Document:

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                                                                   Exhibit 10.4

                            LETTER AMENDMENT NO. 2

                                      to

                  Amended and Restated Master Shelf Agreement

                                                As of March 30, 2001

The Prudential Insurance Company
 of America
U.S. Private Placement Fund
c/o Prudential Capital Group
2200 Ross Avenue, Suite 4200E
Dallas, Texas 75201

Ladies and Gentlemen:

          We refer to the Amended and Restated Master Shelf Agreement dated as
of February 14, 2000, as amended by the Letter Amendment No. 1 thereto dated as
of July 31, 2000 (as so amended, the "Agreement"), among the undersigned,
TransMontaigne Inc. (the "Company"), and The Prudential Insurance Company of
America ("Prudential") and U.S. Private Placement Fund (collectively, the
"Purchasers"). Unless otherwise defined herein, the terms defined in the
Agreement shall be used herein as therein defined.

          The Company has advised the Purchasers that it desires certain
amendments to the Agreement in order to, among other things, reset certain
financial covenants, dispose of specified assets and apply the proceeds to
reduce its term debt, permit the incurrence of additional capital expenditures,
and simplify the credit fee calculation. The Purchasers have agreed to amend the
relevant provisions of the Agreement to permit these activities.

1.   Amendments to the Agreement. Subject to the accuracy of the representations
     and warranties set forth in paragraph 3 hereof and satisfaction of the
     conditions set forth in paragraph 4(c) hereof, the Agreement is, effective
     as of the date first above written, hereby amended as follows:

     (a)  Paragraph 4A. Required Prepayments. Paragraph 4A of the Agreement is
amended to read in its entirety as follows:

          4A.  Required Prepayments. The Notes of each Series shall be subject
     to required prepayments as set forth in paragraphs 4A(1), 4A(2) and 4A(3).
<PAGE>

          4A(1).  Scheduled Prepayments. The Notes of each Series shall be
                  ---------------------
     subject to required prepayments, if any, set forth in the Notes of such
     Series, provided, that upon any partial prepayment of the Notes of any
             --------
     Series pursuant to paragraph 4A(2) or 4A(3), the principal amount of each
     required prepayment of the Notes of such Series becoming due under this
     paragraph 4A(1) on and after the date of such prepayment shall be reduced
     by a percentage equal to the product of (a) 100 and (b) the quotient
     arrived at by dividing the principal portion of the Notes of such Series so
     prepaid by the total principal amount of the Notes of such Series
     outstanding immediately prior to such prepayment.

          4A(2).  Certain Prepayments under the Bank Agreement. The Company
                  --------------------------------------------
     shall ratably prepay the Notes upon any required or voluntary prepayment of
     the term loans under the Bank Agreement (other than (i) the scheduled
     required prepayments of principal set forth in section 4.3 of the Bank
     Agreement as in effect on the date hereof and (ii) the required prepayments
     of the term loans under the Bank Agreement described in paragraph 4A(3)
     hereof) in proportion to the aggregate principal amounts of the Company's
     obligations outstanding at such time pursuant to the Notes and the term
     loans under the Bank Agreement. Prepayments pursuant to the preceding
     sentence shall be made as follows: (i) in the case of the Notes, in an
     amount equal to the product of such net cash proceeds multiplied by the
                                                           ----------
     quotient obtained by dividing (a) the then outstanding principal amount of
     the Notes by (b) the sum of the then outstanding principal amount of the
     Notes and the then outstanding aggregate principal amount of the term loans
     under the Bank Agreement, and (ii) in the case of the term loans under the
     Bank Agreement, in an amount equal to the product of such net cash proceeds
     multiplied by the quotient obtained by dividing (x) the then outstanding
     ----------
     aggregate principal amount of the term loans under the Bank Agreement by
     (y) the sum of the then outstanding principal amount of the Notes and the
     then outstanding aggregate principal amount of the term loans under the
     Bank Agreement. All prepayments of the Notes pursuant to this paragraph
     4A(2) shall be at 100% of the principal amount so prepaid plus interest
     thereon to the prepayment date and the Yield-Maintenance Amount, if any,
     with respect to each such Note. Any partial prepayment of Notes pursuant to
     this paragraph 4A(2) shall be applied to reduce pro rata the required
     prepayments of principal of the Notes of each Series as set forth in
     paragraph 4A(1).

          4A(3).  Prepayments from Certain Net Asset Sale Proceeds. Upon
                  ------------------------------------------------
     receipt by the Company or any of its Subsidiaries of the cash proceeds of
     the sale or disposition of the assets permitted to be sold or otherwise
     disposed of by paragraph 6C(5)(v) (and allocated to paragraph 6C(5)(v) as
     provided therein), net of transfer, sales, use and other similar taxes
     payable in connection with such sale or disposition and all reasonable
     expenses of the Company or any of its Subsidiaries payable in connection
     with such sale or disposition, the Company shall within two Business Days
     ratably pay such net cash proceeds to the holders of the Notes as a
     prepayment of the Notes and to the Bank Agent as a prepayment of the term
     loans under the Bank Agreement. The amount payable to the holders of the
     Notes pursuant to the preceding sentence (the "Note Asset Sale

                                       2
<PAGE>

     Prepayment Amount") shall be equal to the product of such net cash proceeds
     multiplied by the quotient obtained by dividing (a) the then outstanding
     ----------
     principal amount of the Notes by (b) the sum of the then outstanding
     principal amount of the Notes and the then outstanding aggregate principal
     amounts of the term loans, revolving loans and swingline loans under the
     Bank Agreement. Together with each such prepayment, the Company shall
     deliver to the holders of the Notes an Officer's Certificate showing the
     calculation of the net proceeds of such sale or disposition and the
     Indebtedness to be paid therefrom. Upon each prepayment pursuant to this
     paragraph 4A(3), the applicable Note Asset Sale Prepayment Amount shall be
     applied between principal and the Yield Maintenance Amount, if any, with
     respect to such principal amount of Notes being prepaid in such amounts as
     are required to make the total of such amounts equal to the Note Asset Sale
     Prepayment Amount. All prepayments of the Notes pursuant to this paragraph
     4A(3) shall be at 100% of the principal amount so prepaid plus interest
     thereon to the prepayment date and the Yield-Maintenance Amount, if any,
     with respect to each such Note. Any partial prepayment of Notes pursuant to
     this paragraph 4A(3) shall be applied to reduce pro rata the required
     prepayments of principal of the Notes of each Series as set forth in
     paragraph 4A(1).

     (b)  Paragraph 5Q.  Credit Fee. Paragraph 5Q of the Agreement is amended to
read in its entirety as follows:

          5Q.  Credit Fee. On each day after December 31, 2000 on which,
     pursuant to paragraph 5A, delivery is made, or should have been made
     (without any grace), whichever is earlier (the "Delivery Date"), of
     financial statements for the fiscal quarter ended December 31, 2000, and
     each fiscal quarter or fiscal year, as the case may be, thereafter (the
     quarter in respect of which, or ending the period for which, such financial
     statements are being, or should have been, delivered is herein referred to
     as the "Reference Quarter"), the Company shall pay, in respect of the next
     fiscal quarter commencing after such Delivery Date (unless, in the case of
     annual financial statements, such Delivery Date falls within the second
     quarter after the Reference Quarter, in which case such payment shall be in
     respect of the quarter in which such Delivery Date falls), to each holder a
     credit fee equal to 0.625% of the principal amount of Notes held by such
     holder as of the last day of such Reference Quarter if the ratio of (a) the
     aggregate Indebtedness of the Company and its Subsidiaries of the types
     described in clauses (a), (b) and (c) of the definition thereof, determined
     on a Consolidated basis in accordance with GAAP, on the last day of such
     Reference Quarter to (b) the Consolidated EBITDA of the Company and its
     Subsidiaries for the period of four consecutive fiscal quarters ended on
     the last day of such Reference Quarter, equals or exceeds 325%.

     (c)  Paragraph 6A(1).  Fixed Charge Coverage. Paragraph 6A(1) of the
Agreement is amended to read in its entirety as follows:

                                       3
<PAGE>

          6A(1).  Fixed Charge Coverage. The Company will not permit, (i) for
     each fiscal quarter of the Company ending on or after December 31, 2000,
     the ratio (expressed as a percentage) of the Consolidated EBITDA of the
     Company and its Subsidiaries for the period of four consecutive fiscal
     quarters then ended to the Consolidated Fixed Charges of the Company and
     its Subsidiaries for such period to be less than the percentage specified
     in the table below:

          Four Quarter Period Ending        Percentage
          --------------------------        ----------

          December 31, 2000                 120%
          March 31, 2001                    140%
          June 30, 2001                     140%
          September 30, 2001                140%
          December 31, 2001                 150%
          March 31, 2002                    150%
          June 30, 2002                     160%
          September 30, 2002                160%
          December 31, 2002                 175%
             and thereafter

     and (ii) for each fiscal quarter of the Company, the ratio (expressed as a
     percentage) of the Consolidated EBITDA of the Company and its Subsidiaries
     for such fiscal quarter to Consolidated Fixed Charges of the Company and
     its Subsidiaries for such fiscal quarter to be less than 100%.

     (d)  Paragraph 6A(2).  Consolidated Tangible Net Worth. Paragraph 6A(2) of
the Agreement is amended to read in its entirety as follows:

          6A(2).  Consolidated Tangible Net Worth. The Company will not permit
     at any time the Consolidated Tangible Net Worth of the Company and its
     Subsidiaries to be equal to or less than an amount equal to the difference
     of (x) $298,174,000, minus (y) any after-tax losses attributable to the
                          -----
     asset sales and dispositions permitted by paragraph 6C(5)(v) (provided,
     that for purposes of this clause (y) only, the pre-tax losses attributable
     to such sales or dispositions shall in no event exceed $20,000,000);
     provided, however, that on the last day of each fiscal quarter of the
     --------  -------
     Company commencing with the fiscal quarter ending March 31, 2001, the then
     effective dollar amount in this paragraph 6A(2) (including any prior
     increases of such amount as provided in clauses (a) and (b) below) shall be
     increased by the sum of (a) 50% of the net proceeds of common stock,
     preferred stock or other equity securities issued during the fiscal quarter
     then ended by the Company and its Subsidiaries, calculated on a
     Consolidated basis in accordance with GAAP, plus (b) 50% of Consolidated
                                                 ----
     Net Income (if positive) for the fiscal quarter then ended, excluding from
     the calculation of Consolidated Net Income for the purpose of this clause
     (b) the effect of any after-tax loss attributable to the asset sales or
     dispositions

                                       4
<PAGE>

     referred to in clause (y) above to the extent that such after-tax loss is
     subtracted pursuant to clause (y) above.

     (e)  Paragraph 6A(5).  Capital Expenditures. Paragraph 6A(5) of the
Agreement is amended to read in its entirety as follows:

          6A(5).  Capital Expenditures. For each fiscal quarter of the Company,
     commencing with the fiscal quarter ended December 31, 2000, the aggregate
     amount of Non-Discretionary Capital Expenditures for the period of four
     consecutive fiscal quarters then ending shall not exceed $8,000,000; and,
     for the period commencing April 1, 2001 and ending June 30, 2002, the
     aggregate amount of Discretionary Capital Expenditures shall not exceed
     $20,000,000, and thereafter Discretionary Capital Expenditures shall not be
     permitted.

     (f)  Paragraph 6B.  Distributions. Subparagraph (ii) of paragraph 6B of the
Agreement is deleted in its entirety.

     (g)  Paragraph 6C(4).  Investments and Acquisitions. Paragraph 6C(4) of the
Agreement is amended by adding thereto a new subparagraph (ix) reading in
its entirety as follows:

          (ix) An Investment consisting of 24,000 shares of common stock of ST
     Oil Company, and any shares of capital stock distributed with respect to,
     in exchange for, or in substitution for such shares.

     (h)  Paragraph 6C(5).  Merger, Consolidation and Disposition of Assets.
Paragraph 6C(5) of the Agreement is amended by adding thereto a new subparagraph
(v) reading in its entirety as follows:

          (v)  During the period commencing April  1, 2001 and ending December
     31, 2001, the Company or any of its Subsidiaries may sell, exchange or
     otherwise dispose of assets with an aggregate book value as of December 31,
     2000 of no more than $50,000,000 in addition to those assets otherwise
     permitted to be disposed of by this paragraph 6C(5); provided, that any
                                                          --------
     sales of assets during such period which are described both in clause (b)
     or (c) of subparagraph (i) of this paragraph 6C(5) and in this subparagraph
     (v) shall be allocated first to this subparagraph (v) until the $50,000,000
     limit shall have been exhausted and then to subparagraph (i) of this
     paragraph 6C(5) (to the extent permitted by subparagraph (i) of this
     paragraph 6C(5)).

     (i)  Paragraph 10B.  Other Terms. Paragraph 10B of the Agreement is amended
by amending the definition of "Consolidated EBITDA" therein to read in its
entirety as follows:

          "Consolidated EBITDA" shall mean, for any period, the total of:

                                       5
<PAGE>

               (a)  Consolidated Net Income; plus
                                             ----

               (b)  all amounts deducted in computing such Consolidated Net
          Income in respect of (i) depreciation, amortization and other non-cash
          charges (including increases of reserves), (ii) Consolidated Interest
          Expense, (iii) taxes based upon or measured by net income, and (iv)
          fixed rental obligations of the Company or any of its Subsidiaries as
          lessee under leases of real and/or personal property (excluding (A)
          payments required to be made by the Company or any of its Subsidiaries
          as lessee in respect of taxes and insurance whether or not denominated
          as rent and (B) obligations under Capitalized Leases); minus
                                                                 -----

               (c)  all amounts included in computing such Consolidated Net
          Income in respect of dividends received in any form other than cash;
          minus
          -----

               (d)  all amounts included in Consolidated Net Income in respect
          of deferred income tax benefits; minus
                                           -----

               (e)  all amounts representing payments from reserves to pay
          liabilities during such period that were not deducted in computing
          such Consolidated Net Income.

     (j)  Paragraph 10B.  Other Terms. Paragraph 10B is further amended by
amending the definition of "Consolidated Fixed Charges" therein to read in its
entirety as follows:

          "Consolidated Fixed Charges" shall mean, for any period, the sum of:

               (a)  Consolidated Interest Expense, plus
                                                   ----

               (b)  the aggregate amount of all mandatory scheduled payments,
          mandatory scheduled prepayments and sinking fund payments, all with
          respect to Financing Debt of the Company and its Subsidiaries in
          accordance with GAAP on a Consolidated basis, including payments in
          the nature of principal under Capitalized Leases, but in no event
          including contingent prepayments required by paragraph 4A(2) or 4A(3)
          hereof or Section 4.2 of the Bank Agreement; plus
                                                       ----

               (c)  any Distributions paid or payable in cash by the Company or
          any of its Subsidiaries to third parties; plus
                                                    ----

               (d)  any taxes based upon or measured by net income paid or
          payable in cash by the Company or any of its Subsidiaries; plus
                                                                     ----

                                       6
<PAGE>

               (e)  the aggregate fixed rental obligations (excluding payments
          required to be made by the lessee in respect of taxes and insurance
          whether or not denominated as rent) of the Company and its
          Subsidiaries determined in accordance with GAAP on a Consolidated
          basis as lessee under all leases of real and/or personal property
          (other than Capitalized Leases); plus
                                           ----

               (f)  the aggregate amount of Non-Discretionary Capital
          Expenditures incurred by the Company or any of its Subsidiaries.

     (k)  Paragraph 10B.  Other Terms. Paragraph 10B is further amended by
amending the definition of "Consolidated Net Income" therein to read in its
entirety as follows:

          "Consolidated Net Income" shall mean, for any period, the net earnings
     (or loss) before dividend requirements for preferred stock of the Company
     and its Subsidiaries, determined in accordance with GAAP on a Consolidated
     basis; provided, however, that Consolidated Net Income shall not include:
            --------  -------

          (a)  the earnings (or loss) of any Person accrued prior to the date
     such Person becomes a Subsidiary or is merged into or consolidated with the
     Company or any of its Subsidiaries;

          (b)  the earnings (or loss) of any Person (other than a Subsidiary) in
     which the Company or any of its Subsidiaries has an ownership interest;
     provided, however, that (i) Consolidated Net Income shall include amounts
     --------  -------
     in respect of the earnings of such Person when actually received in cash by
     the Company or such Subsidiary in the form of dividends or similar
     Distributions and (ii) Consolidated Net Income shall be reduced by the
     aggregate amount of all Investments, regardless of the form thereof, made
     by the Company or any of its Subsidiaries in such Person for the purpose of
     funding any deficit or loss of such person;

          (c)  all amounts included in computing such net earnings (or loss) in
     respect of the write-up of any asset or the retirement of any Indebtedness
     or equity at less than face value after April 30, 1998;

          (d)  extraordinary and nonrecurring gains;

          (e)  the earnings of any Subsidiary to the extent the payment of such
     earnings in the form of a Distribution or repayment of Indebtedness to the
     Company or a Wholly Owned Subsidiary is not permitted, whether on account
     of any Charter or By-law restriction, any agreement, instrument, deed or
     lease or any law, statute, judgment, decree or governmental order, rule or
     regulation applicable to such Subsidiary;

                                       7
<PAGE>

          (f)  any after-tax gains or losses attributable to returned surplus
     assets of any Plan; and

          (g)  any non-cash increases or reductions in the value of Minimum
     Petroleum Products Inventory Requirements.

     (l)  Paragraph 10B.  Other Terms. Paragraph 10B is further amended by
adding thereto, in the appropriate alphabetical order the following new
definitions:

          "Discretionary Capital Expenditures" shall mean Capital Expenditures
     relating to the construction of new property, additions to existing
     property and/or the acquisition of assets.

          "Non-Discretionary Capital Expenditures" shall mean Capital
     Expenditures incurred to maintain property, plant and equipment of the
     Company and its Subsidiaries in accordance with applicable environmental
     laws and other applicable regulations and all other Capital Expenditures
     that are not Discretionary Capital Expenditures.

          "Note Asset Sale Prepayment Amount" shall have the meaning specified
     in paragraph 4A(3).

2.   Consent of Guarantors.  Each Guarantor under the Guarantee contained in
paragraph 11 of the Agreement hereby consents to this letter amendment and
hereby confirms and agrees that such Guarantee is, and shall continue to be, in
full force and effect and is hereby confirmed and ratified in all respects
except that, upon the effectiveness of, and on and after the date of, the letter
amendment, all references in such Guarantee to the Agreement, "thereunder",
"thereof", or words of like import referring to the Agreement shall mean the
Agreement as amended by this letter amendment.

3.   Representations and Warranties.  In order to induce you to enter into this
letter amendment, each of the Obligors hereby represents and warrants that: (a)
each of the representations and warranties contained in paragraph 8 of the
Agreement is true and correct on and as of the date hereof, except to the extent
of changes caused by the transactions herein contemplated; (b) the counterpart
of the amendment to the Bank Agreement furnished by the Company to the
Purchasers and reflecting amendments to the Bank Agreement that are in substance
parallel to those in this letter amendment is true and complete; and (c) there
has been no payment of any amount and no increase in, or additional types of,
the rate of interest, breakage costs or any other fees (other than (i) the
0.125% fee described in section 6(c) of the amendment of the Bank Agreement
furnished to the Purchasers pursuant to the foregoing clause (b) and (ii)
compensation to the Bank Agent previously disclosed by the Company to the
Purchasers), costs, expenses or other amounts payable with respect to the Bank
Agreement in consideration of the amendment to the Bank Agreement described in
the foregoing clause (b).

                                       8
<PAGE>

4.   Miscellaneous.

     (a)  Effect on Agreement.  On and after the effective date of this letter
amendment, each reference in the Agreement to "this Agreement", "hereunder",
"hereof", or words of like import referring to the Agreement, each reference in
the Notes to "the Agreement", "thereunder", "thereof", or words of like import
referring to the Agreement, and each reference in the Security Documents to "the
Shelf Agreement" "thereunder", "thereof", or words of like import referring to
the Agreement, shall mean the Agreement as amended by this letter amendment. The
Agreement, as amended by this letter amendment, is and shall continue to be in
full force and effect and is hereby in all respects ratified and confirmed. The
execution, delivery and effectiveness of this letter amendment shall not, except
as expressly provided herein, operate as a waiver of any right, power or remedy
under the Agreement nor constitute a waiver of any provision of the Agreement.
This letter amendment shall be a Loan Document.

     (b)  Counterparts.  This letter amendment may be executed in any number of
counterparts (including those transmitted by facsimile) and by any combination
of the parties hereto in separate counterparts, each of which counterparts shall
be an original and all of which taken together shall constitute one and the same
letter amendment. Delivery of this letter amendment may be made by facsimile
transmission of a duly executed counterpart copy hereof.

     (c)  Effectiveness.  This letter amendment shall become effective as of the
date first above written when and if each of the conditions set forth in this
subparagraph (c) shall have been satisfied.

          (I)   Executed Counterparts.  Counterparts of this letter amendment
     shall have been executed by the Company, each Guarantor and you.

          (II)  No Default or Event of Default.  After giving effect to the
     amendments effected hereby, no Default or Event of Default under the
     Agreement shall have occurred and be continuing.

          (III) Bank Agreement Modification. The covenants of the Company set
     forth in the Bank Agreement shall have been amended to incorporate
     modifications substantially similar to those contained in this letter
     amendment, all upon terms satisfactory to the Purchasers (and by their
     execution of this letter amendment the Purchasers agree and acknowledge
     that the modifications embodied by the final form of that certain Amendment
     No. 2 to Fourth Amended and Restated Credit Agreement of even date herewith
     furnished to the Purchasers by the Company are satisfactory to them).

                                       9
<PAGE>

          (IV)  Bank Consent.  The Required Lenders under, and as defined in,
     the Bank Agreement shall have consented to the modifications to the
     Agreement effected by this letter amendment.

          (V)   Structuring Fee.  The Company shall have paid to Prudential a
     structuring fee in the amount of 0.125% of the outstanding principal amount
     of the Notes.

     (d)  Expenses.  The Company confirms its agreement, pursuant to paragraph
12B of the Agreement, to pay promptly all expenses of the Purchasers related to
this letter amendment and all matters contemplated by this letter amendment,
including without limitation all fees and expenses of the Purchasers' special
counsel and any local or other counsel retained by the Collateral Agent.

     (e)  Governing Law.  THIS LETTER AMENDMENT SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW
OF THE STATE OF NEW YORK.

     [Remainder of page intentionally left blank; signature pages follows]

                                      10
<PAGE>

          If you agree to the terms and provisions hereof, please evidence your
     agreement by executing and returning a counterpart of this letter amendment
     to TransMontaigne Inc., 370 17th Street, Suite 2750, Denver, Colorado
     80202, Attention of Harold R. Logan, Jr.

                                        Very truly yours,

                                        TRANSMONTAIGNE INC.

                                        By:  /s/ Donald H. Anderson
                                             ------------------------------
                                             Donald H. Anderson, President

                                        Guarantors

                                        TRANSMONTAIGNE PIPELINE INC.
                                        TRANSMONTAIGNE TERMINALING INC.
                                        TRANSMONTAIGNE PRODUCT SERVICES INC.

                                        By:  /s/ Donald H. Anderson
                                             ------------------------------
                                             Donald H. Anderson,
                                             Chief Executive Officer of each
                                             of the foregoing corporations

                                      11
<PAGE>

     Agreed as of the date first above written:

     THE PRUDENTIAL INSURANCE COMPANY
       OF AMERICA

     By:  /s/ Ric E. Abel
          ----------------------------------
               Vice President

     U.S. PRIVATE PLACEMENT FUND

     By:  Prudential Private Placement
          Investors, L.P., Investment Advisor

          By:  Prudential Private Placement
               Investors, Inc., its General Partner

     By:  /s/ Ric E. Abel
          ----------------------------------
               Vice President

                                      12<PAGE>

                                                                  Exhibit 10.12

     THIS WAIVER AND FOURTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
(this "Waiver and Amendment"), dated as of March 30, 2001, is entered into by
       --------------------
and among Katy Industries, Inc., a Delaware corporation (the "Company"), the
                                                              -------
financial institutions from time to time party to the Credit Agreement referred
to below (collectively, the "Banks"; individually, a "Bank"), and Bank of
                             -----                    ----
America, N.A., as letter of credit issuing bank and as administrative agent for
the Banks (in the latter capacity, the "Agent").
                                        -----

                                   RECITALS
                                   --------

     WHEREAS, the Company, the Banks and the Agent are parties to an Amended
and Restated Credit Agreement dated as of December 11, 1998 (as amended by the
First, Second and Third Amendments thereto, the "Credit Agreement"), pursuant to
                                                 ----------------
which the Banks have extended certain credit facilities to the Company;

     WHEREAS, the Company, the Banks and the Agent now wish to amend the Credit
Agreement in certain respects, all as set forth in greater detail below;

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

1.   Defined Terms.  Capitalized terms used herein and not otherwise defined
     -------------
shall have the meanings assigned in the Credit Agreement.

2.   Waiver.
     ------

          (a)  The Banks hereby permanently waive compliance by the Company with
Sections 8.18 ("Minimum Net Worth"), 8.19 ("Maximum Leverage Ratio") and 8.20
("Minimum Fixed Charge Coverage Ratio") of the Credit Agreement for the fiscal
quarter ending March 31, 2001.

          (b)  In respect of any deterioration since September 30, 2000 in the
operations, business, properties, condition (financial or otherwise) or
prospects of the Company or the Company and its Restricted Subsidiaries taken as
a whole, arising in the ordinary course of business, or resulting from any
termination of the Preferred Stock Purchase and Recapitalization Agreement
between the Company and KKTY Acquisition Company, Inc., the Banks hereby agree
to waive until June 30, 2001 any Event of Default under Section 9.1(m) of the
Credit Agreement and any inability to satisfy the condition set forth in Section
5.3(b) of the Credit Agreement.

          (c)  Nothing contained herein shall be deemed a waiver of (or
otherwise affect the Agent's or the Banks' ability to enforce) and Default or
Event of Default arising at any time under any covenant for any fiscal quarter
as to which compliance is not waived herein or arising under any financial
covenant contained in the Credit Agreement.
<PAGE>

3.   Amendments to Credit Agreement.  The Credit Agreement is hereby amended by
     ------------------------------
inserting the blacklined changes reflected on Exhibit A  attached hereto.

4.   Representations and Warranties.  The Company hereby represents and warrants
     ------------------------------
to the Agent and the Banks as follows:

          (a)  No Default or Event of Default has occurred and is continuing.

          (b)  The execution, delivery and performance by the Company of this
Waiver and Amendment has been duly authorized by all necessary corporate and
other action and does not and will not require any registration with, consent or
approval of, notice to or action by, any Person (including any Governmental
Authority) in order to be effective and enforceable. The Credit Agreement as
amended by this Waiver and Amendment constitutes a legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its respective terms, without defense, counterclaim or offset.

          (c)  All representations and warranties of the Company contained in
the Credit Agreement (other than that contained in Section 6.11(b) thereof, as
to which no representation and warranty is made) are true and correct as though
made on and as of the Perfection Date (except to the extent such representations
and warranties specifically relate to an earlier date, in which case they were
true and correct as of such earlier date) and all representations of each
Subsidiary party to any Collateral Document are true and correct as though made
on and as of the Perfection Date (except to the extent such representations and
warranties specifically relate to an earlier date, in which case they were true
and correct as of such earlier date).

          (d)  The Company is entering into this Waiver and Amendment on the
basis of its own investigation and for its own reasons, without reliance upon
the Agent, the Banks or any other person.

5.   Effective Date.  This Waiver and Amendment will become effective on the
     --------------
Business Day (which must be a Business Day prior to March 31, 2001) (the
"Effective Date") on which the Agent shall have received all of the following,
---------------
in form and substance satisfactory to the Agent, and, to the extent requested by
the Agent, in sufficient copies for each Bank:

     (a)  Signature Pages.  From the Company and the Required Banks, a duly
          ---------------
executed original or facsimile of this Waiver and Amendment and from each
Guarantor, a duly executed original or facsimile of the Guarantor
Acknowledgement and Consent attached hereto;

     (b)  Back-Up Financing.  The Company shall have engaged the business credit
          -----------------
division of Bank of America, N.A. to begin due diligence with respect to back-up
financing for the Company to be available to the Company in the event the
Preferred Stock Purchase and Recapitalization Agreement among KKTY Acquisition
Company, Inc. and the Company is terminated.
<PAGE>

     (c)  Collateral Documents.
          --------------------

          (i)   Security Agreement, duly executed by each Person party thereto;

          (ii)  each Pledge Agreement and each Foreign Pledge Agreement as shall
have been requested to be delivered by the Agent, duly executed by each Person
party thereto;

          (iii) each Mortgage, duly executed by each Person party thereto;

          (iv)  Guaranties, duly executed by each of the following (1) Contico
International, L.L.C, (2) Wabash Holding Corp., and (3) Thorsen Tools, Inc.

     (d)  Additional Collateral Documents.
          -------------------------------

          (i)   UCC-1 and UCC-2 financing statements executed by each Debtor, to
be filed, registered or recorded as necessary and advisable to perfect the Liens
of the Agent for the benefit of the Banks in accordance with applicable law;

          (ii)  written advice relating to such Lien and judgment searches as
the Agent shall have reasonably requested with respect to any of the Collateral,
and such termination statements or other documents, including payoff letters, as
may be necessary to release any Lien in favor of any Person not otherwise
permitted by Section 8.1 of the Credit Agreement;

          (iii) evidence that all other actions necessary or, in the reasonable
opinion of the Agent, desirable to perfect and protect the first priority
security interest, subject to Permitted Liens, created by the Collateral
Documents have been taken;

          (iv)  evidence that adequate arrangements have been made for payment
by the Company of any filing or recording tax or fee in connection with the
Mortgages;

          (v)   to the extent requested by the Agent, with respect to any
Mortgaged Property , an A.L.T.A. mortgagee policy or policies of title insurance
or a binder or binders issued by a title insurance company reasonably
satisfactory to the Agent insuring or undertaking to insure, in the case of a
binder, that the applicable Mortgages create and constitute valid Liens against
such Mortgaged Property in favor of the Agent, subject only to exceptions
reasonably acceptable to the Agent and the Required Banks, with such
endorsements and affirmative insurance as the Agent or the Required Banks may
reasonably request;

          (vi)  evidence that the Agent has been named as loss payee under all
policies of casualty insurance, and as additional insured under all policies of
liability insurance, required by the Collateral Documents;
<PAGE>

          (vii)  proof of payment of all title insurance premiums, documentary
stamp or intangible taxes, recording fees and mortgage taxes payable in
connection with the recording of the Mortgages or the issuance of the title
insurance policies, including sums, if any, due in connection with any future
advances which may be in the form of disbursement instructions and associated
payoff letters approved by the relevant title insurers and the Agent; and

          (viii) all certificates and instruments representing the Pledged
Collateral, and such stock transfer powers executed in blank as the Agent may
specify;

          (ix)   to the extent requested by the Agent, a copy of a certification
by a registered land surveyor or other engineer reasonably satisfactory to the
Agent that the Mortgaged Property (other than any Mortgaged Property
constituting a leasehold interest) is not located in a "Special Flood Hazard
Area";

     (e)  Resolutions; Incumbency.
          -----------------------

          (i)    Copies of the resolutions of the board of directors of each
Person party to any Collateral Document authorizing the transactions
contemplated thereby, certified as of the Perfection Date by the Secretary or an
Assistant Secretary of such Person; and

          (ii)   A certificate of the Secretary or Assistant Secretary of each
Person party to any Collateral Document certifying the names and true signatures
of the officers of such Person authorized to execute, deliver and perform, as
applicable, the Collateral Documents to be delivered by it;

     (f)  Organization Documents; Good Standing.
          -------------------------------------

          (i)    the articles or certificate of incorporation and the bylaws, or
operating agreement or partnership agreement, as applicable, of each Person
party to any Collateral Document as in effect on the Perfection Date, certified
by the Secretary or Assistant Secretary of such Person, as of the Perfection
Date; and

          (ii)   a good standing and tax good standing certificate for each
Person party to any Collateral Document, issued by the Secretary of State (or
similar, applicable Governmental Authority) of its state of incorporation or
organization and each state where such Person is qualified to do business as a
foreign corporation or partnership as of a date reasonably close to the
Perfection Date;

     (g)  Legal Opinions.  An opinion of Schiff Hardin & Waite, counsel to the
          --------------
Company and each Subsidiary of the Company party to any Loan Document, together
with an opinion of any other law firm acceptable to the Bank as shall be
necessary to render an opinion or opinions covering the matters set forth in
Exhibit H attached to the Credit Agreement, addressed to the Agent and the
Banks;
<PAGE>

     (h)  Payment of Fees.  Evidence of payment by the Company of all accrued
          ---------------
and unpaid fees, costs and expenses to the extent then due and payable on the
Effective Date, together with reasonable Attorney Costs of the Agent to the
extent invoiced prior to or on the Effective Date, plus such additional amounts
of reasonable Attorney Costs as shall constitute the Agent's reasonable estimate
of Attorney Costs incurred or to be incurred by it through the closing
proceedings (provided that such estimate shall not thereafter preclude final
settling of accounts between the Company and the Agent); including any such
costs, fees and expenses arising under or referenced in Section 11.4 of the
Credit Agreement and 7(g) hereof;

     (i)  Certificate.  A certificate signed by a Responsible Officer, dated as
          -----------
of the Effective Date, stating that:

          (i)   the representations and warranties made pursuant to Section 4
hereof are true and correct on and as of such date, as though made on and as of
such date (unless specifically stated to be made as of an earlier date); and

          (ii)  no Default or Event of Default exists;

     (j)  Other Documents.  Such other approvals, opinions, documents or
          ---------------
materials as the Agent or the Required Banks may reasonably request.

6.   Reservation of Rights.  The Company acknowledges and agrees that neither
     ---------------------
the execution and delivery by the Agent and the Banks of this Waiver and
Amendment shall be deemed (i) to create a course of dealing or otherwise
obligate the Agent or the Banks to forbear or execute similar waivers under the
same or similar circumstances in the future, or (ii) to waive, relinquish or
impair any right of the Agent or the Banks to receive any indemnity or similar
payment from any person or entity as a result of any matter arising from or
relating to the defaults waived hereunder.

7.   Miscellaneous.
     -------------

     (a)  Except as herein expressly amended, all terms, covenants and
provisions of the Credit Agreement are and shall remain in full force and effect
and all references therein to such Credit Agreement shall henceforth refer to
the Credit Agreement as amended by this Waiver and Amendment. This Waiver and
Amendment shall be deemed incorporated into, and a part of, the Credit
Agreement.

     (b)  This Waiver and Amendment shall be binding upon and inure to the
benefit of the parties hereto and thereto and their respective successors and
assigns. No third party beneficiaries are intended in connection with this
Waiver and Amendment.

     (c)  This Waiver and Amendment shall be governed by and construed in
accordance with the law of the State of New York.
<PAGE>

     (d)  This Waiver and Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument.

     (e)  This Waiver and Amendment, together with the Credit Agreement,
contains the entire and exclusive agreement of the parties hereto with reference
to the matters discussed herein and therein. This Waiver and Amendment
supersedes all prior drafts and communications with respect thereto. This Waiver
and Amendment may not be amended except in accordance with the provisions of
Section 11.1 of the Credit Agreement.

     (f)  If any term or provision of this Waiver and Amendment shall be deemed
prohibited by or invalid under any applicable law, such provision shall be
invalidated without affecting the remaining provisions of this Waiver and
Amendment or the Credit Agreement, respectively.

     (g)  Company covenants to pay to or reimburse the Agent, upon demand, for
all costs and expenses (including allocated costs of in-house counsel) incurred
in connection with the development, preparation, negotiation, execution and
delivery of this Waiver and Amendment and the administration of the existing
defaults, including without limitation appraisal, audit, search and filing fees
incurred in connection therewith.
<PAGE>

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

                                        KATY INDUSTRIES, INC.

                                        By:________________________________
                                        Name:
                                        Title:

                                        BANK OF AMERICA, N.A., as Agent and
                                        as a Bank

                                        By:________________________________
                                        Name:
                                        Title:

                                        LASALLE BANK NATIONAL ASSOCIATION,
                                        as Managing Agent and a Bank

                                        By:________________________________
                                        Name:
                                        Title:

                                        KEYBANK NATIONAL ASSOCIATION,
                                        as a Bank

                                        By:________________________________
                                        Name:
                                        Title:

                                        FIRSTSTAR BANK, N.A., as a Bank

                                        By:________________________________
                                        Name:
                                        Title:
<PAGE>

                                        THE NORTHERN TRUST COMPANY,
                                        as a Bank

                                        By:________________________________
                                        Name:
                                        Title:

                                        WELLS FARGO BANK, N.A., as a Bank

                                        By:________________________________
                                        Name:
                                        Title:

                                        UNION BANK OF CALIFORNIA, N.A.,
                                        as a Bank

                                        By:________________________________
                                        Name:
                                        Title:

                                        UNION PLANTERS BANK, N.A.,
                                        as a Bank

                                        By:________________________________
                                        Name:
                                        Title:

                                        U.S. BANK NATIONAL ASSOCIATION,
                                        as a Bank

                                        By:________________________________
                                        Name:
                                        Title:
<PAGE>

                           GUARANTOR ACKNOWLEDGMENT
                                  AND CONSENT

     The undersigned, each a Guarantor with respect to the Company's obligations
to the Agent and the Banks under the Credit Agreement, each hereby (i)
acknowledge and consent to the execution, delivery and performance by Company of
the foregoing Waiver and Fourth Amendment to Credit Agreement ("Waiver and
                                                                ----------
Amendment"), (ii) agrees that Paragraph 18 of its respective guaranty shall be
---------
amended to read as follows:

"18. (a)  THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NEW YORK.

     (b)  ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY OR ANY
OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF
THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, THE GUARANTOR CONSENTS, FOR ITSELF AND IN RESPECT OF
ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS.  THE GUARANTOR
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
                           --------------------
HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT
OF THIS GUARANTY OR ANY DOCUMENT RELATED HERETO OR THERETO.  THE GUARANTOR
WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE
MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW."

and (iii) reaffirms and agrees that the respective guaranty to which the
undersigned is party and all other documents and agreements executed and
delivered by the undersigned to the Agent and the Banks in connection with the
Credit Agreement are, with the amendment set forth above, in full force and
effect, without defense, offset or counterclaim. (Capitalized terms used herein
have the meanings specified in the Waiver and Amendment.)
<PAGE>

     IN WITNESS WHEREOF, each Guarantor hereto has caused its duly authorized
officers to execute and deliver this acknowledgement and consent as of March
___, 2001.

                                        Aetna Liquidating Company,
                                        as Guarantor

                                        By:___________________________________
                                            Name:
                                            Title:

                                        American Gage & Machine Company,
                                        as Guarantor

                                        By:___________________________________
                                            Name:
                                            Title:

                                        Bach Simpson, Inc.,
                                        as Guarantor

                                        By:___________________________________
                                            Name:
                                            Title:

                                        Chatham Resource Recovery Systems,
                                        Inc., as Guarantor

                                        By:___________________________________
                                            Name:
                                            Title:
<PAGE>

                                        Duckback Products, Inc.,
                                        as Guarantor

                                        By:___________________________________
                                            Name:
                                            Title:

                                        Fulton Iron Works Company,
                                        as Guarantor

                                        By:___________________________________
                                            Name:
                                            Title:

                                        GC/Waldom Electronics, Inc. (formerly
                                        known as GC Thorsen, Inc.), as Guarantor

                                        By:___________________________________
                                            Name:
                                            Title:

                                        Glit/DISCO, Inc.,
                                        as Guarantor

                                        By:___________________________________
                                            Name:
                                            Title:
<PAGE>

                                        Glit/Gemtex, Inc.,
                                        as Guarantor

                                        By:___________________________________
                                            Name:
                                            Title:

                                        Hallmark Holdings, Inc.,
                                        as Guarantor

                                        By:___________________________________
                                            Name:
                                            Title:

                                        Hamilton Precision Metals, Inc.,
                                        as Guarantor

                                        By:___________________________________
                                            Name:
                                            Title:

                                        Katy International, Inc. (formerly named
                                        HMO, Inc.), as Guarantor

                                        By:___________________________________
                                            Name:
                                            Title:
<PAGE>

                                        Katy-Seghers, Inc.,
                                        as Guarantor

                                        By:___________________________________
                                            Name:
                                            Title:

                                        K-S Energy Corp.,
                                        as Guarantor

                                        By:___________________________________
                                            Name:
                                            Title:

                                        Panhandle Industrial Company, Inc.,
                                        as Guarantor

                                        By:___________________________________
                                            Name:
                                            Title:

                                        PTR Machine Corp. (formerly known as
                                        Peters Machinery Company), as Guarantor

                                        By:___________________________________
                                            Name:
                                            Title:
<PAGE>

                                        Savannah Energy Systems Company,
                                        as Guarantor

                                        By:___________________________________
                                            Name:
                                            Title:

                                        Wilen Products, Inc.,
                                        as Guarantor

                                        By:___________________________________
                                            Name:
                                            Title:

                                        W.J. Smith Wood Preserving Company,
                                        as Guarantor

                                        By:___________________________________
                                            Name:
                                            Title:

                                        Woods Industries, Inc.,
                                        as Guarantor

                                        By:___________________________________
                                            Name:
                                            Title:
<PAGE>

                                        WP Liquidating Corp.,
                                        as Guarantor

                                        By:___________________________________
                                            Name:
                                            Title:

                                        HPMNC, Inc.,
                                        as Guarantor

                                        By:___________________________________
                                            Name:
                                            Title:

                                        HPM of Pennsylvania, Inc.,
                                        as Guarantor

                                        By:___________________________________
                                            Name:
                                            Title:

                                        Hamilton Metals, L.P.,
                                        as Guarantor

                                        By:___________________________________
                                            Name:
                                            Title:
<PAGE>

                                 Schedule 6.22
                                  (Mortgages)

     Santa Fe Springs, California
     Winters, Texas
     Rockford, Illinois
     Wrens, Georgia
     Lancaster, Pennsylvania
     Pineville, North Carolina
<PAGE>

                               Schedule 6.16(PD)
                    (Subsidiaries and Minority Investments)

Part A - Subsidiaries
---------------------

Aetna Liquidating Company
AGM Industries, Inc
All Risk Management Services, Inc.
American Gage & Machine Company
Ashford Holding Corp.
Ashford Reinsurance Intermediaries Corp
Bach Simpson, Inc.
Bluff City Building Corp.
Capacity Managers International, Inc. (NY)
Capacity Managers International, Inc. (PA)
Chatham Resource Recovery Systems, Inc.
Consolidated Pool Mart, Inc.
Contico International, L.L.C.
Contico Manufacturing, Ltd.
Contico Manufacturing (Ireland), Ltd.
Duckback Products, Inc.
E-R Liquidating Company, Inc.
Fulton Iron Works Company
GC/Waldom Electronics, Inc.
GFD Corporation
Glit United Kingdom, Ltd.
Glit, Inc.
Glit/Disco, Inc.
Glit/Gemtex, Inc.
Glit/Gemtex, Ltd.
Hallmark Holdings, Inc.
Hamilton Precision Metals, Inc.
HPMNC, Inc.
HPM of Pennsylvania, Inc.
Hamilton Metals, L.P.
Hermann Lowenstein, Inc.
JEI Liquidating, Inc.
K-S Energy Corp.
Katy-Seghers, Inc.
Katy-Teweh Petroleum Company
Katy International, Inc.
Katy International, Inc. f/k/a HMO, Inc.
Katy Industries, Inc.
Katy Oil Company of Indonesia
LaBour Holdings, Ltd.
Microtron Abrasives, Inc.
<PAGE>

Panhandle Industrial Company, Inc.
Primary Coatings, Inc.
PTR Machinery Corp.
Process Metals Company
Savannah Energy Construction Company, Inc.
Savannah Energy Systems Company
Simpson Electric Building Company
Spiral Step-Tool Company
Sterling-Salem Corporation
Thorsen Tools, Inc.
Trans-Continental Leathers, Inc.
Wabash Holding Corp.
W.J. Smith Wood Preserving Company
WP Liquidating Corp.
Wilen Products, Inc.
Woods Industries, Inc.
Woods Industries (Canada), Inc.

Part B - Investments in Unconsolidated Subsidiaries
---------------------------------------------------

Sahlman Holding Company, Inc., f/k/a Bee Gee Holding Company, Inc. - 43%
interest

Part C - Immaterial Subsidiaries
--------------------------------

AGM Industries, Inc                             $0
All Risk Management Services, Inc.              $0
Ashford Holding Corp.                           $0
Ashford Reinsurance Intermediaries Corp         $0
Bach Simpson, Inc.                              $0
Bluff City Building Corp.                       $0
Capacity Managers International, Inc. (NY)      $0
Capacity Managers International, Inc. (PA)      $0
Consolidated Pool Mart, Inc.                    $0
Contico Manufacturing (Ireland), Ltd.           $0
E-R Liquidating Company, Inc.                   $0
GFD Corporation                                 $0
Glit United Kingdom, Ltd.                       $0
Glit, Inc.                                      $0
Hermann Lowenstein, Inc.                        $0
JEI Liquidating, Inc.                           $0
Katy International, Inc. f/k/a HMO, Inc.        $0
Katy-Teweh Petroleum Company                    $0
LaBour Holdings, Ltd.                           $0
Microtron Abrasives, Inc.                       $0
<PAGE>

Primary Coatings, Inc.                          $0
Process Metals Company                          $0
Savannah Energy Construction Company, Inc.      $0
Simpson Electric Building Company               $0
Spiral Step-Tool Company                        $0
Sterling-Salem Corporation                      $0
Trans-Continental Leathers, Inc.                $0
Wabash Holding Corp.                            $0
W.J. Smith Wood Preserving Company              $247,163
WP Liquidating Corp.                            $0
<PAGE>

                                 Schedule 6.22
                              (Filing Locations)

     Aetna Liquidating Company
     -------------------------
          Delaware
          Colorado

     American Gage & Machine Company
     -------------------------------
          Illinois
          Indiana
          Colorado

     Chatham Resource Recovery Systems, Inc.
     ---------------------------------------
          Chatham County, Georgia
          Colorado

     Contico International, L.L.C.
     -----------------------------
          California
          Texas
          Missouri (Central)
          St. Louis County, Missouri

     Wabash Holding Corp.
     --------------------
          Indiana
          Colorado

     Duckback Products, Inc.
     -----------------------
          California

     Fulton Iron Works Company
     -------------------------
          Delaware
          Colorado

     GC/Waldom Electronics, Inc.
     ---------------------------
          California
          Illinois

     Glit/DISCO, Inc.
     ----------------
          California
          Henry County, Georgia
          Texas

     Glit/Gemtex, Inc.
     -----------------
          New York (Central)
          Erie County, New York
<PAGE>

     Hallmark Holdings, Inc.
     -----------------------
          California
          Florida
          Jefferson County, Georgia
          Massachusetts (Central)
          Lawrence City Clerk, Massachusetts
          North Carolina (Central)
          Mecklenburg County, North Carolina
          South Carolina

     Hamilton Precision Metals, Inc.
     -------------------------------
          Pennsylvania (Central)
          Lancaster County Prothonotary, Pennsylvania
          Utah
          Colorado

     HPMNC, Inc.
     -----------
          Delaware
          Pennsylvania (Central)
          Lancaster County Prothonotary, Pennsylvania

     HPM Pennsylvania, Inc.
     ----------------------
          Pennsylvania (Central)
          Lancaster County Prothonotary, Pennsylvania

     Hamilton Metals, L.P.
     ---------------------
          Pennsylvania
          Lancaster County Prothonotary, Pennsylvania

     K-S Energy Corp.
     ----------------
          Chatham County, Georgia
          Colorado

     Katy-Seghers, Inc.
     ------------------
          Delaware
          Colorado

     Katy International, Inc.
     ------------------------
          Delaware
          Colorado

     Katy Industries, Inc.
     ---------------------
          Colorado

     Panhandle Industrial Company, Inc.
     ----------------------------------
          Delaware
          Colorado
<PAGE>

     PTR Machine Corp.
     -----------------
          Illinois
          Colorado

     Savannah Energy Systems Company
     --------------------------------
          Chatham County, Georgia

     Thorsen Tools, Inc.
     -------------------
          Delaware
          Indiana

     Wilen Products, Inc.
     --------------------
          Arizona
          Fulton County, Georgia

     Woods Industries, Inc.
     ----------------------
          Delaware
          Indiana

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