Exhibit 10.2 

 

WAIVER AND AMENDMENT NO. 1

TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

 

WAIVER AND AMENDMENT NO. 1 TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
dated as of October 14, 2014 (this “Amendment”), is among P&F INDUSTRIES, INC.,
a Delaware corporation (“P&F”), FLORIDA PNEUMATIC MANAFUACTURING CORPORATION, a
Florida corporation (“Florida Pneumatic”), HY-TECH MACHINE, INC., a Delaware
corporation (“Hy-Tech”), ATSCO HOLDINGS CORPORATION, a Delaware corporation
(“ATSCO”), and NATIONWIDE INDUSTRIES, INC., a Florida corporation (“Nationwide”,
and together with P&F, Florida Pneumatic Hy-Tech and ATSCO, collectively,
“Borrowers” and each, a “Borrower”), CONTINENTAL TOOL GROUP, INC., a Delaware
corporation (“Continental”), COUNTRYWIDE HARDWARE, INC., a Delaware corporation
(“Countrywide”), EMBASSY INDUSTRIES, INC., a New York corporation (“Embassy”),
GREEN MANUFACTURING, INC., a Delaware corporation (“Green”), PACIFIC STAIR
PRODUCTS, INC., a Delaware corporation (“Pacific”), WILP HOLDINGS, INC., a
Delaware corporation (“WILP”), EXHAUST TECHNOLOGIES, INC., a Delaware
corporation, and WOODMARK INTERNATIONAL, L.P., a Delaware limited partnership
(“Woodmark”, and together with Continental, Countrywide, Embassy, Green, Pacific
and WILP, collectively, “Guarantors” and each, a “Guarantor”), the Lenders
(defined below) party to this Agreement, and CAPITAL ONE BUSINESS CREDIT
CORPORATION, a New York corporation, as agent for the Lenders (“Agent”).

 

RECITALS:

 

A.           Borrowers, Guarantors, the lenders from time to time party thereto
(collectively, the “Lenders”) and Agent have entered into an Amended and
Restated Loan and Security Agreement dated as of August 12, 2014 (the “Loan
Agreement”). Capitalized terms used and not otherwise defined herein shall have
the meanings ascribed to them in the Loan Agreement.

 

B.           Borrowers have requested that Agent and the Lenders waive
compliance with Section 10.2.4 of the Credit Agreement to permit P&F to purchase
Equity Interests of P&F held by Timothy Stabosz (“Stabosz Buyback”) pursuant to
the Purchase Agreement dated as of the day hereof, entered by and between P&F
and Timothy J. Stabosz.

 

C.           Borrowers have requested that Agent and the Lenders amend certain
provisions of the Loan Agreement to permit the Stabosz Buyback.

 

D.           Subject to the terms and conditions set forth below, Agent and the
Lenders party hereto are willing to waive compliance with Section 10.2.4 of the
Loan Agreement and to amend the Loan Agreement to permit Stabosz Buyback.

 

In furtherance of the foregoing, the parties agree as follows:

 

Section 1.          WAIVER. Subject to the covenants, terms and conditions set
forth herein and in reliance upon the representations and warranties set forth
herein, the Agent and the Lenders hereby waive compliance by the Borrowers with
Section 10.2.4 of the Loan Agreement solely for purposes of permitting P&F to
consummate Stabosz Buyback, provided that (a) no Default or Event of Default
shall have occurred and be continuing both immediately before and immediately
giving effect to the Stabosz Buyback and (b) the Borrowers have delivered a
certificate to that effect to Agent on the date of the Stabosz Buyback.

 

 

 

 

Section 2.          AMENDMENTS. Subject to the covenants, terms and conditions
set forth herein and in reliance upon the representations and warranties set
forth herein, the Loan Agreement is amended as follows:

 

(a)          Section 7.1 of the Loan Agreement is hereby amended by inserting
the following new sentence at the end thereof:

 

“Notwithstanding anything herein to the contrary, no security interest shall be
granted to Agent or Secured Parties under this Section 7.1 in any Equity
Interests of P&F as may hereafter be repurchased by P&F with the consent of the
Lenders.”

 

The amendment to the Loan Agreement are limited to the extent specifically set
forth above and no other terms, covenants or provisions of the Loan Agreement
are intended to be affected hereby.

 

Section 3.          CONDITIONS PRECEDENT. The parties hereto agree that the
waiver set forth in Section 1 above and amendment set forth in Section 2 above
shall not be effective until the satisfaction of each of the following
conditions precedent (the date of such satisfaction, the “Effective Date”):

 

(a)          Documentation. Agent shall have received (i) a counterpart of this
Amendment, duly executed and delivered by Borrowers, Guarantors and all of the
Lenders then party to the Loan Agreement, and (ii) such other documents and
certificates as Agent or its counsel may reasonably request relating to the
organization, existence and good standing of Obligors, the authorization of this
Amendment and any other legal matters relating to any Obligor or the
transactions contemplated hereby.

 

(b)          Fees and Expenses. All fees and expenses of counsel to Agent
estimated to date shall have been paid in full (without prejudice to final
settling of accounts for such fees and expenses).

 

Section 4.          REPRESENTATIONS AND WARRANTIES.

 

(a)          In order to induce Agent and the Lenders to enter into this
Amendment, each Borrower represents and warrants to Agent and the Lenders as
follows:

 

(i)          The representations and warranties made by such Borrower in Section
9 of the Loan Agreement are true and correct on and as of the date hereof,
except to the extent that such representations and warranties expressly relate
to an earlier date in which case such representations and warranties are true
and correct on and as of such earlier date.

 

(ii)         No Default or Event of Default has occurred and is continuing or
will exist after giving effect to this Amendment.

 

(b)          In order to induce Agent and the Lenders to enter into this
Amendment, each Borrower and each Guarantor represents and warrants to Agent and
the Lenders that this Amendment has been duly authorized, executed and delivered
by it and constitutes its legal, valid and binding obligation.

 

Section 5.          MISCELLANEOUS.

 

(a)          Ratification and Confirmation of Loan Documents. Each Borrower and
each Guarantor hereby consents, acknowledges and agrees to the amendments set
forth herein and hereby confirms and ratifies in all respects the Loan Documents
to which such Person is a party (including without limitation, with respect to
each Guarantor, the continuation of its payment and performance obligations
under the guaranties set forth in Section 15 of the Loan Agreement upon and
after the effectiveness of the amendments contemplated hereby and, with respect
to each Borrower and each Guarantor, the continuation and extension of the liens
granted under the Loan Agreement and Security Documents to secure the
Obligations).

 

2

 

 

(b)          Fees and Expenses. Borrowers shall pay on demand all reasonable
costs and expenses of Agent in connection with the preparation, reproduction,
execution, and delivery of this Amendment and any other documents prepared in
connection herewith, including, without limitation, the reasonable fees and
out-of-pocket expenses of counsel for Agent.

 

(c)          Headings. Section and subsection 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 or be given any substantive effect.

 

(d)          Governing Law; Waiver of Jury Trial. This Amendment shall be
governed by and construed in accordance with the laws of the State of New York,
and shall be further subject to the provisions of Sections 14.13, 14.14 and
14.15 of the Loan Agreement.

 

(e)          Counterparts. This Amendment may be executed in any number of
counterparts, each of which when executed and delivered shall be deemed to be an
original, and all of which when taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page of this
Amendment by facsimile or electronic transmission (including .pdf file) shall be
effective as delivery of a manually executed counterpart hereof.

 

(f)          Entire Agreement. This Amendment, together with all the Loan
Documents (collectively, the “Relevant Documents”), sets forth the entire
understanding and agreement of the parties hereto in relation to the subject
matter hereof and supersedes any prior negotiations and agreements among the
parties relating to such subject matter. No promise, condition, representation
or warranty, express or implied, not set forth in the Relevant Documents shall
bind any party hereto, and no such party has relied on any such promise,
condition, representation or warranty. Each of the parties hereto acknowledges
that, except as otherwise expressly stated in the Relevant Documents, no
representations, warranties or commitments, express or implied, have been made
by any party to the other. None of the terms or conditions of this Amendment may
be changed, modified, waived or canceled orally or otherwise except in a writing
signed by Agent for such purpose.

 

(g)          Enforceability. Should any one or more of the provisions of this
Amendment be determined to be illegal or unenforceable as to one or more of the
parties hereto, all other provisions nevertheless shall remain effective and
binding on the parties hereto.

 

(h)          Successors and Assigns. This Amendment shall be binding upon and
inure to the benefit of each Borrower, each Guarantor, Agent, each Lender and
their respective successors and assigns (subject to Section 13 of the Loan
Agreement).

 

[Remainder of Page Intentionally Left Blank; Signature Pages Follow]

 

3

 

  

The following parties have caused this Waiver and Amendment No. 1 to Amended and
Restated Loan and Security Agreement to be executed as of the date first written
above.

  

  BORROWERS:           P&F INDUSTRIES, INC.     FLORIDA PNEUMATIC MANUFACTURING
    CORPORATION     HY-TECH MACHINE, INC.     ATSCO HOLDINGS CORPORATION    
NATIONWIDE INDUSTRIES, INC.             By: /s/ Joseph A. Molino, Jr.     Name:
Joseph A. Molino, Jr.     Title: Vice President             GUARANTORS:        
  CONTINENTAL TOOL GROUP, INC.     COUNTRYWIDE HARDWARE, INC.     EMBASSY
INDUSTRIES, INC.     GREEN MANUFACTURING, INC.     PACIFIC STAIR PRODUCTS, INC.
    EXHAUST TECHNOLOGIES, INC.     WILP HOLDINGS, INC.             By: /s/
Joseph A. Molino, Jr.     Name: Joseph A. Molino, Jr.     Title: Vice President
            WOODMARK INTERNATIONAL, L.P.           By:     Countrywide Hardware,
Inc.             By: /s/ Joseph A. Molino, Jr.     Name: Joseph A. Molino, Jr.  
  Title: Vice President  

 

WAIVER AND AMENDMENT NO.1 TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

Signature Page

 

 

 

 

  AGENT AND LENDERS:           CAPITAL ONE BUSINESS CREDIT CORPORATION, as Agent
and Lender             By: /s/ Julianne Low     Name: Julianne Low     Title:
Senior Director  

 

WAIVER AND AMENDMENT NO.1 TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

Signature Page