Exhibit
10.1


 




	
  CITIBANK, N.A.

  730 Veterans Memorial Highway

  Hauppauge, New York 11788

  	
   

  	
  HSBC BANK USA, NATIONAL ASSOCIATION

  534 Broad Hollow Road

  Melville, New York 11747

  






 


November 2, 2009


 


P&F Industries, Inc.


Florida Pneumatic Manufacturing Corporation


Embassy Industries, Inc.


Green Manufacturing, Inc.


Countrywide Hardware, Inc.


Nationwide Industries, Inc.


Woodmark International, L.P.


Pacific Stair Products, Inc.


WILP Holdings, Inc.


Continental Tool Group, Inc.


Hy-Tech Machine, Inc.


 


445
Broadhollow Road, Suite 100


Melville,
NY  11788


Attention:  Joseph A. Molino, Vice President


 


Ladies &
Gentlemen:


 


Reference
is made to that certain Credit Agreement, dated as of June 30, 2004, by
and among P&F Industries, Inc.,
Florida Pneumatic Manufacturing Corporation, Embassy Industries, Inc.,
Green Manufacturing, Inc., Countrywide Hardware, Inc., Nationwide
Industries, Inc., Woodmark International, L.P., Pacific Stair Products, Inc.,
WILP Holdings, Inc., Continental Tool Group, Inc. and Hy-Tech Machine, Inc.
(each, a “Co-Borrower” and collectively, 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 (as same has been and may be further amended, restated,
supplemented or otherwise modified, from time to time, the “Credit Agreement”),
pursuant to which the Lenders made available to the Co-Borrowers certain
financial accommodations.  Capitalized
terms used herein shall have the meanings given to them in the Credit
Agreement.


 


You previously informed the
Bank of the existence of one or more Defaults or Events of Default under the
Credit Agreement (the “Existing Defaults”), including, without limitation, (a) the
Events of Default arising because of the Co-Borrower’s non-compliance with Section 7.13(b) of
the Credit Agreement, Minimum Capital Base, Section 7.13(c) of
the Credit Agreement, Consolidated Senior Debt to Consolidated EBITDA, and
Section 7.13(e) of the Credit Agreement, No Consolidated Net Loss,
each for the fiscal quarter ended June 30, 2009 and Section 3.2 of
Amendment No. 20 and Waiver to Credit Agreement, dated as of August 27,
2009, requiring Consolidated EBITDA of not less than $460,000 for the month
ending September 30, 2009 and (b) the Default arising as of result of
the Borrower’s projected non-compliance with Section 7.13(c) and 7.13(e) of
the Credit Agreement for the fiscal quarter ended September 30, 2009.


 


You
have requested that the Bank continue to extend the currently outstanding
Revolving Credit Loans and the Additional Term Loans (collectively, the “Existing
Loans”) through December 31, 2009, but without waiving the Existing
Defaults, so long as no other Default or Event of Default (other than the


 

















 


Existing
Defaults) hereinafter occurs.  Pursuant
to the terms of the Credit Agreement, upon the occurrence of a Default or an
Event of Default, the Administrative Agent and the Lenders may, among other
remedies, terminate the Existing Loans and declare all Obligations of the Co-Borrowers
and all other amounts owing under the Credit Agreement and the Notes, to become
immediately due and payable and/or to impose the rate of interest described in Section 3.01(e) of
the Credit Agreement.  In addition, the
Lenders may, but shall not be required to, entertain additional requests for
Revolving Credit Loans and other credit and financial accommodations under the
Credit Agreement through December 31, 2009, but the making of any future
Revolving Credit Loans and credit and financial accommodations to the
Co-Borrowers is without waiver to the Lenders’ right to cease making Revolving
Credit Loans and credit and financial accommodations to the Co-Borrowers
without further notice at any time and without waiver of the Existing Defaults,
provided that, in any event, the Lenders shall not make Revolving Credit
Loans to the Co-Borrowers in excess of $17,500,000, in the aggregate.


 


The Administrative Agent and
the Lenders hereby expressly reserve all rights and remedies arising from any
Default or Event of Default that may have occurred and be continuing, or may in
the future occur, under the Credit Agreement or any other Loan Document whether
at law or in equity, including, without limitation, the right to terminate the
Credit Agreement.  All such rights,
remedies or causes of action relating to any existing Defaults or Events of
Default may be enforced or exercised at any time and from time to time.  Neither the continuation of the Existing Loans
or the making of additional Revolving Credit Loans and other credit and
financial accommodations nor the failure or delay on the part of the Administrative
Agent and/or the Lenders in exercising any of the rights and remedies with
respect to any Default or Event of Default shall operate as a waiver thereof or
require the Administrative Agent and/or any Lender to make any further Loan at
any other time, nor shall a single or partial exercise thereof preclude any
other or further exercise of any other right or remedy.


 


By
signing below each Co-Borrower on its own behalf and on behalf of its
successors and assigns hereby releases (i) each Lender and the
Administrative Agent and all of the affiliates of each Lender and the
Administrative Agent, and each of their respective successors and assigns, and (ii) all
of the shareholders, directors, officers, employees, attorneys, agents and
representatives of each Lender and the Administrative Agent and such
affiliates, and their respective heirs, executors, successors and assigns
(collectively, the “Released Persons”), from any and all claims,
demands, liabilities, actions and causes of action of any nature whatsoever,
whether liquidated or unliquidated, known or unknown, matured or unmatured,
fixed or contingent which any Co-Borrower had, has or may have had against any
of the Released Persons arising out of or in any way relating to the
Obligations, any Collateral (as defined in the Security Agreement), any Loan
Document or any document, dealing or other matter in connection with any Loan
Document or any Collateral referenced therein, in each case to the extent
arising on or prior to the date hereof or out of, or relating to, actions,
dealings or other matters occurring prior to the date hereof (including any
action or omission of any Released Person prior to the date hereof), the
negotiation and documentation of this Agreement, and any of the transactions
made or contemplated to be made hereunder or thereunder.  (collectively the “Released Claims”).  Each Co-Borrower acknowledges and agree that (i) this
release may be pleaded as a full and complete defense and may be used as a
basis for an injunction against any action, suit or other proceeding which may
be instituted, prosecuted or attempted in breach of the provisions of such
release; and (ii) no fact, event, circumstance, evidence or transaction
which could now be asserted or which may hereafter be discovered shall affect
in any manner the final and unconditional nature of such releases.


 


[the
next page is the signature page]


 


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  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/
  Alan M. Harris

  
	
   

  	
  Name:

  	
  Alan
  M. Harris

  
	
   

  	
  Title:

  	
  Vice
  President

  
				



 


ACCEPTED
AND AGREED:


 


P&F INDUSTRIES, INC.


FLORIDA
PNEUMATIC  MANUFACTURING CORPORATION


EMBASSY
INDUSTRIES, INC.


GREEN
MANUFACTURING, INC.


COUNTRYWIDE
HARDWARE, INC.


NATIONWIDE
INDUSTRIES, INC.


WOODMARK
INTERNATIONAL, L.P.


	
  By:

  	
  Countrywide
  Hardware, Inc., its General Partner

  



PACIFIC
STAIR PRODUCTS, INC.


WILP
HOLDINGS, INC.


CONTINENTAL
TOOL GROUP, INC.


HY-TECH
MACHINE, INC.


 


 


	
  By:

  	
  /s/ Joseph A.
  Molino, Jr.

  	
   

  
	
   

  	
  Joseph A.
  Molino, Jr., the Vice President of each of the corporations named above

  	
   

  
	
   

  	
   

  	
   

  
	
  cc:

  	
  Richard Goodman, General
  Counsel, P&F Industries, Inc.

  
				



 


[signature
page to Letter dated November 2, 2009]


 


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