Document:

Exhibit 10.1

SECOND AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
(the “Agreement”), dated as of May 30, 2001, among P&F INDUSTRIES, INC., a
Delaware corporation (the “Company”), having its principal place of business at
300 Smith Street, Farmingdale, New York 11735, and RICHARD A. HOROWITZ,
residing at 5 Fir Drive, Kings Point, New York 11024 (the “Executive”).

W I T N E S S E T H:

WHEREAS, the Company and the Executive wish to amend
and restate the Employment Agreement between the parties, dated as of May 28,
1997 (the “Prior Agreement”), as set forth in this Agreement;

NOW, THEREFORE, it is hereby agreed by and between
the parties as follows:

1.             EMPLOYMENT, DUTIES
AND ACCEPTANCE

Subject to the provisions of Article 4, the
Executive hereby agrees to continue his employment with the Company, and the
Company hereby agrees to continue its employment of the Executive, for the term
of this Agreement, as defined in Article 2 hereof. The Executive shall render
services as Chairman, President and Chief Executive Officer of the Company and
shall perform such executive duties which are consistent with his position as
he may be reasonably directed to perform by the Board of Directors of the
Company.

2.             TERM OF
EMPLOYMENT

The term of the Executive’s employment pursuant to this
Agreement (the “Term”) will commence on the date hereof (the “Effective Date”)
and will continue until the seventh anniversary of the Effective Date, unless
sooner terminated pursuant to the provisions of Article 4. Such employment
will, unless sooner terminated pursuant to the provisions of Article 4,
continue from year to year thereafter (each such year, an “Additional Term”)
until one party gives the other notice of its intention to terminate the
Executive’s employment at the end of the Term or an Additional Term, as the
case may be, which notice may not be given more than ninety or less than thirty
days prior to the last day of such Additional Term.

3.             COMPENSATION

                3.1. The minimum
base compensation of the Executive will be $675,000 per annum. All compensation
will be paid in installments as determined by the Company, but not less
frequently than monthly.

                3.2. The Company
will pay or reimburse the Executive for all 
reasonable expenses actually incurred or paid by him during the Term and
each Additional Term in connection with the performance of his services under
this Agreement, upon presentation of expense statements or vouchers or such
other supporting information as it may reasonably require, it being understood
that the character of and amount available for such expenses will be in
accordance with applicable policies of the Company and may be fixed in advance
by the Board of Directors of the Company. In addition, the Company shall
provide the Executive, at the Company’s expense, with a current model
automobile similar to the automobile

 

 

furnished to the Executive at the date hereof.

                3.3. The Executive
will also be eligible to receive such 
increases in base compensation as the Board of Directors of the Company
may from time to time grant to him (which shall not thereafter be reduced) and
to receive such bonuses as the Board of Directors of the Company, in its
discretion, may allocate to him. In addition, so long as the Company continues
to provide pension, group insurance, medical insurance and vacation benefits
for its senior management generally, the Executive will be entitled to
participate therein as well as in any other employee benefit plan hereafter
established for senior management.

                3.4. Throughout
the Term, the Company shall maintain in effect at current levels the
split-dollar life insurance policy currently maintained for the Executive, and
shall continue to pay premiums on the supplemental disability insurance
policies currently maintained by the Executive (or reimburse the Executive for
premiums paid by him).

4.             EVENTS OF
TERMINATION

                4.1. In the event
of the Executive’s death, this Agreement will terminate. In that event, the
Executive’s estate will be entitled to his (i) full salary through the date of
death together with any bonus under the then current executive bonus plan
accrued through the date of death; and (ii) an additional payment equal to his
then current salary for an additional twelve months.

                4.2. If during the
Term or an Additional Term, the Executive becomes physically or mentally
disabled, whether totally or partially, so that he is prevented from performing
his usual duties for a period of 270 consecutive business days or for 360
business days during any period of 450 business days, the Company may terminate
his employment under this Agreement by 60 days’ advance written notice to the
Executive. In that event, the Executive will be entitled to (i) his full salary
through the date of termination, less any amount received by the Executive
under any group policy of disability insurance carried by the Company in which
Executive participates; (ii) an additional payment equal to his then current
salary for an additional twelve months, without regard to any amount received
by the Executive under any policy of disability insurance; and (iii) during
such additional twelve month period, continued use of his Company car and other
perquisites being provided to the Executive prior to such termination,
including continuation of the split-dollar life insurance policy referenced in
Section 3.4 hereof. In addition, during the period of disability and until (x)
the death of the Executive or (y) the re-employment of the Executive, the
Company shall provide the Executive with medical benefits similar to those
provided for other executive officers of the Company, taking into account
medical benefits provided to the Executive by other sources.

5.             PROTECTION OF
INFORMATION: NONCOMPETITION

                5.1. In view of
the fact that the Executive’s work with the Company will bring him into close
contact with many confidential affairs of the Company, including matters of a
business nature such as information about costs, profits, markets, sales, plans
for future development and other information not readily available to the
public, the Executive will:

                                5.1.1.
keep secret all confidential information relating to the Company and not
disclose the same to anyone outside of the Company either during or after his
employment with the Company, except with the Company’s written consent;

 

 

                                5.1.2.
deliver promptly to the Company on 
termination of his services hereunder, or at any time the Company may so
request, all memoranda, notes, records, lists, reports and other documents (and
all copies thereof) relating to the business of the Company which he may then
possess or have under his control; and

                                5.1.3.
during his employment and, provided that a “change in control” (as hereinafter
defined) has not occurred, for a period of three years following the
termination of his employment, not, directly or indirectly, (i) enter the
employ of, or render any services to, any person, firm or corporation engaged
in any business competitive with the business of the Company, (ii) engage in
such a business for his own account, or (iii) become interested in such a
business as an individual, partner, shareholder, director, officer, principal,
agent, employee, trustee, consultant or in any other relationship or capacity.
The provisions of this Section 5.1.3 shall not apply to the Executive following
any termination of employment which occurs in connection with or following a “change
in control” (as hereinafter defined).

                5.2. “Business
competitive with the business of the Company” means, as of any date, any
business then being conducted by the Company in which Executive has been
actively engaged.

6.             CHANGE IN
CONTROL

                6.1.     The term “change in control” of the
Company shall mean:

                                6.1.1.
an occurrence of a nature that would be required to be reported in response to
(i) Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities
Exchange Act of 1934 (the “Exchange Act”) as in effect on the date of this
Agreement, or (ii) Item I(a) of Form 8-K under the Exchange Act, or (iii) if
Item 6(e) of Schedule 14A or Item I(a) of form 8-K is not longer in effect, any
regulations issued by the Securities and Exchange Commission pursuant to the
Exchange Act which serve similar purposes; or

                                6.1.2.
an event in which (i) any “person,” as such 
term is used in Sections 13(d) and 14(d)(2) of the Exchange Act (a “Person”),
other than the Executive, is or becomes a beneficial owner, directly or
indirectly, of securities of the Company representing 20% or more of the
combined voting power of the Company’s then outstanding securities then
entitled to vote for the election of directors or (ii) individuals who, as of
the date hereof, constitute the Board of Directors of the Company (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board of
Directors; provided, however, that any individual becoming a director subsequent
to the date hereof whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies
or consents by or on behalf of a Person other than the Board of Directors; or

                                6.1.3.
an event in which there shall be consummated (i) any consolidation, merger or
recapitalization of the Company or any similar transaction involving the
Company, whether or not the Company is the continuing or surviving corporation,
pursuant to which shares of the Company’s common stock, par value $1.00 per
share (“Common Stock”), would be converted into cash, securities or other
property, other than a merger of the Company in which the holders of Common
Stock immediately prior to the merger have the same proportionate ownership of
common stock of the surviving corporation immediately after the merger, (ii)
any sale, lease, exchange or other transfer (in one transaction or a

 

 

series of related transactions) of all, or substantially all, of the
assets of the Company or (iii) the adoption of a plan of complete liquidation
of the Company (whether or not in connection with the sale of all or substantially
all of the Company’s assets) or a series of partial liquidations of the Company
that is dejure or defacto part of a plan of complete liquidation of the
Company; provided, that the divestiture of less than substantially all of the
assets of the Company in one transaction or a series of related transactions,
whether effected by sale, lease, exchange, spin-off, sale of the stock or
merger of a subsidiary or otherwise, or a transaction solely for the purpose of
reincorporating the Company in another jurisdiction, shall not constitute a
change in control.

                6.2. The “change
date” shall be the date on which a change in control of the Company (as
described in paragraph 6.1) occurs.

                6.3. The term “discharge”
shall mean (i) any termination by the Company of the employment of the
Executive which occurs in connection with or following a change in control of
the Company, or (ii) resignation by the Executive which occurs in connection
with or following a change in control, which is based on a determination by the
Executive that, (A) as a result of a change in circumstances affecting his
position, he is unable to exercise the authorities, powers, functions or duties
attached to his position as contemplated by Article 1 of this Agreement, (B)
the compensation, benefits or perquisites being provided to the Executive have
been reduced or adversely affected, or (C) the Company (or its successor) has
breached this Agreement in any material respect.

                6.4. In the event
of a discharge, the Company shall pay to the Executive and provide him with the
following:

                                6.4.1.
during the remainder of the Term, the Company shall continue to pay the
Executive his salary as frequently as the Company then pays other executives
and at the same rate as payable immediately prior to the date of discharge plus
the estimated amount of any bonuses to which he would have been entitled had he
remained in the employ of the Company;

                                6.4.2.
during the remainder of the Term, the 
Executive shall continue to be entitled to all benefits and service
credit for benefits under medical, insurance, life insurance and other employee
benefit plans, programs and arrangements of the Company as if he were still
employed during such period under this Agreement;

                                6.4.3.
if, despite the provisions of paragraph 6.4.2 above, benefits or service
credits under any employee benefit plan shall not be payable or provided under
any such plan to the Executive, or his dependents, beneficiaries or the
Company, the Company itself shall, to the extent necessary, pay or provide for
payment of such benefits and service credit so as to place the Executive, his
dependents, beneficiaries and estate in such financial position as if the
Executive were employed by the Company during the Term; and

                                6.4.4.
any outstanding Incentive Stock Options held by the Executive shall be
converted to nonqualified stock options on the day after the last day of the
three month period following the date of discharge.

                6.5. Severance
Allowance. In the event of discharge of the Executive during the Term, the Executive
may elect, within 60 days after such discharge, to be paid a lump sum severance
allowance, in lieu of payments to be made pursuant to 6.4.1 hereof, in an
amount equal to 2.99 times the Executive’s “annualized includable compensation
for the base period,” as those terms are defined in section 280G of

 

the Internal Revenue Code of 1986, as amended (the “Code”). Any payment
due hereunder will be made within five days after the election by the Executive
to receive the lump sum payment.

                In the event of
discharge by reason of an event described in paragraph 6.3, if the Executive
makes an election pursuant to the first sentence of this paragraph 6.5 to
receive a lump sum severance allowance, then, in addition to such amount, he
shall receive (i) in addition to the benefits provided under any pension plan
maintained by the Company, the pension benefits he would have accrued under
such pension plan if he had remained in the employ of the Company for 36
calendar months after his discharge, which benefits will be paid concurrently
with, and in addition to, the benefits provided under such pension plan, (ii)
incentive compensation (including, but not limited to, the right to receive and
exercise stock options and stock appreciation rights and to receive restricted
stock and grants thereof and similar incentive compensation benefits) to which
he would have been entitled under all incentive compensation plans maintained
by the Company if he had remained in the employ of the Company for 36 calendar
months after his discharge, and (iii) the employee benefits (including, but not
limited to, coverage under any medical, disability and life insurance
arrangements or programs) to which he would have been entitled under all
employee benefit plans, programs or arrangements maintained by the Company if
he had remained in the employ of the Company for 36 calendar months after his
discharge, or the value of the amounts described in clauses (i), (ii) and (iii)
of this sentence. The amount of payments described in the preceding sentence
shall be determined and such payments shall be distributed as soon as it is
reasonably possible.

                6.6. Parachute
Payment. If any payment to be made by the Company to the Executive pursuant to
Article 6 of this Agreement, after taking into account any other payments to be
made by the Company to the Executive, is not deductible by the Company pursuant
to section 280G(a) of the Code, then any payment to be made pursuant to Article
6 of this agreement shall be reduced by the smallest amount necessary so that
no such payment shall fail to be deductible pursuant to section 280G(a) of the
Code. If the Company determines that any payment to the Executive is subject to
limitation pursuant to this paragraph 6.6, it shall provide the Executive with
a written determination within 30 days of the Executive’s discharge during the
terms of this Agreement. If the Executive disagrees with the Company’s
determination, he shall provide the Company with written notice of his
objection within 15 days of receipt of the Company’s determination. The matter
shall then be promptly submitted by either the Executive or the Company to a “Big
6” accounting firm, not otherwise associated with the Company or the Executive,
for a determination within 30 days after the date of such submission. The
determination of such accounting firm shall be binding on both the Executive
and the Company. The expenses incurred in connection with any determination
will be shared equally by the parties. Any payment due hereunder shall be paid
within five days of the determination by the Company or the “Big 6” accounting
firm, as the case may be.

7.             MISCELLANEOUS.

                7.1.
If any of the provisions contained in this Agreement is hereafter construed to
be invalid or unenforceable, such event will not affect the remainder of this
Agreement, which will be given full effect, without regard to the invalid
portions.

                7.2. If any of the
covenants contained in Article 5, or any part thereof, is held to be
unenforceable because of the duration or scope of such provision or the area
covered thereby, the parties agree that the court making such determination
will have the power to reduce the duration, scope and/or area of such provision
and in its reduced form, such provision will then be enforceable.

 

 

                7.3. This
Agreement has been negotiated and executed in the State of New York, and will
be construed and enforced in accordance with the laws of the State of New York
applicable to agreements made and to be performed entirely in New York.

                7.4. All notices,
requests, consents and other communications, required or permitted to be given
hereunder, shall be in writing and shall be deemed to have been duly given if
delivered personally or sent by prepaid telegram, or mailed first class,
postage prepaid, by registered or certified mail (if possible), addressed to
either party at the address set forth in the preamble to this Agreement (or to
such other address as either party shall designate by notice in writing to the
other in accordance herewith).

                7.5. The article
headings contained herein are for reference purposes only and shall not in any
way affect the meaning or interpretation of this Agreement.

                7.6. This
Agreement sets forth the entire agreement and understanding of the parties
relating to the subject matter hereof, and supersedes and will supersede all
prior agreements, arrangements and understandings, written or oral, relating to
the subject matter including, without limitation, the Prior Agreement.

                7.7. This
Agreement may be amended, modified, superseded, canceled, renewed or extended
and the terms or covenants hereof may be waived, only by a written instrument
executed by each of the parties hereto, or in the case of a waiver, by the
party waiving compliance. The failure of either party at any time or times to
require performance of any provision hereof will in no manner affect the right
at a later time to enforce the same. No waiver by either party of the breach of
any term or covenant contained in this Agreement, whether by conduct or
otherwise, in any one or more instances, will be deemed to be, or construed as
a further or continuing waiver of, any such breach, or a waiver of the breach
of any other term or covenant contained in this Agreement.

IN WITNESS WHEREOF, the parties have duly executed
this Agreement as of the date first above written.

 

	
  

  	
  P & F INDUSTRIES, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Richard
  Horowitz

  
	
   

  	
   

  	
  Richard HorowitzExhibit 10.1

LOAN
MODIFICATION AGREEMENT NO. 2

Preamble:  This Loan
Modification Agreement (this “Agreement”), dated as of August 10,
2006 (the “Amendment Date”), is made by and among UPS Capital
Corporation, as Agent; each Person identified as a “Lender” on the signature
page hereof, as lenders; and each Person identified as a “Borrower” on the
signature page hereof, as borrowers (individually and collectively, the “Borrower”),
for the purpose of amending or otherwise modifying the terms of that certain Credit
Agreement, dated as of August 12, 2005 (which, as it has been, or
hereafter may be, modified or amended, the “Credit Agreement”), among
Borrower, the various lenders from time to time party thereto (the “Lenders”)
and UPS Capital Corporation, a Delaware corporation, as a Lender and as agent
for the Lenders (in such capacity, the “Agent”).  Now, therefore, in consideration of the
mutual promises contained herein and in the Credit Agreement, the receipt and
sufficiency of which are hereby acknowledged, Agent, Lenders and Borrower, each
intending to be legally bound, agree as follows:

Definitions.  Capitalized terms used herein, but not
expressly defined themselves herein, shall have the meanings given to such
terms in the Credit Agreement.

Loan Modifications.  Subject to the satisfaction of the conditions
precedent set forth in Section 5 below, Agent, Lenders and Borrower agree to
modify the Credit Agreement as follows:

(a)   Temporary
Increase in Working Capital Facility Commitment Amount.

The Working Capital
Facility Commitment Amount was Twenty-Five Million Dollars ($25,000,000) on the
Closing Date and has been increased to Forty Million Dollars ($40,000,000)
pursuant to Section 2.3 of the Credit Agreement.  Effective on the Amendment Date, Lenders
agree with Borrower to increase temporarily the Working Capital Facility
Commitment Amount from Forty Million Dollars ($40,000,000) to Fifty Million
Dollars ($50,000,000), with the Commitments of each Lender to be increased on a
pro rata basis  (the “Commitment
Temporary Increase”).   Giving effect
to the Commitment Temporary Increase, the Commitment of UPS Capital Corporation
will be Thirty Million Dollars ($30,000,000), and the Commitment of Wells Fargo
Bank, National Association will be Twenty Million Dollars ($20,000,000).   On the Amendment Date, each Lender’s Working
Capital Note shall be deemed amended to give effect to such temporary increase.

The Inventory
Sublimit was Fifteen Million Dollars ($15,000,000) on the Closing Date and has
been increased to Twenty-Four Million Dollars ($24,000,000) pursuant to Section
2.3 of the Credit Agreement.  Effective
on the Amendment Date, Lenders agree with Borrower to increase temporarily the
Inventory Sublimit from Twenty-Four Million Dollars ($24,000,000) to Thirty Million
Dollars ($30,000,000) (the “Inventory Sublimit Temporary Increase”).

Without further
action by any party, (i) on August 25, 2006, (x) the Working Capital Facility
Commitment Amount shall be reduced from Fifty Million Dollars ($50,000,000) to
Forty-Eight Million Dollars ($48,000,000) and (y) the Inventory Sublimit shall
be reduced from Thirty Million Dollars ($30,000,000) to Twenty-Eight Million
Eight Hundred Thousand Dollars ($28,800,000), (ii) on September 1, 2006, the
Working Capital Facility Commitment Amount shall be reduced from Forty-Eight
Million Dollars ($48,000,000) to Forty-Six Million Dollars ($46,000,000) and
(y) the Inventory Sublimit shall be reduced from Twenty-Eight Million Eight
Hundred Thousand Dollars ($28,800,000) to Twenty-Seven Million Six Hundred
Thousand Dollars ($27,600,000), (iii) on September 8, 2006, (x) the Working
Capital Facility Commitment Amount shall be reduced from Forty-Six Million
Dollars ($46,000,000) to Forty-Four Million Dollars ($44,000,000)  and (y) the Inventory Sublimit shall be
reduced from Twenty-Seven Million Six Hundred Thousand Dollars ($27,600,000) to
Twenty-Six Million Four Hundred Thousand Dollars ($26,400,000), (iv) on
September 15, 2006, (x) the Working Capital Facility Commitment Amount shall be
reduced from Forty-Four Million Dollars ($44,000,000) to Forty-Two Million
Dollars ($42,000,000) and (y) the Inventory Sublimit shall be reduced from
Twenty-Six Million Four Hundred Thousand Dollars ($26,400,000) to Twenty-Five
Million Two Hundred Thousand  Dollars
($25,200,000) and (v) on September 22, 2006, (x) the Working Capital Facility
Commitment Amount shall be reduced from Forty-Two Million Dollars ($42,000,000)
to Forty Million Dollars ($40,000,000) and (y) the Inventory Sublimit shall be

 

reduced from Twenty-Five
Million Two Hundred Thousand Dollars ($25,200,000) to Twenty-Four Million
Dollars ($24,000,000).  Such reductions
in the Working Capital Facility Commitment Amount shall be applied on a pro
rata basis as between the Commitments of Lenders to reduce such Commitments.

(b)   Temporary Increase in Inventory Advance
Rate.

Effective on the
Amendment Date, Lenders agree to increase temporarily the advance rate
applicable to Eligible Inventory set forth in the definition of “Borrowing Base”
contained in Section 1.1 of the Credit Agreement from fifty percent (50%) to
fifty five percent (55%).

Without further
action by any party, (i) on August 25, 2005, such advance rate shall be reduced
to fifty-four percent (54%), (ii) on September 1, 2006, such advance rate shall
be reduced to fifty-three percent (53%), (iii) on September 8, 2006, such
advance rate shall be reduced to fifty-two percent (52%), (iv) on September 15,
2006, such advance rate shall be reduced to fifty-one percent (51%) and (v) on
September 22, 2006, such advance rate shall be reduced to fifty percent (50%).

(c)   Borrowing Base Certificates.  With reference to Section 6.1.1(i) of the
Credit Agreement, Borrower agrees that, commencing on the Amendment Date,
Borrowers’ Representative shall deliver to each Lender and Agent Borrowing Base
Certificates and all supporting schedules 
and documentation required pursuant to such Section 6.1.1(i) on a weekly
basis by Wednesday of each week (or, if Wednesday is not a Business Day, on the
next day which is a  Business Day)
prepared as of the last Business Day of the preceding week; provided, however,
that such Borrowing Base Certificates and supporting schedules shall again be
deliverable on a monthly basis in accordance with the provisions of Section 6.1.1(i)
after October 31, 2006 so long as (i) no Default or Event of Default has
occurred and is continuing and (ii) average daily Working Capital Facility
Availability, determined as of October 31, 2006 for the one month period ending
on such date, equals or exceeds Minimum Excess Availability ($8,000,000); provided,
further, however,  that
nothing contained herein shall limit the right of Agent to require more
frequent delivery at any time as provided in Section 6.1.1(i).

(d)   Field Audits.   With reference to the last sentence of
Section 6.1.7 of the Credit Agreement, Borrower agrees that commencing on the
Amendment Date, Borrower shall be obliged to reimburse Agent on demand (in the
amounts specified in such sentence) for field audits conducted on a ninety (90)
day audit cycle (rather than a one hundred twenty (120) day audit cycle as
provided therein);  provided, however,
that Borrower shall again be required to reimburse Agent for field audits
conducted on a one hundred twenty (120) day audit cycle in accordance with the
provisions of Section 6.1.7  after
October 31, 2006 so long as (i) no Default or Event of Default has occurred and
is continuing and (ii) average daily Working Capital Facility Availability,
determined as of October 31, 2006 for the one month period ending on such date,
equals or exceeds Minimum Excess Availability ($8,000,000); provided, further,
however,  that nothing contained
herein shall limit the right of Agent to be reimbursed for more frequent field
audits whenever an Event of Default exists as provided in such Section 6.1.7.

(d)   Financial Covenants.   Borrower’s failure to comply with the
financial covenants set forth in Section 6.2.4 for the Fiscal Months ending
July 31, 2006, August 31, 2006 and September 30, 2006 shall not constitute an
Event of Default; provided, however,  that (i) Borrower shall continue to provide
calculations of such financial covenants in each Compliance Certificate
delivered to Agent pursuant to Section 6.1.1 of the Credit Agreement and (ii)
the financial covenant set forth at Section 6.2.4(a) of the Credit Agreement
shall continue to apply for purposes of determining the Applicable Margin.

 

Inducing Representations.  To induce Agent and Lenders to enter into
this Agreement, Borrower hereby represents and warrants that: (i) Borrower is
duly authorized to enter into this Agreement, and this Agreement, upon its
execution by Borrower, Agent and each Lender, will constitute Borrower’s legal,
valid and binding obligations enforceable in accordance with its terms against
Borrower; (ii) after giving effect to this Agreement, no Default or Event of
Default exists; (iii) no present right of setoff, counterclaim, recoupment
claim or defense exists in Borrower’s favor in respect of its payment or
performance of any Obligations; and (iv) except as modified by this Agreement,
all terms of the Credit Agreement and each Loan Document shall remain in full
force and effect.

Amendment Fee.   Borrower agrees to pay to Agent on the
Amendment Date, for the ratable benefit of Lenders, an amendment fee in the
amount of Two Hundred Thousand Dollars ($200,000), which fee shall be fully
earned and non-refundable on the Amendment Date.  Lenders may cause such fee to be paid by
making  Working Capital Facility Loans to
Borrower in the amount thereof.

Conditions Precedent.  Notwithstanding any provision herein the
contrary, this Amendment shall not become effective and no Lender shall have
any liability hereunder unless and until: (a) 
Borrower has paid to Agent,  for
the ratable benefit of Lenders, the amendment fee described in Section 4
hereof; (b) each of the conditions precedent set forth in Section 4.2 of the
Credit Agreement shall be satisfied; (c) Borrower, Agent and Lenders have
executed this Amendment; and (d) Borrower has delivered to Agent (i)  a good standing certificate with respect to
each Loan Party from the appropriate Governmental Authority of its State of
incorporation and of each other State where such Loan Party is required to qualify;
(ii) a certificate of the Secretary or an Assistant Secretary of each Loan
Party as to resolutions of its Board of Directors authorizing its execution,
delivery and performance of this Amendment and the other Loan Documents to be
executed in connection herewith, each in form and substance satisfactory to
Agent and Lenders;  (iii) a mortgage or
deed of trust in favor of Agent, for the ratable benefit of itself and Lenders,
in form and substance satisfactory to Agent and Lenders, granting to Agent, for
its benefit and the ratable benefit of Lenders, a Liens on the property owned
by Borrower and located at 3411 North Perris Boulevard, Perris, California  92571 and 100 West Sinclair Avenue, Perris,
California 92571 (“California Mortgage”); (iv) a commitment from a title
insurer satisfactory to Agent and Lenders to issue a policy of mortgagee’s
title insurance,  in an amount
satisfactory to Agent and Lenders, with no exceptions for the absence of a
survey of such property and otherwise on terms and conditions satisfactory to
Agent and Lenders, insuring the Lien of the California Mortgage; (v) evidence
satisfactory to Agent and Lenders  that
the property to be encumbered by the California Mortgage does not lie in a
flood hazard zone; (vi) evidence of insurance with respect to such property in
compliance with the requirements of Section 6.1.5 of the Credit Agreement and
the California Mortgage, (vii) opinion letters dated the Amendment Date from
legal counsel to Borrower, addressed to Agent and Lender, in form and substance
satisfactory to Agent and Lenders and (viii) such other documents, instruments
and agreements as Agent may reasonably request.

Miscellaneous.  Except as otherwise expressly provided
herein, but subject to the satisfaction of the conditions precedent set forth
in Section 5 hereof,  all modifications
to the Credit Agreement set forth herein shall take effect on the Amendment
Date.  Each existing Loan Document
(including, particularly, any Note) shall be deemed modified hereby as
necessary to conform its terms to the terms of the Credit Agreement, as
modified hereby.  This Agreement
constitutes a Loan Document, and shall be governed and construed
accordingly.  This Agreement constitutes
the entire agreement among Agent, Lenders and Borrower relative to the subject
matter hereof, and supersedes and replaces any prior understandings and
agreements, written or oral, in regard thereto. 
This Agreement shall be binding on, and inure to the benefit of, the
successors and assigns of Borrower, Agent and Lenders.  Borrower shall reimburse Agent for all costs
which Agent incurs, including reasonable attorneys fees, in the preparation,
negotiation, execution and performance of this Agreement, and the recording of
any Loan Documents in connection herewith.

IN WITNESS
WHEREOF, Agent, Lenders and Borrower have executed this Agreement, by and
through their respective authorized officers, as of the Amendment Date.

	
  “Borrower”:

  	
   

  	
  “Agent” and “Lender”:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  NATIONAL R.V.
  HOLDINGS, INC.

  	
   

  	
  UPS CAPITAL CORPORATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Thomas J.
  Martini

  	
   

  	
  By:

  	
  /s/John P. Holoway

  	
   

  
	
   

  	
  Authorized
  Officer

  	
   

  	
   

  	
  Authorized Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  “Lender”:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  NATIONAL R.V.,
  INC.

  	
   

  	
  WELLS FARGO BANK, NATIONAL

  	
   

  
	
   

  	
   

  	
   

  	
  ASSOCIATION,
  acting through its Wells

  	
   

  
	
   

  	
   

  	
   

  	
  Fargo Business
  Credit operating division, as a Lender

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Thomas J.
  Martini

  	
   

  	
  By:

  	
  /s/ Charles Liles

  	
   

  
	
   

  	
  Authorized
  Officer

  	
   

  	
   

  	
  Name: Charlie Liles

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Title: Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  COUNTRY COACH,
  INC.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Thomas J.
  Martini

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized
  Officer

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00113-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00113-of-00352.parquet"}]]