Exhibit 10.1

 

 

 

CONTRACT OF SALE

 

 

dated November 22, 2005

 

 

between

 

 

MIDWAY LEASING INC.

 

                    as Seller

 

and

 

 

CONTINENTAL FINANCE CORPORATION

 

                    as Purchaser

 

 

Affecting Premises known as 7 NORTH STREET, 3 NORTH STREET, 2153 RICHMOND
TERRACE, STATEN ISLAND, NEW YORK.

 

 

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Article 1

Purchase Price

 

 

Article 2

State of Title

 

 

Article 3

Representations

 

 

Article 4

Covenants

 

 

Article 5

Leases

 

 

Article 6

Violations

 

 

Article 7

Closing Date

 

 

Article 8

Conditions of Closing

 

 

Article 9

Closing Documents

 

 

Article 10

Adjustments and Costs

 

 

Article 11

Escrow Conditions

 

 

Article 12

Brokerage

 

 

Article 13

Notices

 

 

Article 14

Miscellaneous

 

 

 

 

 

 

Exhibit A

Property Description

 

 

Exhibit B

Permitted Exceptions

 

 

Exhibit C

Schedule of Leases

 

 

Exhibit D

Service Contracts/Agreements

 

 

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CONTRACT OF SALE

 

AGREEMENT, made November 22, 2005, between MIDWAY LEASING INC., a NEW YORK
corporation, having an address at 7 NORTH STREET, STATEN ISLAND, NEW YORK
(“Seller”), and CONTINENTAL FINANCE CORPORATION, a DELAWARE corporation, having
an address at 216 EAST 49TH STREET, NEW YORK, NEW YORK 10017 (“Purchaser”),
assignable to a special purpose entity formed to own the subject real property.

 

W I T N E S S E T H :

 

Seller agrees to sell and Purchaser agrees to purchase, upon the terms and
conditions hereinafter set forth,

 

ALL those certain plots, pieces or parcels of land, with the buildings and
improvements thereon erected, situate, lying and being in The City of New York,
the County of RICHMOND and the State of New York, being more particularly
described in Exhibit A attached hereto and made a part hereof,

 

TOGETHER with all right, title and interest, if any, of Seller in and to any
streets and roads abutting the aforesaid premises to the center lines thereof,

 

TOGETHER with the appurtenances and all the estate and rights of Seller in and
to said premises,

 

(the aforesaid land, buildings and improvements being hereinafter referred to as
the “Premises”).

 

The Premises is identified as Section 5, Block 1070 and Lots 1, 31 and 20.

 

This sale includes all right, title and interest, if any, of Seller in and to
any land lying in the bed of any streets or roads, opened or proposed, in front
of or adjoining the Premises, to the center lines thereof, and all right, title
and interest, if any, of Seller in and to any unpaid award made or to be made in
lieu thereof or for any change of grade of any such street or road.  Seller
shall execute and deliver to Purchaser at the closing or thereafter, upon
request, all proper instruments for the conveyance of such title and the
assignment of such award.

 

This sale includes all right, title and interest of Seller in and to the
buildings and improvements located on the Premises, all tenements, hereditaments
and appurtenances thereunto belonging or appertaining, and all fixtures,
equipment and machinery, now situate on or appurtenant to the Premises.

 

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1.  Purchase Price

 

The Purchase Price for the Premises is Four Million Two Hundred Thousand Dollars
($4,200,000.00), payable as follows:

 

(a)  One Hundred Thousand Dollars ($100,000.00) upon execution of this
Agreement.  Said check is payable to the order of the Escrow Agent hereinafter
identified, and the proceeds of said check shall be held in escrow as
hereinafter provided.

 

(b)  Four Million One Hundred Thousand Dollars ($4,100,000.00) at the closing by
a cashier’s or certified check drawn to the order of Seller on a bank which is a
member of the New York Clearing House Association.

 

2.  State of Title

 

The Premises are sold subject to the following (collectively the “Permitted
Exceptions”):

 

(a)  Zoning regulations and ordinances of The City of New York which are not
violated by existing structures and which do not prohibit the present use of the
Premises.

 

(b)  The covenants, restrictions, easements and agreements affecting the
Premises.

 

(c)  Any state of facts which would be shown by a current survey or inspection
of the Premises.

 

(d)  The leases and tenancies listed in the Schedule of Leases annexed hereto as
Exhibit C (collectively the “Leases”).

 

(e)  The agreements pertaining to the operation or maintenance of the Premises
listed in Exhibit D attached hereto and made a part hereof (the “Service
Contracts and Agreements”).

 

3.  Representations and Warranties

 

Seller represents and warrants to Purchaser that:

 

(a)  Exhibit D lists all service, maintenance, supply and management contracts
and agreements affecting the Premises, and the information thereon is accurate. 
Seller further represents and warrants that the copies of such contracts and
agreements heretofore delivered to Purchaser’s attorneys are true and complete
copies of the original contracts and agreements; none of them have been further
amended or modified; Seller has not received any notice of default under any of
such contracts

 

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or agreements which default remains uncured; and to the best of Seller’s
knowledge and belief, no event of default exists thereunder.

 

(b)  The copy of the certificate of occupancy heretofore delivered to
Purchaser’s attorneys is a true and complete copy of the original, and said
certificate has not been amended.

 

(c)  Seller is the sole owner of the Premises, and subject to the conditions set
forth herein, has full power, authority and right to execute, deliver and
perform this Agreement.  The parcels and plots which comprise the Premises are
all contiguous.

 

(d)  All fixtures included in this sale are owned by Seller, free from all
liens, claims and encumbrances.

 

(e)  Seller has no knowledge of any incinerator, boiler or other burning
equipment on the Premises being operated in violation of any applicable law. 
The copies of the certificates of operation for said equipment heretofore
delivered to Purchaser’s attorneys are true copies of the originals.

 

(f)  There are no pending proceedings for the taking of all or any portion of
the Premises by condemnation or eminent domain, and to the best of Seller’s
knowledge no such proceeding is about to be commenced.

 

(g)  There are no legal actions or proceeding affecting the Premises except as
set forth herein.

 

(h)  Seller is not a “foreign person” as defined in Section 1445(f)(3) of the
Internal Revenue Code of 1986, as amended (the “Code”).  If Seller fails or
refuses to deliver to Purchaser at the closing a certificate evidencing that
Seller is not a “foreign person”, or if Seller is a “foreign person”, then
Purchaser shall be entitled to withhold from the Purchase Price a tax equal to
ten percent of the Purchase Price, as required by Section 1445 of the Code.  In
the event of such a withholding, Purchaser shall remit such tax to the Internal
Revenue Service and shall file the required return, and the closing hereunder
shall not be otherwise affected.  Seller hereby waives any action or claim
against Purchaser pertaining to any such withholding, and agrees to look solely
to the Internal Revenue Service for any refund of such tax.

 

(i) Seller has no knowledge of any environmental issues in connection with the
Premises. Seller has not received any notices from any governmental agencies
relating to environmental issues in connection with the Premises, other than
notices concerning issues which have been resolved.

 

4.  Covenants

 

Seller covenants and agrees that:

 

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(a)  Seller until the closing shall maintain in full force and effect all
insurance presently maintained with respect to the Premises.  Renewals or
replacements of existing insurance policies shall expire no later than one year
after the closing.

 

(b)  Seller shall continue to operate and maintain the Premises in the same
manner as the Premises has been operated and maintained in the preceding year. 
Seller shall afford access to the Premises to Purchaser and Purchaser’s
representatives, at reasonable times after notice.

 

(c)  No fixtures or equipment included in this sale shall be removed from the
Premises unless the same are replaced prior to the closing with similar items of
at least equal quality, free from all liens, claims and encumbrances.

 

5. Leases

 

Seller represents and warrants that the Schedule of Leases annexed hereto as
Exhibit C is an accurate schedule of all Leases affecting the Premises on the
date hereof, including all amendments, extensions and other modifications
thereof; the copies of the Leases heretofore delivered to Purchaser’s attorneys
are true and complete copies of the original Leases; all Leases are valid and in
full force and effect.  There are no arrears in rent in excess of one month,
except as may be set forth on the Schedule of Leases; the Schedule of Leases
accurately sets forth all tenant security deposits; Seller has not sent any
notice to any tenant claiming that the tenant is in default, which default
remains uncured, except as may be set forth in the Schedule of Leases; no action
or proceeding pertaining to the Leases is pending in any court, except as may be
set forth in the Schedule of Leases; and to the best of Seller’s knowledge
neither the landlord nor the tenant is in default under any of the Leases,
except as may be set forth in the Schedule of Leases.

 

6.  Violations

 

All notes and notices of violations of law, ordinances, orders or requirements
issued prior to the date of this Agreement by any governmental authority having
jurisdiction over the Premises shall be removed by Seller.  All liens which
attach to the Premises prior to the Closing Date pursuant to the Administrative
Code of The City of New York shall be removed by Seller.  Seller shall furnish
Purchaser upon request written authorization to make searches for violations and
liens.  Seller represents and warrants that Seller has not received any notice
of any violation of any law, ordinance, regulation, order or requirement issued
by any governmental authority having jurisdiction over or affecting the Premises
or the use or improvement thereof, which violation remains uncured.  The
provisions of this Article 6 shall survive the closing.

 

7.  Closing Date

 

The closing of title pursuant to this Agreement (the “Closing”) shall be held at
the offices of JANOFF & GUREVICH, LLP, 216 EAST 49TH STREET, NEW YORK, NY 10017,
at 10 A.M. on or about December 1, 2005 (the “Closing Date”).

 

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8.  Conditions of Closing

 

I.                                         It shall be a condition to
Purchaser’s obligation to close title that:

 

(a) Purchaser shall have a period of thirty (30) days from the date of full
execution of this Agreement by all parties (the “Due Diligence Period”) to
perform any and all inspections and studies relating to the Premises, including,
without limitation, a title search, survey, environmental investigations and
reports, zoning, building and feasibility studies, a review of all regulatory
approvals for the Premises and a physical inspection of the Premises including,
without limitation, drilling, soil boring, surveying, soil sampling and any
other testing as may be desired by Purchaser (collectively, the “Inspections”),
provided, the Purchaser shall not conduct any such drilling, soil boring,
surveying and soil sampling unless the Purchaser, its agents, consultants,
affiliates and representatives, including its environmental consultants, is not
under any obligation to disclose to the Seller, its agents, consultants,
affiliates and representatives or to any other third-party, including, without
limitation, any governmental agency, the results of such drilling, soil boring,
surveying or soil sampling. The parties acknowledge and agree that Purchaser may
terminate this contract at any time during the Due Diligence Period by providing
written notice to that effect to Escrow Agent.

 

(b)  The representations and warranties of Seller set forth herein shall be true
as of the Closing Date.

 

(c)  The covenants of Seller set forth herein shall have been complied with as
of the Closing Date.

 

(d)  Seller shall convey to Purchaser marketable and insurable title to the
Premises, subject only to the Permitted Exceptions, in accordance with this
Agreement.

 

(e)  Seller shall deliver possession of the Premises to Purchaser on the Closing
Date in the condition required by this Agreement and in accordance with the
terms, covenants and conditions of this Agreement.

 

(f)                                    Seller shall fully comply with the terms
of the lease to be entered into between the parties hereto. A copy of the
proposal is attached hereto as Exhibit A and made a part hereof. Further, all
representations contained in the lease proposal shall survive the closing and
become a part of the lease. The lease entered into by the parties hereto shall
be duly recorded by the Purchaser.

 

(g)                                 The Seller and Purchaser shall have entered
into a lease in accordance with the proposal attached hereto as Exhibit A.

 

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Without limiting the other rights of Purchaser, Seller shall permit Purchaser
and such agents and experts of Purchaser as Purchaser shall designate full
access to the Premises and all records concerning the Premises during reasonable
business hours, for purposes of such independent investigation as Purchaser
shall desire to conduct.

 

In the event that any of the aforesaid conditions are not satisfied by Seller or
waived by Purchaser on or prior to the Closing Date, Purchaser shall be entitled
to terminate this Agreement by written notice to Seller.  In the event of such
termination Seller shall direct Escrow Agent to refund to Purchaser all payments
made by Purchaser on account of the Purchase Price.

 

II.                                     It shall be a condition to Seller’s
obligation to close title that:

 

(a)                                  the Boards of Directors of Seller and its
parent corporation shall approve the sale herein.

 

(b)                                 All conditions and limitations regarding the
sale of the Premises arising with respect to any contract, indenture, trust,
instrument or other agreement to which the Seller is a party shall have been
satisfied in accordance with the terms of such agreement or waived by the
relevant party to such agreement.

 

(c)                                  Seller shall have obtained an opinion of an
independent expert as to the fair value of the Premises as required under the
Trust Indenture Act of 1939, as amended, and the Indenture dated April 22, 2004
(the “Indenture”) which opinion concludes that the Purchase Price is not less
than the fair market value of the Premises and that the release of security
interest in the Premises does not impair the security under the Indenture in
contravention of the provisions thereof.

 

(d)                                 The Seller and Purchaser shall have entered
into a lease in accordance with the proposal attached hereto as Exhibit A.

 

9.  Closing Documents

 

Seller shall deliver to Purchaser at the closing:

 

(a)  A bargain and sale deed with covenant against grantor’s acts, containing
the covenant required by Section 13 of the Lien Law, executed in proper form for
recording, and sufficient to convey marketable and insurable title to the
Premises in accordance with this Agreement.

 

(b)  A bill of sale for all fixtures and equipment included in this sale, with
Seller’s warranty that the same are free of all lien, claim or encumbrance.

 

(c)  An assignment of the landlord’s interest under all Leases affecting the
Premises, together with the originals of all Leases and records and files of
Seller pertaining thereto, and a letter to the tenants advising them of the
change of ownership.  All security deposits under the Leases and any interest
thereon, except security deposits

 

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and interest applied in accordance with the Leases, shall be turned over to
Purchaser at the closing.  Seller shall deliver at the closing a current
schedule of rents and security deposits.

 

(d)  An assignment of the Service Contracts and Agreements set forth in
Exhibit D, together with the originals thereof.

 

(e)  If Seller is a corporation, and if required by Section 909 of the Business
Corporation Law, a resolution authorizing the sale of the Premises and the
execution and delivery of the closing documents hereunder and a certificate of
the secretary or assistant secretary of Seller certifying the adoption and
continued effectiveness of such resolution.

 

(f)  An certificate of Seller that Seller is not a “foreign person” within the
meaning of Section 1445 of the Internal Revenue Code of 1986, as amended, and
any other instruments required under said Code.

 

(g)  If the title examination discloses judgments, bankruptcies or other returns
against other persons having names the same as or similar to Seller, Seller
shall deliver an affidavit showing that such judgments, bankruptcies and other
returns are not against Seller.

 

(h)  A certificate reaffirm the representations and warranties of Seller under
this Agreement as of the Closing Date.

 

(i)  The certificate of occupancy for the Premises; all other certificates,
licenses, permits, authorizations and approvals issued for or with respect to
the Premises by governmental authorities, together with an assignment of all of
Seller’s rights hereunder or with respect thereto; all records and files of
Seller pertaining to the operation and maintenance of the Premises as Purchaser
reasonably may request; all keys to the Premises; an assignment of all right,
title and interest of Seller in and to the name “7 NORTH STREET, STATEN ISLAND,
NEW YORK, 3 NORTH STREET, 2153 RICHMOND TERRACE, STATEN ISLAND”; and such other
documents as Purchaser reasonably may request to consummate the transactions
contemplated herein.

 

10.  Adjustments and Costs

 

The following shall be apportioned as of midnight of the day preceding the
Closing Date:

 

(a)  All rent and other charges under the Leases.

 

If any of the Leases requires any tenant to pay additional rent or charges
(including without limitation percentage rent; escalations or other charges for
taxes, labor or

 

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operating expenses; payments with respect to insurance; common area charges; and
electricity, HVAC or other utility charges), and Seller shall have collected, or
shall collect after the Closing Date, any portion of such additional rent or
charges for a period beyond the Closing Date; then there shall be a pro rata
adjustment and credit to Purchaser for such period.  If such additional rent or
charges have not been billed or collected as of the Closing Date; any such
additional rent or charges collected by Purchaser shall be held in trust for
Seller, and Purchaser promptly shall remit to Seller its pro-rata portion
thereof.

 

(b)  Real estate taxes, vault charges, water charges and sewer rents, if any, on
the basis of the lien period for which assessed.  If on the Closing Date the tax
rate shall not have been fixed, the apportionment shall be based upon the tax
rate for the preceding year applied to the latest assessed valuation; however,
adjustment will be made when the actual tax amount is determined.  If there are
water meters on the Premises, Seller shall furnish readings thereof to a date
not more than fifteen days prior to the Closing Date.  Meter charges shall be
apportioned on the basis of the last reading.  Upon the taking of a subsequent
actual reading, such apportionment shall be readjusted.  The provisions of this
clause (b) shall survive the closing.

 

(c)  Amounts, if any, paid or payable in respect of the Service Contracts and
Agreements assigned to Purchaser at the closing.

 

Any errors in computing adjustments at the closing shall be corrected after the
closing.

 

If the adjustments result in a payment due Seller, such payment shall be made at
the closing by a cashier’s or certified check of Purchaser.  Purchaser, however,
shall be entitled to pay up to $5,000 by an uncertified check of Purchaser.  If
the adjustments result in a payment due Purchaser, such payment shall be
credited against the cash portion of the Purchase Price due at the closing.

 

The amount of any unpaid real estate taxes, assessments, water charges and sewer
rents which Seller is obligated hereunder to discharge or satisfy, with any
interest or penalties thereon, at the option of Seller may be allowed as a
credit to Purchaser at the closing, provided official bills therefor, showing
the amount due including any interest or penalties to a date not less than two
days after the Closing Date, are furnished at the closing.  If on the Closing
Date there are any liens or encumbrances which Seller is obligated hereunder to
discharge or satisfy, Purchaser agrees to provide at the closing, upon five days
prior request, separate certified checks to facilitate the discharge or
satisfaction of items referred to in this paragraph.

 

If on the Closing Date the Premises shall be affected by an assessment which is
or may become payable in annual installments, and the first installment is then
a lien, then all unpaid installments of such assessment shall be paid by Seller
at the closing.

 

Seller shall pay or shall credit Purchaser at the closing with an amount equal
to any applicable transfer tax or stamp tax payable by reason of the delivery of
the deed.  Seller and

 

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Purchaser agree to execute, swear to, and cause to be filed any applicable
transfer tax return or other return required in connection with the closing.

 

11.  Escrow Conditions

 

Concurrently with the execution of this Agreement, Purchaser has delivered to
Silverman Sclar Shin & Byrne PLLC, attorney for the Seller, , having an address
at 381 Park Avenue South, Suite 1601, New York, New York,  (“Escrow Agent”)
Purchaser’s check in the amount of $100,000.00, being the amount to be paid by
Purchaser upon the execution of this Agreement pursuant to clause (a) of
Article 1 above (the “Down Payment”).

 

Escrow Agent, subject to collection of said check, shall hold the Down Payment
in accordance with this Agreement, or a joint instruction signed by Seller and
Purchaser, or separate instructions of like tenor signed by Seller and
Purchaser, or a final judgment of a court of competent jurisdiction.  Escrow
Agent at any time may deposit the Down Payment with a court of competent
jurisdiction, and upon notice to Seller and Purchaser of such deposit Escrow
Agent shall have no further responsibility or liability hereunder.

 

Escrow Agent shall deposit the Down Payment in an interest bearing account, or
invest the Down Payment in treasury bills, certificates of deposit or other
income producing investments.  Any interest or income thereon shall be for the
account of, and be paid at the closing to, the party entitled to the Down
Payment under the terms of this Agreement.

 

12.  Brokerage

 

Seller and Purchaser each represent and warrant to the other that they have not
d ealt with any broker in connection with this sale, other than CONTINENTAL
REALTY, LLC, a NEW YORK limited liability company, having an address at 1007
BRIGHTON BEACH AVENUE, BROOKLYN, NEW YORK 11235 (the “Broker”), whose commission
Seller agrees to pay pursuant to a separate agreement.  The parties hereto
expressly agree that Continental Realty, LLC is the exclusive real estate broker
involved in this transaction, and that Continental Realty, LLC shall receive an
exclusive right to relocate the Seller within six months from the date of the
closing.

 

13.  Notices

 

All notices, demands and other communications required or permitted to be given
hereunder shall be in writing and shall be deemed to have been properly given if
delivered by hand or sent by United States registered or certified mail, return
receipt requested, to Seller or Purchaser, as the case may be, at their
addresses first above written, or at such other addresses as they may designate
by notice given hereunder.  Copies of any such communication to the Purchaser or
the Escrow Agent shall be delivered to JANOFF & GUREVICH, LLP, attention
ALEXANDER GUREVICH, 216 EAST 49TH STREET, NEW YORK, NY 10017, and to CONTINENTAL
FINANCE CORPORATION, 715 Park Avenue, New York, New York 10021, in the aforesaid
manner.  Copies of such communication to the Purchaser or the Escrow Agent shall
be delivered to

 

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Silverman Sclar Shin & Byrne PLLC, Att: Peter R. Silverman at 381 Park Avenue
South, Suite 1601, New York, New York 10016, in the aforesaid manner.

 

14.  Miscellaneous

 

All payments of Purchaser on account of the Purchase Price, and Purchaser’s
expenses for examination of title, are hereby made a lien against the Premises.

 

If Purchaser defaults under this Agreement, Seller as its sole remedy shall be
entitled to receive and retain all sums paid by Purchaser hereunder as
liquidated damages.

 

The representations and warranties of Seller hereunder shall survive the closing
for two years from the date of closing.

 

This Agreement may not be altered, amended, changed, waived, or modified in any
respect or particular unless the same shall be in writing signed by Seller and
Purchaser.

 

This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective heirs, executors, administrators, successors and
permitted assigns.

 

The Tax Identification Numbers of Seller and Purchaser are as follows:

 

IN WITNESS WHEREOF Seller and Purchaser have duly executed this Agreement on the
date first above written.

 

 

 

MIDWAY LEASING INC.

 

 

 

By

/s/ Domenic Gatto

 

 

 

President

 

 

 

 

 

CONTINENTAL FINANCE CORPORATION

 

 

 

By

/s/ Alexander Gurevich

 

 

 

President

 

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Silverman Sclar Shin & Byrne PLLC hereby executes this Agreement for the sole
purpose of agreeing to serve as Escrow Agent in accordance with the provisions
of Article 11 of this Agreement.

 

 

 

By

/s/ Peter Silverman

 

 

 

 General Partner

 

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