EXHIBIT 4.5


P&F INDUSTRIES, INC.


AMENDMENT NO. 3

TO

CREDIT AGREEMENT


THIS AMENDMENT NO. 3 TO
CREDIT AGREEMENT, is entered into as of February 13,
2006 (the “Amendment”), by and among P&F
INDUSTRIES, INC., a Delaware corporation (“P&F”), FLORIDA
PNEUMATIC MANUFACTURING CORPORATION, a Florida corporation (“Florida
Pneumatic”), EMBASSY INDUSTRIES, INC., a
New York corporation (“Embassy”), GREEN
MANUFACTURING, INC., a Delaware corporation (“Green”), COUNTRYWIDE HARDWARE, INC., a Delaware
corporation (“Countrywide”), NATIONWIDE
INDUSTRIES, INC., a Florida corporation (“Nationwide”), WOODMARK INTERNATIONAL, L.P., a Delaware limited partnership
(“Woodmark”), PACIFIC STAIR PRODUCTS, INC., a
Delaware corporation (“Pacific”) and WILP HOLDINGS, INC.,
a Delaware corporation (“WILP”; and collectively with P&F, Florida
Pneumatic, Embassy, Green, Countrywide, Nationwide, Woodmark and Pacific, the “Co-Borrowers”),
CITIBANK, N.A. and HSBC BANK
USA, NATIONAL ASSOCIATION (formerly known as HSBC Bank USA)
(collectively, the “Lenders”) and CITIBANK, N.A.,
as Administrative Agent for the Lenders.


BACKGROUND


P&F, Florida Pneumatic, Embassy, Green,
Countrywide, Nationwide and Woodmark (the “Original Co-Borrowers”), the Lenders
and the Administrative Agent are parties to a Credit Agreement, dated as of June 30,
2004 (as same has been and may be further amended, restated, supplemented or
modified, the “Credit Agreement”), pursuant to which the Lenders provide the
Original Co-Borrowers with certain financial accommodations.


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


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


ARTICLE


Amendments to Credit Agreement.


Section   1.1. The first paragraph of the Credit
Agreement is hereby amended in its entirety to provide as follows:


CREDIT AGREEMENT   dated
as of June 30, 2004, by and among P&F
INDUSTRIES, INC., a Delaware corporation (“P&F”), FLORIDA PNEUMATIC MANUFACTURING CORPORATION,
a Florida corporation (“Florida Pneumatic”), EMBASSY
INDUSTRIES, INC., a New York corporation (“Embassy”), GREEN MANUFACTURING, INC., a Delaware
corporation, (“Green”), COUNTRYWIDE HARDWARE,
INC., a Delaware corporation (“Countrywide”), NATIONWIDE INDUSTRIES, INC., a Florida
corporation (“Nationwide”), WOODMARK INTERNATIONAL,
L.P., a Delaware limited partnership (“Woodmark”), PACIFIC STAIR PRODUCTS, INC., a Delaware corporation (“Pacific”)
and WILP HOLDINGS, INC., a Delaware
corporation (“WILP”; and collectively with P&F, Florida Pneumatic, Embassy,
Green, Countrywide, Nationwide and Pacific, the “Co-Borrowers”), the LENDERS which from time to time are parties to this
Agreement (individually a “Lender” and, collectively, the “Lenders”) and CITIBANK, N.A., a national banking association, as
Administrative Agent for the Lenders (the “Administrative Agent”).











Section 1.2.  Schedule
I to the Credit Agreement is hereby amended in its entirety and replaced with
Schedule I attached to this Amendment.


Section 1.3.  Exhibits
A, B and C to the Credit Agreement are hereby amended in their entirety and
replaced with Exhibits A, B and C, respectively, attached to this Amendment.


ARTICLE II.


Waiver.


The Lenders hereby waive
compliance by the Co-Borrowers with the Credit Agreement and the other Loan
Documents, including, but not limited to, Section 3.01 of the Security
Agreement, and hereby waive any Default or Event of Default that would arise
under the Credit Agreement, including, but not limited to, the Event of Default
that would arise under Section 8.01(b)(ii) of the Credit Agreement,
each with respect to the establishment and use by the Co-Borrowers of
additional locations for the location, use, storage and maintenance of the
Co-Borrowers’ Collateral (as defined in the Security Agreement) in addition to
those locations originally described in the Perfection Certificates attached to
the Security Agreement (the “Original Collateral Locations”) and/or the
relocation of Collateral from the Original Collateral Locations to those
locations specified on Schedule A attached hereto.


ARTICLE III.


Conditions of Effectiveness; Further Conditions.


Section 3.1.  This Amendment shall become effective as of the
date hereof, upon receipt by the Administrative Agent of the following:


(a)    this
Amendment, duly executed by each Co-Borrower;


(b)   an amended
and restated Revolving Credit Note, substantially in the form of Exhibit A
attached hereto, duly executed by each Co-Borrower in favor of each Lender;


(c)    an amended
and restated Term Note, substantially in the form of Exhibit C attached
hereto, duly executed by each Co-Borrower in favor of each Lender;


(d)   an
Amendment to Pledge Agreement, substantially in the form of Exhibit 1
attached hereto, duly executed by Countrywide, accompanied by the original
stock certificates for Pacific and WILP, along with duly executed stock powers;


(e)    a Joinder
Agreement, substantially in the form of Exhibit 2 attached hereto, duly
executed by Pacific and WILP and acknowledged by each other Co-Borrower;


(f)    a
certificate of the Secretary or Assistant Secretary of each Co-Borrower,
substantially in the form of Exhibit 3 attached hereto;


(g)    a Pledge
Agreement, substantially in the form of Exhibit I to the Credit Agreement,
duly executed by WILP and accompanied by the original partnership certificate
of Woodmark, along with a duly executed equity power;


(h)   an opinion
of counsel with respect to Pacific and WILP, in form and substance satisfactory
to the Administrative Agent and its counsel;


(i)    a
certificate of insurance indicating insurance coverage for Pacific and WILP, in
form and substance satisfactory to the Administrative Agent; and


(j)     copies of
all documents evidencing the transfer of partnership interest in Woodmark from
P&F to WILP.



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Section 3.2.  The Co-Borrowers hereby covenant and agree to
deliver to the Administrative Agent, within thirty (30) days from the date hereof,
a landlord’s waiver, in form and substance satisfactory to the Administrative
Agent, with respect to each of the following premises: (i) 2601 Technology
Drive, Plano, TX 75074 (Woodmark International LP), (ii) 1335 Sycamore
Avenue, Vista, CA 92081 (Countrywide Hardware, Inc.) and (iii) 8080
Troon Circle, Suite 180, Austell, GA 30168 (Woodmark International LP).


ARTICLE IV.


Representations and Warranties; Effect on Credit
Agreement.


Section 4.1. Each
Co-Borrower hereby represents and warrants as follows:


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


b.      Upon the
effectiveness of this Amendment, the Co-Borrowers hereby reaffirm all
covenants, representations and warranties made in the Credit Agreement to the
extent that the same are not amended hereby and each Co-Borrower agrees that
all such covenants, representations and warranties shall be deemed to have been
remade as of the date hereof.


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


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


Section 4.2.  Effect on Credit Agreement and Loan Documents.


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


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


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


d.      The other
Loan Documents and all agreements, instruments and documents executed and
delivered in connection with the Credit Agreement and any other Loan Documents
shall each be deemed to be amended and supplemented hereby to the extent
necessary, if any, to give effect to the provisions of this Amendment.


ARTICLE V.


Miscellaneous.


Section 5.1.  This
Amendment shall be governed by and construed in accordance with the laws of the
State of New York.


Section 5.2.  Section headings
in this Amendment are included herein for convenience of reference only and
shall not constitute a part of this Amendment for any other purpose.



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Section 5.3.  This Amendment may be executed in one or more
counterparts, each of which shall constitute an original, and all of which,
taken together, shall be deemed to constitute one and the same agreement.


ARTICLE V.


Joinder.


Each of Pacific and WILP hereby acknowledges and
agrees that from and after the date hereof, (i) it shall be and become a
Co-Borrower under, and in accordance with and subject to the Credit Agreement, (ii) it
shall be bound by the terms of the Credit Agreement and each other Loan
Agreement to which it is a party, (iii) it will perform in accordance with
the terms of the Credit Agreement and the other Loan Documents to which it is a
party, and (iv) it shall be jointly and severally liable with the other Co-Borrowers
for all of the Obligations including without limitation those incurred prior to
the date hereof.


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




	
  

  	
   

  	
  P&F INDUSTRIES, INC.

  
	
   

  	
   

  	
  FLORIDA PNEUMATIC MANUFACTURING

  
	
   

  	
   

  	
  CORPORATION

  
	
   

  	
   

  	
  EMBASSY INDUSTRIES, INC.

  
	
   

  	
   

  	
  GREEN MANUFACTURING, INC.

  
	
   

  	
   

  	
  COUNTRYWIDE HARDWARE, INC.

  
	
   

  	
   

  	
  NATIONWIDE INDUSTRIES, INC.

  
	
   

  	
   

  	
  WOODMARK INTERNATIONAL, L.P.

  
	
   

  	
   

  	
  By:

  	
  Countrywide Hardware, Inc., its General

  
	
   

  	
   

  	
   

  	
  Partner

  
	
   

  	
   

  	
  PACIFIC STAIR PRODUCTS, INC.

  
	
   

  	
   

  	
  WILP HOLDINGS, INC.

  
	
   

  	
   

  	
  By:

  	
   /s/ JOSEPH
  A. MOLINO, JR.

  
	
   

  	
   

  	
   

  	
  Joseph A.
  Molino, Jr.,

  
	
   

  	
   

  	
   

  	
  the
  President of Green Manufacturing, Inc.

  
	
   

  	
   

  	
   

  	
  and the
  Vice President of each of the other corporations named above

  
	
   

  	
   

  	
   

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

  
	
   

  	
   

  	
   

  	
  Administrative Agent

  
	
   

  	
   

  	
   

  	
  By: /s/ STEPHEN KELLY

  
	
   

  	
   

  	
   

  	
  Name: Stephen Kelly

  
	
   

  	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  	
  HSBC BANK USA, NATIONAL

  
	
   

  	
   

  	
   

  	
  ASSOCIATION, as a Lender

  
	
   

  	
   

  	
   

  	
  By: /s/ RAYMOND FINCKEN

  
	
   

  	
   

  	
   

  	
  Name: Raymond Fincken

  
	
   

  	
   

  	
   

  	
  Title: Vice President

  






 



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