Document:

Exhibit 10.1

 

PURCHASE
AGREEMENT

 

This PURCHASE AGREEMENT (this "Agreement")
is made and entered into as of October 14, 2014 by and between P&F Industries Inc., a Delaware corporation (the "Company"),
and Timothy J. Stabosz, an individual (the "Seller").

 

WHEREAS, Seller directly owns shares
of the issued and outstanding common stock, par value $1.00 per share, of the Company ("Company Shares"); and

 

WHEREAS,
Seller desires to sell, and the Company desires to purchase, free and clear of any and all Liens (as defined herein) 208,325 Company
Shares.

 

NOW, THEREFORE,
in consideration of the foregoing premises and the covenants, agreements and representations and warranties contained herein, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE
I

 

PURCHASE AND SALE; ClOSINGS

 

Section 1.1     Purchase
and Sale. Upon the terms and subject to the conditions of this Agreement, Seller agrees to sell, convey, assign, transfer and
deliver to the Company, and the Company agrees to purchase from Seller, 208,325 Company Shares (the "Purchased Shares"),
free and clear of any and all mortgages, pledges, encumbrances, liens, security interests, options, charges, claims, deeds of trust,
deeds to secure debt, title retention agreements, rights of first refusal or offer, limitations on voting rights, proxies, voting
agreements, limitations on transfer or other agreements or claims of any kind or nature whatsoever (collectively, "Liens").

 

Section 1.2     Purchase
Price. Upon the terms and subject to the conditions of this Agreement, in consideration of the aforesaid sale, conveyance,
assignment, transfer and delivery to the Company of the Purchased Shares, the Company shall pay to Seller a price per Purchased
Share of $7.60 for an aggregate price of $1,583,270 (the "Purchase Price").

 

Section 1.3     Expenses.
Except as expressly set forth in this Agreement, all fees and expenses incurred by a party hereto in connection with the matters
contemplated by this Agreement shall be borne by the party incurring such fee or expense, including without limitation the fees
and expenses of any investment banks, attorneys, accountants or other experts or advisors retained by such party.

 

Section 1.4     Closing;
Conditions.

 

(a)     The consummation
of the transactions contemplated by this Agreement (the "Closing") shall take place at the offices of the Company as
promptly as practical after satisfaction of the conditions hereto, or at such other place, date or time as the parties may agree
in writing (the "Closing Date")

 

    	 

    	 

    

 

(b)     The Company's
obligations to consummate the transactions contemplated by this Agreement shall be conditioned on (i) no condition existing on
the Closing Date which would prevent the Company from drawing funds under the Loan and Security Agreement, dated as of October
25, 2010, among the Company, certain of the Company’s subsidiaries, Capital One Leverage Finance Corporation, as agent, and
the financial institutions party thereto, as amended or otherwise modified through the date hereof, (ii) no injunction or other
order, judgment, law, regulation, decree or ruling or other legal restraint or prohibition having been issued, enacted or promulgated
by a court or other governmental authority of competent jurisdiction that would have the effect of prohibiting or preventing the
consummation of the transactions contemplated hereunder, and (iii) approval of this Agreement and the transactions contemplated
thereby by Board of Directors of the Company.

 

Section 1.5     Deliveries.

 

(a)     At the
Closing, in accordance with Section 1.2, the Company shall deliver or cause to be delivered to Seller the Purchase Price by wire
transfer of immediately available funds to such account as Seller has specified in writing prior to the Closing Date; and

 

(b)     Prior to
the Closing, Seller shall deliver or cause to be delivered to the Company all of the 208,325 Purchased Shares by transfer via the
Depository Trust Company Deposit Withdrawal Agent Commission System ("DWAC") in accordance with the instructions included
on the signature page hereto, such delivery to be confirmed as “settled” and not subject to reversal or cancellation
at or prior to the Closing.

 

ARTICLE
II

 

COVENANTS

 

Section 2.1     Standstill.

 

(a)     During the
period beginning on the date hereof and ending on the date that is the third anniversary hereof (the "Standstill Period"),
except as specifically permitted by the terms of this Agreement, Seller shall not, and shall cause his Affiliates (as defined in
Section 5.3) not to, acquire, offer or propose to acquire, or agree to acquire, directly or indirectly, by purchase or otherwise,
any (i) Voting Securities (as defined in Section 5.3), or (ii) direct or indirect rights or options to acquire (through purchase,
exchange, conversion or otherwise) any Voting Securities.

 

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(b)     During the
Standstill Period, except upon the express prior written invitation of the Company, Seller shall not, and shall cause his Affiliates
not to, directly or indirectly, singly or as part of a partnership, limited partnership, syndicate or other group (as those terms
are used within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
which meanings shall apply for all purposes of this Agreement): (i) make, or in any way participate in, any "solicitation"
of "proxies" (as such terms are defined or used in Regulation 14A under the Exchange Act) or exempt solicitation under
Rule 14a-2(b)(1) or otherwise with respect to any Voting Securities (including by the execution of actions by written consent),
become a "participant" or a "participant in a solicitation" (as such terms are defined or used in Regulation
14A under the Exchange Act) with respect to the Company or otherwise communicate with any stockholder of the Company pursuant to
Rule 14a-1(l)(2)(iv) under the Exchange Act; (ii) initiate, propose or otherwise solicit, or participate in the solicitation of,
stockholders for the approval of one or more stockholder proposals with respect to the Company, including any proposal made pursuant
to Rule 14a-8 under the Exchange Act, or encourage or induce any other individual or entity to initiate any stockholder proposal
relating to the Company, or make any demand or request for any list of the holders of Voting Securities; (iii) form, encourage
the formation, join or in any way participate in a "group" which owns or seeks or offers to acquire beneficial ownership
of Voting Securities or rights to acquire such securities or which seeks or offers to acquire control of the Company or influence
its policies; (iv) solicit, seek or offer to effect, negotiate with or provide any information to any party with respect to, make
any statement or proposal, whether written or oral, either alone or in concert with others, to the board of directors of the Company,
to any director or officer of the Company or to any other stockholder of the Company with respect to, or otherwise formulate any
plan or proposal or make any public announcement, proposal, offer or filing under the Exchange Act, any similar or successor statute
or otherwise, or take action to cause the Company to make any such filing, with respect to: (A) any form of business combination,
restructuring, recapitalization, dissolution or similar transaction involving the Company or any Affiliate thereof, including,
without limitation, a merger, tender or exchange offer, share repurchase or liquidation of the Company's assets, (B) any acquisition
or disposition of assets material to the Company, (C) any request to amend, waive or terminate the provisions of this Agreement
or (D) any proposal or other statement inconsistent with the terms of this Agreement; (v) otherwise act, alone or in concert with
others (including by providing financing for another party), to seek or offer to acquire control of the Company or influence, in
any manner, its management, board of directors or policies; or (vi) assist or encourage any third party, whether or not a "group"
with such third party, to take any of the actions enumerated in this Section 2.1(b).

 

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Section 2.2     Non-disparagement.

 

(a)     The Company
(on its own behalf and on behalf of its directors, officers, subsidiaries and Affiliates and each of their respective successors
and assigns (collectively, the "Company Parties")) agrees that, during the Standstill Period, it shall not (whether
directly or indirectly, individually or in concert with others, publicly or privately, orally or in writing) engage in any conduct
or make, or cause to be made, any statement, observation or opinion, or communicate any information that is calculated to or is
reasonably likely to have the effect of (i) undermining, impugning, disparaging, injuring the reputation of or otherwise in any
way reflecting adversely or detrimentally upon any of the Seller or his Affiliates, successors or assigns (collectively, the "Seller
Parties") or (ii) accusing or implying that any Seller Party engaged in any wrongful, unlawful or improper conduct. The
foregoing shall not apply to any compelled testimony, either by legal process, subpoena or otherwise or to any response to any
request for information from any governmental authority having jurisdiction over the Company; provided, however,
that in the event that any Company Party is requested pursuant to, or required by, applicable law, regulation or legal process
to testify or otherwise respond to a request for information from any governmental authority, the Company shall notify Seller promptly
so that the Seller may seek a protective order or other appropriate remedy. In the event that no such protective order or other
remedy is obtained, or any Seller waives compliance with the terms of this Section 2.2(a), such Company Party shall furnish only
such information which it has been advised by counsel is legally required and will exercise reasonable efforts to obtain reliable
assurance that such information will be accorded confidential treatment. The preceding sentences of this Section 2.2(a) shall not
preclude the Company from responding publicly or otherwise to any comments made by Seller to any news media or to any statements
of assertions by any news media based on prior statements, assertions or filings made by Seller.

 

(b)     The Seller
agrees that, during the Standstill Period, he shall not (whether directly or indirectly, individually or in concert with others,
publicly or privately, orally or in writing) engage in any conduct or make, or cause to be made, any statement, observation or
opinion, or communicate any information, including, without limitation, to any member of the press, analyst, governmental or regulatory
agency, that is calculated to or is reasonably likely to have the effect of (i) undermining, impugning, disparaging, injuring the
reputation of or otherwise in any way reflecting adversely or detrimentally upon any Company Party or (ii) accusing or implying
that any Company Party engaged in any wrongful, unlawful or improper conduct; provided, however, that in the event
that Seller is requested pursuant to, or required by, applicable law, regulation or legal process to testify or otherwise respond
to a request from any governmental authority, Seller shall notify the Company promptly so that the Company may seek a protective
order or other appropriate remedy. In the event that no such protective order or other remedy is obtained, or any Company Party
waives compliance with the terms of this Section 2.2(b), the Seller shall furnish only such information which it is advised by
counsel is legally required and will exercise reasonable efforts to obtain reliable assurance that such information will be accorded
confidential treatment.

 

Section 2.3     Public
Announcement; Public Filings.

 

(a)     Upon execution
of this Agreement, the Company shall issue a press release (in substantially the form attached hereto as Exhibit A). Without
limitation of the Company’s rights under the last sentence of Section 2.2(a) hereof, no party hereto nor any of its respective
Affiliates shall issue any press release or make any public statement relating to the transactions contemplated hereby (including,
without limitation, any statement to any governmental or regulatory agency or accrediting body) that is inconsistent with, or are
otherwise contrary to, the statements in the press release.

 

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(b)     Promptly
following the date hereof, Seller will cause to be filed with the Securities and Exchange Commission an amendment to its Schedule
13D relating to the Company Shares and prior to filing will provide the Company and its counsel a reasonably opportunity to review
and comment upon such amendment.

 

Section 2.4     Confidentiality.
Seller shall not disclose and shall maintain the confidentiality of (and shall cause his Affiliates and employees to not disclose
and to maintain the confidentiality of) any non-public information which relates to the business, legal or financial affairs of
the Company (the "Confidential Information"). Seller shall use at least the same degree of care to safeguard and
to prevent the disclosure, publication or dissemination of the Confidential Information as they respectively employ to avoid unauthorized
disclosure, publication or dissemination of their own information of a similar nature, but in no case less than reasonable care.
In the event that Seller (or any Affiliate or employee) is requested or required (by oral question, interrogatory, request for
information or documents, subpoena, civil investigative demand or similar process) to disclose any Confidential Information, Seller
shall (a) notify the Company promptly so that the Company may seek a protective order or other appropriate remedy and (b) cooperate
with the Company in any effort the Company undertakes to obtain a protective order or other remedy. In the event that no such protective
order or other remedy is obtained, the applicable party shall disclose to the person compelling disclosure only that portion of
the Confidential Information which such party is advised by counsel is legally required and shall exercise reasonable efforts to
obtain reliable assurance that confidential treatment is accorded the Confidential Information so disclosed.

 

ARTICLE
III

 

REPRESENTATIONS AND WARRANTIES OF Seller

 

Seller hereby makes the following representations
and warranties to the Company:

 

Section 3.1     Existence;
Authority. Seller has all requisite competence, power and authority to execute and deliver this Agreement, to perform his obligations
hereunder and thereunder and to consummate the transactions contemplated hereby.

 

Section 3.2     Enforceability.
This Agreement has been duly and validly executed and delivered by Seller and, assuming due and valid authorization, execution
and delivery by the Company, this Agreement constitutes a legal, valid and binding obligation of the Seller enforceable against
him in accordance with its terms, except as such enforceability may be affected by bankruptcy, insolvency, moratorium and other
similar laws relating to or affecting creditors' rights generally and general equitable principles.

 

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Section 3.3     Ownership.
Seller is the sole record and beneficial owner of the Purchased Shares, free and clear of any and all Liens. Seller has full power
and authority to transfer full legal ownership of its respective Purchased Shares to the Company, and Seller is not required to
obtain the approval of any person or governmental agency or organization to effect the sale of the Purchased Shares. The entire
direct or indirect beneficial ownership of Seller or any of his Affiliates in the Company is 208,325 Company Shares.

 

Section 3.4     Good
Title Conveyed. Any stock certificates and stock powers executed and delivered by Seller at the Closing will be valid and binding
obligations of Seller, enforceable in accordance with their respective terms, and, together with the delivery of Purchased Shares
through DWAC, will effectively vest in the Company good, valid and marketable title to all Purchased Shares, free and clear of
any and all Liens.

 

Section 3.5     Absence
of Litigation. There is no suit, action, investigation or proceeding pending or, to the knowledge of Seller threatened against
such party that could impair the ability of Seller to perform its obligations hereunder or to consummate the transactions contemplated
hereby.

 

Section 3.6     Other
Acknowledgments.

 

(a)     Seller hereby
represents and acknowledges that he is a sophisticated investor and he knows the Company may have material Confidential Information
concerning the Company and its condition (financial and otherwise), results of operations, businesses, properties, plans and prospects
and that such information could be material to Seller's' decision to sell the Purchased Shares or otherwise materially adverse
to Seller's interests. Seller acknowledges and agrees that the Company shall have no obligation to disclose to it or him any such
information and hereby waives and releases, to the fullest extent permitted by law, any and all claims and causes of action it
has or may have against the Company and their respective Affiliates, officers, directors, employees, agents and representatives
based upon, relating to or arising out of nondisclosure of such information or the sale of the Purchased Shares hereunder.

 

(b)     Seller further
represents that it or he has adequate information concerning the business and financial condition of the Company to make an informed
decision regarding the sale of the Purchased Shares and has, independently and without reliance upon the Company, made his own
analysis and decision to sell the Purchased Shares. With respect to legal, tax, accounting, financial and other considerations
involved in the transactions contemplated by this Agreement, including the sale of the Purchased Shares, Seller is not relying
on the Company (or any agent or representative thereof). Seller carefully considered and, to the extent he believes such discussion
necessary, discussed with professional legal, tax, accounting, financial and other advisors the suitability of the transactions
contemplated by this Agreement, including the sale of the Purchased Shares. Seller acknowledges that the Company or any of their
respective directors, officers, subsidiaries or Affiliates has not made or makes any representations or warranties, whether express
or implied, of any kind except as expressly set forth in this Agreement.

 

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(c)     Seller is
an "accredited investor" as defined in Rule 501 promulgated under the Securities Act. The sale of the Purchased Shares
by Seller (i) was privately negotiated in an independent transaction and (ii) does not violate any rules or regulations applicable
to Seller.

 

ARTICLE
IV

 

REPRESENTATIONS AND WARRANTIES OF 

THE
COMPANY

 

The Company makes the following representations
and warranties to Seller:

 

Section 4.1     Existence;
Authority. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of
Delaware. The Company has all requisite corporate power and authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby and has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement.

 

Section 4.2     Enforceability.
This Agreement has been duly and validly executed and delivered by the Company and, assuming due and valid authorization, execution
and delivery by Seller, this Agreement constitutes a legal, valid and binding obligation of the Company, enforceable against it
in accordance with its terms, except as such enforceability may be affected by bankruptcy, insolvency, moratorium and other similar
laws relating to or affecting creditors' rights generally and general equitable principles.

 

Section 4.3     Absence
of Litigation. There is no suit, action, investigation or proceeding pending or, to the knowledge of the Company, threatened
against such party that could impair the ability of the Company to perform its obligations hereunder or to consummate the transactions
contemplated hereby.

 

ARTICLE
V

 

miscellaneous

 

Section 5.1     Survival.
Each of the representations, warranties, covenants, and agreements in this Agreement or pursuant hereto shall survive the Closing.
Notwithstanding any knowledge of facts determined or determinable by any party by investigation, each party shall have the right
to fully rely on the representations, warranties, covenants and agreements of the other parties contained in this Agreement or
in any other documents or papers delivered in connection herewith. Each representation, warranty, covenant and agreement of the
parties contained in this Agreement is independent of each other representation, warranty, covenant and agreement. Except as expressly
set forth in this Agreement, no party has made any representation warranty, covenant or agreement.

 

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Section 5.2     Notices.
All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given if so given) by hand delivery, cable, telecopy or mail (registered or certified, postage prepaid,
return receipt requested) to the respective parties hereto addressed as follows:

 

If to the Company:

 

445 Broadhollow Road, Suite 100

Melville, NY 11747

Attention: Richard B. Goodman

Telecopy #: (631) 775-4223

 

If to Seller:

 

[Seller Home Address]

 

Section 5.3     Certain
Definitions. As used in this Agreement, (a) the term "Affiliate" shall have the meaning set forth in Rule
12b-2 under the Exchange Act and shall include persons who become Affiliates of any person subsequent to the date hereof; (b) the
term "Voting Securities" shall mean the Company Shares and any other securities of the Company entitled to vote
in the election of directors, or securities convertible into, or exercisable or exchangeable for, securities of the Company entitled
to vote in the election of directors, whether or not subject to the passage of time or other contingencies; and (c) the Company
and Seller will be referred to herein individually as a "party" and collectively as "parties."

 

Section 5.4     Specific
Performance. The Company, on the one hand, and Seller, on the other hand, acknowledge and agree that the other would be irreparably
injured by a breach of this Agreement and that money damages are an inadequate remedy for an actual or threatened breach of this
Agreement. Accordingly, the parties agree to the granting of specific performance of this Agreement and injunctive or other equitable
relief as a remedy for any such breach or threatened breach, without proof of actual damages, and further agree to waive any requirement
for the securing or posting of any bond in connection with any such remedy. Such remedy shall not be deemed to be the exclusive
remedy for a breach of this Agreement, but shall be in addition to all other remedies available at law or equity.

 

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Section 5.5     No
Waiver. Any waiver by any party hereto of a breach of any provision of this Agreement shall not operate as or be construed
to be a waiver of any other breach of such provision or of any breach of any other provision of this Agreement. The failure of
a party hereto to insist upon strict adherence to any term of this Agreement on one or more occasions shall not be considered a
waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

 

Section 5.6     Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority
to be invalid or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or invalidated by such holding. The parties agree that the court
making any such determination of invalidity or unenforceability shall have the power to reduce the scope, duration or area of,
delete specific words or phrases in, or replace any such invalid or unenforceable provision with one that is valid and enforceable
and that comes closest to expressing the intention of such invalid or unenforceable provision, and this Agreement shall be enforceable
as so modified after the expiration of the time within which the judgment may be appealed.

 

Section 5.7     Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors
and assigns; provided that this Agreement (and any of the rights, interests or obligations of any party hereunder) may not
be assigned by any party without the prior written consent of the other parties hereto, such consent not to be unreasonably withheld.
Any purported assignment of a party's rights under this Agreement in violation of the preceding sentence shall be null and void.

 

Section 5.8     Entire
Agreement; Amendments. This Agreement constitutes the entire agreement between the parties with respect to the subject matter
hereof and supersedes all other prior agreements and understandings, both written and oral, among the parties with respect to the
subject matter hereof and, except as expressly set forth herein, is not intended to confer upon any person other than the parties
hereto any rights or remedies hereunder. This Agreement may be amended only by a written instrument duly executed by the parties
hereto or their respective permitted successors or assigns.

 

Section 5.9     Headings.
The section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

 

Section 5.10   Governing
Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware, without
giving effect to choice of law principles thereof that would cause the application of the laws of any other jurisdiction.

 

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Section 5.11     Submission
to Jurisdiction. Each of the parties irrevocably submits to the exclusive jurisdiction and service and venue in any federal
or state court sitting in the State of Delaware for the purposes of any action, suit or proceeding arising out of or with respect
to this Agreement. Each of the parties irrevocably and unconditionally waives any objections to the laying of venue of any action,
suit or proceeding relating to this Agreement in any federal or state court sitting in the State of Delaware, and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum. Each of the parties
hereto hereby irrevocably waives the right to A trial by jury.

 

Section 5.12     Counterparts;
Facsimile. This Agreement may be executed in counterparts, including by facsimile or PDF electronic transmission, each of which
shall be deemed an original, but all of which together shall constitute one and the same Agreement.

 

Section 5.13     Further
Assurances. Upon the terms and subject to the conditions of this Agreement, each of the parties hereto agrees to execute such
additional documents, to use commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to
be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate or
make effective, in the most expeditious manner practicable, the transactions contemplated by this Agreement.

 

Section 5.14     Interpretation.
The parties acknowledge and agree that this Agreement has been negotiated at arm's length and among parties equally sophisticated
and knowledgeable in the matters covered hereby. Accordingly, any rule of law or legal decision that would require interpretation
of any ambiguities in this Agreement against the party that has drafted it is not applicable and is hereby waived.

 

[SIGNATURE PAGES FOLLOW]

 

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IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed as of the day and year first written above.

 

	 	P&F INDUSTRIES INC.
	 	 
	 	By: /s/ Joseph A. Molino, Jr.
	 	Name: Joseph A. Molino, Jr., Vice President
	 	 
	 	DWAC Instructions:
	 	 
	 	American Stock Transfer & Trust Company,

LLC
	 	 
	 	Account
	 	Number:
	 	 
	 	/s/ Timothy J. Stabosz
	 	TIMOTHY J. STABOSZExhibit 10.2 

 

WAIVER AND AMENDMENT NO. 1

TO AMENDED AND RESTATED LOAN AND SECURITY
AGREEMENT

 

WAIVER AND AMENDMENT
NO. 1 TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT dated as of October 14, 2014 (this “Amendment”),
is among P&F INDUSTRIES, INC., a Delaware corporation (“P&F”), FLORIDA PNEUMATIC MANAFUACTURING
CORPORATION, a Florida corporation (“Florida Pneumatic”), HY-TECH MACHINE, INC., a Delaware corporation
(“Hy-Tech”), ATSCO HOLDINGS CORPORATION, a Delaware corporation (“ATSCO”), and NATIONWIDE
INDUSTRIES, INC., a Florida corporation (“Nationwide”, and together with P&F, Florida Pneumatic Hy-Tech
and ATSCO, collectively, “Borrowers” and each, a “Borrower”), CONTINENTAL TOOL GROUP,
INC., a Delaware corporation (“Continental”), COUNTRYWIDE HARDWARE, INC., a Delaware corporation
(“Countrywide”), EMBASSY INDUSTRIES, INC., a New York corporation (“Embassy”), GREEN
MANUFACTURING, INC., a Delaware corporation (“Green”), PACIFIC STAIR PRODUCTS, INC., a Delaware corporation
(“Pacific”), WILP HOLDINGS, INC., a Delaware corporation (“WILP”), EXHAUST TECHNOLOGIES,
INC., a Delaware corporation, and WOODMARK INTERNATIONAL, L.P., a Delaware limited partnership (“Woodmark”,
and together with Continental, Countrywide, Embassy, Green, Pacific and WILP, collectively, “Guarantors” and
each, a “Guarantor”), the Lenders (defined below) party to this Agreement, and CAPITAL ONE BUSINESS CREDIT
CORPORATION, a New York corporation, as agent for the Lenders (“Agent”).

 

RECITALS:

 

A.           Borrowers,
Guarantors, the lenders from time to time party thereto (collectively, the “Lenders”) and Agent have entered
into an Amended and Restated Loan and Security Agreement dated as of August 12, 2014 (the “Loan Agreement”).
Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Loan Agreement.

 

B.           Borrowers
have requested that Agent and the Lenders waive compliance with Section 10.2.4 of the Credit Agreement to permit P&F
to purchase Equity Interests of P&F held by Timothy Stabosz (“Stabosz Buyback”) pursuant to the Purchase
Agreement dated as of the day hereof, entered by and between P&F and Timothy J. Stabosz.

 

C.           Borrowers
have requested that Agent and the Lenders amend certain provisions of the Loan Agreement to permit the Stabosz Buyback.

 

D.           Subject
to the terms and conditions set forth below, Agent and the Lenders party hereto are willing to waive compliance with Section
10.2.4 of the Loan Agreement and to amend the Loan Agreement to permit Stabosz Buyback.

 

In furtherance of the
foregoing, the parties agree as follows:

 

Section 1.          WAIVER.
Subject to the covenants, terms and conditions set forth herein and in reliance upon the representations and warranties set
forth herein, the Agent and the Lenders hereby waive compliance by the Borrowers with Section 10.2.4 of the Loan Agreement
solely for purposes of permitting P&F to consummate Stabosz Buyback, provided that (a) no Default or Event of Default shall
have occurred and be continuing both immediately before and immediately giving effect to the Stabosz Buyback and (b) the Borrowers
have delivered a certificate to that effect to Agent on the date of the Stabosz Buyback.

 

    	 

    	 

    

 

Section 2.          AMENDMENTS.
Subject to the covenants, terms and conditions set forth herein and in reliance upon the representations and warranties set
forth herein, the Loan Agreement is amended as follows:

 

(a)          Section
7.1 of the Loan Agreement is hereby amended by inserting the following new sentence at the end thereof:

 

“Notwithstanding anything
herein to the contrary, no security interest shall be granted to Agent or Secured Parties under this Section 7.1 in any Equity
Interests of P&F as may hereafter be repurchased by P&F with the consent of the Lenders.”

 

The amendment to the Loan Agreement are
limited to the extent specifically set forth above and no other terms, covenants or provisions of the Loan Agreement are intended
to be affected hereby.

 

Section 3.          CONDITIONS
PRECEDENT. The parties hereto agree that the waiver set forth in Section 1 above and amendment set forth in Section
2 above shall not be effective until the satisfaction of each of the following conditions precedent (the date of such satisfaction,
the “Effective Date”):

 

(a)          Documentation.
Agent shall have received (i) a counterpart of this Amendment, duly executed and delivered by Borrowers, Guarantors and all of
the Lenders then party to the Loan Agreement, and (ii) such other documents and certificates as Agent or its
counsel may reasonably request relating to the organization, existence and good standing of Obligors, the authorization of this
Amendment and any other legal matters relating to any Obligor or the transactions contemplated hereby.

 

(b)          Fees
and Expenses.  All fees and expenses of counsel to Agent estimated to date shall have been paid in full (without prejudice
to final settling of accounts for such fees and expenses).

 

Section 4.          REPRESENTATIONS
AND WARRANTIES.

 

(a)          In
order to induce Agent and the Lenders to enter into this Amendment, each Borrower represents and warrants to Agent and the Lenders
as follows:

 

(i)          The
representations and warranties made by such Borrower in Section 9 of the Loan Agreement are true and correct on and as of
the date hereof, except to the extent that such representations and warranties expressly relate to an earlier date in which case
such representations and warranties are true and correct on and as of such earlier date.

 

(ii)         No
Default or Event of Default has occurred and is continuing or will exist after giving effect to this Amendment.

 

(b)          In
order to induce Agent and the Lenders to enter into this Amendment, each Borrower and each Guarantor represents and warrants to
Agent and the Lenders that this Amendment has been duly authorized, executed and delivered by it and constitutes its legal, valid
and binding obligation.

 

Section 5.          MISCELLANEOUS.

 

(a)          Ratification
and Confirmation of Loan Documents. Each Borrower and each Guarantor hereby consents, acknowledges and agrees to the amendments
set forth herein and hereby confirms and ratifies in all respects the Loan Documents to which such Person is a party (including
without limitation, with respect to each Guarantor, the continuation of its payment and performance obligations under the guaranties
set forth in Section 15 of the Loan Agreement upon and after the effectiveness of the amendments contemplated hereby and,
with respect to each Borrower and each Guarantor, the continuation and extension of the liens granted under the Loan Agreement
and Security Documents to secure the Obligations).

 

    	2

    	 

    

 

(b)          Fees
and Expenses. Borrowers shall pay on demand all reasonable costs and expenses of Agent in connection with the preparation,
reproduction, execution, and delivery of this Amendment and any other documents prepared in connection herewith, including, without
limitation, the reasonable fees and out-of-pocket expenses of counsel for Agent.

 

(c)          Headings.
Section and subsection headings in this Amendment are included herein for convenience of reference only and shall not constitute
a part of this Amendment for any other purpose or be given any substantive effect.

 

(d)          Governing
Law; Waiver of Jury Trial. This Amendment shall be governed by and construed in accordance with the laws of the State of New
York, and shall be further subject to the provisions of Sections 14.13, 14.14 and 14.15 of the Loan Agreement.

 

(e)          Counterparts.
This Amendment may be executed in any number of counterparts, each of which when executed and delivered shall be deemed to be an
original, and all of which when taken together shall constitute one and the same agreement. Delivery of an executed counterpart
of a signature page of this Amendment by facsimile or electronic transmission (including .pdf file) shall be effective as delivery
of a manually executed counterpart hereof.

 

(f)          Entire
Agreement. This Amendment, together with all the Loan Documents (collectively, the “Relevant Documents”),
sets forth the entire understanding and agreement of the parties hereto in relation to the subject matter hereof and supersedes
any prior negotiations and agreements among the parties relating to such subject matter. No promise, condition, representation
or warranty, express or implied, not set forth in the Relevant Documents shall bind any party hereto, and no such party has relied
on any such promise, condition, representation or warranty. Each of the parties hereto acknowledges that, except as otherwise expressly
stated in the Relevant Documents, no representations, warranties or commitments, express or implied, have been made by any party
to the other. None of the terms or conditions of this Amendment may be changed, modified, waived or canceled orally or otherwise
except in a writing signed by Agent for such purpose.

 

(g)          Enforceability.
Should any one or more of the provisions of this Amendment be determined to be illegal or unenforceable as to one or more of the
parties hereto, all other provisions nevertheless shall remain effective and binding on the parties hereto.

 

(h)          Successors
and Assigns. This Amendment shall be binding upon and inure to the benefit of each Borrower, each Guarantor, Agent, each Lender
and their respective successors and assigns (subject to Section 13 of the Loan Agreement).

 

[Remainder of Page Intentionally Left
Blank; Signature Pages Follow]

 

    	3

    	 

    

  

The following parties
have caused this Waiver and Amendment No. 1 to Amended and Restated Loan and Security Agreement to be executed as of the date first
written above.

  

	 	BORROWERS:	 
	 	 	 
	 	P&F INDUSTRIES, INC.	 
	 	FLORIDA PNEUMATIC MANUFACTURING	 
	 	CORPORATION	 
	 	HY-TECH MACHINE, INC.	 
	 	ATSCO HOLDINGS CORPORATION	 
	 	NATIONWIDE INDUSTRIES, INC.	 
	 	 	 	 
	 	By:	/s/ Joseph A. Molino, Jr.	 
	 	Name:	Joseph A. Molino, Jr.	 
	 	Title:	Vice President	 
	 	 	 	 
	 	GUARANTORS:	 
	 	 	 
	 	CONTINENTAL TOOL GROUP, INC.	 
	 	COUNTRYWIDE HARDWARE, INC.	 
	 	EMBASSY INDUSTRIES, INC.	 
	 	GREEN MANUFACTURING, INC.	 
	 	PACIFIC STAIR PRODUCTS, INC.	 
	 	EXHAUST TECHNOLOGIES, INC.	 
	 	WILP HOLDINGS, INC.	 
	 	 	 	 
	 	By:	/s/ Joseph A. Molino, Jr.	 
	 	Name:	Joseph A. Molino, Jr.	 
	 	Title:	Vice President	 
	 	 	 	 
	 	WOODMARK INTERNATIONAL, L.P.	 
	 	 	 
	 	By:     Countrywide Hardware, Inc.	 
	 	 	 	 
	 	By:	/s/ Joseph A. Molino, Jr.	 
	 	Name:	Joseph A. Molino, Jr.	 
	 	Title:	Vice President	 

 

WAIVER AND AMENDMENT NO.1 TO AMENDED AND
RESTATED LOAN AND SECURITY AGREEMENT

Signature Page

 

    	 

    	 

    

 

	 	AGENT AND LENDERS:	 
	 	 	 
	 	CAPITAL ONE BUSINESS CREDIT CORPORATION, as Agent and Lender	 
	 	 	 	 
	 	By:	/s/ Julianne Low	 
	 	Name:	Julianne Low	 
	 	Title:	Senior Director	 

 

WAIVER AND AMENDMENT NO.1 TO AMENDED AND
RESTATED LOAN AND SECURITY AGREEMENT

Signature Page

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