Document:

Unassociated Document

    
      

    

    Exhibit
10.3

    GUARANTY

     

    In order
to induce ComVest Capital, LLC (the “Lender”), to (a)
enter into that certain Amended and Restated Revolving Credit and Term Loan
Agreement of even date herewith (as same may be amended, modified, supplemented
and/or restated from time to time, the “Loan Agreement”) with
LaPolla Industries, Inc. (the “Obligor”), (b) accept
from the Obligor that certain Amended and Restated Term Note of even date
herewith in the principal amount of $3,000,000 (as same may be amended,
modified, supplemented and/or restated from time to time, the “Note”), being issued
pursuant to the Loan Agreement, and (c) extend to the Obligor the Term Loan
contemplated by the Loan Agreement, the undersigned, RICHARD KURTZ, an individual
(the “Guarantor”), hereby
guarantees to the Lender, and/or any other holder(s) of any Guaranteed
Obligations (as such term is hereinafter defined) from time to time, the full
and timely payment and performance by the Obligor of all principal, interest,
collection costs and other obligations from time to time outstanding under, in
respect of or pursuant to the Term Loan made under the Loan Agreement and
further evidenced by the Note (collectively, the “Guaranteed
Obligations”).  This is an absolute, irrevocable and
unconditional guaranty of payment and not merely of collection, and the Lender
may (notwithstanding the Guarantor’s joint and several liability with the
Obligor and any and all other guarantor(s) of any of the Guaranteed Obligations)
enforce this Guaranty without the need to resort to any proceedings or obtain
any judgment as against the Obligor or any guarantor, or to make any resort to
or against any collateral pledged by the Obligor or any guarantor to secure the
payment and performance of any of the Guaranteed Obligations; and in the event
that there shall at any time occur and be continuing any Event of Default under
and as defined in the Loan Agreement, or if the Guaranteed Obligations shall
otherwise become accelerated in accordance with the provisions of the Loan
Agreement, then the Guarantor shall forthwith pay to the Lender, on demand, all
Guaranteed Obligations.

     

    This
Guaranty shall remain in full force and effect until such time as the Obligor or
the Guarantor has delivered to the Lender financial statements and calculations
which accurately reflect and demonstrate that the Obligor has maintained a ratio
of EBITDA to Debt Service (as such terms are defined in the Loan Agreement) of
1.25 to 1.0 for any period of three (3) consecutive fiscal quarters commencing
after the date hereof (the “Release
Condition”).  In the event that any such financial statements
and calculations shall be inaccurate to such an extent as to cause such ratio
not to be met in any of the three (3) subject fiscal quarters, then this
Guaranty shall be deemed to have remained in effect at all times without regard
to any claimed satisfaction of such Release Condition.

     

    1.           Until
that date which is one (1) year after the indefeasible payment in full of the
Guaranteed Obligations, the Guarantor makes the following waiver:  THE
GUARANTOR SHALL NOT TAKE BY ASSIGNMENT, SUBROGATION OR OTHERWISE ANY CLAIM OR
COLLATERAL THAT THE LENDER MIGHT HAVE OR OBTAIN AGAINST OR FROM THE OBLIGOR, AND
THE GUARANTOR IRREVOCABLY WAIVES AND RELEASES, IN ADDITION TO THOSE CLAIMS, ANY
CLAIM FOR UNJUST ENRICHMENT, INDEMNIFICATION, CONTRIBUTION OR REIMBURSEMENT, AND
ANY AND ALL OTHER SUBROGATION CLAIMS AGAINST THE OBLIGOR ON ACCOUNT OF ANY
PAYMENTS HEREUNDER, WHETHER BY STATUTE, BY CONTRACT, BY LAW OR IN EQUITY,
WHETHER ACTUAL OR CONTINGENT, AND WHETHER NOW OR HEREAFTER ARISING.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    2.           In
order to induce the Lender to accept this Guaranty, the Guarantor hereby
represents and warrants that (a) this Guaranty constitutes the legal, valid
and binding obligation of the Guarantor enforceable against the Guarantor in
accordance with its terms, except to the extent that enforceability may be
limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors’ rights generally, and by general principles of equity,
and (b) the Guarantor’s execution, delivery and performance of this
Guaranty does not conflict with or constitute a breach of any agreement or
obligation to which the Guarantor is a party or by which any of his property or
assets is bound, or require the consent of any other person.

     

    3.           The
Guarantor hereby acknowledges and confirms that, as a principal shareholder of
the Obligor, the Guarantor will derive immediate and substantial benefit from
the loans and advances to be made from time to time to the Obligor under the
Loan Agreement.  The Guarantor hereby further acknowledges and agrees
that the validity of this Guaranty and the Guarantor’s obligations hereunder
shall in no way be terminated, modified, affected, impaired or diminished by
reason of any of (i) the granting by the Lender of any consent, indulgence,
extension, renewal, waiver, compromise or release to the Obligor or any other
guarantor(s) of any of the Guaranteed Obligations, (ii) any failure by the
Lender to insist in any one or more instances upon strict performance or
observance by the Obligor and/or any such other guarantor(s) of any of the
terms, provisions or conditions of the Loan Agreement, the Note and/or any
security agreements, collateral agreements or other agreements or instruments
establishing or evidencing any collateral security for the Guaranteed
Obligations, the Loan Agreement, the Note, this Guaranty or any other guaranty
of any of the Guaranteed Obligations (collectively, the “Loan Documents”),
(iii) any assertion or non-assertion by the Lender against the Obligor
and/or any such other guarantor(s) of any of the rights or remedies reserved to
the Lender in the Loan Documents (including, without limitation, any application
of payments received from or in respect of the Obligor), (iv) any
forbearance by the Lender from exercising any of its rights or remedies as
aforesaid, (v) any bankruptcy, insolvency, receivership, reorganization,
liquidation or other similar proceeding relating to the Obligor and/or any such
other  guarantor(s), (vi) any relief of the Obligor and/or any
such other guarantor(s) from any of its obligations under the Loan Documents, by
operation of law, in equity or otherwise, (vii) any offset or defense
(other than the defense of full payment) in favor of the Obligor, the Guarantor
and/or any such other guarantor(s) against the Lender, (viii) any
amendment, modification, extension, renewal, termination, compromise or waiver
under or in respect of the Loan Documents, (ix) any sale, release or other
disposition of any collateral security for the Guaranteed Obligations,
(x) any failure to take  any action in respect of any such
collateral, (xi) any transfer, assignment or negotiation of any of the Loan
Documents and/or any collateral security as aforesaid (including, without
limitation, this Guaranty), or (xii) any application of payments, in accordance
with the Loan Agreement, to any other Obligations prior to application to the
Guaranteed Obligations.  The Guarantor hereby waives any and all
notice, demand, presentment, protest and other such privilege or formality, and
all notice in respect of the creation, renewal, extension or accrual of any
Guaranteed Obligations.

     

    4.           The
Guarantor hereby covenants and agrees that, for so long as any Guaranteed
Obligations remain outstanding and/or the Obligor has any right to make further
borrowings under the Loan Agreement, the Guarantor shall, within 30 days after
the filing thereof, provide to the Lender true and complete copies of all
federal and state tax returns and other tax filings made by or on behalf of the
Guarantor and/or his spouse.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    5.           This
Guaranty may be executed in any number of counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.

     

    6.           This
Guaranty shall be binding upon the undersigned Guarantor and his heirs,
executors, administrators, personal representatives, successors and assigns,
shall inure to the benefit of the Lender and its successors and assigns, and
shall terminate only upon the indefeasible payment and performance in full of
all of the Guaranteed Obligations.  No assignment of, or succession
to, the obligations of the Guarantor hereunder shall in any way terminate,
modify, affect, impair or diminish the obligations of the Guarantor hereunder,
absent an express written agreement to such effect duly executed by the
Lender.

     

    7.           No
delay on the part of the Lender in exercising any rights hereunder, or any
failure by the Lender to exercise any such rights, shall operate as a waiver of
any such rights for any purposes, it being understood that the Lender may
exercise any and all of its rights hereunder at any time and from time to time
pursuant to the terms hereof.

     

    8.           This
Guaranty may not be terminated, modified or amended except by a writing duly
executed by the Lender and the Guarantor.

     

    9.           This
Guaranty shall be governed by and construed in accordance with the laws of the
State of New York, without giving effect to principles of conflicts of laws
(other than Sections 5-1401 and 5-1402 of the New York General Obligations
Law).  The Guarantor hereby consents to the jurisdiction of all courts
(state and/or federal) sitting in the State of New York in connection with any
action or proceeding under or in respect of this Guaranty, and waives trial by
jury in any such action or proceeding.

     

    10.           In
the event that the holder hereof shall, after default by the Guarantor of any of
his obligations hereunder, place this Guaranty in the hands of any attorney for
enforcement and/or collection, through legal proceedings or otherwise, the
Guarantor shall pay to the holder hereof all costs and expenses of enforcement
and collection (including reasonable attorneys’ fees).

     

    11.           All
capitalized terms used herein without definition have the respective meanings
ascribed to them in the Loan Agreement.

     

    IN WITNESS WHEREOF, the
undersigned Guarantor, intending to be legally bound hereby, has executed this
Guaranty as of this 30th day of June, 2008.

     

    

    
    

     

    
      	 	/s/  Richard
      J. Kurtz
	 	Richard
      Kurtz

    

     

    

    3ex10_4.htm

    
      

    

    Exhibit
10.4

     

    AMENDED
AND RESTATED

    REVOLVING CREDIT
NOTE

     

    
      	
              $9,500,000

            	
              June
      30, 2008

            

    

    

     

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

     

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

     

    
      	
              Coverage
      Ratio

            	
              Stated
      Rate

            	
              Minimum
      Rate

            
	 	 	 
	
              Less
      than 1.0 to 1.0

            	
              Prime
      Rate + 1%

            	
              8.5%

            
	 	 	 
	
              > 1.0 to 1.0
      but

              <
      1.25 to 1.0

            	
              Prime
      Rate + .75%

            	
              8.0%

            
	 	 	 
	
              > 1.25 to
      1.0 but

              <
      2.0 to 1.0

            	
              Prime
      Rate + .65%

            	
              7.5%

            
	 	 	 
	
              > 2.0 to
      1.0

            	
              Prime
      Rate + 0%

            	
              6.0%

            

    

     

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

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

     

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

     

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

     

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

     

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

     

    
      
        
           

        

        
          2

          
            

          

        

        
           

        

      

    

    

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

     

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

     

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

     

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

    

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

    

    [The
remainder of this page is intentionally blank]

    

    
      
        
           

        

        
          3

          
            

          

        

        
           

        

      

    

    

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

    
      	 
      	
              LAPOLLA
      INDUSTRIES, INC.

            
	 
      	 
      
	 
      	 
      
	 
      	
              By:

            	
              /s/  Michael T. Adams,
      EVP

            
	 	 	Name:  Michael
      T. Adams
	 	 	Title:    Executive
      Vice President

    

    

    
4

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