FIRST AMENDMENT TO NOTE PURCHASE AGREEMENT

Exhibit 10.3

SYPRIS SOLUTIONS, INC.

FIRST AMENDMENT

TO NOTE PURCHASE AGREEMENT

$7,500,000 4.73% Senior Notes, Series A

Due June 30, 2009

$27,500,000 5.35% Senior Notes, Series B

Due June 30, 2011

$20,000,000 5.78% Senior Notes, Series C

Due June 30, 2014

Dated as of August 3, 2005

To the Holders of the Senior Notes

of Sypris Solutions, Inc.

Named in the Attached Schedule I

Ladies and Gentlemen:

Reference is made to the Note Purchase Agreement dated as of June 1, 2004 (the “Note Agreement”) among Sypris Solutions, Inc., a Delaware corporation (the “Company”), and each of the Purchasers named in Schedule A thereto pursuant to which the Company issued $7,500,000 aggregate principal amount of its 4.73% Senior Notes, Series A, due June 30, 2009, $27,500,000 aggregate principal amount of its 5.35% Senior Notes, Series B, due June 30, 2011 and $20,000,000 aggregate principal amount of its 5.78% Senior Notes, Series C, due June 30, 2014 (together, the “Notes”). You are referred to herein individually as a “Holder” and collectively as the “Holders.” Capitalized terms used and not otherwise defined in this First Amendment to Note Purchase Agreement (this “Amendment”) shall have the meanings ascribed to them in the Note Agreement, as amended hereby.

The Company has requested the amendment of Section 10.1 (Consolidated Net Debt) of the Note Agreement to better conform to its operations and its bank facility. The Holders have agreed to modify the Note Agreement on the terms and conditions set forth herein.

In consideration of the premises and for good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Company and the Holders agree as follows:

1. AMENDMENTS TO NOTE AGREEMENT

1.1. Amendment of Section 10.1 . Section 10.1 of the Note Agreement is amended to read in its entirety as follows:

“10.1 Consolidated Net Debt; Fixed Charge Coverage Ratio.

(a) The Company will not permit the ratio of Consolidated Net Debt to Consolidated EBITDA (for the Company’s then most recently completed four fiscal quarters) as of the last day of any fiscal quarter to be greater than the following:

(i) 3.25 to 1.00 for the period of four fiscal quarters ending June 30, 2005;

(ii) 3.75 to 1.00 for the period of four fiscal quarters ending September 30, 2005;

(iii) 3.25 to 1.00 for the period of four fiscal quarters ending December 31, 2005; and

(iv) 3.00 to 1.00 for the period of four fiscal quarters ending March 31, 2006 and for the period of four fiscal quarters ending on each fiscal quarter thereafter.

If, during the period for which Consolidated EBITDA is being calculated, the Company or a Subsidiary has (i) acquired one or more Persons (or the assets thereof) or (ii) disposed of one or more Subsidiaries (or substantially all of the assets thereof), Consolidated EBITDA shall be calculated on a pro forma basis (including adjustments to reflect consolidation savings) as if all of such acquisitions and all such dispositions had occurred on the first day of such period.”

(b) The Company shall not permit the Fixed Charge Coverage Ratio for any fiscal quarter to fall below the following applicable ratio calculated as of the end of the applicable fiscal quarter set forth below:

2

1.2. Schedule B . The following defined terms are added to Schedule B:

“EBIT” means, as the end of any fiscal quarter, the sum of the amounts for such period of the Company’s (i) Consolidated Net Income, (ii) Consolidated Interest Expense and (iii) provisions for taxes based on income for the previous four fiscal quarters, determined on a consolidated basis in accordance with GAAP.

“Fixed Charge Coverage Ratio” means, as of any date, the ratio of (i) the sum of the Company’s EBIT plus Operating Lease Rentals to (ii) the sum of the Company’s Consolidated Interest Expense, plus Operating Lease Rentals.

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

2. REAFFIRMATION; REPRES