First Amendment to Loan and Security Agreement between Lapolla and Bank of America dated November 10, 2010 and effective August 31, 2010

---

THIS FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT (the "Amendment"), dated as of November 10, 2010, and effective August 31, 2010, is between LAPOLLA INDUSTRIES, INC. ("Borrower") and BANK OF AMERICA, N.A., a national banking association ("Lender").

 

RECITALS:

Borrower and Lender have entered into that certain Loan and Security Agreement dated as of August 31, 2010 (as the same may hereafter be amended or otherwise modified, the "Agreement").

 

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 agree as follows effective as of the date hereof unless otherwise indicated:

 

ARTICLE 1.

 

 

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

 

ARTICLE 2.

 

 

Section 2.1.            Amendment to Section 11.1.  Clause (m) of Section 11.1 is amended in its entirety to read as follows:

 

(m)           A Change of Control occurs.

 

ARTICLE 3.

 

 

Section 3.1.            Ratifications.  The terms and provisions set forth in this Amendment shall modify and supersede all inconsistent terms and provisions set forth in the Agreement and except as expressly modified and superseded by this Amendment, the terms and provisions of the Agreement and the other Loan Documents are ratified and confirmed and shall continue in full force and effect.  Borrower and Lender agree that the Agreement as amended hereby and the other Loan Documents shall continue to be legal, valid, binding and enforceable in accordance with their respective term s.

 

Section 3.2.            Representations and Warranties.  Borrower hereby represents and warrants to Lender as follows:  (a) no Default or Event of Default exists; and (b) the representations and warranties set forth in the Loan Documents are true and correct on and as of the date hereof with the same effect as though made on and as of such date except with respect to any representations and warranties limited by their terms to a specific date.  IN ADDITION, TO INDUCE LENDER TO AGREE TO THE TERMS OF THIS AMENDMENT, EACH OBLIGOR (BY ITS EXECUTION BELOW) REPRESENTS AND WARRANTS THAT AS OF THE DATE OF ITS EXECUTION OF THIS AMENDMENT THERE ARE NO CLAIMS OR OFFSETS AGAINST OR RIGHTS OF RECOUPMENT WITH RESPECT TO OR DEFENSES OR COUNTERCLAIMS TO ITS OBLIGATIONS UNDER THE LOAN DOCUMENTS AND IN ACCORDANCE THEREWITH IT:

 

(a)            WAIVER.  WAIVES ANY AND ALL SUCH CLAIMS, OFFSETS, RIGHTS OF RECOUPMENT, DEFENSES OR COUNTERCLAIMS, WHETHER KNOWN OR UNKNOWN, ARISING PRIOR TO THE DATE OF ITS EXECUTION OF THIS AMENDMENT AND

(b)            RELEASE.  RELEASES AND DISCHARGES LENDER, AND ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, SHAREHOLDERS, AFFILIATES AND ATTORNEYS (COLLECTIVELY THE "RELEASED PARTIES") FROM ANY AND ALL OBLIGATIONS, INDEBTEDNESS, LIABILITIES, CLAIMS, RIGHTS, CAUSES OF ACTION OR DEMANDS WHATSOEVER, WHETHER KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED, IN LAW OR EQUITY, WHICH ANY OBLIGOR EVER HAD, NOW HAS, CLAIMS TO HAVE OR MAY HAVE AGAINST ANY RELEASED PARTY ARISING PRIOR TO THE DATE HEREOF AND FROM OR IN CONNECTION WITH THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPL ATED THEREBY.

 

ARTICLE 4.

 

 

Section 4.1.            Survival of Representations and Warranties.  All representations and warranties made in this Amendment or any other Loan Document including 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 the representations and warranties or the right of Lender to rely upon them.

 

Section 4.2.            Reference to Agreement.  Each of the Loan Documents, including the Agreement is hereby amended so that any reference in such Loan Document to the Agreement shall mean a reference to the Agreement as amended hereby.  This Amendment shall constitute a Loan Document.

 

Section 4.3.            Expenses of Lender.  As provided in the Agreement, Borrower agrees to pay on demand all costs and expenses incurred by Lender in connection with the preparation, negotiation, and execution of this Amendment and the other Loan Documents executed pursuant hereto, including without limitation, the costs and fees of Lender's legal counsel.

 

Section 4.4.            Severability.  Each provision of this Amendment shall be interpreted in such manner as to be valid under Applicable Law.  If any provision is found to be invalid under Applicable Law, it shall be ineffective only to the extent of such invalidity and the remaining provisions of this Amendment shall remain in full force and effect.

 

Section 4.5.            GOVERNING LAW.  THIS AMENDMENT SHALL BE GOVERNED BY 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 4.6.            Successors and Assigns.  This Amendment is binding upon and shall inure to the benefit of Lender and Borrower and their respective successors and assigns, except no Borrower may assign or transfer any of its rights or obligations hereunder without the prior written consent of Lenders.  Any assignment in violation of this Section 4.6 shall be void.

 

Section 4.7.            Counterparts; Facsimile or Electronic Signatures.  This Amendment may be executed in counterparts, each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  This Amendment shall become effective when Lender has received counterparts bearing the signatures of all parties hereto.  Delivery of a signature page of this Amendment by telecopy or other electronic means shall be effective as delivery of a manually executed counterpart of such agreement.

 

Section 4.8.            Headings.  The headings, captions and arrangements used in this Amendment are for convenience only and shall not affect the interpretation of this Amendment.

 

Section 4.9.            Entire Agreement.  Time is of the essence of this Amendment.  This Amendment, the Agreement, the other Loan Documents embody the final, entire agreement among the parties relating to the subject matter hereof and supersede any and all previous commitments, agreements, representations and understandings, whether oral or written, relating to the subject matter hereof and may not be contradicted or varied by evidence of prior, contemporaneous or subsequent oral agreements or discussions of the parties hereto.

Executed as of the date first written above.

 

	BORROWER:
	LAPOLLA INDUSTRIES, INC.
	By:	/s/  Michael T. Adams, Executive Vice President
		Michael T. Adams, Executive Vice President
	LENDER:
	BANK OF AMERICA, N.A.,
	as Lender
	By:	/s/  H. Michael Wills, Senior Vice President
		H. Michael Wills, Senior Vice President

Guarantor Consent

The undersigned Guarantor:  (i) consents and agrees to this Amendment; and (ii) agrees that the Loan Documents to which it is a party shall remain in full force and effect and shall continue to be the legal, valid and binding obligation of Guarantor enforceable against it in accordance with their respective terms.

 

	GUARANTOR:
	By:	/s/  Richard J. Kurtz, Guarantor
		Richard J. Kurtz

 

 

---