EXHIBIT (b)(2)
[LETTERHEAD OF KOHLBERG & COMPANY]
March 27, 2001
Board of Directors
Katy Industries, Inc.
0000 X. Xxxxxxxx Xxx, Xxxxx 000
Xxxxxxxxx, XX 00000-0000
Ladies and Gentlemen:
Reference is made to the Preferred Stock Purchase and Recapitalization
Agreement (the "Definitive Agreement") by and among KKTY Holding Company, L.L.C.
("Newco") and Katy Industries, Inc. (the "Company"). This letter evidences the
commitment of Kohlberg Investors IV, L.P., Xxxxxxxx XX investors IV, L.P.,
Kohlberg Partners IV, L.P., Kohlberg Offshore Investors IV, L.P., (collectively
"Kohlberg Fund IV") to purchase up to $60 million of common stock or other
securities in Newco. The proceeds of such investment will be used to purchase a
combination of existing outstanding common stock and newly-issued convertible
preferred stock of the Company in connection with a partial recapitalization of
the Company. Kohlberg Fund IV will purchase newly-issued securities of Newco for
cash, using its committed pool of $425 million of equity capital.
The obligation of Kohlberg Fund IV to purchase securities issued by
Newco is subject to the satisfaction of the terms and conditions set forth in
the Definitive Agreement. Kohlberg Fund IV reserves the right to allow other
investors to participate in the purchase of securities from Newco, provided that
Newco receives not less than $60 million in cash funding, and that Kohlberg Fund
IV directly or indirectly has economic and voting control of Newco.
Please do not hesitate to contact Xxxxx Xxxxxxxx or me if you would like
to discuss our commitment to this transaction.
Sincerely,
/s/ Xxxxxxxxxxx Xxxxxxxx
------------------------
Xxxxxxxxxxx Xxxxxxxx
Principal
