Third Amendment to Note Purchase Agreement

Exhibit 10.1

     

    
      

      

    

    


    


    EXECUTION
      VERSION

    


    


    


    


    


    SYPRIS
      SOLUTIONS, INC.

     

    


    THIRD
      AMENDMENT

    TO
      NOTE PURCHASE AGREEMENT

    


    


     

    Dated
      as of April 6, 2007

     

    


    


    


    


    


    $7,500,000
      7.25% Senior Notes, Series A, due June 30, 2009

    


    $27,500,000
      7.45% Senior Notes, Series B, due June 30, 2011

    


    $20,000,000
      7.55% Senior Notes, Series C, due June 30, 2012

    
      

      

    

    



    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
          


        

      

    



    SYPRIS
      SOLUTIONS, INC.

    


    $7,500,000
      7.25% Senior Notes, Series A, due June 30, 2009

    $27,500,000
      7.45% Senior Notes, Series B, due June 30, 2011

    $20,000,000
      7.55% Senior Notes, Series C, due June 30, 2012

    


    As
      of
      April 6, 2007

    


    To
      each of the Current Noteholders

    Named
      in Annex 1 hereto:

    


    Ladies
      and Gentlemen:

    


    SYPRIS
      SOLUTIONS, INC.,
      a
      Delaware corporation (together with any successors and assigns, the
“Company”),
      hereby agrees with each of you as follows:

     

    
      	1.  	
              PRIOR
                ISSUANCE OF NOTES, ETC.

            


    

     

    The
      Company issued and sold (i) $7,500,000 in aggregate principal amount of its
      4.73% Senior Notes, Series A, due June 30, 2009 (collectively, the “Existing
      Series A Notes”),
      (ii)
      $27,500,000 in aggregate principal amount of its 5.35% Senior Notes, Series
      B,
      due June 30, 2011 (collectively, the “Existing
      Series B Notes”)
      and
      (iii) $20,000,000 in aggregate principal amount of its 5.78% Senior Notes,
      Series C, due June 30, 2014 (collectively, the “Existing
      Series C Notes”
and
      together with the Existing Series A Notes and the Existing Series B Notes,
      collectively, the “Existing
      Notes”,
      and
      the Existing Notes, as amended pursuant to this Agreement and as may be further
      amended, restated, modified or replaced from time to time, together with any
      such notes issued in substitution therefor pursuant to Section 13 of the Note
      Purchase Agreement, the “Notes”)
      pursuant to the Note Purchase Agreement dated as of June 1, 2004 by and among
      the Company and the purchasers named in Schedule A thereto, as amended by that
      certain First Amendment to Note Purchase Agreement, dated as of August 3, 2005
      and that certain Second Amendment to Note Purchase Agreement, dated as of March
      13, 2006 (as so amended, the “Existing
      Note Agreement”
and,
      as
      amended pursuant to this Agreement and as may be further amended, restated
      or
      otherwise modified from time to time, the “Note
      Purchase Agreement”).
      The
      Company represents and warrants to each of you that the register kept by the
      Company for the registration and transfer of the Notes indicates that each
      of
      the Persons named in Annex
      1
      hereto
      (collectively, the “Current
      Noteholders”)
      is
      currently a holder of the aggregate principal amount of the Notes of each Series
      indicated in such Annex.

     

    
      	2.  	
              AMENDMENTS.

            


    

     

    The
      Company agrees and, subject to the satisfaction of the conditions set forth
      in
      Section 5 of this Agreement, each of the Current Noteholders agrees to the
      amendment of the Existing Notes and certain provisions of the Existing Note
      Agreement, in each case as provided for by Section 4 of this Agreement (the
      “Amendments”).

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	3.  	
              WARRANTIES
                AND REPRESENTATIONS.

            


    

     

    To
      induce
      the Current Noteholders to enter into this Agreement and to agree to the
      Amendments, the Company warrants and represents to you, as of the date hereof,
      as follows (it being agreed, however, that nothing in this Section 3 shall
      affect any of the warranties and representations previously made by the Company
      in or pursuant to the Existing Note Agreement, and that all of such other
      warranties and representations, as well as the warranties and representations
      in
      this Section 3, shall survive the effectiveness of the Amendments).

     

    
      	3.1.  	
              No
                Material Adverse Change.

            


    

     

    Since
      the
      date of the financial statements of the Company filed with the Securities and
      Exchange Commission with the Company’s Annual Report on Form 10-K for the period
      ended December 31, 2006, there has been no change in the business operations,
      profits, financial condition, properties or business prospects of the Company
      and its Subsidiaries except changes that, in the aggregate, could not reasonably
      be expected to have a Material Adverse Effect.

     

    
      	3.2.  	
              Full
                Disclosure.

            


    

     

    Neither
      the financial statements and other certificates previously provided to the
      Current Noteholders pursuant to the provisions of the Existing Note Agreement
      nor the statements made in this Agreement nor the projected financial
      information provided to the Current Noteholders on December 6, 2006, as updated
      on February 6, 2007 (the “Initial
      Projections”)
      in
      connection with the proposal and negotiation of the Amendments, taken as a
      whole, contain any untrue statement of a material fact or omit a material fact
      necessary to make the statements contained therein and herein, taken as a whole,
      not misleading. There is no fact relating to any event or circumstance that
      has
      occurred or arisen since the date of the Initial Projections that the Company
      has not disclosed to the Current Noteholders in writing that has had or, so
      far
      as the Company can now reasonably foresee, could reasonably be expected to
      have,
      individually or in the aggregate, a Material Adverse Effect. All pro forma
      financial information, financial or other projections and forward-looking
      statements delivered to the Current Noteholders (including the Initial
      Projections) have been prepared in good faith by the Company based on reasonable
      assumptions.

     

    
      	3.3.  	
              Solvency.

            


    

     

    The
      fair
      value of the business and assets of each of the Company and each Subsidiary
      Guarantor exceeds the amount that will be required to pay its respective
      liabilities (including, without limitation, contingent, subordinated, unmatured
      and unliquidated liabilities on existing debts, as such liabilities may become
      absolute and matured). Neither the Company nor the Subsidiary Guarantors is
      engaged in any business or transaction, or about to engage in any business
      or
      transaction, for which such Person has unreasonably small assets or capital
      (within the meaning of the Uniform Fraudulent Transfer Act, the Uniform
      Fraudulent Conveyance Act and Section 548 of the Federal Bankruptcy Code),
      and
      neither the Company nor the Subsidiary Guarantors has any intent to

     

    (a) hinder,
      delay or defraud any entity to which any of them is, or will become, on or
      after
      the Closing Date, indebted, or

     

     

    
      
        
        

      

      
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    (b) incur
      debts that would be beyond any of their ability to pay as they
      mature.

     

    
      	3.4.  	
              No
                Defaults.

            


    

     

    No
      event
      has occurred and no condition exists that, upon the execution and delivery
      of
      this Agreement and the effectiveness of the Amendments, would constitute a
      Default or an Event of Default.

     

    
      	3.5.  	
              Title
                to Properties.

            


    

     

    The
      Company and its Subsidiaries have good and sufficient title to or the legal
      right to use their respective properties, including all such properties
      reflected in the most recent audited balance sheet of the Company delivered
      pursuant to the provisions of Section 7.1 of the Existing Note Agreement (except
      as sold or otherwise disposed of in the ordinary course of business) or
      purported to have been acquired by the Company or any Subsidiary after said
      date
      (except as sold or otherwise disposed of in the ordinary course of business),
      in
      each case (a) to the extent such properties are individually or in the aggregate
      Material, and (b) free and clear from Liens not permitted by the Financing
      Documents.

     

    
      	3.6.  	
              Transaction
                is Legal and Authorized; Obligations are
                Enforceable.

            


    

     

    (a)  The
      execution and delivery of this Agreement, the Notes, the Subsidiary Guaranty
      Amendment, the Collateral Sharing Agreement, the Security Documents and the
      other documents and instruments entered into in connection herewith and
      therewith (collectively, the “Third
      Amendment Documents”)
      by the
      Company and the Subsidiary Guarantors (collectively, the “Obligors”)
      and
      compliance by the Obligors with all of their respective obligations
      thereunder:

     

    (i)  is
      within
      the corporate or limited liability company powers of each Obligor;

     

    (ii)  is
      legal
      and does not conflict with, result in any breach in any of the provisions of,
      constitute a default under, or result in the creation of any Lien upon any
      property of the Obligors under the provisions of, any agreement, charter
      instrument, bylaw or other instrument to which any Obligor is a party or by
      which it or any of its Property may be bound; and

     

    (iii)  does
      not
      give rise to a right or option of any other Person under any agreement or other
      instrument, which right or option, individually or in the aggregate, could
      reasonably be expected to have a Material Adverse Effect.

     

    (b)  The
      Third
      Amendment Documents have been duly authorized by all necessary action on the
      part of each Obligor and each Third Amendment Document has been executed and
      delivered by one or more duly authorized officers of each Obligor party thereto,
      and each constitutes a legal, valid and binding obligation of such Obligor,
      enforceable in accordance with its terms, except that such enforceability may
      be:

     

     

    
      
        
        

      

      
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    (i)  limited
      by applicable bankruptcy, reorganization, arrangement, insolvency, moratorium
      or
      other similar laws affecting the enforceability of creditors’ rights generally;
      and

     

    (ii)  subject
      to the availability of equitable remedies.

     

    
      	3.7.  	
              Collateral
                Representations.

            


    

     

    (a)  Valid
      and Perfected Security Interests.
      The
      Security Documents create in favor of the Collateral Agent, for the benefit
      of
      the holders from time to time of the Notes and the Lenders, a good and valid
      security interest upon the property purported to be encumbered thereby, subject
      only to Liens permitted by the terms of the Financing Documents (“Permitted
      Liens”).
      Upon
      the execution and delivery of the Third Amendment Documents, such security
      interest will attach in and to all the property purported to be encumbered
      thereby to which such security interest was not previously attached. Such
      security interest, upon the filing of Financing Statements and the recording
      of
      fixture filings in the jurisdictions listed in Schedule
      3.7(a)
      hereto,
      and the filing of patent and trademark assignments with the U.S. Patent and
      Trademark Office and the U.S. Copyright Office will be a first priority (subject
      to Permitted Liens) security interest duly perfected with respect to all
      property purported to be covered thereby (other than any motor vehicles and
      any
      fixtures for which a fixture filing is not required under the terms of the
      Security Agreement) and shall be effective as to any purchaser or grantee after
      the Closing Date of the property encumbered thereby.

     

    (b)  Filings
      and Registrations.
      No
      authorization or approval or other action by, and no notice to or filing with,
      any Governmental Authority is required for:

     

    (A)  the
      grant
      by each Obligor of the Liens granted pursuant to the Security Documents;
      or

     

    (B)  the
      perfection of such security interest (other than any motor vehicles and any
      fixtures for which a fixture filing is not required under the terms of the
      Security Agreement);

     

    except
      for the filing of UCC-1 financing statements (the “Financing
      Statements”)
      with
      the appropriate Governmental Authority of each jurisdiction listed in
Schedule
      3.7(a)
      and the
      filing of assignments of patents, trademarks, copyrights and similar
      items.

    


    (c)  Absence
      of Financing Statements, etc.
      Except
      for Permitted Liens, there is no financing statement, security agreement,
      chattel mortgage, real estate mortgage or other document filed or recorded
      with
      any filing records, registry or other public office, that purports to cover,
      affect or give notice of any present or possible future Lien on, or security
      interest in, any property of any Obligor or any rights relating
      thereto.

    


    (d)  Deposit
      Accounts.
      The
      Obligors maintain all of their deposit and securities accounts with the
      Collateral Agent, other than (i) any such accounts holding money or securities
      for the benefit of employees of the Obligors under employee benefit


     

     

    
      
        
        

      

      
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              plans
        and (ii) any
        such accounts the current outstanding balance of which does not exceed $100,000
        with respect to any single  account. 

       

    

    
      	3.8.  	
              Certain
                Laws.

            


    

     

    The
      execution and delivery of the Third Amendment Documents by the Obligors and
      the
      consummation of the transaction contemplated hereby:

     

    (a)  is
      not
      subject to regulation under the Investment Company Act of 1940, as amended,
      or
      the Federal Power Act, as amended, and

     

    (b)  does
      not
      violate any provision of any statute or other rule or regulation of any
      Governmental Authority applicable to the Company or any Subsidiary.

     

    
      	3.9.  	
              Litigation;
                Observance of Agreements.

            


    

     

    (a)  Other
      than the Dana Bankruptcy Proceedings, there are no actions, suits or proceedings
      pending or, to the knowledge of the Company, threatened against or affecting
      the
      Company or any Subsidiary or any property of the Company or any Subsidiary
      in
      any court or before any arbitrator of any kind or before or by any Governmental
      Authority that, individually or in the aggregate, could reasonably be expected
      to have a Material Adverse Effect.

     

    (b)  Neither
      the Company nor any Subsidiary is in default under any term of any order,
      judgment, decree or ruling of any court, arbitrator or Governmental Authority
      or
      is in violation of any applicable law, ordinance, rule or regulation (including,
      without limitation, Environmental Laws) of any Governmental Authority, which
      default or violation, individually or in the aggregate, could reasonably be
      expected to have a Material Adverse Effect.

     

    
      	3.10.  	
              Charter
                Instruments; Other
                Agreements.

            


    

     

    Neither
      the Company nor any Subsidiary is in violation in any respect of any term of
      any
      charter instrument or bylaw, other than possible immaterial violations by
      Mexican Subsidiaries. Upon the execution and delivery of the Credit Agreement
      and the Third Amendment Documents and the effectiveness of the amendments
      provided therein, neither the Company nor any Subsidiary is in violation or
      default in respect of any term in any agreement or other instrument to which
      it
      is a party or by which it or any of its material property may be bound or
      affected. The execution, delivery and performance by each Obligor of the Third
      Amendment Documents to which it is a party will not conflict with or result
      in
      the material breach of any of the terms, conditions or provisions of any order,
      judgment, decree or ruling of any court, arbitrator or Governmental Authority
      applicable to the Company or any Subsidiary or violate any provision of any
      statute or other rule or regulation of any Government Authority applicable
      to
      the Company or any Subsidiary.

     

     

    
      
        
        

      

      
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      	3.11.  	
              Taxes.

            


    

     

    The
      Company and its Subsidiaries have filed all tax returns that are required to
      have been filed in any jurisdiction, and have paid all taxes shown to be due
      and
      payable on such returns and all other taxes and assessments levied upon them
      or
      their properties, assets, income or franchises, to the extent such taxes and
      assessments have become due and payable and before they have become delinquent,
      except for any taxes and assessments (a) the amount of which is not
      individually or in the aggregate Material or (b) the amount, applicability
      or validity of which is currently being contested in good faith by appropriate
      proceedings and with respect to which the Company or a Subsidiary, as the case
      may be, has established adequate reserves in accordance with GAAP, other than,
      in the case of this clause (b), taxes and assessments in immaterial amounts
      required to be paid by Mexican Subsidiaries. The Company knows of no basis
      for
      any other tax or assessment that could reasonably be expected to have a Material
      Adverse Effect. The charges, accruals and reserves on the books of the Company
      and the Subsidiaries (other than the Mexican Subsidiaries) in respect of
      federal, state or other taxes for all fiscal periods are adequate. The charges,
      accruals and reserves on the books of the Mexican Subsidiaries in respect of
      federal, state or other taxes for all fiscal periods are adequate in all
      material respects.

     

    
      	3.12.  	
              Governmental
                Consent.

            


    

     

    Neither
      the Obligors, nor the nature of any of their respective businesses or
      properties, is such so as to require a consent, approval or authorization of,
      or
      filing, registration or qualification with, any Governmental Authority as a
      condition to the execution and delivery of the Third Amendment
      Documents.

     

    
      	3.13.  	
              Fees.

            


    

     

    Neither
      the Company nor any Subsidiary thereof has paid (or promised to pay) any
      amendment fee or any other direct or indirect compensation to any party to
      the
      Credit Agreement or to any other creditor of the Company or any Subsidiary
      in
      connection with the transactions contemplated hereby other than (a) as
      contemplated by this Agreement, (b) (i) the increase in interest rates and
      commitment fees in favor of the Lenders contemplated by the Credit Agreement,
      (ii) the one-time 25 basis point modification fee payable to the Lenders under
      the terms of the Credit Agreement and (iii) the one-time 25 basis point
      commitment fee payable to the Lenders under the terms of the Credit
      Agreement.

     

    
      	3.14.  	
              Indebtedness;
                Liens.

            


    

     

    There
      is
      no outstanding Debt of the Company or any Subsidiary in respect of borrowed
      money, Capital Leases, the deferred purchase price of property, or existing
      guaranties issued by the Company or any Subsidiary, in each case in an amount
      in
      excess of $100,000, or existing Liens encumbering the property of the Company
      or
      any Subsidiary other than as disclosed in the most recent annual and quarterly
      financial statements of the Company delivered to the Current Noteholders or
      on
Schedule
      3.14
      attached
      hereto and made a part hereof. Schedule
      10.16(b)
      sets
      forth a complete and correct list of all of the real properties leased by the
      Obligors at which Collateral is located with an aggregate net book value in
      excess of $1,000,000. Neither the Company nor any Subsidiary is in default
      and
      no waiver of default is currently in effect, in the

     

     

    
      
        
        

      

      
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 payment
        of any principal or interest on any Debt of the Company or such Subsidiary
        listed on Schedule
        3.14
        hereto,
        and no event or condition exists with respect to any Debt of the Company
        or any
        Subsidiary listed on such schedule that would permit (or that with notice
        or the
        lapse of time, or both, would permit) one or more Persons to cause such Debt
        to
        become due and payable before its stated maturity or before its regularly
        scheduled dates of payment, in each case after giving effect to the amendments
        contemplated by this Agreement and the Credit Agreement.

    

     

    
      	3.15.  	
              Amendment
                to Credit Agreement.

            


    

     

    The
      Company has delivered to each of the Current Noteholders a true and correct
      copy
      of the Credit Agreement.

     

    3.16 Fiscal
      Quarter End Dates.

     

    The
      fiscal quarter end dates of the Company for fiscal year 2007 are April 1, 2007,
      July 1, 2007, September 30, 2007 and December 31, 2007.

     

    
      	4.  	
              AMENDMENTS
                TO NOTES AND NOTE PURCHASE
                AGREEMENT.

            


    

     

    
      	4.1.  	
              Amendment
                of Notes.

            


    

     

    (a)     Series
      A Notes. The
      Existing Series A Notes are hereby and shall be deemed to be, automatically
      and
      without any further action, amended and restated in their entirety as set forth
      on Exhibit
      A;
      except
      that the date, registration number and principal amount set forth in each
      Existing Series A Note shall remain the same; provided,
      however,
      that, at
      the request of any Current Noteholder, the Company shall execute and deliver
      a
      new Series A Note or Series A Notes in the form of such Exhibit
      A
      in
      exchange for its Existing Series A Note, registered in the name of such Current
      Noteholder, in the aggregate principal amount of the Series A Notes owing to
      such Current Noteholder on the date hereof and dated the date of the last
      interest payment made to such Current Noteholder in respect of its Existing
      Series A Notes. Each reference to the “4.73% Senior Notes, Series A, due June
      30, 2009” in any of the Financing Documents is hereby deleted and replaced with
      a reference to the “7.25% Senior Notes, Series A, due June 30, 2009”. Each other
      reference to “4.73%” in any of such agreements as the interest rate applicable
      to the Series A Notes is hereby deleted and replaced with “7.25%”.

     

    (b)     Series
      B Notes. The
      Existing Series B Notes are hereby and shall be deemed to be, automatically
      and
      without any further action, amended and restated in their entirety as set forth
      on Exhibit
      B;
      except
      that the date, registration number and principal amount set forth in each
      Existing Series B Note shall remain the same; provided,
      however,
      that, at
      the request of any Current Noteholder, the Company shall execute and deliver
      a
      new Series B Note or Series B Notes in the form of such Exhibit
      B
      in
      exchange for its Existing Series B Note, registered in the name of such Current
      Noteholder, in the aggregate principal amount of the Series B Notes owing to
      such Current Noteholder on the date hereof and dated the date of the last
      interest payment made to such Current Noteholder in respect of its Existing
      Series B Notes. Each reference to the “5.35% Senior Notes, Series B, due June
      30, 2011” in any of the Financing Documents is hereby deleted and replaced with
      a reference to the “7.45% Senior Notes, Series B, due June 30, 

     

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        
      2011”.
        Each other reference to
“5.35%” in any of such agreements as the interest rate applicable to the Series
        B Notes is hereby  deleted and replaced
        with
“7.45%”.

    

     

    (c)     Series
      C Notes. The
      Existing Series C Notes are hereby and shall be deemed to be, automatically
      and
      without any further action, amended and restated in their entirety as set forth
      on Exhibit
      C;
      except
      that the date, registration number and principal amount set forth in each
      Existing Series C Note shall remain the same; provided,
      however,
      that, at
      the request of any Current Noteholder, the Company shall execute and deliver
      a
      new Series C Note or Series C Notes in the form of such Exhibit
      C
      in
      exchange for its Existing Series C Note, registered in the name of such Current
      Noteholder, in the aggregate principal amount of the Series C Notes owing to
      such Current Noteholder on the date hereof and dated the date of the last
      interest payment made to such Current Noteholder in respect of its Existing
      Series C Notes. Each reference to the “5.78% Senior Notes, Series C, due June
      30, 2014” in any of the Financing Documents is hereby deleted and replaced with
      a reference to the “7.55% Senior Notes, Series C, due June 30, 2012”. Each other
      reference to “5.78%” in any of such agreements as the interest rate applicable
      to the Series C Notes and each other reference therein to “June 30, 2014” as the
      applicable maturity date with respect to the Series C Notes is hereby deleted
      and replaced with “7.55%” and “June 30, 2012”, respectively.

     

    
      	4.2.  	
              Note
                Purchase Agreement
                Amendments.

            


    

     

    The
      Existing Note Agreement is hereby and shall be amended in the manner specified
      in Exhibit
      D
      to this
      Agreement.

     

    
      	4.3.  	
              No
                Other Amendments;
                Confirmation.

            


    

     

    Except
      as
      expressly provided herein, (a) no terms or provisions of any agreement are
      modified or changed by this Agreement, (b) the terms of this Agreement shall
      not
      operate as a waiver by any Current Noteholder of, or otherwise prejudice any
      Current Noteholder’s rights, remedies or powers under, the Existing Note
      Agreement, the Existing Notes or any other Financing Document or under any
      applicable law, and (c) the terms and provisions of the Existing Note Agreement,
      the Existing Notes and each other Financing Document shall continue in full
      force and effect.

     

    
      	5.  	
              CONDITIONS
                TO EFFECTIVENESS OF
                AMENDMENTS.

            


    

     

    The
      Amendments shall become effective on the date hereof (the “Closing
      Date”),
      provided that the following conditions precedent have been satisfied to the
      satisfaction of the Current Noteholders pursuant to documentation (where
      applicable) in form and substance satisfactory to them:

     

    (a)     the
      Obligors shall have executed and delivered this Agreement and the Subsidiary
      Guaranty Amendment to the Current Noteholders, and the Company shall have
      executed and delivered replacement Notes to any Current Noteholder requesting
      the same;

     

    (b)     a
      Private
      Placement Number issued by Standard & Poor’s CUSIP Service Bureau shall have
      been obtained for each series of Notes;

     

     

    
      
        
        

      

      
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    (c)     the
      Collateral Agent, the Lenders and the Obligors shall have executed and delivered
      the Collateral Sharing Agreement to the Current Noteholders, which agreement
      shall be in full force and effect;

     

    (d)     the
      Company shall have delivered to each of the Current Noteholders a true and
      correct copy of the Credit Agreement, which agreement shall be in full force
      and
      effect;

     

    (e)     except
      to
      the extent constituting Post-Closing Items, the Security Documents shall have
      been duly executed by each Obligor party thereto and the Collateral Agent,
      and
      the Obligors shall have executed and delivered any documents, agreements,
      instruments, filings and other items related thereto as reasonably required
      by
      any Current Noteholder and/or the Collateral Agent to create a valid, attached,
      perfected, first priority Lien in favor of the Collateral Agent (subject only
      to
      Permitted Liens) with respect to the Collateral covered by the Security
      Documents;

     

    (f)     except
      to
      the extent constituting Post-Closing Items, the Company shall have delivered
      to
      the Current Noteholders fully executed landlord lien waiver agreements from
      the
      landlords of the Obligors with respect to the following locations:

     

    (i)     7307
      and
      7337 South Revere Parkway, Centennial, Colorado;

     

    (ii)     160
      East
      Via Verde Road, San Dimas, California;

     

    (iii)     10901
      Malcolm McKinley Drive, Tampa, Florida;

     

    (iv)     2320
      W.
      Peoria Avenue, Bldg. D 133, Phoenix, Arizona; and

     

    (v)     53
      Second
      Avenue, Burlington, Massachusetts;

     

    (g)     each
      Obligor shall have delivered such certificates of officers, incumbency
      certificates, charter documents, resolutions, good standing certificates and
      other documents related to the status of such Obligor and as to the proper
      authorization of the transactions contemplated by this Agreement, as required
      by
      the Current Noteholders;

     

    (h)     the
      Company shall have provided all other due diligence materials requested by
      the
      Current Noteholders;

     

    (i)     the
      Company shall have delivered (i) a legal opinion of the general counsel to
      the
      Obligors, addressing the matters set forth on Exhibit
      E
      and such
      other matters as required by the Current Noteholders, and (ii) a legal opinion
      of independent counsel to the Obligors (which counsel shall be satisfactory
      to
      the Current Noteholders), addressing the matters set forth on Exhibit
      F and
      such
      other matters as required by the Current Noteholders;

     

    (j)     the
      Company shall have paid all unpaid fees and disbursements of Bingham McCutchen
      LLP (“Bingham”),
      special counsel to the Current Noteholders, as reflected in an invoice presented
      to the Company on or before the date hereof;  

     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (k)     the
      Company shall have prepaid $25,000,000 in aggregate principal amount of the
      Notes, together with interest accrued thereon to the payment date and together
      with the Make-Whole Amount (a calculation of which, in reasonable detail, shall
      have been provided by the Company to the Current Noteholders three Business
      Days
      prior to the Closing Date), in the amounts and with respect to the Notes of
      each
      Current Noteholder as set forth on Annex
      2,
      to be
      paid by wire transfer of immediately available funds in accordance with the
      wiring instructions set forth on Annex
      2 (the
      Current Noteholders hereby waive any notice required in connection with such
      prepayment under the terms of Section 8.2 of the Note Purchase Agreement);
      and

     

    (l)     the
      Company shall have delivered copies of letters from each of Bank of America,
      SunTrust Bank and U.S. Bank, or evidence otherwise satisfactory to the Current
      Noteholders, to the effect that no amounts are due and owing to them under
      the
      Credit Agreement (as in effect immediately prior to the effectiveness of the
      amendment and restatement thereof to be entered into contemporaneously herewith)
      and that their commitments are terminated effective upon such amendment and
      restatement.

     

    Any
      document entered into in connection with the transaction contemplated hereby
      shall be in form and substance satisfactory to the Required Holders, provided
      that execution and delivery of this Agreement by the Required Holders shall
      be
      deemed to be an affirmation that such document is so satisfactory.

     

    
      	6.  	
              DEFINED
                TERMS.

            


    

     

    Capitalized
      terms used herein and not otherwise defined herein shall have the meanings
      ascribed to them in the Note Purchase Agreement. In addition, the following
      capitalized terms used herein shall have the meanings ascribed to them in the
      corresponding section of this Agreement referenced below:

     

    “Agreement”
means
      this Third Amendment to Note Purchase Agreement.

     

    “Amendments”
-
      Section 2.

     

    “Bingham”
-
      Section 5(j).

     

    “Closing
      Date”
-
      Section 5.

     

    “Company”
-
      the
      introductory sentence hereof.

     

    “Current
      Noteholders”
-
      Section 1.

     

    “Existing
      Financing Documents”
-
      Section 8.

     

    “Existing
      Note Agreement”
-
      Section 1.

     

    “Existing
      Notes”
-
      Section 1.

     

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    “Existing
      Pledge Agreement”
-
      means
      the Pledge Agreement, dated as of September 13, 2005, by and among the Company,
      the Collateral Agent, Sypris Technologies Mexican Holdings, LLC and Sypris
      Technologies, Inc.

     

    “Existing
      Series A Notes”
-
      Section 1.

     

    “Existing
      Series B Notes”
-
      Section 1.

     

    “Existing
      Series C Notes”
-
      Section 1.

     

    “Existing
      Sharing Agreement”
-
      means
      the Collateral Sharing Agreement, dated as of September 13, 2005, by and among
      the Current Noteholders, the Collateral Agent and the Lenders.

     

    “Financing
      Statements”
-
      Section 3.7(b).

     

    “Initial
      Projections”
-
      Section 3.2.

     

    “Noteholders”
-
      Section 7.

     

    “Note
      Purchase Agreement”
-
      Section 1.

     

    “Notes”
-
      Section 1.

     

    “Obligors”
-
      Section 3.6(a).

     

    “Permitted
      Liens”
-
      Section 3.7(a).

     

    “Third
      Amendment Documents”
-
      Section 3.6(a).

     

    
      	7.  	
              EXPENSES.

            


    

     

    The
      Company hereby agrees to pay, as and when billed, all reasonable costs and
      expenses of the holders of the Notes (the “Noteholders”),
      including, without limitation, the fees and expenses of Bingham, and also
      including any other reasonable out-of-pocket expenses of the Noteholders
      incurred in connection with this Agreement and the Financing Documents and
      in
      otherwise assessing, analyzing, evaluating, protecting, asserting, defending
      or
      enforcing any rights or remedies which are or may be available to the
      Noteholders under the Financing Documents. This provision shall be supplementary
      to, and shall not in any way be deemed to limit, the terms of any engagement
      letter between the Company and Bingham or any agreement of the Company or any
      Subsidiary to pay the fees and expenses of the Noteholders in any other
      Financing Document.

     

    
      	8.  	
              RELEASE.

            


    

     

    In
      order
      to induce the Current Noteholders to enter into this Agreement, the Obligors
      acknowledge and agree that: (a) neither the Company nor any of its Subsidiaries
      has any claim or cause of action against any of the Current Noteholders (or
      any
      of their respective directors, trustees, officers, employees, attorneys,
      advisors or agents) relating to or arising out of the

     

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    Existing
      Note Agreement, the Existing Notes, the Subsidiary Guaranty, the Existing Pledge
      Agreement, the Existing Sharing Agreement or any agreement entered into in
      connection therewith (collectively, the “Existing
      Financing Documents”);
      (b)
      neither the Company nor any of its Subsidiaries has any offset right,
      counterclaim or defense of any kind against any of their respective obligations,
      indebtedness or liabilities to any of the Current Noteholders; and (c) each
      of
      the Current Noteholders and the Collateral Agent has heretofore properly
      performed and satisfied in a timely manner all of its obligations to the Company
      and its Subsidiaries under the Existing Financing Documents. The Obligors wish
      to eliminate any possibility that any past conditions, acts, omissions, events,
      circumstances or matters would impair or otherwise adversely affect any of
      the
      Current Noteholders’ or the Collateral Agent’s rights, interests, contracts, or
      remedies under the Existing Financing Documents, whether known or unknown,
      as
      applicable. Therefore, each of the Obligors (in the case of the Subsidiary
      Guarantors, pursuant to the acknowledgement and agreement on the signature
      pages
      hereto) unconditionally releases, waives and forever discharges (x) any and
      all
      liabilities, obligations, duties, promises or indebtedness of any kind of the
      Current Noteholders and the Collateral Agent to the Company or any of its
      Subsidiaries, except the obligations to be performed by any of them on or after
      the date hereof as expressly stated in the Financing Documents, as such
      obligations may be modified pursuant to the terms of this Agreement, and (y)
      all
      claims, offsets, causes of action, suits or defenses of any kind whatsoever
      (if
      any), whether arising at law or in equity, whether known or unknown, which
      the
      Company or its Subsidiaries might otherwise have against any Current Noteholder,
      the Collateral Agent or any of their respective directors, trustees, officers,
      employees or agents, in either case (x) or (y), whether known or unknown, on
      account of any past or presently existing condition, act, omission, event,
      contract, liability, obligation, indebtedness, claim, cause of action, defense,
      circumstance or matter of any kind. Neither the Collateral Agent nor any Current
      Noteholder shall be liable with respect to, and the Company and each Subsidiary
      Guarantor hereby waives, releases and agrees not to sue for, any special,
      indirect or consequential damages relating to this Agreement or any other
      Financing Document or arising out of its activities in connection herewith
      or
      therewith (whether before, on or after the date hereof). 

     

    
      	9.  	
              MISCELLANEOUS.

            


    

     

    
      	9.1.  	
              Part
                of Note Purchase Agreement, Future References,
                etc.

            


    

     

    This
      Agreement shall be construed in connection with and as a part of the Existing
      Note Agreement and, except as expressly amended by this Agreement, all terms,
      conditions and covenants contained in the Existing Note Agreement, the Existing
      Notes and the other Existing Financing Documents are hereby ratified and shall
      be and remain in full force and effect. Any and all notices, requests,
      certificates and other instruments executed and delivered after the execution
      and delivery of this Agreement may refer to the Note Purchase Agreement without
      making specific reference to this Agreement, but nevertheless all such
      references shall include this Agreement unless the context otherwise
      requires.

     

    
      	9.2.  	
              Governing
                Law.

            


    

     

    THIS
      AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
      THE LAW OF THE STATE OF ILLINOIS, UNITED

     

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

     STATES
      OF AMERICA, 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.

     

    
      	9.3.  	
              Duplicate
                Originals, Execution in
                Counterpart.

            


    

     

    Two
      (2)
      or more duplicate originals hereof may be signed by the parties, each of which
      shall be an original but all of which together shall constitute one and the
      same
      instrument. This Agreement may be executed in one or more counterparts and
      shall
      become effective at the time provided in Section 5 hereof, and each set of
      counterparts that, collectively, show execution by the Company and each Current
      Noteholder shall constitute one duplicate original.

     

    
      	9.4.  	
              Binding
                Effect.

            


    

     

    This
      Agreement shall be binding upon and shall inure to the benefit of the Company
      and the Current Noteholders and their respective successors and
      assigns.

     

    [Remainder
      of page intentionally left blank; next page is signature
      page.]

    


    


    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    


    If
      this
      Agreement is satisfactory to each of you, please so indicate by signing the
      applicable acceptance on a counterpart hereof and returning such counterpart
      to
      the Company, whereupon this Agreement shall become binding among the Company,
      the Subsidiary Guarantors and each of you in accordance with its
      terms.

    


    Very
      truly yours,

    


    SYPRIS
      SOLUTIONS, INC.

    


    


    By:  
      /s/ Anthony C. Allen

    Name:
      Anthony  C. Allen

    Title:
      Vice President and Treasurer

    



    
      
        [Signature
          Page to Third Amendment to Note Purchase Agreement]

        


         

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    THE
      GUARDIAN LIFE INSURANCE COMPANY OF AMERICA

    


    


    By: /s/
      Ellen I.
      Whittaker             


    Name:
      Ellen I. Whittaker

    Title:
      Director, Fixed Income Investments

    


    



    
      
        [Signature
          Page to Third Amendment to Note Purchase Agreement]

        


        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    


    CONNECTICUT
      GENERAL LIFE INSURANCE COMPANY

    By:
      CIGNA
      Investments, Inc. (authorized agent)

    


    


    By: 
      /s/ David M.
      Cass                               
       

    Name:
      David M. Cass

    Title:
      Managing Director

    


    


    LIFE
      INSURANCE COMPANY OF NORTH AMERICA

    By:
      CIGNA
      Investments, Inc. (authorized agent)

    


    


    By:
      /s/ David M.
      Cass                                   
         

    Name:
      David M. Cass

    Title: 
      Managing Director

    



    
      
        [Signature
          Page to Third Amendment to Note Purchase Agreement]

        


        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    


    JEFFERSON
      PILOT FINANCIAL INSURANCE COMPANY

    By:
       Delaware
      Investment Advisers, a Series of Delaware

    Management
      Business Trust, Attorney-in-Fact

     

     

    By:
      /s/ Edward J.
      Brennan                                    

    Name:
      Edward J. Brennan

    Title:
      Vice President 

    


    


    THE
      LINCOLN NATIONAL LIFE INSURANCE COMPANY,

    successor
      by merger to JEFFERSON-PILOT LIFE

    INSURANCE
      COMPANY

    By:
       Delaware
      Investment Advisers, a Series of Delaware

    Management
      Business Trust, Attorney-in-Fact

    


    
      By:
        /s/ Edward J.
        Brennan                                    

      Name:
        Edward J. Brennan

      Title:
        Vice President 


    

    


    


    LINCOLN
      LIFE & ANNUITY COMPANY OF NEW YORK,

    successor
      by merger to JEFFERSON PILOT

    LIFEAMERICA
      INSURANCE COMPANY

    By:
       Delaware
      Investment Advisers, a Series of Delaware

    Management
      Business Trust, Attorney-in-Fact

    


    
      By:
        /s/ Edward J.
        Brennan                                    

      Name:
        Edward J. Brennan

      Title:
        Vice President 


    

    



    
      
        [Signature
          Page to Third Amendment to Note Purchase Agreement]

        


        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    The
      undersigned Subsidiary Guarantors hereby acknowledge and reaffirm all of their
      obligations under the Subsidiary Guaranty and further acknowledge and agree
      to
      the terms and provisions contained herein, agree to be bound by the terms of
      Section 8 hereof and consent to the Company’s execution hereof:

    


    SYPRIS
      TEST & MEASUREMENT, INC.

    


    


    By: 
      /s/ Anthony C.
      Allen                            


    Name:
      Anthony C. Allen

    Title:
      Treasurer and Assistant Secretary 

    


    SYPRIS
      TECHNOLOGIES, INC.

    


    
      By: 
        /s/ Anthony C.
        Allen                            


      Name:
        Anthony C. Allen

      Title:
        Treasurer and Assistant Secretary 


    

    


    SYPRIS
      ELECTRONICS, LLC

    


    
      By: 
        /s/ Anthony C.
        Allen                            


      Name:
        Anthony C. Allen

      Title:
        Treasurer and Assistant Secretary 


    

    


    SYPRIS
      DATA SYSTEMS, INC.

     

    
      By: 
        /s/ Anthony C.
        Allen                            


      Name:
        Anthony C. Allen

      Title:
        Treasurer and Assistant Secretary 


    

    


    


    SYPRIS
      TECHNOLOGIES MARION, LLC

    


    
      By: 
        /s/ Anthony C.
        Allen                            


      Name:
        Anthony C. Allen

      Title:
        Treasurer and Assistant Secretary 


    

     

    SYPRIS
      TECHNOLOGIES KENTON, INC.

    


    
      By: 
        /s/ Anthony C.
        Allen                            


      Name:
        Anthony C. Allen

      Title:
        Treasurer and Assistant Secretary 


    

     

     

    
      
        [Signature
          Page ot Third Amendment to Note Purchase Agreement]

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    SYPRIS
      TECHNOLOGIES MEXICAN HOLDINGS, LLC

    


    
      By: 
        /s/ Anthony C.
        Allen                            


      Name:
        Anthony C. Allen

      Title:
        Treasurer and Assistant Secretary 


    

    


    



    
      
        
          [Signature
            Page to Third Amendment to Note Purchase Agreement]

          


        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
          


        

      

    



    EXHIBIT
      A

    [FORM
      OF SERIES A SENIOR NOTE]

     

    SYPRIS
      SOLUTIONS, INC.

     

    7.25%
      Senior Note, Series A

    Due
      June
      30, 2009

     

    


     

    No.
      AR-[___]                                                                     [Date]

     

    $[________]                                                               PPN: 871655
      B*6

     

    


    FOR
      VALUE RECEIVED,
      the
      undersigned, SYPRIS
      SOLUTIONS, INC.
      (herein
      called the “Company”), a corporation organized and existing under the laws of
      the State of Delaware, promises to pay to [___________],
      or
      registered assigns, the principal sum of [________________]
      Dollars ($[           
])
      on June
      30, 2009, with interest (computed on the basis of a 360-day year of twelve
      30-day months) (a) on the unpaid balance thereof at the rate of (i) 4.73% per
      annum at all times prior to, but not including, April 6, 2007 and (ii) 7.25%
      per
      annum at all times on or after April 6, 2007 (in each case subject to clause
      (b)
      below), payable semiannually, on June 30 and December 30 in each year,
      commencing with the June 30 or December 30 next succeeding the date hereof,
      until the principal hereof shall have become due and payable, and (b) to the
      extent permitted by law, on any overdue payment of interest and, during the
      continuance of an Event of Default, on such unpaid balance and on any overdue
      payment of any Make Whole Amount (as defined in the Note Purchase Agreement
      referred to below), payable semiannually as aforesaid (or, at the option of
      the
      registered holder hereof, on demand), at a rate per annum from time to time
      equal to the greater of (i) 10.25% or (ii) 3% over the rate of interest publicly
      announced by LaSalle Bank National Association from time to time in Chicago,
      Illinois as its “base” or “prime” rate.

     

    Payments
      of principal of, interest on and any Make-Whole Amount with respect to this
      Note
      are to be made in lawful money of the United States of America at the principal
      office of LaSalle Bank National Association in Chicago, Illinois or at such
      other place as the Company shall have designated by written notice to the holder
      of this Note as provided in the Note Purchase Agreement referred to
      below.

     

    This
      Note
      is one of a series of Senior Notes (herein called the “Notes”) issued pursuant
      to a Note Purchase Agreement dated as of June 1, 2004 (as from time to time
      amended, the “Note Purchase Agreement”), between the Company and the respective
      Purchasers named therein and is entitled to the benefits thereof. Each holder
      of
      this Note will be deemed, by its acceptance hereof, (i) to have agreed to the
      confidentiality provisions set forth in Section 20 of the Note Purchase
      Agreement and (ii) to have made the representations and agreements set forth
      in
      Section 6 of the Note Purchase Agreement.

     

    This
      Note
      is a registered Note and, as provided in the Note Purchase Agreement, upon
      surrender of this Note for registration of transfer, duly endorsed, or
      accompanied by a written instrument of transfer duly executed, by the registered
      holder hereof or such holder’s 

     

     

    
      
        
        

      

      
        Exhibit
          A-1

        
          

        

      

      
        
        
attorney
        duly authorized in writing, a new Note for a like principal amount will be
        issued to, and registered in the name of, the transferee. Prior to due
        presentment for registration of transfer, the Company may treat the person
        in
        whose name this Note is registered as the owner hereof for the purpose of
        receiving payment and for all other purposes, and the Company will not be
        affected by any notice to the contrary.

    

     

    This
      Note
      is subject to optional prepayment, in whole or from time to time in part, and
      is
      subject to mandatory prepayment, in each case at the times and on the terms
      specified in the Note Purchase Agreement but not otherwise.

     

    If
      an
      Event of Default, as defined in the Note Purchase Agreement, occurs and is
      continuing, the principal of this Note may be declared or otherwise become
      due
      and payable in the manner, at the price (including any applicable Make-Whole
      Amount) and with the effect provided in the Note Purchase
      Agreement.

     

    Payment
      of the principal of, and interest and Make-Whole Amount, if any, on this Note,
      and all other amounts due under the Note Purchase Agreement, is guaranteed
      pursuant to the terms of a Subsidiary Guaranty dated as of June 1, 2004 of
      certain Subsidiaries of the Company, as amended or supplemented from time to
      time.

     

    This
      Note
      shall be construed and enforced in accordance with, and the rights of the
      parties shall be governed by, the law of the State of Illinois 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.

     

    SYPRIS
      SOLUTIONS, INC.

     

     

    By:
      ____________________________     

    Name:
       

    Title:
      

    



    
      
        
          Exhibit
            A-2

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
          


        

      

    



    EXHIBIT
      B

    [FORM
      OF SERIES B SENIOR NOTE]

     

    SYPRIS
      SOLUTIONS, INC.

     

    7.45%
      Senior Note, Series B

    Due
      June
      30, 2011

     

    


     

    No.
      BR-[___]                                                             [Date]

     

    $[________]                                                          PPN:
      871655 B@4

     

    


    FOR
      VALUE RECEIVED,
      the
      undersigned, SYPRIS
      SOLUTIONS, INC.
      (herein
      called the “Company”), a corporation organized and existing under the laws of
      the State of Delaware, promises to pay to [___________],
      or
      registered assigns, the principal sum of [________________]
      Dollars ($[         
 ])
      on June
      30, 2011, with interest (computed on the basis of a 360-day year of twelve
      30
      day months) (a) on the unpaid balance thereof at the rate of (i) 5.35% per
      annum
      at all times prior to, but not including, April 6, 2007 and (ii) 7.45% per
      annum
      at all times on or after April 6, 2007 (in each case subject to clause (b)
      below), payable semiannually, on June 30 and December 30 in each year,
      commencing with the June 30 or December 30 next succeeding the date hereof,
      until the principal hereof shall have become due and payable, and (b)
to
      the
      extent permitted by law, on any overdue payment of interest and, during the
      continuance of an Event of Default, on such unpaid balance and on any overdue
      payment of any Make-Whole Amount
      (as
      defined in the Note Purchase Agreement referred to below), payable semiannually
      as aforesaid (or, at the option of the registered holder hereof, on demand),
      at
      a rate per annum from time to time equal to the greater of (i) 10.45% or (ii)
      3%
      over the rate of interest publicly announced by LaSalle Bank National
      Association from time to time in Chicago, Illinois as its “base” or “prime”
rate.

     

    Payments
      of principal of, interest on and any Make-Whole Amount with respect to this
      Note
      are to be made in lawful money of the United States of America at the principal
      office of LaSalle Bank National Association in Chicago, Illinois or at such
      other place as the Company shall have designated by written notice to the holder
      of this Note as provided in the Note Purchase Agreement referred to
      below.

     

    This
      Note
      is one of a series of Senior Notes (herein called the “Notes”) issued pursuant
      to a Note Purchase Agreement dated as of June 1, 2004 (as from time to time
      amended, the “Note Purchase Agreement”), between the Company and the respective
      Purchasers named therein and is entitled to the benefits thereof. Each holder
      of
      this Note will be deemed, by its acceptance hereof, (i) to have agreed to the
      confidentiality provisions set forth in Section 20 of the Note Purchase
      Agreement and (ii) to have made the representations and agreements set forth
      in
      Section 6 of the Note Purchase Agreement.

     

    This
      Note
      is a registered Note and, as provided in the Note Purchase Agreement, upon
      surrender of this Note for registration of transfer, duly endorsed, or
      accompanied by a written instrument of transfer duly executed, by the registered
      holder hereof or such holder’s

     

     

    
      
        
        

      

      
        Exhibit
          B-1

        
          

        

      

      
        
        
attorney
        duly authorized in writing, a new Note for a like principal amount will be
        issued to, and registered in the name of, the transferee. Prior to due
        presentment for registration of transfer, the Company may treat the person
        in
        whose name this Note is registered as the owner hereof for the purpose of
        receiving payment and for all other purposes, and the Company will not be
        affected by any notice to the contrary.

    

     

    This
      Note
      is subject to optional prepayment, in whole or from time to time in part, and
      is
      subject to mandatory prepayment, in each case at the times and on the terms
      specified in the Note Purchase Agreement but not otherwise.

     

    If
      an
      Event of Default, as defined in the Note Purchase Agreement, occurs and is
      continuing, the principal of this Note may be declared or otherwise become
      due
      and payable in the manner, at the price (including any applicable Make-Whole
      Amount) and with the effect provided in the Note Purchase
      Agreement.

     

    Payment
      of the principal of, and interest and Make-Whole Amount, if any, on this Note,
      and all other amounts due under the Note Purchase Agreement, is guaranteed
      pursuant to the terms of a Subsidiary Guaranty dated as of June 1, 2004 of
      certain Subsidiaries of the Company, as amended or supplemented from time to
      time.

     

    This
      Note
      shall be construed and enforced in accordance with, and the rights of the
      parties shall be governed by, the law of the State of Illinois 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.

     

    SYPRIS
      SOLUTIONS, INC.

     

     

    By:
      _______________________      

    Name:
       

    Title:
      

    



    
      
        
          Exhibit
            B-2

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
          


        

      

    



    EXHIBIT
      C

    [FORM
      OF SERIES C SENIOR NOTE]

     

    SYPRIS
      SOLUTIONS, INC.

     

    7.55%
      Senior Note, Series C

    Due
      June
      30, 2012

     

    


     

    No.
      CR-[___]                                                                 [Date]

     

    $[________]                                                         PPN:
      871655 B#2

    


    FOR
      VALUE RECEIVED,
      the
      undersigned, SYPRIS
      SOLUTIONS, INC.
      (herein
      called the “Company”), a corporation organized and existing under the laws of
      the State of Delaware, promises to pay to [___________],
      or
      registered assigns, the principal sum of [________________]
      Dollars
      ($[               
])
      on June
      30, 2012, with interest (computed on the basis of a 360-day year of twelve
      30-day months) (a) on the unpaid balance thereof at the rate of (i) 5.78% per
      annum at all times prior to, but not including, April 6, 2007 and (ii) 7.55%
      per
      annum at all times on or after April 6, 2007 (in each case subject to clause
      (b)
      below), payable semiannually, on June 30 and December 30 in each year,
      commencing with the June 30 or December 30 next succeeding the date hereof
      until
      the principal hereof shall have become due and payable, and (b) to
      the
      extent permitted by law, on any overdue payment of interest and, during the
      continuance of an Event of Default, on such unpaid balance and on any overdue
      payment of any Make-Whole Amount
      (as
      defined in the Note Purchase Agreement referred to below), payable semiannually
      as aforesaid (or, at the option of the registered holder hereof, on demand),
      at
      a rate per annum from time to time equal to the greater of (i) 10.55% or (ii)
      3%
      over the rate of interest publicly announced by LaSalle Bank National
      Association from time to time in Chicago, Illinois as its “base” or “prime”
rate.

     

    Payments
      of principal of, interest on and any Make-Whole Amount with respect to this
      Note
      are to be made in lawful money of the United States of America at the principal
      office of LaSalle Bank National Association in Chicago, Illinois or at such
      other place as the Company shall have designated by written notice to the holder
      of this Note as provided in the Note Purchase Agreement referred to
      below.

     

    This
      Note
      is one of a series of Senior Notes (herein called the “Notes”) issued pursuant
      to a Note Purchase Agreement dated as of June 1, 2004 (as from time to time
      amended, the “Note Purchase Agreement”), between the Company and the respective
      Purchasers named therein and is entitled to the benefits thereof. Each holder
      of
      this Note will be deemed, by its acceptance hereof, (i) to have agreed to the
      confidentiality provisions set forth in Section 20 of the Note Purchase
      Agreement and (ii) to have made the representations and agreements set forth
      in
      Section 6 of the Note Purchase Agreement.

     

    This
      Note
      is a registered Note and, as provided in the Note Purchase Agreement, upon
      surrender of this Note for registration of transfer, duly endorsed, or
      accompanied by a written instrument of transfer duly executed, by the registered
      holder hereof or such holder’s

     

     

    
      
        
        

      

      
        Exhibit
          C-1

        
          

        

      

      
        
        
attorney
        duly authorized in writing, a new Note for a like principal amount will be
        issued to, and registered in the name of, the transferee. Prior to due
        presentment for registration of transfer, the Company may treat the person
        in
        whose name this Note is registered as the owner hereof for the purpose of
        receiving payment and for all other purposes, and the Company will not be
        affected by any notice to the contrary.

    

     

    This
      Note
      is subject to optional prepayment, in whole or from time to time in part, and
      is
      subject to mandatory prepayment, in each case at the times and on the terms
      specified in the Note Purchase Agreement but not otherwise.

     

    If
      an
      Event of Default, as defined in the Note Purchase Agreement, occurs and is
      continuing, the principal of this Note may be declared or otherwise become
      due
      and payable in the manner, at the price (including any applicable Make-Whole
      Amount) and with the effect provided in the Note Purchase
      Agreement:

     

    Payment
      of the principal of, and interest and Make-Whole Amount, if any, on this Note,
      and all other amounts due under the Note Purchase Agreement, is guaranteed
      pursuant to the terms of a Subsidiary Guaranty dated as of June 1, 2004 of
      certain Subsidiaries of the Company, as amended or supplemented from time to
      time.

     

    This
      Note
      shall be construed and enforced in accordance with, and the rights of the
      parties shall be governed by, the law of the State of Illinois 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.

     

    SYPRIS
      SOLUTIONS, INC.

     

     

    By:
      ____________________________    

    Name:
       

    Title:
      

    


    



    
      
        
          Exhibit
            C-2

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
          


        

      

    



    EXHIBIT
      D

    


    AMENDMENTS
      TO EXISTING NOTE AGREEMENT

    


    
      	1.  	
              Section
                1 of the Existing Note Agreement is hereby amended by replacing the
                parenthetical expression “(the “Subsidiary Guaranty”)” in the third to the
                last line thereof with “(as amended, restated or otherwise modified from
                time to time, the “Subsidiary
                Guaranty”)”.

            


    

     

    
      	2.  	
              Section
                7.1(a) of the Existing Note Agreement is hereby amended by replacing
                the
                first six lines of such section with the
                following:

            


    

     

    “(a)     Quarterly
      Statements
      - as
      soon as available, and in any event within forty-five (45) days after the end
      of
      each quarterly fiscal period in each fiscal year of the Company (other than
      the
      last quarterly fiscal period of each such fiscal year, duplicate copies of,”


     

    
      	3.  	
              Section
                7.1(b) of the Existing Note Agreement is hereby amended by replacing
                the
                first four lines of such section with the
                following:

            


    

     

    “(b)     Annual
      Statements
      - as
      soon as available, and in any event within ninety (90) days after the end of
      each fiscal year of the Company, duplicate copies of,” 

     

    
      	4.  	
              Section
                7.1(e) of the Existing Note Agreement is hereby amended by deleting
                the
                “and” appearing at the end of such Section, Section 7.1(f) of the Existing
                Note Agreement is hereby amended by relettering such section as Section
                7.1(h), and new Sections 7.1(f) and (g) are hereby added to Section
                7.1
                immediately following existing Section 7.1(e) to read in their entireties
                as follows:

            


    

     

    “(f)     Projections;
      Market Overview
      - (i)
      (A) in draft form, on or before November 30 of each fiscal year of the Company,
      and (B) in the form reviewed and approved by the Company’s Board of Directors,
      before the last day of each fiscal year of the Company, a consolidated operating
      budget for the Company and its Subsidiaries for the next succeeding Fiscal
      Year
      (the “Fiscal
      Year Budget”),
      with
      detail in a quarterly format and any other data as requested by the Required
      Holders, and (ii) together with the quarterly financial statements required
      to
      be delivered under Section 7.1(a), (A) a comparative condensed consolidated
      balance sheet, income statement and cash flow statement of the Company and
      its
      Subsidiaries for fiscal quarter then most recently ended, comparing the actual
      results for the portion of the fiscal year then ended to the projected amounts
      for such period set forth in the Fiscal Year Budget, (B) an update to the most
      recently delivered Fiscal Year Budget, reflecting any necessary updates and
      revisions, together with an explanation of any changes from such Fiscal Year
      Budget, and (C) a market overview reflecting then current and projected
      conditions in the principal markets of the Company and its Subsidiaries, in
      each
      case together with a certificate of a Senior Financial Officer of the Company
      stating that such projections have been prepared by the Company on the basis
      of
      assumptions stated therein which the Company reasonably believed were reasonable
      when made in light of the historical performance of the

     

     

    
      
        
        

      

      
        Exhibit
          D-1

        
          

        

      

      
        
        
 Company
        and its Subsidiaries
        and reasonably foreseeable business conditions and that such projections
        have
        been approved by the board of directors of the Company;” 

    

     

    “(g)     Monthly
      Statements
      -- as
      soon as available, and in any event within twenty-five (25) days after the
      end
      of each monthly fiscal period in each fiscal year of the Company (other than
      the
      last monthly fiscal period of any fiscal quarter of the Company), duplicate
      copies of,

     

    (i)     a
      condensed consolidated balance sheet of the Company and its Subsidiaries as
      at
      the end of such month,

     

    (ii)     a
      condensed consolidated statement of income of the Company and its Subsidiaries
      for such month and (in the case of each monthly fiscal period other than the
      last such period in each fiscal year) for the portion of the fiscal year ending
      with such month, and

     

    (iii)     condensed
      consolidated statements of cash flows of the Company and its Subsidiaries for
      such month and (in the case of each monthly fiscal period other than the last
      such period in each fiscal year) for the portion of the fiscal year ending
      with
      such month,

     

    setting
      forth in each case in comparative form the figures for the corresponding periods
      in the previous fiscal year, all in reasonable detail, prepared in accordance
      with GAAP applicable to monthly financial statements generally, and certified
      by
      a Senior Financial Officer as fairly presenting, in all material respects,
      the
      financial position of the companies being reported on and their results of
      operations and cash flows, subject to changes resulting from year-end
      adjustments; and”

     

    
      	5.  	
              Section
                7.2 of the Existing Note Agreement is hereby amended and restated
                in its
                entirety as follows:

            


    

     

    “7.2.     Officer’s
      Certificate.

     

    Each
      set
      of financial statements delivered to a holder of Notes pursuant to Section
      7.1(a), Section 7.1(b) or Section 7.1(g) shall be accompanied by a certificate
      of a Senior Financial Officer setting forth:

     

    (a)     Covenant
      Compliance
      -- the
      information (including detailed calculations) required in order to establish
      whether the Company was in compliance with the requirements of Section 10.1
      through Section 10.8, inclusive, during the monthly, quarterly or annual period
      covered by the statements then being furnished (including with respect to each
      such Section, where applicable, the calculations of the maximum or minimum
      amount, ratio or percentage, as the case may be, permissible under the terms
      of
      such Sections, and the calculation of the amount, ratio or percentage then
      in
      existence); and

     

    (b)     Event
      of Default
      -- a
      statement that such officer has reviewed the relevant terms hereof and has
      made,
      or caused to be made, under his or her supervision, a review

     

     

    
      
        
        

      

      
        Exhibit
          D-2

        
          

        

      

      
        
        
 of
        the transactions and
        conditions of the Company and its Subsidiaries from the beginning of the
        monthly, quarterly or annual period covered by the statements then being
        furnished to the date of the certificate and that such review shall not have
        disclosed the existence during such period of any condition or event that
        constitutes a Default or an Event of Default or, if any such condition or
        event
        existed or exists (including any such event or condition resulting from the
        failure of the Company or any Subsidiary to comply with any Environmental
        Law),
        specifying the nature and period of existence thereof and what action the
        Company shall have taken or proposes to take with respect
        thereto.”

    

     

     

    
      	6.  	
              A
                new Section 7.4 is hereby added to the Existing Note Agreement immediately
                following Section 7.3 to read as
                follows:

            


    

     

    “7.4.     Field
      Audits and Inventory Spot Checks.

     

    The
      Company will, and will cause its Subsidiaries to, permit the Collateral Agent
      to
      conduct Field Audits and Inventory Spot Checks on the terms and conditions
      set
      forth in the Credit Agreement.”

     

    
      	7.  	
              Section
                8.1 of the Existing Note Agreement is hereby amended and restated
                in its
                entirety as follows:

            


    

     

    “8.1.     Mandatory
      Prepayments.

     

    (a)     No
      Scheduled Prepayments.
      No
      regularly scheduled prepayments are due on the Notes prior to their stated
      maturity.

     

    (b)     Prepayment
      from Proceeds of Dana Payments.
      Within
      (1) Business Day of the receipt by the Company or any Subsidiary of any Dana
      Payment, the Company shall give written notice thereof to each holder of Notes,
      which notice shall set forth the amount of such Dana Payment and the Creditors’
Share thereof and shall specify a date (not more than 15 Business Days following
      the receipt of such Dana Payment) on which the Company will make a prepayment
      in
      respect of the Notes in accordance with the terms of this Section 8.1(b). On
      such specified prepayment date (the “Specified
      Prepayment Date”),
      the
      Company shall pay to each holder of a Note, and there shall become due and
      payable, an aggregate principal amount of the Notes of such holder (together
      with interest accrued on such Notes to the Specified Prepayment Date and the
      Make-Whole Amount, if any, on the principal amount so prepaid) equal to such
      holder’s Ratable Portion of such Dana Payment.

    


    For
      purposes of this clause (b):

    


    “Ratable
      Portion”
shall
      mean, with respect to any holder of Notes and a Dana Payment, a principal amount
      of the Notes of such holder equal to the result of:

    


    (i)     until
      such time as the Commitment Reduction Condition has been met, (A) the Creditors’
Share of such Dana Payment, multiplied
      by
      (B) the
      result

     

     

    
      
        
        

      

      
        Exhibit
          D-3

        
          

        

      

      
        
        

      

    

     

    of
      (I)
      the aggregate principal amount of the Notes of such holder as of the date of
      receipt by the Company or such Subsidiary of such Dana Payment, divided
      by
      (II) the
      sum of (x) the aggregate then outstanding principal amount of the
      Notes,
      plus
      (y) the
      then outstanding Commitments of the Lenders under the Credit Agreement;
      and

    


    (ii)     once
      the
      Commitment Reduction Condition has been met and thereafter, 

    


    (A)  (I)    
the
      Creditors’ Share of such Dana Payment, multiplied
      by (II)
      the
      result of (1) the aggregate principal amount of the Notes of such holder as
      of
      the date of receipt by the Company or such Subsidiary of such Dana Payment,
      divided
      by
      (2) the
      sum of (x) the aggregate then outstanding principal amount of the Notes,
plus
      (y) the
      average daily balance of the Loans over the period of 90 days immediately
      preceding such date; plus

    


    (B)     such
      holder’s pro rata share (determined in accordance with Section 8.4) of any
      remaining amount of the Creditors’ Share of such Dana Payment after making the
      payments required under clause (ii)(A) of this definition and the corresponding
      clause (ii)(A) of such definition in Section 2.4D of the Credit
      Agreement.

    


    “Commitments”
shall
      mean, in respect of the Lenders under the Credit Agreement, the amount of the
      “Revolving Loan Commitments” as such term is defined therein (as in effect on
      the date hereof) provided such amount shall not include any credit availability
      which has not been used by the Company to the extent the Company’s ability to
      use such credit availability has been terminated as a result of an Event of
      Default (as defined in the Credit Agreement) or other term or condition relating
      to the Company’s credit condition which, in either case, exists as of the date
      of determination.

    


    “Commitment
      Reduction Condition”
shall
      mean, at any time that the Company or any Subsidiary receives any Dana Payment,
      the condition that, after giving effect to all or any portion of the payments
      that would otherwise be required under this Section 8.1(b) or Section 2.4D
      of
      the Credit Agreement in respect of such Dana Payment, the Commitments have
      been
      reduced to $25,000,000 or less.

     

    (c)     Notice
      and Certification in Connection with Dana Payments.
      On or
      prior to the 10th
      Business
      Day prior to such scheduled prepayment date, the Company shall send a written
      notice to each holder of Notes which shall specify the aggregate principal
      amount of the Notes of each series to be prepaid on such date, the principal
      amount of each Note of such series held by such holder to be prepaid (determined
      in accordance with Section 8.4), the interest to be paid on the prepayment
      date
      with respect to such principal amount being prepaid, and the principal amount
      of
      the loans held by each Lender being prepaid under Section 

     

     

    
      
        
        

      

      
        Exhibit
          D-4

        
          

        

      

      
        
        

      

    

     

    2.4D
      of
      the Credit Agreement in connection herewith, and shall be accompanied by a
      certificate of a Senior Financial Officer as to the estimated Make-Whole Amount
      due in connection with such prepayment (calculated as if the date of such notice
      were the date of the prepayment), setting forth the details of such computation.
      Two Business Days prior to such prepayment, the Company shall deliver to each
      holder of Notes a certificate of a Senior Financial Officer specifying the
      calculation of such Make-Whole Amount as of the specified prepayment
      date.”

    


    
      	8.  	
              Section
                8.7 of the Existing Note Agreement is hereby amended by deleting
                the
                references to “Section 8.2” in the definitions of “Called Principal” and
                “Settlement Date” therein and replacing them with references to “Section
                8.1(b) or Section 8.2”, and by amending and restating the definition of
                “Remaining Schedule Payments” set forth therein to read in its entirety as
                follows:

            


    

     

    ““Remaining
      Scheduled Payments” means,
      with respect to the Called Principal of any Note, all payments of such Called
      Principal (determined as if the maturity date with respect to the Series C
      Notes
      were June 30, 2014) and interest thereon (determined as though the per annum
      rates in effect with respect to the Notes were the rates in effect immediately
      prior to the effectiveness of the Third Amendment) that would be due after
      the
      Settlement Date with respect to such Called Principal if no payment of such
      Called Principal were made prior to its scheduled due date, provided that if
      such Settlement Date is not a date on which interest payments are due to be
      made
      under the terms of the Notes, then the amount of the next succeeding scheduled
      interest payment will be reduced by the amount of interest accrued (at the
      per
      annum rates noted above) to such Settlement Date and required to be paid on
      such
      Settlement Date pursuant to Section 8.1(b), 8.2 or 12.1.”

     

    
      	9.  	
              Section
                9.2 of the Existing Note Agreement is hereby amended and restated
                in its
                entirety to read as follows:

            


    

     

    “9.2.     Insurance.

     

    The
      Company will, and will cause each Subsidiary to, maintain, with financially
      sound and reputable insurers, insurance with respect to their respective
      properties and businesses against such casualties and contingencies, of such
      types, on such terms and in such amounts (including deductibles, co-insurance
      and self-insurance, if adequate reserves are maintained with respect thereto)
      as
      is customary in the case of entities of established reputations engaged in
      the
      same or a similar business and similarly situated and as is required under
      the
      terms of the Security Documents.”

     

    
      	10.  	
              Section
                9.3 of the Existing Note Agreement is hereby amended and restated
                in its
                entirety to read as follows:

            


    

     

    “9.3.     Maintenance
      of Properties.

     

     

    
      
        
        

      

      
        Exhibit
          D-5

        
          

        

      

      
        
        

      

    

     

    The
      Company will and will cause each of its Subsidiaries to maintain and keep,
      or
      cause to be maintained and kept, their respective properties in good repair,
      working order and condition (other than ordinary wear and tear) and otherwise
      in
      accordance with the terms of the Security Documents, so that the business
      carried on in connection therewith may be properly conducted at all times,
      provided that this Section shall not prevent the Company or any Subsidiary
      from
      discontinuing the operation and the maintenance of any of its properties if
      such
      discontinuance is desirable in the conduct of its business and the Company
      has
      concluded that such discontinuance would not, individually or in the aggregate,
      have a materially adverse effect on the business, operations, affairs, financial
      condition, properties or assets of the Company and its Subsidiaries taken as
      a
      whole.”

     

    
      	11.  	
              Section
                9.6 of the Existing Note Agreement is hereby amended and restated
                in its
                entirety to read as follows:

            


    

     

    “Section
      9.6.     Pari
      Passu Ranking. 

     

    The
      obligations of the Company with respect to the Notes and the obligations of
      each
      Subsidiary Guarantor under the Subsidiary Guaranty are, and will at all times
      constitute, direct secured obligations of the Company or such Subsidiary
      Guarantor, as the case may be, ranking pari
      passu
      (subject
      to Section 9 of the Collateral Sharing Agreement) as to claims against the
      assets of the Company or such Subsidiary Guarantors with the obligations of
      the
      Company or such Subsidiary Guarantors set forth in the Credit
      Agreement.

     

    
      	12.  	
              A
                new Section 9.7 is hereby added to the Existing Note Agreement immediately
                following Section 9.6 thereof to read in its entirety as
                follows:

            


    

     

    “Section
      9.7.     Most
      Favored Lender Covenant. 

     

    If
      at any
      time after the Third Amendment Effective Date the Credit Agreement (whether
      by
      amendment, restatement, replacement or otherwise) includes covenants (whether
      affirmative or negative, and whether maintenance or incurrence) or defaults
      or
      events of default that are more restrictive than those contained in this
      Agreement or are not provided for in this Agreement (each such covenant and
      default or events of default herein referred to as “More
      Favorable Provision”),
      then
      the Company shall promptly, and in any event within 5 Business Days of the
      inclusion of such covenants or defaults, so advise and notify each holder of
      a
      Note in writing. Such writing shall include a verbatim statement of such More
      Favorable Provision. Thereupon, unless waived in writing by the Required Holders
      within 5 Business Days of the holders’ receipt of such notice, such More
      Favorable Provision (together with any related defined terms) shall be deemed
      incorporated by reference in this Agreement as if set forth fully herein,
mutatis
      mutandis,
      effective as of the date when such More Favorable Provisions became effective
      under such other agreement, instrument or document (each such More Favorable
      Provision as incorporated herein is herein referred to as an

     

     

    
      
        
        

      

      
        Exhibit
          D-6

        
          

        

      

      
        
        
 “Incorporated
        Provision”)
        and no
        such Incorporated Provision may thereafter be waived, amended or modified
        under
        this Agreement without the prior written consent of the Required Holders;
        each
        such Incorporated Provision that is a covenant (in contrast to a default
        or
        event of default) shall be deemed incorporated by reference into Section
        11(c)
        of the Agreement as if fully set forth therein. Thereafter, upon the request
        of
        the Required Holders, the Company and the Required Holders shall enter into
        an
        additional agreement or an amendment to this Agreement (as the Required Holders
        may request), evidencing the incorporation of such Incorporated Provision
        substantially as provided for in the Credit Agreement. Each Incorporated
        Provision shall remain unchanged herein notwithstanding any subsequent waiver,
        amendment or other modification of the More Favorable Provision giving rise
        to
        such Incorporated Provision (unless making such provision more restrictive
        as
        determined by the Required Holders in their sole discretion). In furtherance
        of
        the foregoing and for the avoidance of doubt, any incorporation by reference
        into this Agreement of a More Favorable Provision shall have no impact on
        the
        continuing effectiveness of any similar financial covenant contained in this
        Agreement at the effective time of such incorporation by
        reference.”

    

    


    
      	13.  	
              Section
                10 of Existing Note Agreement is hereby amended and restated in its
                entirety to read as follows:

            


    

     

    “10.1     Consolidated
      Net Debt; Fixed Charge Coverage Ratio; Capital
      Expenditures.

    


    (a)     Consolidated
      Net Debt.
      The
      Company will not, at the end of any period of four complete consecutive fiscal
      quarters of the Company ending on a date set forth in the table below, permit
      the ratio of Consolidated Net Debt to Consolidated EBITDA for the period of
      four
      complete fiscal quarters of the Company ending on such date to be greater than
      the ratio set forth opposite such date:

    

       

    

    

      
        	
                Date

                 

              	
                Ratio

                 

              
	
                December
                  31, 2006

                 

              	
                3.00
                  to 1.00

                 

              
	
                April
                  1, 2007

                 

              	
                3.00
                  to 1.00

                 

              
	
                July
                  1, 2007

                 

              	
                4.00
                  to 1.00

                 

              
	
                September
                  30, 2007

                 

              	
                4.00
                  to 1.00

                 

              
	
                December
                  31, 2007 

                 

              	
                3.25
                  to 1.00

                 

              
	
                the
                  last day of each fiscal quarter of the Company ending
                  thereafter

                 

              	
                3.00
                  to 1.00

                 

              


      

    

     

     

     

    
      
        
        

      

      
        Exhibit
          D-7

        
          

        

      

      
        
        

      

    

    


    (b)     Fixed
      Charge Coverage Ratio.
      The
      Company will not, at the end of any period of four complete consecutive fiscal
      quarters of the Company ending on a date set forth in the table below, permit
      the Fixed Charge Coverage Ratio to be less than the ratio set forth opposite
      such date:

     

    

      
        	
                Date

                 

              	
                Ratio

                 

              
	
                December
                  31, 2006

                 

              	
                3.00
                  to 1.00

                 

              
	
                April
                  1, 2007

                 

              	
                3.00
                  to 1.00

                 

              
	
                July
                  1, 2007

                 

              	
                2.50
                  to 1.00

                 

              
	
                September
                  30, 2007

                 

              	
                2.25
                  to 1.00

                 

              
	
                December
                  31, 2007 

                 

              	
                2.50
                  to 1.00

                 

              
	
                the
                  last day of each fiscal quarter of the Company ending
                  thereafter

                 

              	
                3.00
                  to 1.00

                 

              


      

    

     

    
 

    (c)     Capital
      Expenditures.
      The
      Company will not, and will not permit any Subsidiary to, make Capital
      Expenditures in an amount exceeding, on a consolidated basis, (i) $30,000,000
      for the 2006 fiscal year of the Company, (ii) $25,000,000 for the 2007 fiscal
      year of the Company, (iii) $30,000,000 for the 2008 fiscal year of the Company,
      (iv) $30,000,000 for the 2009 fiscal year of the Company and (v) $40,000,000
      for
      any fiscal year of the Company thereafter.

     

    (d)     Limitation
      on Rental Expense.
      The
      Company will not at any time permit Operating Lease Rentals for any fiscal
      year
      of the Company to exceed $10,000,000. 

    


    (e)     Fiscal
      Quarter End Dates.
      The
      Company will not cause or permit any of its fiscal quarters ending in fiscal
      year 2007 to end on any date other than the ending date with respect to such
      fiscal quarter set forth in Sections 10.1(a) and 10.1(b) above.

     

    10.2.    Adjusted
      Consolidated Net Worth.

     

    The
      Company will not permit Adjusted Consolidated Net Worth as of the last day
      of
      any fiscal quarter to be less than the sum of (i) $188,190,000, plus
      (ii) 25%
      of Consolidated Net Income (but only if a positive number) for each fiscal
      quarter ending after December 31, 2006, plus
      (iii)
      100% of equity raised or contributed after such date.

    


    10.3    Indebtedness,
      Guaranties, etc. 

     

     

    
      
        
        

      

      
        Exhibit
          D-8

        
          

        

      

      
        
        

      

    

    


    The
      Company will not, and will not permit any Subsidiary to, without the prior
      written consent of the Required Holders, directly or indirectly, create, incur,
      assume, guarantee, agree to purchase or repurchase or provide funds in respect
      of, or otherwise become liable with respect to any Debt other than:

    


    (a)     Permitted
      Senior Secured Debt; 

    


    (b)     obligations
      to the Lenders or their Affiliates under credit card programs in an aggregate
      amount for all such Persons not in excess of five million dollars ($5,000,000);
      

    


    (c)     Debt,
      other than Debt permitted under clauses (a) and (b) of this Section 10.3,
      whether secured or unsecured, in an aggregate amount not to exceed five million
      dollars ($5,000,000); and

    


    (d)     Any
      Guaranty by the Company or any Subsidiary Guarantor of Debt incurred by the
      Company or any Subsidiary Guarantor that is permitted under clauses (a), (b)
      or
      (c) of this Section 10.3.

    


    10.4    Liens.

    


    The
      Company will not, and will not permit any Subsidiary to, permit to exist,
      create, assume or incur, directly or indirectly, any Lien on its properties
      or
      assets (including, without limitation, any Lien on real property or improvements
      thereon), whether now owned or hereafter acquired, except:

    


    (a)     Liens
      on
      property and Capital Leases that are disclosed on Schedule 3.14 to the Third
      Amendment;

    


    (b)     Liens
      in
      favor of the Collateral Agent for the equal and ratable benefit of the Lenders
      and the holders of Notes securing Permitted Senior Secured Debt;

    


    (c)     Liens
      (other than Liens securing real property or improvements thereon) securing
      any
      other Debt permitted under Section 10.3(c);

    


    (d)     Liens
      on
      property acquired by the Company or any Subsidiary Guarantor in a Permitted
      Acquisition; provided
      that
      (i) such
      Liens were not incurred in contemplation of such Permitted Acquisition, (ii)
      such Liens do not extend to additional property of the Company or any Subsidiary
      (other than property that is an improvement to or is acquired for specific
      use
      in connection with the subject property) and (iii) the aggregate principal
      amount of Debt secured by each such Lien does not exceed the lesser of (y)
      the
      cost of acquisition or (z) the fair market value of the property subject thereto
      (as determined in good faith by one or more

     

     

    
      
        
        

      

      
        Exhibit
          D-9

        
          

        

      

      
        
        
 officers
        of the Company to whom authority to enter into the transaction has been
        delegated by the board of directors);

    

    


    (e)     Liens
      for
      taxes, assessments or governmental charges not yet due and payable or the
      payment of which is not at the time required under Section 9.4;

    


    (f)     Liens
      incurred or deposits made in the ordinary course of business in connection
      with
      worker's compensation, unemployment insurance and other types of social security
      or to secure the performance of tenders, statutory obligations, surety and
      appeal bonds, bids, leases, performance and return of money bonds and other
      similar obligations (exclusive of obligations for the payment of borrowed money)
      for sums not yet due or being contested in good faith and by appropriate
      proceedings promptly initiated and diligently conducted, if such reserve or
      other appropriate provision, if any, as shall be required by GAAP shall have
      been made therefor;

    


    (g)     Liens
      incidental to the conduct of business or the ownership of properties and assets
      (including landlords’, lessors’, carriers’, operators’, warehousemen’s,
      mechanics’, materialmen’s and other similar Liens) incurred in the ordinary
      course of business and not in connection with the borrowing of
      money;

    


    (h)     encumbrances
      in the nature of leases, subleases, zoning restrictions, easements, rights
      of
      way, minor survey exceptions and other rights and restrictions of record on
      the
      use of real property and defects in title arising or incurred in the ordinary
      course of business, which, individually and in the aggregate, do not materially
      detract from the value of such property or assets subject thereto or materially
      impair the use of the property or assets subject thereto by the Company or
      such
      Subsidiary; and

    (i)     Liens
      resulting from extensions, renewals or replacements of Liens permitted by
      paragraphs (a) and (d), provided that (i) there is no increase in the principal
      amount or decrease in maturity of the Debt secured thereby at the time of such
      extension, renewal or replacement, (ii) any new Lien attaches only to the same
      property theretofore subject to such earlier Lien and (iii) immediately after
      such extension, renewal or replacement no Default or Event of Default would
      exist.

     

    10.5.    Sale
      of Assets.

     

    The
      Company will not, and will not permit any Subsidiary to, sell, lease, transfer
      or otherwise dispose of, including by way of merger, any property, including
      capital stock of Subsidiaries (collectively a “Disposition”),
      in
      one or a series of transactions, to any Person, other than:

     

     

    
      
        
        

      

      
        Exhibit
          D-10

        
          

        

      

      
        
        

      

    

     

    (a)     Dispositions
      of inventory in the ordinary course of business;

     

    (b)     Dispositions
      by the Company to any Subsidiary Guarantor (other than Sypris Mexican Holdings,
      LLC) or by any Subsidiary to the Company or a Subsidiary Guarantor (other than
      Sypris Mexican Holdings, LLC); or

     

    (c)     Dispositions
      by the Company or a Subsidiary Guarantor to any Subsidiary that is not a
      Subsidiary Guarantor; provided
      that (i)
      the aggregate Disposition Value of all property so disposed of pursuant to
      this
      Section 10.5(c) shall not exceed (A) $10,000,000 in the aggregate for all such
      Dispositions in any fiscal year of the Company or (B) $18,000,000 in the
      aggregate for all such Dispositions occurring on and after the Third Amendment
      Effective Date, and (ii) after giving effect to such transaction, no Default
      or
      Event of Default shall exist; and

     

    (d)     any
      other
      Disposition so long as the aggregate Disposition Value of all property so
      disposed of does not exceed $2,000,000 in any fiscal year of the Company and
      after giving effect to such transaction, no Default or Event of Default shall
      exist.

    


    10.6    Mergers;
      Acquisitions; Liquidations. 

     

    Without
      the prior written consent of the Required Holders, the Company and its
      Subsidiaries shall not:

     

    (a)     be
      a
      party to any consolidation, reorganization (including without limitation those
      types referred to in Section 368 of the United States Internal Revenue Code
      of
      1986, as amended), recapitalization, “stock-swap” or merger; or

     

    (b)     liquidate
      or dissolve or take any action with a view toward liquidation or dissolution;
      or

     

    (c)     purchase
      all or a substantial part of the Capital Stock or property of any Person or
      business enterprise if (i) such purchase involves consideration, including
      assumption of Debt, in excess of Five Million Dollars ($5,000,000) for any
      single transaction, or (ii) such purchase, when combined with other such
      transactions occurring in the same fiscal year of the Company, involves
      consideration, including assumption of liabilities, in excess of Ten Million
      Dollars ($10,000,000) in the aggregate; provided that, at least five (5)
      Business Days prior to making or closing such acquisition, the Company has
      delivered a certificate in the form of Exhibit
      G
      to the
      Third Amendment evidencing such compliance. 

     

    An
      acquisition that can be accomplished without violating Section 10.6(c) or that
      has been consented to in writing by the Required Holders pursuant to this
      Section 10.6 shall be known as a “Permitted
      Acquisition.”

     

     

    
      
        
        

      

      
        Exhibit
          D-11

        
          

        

      

      
        
        

      

    

     

    10.7     Restricted
      Payments.

     

    The
      Company will not, and will not permit any of its Subsidiaries to, declare or
      make, or incur any liability to declare or make, any Restricted Payments except
      that the Company may pay dividends on its common stock in an aggregate amount
      not to exceed (i) $0.18 per share (subject to customary adjustment based on
      stock dividends, stock splits, recapitalizations or similar events) in any
      fiscal year of the Company, and (ii) $0.045 per share (subject to customary
      adjustment based on stock dividends, stock splits, recapitalizations or similar
      events) in any fiscal quarter of the Company, provided
      that no
      Default or Event of Default shall exist immediately before and immediately
      after
      giving effect to such dividend.

     

    10.8.    Subsidiary
      Guaranty and Security Documents. 

     

    The
      Company will cause each existing Subsidiary that is not a Subsidiary Guarantor
      on the Third Amendment Effective Date (other than the Mexican Subsidiaries
      the
      Capital Stock of which is pledged under the Pledge Agreement), and will cause
      each Person which thereafter becomes a Subsidiary, to (subject to clause (c)
      below) become a party to the Subsidiary Guaranty and deliver to each of the
      holders of Notes:

     

    (a)     subject
      to clause (c) below, a copy of an executed joinder to the Subsidiary
      Guaranty;

     

    (b)     such
      Security Documents, certificates, lien searches, organizational, other charter
      documents and resolutions and any other agreements, certificates, documents
      and
      instruments reasonably required by the Required Holders, each in form and
      substance satisfactory to the Required Holders and (in the case of the Security
      Documents) the Collateral Agent (and will deliver to the Collateral Agent all
      original instruments payable to such Subsidiary with any endorsements thereto
      required by the Collateral Agent or the Required Holders),

     

    (c)     if
      the
      Company or any Subsidiary creates or acquires a Subsidiary that is a corporation
      or limited liability company not organized under the laws of the United States
      or any state or territory thereof (a “Foreign
      Entity”)
      and
      the Company advises the holders of Notes in writing that it believes that
      requiring such Foreign Entity to execute the Subsidiary Guaranty would cause
      adverse tax results to the Company under the Code, the Company shall, or shall
      cause the applicable parent Subsidiary of such Foreign Entity to, as promptly
      as
      possible (but in any event within sixty (60) days following the creation or
      acquisition thereof) (i) enter into an agreement pledging sixty-five percent
      (65%) of the Capital Stock of such Subsidiary, as applicable (such Subsidiary
      being referred to herein as a “Foreign
      Entity Subsidiary”),
      and
      (ii) deliver and cause each such parent Subsidiary and Foreign Entity Subsidiary
      to deliver to the Collateral Agent stock certificates and stock powers (to
      the
      extent applicable) or limited liability company certificates (to the extent
      applicable) with respect to the Foreign Entity Subsidiary and, if such
      conditions are met, such Foreign Entity Subsidiary will

     

     

    
      
        
        

      

      
        Exhibit
          D-12

        
          

        

      

      
        
        
not
        be
        required to join the Subsidiary Guaranty; provided,
        however,
        that in
        the event that more than one Subsidiary within a commonly controlled group
        of
        Subsidiaries constitutes a Foreign Entity Subsidiary required to be pledged
        hereunder, then only the Capital Stock of the “parent” or “controlling”
Subsidiary shall be required to be pledged hereunder;

    

     

    (d)     a
      certificate signed by a Responsible Officer confirming the accuracy of the
      representations and warranties in Sections 5.2, 5.6, 5.7 and 5.19, with respect
      to such Subsidiary and the documents delivered pursuant to clauses (a), (b)
      and
      (c) above, as applicable; and

     

    (e)     an
      opinion of counsel reasonably satisfactory to the Required Holders addressed
      to
      each holder of Notes with respect to such Subsidiary and the documents and
      agreements delivered pursuant hereto and addressing the matters addressed in
      the
      legal opinion delivered to the holders of Notes on the Third Amendment Effective
      Date and such other matters as are reasonably required by the Required
      Holders.

     

    10.9.    
Limitations
      on Investments, Loans and Advances. 

    


    The
      Company shall not, and shall not permit any of its Subsidiaries to, make or
      permit to exist any investment in, or make, accrue or permit to exist loans
      or
      advances of money (any such investment, loan or advance an “Investment”),
      to
      any Person, through the direct or indirect lending of money, holding of
      securities or otherwise, except for: 

     

    (a)      Investments
      in the Company or any Subsidiary Guarantor; 

     

    (b)     Investments
      in Subsidiaries with operations outside the United States that have been made
      prior to the Third Amendment Effective Date;

     

    (c)      Investments
      (including Investments constituting Debt) by the Company or a Subsidiary
      Guarantor in Subsidiaries with operations outside the United States that are
      made after the Third Amendment Effective Date, so long as the aggregate amount
      of all such Investments, together with the aggregate net book value of the
      assets transferred from the Company or any Subsidiary Guarantor to Subsidiaries
      with operations outside the United States to the extent permitted by Section
      10.5(c) hereof, does not exceed $30,000,000; 

     

    (d)     provided
      no Event of Default exists and is continuing, (i) the Company may make
      Investments subject to Control Agreements favor of the Collateral Agent for
      the
      benefit of Lenders and holders of Notes or otherwise subject to a perfected
      security interest in favor of the Collateral Agent for the benefit of the
      Lenders and the holders of Notes, in (A) marketable direct obligations issued
      or
      unconditionally guaranteed by the United States of America or any agency thereof
      maturing within one year from the date of acquisition thereof, (B) commercial
      paper maturing no more than one year from the date of 

     

     

    
      
        
        

      

      
        Exhibit
          D-13

        
          

        

      

      
        
        
creation
        thereof and currently having the rating of A-1 or better or P-1, by Standard
        & Poor’s Ratings Group or Moody’s Investors Service, Inc., respectively, (C)
        certificates of deposit maturing no more than one year from the date of creation
        thereof issued by commercial banks incorporated under the laws of the United
        States of America, each having combined capital, surplus and undivided profits
        of not less than $300,000,000 and having a senior unsecured rating of "A"
        or
        better by a nationally recognized rating agency (as used in this Section
        10.9(d), an “A
        Rated Bank”),
        (D)
        time deposits maturing no more than thirty (30) days from the date of creation
        thereof with A Rated Banks and (E) mutual funds that invest solely in one
        or
        more of the Investments described in clauses (A) through (D) above and (ii)
        Subsidiaries organized under the laws of any jurisdiction other than the
        United
        States of America may make Investments in direct obligations of the jurisdiction
        in which it is organized, provided that such jurisdiction’s direct obligations
        are rated “A” or better by Moody’s Investors Services, Inc., and such
        obligations mature not more than one year from the date of acquisition thereof;
        and 

    

     

    (e)     promissory
      notes, trade receivables and other similar non-cash consideration received
      by
      the Company and its Subsidiaries in connection with Dispositions of assets
      permitted by 10.5 hereof.

     

    10.10.     Nature
      of
      Business. 

     

    The
      Company will not, and will not permit any Subsidiary to engage in any businesses
      other than the businesses conducted on the date of the First Closing, and all
      businesses incidental thereto.

     

    10.11.    Transactions
      with Affiliates.

     

    The
      Company will not, and will not permit any Subsidiary to, enter into directly
      or
      indirectly any Material transaction or Material group of related transactions
      (including the purchase, lease, sale or exchange of properties of any kind
      or
      the rendering of any service) with any Affiliate (other than the Company or
      another Subsidiary), except pursuant to the reasonable requirements of the
      Company’s or such Subsidiary’s business and upon fair and reasonable terms no
      less favorable to the Company or such Subsidiary than would be obtainable in
      a
      comparable arm’s-length transaction with a Person not an Affiliate.

     

    10.12.    Rate
      Management Transaction Agreement; Interest Rate
      Agreements.

     

    The
      Company will not, and will not permit any Subsidiary to, enter into any Rate
      Management Transaction Agreement or Interest Rate Agreement unless (i) such
      Rate
      Management Transaction Agreement or Interest Rate Agreement is intended to
      fix
      or establish a maximum interest rate in respect of Debt with a notional amount
      not in excess of the revolving loan commitments under the Credit Agreement
      and
      is embodied in a standard ISDA form of agreement which is 

     

     

    
      
        
        

      

      
        Exhibit
          D-14

        
          

        

      

      
        
        
acceptable
        to the Required Holders with respect to any intercreditor issues and (ii)
        the
        Company has promptly provided a true and complete copy of such Rate Management
        Transaction Agreement or Interest Rate Agreement to each holder of a Note.
        

    

     

    10.13.    Governmental
      Regulation.

     

    The
      Company will not, and will not permit any Subsidiary to, (a) be or become
      subject at any time to any law, regulation, or list of any government agency
      (including, without limitation, the U.S. Office of Foreign Asset Control list)
      that prohibits or limits the holders of Notes from making any financial
      accommodation to the Company or any Subsidiary or from otherwise conducting
      business with any of them, or (b) fail to provide documentary and other evidence
      of its identity as may be requested by any holder of a Note at any time to
      enable such holder to verify the identity of the Company or such Subsidiary
      or
      to comply with any applicable law or regulation, including, without limitation,
      Section 326 of the USA Patriot Act of 2001, 31 U.S.C. Section 5318.

     

    10.14.    Commitments
      under Credit Agreement.

     

    (a)    The
      Company will not at any time permit the commitments of the Lenders under the
      Credit Agreement to be less than $50,000,000 in the aggregate; provided that
      such commitments may be reduced in connection with any Dana Payment by an amount
      equal to difference of (i) the Creditor’s Share of such Dana Payment and (ii)
      the aggregate amount payable to the holders of Notes with respect to such Dana
      Payment under Section 8.1(b); so long such commitments are not reduced below
      $25,000,000.

     

    (b)    The
      Company will not any time permit the conditions to borrowing under the Credit
      Agreement to be modified (other than to make such conditions less restrictive
      on
      the Company) from the conditions set forth in the Credit Agreement on the date
      hereof.

     

    10.15.    Use
      of Proceeds of Retained Dana Payments.

     

    (a)    The
      Company will, and will cause each Subsidiary to, deposit any Retained Dana
      Payment in the Dana Payment Account (as defined in the Collateral Sharing
      Agreement) in accordance with the terms of the Collateral Sharing Agreement,
      promptly upon the receipt of such payment.

     

    (b)    To
      the
      extent the Dana Payment Account contains a balance of moneys on the third
      anniversary of the initial deposit of any Retained Dana Payment to the Dana
      Payment Account (such date, the “Third
      Anniversary Date”),
      such
      balance of moneys shall be deemed to constitute a Dana Payment received by
      the
      Company on the Third Anniversary Date and the Company shall make a prepayment
      of
      the Notes with respect to such balance in accordance with Section
      8.1(b).

     

     

    
      
        
        

      

      
        Exhibit
          D-15

        
          

        

      

      
        
        

      

    

     

    (c)    The
      Company will not, and will not permit any Subsidiary to, use all or any part
      of
      a Retained Dana Payment for any purpose other than for a purpose permitted
      under
      the terms of the Collateral Sharing Agreement.

     

    10.16.    Post-
      Closing
      Obligations.

     

    (a)     The
      Company shall, and shall cause the Subsidiary Guarantors to, cause patent and
      trademark assignments to be filed with the US Patent and Trademark Office on
      or
      prior to the 60th day following the Third Amendment Effective Date, perfecting
      the Collateral Agent’s security interest in the patents and trademarks of the
      Company and the Subsidiary Guarantors.

     

    (b)     The
      Company shall, and shall cause the Subsidiary Guarantors to, use their best
      efforts in good faith to deliver, or cause to be delivered, to each holder
      of
      Notes fully executed landlord lien waiver agreements in favor of the Collateral
      Agent from the landlords with respect to the leased properties set forth on
      Schedule
      10.16(b)
      to the
      Third Amendment on or prior to the 60th day following the Third Amendment
      Effective Date.

     

    (c)     The
      Company shall, and shall cause the Subsidiary Guarantors to, cause a fixture
      filing, in form and substance satisfactory to the Required Holders, to be made
      in the appropriate recording office with respect to each location set forth
      on
Schedule
      3.7(a)
      (other
      than Delaware) to the Third Amendment, and any other location where the Company
      or any Subsidiary Guarantor maintains assets with a net book value of $1,000,000
      or more, in each case on or prior to the 10th day following the Third Amendment
      Effective Date.

     

    (d)     On
      or
      prior to the 30th day following the Third Amendment Effective Date, the Company
      shall have either:

     

    (i)     taken
      all
      steps and executed all such documents as are required to (A) perfect the pledge
      under the Pledge Agreement (as amended), (B) ensure the enforceability thereof
      under the laws of Mexico and (C) ensure that the Collateral Agent may exercise
      all rights and remedies available to it thereunder, in each case as determined
      by Mexican counsel to the Current Noteholders; or

     

    (ii)     delivered
      an opinion of Mexican counsel to the Company as to such matters and any related
      matters required by the Required Holders, in form and substance satisfactory
      to
      the Required Holders.

     

    (e)     The
      Company shall use its best efforts in good faith to deliver a Control Agreement,
      in form and substance satisfactory to the Required Holders, with respect to
      its
      deposit accounts with Wachovia Bank, National Association (other than with
      respect to its payroll account) on or prior to the 15th day following the Third
      Amendment Effective Date.”

     

    
      	14.  	
              Section
                11 of the Existing Note Agreement is hereby amended and restated
                in its
                entirety as follows:

            


    

     

     

    
      
        
        

      

      
        Exhibit
          D-16

        
          

        

      

      
        
        

      

    

    “11.     EVENTS
      OF DEFAULT.

     

    An
“Event
      of Default” shall exist if any of the following conditions or events shall occur
      and be continuing:

     

    (a)     the
      Company defaults in the payment of any principal or Make-Whole Amount, if any,
      on any Note when the same becomes due and payable, whether at maturity or at
      a
      date fixed for prepayment or by declaration or otherwise; or

     

    (b)     the
      Company defaults in the payment of any interest on any Note for more than five
      days after the same becomes due and payable; or

     

    (c)     the
      Company defaults in the performance of or compliance with any term contained
      in
      Section 7.1(d) or Section 10; or

     

    (d)     the
      Company defaults in the performance of or compliance with any term contained
      herein (other than those referred to in paragraphs (a), (b), (c) and (l) of
      this
      Section 11) or in any other Financing Document and such default is not remedied
      within 30 days after the earlier of (i) a Responsible Officer obtaining actual
      knowledge of such default and (ii) the Company receiving written notice of
      such
      default from any holder of a Note (any such written notice to be identified
      as a
“notice of default” and to refer specifically to this paragraph (d) of Section
      11); or

     

    (e)     any
      representation or warranty made in writing by or on behalf of the Company or
      any
      Subsidiary Guarantor or by any officer of the Company or any Subsidiary
      Guarantor in any Financing Document or in any writing furnished in connection
      with the transactions contemplated hereby or thereby proves to have been false
      or incorrect in any material respect on the date as of which made;
      or

     

    (f)     (i)
      the
      Company or any Subsidiary Guarantor or any Significant Subsidiary is in default
      (as principal or as guarantor or other surety) in the payment of any principal
      of or premium or make-whole amount or interest on any Debt that is outstanding,
      beyond any period of grace provided with respect thereto, or (ii) the Company
      or
      any Subsidiary Guarantor or any Significant Subsidiary is in default in the
      performance of or compliance with any term of any evidence of any Debt, or
      of
      any mortgage, indenture or other agreement relating thereto or any other
      condition exists, and as a consequence of such default or condition such Debt
      has become, or has been declared (or one or more Persons are entitled to declare
      such Debt to be), due and payable before its stated maturity or before its
      regularly scheduled dates of payment, or (iii) as a consequence of the
      occurrence or continuation of any event or condition (other than the passage
      of
      time or the right of the holder of Debt to convert such Debt into equity
      interests), (x) the Company or any Subsidiary Guarantor or any Significant
      Subsidiary has become obligated to purchase or repay any Debt before its regular
      maturity or before its regularly scheduled dates of payment, or (y) one or
      more
      Persons have the right to require the Company or any Subsidiary Guarantor or
      any
      Significant Subsidiary so to purchase or repay such Debt; or 

     

     

    
      
        
        

      

      
        Exhibit
          D-17

        
          

        

      

      
        
        

      

    

     

    (g)     the
      Company or any Subsidiary Guarantor or any Significant Subsidiary (i) is
      generally not paying, or admits in writing its inability to pay, its debts
      as
      they become due, (ii) files, or consents by answer or otherwise to the filing
      against it of, a petition for relief or reorganization or arrangement or any
      other petition in bankruptcy, for liquidation or to take advantage of any
      bankruptcy, insolvency, reorganization, moratorium or other similar law of
      any
      jurisdiction, (iii) makes an assignment for the benefit of its creditors, (iv)
      consents to the appointment of a custodian, receiver, trustee or other officer
      with similar powers with respect to it or with respect to any substantial part
      of its property, (v) is adjudicated as insolvent or to be liquidated, or (vi)
      takes corporate action for the purpose of any of the foregoing; or

     

    (h)     a
      court
      or governmental authority of competent jurisdiction enters an order appointing,
      without consent by the Company or any Subsidiary Guarantor or any Significant
      Subsidiary, a custodian, receiver, trustee or other officer with similar powers
      with respect to it or with respect to any substantial part of its property,
      or
      constituting an order for relief or approving a petition for relief or
      reorganization or any other petition in bankruptcy or for liquidation or to
      take
      advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering
      the dissolution, winding-up or liquidation of the Company or any Subsidiary
      Guarantor or any Significant Subsidiary, or any such petition shall be filed
      against the Company or any Subsidiary Guarantor or any Significant Subsidiary
      and such petition shall not be dismissed within 60 days; or

     

    (i)     a
      final
      judgment or judgments for the payment of money aggregating in excess of
      $2,000,000 are rendered against one or more of the Company, the Subsidiary
      Guarantors and the Significant Subsidiaries, which judgments are not, within
      60
      days after entry thereof, bonded, discharged or stayed pending appeal, or are
      not discharged within 60 days after the expiration of such stay; or

     

    (j)     if
      (i)
      any Plan shall fail to satisfy the minimum funding standards of ERISA or the
      Code for any plan year or part thereof or a waiver of such standards or
      extension of any amortization period is sought or granted under section 412
      of
      the Code, (ii) a notice of intent to terminate any Plan shall have been or
      is
      reasonably expected to be filed with the PBGC or the PBGC shall have instituted
      proceedings under ERISA section 4042 to terminate or appoint a trustee to
      administer any Plan or the PBGC shall have notified the Company or any ERISA
      Affiliate that a Plan may become a subject of any such proceedings, (iii) the
      aggregate “amount of unfunded benefit liabilities” (within the meaning of
      section 4001(a)(18) of ERISA) under all Plans determined in accordance with
      Title IV of ERISA, shall exceed $15,000,000, (iv) the Company or any ERISA
      Affiliate shall have incurred or is reasonably expected to incur any liability
      pursuant to Title I or IV of ERISA or the penalty or excise tax provisions
      of
      the Code relating to employee benefit plans, (v) the Company or any ERISA
      Affiliate withdraws from any Multiemployer Plan, or (vi) the Company or any
      Subsidiary establishes or amends any employee welfare benefit plan that provides
      post-employment welfare benefits in a manner that would increase the liability
      of the Company or any Subsidiary thereunder; and any such event or events
      described in clauses (i) through (vi) above, either individually or together
      with any other such event or events, would reasonably be expected to have a
      Material Adverse Effect; or

     

     

    
      
        
        

      

      
        Exhibit
          D-18

        
          

        

      

      
        
        

      

    

     

    (k)    the
      Subsidiary Guaranty ceases to be in full force and effect, except as provided
      in
      Section 22, or is declared to be null and void in whole or in material part
      by a
      court or other governmental or regulatory authority having jurisdiction or
      the
      validity or enforceability thereof shall be contested by the Company or any
      Subsidiary Guarantor or any of them renounces any of the same or denies that
      it
      has any or further liability thereunder; or

     

    (l)    (i)
      any
      Security Document shall cease to be in full force and effect for any reason
      whatsoever (other than in accordance with its terms) or shall be declared by
      any
      court or other Governmental Authority of competent jurisdiction to be void,
      voidable or unenforceable against the grantor thereunder, (ii) the validity
      or
      enforceability of any Security Document against the grantor thereunder shall
      be
      contested by such grantor, (iii) any grantor under any Security Document shall
      default in the performance of any obligation under such Security Document or
      shall deny that it has any liability or obligation under, or shall contest
      the
      validity or enforceability of, such Security Document, (iv) any Security
      Document shall fail or cease to create a valid and perfected and, except to
      the
      extent permitted by the terms of the Security Documents, first priority Lien
      in
      favor of the Collateral Agent for the benefit of the holders of Notes on any
      Collateral purported to be covered thereby, or (v) the Company or any Subsidiary
      challenges the validity, perfection or priority of any such Lien;
      or

     

    (m)     the
      provisions of the Collateral Sharing Agreement governing priorities regarding
      any of the Collateral or any agreement or instrument governing priority with
      respect to any of any Collateral shall for any reason be revoked or invalidated,
      or otherwise cease to be in full force and effect, or the Collateral Agent
      or
      any Lender shall contest in writing the validity or enforceability thereof
      or
      deny that it has any further liability or obligation thereunder (and such
      contest or denial is not withdrawn); or

     

    (n)     any
      Financing Document, at any time after its execution and delivery and for any
      reason other than as expressly permitted hereunder or satisfaction in full
      of
      all the obligations of the Company and the Subsidiary Guarantors under the
      Financing Documents, ceases to be in full force and effect; or the Company
      or
      any Subsidiary Guarantor or any other Person contests in any manner the validity
      or enforceability of any Financing Document; or the Company or any Subsidiary
      Guarantor denies that it has any or further liability or obligation under any
      Financing Document, or purports to revoke, terminate or rescind any Financing
      Document; or

     

    (o)     any
      Change of Control (as defined in the Credit Agreement) that constitutes an
      Event
      of Default (as defined in the Credit Agreement); or

     

    (p)     the
      occurrence or existence of any default, event of default or other similar
      condition or event (however described) with respect to any Rate Management
      Transaction Agreement; or

     

    (q)    the
      failure of the Company to correct any deficiencies in any Field Audit and
      Inventory Spot Check to the satisfaction of the Collateral Agent and the
      Required

     

     

    
      
        
        

      

      
        Exhibit
          D-19

        
          

        

      

      
        
        

      

    

     

    Holders
      within 30 days of notice thereof from the Collateral Agent or the Required
      Holders.

     

    As
      used
      in Section 11(j), the terms “employee benefit plan” and “employee welfare
      benefit plan” shall have the respective meanings assigned to such terms in
      section 3 of ERISA.”

     

    
      	15.  	
              Section
                12.2 of the Existing Note Agreement is hereby amended and restated
                in its
                entirety to read as follows:

            


    

     

    “Section
      12.2. Other Remedies. 

     

    If
      any
      Default or Event of Default has occurred and is continuing, and irrespective
      of
      whether any Notes have become or have been declared immediately due and payable
      under Section 12.1, the holder of any Note at any time outstanding may proceed
      to protect and enforce the rights of such holder by an action at law, suit
      in
      equity or other appropriate proceeding, whether for the specific performance
      of
      any agreement contained herein or in any Note, or for an injunction against
      a
      violation of any of the terms hereof or thereof, or in aid of the exercise
      of
      any power granted hereby or thereby or by law or otherwise; provided
      however,
      that no
      holder of Notes shall take any action to foreclose, enforce or realize upon
      (judicially or non-judicially) their Liens on any Collateral except through
      the
      Collateral Agent and in accordance with the terms of the Collateral Sharing
      Agreement. The holders of Notes further agree that all proceeds of any such
      foreclosure, enforcement or realization will be distributed in accordance with
      the terms of the Collateral Sharing Agreement.”

     

    
      	16.  	
              Section
                12.4 of the Existing Note Agreement is hereby amended by replacing
                the
                phrase “this Agreement or by any Note” in the third and fourth lines
                thereof with the phrase “any Financing
                Document”.

            


    

     

    
      	17.  	
              Section
                15.1 of the Existing Note Agreement is hereby amended and restated
                in its
                entirety to read as follows:

            


    

     

    “Section 15.1. 
      Transaction Expenses. 

     

    Whether
      or not the transactions contemplated hereby are consummated, the Company will
      pay all costs and expenses (including reasonable attorneys’ fees of a special
      counsel and, if reasonably required, local or other counsel) incurred by you
      and
      each Other Purchaser or holder of a Note in connection with such transactions
      and in connection with any amendments, waivers or consents under or in respect
      of any Financing Document (whether or not such amendment, waiver or consent
      becomes effective), including, without limitation: (a) the costs and
      expenses incurred in enforcing or defending (or determining whether or how
      to
      enforce or defend) any rights under any Financing Document (including, without
      limitation, any such costs and expenses of the holders of Notes or any
      collateral agent acting on their behalf in connection with any enforcement
      of or
      realization against any collateral securing the obligations of the Company
      and
      the 

     

     

    
      
        
        

      

      
        Exhibit
          D-20

        
          

        

      

      
        
        
Subsidiary
        Guarantors under the Financing Documents) or in responding to any subpoena
        or
        other legal process or informal investigative demand issued in connection
        with
        any Financing Document, or by reason of being a holder of any Note, (b) the
        costs and expenses, including financial advisors’ fees, incurred in connection
        with the insolvency or bankruptcy of the Company or any Subsidiary or in
        connection with any work-out or restructuring of the transactions contemplated
        by the Financing Documents and (c) the costs and expenses incurred in connection
        with (i) a merger, consolidation or similar transaction, (ii) the delivery
        of a
        Subsidiary Guaranty (or joinder thereof) pursuant to Section 10.7, (iii)
        the
        delivery of any additional Security Document or (iv) the release of any
        Subsidiary Guarantor pursuant to Section 22. The Company will pay, and will
        save
        you and each Other Purchaser and each other holder of a Note harmless from,
        all
        claims in respect of any fees, costs or expenses, if any, of brokers and
        finders
        (other than those retained by any Purchaser or holder) incurred with respect
        to
        the issuance and sale of the Notes or the transactions contemplated
        hereby.”

    

     

    
      	18.  	
              Section
                15.2 of the Existing Note Agreement is hereby amended by replacing
                the
                phrase “this Agreement or the Notes” in the second line thereof with the
                phrase “any Financing Document”.

            


    

     

    
      	19.  	
              Section
                16 of the Existing Note Agreement is hereby amended and restated
                in its
                entirety to read as follows:

            


    

     

    “16. SURVIVAL
      OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.

     

    All
      representations and warranties contained in any Financing Document shall survive
      the execution and delivery thereof, the purchase or transfer by you of any
      Note
      or portion thereof or interest therein and the payment of any Note, and may
      be
      relied upon by any subsequent holder of a Note, regardless of any investigation
      made at any time by or on behalf of you or any other holder of a Note. All
      statements contained in any certificate or other instrument delivered by or
      on
      behalf of the Company pursuant to any Financing Document shall be deemed
      representations and warranties of the Company under this Agreement. Subject
      to
      the preceding sentence, the Financing Documents embody the entire agreement
      and
      understanding between you, the Other Purchasers and the Company and supersede
      all prior agreements and understandings relating to the subject matter
      hereof.”

     

    
      	20.  	
              Section
                17.1 of the Existing Note Agreement is hereby amended by deleting
                that
                portion of the first sentence thereof from the beginning thereof
                to, but
                not including, the third comma appearing therein and replacing it
                with
                “The Financing Documents (other than the Security Documents) may be
                amended, and the observance of any term thereof may be waived (either
                retroactively or prospectively)”.

            


    

     

     

    
      
        
        

      

      
        Exhibit
          D-21

        
          

        

      

      
        
        

      

    

     

    
      	21.  	
              Section
                17.2 of the Existing Note Agreement is hereby amended by deleting
                the
                phrase “hereof or of the Notes” appearing in clause (a) thereof and
                replacing it with the phrase “of the Financing Documents” and by deleting
                the word “hereof” in the fifth line of clause (b) thereof and replacing it
                with the phrase “of any of the Financing
                Documents”.

            


    

     

    
      	22.  	
              Section
                17.4 of the Existing Note Agreement is hereby amended by replacing
                the
                phrase “this Agreement or the Notes” in the third line thereof with the
                phrase “any Financing Document”.

            


    

     

    
      	23.  	
              Section
                20 of the Existing Note Agreement is hereby amended by deleting the
                reference to “your Notes and this Agreement” in the seventh line from the
                bottom of such Section and replacing such reference with “the Financing
                Documents”.

            


    

     

    
      	24.  	
              Section
                22 of the Existing Note Agreement is hereby amended and restated
                in its
                entirety as follows:

            


    

     

    “22. RELEASE
      OF SUBSIDIARY GUARANTOR.

     

    You
      and
      each subsequent holder of a Note agree to release any Subsidiary Guarantor
      from
      the Subsidiary Guaranty upon written request of the Company if such Subsidiary
      Guarantor ceases to be such as a result of a Disposition permitted by Section
      10.5. Your obligation to release a Subsidiary Guarantor from the Subsidiary
      Guaranty is conditioned upon your prior receipt of a certificate of a Senior
      Financial Officer stating that immediately before and after giving effect to
      such release no Default or Event of Default shall exist and be
      continuing.”

     

    
      	25.  	
              Schedule
                B to the Existing Note Agreement is hereby amended and restated in
                its
                entirety as follows:

            


    

     

    “SCHEDULE
      B

     

    DEFINED
      TERMS

     

    As
      used
      herein, the following terms have respective meanings set forth below or set
      forth in the Section hereof following such term:

     

    “Adjusted
      Consolidated Net Worth”
means,
      at any time, the consolidated stockholders’ equity of the Company and its
      Subsidiaries as would be reflected on a consolidated balance sheet of the
      Company and its Subsidiaries as at such time, prepared in accordance with GAAP,
      less (a) minority interests in Subsidiaries, (b) the amount by which outstanding
      Restricted Investments on such date exceed 10% of consolidated stockholders’
equity of the Company and its Subsidiaries on such date determined on a
      consolidated basis in accordance with GAAP and (c) any amounts with respect
      to
      accumulated other comprehensive income or similar non-cash adjustments to
      stockholders’ equity.

     

    “Affiliate”
means,
      at any time, and with respect to any Person, any other Person that at such
      time
      directly or indirectly through one or more intermediaries Controls, or
      is

     

     

    
      
        
        

      

      
        Exhibit
          D-22

        
          

        

      

      
        
        
Controlled
        by, or is under common Control with, such first Person. As used in this
        definition, “Control”
means
        the possession, directly or indirectly, of the power to direct or cause the
        direction of the management and policies of a Person, whether through the
        ownership of voting securities, by contract or otherwise. Unless the context
        otherwise clearly requires, any reference to an “Affiliate” is a reference to an
        Affiliate of the Company.

    

     

    “Anti-Terrorism
      Order”
means
      Executive Order 13224 of September 23, 2001 Blocking Property and
      Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support
      Terrorism (66 Fed. Reg. 49079 (2001)).

     

    “Business
      Day”
means
      (a) for the purposes of Section 8.7 only, any day other than a Saturday, a
      Sunday or a day on which commercial banks in New York City are required or
      authorized to be closed, and (b) for the purposes of any other provision of
      this
      Agreement, any day other than a Saturday, a Sunday or a day on which commercial
      banks in Chicago, Illinois, New York City or Louisville, Kentucky are required
      or authorized to be closed.

     

    “Capital
      Expenditure”
means,
      for any period, the consolidated sum of all expenditures by, or obligations
      incurred by, the Company and its Subsidiaries for an asset that will be used
      in
      a year or years subsequent to and in the year in which the expenditure is made
      or obligation is incurred, and which asset is properly classified in relevant
      financial statements of the Company and its Subsidiaries as equipment, real
      property or improvements, fixed assets or a similar type of capitalized asset,
      all in accordance with GAAP.

     

    “Capital
      Lease”
means,
      at any time, a lease with respect to which the lessee is required concurrently
      to recognize the acquisition of an asset and the incurrence of a liability
      in
      accordance with GAAP.

     

    “Capital
      Stock”
means,
      with respect to any Person, any class of preferred, common or other capital
      stock, share capital or similar equity interest of such Person, including,
      without limitation, limited or general partnership interests in a partnership
      and units or membership interests in a limited liability company.

     

    “Change
      of Control”
      means
      the acquisition, directly or indirectly, through purchase or otherwise by any
      Person, or group of Persons acting in concert, other than Robert E. Gill,
      Jeffrey T. Gill or R. Scott Gill, members of their immediate family and their
      lineal descendants, or trusts or any other entity created for their benefit,
      in
      one or more transactions, of beneficial ownership or control of securities
      representing more than 50% of the voting power of the Company’s Voting Stock
      (including the agreement to act in concert by any such group of Persons who
      beneficially own or control securities representing more than 50% of the voting
      power of the Company’s Voting Stock). 

     

    “Closings”
is
      defined in Section 3.

     

    “Code”
means
      the Internal Revenue Code of 1986, as amended from time to time, and the rules
      and regulations promulgated thereunder from time to time.

     

     

    
      
        
        

      

      
        Exhibit
          D-23

        
          

        

      

      
        
        

      

    

     

    “Collateral”
means
      any and all property in which a Lien has been granted to the Collateral Agent
      as
      security for the payment and performance in full of the obligations of the
      Company and the Subsidiary Guarantors to the holders of Notes and the Lenders
      under the Financing Documents and the Credit Agreement Documents, as the case
      may be.

     

    “Collateral
      Agent”
means
      the collateral agent appointed under the Collateral Sharing Agreement, in its
      capacity as collateral agent for the holders of Permitted Senior Secured Debt,
      and any successor collateral agent appointed in accordance with the terms of
      the
      Collateral Sharing Agreement.

     

    “Collateral
      Sharing Agreement”
means
      the Amended and Restated Collateral Sharing Agreement, dated as of the Third
      Amendment Effective Date, by and among the Collateral Agent, the Lenders and
      the
      holders of the Notes, as amended, restated or otherwise modified from time
      to
      time. 

     

    “Company” means
      Sypris Solutions, Inc., a Delaware corporation.

     

    “Confidential
      Information”
is
      defined in Section 20.

     

    “Consolidated
      EBITDA”
means,
      for any period, the sum of Consolidated Net Income for such period, plus,
      to the
      extent deducted in determining such Consolidated Net Income, (i) provision
      for
      taxes based on income, (ii) Consolidated Interest Expense, (iii)
      depreciation and amortization expense, (iv) make-whole cash or non-cash expense
      incurred in connection with any redemption of the Notes, in the aggregate amount
      of up to $750,000, and (v) noncash stock compensation expense, in each case
      determined on a consolidated basis in accordance with GAAP, and minus,
      to the
      extent not deducted in determining such Consolidated Net Income, any
      extraordinary non-cash or non-recurring non-cash gains realized other than
      in
      the ordinary course, including but not limited to gains resulting from the
      redemption of Debt. 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. In calculating Consolidated Net Income solely for purposes of
      determining Consolidated EBITDA, (a) no effect shall be given to
      (i)
      gains or losses on the sale of non current assets or (ii) losses on writedowns
      of noncurrent assets or lease obligations, (b) non-cash income associated with
      the write-up of goodwill pursuant to FASB no. 142 shall be subtracted from
      net
      income of the Company and its Subsidiaries, and (c) non-cash expense associated
      with the write-down of goodwill pursuant to FASB no. 142 shall be added back
      to
      net income of the Company and its Subsidiaries.

     

    “Consolidated
      Interest Expense”
means,
      for any period, the consolidated interest expense of the Company and its
      Subsidiaries for such period determined in accordance with GAAP.

     

     

    
      
        
        

      

      
        Exhibit
          D-24

        
          

        

      

      
        
        

      

    

     

    “Consolidated
      Net Debt”
means,
      as of any date, outstanding Debt of the Company and its Subsidiaries as of
      such
      date less cash and cash equivalents of the Company and its Subsidiaries as
      of
      such date (provided that the maximum amount permitted to be so deducted in
      respect of the cash and cash equivalents of Subsidiaries organized in
      jurisdictions outside of the United States of America is $10,000,000), each
      as
      determined on a consolidated basis in accordance with GAAP.

     

    “Consolidated
      Net Income”
-
      means, for any period, the net income or loss of the Company and its
      Subsidiaries for such period determined on a consolidated basis in accordance
      with GAAP without giving effect to any extraordinary items.

     

    “Consolidated
      Total Assets”
means,
      as of any date, the assets and properties of the Company and its Subsidiaries
      as
      of such date, determined on a consolidated basis in accordance with
      GAAP.

     

    “Contingent
      Obligations”
means,
      with respect to any Person at any time, any direct or indirect liability,
      contingent or otherwise of such Person, (i) with respect to any indebtedness,
      lease, dividend, letter of credit or other obligation of another if the primary
      purpose or intent thereof by such Person is to provide assurance to the obligee
      of such obligation of another that such obligation of another will be paid
      or
      discharged, or that any agreements relating thereto will be complied with,
      or
      that the holder of such obligation will be protected (in whole or in part)
      against loss in respect thereof, or (ii) under any letter of credit issued
      for
      the account of such Person or for which such Person is otherwise liable for
      reimbursement thereof, or (iii) under interest rate swap agreements, interest
      rate collar agreements or other similar arrangements providing interest rate
      protection. Contingent Obligations shall include, without limitation, (a) the
      direct or indirect guaranty, endorsement (otherwise than for collection or
      deposit in the ordinary course of business), co-making, discounting with
      recourse or sale with recourse by such Person of the obligation of another,
      and
      (b) any liability of such Person for the obligations of another through any
      agreement (contingent or otherwise) (1) to purchase, repurchase, or otherwise
      acquire such obligation or any security therefor, or to provide funds for the
      payment or discharge of such obligation (whether in the form of loans, advances,
      stock purchases, capital contributions or otherwise), (2) to maintain the
      solvency of any balance sheet item, level of income or financial condition
      of
      another, or (3) to make take-or-pay or similar payments if required regardless
      of non-performance by any other party or parties to an agreement, in the case
      of
      any agreement described under subclauses (1), (2) or (3) of this sentence if
      the
      primary purpose or intent thereof is as described in clause (i) of the preceding
      sentence. The amount of any Contingent Obligation of the Company or any
      Subsidiary, as at any time of determination, shall be equal to the amount of
      the
      obligation so guaranteed or otherwise supported at such time of determination
      which amount shall be deemed to be the amount of such obligation guaranteed,
      as
      reasonably estimated by the Company, if such amount cannot be specifically
      determined at the time of determination.

     

    “Control
      Agreement”
means
      an agreement between the Collateral Agent and (i) the issuer of uncertificated
      securities with respect to uncertificated securities in the name of the Company
      or any Subsidiary, or (ii) a securities intermediary with respect to


     

     

    
      
        
        

      

      
        Exhibit
          D-25

        
          

        

      

      
        
        
securities,
        whether certificated or uncertificated, securities entitlements and other
        financial assets held in a securities account in the name of the Company
        or any
        Subsidiary or (iii) a futures commission merchant or clearing house, as
        applicable, with respect to commodity accounts and commodity contracts held
        by
        the Company or any Subsidiary, whereby, in any such case and among other
        things,
        the issuer, securities intermediary or futures commission merchant limits
        its
        security interest in the applicable financial assets in a manner reasonably
        satisfactory to the Collateral Agent, acknowledges the first lien of the
        Collateral Agent, on behalf of itself, the Lenders and the holders of Notes,
        on
        such financial assets, and agrees to follow the instructions or entitlement
        orders of the Collateral Agent without further consent by the Company or
        such
        Subsidiary, as the case may be.

    

     

    “Control
      Event”
      means:

     

    (a)     the
      execution by the Company or any of its Subsidiaries or Affiliates of any
      agreement with respect to any proposed transaction or event or series of
      transactions or events that, individually or in the aggregate, may reasonably
      be
      expected to result in a Change of Control, or

    


    (b)     the
      execution of any written agreement that, when fully performed by the parties
      thereto, would result in a Change of Control.

     

    “Credit
      Agreement”
means
      the Amended and Restated Loan Agreement, dated as of the Third Amendment
      Effective Date, among the Company, the Subsidiaries of the Company named as
      guarantors therein, JPMorgan Chase Bank, N.A., as Administrative Agent, and
      the
      other lenders party thereto, as such agreement may be hereafter amended,
      modified, restated, supplemented, replaced, refinanced, increased or reduced
      from time to time, and any successor credit agreement or similar
      facility.

     

    “Credit
      Agreement Documents”
means
      the Credit Agreement and the documents, agreements and instruments entered
      into
      by the Company or any Subsidiary Guarantor in connection therewith.

     

    “Creditors’
      Share”
means,
      with respect to any Dana Partial Termination Payment (other than a Dana
      Substantial Termination Payment), 72%, and with respect to a Dana Substantial
      Termination Payment, 100%.

     

    “Dana
      Bankruptcy Proceedings”
means
      the bankruptcy case of Dana Corporation under chapter 11 of the United States
      Code, 11 U.S.C. §§101 - 1532, captioned as In re Dana Corporation, et
      al.,
      case
      no. 06-10354 (jointly administered) before the United States Bankruptcy Court
      in
      the Southern District of New York, and any other bankruptcy case or proceeding
      (foreign or domestic) relating to any of the Dana Entities.

     

    “Dana
      Entities”
means
      Dana Corporation, a Virginia corporation, its Subsidiaries and affiliates,
      together with their respective successors and assigns, including,
      without

     

     

    
      
        
        

      

      
        Exhibit
          D-26

        
          

        

      

      
        
        
limitation
        any debtor-in-possession or any bankruptcy trustee acting on any of their
        behalf
        in connection with the Dana Bankruptcy Proceedings.

    

     

    “Dana
      Partial Termination Payment”
is
      defined in the definition of “Dana Payment”.

     

    “Dana
      Payment”
means
      any cash payment received (including by way of setoff) by the Company or any
      Subsidiary (or otherwise paid in accordance with the instructions of the Company
      or any Subsidiary) (i) under the terms of any one or more of the Dana Supply
      Agreements upon any termination or rejection of such agreement or agreements
      in
      connection with or arising out of the Dana Bankruptcy Proceedings or (ii)
      constituting cash proceeds (including by way of setoff) from the sale,
      disposition, transfer or liquidation of any interest in any claim of the Company
      or any Subsidiary for damages arising out of such termination or rejection,
      which, in either case (x) exceeds $34,700,000 in the aggregate for all such
      payments received on or after the date hereof (unless such payment also
      constitutes a “Dana Substantial Termination Payment” as hereinafter defined,
      each a “Dana
      Partial Termination Payment”),
      or
      (y) results from any Substantial Termination of the Dana Supply Agreements
      (each, a “Dana
      Substantial Termination Payment”).
      For
      purposes of this definition a “Substantial
      Termination”
of
      the
      Dana Supply Agreements shall be deemed to have occurred if Dana Supply
      Agreements under which 30% of the gross revenues of the Company and its
      Subsidiaries were generated in fiscal year 2006 are so terminated or rejected
      and not contemporaneously replaced.

     

    “Dana
      Substantial Termination Payment”
is
      defined in the definition of “Dana Payment”.

     

    “Dana
      Supply Agreements”
means
      those certain agreements by and among any one or more of the Company and its
      Subsidiaries on the one hand and any one or more of the Dana Entities on the
      other hand, including, without limitation, those agreements set forth on
Exhibit
      H
      to the
      Third Amendment, as each such agreement is amended, restated, replaced or
      otherwise modified from time to time.

     

    “Debt”
means,
      with respect to any Person, at any time, without duplication (but for the
      avoidance of doubt excluding in each case trade payables incurred in the
      ordinary course of business), (i) all indebtedness for borrowed money,
      including, without limitation, all reimbursement obligations in respect of
      all
      letters of credit, (ii) mandatorily redeemable preferred stock of such Person
      (except any mandatorily redeemable preferred stock owned by such Person), (iii)
      that portion of obligations with respect to Capital Leases which is properly
      classified as a liability on a balance sheet in conformity with GAAP, (iv)
      that
      portion of obligations with respect to Synthetic Leases which is not classified
      as a liability on a balance sheet of such Person in conformity with GAAP, (v)
      notes payable and drafts accepted representing extensions of credit whether
      or
      not representing obligations for borrowed money, (vi) any obligation owed for
      all or any part of the deferred purchase price of property or services which
      purchase price is (y) due more than six months from the date of the incurring
      of
      the obligation in respect thereof, or (z) evidenced by a note or similar written
      instrument, (vii) all indebtedness secured by any lien on any property or asset
      owned by such Person regardless of whether the

     

     

    
      
        
        

      

      
        Exhibit
          D-27

        
          

        

      

      
        
        
indebtedness
        secured thereby shall have been assumed by such Person or is non-recourse
        to the
        credit of such Person but only to the extent of the fair market value of
        any
        such property or assets, and (viii) all Contingent Obligations of such Person
        in
        respect of obligations of the types described in clauses (i) through (vii)
        of
        this definition.

    

     

    “Default”
means
      an event or condition the occurrence or existence of which would, with the
      lapse
      of time or the giving of notice or both, become an Event of
      Default.

     

    “Default
      Rate”
means,
      at any time, that rate of interest that is the greater of (i) 3% per annum
      above the rate of interest in effect at such time as stated in clause (a) of
      the
      first paragraph of the Notes or (ii) 3% over the rate of interest most
      recently publicly announced at such time by LaSalle Bank National Association
      as
      its “base” or “prime” rate.

     

    “Disposition”
is
      defined in Section 10.5.

     

    “Disposition
      Value”
means,
      at any time, with respect to any property

     

    (a)     in
      the
      case of property that does not constitute Subsidiary Stock, the book value
      thereof, valued at the time of the Disposition thereof in good faith by the
      Company, and

     

    (b)     in
      the
      case of property that constitutes Subsidiary Stock, an amount equal to that
      percentage of book value of the assets of the Subsidiary that issued such stock
      as is equal to the percentage that the book value of such Subsidiary Stock
      represents of the book value of all of the outstanding Capital Stock interests)
      of such Subsidiary (assuming, in making such calculations, that all securities
      convertible into such Capital Stock are so converted and giving full effect
      to
      all transactions that would occur or be required in connection with such
      conversion) determined at the time of the Disposition thereof, in good faith
      by
      the Company.

     

    “Distribution”
means,
      in respect of any Person:

     

    (a)     dividends
      or other distributions or payments on Capital Stock of such Person (except
      distributions in such Capital Stock); and 

     

    (b)     the
      redemption or acquisition of such Capital Stock or of warrants, rights or other
      options to purchase such Capital Stock (except when solely in exchange for
      such
      Capital Stock) unless made, contemporaneously, from the net proceeds of a sale
      of such Capital Stock.

     

    “Environmental
      Laws”
means
      any and all federal, state, local, and foreign statutes, laws, regulations,
      ordinances, rules, judgments, orders, decrees, permits, concessions, grants,
      franchises, licenses, agreements or governmental restrictions relating to
      pollution and the protection of the environment or the release of any materials
      into the environment, including but not limited to those related to hazardous
      substances or wastes, air emissions and discharges to waste or public
      systems.

     

     

    
      
        
        

      

      
        Exhibit
          D-28

        
          

        

      

      
        
        

      

    

     

    “ERISA”
means
      the Employee Retirement Income Security Act of 1974, as amended from time to
      time, and the rules and regulations promulgated thereunder from time to time
      in
      effect.

     

    “ERISA
      Affiliate”
means
      any trade or business (whether or not incorporated) that is treated as a single
      employer together with the Company under section 414 of the Code.

     

    “Event
      of Default”
is
      defined in Section 11.

     

    “Exchange
      Act” means
      the
      Securities Exchange Act of 1934, as amended.

     

    “Fair
      Market Value”
means,
      at any time and with respect to any property, the sale value of such property
      that would be realized in an arm's-length sale at such time between an informed
      and willing buyer and an informed and willing seller (neither being under a
      compulsion to buy or sell).

     

    “Field
      Audit and Inventory Spot Check”
shall
      have the meaning ascribed to such term in the Credit Agreement, as in effect
      on
      the Third Amendment Effective Date.

     

    “Financing
      Documents”
means
      and includes this Agreement, the Third Amendment, the Notes, the Subsidiary
      Guaranty, the Subsidiary Guaranty Amendment, the Collateral Sharing Agreement,
      the Security Documents and each amendment to any of the foregoing, in each
      case
      as amended, restated or otherwise modified from time to time.

     

    “First
      Closing”
is
      defined in Section 3.

     

    “Fiscal
      Year Budget”
is
      defined in Section 7.1(f).

     

    “Fixed
      Charge Coverage Ratio”
means,
      as of any date, the ratio of Consolidated EBITDA to Consolidated Interest
      Expense, in each case for the immediately preceding period of four fiscal
      quarters of the Company.

     

    “Foreign
      Entity”
is
      defined in Section 10.8(c).

     

    “Foreign
      Entity Subsidiary”
is
      defined in Section 10.8(c).

     

    “GAAP”
means
      generally accepted accounting principles as in effect from time to time in
      the
      United States of America.

     

    “Governmental
      Authority”
      means

     

    (a)     the
      government of

    


    (i)    the
      United States of America or any state or other political subdivision thereof,
      or

     

     

     

    
      
        
        

      

      
        Exhibit
          D-29

        
          

        

      

      
        
        

      

    

     

    


    (ii)     any
      jurisdiction in which the Company or any Subsidiary conducts all or any part
      of
      its business, or which asserts jurisdiction over any properties of the Company
      or any Subsidiary, or

    


    (b)     any
      entity exercising executive, legislative, judicial, regulatory or administrative
      functions of, or pertaining to, any such government.

    


    “Guaranty”
means,
      with respect to any Person, any obligation (except the endorsement in the
      ordinary course of business of negotiable instruments for deposit or collection)
      of such Person guaranteeing or in effect guaranteeing any indebtedness, dividend
      or other obligation of any other Person in any manner, whether directly or
      indirectly, including obligations incurred through an agreement, contingent
      or
      otherwise, by such Person:

     

    (a)     to
      purchase such indebtedness or obligation or any property constituting security
      therefor;

    


    (b)     to
      advance or supply funds (i) for the purchase or payment of such indebtedness
      or
      obligation, or (ii) to maintain any working capital or other balance sheet
      condition or any income statement condition of any other Person or otherwise
      to
      advance or make available funds for the purchase or payment of such indebtedness
      or obligation;

    


    (c)     to
      lease
      properties or to purchase properties or services primarily for the purpose
      of
      assuring the owner of such indebtedness or obligation of the ability of any
      other Person to make payment of the indebtedness or obligation; or

    


    (d)     otherwise
      to assure the owner of such indebtedness or obligation against loss in respect
      thereof.

    


    In
      any
      computation of the indebtedness or other liabilities of the obligor under any
      Guaranty, the indebtedness or other obligations that are the subject of such
      Guaranty shall be assumed to be direct obligations of such obligor.

    


    “Hazardous
      Material”
means
      any and all pollutants, toxic or hazardous wastes or any other substances that
      might pose a hazard to health or safety, the removal of which may be required
      or
      the generation, manufacture, refining, production, processing, treatment,
      storage, handling, transportation, transfer, use, disposal, release, discharge,
      spillage, seepage, or filtration of which is or shall be, prohibited or
      penalized by any applicable law (including, asbestos, urea formaldehyde foam
      insulation and polychlorinated biphenyls).

     

    “holder”
means,
      with respect to any Note, the Person in whose name such Note is registered
      in
      the register maintained by the Company pursuant to Section 13.1.

     

    “Incorporated
      Provision”
is
      defined in Section 9.7.

     

    “INHAM
      Exemption” is
      defined in Section 6.2(e).

     

     

    
      
        
        

      

      
        Exhibit
          D-30

        
          

        

      

      
        
        

      

    

     

     

    “Initial
      Projections”
has
      the
      meaning set forth in the Third Amendment.

     

    “Institutional
      Investor”
means
      (a) any original purchaser of a Note, (b)  any holder of more than
      $2,000,000 in aggregate principal amount of the Notes at the time outstanding,
      and (c) any bank, trust company, savings and loan association or other financial
      institution, any pension plan, any investment company, any insurance company,
      any broker or dealer, or any other similar financial institution or entity,
      regardless of legal form.

     

    “Interest
      Rate Agreement”
means
      any interest rate swap agreement, interest rate cap agreement, interest rate
      collar agreement or other similar agreement.

     

    “Investment”
is
      defined in Section 10.9.

     

    “Lender”
means
      a
      lender under the Credit Agreement.

     

    “Lien”
means,
      with respect to any Person, any mortgage, lien, pledge, charge, security
      interest or other encumbrance, or any interest or title of any vendor, lessor,
      lender or other secured party to or of such Person under any conditional sale
      or
      other title retention agreement or Capital Lease, upon or with respect to any
      property of such Person (including in the case of stock, stockholder agreements,
      voting trust agreements and all similar arrangements) or any assignment of
      such
      property.

     

    “Loans”
means
      the loans made by the Lenders to the Company under the Credit
      Agreement.

     

    “Make-Whole
      Amount”
is
      defined in Section 8.7.

     

    “Material”
means
      material in relation to the business, operations, affairs, financial condition,
      assets or properties of the Company and its Subsidiaries taken as a
      whole.

     

    “Material
      Adverse Effect”
means
      a
      material adverse effect on (a) the business, operations, affairs, financial
      condition, assets or properties of the Company and its Subsidiaries taken as
      a
      whole, or (b) the ability of the Company or any Subsidiary Guarantor to
      perform its obligations under the Financing Documents, or (c) the validity
      or enforceability of the Financing Documents.

     

    “Memorandum”
is
      defined in Section 5.3.

     

    “Mexican
      Subsidiary” means
      a
      Subsidiary organized in any jurisdiction in Mexico.

     

    “More
      Favorable Provision”
is
      defined in Section 9.7.

     

    “Multiemployer
      Plan”
means
      any Plan that is a “multiemployer plan” (as such term is defined in section
      4001(a)(3) of ERISA).

     

     

    
      
        
        

      

      
        Exhibit
          D-31

        
          

        

      

      
        
        

      

    

     

    “NAIC
      Annual Statement”
is
      defined in Section 6.2.

     

    “Notes”
is
      defined in Section 1.

     

    “Officer’s
      Certificate”
means
      a
      certificate of a Senior Financial Officer or of any other officer of the Company
      whose responsibilities extend to the subject matter of such
      certificate.

     

    “Operating
      Lease Rentals”
means
      the periodic expense of the Company and its Subsidiaries for the portion of
      their obligations with respect to non-capital leases determined on a
      consolidated basis in accordance with GAAP.

     

    “Other
      Purchasers”
is
      defined in Section 2.

     

    “PBGC”
means
      the Pension Benefit Guaranty Corporation referred to and defined in ERISA or
      any
      successor thereto.

     

    “Permitted
      Acquisition”
is
      defined in Section 10.6.

    


    “Permitted
      Senior Secured Debt”
means
      and includes any Debt of the Company and its Subsidiaries under the Financing
      Documents and Credit Agreement Documents; provided,
      in the
      case of the Credit Agreement Documents, that the aggregate amount of such Debt
      does not at any time exceed $100,000,000, and provided
      further that
      the
      holders of all such Debt under the Credit Agreement Documents are a party to
      (and such Debt is subject to) the Collateral Sharing Agreement.

    


    “Pledge
      Agreement”
means
      the Pledge Agreement, dated as of September 13, 2005, among the Company, the
      Collateral Agent and Sypris Technologies Mexican Holdings, LLC and Sypris
      Technologies, Inc., as amended, restated or otherwise modified from time to
      time.

     

    “Person”
means
      an individual, partnership, corporation, limited liability company, association,
      trust, unincorporated organization, or a government or agency or political
      subdivision thereof.

     

    “Plan”
means
      an “employee benefit plan” (as defined in section 3(3) of ERISA) that is or,
      within the preceding five years, has been established or maintained, or to
      which
      contributions are or, within the preceding five years, have been made or
      required to be made, by the Company or any ERISA Affiliate or with respect
      to
      which the Company or any ERISA Affiliate may have any liability.

     

    “Post
      Closing Item”
means
      each document, agreement or action required to be entered into or performed
      by
      the Company and its Subsidiaries under Section 10.16 hereof.

     

    “property”
or
      “properties”
means,
      unless otherwise specifically limited, real or personal property of any kind,
      tangible or intangible, choate or inchoate.

     

     

    
      
        
        

      

      
        Exhibit
          D-32

        
          

        

      

      
        
        

      

    

     

    “Purchaser”
means
      each purchaser listed in Schedule A.

     

    “QPAM
      Exemption”
is
      defined in Section 6.2(d).

     

    “Rate
      Management Transaction Agreement”
means
      any agreement between the Company and a Lender or an Affiliate of a Lender
      with
      respect to any transaction that is a rate swap, basis swap, forward rate
      transaction, commodity swap, commodity option, equity or equity index swap,
      equity or equity index option, bond option, interest rate option, foreign
      exchange transaction, cap transaction, floor transaction, collar transaction,
      forward transaction, currency swap transaction, cross-currency rate swap
      transaction, currency option, derivative transaction or any other similar
      transaction (including any option with respect to any of these transactions)
      or
      any combination thereof, whether linked to one or more interest rates, foreign
      currencies, commodity prices, equity prices or other financial
      measures.

     

    “Required
      Holders”
means,
      at any time, the holders of at least a majority in principal amount of the
      Notes
      at the time outstanding (exclusive of Notes then owned by the Company or any
      of
      its Affiliates).

     

    “Responsible
      Officer”
means
      any Senior Financial Officer and any other officer of the Company with
      responsibility for the administration of the relevant portion of the Financing
      Documents.

     

    “Restricted
      Investments” means
      all
      investments made, in cash or by delivery of property, directly or indirectly,
      by
      any Person, in any other Person, whether by acquisition of shares of capital
      stock, indebtedness or other obligations or securities or by loan, Guaranty,
      advance, capital contribution or otherwise (as used herein “Investments”)
      of the
      Company and its Subsidiaries, other than:

     

    (a)     property
      or assets to be used or consumed in the ordinary course of
      business;

    


    (b)     assets
      arising from the sale of goods or services in the ordinary course of
      business;

    


    (c)     Investments
      in Subsidiaries or in any Person that, as a result thereof, becomes a
      Subsidiary;

    


    (d)     Investments
      in common stock of the Company;

    


    (e)     Investments
      existing as of the date of this Agreement that are listed in the attached
      Schedule B-1 and any earnings thereon; and

    


    (f)     Investments
      in:

     

     

    
      
        
        

      

      
        Exhibit
          D-33

        
          

        

      

      
        
        

      

    

    


    (i)     obligations,
      maturing within one year from the date of acquisition, of or fully guaranteed
      by
      the United States of America, or an agency thereof, or Canada, or any province
      thereof;

    


    (ii)     state,
      or
      municipal securities having an effective maturity within one year from the
      date
      of acquisition that are rated in one of the top two rating classifications
      by at
      least one nationally recognized rating agency;

    


    (iii)     certificates
      of deposit, banker’s acceptances or demand deposits (A) maturing more than 30
      days after but within one year from the date of acquisition thereof and issued
      by commercial banks whose long-term unsecured debt obligations (or the long-term
      unsecured debt obligations of the bank holding company owning all of the capital
      stock of such bank) are rated in one of the top two rating classifications
      by at
      least one nationally recognized rating agency at the time of making such
      investment (“Acceptable
      Bank”),
      (B) maturing 30 days or less from the date of issuance thereof, issued by a
      commercial bank rated at least investment grade by at least one nationally
      recognized rating agency at the time of making such investment or (C) that
      constitute the normal operating checking accounts of the Company and its
      Subsidiaries;

    


    (iv)     commercial
      paper maturing within 270 days from the date of issuance that, at the time
      of
      acquisition, is rated in one of the top two rating classifications by at least
      one credit rating agency of recognized national standing; 

    


    (v)     Repurchase
      Agreements; and 

    


    (vi)     money
      market instrument programs that are properly classified as current assets in
      accordance with GAAP.

    


    As
      used
      in this definition of Restricted Investments,

    


    “Acceptable
      Broker-Dealer”
means
      any Person other than a natural person (i) that is registered as a broker
      or dealer pursuant to the Exchange Act and (ii) whose long-term unsecured
      debt obligations are rated in one of the top two rating classifications by
      at
      least one nationally recognized rating agency.

    


    “Repurchase
      Agreement”
means
      any written agreement

     

    (a)     that
      provides for (i) the transfer of one or more United States Governmental
      Securities in an aggregate principal amount at least equal to the amount of
      the
      Transfer Price (defined below) to the Company or any of its Subsidiaries from
      an
      Acceptable Bank or an Acceptable Broker-Dealer against a transfer of funds
      (the
“Transfer
      Price”)
      by the
      Company or such Subsidiary to such Acceptable Bank or Acceptable Broker-Dealer,
      and (ii) a simultaneous agreement by the Company or such Subsidiary, in
      connection with such transfer of funds, to transfer to such Acceptable Bank
      or
      Acceptable Broker-Dealer the same or substantially similar United States
      Governmental Securities for a price

     

     

    
      
        
        

      

      
        Exhibit
          D-34

        
          

        

      

      
        
        
not
        less
        than the Transfer Price plus a reasonable return thereon at a date certain
        not
        later than 365 days after such transfer of funds,

    

    


    (b)     in
      respect of which the Company or such Subsidiary has the right, whether by
      contract or pursuant to applicable law, to liquidate such agreement upon the
      occurrence of any default thereunder, and

    


    (c)     in
      connection with which the Company or such Subsidiary, or an agent thereof,
      shall
      have taken all action required by applicable law or regulations to perfect
      a
      Lien in such United States Governmental Securities.

    


    “United
      States Governmental Security”
means
      any direct obligation of, or obligation guaranteed by, the United States of
      America, or any agency controlled or supervised by or acting as an
      instrumentality of the United States of America pursuant to authority granted
      by
      the Congress of the United States of America, so long as such obligation or
      guarantee shall have the benefit of the full faith and credit of the United
      States of America which shall have been pledged pursuant to authority granted
      by
      the Congress of the United States of America.

     

    “Restricted
      Payment”
      means

     

    (a)   any
      Distribution in respect of the Company or any Subsidiary of the Company (other
      than on account of Capital Stock of a Subsidiary owned legally and beneficially
      by the Company or another Subsidiary of the Company), including, without
      limitation, any Distribution resulting in the acquisition by the Company of
      securities which would constitute treasury stock, and 

     

    (b)     any
      payment, repayment, redemption, retirement, repurchase or other acquisition,
      direct or indirect, by the Company or any Subsidiary of, on account of, or
      in
      respect of, the principal of any Subordinated Debt (or any installment thereof)
      prior to the regularly scheduled maturity date thereof (as in effect on the
      date
      such Subordinated Debt was originally incurred).

     

    For
      purposes of this Agreement, the amount of any Restricted Payment made in
      property shall be the greater of (x) the Fair Market Value of such property
      (as
      determined in good faith by the board of directors (or equivalent governing
      body) of the Person making such Restricted Payment) and (y) the net book value
      thereof on the books of such Person, in each case determined as of the date
      on
      which such Restricted Payment is made.

     

    “Retained
      Dana Payment”
any
      portion of any cash payment received (including by way of setoff) by the Company
      or any Subsidiary (or otherwise paid in accordance with the instructions of
      the
      Company or any Subsidiary) (i) under the terms of any one or more of the Dana
      Supply Agreements upon any termination or rejection of such agreement or
      agreements in connection with or arising out of the Dana Bankruptcy Proceedings
      or (ii) constituting cash proceeds (including by way of setoff) from the sale,
      disposition, transfer or liquidation of any interest in any claim of the Company
      or any

     

     

    
      
        
        

      

      
        Exhibit
          D-35

        
          

        

      

      
        
        
Subsidiary
        for damages arising out of such termination or rejection, which, in either
        case
        is not required to be used to make the mandatory prepayments contemplated
        by
        Section 8.1(b) hereof and Section 2.4D of the Credit
        Agreement.

    

     

    “Second
      Closing”
is
      defined in Section 3.

     

    “Securities
      Act”
means
      the Securities Act of 1933, as amended from time to time.

     

    “Security
      Agreement”
means
      the Security Agreement, dated as of the Third Amendment Effective Date, among
      the Company, the Subsidiary Guarantors and the Collateral Agent, as amended,
      restated or otherwise modified from time to time.

     

    “Security
      Documents”
means,
      and is a collective reference to, the Security Agreement, the Pledge Agreement
      and each other security agreement, mortgage, deed of trust, financing statement,
      control agreement, collateral assignment and each other document, agreement,
      instrument creating (or purporting to create) any Lien in favor of the
      Collateral Agent for the benefit of the holders of Permitted Senior Secured
      Debt
      securing the obligations of the Company and its Subsidiaries under the Credit
      Agreement Documents and the Financing Documents, together with any amendment
      thereof, as each may be amended, restated or otherwise modified from time to
      time.

     

    “Senior
      Financial Officer”
means
      the chief financial officer, principal accounting officer, treasurer or
      controller of the Company. 

     

    “Series
      A Notes”
is
      defined in Section 1.

     

    “Series
      B Notes”
is
      defined in Section 1.

     

    “Series
      C Notes”
is
      defined in Section 1.

     

    “Significant
      Subsidiary”
means,
      as of the date of determination, any Subsidiary that would at such time account
      for more than 10% of (i) Consolidated Total Assets as of the end of the most
      recently completed fiscal quarter or (ii) consolidated revenue of the Company
      and its Subsidiaries for the four fiscal quarters ending as of the end of the
      most recently completed fiscal quarter.

     

    “Source” is
      defined in Section 6.2.

     

    “Specified
      Prepayment Date”
is
      defined in Section 8.1(b).

     

    “Subordinated
      Debt”
means
      any Debt that is in any manner subordinated in right of payment or security
      in
      any respect to Debt evidenced by the Notes.

     

    “Subsidiary”
means,
      as to any Person, any corporation, association or other business entity in
      which
      such Person or one or more of its Subsidiaries owns sufficient equity or voting
      interests to enable it or them (as a group) ordinarily, in the absence of
      contingencies, to elect a majority of the directors (or Persons performing
      similar

     

     

    
      
        
        

      

      
        Exhibit
          D-36

        
          

        

      

      
        
        
functions)
        of such entity, and any partnership or joint venture if more than a 50% interest
        in the profits or capital thereof is owned by such Person or one or more
        of its
        Subsidiaries (unless such partnership can and does ordinarily take major
        business actions without the prior approval of such Person or one or more
        of its
        Subsidiaries). Unless the context otherwise clearly requires, any reference
        to a
“Subsidiary” is a reference to a Subsidiary of the Company.

    

     

    “Subsidiary
      Guarantor”
is
      defined in Section 1.

     

    “Subsidiary
      Guaranty”
is
      defined in Section 1.

     

    “Subsidiary
      Guaranty Amendment”
means
      the Joinder and Amendment to Subsidiary Guaranty, dated as of the Third
      Amendment Effective Date, by and among the Subsidiary Guarantors and the
      Required Holders.

     

    “Subsidiary
      Stock”
means,
      with respect to any Person, the Capital Stock (or any options or warrants to
      purchase Capital Stock or other securities exchangeable for or convertible
      into
      Capital Stock) of any Subsidiary of such Person.

     

    “Synthetic
      Lease”
means
      any lease (i) that is treated as an operating lease for accounting purposes,
      with the result that the obligations with respect to such lease are not
      classified as a liability on a balance sheet, in conformity with GAAP, and
      (ii)
      that is treated as a conditional sale for Federal income tax purposes, with
      the
      result that the lessee of such lease is entitled to take depreciation on the
      leased property and to characterize rental payments as payments of principal
      and
      interest for Federal income tax purposes.

     

    “Third Amendment”
means
      the Third Amendment to Note Purchase Agreement dated as of April 6, 2007 by
      and
      among the Company and the Required Holders, as amended, restated or otherwise
      modified from time to time.

     

    “Third
      Amendment Effective Date”
means
      April 6, 2007.

     

    “Third
      Anniversary Date”
is
      defined in Section 10.15(b).

     

    “Third
      Closing”
is
      defined in Section 3.

     

    “this
      Agreement” or “the
      Agreement” is
      defined in Section 17.3.

     

    “USA
      Patriot Act”
means
      Public Law 107-56 of the United States of America, United and Strengthening
      America by Providing Tools Required to Intercept and Obstruct Terrorism (USA
      PATRIOT) Act of 2001.

     

    “Voting
      Stock”
means
      the capital stock of any class or classes of a corporation, or equivalent
      interests in any other Person, having power under ordinary circumstances to
      vote
      for the election of members of the board of directors of such corporation,
      or
      person performing similar functions (irrespective of whether or not at the
      time
      stock of any of

     

     

    
      
        
        

      

      
        Exhibit
          D-37

        
          

        

      

      
        
        
the
        class
        or classes, or equivalent interests, shall have or might have special voting
        power or rights by reason of the happening of any
        contingency).

    

     

    “Wholly
      Owned Subsidiary”
means,
      at any time, any Subsidiary 100% of all of the equity interests (except
      directors’ qualifying shares) and voting interests of which are owned by any one
      or more of the Company and the Company’s other Wholly Owned Subsidiaries at such
      time.”

     

    
      	26.  	
              Schedule
                B to the Existing Note Agreement is hereby amended by deleting the
                following definitions appearing
                therein:

            


    

     

    Consolidated
      Debt

     

    Consolidated
      Total Capitalization

     

    Priority
      Debt

     

     

     

     

     

     

    
 

    Exhibit
      D-38