EXHIBIT (e)(3)
EXECUTION COPY
THIRD AMENDMENT TO RIGHTS AGREEMENT
This Third Amendment to Rights Agreement (the "Amendment"), dated as
of March 30, 2001, is entered into by and between Katy Industries, Inc., a
Delaware corporation (the "Company"), and La Salle Bank National Association
(f/k/a La Salle National Bank), a national banking association, as Rights Agent
(the "Rights Agent").
WHEREAS, the Company and the Rights Agent are parties to a Rights
Agreement, dated as of January 13, 1995, as amended (the "Agreement");
WHEREAS, the Company wishes to amend the Agreement; and
WHEREAS, Section 26 of the Agreement provides, among other things,
that prior to the Distribution Date the Company may, and the Rights Agent shall,
if the Company so directs, supplement or amend any provision of the Agreement
without the approval of any holders of certificates representing shares of
Company Common Stock.
NOW, THEREFORE, the Company and the Rights Agent hereby amend the
Agreement as follows:
1. Capitalized terms used in this Amendment without definition shall
have the meanings given to them in the Agreement.
2. Section 1(j) of the Agreement is hereby amended by:
a. deleting the word "and" at the end of subparagraph (iv);
b. adding, immediately following subparagraph (iv), a new
subparagraph (v), to read as follows:
"(v) any member of the KKTY Group, provided, however, that all of the
KKTY Group shall immediately and thereafter cease to be an Exempt Person if
the Recapitalization does not occur and the Purchase Agreement is
terminated; and"
c. renumbering subparagraph (v) to become subparagraph (vi).
3. Section 1 of the Agreement is hereby further amended by:
a. adding, immediately after the existing Section 1(l), the
following subsection (m) to read as follows:
"(m) "KKTY Group" shall mean KKTY Holdings, Inc., a Delaware
corporation, and all Affiliates and all Associates of KKTY Holdings, Inc."
b. adding, immediately after the existing Section 1(m), the
following subsection (o) to read as follows:
"(o) "Permitted Event" shall mean the execution, delivery and
performance under, or consummation of any one or more transactions contemplated
by, the Purchase Agreement, including, without limitation, the purchase of
Company Common Stock by way of a tender offer, the issuance of Company Common
Stock upon conversion of the preferred stock issued pursuant to the Purchase
Agreement, entry into the Voting Agreement (as defined in the Purchase
Agreement), and entry into any other voting agreement with any stockholder of
the Company in connection with the Recapitalization."
c. adding, immediately after the existing Section 1(n), the
following subsection (q) to read as follows:
"(q) "Purchase Agreement" shall mean the Preferred Stock Purchase
and Recapitalization Agreement, dated as of March __, 2001, as the same may be
amended from time to time, by and among KKTY Holdings, Inc. and the Company."
d. adding, immediately after the existing Section 1(o), the
following subsection (s) to read as follows:
"(s) "Recapitalization" shall mean the purchase by KKTY Holdings,
Inc. of Company Common Stock, and of newly issued preferred stock of the
Company, pursuant to the Purchase Agreement."
e. redesignating existing subsections (n) through (z) as
follows:
existing subsection (n) becomes new subsection (p);
existing subsection (o) becomes new subsection (r);
existing subsection (p) becomes new subsection (t);
existing subsection (q) becomes new subsection (u);
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existing subsection (r) becomes new subsection (v);
existing subsection (s) becomes new subsection (w);
existing subsection (t) becomes new subsection (x);
existing subsection (u) becomes new subsection (y);
existing subsection (v) becomes new subsection (z);
existing subsection (w) becomes new subsection (aa);
existing subsection (x) becomes new subsection (bb);
existing subsection (y) becomes new subsection (cc);
existing subsection (z) becomes new subsection (dd);
4. Existing Section 1(v) is hereby amended to add the following at
the end thereof immediately prior to the period:
"(other than a public announcement that an Acquiring Person has become
such pursuant to the Recapitalization or any other Permitted Event)".
5. Section 3(a) of the Agreement is hereby amended to add the
following at the end of the first sentence thereof immediately prior to the
period:
"; provided, however, that, notwithstanding anything in this
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Agreement to the contrary, the acquisition of beneficial ownership of shares of
Company Common Stock pursuant to the Recapitalization or any other Permitted
Event shall not constitute or result in the occurrence of a Distribution Date".
6. Section 11(a)(ii) of the Agreement is amended to add the
following at the end thereof immediately prior to the period:
"; provided, however, that, notwithstanding anything in this Agreement
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to the contrary, the acquisition of beneficial ownership of shares of
Company Common Stock pursuant to the Recapitalization or any other
Permitted Event shall not constitute or result in the occurrence of a
Section 11(a)(ii) Event".
7. Section 13(a) of the Agreement is amended to add the following at
the end thereof immediately prior to the period:
"; provided, however, that, notwithstanding anything in this Agreement
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to the contrary, the acquisition of beneficial ownership of Common Stock of
the Company pursuant to the Recapitalization and the consummation of any
one or more of the Permitted Events shall not constitute or result in the
occurrence of a Section 13 Event".
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8. The term "Agreement" as used in the Agreement shall be deemed to
refer to the Agreement as amended hereby.
9. Except as expressly amended hereby, all of the terms and
provisions of the Agreement shall continue and remain in full force and effect,
and each party confirms, ratifies and approves each and every of its obligations
under the Agreement, as amended by this Amendment.
10. This Amendment shall be governed by, and construed in accordance
with, the laws of the State of Delaware applicable to contracts executed in and
to be performed entirely in such state.
11. This Amendment may be executed (including by facsimile) in one or
more counterparts, and by the different parties hereto in separate counterparts,
each of which, when executed, shall be deemed to be an original, but all of
which taken together shall constitute one and the same instrument.
12. If any term, provision, covenant or restriction of this Amendment
is held by a court of competent jurisdiction or other authority to be invalid,
illegal, or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Amendment, and of the Agreement, shall remain in full force
and effect and shall in no way be affected, impaired or invalidated.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed as of this 30th day of March, 2001.
KATY INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: President and Chief Executive
Officer
LA SALLE BANK NATIONAL ASSOCIATION, as
Rights Agent
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxx
Title: Assistant Vice President
The undersigned, being a duly elected, qualified and acting officer of
the Company, hereby certifies to the Rights Agent that the foregoing Amendment
is in compliance with the terms of Section 26 of the Agreement.
IN WITNESS WHEREOF, the undersigned has executed this certificate as
of March 29, 2001.
KATY INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President and Chief Executive
Officer
