactory to Bank:

             (A) a copy of the Bond Legislation authorizing the execution,
             delivery and performance by the Issuer of the Transaction Documents
             to which it is or is to be a party, certified by the Director or
             other appropriate official of the Issuer (which certificate shall
             state that such Bond Legislation is in full force and effect on the
             Date of Issuance);

             (B) opinions of Squire, Sanders & Dempsey LLP, as Bond Counsel and
             as Company Counsel, in form and substance satisfactory to the Bank;


                                      -9-
<PAGE>


             (C) executed copies of the Indenture, the Bond Pledge Agreement,
             the Remarketing Agreement, the Mortgage, the Security Agreement,
             and the Bond Purchase Agreement in form and substance satisfactory
             to the Bank;

             (D) such other documents, instruments, approvals (and, if required
             by Bank, certified duplicates of executed copies thereof) and
             opinions as the Bank may reasonably request;

             (E) payment in full of the annual Commitment Fee due on the Date of
             Issuance pursuant to Section 2(a) hereof and any issuance fee,
             upfront commitment fee and documentation fee due pursuant to
             section 2(g) hereof;

             (F) certified copies of the Articles of Incorporation and Code of
             Regulations of the Company, as amended and as in effect on the Date
             of Issuance;

             (G) a certificate of insurance in an amount satisfactory to the
             Bank showing Bank as loss payee covering the Company's equipment.

         (ii) On the Date of Issuance:

             (A) the Transaction Documents, the Letter of Credit Documents and
             the insurance coverages shall be in full force and effect;

             (B) all conditions precedent to the issuance of the Bonds shall
             have occurred;

             (C) the Issuer shall have duly executed, issued and delivered the
             Bonds to the Trustee for authentication and delivery to the
             purchasers thereof.

         (iii) The following statements shall be true and correct on the Date of
         Issuance and the Bank shall have received a certificate signed by a
         duly authorized officer of the Company, dated the Date of Issuance,
         stating that:

             (A) the representations and warranties contained in Section 5
             hereof are correct in all material respects on and as of the Date
             of Issuance as though made on and as of such date; and

             (B) no Event of Default has occurred and is continuing, or would
             result from the issuance of the Letter of Credit or the Company's
             execution of this Agreement.


                                      -10-
<PAGE>


         SECTION 4. OBLIGATIONS ABSOLUTE. The obligations of the Company under
this Agreement shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms of this Agreement and the Letter
of Credit, under all circumstances whatsoever, including without limitation the
following circumstances:

         (a) any lack of validity or enforceability of any of the Transaction
         Documents or the Letter of Credit Documents, or any other document;

         (b) any amendment or waiver of or any consent to departure from all or
         any of the Transaction Documents;

         (c) the existence of any claim, set-off, defense or other rights which
         the Company or any other person may have at any time against the
         Trustee, or any successor trustee, any beneficiary or any transferee of
         the Letter of Credit (or any persons or entities for whom the Trustee,
         any such beneficiary or any such transferee may be acting), the Bank
         (other than the defense of payment to the Bank in accordance with the
         terms of this Agreement) or any other person or entity, whether in
         connection with this Agreement, the Transaction or Letter of Credit
         Documents or any unrelated transaction;

         (d) any statement or representation contained in any draft or
         certificate presented to the Bank, in connection with the request that
         the Bank issue the Letter of Credit, which proves to be untrue or
         inaccurate in any material respect whatsoever, or;

         (e) payment by the Bank under the Letter of Credit against presentation
         of a demand, sight draft or certificate which does not comply with the
         terms of the Letter of Credit, provided that such payment shall not
         have constituted gross negligence or willful misconduct of the Bank.

         SECTION 5. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to the Bank as follows:

         (a) The Company is an Ohio corporation and is organized and existing
         and in good standing under the laws of the State of Ohio and is in good
         standing under the laws of the State of Ohio, qualified to transact
         business in the State of Florida and has all requisite power and
         authority to conduct its businesses, to own its properties and to
         execute and deliver, and to perform all of its obligations under this
         Agreement, the Letter of Credit Documents and the Transaction Documents
         to which it is or is to be a party.

         (b) The execution, delivery and performance by the Company of this
         Agreement, the Letter of Credit Documents and the Transaction Documents
         to which it is or is to be a party have been duly authorized by all
         necessary action and do not and will not (i) require any consent or
         approval of the Company which has not been obtained, (ii) to the best
         of the Company's knowledge, violate any provision of any law, rule,
         regulation, order, writ,


                                      -11-
<PAGE>
         judgment, injunction, decree, determination or award presently in
         effect having applicability to the Company or of its Articles of
         Incorporation or Code of Regulations or (iii) result in a breach of or
         constitute a default under any indenture or loan or credit agreement or
         any other agreement, loan or instrument to which the Company is a party
         or by which it or its properties may be bound or affected and which
         would have a material adverse effect on the Company.  The Company, to
         the best of its knowledge, is not in default under any such law, rule,
         regulation, order, writ, judgment, injunction, decree, determination or
         award and is not aware of any default under any such indenture,
         agreement, loan or instrument the effect of which default could be
         materially adverse to the Company or to the ability of the Company to
         perform its obligations hereunder.

         (c) To the best of the Company's knowledge, no authorization, consent,
         approval or license of, or filing or registration with, any court or
         governmental department, commission, board, bureau, agency or
         instrumentality, domestic or foreign, or any specifically granted
         exemption from any of the foregoing which has not been obtained, is or
         will be necessary to the valid execution, delivery or performance by
         the Company of this Agreement or any of the Letter of Credit Documents
         or Transaction Documents to which it is or is to be a party, except
         building and accompanying permits relating to the Project not yet
         obtainable.

         (d) This Agreement, the Letter of Credit Documents and the Transaction
         Documents to which it is or is to be a party are legal, valid and
         binding obligations of the Company, enforceable against the Company and
         in accordance with their terms, except as such enforceability may be
         limited by bankruptcy, insolvency, reorganization, moratorium or other
         similar laws in effect from time to time relating to or affecting the
         enforcement of creditors' rights and by general principles of equity
         and public policy.

         (e) Except as previously disclosed in writing to the Bank, there are no
         actions or proceedings pending before any court, governmental agency or
         arbitrator against or directly involving the Company and, to the best
         of the Company's knowledge, there is no threatened action or proceeding
         affecting the Company or any of their properties before any court,
         governmental agency or arbitrator which, in any case, may materially
         adversely affect the financial condition or operations of the Company.

         SECTION 6. AFFIRMATIVE COVENANTS. So long as the Termination Date has
not occurred or any amount is due and owing to the Bank hereunder, the Company
will, unless the Bank shall otherwise consent in writing, which consent will not
be unreasonably delayed or withheld:

         (a) PRESERVATION OF EXISTENCE, ETC. Preserve and maintain its existence
         as an Ohio corporation duly qualified to transact business in the
         States of Ohio and Florida and its rights, franchises and privileges
         under the laws of the States of Ohio and Florida.


                                      -12-
<PAGE>


         (b) COMPLIANCE WITH LAWS, ETC. Comply in all material respects with the
         requirements of all applicable laws, rules, regulations and orders of
         any governmental authority, non-compliance with which would materially
         adversely affect the ability of the Company to perform its obligations
         hereunder, such compliance to include, without limitation, paying
         before the same become delinquent all taxes, assessments and
         governmental charges imposed upon it or upon its property, except to
         the extent compliance with any of the foregoing is then being contested
         in good faith and any reserves required by generally accepted
         accounting principles are being maintained in connection therewith.

         (c) VISITATION RIGHTS. At any reasonable time from time to time and as
         may be reasonably requested, permit the Bank or any agents or
         representatives thereof to visit the properties of, the Company with
         any of their respective officers and members; PROVIDED, that, Section
         17 hereof notwithstanding, the reasonable costs and expenses incurred
         by the Bank or its agents or representatives in connection with any
         such examinations, copies, abstracts, visits or discussions occurring
         or made prior to the occurrence of an Event of Default shall be for the
         account and the expense of the Bank.

         (d) KEEPING OF BOOKS. Keep proper books of record and account, in which
         full and correct entries shall be made of financial transactions and
         the assets and business of the Company in accordance with generally
         accepted accounting principles consistently applied.

         (e) REPORTING REQUIREMENTS. Furnish to the Corporate Banking Division,
         in Cleveland, Ohio, of the Bank the following:

             (i) as soon as possible and in any event within fifteen (15) days
             after the Company learns of the occurrence of each Event of Default
             continuing on the date of such statement, a statement of the chief
             financial officer or appropriate individual designated by the
             Company (or in his absence, a principal financial officer) of the
             Company setting forth details of such Event of Default and the
             action which the Company proposes to take with respect thereto;

             (ii) financial statements as follows:

                  (A) Upon receipt by the Company but not later than ninety (90)
                  days from the end of each fiscal year, audited financial
                  statements of the Company for the fiscal year then ended and
                  related statements of revenue and expenses and changes in
                  financial position for the fiscal year then ended, all
                  prepared in accordance with generally accepted accounting
                  principles applied on a consistent basis with those used in
                  the preparation of the financial


                                      -13-
<PAGE>


                  statements as of the prior report, all audited by independent
                  public accountants.

                  (B) Within forty five (45) days after the end of each fiscal
                  quarter, internally generated financial statements of the
                  Company, in form and substance satisfactory to the Bank, all
                  prepared in accordance with generally accepted accounting
                  principles, consistently applied and certified as true and
                  correct by a principal financial officer or other appropriate
                  officer.

                  (C) Such other financial information as to the Company as the
                  Bank may, from time to time, reasonably require.

         (f) FIXED ASSETS Maintain all fixed assets at the Project Site in good
         working order and condition, ordinary wear and tear excepted.

         (g) The Company shall cause its principal financial officer, or in his
         absence another individual designated by the Company, to give Bank
         written notice within ten (10) days after knowledge thereof whenever

             (i) any litigation or proceeding shall be brought against the
             Company before any court or administrative agency, which, if
             successful, might have a material adverse effect on the Company, or

             (ii) he or she reasonably believes that any Event of Default under
             this Agreement or under any Funded Indebtedness has occurred or
             that any representation or warranty hereunder shall for any reason
             have ceased in any material respect to be true and complete.

         SECTION 7. NEGATIVE COVENANTS. So long as the Termination Date has not
occurred or any amount is due and owing to the Bank hereunder, unless the Bank
shall otherwise consent in writing, which consent shall not be unreasonably
withheld, the Company agrees

         (a) not to enter into or consent to any amendment of the Transaction
Documents.

         (b) not to suffer or permit its PRETAX INTEREST COVERAGE RATIO to be
less than 2.5 TO 1.0, as measured quarterly on a four (4) quarter rolling basis.
This covenant is WAIVED by the Bank for the periods through and including
DECEMBER 31, 2004.

         (c) not to suffer or permit the ratio of its EBITDA to its INTEREST
EXPENSE* to be less than 3.0 TO 1.0, as measured quarterly on a four (4) quarter
rolling basis (Asset Impairment Charge not included).


                                      -14-
<PAGE>


         (d) not to suffer or permit its TANGIBLE NET WORTH to be less than the
required minimum amount. The required minimum amount shall be $38,500,000, as
measured by audited financial statements as of each fiscal year end, commencing
with fiscal year end 2002, and increasing as of each fiscal year end thereafter
by an amount equal to 50% of net income for such fiscal year (Asset Impairment
Charge is included, but there shall be no adjustment for foreign currency
gains/losses).

         (e) not to suffer or permit the ratio of its TANGIBLE NET WORTH to its
TOTAL LIABILITIES to be less than 1.00 TO 1.00 at any time (Asset Impairment
charge included, but there shall be no adjustment for balance sheet foreign
currency translation gains/loses).

         (f) not to suffer or permit its CAPITAL EXPENDITURES in any fiscal year
to exceed $5,000,000.

         (g) not to suffer or permit the payment of any dividends in any fiscal
year in excesss of an amount equal to 50% of net income for that year less
treasury shares purchased plus treasury shares sold.

         (h) not to suffer or permit the ratio of its CURRENT ASSETS to its
CURRENT LIABILITIES to be less than 1.75 TO 1.00, as measured quarterly.

         *Whenever INTEREST EXPENSE is used herein, it shall mean NET INTEREST
EXPENSE.

         SECTION 8. EVENTS OF DEFAULT. The occurrence of any of the following
events shall be an "Event of Default" hereunder unless waived by the Bank:

         (a) the Company shall fail to pay when due any amount specified in
         paragraph (a), (b), (c) or (e) of Section 2 hereof and such amount
         shall remain unpaid for five (5) Business Days after receipt of written
         notice from Bank of such failure to pay; or

         (b) the Company shall fail to pay when due any amount specified in
         paragraphs (d) or (f) of Section 2 hereof or Sections 13 or 17 hereof,
         and such amount shall remain unpaid for five (5) Business days after
         receipt of written notice from the Bank of such failure to pay; or

         (c) any representation or warranty made by the Company pursuant to
         Section 5 hereof or in any certificate, financial or other statement
         furnished by the Company pursuant to this Agreement shall prove to have
         been incorrect in any material respect when made and would result in a
         material adverse change in the financial position of the Company, or
         the Company shall fail to perform or observe any term, covenant or
         agreement contained in Section 7 and such adverse change or failure to
         perform shall remain in effect for a period of thirty (30) days after
         written notice by the Bank to the Company; provided, that if the
         Company shall commence to remedy such failure within such 30 days and
         shall be


                                      -15-
<PAGE>


         proceeding with due diligence to remedy such failure, such period shall
         be extended to such period as shall be required to complete such
         remedy; or

         (d) the Company shall fail to perform or observe any other term,
         covenant or agreement contained herein or in the Letter of Credit
         Documents and any such failure which can be remedied shall remain
         unremedied for 30 days after written notice thereof shall have been
         given to the Company by the Bank; provided, that if the Company shall
         commence to remedy such failure within such 30 days and shall be
         proceeding with due diligence to remedy such failure, such period shall
         be extended to such period as shall be required to complete such
         remedy; or

         (e) final uninsured judgment for the payment of money shall be rendered
         against the Company, in excess of fifty thousand dollars ($50,000), and
         such judgment shall remain unpaid or undischarged for a period of
         ninety (90) consecutive days during which execution shall not be
         effectively stayed;

         (f) the Company shall: (i) admit in writing its inability to pay its
         debts generally as they become due; (ii) have an order for relief
         entered in any case commenced by it under the federal bankruptcy laws,
         as now or hereafter in effect and such order for relief shall not have
         been rescinded within 90 days after being so entered; (iii) commence a
         proceeding under any federal or state bankruptcy, insolvency,
         reorganization or similar law, or have such a proceeding commenced
         against it and either have an order of insolvency or reorganization
         entered against it or have the proceeding remain undismissed and
         unstayed for ninety (90) days; (iv) make an assignment for the benefit
         of creditors; or (v) have a receiver or trustee appointed for it or for
         the whole or any substantial part of its property. The declaration of
         an Event of Default under this subsection and the exercise of remedies
         upon any such declaration shall be subject to any applicable
         limitations of federal bankruptcy law affecting or precluding such
         declaration or exercise during the pendency of or immediately following
         any bankruptcy, liquidation, or reorganization proceedings;

         (g) the occurrence of an "event of default" or an "Event of Default"
         under any of the Transaction Documents or the Letter of Credit
         Documents, subject to any applicable cure or grace periods contained
         therein;

         (h) the occurrence of an "event of default" by the Company under any
         other document or instrument for Funded Indebtedness as defined herein,
         in excess of $100,000 in the aggregate, which has not been cured as
         provided for therein.

         Upon the occurrence and continuation of an Event of Default hereunder,
the Bank may, in its sole discretion, but shall not be obligated to (i) by
notice to the Company and the Trustee, declare a default under this Agreement
and direct the Trustee to accelerate payment of the Bonds


                                      -16-
<PAGE>


and (ii) pursue any other remedy permitted to the Bank under this Agreement, the
Letter of Credit Documents or the Transaction Documents or otherwise.

         SECTION 9. AMENDMENTS, ETC. No amendment, waiver, modification or
release of any provision of this Agreement nor consent to any departure by the
Company therefrom shall in any event be effective, irrespective of any course of
dealing with any of the parties hereto, unless the same shall be in writing and
signed by the Bank, and then such amendment, waiver, modification or release
shall be effective only in the specific instance and for the specific purpose
for which given.

         SECTION 10. ADDRESSES FOR NOTICES. All notices and other communications
provided for hereunder shall be in writing and, if to the Company, mailed or
delivered to it registered or certified mail, return receipt requested,
addressed to it at Sifco Industries, Inc.,, 970 East 64th Street, Cleveland,
Ohio 44103, Attention: Vice President - Finance or if to the Bank, mailed or
delivered to it, addressed to it at National City Bank, 23000 Millcreek
Boulevard, Highland Hills, Ohio 44122, Attention: International Department,
Letter of Credit Section, with copies simultaneously to the attention of the
Corporate Banking Division at 1900 East Ninth Street, Cleveland, Ohio 44114,
Attention: Terry Wolford, or such further address as shall be designated by such
party in a written notice to the other party. All such notices and other
communications may also be hand delivered.

         SECTION 11. NO WAIVER; REMEDIES. No failure on the part of the Bank or
the Company to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.

         SECTION 12. COLLATERAL. The Company has granted to the Bank a lien on
its personal property and fixtures. The Company has also caused its domestic
subsidiaries, Sifco Custom Machining Company, a Minnesota corporation, and Sifco
Holdings, Inc., a Delaware corporation (collectively, the "Domestic
Guarantors"), to guarantee the Company's obligations to the Bank, pursuant to a
Guaranty of Payment, secured by a blanket on the Accounts Receivable, Inventory,
Equipment and General Intangibles of the Guarantors. The Company has also caused
its foreign subsidiaries to guarantee the Company's obligations to the Bank
pursuant to a Guaranty of Payment. THE COMPANY AND THE BANK FURTHER AGREE THAT
AT THE TIME THAT THE COMPANY'S INTEREST COVERAGE RATIO EQUALS OR EXCEEDS 2.50 TO
1.00 ON A FOUR (4) QUARTER ROLLING BASIS, THE BANK SHALL RELEASE THE FOREGOING
LIENS GRANTED TO THE BANK.

         SECTION 13. INDEMNIFICATION. To the extent permitted by law, the
Company hereby indemnifies and holds harmless the Bank from and against any and
all claims, damages, losses, liabilities, reasonable costs and expenses
whatsoever (including reasonable attorney's fees) which the Bank may incur (or
which may be claimed against the Bank by any person or entity whatsoever) by
reason of or in connection with the execution and delivery or transfer of, or


                                      -17-
<PAGE>


payment or failure to pay under, the Letter of Credit; PROVIDED, that the
Company shall not be required to indemnify the Bank, and the Bank hereby
indemnifies and hold's harmless the Company, for any claims, damages, losses,
liabilities, costs or expenses to the extent, but only to the extent, directly
caused by (a) the willful misconduct or negligence of the Bank, (b) the Bank's
providing incorrect or misleading or allegedly incorrect or misleading
information to the Underwriter for inclusion in the Offering Circular or
omitting to provide information necessary to make the statements contained
therein by the Bank not misleading, or (c) the Bank's wrongful failure to pay
under the Letter of Credit after the actual physical presentation to it at the
Letter of Credit Section of the International Division by the Trustee (or a
successor trustee under the Indenture to whom the Letter of Credit has been
transferred in accordance with its terms) of a draft and certificate strictly
complying with the terms and conditions of the Letter of Credit. Nothing in this
Section 13 shall limit the Company's reimbursement obligation contained in
paragraphs (b) and (d) of Section 2 hereof.

         SECTION 14. CONTINUING OBLIGATION. This Agreement is a continuing
obligation and shall (a) be binding upon the Bank and the Company, their
successors and assigns, and (b) inure to the benefit of and be enforceable by
the Bank and the Company and its successors and, to the extent not limited
herein, their assigns; PROVIDED, however, that the Company may not assign all or
any part of this Agreement without the prior written consent of the Bank, which
consent shall not be unreasonably withheld or unreasonably delayed. The Bank
reserves the right to sell participations in the rights under this Agreement.

         SECTION 15. TRANSFER OF LETTER OF CREDIT; REDUCTION OR TERMINATION OF
LETTER OF CREDIT COMMITMENT; REINSTATEMENT OF LETTER OF CREDIT AND RELATED
MATTERS.

         (a) The Letter of Credit may be transferred in accordance with the
provisions set forth therein.

         (b) If the aggregate principal amount of Bonds outstanding under the
Indenture shall be reduced by reason of redemption and cancellation of the
Bonds, the Bank shall reduce IN WHOLE OR IN PART, without penalty or premium,
the Stated Amount of the Letter of Credit by an amount equal to the sum of the
principal amount of Bonds redeemed and cancelled plus with respect to the
Interest Portion an amount equivalent to one hundred ten (110) days' interest
(computed on the basis of a 360 day year) on the corresponding principal amount
of Bonds redeemed and cancelled (at an assumed maximum rate of ten percent (10%)
per annum) upon receipt of the written certificate of the Trustee confirming the
principal amount of the redeemed and cancelled Bonds. Except as provided in
Section 15(c), such partial reduction of the Stated Amount of the Letter of
Credit shall be effective on the date specified in such notice and shall be in a
minimum amount of five thousand dollars ($5,000) with respect to the unpaid
principal amount of the Bonds plus interest.

         (c) It shall be a condition to any irrevocable partial reduction of the
Stated Amount of the Letter of Credit pursuant to Section 15(b) hereof, that the
Trustee either (i) surrender the out-


                                      -18-
<PAGE>


standing Letter of Credit to the Bank with such written certificate referred to
in said Section 15(b), and accept from the Bank a substitute irrevocable letter
of credit in the form of Annex 1 hereto, dated such date, for a Stated Amount
equal to the sum of the Principal Portion as reduced plus (x) an amount of
Interest Portion equal to one hundred ten (110) days' interest (computed on the
basis of a 360 day year) on such Principal Portion, computed at the assumed
maximum rate of ten percent (10%) per annum (also less the amount of any drawing
under the Letter of Credit which has not been reinstated under Section 15(d)
hereof) but otherwise having terms identical to the then outstanding Letter of
Credit or (ii) accept an amendment reflecting such reduction.

         (d) (i) Upon any B Drawing, the obligation of the Bank to honor demands
for payment under the Letter of Credit will be reinstated to the amount
available to be drawn immediately before such Drawing, (i) upon receipt of a
written Certificate for a B Drawing, appropriately completed by the Trustee
along with any funds, if any, held by the Trustee and (ii) upon remarketing of
the Bonds by the Remarketing Agent.

             (ii) On the fifth day following the honoring of any A Drawing, the
obligation of the Bank to honor demands for payment under the Letter of Credit
for interest due on the outstanding Notes will be automatically reinstated to
the full amount of the Interest Portion; provided that the Interest Portion of
the Stated Amount of the Letter of Credit shall not be so reinstated if (A)(1)
the Bank has not been reimbursed in full for such drawing or in full for a
previous or subsequent drawing under the Letter of Credit (other than a B
Drawing) or (2) an Event of Default hereunder shall have occurred and then be
continuing and (B) the Bank shall have notified the Trustee in writing on or
prior to the fifth day following the day on which such drawing was honored; such
notice stating that the Interest Portion of the Stated Amount of the Letter of
Credit shall not be reinstated. Failure of the Bank to deliver, within the time
stated, notice by telephone and confirmed in writing that the amount has not
been reinstated, shall be deemed to mean the amount drawn has been reinstated in
full. Notwithstanding the Bank's delivery of a certificate providing that the
reinstatement has not occurred, the Bank may thereafter present a new
certificate reinstating the amount of such drawing as a part of the available
Stated Amount.

         SECTION 16. LIABILITY OF THE BANK. The Company assumes all risks of the
acts or omissions of the Trustee and any transferee of the Letter of Credit with
respect to its use of the Letter of Credit or proceeds of any draw thereunder.
Neither the Bank nor any of its officers or directors shall be liable or
responsible for: (a) the use which may be made of the Letter of Credit or its
proceeds or for any acts or omissions of the Trustee and any transferee in
connection therewith; (b) the validity, sufficiency or genuineness of documents,
inaccuracy of any of the statements or representations contained in drafts or
certificates relating to such Letter of Credit or of any indorsement(s) thereon,
even if such documents should in fact prove to be in any or all respects
invalid, insufficient, fraudulent or forged; (c) intentionally left blank; or
(d) any other circumstances whatsoever in making or failing to make payment
under the Letter of Credit, except the Company shall have a claim against the
Bank, and the Bank shall be liable to the Company, to the extent, but only to
the extent, of any direct, as opposed to consequential,


                                      -19-
<PAGE>


damages suffered by the Company which were caused by (i) the Bank's willful
misconduct or negligence in honoring a draft under the Letter of Credit, or (ii)
the Bank's failure to pay under the Letter of Credit after the presentation to
it by the Trustee (or a successor trustee under the Indenture to whom the Letter
of Credit has been transferred in accordance with its terms) of a sight draft
and certificate strictly complying with the terms and conditions of the Letter
of Credit. In furtherance and not in limitation of the foregoing, the Bank may
accept documents that appear on their face to be in order, and may assume the
genuineness and rightfulness of any signature thereon, without responsibility
for further investigation, regardless of any notice or information to the
contrary; PROVIDED, that if the International Division, Letter of Credit Section
of the Bank shall receive written notification from the Trustee and the Company
that documents conforming to the terms of the Letter of Credit to be presented
to the Bank are not to be honored, the Bank agrees that it will not honor such
documents and the Company shall hold the Bank harmless from such failure to
honor.

         SECTION 17. COSTS, EXPENSES AND TAXES. The Company shall pay any and
all taxes and fees payable or determined to be payable, to governmental third
parties in connection with the execution, delivery, filing and recording of this
Agreement and such other documents which may be delivered in connection with
this Agreement, and the issuance and sale of the Bonds and agrees to save the
Bank harmless from and against any and all liabilities with respect to or
resulting from any delay in paying or omission to pay such taxes and fees,
PROVIDED, that the Bank agrees promptly to notify the Company of any such taxes
and fees.

         SECTION 18. LETTER OF CREDIT EXTENSION. The Letter of Credit will
expire on the earlier of (I) MAY 16, 2004, which is the Stated Expiration Date,
or (ii) the Termination Date, determined as provided by the Letter of Credit.
Upon the written request of the Company, which request shall be made on or about
May 15th of a year, commencing May 15, 2002, to extend the Stated Expiration
Date, the Bank may decide, in its sole discretion to extend the Stated
Expiration Date for one year from the Stated Expiration Date then in effect;
PROVIDED, HOWEVER, the Stated Expiration Date shall not be extended beyond May
16, 2013. The Bank shall notify the Company of its decision of whether the
Stated Expiration Date shall be extended no later than July 15th of such year,
provided that the failure of the Bank to deliver such notice, or to deliver any
notice, shall mean the Bank has elected NOT to extend the Stated Expiration
Date.

         If the Stated Expiration Date is extended, the terms and conditions
hereof, unless the Bank and the Company otherwise agree in writing, and the
terms and conditions of the Letter of Credit, unless the Bank, the Company and
the Trustee may otherwise agree in writing, shall remain in full force and
effect as if the extended Stated Expiration Date was the original Stated
Expiration Date. If the Bank extends the Stated Expiration Date, it shall
promptly notify the Trustee, and if the Trustee so requests, deliver to the
Trustee, against simultaneous delivery by the Trustee to the Bank of the
original Letter of Credit, a replacement Letter of Credit similar in all
respects except the extended Stated Expiration Date, to the original Letter of
Credit.


                                      -20-
<PAGE>


         SECTION 19. OBLIGATIONS OF BANK. The obligations of the Bank under the
Letter of Credit shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms of the Letter of Credit and this
Agreement.

         The Company acknowledges that the interest rate to be paid on the Bonds
is in part dependent upon the credit standing and rating of the Bank and
National City Corporation. The Company further acknowledges that neither the
Bank nor National City Corporation shall have any responsibility or liability to
the Company for any action, failure to act, or any other reason whatsoever,
which causes the interest on the Bonds to be paid at an increased rate or
otherwise affects the marketability of the Bonds or the credit standing of the
Company.

         SECTION 20. GOVERNING LAW. This Agreement shall be governed by, and
construed and interpreted in accordance with, the laws of the State of Ohio.

         SECTION 21. HEADINGS. Section headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.

SECTION 22. ANTI-TYING CERTIFICATION. The extension of credit provided for
herein is neither conditioned upon nor has the commitment fees or other fees
been based upon the Company's agreement to purchase other products or services
from Bank. Further, Bank has not offered such extension of credit or reduction
of fees.

SECTION 23. CONTROL. The Bank does not control, either directly or indirectly
through one or more intermediaries, the Company. Likewise, the Company does not
control, either directly or indirectly through one or more intermediaries, the
Bank. "Control" for this purpose has the meaning given to such term in section
2(a)(9) of the Investment Company Act of 1940. The Bank and the Company have
both covenanted in this Reimbursement Agreement to provide written notice to the
Trustee, the Remarketing Agent and the Bondholders thirty (30) days prior to the
consummation of any transaction that would result in the Company controlling or
being controlled by the Bank or any provider of a Substitute or Alternate
Facility.

SECTION 24. AMORTIZATION. Unless waived by the Bank in writing, the Company
shall optionally redeem Bonds in accordance with the schedule set forth on Annex
2 to this Agreement, as such Annex 2 may be amended, modified or supplemented
from time to time.


                                      -21-
<PAGE>


IN WITNESS WHEREOF, THE PARTIES HERETO HAVE SIGNED THIS REIMBURSEMENT AGREEMENT
AS OF THE DATE FIRST ABOVE WRITTEN.


NATIONAL CITY BANK                      SIFCO INDUSTRIES, INC.



By /s/ Terry Wolford                    By /s/ Frank A. Cappello
  -----------------------                 -----------------------------
  Terry Wolford                           Frank A. Cappello
  Vice President                          Vice President-Finance & CFO



                                      -22-


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.B
<SEQUENCE>6
<FILENAME>l93943aex4-b.txt
<DESCRIPTION>EXHIBIT 4(B)
<TEXT>
<PAGE>
Chs90835.REV                                                        EXHIBIT 4(b)
4/26/02






                              AMENDED AND RESTATED
                          C R E D I T   A G R E E M E N T


                                     between


                             SIFCO INDUSTRIES, INC.

                                       and

                               NATIONAL CITY BANK

                                 April 30, 2002

                        $10,000,000 of Revolving Credits





<PAGE>

Table of Contents

<TABLE>

<S>                                                                                                <C>
1A.  CROSS-REFERENCE.................................................................................1
1B.  SUMMARY.........................................................................................1
2A.  SUBJECT COMMITMENT..............................................................................1
         2A.01  AMOUNT...............................................................................1
         2A.02  TERM.................................................................................1
         2A.03  OPTIONAL REDUCTIONS..................................................................1
         2A.04  COMMITMENT FEE.......................................................................1
         2A.05  EXTENSION OF SUBJECT COMMITMENT......................................................2
2B.  SUBJECT LOANS...................................................................................2
         2B.01  SUBJECT NOTE.........................................................................2
         2B.02  CREDIT REQUESTS......................................................................2
         2B.03  CONDITION:  NO DEFAULT...............................................................3
         2B.04  CONDITION:  PURPOSE..................................................................3
         2B.05  LOAN MIX.............................................................................3
         2B.06  AMOUNT...............................................................................4
         2B.07  CONTRACT PERIODS.....................................................................4
         2B.08  MATURITIES...........................................................................4
         2B.09  ROLLOVER.............................................................................4
         2B.10  INTEREST:  PRIME RATE LOANS..........................................................5
         2B.11  INTEREST: FIXED-RATE LOANS...........................................................5
         2B.12  DISBURSEMENT.........................................................................6
         2B.13  PREPAYMENTS..........................................................................6
         2B.14  FIXED-RATE LOANS: UNAVAILABILITY.....................................................6
         2B.15  FIXED-RATE LOANS: ILLEGALITY.........................................................7
3A.  INFORMATION.....................................................................................7
         3A.01  FINANCIAL STATEMENTS.................................................................7
         3A.02  NOTICE...............................................................................8
3B.  GENERAL FINANCIAL STANDARDS.....................................................................9
         3B.01  REIMBURSEMENT AGREEMENT..............................................................9
         3C.  AFFIRMATIVE COVENANTS..................................................................9
         3C.01  TAXES................................................................................9
         3C.02  FINANCIAL RECORDS....................................................................10
         3C.03  VISITATION...........................................................................10
         3C.04  INSURANCE............................................................................10
         3C.05  CORPORATE EXISTENCE..................................................................10
         3C.06  COMPLIANCE WITH LAW..................................................................10
         3C.07  PROPERTIES...........................................................................11
3D.  NEGATIVE COVENANTS..............................................................................11
         3D.01  EQUITY TRANSACTIONS..................................................................11
         3D.02  BORROWINGS...........................................................................12
         3D.03  LIENS, LEASES........................................................................12
         3D.04  NEGATIVE PLEDGE......................................................................14
</TABLE>



                                      -i-

<PAGE>


Table of Contents

<TABLE>

<S>                                                                                                <C>
4A.  CLOSING.........................................................................................14
         4A.01  SUBJECT NOTE.........................................................................14
         4A.02  RESOLUTIONS/INCUMBENCY...............................................................14
         4A.03  LEGAL OPINION........................................................................14
4B.  WARRANTIES......................................................................................14
         4B.01  EXISTENCE............................................................................14
         4B.02  GOVERNMENTAL RESTRICTIONS............................................................14
         4B.03  CORPORATE AUTHORITY..................................................................15
         4B.04  LITIGATION...........................................................................15
         4B.05  TAXES................................................................................15
         4B.06  TITLE................................................................................15
         4B.07  LAWFUL OPERATIONS....................................................................15
         4B.08  INSURANCE............................................................................16
         4B.09  FINANCIAL STATEMENTS.................................................................16
         4B.10  DEFAULTS.............................................................................16
5A.  EVENTS OF DEFAULT...............................................................................16
         5A.0l  PAYMENTS.............................................................................16
         5A.02  WARRANTIES...........................................................................16
         5A.03  COVENANTS WITHOUT GRACE..............................................................16
         5A.04  COVENANTS WITH GRACE.................................................................16
         5A.05  CROSS-DEFAULT........................................................................17
         5A.06  BORROWER'S SOLVENCY..................................................................17
5B.  EFFECTS OF DEFAULT..............................................................................17
         5B.01  OPTIONAL DEFAULTS....................................................................17
         5B.02  AUTOMATIC DEFAULTS...................................................................18
         5B.03  OFFSETS..............................................................................18
6A.  INDEMNITY: STAMP TAXES..........................................................................18
6B.  INDEMNITY: GOVERNMENTAL COSTS/FIXED-RATE LOANS..................................................18
6C.  INDEMNITY: FUNDING COSTS........................................................................19
6D.  CREDIT REQUESTS.................................................................................19
6E.  INDEMNITY: UNFRIENDLY TAKEOVERS.................................................................19
6F.  INDEMNITY: CAPITAL REQUIREMENTS.................................................................19
6G.  INDEMNITY: COLLECTION COSTS.....................................................................20
6H.  CERTIFICATE FOR INDEMNIFICATION.................................................................20
7.  BANK'S PURPOSE...................................................................................20
8.  INTERPRETATION...................................................................................20
         8.01  WAIVERS...............................................................................20
         8.02  CUMULATIVE PROVISIONS.................................................................20
         8.03  BINDING EFFECT........................................................................21
         8.04  SURVIVAL OF PROVISIONS................................................................21
         8.05  IMMEDIATE U.S. FUNDS..................................................................21
</TABLE>



                                      -ii-
<PAGE>


Table of Contents

<TABLE>

<S>                                                                                                <C>
         8.06  CAPTIONS..............................................................................21
         8.07  SUBSECTIONS...........................................................................21
         8.08  ILLEGALITY............................................................................21
         8.09  OHIO LAW..............................................................................21
         8.10  INTEREST/FEE COMPUTATIONS.............................................................21
         8.11  NOTICE................................................................................21
         8.12  ACCOUNTING TERMS......................................................................22
         8.13  ENTIRE AGREEMENT......................................................................22
         8.14  SHARING OF INFORMATION................................................................22
9.  DEFINITIONS......................................................................................22
         ACCOUNT OFFICER.............................................................................22
         ACCUMULATED FUNDING DEFICIENCY..............................................................22
         AGREEMENT...................................................................................23
         BANK........................................................................................23
         BANKING DAY.................................................................................23
         BORROWER....................................................................................23
         COMPANY.....................................................................................23
         COMPENSATION................................................................................23
         CONTRACT PERIOD.............................................................................23
         CREDIT REQUEST..............................................................................23
         CURRENT ASSETS..............................................................................23
         CURRENT LIABILITIES.........................................................................23
         DEBT........................................................................................23
         DEFAULT UNDER ERISA.........................................................................23
         DEFAULT UNDER THIS AGREEMENT................................................................24
         ENVIRONMENTAL LAW...........................................................................24
         ERISA.......................................................................................24
         ERISA REGULATOR.............................................................................24
         EVENT OF DEFAULT............................................................................24
         EXPIRATION DATE.............................................................................24
         FEDERAL FUNDS RATE..........................................................................24
         FIXED-RATE LOAN.............................................................................25
         FUNDED INDEBTEDNESS.........................................................................25
         GAAP........................................................................................25
         INSOLVENCY ACTION...........................................................................25
         LIBO PRE-MARGIN RATE........................................................................25
         LIBOR LOAN..................................................................................26
         MATERIAL....................................................................................26
         MOST RECENT FINANCIAL STATEMENTS............................................................26
         NET INCOME..................................................................................26
         NET WORTH...................................................................................26
</TABLE>



                                     -iii-
<PAGE>


Table of Contents

<TABLE>

<S>                                                                                                <C>
         PENSION PLAN................................................................................26
         PRIME RATE..................................................................................26
         RECEIVABLE..................................................................................26
         RELATED WRITING.............................................................................26
         REPORTABLE EVENT............................................................................27
         PRIME RATE LOAN.............................................................................27
         SUBJECT COMMITMENT..........................................................................27
         SUBJECT INDEBTEDNESS........................................................................27
         SUBJECT LOAN................................................................................27
         SUBJECT NOTE................................................................................27
         SUBORDINATED................................................................................27
         SUBSIDIARY..................................................................................27
         SUPPLEMENTAL SCHEDULE.......................................................................27
         TOTAL LIABILITIES...........................................................................27
         WHOLLY-OWNED................................................................................28
         plurals.....................................................................................28
Signatures and Address...............................................................................28
</TABLE>

EXHIBIT A:  Supplemental Schedule (4B)
EXHIBIT B:  Subject Note (2B.01; 4A.01)
EXHIBIT C:  Extension Agreement (2A.05)



                                      -iv-

<PAGE>


                      AMENDED AND RESTATED CREDIT AGREEMENT


Agreement made as of April 30, 2002 by and between SIFCO INDUSTRIES, INC.
(BORROWER) and NATIONAL CITY BANK (Bank):

1A.  CROSS-REFERENCE -- Certain terms are defined in section 9.

1B.  SUMMARY -- This Agreement sets forth the terms and conditions upon which
the Borrower may obtain Subject Loans on a revolving basis until the Expiration
Date. This Agreement also sets forth covenants and warranties made by the
parties to induce each other to enter into this Agreement and contains other
Material provisions.

2A.  SUBJECT COMMITMENT -- The basic terms of the Subject Commitment and the
compensation therefor are as follows:

     2A.01 AMOUNT -- The amount of the Subject Commitment is ten million dollars
     ($10,000,000), but that amount may be reduced from time to time pursuant to
     subsection 2A.03 and the Subject Commitment may be terminated pursuant to
     section 5B.

     2A.02 TERM -- The Subject Commitment shall commence as of the date of this
     Agreement and shall remain in effect on a revolving basis until MARCH 31,
     2004 (the EXPIRATION DATE) EXCEPT that a later Expiration Date may be
     established from time to time pursuant to subsection 2A.05 and EXCEPT that
     the Subject Commitment shall end in any event upon any earlier reduction
     thereof to zero pursuant to subsection 2A.03 or any earlier termination
     pursuant to section 5B.

     2A.03 OPTIONAL REDUCTIONS -- Borrower shall have the right, at all times
     and without the payment of any premium, to permanently reduce the amount of
     the Subject Commitment by giving Bank one Banking Day's prior written
     notice of the amount of each such reduction and the effective date thereof
     subject, however, to the following:

          (a) No such reduction shall reduce the Subject Commitment to a lesser
          aggregate amount than the sum of the aggregate unpaid principal
          balance of the Fixed-Rate Loans then outstanding plus the aggregate
          unpaid principal balance of any Fixed-Rate Loans to be obtained
          pursuant to any unfulfilled Credit Request under subsection 2B.02 plus
          the aggregate unpaid principal balance of the prior loans, if any,
          then outstanding.

          (b) Concurrently with each reduction Borrower shall prepay such part,
          if any, of the principal of the Subject Loans then outstanding as may
          be in excess of the amount of the Subject Commitment as so reduced.
          Subsection 2B.13 and section 6C shall apply to each such prepayment.

     2A.04 COMMITMENT FEE -- Borrower agrees to pay Bank a commitment fee


                                      -1-
<PAGE>


          (a) based on the average daily difference between the amount of the
          Subject Commitment from time to time in effect and the aggregate
          unpaid principal balance of the Subject Loans then outstanding,

          (b) computed at the rate of one-quarter of one percent (1/4%) per
          annum so long as the Subject Commitment remains in effect and

          (c) payable in arrears on MAY 1, 2002 and quarter-annually thereafter
          and at the end of the Subject Commitment.

     2A.05 EXTENSION OF SUBJECT COMMITMENT -- Whenever Borrower furnishes its
     audited financial statements to Bank pursuant to clause (b) of subsection
     3A.01, commencing with the year ending September 30, 2002, Borrower may
     request that the Subject Commitment be extended one year to the May 1 next
     following the Expiration Date then in effect. Bank agrees to give
     consideration to each such request; but in no event shall Bank be committed
     to extend the Subject Commitment, nor shall the Subject Commitment be so
     extended, unless and until both Borrower and Bank shall have executed and
     delivered an extension agreement substantially in the form of Exhibit C
     with the blanks appropriately filled.

2B.  SUBJECT LOANS -- Bank agrees that so long as the Subject Commitment remains
in effect Bank will, subject to the conditions of this Agreement, grant Borrower
such Subject Loans as Borrower may from time to time request.

     2B.01 SUBJECT NOTE -- The Subject Loans shall be evidenced at all times by
     a Subject Note executed and delivered by Borrower, payable to the order of
     Bank in a principal amount equal to the dollar amount of the Subject
     Commitment as in effect at the execution and delivery of the Subject Note
     and being in the form and substance of Exhibit B with the blanks
     appropriately filled.

          (a) Whenever Borrower shall obtain a Subject Loan, Bank shall endorse
          an appropriate entry on the Subject Note or make an appropriate entry
          in a loan account in Bank's books and records, or both. Each entry
          shall be prima facie evidence of the data entered; but such entries
          shall not be a condition to Borrower's obligation to pay.

          (b) No holder of any Subject Note shall transfer a Subject Note, or
          seek a judgment or file a proof of claim based on a Subject Note,
          without in each case first endorsing the Subject Note to reflect the
          true amount owing thereon.

     2B.02 CREDIT REQUESTS -- Whenever Borrower desires to borrow pursuant to
     this Agreement, Borrower shall give Bank an appropriate notice (a CREDIT
     REQUEST) with such


                                      -2-
<PAGE>


     information as Bank may reasonably request. The Credit Request shall be
     irrevocable and shall (EXCEPT in the case of any obtained at the execution
     and delivery of this Agreement) be given to Bank not later than 12:00 noon
     Cleveland time

          (a) on the Banking Day the proceeds of any requested PRIME RATE LOAN
          is to be disbursed to Borrower and

          (b) on the third (3d) Banking Day prior to the Banking Day on which
          the proceeds of any requested LIBOR Loan are to be disbursed to
          Borrower.

     Each Credit Request shall be made either in writing or by telephone,
     PROVIDED that any telephone request shall be promptly confirmed in writing
     and Borrower shall assume the risk of misunderstanding.

     2B.03 CONDITION: NO DEFAULT -- Borrower shall not be entitled to obtain any
     Subject Loan if

          (a) any Default Under This Agreement shall then exist or would
          thereupon begin to exist or

          (b) any representation or warranty made in subsections 4B.01 through
          4B.08 (both inclusive) shall have ceased to be true and complete in
          any Material respect or

          (c) there shall have occurred any Material adverse change in
          Borrower's financial condition, properties or business since the date
          of Borrower's Most Recent Financial Statements or in its then most
          recent financial statements, if any, furnished to Bank pursuant to
          subsection 3A.01.

     Each Credit Request, both when made and when honored, shall of itself
     constitute a continuing representation and warranty by Borrower that
     Borrower is entitled to obtain, and Bank is obligated to make, the
     requested Subject Loan.

     2B.04 CONDITION: PURPOSE -- Borrower shall not use the proceeds of any
     Subject Loan in any manner that would violate or be inconsistent with
     Regulation U or X of the Board of Governors of the Federal Reserve System;
     nor will it use any such proceeds for the purpose of financing the
     acquisition of any corporation or other business entity if the acquisition
     is publicly opposed by the latter's management and if Bank deems that its
     participation in the financing would involve it in a conflict of interest.

     2B.05 LOAN MIX -- The Subject Loans at any one time outstanding may consist
     of PRIME RATE LOANs or LIBOR Loans or any combination thereof as Borrower
     may from time to time duly elect.


                                      -3-
<PAGE>


     2B.06 AMOUNT -- No Subject Loan shall be made if, after giving effect
     thereto, the aggregate unpaid principal balance of the Subject Loans would
     exceed the amount of the Subject Commitment then in effect. Each Fixed-Rate
     Loan shall be in the principal sum of one million dollars ($1,000,000) or
     any greater amount (subject to the aforesaid limitations) that is a
     multiple of one hundred thousand dollars ($100,000).

     2B.07 CONTRACT PERIODS -- Each Fixed-Rate Loan shall have applicable
     thereto a Contract Period to be duly elected by Borrower in the Credit
     Request therefor. Each Contract Period shall begin on the date the loan
     proceeds are to be disbursed and shall end on such date, not later than the
     Expiration Date, as Borrower may select subject, however, to the following:

          (a) The Contract Period for each LIBOR Loan shall end one month or two
          or three or six months after the date of borrowing; PROVIDED, that

               (1) if any such Contract Period otherwise would end on a day that
               is not a Banking Day, it shall end instead on the next following
               Banking Day unless that day falls in another calendar month, in
               which latter case the Contract Period shall end instead on the
               last Banking Day of the next preceding calendar month, and

               (2) if the Contract Period commences on a day for which there is
               no numerical equivalent in the calendar month in which the
               Contract Period is to end, it shall end on the last Banking Day
               of that calendar month.

     2B.08 MATURITIES -- The stated maturity of each PRIME RATE LOAN shall be
     the Expiration Date. The stated maturity of each Fixed-Rate Loan shall be
     the last day of the Contract Period applicable thereto. In no event,
     however, shall the stated maturity of any Subject Loan be later than the
     Expiration Date.

     2B.09 ROLLOVER -- If

          (a) prior to the Expiration Date any Fixed-Rate Loan shall not be paid
          in full at the stated maturity thereof and

          (b) Borrower shall have failed to duly give Bank a timely Credit
          Request in respect thereof,

     Borrower shall be deemed to have duly given Bank a timely Credit Request to
     obtain (and Bank shall accordingly make) a PRIME RATE LOAN in a principal
     amount equal to the unpaid principal of the Fixed-Rate Loan then due, the
     proceeds of which PRIME RATE LOAN shall be applied to the payment in full
     of the Fixed-Rate Loan then due;


                                      -4-
<PAGE>


     PROVIDED that no such PRIME RATE LOAN shall of itself constitute a waiver
     of any then-existing Default Under This Agreement.

     2B.10 INTEREST: Prime Rate LOANS -- The principal of and overdue interest
     on any Prime Rate Loans shall bear interest payable in arrears on the first
     day of each February, May, August and November and at maturity and computed
     (in accordance with subsection 8.10)

          (a) prior to maturity, at a fluctuating rate equal to the Prime Rate
          from time to time in effect and

          (b) after maturity (whether occurring by lapse of time or by
          acceleration), at a fluctuating rate equal to the Prime Rate from time
          to time in effect plus two percent (2%) per annum,

     with each change in the Prime Rate automatically and immediately changing
     the rate thereafter applicable to the Prime Rate Loans; PROVIDED, that in
     no event shall the rate applicable to the Prime Rate Loans after the
     maturity thereof be less than the rate applicable thereto immediately
     before maturity.

     2B.11 INTEREST: FIXED-RATE LOANS -- The principal of and overdue interest
     on each Fixed-Rate Loan shall bear interest computed (in accordance with
     subsection 8.10) and payable as follows:

          (a) Prior to maturity each LIBOR Loan shall bear interest at a rate
          equal to

               the LIBOR pre-margin rate in effect at the start of the
               applicable Contract Period plus

               the applicable LIBOR MARGIN, namely, one and one half percent
               (1.50%) per annum; provided, however, the LIBOR margin shall be
               adjusted ANNUALLY upon receipt and based upon the Borrower's year
               end financial statements as follows:

                           PRETAX INTEREST COVERAGE           LIBOR MARGIN

                           10x>                                   1.25%
                           7.5x - 10x                             1.50%
                           5x - 7.5x                              1.75%
                           2.5x - 5x                              2.00%

          (b) After maturity (whether occurring by lapse of time or by
          acceleration), each Fixed-Rate Loan shall bear interest computed and
          payable in the same manner as


                                      -5-
<PAGE>


          in the case of Prime Rate Loans EXCEPT that in no event shall any
          Fixed-Rate Loan bear interest after maturity at a lesser rate than
          that applicable thereto immediately after maturity.

          (c) Interest on each Fixed-Rate Loan shall be payable in arrears on
          the last day of the Contract Period applicable thereto and at maturity
          and, in the case of any Contract Period having a longer term than
          ninety (90) days, shall also be payable every ninety (90) days or
          every three (3) months (in the case of LIBOR Loans) after the first
          day of the Contract Period.

     2B.12 DISBURSEMENT -- Bank shall disburse the proceeds of each Subject Loan
     to Borrower's general checking account with Bank in the absence of written
     instructions from Borrower to the contrary.

     2B.13 PREPAYMENTS -- Borrower may from time to time prepay the principal of
     the Prime Rate Loans in whole or in part and may from time to time prepay
     the principal of any given series of Fixed-Rate Loans in whole or in part,
     subject to the following:

          (a) Each prepayment of Fixed-Rate Loans shall be applied solely to a
          single Fixed-Rate Loan, shall aggregate one million dollars
          ($1,000,000) or any multiple thereof or an amount equal to the then
          aggregate unpaid principal balance thereof.

          (b) Each prepayment of the Prime Rate Loans may be made without
          penalty or premium. Any prepayment of any Fixed-Rate Loans (regardless
          of the reason for the prepayment) shall be subject to the payment of
          any indemnity required by section 6C.

          (c) No prepayment shall of itself reduce the Subject Commitment.

          (d) Concurrently with each prepayment, Borrower shall prepay the
          interest accrued on the prepaid principal.

     2B.14 FIXED-RATE LOANS: UNAVAILABILITY -- If at any time

          (a) Bank shall determine that dollar deposits of the relevant amount
          for the relevant Contract Period are not available in the London
          interbank eurodollar market (in the case of a LIBOR Loan) for the
          purpose of funding the Fixed-Rate Loan in question, or

          (b) Bank shall determine that circumstances affecting that market make
          it impracticable for Bank to ascertain the rate or rates applicable to
          such Fixed-Rate Loans,


                                      -6-
<PAGE>


     then and in each such case Bank shall, by written notice to Borrower,
     suspend Borrower's right thereafter to obtain Fixed-Rate Loans of the kind
     in question, which suspension shall remain in effect until such time, if
     any, as Bank may give written notice to Borrower that the condition giving
     rise to the suspension no longer prevails.

     2B.15 FIXED-RATE LOANS: ILLEGALITY -- If any governmental authority shall
     assert that it is unlawful for Bank to fund, make or maintain any
     Fixed-Rate Loans,

          (a) Bank shall give Borrower prompt written notice thereof and

          (b) Borrower shall promptly pay in full the principal of and interest
          on the Fixed-Rate Loan in question and make the reimbursement, if any,
          required by section 6C.

3A.  INFORMATION -- Borrower agrees that so long as the Subject Commitment
remains in effect and thereafter until the Subject Indebtedness shall have been
paid in full, Borrower will perform and observe each of the following:

     3A.01 FINANCIAL STATEMENTS -- Borrower will furnish to Bank

          (a) within forty-five (45) days after the end of each of the first
          three quarter-annual periods of each of Borrower's fiscal years,
          Borrower's balance sheet as at the end of the period and its
          statements of cash flow, income and surplus reconciliation for
          Borrower's current fiscal year to date, all prepared (but unaudited)
          on a comparative basis with the prior year, in accordance with GAAP
          (EXCEPT as disclosed therein) and in form and detail satisfactory to
          Bank,

          (b) as soon as available (and in any event within ninety (90) days
          after the end of each of Borrower's fiscal years), a complete copy of
          an annual audit report (including, without limitation, all financial
          statements therein and notes thereto) of Borrower for that year which
          shall be

               (1) prepared on a comparative basis with the prior year, in
               accordance with GAAP (EXCEPT as disclosed therein) and in form
               and detail satisfactory to Bank, and

               (2) certified (without qualification as to GAAP) by independent
               public accountants selected by Borrower and satisfactory to Bank.

          (c) concurrently with the delivery of any financial statement to Bank
          pursuant to clause (a) or (b), a certificate by Borrower's chief
          financial officer


                                      -7-
<PAGE>


               (1) certifying that to the best of the officer's knowledge and
               belief, (A) those financial statements fairly present in all
               Material respects Borrower's financial condition and the results
               of its operations in accordance with GAAP subject, in the case of
               interim financial statements, to routine year-end audit
               adjustments and (B) no Default Under This Agreement then exists
               or if any does, a brief description of the default and Borrower's
               intentions in respect thereof, and

               (2) setting forth calculations indicating whether or not Borrower
               is in compliance with the general financial standards of section
               3B,

          (d) promptly when filed (in final form) or sent, a copy of

               (1) each registration statement, Form 10-K annual report, Form
               10-Q quarterly report, Form 8-K current report or similar
               document filed by Borrower with the Securities and Exchange
               Commission (or any similar federal agency having regulatory
               jurisdiction over Borrower's securities) and

               (2) each proxy statement, annual report, certificate, notice or
               other document sent by Borrower to the holders of any of its
               securities (or any trustee under any indenture which secures any
               of its securities or pursuant to which such securities are
               issued) and

          (e) forthwith upon Bank's written request, such other information in
          writing about Borrower's financial condition, properties and
          operations and about Borrower's employee benefit plans, if any, as
          Bank may from time to time reasonably request.

     3A.02 NOTICE -- Borrower will cause its chief financial officer, or in his
     absence another officer designated by Borrower, to give Bank prompt written
     notice whenever any officer of Borrower

          (a) reasonably believes (or receives notice from any governmental
          agency alleging) that any Reportable Event has occurred in respect of
          any Pension Plan or that Borrower has become in Material
          non-compliance with any law or governmental order referred to in
          subsection 3C.06 if non-compliance therewith would materially and
          adversely affect Borrower's financial condition or its properties,

          (b) receives from the Internal Revenue Service or any other federal,
          state or local taxing authority any allegation of any default by
          Borrower in the payment of any tax that is Material in amount or
          notice of any assessment in respect thereof,


                                      -8-
<PAGE>


          (c) learns there has been brought against Borrower before any court,
          administrative agency or arbitrator any litigation or proceeding
          which, if successful, might have a Material, adverse effect on
          Borrower,

          (d) reasonably believes that any representation or warranty made in
          subsections 4B.01 through 4B.08 (both inclusive) shall have ceased in
          any Material respect to be true and complete or that any Default Under
          This Agreement shall have occurred or

          (e) reasonably believes that there has occurred or begun to exist any
          other event, condition or thing that likely may have a Material,
          adverse effect on Borrower's financial condition, operations or
          properties.

3B.  GENERAL FINANCIAL STANDARDS -- Borrower agrees that so long as the Subject
Commitment remains in effect and thereafter until the Subject Indebtedness shall
have been paid in full, Borrower will observe each of the following:

          3B.01 REIMBURSEMENT AGREEMENT - Borrower and Bank have entered into or
          will enter into an Amended and Restated Reimbursement Agreement dated
          as of April 30, 2002 (the "Reimbursement Agreement"), which
          Reimbursement Agreement contains certain financial covenants to be
          complied with by the Borrower. The Borrower shall comply with the
          financial covenants set forth in Section 7 of the Reimbursement
          Agreement, as such Reimbursement Agreement may be amended and/or
          supplemented from time to time, as though such covenants were set
          forth herein. If the Reimbursement Agreement shall expire or terminate
          for any reason and this Agreement shall remain outstanding, the
          Borrower shall contunue to comply wich such financial covenants until
          such time as covenants may be negotiated and inserted into this
          Agreement.

3C.  AFFIRMATIVE COVENANTS-- Borrower agrees that so long as the Subject
Commitment remains in effect and thereafter until the Subject Indebtedness shall
have been paid in full, Borrower will perform and observe each of the following:

          3C.01 TAXES -- Borrower will pay in full

               (a) prior in each case to the date when penalties for the
               nonpayment thereof would attach, all taxes, assessments and
               governmental charges and levies for which it may be or become
               subject and

               (b) prior in each case to the date the claim would become
               delinquent for non-payment, all other lawful claims (whatever
               their kind or nature) which, if unpaid, might become a lien or
               charge upon its property;


                                      -9-
<PAGE>


     PROVIDED, that no item need be paid so long as and to the extent that it is
     contested in good faith and by timely and appropriate proceedings which are
     effective to stay enforcement thereof.

     3C.02 FINANCIAL RECORDS -- Borrower will at all times keep true and
     complete financial records in accordance with GAAP and, without limiting
     the generality of the foregoing, make appropriate accruals to reserves for
     estimated and contingent losses and liabilities.

     3C.03 VISITATION -- Borrower will, to the extent not prohibited by law or
     government regulation or contract, permit Bank or Bank's agent(s) at all
     reasonable times and upon seven (7) days prior notice:

          (a) to visit and inspect Borrower's properties and examine its records
          at Bank's expense and to make copies of and extracts from such records
          and

          (b) to consult with Borrower's directors, officers, employees,
          accountants, actuaries, trustees and plan administrators in respect of
          its financial condition, properties and operations and the financial
          condition of its employee benefit plans, each of which parties is
          hereby authorized to make such information available to Bank to the
          same extent that it would be to Borrower.

     3C.04 INSURANCE -- Borrower will

          (a) keep itself and all of its insurable properties insured at all
          times to such extent, with such deductibles, by such insurers and
          against such hazards and liabilities as is generally and prudently
          done by like businesses, EXCEPT that if a more specific standard is
          provided in any Related Writing, the more specific standard shall
          prevail and

          (b) forthwith upon Bank's written request, furnish to Bank such
          information about Borrower's insurance as Bank may from time to time
          reasonably request, which information shall be prepared in form and
          detail reasonably satisfactory to Bank and certified by an officer of
          Borrower.

     3C.05 CORPORATE EXISTENCE -- Borrower will at all times maintain its
     corporate existence, rights and franchises.

     3C.06 COMPLIANCE WITH LAW -- Borrower will comply with all laws (whether
     federal, state or local and whether statutory, administrative or judicial
     or other) and with every lawful governmental order (whether administrative
     or judicial) and will, without limiting the generality of the foregoing,


                                      -10-
<PAGE>

          (a) use and operate all of its facilities and properties in Material
          compliance with all Environmental Laws and handle all hazardous
          materials in Material compliance therewith; keep in full effect each
          permit, approval, certification, license or other authorization
          required by any enviromnmental law for the conduct of any Material
          portion of its business; and comply in all other Material respects
          with all Environmental Laws;

          (b) make a full and timely payment of premiums required by ERISA and
          perform and observe all such further and other requirements of ERISA
          such that no Default under ERISA shall occur or begin to exist and

          (c) comply with all Material requirements of all occupational health
          and safety laws;

     PROVIDED, that this subsection shall not apply to any of the foregoing

          (i) if and to the extent that the same shall be contested in good
          faith by timely and appropriate proceedings which are effective to
          stay enforcement thereof and against which appropriate reserves shall
          have been established or

          (ii) in any other case so long as no Default Under This Agreement
          would occur or begin to exist if the maximum liability of all such
          items (including, without limitation, those referred to in clause (i))
          were reflected in Borrower's balance sheet as a current liability.

     3C.07 PROPERTIES -- Borrower will maintain all fixed assets necessary to
     its continuing operations in good working order and condition, ordinary
     wear and tear excepted.

3D.  NEGATIVE COVENANTS -- Borrower agrees that so long as the Subject
Commitments remain in effect and thereafter until the Subject Indebtedness shall
have been paid in full, Borrower will observe, and will cause each Subsidiary to
observe, such of the following provisions as are on their respective parts to be
complied with, namely:

     3D.01 EQUITY TRANSACTIONS -- Borrower will not, witout the prior written
     consent of the Bank:

          (a) be a party to any merger or consolidation,

          (b) acquire all or substantially all of the assets and business of
          another corporation or other business enterprise, whether by purchase
          or otherwise,


                                      -11-
<PAGE>


          (c) lease as lessor, sell, sell-leaseback or otherwise transfer
          (whether in one transaction or a series of transactions) all or any
          substantial part of its fixed assets EXCEPT chattels that shall have
          become obsolete or no longer useful in its present business;

     PROVIDED, that if no Default Under This Agreement shall then exist and if
     none would thereupon begin to exist, this subsection shall not apply to any
     transaction referred to in clause (a) or (b) if (1) after giving effect
     thereto, the nature of Borrower's business shall not be materially
     different from that at the date of this Agreement and (2) there shall have
     been executed and delivered to Bank an assumption agreement (to be in form
     and substance satisfactory to Bank) by the surviving corporation (if not
     Borrower) in the case of any merger, by the resulting corporation in the
     case of any consolidation and by the transferee (if not Borrower) in any
     transfer of any kind of assets.

     3D.02 BORROWINGS -- Borrower will not create, assume or have outstanding at
     any time any indebtedness for borrowed money or any Funded Indebtedness of
     any kind; PROVIDED, that this subsection shall not apply to

          (i) the Subject Indebtedness or any other Debt owing to Bank,

          (ii) any Subordinated indebtedness,

          (iii) any existing or future indebtedness secured by a purchase money
          security interest permitted by subsection 3D.04 or incurred under a
          lease permitted by subsection 3D.04 or

          (iv) any existing indebtedness fully disclosed in Borrower's Most
          Recent 4A.04 Financial Statements or in the Supplemental Schedule or
          any renewal or extension thereof in whole or in part.

     3D.03 LIENS, LEASES -- Borrower will not

          (a) lease any property as lessee or acquire or hold any property
          subject to any land contract, inventory consignment or other title
          retention contract,

          (b) sell or otherwise transfer any Receivables, whether with or
          without recourse or

          (c) suffer or permit any property now owned or hereafter acquired by
          it to be or become encumbered by any mortgage, security interest, lien
          or financing statement;

     PROVIDED, that this subsection shall not apply to


                                      -12-
<PAGE>


          (i) any tax lien, or any lien securing workers' compensation or
          unemployment insurance obligations, or any mechanic's, carrier's or
          landlord's lien, or any lien arising under ERISA, or any security
          interest arising under article four (bank deposits and collections) or
          five (letters of credit) of the Uniform Commercial Code, or any
          similar security interest or other lien, EXCEPT that this clause (i)
          shall apply only to security interests and other liens arising by
          operation of law (whether statutory or common law) and in the ordinary
          course of business and shall not apply to any security interest or
          other lien that secures any indebtedness for borrowed money or any
          Guaranty thereof or any obligation that is in Material default in any
          manner (other than any default contested in good faith by timely and
          appropriate proceedings effective to stay enforcement of the security
          interest or other lien in question),

          (ii) zoning or deed restrictions, public utility easements, minor
          title irregularities and similar matters having no adverse effect as a
          practical matter on the ownership or use of any of the property in
          question,

          (iii) any lien securing or given in lieu of surety, stay, appeal or
          performance bonds, or securing performance of contracts or bids (other
          than contracts for the payment of money borrowed), or deposits
          required by law or governmental regulations or by any court order,
          decree, judgment or rule or as a condition to the transaction of
          business or the exercise of any right, privilege or license, EXCEPT
          that this clause (iii) shall not apply to any lien or deposit securing
          an obligation that is in Material default in any manner (other than
          any default contested in good faith by timely and appropriate
          proceedings effective to stay enforcement of the security interest or
          other lien in question),

          (iv) any mortgage, security interest or other lien securing only
          Borrower's Debt to Bank,

          (v) any mortgage, security interest or other lien (each, a "purchase
          money security interest") which is created or assumed in purchasing,
          constructing or improving any real property or equipment or to which
          any such property is subject when purchased, PROVIDED, that (A) the
          purchase money security interest shall be confined to the aforesaid
          property, (B) the indebtedness secured thereby does not exceed the
          total cost of the purchase, construction or improvement and (C) any
          such indebtedness, if repaid in whole or in part, cannot be
          reborrowed,

          (vi) any lease other than any capitalized lease (it being agreed that
          a capitalized lease is a lien rather than a lease for the purposes of
          this Agreement) so long as the aggregate annual rentals of all such
          leases do not exceed six hundred thousand dollars ($600,000),


                                      -13-
<PAGE>


          (vii) any mortgage, security interest or other lien which (together
          with the indebtedness secured thereby) is fully disclosed in
          Borrower's Most Recent 4A.04 Financial Statements or in the
          Supplemental Schedule or

          (viii) any financing statement perfecting a security interest that
          would be permissible under this subsection.

     3D.04 NEGATIVE PLEDGE - Borrower agrees not to pledge, sell, encumber,
     transfer or otherwise dispose of any assets owned by it other than in the
     ordinary course of business without the prior written consent of the Bank.

4A.  CLOSING -- Borrower has complied with each of the following:

     4A.01 SUBJECT NOTE -- Borrower shall have executed and delivered a Subject
     Note to Bank in accordance with subsection 2B.01.

     4A.02 RESOLUTIONS/INCUMBENCY -- Borrower's secretary or assistant secretary
     shall have certified to Bank (a) a copy of resolutions duly adopted by
     Borrower's board of directors in respect of this Agreement and (b) the
     names and true signatures of officers authorized to execute and deliver
     this Agreement and Related Writings on behalf of Borrower.

     4A.03 LEGAL OPINION -- Borrower's counsel shall have rendered to Bank their
     written opinion in respect of the matters referred to in subsections 4B.01,
     4B.02, 4B.03 and 4B.04 and in respect of the perfection of each mortgage,
     security interest or other lien referred to in this section 4A, which
     opinion shall be in such form and substance (and may be subject only to
     such qualifications and exceptions, if any) as shall be satisfactory to
     Bank.

4B.  WARRANTIES -- Subject only to such additions and exceptions, if any, as
may be set forth in the Supplemental Schedule or in Borrower's Most Recent
Financial Statements, Borrower represents and warrants as follows:

     4B.01 EXISTENCE -- Borrower is a duly organized and validly existing Ohio
     corporation in good standing. Borrower is duly qualified to transact
     business in each state or other jurisdiction in which it owns or leases any
     real property or in which the nature of the business conducted makes such
     qualification necessary or, if not so qualified, such failure to qualify
     will have no Material adverse effect upon Borrower's financial condition
     and its ability to transact business. Borrower has no Subsidiaries.

     4B.02 GOVERNMENTAL RESTRICTIONS -- No registration with or approval of any
     governmental agency of any kind is required on the part of Borrower for the
     due


                                      -14-
<PAGE>


     execution and delivery or for the enforceability of this Agreement or any
     Related Writing other than the filing or recording of documents with public
     officials, the noting of title certificates and similar acts and things
     related to the perfection of the mortgages, security interests and other
     liens referred to in section 4A.

     4B.03 CORPORATE AUTHORITY -- Borrower has requisite corporate power and
     authority to enter into this Agreement and to obtain and secure the Subject
     Loan in accordance with this Agreement. The officer executing and
     delivering this Agreement on behalf of Borrower has been duly authorized to
     do so and to execute and deliver a Subject Note and other Related Writings
     in accordance with section 4A. Neither the execution and delivery of this
     Agreement or any Related Writing by Borrower nor its performance and
     observance of the respective provisions thereof will violate any existing
     provision in its articles of incorporation, regulations or by-laws or any
     applicable law or violate or otherwise constitute a default under any
     contract or other obligation now existing and binding upon it. Upon the
     execution and delivery thereof, this Agreement and the aforesaid Related
     Writings will each become a valid and binding obligation enforceable
     against Borrower according to their respective tenors subject, however, to
     any applicable insolvency or bankruptcy law of general applicability and
     general principles of equity.

     4B.04 LITIGATION -- No litigation or proceeding is pending against Borrower
     before any court, administrative agency or arbitrator which might, if
     successful, have a Material adverse effect on Borrower.

     4B.05 TAXES -- Borrower has filed all federal, state and local tax returns
     which are required to be filed by it and paid all taxes due as shown
     thereon (EXCEPT to the extent, if any, permitted by subsection 3C.01). The
     Internal Revenue Service has not alleged any Material default by Borrower
     in the payment of any tax Material in amount or threatened to make any
     assessment in respect thereof which has not been reflected in Borrower's
     Most Recent 4A.04 Financial Statements.

     4B.06 TITLE -- Borrower has good and marketable title to all assets
     reflected in its Most Recent 4A.04 Financial Statements EXCEPT for changes
     resulting from transactions in the ordinary course of business. All such
     assets are clear of any mortgage, security interest or other lien of any
     kind other than any permitted by subsection 3D.04.

     4B.07 LAWFUL OPERATIONS -- Borrower's operations have at all relevant times
     been and continue to be in Material compliance with all requirements
     imposed by law, whether federal, state or local, whether statutory,
     regulatory or other, including (without limitation) ERISA, all
     Environmental Laws, and occupational safety and health laws and all zoning
     ordinances. Borrower has received no notice from any governmental agency,
     court or authority that it is a potentially responsible party for the
     clean-up of any environmental waste site, is in violation of any
     environmental permit or law or has been placed on any registry of solid or
     hazardous waste disposal site.


                                      -15-
<PAGE>


     4B.08 INSURANCE -- Borrower's insurance coverage complies with the
     standards set forth in subsection 3C.04 and those set forth in the Related
     Writings referred to in subsections 4A.05 and 4A.06.

     4B.09 FINANCIAL STATEMENTS -- Each of the financial statements referred to
     in subsection 4A.04 has been prepared in accordance with generally accepted
     accounting principles applied on a basis consistent with those used by
     Borrower during its then next preceding full fiscal year EXCEPT to the
     extent, if any, specifically noted therein and fairly presents in all
     Material respects (subject to routine year-end audit adjustments in the
     case of the unaudited financial statements) it's financial condition as of
     the date thereof (including a full disclosure of Material contingent
     liabilities, if any) and the results of its operations, if any, for the
     fiscal period then ending. There has been no Material adverse change in
     Borrower's financial condition, properties or business since the date of
     Borrower's Most Recent 4A.04 Financial Statements nor any change in its
     accounting procedures since the end of Borrower's latest full fiscal year
     covered by those statements.

     4B.10 DEFAULTS -- No Default Under This Agreement exists, nor will any
     exist immediately after the execution and delivery of this Agreement.

5A.  EVENTS OF DEFAULT -- Each of the following shall constitute an Event of
Default hereunder:

     5A.01 PAYMENTS -- If any principal included in the Subject Indebtedness
     shall not be paid in full promptly when the same becomes payable; or if any
     Subject Indebtedness (EXCEPT principal) or any of Borrower's other Debt to
     Bank (EXCEPT any payable on demand) shall not be paid in full promptly when
     the same becomes payable and shall remain unpaid for ten (10) consecutive
     days thereafter; or if such of Borrower's Debt, if any, to Bank, as may be
     payable on demand shall not be paid in full within ten (10) days after any
     actual demand for payment.

     5A.02 WARRANTIES -- If any representation, warranty or statement made in
     this Agreement or in any Related Writing referred to in section 4A shall be
     false or erroneous in any respect; or if any representation, warranty or
     statement hereafter made by or on behalf of Borrower in any Related Writing
     not referred to in section 4A shall be false or erroneous in any Material
     respect.

     5A.03 COVENANTS WITHOUT GRACE -- If Borrower shall fail or omit to perform
     or observe any provisions in subsections 3A.02.

     5A.04 COVENANTS WITH GRACE -- If anyone (other than Bank and its agents)
     shall fail or omit to perform and observe any agreement (other than those
     referred to in


                                      -16-
<PAGE>


     subsections 5A.01 or 5A.03) contained in this Agreement or any Related
     Writing that is on its part to be complied with, and that failure or
     omission shall not have been fully corrected within thirty (30) days after
     the giving of written notice to Borrower by Bank that it is to be remedied.

     5A.05 CROSS-DEFAULT -- If any of Borrower's indebtedness for borrowed money
     (regardless of maturity) or any of its Funded Indebtedness shall be or
     become "in default" (as defined below). In this subsection, IN DEFAULT
     means that (a) there shall have occurred (or shall exist) in respect of the
     indebtedness in question (either as in effect at the date of this Agreement
     or as in effect at the time in question) any event, condition or other
     thing which constitutes, or which with the giving of notice or the lapse of
     any applicable grace period or both would constitute, a default which
     accelerates (or permits any creditor or creditors or representative or
     creditors to accelerate) the maturity of any such indebtedness; or (b) any
     such indebtedness (other than any payable on demand) shall not have been
     paid in full at its stated maturity; or (c) any such indebtedness payable
     on demand shall not have been paid in full within ten (10) Banking Days
     after any actual demand for payment.

     5A.06 BORROWER'S SOLVENCY -- If (a) Borrower shall discontinue operations,
     or (b) Borrower shall commence any Insolvency Action of any kind or admit
     (by answer, default or otherwise) the Material allegations of, or consent
     to any relief requested in, any Insolvency Action of any kind commenced
     against Borrower by its creditors or any thereof, or (c) any creditor or
     creditors shall commence against Borrower any Insolvency Action of any kind
     which shall remain in effect (neither dismissed nor stayed) for thirty (30)
     consecutive days.

5B.  EFFECTS OF DEFAULT -- Notwithstanding any contrary provision or inference
in this Agreement or in any Related Writing:

     5B.01 OPTIONAL DEFAULTS -- If any Event of Default referred to in
     subsection 5A.01 through 5A.05, both inclusive, shall occur and be
     continuing, Bank shall have the right in its discretion, by giving written
     notice to Borrower,

          (a) to terminate the Subject Commitment (if not already expired or
          reduced to zero pursuant to section 2A or terminated pursuant to this
          section) and Bank shall have no obligation thereafter to grant any
          Subject Loan to Borrower, and

          (b) to accelerate the maturity of all of Borrower's Debt to Bank
          (other than Debt, if any, already due and payable), and all such Debt
          shall thereupon become and thereafter be immediately due and payable
          in full without any presentment or demand and without any further or
          other notice of any kind, all of which are hereby waived by Borrower.


                                      -17-
<PAGE>


     5B.02 AUTOMATIC DEFAULTS -- If any Event of Default referred to in
     subsection 5A.06 shall occur,

          (a) the Subject Commitment shall automatically and immediately
          terminate (if not already expired or reduced to zero pursuant to
          section 2A or terminated pursuant to this section) and Bank shall have
          no obligation thereafter to grant any Subject Loan to Borrower, and

          (b) all of Borrower's Debt to Bank (other than Debt, if any, already
          due and payable) shall thereupon become and thereafter be immediately
          due and payable in full, all without any presentment, demand or notice
          of any kind, which are hereby waived by Borrower.

     5B.03 OFFSETS -- If there shall occur or exist any Default Under This
     Agreement referred to in subsection 5A.07, then, so long as that Default
     Under This Agreement exists, Bank shall have the right at any time to set
     off against and to appropriate and apply toward the payment of the Subject
     Indebtedness then owing to it, whether or not the same shall then have
     matured, any and all deposit balances then owing by Bank to or for the
     credit or account of Borrower, all without notice to or demand upon
     Borrower, all such notices and demands being hereby expressly waived.

6A.  INDEMNITY: STAMP TAXES -- Borrower will pay all stamp taxes and similar
taxes, if any, including interest and penalties, if any, payable in respect of
the issuance of the Subject Indebtedness.

6B.   INDEMNITY: GOVERNMENTAL COSTS/FIXED-RATE LOANS -- If

          (a) there shall be introduced or changed any treaty, statute,
          regulation or other law, or there shall be made any change in the
          interpretation or administration thereof, or there shall be made any
          request from any central bank or other lawful governmental authority,
          the effect of any of which events shall be to (1) impose, modify or
          deem applicable any reserve or special deposit requirements against
          assets held by or deposits in or loans by any national banking
          association (whether or not applicable to Bank) or by Bank or (2)
          subject Bank to any tax, duty, fee, deduction or withholding or (3)
          change the basis of taxation of payments due to Bank from Borrower
          (otherwise than by a change in taxation of Bank's overall net income)
          or (4) impose on Bank any penalty in respect of any Fixed-Rate Loans
          and

          (b) in Bank's sole opinion any such event (1) increases (or, if the
          event were applicable to Bank, would increase) the cost of making,
          funding or maintaining any Fixed-Rate Loan or (2) reduces the amount
          of any payment to be made to Bank in respect of the principal or
          interest on any Fixed-Rate Loan or other payment under this Agreement,


                                      -18-
<PAGE>


then, upon Bank's demand, Borrower shall from time to time pay Bank an amount
equal to each such cost increase or reduced payment, as the case may be.

6C.  INDEMNITY: FUNDING COSTS -- Borrower agrees to indemnify Bank against any
loss relating in any way to its funding of any Fixed-Rate Loan paid before its
stated maturity (whether a prepayment or a payment following any acceleration of
maturity) and to pay Bank, as liquidated damages for any such loss, an amount
(discounted to the present value in accordance with standard financial practice
at a rate equal to the treasury yield) equal to interest computed on the
principal payment from the payment date to the respective stated maturities
thereof at a rate equal to the difference of the contract rate less the treasury
yield, all as determined by Bank in its reasonable discretion. TREASURY YIELD
means the annual yield on direct obligations of the United States having a
principal amount and maturity similar to that of the principal being paid.

6D.  CREDIT REQUESTS -- Whenever Borrower shall revoke any Credit Request for a
Fixed-Rate Loan, or shall for any other reason fail to borrow pursuant thereto
or otherwise comply therewith, or shall fail to honor any prepayment notice,
then, in each case on any bank's demand, Borrower shall pay each bank such
amount as will compensate it for any loss, cost or expense incurred by it by
reason of its liquidation or reemployment of deposits or other funds.

6E.  INDEMNITY: UNFRIENDLY TAKEOVERS -- Borrower agrees to indemnify Bank and
hold Bank harmless from and against any and all liabilities, losses, damages,
costs and expenses of any kind (including, without limitation, the reasonable
fees and disbursements of counsel in connection with any investigative,
administrative or judicial proceeding, whether or not Bank shall be designated a
party thereto) which may be incurred by Bank relating to or arising out of any
actual or proposed use of proceeds of the Subject Loans in connection with the
financing of an acquisition of any corporation or other business entity,
PROVIDED that Bank shall have no right to be indemnified hereunder for its own
gross negligence or willful misconduct as determined by a court of competent
jurisdiction.

6F.  INDEMNITY: CAPITAL REQUIREMENTS -- If

          (a) at any time any governmental authority shall require National City
          Corporation or Bank, whether or not the requirement has the force of
          law, to maintain, as support for the Subject Commitment, capital in a
          specified minimum amount that either is not required or is greater
          than that required at the date of this Agreement, whether the
          requirement is implemented pursuant to the "risk-based capital
          guidelines" (published at 12 CFR 3 in respect of "national banking
          associations", 12 CFR 208 in respect of "state member banks" and 12
          CFR 225 in respect of "bank holding companies") or otherwise, and

          (b) as a result thereof the rate of return on capital of National City
          Corporation or Bank or both (taking into account their then policies
          as to capital adequacy and assuming full utilization of their capital)
          shall be directly or indirectly reduced by reason of any new or added
          capital thereby allocable to the Subject Commitment,


                                      -19-
<PAGE>


then and in each such case Borrower shall, on Bank's demand, pay Bank as an
additional fee such amounts as will in Bank's reasonable opinion reimburse
National City Corporation and Bank for any such reduced rate of return.

6G.  INDEMNITY: COLLECTION COSTS -- If any Event of Default shall occur and
shall be continuing, Borrower will pay Bank such further amounts, to the extent
permitted by law, as shall cover Bank's costs and expenses (including, without
limitation, the reasonable fees, interdepartmental charges and disbursements of
its counsel) incurred in collecting the Subject Indebtedness or in otherwise
enforcing its rights and remedies in respect thereof.

6H.  CERTIFICATE FOR INDEMNIFICATION -- Each demand by Bank for payment
pursuant to section 6A, 6B, 6C, 6D, 6E, 6F or 6G shall be accompanied by a
certificate setting forth the reason for the payment, the amount to be paid, and
the computations and assumptions in determining the amount, which certificate
shall be presumed to be correct in the absence of manifest error. In determining
the amount of any such payment, Bank may use reasonable averaging and
attribution methods.

7.  BANK'S PURPOSE -- Bank represents and warrants to Borrower that Bank is
familiar with the Securities Act of 1933 as amended and the rules and
regulations thereunder and is not entering into this Agreement with any
intention of violating that Act or any rule or regulation thereunder, it being
understood, however, that Bank shall at all times retain full control of the
disposition of its assets.

8.  INTERPRETATION -- This Agreement and the Related Writings shall be governed
by the following provisions:

     8.01 WAIVERS -- Bank may from time to time in its discretion grant Borrower
     waivers and consents in respect of this Agreement or any Related Writing or
     assent to amendments thereof, but no such waiver or consent shall be
     binding upon Bank unless specifically granted by Bank in writing, which
     writing shall be strictly construed. Without limiting the generality of the
     foregoing, Borrower agrees that no course of dealing in respect of, nor any
     omission or delay in the exercise of, any right, power or privilege by Bank
     shall operate as a waiver thereof, nor shall any single or partial exercise
     thereof preclude any further or other exercise thereof or of any other, as
     each such right, power or privilege may be exercised either independently
     or concurrently with others and as often and in such order as Bank may deem
     expedient.

     8.02 CUMULATIVE PROVISIONS -- Each right, power or privilege specified or
     referred to in this Agreement or any Related Writing is in addition to and
     not in limitation of any other rights, powers and privileges that Bank may
     otherwise have or acquire by operation of law, by other contract or
     otherwise.


                                      -20-
<PAGE>


     8.03 BINDING EFFECT -- The provisions of this Agreement and the Related
     Writings shall bind and benefit Borrower and Bank and their respective
     successors and assigns, including each subsequent holder, if any, of the
     Subject Notes or any thereof; PROVIDED, that no person or entity other than
     Borrower may obtain Subject Loans; and PROVIDED, further, that neither any
     holder of any Subject Note or assignee of any Subject Loan, whether in
     whole or in part, shall thereby become obligated thereafter to grant
     Borrower any Subject Loan.

     8.04 SURVIVAL OF PROVISIONS -- All representations and warranties made in
     or pursuant to this Agreement or any Related Writing shall survive the
     execution and delivery of this Agreement and the Subject Notes. The
     provisions of sections 6A, 6B, 6C and 6D shall survive the payment of the
     Subject Indebtedness.

     8.05 IMMEDIATE U.S. FUNDS -- Any reference to money is a reference to
     lawful money of the United States of America which, if in the form of
     credits, shall be in immediately available funds.

     8.06 CAPTIONS -- The several captions to different sections and subsections
     of this Agreement are inserted for convenience only and shall be ignored in
     interpreting the provisions thereof.

     8.07 SUBSECTIONS -- Each reference to a section includes a reference to all
     subsections thereof (i.e., those having the same character or characters to
     the left of the decimal point) EXCEPT where the context clearly does not so
     permit.

     8.08 ILLEGALITY -- If any provision in this Agreement or any Related
     Writing shall for any reason be or become illegal, void or unenforceable,
     that illegality, voidness or unenforceability shall not affect any other
     provision.

     8.09 OHIO LAW -- This Agreement and the Related Writings and the respective
     rights and obligations of the parties hereto shall be construed in
     accordance with and governed by internal Ohio law.

     8.10 INTEREST/FEE COMPUTATIONS -- All interest and all fees for any given
     period shall accrue on the first day thereof but not on the last day
     thereof and in each case shall be computed on the basis of a 360-day year
     and the actual number of days elapsed. In no event shall interest accrue at
     a higher rate than the maximum rate, if any, permitted by law.

     8.11 NOTICE -- A notice to or request of Borrower shall be deemed to have
     been given or made under this Agreement or any Related Writing either upon
     the delivery of a writing to that effect (either in person or by
     transmission of a telecopy) to an officer of Borrower or five (5) days
     after a writing to that effect shall have been deposited in the



                                      -21-
<PAGE>


     United States mail and sent, with postage prepaid, by registered or
     certified mail, properly addressed to Borrower (Attention: chief financial
     officer). No other method of actually giving actual notice to or making a
     request of Borrower is hereby precluded. Every notice required to be given
     to Bank pursuant to this Agreement or any Related Writing shall be
     delivered (either in person or by transmission of a telecopy) to an Account
     Officer of Bank. A notice or request by mail is properly addressed to a
     party when addressed to it at the address set forth opposite its signature
     below or at such other address as that party may furnish to each of the
     others in writing for that purpose. A telecopy is transmitted to a party
     when transmitted to the telecopy number set forth opposite that party's
     signature below (or at such other telecopy number as that party may furnish
     to the other in writing for that purpose).

     8.12 ACCOUNTING TERMS -- Any accounting term used in this Agreement shall
     have the meaning ascribed thereto by GAAP subject, however, to such
     modification, if any, as may be provided by section 9 or elsewhere in this
     Agreement.

     8.13 ENTIRE AGREEMENT -- This Agreement and the Related Writings referred
     to in or otherwise contemplated by this Agreement set forth the entire
     agreement of the parties as to the transactions contemplated by this
     Agreement.

     8.14 SHARING OF INFORMATION -- Bank shall have the right to furnish to its
     Affiliates, and to such other persons or entities as Bank shall deem
     advisable for the conduct of its business, information concerning the
     business, financial condition, and property of Borrower, the amount of the
     Debt of Borrower, and the terms, conditions, and other provisions
     applicable to the respective parts thereof.

9.  DEFINITIONS -- As used in this Agreement and in the Related Writings,
EXCEPT where the context clearly requires otherwise,

     ACCOUNT OFFICER means that officer who at the time in question is
     designated by Bank as the officer having primary responsibility for giving
     consideration to Borrower's requests for credit or, in that officer's
     absence, that officer's immediate superior or any other officer who reports
     directly to that superior officer;

     ACCUMULATED FUNDING DEFICIENCY shall have the meaning ascribed thereto in
     section 302(a)(2) of ERISA;

     AFFILIATE means, when used with reference to any person or entity (the
     SUBJECT), a person or entity that is in control of, under the control of,
     or under common control with, the subject, the term CONTROL meaning the
     possession, directly or indirectly, of the power to direct the management
     or policies of a person or entity, whether through the ownership of voting
     securities, by contract, or otherwise;


                                      -22-
<PAGE>


     AGREEMENT means this Agreement and includes each amendment, if any, to this
     Agreement;

     BANK means National City Bank, a national banking association headquartered
     in Cleveland, Ohio;

     BANKING DAY means (a) in the case of a LIBOR Loan, a day on which banks in
     the London Interbank Market deal in United States dollar deposits and on
     which banking institutions are generally open for domestic and
     international business in Cleveland, Ohio and in New York City and (b) in
     any other case, any day other than a Saturday or a Sunday or a public
     holiday or other day on which banking institutions in Cleveland, Ohio, are
     generally closed and do not conduct a general banking business;

     BORROWER means Sifco Industries, Inc., an Ohio corporation;

     COMPANY refers to Borrower or to a Subsidiary of Borrower, as the case may
     be;

     COMPENSATION includes all considerations (including without limitation,
     deferred compensation and disbursements to trusts), whatever the form or
     kind, for services rendered;

     CONTRACT PERIOD is defined in subsection 2B.07;

     CREDIT REQUEST means a request made pursuant to subsection 2B.02;

     CURRENT ASSETS means the net book value of all such assets (after deducting
     applicable reserves, if any, and without consideration to any reappraisal
     or write-up of assets) as determined in accordance with GAAP;

     CURRENT LIABILITIES means all such liabilities as determined in accordance
     with GAAP and includes (without limitation) all accrued taxes and all
     principal of any Funded Indebtedness maturing within twelve months of the
     date of determination;

     DEBT means, collectively, all liabilities of the party or parties in
     question to Bank, whether owing by one such party alone or with one or more
     others in a joint, several, or joint and several capacity, whether now
     owing or hereafter arising, whether owing absolutely or contingently,
     whether created by loan, overdraft, Guaranty of payment or other contract
     or by quasi-contract or tort, statute or other operation of law or other,
     and whether participated to or from Bank in whole or in part; and in the
     case of Borrower includes, without limitation, the Subject Indebtedness;

     DEFAULT UNDER ERISA means (a) the occurrence or existence of a Material
     Accumulated Funding Deficiency in respect of any of the Companies'
     respective Pension Plans, (b)


                                      -23-
<PAGE>


     any failure by the Companies to make a full and timely payment of premiums
     required by ERISA for insurance against any employer's liability in respect
     of any such plan, (c) any Material breach of a fiduciary duty by any
     Company or trustee in respect of any such plan or (d) the existence of any
     action for the forceable termination of any such plan;

     DEFAULT UNDER THIS AGREEMENT means an event, condition or thing which
     constitutes (or which with the lapse of any applicable grace period or the
     giving of notice or both would constitute) an Event of Default referred to
     in section 5A and which has not been appropriately waived in writing in
     accordance with this Agreement or corrected to Bank's full satisfaction;

     ENVIRONMENTAL LAW means the Comprehensive Environmental Response,
     Compensation, and Liability Act (42 USC 9601 et seq.), the Hazardous
     Material Transportation Act (49 USC 1801 et seq.), the Resource
     Conservation and Recovery Act (42 USC 6901 et seq.), the Federal Water
     Pollution Control Act (33 USC 1251 et seq.), the Toxic Substances Control
     Act (15 USC 2601 et seq.) and the Occupational Safety and Health Act (29
     USC 651 et seq.), as such laws have been or hereafter may be amended, and
     any and all analogous future federal, or present or future state or local,
     statutes and the regulations promulgated pursuant thereto;

     ERISA means the Employee Retirement Income Security Act of 1974 (P.L.
     93-406) as amended from time to time and in the event of any amendment
     affecting any section thereof referred to in this Agreement, that reference
     shall be a reference to that section as amended, supplemented, replaced or
     otherwise modified;

     ERISA REGULATOR means any governmental agency (such as the Department of
     Labor, the Internal Revenue Service and the Pension Benefit Guaranty
     Corporation) having any regulatory authority over any of the Companies'
     Pension Plans;

     EVENT OF DEFAULT is defined in section 5A;

     EXPIRATION DATE means the date referred to as such in subsection 2A.02,
     EXCEPT that in the event of any extension pursuant to subsection 2A.05,
     EXPIRATION DATE shall mean the latest date to which the Subject Commitment
     shall have been so extended;

     FDIC ASSESSMENT RATE means the gross annual assessment rate (rounded
     upwards, if necessary, to the next higher 1/16 of 1%) actually incurred to
     the Federal Deposit Insurance Corporation (or any successor) by Bank for
     insurance on deposits in United States dollars at Bank's main office;

     FEDERAL FUNDS RATE means a fluctuating interest rate per annum, as in
     effect at the time in question, that is the rate determined by NCB to be
     the opening Federal Funds Rate per


                                      -24-
<PAGE>


     annum paid or payable by it on the day in question in its regional federal
     funds market for overnight borrowings from other banking institutions;

     FIXED-RATE LOAN means a Subject Loan that is not a Prime Rate Loan;

     FUNDED INDEBTEDNESS means indebtedness of the person or entity in question
     which matures or which (including each renewal or extension, if any, in
     whole or in part) remains unpaid for more than twelve months after the date
     originally incurred and includes, without limitation (a) any indebtedness
     (regardless of its maturity) if it is renewable or refundable in whole or
     in part solely at the option of that person or entity (in the absence of
     default) to a date more than one year after the date of determination, (b)
     any capitalized lease, (c) any Guaranty of Funded Indebtedness owing by
     another person or entity and (d) any Funded Indebtedness secured by a
     security interest, mortgage or other lien encumbering any property owned or
     being acquired by the person or entity in question even if the full faith
     and credit of that person or entity is not pledged to the payment thereof;
     PROVIDED, that in the case of any indebtedness payable in installments or
     evidenced by serial notes or calling for sinking fund payments, those
     payments maturing within twelve months after the date of determination
     shall be considered current indebtedness rather than Funded Indebtedness
     for the purposes of section 3B but shall be considered Funded Indebtedness
     for all other purposes;

     GAAP means generally accepted accounting principles applied in a manner
     consistent with those used in Borrower's latest fiscal year-end financial
     statements referred to in subsection 4A.04;

     INSOLVENCY ACTION means either (a) a pleading of any kind filed by the
     person, corporation or entity (an "insolvent") in question to seek relief
     from the insolvent's creditors, or filed by the insolvent's creditors or
     any thereof to seek relief of any kind against that insolvent, in any court
     or other tribunal pursuant to any law (whether federal, state or other)
     relating generally to the rights of creditors or the relief of debtors or
     both, or (b) any other action of any kind commenced by an insolvent or the
     insolvent's creditors or any thereof for the purpose of marshalling the
     insolvent's assets and liabilities for the benefit of the insolvent's
     creditors; and INSOLVENCY ACTION includes (without limitation) a petition
     commencing a case pursuant to any chapter of the federal bankruptcy code,
     any application for the appointment of a receiver, trustee, liquidator or
     custodian for the insolvent or any substantial part of the insolvent's
     assets, and any assignment by an insolvent for the general benefit of the
     insolvent's creditors;

     LIBO PRE-MARGIN RATE means the rate per annum (rounded upwards, if
     necessary, to the next higher 1/16 of 1%), as determined by Bank which
     equals the average rate per annum at which deposits in United States
     dollars are offered for deposits of the maturity and amount in question, at
     11:00 A.M. London time (or as soon thereafter as practicable) two


                                      -25-
<PAGE>


     Banking Days prior to the first day of the Contract Period in question, to
     Bank by prime banking institutions in any Eurodollar market reasonably
     selected by Bank;

     LIBOR LOAN means a Subject Loan having a Contract Period described in
     clause (b) of subsection 2B.07 and bearing interest in accordance with
     clause (b) of subsection 2B.11;

     MATERIAL means Material as determined by Bank in the reasonable exercise of
     its discretion;

     MOST RECENT 4A.04 FINANCIAL STATEMENTS means Borrower's most recent
     financial statements that are referred to in subsection 4A.04;

     NET INCOME means Net Income as determined in accordance with GAAP, after
     taxes and after extraordinary items, but without giving effect to any gain
     resulting from any reappraisal or write-up of any asset;

     NET WORTH means the excess (as determined on a consolidated basis and in
     accordance with GAAP) of the net book value (after deducting all applicable
     valuation reserves and without consideration to any reappraisal or write-up
     of assets) of the tangible assets (i.e., all assets other than intangibles
     such as patents, costs of businesses over net assets acquired, good will
     and treasury stock) of the corporation or corporations in question over
     their Total Liabilities;

     PENSION PLAN means a defined benefit plan (as defined in section 3(35) of
     ERISA) of the Companies or any thereof and includes, without limitation,
     any such plan that is a multi-employer plan (as defined in section 3(37) of
     ERISA) applicable to any of the Companies' employees;

     PRIME RATE means the fluctuating rate of interest which is publicly
     announced from time to time by Bank at its principal place of business as
     being its "prime rate" or "base rate" thereafter in effect, with each
     change in the Prime Rate automatically, immediately and without notice
     changing the fluctuating interest rate thereafter applicable hereunder, it
     being agreed that the Prime Rate is not necessarily the lowest rate of
     interest then available from Bank on fluctuating rate loans;

     RECEIVABLE means a claim for money due or to become due, whether classified
     as an account, instrument, chattel paper, general intangible, incorporeal
     hereditament or otherwise, and any proceeds of the foregoing;

     RELATED WRITING means any note, mortgage, security agreement, other lien
     instrument, financial statement, audit report, notice, legal opinion,
     Credit Request, officer's certificate or other writing of any kind which is
     delivered to the Bank and which is relevant in any


                                      -26-
<PAGE>


     manner to this Agreement or any Related Writing and includes, without
     limitation, the Subject Notes and the other writings referred to in
     sections 3A and 4A;

     REPORTABLE EVENT has the meaning ascribed thereto by ERISA;

     PRIME RATE LOAN means a Subject Loan maturing in the manner described in
     the first sentence of subsection 2B.08 and bearing interest in accordance
     with subsection 2B.11;

     SUBJECT COMMITMENT means Bank's commitment to extend credit to Borrower
     pursuant to sections 2A and 2B of this Agreement and upon the terms,
     subject to the conditions of this Agreement and in accordance with the
     other provisions of this Agreement;

     SUBJECT INDEBTEDNESS means, collectively, the principal of and interest on
     the Subject Loans and all fees and other liabilities, if any, incurred by
     Borrower to Bank pursuant to this Agreement or any Related Writing;

     SUBJECT LOAN means a loan obtained by Borrower pursuant to this Agreement;

     SUBJECT NOTE means a note executed and delivered by Borrower and being in
     the form and substance of Exhibit B with the blanks appropriately filled;

     SUBORDINATED, as applied to any liability of Borrower, means a liability
     which at the time in question is subordinated (by written instrument in
     form and substance satisfactory to Bank) in favor of the prior payment in
     full of Borrower's Debt to Bank;

     SUBSIDIARY means a corporation or other business entity if shares
     constituting a majority of its outstanding capital stock (or other form of
     ownership) or constituting a majority of the voting power in any election
     of directors (or shares constituting both majorities) are (or upon the
     exercise of any outstanding warrants, options or other rights would be)
     owned directly or indirectly at the time in question by the corporation in
     question or another SUBSIDIARY of that corporation or any combination of
     the foregoing;

     SUPPLEMENTAL SCHEDULE means the schedule incorporated into this Agreement
     as Exhibit A;

     TOTAL LIABILITIES means the aggregate (without duplication) of all
     liabilities of the corporation or corporations in question and includes,
     without limitation, (a) any indebtedness which is secured by any mortgage,
     security interest or other lien on any of their property even if the full
     faith and credit of none of them is pledged to the payment thereof, (b) any
     indebtedness for borrowed money or Funded Indebtedness of any kind if any
     such corporation or corporations is a Guarantor thereof and (c) any
     Subordinated indebtedness; PROVIDED, that there shall be excluded any
     liability under a


                                      -27-
<PAGE>


     reimbursement agreement relating to a letter of credit issued to finance
     the importation or exportation of goods;

     WHOLLY-OWNED, as applied to a Subsidiary, means that all of the outstanding
     shares of stock and all of the outstanding warrants, options and other
     rights to purchase stock, other than directors' qualifying shares, are held
     of record and beneficially owned by Borrower;

     the foregoing definitions shall be applicable to the respective plurals of
     the foregoing defined terms.

Address:                                SIFCO INDUSTRIES, INC.
 970 East 64th Street
 Cleveland, Ohio  44103
 Telecopy:                              By: /s/ Frank A. Cappello
                                           ------------------------------------
                                        Name:   Frank A. Cappello
                                        Title:  Vice President-Finance & CFO


Address:                                NATIONAL CITY BANK
 1900 East Ninth Street
 Attn: Corporate Banking Division
 Cleveland, Ohio 44114-3484             By: /s/ Terry Wolford
 Telecopy:  216/222-9396                   ------------------------------------
                                        Name:   Terry Wolford
                                        Title:   Vice President




                                      -28-
<PAGE>


                              SUPPLEMENTAL SCHEDULE



There is no item which Borrower must disclose in this Supplemental Schedule in
order to be in full compliance with subsections 3D.01, 3D.02, 3D.03 and 3D.04,
nor is there any addition or exception to the representations and warranties in
section 4B.





                                    EXHIBIT A



                                      -29-
<PAGE>



                                      NOTE


$10,000,000                    Cleveland, Ohio,             April 30, 2002


FOR VALUE RECEIVED, the undersigned, SIFCO INDUSTRIES, INC. (BORROWER), an Ohio
corporation, promises to pay to the order of NATIONAL CITY BANK, at the payee's
main office in Cleveland, Ohio, the principal sum of

                               TEN MILLION DOLLARS

(or, if less, the aggregate unpaid principal balance from time to time shown on
the reverse side), together with interest computed thereon in accordance with
the Credit Agreement referred to below, which principal and interest is payable
in accordance with the provisions in the Credit Agreement.

This note is issued pursuant to a certain Amended and Restated Credit Agreement
(the "Credit Agreement") made as of April 30, 2002 by and between the payee and
Borrower. The Credit Agreement contains definitions applicable to this note,
provisions governing the making of loans, the acceleration of the maturity
thereof, rights of prepayment and other provisions applicable to this note. Each
endorsement, if any, on the reverse side of this note (or any allonge thereto)
shall be prima facie evidence of the data so endorsed.

Borrower hereby authorizes any attorney at law at any time or times to appear in
any state or federal court of record in the United States of America after the
indebtedness represented by this note shall have become due, whether by lapse of
time or by acceleration of maturity, to waive the issuance and service of
process, to present this note (together with any endorsement or endorsements
thereon) to the court, to admit the maturity thereof and the nonpayment thereof
when due, to confess judgment against Borrower in favor of the holder of this
note for the full amount then appearing due, together with interest and costs of
suit, and thereupon to release all errors and waive all rights of appeal and
stay of execution. The foregoing warrant of attorney shall survive any judgment,
it being understood that should any judgment against Borrower be vacated for any
reason, the holder of this note may nevertheless utilize the foregoing warrant
of attorney in thereafter obtaining additional judgment or judgments against
Borrower.

Address:                                SIFCO INDUSTRIES, INC.
 970 East 64th Street
 Cleveland, Ohio  44103
                                        By:
                                           -------------------------------------
                                        Name:
                                        Title:


WARNING BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL.
IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR
PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECTFROM YOU
REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED
GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY
OTHER CAUSE.

                                    EXHIBIT B



                                      -30-
<PAGE>



                               EXTENSION AGREEMENT


This extension agreement made as of ___________________, 20___ by and between
Sifco Industries, Inc. (BORROWER) and National City Bank (BANK):

The parties have executed and delivered a certain amended and restated credit
agreement dated April 30, 2002 which provides for, among other things, a Subject
Commitment aggregating $10,000,000 and available to Borrower, upon certain terms
and conditions until March 31, 2004 (the EXPIRATION DATE now in effect) subject
to any earlier reduction or termination pursuant to the credit agreement.

In consideration of our mutual agreements and for other valuable considerations,
the parties agree that subsection 2A.02 of the credit agreement (captioned
"TERM") is hereby amended by deleting the date ______________, 20____ and by
substituting therefor the date "______________, 20____", which latter date shall
be the EXPIRATION DATE hereafter in effect.

In all other respects the credit agreement shall remain in full effect.


                                        SIFCO INDUSTRIES, INC.


                                        By
                                          --------------------------------------



                                        NATIONAL CITY BANK



                                        By
                                          --------------------------------------





                                    EXHIBIT C



                                      -31-


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.C
<SEQUENCE>7
<FILENAME>l93943aex4-c.txt
<DESCRIPTION>EXHIBIT 4(C)
<TEXT>
<PAGE>

                                                                    EXHIBIT 4(c)
                                 PROMISSORY NOTE
                                   (TERM LOAN)

$12,000,000                      CLEVELAND, OHIO                 APRIL 14, 1998

For value received, the undersigned, SIFCO INDUSTRIES, INC. ("Borrower), an Ohio
corporation, hereby promises to pay to the order of NATIONAL CITY BANK ("Bank"),
at its office in Cleveland, Ohio, the principal sum of

                             TWELVE MILLION DOLLARS

payable as follows, together with interest as provided below.

(a) Borrower shall pay Bank twenty eight (28) consecutive quarter-annual
instalments of principal, commencing on AUGUST 1, 1998 and continuing on the
first day of each quarter thereafter, the first twenty seven (27) instalments
shall be in the principal amount of three hundred thousand and no/100ths dollars
($300,000) plus interest as set forth below, with the final instalment to be in
an amount equal to all unpaid principal, together with interest thereon.
Borrower may elect to have interest calculated as either a Prime Rate Loan or a
LIBOR Loan or an Other Rate Loan, each as provided below.

(b) Each Prime-Rate Loan shall bear interest payable quarterly and at maturity
and computed at a fluctuating rate per annum equal to the Bank's Prime Rate from
time to time in effect, except that if any Event of Default shall occur and
remain in effect (unless waived in writing by Bank or fully corrected to Bank's
satisfaction) the principal of and interest then accrued on the Prime Rate Loans
shall thereafter bear interest at the rate of three percent (3%) per annum plus
the Prime Rate from time to time in effect. Each change in the Prime Rate shall
automatically and immediately change the rate thereafter applicable to the Prime
Rate Loans.

(c) Each Fixed-Rate Loan shall bear interest payable at the end of the
Fixed-Rate Interest Period, provided that if a Fixed-Rate Interest Period shall
be longer than three (3) months, Borrower shall pay interest after each three
(3) month period and in any event on the last day of each Fixed-Rate Interest
Period, and computed at a LIBOR Rate as set forth in the schedule below; except
that after maturity the principal of and interest then accrued on each
Fixed-Rate Loan shall bear interest at a rate equal to three percent (3%) per
annum plus the Prime Rate from time to time in effect.

         PRE TAX INTEREST COVERAGE                     LIBOR RATE
         -------------------------                     ----------
         greater than 10X                              LIBOR + 125bp
         7.5X - 10X                                    LIBOR + 150bp
         5.0X - 7.5X                                   LIBOR + 175bp
         2.5X - 5X                                     LIBOR + 200bp

         The initial rate on this Note shall be LIBOR PLUS 125bp.

(e) All interest shall be computed on the basis of a 360-day year and the actual
number of days elapsed.

1.    Certain terms used in this Note are defined in section 12.


<PAGE>

2. Each request for a LIBOR Loan shall be made by Borrower not later than 12:00
noon on the third Banking Day prior to the date the funds are to be disbursed to
Borrower. Each request for a Prime-Rate Loan shall be made by Borrower not later
than 12:00 noon on the Banking Day next preceding the date the funds are to be
disbursed to Borrower.

3. Bank shall be entitled to rely on any telephone or other oral request by
Borrower, from an authorized officer as set forth in corporate resolutions
passed from time to time, for a Loan. Each such telephone or oral request shall
be promptly confirmed in writing.

4. Each Prime Rate Loan may be in any principal amount. Each LIBOR Loan shall be
in the minimum principal amount of one million dollars ($1,000,000) or any
greater amount in excess thereof.

5. No principal of any Fixed-Rate Loan may be paid prior to the stated maturity
thereof unless Bank shall have given its prior written consent thereto and
Borrower has agreed to pay a premium or penalty if required by the Bank.

6. Without prejudice to any other provision of this Note, Borrower agrees that
if any principal of any Fixed-Rate Loan is paid prior to its stated maturity
(whether following any acceleration of maturity pursuant to section 11 or
pursuant to any notice given pursuant to section 9 or otherwise), or if Borrower
shall fail to pay any such principal when due, or if Borrower shall fail to
borrow or otherwise comply with its request, then and in each such case Borrower
will indemnify Bank against any documented loss or expense which Bank may
sustain or incur as a consequence thereof including (but not limited to) any
loss of profit, premium or penalty (as determined by Bank in the exercise of its
sole but reasonable discretion) incurred by Bank in respect of funds borrowed by
it for the purpose of making or maintaining the Fixed-Rate Loan. Bank's
certificate as to any such loss or expense shall be conclusive absent manifest
error. Prime Rate Loans may be prepaid in whole or in part at any time without
premium or penalty.

7. If there shall be introduced or changed any treaty, statute, regulation or
other law, or there shall be any change in the interpretation or administration
thereof, or there shall be made any request from any central bank or other
lawful governmental authority, which introduction, change or compliance with
shall (1) impose, modify or deem applicable any reserve or special deposit
requirements against assets held by or deposits in or loans by the Bank, or (2)
subject Bank to any tax, fee, deduction or withholding, or (3) change the basis
of taxation of payments due from Borrower (otherwise than by a change in
taxation of Bank's overall net income), or (4) impose on Bank any penalty in
respect of Fixed-Rate Loans and any such event increases Bank's cost of making,
funding or maintaining any Fixed-Rate Loans or reduce the amount of principal or
interest received by Bank in respect of the Fixed-Rate Loan, then, within thirty
(30) days of Bank's written request, Borrower shall pay Bank from time to time
such additional amounts as will compensate Bank for and indemnify it against
such increased costs or reduced amount. If such law or regulation shall reduce
Bank's cost or expense, Borrower shall receive the benefit of such reduced cost
or expense.

8. In the event any Regulatory Change shall make it unlawful for Bank to make or
maintain Fixed Rate Loans, Bank shall promptly give Borrower written notice and
explanation thereof. On the effective date of such Regulatory Change, the Fixed
Rate Loan shall be converted to a Prime Rate Loan.

                                      -2-
<PAGE>

9. Borrower shall comply with the financial and/or negative covenants contained
in the Reimbursement Agreement dated as of May 1, 1992 between Borrower and Bank
(the "1992 Reimbursement Agreement") as such Reimbursement Agreement may have
been modified or amended from time to time and as such Reimbursement Agreement
may be modified or amended from time to time in the future until such time as
the 1998 Reimbursement Agreement between Borrower and Bank (the 1998
Reimbursement Agreement") shall have been executed and delivered and thereafter
the financial and/or negative covenants contained in the 1998 Reimbursement
Agreement shall govern. If no Reimbursement Agreement shall be effective,
Borrower shall continue to comply with the covenants contained in the 1992
Reimbursement Agreement, as amended, until such time as new covenants may be
agreed upon for this Note.

10. Upon the occurrence and continuation of any Event of Default, the principal
of and accrued interest on all loans shall (if not already due) become
immediately due and payable without notice and without presentment or demand of
any kind. An Event of Default shall occur

         (a) if any principal or interest of any loan shall not be paid in full
         promptly when the same becomes due and payable and shall remain unpaid
         for ten (10) consecutive business days after written notice of
         non-payment thereof, or

         (b) if Borrower shall fail to perform and observe any agreement made by
         Borrower in this Note, other than that referred to in clause (a) of
         this section, and that failure (unless waived in writing by Bank or
         fully corrected to Bank's satisfaction) shall continue for thirty 30)
         consecutive days after written notice calling Borrower's attention
         thereto, or

         (c) if Borrower shall discontinue operations or commence any insolvency
         action of any kind, or admit (by answer, default or otherwise) the
         material allegations of, or consent to any relief requested in, any
         insolvency action of any kind commenced against Borrower by its
         creditors or any thereof, or if Borrowers creditors or any thereof
         shall commence against Borrower any insolvency action of any kind which
         shall remain in effect (neither dismissed nor stayed) for ninety-one
         (91) consecutive days.

         (d) if an Event of Default shall occur and be continuing under any
         other instrument or document providing a credit facility to Borrower.

         (e) Borrower shall fail to cause the following financial information to
         be forwarded to the Bank and such failure shall continue for a period
         of thirty (30) days after notice thereof from Bank:

               (i) Financial Statements of the Borrower within ninety (90) days
        after the end of each fiscal year, which financial statements have been
        audited by independent public accountants selected by Borrower and
        acceptable to Bank.

11. This Promissory Note is secured by Borrower's existing collateral agreements
with the Bank.

                                      -3-
<PAGE>



12. In this Note,

         "BANKING DAY" means (a) in the case of a LIBOR Loan, a day on which
         banks in the London Interbank Market dealing in United States dollar
         deposits and on which banking institutions are generally open for
         domestic and international business in Cleveland, Ohio and in New York
         City and (b) in any other case, any day other than a Saturday or a
         Sunday or a public holiday or other day on which banking institutions
         in Cleveland, Ohio, are generally closed and do not conduct a banking
         business;

         "PRIME RATE LOAN" means a loan obtained by Borrower that bears interest
         prior to the occurrence of any Event of Default at a fluctuating rate
         per annum equal to Bank's Prime Rate from time to time in effect, with
         each change in the Prime Rate automatically and immediately changing
         the aforesaid fluctuating rate;

         "EUROCURRENCY LIABILITIES" has the meaning assigned to that term by
         Regulation D of the Board of Governors of the Federal Reserve System,
         as in effect from time to time;

         "EVENT OF DEFAULT" is defined in section 10.

         "FIXED-RATE INTEREST PERIOD" means a LIBOR Interest Period.

         "FIXED-RATE LOAN" means any LIBOR Loan.

         "LIBOR" means the average (rounded upward to the nearest 1/16th of 1%)
         of the per annum rates at which deposits in immediately available funds
         in U.S. dollars for the relevant period during which a given LIBOR Loan
         will remain outstanding and in the amount of the LIBOR Loan are offered
         to National City Bank, Cleveland, Ohio ("NCB") by prime banks in any
         Eurodollar market reasonably selected by NCB, determined as of 11:00
         a.m. London time (or as soon thereafter as practicable), two (2)
         Banking Days prior to the date of the LIBOR Loan, plus the LIBOR
         Reserve Percentage from time to time in effect;

         "LIBOR INTEREST PERIOD" means a period ending one (1), two (2), three
         (3) or six (6) months after the date of borrowing, provided, that if
         any LIBOR Interest Period would otherwise end on a day that is not a
         Banking Day, it shall end on the next following Banking Day if such
         Banking Day is in the same calendar month or, if such Banking Day falls
         in the next succeeding calendar month, it shall end on the Banking Day
         next preceding the date in question.

         "LIBOR LOAN" means a loan obtained by Borrower that is payable on a
         date certain (not more than 6 months after the date of borrowing) and
         bears interest prior to maturity at a fixed rate equal to the
         applicable LIBOR plus the applicable premium in accordance with the
         aforementioned schedule;

         "LIBOR RESERVE PERCENTAGE" shall mean for any given day that percentage
         (expressed as a decimal) which is in effect on that day, as prescribed
         by the Board of Governors of the Federal Reserve System (or any
         successor) for determining the maximum reserve requirement (including,
         without limitation, all basic, supplemental, marginal and other
         reserves and taking into account any transitional adjustments or other
         scheduled changes in reserve requirements) for a member bank of the
         Federal Reserve System in Cleveland, Ohio, in respect of Eurocurrency
         Liabilities;

                                      -4-
<PAGE>

         "REGULATORY CHANGE" means, as to Bank, any change in law (whether
         domestic or foreign, federal, state of local, statutory,
         administrative, judicial or other), however characterized, or the
         adoption or making of any interpretation, directive or request (whether
         or not having the force of law) by any court or governmental agency or
         authority of any kind charged with the interpretation, directive or
         request (whether or not having the force of law), excluding, however,
         any such change which results in an adjustment of the Reserve
         Percentage and the effect of which is reflected in a change in the
         interest rates(s) of the LIBOR Loans(s) in question;

         "SUBJECT LOAN" means a LIBOR Loan or a Prime Rate Loan.

the foregoing definitions shall be applicable to the respective plurals of the
terms defined above.

13. No waiver, consent or other agreement shall be deemed to have been made by
Bank or be binding upon Bank unless specifically granted in writing, which
writing shall be strictly construed. Any notice to or demand upon Borrower shall
be sufficiently made or given for all purposes when sent by registered or
certified mail to the address hereinafter set forth but no other method of
giving notice or making demand is hereby precluded. This Note shall be construed
in accordance with Ohio law.

The undersigned hereby authorizes any attorney-at-law to appear in any Court of
Record in the State of Ohio or any other State or Territory of the United States
after this note becomes due by acceleration or otherwise, and waive the issuing
and service of process and confess judgment against the undersigned in favor of
the Bank or other holder of this note for the amount then appearing due and the
cost of suit, and thereupon to release all errors and waive all rights of appeal
and stay of execution.


- -------------------------------------------------------------------------------
"WARNING -- BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT
TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU
WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR
RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT,
OR ANY OTHER CAUSE".
- -------------------------------------------------------------------------------

Address:

970 East 64th Street                  SIFCO INDUSTRIES, INC.
Cleveland, Ohio 44103


                                      By:      /s/ Richard Demetter
                                          ------------------------------------
                                      Vice President & Chief Financial Officer


                                      -5-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.D
<SEQUENCE>8
<FILENAME>l93943aex4-d.txt
<DESCRIPTION>EXHIBIT 4(D)
<TEXT>
<PAGE>
                                                                    EXHIBIT 4(d)






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



                                 LOAN AGREEMENT

                                     between

              HILLSBOROUGH COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY

                                       and

                             SIFCO INDUSTRIES, INC.

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

                                   $4,100,000
              Hillsborough County Industrial Development Authority
           Industrial Development Variable Rate Demand Revenue Bonds,
                                   Series 1998
                        (SIFCO Industries, Inc., Project)

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

                                      Dated

                                      as of

                                   May 1, 1998

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


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


                        Squire, Sanders & Dempsey L.L.P.
                                  Bond Counsel



                                      -1-

<PAGE>




                                TABLE OF CONTENTS
                                -----------------

             (THIS TABLE OF CONTENTS IS NOT A PART OF THE AGREEMENT
                BUT RATHER IS FOR CONVENIENCE OF REFERENCE ONLY)

<TABLE>
<CAPTION>
                                                                                                                             PAGE
                                                           ARTICLE I
                                                          DEFINITIONS
<S>             <C>                                                                                                      <C>
Section 1.1.      USE OF DEFINED TERMS.................................................................................        2
Section 1.2.      DEFINITIONS..........................................................................................        2
Section 1.3.      INTERPRETATION.......................................................................................        5
Section 1.4.      CAPTIONS AND HEADINGS................................................................................        5

                                                          ARTICLE II
                                           REPRESENTATIONS, WARRANTIES AND COVENANTS

Section 2.1.      REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE ISSUER..............................................        6
Section 2.2.      REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BORROWER............................................        6

                                                          ARTICLE III
                                                COMPLETION OF THE 1998 PROJECT;
                                                 ISSUANCE OF THE PROJECT BONDS

Section 3.1.      CONSTRUCTION, ACQUISITION AND INSTALLATION OF THE 1998 PROJECT.......................................        8
Section 3.2.      PLANS AND SPECIFICATIONS.............................................................................        8
Section 3.3.      ISSUANCE OF THE BONDS, APPLICATION OF PROCEEDS.......................................................        8
Section 3.4.      DISBURSEMENTS FROM THE PROJECT FUND..................................................................        8
Section 3.5.      BORROWER REQUIRED TO PAY COSTS IN EVENT PROJECT FUND INSUFFICIENT....................................       10
Section 3.6.      COMPLETION DATE......................................................................................       10
Section 3.7.      INVESTMENT OF FUND MONEYS............................................................................       11
Section 3.8.      REBATE FUND..........................................................................................       11

                                                          ARTICLE IV
                                            LOAN BY ISSUER; REPAYMENT OF THE LOAN;
                                             LOAN PAYMENTS AND ADDITIONAL PAYMENTS

Section 4.1.      LOAN REPAYMENT; DELIVERY OF NOTES AND LETTER OF CREDIT...............................................       12
Section 4.2.      ADDITIONAL PAYMENTS..................................................................................       13
Section 4.3.      PLACE OF PAYMENTS....................................................................................       13
Section 4.4.      OBLIGATIONS UNCONDITIONAL............................................................................       13
Section 4.5.      ASSIGNMENT OF AGREEMENT AND REVENUES.................................................................       13
Section 4.6.      LETTER OF CREDIT.....................................................................................       13
</TABLE>



                                       -i-
<PAGE>



                                TABLE OF CONTENTS
                                -----------------
                                   (Continued)

<TABLE>
<CAPTION>
                                                                                                                             PAGE
                                                           ARTICLE V
                                              ADDITIONAL AGREEMENTS AND COVENANTS


<S>              <C>                                                                                                       <C>
Section 5.1       RIGHT OF INSPECTION..................................................................................       14
Section 5.2.      SALE, LEASE OR GRANT OF USE BY BORROWER..............................................................       14
Section 5.3.      INDEMNIFICATION......................................................................................       14
Section 5.4.      BORROWER NOT TO ADVERSELY AFFECT EXCLUSION FROM GROSS INCOME
                  OF INTEREST ON PROJECT BONDS.........................................................................       15
Section 5.5.      ASSIGNMENT BY ISSUER.................................................................................       15
Section 5.6.      BORROWER'S PERFORMANCE UNDER INDENTURE...............................................................       15
Section 5.7.      COMPLIANCE WITH LAWS.................................................................................       16
Section 5.8.      TAXES, PERMITS, UTILITY AND OTHER CHARGES............................................................       16
Section 5.9.      CONTINUED EXISTENCE..................................................................................       16
Section 5.10.     REMOVAL OF PORTIONS OF THE PROJECT...................................................................       16
Section 5.11.     NON-CONTROLLED PERSON COVENANT.......................................................................       16

                                                          ARTICLE VI
                                                  REDEMPTION OF PROJECT BONDS

Section 6.1.      OPTIONAL REDEMPTION..................................................................................       17
Section 6.2.      EXTRAORDINARY OPTIONAL REDEMPTION....................................................................       17
Section 6.3.      MANDATORY REDEMPTION OF PROJECT BONDS................................................................       18
Section 6.4.      ACTIONS BY ISSUER....................................................................................       18
Section 6.5.      REQUIRED DEPOSITS FOR OPTIONAL REDEMPTION............................................................       18

                                                          ARTICLE VII
                                                EVENTS OF DEFAULT AND REMEDIES

Section 7.1.      EVENTS OF DEFAULT....................................................................................       19
Section 7.2.      REMEDIES ON DEFAULT..................................................................................       20
Section 7.3.      NO REMEDY EXCLUSIVE..................................................................................       20
Section 7.4.      AGREEMENT TO PAY ATTORNEYS' FEES AND EXPENSES........................................................       21
Section 7.5.      NO WAIVER............................................................................................       21
</TABLE>

                                    - ii -

<PAGE>



                                TABLE OF CONTENTS
                                   (Continued)

<TABLE>
<CAPTION>
                                                                                                                             PAGE
                                                         ARTICLE VIII
                                                         MISCELLANEOUS

<S>             <C>                                                                                                       <C>
Section 8.1.      TERM OF AGREEMENT....................................................................................       22
Section 8.2.      NOTICES..............................................................................................       22
Section 8.3.      EXTENT OF COVENANTS OF THE ISSUER; NO PERSONAL LIABILITY.............................................       22
Section 8.4.      BINDING EFFECT.......................................................................................       22
Section 8.5.      AMENDMENTS AND SUPPLEMENTS...........................................................................       22
Section 8.6.      EXECUTION COUNTERPARTS...............................................................................       22
Section 8.7.      SEVERABILILY.........................................................................................       22
Section 8.8.      GOVERNING LAW........................................................................................       23

EXHIBIT A - PROJECT FACILITIES                                                                                              A-1
EXHIBIT B - PROJECT SITE                                                                                                    B-1
EXHIBIT C - PROJECT NOTE                                                                                                    C-1
EXHIBIT D - FORM OF DISBURSEMENT REQUEST                                                                                    D-1
</TABLE>



                                      -iii-
<PAGE>



                                 LOAN AGREEMENT

         THIS LOAN AGREEMENT is made and entered into as of May 1, 1998 between
the HILLSBOROUGH COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY, a public body
corporate and politic and a public instrumentality of the State of Florida (the
"Issuer"), and SIFCO INDUSTRIES, INC., a corporation duly organized and existing
under the laws of the State of Ohio and authorized to do business in the State
(the "Borrower"), under the circumstances summarized in the following recitals
(the capitalized terms not defined above or in the recitals being used therein
as defined in or pursuant to Article I hereof):

         A. Pursuant to the Act, the Issuer has determined to issue and sell the
Project Bonds and to loan the proceeds derived from the sale thereof to the
Borrower to be used to assist in the (i) financing of a project (the "Project")
involving the construction of an addition to an industrial facility and the
acquisition of machinery and equipment to be used in the repairing, overhauling
and otherwise servicing jet aircraft turbine engines including turbine blades
and other components, located within the boundaries of the County and (ii) the
refunding of a portion of bonds previously issued by the Issuer to finance an
earlier project. The Issuer and the Borrower intend that the Project Bonds will
constitute an exempt small issue for the purposes of Section 144(a)(4)(A) of the
Internal Revenue Code of 1986 (including any amendments and successor provisions
thereto and the rules and regulations thereunder, the "Code") so that interest
on such bonds will not be included in the gross income of the recipients thereof
for federal income tax purposes.

         B. The Borrower and the Issuer each have full right and lawful
authority to enter into this Agreement and to perform and observe the provisions
hereof on their respective parts to be performed and observed.

         C. The Issuer hereby determines that the Project will foster economic
development, improve the living conditions and otherwise contribute to the
welfare of the State and its people and is permitted by and will accomplish the
purposes of the Act.

         D. The Project Site is owned and the Project will be owned and operated
by SIFCO Turbine Component Services ("STCS"), an Ohio partnership whose general
partners are wholly owned subsidiaries of the Borrower.

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto covenant, agree and bind
themselves as follows (provided that any obligation of the Issuer created by or
arising out of this Agreement shall not be a general debt on its part nor give
rise to any pecuniary liability of the Issuer but shall be payable solely out of
the Revenues):




                                      -1-
<PAGE>



                                    ARTICLE I
                                   DEFINITIONS

         Section 1.1. USE OF DEFINED TERMS. Words and terms defined in the
Indenture shall have the same meanings when used herein, unless the context or
use clearly indicates another meaning or intent. In addition, the words and
terms set forth in Section 1.2 hereof shall have the meanings set forth therein
unless the context or use clearly indicates another meaning or intent.

         Section 1.2. DEFINITIONS. As used herein:

         "Additional Payments" means the amounts required to be paid by the
Borrower pursuant to the provisions of Section 4.2 hereof.

         "Agreement" means this Loan Agreement, as amended or supplemented from
time to time.

          "Borrower" means SIFCO Industries, Inc., and, as to representations,
warranties and covenants relating to the Project, STCS.

          "Borrower Documents" means this Agreement, the Project Note, the Bond
Purchase Agreement, the Security Agreement, the Remarketing Agreement, the
Reimbursement Agreement and the Bond Pledge Agreement, each as amended or
supplemented from time to time.

         "Completion Date" means the date of the substantial completion of the
construction, acquisition and installation of the 1998 Project evidenced in
accordance with the requirements of Section 3.6 hereof.

         "Construction Period" means the period between the beginning of the
construction, acquisition and installation of the 1998 Project or the date on
which the Bonds are initially issued, whichever is earlier, and the Completion
Date.

         "County" means Hillsborough County, Florida.

          "Engineer" means an individual or firm acceptable to the Trustee and
qualified to practice the profession of engineering or architecture under the
laws of the State.

         "Event of Default" means any of the events described as an Event of
Default in Section 7.1 hereof.

         "Force Majeure" means any of the causes, circumstances or events
described as constituting Force Majeure in Section 7.1 hereof.

          "Indenture" means the Trust Indenture, dated as of even date herewith,
between the Issuer and the Trustee, as amended or supplemented from time to
time.

          "Issuer Documents" means this Agreement, the Indenture and the Bond
Purchase Agreement, each as amended or supplemented from time to time.

          "Loan" means the loan by the Issuer to the Borrower of the proceeds
received from the sale of the Bonds.

                                      -2-

<PAGE>

          "Loan Payment Date" means any date on which any of the Loan Payments
are due and payable, whether at maturity, upon acceleration, call for redemption
or prepayment, or otherwise.

          "Loan Payments" means the amounts required to be paid by the Borrower
in repayment of the Loan pursuant to the provisions of the Notes and of Section
4.1 hereof.

          "1992 Bonds" means the Issuer's Industrial Development Revenue
Refunding and Improvement Bonds (SIFCO Turbine Components Services Project),
Series 1992, dated as of May 1, 1992.

          "1992 Project" means the real and personal property described as such
in EXHIBIT A hereto.

          "1998 Project" means the real and personal property described as such
in EXHIBIT A hereto (and more particularly described in the Plans and
Specifications), together with any additions, modifications and substitutions
thereto permitted by the terms of this Agreement.

         "Notes" means the Project Note and any Additional Notes.

         "Notice Address" means:
<TABLE>
<S>                 <C>                                     <C>
          ----------- -------------------------------------- ----------------------------------------------------------------------
          (a)         As to the Issuer:                      Hillsborough County Industrial
                                                             Development Authority
                                                             c/o Thomas K. Morrison, Esq.
                                                             Morrison, Morrison & Mills, P.A.
                                                             600 North Florida Avenue
                                                             Suite 1700
                                                             Tampa, Florida 33602
                                                             (813) 224-0739
                                                             (813) 223-4199 (Fax)

          ----------- -------------------------------------- ----------------------------------------------------------------------
          (b)         As to the Borrower:                    SIFCO Industries, Inc.
                                                             970 East 64th Street
                                                             Cleveland, Ohio 44103
                                                             Attention: Vice President - Finance
                                                             (216) 432-6278
                                                             (216) 432-6281 (Fax)

          ----------- -------------------------------------- ----------------------------------------------------------------------
          (c)         As to the Trustee:                     National City Bank
                                                             629 Euclid Avenue
                                                             Suite 635
                                                             Cleveland, OH 44114-3484
                                                             Attention: Corporate Trust Department,
                                                                               Locator 01-3116
                                                             (216) 575-2552
                                                             (216) 575-9326 (Fax)

          ----------- -------------------------------------- -----------------------------------------------------------------------
</TABLE>

                                      -3-
<PAGE>

<TABLE>
<S>                 <C>                                     <C>
          ----------- -------------------------------------- -----------------------------------------------------------------------
          (d)         As to the Letter of Credit Bank:       National City Bank
                                                             1900 East Ninth Street, 10th Floor
                                                             Cleveland, Ohio 44114
                                                             Attention: Multinational Division,
                                                             Letter of Credit Section

                                                             with a copy sent simultaneously to
                                                             Attention: Metro/Ohio Division
                                                             (216) 575-3279
                                                             (216) 575-9396 (Fax)

          ----------- -------------------------------------- -----------------------------------------------------------------------
          (e)         As to the Remarketing Agent:           NatCity Investments, Inc.
                                                             1965 East Sixth Street
                                                             Eighth Floor
                                                             Cleveland, Ohio 44114
                                                             Attention: Dwight A. Clark,
                                                                Senior Vice President

          ----------- -------------------------------------- -----------------------------------------------------------------------
</TABLE>

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

          "Plans and Specifications" means the Borrower's plans and
specifications for the construction, acquisition and installation of the 1998
Project, as on file with the Bank as amended from time to time.

          "Project" means collectively the 1992 Project and the 1998 Project at
the Project Site, individually and collectively constituting a "project", as
defined in the Act.

          "Project Bonds" means the $4,100,000 Hillsborough County Industrial
Development Authority Industrial Development Variable Rate Demand Revenue Bonds
(SIFCO Industries, Inc. Project) Series 1998, dated as of the date of their
initial delivery.

          "Project Note" means the promissory note of the Borrower, dated as of
even date with the Project Bonds, in the form attached hereto as EXHIBIT C and
in the principal amount of $4,100,000 evidencing the obligation of the Borrower
to make Loan Payments.

          "Project Site" means the real estate and interests in real estate
constituting the site of the Project, as described in EXHIBIT B attached hereto
as a part hereof.

          "Security Agreement" means the Security Agreement dated as of even
date herewith from the Borrower and STCS to the Bank, as amended or supplemented
from time to time.

         "STCS" means SIFCO Turbine Component Services, an Ohio general
partnership.

          "Tax Certificate" means the Tax Compliance Certificate of the Borrower
delivered in connection with the initial issuance and delivery of the Project
Bonds.

                                      -4-
<PAGE>

          "Trustee" means the Trustee at the time acting as such under the
Indenture, originally National City Bank, Cleveland, Ohio, as Trustee, and any
successor Trustee as determined or designated under or pursuant to the
Indenture.

          "Unassigned Issuer's Rights" means all of the rights of the Issuer to
receive Additional Payments under Section 4.2 hereof, to be held harmless and
indemnified under Section 5.3 hereof, to be reimbursed for attorney's fees and
expenses under Section 7.4 hereof, and to give or withhold consent to
amendments, changes, modifications, alterations and termination of this
Agreement under Section 8.5 hereof.

         "Underwriter" means NatCity Investments, Inc., Cleveland, Ohio.

          Section 1.3. INTERPRETATION. Any reference herein to the Issuer, to
the Issuing Authority or to any member or officer of either includes entities or
officials succeeding to their respective functions, duties or responsibilities
pursuant to or by operation of law or lawfully performing their respective
functions.

          Any reference to a section or provision of the Constitution of the
State or the Act, or to a section, provision or chapter of the Florida Statutes
or to any statute of the United States of America, includes that section,
provision, chapter or statute as amended, modified, revised, supplemented or
superseded from time to time; provided, that no amendment, modification,
revision, supplement or superseding section, provision, chapter or statute shall
be applicable solely by reason of this provision if it constitutes in any way an
impairment of the rights or obligations of the Issuer, the Holders, the Trustee,
the Bank or the Borrower under this Agreement.

          Unless the context indicates otherwise, words importing the singular
number include the plural number, and vice versa; the terms "hereof", "hereby",
"herein", "hereto", "hereunder" and similar terms refer to this Agreement; and
the term "hereafter" means after, and the term "heretofore" means before, the
date of delivery of the Project Bonds. Words of any gender include the
correlative words of the other genders, unless the sense indicates otherwise.

          Section 1.4. CAPTIONS AND HEADINGS. The captions and headings in this
Agreement are solely for convenience of reference and in no way define, limit or
describe the scope or intent of any Articles, Sections, subsections, paragraphs,
subparagraphs or clauses hereof.

                               (End of Article I)

                                      -5-
<PAGE>



                                   ARTICLE II
                    REPRESENTATIONS, WARRANTIES AND COVENANTS

         Section 2.1. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE ISSUER.
The Issuer represents and warrants that:

                  (a) It is duly organized and validly existing under the laws
of the State.

                  (b) It has full legal right, power and authority pursuant to
the Act to refund the 1992 Bonds and to finance the 1998 Project through the
issuance of the Project Bonds; has made the necessary findings that the issuance
of the Project Bonds will preserve jobs and employment opportunities and assist
in the development of industrial activities to the benefit of the people of the
County, has given any necessary notices and has taken all other steps and
followed all procedures required by the Constitution and laws of the State
(including the Act) in connection therewith; and has full legal right, power and
authority to (i) enter into the Issuer Documents, (ii) issue, sell and deliver
the Project Bonds and (iii) carry out and consummate all other transactions
contemplated by the Issuer Documents.

                  (c) It has duly authorized (i) the execution, delivery and
performance of the Project Bonds and the Issuer Documents and (ii) the taking of
any and all such actions as may be required on the part of the Issuer to carry
out, give effect to and consummate the transactions contemplated by such
instruments.

                  (d) The Issuer Documents constitute legal, valid and binding
special obligations of the Issuer, enforceable in accordance with their
respective terms and, when authenticated by the Trustee in accordance with the
provisions of the Indenture, the Project Bonds will constitute legal, valid and
binding special obligations of the Issuer in conformity with the provisions of
the Act and the Constitution of the State.

                  (e) To the knowledge of the Issuer there is no action, suit,
proceeding, inquiry, or investigation at law or in equity or before or by any
court, public board or body, pending or threatened against the Issuer which in
any manner questions the validity of the Act, the powers of the Issuer referred
to in paragraph (b) above or the validity of any proceedings taken by the Issuer
in connection with the issuance of the Project Bonds or wherein any unfavorable
decision, ruling or finding could materially adversely affect the transactions
contemplated by this Agreement or which, in any way, would adversely affect the
validity or enforceability of the Project Bonds or the Issuer Documents, (or of
any other instrument required or contemplated for use in consummating the
transactions contemplated thereby and hereby).

                  (f) The execution and delivery by the Issuer of the Project
Bonds and the Issuer Documents, in compliance with the provisions of each of
such instruments will not conflict with or constitute a breach of, or default
under, any material commitment, agreement or other instrument to which the
Issuer is a party or by which it is bound, or under any provision of the Act,
the Constitution of the State or any existing law, rule, regulation, ordinance,
judgment, order or decree to which the Issuer is subject.

                  (g) The Issuer will do or cause to be done all things
necessary, so far as lawful, to preserve and keep in full force and effect its
existence or to assure the assumption of its obligations under the Issuer
Documents and the Bonds by any successor public body.

         Section 2.2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BORROWER.
Borrower represents, warrants and covenants that:

                                      -6-
<PAGE>

                  (a) The Borrower is a corporation duly organized and validly
existing under the laws of the State of Ohio and authorized to do business in
the State. The Borrower has full power and authority to execute, deliver and
perform the Borrower Documents and to enter into and carry out the transactions
contemplated by those documents. That execution, delivery and performance do
not, and will not, violate any provision of law applicable to the Borrower or
its articles of incorporation or code of regulations and do not, and will not,
conflict with or result in a default under any agreement or instrument to which
the Borrower is a party or by which the Borrower is bound.

                  (b) Borrower Documents, by proper corporate action, have been
duly authorized, executed and delivered by the Borrower and are valid and
binding obligations of the Borrower.

                  (c) The Project at all times will be located entirely within
the boundaries of the County and will create and preserve jobs and employment
opportunities within the boundaries of the State and the County. If all or
substantially all of the Project equipment is ever voluntarily removed from
within the boundaries of the County, the Borrower will promptly prepay the Loan
and cause the Project Bonds to be redeemed.

                  (d) The construction, acquisition and installation of the
property comprising the 1998 Project by the Borrower will comply in all material
respects with all applicable zoning, planning, building, environmental and other
regulations of the governmental authorities having jurisdiction over the 1998
Project, and all necessary permits, licenses, consents and permissions necessary
for the 1998 Project have been or will be obtained.

                  (e) The undertaking of the refunding of the 1992 Bonds and the
financing of costs of the 1998 Project by the Issuer and the loan of the
proceeds of the Project Bonds has constituted an inducement to the Borrower to
construct, acquire and install the 1998 Project in the County.

                  (f) The Borrower is not in default in the payment of principal
of, or interest on, any of the Borrower's indebtedness for borrowed money, or in
default under any instrument under which, or subject to which, any indebtedness
has been incurred, and no event has occurred and is continuing under the
provisions of any material agreement involving the Borrower that, with the lapse
of time or the giving of notice, or both, would constitute an event of default
thereunder.

                  (g) No litigation at law or in equity nor any proceeding
before any governmental agency or other tribunal involving the Borrower is
pending or, to the knowledge of the Borrower, threatened, in which any liability
of the Borrower is not adequately covered by insurance and in which any judgment
or order would have a material and adverse effect upon the business or assets of
the Borrower or would materially and adversely affect the Project, the validity
of the Borrower Documents or the performance of the Borrower's obligations
thereunder or the transactions contemplated hereby.

                   (h) The Borrower shall not use or operate the Project in any
way which would affect the qualification of the Project under the Act or impair
the exclusion from gross income for federal income tax purposes of the interest
on the Project Bonds.

                   (i) The representations contained in the Tax Certificate
(which is incorporated herein by this reference thereto) are true and correct
and the Borrower will observe the covenants contained therein as fully as if set
forth herein.
                               (End of Article II)

                                      -7-
<PAGE>



                                   ARTICLE III
                         COMPLETION OF THE 1998 PROJECT;
                          ISSUANCE OF THE PROJECT BONDS

          Section 3.1. CONSTRUCTION, ACQUISITION AND INSTALLATION OF THE 1998
PROJECT. The Borrower shall construct, acquire and install the 1998 Project with
all reasonable dispatch, all on the Project Site and substantially in accordance
with the Plans and Specifications. The Borrower shall (a) pay when due all fees,
costs and expenses incurred in connection with the foregoing from funds made
available therefor in accordance with this Agreement or otherwise, unless any
such fees, costs or expenses are being contested by the Borrower in good faith
and by appropriate proceedings, (b) ask, demand, sue for, levy, recover and
receive all those sums of money, debts and other demands whatsoever which may be
due, owing and payable under the terms of any contract, order, receipt, writing
and instruction in connection with the acquisition and installation of the 1998
Project, and (c) enforce the provisions of any contract, agreement, obligation,
bond or other performance security with respect thereto.

          Section 3.2. PLANS AND SPECIFICATIONS. The Borrower, with the prior
written consent of the Bank, may revise the Plans and Specifications from time
to time, provided that no revision shall be made which would change the purposes
of the 1998 Project to other than purposes permitted by the Act. The Borrower
shall promptly deliver to the Bank a copy of the final Plans and Specifications
upon their completion.

          Section 3.3. ISSUANCE OF THE BONDS; APPLICATION OF PROCEEDS. To
provide funds to make the Loan for purposes of refunding the 1992 Bonds and
assisting the Borrower in the financing of the 1998 Project, the Issuer will
issue, sell and deliver the Project Bonds upon the order of the Underwriter as
provided in the Bond Purchase Agreement. The Project Bonds will be issued
pursuant to the Indenture in the aggregate principal amount, will bear interest,
will mature and will be subject to redemption as set forth therein. The Borrower
hereby approves the terms and conditions of the Indenture and the Project Bonds,
and the terms and conditions under which the Project Bonds will be issued, sold
and delivered.

          The proceeds from the sale of the Project Bonds shall be loaned to the
Borrower and paid over to the Trustee for the benefit of the Borrower and the
Holders of the 1992 Bonds and the Bonds and deposited as provided in Sections
5.01 of the Indenture. Pending disbursement pursuant to Section 3.4 hereof, the
proceeds deposited in the Project Fund, together with any investment earnings
thereon, shall constitute a part of the Revenues assigned by the Issuer to the
payment of Bond Service Charges as provided in the Indenture.

          At the request of the Borrower, and for the purposes and upon
fulfillment of the conditions specified in the Indenture, the Issuer may provide
for the issuance, sale and delivery of Additional Bonds and loan the proceeds
from the sale thereof to the Borrower.

          Section 3.4. DISBURSEMENTS FROM THE PROJECT FUND. Subject to the
provisions below, disbursements from the Project Fund shall be made only to pay
(or to reimburse the Borrower for payment of) the following 1998 Project costs:

                  (a) Costs incurred directly or indirectly for or in connection
with the construction, acquisition or installation of the 1998 Project,
including costs incurred with respect to the 1998 Project for preliminary
planning and studies; architectural, legal, engineering, accounting, consulting,
supervisory and other services; labor, services and materials; and recording of
documents and title work;


                                     -8-
<PAGE>

                  (b) Costs incurred directly or indirectly in seeking to
enforce any remedy against any contractor or subcontractor in respect of any
actual or claimed default under any contract relating to the 1998 Project;

                  (c) Financial, legal, accounting, printing and engraving fees,
charges and expenses, and all other fees, charges and expenses incurred in
connection with the authorization, sale, issuance and delivery of the Project
Bonds, including, without limitation, the fees and expenses of the Issuer, Bond
Counsel, the fees and expenses of the Trustee and the fees and expenses of the
Underwriter; provided, however, any fees and expenses incurred in connection
with the issuance of the Project Bonds and paid with Project Bond proceeds shall
not exceed 2 % of the proceeds of the Project Bonds within the meaning of
Section 147(g) of the Code;

                  (d) Any other costs, expenses, fees and charges properly
chargeable to the cost of the construction, acquisition or installation of the
1998 Project;

                  (e) Interest on the Project Bonds during the Construction
Period to be paid into the Bond Fund; and

                  (f) The fees and expenses of the Bank under the Reimbursement
Agreement applicable to the Construction Period.

         Any disbursements from the Project Fund described above shall be made
by the Trustee only upon the written order of the Authorized Borrower
Representative. Each such written order shall be in substantially the form of
the disbursement request attached hereto as Exhibit D and shall be consecutively
numbered and accompanied by invoices or other appropriate documentation
supporting the payments or reimbursements requested. Any disbursement for any
item not described in, or the cost for which item is other than as described in,
the IRS Form 8038 information statement filed by the Issuer in connection with
the issuance of the Project Bonds, shall be accompanied by evidence satisfactory
to the Trustee that the average reasonably expected economic life of the
facilities being financed by the Project Bonds is not less than 5/6ths of the
average maturity of the Project Bonds or, if such evidence is not presented with
the disbursement or at the request of the Trustee or the Bank, by an opinion of
Bond Counsel to the effect that such disbursement will not result in the
interest on the Project Bonds becoming subject to federal income taxation. In
case any contract provides for the retention by the Borrower of a portion of the
contract price, there shall be paid from the Project Fund only the net amount
remaining after deduction of any such portion and, only when that retained
amount is due and payable, may it be paid from the Project Fund.

         Any moneys in the Project Fund remaining after the Completion Date and
payment, or provision for payment, of the costs of financing the 1998 Project
described above, at the direction of the Authorized Borrower Representative with
prior written consent of the Bank, promptly shall be:

                  (i) used to acquire, construct, equip and install such
additional real or personal property in connection with the Project as is
designated by the Authorized Borrower Representative and approved by the Bank,
and the acquisition, construction, equipping and installation of which will be
permitted under the Act, provided that any such use shall be accompanied by
evidence satisfactory to the Trustee that the average reasonably expected
economic life of such additional property, together with the other property
theretofore acquired with the proceeds of the Project Bonds, will not be less
than 5/6ths of the average maturity of the Project Bonds;

                                      -9-

<PAGE>


                  (ii) used to reimburse the Bank for draws on the Letter of
Credit to redeem Project Bonds in accordance with the terms of the Indenture;

                  (iii) used for the purchase of Project Bonds in the open
market for the purpose of cancellation; or

                  (iv) used to accomplish a combination of the foregoing as is
provided in that direction;

provided that in all such cases, such use will not in the opinion of Bond
Counsel or under ruling of the Internal Revenue Service result in the interest
on the Project Bonds becoming includable in gross income for federal income tax
purposes;

         In the event that all of the Bonds are either redeemed or accelerated
pursuant to the terms of the Indenture, any remaining funds in the Project Fund
shall be transferred to the Bond Fund.

         Section 3.5. BORROWER REQUIRED TO PAY COSTS IN EVENT PROJECT FUND
INSUFFICIENT. If moneys in the Project Fund are not sufficient to pay all costs
of the 1998 Project, the Borrower, nonetheless, will complete the 1998 Project
in accordance with the Plans and Specifications, unless the Bank consents
otherwise, and, unless Additional Bonds shall have been issued for that purpose,
shall pay all such additional costs of the 1998 Project from the Borrower's own
funds. The Borrower shall not be entitled to any reimbursement for any such
additional costs of the 1998 Project from the Issuer, the Trustee or any Holder;
nor shall it be entitled to any abatement, diminution or postponement of its
obligation to make the Loan Payments,

         Section 3.6.  COMPLETION  DATE. The Borrower shall notify the Issuer,
the Bank and the Trustee of the Completion Date by a certificate signed by the
Authorized Borrower Representative stating:

                   (a) the date on which the 1998 Project was substantially
completed, which date shall be not later than three years after initial delivery
of the Project Bonds or such later date as has been approved in writing by the
Bank and as will not, in the opinion of Bond Counsel, cause interest on the
Project Bonds to become includable in gross income for federal income tax
purposes;

                   (b) that the acquisition and installation of the property
comprising the 1998 Project has been accomplished in such a manner as to conform
with all applicable planning, building, environmental and other similar
governmental regulations;

                  (c) that except as provided in subsection (d) of this Section,
all costs of that acquisition and installation then or theretofore due and
payable have been paid; and

                   (d) the amounts which the Trustee shall retain in the Project
Fund for the payment of costs of the 1998 Project not yet due or for liabilities
which the Borrower is contesting or which otherwise should be retained and the
reasons such amounts should be retained.

          That certificate shall state that it is given without prejudice to any
rights against third parties which then exist or subsequently may come into
being. The Authorized Borrower Representative shall include with that
certificate a statement specifically describing all items of personal property
comprising a part of the 1998 Project. The certificate shall be delivered as
promptly as practicable after the occurrence of the events and conditions
referred to in subsections (a) through (c) of this Section.

                                      -10-

<PAGE>


          Section 3.7. INVESTMENT OF FUND MONEYS. At the written or oral request
(promptly confirmed in writing) of the Authorized Borrower Representative, any
moneys held as part of the Bond Fund (except moneys held in the Defeasance
Account, Letter of Credit Account or Redemption Premium Account,) the Project
Fund or the Rebate Fund shall be invested or reinvested by the Trustee in
Eligible Investments. The Issuer and the Borrower each hereby covenants that it
will restrict that investment and reinvestment and the use of the proceeds of
the Project Bonds in such manner and to such extent, if any, as may be
necessary, after taking into account reasonable expectations at the time of
delivery of and payment for the Project Bonds, so that the Project Bonds will
not constitute arbitrage bonds under Section 148 of the Code.

          The Borrower shall provide the Issuer with, and the Issuer may base
its certifications as authorized by the Bond Legislation on, the Tax Certificate
of the Borrower for inclusion in the transcript of proceedings for the Project
Bonds, setting forth the reasonable expectations of the Borrower on the date of
delivery of and payment for the Project Bonds regarding the amount and use of
the proceeds of the Project Bonds and the facts, estimates and circumstances on
which those expectations are based.

          Section 3.8.  REBATE FUND. The Borrower agrees to make such payments
to the Trustee as are required of it under Section 5. 11 of the Indenture. The
obligation of the Borrower to make such payments shall remain in effect and be
binding upon the Borrower notwithstanding the release and discharge of the
Indenture.

          The Borrower and the Issuer each covenants to the owners of the
Project Bonds that, notwithstanding any other provision of this Agreement or any
other instrument, it shall take no action, nor shall the Borrower direct the
Trustee to take or approve the Trustee's taking any action or direct the Trustee
to make or approve the Trustee's making any investment or use of proceeds of the
Project Bonds or any other moneys which may arise out of or in connection with
this Agreement, the Indenture or the Project, which would cause the Project
Bonds to be treated as "arbitrage bonds" within the meaning of Section 148 of
the Code. In addition, the Borrower covenants and agrees to comply with the
requirements of Section 148(f) of the Code as it may be applicable to the
Project Bonds or the proceeds derived from the sale of the Project Bonds or any
other moneys which may arise out of, or in connection with, this Agreement, the
Indenture or the Project throughout the term of the Project Bonds. No provision
of this Agreement shall be construed to impose upon the Trustee any obligation
or responsibility for compliance with arbitrage regulations, except as provided
in the Indenture.

                              (End of Article III)

                                      -11-
<PAGE>



                                   ARTICLE IV
                     LOAN BY ISSUER; REPAYMENT OF THE LOAN;
                      LOAN PAYMENTS AND ADDITIONAL PAYMENTS

         Section 4.1. LOAN REPAYMENT, DELIVERY OF NOTES AND LETTER OF CREDIT.
Upon the terms and conditions of this Agreement, the Issuer will make the Loan
to the Borrower. In consideration of and in repayment of the Loan, the Borrower
shall make, as Loan Payments, payments sufficient in time and amount to pay when
due all Bond Service Charges, all as more particularly provided in the Project
Note and any Additional Note. The Project Note shall be executed and delivered
by the Borrower concurrently with the execution and delivery of this Agreement.
All Loan Payments shall be paid to the Trustee in accordance with the terms of
the Notes for the account of the Issuer and shall be held and applied in
accordance with the provisions of the Indenture and this Agreement.

         In connection with the issuance of any series of Additional Bonds, the
Borrower shall execute and deliver to the Trustee an Additional Note in a form
substantially similar to the form of the Project Note. All such Additional Notes
shall:

                  (a) provide for payments of interest equal to the payments of
interest on the corresponding Additional Bonds;

                  (b) require payments of principal and prepayments and any
premium equal to the payments of principal, redemption payments and sinking fund
payments and any premium on the corresponding Additional Bonds;

                  (c) require all payments on any such Additional Notes to be
made no later than the due dates for the corresponding payments to be made on
the corresponding Additional Bonds; and

                  (d) contain by reference or otherwise optional and mandatory
prepayment provisions and provisions in respect of the optional and mandatory
acceleration or prepayment of principal and any premium corresponding with the
redemption and acceleration provisions of the corresponding Additional Bonds.

         All Notes shall secure equally and ratably all outstanding Bonds,
except that, so long as no Event of Default described in paragraph (a), (b),
(e), (g) or (h) of Section 7.01 of the Indenture has occurred and is continuing,
payments by the Borrower on the Project Note shall be used by the Trustee to
reimburse the Bank for drawings on the Letter of Credit used to pay Bond Service
Charges on the Project Bonds.

         Upon payment in full, in accordance with the Indenture, of the Bond
Service Charges on any series of Bonds, whether at maturity or by redemption or
otherwise, or upon provision for the payment thereof having been made in
accordance with the provisions of the Indenture, the Note issued concurrently
with those corresponding Bonds shall be deemed fully paid, the obligations of
the Borrower thereunder shall be terminated, and any such Note shall be
surrendered by the Trustee to the Borrower, and shall be canceled by the
Borrower.

         Except for such interest of the Borrower and the Bank as may hereafter
arise pursuant to Section 5.07 or 5.08 of the Indenture, the Borrower and the
Issuer each acknowledge that neither the Borrower nor the Issuer has any
interest in the Bond Fund and any moneys deposited therein shall be in the
custody of and held by the Trustee in trust for the benefit of the Holders and,
to the extent of amounts due under the Reimbursement Agreement, the Bank.

                                      -12-
<PAGE>

         Section 4.2. ADDITIONAL PAYMENTS. The Borrower shall pay to the Issuer,
as Additional Payments hereunder, within five (5) days after request therefore
made in writing and specifying such costs and expenses with reasonable
particularity any and all costs and expenses actually incurred or to be paid by
the Issuer in connection with the issuance and delivery of the Project Bonds and
Additional Bonds or otherwise related to actions taken by the Issuer under this
Agreement or the Indenture.

         The Borrower shall pay to the Trustee, the Registrar and any Paying
Agent or Authenticating Agent, their reasonable fees, charges and expenses for
acting as such under the Indenture.

         Any payments under this Section not paid when due shall bear interest
at the Interest Rate for Advances.

         Section 4.3. PLACE OF PAYMENTS. The Borrower shall make all Loan
Payments directly to the Trustee at its principal corporate trust office.
Additional Payments shall be made directly to the person or entity to whom or to
which they are due.

         Section 4.4. OBLIGATIONS UNCONDITIONAL. The obligations of the Borrower
to make Loan Payments, Additional Payments and any payments required of the
Borrower under Section 4.3 hereof shall be absolute and unconditional, and the
Borrower shall make such payments without abatement, diminution or deduction
regardless of any cause or circumstances whatsoever including, without
limitation, any defense, set-off, recoupment or counterclaim which the Borrower
may have or assert against the Issuer, the Trustee, any Paying Agent or
Authenticating Agent, the Bank or any other Person; provided that the Borrower
may contest or dispute the amount of any such obligation (other than Loan
Payments) so long as such contest or dispute does not result in an Event of
Default under the Indenture.

         Section 4.5. ASSIGNMENT OF AGREEMENT AND REVENUES. To secure the
payment of Bond Service Charges, the Issuer shall assign to the Trustee, by the
Indenture, all its right, title and interest in and to the Revenues, the
Agreement (except for Unassigned Issuer's Rights) and the Project Note. The
Borrower hereby agrees and consents to that assignment.

         Section 4.6. LETTER OF CREDIT. Simultaneously with the initial delivery
of the Project Bonds pursuant to the Indenture and the Bond Purchase Agreement,
the Borrower shall cause the Bank to issue and deliver to the Trustee the Letter
of Credit. The Letter of Credit may be replaced by an Alternate Letter of Credit
complying with the provisions of Section 5.09 of the Indenture.

                               (End of Article IV)

                                      -13-
<PAGE>



                                    ARTICLE V
                       ADDITIONAL AGREEMENTS AND COVENANTS

          Section 5.1. RIGHT OF INSPECTION. Subject to reasonable security and
safety regulations and upon reasonable notice, the Issuer, the Bank and the
Trustee, and their respective agents, shall have the right during normal
business hours to inspect the Project.

          Section 5.2. SALE, LEASE OR GRANT OF USE BY BORROWER. Subject to the
provisions of the Reimbursement Agreement and any other agreement to which the
Borrower is a party or by which it is bound, the Borrower may sell, lease or
grant the right to occupy and use the Project, in whole or in part, to others,
provided that:

                  (a) No such sale, lease or grant shall relieve the Borrower
from the Borrower's obligations under this Agreement or the Notes;

                   (b) In connection with any such sale, lease or grant the
Borrower shall retain such rights and interests as will permit the Borrower to
comply with the Borrower's obligations under this Agreement and the Notes;

                   (c) No such sale, lease or grant shall impair materially the
purposes of the Act to be accomplished by operation of the Project as herein
provided or adversely affect the exclusion from gross income for federal income
tax purposes of the interest on the Bonds.

          Section 5.3. INDEMNIFICATION. The Borrower releases the Issuer from,
agrees that the Issuer shall not be liable for, and shall indemnify the Issuer
against, all liabilities, claims, costs and expenses, including attorneys fees
and expenses, imposed upon, incurred or asserted against the Issuer on account
of: (a) any loss or damage to property or injury to or death of or loss by any
person that may be occasioned by any cause whatsoever pertaining to the
acquisition, construction, installation, equipping, maintenance, operation or
use of the Project; (b) any breach or default on the part of the Borrower in the
performance of any covenant or agreement of the Borrower under the Borrower
Documents or any related document, or arising from any act or failure to act by
the Borrower, or any of the Borrower's agents, contractors, servants, employees
or licensees; (c) the authorization, issuance, sale, trading, redemption or
servicing of the Project Bonds, and the provision of any information or
certification furnished in connection therewith concerning the Project Bonds,
the Project, or the Borrower, including, without limitation, the Preliminary
Official Statement and the Official Statement (each as defined in the Bond
Purchase Agreement), any information furnished by the Borrower for, and included
in, or used as a basis for preparation of, any certifications, information
statements or reports furnished by the Issuer, and any other information or
certification obtained from the Borrower to assure the exclusion of the interest
on the Project Bonds from gross income of the Holders thereof for federal income
tax purposes; (d) the Borrower's failure to comply with any requirement of this
Agreement or the Code pertaining to such exclusion of that interest, including
the covenants in Section 5.4 hereof; and (e) any claim, action or proceeding
brought with respect to the matters set forth in (a), (b), (c), or (d) above.

         The Borrower agrees to indemnify the Trustee and the Tender Agent for,
and to hold them harmless against, all liabilities, claims, costs and expenses
(including reasonable attorneys' fees and expenses) incurred without negligence
or willful misconduct on the part of the Trustee and the Tender Agent on account
of any action taken or omitted to be taken by the Trustee and the Tender Agent
in accordance with the terms of this Agreement, the Bonds, the Reimbursement
Agreement, the Letter of Credit, the Notes or the Indenture, or any action taken
at the request of or with the consent of the Borrower, including the costs and
expenses of the

                                      -14-
<PAGE>

Trustee and the Tender Agent in defending themselves against any such claim,
action or proceeding brought in connection with the exercise or performance of
any of their powers or duties under this Agreement, the Bonds, the Indenture,
the Reimbursement Agreement, the Letter of Credit or the Notes.

         In case any action or proceeding is brought against the Issuer or the
Trustee or Tender Agent in respect of which indemnity may be sought hereunder,
the party seeking indemnity promptly shall give notice of that action of
proceeding to the Borrower, and the Borrower upon receipt of that notice shall
have the obligation and the right to assume the defense of the action or
proceeding; provided, that failure of a party to give that notice shall not
relieve the Borrower from any of the Borrower's obligations under this Section
unless that failure materially prejudices the defense of the action or
proceeding by the Borrower. An indemnified party at its own expense may employ
separate counsel and participate in the defense. The Borrower shall not be
liable for any settlement made without the Borrower's consent.

         The indemnification set forth above is intended to and shall include
the indemnification of all affected officials, directors, officers and employees
of the Issuer, the Trustee and the Tender Agent, respectively. That
indemnification is intended to and shall be enforceable by the Issuer, the
Trustee and the Tender Agent, respectively, to the full extent permitted by law.

         Section 5.4. BORROWER NOT TO ADVERSELY AFFECT EXCLUSION FROM GROSS
INCOME OF INTEREST ON PROJECT BONDS. The Borrower hereby represents that the
Borrower has taken and caused to be taken, and covenants that the Borrower will
take and cause to be taken, all actions that may be required of the Borrower,
alone or in conjunction with the Issuer, for the interest on the Project Bonds
to be and remain excluded from gross income for federal income tax purposes, and
represents that the Borrower has not taken or permitted to be taken on the
Borrower's behalf, and covenants that the Borrower will not take or permit to be
taken on the Borrower's behalf, any actions that would adversely affect such
exclusion under the provisions of the Code.

         If the Borrower becomes aware of any actions or facts which have caused
or will cause the interest on the Project Bonds to be includable in gross income
for federal income tax purposes, the Borrower promptly shall (a) notify the
Trustee and the Remarketing Agent of such actions or facts and (b) take such
steps as are necessary to cause redemption of the Project Bonds in whole at the
earliest practicable date.

         Without limiting the generality of the foregoing, the Borrower shall
monitor the capital expenditures incurred by it and by any other "principal
user" of the Project, with respect to the Project or elsewhere within the county
or municipal corporation in which the Project is located. Within 30 days after
each of the first, second and third anniversary dates of the issuance of the
Project Bonds, the Borrower shall file with the Trustee and the Remarketing
Agent a report showing cumulative capital expenditures which must be counted for
purposes of the $10 million capital expenditure limitation contained in Section
144(a) of the Code. Such report shall be certified as true and accurate by the
Authorized Borrower Representative.

         Section 5.5. ASSIGNMENT BY ISSUER. Except for the assignment of this
Agreement to the Trustee, the Issuer shall not attempt to further assign,
transfer or convey its interest in the Revenues or this Agreement or create any
pledge or lien of any form or nature with respect to the Revenues or the
payments hereunder.

         Section 5.6. BORROWER'S PERFORMANCE UNDER INDENTURE. The Borrower has
examined the Indenture and approves the form and substance of, and agrees to be
bound by, its terms. The Borrower, for the benefit of the Issuer and each
Bondholder, shall do and perform all acts and things required or contemplated in
the Indenture

                                      -15-
<PAGE>

to be done or performed by the Borrower. The Borrower is a third party
beneficiary of certain provisions of the Indenture, and Section 8.05 of the
Indenture is hereby incorporated herein by reference.

          Section 5.7. COMPLIANCE WITH LAWS. The Borrower shall, throughout the
term of this Agreement, promptly comply or cause compliance in all material
respects with all laws, ordinances, orders, rules, regulations and requirements
of duly constituted public authorities which may be applicable to the Project or
to the repair and alteration thereof, or to the use or manner of use of the
Project or to the Borrower's and any lessee's operations on the Project Site.
Notwithstanding the foregoing, the Borrower shall have the right to contest or
cause to be contested the legality or the applicability of any such law,
ordinance, order, rule, regulation or requirement so long as, in the opinion of
counsel satisfactory to the Trustee and the Bank, such contest shall not in any
way materially adversely affect or impair the obligations of the Borrower
hereunder or any right or interest of the Trustee or the Bank in, to and under
the Indenture or this Agreement.

         Section 5.8. TAXES, PERMITS, UTILITY AND OTHER CHARGES. The Borrower
shall pay and discharge or cause to be paid and discharged, promptly as and when
the same shall become due and payable, all taxes and governmental charges of any
kind whatsoever that may be lawfully assessed against the Issuer, the Trustee,
the Bank or the Borrower with respect to the Project or any portion thereof. The
Borrower may in good faith contest or cause to be contested any such tax or
governmental charge, and in such event may permit such tax or governmental
charge to remain unsatisfied during the period of such contest and may appeal
therefrom unless in the opinion of counsel satisfactory to the Trustee and the
Bank by such action any right or interest of the Trustee or the Bank in, to and
under the Indenture or this Agreement shall be materially endangered or the
Project or any part thereof shall become subject to imminent loss or forfeiture,
in which event such tax or governmental charge shall be paid prior to any such
loss or forfeiture. The Borrower shall procure or cause to be procured any and
all necessary building permits, other permits, licenses and other authorizations
required for the lawful and proper acquisition and installation of the property
comprising the Project and for the lawful and proper use and operation of the
Project.

         Section 5.9. CONTINUED EXISTENCE. Except as otherwise provided in or
permitted pursuant to the Reimbursement Agreement, or unless otherwise provided
by law, the Borrower shall maintain its existence and continue to be a duly
formed and validly existing corporation under the laws of the State of Ohio.

          Section 5.10 REMOVAL OF PORTIONS OF THE PROJECT. The Borrower shall
have the right, from time to time, subject to the terms of the Reimbursement
Agreement, to remove, substitute or modify any portion of the Project, provided
that such removal, substitution or modification shall not impair the character
of the Project as a "project" within the meaning of the Act. Any such
substituted or modified property shall be included under the terms of this
Agreement as part of the Project.

          Section 5. 11. NON-CONTROLLED PERSON COVENANT. The Borrower does not
control the Bank and the Bank does not control the Borrower either directly or
indirectly through one or more intermediaries. As used in this Section,
"control" has the meaning given to that term in Section 2(a)(9) of the
Investment Company Act of 1940. The Borrower shall give written notice to the
Trustee, the Remarketing Agent and all Bondholders 30 days prior to the
consummation of any transaction that would result in the Borrower controlling or
being controlled by the Bank. This notification covenant supersedes any
exemptions from the continuous disclosure requirement pursuant to Rule
15c2-12(b)(5) of the Securities and Exchange Act of 1934.

                               (End of Article V)

                                      -16-
<PAGE>



                                   ARTICLE VI
                           REDEMPTION OF PROJECT BONDS

         Section 6.1. OPTIONAL REDEMPTION. Provided no Event of Default shall
have occurred and be continuing at any time and from time to time, the Borrower
may deliver moneys to the Trustee in addition to Loan Payments or Additional
Payments required to be made and direct the Trustee to use the moneys so
delivered for the purpose of purchasing Project Bonds or of reimbursing the Bank
for drawings on the Letter of Credit used to redeem Project Bonds called for
optional redemption in accordance with the applicable provisions of the
Indenture.

         Section 6.2. EXTRAORDINARY OPTIONAL REDEMPTION. The Borrower shall
have, subject to the conditions hereinafter imposed, the option to direct the
redemption, at a redemption price of 100% of principal amount and accrued
interest, of the entire unpaid principal balance of the Project Bonds in
accordance with the applicable provisions of the Indenture upon the occurrence
of any of the following events:

                  (a) The Project or Project Site shall have been damaged or
destroyed to such an extent that (1) the Project or Project Site cannot
reasonably be expected to be restored, within a period of six months, to the
condition thereof immediately preceding such damage or destruction or (2) normal
use and operation of the Project or the Project Site is reasonably expected to
be prevented for a period of six consecutive months;

                  (b) Title to, or the temporary use of, all or a significant
part of the Project or Project Site shall have been taken under the exercise of
the power of eminent domain (1) to such extent that the Project or Project Site
cannot reasonably be expected to be restored within a period of six months to a
condition of usefulness comparable to that existing prior to the taking or (2)
as a result of the taking, normal use and operation of the Project or Project
Site is reasonably expected to be prevented for a period of six consecutive
months;

                  (c) As a result of any changes in the Constitution of the
State, the constitution of the United States of America, or state or federal
laws, or as a result of legislative or administrative action (whether state or
federal) or by final decree, judgment or order of any court or administrative
body (whether state or federal) entered after the contest thereof by the Issuer,
the Trustee or the Borrower in good faith, this Agreement shall have become void
or unenforceable or impossible of performance in accordance with the intent and
purpose of the parties as expressed in this Agreement, or if unreasonable
burdens or excessive liabilities shall have been imposed with respect to the
Project or Project Site or the operation thereof, including, without limitation,
federal, state or other ad valorem, property, income or other taxes not being
imposed on the date of this Agreement other than ad valorem taxes presently
levied upon privately owned property used for the same general purpose as the
Project or the Project Site; or

                  (d) Changes in the economic availability of raw materials,
operating supplies, energy sources or supplies, or facilities (including, but
not limited to, facilities in connection with the disposal of industrial wastes)
necessary for the operation of the Project or the Project Site shall have
occurred or technological or other changes shall have occurred which the
Borrower cannot reasonably overcome or control and which in the Borrower's
reasonable judgment render the operation of the Project or the Project Site
uneconomic.

         The Borrower also shall have the option, in the event that title to or
the temporary use of a portion of the Project or the Project Site shall be taken
under the exercise of the power of eminent domain, even if the taking is not of
such nature as to permit the exercise of the redemption option upon an event
specified in clause (b)

                                      -17-
<PAGE>

above, to direct the redemption, at a redemption price of 100% of the principal
amount thereof prepaid, plus accrued interest to the redemption date, of that
part of the outstanding principal balance of the Project Bonds as may be payable
from the proceeds received by the Borrower (after the payment of costs and
expenses incurred in the collection thereof) in the eminent domain proceeding,
provided that the Borrower shall furnish to the Issuer and the Trustee a
certificate of an Engineer stating that (1) the property comprising the part of
the Project or the Project Site taken is not essential to continued operations
of the Project in the manner existing prior to that taking, (2) the Project has
been restored to a condition substantially equivalent to that existing prior to
the taking, or (3) other improvements have been acquired or made which are
suitable for the continued operation of the Project.

         To exercise any option under this Section, the Borrower within 90 days
following the event authorizing the exercise of that option, or at any time
during the continuation of the condition referred to in clause (d) of the first
paragraph of this Section, shall give notice to the Issuer and to the Trustee
specifying the date of redemption, which date shall be not more than ninety days
from the date that notice is mailed, and shall make arrangements satisfactory to
the Trustee for the giving of the required notice of redemption.

         The rights and options granted to the Borrower in this Section may be
exercised whether or not the Borrower is in default hereunder; provided, that
such default will not relieve the Borrower from performing those actions which
are necessary to exercise any such right or option granted hereunder.

         Section 6.3. MANDATORY REDEMPTION OF PROJECT BONDS. If, as provided in
the Project Bonds and the Indenture, the Project Bonds become subject to
mandatory redemption, upon the date requested by the Trustee, the Borrower shall
pay to the Trustee moneys sufficient to pay in full the Project Bonds in
accordance with the mandatory redemption provisions relating thereto set forth
in the Indenture.

         Section 6.4. ACTIONS BY ISSUER. At the request of the Borrower or the
Trustee, the Issuer shall take all steps required of it under the applicable
provisions of the Indenture or the Bonds to effect the redemption of all or a
portion of the Bonds pursuant to this Article VI.

         Section 6.5. REQUIRED DEPOSITS FOR OPTIONAL REDEMPTION. Except with the
prior written consent of the Bank, the Trustee shall not give notice of call to
the Holders pursuant to the optional redemption provisions of Section 4.01 of
the Indenture and Sections 6.1 and 6.2 hereof unless, prior to the date by which
the call notice is to be given, there shall be on deposit with the Trustee
Eligible Funds sufficient to redeem at the redemption price thereof, including
premium (if any) and interest accrued to the redemption date, all Project Bonds
for which notice of redemption is to be given.

          All amounts paid by the Borrower pursuant to this Article which are
used to pay principal of, premium, if any, or interest on the Bonds, or to
reimburse the Bank for moneys drawn under the Letter of Credit and used for such
purposes, shall constitute prepaid Loan Payments.

                               (End of Article VI)

                                      -18-
<PAGE>



                                   ARTICLE VII
                         EVENTS OF DEFAULT AND REMEDIES

         Section 7. 1. EVENTS OF DEFAULT.  Each of the following shall be an
Event of Default:

                  (a) The Borrower shall fail to pay when due any Loan Payment.

                  (b) The Borrower shall fail to observe and perform any
agreement, term or condition contained in this Agreement, and the continuation
of such failure for a period of 30 days after notice thereof shall have been
given to the Borrower by the Issuer or the Trustee, or for such longer period as
the Issuer and the Trustee may agree to in writing; provided, that if the
failure is other than the payment of money and is of such nature that it can be
corrected but not, within the applicable period, that failure shall not
constitute an Event of Default so long as the Borrower institutes curative
action within the applicable period and diligently pursues that action to
completion; and provided further that no such failure shall constitute an Event
of Default solely because it results in a Determination of Taxability;

                  (c) The Borrower shall: (i) admit in writing its inability to
pay its debts generally as they become due; (ii) have an order for relief
entered in any case commenced by or against it under the federal bankruptcy
laws, as now or hereafter in effect; (iii) commence a proceeding under any other
federal or state bankruptcy, insolvency, reorganization or similar law, or have
such a proceeding commenced against it and either have an order of insolvency or
reorganization entered against it or have the proceeding remain undismissed and
unstayed for 90 days; (iv) make an assignment for the benefit of creditors; or
(v) have a receiver or trustee appointed for it or for the whole or any
substantial part of its property; or

                  (d) There shall occur an "Event of Default" as defined in
Section 7.01 of the Indenture.

          Notwithstanding the foregoing, if, by reason of Force Majeure, the
Borrower is unable to perform or observe any agreement, term or condition hereof
which would give rise to an Event of Default under subsection (b) hereof
(provided that such failure is other than the payment of money), the Borrower
shall not be deemed in default during the continuance of such inability.
However, the Borrower shall promptly give notice to the Trustee and the Issuer
of the existence of an event of Force Majeure and shall use its best efforts to
remove the effects thereof; provided that the settlement of strikes or other
industrial disturbances shall be entirely within the Borrower's discretion.

The term Force Majeure shall mean, without limitation, the following:

                  (i) acts of God; strikes; lockouts or other industrial
disturbances; acts of public enemies; orders or restraints of any kind of the
government of the United States of America or of the State or any of their
departments, agencies, political subdivisions or officials, or any civil or
military authority; insurrections; civil disturbances; riots; epidemics;
landslides; lightning; earthquakes; fires; hurricanes; tornados; storms;
droughts; floods; arrests; restraint of government and people; explosions;
breakage, malfunction or accident to facilities, machinery, transmission pipes
or canals; partial or entire failure of utilities; shortages of labor,
materials, supplies or transportation; or

                  (ii) any cause, circumstance or event not reasonably within
the control of the Borrower.

                                      -19-


<PAGE>

         The declaration of an Event of Default under subsection (c) above, and
the exercise of remedies upon any such declaration, shall be subject to any
applicable limitations of federal bankruptcy law affecting or precluding that
declaration or exercise during the pendency of or immediately following any
bankruptcy, liquidation or reorganization proceedings.

         Section 7.2. REMEDIES ON DEFAULT. Whenever an Event of Default shall
have happened and be continuing, any one or more of the following remedial
steps may be taken:

                  (a) If and only if acceleration of the principal amount of the
Bonds has been declared pursuant to Section 7.03 of the Indenture, the Trustee
shall declare all Loan Payments and Notes to be immediately due and payable,
whereupon the same shall become immediately due and payable;

                  (b) The Bank or the Trustee may have access to, inspect,
examine and make copies of the books, records, accounts and financial data of
the Borrower pertaining to the Project; and

                  (c) The Issuer or the Trustee may pursue all remedies now or
hereafter existing at law or in equity to collect all amounts then due and
thereafter to become due under this Agreement, the Letter of Credit or the Notes
or to enforce the performance and observance of any other obligation or
agreement of the Borrower under those instruments.

         Notwithstanding the foregoing, the Issuer shall not be obligated to
take any step which in its opinion will or might cause it to expend time or
money or otherwise incur liability unless and until a satisfactory indemnity
bond has been furnished to the Issuer at no cost or expense to the Issuer. Any
amounts collected as Loan Payments or applicable to Loan Payments and any other
amounts which would be applicable to payment of Bond Service Charges collected
pursuant to action taken under this Section shall be paid into the Bond Fund and
applied in accordance with the provisions of the Indenture or, if the
outstanding Bonds have been paid and discharged in accordance with the
provisions of the Indenture, shall be paid as provided in Section 5.08 of the
Indenture for transfers of remaining amounts in the Bond Fund.

         The provisions of this section are subject to the further limitation
that the rescission by the Trustee of its declaration that all of the Bonds are
immediately due and payable also shall constitute an annulment of any
corresponding declaration made pursuant to paragraph (a) of this Section and a
waiver and rescission of the consequences of that declaration and of the Event
of Default with respect to which that declaration has been made, provided that
no such waiver or rescission shall extend to or affect any subsequent or other
default or impair any right consequent thereon.

         Section 7.3. NO REMEDY EXCLUSIVE. No remedy conferred upon or reserved
to the Issuer or the Trustee by this Agreement is intended to be exclusive of
any other available remedy or remedies, but each and every such remedy shall be
cumulative and shall be in addition to every other remedy given under this
Agreement, the Letter of Credit or any Note, or now or hereafter existing at
law, in equity or by statute. No delay or omission to exercise any right or
power accruing upon any default shall impair that right or power or shall be
construed to be a waiver thereof, but any such right and power may be exercised
from time to time and as often as may be deemed expedient. In order to entitle
the Issuer or the Trustee to exercise any remedy reserved to it in this Article,
it shall not be necessary to give any notice, other than any notice required by
law or for which express provision is made herein.

                                      -20-


<PAGE>

         Section 7.4. AGREEMENT TO PAY ATTORNEYS' FEES AND EXPENSES. If an Event
of Default should occur and the Issuer or the Trustee should incur expenses,
including attorneys' fees and expenses, in connection with the enforcement of
this Agreement, the Trust Indenture, the Letter of Credit or any Note or the
collection of sums due thereunder, the Borrower shall reimburse the Issuer and
the Trustee, as applicable, for the reasonable expenses so incurred upon demand.

         Section 7.5. NO WAIVER. No failure by the Issuer or the Trustee to
insist upon the strict performance by the Borrower of any provision hereof shall
constitute a waiver of their right to strict performance and no express waiver
shall be deemed to apply to any other existing or subsequent right to remedy the
failure by the Borrower to observe or comply with any provision hereof.

                              (End of Article VII)

                                      -21-
<PAGE>



                                  ARTICLE VIII
                                  MISCELLANEOUS

          Section 8.1. TERM OF AGREEMENT. This Agreement shall be and remain in
full force and effect from the date of initial delivery of the Project Bonds
until such time as all of the Bonds shall have been fully paid (or provision
made for such payment) pursuant to the Indenture and all other sums payable by
the Borrower under this Agreement and the Notes shall have been paid, except for
obligations of the Borrower under Sections 3.8, 4.2, 5.3 and 7.4 hereof, which
shall survive any termination of this Agreement,

          Section 8.2. NOTICES. All notices, certificates, requests or other
communications hereunder shall be in writing and shall be deemed to be
sufficiently given when mailed by registered or certified mail, postage prepaid,
and addressed to the appropriate Notice Address. A duplicate copy of each
notice, certificate, request or other communication given hereunder to the
Issuer, the Borrower, the Bank or the Trustee shall also be given to the others.
The Borrower, the Issuer, the Bank and the Trustee, by notice given hereunder,
may designate any further or different addresses to which subsequent notices,
certificates, requests or other communications shall be sent.

          Section 8.3. EXTENT OF COVENANTS OF THE ISSUER; NO PERSONAL LIABILITY.
All covenants, obligations and agreements of the Issuer contained in this
Agreement or the Indenture shall be effective to the extent authorized and
permitted by applicable law. No such covenant, obligation or agreement shall be
deemed to be a covenant, obligation or agreement of any present or future
member, officer, agent or employee of the Issuer or the Issuing Authority in
other than his official capacity, and neither the members of the Issuing
Authority nor any official executing the Bonds shall be liable personally on the
Bonds or be subject to any personal liability or accountability by reason of the
issuance thereof or by reason of the covenants, obligations or agreements of the
Issuer contained in this Agreement or in the Indenture.

          Section 8.4. BINDING EFFECT. This Agreement shall inure to the benefit
of and shall be binding in accordance with its terms upon the Issuer, the
Borrower and their respective successors and assigns; provided that this
Agreement may not be assigned by the Borrower (except in connection with a sale,
lease or grant of use pursuant to Section 5.2 hereof) and may not be assigned by
the Issuer except to the Trustee pursuant to the Indenture or as otherwise may
be necessary to enforce or secure payment of Bond Service Charges. This
Agreement may be enforced only by the parties, their assignees and others who
may, by law, stand in their respective places.

          Section 8.5. AMENDMENTS AND SUPPLEMENTS. Except as otherwise expressly
provided in this Agreement, any Note or the Indenture, subsequent to the
issuance of the Project Bonds and prior to all conditions provided for in the
Indenture for release of the Indenture having been met, this Agreement or any
Note may not be effectively amended, changed, modified, altered or terminated
except in accordance with the applicable provisions of Article XI of the
Indenture.

          Section 8.6. EXECUTION COUNTERPARTS. This Agreement may be executed
in any number of counterparts, each of which shall be regarded as an original
and all of which shall constitute but one and the same instrument.

          Section 8.7. SEVERABILITY. If any provision of this Agreement, or any
covenant, obligation or agreement contained herein, is determined by a court of
competent jurisdiction to be invalid or unenforceable, that determination shall
not affect any other provision, covenant, obligation or agreement, each of which
shall be construed and enforced as if the invalid or unenforceable portion were
not contained herein. That invalidity

                                      -22-
<PAGE>

or unenforceability shall not affect any valid and enforceable application
thereof, and each such provision, covenant, obligation or agreement shall be
deemed to be effective, operative, made, entered into or taken in the manner and
to the full extent permitted by law.

          Section 8.8. GOVERNING LAW. This Agreement shall be deemed to be a
contract made under the laws of the State and for all purposes shall be governed
by and construed in accordance with the laws of the State.

                              (End of Article VIII)


                                      -23-

<PAGE>



         IN WITNESS WHEREOF, the Issuer and the Borrower have caused this
Agreement to be duly executed in their respective names, all as of the date
first above written.

                                         HILLSBOROUGH COUNTY INDUSTRIAL
                                                  DEVELOPMENT AUTHORITY



                                         By:
                                            -----------------------------------
                                             Chairman




                                         And By:
                                                -------------------------------
                                                  Secretary


                                         SIFCO INDUSTRIES, INC.



                                         By:   /s/  Richard Demetter
                                            ---------------------------------
                                                  Vice President-Finance

                                      -24-
<PAGE>



                                    EXHIBIT A

                               PROJECT FACILITIES

         The Project consists of the acquisition, construction, installation and
equipping of a manufacturing facility to be used in the repair, overhaul and
otherwise servicing jet aircraft turbine engines including turbine blades and
other components. The proceeds of the Project Bonds are expected to be expended
as set forth below:

<TABLE>
<S>                                                                <C>
         I.   Construction of an addition to an existing building  $      1,000,000

         II.  Acquisition of Equipment                                    1,450,000

        III.  Issuance Costs                                                 50,000

         IV.  Retirement of 1992 bond issue                               1,600,000
                                                                   ----------------

              TOTAL:                                               $      4,100,000
</TABLE>






                                       A-1


                                      -25-
<PAGE>



                                    EXHIBIT B

                                  PROJECT SITE

         The north six acres of Tract 7 of the Tampa West Industrial Park, Phase
I, the plat of which is recorded in Plat Book 46, Page 29 of the public records
of Hillsborough County, Florida, and known as 4910 Savarese Circle in the City
of Tampa, Florida.



















                                       B-1

                                      -26-

<PAGE>



                                    EXHIBIT C

                                  PROJECT NOTE

$4,100,000                                      _________________________, 1998


         SIFCO Industries, Inc., an Ohio corporation (the "Borrower"), for value
received, promises to pay to National City Bank, Cleveland, Ohio, as trustee
(the "Trustee") under the Indenture hereinafter referred to the principal sum of

                   FOUR MILLION ONE HUNDRED THOUSAND DOLLARS
                                  ($4,100,000)

on May 1, 2013, and to pay (i) interest on the unpaid balance of such principal
sum from and after the date of this Note at the interest rate or interest rates
borne by the Project Bonds and (ii) interest on overdue principal and to the
extent permitted by law, on overdue interest, at the interest rate provided
under the terms of the Project Bonds.

         This Note has been executed and delivered by the Borrower pursuant to a
certain Loan Agreement (the "Agreement"), dated as of May 1, 1998, between the
Hillsborough County Industrial Development Authority (the "Issuer") and the
Borrower. Terms used but not defined herein shall have the meanings ascribed to
such terms in the Agreement and the Indenture, as defined below.

         Under the Agreement, the Issuer has loaned the Borrower the proceeds
received from the sale of $4,100,000 aggregate principal amount of Hillsborough
County Industrial Development Authority Industrial Development Variable Rate
Demand Revenue Bonds, Series 1998 (SIFCO Industries, Inc. Project), dated as of
the date of their issuance (the "Project Bonds"), to be applied to assist in the
financing of the Project. The Borrower has agreed to repay such loan by making
Loan Payments at the times and in the amounts set forth in this Note. The
Project Bonds have been issued, concurrently with the execution and delivery of
this Note, pursuant to, and are secured by, the Trust Indenture (the
"Indenture"), dated as of May 1, 1998, between the Issuer and the Trustee.

         To provide funds to pay the Bond Service Charges on the Project Bonds
as and when due, or to reimburse the Bank for draws under the Letter of Credit
to make such payments, the Borrower hereby agrees to and shall make Loan
Payments as follows: On (A) each Interest Payment Date, the amount equal to the
interest due on the Project Bonds on such Interest Payment Date and (B) on May
1, 1999 and on each May 1 thereafter, the principal amount of the Project Bonds
to be redeemed on the next redemption date (or that date if such payment is made
on a redemption date) pursuant to Section 22 of the Reimbursement Agreement or
mandatory sinking fund redemption or upon maturity of the Project Bonds (each
such day being a "Loan Payment Date"). In addition, to provide funds to pay the
Bond Service Charges on the Project Bonds as and when due at any other time, the
Borrower hereby agrees to and shall make Loan Payments on any other date on
which any Bond Service Charges on the Project Bonds shall be due and payable,
whether at maturity, upon acceleration, call for redemption or otherwise in an
amount equal to those Bond Service Charges.

                                       C-1

                                      -27-
<PAGE>



         If payment or provision for payment in accordance with the Indenture is
made in respect of the Bond Service Charges on the Project Bonds from moneys
other than Loan Payments, this Note shall be deemed paid to the extent such
payments or provision for payment of Bond Service Charges has been made. The
Borrower shall receive a credit against its obligation to make Loan Payments
hereunder to the extent of any other amounts on deposit in the Bond Fund and
available to pay Bond Service Charges on the Project Bonds pursuant to the
Indenture except for moneys made available to the Trustee under and pursuant to
the Letter of Credit for the payment of Bond Service Charges. Subject to the
foregoing, all Loan Payments shall be in the full amount required hereunder.

         All Loan Payments shall be payable in lawful money of the United States
of America in immediately available funds and shall be made to the Trustee at
its corporate trust office for the account of the Issuer, deposited in the Bond
Fund and used as provided in the Indenture.

         The obligation of the Borrower to make the payments required hereunder
shall be absolute and unconditional and the Borrower shall make such payments
without abatement, diminution or deduction regardless of any cause or
circumstances whatsoever including, without limitation, any defense, set-off,
recoupment or counterclaim which the Borrower may have or assert against the
Issuer, the Trustee, the Bank or any other person.

         This Note is subject to optional, extraordinary optional and mandatory
prepayment, in whole or in part, upon the terms and conditions set forth in
Article VI of the Agreement. Any optional or extraordinary optional prepayment
is also subject to satisfaction of any applicable notice, deposit or other
requirements set forth in the Agreement or the Indenture.

         Whenever an Event of Default under Section 7.1 of the Agreement shall
have occurred, the unpaid principal amount of and any premium and accrued
interest on this Note may be declared or may become due and payable as provided
in Section 7.2 of the Agreement; provided that any annulment of a declaration of
acceleration with respect to the Bonds under the Indenture shall also constitute
an annulment of any corresponding declaration with respect to this Note.

IN WITNESS WHEREOF, the Borrower has signed this Note as of the date first above
written.

                                            SIFCO INDUSTRIES, INC.



                                            By:________________________________







                                       C-2

                                      -28-

<PAGE>



                                    EXHIBIT D

               STATEMENT NO. ____ REQUESTING DISBURSEMENT OF FUNDS
              FROM THE PROJECT FUND PURSUANT TO SECTION 3.4 OF THE
                 LOAN AGREEMENT BETWEEN THE HILLSBOROUGH COUNTY
           INDUSTRIAL DEVELOPMENT AUTHORITY AND SIFCO INDUSTRIES, INC.

         Pursuant to Section 3.4 of the Loan Agreement (the "Agreement") between
the Hillsborough County Industrial Development Authority (the "Issuer") and
SIFCO Industries, Inc. (the "Borrower"), dated as of May 1, 1998, the
undersigned Authorized Borrower Representative hereby requests and authorizes
National City Bank, Cleveland, Ohio, as trustee (the "Trustee"), as depository
of the Project Fund created by the Indenture, as defined in the Agreement, to
pay to the Borrower or to the person(s) listed on the Disbursement Schedule
attached hereto out of the moneys on deposit in the Project Fund the aggregate
sum of $ _______________, to pay such person(s) or to reimburse the Borrower in
full, as indicated in the Disbursement Schedule, for advances, payments and
expenditures made by it in connection with the items listed in the Disbursement
Schedule.

          In connection with the foregoing request and authorization, the
undersigned hereby certifies that:

         (a) Each item for which disbursement is requested hereunder is properly
payable out of the Project Fund in accordance with the terms and conditions of
the Agreement, is consistent with the IRS Form 8038 information statement filed
by the Issuer in connection with the Bonds, and none of those items has formed
the basis for any disbursement heretofore made from the Project Fund;

         (b) Each such item is or was necessary in connection with the
acquisition or installation of the property comprising the Project, as defined
in the Agreement;

         (c) This statement and all exhibits hereto, including the Disbursement
Schedule, shall be conclusive evidence of the facts and statements set forth
herein and shall constitute full warrant, protection and authority to the
Trustee for its actions taken pursuant hereto; and

         (d) This statement constitutes the approval of the Borrower of each
disbursement hereby requested and authorized.

         IN WITNESS WHEREOF, the Authorized Borrower Representative has set his
hand as of the _____ day of __________, 19 _____.



                                       -----------------------------------
                                       Authorized Borrower Representative


                                       D-1

                                     -29-


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.B
<SEQUENCE>9
<FILENAME>l93943aex10-b.txt
<DESCRIPTION>EXHIBIT 10(B)
<TEXT>
<PAGE>
                                                                  EXHIBIT 10(b)

                             SIFCO INDUSTRIES, INC.

       Deferred Compensation Program for Directors and Executive Officers
       ------------------------------------------------------------------
                    (as amended and restated April 26, 1984)

I.       PURPOSE

         The purpose of this Program is to permit any member of the Board of
Directors (the "Board") of SIFCO Industries, Inc. (the "Corporation") to defer
all or any portion of his compensation as a director, and any Executive Officer
to defer all or any portion of his incentive compensation until such time as he
elects as provided for herein.

II.      DEFINITIONS

         When used in this instrument, the following words and phrases have the
indicated meanings:

         (A)      "FISCAL YEAR" means the twelve month period commencing on
                  October 1 and concluding on September 30.

         (B)      "EXECUTIVE OFFICERS" means those officers of the Corporation
                  and its subsidiaries whose incentive compensation is
                  specifically approved by the Board or the Compensation
                  Committee of the Board (the "Committee").

         (C)      "INCENTIVE COMPENSATION" means contingent compensation which
                  the Board or Committee specifically approved as an incentive
                  for executive performance.

         (D)      "DIRECTOR'S FEES" means all compensation payable to a director
                  for services as a director, including fees for attending
                  meetings of the Board and of its committees and annual
                  retainer fees.

         (E)      "DEFERRED COMPENSATION ACCOUNT OR ACCOUNTS" means, in the case
                  of a Director, the Cash Account and the Stock Account and in
                  the case of an Executive Officer, the Cash Account maintained
                  for such individual by the Corporation.

III.     ADMINISTRATION

         This program shall be administered by the Committee. The Committee's
interpretation and construction of the provisions of the Program shall be
conclusive. Matters relating to a participant who is a member of the Committee
shall be resolved by the Board and such participant shall not participate in the
Board's decision.

IV.      RIGHT TO DEFER COMPENSATION

         (A)      Any director of the Corporation may, at any time on or prior
                  to September 30 of any year, elect to defer under this Program
                  receipt of all, or such portion as he may designate, of his
                  Director's Fees for the Fiscal Year beginning after the
                  election and for subsequent Fiscal Years. Notwithstanding the
                  preceding


<PAGE>

                  sentence, any person elected to the Board who was not a
                  director on the preceding September 30 may, before his term
                  begins, elect to defer receipt of all, or such portion as he
                  may designate, of his Director's Fees for the remainder of the
                  Fiscal Year following his election as a director and for
                  subsequent Fiscal Years.

         (B)      Any Executive Officer may, at any time on or prior to
                  September 30 of any year, elect to defer under this Program
                  receipt of all, or such portion as he may designate, of his
                  Incentive Compensation for the Fiscal Year beginning after the
                  election and for subsequent Fiscal Years.

V.       ELECTION

         Any election under paragraph IV of this Program shall be made by
written notice delivered to the Vice President-Finance of the Corporation
specifying (i) the Fiscal Year or Years with respect to which the election
should apply, (ii) the amount of compensation, or the method of determining the
compensation, to be deferred for such Fiscal Year or Years and (iii) the time
and manner of payment of the deferred amount as provided in paragraph X below.
Any election made by a director on or after April 26, 1984 shall also specify an
allocation of deferred Directors Fees between the Deferred Compensation Accounts
hereinafter described. A director incumbent on April 26, 1984 may within 30 days
of such date file an election with the Vice President-Finance to allocate the
amounts credited to his Deferred Compensation Account between the accounts
hereinafter described. Except as provided in the immediately preceding sentence,
an election under this Program with respect to any Fiscal Year shall be
irrevocable after the commencement of such Fiscal Year; provided, however, that
any election to defer compensation under this Program may be revoked, and an
allocation between Deferred Compensation Accounts may be modified, as to a
future Fiscal Year or Years by written notice delivered to the Vice
President-Finance of the Corporation prior to the commencement of the Fiscal
Year or Years with respect to which such revocation or reallocation is intended
to apply.

VI.      DEFERRED COMPENSATION ACCOUNTS

         (A)      On the last day of each month in which compensation deferred
                  under this Program would have become payable to the
                  participant in the absence of an election to defer payment
                  thereof, the amount of such compensation shall be credited to
                  or among the accounts which shall be established and
                  maintained for such participant as separate accounts on the
                  Corporation's books. A "Cash Account" and a "Stock Account"
                  shall be maintained for each director; only a Cash Account
                  shall be maintained for each Executive Officer.

         (B)      Amounts to be credited to the Stock Account shall first be
                  converted into stock units. The number of stock units shall be
                  determined by dividing the applicable amount of deferred
                  Directors Fees by the average of the high and low price per
                  share of the Corporation's common stock on the principal stock
                  exchange on which the Corporation's shares were traded on such
                  date. Fractional units shall be credited as such.


                                      -2-
<PAGE>


VII.     INTEREST ON CASH ACCOUNT

         Interest shall be credited to each Cash Account, based upon the average
daily balance in the account during each calendar quarter, at a rate equal to
the rate in effect on the first day of the applicable quarter for ninety day
treasury notes. Interest accrued for each quarter of the Fiscal Year with
respect to a Cash Account shall be credited to that Cash Account as of the first
business day of the next succeeding calendar quarter.

VIII.    DIVIDEND CREDITS

         There shall be credited to each Stock Account additional stock units to
reflect the distribution of dividends on the Corporation's common stock. On the
payment date of any dividend paid other than in the common stock of the
Corporation, there shall be determined the amount of cash, or the fair market
value of property, which would have been paid to a participant had he been, on
the applicable record date, the owner of a number of shares of the Corporation's
common stock equal to the number of stock units in his Stock Account. That
amount shall be converted into stock units in the manner specified in paragraph
VI(B) above and credited to the participant's Stock Account. On the payment date
of any stock dividend, there shall be credited to each participant's Stock
Account a number of stock units equal to the number of shares of the
Corporation's common stock that the participant would have received had he been,
on the applicable record date, the owner of a number of shares of the
Corporation's common stock equal to the number of units in his Stock Account.
Fractional units shall be credited as such.

IX.      RECAPITALIZATION

         If a recapitalization of the Corporation occurs and the number of the
Corporation's outstanding shares of common stock is reduced or increased, the
number of stock units in each Stock Account shall be adjusted accordingly.

X.       PAYMENT OF DEFERRED COMPENSATION

         Amounts credited to a participant's Deferred Compensation Accounts
shall be distributed to him at such time and in such manner as the participant
chooses at the time of making the election referred to in paragraph IV above.
Specifically, the participant may elect to have the deferred amounts paid (a)
either after the participant ceases to be a director or Executive Officer of the
Corporation or at such future time as the participant may select, and (b) either
in a lump sum or in annual installments over a period not to exceed ten calendar
years. In the event a participant ceases to be a director or Executive Officer
of the Corporation and becomes a proprietor, officer, partner, employee or
otherwise becomes affiliated with any business that is in competition with the
Corporation, the entire balance in his Deferred Compensation Accounts may, if
directed by the Committee, in its sole discretion, be paid immediately to him in
a lump sum. Amounts credited to a Cash Account shall be distributed in cash.
Units credited to the Stock Account shall customarily be distributed in an equal
number of shares of common stock of the Corporation. A fractional unit shall be
rounded to the next full unit prior to distribution. The amount of any annual
installment payable to a participant from the Cash Account shall be determined
by dividing the unpaid balance of the participant's Cash Account by the number
of installments (including the current installment) remaining to be paid. Until
a Cash Account has been completely distributed, the unpaid balance thereof shall
bear interest as provided in paragraph VII above. The amount of any annual
installment payable to a participant from the Stock Account shall be determined
by dividing the number of undistributed stock units in the participant's Stock
Account by the number of


                                      -3-
<PAGE>

installments (including the current installment) remaining to be paid. Until a
Stock Account has been completely distributed, dividends shall be credited to it
as provided in paragraph VIII above and the provisions of paragraph IX shall
continue to apply. Notwithstanding the foregoing, the Committee, in its sole
discretion may determine to distribute, in lieu of shares of stock, the cash
value of stock units credited to a Stock Account. The cash value of each such
unit shall be equal to the average of the high and low price per share of the
Corporation's common stock on the principal stock exchange on which such shares
are traded on the last business day preceding the date of distribution.

         In the event a participant dies prior to receiving payment of the
entire amount of his Deferred Compensation Accounts, the unpaid balance shall be
paid to such beneficiary or beneficiaries as the participant may have designated
in writing to the Vice President-Finance of the Corporation as the beneficiary
or beneficiaries to receive any post-death distribution under this Program or,
in the absence of a written designation, to his legal representative or
beneficiary or beneficiaries designated in his last will to receive such
distributions. Distributions subsequent to the death of a participant may be
made either in a lump sum or in installments in such amounts and over such
period, not exceeding ten years from the date of death, as the Committee may
direct.

XI.      FINANCIAL EMERGENCIES

         At any time before payment in full of his Deferred Compensation
Accounts a participant may submit a written request to the Committee that any
part or all of his Deferred Compensation Accounts be paid to him because of a
financial emergency. The request shall describe the nature of such emergency and
the amount required therefor. The Committee in its sole discretion shall
determine whether and in what manner payment of the amount requested shall be
made.

XII.     INTEREST OF PARTICIPANT AND BENEFICIARY

         The obligation of the Corporation under the Program to make payments of
amounts reflected in Deferred Compensation Accounts merely constitutes the
unsecured promise of the Corporation to make payments from its general assets or
authorized but unissued Capital Stock as provided herein, and no participant or
beneficiary shall have any interest in, or a lien or prior claim upon, any
property of the Corporation or any subsidiary of the Corporation. Deferred
Compensation Accounts maintained for purposes of this Program shall merely
constitute bookkeeping records of the Corporation and shall not constitute any
allocation whatsoever of any assets of the Corporation or be deemed to create
any trust or special deposit with respect to any of the Corporation's assets.



                                      -4-
<PAGE>


XIII.    AMENDMENT

         The Board may from time to time amend or terminate the Program,
provided that no amendment or termination of the Program shall adversely affect
the Deferred Compensation Accounts of any participant as they existed
immediately before such amendment or termination or the manner of distribution
thereof, unless such participant shall have consented thereto in writing.

XIV.     EFFECTIVE DATE

         This Program, as amended and restated, shall become effective on April
26, 1984.










                                      -5-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.D
<SEQUENCE>10
<FILENAME>l93943aex10-d.txt
<DESCRIPTION>EXHIBIT 10(D)
<TEXT>
<PAGE>
                                                                   EXHIBIT 10(d)

                             SIFCO INDUSTRIES, INC.

                             1995 STOCK OPTION PLAN


         1.       PURPOSE OF PLAN. The Purpose of this Plan is to advance the
                  interest of SIFCO Industries, Inc. (hereinafter called the
                  "Company") and its shareholders by providing a means whereby
                  employees of the Company may be granted (i) options to
                  purchase shares of the common stock, $1.00 par value
                  (hereinafter called "shares") of the Company and (ii) stock
                  appreciation rights under the Plan, to the end that the
                  Company may retain present personnel upon whose judgment,
                  initiative and efforts the successful conduct of the business
                  of the Company largely depends, and may attract new personnel.
                  Some of the options granted under the Plan shall be options
                  which are intended to qualify as "incentive stock options"
                  under Section 422 of the Internal Revenue Code of 1986, as
                  amended (the "Code"), or any successor provision, and are
                  hereinafter sometimes called "incentive stock options".

         2.       SHARES SUBJECT TO THE PLAN. The aggregate number of shares of
                  the Company for which options may be granted under this Plan
                  shall be 200,000; provided, however, that whatever number of
                  shares shall remain reserved for issuance pursuant to the Plan
                  at the time of any stock split, stock dividend or other change
                  in the Company's capitalization shall be appropriately and
                  proportionately adjusted to reflect such stock dividend, stock
                  split or other change in capitalization. Such shares shall be
                  made available from authorized but unissued or reacquired
                  shares of the Company. Any shares for which an option is
                  granted hereunder that are released from such option for any
                  reason other than the exercise of stock appreciation rights
                  granted hereunder shall become available for other options to
                  be granted under this Plan.

         3.       ADMINISTRATION OF THE PLAN. This Plan shall be administered
                  under the supervision of the Compensation, Pension and Stock
                  Option Committee (the "Committee") composed of not less than
                  three directors of the Company appointed by the Board of
                  Directors. Subject to the express provisions of this Plan, the
                  Committee shall have conclusive authority to construe and
                  interpret the Plan, any stock option agreement entered into
                  thereunder, and any stock appreciation right granted
                  thereunder and to establish, amend, and rescind rules and
                  regulations for its administration, and shall have such
                  additional authority as the Board of Directors may from time
                  to time determine to be necessary or desirable.

         4.       GRANTING OF OPTIONS. The Committee from time to time shall
                  designate from among the full-time key employees of the
                  Company, its subsidiaries, any corporation at least 20% of the
                  voting securities of which is owned by the Company or a
                  subsidiary of the Company, and any other business entity in
                  which the Company or a subsidiary of the Company has at least
                  a 50% interest, those employees to whom stock options to
                  purchase shares shall be granted under this Plan, the number
                  of shares which shall be

<PAGE>

                  subject to each option so granted, and the type of option
                  granted. The Committee shall direct an appropriate officer of
                  the Corporation to execute and deliver option agreements to
                  employees reflecting the grant of options. All actions of the
                  Committee under this Section shall be conclusive; provided,
                  however, the aggregate fair market value (determined at the
                  time the option is granted) of the stock with respect to which
                  incentive stock options are exercisable for the first time by
                  any individual during any calendar year (under this Plan or
                  any other plan of the Company and subsidiary corporations that
                  provides for the granting of incentive stock options) shall
                  not exceed $100,000. Any incentive stock option that is
                  granted to any employee who is, at the time the option is
                  granted, deemed for purposes of Section 422 of the Code, or
                  any successor provision, to own shares of the Company
                  possessing more than ten percent (10%) of the total combined
                  voting power of all classes of shares of the Company or of a
                  parent or subsidiary of the Company, shall have an option
                  price that is at least 110 percent of the fair market value of
                  the stock and shall not be exercisable after the expiration of
                  5 years from the date it is granted.

         5.       GRANTING OF STOCK APPRECIATION RIGHTS. The Committee shall
                  have the discretion to grant to optionees, concurrently with
                  the grant of an option, or with respect to outstanding options
                  that are not incentive stock options, stock appreciation
                  rights in connection with stock options on such terms and
                  conditions as it deems appropriate. The Committee shall direct
                  an appropriate officer of the Company to execute and deliver
                  stock appreciation right grants to optionees reflecting the
                  grant of stock appreciation rights. A stock appreciation right
                  will allow an optionee to surrender an option or portion
                  thereof and to receive payment from the Company in an amount
                  equal to the excess of the aggregate fair market value of the
                  optioned shares that are surrendered over the aggregate option
                  price of such shares. Payment may be made in shares, cash or a
                  combination of shares and cash, as provided in the grant.
                  Shares as to which any option is so surrendered shall not be
                  available for future options. The Committee may select
                  employees to whom stock appreciation rights will be granted
                  and determine the number of stock appreciation rights to be
                  granted to each such employee.

         6.       OPTION PERIOD. No incentive stock option granted under this
                  Plan may be exercised later than ten years from the date of
                  grant.

         7.       OPTION PRICE. The option price shall be fixed by the Committee
                  and set forth in the Option Agreement, which price shall not
                  be less than the per share fair market value of the
                  outstanding shares of the Company on the date that the option
                  is granted, as determined by the Committee. The Committee may
                  fix such option price and authorize one or more officers of
                  the Company to compute the price. The option price may be
                  payable in cash, Company stock, or a combination thereof. The
                  date on which the Committee approves the granting of an option
                  shall be deemed the date on which the option is granted.


                                      -2-
<PAGE>

         8.       OPTION AGREEMENT. The Option Agreement in which option rights
                  are granted to an employee shall be in the applicable form
                  (consistent with this Plan) from time to time approved by the
                  Committee and shall be signed on behalf of the Company by the
                  Chairman of the Board, the President or any Vice President of
                  the Company other than the employee who is a party thereto,
                  and shall be dated as of the date of the granting of the
                  option, as determined in Section 7 hereof.

         9.       EXERCISE OF STOCK APPRECIATION RIGHTS. A stock appreciation
                  right shall be exercisable at any time prior to its stated
                  expiration date; but only to the extent the related stock
                  option right may be exercised. No option or stock appreciation
                  right shall be transferable by the optionee except by will or
                  the laws of descent and distribution, and the options and
                  stock appreciation rights may be exercised during the
                  employee's lifetime only by him or his guardian or legal
                  representative.

         10.      AMENDMENT AND TERMINATION OF THE PLAN. The Company, by action
                  of its Board of Directors, reserves the right to amend, modify
                  or terminate at any time this Plan, or, by action of the Board
                  with the consent of the optionee, to amend, modify or
                  terminate any outstanding option agreement or grant of stock
                  appreciation rights, except that the Company may not, without
                  further shareholder approval, (i) increase the total number of
                  shares as to which options may be granted under the Plan
                  (except increases attributable to the adjustments authorized
                  in Section 2 hereof), (ii) change the employees or class of
                  employees eligible to receive options, (iii) reduce the price
                  at which options may be granted, (iv) extend the expiration
                  date of the Plan, or (v) materially increase the benefits
                  accruing to participants under the Plan. Moreover, no action
                  may be taken by the Company (without the consent of the
                  optionee) which will impair the validity of any option or
                  stock appreciation right then outstanding or which will
                  prevent the incentive stock options issued or to be issued
                  under this Plan from being "incentive stock options" under
                  Section 422 of the Code, or any successor provision.

         11.      EFFECTIVE DATE OF PLAN. The Plan shall be effective upon
                  adoption of the Plan by the Board of Directors of the Company.
                  The Plan shall be submitted to the shareholders of the Company
                  for approval within one year after its adoption by the Board
                  of Directors and, if the Plan shall not be approved by the
                  shareholders within said period, the Plan shall be void and of
                  no effect. Any options granted under the Plan prior to the
                  date of approval by the shareholders shall be void if such
                  shareholders' approval is not obtained.

         12.      EXPIRATION OF PLAN. Options may be granted under this Plan at
                  any time prior to October 31, 2005, on which date the Plan
                  shall expire but without affecting any options then
                  outstanding.


                                      -3-

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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