EXECUTIVE EMPLOYMENT AGREEMENT

THIS EXECUTIVE EMPLOYMENT AGREEMENT is entered into and effective as of May 18, 2009 (“Effective Date”), by and between LAPOLLA INDUSTRIES, INC., a Delaware Corporation (“Company”) and Michael T. Adams (“Executive”).

WHEREAS, Company acknowledges that Executive has been working for the Company in various capacities since January 1997 and is currently the Chief Governance Officer, Executive Vice President, and Corporate Secretary of the Company; and

WHEREAS, Company wishes to continue Executive’s employment and Executive wishes to accept such continued employment, subject to the terms and conditions hereinafter set forth.

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

1.              EMPLOYMENT TERM .  Company hereby agrees to employ the Executive, and the Executive hereby accepts such employment for a period beginning on the Effective Date and ending December 31, 2011, unless sooner terminated in accordance with Section 6 hereof (“Employment Period”).

2.              POSITION; DUTIES .  During the Employment Period, Executive shall hold the title and position of Chief Governance Officer, Executive Vice President, and Corporate Secretary of the Company and shall have the duties and responsibilities usually vested in such capacities, as determined from time to time by the Chief Executive Officer, Board of Directors and By-laws.

3.              MANNER OF PERFORMANCE .  Executive shall serve the Company with his best efforts and all his skill and ability in the performance of his duties hereunder.  Executive shall carry out his duties in a competent and professional manner, to the reasonable satisfaction of the Chief Executive Officer in his Executive Vice President capacity and Board of Directors in his Chief Governance Officer and Corporate Secretary capacities, shall work with other Executives of the Company and generally promote the best interests of the Company and its stockholders.

4.              COMPENSATION AND RELATED MATTERS .  Executive’s compensation for his services shall be as follows:

4.1            Base Compensation .  During the Employment Period, Executive shall receive an annual base salary ("Annual Base Salary") of $175,000, payable in accordance with the Company’s normal payroll practices. Executive’s Annual Base Salary will be reviewed by the Chief Executive Officer on an annual basis as well as by the Compensation Committee of the Board of Directors and may be increased from time to time, in the discretion of the Compensation Committee.  The term Annual Base Salary as utilized in this Agreement shall refer to Annual Base Salary as adjusted from time to time.

4.2            Bonus .  As determined by the Chief Executive Officer, Executive shall be eligible for bonus consideration as and if bonuses are paid to other Executives on an annual basis.

4.3            Awards .  During the Employment Period, Executive may be entitled to earn awards under equity or other plans or programs that the Company may from time to time, in its discretion, determine to put into effect (“Awards”). The administrator of these plans or programs shall determine the terms, conditions, performance criteria and restrictions of the Awards.

4.4            Transaction Bonus .  During the Employment Period, and provided Executive is still employed by the Company, upon consummation of a Change in Control, in addition to any other payments or benefits applicable thereto under this Agreement, Executive shall be entitled to a Transaction Bonus equal to one and one half percent (1 ½ %) of the “Transaction Value”, which means the total amount of consideration paid in respect of the transaction that resulted in the Change in Control.  Said Transaction Bonus shall be paid at the same time 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.

4.5            Compensation and Benefit Programs . During the term of Executive’s employment hereunder, Executive shall be entitled to participate in the following plans as they may exist from time to time during the term hereof, to wit, any and all medical, dental, hospitalization, accidental death and dismemberment, disability, travel and life insurance plans, and any and all other plans as offered by the Company from time to time to its Executives, including savings, pension, profit-sharing, stock options, and deferred compensation plans, subject to the general eligibility and participation provisions set forth in such plans.

4.6            Vacation Time and Other Benefits .  Executive shall be entitled to three (3) weeks of vacation without loss of compensation each year during the Employment Period.  For the purposes of this Section 4.6, a year shall begin on January 1, 2009.  Vacation will be taken at such times as Executive and the Chief Executive Officer shall mutually determine and provided that no vacation time shall interfere with the duties required to be rendered by Executive hereunder. Notwithstanding the foregoing, as an officer of Company, Executive is expected to utilize his vacation time judiciously and so as not to jeopardize the business of the Company. Unused vacation may not be carried forth to the next calendar year without prior written consent by the Chief Executive Officer, except that no written consent is required for carrying over a maximum of seven (7) days to any subsequent year.

4.7            Expense Reimbursement .  Company shall provide the Executive reasonable reimbursement of out-of-pocket expenses incurred by him in connection with his duties hereunder.  The Company shall reimburse the Executive for all such expenses upon presentation by the Executive, from time-to-time, of appropriately itemized and approved (consistent with Company’s policy) accounts of such expenditures.  Company shall also provide the Executive an automobile allowance, which allowance shall not exceed $750 per month.

4.8            Withholding Taxes .  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.

4.9            Adjustments .  If the outstanding shares of common stock of the Company are increased, decreased or exchanged for a different number or kind of shares or other securities, or if additional shares or new or different shares or other securities are distributed in respect of such shares of common stock (or any stock or securities received with respect to such common stock), through merger, consolidation, sale or exchange of all or substantially all of the properties of the Company, reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split, spin-off or other distribution with respect to such shares of common stock (or any stock or securities received with respect to such common stock), then the number of shares of common stock shall be equitably and appropriately adjusted.  Adjustments under this Section 4.9 will be made by the applicable authority, whose determination as to what adjustments will be made and the extent thereof will be final, binding and conclusive. No fractional interests will be issued from any such adjustments.  Notice of any adjustment shall be given by Company to Executive and shall be final and binding on Executive.

4.10          Prior Awards .  Executive and Company acknowledge that Executive was previously awarded under the Company’s Equity Incentive Plan, as amended, 400,000 stock options pursuant to an option agreement dated July 12, 2005, of which 80,000 stock options were previously vested and are exercisable in accordance with the terms and conditions of the option agreement, and 320,000 stock options were canceled by Executive on July 1, 2008.

5.             NON-COMPETITION; NON-DISCLOSURE; AND RELATED MATTERS .

5.1            Non-Competition .  During the Employment Period and for a period of twenty four (24) months after the termination of Executive’s employment with Company for any reason (collectively the “Restriction Period”), the Executive shall not, either directly or indirectly, for himself or any third party, anywhere within or outside the United States (a) engage in or have any interest in any activity that directly or indirectly competes with the business of the Company or of any of its affiliates (which for purposes hereof shall include all subsidiaries or parent companies of the Company, now or in the future during the Employment Period), as conducted at any time during the Employment Period, including without limitation, accepting employment from or providing consulting services to any such competitor, owning any interest in or being a partner, shareholder or owner of any such competitor, (b) solicit, induce, recruit, or cause another person in the employ of the Company or its affiliates or who is a consultant or independent contractor for the Company or its affiliates to terminate his employment, engagement or other relationship with the Company or its affiliates, or (c) solicit or accept business from any individual or entity which shall have obtained the goods or services of, or purchased goods or services from, the Company or its affiliates during the two (2) year period immediately prior to the end of the Employment Period or which otherwise competes with or engages in a business which is competitive with or similar to the business of the Company or any of its affiliates, (d) call on, solicit or accept any business from any of the actual or targeted prospective customers of the Company or its affiliates (the identity of and information concerning which constitute trade secrets and Confidential Information of the Company) on behalf of any person or entity in connection with any business competitive with the business of the Company, nor shall the Executive 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 duties under this Agreement.

5.2            Non-Disclosure .  The Executive shall not at any time during the term hereof or thereafter divulge, communicate, or use in any way, any Confidential Information (as hereinafter defined) pertaining to the business of the Company and any of its subsidiaries or affiliates. Any Confidential Information or data now or hereafter acquired by the Executive with respect to the business of the Company (which shall include, but not be limited to information concerning the Company’s financial condition, prospects, technology, customers, suppliers, sources of leads and methods of doing business) shall be deemed a valuable, special and unique asset of the Company that is received by the Executive in confidence and as a fiduciary, and Executive shall remain a fiduciary to the Company with respect to all of such information. For purposes of this Agreement, the term “Confidential Information” includes, but is not limited to, information disclosed to the Executive or known by the Executive as a consequence of or through his employment by the Company (including information conceived, originated, discovered or developed by the Executive) prior to or after the date hereof, and not generally known, about the Company or its business. Notwithstanding the foregoing, nothing herein shall be deemed to restrict the Executive from disclosing Confidential Information to the extent required by law provided that prior to disclosing any such information required by law, Executive shall give prior written notice thereof to Company and provide Company with the opportunity to contest the disclosure.  The Executive shall not disclose, without limitation as to time, Confidential Information to any person, firm, Company, association or other entity for any purpose or reason whatsoever, except (i) to authorized representatives of the Company, (ii) during the Employment Period, such information may be disclosed by the Executive as is specifically required by Company in the course of performing his duties for the Company, and (iii) to counsel and other advisers of Company subject to Company’s prior approval and provided that such advisers agree to the confidentiality provisions of this Section 5.2.

5.3            Ownership of Developments .  All copyrights, patents, trade secrets, or other intellectual property rights of a similar nature associated with any ideas, concepts, techniques, inventions, processes or works of authorship developed or created by Executive during the course of performing work for the Company or its customers (collectively, the “Work Product”) shall belong exclusively to the Company and shall, to the extent possible, be considered a work made by the Executive for hire for the Company within the meaning of Title 17 of the United States Code.  To the extent the Work Product may not be considered work made by the Executive for hire for the Company, the Executive agrees to assign, and automatically assign at the time of creation of the Work Product, without any requirement of further consideration, any right, title, or interest the Executive may have in such Work Product.  Upon the request of the Company, the Executive shall take such further actions, including execution and delivery of instruments of conveyance, as may be appropriate to give full and proper effect to such assignment.  All of the foregoing shall also be deemed Confidential Information for the purposes of Section 5.2, above.

5.4            Books and Records . All books, records, and accounts relating in any manner to the Company (i.e., financial information, customer, supplier, vendor identity, etc.), whether prepared by the Executive or otherwise coming into the Executive’s possession, shall be the exclusive property of the Company and shall be returned immediately to the Company on termination of the Executive’s employment hereunder or otherwise on the Company’s request at any time.

5.5            Definition of Company .  Solely for purposes of this Agreement, the term “Company” also shall include any existing or future subsidiaries of the Company that are operating during the time periods described herein and any other entities that directly or indirectly, through one or more intermediaries, control, are controlled by or are under common control with the Company during the periods described herein.

5.6            Acknowledgment by Executive .  The Executive acknowledges and confirms that (i) the restrictive covenants contained in this Section 5 are reasonably necessary to protect the legitimate business interests of the Company, and (ii) the restrictions contained in this Section 5 (including without limitation the geographic area and length of the term of the provisions of this Section 5) are not overbroad, overlong, or unfair and are not the result of overreaching, duress or coercion of any kind. The Executive acknowledges and confirms that his special knowledge of the business of the Company is or will be such as would cause the Company serious injury or loss if he were to use such ability and knowledge to the benefit of a competitor or were to compete with the Company in violation of the terms of this Section 5. The Executive further acknowledges that the restrictions contained in this Section 5 are intended to be, and shall be, for the benefit of and shall be enforceable by, the Company’s successors and assigns and shall be enforced to the fullest extent of the law applicable at the time that Company deems it necessary or advisable to enforce the restrictive covenants and other provisions of this Section 5.

5.7            Injunctive Relief; Damages .  Because of the difficulty of measuring economic losses to the Company as a result of a breach of the foregoing covenants in this Section 5, and because of the immediate and irreparable damage that could be caused to the Company for which it would have no other adequate remedy, the Executive agrees that the foregoing covenants may be enforced by the Company in the event of breach by the Executive, by injunctions and restraining orders.  Nothing herein shall be constru