DEVC Devcon Intl Corp (MM)

Entry into a Material Definitive Agreement

On September 25, 2007, certain subsidiaries (the “Borrowers”) of Devcon International Corp. (the “Company”) entered into that certain Consent and Fifth Amendment to Credit Agreement, dated September 25, 2007 (the “Amendment”) with CapitalSource Finance LLC (“CapitalSource”), as Agent for the Lenders parties thereto and as a Lender, pursuant to which that certain Credit Agreement, dated as of November 10, 2005, as amended, was further amended to increase the total commitment thereunder to $105,000,000 (with the Borrowers having the ability to increase this commitment further to $125,000,000 upon satisfaction of certain conditions), extend the maturity date thereunder to September 25, 2010, and adjusted the interest rate and certain financial and other covenants provided therein. Under the terms of the Amendment, as of the date of this report, the Company’s new effective interest rate under the Credit Agreement is LIBOR plus 5.75%.

The proceeds were used to partially fund the redemption of certain shares of the Company’s Series A Convertible Preferred Stock, par value $.001 (“Series A Convertible Preferred Stock”), in connection with previously disclosed settlement arrangements the Company had entered into settling all claims set forth in the lawsuit (the “Lawsuit”) previously disclosed under the Caption “Series A Convertible Preferred Stockholder” in “Item 3 - Legal Proceedings” of the Company’s Annual Report on Form 10-K/A filed with the Securities and Exchange Commission on April 30, 2007.

Other than the Company’s relationship with CapitalSource as the Company’s senior lender under the Credit Agreement and with an affiliate of CapitalSource that owns certain shares of the Company’s Series A Convertible Preferred Stock, the Company is not aware of any material relationship between the Company and CapitalSource. The Company did not redeem the shares of Series A Convertible Preferred Stock held by CapitalSource. The foregoing description of the Amendment is qualified in its entirety by reference to the terms of the Amendment which are attached to this Current Report on Form 8-K as Exhibit 10.1. In addition, the Company has attached as Exhibit 10.2 its previously disclosed Waiver and Fourth Amendment to Credit Agreement, dated May 10, 2007.