ENVIRONMENTAL INDEMNITY AGREEMENT

THIS ENVIRONMENTAL INDEMNITY AGREEMENT (this Agreement) is made as this 29th day of June 2004 by SHOPSMITH, INC., an Ohio corporation ( Borrower ). whose address is 6530 Poe Avenue, Dayton, Ohio 45414 (Borrower sometimes hereinafter being referred to as Indemnitor), in favor of THE PROVIDENT BANK, an Ohio banking corporation (Lender), whose address is 10 West Second Street, 231S, Dayton, Ohio 45402.

Lender has extended to Borrower a loan (the Loan) evidenced by a Promissory Note (the Note) of even date herewith, executed by Borrower and payable to the order of lender, in the stated principal amount of $2,000,000.00 and secured by an Open-End Second Mortgage and Security Agreements (collectively the Mortgage) of even date herewith, encumbering certain real property situated in the State of Ohio, as more particularly described on Exhibit A hereto, and the buildings, structures and other improvements now or hereafter located thereon (collectively, the Property). The Note, the Mortgage and the other documents and instruments evidencing or securing the Loan, as may from time to time be amended or replaced, are referred to as the (Loan Documents).

As a condition to making the Loan, Lender has required that Indemnitor indemnify Lender with respect to any past, present or future environmental conditions or liabilities in any way associated with the Property.

NOW, THEREFORE, in consideration of the foregoing premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Indemnitor hereby covenants and agrees for the benefit of Lender, as follows:

1 . Indemnity. Indemnitor assumes liability for, and agrees to pay, protect, defend (at trial and appellate levels and with attorneys, consultants and experts reasonably acceptable to Lender), and save Lender harmless from and against, and indemnify Lender from and against any and all liens, damages (including, without limitation, punitive or exemplary damages), losses, liabilities (including, without limitation, strict liability), obligations, settlement payments, penalties, fines, assessments, citations, directives, claims, litigation, demands, defenses, judgments, suits, proceedings, costs, disbursements and expenses of any kind or of any nature whatsoever (including, without limitation, reasonable attorneys, consultants and experts fees and disbursements actually incurred in investigating, defending, settling or prosecuting any claim, litigation or proceeding or enforcing any term of this Agreement) (collectively Costs) which may at any time be imposed upon, incurred by or asserted or awarded against Lender, Indemnitor of the Property, and arising directly or indirectly from or out of, whether now, hereafter or heretofore occurring: (i.) any violation or alleged violation of, or liability or alleged liability under, any local, state or federal law, rule Or regulation or common law duty pertaining to human health, natural resources or the environment, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C.|9601 et seq.). the Resource Conservation and Recover Act of 1976 (42 U.S.C. 6901 et seq.),
 

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