0001162893-12-000007.txt : 20120724 0001162893-12-000007.hdr.sgml : 20120724 20120724093320 ACCESSION NUMBER: 0001162893-12-000007 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20120724 DATE AS OF CHANGE: 20120724 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: STABOSZ TIMOTHY J CENTRAL INDEX KEY: 0001162893 FILING VALUES: FORM TYPE: SC 13D/A MAIL ADDRESS: STREET 1: 1307 MONROE STREET CITY: LA PORTE STATE: IN ZIP: 46350 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: P&F INDUSTRIES INC CENTRAL INDEX KEY: 0000075340 STANDARD INDUSTRIAL CLASSIFICATION: METALWORKING MACHINERY & EQUIPMENT [3540] IRS NUMBER: 221657413 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-39826 FILM NUMBER: 12975723 BUSINESS ADDRESS: STREET 1: 445 BROADHOLLOW ROAD CITY: MELVILLE STATE: NY ZIP: 11747 BUSINESS PHONE: (631)694-9800 MAIL ADDRESS: STREET 1: 445 BROADHOLLOW ROAD CITY: MELVILLE STATE: NY ZIP: 11747 FORMER COMPANY: FORMER CONFORMED NAME: PLASTICS & FIBERS INC DATE OF NAME CHANGE: 19671225 SC 13D/A 1 pf13d15.txt STABOSZ 13D AMENDMENT NUMBER 9 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D (AMENDMENT NO. 9) Under the Securities Exchange Act of 1934 P&F INDUSTRIES, INC. ------------------------------------------------------------------------------- (Name of issuer) COMMON STOCK ------------------------------------------------------------------------------- (Title of class of securities) 692830508 -------------------------------------------------------- (CUSIP number) TIMOTHY J. STABOSZ, 1307 MONROE STREET, LAPORTE, IN 46350 (219) 324-5087 ------------------------------------------------------------------------------- (Name, address and telephone number of person authorized to receive notices and communications) JULY 9, 2012 -------------------------------------------------------- (Date of event which requires filing of this statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. [_] The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). CUSIP No. 692830508 -------------------------------------------------------------------------------- 1. Name of Reporting Person TIMOTHY JOHN STABOSZ -------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (See Instructions) (a) [_] NOT APPLICABLE (b) [_] -------------------------------------------------------------------------------- 3. SEC Use Only -------------------------------------------------------------------------------- 4. Source of Funds (See Instructions) PF -------------------------------------------------------------------------------- 5. Check Box If Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [_] -------------------------------------------------------------------------------- 6. Citizenship or Place of Organization UNITED STATES -------------------------------------------------------------------------------- Number of (7) Sole Voting Power 196,369 Shares ____________________________________________ Beneficially (8) Shared Voting Power 0 Owned by ____________________________________________ Each (9) Sole Dispositive Power 196,369 Reporting ____________________________________________ Person With (10) Shared Dispositive Power 0 -------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned 196,369 by each Reporting Person -------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes [_] Certain Shares -------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11) 5.4% -------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions) IN -------------------------------------------------------------------------------- ITEM 3. Source and Amount of Funds or Other Consideration Item 3 is hereby amended and restated to read as follows: Personal funds in the aggregate amount of $427,500.11 have been used to effect the purchases. No part of the purchase price represents borrowed funds. ITEM 4. Purpose of Transaction Item 4 is hereby amended to add the following: With the filing of this Amendment #9, respondent reports a decrease in his ownership position in the company's common stock to 5.4%, from the 7.1% previously reported in Amendment #8, on May 16, 2012. The respondent's sales primarily reflect his current view of the opportunity cost of owning P&F, relative to a number of alternative investments he deems as more deeply undervalued. In addition, on or about June 15, 2012, the respondent approached the company's board of directors, putting out "feelers" to see if the company would be interested in acquiring some or all of his share position ("the Stabosz block"), at a price of $5 per share. At the time of making the proposal, the respondent was hopeful that it would be received by the board on a largely unconditional basis, based upon the discount to book value the purchase price represented, and the fact that the respondent believed, in good faith, that such a purchase would be accretive to the company's other stockholders. On June 20th, the respondent received, via e-mail, a draft proposed purchase agreement, from the company's general counsel (see Exhibit #1). In a subsequent discussion with the company's outside counsel, the respondent was informed that, among other things: 1) the board would only be interested in purchasing the block on an "all or none" basis, at the $5 price, and 2) per the draft proposal, there would be a condition requiring the respondent, and his affiliates, to refrain from owning shares in the company for a period of 3 years subsequent (the "standstill" or "stay away" provision). After reviewing the draft proposal for a few days, on June 25th, the respondent e-mailed (see Exhibit #2) the company's outside counsel (and board of directors), indicating his unwillingness to accept the terms, as specified in the draft proposal. At that time, discussions with the company on a possible acquisition of the Stabosz block were terminated. The respondent emphasizes that if the company views its own common stock as an attractive investment, the board should revisit the respondent's ongoing request (as filed under Regulation 13D) that they conduct a "Dutch Tender," or some other kind of tender offer...rather than create the unseemly impression that the only shares they are willing to buy back are those of an outside activist...and that they are only willing to buy them back, for the express purpose of SILENCING said activist. As the respondent states in his Exhibit #2 e-mail, he considers such a position to be immoral, if not despicable...as well as solid evidence that the P&F board, collectively, continues to lack self-respect and independence. Respondent believes that the board as a whole, instead, continues to be primarily loyal to the personal, pecuniary, and power needs of a CEO who has manifestly failed to create value in his 15+ year tenure. Respondent may increase or decrease his ownership position in P&F's common stock in the future, based upon respondent's trading, investing, diversification, margin, arbitrage, or other needs and purposes. ITEM 5. Interest in Securities of the Issuer Item 5 is hereby amended and restated to read as follows: At the close of business on July 23, 2012, respondent has sole voting and dispositive power over 196,369 shares of P&F Industries, Inc.'s common stock. According to the Company's latest Form 10-Q filing, as of May 11, 2012, there were 3,616,562 common shares outstanding. Respondent is therefore deemed to own 5.4% of the Company's common stock. Transactions effected by the respondent since May 8, 2012, were performed in ordinary brokerage transactions, and are indicated as follows: 05/23/12 sold 2500 shares at $4.48 05/30/12 sold 100 shares at $4.69 05/31/12 sold 2476 shares at $4.67 06/01/12 sold 268 shares at $4.59 06/04/12 sold 2579 shares at $4.299 06/11/12 sold 277 shares at $4.59 06/19/12 sold 1303 shares at $4.59 06/25/12 sold 10,952 shares at $5.005 06/26/12 sold 846 shares at $5.00 06/28/12 sold 7259 shares at $4.866 06/29/12 sold 500 shares at $5.10 07/03/12 sold 100 shares at $5.22 07/05/12 sold 2400 shares at $5.25 07/06/12 sold 840 shares at $5.25 07/09/12 sold 6660 shares at $5.526 07/10/12 sold 2352 shares at $5.65 07/11/12 sold 2500 shares at $5.73 07/12/12 sold 1632 shares at $5.73 07/13/12 sold 200 shares at $5.73 07/18/12 sold 11,502 shares at $5.574 07/19/12 sold 100 shares at $5.73 07/20/12 sold 3736 shares at $5.556 ITEM 7. Material to be Filed as Exhibits Exhibit #1: P&F's proposal to purchase the Stabosz block at $5 per share, received on June 20, 2012. Exhibit #2: E-mail dated June 25, 2012 from Stabosz to P&F's outside counsel (and board of directors), indicating his refusal to sign a buyback under terms proposed by P&F's board that involve what Stabosz viewed as "buying his silence." SIGNATURES After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Date 07/24/12 Signature Timothy J. Stabosz Name/Title Timothy J. Stabosz, Private Investor EX-1 2 tjspfin.txt P&F DRAFT PROPOSAL TO PURCHASE STABOSZ'S P&F SHARES PURCHASE AGREEMENT This PURCHASE AGREEMENT (this "Agreement") is made and entered into as of June ___, 2012 by and among 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) an aggregate number of Company Shares having an aggregate purchase price of $_____________ (the "Purchase Price") as set forth herein. 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, [257,451] 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 [$5.00] (the "Purchase Price"), for an aggregate price of $______________ in cash. 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. The consummation of the transactions contemplated by this Agreement (the "Closing") shall take place at 10:00 a.m., local time, on June _____, 2012 at the offices of the Company or at such other place, date or time as the parties may agree in writing (the " Closing Date"); provided that the Company's obligations to consummate the transactions contemplated by this Agreement shall be conditioned on (a) 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, and (b) 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. Section 1.5 Closing Deliveries. (a) At the Closing, in accordance with Section 1.2, the Company shall deliver or cause to be delivered to Seller the following: (i) 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) At the Closing, Seller shall deliver or cause to be delivered to the Company the following: (i) certificates representing [5,000] of the Purchased Shares duly and validly endorsed or accompanied by stock powers duly and validly executed in blank and sufficient to convey to the Company good, valid and marketable title in and to the Purchased Shares, free and clear of any and all Liens; and (ii) delivery of [250,451] of the 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. 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 of the Closing Date (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. (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). 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. (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). 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. (b) Promptly following the date hereof, Seller will cause to be filed with the Securities and Exchange Commission an amendment to its Schedule 13D filed on _________________ 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. 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 [257,451] 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. (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. 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: 443 Broadhollow Road, Suite 100 Melville, NY 11747 Attention: Richard B. Goodman Telecopy #: (631) 775-4223 If to Seller: 1307 Monroe Street LaPorte, Indiana 46350 Telecopy #: 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. 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. 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]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:__________________________ Name: DWAC Instructions: Broker Name: DTC Number: Account Number: TIMOTHY J. STABOSZ EXHIBIT A Form of Press Release P&F Industries Inc. Announces Stock Repurchase Agreement P&F Industries Inc. (Nasdaq: PFIN, the "Company") today announced it has entered into an agreement whereby the Company will repurchase [257,451] of its common shares from Timothy J Stabosz in a privately negotiated transaction at [$5] per share for a total purchase price of $___________. Richard Horowitz, Chairman and Chief Executive Officer of the Company, commented, "This transaction enables us to make attractive use of our capital to acquire a meaningful block of Company shares at a favorable price. The repurchase should be immediately accretive to earnings per share." The repurchase is expected to close in the next several days. Pursuant to the purchase agreement, Mr. Stabosz will be bound by a three-year standstill provision. [P&F tag] Except for historical information contained herein, statements in the release are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause the Company's actual results in future periods to differ materially from forecasted results. Those risks include, but are not limited to, risks associated with pricing, volume, cash flow guidance, fluctuations in exchange rates and conditions of markets. Those and other risks are described in the Company's filings with the Securities and Exchange Commission (the "SEC") over the last 12 months, copies of which are available from the SEC or may be obtained from the Company. EX-2 3 email.txt STABOSZ E-MAIL TO P&F REFUSING TO ACCEDE TO DRAFT PROPOSAL'S TERMS E-mail dated June 25, 2012 to P&F's outside counsel Steve Kuperschmid (and to the P&F Board of directors). [corrected for spelling and grammar] Steve, I've decided I'm not going to do any deal that involves a standstill. However high the opportunity cost is for me, it's wrong for my self-respect. And it's also wrong for the P&F board's self-respect. I'm, frankly, flabbergasted that the board would be comfortable with how it would negatively reflect on its image, considering everything that has gone on the last 2 1/2 years, to make what would have otherwise been an opportunistic buyback into what smacks of a payment of "greenmail." I'm not going to countenance such a thing, or be associated with it. The board needed to decide whether or not the purchase of a large block, in its own right, is objectively beneficial for the company's broader shareholder base, not whether "we can get this guy to stay away." (Wasn't getting "this guy" out of a 7% stake in the company enough for Richard and his cronies? Do we really have to be shameless about it...especially considering how much my efforts have HELPED P&F in improving its governance?) As it stands now, I can only assume that the board's PRIMARY interest (with the exception of perhaps 3 members) is not to buy back a block of stock and add to shareholder value...but to buy my silence, and get things back to "letting Richard have his company back." Personally, I find that disquieting and despicable...with the result being that instead of doing an amicable deal, you "force" me into a position of having to keep my stock, to defend a moral high ground. I simply cannot cut all of the little shareholders loose, based upon what the board's stance about buying back my shares evidences about the overall INDEPENDENCE of the board. In that sense, this whole effort has been useful, and REVELATORY. (Should I be surprised? It only validates everything I've been saying about this board, collectively, in all of my filings and press releases.) I'm sorry we couldn't come to terms where I could feel clean. I suggest you follow my original 13D suggestion, and the board get off its butt, and buy back common stock in the open market, or do a tender offer. (Also, please ask Messrs. Solomon, Goldberg, Scheriff, and Franklin, to get off their butts, and buy stock in the open market, for their own accounts, to validate that they do not sit on this board merely as a favor to Richard Horowitz.) If it would add value buying back my 7% at $5, it would add value buying back anyone else's. And buying back stock, as I have said INNUMERABLE times, is almost certainly better than letting Richard make another acquisition. While this is an idle speculation, and not a "plan or proposal," you could probably buy back a million shares, over the next couple years, based upon my expectation of the company's profits, and add immeasurably to value. Then Richard could take it private...at a fair price....which is what a self-respecting independent board would have "forced" him to do (or sold the company out from under him), at least 10 years ago. As it stands now, I will continue to be a witness to P&F's dysfunctional (albeit markedly improved) governance and oversight. I do appreciate the mutual good faith in exploring selling my shares to the company. I just find the terms morally reprehensible, as well as the board's willingness to entertain such terms. Timothy Stabosz