Document:

Exhibit 10.1

 

EXECUTIVE EMPLOYMENT
AGREEMENT (this “Agreement”), dated as of January 1, 2015 (the “Effective Date”), between
P&F INDUSTRIES, INC., a Delaware corporation (the “Company”), and RICHARD A. HOROWITZ (the
“Executive”).

 

W I T N E S S E T H

 

WHEREAS, the
Executive and the Company are parties to that certain Executive Employment Agreement, dated as of January 1, 2012 (the “Prior
Agreement”), that will expire by its terms on December 31, 2014; and

 

WHEREAS, the
Company and the Executive desire to set forth the terms and conditions of the Executive’s continued employment with the Company
as its President and Chief Executive Officer commencing as of the Effective Date.

 

NOW THEREFORE,
in consideration of the foregoing, the mutual promises contained herein and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

1.POSITION/DUTIES.

 

(a)During
the Employment Term (as hereinafter defined), the Executive shall serve as the President and Chief Executive Officer of the Company
and, if elected by the Board of Directors of the Company (the “Board”), Chairman. Executive has currently been
elected as Chairman. In this capacity, the Executive shall have such duties, authorities and responsibilities commensurate with
the duties, authorities and responsibilities of persons in similar capacities in similarly sized companies, and such other duties,
authorities and responsibilities as the Board shall designate that are consistent with the Executive’s positions. The Executive
shall report to the Board.

 

(b)During
the Employment Term, the Executive shall devote all of his business time, energy and skill and his best efforts to the performance
of his duties with the Company; provided, however, that the foregoing shall not prevent the Executive from (i) serving on the board
of directors of non-profit organizations and, with the prior written approval of the Board, other companies, (ii) participating
in charitable, civic, educational, professional, community or industry affairs or (iii) managing his and his family’s passive
personal investments so long as such activities in the aggregate do not materially interfere or conflict with the performance of
his duties hereunder or create a potential business conflict.

 

2.EMPLOYMENT
TERM. The Executive’s term of employment under this Agreement (the “Employment Term”) shall be for
a term commencing on the Effective Date and, unless terminated earlier as provided in Section 6, ending on December 31, 2018 (the
“Expiration Date”).

 

3.BASE
SALARY. The Company agrees to pay the Executive a base salary at an annual rate of not less than $700,000, payable in accordance
with the regular payroll practices of the Company. The Executive’s base salary shall be subject to annual review by the Board
(or a committee thereof) and may be increased, but not decreased, from time to time by the Board (or such committee). The base
salary as determined herein from time to time shall constitute “Base Salary” for purposes of this Agreement.

 

    	 

    	 

    

 

4.BONUS.
During the Employment Term, the Executive shall be eligible for an annual incentive payment (each an “Annual Bonus”)
under the Company’s Executive 162(m) Bonus Plan, as amended or as may be amended from time to time, or any successor annual
bonus plan (the “Bonus Plan”). Subject to the next sentence, the Executive’s target bonus under the Bonus
Plan shall be 55% of the Executive’s Base Salary for the applicable fiscal year (the “Target Bonus”) and
his maximum bonus, based on exceeding performance targets as established by the Compensation Committee, shall be 165% of the Executive’s
Base Salary for the applicable fiscal year (the “Maximum Bonus”). The Compensation Committee of the Board may,
in its sole discretion, reduce the percentage of the Target Bonus (and corresponding Maximum Bonus) and apply such Target amount
to a long-term cash or equity incentive plan award for the Executive. Any Annual Bonus shall be paid in accordance with the terms
and conditions of the Bonus Plan. The Compensation Committee shall set the performance goals at each level of the Bonuses (and
any other levels) in its sole discretion, but shall consult with the Executive before doing so. The Bonus levels may be subject
to an individual performance factor element and/or a discretionary portion as a condition of receiving or as a reduction of achievement
of the specified performance goals at a bonus level. In addition, the Executive agrees that any Bonus amounts received based on
levels of achievement of performance goals shall be subject to repayment at the discretion of the Compensation Committee in the
event, and to the extent, that the financial statements on which they are based are restated and the bonus amount would have been
less if the restated numbers had been applied.

 

5.EMPLOYEE
BENEFITS.

 

(a)Benefit
Plans. The Executive shall be entitled to participate in any employee benefit plan that the Company has adopted or may adopt,
maintain or contribute to for the benefit generally of its senior executives at a level commensurate with his position, subject
to satisfying the applicable eligibility requirements. Notwithstanding the foregoing, the Company may modify or terminate any employee
benefit plan at any time.

 

(b)Make-Up
Payments.  Through the earlier of (i) December 31, 2016, (ii) the Executive’s death, or (iii) the Executive’s termination
for Cause (as hereinafter defined) or resignation without Good Reason (as hereinafter defined), the Company will pay the Executive
$45,064.37 (each a “Make Up Payment”) on or before March 15 of each calendar year to cover premiums on a life
insurance policy (reflecting the prior change in the split dollar arrangement). This provision shall survive any expiration of
the Employment Term and any termination of the Executive’s employment (other than due to the Executive’s death or a
termination of the Executive’s employment prior to the expiration of the Employment Term by the Company for Cause or by the
Executive without Good Reason).

 

(c)Vacations.
The Executive shall be entitled to an annual paid vacation of six weeks per calendar year (as prorated for partial years) in accordance
with the Company’s policy on accrual and use applicable to senior executives.

 

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(d)Business
and Entertainment Expenses. Upon presentation of appropriate documentation, the Executive shall be reimbursed in accordance
with the Company’s expense reimbursement policy for all reasonable and necessary business and entertainment expenses incurred
in connection with the performance of his duties hereunder. In addition, within seventy-five (75) days following the Effective
Date, upon presentation of appropriate documentation within forty-five (45) days after the Effective Date, the Company shall pay
the reasonable (as determined by the Compensation Committee in its sole discretion) and documented attorneys’ and consultants’
fees and related costs incurred by the Executive in connection with the drafting, negotiation and execution of this Agreement in
an amount up to $15,000.

 

(e)Automobile.
During the Employment Term, the Company will provide the Executive, at the Company’s expense, with a current model automobile
similar to the automobile currently furnished to the Executive. In addition, upon submission of appropriate documentation, the
Company shall pay or reimburse the Executive for the cost of insurance, maintenance and gas incurred for business purposes and
other business related operating expenses incurred for such automobile during the Employment Term. The Executive shall be entitled
to request a new automobile at the end of the three (3) year period commencing on the date he was provided with his current automobile.

 

6.TERMINATION.
The Executive’s employment with the Company and the Employment Term shall terminate prior to the Expiration Date on the first
of the following to occur prior to the Expiration Date:

 

(a)Disability.
Upon 30 days’ prior written notice by the Company to the Executive of termination due to Disability if the Executive does
not return to full-time continuous employment with the Company within such 30 days. For purposes of this Agreement, “Disability”
shall be defined as the Executive’s becoming physically or mentally disabled, whether totally or partially, so that he has
been unable to perform his material duties hereunder for a period of 180 days (including weekends and holidays) during any 365-day
period.

 

(b)Death.
Automatically on the date of death of the Executive.

 

(c)Cause.
The Company, acting by the majority of the independent directors on the Board, may terminate the Executive’s employment hereunder
for Cause immediately upon written notice by the Company to the Executive of a termination for Cause. “Cause”
shall mean the Executive’s:

 

(i)refusal
or willful failure to attempt in good faith to perform his duties for the Company (other than as a result of physical or mental
incapacity);

(ii)gross
negligence or willful misconduct with regard to the Company, its assets or employees of a material nature or any fraud, theft or
material dishonesty with regard to the Company or in the performance of his duties for the Company;

 

(iii)willful
misconduct which in the good faith judgment of the Board has or may materially damage the Company economically or reputation wise;

 

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(iv)commission
of any felony or any other crime involving fraud, dishonesty, securities law violations or moral turpitude, provided that any conviction
for, or pleading guilty or nolo contendere to, any such felony or other crime shall conclusively be deemed acknowledgement by the
Executive of commission thereof;

 

(v)failure
to attempt in good faith to follow the legal written direction of the Board with regard to matters within the scope of his duties
and responsibilities as chief executive officer; or

 

(vi)material
breach of a material term of this Agreement or any other material agreement with the Company that is not cured within 15 days of
the giving of written notice thereof.

 

The Executive may only be terminated for
Cause by a vote of a majority of the independent directors on the Board and, prior to any termination for Cause, the Executive
will be given 5 business days written notice specifying the alleged Cause event and will be entitled to appear (with counsel) before
the independent directors on the Board to present information regarding his views on the Cause event. After providing the notice
in foregoing sentence, the Board may suspend the Executive with pay until a final determination pursuant to this paragraph has
been made. In the event of a Cause termination after a Change in Control, the Company shall bear the burden of proof by a preponderance
of the evidence.

 

(d)Without
Cause. Upon written notice by the Company to the Executive of an involuntary termination without Cause, other than for death
or Disability.

 

(e)Good
Reason. Upon written notice by the Executive to the Company of a termination for Good Reason provided that such notice is given
within 60 days of the Good Reason event. “Good Reason” shall mean the occurrence of any of the following events,
without the express written consent of the Executive, unless such events are cured by the Company within 30 days following written
notification by the Executive to the Company that he intends to terminate his employment hereunder for one of the reasons set forth
below:

 

(i)any
reduction or diminution in the Executive’s title as President and Chief Executive Officer of the Company (for the avoidance
of doubt, Executive’s not being elected as, or his removal from the position of, Chairman shall not constitute Good Reason);

 

(ii)any
material reduction or diminution in the Executive’s then authorities, duties, or responsibilities with the Company;

 

(iii)a
material reduction in the Executive’s Base Salary or benefits (but not including any reduction related to a broader compensation
reduction by the Company that is not limited to any particular employee or executive);

 

(iv)a
relocation of the Executive’s principal business location to an area outside of a 35 mile radius of both the Executive’s
principal business location and the Executive’s principal residence at the time of such relocation; or

 

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(v)a
material breach of this Agreement by the Company.

 

Notwithstanding the foregoing,
the Executive agrees that, during any period of incapacity, the Company may appoint or temporarily assign his duties to another
or others without such action resulting in Good Reason.

 

(f)Without
Good Reason. Upon 60 days’ prior written notice by the Executive to the Company of the Executive’s voluntary termination
of employment without Good Reason (which the Company may, in its sole discretion, make effective earlier than any notice date).

 

7.CONSEQUENCES
OF TERMINATION.

 

(a)Disability.
In the event the Executive’s employment is terminated due to Disability upon or prior to the Expiration Date, the Company
shall pay or provide the Executive (i) any unpaid Base Salary through the date of termination paid in accordance with the Company’s
normal payroll policies as if the Executive were an employee; (ii) any Annual Bonus earned but unpaid with respect to the fiscal
year ending on or preceding the date of termination, paid when such Annual Bonus would have ordinarily been paid in accordance
with the Bonus Plan; (iii) reimbursement for any unreimbursed expenses through the date of termination incurred and paid in accordance
with the Company’s normal reimbursement procedures; (iv) any other amounts and benefits the Executive is entitled to receive
under any employee benefit plan in accordance with the terms of the applicable plan (collectively items (i) through (iv) shall
be hereafter referred to as the “Accrued Amounts”); (v) a pro-rata portion of the Executive’s Annual Bonus
for the fiscal year in which the Executive’s termination occurs based on actual results for the fiscal year (determined by
multiplying the amount of such bonus which would be due for the full fiscal year by a fraction, the numerator of which is the number
of days during the fiscal year of termination that the Executive is employed by the Company and the denominator of which is 365),
paid when such Annual Bonus would have ordinarily been paid in accordance with the Bonus Plan (the “Pro Rata Bonus”);
(vi) full vesting of all equity awards granted to the Executive on or after the Effective Date; (vii) subject to Section 25(b)
hereof and solely to the extent the Executive does not otherwise receive such coverage under any other medical benefits available
to the Executive as a result of his Disability, if the Executive timely elects continuation coverage (“COBRA Coverage”)
under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) for continuation of coverage
under the Company’s group health insurance plans in which the Executive participated immediately prior to the date of termination
(the “Health Plans”), the Company shall pay to the Executive monthly an amount equal to the difference of the
Executive’s premium costs for such COBRA Coverage for the Executive and the Executive’s dependents minus the active
employee rate under the Health Plans (excluding, for purposes of calculating cost, an employee’s ability to pay premiums
with pre-tax dollars) being paid by the Executive at the time of termination of employment, if any, until the earliest of (x) 18
months from the date of termination, (y) the Executive’s ceasing to have a physical or mental disability that would have
prevented him from performing his material duties hereunder and (z) the Executive and the Executive’s dependents otherwise
ceasing to be eligible for COBRA Coverage (the “Disability COBRA Payments”); provided, that unless subject
to further delay as set forth in Section 25(b), the first payment of the Disability COBRA Payments will made on the sixtieth (60th)
day after the date of termination and will include payment of any amounts that would otherwise be due prior thereto; and (viii)
continued payment of the Make-Up Payments in accordance with Section 5(b) (including payment timing). Following a termination due
to Disability all equity awards granted to the Executive prior to the Effective Date shall be governed in accordance with the terms
of the applicable grant agreements.

 

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(b)Death.
In the event the Executive’s employment is terminated due to the Executive’s death upon or prior to the Expiration
Date, the Company shall pay or provide to the Executive’s estate (i) the Accrued Amounts; (ii) the Pro Rata Bonus; (iii)
full vesting of all equity awards granted to the Executive on or after the Effective Date; and (iv) subject to the Executive’s
dependents timely election of COBRA Coverage under the Health Plans, the Company shall pay to the Executive’s dependents
monthly an amount equal to the difference of the premium costs for such COBRA Coverage for the Executive’s dependents minus
the active employee rate under the Health Plans (excluding, for purposes of calculating cost, an employee’s ability to pay
premiums with pre-tax dollars) being paid by the Executive at the time of termination of employment, if any, until the earlier
of (i) three (3) years from the date of the Executive’s death and (ii) the Executive’s dependents ceasing to be eligible
for COBRA Coverage. Following a termination due to the Executive’s death all equity awards granted to the Executive prior
to the Effective Date shall be governed in accordance with the terms of the applicable grant agreements.

 

(c)Termination
For Cause Or Without Good Reason. In the event the Executive’s employment is terminated (i) by the Company for Cause,
or (ii) by the Executive without Good Reason, the Company shall pay or provide to the Executive the Accrued Amounts. Following
any such termination all equity awards granted to the Executive shall be governed in accordance with the terms of the applicable
grant agreements.

 

(d)Termination
Without Cause Or For Good Reason. In the event the Executive’s employment is terminated upon or prior to the Expiration
Date (x) by the Company other than for Cause or (y) by the Executive for Good Reason, and Section 8(a) does not apply, the Company
shall pay or provide to the Executive (i) the Accrued Amounts; (ii) continued payment of the Make-Up Payments paid in accordance
with Section 5(b) (including payment timing); and (iii) subject to Section 9:

 

(A)subject
to Section 25(b), continued payments of Base Salary for twenty (20) months following the date of termination (the “Severance
Payment”) paid in accordance with the Company’s normal payroll policies as if the Executive were an employee (but
off employee payroll); provided, that unless subject to further delay as set forth
in Section 25(b), the first payment of the Severance Payment will made on the sixtieth (60th)
day after the date of termination and will include payment of any amounts that would otherwise be due prior thereto;

 

(B)the
Pro Rata Bonus; and

 

(C)subject
to Section 25(b) hereof, if the Executive timely elects COBRA Coverage under the Health Plans, the Company shall pay to the Executive
monthly an amount equal to the difference of the Executive’s premium costs for such COBRA Coverage for the Executive and
the Executive’s dependents minus the active employee rate under the Health Plans (excluding, for purposes of calculating
cost, an employee’s ability to pay premiums with pre-tax dollars) being paid by the Executive at the time of termination
of employment, if any, until the earliest of (I) eighteen (18) months from the date of termination, (II) the Executive becoming
eligible for medical benefits from a subsequent employer, or (III) the Executive and the Executive’s dependents otherwise
ceasing to be eligible for COBRA Coverage (the “Termination COBRA Payments”); provided, that unless subject
to further delay as set forth in Section 25(b), the first payment of the Termination COBRA Payments will made on the sixtieth (60th)
day after the date of termination and will include payment of any amounts that would otherwise be due prior thereto.

 

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Following any such termination all equity
awards granted to the Executive shall be governed in accordance with the terms of the applicable grant agreements. Payments and
benefits provided in this Section 7(d) shall be in lieu of any termination or severance payments or benefits for which the Executive
may be eligible under any of the plans, policies or programs of the Company.

 

8.CHANGE
IN CONTROL.

 

(a)Notwithstanding
anything herein to the contrary, subject to Section 8(c), in the event a Change in Control occurs prior to the Expiration Date
and the Executive’s employment is terminated by the Company without Cause or the Executive resigns for Good Reason within
two (2) years following such Change in Control, then in lieu of the amounts and benefits under Section 7(d), the Company shall
pay or provide to the Executive (i) the Accrued Amounts; (ii) continued payment of the Make-Up Payments paid in accordance with
Section 5(b) (including payment timing); and (iii) subject to Section 9:

 

(A)subject
to Section 25(b), payment in an amount equal to twenty (20) months Base Salary, such payment to be made as follows: (x)
if the Change in Control is not as a result of an event that constitutes a “change in control event”
(a “409A Change in Control”) within the meaning of Section 409A of the Internal Revenue Code of 1986,
as amended (the “Code”), and the regulations and guidance promulgated thereunder (collectively
“Code Section 409A”), then such payment shall be paid to the Executive in equal installments for 18 months
following the date of termination in accordance with the Company’s normal payroll policies as if the Executive were an
employee (but off employee payroll); provided, that unless subject to further delay as set forth in Section 25(b), the
first payment of such payment will made on the sixtieth (60th) day after the date of termination and will include
payment of any amounts that would otherwise be due prior thereto, and (y) if the Change in Control does result from an event
that constitutes a 409A Change in Control, then the full amount of such payment shall be paid to the Executive in a lump sum
on the 60th day after the date of termination;

 

(B)the
Pro Rata Bonus; and

 

(C)the
Termination COBRA Payments; provided, that unless subject to further delay as set forth in Section 25(b), the first payment
of the Termination COBRA Payments will made on the sixtieth (60th) day after the date of termination and will include
payment of any amounts that would otherwise be due prior thereto.

 

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Following any such termination all equity
awards granted to the Executive shall be governed in accordance with the terms of the applicable grant agreements.

 

(b)For
purposes of this Agreement, “Change in Control” will mean the occurrence of one of the following events:

 

(i)any
“person” (as such term is defined in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes, after the Effective Date, a “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing
50% or more of the combined voting power of the Company’s then outstanding securities eligible to vote for the election of
the Board (the “Company Voting Securities”); provided, however, that an event described in this subsection (i)
shall not be deemed to be a Change in Control if any of following becomes such a beneficial owner:

 

(A)the Company
or any majority-owned subsidiary (provided, that this exclusion applies solely to the ownership levels of the Company or the majority-owned
subsidiary),

 

(B)any tax-qualified,
broad-based employee benefit plan sponsored or maintained by the Company or any majority-owned subsidiary,

 

(C)any underwriter
temporarily holding securities pursuant to an offering of such securities, or

 

(D)any person
pursuant to a Non-Qualifying Transaction (as defined below);

 

(ii)individuals
who, on the Effective Date, constitute the Board (the “Incumbent Directors”) cease for any reason to constitute
at least a majority of the Board, provided that any person becoming a director subsequent to the Effective Date whose election
or nomination for election was approved by a vote of at least two-thirds of the Incumbent Directors then on the Board (either by
a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without
objection to such nomination) shall be an Incumbent Director.

 

(iii)the
consummation of a merger, consolidation, statutory share exchange or similar form of corporate transaction involving the Company
or any of its Subsidiaries that requires the approval of the Company’s stockholders, whether for such transaction or the
issuance of securities in the transaction (a “Business Combination”), unless immediately following such Business
Combination:

 

(A)50% or
more of the total voting power of:

 

(x)the
corporation resulting from such Business Combination (the “Surviving Corporation”), or

 

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(y)if applicable,
the ultimate parent corporation that directly or indirectly has beneficial ownership of 100% of the voting securities eligible
to elect directors of the Surviving Corporation (the “Parent Corporation”),

 

is represented
by Company Voting Securities that were outstanding immediately prior to such Business Combination (or, if applicable, is represented
by shares into which such Company Voting Securities were converted pursuant to such Business Combination), and such voting power
among the holders thereof is in substantially the same proportion as the voting power of such Company Voting Securities among the
holders thereof immediately prior to the Business Combination;

 

(B)no person
(other than any employee benefit plan (or related trust) sponsored or maintained by the Surviving Corporation or the Parent Corporation),
is or becomes the beneficial owner, directly or indirectly, of 50% or more of the total voting power of the outstanding voting
securities eligible to elect directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation);
and

 

(C)at least
a majority of the members of the board of directors of the Parent Corporation (or if there is no Parent Corporation, the Surviving
Corporation) following the consummation of the Business Combination were Incumbent Directors at the time of the Board’s approval
of the execution of the initial agreement providing for such Business Combination

 

(any Business Combination which
satisfies all of the criteria specified in (A), (B) and (C) above shall be deemed to be a “Non-Qualifying Transaction”);
or

 

(iv)consummation
of the sale of all or substantially all of the Company’s assets or stockholder approval of a liquidation or dissolution of
the Company, unless the voting common equity interests of the acquirer of such assets or an ongoing entity (other than a liquidating
trust), as the case may be, based on total voting power, are at least more than 50% beneficially owned, directly or indirectly,
by the Company’s shareholders in substantially the same proportions as such shareholders owned the Company’s outstanding
voting common equity interests immediately prior to such sale or liquidation and, if a plan of liquidation or dissolution, such
ongoing entity assumes all existing obligations of the Company under this Plan.

 

Notwithstanding the foregoing,
a Change in Control of the Company shall not be deemed to occur solely because any person acquires beneficial ownership of more
than 50% of the Company Voting Securities, based on total voting power, as a result of the acquisition of Company Voting Securities
by the Company which reduces the number of Company Voting Securities outstanding; provided, that, if after such acquisition by
the Company such person becomes the beneficial owner of Company Voting Securities that increases the percentage of outstanding
Company Voting Securities beneficially owned by such person, a Change in Control of the Company shall then occur.

 

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(c)Notwithstanding
anything else herein, if any payment or benefit, within the meaning of Section 280G(b)(2) of the Code, to the Executive or for
Executive’s benefit paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise
in connection with, or arising out of, Executive’s employment with the Company or a change in ownership or effective control
of the Company or of a substantial portion of its assets, would be subject to the excise tax imposed by Section 4999 of the Code
or any interest or penalties are incurred by the Executive with respect to such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), the amounts and
benefits provided under this Agreement or otherwise that are subject to Section 280G of the Code as a result of the transaction
will be automatically reduced to an amount that equals the product of 2.99 multiplied by the Executive’s “base amount”
(as determined in accordance with Sections 280G and 4999 of the Code by the Company’s certified public accountants unless
the Company and the Executive mutually agree to the appointment of an independent certified public accounting firm), such that
the Executive will not be subject to the Excise Tax. Unless otherwise elected by the Executive, to the extent permitted under Code
Section 409A, such reduction shall first be applied to any severance payments payable to the Executive under this Agreement in
reverse order of receipt, then to the vesting on any equity, with underwater stock options first net withholding, and thereafter
any in-the-money stock options starting from the stock options with smallest spread between fair market value and exercise price,
and thereafter any restricted stock or restricted stock units.

 

9.RELEASE.
Any and all amounts payable and benefits or additional rights provided pursuant to Sections 7(d)(iii) or 8(a)(iii) shall only be
payable or provided if the Executive executes and delivers to the Company a general release of all claims against the Company in
the form attached to the Agreement as Appendix A (the “Release”) (with such changes as the Company may
request to support the legality and effectiveness of the Release). The Company shall provide the Executive with a copy of the Release
within seven (7) days following the Executive’s date of termination and the Executive will be required to provide the Company
with an executed copy of the Release that has become effective
within sixty (60) days following the Executive’s date of termination.

 

10.RESTRICTIVE
COVENANTS.

 

(a)Confidentiality.
The Executive agrees that he shall not, directly or indirectly, use, make available, sell, disclose or otherwise communicate to
any person, other than in the reasonable good faith performance of his duties and for the benefit of the Company, either during
the period of the Executive’s employment or at any time thereafter, any nonpublic, proprietary or confidential information,
knowledge or data relating to the Company, any of its subsidiaries, affiliated companies or businesses, which shall have been obtained
by the Executive during the Executive’s employment by the Company. The foregoing shall not apply to information that (i)
was known to the public prior to its disclosure to the Executive; (ii) becomes generally known to the public subsequent to disclosure
to the Executive through no wrongful act of the Executive or any representative of the Executive; or (iii) the Executive is required
to disclose by applicable law, regulation or legal process (provided that the Executive provides the Company with prior notice
of the contemplated disclosure and reasonably cooperates with the Company at its expense in seeking a protective order or other
appropriate protection of such information).

 

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(b)Nonsolicitation.
During the Executive’s employment with the Company and for the 12 month period thereafter, the Executive agrees that he will
not, except in the furtherance of his duties hereunder, directly or indirectly, individually or on behalf of any other person,
firm, corporation or other entity, (i) solicit or hire any employees, representatives or agents of the Company (or any of its affiliates)
or (ii) solicit any of the Company’s customers.

 

(c)Noncompetition.
The Executive acknowledges that he performs services of a unique nature for the Company that are irreplaceable, and that his performance
of such services to a competing business will result in irreparable harm to the Company. Accordingly, during the Executive’s
employment hereunder and for the 12 month period thereafter, the Executive agrees that the Executive will not, (i) enter the employ
of (whether as an employee, consultant, independent contractor or otherwise, and whether or not for compensation), or render any
services to, any person, firm, corporation or other entity, in whatever form, engaged or actively planning to be engaged in any
Competitive Business, (ii) directly or indirectly, own, manage, operate, control or otherwise engage in such a Competitive Business
for his own account, or (iii) directly or indirectly, become interested in a Competitive Business as an individual, partner, shareholder,
director, officer, principal, agent, trustee or in any other relationship or capacity. “Competitive Business”
will mean, as of any date, any business competitive with any business then being conducted by the Company and operating in some
or all of the same geographic areas; provided that, upon the termination of the Executive’s employment such determinations
shall thereafter be determined as of the date of the termination. The foregoing shall not be violated by the Executive’s
providing services to a noncompetitive portion of a group of related businesses which noncompetitive portion consists of less than
20% of the overall revenues of such group of related businesses measured based on the fiscal year prior to the fiscal year in which
the Executive had his initial relationship with such noncompetitive portion, nor by ownership of less than 2% of public company
stock or debt or a passive interest of less than 2% in a pooled account, such as a hedge fund, private equity fund or mutual fund.

 

(d)Nondisparagment.
During the Employment Term and thereafter, the Executive agrees not to disparage or encourage or induce others to disparage the
Company or any of its affiliates or any of its and their past and present officers, directors, employees, products or services.
For purposes of this Agreement, the term “disparage” includes, without limitation, comments or statements to
the press, to the Company or any of its affiliates or any of its or their officers, directors, or employees or to any individual
or entity with whom the Company or any of its affiliates has a business relationship (including, without limitation, any vendor,
supplier, customer or distributor of the Company or any of its affiliates) that would adversely affect in any manner: (i) the conduct
of any business of the Company or any of its affiliates (including, without limitation, any business plans or prospects) or (ii)
the business reputation of the Company or any of its affiliates or any of its and their officers, directors, employees, products
or services. Notwithstanding the foregoing, this Section 10(d) shall not apply to truthful statements made in the course of sworn
testimony in administrative, judicial or arbitral proceedings or normal competitive statements.

 

(e)Reformation.
If it is determined by a court of competent jurisdiction in any state that any restriction in this Section 10 is excessive in duration
or scope or is unreasonable or unenforceable under the laws of that state, it is the intention of the parties that such restriction
may be modified or amended by the court to render it enforceable to the maximum extent permitted by the law of that state.

 

    	11

    	 

    

 

(f)Survival
of Provisions. The obligations contained in this Section 10 shall survive the termination or expiration of the Executive’s
employment with the Company and shall be fully enforceable thereafter.

 

11.COOPERATION.
Upon the receipt of reasonable notice from the Company (including outside counsel), the Executive agrees that while employed by
the Company and thereafter, the Executive will respond and provide information with regard to matters in which he has knowledge
as a result of his employment with the Company, and will provide reasonable assistance to the Company, its affiliates and their
respective representatives in defense of any claims that may be made against the Company or its affiliates, and will assist the
Company and its affiliates in the prosecution of any claims that may be made by the Company or its affiliates, to the extent that
such claims may relate to the period of the Executive’s employment with the Company. The Executive agrees to promptly inform
the Company if he becomes aware of any lawsuits involving such claims that may be filed or threatened against the Company or its
affiliates. The Executive also agrees to promptly inform the Company (to the extent he is legally permitted to do so) if he is
asked to assist in any investigation of the Company or its affiliates (or their actions), regardless of whether a lawsuit or other
proceeding has then been filed against the Company or its affiliates with respect to such investigation, and shall not do so unless
legally required. Upon presentation of appropriate documentation, the Company shall pay or reimburse the Executive for all reasonable
out-of-pocket travel, duplicating or telephonic expenses incurred by the Executive in complying with this Section 11.

 

12.EQUITABLE
RELIEF AND OTHER REMEDIES.

 

(a)The
Executive acknowledges and agrees that the Company’s remedies at law for a breach or threatened breach of any of the provisions
of Section 10 or Section 11 would be inadequate and, in recognition of this fact, the Executive agrees that, in the event of such
a breach or threatened breach, in addition to any remedies at law, the Company, without posting any bond, shall be entitled to
obtain equitable relief in the form of specific performance, temporary restraining order, a temporary or permanent injunction or
any other equitable remedy which may then be available.

 

(b)In
the event of a violation of Section 10 or 11 of this Agreement, any severance being paid to the Executive by the Company pursuant
to this Agreement (or any successor agreement) or otherwise shall immediately cease.

 

    	12

    	 

    

 

13.NO
ASSIGNMENTS.

 

(a)This
Agreement is personal to each of the parties hereto. Except as provided in Section 13(b) below, no party may assign or delegate
any rights or obligations hereunder without first obtaining the written consent of the other party hereto.

 

(b)The
Company may assign this Agreement to any successor to all or substantially all of the business and/or assets of the Company provided
the Company shall require such successor to expressly assume and agree to perform this Agreement and, if applicable, any Change
in Control Agreement (but without creating any rights on a second change in control), in the same manner and to the same extent
that the Company would be required to perform it if no such succession had taken place.

 

14.NOTICE.
For the purpose of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given (i) on the date of delivery if delivered by hand, (ii) on the date of transmission, if
delivered by confirmed facsimile, (iii) on the first business day following the date of deposit with the overnight delivery service
if delivered by guaranteed overnight delivery service, or (iv) on the fourth business day following the date mailed by United States
registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

 

If to the Executive:

 

At the last address (or to the facsimile number) shown on the
records of the Company;

 

With a copy to:

 

Ruskin Moscou Faltischek, P.C.

East Tower, 15th Floor

1425 RXR Plaza

Uniondale, NY 11556-1425

Attn: Michael Faltischek

 

If to the Company:

 

P&F Industries, Inc.

445 Broadhollow Road

Suite 100

Melville, New York 11747

Facsimile: (631) 773-4230

Attn: Chief Operating Officer

 

With a copy to:

 

SilvermanAcampora LLP

100 Jericho Quadrangle, Suite 300

Jericho, New York 11753

Facsimile: (516) 479-6301

Attn: Steven J. Kuperschmid, Esq.

 

and

 

    	13

    	 

    

 

Proskauer Rose LLP

Eleven Times Square

New York, New York 10036-8299

Facsimile: (212) 969-2900

Attn: Michael S. Sirkin, Esq.

 

or to such other address as either party
may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective
only upon receipt.

 

15.SECTION
HEADINGS; INCONSISTENCY. The section headings used in this Agreement are included
solely for convenience and shall not affect, or be used in connection with, the interpretation of this Agreement. In the event
of any inconsistency between the terms of this Agreement and any form, award, plan or policy of the Company, the terms of this
Agreement shall control.

 

16.SEVERABILITY.
The provisions of this Agreement shall be deemed severable and the invalidity of unenforceability of any provision shall not affect
the validity or enforceability of the other provisions hereof.

 

17.COUNTERPARTS.
This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together
will constitute one and the same instruments.

 

18.ARBITRATION.
Any dispute or controversy arising under or in connection with this Agreement or the Executive’s employment with the Company,
other than injunctive relief under Section 12 hereof, shall be settled exclusively by arbitration, conducted before a single arbitrator
in New York, New York (applying New York law) in accordance with the National Rules for the Resolution of Employment Disputes of
the American Arbitration Association then in effect. The decision of the arbitrator will be final and binding upon the parties
hereto. Judgment may be entered on the arbitrator’s award in any court having jurisdiction. The parties acknowledge and agree
that in connection with any such arbitration and regardless of outcome (a) each party shall pay all its own costs and expenses,
including without limitation its own legal fees and expenses, and (b) joint expenses shall be borne equally among the parties;
provided, however, in the event that the arbitrator determines that the Executive is the prevailing party, then the Company shall
pay or reimburse all reasonable legal fees and expenses incurred by the Executive.

 

19.INDEMNIFICATION.
The Company hereby agrees to indemnify the Executive and hold him harmless to the extent provided under the by-laws of the Company
against and in respect to any and all actions, suits, proceedings, claims, demands, judgments, costs, expenses (including reasonable
attorney’s fees), losses, and damages resulting from the Executive’s good faith performance of his duties and obligations
with the Company. This obligation shall survive the termination of the Executive’s employment with the Company.

 

20.LIABILITY
INSURANCE. The Company shall cover the Executive under directors and officers liability insurance both during and, while potential
liability exists, after the term of this Agreement in the same amount and to the same extent as the Company covers its other officers
and directors.

 

    	14

    	 

    

 

21.MISCELLANEOUS.
No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and such officer or director as may be designated by the Board. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement
to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at
any prior or subsequent time. This Agreement supersedes any and all other agreements, either oral or in writing, between the parties
hereto (including without limitation the Prior Agreement) with respect to the employment of the Executive by the Company and, together
with all exhibits hereto sets forth the entire agreement of the parties hereto in respect of the subject matter contained herein.
No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made
by either party which are not expressly set forth in this Agreement. The validity, interpretation, construction and performance
of this Agreement shall be governed by the laws of the State of New York without regard to its conflicts of law principles.

 

22.NO
MITIGATION; TERMINATION CLAIM LIMIT. In no event shall the Executive be obliged to seek other employment or take any other
action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement, nor shall the
amount of any payment hereunder be reduced by any compensation earned by the Executive as a result of employment by another employer,
except as provided in Section 12(b) hereof. Any claim by the Executive for damages as a result of a termination based on Section
6(c)(iv) shall not be brought prior to resolution of the criminal case and the Executives damages shall be limited to (a) the monetary
amounts the Executive would have received in the event of a termination without Cause and (b) the intrinsic value on the termination
date of any equity vested at, or upon, such termination that the Executive forfeited or did not receive because of the classification
of the termination for Cause (and the Executive shall have no right to the equity, which shall be cancelled upon the termination
for Cause).

 

23.REPRESENTATIONS.
The Executive represents and warrants to the Company that he has the legal right to enter into this Agreement and to perform all
of the obligations on his part to be performed hereunder in accordance with its terms and that he is not a party to any agreement
or understanding, written or oral, which could prevent him from entering into this Agreement or performing all of his obligations
hereunder.

 

24.WITHHOLDING.
The Company may withhold from any and all amounts payable under this Agreement such federal, state and local taxes as may be required
to be withheld pursuant to any applicable law or regulation.

 

25.SECTION
409A COMPLIANCE.

 

(a)The
intent of the parties is that payments and benefits under this Agreement comply with, or be exempt from, Code Section 409A and,
accordingly, to the maximum extent permitted, this Agreement shall be limited, construed and interpreted in accordance with such
intent. If the Executive notifies the Company (with specificity as to the reason therefore) that the Executive believes that any
provision of this Agreement (or of any award of compensation, including equity compensation or benefits) would cause the Executive
to incur any additional tax or interest under Code Section 409A and the Company concurs with such belief or the Company (without
any obligation whatsoever to do so) independently makes such determination, and modifying such provision would avoid such additional
tax or interest, the Company shall, after consulting with the Executive, reform such provision to try to comply with Code Section
409A through good faith modifications to the minimum extent reasonably appropriate to conform with Code Section 409A. To the extent
that any provision hereof is modified in order to comply with Code Section 409A, such modification shall be made in good faith
and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to the Executive and the
Company of the applicable provision without violating the provisions of Code Section 409A.

 

    	15

    	 

    

 

(b)A
termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the
payment of any amounts or benefits upon or following a termination of employment unless such termination is also a “Separation
from Service” within the meaning of Code Section 409A and, for purposes of any such provision of this Plan, references to
a “termination,” “termination of employment” or like terms shall mean Separation from Service. Notwithstanding
any provision to the contrary in this Agreement, if the Executive is deemed on the date of his
termination to be a “specified employee” within the meaning of that term under Code Section 409A(a)(2)(B)
and using the identification methodology selected by the Company from time to time, or if none, the default methodology set forth
in Code Section 409A, then with regard to any payment or the providing of any
benefit that constitutes “non-qualified deferred compensation” pursuant to Code
Section 409A that is payable due to the Executive’s Separation from Service, to the extent required to be delayed
in compliance with Code Section 409A(a)(2)(B), such payment or benefit shall not be made or provided to
the Executive (subject to the last sentence of this Section 25(b)) prior to the earlier of (i) the expiration of the six
(6)-month period measured from the date of the Executive’s Separation from Service,
and (ii) the date of the Executive’s death (the “Delay Period”). For avoidance of doubt, the Severance Payment
shall not be treated as non-qualified deferred compensation that is required to be delayed in compliance with Code Section 409A(a)(2)(B)
to the extent that it meets the exemption set forth in Department of Treasury Regulation Section 1.409A-1(b)(9)(iii) (for separation
pay due to involuntary separation from service) and only that portion, if any, of the Severance Payment that exceeds the exempt
amount shall be subject the delay, if any, required pursuant to the preceding sentence. On the
first day of the seventh month following the date of the Executive’s Separation from Service or, if earlier, on the date
of the Executive’s death, all payments delayed pursuant to this Section 25(b) (whether they would have otherwise
been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to the Executive in
a lump sum, and any remaining payments and benefits due to the Executive under this Agreement
shall be paid or provided in accordance with the normal payment dates specified for them herein. Notwithstanding the foregoing,
to the extent that the provision of any welfare benefits provided to the Executive following
his Separation from Service will be treated as non-qualified deferred compensation that is required to be delayed (after taking
into account the exemption in Department of Treasury Regulation Section 1.409A-1(b)(9)(v)) but would not be required to be delayed
if the premiums therefor were paid by the Executive, the Executive shall pay the full
cost of the premiums for such welfare benefits during the Delay Period and the Company shall pay the Executive an amount equal
to the amount of such premiums paid by the Executive during the Delay Period promptly after its conclusion.

 

    	16

    	 

    

 

(c)In
no event whatsoever shall the Company be liable for any additional tax, interest or penalties that may be imposed on the Executive
by Code Section 409A or any damages for failing to comply with Code Section 409A.

 

(d)To
the extent any reimbursement of costs and expenses provided for under this Agreement constitutes taxable income to the Executive
for Federal income tax purposes, such reimbursements shall be made no later than December 31 of the calendar year next following
the calendar year in which the expenses to be reimbursed are incurred.

 

(e)With
regard to any provision herein that provides for reimbursement of expenses or in-kind benefits, except as permitted by Code Section
409A, (i) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit, (ii) the
amount of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the expenses
eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year, provided that the foregoing clause
(ii) shall not be violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely
because such expenses are subject to a limit related to the period the arrangement is in effect.

 

(f)If
under this Agreement, an amount is to be paid in two or more installments, for purposes of Code Section 409A, each installment
shall be treated as a separate payment.

 

(g)Whenever
a payment under the Agreement specifies a payment period with reference to a number of days, the actual date of payment within
the specified period shall be within the sole discretion of the Company.

 

(h)To
the extent that this Agreement provides for your indemnification by the Company and/or the payment or advancement of costs and
expenses associated with indemnification, any such amounts shall be paid or advanced to the Executive only in a manner and to the
extent that such amounts are exempt from the application of Code Section 409A in accordance with the provisions of Treasury Regulation
1.409A-1(b)(10) or that are provided in accordance with Code Section 409A.

 

26.CLAWBACKS.
The Executive hereby acknowledges and agrees that he is subject to Section 304 of the Sarbanes-Oxley Act of 2002, and that pursuant
thereto he may under certain circumstances be obligated to pay back to the Company certain amounts previously received by him.
In addition, the Executive hereby acknowledges and agrees that he shall be subject to any clawback policy adopted or implemented
by the Company in respect of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and such regulations as are
promulgated thereunder from time to time to the extent required by the Act and the implementing regulations.

 

 

 

[End of text - Signature
page follows]

 

    	17

    	 

    

 

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

 

	 	P&F INDUSTRIES, INC.
	 	 
	 	By:	/s/ Kenneth Scheriff
	 	Name:	Kenneth Scheriff
	 	Its:	Chairman of the Compensation Committee of the Board of Directors
	 	 	 
	 	 	 
	 	 	/s/ Richard A. Horowitz
	 	 	Richard A. Horowitz

 

    	18

    	 

    

 

 

APPENDIX A

 

FORM OF RELEASE

 

AGREEMENT AND
GENERAL RELEASE AND WAIVER, dated as of January 1, 2015 (the “Agreement”), by and between RICHARD A. HOROWITZ
(the “Employee”) and P&F INDUSTRIES, INC., a Delaware corporation (the “Company”).

 

The Employee and the
Company mutually want to enter into this Agreement concerning the Employee’s separation from the Company. Where appropriate
in the context of this Agreement, the term “Company” includes, the Company’s past, present and future subsidiaries,
affiliates, divisions, parents, and any of its or their respective predecessors, successors, assigns, assets, employee benefit
plans or funds and its or their past, present and future directors, officers, fiduciaries, trustees, administrators, representatives,
shareholders, agents, employees, and independent contractors, whether acting on behalf of the Company or in their individual capacities.

 

1.The Employee acknowledges
and agrees that (a) his last date of employment with the Company was __________ (the “Termination Date”), (b) the Termination
Date was the termination date of his employment with the Company for purposes of participation in and coverage under all benefit
plans and programs sponsored by or through the Company, (c) the Company shall have no obligation to rehire the Employee, or to
consider him for employment, after the Termination Date, and (d) he will not seek employment with the Company at any time in the
future.

 

2.The Employee acknowledges
that he has carefully read this Agreement in its entirety, the terms and implications of this Agreement have been fully explained
to the Employee, the Employee has had answered to his satisfaction any questions he has asked with regard to the meaning and significance
of any provision of this Agreement, and that he fully understands the significance of all of the terms and conditions of this Agreement.

 

3.The Employee acknowledges
that he has been given the opportunity to consider this Agreement for twenty-one (21) days and decide for himself whether or not
he wants to sign it.

 

4.The Employee acknowledges
that he has been advised to consult with an attorney of his choice concerning this Agreement and the implications to the Employee
of signing or not signing it.

 

5.The Employee acknowledges
that he has carefully considered other alternatives to executing this Agreement, and has decided that he wants to sign it.

 

6.The Employee may
accept this Agreement by signing it and returning it to _____________, P&F Industries, Inc., 445 Broadhollow Road, Suite 100,
Melville, New York, 11747, within twenty-one (21) days of his receipt of this Agreement. The Employee is entitled to change his
mind and revoke this Agreement by indicating his desire to do so in writing delivered to __________ at the address above (or by
fax at (     )    -     ) by no later than 5:00 p.m. EST on the
seventh (7th) day after the date he signs this Agreement (the “Revocation Period”). This Agreement will not become
effective and the Employee will not receive any of the benefits set out below until the eighth (8th) day after the Employee signs
it (the “Effective Date”). If the last day of the Revocation Period falls on a Saturday, Sunday or holiday, the last
day of the Revocation Period will be deemed to be the next business day.

 

    	 

    	 

    

 

7.In consideration
for the Employee’s signing and not revoking this Agreement, the Company has agreed to pay the Employee the consideration
set forth in Section [IF TERMINATION IS NOT IN CONNECTION WITH A CHANGE IN CONTROL - 7(d)(iii)] [IF TERMINATION IS IN CONNECTION
WITH A CHANGE IN CONTROL – 8(a)(iii)] of that certain Executive Employment Agreement, dated as of January 1, 2015, by and
between the Company and the Employee (the “Employment Agreement”). The Company and the Employee expressly agree that
the Company is not otherwise obligated to pay such consideration; that the Employee is not otherwise entitled to receive any of
such consideration; and that, if the Employee does not sign this Agreement or revokes this Agreement during the Revocation Period,
the Company will have no further obligations to the Employee under this Agreement, including, without limitation, the obligation
to make the payments set forth in Section 7 of this Agreement.

 

8.By entering into
this Agreement, the parties do not admit, and specifically deny, any liability or wrongdoing, or violation of any law, statute,
order, regulation or policy. It is expressly understood and agreed that this Agreement is being entered into solely for the purpose
of avoiding the costs of litigation and amicably resolving all matters in controversy, disputes, causes of action, claims, contentions
and differences of any kind whatsoever which have been or could have been alleged by the respective parties against each other.

 

9.The Employee acknowledges
that he knows that there are various state and federal laws which prohibit employment discrimination on the basis of age, sex,
race, color, creed, national origin, marital status, religion, disability or veteran status and that these laws are enforced through
the Federal Equal Employment Opportunity Commission, the New York State Division of Human Rights and various city, county and local
human rights agencies.  In addition, the Employee acknowledges that he knows that there are other federal, state, and local
laws of other types or description regarding employment, including, but not limited to, claims arising from or derivative of the
Employee’s employment with the Company.

 

    	 

    	 

    

 

10.The consideration
set forth in Section 7 of this Agreement is in full and complete satisfaction of all claims whatsoever the Employee may have against
the Company arising from the Employee’s employment and/or separation from employment with the Company, or from any other
matter whatsoever up to and including the date of this Agreement, whether known or unknown. Without limiting the generality of
the foregoing, the Employee hereby releases, waives, and forever discharges any and all claims of any kind against the Company
arising from the Employee’s employment and/or separation from employment with the Company, or from any other matter whatsoever
up to and including the date of this Agreement, whether known or unknown, that he may have or had, including, but not limited to,
fraud, claims arising under Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. §621 et. seq.,
Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. §2000 et. seq., the Civil Rights Act of 1866,
42 U.S.C. §1981, 42 U.S.C. §1983, The Equal Pay Act, as amended, 29 U.S.C. §206(d)(1), the Fair Labor Standards
Act of 1938, as amended, 29 U.S.C. §201 et. seq., the Family and Medical Leave Act of 1993, 29 U.S.C. §2601
et. seq., the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. §1001 et. seq.,
the Americans with Disabilities Act, 42 U.S.C. §12101 et. seq., the Civil Rights Act of 1991, 105 Stat. 1071,
Executive Order 11246, the Sarbanes-Oxley Act of 2002 (a federal whistleblower law), the New York State Human Rights Law, New York
City Human Rights Law, New York Equal Pay Law and N.Y. Lab. Law, Section’s 201-c (adoptive parent leave) and 740 (whistle
blower statute (private employees)), all as amended, and any other federal, state and local fair employment practice law, workers’
compensation law, unemployment insurance law, and any other employee relations duties and obligations, whether imposed by express
or implied contract, tort (including, but not limited to, all intentional torts, negligence, negligent hiring, training, supervision
or retention), common law, equity, public policy statute, executive order or law, any claims for physical or emotional distress
or injuries, or any other duty obligation of any kind or description, as well as any rights or claims the Employee or his attorney
or other representative have or may have for costs, expenses, attorneys’ fees or otherwise. The foregoing shall not apply
to the Employee’s right to receive the payments and benefits provided under Sections [IF TERMINATION IS NOT IN CONNECTION
WITH A CHANGE IN CONTROL - 7(d)(i) and (ii)] [IF TERMINATION IS IN CONNECTION WITH A CHANGE IN CONTROL – 8(a)(i) and (ii)]
of the Employment Agreement, nor to the Employee’s rights, if any, to indemnification as an officer of the Company or a fiduciary
of any Company benefit plan. In addition, nothing in this Agreement shall be construed to prevent the Employee from filing a charge
with, or participating in an investigation conducted by, any governmental agency, including, without limitation, the Equal Employment
Opportunity Commission or applicable state/city fair employment practices agency, to the extent required or permitted by law, or
to prevent any challenge by the Employee to the waiver and release of any claims as set forth herein; provided, that the
Employee hereby agrees not to accept any award or settlement from any source or proceeding (including, but not limited to, any
proceeding brought by any other person or by any government agency) with respect to any claim or right waived in this Agreement.

 

11.The Employee agrees
to keep this Agreement confidential and not to reveal its contents to anyone except his attorney, his immediate family or his financial
consultant, or as required by law. The Employee will be responsible for any disclosure by them. The Company agrees to keep this
Agreement confidential and not to reveal the contents to anyone except its attorneys, accountants, officers, directors and human
resources director. The foregoing will not prohibit disclosure of this Agreement as required by law or regulation, including, but
not limited to, those of the U.S. Securities And Exchange Commission and the rules of any exchange, quotation system and/or self
regulatory organization on which or with which the Company’s securities are quoted, listed and/or traded, as the case may
be; provided that if the Employee is required to make a disclosure pursuant to the foregoing he agrees to give the Company prompt
written notice thereof and cooperate with the Company’s efforts to seek a protective order.

 

    	 

    	 

    

 

12.The Employee represents
and warrants that he has returned all property belonging to the Company and has deleted from his home or personal computer, personal
e-mail accounts and electronic filings all Company information.

 

13.The parties hereto
agree and acknowledge that Sections [IF TERMINATION IS NOT IN CONNECTION WITH A CHANGE IN CONTROL - 7(d)] [IF TERMINATION IS IN
CONNECTION WITH A CHANGE IN CONTROL – 8(a)], 10, 11, 12, 16, 18, 19, 20, 21, 22, 25 and 26 of the Employment Agreement shall
remain in full force and effect and shall remain fully enforceable following the Effective Date.

 

14.The payments set
forth in Section 7 of this Agreement are subject to taxes and all applicable withholding requirements.

 

15.Except as specifically
set forth in this Agreement, this Agreement constitute the entire agreement between the Employee and the Company with respect to
the subject matter hereof and may only be modified, altered or changed in writing, signed by both the Company and the Employee.

 

16.This Agreement
has been executed freely, knowingly and voluntarily by the Employee without duress, coercion, or undue influence, with a full understanding
of its terms. The Employee acknowledges and agrees that, prior to executing this Agreement, he has been provided with sufficient
time in which to consider this Agreement and that, in deciding to execute this Agreement, he has relied on his own judgment and
further acknowledges that he is fully aware of its contents and of its legal effects. The parties to this Agreement agree that
no fact, evidence or transaction currently unknown to them but which may hereafter become known to them shall affect in any way
or manner the final or unconditional nature of this Agreement.

 

17.This Agreement
shall be interpreted and construed and enforced in accordance with the laws of the State of New York, excluding choice of law principles
thereof.

 

18.This Agreement
shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective successors, assigns and legal
representatives.

 

19.The waiver by
either party of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach.
If any provision of this Agreement, or part thereof, shall be held to be invalid or unenforceable, such invalidity or unenforceability
shall attach only to such provision and not in any way affect or render invalid or unenforceable any other provisions of this Agreement,
and this Agreement shall be carried out as if such invalid or unenforceable provision, or part thereof, had been reformed, and
any court of competent jurisdiction is authorized to so reform such invalid or unenforceable provision, so that it would be valid,
legal and enforceable to the fullest extent permitted by applicable law.

 

20.BY SIGNING
THIS AGREEMENT, THE EMPLOYEE STATES THAT: HE HAS READ IT; HE UNDERSTANDS IT AND KNOWS THAT HE IS GIVING UP IMPORTANT RIGHTS; HE
AGREES WITH EVERYTHING IN IT; HE WAS TOLD, IN WRITING, TO CONSULT AN ATTORNEY BEFORE SIGNING IT; HE HAS HAD [21] [45] DAYS TO REVIEW
THE AGREEMENT AND THINK ABOUT WHETHER OR NOT HE WANTED TO SIGN IT; AND HE HAS SIGNED IT KNOWINGLY AND VOLUNTARILY.

 

[Remainder of
page intentionally left blank.]

 

    	 

    	 

    

 

WHEREFORE, the
Employee and the Company now voluntarily and knowingly execute this Agreement as of the day and year first written above.

 

	 	P&F INDUSTRIES, INC.	 
	 	 	 
	 	By:	 	 
	 	 	Name:	 
	 	 	 	(Please print)
	 	 	 	 
	 	 	Title:	 
	 	 	 	 
	 	 	 	 
	 	 	 
	 	 	Richard A. Horowitz

 

 

 

Sworn to by Richard A. Horowitz before
me this ____ day of ______________, 201__.

 

	 	 
	Notary PublicFiled by Avantafile.com - Homeland Resources Ltd. - Exhibit 10.1

SECURITIES PURCHASE AGREEMENT

This
SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of December 23,
2014, by and between Homeland Resources Ltd., a Nevada corporation, with headquarters located at 3395 S. Jones Blvd.,
#169, Las Vegas, NV 89146 (the “Company”), and LG CAPITAL FUNDING, LLC,
a New York limited liability company, with its address at 1218 Union Street, Suite #2, Brooklyn, NY 11225 (the “Buyer”).

WHEREAS:

A.               
The Company and the Buyer are
executing and delivering this Agreement in reliance upon the exemption from
securities registration afforded by the rules and regulations as promulgated by
the United States Securities and Exchange Commission (the “SEC”) under the
Securities Act of 1933, as amended (the “1933 Act”);

 

B.                
Buyer desires to purchase
and the Company desires to issue and sell, upon the terms and conditions set
forth in this Agreement an 8% convertible note of the Company, in the forms
attached hereto as Exhibit A in the aggregate principal amount of $25,000.00
(together with any note(s) issued in replacement thereof or as a dividend
thereon or otherwise with respect thereto in accordance with the terms thereof,
the “Note”), convertible into shares of common stock, $0.001
par value per share, of the Company (the “Common Stock”), upon the terms and
subject to the limitations and conditions set forth in such Note.

C.                
The Buyer wishes to
purchase, upon the terms and conditions stated in this Agreement, such principal
amount of Note as is set forth immediately below its name on the signature
pages hereto; and

NOW THEREFORE, the Company and the Buyer severally (and not jointly)
hereby agree as follows:

1.                 
  Purchase and Sale of Note.

a.                  
  Purchase of Note.  On each Closing Date (as defined below), the
Company shall issue and sell to the Buyer and the Buyer agrees to purchase from
the Company such principal amount of Note as is set forth immediately below the
Buyer’s name on the signature pages hereto. 

b.                 
  Form of Payment.  On the Closing Date (as defined below), (i) the Buyer shall pay the purchase price for the
Note to be issued and sold to it at the Closing (as defined below) (the
“Purchase Price”) by wire transfer of immediately available funds to the
Company, in accordance with the Company’s written wiring instructions, against
delivery of the Note in the principal amount equal to the Purchase Price as is
set forth immediately below the Buyer’s name on the signature pages hereto, and(ii) the Company shall deliver such duly
executed Note on behalf of the Company, to the Buyer, against delivery of such
Purchase Price. 

“DS”

Company Initials

 c.                  
  Closing Date.  The date and time of the first issuance and
sale of the Note pursuant to this Agreement (the “Closing Date”) shall be on or
about December 23, 2014,
or such other mutually agreed upon time.  The closing of the transactions
contemplated by this Agreement (the “Closing”) shall occur on the Closing Date
at such location as may be agreed to by the parties. 

2.                 
  Buyer’s Representations
and Warranties.  The Buyer
represents and warrants to the Company that: 

a.                  
  Investment Purpose.  As of the date hereof, the Buyer is
purchasing the Note and the shares of Common Stock issuable upon conversion of
or otherwise pursuant to the Note, such shares of Common Stock being
collectively referred to herein as the “Conversion Shares” and, collectively
with the Note, the “Securities”) for its own account and not with a present
view towards the public sale or distribution thereof, except pursuant to sales
registered or exempted from registration under the 1933 Act; provided, however,
that by making the representations herein, the Buyer does not agree to hold any
of the Securities for any minimum or other specific term and reserves the right
to dispose of the Securities at any time in accordance with or pursuant to a
registration statement or an exemption under the 1933 Act.

b.                 
  Accredited Investor
Status.  The Buyer is an
“accredited investor” as that term is defined in Rule 501(a) of Regulation D
(an “Accredited Investor”). 

c.                  
  Reliance on Exemptions.  The Buyer understands that the Securities are
being offered and sold to it in reliance upon specific exemptions from the
registration requirements of United States federal and state securities laws
and that the Company is relying upon the truth and accuracy of, and the Buyer’s
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of the Buyer set forth herein in order to determine the
availability of such exemptions and the eligibility of the Buyer to acquire the
Securities. 

d.                 
  Information.  The Buyer and its advisors, if any, have
been, and for so long as the Note remain outstanding will continue to be,
furnished with all materials relating to the business, finances and operations
of the Company and materials relating to the offer and sale of the Securities
which have been requested by the Buyer or its advisors.  The Buyer and its
advisors, if any, have been, and for so long as the Note remain outstanding
will continue to be, afforded the opportunity to ask questions of the Company. 
Notwithstanding the foregoing, the Company has not disclosed to the Buyer any
material nonpublic information and will not disclose such information unless
such information is disclosed to the public prior to or promptly following such
disclosure to the Buyer.  Neither such inquiries nor any other due diligence
investigation conducted by Buyer or any of its advisors or representatives
shall modify, amend or affect Buyer’s right to rely on the Company’s
representations and warranties contained in Section 3 below.  The Buyer
understands that its investment in the Securities involves a significant degree
of risk. The Buyer is not aware of any facts that may constitute a breach of
any of the Company's representations and warranties made herein. 

	
“DS”

Company Initials	2	 

 
e.                  
  Governmental Review.  The Buyer understands that no United States federal or state agency or any other government or governmental agency has
passed upon or made any recommendation or endorsement of the Securities. 

f.                  
  Transfer or Re-sale.  The Buyer understands that (i) the sale or re-sale of the Securities has not
been and is not being registered under the 1933 Act or any applicable state
securities laws, and the Securities may not be transferred unless (a) the Securities are sold pursuant to an
effective registration statement under the 1933 Act, (b) the Buyer shall have delivered to the
Company, at the cost of the Buyer, an opinion of counsel that shall be in form,
substance and scope customary for opinions of counsel in comparable
transactions to the effect that the Securities to be sold or transferred may be
sold or transferred pursuant to an exemption from such registration, which
opinion shall be accepted by the Company, (c) the Securities are sold or transferred to
an “affiliate” (as defined in Rule 144 promulgated under the 1933 Act (or a
successor rule) (“Rule 144”) of the Buyer who agrees to sell or otherwise
transfer the Securities only in accordance with this Section 2(f) and who is an
Accredited Investor, (d) the Securities are sold pursuant to Rule
144, or (e) the Securities are sold pursuant to
Regulation S under the 1933 Act (or a successor rule) (“Regulation S”), and the Buyer shall have delivered to the Company, at
the cost of the Buyer, an opinion of counsel that shall be in form, substance
and scope customary for opinions of counsel in corporate transactions, which
opinion shall be accepted by the Company; (ii) any sale of such Securities made
in reliance on Rule 144 may be made only in accordance with the terms of said
Rule and further, if said Rule is not applicable, any re-sale of such
Securities under circumstances in which the seller (or the person through whom
the sale is made) may be deemed to be an underwriter (as that term is defined
in the 1933 Act) may require compliance with some other exemption under the
1933 Act or the rules and regulations of the SEC thereunder; and (iii) neither
the Company nor any other person is under any obligation to register such
Securities under the 1933 Act or any state securities laws or to comply with
the terms and conditions of any exemption thereunder (in each case). 
Notwithstanding the foregoing or anything else contained herein to the
contrary, the Securities may be pledged as collateral in connection with a bona
fide margin account or other lending arrangement. 

g.                 
  Legends.  The Buyer understands that the Note and,
until such time as the Conversion Shares have been registered under the 1933
Act may be sold pursuant to Rule 144 or Regulation S without any restriction as
to the number of securities as of a particular date that can then be
immediately sold, the Conversion Shares may bear a restrictive legend in
substantially the following form (and a stop-transfer order may be placed
against transfer of the certificates for such Securities): 

  
    “NEITHER
      THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE
      SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
      LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR
      ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION 

  

	
“DS”

      Company Initials	3	 

 

  
    STATEMENT FOR THE
      SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF
      COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY
      ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II)
      UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.  NOTWITHSTANDING
      THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE
      MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
      SECURITIES.”

  

The legend set forth above shall be removed and
the Company shall issue a certificate without such legend to the holder of any
Security upon which it is stamped, if, unless otherwise required by applicable
state securities laws, (a) such Security is registered for sale under an
effective registration statement filed under the 1933 Act or otherwise may be
sold pursuant to Rule 144 or Regulation S without any restriction as to the
number of securities as of a particular date that can then be immediately sold,
or (b) such holder provides the Company with an opinion of counsel, in form,
substance and scope customary for opinions of counsel in comparable
transactions, to the effect that a public sale or transfer of such Security may
be made without registration under the 1933 Act, which opinion shall be
accepted by the Company so that the sale or transfer is effected.  The Buyer
agrees to sell all Securities, including those represented by a certificate(s)
from which the legend has been removed, in compliance with applicable
prospectus delivery requirements, if any. In the event that the Company does
not accept the opinion of counsel provided by the Buyer with respect to the
transfer of Securities pursuant to an exemption from registration, such as Rule
144 or Regulation S, within 2
business days, it will be considered an Event of Default under
the Note.

h.                 
  Authorization; Enforcement. This Agreement has been duly and validly
authorized.  This Agreement has been duly executed and delivered on behalf of
the Buyer, and this Agreement constitutes a valid and binding agreement of the
Buyer enforceable in accordance with its terms. 

i.                   
  Residency.  The Buyer is a resident of the jurisdiction
set forth immediately below the Buyer’s name on the signature pages hereto. 

3.                 
  Representations and
Warranties of the Company.  The
Company represents and warrants to the Buyer that: 

a.                  
  Organization and
Qualification.  The Company and
each of its subsidiaries, if any, is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is
incorporated, with full power and authority (corporate and other) to own,
lease, use and operate its properties and to carry on its business as and where
now owned, leased, used, operated and conducted. 

	
“DS”

      Company Initials	4	 

 
b.                 
  Authorization;
Enforcement.  (i) The Company
has all requisite corporate power and authority to enter into and perform this
Agreement, the Note and to consummate the transactions contemplated hereby and
thereby and to issue the Securities, in accordance with the terms hereof and
thereof, (ii) the execution and delivery of this Agreement, the Note by the
Company and the consummation by it of the transactions contemplated hereby and
thereby (including without limitation, the issuance of the Note and the
issuance and reservation for issuance of the Conversion Shares issuable upon
conversion or exercise thereof) have been duly authorized by the Company’s
Board of Directors and no further consent or authorization of the Company, its
Board of Directors, or its shareholders is required, (iii) this Agreement has
been duly executed and delivered by the Company by its authorized representative,
and such authorized representative is the true and official representative with
authority to sign this Agreement and the other documents executed in connection
herewith and bind the Company accordingly, and (iv) this Agreement constitutes,
and upon execution and delivery by the Company of the Note, each of such
instruments will constitute, a legal, valid and binding obligation of the
Company enforceable against the Company in accordance with its terms. 

c.                  
  Issuance of Shares.  The Conversion Shares are duly authorized and
reserved for issuance and, upon conversion of the Note in accordance with its
respective terms, will be validly issued, fully paid and non-assessable, and
free from all taxes, liens, claims and encumbrances with respect to the issue
thereof and shall not be subject to preemptive rights or other similar rights
of shareholders of the Company and will not impose personal liability upon the
holder thereof. 

d.                 
  Acknowledgment of
Dilution.  The Company
understands and acknowledges the potentially dilutive effect to the Common
Stock upon the issuance of the Conversion Shares upon conversion of the Note. 
The Company further acknowledges that its obligation to issue Conversion Shares
upon conversion of the Note in accordance with this Agreement, the Note is
absolute and unconditional regardless of the dilutive effect that such issuance
may have on the ownership interests of other shareholders of the Company. 

e.                  
  No Conflicts.  The execution, delivery and performance of
this Agreement, the Note by the Company and the consummation by the Company of
the transactions contemplated hereby and thereby (including, without
limitation, the issuance and reservation for issuance of the Conversion Shares)
will not (i) conflict with or result in a violation of any provision of the Certificate
of Incorporation or By-laws, or (ii) violate or conflict with, or result in a
breach of any provision of, or constitute a default (or an event which with
notice or lapse of time or both could become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of,
any agreement, indenture, patent, patent license or instrument to which the
Company or any of its subsidiaries is a party, or (iii)  result in a violation
of any law, rule, regulation, order, judgment or decree (including federal and
state securities laws and regulations and regulations of any self-regulatory
organizations to which the Company or its securities are subject) applicable to
the Company or any of its subsidiaries or by which any property or asset of the
Company or any of its subsidiaries is bound or affected (except for such
conflicts, defaults, terminations, amendments, accelerations, cancellations and
violations as would not, individually or in the aggregate, have a material
adverse effect).  All consents, authorizations, orders, filings and
registrations which the Company is required to obtain pursuant to the preceding
sentence have been obtained or effected on or prior to the date hereof.  The
Company is not in violation of the listing requirements of the OTC Pink marketplace
(the “OTC Pink”) and does not reasonably anticipate that the Common Stock will
be delisted by the OTC Pink in the foreseeable future, nor are the Company’s
securities “chilled” by DTC.  The Company and its subsidiaries are unaware of
any facts or circumstances which might give rise to any of the foregoing. 

	
“DS”

      Company Initials	5	 

 
f.                  
  Absence of Litigation.  Except as disclosed in the Company’s public
filings, there is no action, suit, claim, proceeding, inquiry or investigation
before or by any court, public board, government agency, self-regulatory
organization or body pending or, to the knowledge of the Company or any of its subsidiaries,
threatened against or affecting the Company or any of its subsidiaries, or
their officers or directors in their capacity as such, that could have a material
adverse effect.  Schedule 3(f) contains a complete list and summary description
of any pending or, to the knowledge of the Company, threatened proceeding
against or affecting the Company or any of its subsidiaries, without regard to
whether it would have a material adverse effect.  The Company and its subsidiaries
are unaware of any facts or circumstances which might give rise to any of the
foregoing. 

g.                 
  Acknowledgment Regarding Buyer’
  Purchase of Securities.  The
Company acknowledges and agrees that the Buyer is acting solely in the capacity
of arm’s length purchasers with respect to this Agreement and the transactions
contemplated hereby.  The Company further acknowledges that the Buyer is not acting
as a financial advisor or fiduciary of the Company (or in any similar capacity)
with respect to this Agreement and the transactions contemplated hereby and any
statement made by the Buyer or any of its respective representatives or agents
in connection with this Agreement and the transactions contemplated hereby is
not advice or a recommendation and is merely incidental to the Buyer’ purchase
of the Securities.  The Company further represents to the Buyer that the
Company’s decision to enter into this Agreement has been based solely on the
independent evaluation of the Company and its representatives. 

h.                 
  No Integrated Offering.  Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has directly or
indirectly made any offers or sales in any security or solicited any offers to
buy any security under circumstances that would require registration under the
1933 Act of the issuance of the Securities to the Buyer.  The issuance of the
Securities to the Buyer will not be integrated with any other issuance of the
Company’s securities (past, current or future) for purposes of any shareholder
approval provisions applicable to the Company or its securities. 

i.                   
  Title to Property.  The Company and its subsidiaries have good
and marketable title in fee simple to all real property and good and marketable
title to all personal property owned by them which is material to the business
of the Company and its subsidiaries, in each case free and clear of all liens,
encumbrances and defects except such as are described in Schedule 3(i) or such
as would not have a material adverse effect.  Any real property and facilities
held under lease by the Company and its subsidiaries are held by them under
valid, subsisting and enforceable leases with such exceptions as would not have
a material adverse effect. 

	
“DS”

    Company Initials	6	 

 
j.                   
  Bad Actor.  No officer or director of the Company would
be disqualified under Rule 506(d) of the Securities Act as amended on the basis
of being a "bad actor" as that term is established in the
September 19, 2013 Small Entity Compliance Guide published by the Securities
and Exchange Commission. 

k.                 
  Breach of Representations
and Warranties by the Company.  If the Company breaches any of the
representations or warranties set forth in this Section 3, and in addition to
any other remedies available to the Buyer pursuant to this Agreement, it will
be considered an Event of default under the Note. 

4.                 
  COVENANTS.

a.                  
  Expenses.  At the Closing, the Company shall reimburse Buyer
for expenses incurred by them in connection with the negotiation, preparation,
execution, delivery and performance of this Agreement and the other agreements
to be executed in connection herewith (“Documents”),
including, without limitation, reasonable attorneys’ and consultants’ fees and
expenses, transfer agent fees, fees for stock quotation services, fees relating
to any amendments or modifications of the Documents or any consents or waivers
of provisions in the Documents, fees for the preparation of opinions of
counsel, escrow fees, and costs of restructuring the transactions contemplated
by the Documents.  When possible, the Company must pay these fees directly,
otherwise the Company must make immediate payment for reimbursement to the Buyer
for all fees and expenses immediately upon written notice by the Buyer or the
submission of an invoice by the Buyer. The Company’s obligation with respect to
this transaction is to reimburse Buyer’s expenses shall be $1,500 in legal fees
which shall be deduced from the Note when funded. 

b.                 
  Listing.  The Company shall promptly secure the listing
of the Conversion Shares upon each national securities exchange or automated
quotation system, if any, upon which shares of Common Stock are then listed
(subject to official notice of issuance) and, so long as the Buyer owns any of
the Securities, shall maintain, so long as any other shares of Common Stock
shall be so listed, such listing of all Conversion Shares from time to time
issuable upon conversion of the Note.  The Company will obtain and, so long as the
Buyer owns any of the Securities, maintain the listing and trading of its
Common Stock on the OTC Pink or any equivalent replacement market, the Nasdaq stock
market (“Nasdaq”), the New York Stock Exchange (“NYSE”), or the American Stock
Exchange (“AMEX”) and will comply in all respects with the Company’s reporting,
filing and other obligations under the bylaws or rules of the Financial
Industry Regulatory Authority (“FINRA”) and such exchanges, as applicable.  The
Company shall promptly provide to the Buyer copies of any notices it receives
from OTC Markets and any other markets on which the Common Stock is then listed
regarding the continued eligibility of the Common Stock for listing on such markets. 

	
“DS”

      Company Initials	7	 

 
c.                  
  Corporate Existence.  So long as the Buyer beneficially owns any Note,
the Company shall maintain its corporate existence and shall not sell all or
substantially all of the Company’s assets, except in the event of a merger or
consolidation or sale of all or substantially all of the Company’s assets,
where the surviving or successor entity in such transaction (i) assumes the
Company’s obligations hereunder and under the agreements and instruments
entered into in connection herewith and (ii) is a publicly traded corporation
whose Common Stock is listed for trading on the OTCQB, Nasdaq, NYSE or AMEX. 

d.                 
  No Integration.  The Company shall not make any offers or
sales of any security (other than the Securities) under circumstances that
would require registration of the Securities being offered or sold hereunder
under the 1933 Act or cause the offering of the Securities to be integrated
with any other offering of securities by the Company for the purpose of any
stockholder approval provision applicable to the Company or its securities. 

e.                  
  Breach of Covenants. 
  If the Company breaches any of the covenants set forth in this Section 4, and
in addition to any other remedies available to the Buyer pursuant to this
Agreement, it will be considered an event of default under the Note.

5.                 
  Governing Law;
Miscellaneous. 

a.                  
  Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard
to principles of conflicts of laws.  Any action brought by either party against
the other concerning the transactions contemplated by this Agreement shall be
brought only in the state courts of New York or in the federal courts located
in the state and county of New York.  The parties to this Agreement hereby
irrevocably waive any objection to jurisdiction and venue of any action
instituted hereunder and shall not assert any defense based on lack of
jurisdiction or venue or based upon forum non conveniens.  The Company
and Buyer waive trial by jury.  The prevailing party shall be entitled to
recover from the other party its reasonable attorney's fees and costs.  In the
event that any provision of this Agreement or any other agreement delivered in
connection herewith is invalid or unenforceable under any applicable statute or
rule of law, then such provision shall be deemed inoperative to the extent that
it may conflict therewith and shall be deemed modified to conform with such
statute or rule of law.  Any such provision which may prove invalid or
unenforceable under any law shall not affect the validity or enforceability of
any other provision of any agreement.   Each party hereby irrevocably waives
personal service of process and consents to process being served in any suit,
action or proceeding in connection with this Agreement or any other Transaction
Document by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in
effect for notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and notice thereof. 
Nothing contained herein shall be deemed to limit in any way any right to serve
process in any other manner permitted by law. 

b.                 
  Counterparts; Signatures
by Facsimile.  This Agreement
may be executed in one or more counterparts, each of which shall be deemed an
original but all of which shall constitute one and the same agreement and shall
become effective when counterparts have been signed by each party and delivered
to the other party.  This Agreement, once executed by a party, may be delivered
to the other party hereto by facsimile transmission of a copy of this Agreement
bearing the signature of the party so delivering this Agreement. 

	
“DS”

      Company Initials	8	 

 
c.                  
  Headings.  The headings of this Agreement are for
convenience of reference only and shall not form part of, or affect the
interpretation of, this Agreement. 

d.                 
  Severability.  In the event that any provision of this
Agreement is invalid or unenforceable under any applicable statute or rule of
law, then such provision shall be deemed inoperative to the extent that it may
conflict therewith and shall be deemed modified to conform with such statute or
rule of law.  Any provision hereof which may prove invalid or unenforceable
under any law shall not affect the validity or enforceability of any other
provision hereof. 

e.                  
  Entire Agreement;
Amendments.  This Agreement and
the instruments referenced herein contain the entire understanding of the
parties with respect to the matters covered herein and therein and, except as
specifically set forth herein or therein, neither the Company nor the Buyer
makes any representation, warranty, covenant or undertaking with respect to
such matters.  No provision of this Agreement may be waived or amended other
than by an instrument in writing signed by the majority in interest of the Buyer. 

f.                  
  Notices.  All
notices, demands, requests, consents, approvals, and other communications
required or permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be (i) personally served, (ii) deposited in the mail,
registered or certified, return receipt requested, postage prepaid, (iii)
delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as such party shall have specified most recently
by written notice.  Any notice or other communication required or permitted to
be given hereunder shall be deemed effective (a) upon hand delivery or delivery
by facsimile, with accurate confirmation generated by the transmitting
facsimile machine, at the address or number designated below (if delivered on a
business day during normal business hours where such notice is to be received),
or the first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received)
or (b) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur.  The addresses for such
communications shall be: 

If to the Company, to: 

	 	Homeland Resources Ltd.
3395 S. Jones Blvd., #169
Las Vegas, NV 89146
Attn: David St. James, Treasurer and Secretary

If to the Buyer:

	 	LG CAPITAL FUNDING, LLC
1218 Union Street, Suite #2
Brooklyn, NY 11225
Attn: Joseph Lerman, Manager

	
“DS”

      Company Initials	9	 

 Each party shall provide notice to the other
party of any change in address.

g.                 
  Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and assigns.  Neither
the Company nor the Buyer shall assign this Agreement or any rights or
obligations hereunder without the prior written consent of the other. 
Notwithstanding the foregoing, the Buyer may assign its rights hereunder to any
person that purchases Securities in a private transaction from the Buyer or to
any of its “affiliates,” as that term is defined under the 1934 Act, without
the consent of the Company. 

h.                 
  Third Party Beneficiaries.  This Agreement is intended for the benefit of
the parties hereto and their respective permitted successors and assigns, and
is not for the benefit of, nor may any provision hereof be enforced by, any
other person. 

i.                   
  Survival.  The representations and warranties of the
Company and the agreements and covenants set forth in this Agreement shall
survive the closing hereunder notwithstanding any due diligence investigation
conducted by or on behalf of the Buyer.  The Company agrees to indemnify and
hold harmless the Buyer and all their officers, directors, employees and agents
for loss or damage arising as a result of or related to any breach or alleged
breach by the Company of any of its representations, warranties and covenants
set forth in this Agreement or any of its covenants and obligations under this
Agreement, including advancement of expenses as they are incurred. 

j.                   
  Further Assurances.  Each party shall do and perform, or cause to
be done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby. 

k.                 
  No Strict Construction.  The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party. 

Remedies.  The Company acknowledges that a breach by it
of its obligations hereunder will cause irreparable harm to the Buyer by
vitiating the intent and purpose of the transaction contemplated hereby. 
Accordingly, the Company acknowledges that the remedy at law for a breach of
its obligations under this Agreement will be inadequate and agrees, in the
event of a breach or threatened breach by the Company of the provisions of this
Agreement, that the Buyer shall be entitled, in addition to all other available
remedies at law or in equity, and in addition to the penalties assessable
herein, to an injunction or injunctions restraining, preventing or curing any
breach of this Agreement and to enforce specifically the terms and provisions
hereof, without the necessity of showing economic loss and without any bond or
other security being required. 

	
“DS”

      Company Initials	10	 

 
IN WITNESS WHEREOF, the
undersigned Buyer and the Company have caused this Agreement to be duly
executed as of the date first above written.

Homeland Resources Ltd.

	By:	/s/ David St. James
	 	________________________________
	 	David
St. James
	 	Treasurer
and Secretary

LG CAPITAL FUNDING,
LLC.

	By:  	/s/ Joseph Lerman
	 	________________________________
	Name:	Joseph Lerman 
	Title:	Manager

 

 

AGGREGATE SUBSCRIPTION AMOUNT:

	Aggregate Principal
Amount of Note:         	$25,000.00

Aggregate Purchase Price:                                                                              

Note 1: $25,000.00 less $1,500.00 in legal fees

	
“DS”

      Company Initials	11	 

 

EXHIBIT A
144 NOTE - $25,000

	
“DS”

      Company Initials	12

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