Document:

Exhibit 10.5

 

TERM NOTE

 

	
  $1,134,000

  	
   

  	
  June 8,
  2009

  

 

This Term Note is
executed and delivered under and pursuant to the terms of that certain
Revolving Credit, Term Loan and Security Agreement dated as of June 8,
2009 (as amended, restated, supplemented or modified from time to time, the “Loan
Agreement”) by and among the undersigned, as Borrower, the various
financial institutions named therein or which hereafter become a party thereto
(each individually a “Lender” and collectively, “Lenders”) and
PNC BANK, NATIONAL ASSOCIATION, as agent for Lenders (in such capacity, “Agent”).  Capitalized terms not otherwise defined
herein shall have the meanings provided in the Loan Agreement.

 

FOR VALUE RECEIVED,
Borrower hereby promises to pay to the order of PNC BANK, NATIONAL ASSOCIATION (“Payee”), at the office of
Agent located at Two Tower Center Boulevard, East Brunswick, New Jersey 08816
or at such other place as Agent may from time to time designate to Borrower in
writing:

 

(i)            the
principal sum of ONE MILLION ONE HUNDRED THIRTY-FOUR THOUSAND AND 00/100
DOLLARS ($1,134,000) or, if different, from such amount, the unpaid principal
balance of Payee’s Commitment Percentage of the Term Loan as may be due and
owing under the Loan Agreement, payable in accordance with the provisions of
the Loan Agreement, subject to acceleration upon the occurrence of an Event of
Default under the Loan Agreement or earlier termination of the Loan Agreement
pursuant to the terms thereof; and

 

(ii)           interest
on the principal amount of this Term Note from time to time outstanding until
such principal amount is paid in full at the applicable Interest Rate in
accordance with the provisions of the Loan Agreement.  Upon and after the occurrence of an Event of
Default, and during the continuation thereof, interest shall be payable at the
Default Rate.  In no event, however,
shall interest exceed the maximum interest rate permitted by law.

 

This Term Note is one of
the Term Notes as referred to in the Loan Agreement and is secured by the liens
granted pursuant to the Loan Agreement and the Other Documents, is entitled to
the benefits of the Loan Agreement and the Other Documents and is subject to
all of the agreements, terms and conditions therein contained.

 

This Term Note is subject
to mandatory prepayment and may be voluntarily prepaid, in whole or in part, on
the terms and conditions set forth in the Loan Agreement.

 

If an Event of Default
under Section 10.7 of the Loan Agreement shall occur, then this Term Note
shall immediately become due and payable, without notice, together with
reasonable attorneys’ fees if the collection hereof is collected by or through
an attorney at law.  If any other Event
of Default shall occur under the Loan Agreement or any of the Other Documents,
which is

 

 

not cured within any
applicable grace period, then this Term Note may, as provided in the Loan
Agreement, be declared to be immediately due and payable, without notice,
together with reasonable attorneys’ fees, if the collection hereof is placed in
the hands of an attorney to obtain or enforce payment hereof.

 

Each
Borrower expressly waives any presentment, demand, protest, notice of protest,
or notice of any kind except as expressly provided in the Loan Agreement.

 

[Signatures on Following Page]

 

2

 

This
Term Note shall be construed and enforced in accordance with the laws of the
State of North Carolina.

 

	
   

  	
  WM COFFMAN LLC,

  
	
   

  	
  a Delaware limited
  liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joseph A. Molino,
  Jr.

  
	
   

  	
  Name:

  	
  Joseph A. Molino, Jr.

  
	
   

  	
  Title:

  	
  Vice President

  

 

Term Note A

 

 

	
  STATE OF New York

  	
  )

  
	
   

  	
  ) ss.

  
	
  COUNTY OF
  Suffolk

  	
  )

  

 

On
this 4th day of June, 2009, before me personally came Joseph
A. Molino, Jr., to me known, who, being by me duly sworn, did depose and say
that he is the Vice President of WM COFFMAN LLC, the limited liability company
described in and which executed the foregoing instrument; that he knows the
seal of said limited liability company; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by order of the
members of said limited liability company, and that he signed his name thereto
by like order.

 

	
   

  	
  /s/ Robert C.
  Weiden

  
	
   

  	
  NOTARY PUBLIC

  
	
   

  	
   

  
	
   

  	
  My Commission
  Expires:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  12/22/10

  
	
   

  	
  [NOTARIAL SEAL]

  

 

Term Note AExhibit
10.6

 

REVOLVING CREDIT NOTE

 

	
  $10,866,000

  	
   

  	
  June 8, 2009

  

 

This
Revolving Credit Note is executed and delivered under and pursuant to the terms
of that certain Revolving Credit, Term Loan and Security Agreement dated as of June 8,
2009 (as amended, restated, supplemented or modified from time to time, the “Loan
Agreement”) by and among the undersigned, as Borrower, the various
financial institutions named therein or which hereafter become a party thereto
(each individually a “Lender” and collectively, “Lenders”) and
PNC BANK, NATIONAL ASSOCIATION, as agent for Lenders (in such capacity, “Agent”).  Capitalized terms not otherwise defined
herein shall have the meanings provided in the Loan Agreement.

 

FOR
VALUE RECEIVED, the Borrower hereby promises to pay to the order of PNC BANK,
NATIONAL ASSOCIATION (“Payee”), at the office of Agent located at Two
Tower Center Boulevard, East Brunswick, New Jersey  08816, or at such other place as Agent may
from time to time designate to Borrower in writing:

 

(i)            the principal sum of TEN MILLION
EIGHT HUNDRED SIXTY-SIX THOUSAND DOLLARS ($10,866,000) or, if different from
such amount, the aggregate unpaid principal balance of Payee’s Commitment
Percentage of the Revolving Advances as may be due and owing under the Loan Agreement,
payable in accordance with the provisions of the Loan Agreement, subject to
acceleration upon the occurrence of an Event of Default under the Loan
Agreement or earlier termination of the Loan Agreement pursuant to the terms
thereof; and

 

(ii)           interest on the principal amount of
the Revolving Advances under this Revolving Credit Note from time to time
outstanding until such principal amount is paid in full at the applicable
Interest Rate in accordance with the provisions of the Loan Agreement.  In no event, however, shall interest exceed
the amount collectible at the maximum interest rate permitted by law.  Upon and after the occurrence of an Event of
Default, and during the continuation thereof, interest may be payable at the
Default Rate in accordance with the provisions of the Loan Agreement.

 

This
Revolving Credit Note is one of the Revolving Credit Notes referred to in the
Loan Agreement and is secured by the liens granted pursuant to the Loan
Agreement and the Other Documents, is entitled to the benefits of the Loan
Agreement and the Other Documents and is subject to all of the agreements,
terms and conditions therein contained.

 

This
Revolving Credit Note is subject to mandatory prepayment and may be voluntarily
prepaid, in whole or in part, on the terms and conditions set forth in the Loan
Agreement.

 

If
an Event of Default under Section 10.7 of the Loan Agreement shall occur,
then this Revolving Credit Note shall immediately become due and payable,
without notice, together with reasonable attorneys’ fees if the collection
hereof is placed in the hands of an attorney to obtain or enforce payment
hereof.  If any other Event of Default
shall occur under the Loan Agreement

 

 

or
any of the Other Documents, and the same is not cured within any applicable
grace or cure period, then this Revolving Credit Note may, as provided in the
Loan Agreement, be declared to be immediately due and payable, without notice,
together with reasonable attorneys’ fees, if the collection hereof is placed in
the hands of an attorney to obtain or enforce payment hereof.

 

Borrower
expressly waives any presentment, demand, protest, notice of protest, or notice
of any kind except as expressly provided in the Loan Agreement.

 

[Signatures on Following Page]

 

 

This
Revolving Credit Note shall be construed and enforced in accordance with the
laws of the State of North Carolina.

 

	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  WM
  COFFMAN LLC,

  
	
   

  	
  a
  Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joseph A. Molino,
  Jr.

  
	
   

  	
  Name:

  	
  Joseph A. Molino, Jr.

  
	
   

  	
  Title:

  	
  Vice President

  

 

Revolving Credit Note

 

 

	
  STATE
  OF New York

  	
  )

  
	
   

  	
  )
  ss.

  
	
  COUNTY
  OF Suffolk

  	
  )

  

 

On
this 4th day of June, 2009, before me personally came Joseph A. Molino, Jr., to me known,
who, being by me duly sworn, did depose and say that he is the Vice President
of WM COFFMAN LLC, the limited liability company described in and which
executed the foregoing instrument; that he knows the seal of said limited
liability company; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by order of the members of said limited liability
company, and that he signed his name thereto by like order.

 

	
   

  	
  /s/
  Robert C. Weiden

  
	
   

  	
  NOTARY
  PUBLIC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  My
  Commission Expires:

  
	
   

  	
   

  
	
   

  	
  12/22/10

  
	
   

  	
  [NOTARIAL
  SEAL]

  

 

Revolving Credit NoteExhibit 10.7

 

AMENDMENT NO. 19 AND WAIVER TO

CREDIT AGREEMENT

 

THIS
AMENDMENT NO. 19 AND WAIVER, dated as of June 10,
2009 (the “Amendment and Waiver”) to the Credit Agreement, dated as of June 30,
2004, by and among P&F INDUSTRIES, INC., a
Delaware corporation  (“P&F”), FLORIDA PNEUMATIC MANUFACTURING CORPORATION,
a Florida corporation (“Florida Pneumatic”), EMBASSY
INDUSTRIES, INC., a New York corporation (“Embassy”), GREEN MANUFACTURING, INC., a Delaware
corporation (“Green”), COUNTRYWIDE HARDWARE,
INC., a Delaware corporation (“Countrywide”), NATIONWIDE INDUSTRIES, INC., a Florida
corporation (“Nationwide”), WOODMARK INTERNATIONAL,
L.P., a Delaware limited partnership (“Woodmark”), PACIFIC STAIR PRODUCTS, INC., a Delaware corporation (“Pacific”),
WILP HOLDINGS, INC., a Delaware
corporation (“WILP”), CONTINENTAL TOOL GROUP,
INC., a Delaware corporation (“Continental”) and HY-TECH MACHINE, INC., a Delaware corporation (“Hy-Tech”;
and collectively with P&F, Florida Pneumatic, Embassy, Green, Countrywide,
Nationwide, Woodmark, Pacific, WILP and Continental,  the
“Co-Borrowers”), CITIBANK, N.A. and HSBC BANK USA, NATIONAL ASSOCIATION (formerly known as HSBC
Bank USA) (collectively, the “Lenders”) and CITIBANK,
N.A., as Administrative Agent for the Lenders (as same has been and
may be further amended, restated, supplemented or otherwise modified, from time
to time, the “Credit Agreement”).

 

RECITALS

 

The Co-Borrowers have
requested, and the Administrative Agent and the Lenders have agreed, subject to
the terms and conditions of this Amendment, to amend and waive certain
provisions of the Credit Agreement as set forth herein.

 

Accordingly,
in consideration of the premises and of the mutual covenants and agreements
hereinafter set forth, the parties hereto agree as follows:

 

ARTICLE I.

Amendments to Credit
Agreement.

 

Section 1.01.                           The following
definitions in Section 1.01 of the Credit Agreement are each hereby
amended in their entirety to provide as follows:

 

“Applicable
Revolving Credit Loan Margin” shall mean (a) 2.00%, with respect to
Revolving Credit Loans that are Prime Rate Loans and (b) 3.75%, with
respect to Revolving Credit Loans that are LIBOR Loans, each such margin in (a) and
(b) hereinafter the “Prime Rate Margin”.

 

“Applicable
Additional Term Loan Margin” shall mean (a) 2.00%, with respect to
Additional Term Loans that are Prime Rate Loans and (b) 4.00%, with
respect to Additional Term Loans that are LIBOR Loans, each such margin in (a) and
(b) hereinafter the “LIBOR Margin.”

 

“Borrowing Base” shall mean as of any
Borrowing Date an amount equal to the sum of (a) 80% of the value of the
Co-Borrowers’ Eligible Accounts Receivable (other than the Stair Business
Eligible Accounts Receivable), plus (b) the lesser of (i) 50%
of the aggregate value of the Co-Borrowers’ Eligible Inventory (other than the
Stair Business Eligible Inventory), and (ii)(x) $13,700,000, for the
period from the Amendment No. 19 Effective Date through August 30,
2009 or (y) $13,500,000, for the period from August 31, 2009 and
thereafter, plus (c) if 

 

1

 

applicable on such date of determination, the
Stair Business Borrowing Base minus (d) for periods through August 31,
2009 only, the Contributed Collateral Shortfall, all as further described in
the Borrowing Base Certificate; provided, however, such
percentages and the foregoing inventory limitation may be revised from time to
time solely by the Required Lenders in their Permitted Discretion (i) after
review of each field audit of the Co-Borrowers’ receivables and inventory, upon
30 days’ prior written notice to the Co-Borrowers so long as no Default or
Event of Default has occurred and is then continuing or (ii) immediately upon
written notice if a Default or Event of Default has occurred and is then
continuing.  The value of all Eligible
Inventory shall be determined at the lower of cost or market value on a first
in first out basis in accordance with Generally Accepted Accounting Principles
applied on a consistent basis.”

 

“Consolidated” shall mean, as applied to any
financial or accounting term, such term determined on a consolidated basis in
accordance with GAAP for the Financial Parties.

 

“Consolidated Capital Base” shall mean on a
Consolidated basis, the shareholders’ equity of the Financial Parties plus
(a) Subordinated Debt less (b) all intangible assets,
including without limitation, organization expenses, intellectual property,
goodwill, loans or mortgages due from shareholders and/or employees and/or
Affiliates, treasury stock (unless otherwise deducted in the computation of
shareholders’ equity) or deferred charges less (c) the Net
Investment in Coffman.

 

“Consolidated
Current Maturities on Long Term Debt” shall mean, on any date of determination,
the aggregate principal payments made during the prior twelve (12) month period
with respect to all Indebtedness which is classified as long term debt on the
Consolidated financial statements of the Financial Parties, as calculated in
accordance with GAAP.

 

“Consolidated EBITDA” shall mean for the
Financial Parties for any period, the Consolidated Net Income (or Consolidated
net loss) of the Financial Parties for such period, plus (I) the sum, without
duplication, of (a) gross interest expense (without giving effect to any
netting for any interest income), (b) depreciation and amortization
expenses or charges, (c) all income taxes to any government or governmental
instrumentality, expensed on any Financial Party’s books (whether paid or
accrued), (d) non-cash losses resulting from a write-down or write-off of
goodwill or intangible assets in the context of an acquisition (net of the
associated tax benefit), and (e) non-cash charges incurred in connection with
accounting for (i) stock options and stock-based compensation under Financial
Accounting Standards No. 123R and (ii) non-cash expenses under Financial
Account Standards No. 141 minus (II) the sum of (a) all extraordinary gains, (b)
all non-cash income or gain and (c) interest income, in each case determined on
a Consolidated basis for the Financial Parties in accordance with GAAP.  All of the foregoing categories shall be
calculated (without duplication) for the four fiscal quarters ending on or most
recently ended prior to the date of calculation thereof.

 

“Consolidated Interest Expense” shall mean
the Consolidated gross interest expense of the Financial Parties (without
giving effect to any netting for any interest income), determined in accordance
with GAAP and calculated (without 

 

2

 

duplication) for the four fiscal quarters
ending on or most recently ended prior to the date of calculation thereof.

 

“Consolidated Net Income” shall mean, for any
period, the net income of the Financial Parties on a Consolidated basis for
such period determined in accordance with GAAP.

 

“Consolidated Net Loss” shall mean, for any
period, a net loss of the Financial Parties on a Consolidated basis for such
period determined in accordance with GAAP.

 

“Consolidated Net Worth” shall mean (a) total
Consolidated assets of the Financial Parties less (b) the total
Consolidated liabilities of the Financial Parties, in each case determined in
accordance with GAAP.

 

“Consolidated Senior Debt” shall mean all
Indebtedness of the Financial Parties for borrowed money other than (i) Indebtedness
described in clause “(j)” of the definition of the term “Indebtedness,” (ii) Subordinated
Debt and (iii) Indebtedness consisting of foreign currency exchange agreements
as described in clause “(h)” of the definition of Indebtedness.

 

“Prime Rate” 
shall mean the highest of (i) the Prime Rate; (ii) the Federal
Funds Effective Rate from time to time plus 0.5%; and (iii) two
hundred (200) basis points in excess of the floating rate of interest
determined, on a daily basis, by the Administrative Agent in
accordance with its customary procedures and utilizing such electronic or other
quotation sources as it considers appropriate to be the prevailing rate per
annum in effect each banking day at which deposits in United States dollars for
a one month period, determined by the Administrative Agent in its
sole discretion, are offered to the Administrative Agent by first class
banks in the London Interbank Market shortly after 11:00 a.m. (London
time) two banking days prior to the date such rate of interest shall be
effective and applied to existing and future advances under Prime Rate
Loans.

 

“Revolving
Credit Commitment” shall mean, with respect to each Lender, the obligation of
such Lender to make Revolving Credit Loans to the Co-Borrowers and to acquire
participations in Letters of Credit and Banker’s Acceptances in an aggregate
amount in an aggregate amount not to exceed the amount set forth opposite such
Lender’s name on the signature page to Amendment No. 19 under the
caption “Revolving Credit Commitment” and for the periods described therein, as
such amounts may be adjusted in accordance with the terms of this Agreement.

 

“Security Documents” shall mean the Security
Agreement, the Pledge Agreements, the Mortgages and the Assignments of Note.

 

“Subordination Agreements” shall mean the
Hytech Subordination Agreement.

 

“Total Commitment” shall
mean, at any time, the aggregate of the Commitments in effect at such time.

 

“Total Revolving Credit
Commitment” shall mean, at any time, the aggregate of the Revolving Credit
Commitments in effect at such time, which shall be 

 

3

 

$20,700,000, as of the
Amendment No. 19 Effective Date, and $19,400,000, as of August 31,
2009, as same may be otherwise adjusted from time to time.

 

Section 1.02.                           The following
definitions are hereby added to Section 1.01 of the Credit Agreement in
their appropriate alphabetical order:

 

“Amendment No. 19” shall mean Amendment No. 19
and Waiver to Credit Agreement, dated as of the Amendment No. 19 Effective
Date, among the Co-Borrowers, the Lenders and the Administrative Agent.

 

“Amendment No. 19
Effective Date” shall mean June 10, 2009.

 

“Assignments of Notes” shall mean,
collectively, the Assignments of Notes, each substantially in the form attached
hereto as Exhibit O to be executed and delivered on the Amendment No. 19
Effective Date by Woodmark and Pacific with respect to the Coffman Notes, as
each of the same may hereafter be amended, restated, supplemented or otherwise
modified from time to time.

 

“Coffman”
shall mean WM Coffman LLC, a Delaware limited liability company.

 

“Coffman
Contribution Agreements” shall mean, collectively, (a) the Assignment and
Assumption Agreement, dated as of June 8, 2009, between Woodmark and
Coffman, pursuant to which Woodmark contributed the Woodmark Contributed Assets
to Coffman and (b) the Assignment and Assumption Agreement, dated as of June 8,
2009, between Pacific and Coffman, pursuant to which Pacific contributed the
Pacific Contributed Assets to Coffman.

 

“Coffman
Documents” shall mean the Coffman Contribution Agreements, the Coffman Purchase
Agreement and the other documents executed and delivered in connection with the
Coffman Transaction.

 

“Coffman
Notes” shall mean the Subordinated Promissory Notes delivered to each of
Woodmark and Pacific pursuant to the Coffman Purchase Agreement, as further
described in the Assignments of Note.

 

“Coffman
Purchase Agreement” shall mean the Asset Purchase Agreement, dated on or about June 8,
2009, between Coffman Stairs LLC, a Delaware limited liability company, as
Seller, and Coffman, as Purchaser.

 

“Coffman
Transaction” shall mean the transactions contemplated under the Coffman
Contribution Agreements and the Coffman Purchase Agreement.

 

“Contributed Collateral Shortfall Amount”
shall mean the amount described as the “Contributed Collateral Shortfall Amount”
in the closing statement delivered to the Lenders in accordance with Amendment No. 19
and dated as of the Amendment No. 19 Effective Date.

 

“Federal Funds Effective Rate” shall mean,
for any day, the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
fund brokers, as published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day
which is a Business Day, the average of the 

 

4

 

quotations for the day of such transactions
received by the Administrative Agent from three Federal fund brokers of
recognized standing selected by the Administrative Agent.

 

“Financial
Parties” shall mean the Co-Borrowers and all of their respective Subsidiaries, other than Coffman.

 

“Fixed
Charge Coverage Ratio” shall mean the ratio of (i) Consolidated EBITDA minus
cash taxes paid to (ii) Consolidated Interest Expense plus Consolidated
Current Maturities on Long Term Debt.

 

“HyTech PA” shall mean
Hy-Tech Holdings, Inc., a Delaware corporation.

 

“HyTech
Documents” shall mean the Junior Note, the Junior Security Agreement and the
Junior Mortgage, as such terms are defined in the HyTech Subordination
Agreement.

 

“HyTech
Subordination Agreement” shall mean the Subordination Agreement to be
hereinafter entered into among Hy-Tech, the Administrative Agent and HyTech PA,
as amended, restated, supplemented or modified, from time to time.

 

“Net
Investment in Coffman” shall mean the remainder of (a) the aggregate
amount of the Coffman Notes minus (b) the amount that is shown as the “due
to Coffman” on the Financial Parties’ financial statements, all as determined
on the Amendment No. 19 Effective Date.

 

“Pacific
Contributed Assets” shall mean those assets described on Schedule A hereto.

 

“PNC
Loan Agreement” shall mean the Revolving Credit, Term Loan and Security
Agreement, dated on or about June 8, 2009, between Coffman and PNC Bank,
National Association.

 

“Stair
Business Borrowing Base” shall mean, for periods through August 31, 2009
only, (a) 80% of the value of the Stair Business Eligible Accounts Receivable,
plus (b) 50% of the aggregate value of the Stair Business Eligible
Inventory.

 

“Stair
Business Eligible Accounts Receivables” shall mean Eligible Accounts
Receivables owing to Woodmark and/or Pacific in connection with the “Stair
Business”, which was not contributed to Coffman, as further described in the
Borrowing Base Certificate with respect to the Stair Business Borrowing Base.

 

“Stair
Business Eligible Inventory” shall mean Eligible Inventory owned by Pacific in
connection with the “Stair Business” which was not contributed to Coffman in
connection with the Coffman Contribution Agreements, as further described in
the Borrowing Base Certificate with respect to the Stair Business Borrowing
Base.

 

“Woodmark
Contributed Assets” shall mean those assets described on Schedule B hereto.

 

5

 

Section 1.03.                           The definition
of the term “Affiliate” in Section 1.01 of the Credit Agreement is hereby
amended to add the following sentence at the end thereof:

 

“Notwithstanding anything to
the contrary herein, any references to the term “Affiliate” when used to
reference Affiliates of the Co-Borrowers shall be deemed to include Coffman as
an Affiliate of the Co-Borrowers, including without limitation under Section 7.15
hereof.”

 

Section 1.04.                           The definition
of the term “Subsidiaries” in Section 1.01 of the Credit Agreement is
hereby amended to add the following sentence at the end thereof:

 

“Notwithstanding anything to
the contrary herein, all references in this Agreement to the term “Subsidiaries”
when used to describe Subsidiaries of the Co-Borrowers (including with respect
to the calculation of financial covenants set forth in Section 7.13
hereof) shall not be deemed to include Coffman, except with respect to the delivery
of financial statements pursuant to Section 6.03(a) and 6.03(b) hereof.

 

Section 1.05.                           Article VI
of the Credit Agreement is hereby amended to add a new Section 6.15 at the
end thereof as follows:

 

SECTION 6.15.                 HyTech
Documents.  The
Co-Borrowers shall deliver to the Administrative Agent,  by no later than June 26, 2009, a
counterpart of the HyTech Subordination Agreement, duly executed by Hy-Tech and
HyTech  PA, along with copies of the executed
HyTech Documents. The Co-Borrower shall further deliver to the Administrative
Agent, promptly following payment in full of the obligations described in the
HyTech Documents, evidence, satisfactory to the Administrative Agent and its
counsel, that the subordinate liens on the personal property and real property of
Hy-Tech in favor of HyTech PA have been released.

 

Section 1.06.                           Section 7.01
of the Credit Agreement is hereby amended by deleting the period at the end of
clause “(l)” thereof and adding the word “and” and by adding new clause “(m)”
at the end thereof as follows:

 

“(m)   Liens on personal property and real property
of Hy-Tech to be granted to HyTech PA pursuant to the HyTech Documents,
provided that such Liens are only granted to secure obligations under the
HyTech Documents and that all such Liens shall be terminated following payment
in full of the Indebtedness described in the HyTech Documents.”

 

Section 1.07.                           Section 7.02
of the Credit Agreement is hereby amended by deleting the period at the end of
clause “(i)” thereof and adding the word “and” and by adding new clause “(j)”
at the end thereof as follows:

 

“(j)                               Indebtedness of
Hy-Tech owing to HyTech PA under the HyTech Documents.

 

Section 1.08.                           Section 7.13(a) of
the Credit Agreement is hereby amended and restated in its entirety to provide
as follows:

 

6

 

“Fixed Charge Coverage Ratio.  Permit the Fixed Charge Coverage Ratio as of
the last day of each fiscal quarter set forth below, to be less than the ratio
set forth below opposite the applicable fiscal quarter:

 

	
  Period

  	
   

  	
  Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31,
  2009

  	
   

  	
  1.05:1.00

  	
   

  
	
  March 31,
  2010

  	
   

  	
  1.20:1.00

  	
   

  
	
  June 30,
  2010

  	
   

  	
  1.15:1.00

  	
   

  
	
  September 30,
  2010

  	
   

  	
  1.10:1.00

  	
   

  
	
  December 31, 2010

  	
   

  	
  1.10:1.00

  	
   

  
	
  March 31, 2011

  	
   

  	
  1.15:1.00

  	
   

  
	
  June 30, 2011

  	
   

  	
  1.15:1.00

  	
   

  
	
  September 30, 2011 and at the end of each
  fiscal quarter thereafter”

  	
   

  	
  1.20:1.00

  	
   

  

 

Section 1.09.                           The table in Section 7.13(b) of
the Credit Agreement, Minimum Consolidated Capital Base, is hereby
amended and restated in its entirety to provide as follows:

 

	
  Period

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30,
  2009 through December 30, 2009

  	
   

  	
  $

  	
  23,000,000

  	
   

  
	
  December 31,
  2009 through March 30, 2010

  	
   

  	
  $

  	
  22,700,000

  	
   

  
	
  March 31,
  2010 through June 29, 2010

  	
   

  	
  $

  	
  22,300,000

  	
   

  
	
  June 30,
  2010 through September 29, 2010

  	
   

  	
  $

  	
  23,200,000

  	
   

  
	
  September 30,
  2010 through December 30, 2010

  	
   

  	
  $

  	
  23,600,000

  	
   

  
	
  December 31,
  2010 through March 30, 2011

  	
   

  	
  $

  	
  23,800,000

  	
   

  
	
  March 31,
  2011 through June 29, 2011

  	
   

  	
  $

  	
  24,100,000

  	
   

  
	
  June 30,
  2011 through September 29, 2011

  	
   

  	
  $

  	
  25,000,000

  	
   

  
	
  September 30,
  2011 through December 30, 2011

  	
   

  	
  $

  	
  25,600,000

  	
   

  
	
  December 31,
  2011 and thereafter

  	
   

  	
  $

  	
  25,800,000

  	
   

  

 

Section 1.10.                           Section 7.13(c) of
the Credit Agreement is hereby amended and restated in its entirety to provide
as follows:

 

“Consolidated Senior Debt to Consolidated EBITDA.  Permit the ratio of Consolidated Senior Debt
to Consolidated EBITDA Ratio as of the last day of each fiscal quarter set
forth below, to be less than the ratio set forth below opposite the applicable
fiscal quarter:

 

	
  Period

  	
   

  	
  Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30,
  2009

  	
   

  	
  8.00:1.00

  	
   

  
	
  September 30,
  2009

  	
   

  	
  7.50:1.00

  	
   

  
	
  December 31,
  2009

  	
   

  	
  5.50:1.00

  	
   

  
	
  March 31,
  2010

  	
   

  	
  4.50:1.00

  	
   

  
	
  June 30,
  2010

  	
   

  	
  4.50:1.00

  	
   

  
	
  September 30,
  2010

  	
   

  	
  4.50:1.00

  	
   

  
	
  December 31,
  2010

  	
   

  	
  4.25:1.00

  	
   

  
	
  March 31,
  2011

  	
   

  	
  4.25:1.00

  	
   

  
	
  June 30,
  2011

  	
   

  	
  4.25:1.00

  	
   

  
	
  September 30,
  2011

  	
   

  	
  3.75:1.00

  	
   

  
	
  December 31,
  2011 and at the end of each fiscal quarter thereafter”

  	
   

  	
  3.50:1.00

  	
   

  

 

7

 

Section 1.11.                           Section 7.13(d) of
the Credit Agreement is hereby amended and restated in its entirety to provide
as follows:

 

“Consolidated Capital Expenditures.  Permit Consolidated Capital Expenditures to
exceed (a) $2,000,000, for the fiscal year ending December 31, 2009 or (b) $1,250,000,
for any fiscal year thereafter.”

 

Section 1.12                              Section 7.13(e) of
the Credit Agreement is hereby amended and restated in its entirety to provide
as follows:

 

“No Consolidated Net Loss.  Incur for any four consecutive fiscal
quarters of the Co-Borrowers a Consolidated Net Loss in excess of (a) ($700,000),
for the fiscal quarter ending June 30, 2009, (b) ($450,000), for the
fiscal quarter ending September 30, 2009, or (c) $0, at any time
thereafter.  For purposes of this Section 7.13(e) Consolidated
Net Loss shall be calculated exclusive of extraordinary gains, provided that
for purposes of determining compliance with this covenant for the fiscal
quarters ending June 30, 2009 and September 30, 2009, Consolidated
Net Loss shall be calculated without giving effect to the one-time charge
against earnings resulting from the write-down of goodwill and other intangible
assets (net of the associated deferred tax benefit), which was incurred by the
Co-Borrowers in the fiscal quarter ended December 31, 2008.”

 

Section 1.13.                           Article VII
of the Credit Agreement is hereby amended to add a new Section 7.17, Section 7.18
and Section 7.19 at the end thereof as follows:

 

SECTION 7.17.                 Coffman Documents. No
Co-Borrower shall amend, supplement or otherwise modify any of the terms of the
Coffman Documents in a manner that would be materially adverse to the
Administrative Agent of the Lenders, including with respect to the incurrence
by Woodmark or Pacific of any additional liabilities or obligations thereunder
or contribution of additional assets or grant of a security interest in their
respective assets, without the prior written consent of the Required Lenders.

 

SECTION 7.18.                 PNC Loan Agreement.  No Co-Borrower shall cause
or permit Coffman to amend, supplement or otherwise modify any of the terms of
the PNC Loan Agreement or any documents or agreements now or hereinafter
executed in connection therewith, in any manner which may result in any
Co-Borrower guarantying the obligations of Coffman to PNC under such facility,
granting a security interest to PNC in its assets or otherwise being liable or
responsible for, whether contingent or otherwise, any obligations of Coffman,
whether with regard to the payment of money or otherwise, under such facility.

 

SECTION 7.19.                 Dealings with Coffman.  Notwithstanding anything to
the contrary herein, no Co-Borrower shall make any loans to or investments in
Coffman, nor shall any Co-Borrower guaranty, or become liable or responsible
for, in any way, the obligations of Coffman, whether with regard to the payment
or money owing to PNC or any other party.

 

8

 

Section 1.14.                           Schedule III
[Existing Indebtedness] to the Credit Agreement is hereby amended to add the
following at the end thereof:

 

8.                    Obligations of Woodmark and
Pacific arising under the Transitional Services Agreement, dated on or about June 8,
2009, among Woodmark, Pacific and Coffman.

9.                    Obligations of Woodmark
owing to Property Reserve, Inc., or its agents pursuant to the Lease with
respect to Woodmark’s Plano, Texas location, which lease was assigned to
Coffman but without novation by such landlord.

10.              Obligations of Woodmark
owing to Distribution Funding II, LLC or its agent pursuant to the Lease with
respect to Woodmark’s Austell, Georgia location, which lease was assigned to
Coffman but without novation by such landlord.

 

Section 1.15.                           Schedule IV
[Existing Guarantees] to the Credit Agreement is hereby amended to add the
following at the end thereof:

 

Woodmark International, L.P.

 

Guaranty obligations of Woodmark described in
item 9 of Schedule III

 

Pacific Stair Products, Inc.

 

None

 

Section 1.16.                           Exhibit A
and Exhibit H to the Credit Agreement are each hereby amended in their
entirety and replaced with Exhibit A and Exhibit H, respectively,
attached to this Amendment.  Schedule A
and Schedule B attached hereto are hereby added as Schedule A and Schedule B to
the Credit Agreement.  Exhibit O
attached to this Amendment is hereby added as Exhibit O to the Credit
Agreement.

 

ARTICLE II.

Waiver and Consent.

 

The
Administrative Agent and the Lenders hereby (i) waive compliance with Sections
6.10, 7.04, Section 7.05, Section 7.06 and Section 7.12 of the
Credit Agreement solely in order to permit P&F, Woodmark and Pacific to
enter into and consummate the Coffman Transaction, including the formation of
Coffman as a wholly-owned subsidiary of P&F and the contribution and
transfer to Coffman by Woodmark, of the Woodmark Contributed Assets, and
Pacific, of the Pacific Contributed Assets and (ii) consent to the
consummation by Woodmark and Pacific of the Coffman Trnasaction, all subject to
the terms and conditions of the Coffman Documents.

 

ARTICLE III.

Conditions of Effectiveness, Additional Covenants.

 

Section 3.1.                                 This Amendment
and Waiver shall become effective as of the date hereof,

 

(a)                                  upon the
receipt and satisfactory review by the Lenders of (i) the closing
statement in the form attached hereto as Exhibit 1, duly executed by an
Executive Officer, and such financial information supporting the statements
made thereon that the Lenders may reasonably require and (ii) an amendment
and waiver fee of $30,000 for the pro-rata distribution to the Lenders; and

 

9

 

(b)                                 upon receipt by
the Administrative Agent of: (a)  this Amendment, duly executed by each
Co-Borrower; (b) an amended and restated Revolving Credit Note,
substantially in the form of Exhibit A attached hereto, duly executed by
each Co-Borrower in favor of each Lender; (c) Assignments of Notes, duly
executed by each of Woodmark and Pacific, each substantially in the form
attached hereto as Exhibit O, along with the original Coffman Notes
applicable to such Assignment of Notes, (d) an
Officer’s Certificate, in form and substance satisfactory to the Administrative
Agent, confirming that there have been no changes to each Co-Borrower’s governance
documents, authorizing each Co-Borrower to execute and deliver this Amendment
and Waiver, the amended and restated Revolving Credit Notes and the other
documents to be delivered in connection herewith and therewith and (e) copies
of the executed PNC Loan Agreement, the Coffman Contribution Agreements, the
Coffman Purchase Agreement and such other documents and agreements that the
Administrative Agent may reasonably request.

 

3.2.                              The Co-Borrower further
agree to deliver to the Administrative
Agent, as soon as possible, and in any event within seven (7) days of the
Amendment No. 19 Effective Date, a schedule prepared by the Chief
Financial Officer describing the net assets contributed by Woodmark and Pacific
to Coffman pursuant to the Contribution Agreements and the cash and notes
received by Woodmark and Pacific in connection therewith.

 

ARTICLE IV.

Representations and
Warranties; Effect on Credit Agreement.

 

Section 4.1.                                 Each
Co-Borrower hereby represents and warrants as follows:

 

a.                                       This Amendment and Waiver
and the Credit Agreement, as amended hereby, constitute legal, valid and
binding obligations of the Co-Borrowers and are enforceable against the
Co-Borrowers in accordance with their respective terms.

 

b.                                      Upon the effectiveness of
this Amendment and Waiver, the Co-Borrowers hereby reaffirm all covenants,
representations and warranties made in the Credit Agreement to the extent that
the same are not amended hereby and each Co-Borrower agrees that all such
covenants, representations and warranties shall be deemed to have been remade
as of the date hereof.

 

c.                                       No Default or Event of
Default has occurred and is continuing or would exist after giving effect to
this Amendment and Waiver.

 

d.                                      No Co-Borrower has any
defense, counterclaim or offset with respect to the Credit Agreement.

 

e.                                       All corporate and limited
partnership action of each Co-Borrower appropriate and necessary, including, if
necessary, resolutions of the Board of Directors of each of P&F, Florida
Pneumatic, Embassy, Green, Countrywide, Nationwide, Pacific, Continental,
Hy-Tech and WILP and resolutions of the general partner of Woodmark, to
authorize the execution, delivery and performance of this Amendment and Waiver,
has been taken.

 

Section 4.2.                                 Effect on
Credit Agreement and Loan Documents.

 

a.                                       Upon the effectiveness of
this Amendment and Waiver, each reference in the Credit Agreement to “this
Agreement”, “hereunder”, “hereof”, “herein” or words of like import shall mean
and be a reference to the Credit Agreement as amended hereby.

 

10

 

b.                                      Except as specifically
amended herein, the Credit Agreement, and all other documents, instruments and
agreements executed and/or delivered in connection therewith, shall remain in
full force and effect, and are hereby ratified and confirmed.

 

c.                                       Except as expressly provided
herein, the execution, delivery and effectiveness of this Amendment and Waiver
shall not operate as a waiver of any right, power or remedy of the
Administrative Agent or the Lenders, nor constitute a waiver of any provision
of the Credit Agreement, or any other documents, instruments or agreements
executed and/or delivered under or in connection therewith.

 

d.                                      The other Loan Documents and
all agreements, instruments and documents executed and delivered in connection
with the Credit Agreement and any other Loan Documents shall each be deemed to
be amended and supplemented hereby to the extent necessary, if any, to give
effect to the provisions of this Amendment and Waiver.

 

ARTICLE V.

Miscellaneous.

 

Section 5.1.                                   This Amendment
and Waiver shall be governed by and construed in accordance with the laws of
the State of New York.

 

Section 5.2.                                   Section headings in
this Amendment and Waiver are included herein for convenience of reference only
and shall not constitute a part of this Amendment and Waiver for any other
purpose.

 

Section 5.3.                                   This Amendment and Waiver
may be executed in one or more counterparts, each of which shall constitute an
original, and all of which, taken together, shall be deemed to constitute one
and the same agreement.

 

[next page is signature page]

 

11

 

IN WITNESS
WHEREOF, the Co-Borrowers, the Lenders and the Administrative Agent have
caused this Amendment and Waiver to be duly executed by their duly authorized
officers as of the day and year first above written.

 

	
   

  	
  P&F INDUSTRIES, INC.

  
	
   

  	
  FLORIDA PNEUMATIC MANUFACTURING

  CORPORATION

  
	
   

  	
  EMBASSY INDUSTRIES, INC. 

  GREEN MANUFACTURING, INC.

  
	
   

  	
  COUNTRYWIDE HARDWARE, INC. 

  NATIONWIDE INDUSTRIES, INC.

  
	
   

  	
  WOODMARK INTERNATIONAL, L.P.

  
	
   

  	
  By: 

  	
  Countrywide Hardware, Inc., its General

  
	
   

  	
   

  	
  Partner

  
	
   

  	
  PACIFIC STAIR PRODUCTS, INC.

  
	
   

  	
  WILP HOLDINGS, INC.

  
	
   

  	
  CONTINENTAL TOOL GROUP, INC.

  
	
   

  	
  HY-TECH MACHINE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Joseph A. Molino, Jr.

  
	
   

  	
   

  	
  Joseph A. Molino, Jr., the Vice President of each of the
  corporations named above

  
	
   

  	
   

  
	
   

  	
   

  
	
  Revolving Credit Commitment:

  	
  CITIBANK, N.A., as a Lender and as
  Administrative

  
	
   

  	
  Agent

  
	
  (a)                                  For the
  period from the Amendment

  	
   

  
	
                                                  No. 19
  Effective Date through 8/30/09:

  	
   

  
	
                                                  $13,455,000

  	
   

  
	
  (b)                                 8/31/09 and
  thereafter: $12,610,000  

  	
  By: 

  	
  /s/ Stephen Kelly

  
	
   

  	
   

  	
  Stephen Kelly, Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
  Revolving Credit Commitment:

  	
  HSBC BANK USA, NATIONAL ASSOCIATION, as

  
	
   

  	
  a Lender

  
	
  (a)                                For the
  period from the Amendment

  	
   

  
	
                                                  No. 19
  Effective Date through 8/30/09:

  	
   

  
	
                                                  $7,245,000

  	
   

  
	
  (b)                                 8/31/09 and
  thereafter: $6,790,000  

  	
  By:  

  	
  /s/ Gary Sarro

  
	
   

  	
   

  	
  Gary Sarro, First Vice
  President

  
						

 

12

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