FIRST AMENDMENT TO
DEBTOR-IN-POSSESSION CREDIT AGREEMENT
THIS FIRST AMENDMENT TO DEBTOR-IN-POSSESSION CREDIT AGREEMENT (this
"Amendment") is entered into as of this ____ day of August, 2004 by and among
Keystone Consolidated Industries, Inc., a Delaware corporation (the "Company"),
FV Steel and Wire Company, a Wisconsin corporation ("FV Steel"), Sherman Wire
Company (f/k/a DeSoto, Inc.), a Delaware corporation ("Sherman Wire"), Sherman
Wire of Caldwell, Inc., a Nevada corporation ("Caldwell"), J.L. Prescott
Company, a New Jersey corporation ("Prescott"), DeSoto Environmental Management,
Inc., a Delaware corporation ("DeSoto"; the Company, FV Steel, Sherman Wire,
Caldwell, Prescott and DeSoto are, collectively, the "Borrowers" and each,
individually, a "Borrower"), the Lenders (as such term is defined below) party
hereto, and EWP Financial LLC, a Delaware limited liability company ("EWP
Financial"), in its capacity as agent for the Lenders (the "Agent"). Capitalized
terms used and not otherwise defined herein shall have the meanings ascribed to
them in the Credit Agreement (as such term is defined below).
RECITALS
WHEREAS, on February 26, 2004, the Borrowers filed voluntary petitions for
relief under the Bankruptcy Code with the Bankruptcy Court;
WHEREAS, on February 27, 2004, the Borrowers entered into that certain
Debtor-In-Possession Credit Agreement among the Borrowers, entities party
thereto from time to time as lenders (the "Lenders"), and the Agent (as amended,
restated, supplemented or otherwise modified from time to time, the "Credit
Agreement"), pursuant to which the Lenders agreed to make funds available to the
Borrowers from time to time in accordance with the terms and conditions set
forth therein;
WHEREAS, the Borrowers wish to amend the terms of the Credit Agreement; and
WHEREAS, the Agent and the Lenders are willing to amend the Credit
Agreement on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein, the parties hereto hereby agree as follows:
SECTION 1. AMENDMENTS.
1.1 The definition of "Expiration Date" in Article I of the Credit
Agreement is hereby deleted in its entirety and replaced with the following:
"Expiration Date" means (a) the earliest of (i) December 31, 2004; (ii) the
Plan Effective Date; (iii) the dismissal of the Case; (iv) closing of a Sale of
EWP or (v) Lenders' election, in their sole discretion, to terminate the
Commitments upon the occurrence and during the continuance of an Event of
Default or (b) such later date as may be selected by all of the Lenders in their
sole discretion and without further order of the Bankruptcy Court.
1.2 Section 2.1(b)(iii), Section 6.2(b)(ii) and the definition of
"Commitment Fee" in Article I of the Credit Agreement are hereby amended by
deleting the words "the Sale of EWP" where such words appear therein and
substituting therefor the words "a Sale of EWP."
1.3 Section 3.6 of the Credit Agreement is hereby amended by (i) deleting
the word "or" at the end of Section 3.6(q), (ii) deleting Section 3.6(r) in its
entirety and (iii) inserting the following Sections 3.6(r) and 3.6(s):
(r) there shall be a Material Adverse Change (for purposes of this Section
3.6(r), "Material Adverse Change" shall mean any event, change or effect that
individually or when taken together with all other events, changes or effects is
materially adverse to the business, assets (including intangible assets),
liabilities, financial condition, or results of operations of the Borrowers and
EWP taken as a whole, excluding any such event, change or effect resulting
solely from (A) changes or effects that generally affect the industry in which
the Borrowers and EWP operate and not uniquely related to the Borrowers and EWP,
(B) changes in general economic regulatory or political conditions not uniquely
related to any of the Borrowers and EWP (including terrorism or the escalation
of any war whether declared or undeclared or other hostilities), or (C) changes
arising out of, or attributable to, the announcement of the execution of this
Amendment); provided, however, that nothing in this Section 3.6(r) shall limit
the right of any party in interest in the Case to object to the characterization
of any event, change or effect as a Material Adverse Change; provided, further,
that the Agent and the Lenders acknowledge and agree that (x) the Bankruptcy
Court shall have exclusive jurisdiction to resolve any such objection, and (y)
during the pendency of any such objection (or an appeal of an adjudication
thereof), the Agent and the Lenders may not exercise any right or remedy
available to them as a result of the Material Adverse Change characterization to
which such objection has been made until such objection (or the applicable
appeal of the adjudication thereof) is resolved by final order; provided that
nothing in this clause (y) of Section 3.6(r) shall affect or limit any exercise
of the rights and remedies of the Agent and the Lenders upon the occurrence of
any Event of Default other than the Material Adverse Change characterization to
which objection has been made; or
(s) any of the following events shall not have occurred by the number of
days after the Closing Date specified opposite such event:
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Number of Days after the Closing Date Event
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18 days Entry of a Permanent Financing Order satisfactory
to the Lenders in their sole discretion
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15 days Entry of a Labor Costs Order
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1.4 Section 6.1(i) of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:
(i) Intentionally omitted.
SECTION 2 CONDITIONS PRECEDENT.
This Amendment shall become effective and any Event of Default arising
under Section 6.1(i) of the Credit Agreement (prior to the amendment thereof)
shall be deemed to be cured on the date on which all of the following conditions
have been satisfied:
a. Counterparts of this Amendment shall have been duly executed by
each Borrower, the Lender and the Agent and delivered to the Agent;
b. An order shall have been entered by the Bankruptcy Court which
approves the terms and provisions of this Amendment and authorizes the
Borrowers to enter into this Amendment, which order shall (i) be in full
force and effect, (ii) be in form and substance satisfactory to the Agent
and (iii) not have been amended, modified, stayed, vacated, reversed or
rescinded in any respect; and
c. Agent shall have received acknowledgements and/or amending
documentation satisfactory to the Agent and the Lenders in their sole
discretion from each of the Borrowers and from Congress Financial
Corporation (Central) ("Congress"), confirming that EWP Financial shall
have no obligation to fund the additional Participation of $3,000,000
pursuant to Section 4.1(ii) of the Participation Agreement dated February
27, 2004 between EWP Financial and Congress.
SECTION 3. REPRESENTATIONS AND WARRANTIES.
Each Borrower hereby represents and warrants to the Agent and the Lenders
that, as of the date hereof and after giving effect to this Amendment:
3.1 Subject to approval by the Bankruptcy Court, this Amendment and the
Credit Agreement, as amended hereby, constitute legal, valid and binding
agreements of such Borrower, enforceable against such Borrower in accordance
with their respective terms.
3.2 All representations and warranties set forth in the Credit Agreement
shall be true and correct as of the date of delivery of this Amendment, and upon
the effectiveness of this Amendment, unless and to the extent that any such
representation and warranty is stated to relate solely to an earlier date, in
which case such representation and warranty shall be true and correct in all
material respects as of such earlier date.
3.3 No Default or Event of Default shall have occurred and be continuing
under the Credit Agreement.
SECTION 4 MISCELLANEOUS.
4.1 This Amendment may be executed in one or more counterparts and when
signed by all of the parties to this Amendment shall constitute a single binding
agreement, subject to approval by the Bankruptcy Court. Delivery of a
counterpart of this Amendment by facsimile shall be effective as delivery of a
manually executed counterpart of this Amendment.
4.2 Except as expressly provided in this Amendment, the terms and
provisions of the Credit Agreement shall remain in full force and effect and are
hereby affirmed, confirmed and ratified in all respects.
4.3 Any term, covenant, agreement or condition of this Amendment may be
amended only by a written amendment executed by the parties hereto.
4.4 On or after the effective date hereof, each reference in the Credit
Agreement to this "Agreement", "hereof" or words of like import and all
references in any agreements to the Credit Agreement shall, unless the context
otherwise requires, be deemed to refer to the Credit Agreement as amended
hereby.
4.5 The Borrowers agree to pay the Agent and the Lenders for all of their
costs, fees and expenses (including reasonable fees and expenses of legal
counsel) incurred in the preparation, documentation and negotiation of this
Amendment.
4.6 This Amendment shall be binding upon the Borrowers, the Lenders, and
the Agent and their respective successors and assigns, and shall inure to the
benefit of the Borrowers, the Lenders and the Agent and the benefit of their
respective successors and assigns. This Amendment and the rights and duties of
the parties hereto shall be construed and determined in accordance with the laws
of the State of Texas without giving effect to any choice or conflict of law
provision or rule (whether of the State of Texas or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than the State
of Texas.
IN WITNESS WHEREOF, this Amendment has been executed and delivered as the
of the date first set forth above.
BORROWERS:
KEYSTONE CONSOLIDATED INDUSTRIES, INC.
By:
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Name: Bert E. Downing, Jr.
Title: VP-CFO, Corp. Controller and Treasurer
FV STEEL AND WIRE COMPANY
By:
-----------------------------------------------------------
Name: Bert E. Downing, Jr.
Title: VP - Treasurer
SHERMAN WIRE COMPANY
By:
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Name: Bert E. Downing, Jr.
Title: VP-Treasurer, Controller and Assistant Secretary
SHERMAN WIRE OF CALDWELL, INC.
By:
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Name: Bert E. Downing, Jr.
Title: Corporate Controller
J.L. PRESCOTT COMPANY
By:
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Name: Bert E. Downing, Jr.
Title: VP-Treasurer
[signature page to First Amendment to
Debtor-In-Possession Credit
Agreement] DESOTO
ENFIRONMENTAL MANAGEMENT,
INC.
By:
--------------------------------------------------
Name: Bert E. Downing, Jr.
Title: VP-Treasurer
AGENT AND LENDERS:
-----------------
EWP FINANCIAL LLC, as Agent and as a Lender
By:________________________________________
Name:______________________________________
Title:_______________________________________
[signature page to First Amendment to Debtor-In-Possession Credit Agreement]