**EXHIBIT2.3**

 

**SETTLEMENTAGREEMENT and AMENDMENT TO PURCHASE AGREEMENT**

 

THIS SETTLEMENT AGREEMENT and AMENDMENT TOPURCHASE AGREEMENT (the “Settlement Agreement”), dated as of July 22, 2005, byand among MARK C. WELDON (the “Seller”), P&F INDUSTRIES, INC., a Delawarecorporation (“P&F”), and COUNTRYWIDE HARDWARE, INC., a Delaware corporation(“CWH” and together with P&F, the “Buyer”).

 

WHEREAS, the Seller and P&F entered intoa Stock Purchase Agreement, dated as of May 3, 2002 (the “Purchase Agreement”),whereby CWH, as assignee of P&F’s interest therein, purchased from theSeller all of the outstanding shares of capital stock of Nationwide Industries,Inc., a Florida corporation (the “Company”).

 

WHEREAS, pursuant to Section 3 of thePurchase Agreement, the Seller is entitled to receive a Contingent Payment (assuch term is defined therein).

 

WHEREAS, the Seller and the Buyer wish tocompromise and come to a full and final settlement of the remaining ContingentPayment required under the Purchase Agreement, and to modify and amend thePurchase Agreement as set forth herein.

 

WHEREAS, the Seller, the Buyer and North StarTrust Company (the “Escrow Agent”) are parties to an Escrow Agreement, dated asof May 3, 2002 (the “Escrow Agreement”), pursuant to which the Seller depositedwith the Escrow Agent, among other monies, five hundred thousand dollars($500,000) pursuant to Section 2.1 of the Purchase Agreement (constituting theTax Escrow, as such term is defined in the Purchase Agreement).

 

WHEREAS, the Buyer is willing to release theTax Escrow to the Seller.

 

NOW THEREFORE, in consideration of the mutualpromises and agreements contained herein, the parties agree as follows:

 

1. Settlement Amount.  Infull satisfaction of all amounts that are due or may become due from the Buyerto the Seller pursuant to Section 3 of the Purchase Agreement or otherwise, theBuyer shall pay to the Seller, and the Seller agrees to accept from the Buyer,the sum of one million two hundred fifty thousand dollars ($1,250,000) (the “SettlementAmount”).  The Settlement Amount will bepaid simultaneously with the execution of this Settlement Agreement by wiretransfer to an account designated by the Seller.

 

2. Tax Escrow. Concurrently herewith, the Seller and the Buyer are executing anddelivering to the Escrow Agent a letter pursuant to which the Escrow Agent isdirected to deliver the Tax Escrow to the Seller.

 

3. Release.  (a)  In consideration of the foregoing, the Sellerhereby releases and discharges the Buyer and the Company and each and every oftheir respective current and former representatives, officers, directors,shareholders, agents, attorneys, employees, subsidiaries and affiliates(collectively, the “Buyer Releasee”) from all actions, causes of action, suits,debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties,covenants, contracts, controversies, agreements, promises, variances,trespasses,

 

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damages, liens, judgments, extents,executions, claims and demands whatsoever, in law, or equity, which, againstthe Buyer Releasee, the Seller and his successors, assigns, heirs and personalrepresentatives ever had, now have or hereafter can, shall or may have for,upon, or by reason of any matter, cause or thing under, with respect to or inconnection with Section 3 of the Purchase Agreement or otherwise.

 

(b) In consideration of the foregoing,subject to the provisions hereof, including, without limitation, Sections 4through 7 hereof, the Buyer and the Company hereby release and discharge theSeller and each and every of its current and former representatives, officers,directors, shareholders, agents, attorneys, employees, subsidiaries andaffiliates (collectively, the “Seller Releasee”) from all actions, causes ofaction, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills,specialties, covenants, contracts, controversies, agreements, promises,variances, trespasses, damages, liens, judgments, extents, executions, claims and demands whatsoever, in law,or equity, which, against the Seller Releasee, the Buyer and the Company andtheir respective successors and assigns ever had, now have or hereafter can,shall or may have for, upon, or by reason of any matter, cause or thing under,with respect to or in connection with Section 3 of the Purchase Agreement orotherwise.

 

4. Rights and Obligations. Except as expressly provided for herein, nothing in this SettlementAgreement shall be construed to affect or limit any of the rights of the Buyer orthe Company or the obligations of the Seller under, with respect to or inconnection with the Purchase Agreement, including, without limitation, underSections 7.7 (Covenant Not to Compete), 7.8 (Non-Solicitation of Employees), 9(Indemnification) and 13 (Tax Matters) thereof, or under Sections 7 and 8 ofthe Employment Agreement, dated as of May 3, 2002, between the Company and theSeller (the “Employment Agreement).

 

5. Covenant Not to Compete;Non-Solicitation of Employees.   The parties reaffirm that thefive (5) year period referred to in Sections 7.7 and 7.8 of the PurchaseAgreement commenced on May 1, 2003, the day immediately following the date onwhich the Seller’s employment with the Company terminated.

 

6. Additional RestrictiveCovenant.  Without limiting the generality of Section7.8 of the Purchase Agreement and in addition to (and amending and modifying)the obligations of the Seller thereunder, in consideration of the SettlementAmount, the Seller agrees that at no time on or after the date hereof and priorto May 3, 2012 will he, directly or indirectly, (i) hire, retain or associatein a business relationship with Michael Muller (“Muller”), who was a salesmanager of the Company at the time of the closing of the Purchase Agreement andis currently a vice president of the Company, or any entity with which Mulleris or becomes in any manner associated (whether as a principal, officer,director, partner, joint venturer, stockholder, member, manager, employee,consultant, independent contractor, agent, representative or otherwise) (a “MullerEntity”), (ii) provide any monies (whether as an equity investment, a loan orotherwise in connection with a business relationship) to Muller or a MullerEntity, or (iii) advertise, promote or otherwise assist the establishment oroperation of any business of Muller or any Muller Entity.  Notwithstanding the foregoing, no entityshall be deemed to be a Muller Entity unless (i) Muller, directly orindirectly, is a record or beneficial equity owner of the entity or is aparticipant in the operations or management of the entity (whether as aprincipal, officer, director, partner, joint venturer, stockholder, member,manager, employee, consultant, independent contractor, agent, representative orotherwise), and (ii) the entity is engaged in a business that is competitivewith either the Company, a customer or potential customer of the Company, or asupplier or potential supplier of the Company. The Seller acknowledges (i) that Muller possesses knowledge of trade secretsof the Company, (ii) that the restrictions provided for herein are reasonableto protect the legitimate business interests of the Company and the Buyer, and(iii) that the restrictions set forth in this Section relate (and relate back)to the sale by Seller to Buyer of the outstanding shares of capital stock ofthe Company.

 

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7. Remedies. (a)  The parties recognize that,because of the nature of the subject matter of Section 6 of this SettlementAgreement, it would be impracticable and extremely difficult to determineactual damages to the Buyer and the Company in the event of a breach orthreatened breach thereof by the Seller. Accordingly, in such event, the Buyer and the Company shall have the followingrights and remedies:

 

(i) the right and remedy tohave the provisions of Section 6 of this Settlement Agreement specificallyenforced by any court having equity jurisdiction, by way of injunctive reliefor otherwise without the necessity of proving damages or posting a bond orother security, it being acknowledged and agreed that any such breach orthreatened breach will cause irreparable injury to the Buyer and the Company,and that money damages will not provide an adequate remedy to the Buyer or theCompany;

 

(ii) the right and remedy torequire the Seller and to account for and pay over to the Buyer all monies andother consideration derived or received by him as the result of anytransactions constituting a breach of Section 6 of this Settlement Agreement,and the Seller hereby agrees to account for and pay over such monies and otherconsideration to the Buyer; and

 

(iii) the right to recoverattorneys’ fees and expenses incurred in any action or proceeding in which theBuyer and/or the Company seeks to enforce its rights under Section 6 of thisSettlement Agreement.

 

(b) In addition, without limiting any of therights and remedies provided for in paragraph (a) hereof, in the event that theSeller (i) defends any action brought by Buyer or the Company to enforce theprovisions of Section 7.8 of the Purchase Agreement (as amended by thisSettlement Agreement) on any grounds that include the unenforceability of suchprovisions, or (ii) institutes any action or proceeding in which he seeks tochallenge the enforceability of any of the provisions of Section 6 hereof(either being a “Challenge”), the Seller shall be obligated to repay to theBuyer the Settlement Amount.  Inaddition, in the event of a Challenge, the Buyer and the Company shall have theright to recover from the Seller their attorneys’ fees and expenses incurred inconnection therewith.

 

(c) Each of the rights and remediesenumerated above shall be independent of the other, and shall be severallyenforceable, and all of such rights and remedies shall be in addition to, andnot in lieu of, any other rights and remedies available to the Buyer and theCompany under law or in equity, whether under the Purchase Agreement, theEmployment Agreement or otherwise.

 

8. Severability.  If anyprovision, or part thereof, of this Settlement Agreement shall be held to beinvalid or unenforceable, such invalidity or unenforceability shall attach onlyto such provision and not in any way affect or render invalid or unenforceableany other provisions of this Settlement Agreement, and this SettlementAgreement shall be carried out as if such invalid or unenforceable provision,or part thereof, had been reformed, and any court of competent jurisdiction isauthorized to so reform such invalid or unenforceable provision, or partthereof, so that it would be valid, legal and enforceable to the fullest extentpermitted by applicable law.

 

9. Waiver.  Thefailure of the Buyer or the Company at any time or times to require performanceof any provision hereof shall in no manner affect the right of the Buyer or theCompany at a later time to enforce the same. No waiver of any nature, in any one or more instances, of any covenantshall be deemed to be or construed as a further or continuing waiver of suchcovenant, or of any breach of any other provision of this Settlement Agreement.

 

10. Headings.  Theheadings or captions under sections of this Settlement Agreement are forconvenience of reference only and do not in any way modify, interpret orconstrue the intent of the parties or affect

 

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any of the provisions of this SettlementAgreement.

 

11. Facsimile Signatures. Signatures hereon which are transmitted via facsimile shall be deemedoriginal signatures.

 

12. Entire Agreement.  ThisSettlement Agreement constitutes the entire agreement among the partiesconcerning the subject matter hereof. This Settlement Agreement may not be changed except by a writteninstrument executed by the parties hereto. No waiver of any of the provisions of this Settlement Agreement shall bevalid unless in writing and signed by the Buyer.

 

13. Successors and Assigns.  ThisSettlement Agreement shall be binding upon and inure to the benefit of theparties, and their respective successors, assigns, heirs and personalrepresentatives.

 

14. Choice of Law.  ThisSettlement Agreement shall be governed by, and construed in accordance with,the laws of the State of Florida, excluding choice of law principles thereof.The parties hereto irrevocably elect as the sole judicial forum for theadjudication of any matters arising under or in connection with this SettlementAgreement, and consent to the jurisdiction of, the court of the United Statesof America for the Middle District of Florida.

 

15. Counterparts.  ThisSettlement Agreement may be executed in one or more counterparts, each of whichshall be deemed an original, but all of which together shall constitute but oneand the same instrument.

 

16. Representation byCounsel; Interpretation.  The parties acknowledge that they have beenrepresented by counsel, or have been accorded the opportunity to be representedby counsel, in connection with this Settlement Agreement. Accordingly, any ruleor law or any legal decision that would require the interpretation of anyclaimed ambiguities in this Settlement Agreement against the party that draftedit has no application and is expressly waived by the parties.  The provisions of this Settlement Agreementshall be interpreted in a reasonable manner to give effect to the intent of theparties hereto.

 

17. Third Party Beneficiary.  TheCompany is an intended third party beneficiary of, and shall be entitled toenforce, the provisions hereof.

 

*Remainderof page intentionally left blank. Signature page follows.*

 

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IN WITNESS WHEREOF, the parties have causedthis Settlement Agreement to be executed as of the date first above written.

 
|   | /s/ Mark C. Weldon         |                         |
|--------|----------------------------|------------------------------|
|   | Mark C. Weldon             |
|   |                       |
|   |                       |
|   | P&F INDUSTRIES, 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        |
|        |                            |                              |  |  |  |

 

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