EX-4.3










Exhibit 4.3 



AMENDMENT NO. 1 



to 



LOAN AND SECURITY
AGREEMENT 



     
        AMENDMENT
NO. 1 (this “Amendment”), dated as of August 12, 2004, by and
among FLEET CAPITAL CORPORATION (“Fleet”), a Rhode
Island corporation with an office at 1633 Broadway, New York, New York 10019,
individually as a lender and as agent (“Agent”) for itself and
any other financial institution which is or becomes a party to the Loan
Agreement (as defined below) (collectively, the “Lenders”), the
Lenders and BAYOU STEEL CORPORATION, a Delaware corporation with its
chief executive office and principal place of business at 138 Highway 3217, La
Place, Louisiana 70069 (“Borrower”). 



BACKGROUND 



     
        Borrower,
Lenders and Agent are parties to a Loan and Security Agreement dated as of
February 18, 2004 (as amended, restated, supplemented or otherwise modified from
time to time, the “Loan Agreement”) pursuant to which Agent and
Lenders provide Borrower with certain financial accommodations. 



     
        Borrower
has requested that Agent and Lenders (i) increase the letter of credit
sub-limit, (ii) increase the in-transit inventory sub-limit, and (iii) modify
the definition of in-transit inventory as set forth below, and Agent and Lenders
are willing to do so on the terms and conditions hereafter set forth. 



     
        NOW,
THEREFORE, in consideration of any loan or advance or grant of credit heretofore
or hereafter made to or for the account of Borrower by Agent and Lenders, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows: 



     
        1.
                  Definitions. 



     
        All
capitalized terms not otherwise defined herein shall have the meanings given to
them in the Loan Agreement. 



     
        2.
                  Amendment. 



     
        Subject
to satisfaction of the conditions precedent set forth in Section 3 below,
the Loan Agreement is hereby amended as follows: 






	 	             (a) Section
1.2.1 of the Loan Agreement is amended by deleting the amount
“$5,000,000” in the first sentence thereof and inserting in place
thereof the amount “$10,000,000”. 






	 	             (b) Section
6.2.1 of the Loan Agreement is amended by amending and restating clause (i) of the first
sentence thereof as follows: “(i) sales, credits and collections reports as of the 15th day
and the last day of each month within seven (7) Business Days after each such date (provided that,
if Excess Availability is at any time less than $10,000,000, then such reports shall be
delivered weekly within five (5) Business Days after the end of each week),”. 






	 	             (c)
                 Section 6.3 of the Loan  Agreement is amended by amending and restating
 the last sentence  thereof            in its entirety as follows:






	 	“Borrower
shall conduct cycle counts of inventory no less frequently than, and of a
                               comparable scope to, those that have been performed from
the Closing Date through                                August 1, 2004, and shall upon
Agent’s request from time to time provide to Agent a
                               report based on each such cycle count, together with such
supporting information as                                Agent shall reasonably request.”







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	 	             (d)
                 Section 8.1.4 of the Loan Agreement is amended and restated in its
entirety as follows:






	 	             
             “8.1.4.
Borrowing Base Certificates. Borrower shall deliver to Agent, in form and
substance reasonably acceptable to Agent and within seven (7) Business Days after each
certificate date, a Borrowing Base Certificate as of the 15th day and the last day of
each month, with such supporting materials as Agent shall reasonably request, provided,
however, that at any time that Excess Availability is less than $10,000,000, a
Borrowing Base Certificate as of the last day of each week and the last day of each month
shall be delivered to Agent within (x) five (5) Business Days after the end of each such
week and (y) seven (7) Business Days after the end of each such month.”






	 	             (e)
                 Section  8.2.18 of the Loan  Agreement  is amended by amending  and
 restating  the first  sentence            thereof in its entirety as follows:






	 	“Become,
or permit any of its Subsidiaries to become, a lessee under any operating lease
(other than a lease under which Borrower or any of its Subsidiaries is lessor)
of (x) any real Property, or (y) any personal Property where the initial lease
term is in excess of one year, if the aggregate Rentals payable during any
current or future period of twelve (12) consecutive months under the lease in
question and all other such leases under which Borrower or any of its
Subsidiaries is then lessee would exceed $1,500,000.”






	 	             (f) The
definition of Borrowing Base contained in Appendix A of the Loan Agreement is
amended by deleting the amount “$200,000” contained in clause (ii)(b) thereof
and inserting in place thereof the amount “$6,000,000”. 






	 	             (g) The
definition of Eligible Account contained in Appendix A of the Loan Agreement is
amended by deleting the amount “$1,000,000” contained in clause (vii) thereof
and inserting in place thereof the amount “$2,000,000”. 






	 	             (h) The
definition of Eligible Inventory contained in Appendix A of the Loan Agreement is
amended by amending and restating clause (ix) thereof in its entirety as follows: 






	 	             
             “(ix)
    it is  in-transit,  other than with  respect to Eligible  In-Transit
                     Inventory; or”






	 	             (i) Appendix
A of the Loan Agreement is amended by inserting a new definition of Eligible
In-Transit Inventory in its appropriate alphabetical position as follows: 






	 	             
             “Eligible
In-Transit Inventory – such in-transit Inventory of Borrower that would otherwise
constitute Eligible Inventory and which is (w) in-transit (within the United States)
between facilities owned or operated by the Borrower, or (x) barges to be used for scrap
metal, which have been purchased by the Borrower and title has passed to the Borrower and
which are docked along the Mississippi River not on the Borrower’s property,
provided that Eligible In-Transit Inventory under this clause (x) shall not exceed
$400,000 at any time, or (y) pre-paid, provided that such pre-paid Inventory (1) has
documentation satisfactory to the Agent which evidences that title has passed to
Borrower, (2) is in-transit within the United States, and (3) is covered by casualty
insurance as to which Borrower and Agent are named loss payees, or (z) in-transit to a
United States port for delivery to Borrower and which satisfies the following additional
criteria: (a) such Inventory has been paid for in full by Issuing Bank and reimbursed by
Borrower under sight documentary Letters of Credit issued by Issuing Bank, (b) such
Inventory is evidenced by a full set of clean, original, negotiable ocean bills of lading
consigned to the order of Agent with all said original bills of lading required to be
presented under each documentary Letter of Credit, or such other type of negotiable bill
of lading acceptable to Agent in its sole discretion, (c) each such bill of lading with
respect to such Inventory includes a clause stating that one original bill of lading must
be surrendered in order to obtain goods at the United States port of disembarkation, and
(d) an agreement with respect to such Inventory with each customs broker used by
Borrower, in form and substance acceptable to Agent, is in full force and effect.”







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        3.
                  Conditions of Effectiveness. 



     
        This
Amendment shall become effective upon satisfaction of the following conditions precedent:
Agent shall have received (i) four (4) copies of this Amendment executed by Borrower, and
(ii) such other certificates, instruments, documents and agreements as may be required by
Agent or its counsel, each of which shall be in form and substance satisfactory to Agent
and its counsel.  



     
        4.
                  Representations and Warranties. 



     
        Borrower
hereby represents and warrants as follows:  






	 	             (a)
This Amendment constitutes, and the Loan Agreement continues to constitute, the legal,
valid and binding obligations of Borrower and are enforceable against Borrower in
accordance with their respective terms. 






	 	             (b)
Upon the effectiveness of this Amendment, Borrower hereby reaffirms all covenants,
representations and warranties made in the Loan Agreement and agrees that all such
covenants, representations and warranties shall be deemed to have been remade as of the
effective date of this Amendment (except where such representation or warranty, by its
terms, is given as of a certain date). 






	 	             (c)
No Event of Default or Default has occurred and is continuing or would exist after giving
effect to this Amendment. 






	 	             (d)
                 Borrower has no defense, counterclaim or offset with respect to the Loan
Agreement.






     
        5.
                  Effect on the Loan Agreement. 




             
             (a)
Each reference in the (x) Loan Agreement to “this Agreement”, “hereunder”,
“hereof”, “herein” or words of like import shall mean and be a
reference to the Loan Agreement as amended hereby and/or (y) and other Loan Document to
the “Loan and Security Agreement” or otherwise to the Loan Agreement shall mean
and be a reference to the Loan Agreement as amended hereby.  




             
             (b)
The Loan Agreement and all other documents, instruments and agreements executed and/or
delivered in connection therewith, shall remain in full force and effect, and are hereby
ratified and confirmed.  




             
             (c)
The execution, delivery and effectiveness of this Amendment shall not operate as a waiver
of any right, power or remedy of Agent or Lenders, nor constitute a waiver of any
provision of the Loan Agreement, or any other documents, instruments or agreements
executed and/or delivered under or in connection therewith.  



     
        6.
                  Governing Law. 



     
        This
Amendment shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns and shall be governed by and construed in accordance
with the laws of the State of New York.  



     
        7.
                  Headings. 



     
        Section
headings in this Amendment are included herein for convenience of reference only and
shall not constitute a part of this Amendment for any other purpose.  




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        8.
                  Counterparts; Facsimile. 



     
        This
Amendment may be executed by the parties hereto in one or more counterparts, each of
which shall be deemed an original and all of which when taken together shall constitute
one and the same agreement. Any signature delivered by a party by facsimile transmission
shall be deemed to be an original signature hereto.  



[THE REMAINDER OF THIS
PAGE HAS INTENTIONALLY BEEN LEFT BLANK.] 




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	 	             IN
WITNESS WHEREOF, this Amendment No. 1 has been duly executed as of the date first written
above.






			BAYOU STEEL
      CORPORATION

      

      

      By: /s/ Richard J. Gonzalez

             —————————————————

                   Richard
      J. Gonzalez,

                   Vice
      President and Chief Financial Officer







			FLEET CAPITAL CORPORATION,
  as Agent and as a Lender

      

      

      By: /s/ Allan R. Juleus

             —————————————————

                   Allan R. Juleus,

                   Senior Vice President







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