ex10_1.htm


  
    Exhibit
      10.1

     

    NATIONAL
      PATENT DEVELOPMENT CORP.

    NON-QUALIFIED
      STOCK OPTION AGREEMENT

     

    AGREEMENT,
      dated July 30, 2007 (the “Grant Date”), between National Patent Development
      Corporation, a Delaware corporation (the “Company”), with an address at 10 East
      40th Street, Suite 3110, New York, NY 10016, and Ira Sobotko (the “Grantee”),
      with an address c/o 10 East 40th Street, Suite 3110, New York, NY
      10016.

    


    WHEREAS,
      the Board has, on the Grant Date, pursuant to the National Patent Development
      Corporation 2003 Incentive Stock Plan, a copy of which is annexed hereto as
      Exhibit A (the “Plan”; capitalized terms used but not defined herein having the
      meanings ascribed thereto in the Plan), granted to the Grantee options to
      purchase shares of the common stock, par value $.01 per share, of the Company
      (the “Common Stock”), as hereinafter set forth, and authorized the execution and
      delivery of this Agreement;

    


    NOW,
      THEREFORE, the parties hereto agree as follows:

    


    1.           The
      Grantee is hereby granted options (the “Options”) to purchase from the Company,
      subject to the terms and conditions set forth in this Agreement, all or any
      part
      of 100,000 shares of Common Stock (the “Option Shares”) at an initial purchase
      price of $2.68 per share.

     

    2.           The
      Options shall be exercisable as follows and subject to the continuous employment
      of the Grantee with the Company until the applicable vesting date:

     

    unless
      sooner terminated as hereinafter provided, this Option shall become vested
      and
      exercisable with respect to up to one-third (rounded down to the nearest whole
      Option Share) of the Option Shares on the first anniversary of the Grant Date,
      one-third (rounded down to the nearest whole Option Share) of the Option Shares
      on the second anniversary of the Grant Date and the balance of the Option Shares
      on the third anniversary of the Grant Date.

     

    3.The
      Options shall automatically become vested and shall be immediately exercisable
      in full upon the occurrence of a Change in Control of the
      Company.   For purposes of this Agreement, a “Change in Control”
of the Company shall be deemed to have occurred if (i) a change in control
      of
      the Company of a nature that would be required to be reported in response to
      Item 5.01 of Current Report on Form 8-K pursuant to Section 13 or 15(d) of
      the
      Exchange Act, other than a change of control resulting in control by Grantee
      or
      a group including Grantee occurs, (ii) any “person” (as such term is used in
      Sections 13(d) and 14(d) of the Exchange Act), other than Grantee or a group
      including Grantee, is or becomes the “beneficial owner” (as defined in Rule
      13d-3 under the Exchange Act), directly or indirectly, of securities of the
      Company representing 20% or more of the combined voting power of the Company’s
      then outstanding securities, or (iii) within any 12-month period beginning
      on or
      after the date that is three months after the date hereof, the persons who
      were
      directors of the Company immediately before the beginning of such period (the
      "Incumbent Directors") shall cease (for any reason other than death) to
      constitute at least a majority of the Board of the Company or the board of
      directors of any successor to the Company, provided that any director who was
      not a director of the Company immediately before the beginning of such period
      shall be deemed to be an Incumbent Director if such director was elected to
      the
      Board by, or on the recommendation of or with the approval of, at least
      two-thirds of the directors who then qualified as Incumbent Directors either
      actually or by prior operation of this Section 3, unless such election,
      recommendation or approval was the result of an actual or threatened election
      contest of the type contemplated by Regulation 14a-11 promulgated under the
      Exchange Act of  or any successor
      provision.  Notwithstanding the foregoing, no Change of Control shall
      be deemed to occur as a result of the beneficial ownership of securities of
      the
      Company by Bedford Oak Advisors, LLC, Bedford Oak Partners, L.P. or Harvey
      P.
      Eisen.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    4.           All
      Options shall terminate and thereafter no longer be exercisable (subject to
      Section 8) on the tenth anniversary of the Grant Date (the “Expiration
      Date”).

     

    5.           Option
      Shares purchased pursuant to this Agreement shall be paid for in full at the
      time of purchase.  Payment may be made in cash, check, tendering by
      attestation shares of Common Stock, or a combination thereof, provided that
      such
      consideration shall be such that the Option Shares shall be fully paid and
      nonassessable.  If payment is made in whole or part by tender of
      shares of Common Stock, such shares shall be valued at the Fair Market Value
      thereof.  Upon receipt of written notice of exercise of Options in the
      form attached hereto as Exhibit B together with payment and delivery of any
      other required documentation, the Company shall, without stock transfer tax
      to
      the Grantee or any other person entitled to exercise such Options, deliver
      to
      the person exercising such Options a certificate or certificates for the Option
      Shares so purchased.  It shall be a condition to the performance of
      the Company’s obligation to issue or transfer Common Stock upon exercise of
      Options that the Grantee or other person exercising such Options pay, or make
      provision satisfactory to the Company for the payment of, any taxes (other
      than
      stock transfer taxes) which the Company is obligated to collect with respect
      to
      the issue or transfer of Common Stock upon exercise, including any Federal,
      state, or local withholding taxes.

     

    6.           No
      person shall have any rights as a stockholder with respect to any Option Shares
      until the date a stock certificate is issued to such person for such Option
      Shares.  Except as otherwise expressly provided herein, no adjustment
      shall be made for dividends or other rights for which the record date is prior
      to the date such stock certificate is issued.

     

    7.           Options
      are not transferable otherwise than by will or the laws of descent and
      distribution and are exercisable, during the lifetime of the Grantee, only
      by
      the Grantee or, in the event of Grantee’s legal disability, by the Grantee’s
      legal representative.  The Grantee or his representative shall give
      the Company notice of any transfer, specifying the name and address of the
      transferee and the number and class of Options transferred.

     

    8.           (a)           If,
      for any reason other than death or disability, Grantee’s Termination of Service
      occurs prior to the Expiration Date, such Options may be exercised, but only
      to
      the extent of the number of Option Shares and with the exercise price with
      respect to which the Grantee
      could have exercised it on the date of such Termination of Service, by the
      Grantee at any time prior to the earlier of (i) the Expiration Date and (ii)
      two
      months after the date of such Termination of Service.


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (b)           If
      Grantee becomes disabled (within the meaning of section 22(e)(3) of the Code)
      prior to the Expiration Date, and the Grantee’s Termination of Service occurs as
      a consequence of such disability, the Options may be exercised, but only to
      the
      extent of the number of Option Shares and with the exercise price with respect
      to which the Grantee could have exercised it on the date of such Termination
      of
      Service, by the Grantee at any time prior to the earlier of (i) the Expiration
      Date and (ii) six months after the date of such Termination of
      Service.  In the event of the Grantee’s legal disability, the Options
      may be exercised by the Grantee’s legal representative.

    


    (c)           If
      Grantee’s Termination of Service occurs as a result of death prior to the
      Expiration Date, or if the Grantee dies following his or her Termination of
      Service but prior to the expiration of the period determined under Sections
      8(a)
      and (b) above, the Options may be exercised, but only to the extent of the
      number of Option Shares and with the exercise price with respect to which the
      Grantee could have exercised them on the date of his or her death, by the
      Grantee’s estate, personal representative, or beneficiary who acquired the right
      to exercise the Options by bequest or inheritance or by reason of the death
      of
      the Grantee.  Such post-death exercise may occur at any time prior to
      the earlier of (i) the Expiration Date and (ii) one year after the date of
      the
      Grantee’s death.

    


    (d)           If
      the issuance of any shares of Common Stock on the exercise of any Options
      pursuant to this Section 8 has not, at the time of such exercise, been
      registered under the Securities Act, the Grantee or other person exercising
      such
      Options shall execute and deliver such documents as the Company may reasonably
      require to ensure compliance with the Securities Act and other applicable
      securities laws, including acknowledgement that such shares are “restricted
      securities” as defined in the regulations under the Securities Act and are
      acquired for investment purposes only and not with a view to resale or
      distribution.

    


    9.           The
      number and kind of shares issuable on exercise of, and the exercise price of,
      the Options represented hereby shall be subject to adjustment as provided in
      the
      Plan.

     

    10.           The
      Company shall at all times reserve and keep available out of its authorized
      Common Stock the full number of shares of Common Stock issuable upon exercise
      of
      the Options.

     

    11.           (a)           If
      at any time the Committee or the Board shall determine, in its discretion,
      that
      the listing, registration, or qualification of any of the Option Shares upon
      any
      securities exchange or under any state or federal law, or the consent or
      approval of any governmental regulatory body, is necessary or desirable as
      a
      condition of, or in connection with, the issue or purchase of Option Shares,
      the
      Options may not be exercised in whole or in part unless such listing,
      registration, qualification, consent, or approval shall have been effected
      or
      obtained free of any conditions not acceptable to the Committee or the Board,
      as
      applicable.  Any notice of exercise of Options which would be
      effective except for this Section 11 shall be deemed effective immediately
      upon
      satisfaction of all such conditions (even if such notice could not otherwise
      then have been given).

     


    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (b)           The
      Company shall not be obligated to sell or issue any Option Shares in any manner
      in contravention of the Securities Act, the Exchange Act, or any state
      securities law.  The Board may, at any time, require as a condition to
      the exercise of Options that the Option Shares be acquired for investment
      purposes only and that the certificate therefor contain a legend restricting
      transfer.

     

    12.           All
      notices hereunder shall be in writing, and (a) if to the Company, shall be
      delivered personally to the Secretary of the Company or mailed to its principal
      office, addressed to the attention of the Secretary, (b) if to the Grantee,
      shall be delivered personally or via courier or mailed via certified mail,
      postage prepaid, return receipt requested to the Grantee at the address first
      set forth above, or (c) if to any subsequent holder of Options or Option Shares,
      to the address specified for such holder in the notice provided for in Section
      7
      or on the stock records of the Company.  Such addresses may be changed
      at any time by notice from one party to the other.

     

    13.           All
      decisions or interpretations made by the Committee with regard to any question
      arising hereunder shall be binding and conclusive on the Company and the
      Grantee.

     

    14.           This
      Agreement shall bind and inure to the benefit of the parties hereto and the
      successors and assigns of the Company and, to the extent provided in Section
      7,
      the executors, administrators, legatees, heirs, guardians, legal
      representatives, successors, and assigns of the Grantee.

     

    15.           This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of Delaware, without giving effect to rules governing the conflict of
      laws.

     

    


    IN
      WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
      day
      and year first above written.

     

    
      
        	 	
                NATIONAL
                  PATENT DEVELOPMENT
   CORPORATION

              	 
	 	 	 	 
	
                 

              	
                By:
                  

              	/s/ JOHN
                C. BELKNAP	 
	 	 	Title :
                Vice
                President	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 /s/
                IRA  J. SOBOTKO	 
	 	Ira
                Sobotko	 


      

       




    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    


    EXHIBIT
      A

    


    NATIONAL
      PATENT DEVELOPMENT CORPORATION

    2003
      INCENTIVE STOCK PLAN


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    EXHIBIT
      B

    


    EXERCISE
      NOTICE

    


    The
      undersigned, pursuant to the
      foregoing Option Agreement (terms used herein have the meanings as defined
      in
      the Option Agreement), hereby elects to exercise Options for ____________ shares
      of Common Stock (the “Shares”) at an exercise price of $____ per share, and
      herewith (or as otherwise provided in the Option Agreement) makes payment in
      full therefor pursuant to such Option Agreement.

    


    1.           If
      the sale of the Shares and the resale thereof has not, prior to the date hereof,
      been registered pursuant to a registration statement filed and declared
      effective under the Securities Act of 1933, as amended (the “Act”), the
      undersigned hereby agrees, represents, and warrants that:

    


    (a)           I
      am acquiring the Shares for my own account (and not for the account of others)
      for investment and not with a view to the distribution or resale
      thereof;

    


    (b)           By
      virtue of my position, I have access to the same kind of information which
      would
      be available in a registration statement filed under the Act;

    


    (c)           I
      am a sophisticated investor;

    


    (d)           I
      understand that I may not sell or otherwise dispose of such shares in the
      absence of either a registration statement under the Act or an exemption from
      the registration provisions of the Act; and

    


    (e)           The
      certificates representing such shares may contain a legend to the effect of
      (d)
      above.

    


    2.           If
      the sale of the Shares and the resale thereof has been registered under the
      Act,
      the undersigned hereby represents and warrants that I have received the
      applicable prospectus and all subsequent reports incorporated therein by
      reference.

     

    
      
        	 	Very
                truly yours,	 
	 	 	 
	
                 

              	 	 
	 	(type
                name under signature
                line)	 


      

      


      Dated: _________________________