SECOND AMENDMENT TO
                      DEBTOR-IN-POSSESSION CREDIT AGREEMENT

     THIS  SECOND  AMENDMENT  TO  DEBTOR-IN-POSSESSION  CREDIT  AGREEMENT  (this
"Amendment") is entered into as of this 31st day of December,  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
by the First Amendment to Debtor-in-Possession  Credit Agreement effective as of
October 1, 2004 (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. AMENDMENT.

     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) July 31,  2005,  (ii) the
Plan Effective Date,  (iii) the dismissal of the Case, (iv) closing of a Sale of
EWP,  (v)  Lenders'  election,  in  their  sole  discretion,  to  terminate  the
Commitments  upon the  occurrence  and  during  the  continuance  of an Event of
Default,  or (vi) the maturity  date of the Congress DIP Facility  including any
extension  thereof;  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.

     SECTION 2. 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:

     2.1 Subject to  authorization  or 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.

     2.2 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.

     2.3 No Default or Event of Default  shall have  occurred and be  continuing
under the Credit Agreement.

SECTION 3.        MISCELLANEOUS.

     3.1 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.  Delivery of a counterpart  of this  Amendment by facsimile  shall be
effective as delivery of a manually executed counterpart of this Amendment.

     3.2  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.

     3.3 Any term,  covenant or agreement of this  Amendment may be amended only
by a written amendment executed by the parties hereto.

     3.4 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.

     3.5 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.

     3.6 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.





                  [Remainder of Page Intentionally Left Blank]





<PAGE>




     IN WITNESS  WHEREOF,  this  Amendment has been executed and delivered as of
the date first set forth above.

                                   BORROWERS:

             KEYSTONE CONSOLIDATED INDUSTRIES, INC.


             By:________________________________________
             Name:______________________________________
             Title:_______________________________________

             FV STEEL AND WIRE COMPANY


             By:________________________________________
             Name:______________________________________
             Title:_______________________________________

             SHERMAN WIRE COMPANY


             By:________________________________________
             Name:______________________________________
             Title:_______________________________________

             SHERMAN WIRE OF CALDWELL, INC.


             By:________________________________________
             Name:______________________________________
             Title:_______________________________________

             J.L. PRESCOTT COMPANY


             By:________________________________________
             Name:______________________________________
             Title:_______________________________________




  [signature page to Second Amendment to Debtor-In-Possession Credit Agreement]


<PAGE>



                         DESOTO ENVIRONMENTAL MANAGEMENT, INC.


                         By:________________________________________
                         Name:______________________________________
                         Title:_______________________________________

                         AGENT AND LENDERS:
                         -----------------

                         EWP FINANCIAL LLC, as Agent and as a Lender


                         By:________________________________________
                         Name:______________________________________
                         Title:_______________________________________






















  [signature page to Second Amendment to Debtor-In-Possession Credit Agreement]