exv10w1



 







EXHIBIT 10.1




SIXTH AMENDMENT TO AMENDED AND RESTATED LETTER AGREEMENT

(with Borrowing Base)



THIS SIXTH AMENDMENT TO AMENDED AND RESTATED LETTER AGREEMENT (this “Amendment”)
dated effective as of
April 1, 2005 (the “Effective Date”), is by and between FRIEDMAN INDUSTRIES,
INCORPORATED (“Borrower”) and
JPMORGAN CHASE BANK, N.A., formerly known as JPMorgan Chase 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, a Fourth Amendment dated as of June 1, 2001, and a Fifth Amendment dated as of April 1,
2003 (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 extend the Revolving Credit
Note.



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, 2005 (together with any and
all renewals, extensions, modifications, replacements, and rearrangements thereof and
substitutions therefor, the “Note”),
which is given in renewal, modification and extension of that certain promissory note
dated April 1, 2003, in the original
principal amount of $6,000,000.00, maturing April 1, 2006. 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, 2008; or (b)
the date specified by Bank in accordance with Section 5
of the Credit Agreement.


2.
Exhibit A of the Credit Agreement is amended by and
replaced with the Exhibit A attached
hereto for all purposes.



3. 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.



4. 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.



5. 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
Amendment.



6. 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.



7. This Amendment shall be included within the definition of “Loan Documents” as used in the
Agreement.



8. 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.



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:	 	JPMORGAN CHASE BANK, N.A.
	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 
	 

	 	 	 	 	 	 





Page 1 of 2 Pages









 






EXHIBIT A to Agreement between

FRIEDMAN INDUSTRIES, INCORPORATED (“Borrower”) and JPMORGAN CHASE
BANK, N.A. (“Bank”)
 dated as of April 1, 1995, as same 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







	 	 	 	 	 	 	 
	 	 	 	 	 	 	Compliance
	 	 	 	 	 	 	(Circle)
	WHO	 	when due	 	what	 	Yes No
	BORROWER

	 	(i) Quarterly at such time as this statement is
submitted to the Securities and Exchange
Commission (“SEC”)	 	Borrower’s 10-Q together with
a certificate
of compliance duly executed by an officer
of Borrower
	 	Yes No
	 
	 	 	 	 	 	 
	 

	 	(ii) On an annual basis at such time as this
statement is submitted to the Securities and
Exchange Commission (“SEC”)
	 	Borrower’s 10-K together with a certificate
of compliance duly executed by an officer
of Borrower
	 	Yes No





 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






	 	 	 	 	 
	 	 	 	 	Compliance
	REQUIRED	 	ACTUAL REPORTED	 	(Circle)
	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
	 	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

	 	Stockholder’s Equity
	 	 	 	$ 	 	 Yes No
	least $27,000,000.00.
	 	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:

	 	 

	 
	 	 
	 
	 
	 	 
	 






EXHIBIT A Page 1 of 2 Pages









 






Executed this                      day of                     , 2000__.




BORROWER:     FRIEDMAN
INDUSTRIES, INCORPORATED






	 	 	 
	SIGNATURE:
	 	 
	 

	 	 
	NAME:
	 	 
	 

	 	 
	TITLE:
	 	 
	 

	 	 
	ADDRESS:
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 





EXHIBIT A Page 2 of 2 Pages