Document:

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.”

Page 30

	 	             (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.”

Page 31

     
        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.  

Page 32

     
        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.] 

Page 33

	 	             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

Page 34EX-10.1

Exhibit 10.1 

AGREEMENT

     
        This
Agreement (this “Agreement”), dated as of June 15, 2004, is by and
between Bayou Steel Corporation, a Delaware corporation (the
“Company”) and Black Diamond Capital Management, L.L.C., an Illinois
limited liability company (“Black Diamond”). 

RECITALS

     
        WHEREAS,
the Company’s Board of Directors adopted a Stockholder Rights Agreement
(the “Rights Agreement”) effective as of May 28, 2004 (the
“Effective Date”), and declared a dividend distribution of one Stock
Purchase Right on each outstanding share of the Company’s Common Stock as
of the record date of May 28, 2004; 

     
        WHEREAS,
as of the Effective Date, Black Diamond beneficially owned 462,983 shares of the
Company’s Common Stock, representing a 22.7% ownership interest in the
Company; 

     
        WHEREAS,
in reliance upon the representations and warranties made by Black Diamond in
this Agreement, and subject to the terms and conditions hereof, the Board of
Directors of the Company is willing to amend the Rights Agreement to permit
Black Diamond to own up to 585,316 shares of the Company’s Common Stock,
such amendment to be effective upon the execution of this Agreement; and 

     
        WHEREAS,
in consideration of the Board’s undertaking to amend the Rights Agreement,
the Company and Black Diamond have agreed to enter into this Agreement. 

     
        NOW,
THEREFORE, in consideration of the foregoing and the respective representations,
warranties, covenants and agreements set forth in this Agreement, the parties
hereto agree as follows: 

     
        Section
1.Representations  and  Warranties of Black  Diamond.  Black Diamond  represents  and
warrants to the Company, as of the date hereof, as follows: 

             
             (a)
      Black Diamond is the beneficial owner,  either directly or indirectly  through one
of its affiliates, of not more than 585,316 shares of Common Stock, $.01 par value, of
the Company (the “Shares”).  

             
             (b)
      Except for any  agreements  that may exist between Black Diamond and any affiliate
 under its control, Black Diamond is not a party to any voting trust, proxy or other
agreement, arrangement, undertaking or understanding with respect to the voting of the
Shares, nor does it have the power to vote or direct the voting of any shares of the
Company’s Common Stock other than the Shares.  

             
             (c)
      All of the Shares now owned by Black Diamond were acquired for  investment
 purposes only and without any intention of changing, exercising or influencing control
of the Company, and there has been no change in that intention since the date of the
acquisition of such Shares. All statements contained in Item 4 of the Schedule 13D filed
by Black Diamond with the Securities Exchange Commission on March 8, 2004, continue to be
true and correct in all respects as of the date of this Agreement.  

             
             (d)
      All  shares  of  Company  Common  Stock now  owned by Black  Diamond,  or now owned
by an affiliate of Black Diamond, are owned solely for the account of Black Diamond or
such affiliate, respectively, and neither Black Diamond nor any of its affiliates has
acted as an agent, broker, or dealer for any unaffiliated third party with respect to the
Shares. Neither Black Diamond nor any of its affiliates has at any time acted in concert
with any third party with respect to the acquisition, disposition or voting of any shares
of the Company’s Common Stock for any purpose, including without limitation for the
purpose of changing, exercising or influencing control of or over the Company.  

Page 35

     
        Section
2.Covenants of Black Diamond. Black Diamond covenants and agrees as follows: 

             
             (a)
      So long as the Rights  Agreement  remains in effect,  Black  Diamond  will not,
 and will cause its affiliates not to, directly or indirectly, acquire any shares of the
Company’s Common Stock in addition to the 585,316 shares of Common Stock that it
owns as of the date of this Agreement, except for any shares of Common Stock it may
acquire by way of stock split, stock dividend or other distributions (including any
additional shares acquired by participation in a rights offering or other offering by the
Company) made available generally to all holders of the Company’s Common Stock. In
addition, in the event the Company issues (other than issuances of Common Stock pursuant
to options issued prior to May 31, 2004), in one or more transactions, Common Stock or
securities convertible into Common Stock, Black Diamond and its affiliates shall be
permitted to purchase additional shares of Common Stock in order to increase its
percentage ownership (on a fully diluted basis assuming conversion and exercise of all
securities convertible or exercisable into Common Stock) up to the percentage ownership
level of the Common Stock held by Black Diamond and its affiliates immediately prior to
any such issuance of Common Stock (a “Pre-Issuance Percentage”); provided,
that Black Diamond agrees, in the event Black Diamond or its affiliates purchases
additional shares of Common Stock pursuant to this sentence in connection with the
issuance of convertible securities by the Company, that Black Diamond agrees not to vote
and to cause its affiliates not to vote, a number of shares of Common Stock in excess of
Pre-Issuance Percentage in effect at the time of such vote. Neither Black Diamond nor any
of its affiliates shall take any action which would cause it or such affiliate, either
individually or in association with others, to become an Acquiring Person under the
Rights Agreement or for a Stock Acquisition Date to have occurred, in each case, as such
terms are defined in the Rights Agreement in effect as of the date hereof after giving
effect to the amendment.  

             
             (b)
      Black  Diamond  will not  confer  any proxy to any third  party to vote any shares
of the Company’s Common Stock, and the Company shall be entitled to disregard any
proxy so granted, to the extent that the aggregate number of shares voted by Black
Diamond and the holder of such proxy would exceed 462,983 shares of the Company’s
Common Stock, provided, however, that this covenant shall not be deemed to be violated to
the extent that Black Diamond solely grants a revocable proxy or consent to another
person in response to a public proxy or consent solicitation conducted by such person
that is made pursuant to the applicable rules and regulations under the Securities and
Exchange Act of 1934.  

     
        Section
3. Amendment  to Rights  Plan.  Within ten days of the date of this  Agreement,  the
Company will amend the Rights Agreement, effective as of the date hereof, to revise the
definition of Exempt Person to conform with the definition set forth in Appendix A to
this Agreement.  

     
        Section
4. Governing Law. This Agreement shall be governed by Delaware law. 

* * * * * * * 

     
        IN
WITNESS WHEREOF, the Company and Black Diamond have caused this Agreement to be
signed as of the date first written above. 

			BAYOU STEEL
      CORPORATION

      

      

      By: /s/ Charles W. McQueary

             ——————————————

      Name: Charles W. McQueary

      Title: Chairman

			BLACK DIAMOND CAPITAL
MANAGEMENT, L.L.C.

      

      

      By: /s/ S. A. Deckoff

             ——————————————

      Name: S. A. Deckoff

      Title: Principal

Page 36

Appendix A 

     
        ”Exempt
Person” shall mean each of the following: (i) the Company or any Subsidiary
of the Company, in each case including, without limitation, in its fiduciary
capacity, or any employee benefit plan of the Company or of any Subsidiary of
the Company, or any entity or trustee holding Common Stock for or pursuant to
the terms of any such plan or for the purpose of funding any such plan or
funding other employee benefits for employees of the Company or of any
Subsidiary of the Company and (ii) any stockholder (but not any transferee or
successor to such stockholder) who on the date of the adoption of this Rights
Agreement beneficially owns a number of shares of Common Stock that equals or
exceeds the Threshold Percentage of shares of Common Stock of the Company, (iii)
in the case of Black Diamond Capital Management, L.L.C. and any of its
affiliates that it controls (collectively, “Black Diamond”) (but not
any transferee or successor to Black Diamond), Black Diamond shall be permitted,
subject to the terms and conditions of the Agreement dated June 14, 2004 between
the Company and Black Diamond, to beneficially own not more than 585,316 shares
of Common Stock (except as permitted in Section 2(a) of an Agreement between
Black Diamond and the Company dated June 16, 2004) provided in the case of (ii)
above that if such stockholder acquires any additional shares of Common Stock of
the Company on or after the Effective Date of this Rights Agreement, such
stockholder will no longer be an Exempt Person, and further provided in the case
of (iii) above that if Black Diamond acquires or becomes the Beneficial Owner of
any additional shares of Common Stock of the Company (except as permitted by
Section 2(a) of the Agreement between Black Diamond and the Company dated June
16, 2004) it will no longer be an Exempt Person. 

Page 37

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