On June 10, 2009, pursuant to an Asset Purchase Agreement dated as of June 8, 2009 (the "Asset Purchase Agreement"), WM Coffman LLC, a Delaware limited liability company ("Purchaser") and an indirect subsidiary of P & F Industries, Inc. (the "Company"), acquired substantially all of the assets (the "Assets") of Coffman Stairs, LLC, a Delaware limited liability company ("Seller"). The purchase price consisted of $4,528,098.36 payable in cash, $3,971,901.64 in principal pursuant to a promissory note, dated June 8, 2009, made payable by Purchaser to the order of Seller (the "Seller Note") and the assumption of certain payables, liabilities and obligations. Subject to certain conditions, Purchaser also agreed to pay to Seller certain additional contingent payments based upon the financial performance of the Purchaser's business and certain other factors described in the Asset Purchase Agreement. The Assets were used by the Seller in the business of manufacturing and/or selling interior wood and iron stair components throughout the United States.

Interest on the unpaid principal balance of the Seller Note accrues (1) from June 8, 2009 until the Maturity Date (as defined below), at the rate of six and one-half percent (6.5%) per annum, (2) from and after the Maturity Date, or during the continuance of an Event of Default (as defined in the Seller Note), at the rate set forth in (1) plus two percent (2%), or (3) if less than the rates applicable under (1) and (2), the maximum rate permitted by law. The principal amount and accrued interest due pursuant to the Seller Note is payable on the date (the "Maturity Date") that is the latter of (1) the last day of the Contingency Period (as defined in the Asset Purchase Agreement) or (2) the earlier of (a) the date that is three (3) years and ninety (90) days after the date of the Seller Note or (b) the date that all obligations under the Loan Agreement (as defined below) are satisfied in full. Pursuant to the terms of the Seller Note, all obligations under the Seller Note are subject to the terms of a Subordination Agreement, dated as of June 8, 2009, among Purchaser, Seller and PNC Bank, National Association ("PNC").

Contemporaneously with the execution and delivery of the Asset Purchase Agreement, Purchaser and Seller entered into an Assignment and Assumption of Lease Agreement dated as of June 8, 2009 (the "Assignment and Assumption Agreement"). Pursuant to the Assignment and Assumption Agreement, Seller transferred, conveyed and assigned to Purchaser all of its right, title and interest, as tenant, in, to and under, and Purchaser assumed all rights, obligations and liabilities of Seller under, that certain Lease Agreement, dated as of March 30, 2007, by and between AGNL Coffman, L.L.C., as landlord ("AGNL"), and Seller and Visador Holding

Corporation ("Visador"), jointly and severally, as tenant (the "Lease Agreement"), for the lease of certain real property located in Marion, Virginia (the "Leased Premises"). The Lease Agreement provides for (1) an expiration date of March 30, 2027, unless all monies owed under the Lease Agreement are not paid by March 30, 2027, in which case AGNL may extend the term until the date that such monies are paid and (2) a basic rent of $580,000 per annum, payable quarterly in advance on July 1st, October 1 st , January 1 st and April 1 st , in equal installments of $145,000 and at such additional rent as is set forth in the Lease Agreement, including, but not limited to, all costs of landlord and tenant incurred in connection with the ownership, use and maintenance of the Leased Premises. Further, Purchaser entered into a First Amendment to Lease Agreement, dated as of June 8, 2009 (the "First Amendment"), which First Amendment provides for (1) Purchaser to become the tenant under the Lease Agreement, (2) Purchaser posting with the landlord a security deposit in the amount of $100,000, and (3) modifications to certain definitions and covenants in the Lease Agreement.

Contemporaneously with the execution and delivery of the Asset Purchase Agreement, Purchaser also entered into a Management Agreement with Visador (the "Visador Management Agreement"), pursuant to which Purchaser agreed to pay an advisory fee to Visador in exchange for Visador providing consulting and advisory services to the Purchaser during the Contingency Period, as follows:
(a) $0 for the year commencing June 8, 2009 and ending on June 7, 2010 (the "First Year"), provided, however, that if that certain Consulting Agreement (as defined in the Visador Management Agreement), is not terminated by Visador for any reason or by Purchaser for Cause (as defined in the Visador Management Agreement) (a "Smith Termination") during said year, then the advisory fee for the First Year shall be $200,000, (b) $0 for the year commencing on June 8, 2010 and ending on June 7, 2011 (the "Second Year"), provided, however, that if there is no Smith Termination during the First Year, and there is no Smith Termination during the Second Year, then the advisory fee for the Second Year shall be $300,000, and (c) $250,000 for each year thereafter that the Visador Management Agreement remains in full force and effect.

Further, contemporaneously with the execution and delivery of the Asset Purchase Agreement, Purchaser's members, Woodmark International, L.P. ("Woodmark") and Pacific Stair Products, Inc. ("PSP"), contributed to Purchaser certain assets of Woodmark and PSP, respectively, subject to Purchaser's assumption of certain liabilities and obligations of each of Woodmark and PSP (the "Asset Contribution"). In addition, Woodmark and PSP entered into certain agreements with Purchaser, effectively transferring the Company's stair parts business to Purchaser.

On June 10, 2009, Purchaser entered into a Revolving Credit, Term Loan and Security Agreement, dated as of June 8, 2009 (the "Loan Agreement"), among Purchaser, the Lenders (as defined in the Loan Agreement) and PNC Bank, as agent for Lenders, pursuant to which Purchaser may receive loans from PNC Bank in the aggregate principal amount of $12,000,000 (the "Loans"), to be used for, among other things, the purchase of the Assets of Seller.

Pursuant to a Reimbursement Agreement, dated as of June 8, 2009 (the "Reimbursement Agreement"), Purchaser (1) requested that Richard Horowitz, President and Chief Executive Officer, and a principal stockholder, of the Company ("Horowitz"), cause New York Commercial Bank ("NYCB") to issue to PNC Bank two letters of credit (each a "Letter of Credit" and collectively, the "Letters of Credit"), each in the amount of $145,000, terminating on the earliest of (a) 5:00 p.m. eastern time on June 30, 2010 for one Letter of Credit and September 30, 2010 for the other Letter of Credit, or if not a business day, the next following business day, (b) the date on which there has been a drawing,
(c) the day upon which a substitute letter of credit becomes effective, or
(d) the date a Letter of Credit shall be delivered to NYCB for cancellation as set forth in the Loan Agreement and (2) agreed that any drawing under the Letters of Credit that results in Horowitz being liable to NYCB for the amount of such draw shall be converted into a loan from Horowitz to Purchaser and evidenced by a note issued by Purchaser to the order of Horowitz (the "Letter of Credit Note"), bearing interest at the rate of six and one half percent (6.5%) from the date of the Letter of Credit Note to its maturity. Kenneth M. Scheriff, a member of the board of directors of the Company, is an Executive Vice President of NYCB.

In connection with the Loan Agreement, Purchaser executed and delivered to PNC Bank a Term Note, dated June 8, 2009, in the original principal amount of $1,134,000 (the "Term Note") and a Revolving Credit Note, dated June 8, 2009, in the original principal amount of $10,866,000 (the "Revolving Credit Note") evidencing Purchaser's obligation to repay the Loans. The principal on the Term Note is payable in twenty-four (24) equal monthly installments of $47,250, commencing on July 1, 2009. The interest on the Term Note accrues at either the Alternate Base Rate (as defined in the Loan Agreement) ("ABR") plus the applicable margin or at 1, 2 or 3 month LIBOR plus the applicable margin
("LIBOR"), and said interest is payable monthly in arrears on the first (1 st )
business day of each month for ABR borrowings and at the end of the applicable interest period for LIBOR borrowings. The Revolving Advances (as defined in the Loan Agreement) in connection with the Revolving Credit Note are available for borrowing until the Revolving Credit Note matures on July 1, 2012, subject to a borrowing base as set forth in the Loan Agreement. The interest on the Revolving Credit Note accrues at either the ABR plus the applicable margin or at 1, 2 or 3 month LIBOR plus the applicable margin, and said interest is payable monthly in arrears on the first (1 st ) business day of each month for ABR borrowings and at the end of the applicable interest period for LIBOR borrowings. The amount of Advances (as defined in the Loan Agreement) drawn by Purchaser as of June 8, 2009 was $6,176,214, consisting of the $1,134,000 Term Note and Revolving Advances of $5,042,214.

Contemporaneously with the execution and delivery of this Asset Purchase Agreement, Purchaser also executed and delivered to Citibank, N.A. ("Citibank") and HSBC Bank USA, National Association ("HSBC") (collectively, the "Lenders") Amendment No. 19 and Waiver to Credit Agreement ("Amendment"), which modified the Credit Agreement, dated June 30, 2004, as previously amended (the "Credit Agreement"), by and among the Company, the Lenders, Citibank, as Administrative Agent, and the following subsidiaries of the Company: Florida Pneumatic Manufacturing Corporation, Embassy Industries, Inc., Green

Manufacturing, Inc., Countrywide Hardware, Inc., Nationwide Industries, Inc., Woodmark, PSP, WILP Holdings, Inc., Continental Tool Group, Inc. and Hy-Tech Machine, Inc. (collectively, the "Co-Borrowers"). The Amendment, among other things, (1) amended the margins on the Revolving Credit Loans and Additional Term Loans priced as LIBOR Loans (as such terms are defined in the Credit Agreement); (2) revised certain financial covenants, the borrowing base and related definitions; and (3) waived compliance with certain negative covenants to permit the Company, Woodmark and PSP to consummate the Asset Contribution. The Amendment also replaced the previously existing revolving loan notes, that provided for an aggregate principal amount of up to $22,000,000, with new revolving loan notes that provide for an aggregate principal amount of up to $20,700,000 (one payable to Citibank in the principal amount of $13,455,000 (the "Fourth Amended and Restated Citibank Note") and the other payable to HSBC in the principal amount of $7,245,000 (the "Fourth Amended and Restated HSBC Note")). The Amendment further provided that the maximum Revolving Credit loans will be further reduced on August 31, 2009 to an aggregate principal amount of $19,400,000 ($12,610,000 in respect of Citibank and $6,790,000 in respect of HSBC).

The descriptions of the Asset Purchase Agreement, the Seller Note, the Assignment and Assumption Agreement, the Visador Management Agreement, the Lease Agreement, the First Amendment, the Loan Agreement, the Reimbursement Agreement, the Term Note, the Revolving Credit Note, the Amendment, the Fourth Amended and Restated Citibank Note and the Fourth Amended and Restated HSBC Note are qualified in their entirety by reference to the Asset Purchase Agreement, the Seller Note, the Assignment and Assumption Agreement, the Visador Management Agreement, the Lease Agreement, the First Amendment, the Loan Agreement, the Reimbursement Agreement, the Term Note, the Revolving Credit Note, the Amendment, the Fourth Amended and Restated Citibank Note and the Fourth Amended and Restated HSBC Note filed hereto as Exhibits 2.1, 2.2, 2.3, 2.4, 10.1, 10.2, 10.3, 10.4, 10.5, 10.6, 10.7, 10.8 and 10.9, respectively. On June 10, 2009, the Company issued a press release (the "Press Release") announcing the entering into of the Asset Purchase Agreement described herein. A copy of the Press Release is furnished as Exhibit 99.1 hereto.

(a) Financial Statements of Businesses Acquired.

The audited balance sheets of Seller as of December 27, 2008 and December 29, 2007, and the related statements of income and cash flows for the years ended December 27, 2008 and December 29, 2007, are included herein.

The unaudited balance sheet of the Seller as of June 8, 2009 and the related unaudited statements of income and cash flows for the periods from December 28, 2008 through June 8, 2009 and December 30, 2007 through June 28, 2008, are included herein.

(b) Pro forma Financial Information.

The unaudited pro forma combined condensed statements of income of P&F Industries, Inc. and its subsidiaries (collectively referred to as the "Company") and the Seller for the six months ended June 30, 2009, and for the year ended December 31, 2008, are included herein.

Item 9.01. Financial Statements and Exhibits

(a) Financial Statements of Businesses Acquired. - Audited Financial Statements

Coffman Stairs, LLC

(A wholly owned subsidiary of Visador Holding Corporation)

Index

December 27, 2008 and December 29, 2007

Contents

Report of Independent Auditors

Financial Statements

Balance Sheets

Statements of Operations

Statements of Changes in Members' Equity

Statements of Cash Flows

Notes to Financial Statements

To the Board of Directors and Shareholder of Coffman Stairs, LLC, a wholly owned subsidiary of Visador Holding Corporation

In our opinion, the accompanying balance sheets and the related statements of operations, changes in member's equity and cash flows present fairly, in all material respects, the financial position of Coffman Stairs, LLC (the "Company") at December 27, 2008 and December 29, 2007, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As discussed in Note 12, substantially all of the Company's assets and liabilities were sold to a third party on June 8, 2009.

/s/ PricewaterhouseCoopers LLP

April 6, 2009, except for Note 12, as to which the date is June 8, 2009

Coffman Stairs, LLC

(A wholly owned subsidiary of Visador Holding Corporation)

Balance Sheets

December 27, 2008 and December 29, 2007



                                                                2008            2007

Assets
Current assets
Cash                                                        $        800    $        750
Trade accounts receivable, net of allowance for doubtful
accounts of $84,000 and $111,000                               1,324,251       3,079,036
Inventories                                                    9,532,229      10,394,597
Deferred income taxes                                            390,041         307,614
Prepaid expenses and other current assets                        357,013       1,437,908
Total current assets                                          11,604,334      15,219,905
Property and equipment, net                                    2,628,232       3,316,491
Intangibles, net                                               3,042,763      11,504,849
Debt issue costs, net of accumulated amortization of
$1,012,000 and $521,000                                          158,289         478,395
Other long-term assets                                           488,305       1,576,739
Total assets                                                $ 17,921,923    $ 32,096,379

Liabilities and Members' Equity
Current liabilities
Cash overdraft                                              $    152,879    $     33,872
Current portion of long-term debt                              8,210,450      10,815,553
Trade accounts payable                                         3,303,604       3,498,940
Accrued salaries and commissions                                 506,357         673,563
Other accrued expenses                                           615,905       1,083,885
Total current liabilities                                     12,789,195      16,105,813

Other liabilities                                                343,652         310,248
Long-term debt, less current portion above                        76,600       9,861,964
Deferred income taxes                                            407,417       2,456,330
Redeemable stock warrant                                               -         934,846
Total liabilities                                             13,616,864      29,669,201
Commitments and contingencies (Note 9)

Members' equity
Members' capital                                              21,217,629      33,072,884
Related party receivable                                     (16,912,570 )   (30,645,706 )
Total members' equity                                          4,305,059       2,427,178
Total liabilities and members' equity                       $ 17,921,923    $ 32,096,379

The accompanying notes are an integral part of these financial statements.

Coffman Stairs, LLC

(A wholly owned subsidiary of Visador Holding Corporation)

Statements of Operations

Years Ended December 27, 2008 and December 29, 2007



                                                     2008            2007

Sales                                            $  27,521,442   $ 40,667,215
Cost of goods sold                                  25,285,658     34,722,856
Gross profit                                         2,235,784      5,944,359
Selling, general and administrative expenses         5,330,000      7,237,906
Loss on extinguishment of subordinated debt          1,147,572              -
Impairment of intangible and long-lived assets       8,571,291      4,397,964
Loss from operations                               (12,813,079 )   (5,691,511 )
Other expense
Interest expense, net                                1,170,818      2,503,655
Loss before income taxes                           (13,983,897 )   (8,195,166 )
Income tax benefit                                  (2,128,642 )       (9,815 )
Net loss                                         $ (11,855,255 ) $ (8,185,351 )

The accompanying notes are an integral part of these financial statements.

Coffman Stairs, LLC

(A wholly owned subsidiary of Visador Holding Corporation)

Statements of Changes in Members' Equity

Years Ended December 27, 2008 and December 29, 2007



                                                       Related
                                       Members'         Party
                                       Capital       Receivable        Total

Balances, January 1, 2007            $ 41,258,235   $ (30,120,555 ) $ 11,137,680
Net loss                               (8,185,351 )             -     (8,185,351 )
Change in related party receivable              -        (525,151 )     (525,151 )
Balances, December 29, 2007            33,072,884     (30,645,706 )    2,427,178
Net loss                              (11,855,255 )             -    (11,855,255 )
Change in related party receivable              -      13,733,136     13,733,136
Balances, December 27, 2008          $ 21,217,629   $ (16,912,570 ) $  4,305,059

The accompanying notes are an integral part of these financial statements.

Coffman Stairs, LLC

(A wholly owned subsidiary of Visador Holding Corporation)

Statements of Cash Flows

Years Ended December 27, 2008 and December 29, 2007



                                                                2008             2007

Cash flows from operating activities
Net loss                                                    $ (11,855,255 )  $ (8,185,351 )
Adjustments to reconcile net loss to net cash provided
by (used in) operating activities
Depreciation                                                      599,887         673,158
Amortization                                                      764,767         656,751
Stock compensation expense                                         58,461          69,058
Loss on extinguishment of subordinated debt                     1,147,572               -
Deferred gain on sale leaseback transaction                       (12,529 )             -
Impairment of intangible and long-lived assets                  8,571,291       4,397,964
Deferred income taxes                                          (2,131,340 )      (415,008 )
Paid-in kind interest                                              76,392         200,899
Loss (gain) on sale of property and equipment                       1,256          (9,395 )
Changes in operating assets and liabilities, net
Trade accounts receivable                                       1,754,785        (219,683 )
Inventories                                                     1,104,868         579,312
Related party receivable                                        1,798,160        (525,151 )
Prepaid expenses and other current assets                       1,080,895      (1,125,384 )
Other long-term assets                                            845,934        (182,687 )
Trade accounts payable                                           (195,336 )    (1,451,178 )
Accrued and other liabilities                                    (647,716 )       547,347
Net cash provided by (used in) operating activities             2,962,092      (4,989,348 )

Cash flows from investing activities
Capital expenditures                                             (215,237 )      (338,255 )
Net cash used in investing activities                            (215,237 )      (338,255 )

Cash flows from financing activities
Change in cash overdraft                                          119,007        (101,368 )
Principal payments on term notes                                        -      (2,335,179 )
Repayment of revolver                                                   -      (8,237,400 )
Net proceeds (payments) on revolver                            (2,616,083 )    10,685,636
Proceeds from sale - leaseback transaction                              -       5,800,000
Principal payments on capital leases                             (104,897 )        (2,332 )
Debt issuance costs paid                                         (144,832 )      (482,773 )
Net cash (used in) provided by financing activities            (2,746,805 )     5,326,584
Increase (decrease) in cash and cash equivalents                       50          (1,019 )

Cash
Beginning of year                                                     750           1,769
End of year                                                 $         800    $        750

Supplemental disclosure of cash flow information
Cash paid for interest                                      $   1,130,441    $  2,240,072
Property, plant and equipment acquired through capital
leases                                                             62,163         262,563
Return of inventory and forgiveness of accounts
receivable                                                        242,500               -