EXHIBIT 10.7


P&F
INDUSTRIES, INC.


FIRST AMENDMENT TO
CONTRACT OF SALE


AGREEMENT made
this 8th day of March, 2006 by and between EMBASSY INDUSTRIES, INC.,
a New York corporation, having its principal office at 445 Broadhollow Road, Suite 100,
Melville, New York, 11747 (the “Seller”) and J. D’ADDARIO &
COMPANY, INC., a New York Corporation, having its principal office
at 595 Smith Street, Farmingdale, New York 11735 (the “Purchaser”).


W I T
N E S S E T H:


WHEREAS,
Seller and Purchaser entered into a Contract of Sale dated as of January 13,
2006 (the “Contract”) wherein and whereby Seller has agreed to sell and
Purchaser has agreed to purchase the premises located at 300 Smith Street,
Farmingdale, New York (the “Premises”); and


WHEREAS, the
defined terms set forth herein shall have the same meaning as those ascribed in
the Contract; and


WHEREAS, during
the course of Purchaser’s Investigation Period Permitted Activities, Purchaser
had a Phase II environmental inspection of the Premises performed which
revealed certain environmental problems; and


WHEREAS, Seller
has agreed to remediate the environmental problems subject to the terms
contained herein; and


WHEREAS, in
addition to the environmental inspections, Purchaser arranged for a property
inspection of the Premises to be performed; and


WHEREAS, the
property inspection report revealed certain purported problems pertaining to, inter alia, the roof
and flooring in the addition to the warehouse; and


WHEREAS, although
the Contract states that the Premises is to be delivered in its “as is”
condition, Seller has agreed to reduce the purchase price to compensate
Purchaser for the alleged problems with the building; and


WHEREAS, as
a result of the foregoing, the parties desire to amend the Contract to set
forth their understanding and obligations with respect to the foregoing.


NOW, THEREFORE,
in consideration of, these premises and the mutual covenants contained herein,
the parties hereto covenant and agree as follows:


1.                Section 2
of the Contract is amended as follows:


(a) Section 2.1 of the Contract is hereby
amended by deleting “Six Million Five Hundred Thousand and 00/100
($6,500,000.00)” and replacing same with “Six Million Four Hundred Three
Thousand and 00/100 ($6,403,000.00)”.


(b) Section 2.3 of the Contract is hereby
amended by deleting Five Million Eight Hundred Fifty and 00/100 ($5,850,000.00)”
and replacing same with “Five Million Seven Hundred Fifty-Three and 00/100
($5,753,000.00)”.


2.                The
Investigation Period is hereby extended, for the sole purpose of Seller performing
further investigations (the “Further Investigations”) with regard to the
matters raised in the Phase II, report through and including 5:00 p.m. on
the second business day following Purchaser and Seller’s receipt of the Further
Investigations written report, but in no event later than Monday, April 3,
2006 (the “Investigation Extension Period Notice Date”.) The parties
acknowledge that the Investigation Period expired as of 5:00 p.m. on March 7,
2006 with respect to all other 











Investigation
Period matters, as well as the contingency contained in Section 20.19 of
the Contract.


3.                In
the event the Further Investigations disclose conditions which are
unsatisfactory to Purchaser or Seller or Purchaser has not received the Further
Investigation written report by the Investigation Extension Period  Notice Date, either party hereto may
terminate the Contract by written notice to the other party, to be given by the
Investigation Extension Period Notice Date. The parties hereto acknowledge,
warrant and covenant to each other that either party’s right to terminate the
Contract pursuant to the terms hereof shall be strictly limited to
unsatisfactory findings in the Further Investigations reports.


4.                In
the event the Contract is terminated pursuant to paragraph 3 above, the
provisions of Section 3.1C of the Contract shall control.  If Seller elects to terminate the Contract,
Seller agrees to reimburse Purchaser 50% of Purchaser’s actual costs incurred
for environmental inspections, up to and including the sum of $25,000.00. The
amount to be reimbursed shall be documented by written invoices delivered to
Seller.


5.                If
this Contract is not terminated or if the Investigation Period shall expire or
be waived, the parties hereto shall proceed with the transaction contemplated
in the Contract.


6.                Upon
the expiration of the Investigation Period or a waiver thereof by Purchaser,
Seller shall proceed with the Environmental Remediation (as defined below) of
the Premises to the satisfaction of the Suffolk County Department of Health
Services (“SCDHS”) and obtain a “No Further Action” letter from SCDHS. Seller
shall provide a copy of said letter to Purchaser upon receipt.


7.                The
term “Environmental Remediation” shall include:


a.                  Removal
of asbestos pipe wrap from four pipe joints;


b.                 Remediation
of 13 storm drains which contain elevated levels of oils and greases to bring
elevated levels of contamination within SCDHS guidelines;


c.                  Remediation
of sanitary systems to bring elevated levels of contamination within SCDHS
guidelines.


d.                 The
term “Remediation” shall include, but not be limited to, ground water
monitoring, only if required by SCDHS.


8.                Section 3.3
of the Contract is hereby amended by deleting “on or about June 1, 2006”
and replacing with “the later of (a) thirty days after Seller is issued a “No
Further Action” letter from SCDHS or (b) on or about June 1, 2006. Notwithstanding
the foregoing, in the event Seller has not obtained the “No Further Action”
letter by July 15, 2006 (the “Outside Closing Date”), either party may terminate
the Contract upon ten (10) day written notice to the other party; provided, however, that if Purchaser serves its ten (10) day
notice to terminate the Contract, Seller may nullify Purchaser’s termination if
Seller receives the “No Further Action” letter within said ten (10) day
period. In such event, Purchaser shall be obligated to proceed with this
transaction in accordance with the terms of the Contract. Moreover, either
party, at their option, may extend the Outside Closing Date to and including August 15,
2006.


9.                Section 8.16
of the Contract is hereby amended by deleting “and roof free of leaks.”


10.         Section 13.1
of the Contract is hereby amended by replacing the address for Seller with the
following:  445 Broadhollow Road, Suite 100,
Melville, New York 11747.”



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11.         All
other terms and conditions set forth in the Contract shall remain in full force
and effect.


IN WITNESS WHEREOF, the parties have executed this Amendment on the date set
forth above.




	
   

  	
  SELLER:

  	
   

  	
  EMBASSY INDUSTRIES, INC.

  
	
   

  	
   

  	
   

  	
  By: /s/ JOSEPH A. MOLINO, JR.

  
	
   

  	
  PURCHASER:

  	
   

  	
  J. D’ADARIO & COMPANY,
  INC.

  
	
   

  	
   

  	
   

  	
  By: /s/ ROBERT DODARO

  






 



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