FIRST AMENDMENT TO POST-PETITION CREDIT AGREEMENT
This FIRST AMENDMENT TO POST-PETITION CREDIT AGREEMENT (this "Agreement")
is entered into as of this 25th day of August, 2004, by and among KEYSTONE
CONSOLIDATED INDUSTRIES, INC. ("Keystone"), DESOTO ENVIRONMENTAL MANAGEMENT,
INC., FV STEEL AND WIRE COMPANY, X.X. XXXXXXXX COMPANY, XXXXXXX WIRE COMPANY
(f/k/a DESOTO, INC.), and XXXXXXX WIRE OF XXXXXXXX, INC., each as a debtor and
debtor-in-possession in the Cases (defined below) (each a "Debtor," and,
collectively, the "Debtors"), and CONGRESS FINANCIAL CORPORATION (CENTRAL), as
lender ("Lender"). Unless otherwise specified, the capitalized terms used herein
shall have the meanings ascribed to them in the Assumption Agreement and
Amendment (defined below).
RECITALS
A. Keystone, as pre-petition debtor, and Lender are parties to (i) that
certain Amended and Restated Revolving Loan and Security Agreement, dated as of
December 29, 1995 (as amended, modified, restated or supplemented prior to the
date hereof, the "Pre-Petition Credit Agreement"), and (ii) the other Financing
Agreements, as defined in the Pre-Petition Credit Agreement (all such Financing
Agreements, together with the Pre-Petition Credit Agreement, in each case as
amended, modified, restated or supplemented prior to the date hereof or by any
other amendment executed on or after the date hereof, collectively, the
"Original Financing Agreements").
B. Debtors have filed petitions for relief under chapter 11 of title 11 of
the United States Code, 11 U.S.C. xx.xx. 101, et seq. (the "Bankruptcy Code"),
in the United States Bankruptcy Court for the Eastern District of Wisconsin (the
"Bankruptcy Court"), on February 26, 2004 (the "Petition Date"), Jointly
Administered Case No. 04-22421-SVK (the "Cases").
C. The commencement of the Cases constituted an Event of Default under
Section 10.1(g) the Pre-Petition Credit Agreement.
D. In order to continue their operations as debtors-in-possession under the
Bankruptcy Code, the Debtors requested that Lender make certain postpetition
secured loans to Keystone (the "DIP Financing"). Lender has provided such DIP
Financing to Keystone on and after the Petition Date pursuant to the terms and
conditions of (a) the Assumption Agreement and Amendment to Financing Agreements
entered into as of February 27, 2004 by and among the Lender and the Debtors
(the "Assumption Agreement and Amendment"), (b) the Pre-Petition Credit
Agreement and the other Original Financing Agreements, as modified by the
Assumption Agreement and Amendment (the Pre-Petition Credit Agreement, as
modified by the Assumption Agreement and Amendment, the "Post-Petition Credit
Agreement") and (c) the Final Order (1) Authorizing Keystone Consolidated
Industries, Inc., as Debtor-in-Possession, to Incur Post-Petition Secured
Indebtedness, (2) Granting Security Interests and Priority Pursuant to 11 U.S.C.
ss. 364 and (3) Modifying Automatic Stay entered by the Bankruptcy Court on
March 15, 2004 (the "Financing Order").
E. Subject to the terms and conditions of this Agreement and the other
agreements executed in connection herewith, if any, Lender has agreed to the
Post-Petition Credit Agreement as set forth herein.
NOW, THEREFORE, in consideration of the foregoing, the covenants and
conditions contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
SECTION 1. Amendments.
(a) Subsection 1.49 of the Post-Petition Credit Agreement is hereby amended
to insert the following immediately following the last sentence of existing
subsection 1.49 of the Post-Petition Credit Agreement:
"Notwithstanding any of the foregoing, in any month in which Borrower at
all times would be permitted to obtain from Lender a Revolving Loan in an
amount not less than $10,000,000 in excess of any and all Revolving Loans
outstanding at such time after giving effect to the lending formulas set
forth in Section 2.1(a) hereof, the Interest Rate shall mean (A) as to
Prime Rate Loans, a rate of one-half of one percent (0.5%) per annum in
excess of the Prime Rate and (B) as to Eurodollar Rate Loans, a rate of two
and one-half of one percent (2.5%) percent per annum in excess of the
Adjusted Eurodollar Rate (based on the Eurodollar Rate applicable for the
Interest Period selected by Borrower as in effect three (3) Business Days
after the date of receipt by Lender of the request of Borrower for such
Eurodollar Rate Loans in accordance with the terms hereof, whether such
rate is higher or lower than any rate previously quoted to Borrower);
provided, that, during any such month the Interest Rate shall mean the rate
of two and one-half of one percent (2.5%) per annum in excess of the Prime
Rate as to Prime Rate Loans and the rate of four and one-half of one
percent (4.5%) per annum in excess of the Adjusted Eurodollar Rate as to
Eurodollar Rate Loans, at Lender's option, without notice, (a) for the
period (i) from and after the date of termination or non-renewal hereof
until Lender has received full and final payment of all obligations
(notwithstanding entry of a judgment against Borrower) and (ii) from and
after the date of the occurrence of an Event of Default for so long as such
Event of Default is continuing as determined by Lender, and (b) on the
Revolving Loans at any time outstanding in excess of the amounts available
to Borrower under Section 2 (whether or not such excess(es), arise or are
made with or without Lender's knowledge or consent and whether made before
or after an Event of Default)."
SECTION 2. Representations and Warranties of Debtors. To induce Lender to
execute and deliver this Agreement, Debtors represent and warrant that:
(a) The execution, delivery and performance by Debtors of this Agreement
and all documents and instruments delivered in connection herewith and the
Post-Petition Credit Agreement and all other Financing Agreements have been duly
authorized, executed and delivered, and this Agreement and all documents and
instruments delivered in connection herewith and the Post-Petition Credit
Agreement and all other Financing Agreements are legal, valid and binding
obligations of Debtors that are a party thereto, enforceable against the Debtors
in accordance with its respective terms, except as the enforcement thereof may
be subject to (i) the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar law affecting creditors' rights generally
and (ii) general principles of equity (regardless of whether such enforcement is
sought in a proceeding in equity or at law);
(b) No Default or Event of Default has occurred and is continuing and each
of the representations and warranties contained in the Post-Petition Credit
Agreement and the other Financing Agreements is true and correct in all material
respects on and as of the date hereof as if made on the date hereof, except to
the extent that such representations and warranties expressly relate to an
earlier date, in which case such representations and warranties shall be true
and correct as of such earlier date, and each of the agreements and covenants in
the Financing Agreements are hereby reaffirmed with the same force and effect as
if each were separately stated herein and made as of the date hereof;
(c) Neither the execution, delivery and performance of this Agreement and
all documents and instruments delivered in connection herewith nor the
consummation of the transactions contemplated hereby or thereby does or shall
contravene, result in a breach of, or violate (i) any provision of any of the
Debtors' governing documents, (ii) any law or regulation, or any order or decree
of any court or government instrumentality or (iii) any indenture, mortgage,
deed of trust, lease, agreement or other instrument to which any Debtor is a
party or by which any Debtor or any of its property is bound;
(d) Lender's security interests in the Collateral and the Congress DIP
Collateral (as defined in the Financing Order) continue to be valid, binding,
and enforceable first-priority security interests which secure the Obligations
(subject only to encumbrances permitted by Section 9.8 of the Post-Petition
Credit Agreement and ordering paragraph 6 of the Financing Order); and
(e) No Debtor has made or agreed to make at any time any payment to any
other Person on account of the transactions contemplated by this Agreement or
any other agreements related thereto or required to be executed and delivered
thereby, including, but not limited to, any holders of the Subordinated
Indebtedness. No Debtor nor any Affiliate thereof has any obligation to any
Person in respect of any finder's or brokerage fees in connection with this
Agreement or any other agreements related thereto or required to be executed and
delivered thereby.
SECTION 3. Reference to and Effect Upon the Post-Petition Credit Agreement.
(a) Except as expressly set forth herein, all terms, conditions, covenants,
representations and warranties contained in the Post-Petition Credit Agreement
or any other Financing Agreement, and all rights of Lender and all Obligations
of Debtors thereunder, shall remain in full force and effect. Debtors hereby
confirm that the Post-Petition Credit Agreement and the other Financing
Agreements are in full force and effect and that Debtors have no defenses,
setoffs or counterclaims to the Obligations under the Post-Petition Credit
Agreement or any other Financing Agreement.
(b) Except as expressly set forth herein, the execution, delivery and
effectiveness of this Agreement and any consents and waivers set forth herein
shall not directly or indirectly (i) constitute a consent or waiver of any past,
present or future violations of any provisions of the Post-Petition Credit
Agreement or any other Financing Agreement, (ii) amend, modify or operate as a
waiver of any provision of the Post-Petition Credit Agreement or any other
Financing Agreement or any right, power or remedy of Lender thereunder, or (iii)
constitute a course of dealing or other basis for altering any Obligations of
Debtors under the Financing Agreements or any other contract or instrument.
(c) This Agreement shall constitute a Financing Agreement.
SECTION 4. Costs and Expenses. Debtors agree to promptly reimburse Lender
on demand for all fees, costs and expenses (including the fees, costs and
expenses of counsel or other consultants or advisors retained by Lender) in
connection with the negotiation, preparation and consummation of this Agreement
and the other agreements and documents executed in connection herewith and the
transactions contemplated hereby and thereby.
SECTION 5. Governing Law. Any dispute between Lender and Debtors arising
out of, connected with, related to, or incidental to the relationship
established between them in connection with this Agreement, and whether arising
in contract, tort, equity or otherwise, shall be resolved in accordance with the
internal laws (and not the conflicts of law provisions) of the State of
Illinois.
SECTION 6. Headings. Section headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purposes.
SECTION 7. Construction. This Agreement and all other agreements and
documents executed in connection therewith have been prepared through the joint
efforts of all of the parties. Neither the provisions of this Agreement or any
such other agreements and documents nor any alleged ambiguity shall be
interpreted or resolved against any party on the ground that such party's
counsel drafted this Agreement or such other agreements and documents, or based
on any other rule of strict construction. Each of the parties hereto represents
and declares that such party has carefully read this Agreement and all other
agreements and documents executed in connection therewith, and that such party
knows the contents thereof and signs the same freely and voluntarily. The
parties hereby acknowledge that they have been represented by legal counsel of
their own choosing in negotiations for and preparation of this Agreement and all
other agreements and documents executed in connection therewith and that each of
them has read the same and had their contents fully explained by such counsel
and is fully aware of their contents and legal effect.
SECTION 8. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed an original, but
all such counterparts shall constitute one and the same instrument, and all
signatures need not appear on any one counterpart. Any party hereto may execute
and deliver a counterpart of this Agreement by delivering by facsimile
transmission a signature page of this Agreement signed by such party, and any
such facsimile signature shall be treated in all respects as having the same
effect as an original signature. Any party delivering by facsimile transmission
a counterpart executed by it shall promptly thereafter also deliver a manually
signed counterpart of this Agreement.
SECTION 9. Severability. The invalidity, illegality, or unenforceability of
any provision in or obligation under this Agreement in any jurisdiction shall
not affect or impair the validity, legality, or enforceability of the remaining
provisions or obligations under this Agreement or of such provision or
obligation in any other jurisdiction.
SECTION 10. Time Of Essence. Time is of the essence in the payment and
performance of each of the obligations of Debtors hereunder and with respect to
all conditions to be satisfied by Debtors.
SECTION 11. Further Assurances. Debtors agree to take all further actions
and execute all further documents as Lender may from time to time reasonably
request to carry out the transactions contemplated by this Agreement.
SECTION 12. Notices. All notices, requests, and demands to or upon the
respective parties hereto shall be given in accordance with Section 12.2 of the
Post-Petition Credit Agreement.
SECTION 13. Effectiveness. This Agreement shall become effective at the
time (the "Effective Date") that all of the following conditions precedent have
been met (or waived) as determined by Agent in its sole discretion:
(a) Agreement. Executed signature pages for this Agreement signed by Lender
and each of the Debtors shall have been delivered to Lender.
(b) Bankruptcy Court Approval. The Bankruptcy Court shall have entered a
final nonappealable order in form and substance acceptable to the Lender in the
Lender's sole discretion approving this Agreement and authorizing the Debtors to
execute this Agreement.
(c) Representations. The representations and warranties contained herein
shall be true and correct in all respects, and no Event of Default or Default
shall exist on the date hereof.
(d) Other Proceedings. All proceedings taken in connection with the
transactions contemplated by this Agreement and all documents, instruments, and
other legal matters incident thereto shall be satisfactory to Lender and its
respective legal counsel.
SECTION 14. Waiver Of Jury Trial. DEBTORS AND LENDER WAIVE, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY OF ANY
CLAIM, COUNTERCLAIM, ACTION OR OTHER PROCEEDING ARISING UNDER OR RELATING TO
THIS AGREEMENT.
SECTION 15. No Third Party Beneficiaries. This Agreement shall be binding
upon and inure to the benefit of Debtors, Lender and their respective successors
and assigns. No Person other than the parties hereto shall have any rights
hereunder or be entitled to rely on this Agreement, and all third-party
beneficiary rights are hereby expressly disclaimed.
IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto
as of the date first written above.
KEYSTONE CONSOLIDATED INDUSTRIES, INC., as
debtor-in-possession
By:
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Name:
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Title:
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DESOTO ENVIRONMENTAL MANAGEMENT, INC., as
debtor-in-possession
By:
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Name:
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Title:
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FV STEEL AND WIRE COMPANY, as debtor-in-possession
By:
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Name:
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Title:
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X.X. XXXXXXXX COMPANY, as
debtor-in-possession
By:
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Name:
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Title:
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XXXXXXX WIRE COMPANY (f/k/a DESOTO, INC.), as
debtor-in-possession
By:
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Name:
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Title:
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XXXXXXX WIRE OF XXXXXXXX, INC., as debtor-in-possession
By:
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Name:
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Title:
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CONGRESS FINANCIAL CORPORATION (CENTRAL), as Lender
By:
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Name:
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Title:
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