SECOND AMENDMENT TO AMENDED AND RESTATED
                    REVOLVING LOAN AND SECURITY AGREEMENT AND
                   RELEASE OF TERM LOAN AND SECURITY AGREEMENT

     THIS SECOND  AMENDMENT TO AMENDED AND RESTATED  REVOLVING LOAN AND SECURITY
AGREEMENT  AND  RELEASE  OF  TERM  LOAN  AND  SECURITY  AGREEMENT  (the  "Second
Amendment")  is  entered  into as of  August  4,  1997 by and  between  KEYSTONE
CONSOLIDATED INDUSTRIES, INC., a Delaware corporation ("Borrower"), and CONGRESS
FINANCIAL CORPORATION (CENTRAL), an Illinois corporation ("Lender").  Except for
terms which are expressly  defined  herein,  all  capitalized  terms used herein
shall have the  meaning  subscribed  to them in the Loan  Agreement  (as defined
below).

                                    RECITALS

     WHEREAS,  Borrower and Lender are parties to (i) that  certain  Amended And
Restated Revolving Loan And Security Agreement dated as of December 29, 1995, as
amended by that certain First  Amendment to Amended and Restated  Revolving Loan
and Security Agreement dated as of September 27, 1996 (the "Loan Agreement") and
(ii) that  certain  Term Loan and  Security  Agreement  dated as of December 30,
1993,  as amended by that  certain  First  Amendment  to Term Loan and  Security
Agreement dated as of September 27, 1996 (the "Term Loan").

     WHEREAS,  Borrower  desires  to amend  the terms of the Loan  Agreement  to
permit  Borrower to, among other things,  issue  $100,000,000  of Senior Secured
Notes due 2007 ("Senior Notes") pursuant to the terms of that certain  Indenture
dated as of the date hereof (the "Indenture").

     WHEREAS,  Borrower  desires  to prepay  the Term Loan from a portion of the
proceeds raised from the issuance of the Senior Notes.

     WHEREAS, Lender is willing to amend the Loan Agreement and release the Term
Loan and, in connection therewith, to release certain security interests held by
Lender on the terms and conditions set forth herein.

     NOW,  THEREFORE,  in consideration of the mutual  conditions and agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency  of  which is  hereby  acknowledged,  the  parties  hereto  agree as
follows:

     I. Amendments to the Loan Agreement.

     A. Definitions.


          1. The second  paragraph of Section 1 of the Loan  Agreement is hereby
     amended  by  inserting  the  sentence  "Terms  that are  defined  under the
     Indenture  shall be defined  under the  Indenture as in effect on August 7,
     1997 without giving effect to any amendments, restatements,  supplements or
     other  modifications  thereto."  immediately  after the period in the ninth
     line thereof.

          2. The  definition  of "Maximum  Credit" set forth in Section 1 of the
     Loan  Agreement  is hereby  amended and restated in its entirety to read as
     follows:

               "Maximum  Credit" shall mean the amount of $55,000,000  minus the
               aggregate  amount of the  "Revolving  Loans"  and the  "Letter of
               Credit Accommodations" (as such terms are defined and used in the
               DeSoto Loan Agreement).

          3. The following definitions are hereby added to Section 1 of the Loan
     Agreement in their appropriate alphabetical order:

               "Indenture"  shall mean that  certain  Indenture  dated August 7,
               1997, between the Borrower and The Bank of New York, as trustee.

               "Indenture Trustee" shall mean the trustee under the Indenture.

               "Indenture  Trustee-Lender  Intercreditor  Agreement"  shall mean
               that  certain  Intercreditor  Agreement  dated  August  7,  1997,
               between Lender and the Indenture Trustee.

               "Permitted  Asset  Sale"  shall mean an Asset Sale (as defined in
               the  Indenture  without  giving  effect  to  any   modifications,
               amendments  or  other  supplements  thereto)  that  (a)  does not
               include  a sale of the  Collateral,  (b)  does not  exceed,  when
               aggregated with all other Permitted Asset Sales by all Affiliates
               during the prior twelve month period,  $10,000,000,  (c) does not
               include any real property which is used in Borrower's  operations
               or on which Collateral is located,  and (d) does not occur during
               or result in an Event of Default.

               "Senior  Notes" shall mean those certain Senior Secured Notes due
               August 1, 2007 issued pursuant to the terms of the Indenture.

     B.  Section  3.3 of the Loan  Agreement  is hereby  amended  to insert  the
following  sentences  immediately  at  the  end  thereof:  "Notwithstanding  the
foregoing,  at any time that there are no, and have not been for the most recent
sixty  (60) day  period,  Revolving  Loans or Letter  of  Credit  Accommodations
hereunder or under and as defined in the DeSoto Loan Agreement outstanding, such
$5,000 servicing fee shall be reduced to $2,500 ("Reduced  Servicing Fee"). Such
Reduced  Servicing  Fee shall be  immediately  increased to $5,000 upon Borrower
incurring any Revolving  Loans or Letter of Credit  Accommodations  hereunder or
under and as defined in the DeSoto Loan Agreement."

     C. Section 5.2 of the Loan  Agreement  is hereby  amended to (i) insert the
word "and" between the words "licensee," and "choses" in the fourth line thereof
and (ii) delete the phrase  "and  existing  and future  leasehold  interests  in
equipment, real estate and fixtures" in the fourth and fifth lines thereof.

     D. Section 5.3 of the Loan Agreement is hereby amended to insert the phrase
"except  for the Trust Money (as defined in and  pursuant to the  Indenture)  or
other property  deposited with the Indenture  Trustee pursuant to Section 3.5 or
Article  VIII of the  Indenture  or  delivered  to or received by the  Indenture
Trustee for  application  in  accordance  with Section  6.11 of the  Indenture,"
immediately before the word "all" in the first line thereof.

     E. Section 5.5 of the Loan  Agreement is hereby deleted in its entirety and
denoted as "[intentionally deleted]".

     F. Section 5.8 of the Loan  Agreement is hereby deleted in its entirety and
denoted as "[intentionally deleted]".

     G.  Section  6.3 of the Loan  Agreement  is hereby  amended  to insert  the
following immediately at the end thereof:

               (d)  Notwithstanding   the  foregoing,   at  Borrower's  request,
               Borrower shall not be required to comply with subsections  6.3(a)
               and  6.3(c) so long as (i) there are no  outstanding  Obligations
               hereunder  or under and as defined in the DeSoto  Loan  Agreement
               and (ii) Borrower does not  anticipate  requesting  any Revolving
               Loans or Letter of Credit Accommodations  hereunder or as defined
               in the  DeSoto  Loan  Agreement  within the next sixty (60) days;
               provided,  however,  that if  Borrower  at any  time  anticipates
               requesting   such   Revolving   Loans   or   Letter   of   Credit
               Accommodations  within the next sixty (60) days,  Borrower  shall
               immediately  take all actions  necessary to immediately come into
               compliance with subsections 6.3(a) and 6.3(c) hereof.

     H. Section 7.1 of the Loan Agreement is hereby amended to delete the phrase
"and  Equipment"  immediately  prior to the word  "acquired" in the seventh line
thereof.

     I.  Section  7.4  of  the  Loan  Agreement  is  hereby  amended  to  delete
subsections (a), (d), (e) and (f) thereof.

     J. Section 9.7(b) of the Loan Agreement is hereby amended to delete clauses
(ii) and (iii)  thereof  and  substitute  the phrase "and (ii)  Permitted  Asset
Sales,  provided  that  Borrower  immediately  reports  to Lender  the terms and
conditions  of such  Permitted  Asset Sale and the  amount  and use of  proceeds
therefrom" in place thereof.

     K. Section 9.8 of the Loan  Agreement  is hereby  amended to (i) delete the
first  reference  to "and" in the last line  thereof  and (ii) insert the phrase
"(f) the liens and security  interests  arising pursuant to the Indenture (as in
effect  as  of  August  7,  1997  without  giving  effect  to  any   amendments,
restatements,  supplements  or  other  modifications  thereto);  (g)  liens  and
security  interests on the  Collateral (as defined in the  Indenture),  provided
that any such  lienholder  or secured party shall be required to be bound by the
same terms as the  Indenture  Trustee is bound by the  Indenture  Trustee-Lender
Intercreditor  Agreement; and (h) purchase money liens on and security interests
in  equipment,  fixtures  and real estate  created  pursuant  to the  three-year
capital   improvements   plan  described  in  the  section   entitled   "Capital
Improvements"  of the  Borrower's  final  Offering  Memorandum  filed  with  the
Securities and Exchange Commission with respect to the Senior Notes, but only if
the  holder of each such lien or  security  interest  shall  have,  prior to the
creation  thereof,  entered into an agreement with Lender, in form and substance
reasonably  acceptable to Lender,  to assure Lender access to the Collateral and
the ability to utilize the  property  subject to such lien or security  interest
after an Event of Default on a basis  consistent with the terms of the Indenture
Trustee-Lender  Intercreditor  Agreement"  immediately  before the period in the
last line thereof.

     L. Section 9.9 of the Loan  Agreement is hereby amended and restated in its
entirety to read as follows:

               Indebtedness and Certain Restrictions on Payments. Borrower shall
               not, nor permit Caldwell or Fox Valley to, incur, create, assume,
               become or be liable in any manner  with  respect to, or permit to
               exist,   any   obligations  or   indebtedness,   except  (a)  the
               Obligations;  (b) trade  obligations  and normal  accruals in the
               ordinary  course of  business  not yet due and  payable,  or with
               respect  to  which  the  Borrower,  Caldwell  or Fox  Valley  (as
               applicable)  is  contesting  in good faith the amount or validity
               thereof  by  appropriate   proceedings   diligently  pursued  and
               available  to Borrower,  Caldwell or Fox Valley (as  applicable),
               and with respect to which  adequate  reserves have been set aside
               on its books; (c) purchase money indebtedness  (including capital
               leases) to the extent not incurred or secured by liens (including
               capital  leases)  in  violation  of any other  provision  of this
               Agreement;  (d)  obligations  or  indebtedness  set  forth in the
               Information  Certificate;  provided,  that,  (i)  except  for (A)
               mandatory  redemptions  of the  Senior  Notes  as a  result  of a
               Permitted  Asset Sale required  under the Indenture (as in effect
               as of August 7, 1997  without  giving  effect to any  amendments,
               restatements, supplements or other modifications thereto) and (B)
               optional  redemptions  and  defeasance  of the  Senior  Notes  as
               permitted  under the Indenture (as in effect as of August 7, 1997
               without   giving   effect   to  any   amendments,   restatements,
               supplements or other  modifications  thereto) which are made at a
               time when no Event of Default has occurred and is  continuing  so
               long as there  are no  outstanding  Revolving  Loans or Letter of
               Credit  Accommodations  hereunder  or under and as defined in the
               DeSoto  Loan  Agreement,  Borrower,  Caldwell  or Fox  Valley (as
               applicable)  may  only  make  regularly   scheduled  payments  of
               principal  and  interest  in  respect  of  such  indebtedness  in
               accordance   with  the  terms  of  the  agreement  or  instrument
               evidencing  or giving rise to such  indebtedness  as in effect on
               the date  hereof,  (ii)  Borrower,  Caldwell and Fox Valley shall
               not, directly or indirectly,  (A) amend,  modify, alter or change
               the terms of such  indebtedness  or any  agreement,  document  or
               instrument  related  thereto as in effect on the date hereof,  or
               (B) except for (i) mandatory redemptions of the Senior Notes as a
               result of a Permitted Asset Sale required under the Indenture (as
               in  effect as of August  7,  1997  without  giving  effect to any
               amendments,  restatements,  supplements  or  other  modifications
               thereto) and (ii)  optional  redemptions  and  defeasance  of the
               Senior Notes as permitted under the Indenture (as in effect as of
               August  7,  1997  without   giving  effect  to  any   amendments,
               restatements,  supplements or other modifications  thereto) which
               are made at a time when no Event of Default has  occurred  and is
               continuing so long as there are no outstanding Revolving Loans or
               Letter of Credit Accommodations hereunder or under and as defined
               in the DeSoto Loan Agreement,  redeem, retire, defease,  purchase
               or otherwise acquire such indebtedness, or set aside or otherwise
               deposit  or invest  any sums for such  purpose,  (iii)  Borrower,
               Caldwell or Fox Valley (as  applicable)  shall  furnish to Lender
               all  notices  or  demands in  connection  with such  indebtedness
               either   received  by  Borrower,   Caldwell  or  Fox  Valley  (as
               applicable)  or on  their  behalf,  promptly  after  the  receipt
               thereof,  or  sent  by  Borrower,  Caldwell  or  Fox  Valley  (as
               applicable)  or on their  behalf,  concurrently  with the sending
               thereof,  as the case may be,  and (iv) at no time shall any such
               obligations  or   indebtedness   (A)  of  Caldwell   (other  than
               indebtedness  owed to Borrower and  permitted  under Section 9.10
               hereof)  exceed  $250,000  and  (B) of  Fox  Valley  (other  than
               indebtedness  owed to Borrower and  permitted  under Section 9.10
               hereof) exceed $250,000;  (e)  indebtedness  secured by liens and
               security interests on all or a part of the Collateral (as defined
               in the  Indenture),  provided  that  any  such  lender  shall  be
               required to be bound by the same terms as the  Indenture  Trustee
               is  bound  under  the  Indenture   Trustee-Lender   Intercreditor
               Agreement;  and (f) purchase money  indebtedness which is secured
               by liens and security interests as permitted under Section 9.8(h)
               hereof which is incurred in  compliance  with the  Indenture  and
               which does not cause  Borrower  to  violate  the terms of Section
               9.13 hereof.  Notwithstanding  the  foregoing,  after an Event of
               Default,  any payments made by Borrower to the Indenture  Trustee
               for any  purpose  shall  only be made  from  proceeds  of  either
               Permitted  Asset  Sales or other  sales of  assets  which are not
               Collateral and which do not constitute Asset Sales (as defined in
               the  Indenture  without  giving  effect  to  any   modifications,
               amendments or other  supplements  thereto) or  refinancings,  and
               none of the  proceeds  of the  Revolving  Loan or the  Letter  of
               Credit  Accommodations  hereunder  or under and as defined in the
               DeSoto Loan Agreement shall be used for such payments.

     M.  Section  9.11 of the Loan  Agreement  is hereby  amended  to insert the
phrase "Except for (a) dividends on the Borrower's Series A Preferred Stock (the
"Series A  Preferred  Stock")  not to exceed  $70,000  per  quarter  and (b) any
redemption,  in whole or in part, of the Series A Preferred Stock outstanding as
of August 7, 1997 not to exceed  $3,500,000,  in either case so long as no Event
of Default  exists or would exist due to any such dividends on or any redemption
of the Series A Preferred Stock,"  immediately before the word "Borrower" in the
first line thereof.

     N. Section 9.10 of the Loan Agreement is hereby amended and restated in its
entirety to read as follows:

               Revolving Loans,  Investments.  Guarantees.  Etc.  Borrower shall
               not,  directly or indirectly,  make any loans or advance money or
               property  to any person,  or invest in (by capital  contribution,
               dividend or  otherwise)  or purchase or  repurchase  the stock or
               indebtedness  or all or a  substantial  part  of  the  assets  or
               property  of  any  person,  or  guarantee,  assume,  endorse,  or
               otherwise  become  responsible  for (directly or indirectly)  the
               indebtedness, performance, obligations or dividends of any Person
               or agree to do any of the foregoing,  except: (a) the endorsement
               of instruments  for collection or deposit in the ordinary  course
               of  business;  (b) loans or  investments  which  result  from the
               conversion of past due accounts  receivable  into notes or stock,
               which notes or stock are  delivered  and  pledged to Lender;  (c)
               investments in: (i) short-term  direct  obligations of the United
               States Government, (ii) negotiable certificates of deposit issued
               by any bank  satisfactory to Lender,  payable to the order of the
               Borrower or to bearer and delivered to Lender,  (iii)  commercial
               paper rated A1 or P l, (iv) the  advances and  investments  as of
               December 31, 1995 in  Engineered  Wire  Products,  Inc.,  an Ohio
               corporation,  and (v) loans or investments of no greater than (i)
               $3,000,000  to Fox Valley made  available  on a revolving  credit
               basis and evidenced by a subordinated  demand note, provided that
               Fox Valley is  Solvent at the time of such loans or  investments,
               (ii) $5,000,000 to Caldwell made available on a revolving  credit
               basis and evidenced by a subordinated  demand note, provided that
               Caldwell  is Solvent  at the time of such  loans or  investments,
               (iii)$10,000,000   to  DeSoto,   Inc.   (excluding   the  initial
               investment  of   approximately   $70,000,000  made  to  initially
               capitalize DSO Acquisition  Corporation  with the contribution of
               the Sherman  Wire assets plus (X) the value of  Borrower's  stock
               issued in  connection  with the  DeSoto  Acquisition  and (Y) all
               transaction  costs  related  to  the  DeSoto   Acquisition)  made
               available  on  a  revolving  credit  basis  and  evidenced  by  a
               subordinated  demand note,  provided that DeSoto, Inc. is Solvent
               at the time of such loans or investments,  and (iv) $8,800,000 to
               DeSoto,  Inc. made available as a term loan on or about August 7,
               1997 to be evidenced  by a  subordinated  demand note;  provided,
               that,  as to any of the  foregoing,  unless  waived in writing by
               Lender,  Borrower shall take such actions as are deemed necessary
               by Lender to  perfect  the  security  interest  of Lender in such
               investments; and (d) the guarantee by Borrower of the obligations
               owing to Lender by Joint Venture and the  guarantees set forth in
               the Information Certificate.

     O. The  Information  Certificate  attached to the Loan  Agreement is hereby
amended  to  insert  "Indenture  -  $100,000,000"  under  the  section  entitled
"Indebtedness (Section 9.9)".

     II.  Release of Term Loan.  As of the  Effective  Date  hereof,  Lender and
Borrower  release  each other from all  obligations  under the Term Loan and the
Term Loan shall be of no further force and effect.

     III. Conditions to Effectiveness of Second Amendment. This Second Amendment
shall become  effective on the date (the  "Effective  Date") when Borrower shall
satisfy all of the following conditions:

     A. Second  Amendment.  Borrower  and Lender  shall have duly  executed  and
delivered this Second Amendment.

     B.  Indenture  and Senior  Notes.  Borrower  shall have duly  executed  and
delivered  the  Indenture  and the  Senior  Notes  shall  have been duly  issued
thereunder.

     C. Payment of Obligations under Term Loan. Borrower shall prepay the entire
principal  balance  and all  accrued  interest  of,  and pay all fees and  other
amounts outstanding under, the Term Loan.

     D.  Execution  of Indenture  Trustee-Lender  Intercreditor  Agreement.  The
Indenture  Trustee  shall  have duly  authorized,  executed  and  delivered  the
Indenture Trustee-Lender Intercreditor Agreement.

     E. Additional Matters.  Lender shall have received such other certificates,
opinions,   documents  and  instruments  relating  to  the  obligations  or  the
transactions  contemplated  hereby,  by  the  Indenture  and  by  the  Financing
Agreements as may have been  reasonably  requested by Lender,  and all corporate
and  other  proceedings  and all  other  documents  and  all  legal  matters  in
connection with the transactions  contemplated  hereby,  by the Indenture and by
the Financing Agreements shall be reasonably  satisfactory in form and substance
to Lender.

     F. Term Loan  Termination  Fee.  Borrower  shall have paid Lender the early
termination fee set forth in Section 12.1(c) of the Loan Agreement.

     IV.  Release of Collateral.  As of the Effective Date hereof,  Lender shall
release certain mortgages, security interests and other liens in accordance with
this Second  Amendment and Lender  agrees to deposit  documents  evidencing  the
release  thereof  with  Commonwealth  Land Title  Insurance  Company (the "Title
Company") promptly after the execution hereof by all parties, provided, however,
that such  release  documentation  shall not be so  deposited  unless  and until
Lender shall have received an executed  escrow  letter (the "Escrow  Letter") by
and between Lender and the Title Company, substantially in the form of Exhibit A
attached  hereto,  providing  for,  among other  things,  (i) the  execution and
delivery  by  Lender  into  escrow  with the Title  Company,  on or prior to the
Effective Date, of all documents,  UCC financing statements or other instruments
required  by the Escrow  Letter  and  Exhibits  A, B and C thereof  and (ii) the
recordation and filing in the appropriate  jurisdictions by the Title Company of
all such  documents,  UCC financing  statements or other  instruments,  upon the
terms and subject to the conditions set forth in the Escrow Letter.

     V. Representations and Warranties.  In order to induce Lender to enter into
this Second  Amendment,  Borrower  represents  and warrants to Lender,  upon the
effectiveness of this Second  Amendment,  which  representations  and warranties
shall survive the execution and delivery of this Second Amendment, that:

     A. Borrower is a corporation  duly organized,  validly existing and in good
standing under the laws of the state of its incorporation;

     B. The  execution,  delivery and  performance  of this Second  Amendment by
Borrower are within its  corporate  powers and have been duly  authorized by all
necessary corporate action;

     C. This Second Amendment  constitutes a legal, valid and binding obligation
of Borrower,  enforceable  against Borrower in accordance with its terms, except
as  enforcement  may  be  limited  by  bankruptcy,  insolvency,  reorganization,
moratorium  or similar laws  affecting  the  enforcement  of  creditors'  rights
generally, and by general principles of equity; and

     D.  All  of the  representations  and  warranties  contained  in  the  Loan
Agreement and in the other  Financing  Agreements  (other than those which speak
expressly  only as of a  different  date) are true and correct as of the date of
this Second Amendment after giving effect to this Second Amendment.

     VI. Miscellaneous.

     A. Effect:  Ratification.  The  amendments  set forth herein are  effective
solely  for the  purpose  set forth  herein and shall be  limited  precisely  as
written, and shall not be deemed to (i) be a consent to any amendment, waiver or
modification  of any other term or  condition  of the Loan  Agreement  or of any
other Financing Agreements or (ii) prejudice any right or rights that Lender may
now  have or may  have in the  future  under  or in  connection  with  the  Loan
Agreement  or any  other  Financing  Agreements.  Each  reference  in  the  Loan
Agreement to "this Agreement",  "herein",  "hereof" and words of like import and
each reference in the other  Financing  Agreements to the Loan  Agreement  shall
mean the Loan  Agreement  as amended  hereby.  This  Second  Amendment  shall be
construed in  connection  with and as part of the Loan  Agreement and all terms,
conditions,  representations,  warranties, covenants and agreements set forth in
the Loan Agreement and each other Financing Agreement,  except as herein amended
or waived,  are hereby ratified and confirmed and shall remain in full force and
effect.

     B.  Costs  and  Expenses.  Borrower  shall  pay to  Lender  on  demand  all
reasonable out-of-pocket costs, expenses, title fees, filing fees and taxes paid
or payable in connection with the preparation, negotiation, execution, delivery,
recording,  administration,  collection, liquidation, enforcement and defense of
the Obligations,  Lender's rights in the Collateral,  this Second Amendment, the
Indenture Trustee-Lender  Intercreditor Agreement, the Loan Agreement, the other
Financing  Agreements  and  all  other  documents  related  hereto  or  thereto,
including  any  amendments,  supplements  or  consents  which may  hereafter  be
contemplated  (whether or not  executed) or entered  into in respect  hereof and
thereof,  including, but not limited to: (a) all costs and expenses of filing or
recording  (including Uniform  Commercial Code financing  statement filing taxes
and fees, documentary taxes,  intangibles taxes and mortgage recording and title
insurance  taxes and fees, if  applicable);  (b) costs and expenses and fees for
title insurance and other insurance  premiums,  environmental  audits,  surveys,
assessments,  engineering  reports and  inspections,  appraisal  fees and search
fees; (c) costs and expenses of remitting loan proceeds,  collecting  checks and
other items of payment;  (d)  charges,  fees or expenses  charged by any bank or
issuer in  connection  with the Letter of Credit  Accommodations;  (e) costs and
expenses of preserving  and protecting  the  Collateral;  (f) costs and expenses
paid or  incurred  in  connection  with  obtaining  payment of the  Obligations,
enforcing  the  security  interests  and liens of Lender,  selling or  otherwise
realizing upon the  Collateral,  and otherwise  enforcing the provisions of this
Second  Amendment,  the Loan  Agreement  and the other  Financing  Agreements or
defending  any claims  made or  threatened  against  Lender  arising  out of the
transactions  contemplated  hereby and thereby  (including,  without limitation,
preparations  for and  consultations  concerning any such matters);  and (g) the
fees and  disbursements  of counsel  (including  legal  assistants) to Lender in
connection with the foregoing.

     C, Certain Waivers: Release. Although Borrower does not believe that it has
any claims  against  Lender,  it is willing to provide Lender with a general and
total release of all such claims in consideration of the benefits which Borrower
will receive pursuant to this Second Amendment. Accordingly, Borrower for itself
and any successor of Borrower hereby knowingly,  voluntarily,  intentionally and
irrevocably   releases  and  discharges  Lender  and  its  respective  officers,
directors,  agents and counsel  (each a  "Releasee")  from any and all  actions,
causes of action,  suits, sums of money,  accounts,  reckonings,  bonds,  bills,
specialties,   covenants,  contracts,   controversies,   agreements,   promises,
variances,   trespasses,   damages,  judgments,  extents,  executions,   losses,
liabilities,  costs, expenses, debts, dues, demands, obligations or other claims
of any kind whatsoever,  in law,  admiralty or equity,  which Borrower ever had,
now have or hereafter  can,  shall or may have against any Releasee for, upon or
by reason of any matter,  cause or thing  whatsoever  from the  beginning of the
world to the date of this Second Amendment.

     D.  Counterparts.  This Second  Amendment  may be executed in any number of
counterparts,  each such  counterpart  constituting an original but all together
constitute one and the same instrument.

     E. Severability.  Any provision  contained in this Second Amendment that is
held to be inoperative,  unenforceable or invalid in any jurisdiction  shall, as
to that jurisdiction, be inoperative, unenforceable or invalid without affecting
the remaining  provisions of this Second  Amendment in that  jurisdiction or the
operation,   enforceability   or  validity  of  that   provision  in  any  other
jurisdiction.

     F. GOVERNING LAW. THIS SECOND  AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS.

     G. Consent to Amendment to DeSoto Loan Agreement.  Borrower hereby consents
to DeSoto  entering  into that certain  First  Amendment  to Revolving  Loan and
Security  Agreement  dated as of the date hereof under the terms and  conditions
set forth therein.

     H.  Consent to  Further  Documentation.  Borrower  hereby  consents  to the
preparation  of a Second  Amended  and  Restated  Revolving  Loan  and  Security
Agreement promptly after the Effective Date to, among other things,  incorporate
into a single document the modifications to the Loan Agreement set forth in this
Second Amendment.

                  [remainder of page intentionally left blank]


<PAGE>


     IN WITNESS WHEREOF,  the parties hereto have executed this Second Amendment
as of the date first above written.


                              CONGRESS FINANCIAL CORPORATION (CENTRAL)


                              By:
                              Name:
                              Title:



                              KEYSTONE CONSOLIDATED INDUSTRIES, INC.


                              By:
                              Name:
                              Title:



<PAGE>




                                    Exhibit A

                              Form of Escrow Letter

                                 August __, 1997

VIA FACSIMILE AND FEDERAL EXPRESS

Mr. Mark Baillie
Commonwealth Land Title Insurance Company
655 Third Avenue, 11th Floor
New York, New York 10017

Re:  Second  Amendment  to Amended  and  Restated  Revolving  Loan and  Security
     Agreement  and Release of Term Loan and  Security  Agreement by and between
     Congress  Financial   Corporation   (Central)  and  Keystone   Consolidated
     Industries, Inc. and the transactions contemplated thereby

Dear Mr. Baillie:

     This letter  constitutes  the escrow  instructions  of  Congress  Financial
Corporation   (Central)   ("Congress")  in  connection  with  the   transactions
contemplated by that certain Second Amendment to Amended and Restated  Revolving
Loan and Security Agreement and Release of Term Loan and Security Agreement (the
"Second  Amendment"),  dated as of the date hereof, by and between Congress,  as
lender, and Keystone Consolidated  Industries,  Inc., as borrower  ("Keystone"),
and related  documents,  including the release of certain security  interests in
favor of Congress. In connection therewith, S. Jay Novatney of Latham & Watkins,
counsel to Congress,  will deliver the following  executed original documents to
you:

1.   Releases of each of the mortgages set forth on Exhibit A hereto to be filed
     in and recorded with the appropriate  office(s) in the jurisdictions listed
     on Exhibit A;

2.   UCC-3 Partial Release  Statements as set forth on Exhibit B hereto executed
     by Congress to be filed in and recorded with the  appropriate  office(s) in
     the jurisdictions listed on Exhibit B; and

3.   UCC-3  Termination  Statements as set forth on Exhibit C hereto executed by
     Congress to be filed in and recorded with the  appropriate  offices) in the
     jurisdictions listed on Exhibit C.

     The documents referred to above (collectively the "Closing Documents") have
been or will be  delivered  to you in escrow and are to be held in and  released
from escrow for  recordation  solely in accordance with the terms and conditions
of this letter.

     We  anticipate  being in a position to  authorize  recording  on  Thursday,
August 7, 1997, or such other date as designated by Congress and Keystone as the
date of the closing of the transactions referred to herein (the "Closing Date").
You will be irrevocably  authorized to release the Closing Documents from escrow
and record such Closing Documents in the appropriate  jurisdictions  only if and
when the following conditions have been met:

     A. You receive executed originals of all of the Closing Documents; and

     B.   You receive  facsimile or other written  confirmation  from any of (i)
          Brett  Mook,  William  Bloom,  or George  Kalesnik of Congress or (ii)
          Donald Schwartz, Bradley Kotler or Jay Novatney of Latham & Watkins on
          behalf of Congress,  that you are instructed and authorized to release
          the Closing Documents from escrow and to record same.

     If you do not receive the foregoing  written  instructions  by the close of
business on ____________, 1997, you agree to return all of the Closing Documents
to Latham & Watkins,  5800 Sears  Tower,  Chicago,  Illinois  60606,  Attention:
_____________and  to destroy any and all copies which you may have made thereof,
by the close on business on ___________________, 1997.

     After  the  Closing  Date,  please  send  copies  of the  recorded  Closing
Documents, including file stamped copies of all UCC statements,  recorded by you
pursuant  to this  letter,  to Latham &  Watkins,  5800  Sears  Tower,  Chicago,
Illinois  60606,  Attention:  _____________.  Please  also  send  copies  of the
recorded Closing Documents, including file stamped copies of all UCC statements,
recorded by you  pursuant to this  letter to Keystone  Consolidated  Industries,
Inc.,  Three  Lincoln  Centre,  5430 LBJ Freeway  #1740,  Dallas,  Texas  75240,
Attention: General Counsel.

     All  title  charges  and  costs  or  recording  are to be paid by  Keystone
directly to you, and Congress is to be held at no expense for the transaction.