Exhibit 10.2


 


April 17, 2020


 


P&F
INDUSTRIES, INC., as Borrower Agent


445 Broadhollow Road

Suite 100

Melville, New York 11747


Attn: Joseph A. Molino, Jr.


 


Payroll Protection Program Consent


 


Ladies and Gentlemen:


 


Reference is made to
that certain Second Amended and Restated Loan and Security Agreement, dated as of April 5, 2017 (as amended, restated, supplemented,
or otherwise modified from time to time, the “Loan Agreement”), among 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” and together with P&F
and Florida Pneumatic, collectively, the “Borrowers” and each, a “Borrower”), JIFFY AIR
TOOL, INC., a Delaware corporation (“Jiffy”), ATSCO HOLDINGS CORP., a Delaware corporation (“ATSCO”),
BONANZA PROPERTIES CORP., a Delaware corporation (“Properties”), CONTINENTAL TOOL GROUP, INC.,
a Delaware corporation (“Continental”), COUNTRYWIDE HARDWARE, INC., a Delaware corporation (“Countrywide”),
EMBASSY INDUSTRIES, INC., a New York corporation (“Embassy”), EXHAUST TECHNOLOGIES, INC., a Delaware
corporation, (“Exhaust”), and HY-TECH ILLINOIS, INC., a Delaware corporation formerly known as DaVinci
Purchase Corp. (“HTI”; and together with Jiffy, ATSCO, Properties, Continental, Countrywide, Embassy and Exhaust,
collectively, “Guarantors” and each, a “Guarantor”), the financial institutions party from
time to time to the Loan Agreement as “Lenders” (collectively, “Lenders”), and CAPITAL ONE,
NATIONAL ASSOCIATION, a national banking association, as agent for Lenders (“Agent”). Capitalized terms
used herein but not otherwise defined herein shall have the meanings attributed thereto in the Loan Agreement.


 


Borrowers have advised
Agent and Lenders that P&F intends to or has applied for a loan pursuant to Section 1102 of the Coronavirus Aid, Relief, and
Economic Security Act (together with all regulations and guidance issued by any Governmental Authority with respect thereto, and
as in effect on the date hereof, the “Payroll Protection Program”, and such loan the “PPP Loan”).


 


Subject to the terms
and conditions set forth in this letter, Agent and Lenders party hereto consent to P&F incurring the PPP Loan on an unsecured
basis and agrees that such PPP Loan shall be deemed not to constitute Debt under the Loan Agreement for any purpose except to the
extent such PPP Loan is outstanding from and after the first anniversary of the date such PPP Loan is incurred (or such later date
as Agent shall otherwise agree in writing); provided, that Borrowers and Guarantors (i) shall provide Agent with true, correct
and complete copies of the PPP Loan application and related loan documentation, (ii) use the proceeds of the PPP Loan solely for
allowable purposes (whether or not forgivable) under the Payroll Protection Program, and (iii) promptly take all applicable actions,
not later than 45 days after the eight-week period immediately following receipt of the PPP Loan proceeds, to apply for forgiveness
of the PPP Loan in accordance with the Payroll Protection Program (and provide documentation, and status, of such forgiveness to
Agent). The incurrence of the PPP Loan shall constitute a representation on behalf of the Borrowers and Guarantors that (i) the
PPP Loan shall remain unsecured and shall not adversely affect any right, remedy or Lien of Agent with respect to the Obligations
under the Loan Agreement, and (ii) except as has been obtained, no consent of any other person or entity (including, without limitation,
shareholders or creditors of any Borrower or Guarantor) is required in connection with such incurrence of the PPP Loan.


 






     


     


    

 


Borrowers have further
advised Agent that BNB Bank (“BNB”), the lender servicing the PPP Loan, requires that P&F establish and
maintain a deposit account at BNB in connection with the PPP Loan (the “PPP Loan Account”). Notwithstanding
anything contained in the Loan Agreement, Agent and Lenders hereby consent to the establishment and maintenance of the PPP Loan
Account, provided that Borrowers and Guarantors shall (a)  use the PPP Loan Account exclusively for receiving and disbursing
the proceeds of the PPP Loan, (b) not deposit (or have deposited) into the PPP Loan Account monies from any other source, including,
without limitation, the proceeds of any Collateral, and (c) shall deliver to Agent, promptly upon Agent’s request, a copy
of the most recent account statement received from BNB (or other documentation acceptable to Agent evidencing the account balance
and account activity) with respect to the PPP Loan Account.


 


This letter agreement
is limited solely to the specific matters listed above and shall not be deemed to be a waiver of any Default or Event of Default
or a consent to or an amendment of any other provision of the Loan Agreement. Borrower hereby represents and warrants that no Default
or Event of Default has occurred and is continuing as of the date hereof. All terms of the Loan Agreement and the other Loan Documents,
as modified hereby, remain in full force and effect. Execution and delivery of an executed counterpart of this letter agreement
by facsimile transmission, electronic mail in pdf form or other electronic signature shall be as effective as execution and delivery
of a manually executed counterpart hereof; provided, however, that upon request by Agent the parties agree to promptly provide
hand-signed original signatures hereto.


 


[Signature page to follow]


 




     


     


    

 


This letter agreement
shall not become effective unless and until it has been accepted and agreed to in writing by Borrowers and Guarantors, which acceptance
and agreement shall be evidenced by Borrowers’ and Guarantors’ signing a copy of this letter agreement in the space
indicated below and returning the same to Agent.


 


	 	Very truly yours,
	 	 
	 	CAPITAL
                    ONE, NATIONAL ASSOCIATION,

                    as Agent and Lender

	 	 
	 	 
	 	By:	   	/s/ Julianne Low	  
	 	Name:	Julianne Low
	 	Title:	Senior Director


 


 


ACKNOWLEDGED
AND AGREED:


 


BORROWERS:


 


P&F INDUSTRIES, INC.


FLORIDA PNEUMATIC MANUFACTURING


CORPORATION


HY-TECH MACHINE, INC.


 


 


By:         /s/ Joseph
A. Molino, Jr.                        


Name: Joseph A. Molino, Jr.


Title: Vice President


 


GUARANTORS:


 


ATSCO HOLDINGS CORP.


JIFFY AIR TOOL, INC.,


BONANZA PROPERTIES CORP.,


CONTINENTAL TOOL GROUP, INC.


COUNTRYWIDE HARDWARE, INC.


EMBASSY INDUSTRIES, INC.


EXHAUST TECHNOLOGIES, INC.


HY-TECH ILLINOIS, INC.


 


 


By:         /s/ Joseph
A. Molino, Jr.                        


Name: Joseph A. Molino, Jr.


Title: Vice President


 




 





[Payroll
Protection Program Consent]