ex10_6.htm


  
    Exhibit
10.6

    


    FIVE
STAR PRODUCTS, INC.

    10
East 40th Street,
Suite 3110

    New
York, New York 10016

    


     

    
      	 	June 26,
    2008


    

     

    John C.
Belknap

    c/o Five
Star Products, Inc.

    10 East
40th Street, Suite 3110

    New York,
NY 10016

    


    Re:  Five Star Products, Inc. –
Cancellation of Unvested Shares

    


    Reference is made to (i) Five Star
Products, Inc., a Delaware corporation, with an address at 10 East 40th Street,
Suite 3110, New York, NY (the “Company”), (ii) National Patent Development
Corporation, a Delaware corporation, with an address at 10 East 40th Street,
Suite 3110, New York, NY (“National Patent”), (iii) that certain Restricted
Stock Agreement (the “Restricted Stock Agreement”), dated as of March 2, 2007,
between the Company and Mr. John C. Belknap (“Mr. Belknap”), annexed hereto as
Annex A and (iv) that certain Tender Offer and Merger Agreement (the “Tender
Offer Agreement”) dated as of June 26, 2008, among National Patent, NPDV
Acquisition Corp. (the “Purchaser”) and the Company.

    


    Pursuant to the Restricted Stock
Agreement (the “Restricted Stock Agreement”), Mr. Belknap was granted 1,000,000
restricted shares (collectively, the “Shares”) of the Company’s common stock,
par value $0.01 per share (the “Common Stock”). As of the date hereof, 330,000
shares subject to the Restricted Stock Agreement have vested (the “Vested
Shares”) and the remainder of the Shares granted to Mr. Belknap under the
Restricted Stock Agreement vest as provided in the Restricted Stock
Agreement.

     

    This agreement (this “Agreement”) is to
confirm and memorialize the understanding by and among National Patent, the
Company and Mr. Belknap pursuant to which the Company shall deliver to Mr.
Belknap the Purchase Price (as defined herein) in exchange for the termination
of the Restricted Stock Agreement covering the remaining 667,000 unvested Shares
(the “Unvested Shares”), upon the terms and subject to the conditions set forth
herein.

    


    Pursuant to the Tender Offer Agreement,
(i) the Purchaser shall acquire all of the outstanding shares of Common Stock by
commencing a tender offer (the “Tender Offer”) to purchase up to 100% of the
shares of Common Stock at the Offer Price (as defined in the Tender Offer
Agreement) and (ii) following the consummation of the Tender Offer, the
Purchaser shall merge with and into the Company, with the Company being the
surviving corporation (the “Merger”).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    In connection with the Tender Offer and
Merger, National Patent, the Company and Mr. Belknap hereby agree that in
exchange for the termination of the Restricted Stock Agreement and Mr. Belknap’s
termination of his rights to the Unvested Shares, and in consideration for past
services rendered by Mr. Belknap to the Company and future services to be
rendered by Mr. Belknap to the Company, the Company shall pay to Mr. Belknap,
promptly following the completion of the Merger (or such earlier date as
selected by the Company), a purchase price (the “Purchase Price”) for such
Unvested Shares equal to $120,034 (subject to reduction for withholding
taxes).  Upon payment of the Purchase Price, the Restricted Stock
Agreement shall terminate and no party thereto shall be of no further force or
effect and shall have any rights or obligations thereunder except to the extent
the Restricted Stock Agreement relates to the Vested Shares.

    


    This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and shall be interpreted
and construed in accordance with the laws of the State of New
York.  This Agreement sets forth the entire agreement between the
parties hereto and shall not be modified except by written agreement signed by
the parties hereto.  This Agreement shall terminate and be of no force
and effect if the Merger is not consummated by December 31, 2008.

    


    By countersigning this Agreement where
indicated below and returning it to the Company, Mr. Belknap agrees to, and
accepts, the terms of this Agreement.

    


     

    
      	 	
              Sincerely,

            	 
	 	 	 
	 	FIVE
      STAR PRODUCTS, INC.	 
	 	 	 	 
	
               

            	
              By:
      

            	/s/ Ira J. Sobotko	 
	 	 	Name:
      Ira J. Sobotko	 
	 	 	Title:
      Senior Vice President, Finance	 
	 	 	 	 


    

     

     

    
      
        	 	
                NATIONAL
      PATENT DEVELOPMENT
CORPORATION	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ John C. Belknap	 
	 	 	Name:
      John C. Belknap	 
	 	 	Title:
      Vice President	 
	 	 	 	 


      

    

    


    
 

    


    AGREED
UPON AND ACCEPTED BY:

    
      


      


       

      
        
          
            	/s/ John C.
      Belknap	 
	JOHN C. BELKNAP,
      Individually	 


          

           

        

      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    ANNEX
A