EXHIBIT 10.1

AMENDMENT NO. 8
TO
CREDIT AGREEMENT

THIS AMENDMENT NO. 8 TO CREDIT AGREEMENT, is entered into as of June 29, 2007
(the “Amendment”), by and among P&F INDUSTRIES, INC., a Delaware corporation
(“P&F”), FLORIDA PNEUMATIC MANUFACTURING CORPORATION, a Florida corporation
(“Florida Pneumatic”), EMBASSY INDUSTRIES, INC., a New York corporation
(“Embassy”), GREEN MANUFACTURING, INC., a Delaware corporation (“Green”),
COUNTRYWIDE HARDWARE, INC., a Delaware corporation (“Countrywide”), NATIONWIDE
INDUSTRIES, INC., a Florida corporation (“Nationwide”), WOODMARK INTERNATIONAL,
L.P., a Delaware limited partnership (“Woodmark”), PACIFIC STAIR PRODUCTS, INC.,
a Delaware corporation (“Pacific”), WILP HOLDINGS, INC., a Delaware corporation
(“WILP”), CONTINENTAL TOOL GROUP, INC., a Delaware corporation (“Continental”)
and HY-TECH MACHINE, INC., a Delaware corporation (“Hy-Tech”; and collectively
with P&F, Florida Pneumatic, Embassy, Green, Countrywide, Nationwide, Woodmark,
Pacific, WILP and Continental, the “Co-Borrowers”), CITIBANK, N.A. and HSBC BANK
USA, NATIONAL ASSOCIATION (formerly known as HSBC Bank USA) (collectively, the
“Lenders”) and CITIBANK, N.A., as Administrative Agent for the Lenders.

BACKGROUND

The Co-Borrowers, the Lenders and the Administrative Agent are parties to a
Credit Agreement, dated as of June 30, 2004 (as same has been and may be further
amended, restated, supplemented or modified, the “Credit Agreement”), pursuant
to which the Lenders provide the Co-Borrowers with certain financial
accommodations.

The Original Co-Borrowers have requested, and the Administrative Agent and the
Lenders have agreed, subject to the terms and conditions of this Amendment, to
amend certain provisions of the Credit Agreement and the other Loan Documents,
as herein set forth.  Capitalized terms used herein and not defined herein shall
have the meanings given to them in the Credit Agreement.

Accordingly, in consideration of the premises and of the mutual covenants and
agreements hereinafter set forth, the parties hereto agree as follows:

ARTICLE I.
Amendments to Credit Agreement.

Section 1.1.            Clause “(d)” of the definition of Consolidated EBITDA is
hereby amended and restated in its entirety to provide as follows:

“(d) non-cash losses resulting from a write-down or write-off of goodwill or
intangible assets in the context of an acquisition,”

Section 1.2.            The following definitions in Section 1.01 of the Credit
Agreement are hereby amended and restated in their entirety to provide as
follows:

“Borrowing Base” shall mean as of any Borrowing Date an amount equal to the sum
of (a) 80% of the value of the Obligor’s Eligible Accounts Receivable, and
(b) the lesser of (i) 50% of the aggregate value of the Obligor’s Eligible
Inventory, and (ii) $8,000,000; provided, however, such percentages and the
foregoing inventory limitation may be revised from time to time solely by the
Required Lenders in their Permitted Discretion

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(i) after review of each field audit of the Obligor’s receivables and inventory,
upon 30 days’ prior written notice to the Co-Borrowers so long as no Default or
Event of Default has occurred and is then continuing or (ii) immediately upon
written notice if a Default or Event of Default has occurred and is then
continuing.  The value of all Eligible Inventory shall be determined at the
lower of cost or market value on a first in first out basis in accordance with
Generally Accepted Accounting Principles applied on a consistent basis.

“Revolving Credit Commitment Termination Date” shall mean June 30, 2008.

Section 1.3.            Clause “(e)” of the definition of Eligible Accounts
Receivable in Section 1.01 of the Credit Agreement is hereby amended and
restated in its entirety to provide as follows:

“not more than (i) one hundred twenty (120) day have elapsed from the invoice
date, with respect to accounts receivable owing from Home Depot (or its
Subsidiaries) or Sears (or its Subsidiaries) or (ii) ninety (90) days have
elapsed from the invoice date, with respect to any other accounts receivable”

Section 1.4.            The fourth sentence of Section 2.08 of the Credit
Agreement is hereby amended and restated in its entirety to provide as follows:

“Each New Term Loan Note shall (a) be dated the Effective Date, (b) be stated to
mature on the New Term Loan Maturity Date and (c) be payable as to principal in
twenty five (25) consecutive quarterly installments commencing on January 31,
2008 and continuing on the last day of each January, April, July and October
thereafter as follows, each in an aggregate amount equal to 1/25th of the
aggregate principal amount outstanding under the New Term Loan as of January 31,
2008, all for the pro-rata distribution to the Lenders based upon their New Term
Loan Commitment, provided that the final payment on the New Term Loan Maturity
Date shall be in an amount equal to the outstanding unpaid principal amount of
the New Term Loan.”

Section 1.5.            The table in Section 7.13(b) of the Credit Agreement,
Minimum Capital Base, is hereby amended and restated in its entirety to provide
as follows:

Period

 

 

 

Amount

 

June 30, 2007 through December 30, 2007

 

$

13,750,000

 

December 31, 2007 through December 30, 2008

 

$

16,000,000

 

December 31, 2008 through December 30, 2009

 

$

21,500,000

 

December 31, 2009 to December 30, 2010

 

$

26,000,000

 

December 31, 2010 and thereafter

 

$

33,000,000

 

 

Schedule 1.6. The table in Section 7.13(c) of the Credit Agreement, Consolidated
Senior Debt to Consolidated EBITDA, is hereby amended and restated in its
entirety to provide as follows:

 

Period

 

 

 

Amount

 

June 30, 2007 through September 29, 2007

 

4.00:1.00

 

September 30, 2007 through December 30, 2008

 

3.75:1.00

 

December 31, 2007 through December 30, 2008

 

3.50:1.00

 

December 31, 2008 through December 30, 2009

 

2.75:1.00

 

December 31, 2009 to December 30, 2010

 

2.50:1.00

 

December 31, 2010 and thereafter

 

2.00:1.00

 

 

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ARTICLE II.
Conditions of Effectiveness; Further Conditions.

Section 2.1.            This Amendment shall become effective as of the date
hereof, upon receipt by the Administrative Agent of the following: (a) this
Amendment, duly executed by each Co-Borrower; and (b) an Officer’s Certificate,
substantially in the form of Exhibit 1 attached hereto.

ARTICLE III.
Representations and Warranties; Effect on Credit Agreement.

Section 3.1.  Each Co-Borrower hereby represents and warrants as follows:

a.             This Amendment and the Credit Agreement, as amended hereby,
constitute legal, valid and binding obligations of the Co-Borrowers and are
enforceable against the Co-Borrowers in accordance with their respective terms.

b.             Upon the effectiveness of this Amendment, the Co-Borrowers hereby
reaffirm all covenants, representations and warranties made in the Credit
Agreement to the extent that the same are not amended hereby and each
Co-Borrower agrees that all such covenants, representations and warranties shall
be deemed to have been remade as of the date hereof except to the extent such
representations or warranties relate to an earlier date in which case they shall
be true and correct in all material respects as of such earlier date.

c.             No Default or Event of Default has occurred and is continuing or
would exist after giving effect to this Amendment.

d.             No Co-Borrower has any defense, counterclaim or offset with
respect to the Credit Agreement.

Section 3.2.            Effect on Credit Agreement and Loan Documents.

a.             Upon the effectiveness of this Amendment, each reference in the
Credit Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words
of like import shall mean and be a reference to the Credit Agreement as amended
hereby.

b.             Except as specifically amended herein, the Credit Agreement, and
all other documents, instruments and agreements executed and/or delivered in
connection therewith, shall remain in full force and effect, and are hereby
ratified and confirmed.

c.             Except as expressly provided  herein, the execution, delivery and
effectiveness of this Amendment shall not operate as a waiver of any right,
power or remedy of the Administrative Agent or the Lenders, nor constitute a
waiver of any provision of the Credit Agreement, or any other documents,
instruments or agreements executed and/or delivered under or in connection
therewith.

d.             The other Loan Documents and all agreements, instruments and
documents executed and delivered in connection with the Credit Agreement and any
other Loan Documents shall

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each be deemed to be amended and supplemented hereby to the extent necessary, if
any, to give effect to the provisions of this Amendment.

ARTICLE IV.
Miscellaneous.

Section 4.1.            This Amendment shall be governed by and construed in
accordance with the laws of the State of New York.

Section 4.2.            Section headings in this Amendment are included herein
for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.

Section 4.3.            This Amendment may be executed in one or more
counterparts, each of which shall constitute an original, and all of which,
taken together, shall be deemed to constitute one and the same agreement.

ARTICLE V.
Waiver.

The Co-Borrowers, the Lenders and the Administrative Agent hereby acknowledge,
confirm and agree that the Waiver to Credit Agreement regarding the transaction
between Embassy and tell Realty LLC, by and among the Co-Borrowers, the Lenders
and the Administrative Agent was executed, effective and dated as of “February
23, 2007”

[next page is signature page]

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IN WITNESS WHEREOF, the Co-Borrowers, the Lenders and the Administrative Agent
have caused this Amendment to be duly executed by their duly authorized officers
as of the day and year first above written.

 

P&F INDUSTRIES, INC.

 

FLORIDA PNEUMATIC MANUFACTURING

 

    CORPORATION

 

EMBASSY INDUSTRIES, INC.

 

GREEN MANUFACTURING, INC.

 

COUNTRYWIDE HARDWARE, INC.

 

NATIONWIDE INDUSTRIES, INC.

 

WOODMARK INTERNATIONAL, L.P.

 

By:

Countrywide Hardware, Inc., its General Partner

 

PACIFIC STAIR PRODUCTS, INC.

 

WILP HOLDINGS, INC.

 

CONTINENTAL TOOL GROUP, INC.

 

HY-TECH MACHINE, INC.

 

 

 

 

 

 

By:

/s/ Joseph A. Molino, Jr.

 

 

 

Joseph A. Molino, Jr., the President of Green Manufacturing, Inc. and the Vice
President of each of the other corporations named above

 

 

 

 

CITIBANK, N.A., as a Lender and as
Administrative Agent

 

 

 

 

 

 

 

By:

/s/ Stephen Kelly

 

 

Name:

Stephen Kelly

 

 

Title:

Vice President

 

 

 

 

 

 

HSBC BANK USA, NATIONAL

 

ASSOCIATION, as a Lender

 

 

 

 

 

By:

/s/ Raymond Fincken

 

 

Name:

Raymond Fincken

 

Title:

Vice President

 

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