Exhibit 10.1

                                                                  Execution Copy

                               SECOND AMENDMENT TO
                       AMENDED AND RESTATED LOAN AGREEMENT

      THIS SECOND  AMENDMENT TO AMENDED AND  RESTATED  LOAN  AGREEMENT  ("Second
Amendment")  is made as of this 29th day of  March,  2005,  by and  among  FLEET
CAPITAL CORPORATION  ("Fleet"), a Rhode Island corporation with an office at One
South Wacker Drive,  Suite 3400,  Chicago,  Illinois  60606,  individually  as a
Lender and as Agent  ("Agent")  for itself and any other  financial  institution
which is or becomes a party hereto (each such financial  institution,  including
Fleet, is referred to hereinafter individually as a "Lender" and collectively as
the "Lenders"),  the CANADIAN  PARTICIPANTS party hereto, the U.K.  PARTICIPANTS
party hereto, FLEET CAPITAL GLOBAL FINANCE,  INC.,  individually as a Lender and
as Canadian Agent ("Canadian Agent"),  BANK OF AMERICA,  N.A., London branch (as
successor-in-interest   to  Fleet  National  Bank,  London  branch,  trading  as
FleetBoston  Financial),  individually  as a  Lender  and as U.K.  Agent  ("U.K.
Agent"), WELLS FARGO FOOTHILL,  LLC, as Syndication Agent, LASALLE BANK NATIONAL
ASSOCIATION,  as  Documentation  Agent, the LENDERS,  KATY  INDUSTRIES,  INC., a
Delaware  corporation,  with its chief  executive  office and principal place of
business at 765 Straits  Turnpike,  Suite 2000,  Middlebury,  Connecticut  06762
("Katy"  or  "U.S.  Borrower"),  WOODS  INDUSTRIES  (CANADA)  INC.,  a  Canadian
corporation  with its chief executive  office and principal place of business at
375 Kennedy  Road,  Scarborough,  Ontario M1K 2A3 ("Woods  Canada" or  "Canadian
Borrower") and CEH LIMITED ("CEH" or "U.K. Borrower"), a private limited company
incorporated under the laws of England and Wales and registered with Company No.
4992300 whose  registered  office is Cardrew Way,  Redruth  Cornwall,  TR15 1ST,
England.  Katy,  Woods  Canada and CEH are  sometimes  hereinafter  referred  to
individually as a "Borrower" and collectively as "Borrowers."

                              W I T N E S S E T H:
                              - - - - - - - - - -

      WHEREAS,  Agent,  Lenders,   Canadian  Participants,   U.K.  Participants,
Canadian  Agent,  U.K.  Agent and Borrowers  entered into a certain  Amended and
Restated Loan Agreement dated as of April 20, 2004 as amended by a certain First
Amendment  to Amended and  Restated  Loan  Agreement  dated June 29, 2004 by and
among Agents,  Lenders and Borrowers  (said Loan  Agreement,  as so amended,  is
hereinafter referred to as the "Loan Agreement"); and

      WHEREAS,  Borrowers  desire to amend and modify certain  provisions of the
Loan Agreement pursuant to the terms and conditions hereof;

      WHEREAS,  subject  to the terms and  conditions  hereof,  Agent,  Lenders,
Canadian  Participants,  U.K.  Participants,  U.K.  Agent and Canadian Agent are
willing to so amend and modify the Loan Agreement; and

      NOW THEREFORE,  in consideration of the premises, the mutual covenants and
agreements  herein  contained,  and any extension of credit  heretofore,  now or
hereafter  made by Agent and Lenders to  Borrowers,  the parties  hereto  hereby
agree as follows:


<PAGE>

1.    Definitions.  All capitalized  terms used herein without  definition shall
      have the meanings given to them in the Loan Agreement.

2.    Financial Covenants. Upon the Second Amendment Effective Date, Exhibit 7.3
      attached  to the Loan  Agreement  shall be deemed  deleted and Exhibit 7.3
      attached hereto and incorporated herein shall be inserted in its stead.

3.    Amendment  Fee.  In order to induce  Agent and  Lenders to enter into this
      Second  Amendment,  Borrowers  agree  to  pay to  each  Lender  that  is a
      signatory  hereto and has consented to the provisions  contained herein an
      amendment fee equal to, in the aggregate, $137,500. Such fee shall be paid
      to Agent  for the  ratable  benefit  of each  Lender  that is a  signatory
      hereto.  Each such Lenders  ratable share shall be equal to (x) the sum of
      such Lender's U.S.  Revolving Loan Commitment plus the principal amount of
      such Lender's  Term Loan divided by (y) the sum of all  Lenders',  who are
      signatories  hereto,  Revolving Loan Commitments plus the principal amount
      of all such Lenders' Term Loans.  Such amendment fee shall be deemed fully
      earned and non-refundable on the Second Amendment Effective Date.

4.    Condition  Precedent.  This Second  Amendment shall become  effective upon
      satisfaction of each of the following conditions:

            (i) Borrowers,  Agents and majority  Lenders shall have executed and
            delivered to each other this Second Amendment; and

            (ii) Borrowers  shall have paid to Agent for the ratable  benefit of
            each Lender that is a signatory  hereto,  the amendment fee referred
            to in Section 3 above.

            (iii) The date on which each of the foregoing  conditions  precedent
            is satisfied shall be referred to as the "Second Amendment Effective
            Date."

5.    Continuing  Effect.  Except as otherwise  specifically set out herein, the
      provisions of the Loan Agreement shall remain in full force and effect.

6.    Governing Law. This Second Amendment and the obligations arising hereunder
      shall be governed by, and construed and enforced in accordance  with,  the
      laws of the State of Illinois  applicable to contracts  made and performed
      in  such  state,  without  regard  to  the  principles  thereof  regarding
      conflicts of laws.

7.    Counterparts.  This  Second  Amendment  may be  executed  in any number of
      separate counterparts,  each of which shall,  collectively and separately,
      constitute one agreement.

                            (Signature Page Follows)


                                       2
<PAGE>

             (Signature Page to Second Amendment to Loan Agreement)

      IN WITNESS  WHEREOF,  this Second  Amendment has been duly executed on the
day and year specified at the beginning of this Second Amendment.

                                  KATY INDUSTRIES, INC.


                                  By:  /s/ Amir Rosenthal
                                      -------------------------------------
                                       Name: Amir Rosenthal
                                       Title: Vice President and CFO

<PAGE>

                                  CEH LIMITED


                                  By:  /s/ C. Michael Jacobi
                                      -------------------------------------
                                       Name: C. Michael Jacobi
                                       Title: Director

                                  and


                                  By:  /s/ Christopher W. Anderson
                                      -------------------------------------
                                       Name: Christopher W. Anderson
                                       Title: Director

<PAGE>

                                  WOODS INDUSTRIES (CANADA) INC.


                                  By:  /s/ Amir Rosenthal
                                      -------------------------------------
                                       Name: Amir Rosenthal
                                       Title: Secretary

<PAGE>

                                  FLEET CAPITAL CORPORATION,
                                    as Agent and as a Lender


                                  By:  /s/ Jason Riley
                                      -------------------------------------
                                       Name: Jason Riley
                                       Title: VP

<PAGE>

                                  WELLS FARGO FOOTHILL LLC,
                                  as Syndication Agent and Lender


                                  By:  /s/ Lan Wong
                                      -------------------------------------
                                       Name: Lan Wong
                                       Title: Vice-President

<PAGE>

                                  LASALLE BANK NATIONAL ASSOCIATION,
                                  as Documentation Agent and as a Lender


                                  By:  /s/ Stephanie Kline
                                      -------------------------------------
                                       Name: Stephanie Kline
                                       Title: Vice President


<PAGE>

                                  UPS CAPITAL CORPORATION, as a Lender


                                  By:  /s/ John P. Holloway
                                      -------------------------------------
                                       Name: John P. Holloway
                                       Title: Director of Portfolio Management

<PAGE>

                                  BANK OF AMERICA, N.A., London branch,
                                  as U.K. Agent and U.K. Lender


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

<PAGE>

                                  FLEET CAPITAL GLOBAL FINANCE, INC.,
                                  as Canadian Agent and Canadian Lender


                                  By:  /s/ Mark Adkins
                                      -------------------------------------
                                       Name: Mark Adkins
                                       Title: Vice President


<PAGE>

         Accepted and Agreed to this 29th day of March, 2005.

                                  GUARANTORS:


                                  KKTY HOLDING COMPANY, L.L.C.


                                  By:  /s/ Christopher W. Anderson
                                      -------------------------------------
                                       Name: Christopher W. Anderson
                                       Title: Authorized Manager


                                  AMERICAN GAGE & MACHINE CO.


                                  By:  /s/ Amir Rosenthal
                                      -------------------------------------
                                       Name: Amir Rosenthal
                                       Title:   Vice President and Secretary


                                  CONTINENTAL COMMERCIAL PRODUCTS, LLC


                                  By:  /s/ Amir Rosenthal
                                      -------------------------------------
                                       Name: Amir Rosenthal
                                       Title:  Secretary


                                  PTR MACHINE CORP.


                                  By:  /s/ Amir Rosenthal
                                      -------------------------------------
                                       Name:  Amir Rosenthal
                                       Title:     Secretary


                                  SAVANNAH ENERGY SYSTEMS COMPANY


                                  By:  /s/ Amir Rosenthal
                                      -------------------------------------
                                       Name: Amir Rosenthal
                                       Title:   Authorized Officer and Secretary


                                  WOODS INDUSTRIES, INC.


                                  By:  /s/ Amir Rosenthal
                                      -------------------------------------
                                       Name: Amir Rosenthal
                                       Title:  Secretary


<PAGE>

                                   EXHIBIT 7.3

                               FINANCIAL COVENANTS

DEFINITIONS

            Consolidated EBITDA - for any period, the sum, without  duplication,
of the amounts for such period of (i)  Consolidated  Net Income,  (ii)  interest
expense,  (iii)  provisions for taxes based on income,  (iv) total  depreciation
expense, (v) total amortization expense, (vi) all unusual expenses and all other
non-capitalized   restructuring   expenses   (including   costs   and   expenses
attributable to employee severance obligations and facility consolidation costs)
for such period to the extent not  disallowed  by Agent in its sole  discretion,
(vii) any  payment of or accrual  for the  Management  Fee under the  Management
Agreement,  (viii) all other payments made to K&C and its Affiliates during such
period  for  expenses  incurred  on  behalf  of  Parent,  Katy  or any of  their
respective  Subsidiaries  pursuant to  Kohlberg  Agreements,  (ix) any  non-cash
expense incurred with respect to Katy's stock  appreciation  rights plan ("SAR")
and (x) any  non-cash  expense  with  respect to changes in market  value of any
options to purchase  Katy's  Common Stock and (xi) other  non-cash  items (other
than any such  non-cash  item to the extent that it  represents an accrual of or
reserve for cash  expenditures in any future  period),  but only, in the case of
clauses (ii)-(xi), to the extent deducted in the calculation of Consolidated Net
Income less other non-cash items added in the  calculation of  Consolidated  Net
Income  (other than any such  non-cash item to the extent that it will result in
the receipt of cash  payments in any future  period),  all of the  foregoing  as
determined on a consolidated  basis for Katy and its  Subsidiaries in conformity
with GAAP;  provided  that there shall be  subtracted  from the sum of items (i)
through (xi) above the amount of any cash expenditure made within the applicable
period  pursuant  to the  SAR,  to the  extent  that  the  amount  of such  cash
expenditure was expensed or will be expensed  against a prior or future period's
Consolidated Net Income; provided, further, that (a) in the event any Loan Party
makes  an  acquisition  of any  Person  or any  division  or any  business  unit
permitted  hereunder or consented to by Majority Lenders during such period,  if
Katy  provides  Agent and  Lenders  financial  statements  with  respect  to the
business so acquired (which financial  statements shall have been audited by one
of the "Big 4" accounting firms or another nationally recognized accounting firm
reasonably  satisfactory to Agent or financial statements otherwise satisfactory
to Agent) reasonably  satisfactory to Majority Lenders,  Consolidated EBITDA for
such period shall be  calculated  on a pro forma basis,  taking into account the
elimination  of  non-recurring  expenses,  based on the results of such acquired
Person or acquired  assets as if such  acquisition had occurred on the first day
of  such  period,  and  (b) in the  event  any  Loan  Party  makes  a  Permitted
Disposition  (or any other  disposition  of any  Person or any  division  or any
business  unit  permitted  hereunder or  consented  to by the Majority  Lenders)
during such period, Consolidated EBITDA for such period shall be calculated on a
pro forma basis, based on the results of such disposed Person or disposed assets
as if such Permitted Disposition (or such other disposition) had occurred on the
first day of such period.

            Consolidated Fixed Charges,  with respect to any period, the sum of:
(i)  scheduled  principal  payments  required  to be made  during such period in
respect to Indebtedness for Money Borrowed  (including the principal  portion of
Capitalized Lease Obligations),  plus (ii) Consolidated Interest Expense payable
in cash for such period,  all as determined for Borrowers and their Subsidiaries
on a Consolidated basis and in accordance with GAAP.


                              Exhibit 7.3 - Page 1
<PAGE>

            Consolidated  Interest  Expense  - for any  period,  total  interest
expense of Katy and its Subsidiaries on a consolidated basis with respect to all
outstanding  Indebtedness  of Katy  and  its  Subsidiaries,  including,  without
limitation,  net costs under Interest Rate Agreements,  but excluding,  however,
(i) any amounts referred to in the Fee Letter or amortization  thereof, (ii) any
deferred financing fees or amortization  thereof,  (iii) commissions,  discounts
and other fees and charges  owed with  respect to letters of credit and bankers'
acceptance financing, (iv) unused line charges, (v) non-cash charges included in
interest  expense  other  than in  clauses  (i) and (ii) and (vi) to the  extent
included in interest expense, costs associated with the unsuccessful second lien
financing abandoned prior to the Closing Date.

            Consolidated  Leverage  Ratio,  as at any  date,  the  ratio  of (a)
Consolidated  Total  Debt  as  at  such  date  minus  contingent   reimbursement
obligations with respect to letters of credit or guaranties of letters of credit
to (b)  Consolidated  EBITDA for the consecutive  four fiscal quarters ending on
the last day of the most recently ended fiscal quarter.

            Consolidated Net Income, for any period, the net income (or loss) of
Katy on a Consolidated basis for such period taken as a single accounting period
determined  in conformity  with GAAP;  provided that there shall be excluded (i)
the income (or loss) of any Person  (other than a  Subsidiary  of Katy) in which
any  other  Person  (other  than  Katy or any of its  Subsidiaries)  has a joint
interest, except to the extent of the amount of dividends or other distributions
actually  paid to Katy or any of its  Subsidiaries  by such  Person  during such
period,  (ii) the income (or loss) of any  Person  accrued  prior to the date it
becomes a Subsidiary of Katy or is merged into or consolidated  with Katy or any
of its  Subsidiaries  or that Person's assets are acquired by Katy or any of its
Subsidiaries,  (iii) the income of any Subsidiary of Katy to the extent that the
declaration or payment of dividends or similar  distributions by that Subsidiary
of that income is not at the time  permitted  by  operation  of the terms of its
charter or any agreement,  instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary,  (iv) any after-tax gains
or losses  attributable to Asset Sales or returned surplus assets of any Pension
Plan, (v) any LIFO reserves of CCP to the extent such LIFO reserves  decrease or
increase net income of CCP, and (vii) (to the extent not included in clauses (i)
through (v) above) any net extraordinary gains or net extraordinary losses.

            Consolidated Total Debt means, as at any date of determination,  the
aggregate  stated  balance sheet amount (which shall not include the face amount
of undrawn Letters of Credit) of all Money Borrowed of Katy and its Subsidiaries
on the last day of the most  recently  ended  fiscal  quarter,  determined  on a
Consolidated basis in accordance with GAAP.

            Fixed Charge Coverage Ratio,  with respect to any period,  the ratio
of (i) Consolidated EBITDA for such period minus the sum of (a) any income taxes
paid in cash during such period and  restructuring  payments  made in cash after
the Closing Date during such period plus (b) non-financed  Capital  Expenditures
during such period, to (ii) Consolidated  Fixed Charges for such period,  all as
determined for Borrowers and their  Subsidiaries on a Consolidated  basis and in
accordance with GAAP.


                              Exhibit 7.3 - Page 2
<PAGE>

            A.  Fixed  Charge  Coverage  Ratio.  Katy shall not permit the Fixed
Charge  Coverage  Ratio for any period set forth below to be less than the ratio
set forth below opposite such period:

                              Period                                Ratio
                              ------                                -----

            Four Fiscal Quarters Ending December 31, 2005
            and each March 31, June 30, September 30 and
            December 31 thereafter                                1.10 to 1

            B.   Consolidated   Leverage  Ratio.   Katy  shall  not  permit  the
Consolidated  Leverage  Ratio as of any date set forth below to be more than the
amount set forth below opposite such date:

                              Period                                Ratio
                              ------                                -----

            Four Fiscal Quarters Ending March 31, 2005            4.00 to 1

            Four Fiscal Quarters Ending June 30, 2005             3.75 to 1

            Four Fiscal Quarters Ending September 30, 2005        3.75 to 1

            Four Fiscal Quarters Ending December 31, 2005
            and each March 31, June 30, September 30 and
            December 31 thereafter                                3.00 to 1

            C. Minimum  Consolidated  EBITDA.  Katy shall  achieve  Consolidated
EBITDA for each of the fiscal  periods listed below equal to or greater than the
amount set forth opposite such period in the following schedule:

                                                            Minimum Consolidated
                           Fiscal Period                           EBITDA
                           -------------                           ------

            Four Fiscal Quarters Ending March 31, 2005           $20,700,000

            Four Fiscal Quarters Ending June 30, 2005            $22,000,000

            Four Fiscal Quarters Ending September 30, 2005       $22,000,000


                              Exhibit 7.3 - Page 3
<PAGE>

            D. Minimum Aggregate Availability. Katy shall maintain, on each day
within each of the fiscal periods  listed below,  Aggregate  Availability  in an
amount equal to or greater than the amount set forth opposite such fiscal period
in the following schedule:

                                                               Minimum Aggregate
                                                               -----------------
                           Fiscal Period                         Availability
                           -------------                         ------------

            January 1, 2005 to March 31, 2005                     $15,000,000

            April 1, 2005 to June 30, 2005                         $5,800,000

            July 1, 2005 to September 30, 2005                     $8,500,000


                              Exhibit 7.3 - Page 4