Sale Agreement
EXHIBIT 10.2
This Sale
Agreement (this "Sale Agreement") is made and entered into by and among the
undersigned at the address set forth under their respective names (each a
"Seller" and collectively the "Sellers") and National Patent Development
Corporation, a Delaware corporation with principal executive offices at 00 Xxxx
00xx Xxxxxx, Xxxxx 0000, Xxx Xxxx, XX 00000 ("NPDC") and Five Star
Products, Inc., a Delaware with principal offices at 00 Xxxx 00xx Xxxxxx, Xxxxx
0000, Xxx Xxxx, XX 00000 ("Five Star").
NOW THEREFORE, in
consideration of the mutual promises and covenants contained herein, it is
agreed as follows:
1.
Sale of
Shares.
(a) On
such date and time (the "Closing Date") and place as NPDC shall purchase shares
of NPDC common stock, par value $0.01, (the "NPDC Common Stock") and shares of
common stock, $0.01 par value, of Five Star Products, Inc. (the "Five Star
Common Stock") from Xxxxxx Xxxxxx pursuant to the terms of the Agreement and
Release made and entered into among Xxxxxx Xxxxxx, NPDC and Five Star (the
"Xxxxxx Agreement"), each Seller will sell the number of shares of the Five Star
Common Stock set forth next to its name to NPDC for $0.60 per share at the
closing (the "Closing") and NPDC shall purchase such shares conditioned on the
consummation of the closing provided for in the Xxxxxx
Agreement. NPDC may elect not to proceed with the purchase of any
Seller's shares of Five Star Common Stock if any other Seller does not sell its
shares of Five Star Common Stock to NPDC hereunder.
(b) At
the Closing, each Seller shall deliver to NPDC certificates representing the
Five Star Common Stock to be purchased by NPDC endorsed in blank or having
attached a duly executed stock power, in each case in proper form for transfer,
with signatures guaranteed by a commercial bank, and with all applicable stock
transfer tax stamps affixed thereto. By delivering
the certificates at the Closing, each Seller represents with respect to the
shares of Five Star Common Stock being sold by it, that it owns beneficially and
of record all of such shares, free and clear of any and all pledges, liens,
encumbrances or security interests of any kind or nature other than these
resulting from acts or failure to act of NPDC and except for the Lock-up
Agreement between each Seller and Five Star (the "Lock-up
Agreement"). The Sellers represent that except for the Lock-up
Agreement they have full right and authority to so transfer such shares to NPDC,
and all such transferred shares shall not be subject to any voting trust,
proxies or other agreements relating to the voting or transfer
thereof.
2.
Representations
of the Sellers.
(a) Each
Seller acknowledges that NPDC may now or at the Closing Date be in possession of
material inside information regarding NPDC or Five Star that such Seller is not
aware of. Nonetheless, each Seller willing has agreed to sell the
shares of Five Star Common Stock owned by it to NPDC pursuant to the terms of
this Agreement. Each Seller represents that it has retained the
services of Xxxxxx Xxxxxx to advise it with respect the sale provided herein and
he is a "purchaser representative" as defined in Regulation D under Securities
Act of 1933, as amended and he is a sophisticated investor with experience in
transactions in securities of the kind reflected in this Agreement and each
Seller has also sought and received the advice of legal counsel familiar with
transactions of this kind and it is not relying on any disclosure or
non-disclosure made or not made, or the completeness thereof, in connection with
or arising out of its sale of such shares and has no claims against NPDC with
respect thereto and if any such claim exists, each Seller, recognizing its
disclaimer of reliance and NPDC's reliance on such disclaimer as a condition for
entering into the purchase of such shares, covenants and agrees not to assert it
against NPDC or any affiliate of NPDC including Five Star.
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(b) Except
for the Lock-up Agreement, no authorization, consent or approval of, or
exemption by, any governmental or public body or authority is required to
authorize, or is required in connection with, the execution, delivery and
performance of this Agreement, or the taking of any action contemplated hereby,
by each Seller, except those that have been obtained or are
available.
(c) Neither
the execution and delivery of this Agreement, nor compliance with any of the
terms and provisions hereof, nor the consummation of any of the transactions
herein contemplated will: (i) violate any law, regulation, order, writ,
injunction or decree of any court or governmental department, commission, board,
bureau, agency or instrumentality applicable to any Seller, or (ii) conflict or
be inconsistent with, or result in any breach of, any of the terms, covenants,
conditions or provisions of, or constitute a default under the terms of any
indenture, mortgage, deed of trust, agreement or other instrument, to which any
Seller is a party or by which it may be bound or to which it may be subject
except the Lock-up Agreement.
3.
Specific
Performance. Each Seller understands and agrees that the
representations and promises of it contained in this Agreement are material
terms of this Agreement, and that NPDC was induced to enter into this Agreement
based upon such representations and promises. Each Seller
acknowledges that a breach of such representations and/or promises would result
in damages to NPDC which would be difficult to calculate and
determine. Accordingly, each Seller agrees that in the event of any
breach of this Agreement by it, NPDC may seek specific performance of this
Agreement by each Seller without the necessity of posting any bond or other
security and each Seller consents to the ordering of specific
performance.
4.
Illegality. If
any provision of this Agreement is held to be illegal, void, or unenforceable,
that holding shall have no effect upon, and shall not impair the legality or
enforceability
of, any other provision of this Agreement; provided, however, that, upon any
finding that any provision is illegal, void or unenforceable, each Seller
agrees, at NPDC's request, to promptly execute an amendment to this Agreement
with a provision of comparable scope that has been revised only to the extent
needed to render it legal and enforceable.
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5.
Arbitration. Except
as set forth in Section 3 of this Agreement, it is agreed that any claim or
dispute arising out of or relating to this Agreement will be settled by private
and binding arbitration to be conducted before a single arbitrator in the State
of New York. Unless otherwise mutually agreed by the parties, the
arbitration proceeding shall be conducted pursuant to the American Arbitration
Association Rules for the Resolution of Employment
Disputes. Arbitration may be invoked by written notice to the
American Arbitration Association, served upon the opposing party by registered
mail, stating with particularity the issue(s) posed for arbitration; provided,
however, that no request for arbitration may be made until thirty (30) days
after written notice of the claim or dispute has first been forwarded by
certified mail to the other party. The arbitration proceedings shall
be private and confidential.
6. (a) Further
Assurances. At any time and from time to time, each party
agrees, at its or his expense, to take such actions and to execute and deliver
such documents as may be reasonably necessary to effectuate the purposes of this
Agreement.
(b) Survival. The
covenants, agreements, representations, and warranties contained in or made
pursuant to this Agreement shall survive the sale of the Five Star Common Stock
and any delivery of the purchase price by NPDC, irrespective of any
investigation made by or on behalf of any party.
(c) Modification. This
Agreement sets forth the entire understanding of the parties with respect to the
subject matter hereof, supersede all existing agreements among them concerning
such subject matter, and may be modified only by a written instrument duly
executed by each party.
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(d) Notices. Any
notice or other communication required or permitted to be given hereunder shall
be in writing and shall be given by Federal Express, Express Mail, or similar
overnight delivery or courier service or delivered (in person or by telecopy,
telex, or similar telecommunications equipment) against receipt to the party to
whom it is to be given at the address of such party set forth below (or to such
other address as the party shall have furnished in writing in accordance with
the provisions of this Section. Any notice or other communication
shall be deemed given at the time of receipt thereof.
If to the Seller: | At the address set forth after its name | |
Fax: (000) 000-0000 | ||
If to NPDC or Five Star: | National Patent Development Corporation | |
00 Xxxx 00xx Xxxxxx
Xxxxx
0000
Xxx
Xxxx, XX 00000
Fax:
(000) 000-0000
Att:
President
|
(e) Waiver. Any
waiver by any party of a breach of any term of this Agreement shall not operate
as or be construed to be a waiver of any other breach of that term or of any
breach of any other term of this Agreement. The failure of a party to
insist upon strict adherence to any term of this Agreement on one or more
occasions will not be considered a waiver or deprive that party of the right
thereafter to insist upon strict adherence to that term of any other term of
this Agreement. Any waiver must be in writing signed by the party
granting the waiver.
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(f) Binding on Successors and
Assigns. The provisions of this Agreement shall be binding
upon and inure to the benefit of NPDC and Five Star and their respective
successors and assigns and each Seller and its assigns, heirs, and personal
representatives.
(g) Third Party
Beneficiaries. This Agreement does not create, and shall not
be construed as creating, any rights enforceable by any person not a party to
this Agreement.
(h) Headings. The
headings in this Agreement are solely for convenience of reference and shall be
given no effect in the construction or interpretation of this
Agreement.
(i) Miscellaneous. This
Agreement may be executed in counterparts, each of which shall be deemed an
original, but both of which together shall constitute one and the same
instrument. It shall be governed by and construed in accordance with
the laws of the State of New York, without giving effect to conflict of
laws. Except as provided in Section 5, any action, suit, or
proceeding arising out of, based on, or in connection with this Agreement or the
transactions contemplated hereby may be brought only in the United States
District Court for the Southern District of New York or any court of the State
of New York located in the Borough of Manhattan of the City of New York, and
each party covenants and agrees not to assert, by way of motion, as a defense,
or otherwise, in any such action, suit, or proceeding, any claim that it or he
is not subject personally to the jurisdiction of such court, that its or his
property is exempt or immune from attachment or execution, that the action, suit
or proceeding is brought in an inconvenient forum, that the venue of the action,
suit, or proceeding is improper, or that this Agreement or the subject matter
hereof may not be enforced in or by such court.
7. Termination of
Agreement. Effective upon the Closing, the Lock-up Agreements
shall be terminated with respect to each Seller who transfers all its shares of
Five Star Common Stock to NPDC.
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NATIONAL PATENT DEVELOPMENT CORPORATION | |||
By: |
/s/ Xxxx X. Xxxxxxx
|
||
Name: |
Vice President
|
||
Title: |
Xxxx X. Xxxxxxx
|
||
DATED:
March 25, 2008.
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|||
FIVE STAR PRODUCTS, INC. | |||
By: |
/s/ Xxxx X. Xxxxxxx
|
||
Name: |
Xxxx X. Xxxxxxx
|
||
Title: |
President
|
||
DATED: March 25, 2008. | |||
Number
of Shares
of Five Star Common
Stock
|
|||
33,333
|
By: |
/s/ Xxxxxx Xxxxx
|
|
Xxxxxx
Xxxxx
|
|||
000
Xxxxx Xxx, #0
|
|||
Xxx
Xxxx, XX 00000
|
|||
33,333
|
By: |
/s/ Xxxxxx Xxxxx
|
|
Xxxxxx
Xxxxx
|
|||
000
Xxxxx Xxx, #0
|
|||
Xxx
Xxxx, XX 00000
|
|||
33,333
|
Xxxxxx Xxxxxxx Xxxxx UTMA-NY | ||
By: |
/s/ Xxxxxx Xxxxx
|
||
Xxxxxx
Xxxxx, Custodian
|
|||
000
Xxxxx Xxx, #0
|
|||
Xxx
Xxxx, XX 00000
|
|||
7
35,000
|
Alexa Xxxxxxxx Xxxxx UTMANY | ||
By: |
/s/ Xxxxxx Xxxxx
|
||
Xxxxxx
Xxxxx, Custodian
|
|||
000
Xxxxx Xxxxxx, Xxx. 0XX
|
|||
Xxx
Xxxx, XX 00000
|
|||
33,333
|
By: |
/s/ Xxxxxx Xxxxxx
|
|
Xxxxxx
Xxxxxx
|
|||
000
Xxxxxxxxxxx Xxxx
|
|||
Xxxxxx,
XX 00000
|
|||
33,333
|
By: |
/s/ Xxxxx Xxxxxx
|
|
Xxxxx
Xxxxxx
|
|||
000
Xxxxxxxxxxx Xxxx
|
|||
Xxxxxx,
XX 00000
|
|||
33,333
|
Dylan Xxxxxxx Xxxxxx UTMA-FL | ||
By: |
/s/ Xxxxx Xxxxxx
|
||
Xxxxx
Xxxxxx, Custodian
|
|||
000
Xxxxxxxxxxx Xxxx
|
|||
Xxxxxx,
XX 00000
|
|||
33,333
|
Xxxxxx Xxxxxx UTMA-FL | ||
By: |
/s/ Xxxxx Xxxxxx
|
||
Xxxxx
Xxxxxx, Custodian
|
|||
000
Xxxxxxxxxxx Xxxx
|
|||
Xxxxxx,
XX 00000
|
|||
33,333
|
By: |
/s/ Xxxx Xxxxxx
|
|
Xxxx
Xxxxxx
|
|||
000
Xxxxxxxxxxx Xxxxx
|
|||
Xxxxxx,
XX 00000
|
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