Document:

ex10-2.htm

 

Exhibit 10.2

 

First Original

	
Norwegian Shipbrokers' Association's

Memorandum of Agreement for sale and

purchase of ships. Adopted by BIMCO in 1956.

Code-name

SALEFORM 2012

Revised 1966, 1983 and 1986/87, 1993 and 2012

 

	  	  	
MEMORANDUM OF AGREEMENT

	  	  	  
	
1

	  	
Dated: 22nd January 2014

	  	  	  
	
2

	  	
Gulf Sheba Shipping Ltd, 7/F, EIB Centre, 40 Bonham Strand, Sheung Wan, Hong Kong(Name of

	  	  	
sellers), hereinafter called the "Sellers", have agreed to sell, and

	  	  	  
	
3

	  	
DHT Holdings Inc. Clarendon House, 2 Church Street, Hamilton bermuda or guarantee nominee

	  	  	
(Name of buyers), hereinafter called the "Buyers", have agreed to buy:

	  	  	  
	
4

	  	
Name of vessel: MT "GULF SHEBA"

	  	  	  
	
5

	  	
IMO Number: 9310159

	  	  	  
	
6

	  	
Classification Society: LR

	  	  	  
	
7

	  	
Class Notation: +100A1, Double Hull Oil tanker, ESP, LI, LMC, UMS, IGS

	  	  	  
	
8

	  	
Year of Build: 2007___ Builder/Yard: Nantong Cosco KHI Engineeering Co. Ltd, P.R.C.

	  	  	  
	
9

	  	
Flag: Hong Hong Place of Registration: Hong Kong GT/NT: 160322/95817

	  	  	  
	
10

	  	
hereinafter called the "Vessel", on the following terms and conditions:

	  	  	  
	
11

	  	
Definitions

	
12

	  	
"Banking Days" are days on which banks are open both in the country of the currency stipulated for

	
13

	  	
the Purchase Price in Clause 1 (Purchase Price) and in the place of closing stipulated in Clause 8

	
14

	  	
(Documentation) and Norway and Dubai, U.A.E. (add additional jurisdictions as appropriate).

	  	  	  
	
15

	  	
"Buyers'Nominated Flag State" means           (state flag state).

	  	  	  
	
16

	  	
"Class" means the class notation referred to above.

	  	  	  
	
17

	  	
"Classification Society" means the Society referred to above.

	  	  	  
	
18

	  	
"Deposit" shall have the meaning given in Clause 2 (Deposit)

	  	  	  
	
19

	  	
"Deposit Holder" means DNB Bank London branch (state name and location of Deposit Holder) or, if

	  	  	
left blank, the

	
20

	  	
Sellers' Bank, which shall hold and release the Deposit in accordance with this Agreement.

	  	  	  
	
21

	  	
"In writing" or "written" means a letter handed over from the Sellers to the Buyers or vice versa, a

	
22

	  	
registered letter, e-mail or telefax.

	  	  	  
	
23

	  	
"Parties" means the Sellers and the Buyers.

	
24

	  	
"Purchase Price" means the price for the Vessel as stated in Clause 1 (Purchase Price).

	  	  	  
	
25

	  	
"Sellers' Account" means                                    (state details of bank account) at the Sellers' Bank.

	  	  	  
	
26

	  	
"Sellers' Bank" means                   (state name of bank, branch and details) or, if left blank, the bank

	
27

	  	
notified by the Sellers to the Buyers for receipt of the balance of the Purchase Price.

	  	  	  
	
28

	  	
1.

	
Purchase Price

	
29

	  	  	
The Purchase Price is US$ 50,500,000- (United States Dollars Fifty Million Five Hundred

	  	  	  	
Thousand only) (state currency and amount both in words and figures).

	
30

	  	
2.

	
Deposit

	
31

	  	  	
As security for the correct fulfilment of this Agreement the Buyers shall lodge a deposit of

 

 

  

  

  

 

	
32

	  	  	
          % (                per cent) or, if left blank, 10% (ten per cent), of the Purchase Price (the

	
33

	  	  	
"Deposit") in an interest bearing account for the Parties with the Deposit Holder within three (3)

	
34

	  	  	
Banking Days after the date that:

	  	  	  	  
	
35

	  	  	
(i)

	
this Agreement has been signed by the Parties and exchanged in original or by e-mail or

	
36

	  	  	  	
telefax; and

	  	  	  	  	  
	
37

	  	  	
(ii)

	
the Deposit Holder has confirmed in writing to the Parties that the account has been

	
38

	  	  	  	
opened.

	  	  	  	  	  
	
39

	  	  	
The Deposit shall be released in accordance with joint written instructions of the Parties.

	
40

	  	  	
Interest, if any, shall be credited to the Buyers. Any fee charged for holding and releasing the

	
41

	  	  	
Deposit shall be borne equally by the Parties. The Parties shall provide to the Deposit Holder

	
42

	  	  	
all necessary documentation to open and maintain the account without delay.

	  	  	  	  
	
43

	  	
3.

	
Payment

	  	  	  	  
	
44

	  	  	
On delivery of the Vessel, but not later than three (3) Banking Days after the date that Notice of

	
45

	  	  	
Readiness has been given in accordance with Clause 5 (Time and place of delivery and

	
46

	  	  	
notices):

	  	  	  	  
	
47

	  	  	
(i)

	
the Deposit shall be released to the Sellers; and

	 	 	 	 	 
	
48

	  	  	
(ii)

	
the balance of the Purchase Price and all other sums payable on delivery by the Buyers

	
49

	  	  	  	
to the Sellers under this Agreement shall be paid in full free of bank charges to the

	
50

	  	  	  	
Sellers' Account.

	  	  	  	  
	
51

	  	
4.

	
Inspection

	
52

	  	  	
(a) *The Buyers have inspected and accepted the Vessel's classification records. The Buyers

	
53

	  	  	
have also inspected the Vessel at/in Rotterdam (state place) on about 11th September 2013 (state

	  	  	  	
date) and have

	
54

	  	  	
accepted the Vessel as is where is following this inspection and the sale is outright and definite,

	  	  	  	
subject only

	
55

	  	  	
to the terms and conditions of this Agreement.

	  	  	  	  
	
56

	  	  	
(b) *The Buyers shall have the right to inspect the Vessel's classification records and declare

	
57

	  	  	
whether same are accepted or not within                        (state date/period).

	  	  	  	  
	
58

	  	  	
The Sellers shall make the Vessel available for inspection at/in            (state place/range) within

	
59

	  	  	
                    (state date/period).

	  	  	  	  
	
60

	  	  	
The Buyers shall undertake the inspection without undue delay to the Vessel. Should the

	
61

	  	  	
Buyers cause undue delay they shall compensate the Sellers for the losses thereby incurred.

	  	  	  	  
	
62

	  	  	
The Buyers shall inspect the Vessel without opening up and without cost to the Sellers.

	  	  	  	  
	
63

	  	  	
During the inspection, the Vessel's deck and engine log books shall be made available for

	
64

	  	  	
examination by the Buyers.

	  	  	  	  
	
65

	  	  	
The sale shall become outright and definite, subject only to the terms and conditions of this

	
66

	  	  	
Agreement, provided that the Sellers receive written notice of acceptance of the Vessel from

	
67

	  	  	
the Buyers within seventy-two (72) hours after completion of such inspection or after the

	
68

	  	  	
date/last day of the period stated in Line 59, whichever is earlier.

	  	  	  	  
	
69

	  	  	
Should the Buyers fail to undertake the inspection as scheduled and/or notice of acceptance of

	
70

	  	  	
the Vessel's classification records and/or of the Vessel not be received by the Sellers as

	
71

	  	  	
aforesaid, the Deposit together with interest earned, if any, shall be released immediately to the

	
72

	  	  	
Buyers, whereafter this Agreement shall be null and void.

	  	  	  	  
	
73

	  	  	
*4(a) and 4(b) are alternatives; delete whichever is not applicable. In the absence of deletions,

	
74

	  	  	
alternative 4(a) shall apply.

	  	  	  	  
	
75

	  	
5.

	
Time and place of delivery and notices

	
76

	  	  	
(a) The Vessel shall be delivered and taken over safely afloat at a safe and accessible berth or

	
77

	  	  	
anchorage at/in her current position in Rotterdam (state place/range) in the Sellers' option.

 

  

  

  

 

	
78

	  	  	
Notice of Readiness shall not be tendered before: 29th January 2014                    (date)

	
79

	  	  	
Cancelling Date (see Clauses 5(c), 6 (a)(i), 6(a) (iii) and 14): 15th February 2014

	  	  	  	  
	
80

	  	  	
(b) The Sellers shall keep the Vessel in her current position until time of delivery. Buyers

	  	  	  	
well informed of the Vessel's itinerary and shall

	
81

	  	  	
provide the Buyers with twenty (20), ten (10),seven (7), five (5) and three (3) days' notice of the date

	  	  	  	
the

	
82

	  	  	
Sellers intend to tender Notice of Readiness and of the intended place of delivery.

	  	  	  	  
	
83

	  	  	
When the Vessel is at the place of delivery and physically ready for delivery in accordance with

	
84

	  	  	
this Agreement, the Sellers shall give the Buyers a written Notice of Readiness for delivery.

	  	  	  	  
	
85

	  	  	
(c) If the Sellers anticipate that, notwithstanding the exercise of due diligence by them, the

	
86

	  	  	
Vessel will not be ready for delivery by the Cancelling Date they may notify the Buyers in writing

	
87

	  	  	
stating the date when they anticipate that the Vessel will be ready for delivery and proposing a

	
88

	  	  	
new Cancelling Date. Upon receipt of such notification the Buyers shall have the option of

	
89

	  	  	
either cancelling this Agreement in accordance with Clause 14 (Sellers' Default) within three (3)

	
90

	  	  	
Banking Days of receipt of the notice or of accepting the new date as the new Cancelling Date.

	
91

	  	  	
If the Buyers have not declared their option within three (3) Banking Days of receipt of the

	
92

	  	  	
Sellers' notification or if the Buyers accept the new date, the date proposed in the Sellers'

	
93

	  	  	
notification shall be deemed to be the new Cancelling Date and shall be substituted for the

	
94

	  	  	
Cancelling Date stipulated in line 79.

	  	  	  	  
	
95

	  	  	
If this Agreement is maintained with the new Cancelling Date all other terms and conditions

	
96

	  	  	
hereof including those contained in Clauses 5(b) and 5(d) shall remain unaltered and in full

	
97

	  	  	
force and effect.

	  	  	  	  
	
98

	  	  	
(d) Cancellation, failure to cancel or acceptance of the new Cancelling Date shall be entirely

	
99

	  	  	
without prejudice to any claim for damages the Buyers may have under Clause 14 (Sellers'

	
100

	  	  	
Default) for the Vessel not being ready by the original Cancelling Date.

	  	  	  	  
	
101

	  	  	
(e) Should the Vessel become an actual, constructive or compromised total loss before delivery

	
102

	  	  	
the Deposit together with interest earned, if any, shall be released immediately to the Buyers

	
103

	  	  	
whereafter this Agreement shall be null and void.

	 	 	 	 
	
104

	  	
6.

	
Divers Inspection / Drydocking

	  	  	  	  
	
105

	  	  	
(a)*

	
106

	  	  	
(i)

	
The Buyers shall have the option at their cost and expense to arrange for an underwater

	
107

	  	  	  	
inspection by a diver approved by the Classification Society prior to the delivery of the

	
108

	  	  	  	
Vessel. Such option shall be declared latest nine (9) days prior to the Vessel's intended

	
109

	  	  	  	
date of readiness for delivery as notified by the Sellers pursuant to Clause 5(b) of this

	
110

	  	  	  	
Agreement. The Sellers shall at their cost and expense make the Vessel available for

	
111

	  	  	  	
such inspection. This inspection shall be carried out without undue delay and in the

	
112

	  	  	  	
presence of a Classification Society surveyor arranged for by the Sellers and paid for by

	
113

	  	  	  	
the Buyers. The Buyers' representative^) shall have the right to be present at the diver's

	
114

	  	  	  	
inspection as observer(s) only without interfering with the work or decisions of the

	
115

	  	  	  	
Classification Society surveyor. The extent of the inspection and the conditions under

	
116

	  	  	  	
which it is performed shall be to the satisfaction of the Classification Society. If the

	
117

	  	  	  	
conditions at the place of delivery are unsuitable for such inspection, the Sellers shall at

	
118

	  	  	  	
their cost and expense make the Vessel available at a suitable alternative place near to

	
119

	  	  	  	
the delivery port, in which event the Cancelling Date shall be extended by the additional

	
120

	  	  	  	
time required for such positioning and the subsequent re-positioning. The Sellers may

	
121

	  	  	  	
not tender Notice of Readiness priorto completion of the underwater inspection.

	  	  	  	  	  
	
122

	  	  	
(ii)

	
If the rudder, propeller, bottom or other underwater parts below the deepest load line are

	
123

	  	  	  	
found broken, damaged or defective so as to affect the Vessel's class, then (1) unless

	
124

	  	  	  	
repairs can be carried out afloat to the satisfaction of the Classification Society, the

	
125

	  	  	  	
Sellers shall arrange for the Vessel to be drydocked at their expense for inspection by

	
126

	  	  	  	
the Classification Society of the Vessel's underwater parts below the deepest load line,

	
127

	  	  	  	
the extent of the inspection being in accordance with the Classification Society's rules (2)

	
128

	  	  	  	
such defects shall be made good by the Sellers at their cost and expense to the

	
129

	  	  	  	
satisfaction of the Classification Society without condition/recommendation** and (3) the

	
130

	  	  	  	
Sellers shall pay for the underwater inspection and the Classification Society's

	
131

	  	  	  	
attendance.

  

  

  

 

	
132

	  	  	  	
Notwithstanding anything to the contrary in this Agreement, if the Classification Society

	
133

	  	  	  	
do not require the aforementioned defects to be rectified before the next class

	
134

	  	  	  	
drydocking survey, the Sellers shall be entitled to deliver the Vessel with these defects

	
135

	  	  	  	
against a deduction from the Purchase Price of the estimated direct cost (of labour and

	
136

	  	  	  	
materials) of carrying out the repairs to the satisfaction of the Classification Society,

	
137

	  	  	  	
whereafter the Buyers shall have no further rights whatsoever in respect of the defects

	
138

	  	  	  	
and/or repairs. The estimated direct cost of the repairs shall be the average of quotes for

	
139

	  	  	  	
the repair work obtained from two reputable independent shipyards at or in the vicinity of

	
140

	  	  	  	
the port of delivery, one to be obtained by each of the Parties within two (2) Banking

	
141

	  	  	  	
Days from the date of the imposition of the condition/recommendation, unless the Parties

	
142

	  	  	  	
agree otherwise. Should either of the Parties fail to obtain such a quote within the

	
143

	  	  	  	
stipulated time then the quote duly obtained by the other Party shall be the sole basis for

	
144

	  	  	  	
the estimate of the direct repair costs. The Sellers may not tender Notice of Readiness

	
145

	  	  	  	
prior to such estimate having been established.

	  	  	  	  	  
	
146

	  	  	
(iii)

	
If the Vessel is to be drydocked pursuant to Clause 6(a) (ii) and no suitable dry-docking

	
147

	  	  	  	
facilities are available at the port of delivery, the Sellers shall take the Vessel to a port

	
148

	  	  	  	
where suitable drydocking facilities are available, whether within or outside the delivery

	
149

	  	  	  	
range as per Clause 5(a). Once drydocking has taken place the Sellers shall deliver the

	
150

	  	  	  	
Vessel at a port within the delivery range as per Clause 5(a) which shall, for the purpose

	
151

	  	  	  	
of this Clause, become the new port of delivery. In such event the Cancelling Date shall

	
152

	  	  	  	
be extended by the additional time required for the drydocking and extra steaming, but

	
153

	  	  	  	
limited to a maximum of fourteen (14) days.

	  	  	  	  	  
	
154

	  	  	
(b) *The Sellers shall place the Vessel in drydock at the port of delivery for inspection by the

	
155

	  	  	
Classification Society of the Vessel's underwater parts below the deepest load line, the extent

	
156

	  	  	
of the inspection being in accordance with the Classification Society's rules. If the rudder,

	
157

	  	  	
propeller, bottom or other underwater parts below the deepest load line are found broken,

	
158

	  	  	
damaged or defective so as to affect the Vessel's class, such defects shall be made good at the

	
159

	  	  	
Sellers' cost and expense to the satisfaction of the Classification Society without

	
160

	  	  	
condition/recommendation**. In such event the Sellers are also to pay for the costs and

	
161

	  	  	
expenses in connection with putting the Vessel in and taking her out of drydock, including the

	
162

	  	  	
drydock dues and the Classification Society's fees. The Sellers shall also pay for these costs

	
163

	  	  	
and expenses if parts of the tailshaft system are condemned or found defective or broken so as

	
164

	  	  	
to affect the Vessel's class. In all other cases, the Buyers shall pay the aforesaid costs and

	
165

	  	  	
expenses, dues and fees.

	  	  	  	  
	
166

	  	  	
(c) If the Vessel is drydocked pursuant to Clause 6(a) (ii) or 6(b) above:

	  	  	  	  
	
167

	  	  	
(i)

	
The Classification Society may require survey of the tailshaft system, the extent of the

	
168

	  	  	  	
survey being to the satisfaction of the Classification Society surveyor. If such survey is

	
169

	  	  	  	
not required by the Classification Society, the Buyers shall have the option to require the

	
170

	  	  	  	
tailshaft to be drawn and surveyed by the Classification Society, the extent of the survey

	
171

	  	  	  	
being in accordance with the Classification Society's rules for tailshaft survey and

	
172

	  	  	  	
consistent with the current stage of the Vessel's survey cycle. The Buyers shall declare

	
173

	  	  	  	
whether they require the tailshaft to be drawn and surveyed not later than by the

	
174

	  	  	  	
completion of the inspection by the Classification Society. The drawing and refitting of

	
175

	  	  	  	
the tailshaft shall be arranged by the Sellers. Should any parts of the tailshaft system be

	
176

	  	  	  	
condemned or found defective so as to affect the Vessel's class, those parts shall be

	
177

	  	  	  	
renewed or made good at the Sellers' cost and expense to the satisfaction of the

	
178

	  	  	  	
Classification Society without condition/recommendation**.

	  	  	  	  	  
	
179

	  	  	
(ii)

	
The costs and expenses relating to the survey of the tailshaft system shall be borne by

	
180

	  	  	  	
the Buyers unless the Classification Society requires such survey to be carried out or if

	
181

	  	  	  	
parts of the system are condemned or found defective or broken so as to affect the

	
182

	  	  	  	
Vessel's class, in which case the Sellers shall pay these costs and expenses.

	  	  	  	  	  
	
183

	  	  	
(iii)

	
The Buyers' representative(s) shall have the right to be present in the drydock, as

	
184

	  	  	  	
observer(s) only without interfering with the work or decisions of the Classification

	
185

	  	  	  	
Society surveyor.

	  	  	  	  	  
	
186

	  	  	
(iv)

	
The Buyers shall have the right to have the underwater parts of the Vessel cleaned

	
187

	  	  	  	
and painted at their risk, cost and expense without interfering with the Sellers' or the

	
188

	  	  	  	
Classification Society surveyor's work, if any, and without affecting the Vessel's timely

 

  

  

  

 

	
189

	  	  	  	
delivery. If, however, the Buyers' work in drydock is still in progress when the

	
190

	  	  	  	
Sellers have completed the work which the Sellers are required to do, the additional

	
191

	  	  	  	
docking time needed to complete the Buyers' work shall be for the Buyers' risk, cost and

	
192

	  	  	  	
expense. In the event that the Buyers' work requires such additional time, the Sellers

	
193

	  	  	  	
may upon completion of the Sellers' work tender Notice of Readiness for delivery whilst

	
194

	  	  	  	
the Vessel is still in drydock and, notwithstanding Clause 5(a), the Buyers shall be

	
195

	  	  	  	
obliged to take delivery in accordance with Clause 3 (Payment), whether the Vessel is in

	
196

	  	  	  	
drydock or not.

	
197

	  	  	
*6(a) and 6(b) are alternatives; delete whichever is not applicable. In the absence of deletions,

	
198

	  	  	
alternative 6(a) shall apply.

	  	  	  	  
	
199

	  	  	
**Notes or memoranda, if any, in the surveyor's report which are accepted by the Classification

	
200

	  	  	
Society without condition/recommendation are not to be taken into account.

	  	  	  	  
	
201

	  	
7.

	
Spares, bunkers and other items

	
202

	  	  	
The Sellers shall deliver the Vessel to the Buyers with everything belonging to her on board

	
203

	  	  	
and on shore. All spare parts and spare equipment including spare tail-end shaft(s) and/or

	
204

	  	  	
spare propeller(s)/propeller blade(s), if any, belonging to the Vessel at the time of inspection

	
205

	  	  	
used or unused, whether on board or not shall become the Buyers' property., but spares on

	
206

	  	  	
order are excluded. Forwarding charges, if any, shall be for the Buyers' account. The Sellers

	
207

	  	  	
are not required to replace spare parts including spare tail-end shaft(s) and spare

	
208

	  	  	
propeller(s)/propeller blade(s) which are taken out of spare and used as replacement prior to

	
209

	  	  	
delivery, but the replaced items shall be the property of the Buyers. Unused stores and

	
210

	  	  	
provisions shall be included in the sale and be taken over by the Buyers without extra payment.

	  	  	  	  
	
211

	  	  	
Library and forms exclusively for use in the Sellers' vessel(s) and captain's, officers' and crew's

	
212

	  	  	
personal belongings including the slop chest are excluded from the sale without compensation,

	
213

	  	  	
as well as the following additional items:                                  (include list)

	  	  	  	  
	
214

	  	  	
Items on board which are on hire or owned by third parties, listed as follows, are excluded from

	
215

	  	  	
the sale without compensation:

	  	  	  	
- GSSM SMS manuals.

	  	  	  	
- GSSM printed stationary/letter heads/forms etc.

	  	  	  	
- Original Eng & Deck Log books.

	  	  	  	
- Computer hard drives, server, CDs, DVDs, USBs, Backup Tapes, Back Device/s with Hard

	  	  	  	
Disk, External Hard Disks (except printer installations CD's)

	  	  	  	
- Oxy/Act/Freon gas cylinders (unless Buyers can take over Sellers' current rental contracts)

	  	  	  	
- Life rafts (Buyers to take over Sellers' current rental contracts)

	  	  	  	
- Mobile phone/camera

	  	  	  	
(include list)

	  	  	  	  
	
216

	  	  	
Items on board at the time of inspection which are on hire or owned by third parties, not listed

	
217

	  	  	
above, shall be replaced or procured by the Sellers prior to delivery at their cost and expense.

	  	  	  	  
	
218

	  	  	
The Buyers shall take over remaining bunkers and unused lubricating which have not passed

	  	  	  	
through the Vessel's systems and hydraulic oils and

	
219

	  	  	
greases in storage tanks and unopened drums and pay either:

	  	  	  	  
	
220

	  	  	
(a) *the actual net price (excluding barging expenses) as evidenced by invoices or vouchers; or

	  	  	  	  
	
221

	  	  	
(b) *the current net market price (excluding barging expenses) at the port and date of delivery

	
222

	  	  	
of the Vessel or, if unavailable, at the nearest bunkering port,

	  	  	  	  
	
223

	  	  	
for the quantities taken over.

	  	  	  	  
	
224

	  	  	
Payment under this Clause shall be made at the same time and place and in the same

	
225

	  	  	
currency as the Purchase Price.

	  	  	  	  
	
226

	  	  	
"inspection" in this Clause 7, shall mean the Buyers' inspection according to Clause 4(a) or(b)

	
227

	  	  	
(Inspection), if applicable. If the Vessel is taken over without inspection, the date of this

	
228

	  	  	
Agreement shall be the relevant date.

	  	  	  	  
	
229

	  	  	
*(a) and (b) are alternatives, delete whichever is not applicable. In the absence of deletions

	
230

	  	  	
alternative (a) shall apply.

  

  

  

 

	
231

	  	8.	
Documentation

	
232

	  	  	
The place of closing: DNB Bank, London branch

	  	  	  	  
	
233

	  	  	
(a) In exchange for payment of the Purchase Price the Sellers shall provide the Buyers with the

	
234

	  	  	
following delivery documents:

	  	  	  	  
	
235

	  	  	
(i)

	
Legal Bill(s) of Sale in a form recordable in the Buyers' Nominated Flag State,

	
236

	  	  	  	
transferring title of the Vessel and stating that the Vessel is free from all mortgages,

	
237

	  	  	  	
encumbrances and maritime liens or any other debts whatsoever, duly notarially attested

	
238

	  	  	  	
and legalised orapostilled, as required by the Buyers' Nominated Flag State;

	  	  	  	  	  
	
239

	  	  	
(ii)

	
Evidence that all necessary corporate, shareholder and other action has been taken by

	
240

	  	  	  	
the Sellers to authorise the execution, delivery and performance of this Agreement;

	  	  	  	  	  
	
241

	  	  	
(iii)

	
Power of Attorney of the Sellers appointing one or more representatives to act on behalf

	
242

	  	  	  	
of the Sellers in the performance of this Agreement, duly notarially attested and legalised

	
243

	  	  	  	
or apostilled (as appropriate);

	  	  	  	  	  
	
244

	  	  	
(iv)

	
Certificate or Transcript of Registry issued by the competent authorities of the flag state

	
245

	  	  	  	
on the date of delivery evidencing the Sellers' ownership of the Vessel and that the

	
246

	  	  	  	
Vessel is free from registered encumbrances and mortgages, to be faxed or e-mailed by

	
247

	  	  	  	
such authority to the closing meeting with the original to be sent to the Buyers as soon as

	
248

	  	  	  	
possible after delivery of the Vessel;

	  	  	  	  	  
	
249

	  	  	
(v)

	
Declaration of Class or (depending on the Classification Society) a Class Maintenance

	
250

	  	  	  	
Certificate issued within three (3) Banking Days prior to delivery confirming that the

	
251

	  	  	  	
Vessel is in Class free of condition/recommendation;

	  	  	  	  	  
	
252

	  	  	
(vi)

	
Certificate of Deletion of the Vessel from the Vessel's registry or other official evidence of

	
253

	  	  	  	
deletion appropriate to the Vessel's registry at the time of delivery, or, in the event that

	
254

	  	  	  	
the registry does not as a matter of practice issue such documentation immediately, a

	
255

	  	  	  	
written undertaking by the Sellers to effect deletion from the Vessel's registry forthwith

	
256

	  	  	  	
and provide a certificate or other official evidence of deletion to the Buyers promptly and

	
257

	  	  	  	
latest within four (4) weeks after the Purchase Price has been paid and the Vessel has

	
258

	  	  	  	
been delivered;

	  	  	  	  	  
	
259

	  	  	
(vii)

	
A copy of the Vessel's Continuous Synopsis Record certifying the date on which the

	
260

	  	  	  	
Vessel ceased to be registered with the Vessel's registry, or, in the event that the registry

	
261

	  	  	  	
does not as a matter of practice issue such certificate immediately, a written undertaking

	
262

	  	  	  	
from the Sellers to provide the copy of this certificate promptly upon it being issued

	
263

	  	  	  	
together with evidence of submission by the Sellers of a duly executed Form 2 stating

	
264

	  	  	  	
the date on which the Vessel shall cease to be registered with the Vessel's registry;

	  	  	  	  	  
	
265

	  	  	
(viii)

	
Commercial Invoice for the Vessel;

	  	  	  	  	  
	
266

	  	  	
(ix)

	
Commercial Invoice(s) for bunkers, lubricating and hydraulic oils and greases;

	  	  	  	  	  
	
267

	  	  	
(x)

	
A copy of the Sellers' letter to their satellite communication provider cancelling the

	
268

	  	  	  	
Vessel's communications contract which is to be sent immediately after delivery of the

	
269

	  	  	  	
Vessel;

	  	  	  	  	  
	
270

	  	  	
(xi)

	
Any additional documents as may reasonably be required by the competent authorities of

	
271

	  	  	  	
the Buyers' Nominated Flag State for the purpose of registering the Vessel, provided the

	
272

	  	  	  	
Buyers notify the Sellers of any such documents as soon as possible after the date of

	
273

	  	  	  	
this Agreement; and

	  	  	  	  	  
	
274

	  	  	
(xii)

	
The Sellers' letter of confirmation that to the best of their knowledge, the Vessel is not

	
275

	  	  	  	
black listed by any nation or international organisation.

	  	  	  	  	  
	
276

	  	  	
(b) At the time of delivery the Buyers shall provide the Sellers with:

	  	  	  	  
	
277

	  	  	
(i)

	
Evidence that all necessary corporate, shareholder and other action has been taken by

	
278

	  	  	  	
the Buyers to authorise the execution, delivery and performance of this Agreement; and

  

  

  

 

 

	
279

	  	  	
(ii)

	
Power of Attorney of the Buyers appointing one or more representatives to act on behalf

	
280

	  	  	  	
of the Buyers in the performance of this Agreement, duly notarially attested and legalised

	
281

	  	  	  	
or apostilled (as appropriate).

	  	  	  	  	  
	
282

	  	  	
(c) If any of the documents listed in Sub-clauses (a) and (b) above are not in the English

	
283

	  	  	
language they shall be accompanied by an English translation by an authorised translator or

	
284

	  	  	
certified by a lawyer qualified to practice in the country of the translated language.

	  	  	  	  
	
285

	  	  	
(d) The Parties shall to the extent possible exchange copies, drafts or samples of the

	
286

	  	  	
documents listed in Sub-clause (a) and Sub-clause (b) above for review and comment by the

	
287

	  	  	
other party not later than                 (state number of days), or if left blank, nine (9) days prior to

	
288

	  	  	
the Vessel's intended date of readiness for delivery as notified by the Sellers pursuant to

	
289

	  	  	
Clause 5(b) of this Agreement.

	  	  	  	  
	
290

	  	  	
(e) Concurrent with the exchange of documents in Sub-clause (a) and Sub-clause (b) above,

	
291

	  	  	
the Sellers shall also hand to the Buyers the classification certificate(s) as well as all plans,

	
292

	  	  	
drawings and manuals, (excluding ISM/ISPS manuals), which are on board the Vessel. Other

	
293

	  	  	
certificates which are on board the Vessel shall also be handed over to the Buyers unless the

	
294

	  	  	
Sellers are required to retain same, in which case the Buyers have the right to take copies.

	  	  	  	  
	
295

	  	  	
(f) Other technical documentation and plans, etc which may be in the Sellers' possession shall

	  	  	  	
promptly after

	
296

	  	  	
delivery be forwarded to the Buyers at their expense, if they so request. The Sellers may keep

	
297

	  	  	
the Vessel's log books and copy of PMS database as available on board will be made available

	  	  	  	
for Buyer's reference in good faith however, with clear understanding that no due/overdue/

	  	  	  	
Defect/ Damages to Machinery/Hull or other equipment shall be referred to Sellers at any

	  	  	  	
stage, whatever the case may be but the Buyers have the right to take copies of log books. same.

	  	  	  	  
	
298

	  	  	
(g) The Parties shall sign and deliver to each other a Protocol of Delivery and Acceptance

	
299

	  	  	
confirming the date and time of delivery of the Vessel from the Sellers to the Buyers.

	  	  	  	  
	
300

	  	
9.

	
Encumbrances

	
301

	  	  	
The Sellers warrant that the Vessel, at the time of delivery, is free from all charters,

	
302

	  	  	
encumbrances, mortgages, arrests and maritime liens or any other debts whatsoever, and is not

	  	  	  	
subject

	
303

	  	  	
to Port State or other administrative detentions. The Sellers hereby undertake to indemnify the

	
304

	  	  	
Buyers against all consequences of claims made against the Vessel which have been incurred

	
305

	  	  	
prior to the time of delivery.

	  	  	  	  
	
306

	  	
10.

	
Taxes, fees and expenses

	
307

	  	  	
Any taxes, fees and expenses in connection with the purchase and registration in the Buyers'

	
308

	  	  	
Nominated Flag State shall be for the Buyers' account, whereas similar charges in connection

	
309

	  	  	
with the closing of the Sellers' register shall be for the Sellers' account.

	  	  	  	  
	
310

	  	
11.

	
Condition on delivery

	
311

	  	  	
The Vessel with everything belonging to her shall be at the Sellers' risk and expense until she is

	
312

	  	  	
delivered to the Buyers, but subject to the terms and conditions of this Agreement she shall be

	
313

	  	  	
delivered and taken over as she was at the time of inspection, fair wear and tear excepted.

	  	  	  	  
	
314

	  	  	
However, the Vessel shall be delivered free of cargo and free of stowaways with her Class

	
315

	  	  	
maintained without condition/recommendation*, free of average damage affecting the Vessel's

	
316

	  	  	
class, and with her classification certificates and national certificates, as well as all other

	
317

	  	  	
certificates the Vessel had at the time of inspection, valid and unextended without

	
318

	  	  	
condition/recommendation* by the Classification Society or the relevant authorities at the time

	
319

	  	  	
of delivery. and for at least 3 months after the date of delivery. Vessel's Continuous Machinery

	  	  	  	
Surveys to be valid and up to date. All plans, drawings and instruction manuals (excluding ISM

	  	  	  	
manuals, and any other company documents or software) which are on board shall be delivered

	  	  	  	
to the Buyers Master upon delivery of the vessel. All remaining plans, drawings, instruction

	  	  	  	
manuals in the Sellers possession shall be forwarded to the Buyers technical management after

	  	  	  	
delivery. Ships computers and network shall remain onboard but computer hard drives and

	  	  	  	
server to be removed, as per excluded items referred to in line 215.

	  	  	  	  
	
320

	  	  	
"inspection" in this Clause 11, shall mean the Buyers' inspection according to Clause 4(a) or

	
321

	  	  	
4(b) (Inspection), if applicable. If the Vessel is taken over without inspection, the date of this

 

  

  

  

 

	
322

	  	  	
Agreement shall be the relevant date.

	  	  	  	  
	
323

	  	  	
*Notes and memoranda, if any, in the surveyor's report which are accepted by the Classification

	
324

	  	  	
Society without condition/recommendation are not to be taken into account.

	  	  	  	  
	
325

	  	
12.

	
Name/markings

	
326

	  	  	
Upon delivery the Buyers undertake to change the name of the Vessel and alter funnel

	
327

	  	  	
markings.

	  	  	  	  
	
328

	  	
13.

	
Buyers' default

	
329

	  	  	
Should the Deposit not be lodged in accordance with Clause 2 (Deposit), the Sellers have the

	
330

	  	  	
right to cancel this Agreement, and they shall be entitled to claim compensation for their losses

	
331

	  	  	
and for all expenses incurred together with interest.

	
332

	  	  	
Should the Purchase Price not be paid in accordance with Clause 3 (Payment), the Sellers

	
333

	  	  	
have the right to cancel this Agreement, in which case the Deposit together with interest

	
334

	  	  	
earned, if any, shall be released to the Sellers. If the Deposit does not cover their loss, the

	
335

	  	  	
Sellers shall be entitled to claim further compensation for their losses and for all expenses

	
336

	  	  	
incurred together with interest.

	  	  	  	  
	
337

	  	
14.

	
Sellers' default

	
338

	  	  	
Should the Sellers fail to give Notice of Readiness in accordance with Clause 5(b) or fail to be

	
339

	  	  	
ready to validly complete a legal transfer by the Cancelling Date the Buyers shall have the

	
340

	  	  	
option of cancelling this Agreement. If after Notice of Readiness has been given but before

	
341

	  	  	
the Buyers have taken delivery, the Vessel ceases to be physically ready for delivery and is not

	
342

	  	  	
made physically ready again by the Cancelling Date and new Notice of Readiness given, the

	
343

	  	  	
Buyers shall retain their option to cancel. In the event that the Buyers elect to cancel this

	
344

	  	  	
Agreement, the Deposit together with interest earned, if any, shall be released to them

	
345

	  	  	
immediately.

	  	  	  	  
	
346

	  	  	
Should the Sellers fail to give Notice of Readiness by the Cancelling Date or fail to be ready to

	
347

	  	  	
validly complete a legal transfer as aforesaid they shall make due compensation to the Buyers

	
348

	  	  	
for their loss and for all expenses together with interest if their failure is due to proven

	
349

	  	  	
negligence and whether or not the Buyers cancel this Agreement.

	  	  	  	  
	
350

	  	
15.

	
Buyers' representatives

	
351

	  	  	
After this Agreement has been signed by the Parties and the Deposit has been lodged, the

	
352

	  	  	
Buyers have the right to place four (4) two (2) representatives on board the Vessel at their sole risk

	  	  	  	
and

	
353

	  	  	
expense.

	  	  	  	  
	
354

	  	  	
These representatives are on board for the purpose of familiarisation and in the capacity of

	
355

	  	  	
observers only, and they shall not interfere in any respect with the operation of the Vessel. The

	
356

	  	  	
Buyers and the Buyers' representatives shall sign the Sellers' P&l Club's standard letter of

	
357

	  	  	
indemnity prior to their embarkation.

	  	  	  	  
	
358

	  	
16.

	
Law and Arbitration

	
359

	  	  	
(a) This Agreement shall be governed by and construed in accordance with English law and

	
360

	  	  	
any dispute arising out of or in connection with this Agreement shall be referred to arbitration in

	
361

	  	  	
London in accordance with the Arbitration Act 1996 or any statutory modification or re-

	
362

	  	  	
enactment thereof save to the extent necessary to give effect to the provisions of this Clause.

	  	  	  	  
	
363

	  	  	
The arbitration shall be conducted in accordance with the London Maritime Arbitrators

	
364

	  	  	
Association (LMAA) Terms current at the time when the arbitration proceedings are

	
365

	  	  	
commenced.

	  	  	  	  
	
366

	  	  	
The reference shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall

	
367

	  	  	
appoint its arbitrator and send notice of such appointment in writing to the other party requiring

	
368

	  	  	
the other party to appoint its own arbitrator within fourteen (14) calendar days of that notice and

	
369

	  	  	
stating that it will appoint its arbitrator as sole arbitrator unless the other party appoints its own

	
370

	  	  	
arbitrator and gives notice that it has done so within the fourteen (14) days specified. If the

	
371

	  	  	
other party does not appoint its own arbitrator and give notice that it has done so within the

	
372

	  	  	
fourteen (14) days specified, the party referring a dispute to arbitration may, without the

	
373

	  	  	
requirement of any further prior notice to the other party, appoint its arbitrator as solerbitrator

	
374

	  	  	
and shall advise the other party accordingly. The award of a sole arbitrator shall be binding on

	
375

	  	  	
both Parties as if the sole arbitrator had been appointed by agreement.

 

  

  

  

 

	
376

	  	  	
In cases where neither the claim nor any counterclaim exceeds the sum of US$100,000 the

	
377

	  	  	
arbitration shall be conducted in accordance with the LMAA Small Claims Procedure current at

	
378

	  	  	
the time when the arbitration proceedings are commenced.

	  	  	  	  
	
379

	  	  	
(b) *This Agreement shall be governed by and construed in accordance with Title 9 of the

	
380

	  	  	
United States Code and the substantive law (not including the choice of law rules) of the State

	
381

	  	  	
of New York and any dispute arising out of or in connection with this Agreement shall be

	
382

	  	  	
referred to three (3) persons at New York, one to be appointed by each of the parties hereto,

	
383

	  	  	
and the third by the two so chosen; their decision or that of any two of them shall be final, and

	
384

	  	  	
for the purposes of enforcing any award, judgment may be entered on an award by any court of

	
385

	  	  	
competent jurisdiction. The proceedings shall be conducted in accordance with the rules of the

	
386

	  	  	
Society of Maritime Arbitrators, Inc.

	  	  	  	  
	
387

	  	  	
In cases where neither the claim nor any counterclaim exceeds the sum of US$ 100,000 the

	
388

	  	  	
arbitration shall be conducted in accordance with the Shortened Arbitration Procedure of the

	
389

	  	  	
Society of Maritime Arbitrators, Inc.

	  	  	  	  
	
390

	  	  	
(c) This Agreement shall be governed by and construed in accordance with the laws of

	
391

	  	  	
(state place) and any dispute arising out of or in connection with this Agreement shall be

	
392

	  	  	
referred to arbitration at               (state place), subject to the procedures applicable there.

	  	  	  	  
	
393

	  	  	
*16(a), 16(b) and 16(c) are alternatives; delete whichever is not applicable. In the absence of

	
394

	  	  	
deletions, alternative 16(a) shall apply.

	  	  	  	  
	
395

	  	
17.

	
Notices

	
396

	  	  	
All notices to be provided under this Agreement shall be in writing on email and pass via the

	  	  	  	
brokers Arrow Sale and Purchase (UK) Ltd.

	  	  	  	  
	
397

	  	  	
Contact details for recipients of notices are as follows:

	  	  	  	  
	
398

	  	  	
For the Buyers:

	  	  	  	  
	
399

	  	  	
For the Sellers:

	  	  	  	  
	
400

	  	
18.

	
Entire Agreement

	
401

	  	  	
The written terms of this Agreement comprise the entire agreement between the Buyers and

	
402

	  	  	
the Sellers in relation to the sale and purchase of the Vessel and supersede all previous

	
403

	  	  	
agreements whether oral or written between the Parties in relation thereto.

	  	  	  	  
	
404

	  	  	
Each of the Parties acknowledges that in entering into this Agreement it has not relied on and

	
405

	  	  	
shall have no right or remedy in respect of any statement, representation, assurance or

	
406

	  	  	
warranty (whether or not made negligently) other than as is expressly set out in this Agreement.

	  	  	  	  
	
407

	  	  	
Any terms implied into this Agreement by any applicable statute or law are hereby excluded to

	
408

	  	  	
the extent that such exclusion can legally be made. Nothing in this Clause shall limit or exclude

	
409

	  	  	
any liability for fraud.

 

 

 

	For and on behalf of the Sellers	 	 	For and of behalf of the Buyers	 
	 	 	 	 	 
	
 /s/ Sandeep Kadwe

	 	 	
 /s/ Svein M. Harfjeld

	 
	Name:	
Sandeep Kadwe

	 	 	Name:	

Svein M. Harfjeld

	 
	
Title:

	
Director

	 	 	Title:	
CEO

	 

 

 

 

  

  

  

 

 

This Charter Party is a computer generated copy of the "SALEFORM 2012" form printed by authority of Norwegian Shipbrokers' Association using software which is the copyright of SDSD. Any insertion or deletion to the form must be clearly visible. In the event of any modification made to the preprinted text of this document which is not clearly visible, the text of the original approved document shall apply. Norwegian Shipbrokers' Association and SDSD assume no responsibility for any loss or damage caused as a result of discrepancies between the original approved document and this document.Exhibit 10.1

EXECUTIVE EMPLOYMENT AGREEMENT

THIS AGREEMENT made
as of January 22, 2014 and is effective as of January 1, 2014, by and between LAPOLLA INDUSTRIES, INC. a Delaware corporation
(the “Company”) and DOUGLAS J. KRAMER (the “Executive”).

WHEREAS, Executive
is currently employed as President and Chief Executive Officer of the Company, pursuant to an Executive Employment Agreement effective
as of May 5, 2008, as amended effective as of January 1, 2010, January 1, 2011 and July 1, 2012 (collectively, the “Existing
Agreement”); and

WHEREAS, upon the
expiration of the Existing Agreement on December 31, 2013, the Company desires to continue to employ Executive, and Executive desires
to continue his employment, as President and Chief Executive Officer of the Company without interruption, commencing January 1,
2014; and

WHEREAS, the parties
desire to enter into a new agreement setting forth the terms and conditions of their employment relationship, which shall become
effective on January 1, 2014; and

WHEREAS, the Company
has determined that it will provide the Executive with compensation and other benefits on the terms and conditions set forth in
this Agreement (the “Agreement”), and the Executive is willing to accept such terms and conditions and to continue
to perform services for the Company on the terms and conditions hereinafter set forth.

NOW THEREFORE, in
consideration of the respective agreements of the parties contained herein, it is agreed as follows:

1.EMPLOYMENT TERM. Subject
to the provisions of Section 4 hereof, provided the Executive is employed as the President and Chief Executive Officer of the Company
on December 31, 2013, the Agreement shall be effective commencing on January 1, 2014 and ending on December 31, 2016 (the “Term”).

2.POSITIONS; DUTIES.

2.1The Company
agrees to employ the Executive, and the Executive agrees to serve during the term hereof, as President and Chief Executive Officer
of the Company.

 

2.2While employed, the
Executive agrees to devote all of his working time and efforts (excluding any periods of vacation and sick leave and any other
permitted absences), using his ability, experience and talent, to the performance of services, duties and responsibilities in connection
with the positions named above. The Executive shall perform such duties and exercise such powers, commensurate with his position,
and shall be subject to such restrictions, as the Chairman of the Board and Board of Directors of the Company shall from time to
time assign to him or impose. Provided, however, Executive’s duties, powers and responsibilities shall at all times be consistent
with the duties, powers and responsibilities of a President and Chief Executive Officer.

 

2.3Nothing
in this Agreement shall preclude the Executive from (a) engaging in charitable and community affairs (including serving on the
board of any not-for-profit organization) so long as, in the reasonable determination of the Board of Directors, such activities
do not interfere with his duties and responsibilities hereunder; or (b) managing any passive investment made by him in publicly
traded equity securities or other property (provided that no such investment may exceed 5% of the equity of any entity without
the prior approval of the Board of Directors). The Company shall evaluate, in its sole discretion, on a case-by-case basis, any
request by the Executive to serve on a maximum of one corporate board of directors or as a trustee of one other corporation, association
or entity provided, however, that in no event shall Executive serve as a member of a board of directors or as a trustee of another
corporation, association or entity in the spray foam, roof coating, construction or related industries.

3.COMPENSATION
AND RELATED MATTERS.

3.1Base
Compensation. For the period of January 1, 2014 through December 31, 2014, the Company shall pay the Executive a base salary
(“Base Salary”) calculated at an annual rate of $350,000. For the period of January 1, 2015 through December 31, 2016,
the Base Salary shall be increased to a rate of $400,000 per annum provided the Company meets the positive earnings and cash flow
budgets for 2014 that were established by the Board of Directors, in its sole discretion, for purposes of this provision.

3.2Annual
Performance Bonus. Executive shall be entitled to an annual bonus (“Bonus”) equal to One Hundred Twenty Thousand
Dollars ($120,000) (i.e., 30% of $400,000) if Company achieves its “Budgeted” earnings before interest, taxes, depreciation
and amortization (“EBITDA”) for the Company’s fiscal year. The Company’s Budgeted earnings for each fiscal
year shall be established by the Company in its sole discretion, and approved by the Board of Directors. The Bonus shall be increased
to One Hundred Sixty Thousand Dollars ($160,000) (i.e., 40% of $400,000) if Company achieves 120% of its Budgeted EBITDA and shall
be increased to Two Hundred Thousand Dollars ($200,000) (i.e., 50% of $400,000) if Company achieves 140% of its Budgeted EBITDA.
Any such Bonus to which the Executive is entitled under this Section shall be paid to him by the Company in a single lump sum within
thirty (30) days after the issuance of the Company’s audited financial statements for such fiscal year and, in all events,
by December 31 of the fiscal year following the fiscal year to which the Bonus applies.

3.3Sales
Bonus. Executive shall be entitled to the following Sales Bonuses during the Term provided he is employed as President and
Chief Executive Officer of the Company at the time of invoicing:

(a)For
all new Company international accounts added after December 31, 2013, 1% of the amount invoiced on such accounts during the Term,
provided: (i) the aggregate invoiced amount of all new Company international accounts added after December 31, 2013 meets Company’s
minimum gross profit margin of **%, net of freight, and meets all Company credit and payment terms then in effect; and (ii) the
gross profit margin for any individual invoiced transaction on which a Sales Bonus may be payable is not less than **%, net of
freight, and meets all Company credit and payment terms then in effect.

(b)One-half
of one percent (1/2 %) on all invoiced ** sales in excess of $5,000,000 per annum, provided payment is received in advance of invoicing
and the invoiced amount provides for a minimum gross profit of 18%, net of freight, and meets all Company credit and payment terms
then in effect.

All bonuses
to which Executive may be entitled under this Section 3.3 shall be payable and shall be subject to charge backs and other adjustments
in accordance with Company policy as may be in effect from time to time.

3.4Transaction
Bonus. In addition to his Base Salary and other amounts payable to Executive hereunder, provided Executive is still employed
by the Company upon the consummation of a Change in Control (as defined in Section 4.7 below), or in the event Executive’s
employment is terminated within one year immediately preceding the consummation of a Change in Control (other than by the Company
for “Cause” as defined below or by Executive without “Good Reason” as defined below), the Executive shall
be entitled to receive a bonus (the “Transaction Bonus”) in addition to any other payments or benefits applicable thereto
under this Agreement. The Transaction Bonus shall be in the following amount:

(a)No
Transaction Bonus shall be paid to the extent the “Transaction Value” does not exceed the sum of $25,940,000. For purposes
of this Section 3.4, “Transaction Value” shall mean the consideration realized (or assumed to be realized) by the Company’s
shareholders in connection with the Transaction (assuming for this calculation that one hundred percent (100%) of the Company is
sold (even if a lesser amount is, in fact, sold). In no event shall “Transaction Value” include any Company debt that
remains with the Company upon the consummation of a Change in Control or any debt or personal guarantee of Company debt which a
selling shareholder is relieved of in connection with a Change in Control.

(b)To
the extent the Transaction Value does not exceed $90,000,000, an amount equal to 8.5% of the Transaction Value less $25,940,000,
multiplied by the percentage of the Company sold.

(c)To
the extent the Transaction Value exceeds $90,000,000, an amount equal to 8.5% of the Transaction Value multiplied by the percentage
of the Company sold. Notwithstanding the foregoing, no Transaction Bonus shall be payable on any portion of the Transaction Value
in excess of $200,000,000.

(d)In
the event of a Transaction, as defined under Section 4.7 hereof, which does not constitute a “Change in Control” as
the stockholders of the Company immediately before the Transaction do not relinquish fifty percent (50%) or more of the total combined
voting power of the outstanding voting securities of the Company, but do relinquish twenty percent (20%) or more of the total combined
voting power of the outstanding securities of the Company, the Transaction Bonus shall be calculated in the manner as set forth
above upon a Change in Control. However, such amount shall then be reduced by the percentage of the sales proceeds of the Transaction
allocable to the Company’s then majority shareholder which is not currently distributed to such shareholder as a result of
the Transaction.

Any amounts
payable to Executive under this subsection (d) shall be applied against the first dollars otherwise payable to Executive upon a
subsequent Change in Control under subsections (b) and (c) above.

In addition,
if a Transaction Bonus is payable to the Executive upon a Change in Control, he shall not be entitled to any additional Transaction
Bonus under this Section 3.4 upon the occurrence of a subsequent Transaction unless: (i) the subsequent Transaction is related
to the Change in Control; and (ii) the Executive is still employed with the Company upon the consummation of the subsequent Transaction
or is no longer so employed as a result of having been terminated without Cause or having resigned for Good Reason. In the event
a series of related Transactions occurs subsequent to a Change in Control, the Executive shall be entitled to a Transaction Bonus
on each Transaction in the series, provided the requirements of (i) and (ii) above are satisfied with respect to each such Transaction.
For purposes of this provision, a subsequent Transaction shall be “related” to a Change in Control if it was agreed
upon at the time of, and is consummated within two (2) years of the consummation of, the Change in Control.

A Transaction
Bonus payable under this Section 3.4 upon the occurrence of a Transaction or a Change in Control shall be paid as soon as practicable
after the closing of such transaction but in no event later than March 15 of the year following the year in which the closing of
such transaction occurs. Notwithstanding the foregoing sentence, any Transaction Bonus payable under this Section 3.4 on account
of the occurrence of a transaction that constitutes a change in the ownership of the Company or a change in the ownership of a
substantial portion of the assets of the Company within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended,
and the regulations promulgated pursuant thereto (“Section 409A”), shall be paid on the same schedule, under the same
terms and conditions and in the same form of consideration (e.g., cash, stock in the acquiring company, promissory note or a combination
thereof) as is the consideration received by the holders of the majority of the outstanding voting securities of the Company who
participate in the transaction; provided, however, that in no event shall any portion of the Transaction Bonus be paid to Executive
on a date that is later than five (5) years after such transaction. In the Company’s sole and absolute discretion, it may
pay in cash all or any portion of the Transaction Bonus that would otherwise be paid in a form of consideration other than cash
pursuant to this Section. Upon request and at his sole expense, Executive shall be entitled to have the Company’s outside
auditors prepare a full and complete accounting of the calculation of the Transaction Value and the Transaction Bonus.

3.5Stock
Options. The Company and Executive previously entered into an Option Agreement dated May 5, 2008 (the “2008 Option Agreement”),
subject to which the Executive held options to acquire five hundred thousand (500,000) shares of the Company’s common stock,
$0.01 par value per share, at an exercise price per share equal to Seventy-Four Cents ($0.74) (the “2008 Options”).
Pursuant to the terms of the 2008 Option Agreement, the 2008 Options expired on December 31, 2013. In recognition of the expiration
of the 2008 Options, Executive shall be issued options to acquire five hundred thousand (500,000) shares of the Company’s
common stock, $0.01 par value per share, at an exercise price per share equal to the fair market value of a share of the Company’s
common stock on the date of grant, determined based on the per share closing price on such date (the “2014 Options”).
The 2014 Options shall vest over a three-year period running from the date of grant, with one-third of the 2014 Options vesting
on each of the first (1st), second (2nd) and third (3rd) anniversaries of the date of grant, subject in each case to the Optionee’s
continued satisfactory employment through the vesting date. Such options shall be subject to the terms and conditions of an option
agreement, substantially in the form attached hereto as Exhibit A.

3.6Automobile.
During the Term, Executive shall be entitled to the use of a 2014 S-class Mercedes automobile and the Company shall reimburse the
Executive for all reasonable automobile expenses incurred by him. In the event of a Change in Control (as defined in Section 4.7
below), the Company shall transfer to Executive ownership of any automobile then being used by Executive under this Section.

3.7Employee
Benefit Programs, Plans and Practices. During the Term, the Executive shall be entitled to participate in all employee pension,
welfare and fringe benefit programs, plans and practices (including, without limitation, the Company’s vacation plan under
which Executive is entitled to three (3) weeks of paid vacation time per year, up to seven (7) days of which may be carried over
to the following year without the written consent of the Company), and any incentive compensation plans, all in accordance with
the terms thereof and subject to the changes that may be made to them during the Term, which the Company makes available to its
executives.

3.8Expenses.
The Executive is authorized to incur reasonable expenses in carrying out his duties and responsibilities under this Agreement,
including, without limitation, expenses for travel and similar items related to such duties and responsibilities. The Company will
reimburse the Executive for all such expenses upon submission for approval and reimbursement in accordance with Company policy
and with copies of appropriately itemized accounts of such expenditures being provided by the Accounting Department to the Chairman
and Vice Chairman of the Board of Directors.

3.9Withholding
Taxes. The Company shall have the right to deduct or withhold from all payments due to Executive hereunder any and all sums
required for any and all federal, social security, state and local taxes, assessments or charges now applicable or that may be
enacted and become applicable in the future.

		4	TERMINATION OF EMPLOYMENT.

4.1Termination
by Company Without Cause or by Executive with Good Reason During the Term. If this Agreement and the Executive’s employment
hereunder are terminated during its term by the Company without “Cause” (as defined below) or by the Executive with
“Good Reason” (as defined below), the Executive shall be entitled to the following compensation and benefits:

(a)A
severance amount equal to the lesser of (i) twenty-four (24) months Base Salary; or (ii) Base Salary for the remainder of the Term,
paid in equal monthly installments commencing on the date that is sixty (60) days after the Termination Date and continuing each
month thereafter on the same day of the month as the initial installment payment. The amount of any severance otherwise payable
to Executive shall be reduced by the amount of earned income to which Executive shall be entitled for services performed during
the severance payment period for other than the Company;

(b)The
product of (i) the Value (as defined below), as of the last day of the calendar year containing the Termination Date, of any equity
or equity based awards granted under any plans or other arrangements, if any, that may be adopted or implemented by Company after
May 5, 2008, which Executive can show that he reasonably would have received had he remained employed by the Company through the
end of the calendar year containing the Termination Date, or four (4) months after the Termination Date, whichever is greater,
multiplied by (ii) a fraction, the numerator of which is the number of days in the calendar year in which the Date of Termination
occurs through the Termination Date and the denominator of which is 365, but only to the extent not previously vested, exercised
and/or paid. For purposes of this paragraph, the Value of any equity or equity based awards shall be determined by the Company’s
independent accountants, whose determination shall be final. Any amount to which the Executive is entitled under this Section 4.1(b)
shall be paid to him by the Company on the date that is sixty (60) days after the last day of the calendar year containing the
Termination Date; and

(c)Reimbursement
for reasonable and necessary expenses incurred by the Executive on behalf of the Company during the period ending on the Termination
Date;

(d)To
the extent not theretofore paid or otherwise provided for under this Agreement, Company shall timely pay or provide to Executive,
any other amounts or benefits which Executive is then entitled to receive through the Termination Date under any plan, program,
policy or practice or contract or agreement maintained by the Company for the benefit of Executive, including any unused vacation
that is accrued and unpaid as of the Termination Date; and

(e)Health
benefits. For twelve (12) months from the Termination Date, continued participation in any plan(s) providing medical, hospitalization
and dental coverage for Executive as of the Termination Date, subject to the same terms and conditions, including but not limited
to those requiring contributions by Executive, as were applicable to Executive immediately prior to the Termination Date. Any coverage
to be provided for Executive under this paragraph shall be conditioned upon his timely election of COBRA or any other laws providing
for continuation of coverage upon employment termination, effective as of the Termination Date. If, for any reason, Company’s
plan(s) do not permit such coverage subsequent to termination of employment, Company will, to the extent it is able to do so, provide
Executive with similar coverage (with the same after tax effect) outside of such plan(s).

(f)All
bonuses and stock options previously earned, or which may be earned by Executive under Section 3.4 of this Agreement in the event
of a consummation of a Change in Control within one year immediately following the termination of Executive’s employment.

4.2Except
as otherwise provided in this Agreement, all payments required to be paid by the Company to the Executive pursuant to Section 4.1
are payable on the date that is sixty (60) days after the Termination Date. Notwithstanding any other provision of this Agreement
to the contrary, if the Executive is a “specified employee” within the meaning of Section 409A as of the date of his
separation from service with the Company, no amount that constitutes deferred compensation within the meaning of Section 409A shall
be paid to Executive on account of his separation from service prior to the date that is six (6) months after the date of such
separation from service (or, if earlier, the date of death of the Executive). Any such payments to which Executive would otherwise
be entitled during the six-month period immediately following the date of his separation from service shall be accumulated and
paid on the first day of the seventh month after separation from service.

4.3Termination
by Company For Cause or by Executive Without Good Reason. If the Company hereunder terminates Executive’s employment
at any time for Cause (as defined below) or Executive terminates his employment without Good Reason, Executive shall have no right
to any bonuses, salaries, benefits or other compensation other than those accrued through the date of employment termination or
required by law to be provided.

4.4Termination
On Account of Death or Disability. Company shall treat termination of Executive’s employment on account of his Death
or Disability as a Termination without Cause for purposes of this Agreement. In the event of Executive’s Death, the Termination
Date shall be his date of death. In the event of Executive’s Disability, the Termination Date shall be the date that is five
(5) days after the date on which Company gives Executive written notice of termination of employment on account of his Disability.
Such written notice may be given by Company at any time after Executive has suffered a physical or mental illness that renders
him incapable of fulfilling his obligations under this Agreement, and such physical or mental illness existed and rendered him
incapable of fulfilling his obligations for a period of at least ninety (90) days within a consecutive one hundred and eighty (180)
day period. The Company’s determination that Executive is incapable of fulfilling his obligations under this Agreement shall
be final and binding in the absence of fraud.

4.5As
used herein, the term “Cause” shall mean (i) willful malfeasance or willful misconduct by Executive in connection with
his employment, (ii) continuing refusal by Executive to perform his duties hereunder or follow any lawful direction of the Board,
(iii) any material breach of the provisions of Sections 12 or 13 of this Agreement by Executive, (iv) engaging in conduct detrimental
to the interest or reputation of the Company, without regard to whether such conduct was in connection with the Executive’s
employment, or (v) the Executive’s conviction of, or plea of nolo contendere to, a felony (other than a traffic violation),
which, in each event in (i), (ii) or (iii), actually has a material effect on the Company and its business. The cessation of employment
of the Executive shall not be deemed to be for Cause unless and until there shall have been delivered to the Executive a copy of
a resolution duly adopted by the affirmative vote of the Board at a meeting of the Board called and held for such purpose (after
reasonable notice is provided to the Executive and the Executive is given an opportunity, together with counsel, to be heard before
the Board), finding that, based upon a reasonable good faith determination of the Board, the Executive is guilty of the conduct
described above, and specifying the particulars thereof in detail. The Executive shall have ten (10) days after the date that such
written notice has been given to the Executive in which to cure such conduct, to the extent such cure is possible.

4.6As
used herein, the term “Good Reason” shall mean (i) a reduction in the Executive’s Base Salary; (ii) a substantial
diminution of the Executive’s duties and responsibilities; or (iii) a relocation of the Executive’s primary workplace
that is not agreed to by him and is to a location that is greater than fifty (50) miles from Executive’s primary workplace
as of the date of this Agreement, provided, however, that any required travel related to the business of the Company, including
but not limited to its planned expansion in the international market, shall not be deemed to constitute, or result in, the relocation
of the Executive’s primary workplace for purposes of this Agreement. The Company’s employment of another officer in
a newly created position or otherwise, at a position beneath that of the Executive, shall not be deemed to constitute, or result
in, a substantial diminution of the Executive’s duties or responsibilities for purposes of this Agreement.

4.7Termination
Following a Change in Control. If the Company or any successor or assignee terminates Executive’s employment at any time
during the Term following a “Change in Control” (as defined below) of the Company: (i) Executive shall be entitled
to an amount equal to the Base Salary which would otherwise be payable over the remaining term of this Agreement, payable in a
lump sum within thirty (30) days after the date of such termination of employment; (ii) any outstanding Awards (including substituted
shares of the acquiring or surviving Company in the case of a merger or acquisition) held by Executive or other benefits under
any Company plan or program, which have not vested in accordance with their terms will become fully vested and exercisable at the
time of such termination; and (iii) all bonuses and stock options previously earned, or which may be earned by Executive under
Section 3.4 of this Agreement in the event of the consummation of a Change in Control within one year immediately following the
termination of Executive’s employment. “Change in Control” means an Ownership Change Event or series of related
Ownership Change Events (collectively, a “Transaction”) in which the stockholders of the Company immediately
before the Transaction do not retain immediately after the Transaction, direct or indirect beneficial ownership of fifty percent
(50%) or more of the total combined voting power of the outstanding voting securities of the Company, or in the event of an Ownership
Change Event, the entity to which the assets of the Company were transferred. An “Ownership Change Event” shall
be deemed to have occurred if any of the following occurs with respect to the Company: (i) the direct or indirect sale or exchange
by the stockholders of the Company of all or substantially all of the voting stock of the Company; (ii) a merger or consolidation
in which the Company is a party; (iii) the sale, exchange, or transfer of all or substantially all of the assets of the Company
(other than a sale, exchange or transfer to one or more subsidiaries of the Company); or (iv) a liquidation or dissolution of the
Company.

Notwithstanding
the foregoing, no Change in Control, Ownership Change Event or Transaction shall be deemed to have occurred for any purpose under
this Agreement as a result or on account of: (i) a transfer or other disposition, by sale, gift or otherwise,
of an interest in the Company by Richard J. Kurtz (“Kurtz”) to his spouse, children or grandchildren, or the spouses
of his children, either directly or indirectly for their benefit, in trust or otherwise; or (ii) the death or incapacity
of Kurtz wherein his interest is transferred to his heirs only.  The Executive shall not be entitled
to any payment under this Agreement upon the occurrence of, or calculated with reference to, any such transfer or disposition.

4.8Release
of Claims. Upon good and valuable consideration, the receipt of which the Executive and the
Company each hereby acknowledge, upon termination of the Executive’s employment for any reason set forth in Section 4, with
the exception of the reasons for termination provided under Section 4.3, the Company and the Executive agree to execute a release
of claims, substantially in the form attached hereto as Exhibit B, with respect to claims that arise on or prior to the
date of the execution of the release. The Executive’s execution of such release and the release becoming effective and irrevocable
within the sixty (60) day period immediately following his termination of employment shall be a condition precedent to the payment
of any of the compensation and benefits referred to in this Section 4.

4.9Notice
of Termination. Any purported termination by the Company or by the Executive shall be communicated by written notice of termination
to the Executive or the Company, respectively, delivered on or prior to the effective date of such termination.

5.TERMINATION
DATE. “Termination Date” shall mean, in the case of the Executive’s death, his date of death and, in all
other cases, the last day of the Executive’s employment with the Company hereunder.

6.SUCCESSORS;
BINDING AGREEMENT.

6.1This
Agreement shall be binding upon and shall inure to the benefit of the Company, its successors and assigns and, at the time of any
such succession or assignment, the Company shall require any successor or assign to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession or assignment
had taken place. The term the “Company” as used herein shall include such successors and assigns. The term “successors
and assigns” as used herein shall mean a corporation or other entity acquiring ownership, directly or indirectly, of all
or substantially all the assets and business of the Company (including this Agreement) whether by operation of law or otherwise.

6.2Neither
this Agreement nor any right or interest hereunder shall be assignable or transferable by the Executive, his beneficiaries or legal
representatives, except by will or by the laws of descent and distribution. This Agreement shall inure to the benefit of and be
enforceable by the Executive’s legal personal representative.

7.NOTICE.
For the purpose of this Agreement, notices and all other communications provided for in the Agreement (including a notice of termination
of employment) shall be in writing and shall be deemed to have been duly given when personally delivered or sent by certified mail,
return receipt requested, postage prepaid, addressed to the respective addresses last given by each party to the other, provided
that all notices to the Company shall be directed to the attention of the Board with a copy to the secretary of the Company. All
notices and communications shall be deemed to have been received on the date of delivery thereof or on the third business day after
the mailing thereof, except that notice of change of address shall be effective only upon receipt.

8.NON-EXCLUSIVITY
OF RIGHTS. Nothing in this Agreement shall prevent or limit the Executive’s continuing or future participation in any
benefit, bonus, incentive or other plan or program provided by the Company and for which the Executive may qualify, nor shall anything
herein limit or reduce such rights as the Executive may have under any other agreements with the Company. Amounts which are vested
benefits or which the Executive is otherwise entitled to receive under any plan or program of the Company shall be payable in accordance
with such plan or program.

9.MISCELLANEOUS.
No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and the Company. No waiver by either party hereto at any time of any breach by the other
party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreement
or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party
which are not expressly set forth in this Agreement. No additional compensation provided under any benefit or compensation plans
to the Executive shall be deemed to modify or otherwise affect the terms of this Agreement or any of the Executive’s entitlements
hereunder.

10.GOVERNING
LAW. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware, without
reference to principles of conflicts of laws.

11.SEVERABILITY.
The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect
the validity or enforceability of the other provisions hereof.

 

12.NONSOLICITATION;
NONCOMPETITION.

12.1The
Executive hereby covenants and agrees that at all times during the period of his employment with the Company and for two years
thereafter (the “Restriction Period”), he shall not, either directly or indirectly, for himself or for or through any
third-party, without the prior written consent of the Board, (i) solicit or take any action to willfully or intentionally cause
the solicitation of any person who as of the Termination Date, or at any time during the two year period immediately preceding
the Termination Date, is a “Client” of the Company (as hereinafter defined) to transact any business with a “Competitive
Enterprise” (as hereinafter defined) or discontinue business, in whole or in part with the Company; (ii) willfully or intentionally
interfere with or damage any relationship between a Client and the Company, or (iii) solicit any person employed by, or performing
services in any other capacity, including but not limited to as an independent contractor or distributor, on the Termination Date
or at any time within the immediately preceding two year period, for the Company or any of its subsidiaries, to apply for or accept
employment with, or perform services in any other capacity for, a Competitive Enterprise or otherwise encourage or entice such
person to leave is position with the Company or any of its subsidiaries.

12.2The
Executive hereby covenants and agrees that during the Restriction Period, the Executive shall not, either directly or indirectly,
for himself or for or through any third party, (a) accept business which is substantially similar to the business of the Company
from any individual or entity that obtained the goods or services of, or purchased goods or services from, the Company during the
two (2) year period immediately prior to the Termination Date; (b) accept business from any Client of the Company (the identity
of and information concerning which constitute trade secrets and Confidential Information of the Company) on behalf of any individual
or entity in connection with any business substantially similar to the business of the Company, or (c) make known the names and
addresses of such customers or any information relating in any manner to the Company’s trade or business relationships with
such customers, other than in connection with the performance of Executive’s employment with Company.

12.3The
Executive hereby covenants and agrees that, except as otherwise provided in this section, at all times during the Restriction Period,
he shall not, without the prior written consent of the Board, be engaged in or have a financial interest in any business that is
a Competitive Enterprise, or otherwise engage in any activity that is a Competitive Enterprise. Notwithstanding the foregoing,
in the event the Executive is terminated without Cause or resigns for Good Reason, the restrictions on competition contained in
this Section 12.3 shall only apply during the period for which he is entitled to severance payments under Section 4.1 hereof.

Upon the
expiration of the term of this Agreement or any renewal thereof, the restrictions on competition contained in this Section 12.3
shall not apply if the Company, in its discretion, elects not to offer Executive continued employment upon terms and conditions
substantially equivalent to those that were in effect immediately prior to the expiration of the term of this Agreement or any
renewal thereof.

12.4For
purposes of this Agreement, the term “Competitive Enterprise” shall mean any business which is in competition with
a business engaged in by the Company or any of its subsidiaries or affiliates in any state of the United States or in any foreign
country in which any of them are engaged in business at the time of such termination of employment for as long as they carry on
a business therein. Notwithstanding the preceding sentence, the Executive shall not be prohibited from owning less than five (5%)
percent of any publicly traded corporation.

12.5For purposes
of this Agreement, “Client” shall mean (a) an existing client or customer of the Company or any of its subsidiaries;
or (b) an intended client or customer of the Company or any of its subsidiaries with whom the Company has devoted a substantive
amount of resources pursuing, and as a direct result there from has a reasonable belief that there will be an imminent purchase
order or other agreement to purchase Company’s goods and/or services.

 

12.6The
Executive acknowledges, agrees and confirms that the restrictions contained in this Section are necessary to protect the legitimate
business interests of the Company and shall be enforceable to the fullest extent permitted by applicable law. Therefore, to the
extent any court of competent jurisdiction shall determine that any portion of the foregoing restrictions is excessive, such provision
shall not be entirely void, but rather shall be limited or revised only to the extent necessary to make it enforceable. Specifically,
if any court of competent jurisdiction should hold that any portion of the foregoing description is overly broad as to one or more
states of the United States or one or more foreign jurisdictions, then that state or states or foreign jurisdiction or jurisdictions
shall be eliminated from the territory to which the restrictions of this Section 12 applies and the restrictions shall remain applicable
in all other states of the United States and foreign jurisdictions.

13.CONFIDENTIAL
INFORMATION. The Executive agrees to keep secret and retain in the strictest
confidence all confidential matters which relate to the Company, its subsidiaries and affiliates, including without limitation,
customer lists, client lists, trade secrets, pricing policies and other business affairs of the Company, its subsidiaries and affiliates
learned by him from the Company or any such subsidiary or affiliate or otherwise before or after the date of this Agreement, and
not to disclose any such confidential matter to anyone outside of the Company or
any of its subsidiaries or affiliates, whether during or after his period of service with the Company, except (i) as such disclosure
may be required or appropriate in connection with his work as an employee of the Company or (ii) when required to do so by a court
of law, by any governmental agency having supervisory authority over the business of the Company or by any administrative or legislative
body (including a committee thereof) with apparent jurisdiction to order him to divulge, disclose or make accessible such information.
The Executive agrees to give the Company advance written notice of any disclosure pursuant to clause (ii) of the preceding sentence
and to cooperate with any efforts by the Company to limit the extent of such disclosure. Upon request by the Company, the Executive
agrees to deliver promptly to the Company upon termination of his services for the Company, or at any time thereafter as the Company
may request, all Company, subsidiary or affiliate memoranda, notes, records, reports, manuals, drawings, designs, computer files
in any media and other documents (and all copies thereof) relating to the Company’s or any subsidiary’s or affiliate’s
business and all property of the Company or any subsidiary or affiliate associated therewith, which he may then possess or have
under his direct control, other than personal notes, diaries, rolodexes and correspondence.

 

14.OWNERSHIP
OF DEVELOPMENTS AND OTHER RIGHTS. All copyrights, patents, trade secrets, or other intellectual property rights associated
with any ideas, concepts, techniques, inventions, formulations, processes or works of authorship, or other property or rights of
a similar nature, including websites and website domains, developed or created by Executive during the Term or at any other time
while performing services for on or behalf of the Company, directly or indirectly, shall belong exclusively to the Company.

 

15.REMEDY.
Should the Executive engage in or perform, either directly or indirectly, any of the acts prohibited by Sections 12 or 13 hereof,
or treats as his own any developments belonging to Company pursuant to Section 14 hereof, it is agreed that the Company shall be
entitled to full injunctive relief, to be issued by any competent court of equity, enjoining and restraining the Executive and
each and every other person, firm, organization, association, or corporation concerned therein, from the continuance of such violative
acts. The foregoing remedy available to the Company shall not be deemed to limit or prevent the exercise by the Company of any
or all further rights and remedies, which may be available to the Company hereunder or at law or in equity

 

16.SECTION
409A. The arrangement set forth in this Agreement is intended to comply with, and shall be administered,
interpreted and construed in a manner consistent with Section 409A. It is further intended that any payment or benefit provided
pursuant to or under this Agreement that is considered to be a deferral of compensation within the meaning of Section 409A: (i)
shall be paid and provided in a manner, and at such time and in such form, that complies with the applicable requirements of Section
409A to avoid the imposition of additional taxes or interest thereunder; and (ii) if payable on account of the Executive’s
termination of employment, notwithstanding any other provision of this Agreement to the contrary, the Executive shall not be entitled
to such payment or benefit unless his termination of employment constitutes a “separation from service” within the
meaning of Section 409A.

 

Notwithstanding any other
provision of this Agreement, to the extent any amount payable under this Agreement would cause Executive to be liable for the additional
tax imposed under Section 409A, this Agreement shall be amended, to the extent permitted under Section 409A and applicable law,
in such manner as may be necessary to comply, or to evidence or further evidence required compliance, with Section 409A; provided,
however, that no such amendment shall deprive the Executive of a right accrued under this Agreement prior to the date of the amendment.

 

The
Company does not guarantee any particular tax effect with respect to any payment provided for under this Agreement. The Company
shall not be liable for any payment that is determined to result in an additional tax, penalty, or interest under Section 409A,
nor for reporting in good faith any payment made under this Agreement as an amount includible in gross income under Section 409A.
Executive shall remain liable for all taxes, interest or penalties imposed against him under Section 409A.

 

17.ENTIRE AGREEMENT; WAIVER OF CLAIMS.
This Agreement constitutes the entire agreement between the parties hereto with respect to the terms of the Executive’s employment
with the Company and supersedes all prior agreements, understandings and arrangements, oral or written, between the parties hereto
with respect to such subject matter, and the terms and conditions of the Executive’s employment with the Company shall be
governed solely pursuant to the terms of this Agreement (which shall include the plans or programs referred to in this Agreement).

 

18.COUNTERPARTS. This Agreement
may be executed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto
were upon the same instrument.

 

19.CONSULTATION AND REVIEW BY INDEPENDENT
COUNSEL. Executive represents to Company that he has consulted with and been advised by independent counsel of his own choosing
in connection with the negotiation of the form and substance of this Agreement prior to its execution.

 

20.INDEMNIFICATION. The Company
shall indemnify the Executive against all lawsuits, losses, claims, expenses, or other liabilities of any nature by reason of the
fact that he (a) is or was an officer, director, employee, or agent of the Company or any of its subsidiaries or affiliates, or
(b) while he is or was a director, officer, employee or agent of the Company, the Company or any of their subsidiaries or affiliates,
is or was servicing at the request of the Company as a director, officer, partner, venture, proprietor, trustee, employee, agent
or similar functionary of another corporation, partnership, joint venture, trust, employee benefit plan or other entity.

 

21.NON-BINDING MEDIATION. In
the event of a dispute under this Agreement, each party agrees to submit to non-binding mediation prior to the commencement of
any legal or administrative proceeding against the other for any alleged violation of the Agreement. If the parties are unable
to agree upon an individual to serve as mediator, they shall each select an attorney or other individual recognized as an approved
mediator, and those two individuals selected shall jointly agree upon the selection of a third individual who shall alone serve
as mediator. If such parties are also unable to agree upon an individual to serve as mediator, the requirement of each party to
submit to non-binding mediation under this

Agreement shall be
waived.

 

 

 

[SIGNATURE PAGE
FOLLOWS]

     

     

    

IN WITNESS WHEREOF,
the Company has caused this Agreement to be executed by its duly authorized representative and the Executive has executed this
Agreement as of the day and year first above written.

 

 

LAPOLLA INDUSTRIES, INC.

 

 

By: /s/ Richard J. Kurtz, Chairman
of the Board

Richard J. Kurtz, Chairman of
the Board

 

 

EXECUTIVE:

 

/s/ Douglas J. Kramer

Douglas J. Kramer

 

 

     

     

    

 

EXHIBIT A

OPTION AGREEMENT

(See
Exhibit 10.2 to Form 8-K dated January 22, 2014 which is incorporated herein by this reference)

     

     

    

EXHIBIT B

MUTUAL RELEASE

(a) Douglas J. Kramer (the
“Releasor”), for and in consideration of benefits provided pursuant to the Executive Employment Agreement (the
“Agreement”), effective as of January 1, 2014, by and between the Releasor and LaPolla Industries, Inc. (the
“Company”), does for himself and his, heirs, executors, administrators, successors and assigns, hereby now and
forever, voluntarily, knowingly and willingly release and discharge the Company and its parents, subsidiaries and affiliates (collectively,
the “Company Group”), together with their respective present and former partners, officers, directors, employees
and agents, and each of their predecessors, heirs, executors, administrators, successors and assigns (but as to any partner, officer,
director, employee or agent, only in connection with, or in relationship to, his or its capacity as a partner, officer, director,
employee or agent of the Company and its subsidiaries or affiliates and not in connection with, or in relationship to, his or its
personal capacity unrelated to the Company or its subsidiaries or affiliates) (collectively, the “Company Releasees”)
from any and all charges, complaints, claims, promises, agreements, controversies, causes of action and demands of any nature whatsoever,
known or unknown, suspected or unsuspected, which against the Company Releasees, jointly or severally, Releasor or Releasor’s
heirs, executors, administrators, successors or assigns ever had or now have by reason of any matter, cause or thing whatsoever
arising from the beginning of time to the time Releasor executes this release arising out of or relating in any way to Releasor’s
employment relationship with the Company, including but not limited to, any rights or claims arising under any statute or regulation,
including the Age Discrimination in Employment Act of 1967, Title VII of the Civil Rights Act of 1964, the Civil
Rights Act of 1991, the Americans with Disabilities Act of 1990, or the Family and Medical Leave Act of 1993, each as amended,
or any other federal, state or local law, regulation, ordinance or common law, or under any policy, agreement, understanding or
promise, written or oral, formal or informal, between any Company Releasee and Releasor. Releasor shall not seek or be entitled
to any recovery, in any action or proceeding that may be commenced on Releasor’s behalf in any way arising out of or relating
to the matters released under this Release. Notwithstanding the foregoing, nothing herein shall release any Company Releasee from
any claim or damages based on (i) the Releasor’s rights under the Agreement, (ii) any right or claim that arises after the
date the Releasor executes this release, (iii) the Releasor’s eligibility for indemnification in accordance with applicable
laws or the certificate of incorporation or by-laws of the Company (or any affiliate or subsidiary) or any applicable insurance
policy, with respect to any liability the Releasor incurs or incurred as an officer or employee of the Company or any affiliate
or subsidiary (including as a trustee or officer of any employee benefit plan) or (iv) any right the Releasor may have to obtain
contribution as permitted by law in the event of entry of judgment against the Releasor as a result of any act or failure to act
for which the Releasor and the Company or any affiliate or subsidiary are held jointly liable.

 

(b) The Releasor has been
advised to consult with an attorney of the Releasor’s choice prior to signing this release, has done so and enters into this
release freely and voluntarily.

 

(c) The Releasor has had
in excess of twenty-one (21) calendar days to consider the terms of this release. Once the Releasor has signed this release, the
Releasor has seven (7) additional days to revoke the Releasor’s consent and may do so by writing to the Company. The eighth
day after the Releasor shall have executed this release shall be referred to herein as the Revocation Date.

 

(d) The Company, for and
in consideration of the Releasor’s covenants under the Agreement, on behalf of itself and the other members of the Company
Group and any other Company Releasee, their respective successors and assigns, and any and all other persons claiming through any
member of the Company Group or such other Company Releasee, and each of them, does hereby now and forever, voluntarily, knowingly
and willingly release and discharge, the Releasor and dependents, administrators, agents, executors, successors, assigns, and heirs,
from any and all charges, complaints, claims, promises, agreements, controversies, causes of action and demands of any nature whatsoever,
known or unknown, suspected or unsuspected, which against the Releasor, jointly or severally, the Company and each other member
of the Company Group or any other Company Releasee, their respective successors and assigns, and any and all other persons claiming
through any member of the Company Group or such other Company Releasee ever had, now have or hereafter can, shall or may have by
reason of any matter, cause or thing whatsoever arising from the beginning of time to the time the Company executes this release
arising out of or relating to the Releasor’s employment relationship with the Company, including, but not limited to, any
claim, demand, obligation, liability or cause of action arising under any federal, state or local employment law or ordinance,
tort, contract or breach of public policy theory or alleged violation of any other legal obligation. Notwithstanding the foregoing,
nothing herein shall release the Releasor and his dependents, administrators, agents, executors, successors, assigns, and heirs,
(i) in respect of the Company’s rights under the Agreement, including, without limitation, with respect to the Company’s
rights under Section 15 of the Agreement to enforce the Releasor’s obligations under Section 12 and Section 13 of the Agreement,
or (ii) from any claims or damages based on any right or claim that arises after the date the Company executes this release. This
release shall not apply to any claim relating to fraud, willful misconduct or breach of fiduciary duty by the Releasor arising
from any fact first learned by the Company, excluding the Releasor’s knowledge, subsequent to the Company’s execution
of this release.

 

(e) The Company’s
release shall become effective on the Revocation Date, assuming that the Releasor shall have executed this release and returned
it to the Company and has not revoked the Releasor’s consent to this release prior to the Revocation Date.

 

(f) In the event that any one or more of the
provisions of this release shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of
the remainder of this release shall not in any way be affected or impaired thereby.

 

The law of the State of
Delaware shall govern this release without reference to its choice of law rules.

 

LAPOLLA INDUSTRIES, INC.

 

By: 

Richard J. Kurtz, Chairman of the
Board

 

Dated: __________

 

 

Douglas J. Kramer

 

Dated: __________

 

	 
	LAPOLLA INDUSTRIES, INC.
	By: 	 
		
	 	Richard J. Kurtz, Chairman of the Board
	 	 
	 	Dated:   __________
	 	 
	 	 
	 	Douglas J. Kramer
	 	 
	 	Dated:  __________

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