THIRD AMENDMENT TO NOTE PURCHASE AGREEMENT

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:

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.

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 ”).

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).

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.

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.

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

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

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.

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.

(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:

(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.

(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

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.

(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.

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.

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.

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.

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.

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

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.

(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,

(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.

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

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.

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;

(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;  

(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.

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.

“ 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).

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.

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

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).

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.

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

 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.

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.

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.

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

THE GUARDIAN LIFE INSURANCE COMPANY OF AMERICA

Name: Ellen I. Whittaker

Title: Director, Fixed Income Investments

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

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

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

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.

SYPRIS ELECTRONICS, LLC

SYPRIS DATA SYSTEMS, INC.

SYPRIS TECHNOLOGIES MARION, LLC

SYPRIS TECHNOLOGIES KENTON, INC.

SYPRIS TECHNOLOGIES MEXICAN HOLDINGS, LLC

$[________]                                                                                                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

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:

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

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:

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

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:

“(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,”

“(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,”

“(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

“(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”

“ 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

“ 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.”

“ 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

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 Cred