Exhibit 10.1
AMENDMENT NO. 20 AND WAIVER
TO
CREDIT AGREEMENT
THIS AMENDMENT NO. 20 AND
WAIVER, dated as of
August 27, 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
A.
The Co-Borrowers, the Lenders and
the Administrative Agent are parties to that certain Credit
Agreement pursuant to which the Administrative Agent and the
Lenders provided funding and financial accommodations to the
Co-Borrowers, the terms and conditions of which are more fully and
particularly set forth in the Credit Agreement and the other Loan
Documents delivered in connection therewith. Capitalized
terms used but not defined herein shall have the meanings given to
such terms in the Credit Agreement.
B.
The obligations of the Co-Borrowers
to the Administrative Agent and the Lenders under the Credit
Agreement and the other Loan Documents are secured by security
interests and liens on their respective property as more fully and
particularly set forth in the Security Documents.
C.
The Co-Borrowers advised the
Administrative Agent and the Lenders, which notice was confirmed by
Letter dated August 10, 2009, that the Co-Borrowers were not
in compliance with the financial covenants set forth in
Section 7.13(b), (c) and (e) of the Credit
Agreement for the fiscal period ended June 30, 2009
(collectively, the “ Specified Events of Default
”).
D.
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.
E.
The waivers and amendments
contemplated hereby shall remain in effect for a period beginning
on the date hereof and ending on the date (the “Waiver End
Date”) whichever is the earlier date of
(i) 5:00 p.m. on October 26, 2009, (ii) the
date on which there shall be any Event of Default under the Loan
Documents (other than the Specified Events of Default),
(iii) the date on which the Co-Borrowers, the Administrative
Agent and the Lenders shall have entered into an amended and
restated Credit Agreement which provides for a full dominion and
control “asset-based” loan facility, on terms and
conditions satisfactory to the Administrative Agent and the
Lenders, and (iv) the date upon which any of the Co-Borrowers
shall have failed to comply or failed to remain in compliance with
any terms, covenants or conditions under this Agreement. In
connection with clause (iii), the Co-Borrowers understand
and
1
agree that the execution and delivery of an
amended and restated Credit Agreement will be subject to
satisfaction of all conditions precedent as are customarily
required in connection with asset based credit facilities,
including without limitation delivery of satisfactory inventory and
equipment appraisals to the Administrative Agent and the
Lenders.
NOW, THEREFORE, in consideration of
the terms herein contained and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
mutually acknowledge, the Co-Borrowers, the Administrative Agent
and the Lenders (collectively, the “ Parties ”)
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) 2.50%, with respect to
Revolving Credit Loans that are Prime Rate Loans)and
(b) 4.25%, with respect to Revolving Credit Loans that are
LIBOR Loans; for purposes of Section 3.01 hereof, such margin
in “(a)” is hereinafter a “Prime Rate
Margin” and such margin in “(b)” is hereinafter a
“LIBOR Margin”.
“Applicable Additional Term
Loan Margin” shall mean (a) 2.50%, with respect to
Additional Term Loans that are Prime Rate Loans and (b) 4.50%,
with respect to Additional Term Loans that are LIBOR Loans; for
purposes of Section 3.01 hereof, such margin in
“(a)” is hereinafter a “Prime Rate Margin”
and such margin in “(b)” is hereinafter a “LIBOR
Margin.
“Reserve Adjusted Libor”
shall mean with respect to the Interest Period pertaining to a
LIBOR Loan, the greater of (x) the rate per annum equal to the
product (rounded upwards to the next higher 1/100 of one percent)
of (a) the annual rate of interest at which Dollar deposits of
an amount comparable to the amount of the portion of the LIBOR Loan
allocable to the entity which is the Administrative Agent and for a
period equal to the Interest Period applicable thereto which appear
on Telerate Page 3750 at approximately 11:00 a.m. (London
time) on the second Business Day prior to the commencement of such
Interest Period, multiplied by (b) the Eurocurrency Reserve
Requirement and (y) one percent (1.0%).
Section 1.02.
Section 6.03(b)(ii) of the
Credit Agreement is hereby amended and restated to provide in its
entirety as follows:
“(ii)
as soon as available, but in any
event not later than 20 days after the end of ea
