REVOLVING PROMISSORY NOTE
(this Note)

FOR VALUE RECEIVED, FRIEDMAN INDUSTRIES, INC. (Borrower), a Texas corporation, promises to pay to the order of JPMORGAN CHASE BANK, formerly known as THE CHASE MANHATTAN BANK (Bank) on or before April 1, 2006 (the Termination Date), at its banking house at 712 Main Street, P.O. Box 2558, Houston, Texas, or at such other location as Bank may designate, in lawful money of the United States of America, the lesser of: (i) the principal sum of SIX MILLION AND NO/100THS UNITED STATES DOLLARS (U.S. $6,000,000.00 or (ii) the aggregate unpaid principal amount of all loans made by Bank (each such loan being a Loan), which may be outstanding on the Termination Date. Each Loan shall be due and payable on the maturity date agreed to by Bank and Borrower with respect to such Loan (the Maturity Date). In no event shall any Maturity Date fall on a date after the Termination Date. This Note is the Revolving Note referenced in Section 1.1 of the Letter Agreement (as defined below). Capitalized terms used but not otherwise defined in this Note shall have the same meanings here as assigned to them in the Letter Agreement. Subject to the terms and conditions of this Note and the Letter Agreement, Borrower may borrow, repay and reborrow all or any part of the credit provided for herein at any time before the Termination Date, there being no limitation on the number of Loans made so long as the total unpaid principal amount at any time outstanding does not exceed the Commitment.