exv10w1



 





Exhibit 10.1




STOCK PURCHASE AGREEMENT




     This Stock Purchase Agreement (this “Agreement”) is made and entered into
this 13th day of December, 2004, by and among Harold Friedman, in his
individual capacity (“Mr. Friedman”), and the Sarah F Zoldan Harold Friedman
Testamentary Trust (the “Trust”), and Friedman Industries, Incorporated, a
Texas corporation (“Buyer”). Mr. Friedman and the Trust are collectively
referred to herein as “Sellers”.



W I T N E S S E T H:




     WHEREAS, Sellers desires to sell, and Buyer desires to acquire, an
aggregate of 624,207 shares of common stock, par value $1.00, of Buyer (the
“Shares”), in consideration of an aggregate of $2,767,734 (the “Purchase
Price”), all upon the terms and conditions set forth herein; and



     WHEREAS, the parties hereto desire to set forth certain representations,
warranties and agreements, all as more fully set forth below;



     NOW, THEREFORE, in consideration of the premises and the respective
covenants and agreements contained herein, the parties hereto agree as follows:



ARTICLE 1




PURCHASE AND SALE OF SHARES




     1.1 Purchase and Sale. Subject to the terms and conditions of this
Agreement, Buyer herewith has purchased from Sellers, and Sellers herewith have
sold to Buyer, the Shares, for the Purchase Price.



     1.2 Delivery of Shares. Sellers have herewith delivered and surrendered
to Buyer certificates representing the Shares, duly endorsed in blank and
accompanied by appropriate stock powers, assignments and such instruments of
conveyance as have been reasonably requested by Buyer to evidence the sale and
purchase of the Shares hereunder.



     1.3 Delivery of Purchase Price. In reliance on the representations and
warranties of Sellers set forth in this Agreement and in full consideration of
the transfer by Sellers to Buyer of the Shares, Buyer has delivered the
Purchase Price to Sellers by wire transfer of $2,767,734 to a bank account
specified by Sellers.



ARTICLE 2




CLOSING




     The consummation of the transactions contemplated by this Agreement (the
“Closing”) took place at the offices of Fulbright & Jaworski L.L.P., 1301
McKinney, Houston, Texas, at 1:00 p.m. (Houston time) on the date hereof (the
“Closing Date”). All transactions contemplated



 









 





by this Agreement to be consummated at the Closing shall be deemed to have
occurred simultaneously.




ARTICLE 3




REPRESENTATIONS, WARRANTIES AND COVENANTS

OF SELLERS




     Sellers jointly and severally represent and warrant to Buyer and covenant
and agree as follows:



     3.1 Ownership. Mr. Friedman and the Trust are the record and beneficial
owner of 461,286 and 162,921, respectively, of the Shares and each owns his or
its respective Shares free and clear of any liens, pledges, mortgages, claims,
charges, security interests or other encumbrances, options, defects or other
rights of any third person of any nature whatsoever (individually, a “Lien and
collectively, “Liens”). Each Seller has full authority to transfer his or its
respective Shares and, upon Buyer’s purchase of the Shares, Buyer will acquire
the Shares free and clear of all Liens.



     3.2 Validity of Agreement and Conflict with Other Agreements.




          (a) Each Seller has all requisite legal right, power, capacity and
authority to execute and deliver this Agreement and to perform fully his
or its obligations hereunder. This Agreement has been duly executed and
delivered by each Seller and is the valid and binding obligation of each
Seller, enforceable against each Seller in accordance with its terms
except as may be limited by bankruptcy, insolvency, reorganization,
fraudulent conveyance or other similar laws affecting the enforcement of
creditors’ rights generally and general equitable principles.




          (b) The execution, delivery and performance of this Agreement by
each Seller and the consummation of the transactions contemplated hereby
by each Seller will not, with or without the passage of time or the
giving of notice or both:




               (i) conflict with, constitute a breach, violation or
termination of any provision of, or constitute a default or require
any consent, approval or other third party action under, any
contract, agreement, indenture, note, lease, mortgage, license,
commitment or other binding arrangement to which either Seller is a
party or by which either Seller or his or its respective Shares may
be bound;




               (ii) result in an acceleration or increase of any amounts due
from either Seller to any Person;




               (iii) result in the creation or imposition of any Lien on the
Shares;




               (iv) violate any provision of law, judgment, rule, order,
decree or any other restriction applicable to either Seller; or



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               (v) require any consent or approval of, or filing with or
notice to, any public or governmental body or authority, under any
provision of law applicable to Seller, other than those required to
be filed pursuant to the Securities Exchange Act of 1934 and the
rules and regulations promulgated pursuant thereto.




	 	3.3	 	No Violations.






          (a) The consummation of the transactions contemplated hereby will
not cause any violation of any order of any governmental entity or any
law, ordinance, regulation, order, requirement, statute, rule, permit,
concession, grant, franchise, license or other governmental authorization
relating or applicable to either Seller or to any of Sellers’ properties
or assets.




          (b) There is no currently pending proceedings nor to the knowledge
of either Seller have any proceedings been filed or threatened against
either Seller or Sellers’ properties or assets, at law or in equity,
before or by any governmental entity that, if adversely determined, might
jeopardize or materially adversely affect the transactions contemplated
by this Agreement or materially and adversely affect the use of or value
of the Shares.



3.4 No Bankruptcy. Neither Seller has: (i) filed for voluntary bankruptcy
(or have commenced against him an involuntary bankruptcy) under any chapter or
section of the United States Bankruptcy Code; (ii) been adjudged bankrupt or
insolvent in proceedings filed under any section or chapter of the United
States Bankruptcy Code; (iii) made any general assignment for the benefit of
creditors; (iv) been unable, or stated that he is unable, to pay his debts as
they become due or (v) taken any preliminary action with respect to the matters
described in clauses (i) or (iii).



3.5 Finder’s Fees. Neither Seller has employed nor retained any
investment banker, broker, agent, finder or other party, or incurred any
obligation for brokerage fees, finder’s fees or commissions, with respect to
the sale by Sellers of the Shares or with respect to the transactions
contemplated by this Agreement, or otherwise dealt with anyone purporting to
act in the capacity of a finder or broker with respect thereto whereby any
party hereto may be obligated to pay such a fee or commission.



ARTICLE 4




REPRESENTATIONS AND WARRANTIES OF BUYER




Buyer represents and warrants to Sellers as follows:



4.1 Corporate Matters. Buyer is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Texas.



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     4.2 Validity of Agreement and Conflict with Other Instruments.



           (a) Buyer has all requisite corporate power and authority to enter
into this Agreement and to perform its obligations hereunder.



           (b) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly
authorized by all requisite corporate action of Buyer. This Agreement
has been duly executed and delivered by Buyer and is the valid and
binding obligation of Buyer, enforceable against Buyer in accordance with
its terms, except as may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance or other similar laws affecting the
enforcement of creditors’ rights generally and general equitable
principles.



           (c) The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby by Buyer will
not, with or without the passage of time or the giving of notice or both:




               (i) conflict with, constitute a breach, violation or
termination of any provision of, or constitute a default under, any
contract, agreement, indenture, note, lease, mortgage, license,
commitment or other binding arrangement to which Buyer is a party
or by which Buyer may be bound;




               (ii) conflict with or violate the articles of incorporation or
the bylaws of Buyer;




               (iii) violate any provision of law, judgment, rule, order,
decree or any other restriction applicable to Buyer; or




               (iv) require any consent or approval of, or filing with or
notice to, any public or governmental body or authority, under any
provision of law applicable to Buyer other than those required to
be filed pursuant to the Securities Exchange Act of 1934 and the
rules and regulations promulgated pursuant thereto.



     4.3 No Violations or Litigation.



           (a) The consummation of the transactions contemplated hereby will
not cause any violation of any order of any governmental entity or any
law, ordinance, regulation, order, requirement, statute, rule, permit,
concession, grant, franchise, license or other governmental authorization
relating or applicable to Buyer or to any of Buyer’s properties or
assets.



           (b) There is no currently pending proceedings nor to the knowledge
of Buyer have any proceedings been filed or threatened against Buyer, at
law or in equity, before or by any governmental entity that, if adversely
determined, might jeopardize or materially adversely affect the
transactions contemplated by this Agreement.



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     4.4 No Bankruptcy. Buyer has not: (i) filed for voluntary bankruptcy (or
have commenced against it an involuntary bankruptcy) under any chapter or
section of the United States Bankruptcy Code; (ii) been adjudged bankrupt or
insolvent in proceedings filed under any section or chapter of the United
States Bankruptcy Code; (iii) made any general assignment for the benefit of
creditors; (iv) been unable, or stated that it is unable, to pay its debts as
they become due or (v) taken any preliminary action with respect to the matters
described in clauses (i) or (iii).



     4.5 Finder’s Fees. Other than GulfStar Group, Buyer has not employed or
retained any investment banker, broker, agent, finder or other party, or
incurred any obligation for brokerage fees, finder’s fees or commissions, with
respect to the sale by Seller of the Shares or with respect to the transactions
contemplated by this Agreement, or otherwise dealt with anyone purporting to
act in the capacity of a finder or broker with respect thereto whereby any
party hereto may be obligated to pay such a fee or commission.



ARTICLE 5




INDEMNIFICATION




     5.1 Sellers’ Indemnity. Subject to the provisions of this Article 5,
Sellers, jointly and severally, agree to indemnify and hold Buyer and its
officers, directors, shareholders, agents, employees, representatives,
successors and assigns (said Persons being sometimes referred to in this
Section 5.1 as “Buyer’s Indemnitees”) harmless from and against and in respect
of any loss, cost, claim, demand, assessment, judgment, liability, damage or
expense (including interest, penalties and attorneys’ and accountants’ fees)
(collectively “Buyer’s Damages”), arising out of or resulting from, and shall
pay Buyer’s Indemnitees the full amount of Buyer’s Damages that Buyer’s
Indemnitees may be obligated to pay on account of any breach of any
representation or warranty or failure to perform any covenant or agreement made
or undertaken by Sellers in this Agreement.



     5.2 Buyer’s Indemnity. Subject to the provisions of this Article 5, Buyer
agrees to indemnify and hold Sellers, their agents, representatives, successors
and assigns (said Persons being sometimes referred to in this Section 5.2 as
“Sellers’ Indemnitees”) harmless from and against and in respect of any loss,
cost, claim, demand, assessment, judgment, liability, damage or expense
(including interest, penalties, and attorney’s and accountant’s fees)
(collectively “Sellers’ Damages”) arising out of or resulting from, and shall
pay Sellers’ Indemnitees the full amount thereof that Sellers’ Indemnitees may
be obligated to pay on account of any breach of any representation or warranty
or failure to perform any covenant or agreement made or undertaken by Buyer in
this Agreement.



     5.3 Procedure. All claims for indemnification by a party under this
Article 5 (the party claiming indemnification and the party against whom such
claims are asserted being hereinafter called the “Indemnified Party” and the
“Indemnifying Party”, respectively) shall be asserted and resolved as follows:



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          (a) In the event that any claim or demand for which an Indemnifying
Party would be liable to an Indemnified Party hereunder is asserted
against or sought to be collected from such Indemnified Party by a third
party, such Indemnified Party shall, promptly but in any event within 30
days of the receipt thereof, give notice (the “Claim Notice”) to the
Indemnifying Party of such claim or demand, specifying the nature of and
specific basis for such claim or demand and the amount or the estimated
amount thereof to the extent then feasible, which estimate shall not be
binding upon either party in its effort to collect the final amount of
such claim or demand. To the extent the Indemnifying Party is prejudiced
thereby, the failure to so notify the Indemnifying Party of any such
claims or action shall relieve the Indemnifying Party from liability that
it may have to the Indemnified Party under the indemnification provisions
contained in this Article 5, but only to the extent of the actual loss
incurred, and shall not relieve the Indemnifying Party from any liability
that it may have to the Indemnified Party otherwise than under this
Article 5. In any case, if any such actions shall be brought against the
Indemnified Party and the Indemnified Party shall notify the Indemnifying
Party of the commencement thereof, the Indemnifying Party shall be
entitled to assume the defense thereof at its own expense with counsel
reasonably acceptable to the Indemnified Party. If the Indemnifying
Party does not assume such defense by written notice to the Indemnified
Party within 15 days of a request from the Indemnified Party to the
Indemnifying Party asking if it intends to assume such defense, the
Indemnified Party shall, in its sole discretion, conduct such defense
with counsel of its choice. If the Indemnifying Party assumes the
defense, the Indemnified Party shall be entitled to participate in the
defense at its expense. The settlement of any claim hereunder by the
Indemnifying Party may only be made upon the prior approval by the
Indemnified Party of the terms of the settlement, which approval shall
not be unreasonably withheld, conditioned or delayed, unless the sole
relief provided is monetary damages that are paid in full by the
Indemnifying Party. If the Indemnifying Party has assumed the defense of
a claim in accordance with this Section 5.3(a), the Indemnified Party
shall not settle the claim except with the written consent of the
Indemnifying Party or upon the waiver of any claim for indemnity
hereunder with respect to such claim.




          (b) If requested by the Indemnifying Party, the Indemnified Party
agrees, at the Indemnifying Party’s expense, to cooperate with the
Indemnifying Party and its counsel in contesting any claim or demand that
the Indemnifying Party elects to contest, or, if appropriate and related
to the claim in question, in making any counterclaim against the Person
asserting the third party claim or demand, or any cross-complaint against
any Person other than an affiliate of the Indemnified Party.




          (c) If any Indemnified Party should have a claim against the
Indemnifying Party hereunder that does not involve a claim or demand
being asserted against or sought to be collected from it by a third
party, the Indemnified Party shall send a Claim Notice with respect to
such claim to the Indemnifying Party.



     5.4 Failure to Pay Indemnification. If and to the extent the Indemnified
Party shall make written demand upon the Indemnifying Party for indemnification
authorized pursuant to this Article 5 and the Indemnifying Party shall refuse
or fail to pay in full within ten business



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days of such written demand the amounts demanded pursuant hereto and in
accordance herewith, then the Indemnified Party may utilize any legal or
equitable remedy to collect from the Indemnifying Party the amount of its
Damages plus all costs, including reasonable attorneys’ fees incurred in
connection with such collection efforts. Nothing contained herein is intended
to limit or constrain the Indemnified Party’s rights against the Indemnifying
Party for indemnity, the remedies herein being cumulative and in addition to
all other rights and remedies of the Indemnified Party.




ARTICLE 6

NATURE OF STATEMENTS AND SURVIVAL

OF COVENANTS, REPRESENTATIONS,

WARRANTIES AND AGREEMENTS




     All representations and warranties made by the parties in this Agreement
or pursuant hereto shall survive the Closing Date, notwithstanding any
investigation heretofore or hereafter made by or on behalf of any of them and
shall not be deemed merged into any instruments or agreements delivered at
Closing and shall remain in full force and effect for a period of two years
following the Closing Date (the period during which the representations and
warranties shall survive being referred to herein with respect to such
representations and warranties as the “Survival Period”), except as to
representations and warranties as to title to the Shares which shall not
terminate. Any claim for indemnification made during the Survival Period shall
be valid and the representations and warranties relating thereto shall remain
in effect for purposes of such indemnification notwithstanding such claim may
not be resolved within the Survival Period.



ARTICLE 7




MISCELLANEOUS




     7.1 Notices. All notices, requests, consents, directions and other
instruments and communications required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been duly given if
delivered personally, if mailed first-class, postage prepaid, registered or
certified mail, or if sent by telegram, telex, facsimile, telecommunication or
other similar form of communication (with receipt confirmed), as follows:


If to Sellers to:


Harold Friedman


PMB 175


P.O. Box 31900


Houston, Texas 77231-1900



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Copies to:


Courtney & Associates P.C.

2016 State Street

Houston, Texas 77007

Attention: J. Cal Courtney, Jr.

Facsimile: (713) 706-4104

Confirm: (713) 706-4100


If to Buyer, to:


Friedman Industries, Incorporated

1121 Judson Road, Suite 124

Longview, TX 75601

Attention: President

Facsimile: (903) 758-2265

Confirm: (903) 758-3431


Copies to:


Fulbright & Jaworski L.L.P.

1301 McKinney, Suite 5100

Houston, TX 77010

Attention: Laura Ann Smith

Facsimile: (713) 651-5246

Confirm: (713) 651-5304



or to such other address and to the attention of such other person(s) or
officer(s) as any party may designate by written notice. Any notice shall be
effective upon delivery.




     7.2 Assignment. No party to this Agreement may sell, transfer, assign,
pledge or hypothecate its, his or her rights, interests or obligations under
this Agreement.



     7.3 Successors. This Agreement shall inure to the benefit of, be binding
upon, and be enforceable by the parties hereto and their respective successors
and assigns.



     7.4 Expenses. Except as otherwise set forth herein, and whether or not
the transactions contemplated by this Agreement shall be consummated, each
party agrees to pay, without right of reimbursement from any other party, the
costs incurred by such party incident to the preparation and execution of this
Agreement and performance of its obligations hereunder, including without
limitation the fees and disbursements of legal counsel, accountants and
consultants employed by such party in connection with the transactions
contemplated by this Agreement.



     7.5 Entire Agreement. This Agreement constitutes the entire agreement and
understanding between the parties relating to the subject matter hereof and
thereof and



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supersedes all prior representations, communications and arrangements,
whether oral, written or inferred, between the parties relating to the subject
matter hereof. This Agreement may not be modified or amended, except upon a
written instrument executed by Sellers and by a duly authorized representative
of Buyer.




     7.6 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Texas.



     7.7 Waiver. The waiver of any breach of any term or condition of this
Agreement shall not be deemed to constitute the waiver of any other breach of
the same or any other term or condition.



     7.8 Headings. The headings of the Articles and Sections of this Agreement
have been inserted for convenience of reference only and shall in no way
restrict or otherwise modify any of the terms or provisions hereof or affect in
any way the meaning or interpretation of this Agreement.



     7.9 Definition of Person. As used in this Agreement, “Person” shall mean
a corporation, an association, a partnership, an organization, a business, an
individual, a government or political subdivision thereof or a government
agency.



     7.10 Severability. Any provision hereof that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.



     7.11 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.



     7.12 Negotiated Transaction. The provisions of this Agreement were
negotiated by the parties hereto, and this Agreement shall be deemed to have
been drafted by all of the parties hereto.



     7.13 Spousal Consent. Mr. Friedman is an individual and is married,
therefore, Mr. Friedman’s spouse is also executing this Agreement. By
executing this Agreement, Mr. Friedman’s spouse (i) acknowledges that she knows
of the contents of this Agreement, (ii) consents to the entering into this
Agreement by Sellers and (iii) agrees that this Agreement shall be binding upon
her to the extent of her community property interest and/or any other interest.



[SIGNATURES ON FOLLOWING PAGES]




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     IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the date first above written.



	 	 	 
	

	 	SELLERS:
	 
	 	 
	

	 	/s/ HAROLD FRIEDMAN
	

	 	
 
	

	 	Harold Friedman
	 
	 	 
	

	 	SARAH F ZOLDAN HAROLD FRIEDMAN

TESTAMENTARY TRUST
	 
	 	 
	

	 	By: /s/ HAROLD FRIEDMAN
	

	 	
 
	

	 	Name: Harold Friedman

Title: Trustee
	 
	 	 
	

	 	MR. FRIEDMAN’S SPOUSE:
	 
	 	 
	

	 	/s/ BEVERLY FRIEDMAN
	

	 	
 
	

	 	Beverly Friedman
	

	 	

BUYER:
	 
	 	 
	

	 	FRIEDMAN INDUSTRIES, INCORPORATED



By: /s/ BEN HARPER
	

	 	
 
	

	 	Name: Ben Harper


Title: Senior Vice President – Finance








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