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EXHIBIT 10.1

FIFTH AMENDMENT TO AMENDED AND RESTATED LETTER AGREEMENT
(with Borrowing Base)

THIS FIFTH AMENDMENT TO AMENDED AND RESTATED LETTER AGREEMENT (this
Amendment) dated effective as of April 1, 2003 (the
Effective Date), is by
and between FRIEDMAN INDUSTRIES, INCORPORATED (Borrower) and JPMORGAN CHASE
BANK, formerly known as THE CHASE MANHATTAN BANK (Bank).

PRELIMINARY STATEMENT. Bank and Borrower have entered into an Amended And
Restated Letter Agreement dated as of April 1, 1995, as amended by a First
Amendment dated as of April 1, 1997, a Second Amendment dated as of July 21,
1997, a Third Amendment dated as of April 1, 1999, and a Fourth Amendment dated
as of June 1, 2001 (collectively, Credit Agreement). All capitalized terms
defined in the Credit Agreement and not otherwise defined herein shall have the
same meanings herein as in the Credit Agreement. Bank and Borrower have agreed
to amend the Credit Agreement to the extent set forth herein, and in order to,
among other things, renew, modify and decrease the Revolving Credit Note and to
reflect that the Advance/Term Note referenced in Section 1.2 of the Credit
Agreement has now been paid off.

NOW THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
the parties hereto, Bank and Borrower hereby agree as follows:

1.     Section 1.1 of the Credit Agreement is amended to read as follows:



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Subject to the terms and conditions hereof, the Bank agrees to make loans
(Loan or Loans) to Borrower from time to time before the Termination Date,
not to exceed at any one time outstanding $6,000,000.00 (the Commitment).
Borrower shall have the right to borrow, repay and reborrow. Bank and
Borrower agree that Chapter 346 of the Texas Finance Code shall not apply to
this Agreement, the Note or any Loan. The Loans shall be evidenced by, shall
bear interest and shall be payable as provided in the promissory note of
Borrower dated April 1, 2003 (together with any and all renewals, extensions,
modifications, replacements, and rearrangements thereof and substitutions
therefor, the Note), which is given in renewal, modification and decrease of
that certain promissory note dated June 1, 2001, maturing April 1, 2004, in the
original principal amount of $10,000,000.00. The purpose of the Loans made
under the Commitment is to provide the Borrower with working capital support.
Termination Date means the earlier of: (a) April 1, 2006; or (b) the date
specified by Bank in accordance with Section 5 of the Credit Agreement.

2.     The Advance/Term Note referenced in Section 1.2 of the Credit Agreement
has now been paid off and that Section is intentionally left blank.

3.     Section 2.1(c) of the Credit Agreement is amended to read December 21,
2002 for the date of the last financial statement delivered to the Bank.

4.     Exhibit A of
the Credit Agreement is amended by and replaced with the
Exhibit A attached hereto for all purposes, which shall be a quarterly
compliance certificate as further described therein.

5.     Borrower hereby represents and warrants to the Bank that after giving
effect to the execution and delivery of this Amendment: (a) the
representations and warranties set forth in the Credit Agreement are true
and correct on the date hereof as though made on and as of such date; and
(b) no Event of Default, or event which with passage of time, the giving
of notice or both would become an Event of Default, has occurred and is
continuing as of the date hereof.

6.     This Amendment shall become effective as of the Effective Date upon
its execution and delivery by each of the parties named in the signature
lines below, and the term Agreement as used in the Credit Agreement
shall also refer to the Credit Agreement as amended by this Amendment.

7.     Borrower further acknowledges that each of the other Loan Documents is in
all other respects ratified and confirmed, and all of the rights, powers
and privileges created thereby or thereunder are ratified, extended,
carried forward and remain in full force and effect except as the Credit
Agreement is amended by this Agreement.

8.     This Amendment may
be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed an original and all of which taken together shall
constitute but one and the same agreement.

9.     This Amendment shall be included within the definition of Loan
Documents as used in the Agreement.

10.     THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF TEXAS AND AS APPLICABLE, THE LAWS OF THE UNITED
STATES OF AMERICA.

THIS WRITTEN AMENDMENT AND THE OTHER LOAN DOCUMENTS CONSTITUTE A LOAN
AGREEMENT AS DEFINED IN SECTION 26.02(a) OF THE TEXAS BUSINESS & COMMERCE
CODE, AND REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.

Page 1 of 2 Pages





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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed effective as of
the Effective Date.

| |  |           |  |                                   |  |                                
| |  | --------- |  | --------------------------------- |  | -------------------------------
| |  | BORROWER: |  | FRIEDMAN
INDUSTRIES, INCORPORATED
| |  |           |  |                                   |  |                                
| |  |           |  | By:                               |  | /s/ BEN HARPER                 
| |  |           |  |                                   |  |                                
| |  |           |  | Name:                             |  | Ben Harper                     
| |  |           |  |                                   |  |                                
| |  |           |  | Title:                            |  | Senior Vice President  Finance
| |  |           |  |                                   |  |                                
| |  |           |  |                                   |  |                                
| |  | BANK:     |  | THE
CHASE MANHATTAN BANK         
| |  |           |  |                                   |  |                                
| |  |           |  | By:                               |  | /s/ FAITH A. EDWARDS           
| |  |           |  |                                   |  |                                
| |  |           |  | Name:                             |  | Faith A. Edwards               
| |  |           |  |                                   |  |                                
| |  |           |  | Title:                            |  | Vice President                 
| |  |           |  |                                   |  |                                

Page 2 of 2 Pages



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EXHIBIT A to Agreement between
FRIEDMAN INDUSTRIES, INCORPORATED (Borrower) and JPMORGAN CHASE BANK (Bank)
dated as of April 1, 1995, as some may be amended, restated and supplemented in writing

REPORTING REQUIREMENTS, FINANCIAL COVENANTS
AND
COMPLIANCE CERTIFICATE FOR CURRENT REPORTING PERIOD ENDING , 200 (END DATE)

A. REPORTING PERIOD. THIS EXHIBIT WILL BE IN PROPER FORM AND BE SUBMITTED QUARTERLY.

B.

|                                                                                                           |  |                                                 |  |                                             |  |            
|---------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------- |  | ------------------------------------------- |  | -----------
|Financial Reporting. Borrower will provide the following financial information within the times indicated: |  | Compliance                                     
|                                                                                                           |  |                                                 |  |                                             |  | Certificate
|                                                                                                           |  |                                                 |  |                                             |  |            
|WHO                                                                                                        |  | WHEN DUE                                        |  | WHAT                                        |  | Compliance 
|                                                                                                           |  |                                                 |  |                                             |  | (Circle)   
|                                                                                                           |  |                                                 |  |                                             |  | Yes    No  
|                                                                                                           |  |                                                 |  |                                             |  |            
|BORROWER                                                                                                   |  | (i) Quarterly at such time as this statement is |  | Borrowers 10-Q together with a             |  | Yes    No  
|                                                                                                           |  | submitted to the Securities and Exchange        |  | certificate of compliance duly executed by  |  |            
|                                                                                                           |  | Commission (SEC)                              |  | an officer of Borrower.                     |  |            
|                                                                                                           |  |                                                 |  |                                             |  |            
|                                                                                                           |  | (ii) On an annual basis at such time at this    |  | Borrowers 10-K together with a certificate |  | Yes    No  
|                                                                                                           |  | statement is submitted to the Securities and    |  | of compliance duly executed by an officer   |  |            
|                                                                                                           |  | Exchange Commission (SEC)                     |  | of Borrower                                 |  |            

C.

|                                                                                                                                                                                                     |  |                                                 |  |                   
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------- |  | ------------------
|FINANCIAL COVENANTS. Borrower will comply with the
following financial covenants, defined in accordance with GAAP
incorporating the calculation adjustments indicated on the Compliance
Certificate: |  | COMPLIANCE CERTIFICATE                          |  |                   
|                                                                                                                                                                                                     |  |                                                 |  |                   
|REQUIRED                                                                                                                                                                                             |  | ACTUAL REPORTED                                 |  | Compliance        
|Except as specified otherwise, each covenant will be maintained at all
times and reported for each Reporting Period or as of each Reporting
Period End Date, as appropriate:                         |  | For Current Reporting Period/as of the End Date |  | (Circle)
Yes    No

|                                                                                                                     |  |   |                           |  |   |   |   |                         |           |   |  |   |                 |  |          
|-------------------------------------------------------------------------------------------------------------------- |  | - | ------------------------- |  | - | - | - | ----------------------- | --------- | - |  | - | --------------- |  | ---------
|1. Maintain a Working Capital of at least $10,000,000.00.                                                            |  | $ |                           |  | - |   | $ |                         |           | = |  | $ |                 |  | Yes    No
|                                                                                                                     |  |   |                           |  |   |   |   |                         |           |   |  |   |                 |  |          
|                                                                                                                     |  |   | Current Assets            |  |   |   |   | Current Liabilities     |           |   |  |   | Working Capital |  |          
|                                                                                                                     |  |   |                           |  |   |   |   |                         |           |   |  |   |                 |  |          
|2. Maintain a Tangible Net Worth as adjusted of at                                                                   |  |   | Stockholders Equity      |  |   |   |   |                         |           |   |  | $ |                 |  | Yes    No
|least $25,000,000.00.                                                                                                |  |   | Minus:                    |  |   |   |   | Goodwill                |           |   |  | $ |                 |  |          
|                                                                                                                     |  |   |                           |  |   |   |   | Other Intangible Assets |           |   |  | $ |                 |  |          
|                                                                                                                     |  |   | Plus:                     |  |   |   |   | Subordinated Debt       |           |   |  | $ |                 |  |          
|                                                                                                                     |  |   | Equals:                   |  |   |   |   | Tangible Net Worth      |           |   |  | $ |                 |  |          
|                                                                                                                     |  |   |                           |  |   |   |   |                         |           |   |  |   |                 |  |          
|3. Maintain a Current Ratio of at least 2.00 to 1.00.                                                                |  | $ |                           |  | / |   | $ |                         |           | = |  | $ |                 |  | Yes    No
|                                                                                                                     |  |   |                           |  |   |   |   |                         |           |   |  |   |                 |  |          
|                                                                                                                     |  |   | Current Assets            |  |   |   |   | Current Liabilities     |           |   |  |   | Current Ratio   |  |          
|                                                                                                                     |  |   |                           |  |   |   |   |                         |           |   |  |   |                 |  |          
|4. Maintain a ratio of Total Indebtedness to Tangible
Net Worth plus Subordinated Debt of no more than 1.10
to 1.00. |  |   | Total Indebtedness (GAAP) |  |   | $ |   |                         | Yes    No
|                                                                                                                     |  |   |                           |  |   |   |   |                         |           |   |  |   |                 |  |          
|                                                                                                                     |  |   | Tangible Net Worth        |  |   |   |   |                         |           |   |  | $ |                 |  |          
|                                                                                                                     |  |   |                           |  |   |   |   |                         |           |   |  |   |                 |  |          
|                                                                                                                     |  | $ |                           |  | / |   | $ |                         |           | = |  | $ |                 |  |          
|                                                                                                                     |  |   |                           |  |   |   |   |                         |           |   |  |   |                 |  |          
|                                                                                                                     |  |   | Total Indebtedness        |  |   |   |   | Tangible Net Worth      |           |   |  |   | Ratio           |  |          

THE ABOVE SUMMARY REPRESENTS SOME OF THE COVENANTS AND AGREEMENTS CONTAINED IN
THE NOTE AND DOES NOT IN ANY WAY RESTRICT OR MODIFY THE TERMS AND CONDITIONS OF
THE NOTE. IN CASE OF CONFLICT BETWEEN THIS EXHIBIT A AND THE NOTE, THE NOTE
SHALL CONTROL.

The undersigned hereby certifies that the above information and computations
are true and correct and not misleading as of the date hereof, and that since
the date of the Borrowers most recent Compliance Certificate (if any):



| | o |  | No default or Event of Default has occurred under the Note during the
current Reporting Period, or been discovered from a prior period, and not
reported.                                   
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | o |  | A default or Event of Default (as described below) has occurred during the
current Reporting Period or has been discovered from a prior period and is
being reported for the first time and:



| | o |  | was cured on .                    
| | - |  | ----------------------------------
|
| | o |  | was waived by Bank in writing on .
|
| | o |  | is continuing.                    

|                                 |  | 
|-------------------------------- |  | 
|Description of Event of Default: |  | 
|                                 |  | 

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Executed this  day of , 200.

EXHIBIT A Page 1 of 2 Pages





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|          |  |                                  
|--------- |  | ---------------------------------
|BORROWER: |  | FRIEDMAN INDUSTRIES, INCORPORATED

|           |  | 
|---------- |  | 
|SIGNATURE: |  | 
|           |  | 
|NAME:      |  | 
|           |  | 
|TITLE:     |  | 
|           |  | 
|ADDRESS:   |  | 
|           |  | 
|           |  | 
|           |  | 
|           |  | 
|           |  | 

EXHIBIT A Page 2 of 2 Pages