Document:

ex10_01.htm

    
      

    

    EXHIBIT
10.01

    

     

    COLONIAL
COMMERCIAL CORP.

    NOTICE
OF OFFER TO PURCHASE FOR CASH

    SHARES
OF CONVERTIBLE PREFERRED STOCK

    THAT
ON AUGUST 20, 2008 WERE OWNED BY

    PERSONS
WHO THEN OWNED 99 SHARES OR LESS

    OF
CONVERTIBLE PREFERRED STOCK

    

     

    September
2, 2008

     

    Dear
Shareholder:

     

    The
Company is offering to shareholders who owned 99 or fewer shares of the
Company’s Convertible Preferred Stock on August 20, 2008, to purchase those
shares at $1.25 per share. A purpose of the offer is to enable our Convertible
Preferred shareholders owning odd lots to receive cash for their shares without
incurring brokerage fees. Another purpose of the offer is to reduce the cost of
maintaining shareholder lists for persons who own only a small number of
Convertible Preferred shares.

     

    Please
note the following information carefully:

     

    
      	
               
      

            	
              1.

            	
              The
      offer is being made only to shareholders who owned 99 or fewer shares of
      Convertible Preferred Stock on August 20, 2008, and only for the purchase
      of those shares.

            

    

     

    
      	
               
      

            	
              2.

            	
              This
      offer will expire on October 31, 2008 at 12:00 Midnight, Eastern Standard
      Time. The attached Letter of Transmittal, along with your certificate(s),
      must be received by the Depositary before the
  deadline.

            

    

     

    
      	
               
      

            	
              3.

            	
              If
      you hold your shares in a broker's account you will need to arrange for
      your broker to register the shares in your name if you want to tender
      these shares.

            

    

     

    
      	
               
      

            	
              4.

            	
              We
      will pay $1.25 for each Convertible Preferred share that you properly
      submit for purchase.

            

    

     

    
      	
               
      

            	
              5.

            	
              The
      purchase price will be paid within 15 days after you properly submit your
      shares. No interest accrues on the purchase
  price.

            

    

     

    
      	
               
      

            	
              6.

            	
              The
      last date on which you may tender your shares is October 31,
      2008.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              7.

            	
              If
      you decide to tender your shares, you should send the attached Letter of
      Transmittal, along with your properly endorsed certificates for these
      shares, to the Company's Depositary as
follows:

            

    

     

    
      	
              By
      Mail or Overnight Courier:

            	 
      	
              By
      Hand:

            
	
              American
      Stock Transfer & Trust Company

            	 
      	
              American
      Stock Transfer & Trust Company

            
	
              Operations Center

            	 
      	
              Attn:
      Reorganization Department

            
	
              Attn:
      Reorganization Department

            	 
      	
              59
      Maiden Lane

            
	
              6201
      15th Avenue

            	 
      	
              New
      York, NY 10038

            
	
              Brooklyn,
      NY 11219

            	 
      	 
      

    

     

    A reply
envelope is enclosed for your convenience.

     

    
      	
               
      

            	
              8.

            	
              Once
      you submit your shares, you will not be permitted to withdraw
      them.

            

    

     

    
      	
               
      

            	
              9.

            	
              The
      following documents contain important information about us and about the
      rights of the holders of Convertible Preferred
  Stock.

            

    

     

    
      	
               
      

            	
              ·

            	
              Our
      Annual Report on Form 10-K for the year ended December 31,
      2007;

            

    

     

    
      	
               
      

            	
              ·

            	
              Our
      Quarterly Report on Form 10-Q for the quarter ended June 30,
      2008;

            

    

     

    
      	
               
      

            	
              ·

            	
              Our
      Current Reports on Form 8-K dated April 3, 2008, May 15, 2008 and August
      8, 2008.

            

    

     

    You can
obtain these documents from the SEC's internet website at www.sec.gov or the
Company’s website at www.colonialcomm.com.
You can also obtain these documents (not including exhibits) from us without
charge by requesting them in writing or by telephone from us at 275 Wagaraw
Road, Hawthorne, New Jersey 07506, telephone 973-427-8224; Attention Investor
Relations. Please be sure to include your complete name and address in your
request.

     

    If you
have any questions with regard to the Tender Offer, please call the Depositary's
Shareholder Services unit (toll free) at 877-248-6417 or at
718-921-8317.

     

    COLONIAL
COMMERCIAL CORP.

     

     

    /s/ William
Pagano     

    By:
William Pagano

    Chief
Executive Officer

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    QUESTIONS
AND ANSWERS ABOUT THE OFFER TO PURCHASE

    

    
      	
              What
      is the offer?

            	 	
              We
      are inviting shareholders who on August 20, 2008 owned 99 shares or less
      of our Convertible Preferred Stock to sell those shares to the Company for
      cash.

            
	 	 	 
	
              What
      is the Company offering to pay for the shares?

            	 	
              We
      will pay $1.25 for each Convertible Preferred share that you properly
      submit for purchase. The purchase price will be paid within 15 days after
      you properly submit your shares. No interest accrues on the purchase
      price.

            
	 	 	 
	
              What
      is the purpose of the Offer?

            	 	
              From
      the shareholders' standpoint, it is an opportunity to receive cash for the
      shares without incurring brokerage fees associated with odd lot sales.
      From the Company's standpoint, purchase of the shares reduces the
      cost of maintaining shareholders lists and printing and mailing costs
      for persons who own only a small amount of Convertible Preferred
      shares.

            
	 	 	 
	
              How
      do I sell my shares?

            	 	
              Before
      October 31, 2008, you must send a properly endorsed stock certificate that
      is registered in your name, in the enclosed postage paid envelope,
      together with a properly filled-out Letter of Transmittal and your social
      security number or executed Form W-9, to:

               

              American
      Stock Transfer & Trust Company

              Operations Center

              Attn:
      Reorganization Department

              6201
      15th Avenue

              Brooklyn,
      NY 11219

            
	 	 	 
	
              What
      must I do if I want to tender and I hold my shares in a broker's
      account?

            	 	
              You
      must arrange with your broker to register your shares into your
      name.

            
	 	 	 
	
              When
      will I be paid for my shares?

            	 	
              The
      purchase price will be paid within 15 days after you properly submit your
      shares, except for certificates having incorrect endorsements or no social
      security numbers, which will require additional
      correspondence.

            
	 	 	 
	
              Do
      I have to sell my shares?

            	 	
              No.
      You are not required to sell any Convertible Preferred
    shares.

            
	 	 	 
	
              Is
      there any brokerage commission?

            	 	
              No.
      We will purchase shares directly from each Convertible Preferred
      shareholder at the purchase price. If you hold your shares in a broker's
      account, you should request the broker to issue to you a certificate for
      those shares so that you may submit those certificates. However, if you
      hold your shares through a broker or other nominee, you should check to
      see if they will impose a charge for remitting shares on your
      behalf.

            
	 	 	 
	
              Will
      my sale of my Convertible Preferred shares to the Company be
      taxable?

            	 	
              You
      will recognize gain or loss equal to the difference between the cash you
      receive for your Convertible Preferred shares and your tax basis (cost) of
      your Convertible Preferred shares.  We urge you to consult with
      your own tax advisor regarding your gain or loss resulting from your sale
      of Convertible Preferred shares to the Company.

            
	 	 	 
	
              Is
      Colonial making any recommendation about whether I should sell my
      shares?

            	 	
              Neither
      Colonial Commercial Corp. nor our Board of Directors makes any
      recommendation to any shareholder as to whether to sell all or any
      shares.  You must make your own decision as to whether to sell
      shares and, if so, how many shares to
sell.Unassociated Document

    
      

    

    
      EXHIBIT
4.1

      

      CONVERTIBLE
PROMISSORY NOTE

       

      

      
        	
                $69,450.67

              	
                August
      27, 2008

              

      

      

      FOR VALUE
RECEIVED, the undersigned, CDSS Wind Down Inc., a Delaware corporation ("CDSS"),
promises to pay to the order of Steven B. Solomon ("Payee"),
at such place as Payee may designate in writing, in lawful money of the United
States of America, the principal sum of Sixty-Nine Thousand Four Hundred Fifty
Dollars and Sixty-Seven Cents ($69,450.67) on the terms and conditions
hereinafter set forth.  This Note shall bear interest at the rate of
eight percent (8%) per year and shall mature on the earlier of August 27, 2010
or demand by the Payee (the "Payment
Date"), at which time all outstanding principal shall be due and
payable.

      

      Events of
Default.  The entire unpaid principal balance of this Note shall
immediately become due and payable, at the option of Payee, upon the failure by
CDSS to pay any installment of principal and interest hereof as and when the
same becomes due and payable in accordance with the terms hereof (the "Event of
Default"). In the event an Event of Default shall occur, the unpaid
principal shall accrue interest in the amount of 18% per annum and Payee may
proceed to protect and enforce its rights either by suit in equity and/or by
action at law, by other appropriate proceedings. No delay on the part of Payee
in the exercise of any power or right under this Note, or under any other
instrument executed pursuant thereto shall operate as a waiver thereof, nor
shall a single or partial exercise of any other power or right preclude further
exercise thereof.

      

      Conversion.
Payee is entitled, at its option, at any time prior to the Payment Date, to
convert all or a portion of the outstanding principal and accrued interest under
this Note into eighty-five percent (85%) of the Company's common stock
(228,788,200 shares of common stock) (the "Conversion
Shares"). No fractional shares or scrip representing fractions of shares
will be issued on conversion, but the number of Conversion Shares issuable shall
be rounded to the nearest whole share. Upon the surrender of this Note
accompanied by a conversion request, CDSS shall issue and deliver to Payee that
number of Conversion Shares as shall be determined in accordance herewith,
subject to the payment of at least the par value of the Conversion Shares to the
extent legally required.  If CDSS at any time subdivides (by any stock
split, stock dividend, recapitalization or otherwise) its outstanding shares of
common stock into a greater number of shares, the number of Conversion Shares
into which this Note is convertible immediately prior to such subdivision will
be proportionately increased, and if CDSS at any time combines (by reverse stock
split or otherwise) its outstanding shares of common stock into a smaller number
of shares, the number of Conversion Shares into which this Note is convertible
immediately prior to such combination will be proportionately
decreased.  CDSS and the Payee understand and acknowledge that CDSS
does not have a sufficient number of shares of common stock available to permit
the conversion of this Note at this time.  CDSS agrees to use its best
efforts to obtain shareholder approval to (a) increase the number of authorized
shares of common stock to a number sufficient to permit conversion, or (b) to
effect a reverse stock split to reduce the number of currently outstanding
shares of common stock to a number small enough to permit the conversion of this
Note.

      

      Costs of
Collection.  It is hereby specially agreed that if this Note is placed
into the hands of an attorney for collection, or if proved, established, or
collected in any court, CDSS agrees to pay to Payee an amount equal to all
expenses incurred in enforcing or collecting this Note, including court costs
and reasonable attorneys' fees.

      

      Waiver of
Rights.  Except for the notice expressly provided herein, the
undersigned and all endorsers, sureties, and guarantors hereof hereby jointly
and severally waive presentment for payment, demand, notice of nonpayment,
protest, notice of protest, and without further notice hereby consent to
renewals, extensions, or partial payments either before or after
maturity.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      Usury
Limitation.  All agreements between CDSS and Payee, whether now
existing or hereafter arising and whether written or oral, are expressly limited
so that in no contingency or event whatsoever shall the amount paid, or agreed
to be paid, to Payee hereof for the use, forbearance, or detention of the money
advanced to CDSS, or for the performance or payment of any covenant or
obligation contained herein, exceed the maximum amount permissible under
applicable federal or state law.  If, from any circumstance
whatsoever, fulfillment of any provision hereof at the time performance of such
provision shall be due shall involve transcending the limit of validity
prescribed by law, then the obligation to be fulfilled shall be reduced to the
limit of such validity, and if from any such circumstance Payee shall ever
receive as interest under this Note or otherwise an amount that would exceed the
highest lawful rate, such amount that would be excessive interest shall be
applied to the reduction of the principal amount owing under this Note and not
to the payment of interest or, if such excessive interest exceeds the unpaid
principal balance of this Note, such excess shall be refunded to
CDSS.  All sums paid or agreed to be paid to Payee for the use,
forbearance, or detention of the indebtedness evidenced hereby shall, to the
extent permitted by applicable law, be amortized, prorated, allocated, and
spread throughout the full term of such indebtedness until payment in full so
that the actual rate of interest on account of such indebtedness is uniform
throughout the term thereof.  The terms and provisions of this
paragraph shall control every other provision of all agreements between CDSS and
Payee.

      

      Governing
Law.  This Note shall be governed by and construed in accordance with
the laws of the State of Texas and the laws of the United States applicable to
transactions in Texas.

      

      Counsel.  Payee
agrees and acknowledges that counsel to CDSS has represented only CDSS in
connection with this Note and has advised Payee to retain independent
counsel.  Payee waives any conflict of interest in connection with
counsel’s representation of CDSS in connection with this Note.

      

      CDSS
Wind Down Inc.

      

      
        	
                By:

              	
                /s/
      Steven B. Solomon

              
	
                Name:

              	
                Steven
      B. Solomon

              
	
                Title:

              	
                CEO

              
	 
      	 
      
	
                PAYEE:

              
	 
      	 
      
	
                By:

              	
                /s/
      Steven B. Solomon

              
	 
      	
                Steven
      B. Solomon

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