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.




 





 





















 


	
   

  	
  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

  	
   

  



 





















 


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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