Document:

Filed by Bowne Pure Compliance

 

Exhibit 4.7

First Amendment to Indenture

This First Amendment to Indenture is effective as of February 25, 2008 (this
“Amendment”), between Quanex Corporation, a Delaware corporation, as issuer (the
“Company”), and Union Bank of California, N.A., a national banking association,
as trustee (the “Trustee”).

W I T N E S S E T H:

Whereas, the Company has heretofore entered into an Indenture, dated as of May 5,
2004 (as amended in accordance with its applicable provisions by supplements and amendments of
general application, the “Indenture”), with the Trustee;

Whereas, all capitalized terms used and not otherwise defined herein shall have the
meanings assigned in the Indenture;

Whereas, under the Indenture, the Company and the Trustee may amend or supplement the
Indenture to cure any ambiguity, omission, defect or inconsistency without the consent of the
Holders;

Whereas, the Company has entered into an Agreement and Plan of Merger, dated as of
November 18, 2007, with Gerdau S.A., a corporation organized under the laws of the Federative
Republic of Brazil (“Gerdau”), pursuant to which its wholly owned subsidiary, Gerdau
Delaware, Inc., a Delaware corporation, will merge with and into the Company, with the Company
being the surviving entity (the “Merger”);

Whereas, as a result of the Merger, the Company’s Common Stock will no longer trade
on the New York Stock Exchange after the time of the Merger;

Whereas, if a Holder wishes to convert Securities with less than 20 Trading Days
remaining prior to the last day on which the Common Stock trades, the Indenture currently does not
provide a method for determining the Cash Settlement Averaging Period;

Whereas, the Company proposes to cure such omission under the Indenture with this
Amendment;

Now, Therefore, in consideration of the agreements and obligations set forth
herein and for other good and valuable consideration, the sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:

 

 

 

Section 6.13(d) of the Indenture is amended and restated in its entirety as follows:

(d)(i) If any Trading Day during a Cash Settlement Averaging Period is not an Undisrupted
Trading Day, then determination of the price for that day shall be delayed until the next
Undisrupted Trading Day and such day shall not count as one of the 20 Trading Days that constitute the Cash Settlement Averaging Period. If this results in the Cash Settlement
Averaging Period extending beyond the eighth Trading Day after the last of the original 20 Trading
Days in the Cash Settlement Averaging Period, then the Company shall determine all prices for all
delayed and undetermined prices on that eighth Trading Day based on its good faith estimate of the
value of the Common Stock on that date. In the event that any Trading Day during the Cash
Settlement Averaging Period beginning on the date that is the 23rd Trading Day prior to
the Final Maturity Date is not an Undisrupted Trading Day, settlement will occur after the Final
Maturity Date.

(ii) In the event that the Common Stock stops trading during the 20 Trading Days that
constitute the Cash Settlement Averaging Period as a result of the merger of the Company, the Cash
Settlement Averaging Period shall be the last 20 Trading Days on which the Common Stock trades. In
this circumstance, settlement in cash or a combination of cash and Common Stock shall occur on the
third Business Day following the final Trading Day of such Cash Settlement Averaging Period. If
any Trading Day during such Cash Settlement Averaging Period is not an Undisrupted Trading Day,
such day shall not count as one of the last 20 Trading Days for the purposes of determining such
Cash Settlement Averaging Period.

[Remainder of page intentionally left blank.]

 

 

 

IN WITNESS WHEREOF, the parties have executed this Amendment effective as of the day and year
first written above.

SIGNATURES

	 	 	 	 	 
	 	COMPANY: 

Quanex Corporation 

 	 
	 	By:  	/s/ John J. Mannion
 	 
	 	 	Name:  	John J. Mannion                     	 
	 	 	Title:  	Vice President – Treasurer 	 
	 
	 	TRUSTEE: 

Union Bank of California, N.A. 

 	 
	 	By:  	/s/ Hans Helley
 	 
	 	 	Name:  	Hans Helley           	 
	 	 	Title:  	Vice Presidentex10-1.htm

    Exhibit 10.1

      REVOLVING
LINE OF CREDIT AGREEMENT

      

                 This
Revolving Line of Credit Agreement (the "AGREEMENT") is made and entered into in
this 29th day of February 2008, by and between Sands Brothers Venture Capital
III, LLC ("LENDER"), and XA, Inc., a Nevada Corporation, with a business address
of 875 North Michigan Avenue, Suite 2626, Chicago, Illinois, 60611 (the
"BORROWER") and The Experiential Agency, Inc., an Illinois corporation, with a
business address of 875 North Michigan Avenue, Suite 2626, Chicago, Illinois,
60611 (the “SUBSIDIARY”) each a “PARTY” and collectively the
“PARTIES.”

      

                 In
consideration of the mutual covenants and agreements contained herein, which the
Parties each acknowledge receipt of, the Parties agree as follows:

      

       1.          LINE OF CREDIT. Lender hereby
establishes for a period extending to June 29, 2008 (the "MATURITY DATE") a
revolving line of credit (the "CREDIT LINE") for Borrower in the principal
amount of Two Hundred Thousand Dollars ($200,000.00) (the "CREDIT LIMIT"). In
connection herewith, Borrower shall execute and deliver to Lender a Promissory
Note in the initial amount of One Hundred Thousand Dollars ($100,000) (the
“INITIAL ADVANCE,” and the “NOTE,” a copy of which is attached hereto as Exhibit A), which
amount shall be payable to Borrower immediately upon the Parties entry into this
Agreement.  Any additional funds advanced by Lender to Borrower from
time to time, pursuant the terms of this Agreement (each an “ADVANCE”) shall be
evidenced by a Promissory Note, substantially similar to the Note (the “FURTHER
NOTES”).

      

      2.           ADVANCES. Any request for an
Advance may be made from time to time and in such amounts as Borrower may
choose; provided, however, any requested Advance will not, when added to the
outstanding principal balance of all previous Advances, exceed the Credit Limit.
Requests for Advances may be made orally or in writing by such officer of
Borrower authorized by it to request such Advances. Until such time as Lender
may be notified otherwise, Borrower hereby authorizes its President, Joseph
Wagner and its Chief Operating Officer, Jean Wilson, to request Advances. Lender
may deposit or credit the amount of any requested Advance to Borrower's checking
account with Lender. Lender may refuse to make any requested Advance if an
Acceleration Event and/or an Event of Default (as defined below) has occurred
and is continuing hereunder either at the time the request is given or the date
the Advance is to be made, or if an event has occurred or condition exists
which, with the giving of notice or passing of time or both, would constitute an
event of default hereunder as of such dates.  The funds from the
Advances will be used by the Borrower for operating expenses in connection with
the operations of the Subsidiary, and will be immediately transferred to the
Subsidiary as a capital contribution, which expenses are set forth in greater
detail on Schedule
1.

      

      3.           INTEREST. All sums advanced
pursuant to this Agreement shall bear interest from the date each Advance is
made until paid in full at the rate of twelve percent (12%) per annum, simple
interest (the "EFFECTIVE RATE"), as provided in further detail in the Note,
provided however, that in the event any payment is not made within three (3)
days of the date such payment is due under the Note or any Further Notes, all
outstanding notes shall bear interest at the rate of fifteen percent (15%) per
annum and such failure to pay the required payment shall be characterized as an
Acceleration Event as such term is defined in the Note and Further
Notes.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
 

      4.           REPAYMENT. Borrower shall pay
accrued interest on the outstanding principal balance on a monthly basis
commencing on April 1, 2008, and continuing on the first day of each month
thereafter. The entire unpaid principal balance, together with any accrued
interest and other unpaid charges or fees hereunder, shall be due and payable on
the Maturity Date as defined in the Note. All payments shall be made to Lender
at such place as Lender may, from time to time, designate. All payments received
hereunder shall be applied, first, to any costs or expenses incurred by Lender
in collecting such payment or to any other unpaid charges or expenses due
hereunder; second, to accrued interest; and third, to principal. Borrower may
prepay the principal amount of the Note at any time without
penalty.

      

      5.           REPRESENTATIONS AND
WARRANTIES. In order to induce Lender to enter into this Agreement and to
make the advances provided for herein, Borrower represents and warrants to
Lender as follows:

      

      
        	
                 
      

              	
                a.

              	
                Borrower
      is a duly organized, validly existing, and in good standing under the laws
      of the State of Nevada;

              

      

      

      
        	
                 
      

              	
                b.

              	
                Borrower
      has the authority and power to execute and deliver any document required
      hereunder and to perform any condition or obligation imposed under the
      terms of such documents;

              

      

      

      
        	
                 
      

              	
                c.

              	
                The
      execution, delivery and performance of this Agreement and each document
      incident hereto will not violate any provision of any applicable law,
      regulation, order, judgment, decree, Articles of Incorporation, Bylaws,
      indenture, contract, agreement, or other undertaking to which Borrower is
      a party, or which purports to be binding on Borrower or its assets and
      will not result in the creation or imposition of a lien on any of its
      assets;

              

      

      

      
        	
                 
      

              	
                d.

              	
                There
      is no action, suit, investigation, or proceeding pending or, to the
      knowledge of Borrower, threatened, against or affecting Borrower or any of
      its assets which, if adversely determined, would have a material adverse
      affect on the financial condition of Borrower or the operation of its
      business;

              

      

      

      
        	
                 
      

              	
                e.

              	
                Neither
      the Borrower or the Subsidiary is currently in default of the Forbearance
      Agreement or any other agreements or documents entered into with LaSalle
      Bank National Association, and no event which with the passage
      of time or the giving of notice or both could become an event of default
      under the Forbearance Agreement, exists on the date hereof;
      and

              

      

      
      

      
        	
                 
      

              	
                f.

              	
                The
      Borrower shall take all actions necessary to ensure that the Subsidiary
      shall have sufficient available funds in United States Dollars to pay and
      discharge, when due and payable, any and all of the obligations or
      liabilities of the Subsidiary, when
due.

              

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      6.           EVENTS OF DEFAULT. An “EVENT
OF DEFAULT” will occur if any of the following events occurs:

      

      
        	
                 
      

              	
                a.

              	
                Any
      representation or warranty made by Borrower or the Subsidiary in this
      Agreement or in connection with any borrowing or request for an Advance
      hereunder is untrue in any material respect at the time when
      made;

              

      

      

      
        	
                 
      

              	
                b.

              	
                Default
      by Borrower or the Subsidiary in the observance or performance of any
      other covenant or agreement contained in this Agreement, other than a
      default constituting a separate and distinct event of default under this
      Paragraph 6;

              

      

      

      
        	
                 
      

              	
                c.

              	
                Filing
      by Borrower or the Subsidiary of a voluntary petition in bankruptcy
      seeking reorganization, arrangement or readjustment of debts, or any other
      relief under the Bankruptcy Code as amended or under any other insolvency
      act or law, state or federal, now or hereafter existing;
  or

              

      

      

      
        	
                 
      

              	
                d.

              	
                Filing
      of an involuntary petition against Borrower or the Subsidiary in
      bankruptcy seeking reorganization, arrangement or readjustment of debts,
      or any other relief under the Bankruptcy Code as amended, or under any
      other insolvency act or law, state or federal, now or hereafter existing,
      and the continuance thereof for sixty (60) days undismissed, unbonded, or
      undischarged.

              

      

      

      7.           REMEDIES. Upon the occurrence
of an Event of Default as defined above or an Acceleration Event (as defined in
the Note), Lender may declare the entire unpaid principal balance, together with
accrued interest thereon, to be immediately due and payable without presentment,
demand, protest, or other notice of any kind, as described in further detail in
the Note. Lender may suspend or terminate any obligation it may have hereunder
to make additional Advances. To the extent permitted by law, Borrower waives any
rights to presentment, demand, protest, or notice of any kind in connection with
this Agreement. No failure or delay on the part of Lender in exercising any
right, power, or privilege hereunder will preclude any other or further exercise
thereof or the exercise of any other right, power, or privilege. The rights and
remedies provided herein are cumulative and not exclusive of any other rights or
remedies provided at law or in equity.
Borrower agrees to pay all costs of collection incurred by reason of the
default, including court costs and reasonable attorney's
fees.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      8.           NOTICE. Any written notice
will be deemed effective on the date such notice is placed, first class, postage
prepaid, in the United States mail, addressed to the party to which notice is
being given at the addresses above.

      

      
        	
                9.

              	
                GENERAL
      PROVISIONS.

              

      

      

      
        	
                 
      

              	
                a.

              	
                All
      representations and warranties made in this Agreement and the Note and in
      any certificate delivered pursuant thereto shall survive the execution and
      delivery of this Agreement and the making of any loans hereunder. This
      Agreement will be binding upon and inure to the benefit of Borrower and
      Lender, their respective successors and assigns, except that Borrower may
      not assign or transfer its rights or delegate its duties hereunder without
      the prior written consent of Lender. This Agreement, the Promissory Note,
      and all documents and instruments associated herewith will be governed by
      and construed and interpreted in accordance with the laws of the State of
      New York. Time is of the essence
hereof.

              

      

      

      
        	
                 
      

              	
                b.

              	
                This
      Agreement constitutes the entire agreement of the Parties hereto and
      expressly supersedes all prior and contemporaneous understandings and
      commitments, whether written or oral, with respect to the subject matter
      hereof.  No variations, modifications, changes or extensions of
      this Agreement or any other terms hereof shall be binding upon any Party
      hereto unless set forth in a document duly executed by such Party or an
      authorized agent or such Party.

              

      

      

      
        	
                 
      

              	
                c.

              	
                No
      failure on the part of any Party to enforce any provisions of this
      Agreement will act as a waiver of the right to enforce that
      provision.

              

      

      

      
        	
                 
      

              	
                d.

              	
                Section
      headings are for convenience only and shall not define or limit the
      provisions of this Agreement.

              

      

      

      
        	
                 
      

              	
                e.

              	
                This
      Agreement may be executed in several counterparts, each of which is an
      original.  It shall not be necessary in making proof of this
      Agreement or any counterpart hereof to produce or account for any of the
      other counterparts.  A copy of this Agreement signed by one
      Party and faxed to another Party shall be deemed to have been executed and
      delivered by the signing Party as though an original.  A
      photocopy of this Agreement shall be effective as an original for all
      purposes.

              

      

      

      [Remainder
of page left intentionally blank. Signature page follows.]

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      IN WITNESS WHEREOF, Borrower
and Lender have executed this Agreement as of the day and year first above
written.

      

      “BORROWER”

      

      

      XA, Inc.

      

      

      /s/
Joseph Wagner

      Joseph
Wagner

      Chief
Executive Officer

      

      “SUBSIDIARY”

      

      Experiential Agency,
Inc.

      

      

      /s/
Joseph Wagner

      Joseph
Wagner

      Chief
Executive Officer

       

      

      “LENDER”

      

      Sands
Brothers Venture Capital III, LLC

      

      By: /s/
Scott Baily

      

      Its:
Cheif Operating Officer

      

      Printed
Name: Scott Baily

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Schedule
1

      

      

      
        	 
      	 
      	 
      
	 
      	
                $29,700

              	
                –
      Letter of Credit - GOLUB

              
	 
      	
                $50,000

              	
                –
      Alice’s Garden

              
	 
      	
                $32,000

              	
                –
      Legal Fees (Loev, Levin)

              
	 
      	
                $45,000

              	
                –
      AV Vendor - Finelite

              
	 
      	
                $12,500

              	
                –
      Pollard Kelley – Audit

              
	 
      	
                $75,000

              	
                –
      Payroll

              
	 
      	
                $45,800

              	
                –
      Rents

              
	 
      	
                $10,000

              	
                –
      LaSalle Bank

              
	
                Total

              	
                $300,000

              	 
      

      

      

      

      

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      EXHIBIT
A

      

      PROMISSORY
NOTE

      

      
        	
                US
    $100,000

              	
                February
      29, 2008

              

      

      

      

      FOR VALUE RECEIVED, the
undersigned, XA, Inc. ("Maker"), hereby promises to pay to the order of Sands
Brothers Venture Capital III, LLC ("Payee"), the principal sum of One Hundred
Thousand Dollars ($100,000), in lawful money in United States of America, which
shall be legal tender, bearing interest and payable as provided
herein.  This Note is entered into in connection with and shall be
subject to the terms and conditions of the Revolving Line of Credit Agreement,
which this Note is attached to as Exhibit A, thereto (the “Line of
Credit”).

      

      
        	
                1.

              	
                Interest
      on the unpaid balance of this Note shall bear interest at the rate of
      Twelve Percent (12%) per annum, which interest shall accrue from the
      effective date until the Maturity Date (as defined below), unless prepaid
      prior to such Maturity Date. All past-due principal and interest (which
      failure to pay such amounts shall be defined herein as an “Acceleration
      Event”) shall bear interest at the rate of fifteen percent (15%) per annum
      until paid in full.  Interest will be computed on the basis of a
      360-day year.

              

      

      

      
        	
                2.

              	
                The
      principal amount of this Note shall be due and payable on June 29, 2008
      (the “Maturity Date”).

              

      

      

      
        	
                3.

              	
                This
      Note may be prepaid in whole or in part, at any time and from time to
      time, without premium or penalty.  If any amount of this Note is
      not paid when due under this Note, or otherwise cured as provided in the
      Line of Credit, or if any Acceleration Event as defined under the Line of
      Credit shall occur, such event shall be an Acceleration Event under this
      Note.  Upon an Acceleration Event, the Payee shall have the
      right to provide for the entire amount of unpaid principal and interest on
      this Note to be immediately due and payable, by providing the Maker
      fifteen (15) days prior written notice of Payee’s desire to make the
      entire outstanding amount of principal and interest due on this Note
      immediately payable, which Note shall then be payable by the Maker after
      the expiration of the fifteenth (15th)
      day following the receipt of such notice by the Maker (an “Event of
      Default”).

              

      

      

      
        	
                4.

              	
                If
      any payment of principal or interest on this Note shall become due on a
      Saturday, Sunday or any other day on which national banks are not open for
      business, such payment shall be made on the next succeeding business day.
      This Note shall be binding upon and inure to the benefit of the Payee
      named herein and Payee’s respective successors and
      assigns.  Each holder of this Note, by accepting the same,
      agrees to and shall be bound by all of the provisions of this
      Note.  Payee may
      assign this Note or any of its rights, interests or obligations to this
      Note without the prior written approval of
  Maker.

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
      

      

      
        	
                 
      

              	
                5.

              	
                No
      provision of this Note shall alter or impair the obligation of Maker to
      pay the principal of and interest on this Note at the times, places and
      rates, and in the coin or currency, herein
  prescribed.

              

      

      

      
        	
                 
      

              	
                6.

              	
                The
      Maker will do or cause to be done all things reasonably necessary to
      preserve and keep in full force and affect its corporate existence, rights
      and franchises and comply with all laws applicable to the Maker, except
      where the failure to comply could not reasonably be expected to have a
      material adverse effect on the Maker. Failure to comply with this
      provision shall constitute an Event of Default. Notwithstanding anything
      to the contrary in this Note or any other agreement entered into in
      connection herewith, whether now existing or hereafter arising and whether
      written or oral, it is agreed that the aggregate of all interest and any
      other charges constituting interest, or adjudicated as constituting
      interest, and contracted for, chargeable or receivable under this Note or
      otherwise in connection with this loan transaction, shall under no
      circumstances exceed the Maximum Rate (as defined
  below).

              

      

      

      
        	
                7.

              	
                In
      the event the maturity of this Note is accelerated by reason of an Event
      of Default under this Note, any other agreement entered into in connection
      herewith or therewith, or by voluntary prepayment by Maker or otherwise,
      then earned interest may never include more than the Maximum Rate
      allowable by law, computed from the dates of each advance of the loan
      proceeds outstanding until payment.  If from any circumstance
      any holder of this Note shall ever receive interest or any other charges
      constituting interest, or adjudicated as constituting interest, the
      amount, if any, which would exceed the Maximum Rate shall be applied to
      the reduction of the principal amount owing on this Note, and not to the
      payment of interest; or if such excessive interest exceeds the unpaid
      balance of principal hereof, the amount of such excessive interest that
      exceeds the unpaid balance of principal hereof shall be refunded to
      Maker.  In determining whether or not the interest paid or
      payable exceeds the Maximum Rate, to the extent permitted by applicable
      law (i) any nonprincipal payment shall be characterized as an expense, fee
      or premium rather than as interest; and (ii) all interest at any time
      contracted for, charged, received or preserved in connection herewith
      shall be amortized, prorated, allocated and spread in equal parts during
      the period of the full stated term of this Note.  The term
      "Maximum Rate" shall mean the maximum rate of interest allowed by
      applicable federal or state law.

              

      

      

      
        	
                8.

              	
                Except
      as provided herein, Maker and any sureties, guarantors and endorsers of
      this Note jointly and severally waive demand, presentment, notice of
      nonpayment or dishonor, notice of intent to accelerate, notice of
      acceleration, diligence in collecting, grace, notice and protest, and
      consent to all extensions without notice for any period or periods of time
      and partial payments, before or after maturity, without prejudice to the
      holder.  The holder shall similarly have the right to deal in
      any way, at any time, with one or more of the foregoing parties without
      notice to any other party, and to grant any such party any extensions of
      time for payment of any of said indebtedness, or to grant any other
      indulgences or forbearance whatsoever, without notice to any other party
      and without in any way affecting the personal liability of any party
      hereunder.  If any efforts are made to collect or enforce this
      Note or any installment due hereunder, the undersigned agrees to pay all
      collection costs and fees, including reasonable attorney's
      fees.

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
      

      

      
        	
                9.

              	
                A
      copy of this Promissory Note signed by one party and faxed to another
      party shall be deemed to have been executed and delivered by the signing
      party as though an original.  A photocopy of this Promissory
      Note shall be effective as an original for all
  purposes.

              

      

      

      
        	
                10.

              	
                This
      Note shall be governed by and construed exclusively in accordance with the
      laws of the State of New York without regard to the conflicts of laws
      principles thereof. The parties hereto hereby agree that any suit or
      proceeding arising directly and/or indirectly pursuant to or under this
      instrument or the consummation of the transactions contemplated hereby,
      shall be brought solely in a federal or state court located in the
      Southern District of New York. By its execution hereof, the parties hereby
      covenant and irrevocably submit to the in personam jurisdiction of the
      federal and state courts located in the City, County and State of New York
      and agrees that any process in any such action may be served upon any of
      them personally, or by certified mail or registered mail upon them or
      their agent, return receipt requested, with the same full force and effect
      as if personally served upon them in New York City. The parties hereto
      waive any claim that any such jurisdiction is not a convenient forum for
      any such suit or proceeding and any defense or lack of in personam
      jurisdiction with respect thereto. In the event of any such action or
      proceeding, the party prevailing therein shall be entitled to payment from
      the other party hereto of its reasonable and documented counsel fees and
      disbursements in an amount judicially
  determined.

              

      

      

      

      IN WITNESS WHEREOF, Maker has
duly executed this Note as of the day and year first written above.

      

      

      XA, Inc.

      

      

      /s/
Joseph Wagner

      Joseph
Wagner

      Chief
Executive Officer

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