EXECUTION VERSION

                    


            

          

        

      

    

     

    SUBORDINATION
AND INTERCREDITOR AGREEMENT

     

    THIS SUBORDINATION AND INTERCREDITOR
AGREEMENT (this “Agreement”) is
entered into as of October 25, 2010, by and between RICHARD A. HOROWITZ, an
individual resident of Old Westbury, New York (“Subordinated
Creditor”), and CAPITAL
ONE LEVERAGE FINANCE CORPORATION, as Senior Agent (as hereinafter
defined) for all Senior Lenders (as hereinafter defined) party to the Senior
Loan Agreement (as hereinafter defined).

     

    RECITALS:

     

    A.           P&F
Industries, Inc., a Delaware corporation (“P&F”), Florida
Pneumatic Manufacturing Corporation, a Florida corporation (“Florida Pneumatic”),
Hy-Tech Machine, Inc. a Delaware corporation (“Hy-Tech”), Nationwide
Industries, Inc., a Florida corporation (“Nationwide” and,
together with P&F, Florida Pneumatic and Hy-Tech, 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”), and Woodmark
International, L.P., a Delaware limited partnership (“Woodmark”, and
together with Borrowers, Continental, Countrywide, Embassy, Green, Pacific and
WILP, collectively, the “Obligors” and each,
an “Obligor”),
Senior Agent and the financial institutions party thereto as lenders from time
to time (the “Senior
Lenders”) have entered into a Loan and Security Agreement of even date
herewith (as the same may be amended, supplemented or otherwise modified from
time to time, the “Senior Loan
Agreement”) pursuant to which Senior Lenders have agreed, subject to the
terms and conditions set forth therein, to make certain loans and financial
accommodations to the Borrowers.

     

    B.           The
Obligors have issued a Secured Subordinated Promissory Note dated as of April
23, 2010 to the Subordinated Creditor in the principal amount of $250,000
(together with any replacements therefore or any portions thereof assigned or
transferred, the “Subordinated
Note”).  P&F has also entered into that certain
Indemnification Agreement dated as of April 23, 2010 (the “Indemnification
Agreement”) in favor of the Subordinated Creditor and Marc Schorr. The
obligations of the Obligors to the Subordinated Creditor under the Subordinated
Note, the Indemnification Agreement and all agreements and documents related
thereto (collectively, the “Subordinated Debt
Documents”) are secured by liens on and security interests in certain
property and assets of the Obligors constituting Subordinated Debt Collateral
(as hereinafter defined).

     

    C.           Senior
Agent and Senior Lenders require, as a condition precedent to the effectiveness
of the Senior Loan Agreement, the execution and delivery of this Agreement by
the Subordinated Creditor in order to set forth certain rights, obligations and
priorities between (i) Senior Agent and Senior Lenders and (ii) the
Subordinated Creditor.

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    


    NOW, THEREFORE, in order to
induce Senior Agent and Senior Lenders to consummate the transactions
contemplated by the Senior Loan Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which hereby are acknowledged, the
parties hereto hereby agree as follows:

     

    SECTION
1.      DEFINITIONS.  All
capitalized terms used herein but not defined herein shall have the meaning
given to such terms in the Senior Loan Agreement.  The following terms
shall have the following meanings in this Agreement:

     

    Bankruptcy Code:  Chapter
11 of Title 11 of the United States Code, as amended from time to time and any
successor statute and all rules and regulations promulgated
thereunder.

     

    Borrowers: as
defined in the Recitals of this Agreement.

     

    Cash
Collateralization:  the delivery of cash to Senior Agent, as
security for the payment of Senior Debt, in an amount equal to (a) with respect
to letter of credit obligations, 105% of the aggregate undrawn or unreimbursed
amount thereof, and (b) with respect to any hedge agreements, treasury
management or inchoate, contingent or other Obligations, Senior Agent’s good
faith estimate of the amount due or to become due, including all interest, fees
and other amounts relating to such Obligations.

     

    Collateral:  all
of the assets and property of the Obligors, whether real, personal or mixed, to
the extent constituting either Senior Debt Collateral or Subordinated Debt
Collateral.

     

    Disposition:  with
respect to any Collateral, any sale, lease, exchange, transfer or other
disposition of such Collateral.

     

    Distribution: with
respect to any indebtedness, obligation or security,  (a) any payment
or distribution by any Person of cash, securities or other property, by set-off,
compensation or otherwise, on account of such indebtedness, obligation or
security, (b) any redemption, purchase or other acquisition of such
indebtedness, obligation or security by any Person or (c) the granting of any
lien, security interest, charge or other encumbrance to or for the benefit of
the holders of such indebtedness, obligation or security in or upon any property
of any Person.

     

    Enforcement
Action:  (a) to take from or for the account of any Obligor or
any guarantor of the Subordinated Debt, by set-off, compensation or in any other
manner, the whole or any part of any moneys that may now or hereafter be owing
by any Obligor or any such guarantor with respect to the Subordinated Debt, (b)
to sue for payment of, or to initiate or participate with others in any suit,
action or proceeding against any Obligor or any such guarantor to
(i) enforce payment of or to collect the whole or any part of the
Subordinated Debt or (ii) commence judicial enforcement of any of the
rights and remedies under the Subordinated Debt Documents or applicable law with
respect to the Subordinated Debt, (c) to accelerate the Subordinated Debt, (d)
to exercise any put option or to cause any Obligor or any such guarantor to
honor any redemption or mandatory prepayment obligation under any Subordinated
Debt Document, (e) to notify account debtors or directly collect accounts
receivable or other payment rights of any Obligor or any such guarantor or (f)
to foreclose, execute or levy on, collect on, take possession of or control of,
or sell or otherwise realize upon (judicially or non-judicially) or to lease,
license or otherwise dispose of (whether publicly or privately), any Collateral
or otherwise to exercise or enforce remedial rights with respect to Collateral
under the Subordinated Debt Documents or any other applicable agreement,
document or instrument pertaining thereto (including, without limitation, by way
of setoff or noticing of any public or private sale or other disposition)
or  pursuant to the UCC or other applicable law.

     

    
      
         


      

      
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    Indemnity
Agreement:  that certain Indemnity Agreement dated as of April
23, 2010 by and among P&F, Marc Schorr and Subordinated Creditor, as in
effect on the date hereof.

     

    Paid in Full:
 with respect to Senior Debt, (a) the full cash payment thereof, including
all principal, interest and fees with respect thereto and any interest, fees and
other charges accruing during a Proceeding (whether or not allowed in the
Proceeding), including any roll up of Senior Debt, or any Senior Debt arising,
in any debtor in possession financing during any Proceeding; (b) if such Senior
Debt consists of obligations arising under letters of credit, hedge agreements,
treasury or cash management agreements or arrangements or other obligations
otherwise inchoate or contingent in nature, the Cash Collateralization thereof
(or delivery of a standby letter of credit acceptable to Senior Agent in its
discretion, in the amount of 105% of such obligations) and (c) all commitments
to make loans, issue letters of credit or make other credit extensions under the
Senior Loan Documents shall have expired or been terminated.

     

    Proceeding:

     

    (a)           any
case commenced by or against any Obligor under the Bankruptcy Code or any
similar federal or state law for the relief of debtors, any other proceeding for
the reorganization, recapitalization or adjustment or marshalling of the assets
or liabilities of any Obligor, any receivership or assignment for the benefit of
creditors relating to any Obligor or any similar case or proceeding relative to
any Obligor or its creditors, as such, in each case whether or not
voluntary;

     

    (b)           any
liquidation, dissolution, marshalling of assets or liabilities or other winding
up of or relating to any Obligor, in each case whether or not voluntary and
whether or not involving bankruptcy or insolvency; or

     

    (c)           any
other proceeding of any type or nature in which substantially all claims of
creditors of any Obligor are determined and any payment or distribution is or
may be made on account of such claims.

     

    Refinancing Senior Debt
Documents:  any financing documentation which replaces the
Senior Loan Documents and pursuant to which the Senior Debt under the Senior
Loan Documents is refinanced (including upon or after the commencement of a
Proceeding), as such financing documentation may be amended, supplemented or
otherwise modified from time to time in compliance with this
Agreement.

     

    
      
         


      

      
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    Scheduled Subordinated Debt
Payments: scheduled payments of interest on the Subordinated Debt due and
payable on the date scheduled for such payment on a non-accelerated basis in
accordance with the terms of the Subordinated Debt Documents as in effect on the
date hereof or as modified in accordance with the terms of this
Agreement.

     

    Senior
Agent:  Capital One Leverage Finance Corporation, as Senior
Agent for the Senior Lenders and the other Secured Parties, or any other Person
appointed by the holders of the Senior Debt as Senior Agent or solidary creditor
for purposes of the Senior Debt Documents and this Agreement.

     

    Senior
Debt:  all obligations, liabilities and indebtedness of every
nature of the Obligors from time to time owed to Senior Agent or any Senior
Lender under the Senior Debt Documents, including, without limitation, all
Obligations (as defined in the Senior Loan Agreement) including all obligations
in respect of Hedging Agreements (as defined in the Senior Loan Agreement) and
all Bank Product Debt (as defined in the Senior Loan Agreement) and the
principal amount of all debts, claims and indebtedness, accrued and unpaid
interest and all fees, costs and expenses, whether primary, secondary, direct,
contingent, fixed or otherwise, heretofore, now and from time to time hereafter
owing, due or payable, whether before or after the filing of a Proceeding
(including under the Bankruptcy Code) together with (a) any increases,
amendments, modifications, renewals or extensions thereof to the extent not
prohibited by the terms of this Agreement and any refinancing or replacement
thereof and (b) any interest, fees and expenses accruing thereon after the
commencement of a Proceeding, without regard to whether such interest, fees or
expenses are an allowed claim.  Senior Debt shall be considered to be
outstanding whenever any loan commitment under the Senior Debt Documents is
outstanding.

     

    Senior Debt
Collateral:  any and all property, security or other interest,
tangible or intangible, purporting to secure any of the Senior
Debt.

     

    Senior Debt
Documents:  the Senior Loan Documents and, after any
refinancing of the Senior Debt under the Senior Loan Documents, the Refinancing
Senior Debt Documents.

     

    Senior
Default:  any “Event of Default” under the Senior Loan
Documents, or any condition or event that, after notice or lapse of time or
both, would constitute such an Event of Default if that condition or event were
not cured or waived within any applicable grace or cure period set forth
therein.

     

    Senior
Lenders:  the holders of the Senior Debt.

     

    Senior Lien: a Lien
on Senior Debt Collateral granted by any Senior Debt Document to, or held by,
the Senior Agent or any Senior Lender, at any time, upon any Senior Debt
Collateral of any Obligor to secure the Senior Debt.


    
      
         


      

      
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    Senior Loan
Agreement:  as defined in the Recitals of this
Agreement.

     

    Senior Loan
Documents: the Senior Loan Agreement, the Senior Security Documents and
all other agreements, documents and instruments executed from time to time in
connection therewith, as the same may be amended, supplemented or otherwise
modified from time to time (including upon or after the commencement of a
Proceeding).

     

    Senior Security
Documents:  the Mortgages, all other Security Documents and any
other security agreements, pledge agreements, deeds of trust, mortgages, control
agreements or other agreements providing liens or security interests in favor of
the Senior Agent in the property described therein in order to secure the
obligations of the Borrowers or any of their Subsidiaries of Affiliates with
respect to any of the Senior Debt.

     

    Subordinated
Creditor:  as defined in the first
paragraph of this Agreement.

     

    Subordinated
Debt:  all of the obligations of the Obligors or any other
Person to Subordinated Creditor evidenced by, related or incurred pursuant to or
under the Subordinated Debt Documents.

     

    Subordinated Debt
Collateral:  any and all property, security or other interest,
tangible or intangible, purporting to secure any of the Subordinated
Debt.

     

    Subordinated Debt
Documents:  as defined in the Recitals to this
Agreement.

     

    Subordinated Debt
Default:  a default in the payment of the Subordinated Debt or
in the performance of any term, covenant or condition contained in the
Subordinated Debt Documents or any other occurrence permitting Subordinated
Creditor to accelerate the payment of all or any portion of the Subordinated
Debt.

     

    Subordinated Debt Default
Notice:  a written notice from Subordinated Creditor to Senior
Agent pursuant to which Senior Agent is notified of the occurrence of a
Subordinated Debt Default, which notice incorporates a reasonably detailed
description of such Subordinated Debt Default.

     

    Subordinated
Lien:  a Lien on Subordinated Debt Collateral granted by any
Subordinated Debt Document to, or acquired or held by, the Subordinated
Creditor, at any time, upon any Subordinated Debt Collateral that is also Senior
Debt Collateral of any Obligor to secure the Subordinated Debt.

     

    SECTION
2.            SUBORDINATION.

     

    2.1.      Subordination
of Subordinated Debt to Senior Debt.

     

    (a)           The
Subordinated Creditor hereby covenants and agrees that, notwithstanding anything
to the contrary contained in any of the Subordinated Debt Documents, the payment
of any or all of the Subordinated Debt shall be subordinate and subject in claim
and right and time of payment, to the extent and in the manner hereinafter set
forth, to the prior indefeasible Payment in Full in cash of all Senior
Debt.  Each holder of Senior Debt, whether such Senior Debt is now
outstanding or hereafter created, incurred, assumed or guaranteed, shall be
deemed to have acquired Senior Debt in reliance upon the provisions contained in
this Agreement.

     

    
      
         


      

      
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    (b)           Notwithstanding
(i) anything to the contrary contained in the Subordinated Debt Documents, (ii)
the time of incurrence of any Senior Debt or Subordinated Debt, (iii) the order
or method of attachment or perfection of any Liens securing any Senior Debt or
Subordinated Debt, (iv) the time or order of filing or recording of, or the
failure to file or record, financing statements, mortgages or other documents
required to perfect any Lien upon any Collateral, (v) the time of taking
possession or control over any Collateral, (vi) that any Senior Lien with
respect to Collateral may not have been perfected or may be or have become
subordinated, by equitable subordination or otherwise, to any other Lien, or
(vii) the rules for determining priority under any law governing relative
priorities of Liens: as between or among the Senior Agent and the Senior
Lenders, on one hand, and the Subordinated Creditor on the other hand, any and
all Senior Liens on Collateral, whether such Liens are now or hereafter held by
or on behalf of the Senior Agent or any Senior Lender or any trustee therefor,
regardless of how acquired, whether by grant, possession, statute, operation of
law, subrogation or otherwise, will be senior in all respects and prior to any
Subordinated Lien on Collateral securing any Subordinated Debt, whether such
Liens are now or hereafter held by the Subordinated Creditor or the Senior Agent
or trustee therefor, regardless of how acquired, whether by grant, possession,
statute, operation of law, subrogation or otherwise.

     

    (c)           So
long as the Senior Debt has not been Paid in Full, whether or not any Insolvency
Proceeding has been commenced by or against any Obligor, the Subordinated
Creditor hereto agrees that after the date hereof: (i) the Subordinated Creditor
shall not acquire, accept or hold any Lien on any property of any Obligor, or
any of its Subsidiaries or Affiliates securing any Subordinated Debt which
property is not also subject to the Lien of  the Senior Agent for the
benefit of the Senior Lenders and (ii) the Subordinated Creditor shall not
permit any Obligor to grant any Lien on any of its property, or permit any of
its Subsidiaries or Affiliates to grant a Lien on any of its property, to secure
Subordinated Debt unless it, or such Subsidiary or Affiliate, has granted (or
offered to grant with a reasonable opportunity for such Lien to be accepted) a
corresponding Lien on such property in favor of the Senior Lenders; provided, however,
notwithstanding clauses (i) and (ii) above, the refusal of the Senior Lenders to
accept a Lien on any property of any Obligor or any of its Subsidiaries or
Affiliates shall not prohibit the taking of a Lien on such property by the
Subordinated Creditor.

     

    (d)           Subordinated
Creditor agrees that Subordinated Creditor shall not (and hereby waives any
right to) contest or support any other Person in contesting, in any proceeding
(including any Proceeding), the existence, perfection, priority, validity or
enforceability of a Lien held by or on behalf of the Senior Agent or the Senior
Lenders in all or any part of the Collateral, or the provisions of this
Agreement, or take, or consent to or acquiesce in, the taking of, any action to
set aside, challenge or otherwise dispute the existence or priority of any
Senior Debt or the creation, attachment, perfection, enforceability, priority or
continuation of any lien or security interest of the Senior Agent or the Senior
Lenders in or on any assets of any Obligor constituting Collateral.

     

    
      
         


      

      
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    2.2.      
Subordinated
Debt Payment Restrictions.

     

    (a)           Except
for Permitted Distributions as set forth below and as permitted under the Senior
Loan Agreement, the Subordinated Creditor hereby agrees that the Subordinated
Creditor will not accept or request or demand any Distribution with respect to
the Subordinated Debt until the Senior Debt is Paid in
Full.  Notwithstanding anything contained herein to the contrary, the
Subordinated Creditor may receive (i) Scheduled Subordinated Debt Payments
consisting of interest in an amount not to exceed eight percent (8%) per annum
on the unpaid principal balance of the Subordinated Debt, (ii) payment or
reimbursement of attorneys fees and expenses, if any, required
under  the Indemnification Agreement not exceeding $50,000 in any
Fiscal Year, and (iii) the RAH Closing Date Payment, in each case of these
clauses (i)-(iii), so long as no Senior Default shall have occurred and be
continuing at the time of making any such payment (each a “Permitted
Distribution”).

     

    (b)           Notwithstanding
any provision of this Section 2.2 to the
contrary, the failure of any Obligor to make any Distribution with respect to
the Subordinated Debt by reason of the operation of this Section 2.2 shall not
be construed as preventing the occurrence of a Subordinated Debt Default under
the applicable Subordinated Debt Documents.

     

    (c)           If
any Distribution on account of the Subordinated Debt not permitted to be made by
any Obligor or accepted by Subordinated Creditor under this Agreement is made
and received by Subordinated Creditor, such Distribution shall not be commingled
with any of the assets of Subordinated Creditor, shall be held in trust by
Subordinated Creditor for the benefit of Senior Agent and Senior Lenders and
shall be promptly paid over to Senior Agent for application (in accordance with
the Senior Debt Documents) to the Senior Debt, until all of the Senior Debt is
Paid in Full.

     

    2.3.       Subordinated
Debt Standstill Provisions.

     

    (a)    
     Until the Senior Debt is Paid in Full,
Subordinated Creditor will not

     

    (i)           take
any Enforcement Action with respect to the Subordinated Debt; or

     

    (ii)          contest,
protest or object to any foreclosure proceeding or action brought by the Senior
Agent or Senior Lender with respect to any Collateral or any other exercise by
the Senior Agent or any Senior Lender of any rights and remedies relating to any
Collateral, whether under the Senior Loan Documents or otherwise;
or

     

    (iii)         object
to or exercise any rights that may arise under applicable law as a result of
(which rights are hereby waived) the forbearance by the Senior Agent or any
Senior Lender from bringing or pursuing any Enforcement Action.

     

    (b)       
  Until the Senior Debt is Paid in Full, whether or not any Proceeding
has been commenced by or against any Obligor, the Senior Agent and the Senior
Lenders will have the exclusive right to take Enforcement Action and, in
connection therewith, make determinations regarding the release, Disposition
(including, without limitation, voluntary Dispositions of Collateral by the
respective Obligors before or after a Default), or restrictions with respect to
Collateral without any consultation with or the consent of the Subordinated
Creditor and may exercise rights and remedies with respect to Collateral and
enforce the provisions of the Senior Loan Documents, all in such order and in
such manner as they may determine in the exercise of their sole
discretion.

     

    
      
         


      

      
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    (c)      
   Notwithstanding the foregoing, the Subordinated Creditor
may:

     

    (i)           file
a claim or statement of interest with respect to any Subordinated Debt; provided that a
Proceeding has been commenced by or against any Obligor;

     

    (ii)          take
any action (not adverse to the priority status of the Senior Liens, or the
rights of the Senior Agent or the Senior Lenders to exercise remedies in respect
thereof) in order to create, perfect, preserve or protect its Subordinated
Liens;

     

    (iii)       
 file any necessary responsive or defensive pleadings in opposition to any
motion, claim, adversary proceeding or other pleading made by any Person
objecting to or otherwise seeking the disallowance of the claims of the
Subordinated Creditor, in accordance with the terms of this Agreement;
and

     

    (iv)         vote
on any plan of reorganization, file any proof of claim, make other filings and
make any arguments and motions that are, in each case, in accordance with the
terms of this Agreement, with respect to the Subordinated Debt and the
Subordinated Liens.

     

    (d)    
     Any Distributions or proceeds of any Enforcement
Action obtained by Subordinated Creditor in violation of this Agreement shall in
any event be held in trust by the Subordinated Creditor for the benefit of
Senior Agent and Senior Lenders and promptly paid or delivered to Senior Agent
for the benefit of Senior Lenders in the form received until all Senior Debt is
Paid in Full.

     

    2.4.       Sale,
Transfer or other Disposition of Subordinated Debt.

     

    (a)           Subordinated
Creditor shall not sell, assign, pledge, dispose of or otherwise transfer all or
any portion of the Subordinated Debt or any Subordinated Debt Document (or
permit any refinancing thereof) unless such assignee, successor or transferee is
reasonably satisfactory to Agent and executes and delivers to Senior Agent an
agreement pursuant to which such assignee, successor or transferee, as
applicable, will become a party hereto as fully as if such person were a
signatory hereto and providing for the effectiveness of this Agreement to such
assignee, successor or transferee, as applicable.

     

    (b)           Notwithstanding
the foregoing, the subordination effected hereby shall survive any sale,
assignment, pledge, disposition or other transfer of, or any refinancing of, all
or any portion of the Subordinated Debt in violation of the foregoing
prohibition, and the terms of this Agreement shall be binding upon the
successors and assigns of Subordinated Creditor, as provided in Section
7.5.

     

    
      
         


      

      
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    2.5.       Legends.  Until
the termination of this Agreement in accordance with Section 7.12,
Subordinated Creditor will cause to be clearly, conspicuously and prominently
inserted on the face of any Subordinated Debt Document, as well as any renewals
or replacements thereof, the following legend:

     

    “THIS
INSTRUMENT IS SUBJECT TO THAT CERTAIN SUBORDINATION AND INTERCREDITOR AGREEMENT
DATED AS OF OCTOBER 25, 2010, BETWEEN RICHARD A. HOROWITZ, AS THE SUBORDINATED
CREDITOR, AND CAPITAL ONE LEVERAGE FINANCE CORPORATION, AS SENIOR AGENT FOR ALL
SENIOR LENDERS.”

     

    2.6.       Notice of
Default.  Subordinated Creditor hereby agrees to deliver a
Subordinated Debt Default Notice to Senior Agent promptly following the
occurrence of any Subordinated Debt Default.

     

    2.7.       Releases.

     

    (a)          If
in connection with:

     

    (i)           the
exercise of the Senior Agent’s remedies in respect of any of the Collateral
securing the Senior Debt, including any sale, lease, exchange, transfer or other
disposition of such Collateral; or

     

    (ii)    
     any sale, lease, exchange, transfer or other
disposition of Collateral securing the Senior Debt permitted under the terms of
the Senior Loan Documents or permitted pursuant to a waiver or consent by the
Senior Lenders of a transaction otherwise prohibited by the Senior Loan
Documents (whether or not an Event of Default under, and as defined in the
Senior Loan Documents, has occurred and is continuing);

     

    the
Senior Agent releases any of its Liens on any part of the Collateral securing
the Senior Debt (or any Guarantor from its obligations under its guaranty of any
or all of the Senior Debt), the Liens of the Subordinated Creditor, on such
Collateral (and the obligations of such Guarantor under its guaranty of any or
all of the Subordinated Debt) shall be automatically, unconditionally and
simultaneously released and the Subordinated Creditor, promptly shall execute
and deliver to the Senior Agent or to the Obligors, at the Obligors’ cost and
expense, such termination statements, releases and other documents as the Senior
Agent or any Obligor may reasonably request to effectively confirm such
release.

     

    (b)         The
Subordinated Creditor, hereby irrevocably constitutes and appoints the Senior
Agent and any officer or agent of the Senior Agent, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of the Subordinated Creditor or such
holder from time to time in the Senior Agent’s discretion, for the purpose of
carrying out the terms of this Section 2.7, to
take any and all appropriate action and to execute any and all documents and
instruments which may be necessary or desirable to accomplish the purposes of
this Section 2.7,
including, without limitation, any financing statements, endorsements or other
instruments or transfer or release.

     


    
      
         


      

      
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    SECTION
3.             BANKRUPTCY
PROCEEDINGS.

     

    3.1.       Payment,
Etc..  In the event that any Proceeding involving any Obligor
has been commenced and is continuing:

     

    (a)           All
Senior Debt shall first be Paid in Full before any Distribution shall be made to
Subordinated Creditor on account of any Subordinated Debt.

     

    (b)           Any
Distribution, whether in cash, securities or other property that would
otherwise, but for the terms hereof, be payable or deliverable in respect of the
Subordinated Debt shall be paid or delivered directly to Senior Agent (to be
held and/or applied by Senior Agent in accordance with the terms of the Senior
Debt Documents) until all Senior Debt is Paid in Full.  Subordinated
Creditor irrevocably authorizes, empowers and directs any debtor, debtor in
possession, receiver, interim receiver, receiver and manager, trustee, monitor,
liquidator, custodian, conservator or other Person having authority, to pay or
otherwise deliver all such Distributions to Senior
Agent.  Subordinated Creditor also irrevocably authorizes and empowers
Senior Agent, in the name of Subordinated Creditor, to demand, sue for, collect
and receive any and all such Distributions.

     

    (c)           Subordinated
Creditor agrees to execute, verify, deliver and file any proofs of claim in
respect of the Subordinated Debt requested by Senior Agent in connection with
any Proceeding and hereby irrevocably authorizes, empowers and appoints Senior
Agent its agent and attorney-in-fact to (i) execute, verify, deliver and
file such proofs of claim upon the failure of Subordinated Creditor promptly to
do so prior to 30 days before the expiration of the time to file any such proof
of claim and (ii) vote such claim in any such Proceeding upon the failure
of Subordinated Creditor to do so prior to 15 days before the expiration of the
time to vote any such claim; provided that Senior
Agent shall have no obligation to execute, verify, deliver, file and/or vote any
such proof of claim.  In the event that Senior Agent votes any claim
in accordance with the authority granted hereby, Subordinated Creditor shall not
be entitled to change or withdraw such vote.

     

    3.2.       DIP
Financing Issues.  If any Obligor becomes subject to any
Proceeding and the Senior Agent agrees to permit the use of “Cash Collateral” (as
such term is defined in Section 363(a) of the Bankruptcy Code) consisting of
proceeds of the Collateral or to permit any Obligor to obtain financing, whether
from the Senior Agent, the holders of the Senior Debt or any other Person, under
Section 364 of the Bankruptcy Code or any similar Bankruptcy Law that is secured
by Liens that are senior to or on a parity with all Senior Liens on any or all
of the Collateral (the “DIP Financing”), then
Subordinated Creditor:

     

    (a)           will
not contest or otherwise object to such use of Cash Collateral or such DIP
Financing on any basis available to or capable of being asserted by the
Subordinated Creditor (including, without limitation, any objection alleging any
Obligor’s failure or inability to provide “adequate protection” for any Lien of
the Subordinated Creditor on the Collateral).  The foregoing shall not
prevent the Subordinated Creditor from exercising their rights to vote for or
against a plan of reorganization;

     

    
      
         


      

      
        10

        
          

        

      

      
         


      

    


    (b)           will
agree (and is hereby deemed to consent) to the subordination of all Liens held
by the Subordinated Creditor to the Liens on the Collateral securing such DIP
Financing; and

     

    (c)           will
not request adequate protection or any other relief in connection with such DIP
Financing or use of Cash Collateral.

     

    3.3.       Relief
from the Automatic Stay.  Until the Senior
Debt is Paid in Full, the Subordinated Creditor will agree not to seek (or
support any other Person seeking) relief from the automatic stay or any other
stay in any Proceeding with respect to the Collateral without the prior written
consent of the Senior Agent, unless the Senior Agent has already filed a motion
(which remains pending) for relief from the automatic stay (or other applicable
stay) with respect to its interest in the Collateral.

     

    3.4.       Adequate
Protection.

     

    (a)          Until
the Senior Debt is Paid in Full, the Subordinated Creditor hereby agrees not to
contest (or support any other Person contesting):

     

    (i)           any
request by the Senior Agent for adequate protection with respect to the
Collateral; or

     

    (ii)          any
objection by the Senior Agent to any motion, relief, action or proceeding, which
objection is based on a claim by the Senior Agent asserting a lack of adequate
protection with respect to the Collateral.

     

    (b)          In
any Proceeding prior to the Senior Debt being Paid in Full, if the Senior Agent
is granted adequate protection with respect to the Collateral in the form of
additional collateral in connection with any Cash Collateral use or DIP
Financing, the Subordinated Creditor, may seek or request adequate protection
with respect to its interests in the Collateral in the form of a Lien on the
same additional collateral, which Lien will be subordinated to the Liens
securing the Senior Debt on the same basis as the other Liens of the
Subordinated Creditor on Collateral.

     

    3.5.       Sale
Issues.  Until the Senior
Debt is Paid in Full, the Subordinated Creditor agrees that the Subordinated
Creditor will not object to or oppose, and hereby consents to, a Disposition of
any Collateral (or any portion thereof) free and clear of Liens or other claims
under Section 363 or any other provision of the Bankruptcy Code if the Senior
Agent has consented to such Disposition of such assets or if such Disposition is
permitted under the terms of the Senior Debt Documents or permitted pursuant to
a wavier or consent by the Senior Lenders of a transaction otherwise prohibited
by the Senior Debt Documents (whether or not an Event of Default under, and as
defined in, the Senior Debt Documents has occurred and is
continuing).

     

    3.6.       Avoidance
Issues.  If the Senior
Agent or any Senior Lender is required in any Proceeding or otherwise to turn
over or otherwise pay to the estate of any Obligor any amount paid in respect of
the Senior Debt owing to such Person (a “Recovery”), then such
Senior Agent or Senior Lender will be entitled to a reinstatement of the
relevant Senior Debt with respect to all such recovered amounts.  If
this Agreement shall have been terminated prior to such Recovery, this Agreement
will be reinstated in full force and effect, and the prior termination will not
diminish, release, discharge, impair or otherwise affect the obligations of the
Subordinated Creditor under this Agreement from and after the date of
reinstatement.

     

    
      
         


      

      
        11

        
          

        

      

      
         


      

    


    3.7.       Reorganization
Securities.  If, in any Proceeding, debt obligations of any
Obligor, as reorganized debtor, secured by Liens upon any property of such
reorganized debtor are distributed pursuant to a plan of reorganization or
similar dispositive restructuring plan, on account of any Senior Debt or
Subordinated Debt, then, to the extent the debt obligations distributed on
account of the Senior Debt and the Subordinated Debt are secured by Liens upon
the same property, the provisions of this Agreement will survive the
distribution of such debt obligations pursuant to such plan and will apply with
like effect to the debt obligations so distributed, to the Liens securing such
debt obligations and the distribution of proceeds thereof.

     

    3.8.       Post-Petition
Interest.  The Subordinated Creditor will not oppose or seek to
challenge any claim by the Senior Agent for allowance in any Proceeding of
Senior Debt consisting of post-petition interest, fees or expenses to the extent
of the value of the Lien securing the obligations owing to such
claimant.

     

    3.9.       Waiver -
1111(b)(2) Issues.  The Subordinated
Creditor waives any objection or claim the Subordinated Creditor may hereafter
have against the Senior Agent or the Senior Lenders arising out of the election
of the Senior Agent or the Senior Lenders of the application of Section
1111(b)(2) of the Bankruptcy Code to any claims of the Person making such
election, and will agree that in the case of any such election the Subordinated
Creditor will have no claim or right to payment with respect to the Collateral
in or from such Proceeding.  Any reorganization securities issued with
respect to such election will be allocated solely to the holders of Senior
Debt.

     

    SECTION
4.            MODIFICATIONS
TO SENIOR LOAN DOCUMENTS AND SUBORDINATED DEBT DOCUMENTS.

     

    4.1.       Modifications
to Senior Debt Documents.  Except as otherwise required under
the Senior Debt Documents, Senior Lenders may at any time and from time to time
without the consent of or notice to Subordinated Creditor, without incurring
liability to Subordinated Creditor and without impairing or releasing the
obligations of Subordinated Creditor under this Agreement, change the manner or
place of payment or extend the time of payment of or renew or alter, amend or
modify any of the terms of the Senior Debt, or amend in any manner any
agreement, note, guarantee or other instrument evidencing or securing or
otherwise relating to the Senior Debt.

     

    4.2.       Modifications
to Subordinated Debt Documents.  Until the Senior Debt has been
Paid in Full, Subordinated Creditor shall not (a) agree to any amendment,
modification or supplement to the Subordinated Debt Documents that adversely
affects any Senior Lender without the prior written consent of Senior Agent, (b)
agree to any other amendment, modification or supplement to the Subordinated
Debt Documents without providing five days’ prior written notice to the Senior
Agent or (c) waiver, release, forgive or convert to equity or otherwise
relinquish any Subordinated Debt, or terminate, release, let expire, waiver or
modify the Subordinated Liens or the Subordinated Debt Collateral.

     

    
      
         


      

      
        12

        
          

        

      

      
         


      

    


    SECTION
5.            WAIVER OF CERTAIN RIGHTS BY
SUBORDINATED CREDITOR.

     

    5.1.       Marshaling.  Subordinated
Creditor hereby waives any rights the Subordinated Creditor may have under
applicable law to assert the doctrine of marshaling or to otherwise require
Senior Agent or Senior Lenders to marshal any property of any Obligor or any
guarantor of the Senior Debt for the benefit of Subordinated
Creditor.

     

    5.2.       Rights
Relating to Senior Agent’s Actions with respect to the
Collateral.  Subordinated Creditor hereby waives, to the extent
permitted by applicable law, any rights that the Subordinated Creditor may have
to enjoin or otherwise obtain a judicial or administrative order preventing
Senior Agent or Senior Lenders from taking, or refraining from taking, any
action with respect to all or any part of the Collateral.  Without
limitation of the foregoing, Subordinated Creditor hereby agrees (a) that the
Subordinated Creditor has no right to direct or object to the manner in which
Senior Agent and Senior Lenders apply the proceeds of the Collateral resulting
from the exercise by Senior Agent and Senior Lenders of rights and remedies
under the Senior Debt Documents to the Senior Debt and (b) that Senior Agent has
not assumed any obligation to act as the Senior Agent for Subordinated Creditor
with respect to the Collateral.

     

    SECTION
6.           REPRESENTATIONS AND WARRANTIES OF
SUBORDINATED CREDITOR.  Subordinated Creditor hereby represents
and warrants to Senior Agent and Senior Lenders that as of the date
hereof:  (a) Subordinated Creditor is a natural person;
(b) Subordinated Creditor has the capacity, power and authority to enter
into, execute, deliver and carry out the terms of this Agreement; (c) the
execution of this Agreement by Subordinated Creditor will not violate or
conflict with any material agreement binding upon Subordinated Creditor or any
law, regulation or order or require any consent or approval which has not been
obtained; (d) this Agreement is the legal, valid and binding obligation of
Subordinated Creditor, enforceable against Subordinated Creditor in accordance
with its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors’ rights generally and by equitable principles; and (e)
Subordinated Creditor is the sole holder and owner, beneficially and of record,
of the Subordinated Debt Documents (except to the extent of Marc Schorr’s
interest in certain Subordinated Debt Documents, as heretofore disclosed to
Senior Agent) and the Subordinated Debt.

     

    SECTION
7.            MISCELLANEOUS

     

    7.1.       SUBROGATION.  After
the Senior Debt is Paid in Full, Subordinated Creditor shall be subrogated to
the rights of Senior Agent and Senior Lenders to receive Distributions with
respect to the Senior Debt until the Subordinated Debt is paid in full in
cash.  Subordinated Creditor agrees that in the event that all or any
part of a payment made with respect to the Senior Debt is recovered from the
holders of the Senior Debt in a Proceeding or otherwise, any Distribution
received by Subordinated Creditor with respect to the Subordinated Debt at any
time after the date of the payment that is so recovered, whether pursuant to the
right of subrogation provided for in this Agreement or otherwise, shall be
deemed to have been received by Subordinated Creditor in trust as property of
the holders of the Senior Debt and Subordinated Creditor shall forthwith deliver
the same to Senior Agent for the benefit of the Senior Lenders for application
to the Senior Debt until the Senior Debt is Paid in Full.

     

    
      
         


      

      
        13

        
          

        

      

      
         


      

    


    7.2.       MODIFICATION.  Any
modification or waiver of any provision of this Agreement, or any consent to any
departure by any party from the terms hereof, shall not be effective in any
event unless the same is in writing and signed by Senior Agent and Subordinated
Creditor, and then such modification, waiver or consent shall be effective only
in the specific instance and for the specific purpose given.  Any
notice to or demand on any party hereto in any event not specifically required
hereunder shall not entitle the party receiving such notice or demand to any
other or further notice or demand in the same, similar or other circumstances
unless specifically required hereunder.

     

    7.3.       FURTHER
ASSURANCES.  Each party to this Agreement promptly will execute
and deliver such further instruments and agreements and do such further acts and
things as may be reasonably requested in writing by any other party hereto that
may be necessary or desirable in order to effect fully the purposes of this
Agreement.

     

    7.4.       NOTICES.  Unless
otherwise specifically provided herein, any notice delivered under this
Agreement shall be in writing addressed to the respective party as set forth
below and may be personally served, telecopied or sent by overnight courier
service or certified or registered United States mail and shall be deemed to
have been given (a) if delivered in person, when delivered; (b) if delivered by
telecopy, on the date of transmission if transmitted on a business day before
4:00 p.m. New York City  time) or, if not, on the next succeeding
business day; (c) if delivered by overnight courier, one business day after
delivery to such courier properly addressed; or (d) if by mail, four (4)
business days after deposit in the mail, postage prepaid and properly
addressed.

     

    Notices
shall be addressed as follows:

     

    If to
Subordinated Creditor:

     

    Richard
A. Horowitz

    90
Wheatley Road

    Old
Westbury, New York  11568

    Phone:   (631)
694-9800

    Fax:  (631)
694-9804

     

    If to
Senior Agent or Senior Lenders:

     

    Capital
One Leverage Finance Corporation

    265
Broadhollow Road

    Melville,
New York  11747

    Attention:
Michael S. Burns

    Phone:  (631)
531-2775

    Fax:  (631)
531-2765

     

    
      
         


      

      
        14

        
          

        

      

      
         


      

    


    with
copies to:

     

    McGuireWoods,
LLP

    1345
Avenue of the Americas

    New York,
New York  10105

    Attention:  Jerry
Saccone

    Phone:  (212)
547-2126

    Fax:  (212)
715-2305


     

    or in any
case, to such other address as the party addressed shall have previously
designated by written notice to the serving party, given in accordance with this
Section
9.

     

    7.5.       SUCCESSORS AND
ASSIGNS.  This Agreement shall inure to the benefit of, and
shall be binding upon, the respective successors and assigns of Senior Agent,
Senior Lenders and the Subordinated Creditor.  To the extent permitted
under the Senior Debt Documents, Senior Lenders may, from time to time, without
notice to Subordinated Creditor, assign or transfer any or all of the Senior
Debt or any interest therein to any Person and, notwithstanding any such
assignment or transfer, or any subsequent assignment or transfer, the Senior
Debt shall, subject to the terms hereof, be and remain Senior Debt for purposes
of this Agreement, and every permitted assignee or transferee of any of the
Senior Debt or of any interest therein shall, to the extent of the interest of
such permitted assignee or transferee in the Senior Debt, be entitled to rely
upon and be the third party beneficiary of the subordination provided under this
Agreement and shall be entitled to enforce the terms and provisions hereof to
the same extent as if such assignee or transferee were initially a party
hereto.

     

    7.6.       RELATIVE
RIGHTS.  This Agreement shall define the relative rights of
Senior Agent, Senior Lenders and Subordinated Creditor. Nothing in this
Agreement shall (a) impair, as among the Obligors, Senior Agent and Senior
Lenders and as among the Obligors and Subordinated Creditor, the obligation of
the Obligors with respect to the payment of the Senior Debt and the Subordinated
Debt in accordance with their respective terms or (b) affect the relative rights
of Senior Agent, Senior Lenders or Subordinated Creditor with respect to any
other creditors of the Obligors.

     

    7.7.       NO THIRD PARTY
BENEFICIARIES.  This Agreement is solely for the benefit of
Senior Agent, Senior Lenders, Subordinated Creditor and their respective
successors and assigns, and no Obligor nor any other persons or entities (other
than as expressly set forth herein) are intended to be third party beneficiaries
hereunder or to have any right, benefit, priority or interest under, or because
of the existence of, or to have any right to enforce, this
Agreement.  The Senior Agent, Senior Lenders and Subordinated Creditor
shall have the right to modify or terminate this Agreement at any time without
notice to, execution and delivery of any instrument by, any acknowledgement of,
or other approval of any Obligor or any other person or entity.

     

    7.8.       CONFLICT.  In the
event of any conflict between any term, covenant or condition of this Agreement
and any term, covenant or condition of any of the Subordinated Debt Documents,
the provisions of this Agreement shall control and govern.

     

    
      
         


      

      
        15

        
          

        

      

      
         


      

    


    7.9.       HEADINGS.  The
paragraph headings used in this Agreement are for convenience only and shall not
affect the interpretation of any of the provisions hereof.

     

    7.10.     COUNTERPARTS.  This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.  Signatures delivered by PDF or fax or other similar
electronic means shall be deemed originals.

     

    7.11.     SEVERABILITY.  In
the event that any provision of this Agreement is deemed to be invalid, illegal
or unenforceable by reason of the operation of any law or by reason of the
interpretation placed thereon by any court or governmental authority, the
validity, legality and enforceability of the remaining provisions of this
Agreement shall not in any way be affected or impaired thereby, and the affected
provision shall be modified to the minimum extent permitted by law so as most
fully to achieve the intention of this Agreement.

     

    7.12.     TERMINATION OF
AGREEMENT.  This Agreement shall remain in full force and
effect until the Senior Debt is Paid in Full after which this Agreement shall
terminate without further action on the part of the parties hereto.

     

    7.13.     APPLICABLE
LAW.  This Agreement shall be governed by and shall be
construed and enforced in accordance with the internal laws of New York
applicable therein and, without regard to conflicts of law
principles.

     

    7.14.     CONSENT TO
JURISDICTION.  THE SUBORDINATED CREDITOR HEREBY CONSENTS AND
AGREES THAT THE COURTS LOCATED IN NEW YORK SHALL HAVE NON-EXCLUSIVE JURISDICTION
TO HEAR AND DETERMINE ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT PROVIDED, THAT
SUBORDINATED CREDITOR AND THE OBLIGORS ACKNOWLEDGE THAT ANY APPEALS FROM THOSE
COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK; PROVIDED THAT NOTHING
IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE SENIOR AGENT FROM
BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO ENFORCE
A JUDGMENT OR OTHER COURT ORDER RENDERED IN FAVOR OF SENIOR
AGENT.  SUBORDINATED CREDITOR EXPRESSLY SUBMITS AND CONSENTS IN
ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT
FOR SUCH ENFORCEMENT REMEDIES, AND SUBORDINATED CREDITOR HEREBY WAIVES ANY
OBJECTION THAT SUBORDINATED CREDITOR MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE
GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH
COURT.  SUBORDINATED CREDITOR HEREBY WAIVES PERSONAL SERVICE OF THE
SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND
AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH PARTY AT ITS ADDRESS SET FORTH IN
SECTION 9 OF
THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE
EARLIER OF SUCH PARTY’S ACTUAL RECEIPT THEREOF OR 3 BUSINESS DAYS AFTER DEPOSIT
IN THE MAIL, PROPER POSTAGE PREPAID.

     

    
      
         


      

      
        16

        
          

        

      

      
         


      

    


    7.15.    WAIVER OF JURY
TRIAL.  SUBORDINATED CREDITOR AND SENIOR AGENT HEREBY WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE SUBORDINATED DEBT DOCUMENTS OR
ANY OF THE SENIOR DEBT DOCUMENTS.  EACH OF SUBORDINATED CREDITOR AND
SENIOR AGENT ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER
INTO A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE WAIVER IN ENTERING
INTO THIS AGREEMENT AND THE SENIOR DEBT DOCUMENTS AND THAT EACH WILL CONTINUE TO
RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS.  EACH OF
SUBORDINATED CREDITOR AND SENIOR AGENT WARRANTS AND REPRESENTS THAT EACH HAS HAD
THE OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH LEGAL COUNSEL, AND THAT EACH
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.

     

    [Remainder
of page intentionally left blank; signatures begin on following
page]


    
      
         


      

      
        17

        
          

        

      

      
         


      

    


    IN WITNESS WHEREOF,
Subordinated Creditor and Senior Agent have caused this Agreement to be executed
as of the date first above written.

     

    
      
        
          
            	 
      	
                    SUBORDINATED CREDITOR:

                  
	 
      	 
      
	 
      	
                    /s/ Richard A. Horowitz

                  
	 
      	
                    RICHARD
      A. HOROWITZ

                  
	 
      	 
      
	 
      	
                    SENIOR AGENT:

                  
	 
      	 
      
	 
      	
                    CAPITAL ONE LEVERAGE FINANCE
      

                    CORPORATION, as Senior
      Agent

                  
	 
      	 
      
	 
      	
                    By: 

                  	
                    /s/ Michael S. Burns

                  
	 
      	
                    Name:
      Michael S. Burns

                  
	 
      	
                    Title:
      Senior Vice
President

                  


          

        

      

    

    


    
      
        
          	
                  ACKNOWLEDGED
      AND AGREED

                
	
                  AS
      OF THE DATE HEREOF BY:

                
	 
      
	
                  OBLIGORS:

                
	 
      
	
                  P&F
      INDUSTRIES, INC.

                
	 
      
	
                  By: 

                	
                  /s/ Joseph A. Molino,
Jr.

                
	
                  Name:
      Joseph A. Molino, Jr.

                
	
                  Title:
      Vice President

                
	 
      
	
                  FLORIDA
      PNEUMATIC MANUFACTURING

                
	
                  CORPORATION

                
	 
      
	
                  By: 

                	
                  /s/ Joseph A. Molino,
Jr.

                
	
                  Name:
      Joseph A. Molino, Jr.

                
	
                  Title:
      Vice President

                
	 
      
	
                  HY-TECH
      MACHINE, INC.

                
	 
      	 
      
	
                  By:

                	
                  /s/ Joseph A. Molino,
Jr.

                
	
                  Name:
      Joseph A. Molino, Jr.

                
	
                  Title:
      Vice President

                


        

      

    

    


    SUBORDINATION
AND INTERCREDITOR AGREEMENT

    (Richard
A. Horowitz)

    Signature
Page



    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

    


    
      
        	
                NATIONWIDE
      INDUSTRIES, INC.

              
	 
      	 
      
	
                By: 

              	
                /s/ Joseph A. Molino,
Jr.

              
	
                Name:
      Joseph A. Molino, Jr.

              
	
                Title:
      Vice President

              
	 
      
	
                CONTINENTAL
      TOOL GROUP, INC.

              
	 
      
	
                By:

              	
                /s/ Joseph A. Molino,
Jr.

              
	
                Name:
      Joseph A. Molino, Jr.

              
	
                Title:
      Vice President

              
	 
      
	
                COUNTRYWIDE
      HARDWARE, INC.

              
	 
      
	
                By:

              	
                /s/ Joseph A. Molino,
Jr.

              
	
                Name:
      Joseph A. Molino, Jr.

              
	
                Title:
      Vice President

              
	 
      
	
                EMBASSY
      INDUSTRIES, INC.

              
	 
      
	
                By:

              	
                /s/ Joseph A. Molino,
Jr.

              
	
                Name:
      Joseph A. Molino, Jr.

              
	
                Title:
      Vice President

              
	 
      
	
                GREEN
      MANUFACTURING, INC.

              
	 
      
	
                By:

              	
                /s/ Joseph A. Molino,
Jr.

              
	
                Name:
      Joseph A. Molino, Jr.

              
	
                Title:
      Vice President

              
	 
      
	
                PACIFIC
      STAIR PRODUCTS, INC.

              
	 
      
	
                By:

              	
                /s/ Joseph A. Molino,
Jr.

              
	
                Name:
      Joseph A. Molino, Jr.

              
	
                Title:
      Vice President

              


      

    

    


    SUBORDINATION
AND INTERCREDITOR AGREEMENT

    (Richard
A. Horowitz)

    Signature
Page


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

    


    
      
        	
                WILP
      HOLDINGS, INC.

              
	 
      
	
                By:

              	
                /s/ Joseph A. Molino,
Jr.

              
	
                Name:
      Joseph A. Molino, Jr.

              
	
                Title:
      Vice President

              
	 
      
	
                WOODMARK
      INTERNATIONAL, L.P.

              
	 
      
	
                By:

              	
                /s/ Joseph A. Molino,
Jr.

              
	
                Name:
      Joseph A. Molino, Jr.

              
	
                Title:
      Vice President

              


      

    

    


    SUBORDINATION
AND INTERCREDITOR AGREEMENT

    (Richard
A. Horowitz)

    Signature
Page