kci8k_3rdamendment10022009.htm

0000055604-09-000033.txt : 20091007 0000055604-09-000033.hdr.sgml : 20091007 20091007120549 ACCESSION NUMBER: 0000055604-09-000033 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20091002 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20091007 DATE AS OF CHANGE: 20091007 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KEYSTONE CONSOLIDATED INDUSTRIES INC CENTRAL INDEX KEY: 0000055604 STANDARD INDUSTRIAL CLASSIFICATION: STEEL WORKS, BLAST FURNACES ROLLING MILLS (COKE OVENS) [3312] IRS NUMBER: 370364250 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-03919 FILM NUMBER: 091109636 BUSINESS ADDRESS: STREET 1: 5430 LBJ FWY STE 1740 STREET 2: THREE LINCOLN CENTRE CITY: DALLAS STATE: TX ZIP: 75240 BUSINESS PHONE: 2144580028 MAIL ADDRESS: STREET 1: 5430 LBJ FWY STE 1740 STREET 2: THREE LINCOLN CENTRE CITY: DALLAS STATE: TX ZIP: 75240 FORMER COMPANY: FORMER CONFORMED NAME: KEYSTONE STEEL & WIRE CO DATE OF NAME CHANGE: 19710506 8-K 1 kci8k_3rdamendment10022009.htm KEYSTONE CONSOLIDATED INDUSTRIES, INC. - 8K 3RD AMENDMENT DATED 10-02-2009 kci8k_3rdamendment10022009.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

October 2, 2009

Date of Report (Date of the earliest event reported)

Keystone Consolidated Industries, Inc.

(Exact name of registrant as specified in its charter)

Delaware	1-3919	37-0364250
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)


5430 LBJ Freeway, Suite 1740, Dallas, Texas		75240-2697
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code

(972) 458-0028


	(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2):

o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 260.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01

Entry into a Material Definitive Agreement.

Item 2.03

Creation of a Direct Financial Obligation or an Obligation under an

Off-Balance Sheet Arrangement of a Registrant.

On October 2, 2009 the Registrant and certain of its subsidiaries entered into Amendment No. 3 to its Loan and Security Agreement dated August 31, 2005 (the “Amendment”) with Wachovia Capital Finance Corporation (Central), as agent for the lenders, and the lenders participating in the amended credit facility. Among other things, the Amendment waives the requirement for the Registrant to maintain certain financial covenants measured at September 30, 2009, October 31, 2009 and November 30, 2009, modifies certain required financial covenants at December 31, 2009, January 31, 2010 and February 28, 2010, changes the calculation of the fixed charge coverage ratio to include capital expenditures in the definition of fixed charges and increases the required minimum excess availability from September 30, 2009 to March 31, 2010 by $5 million. In addition, the interest rate on the facility’s revolving line of credit and term loan was increased to prime plus a margin ranging from 1.00% to 1.25% (for prime-based borrowings) or LIBOR plus a margin ranging from 2.75% to 3.00% (for LIBOR-based borrowings).

This summary of the terms of the Amendment does not purport to be complete and is qualified in its entirety by reference to the Amendment, a copy of which has been filed as Exhibit 4.1 to this report.

The credit facility matures in August 2010. The credit facility is collateralized by substantially all of the Registrant’s operating assets. Failure to comply with the covenants contained in the credit facility could result in the acceleration of any outstanding balance under the facility prior to their stated maturity date. Additionally, the lenders of the credit facility can restrict the Registrant’s ability to incur additional secured indebtedness and can declare a default under the credit facility in the event of, among other things, a material adverse change in the Registrant’s business. The Registrant has no material relationship with the lenders other than the amended credit facility described herein.

Item 9.01

Financial Statements and Exhibits.

(d)

Exhibits.

Item No.

Exhibit Index 0;

4.1

Amendment No. 3 to Loan and Security Agreement dated as of October 2, 2009 by and between the Registrant and Wachovia Capital Finance Corporation (Central).

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

KEYSTONE CONSOLIDATED INDUSTRIES, INC.

(Registrant)

By: /s/ Bert E. Downing, Jr.

Bert E. Downing, Jr.

Vice President, Chief Financial Officer, Corporate Controller and Treasurer

Date: October 7, 2009

INDEX TO EXHIBITS

Exhibit No.

Description

4.1	Amendment No. 3 to Loan and Security Agreement dated as of October 2, 2009 by and between the Registrant and Wachovia Capital Finance Corporation (Central).

EX-4.1 2 kci8k_3rdamndmentexhibit41.htm KEYSTONE CONSOLIDATED INDUSTRIES, INC. - 8K 3RD AMENDMENT DATED 10-02-2009 EXH 4.1 kci8k_3rdamndmentexhibit41.htm

AMENDMENT NO. 3 TO LOAN AND SECURITY AGREEMENT

This AMENDMENT NO. 3 TO LOAN AND SECURITY AGREEMENT (this "Amendment") dated as of October 2nd, 2009 is by and among Keystone Consolidated Industries, Inc., a Delaware corporation ("Keystone"), Keystone Wire Products Inc., a Delaware corporation ("KWP"), Engineered Wire Products, Inc., an Ohio corporation ("EWP"), Keystone-Calumet, Inc., a Delaware corporation ("KCI"), F V Steel and Wire Company, a Wisconsin corporation ("F V Steel" and, together with Keystone, KWP, EWP and KCI each individually a "Borrower" and collectively, "Borrowers"), Keystone Energy Resources, LLC, a Delaware limited liability company ("KER"), the parties hereto as lenders (each individually, a "Lender" and collectively, "Lenders" as hereinafter further defined) and Wachovia Capital Finance Corporation (Central), an Illinois corporation, in its capacity as agent for Lenders (in such capacity, "Agent"). Capitalized terms used and not otherwise defined herein shall have the meanings assigned to them in the Loan Agreement (defined below).

RECITALS:

WHEREAS, Borrowers, the Agent and the Lenders have entered into that certain Loan and Security Agreement dated as of August 31, 2005 (as amended, the "Loan Agreement");

WHEREAS, Borrowers have requested that Agent and Lenders agree to certain amendments to the Loan Agreement as set forth herein; and

WHEREAS, Agent and Lenders have agreed to such amendments upon the terms and conditions contained herein.

NOW, THEREFORE, in consideration of the premises contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

SECTION 1 Amendments to the Loan Agreement. Immediately upon the satisfaction of each of the conditions precedent set forth in Section 3 below, the Loan Agreement is hereby amended as follows:

(a) The definition of "Adjusted Eurodollar Rate" set forth in Section 1 of the Loan Agreement is hereby amended by adding the following new sentence to the end of such definition:

"Notwithstanding the foregoing, in no event shall the "Adjusted Eurodollar Rate" be less than 1.0%."

(b) The definition of "Fixed Charges" set forth in Section 1 of the Loan Agreement is hereby amended and restated to read as follows:

"Fixed Charges" means, with respect to any Person for any fiscal period, (a) the aggregate of all Interest Expense paid or payable during such period, plus (b) scheduled payments of principal with respect to

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Indebtedness during such period including scheduled payments with respect to Capital Leases, plus (c) income taxes paid or payable in cash during such fiscal period, plus (d ) all dividend payments and payments made to repurchase Capital Stock during such fiscal period, plus (e) all unfinanced Capital Expenditures made in such fiscal period. This definition of Fixed Charges shall exclude any scheduled lump sum payments required to be made by Borrowers in 2007, 2008 and 2009 on the Remaining Notes."

(c) The definition of "Interest Rate" set forth in Section 1 of the Loan Agreement is hereby amended and restated to read as follows:

"Interest Rate" shall mean,

(a) Subject to clause (b) of this definition below:

(i)	as to Prime Rate Loans that are Revolving Loans, a rate equal to 1.0% plus the Prime Rate,

(ii)	as to Prime Rate Loans that are Term Loans, a rate equal to 1.25% plus the Prime Rate,

(iii)

as to Eurodollar Rate Loans that are Revolving Loans, a rate equal to 2.75% plus the Adjusted Eurodollar Rate (in each case, based on the London Interbank Offered Rate applicable for the Interest Period selected by a Borrower, or by Administrative Borrower on behalf of such Borrower, as in effect two (2) Business Days prior to the commencement of the Interest Period, whether such rate is higher or lower than any rate previously quoted to any Borrower or Guarantor),

(iv)

as to Eurodollar Rate Loans that are Term Loans, a rate equal to 3.00% plus the Adjusted Eurodollar Rate (in each case, based on the Eurodollar Rate applicable for the Interest Period selected by a Borrower, or by Administrative Borrower on behalf of such Borrower, as in effect two (2) Business Days prior to the commencement of the Interest Period, whether such rate is higher or lower than any rate previously quoted to any Borrower or Guarantor), and

(v)	as to fees for Letter of Credit Obligations, a rate equal to 3.00%; and;

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(b) Notwithstanding anything to the contrary contained in clause (a) of this definition, the rates set forth in clause (a) for Prime Rate Loans, Eurodollar Rate Loans and fees for Letter of Credit Obligations shall be increased by an additional two percent (2%) per annum, at Agent's option, (i) either (A) without notice, for the period on and after the date of termination or non-renewal hereof until such time as all Obligations (other than contingent indemnification obligations not asserted or due) are paid and satisfied in full in immediately available funds, or (B) upon notice to the Administrative Borrower (which notice shall not be required if an Event of Default has occurred and is continuing under Sections 10.1(g) and (h) of this Agreement), for the period from and after the date of the occurrence of any Event of Default, and for so long as such Event of Default is continuing and (ii) on the Revolving Loans to any Borrower at any time outstanding in excess of the Borrowing Base of such Borrower or the Revolving Loan Limit of such Borrower (whether or not such excess(es) arise or are made with or without Agent's or any Lender's knowledge or consent and whether made before or after an Event of Default);

(d) Section 3.2(a) of the Loan Agreement is hereby amended by deleting the language "one quarter of one (.25%) percent" and replacing it with the language "three-eights of one percent (0.375%)"

(e) Section 9.18 of the Loan Agreement is hereby amended and restated to read as follows:

"9.18 Minimum Fixed Charge Coverage Ratio. Borrowers and their Subsidiaries on a consolidated basis shall have, at the end of each calendar month, a Fixed Charge Coverage Ratio for the 12-month period then ending of not less than (a) 0.90:1.0 for the months ending December 31, 2009, January 31, 2010 and February 28, 2010 and (b) 1.0:1.0 for each month ending thereafter."

(f) Section 9.19 of the Loan Agreement is hereby amended and restated in its entirety to read as follows:

"9.19 Minimum Excess Availability. Borrowers shall maintain at all times Aggregate Suppressed Availability of at least (a) $10,000,000 through and including March 31, 2010 and (b) $5,000,000 thereafter.

SECTION 2 Limited Waiver.Agent and Lenders hereby waive Borrowers compliance with Section 9.17 of the Loan Agreement solely for the period ending September 30, 2009 and Section 9.18 of the Loan Agreement solely for the periods ending September 30, 2009,

CH\1125510.3

October 31, 2009 and November 30, 2009; provided, that Borrowers shall continue to comply with Sections 9.17 and 9.18 of the Loan Agreement for all periods ending December 31, 2009 and thereafter.

SECTION 3 Conditions to Effectiveness. The effectiveness of the amendments and waivers set forth in Section 1 above are subject to the satisfaction of each of the following conditions and in each case in form and substance, and with results, satisfactory to Agent:

(a) Agent shall have received a duly executed counterpart of this Amendment from Borrowers, KER and Required Lenders;

(b) Agent shall have received an amendment fee equal to $100,000 for the ratable benefit of the Lenders executing this Amendment which fee shall be earned in full and payable on the date hereof; and

(c) Agent shall have received resolutions of the Borrowers certified by an officer of the Borrowers approving the transactions contemplated by this Amendment, in form and substance satisfactory to the Agent.

SECTION 4 Representations, Warranties and Covenants.In order to induce Agent and Lenders to enter into this Amendment, Borrowers and KER represent, warrant and covenant to Agent and Lenders, upon the effectiveness of this Amendment, which representations, warranties and covenants shall survive the execution and delivery of this Amendment that:

(a) No Default; etc.No Default or Event of Default has occurred and is continuing after giving effect to this Amendment or would result from the execution or delivery of this Amendment or the consummation of the transactions contemplated hereby.

(b) Corporate or Limited Liability Company Power and Authority; Authorization. Each Borrower and KER have the power and authority to execute and deliver this Amendment and to carry out the terms and provisions of the Financing Agreements, as amended by this Amendment, to which they are a party and the execution and delivery by such Borrower and KER of this Amendment, and the performance by such Borrower and KER of their obligations hereunder have been duly authorized by all requisite action by such Borrower and KER.

(d) Enforceability.This Amendment constitutes the legal, valid and binding obligations of each Borrower and KER, enforceable against each Borrower and KER in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' right generally, and by general principles of equity.

(e) Representations and Warranties.All of the representations and warranties contained in the Financing Agreements (other than those which speak expressly only as of a

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different date) are true and correct as of the date hereof after giving effect to this Amendment and the transactions contemplated hereby.

SECTION 5 Miscellaneous.

(a) Effect; Ratification. Borrowers acknowledge that all of the reasonable legal expenses incurred by Agent in connection herewith shall be reimbursable under Section 9.23 of the Loan Agreement. The amendments and waivers set forth herein are effective solely for the purposes 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 any Financing Agreement or (ii) prejudice any right or rights that any Lender may now have or may have in the future under or in connection with any Financing Agreement. Each reference in the Financing Agreements to "this Agreement", "herein", "hereof' and words of like import shall mean such Financing Agreement as amended hereby. This Amendment shall be construed in connection with and as part of the Financing Agreements and all terms, conditions, representations, warranties, covenants and agreements set forth in the Financing Agreements, except as herein amended are hereby ratified and confirmed and shall remain in full force and effect.

(b) Counterparts; etc. This Amendment may be executed in any number of counterparts, each such counterpart constituting an original but all together one and the same instrument. Delivery of an executed counterpart of this Amendment by fax shall have the same force and effect as the delivery of an original executed counterpart of this Amendment. Any party delivering an executed counterpart of this Amendment by fax shall also deliver an original executed counterpart, but the failure to do so shall not affect the validity, enforceability or binding effect of this Amendment.

(c) Governing Law. This Amendment shall be deemed a Financing Agreement and shall be governed by, and construed and interpreted in accordance with the internal laws of the State of Illinois but excluding any principles of conflicts of law or other rule of law that would cause the application of the law of any jurisdiction other than the laws of the State of Illinois.

(d) Reaffirmation. Each Borrower and KER reaffirms all of its obligations under Section 14 of the Loan Agreement as a guarantor of the Obligations.

[Signature Pages Follow]

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IN WITNESS WHEREOF, Agent, Required Lenders, Borrowers and KER have caused this Amendment No. 3 to Loan and Security Agreement to be duly executed as of the day and year first above written.

BORROWERS:

KEYSTONE CONSOLIDATED INDUSTRIES, INC.

By: /s/ Bert E. Downing, Jr .

Title: V.P. – CFO

Name: Bert E. Downing, Jr.

KEYSTONE WIRE PRODUCTS INC.

By: Dissolved 12/28/07

Title: ______________________________________

Name: _____________________________________

ENGINEERED WIRE PRODUCTS, INC.

By: /s/ Bert E. Downing, Jr .

Title: V.P. – Treasurer

Name: Bert E. Downing, Jr.

F V STEEL AND WIRE COMPANY

By: /s/ Bert E. Downing, Jr .

Title: V.P. – Treasurer

Name: Bert E. Downing, Jr.

KEYSTONE-CALUMET, INC.

By: /s/ Bert E. Downing, Jr .

Title: V.P. – CFO

Name: Bert E. Downing, Jr.

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Agreed and Acknowledged by:

KEYSTONE ENERGY RESOURCES, LLC

By: /s/ Bert E. Downing, Jr .

Title: V.P. – Treasurer

Name: Bert E. Downing, Jr.

AGENT AND LENDERS:

WACHOVIA CAPITAL FINANCE CORPORATION

(CENTRAL), as Agent and a Lender

By: /s/ Laura Dixon

Title: Vice President

Name: Laura Dixon

CAPITAL ONE LEVERAGE FINANCE CORP. (f/k/a/

North Fork Business Capital Corporation), as a Lender

By: __________________________________

Title: __________________________________

Name: _________________________________

PNC BANK NATIONAL ASSOCIATION, as a Lender

By: __________________________________

Title: __________________________________

Name: __________________________________

CYt11255103

Agreed and Acknowledged by:

KEYSTONE ENERGY RESOURCES, LLC

By: _______________________________ 60;

Title: ______________________________

Name: _____________________________

AGENT AND LENDERS:

WACHOVIA CAPITAL FINANCE CORPORATION

(CENTRAL), as Agent and a Lender

By: _______________________________

Title: _______________________________

Name: ______________________________

CAPITAL ONE LEVERAGE FINANCE CORP. (f/k/a/

North Fork Business Capital Corporation), as a Lender

By: /s/ Vik Dewanjee

Title: Vice President

Name: Vik Dewanjee

PNC BANK NATIONAL ASSOCIATION, as a Lender

By: ________________________________

Title: _______________________________

Name: _______________________________

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Agreed and Acknowledged by:

KEYSTONE ENERGY RESOURCES, LLC

By: ______________________________

Title: _____________________________

Name: ____________________________

AGENT AND LENDERS:

WACHOVIA CAPITAL FINANCE CORPORATION (CENTRAL), as Agent and a Lender

By: _______________________________

Title: ______________________________

Name: ______________________________

CAPITAL ONE LEVERAGE FINANCE CORP. (f/k/a/ North Fork Business Capital Corporation), as a Lender

By: ______________________________

Title: ______________________________

Name: ______________________________

PNC BANK NATION ASSOCIATION, as a Lender

By: ________________________________

Title: _______________________________

Name: _______________________________

CH\1125510.