Document:

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, 

     

     

    
      
        
        

      

      
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      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-38Amended and Restated Loan Agreement

EXHIBIT
    10.2
    

    

    

    AMENDED
      AND RESTATED LOAN AGREEMENT

    dated
      as of April 6, 2007

    

    By
      and between

     

    SYPRIS
      SOLUTIONS, INC.

    as
      the Borrower

    

    and

    

    SYPRIS
      TEST & MEASUREMENT, INC.

    SYPRIS
      TECHNOLOGIES, INC.

    SYPRIS
      ELECTRONICS, LLC

    SYPRIS
      DATA SYSTEMS, INC.

    SYPRIS
      TECHNOLOGIES MARION, LLC

    SYPRIS
      TECHNOLOGIES KENTON, INC.

    SYPRIS
      TECHNOLOGIES MEXICAN HOLDINGS, LLC

    as
      Guarantors

    

    and

    

    JP
      MORGAN CHASE BANK, N.A.

    as
      Administrative Agent, Syndications Agent and Collateral
      Agent

    

    and

    

    LASALLE
      BANK NATIONAL ASSOCIATION

    as
      Documentation Agent

     

    and

    

    JP
      MORGAN CHASE BANK, N.A.

    LASALLE
      BANK NATIONAL ASSOCIATION

    NATIONAL
      CITY BANK

    

    as
      Banks

    

    

    
 

    
      
        
          

          

          

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    TABLE
      OF CONTENTS

     

    
                                                                   
        Page

      

      
        	
                SECTION
                  1

              	
                DEFINITIONS
                  AND CROSS
                  REFERENCE...................................................................................................................

              	
                5

              
	 	 	 
	
                SECTION
                  2

              	
                REVOLVING
                  CREDIT
                  FACILITY..............................................................................................................................

              	
                23

              
	
                2.1

              	
                Revolving
                  Loan Commitments, Revolving Credit
                  Loans...............................................................................................

              	
                23

              
	
                2.2

              	
                Interest
                  on the Revolving Credit
                  Loans.....................................................................................................................

              	
                29

              
	
                2.3

              	
                Fees...................................................................................................................................................................

              	
                32

              
	
                2.4

              	
                Prepayments
                  and Payments; Reductions in Revolving Loan
                  Commitments.......................................................................................................................................................

              	
                 

                34

              
	
                2.5

              	
                Use
                  of
                  Proceeds...................................................................................................................................................

              	
                37

              
	
                2.6

              	
                Swing
                  Line Credit
                  Subfacility...................................................................................................................................

              	
                37

              
	
                2.7

              	
                Letters
                  of
                  Credit....................................................................................................................................................

              	
                39

              
	 	 	 
	
                SECTION
                  3

              	
                SPECIAL
                  PROVISIONS GOVERNING EURODOLLAR 

                LOANS..........................................................................................................................................................................

              	
                 

                46

              
	
                3.1

              	
                Determination
                  of the Adjusted LIBOR rate plus the Applicable LIBOR
                  Margin...................................................................................................................................................................

              	
                 

                46

              
	
                3.2

              	
                Inability
                  to Determine Adjusted LIBOR
                  Rate..............................................................................................................

              	
                47

              
	
                3.3

              	
                Illegality
                  or Impracticability of Eurodollar
                  Loans.........................................................................................................

              	
                47

              
	
                3.4

              	
                Compensation
                  For Breakage or Non-Commencement of Interest

                Periods...............................................................................................................................................................

              	
                 

                48

              
	
                3.5

              	
                Booking
                  of Eurodollar
                  Loans...................................................................................................................................

              	
                48

              
	
                3.6

              	
                Assumptions
                  Concerning Funding of Eurodollar
                  Loans...............................................................................................

              	
                48

              
	
                3.7

              	
                Eurodollar
                  Loans After Event of
                  Default....................................................................................................................

              	
                49

              
	 	 	 
	
                SECTION
                  4

              	
                CLOSING
                  CONDITIONS.........................................................................................................................................

              	
                49

              
	
                4.1

              	
                Initial
                  Closing
                  Conditions.......................................................................................................................................

              	
                49

              
	
                4.2

              	
                Conditions
                  to All Revolving Credit Loans, Letters of Credit and Swing Line
                  Loans........................................................................................................................................................................

              	
                 

                51

              
	
                4.3

              	
                Conditions
                  Subsequent.........................................................................................................................................

              	
                52

              
	 	 	 
	
                SECTION
                  5

              	
                REPRESENTATIONS
                  AND
                  WARRANTIES...............................................................................................................

              	
                54

              
	
                5.1

              	
                Organization,
                  Standing, etc. of the Borrower and the
                  Guarantors...................................................................................

              	
                54

              
	
                5.2

              	
                Qualification.........................................................................................................................................................

              	
                54

              
	
                5.3

              	
                Use
                  of
                  Proceeds...................................................................................................................................................

              	
                55

              
	
                5.4

              	
                Intellectual
                  Property..............................................................................................................................................

              	
                55

              
	
                5.5

              	
                Disclosure;
                  Solvency............................................................................................................................................

              	
                55

              
	
                5.6

              	
                Tax
                  Returns and
                  Payments.....................................................................................................................................

              	
                55

              
	
                5.7

              	
                Funded
                  Debt; Financial
                  Information.........................................................................................................................

              	
                56

              
	
                5.8

              	
                Title
                  to Properties; Liens;
                  Leases.............................................................................................................................

              	
                56

              
	
                5.9

              	
                Litigation,
                  etc.......................................................................................................................................................

              	
                56

              
	 	
                -i-

              	 
	 	 	 
	
                5.10

              	
                Authorization;
                  Compliance With Other Instruments,
                  etc..............................................................................................

              	
                56

              
	
                5.11

              	
                Enforceability......................................................................................................................................................

              	
                57

              
	
                5.12

              	
                Governmental
                  Consent...........................................................................................................................................

              	
                57

              
	
                5.13

              	
                Environmental
                  Matters...........................................................................................................................................

              	
                57

              
	
                5.14

              	
                Depository
                  Accounts...........................................................................................................................................

              	
                59

              
	 	 	 
	
                SECTION
                  6

              	
                AFFIRMATIVE
                  COVENANTS.................................................................................................................................

              	
                59

              
	
                6.1

              	
                Corporate
                  Existence and Good
                  Standing....................................................................................................................

              	
                59

              
	
                6.2

              	
                Money
                  Obligations, Payment of Taxes, ERISA,
                  etc.....................................................................................................

              	
                59

              
	
                6.3

              	
                Financial
                  Statements and
                  Reports............................................................................................................................

              	
                60

              
	
                6.4

              	
                Financial
                  Records;
                  Inspection.................................................................................................................................

              	
                63

              
	
                6.5

              	
                Maintenance
                  of Properties,
                  etc...............................................................................................................................

              	
                63

              
	
                6.6

              	
                Permits,
                  Certificates, Leases,
                  Licenses.......................................................................................................................

              	
                63

              
	
                6.7

              	
                Notice................................................................................................................................................................

              	
                63

              
	
                6.8

              	
                Payment
                  of
                  Obligations..........................................................................................................................................

              	
                64

              
	
                6.9

              	
                Environmental
                  Matters...........................................................................................................................................

              	
                64

              
	
                6.10

              	
                Insurance............................................................................................................................................................

              	
                64

              
	
                6.11

              	
                Environmental
                  Compliance.....................................................................................................................................

              	
                65

              
	
                6.12

              	
                Material
                  Change in
                  Management..............................................................................................................................

              	
                66

              
	
                6.13

              	
                Depository
                  Accounts............................................................................................................................................

              	
                66

              
	 	 	 
	
                SECTION
                  7

              	
                NEGATIVE
                  COVENANTS.......................................................................................................................................

              	
                67

              
	
                7.1

              	
                Mergers,
                  Acquisitions and Other Extraordinary
                  Events...............................................................................................

              	
                67

              
	
                7.2

              	
                Sales
                  of Assets;
                  Dispositions.................................................................................................................................

              	
                67

              
	
                7.3

              	
                Indebtedness,
                  Guaranties,
                  etc................................................................................................................................

              	
                68

              
	
                7.4

              	
                Mortgages,
                  Liens, Encumbrances, Security Interests, Assignments,
                  etc.....................................................................................................................................................................

              	
                 

                69

              
	
                7.5

              	
                Nature
                  of
                  Businesses..............................................................................................................................................

              	
                70

              
	
                7.6

              	
                Fixed
                  Charge Coverage
                  Ratio..................................................................................................................................

              	
                70

              
	
                7.7

              	
                Ratio
                  of Adjusted Funded Debt to
                  EBITDA...............................................................................................................

              	
                70

              
	
                7.8

              	
                Minimum
                  Net
                  Worth..............................................................................................................................................

              	
                71

              
	
                7.9

              	
                Rate
                  Management Transaction Agreements and Interest Rate
                  Agreements........................................................................................................................................................

              	
                 

                71

              
	
                7.10

              	
                Capital
                  Expenditures..............................................................................................................................................

              	
                71

              
	
                7.11

              	
                Limitation
                  on Operating Lease
                  Rentals......................................................................................................................

              	
                71

              
	
                7.12

              	
                New
                  Subsidiaries..................................................................................................................................................

              	
                71

              
	
                7.13

              	
                Restricted
                  Payments..............................................................................................................................................

              	
                72

              
	
                7.14

              	
                Government
                  Regulation..........................................................................................................................................

              	
                72

              
	
                7.15

              	
                Use
                  of
                  Assets......................................................................................................................................................

              	
                72

              
	
                7.16

              	
                Investments;
                  Loans and
                  Advances.........................................................................................................................

              	
                73

              
	 	 	 
	
                SECTION
                  8

              	
                EVENTS
                  OF DEFAULT;
                  ACCELERATION.................................................................................................................

              	
                74

              
	
                8.1

              	
                Events
                  of
                  Default..................................................................................................................................................

              	
                74

              
	 	 	 
	
                SECTION
                  9

              	
                REMEDIES
                  UPON DEFAULT,
                  ETC..........................................................................................................................

              	
                76

              
	 	 	 
	 	
                -ii-

              	 
	 	 	 
	
                9.1

              	
                Defaults..............................................................................................................................................................

              	
                76

              
	
                9.2

              	
                Offset.................................................................................................................................................................

              	
                76

              
	
                9.3

              	
                Rights
                  Cumulative.................................................................................................................................................

              	
                76

              
	
                9.4

              	
                Payment
                  of Costs and
                  Expenses..............................................................................................................................

              	
                76

              
	 	 	 
	
                SECTION
                  10

              	
                THE
                  AGENT
                  BANK..............................................................................................................................................

              	
                77

              
	
                10.1

              	
                Appointment.......................................................................................................................................................

              	
                77

              
	
                10.2

              	
                Delegation
                  of
                  Duties.............................................................................................................................................

              	
                77

              
	
                10.3

              	
                Nature
                  of Duties; Independent Credit
                  Investigation...................................................................................................

              	
                77

              
	
                10.4

              	
                Actions
                  in Discretion of the Agent Bank;: Instructions from the
                  Banks...............................................................................................................................................................

              	
                 

                78

              
	
                10.5

              	
                Reimbursement
                  and Indemnification of the Agent Bank and the Banks by the
                  Borrower.................................................................................................................................................................

              	
                 

                78

              
	
                10.6

              	
                Exculpatory
                  Provisions..........................................................................................................................................

              	
                79

              
	
                10.7

              	
                Reimbursement
                  and Indemnification of the Agent Bank by the
                  Banks.................................................................................................................................................................

              	
                 

                79

              
	
                10.8

              	
                Reliance
                  by the Agent
                  Bank...................................................................................................................................

              	
                80

              
	
                10.9

              	
                Notice
                  of
                  Default..................................................................................................................................................

              	
                80

              
	
                10.10

              	
                The
                  Banks in Their Individual
                  Capacities...................................................................................................................

              	
                80

              
	
                10.11

              	
                Holders
                  of Revolving Credit
                  Notes..........................................................................................................................

              	
                80

              
	
                10.12

              	
                Equalization
                  of the
                  Banks.......................................................................................................................................

              	
                80

              
	
                10.13

              	
                Successor
                  Agent
                  Bank..........................................................................................................................................

              	
                81

              
	
                10.14

              	
                Calculations.........................................................................................................................................................

              	
                81

              
	
                10.15

              	
                Withholding
                  Tax...................................................................................................................................................

              	
                81

              
	
                10.16

              	
                Beneficiaries........................................................................................................................................................

              	
                83

              
	 	 	 
	
                SECTION
                  11

              	
                ASSIGNMENTS
                  AND
                  PARTICIPATIONS................................................................................................................

              	
                83

              
	 	 	 
	
                SECTION
                  12

              	
                INDEMNITY.......................................................................................................................................................

              	
                84

              
	 	 	 
	
                SECTION
                  13

              	
                INCREASED
                  COSTS; TAXES; CAPITAL
                  ADEQUACY...............................................................................................

              	
                84

              
	
                13.1

              	
                Compensation
                  for Increased Costs and
                  Taxes...........................................................................................................

              	
                84

              
	
                13.2

              	
                Withholding
                  of
                  Taxes............................................................................................................................................

              	
                85

              
	
                13.3

              	
                Capital
                  Adequacy
                  Adjustment...............................................................................................................................

              	
                86

              
	
                13.4

              	
                Banks'
                  Obligation to
                  Mitigate.................................................................................................................................

              	
                87

              
	 	 	 
	
                SECTION
                  14

              	
                NOTICES............................................................................................................................................................

              	
                87

              
	 	 	 
	
                SECTION
                  15

              	
                MISCELLANEOUS...............................................................................................................................................

              	
                88

              
	
                15.1

              	
                Ratable
                  Sharing...................................................................................................................................................

              	
                88

              
	
                15.2

              	
                Waiver...............................................................................................................................................................

              	
                89

              
	
                15.3

              	
                Survival
                  of Representations and
                  Warranties.............................................................................................................

              	
                89

              
	
                15.4

              	
                Invalidity...........................................................................................................................................................

              	
                90

              
	
                15.5

              	
                Assignment........................................................................................................................................................

              	
                90

              
	
                15.6

              	
                Governing
                  Law....................................................................................................................................................

              	
                90

              
	 	 	 
	 	
                -iii-

              	 
	 	 	 
	
                15.7

              	
                Section
                  Headings................................................................................................................................................

              	
                90

              
	
                15.8

              	
                Entire
                  Agreement.................................................................................................................................................

              	
                90

              
	
                15.9

              	
                Time
                  of the
                  Essence.............................................................................................................................................

              	
                90

              
	
                15.10

              	
                Modifications......................................................................................................................................................

              	
                90

              
	
                15.11

              	
                Submission
                  to Jurisdiction,
                  Etc...............................................................................................................................

              	
                91

              
	
                15.12

              	
                USA
                  Patriot Act
                  Notification..................................................................................................................................

              	
                91

              

      

      

LIST
      OF
      SCHEDULES:

    

    Schedule
      1.1 List
      of
      Banks

    Schedule
      1.2 List
      of
      Guarantors

    Schedule
      2.1 Revolving
      Loan Commitments and Revolving Credit Facility Pro Rata Shares of the
      Banks

    Schedule
      5.2  Information
      on Borrower and Guarantors

    Schedule
      5.7  Schedule
      of Indebtedness

    Schedule
      5.9  Schedule
      of Litigation

    Schedule
      7.4  Schedule
      of Liens on Assets

    

    LIST
      OF
      EXHIBITS

    

    Exhibit
      A: Form
      of
      Amended and Restated Revolving Credit Promissory Note

    Exhibit
      B: Amended
      and Restated Negative Pledge Agreement

    Exhibit
      C: Form
      of
      Application and Agreement for Letter of Credit

    Exhibit
      D: Form
      of
      Notice of Conversion/Continuation

    Exhibit
      E: Request
      For Revolving Credit Loan

    Exhibit
      F: Request
      for Swing Line Loan 

    Exhibit
      G: Form
      of
      Compliance Certificate

    Exhibit
      H: Borrower
      Counsel Opinion

    Exhibit 
      I: Amended
      and Restated Guaranty Agreement 

    Exhibit
      J: Pledge
      Agreement

    Exhibit
      K:  Form
      of
      Lender Joinder

    Exhibit
      L:  Certificate
      of Departing Banks

     

    

    

    

    

    

    
      
        
          

          

          -iv
            -

          

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

        

      

    

    

    AMENDED
      AND RESTATED LOAN AGREEMENT 

    

    THIS
      AMENDED AND RESTATED LOAN AGREEMENT (this "Loan Agree-ment"), is made and
      entered into as of the 6th day of April, 2007, by and among (i) JP MORGAN CHASE
      BANK, N.A., a national banking association, acting for the Banks as
      Administrative Agent, Syndications Agent and Collateral Agent (referred to
      herein as the "Agent Bank") (JP Morgan Chase Bank, N.A. may also be referred
      to
      as a "Bank"); (ii) LASALLE BANK, NATIONAL ASSOCIATION, acting as Documentation
      Agent (referred to herein as the "Documentation Agent") (LaSalle Bank, National
      Association may also be referred to as a "Bank"); (iii) the BANKS identified
      on
Schedule
      1.1
      hereto
      (each a "Bank" and collectively, the "Banks"); (iv) SYPRIS SOLUTIONS, INC.,
      a
      Delaware corporation with its principal office and place of business and
      registered office in Louisville, Jefferson County, Kentucky (the "Borrower")
      and
      (v) the GUARANTORS identified on Schedule
      1.2
      hereto
      (each a "Guarantor" and collectively, the "Guarantors").

    

    P
      R E
      L I M I N A R Y S
      T A
      T E M E N T:

    

    A.      Original
      Loan Agreement.
      Certain
      of the Guarantors and their Affiliate entered into a Loan Agreement dated as
      of
      March 21, 1997 with the Agent Bank (the "Original Loan Agreement"), whereby
      the
      Agent Bank has extended in favor of the Guarantors a revolving line of credit
      in
      the amount of $20,000,000, a term loan in the amount of $10,000,000 and a swing
      line of credit subfacility in the amount of $5,000,000.

    

    B.      1997A
      Loan Agreement.
      The
      predecessors to the Borrower and certain of the Guarantors entered into a 1997A
      Amended and Restated Loan Agreement dated as of November 1, 1997 with the Agent
      Bank (the "1997A Loan Agreement"), whereby the Agent Bank increased the
      revolving line of credit to $30,000,000 and the term loan to $15,000,000 and
      provided the swing line of credit subfacility in the amount of $5,000,000.
      The
      1997A Loan Agreement was subsequently amended by, among other amendments, the
      1998B Amendment to Loan Documents.

    

    C.     1999
      Loan Agreement.
      The
      Borrower, certain of the Guarantors, the Agent Banks and the Banks entered
      into
      the 1999 Amended and Restated Loan Agreement dated as of October 27, 1999 (the
      "1999 Loan Agreement"), which amended, restated and replaced the Original Loan
      Agreement and the 1997A Loan Agreement, as amended by the 1998B Amendment.
      The
      1999 Loan Agreement provided for (i) a revolving line of credit in the amount
      of
      $100,000,000, (ii) a swing line subfacility of $5,000,000 and (iii) a letter
      of
      credit subfacility of $15,000,000.

    

    D.     2001A
      Amendment to Loan Documents.
      The
      Borrower, certain of the Guarantors, the Agent Bank and the Banks entered into
      the 2001A Amendment to Loan Documents dated as of February 15, 2001 and having
      an effective date of December 31, 2000 (the "2001A Amendment") in order to
      (i)
      change certain financial covenants and (ii) make certain other changes as set
      forth therein.

    

    E.     2002A
      Amendment to Loan Documents.
      The
      Borrower, the Guarantors, the Agent

     

     

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        
 Bank
        and the Banks entered into the 2002A Amendment to Loan Documents dated as
        of
        December 21, 2001 and having an effective date of January 1, 2002 (the "2002A
        Amendment") in order to (i) to restructure, reorganize and/or rename, as
        applicable, certain of the Guarantors, and to add a Guarantor and (ii) to
        amend
        the 1999 Loan Agreement and other Loan Documents to reflect such changes
        in the
        Guarantors and (iii) make certain other changes as set forth therein.

    

    

    F.     2002B
      Amendment to Loan Documents.
      The
      Borrower, the Guarantors, the Agent Bank and the Banks entered into the 2002B
      Amendment to Loan Documents dated as of July 3, 2002 (the "2002B Amendment")
      in
      order to (i) increase the revolving line of credit to $125,000,000, (ii) add
      a
      new participant Bank and (iii) make certain other changes as set forth therein.
      

    

    G.     2003A
      Amendment to Loan Documents.
      The
      Borrower, the Guarantors, the Agent Bank and the Banks entered into the 2003A
      Amendment to Loan Documents dated as of October 16, 2003 (the "2003A Amendment")
      in order to (i) extend the maturity of the line of credit from January 2, 2005
      to October 16, 2008, (ii) to add a new Section 2.1G to the 1999 Loan Agreement
      providing a mechanism for Borrower to increase its line of credit by an
      additional $25,000,000 and (iii) to make certain other changes as set forth
      therein. 

    

    H.     Issuance
      of Senior Notes.
      The
      Agent Bank and the Banks in May 2004 consented to the Borrower's issuance of
      $55,000,000 of senior notes pursuant to a note purchase agreement.

    

    I.     Creation
      of New Subsidiary, Sypris Technologies Kenton, Inc.
      The
      Borrower in April 2004 created a new subsidiary, Sypris Technologies Kenton,
      Inc., a Delaware corporation ("STK"), and the Agent Bank and the Banks consented
      to the creation of STK as a subsidiary, on the condition that STK become a
      Guarantor under the 1999 Loan Agreement. STK became a Guarantor under the Loan
      Agreement by executing and delivering to the Agent Bank a Guaranty Agreement
      dated June 1, 2004, guarantying the obligations of the Borrower to the Banks
      (the "STK Guaranty").

    

    J.     The
      Toluca Facility and the Toluca Subsidiaries.
      The
      Borrower in June 2004 requested that the Banks consent to the Borrower's
      acquisition of a facility in Toluca, Mexico (the "Toluca Facility"). The Banks
      consented to the acquisition of the Toluca Facility. The Borrower created the
      following second tier subsidiary and third tier subsidiaries related to the
      Toluca Facility: (i) Sypris Technologies Mexican Holdings, LLC (the interests
      of
      which are held by Sypris Technologies, Inc.) and (ii) Sypris Technologies
      Mexico, S. de R.L. de C.V. and Sypris Technologies Toluca, S.A. de C.V. (the
      interests of which are held by Sypris Technologies Mexican Holdings, LLC and
      Sypris Technologies, Inc.) (all of the foregoing Subsidiaries are referred
      to as
      the "Toluca Subsidiaries").

    

    K.     2005A
      Amendment to Loan Documents.
      The
      Borrower, the Guarantors, the Agent Bank and the Banks entered into the 2005A
      Amendment to Loan Documents dated as of March 10, 2005 (the "2005A Amendment")
      in order to (i) to include provisions related to the Borrower's issuance of
      $55,000,000 of senior notes in May 2004, (ii) to amend one of the financial
      

     

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        
covenants
        of the 1999 Loan Agreement, (iii) to include a provision related to the Toluca
        Facility and (iv) to make certain other changes as set forth therein.

    

    

    L.     2005B
      Amendment to Loan Documents.
      The
      Borrower, the Guarantors, the Agent Bank and the Banks entered into the 2005B
      Amendment to Loan Documents dated as of May 10, 2005 (the "2005B Amendment")
      in
      order to in order to extend a deadline for taking certain action with respect
      to
      the Toluca Subsidiaries and to make certain other changes as set forth
      therein.

    

    M.     2005C
      Amendment to Loan Documents.
      The
      Borrower, the Guarantors, the Agent Bank and the Banks entered into the 2005C
      Amendment to Loan Documents dated as of August 3, 2005 (the "2005C Amendment")
      in order to in order to extend a deadline for taking certain action with respect
      to the Toluca Subsidiaries and to make certain other changes as set forth
      therein.

    

    N.     Pledge
      Agreement.
      Sypris
      Technologies Mexican Holdings, LLC and Sypris Technologies, Inc. entered into
      a
      Pledge Agreement dated as of September 13, 2005 (the "Pledge Agreement"), for
      the purpose of pledging 65% of the stock or interests in certain foreign
      subsidiaries to the Agent Bank, for the benefit of the Banks and the
      Noteholders. The Agent Bank and the Noteholders entered into a Collateral
      Sharing Agreement dated as of September 13, 2005, with respect to the pledged
      stock and interests.

    

    O.     2006A
      Amendment to Loan Documents.
      The
      Borrower and the Guarantors by letter dated February 14, 2006 notified the
      Agent
      Bank and the Banks that they wished to permanently reduce in part the Revolving
      Loan Commitments, from $125,000,000 to $100,000,000, pursuant to Section 2.4C
      of
      the Loan Agreement. The Borrower, the Guarantors, the Agent Bank and the Banks
      entered into the 2006A Amendment to Loan Documents dated as of February 28,
      2006
      (the "2006A Amendment") (i) acknowledging the reduction in size of the Revolving
      Credit Facility to $100,000,000; (ii) modifying the definition of "EBITDA,"
      (iii) modifying the Fixed Charge Coverage Ratio and (iv) adding a capital
      expenditures limitation to the negative covenants.

    

    P.     Voluntary
      Reduction of Revolving Credit Facility from $100,000,000 to
      $75,000,000. The
      Borrower and the Guarantors by letter dated February 26, 2007, notified the
      Agent Bank and the Banks that they wish to permanently reduce in part the
      Revolving Loan Commitments, from $100,000,000 to $75,000,000, effective February
      26, 2007, pursuant to Section 2.4C of the Loan Agreement.

    

    Q.     Further
      Voluntary Reduction of Revolving Credit Facility from $75,000,000 to
      $50,000,000. The
      Borrower and the Guarantors have notified the Agent Bank and the Banks that
      they
      wish to further permanently reduce in part the Revolving Loan Commitments,
      from
      $75,000,000 to $50,000,000, pursuant to Section 2.4C of the Loan Agreement,
      subject to the Borrower's right to increase the Revolving Loan Commitments
      by up
      to $50,000,000 pursuant to Section 2.1G hereof.

     

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    

    R.     Amendment
      and Restatement of 1999 Loan Agreement.
      The
      Borrower, the Guarantors, the Agent Bank and the Banks wish to amend and restate
      the 1999 Loan Agreement to reflect the many changes effected by the numerous
      amendments occurring subsequent to the 1999 Loan Agreement. 

    

    NOW,
      THEREFORE, in consideration of the premises and the mutual covenants and
      agreements set forth herein and for other good and valuable consideration,
      the
      mutuality, receipt and sufficiency of which are hereby acknowledged, the parties
      hereto hereby agree as follows:

    

    

    
      
        

        

         

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    SECTION
      1

    DEFINITIONS
      AND CROSS REFERENCE

    

    

    Certain
      terms used in this Loan Agreement are defined in this Section 1; other terms
      are
      defined elsewhere in this Loan Agreement.

    

    1.1  "Adjusted
      Funded Debt" means Funded Debt less all book cash balances (provided that the
      deduction for any cash balances of the Borrower's Subsidiaries maintained
      outside the United States is limited to Ten Million Dollars
      ($10,000,000)).

    

    1.2  "Adjusted
      LIBOR Rate" means, with respect to any Eurodollar Loan for any Interest Period,
      an interest rate per annum (rounded upwards, if necessary, to the next 1/16
      of
      1%) equal to (a) the LIBOR Rate for such Interest Period multiplied by (b)
      the
      Statutory Reserve Rate.
      

    

    1.3  "Advance"
      means with respect to the Borrower, each and every advance of proceeds under
      the
      Revolving Credit Facility, the Letter of Credit Subfacility, or the Swing Line
      Credit Subfacility, directly or indirectly, to the Borrower, regardless of
      whether such advance is accounted for under GAAP as an extension of credit,
      a
      contribution of capital or otherwise.

    

    1.4  "Affiliate"
      means, as applied to any Person, (i) any other Person directly or indirectly
      controlling, controlled by, or under common control with, that Person, (ii)
      any
      other Person that, directly or indirectly, owns or controls, whether
      beneficially or as a trustee, guardian or other fiduciary, 10% or more of the
      stock having ordinary voting power in the election of directors of such Person,
      or (iii) each of such Person's directors and officers ap-pointed by the board
      of
      directors of such Person. For the purposes of this definition, "control"
      (including with correlative meanings, the terms "controlling," "controlled
      by"
      and "under common control with"), as applied to any Person, means the
      possession, directly or indirectly, of the power to direct or cause the
      direction of the management and policies of that Person, whether through the
      owner-ship of voting securities or by contract or otherwise.

    

    1.5  "Agent
      Bank" has the meaning assigned to that term in the introduction to this Loan
      Agreement. The Agent Bank acts as Administrative Agent, Syndications Agent
      and
      Collateral Agent for the Banks under this Loan Agreement. JPMorgan Chase Bank,
      N.A. is serving as Agent Bank hereunder.

    

    1.6  "And/or"
      means one or the other or both, or any one or more or all, of the things or
      persons or parties in connection with which the conjunction is
      used.

    

    1.7  "Applicable
      Base Rate Margin" means the applicable per annum percentage set forth in the
      table appearing in Section 2.2A hereof, with respect to Base Rate Loans.

    

    1.8  "Applicable
      Commitment Fee Percentage" means the applicable per annum percentage set forth
      in the table appearing in Section 2.3A hereof, with respect to the calculation
      

     

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        
of
        Revolving Credit Facility Commitment Fees.

    

    

    1.9  "Applicable
      Letter of Credit Percentage" means the applicable per annum percentage set
      forth
      in the table appearing in Section 2.7F of the Loan Agreement.

    

    1.10  "Applicable
      LIBOR Margin" means the applicable per annum per-centage set forth in the table
      appearing in Section 2.2A hereof, with respect to Eurodollar Loans.

    

    1.11  "Application
      and Agreement for Letter of Credit" means the document substantially in the
      form
      of Exhibit
      C
      annexed
      hereto, with appropriate insertions and deletions, with respect to the proposed
      issuance or amendment of a Letter of Credit.

    

    1.12  "Authorized
      Officer" means the President, the Financial Officer and any other officer of
      the
      Borrower, who, by the Certificate of Incorporation, Bylaws or Resolu-tions
      of
      the Board of Directors of the Borrower, is authorized to execute and deliver
      this Loan Agreement and the other Loan Documents on behalf of the
      Borrower.

    

    1.13  "Average
      Revolving Credit Facility Usage " shall have the meaning set forth in Section
      2.3A hereof. 

    

    1.14  "Banks"
      has the meaning assigned to that term in the introduction to this Loan
      Agreement.

    

    1.15  "Bankruptcy
      Code" means Title 11 of the United States Code entitled "Bankruptcy" as now
      and
      hereafter in effect, or any successor statute.

    

    1.16  "Base
      Rate" means at any time the variable interest rate per annum that is the higher
      of (i) the Agent Bank's Prime Rate as announced publicly and changing from
      time
      to time when such Prime Rate changes or (ii) the Federal Funds Effective Rate
      plus 1/2%.

    

    1.17  "Base
      Rate Loan" means Loans bearing interest at rates determined with reference
      to
      the Base Rate, as the same may change from time to time, as provided in Section
      2.2A with respect to Revolving Credit Loans that are Base Rate
      Loans.

    

    1.18  "Borrower's
      Loan Accounts" means the accounts respec-tively on the books of the Banks in
      which will be recorded Loans -made by the Banks to the Borrower, payments made
      on such Loans and other appropriate debits and credits as provided by this
      Loan
      Agreement.

    

    1.19  "Business
      Combination" means any acquisition or merger, regardless of whether the value
      of
      the consideration paid or received is comprised of cash, assets, common stock,
      preferred stock, partnership interests, limited liability company or limited
      liability partnership interests.

    

    1.20  "Business
      Day" means any day that is not a Saturday, Sunday or other day on which
      commercial banks in New York City or Louisville, Kentucky are authorized or
      required

     

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        
 by
        law to remain closed; provided
        that,
        when used in connection with a Eurodollar Loan, the term "Business
        Day"
        shall
        also exclude any day on which banks are not open for dealings in dollar deposits
        in the London interbank market. 

    

    

    1.21  "Capital
      Expenditure" shall mean, for any period, the consolidated sum of all
      expenditures by, or obligations incurred by, the Borrower and its Subsidiaries
      for an asset which 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 Borrower and its
      Subsidiaries as equipment, real property or improvements, fixed assets or a
      similar type of capitalized asset, all in accordance with GAAP. 

    

    1.22  "Change
      in Control" means the acquisition by any Person or "group" (as defined in
      Section 13 (d) (3) of the Securities Exchange Act of 1934, as amended) of more
      than 50% of the Voting Stock of the Borrower by a Person or "group" other than
      the shareholders (or their Affiliates) of the Borrower in existence as of the
      Closing Date, including any such acquisition by merger or
      consolidation.

    

    1.23  "Closing
      Date" means April 6, 2007. 

    

    1.24 “Collateral
      Agent” means J.P. Morgan Chase Bank, N.A. in its capacity as Collateral Agent
      for the Banks and the holders of $55,000,000.00 Senior Notes under that certain
      Amended and Restated Collateral Sharing Agreement, dated as of April 6, 2007,
      together with any successor in such capacity.

    

    1.25  "Commitment
      Increase Effective Date" shall have the meaning set forth in Section 2.1G
      hereof. 

    

    1.26  "Companies"
      means the Borrower and the Guarantors.

    

    1.27  "Compliance
      Certificate" means a certificate substan-tially in the form of Exhibit
      G
      annexed
      hereto delivered by the Borrower to the Agent Bank pursuant to Section 6.3D
      hereof. 

    

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

    

    1.29  "Contingent
      Obligations" means, with respect to the Borrower or any Guarantor, any direct
      or
      indirect liability, contingent or otherwise of the Borrower or Guarantor, (i)
      with respect to any indebtedness, lease, divi-dend, letter of credit or other
      obligation of another if the pri-mary purpose or intent thereof by the Borrower
      or Guarantor is to provide assur-ance to the obligee of such obligation of
      another that such obliga-tion 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 the
      Borrower or Guarantor or for which the Borrower or Guarantor is otherwise liable
      for reim-bursement thereof, or (iii) under interest rate swap 

     

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        
agreements,
        interest rate collar agreements or other similar arrangements pro-viding
        interest rate protection. Contingent Obligations shall include, without
        limitation, (a) the direct or indirect guaranty, endorsement (otherwise than
        for
        collection or deposit in the ordi-nary course of business), co-making,
        discounting with recourse or sale with recourse by the Borrower or Guarantor
        of
        the obligation of another, and (b) any liability of the Borrower or Guarantor
        for the obligations of another through any agreement (contingent or otherwise)
        (1) to pur-chase, 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 pay-ments 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
        pur-pose or intent thereof is as described in clause (i) of the preced-ing
        sentence. The amount of any Contingent Obligation, as at any time of
        determination, shall be equal to the amount of the obliga-tion so guaranteed
        or
        otherwise supported at such time of determi-nation which amount shall be
        deemed
        to be the amount of such obli-gation guaranteed, as reasonably estimated
        by the
        Borrower or Guarantor, if such amount cannot be specifically determined at
        the
        time of determina-tion.

    

    

    1.30  
      "Control
      Letter" means a letter agreement between Agent Bank and (i) the issuer of
      uncertificated securities with respect to uncertificated securities in the
      name
      of Borrower or any Guarantor, (ii) a securities intermediary with respect to
      securities, whether certificated or uncertificated, securities entitlements
      and
      other financial assets held in a securities account in the name of any Borrower
      or any Guarantor, (iii) a futures commission merchant or clearing house, as
      applicable, with respect to commodity accounts and commodity contracts held
      by
      any Borrower or any Guarantor, whereby, among other things, the issuer,
      securities intermediary or futures commission merchant limits any security
      interest in the applicable financial assets in a manner reasonably satisfactory
      to Collateral Agent, acknowledges the first lien of Collateral Agent, on behalf
      of itself, the Banks and the holders of the $55,00,000 Senior Notes, on such
      financial assets, and agrees to follow the instructions or entitlement orders
      of
      Collateral Agent without further consent by the affected Borrower or
      Guarantor.

    

    1.31  "Covered
      Tax" means any Tax that is not an Excluded Tax.

    

    1.32  "Creditors'
      Share" means, with respect to any Dana Partial Termination Payment (other than
      a
      Dana Substantial Termination Payment), 72%, and with respect to Dana Substantial
      Termination Payment, 100%. 

    

    1.33  "Covered
      Tax" means any Tax that is not an Excluded Tax.

    

    1.34  "Current
      Maturities of Long Term Debt" means the current principal maturities of all
      indebtedness for borrowed money (including but not limited to amortization
      of
      capitalized lease obligations) having an original term of one year or
      more.

    

    1.35  "Dana
      Bankruptcy Proceedings" means the bankruptcy case of Dana Corporation

     

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        
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.

    

    

    1.36  
      "Dana
      Entities" means Dana Corporation, a Virginia corporation, its Subsidiaries
      and
      affiliates, together with their respective successors and assigns, including,
      without limitation any debtor-in-possession or any bankruptcy trustee acting
      on
      any of their behalf in connection with the Dana Bankruptcy Proceedings.

    

    1.37  "Dana
      Partial Termination Payment" is defined in the definition of "Dana
      Payment".

    

    1.38  "Dana
      Payment" means any cash payment received (including by way of setoff) by the
      Borrower or any Subsidiary (or otherwise paid in accordance with the
      instructions of the Borrower 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 Borrower 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 since the commencement of the Dana Bankruptcy
      Proceedings (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")
      or (z)
      is required under the terms of the Collateral Sharing Agreement to be applied
      to
      a mandatory prepayment of the Notes under Section 8.1(b) of the Note Purchase
      Agreement and to a mandatory prepayment of the Loans under Section 2.4D of
      this
      Loan Agreement. [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 Borrower and its
      Subsidiaries were generated in fiscal year 2006 are so terminated or rejected
      and not contemporaneously replaced.

    

    1.39  "Dana
      Partial Termination Payment" is defined in the definition of "Dana
      Payment".

    

    1.40  "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 to Note Purchase Agreement, as each such agreement is amended,
      restated, replaced or otherwise modified from time to time.

     

     

    
      
        
        

      

      
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    1.41  "Date
      of
      Determination" means, for purposes of determining the applicable Pricing Level
      on any Pricing Level Calculation Date, the last day of the most recently ended
      fiscal quarter.

    

    1.42  "Default
      Rate" means, for any Loan, the Base Rate plus three percent
      (3.00%).

    

    1.43  "Designated
      Interest Rate Agreement" has the meaning set forth in Section 7.9
      hereof.

    

    1.44  "Documentation
      Agent" means LaSalle Bank, National Association, which is serving in such
      capacity hereunder.

    

    1.45  "Dollars"
      or "$" means lawful currency of the United States of America.

    

    1.46  "EBITDA"
      means, as of the end of any Fiscal Quarter, the sum of the Borrower's (i) Net
      Income, (ii) Interest Expense, (iii) provisions for taxes based on income,
      (iv)
      depreciation, (v) amortization, (vi) non-cash stock compensation expense
      reducing Net Income, (vii) make-whole cash or non-cash expense incurred in
      connection with the redemption of the $55,000,000 Senior Notes, in the amount
      of
      up to $750,000, and (viii) to the extent reasonably approved by the Agent Bank,
      any extraordinary non-cash or nonrecurring non-cash charges or losses incurred
      other than in the ordinary course of business, and minus,
      to the
      extent included in Net Income, any extraordinary non-cash or nonrecurring
      non-cash gains realized other than in the ordinary course of business, including
      but not limited to gains resulting from redemptions of Indebtedness, all
      determined for the Borrower and its Subsidiaries on a consolidated basis in
      accordance with GAAP for the previous four Fiscal Quarters then ended.   In
      all events, the calculation of EBITDA shall exclude (i) gains or losses on
      dispositions of noncurrent assets, and (ii) losses on writedowns of noncurrent
      assets or lease obligation. For purposes of determining EBITDA, any non-cash
      income associated with the write-up of goodwill pursuant to FASB no. 142 shall
      be subtracted from Net Income and any non-cash expense associated with the
      write-down of goodwill pursuant to FASB no. 142 shall be added back to Net
      Income. The calculation of EBITDA shall include adjustments necessary to reflect
      the pro forma results of acquisitions and dispositions. Any pro forma
      adjustments required to be made hereby shall include adjustments to reflect
      consolidation savings (without limitation as to other appropriate pro forma
      adjustments in accordance with generally accepted financial practice) giving
      effect to all acquisitions and dispositions made during the period with respect
      to which such adjustment is being made as if such acquisitions and dispositions
      were made on the first day of such period. 

    

    1.47  "Environmental
      Complaint" means any complaint, order, directive, claim, citation or notice
      by
      any governmental authority or any other Person described in Section 5.13E
      hereof.

    

    1.48  "ERISA"
      means the Employee Retirement Income Security Act of 1974, as amended from
      time
      to time, and any successor statute.

    

    1.49  "Eurodollar
      Loan" means any advance or any part of the principal of any Revolving Credit
      Loan for which the Borrower has properly selected an Interest Period
      and

     

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        
which
        is
        to bear interest at the Adjusted LIBOR Rate plus the Applicable LIBOR Margin.
        

    

    

    1.50  "Events
      of Default" means the occurrence or happening of any of the matters set forth
      in
      Section 8 hereof.

    

    1.51  "Excluded
      Tax" means any of the following taxes, levies, imposts, duties, deductions,
      withholdings or charges, and all lia-bilities with respect thereto: (i) Taxes
      imposed on the net income of any Bank or a Tax Transferee (including without
      limitation branch profits taxes, minimum taxes and taxes computed under
      alter-native methods, at least one of which is based on net income)
      (col-lectively referred to as "net income taxes") by (A) the United States
      of
      America, (B) the jurisdiction under the laws of which such Bank or Tax
      Transferee is organized or any political subdivi-sion thereof, or (C) the
      jurisdiction of such Bank's or Tax Transferee's applicable lending office or
      any
      political subdivision thereof, or (D) any jurisdiction in which such Bank or
      Tax
      Trans-feree is doing business, (ii) any Taxes to the extent that they are in
      effect and would apply to a payment to any Bank as of the Closing Date, or
      as of
      the date such Person becomes a Bank, in the case of any assignee pursuant to
      Section 11 hereof, (iii) any Taxes that are in effect and would apply to a
      payment to a Tax Transferee as of the date of acquisition of any portion of
      the
      Revolving Credit Loans by such Tax Transferee or the date of the change of
      lending office of such Tax Transferee, as the case may be (provided
      however
      that a
      Person shall not be considered a Tax Transferee for purposes of this clause
      (iii) as a result of a change of its lending office or the taking of any other
      steps pur-suant to Section 13.4 hereof), (iv) any Taxes to the extent of any
      credit or other Tax benefit available to any Bank or Tax Trans-feree, as
      applicable, as a result thereof, or (v) any Taxes that would not have been
      imposed but for the failure by any Bank or Tax Transferee, as applicable, to
      provide and keep current any certification or other documentation required
      to
      qualify for an exemption from or reduced rate of any Tax.

    

    1.52  "Existing
      Bank" shall have the meaning set forth in Section 2.1G hereof. 

    

    1.53  "Federal
      Funds Effective Rate" for any day means the rate per annum (based on a year
      of
      360 days and actual days elapsed and rounded upward to the nearest 1/100 of
      1%)
      announced by the Federal Reserve Bank of New York (or any successor) on such
      day
      as being the weighted average of the rates on overnight Federal funds
      transactions arranged by Federal funds brokers on the previous trading day,
      as
      computed and announced by such Federal Reserve Bank (or any successor) in
      substantially the same manner as such Federal Reserve Bank computes and
      announces the weighted average it refers to as the "Federal Funds Effective
      Rate" as of the date of this Loan Agreement; provided,
      if such
      Federal Reserve Bank (or its successor) does not announce such rate on any
      day,
      the "Federal Funds Effective Rate" for such day shall be the Federal Funds
      Effective Rate for the last day on which such rate was announced.

    

    1.54  "$55,000,000
      Senior Notes" means the $55,000,000 Aggregate Principal Amount Senior Notes
      issued on an unsecured basis pursuant to the Note Purchase Agreement. As of
      the
      date of this Loan Agreement, $30,000,000 principal amount of the $55,000,000
      Senior Notes remains outstanding.

     

     

    
      
        
        

      

      
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    1.55  "Financial
      Officer" means the chief financial officer, controller or treasurer of the
      Borrower.

    

    1.56  "Fiscal
      Quarter" means a fiscal quarter of the Borrower. The Fiscal Quarters of the
      Borrower generally end on or about the last day of each March, June, September
      and December of each calendar year (the following dates are ending dates for
      Fiscal Quarters in 2007: April 1, 2007; July 1, 2007; September 30, 2007 and
      December 31, 2007).

    

    1.57  "Fiscal
      Year" means a fiscal year of the Borrower. The Borrower's Fiscal Year ends
      on
      the last day of December of each calendar year.

    

    1.58  "Fixed
      Charge Coverage Ratio" means, as of any Date of Determination thereof, the
      ratio
      of (i) the sum of the Borrower's EBITDA to (ii) the sum of the Borrower's
      Interest Expense. 

    

    1.59  "Foreign
      Entity" has the meaning set forth in Section 7.12 hereof. 

    

    1.60  "Foreign
      Entity Subsidiary" has the meaning set forth in Section 7.12 hereof.

    

    1.61  "Funded
      Debt" means, with respect to the Borrower on a consolidated basis (but for
      the
      avoidance at doubt excluding in each case trade payable incurred in the ordinary
      course of business), (i) all indebtedness for borrowed money, including, without
      limitation, all Revolving Credit Loans, all Swing Line Loans, all reimbursement
      obli-gations in respect of all letters of credit (in-cluding the Letters of
      Credit), and the $55,000,000 Senior Notes, (ii) mandatorily redeemable preferred
      stock of the Borrower and Guarantors (except any mandatorily redeemable
      preferred stock owned by Borrower or the Guarantor), (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 in conformity with GAAP, (v) notes payable and
      drafts ac-cepted representing extensions of credit whether or not represent-ing
      obligations for borrowed money, (vi) any obligation owed for all or any part
      of
      the deferred purchase price of property or ser-vices 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 the
      Borrower or the Guarantors regardless of whether the indebtedness secured
      thereby shall have been assumed by the Borrower or is non-recourse to the credit
      of the Borrower or the Guarantors but only to the extent of the fair market
      value of any such property or assets, and (viii) all other Contingent
      Obligations of the Borrower and the Guarantors in respect of obligations of
      the
      type described in clauses (i) through (vii) of this Section. 

    

    1.62  "Funding
      Date" means the date of the funding of a Revolving Credit Loan.

    

    1.63  "GAAP"
      means generally accepted accounting principles set forth in the opinions and
      pronouncements of the Accounting Princi-ples Board of the American Institute
      of
      Certified Public Accoun-tants and the statements and pronouncements of the
      Financial Accounting 

     

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        
Standards
        Board or in such other statements by such other entity as may be approved
        by a
        significant segment of the account-ing profession, which are applicable to
        the
        circumstances as of the date of determination, as applied in accordance with
        Sections 1.106 and 6.3 hereof.

    

    

    1.64  "Guarantor"
      means any Person identified on Schedule
      1.2
      hereto
      and any new Subsidiaries of the Borrower hereafter acquired or created, with
      the
      consent of the Banks, pursuant to the provisions of Section 7.1
      hereof.

    

    1.65  "Guaranty
      Agreement" means the Amended and Restated Guaranty Agreement between the Agent
      Bank and each of the Guarantors, where each Guarantor has jointly and severally
      guaranteed the Borrower's payment of the Loans. The form of the Guaranty
      Agreement is attached as Exhibit
      I.

    

    1.66  "Hazardous
      Discharge" means any event described in Section 5.13D hereof.

    

    1.67  "Hazardous
      Materials" means any and all substances, chemi-cals or wastes (including,
      without limitation, asbestos, poly-chlorinated biphenyls ("PCBs") and petroleum)
      that are desig-nated or defined (either by inclusion in a list of materials
      or
      by refer-ence to exhibited characteristics) as hazardous, toxic or danger-ous,
      or as a pollutant or contaminant in any of the Relevant Environmental Laws.
      

    

    1.68  "Interest
      Expense" means, for the period in question, total interest expense (including
      that attributable to capital leases in conformity with GAAP) of the Borrower
      with respect to all outstanding Funded Debt of the Borrower, including, without
      limi-tation, all capitalized interest, all commissions, discounts and other
      fees
      and charges owed with respect to letters of credit and bankers' acceptance
      financing and net costs and benefits under interest rate agreements, whether
      payable in cash or accrued (in-cluding amortization of discount), net of any
      interest income all as determined on a consolidated basis in accordance with
      GAAP.

    

    1.69  "Interest
      Payment Date" means, (i) with respect to each Base Rate Loan, the last day
      of
      each calendar quarter during which such Base Rate Loan is out-standing in whole
      or in part, (ii) with respect to each Eurodollar Loan, the ninetieth (90th)
      day
      of the Interest Period applicable to such Eurodollar Loan, and/or the last
      day
      of the Interest Period ap-plicable to such Eurodollar Loan, whichever is earlier
      , (iii) with respect to each Swing Line Loan, the last day of each calendar
      quarter during which such Swing Line Loan is out-standing in whole or in part,
      and (iv) with respect to all Revolving Credit Loans and Swing Line Loans, the
      date of maturity thereof.

    

    1.70  "Interest
      Period" means any interest period applicable to a Eurodollar Loan, as determined
      pursuant to Section 2.2B hereof with respect to the Revolving Credit Loans
      that
      are Eurodollar Loans.

    

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

     

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

     

    1.72  "Interest
      Rate Determination Date" means each date for calculating the Adjusted LIBOR
      Rate
      for purposes of determining the interest rate in respect of an Interest Period.
      The Interest Rate Determination Date shall be the date which is two (2) Business
      Days prior to the related Interest Period for a Eurodollar Loan.

    

    1.73  "Internal
      Revenue Code" means the Internal Revenue Code of 1986, as amended to the date
      hereof and from time to time hereafter.

    

    1.74  "Letter
      of Credit Fee" has the meaning assigned to that term in Section 2.7F(i)
      hereof.

    

    1.75  "Letter
      of Credit Fronting Fee" has the meaning assigned to that term in Section 2.7F(v)
      hereof.

    

    1.76  "Letter
      of Credit Subfacility" means the commitment of the Agent Bank, to issue Letters
      of Credit for the account of the Borrower or a Subsidiary of the Borrower up
      to
      an aggregate amount at any one time outstanding of Fifteen Million Dollars
      ($15,000,000). The Letter of Credit Subfacility is a sublimit of the Revolving
      Credit Facility.

    

    1.77  "Letter
      of Credit Usage" means, as at any date, the sum of (i) the maximum aggregate
      amount which is or at any time thereafter may become available for drawing
      under
      all Letters of Credit then outstand-ing, plus (ii) the aggregate amount of
      all
      drawings under all Letters of Credit honored by the Agent Bank and not
      theretofore reimbursed by the Borrower to the Agent Bank, whether by virtue
      of
      the Banks making a Revolving Credit Loan to the Borrower to enable the Borrower
      to reimburse the Agent Bank for such drawing or otherwise.

    

    1.78  "Letters
      of Credit" means all standby letters of credit or similar instruments issued
      by
      the Agent Bank for the account of the Borrower pursuant to Section 2.7 of the
      Loan Agreement for the purpose of securing the performance, payment, deposit
      or
      surety obligations of the Borrower or a Subsidiary of the Borrower.

     

     

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

    

    1.79  "LIBOR
      Rate" means, with respect to any Eurodollar Loan for any Interest Period, the
      rate appearing on Page 3750 of the Moneyline Telerate Service (or on any
      successor or substitute page of such Service, or any successor to or substitute
      for such Service, providing rate quotations comparable to those currently
      provided on such page of such Service, as determined by the Agent Bank from
      time
      to time for purposes of providing quotations of interest rates applicable to
      dollar deposits in the London interbank market) at approximately 11:00 a.m.,
      London time, two Business Days prior to the commencement of such Interest
      Period, as the rate for dollar deposits with a maturity comparable to such
      Interest Period. In the event that such rate is not available at such time
      for
      any reason, then the "LIBOR
      Rate"
      with
      respect to such Eurodollar Loan for such Interest Period shall be the rate
      at
      which dollar deposits in the approximate amount of principal outstanding on
      such
      date and for a maturity comparable to such Interest Period are offered by the
      principal London office of the Agent Bank in immediately available funds in
      the
      London interbank market at approximately 11:00 a.m., London time, two Business
      Days prior to the commencement of such Interest Period. 

    

    1.80  "Loan"
      means a Revolving Credit Loan or a Swing Line Loan.

    

    1.81  "Loan
      Agreement" means this Loan Agreement as further amended, supplemented or
      otherwise modified from time to time.

    

    1.82  "Loan
      Documents" means this Loan Agreement, the Revolving Credit Notes, each
      Application and Agreement for Letter of Credit, the Guaranty Agreements, any
      Rate Management Transaction Agreement and all other agreements, documents and
      instruments now or hereafter evidencing and/or pertaining to this Loan Agreement
      and/or the other Obligations, and as may be further amended, supplemented or
      otherwise modified from time to time.

    

    1.83  "Majority
      Banks" shall have the meaning set forth in Section 15.10 hereof.

    

    1.84  "Net
      Income" means, for the period in question, the consolidated net income (or
      loss)
      of the Borrower for such period taken as a single accounting period, determined
      on a consolidated basis in accordance with GAAP and excluding any extraordinary
      items.

    

    1.85  "Net
      Worth" means the Borrower's retained earnings, capital stock, additional paid
      in
      capital minus the sum of treasury stock subscribed for and unissued determined
      on a consolidated basis in accordance with GAAP. The calculation of Net Worth
      excludes any amounts with respect to accumulated other comprehensive income
      or
      similar non-cash adjustments to shareholder's equity.

    

    1.86  "New
      Bank" shall have the meaning set forth in Section 2.1G hereof. 

    

    1.87  "New
      Commitment Provider " shall have the meaning set forth in Section 2.1G
      hereof. 

    

    1.88  "Note
      Purchase Agreement" means the Note
      Purchase Agreement dated as of June 1, 2004 by and among the Borrower and
      certain lenders party thereto, pursuant to which the

     

     

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        
Borrower
        issued $55,000,000 Senior Notes, as subsequently amended. 

    

    

    1.89  "Notice
      of Conversion/Continuation" means the Notice in the form of Exhibit
      D
      annexed
      hereto with respect to the conversion and/or continuation of the interest
      rate(s) applicable to the Revolving Credit Loans, as set forth in Section 2.2B
      hereof.

    

    1.90  "Obligations"
      means, collectively, (i) the entire unpaid principal balance of and all interest
      now accrued or hereafter to accrue on the Revolving Credit Notes, (ii) the
      entire unpaid principal balance of and all interest now accrued or hereafter
      to
      accrue on the Swing Line Credit Subfacility, (iii) the obligation of the
      Borrower to reimburse the Agent Bank for all drafts honored by the Agent Bank
      under Letters of Credit together with accrued interest thereon, (iv) the
      performance of all of the covenants, agreements and obligations of the Borrower
      hereunder and under the other Loan Documents, (v) any and all obligations,
      contingent or otherwise, whether now existing or hereafter arising, of Borrower
      to the Banks or their Affiliates arising under or in connection with Rate
      Management Transaction Agreements, and (vi) all other liabilities, obligations,
      covenants and duties owing by the Borrower to any Bank arising under or pursuant
      to this Loan Agreement, any Rate Management Transaction Agreements, the other
      Loan Documents or any in connection with credit or commercial card obligations
      owed to one or more of the Banks and/or their Affiliates,
      of any
      kind or nature, present or future, and whether or not evidenced by any note,
      guaranty or other instrument. The term "Obligations" includes, without
      limitation, all interest, charges, expenses, rea-sonable attorneys' fees and
      any
      other sums chargeable to the Borrower under this Loan Agreement and/or any
      other
      Loan Document. 

    

    1.91  "Operating
      Lease Rentals" means the periodic expense for the portion of obligations with
      respect to non-capital leases determined on a consolidated basis in accordance
      with GAAP.

    

    1.92  "Permitted
      Acquisition" shall have the meaning set forth in Section 7.1
      hereof.

    

    1.93  "Permitted
      Commitment Increase" shall have the meaning set forth in Section 2.1G
      hereof.

    

    1.94  "Person"
      means any individual, sole proprietorship, part-nership, joint venture, trust,
      unincorporated organization, asso-ciation, corporation, other entity or group,
      institution, party or government, whether federal, state, county, city,
      municipal or other, or any agency or division thereof.

    

    1.95  "Pledge
      Agreement" means a Pledge Agreement, in the form of Exhibit
      J
      hereto,
      which is required to be executed and delivered pursuant to Section 7.12 hereof.
      

    

    1.96  "Potential
      Default" means the occurrence of any act or event which, with the giving of
      notice and/or the passage of time, or both, would become an Event of
      Default.

    

    1.97  "Pricing
      Level" means, for any Pricing Period, Pricing Level I, Pricing Level II, Pricing
      Level III, Pricing Level IV, Pricing Level V, Pricing Level VI, or Pricing
      Level
      VII, as

     

     

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        
may
        be in
        effect for such Pricing Period; provided
        that,
        the Default Rate shall be in effect upon the occurrence and during the
        continuation of any Event of Default.  

    

    

    1.98  "Pricing
      Level I" means the Pricing Level that will be in effect for the applicable
      Pricing Period if, as at the relevant Date of Determination, the ratio of the
      Borrower's Adjusted Funded Debt as measured on such Date of Determination,
      to
      the Borrower's EBITDA as measured on such Date of Determination, is less than
      1.00 to 1.00.  

    

    1.99  "Pricing
      Level II" means the Pricing Level that will be in effect for the applicable
      Pricing Period if, as at the relevant Date of Determination, the ratio of the
      Borrower's Adjusted Funded Debt as measured on such Date of Determination,
      to
      the Borrower's EBITDA as measured on such Date of Determination, is greater
      than
      1.00 to 1.00 but is less than or equal to 1.50 to 1.00.  

    

    1.100  "Pricing
      Level III" means the Pricing Level that will be in effect for the applicable
      Pricing Period if, as at the relevant Date of Determination, the ratio of the
      Borrower's Adjusted Funded Debt as measured on such Date of Determination,
      to
      the Borrower's EBITDA as measured on such Date of Determination, is greater
      than
      1.50 to 1.00 but is less than or equal to 2.00 to 1.00.  

    

    1.101  "Pricing
      Level IV" means the Pricing Level that will be in effect for the applicable
      Pricing Period if, as of the relevant Date of Determination, the ratio of the
      Borrower's Adjusted Funded Debt as measured on such Date of Determination,
      to
      the Borrower's EBITDA as measured on such Date of Determination, is greater
      than
      2.00 to 1.00 but is less than or equal to 2.50 to 1.00.  

    

    1.102  "Pricing
      Level V" means the Pricing Level that will be in effect for the applicable
      Pricing Period if, as of the relevant Date of Determination, the ratio of the
      Borrower's Adjusted Funded Debt as measured on such Date of Determination,
      to
      the Borrower's EBITDA as measured on such Date of Determination, is greater
      than
      2.50 to 1.00 but is less than or equal to 3.00 to 1.00.  

    

    1.103  "Pricing
      Level VI" means the Pricing Level that will be in effect for the applicable
      Pricing Period if, as of the relevant Date of Determination, the ratio of the
      Borrower's Adjusted Funded Debt as measured on such Date of Determination,
      to
      the Borrower's EBITDA as measured on such Date of Determination, is greater
      than
      3.00 to 1.00 but is less than or equal to 3.50 to 1.00.  

    

    1.104  "Pricing
      Level VII" means the Pricing Level that will be in effect for the applicable
      Pricing Period if, as of the relevant Date of Determination, the ratio of the
      Borrower's Adjusted Funded Debt as measured on such Date of Determination,
      to
      the Borrower's EBITDA as measured on such Date of Determination, is greater
      than
      3.50 to 1.00.  

    

    1.105  "Pricing
      Level Calculation Date" means the date of the delivery to the Banks of a
      Compliance Certificate in the form of Exhibit
      G
      hereto
      demonstrating the appropriate Pricing

     

     

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        
Level,
        which delivery can occur on any date from the prior Date of Determination
        to the
        due date of the Borrower's financial statements for the particular quarter
        or
        year then ended as required by Section 6.3B hereof.

    

    

    1.106  "Pricing
      Period" means, with respect to any Date of Determination, the period commencing
      on the day immediately after such Date of Determination and ending on the next
      Date of Determination.

    

    1.107  "Prime
      Rate" means the rate of interest per annum announced from time to time by the
      Agent Bank as its prime rate. The Prime Rate is a variable rate and each change
      in the Prime Rate is effective from and including the date the change is
      announced as being effective. THE PRIME RATE IS A REFERENCE RATE AND MAY NOT
      BE
      THE AGENT BANK'S LOWEST RATE.  

    

    1.108  "Rate
      Management Transaction Agreement" means any agreement between the Borrower
      and a
      Bank or an Affiliate of a Bank 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.  

    

    1.109  "Real
      Property" means the real property and improvements thereon owned by any of
      the
      Borrower or the Guarantors.

    

    1.110  "Relevant
      Environment Laws" means any and all federal, state and local laws, codes,
      ordinances, rules, regulations, reported and publicly available orders, reported
      judicial determinations, and reported and publicly available decisions of an
      executive body or any governmental and quasi-governmental entity, whether in
      the
      past, the present or the future, pertaining to health, safety or the environment
      in effect in any and all jurisdictions in which the Borrower is or at any time
      may be doing business, or where the Real Property is located. The Relevant
      Environmental Laws shall include, but shall not be limited to, the following:
      (i) the Comprehensive Environmental Response, Compensation, and Liability Act,
      42 U.S.C. Sections 9601, et seq.;
      the
      Superfund Amendments and Reauthorization Act, Public Law 99-949, 100 Stat.
      1613;
      the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq.;
      the
      National Environmental Policy Act, 42 U.S.C. Section 4321; the Safe Drinking
      Water Act, 42 U.S.C. Sections 300F, et seq.;
      the
      Toxic Substances Control Act, 15 U.S.C. Section 2601; the Hazardous Materials
      Transportation Act, 49 U.S.C. Section 1801; the Federal Water Pollution Control
      Act, 33 U.S.C. Sections 1251, et seq.;
      the
      Clean Air Act, 42 U.S.C. Section 7401, et seq.;
      and
      the regulations promulgated in connection therewith; (ii) EPA regulations
      pertaining to asbestos (including 29 C.F.R. Sections 1910.1001 and 1926.58);
      and
      any state and local laws and regulations pertaining to Hazardous Materials
      and/or asbestos. 

     

     

    
      
        
        

      

      
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    1.111  "Request
      for Revolving Credit Loan" means the Request in the form of Exhibit
      E
      annexed
      hereto with respect to a proposed Revolving Credit Loan to be delivered by
      the
      Borrower to the Agent Bank pursuant to Section 2.lC hereof.

    

    1.112  "Request
      for Swing Line Loan" means the Request in the form of Exhibit
      F annexed
      hereto with respect to a proposed Swing Line Loan to be delivered by the
      Borrower to the Agent Bank pursuant to Section 2.6A hereof.

    

    1.113  "Revolving
      Credit Facility" means the revolving line of credit established by the Banks
      in
      favor of the Borrower in the principal amount of Fifty Million Dollars
      ($50,000,000), subject to being increased by up to an additional Fifty Million
      Dollars ($50,000,000) as set forth in Section 2.1G of the Loan Agreement,
      pursuant to which the Borrower may obtain Revolving Credit Loans from the Banks
      and/or Letters of Credit from the Agent Bank during the term of the Revolving
      Credit Facility upon the terms and conditions set forth in this Loan Agreement.
      The Revolving Credit Facility includes as a sublimit the Letter of Credit
      Subfacility and the Swing Line Credit Subfacility. All references to the
      "aggregate principal balance of the Revolving Credit Loans outstanding" or
      similar phrases in this Loan Agreement or in the Revolving Credit Notes shall
      mean, as of the date of determination thereof, the sum of (i) the entire
      aggregate outstanding principal balance of all Revolving Credit Loans made
      by
      the Banks pursuant to this Loan Agreement, (ii) the then existing Letter of
      Credit Usage and (iii) the then existing Swing Line Usage. 

    

    1.114  "Revolving
      Credit Facility Commitment Fees" has the meaning set forth in Section 2.3A
      hereof.

    

    1.115  "Revolving
      Credit Facility Pro Rata Shares" means, with respect to each Revolving Loan
      Commitment of each Bank, the per-centage set forth opposite that Bank's name
      on
Schedule
      2.1
      annexed
      hereto; provided that Schedule
      2.1
      shall be
      amended and each Bank's Revolving Credit Facility Pro Rata Share shall be
      adjusted from time to time to give effect to the addition or removal of any
      Bank
      as provided herein or by assignment, sales or purchases, pursuant to Section
      11
      hereof.

    

    1.116  "Revolving
      Credit Loans" means advances of principal of the Revolving Credit Facility
      made
      pursuant to Section 2 hereof by the Banks to the Borrower from time to time
      pursuant to, and subject to the terms and condi-tions set forth in, this Loan
      Agreement to support the working capital needs of the Borrower and for the
      other
      purposes described in Section 2.5A hereof.

    

    1.117  "Revolving
      Credit Notes" means (i) that certain Amended and Restated Revolving Credit
      Promissory Note made by the Borrower, payable to the order of JPMorgan Chase
      Bank, N.A., and in the face principal amount of Twenty Three Million Dollars
      ($23,000,000) the form of which is annexed to this Loan Agreement as
Exhibit
      A-1,
      as the
      same may hereafter be amended, modified, renewed, replaced and/or restated
      from
      time to time; (ii) that certain Amended and Restated Revolving Credit Promissory
      Note made by the Borrower, payable to the order of LaSalle Bank National
      Association, and in the face principal amount of Nineteen

     

     

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        
Million
        Dollars ($19,000,000), the form of which is annexed to this Loan Agreement
        as
Exhibit
        A-2,
        as the
        same may hereafter be amended, modified, renewed, replaced and/or restated
        from
        time to time; and (iii) that certain Amended and Restated Revolving Credit
        Promissory Note made by the Borrower, payable to the order of National City
        Bank
        of Kentucky, and in the face principal amount of Eight Million Dollars
        ($8,000,000), the form of which is annexed to this Loan Agreement as
Exhibit
        A-3,
        as the
        same may hereafter be amended, modified, renewed, replaced and/or restated
        from
        time to time and (iv) each future Revolving Credit Promissory Note, if any,
        made
        by the Borrower pursuant to the Revolving Credit Facility. 

    

    

    1.118  "Revolving
      Loan Commitments" means each Bank's commitment to maintain or make Revolving
      Credit Loans and Swing Line Loans and/or to issue Letters of Credit as set
      forth
      in Section 2.1 hereof.

    

    1.119  "Revolving
      Loan Commitment Termination Date" means the Revolving Loan Commitment
      Termination Date then in effect, which shall be the earliest of (i) October
      16,
      2009, (ii) the date as of which the Obligations shall have become immediately
      due and payable pursuant to Section 8 of the Loan Agreement and (iii) the date
      on which all of the Obligations are paid in full (including, without limitation,
      the repayment, expiration, termination or cash collateralization of Letters
      of
      Credit pursuant to this Loan Agreement) and the Revolving Loan Commitments
      are
      reduced to zero. 

     

    1.120  "Security
      Agreement" means that Security Agreement dated as of April 6, 2007, between
      the
      Borrower, the Guarantors and the Agent Bank, granting to the Agent Bank for
      the
      benefit of all of the Banks and the holders of the $55,000,000 Senior Notes
      a
      security interest in all of the personal property of the Borrower and the
      Guarantors. 

    

    1.121  "Statutory
      Reserve Rate" means a fraction (expressed as a decimal), the numerator of which
      is the number one and the denominator of which is the number one minus the
      aggregate of the actual reserve percentages (including any marginal, special,
      emergency or supplemental reserves) expressed as a decimal established by the
      Board of Governors of the Federal Reserve System to which the Agent Bank is
      subject, with respect to the Adjusted LIBOR Rate, for eurocurrency funding
      (currently referred to as "Eurocurrency Liabilities" in Regulation D of the
      Board). Such reserve percentages shall include those imposed pursuant to such
      Regulation D. The Statutory Reserve Rate shall be adjusted automatically on
      and
      as of the effective date of any change in any reserve percentage. 

    

    1.122  "Subsidiary"
      means (i) any corporation of which more than 50% of the outstanding voting
      stock
      is at the time owned by the Borrower or by one or more of its Sub-sidiaries,
      and
      (ii) any Person controlled by the Borrower or by one or more of its
      Subsidiaries, whether by virtue of voting interest, other beneficial interest
      or
      by voting agreement, contract, proxy or otherwise.

    

    1.123  "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 

     

     

    
      
        
        

      

      
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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.

    

    

    1.124  "Swing
      Line Commitment Period" means the period from the Closing Date through the
      Swing
      Line Commitment Termination Date.

    

    1.125  "Swing
      Line Commitment Termination Date" means the same date as the Revolving Loan
      Commitment Termination Date.

    

    1.126  "Swing
      Line Credit Subfacility" means the sums advanced or to be advanced by the Agent
      Bank as described in Section 2.6 hereof.

    

    1.127  "Swing
      Line Loan" means advances of principal of the Swing Line Credit Subfacility
      made
      by the Agent Bank to the Borrower from time to time pursuant to, and subject
      to
      the terms and condi-tions set forth in, this Loan Agreement for the other
      purposes described in Section 2.6 hereof.

    

    1.128  "Swing
      Line Usage" means, as at any date of determination thereof, the sum of the
      maximum aggregate principal amount of all outstanding Swing Line Loans, which
      amount shall never exceed Five Million Dollars ($5,000,000).

    

    1.129  "Tax"
      or
      "Taxes" means any present or future tax, levy, impost, duty, charge,
      governmental fee, deduction or withholding of any nature and whatever called,
      by
      whomsoever, on whomsoever and wherever imposed, levied, collected, withheld
      or
      assessed; provided
      that
      "Tax on the overall net income" of a Person shall be construed as a reference
      to
      a tax imposed by the jurisdiction in which that Person's principal office
      (and/or, in the case of any Bank, its lending office) is located on all or
      part
      of the net income, profits or gains of that Person (whether worldwide, or only
      insofar as such income, profits or gains are considered to arise in or to relate
      to a particular jurisdiction, or otherwise).

    

    1.130  "Tax
      Transferee" means any Person who acquires any inter-est in the Revolving Credit
      Loans (whether or not by operation of law) or the office to which any Bank
      has
      transferred its Revolving Credit Loans for purposes of determining where such
      Bank's Revolving Credit Loans are made, accounted for or booked.

    

    1.131  "Third
      Amendment to Note Purchase Agreement" means
      the
Third
      Amendment to Note Purchase Agreement dated as of April 6, 2007 by and among
      the
      Borrower and certain lenders party thereto. 

    

    1.132  "Total
      Utilization of Revolving Loan Commitments" means, as at any Date of
      Determination thereof, the sum of (i) the aggre-gate principal amount of all
      outstanding Revolving Credit Loans, (ii) the Letter of Credit Usage and (iii)
      the Swing Line Usage.

    

    1.133  "Uniform
      Commercial Code" means the Uniform Commercial Code in effect in

     

     

    
      
        
        

      

      
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the
        Commonwealth of Kentucky, currently codified as KRS 355.101 et
        seq.

    

    

    1.134  "Voting
      Stock" means the shares of capital stock or other securities of the Borrower
      entitled to vote generally in the elec-tion of the directors of the
      Borrower.

    

    1.135  Accounting
      Terms and Financial Information.

    

    A.     Accounting
      Terms.
      For
      purposes of this Loan Agree-ment, all accounting terms not otherwise defined
      herein shall have the meanings assigned to them in conformity with GAAP and
      all
      financial statements and certificates and reports as to financial matters
      required to be delivered to the Agent Bank hereunder shall (unless otherwise
      disclosed to the Agent Bank in writing at the time of delivery thereof in the
      manner described in paragraph B of this Section) be prepared on a consolidated
      basis in accordance with GAAP applied on a basis consistent with GAAP as applied
      in the preparation of the latest financial statements furnished to the Agent
      Bank hereunder.

    

    B.     Accounting
      Variances.
      The
      Borrower, for itself and the Guarantors, shall deliver to the Agent Bank at
      the
      same time as the delivery of any annual or quar-terly financial statement under
      Section 6.3 hereof, (i) a descrip-tion in reasonable detail of any variation
      between the application of accounting principles employed in the preparation
      of
      such state-ment and the application of accounting principles employed in the
      preparation of the next preceding annual or quarterly financial statements
      (which variation materially affects the presentation of the financial position
      or results of operations of the Borrower in accordance with GAAP) and (ii)
      reasonable estimates of the difference between such state-ments arising as
      a
      consequence thereof.

    

    1.136  Other
      Definitional Provisions.
      Any
      reference in this Loan Agreement (i) to a Section, an Annex, a Schedule or
      an
      Exhibit is a ref-erence to a section hereof, an annex hereto, a schedule hereto
      or an exhibit hereto, respectively; and (ii) to a subsection or a clause is,
      unless otherwise stated, a reference to a subsection or a clause of the Section
      or subsection in which the reference appears. In this Loan Agreement the
      singular includes the plural and the plural the singular; "hereof," "herein,"
      "hereto," "hereunder" and the like mean and refer to this Loan Agreement as
      a
      whole and not merely to the specific section, paragraph or clause in which
      the
      respective word appears; words importing any gender include the other genders;
      references to statutes are to be construed as including all statu-tory
      provisions consolidating, amending or replacing the statute referred to;
      references to "writing" include printing, typing, lithography and other means
      of
      reproducing words in a tangible visible form; the words "including", "includes"
      and "include" shall be deemed to be followed by the words "without limitation";
      refer-ences to agreements and other contractual instruments shall be deemed
      to
      include all subsequent amendments, supplements, assign-ments and other
      modifications thereto, but only to the extent such modifications are not
      prohibited by the terms of this Loan Agree-ment, and references to Persons
      include their respective permitted successors and assigns or, in the case of
      governmental Persons, Persons succeeding to the relevant functions of such
      Persons.

     

     

    
      
        
        

      

      
        -22-

        
          

        

      

      
        
        

      

    

     

    

    SECTION
      2

    REVOLVING
      CREDIT FACILITY

    

    Subject
      to the terms and conditions of this Loan Agreement (including but not limited
      to
      Section 2.1G hereof), the Banks hereby establish the Revolving Credit Facility
      in favor of the Borrower in the principal amount of Fifty Million Dollars
      ($50,000,000). Pursuant to the Revolving Credit Facility, the Borrower may
      obtain Revolving Credit Loans and/or Letters of Credit pursuant to, and subject
      to the terms and conditions set forth in, this Loan Agreement for the purposes
      set forth in Sections 2.5A and 2.7 hereof. The Revolving Credit Facility is
      subject to the following terms and conditions: 

    

    2.1     Revolving
      Loan Commitments, Revolving Credit Loans.

    

    A.     Revolving
      Loan Commitments.
      Each
      Bank severally agrees, subject to the terms and conditions set forth herein
      and
      the limitations set forth below with respect to the maximum amount of Revolving
      Credit Loans permitted to be out-standing from time to time, to lend to the
      Borrower from time to time during the period from the Closing Date to but
      excluding the Revolving Loan Commitment Termination Date an aggregate amount
      not
      exceeding its Revolving Credit Facility Pro Rata Share of the aggregate
      Revolving Loan Commitments. The amount of each Bank's Revolving Loan Commitment
      is set forth opposite its name on Schedule
      2.1
      annexed
      to this Loan Agreement and the aggregate amount of the Revolving Loan
      Commitments is Fifty Million Dollars ($50,000,000) ; provided,
      the
      amount of the Revolving Loan Commitments shall be reduced from time to time
      by
      the amount of any voluntary reductions that are allowed to be made pursuant
      to
      Section 2.4D hereof (it being understood that all references to the Revolving
      Loan Commitments of the Banks set forth in this Loan Agreement shall mean the
      initial Revolving Loan Commitments of the Banks set forth on Schedule
      2.1
      annexed
      to this Loan Agreement, as reduced by any voluntary reductions of the Revolving
      Loan Commitments effected by the Borrower pursuant to Section 2.4D of the Loan
      Agreement). Each Bank's Revolving Loan Commitment shall expire on the Revolving
      Loan Commitment Termination Date and all Revolving Credit Loans shall be paid
      in
      full no later than that date. Amounts borrowed under this Section 2.lA may
      be
      repaid and reborrowed to but excluding the Revolving Loan Commitment Termination
      Date, subject to the provisions of Section 2.4C hereof.

    

    Anything
      contained in this Loan Agreement to the contrary notwithstanding, the Revolving
      Credit Loans and the Revolving Loan Commitments shall be subject to the
      following limitations:

    

    (i)    The
      Letter of Credit Subfacility is a sublimit under the Revolving Credit Facility.
      The amount otherwise available for borrowing under the Revolving Loan
      Commitments as of the time of determination thereof (other than to reimburse
      the
      Agent Bank for the amount of any drawings under any Letters of Credit honored
      by
      the Agent Bank and not theretofore reimbursed by the Borrower) shall be reduced
      by an amount equal to the Letter of Credit Usage as of such time of
      determination; 

     

     

    
      
        
        

      

      
        -23-

        
          

        

      

      
        
        

      

    

    (ii)     The
      Swing
      Line Credit Subfacility is a sublimit under the Revolving Credit Facility.
      The
      amount otherwise available for borrowing under the Revolving Loan Commitments
      as
      of the time of determination thereof shall be reduced by an amount equal to
      the
      Swing Line Usage; and

    

    (iii)     The
      Total
      Utilization of Revolving Loan Commitments shall not exceed the then-applicable
      aggregate Revolving Loan Commit-ments. 

    

    B.     Term
      of Revolving Loan Commitments.
      The
      Revolving Loan Commitments shall become effective immediately as of the Clos-ing
      Date, and as of the Closing Date, the Borrower may obtain Re-volving Credit
      Loans subject to the terms and conditions contained herein. The Revolving Loan
      Commitments shall continue in effect until the Revolving Loan Com-mitment
      Termination Date, unless sooner terminated (i) by the Banks upon the occurrence
      and during the continuation of an Event of De-fault, or (ii) by the Borrower
      upon a voluntary reduction in all of the Revolving Loan Commitments, pursuant
      to
      Section 2.4C hereof. The Revolving Loan Commitment Termination Date may only
      be
      extended by the unanimous written consent of all of the Banks in their sole
      and
      absolute discretion. If any Bank elects not to extend the Revolving Loan
      Commitment Termination Date, such Bank shall notify the Borrower and the other
      Banks thereof. In the event any Bank elects not to extend the Revolving Loan
      Commitment Termination Date, the Revolving Loan Commitments shall terminate,
      and
      the en-tire unpaid principal balance of and all accrued and unpaid inter-est
      on
      the Revolving Credit Loans, the Swing Line Loans and the Letters of Credit
      shall
      be respectively due and payable in full to the Banks on the Revolving Loan
      Commitment Termination Date, subject at all times to the Banks' absolute right
      to terminate the Revolving Loan Commit-ments upon the occurrence and during
      the
      continuation of an Event of Default. Upon termination of the Revolving Loan
      Commitments by the Banks upon the occurrence and during the continuation of
      an
      Event of Default, the entire unpaid principal balance of and all accrued and
      unpaid interest on the Revolving Credit Loans, the Swing Line Loans and the
      Letters of Credit shall be respectively due and payable in full to the Banks.
      The termination of the Revolving Loan Commitments, for whatever reason, shall
      not in any way release or relieve the Borrower from its obligations incurred
      hereunder or in connection herewith or under the Revolving Credit Notes, the
      Applications and Agreements For Letters of Credit or the other Loan Documents
      and the provisions hereof and of the Revolving Credit Notes, the Applications
      and Agreements For Letters of Credit and the other Loan Documents shall continue
      in full force and effect until the Revolving Credit Notes, the Applications
      and
      Agreements For Letters of Credit and all other Obligations have been
      respectively paid in full to the Banks. In the event the Borrower terminates
      the
      Revolving Loan Commitments, pursuant to Section 2.4C hereof, the Borrower shall
      be obligated to pay the Revolving Credit Notes, the Applications and Agreements
      For Letters of Credit and all other Obligations in full to the Banks,
      respectively.

    

    C.     Borrowing
      Mechanics For Revolving Credit Loans Made to the Borrower.
      Revolving Credit Loans (excluding Swing Line Loans under the Swing Line Credit
      Subfacility discussed in Section 2.6 hereof) made to the Borrower on any Funding
      Date shall be in an aggregate minimum amount of (i) One Hundred Thousand Dollars
      ($100,000) and integral multiples of Ten Thousand Dollars ($10,000) in excess
      of
      that amount in the case of Base Rate

     

     

    
      
        
        

      

      
        -24-

        
          

        

      

      
        
        
 Loans,
        and (ii) Two Hundred Fifty Thousand Dollars ($250,000) and integral multiples
        of
        Fifty Thousand Dollars ($50,000) in excess of that amount in the case of
        Eurodollar Loans. Whenever the Borrower desires that the Banks make a Revolving
        Credit Loan to the Borrower, the Borrower shall deliver to the Agent Bank
        a
        Request For Revolving Credit Loan no later than 12:00 noon (Louisville, Kentucky
        time) at least three (3) Business Days in advance of the proposed Funding
        Date
        in the case of a Eurodollar Loan and on the proposed Funding Date in the
        case of
        a Base Rate Loan. The Request For Revolving Credit Loan shall be in the form
        of
Exhibit
        E
        annexed
        hereto and shall specify (i) the proposed Funding Date, (ii) the amount of
        the
        Revolving Credit Loan, (iii) whether the Revolving Credit Loan shall be a
        Base
        Rate Loan or a Eurodollar Loan, (iv) in the case of any Revolving Credit
        Loan
        requested to be made as a Eurodollar Loan, the initial Interest Period
        applicable thereto, and (v) that the amount of the proposed Revolving Credit
        Loan will not cause the Total Utilization of Revolving Loan Commitments to
        exceed the aggregate Revolving Loan Commitments. Revolving Credit Loans made
        to
        the Borrower may be continued as or converted into Base Rate Loans or Eurodollar
        Loans in the manner provided in Section 2.2D hereof. 

    

    

    Except
      as
      provided in Sections 3.2, 3.3 and 3.7 hereof, a Request For Revolving Credit
      Loan for a Eurodollar Loan shall be irrevocable on and after the related
      Interest Rate Determination Date, and the Borrower shall be bound to obtain
      the
      Eurodollar Loan in accordance there-with.

    

    D.     Disbursement
      of Revolving Credit Loans to the Borrower.
      All
      Revolving Credit Loans made to the Borrower under this Loan Agreement shall
      be
      made by the Banks simultaneously and pro-portionately in accordance with their
      respective Revolving Credit Facility Pro Rata Shares, it being understood that
      no Bank shall be responsible for any default by any other Bank in funding its
      Revolving Credit Facility Pro Rata Share of a Revolving Credit Loan requested
      hereunder by the Borrower, nor shall the Revolving Loan Commitment of any Bank
      be increased or decreased as a result of the default by another Bank in funding
      its Revolving Credit Facility Pro Rata Share of a Revolving Credit Loan
      requested hereunder by the Borrower. Each Bank shall make its Revolving Credit
      Facility Pro Rata Share of each Revolving Credit Loan to be made to the Borrower
      available to the Agent Bank, in same day funds, at the office of the Agent
      Bank
      located at 416 West Jefferson Street, Louisville, Kentucky not later than 1:00
      P.M. (Louisville, Kentucky time) on the Funding Date. Except with respect to
      the
      reimbursement to the Agent Bank for a drawing under a Letter of Credit issued
      by
      the Agent Bank as provided in Section 2.7 hereof, upon satisfaction or waiver
      of
      the conditions precedent specified in Section 4.1 in the case of the initial
      Revolving Credit Loan on the initial Funding Date and Section 4.2 in the case
      of
      a Revolving Credit Loan on any subsequent Funding Date, the Agent Bank shall
      make the proceeds of each Revolving Credit Loan requested by the Borrower
      available to the Borrower on the Funding Date by causing an amount of same
      day
      funds equal to the proceeds of the Banks' respective Revolving Credit Facility
      Pro Rata Shares of such Revolving Credit Loan received by the Agent Bank at
      its
      office located at the address set forth in the preceding sentence to be credited
      to the Borrower's Loan Account maintained at such office of the Agent Bank
      or
      wired to an account designated by the Borrower. All Revolving Credit Loans
      shall
      be respectively paid in full to the Banks on the Revolving Loan Commitment
      Termination Date.

     

     

    
      
        
        

      

      
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    Nothing
      in this Section 2.1D shall be deemed to relieve any Bank from its obligation
      to
      fulfill its Revolving Loan Commitment hereunder or to prejudice any rights
      that
      the Borrower may have against any Bank as a result of any default by such Bank
      here-under.

    

    E.     Records.
      Each
      Bank shall record the Revolving Credit Loans made to the Borrower from time
      to
      time and each re-payment or prepayment in respect of the principal amount of
      such Revolving Credit Loans in the Bank's electronic records. Any such
      recordation in accordance with the terms of this Loan Agreement shall be
      conclusive and binding on the Borrower absent manifest error; provided,
      the
      failure to make any such recordation, or any error in such recordation, shall
      not affect the Borrower's obliga-tion to repay all Revolving Credit Loans to
      the
      Banks in accordance with this Loan Agreement and the Revolving Credit
      Notes.

    
 

    F.    Borrower's
      Loan Accounts.

    

    (i)     Each
      Bank
      shall enter all Revolving Credit Loans made to the Borrower as debits in the
      Borrower's Loan Account maintained with such Bank. Each Bank shall also record
      in the Borrower's Loan Account maintained with such Bank in accordance with
      customary accounting practice all other charges, expenses and other items
      properly chargeable to the Borrower; all payments made by the Borrower on
      account of the Revolving Credit Loans made by such Bank; and other appropriate
      debits and credits. The debit balance of the Borrower's Loan Account maintained
      with such Bank shall reflect the unpaid principal balance of the Revolving
      Credit Loans from time to time maintained with such Bank. At least once each
      month the Agent Bank shall render a statement of account for the Borrower's
      Loan
      Account maintained with the Agent Bank and the other Banks, which statement
      shall be considered correct and accepted by the Borrower and con-clusively
      binding upon the Borrower in the absence of manifest error unless the Borrower
      notifies the Agent Bank to the contrary within thirty (30) days from the receipt
      of said statement by the Borrower.

    

    (ii)     Any
      and
      all principal, interest, charges and expenses, attorneys' fees and taxes now
      or
      hereafter due and owing under the Revolving Credit Notes and any of the other
      Loan Documents may be charged to any deposit account of the Borrower with a
      Bank
      or to the Borrower's Loan Account main-tained with such Bank.

    

    G.     Potential
      Increase in Total of Revolving Loan Commitments

    

    (i)      Amount
      of Increase in Revolving Loan Commitments.
      The
      Borrower may from time to time and at any time, with the consent of the Agent
      Bank (provided, however, if Borrower shall have complied with the provisions
      of
      this Section 2.1G such consent shall not be unreasonably withheld) but without
      the consent of the Banks, except as provided in Section 2.1G (ii) hereof,
      increase the total amount of the Revolving Loan Commitments by a maximum amount
      of up to Fifty Million Dollars ($50,000,000), to a total amount not to exceed
      One Hundred Million Dollars ($100,000,000), subject to satisfaction of each
      and
      all of the requirements contained in this Section 2.G (subject to those
      requirements, a "Permitted Commitment Increase"). 

     

     

    
      
        
        

      

      
        -26-

        
          

        

      

      
        
        

      

    

     

    (ii)     Eligibility.
      Each
      Bank which provides any part of the Permitted Commitment Increase (each a "New
      Commitment Provider") shall be either an existing Bank at the time of the
      increase (each an "Existing Bank") or a commercial bank, insurance company,
      savings and loan association, savings bank or other financial institution,
      pen-sion fund or mutual fund or other accredited investor reasonably acceptable
      to the Agent Bank and the Borrower that is not then currently a Bank (each
      a
      "New Bank"); provided,
      that
      the Borrower shall first offer any increase in the Revolving Loan Commitments
      to
      the Existing Banks by giving notice thereof to each of the Existing Banks and
      fifteen (15) Business Days to respond to such notice (failure to respond on
      a
      timely basis being deemed a rejection). Any notice given hereunder shall not
      be
      deemed to be a requirement of consent from any Existing Bank to the Permitted
      Commitment Increase.

    

    (iii)     Notice.
      The
      Borrower and the Agent Bank jointly shall notify the Banks at least fifteen
      (15)
      Business Days before the date ("Commitment Increase Effective Date") any
      increase in the total of the Revolving Loan Commitments shall become effective
      pursuant to this Section 2.1G. Such notice shall state the amount of the
      increase in the total of the Revolving Loan Commitments, the Commitment Increase
      Effective Date, and the names of any Existing Banks and/or New Banks providing
      the additional Revolving Loan Commitments.

    

    (iv)     Minimum
      Amount.
      Any
      increase in the Revolving Loan Commitments provided by any individual New Bank
      shall be in a minimum amount of not less than Five Million Dollars
      ($5,000,000).

    

    (v)     Implementation
      of Increase.
      On the
      Commitment Increase Effective Date;

    

    (a)    Joinder.
      Each New Commitment Provider shall execute and deliver to the Agent Bank two
      (2)
      Business Days prior to the Commitment Increase Effective Date a Joinder in
      the
      form attached as Exhibit
      K
      ("Lender
      Joinder"), which shall become effective on the Commitment Increase Effective
      Date. The Lender Joinder shall set forth the Revolving Loan Commitment provided
      by the New Commitment Provider if it is a New Bank and the new amount of the
      Revolving Loan Commitment and the increase in the Revolving Loan Commitment
      to
      be provided if it is an Existing Bank. If the New Commitment Provider is a
      New
      Bank it shall on the Effective Date join and become a party to this Loan
      Agreement and the other Loan Documents as a Bank for all purposes hereunder
      and
      thereunder, subject to the provisions of this Section 2.1G, having a Revolving
      Loan Commitment as set forth in the Lender Joinder tendered by the same. Any
      Bank whose Revolving Loan Commitment shall remain unaffected shall be deemed
      to
      have consented and agreed to such Lender Joinder.

    

    (b)    Base
      Rate
      Loans. Each New Commitment Provider shall (i) purchase from the other Banks
      such
      New Commitment Provider's Revolving Credit Facility Pro Rata Share in any Base
      Rate Loans outstanding on the Commitment Increase Effective Date (except any
      Base Rate Loan that is a Swing Loan), and (ii) share ratably in all Base Rate
      Loans borrowed by the Borrower after the Commitment Increase Effective Date
      (except any Base Rate

     

     

    
      
        
        

      

      
        -27-

        
          

        

      

      
        
        

      

    

    Loan
      that
      is a Swing Loan).

    

    (c)     Eurodollar
      Loans. Each New Commitment Provider shall (a) purchase from the other Banks
      such
      New Commitment Provider's Revolving Credit Facility Pro Rata Share in each
      outstanding Eurodollar Loan on the date on which the Borrower either renews
      its
      Eurodollar Loan election with respect to the Eurodollar Loan in question or
      converts such Eurodollar Loan to a Base Rate Loan, provided
      that the
      New Commitment Providers shall not purchase an interest in such Loans from
      the
      other Banks on the Commitment Increase Effective Date (unless the Commitment
      Increase Effective Date is a renewal or conversion date, as applicable, in
      which
      case the preceding sentence shall apply), and (b) shall participate in all
      new
      Eurodollar Loans borrowed by the Borrower on and after the Commitment Increase
      Effective Date.

    

    (d)    Letters
      of Credit. Each New Commitment Provider shall participate in all Letters of
      Credit outstanding on the Commitment Increase Effective Date according to its
      Revolving Credit Facility Pro Rata Share and in accordance with the terms of
      this Loan Agreement.

    

    (e)    Execution
      of Additional Documents. Any increase in the Revolving Loan Commitments pursuant
      to this Section 2.1G shall not become effective until the Borrower, the
      Guarantors, the Agent Bank and the New Commitment Providers have executed such
      amendments to the Loan Agreement, the Notes, the Guaranty Agreements and other
      related Loan Documents as the Agent Bank deems reasonably necessary to
      effectuate the purposes of this Section 2.1G.

     

    (vi)    No
      Event of Default or Potential Default; Representations and
      Warranties.
      There
      shall exist no Event of Default or Potential Default on the Commitment Increase
      Effective Date. Without limiting that sentence, the representations and
      warranties contained in Section 5 of this Loan Agreement must be true and
      correct in all material respects as of such Commitment Increase Effective Date
      except to the extent any such representation is stated to relate solely to
      an
      earlier date, in which case such representation shall have been true and correct
      on and as of such earlier date. If an Event of Default or Potential Default
      exists on such Commitment Increase Effective Date, or such representations
      and
      warranties are not true and correct to the extent and as required in the second
      sentence of this Section 2.1.G(vi), the Borrower shall not request an increase
      of, and may not increase, the total of the Revolving Loan
      Commitments.

    

    (vii)    No
      Obligation of Existing Banks to Increase Revolving Loan
      Commitment.
      No
      Existing Bank shall be obligated to increase its Revolving Loan Commitment
      in
      the event that the Borrower requests an increase in the total Revolving Loan
      Commitments, pursuant to this Section 2.1G. 

     

     

    
      
        
        

      

      
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    2.2     Interest
      on the Revolving Credit Loans.

    

    A.     Rates
      of Interest.
      Subject
      to the provisions of Section 2.2E, Section 3 and Section 13 hereof, each
      Revolving Credit Loan shall bear interest on the unpaid principal amount thereof
      from the date made through maturity (whether by acceleration or otherwise)
      at
      the (i) Base Rate plus the Applicable Base Rate Margin or (ii) the Adjusted
      LIBOR Rate plus the Applicable LIBOR Margin, as the case may be. The applicable
      in-terest rate mode with respect to Revolving Credit Loans shall be selected
      by
      the Borrower initially at the time a Request For Revolving Credit Loan is
      delivered to the Agent Bank pursuant to Section 2.1C hereof. The interest rate
      with respect to any Revolving Credit Loan may be changed by the Borrower from
      time to time pur-suant to Section 2.2D hereof. If on any day a Revolving Credit
      Loan is outstanding with respect to which notice has not been de-livered to
      the
      Agent Bank or the Banks in accordance with the terms of this Loan Agreement
      specifying the applicable interest rate, then, for that day, that Revolving
      Credit Loan shall bear interest at the Base Rate plus the Applicable Base Rate
      Margin.

    

    Subject
      to the provisions of Section 2.2E, Section 3 and Section 13 hereof, Revolving
      Credit Loans shall bear interest through maturity as follows:

    

    (i)     if
      a Base
      Rate Loan, at a rate equal to the Base Rate plus the Applicable Base Rate
      Margin.

    

    (ii)    if
      a
      Eurodollar Loan, at a rate per annum equal to the sum of the Adjusted LIBOR
      Rate
      plus the Applicable LIBOR Margin; provided
      that,
      on each
      Date of Determination, commencing with the first Date of Determination to occur
      after the Closing Date, the Applicable LIBOR Margin in effect for the Pricing
      Period commencing on such Date of Determination and continuing for the term
      of
      the Pricing Period that begins on such Date of Determination shall be the
      Applicable LIBOR Margin corresponding to the Pricing Level in effect for such
      Pricing Period, as follows:

    

    

      
        	
                 

                Pricing
                  Level

              	
                Adjusted
                  Funded Debt
                  to EBITDA

              	
                Applicable

                LIBOR
                  Margin

              	
                Applicable

                Base
                  Rate Margin

              
	
                 

                Pricing
                  Level I

                 

              	
                 

                >
                  0.00, but <
                  1.00

                 

              	
                 

                1.25%

                 

              	
                 

                0.00%

                 

              
	
                 

                Pricing
                  Level II

                 

              	
                 

                >
                  1.00, but <
                  1.50

                 

              	
                 

                1.50

                 

              	
                 

                0.00

                 

              
	
                 

                Pricing
                  Level III

                 

              	
                 

                >
                  1.50, but <
                  2.00

                 

              	
                 

                1.75

                 

              	
                 

                0.25

                 

              
	
                 

                Pricing
                  Level IV

                 

              	
                 

                >
                  2.00, but <
                  2.50

                 

              	
                 

                2.00

                 

              	
                 

                0.50

                 

              
	
                 

                Pricing
                  Level V

                 

              	
                 

                >
                  2.50, but <
                  3.00

                 

              	
                 

                2.50

                 

              	
                 

                1.00

                 

              
	
                 

                Pricing
                  Level VI

                 

              	
                 

                >
                  3.00, but <
                  3.50

                 

              	
                 

                3.00

                 

              	
                 

                1.50

                 

              
	
                 

                Pricing
                  Level VII

                 

              	
                 

                >
                  3.50

                 

              	
                 

                3.50

                 

              	
                 

                2.00

                 

              

      

      
 

    

    Notwithstanding
      anything in the foregoing to the contrary, if any Compliance Certificate (the
      form of which is included as Exhibit
      G)
      delivered by the Borrower demonstrating the appropriate Pricing Level shall
      prove to be incorrect (as determined by reference to a subsequent 

     

     

    
      
        
        

      

      
        -29-

        
          

        

      

      
        
        
Compliance
        Certificate), then such Compliance Certificate shall no longer be in ef-fect.
        In
        such event, the Agent Bank shall calculate the difference between the amount
        of
        interest actually paid by the Borrower on Eurodollar Loans on the basis of
        such
        incorrect Compliance Certificate and the amount of interest which would have
        been due on such Eurodollar Loans had such incorrect Compliance Certificate
        not
        been delivered, and shall forward to the Borrower a statement setting forth
        the
        amount of the difference and the method of calcu-lation of such amount (which
        calculation, in the absence of demon-strable error, shall be deemed correct)
        and
        the Borrower shall pay such amount to the Agent Bank for the benefit of the
        Banks within three (3) Business Days of such notice.

    

    

    B.     Interest
      Periods for Eurodollar Loans. In
      connection with each Eurodollar Loan, the Borrower may, pursuant to the
      applicable Request For Revolving Credit Loan, select the Interest Period to
      be
      applicable to such Eurodollar Loan, which Interest Period shall be at the
      Borrower's option either a one, two, three or six month period. The following
      provisions are applicable to Interest Periods generally:

    

    (i)     the
      initial Interest Period for any Eurodollar Loan shall commence on the Funding
      Date of such Eurodollar Loan, in the case of a Revolving Credit Loan initially
      made as a Eurodollar Loan, or on the date specified in the applicable Notice
      of
      Conversion/Continuation, in the case of a Revolving Credit Loan converted to
      a
      Eurodollar Loan;

    

    (ii)     in
      the
      case of immediately successive Interest Periods applicable to a Eurodollar
      Loan
      continued as such pursuant to Notice of Conversion/Continuation, each successive
      Interest Period shall commence on the day on which the next preceding Inter-est
      Period expires;

    

    (iii)     if
      an
      Interest Period would otherwise expire on a day that is not a Business Day,
      such
      Interest Period shall expire on the next succeeding Business Day; provided
      that,
      if any
      Interest Period would otherwise expire on a day that is not a Business Day
      but
      is a day of the month after which no further Business Day occurs in such month,
      such Interest Period shall expire on the next preceding Business
      Day;

    

    (iv)    any
      Interest Period of a Eurodollar Loan that begins on the last Business Day of
      a
      calendar month (or on a day for which there is no numerically corresponding
      day
      in the calendar month at the end of such Interest Period) shall, subject to
      clause (iii) of this Section 2.2B, end on the last Business Day of a calendar
      month;

    

    (v)    in
      the
      event the Borrower fails to specify an Interest Period with respect to a
      Eurodollar Loan in the applicable Request For Revolving Credit Loan or Notice
      of
      Conversion/Continuation, the Borrower shall be deemed to have selected an
      Interest Period of one month; and

    

    (v)  no
      Interest Period shall extend beyond the Revolving Loan Commitment Termination
      Date.

     

     

     

    
      
        
        

      

      
        -30-

        
          

        

      

      
        
        

      

    

    
 

    C.     Interest
      Payments.
      Subject
      to the provisions of Section 2.2E hereof, interest shall be payable on the
      Revolving Credit Loans as follows:

    

    (i)     interest
      on each Base Rate Loan shall be pay-able in arrears on and to the last day
      of
      each calendar quarter, and at matu-rity (including final maturity);
      and

    

    (ii)     interest
      on each Eurodollar Loan shall be pay-able in arrears on and to the ninetieth
      (90th) day during each Interest Period applicable to that Eurodollar Loan,
      the
      last day of each Interest Period applicable to that Eurodollar Loan, and upon
      any prepay-ment or repayment of that Eurodollar Loan (to the extent accrued
      on
      the amount being prepaid or repaid) and at maturity (including final
      maturity).

    

    D.     Conversion
      or Continuation of Interest Rate Modes.
      Subject
      to the provi-sions of Section 2.4 hereof, the Borrower shall have the option
      (i)
      at any time to convert all or any part of outstanding Revolving Credit Loans
      bearing interest as Base Rate Loans to Revolving Credit Loans bearing interest
      as Eurodollar Loans; and (ii) upon the expiration of any Interest Period
      appli-cable to a Revolving Credit Loan bearing interest as a Eurodollar Loan,
      (a) to continue all or any portion of such Loan as a Eurodollar Loan, with
      the
      succeeding Interest Period of such continued Eurodollar Loan to commence on
      the
      most recent Interest Payment Date thereof or (b) to convert all or any part
      of
      such Loan to a Base Rate Loan. The Borrower shall deliver a Notice of
      Conversion/Continuation to the Agent Bank no later than 12:00 noon (Louisville,
      Kentucky time) at least three (3) Business Days in advance of the proposed
      conversion/continuation date. A Notice of Conversion/Continuation shall specify
      (i) the proposed conversion/continuation date (which shall be a Business Day),
      (ii) the amount of the Re-volving Credit Loan to be converted/continued, (iii)
      the nature of the proposed conversion/continuation, (iv) in the case of a
      conver-sion to, or continuation of, a Eurodollar Loan, the requested In-terest
      Period, and (v) in the case of a conversion to, or a continuation of, a
      Eurodollar Loan or a Base Rate Loan, that no Event of Default has occurred
      and
      is continuing. 

    

    Except
      as
      otherwise provided in Sections 3.2, 3.3 and 3.7 hereof, a Notice of
      Conversion/Continuation for conversion to, or continuation of, a Eurodollar
      Loan
      shall be irrevocable on and after the related Interest Rate Determination Date
      and the Borrower shall be bound to effect a conversion or continuation in
      accordance therewith.

    

    E.     Post-Maturity
      Interest.
      Any
      principal payments on the Revolving Credit Loans not paid when due and, to
      the
      extent permitted by applicable law, any interest payments on the Revolving
      Credit Loans or any fees or other amounts owed by the Borrower hereunder not
      paid when due, in each case whether at stated matu-rity, by notice of
      prepayment, by acceleration or otherwise, shall thereafter bear interest
      (including post-petition interest in any proceeding under the Bankruptcy Code
      or
      other applicable bankruptcy laws) payable on demand at a rate equal to the
      Default Rate. Pay-ment or acceptance of the increased rates of interest provided
      for in this Section 2.2E is not a permitted alternative to timely pay-ment
      and
      shall not constitute a waiver of any Event of Default or otherwise prejudice
      or
      limit any rights or remedies of the Banks.

     

     

    
      
        
        

      

      
        -31-

        
          

        

      

      
        
        

      

    

     

    F.     Computation
      of Interest.
      Interest on Revolving Credit Loans shall be computed on the basis of a 360-day
      year, and the actual number of days elapsed in the period dur-ing which it
      accrues. In computing interest on any Revolving Credit Loan, the date of the
      making of such Revolving Credit Loan or the first day of an Interest Period
      applicable to such Revolving Credit Loan, as the case may be, shall be included,
      and the date of pay-ment of such Revolving Credit Loan or the expiration date
      of
      an Interest Period applicable to such Revolving Credit Loan or, with respect
      to
      a Revolving Credit Loan being converted to a Eurodollar Loan or a Base Rate
      Loan, the date of conversion of such Revolving Credit Loan to such Eurodollar
      Loan or a Base Rate Loan shall be excluded; provided that if a Revolving Credit
      Loan is repaid on the same day on which it is made, one day's interest shall
      be
      paid on that Revolving Credit Loan.

    

    G.     Limitation
      on Eurodollar Loan Tranches.
      At no
      time shall the number of Revolving Credit Loans bearing interest as Eurodollar
      Loans outstanding at any time outstanding exceed eight (8) in the
      aggregate.

    

    2.3     Fees.

    

    A.     Commitment
      Fees.

    

    (i)     The
      Borrower agrees to pay to the Agent Bank, for the benefit of the Banks in
      proportion to their respective Revolving Credit Facility Pro Rata Shares,
      commitment fees (the "Revolving Credit Facility Commitment Fees") for the period
      from and including the Closing Date to and excluding the Revolving Loan
      Commitment Termination Date, equal to the difference between the Revolving
      Loan
      Commitments (as they may be reduced pur-suant to Section 2.4C hereof or
      increased pur-suant to Section 2.1G hereof) and the aggregate out-standing
      principal amount of Revolving Credit Loans, Swing Line Usage and the Letter
      of
      Credit Usage (the "Average Revolving Credit Facility Usage") determined on
      an
      average daily basis, multiplied by the Applicable Commitment Fee Percentage
      set
      forth below; provided
      that,
      on each
      Date of Determination, the Applicable Commitment Fee Percentage in effect for
      the Pricing Period commencing on such Date of Determination and continuing
      for
      the term of such Pricing Period shall be the Applicable Commitment Fee
      Percentage corresponding to the Pricing Level in effect for such Pricing Period,
      as follows:

     

    

      
        	
                 

                 

                Pricing
                  Level

              	
                 

                Adjusted
                  Funded Debt
                  to EBITDA

              	
                Applicable

                Commitment
                  Fee Percentage

              
	
                 

                Pricing
                  Level I

                 

              	
                 

                >
                  0.00, but <
                  1.00

                 

              	
                 

                0.20%

                 

              
	
                 

                Pricing
                  Level II

                 

              	
                 

                >
                  1.00, but <
                  1.50

                 

              	
                 

                0.25

                 

              
	
                 

                Pricing
                  Level III

                 

              	
                 

                >
                  1.50, but <
                  2.00

                 

              	
                 

                0.30

                 

              
	
                 

                Pricing
                  Level IV

                 

              	
                 

                >
                  2.00, but <
                  2.50

                 

              	
                 

                0.35

                 

              
	
                 

                Pricing
                  Level V

                 

              	
                 

                >
                  2.50, but <
                  3.00

                 

              	
                 

                0.40

                 

              

      

    

     

    

       

    

    
      
        
        

      

      
        -32-

        
          

        

      

      
        
        

      

    

    The
      Revolving Credit Facility Com-mitment Fees shall be calculated on the basis
      of a
      360-day year and the actual number of days elapsed and shall be payable on
      any
      date that a Compliance Certificate is due to be submitted to the Agent Bank.
      The
      Borrower hereby authorizes the Agent Bank to debit the Borrower's account for
      Revolving Credit Facility Com-mitment Fees that are due and payable (provided
      the Agent Bank has first given the Borrower notice of the amount of such fees
      and the date on which such fees will be debited from the Borrower's Account)
      and
      to distribute such fees to the Banks in proportion to their respective Revolving
      Credit Facility Pro Rata Shares. The Borrower shall have no liability to any
      Bank for any Revolving Credit Facility Commit-ment Fees paid to the Agent Bank
      which the Agent Bank does not properly remit to such Bank, and such Bank's
      sole
      remedy in respect thereof shall be against the Agent Bank.

    

    (ii)     Notwithstanding
      anything in the foregoing to the contrary, if any Compliance Certificate
      delivered by the Borrower demonstrating the appropriate Pricing Level shall
      prove to be incorrect (as determined by reference to a subsequent Compliance
      Certificate), such Compliance Certificate shall no longer be in effect, and
      the
      Agent Bank shall notify the Borrower of its determination and provide the
      Borrower with a statement setting forth (a) the properly calculated Revolving
      Credit Facility Commitment Fees for such Pricing Period, (b) the difference
      between the properly calculated Revolving Credit Facility Commitment Fees for
      such Pricing Period and the amounts actually paid by Borrower with respect
      to
      such fees, (c) any amount due and owing to the Banks as a result of the Agent
      Bank's calculation and (d) the Agent Bank's method of calcu-lation of the
      foregoing (which calculation, in the absence of demon-strable error, shall
      be
      deemed correct). The Borrower shall pay any amount due and owing to the Agent
      Bank for the benefit of the Banks within three (3) Business Days of such
      notice.

    

    B.     Amendment
      Fee and Extension Fee.
      The
      Borrower shall pay to the Agent Bank on the Closing Date for the benefit of
      the
      Banks in proportion to their respective Revolving Credit Facility Pro Rata
      Shares on the Closing Date, an amendment fee (the "Amendment Fee") equal to
      25/100 of one percent (0.25%) of the Revolving Loan Commitments and an extension
      fee (the "Extension Fee") equal to 25/100 of one percent (0.25%) of the
      Revolving Loan Commitments (the total of the Amendment Fee and the Extension
      Fee
      being 50/100 of one percent (0.50%) of the Revolving Loan Commitments). The
      Borrower shall have no liability to any Bank for the portion of any Amendment
      Fee and Extension Fee paid to Agent Bank which the Agent Bank does not properly
      remit to such Bank, and such Bank's sole remedy in respect thereof shall be
      against the Agent Bank.

    

    C.     Other
      Fees and Expenses.
      The
      Borrower agrees to pay to the Agent Bank such fees for serving as the Agent
      Bank
      hereunder in the amounts and at the times agreed to in writing between the
      Borrower and the Agent Bank, as well as any other fees agreed to in writing
      between the Borrower and the Agent Bank. The Borrower also agrees to pay to
      the
      Agent Bank on the Closing Date the reasonable fees and expenses of the Agent
      Bank's counsel in negotiating, drafting and closing this Loan Agreement, the
      Loan Documents and related documents. 

     

     

    
      
        
        

      

      
        -33-

        
          

        

      

      
        
        

      

    

    

    2.4     Prepayments
      and Payments; Reductions in Revolving Loan Commitments.

    

    A.     Voluntary
      Prepayments.
      The
      Borrower may, upon not less than one (1) Business Day prior written notice
      to
      the Agent Bank, at any time and from time to time, prepay any Revolving Credit
      Loans (other than Swing Line Loans, which are discussed in Section 2.6 hereof)
      in whole or in part in an aggregate minimum amount of One Hundred Thousand
      Dollars ($100,000) and integral multiples of Twenty Five Thousand Dollars
      ($25,000) in excess of that amount; provided however that in the event that
      the
      Borrower prepays a Eurodollar Loan pursuant to this Section 2.4A on a date
      that
      is other than the expiration date of the Interest Period applicable thereto,
      the
      Borrower shall com-pensate the Banks in accordance with the provisions of
      Section 3.4 hereof. If the Borrower has given notice of prepayment as
      afore-said, the principal amount of the Revolving Credit Loans specified in
      such
      notice shall become due and payable on the prepayment date specified therein.
      All prepayments of principal of the Revolving Credit Loans shall be accompanied
      by the payment of accrued inter-est on the principal amount being prepaid and
      shall be applied to the payment of interest before application to principal.
      All
      pre-payments of the Revolving Credit Loans shall be applied first to Base Rate
      Loans to the full extent thereof and then shall be applied to Eurodollar Loans,
      in each case in a manner which minimizes the amount of any payments required
      to
      be made by the Borrower pursuant to Section 3.4 hereof.

    

    B.     General
      Provisions Regarding Payments.

    

    (i)     Manner
      and Time of Payment.
      All
      payments of principal, interest and fees hereunder and under the Revolving
      Credit Notes by the Borrower shall be made without defense, setoff and
      counterclaim and in same day funds and delivered to the Agent Bank not later
      than 12:00 noon (Louisville, Kentucky time) on the date due at its office
      located in Louisville, Ken-tucky; funds received by the Agent Bank after that
      time shall be deemed to have been paid by the Borrower on the next suc-ceeding
      Business Day. The payments to be made by the Borrower with respect to the
      Revolving Credit Notes for the benefit of the Banks shall be aggregated into
      a
      single payment made by the Borrower to the Agent Bank for the benefit of the
      Banks. The Agent Bank shall be responsible for remitting to each Bank its
      portion of such payment based upon its Revolving Credit Facility Pro Rata Share
      of such payment. 

    

    (ii)     Payments
      on Business Days.
      Whenever any pay-ment to be made hereunder or under the Revolving Credit Notes
      shall be stated to be due on a day that is not a Business Day, such pay-ment
      shall be made on the next succeeding Business Day (unless no further Business
      Day occurs in such month, in which case payment shall be made on the next
      preceding Business Day) and such exten-sion or reduction of time shall be
      included in the computation of the payment of interest hereunder or under the
      Revolving Credit Notes or of the Revolving Credit Facility Commitment Fees,
      as
      the case may be.

    

    (iii)      Authorization
      to Debit Borrower's Operating Account for Payments.
      To
      effectuate any payment due under this Loan Agreement or the Revolving Credit
      Notes, the Borrower hereby authorizes the Agent Bank to initiate debit entries
      to the Borrower's operating account maintained with the Agent Bank and to debit
      the same to such account. This

     

     

    
      
        
        

      

      
        -34-

        
          

        

      

      
        
        

      

    

    authorization
      to initiate debit entries shall remain in full force and effect until the Agent
      Bank has received written notification of its termination in such time and
      in
      such manner as to afford the Agent Bank a reasonable opportunity to act on
      it.
      The Borrower acknowledges (1) that such debit entries may cause an overdraft
      of
      any such account which may result in the Agent Bank's refusal to honor items
      drawn on any such account until adequate deposits are made to any such account;
      (2) that the Agent Bank is under no duty or obligation to initiate any debit
      entry for any purpose; and (3) that if a debit is not made because any such
      account does not have a sufficient available balance, or otherwise, the payment
      may be late or past due. 

    

    C.    
Voluntary
      Reduction of Revolving Loan Commitments.
      The
      Borrower shall have the right, at any time and from time to time, to terminate
      in whole or permanently reduce in part, without premium or penalty, the
      Revolving Loan Commitments. The Borrower shall give not less than five (5)
      Business Days' prior written notice to the Agent Bank designating the date
      (which shall be a Business Day) of such termination or reduction and the amount
      of any partial reduction of the Revolving Loan Commitments. Such termination
      or
      partial reduction of the Revolving Loan Commitments shall be effective on the
      date specified in the Borrower's notice and shall reduce the Revolving Loan
      Commitment of each Bank in proportion to its Revolving Credit Facility Pro
      Rata
      Share. Any such partial reduction of the Revolving Loan Commitments shall be
      in
      a minimum amount of One Million Dollars ($1,000,000) and integral multiples
      of
      One Hundred Thousand Dollars ($100,000) in excess of that amount.

    

      D.    Mandatory
        Permanent Reduction in Revoloving Loan Commitments Upon Receipt of Dana
        Payment.  Within one (1) Business Day of the receipt by the
        Borrower or any Subsidiary of any Dana Payment, the Borrower shall give written
        notice thereof to the Agent Bank, 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 Borrower will make a prepayment in respect of the Revolving Credit Notes
        and
        cause a permanent reduction in the Revolving Loan Commitments in accordance
        with
        the terms of this Section 2.4D. On such specified prepayment date (the
        "Specified Prepayment Date"), the Borrower shall pay to the Agent Bank, for
        the
        benefit of the Banks in accordance with their Revolving Credit Facility Pro
        Rata
        Shares, and there shall become due and payable, an amount equal to the Banks'
        Ratable Portion (the definition of which is set forth below) of such Dana
        Payment. Until such time as the Commitment Reduction Condition has been
        satisfied (x) the outstanding Revolving Credit Loans shall be paid down in
        amount equal to the result obtained in clause (i) of the definition of Ratable
        Portion in respect of such Dana Payment, and to the extent the Agent Bank
        holds
        moneys in excess of that needed to reduce the balance of the Revolving Credit
        Loans to $0, and no Event of Default shall then exist, the excess shall be
        remitted to the Borrower, and (y) the Banks' respective Revolving Loan
        Commitments shall be permanently reduced in an amount equal to the result
        obtained in clause (i) of the definition of Ratable Portion in respect of
        such
        Dana Payment until such time as the total Revolving Loan Commitments equal
        $25,000,000, in which case the Revolving Loan Commitments shall not be further
        reduced under this Section 2.4D. Once the Commitment Reduction Condition
        has
        been satisfied to the extent there is any remaining amount of the Creditors'
        Share of such Dana Payment after making the payments required to be made
        by
        clause (ii)(A) of the definition of Ratable Portion and clause (ii)(A) of
        the
        definition of "Ratable

       

       

      
        
          
          

        

        
          -35-

          
            

          

        

        
          
          

        

      

       

      Portion"
        in Section 8.1(b) of the Note Purchase Agreement, such amount shall be applied
        for the benefit of the Noteholders pursuant to Section 8.1(b)(ii)(B) of the
        Note
        Purchase Agreement. 

    

    For
      purposes of this Section 2.4D:

    

    "Ratable
      Portion" shall mean, with respect to the Banks and a Dana Payment, a principal
      amount 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 of (I) the aggregate principal amount of the then current Revolving
      Loan
      Commitments as of the date of receipt by the Borrower or such Subsidiary of
      such
      Dana Payment, divided
      by
      (II) the
      sum of (x) the aggregate then outstanding principal amount of the $55,000,000
      Senior Notes, plus (y) the then outstanding Revolving Loan Commitments;
      and

    

    (ii)    
once
      the
      Commitment Reduction Condition has been met and thereafter, (A) the
      Creditors' Share of such Dana Payment, multiplied
      by (B)
      the
      result of (I) the average daily balance of the Revolving Credit Loans hereunder
      over the period of 90 days immediately preceding the date of receipt by the
      Borrower or such Subsidiary of such Dana Payment, divided
      by
      (II) the
      sum of (x) the aggregate then outstanding principal amount of the Notes as
      of
      the date of receipt by the Borrower or such Subsidiary of such Dana Payment,
      plus (y) the average daily balance of the Revolving Credit Loans hereunder
      over
      the period of 90 days immediately preceding such date. 

    

    "Commitment
      Reduction Condition"
      shall
      mean, at any time that the Borrower 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 2.4D or Section 8.1(b)
      of
      the Note Purchase Agreement in respect of such Dana Payment, the Revolving
      Loan
      Commitments have been reduced to $25,000,000 or less .

    

    As
      used
      in this Section 2.4D,
      "Revolving Loan Commitments"
      shall
      have the meaning ascribed to such term in the Definitions section of this Loan
      Agreement, provided that the amount of the "Revolving Loan Commitments" as
      such
      term is used in this Section shall not include any credit availability which
      has
      not been used by the Borrower to the extent the Borrower's ability to use such
      credit availability has been terminated as a result of an Event of Default
      or
      other term or condition relating to the Borrower's credit condition which,
      in
      either case, exists as of the date of determination.

    

    

    

    
      
        
        

      

      
        -36-

        
          

        

      

      
        
        

      

    

    

     

    2.5     Use
      of
      Proceeds.

    

    A.     Revolving
      Credit Loans.
      The
      proceeds of the Revolv-ing Credit Loans shall be used by the Borrower to finance
      Permitted Acquisitions, to finance working capital requirements and to finance
      general corporate purposes of the Borrower.

    

    B.     Margin
      Regulations.
      No
      portion of the proceeds of any Revolving Credit Loans under this Loan Agreement
      shall be used by the Borrower in any manner which might cause the making of
      the
      Revolving Credit Loans or the application of the proceeds thereof to violate
      Regulation G, Regulation U, Regulation T, or Regulation X of the Board of
      Governors of the Federal Reserve System or any other regulation of such Board
      or
      to violate the Securities and Exchange Act of 1934, in each case as in effect
      on
      the date or dates of the making of any such Revolving Credit Loan and such
      use
      of the proceeds thereof. If requested by the Banks, the Borrower shall execute
      and deliver to the Banks a completed Federal Reserve Form U-1.

    

    2.6     Swing
      Line Credit Subfacility.
      Subject
      to the terms and conditions of this Loan Agreement, the Agent Bank hereby agrees
      to make Swing Line Loans to the Borrower under the Swing Line Credit
      Subfacility.

    

    A.     Swing
      Line Credit Subfacility.
      From
      the date hereof throughout the Swing Line Commitment Period, and subject to
      the
      terms, conditions and other provisions of this Loan Agreement, the Agent Bank
      agrees to make Swing Line Loans to the Borrower from time to time in a total
      amount not exceeding Five Million Dollars ($5,000,000) in amounts of One
      Thousand Dollars ($1,000) and integral multiples of One Thousand Dollars
      ($1,000) in excess thereof. The Swing Line Credit Subfacility is established
      for
      the administrative convenience of the Borrower, the Agent Bank and the Banks.
      During the Swing Line Commitment Period the Borrower may borrow and repay
      advances under the Swing Line Credit Subfacility in whole or in part, and
      reborrow all in accordance with the terms, conditions and other provisions
      of
      this Loan Agreement. The making of each Swing Line Loan shall be subject to
      the
      further provisions of this Section 2.6, and shall be subject to all of the
      conditions of lending stated in Section 4.2 being fulfilled at the time of
      each
      Swing Line Loan, and provided further that each Swing Line Loan shall be on
      the
      terms and subject to the conditions hereinafter stated.

    

    (i)     Interest.
      Swing
      Line Loans shall bear interest (calculated on the basis that an entire year's
      interest is earned in 365 or 366 days as the case may be) from the date of
      each
      such Swing Line Loan until repaid at an annual rate equal to the Base Rate
      plus
      the Applicable Base Rate Margin. After maturity, whether by acceleration or
      scheduled maturity, until paid in full, or when and so long as there shall
      exist
      any uncured Event of Default, Swing Line Loans shall bear interest at the
      applicable Default Rate. Interest shall be due and payable to the Agent Bank
      at
      the end of each calendar quarter following receipt of a statement from the
      Agent
      Bank and on the Swing Line Commitment Termination Date.

    

    (ii)     Principal.
      The
      Borrower shall pay all principal of each Swing Line Loan within ten (10)
      Business Days from the date of such Loan. To the extent that the Borrower fails
      to repay such amount by such date, the Agent Bank shall convert the outstanding
      principal 

     

     

    
      
        
        

      

      
        -37-

        
          

        

      

      
        
        
balance
        of such Swing Line Loan to a Revolving Credit Loan, to be payable on the
        dates
        and in the manner set forth in Article II hereof and to bear interest as
        a Base
        Rate Loan or, at the Borrower's option, as a Eurodollar Loan, any Eurodollar
        Loan shall be in the minimum amount of Two Hundred Fifty Thousand Dollars
        ($250,000) and integral multiples of Fifty Thousand Dollars ($50,000) in
        excess
        thereof. The Borrower shall pay the Agent Bank the outstanding principal
        balance
        of all Swing Line Loans on the Swing Line Commitment Termination
        Date.

    

    

    (iii)     Conditions
      for Swing Line Loans.
      So long
      as no Event of Default shall have occurred and be continuing, during the Swing
      Line Commitment Period, the Borrower may borrow, repay and reborrow under the
      Swing Line Credit Subfacility on any Business Day, subject to the terms,
      conditions and other provisions of this Loan Agreement. The making of Swing
      Line
      Loans will be conditioned upon receipt by the Agent Bank from the Borrower,
      of a
      Request for Swing Line Loan by 12:00 noon Louisville, Kentucky, time on the
      Business Day of the requested Swing Line Loan. Notwithstanding the foregoing,
      the Agent Bank may, in its sole discretion, accept a written request made on
      behalf of the Borrower by an Authorized Officer by telex, facsimile or some
      other form of written electronic communication, in which case the Agent Bank
      shall be entitled to rely on any such written request received by the Agent
      Bank
      in good faith from anyone reasonably believed by the Agent Bank to be an
      Authorized Officer. The Borrower shall promptly confirm any such communication
      by delivery of a Request for Swing Line Loan upon request of the Agent Bank.
      Disbursements of, and payments of principal, with respect to Swing Line Loans
      may be evidenced by notations of the Agent Bank in its electronic data
      processing equipment. The aggregate amount of all disbursements of Swing Line
      Loans made and shown on the Agent Bank's electronic data processing equipment,
      over all of the payments of principal made by the Borrower and recorded on
      the
      Agent Bank's electronic data processing equipment shall be prima facie
      evidence
      of the outstanding principal balance due under the Swing Line Credit
      Subfacility.

    

    (v)     General
      Provisions Regarding Payments.

    

    (a)     Manner
      and Time of Payment.
      All
      payments of principal, interest and fees hereunder and under the Swing Line
      Credit Subfacility by the Borrower shall be made without defense, setoff and
      counterclaim and in same day funds and delivered to the Agent Bank not later
      than 12:00 noon (Louisville, Kentucky time) on the due date therefor at its
      office located in Louisville, Kentucky; funds received by the Agent Bank after
      that time shall be deemed to have been paid by the Borrower on the next
      succeeding Business Day.

    

    (b)     Payments
      on Business Days.
      Whenever any pay-ment to be made hereunder or under the Swing Line Credit
      Subfacility shall be stated to be due on a day that is not a Business Day,
      such
      payment shall be made on the next succeeding Business Day (unless no further
      Business Day occurs in such month, in which case payment shall be made on the
      next preceding Business Day) and such extension or reduction of time shall
      be
      included in the computation of the payment of interest hereunder or under the
      Swing Line Credit Subfacility.

    

    (vi)     Voluntary
      Reduction of Swing Line Loan Commitment.
      The
      Borrower shall have the right, at any time and from time to time, to terminate
      in whole or 

     

     

    
      
        
        

      

      
        -38-

        
          

        

      

      
        
        
permanently
        reduce in part, without premium or penalty, the Swing Line Loan Commitment.
        The
        Borrower shall give not less than five (5) Business Days' prior written notice
        to the Agent Bank designating the date (which shall be a Business Day) of
        such
        termination or reduction and the amount of any partial reduction of the Swing
        Line Loan Commitment. Such termina-tion or partial reduction of the Swing
        Line
        Loan Commitment shall be effective on the date specified in the Borrower's
        notice. Any such partial reduction of the Swing Line Loan Commitment shall
        be in
        a mini-mum amount of One Hundred Thousand Dollars ($100,000).

    

    

    (vii)     Other
      Banks.
      Swing
      Line Loans will be made by the Agent Bank in its individual capacity. Upon
      a
      request to reduce the principal amount outstanding in Swing Line Loans from
      the
      Agent Bank, the Banks shall make advances based on their Revolving Credit
      Facility Pro Rata Shares in amounts sufficient to effect the requested reduction
      in Swing Line Loans. Any such advances will be made pursuant to the terms and
      conditions set forth in this Loan Agreement.

    

    (viii)     Limitation.
      The
      Borrower may not request that the Agent Bank make any Swing Line Loan if, after
      making such Swing Line Loan, (x) the total aggregate principal amount of
      outstanding Swing Line Loans would exceed Five Million Dollars ($5,000,000),
      or
      (y) the Total Utilization of Revolving Loan Commitments would exceed the
      Revolv-ing Loan Commitments, as the amount available under such Revolving Loan
      Commitments may be reduced from time to time pursuant to Section
      2.4C.

    

    B.      Use
      of
      Proceeds.

    

    (i)     Swing
      Line Loans.
      The
      principal of the Swing Line Loans shall be used by Borrower for any lawful
      corporate purposes.

    

    (ii)     Margin
      Regulations.
      No
      portion of the principal of the Swing Line Loans shall be used by the Borrower
      in any manner which might cause the making of the Swing Line Loan or the
      application of the proceeds thereof to violate Regulation G, Regulation U,
      Regulation T, or Regulation X of the Board of Governors of the Federal Reserve
      System or any other regulation of such Board or to violate the Securities and
      Exchange Act of 1934, in each case as in effect on the date or dates of each
      Swing Line Loan. If requested by the Agent Bank, the Borrower shall execute
      and
      deliver to the Agent Bank a completed Federal Reserve Form U-1.

    

    2.7     Letters
      of Credit.

    

    A.     Letters
      of Credit.
      Subject
      to the terms and conditions of this Loan Agreement and in reliance upon the
      representations and warranties of the Borrower set forth herein, the Borrower
      may request, in accordance with the provisions of this Section 2.7A, that on
      and
      after the Closing Date, the Agent Bank issue Letters of Credit for the account
      of the Borrower denominated in Dollars. Issuances of Letters of Credit shall
      be
      subject to the following limitations:

     

     

    
      
        
        

      

      
        -39-

        
          

        

      

      
        
        

      

    

    
 

    (i)     The
      Borrower may not request that the Agent Bank issue any Letter of Credit if,
      after giving effect to such issuance, (x) the total Letter of Credit Usage
      would
      exceed Fifteen Million Dollars ($15,000,000), or (y) the Total Utilization
      of
      Revolving Loan Commitments would exceed the Revolv-ing Loan Commitments, as
      the
      amount available under such Revolving Loan Commitments may be reduced from
      time
      to time pursuant to Sections 2.4C.

    

    (ii)     In
      no
      event shall the Agent Bank issue, reissue, amend or permit the extension of:
      (y)
      any Letter of Credit having an expiration date later than the Revolving Loan
      Commitment Termination Date in effect at the time of issuance, reissuance,
      amendment or extension (automatic or otherwise) thereof; or (z) subject to
      the
      foregoing clause (y), any Letter of Credit having an expiration date more than
      one year after its date of issuance; provided that subject to the foregoing
      clause (y), this clause (z) shall not prevent the Agent Bank from agreeing
      that
      a Letter of Credit will automatically be extended annually for one or more
      periods each not to exceed one year if the Agent Bank does not cancel such
      extension, subject to the Banks extending the Revolving Loan Commitment
      Termination Date.

    

    It
      shall
      be a condition precedent to the issuance of any Letter of Credit in accordance
      with the provisions of this Section 2.7 that each condition set forth in
      Sections 4.1 and 4.2A and 4.2B of this Loan Agreement shall have been
      satisfied.

    

    Immediately
      upon the issuance of each Letter of Credit, each Bank shall be deemed to, and
      hereby agrees to, have irrevocably purchased from the Agent Bank a participation
      in such Letter of Credit and drawings thereunder in an amount equal to such
      Bank's Revolving Credit Facility Pro Rata Share of the maximum amount which
      is
      or at any time may become available to be drawn thereunder.

    

    Each
      Letter of Credit shall provide that it shall be subject to the Uniform Customs
      and Practice of Documentary Credits (1993 Revision), International Chamber
      of
      Commerce Brochure No. 500, or any successor thereto. Each Letter of Credit
      may
      provide that the Agent Bank may (but shall not be required to) pay the
      beneficiary thereof upon the occurrence of an Event of Default and the
      acceleration of the maturity of the Revolving Credit Loans or, if payment is
      not
      then due to the beneficiary, provide for the deposit of funds in an account
      to
      secure payment to the beneficiary and that any funds so deposited shall be
      paid
      to the beneficiary of the Letter of Credit if conditions to such payment are
      satisfied or returned to the Agent Bank for distribution to the Banks (or,
      if
      all Obligations shall have been indefeasibly paid in full, to the Borrower)
      if
      no payment to the beneficiary has been made and thirty (30) days after the
      final
      date available for drawings under the Letter of Credit has passed. Each payment
      or deposit of funds by the Agent Bank as provided in this paragraph shall be
      treated for all purposes of this Loan Agreement as a drawing duly honored by
      the
      Agent Bank under the related Letter of Credit.

    

    B.     Notice
      of Issuance.
      Whenever the Borrower desires the issuance of a Letter of Credit, the Borrower
      shall deliver to the Agent Bank an Application and Agreement for Letter of
      Credit in the form of Exhibit
      C
      annexed
      hereto no later than 12:00 noon (Louisville, 

     

     

    
      
        
        

      

      
        -40-

        
          

        

      

      
        
        
Kentucky
        time) at least ten (10) Business Days, or in each case such shorter period
        as
        may be agreed to by the Agent Bank in any particular instance, in advance
        of the
        proposed date of issu-ance. The Application and Agreement for Letter of Credit
        shall specify (i) the proposed date of issuance (which shall be a Business
        Day
        under the laws of the Commonwealth of Kentucky), (ii) the face amount of
        the
        Letter of Credit, (iii) the expiration date of the Letter of Credit, (iv)
        the
        name and address of the beneficiary of the Letter of Credit, and (v) a summary
        of the purpose and contemplated terms of the Letter of Credit. Prior to the
        date
        of is-suance of any Letter of Credit, the Borrower shall specify a precise
        description of the documents and the proposed text of any certificate to
        be
        presented by the beneficiary under such Letter of Credit which, if presented
        by
        the beneficiary prior to the expiration date of the Letter of Credit, would
        require the Agent Bank to make payment under the Letter of Credit; provided
        that the
        Agent Bank, in its sole rea-sonable judgment, may require changes in any
        such
        documents and certificates; provided
        further
        that no
        Letter of Credit shall require payment against a conforming draft to be made
        thereunder on the same Business Day (under the laws of the Common-wealth
        of
        Kentucky) that such draft is presented if such presenta-tion is made after
        12:00
        noon (Louisville, Kentucky time) on such Business Day. In determining whether
        to
        pay under any Letter of Credit, the Agent Bank shall be responsible only
        to
        deter-mine that the documents and certificates required to be delivered under
        that Letter of Credit have been delivered and that they comply on their face
        with the requirements of that Letter of Credit; provided,
        further,
        nothing
        contained in this Section 2.7B shall be deemed to prejudice the right of
        the
        Borrower to recover from the Agent Bank in respect of any amounts paid by
        the
        Agent Bank under any Letter of Credit in the event that it is determined
        by a
        court of competent jurisdiction that the payment with respect to such Letter
        of
        Credit by the Agent Bank con-stituted gross negligence or willful misconduct
        on
        the part of the Agent Bank.

    

    

    C.     Delivery
      of Copies of Letters of Credit and Letter of Credit Amendments.
      The
      Agent Bank shall, promptly after the issuance of each Letter of Credit, or
      any
      amendment or cancellation thereto, furnish to the Banks a copy of such Letter
      of
      Credit or of such amendment or cancellation, as the case may be, together with,
      in the case of the issuance of any Letter of Credit, the amount of its risk
      participation therein, which shall be such Bank's Revolv-ing Credit Facility
      Pro
      Rata Share of the stated amount of such Letter of Credit.

    

    D.     Payment
      of Amounts Drawn Under Letters of Credit.
      In the
      event of any drawing under any Letter of Credit by the beneficiary thereof,
      the
      Agent Bank shall promptly notify the Borrower and the Banks of such drawing,
      and
      the Borrower shall reimburse the Agent Bank on the date on which such drawing
      is
      honored in an amount in same day funds equal to the amount of such drawing.
      The
      Borrower shall have the right to obtain a Re-volving Credit Loan (subject to
      the
      limitations set forth in Sec-tion 2.lA hereof and in the absence of any Event
      of
      Default hereunder) in an amount sufficient to repay in full any such drawing
      honored by the Agent Bank under a Letter of Credit.

    

    E.     Payment
      by Banks with Respect to Letters of Credit.
      In the
      event that the Borrower shall fail to reimburse the Agent Bank as provided
      in
      Section 2.7D hereof in an amount equal to the amount of any drawing honored
      by
      the Agent Bank under a Letter of Credit issued by the Agent Bank, the Agent
      Bank
      shall promptly notify each of the other Banks of the 

     

     

    
      
        
        

      

      
        -41-

        
          

        

      

      unreimbursed
        amount of such drawing and of each Bank's participation therein, which
        participation shall be equal to such Bank's Revolving Credit Facility Pro
        Rata
        Share of the unreimbursed amount of such drawing. Each Bank shall make available
        to the Agent Bank an amount equal to its participation in same day funds,
        at the
        offices of the Agent Bank located at 416 West Jefferson Street, Louisville,
        Kentucky not later than 1:00 P.M. (Louisville, Kentucky time) on the Business
        Day (under the laws of Commonwealth of Kentucky) after the date notified
        by the
        Agent Bank, and each such amount so made available by each Bank will be deemed
        a
        Revolving Credit Loan made by such Bank to the Borrower under this Loan
        Agreement as of the date such amount is so made available to the Agent Bank.
        In
        the event that any Bank fails to make available to the Agent Bank the amount
        of
        such Bank's participation in such Letter of Credit as provided in this Section
        2.7E, the Agent Bank shall be entitled to recover such amount on demand from
        such Bank together with interest at the customary rate set by the Agent Bank
        for
        the correction of errors among banks for three (3) Business Days and thereafter
        at the Federal Funds Effective Rate. Nothing in this Section 2.7 shall be
        deemed
        to prejudice the right of any Bank to recover from the Agent Bank any amounts
        made available by such Bank to the Agent Bank pursuant to this Section 2.7E
        in
        the event that it is determined by a court of competent jurisdiction that
        the
        payment made by the Agent Bank with respect to a Letter of Credit in respect
        of
        which reimbursement was made by such Bank constituted gross negligence or
        willful misconduct on the part of the Agent Bank. The Agent Bank shall
        distribute to each other Bank, to the extent that it has paid all amounts
        payable by it under this Section 2.7E with respect to any Letter of Credit
        issued by the Agent Bank, such Bank's Revolving Credit Facility Pro Rata
        Share
        of all payments received by the Agent Bank from the Borrower in reimbursement
        of
        drawings honored by the Agent Bank under such Letter of Credit, as the case
        may
        be, when such payments are received. Notwithstanding anything to the contrary
        herein, each Bank shall have a direct right to reimbursement of such amounts
        from the Borrower, subject to the procedures for reimbursing such Bank set
        forth
        in this Section 2.7.

    

    

    F.     Compensation.
      The
      Borrower agrees to pay, without duplication, the following amounts to the Agent
      Bank with respect to each such Letter of Credit issued by the Agent Bank for
      the
      account of the Borrower:

    

    (i) with
      respect to each Letter of Credit, a letter of credit fee (the "Letter of Credit
      Fee") payable to the Agent Bank for the account of the Banks (and to be shared
      by the Banks pro rata in accordance with their respective Revolving Credit
      Facility Pro Rata Shares) equal to the Applicable Letter of Credit Percentage
      multiplied by the maximum amount available from time to time to be drawn under
      such Letter of Credit; provided
      that,
      on each
      Date of Determination, commencing with the first Date of Determination to occur
      after the Closing Date, the applicable Letter of Credit Percentage in effect
      for
      the Pricing Period commencing on such Date of Determination and continuing
      for
      the term of the Pricing Period that begins on such Date of Determination shall
      be the Applicable Letter of Credit Percentage corresponding to the Pricing
      Level
      in effect for such Pricing Period, as follows:

     

     

    
      
        
        

      

      
        -42-

        
          

        

      

      
        
        

      

    

    
 

    
      
        	
                 

                Pricing
                  Level               
                       

              	
                Adjusted
                  Funded Debt
                  

                to
                  EBITDA

              	
                Applicable
                  Letter of 

                Credit
                  Percentage

              
	
                 

                Pricing
                  Level
                  I             
                     

                 

              	
                 

                >
                  0.00, but <
                  1.00

                 

              	
                 

                1.25%

                 

              
	
                 

                Pricing
                  Level
                  II            
                     

                 

              	
                 

                >
                  1.00, but <
                  1.50

                 

              	
                 

                1.50

                 

              
	
                 

                Pricing
                  Level
                  III           
                     

                 

              	
                 

                >
                  1.50, but <
                  2.00

                 

              	
                 

                1.75

                 

              
	
                 

                Pricing
                  Level IV          
                      

                 

              	
                 

                >
                  2.00, but <
                  2.50

                 

              	
                 

                2.00

                 

              
	
                 

                Pricing
                  Level
                  V              
                  

                 

              	
                 

                >
                  2.50, but <
                  3.00

                 

              	
                 

                2.50

                 

              
	
                 

                Pricing
                  Level VI           
                     

                 

              	
                 

                >
                  3.00, but <
                  3.50

                 

              	
                 

                3.00

                 

              
	
                 

                Pricing
                  Level VII     

                 

              	
                 

                >
                  3.50

                 

              	
                 

                3.50

                 

              

      

    

     

    

    

    The
      Letter of Credit Fee, as based on the Applicable Letter of Credit Percentage,
      shall be payable quarterly in advance beginning on the date of issuance of
      such
      Letter of Credit and quarterly in advance beginning on the date, if such should
      occur, of each renewal or extension of such Letter of Credit;

    

    (ii)     with
      respect to drawings made under any Letter of Credit, interest, payable in
      immediately available funds to the Agent Bank on demand, on the amount paid
      by
      the Agent Bank in respect of each such drawing from the date of the drawing
      through the date such amount is reimbursed by the Borrower at a variable rate
      equal to the Base Rate plus the Applicable Base Rate Margin;

    

    (iii)      with
      respect
      to the issuance, amendment or transfer of each Letter of Credit and each drawing
      made thereunder, documentary and processing charges payable to the Agent Bank
      in
      accordance with the Agent Bank's standard schedule for such charges in effect
      at
      the time of such issuance, amendment, transfer or drawing, as the case may
      be;

    

    (iv)     promptly
      upon receipt by the Agent Bank of the amount described in subdivisions (ii)
      and
      (iii) of this Section 2.7F, the Agent Bank shall distribute to each Bank its
      Revolving Credit Facility Pro Rata Share of such amount; and

    

    (v)     with
      respect to each Letter of Credit, a letter of credit fronting fee (the "Letter
      of Credit Fronting Fee") payable to the Agent Bank for its own account, in
      the
      amount of one eighth of one percent (0.125%) per annum multiplied by the
      aggregate face amount of Letters of Credit outstanding during a Fiscal Quarter,
      plus other customary charges, if any, payable quarterly in advance.

    

    G.     Obligations
      Absolute; Indemnification, Nature of the Agent Bank's Duties.
      Subject
      to the right of the Borrower and the Banks to seek damages in the event that
      a
      court of competent jurisdiction determines that the Agent Bank acted in bad
      faith and/or committed gross negligence or willful misconduct in honoring any
      draft presented under any Letter of Credit issued by the Agent Bank, the
      obligation of the Borrower to reimburse the Agent Bank for

     

     

    
      
        
        

      

      
        -43-

        
          

        

      

      
        
        
drawings
        made under such Letter of Credit and the obligation of the Banks under Section
        2.7E hereof to reimburse the Agent Bank in accordance with their Revolving
        Credit Facility Pro Rata Shares for drawings made under such Letter of Credit
        shall be unconditional and irrevocable and shall be paid strictly in accordance
        with the terms of this Loan Agreement under all circumstances including,
        without
        limitation, the following circumstances:

    

    

    (i)     any
      lack
      of validity or enforceability of such Letter of Credit;

    

    (ii)     the
      existence of any claim, set-off, defense or other right which the Borrower
      may
      have at any time against a bene-ficiary or any transferee of such Letter of
      Credit (or any Persons for whom any such transferee may be acting), the Agent
      Bank, any Bank or any other Person, whether in con-nection with this Loan
      Agreement, the transactions contemplated herein or any unrelated transaction
      (including any underlying transaction between the Borrower and the beneficiary
      for which such Letter of Credit was procured); or

    

    (iii)     any
      draft, demand, certificate or any other document presented under such Letter
      of
      Credit proving to be forged, fraudulent, invalid or insufficient in any respect
      or any statement therein being untrue or inaccurate in any respect;
      or

    

    (iv)     
      payment
      by the Agent Bank under such Letter of Credit against presentation of a demand,
      draft or cer-tificate or other document which does not comply with the terms
      of
      such Letter of Credit; or

    

    (v)     any
      other
      circumstance or happening whatsoever, which is similar to any of the foregoing;
      or

    

    (vi)     the
      fact
      that an Event of Default or a Poten-tial Event of Default under this Loan
      Agreement shall have occurred and be continuing.

    

    In
      addition to amounts payable as elsewhere provided in this Section 2, the
      Borrower hereby agrees to protect, indemnify, pay and save the Agent Bank
      harmless from and against any and all claims, demands, liabilities, damages,
      losses, costs, charges and expenses (including reasonable attorneys' fees),
      which the Agent Bank may incur or be subject to as a consequence, direct or
      indirect, of (i) the issuance of the Letters of Credit, other than as a result
      of bad faith, gross negligence or willful misconduct of the Agent Bank as
      determined by a court of competent jurisdiction, or (ii) the failure of the
      Agent Bank to honor a drawing under any Letter of Credit as a result of any
      act
      or omission, whether rightful or wrongful, of any present or future de jure
      or
      de facto government or governmental authority.

    

    As
      between the Borrower and the Agent Bank, the Borrower assumes all risks of
      the
      acts and omissions of, or misuse of the Letters of Credit issued by the Agent
      Bank for the account of the Borrower by, the respective beneficiaries of such
      Letters of Credit. In furtherance and not in limitation of the foregoing, the
      Agent Bank shall not be responsible: (i) for the form, validity, sufficiency,
      accuracy, genuineness or legal effect of any document submitted by any party
      in
      connection with the application for and issuance of the Letters of Credit,
      even
      if it should in fact

     

     

    
      
        
        

      

      
        -44-

        
          

        

      

      
        
        
prove
        to
        be in any or all respects invalid, insufficient, inaccurate, fraudulent or
        forged; (ii) for the validity or sufficiency of any instrument transferring
        or
        assigning or purporting to transfer or assign any Letter of Credit or the
        rights
        or benefits thereunder or proceeds thereof, in whole or in part, which may
        prove
        to be invalid or ineffective for any reason; (iii) for failure of the
        beneficiary of any such Letter of Credit to comply fully with conditions
        required in order to draw upon such Letter of Credit; (iv) for errors,
        omis-sions, interruptions or delays in transmission or delivery of any messages,
        by mail, cable, telegraph, telex or otherwise, whether or not they be in
        cipher;
        (v) for errors in interpretation of techni-cal terms; (vi) for any loss or
        delay
        in the transmission or other-wise of any document required in order to make
        a
        drawing under any such Letter of Credit or of the proceeds thereof; (vii)
        for
        the misapplication by the beneficiary of any such Letter of Credit of the
        proceeds of any drawing under such Letter of Credit; and (viii) for any
        consequences arising from causes beyond the control of the Agent Bank,
        including, without limitation, any act or omission, whether rightful or
        wrongful, of any present or future government agency or authority. None of
        the
        above shall affect, impair, or prevent the vesting of any of the Agent Bank's
        rights or powers hereunder; provided
        however,
        that
        the Agent Bank shall be responsible for any payment the Agent Bank makes
        under
        any Letter of Credit against presentation of a demand, draft or cer-tificate
        or
        other document which does not comply with the terms of such Letter of Credit
        in
        the event such payment constitutes bad faith, gross negligence or willful
        misconduct of the Agent Bank as determined by a court of competent
        jurisdiction.

    

    

    In
      furtherance and extension and not in limitation of the specific provisions
      hereinabove set forth, any action taken or omitted by the Agent Bank under
      or in
      connection with the Letters of Credit issued by it or the related certificates,
      if taken or omitted in good faith and without bad faith, gross negligence or
      willful misconduct, shall not put the Agent Bank under any resulting liability
      to the Borrower or the Banks.

    

    Notwithstanding
      anything to the contrary contained in this Section 2.7, the Borrower shall
      have
      no obligation to indemnify the Agent Bank in respect of any liability incurred
      by the Agent Bank arising out of the bad faith, gross negligence or willful
      misconduct of the Agent Bank, as determined by a court of competent
      jurisdiction, or out of the wrongful dis-honor by the Agent Bank of proper
      demand for payment made under the Letters of Credit issued by it.

    

    H.     Computation
      of Interest.
      Interest payable pursuant to this Section 2.7 shall be computed on the basis
      of
      a 360-day year and the actual number of days elapsed in the period during which
      it accrues.

    

    I.     Amendments.
      The
      Borrower may request that the Agent Bank enter into one or more amendments
      of
      any Letter of Credit issued by the Agent Bank for the account of the Borrower
      by
      delivering to the Agent Bank an Application and Agreement For Letter of Credit
      specifying (i) the proposed date of the amendment, and (ii) the requested
      amendment. The Agent Bank shall be entitled to enter into amend-ments with
      respect to the Letters of Credit issued by it; provided
      however
      that any
      such amendment extending the expiry date, changing the Letter of Credit Fee,
      or
      increasing the stated amount of any Letter of Credit shall only be permitted
      if
      the Agent Bank would be permitted to issue a new Letter of Credit having such
      an
      expiry date,

     

     

    
      
        
        

      

      
        -45-

        
          

        

      

      
        
        
different
        Letter of Credit Fee, or stated amount under this Section 2.7 on the date
        of the
        amendment.

    

    

    J.     Additional
      Payments.
      If by
      reason of (i) any change in applicable law, regulation, rule, decree or
      regulatory requirement or any change in the interpretation or application by
      any
      judicial or regulatory authority of any law, regulation, rule, decree or
      regulatory requirement or (ii) compliance by the Agent Bank with any direction,
      request or requirement (whether or not having the force of law) of any
      governmental or monetary authority including, without limitation, Regulation
      D:

    

    (a)     any
      reserve, deposit or similar requirement is or shall be applicable, imposed
      or
      modified in respect of any Letter of Credit issued by the Agent Bank;
      or

    

    (b)     there
      shall be imposed on the Agent Bank any other condition regarding this Section
      2.7 or any Letter of Credit;

    

    and
      the
      result of the foregoing is to directly or indirectly increase the cost to the
      Agent Bank of issuing, making or maintaining any Letter of Credit, or to reduce
      the amount receivable in respect thereof by the Agent Bank (other than an
      increase in cost or reduction in amounts receivable as a consequence of any
      Tax,
      which shall be governed by the provisions of Section 3 hereof), then and in
      any
      such case the Agent Bank may, at any time within a reasonable period after
      the
      additional cost is incurred or the amount received is reduced, notify the
      Borrower, and the Borrower shall pay on demand such amounts as the Agent Bank
      may specify to be necessary to compensate the Agent Bank for such additional
      cost or reduced receipt, together with interest on such amount from ten (10)
      days after the date of such demand until payment in full thereof at a rate
      equal
      at all times to the Base Rate. The determination by the Agent Bank of any amount
      due pursuant to this Section 2.7J as set forth in a certificate setting forth
      the calculation thereof in reasonable detail, shall, in the absence of manifest
      or demonstrable error, be final and conclusive and binding on the
      Borrower.

    

    

    SECTION
      3

    SPECIAL
      PROVISIONS GOVERNING EURODOLLAR LOANS

    

    

    Notwith-standing
      any other provision of this Loan Agreement to the con-trary, the following
      provisions shall govern with respect to Eurodollar Loans as to the matters
      covered:

    

    3.1     Determination
      of the Adjusted LIBOR Rate plus the Applicable LIBOR Margin.
      As soon
      as practicable after 12:00 noon Louisville, Kentucky time on each Interest
      Rate
      Determination Date applicable to the particular Eurodollar Loan, the Agent
      Bank
      shall furnish to the Borrower a quote of the Adjusted LIBOR Rate plus the
      Applicable LIBOR Margin to apply to the particular Eurodollar Loan. The Agent
      Bank will in addition confirm to the Borrower in writing the actual Adjusted
      LIBOR Rate plus the Applicable LIBOR Margin prior to the funding of the
      particular Eurodollar Loan, and the determination of Adjusted LIBOR Rate plus
      the

     

     

    
      
        
        

      

      
        -46-

        
          

        

      

      
        
        
Applicable
        LIBOR Margin by the Agent Bank (provided that the Agent Bank shall have
        determined the LIBOR in good faith) shall be final, conclusive and binding
        upon
        both the Borrower and the Banks in the absence of manifest or demonstrable
        error
        and shall apply to the particular Eurodollar Loan for the applicable Interest
        Period.

    

    

    3.2     Inability
      to Determine Adjusted LIBOR Rate.
      In the
      event that the Agent Bank shall have determined in good faith (which
      determination shall be final and conclusive and binding upon the Borrower),
      on
      any Interest Rate Determination Date or Funding Date with respect to any
      Eurodollar Loans, that by reason of circum-stances occurring after the date
      of
      this Loan Agreement affecting the London interbank market, adequate and fair
      means do not exist for ascertaining the interest rate applicable to such
      Eurodollar Loans on the basis provided for in the definition of the Adjusted
      LIBOR Rate, the Agent Bank shall on such date give notice (by telecopy or by
      telephone confirmed in writing) to the Borrower and the Banks of such
      determination, whereupon (i) no Revolving Credit Loans may be made as, or
      converted to, Eurodollar Loans until such time as the Agent Bank notifies the
      Borrower and the Banks that the circumstances giving rise to such notice no
      longer exist; and (ii) any Request for Revolving Credit Loan or Notice of
      Conversion/Continuation given by the Borrower with respect to the Revolving
      Credit Loans in respect of which such determination was made shall be deemed
      to
      be rescinded by the Borrower, and any Request for Revolving Credit Loan or
      Notice of Conversion/Continuation given by the Borrower with respect to the
      Revolving Credit Loans in respect of which such determination was made shall
      be
      deemed to be a request to make Base Rate Loans.

    

    3.3     Illegality
      or Impracticability of Eurodollar Loans.
      -In the
      event that on any date any Bank shall have determined in good faith (which
      determination shall be final and conclusive and binding upon the parties hereto
      but shall be made only after con-sultation with the Borrower) that the making,
      maintaining or con-tinuation of its Eurodollar Loans (i) has become unlawful
      as
      a result of compliance by such Bank in good faith with any law, treaty,
      governmental rule, regulation, guideline or order (or would conflict with any
      such treaty, governmental rule, regulation, guideline or order not having the
      force of law even though the failure to comply therewith would not be unlawful)
      or (ii) has become im-practicable, or would cause such Bank material hardship,
      as a re-sult of contingencies occurring after the date of this Loan Agree-ment
      which materially and adversely affect the London interbank market or the
      position of such Bank in that market, then such Bank shall on that day give
      notice (by telecopy or by telephone con-firmed in writing) to the Borrower
      and
      the other Banks of such determination. Thereafter, (a) the obligation of the
      Banks to make Revolving Credit Loans as, or to convert Revolving Credit Loans
      to, Eurodollar Loans shall be suspended until such notice shall be with-drawn
      by
      the particular Bank, (b) to the extent such determination by the particular
      Bank
      relates to a Eurodollar Loan then being requested by the Borrower pursuant
      to a
      Request for Revolving Credit Loan or Notice of Conversion/Continuation, the
      Banks shall make such Eurodollar Loan as (or convert such Eurodollar Loan to,
      as
      the case may be) a Base Rate Loan, and (c) the Banks' obligation to maintain
      their outstanding Eurodollar Loans, as the case may be (the "Affected Loans"),
      shall be terminated at the earlier to occur of the expi-ration of the Interest
      Periods then in effect with respect to the Affected Loans or when required
      by
      law, and the Affected Loans shall automatically convert into Base Rate Loans
      on
      the date of such termination.

     

     

    
 

    
      
        
        

      

      
        -47-

        
          

        

      

      
        
        

      

    

    3.4     Compensation
      For Breakage or Non-Commencement of Interest Periods.
      The
      Borrower shall compensate the Banks, upon written request by the Banks (which
      request shall set forth the basis for requesting such amounts), for all
      reasonable losses, ex-penses and liabilities (including, without limitation,
      any
      interest paid by the Banks to lenders of funds borrowed by them to make or
      carry
      the Eurodollar Loans and any reasonable loss, expense or lia-bility sustained
      by
      the Banks in connection with the liquidation or re-employment of such funds)
      which the Banks may sustain: (i) if for any reason (other than a default by
      the
      Banks or the conversion of the Borrower's Request for Revolving Credit Loan
      or
      Notice of Conversion/Continuation with respect to Revolving Credit Loans from
      a
      request to make Eurodollar Loans into a request to make Base Rate Loans pursuant
      to Sections 3.2 and 3.3 hereof) a borrowing of any Eurodollar Loan does not
      occur on a date specified therefor in a Request for Re-volving Credit Loan
      or
      Notice of Conversion/Continuation with respect to Revolving Credit Loans, or
      a
      conversion to or continuation of any Eurodollar Loan does not occur on a date
      specified therefor in a Request for Revolving Credit Loan or Notice of
      Conversion/Con-tinuation, (ii) if any prepayment or conversion of any of the
      Eurodollar Loans occurs on a date that is not the last day of the Interest
      Period applicable to that Eurodollar Loan, (iii) if any prepayment of any of
      the
      Eurodollar Loans is not made on any date specified in a notice of prepayment
      given by the Borrower, or (iv) as a conse-quence of any other default by the
      Borrower to repay the Eurodollar Loans when required by the terms of this Loan
      Agreement. The Banks shall deliver to the Borrower a certificate setting forth
      the calculation of the compensation claimed to be due to the Banks within thirty
      (30) days after the occurrence of the event giving rise to such claim for
      compensation, which calculations shall be binding upon the Borrower in the
      absence of manifest or demonstrable error.

    

    3.5     Booking
      of Eurodollar Loans.
      Each
      Bank may make, carry or transfer its Revolving Credit Facility Pro Rata Share
      of
      Eurodollar Loans at, to, or for the account of any of its branch offices or
      the
      office of an Affiliate of such Bank; provided however that if any transfer
      of a
      Bank's Revolving Credit Pro Rata Share of Eurodollar Loans from the office
      where
      such Bank's Revolving Credit Facility Pro Rata Share of Eurodollar Loans
      originated shall increase the cost to the Borrower of such Eurodollar Loans,
      such transfer may occur only if required (i) by the intro-duction of or any
      change (including, without limitation, any change by way of imposition or
      increase of reserve requirements) in or in the interpretation of any law or
      regulation, or (ii) to comply with any guideline or request from any central
      bank or other governmen-tal authority or quasi-governmental authority exercising
      control over banks or financial institutions generally (whether or not such
      guideline or request shall have the force of law).

    

    3.6     Assumptions
      Concerning Funding of Eurodollar Loans.
      The
      calculation of all amounts payable to the Banks under this Section 3 and under
      Section 13.1 hereof shall be made as though each Bank had actually funded each
      Eurodollar Loan through the purchase of a deposit bearing interest at the rate
      obtained pursuant to the definition of the Adjusted LIBOR Rate plus the
      Applicable LIBOR Margin in an amount equal to such Bank's Revolving Credit
      Facility Pro Rata Share of the amount of such Eurodollar Loan and having a
      maturity comparable to the relevant Interest Period and through the transfer
      of
      such deposit from an offshore office of such

     

     

    
      
        
        

      

      
        -48-

        
          

        

      

      
        
        
Bank
        to a
        domestic office of such Bank in the United States of America; provided however
        that each Bank may fund its Revolving Credit Facility Pro Rata Share of the
        Eurodollar Loans in any manner it sees fit and the foregoing assump-tions
        shall
        be utilized only for the purposes of calculating amounts payable under this
        Section 3 and under Section 13.1 hereof.

    

    

    3.7     Eurodollar
      Loans After Event of Default.
      After
      the occurrence and during the continuation of an Event of Default, (i) the
      Borrower may not elect to have Revolving Credit Loans made or maintained as,
      or
      converted to, Eurodollar Loans after the expira-tion of any Interest Period
      then
      in effect for such Loans, (ii) any Request for Revolving Credit Loan or Notice
      of Conversion/Con-tinuation given by the Borrower with respect to a requested
      borrow-ing or conversion/continuation, as applicable, that has not yet occurred
      shall be deemed to be rescinded by the Borrower, and (iii) all Eurodollar Loans
      shall thereupon bear interest at the Default Rate until the Event of Default
      is
      cured or the Revolving Credit Loans are paid in full to the Banks and the
      Revolving Loan Commitments have expired or have been terminated by the Borrower
      or the Banks.

    

    

    SECTION
      4

    CLOSING
      CONDITIONS

    

    The
      establishment of the Revolving Credit Facility by the Banks in favor of the
      Borrower, the obtaining of Revolving Credit Loans, Swing Line Loans and/or
      Letters of Credit by the Borrower thereunder are subject to the satisfaction
      of
      all of the following conditions:

    

    4.1     Initial
      Closing Conditions.
      The
      obligation of the Banks to make the initial Revolving Credit Loans and the
      Swing
      Line Loans to the Borrower on and after the Closing Date is subject to the
      condition that, in addition to the satisfaction of the conditions precedent
      specified in Section 4.2 hereof and, with respect to the Swing Line Loans,
      the
      conditions precedent specified in Section 2.6A(iii) hereof, as of the Closing
      Date, the Banks shall have received the following from the Borrower, dated
      the
      Closing Date or such other date as shall be acceptable to the
      Banks:

    

    A.     Loan
      Agreement.
      This
      Loan Agreement, duly executed and delivered by the Borrower and the
      Guarantors.

    

    B.     Revolving
      Credit Notes.
      The
      Revolving Credit Notes, duly executed and delivered by the
      Borrower.

    

    C.     Guaranty
      Agreement.
      The
      Guaranty Agreement, duly executed and delivered by each of the Guarantors,
      guarantying the Borrower's payment of the Loans.

    

    D.     Security
      Agreement.
      The
      Security Agreement dated as of April 6, 2007, duly executed by the Borrower
      and
      the Guarantors and delivered to the Agent Bank, granting to the Agent Bank,
      as
      Collateral Agent, for the benefit of all of the Banks and the holders of the
      $55,000,000 Senior Notes a lien on all of the Collateral described therein.
      

     

     

    
      
        
        

      

      
        -49-

        
          

        

      

      
        
        

      

    

     

     

    E.     Opinion
      of Counsel.
      A
      written opinion of counsel on behalf of the Borrower and the Guarantors, in
      form
      and substance satisfactory to the Banks.

    

    F.     Certificate
      of Secretary of the Borrower.
      A
      Certificate of the Secretary or Assistant Secretary of the Borrower (i)
      certi-fying as to the authenticity, completeness and accuracy of, and attaching
      copies of, (a) the Certificate of Incorporation and By-Laws of the Borrower,
      and
      (b) Resolutions of the Board of Directors of the Borrower authorizing the
      Borrower's execution, delivery and performance of the Loan Documents to which
      the Borrower is a party, and (ii) certifying the names and true signatures
      of
      the officers of the Borrower authorized to execute and deliver the Loan
      Documents to which the Borrower is party, on behalf of the
      Borrower.

    

    G.     Certificate
      of Secretary of Each Guarantor.
      A
      Certificate of the Secretary or Assistant Secretary of each Guarantor (i)
      certifying as to the authenticity, completeness and accuracy of, and attaching
      copies of, (a) the Certificate or Articles of Incorporation and By-Laws of
      the
      Guarantor, and (b) Resolutions of the Board of Directors of the Guarantor
      authorizing the execution, delivery and per-formance of the Loan Documents
      to
      which the Guarantor is a party by the Guarantor, and (ii) cer-tifying the names
      and true signatures of the officers of the Guarantor authorized to execute
      and
      deliver the Loan Documents to which the Guarantor is a party on behalf of such
      Guarantor.

    

    H.     Compliance
      Certificate.
      A
      Compliance Certificate in the form of Exhibit
      G
      hereto,
      completed by the Borrower, and executed by an Authorized Officer of the
      Borrower, certifying as to the accuracy of the representations and warranties
      of
      the Borrower and the Guarantors set forth in this Loan Agreement as of the
      Closing Date.

    

    1.     Amended
      and Restated Collateral Sharing Agreement.
      An
      amended and restated Collateral Sharing Agreement, in form and substance
      satisfactory to the Banks.

    

    J.     Evidence
      of Reduction of Principal Amount of $55,000,000 Senior Notes.
      Evidence in form and substance satisfactory to the Banks that the principal
      amount of the $55,000,000 Senior Notes has been reduced to
      $30,000,000.

    

    K.     Third
      Amendment to Note Purchase Agreement.
      The
      Third Amendment to Note Purchase Agreement, as amended, shall be in form and
      substance satisfactory to the Banks.

    

    L..     Evidence
      of Payment of Revolving Credit Notes of Bank of America, SunTrust Bank and
      U.S.
      Bank.
      Evidence in form and substance satisfactory to the Banks that the Borrower
      has
      paid all amounts owed to Bank of America, SunTrust Bank and U.S.
      Bank.

    

    M.     UCC-1
      Financing Statements.
      UCC-1
      financing statements identifying each of the Borrower and the Guarantors as
      a
      debtor, in form and substance satisfactory to the Banks, shall have been filed
      with the Delaware Secretary of State.

     

     

    
      
        
        

      

      
        -50-

        
          

        

      

      
        
        

      

    

    
 

    N.     Deposit
      Account Control Agreements.
      Deposit
      account control agreements with financial institutions, to the extent a deposit
      account control agreement is required to be maintained with such financial
      institutions pursuant to Section 6.13 hereof.

    

    O.      Landlord
      Lien Waivers.
      The
      Obligors shall use best efforts to cause all lessors of the below identified
      real property to execute landlord lien waivers in favor of the Collateral Agent,
      such landlord lien waivers to be in form and substance satisfactory to in favor
      of the Collateral Agent:

    

    
      	 	
              (i)

            	
              Sypris
                Electronics, LLC - Tampa, Florida
                facility.

            

    

    

    P.     Other
      Documents.
      Such
      other documents as the Banks may reasonably request.

    

    4.2     Conditions
      to All Revolving Credit Loans, Letters of Credit and Swing Line
      Loans.
      The
      obligation of the Banks to make each Revolving Credit Loan on each Funding
      Date
      and to issue, through the Agent Bank, each Letter of Credit, and the obligation
      of the Agent Bank to make each Swing Line Loan pursuant to the Swing Line Credit
      Subfacility, is in each case subject to the following additional conditions
      precedent:

    

    A.     Request
      for Revolving Credit Loan.
      The
      Agent Bank shall have received with respect to each Revolving Credit Loan,
      in
      accordance with the provisions of Section 2.lC of this Loan Agreement, an
      originally executed Request For Revolving Credit Loan, in the form of
Exhibit
      E
      hereto,
      in each case signed by an Authorized Officer of the Borrower, as agent for
      the
      Borrower.

    

    B.     Letters
      of Credit.
      The
      Agent Bank shall have received with respect to each Letter of Credit, in
      accordance with the provisions of Section 2.7B of this Loan Agreement, an
      originally executed Application and Agreement For Letter of Credit relating
      to
      such Letter of Credit, in each case signed by an Authorized Officer of the
      Borrower, as agent for the Borrower.

    

    C.   Request
      for Swing Line Loan.
      The
      Agent Bank shall have received with respect to each Swing Line Loan, in
      accordance with the provisions of Section 2.6A(iii) of this Loan Agreement,
      an
      originally executed Request For Swing Line Loan, in each case signed by an
      Authorized Officer of the Borrower, as agent for the Borrower.

    

    D.     General
      Conditions.
      As of
      the Funding Date of any Revolving Credit Loan, the date of issuance or extension
      of the stated expiration date of any Letter of Credit, or the date of any Swing
      Line Loan:

    

    (i)     The
      representations and warranties contained herein shall be true and correct in
      all
      material respects on and as of that date to the same extent as though made
      on
      and as of that date;

     

     

    
      
        
        

      

      
        -51-

        
          

        

      

      
        
        

      

    

     

     

    (ii)     No
      event
      shall have occurred and be continuing or would result from the funding of the
      Revolving Credit Loan con-templated by such Request For Revolving Credit Loan,
      the issuance or extension of the stated expiration date of such Letter of Credit
      contemplated by such Application and Agreement For Letter of Credit, or the
      funding of the Swing Line Loan contem-plated by such Request for Swing Line
      Loan
      which would constitute an Event of Default;

    

    (iii)     The
      Borrower and Guarantors shall have performed in all mate-rial respects all
      agreements and satisfied all conditions which this Loan Agreement and the other
      Loan Documents provide shall be performed by them on or before such
      date;

    

    (iv)     No
      order,
      judgment or decree of any court, arbitrator or governmental authority shall
      purport to enjoin or restrain the Banks from making that Revolving Credit Loan
      or issu-ing, through the Agent Bank, that Letter of Credit or the Agent Bank
      from making such Swing Line Loan; 

    

    (v)     There
      shall
      not be pending or, to the knowledge of the Borrower threatened, any action,
      suit, proceeding or arbi-tration or, to the knowledge of the Borrower, any
      governmental in-vestigation pending or threatened, against or affecting the
      Borrower or any Guarantors or any property of the Borrower or any Guarantors
      seeking damages in excess of $5,000,000, which is not fully covered by insurance
      other than any applicable deductible and which has not been disclosed by the
      Borrower pursuant to Section 5.9 hereof or which prior to (a) the making of
      the
      last preceding Revolving Credit Loan (or, in the case of the initial Revolving
      Credit Loan made hereunder, prior to the execution of this Loan Agreement),
      (b)
      the issuing of the most recent Letter of Credit (or in the case of the initial
      Letter of Credit issued hereunder, prior to the execution of this Loan
      Agreement) or the most recent extension of the stated maturity date of any
      Letter of Credit, or (c) the making of the last Swing Line Loan (or in the
      case
      of the initial Swing Line Loan hereunder, prior to the execution of this Loan
      Agreement) if determined adversely, would have a material adverse effect.
      Further, there shall have occurred no development not so disclosed in any such
      action, suit, proceeding, governmental in-vestigation or arbitration so
      disclosed, which, in either event, in the opinion of the Banks, could reasonably
      be expected to have a material adverse effect on the financial condition of
      the
      Borrower and the Guarantors taken as a whole. No injunction or other restraining
      order shall have been issued and no hearing to cause an injunction or other
      restraining order to be issued shall be pending or noticed with respect to
      any
      action, suit or proceeding seeking to enjoin or otherwise prevent the
      consumma-tion of this Loan Agreement or the making of the Revolving Credit
      Loans, the issuing or extension of the respective stated expiration dates of
      the
      Letters of Credit, and/or the making of the Swing Line Loans hereunder; and
      

    

    (vi)     As
      of the
      Funding Date of any Revolving Credit Loan, the date of issuance or extension
      of
      the stated expiration date of any Letter of Credit, or the date of any Swing
      Line Loan, the Agent Bank shall have received such other documentation as it
      may
      reasonably request.

    

    4.3     Conditions
      Subsequent.

     

     

    
      
        
        

      

      
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    A.     USPTO
      Filings.
      The
      Obligor's patents and trademarks are identified in Part A of Exhibit "B" to
      the
      Security Agreement. The Obligors shall cause filing statements to be filed
      with
      the US Patent and Trademark Office within sixty (60) days after the date hereof,
      perfecting the Collateral Agent’s security interest in the Obligor's patents and
      trademarks. Failure to do shall be an Event of Default hereunder.

    

    B.      Landlord
      Lien Waivers.
      The
      Obligors shall use best efforts to cause all lessors of real property (i) listed
      below and (ii) at any other location where the Obligors maintain assets with
      a
      net book value of $1,000,000 or more to execute landlord lien waivers in favor
      of the Collateral Agent within sixty (60) days after the date hereof, such
      landlord lien waivers to be in form and substance satisfactory to in favor
      of
      the Collateral Agent:

    

    
      	 	
              (a)

            	
              Sypris
                Data Systems, Inc. - Centennial, Colorado
                facility;

            

    

    
      	 	
              (b)

            	
              Sypris
                Data Systems, Inc. - San Dimas, California facility;
                

            

    

    
      	 	
              (c)

            	
              Sypris
                Test & Measurement, Inc. - Phoenix, Arizona facility;
                and

            

    

    
      	 	
              (d)

            	
              Sypris
                Test & Measurement, Inc. - Burlington, Massachusetts
                facility.

            

    

     

    C.      Fixture
      Financing Statements.
      The
      Obligors shall cause UCC-1 fixture financing statements to filed in the real
      estate records of each county with respect to (i) all facilities identified
      below and (ii) at any other location where the Obligors maintain assets with
      a
      net book value of $1,000,000 within ten (10) days after Closing :

    

    Leased
      facilities:

    

    (a)     Sypris
      Electronics, LLC - Tampa, Florida facility;

    (b)     Sypris
      Data Systems, Inc. - Centennial, Colorado facility;

    (c)     Sypris
      Data Systems, Inc. - San Dimas, California facility; 

    (d)     Sypris
      Test & Measurement, Inc. - Phoenix, Arizona facility; and

    (e)    Sypris
      Test & Measurement, Inc. - Burlington, Massachusetts facility.

    

    Owned
      facilities:

    

    (f)    Sypris
      Electronics, LLC - 6120 Hanging Moss Road, Orlando, Florida
      facility;

    (g)    Sypris
      Test & Measurement, Inc. - 6120 Hanging Moss Road, Orlando, Florida
      facility;

    (h)   Sypris
      Technologies, Inc. - 2612 Howard Street, Louisville, Kentucky
      facility;

    (i)    Sypris
      Technologies, Inc. - 2820 Broadway, Louisville, Kentucky facility;

    (j)     Sypris
      Technologies, Inc. - 105 Wamsutta Mill Road, Morganton, North Carolina
      facility;

     

    
      
        
        

      

      
        -53-

        
          

        

      

      
        
        

      

    

    
      (k)     Sypris
        Technologies Kenton, Inc. - 13267 State Road 68, Kenton, Ohio facility;
        and

      (l)     Sypris
        Technologies Marion, LLC - 1550 Marion Agosta Road, Marion,. Ohio
        facility.

       

       

    

    SECTION
      5

    REPRESENTATIONS
      AND WARRANTIES

    

    The
      Borrower and the Guarantors represent and warrant to the Banks as follows,
      which
      representations and warranties shall be deemed to be contin-uing representations
      and warranties until the Revolving Credit Notes and the other Obligations have
      been respec-tively paid in full to the Banks, and which representations and
      warranties shall survive the execution and delivery of this Loan
      Agreement:

    

    5.1     Organization,
      Standing, etc. of the Borrower and the Guarantors.
      The
      Borrower is a corporation duly organized and validly existing under the laws
      of
      the State of Delaware. Sypris Test & Measurement, Inc. is a corporation duly
      organized and validly existing under the laws of the State of Delaware. Sypris
      Technologies, Inc. is a corporation duly organized and validly existing under
      the laws of the State of Delaware. Sypris Electronics, LLC is a limited
      liability company duly organized and validly existing under the laws of the
      State of Delaware. Sypris Data Systems, Inc. is a corporation duly organized
      and
      validly existing under the laws of the State of Delaware. Sypris Technologies
      Marion, LLC is a limited liability company duly organized and validly existing
      under the laws of Delaware. Sypris Technologies Kenton, Inc. is a corporation
      duly organized and validly existing under the laws of Delaware. Sypris
      Technologies Mexican Holdings, LLC is a limited liability company duly organized
      and validly existing under the laws of Delaware. Sypris Technologies Mexico,
      S.
      de R.L. de C.V. is a limited liability company duly organized and validly
      existing under the laws of Mexico. Sypris Technologies Toluca, S.A. de C.V.
      is a
      corporation duly organized and validly existing under the laws of Mexico. The
      Borrower and each of the Guarantors has all requisite power and authority to
      own
      and operate its properties, to carry on its businesses as now conducted and
      proposed to be conducted, and to execute and deliver this Loan Agreement and
      the
      other Loan Documents to which it is a party and to carry out the terms hereof
      and thereof. The Borrower has delivered to the Agent Bank a true and complete
      copy of its Certificate of Incorporation and Bylaws as in effect on the date
      hereof. 

    

    5.2     Qualification.
      Schedule
      5.2
      hereto
      sets forth a list of the Borrower and the Guarantors and the locations in which
      they are qualified to do business. Neither the Borrower nor any Guarantor is
      presently required to be qualified to transact business as a foreign corporation
      in any jurisdiction other than the states identified in Schedule
      5.2
      hereto,
      and except where failure to so qualify would not have a material adverse effect
      upon the business or operations of the Borrower or the Guarantors.

     

     

    
      
        
        

      

      
        -54-

        
          

        

      

      
        
        

      

    

    
 

    5.3     Use
      of
      Proceeds.
      The
      uses of the proceeds of the Revolving Credit Loans and the Swing Line Loans
      and
      the uses of the Letters of Credit by the Borrower and the Guarantors are and
      will continue to be legal and proper corporate uses duly authorized by the
      Board
      of Directors of each of the Borrower and the Guarantors, and such uses are
      consistent with all applicable laws and statutes as in effect as of the date
      hereof.

    

    5.4     Intellectual
      Property.
      To the
      best of the Borrower's knowledge, the Borrower and the Guarantors own or possess
      adequate assets, licenses, patents, patent applications, copyrights, trademarks,
      trademark applications, trade names, franchises, consents, authori-zations
      and
      service marks and rights with respect to the foregoing necessary for the conduct
      of their businesses as presently conducted and as proposed to be conducted,
      without any known conflict with the rights of others.

    

    5.5     Disclosure;
      Solvency.
      Neither
      this Loan Agreement nor any other document furnished to the Banks by or on
      behalf of the Borrower and the Guarantors in connection with the Revolving
      Credit Facility and/or the Swing Line Loans and/or the other Obligations taken
      as a whole contains any state-ment of any material fact which is untrue or
      omits
      to state a material fact necessary in order to make the statements contained
      herein or therein not misleading. There is no fact known to the Borrower and
      the
      Guarantors which materially adversely affects or in the future will (so far
      as
      the Borrower and the Guarantors can now foresee) materially adversely affect
      the
      business, operations, affairs or condition of the Borrower and the Guarantors
      or
      any of their properties which has not been set forth in this Loan Agreement
      or
      in the other documents furnished to the Banks by or on behalf of the Borrower
      and the Guarantors in connection with the Revolving Credit Facility, the Swing
      Line Loans and the other Obligations. The Borrower, on a consolidated basis
      in
      accordance with GAAP, is currently solvent; and neither the issuance and
      delivery of the Revolving Credit Notes and the Guaranty Agreements to the Banks,
      nor the obtaining of the Letters of Credit, nor the performance of the
      transactions contemplated hereunder or thereunder, will render the Borrower,
      on
      a consolidated basis in accordance with GAAP, insolvent, inadequately
      capitalized to under-take the transactions contemplated hereunder or to
      undertake the businesses in which they are presently engaged or about to engage
      or render the Borrower, on a consolidated basis, unable to pay its debts as
      they
      become due; neither the Borrower nor any Guarantor is contemplating either
      the
      filing of a petition by them or the commencement of a case by them under any
      state or federal bankruptcy or insolvency laws or the liquidation of all or
      a
      major portion of their property; and the Borrower has no knowledge of any Person
      contemplating the filing of any such petition or commence-ment of any such
      case
      against the Borrower or the Guarantors.

    

    5.6     Tax
      Returns and Payments.
      To the
      best of the Borrower's knowledge after due inquiry, the Borrower and the
      Guarantors have filed all tax returns required by law to be filed by them and
      have paid all taxes, assess-ments and other governmental charges levied upon
      their properties, assets, income and franchises, other than those not yet
      delinquent and those, not substantial in aggregate amount, being or about to
      be
      contested as provided in Section 5.6 hereof. The charges, accruals and reserves
      on the books of the Borrower, on a consolidated basis, in respect of its taxes
      are adequate in the opinion of the Borrower. The Borrower and the Guarantors
      know of no material unpaid assessment for additional taxes or of any basis
      therefor.

     

     

    
      
        
        

      

      
        -55-

        
          

        

      

      
        
        

      

    

    

    5.7     Funded
      Debt; Financial Information.
      As of
      the date of this Loan Agree-ment, and without regard to the transactions
      contemplated here-under, there is no outstanding Funded Debt of the Borrower
      and
      the Guarantors in respect of borrowed money, capital leases or the deferred
      purchase price of property, existing guaranties issued by the Borrower and
      the
      Guarantors, in each case in an amount in excess of $100,000, or existing liens
      and security interests encumbering the assets of the Borrower and the Guarantors
      other than as disclosed in the most recent annual and quarterly financial
      statements of the Borrower delivered to the Banks or on Schedule
      5.7
      attached
      hereto and made a part hereof. The financial information contained in such
      financial statements is true and complete in all material respects. There has
      been no material adverse change in the financial condition of the Borrower
      and
      the Guarantors since the date of such financial statements.

    

    5.8     Title
      to Properties; Liens; Leases.
      The
      Borrower and the Guarantor have good and marketable title to all of their owned
      properties and assets and none of such properties or assets is subject to any
      mortgage, pledge, or security interest, or any material lien, charge or
      encumbrance other than as described in Section 7.4 hereof and other than
      statutory landlord liens. The Borrower and the Guarantors enjoy quiet possession
      under all leases to which they are party as lessee, and all of such leases
      are
      to the best knowledge of the Borrower and the Guarantors, after due inquiry,
      validly existing and in full force and effect, and, to the best knowledge of
      the
      Borrower and the Guarantors, after due inquiry, neither the lessor nor the
      Borrower or the Guarantors as lessee is in default under any of such
      leases.

    

    5.9     Litigation,
      etc.
      Except
      as previously disclosed to the Agent Bank, there is no action, proceeding or
      investigation pending or, to the best knowledge of the Borrower and the
      Guarantors, threatened (or any basis therefor known to the Borrower and the
      Guarantors) (i) which questions the validity of this Loan Agreement, the
      Revolving Credit Notes, the Guaranty Agreements, the Negative Pledge Agreement
      or the other Loan Documents or any action taken or to be taken pursuant hereto
      or thereto, (ii) which is not fully covered by insurance other than any
      applicable deductible, or (iii) which might result, either in any case or in
      the
      aggregate, in any material adverse change in the businesses, operations, affairs
      or condition of the Borrower and the Guarantors or in any of their material
      properties or assets or in any material liability on the part of the Borrower
      and the Guarantors. The Borrower has provided the Agent Bank with a list of
      all
      pending actions, proceedings and investigations involving (y) claims against
      the
      Borrower and the Guarantors seeking damages in excess of $5,000,000 in any
      individual case or in excess of $25,000,000 in the aggregate which is not fully
      covered by insurance other than any applicable deductible, and (z) claims of
      the
      Borrower and the Guarantors for payment, reimbursement or under contracts in
      excess of $5,000,000 or in excess of $25,000,000 in the aggregate. 

    

    5.10     Authorization;
      Compliance With Other Instruments, etc.
      The
      execution, delivery and performance of this Loan Agreement, the Revolving Credit
      Notes, the Guaranty Agreements and the other Loan Documents to which the
      Borrower or the Guarantors are a party have been duly authorized by all
      necessary corporate action on the part of the Borrower and the Guarantors,
      will
      not result in any violation of or be in conflict with or constitute a default
      under any term of

     

     

    
      
        
        

      

      
        -56-

        
          

        

      

      
        
        
the
        Articles of Incorporation or Certificate of Incorporation, as applicable,
        or
        By-Laws of the Borrower and the Guarantors or of any agree-ment, instrument,
        judgment, decree, order, statute, rule or govern-mental regulation applicable
        to
        the Borrower and the Guarantors, or result in the creation of any mortgage,
        lien, charge or encumbrance upon any of the properties or assets of the Borrower
        and the Guarantors pursuant to any such term, except as provided in the Loan
        Documents. The Borrower and the Guarantors are not in violation of any term
        of
        their Articles of Incorporation or Certificate of Incorporation, as applicable,
        or By-Laws, or of any material term of any agreement or instrument to which
        they
        are party, or, to the Borrower's best knowledge, of any judgment, decree,
        order,
        statute, rule or govern-mental regulation applicable to the Borrower and
        the
        Guarantors. Without limiting the generality of the foregoing, to the best
        knowledge of the Borrower and the Guarantors, the Borrower and the Guarantors
        are in compliance in all material respects with all federal and state laws
        and
        all rules, regulations and administra-tive orders of all state and local
        commissions or authorities which are applicable to the Borrower and the
        Guarantors or to the operation of their businesses.

    

    

    5.11     Enforceability.
      This
      Loan Agreement, the Revolving Credit Notes, the Guaranty Agreements, and the
      other Loan Documents to which the Borrower and the Guarantors are party
      constitute legal, valid and binding obligations of the Borrower and the
      Guarantors, enforceable against the Borrower and the Guarantors in accordance
      with their respective terms, except to the extent the enforceability hereof
      and
      thereof may be limited by applicable laws affecting creditors, rights generally
      and by equitable principles.

    

    5.12     Governmental
      Consent.
      To the
      best knowledge of the Borrower and the Guarantors, the Borrower and the
      Guarantors are not required to obtain any order, consent, approval or
      authorization of, and are not required to make any declaration or filing with,
      any governmental authority in connec-tion with the execution and delivery of
      this Loan Agreement, the Revolving Credit Notes, the Guaranty Agreements, and
      the other Loan Documents to which the Borrower and the Guarantors are
      party.

    

    5.13     Environmental
      Matters.
      Except
      as disclosed in the Existing Studies (as defined in the 1997A Loan Agreement)
      delivered to the Agent Bank or in Schedule
      5.13:

    

    A.    Borrower
      and the Guarantors have duly complied in all material respects with, and their
      businesses, opera-tions, assets, equipment, leaseholds and facilities,
      includ-ing, without limitation, the Real Property, are in material compliance
      with, the provisions of all federal, state and local envi-ronmental, health
      and
      safety laws, codes and ordinances, and all rules and regulations promulgated
      thereunder, including, without limitation, all the Relevant Environmental Laws
      and all other laws and regulations with respect to reporting releases of
      Hazardous Materials and the registration and maintenance of underground storage
      tanks.

    

    B.     The
      Borrower and the Guarantors have been issued, and will maintain, all required
      federal, state and local permits, licenses, certificates and approvals relating
      to (i) air emissions; (ii) discharges to surface water or ground
      water; (iii) noise emissions; (iv) solid or liquid waste disposal;
      (v) the use, generation, storage, transpor-tation or disposal of Hazardous
      Materials; and (vi) other environ-mental, health or safety matters.

     

     

    
      
        
        

      

      
        -57-

        
          

        

      

      
        
        

      

    

    

    C.     The
      Borrower has not received notice of violations of any federal, state or local
      environmental, health or safety laws, codes or ordinances, or any rules or
      regulations promulgated thereunder, including, without limitation, any of the
      Relevant Environmental Laws, which relate to the use, ownership or occupancy
      of
      any of the Real Property and the Borrower and the Guarantors are not in
      violation in any material respect of any covenants, conditions, ease-ments,
      rights of way or restrictions affecting any of the Real Property or any rights
      appurtenant thereto.

    

    D.     Except
      in
      accordance with a valid governmental permit, license, certificate or approval,
      to the Borrower's knowledge there has been no emission, spill, release,
      discharge or threat-ened release into or upon (i) the air; (ii) the
      soils or any improvements located thereon; (iii) the surface water or
      ground water; or (iv) the sewer, septic system or waste treatment, stor-age
      or disposal system servicing any of the Real Property, of any Haz-ardous
      Material at, upon, under, in or from any of the Real Property (any of which
      is
      hereafter referred to as a "Hazardous Discharge").

    

    E.     There
      has
      been no complaint, order, directive, claim, citation or notice by any
      governmental authority or any other Person concerning any violation of Relevant
      Environmental Laws with respect to (i) air emissions; (ii) spills,
      releas-es or discharges to soils or any improvements located thereon, surface
      water, ground water or the sewer, septic system or waste treatment, storage
      or
      disposal systems servicing the Real Property; (iii) noise emissions;
      (iv) solid or liquid waste disposal; (v) the use, generation, storage,
      transportation or disposal of Hazardous Materials; or (vi) other
      environmental, health or safety matters, affecting any of the Borrower and
      the
      Guarantors, any of the Real Property, any improvements located thereon or the
      business conducted thereon (any of which is hereafter referred to as an
      "Environmen-tal Complaint").

    

    F.     Hazardous
      Materials disposed of, treated or stored on or off-site of any Real Property
      owned, leased or operated at any time by the Borrower or the Guarantors has
      been
      disposed of, treated and stored in com-pliance in all material respects with
      all
      applicable laws, codes and ordinances and all rules and regulations promulgated
      thereunder, including, without limitation, all Relevant Environmental Laws.
      

    

    G.     Except
      as
      set forth in the Existing Studies and for supplies that are to be used or sold
      in the ordinary course of the respective busi-nesses of the Borrower and the
      Guarantors and in full compliance with all applicable laws, codes and
      ordinances, to our knowledge all of the Real Property are free of all
      (i) Hazardous Materials; (ii) underground storage tanks; and
      (iii) underground pipelines. Except for materials used in the ordinary
      course of business, neither the Borrower nor any Guarantor has stored, treated
      or disposed of any Hazardous Mate-rials on, in or under any of the Real
      Property, or any part thereof, nor permitted the Real Property, or any part
      thereof, to be used for the storage, treatment or disposal of Hazardous
      Materi-als. Except for the material used in the ordinary course of business,
      to
      the Borrower's knowledge there has been no storage, treatment, disposal or
      release of Hazardous Materials on, in or under the Real Property at any time
      by
      any Person.

     

     

    
      
        
        

      

      
        -58-

        
          

        

      

      
        
        

      

    

    

    H.     Except
      in
      accordance with a valid required governmental permit, license, certificate
      or
      approval, neither the Borrower nor any Guarantor has transported or accepted
      for
      transport any Hazard-ous Materials. 

    

    I.     To
      their
      knowledge, the Borrower and the Guarantors have provided the Agent Bank with
      true, accurate and complete information pertaining to the environmental history
      of all of the Real Property. The Borrower and the Guarantors shall furnish
      promptly to the Agent Bank true, accurate and complete copies of all sampling
      and test results obtained from all environ-mental and/or health samples and
      tests taken at and around any of the Real Property.

    

    J.     The
      Borrower and the Guarantors are not aware of any claims or litiga-tion, and
      none
      of them have received any communication from any Person (in-cluding, without
      limitation, any governmental authority), concern-ing the presence of Hazardous
      Materials or concerning any violation or alleged viola-tion of the Relevant
      Environmental Laws. The Borrower agrees promptly to notify the Agent Bank of
      any
      such claims and to furnish the Agent Bank of any such claims and to furnish
      the
      Agent Bank with a copy of any such communica-tions received after the date
      hereof.

    

    5.14     Depository
      Accounts.
      The
      Borrower and the Guarantors maintain all of their depository accounts with
      the
      Collateral Agent, other than (i) depository accounts holding moneys for the
      benefit of employees of the Borrower and the Guarantors under employee benefit
      plans and (ii) depository accounts the balance of which does not exceed $100,000
      in any single depository account at any time.

    

    

    SECTION
      6

    AFFIRMATIVE
      COVENANTS

    

    The
      Borrower and the Guarantors hereby covenant and agree that until the Re-volving
      Credit Notes and the other Obligations have been respectively paid in full
      to
      the Banks, and the Swing Line Credit Subfacility and the Letter of Credit
      Subfacility have been terminated, the Borrower and the Guarantors will perform
      and observe all of the following provisions:

    

    6.1     Corporate
      Existence and Good Standing.
      Each of
      the Borrower and the Guarantors shall preserve its corporate existence in good
      standing and shall be and remain qualified to do business and in good standing
      in all states and countries in which it is required to be so qualified and
      where
      the failure to be so qualified would have a material adverse effect upon the
      business of such entity.

    

    6.2     Money
      Obligations, Payment of Taxes, ERISA, etc.

    

    A.     Governmental
      Obligations.
      The
      Borrower and the Guarantors will pay promptly as they become due and payable
      all
      taxes, assessments and other governmental charges levied upon them or their
      income or upon any of their properties or assets or in respect of
      their

     

     

    
      
        
        

      

      
        -59-

        
          

        

      

      
        
        
franchises,
        businesses, income or profits, or upon any part thereof, as well as all lawful
        claims of any kind (including claims for labor, materials and supplies) which,
        if unpaid, might by law become a lien or a charge upon their property before
        any
        of the same become delinquent; provided that no such tax, assessment or charge
        need be paid if being contested in good faith and by appropriate proceedings
        promptly initiated and diligently conducted by the Borrower and the Guarantors
        and if such reserve or other appropriate provision, if any, as shall be required
        by GAAP shall have been made therefor. The Borrower and the Guarantors will
        satisfy or cause to be satisfied the minimum annual funding stan-dard within
        the
        meaning of ERISA for any employee benefit plan established or maintained
        by the
        Borrower and the Guarantors which is subject to ERISA, and the Borrower and
        the
        Guarantors will not permit any tax or penalty to be incurred by it as a result
        of any failure to satisfy any such minimum funding requirement or as a result
        of
        any violation of the provisions of Section 4975 of the Code, or of any
        regulation issued thereunder.

    

    

    B.     Other
      Obligations.
      The
      Borrower and the Guarantors will pay in full all their other debts, obligations
      and liabilities allowed hereunder before the same become delinquent, unless
      the
      same are being con-tested in good faith by the Borrower and the Guarantors,
      the
      Borrower and the Guarantors have established adequate reserves for the payment
      of the same in accordance with GAAP, and the contesting thereof does not involve
      the risk of for-feiture or loss of any of the assets of the Borrower or the
      Guarantors.

    

    6.3     Financial
      Statements and Reports.
      The
      Borrower will furnish to the Agent Bank the information required below at the
      times set forth below:

    

    A.    Monthly
      Consolidated Financial Statements.
      As soon
      as available, and in any event within twenty-five (25) days after the close
      of
      each calendar month (other than the close of a calendar month which is also
      the
      close of a Fiscal Quarter), the Borrower, for itself and the Guarantors, shall
      deliver to the Agent Bank a condensed consolidated bal-ance sheet, income
      statement and cash flow statement for such month, together with comparative
      figures for both the month just ended and the portion of the Fiscal Year then
      ended (compared to the same periods for the previous Fiscal Year), unaudited
      but
      accompanied by a certificate signed by the Financial Officer of the Borrower
      stating that such statements have been properly prepared in accordance with
      GAAP
      and are correct (sub-ject to audit and year-end adjustments). 

    

    B.     Quarterly
      Statements.
      The
      Borrower, for itself and for the Guarantors, shall furnish to the Agent Bank,
      as
      soon as available, and in any event within forty-five (45) days after the end
      of
      each Fiscal Quarter of the Borrower, a copy of the Borrower's Form
      10-Q.

    

    C.     Annual
      Statements.
      The
      Borrower, for itself and for the Guarantors, shall furnish to the Agent Bank,
      as
      soon as available, and in any event within ninety (90) days after the end of
      the
      Fiscal Year of the Borrower, a copy of the Borrower's Form 10-K accompanied
      by
      any other financial statements and reports that the Banks may, in their sole
      discretion, reasonably request from time to time.

     

     

    
      
        
        

      

      
        -60-

        
          

        

      

      
        
        

      

    

     

     

    D.     Compliance
      Certificate.
      Together with the delivery to the Agent Bank of the financial statements
      referred to in subparts (B) and (C) above, the Borrower, for itself and the
      Guarantors, shall deliver to the Agent Bank a Compliance Certificate in
      substantially the form of Exhibit
      G
      hereto
      with all blanks completed and (x) stating that the Authorized Officer of the
      Borrower, for itself and the Guarantors, signing the Compliance Certificate
      has
      reviewed the relevant terms of this Loan Agreement, the Revolving Credit Notes,
      the Negative Pledge Agreement and the other Loan Documents to which the Borrower
      and the Guarantors are party, and such Authorized Officer has no actual
      knowl-edge (after making such inquiry as is consistent with the scope of his
      or
      her duties) of any event or condition which constitutes an Event of Default
      hereunder, or, if any such condition or event existed or exists, specifying
      the
      nature and period of existence thereof and what action the Borrower has taken
      or
      is taking or proposes to take with respect thereto, and (y) demonstrating in
      reasonable detail compliance at the end of such accounting period with Sections
      7.6 through 7.8 of this Loan Agreement to the extent applicable to such
      period.

    

    E.     Fiscal
      Year Budget; Quarterly Comparison of Budget to Actual Results; Quarterly Budget
      Update; Quarterly Market Overview. 

    

    (i)     The
      Borrower, for itself and the Guarantors, shall deliver to the Agent Bank (i)
      in
      draft form, on or before November 30 of each Fiscal Year, and (ii) in the form
      reviewed by the Borrower's Board of Directors, before December 31 of each Fiscal
      Year, a consolidated operating budget for the Borrower 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 Agent Bank, all in
      form
      and substance satisfactory to the Agent Bank.

    

    (ii)    Once
      each
      Fiscal Quarter, at the same time the Borrower is required to deliver the Agent
      Bank its Form 10-Q pursuant to Section 6.3B hereof, the Borrower, for itself
      and
      the Guarantors, shall deliver to the Agent Bank a comparative condensed
      consolidated bal-ance sheet, income statement and cash flow statement for such
      month, comparing the actual results for the portion of the Fiscal Year then
      ended to the Fiscal Year Budget, all in form and substance satisfactory to
      the
      Agent Bank.

    

    (iii)     Once
      each
      Fiscal Quarter, at the same time the Borrower is required to deliver the Agent
      Bank its Form 10-Q pursuant to Section 6.3B hereof, the Borrower, for itself
      and
      the Guarantors, shall deliver to the Agent Bank an update to its Fiscal Year
      Budget, reflecting any necessary updates and revisions. 

    

    (iv)     Once
      each
      Fiscal Quarter, at the same time the Borrower is required to deliver the Agent
      Bank its Form 10-Q pursuant to Section 6.3B hereof, the Borrower, for itself
      and
      the Guarantors, shall deliver to the Agent Bank a market overview reflecting
      then current and projected conditions in the Borrower's principal markets.
      

    

    F.     Events
      of Default.
      Forthwith upon any Authorized Officer of the Borrower obtaining knowledge of,
      or
      receiving notice of any claim of or action taken with respect to, any condition
      or event which constitutes a Potential Default or an Event of Default

     

     

    
      
        
        

      

      
        -61-

        
          

        

      

      
        
        
hereunder,
        the Borrower, for itself and the Guarantors, shall furnish to the Agent Bank
        a
        cer-tificate specifying the nature and period of existence thereof and what
        action the Borrower has taken or is taking or proposes to take with respect
        thereto.

    

    

    G.     Reports
      from CPAs.
      Promptly upon receipt thereof, the Borrower, for itself and the Guarantors,
      shall furnish to the Agent Bank copies of any reports (including management
      letters, if any) submitted to the Borrower and the Guarantors by independent
      certified public accoun-tants in connection with the examination of the
      financial state-ments of the Borrower and the Guarantors made by such
      accountants.

    

    H.     Other
      Information.
      With
      reasonable promptness, the Borrower shall furnish to the Agent Bank such other
      information and data with respect to the Borrower and the Guarantors as from
      time to time may be reasonably requested by the Banks. The Banks shall keep
      confidential all of the financial state-ments and other information, unless
      otherwise publicly available furnished to the Banks pursuant to this Loan
      Agreement, except that each Bank shall have the right to furnish copies of
      such
      financial statements and other information furnished to such Bank to financial
      institutions which purchase interests in the Revolving Credit Facility pursuant
      to Section 11 hereof and governmental agencies having jurisdiction over such
      Bank and which request copies of such finan-cial statements and/or other
      information. Such Bank will promptly inform the Borrower each time such Bank
      is
      obligated or required to deliver any such financial statements and other
      information to any such governmental agency having jurisdiction over such
      Bank.

    

    I.     Field
      Audit and Inventory Spot Check(s).
      The
      Agent Bank shall cause to be conducted within 45 days after the date of the
      Closing Date, a field audit of the accounts receivable of the Borrower and
      the
      Guarantors and a spot check of the inventory of the Borrower and the Guarantors
      (a "Field Audit and Inventory Spot Check"), the scope and results of such Field
      Audit and Inventory Spot Check to be in form and substance satisfactory to
      the
      Agent Bank. Thereafter, if no Event of Default then exists and is continuing
      and
      to the extent the Majority Banks have so requested, the Agent Bank shall cause
      to be conducted a Field Audit and Inventory Spot Check once in each calendar
      year beginning with calendar year 2008; provided, however, that if an Event
      of
      Default has occurred and is continuing, Field Audit and Inventory Spot Checks
      shall be conducted as frequently as may be requested by the Majority Banks.
      The
      Agent Bank shall provide copies of any Field Audit and Inventory Spot Checks
      to
      the Banks. The Borrower shall cooperate with the entities performing the Field
      Audit and Inventory Spot Checks and shall pay the costs of all such Field Audit
      and Inventory Spot Checks performed pursuant to this Section 6.3I. To the extent
      that the scope and results of any Field Audit and Inventory Spot Check are
      not
      in form and substance satisfactory to the Agent Bank and Agent Bank gives notice
      to the Borrower of the deficiencies and such deficiencies are not corrected
      to
      the satisfaction of the Agent Bank within 30 days after the date of such notice,
      such failure shall be an Event of Default hereunder. 

    

    J.     Notice
      of receipt of Dana Payment.
      The
      Borrower shall give notice to the Agent Bank of its receipt of any Dana Payment
      within ten (10) Business Days after the receipt thereof. 

     

     

    
      
        
        

      

      
        -62-

        
          

        

      

      
        
        

      

    

    

    6.4     Financial
      Records; Inspection.

    

    A.     System
      of Accounting.
      The
      Borrower and the Guarantors will maintain a standard, modern system of
      accounting established and administered in accordance with GAAP consistently
      applied, in which full, true and correct entries shall be made of all dealings
      and transactions in relation to the Borrower's and the Guarantors' businesses
      and affairs, and will set aside on their books all such proper reserves as
      shall
      be required by GAAP. 

    

    B.    Access
      to Books and Records.
      The
      Borrower and the Guarantors will permit any authorized representative designated
      by any Bank to inspect any of the properties of the Borrower and the Guarantors,
      including their books of account (and to make copies thereof and to take
      extracts therefrom), and to discuss their affairs, finances and accounts with
      their officers and with their independent accountants, all at such reason-able
      times and as often as may be reasonably requested. Discussions with independent
      accountants shall be requested in writing. Such in-spection shall be for the
      information and benefit of the Banks and, unless otherwise publicly available,
      any information obtained thereby or otherwise pursuant thereto shall not be
      divulged to others except in connection with the enforcement of the rights
      of
      the Banks upon the occurrence of an Event of Default hereunder or to financial
      institutions which purchase interests in the Revolving Credit Facility pursuant
      to Section 11 hereof and except as may be required by law or by any governmental
      agency having jurisdiction over any Bank. Each Bank will promptly inform the
      Borrower each time such Bank is obligated or required to deliver any such
      information to any governmental agency having jurisdiction over such
      Bank.

    

    6.5     Maintenance
      of Properties, etc.
      The
      Borrower and the Guarantors will, insofar as they are not prevented by causes
      beyond their control, main-tain or cause to be maintained in good repair,
      working order and condition, ordinary wear and tear excepted, all properties
      used or useful in the businesses of the Borrower and the Guarantors. The
      Borrower and the Guarantors will maintain or cause to be maintained, with
      financially sound and reputable insurers, insurance with respect to their
      properties and businesses against loss or damage of the kinds customarily
      insured against by corporations of established reputation engaged in the same
      or
      a similar business and similarly situated, in such types and amounts as are
      customarily carried under similar circumstances by such other corporations.
      The
      Banks have no basis to conclude that the current insurance of the Borrower
      and
      the Guarantors, including their current worker's compensation insurance, is
      deficient in any material respect.

    

    6.6     Permits,
      Certificates, Leases, Licenses.
      The
      Borrower and the Guarantors will obtain, maintain and comply at all times,
      in
      all material respects, with all per-mits, certificates, licenses, approvals,
      authorizations, leases and other instruments necessary or appropriate for the
      conduct of their businesses as presently conducted or as contemplated to be
      conducted in the future.

    

    6.7     Notice.
      The
      Borrower will notify the Agent Bank in writing, within no more than ten (10)
      calendar days (and without the benefit of any grace period afforded in any
      provision of this Loan Agreement or the other Loan Documents) after any
      Authorized Officer of the

     

     

    
      
        
        

      

      
        -63-

        
          

        

      

      
        
        
Borrower
        learns of any of the following: (i) the existence or occurrence of any Event
        of
        Default under this Loan Agreement, (ii) that any representation or warranty
        made
        herein or in any other Loan Document shall, for any reason, not be or shall
        cease in any material respect to be true and complete and not misleading,
        (iii)
        the institution of, or adverse determination in, any material arbitration
        proceeding, including, without limitation, an audit or examination by the
        Internal Revenue Service, involving the Borrower and the Guarantors and
        describing the nature and result thereof, and what steps are being taken
        by the
        Borrower and the Guarantors with respect thereto, or (iv) the institution
        of, or
        adverse determination in, any litigation involving a claim against the Borrower
        and the Guarantors in excess of the sum of Five Million Dollars ($5,000,000)
        not
        covered by applicable insurance, describing the nature and result thereof,
        and
        what steps are being taken by the Borrower and the Guarantors with respect
        thereto.

    

    

    6.8     Payment
      of Obligations.
      The
      Borrower will pay the Revolving Credit Notes and the other Obligations timely
      in
      accordance with their respective terms in legal tender of the United States
      of
      America. All payments on the Revolving Credit Notes and the other Obligations
      shall be made to the Banks, respectively, in "good and collected funds," at
      the
      principal office of the Agent Bank not later than 12:00 noon (Louisville,
      Kentucky time) on the date due; funds received by the Agent Bank after that
      hour
      shall be deemed to have been received on the next following Business
      Day.

    

    6.9     Environmental
      Matters.
      The
      Borrower and the Guarantors hereby warrant that, to the best of their knowledge,
      the Borrower's assets are now, and so long as the Revolving Credit Facility,
      the
      Swing Line Loans and the Letters of Credit continue in effect, will remain
      materially free of contamination by hazardous, dangerous, contaminating, noxious
      or unsafe materials except as such materials are stored, handled, used and
      disposed of in the ordinary course and in compliance with the Relevant
      Environmental Laws, except as otherwise disclosed in Schedule
      5.13
      hereof.
      Subject to the right of the Borrower and the Guarantors to contest any alleged
      violation of any environmental law, regulation and requirement in good faith
      and
      with due diligence, and provided that no such contesting will re-sult in the
      loss or forfeiture of any assets of the Borrower and the Guarantors or otherwise
      have a material adverse effect on the financial condition of the Borrower and
      the Guarantors taken as a whole, the Borrower and the Guarantors further
      covenant to comply in all material respects with all applicable environmental
      laws, regulations and requirements, and the Borrower and the Guarantors covenant
      and agree to remedy any violation of any environmental law, regulation and
      requirement, promptly upon the Borrower's learning of such violation. The
      Borrower and the Guarantors further hereby agree to indemnify and hold the
      Banks
      harmless from any expense, loss, claim, suit or fee arising out of any such
      contamination or noncompliance or the Borrower's breach of the provisions of
      this Section 6.9.

    

    6.10     Insurance.
      The
      Borrower and the Guarantors shall maintain insurance as follows:

    

    A.    Liability
      Insurance.
      The
      Borrower and the Guarantors at their own cost and expense, shall procure,
      maintain and carry in full force and effect general liability, public liability,
      workers' compensation liability and property damage insurance with respect
      to
      the actions and operations of the Borrower and the Guarantors to such extent,
      in
      such amounts and

     

     

    
      
        
        

      

      
        -64-

        
          

        

      

      
        
        
with
        such
        deductibles as are carried by prudent businesses similarly situated (including
        self-insurance programs such as are carried by prudent businesses similarly
        situated, in the ordinary course of business). Without limiting the foregoing,
        such insurance shall insure against any liability for loss, injury, damage
        or
        claims caused by or arising out of or in connection with the operation of
        the
        Borrower's and the Guarantors' respective businesses including injury to
        or
        death of any of the Borrower's and the Guarantors' employees, agents or any
        other persons and damage to or destruction of public or private
        property.

    

    

    B.     Physical
      Damage Insurance.
      The
      Borrower and the Guarantors at their own cost and expense, shall insure all
      of
      their insurable proper-ties to such extent, against such hazards (excluding,
      without limitation, environmental hazards), in the amount of coverage and with
      such deductibles as are carried by prudent businesses simi-larly situated,
      but
      in any event in amounts of coverage not less than the insurable value of the
      property insured. 

    

    C.     General
      Insurance Requirements.

    

    (i)     All
      insurance which the Borrower and the Guarantors are required to maintain shall
      be satis-factory to the Agent Bank in form, amount and insurer. Such insur-ance
      shall provide that any loss thereun-der shall be payable notwithstanding any
      action, inaction, breach of warranty or condition, breach of declarations,
      misrepresentation or negli-gence of the Borrower and the Guarantors.

    

    (ii)     If
      the
      Borrower and the Guarantors fail to acquire any policy of insurance required
      to
      be maintained pursuant to this Section, or fail to renew or replace any such
      policy at least ten (10) days prior to the expiration thereof, or fail to keep
      any such policy in full force and effect, the Agent Bank shall have the option
      (but not the obligation) to pay the premiums on any such policy of insurance
      or
      to take out new insurance in amount, type, cover-age and terms satisfactory
      to
      the Agent Bank, after first notifying the Borrower of the Agent Bank's intent
      to
      pay it. Any amounts paid therefor by the Agent Bank shall be immediately due
      and
      payable to the Agent Bank by the Borrower upon demand. No exercise by the Agent
      Bank of such option shall in any way affect the provisions of this Loan
      Agreement, including the provision that failure by the Borrower and the
      Guarantors to maintain the prescribed insurance shall constitute an Event of
      Default.

    

    6.11     Environmental
      Compliance.
      

    

    A.     The
      Borrower shall notify the Agent Bank promptly and in reasonable detail in the
      event that the Borrower becomes aware of the presence of Hazardous Materials
      (other than as used in ordinary course of business) or a violation of the
      Relevant Environmental Laws resulting from or in connection, directly or
      indirectly, with the business or operations of the Borrower or the
      Guarantors.

    

    B.    The
      Borrower shall ensure that its business and operations and those of the
      Guarantors comply and continue to comply in all material respects with the
      Relevant Environmental Laws, except as disclosed in Schedule
      5.13.

     

     

    
      
        
        

      

      
        -65-

        
          

        

      

      
        
        

      

    

    

    C.     Should
      the Borrower or the Guarantors conduct any business or opera-tions in such
      a way
      as to subject any of the Borrower or the Guarantors or the Agent Bank to a
      claim
      or violation of the Relevant Environmental Laws (unless contested in good
      faith), the Borrower or the Guarantors shall prudently and appropriately remedy
      and fully cure any conditions arising therefrom, at their own cost and
      expense.

    

    D.     At
      their
      sole cost and expense, the Borrower and the Guarantors shall:

    

    (i)     Pay
      or
      cause to be paid immediately when due the cost of compli-ance with the Relevant
      Environmental Laws; and

    

    (ii)     Keep
      the
      Borrower's business, assets and operations and those of the Guarantors free
      of
      any lien imposed pursuant to the Relevant Environmental Laws.

    

    E.     The
      Agent
      Bank shall not be liable for, and the Borrower and the Guarantors shall
      immediately pay to the Agent Bank when incurred and shall indem-nify, defend
      and
      hold the Agent Bank harmless from and against, all loss, cost, liability, damage
      and expense (including, without limitation, reasonable attorneys' fees and
      costs
      incurred in the investiga-tion, defense and settlement of claims) that the
      Agent
      Bank may suf-fer or incur as mortgagee (as holder of or assignee in possession
      or as successor in interest to the Borrower and the Guarantors as owner of
      a
      lease, by virtue of exercising the Agent Bank's right pursuant to a security
      interest thereof) as a result of or in connection in any way with any of the
      Relevant Environmental Laws (including, without limitation, the assertion that
      any lien exist-ing pursuant to the Relevant Environmental Laws takes priority
      over the lien or security interest of the Agent Bank's), or any environmen-tal
      assessment or study from time to time reasonably undertaken or requested by
      Agent Bank or breach of any covenant or undertaking by the Borrower and the
      Guarantors concerning Relevant Environmental Laws. 

    

    F.     Except
      as
      disclosed in Schedule
      5.13,
      there
      shall not occur any unpermitted Hazardous Discharge or material Environmental
      Complaint. 

    

    6.12     Material
      Change in Management.
      The
      Borrower shall notify the Agent Bank of any material change in its management
      from that existing on the date of this Loan Agreement.

    

    6.13     Depository
      Accounts.
      To the
      extent that the balance in any depository account (excluding any depository
      account holding moneys for the benefit of employees of the Borrower and the
      Guarantors under an employee benefit plan) maintained by the Borrower or the
      Guarantors at a bank or financial institution other than the Agent Bank ever
      exceeds One Hundred Thousand Dollars ($100,000), the Borrower and Guarantors
      shall notify the Collateral Agent of such fact and shall execute a deposit
      account control agreement with respect to such depository account, all in form
      and substance satisfactory to the Collateral Agent. 

     

    
 

    
      
        
        

      

      
        -66-

        
          

        

      

      
        
        

      

    

    

    SECTION
      7

    NEGATIVE
      COVENANTS

    

    The
      Borrower and the Guarantors hereby covenant and agree that until the Revolving
      Credit Notes, and the other Obligations have been respectively paid in full
      to
      the Banks, and the Swing Line Credit Subfacility and Letter of Credit
      Subfacility have been terminated, the Borrower and the Guarantors will perform
      and observe all of the following provisions: 

    

    7.1     Mergers,
      Change in Control, Acquisitions and Other Extraordinary Events.
      Without
      the prior written consent of the Agent Bank, which shall not be unreasonably
      withheld or delayed, the Borrower and the Guarantors 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.     Allow
      a
      Change in Control to occur with respect to the Borrower; or

    

    C.     Liquidate
      or dissolve or take any action with a view toward liquidation or dissolution;
      or

    

    D.     Purchase
      all or a substantial part of the capital stock or assets of any corporation
      or
      other business enterprise if (i) such purchase involves consideration, including
      assumption of Funded 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, involves consideration,
      including assumption of liabilities, in excess of Ten Million Dollars
      ($10,000,000) in the aggregate (purchases or acquisitions that have been
      consented to in writing by the Majority Banks shall not be considered for
      purposes of the $10,000,000 aggregate limitation). It shall be a condition
      to
      any transaction under this Section 7.1D that the Borrower and the Guarantors
      shall demonstrate that they shall be in compliance with all provisions of this
      Loan Agreement after giving effect to any acquisition permitted by this clause
      7.1D, by delivering, at least five (5) Business Days prior to making or closing
      such acquisition, a certificate in the form of Exhibit M (each an "Acquisition
      Compliance Certificate") evidencing such compliance. 

    

    A
      "Permitted Acquisition" shall mean any of the following: (i) an acquisition
      that
      can be accomplished without violating Section 7.1D, (ii) an acquisition
      consummated prior to the Closing Date and (iii) an acquisition that has been
      consented to in writing by the Majority Banks as defined in Section 15.10
      pursuant to this Section 7.1.

    

    

    7.2     Sales
      of Assets; Dispositions.
      Except
      as permitted by Section 7.1, the Borrower will not, and will not permit any
      Subsidiary to, sell, lease, transfer or otherwise dispose of, including by
      way
      of merger (collectively a "Disposition"), any assets, including capital stock
      of
      Subsidiaries, in one or a series of transactions, to any Person, other than
      Dispositions of assets 

     

     

    
      
        
        

      

      
        -67-

        
          

        

      

      
        
        

      

    

     

    that
      fall
      into one of the following categories:

    

    A.     Sale
      or
      other Disposition of Inventory in the ordinary course of business;

    

    B.    Dispositions
      of assets by the Borrower to a Guarantor (other than Sypris Mexican Holdings,
      LLC) or by a Subsidiary to the Borrower or to a Subsidiary that is a Guarantor
      (other than Sypris Mexican Holdings, LLC);

     

    C.    Dispositions
      of assets by the Borrower or a Guarantor to Sypris Mexican Holdings, LLC, Sypris
      Technologies Mexico, S. de R.L. de C.V. or Sypris Technologies Toluca, S.A.
      de
      C.V.; provided that the aggregate net book value of all such assets so disposed
      of pursuant to this Section 7.2(c) shall not exceed Ten Million Dollars
      ($10,000,000) in any calendar year and Eighteen Million Dollars ($18,000,000)
      in
      the aggregate during the term of this Loan Agreement; and

    

    D.    Any
      other
      Disposition of assets so long as the aggregate net book value of all such assets
      so disposed of does not exceed Two Million Dollars ($2,000,000) in any Fiscal
      Year.

    

    Any
      Disposition not meeting one of the categories set forth above shall require
      the
      prior consent of the Majority Banks. To the extent the Borrower wishes to make
      a
      Disposition that does not meet one of the categories above, it shall provide
      the
      Agent Bank with a written request for the same at least ten (10) Business Days
      prior to the date of the proposed Disposition. 

    

    7.3     Indebtedness,
      Guaranties, etc.
      The
      Borrower and the Guarantors will not, without the prior written consent of
      the
      Agent Bank, directly or indirectly, create, incur, assume, guarantee, agree
      to
      purchase or repurchase or pro-vide funds in respect of, or otherwise become
      liable with respect to any Funded Debt other than:

    

    A.     The
      Revolving Credit Facility; 

    

    B.     The
      Swing
      Line Credit Subfacility; 

    

    C.     The
      Letter of Credit Subfacility;

    

    D.     Obligations
      to the Banks or their Affiliates under credit card programs in an aggregate
      amount not exceeding Five Million Dollars ($5,000,000); and 

    

    E.     The
      $55,000,000 Senior Notes, the principal amount of which has been reduced to
      $30,000,000 as of the Closing Date; 

    

    F.     Funded
      Debt other than obligations described in Sections 7.3A., 7.3B., 7.3C., 7.3D
      or
      7.3E that is secured or unsecured, in an aggregate amount not exceeding Five
      Million Dollars ($5,000,000); and 

     

     

    
      
        
        

      

      
        -68-

        
          

        

      

      
        
        

      

    

     

    G.     Any
      guaranty by the Borrower or a Guarantor of Funded Debt incurred by the Borrower
      or the Guarantor that is allowable under and included within Sections 7.3A.,
      7.3B., 7.3C., 7.3D, 7.3E or 7.3F. 

    

    7.4     Mortgages,
      Liens, Encumbrances, Security Interests, Assignments, etc.
      Neither
      the Borrower nor any Subsidiary (including any Foreign Entity Subsidiary) of
      the
      Borrower will, without the prior written consent of the Agent Bank, directly
      or
      indirectly create, incur, assume or permit to continue in existence any
      mort-gage, lien, charge or encumbrance on, or security interest in, or pledge
      or
      deposit of, or conditional sale or other title retention agreement (including
      any lease which would constitute Funded Debt), or assignment of, with respect
      to, any personal or real property or tangible or intangible asset now owned
      or
      hereafter acquired by the Borrower or such Subsidiary; provided, however, that
      the restrictions in this Section 7.4 shall not prohibit:

    

    A.    Liens
      on
      assets as of the Closing Date and which have been disclosed to Agent Bank in
      Schedule
      7.4
      hereto
      and capital leases (if any) identified in Schedule
      7.4;

    

    B.     Liens
      in
      favor of the Banks and the holders of the $55,000,000 Senior Notes, pursuant
      to
      the Security Agreement;

    

    C.     Liens
      securing any other Funded Debt to the extent such Funded Debt is permitted
      by
      Section 7.3;

    

    D.     Liens
      on
      assets acquired by the Borrower or a Guarantor in a Permitted Acquisition (as
      defined in Section 7.1 hereof);

    

    E.      Liens
      for
      taxes, assessments or governmental charges not yet due and payable or the
      payment of which is not at the time required for the reasons set forth by the
      proviso to the first sentence of Section 6.2A; 

    

    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
      ap-peal 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 dili-gently conducted, if such reserve or
      other appropriate provision, if any, as shall be required by GAAP shall have
      been made therefore; and

    

    G.     Liens
      incidental to the conduct of the business or the ownership of properties and
      assets (including landlords', lessors', carriers', operators', warehousemen's,
      mechanics', materialmen's and other similar Liens) and Liens to secure the
      performance of bids, tenders, leases or trade contracts, or to secure statutory
      obligations (including obligations under workers compensation, unemployment
      insurance and other social security legislation), surety or

     

     

    
      
        
        

      

      
        -69-

        
          

        

      

      
        
        

      

    

     

    appeal
      bonds or other Liens of like general nature incurred in the ordinary course
      of
      business and not in connection with the borrowing of money; and 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 Borrower or its
      Subsidiaries; and Liens resulting from extensions, renewals or replacements
      of
      Liens otherwise permitted in this Section 7.4, provided that (i) there is no
      increase in the principal amount or decrease in maturity of the Funded 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.

     

    7.5     Nature
      of Businesses.
      The
      Borrower and the Guarantors will not, without the prior written consent of
      the
      Agent Bank in every specified instance, en-gage in any businesses other than
      the
      businesses conducted as of the Closing Date and all businesses incidental
      thereto.

    

    7.6     Fixed
      Charge
      Coverage Ratio.
      The
      Borrower shall not permit the Fixed Charge Coverage Ratio for any period of
      four
      consecutive Fiscal Quarters to fall below the following applicable ratio
      calculated as of the end of the applicable Fiscal Quarter set forth
      below:

     

    

      
        	
                 

                Fiscal
                  Quarter Ending

                 

              	
                 

                Applicable
                  Minimum Ratio

                 

              
	
                4/01/07

              	
                3.00
                  to 1.00

              
	
                7/01/07

              	
                2.50
                  to 1.00

              
	
                9/30/07

              	
                2.25
                  to 1.00

              
	
                12/31/07
                  

              	
                2.50
                  to 1.00

              
	
                3/31/08
                  and all Fiscal Quarters 

                ending
                  thereafter

              	
                3.00
                  to 1.00

              

      

    

     

     

    7.7     Ratio
      of Adjusted Funded Debt to EBITDA.
      The
      Borrower shall not permit the ratio of Adjusted Funded Debt to EBITDA for any
      period of four consecutive Fiscal Quarters, to exceed the following applicable
      maximum ratio as of the applicable Fiscal Quarter set forth below: 

     

    

      
        	
                 

                Fiscal
                  Quarter Ending

                 

              	
                 

                Applicable
                  Maximum Ratio

                 

              
	
                4/01/07

              	
                3.00
                  to 1.00

              
	
                7/01/07

              	
                4.00
                  to 1.00

              
	
                9/30/07

              	
                4.00
                  to 1.00

              
	
                12/31/07

              	
                3.25
                  to 1.00

              
	
                3/31/08
                  and all Fiscal

                Quarters
                  ending thereafter

              	
                3.00
                  to 1.00

              

      

    

    
 

    
      
        
        

      

      
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    7.8     Minimum
      Net Worth.
      The
      Borrower shall not permit its Net Worth for any period of four consecutive
      Fiscal Quarters, calculated as of the end of each Fiscal Quarter during the
      term
      of this Loan Agreement, to be less than the sum of (i) $188,190,000, plus (ii)
      50% of Net Income earned in each Fiscal Quarter ended subsequent to December
      31,
      2006, plus (iii) 100% of equity raised or contributed. For purposes of
      calculating Net Worth under this Section 7.8, any net losses hereafter incurred
      by the Borrower as of the end of a Fiscal Quarter will be treated as $0 earnings
      for purposes of calculating the Minimum Net Worth requirement.

    

    7.9     Rate
      Management Transaction Agreements and Interest
      Rate Agreements.
      The
      Borrower and the Guarantors will not 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 Indebtedness with a notional amount not in excess
      of
      the Revolving Loan Commitments and is embodied in a standard ISDA form of
      agreement which is acceptable to the Banks with respect to any intercreditor
      issues, (ii) the Borrower and the Guarantors promptly provide a true and
      complete copy of such Rate Management Transaction Agreement or Interest Rate
      Agreement to the Agent Bank, on behalf of itself and the Banks. At or following
      the effective date of any Rate Management Transaction Agreement, the Agent
      Bank
      may, upon written notification to the Borrower and the Guarantors and the Banks
      and such counterparty, designate (which designations shall be made only upon
      the
      instructions or with the consent of the Majority Banks) the credit exposure
      of
      such counterparty under such Rate Management Transaction Agreement as an
      obligation entitled to share, pari passu with the Obligations, in respect to
      the
      benefits provided by the collateral under the Loan Documents, in accordance
      with
      the applicable provisions of the Loan Documents, and if the Agent Bank so
      designates such credit exposure, the applicable Rate Management Transaction
      Agreement of such counterparty shall be considered a "Designated Interest Rate
      Agreement."

    

    

    7.10     Capital
      Expenditures.
      The
      Borrower shall not incur Capital Expenditures in any calendar year in excess
      of
      the following limits: 

    

    Calendar
      Year     Limitation

     

    
      
        	
                2007

              	
                $25,000,000

              
	
                2008

              	
                $30,000,000

              
	
                2009

              	
                $30,000,000

              

      

    

    
      
 

    

    7.11     Limitation
      on Operating Lease Rentals.
      Operating Lease Rentals paid in any Fiscal Year shall not exceed $10,000,000.
      

    

    7.12     New
      Subsidiaries. 

    

    A. Except
      as
      otherwise provided under Section 7.12B below, to the extent that the Borrower
      creates or acquires any new Subsidiary, Borrower will (i) cause
      such

     

     

    
      
        
        

      

      
        -71-

        
          

        

      

      
        
        

      

    

     

     Subsidiary
      to execute a Guaranty Agreement (in the form attached to the Loan Agreement
      as
Exhibit
      I)
      and
      deliver such Guaranty Agreement to the Agent Bank, as promptly as possible,
      but
      in any event within sixty (60) days after becoming a Subsidiary of the Borrower
      (whereupon such Subsidiary shall become a "Guarantor" under this Loan
      Agreement), and (ii) deliver and cause each such Subsidiary to deliver corporate
      resolutions, opinions of counsel, and such other corporate documentation as
      the
      Agent Bank may reasonably request, all in form and substance reasonably
      satisfactory to the Agent Bank.

    

    B.     
      Upon the
      creation or acquisition of 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"), if Borrower advises Agent Bank in
      writing that it believes that requiring such Foreign Entity to execute a
      Guaranty Agreement would cause adverse tax results to the Borrower under the
      Internal Revenue Code, then the Borrower shall, or shall cause its applicable
      parent Subsidiary, as promptly as possible (but in any event within sixty (60)
      days following the creation or acquisition thereof) to (i) execute a Pledge
      Agreement in favor of the Collateral Agent with respect to sixty-five percent
      (65%) of the Stock or limited liability company interests of such Subsidiary,
      as
      applicable (such Subsidiary 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, resolutions, opinions of counsel, and such other documentation
      as
      the Collateral Agent may reasonable request, all in form and substance
      reasonably satisfactory to the Collateral Agent; 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. 

    

    7.13     Restricted
      Payments.
      The
      Borrower shall not redeem or purchase any of the $30,000,000 principal amount
      of
      the $55,000,000 Senior Notes to remain outstanding after the Closing Date prior
      to their scheduled maturities as in effect on the Closing Date, except to the
      extent for any prepayment made under Section 8.1(b) of the Note Purchase
      Agreement in connection with a prepayment made pursuant to Section 2.4D hereof.
      

    

    7.14     Government
      Regulation.
      The
      Borrower shall not (1) 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 Bank from making any
      advance or extension of credit to Borrower or from otherwise conducting business
      with Borrower, or (2) fail to provide documentary and other evidence of
      Borrower's identity as may be requested by Bank at any time to enable Bank
      to
      verify Borrower's identity 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. 

    

    7.15     Use
      of
      Assets.
      The
      Borrower and the Guarantors will not use, or cause or permit the use of, any
      of
      their assets in any manner prohibited by law, governmental regulations or
      applicable insurance policies.

     

     

    
      
        
        

      

      
        -72-

        
          

        

      

      
        
        

      

    

     

     

    7.16     Investments;
      Loans and Advances. Except
      as
      otherwise expressly permitted by this Section 7.16, neither
      the Borrower nor any Guarantor shall, nor shall the Borrower nor any Guarantor
      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 Borrower or a Guarantor; 

    

    B.    Investments
      in Subsidiaries with operations outside the United States that have been made
      prior to the Closing Date;

    

    C.     Investments
      (including Investments constituting Funded Debt) by the Borrower or a Guarantor
      in Subsidiaries with operations outside the United States that are made after
      the Closing Date, so long as the aggregate amount of all such investments,
      together with the aggregate net book value of the assets transferred from the
      Obligors to Subsidiaries with operations outside the United States to the extent
      permitted by Section 7.2C hereof, shall not exceed $30,000,000; 

    

    D.     so
      long as
      the Agent Bank has not delivered a notice of an Event of Default, Borrower
      may
      make Investments, subject to Control Letters in favor of the Collateral Agent
      for the benefit of Banks and the holders of the $55,000,000 Senior Notes or
      otherwise subject to a perfected security interest in favor of Collateral Agent
      for the benefit of the Banks and the holders of the $55,000,000 Senior Notes,
      in
      (i) 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, (ii) commercial paper maturing no more
      than one year from the date of 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, (iii) 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 (an "A
      Rated Bank"),
      (iv)
      time deposits maturing no more than thirty (30) days from the date of creation
      thereof with A Rated Banks and (v) mutual funds that invest solely in one or
      more of the investments described in clauses
      (i) through (iv)
      above;
      and (vi) with respect to Subsidiaries of the Borrower that are organized under
      the laws of any other jurisdiction other than the United States of America,
      direct obligations of such foreign jurisdiction, provided
      that
      such foreign jurisdiction’s direct obligations are rated "A" or better by
      Moody’s Investors Services, Inc., in either case maturing 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
      Borrower and its Subsidiaries in connection with Dispositions of assets
      permitted by Section 7.2 hereof.

     

     

    
      
        
        

      

      
        -73-

        
          

        

      

      
        
        

      

    

     

    

    

    SECTION
      8

    EVENTS
      OF DEFAULT; ACCELERATION

    

    8.1     Events
      of Default.
      The
      following events shall constitute Events of Default under this Loan
      Agreement:

    

    A.     The
      failure by the Borrower to pay any principal of any Revolving Credit Note when
      the same becomes due and payable or the failure of the Borrower to pay any
      interest thereon within five (5) days of the date when the same becomes due
      and
      payable; or

    

    B.     The
      failure by the Borrower to reimburse the Agent Bank upon demand for any draft
      honored by the Agent Bank under any Letter of Credit now or hereafter issued
      by
      the Agent Bank for the account of the Borrower; or

    

    C.     The
      failure by the Borrower or a Guarantor to perform or observe any of the
      provisions of Sections 7.1, 7.2, 7.6, 7.7 , 7.8, 7.10, 7.11 or 7.13;
      or

     

    D.     The
      failure by the Borrower or a Guarantor to timely perform or observe any of
      its
      post-Closing obligations as required by Sections 4.3 and 6.3I ; or

    

    E.    The
      failure by the Borrower or a Guarantor to perform or observe any of the
      provisions of Sections 6.10, 7.3, 7.4, 7.5, 7.9, 7.12, 7.14, 7.15 or 7.16
      hereof, and such default continues for twenty (20) days after a Financial
      Officer or the chief executive officer of the Borrower has knowledge of such
      failure or for twenty (20) days after written notice of such failure shall
      have
      been delivered to Borrower by any Bank; or

    

    F.     The
      Borrower or a Guarantor shall default in the performance of or compliance with
      any covenant, obligation or provision contained in this Loan Agreement (other
      than those referred to above in this Section 8.1A., and any such default shall
      not have been remedied within thirty (30) days after written notice of such
      default shall have been delivered to the Borrower; or

    

    G.     If
      any
      material representation or warranty made in writing by or on behalf of the
      Borrower or a Guarantor herein or pursuant hereto or otherwise in connection
      with the Revolving Credit Facility, the Swing Line Credit Subfacility and/or
      the
      Letter of Credit Subfacility shall have been materially false or misleading
      or
      incorrect when made and the Authorized Officer on behalf of the Borrower knew
      or
      should have known of the falsity, misleading nature of or incor-rectness of
      such
      representation or warranty when it was made; or

    

    H.     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 

     

     

    
      
        
        

      

      
        -74-

        
          

        

      

      
        
        

      

    

    

    I.     The
      failure of the Borrower or a Guarantor to pay any of its Funded Debt (other
      than
      Funded Debt with respect to the Revolving Credit Facility), when due or within
      any grace period afforded the Borrower or a Guarantor for paying the same,
      or
      the acceleration of the maturity of any such Funded Debt by the holder thereof,
      other than any such Funded Debt with respect to which the Borrower or a
      Guarantor is contesting in good faith the validity, amount and/or the Borrower
      or a Guarantor's liability therefor and for which adequate reserves have been
      established on the books of the Borrower or a Guarantor in accordance with
      GAAP;
      or

    

    J.     If
      any of
      the Borrower or a Guarantor shall (i) file a petition for an order of relief
      under the federal bankruptcy laws (as in effect on the date of this Loan
      Agreement or as they may be amended from time to time); (ii) admit its inability
      to pay its debts generally as they become due; (iii) become insolvent in that
      its total assets are in the aggregate worth less than all of its liabilities
      or
      it is unable to pay its debts generally as they become due; (iv) make a general
      assignment for the benefit of creditors; (v) file a petition, or admit (by
      answer, default or otherwise) the material allegations of any petition filed
      against it, in bankruptcy under the federal bankruptcy laws (as in effect on
      the
      date of this Loan Agreement or as they may be amended from time to time), or
      under any other law for the relief of debtors, or for the discharge, arrangement
      or compromise of its debts; or (vi) consent to the appointment of a receiver,
      conservator, trustee or liquidator of all or part of its assets; or

    

    K.     If
      a
      petition shall have been filed against the Borrower or a Guarantor in
      proceedings under the federal bankruptcy laws (as in effect on the date of
      this
      Loan Agreement, or as they may be amended from time to time), or under any
      other
      laws for the relief of debtors, or for the discharge, arrangement or compromise
      of its debts, or an order shall be entered by any court of competent
      jurisdiction appointing a receiver, conservator, trustee or liq-uidator of
      all
      or part of the assets of the Borrower or a Guarantor, and such peti-tion or
      order is not dismissed or stayed within sixty (60) con-secutive days after
      entry
      thereof; or 

    

    L.     If
      a
      final uninsured judgment or judgments shall be rendered against any of the
      Borrower or a Guarantor in an aggregate amount exceeding Two Million Dollars
      ($2,000,000) and (i) if, prior to the availability of any execution thereon,
      such judgment(s) shall not have been discharged or execution thereof shall
      not
      have been stayed pending appeal, or if, after the expiration of any such stay,
      such judgment(s) shall not have been dis-charged, or (ii) the Borrower shall
      not
      have established adequate reserves on its books in respect of such final
      uninsurable judgment or judgments; or

    

    M.     In
      the
      event the Borrower experiences a Change in Control without the prior written
      consent of the Banks; or

    

    N.     The
      occurrence of any event of default or default under any of the Loan Documents;
      or

    

    O.     The
      occurrence of any event of default or default under any note, loan agreement,
      security agreement, mortgage or instrument (other than the Loan Documents)
      

     

    
      
        
        

      

      
        -75-

        
          

        

      

      
        
        

      

    

    evidencing
      or securing indebtedness of the Borrower
      which in the aggregate exceeds One Million Dollars ($1,000,000). 

    
Upon
      the
      occurrence of any Event of Default described in clauses J or K of this Section
      8
      with respect to the Borrower, the unpaid principal balance of each of the
      Revolving Credit Notes, and the other Obligations, together with all accrued
      interest thereon, shall automatically become immediately due and payable,
      without presentment, demand, protest or other requirements of any kind, all
      of
      which are hereby expressly waived by the Borrower. Upon the occurrence of any
      other Event of Default referred to in this Section 8, the Agent Bank, on behalf
      of the Banks, subject to the provisions of Section 10.4 hereof, may at any
      time
      at its option, by written notice to the Borrower, declare the unpaid prin-cipal
      balance of and all accrued and unpaid interest on each of the Revolving Credit
      Notes and the other Obligations to be immediately due and payable in full to
      the
      Banks, as appli-cable, without presentment, demand, protest or other
      requirements of any kind, all of which are hereby waived by the
      Borrower.

    

    

    SECTION
      9

    REMEDIES
      UPON DEFAULT, ETC.

    

    

    9.1     Defaults.
      Upon
      the occurrence and during the contin-uation of any Event of Default, the Banks
      may proceed to protect and enforce their rights by an action at law, suit in
      equity or other appropriate proceeding, whether for the specific performance
      of
      any agreement contained herein or in the Revolving Credit Notes or for an
      injunction against a violation of any of the terms hereof or thereof, or in
      aid
      of the exercise of any right, power or remedy granted hereby or thereby or
      by
      law or pur-suant to the other Loan Documents. 

    

    9.2     Offset.
      If any
      Event of Default shall occur and be con-tinuing and regardless of whether or
      not
      the Banks have accelerated the maturity date of the Revolving Credit Notes,
      and/or the other Obligations, each Bank shall have the right then, or at any
      time thereafter, to set off against any and all deposit balances and other
      sums
      and Funded Debt and other property then held or owned by such Bank to or for
      the
      credit or account of the Borrower, all without notice to or demand upon the
      Borrower or any other Person, all such notices and demands being hereby
      expressly waived by the Borrower.

    

    9.3     Rights
      Cumulative.
      All of
      the rights and remedies of the Banks upon the occurrence of an Event of Default
      hereunder shall be cumulative to the greatest extent permitted by law, and
      shall
      be in addition to all those rights and remedies afforded the Banks at law or
      in
      equity.

    

    9.4     Payment
      of Costs and Expenses.
      All of
      the reasonable costs, expenses, damages and liabilities, including, without
      limi-tation, all reasonable attorneys' fees, incurred by and imposed upon any
      Bank with respect to, in connection with the enforcement of this Loan Agreement
      or any other Loan Document or collection of amounts due hereunder or thereunder
      or the proof and allowability of any claim arising under this Loan Agreement
      or
      any other Loan

     

     

    
      
        
        

      

      
        -76-

        
          

        

      

      
        
        
Document,
        whether in bankruptcy or receivership pro-ceedings or otherwise, and in any
        workout or restructuring or in connection with the protection, preservation,
        exercise or enforcement of any of the terms hereof or of any rights hereunder
        or
        under any other Loan Document or in connection with any fore-closure, collection
        or bankruptcy proceedings, in connection with or as a result of any action
        taken
        or omitted to be taken pursuant to this Loan Agreement, the Revolving Credit
        Notes, or the other Loan Documents shall be paid by, and shall be the sole
        responsi-bility of, the Borrower.

    

    

    

    SECTION
      10

    THE
      AGENT BANK

    

    

    10.1     Appointment.
      Each
      Bank hereby irrevocably designates, appoints and authorizes the Agent Bank
      to
      act as the agent bank under this Loan Agreement and to execute and deliver
      or
      accept on behalf of each of the Banks the other Loan Documents. Each Bank hereby
      irrevocably authorizes, and each holder of any Revolving Credit Note by the
      acceptance of such Revolving Credit Note shall be deemed irrevocably to
      authorize, the Agent Bank to take such action on behalf of such Bank and such
      holder under the provisions of this Loan Agreement and the other Loan Documents
      and any other instruments and agreements referred to herein, and to exercise
      such powers and to perform such duties hereunder as are specifically delegated
      to or required of the Agent Bank by the terms hereof, together with such powers
      as are reasonably incidental thereto. The Agent Bank agrees to act as the agent
      bank to the extent provided in this Loan Agree-ment.

    

    10.2     Delegation
      of Duties.
      The
      Agent Bank may per-form any of its duties hereunder by or through agents or
      employees (provided
      such
      delegation is exercised with reasonable care and does not constitute a
      relinquishment of its duties as Agent Bank) and, subject to Sections 10.5,
      10.6
      and 10.7 hereof, shall be entitled to engage and pay for the advice or services
      of any attorneys, accountants or other experts concerning all matters pertaining
      to its duties hereunder and to rely upon any advice so obtained, provided
      reasonable care is used in the selection of the foregoing experts.

    

    10.3     Nature
      of Duties; Independent Credit Investigation.
      The
      Agent Bank shall have no duties or responsibilities except those expressly
      set
      forth in this Loan Agreement and the other Loan Documents and no implied
      covenants, functions, responsibilities, duties, obligations or liabilities
      shall
      be read into this Loan Agreement or shall otherwise exist. The duties of the
      Agent Bank shall be mechanical and administrative in nature and shall include
      the duty to provide to each Bank an executed original of such Bank's Revolving
      Credit Note and an executed original of this Loan Agreement and a copy of the
      other Loan Documents; the Agent Bank shall not have by reason of this Loan
      Agreement a fiduciary or trust relationship in respect of any Bank; and nothing
      in this Loan Agreement, expressed or implied, is intended to or shall be so
      construed as to impose upon the Agent Bank any obligations in respect of this
      Loan Agreement except as expressly set forth herein. Each Bank expressly
      acknowledges (i) that the Agent Bank has not made any representations or
      warranties to it and that no act which the Agent

     

     

    
      
        
        

      

      
        -77-

        
          

        

      

      
        
        
Bank
        hereafter takes, including any review of the affairs of the Borrower, shall
        be
        deemed to constitute any representation or warranty by the Agent Bank to
        any
        Bank; (ii) that it has made and will continue to make, without reliance upon
        the
        Agent Bank, its own independent investigation of the financial condition
        and
        affairs and its own appraisal of the creditworthiness of the Borrower in
        connection with this Loan Agreement and the making and continuance of the
        Loans
        hereunder; and (iii) except as expressly provided herein, that the Agent
        Bank
        shall have no duty or responsibility, either initially or on a continuing
        basis,
        to provide any Bank with any credit or other information with respect thereto,
        whether coming into its possession before the making of any Loan or at any
        time
        or times thereafter.

    

    

    10.4     Actions
      in Discretion of the Agent Bank; In-structions from the Banks.
      The
      Agent Bank agrees, upon the written request of the Majority Banks, to take
      or
      refrain from taking any action of the type specified as being within the Agent
      Bank's rights, powers or discretion herein; provided
      that the
      Agent Bank shall not be required to take any action which exposes the Agent
      Bank
      to legal liability or which is contrary to this Loan Agreement or any other
      Loan
      Document or applicable law. In the absence of a request by the Majority Banks,
      the Agent Bank shall have authority, in its sole discretion, to take or not
      to
      take any such action, unless this Loan Agreement specifically requires the
      consent of the Majority Banks. Any action taken or failure to act pursuant
      to
      such instructions or discretion shall be binding on the Banks, subject to the
      provisions of Section 10.6 hereof. Subject to the provisions of Section 10.6
      hereof, no Bank shall have any right of action whatsoever against the Agent
      Bank
      as a result of the Agent Bank acting or refrain-ing from acting hereunder in
      accordance with the instructions of the Banks or, in the absence of such
      instructions, in the absolute discretion of the Agent Bank. 

    

    The
      consent of the Majority Banks is specifically required before the Agent Bank
      declares the unpaid principal balance and all accrued and unpaid interest on
      the
      Revolving Credit Notes to be immediately due and payable upon the occurrence
      of
      an Event of Default described in Section 8.1 hereof, other than in sections
      H or
      I thereof. The Banks shall have 48 hours, from the Agent Bank's giving of
      written notice of a request for such consent, to notify the Agent Bank as to
      whether such consent is granted or withheld, and any Bank that fails to so
      notify the Agent Bank within such 48 hour period shall be deemed to have
      consented to the action proposed by the Agent Bank.

    

    10.5     Reimbursement
      and Indemnification of the Agent Bank and the Banks by the
      Borrower.
      The
      Borrower unconditionally agrees to pay or reimburse the Agent Bank and hold
      the
      Agent Bank harmless against liability for the payment of all reasonable and
      necessary out-of-pocket costs, expenses and disbursements for which
      reimbursement is customarily obtained, including reasonable fees and expenses
      of
      counsel and consultants incurred by the Agent Bank (i) in connection with the
      preparation, nego-tiation, printing, execution, administration, interpretation
      and performance of this Loan Agreement and the other Loan Documents and (ii)
      relating to any requested amendments, waivers or consents pursuant to the
      provisions hereof. The Borrower unconditionally agrees to pay or reimburse
      the
      Agent Bank and each Bank against all liabilities, obligations, losses, damages,
      penalties, actions, judgments, suits, costs, expenses or disbursements of any
      kind or nature whatsoever which may be imposed on, incurred by or asserted
      against the Agent Bank and/or any Bank, in its capacity as such, in any way
      relating to

     

     

    
      
        
        

      

      
        -78-

        
          

        

      

      
        
        
or
        arising out of this Loan Agreement or any other Loan Document or any action
        taken or omitted by the Agent Bank and/or any Bank hereunder or thereunder;
        pro-vided
        that the
        Borrower shall not be liable for any portion of such liabilities, obligations,
        losses, damages, penalties, actions, judgments, suits, costs, expenses or
        disburse-ments (a) if the same results from the bad faith, gross negligence
        or
        willful misconduct of the Agent Bank or any Bank, or (b) if the Borrower
        was not
        given notice of the subject claim and the opportunity to partici-pate in
        the
        defense thereof, at its expense, or (c) if the same results from a compromise
        or
        settlement agreement entered into without the consent of the Borrower, which
        consent shall not be unreasonably withheld.

    

    

    10.6     Exculpatory
      Provisions.
      Neither
      the Agent Bank nor any of its directors, officers, employees, agents or
      affiliates shall (i) be liable to any Bank for any action taken or omitted
      to be
      taken by it or them hereunder, or in connection herewith includ-ing pursuant
      to
      any other Loan Documents, unless caused by its or their own gross negligence
      or
      willful misconduct, (ii) be respon-sible in any manner to any of the Banks
      for
      the effectiveness, enforceability, genuineness, validity or the due execution
      of
      this Loan Agreement or any other Loan Document or for any recital,
      representation, warranty, document, certificate, report or state-ment herein
      or
      made or furnished under or in connection with this Loan Agreement or any other
      Loan Document, or (iii) be under any obligation to any of the Banks to ascertain
      or to inquire as to the performance or observance of any of the terms, covenants
      or condi-tions hereof or thereof on the part of the Borrower, or the finan-cial
      condition of the Borrower, or the existence or possible existence of any Event
      of Default or Potential Default under the Loan Documents. Neither the Agent
      Bank
      nor any Bank nor any of their respective directors, officers, employees, agents,
      attorneys or affiliates shall be liable to the Borrower or any other Person
      for
      consequential damages resulting from any breach of contract, tort or other
      wrong
      in connection with the negotiation, documentation or administration of the
      Loan
      Documents or the collection of the Obligations.

    

    10.7     Reimbursement
      and Indemnification of the Agent Bank by the Banks.
      Each
      Bank agrees to reimburse and indemnify the Agent Bank (to the extent not
      reimbursed by the Borrower and without limiting the obligation of the Borrower
      to do so) in proportion to its Revolving Credit Facility Pro Rata Share from
      and
      against all liabilities, obligations, losses, damages, penalties, actions,
      judgments, suits, costs, expenses or disburse-ments of any kind or nature
      whatsoever which may be imposed on, incurred by or asserted against the Agent
      Bank, in its capacity as such, in any way relating to or arising out of this
      Loan Agreement or any other Loan Document or any action taken or omitted by
      the
      Agent Bank hereunder or thereunder, provided
      that no
      such reim-bursement shall be required with respect to expenses incurred by
      the
      Agent Bank during the time period through the Closing Date and no Bank shall
      be
      liable for any portion of such liabili-ties, obligations, losses, damages,
      penalties, actions, judgments, suits, costs, expenses or disbursements (i)
      if
      the same relates to or arises out of the Agent Bank's gross negligence or
      willful misconduct, or (ii) if such Bank was not given notice of the subject
      claim and the opportunity to participate in the defense thereof, at its expense,
      or (iii) if the same results from a com-promise and settlement agreement entered
      into without the consent of the Bank, which consent shall not be unreasonably
      withheld.

     

     

    
      
        
        

      

      
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    10.8     Reliance
      by the Agent Bank.
      The
      Agent Bank shall be entitled to rely upon any writing, telegram, telex or
      teletype message, facsimile, resolution, notice, consent, certifi-cate, letter,
      cablegram, statement, order or other document or conversation by telephone
      or
      otherwise believed by it to be genuine and correct and to have been signed,
      sent
      or made by the proper Person or Persons, and upon the advice and opinions of
      counsel and other professional advisers selected by the Agent Bank. The Agent
      Bank shall be fully justified in failing or re-fusing to take any action
      hereunder unless it shall first be indem-nified to its satisfaction by the
      Banks
      in accordance with their respective Revolving Credit Facility Pro Rata Shares
      against any and all liability and expense which may be incurred by it by reason
      of taking or continuing to take any such action.

    

    10.9     Notice
      of Default.
      The
      Agent Bank shall not be deemed to have knowledge or notice of the occurrence
      of
      any Poten-tial Default or Event of Default unless the loan officer of the Agent
      Bank, responsible for the Revolving Credit Facility has actual knowledge of
      such
      Potential Default or Event of Default or the Agent Bank has received written
      notice from a Bank or the Borrower referring to this Loan Agreement,
      specifically describing such Potential Default or Event of Default.

    

    10.10     The
      Banks in Their Individual Capacities.
      With
      respect to its Revolving Loan Commitment, the Agent Bank shall have the same
      rights and powers hereunder as any other Bank and may exercise the same as
      though it were not the Agent Bank, and the term "Banks" shall, unless the
      context otherwise indicates, include the Agent Bank in its individual capacity.
      Each Bank and its Affiliates may, without liability to account, except as
      prohibited herein, make loans to, accept deposits from, discount drafts for,
      act
      as trustee under indentures of, and generally engage in any kind of banking
      or
      trust business with, the Borrower and its Affiliates, in the case of the Agent
      Bank, as though it were not acting as Agent Bank hereunder and in the case
      of
      each Bank, as though such Bank were not a Bank hereunder.

    

    10.11     Holders
      of Revolving Credit Notes.
      The
      Agent Bank may deem and treat any payee of any Re-volving Credit Note as the
      owner thereof for all purposes hereof unless and until written notice of the
      assignment or transfer thereof shall have been filed with the Agent Bank. Any
      request, authority or consent of any Person who at the time of making such
      request or giving such authority or consent is the holder of any Revolving
      Credit Note shall be conclusive and binding on any subsequent holder, transferee
      or assignee of such Revolving Credit Note or Term Note or of any Revolving
      Credit Note issued in exchange therefor.

    

    10.12     Equalization
      of the Banks.
      The
      Banks and the holders of any participations in any Revolving Credit Notes agree
      among themselves that, with respect to all amounts received by any Bank or
      any
      such holder for application to any Revolving Credit Note or under any such
      participation, whether received by voluntary payment, by the exercise of the
      right of setoff or banker's lien, by counterclaim or by any other non-pro rata
      source, equitable adjustment will be made in the manner stated in the following
      sentence so that, in effect, all such excess amounts will be shared ratably
      among the Banks and such holders in proportion to their interests in payments
      under the Revolving Credit Notes. The Banks or any such holder receiving any
      such amount shall purchase for cash from each of the other Banks an interest
      in
      such Bank's

     

     

    
      
        
        

      

      
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Revolving
        Credit Loans in such amount as shall result in a ratable participation by
        the
        Banks and each holder in the aggregate unpaid amount under the Revolving
        Credit
        Notes, provided
        that if
        all or any por-tion of such excess amount is thereafter recovered from the
        Bank
        or the holder making such purchase, such purchase shall be rescinded and
        the
        purchase price restored to the extent of such recovery, to-gether with interest
        or other amounts, if any, required by law (including court order) to be paid
        by
        the Bank or the holder making such purchase.

    

    

    10.13     Successor
      Agent Bank.
      The
      Agent Bank, with the consent of the Borrower which shall not be unreasonably
      withheld, may resign as Agent Bank upon not less than thirty (30) days prior
      written notice given to the Borrower and the other Bank(s). If the Agent Bank
      shall resign under this Loan Agreement, then either (i) the Banks shall appoint
      a suc-cessor Agent Bank, subject to the consent to such succes-sor Agent Bank
      by
      the Borrower, such consent not to be unreasonably withheld, or (ii) if a
      successor Agent Bank shall not be so appointed and approved within the thirty
      (30) day period following the Agent Bank's notice to the Banks of its
      resignation, then the Agent Bank shall appoint, with the consent of the
      Borrower, such consent not to be unreasonably withheld, a successor Agent Bank
      who shall serve as Agent Bank until such time as the Banks appoint, and the
      Borrower consents, which consent shall not be unreasonably with-held, to the
      appointment of a successor Agent Bank. Upon its appointment pursuant to either
      clause (i) or (ii) above, such successor Agent Bank shall succeed to the rights,
      powers and duties of the Agent Bank and the term "Agent Bank" shall mean such
      successor Agent Bank, effective upon its appointment, and the former Agent
      Bank's rights, powers and duties as Agent Bank shall be terminated with-out
      any
      other or further act or deed on the part of such former Agent Bank or any of
      the
      other parties to this Loan Agree-ment. After the resignation of any Agent Bank
      hereunder, the provisions of this Section 10 shall not by reason of such
      resignation be deemed to release the Agent Bank from liability for any actions
      taken or not taken by it while it was the Agent Bank under this Loan
      Agreement.

    

    10.14     Calculations.
      In the
      event an error in computing any amount payable to any Bank is made, the Agent
      Bank, the Borrower and each affected Bank shall, forthwith upon discovery of
      such error, make such adjust-ments as shall be required to correct such error,
      and any compensa-tion therefor will be calculated at the Federal Funds Effective
      Rate.

    

    10.15     Withholding
      Tax.
      A. If
      any Bank is a "foreign corporation, partnership or trust" within the meaning
      of
      the Internal Revenue Code and such Bank claims exemption from, or a reduction
      of, U.S. withholding tax under Sections 1441 or 1442 of the Internal Revenue
      Code, such Bank agrees with and in favor of the Agent Bank, to deliver to the
      Agent Bank:

    

    (i)     if
      such
      Bank claims an exemption from, or a reduction of, withholding tax under a United
      States tax treaty, two properly completed and executed copies of IRS Form 1001
      before the payment of any interest in the first calendar year and before the
      payment of any interest in each third succeeding calendar year during which
      interest may be paid under this Loan Agreement;

     

    (ii)     if
      such
      Bank claims that interest paid under this Loan Agreement is exempt from United
      States withholding tax because it is effectively connected with a United States
      trade or business of such Bank, two properly completed and executed copies
      of
      IRS Form 

     

     

    
      
        
        

      

      
        -81-

        
          

        

      

      
        
        
4224
        before the payment of any interest is due in the first taxable year of such
        Bank
        and in each succeeding taxable year of such Bank during which interest may
        be
        paid under this Loan Agreement; and

    

    

    (iii)     such
      other form or forms as may be required under the Internal Revenue Code or other
      laws of the United States as a condition to exemption from, or reduction of,
      United States withholding tax.

    

    Such
      Bank
      agrees to promptly notify the Agent Bank of any change in circumstances which
      would modify or render invalid any claimed exemption or reduction.

    

    B.     If
      any
      Bank claims exemption from, or reduction of, withholding tax under a United
      States tax treaty by providing IRS Form 1001 and such Bank sells, assigns,
      grants a participation in, or otherwise transfers all or part of the Obligations
      of the Borrower to such Bank, such Bank agrees to notify the Agent Bank of
      the
      percentage amount in which it is no longer the beneficial owner of Obligations
      of the Borrower to such Bank. To the extent of such percentage amount, the
      Agent
      Bank will treat such Bank's IRS Form 1001 as no longer valid.

    

    C.     If
      any
      Bank claiming exemption from United States withholding tax by filing IRS Form
      4224 with the Agent Bank sells, assigns, grants a participation in, or otherwise
      transfers all or part of the Obligations of the Borrower to such Bank, such
      Bank
      agrees to undertake sole responsibility for complying with the withholding
      tax
      requirements imposed by Section 1341 and 1442 of the Internal Revenue
      Code.

    

    D.     If
      any
      Bank is entitled to a reduction in the applicable withholding tax, the Agent
      Bank may withhold from any interest payment to such Bank an amount equivalent
      to
      the applicable withholding tax after taking into account such reduction.
      However, if the forms or other documentation required by subsection A of this
      Section are not delivered to the Agent Bank, then the Agent Bank may withhold
      from any interest payment to such Bank not providing such forms or other
      documentation an amount equivalent to the applicable withholding tax imposed
      by
      Sections 1441 and 1442 of the Internal Revenue Code, without
      reduction.

    

    E.     If
      the
      IRS or any other Governmental Authority of the United States or other
      jurisdiction asserts a claim that the Agent Bank did not properly withhold
      tax
      from amounts paid to or for the account of any Bank (because the appropriate
      form was not delivered or was not properly executed, or because such Bank failed
      to notify the Agent Bank of a change in circumstances which rendered the
      exemption from, or reduction of, withholding tax ineffective, or for any other
      reason) such Bank shall indemnify the Agent Bank fully for all amounts paid,
      directly or indirectly, by the Agent Bank as tax or otherwise, including
      penalties and interest, and including any taxes imposed by any jurisdiction
      on
      the amounts payable to the Agent Bank under this Section 10, together with
      all
      costs and expenses (including attorney costs). The obligation of the Banks
      under
      this subsection shall survive the payment of all Obligations and the resignation
      or replacement of the Agent Bank.

     

     

     

    
      
        
        

      

      
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    10.16     Beneficiaries.
      Except
      as set forth in Sections 10.5 and 10.13 hereof, the pro-vi-sions of this Section
      10 are solely for the benefit of the Agent Bank and the Banks, and the Borrower
      shall not have any right to rely on or enforce any of the provi-sions hereof.
      In
      performing its functions and duties under this Loan Agreement, the Agent Bank
      shall act solely as agent of the Banks and does not assume and shall not be
      deemed to have assumed any obligation toward or relationship of agency or trust
      with or for the Borrower or any other Person.

    

    

    SECTION
      11

    ASSIGNMENTS
      AND PARTICIPATIONS

    

    

    A.    Assignments
      to Eligible Assignees.
      Each
      Bank shall have the right at any time, with the prior consent of the Borrower
      (unless an Event of Default has occurred and is continuing, in which case no
      such consent of the Borrower shall be required) and the Agent Bank, which shall
      not be unreasonably withheld, to sell, assign, transfer or negotiate all or
      any
      part of its Re-volving Loan Commitment and Revolving Credit Loans in a minimum
      amount of Five Million Dollars ($5,000,000) to one or more commercial banks,
      insurance companies, savings and loan associations, savings banks or other
      financial institutions, pen-sion funds or mutual funds or other accredited
      investors ("Eligible Assignees"). In the case of any sale, assignment, transfer
      or nego-tiation of all or part of the Revolving Loan Commitment or Revolv-ing
      Credit Loans authorized under this Section 11, the assignee, transferee or
      recipient shall have, to the extent of such sale, assignment, transfer or
      negotiation, the same rights, benefits and obligations as it would if it were
      a
      Bank hereunder, including, without limi-tation (x) the right to approve or
      disapprove actions which, in accordance with the terms hereof, require the
      approval of the Banks, and (y) the obligation to fund Revolving Credit Loans
      pur-suant to Section 2 hereof. The Bank assigning a portion or all of its
      Revolving Loan Commitment and Revolving Credit Loans pursuant to this Section
      11, or the bank purchasing the interest of the Assigning Bank, shall pay a
      fee
      to the Agent Bank in the amount of Three Thousand Dollars ($3,000).

    

    B.    Participations.
      Notwithstanding Section 11A hereof, each Bank may grant participations in all
      or
      any part of its Revolving Loan Commitment and Revolving Credit Loans to one
      or
      more Eligible Assignees; provided
      that (i)
      any such dis-position shall not, without the consent of the Borrower, require
      the Borrower to file a registration statement with the Securities and Exchange
      Commission or apply to qualify the Revolving Credit Loans or the Revolving
      Credit Notes under the blue sky law of any state; and (ii) the holder of any
      such participation, other than an Affiliate of such Bank, shall not be entitled
      to require the Banks to take or omit to take any action hereunder except action
      directly extending the final maturity of any portion of the principal amount
      of
      or interest on a Revolving Credit Loan allocated to such participation or a
      reduction of the principal amount of or the rate of interest pay-able on the
      Revolving Credit Loans allocated to such participation.

    

    C.     Assignments
      to Affiliates.
      Notwithstanding the foregoing provisions of this Section 11, each Bank may
      at
      any time sell, assign, transfer, or negotiate all or any part of its Re-volving
      Loan Commitment and Revolving Credit Loans to any Affiliate of such Bank;

     

     

    
      
        
        

      

      
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provided
        that an
        Affiliate to whom such disposition has been made shall not be considered
        a
        "Bank" for purposes of this Loan Agreement other than for purposes of Section
        9.2 hereof; provided
        further
        that the
        Borrower shall not incur any additional expenses solely as a result of such
        sale, assignment, transfer or negotiation.

    

    

    D.     No
      Release of Obligations.
      No Bank
      shall, as between the Borrower and such Bank, be relieved of any of its
      obli-gations hereunder as a result of any granting of participations in all
      or
      any part of its Revolving Loan Commitment or Revolving Credit Loans. Each Bank
      shall, as between the Borrower and such Bank, be relieved of its obligations
      hereunder as a result of any sale, assignment, transfer or negotiation of all
      or
      any part of its Revolving Loan Commitment and Revolving Credit Loans made in
      accordance with Section 11.A hereof.

    

    

    SECTION
      12

    INDEMNITY

    

    

    The
      Borrower shall indemnify and hold harmless each Bank and its successors,
      assigns, agents and employees from and against any and all claims, actions,
      suits, proceedings, costs, expenses, dam-ages, fines, penalties and liabilities,
      including, without limita-tion, reasonable attorneys' fees and costs, arising
      out of, con-nected with or resulting from the operation of the business of
      the
      Borrower.

    

    

    SECTION
      13

    INCREASED
      COSTS; TAXES; CAPITAL ADEQUACY

    

    

    13.1     Compensation
      for Increased Costs and Taxes.
      In the
      event that the Banks shall determine in good faith (which determination shall,
      absent manifest or demonstrable error, be final and conclu-sive and binding
      upon
      both the Borrower and the Banks) that any law, treaty or governmental rule,
      regulation or order, or any change therein or in the interpretation,
      administration or appli-cation thereof (including the introduction of any new
      law, treaty or governmental rule, regulation or order), or any determination
      of
      a court or governmental authority, in each case that becomes effec-tive after
      the Closing Date, or compliance by the Banks with any guideline, request or
      directive issued or made after the date hereof by any central bank or other
      governmental or quasi-govern-mental authority, and which has the force of law
      and first becomes effective after the Closing Date in all cases of general
      applicability to the banking industry:

    

    (i)     subjects
      any Bank (or its applicable lending office) to any additional Covered Tax with
      respect to this Loan Agreement or any of the Revolving Credit Loans or the
      Swing
      Line Loans or any of its other obligations hereunder, or changes the basis
      of

     

     

    
      
        
        

      

      
        -84-

        
          

        

      

      
        
        
taxation
        of payments to such Bank (or its applicable lending office) of principal,
        interest, fees or any other amount payable hereunder (but not changes in
        Excluded Taxes);

    

    

    (ii)     imposes,
      modifies or holds applicable any ad-ditional reserve (including without
      limitation any marginal, emer-gency, supplemental, special or other reserve),
      special deposit, compulsory loan, FDIC insurance or similar requirement against
      assets held by, or deposits or other liabilities in or for the account of,
      or
      advances or loans by, or other credit extended by, or any other acquisition
      of
      funds by, any Bank (or its applica-ble lending office) (other than any such
      reserve or other require-ments with respect to Eurodollar Loans that are
      reflected in the definition of the Adjusted LIBOR Rate); or

    

    (iii)     imposes
      any other condition on or affecting any Bank (or its applicable lending office)
      or its obligations hereunder or the London interbank market, other than with
      respect to Taxes;

    

    and
      the
      result of any of the foregoing is to increase the cost to any Bank of agreeing
      to make, making or maintaining Revolving Credit Loans and Swing Line Loans
      hereunder or to reduce any amount received or receivable by any Bank (or its
      applicable lending office) with respect thereto, then, in any such case, the
      Borrower shall promptly pay to such Bank, upon demand, such additional amount
      or
      amounts (in the form of an increased rate of, or a dif-ferent method of
      calculating, interest as such Bank in its reason-able discretion shall
      determine) as may be necessary to compensate such Bank on an after-tax basis
      for
      any such increased cost or reduction in amounts received or receivable
      hereunder; provided
      that any
      increased cost arising as a result of any of the foregoing other than in respect
      of Taxes shall apply only to Eurodollar Loans to the extent the same bear
      interest by reference to the Adjusted LIBOR Rate. The Bank seeking reimbursement
      for such amounts from the Borrower shall deliver to the Borrower a written
      statement setting forth in reasonable detail the basis for calculating the
      additional amounts owed to such Bank under this Section 13.1, which statement
      shall be conclusive and binding upon both parties hereto absent manifest or
      demonstrable error.

    

    13.2     Withholding
      of Taxes.

    

    A.     Payments
      to Be Free and Clear.
      All
      sums payable by the Borrower under this Loan Agreement and the other Loan
      Documents to or for the benefit of any Bank or any Person who ac-quires any
      interest in the Revolving Credit Loans pursuant to the provisions hereof shall
      be paid free and clear of and (except to the extent required by law) without
      any
      deduction or withholding on account of any Covered Tax imposed, levied,
      collected, withheld or assessed by or within the United States of America or
      any
      political subdivision in or of the United States of America or any other
      jurisdiction from or to which a payment is made by or on behalf of the Borrower
      or by any federation or organization of which the United States of America
      or
      any such jurisdiction is a member at the time of payment.

    

    B.     Grossing-up
      of Payments.
      If the
      Borrower or any other Person is required by law to make any deduction or
      withhold-ing on account of any Covered Tax from any sum paid or payable by
      the
      Borrower to any Bank under any of the Loan Documents:

     

     

    
      
        
        

      

      
        -85-

        
          

        

      

      
        
        

      

    

    

    (i)     The
      Borrower shall notify such Bank of any such requirement or any change in any
      such requirement as soon as the Borrower becomes aware of it;

    

    (ii)     The
      Borrower shall pay any such Tax before the date on which penalties attach
      thereto, such payment to be made (if the liability to pay is imposed on the
      Borrower) for their own account or (if that liability is imposed on such Bank)
      on behalf of and in the name of such Bank;

    

    (iii)     The
      sum
      payable by the Borrower in respect of which the relevant deduction, withholding
      or payment is required shall be increased to the extent necessary to ensure
      that, after the making of that deduction, withholding or payment, such Bank
      receives on the due date and retains (free from any liability in respect of
      any
      such deduction, withholding or payment) a net sum equal to what it would have
      received and so retained had no such deduction, withholding or payment in
      respect of Covered Taxes been required or made; and

    

    (iv)     Within
      thirty (30) days after paying any sum from which it is required by law to make
      any deduction or with-holding, and within thirty (30) days after the due date
      of
      payment of any Tax which it is required to pay by clause (ii) above, the
      Borrower shall deliver to such Bank evidence satisfactory to such Bank of such
      deduction, withholding or payment and of the remit thereof to the relevant
      taxing or other authority;

    

    provided
      that no
      such additional amount shall be required to be paid to any Bank under clause
      (iii) above except to the extent that any change after the date hereof in any
      such requirement for a deduction, withholding or payment as is mentioned therein
      shall result in an increase in the rate of such deduction, withholding or
      payment from that in effect at the date of this Loan Agreement in respect of
      payments to such Bank.

    

    C.     Tax
      Refund.
      If the
      Borrower determines in good faith that a reasonable basis exists for contesting
      a Covered Tax, the relevant Bank or Tax Transferee, as applicable, shall
      cooperate with the Borrower in challenging such Tax at the Borrower's expense
      if
      requested by the Borrower (it being understood and agreed that no Bank shall
      have any obligation to contest, or any responsi-bility for contesting, any
      Tax).
      If any Tax Transferee or any Bank, as applicable, receives a refund (whether
      by
      way of a direct payment or by offset of any Covered Tax for which a payment
      has
      been made pursuant to this Section 13) the amount of such refund (together
      with
      any interest received thereon) shall be paid to the Borrower to the extent
      payment has been made in full pursuant to this Section 13.

    

    13.3     Capital
      Adequacy Adjustment.
      If any
      Bank shall have determined in good faith that the adoption, effectiveness,
      phase-in or applicability of any law, rule or regulation (or any provision
      thereof) regarding capital adequacy, or any change therein or in the
      interpretation or administration thereof by any governmental authority, central
      bank or comparable agency charged with the interpretation or administration
      thereof, or compliance by any Bank (or its applicable lending office) with
      any
      guideline, request or directive regarding capital adequacy of any such
      governmental authority, central bank or comparable agency in all cases of
      general

     

     

    
      
        
        

      

      
        -86-

        
          

        

      

      
        
        
applicability
        to the banking industry, and which has the force of law and first becomes
        effective after the Closing Date, has or will have the effect of reducing
        the
        rate of return on the capital of such Bank or any corporation controlling
        such
        Bank as a consequence of, or with reference to, such Bank's Revolving Credit
        Loans or other obligations hereunder to a level below that which such Bank
        or
        such controlling corporation would have achieved but for such adoption,
        effectiveness, phase-in, applicability, change or compliance (taking into
        consideration the policies of such Bank or such controlling corporation with
        regard to capital adequacy), then from time to time, within ten (10) Business
        Days after demand by such Bank, the Borrower shall pay to such Bank such
        additional amount or amounts as will compensate such Bank or such controlling
        corporation on an after-tax basis for such reduction as and when incurred.
        Each
        Bank, upon determining in good faith that any additional amounts will be
        payable
        pursuant to this Section 13.3, will give prompt written notice thereof to
        the
        Borrower, which notice shall set forth the basis of the calculation of such
        additional amounts, although the failure to give any such notice shall not
        release or diminish any of the Borrower's obligations to pay additional amounts
        under this Section 13.3.

    

    

    13.4     Banks'
      Obligation to Mitigate.
      Each
      Bank agrees that, as promptly as practicable after the officer of such Bank
      responsible for administering the Revolving Credit Loans under this Loan
      Agreement becomes aware of the occurrence of an event or the existence of a
      condition that would entitle such Bank to receive payments under Section 13
      hereof, it will, to the extent not inconsistent with its internal policies,
      use
      rea-sonable efforts (i) to make, fund or maintain its Revolving Credit Loans
      through another lending office of such Bank, or (ii) take such other rea-sonable
      measures, if as a result thereof, the additional amounts which would otherwise
      be required to be paid to such Bank pursuant to Section 13 hereof would be
      materially reduced and if, as determined by such Bank in its sole discretion,
      the making, funding or maintaining of such Revolving Credit Loans through such
      other lending office or in accordance with such other measures, as the case
      may
      be, would not otherwise materially adversely affect such Revolving Credit Loans
      or the interests of such Bank; provided
      that
      such Bank will not be obligated to utilize such other lending office pursuant
      to
      this Section 13.3 unless the Borrower agrees to pay all expenses incurred by
      such Bank in utilizing such other lending office. A certificate as to the amount
      of any such expenses payable by the Borrower pur-suant to this Section 13.4
      (setting forth in reasonable detail the basis for requesting such amount)
      submitted by any Bank to the Borrower shall be conclusive absent manifest or
      demonstrable error.

    

    SECTION
      14

    NOTICES

    

    All
      notices required or permitted to be given hereunder shall be given in writing
      and shall be personally delivered or sent by facsimile transmission or by
      registered or certified United States mail, return receipt requested, postage
      prepaid, addressed as follows (or to such other address as to which any party
      hereto shall have given the other parties written notice):

     

     

    
      
        
        

      

      
        -87-

        
          

        

      

      
        
        

      

    

     

    

      
        	 	 	 
	
                If
                  to the Borrower:

              	 	
                SYPRIS
                  SOLUTIONS, INC.

              
	 	 	
                101
                  Bullitt Lane, Suite 450

              
	 	 	
                Louisville,
                  KY 40222

              
	 	 	
                Attn:
                  Mr. Anthony C. Allen

              
	 	 	 
	
                If
                  to Guarantors:

              	 	
                c/o
                  SYPRIS SOLUTIONS, INC.

              
	 	 	
                101
                  Bullitt Lane, Suite 450

              
	 	 	
                Louisville,
                  KY 40222

              
	 	 	
                Attn:
                  Mr. Anthony C. Allen

              
	 	 	 
	 	 	 
	
                If
                  to the 

              	 	
                JP
                  MORGAN CHASE BANK, N.A.

              
	
                Agent
                  Bank:

              	 	
                416
                  West Jefferson Street

              
	 	 	
                Louisville,
                  KY 40202

              
	 	 	
                Attn:
                  J.D. Baker

              
	 	 	 
	
                If
                  to the 

              	 	
                LASALLE
                  BANK, NATIONAL ASSOCIATION

              
	
                Documentation

              	 	
                135
                  South LaSalle Street

              
	
                Agent:

              	 	
                Chicago,
                  Illinois 60603

              
	 	 	
                Attn:
                  Anne Eharoshe, Vice President

              
	 	 	 
	 	 	 
	
                If
                  to the Banks:

              	 	
                To
                  the Banks at the respective

              
	 	 	
                address
                  of each Bank

              
	 	 	
                Set
                  forth in Schedule
                  1.1
                  hereof

              
	 	 	 

      

    

     

        All
      notices
      hereunder shall be deemed given upon the earlier of (i) actual delivery in
      person or by facsimile transmission, or (ii) two (2) Business Days after having
      been deposited in the United States mails, in accordance with the foregoing.
      Except where the Borrower is expressly required by the provisions of this Loan
      Agreement to give notice to all of the Banks, it shall be sufficient whenever
      the Guarantors or the Borrower are required to give notice hereunder for the
      Guarantors or the Borrower to give such notice solely to the Agent
      Bank.

    

    

    SECTION
      15

    MISCELLANEOUS

    

    

    15.1     Ratable
      Sharing.
      Each
      Bank agrees with the other Bank that (i) with respect to all amounts received
      by
      it which are ap-plicable to the payment of principal of or interest on the
      Revolv-ing Credit Loans and the Revolving Credit Facility Commitment Fees,
      including, without limitation, all amounts re-ceived by such Bank pursuant
      to
      the exercise of the right of setoff pursuant to Section 9.2 hereof, equitable
      adjustment will be made so that, in effect, all such amounts will be shared
      among the Banks proportionately in accordance with their respective Revolving
      Credit Facility Pro Rata Shares, whether received by voluntary payment, by
      the
      exer-

     

     

    
      
        
        

      

      
        -88-

        
          

        

      

      
        
        
cise
        of
        the right of set-off or banker's lien, by counterclaim or cross action or
        by the
        enforcement of any or all of the Obliga-tions, and (ii) if any of them shall
        exercise any right of counter-claim, set-off, banker's lien or similar right
        with respect to amounts owed by the Borrower hereunder, that Bank shall
        apportion the amount recovered as a result of the exercise of such right
        pro
        rata in accordance with (a) all amounts outstanding at such time owed by
        the
        Borrower to it hereunder with respect to the Revolving Credit Loans, and
        (b) all
        amounts otherwise owed by the Borrower to it, and (iii) if any of them shall
        thereby through the exercise of any right of counterclaim, set-off, bank-er's
        lien or otherwise, or as adequate protection of a deposit treated as cash
        collateral under the Bankruptcy Code, receive pay-ment or reduction of a
        proportion of the aggregate amount of prin-cipal and interest due with respect
        to the Revolving Credit Loans made by that Bank or any participation therein,
        or
        any other amount payable hereunder (collectively, the "Aggregate Amount Due"
        to
        such Bank), which is greater than the proportion received by any other Bank
        in
        respect of the Aggregate Amount Due to such other Bank, then the Bank receiving
        such proportionately greater payment shall (y) notify each other Bank and
        the
        Agent Bank of such receipt and (z) purchase participations (which it shall
        be
        deemed to have done simultaneously upon the receipt of such payment) in the
        Aggregate Amounts Due to the other Banks so that all recoveries of Aggregate
        Amounts Due shall be shared by the Banks in proportion to their respective
        Revolving Credit Facility Pro Rata Shares; provided
        that if
        all or part of such proportionately greater payment received by such purchasing
        Bank is thereafter recovered from such Bank, those purchases shall be rescinded
        and the purchase prices paid for such participations shall be returned to
        that
        Bank to the extent of such recovery, but without interest. The Borrower
        expressly consents to the foregoing arrangements and agrees that any participant
        in respect of any Revolving Credit Loan may exercise any and all rights of
        banker's lien, set-off or counterclaim with respect to any and all monies
        owing
        by the Borrower to that par-ticipant as fully as if that participant were
        a Bank
        in the amount of such participation held by that participant.

    

    

    15.2     Waiver.
      No
      course of dealing in respect of, nor any omission or delay in the exercise
      of,
      any right, power, remedy or privilege by the Banks shall operate as a wavier
      thereof, nor shall any right, power, remedy or privilege of the Banks be
      exclusive of any other right, power, remedy or privilege referred to herein
      or
      in any related document or now or hereafter available at law, in equity, in
      bankruptcy, by statute or otherwise. Each such right, power, remedy or privilege
      may be exercised by the Banks, either independently or concurrently with others,
      and as often and in such order as the Banks may deem expedient. No waiver or
      consent granted by the Banks in respect of this Loan Agreement or the other
      Loan
      Documents shall be binding upon the Banks unless specifi-cally granted in
      writing by a duly authorized officer of the Agent Bank, which writing shall
      be
      strictly construed.

    

    15.3     Survival
      of Representations and Warranties.
      All
      repre-sentations, warranties and covenants of the Borrower and each Bank
      contained herein or made pursuant hereto shall survive the execu-tion and
      delivery of this Loan Agreement and shall continue throughout the term hereof.
      Further, the indemnities set forth in Section 12 hereof shall survive the
      payment of the Revolving Credit Notes and the other Obligations to the Banks,
      as
      applicable.

     

     

    
      
        
        

      

      
        -89-

        
          

        

      

      
        
        

      

    

    

    15.4     Invalidity.
      If any
      part of this Loan Agreement shall be adjudged invalid or unenforceable, whether
      in general or in any particular circumstance, then such partial invalidity
      or
      enforcea-bility shall not cause the remainder of this Loan Agreement to be
      or to
      become invalid or unenforceable, and if a provision hereof is held invalid
      or
      unenforceable in one or more of its applications, the parties hereto agree
      that
      said provision shall remain in effect in all valid applications that are
      severable from the invalid or unenforceable application or
      applications.

    

    15.5     Assignment.
      This
      Loan Agreement may not be assigned by the Borrower without the prior written
      consent of the Banks. This Loan Agreement may be assigned by the Banks as
      provided in Section 11 hereof. All rights of the Banks hereunder shall inure
      to
      the benefit of their respective successors and assigns, and all obli-gations,
      covenants and agreements of the Borrower shall bind its permitted successors
      and
      assigns, if any.

    

    15.6     Governing
      Law.
      This
      Loan Agreement and the rights and obligations of the parties hereunder shall,
      in
      all respects, be governed by and construed in accordance with the laws of the
      Commonwealth of Kentucky.

    

    15.7     Section
      Headings.
      The
      section headings of this Loan Agreement are inserted herein solely for
      convenience of reference and shall not affect the construction or interpretation
      of the provisions hereof.

    

    15.8     Entire
      Agreement.
      This
      Loan Agreement and the other Loan Documents constitute the entire agreement
      between the Borrower and the Banks with respect to the subject matter
      hereof.

    

    15.9     Time
      of the Essence.
      Time
      shall be of the essence in the payment and performance of all of the Borrower's
      obligations under this Loan Agreement, the Revolving Credit Note and the other
      Loan Documents to which the Borrower are party.

    

    15.10     Modifications.
      This
      Loan Agreement may be modified only in writing executed by the Borrower and
      the
      Banks. Neither this Loan Agreement nor the other Loan Documents nor any terms
      hereof or thereof may be changed, waived, discharged or terminated unless such
      change, waiver, discharge or termination is in writing signed by at least two
      of
      the Banks holding in the aggregate at least sixty percent (60%) of the Revolving
      Credit Facility Pro Rata Shares (the "Majority Banks"); provided,
      however,
      that no
      such change, waiver, discharge or termination, shall, without the consent of
      each Bank, (i) extend the Revolving Loan Commitment Termination Date or the
      final maturity of a Revolving Credit Note, or extend the time of payment of
      interest, principal or fees payable under this Loan Agreement, or reduce the
      rate of interest of a Revolving Credit Note, or reduce the principal amount
      of a
      Revolving Credit Note (except as permitted by Section 2.4C), or increase the
      aggregate amount of the Revolving Loan Commitments above the maximum amount
      provided for in Section 2.1 hereof, or increase any Bank's commitment to
      disburse its Revolving Loan Pro Rata Share of Revolving Credit Loans requested
      by the Borrower as set forth in Section 2.1 hereof, or (ii) amend, modify or
      waive any provisions of this Section 15.10 (Modifications), Section 8 (Events
      of
      Default; Acceleration),

     

     

    
      
        
        

      

      
        -90-

        
          

        

      

      
        
        
Section
        9
        (Remedies Upon Default, Etc.), Section 10 (The Agent Bank), Section 15.1
        (Ratable Sharing), or (iii) amend, modify or waive any provision requiring
        consent of all Banks, or (iv) reduce the percentages specified in this Section
        15.10 or (v) consent to the assignment or transfer by the Borrower of any
        of its
        rights and obligations under this Loan Agreement. 

    

    

    15.11     Submission
      to Jurisdiction, Etc.
      The
      Borrower hereby irrevocably agrees that any legal action, suit or proceeding
      against the Borrower with respect to the obligations and liabili-ties of the
      Borrower hereunder or any other matter under or arising out of or in connection
      with this Loan Agreement, the Revolving Credit Notes, or any other Loan Document
      or for recognition or enforcement of any judgment rendered in any such action,
      suit or proceeding may be brought in the United States District Court of the
      Western District of Kentucky at Louisville, Kentucky or in the Jefferson County,
      Kentucky Circuit Court, as the Banks may elect, and, by execution and delivery
      of this Loan Agreement, the Borrower hereby irrevocably accepts and submits
      to
      the non-exclusive jurisdiction of each of the aforesaid courts in personam
      generally and uncondi-tionally with respect to any such action, suit or
      proceeding in-volving the Borrower and in respect of the Borrower's property.
      The Borrower further agrees that final judgment against the Borrower in any
      action, suit or proceeding referred to herein shall be conclusive after all
      appeals have been exhausted or waived by the Borrower, and may thereafter be
      enforced in any other jurisdiction, within or outside the United States of
      America, by suit on the judg-ment, a certified or exemplified copy of which
      shall be conclusive evidence of the fact and of the amount of the Borrower's
      obliga-tions and liabilities. The Borrower further irrevocably consents and
      agrees to the service of any and all legal process, summons, notices and
      documents out of any of the aforesaid courts in any such action, suit or
      proceeding by mailing copies thereof by serving copies thereof upon any
      statutory agent for service of process of the Borrower. The Borrower agrees
      that
      service upon the Borrower as provided for herein shall constitute valid and
      effective personal service upon the Borrower and that the failure of any
      statutory agent to give any notice of such service to the Borrower shall not
      impair or affect in any way the validity of such service or any judgment
      rendered in any action or proceeding based thereon. Noth-ing herein shall,
      or
      shall be construed so as to, limit the right of the Banks to bring actions,
      suits or proceedings with respect to the obligations and liabilities of the
      Borrower under, or any other matter arising out of or in connection with, this
      Loan Agreement, the Revolving Credit Notes, the Negative Pledge Agreement and/or
      the other Loan Documents, or for recognition or enforcement of any judgment
      rendered in any such action, suit or proceeding, in the courts of whatever
      jurisdiction in which property of the Borrower may be found or as otherwise
      shall to the Banks seem appropriate, or to affect the right to service of
      process in any jurisdiction in any manner permitted by law. In addition, the
      Borrower hereby irrevoc-ably and unconditionally waives any objection which
      the
      Borrower may now or hereafter have to the laying of venue of any of the
      aforesaid actions, suits or proceedings arising out of or in con-nection with
      this Loan Agreement, the Revolving Credit Notes, the Negative Pledge Agreement
      and/or the other Loan Documents brought in the Circuit Court of Jefferson
      County, Kentucky or in the United States Dis-trict Court for the Western
      District of Kentucky at Louisville, Kentucky, and hereby fur-ther irrevocably
      and unconditionally waives and agrees not to plead or claim that any such
      action, suit or proceeding brought in either such court has been brought in
      an
      inconvenient forum.

    

    15.12     USA
      Patriot Act Notification.
      The
      following notification is provided to the

     

     

    
      
        
        

      

      
        -91-

        
          

        

      

      
        
        

      

    

     

    Borrower
      pursuant to Section 326 of the USA Patriot Act of 2001, 31 U.S.C. Section
      5318:

    

    IMPORTANT
      INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help the government
      fight the funding of terrorism and money laundering activities, Federal law
      requires all financial institutions to obtain, verify, and record information
      that identifies each person or entity that opens an account, including any
      deposit account, treasury management account, loan, other extension of credit,
      or other financial services product. What this means for Borrower: When Borrower
      opens an account, if Borrower is an individual Bank will ask for Borrower's
      name, taxpayer identification number, residential address, date of birth, and
      other information that will allow Bank to identify Borrower, and if Borrower
      is
      not an individual Bank will ask for Borrower's name, taxpayer identification
      number, business address, and other information that will allow Bank to identify
      Borrower. Bank may also ask, if Borrower is an individual to see Borrower's
      driver’s license or other identifying documents, and if Borrower is not an
      individual to see Borrower's legal organizational documents or other identifying
      documents.

    

    

    
      
        
        

      

      
        -92-

        
          

        

      

      
        
        

        
          

        

      

    

    IN
      WITNESS WHEREOF, the Agent Bank, the Documentation Agent, each Bank, the
      Borrower and each Guarantor has caused this Loan Agreement to be duly executed
      as of the day and year first above written.

    

    JP
      MORGAN
      CHASE BANK, N.A.

    as
      Administrative Agent, Syndications Agent and Collateral Agent (the "Agent Bank")
      

    

    

    By     
      J.
      Duffy
      Baker                                  

    Senior
      Vice President

    

    

    LASALLE
      BANK, NATIONAL ASSOCIATION, as Documentation Agent 

    

    

    By  
      /s/ Ann
      Eharoshe                                

    Anne
      Eharoshe

    Vice
      President

     

     

    
      
        [Signature
          Page to Amended and Restated Loan Agreement]

        

         

        -93

      

      
        
        

        
          

        

      

      
        
        

      

    

    JP
      MORGAN
      CHASE BANK, N.A. (successor by merger to BANK ONE, NA with main office in
      Chicago, Illinois), as a Bank 

    

    By 
      /s/ J. Duffy
      Baker                                                    

           J.
      Duffy
      Baker

    Senior
      Vice President

    

    

    

    LASALLE
      BANK NATIONAL ASSOCIATION

    as
      a Bank

    

    By
      /s/
      Ann
      Eharoshe                                                        

      
    Anne
      Eharoshe

    Vice
      President

    

    

    

    NATIONAL
      CITY BANK

    as
      a
      Bank

    

    By 
      /s/ Mark
      Douglas                                                        

    Mark
      Douglas

                   
      Senior Vice President

             Officer

    
      
        [Signature
          Page to Amended and Restated Loan Agreement]

        

        
        

      

      
        -94-

        
          

        

      

      
        
        

      

    

    SYPRIS
      SOLUTIONS, INC.

    (the
      "Borrower")

    

    By 
      /s/ Anthony C.
      Allen                            

    Anthony
      C. Allen

    Vice
      President and Treasurer

     

    

    SYPRIS
      TEST & MEASUREMENT, INC. a Delaware corporation ("ST&M")

    (as
      a
      "Guarantor")

    

    By 
      /s/ Anthony C.
      Allen                          

    Anthony
      C. Allen

    Treasurer
      and Assistant Secretary

    

    

    

    SYPRIS
      TECHNOLOGIES, INC.

    a
      Delaware corporation ("ST")

    (as
      a
      "Guarantor")

    

    By 
      /s/ Anthony C.
      Allen                          

    Anthony
      C. Allen

            
      Treasurer and Assistant Secretary

    

    

    SYPRIS
      ELECTRONICS, LLC

    a
      Delaware limited liability

    company
      ("SE")

    (as
      a
      "Guarantor")

    

    By 
      /s/ Anthony C.
      Allen                          

    Anthony
      C. Allen

        Treasurer
      and
      Assistant Secretary

     

     

    
 

    
      
        
          [Signature
            Page to Amended and Restated Loan Agreement]

          

        

      

      
        -95

        
          

        

      

      
        
        

      

    

    

    SYPRIS
      DATA SYSTEMS, INC.

    a
      Delaware corporation ("SDS")

    (as
      a
      "Guarantor")

     

    By 
      /s/ Anthony C.
      Allen                          

    Anthony
      C. Allen

    Treasurer
      and Assistant Secretary

    

    

    SYPRIS
      TECHNOLOGIES MARION, LLC

    a
      Delaware limited liability company

    ("Marion")
      (as a "Guarantor")

    

    By 
      /s/ Anthony C.
      Allen                          

    Anthony
      C. Allen

    Treasurer
      and Assistant Secretary

    

    

    SYPRIS
      TECHNOLOGIES KENTON, INC.

    a
      Delaware corporation ("STK")

    (as
      a
      "Guarantor")

    

    By 
      /s/ Anthony C.
      Allen                          

    Anthony
      C. Allen

        Treasurer
      and
      Assistant Secretary

    

    

    SYPRIS
      TECHNOLOGIES

    MEXICAN
      HOLDINGS, LLC

    a
      Delaware limited liability company

    ("STMH")
      (as a "Guarantor")

    By 
      /s/ Anthony C.
      Allen                         
  

      
      Anthony  C. Allen

      Treasurer
      and Assistant
      Secretary

    

    

    
      
        
          [Signature
            Page to Amended and Restated Loan Agreement]

           

        

        
        

      

      
        -96-

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