Exhibit 4.8


 


EXECUTION COPY


 


April 9, 2004


 


QUANEX CORPORATION


Suite 1500


1900 West Loop South


Houston, Texas 77027


 


Re:                               Consent and Third
Amendment (“Consent and Amendment”) under the Quanex Corporation Revolving
Credit Agreement dated as of November 26, 2002 (as amended, the “Credit
Agreement”) by and among Quanex Corporation (“Company”), Comerica Bank and such
other financial institutions which are or may from time to time become parties
to the Credit Agreement (the “Banks”), and Comerica Bank in its capacity as
Agent for the Banks (“Agent”)


 


Ladies and Gentlemen:


 


Reference is made to the Credit Agreement.  Except a specifically defined to the contrary herein, capitalized
terms used in this Consent and Amendment shall have the meanings given them in
the Credit Agreement.  This Consent and
Amendment shall not become effective unless and until countersigned by the
Company and returned to the Agent.


 


The Company has proposed to issue up to $150,000,000 aggregate
principal amount of senior unsecured debentures (the “Debentures”) in an
offering under Rule 144A promulgated by the Securities and Exchange Commission
pursuant to the Securities Act of 1933, as amended (the “Offering”), on
substantially the terms set forth in Description of Debentures which is attached
hereto as Attachment 1 (the “Description of Debentures”) (the Offering and the
incurrence of the Debt evidenced by the Debentures are referred to herein as
the (“Transactions”).


 


Based on the Agent’s receipt of the approval of the requisite Banks and
subject to the terms and conditions of this letter, this letter will confirm
that the Banks hereby consent to Transactions on the terms set forth in the
Description of Debentures, subject to the Company’s agreement and
acknowledgement of the modifications to the Credit Agreement as follows:


 


(a)                                  The
following definitions are added to Section 1 of the Credit Agreement as
follows:


 


“Indenture” shall mean an indenture among the Company and the trustee
named therein entered into in connection with the issuance of the Debentures.


 


“Debentures” shall mean the senior unsecured debentures issued by the
Company pursuant to the Indenture in an aggregate amount not to exceed
$150,000,000.


 


(b)                                 Clause
(f) of Section 6.2 is redesignated as clause (g); and the following is added
as new clause (f) of Section 6.2:


 


“(f) such other financial and other reports as delivered to the holders
of the Debentures pursuant to the Indenture;”


 

















 


(c)                                  The
following is added to the Credit Agreement as new Section 7.17:


 


“7.17  Amendment of
Debentures. Amend, modify or otherwise alter any of the material terms and
conditions of the Indenture, the Debentures or any such other documents or
instruments evidencing or otherwise related to the Debt evidenced by the
Debentures (collectively, the “Restricted Items”), or waive (or permit to be
waived) any provision thereof in any material respect, without the prior
written approval of requisite Banks, provided that, without limitation, any of
the following shall be deemed to be a change to a material terms or condition
of the Restricted Items:  (i) any
increase in the interest rate or other amounts payable with respect to the
Debentures; (ii) any change in the dates upon which payments of principal,
interest or other amounts are due on the Debentures or change the principal
amount of the Debentures (other than changes that would extend the maturity
date of such principal, interest or other amounts or reduce the amount of such
payment); and (iii) any change to add or make more restrictive any Event of Default
or covenant with respect to the Restricted Items.”


 


(d)                                 Clause
(m)(i) of Section 8.1 is amended and restated as follows:


 


“(m)(i) If there shall occur an occurrence of a Change of Control, a
“fundamental change” or comparable term or event under any of the Subordinated
Debt Documents or the Indenture;”


 


As an additional condition to the requisite Banks’ consent to the
Transactions, the Company shall pay to each Bank which consents to the issuance
of the Debentures in an aggregate amount of at least $125,000,000 and to the
other Transactions or before the Agent’s close of business on April 9,
2004, a consent fee equal to two basis points on such Bank’s existing
commitment.


 


The Company acknowledges that this Consent and Amendment will be deemed
ineffective and the Company will be required to obtain additional consents from
the Banks if the terms of the Transactions should change or differ
substantially from those set forth in the Description of Debentures attached to
this Consent and Amendment.  In addition,
the Company hereby agrees to deliver to the Agent and the Banks copies of the
Debentures and the Indenture within five (5) days after the original issuance
thereof.


 


Except as set forth in this Consent and Amendment, this Consent and
Amendment shall not be deemed to amend or alter in any respect the terms and
conditions of the Credit Agreement, any of the Notes issued thereunder, or any
of the other Loan Documents, or to constitute a waiver by Agent or any Bank of
any right or remedy under the Credit Agreement, any of the Notes issued
thereunder or any of the other Loan Documents. 
Nor shall this Consent and Amendment constitute an undertaking or
agreement by any Bank to increase the stated dollar amount of its existing
commitment under the Credit Agreement.


 


 

















 


By signing and returning a counterpart of this letter to the Agent, the
Company acknowledges its acceptance of the terms of this letter.


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
                                   ,
  as Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  
	
  Acknowledged and Accepted

  as of April 13, 2004

  	
   

  
	
   

  	
   

  
	
  QUANEX CORPORATION

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Its:

  	
   

  	
   

  	
   

  



 

















 


AUTHORIZATION AND CONSENT


 


The undersigned Bank hereby consents to the issuance of the Debentures
in an amount not to exceed $150,000,000 and to the other Transactions on the
terms and conditions set forth above, and authorizes the Agent to issue the
foregoing Consent and Amendment to the Company.


 


 


	
   

  	
  Harris Trust and Savings Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Date: April 9, 2004