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:

<TABLE>
<CAPTION>
        ------------------------------------------------------- -----------------------------------------------------
                Number of Days after the Closing Date                                  Event
        ------------------------------------------------------- -----------------------------------------------------
                               <S>                              <C>
                               18 days                          Entry of a Permanent Financing Order satisfactory
                                                                to the Lenders in their sole discretion
        ------------------------------------------------------- -----------------------------------------------------
                               15 days                          Entry of a Labor Costs Order
        ------------------------------------------------------- -----------------------------------------------------
</TABLE>

     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.



<PAGE>



     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:
           -----------------------------------------------------------
        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:
           -----------------------------------------------------------
        Name:  Bert E. Downing, Jr.
        Title:  VP-Treasurer, Controller and Assistant Secretary

        SHERMAN WIRE OF CALDWELL, INC.


        By:
           -----------------------------------------------------------
        Name:  Bert E. Downing, Jr.
        Title:  Corporate Controller

        J.L. PRESCOTT COMPANY


        By:
           -----------------------------------------------------------
        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]