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TWELFTH AMENDMENT TO AMENDED AND RESTATED
                      REVOLVING LOAN AND SECURITY AGREEMENT

          THIS  TWELFTH  AMENDMENT TO AMENDED AND  RESTATED  REVOLVING  LOAN AND
SECURITY  AGREEMENT (the "Twelfth  Amendment") is dated as of March 15, 2002, 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 that certain  Amended and
Restated Revolving Loan and Security Agreement dated as of December 29, 1995 (as
amended,  supplemented  or  otherwise  modified  from  time to time,  the  "Loan
Agreement").

          WHEREAS, Borrower desires to amend the terms of the Loan Agreement.

          WHEREAS,  Lender is willing to amend the Loan  Agreement  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  definition  of  "Accounts"  in Section 1 of the Loan
                    Agreement is hereby  amended and restated in its entirety to
                    read as follows:

                        "Accounts"  shall mean all present and future  rights of
                        Borrower to payment of a monetary obligation, whether or
                        not earned by  performance,  which is not  evidenced  by
                        chattel  paper or an  instrument,  (a) for property that
                        has been or is to be sold, leased,  licensed,  assigned,
                        or otherwise  disposed of, (b) for services  rendered or
                        to be rendered,  (c) for a secondary obligation incurred
                        or to be  incurred,  or (d)  arising out of the use of a
                        credit or charge card or information contained on or for
                        use with the card.

                    2.  The  following  new  definition  of  "Amendment  No.  12
                    Effective  Date" is  hereby  added to  Section 1 of the Loan
                    Agreement in proper alphabetical order:

                        "Amendment  No. 12 Effective  Date" shall mean March 15,
                        2002.

                    3. The following new definition of "Capital Expenditures" is
                    hereby  added to Section 1 of the Loan  Agreement  in proper
                    alphabetical order:

                        "Capital   Expenditures"  means,  with  respect  to  any
                        Person,  all expenditures (by the expenditure of cash or
                        the  incurrence of  Indebtedness)  by such Person during
                        any   measuring   period   for  any   fixed   assets  or
                        improvements  or  for  replacements,   substitutions  or
                        additions thereto,  that have a useful life of more than
                        one year and that are required to be  capitalized  under
                        GAAP.   "Capital   Expenditures"   shall   not   include
                        expenditures by EWP and Garden Zone.

                    4. The following new definition of "Capital Stock" is hereby
                    added  to  Section  1  of  the  Loan   Agreement  in  proper
                    alphabetical order:

                        "Capital  Stock" shall mean, with respect to any Person,
                        any and all shares,  interests,  participations or other
                        equivalents   (however   designated)  of  such  Person's
                        capital stock or partnership,  limited liability company
                        or other equity interests at any time  outstanding,  and
                        any and all rights, warrants or options exchangeable for
                        or   convertible   into  such  capital  stock  or  other
                        interests  (but  excluding  any  debt  security  that is
                        exchangeable   for  or  convertible  into  such  capital
                        stock).

                    5.  The  following  new  definition  of  "Collateral  Access
                    Agreement"  is  hereby  added  to  Section  1  of  the  Loan
                    Agreement in proper alphabetical order:

                        "Collateral Access Agreement" shall mean an agreement in
                        writing,  in form and substance  satisfactory to Lender,
                        from any lessor of  premises to  Borrower,  or any other
                        person  to whom  any  Collateral  (including  Inventory,
                        Equipment,  bills of lading or other documents of title)
                        is consigned or who has custody,  control or  possession
                        of any such  Collateral  or is  otherwise  the  owner or
                        operator of any premises on which any of such Collateral
                        is located,  pursuant to which such lessor, consignee or
                        other  person,   inter  alia,   acknowledges  the  first
                        priority security interest of Lender in such Collateral,
                        agrees  to  waive  any  and  all  claims  such   lessor,
                        consignee or other person may, at any time, have against
                        such  Collateral,  whether  for  processing,  storage or
                        otherwise,  and agrees to permit  Lender  access to, and
                        the right to remain on,  the  premises  of such  lessor,
                        consignee  or other  person so as to  exercise  Lender's
                        rights  and  remedies  and  otherwise   deal  with  such
                        Collateral  and, in the case of any  consignee  or other
                        person  who  at  any  time  has   custody,   control  or
                        possession of any Collateral, acknowledges that it holds
                        and  will  hold  possession  of the  Collateral  for the
                        benefit of Lender and agrees to follow all  instructions
                        of Lender with respect thereto.

                    6. The following new definition of "Deposit  Account Control
                    Agreement"  is  hereby  added  to  Section  1  of  the  Loan
                    Agreement in proper alphabetical order:

                        "Deposit  Account  Control   Agreement"  shall  mean  an
                        agreement in writing, in form and substance satisfactory
                        to Lender, by and among Lender, Borrower and any bank at
                        which any  deposit  account of  Borrower  is at any time
                        maintained  which  provides  that such bank will  comply
                        with   instructions   originated  by  Lender   directing
                        disposition of the funds in the deposit  account without
                        further  consent by  Borrower  and such other  terms and
                        conditions  as Lender may  require,  including as to any
                        such  agreement  with  respect to any  Blocked  Account,
                        providing  that all items  received or  deposited in the
                        Blocked  Accounts are the  property of Lender,  that the
                        bank has no lien upon, or right to setoff  against,  the
                        Blocked   Accounts,   the  items  received  for  deposit
                        therein,  or the  funds  from  time to  time on  deposit
                        therein  and that  the  bank  will  wire,  or  otherwise
                        transfer,  in immediately  available  funds,  on a daily
                        basis to the Lender  Payment  Account all funds received
                        or deposited into the Blocked Accounts.

                    7. The following new  definition of "EBITDA" is hereby added
                    to Section 1 of the Loan  Agreement  in proper  alphabetical
                    order:

                        "EBITDA" means with respect to any Person for any fiscal
                        period,  without  duplication,  an  amount  equal to (a)
                        consolidated  net income of such  Person for such period
                        determined in accordance with GAAP, minus (b) the sum of
                        (i) income tax credits, (ii) interest income, (iii) gain
                        from  extraordinary  items  for  such  period,  (iv) any
                        aggregate  net gain  (but not any  aggregate  net  loss)
                        during such period  arising  from the sale,  exchange or
                        other  disposition  of  capital  assets  by such  Person
                        (including  any  fixed  assets,   whether   tangible  or
                        intangible,  all Inventory sold in conjunction  with the
                        disposition of fixed assets and all securities), (v) any
                        other non-cash gains that have been added in determining
                        consolidated  net  income,  and  (vi)  non-cash  defined
                        benefit  pension  income,  in each  case  to the  extent
                        included in the calculation of  consolidated  net income
                        of such Person for such period in accordance  with GAAP,
                        but  without  duplication,  plus  (c) the sum of (i) any
                        provision for income taxes, (ii) Interest Expense, (iii)
                        loss  from  extraordinary  items for such  period,  (iv)
                        depreciation  and  amortization  for  such  period,  (v)
                        amortized debt discount for such period, (vi) the amount
                        of any  deduction  to  consolidated  net  income  as the
                        result of any grant to any members of the  management of
                        such Person of any Capital Stock, (vii) non-cash defined
                        benefit pension expense and (viii) without  duplication,
                        non-cash  post-retirement  benefit expenses constituting
                        retired  employees'  medical and life insurance  benefit
                        expenses,  in each case to the  extent  included  in the
                        calculation  of  consolidated  net income of such Person
                        for such  period in  accordance  with GAAP,  but without
                        duplication.   For  purposes  of  this  definition,  the
                        following   items  shall  be  excluded  in   determining
                        consolidated net income of a Person:  (1) the income (or
                        deficit) of any other Person  accrued  prior to the date
                        it became a Subsidiary of, or was merged or consolidated
                        into, such Person or any of such Person's  Subsidiaries;
                        (2) the income (or deficit) of any other  Person  (other
                        than a Subsidiary) in which such Person has an ownership
                        interest,  except  to the  extent  any such  income  has
                        actually  been  received  by such  Person in the form of
                        cash dividends or  distributions;  (3) the undistributed
                        earnings of any  Subsidiary of such Person to the extent
                        that the  declaration or payment of dividends or similar
                        distributions  by  such  Subsidiary  is not at the  time
                        permitted by the terms of any contractual  obligation or
                        requirement  of law applicable to such  Subsidiary;  (4)
                        any  restoration to income of any  contingency  reserve,
                        except to the extent that provision for such reserve was
                        made out of accrued  income during such period;  (5) any
                        write-up  of any  asset;  (6)  any  net  gain  from  the
                        collection of the proceeds of life  insurance  policies;
                        (7) any net gain  arising  from the  acquisition  of any
                        securities,  or the  extinguishment,  under GAAP, of any
                        Indebtedness,  of  such  Person;  (8) in the  case  of a
                        successor to such Person by  consolidation  or merger or
                        as a  transferee  of its  assets,  any  earnings of such
                        successor  prior  to  such   consolidation,   merger  or
                        transfer of assets; (9) any deferred credit representing
                        the excess of equity in any Subsidiary of such Person at
                        the date of acquisition of such Subsidiary over the cost
                        to such Person of the investment in such Subsidiary.

                    8. The following  new  definition of "ERISA" is hereby added
                    to Section 1 of the Loan  Agreement  in proper  alphabetical
                    order:

                        "ERISA" shall mean the United States Employee Retirement
                        Income  Security Act of 1974,  together  with all rules,
                        regulations  and  interpretations  thereunder or related
                        thereto.

                    9. The  following  new  definition  of "ERISA  Affiliate" is
                    hereby  added to Section 1 of the Loan  Agreement  in proper
                    alphabetical order:

                        "ERISA  Affiliate"  shall mean any person required to be
                        aggregated  with  Borrower  or any  of its  Subsidiaries
                        under Sections 414(b),  414(c),  414(m) or 414(o) of the
                        Code.

                    10. The following new definition of "EWP" is hereby added to
                    Section  1 of the  Loan  Agreement  in  proper  alphabetical
                    order:

                        "EWP" means  Engineered  Wire  Products,  Inc.,  an Ohio
                        corporation.

                    11. The  following  new  definition  of "Fiscal  Quarter" is
                    hereby  added to Section 1 of the Loan  Agreement  in proper
                    alphabetical order:

                        "Fiscal  Quarter" means any of the quarterly  accounting
                        periods of Borrower,  ending  consistent with Borrower's
                        Securities and Exchange Commission reporting periods.

                    12. The  following  new  definition  of "Fixed  Charges"  is
                    hereby  added to Section 1 of the Loan  Agreement  in proper
                    alphabetical order:

                        "Fixed  Charges"  means,  with respect to any Person for
                        any fiscal  period,  (a) the  aggregate  of all Interest
                        Expense  paid or  accrued  (except  with  respect to the
                        deferred  interest  expense of (i) the 6% Notes and (ii)
                        the 8% Notes)  during such  period,  plus (b)  scheduled
                        payments  of  principal  with  respect  to  Indebtedness
                        during such period, plus (c) Capital Expenditures during
                        such  period,  plus (d)  corporate  income taxes paid in
                        cash during such period.

                    13. The following new  definition of "Fixed Charge  Coverage
                    Ratio" is hereby added to Section 1 of the Loan Agreement in
                    proper alphabetical order:

                        "Fixed Charge Coverage Ratio" means, with respect to any
                        Person  for any  fiscal  period,  the ratio of EBITDA to
                        Fixed Charges.

                    14. The following new definition of "Governmental Authority"
                    is hereby added to Section 1 of the Loan Agreement in proper
                    alphabetical order:

                        "Governmental   Authority"  shall  mean  any  nation  or
                        government,  any  state,  province,  or other  political
                        subdivision   thereof,  any  central  bank  (or  similar
                        monetary or regulatory  authority)  thereof,  any entity
                        exercising executive, legislative,  judicial, regulatory
                        or   administrative   functions  of  or   pertaining  to
                        government, and any corporation or other entity owned or
                        controlled,   through  stock  or  capital  ownership  or
                        otherwise, by any of the foregoing.

                    15. The following new definition of "Indebtedness" is hereby
                    added  to  Section  1  of  the  Loan   Agreement  in  proper
                    alphabetical order:

                        "Indebtedness"  shall mean,  with respect to any Person,
                        any liability, whether or not contingent, (a) in respect
                        of borrowed  money  (whether or not the  recourse of the
                        lender is to the whole of the  assets of such  Person or
                        only to a portion thereof) or evidenced by bonds, notes,
                        debentures or similar instruments;  (b) representing the
                        balance deferred and unpaid of the purchase price of any
                        property  or  services  (except  any such  balance  that
                        constitutes  an  account  payable  to a  trade  creditor
                        (whether or not an Affiliate) created, incurred, assumed
                        or guaranteed  by such Person in the ordinary  course of
                        business of such  Person in  connection  with  obtaining
                        goods, materials or services that is not overdue by more
                        than ninety (90) days, unless the trade payable is being
                        contested in good faith);  (c) all obligations as lessee
                        under  leases   which  have  been,   or  should  be,  in
                        accordance with GAAP recorded as capital leases; (d) any
                        contractual obligation, contingent or otherwise, of such
                        Person  to pay  or be  liable  for  the  payment  of any
                        indebtedness  of  another  Person,  including,   without
                        limitation,   any   such   indebtedness,   directly   or
                        indirectly  guaranteed,  or any  agreement  to purchase,
                        repurchase,  or  otherwise  acquire  such  indebtedness,
                        obligation or liability or any security therefor,  or to
                        provide funds for the payment or discharge  thereof,  or
                        to maintain solvency,  assets, level of income, or other
                        financial condition; (e) all obligations with respect to
                        mandatory  redeemable stock and mandatory  redemption or
                        repurchase  obligations under any Capital Stock or other
                        equity  securities  issued  by  such  Person;   (f)  all
                        reimbursement  obligations and other liabilities of such
                        Person  with  respect  to  surety  bonds  (whether  bid,
                        performance or otherwise),  letters of credit,  banker's
                        acceptances,  drafts or similar documents or instruments
                        issued for such Person's  account;  (g) all indebtedness
                        of such  Person in  respect of  indebtedness  of another
                        Person for  borrowed  money or  indebtedness  of another
                        Person  otherwise  described in this definition which is
                        secured  by  any  consensual  lien,  security  interest,
                        collateral assignment,  conditional sale, mortgage, deed
                        of  trust,  or other  encumbrance  on any  asset of such
                        Person, whether or not such obligations,  liabilities or
                        indebtedness are assumed by or are a personal  liability
                        of  such   Person,   all  as  of  such  time;   (h)  all
                        obligations, liabilities and indebtedness of such Person
                        (marked to market)  arising under swap  agreements,  cap
                        agreements and collar agreements and other agreements or
                        arrangements  designed to protect  such  person  against
                        fluctuations  in interest rates or currency or commodity
                        values and (i) all obligations owed by such Person under
                        license   agreements  with  respect  to  non-refundable,
                        advance or minimum guarantee royalty payments.

                    16. The following new definition of "Intellectual  Property"
                    is hereby added to Section 1 of the Loan Agreement in proper
                    alphabetical order:

                        "Intellectual  Property" shall mean Borrower's now owned
                        and  hereafter  arising  or  acquired:  patents,  patent
                        rights, patent applications, copyrights, works which are
                        the   subject    matter   of    copyrights,    copyright
                        registrations,  trademarks,  trade names,  trade styles,
                        trademark  and service mark  applications,  and licenses
                        and rights to use any of the foregoing;  all extensions,
                        renewals,  reissues,   divisions,   continuations,   and
                        continuations-in-part  of  any  of  the  foregoing;  all
                        rights to sue for past, present and future  infringement
                        of any  of the  foregoing;  inventions,  trade  secrets,
                        formulae,  processes,   compounds,   drawings,  designs,
                        blueprints,  surveys,  reports,  manuals,  and operating
                        standards;  goodwill  (including any goodwill associated
                        with any  trademark  or the  license of any  trademark);
                        customer  and other lists in whatever  form  maintained;
                        and trade secret  rights,  copyright  rights,  rights in
                        works  of  authorship,  domain  names  and  domain  name
                        registrations;  software and contract rights relating to
                        software, in whatever form created or maintained.

                    17. The  following new  definition of "Interest  Expense" is
                    hereby  added to Section 1 of the Loan  Agreement  in proper
                    alphabetical order:

                        "Interest Expense" means, with respect to any Person for
                        any fiscal period, cash and non-cash interest expense of
                        such Person  determined in accordance  with GAAP for the
                        relevant period ended on such date,  including  interest
                        expense with respect to any  Indebtedness of such Person
                        and interest  expense for the  relevant  period that has
                        been capitalized on the balance sheet of such Person.

                    18. The following new definition of "Lender Payment Account"
                    is hereby added to Section 1 of the Loan Agreement in proper
                    alphabetical order:

                        "Lender   Payment   Account"   shall  mean  account  no.
                        322-020557  of  Lender at Chase  Manhattan  Bank or such
                        other  account of Lender as Lender may from time to time
                        designate to Borrower as the Lender Payment  Account for
                        purposes of this Agreement.

                    19. The following new  definition of "Loans" is hereby added
                    to Section 1 of the Loan  Agreement  in proper  alphabetical
                    order:

                        "Loans"  shall  mean the  Revolving  Loans  and the Term
                        Loan.

                    20. The  definition of "Maximum  Credit" 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 $50,000,000.

                    21. The following new  definition of  "Mortgages"  is hereby
                    added  to  Section  1  of  the  Loan   Agreement  in  proper
                    alphabetical order:

                        "Mortgages"  shall mean,  individually and collectively,
                        each  of  the  following:  (a)  the  Mortgage,  Security
                        Agreement,  Assignment  of Leases and  Rents,  Financing
                        Statement  and  Fixture  Filing,   dated  of  even  date
                        herewith, by Borrower in favor of Lender with respect to
                        the Real Property and related assets of Borrower located
                        in  Peoria  County,  Illinois,  (b) the  Deed of  Trust,
                        Assignment,  Security Agreement and Financing Statement,
                        dated of even date  herewith,  by Sherman  Wire  Company
                        f/k/a DeSoto,  Inc.  ("Sherman") in favor of Lender with
                        respect  to the Real  Property  and  related  assets  of
                        Sherman located in Grayson County,  Texas,  (c) the Deed
                        of Trust,  Assignment,  Security Agreement and Financing
                        Statement,  dated of even date herewith, by Sherman Wire
                        of  Caldwell,  Inc.  ("Sherman  Caldwell")  in  favor of
                        Lender  with  respect to the Real  Property  and related
                        assets of Sherman  Caldwell  located in Burleson County,
                        Texas,  and  (d)  the  Mortgage,   Security   Agreement,
                        Assignment of Leases and Rents,  Financing Statement and
                        Fixture Filing, dated of even date herewith, by Borrower
                        in favor of Lender with respect to the Real Property and
                        related assets of Borrower located in Washington County,
                        Arkansas.

                    22. The following new definition of "Multiemployer  Plan" is
                    hereby  added to Section 1 of the Loan  Agreement  in proper
                    alphabetical order:

                        "Multiemployer Plan" shall mean a "multi-employer  plan"
                        as defined in Section  4001(a)(3)  of ERISA  which is or
                        was  at  any  time  during  the  current   year  or  the
                        immediately  preceding six (6) years  contributed  to by
                        Borrower or any ERISA Affiliate.

                    23. The definition of "Obligations" in Section 1 of the Loan
                    Agreement  is hereby  amended  to add the  phrase  "the Term
                    Loan," after the phrase "Revolving Loans," in the first line
                    thereof.

                    24. The following  new  definition of "Plan" is hereby added
                    to Section 1 of the Loan  Agreement  in proper  alphabetical
                    order:

                        "Plan"  means an  employee  benefit  plan (as defined in
                        Section   3(3)  of  ERISA)  which   Borrower   sponsors,
                        maintains,  or to  which  it  makes,  is  making,  or is
                        obligated  to make  contributions,  or in the  case of a
                        Multiemployer  Plan has made  contributions  at any time
                        during the immediately preceding six (6) plan years.

                    25. The  following  new  definition  of "Real  Property"  is
                    hereby  added to Section 1 of the Loan  Agreement  in proper
                    alphabetical order:

                        "Real  Property"  shall mean all now owned and hereafter
                        acquired real property of Borrower,  including leasehold
                        interests, together with all buildings,  structures, and
                        other  improvements  located  thereon and all  licenses,
                        easements and appurtenances  relating thereto,  wherever
                        located,  including the real property and related assets
                        more particularly described in the Mortgages.

                    26. The following new definition of  "Receivables" is hereby
                    added  to  Section  1  of  the  Loan   Agreement  in  proper
                    alphabetical order:

                        "Receivables"  shall mean all of the following now owned
                        or hereafter  arising or acquired  property of Borrower:
                        (a) all Accounts; (b) all interest,  fees, late charges,
                        penalties,  collection  fees and other amounts due or to
                        become due or otherwise  payable in connection  with any
                        Account;  (c) all payment  intangibles  of Borrower  and
                        other  contract  rights,  chattel  paper,   instruments,
                        notes, and other forms of obligations owing to Borrower,
                        whether  from  the  sale  and  lease  of  goods or other
                        property,   licensing   of   any   property   (including
                        Intellectual  Property  or other  general  intangibles),
                        rendition  of  services  or from  loans or  advances  by
                        Borrower  or to or for the  benefit of any third  person
                        (including  loans  or  advances  to  any  affiliates  or
                        Subsidiaries  of Borrower) or otherwise  associated with
                        any  Accounts,   Inventory  or  general  intangibles  of
                        Borrower  (including,   without  limitation,  choses  in
                        action,  causes  of  action,  tax  refunds,  tax  refund
                        claims,  any funds which may become  payable to Borrower
                        in connection  with the termination of any Plan or other
                        employee  benefit plan and any other amounts  payable to
                        Borrower from any Plan or other  employee  benefit plan,
                        rights and claims against carriers and shippers,  rights
                        to indemnification,  business interruption insurance and
                        proceeds  thereof,  casualty  or any  similar  types  of
                        insurance  and any  proceeds  thereof  and  proceeds  of
                        insurance  covering  the  lives  of  employees  on which
                        Borrower is a beneficiary).

                    27. The following new  definition of "Revolving  Loan Limit"
                    is hereby added to Section 1 of the Loan Agreement in proper
                    alphabetical order:

                        "Revolving Loan Limit" shall mean $45,000,000.

                    28.  The   following   new   definition   of   "Subordinated
                    Indebtedness"  is  hereby  added  to  Section  1 of the Loan
                    Agreement in proper alphabetical order:

                        "Subordinated  Indebtedness"  shall mean (i)  Borrower's
                        obligations  under that certain Loan Agreement  dated as
                        of March  13,  2002,  by and  between  Borrower  and the
                        County of Peoria,  Illinois, (ii) Borrower's obligations
                        under that  certain  $19,800,000  Indenture  dated as of
                        March 15, 2002,  between the  Borrower,  as issuer,  and
                        U.S.  Bank  National  Association,  a  national  banking
                        association,   as   trustee,   and  those   certain   8%
                        Subordinated   Secured   Notes   due   2009   (the   "8%
                        Notes")executed in connection therewith, and (iii) those
                        certain 6%  Subordinated  Unsecured  Notes due 2011 (the
                        "6% Notes");  in each case together with all  collateral
                        documents   and  all  other   agreements   executed   in
                        connection therewith.

                    29. The following new definition of "Subsidiaries" is hereby
                    added  to  Section  1  of  the  Loan   Agreement  in  proper
                    alphabetical order:

                        "Subsidiary" or "subsidiary" shall mean, with respect to
                        any Person, any corporation,  limited liability company,
                        limited  liability   partnership  or  other  limited  or
                        general   partnership,   trust,   association  or  other
                        business  entity  of  which an  aggregate  of at least a
                        majority  of the  outstanding  Capital  Stock  or  other
                        interests  entitled to vote in the election of the board
                        of  directors  of  such  corporation   (irrespective  of
                        whether,  at the time,  Capital Stock of any other class
                        or classes of such corporation  shall have or might have
                        voting   power  by  reason  of  the   happening  of  any
                        contingency),  managers,  trustees or other  controlling
                        persons, or an equivalent  controlling interest therein,
                        of such Person is, at the time,  directly or indirectly,
                        owned by such Person and/or one or more  Subsidiaries of
                        such Person.

                    30. The  following  new  definition of "Term Loan" is hereby
                    added  to  Section  1  of  the  Loan   Agreement  in  proper
                    alphabetical order:

                        "Term  Loan"  shall mean the term loan made by Lender to
                        Borrower as provided for in Section 2.4 hereof.

                    31. The following new definition of "UCC" is hereby added to
                    Section  1 of the  Loan  Agreement  in  proper  alphabetical
                    order:

                        "UCC"  shall  mean  the  Uniform  Commercial  Code as in
                        effect  in the  State  of  Illinois,  and any  successor
                        statute,  as in effect  from time to time  (except  that
                        terms  used  herein  which are  defined  in the  Uniform
                        Commercial Code as in effect in the State of Illinois on
                        the date of the Twelfth Amendment shall continue to have
                        the same  meaning  notwithstanding  any  replacement  or
                        amendment of such statute except as Lender may otherwise
                        determine).

                    32. The following new definition of "Vendor  Settlements" is
                    hereby  added to Section 1 of the Loan  Agreement  in proper
                    alphabetical order:

                        "Vendor  Settlements" shall mean Borrower's  obligations
                        under (i) that certain Account Reconciliation  Agreement
                        dated as of March 12, 2002, by and between  Borrower and
                        Central Illinois Light Company, an Illinois corporation,
                        and (ii) that certain Account  Reconciliation  Agreement
                        dated as of March 11, 2002, by and between  Borrower and
                        PSC Metals, Inc., an Ohio corporation.

          B.  Subsection  (c) of  Section  2.1 of the Loan  Agreement  is hereby
          amended and restated in its entirety to read as follows:

                        Except in Lender's discretion,  (i) the aggregate amount
                        of  Revolving  Loans  outstanding  at any time shall not
                        exceed the  Revolving  Loan Limit and (ii) the aggregate
                        amount   of  the   Loans   and  the   Letter  of  Credit
                        Accommodations  outstanding at any time shall not exceed
                        the Maximum  Credit.  In the event that the  outstanding
                        amount of any  component of the Loans,  or the aggregate
                        amount of the  outstanding  Loans  and  Letter of Credit
                        Accommodations,  exceed the amounts  available under the
                        lending   formulas,   the  Revolving  Loan  Limit,   the
                        sublimits  for the Letter of Credit  Accommodations  set
                        forth  in  Section  2.2(c)  or the  Maximum  Credit,  as
                        applicable,   such  event  shall  not  limit,  waive  or
                        otherwise   affect   any   rights   of  Lender  in  that
                        circumstance  or on any future  occasions  and  Borrower
                        shall,  upon demand by Lender,  which may be made at any
                        time or from time to time,  immediately  repay to Lender
                        the  entire  amount  of any such  excess(es)  for  which
                        payment is demanded.

          C. The following new Section 2.4 is hereby added to the Loan Agreement
          in proper numerical order:

                        2.4 Term Loan.

                        (a)  Lender  is making a Term  Loan to  Borrower  in the
                        original  principal amount of $5,000,000.  The Term Loan
                        is (a) evidenced by a Term Loan  promissory note in such
                        original  principal  amount  to  be  duly  executed  and
                        delivered  by  Borrower  to  Lender  on the date of such
                        borrowing;  (b) to be repaid, together with interest and
                        other amounts,  in accordance with this  Agreement,  the
                        Term  Loan  promissory  note,  and the  other  Financing
                        Agreements and (c) secured by all of the Collateral. The
                        principal  amount  of the Term  Loan  shall be repaid in
                        thirty-six (36)  consecutive  monthly  installments  (or
                        earlier as provided  herein) payable on the first day of
                        each month  commencing  May 1, 2002,  of which the first
                        thirty-five  (35)  installments  shall  each  be in  the
                        amount of $104,167 and the last installment  shall be in
                        the amount of the entire unpaid balance of the Term Loan
                        and shall be payable on the Renewal Date.

                        (b)   Notwithstanding   subsection   2.4(a)  above,  the
                        aggregate outstanding principal balance of the Term Loan
                        shall  be  due  and  payable  in  full  in   immediately
                        available   funds  upon  the   Renewal   Date  or  other
                        termination  of or  prepayment  in full of the Revolving
                        Loans.  No payment  with respect to the Term Loan may be
                        reborrowed.

          D. Section 3.1(a) of the Loan Agreement is hereby amended by replacing
          each reference to the phrase "Revolving Loans" with the word "Loans".

          E. Clause (vi) of  Subsection  3.1(b) of the Loan  Agreement is hereby
          amended and restated in its entirety to read as follows:

                        (vi) the maximum amount of the Eurodollar  Rate Loans at
                        any time  requested  by  Borrower  shall not  exceed the
                        amount  equal to (A) the  principal  amount  of the Term
                        Loan which it is  anticipated  will be outstanding as of
                        the last day of the applicable  Interest Period plus (B)
                        eighty (80%) percent of the lowest  principal  amount of
                        the  Revolving  Loans  which it is  anticipated  will be
                        outstanding  during the applicable  Interest Period,  in
                        each  case  as   determined   by  Lender  (but  with  no
                        obligation of Lender to make such Loans),

          F. Section 4.2 of the Loan  Agreement  is hereby  amended by replacing
          the phrase "Revolving Loans" with the word "Loans" wherever it appears
          therein.

          G. Section 5 of the Loan  Agreement is hereby  amended and restated in
          its entirety to read as follows:

                    Section 5. GRANT OF SECURITY INTEREST

                    5.1  Grant of  Security  Interest.  To  secure  payment  and
                    performance of all  Obligations,  Borrower  hereby grants to
                    Lender a continuing security interest in, a lien upon, and a
                    right of set off  against,  and hereby  assigns to Lender as
                    security,  all personal  and real  property and fixtures and
                    interests in property and fixtures of Borrower,  whether now
                    owned  or  hereafter  acquired  or  existing,  and  wherever
                    located (together with all other collateral security for the
                    Obligations at any time granted to or held by or acquired by
                    Lender, collectively, the Collateral"), including:

                    (a) all Accounts;

                    (b) all general intangibles,  including, without limitation,
                    all Intellectual Property;

                    (c) all goods, including, without limitation,  Inventory and
                    Equipment;

                    (d) all Real Property and fixtures;

                    (e) all chattel paper (including all tangible and electronic
                    chattel paper);

                    (f) all instruments (including all promissory notes);

                    (g) all documents;

                    (h) all deposit accounts;

                    (i) all letters of credit,  banker's acceptances and similar
                    instruments and including all letter-of-credit rights;

                    (j) all  supporting  obligations  and all present and future
                    liens,  security  interests,  rights,  remedies,  title  and
                    interest  in, to and in  respect  of  Receivables  and other
                    Collateral,  including  (i)  rights  and  remedies  under or
                    relating to guaranties,  contracts of suretyship, letters of
                    credit  and  credit  and  other  insurance  related  to  the
                    Collateral,  (ii) rights of  stoppage in transit,  replevin,
                    repossession,  reclamation  and other rights and remedies of
                    an unpaid  vendor,  lienor or  secured  party,  (iii)  goods
                    described in invoices,  documents,  contracts or instruments
                    with respect to, or otherwise  representing  or  evidencing,
                    Receivables  or  other   Collateral,   including   returned,
                    repossessed  and reclaimed  goods,  and (iv) deposits by and
                    property of account  debtors or other  persons  securing the
                    obligations of account debtors;

                    (k)  all  (i)  investment  property  (including  securities,
                    whether certificated or uncertificated, securities accounts,
                    security  entitlements,  commodity  contracts  or  commodity
                    accounts),  excluding  Borrower's  investments  in  EWP  and
                    Garden Zone, and (ii) monies, credit balances,  deposits and
                    other property of Borrower now or hereafter held or received
                    by or in transit to Lender or its affiliates or at any other
                    depository or other  institution  from or for the account of
                    Borrower,   whether  for   safekeeping,   pledge,   custody,
                    transmission,  collection or otherwise, excluding funds held
                    in trust with respect to environmental liabilities and 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;

                    (l)  all   commercial   tort  claims,   including,   without
                    limitation, those identified in the Information Certificate;

                    (m)  to  the  extent  not  otherwise  described  above,  all
                    Receivables;

                    (n) all Records; and

                    (o) all products and proceeds of the foregoing, in any form,
                    including  insurance  proceeds and all claims  against third
                    parties  for loss or  damage to or  destruction  of or other
                    involuntary  conversion  of any kind or nature of any or all
                    of the other Collateral.

                    Lender  acknowledges that the definition of Collateral shall
                    not include the assets of Garden Zone and EWP.

                    5.2 Perfection of Security Interests.

                    (a)  Borrower  irrevocably  and  unconditionally  authorizes
                    Lender  (or its  agent) to file at any time and from time to
                    time  such   financing   statements   with  respect  to  the
                    Collateral  naming  Lender or its  designee  as the  secured
                    party and  Borrower as debtor,  as Lender may  require,  and
                    including any other  information with respect to Borrower or
                    otherwise  required  by part 5 of  Article 9 of the  Uniform
                    Commercial   Code  of  such   jurisdiction   as  Lender  may
                    determine,  together with any  amendment  and  continuations
                    with respect thereto, which authorization shall apply to all
                    financing  statements  filed on,  prior to or after the date
                    hereof.  Borrower hereby ratifies and approves all financing
                    statements  naming  Lender or its designee as secured  party
                    and Borrower as debtor with respect to the  Collateral  (and
                    any amendments  with respect to such  financing  statements)
                    filed by or on behalf of Lender prior to the date hereof and
                    ratifies and confirms  the  authorization  of Lender to file
                    such financing statements (and amendments, if any). Borrower
                    hereby  authorizes Lender to adopt on behalf of Borrower any
                    symbol required for authenticating any electronic filing. In
                    the event  that the  description  of the  collateral  in any
                    financing  statement  naming  Lender or its  designee as the
                    secured  party and  Borrower as debtor  includes  assets and
                    properties  of Borrower  that do not at any time  constitute
                    Collateral,  whether  hereunder,  under  any  of  the  other
                    Financing  Agreements  or  otherwise,  the  filing  of  such
                    financing  statement shall  nonetheless be deemed authorized
                    by Borrower to the extent of the Collateral included in such
                    description and it shall not render the financing  statement
                    ineffective as to any of the Collateral or otherwise  affect
                    the  financing  statement  as  it  applies  to  any  of  the
                    Collateral.  In no event shall Borrower at any time file, or
                    permit or cause to be filed,  any  correction  statement  or
                    termination   statement   with  respect  to  any   financing
                    statement  (or  amendment  or   continuation   with  respect
                    thereto)  naming Lender or its designee as secured party and
                    Borrower as debtor.

                    (b)  Borrower  does  not  have any  chattel  paper  (whether
                    tangible  or  electronic)  or  instruments  as of  the  date
                    hereof, except as set forth in the Information  Certificate.
                    In the event that  Borrower  shall be  entitled  to or shall
                    receive  any  chattel  paper or  instrument  after  the date
                    hereof,  Borrower  shall  promptly  notify Lender thereof in
                    writing.  Promptly upon the receipt  thereof by or on behalf
                    of  Borrower  (including  by any  agent or  representative),
                    Borrower shall deliver,  or cause to be delivered to Lender,
                    all tangible chattel paper and instruments that Borrower has
                    or may at any time acquire,  accompanied by such instruments
                    of transfer or  assignment  duly executed in blank as Lender
                    may from time to time specify, in each case except as Lender
                    may otherwise agree. At Lender's option,  Borrower shall, or
                    Lender  may at any time on  behalf  of  Borrower,  cause the
                    original  of any  such  instrument  or  chattel  paper to be
                    conspicuously  marked  in a form and  manner  acceptable  to
                    Lender with the following  legend referring to chattel paper
                    or    instruments    as    applicable:     "This    [chattel
                    paper][instrument]  is subject to the  security  interest of
                    Congress  Financial  Corporation  (Central)  and  any  sale,
                    transfer,   assignment  or   encumbrance  of  this  [chattel
                    paper][instrument]  violates  the  rights  of  such  secured
                    party."

                    (c) In the  event  that  Borrower  shall at any time hold or
                    acquire an interest in any  electronic  chattel paper or any
                    "transferable  record"  (as such term is  defined in Section
                    201 of the  Federal  Electronic  Signatures  in  Global  and
                    National  Commerce  Act  or in  Section  16 of  the  Uniform
                    Electronic  Transactions  Act as in effect  in any  relevant
                    jurisdiction), Borrower shall promptly notify Lender thereof
                    in writing.  Promptly upon Lender's request,  Borrower shall
                    take,  or cause to be taken,  such  actions  as  Lender  may
                    reasonably request to give Lender control of such electronic
                    chattel  paper under Section 9-105 of the UCC and control of
                    such  transferable  record under  Section 201 of the Federal
                    Electronic  Signatures  in Global and National  Commerce Act
                    or, as the case may be, Section 16 of the Uniform Electronic
                    Transactions Act, as in effect in such jurisdiction.

                    (d)  Borrower  does not have any  lockbox  or other  deposit
                    accounts (where payments on Receivables or other proceeds of
                    Inventory or other  Collateral are deposited) as of the date
                    hereof, except as set forth in the Information  Certificate.
                    Borrower shall not,  directly or indirectly,  after the date
                    hereof  open,  establish  or  maintain  any lockbox or other
                    deposit  account  (where  payments on  Receivables  or other
                    proceeds of Inventory  or other  Collateral  are  deposited)
                    unless each of the following  conditions  is satisfied:  (i)
                    Lender  shall have  received not less than five (5) Business
                    Days prior  written  notice of the  intention of Borrower to
                    open or establish such account which notice shall specify in
                    reasonable  detail and specificity  acceptable to Lender the
                    name of the account,  the owner of the account, the name and
                    address of the bank at which such account is to be opened or
                    established,  the individual at such bank with whom Borrower
                    is dealing  and the  purpose of the  account,  (ii) the bank
                    where  such  account  is  opened  or  maintained   shall  be
                    acceptable to Lender,  and (iii) on or before the opening of
                    such deposit  account,  Borrower shall as Lender may specify
                    either  (A)  deliver  to  Lender a Deposit  Account  Control
                    Agreement   with  respect  to  such  deposit   account  duly
                    authorized,  executed and delivered by Borrower and the bank
                    at which such deposit  account is opened and  maintained  or
                    (B)  arrange  for Lender to become the  customer of the bank
                    with respect to the deposit  account on terms and conditions
                    acceptable to Lender. The terms of this subsection (d) shall
                    not apply to deposit  accounts  specifically and exclusively
                    used for payroll,  payroll taxes and other employee wage and
                    benefit  payments  to  or  for  the  benefit  of  Borrower's
                    salaried or hourly wage employees.

                    (e) Borrower does not own or hold,  directly or  indirectly,
                    beneficially  or as  record  owner or both,  any  investment
                    property,  as of the date  hereof,  or have  any  investment
                    account,  securities  account,  commodity  account  or other
                    similar account with any bank or other financial institution
                    or other securities  intermediary or commodity  intermediary
                    as of the date  hereof,  in each case except as set forth in
                    the Information Certificate.

                    (i) In the event that Borrower shall be entitled to or shall
                    at any  time  after  the date  hereof  hold or  acquire  any
                    certificated  securities,  Borrower shall promptly  endorse,
                    assign and deliver the same to Lender,  accompanied  by such
                    instruments of transfer or assignment duly executed in blank
                    as Lender may from time to time specify.  If any securities,
                    now or hereafter acquired by Borrower are uncertificated and
                    are issued to Borrower or its nominee directly by the issuer
                    thereof,  Borrower shall  immediately  notify Lender thereof
                    and shall as Lender may specify, either (A) cause the issuer
                    to agree to comply with  instructions from Lender as to such
                    securities,  without  further  consent of  Borrower  or such
                    nominee,  or (B) arrange for Lender to become the registered
                    owner of the securities.

                    (ii) Borrower shall not,  directly or indirectly,  after the
                    date  hereof  open,  establish  or maintain  any  investment
                    account,  securities account, commodity account or any other
                    similar  account  (other  than a deposit  account)  with any
                    securities  intermediary  or commodity  intermediary  unless
                    each of the following  conditions  is satisfied:  (A) Lender
                    shall have  received  not less than five (5)  Business  Days
                    prior written notice of the intention of Borrower to open or
                    establish   such  account  which  notice  shall  specify  in
                    reasonable  detail and specificity  acceptable to Lender the
                    name of the account,  the owner of the account, the name and
                    address  of  the   securities   intermediary   or  commodity
                    intermediary  at  which  such  account  is to be  opened  or
                    established,  the individual at such  intermediary with whom
                    Borrower is dealing and the purpose of the account,  (B) the
                    securities  intermediary or commodity  intermediary  (as the
                    case may be) where  such  account  is  opened or  maintained
                    shall be  acceptable  to  Lender,  and (C) on or before  the
                    opening of such investment  account,  securities  account or
                    other  similar  account  with a securities  intermediary  or
                    commodity intermediary, Borrower shall as Lender may specify
                    either (1) execute and deliver, and cause to be executed and
                    delivered  to  Lender,   an  Investment   Property   Control
                    Agreement with respect thereto duly authorized, executed and
                    delivered by Borrower and such  securities  intermediary  or
                    commodity  intermediary  or (2) arrange for Lender to become
                    the  entitlement  holder  with  respect  to such  investment
                    property on terms and conditions acceptable to Lender.

                    (f) Borrower is not the beneficiary or otherwise entitled to
                    any right to payment  under any  letter of credit,  banker's
                    acceptance  or  similar  instrument  as of the date  hereof,
                    except as set forth in the Information  Certificate.  In the
                    event that  Borrower  shall be entitled to or shall  receive
                    any right to payment  under any  letter of credit,  banker's
                    acceptance or any similar instrument, whether as beneficiary
                    thereof or otherwise  after the date hereof,  Borrower shall
                    promptly  notify Lender  thereof in writing.  Borrower shall
                    immediately,  as Lender may specify,  either (i) deliver, or
                    cause to be  delivered  to Lender,  with respect to any such
                    letter of credit, banker's acceptance or similar instrument,
                    the written  agreement of the issuer and any other nominated
                    person  obligated  to make any  payment in  respect  thereof
                    (including any confirming or negotiating  bank), in form and
                    substance   satisfactory   to  Lender,   consenting  to  the
                    assignment of the proceeds of the letter of credit to Lender
                    by  Borrower  and  agreeing  to make  all  payments  thereon
                    directly to Lender or as Lender may otherwise direct or (ii)
                    cause  Lender  to  become,   at  Borrower's   expense,   the
                    transferee  beneficiary  of the letter of  credit,  banker's
                    acceptance or similar instrument (as the case may be).

                    (g)  Borrower has no  commercial  tort claims as of the date
                    hereof, except as set forth in the Information  Certificate.
                    In the event that Borrower  shall at any time after the date
                    hereof  have any  commercial  tort  claims,  Borrower  shall
                    promptly  notify  Lender  thereof in writing,  which  notice
                    shall (i) set forth in  reasonable  detail the basis for and
                    nature of such  commercial  tort claim and (ii)  include the
                    express  grant by Borrower to Lender of a security  interest
                    in such commercial tort claim (and the proceeds thereof). In
                    the event that such notice does not include  such grant of a
                    security interest, the sending thereof by Borrower to Lender
                    shall be deemed to constitute such grant to Lender. Upon the
                    sending of such notice,  any commercial tort claim described
                    therein shall constitute part of the Collateral and shall be
                    deemed included therein.  Without limiting the authorization
                    of Lender  provided in Section  5.2(a)  hereof or  otherwise
                    arising by the  execution  by Borrower of this  Agreement or
                    any of the  other  Financing  Agreements,  Lender  is hereby
                    irrevocably  authorized from time to time and at any time to
                    file such financing statements naming Lender or its designee
                    as secured party and Borrower as debtor,  or any  amendments
                    to any financing  statements,  covering any such  commercial
                    tort  claim  as  Collateral.  In  addition,  Borrower  shall
                    promptly  upon  Lender's  request,  execute and deliver,  or
                    cause to be  executed  and  delivered,  to Lender such other
                    agreements,  documents and instruments as Lender may require
                    in connection with such commercial tort claim.

                    (h) Borrower does not have any goods,  documents of title or
                    other Collateral in the custody,  control or possession of a
                    third  party as of the date  hereof,  except as set forth in
                    the Information  Certificate and except for goods located in
                    the  United  States in transit  to a  location  of  Borrower
                    permitted  herein  in the  ordinary  course of  business  of
                    Borrower in the possession of the carrier  transporting such
                    goods.  In the event that any goods,  documents of the title
                    or other Collateral are at any time after the date hereof in
                    the custody,  control or  possession of any other person not
                    referred to in the Information Certificate or such carriers,
                    Borrower  shall  promptly  notify Lender thereof in writing.
                    Promptly upon Lender's  request with respect to any material
                    amount of  Collateral  located  in the  custody,  control or
                    possession  of any third party,  Borrower  shall  deliver to
                    Lender  a  Collateral   Access  Agreement  duly  authorized,
                    executed and delivered by such person and Borrower.

                    (i)  Borrower  shall  take  any  other  actions   reasonably
                    requested   by  Lender  from  time  to  time  to  cause  the
                    attachment,  perfection  and  first  priority  of,  and  the
                    ability  of Lender to  enforce,  the  security  interest  of
                    Lender in any and all of the Collateral,  including, without
                    limitation,    (i)   executing,    delivering   and,   where
                    appropriate,  filing  financing  statements  and  amendments
                    relating  thereto under the UCC or other  applicable law, to
                    the extent,  if any, that  Borrower's  signature  thereon is
                    required therefor, (ii) causing Lender's name to be noted as
                    secured party on any  certificate of title for a titled good
                    if such notation is a condition to attachment, perfection or
                    priority  of, or ability of Lender to enforce,  the security
                    interest of Lender in such Collateral,  (iii) complying with
                    any  provision of any statute,  regulation  or treaty of the
                    United States as to any  Collateral if compliance  with such
                    provision  is  a  condition  to  attachment,  perfection  or
                    priority  of, or ability of Lender to enforce,  the security
                    interest of Lender in such  Collateral,  (iv)  obtaining the
                    consents  and  approvals  of any  Governmental  Authority or
                    third party, including,  without limitation,  any consent of
                    any   licensor,   lessor  or  other   person   obligated  on
                    Collateral,  and taking all actions  required by any earlier
                    versions  of the UCC or by other law, as  applicable  in any
                    relevant jurisdiction.

          H. Section 6.1 of the Loan  Agreement  is hereby  amended by replacing
          the phrase "Revolving Loans" with the word "Loans" wherever it appears
          therein.

          I. Subsections 6.3(a) and (b) of the Loan Agreement are hereby amended
          and restated in their entirety to read as follows:

                    (a) Borrower shall  establish and maintain,  at its expense,
                    blocked  accounts or lockboxes and related blocked  accounts
                    (in either case, "Blocked Accounts"), as Lender may specify,
                    with  such  banks as are  acceptable  to Lender  into  which
                    Borrower  shall  promptly  deposit  and direct  its  account
                    debtors to directly  remit all payments on  Receivables  and
                    all  payments  constituting  proceeds of  Inventory or other
                    Collateral in the identical  form in which such payments are
                    made, whether by cash, check or other manner. Borrower shall
                    deliver,  or cause to be delivered  to Lender,  a Depository
                    Account  Control  Agreement  duly  authorized,  executed and
                    delivered by each bank where a Blocked Account is maintained
                    as  provided  in Section  5.2 hereof or at any time and from
                    time to time Lender may become bank's  customer with respect
                    to the Blocked Accounts and promptly upon Lender's  request,
                    Borrower  shall  execute  and  deliver  such  agreements  or
                    documents  as Lender may  require in  connection  therewith.
                    Borrower  agrees  that  all  payments  made to such  Blocked
                    Accounts or other funds  received  and  collected by Lender,
                    whether  in  respect  of the  Receivables,  as  proceeds  of
                    Inventory or other  Collateral or otherwise shall be treated
                    as  payments  to Lender in  respect of the  Obligations  and
                    therefore  shall  constitute  the  property of Lender to the
                    extent of the then outstanding Obligations.

                    (b) For  purposes  of  calculating  the  amount of the Loans
                    available  to  Borrower,   such  payments  will  be  applied
                    (conditional  upon final  collection) to the  Obligations on
                    the  Business  Day  of  receipt  by  Lender  of  immediately
                    available funds in the Lender Payment Account  provided such
                    payments and notice thereof are received in accordance  with
                    Lender's  usual and  customary  practices  as in effect from
                    time to time and within sufficient time to credit Borrower's
                    loan  account  on such  day,  and if not,  then on the  next
                    Business  Day. For the purposes of  calculating  interest on
                    the Obligations,  such payments or other funds received will
                    be  applied  (conditional  upon  final  collection)  to  the
                    Obligations  one (1)  Business  Day  following  the  date of
                    receipt  of  immediately  available  funds by  Lender in the
                    Lender Payment Account provided such payments or other funds
                    and notice thereof are received in accordance  with Lender's
                    usual and customary practices as in effect from time to time
                    and within sufficient time to credit Borrower's loan account
                    on such day, and if not, then on the next Business Day.

          J. Section 6.5 of the Loan  Agreement  is hereby  amended by replacing
          the phrase "Revolving Loans" with the word "Loans" wherever it appears
          therein.

          K. Section 6.6 of the Loan  Agreement  is hereby  amended by replacing
          the phrase "Revolving Loans" with the word "Loans" wherever it appears
          therein.

          L. Section 7.1 of the Loan  Agreement is hereby  amended to insert the
          phrase "and Equipment"  after the word  "Inventory" in clause (c)(iii)
          thereof.

          M. Section 7.4 of the Loan Agreement is hereby amended and restated in
          its entirety to read as follows:

                    7.4 Equipment and Real Property  Covenants.  With respect to
                    the Equipment and Real Property:  (a) upon Lender's request,
                    Borrower  shall,  at its  expense,  on or  after an Event of
                    Default,  deliver or cause to be delivered to Lender written
                    appraisals as to the  Equipment  and/or the Real Property in
                    form,  scope and methodology  acceptable to Lender and by an
                    appraiser acceptable to Lender, addressed to Lender and upon
                    which  Lender is expressly  permitted to rely;  (b) Borrower
                    shall keep the Equipment in good order, repair,  running and
                    marketable condition (ordinary wear and tear excepted);  (c)
                    Borrower  shall use the Equipment and Real Property with all
                    reasonable   care  and  caution  and  in   accordance   with
                    applicable standards of any insurance and in conformity with
                    all applicable  laws; (d) the Equipment is and shall be used
                    in  Borrower's  business  and  not  for  personal,   family,
                    household or farming use; (e) Borrower  shall not remove any
                    Equipment from the locations set forth or permitted  herein,
                    except in connection with the sale of obsolete  Equipment or
                    to the extent  necessary to have any  Equipment  repaired or
                    maintained  in  the  ordinary  course  of  the  business  of
                    Borrower or to move Equipment directly from one location set
                    forth or  permitted  herein to  another  such  location  and
                    except for the movement of motor vehicles used by or for the
                    benefit of Borrower in the ordinary course of business;  (f)
                    the Equipment is now and shall remain personal  property and
                    Borrower  shall not  permit  any of the  Equipment  to be or
                    become  a part  of or  affixed  to  real  property;  and (g)
                    Borrower assumes all  responsibility  and liability  arising
                    from the use of the Equipment and Real Property.

          N. Section 8.1 of the Loan Agreement is hereby amended and restated in
          its entirety to read as follows:

                    8.1 Corporate Existence. Power and Authority; Subsidiaries.

                    (a) Borrower is a  corporation  duly  organized  and in good
                    standing  under the laws its state of  incorporation  and is
                    duly qualified as a foreign corporation and in good standing
                    in all states and jurisdictions  where the nature and extent
                    of the business  transacted by it or the ownership of assets
                    makes such qualification necessary. The execution,  delivery
                    and  performance  of this  Agreement,  the  other  Financing
                    Agreements and the transactions  contemplated  hereunder and
                    thereunder are all within Borrower's  corporate powers, have
                    been duly authorized and are not in  contravention of law or
                    the  terms  of  Borrower's   certificate  of  incorporation,
                    by-laws,  or  other  organizational  documentation,  or  any
                    indenture,  agreement or  undertaking to which Borrower is a
                    party or by which  Borrower or its property  are bound.  The
                    performance  of  Borrower's  obligations  do not,  as of the
                    execution   hereof,   require  any   governmental   consent,
                    registration or approval,  do not contravene any contractual
                    or governmental  restriction binding upon Borrowers and will
                    not, except as contemplated herein, result in the imposition
                    of any lien,  charge,  security interest or encumbrance upon
                    any property of the Borrower  under any existing  indenture,
                    mortgage,  deed of trust,  loan or credit agreement or other
                    material  agreement or instrument to which the Borrower is a
                    party or by which it or any of its  property may be bound or
                    affected.  The  execution  and  delivery  by Borrower of the
                    Agreement and all other documents and  instruments  executed
                    and delivered in connection  herewith and the performance of
                    Borrower's  obligations  hereunder and thereunder are not in
                    contravention  of any law or laws.  This  Agreement  and the
                    other  Financing  Agreements  constitute  legal,  valid  and
                    binding  obligations  of Borrower  enforceable in accordance
                    with  their  respective  terms.  Borrower  does not have any
                    Subsidiaries   except  as  set  forth  on  the   Information
                    Certificate.   Except  as  disclosed   on  the   Information
                    Certificate,  Borrower has not used and has no current plans
                    to use,  any  corporate  or  fictitious  name other than the
                    corporate   name  shown  on  the   Borrower's   Articles  of
                    Incorporation.

                    (b)   Borrower   does  not  have  any  direct  or   indirect
                    Subsidiaries  or Affiliates  and is not engaged in any joint
                    venture or  partnership  except as set forth in Schedule 8.1
                    to the Information Certificate.

                    (c)  Borrower is the record and  beneficial  owner of all of
                    the issued and  outstanding  shares of Capital Stock of each
                    of  the   Subsidiaries   listed  on  Schedule   8.1  to  the
                    Information Certificate as being owned by Borrower and there
                    are no proxies,  irrevocable  or otherwise,  with respect to
                    such  shares  and  no  equity   securities  of  any  of  the
                    Subsidiaries  are or may  become  required  to be  issued by
                    reason of any options,  warrants,  rights to  subscribe  to,
                    calls or  commitments of any kind or nature and there are no
                    contracts,  commitments,  understandings  or arrangements by
                    which  any  Subsidiary  is or  may  become  bound  to  issue
                    additional   shares  of  it  Capital   Stock  or  securities
                    convertible into or exchangeable for such shares.

          O. Section 8.3 of the Loan Agreement is hereby amended and restated in
          its entirety to read as follows:

                    8.3 Name;  State of  Organization;  Chief Executive  Office;
                    Collateral Locations.

                    (a) The exact  legal name of Borrower is as set forth on the
                    signature  page of  this  Agreement  and in the  Information
                    Certificate.  Borrower has not,  during the past five years,
                    been known by or used any other corporate or fictitious name
                    or been a party to any merger or consolidation,  or acquired
                    all or  substantially  all of the assets of any  Person,  or
                    acquired  any of its  property or assets out of the ordinary
                    course of business,  except as set forth in the  Information
                    Certificate.

                    (b) Borrower is an organization of the type and organized in
                    the jurisdiction  set forth in the Information  Certificate.
                    The  Information   Certificate  accurately  sets  forth  the
                    organizational   identification   number  of   Borrower   or
                    accurately states that Borrower has none and accurately sets
                    forth  the  federal   employer   identification   number  of
                    Borrower.

                    (c) The  chief  executive  office  and  mailing  address  of
                    Borrower  and  Borrower's  Records  concerning  Accounts are
                    located  only at the  address  set forth  below and its only
                    other  places of business  and the only other  locations  of
                    Collateral,  if any,  are the  addresses  set  forth  in the
                    Information Certificate, subject to the right of Borrower to
                    establish  new  locations  in  accordance  with  Section 9.2
                    below. The Information  Certificate correctly identifies any
                    of such  locations  which are not owned by Borrower and sets
                    forth the owners and/or  operators  thereof and, to the best
                    of  Borrower's  knowledge,  the holders of any  mortgages on
                    such locations.

          P.  The  following  new  Section  8.14 is  hereby  added  to the  Loan
          Agreement in proper numerical order:

                    8.14 Bank Accounts. All of the deposit accounts,  investment
                    accounts  or  other  accounts  in the  name  of or  used  by
                    Borrower   maintained   at  any  bank  or  other   financial
                    institution   are  set  forth  in   Schedule   8.14  to  the
                    Information Certificate, subject to the right of Borrower to
                    establish  new  accounts  in  accordance  with  Section  5.2
                    hereof.

          Q. Section 9.4 of the Loan  Agreement  is hereby  amended by replacing
          the phrase "Revolving Loans" with the word "Loans" wherever it appears
          therein.

          R. Section 9.6 of the Loan  Agreement is hereby  amended by adding the
          following new subsection (e) at the end thereof:

                    (e) Borrower shall,  within sixty (60) days after the end of
                    each of its first three  Fiscal  Quarters and within 90 days
                    after its last Fiscal Quarter of each year, furnish or cause
                    to be furnished to Lender a  compliance  certificate  in the
                    form of  Exhibit B hereto,  along  with a  schedule  in form
                    reasonably  satisfactory to Lender of the calculations  used
                    in determining,  as of the end of the immediately  preceding
                    Fiscal Quarter,  whether Borrower was in compliance with the
                    covenants  set  forth  in  Sections  9.21  and  9.22 of this
                    Agreement for such Fiscal Quarter.

          S. Subsections 9.8(f) and (g) of the Loan Agreement are hereby amended
          and restated in their entirety, and new subsections 9.8(i) and (j) are
          added, to read as follows:

                    (f)  subordinate  liens on the Real Property and fixtures at
                    Borrower's Peoria, Illinois facility that are granted to the
                    County of Peoria,  Illinois to secure a $10,000,000  loan to
                    the  Borrower,  provided  that such  secured  party shall be
                    subject to a  subordination  agreement in form and substance
                    acceptable to Lender in its sole discretion; (g) subordinate
                    liens on the  Borrower's  property  that are  granted to the
                    holders  of the 8%  Subordinated  Secured  Notes  due  2009,
                    provided such Notes shall be  subordinate  to the Loans,  in
                    form  and  substance   acceptable  to  Lender  in  its  sole
                    discretion;

                    (i) the  pledge  of  stock of EWP to EWP  Financial,  LLC to
                    secure a $6,000,000  revolving  credit  facility to Keystone
                    (the "EWP  Financial  Loan");  and (j) purchase  money liens
                    (including  capital  leases) on  equipment of Borrower in an
                    amount not to exceed $375,000; and (k) liens permitted under
                    other Financing Agreements.

          T. Section 9.9 is amended to insert the  following  subsection  (g) at
          the end thereof:

                    and (g) the  Subordinated  Indebtedness,  EWP Financial Loan
                    and the Vendor Settlements, in each case as in effect on the
                    date hereof.

          U.  Section  9.11 is amended  and  restated  in its  entirety  to read
          "Intentionally Deleted."

          V.  The  following  new  Section  9.21 is  hereby  added  to the  Loan
          Agreement in proper numerical order:

                    9.21 Minimum Fixed Charge Coverage  Ratio.  Borrower and its
                    Subsidiaries  shall have on a consolidated  basis at the end
                    of each  Fiscal  Quarter  set forth  below,  a Fixed  Charge
                    Coverage  Ratio for the  12-month  period  then ended of not
                    less than the following:

    For the Fiscal Quarter ending                   Minimum Fixed Charge Ratio

         June 30, 2002                                             0.5 to 1.00
         September 30, 2002                                        0.5 to 1.00
         December 31, 2002                                         0.56 to 1.00
         March 31, 2003                                            0.62 to 1.00
         June 30, 2003                                             0.68 to 1.00
         September 30, 2003                                        0.74 to 1.00
         December 31, 2003                                         0.80 to 1.00
         March 31, 2004                                            0.86 to 1.00
         June 30, 2004                                             0.92 to 1.00
         September 30, 2004                                        0.98 to 1.00
         December 31, 2004 and for each Fiscal Quarter
         end thereafter                                            1.01 to 1.00

          W.  The  following  new  Section  9.22 is  hereby  added  to the  Loan
          Agreement in proper numerical order:

                           9.22 Minimum EBITDA. Borrower and its Subsidiaries on
                           a consolidated basis shall have, at the end of each
                           Fiscal Quarter set forth below, EBITDA for the
                           12-month period then ended of not less than the
                           following:

                           Period                                     EBITDA

                           June 30, 2002                            $7,500,000
                           September 30, 2002                       $6,000,000
                           December 31, 2002                        $5,000,000
                           March 31, 2003                           $5,250,000
                           June 30, 2003                            $5,500,000
                           September 30, 2003                       $5,750,000
                           December 31, 2003                        $6,000,000
                           March 31, 2004                           $6,250,000
                           June 30, 2004                            $6,500,000
                           September 30, 2004                       $6,750,000
                           December 31, 2004                        $7,000,000

          X.  The  following  new  Section  9.23 is  hereby  added  to the  Loan
          Agreement in proper numerical order:

                    9.23 Restricted Payments.  The Borrower shall not, and shall
                    not suffer or permit any of its Subsidiaries to, (i) declare
                    or make  any  dividend  payment  or  other  distribution  of
                    assets, properties,  cash, rights, obligations or securities
                    on account of any shares of any class of its Capital  Stock,
                    (ii)  purchase,  redeem or  otherwise  acquire for value any
                    shares  of its  Capital  Stock or any  warrants,  rights  or
                    options to acquire such shares,  interests or securities now
                    or  hereafter  outstanding  or  (iii)  make any  payment  or
                    prepayment  of  principal  of,  premium,  if any,  interest,
                    redemption,  exchange,  purchase,  retirement,   defeasance,
                    sinking fund or similar  payment with respect to, the Senior
                    Notes or the Subordinated Indebtedness; provided that:

                    (a) the  Borrower  may  make  regularly  scheduled  interest
                    payments   on  the   Senior   Notes  and  the   Subordinated
                    Indebtedness  provided  that no Event of Default or an event
                    which  with   notice  or  passage  of  time  or  both  would
                    constitute  an Event of Default is occurring or would result
                    from such payment;

                    (b)  Borrower  may declare and make  dividend  payments  and
                    other distributions payable solely in its common stock;

                    (c)  Borrower may make  dividends  in respect of  Borrower's
                    Series A 10% Cumulative  Convertible  Pay-In-Kind  Preferred
                    Stock  provided  that (x) no Event  of  Default  or an event
                    which  with   notice  or  passage  of  time  or  both  would
                    constitute  an Event of Default is occurring or would result
                    from such  payment and (y) after  giving  effect to (A) such
                    payment,   (B)  the   Revolving   Loan  Limit  and  (C)  the
                    availability  of Borrower  to obtain a Revolving  Loan after
                    giving  effect to the lending  formulas set forth in Section
                    2.1(a)  hereof,   Borrower  would  be  permitted  to  borrow
                    Revolving Loans in an amount not less than $1,250,000;

                    (d) the Borrower may redeem the Senior Notes in an aggregate
                    amount not to exceed $6,150,000.

          Y.  The  following  new  Section  9.24 is  hereby  added  to the  Loan
          Agreement in proper numerical order:

                    9.24 Vendor Settlements. Borrower shall not, and shall cause
                    its  Subsidiaries  not to, make any payment under the Vendor
                    Settlements unless (i) no Event of Default or an event which
                    with notice or passage of time or both would  constitute  an
                    Event of  Default is  occurring  or would  result  from such
                    payment and (ii) after  giving  effect to (a) such  payment,
                    (b) the  Revolving  Loan Limit and (c) the  availability  of
                    Borrower to obtain a Revolving  Loan after giving  effect to
                    the lending  formulas  set forth in Section  2.1(a)  hereof,
                    Borrower would be permitted to borrow  Revolving Loans in an
                    amount not less than $1,250,000.

          Z. Section 10.1 is hereby amended to add the following new subsections
          10.1(q) and (r) at the end thereof:

                    (q) there  shall  occur an "Asset  Sale" as  defined  in the
                    Certificate of  Designations,  Rights and Preferences of the
                    Series A Cumulative Convertible Pay-in-Kind Preferred Stock;
                    and

                    (r) the Pension Benefit Guaranty  Corporation  shall place a
                    lien on any  assets of the  Borrower,  or any of  Borrower's
                    Subsidiaries, or on any assets of Garden Zone.

          AA. Section 10.2.

                    1. The following new subsections  10.2(e) and (f) are hereby
                    added at the end of Section 10.2:

                    (e)  Lender  may,  at any  time or  times  that an  Event of
                    Default  exists or has occurred and is  continuing,  enforce
                    Borrower's  rights  against  any account  debtor,  secondary
                    obligor or other  obligor in respect of any of the  Accounts
                    or other Receivables. Without limiting the generality of the
                    foregoing,  Lender  may at such time or times (i) notify any
                    or all account debtors, secondary obligors or other obligors
                    in respect thereof that the  Receivables  have been assigned
                    to Lender and that  Lender has a security  interest  therein
                    and Lender may direct any or all accounts debtors, secondary
                    obligors and other  obligors to make payment of  Receivables
                    directly  to Lender,  (ii)  extend  the time of payment  of,
                    compromise,  settle or adjust  for cash,  credit,  return of
                    merchandise or otherwise,  and upon any terms or conditions,
                    any and all Receivables or other obligations included in the
                    Collateral  and  thereby  discharge  or release  the account
                    debtor  or any  secondary  obligors  or  other  obligors  in
                    respect  thereof without  affecting any of the  Obligations,
                    (iii) demand,  collect or enforce payment of any Receivables
                    or such other  obligations,  but  without any duty to do so,
                    and Lender shall not be liable for its failure to collect or
                    enforce the payment  thereof nor for the  negligence  of its
                    agents  or  attorneys  with  respect  thereto  and (iv) take
                    whatever other action Lender may deem necessary or desirable
                    for the  protection  of its  interests.  At any time that an
                    Event of Default  exists or has occurred and is  continuing,
                    at Lender's request, all invoices and statements sent to any
                    account  debtor shall state that the Accounts and such other
                    obligations  have been  assigned  to Lender and are  payable
                    directly  and only to Lender and Borrower  shall  deliver to
                    Lender such  originals of documents  evidencing the sale and
                    delivery of goods or the performance of services giving rise
                    to any  Accounts  as Lender  may  require.  In the event any
                    account  debtor  returns  Inventory when an Event of Default
                    exists or has occurred and is  continuing,  Borrower  shall,
                    upon Lender's request,  hold the returned Inventory in trust
                    for Lender, segregate all returned Inventory from all of its
                    other  property,  dispose of the returned  Inventory  solely
                    according  to  Lender's  instructions,  and  not  issue  any
                    credits,   discounts  or  allowances  with  respect  thereto
                    without Lender's prior written consent.

                    (f) For the  purpose  of  enabling  Lender to  exercise  the
                    rights and remedies  hereunder,  Borrower  hereby  grants to
                    Lender,   to  the   extent   assignable,   an   irrevocable,
                    non-exclusive   license   (exercisable  without  payment  of
                    royalty or other  compensation to Borrower) to use,  assign,
                    license or sublicense any of the trademarks,  service-marks,
                    trade names,  business names, trade styles,  designs,  logos
                    and  other   source  of  business   identifiers   and  other
                    Intellectual  Property and general  intangibles now owned or
                    hereafter  acquired by  Borrower,  wherever  the same may be
                    located,  including in such license reasonable access to all
                    media in which any of the licensed  items may be recorded or
                    stored and to all computer programs used for the compilation
                    or printout thereof.

          BB. Section 12.1.

                    1. Section  12.1(a) of the Loan  Agreement is hereby amended
                    and restated in its entirety to read as follows:

                    This  Agreement  and the other  Financing  Agreements  shall
                    continue  in full force and effect for a term  ending on the
                    date March 31, 2005 (the "Renewal  Date").  Upon the Renewal
                    Date or earlier  termination  of the  Financing  Agreements,
                    Borrower shall pay to Lender,  in full, all  outstanding and
                    unpaid  Obligations  and shall  furnish cash  collateral  to
                    Lender in such amounts as Lender  determines  are reasonably
                    necessary  to  secure  Lender  from  loss,  cost,  damage or
                    expense,  including  attorneys' fees and legal expenses,  in
                    connection with any contingent Obligations, including issued
                    and outstanding  Letter of Credit  Accommodations and checks
                    or other payments  provisionally credited to the Obligations
                    and/or as to which  Lender  has not yet  received  final and
                    indefeasible payment. Such cash collateral shall be remitted
                    by wire  transfer in Federal  funds to such bank  account of
                    Lender,  as Lender  may,  in its  discretion,  designate  in
                    writing to Borrower for such purpose.  Interest shall be due
                    until and including the next business day, if the amounts so
                    paid by Borrower to the bank  account  designated  by Lender
                    are  received  in such bank  account  later than 12:00 noon,
                    Chicago time.

                    2. Section  12.1(c) of the Loan  Agreement is hereby amended
                    and restated in its entirety to read as follows:

                    If for any reason this Agreement is terminated  prior to the
                    end of the  then  current  term  or  renewal  term  of  this
                    Agreement,   in  view  of  the  impracticality  and  extreme
                    difficulty  of  ascertaining  actual  damages  and by mutual
                    agreement of the parties as to a reasonable  calculation  of
                    Lender's lost profits as a result  thereof,  Borrower agrees
                    to  pay  to  Lender,   upon  the  effective   date  of  such
                    termination,  an early  termination fee equal to one percent
                    (1%)  of  the  Maximum   Credit;   provided   that  if  such
                    termination  occurs after the second  anniversary  following
                    the Amendment No. 12 Effective  Date,  such  termination fee
                    shall be reduced to one-half  of one  percent  (1/2%) of the
                    Maximum Credit. Such early termination fee shall be presumed
                    to be the amount of damages  sustained by Lender as a result
                    of such early  termination  and  Borrower  agrees that it is
                    reasonable under the circumstances  currently  existing.  In
                    addition, Lender shall be entitled to such early termination
                    fee upon the occurrence of any Event of Default described in
                    Sections 10.1(g) and 10.1(h) hereof, even if Lender does not
                    exercise its right to terminate this Agreement,  but elects,
                    at its option,  to provide  financing  to Borrower or permit
                    the  use  of  cash   collateral   under  the  United  States
                    Bankruptcy  Code. The early  termination fee provided for in
                    this   Section   12.1  shall  be  deemed   included  in  the
                    Obligations.

          CC. A new Exhibit B is hereby added to the Loan  Agreement in the form
          of Exhibit A attached hereto.

                    II. Renewal Fee. The Borrower shall pay to Lender a $500,000
                    renewal fee ("Renewal  Fee"),  which is due on the Amendment
                    No. 12 Effective Date and payable in three (3)  installments
                    of  $166,667 on each of April 8, 2002 and March 15, 2003 and
                    $166,666 on March 15, 2004;  provided  that at such time (if
                    at all) that the  Revolving  Loan Limit is to be  increased,
                    the entire unpaid Renewal Fee shall be  immediately  payable
                    to Lender.

                    III. Conditions to Effectiveness of Twelfth Amendment.  This
                    Twelfth  Amendment  shall become  effective on the date when
                    Borrower shall satisfy all of the following conditions:

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

                              B. The  County of Peoria,  Illinois  Subordination
                              and  Intercreditor  Agreement.  Lender  shall have
                              received  a duly  executed  copy of  that  certain
                              Subordination and Intercreditor  Agreement,  dated
                              as of  March  15,  2002,  by and  among  Borrower,
                              Lender and The County of Peoria, Illinois.

                              C. Legal  Opinion.  Lender  shall have  received a
                              legal   opinion   of   Mark   Hollingsworth,   the
                              Borrower's  in-house counsel,  addressed to Lender
                              and in form and substance satisfactory to Lender.

                              D. Renewal  Fee.  The Borrower  shall have paid to
                              the Lender  $166,667 which  constitutes  the first
                              installment of the $500,000 renewal fee.

                              E.  Subordinated  Indebtedness.  Lender shall have
                              received    satisfactory    evidence    that   the
                              documentation    evidencing    the    Subordinated
                              Indebtedness has been fully executed and delivered
                              and the Subordinated Indebtedness has been issued,
                              including,  without limitation,  evidence that the
                              Borrower has received  $10,000,000 from the County
                              of Peoria,  Illinois and that the 8% Notes and the
                              6% Notes have been issued.

                              F. Vendor Settlements.  Lender shall have received
                              satisfactory   evidence  that  the   documentation
                              evidencing  the  Vendor   Settlements   have  been
                              executed and delivered to Borrower.

                              G. Additional Matters.  Lender shall have received
                              such other certificates,  opinions,  UCC financing
                              statements,  documents and instruments relating to
                              the obligations or the  transactions  contemplated
                              hereby 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 shall be  reasonably  satisfactory  in form
                              and substance to Lender.

                    IV.  Representations  and  Warranties.  In order  to  induce
                    Lender  to  enter  into  this  Twelfth  Amendment,  Borrower
                    represents and warrants to Lender, upon the effectiveness of
                    this Twelfth Amendment, which representations and warranties
                    shall  survive the  execution  and  delivery of this Twelfth
                    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
                              Twelfth  Amendment  by  Borrower  are  within  its
                              corporate  powers and have been duly authorized by
                              all necessary corporate action; and

                              C. this  Twelfth  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.

                    V.  Information  Certificate.   Borrower  shall  deliver  to
                    Lender,  within thirty (30) days  following the date hereof,
                    an  Information   Certificate   and  updates  of  applicable
                    Schedules. Such Information Certificate shall be in form and
                    substance  satisfactory  to Lender  in its sole  discretion.
                    Failure to satisfy this  Article IV hereof shall  constitute
                    an immediate Event of Default under the Loan Agreement.

                    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  Twelfth  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 Twelfth  Amendment,  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 Twelfth 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  Twelfth   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 "Released
                              Party")  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
                              has or  hereafter  can,  shall or may have against
                              any Released  Party for,  upon or by reason of any
                              matter,   cause  or  thing   whatsoever  from  the
                              beginning of the world to the date of this Twelfth
                              Amendment.

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

                              E. Severability.  Any provision  contained in this
                              Twelfth  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 Twelfth Amendment in
                              that jurisdiction or the operation, enforceability
                              or  validity  of  that   provision  in  any  other
                              jurisdiction.

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

                  [remainder of page intentionally left blank]

<PAGE>

          [Signature Page to Twelfth Amendment To Amended And Restated

                     Revolving Loan And Security Agreement]

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

                              CONGRESS FINANCIAL CORPORATION (CENTRAL)

                              By:
                              -------------------------------------------------
                              Name:
                              -------------------------------------------------
                              Title:
                              -------------------------------------------------

                              KEYSTONE CONSOLIDATED INDUSTRIES, INC.

                              By:
                              -------------------------------------------------
                              Name:
                              -------------------------------------------------
                              Title:
                              -------------------------------------------------

<PAGE>

                                     CONSENT

          By Guarantee dated September 27, 1996 (as amended,  the  "Guarantee"),
the undersigned  (the  "Guarantor")  guaranteed to Lender (as defined  therein),
subject to the terms,  conditions and obligations set forth therein,  the prompt
payment  and  performance  of all  of the  Guaranteed  Obligations  (as  defined
therein).  The  Guarantor  consents to  Borrower's  execution  of the  foregoing
Twelfth  Amendment to Loan Agreement  (the  "Amendment;"  capitalized  terms not
otherwise  defined  herein  shall  have  the  meaning  ascribed  to  them in the
Amendment)  and  acknowledges  the  continued   validity,   enforceability   and
effectiveness  of  the  Guarantee  with  respect  to  all  loans,  advances  and
extensions of credit to Borrower, whether heretofore or hereafter made, together
with all interests thereon and all expenses in connection therewith.

                              SHERMAN WIRE COMPANY

                              By:
                              -------------------------------------------------
                              Name:
                              -------------------------------------------------
                              Title:
                              -------------------------------------------------

<PAGE>

                                     CONSENT

          By Confirmation  Agreement dated September 27, 1996,  relating to that
Amendment,  Ratification and  Confirmation of Secured  Guaranty  Agreement dated
December  29,  1995,  relating  to,  among  other  things the  Secured  Guaranty
Agreement  dated  October  16,  1987   (collectively,   the  "Guarantee"),   the
undersigned (the "Guarantor") guaranteed to Lender (as defined therein), subject
to the terms,  conditions and obligations set forth therein,  the prompt payment
and performance of all of the Obligations  (as defined  therein).  The Guarantor
consents to  Borrower's  execution of the  foregoing  Twelfth  Amendment to Loan
Agreement (the "Amendment;" capitalized terms not otherwise defined herein shall
have  the  meaning  ascribed  to them in the  Amendment)  and  acknowledges  the
continued  validity,  enforceability  and  effectiveness  of the Guarantee  with
respect to all loans,  advances and  extensions  of credit to Borrower,  whether
heretofore  or  hereafter  made,  together  with all  interests  thereon and all
expenses in connection therewith.

                                 SHERMAN WIRE OF CALDWELL, INC.

                                 By:
                                 ----------------------------------------------
                                 Name:
                                 ----------------------------------------------
                                 Title:
                                 ----------------------------------------------

<PAGE>

                                     CONSENT

          By Confirmation  Agreement dated September 27, 1996,  relating to that
Guarantee  and  Waiver  and Rider No. 1 to  Guarantee  and  Waiver,  each  dated
December 30, 1993 (as amended,  collectively,  the "Guarantee"), the undersigned
(the  "Guarantor")  guaranteed  to Lender (as defined  therein),  subject to the
terms,  conditions and  obligations  set forth  therein,  the prompt payment and
performance  of all of the  Obligations  (as  defined  therein).  The  Guarantor
consents to  Borrower's  execution of the  foregoing  Twelfth  Amendment to Loan
Agreement (the "Amendment;" capitalized terms not otherwise defined herein shall
have  the  meaning  ascribed  to them in the  Amendment)  and  acknowledges  the
continued  validity,  enforceability  and  effectiveness  of the Guarantee  with
respect to all loans,  advances and  extensions  of credit to Borrower,  whether
heretofore  or  hereafter  made,  together  with all  interests  thereon and all
expenses in  connection  therewith.  FV Steel & Wire  Company  acknowledges  and
agrees that (i) all references in the Finance Agreements to the name "Fox Valley
Steel & Wire Company" or to "Fox Valley Steel and Wire Company"  shall be deemed
to be references to "FV Steel & Wire Company"  (including,  without  limitation,
all  signature  blocks  executed  by "Fox Valley  Steel & Wire  Company" or "Fox
Valley Steel and Wire Company"),  (ii)  notwithstanding the fact that FV Steel &
Wire  Company has  executed  all Finance  Agreements  as Fox Valley Steel & Wire
Company or Fox Valley Steel and Wire  Company  after such entity has changed its
name, any such executed Finance Agreement shall be valid and binding on FV Steel
& Wire Company and (iii) FV Steel & Wire Company, as of the date of execution by
Fox Valley  Steel & Wire  Company or Fox  Valley  Steel and Wire  Company of any
Finance Agreements, is bound by the terms of any such Finance Agreements.

                             FV STEEL & WIRE COMPANY

                             By:
                             --------------------------------------------------
                             Name:
                             --------------------------------------------------
                             Title:
                             --------------------------------------------------

<PAGE>

                                    EXHIBIT A

                         FORM OF COMPLIANCE CERTIFICATE

                     KEYSTONE CONSOLIDATED INDUSTRIES, INC.

                            Date: ____________, 200__

          This certificate is given by Keystone Consolidated Industries, Inc., a
Delaware corporation ("Borrower"), pursuant to subsection 9.6(e) of that certain
Amended and Restated  Revolving  Loan  Agreement  dated as of December 29, 1995,
between  Borrower  and Congress  Financial  Corporation  (Central),  an Illinois
corporation  ("Lender"),  as such  agreement  may have been  amended,  restated,
supplemented  or  otherwise  modified  from  time to  time,  including,  without
limitation, all refinancings and refundings (the "Loan Agreement").  Capitalized
terms used herein  without  definition  shall have the meanings set forth in the
Loan Agreement.

          The officer  executing this  certificate is duly authorized to execute
and  deliver  this  certificate  on  behalf  of  Borrower.   By  executing  this
certificate  such  officer  hereby  certifies  to Lender that Exhibit A attached
hereto is a correct  calculation of each of the financial covenants contained in
Sections 9.21 and 9.22 of the Loan Agreement.

          IN  WITNESS  WHEREOF,  Borrower  has  caused  this  Certificate  to be
executed by one of its officers this _____ day of _______________, _____.

                                  KEYSTONE CONSOLIDATED INDUSTRIES, INC.

                                  By ___________________________________
                                  Its ____________________________________

<PAGE>

                           EXHIBIT A TO EXHIBIT 4.2(b)

                             COMPLIANCE CERTIFICATE

                       Covenant 6.3 Fixed Charge Coverage

                                    EXHIBIT A
                                       TO
                             COMPLIANCE CERTIFICATE

                    Covenant 9.21 FIXED CHARGE COVERAGE RATIO

Fixed Charge Coverage is defined as follows1:

EBITDA                                                            $____________
Fixed Charges:

Interest  Expense paid or accrued (except with respect to
the deferred  interest  expense of the 6% Notes and the 8% Notes) $____________

Plus:  Scheduled principal payments of Indebtedness during such
       period                                                     $___________
       Corporate income taxes paid in cash during such period     $___________
       Capital Expenditures during such period                    $___________

Fixed Charges                                                     $___________

Fixed Charge Coverage (EBITDA divided by Fixed Charges)           ____________

Required Fixed Charge Coverage                                    ____________

In Compliance                                                        Yes/No

<PAGE>

                           EXHIBIT A TO EXHIBIT 4.2(b)

                             COMPLIANCE CERTIFICATE

                           Covenant 6.2 Leverage Ratio

                                    EXHIBIT A
                                       TO
                             COMPLIANCE CERTIFICATE

                          Covenant 9.22 MINIMUM EBITDA

EBITDA is defined as follows:

Net income (or loss) for the applicable  period of measurement of
Borrower and its Subsidiaries on a consolidated  basis determined
in accordance  with GAAP, but excluding:  (i) income tax credits,
(ii) interest  income,  (iii) gain from  extraordinary  items for
such period,  (iv) any  aggregate net gain (but not any aggregate
net loss) during such period  arising from the sale,  exchange or
other disposition of capital assets by such Person (including any
fixed assets, whether tangible or intangible,  all Inventory sold
in  conjunction  with the  disposition  of fixed  assets  and all
securities), (v) any other non-cash gains that have been added in
determining  consolidated  net income and (vi)  non-cash  defined
benefit  pension  income,  in each case to the extent included in
the  calculation  of  consolidated  net income of such Person for
such period in  accordance  with GAAP,  but  without  duplication  $___________

Plus:                                                              $____________
        Any provision for income taxes
        Interest Expense                                           $____________

        Loss from extraordinary items for such period              $____________

        Depreciation and amortization for such period              $____________

        Amortized debt discount for such period                    $____________

                    The amount of any  deduction to  consolidated
                    net  income as the result of any grant to any
                    members of the  management  of such Person of
                    any Capital Stock, in each case to the extent
                    included in the  calculation of  consolidated
                    net income of such  Person for such period in
                    accordance with GAAP, but without duplication  $____________

                    Non-cash defined benefit pension expense       $____________
                    without duplication, non-cash post-retirement
                    benefits constituting retired employees'medical$____________
                    and life insurance benefits
        EBITDA for the applicable period of measurement            $____________

        Applicable Minimum Amount                                  $____________

        In Compliance                                                  Yes/No

1 The Fixed Charge  Coverage  shall be calculated on a rolling twelve (12) month
basis.LOAN AGREEMENT

     THIS LOAN AGREEMENT (this  "Agreement") is made and entered into as of this
13th day of March, 2002 by and between KEYSTONE CONSOLIDATED INDUSTRIES, INC., a
Delaware  corporation (the "Company"),  and THE COUNTY OF PEORIA,  ILLINOIS (the
"Lender").

                                    Recitals:

     WHEREAS,  the  Company  has  requested  that the Lender  make a loan to the
Company in the amount of TEN MILLION DOLLARS ($10,000,000.00); and

     WHEREAS,  the  Lender is  willing  to make such loan to the  Company on the
terms and subject to the conditions hereinafter set forth.

     NOW, THEREFORE, the parties promise and agree as follows:

                                    ARTICLE I
                                   Definitions

     In addition to terms  defined  elsewhere in this  Agreement,  the following
definitions shall apply for purposes of this Agreement:

          "Bankruptcy  Law"  means  Title  11 of the  U.S.  Code or any  similar
     federal  or state law for the relief of  debtors  as now and  hereafter  in
     effect, or any successor statutes.

          "Business Day" means a day other than a Saturday, a Sunday or a day on
     which  banking  institutions  in Peoria,  Illinois are  authorized  by law,
     regulation or executive  order to remain  closed.  If a payment date called
     for herein or in the Note is not a Business Day, payment may be made on the
     next succeeding day that is a Business Day.

          "Contract"  means any contract,  agreement,  undertaking or commitment
     (written or oral,  formal or  informal,  firm or  contingent)  to which the
     Company or any of its Subsidiaries is a party or by which the Company,  any
     of its Subsidiaries, or any of their respective assets are bound, and which
     has current operative or executory effect.

          "Default"  means any event that is or with the  passage of time or the
     giving of notice or both would be an Event of Default.

          "Exchange  Offer" means that certain Offer to Exchange Cash and Common
     Stock,  New Unsecured  Instruments or New Securities for Outstanding 9 5/8%
     Senior Secured Notes Due 2007 of Keystone Consolidated Industries, Inc.

          "GAAP" means generally accepted  accounting  principles set forth from
     time  to  time  in  the  opinions  and  pronouncements  of  the  Accounting
     Principles Board and the American Institute of Certified Public Accountants
     and statements and  pronouncements  of the Financial  Accounting  Standards
     Board (or  agencies  with  similar  functions  of  comparable  stature  and
     authority within the U.S. accounting  profession),  which are applicable to
     the circumstances as of the date of determination.

          "Governmental  Authority"  means  the  United  States,  any  state  or
     municipality, the government of any foreign country, any subdivision of any
     of the foregoing, or any authority, department,  commission, board, bureau,
     agency, court, or instrumentality of any of the foregoing.

          "Indebtedness"  means, with respect to any Person, any indebtedness of
     such Person,  whether or not  contingent,  in respect of borrowed  money or
     evidenced by bonds, notes,  debentures or similar instruments or letters of
     credit  (or  reimbursement  agreements  in  respect  thereof)  or  banker's
     acceptances,  or representing  obligations in respect of a lease that would
     at such time be required to be capitalized on a balance sheet in accordance
     with GAAP or the balance  deferred and unpaid of the purchase  price of any
     property (other than contingent or "earnout" payment  obligations),  except
     any such balance that  constitutes an accrued expense or trade payable,  if
     and to the extent any of the foregoing  indebtedness (other than letters of
     credit)  would  appear as a liability  upon a balance  sheet of such Person
     prepared in  accordance  with GAAP, as well as all  indebtedness  of others
     secured  by a Lien  on any  asset  of  such  Person  (whether  or not  such
     indebtedness  is assumed by such Person)  and, to the extent not  otherwise
     included, the guarantee,  whether or not conditional, by such Person of any
     indebtedness of any other Person.

          "Lien" means, with respect to any asset, any mortgage,  lien,  pledge,
     charge,  security  interest or  encumbrance  of any kind in respect of such
     asset,  whether  or  not  filed,  recorded  or  otherwise  perfected  under
     applicable  law (including any  conditional  sale or other title  retention
     agreement,  any lease in the nature thereof,  any option or other agreement
     to sell or give a security  interest in and any filing of or  agreement  to
     give  any  financing  statement  under  the  Uniform  Commercial  Code  (or
     equivalent statutes) of any jurisdiction).

          "Mortgage"   means  that  certain   Subordinate   Mortgage,   Security
     Agreement,  Assignment  of Rent  and  Fixture  Filing  to be  executed  and
     delivered by the Company to Lender  securing  the Loan with  certain  steel
     making  assets of the  Company's  located in Peoria  Township and Limestone
     Township, Illinois, and being a portion of property located at and commonly
     known as 7000 S.W. Adams Street,  Peoria,  Illinois,  as more  particularly
     described therein,  and granting Lender a second priority  subordinate lien
     on those assets subject only to the prior first lien of Congress  Financial
     Corporation (Central).

          "Person"  means  any  individual,   corporation,  general  or  limited
     partnership,   limited  liability  company,  joint  venture,   association,
     joint-stock company, trust, unincorporated organization,  government or any
     agency or political subdivision thereof or any other entity.

          "Restructuring"  shall  mean  the  restructuring  of  the  Company  as
     described in the Offering Circular dated February 11, 2002 for the Exchange
     Offer.

          "Security Agreement" means that certain Subordinate Security Agreement
     to be executed and  delivered  by Company to Lender  securing the Loan with
     certain steel making assets of Company's  located in Peoria,  Illinois,  as
     more particularly  described therein, and granting Lender a second priority
     subordinate  lien on those  assets  subject only to the prior first lien of
     Congress Financial Corporation (Central).

          "Subsidiary"  means any corporation,  general or limited  partnership,
     limited  liability  company,  association or other business entity of which
     securities  or other  ownership  interests  representing  more  than  fifty
     percent (50%) of the ordinary voting power are, at the time as of which any
     determination  is being made,  owned or controlled by the Company or one or
     more Subsidiaries of the Company.

          "SEC" means the Securities and Exchange Commission.

          "1933 Act" means the Securities Act of 1933, as amended.

          "1934 Act" means the Securities Exchange Act of 1934, as amended.

                                   ARTICLE II
                      Loan; Note; Closing and Closing Date

     2.1.  Loan;  Note.  Subject to the terms and  conditions  set forth in this
Agreement,  and relying upon the  representations  and warranties of the Company
herein  set  forth,  the  Lender  agrees,  to make a loan to the  Company in the
principal amount of Ten Million Dollars  ($10,000,000.00) (the "Loan"). The Loan
shall be evidenced by the Company's term note in the form of Exhibit "A" hereto,
payable to the order of the Lender and dated the Closing Date, for the principal
sum of the Loan (the "Note").  The Note and this  Agreement  shall be secured by
the Mortgage and the Security Agreement, which shall be executed,  delivered and
filed of  record  in the  appropriate  recording  offices  to  perfect  Lender's
interest.

     2.2.  Closing;  Closing  Date.  The  closing  of the Loan to be made by the
Lender hereunder (the "Closing") shall occur at 10:00 a.m. at the offices of the
Lender on or before  June 1, 2002,  or such other time and place as the  parties
may agree in writing (the "Closing  Date"),  upon  satisfaction of the terms and
conditions to the Lender's obligations as set forth in Section 4.1 hereof.

     2.3 Escrow of Loan  Proceeds.  Upon  execution  of this  Agreement , Lender
agrees  to place Ten  Million  and  No/100  Dollars  ($10,000,000.00)  in escrow
pursuant to the Escrow Agreement attached as Exhibit "B" hereto.

                                   ARTICLE III
                             Terms of Loan and Note

     3.1. Interest Rate; Payment; Usury.

          (a) Provided  that no Event of Default has occurred and is  continuing
     and subject to the other  provisions of this Agreement,  the Loan shall not
     bear  interest.  During  any  period  that an Event of  Default  shall have
     occurred  and be  continuing,  interest on the Loan shall  accrue at a rate
     equal to the rate published in the Wall Street Journal from time to time as
     the prime rate (the  "Default  Interest  Rate").  Notwithstanding  anything
     contained  herein to the  contrary,  in no event shall the interest rate on
     the Loan,  including  the Default  Interest  Rate,  exceed the highest rate
     permitted by applicable law.  Interest on the Loan at the Default  Interest
     Rate, shall be based on a 360-day year, and shall accrue and be payable for
     the actual number of calendar days  elapsed.  Interest  shall be payable in
     arrears commencing on the first day after the Maturity Date (as hereinafter
     defined) and continuing thereafter on the same day of each subsequent month
     until the Loan and all accrued interest have been paid in full.

          (b) It is the  intention  of the  Company  and the  Lender to  conform
     strictly  to  applicable  usury  laws now or  hereafter  in force,  and any
     interest  payable  under  this  Agreement  or the Note  shall be subject to
     reduction  to an amount not to exceed the maximum  non-usurious  amount for
     commercial  loans  allowed  under  such  applicable  usury  laws  as now or
     hereafter construed by the courts having jurisdiction over such matters.

     3.2. Maturity Date. Unless the same shall become due earlier as a result of
acceleration  of  the  maturity,  the  Loan  shall  mature  on  the  fifth  year
anniversary  of the  Closing  Date  (the  "Maturity  Date"),  at which  time the
outstanding  principal  balance  and all accrued  interest,  if any, of the Loan
shall become due and payable.

     3.3. Prepayments.  The Company may from time to time and at any time prepay
the Loan, in whole or in part, without penalty or premium. The Company shall not
be required to make any installment payments during the term of the Loan.

     3.4.  Manner of Payment.  The Company shall make payments in respect of the
Loan in immediately available funds at Lender's office or by wire transfer to an
account specified by Lender.

     3.5.  Events of Default.  Each of the  following  constitutes  an "Event of
Default":

          (a) default in payment when due of the principal on the Note;

          (b) failure by the Company for thirty (30) days after  notice from the
     Lender to comply with any of its covenants or agreements in this  Agreement
     or the Note  including,  but not limited to, the provisions of (g), (h) and
     (i) of this Section 3.5;

          (c) any of the  representations or warranties of the Company set forth
     in this Agreement or  incorporated  herein by reference or set forth in any
     statement or schedule  delivered  pursuant to this  Agreement was untrue or
     inaccurate  in any  material  respect as of the date of  execution  of this
     Agreement  or as of  the  Closing  Date  and  such  untruth  or  inaccuracy
     substantially impairs Lender's security interest;

          (d) the Company or any of its  Subsidiaries  pursuant to or within the
     meaning of Bankruptcy Law: (i) commences a voluntary case; (ii) consents to
     the entry of an order for relief against it in an involuntary  case;  (iii)
     consents  to  the   appointment  of  a  custodian  of  it  or  for  all  or
     substantially  all of its  property  or  assets;  or (iv)  makes a  general
     assignment for the benefit of its creditors;

          (e) a court of competent  jurisdiction enters an order or decree in an
     involuntary  case or proceeding  under any  Bankruptcy Law that: (i) is for
     relief  against the  Company or any of its  Subsidiaries;  (ii)  appoints a
     custodian  of  the  Company  or  any of  its  Subsidiaries  or  for  all or
     substantially   all  of  the   property  of  the  Company  or  any  of  its
     Subsidiaries;  or (iii) orders the liquidation of the Company or any of its
     Subsidiaries,  and in any such case, the order or decree  remains  unstayed
     and in effect for 60 consecutive days;

          (f) the Mortgage or Security Agreement shall cease to be in full force
     and effect,  or the Company (or any person by,  through or on behalf of the
     Company)  shall  contest  in any  manner the  validity,  binding  nature or
     enforceability of the Mortgage or Security Agreement;

          (g) if prior to April 30,  2002,  Lender  shall not have  received  an
     original policy of title  insurance from Lawyer's Title Insurance  Company,
     or other national title company (the "Title  Policy") in the full amount of
     the Loan naming  Lender as the  insured  party and the Company as the owner
     and holder of fee simple title to the Property (as defined in the Mortgage)
     and  insuring  the lien of the Mortgage as a second and prior lien upon the
     Property, subject to no material exceptions other than standard exceptions,
     and exceptions expressly permitted by the Mortgage.  The Title Policy shall
     include a location  endorsement  to the  extent  such can be issued for the
     Property;

          (h) if prior to April 30, 2002,  Lender shall not have received a copy
     of the most recent  existing  survey of the parent  tract for the  Property
     together  with an  engineer's  sketch  showing the location of the Property
     within the larger parent tract; and

          (i) if  prior  to  May  15,  2002,  Lender  shall  not  have  received
     sufficient  evidence  that the security  interest  granted  pursuant to the
     Security  Agreement  are  superior  and prior to the rights of all  Persons
     other  than  (x)  the  Lien  granted  to  Congress  Financial   Corporation
     (Central),   or  other   financial   institution   designated  by  Company,
     simultaneously  with the closing of this Loan,  and (y) such other Liens as
     are identified on Schedule 6(b) of the Security Agreement.

<PAGE>

     3.6. Acceleration.

          (a) Declaration of Acceleration. If any Event of Default occurs and is
     continuing,  the Lender may, at its option and upon notice to the  Company,
     declare  the  Note to be due and  payable  immediately;  and  upon any such
     declaration  all  principal  and  interest  on the Loan and the Note  shall
     become immediately due and payable; provided,  however, that in the case of
     an Event of Default  arising from any event described in clauses (d) or (e)
     of Section  3.5  hereof,  the Loan and the Note  shall  ipso  facto  become
     automatically  due and payable without further action or notice on the part
     of the Lender.

          (b) Rescission.  At any time after a declaration of acceleration  with
     respect to the Note,  the Lender may, in its sole  discretion,  rescind and
     cancel such  declaration and its  consequences.  No such  rescission  shall
     affect any  subsequent  Event of  Default or impair any right with  respect
     thereto.

     3.7. Other Remedies.  If an Event of Default occurs and is continuing,  the
Lender may pursue any available  remedy to collect the payment of principal (and
interest at the Default Interest Rate) on the Note or to enforce the performance
of any  provision  of the Note,  this  Agreement,  the  Mortgage or the Security
Agreement.  A delay or omission by the Lender in exercising  any right or remedy
accruing  upon an Event of  Default  shall  not  impair  the  right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.

     3.8.  Waiver Of Past  Defaults.  Lender may waive any  existing  Default or
Event of  Default  and its  consequences  under  this  Agreement.  Upon any such
waiver,  such Default or Event of Default shall cease to exist, and any Event of
Default  arising  therefrom shall be deemed to have been cured for every purpose
of this  Agreement;  but no such waiver shall extend to any  subsequent or other
Event of Default or impair any right consequent thereon.

     3.9. Priorities. If an Event of Default occurs and is continuing,  any sums
collected by the Lender  hereunder  or under the Note shall be applied  first to
all costs and expenses of collection, including reasonable attorneys' fees, then
to accrued  and unpaid  interest  (at the  Default  Interest  Rate to the extent
applicable) and then to principal due on the Note.

                                   ARTICLE IV
             Conditions to Lender's Obligations; Lender's Covenants

     4.1.  Conditions at Closing Date. The Lender's  obligation to make the Loan
on the Closing Date shall be subject to Lender's satisfaction that the following
conditions  have been  satisfied  on or before the Closing  Date,  except to the
extent waived in writing as provided in Section 4.2:

          (a) The  Company  shall  have  reimbursed  the Lender for the fees and
     expenses  for which the Company is liable  pursuant to the terms of Section
     7.6, below, to the extent documented to the Company as of the Closing;

          (b) All  conditions  to the closing and  consummation  of the Exchange
     Offer  shall have  occurred  or been  waived in  accordance  with the terms
     thereof;

          (c) Each of the  representations  and  warranties  of the  Company set
     forth in this Agreement or incorporated herein by reference or set forth in
     any statement or schedule delivered pursuant to this Agreement are true and
     correct  in all  material  respects  as of the  date of  execution  of this
     Agreement and as of the date of the Closing Date as if made on such date;

          (d) The  Company  shall not be in default  with  respect to any of its
     covenants and  agreements  set forth in Article VI of this Agreement or set
     forth elsewhere in this Agreement;

          (e) No  Default  or  Event  of  Default  shall  have  occurred  and be
     continuing;

          (f) The  Company  shall have  delivered  to the Lender a  certificate,
     executed by an officer of the Company acceptable to the Lender and dated as
     of the  Closing  Date,  certifying  to  the  Company's  fulfillment  of the
     conditions specified in subsections (a) through (e) of this Section 4.1;

          (g) The  Company  shall  provide  Lender  a second  priority  security
     interest  and lien on the real  property  and  fixtures  referred to in the
     Mortgage;

          (h) The  Company  shall  provide  Lender  a second  priority  security
     interest and lien on certain assets referred to in the Security  Agreement;
     and

          (i) All of the conditions precedent specified in Part III, Section 2.1
     of the DCCA Grants (as defined hereafter) have occurred.

     4.2.  Waiver;  Termination.  The  Lender  may waive in  writing  any of the
conditions  to its  obligations  set forth in  Sections  4.1  hereof in its sole
discretion.  If the conditions to the Lender's  obligations set forth in Section
4.1 hereof  shall not have been  satisfied or waived on or before April 1, 2002,
the parties may terminate the  obligations  and benefits under to this Agreement
without any  liability  on the part of the Lender or Company to each other or to
any other Person.

     4.3 Lender's Covenants.  If, and to the extent,  requested by the holder of
the first lien on the assets secured by the Mortgage and Security Agreement (the
"First Lienholder"),  the Lender hereby agrees to enter into a subordination and
inter-creditor  agreement  with  such  First  Lienholder  and  shall  reasonably
cooperate  with  the  First  Lienholder  in  the  negotiation,  preparation  and
execution of any such agreement.

                                    ARTICLE V
                         Representations and Warranties

     5.1.  Representations and Warranties of the Company. In order to induce the
Lender to enter into this Agreement,  the Company represents and warrants to the
Lender on the date  hereof and on and as of the date of the Loan,  as if made on
and as of such date,  which  representations  and warranties  shall survive such
date and be independent of any  investigation  or lack of  investigation  of the
Company made by or on behalf of the Lender, as follows:

          (a)  Organization and Standing.  The Company is duly  incorporated and
     validly  existing  under  the laws of the  State of  Delaware,  and has all
     requisite  corporate power and authority to own or lease its properties and
     assets and to conduct  its  business  as it has been and is  proposed to be
     conducted.  The Company is qualified to do business and in good standing in
     each  jurisdiction  in which the failure to so qualify  could be reasonably
     expected to have a material  adverse  effect  upon its assets,  properties,
     liabilities, financial condition, results of operations or business.

          (b) Capacity of the Company;  Consents;  Execution of Agreements.  The
     Company has the requisite power, authority, and capacity to enter into this
     Agreement, the Note, the Mortgage and the Security Agreement and to perform
     the transactions  and obligations to be performed by the Company  hereunder
     and thereunder.  Except as described on Schedule 5.1(b) hereto, no consent,
     authorization,  approval,  license, permit or order of, or filing with, any
     Person  or  Governmental  Authority  is  required  in  connection  with the
     execution  and  delivery of this  Agreement,  the Note,  the  Mortgage  and
     Security  Agreement or the  performance by the Company of the  transactions
     and obligations to be performed by it hereunder and  thereunder,  except as
     contemplated by said agreements.  The failure to obtain any of the consents
     described  on Schedule  5.1(b)  prior to the  Closing  Date will not have a
     material adverse effect upon the Company's assets, properties, liabilities,
     financial condition,  results of operations or business.  The execution and
     delivery  of this  Agreement,  the  Note,  the  Mortgage  and the  Security
     Agreement by the  Company,  and the  performance  of the  transactions  and
     obligations  contemplated hereby and thereby by the Company, have been duly
     authorized by all requisite action of the Company. This Agreement has been,
     and the  Note,  the  Mortgage  and the  Security  Agreement  will be,  duly
     executed  and  delivered  by a duly  authorized  officer of the Company and
     constitutes,  or when executed and delivered will  constitute,  a valid and
     legally  binding  agreement of the Company,  enforceable in accordance with
     its terms,  except as  enforcement  thereof  may be limited by  bankruptcy,
     insolvency,  reorganization,  moratorium or other similar laws,  both state
     and federal,  affecting the enforcement of creditors' rights or remedies in
     general  from time to time in effect and the  exercise  by courts of equity
     powers or their application of principles of public policy.

          (c) Valid Issuance.  The Note to be issued  hereunder,  when issued by
     the Company to the Lender pursuant to the terms of this Agreement,  will be
     duly authorized and validly issued.

          (d) Conflicts; Defaults. The execution and delivery of this Agreement,
     the Note, the Mortgage and the Security  Agreement by the Company,  and the
     performance by the Company of the transactions and obligations contemplated
     hereby and thereby to be performed,  will not: (i) violate,  conflict with,
     or  constitute  a  default  under  any of the  terms or  provisions  of its
     certificate of incorporation or bylaws,  or any provisions of, or result in
     the  acceleration  of  any  obligation  under,  any  Contract,  note,  debt
     instrument,  security agreement,  or other instrument to which the Company,
     or any Subsidiary is a party or by which the Company,  or any Subsidiary or
     any of their  respective  assets is bound;  (ii) result in the  creation or
     imposition  of any Liens or claims  upon the  assets of the  Company or any
     Subsidiary;  (iii)  constitute a violation of any law,  statute,  judgment,
     decree,  order, rule, or regulation of a Governmental  Authority applicable
     to the Company, or any Subsidiary; or (iv) constitute an event which, after
     notice or lapse of time or both, would result in any of the foregoing.  The
     Company is not presently in violation of any  provision of its  certificate
     of  incorporation  or bylaws.  Neither the Company  nor any  Subsidiary  is
     presently  in default  in any  material  respect  under any of the terms or
     provisions  of any of its  material  Contracts,  notes,  debt  instruments,
     security  agreements,  or other  instruments,  or any order,  judgment,  or
     decree  relating to it or its  business or by which it or any of its assets
     is bound, except with respect to the matters set forth on Schedule 5.1 (d).

          (e) Compliance with Laws. Except with respect to the matters set forth
     on Schedule 5.1(e),  neither the Company nor any Subsidiary is in violation
     of, nor do any of their respective  operations violate in any respect,  any
     statute, law, or regulation of any Governmental Authority applicable to the
     Company  or a  Subsidiary,  as the  case may be,  any of  their  respective
     assets, or the conduct of their respective businesses  ("Applicable Laws"),
     the violation of which  reasonably  could be anticipated to have a material
     adverse  effect upon the  Company's or a  Subsidiary's  respective  assets,
     properties,  liabilities,  financial  condition,  results of  operations or
     business,   and  no  material   expenditures   are  or,  based  on  present
     requirements,  will be required of the Company or its Subsidiaries in order
     for them to comply or remain in compliance with any Applicable Laws.

          (f)  Litigation.  Neither the Company nor any Subsidiary is a party to
     any material legal action,  suit, claim,  investigation or proceeding which
     is not adequately  described in a periodic report  heretofore  filed by the
     Company  with the SEC,  and,  to the best of the  Company's  knowledge  and
     belief  after due  inquiry,  there  exist no facts or  circumstances  which
     reasonably could be anticipated to result in any such action,  suit, claim,
     investigation, or proceeding.

          (g) Taxes.  The Company has  prepared  and duly and timely  filed with
     each  appropriate  Governmental  Authority,  all material  federal,  state,
     municipal,  local and foreign tax  returns,  information  returns and other
     reports required to be filed on or before the date of this Agreement or the
     making of any Loan and has paid all material  taxes  required to be paid by
     the Company  prior to the date of this  Agreement or the making of any Loan
     in respect of the periods covered by such returns and reports,  except such
     taxes as are being contested in good faith.

          (h) Environmental  Compliance.  Except as disclosed in the Mortgage or
     described in a periodic report under the 1934 Act filed by the Company with
     the SEC,  the  Company  and its  Subsidiaries  are in  compliance  with all
     applicable federal, state and local laws and requirements (including permit
     requirements)  relating to the  protection of health or the  environment in
     connection  with the  ownership,  operation and condition of its properties
     and  business,  except  where  failure to comply  would not have a material
     adverse  effect  on  the  business  or  operations  of the  Company  or any
     Subsidiary.

          (i) Securities Laws. No consent,  authorization,  approval, permit, or
     order of or filing with any Governmental Authority is required in order for
     the Company to execute and deliver this Agreement or to offer,  issue, sell
     or deliver the Note. Based in part on the representations of the Lender and
     under the  circumstances  contemplated  hereby and under  current  laws and
     regulations,  the offer,  issuance,  sale and  delivery  of the Note to the
     Lender  are  exempt  from  the   prospectus   delivery   and   registration
     requirements of the 1933 Act.

     Any  disclosure or  representation  made in any section or schedule of this
Agreement, the Mortgage or the Security Agreement shall be incorporated into any
other applicable section or schedule to the extent appropriate.

     5.2.  Representations  and Warranties of the Lender.  The Lender represents
and warrants to the Company that:

          (a)  Investment  Intent.  The Note to be issued to the Lender is being
     acquired  for its own  account  and not with the view to, or for  resale in
     connection  with, any  distribution or public  offering  thereof within the
     meaning of the 1933 Act. The Lender understands that such Note has not been
     registered  under the 1933 Act by reason of its  issuance in a  transaction
     exempt from the  registration and prospectus  delivery  requirements of the
     1933 Act pursuant to Section 4(2) thereof.  It further understands that the
     Note will bear the  following  legend and agrees that it will hold the Note
     subject thereto:

          THIS NOTE HAS NOT BEEN  REGISTERED  PURSUANT TO THE  SECURITIES ACT OF
          1933 OR ANY STATE  SECURITIES  LAW.  NEITHER THIS NOTE NOR ANY PORTION
          HEREOF OR INTEREST HEREIN MAY BE SOLD, ASSIGNED, TRANSFERRED,  PLEDGED
          OR OTHERWISE  DISPOSED OF UNLESS THE SAME IS REGISTERED UNDER SAID ACT
          AND ANY APPLICABLE  STATE  SECURITIES LAW, OR UNLESS AN EXEMPTION FROM
          SUCH REGISTRATION IS AVAILABLE AND THE COMPANY SHALL HAVE RECEIVED, AT
          THE  EXPENSE OF THE  LENDER,  EVIDENCE  OF SUCH  EXEMPTION  REASONABLY
          SATISFACTORY TO THE COMPANY (WHICH MAY INCLUDE, AMONG OTHER THINGS, AN
          OPINION OF COUNSEL SATISFACTORY TO THE COMPANY).

          (b) Capacity of the Lender; Execution of Agreement. The Lender has all
     requisite power, authority,  and capacity to enter into this Agreement, and
     to  perform  the  transactions  and  obligations  to  be  performed  by  it
     hereunder. This Agreement has been duly authorized,  executed and delivered
     by it and constitutes its valid and legally binding obligation, enforceable
     in accordance with its terms,  except as enforcement thereof may be limited
     by  bankruptcy,  insolvency,  reorganization,  moratorium  or other similar
     laws,  both state and federal,  affecting  the  enforcement  of  creditors'
     rights or remedies in general  from time to time in effect and the exercise
     by courts of equity  powers or their  application  of  principles of public
     policy.

                                   ARTICLE VI
                            Covenants and Agreements

     6.1. Affirmative Covenants. So long as any Indebtedness remains outstanding
under this  Agreement  and the Note,  the Company  covenants  and agrees that it
will:

          (a) Capital  Expenditures.  Invest an  aggregate  total of Ten Million
     Dollars  ($10,000,000)  over the  five  year  term of the  Loan in  Durable
     Movable  Equipment  for the  Company's  facilities  in Peoria,  Illinois in
     accordance with the provisions of Part III,  Section 2.2 of the DCCA Grants
     (as  defined  hereafter)  (the  "Capital  Expenditure   Requirement").   In
     complying with the Capital Expenditure  Requirement,  the Company shall use
     generally accepted sound business practices, arms length bargaining and the
     other principles set forth in Part IV, Section 4.8 of the DCCA Grants.

          (b) Reporting  Requirements.  In connection with the Grant  Agreements
     Numbered 02-120803,  02-120804,  02-120805 and 02-120806 between the Lender
     and the State of Illinois  Department  of Commerce  and  Community  Affairs
     ("DCCA"), which are attached hereto as Exhibit "C" (the "DCCA Grants"), the
     Company agrees to:

               1.   provide Lender all  information in Company's  possession and
                    control which is reasonably needed for Lender to comply with
                    the "Audit  Requirements"  found in Part II-A2,  Section 2.1
                    and Part V, Section 5.4 C of the DCCA Grants;
               2.   prepare for Lender's execution and submission the "Quarterly
                    Expense Reports"  required under Part II-A2,  Section 2.5(a)
                    of the DCCA Grants;
               3.   provide Lender all  information in Company's  possession and
                    control which is reasonably  needed for Lender to submit the
                    "Close-out  Package" required in Part II-A2,  Section 2.5(b)
                    and Part V, Section 5.4 B of the DCCA Grants;
               4.   (i)  keep  adequate  and  sufficient   written  records  and
                    documentation  of  all  purchases  applied  to  the  Capital
                    Expenditure   Requirement,   (ii)  retain  such  records  in
                    accordance with Part V, Section 5.4 A of the DCCA Grants for
                    a  minimum  of  three  (3)  years   after   this   Agreement
                    terminates,  and (iii)  provide  Lender and DCCA  reasonable
                    access to such  records in  accordance  with Part V, Section
                    5.4 A of the DCCA Grants; and
               5.   provide, upon request by Lender, any additional  information
                    in  Company's  possession  and control  which is  reasonably
                    requested by DCCA;

(all  such  items  are   hereinafter   referred   to  as  the  "DCCA   Reporting
Requirements").

          (c) Taxes. Pay and discharge all taxes and other governmental  charges
     before the same shall  become  overdue,  unless and to the extent only that
     such payment is being contested in good faith.

          (d) Insurance.  Maintain insurance coverage on its physical assets and
     against  other  business  risks in such  amounts  and of such  types as are
     customarily  carried by  companies  similar in size and nature,  and in the
     event of  acquisition  of  additional  property,  real or  personal,  or of
     incurrence  of  additional  risks of any nature,  increase  such  insurance
     coverage in such manner and to such extent as prudent business judgment and
     present practice would dictate.

          (e)  Examination of Books.  Permit the Lender,  through its authorized
     attorneys, accountants and representatives, to examine the Company's books,
     accounts,  records, ledgers and assets of every kind and description at all
     reasonable  times  upon  oral or  written  request  of the  Lender,  at the
     Company's  cost and expense  (provided  that so long as an Event of Default
     has not  occurred,  the Company  shall be obligated to pay for no more than
     one (1) such examination per year).

          (f)  Notification  of  Events of  Default,  Acceleration  or  Material
     Adverse Effect.  Promptly notify the Lender of any condition or event which
     constitutes,  or with the passage of time and/or the giving of notice would
     constitute, an Event of Default under this Agreement or of payment defaults
     aggregating  more than $5,000,000 on any  Indebtedness of the Company or of
     any  acceleration  of the  maturity  of  any  Indebtedness  of the  Company
     aggregating  more than  $5,000,000,  and promptly  inform the Lender of the
     existence or occurrence  of any  condition or event (other than  conditions
     having an effect on the  economy in  general)  which  could  reasonably  be
     anticipated to have a material adverse effect upon the Company's  financial
     condition.

          (g)  Maintenance  of Licenses.  Maintain in good standing all licenses
     required by any  Governmental  Authority  that may be necessary or required
     for the Company and its Subsidiaries to carry on its businesses,  where the
     failure to maintain such licenses  would have a material  adverse effect on
     the Company taken as a whole.

          (h) ERISA Compliance. Comply with all material requirements imposed by
     the Employee  Retirement Income Security Act of 1974 as presently in effect
     or hereafter promulgated, including but not limited to, the minimum funding
     requirements of any defined contribution employee benefit plan.

          (i)  Compliance  with Law.  Comply in all material  respects  with all
     applicable  laws,  rules,   regulations  and  orders  of  any  Governmental
     Authority,  such compliance to include,  without limitation,  paying before
     the same become delinquent all taxes, assessments, and governmental charges
     imposed upon it or upon its property,  except to the extent that compliance
     with  any of the  foregoing  is  then  being  contested  in good  faith  by
     appropriate legal proceedings and with respect to which adequate  financial
     reserves have been  established on the books and records of the Company and
     except where the failure to comply would not have a material adverse effect
     on the Company and its Subsidiaries, taken as a whole.

                                   ARTICLE VII
                                  Miscellaneous

     7.1.  Indemnification.  The Company  agrees to  indemnify,  defend and hold
harmless Lender, its officers,  agents or employees ("Lender  Indemnitees") from
any and all  claims and  actions,  including,  but not  limited  to,  reasonable
attorneys' fees,  costs and expenses,  arising out of or based upon, the acts or
omissions  of  the  Company,   its  officers,   employees,   agents  independent
contractors,  subcontractors,  volunteers or other associates ("Company Agents")
under this  Agreement and the  transactions  contemplated  hereunder,  expressly
excluding any claims or actions arising out of or based upon Lender Indemnitees'
gross  negligence  or willful  misconduct,  and arising out of or based upon any
termination  of the  DCCA  Grants  which  is the  direct  result  of the  Lender
Indemnitee's  actions or omissions.  The Company further agrees to indemnify and
hold the Lender  Indemnitees  harmless from and against any and all liabilities,
demands,  claims,  damages,  suits,  costs,  reasonable  fees and  expenses  for
injuries or death to persons and the loss,  damage to or destruction of property
due to the  negligence,  intentional  acts or  omissions  of the Company  Agents
arising  out of or  related to this  Agreement  or the  performances  hereunder,
expressly  excluding any such  liabilities,  demands,  claims,  damages,  suits,
costs,  reasonable  fees  and  expenses  arising  out of or  based  upon  Lender
Indemnitees'  gross negligence or willful misconduct and arising out of or based
upon any termination of the DCCA Grants which is the direct result of the Lender
Indemnitee's actions or omissions.

     7.2  Termination of DCCA Grants.  If DCCA terminates the DCCA Grants due to
Company's  failure  to comply  with the DCCA  Reporting  Requirements,  and such
termination is not the direct result of the Lender's actions or omissions,  then
Lender shall have the right,  after written  notice to Company and a ninety (90)
day  opportunity to cure, to accelerate the Note in accordance  with Section 3.6
of this Agreement, and declare the entire Note due and payable.

     7.3 Waiver and Amendments. No failure or delay on the part of the Lender in
the exercise of any power or right, and no course of dealing between the Company
and the Lender,  shall operate as a waiver of such power or right, nor shall any
single or  partial  exercise  of any power or right  preclude  other or  further
exercise thereof or the exercise of any other power or right.  Remedies provided
for  herein  are  cumulative  and not  exclusive  of any  remedies  which may be
available  to the  Lender  at law or in  equity.  No  notice to or demand on the
Company  required  hereunder  or under the Note shall in any event  entitle  the
Company  to  any  other  or  further  notice  or  demand  in  similar  or  other
circumstances  or constitute a waiver of the right of the Lender to any other or
further action and any  circumstances  without  notice or demand.  Except as may
otherwise be specifically provided in this Agreement, no amendment, modification
or waiver of, or consent with respect to, any provision of this Agreement or the
Note shall in any event be effective  with respect to the Lender unless the same
shall be in writing and signed and  delivered  by the Lender.  Any waiver of any
provision of this Agreement or the Note, and any consent to any departure by the
Company from the terms of any provision of this Agreement or the Note,  shall be
effective only in the specific  instance and for the specific  purpose for which
given.

     7.4. Notices.  All notices and other  communications  required or permitted
under this Agreement shall be in writing and, if mailed by prepaid registered or
certified mail, return receipt requested,  shall be deemed to have been received
on the earlier of the date shown on the receipt or three (3) Business Days after
the post-mark date thereof.  Except as otherwise  provided  herein,  notices may
also be given by recognized  overnight  courier services or delivered by hand or
facsimile  transmission.  In the event of delivery by overnight courier service,
such notice shall be deemed to have been received as of the regularly  scheduled
time for delivery  established by such courier service. In the event of delivery
by hand, such notice shall be deemed  effective when delivered.  In the event of
delivery by facsimile  transmission,  such notice shall be deemed effective upon
confirmation of transmission.  All notices and other  communications  under this
Agreement shall be given to the parties hereto at the following addresses:

        If to the Company:

                  Keystone Consolidated Industries, Inc.
                  Three Lincoln Centre
                  5430 LBJ Freeway, Suite 1740
                  Dallas, Texas  75240-2697
                  Attention:  President
                  Fax:  (972) 448-1408

        With a copy to:

                  J. Mark Hollingsworth, Esq.
                  General Counsel
                  Three Lincoln Centre
                  5430 LBJ Freeway, Suite 1700
                  Dallas, Texas  75240-2697
                  Fax:  (972) 450-4278

        If to the Lender:

                  County of Peoria, Illinois
                  324 Main Street
                  Peoria, Illinois  61602
                  Attention:  F. Patrick Urich, County Administrator
                  Fax:  (309) 672-6029

        With a copy to:

                  Schwartz, Cooper, Greenberger
                    & Krauss, Chtd.
                  180 N. LaSalle Street, Suite 2700
                  Chicago, Illinois  60601
                  Attention:  Martin W. Salzman
                  Fax:  (312) 782-8416

Any party hereto may change the address to which notices shall be directed under
this Section 7.4 by giving written notice of such change to the other parties.

     7.5. Restriction on Transfer. The Lender acknowledges that the Note has not
been  registered  under  the  1933  Act or the  securities  laws  of any  state.
Accordingly,  the Note may not be sold or otherwise  disposed of or transferred,
unless such sale,  disposition or transfer is registered  under the 1933 Act and
applicable  state  securities laws or unless the Company has received an opinion
of counsel reasonably  acceptable to the Company that such sale,  disposition or
transfer is exempt  from such  registration.  The Note shall bear a  restrictive
legend to the foregoing effect.

     7.6.  Expenses.  The  Company  shall  reimburse  the  Lender for all of its
reasonable  out-of-pocket  expenses  incurred in the  negotiation,  preparation,
execution  and  delivery  of this  Agreement,  the Note,  the  Mortgage  and the
Security  Agreement  and  related  matters,   and  all  related  due  diligence,
including,  without  limitation,  the expenses of legal counsel and accountants.
The  Company  shall  also  reimburse  the  Lender  for all of its  out-of-pocket
expenses incurred in the administration, waiver, modification and enforcement of
any of its rights under this Agreement,  the Note, the Mortgage and the Security
Agreement,  including,  without  limitation,  the  reasonable  expenses of legal
counsel and accountants.  In addition,  the Company shall be responsible for any
documentary  taxes incurred in connection with the transactions  contemplated by
this Agreement, and the Note, the Mortgage and the Security Agreement.

     7.7.  Severability.  Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction, shall as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability  without  invalidating the
remaining  provisions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction.

     7.8.  Governing Law. This  Agreement  shall be governed by and construed in
accordance  with the laws of the State of Illinois  without giving effect to any
choice or conflict of law provision or rule (whether of the State of Illinois or
any other  jurisdiction)  that would  cause the  application  of the laws of any
jurisdiction other than the State of Illinois.

     7.9.  Successors  and  Assigns.  This  Agreement  shall be binding upon the
Company and the Lender and their  respective  successors and assigns,  and shall
inure to the  benefit of the  Company  and the Lender and their  successors  and
assigns.

     7.10.  Headings.  Headings used in this Agreement are for convenience  only
and shall not be used in  connection  with the  interpretation  of any provision
hereof.

     7.11.  Counterparts.  This  Agreement  may be  executed  in any  number  of
counterparts,  each of which  shall be  deemed to be an  original,  but all such
separate counterparts shall together constitute one and the same instrument.

     7.12.  Forum Selection and Consent to  Jurisdiction.  ANY LITIGATION  BASED
HEREIN,  OR ARISING OUT OF, UNDER,  OR IN CONNECTION  WITH THIS  AGREEMENT,  THE
NOTE, MORTGAGE,  SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT, SHALL BE BROUGHT
AND  MAINTAINED  EXCLUSIVELY  IN THE COURTS OF THE STATE OF  ILLINOIS  OR IN THE
UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF ILLINOIS; PROVIDED THAT
ANY SUIT SEEKING  ENFORCEMENT  AGAINST ANY  COLLATERAL OR OTHER  PROPERTY MAY BE
BROUGHT,  AT  LENDER'S  OPTION,  IN THE  COURTS OF ANY  JURISDICTION  WHERE SUCH
COLLATERAL  OR OTHER  PROPERTY MAY BE FOUND.  THE COMPANY  HEREBY  EXPRESSLY AND
IRREVOCABLY  SUBMITS TO THE  JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS
AND OF THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF ILLINOIS FOR
THE PURPOSE OF ANY SUCH  LITIGATION  AS SET FORTH  ABOVE.  THE  COMPANY  FURTHER
IRREVOCABLY  CONSENTS  TO THE  SERVICE OF PROCESS BY  REGISTERED  MAIL,  POSTAGE
PREPAID,  OR BY PERSONAL  SERVICE  WITHIN OR WITHOUT THE STATE OF ILLINOIS.  THE
COMPANY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
SUCH  LITIGATION  BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT
ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

     7.13.  Waiver of Jury Trial.  THE COMPANY AND LENDER HEREBY WAIVE ANY RIGHT
TO A TRIAL BY JURY IN ANY ACTION OR  PROCEEDING  TO ENFORCE OR DEFEND ANY RIGHTS
UNDER THIS  AGREEMENT,  ANY NOTE,  ANY OTHER LOAN  DOCUMENT  AND ANY  AMENDMENT,
INSTRUMENT,  DOCUMENT  OR  AGREEMENT  DELIVERED  OR WHICH  MAY IN THE  FUTURE BE
DELIVERED IN CONNECTION  HEREWITH OR THEREWITH OR ARISING FROM ANY  RELATIONSHIP
EXISTING  IN  CONNECTION  WITH ANY OF THE  FOREGOING,  AND AGREES  THAT ANY SUCH
ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

         [remainder of page intentionally blank; signature page follows]

<PAGE>

     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
executed  by the  undersigned  thereunto  duly  authorized  as of the date first
written above.

                                     THE COMPANY:

                                     KEYSTONE CONSOLIDATED INDUSTRIES, INC.

                                     By:
                                     ------------------------------------------
                                     Name:
                                     ------------------------------------------
                                     Title:
                                     ------------------------------------------

                                     THE LENDER:

                                     COUNTY OF PEORIA, ILLINOIS

                                     By:
                                     ------------------------------------------
                                     Name:
                                     ------------------------------------------
                                     Title:
                                     ------------------------------------------

<PAGE>

                                 SCHEDULE 5.1(b)

                                    CONSENTS

<PAGE>

                                 SCHEDULE 5.1(d)

                    Defaults under material debt instruments

-    The Company is in default  under the  Indenture  governing its $100 million
     Senior  Secured  Notes  due 2007 as a result  of  failure  to pay  interest
     payments due August 1, 2001 and February 1, 2002

-    The Company is in default under the $55 million  Revolving Credit Agreement
     with Congress Financial  Corporation as a result of failure to pay interest
     payments  due August 1, 2001 and  February  1, 2002 on the  Company's  $100
     million Senior Secured Notes due 2007

<PAGE>

                                 SCHEDULE 5.1(e)

                              Compliance with Laws

-    The Company is engaged in a lawsuit with the Illinois Industrial Commission
     (the "Illinois Commission")  regarding the Company's  self-insurance of its
     workers compensation  obligations in Illinois.  The Illinois Commission has
     requested  that the Company post a total of  $5,475,000  as  security.  The
     Company has filed a petition for  rehearing  with the  Illinois  Commission
     challenging the Illinois Commission's security calculation.

<PAGE>

Exhibit "A"

                             Form of Promissory Note

<PAGE>

                                   Exhibit "B"

                            Form of Escrow Agreement

<PAGE>

                                   Exhibit "C"

                                   DCCA Grants

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