2005A Amendment to Note Purchase Agreement



 Exhibit 10.3 
  
 SYPRIS SOLUTIONS, INC. 
  
 FIRST AMENDMENT 
 TO NOTE PURCHASE
AGREEMENT 
  
 $7,500,000 4.73% Senior Notes, Series A

 Due June 30, 2009 
  
 $27,500,000 5.35% Senior Notes, Series B 
 Due
June 30, 2011 
  
 $20,000,000 5.78% Senior Notes, Series C

 Due June 30, 2014 
  
 Dated as of August 3, 2005 
  
 To the Holders of the Senior Notes 
 of Sypris Solutions, Inc.

 Named in the Attached Schedule I 
  
 Ladies and Gentlemen: 
  
 Reference is made to the Note Purchase Agreement dated as of June 1, 2004 (the “Note Agreement”) among Sypris Solutions, Inc., a Delaware
corporation (the “Company”), and each of the Purchasers named in Schedule A thereto pursuant to which the Company issued $7,500,000 aggregate principal amount of its 4.73% Senior Notes, Series A, due June 30, 2009, $27,500,000 aggregate
principal amount of its 5.35% Senior Notes, Series B, due June 30, 2011 and $20,000,000 aggregate principal amount of its 5.78% Senior Notes, Series C, due June 30, 2014 (together, the “Notes”). You are referred to herein individually as a
“Holder” and collectively as the “Holders.” Capitalized terms used and not otherwise defined in this First Amendment to Note Purchase Agreement (this “Amendment”) shall have the meanings ascribed to them in the Note
Agreement, as amended hereby. 
  
 The Company has requested the
amendment of Section 10.1 (Consolidated Net Debt) of the Note Agreement to better conform to its operations and its bank facility. The Holders have agreed to modify the Note Agreement on the terms and conditions set forth herein. 







 In consideration of the premises and for good and valuable consideration, the receipt and sufficiency of
which are acknowledged, the Company and the Holders agree as follows: 
  
 1.
AMENDMENTS TO NOTE AGREEMENT 
  
 1.1. Amendment of Section
10.1. Section 10.1 of the Note Agreement is amended to read in its entirety as follows: 
  
 “10.1 Consolidated Net Debt; Fixed Charge Coverage Ratio. 
  
 (a) The Company will not permit the ratio of Consolidated Net Debt to Consolidated EBITDA (for the Company’s then most recently completed four fiscal
quarters) as of the last day of any fiscal quarter to be greater than the following: 
  
 (i) 3.25 to 1.00 for the period of four fiscal quarters ending June 30, 2005; 
  
 (ii) 3.75 to 1.00 for the period of four fiscal quarters ending September 30, 2005; 
  
 (iii) 3.25 to 1.00 for the period of four fiscal quarters ending December 31, 2005; and 
  
 (iv) 3.00 to 1.00 for the period of four fiscal quarters ending March 31,
2006 and for the period of four fiscal quarters ending on each fiscal quarter thereafter. 
  
 If, during the period for which Consolidated EBITDA is being calculated, the Company or a Subsidiary has (i) acquired one or more Persons (or the assets thereof) or (ii) disposed of one or more Subsidiaries (or
substantially all of the assets thereof), Consolidated EBITDA shall be calculated on a pro forma basis (including adjustments to reflect consolidation savings) as if all of such acquisitions and all such dispositions had occurred on the first day of
such period.” 
  
 (b) The Company shall not permit the Fixed
Charge Coverage Ratio for any fiscal quarter to fall below the following applicable ratio calculated as of the end of the applicable fiscal quarter set forth below: 
  

			
	 Fiscal Quarter Ending

	 	 Applicable Minimum Ratio


	 3/31/05
	 	 1.25 to 1.00

	 6/30/05
	 	 1.25 to 1.00

	 9/30/05
	 	 1.25 to 1.00

	 12/31/05
	 	 1.50 to 1.00

	 3/31/06
	 	 1.75 to 1.00

	 6/30/06 and thereafter
	 	 2.00 to 1.00”


  

 2 








 1.2. Schedule B. The following defined terms are added to Schedule B: 
  
 “EBIT” means, as the end of any fiscal
quarter, the sum of the amounts for such period of the Company’s (i) Consolidated Net Income, (ii) Consolidated Interest Expense and (iii) provisions for taxes based on income for the previous four fiscal quarters, determined on a consolidated
basis in accordance with GAAP. 
  
 “Fixed
Charge Coverage Ratio” means, as of any date, the ratio of (i) the sum of the Company’s EBIT plus Operating Lease Rentals to (ii) the sum of the Company’s Consolidated Interest Expense, plus Operating Lease Rentals. 
  
 “Operating Lease Rentals” means the
periodic expense for the portion of obligations with respect to non-capital leases determined on a consolidated basis in accordance with GAAP. 
  
 2. REAFFIRMATION; REPRESENTATIONS AND WARRANTIES 
  
 2.1. Reaffirmation of Note Agreement. The Company reaffirms its agreement to comply with each of the covenants, agreements and other provisions of
the Note Agreement and the Notes, including the additions and amendments of such provisions effected by this Amendment. 
  
 2.2. Note Agreement. The Company represents and warrants that the representations and warranties contained in the Note Agreement are true and
correct as of the date hereof, except (a) to the extent that any of such representations and warranties specifically relate to an earlier date and (b) for such changes, facts, transactions and occurrences that have arisen since June 1, 2004 in the
ordinary course of business, (c) such other matters as have been previously disclosed in writing by the Company (including in its financial statements and notes thereto) to the Holders and (d) other changes that could not reasonably be expected to
have a Material Adverse Effect, except for changes in Indebtedness permitted by the Note Agreement. 
  
 2.3. No Default or Event of Default. After giving effect to the transactions contemplated hereby, there will exist no Default or Event of Default.

  
 2.4. Authorization. The execution, delivery and
performance by the Company of this Amendment have been duly authorized by all necessary corporate action and do not require any registration with, consent or approval of, notice to or action by, any Person (including any Governmental Authority) in
order to be effective and enforceable. The Note Agreement and this Amendment each constitute the legal, valid and binding obligations of the Company, enforceable in accordance with their respective terms, except as such enforceability may be limited
by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law). 
  

 3 








 3. EFFECTIVE DATE 
  
 This Amendment shall become effective as of the date set forth above upon the satisfaction of the following conditions: 
  
 3.1. Consent of Holders to this Amendment. Execution by the Holders of
at least a majority of the aggregate principal amount of the Notes outstanding and receipt by the Holders of a counterpart of this Amendment duly executed by the Company. 
  
 3.2. Amendment Fee. Each Holder shall have received payment of an amendment fee equal to 0.20% of the principal
amount of the outstanding Notes held by such Holder. 
  
 3.3.
Expenses. The Company shall have paid all fees and expenses of special counsel to the Holders. 
  
 4. MISCELLANEOUS 
  
 4.1.
Ratification. The Note Agreement, as amended hereby, shall remain in full force and effect and is ratified, approved and confirmed in all respects. 
  
 4.2. Reference to and Effect on the Note Agreement. Upon the final effectiveness of this Amendment, each reference in the Note Agreement and in
other documents describing or referencing the Note Agreement to the “Agreement,” “Note Agreement,” “hereunder,” “hereof,” “herein,” or words of like import referring to the Note Agreement, shall mean
and be a reference to the Note Agreement, as amended hereby. 
  
 4.3. Binding Effect. This Amendment shall be binding upon and inure to the benefit of the respective successors and assigns of the parties hereto. 
  
 4.4. Governing Law. This Amendment shall be governed by and construed in accordance with Illinois law, excluding
choice-of-law principles of the law of such State that would require the application of the laws of a jurisdiction other than such State. 
  
 4.5. Counterparts. This Amendment may be executed in any number of counterparts, each executed counterpart constituting an original, but altogether
only one instrument. 
  

 4 








 IN WITNESS WHEREOF, the Company and the Holders have caused this Amendment to be executed and
delivered by their respective officer or officers thereunto duly authorized. 
  

			
	 SYPRIS SOLUTIONS, INC.

		
	 By:
	 	  


	 Name:
	 	  


	 Title:
	 	  




  

 S-1 








 HOLDERS: 
  

			
	 THE GUARDIAN LIFE INSURANCE COMPANY OF AMERICA

		
	 By:
	 	  


	 Name:
	 	  


	 Title:
	 	  



  

 S-2 









			
	 CONNECTICUT GENERAL LIFE INSURANCE COMPANY

		
	 By:
	 	 CIGNA Investments, Inc. (authorized agent)

		
	 By:
	 	  


	 Name:
	 	  


	 Title:
	 	  


	
	 LIFE INSURANCE COMPANY OF NORTH AMERICA

		
	 By:
	 	 CIGNA Investments, Inc. (authorized agent)

		
	 By:
	 	  


	 Name:
	 	  


	 Title:
	 	  



  

 S-3 









			
	 JEFFERSON PILOT FINANCIAL INSURANCE COMPANY

		
	 By:
	 	  


	 Name:
	 	  


	 Title:
	 	  


	
	 JEFFERSON-PILOT LIFE INSURANCE COMPANY

		
	 By:
	 	  


	 Name:
	 	  


	 Title:
	 	  


	
	 JEFFERSON PILOT LIFEAMERICA INSURANCE COMPANY

		
	 By:
	 	  


	 Name:
	 	  


	 Title:
	 	  



  

 S-4 








 SCHEDULE I 
  


										
	 	  	Principal Amount


	 Holder

	  	Series A

	  	Series B

	  	Series C


	 The Guardian Life Insurance Company of America
	  	 	 	  	 	 	  	$	20,000,000
	 Connecticut General Life Insurance Company
	  	 	 	  	$	12,000,000	  	 	 
	 Life Insurance Company of North America
	  	 	 	  	 	8,000,000	  	 	 
	 Jefferson Pilot Financial Insurance Company
	  	$	6,000,000	  	 	 	  	 	 
	 Jefferson-Pilot Life Insurance Company
	  	 	 	  	 	5,000,000	  	 	 
	 Jefferson Pilot LifeAmerica Insurance Company
	  	 	1,500,000	  	 	2,500,000	  	 	 

  

 Schedule I