Exhibit 10.2
SECURITY AGREEMENT (Multiple Use)
Effective Date: September 7, 2016
1.The Security. The undersigned LAPOLLA INDUSTRIES, INC., a Delaware corporation
(the “Pledgor”), hereby assigns and grants to BANK OF AMERICA, N.A., its
successors and assigns (“BANA”), and to Bank of America Corporation and its
subsidiaries and affiliates (BANA and all such secured parties, collectively,
the “Bank”) a security interest in the following described property now owned or
hereafter acquired by the Pledgor (the “Collateral”):
(a)All accounts, and all chattel paper, instruments, deposit accounts, letter of
credit rights, and general intangibles related thereto; and all returned or
repossessed goods which, on sale or lease, resulted in an account.
(b)All inventory.
(c)All equipment now owned or hereafter acquired by the Pledgor,
(including, but not limited to, the equipment described in the attached
Equipment Description, if any).
(d)All of the Pledgor’s deposit accounts with the Bank. The Collateral shall
include any renewals or rollovers of the deposit accounts, any successor
accounts, and any general intangibles and choses in action arising therefrom or
related thereto.
(e)All instruments, chattel paper, and certificates of deposit.
(f)All general intangibles. The Collateral shall include all good will connected
with or symbolized by any of such general intangibles.
(g)All negotiable and nonnegotiable documents of title covering any
Collateral.
(h)All accessions, attachments and other additions to the Collateral, and all
tools, parts and equipment used in connection with the Collateral.
(i)All substitutes or replacements for any Collateral, all cash or non-cash
proceeds (including insurance proceeds), products, rents and profits of the
Collateral, and all income, benefits and property receivable on account of the
Collateral, and all supporting obligations covering any Collateral.

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(j)All books, data and records pertaining to any Collateral, whether in the form
of a writing, photograph, microfilm or electronic media, including but not
limited to any computer-readable memory and any computer software necessary to
process such memory (“Books and Records”).
2.The Indebtedness. The obligations secured by this Security Agreement (this
“Agreement”) are the payment and performance of (a) all present and future
Indebtedness of the Pledgor to the Bank; (b) all obligations of the Pledgor and
rights of the Bank under this Agreement; and (c) all present and future
obligations of the Pledgor to the Bank of other kinds. Each party obligated
under any Indebtedness is referred to in this Agreement as a “Debtor.”
“Indebtedness” is used in its most comprehensive sense and includes any and all
advances, debts, obligations and liabilities of the Debtor, now or hereafter
existing, absolute or contingent, liquidated or unliquidated, determined or
undetermined, voluntary or involuntary, including under any swap, derivative,
foreign exchange, hedge, or other arrangement (“Swap”), deposit, treasury
management or other similar transaction or arrangement, and whether the Debtor
may be liable individually or jointly with others, or whether recovery upon such
Indebtedness may be or hereafter becomes unenforceable, and further includes
without limitation all obligations of Pledgor under that certain Loan Agreement
dated of even date herewith between Pledgor and BANA, as lender (as amended,
restated or supplemented from time to time, the “Loan Agreement”).
“Indebtedness” secured by the Collateral of such Pledgor shall not include
obligations arising under any Swap to which it is not party if, and to the
extent that, all or a portion of the guaranty by such Pledgor to the Bank of, or
the grant by such Pledgor of a security interest to the Bank to secure, such
Swap, would violate the Commodity Exchange Act (7 U.S.C., Sec. 1. et. seq.) by
virtue of such Pledgor’s failure to constitute an “eligible contract
participant” as defined in the Commodity Exchange Act at the time such guaranty
or grant of such security interest becomes effective with respect to such Swap.

3.Pledgor’s Covenants. The Pledgor represents, covenants and warrants that
unless compliance is waived by the Bank in writing:
(a)    The Pledgor agrees: (i) to indemnify the Bank against all losses, claims,
demands, liabilities and expenses of every kind caused by any Collateral, other
than any such losses, claims, demands, liabilities and expenses that are
determined in a final, nonappealable judgment by a court of competent
jurisdiction to have resulted from the Bank’s gross negligence or willful
misconduct; (ii) to permit the Bank to exercise its rights under this Agreement;
(iii) to execute and deliver such documents as the Bank reasonably deems
necessary to create, perfect and continue the security interests contemplated by
this Agreement; (iv) not to change its name, and as applicable, its chief
executive office or the jurisdiction in which it is organized and/or registered
or its business structure without giving the Bank at least 30 days prior written
notice; (v) not to change the places where the Pledgor keeps any Collateral or
the Pledgor’s Books and Records concerning the Collateral without giving the
Bank prior written notice of the address to which the Pledgor is moving same;
and (vi) to cooperate with the Bank in perfecting all security interests granted
by this Agreement and in obtaining such agreements from third parties as the
Bank reasonably deems necessary, proper

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or convenient in connection with the preservation, perfection or enforcement of
any of its rights under this Agreement.
(b)    The Pledgor agrees with regard to the Collateral, unless the Bank agrees
otherwise in writing: (i) that the Bank is authorized to file financing
statements in the name of the Pledgor to perfect the Bank’s security interest in
the Collateral; (ii) that if the Pledgor fails to do so upon request of the
Bank, the Bank is authorized to notify any account debtors, any buyers of the
Collateral, or any other persons of the Bank’s interest in the Collateral, (iii)
where applicable, to operate the Collateral in accordance with all applicable
statutes, rules and regulations relating to the use and control of the
Collateral, and not to use any Collateral for any unlawful purpose or in any way
that would void any insurance required to be carried; (iv) except as permitted
under the Loan Agreement, not to remove the Collateral from the Pledgor’s
premises and locations set forth on Schedule 1 attached hereto (as supplemented
from time to time by notices delivered pursuant to Section 3(a)(v)), except in
the ordinary course of the Pledgor’s business or to transfer such Collateral
among such locations; (v) to pay when due all license fees, registration fees
and other charges in connection with any Collateral; (vi) not to permit any lien
on the Collateral, including without limitation, liens arising from repairs to
or storage of the Collateral, except in favor of the Bank or such liens and
encumbrances permitted under the Loan Agreement; (vii) not to sell, hypothecate
or dispose of, nor permit the transfer by operation of law of, any Collateral or
any interest in the Collateral, except sales of inventory to buyers in the
ordinary course of the Pledgor’s business and except as permitted under the Loan
Agreement; (viii) to permit the Bank to inspect the Collateral in accordance
with the Loan Agreement; (ix) to keep, in accordance with generally accepted
accounting principles applied consistently with those applied in the preparation
of financial statements provided to the Bank prior to the date of this
Agreement, complete and accurate Books and Records regarding all the Collateral,
and to permit the Bank to inspect the same and make copies at any reasonable
time on reasonable notice; (x) if requested by the Bank, to receive and use
reasonable diligence to collect the Collateral consisting of accounts and other
rights to payment and proceeds, in trust and as the property of the Bank, and to
immediately endorse as appropriate and deliver such Collateral to the Bank daily
in the exact form in which they are received together with a collection report
in form satisfactory to the Bank; (xi) to give only normal allowances and
credits in the ordinary course of business and to advise the Bank promptly if
any non-ordinary course allowance or credit adversely affects any rights to
payment or proceeds of in excess of $250,000 in any material respect; (xiii)
from time to time, when requested by the Bank, to prepare and deliver a schedule
of the Collateral subject to this Agreement so designated in such notice and to
assign in writing and deliver to the Bank such assignment with respect to all
accounts, contracts, leases and other chattel paper, instruments, and documents
as the Bank may reasonably request; (xiv) in the event the Bank elects to
receive payments or rights to payment or proceeds hereunder at any time after
the occurrence and during the continuance of an Event of Default, to pay all
expenses incurred by the Bank, including reasonable expenses of accounting,
correspondence, collection efforts, reporting to account or contract debtors,
filing, recording, record keeping and other reasonable expenses; and (xv) to
provide any service and do any other acts which may be necessary to maintain,
preserve and protect all the Collateral (ordinary wear and tear excepted) and,

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as appropriate and applicable, to keep all the Collateral in good and saleable
condition, to deal with the Collateral in accordance with the standards and
practices adhered to generally by users and manufacturers of like property, and
to keep all the Collateral free and clear of all defenses, rights of offset and
counterclaims (other than liens permitted by the Loan Agreement).
(c)    If any Collateral is or becomes the subject of any registration
certificate, certificate of deposit or negotiable document of title, including
any warehouse receipt or bill of lading, upon the request of the Bank the
Pledgor shall promptly deliver such document to the Bank, together with any
necessary endorsements.
(d)    The Pledgor will maintain and keep in force all risk insurance covering
the Collateral against fire, theft, liability and extended coverages (including
without limitation flood, windstorm coverage and hurricane coverage as
applicable), to the extent that any Collateral is of a type which can be so
insured, in each case, as provided in the Loan Agreement.
(e)    The Pledgor will not attach any Collateral to any real property or
fixture in a manner which might cause such Collateral to become a part thereof
unless the Pledgor first obtains the written consent of any owner, holder of any
lien on the real property or fixture, or other person having an interest in such
property to the removal by the Bank of the Collateral from such real property or
fixture. Such written consent shall be in form and substance acceptable to the
Bank and shall provide that the Bank has no liability to such owner, holder of
any lien, or any other person.
4.Bank Rights. The Pledgor appoints the Bank its attorney in fact to perform any
of the following rights, which are coupled with an interest, are irrevocable
until termination of this Agreement and may be exercised from time to time by
the Bank’s officers and employees, or any of them, : (a) at any time after the
occurrence and during the continuance of an Event of Default, to perform any
obligation of the Pledgor hereunder in the Pledgor’s name or otherwise; (b) at
any time after the occurrence and during the continuance of an Event of Default,
to release persons liable on the Collateral and to give receipts and
acquittances and compromise disputes; (c) at any time after the occurrence and
during the continuance of an Event of Default, to release or substitute
security; (d) whether or not an Event of Default exists, to prepare, execute,
file, record or deliver notes, assignments, schedules, designation statements,
financing statements, continuation statements, termination statements,
statements of assignment, applications for registration or like documents to
perfect, preserve or release the Bank’s interest in the Collateral; (e) at any
time after the occurrence and during the continuance of an Event of Default, to
take cash, instruments for the payment of money and other property to which the
Bank is entitled; (f) whether or not an Event of Default exists, to verify facts
concerning the Collateral by inquiry of obligors thereon, or otherwise, in its
own name or a fictitious name; (g) at any time after the occurrence and during
the continuance of an Event of Default, to endorse, collect, deliver and receive
payment under instruments for the payment of money constituting or relating to
the Collateral; (h) at any time after the occurrence and during the continuance
of an Event of Default, to prepare, adjust, execute, deliver and receive payment
under insurance claims, and to collect and receive payment of and endorse any
instrument in payment of loss or returned premiums or any other insurance refund
or return, and to apply such amounts received by the Bank, at the Bank’s

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sole option, toward repayment of the Indebtedness or, where appropriate,
replacement of the Collateral; (i) whether or not an Event of Default exists, to
enter onto the Pledgor’s premises in inspecting the Collateral; (j) at any time
after the occurrence and during the continuance of an Event of Default, to make
withdrawals from and to close deposit accounts or other accounts with any
financial institution, wherever located, into which proceeds may have been
deposited, and to apply funds so withdrawn to payment of the Indebtedness; (k)
whether or not an Event of Default exists, to preserve or release the interest
evidenced by chattel paper to which the Bank is entitled and to endorse and
deliver any evidence of title; and (l) whether or not an Event of Default
exists, to do all acts and things and execute all documents in the name of the
Pledgor or otherwise, deemed by the Bank as necessary, proper and convenient in
connection with the preservation, perfection or enforcement of its rights.
5.Events of Default. As defined in the Loan Agreement.
6.Bank’s Remedies After Event of Default. In the event of the occurrence and
during the continuance of any Event of Default as described in Section 5, the
Bank may do any one or more of the following, to the extent permitted by law:
(a)    Declare any Indebtedness immediately due and payable, without notice or
demand.
(b)    Enforce the security interest given hereunder pursuant to the Uniform
Commercial Code and any other applicable law.
(c)    Enforce the security interest of the Bank in any deposit account of the
Pledgor maintained with the Bank by applying such account to the Indebtedness.
(d)    Require the Pledgor to obtain the Bank’s prior written consent to any
sale, lease, agreement to sell or lease, or other disposition of any Collateral
consisting of inventory.
(e)    Require the Pledgor to segregate all collections and proceeds of the
Collateral so that they are capable of identification and deliver daily such
collections and proceeds to the Bank in kind.
(f)    Require the Pledgor to direct all account debtors to forward all payments
and proceeds of the Collateral to a post office box under the Bank’s exclusive
control.
(g)    Give notice to others of the Bank’s rights in the Collateral, to enforce
or forebear from enforcing the same and make extension and modification
agreements.
(h)    Require the Pledgor to assemble the Collateral, including the Books and
Records, and make them available to the Bank at a place designated by the Bank.
(i)    Enter upon the property where any Collateral, including any Books and
Records, are located and take possession of such Collateral and such Books and
Records, and use such property (including any buildings and facilities) and any
of the Pledgor’s equipment, if the Bank

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deems such use necessary or advisable in order to take possession of, hold,
preserve, process, assemble, prepare for sale or lease, market for sale or
lease, sell or lease, or otherwise dispose of, any Collateral.
(j)    Demand and collect any payments on and proceeds of the Collateral. In
connection therewith the Pledgor irrevocably authorizes the Bank to endorse or
sign the Pledgor’s name on all checks, drafts, collections, receipts and other
documents, and to take possession of and open the mail addressed to the Pledgor
and remove therefrom any payments and proceeds of the Collateral.
(k)    Grant extensions and compromise or settle claims with respect to the
Collateral for less than face value, all without prior notice to the Pledgor.
(l)    Use or transfer any of the Pledgor’s rights and interests in any
Intellectual Property now owned or hereafter acquired by the Pledgor, if the
Bank deems such use or transfer necessary or advisable in order to take
possession of, hold, preserve, process, assemble, prepare for sale or lease,
market for sale or lease, sell or lease, or otherwise dispose of, any
Collateral. The Pledgor agrees that any such use or transfer shall be without
any additional consideration to the Pledgor. As used in this paragraph,
“Intellectual Property” includes, but is not limited to, all trade secrets,
computer software, service marks, trademarks, trade names, trade styles,
copyrights, patents, applications for any of the foregoing, customer lists,
working drawings, instructional manuals, and rights in processes for technical
manufacturing, packaging and labeling, in which the Pledgor has any right or
interest, whether by ownership, license, contract or otherwise.
(m)    Have a receiver appointed by any court of competent jurisdiction to take
possession of the Collateral. The Pledgor hereby consents to the appointment of
such a receiver and agrees not to oppose any such appointment.
(n)    Take such measures as the Bank may deem necessary or advisable to take
possession of, hold, preserve, process, assemble, insure, prepare for sale or
lease, market for sale or lease, sell or lease, or otherwise dispose of, any
Collateral, and the Pledgor hereby irrevocably constitutes and appoints the Bank
as the Pledgor’s attorney-in-fact to perform all acts and execute all documents
in connection therewith.
(o)    Without notice or demand to the Pledgor, set off and apply against any
and all of the Indebtedness any and all deposits (general or special, time or
demand, provisional or final) and any other indebtedness, at any time held or
owing by the Bank or any of the Bank’s agents or affiliates to or for the credit
of the account of the Pledgor or any guarantor or endorser of the Pledgor’s
Indebtedness.
(p)    Exercise all rights, powers and remedies which the Pledgor would have,
but for this Agreement, with respect to all Collateral.
(q)    Receive, open and read mail addressed to the Pledgor.

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(r)    Resort to the Collateral under this Agreement, and any other collateral
related to the Indebtedness, in any order.
(s)    Exercise any other remedies available to the Bank at law or in equity.
7.WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION HEREWITH OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR
ANY OTHER THEORY). EACH PARTY HERETO (a) CERTIFIES THAT NO REPRESENTATIVE, AGENT
OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER, (b) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER DOCUMENTS CONTEMPLATED
HEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION AND (c) CERTIFIES THAT THIS WAIVER IS KNOWINGLY, WILLINGLY AND
VOLUNTARILY MADE.
8.Waiver of Class Actions. The terms “Claim” or “Claims” refer to any disputes,
controversies, claims, counterclaims, allegations of liability, theories of
damage, or defenses between Bank of America, N.A., its subsidiaries and
affiliates, on the one hand, and the other parties to this Agreement, on the
other hand (all of the foregoing each being referred to as a “Party” and
collectively as the “Parties”). Whether in state court, federal court, or any
other venue, jurisdiction, or before any tribunal, the Parties agree that all
aspects of litigation and trial of any Claim will take place without resort to
any form of class or representative action. Thus the Parties may only bring
Claims against each other in an individual capacity and waive any right they may
have to do so as a class representative or a class member in a class or
representative action. THIS CLASS ACTION WAIVER PRECLUDES ANY PARTY FROM
PARTICIPATING IN OR BEING REPRESENTED IN ANY CLASS OR REPRESENTATIVE ACTION
REGARDING A CLAIM.
9.Miscellaneous.
(a)    Any waiver, express or implied, of any provision hereunder and any delay
or failure by the Bank to enforce any provision shall not preclude the Bank from
enforcing any such provision thereafter.
(b)    The Pledgor shall, at the request of the Bank, execute such other
agreements, documents, instruments, or financing statements in connection with
this Agreement as the Bank may reasonably deem necessary.

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(c)    All notes, security agreements, subordination agreements and other
documents executed by the Pledgor or furnished to the Bank in connection with
this Agreement must be in form and substance satisfactory to the Bank.
(d)    Governing Law. Except to the extent that any law of the United States may
apply, this Agreement shall be governed and interpreted according to the laws of
Texas (the “Governing Law State”), without regard to any choice of law, rules or
principles to the contrary. Nothing in this paragraph shall be construed to
limit or otherwise affect any rights or remedies of the Bank under federal law.
(e)    All rights and remedies herein provided are cumulative and not exclusive
of any rights or remedies otherwise provided by law. Any single or partial
exercise of any right or remedy shall not preclude the further exercise thereof
or the exercise of any other right or remedy.
(f)    All terms not defined herein are used as set forth in the Uniform
Commercial Code or in the Loan Agreement.
(g)    The Pledgor shall pay to the Bank promptly upon demand the full amount of
all payments, advances, and expenses, including reasonable attorneys’ fees,
expended or incurred by the Bank in connection with (a) the perfection and
preservation of the Collateral or the Bank’s interest therein, and (b) the
realization, enforcement and exercise of any right, power, privilege or remedy
conferred by this Agreement, relating to the Pledgor, or in any way affecting
any of the Collateral or the Bank’s ability to exercise any of its rights or
remedies with respect to the Collateral.
(h)    In the event the Bank seeks to take possession of any or all of the
Collateral by judicial process, the Pledgor irrevocably waives any bonds and any
surety or security relating thereto that may be required by applicable law as an
incident to such possession, and waives any demand for possession prior to the
commencement of any such suit or action.
(i)    This Agreement shall constitute a continuing agreement, applying to all
future as well as existing transactions.
(j)    This Agreement shall be binding upon and inure to the benefit of the
heirs, executors, administrators, legal representatives, successors and assigns
of the parties, and may be amended or modified only in writing signed by the
Bank and the Pledgor.
(k)    The secured parties covered by this Agreement include BANA as well as
Bank of America Corporation and its subsidiaries and affiliates. Such secured
parties are collectively referred to as the “Bank.” If, from time to time, any
of the Indebtedness covered by this Agreement includes obligations to entities
other than BANA, then BANA shall act as collateral agent for itself and all such
other secured parties. BANA shall have the right to apply proceeds of the
Collateral against debts, obligations or liabilities constituting all or part of
the Indebtedness in such order as BANA

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may determine in its sole discretion, unless otherwise agreed by BANA and one or
more of the other secured parties.
10.FINAL AGREEMENT. BY SIGNING THIS DOCUMENT EACH PARTY REPRESENTS AND AGREES
THAT: (A) THIS DOCUMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES WITH
RESPECT TO THE SUBJECT MATTER HEREOF, (B) THIS DOCUMENT SUPERSEDES ANY
COMMITMENT LETTER, TERM SHEET, OR OTHER WRITTEN OUTLINE OF TERMS AND CONDITIONS
RELATING TO THE SUBJECT MATTER HEREOF, UNLESS SUCH COMMITMENT LETTER, TERM
SHEET, OR OTHER WRITTEN OUTLINE OF TERMS AND CONDITIONS EXPRESSLY PROVIDES TO
THE CONTRARY, (C) THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES,
AND (D) THIS DOCUMENT MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR UNDERSTANDINGS OF THE PARTIES.
11.NOTICE OF FINAL AGREEMENT. THIS WRITTEN AGREEMENT AND THE LOAN DOCUMENTS
EXECUTED IN CONNECTION HEREWITH REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[Signature Page Follows]

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IN WITNESS WHEREOF, this Security Agreement is executed as of the Effective Date
first set forth above.

BANK OF AMERICA, N.A.    LAPOLLA INDUSTRIES, INC.

By: /s/ Juan Trejo                    By: /s/ Douglas J. Kramer, CEO
Juan Trejo                        Douglas J. Kramer
Vice President                        Chief Executive Officer

Address for notices to Bank:                Addresses for notices to Pledgor:

Bank of America, N.A.                Lapolla Industries, Inc.
700 Louisiana, 8th Floor                15402 Vantage Parkway E., Suite 322
Houston, Texas 77002                    Houston, Texas 77032

Pledgor’s Location (principal residence, if the Pledgor is an individual; chief
executive office, if the Pledgor is not an individual):

15402 Vantage Parkway E., Suite 322
Street Address

Houston     Texas         77032
City        State        Zip

Pledgor’s state of incorporation or organization (if the Pledgor is a
corporation, partnership, limited liability company or other registered entity):
Delaware
Mailing Address (if different from above):

                                                
Street Address

                                                
City        State        Zip