ACCOUNT RECONCILIATION AGREEMENT
THIS ACCOUNT RECONCILIATION AGREEMENT (the "Agreement") is made and entered
into as of the 12th day of March, 2002, by and between KEYSTONE CONSOLIDATED
INDUSTRIES, INC. d/b/a KEYSTONE STEEL & WIRE COMPANY, a Delaware corporation
("Keystone"), and CENTRAL ILLINOIS LIGHT COMPANY, an Illinois corporation
("CILCO").
W I T N E S S E T H:
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WHEREAS, Keystone and CILCO are parties to that certain Gas Service
Agreement dated as of June 30, 1999, that certain Electric Agreement dated as of
March 28, 2000, that certain Interruptible Electric Service Contract dated as of
March 28, 2000, that certain Electric Agreement dated as of December 31, 2001,
and that certain Interruptible Electric Service Contract dated as of December
31, 2001 (all of the foregoing, together with any amendments or supplements
thereto, are referred to collectively herein as the "Utility Agreements");
WHEREAS, pursuant to the Utility Agreements, from time to time CILCO sold
to Keystone and Keystone purchased from CILCO natural gas and electrical utility
services;
WHEREAS, Keystone is currently pursuing an out-of-court restructuring of
its obligations and capital structure;
WHEREAS, pursuant to the agreement of the parties, for several months
Keystone has made prepayments with respect to its anticipated current usage
under the Utility Agreements and deferred payment with respect to certain past
due amounts for prior usage;
WHEREAS, Keystone and CILCO hereby expressly acknowledge and agree that the
past due amounts owed by Keystone to CILCO for utility services previously
provided pursuant to the Utility Agreements equal in the aggregate $4,845,142
(the "Outstanding Balance"); and
WHEREAS, the parties desire to provide for the payment in full of the
Outstanding Balance and other amounts becoming due between them upon the terms
and subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the parties hereto,
it is hereby agreed as follows:
Section 1. Payment of the Outstanding Balance. As full and complete
satisfaction of all past due amounts owed by Keystone to CILCO under the Utility
Agreements as of the date hereof, Keystone hereby promises to pay the
Outstanding Balance to CILCO by making a payment of $79,462 on or before March
31, 2002, followed by sixty-two (60) equal monthly payments of $79,428 each on
or before the last day of each and every month thereafter through and including
March 31, 2007. The Outstanding Balance shall not bear interest and may be
prepaid in whole or in part at any time without penalty. In the event Keystone
Fails to pay in a timely manner any of the payments on the due dates set forth
in Xxxxxxx 0, XXXXX shall have the right to exercise any of the remedies set
forth in Paragraph 5(f) of that certain Electric Agreement between CILCO and
Keystone dated the 31st day of December 2001 until the entire Outstanding
Balance is paid in full, even if the Electric Agreement has expired or otherwise
been terminated.
Section 2. Payment for Current Usage. Keystone shall make payment for
current utility usage consistent with the terms set forth in Paragraph 5(f) of
that certain Electric Agreement between CILCO and Keystone dated the 31st day of
December 2001.
Section 3. Additional Required Payment. In the event that the EBITDA (as
hereinafter defined) of Keystone in any fiscal year shall exceed $20,000,000
(any such amount, the "Excess EBITDA"), Keystone shall pay to CILCO on or before
April 15 of the following year an amount equal to the product of such Excess
EBITDA multiplied by 5.86%, limited to the extent of the unpaid Outstanding
Balance as of the date such payment is made. Notwithstanding the foregoing, in
the event that any such payment pursuant to this Section 3 would result in an
event of default under any of Keystone's various credit agreements, Keystone
shall be permitted to defer such payment until such time as payment is permitted
under all applicable covenants of such credit agreements. For purposes of this
Section 3, "EBITDA" for any fiscal year shall be the amount determined based
upon Income (loss) before income taxes, plus Depreciation and Amortization
expense, plus Interest Expense, less overfunded defined benefit pension credit
or plus defined benefit pension expense, as the case may be, all as reported in
Keystone's Annual Report on Form 10-K with respect to such year.
Section 4. Priority; No Further Obligations. To the extent the terms and
conditions of this Agreement alter or vary the terms of the Parties' Letter
Agreement dated November 12, 2001, a copy of which is attached as Exhibit A, the
parties hereto agree that the terms and conditions of this Agreement shall be
deemed to have modified, amended and superseded the applicable portions of the
Parties' November 12, 2001 Letter Agreement.
Section 5. Notices. All notices or other communications which are required
or permitted hereunder shall be in writing and sufficient if delivered by hand,
by facsimile transmission, by registered or certified mail, postage pre-paid, or
by courier or overnight carrier to the persons at the addresses set forth below
(or at such other address as may be provided hereunder), and shall have been
deemed to have been delivered as of the date so delivered:
If to Keystone:
Keystone Steel & Wire Company
0000 X.X. Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Vice President Finance
Fax: (000) 000-0000
and:
Keystone Consolidated Industries, Inc.
Three Lincoln Centre
0000 XXX Xxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
Attention: Chief Financial Officer
Fax: (000) 000-0000
If to CILCO:
Central Illinois Light Company
Major Accounts, Energy Sales
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Sr. Vice President
Fax: (000) 000-0000
Section 6. Further Assurances. The parties hereto shall execute and
deliver, and file and record, as the case may be, such further or additional
documents, agreements or instruments as the other party hereto shall reasonably
require to consummate the transactions contemplated herein.
Section 7. Binding Effect; Construction. The covenants contained herein
shall bind, and the benefits hereof shall inure to the benefit of, the
respective heirs, personal representatives, administrators, and successors and
permitted assigns, to the extent applicable, of the parties hereto.
Section 8. Entire Agreement; Severability. This Agreement contains the
entire agreement among the parties hereto relating to the matters provided
herein, and no representations, promises or agreements, oral or otherwise, not
expressly contained or incorporated by reference herein or therein shall be
binding on the parties hereto. The provisions of this Agreement are severable
and the invalidity of one or more of the provisions herein shall not have any
effect upon the validity or enforceability of any other provision hereof.
Section 9. Governing Law. This Agreement shall be governed by, construed
and enforced in accordance with the laws of the State of Illinois, without
giving effect to any principles of conflict of laws.
Section 10. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and may be delivered via
facsimile or otherwise, and all of which together shall constitute one and the
same agreement.
[Signatures on following page.]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by the undersigned as of the date first written above.
KEYSTONE CONSOLIDATED INDUSTRIES, INC.
d/b/a KEYSTONE STEEL & WIRE COMPANY
By:
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Name:
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Title:
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CENTRAL ILLINOIS LIGHT COMPANY
By:
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Name:
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Title:
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