ex10_4.htm


    
      

    

    Exhibit
10.4

     

    AMENDED
AND RESTATED

    REVOLVING CREDIT
NOTE

     

    
      	
              $9,500,000

            	
              June
      30, 2008

            


    

    


     

    FOR VALUE RECEIVED, the
undersigned, LAPOLLA
INDUSTRIES, INC., a Delaware corporation (the “Maker”), hereby promises
to pay to COMVEST CAPITAL, LLC,
a Delaware limited liability company (“ComVest”), or registered assigns
(hereinafter, collectively with ComVest, referred to as the “Payee”), on August
31, 2010 (or sooner by reason of an Event of Default or required prepayment in
accordance with such Loan Agreement), the principal sum of Nine Million Five
Hundred Thousand ($9,500,000) Dollars or, if less, the aggregate unpaid
principal amount of all Advances made by the Payee to the Maker pursuant to that
certain Amended and Restated Revolving Credit and Term Loan Agreement of even
date herewith by and between ComVest and the Maker (as same may be amended,
modified, supplemented and/or restated from time to time, the “Loan Agreement”),
together with interest (computed as hereinafter provided) on any and all
principal amounts outstanding hereunder from time to time from the date hereof
until payment in full hereof, at a rate per annum (which shall be reset from
time to time as hereinafter provided) equal to the greater of (a) the Stated
Rate set forth in the table below corresponding to the Coverage Ratio then in
effect, or (b) the Minimum Rate set forth in the table below corresponding to
the Coverage Ratio then in effect; provided, however, that during
the continuance of any Event of Default under the Loan Agreement, the interest
rate otherwise applicable hereunder shall be increased by four hundred (400)
basis points.  All interest shall be computed on the daily unpaid
principal balance hereof based on a three hundred sixty (360) day year, and
shall be payable monthly in arrears on the first day of each calendar month
commencing July 31, 2008, and upon maturity or acceleration hereof.

     

    The
interest rate applicable hereunder from time to time shall be determined in
accordance with the following table, and shall be reset on a quarterly basis,
based upon the Maker’s financial statements delivered to ComVest (which shall be
accompanied in each case by a detailed calculation of the Coverage Ratio for the
fiscal quarter of the Maker ending on the date of the subject financial
statements), effective as of the first day of the calendar month next succeeding
the delivery of such financial statements (provided that, if the Maker fails to
deliver such financial statements and calculation on a timely basis in
accordance with the Loan Agreement, then, until delivery of current financial
statements and a current calculation, the interest rate hereunder shall be set
at the highest level below):

     

    
      	
              Coverage
      Ratio

            	
              Stated
      Rate

            	
              Minimum
      Rate

            
	 	 	 
	
              Less
      than 1.0 to 1.0

            	
              Prime
      Rate + 1%

            	
              8.5%

            
	 	 	 
	
              > 1.0 to 1.0
      but

              <
      1.25 to 1.0

            	
              Prime
      Rate + .75%

            	
              8.0%

            
	 	 	 
	
              > 1.25 to
      1.0 but

              <
      2.0 to 1.0

            	
              Prime
      Rate + .65%

            	
              7.5%

            
	 	 	 
	
              > 2.0 to
      1.0

            	
              Prime
      Rate + 0%

            	
              6.0%

            


    

     

    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    As used
herein, (a) the term “Coverage Ratio” shall mean the ratio of (i) EBITDA minus
Capital Expenditures paid in cash, to (ii) Debt Service (as such terms are
defined in the Loan Agreement), in each case for the fiscal quarter ending on
the date of the subject financial statements and calculation, and (b) the term
“Prime Rate” shall mean the “prime rate” or “base rate” of interest publicly
announced by Citibank, N.A. (or any successor thereto, or in the event that such
bank shall cease to exist and shall have no successor, any other domestic
commercial bank selected by the Payee in good faith) from time to time, which is
merely a reference rate for determining the interest rate to be charged on loans
or other financial transactions, and may or may not be the best rate offered by
such bank for commercial loans; and upon each announced change of the Prime Rate
by such bank, the interest rate hereunder shall be correspondingly
adjusted.

     

    The Maker
shall have the right, at any time and from time to time, to prepay all or any
portion of the principal balance of this Note upon written notice to the Payee,
stating the amount of the prepayment.  In addition, the Maker shall be
required (a) to make principal payments hereunder, without requirement of notice
or demand, as and to the extent provided in Section 2.01(d) of the Loan
Agreement, and (b) to make payment of all outstanding principal and accrued
interest hereunder simultaneously with the payment or prepayment in full of the
Term Note issued pursuant to the Loan Agreement.

     

    Unless
the Maker shall be otherwise notified in writing by ComVest, all principal and
interest hereunder are payable in lawful money of the United States of America
at the office of ComVest set forth in the Loan Agreement in immediately
available funds.  Payments of principal and/or interest hereunder
shall be made, at the Payee’s option, by debiting any demand deposit account(s)
in the name of the Maker at the Payee (or any agent of the Payee) or in such
other reasonable manner as may be designated by the Payee in writing to the
Maker and in any event shall be made in immediately available
funds.  The Maker hereby irrevocably authorizes the Payee to so debit
any and all such demand deposit accounts.

     

    The Maker
hereby waives presentment, demand, dishonor, protest, notice of protest,
diligence and any other notice or action otherwise required to be given or taken
under the law in connection with the delivery, acceptance, performance, default,
enforcement or collection of this Note, and expressly agrees that this Note, or
any payment hereunder, may be extended, modified or subordinated (by forbearance
or otherwise) from time to time, without in any way affecting the liability of
the Maker.  The Maker hereby further waives the benefit of any
exemption under the homestead exemption laws, if any, or any other exemption,
appraisal or insolvency laws, and consents that the Payee may release or
surrender, exchange or substitute any personal property or other collateral
security now held or which may hereafter be held as security for the payment of
this Note.

     

    This Note
is the Revolving Credit Note issued pursuant to the terms of the Loan Agreement
and is secured pursuant to the provisions of certain “Security Documents”
referred to in the Loan Agreement.  This Note is entitled to all of
the benefits of the Loan Agreement and said Security Documents, including
provisions governing the payment and the acceleration of maturity hereof, which
agreements and instruments are hereby incorporated by reference herein and made
a part hereof.  The occurrence and continuance of an Event of Default
thereunder shall constitute a default under this Note and shall entitle the
Payee to accelerate the entire indebtedness hereunder and take such other action
as may be provided for in the Loan Agreement and/or any and all other
instruments evidencing and/or securing the indebtedness under this Note, or as
may be provided under the law.

     

    
      
        
           


        

        
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    In the
event that any holder of this Note shall, during the continuance of any Event of
Default, exercise or endeavor to exercise any of its remedies hereunder or under
the Loan Agreement or any of the Security Documents, the Maker shall pay all
reasonable costs and expenses incurred in connection therewith, including,
without limitation, reasonable attorneys’ fees, all of which costs and expenses
shall be obligations under and part of this Note; and the holder hereof may take
judgment for all such amounts in addition to all other sums due
hereunder.

     

    No
consent or waiver by the holder hereof with respect to any action or failure to
act which, without such consent or waiver, would constitute a breach of any
provision of this Note shall be valid and binding unless in writing and signed
by the Maker and by the holder hereof.

     

    All
agreements between the Maker and the Payee are hereby expressly limited to
provide that in no contingency or event whatsoever, whether by reason of
acceleration of maturity of the indebtedness evidenced hereby or otherwise,
shall the amount paid or agreed to be paid to the Payee for the use, forbearance
or detention of the indebtedness evidenced hereby exceed the maximum amount
which the Payee is permitted to receive under applicable law.  If,
from any circumstances whatsoever, fulfillment of any provision hereof or of any
of the Security Documents or the Loan Agreement, at the time performance of such
provision shall be due, shall involve transcending the limit of validity
prescribed by law, then, ipso facto, the obligation
to be fulfilled shall automatically be reduced to the limit of such validity,
and if from any circumstance the Payee shall ever receive as interest an amount
which would exceed the highest lawful rate, such amount which would be excessive
interest shall be applied to the reduction of the principal balance of any of
the Maker’s Obligations (as such term is defined in the Loan Agreement) to the
Payee, and not to the payment of interest hereunder.  To the extent
permitted by applicable law, all sums paid or agreed to be paid for the use,
forbearance or detention of the indebtedness evidenced by this Note shall be
amortized, prorated, allocated and spread throughout the full term of such
indebtedness until payment in full, to the end that the rate or amount of
interest on account of such indebtedness does not exceed any applicable usury
ceiling.  As used herein, the term “applicable law” shall mean the law
in effect as of the date hereof, provided, however, that in the
event there is a change in the law which results in a higher permissible rate of
interest, then this Note shall be governed by such new law as of its effective
date.  This provision shall control every other provision of all
agreements between the Maker and the Payee.

     

    This Note
shall be governed by and construed in accordance with the laws of the State of
New York, except to the extent that such laws are superseded by Federal
enactments.

    


    This Note
amends, restates and supercedes the Amended and Restated Revolving Credit Note
of the Borrower dated June 12, 2007 issued by the Maker to ComVest, provided
that this Note does not effect a novation of the outstanding obligations under
such prior Amended and Restated Revolving Credit Note (all of which obligations
shall henceforth be evidenced by this Note).

    


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    IN WITNESS WHEREOF, the Maker
has caused this Note to be executed by its duly authorized officers as of the
date first set forth above.

    
      	 
      	
              LAPOLLA
      INDUSTRIES, INC.

            
	 
      	 
      
	 
      	 
      
	 
      	
              By:

            	
              /s/  Michael T. Adams,
      EVP

            
	 	 	Name:  Michael
      T. Adams
	 	 	Title:    Executive
      Vice President


    

    


    
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