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Exhibit 10.3

GUARANTY
 
In order to induce ComVest Capital, LLC (the “Lender”), to (a) enter into that
certain Amended and Restated Revolving Credit and Term Loan Agreement of even
date herewith (as same may be amended, modified, supplemented and/or restated
from time to time, the “Loan Agreement”) with LaPolla Industries, Inc. (the
“Obligor”), (b) accept from the Obligor that certain Amended and Restated Term
Note of even date herewith in the principal amount of $3,000,000 (as same may be
amended, modified, supplemented and/or restated from time to time, the “Note”),
being issued pursuant to the Loan Agreement, and (c) extend to the Obligor the
Term Loan contemplated by the Loan Agreement, the undersigned, RICHARD KURTZ, an
individual (the “Guarantor”), hereby guarantees to the Lender, and/or any other
holder(s) of any Guaranteed Obligations (as such term is hereinafter defined)
from time to time, the full and timely payment and performance by the Obligor of
all principal, interest, collection costs and other obligations from time to
time outstanding under, in respect of or pursuant to the Term Loan made under
the Loan Agreement and further evidenced by the Note (collectively, the
“Guaranteed Obligations”).  This is an absolute, irrevocable and unconditional
guaranty of payment and not merely of collection, and the Lender may
(notwithstanding the Guarantor’s joint and several liability with the Obligor
and any and all other guarantor(s) of any of the Guaranteed Obligations) enforce
this Guaranty without the need to resort to any proceedings or obtain any
judgment as against the Obligor or any guarantor, or to make any resort to or
against any collateral pledged by the Obligor or any guarantor to secure the
payment and performance of any of the Guaranteed Obligations; and in the event
that there shall at any time occur and be continuing any Event of Default under
and as defined in the Loan Agreement, or if the Guaranteed Obligations shall
otherwise become accelerated in accordance with the provisions of the Loan
Agreement, then the Guarantor shall forthwith pay to the Lender, on demand, all
Guaranteed Obligations.
 
This Guaranty shall remain in full force and effect until such time as the
Obligor or the Guarantor has delivered to the Lender financial statements and
calculations which accurately reflect and demonstrate that the Obligor has
maintained a ratio of EBITDA to Debt Service (as such terms are defined in the
Loan Agreement) of 1.25 to 1.0 for any period of three (3) consecutive fiscal
quarters commencing after the date hereof (the “Release Condition”).  In the
event that any such financial statements and calculations shall be inaccurate to
such an extent as to cause such ratio not to be met in any of the three (3)
subject fiscal quarters, then this Guaranty shall be deemed to have remained in
effect at all times without regard to any claimed satisfaction of such Release
Condition.
 
1.           Until that date which is one (1) year after the indefeasible
payment in full of the Guaranteed Obligations, the Guarantor makes the following
waiver:  THE GUARANTOR SHALL NOT TAKE BY ASSIGNMENT, SUBROGATION OR OTHERWISE
ANY CLAIM OR COLLATERAL THAT THE LENDER MIGHT HAVE OR OBTAIN AGAINST OR FROM THE
OBLIGOR, AND THE GUARANTOR IRREVOCABLY WAIVES AND RELEASES, IN ADDITION TO THOSE
CLAIMS, ANY CLAIM FOR UNJUST ENRICHMENT, INDEMNIFICATION, CONTRIBUTION OR
REIMBURSEMENT, AND ANY AND ALL OTHER SUBROGATION CLAIMS AGAINST THE OBLIGOR ON
ACCOUNT OF ANY PAYMENTS HEREUNDER, WHETHER BY STATUTE, BY CONTRACT, BY LAW OR IN
EQUITY, WHETHER ACTUAL OR CONTINGENT, AND WHETHER NOW OR HEREAFTER ARISING.
 
 
 

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2.           In order to induce the Lender to accept this Guaranty, the
Guarantor hereby represents and warrants that (a) this Guaranty constitutes the
legal, valid and binding obligation of the Guarantor enforceable against the
Guarantor in accordance with its terms, except to the extent that enforceability
may be limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors’ rights generally, and by general principles of equity,
and (b) the Guarantor’s execution, delivery and performance of this Guaranty
does not conflict with or constitute a breach of any agreement or obligation to
which the Guarantor is a party or by which any of his property or assets is
bound, or require the consent of any other person.
 
3.           The Guarantor hereby acknowledges and confirms that, as a principal
shareholder of the Obligor, the Guarantor will derive immediate and substantial
benefit from the loans and advances to be made from time to time to the Obligor
under the Loan Agreement.  The Guarantor hereby further acknowledges and agrees
that the validity of this Guaranty and the Guarantor’s obligations hereunder
shall in no way be terminated, modified, affected, impaired or diminished by
reason of any of (i) the granting by the Lender of any consent, indulgence,
extension, renewal, waiver, compromise or release to the Obligor or any other
guarantor(s) of any of the Guaranteed Obligations, (ii) any failure by the
Lender to insist in any one or more instances upon strict performance or
observance by the Obligor and/or any such other guarantor(s) of any of the
terms, provisions or conditions of the Loan Agreement, the Note and/or any
security agreements, collateral agreements or other agreements or instruments
establishing or evidencing any collateral security for the Guaranteed
Obligations, the Loan Agreement, the Note, this Guaranty or any other guaranty
of any of the Guaranteed Obligations (collectively, the “Loan Documents”),
(iii) any assertion or non-assertion by the Lender against the Obligor and/or
any such other guarantor(s) of any of the rights or remedies reserved to the
Lender in the Loan Documents (including, without limitation, any application of
payments received from or in respect of the Obligor), (iv) any forbearance by
the Lender from exercising any of its rights or remedies as aforesaid, (v) any
bankruptcy, insolvency, receivership, reorganization, liquidation or other
similar proceeding relating to the Obligor and/or any such other  guarantor(s),
(vi) any relief of the Obligor and/or any such other guarantor(s) from any of
its obligations under the Loan Documents, by operation of law, in equity or
otherwise, (vii) any offset or defense (other than the defense of full payment)
in favor of the Obligor, the Guarantor and/or any such other guarantor(s)
against the Lender, (viii) any amendment, modification, extension, renewal,
termination, compromise or waiver under or in respect of the Loan Documents,
(ix) any sale, release or other disposition of any collateral security for the
Guaranteed Obligations, (x) any failure to take  any action in respect of any
such collateral, (xi) any transfer, assignment or negotiation of any of the Loan
Documents and/or any collateral security as aforesaid (including, without
limitation, this Guaranty), or (xii) any application of payments, in accordance
with the Loan Agreement, to any other Obligations prior to application to the
Guaranteed Obligations.  The Guarantor hereby waives any and all notice, demand,
presentment, protest and other such privilege or formality, and all notice in
respect of the creation, renewal, extension or accrual of any Guaranteed
Obligations.
 
4.           The Guarantor hereby covenants and agrees that, for so long as any
Guaranteed Obligations remain outstanding and/or the Obligor has any right to
make further borrowings under the Loan Agreement, the Guarantor shall, within 30
days after the filing thereof, provide to the Lender true and complete copies of
all federal and state tax returns and other tax filings made by or on behalf of
the Guarantor and/or his spouse.
 
 
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5.           This Guaranty may be executed in any number of counterparts, each
of which shall be deemed an original but all of which together shall constitute
one and the same instrument.
 
6.           This Guaranty shall be binding upon the undersigned Guarantor and
his heirs, executors, administrators, personal representatives, successors and
assigns, shall inure to the benefit of the Lender and its successors and
assigns, and shall terminate only upon the indefeasible payment and performance
in full of all of the Guaranteed Obligations.  No assignment of, or succession
to, the obligations of the Guarantor hereunder shall in any way terminate,
modify, affect, impair or diminish the obligations of the Guarantor hereunder,
absent an express written agreement to such effect duly executed by the Lender.
 
7.           No delay on the part of the Lender in exercising any rights
hereunder, or any failure by the Lender to exercise any such rights, shall
operate as a waiver of any such rights for any purposes, it being understood
that the Lender may exercise any and all of its rights hereunder at any time and
from time to time pursuant to the terms hereof.
 
8.           This Guaranty may not be terminated, modified or amended except by
a writing duly executed by the Lender and the Guarantor.
 
9.           This Guaranty shall be governed by and construed in accordance with
the laws of the State of New York, without giving effect to principles of
conflicts of laws (other than Sections 5-1401 and 5-1402 of the New York General
Obligations Law).  The Guarantor hereby consents to the jurisdiction of all
courts (state and/or federal) sitting in the State of New York in connection
with any action or proceeding under or in respect of this Guaranty, and waives
trial by jury in any such action or proceeding.
 
10.           In the event that the holder hereof shall, after default by the
Guarantor of any of his obligations hereunder, place this Guaranty in the hands
of any attorney for enforcement and/or collection, through legal proceedings or
otherwise, the Guarantor shall pay to the holder hereof all costs and expenses
of enforcement and collection (including reasonable attorneys’ fees).
 
11.           All capitalized terms used herein without definition have the
respective meanings ascribed to them in the Loan Agreement.
 
IN WITNESS WHEREOF, the undersigned Guarantor, intending to be legally bound
hereby, has executed this Guaranty as of this 30th day of June, 2008.
 

 

  /s/  Richard J. Kurtz   Richard Kurtz

 

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