Document:

Exhibit 10.12

 

THIRTEENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT

 

This Thirteenth
Amendment to Loan and Security Agreement (this “Amendment”), dated as of May 29, 2015, is between BANK
OF AMERICA, N.A., a national banking association (“Lender”) and LAPOLLA INDUSTRIES, INC., a Delaware corporation
(“Borrower”).

 

RECITALS

 

A. Lender and Borrower are parties to
that certain Loan and Security Agreement, dated as of August 31, 2010 (as amended by: (i) that certain First Amendment to Loan
and Security Agreement, dated as of August 31, 2010; (ii) that certain Second Amendment to Loan and Security Agreement, dated as
of March 14, 2011; (iii) that certain Third Amendment to Loan and Security Agreement, dated as of May 11, 2011; (iv) that certain
Fourth Amendment to Loan and Security Agreement, dated as of August 17, 2011; (v) that certain Fifth Amendment to Loan and Security
Agreement, dated as of November 18, 2011; (vi) that certain Sixth Amendment to Loan and Security Agreement, dated as of April 12,
2012; (vii) that certain Seventh Amendment to Loan and Security Agreement, dated as of June 29, 2012; (viii) Eighth Amendment to
Loan and Security Agreement, dated as of November 15, 2012; (ix) that certain Ninth Amendment to Loan and Security Agreement, dated
as of March 31, 2013; (x) that certain Tenth Amendment to Loan and Security Agreement, dated as of December 10, 2013; (xi) that
certain Eleventh Amendment to Loan and Security Agreement, effective as of August 31, 2014; and (xii) that certain Twelfth Amendment
to Loan and Security Agreement, effective as of January 23, 2015, the “Loan Agreement”).

 

B. Lender and Borrower
desire to amend the Loan Agreement as herein set forth.

 

NOW, THEREFORE, in consideration
of the premises herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto hereby agree as follows:

 

ARTICLE I

Definitions

 

Section 1.1Definitions.
Capitalized terms used in this Amendment, to the extent not otherwise defined herein, shall have the same definitions assigned
to such terms in the Loan Agreement, as amended hereby.

 

ARTICLE II

Amendments to the Loan Agreement

 

SSection 2.1Amendments to Section
1.1. Section 1.1 of the Loan Agreement is hereby amended by deleting the definition of “Revolver Termination Date”
in its entirety and replacing it as follows:

 

“Revolver Termination
Date: the earliest to occur of (a) March 31, 2019, (b) 90 days prior to the maturity date of the New Subordinated Term Debt,
and (c) 90 days prior to the maturity date of the indebtedness evidenced and governed by any ‘Junior Note,’ as such
term is defined in that certain Subordination Agreement, dated as of April 16, 2012, by and among Borrower, Richard J. Kurtz, and
Lender, as such Subordination Agreement has been amended, restated, supplemented, or modified from time to time.”

 

ARTICLE III

Conditions Precedent

 

Section 3.1Conditions
Precedent. The effectiveness of this Amendment is subject to the satisfaction of the following conditions precedent, unless
specifically waived in writing by Lender:

 

(a)The representations
and warranties contained herein and in all other Loan Documents shall be true and correct as of the date hereof as if made on the
date hereof;

 

    	 

    	 

    

 

(b)No Default
or Event of Default shall have occurred and be continuing;

 

(c)Lender
and Borrower shall have executed this Amendment;

 

(d)Lender
shall have received a fee from Borrower in the amount of $32,500 (25 basis points times the Revolver Commitment)
for the amendments set forth herein, which fee shall be deposited by Borrower via wire transfer in immediately available funds
denominated in Dollars in a US Dominion Account;

 

(e)Each of
Lender, Borrower, and Richard J. Kurtz shall have executed a second amendment to the subordination agreement by and among Lender,
Borrower, and Richard J. Kurtz, in form and substance satisfactory to Lender in its sole discretion;

 

(f)All corporate
proceedings taken in connection with the transactions contemplated by this Amendment shall be reasonably satisfactory to Lender
and its legal counsel; and

 

(g)Lender
shall have received reimbursement for its legal fees and expenses as described in Section 5.3 hereof.

 

ARTICLE IV

Ratifications, Representations, and Warranties

 

Section 4.1Ratifications
by Borrower. The terms and provisions set forth in this Amendment shall modify and supersede all inconsistent terms and provisions
set forth in the Loan Agreement and, except as expressly modified and superseded by this Amendment, the terms and provisions of
the Loan Agreement are ratified and confirmed and shall continue in full force and effect. The Loan Agreement as amended by this
Amendment shall continue to be legal, valid, binding and enforceable in accordance with its terms.

 

Section 4.2Renewal
and Extension of Security Interests and Liens. Borrower hereby (i) renews and affirms the liens and security interests
created and granted in the Loan Documents, and (ii) agrees that this Amendment shall in no manner affect or impair the liens
and security interests securing the Obligations, and that such liens and security interests shall not in any manner be waived,
the purposes of this Amendment being to modify the Loan Agreement as herein provided, and to carry forward all liens and security
interest securing same, which are acknowledged by Borrower to be valid and subsisting.

 

Section 4.3Representations
and Warranties. Borrower represents and warrants to Lender that (i) the execution, delivery and performance of this Amendment
and any and all Loan Documents executed and/or delivered in connection herewith have been authorized by all requisite corporate
action on the part of Borrower and will not violate the articles or bylaws of Borrower or any agreement to which Borrower is a
party, including, without limitation, any documents or agreements evidencing or related to the New Subordinated Term Debt; (ii)
the representations and warranties contained in the Loan Agreement as amended hereby and in each of the other Loan Documents are
true and correct on and as of the date hereof as though made on and as of the date hereof; (iii) no Default or Event of Default
under the Loan Agreement has occurred and is continuing; (iv) no default or event of default has occurred and is continuing in
respect of the New Subordinated Term Debt; and (v) Borrower is in full compliance with all covenants and agreements contained
in the Loan Agreement, as amended hereby.

 

ARTICLE V

Miscellaneous

 

Section 5.1Survival
of Representations and Warranties. All representations and warranties made in the Loan Agreement or any other Loan Document,
including without limitation, any Loan Document furnished in connection with this Amendment, shall survive the execution and delivery
of this Amendment and the other Loan Documents, and no investigation by Lender or any closing shall affect such representations
and warranties or the right of Lender to rely thereon.

 

    	 

    	 

    
 

Section 5.2Reference
to Loan Agreement. Each of the Loan Documents and the Loan Agreement and any and all other agreements, documents or instruments
now or hereafter executed and delivered pursuant to the terms hereof or pursuant to the terms of the Loan Agreement as amended
hereby, are hereby amended so that any reference in such Loan Documents to the Loan Agreement shall mean a reference to the Loan
Agreement as amended hereby.

 

Section 5.3Expenses
of Lender. Borrower agrees to pay on demand all reasonable costs and expenses incurred by Lender directly in connection with
the preparation, negotiation and execution of this Amendment and the other Loan Documents executed pursuant hereto and any and
all amendments, modifications, and supplements thereto, including, without limitation, the costs and fees of Lender’s legal
counsel, and all costs and expenses incurred by Lender in connection with the enforcement or preservation of any rights under the
Loan Agreement, as amended hereby, or any other Loan Document, including, without limitation, the reasonable costs and fees of
Lender's legal counsel.

 

Section 5.4Severability.
Any provision of this Amendment held by a court of competent jurisdiction to be invalid or unenforceable shall not impair or invalidate
the remainder of this Amendment and the effect thereof shall be confined to the provision so held to be invalid or unenforceable.

 

Section 5.5APPLICABLE
LAW. THIS AMENDMENT SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE PERFORMABLE IN AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES (BUT GIVING EFFECT TO FEDERAL LAWS
RELATING TO NATIONAL BANKS).

 

Section 5.6Release
of Claims. To induce Lender to enter into this Amendment, Borrower voluntarily, knowingly, and unconditionally releases, acquits,
and forever discharges Lender and its prior, current, or future officers, directors, agents, employees, successors, and assigns
(collectively, the “Released Parties”), from any and all liabilities, claims, demands, damages, expenses, actions,
or causes of action of any kind or nature (if there be any), owned by, through, or under Borrower, whether absolute or contingent,
disputed or undisputed, at law or in equity, or known or unknown, that such Person now has or ever had against any of the Released
Parties arising under or in connection with any of the Loan Documents or otherwise, including, without limitation, any such liabilities,
claims, demands, damages, expenses, actions, or causes of action arising out of or relating to a claim of breach of contract, fraud,
lender liability or misconduct, breach of fiduciary duty, usury, unfair bargaining position, unconscionably, violation of law,
negligence, error or omission in accounting or calculations, misappropriation of funds, tortious conduct or reckless or willful
misconduct. Borrower represents and warrants to Lender that it has not transferred or assigned to any Person any claim that it
ever had or claimed to have against Lender.

 

Section 5.7Waiver
of Jury Trial. To the fullest extent permitted by applicable law, the parties hereto each hereby waives the right to trial
by jury in any action, suit, counterclaim, or proceeding arising out of or related to this Amendment.

 

Section 5.8Successors
and Assigns. This Amendment is binding upon and shall inure to the benefit of the parties hereto and their respective successors,
assigns, heirs, executors, and legal representatives, except that none of the parties hereto other than Lender may assign or transfer
any of its rights or obligations hereunder without the prior written consent of Lender.

 

Section 5.9Counterparts.
This Amendment may be executed in one or more counterparts, each of which when so executed shall be deemed to be an original, but
all of which when taken together shall constitute one and the same instrument. A facsimile or digital copy of this Amendment shall
be deemed to be an original thereof.

 

Section 5.10Effect
of Waiver. No consent or waiver, express or implied, by Lender to or for any breach of or deviation from any covenant, condition
or duty by Borrower, shall be deemed a consent to or waiver of any other breach of the same or any other covenant, condition or
duty.

 

Section 5.11Headings.
The headings, captions, and arrangements used in this Amendment are for convenience only and shall not affect the interpretation
of this Amendment.

 

    	 

    	 

    

 

Section 5.12Conflicting
Provisions. If any provision of the Loan Agreement as amended hereby conflicts with any provision of any other Loan Document,
the provision in the Loan Agreement shall control.

 

Section 5.13ENTIRE
AGREEMENT. THIS AMENDMENT, THE LOAN AGREEMENT AND ALL OTHER LOAN DOCUMENTS EXECUTED AND DELIVERED IN CONNECTION WITH AND PURSUANT
TO THIS AMENDMENT AND THE LOAN AGREEMENT REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

[Remainder of page blank; signature page
follows.]

 

    	 

    	 

    

EXECUTED as of the date
first written above.

 

BANK OF AMERICA, N.A.

 

 

By:  /s/ H. Michael Wills, SVP

H. Michael Wills, Senior Vice President

 

 

LAPOLLA INDUSTRIES, INC.

 

 

By:  /s/ Douglas J. Kramer, CEO

Douglas Kramer, CEOExhibit 10.18

 

SUBORDINATION AGREEMENT

 

THIS SUBORDINATION AGREEMENT
(as hereafter amended, restated or otherwise modified from time to time, the “Agreement”) is entered into effective
as of April 16, 2012 (the “Effective Date”), by and among LAPOLLA
INDUSTRIES, INC., a Delaware corporation (together with its successors and assigns, “Borrower”), RICHARD
J. KURTZ (“Junior Creditor”), and BANK OF AMERICA, N.A., a national banking association (together with its successors
and assigns, “Senior Creditor”). Terms defined in Section 1, where used in the Recitals below and
elsewhere in this Agreement, shall have the same meanings, where so used, as are prescribed therein.

 

RECITALS

 

Borrower is obligated to
Senior Creditor for payment and performance of the Senior Debt and has granted the Senior Liens to secure the Senior Debt. Borrower
is obligated to Junior Creditor for payment and performance of the Junior Debt. Borrower has requested Senior Creditor to agree
to certain amendments to the Senior Credit Agreement, and in connection therewith, Borrower and Junior Creditor have proposed that
Borrower’s obligations in respect of the Junior Obligations be subordinated to the Senior Debt, as provided by this Agreement.
Senior Creditor is willing to agree to such subordination, subject to and conditioned upon execution and delivery by Junior Creditor,
Senior Creditor and Borrower of this Agreement.

 

AGREEMENT

 

NOW, THEREFORE, for value
received, the receipt and sufficiency of which hereby are acknowledged by each of the undersigned, each of the parties hereto hereby
agrees as follows:

 

1.Definitions.
Terms listed in this Section 1 shall have the following meanings wherever used in this Agreement. Any pronoun shall include
the corresponding masculine, feminine or neuter form as the context may require.

 

“Bankruptcy
Code” means the Bankruptcy Reform Act of 1978, as amended and from time to time in effect (11 U.S.C. §§ 101,
et seq).

 

“Business
Day” means any day that is not Saturday, Sunday, or a day on which banks in Dallas County, Texas are required or permitted
under applicable law to be closed.

 

“Commitments”
means, collectively, the commitment of the “Lenders’ (as defined by the Senior Credit Agreement) to extend credit pursuant
to the Senior Credit Agreement.

 

“Effective
Date” has the meaning prescribed for such term in the introductory paragraph of this Agreement.

 

“Junior
Creditor” has the meaning prescribed for such term in the preamble paragraph of this Agreement.

 

“Junior
Note” means the certain promissory note dated as of April 16, 2012, executed and delivered by Borrower in favor of Junior
Creditor, as modified, amended or restated from time to time.

 

“Junior
Obligations” means all principal, accrued interest (including, without limitation, any interest accruing thereon after
the commencement of any Proceeding and any interest that would have accrued thereon but for the commencement of such Proceeding),
costs, fees and expenses and any and all other obligations for the payment of money now or hereafter owed by the Borrower under
or in connection with the Junior Note, in each such case as may be renewed, refinanced, or increased from time to time.

 

“Lien”
means an interest in property securing an obligation, whether pursuant to contract, statute or common law, including a security
interest, lien, pledge, collateral assignment or otherwise.

 

    	 

    	 

    

“Paid
in Full” means, with respect to indebtedness, payment of such indebtedness in full in cash.

 

“Person”
means any individual, sole proprietorship, partnership, limited liability company, joint venture, trust, unincorporated organization,
association, corporation, governmental authority, or other entity.

 

“Plan”
means any plan of partial or complete liquidation, reorganization, readjustment, arrangement, composition or extension, whether
in a Proceeding or otherwise.

 

“Proceeding”
means any (a) insolvency, bankruptcy, receivership, liquidation, reorganization, readjustment, composition or other similar proceeding
against Borrower or its property, (b) proceeding for any liquidation, dissolution or other winding-up of Borrower, voluntary or
involuntary, (c) assignment for the benefit of creditors of Borrower or (d) marshaling of the assets of Borrower.

 

“Senior
Collateral” means all property of Borrower, now owned or hereafter acquired, which at any time are subject to Senior
Liens, and includes, without limitation, all of the following types of property, now owned and hereafter acquired by Borrower:
inventory, equipment, furniture and fixtures, accounts, chattel paper, contract rights, documents, instruments, money, general
intangibles, investment property, and all other goods, merchandise or personal property, and all books, records, files (whether
in tangible or electronic data entry form), and all proceeds of any of the foregoing.

 

“Senior
Credit Agreement” means the certain Loan and Security Agreement dated as of August 31, 2010, among Borrower and Senior
Creditor, as amended by the First Amendment to Loan and Security Agreement dated as of November 10, 2010, the Second Amendment
to Loan and Security Agreement dated as of March 14, 2011, the Third Amendment to Loan and Security Agreement dated as of
May 11, 2011, the Fourth Amendment to Loan and Security Agreement dated as of August 17, 2011 the Fifth Amendment to Loan
and Security Agreement dated as of November 21, 2011, the Sixth Amendment to Loan and Security Agreement dated as of April 16,
2012, and as may be further modified, amended, renewed, extended, restated, supplemented or otherwise modified from time to time.

 

“Senior
Creditor” has the meaning prescribed for such term in the preamble paragraph of this Agreement.

 

“Senior
Debt” means any and all of the following, now or hereafter existing or arising: (a) all obligations of Borrower
for repayment of principal of and accrued interest on the Senior Loans (including, without limitation, any interest accruing thereon
at the legal rate after the commencement of any Proceeding and any additional interest that would have accrued thereon but for
the commencement of such Proceeding), (b) all other indebtedness, obligations and liabilities of Borrower to Senior Creditor under
the Senior Credit Agreement or the other Senior Debt Documents, whether now existing or hereafter incurred or created (including,
without limitation, claims for indemnity or damages thereunder), (c) all indebtedness and obligations arising in connection with
any refinancings, replacements or increases of any of the foregoing with Senior Creditor, and whether in the same, lesser or greater
amount, and (d) any and all renewals, extensions, increases or rearrangements of any of the foregoing. Without limiting the extent
and generality of the foregoing, “Senior Debt” includes all indebtedness and obligations from time to time included
within the “Obligations” as defined by the Senior Credit Agreement (which definition is incorporated herein by reference),
as may be renewed, refinanced, or increased from time to time.

 

“Senior
Debt Documents” means the Senior Credit Agreement and the other “Loan Documents” defined therein (which definition
is incorporated herein by reference), and any agreements, instruments or documents executed or entered between Borrower and Senior
Creditor during a Proceeding.

 

“Senior
Default” means any “Default” as defined by the Senior Credit Agreement (which definition is incorporated
herein by reference) or any default (howsoever defined) under any replacement or refinancing facility constituting Senior Debt.

 

    	 

    	 

    

“Senior
Event of Default” means any “Event of Default” as defined by the Senior Credit Agreement (which definition
is incorporated herein by reference) or any event of default (howsoever defined) under any replacement or refinancing facility
constituting Senior Debt.

 

“Senior
Liens” means any and all Liens at any time held by Senior Creditor in any property of Borrower that secures the Senior
Debt.

 

“Senior
Loans” means all “Loans” as defined by the Senior Credit Agreement (which definition is incorporated herein
by reference), outstanding from time to time.

 

2.Junior Obligations
Subordination. Until all Senior Debt has first been Paid in Full and the Commitments terminated, Junior Creditor agrees that
the Junior Obligations hereby are expressly subordinated and junior in right of payment and claim to the prior payment of all Senior
Debt.

 

(a)No payments
of any kind (whether principal, accrued interest or otherwise) may be made on account of the Junior Obligations, or demanded, received
or retained by Junior Creditor on account of the Junior Obligations, except in the manner and to the extent expressly allowed by
Section 2(c).

 

(b)In the event of any Proceeding, all Senior Debt shall first be Paid in Full and the Commitments terminated before any
payment or distribution, whether in cash, securities or other property, shall be made to any holder of any Junior Obligations on
account of such Junior Obligations. Any payment or distribution of any kind or character, whether in cash, securities or other
property, which would otherwise (but for these subordination provisions) be payable or deliverable in respect of any Junior Obligations
shall be paid or delivered directly to the Senior Creditor for application in payment of the Senior Debt until all Senior Debt
shall have been Paid in Full and the Commitments terminated.

 

(c)Subject
to Section 2(a) and Section 2(b) and the proviso following, after the Term Loan has been Paid in Full, Borrower may
pay, and Junior Creditor may take, receive and retain, payments on account of the Junior Obligations, provided, that (i)
after the Effective Date and prior to making any such payment, Borrower has received cash proceeds from capital contributions or
Subordinated Debt, or a combination thereof, in each case in form and substance satisfactory to Lender, in an aggregate amount
of $10,000,000 and (ii) at the time of and after giving effect to any such payment, (A) no Senior Default or Senior Event of Default
has occurred and continues to exist.

 

3.Lien Priority.
The Senior Liens and all rights of Senior Creditor in and to the Senior Collateral are and shall be first, senior and prior to
any Liens at any time claimed by Junior Creditor in any property of Borrower. Junior Creditor disclaims any Liens in any property
of Borrower. Borrower and Junior Creditor each agrees that Borrower will not grant to Junior Creditor, and Junior Creditor will
not take or claim from Borrower, any Lien in any property of Borrower as security for the Junior Obligations. Without limiting
the foregoing, Junior Creditor hereby expressly subordinates to the Senior Liens any and all right, title and interest, if any,
which it now or may hereafter have or acquire in and to any Senior Collateral. The priorities agreed to and established by this
Section 3 are applicable irrespective of the manner or order of creation, attachment or perfection, the time or order of
filing of any financing statement or the time of giving or failure to give any notice, or of any other priority that might otherwise
exist under applicable law exclusive or independent of this Agreement.

 

4.Limitation on
Actions, Remedies. Junior Creditor agrees that:

 

(a)Until
all Senior Debt is Paid in Full and the Commitments are terminated it will not, without the prior written consent of Senior Creditor
(i) at any time commence, prosecute or participate in any administrative, legal or equitable action against Borrower to collect
or enforce any Junior Obligations, (ii) at any time commence, prosecute, or participate in commencing or prosecuting, any Proceeding
or (iii) at any time take any action to enforce any Lien securing the Junior Obligations or exercise any remedies against
or in respect of any property of Borrower securing the Junior Obligations.

 

    	 

    	 

    

 

(b)If, in
violation of the provisions of this Agreement, Junior Creditor shall commence, prosecute or participate in any suit, action, case
or Proceeding, Borrower may interpose as a defense or plea the provisions set forth herein, and Senior Creditor may intervene and
interpose such defense or plea in its own name or in the name of Borrower and shall, in any event, be entitled to restrain the
enforcement of the payment provisions of the Junior Obligations, or of remedies in respect of property of Borrower, in its own
name or in the name of Borrower, in the same suit, action, case or Proceeding or in any independent suit, action, case or Proceeding,
to the extent any such enforcement would be in violation of this Agreement.

 

(c)Notwithstanding
the foregoing, Junior Creditor may (i) file a proof of claim in respect of the Junior Obligations in any Proceeding, and (ii) file
suit on the Junior Obligations at any time during the period of fifteen days prior to the applicable date as necessary to toll
any applicable statute of limitations, provided, that Junior Creditor shall not prosecute such suit unless otherwise allowed
by Section 4(a).

 

5.Reserved.

 

6.Turnover of Improper
Payments. If any payment or distribution of any character, whether in cash, securities or other property shall be received
by Junior Creditor in respect of the Junior Obligations in contravention of any of the terms of this Agreement, such payment or
distribution or security shall be received in trust for the benefit of, and shall be paid over or delivered and transferred to,
Senior Creditor for application to the payment of the Senior Debt to the extent necessary to pay all Senior Debt in full.

 

7.Proceedings.
The provisions of this Agreement are intended to and shall be enforceable at all times, notwithstanding the commencement or continuation
of any Proceeding.

 

(a)In the event of
any Proceeding:

 

(i)All Senior
Debt shall first be Paid in Full and the Commitments terminated before any payment or distribution, whether in cash, securities
or other property, shall be made to any holder of any Junior Obligations on account of such Junior Obligations.

 

(ii)Any payment
or distribution of any kind or character, whether in cash, securities or other property, which would otherwise (but for these subordination
provisions) be payable or deliverable in respect of any Junior Obligations shall be paid or delivered directly to the Senior Creditor
for application in payment of the Senior Debt until all Senior Debt shall have been Paid in Full and the Commitments terminated.

 

(iii)Subject
to the terms of this Agreement, Junior Creditor shall retain the right to vote and otherwise act in any Proceeding (including,
without limitation, the right to vote to accept or reject any Plan proposed in any Proceeding), provided, that Junior Creditor
shall not vote with respect to any such Plan or take any other action in any way so as to contest (i) the validity or enforceability
of the Senior Debt or the Senior Liens, (ii) the rights and duties of Senior Creditor under the Senior Debt Documents or (iii)
the enforceability of any Senior Debt Document or this Agreement.

 

(b)Junior Creditor
agrees that it will not object to or contest, or support any other Person in objecting to or contesting, the validity, extent,
perfection, priority or enforceability of the Senior Liens or any claim of Senior Creditor, or file any pleadings or motions or
take any position in any proceeding in contravention of this Agreement

 

(c)In
any Proceeding,

 

(i)If Senior
Creditor consents to the use of cash collateral or the sale or use of any Senior Collateral, or agrees to provide post petition
financing to Borrower, Junior Creditor agrees that it shall be deemed to have consented to, and will not raise any objection to
nor support any other Person in objecting to, any such use, sale or post-petition financing and, in such event, Junior Creditor
will subordinate, and shall be deemed to have subordinated, any Liens of Junior Creditor to any adequate protection provided to
Senior Creditor and any “carve-out” for reasonable professional and United States Trustee fees agreed to by Senior
Creditor.

    	 

    	 

    

 

(ii)Junior
Creditor agrees that it will not seek relief from the automatic stay or any other stay in respect of any property included in the
Senior Collateral, without the prior written consent of Senior Creditor.

 

(iii)Junior
Creditor agrees that it will not object to or contest, or support any other Person in objecting to or contesting, any request by
Senior Creditor for adequate protection or any objection by Senior Creditor to any motion, relief, action or proceeding by Borrower
based on a claim of lack of adequate protection, or the payment of interest, reasonable fees and expenses to Senior Creditor under
Section 506(b) or Section 506(c) of the Bankruptcy Code. Unless otherwise agreed by Senior Creditor, Junior Creditor may seek,
support, accept or retain adequate protection only if Senior Creditor is granted similar and like adequate protection and any Lien
or super priority claim granted to Junior Creditor in connection therewith is subordinated to the Liens or super priority claims
of Senior Creditor on the same basis as the other Liens securing the Junior Obligations are subordinated in favor of Senior Creditor
under this Agreement. In the event Junior Creditor receives adequate protection, Junior Creditor agrees that any Lien granted to
Junior Creditor in connection therewith shall be subordinated to the Liens securing the Senior Debt on the same terms that the
other Liens securing the Junior Obligations are subordinated in favor of Senior Creditor under this Agreement.

 

(iv)If
Senior Creditor is required to disgorge, turn over or otherwise pay money or property to the estate of Borrower as a result of
a claim of avoidance based upon an alleged preferential or fraudulent transfer (any such disgorgement, turnover or payment, a “Recovery”),
then the Senior Debt and the Senior Liens shall be reinstated to the extent of such Recovery and deemed to be outstanding as if
such Recovery had not occurred. If this Agreement shall have been terminated prior to such Recovery, then this Agreement shall
be reinstated in full force and effect, and such prior termination shall not diminish, release, discharge, impair or otherwise
affect the priorities and obligations established by this Agreement. Junior Creditor agrees that, prior to the time that the Senior
Debt shall be Paid in Full and the Commitment terminated, it shall not be entitled to benefit from any Recovery relating to any
distribution or allocation that was made in accordance with this Agreement, it being understood and agreed that the benefit of
such Recovery shall be allocated and turned over to Senior Creditor for application in accordance with the priorities set forth
in this Agreement.

 

(v)Junior
Creditor will not oppose any sale or disposition of any assets of Borrower that is supported by Senior Creditor and Junior Creditor
will be deemed to have consented under Section 363 of the Bankruptcy Code, and otherwise, to any such sale or disposition supported
by Senior Creditor.

 

(vi)Junior
Creditor acknowledges and agrees that the Junior Obligations are separate, distinct and fundamentally different from the Senior
Debt and the liens securing the Senior Debt and shall be separately classified in any plan of reorganization proposed or adopted
in an Insolvency Proceeding.

 

(vii)This
Agreement is a “subordination agreement” under Section 510(a) of the Bankruptcy Code, and shall be effective before,
during and after the commencement of Proceeding.

 

8.No Impairment.
Except as expressly stated otherwise in this Agreement, the rights of Senior Creditor and the rights and obligations of Junior
Creditor, in each case as provided by the terms of this Agreement, shall remain in full force and effect without regard to, and
shall not be impaired by any circumstance, including without limitation, (i) any act or failure to act on the part of an Borrower,
(ii) any extension or indulgence in respect of any payment or prepayment of any Senior Debt or any part thereof or in respect of
any other amount payable to any holder of any Senior Debt, (iii) any amendment, modification, increase, refinancing or waiver of,
or addition or supplement to, or deletion from, or compromise, release, consent or other action in respect of, any of the terms
of any Senior Debt, any Senior Debt Document or any other agreement which may be made relating to any Senior Debt, (iv) any exercise
or non-exercise by Senior Creditor of any right, power, privilege or remedy under the Senior Debt Documents, or any waiver of thereof,
(v) any release by Senior Creditor of any security for the payment of the Senior Debt, (vi) any merger or consolidation of Borrower
into or with any other Person, or any sale, lease or transfer of any or all of the assets of Borrower to any other Person, (vii)
consent to any use of cash collateral by, or to the extension of credit to Borrower in, any Proceeding, or (viii) absence of any
notice to, or knowledge by, Junior Creditor of the existence or occurrence of any of the matters or events set forth in the foregoing
clauses (i) through (vii) preceding. Junior Creditor unconditionally waives notice of any of the matters referred
to in this Section 8.

    	 

    	 

    

 

9.Subrogation.
Junior Creditor hereby waives all rights of subrogation, if any, in respect of the Senior Debt and the Senior Liens until such
time as all Senior Debt has been Paid in Full and the Commitments terminated and all other obligations of Borrower under the Senior
Debt Documents shall have been duly performed.

 

10.Modifications
to Senior Debt or Junior Obligations. The Senior Debt Documents may be modified, amended, supplemented, restated or replaced,
and any indebtedness or obligations thereunder may be renewed, extended, increased, rearranged or refinanced with the Senior Creditor
without the prior consent of Junior Creditor. The Junior Obligations may not be modified or amended to (a) increase the interest
rate under the Junior Note, (b) shorten the principal amortization or the maturity under the Junior Note, (c) increase the principal
under the Junior Note or add any other additional payment obligations, without the prior consent of Senior Creditor.

 

11.Continued Effectiveness
of this Agreement. The provisions of this Agreement are intended to and shall be enforceable at all times, notwithstanding
the commencement or continuation of any Proceeding.

 

12.No Contest.
Junior Creditor agrees that it will not at any time contest the validity, perfection, priority or enforceability of the Senior
Debt, the Senior Debt Documents or the Senior Liens.

 

13.Representations
and Warranties.

 

(a)Junior
Creditor represents and warrants to Senior Creditor as follows: (i) Junior Creditor has the requisite power and authority
to enter into, execute, deliver and carry out the terms of this Agreement, all of which have been duly authorized by all proper
and necessary action and are not prohibited by its organizational documents, (ii) this Agreement, when executed and delivered,
will constitute the valid and legally binding obligation of Creditor, enforceable in accordance with its terms, except as enforceability
may be limited by the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors’
rights generally, and principles of equity, and (iii) Junior Creditor is the sole owner, beneficially and of record, of the
Junior Obligations.

 

(b)Borrower
represents and warrants to Senior Creditor and Junior Creditor as follows: (i) Borrower has the requisite power and authority to
enter into, execute, deliver and carry out the terms of this Agreement, all of which have been duly authorized by all proper and
necessary action and are not prohibited by its organizational documents, (ii) this Agreement, when executed and delivered, will
constitute the valid and legally binding obligation of it enforceable in accordance with its terms, except as enforceability may
be limited by the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights
generally, and principles of equity, (iii) Borrower is not in default or breach of the Junior Obligations and (iv) no Senior Default
or Senior Event of Default is in existence.

 

14.Cumulative Rights,
No Waivers. Each right of Senior Creditor under this Agreement shall be cumulative and in addition to any other right of Senior
Creditor against Borrower or Junior Creditor under applicable law. Any failure or delay on the part of Senior Creditor in exercising
any such right shall not operate as a waiver thereof or impair the rights of Senior Creditor thereafter to exercise same.

 

15.Modification.
No waiver or consent with respect to any provision of this Agreement shall be effective unless in writing and signed by Senior
Creditor and Junior Creditor, and then such waiver or consent shall be effective only in the specific instance and for the specific
purpose given. Neither this Agreement, nor any provision hereof, may be amended or modified except pursuant to an agreement in
writing entered into by Senior Creditor, Junior Creditor and Borrower. Any notice to or demand on Junior Creditor which is specifically
required by this Agreement shall not entitle Junior Creditor to any other or further notice or demand in the same, similar or other
circumstances unless specifically required by this Agreement.

 

16.Notices.
All notices, demands and requests that any party is required to give to any other party pursuant to this Agreement shall be in
writing and shall become effective (a) upon personal delivery, (b) three (3) days after it shall have been mailed by
United States mail, first class, certified or registered, with postage prepaid, or (c) when properly transmitted by telecopy,
in each case addressed to the party to be notified as follows (and, in the case of each such notice described in clauses (a),
(b) and (c) preceding, also by email sent at our about the time of sending such notice, addressed to the email to
the party to be notified as follows):

    	 

    	 

    

 

(a)If to Junior Creditor:

 

Richard J. Kurtz

270 Sylvan Road

Englewood Cliffs,
New Jersey 07632

 

(b)If to Borrower:

 

Lapolla Industries,
Inc.

15402 Vantage Parkway
East

Suite 322

Houston, Texas 
77032

Attention: Michael
T. Adams, Executive Vice President

 

(c)If to Senior Creditor:

 

Bank of America,
N.A.

901 Main Street,
11th Floor

Dallas, Texas
75202

TX1-492-11-23

Attention: H.
Michael Wills, Senior Vice President

 

with copies
(which shall not constitute notice) to:

 

Hunton &
Williams LLP

1445 Ross Avenue,
Suite 3700

Dallas, Texas
75202

Fax No.: (214)
880-0011

Attention: Daniel
C. Garner

 

or in any case, to such other
address as the party addressed shall have previously designated by written notice to the serving party, given in accordance with
this Section 16. All such notices and correspondence shall be deemed given (a) if sent by certified or registered mail,
three (3) Business Days after being postmarked, (b) if sent by overnight delivery service, when received at the above stated addresses
and (c) if sent by facsimile transmission, when receipt of such transmission is acknowledged.

 

17.Severability.
In case any provision in or obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

 

18.Assignment of
Junior Obligations. The Junior Obligations may not be transferred or assigned to any Person unless such transferee or assignee
agrees in writing to be bound by this Agreement as if it were the Junior Creditor hereunder.

 

19.Successors and
Assigns. This Agreement shall inure to the benefit of the successors and assigns of Senior Creditor and Junior Creditor and
shall be binding upon the successors and assigns of Senior Creditor, Junior Creditor and Borrower. Any assignee of the Junior Obligations
shall be deemed bound by the provisions of this Agreement applicable to Junior Creditor.

 

20.Counterparts.
This Agreement may be executed in any number of counterparts and by the different parties hereto in separate counterparts, each
of which when so executed and delivered shall be valid as an original.

    	 

    	 

    

 

 

21.Defines Rights
of Creditors. The provisions of this Agreement are solely for the purpose of defining the relative rights of Senior Creditor,
on the one hand, and Junior Creditor, on the other hand, and shall not be deemed to create any rights or priorities in favor of
any other Person, including, without limitation, Borrower or any debtor-in-possession or trustee in bankruptcy in any Proceeding.

 

22.Termination.
This Agreement shall terminate when the Senior Debt is Paid in Full, or, if earlier, upon payment in full of the Junior Obligations.

 

23. JURY TRIAL.
EACH PARTY HERETO HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTIONS
RELATED HERETO.

 

24.GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS.

 

25.Execution; Entire
Agreement. A telecopy or other electronic transmission of any executed counterpart of this Agreement shall be deemed valid
as an original.

 

THIS WRITTEN AGREEMENT
REPRESENTS THE FINAL AGREEMENT AMONG THE PARTIES REGARDING THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES.

 

 

Signature Pages Follow

Remainder of This
Page Blank

 

 

    	 

    	 

    

IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed as of the date first written above.

 

 

SENIOR CREDITOR

 

BANK OF AMERICA,
N.A.

 

 

By: /s/
H. Michael Wills, SVP

Name:H. Michael
Wills

Title:Senior
Vice President

 

 

JUNIOR CREDITOR

 

RICHARD J. KURTZ

 

 

By: /s/
Richard J. Kurtz

 

 

BORROWER

 

LAPOLLA INDUSTRIES,
INC.

 

 

By: /s/
Michael T. Adams, EVP

Name:Michael
T. Adams

Title:Executive
Vice President

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