Exhibit 10.1

 

PURCHASE AGREEMENT

 

This PURCHASE AGREEMENT (this "Agreement") is made and entered into as of
February 11, 2016 by and between P&F Industries Inc., a Delaware corporation
(the "Company"), and Christopher J. Kliefoth, an individual ("Seller").

 

WHEREAS, Seller directly owns shares of the issued and outstanding Class A
common stock, par value $1.00 per share, of the Company ("Company Shares")
(CUSIP: 629830508) and Non-Qualified Options to purchase Company Shares
(“Options”); and

 

WHEREAS, Seller desires to sell, and the Company desires to purchase, free and
clear of any and all Liens (as defined herein) 30,000 Company Shares and Options
to purchase 6,667 Company Shares.

 

NOW, THEREFORE, in consideration of the foregoing premises and the covenants,
agreements and representations and warranties contained herein, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

 

ARTICLE I

 

PURCHASE AND SALE; CLOSING

 

Section 1.1           Purchase and Sale. Upon the terms and subject to the
conditions of this Agreement, Seller agrees to sell, convey, assign, transfer
and deliver to the Company, and the Company agrees to purchase from Seller, (i)
30,000 Company Shares (the "Purchased Shares"), free and clear of any and all
mortgages, pledges, encumbrances, liens, security interests, options, charges,
claims, deeds of trust, deeds to secure debt, title retention agreements, rights
of first refusal or offer, limitations on voting rights, proxies, voting
agreements, limitations on transfer or other agreements or claims of any kind or
nature whatsoever (collectively, "Liens") and (ii) Options (as set forth on
Schedule 1 hereto) to purchase 6,667 Company Shares.

 

Section 1.2           Purchase Price. Upon the terms and subject to the
conditions of this Agreement, in consideration of the aforesaid sale,
conveyance, assignment, transfer and delivery to the Company of (i) the
Purchased Shares, the Company shall pay to Seller a price per Purchased Share of
$8.498 for an aggregate price of $254,940 (the "Company Share Purchase Price")
and (ii) the Options, the Company shall pay to Seller the aggregate amount of
$16,597 (as calculated on Schedule 1 hereto) (the “Option Purchase Price” and,
together with the Company Share Purchase Price, the “Purchase Price”).

 

Section 1.3           Expenses. All fees and expenses incurred by a party hereto
in connection with the matters contemplated by this Agreement shall be borne by
the party incurring such fee or expense, including without limitation the fees
and expenses of any investment banks, attorneys, accountants or other experts or
advisors retained by such party.

 

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Section 1.4           Closing; Conditions.

 

(a)          The consummation of the transactions contemplated by this Agreement
(the "Closing") shall take place at the offices of the Company as promptly as
practical after satisfaction of the conditions hereto, or at such other place,
date or time as the parties may agree in writing (the "Closing Date").

 

(b)          The Company's obligations to consummate the transactions
contemplated by this Agreement shall be conditioned on (i) consummation of the
transactions contemplated by the Stock Purchase and Redemption Agreement between
Countrywide Hardware, Inc., Nationwide Industries, Inc., Argosy NWI Holdings,
LLC, and P&F Industries, Inc. dated as of February 11, 2016, as amended or
otherwise modified through the date hereof, (ii) no injunction or other order,
judgment, law, regulation, decree or ruling or other legal restraint or
prohibition having been issued, enacted or promulgated by a court or other
governmental authority of competent jurisdiction that would have the effect of
prohibiting or preventing the consummation of the transactions contemplated
hereunder, and (iii) approval of this Agreement and the transactions
contemplated hereby by Board of Directors of the Company.

 

Section 1.5           Deliveries.

 

(a)          At the Closing, in accordance with Section 1.2, the Company shall
deliver or cause to be delivered to Seller the Purchase Price by wire transfer
of immediately available funds to such account as Seller has specified in
writing prior to the Closing Date;

 

(b)          Prior to the Closing, Seller shall deliver or cause to be delivered
to the Company all of the 30,000 Purchased Shares by transfer via the Depository
Trust Company Deposit Withdrawal Agent Commission System ("DWAC") in accordance
with the instructions included on the signature page hereto, such delivery to be
confirmed as “settled” and not subject to reversal or cancellation at or prior
to the Closing.

 

(c)          Prior to the Closing, Seller shall deliver or caused to be
delivered to the Company the Non-Qualified Stock Option Agreements representing
the Options under the Company’s 2002 and 2012 Stock Incentive Plans.

 

ARTICLE II

 

COVENANTS

 

Section 2.1           Standstill.

 

(a)          During the period beginning on the date hereof and ending on the
date that is the third anniversary hereof (the "Standstill Period"), except as
specifically permitted by the terms of this Agreement, Seller shall not, and
shall cause his Affiliates (as defined in Section 5.3) not to, acquire, offer or
propose to acquire, or agree to acquire, directly or indirectly, by purchase or
otherwise, any (i) Voting Securities (as defined in Section 5.3), or (ii) direct
or indirect rights or options to acquire (through purchase, exchange, conversion
or otherwise) any Voting Securities such that, after such purchase in the case
of (i) and (ii), Seller would own in excess of 50,000 Voting Securities (subject
to adjustment to reflect any stock dividend, stock split, combination of shares,
reclassification, recapitalization or other similar event affecting the number
of outstanding Voting Securities).

 

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(b)          During the Standstill Period, except upon the express prior written
invitation of the Company, Seller shall not, and shall cause his Affiliates not
to, directly or indirectly, singly or as part of a partnership, limited
partnership, syndicate or other group (as those terms are used within the
meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), which meanings shall apply for all purposes of this
Agreement): (i) make, or in any way participate in, any "solicitation" of
"proxies" (as such terms are defined or used in Regulation 14A under the
Exchange Act) or exempt solicitation under Rule 14a-2(b)(1) or otherwise with
respect to any Voting Securities (including by the execution of actions by
written consent), become a "participant" or a "participant in a solicitation"
(as such terms are defined or used in Regulation 14A under the Exchange Act)
with respect to the Company or otherwise communicate with any stockholder of the
Company pursuant to Rule 14a-1(l)(2)(iv) under the Exchange Act; (ii) initiate,
propose or otherwise solicit, or participate in the solicitation of,
stockholders for the approval of one or more stockholder proposals with respect
to the Company, including any proposal made pursuant to Rule 14a-8 under the
Exchange Act, or encourage or induce any other individual or entity to initiate
any stockholder proposal relating to the Company, or make any demand or request
for any list of the holders of Voting Securities; (iii) form, encourage the
formation, join or in any way participate in a "group" which owns or seeks or
offers to acquire beneficial ownership of Voting Securities or rights to acquire
such securities or which seeks or offers to acquire control of the Company or
influence its policies; (iv) solicit, seek or offer to effect, negotiate with or
provide any information to any party with respect to, make any statement or
proposal, whether written or oral, either alone or in concert with others, to
the Board of Directors of the Company, to any director or officer of the Company
or to any other stockholder of the Company with respect to, or otherwise
formulate any plan or proposal or make any public announcement, proposal, offer
or filing under the Exchange Act, any similar or successor statute or otherwise,
or take action to cause the Company to make any such filing, with respect to:
(A) any form of business combination, restructuring, recapitalization,
dissolution or similar transaction involving the Company or any Affiliate
thereof, including, without limitation, a merger, tender or exchange offer,
share repurchase or liquidation of the Company's assets, (B) any acquisition or
disposition of assets material to the Company, (C) any request to amend, waive
or terminate the provisions of this Agreement or (D) any proposal or other
statement inconsistent with the terms of this Agreement; (v) otherwise act,
alone or in concert with others (including by providing financing for another
party), to seek or offer to acquire control of the Company or influence, in any
manner, its management, Board of Directors or policies; or (vi) assist or
encourage any third party, whether or not a "group" with such third party, to
take any of the actions enumerated in this Section 2.1(b).

 

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Section 2.2           Non-disparagement.

 

(a)          The Company (on its own behalf and on behalf of its directors,
officers, subsidiaries and Affiliates and each of their respective successors
and assigns (collectively, the "Company Parties")) agrees that, during the
Standstill Period, it shall not (whether directly or indirectly, individually or
in concert with others, publicly or privately, orally or in writing) engage in
any conduct or make, or cause to be made, any statement, observation or opinion,
or communicate any information that is calculated to or is reasonably likely to
have the effect of (i) undermining, impugning, disparaging, injuring the
reputation of or otherwise in any way reflecting adversely or detrimentally upon
Seller or (ii) accusing or implying that Seller engaged in any wrongful,
unlawful or improper conduct. The foregoing shall not apply to any compelled
testimony, either by legal process, subpoena or otherwise or to any response to
any request for information from any governmental authority having jurisdiction
over the Company; provided, however, that in the event that any Company Party is
requested pursuant to, or required by, applicable law, regulation or legal
process to testify or otherwise respond to a request for information from any
governmental authority, the Company shall notify Seller promptly so that the
Seller may seek a protective order or other appropriate remedy. In the event
that no such protective order or other remedy is obtained, or Seller waives
compliance with the terms of this Section 2.2(a), such Company Party shall
furnish only such information which it has been advised by counsel is legally
required and will exercise reasonable efforts to obtain reliable assurance that
such information will be accorded confidential treatment. The preceding
sentences of this Section 2.2(a) shall not preclude the Company from responding
publicly or otherwise to any comments made by Seller to any news media or to any
statements of assertions by any news media based on prior statements, assertions
or filings made by Seller.

 

(b)          Seller agrees that, during the Standstill Period, he shall not
(whether directly or indirectly, individually or in concert with others,
publicly or privately, orally or in writing) engage in any conduct or make, or
cause to be made, any statement, observation or opinion, or communicate any
information, including, without limitation, to any member of the press, analyst,
governmental or regulatory agency, that is calculated to or is reasonably likely
to have the effect of (i) undermining, impugning, disparaging, injuring the
reputation of or otherwise in any way reflecting adversely or detrimentally upon
any Company Party or (ii) accusing or implying that any Company Party engaged in
any wrongful, unlawful or improper conduct; provided, however, that in the event
that Seller is requested pursuant to, or required by, applicable law, regulation
or legal process to testify or otherwise respond to a request from any
governmental authority, Seller shall notify the Company promptly so that the
Company may seek a protective order or other appropriate remedy. In the event
that no such protective order or other remedy is obtained, or any Company Party
waives compliance with the terms of this Section 2.2(b), Seller shall furnish
only such information which it is advised by counsel is legally required and
will exercise reasonable efforts to obtain reliable assurance that such
information will be accorded confidential treatment.

 

Section 2.3           Public Announcement; Public Filings.

 

(a)          Without limitation of the Company’s rights under the last sentence
of Section 2.2(a) hereof and except as may be required by law or any
governmental authority, regulatory agency or accrediting body, neither party
hereto nor any of its respective Affiliates shall issue any press release or
make any public statement relating to the transactions contemplated hereby.

 

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Section 2.4           Confidentiality. Seller shall not disclose and shall
maintain the confidentiality of (and shall cause his Affiliates to not disclose
and to maintain the confidentiality of) any non-public information which relates
to the business, legal or financial affairs of the Company (the "Confidential
Information"). Seller shall use at least the same degree of care to safeguard
and to prevent the disclosure, publication or dissemination of the Confidential
Information as he employs to avoid unauthorized disclosure, publication or
dissemination of his own information of a similar nature, but in no case less
than reasonable care. In the event that Seller (or any Affiliate) is requested
or required (by oral question, interrogatory, request for information or
documents, subpoena, civil investigative demand or similar process) to disclose
any Confidential Information, Seller shall (a) notify the Company promptly so
that the Company may seek a protective order or other appropriate remedy and (b)
cooperate with the Company in any effort the Company undertakes to obtain a
protective order or other remedy. In the event that no such protective order or
other remedy is obtained, the applicable party shall disclose to the person
compelling disclosure only that portion of the Confidential Information which
such party is advised by counsel is legally required and shall exercise
commercially reasonable efforts to obtain reliable assurance that confidential
treatment is accorded the Confidential Information so disclosed.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES OF SELLER

 

Section 3.1           Existence; Authority. Seller has all requisite competence,
power and authority to execute and deliver this Agreement, to perform his
obligations hereunder and to consummate the transactions contemplated hereby.

 

Section 3.2           Enforceability. This Agreement has been duly and validly
executed and delivered by Seller and, assuming due and valid authorization,
execution and delivery by the Company, this Agreement constitutes a legal, valid
and binding obligation of Seller enforceable against Seller in accordance with
its terms, except as such enforceability may be affected by bankruptcy,
insolvency, moratorium and other similar laws relating to or affecting
creditors' rights generally and general equitable principles.

 

Section 3.3           Ownership. Seller is the sole record and beneficial owner
of the Purchased Shares and the Options, free and clear of any and all Liens.
Seller has full power and authority to transfer full legal ownership of the
Purchased Shares and the Options to the Company, and Seller is not required to
obtain the approval of any person or governmental agency or organization to
effect the sale of the Purchased Shares or the Options. The entire direct or
indirect beneficial ownership of Seller or any of his Affiliates in the Company
is 30,500 Company Shares and Options to purchase 6,667 Company Shares.

 

Section 3.4           Good Title Conveyed. Any stock certificates and stock
powers (together with the Stock Option Agreements representing the Options)
executed and delivered by Seller at the Closing will be valid and binding
obligations of Seller, enforceable in accordance with their respective terms,
and, together with the delivery of Purchased Shares through DWAC, will
effectively vest in the Company good, valid and marketable title to all of the
Purchased Shares and Options, free and clear of any and all Liens.

 

Section 3.5           Absence of Litigation. There is no suit, action,
investigation or proceeding pending or, to the knowledge of Seller, threatened
against Seller that could impair the ability of Seller to perform its
obligations hereunder or to consummate the transactions contemplated hereby.

 

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Section 3.6           Other Acknowledgements.

 

(a)          Seller hereby represents and acknowledges that he is a
sophisticated investor and he knows the Company may have material Confidential
Information concerning the Company and its condition (financial and otherwise),
results of operations, businesses, properties, plans and prospects and that such
information could be material to Seller's' decision to sell the Purchased Shares
and the Options or otherwise materially adverse to Seller's interests. Seller
acknowledges and agrees that the Company shall have no obligation to disclose to
him any such information and hereby waives and releases, to the fullest extent
permitted by law, any and all claims and causes of action he has or may have
against the Company and the Company’s Affiliates, officers, directors,
employees, agents and representatives based upon, relating to or arising out of
nondisclosure of such information or the sale of the Purchased Shares and the
Options hereunder.

 

(b)          Seller further represents that he has adequate information
concerning the business and financial condition of the Company to make an
informed decision regarding the sale of the Purchased Shares and the Options and
has, independently and without reliance upon the Company, made his own analysis
and decision to sell the Purchased Shares and the Options. With respect to
legal, tax, accounting, financial and other considerations involved in the
transactions contemplated by this Agreement, including the sale of the Purchased
Shares and the Options, Seller is not relying on the Company (or any agent or
representative thereof). Seller carefully considered and, to the extent he
believes such discussion necessary, discussed with professional legal, tax,
accounting, financial and other advisors the suitability of the transactions
contemplated by this Agreement, including the sale of the Purchased Shares and
the Options. Seller acknowledges that neither the Company nor any of the
Company’s directors, officers, subsidiaries or Affiliates has made or makes any
representations or warranties, whether express or implied, of any kind except as
expressly set forth in this Agreement.

 

(c)          Seller is an "accredited investor" as defined in Rule 501
promulgated under the Securities Act of 1933, as amended. The sale of the
Purchased Shares and the Options by Seller (i) was privately negotiated in an
independent transaction and (ii) does not violate any rules or regulations
applicable to Seller.

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

The Company makes the following representations and warranties to Seller:

 

Section 4.1           Existence; Authority. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. The Company has all requisite corporate power and authority to execute
and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby and has taken all necessary
corporate action to authorize the execution, delivery and performance of this
Agreement.

 

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Section 4.2           Enforceability. This Agreement has been duly and validly
executed and delivered by the Company and, assuming due and valid authorization,
execution and delivery by Seller, this Agreement constitutes a legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, except as such enforceability may be affected by bankruptcy,
insolvency, moratorium and other similar laws relating to or affecting
creditors' rights generally and general equitable principles.

 

Section 4.3           Absence of Litigation. There is no suit, action,
investigation or proceeding pending or, to the knowledge of the Company,
threatened against such party that could impair the ability of the Company to
perform its obligations hereunder or to consummate the transactions contemplated
hereby.

 

ARTICLE V

 

MISCELLANEOUS

 

Section 5.1           Survival. Each of the representations, warranties,
covenants and agreements in this Agreement or pursuant hereto shall survive the
Closing. Notwithstanding any knowledge of facts determined or determinable by
either party by investigation, each party shall have the right to fully rely on
the representations, warranties, covenants and agreements of the other party
contained in this Agreement or in any other documents or papers delivered in
connection herewith. Each representation, warranty, covenant and agreement of
the parties contained in this Agreement is independent of each other
representation, warranty, covenant and agreement. Except as expressly set forth
in this Agreement, neither party has made any representation warranty, covenant
or agreement.

 

Section 5.2           Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given if so given) by hand delivery, cable, telecopy or
mail (registered or certified, postage prepaid, return receipt requested) to the
respective parties hereto addressed as follows:

 

If to the Company:

 

445 Broadhollow Road

Suite 100

Melville, NY 11747

Attention: Richard B. Goodman

Telecopy Number: (631) 773-4223

 

If to Seller:

 

902 South Rome Avenue, Unit C

Tampa, FL 33606

 

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Section 5.3           Certain Definitions. As used in this Agreement, (a) the
term "Affiliate" shall have the meaning set forth in Rule 12b-2 under the
Exchange Act and shall include persons who become Affiliates of any person
subsequent to the date hereof; (b) the term "Voting Securities" shall mean the
Company Shares and any other securities of the Company entitled to vote in the
election of directors, or securities convertible into, or exercisable or
exchangeable for, securities of the Company entitled to vote in the election of
directors, whether or not subject to the passage of time or other contingencies;
and (c) the Company and Seller will be referred to herein individually as a
"party" and collectively as "parties."

 

Section 5.4           Specific Performance. The Company, on the one hand, and
Seller, on the other hand, acknowledge and agree that the other would be
irreparably injured by a breach of this Agreement and that money damages are an
inadequate remedy for an actual or threatened breach of this Agreement.
Accordingly, the parties agree to the granting of specific performance of this
Agreement and injunctive or other equitable relief as a remedy for any such
breach or threatened breach, without proof of actual damages, and further agree
to waive any requirement for the securing or posting of any bond in connection
with any such remedy. Such remedy shall not be deemed to be the exclusive remedy
for a breach of this Agreement, but shall be in addition to all other remedies
available at law or equity.

 

Section 5.5           No Waiver. No waiver by either party hereto of a breach of
any provision of this Agreement shall operate as or be construed to be a waiver
of any other breach of such provision or of any breach of any other provision of
this Agreement. The failure of a party hereto to insist upon strict adherence to
any term of this Agreement on one or more occasions shall not be considered a
waiver or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement.

 

Section 5.6           Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated by
such holding. The parties agree that the court making any such determination of
invalidity or unenforceability shall have the power to reduce the scope,
duration or area of, delete specific words or phrases in, or replace any such
invalid or unenforceable provision with one that is valid and enforceable and
that comes closest to expressing the intention of such invalid or unenforceable
provision, and this Agreement shall be enforceable as so modified after the
expiration of the time within which the judgment may be appealed.

 

Section 5.7           Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns; provided that this Agreement (and any of the rights,
interests or obligations of either party hereunder) may not be assigned by
either party without the prior written consent of the other party hereto, such
consent not to be unreasonably withheld. Any purported assignment of a party's
rights under this Agreement in violation of the preceding sentence shall be null
and void.

 

Section 5.8           Entire Agreement; Amendments. This Agreement constitutes
the entire agreement between the parties with respect to the subject matter
hereof and supersedes all other prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter hereof
and, except as expressly set forth herein, is not intended to confer upon any
person other than the parties hereto any rights or remedies hereunder. This
Agreement may be amended only by a written instrument duly executed by the
parties hereto or their respective permitted successors or assigns.

 

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Section 5.9           Headings. The section headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

 

Section 5.10         Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware,
without giving effect to choice of law principles thereof that would cause the
application of the laws of any other jurisdiction.

 

Section 5.11         Submission to Jurisdiction. Each of the parties irrevocably
submits to the exclusive jurisdiction and service and venue in any federal or
state court sitting in the State of Delaware for the purposes of any action,
suit or proceeding arising out of or with respect to this Agreement. Each of the
parties irrevocably and unconditionally waives any objections to the laying of
venue of any action, suit or proceeding relating to this Agreement in any
federal or state court sitting in the State of Delaware, and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES THE RIGHT TO A TRIAL BY JURY.

 

Section 5.12         Counterparts; Facsimile. This Agreement may be executed in
counterparts, including by facsimile or PDF electronic transmission, each of
which shall be deemed an original, but all of which together shall constitute
one and the same Agreement.

 

Section 5.13         Further Assurances. Upon the terms and subject to the
conditions of this Agreement, each of the parties hereto agrees to execute such
additional documents, to use commercially reasonable efforts to take, or cause
to be taken, all actions, and to do, or cause to be done, and to assist and
cooperate with the other parties in doing, all things necessary, proper or
advisable to consummate or make effective, in the most expeditious manner
practicable, the transactions contemplated by this Agreement.

 

Section 5.14         Interpretation. The parties acknowledge and agree that this
Agreement has been negotiated at arm's length and between parties equally
sophisticated and knowledgeable in the matters covered hereby. Accordingly, any
rule of law or legal decision that would require interpretation of any
ambiguities in this Agreement against the party that has drafted it is not
applicable and is hereby waived.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first written above.

 

  P&F INDUSTRIES INC.       By: /s/ Joseph A. Molino, Jr.   Name: Joseph A.
Molino, Jr.   Title: Vice President       /s/ Christopher J. Kliefoth  
Christopher J. Kliefoth

 

 

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