Document:

EXHIBIT 10.3

 

SENIOR SECURED CONVERTIBLE PROMISSORY
NOTE

 

THIS SENIOR SECURED CONVERTIBLE PROMISSORY
NOTE HAS BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933
(AS AMENDED, THE “SECURITIES ACT”) UNDER ANY APPLICABLE STATE SECURITIES LAWS. THIS NOTE MAY NOT BE SOLD, RANSFERRED,
ASSIGNED, PELDGED, OR HYPOTHECATED ABSENT AN EFFECTIVE REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES
LAWS OR UNLESS THE PROPOSED TRANSFER MAY BE EFFECTED WITHOUT REGISTRATION OR QUALIFICATION UNDER THE SECURITIES ACT AND APPLICABLE
STATE SECURITIES LAWS. 

 

	No. 2013 - 1 	U.S. $____________________

 

Issuance Date: June 28, 2013

 

VYSTAR CORPORATION

 

SENIOR SECURED CONVERTIBLE PROMISSORY
NOTE DUE JUNE 30, 2018

 

THIS SENIOR SECURED
CONVERTIBLE PROMISSORY NOTE of Vystar Corporation. (the “Company”), issued this __ day of June, 2013 (the
“Issuance Date”), is duly authorized and issued pursuant to that certain Note Subscription Agreement, dated
as of June __, 2013 between the Company, the Holder (as defined below) and certain other purchasers (the “Note Subscription
Agreement”) (including all Senior Secured Convertible Promissory Notes issued hereof, this “Note”), designated
as one of the Senior Secured Convertible Promissory Notes Due June 30, 2018, to issued or to be issued pursuant to the Note Subscription
Agreement (collectively, the “Notes”).

 

FOR VALUE RECEIVED,
the Company promises to pay [______________] (or his, her or its permitted assigns) (the registered holder hereof) (the “Holder”),
the principal sum of $____________________, on June 30, 2018 (the “Maturity Date”), subject to Section 1,
and to pay in cash all interest that has accrued under the Note on the principal and outstanding interest sum outstanding on a
semi-annual basis, or the next business day (each such date of payment an “Interest Payment Date”), commencing
December 31, 2013), up to and including the date on which this Note has been paid in full, at the rate of 10% per annum, and shall
be computed on the basis of a 360-day year and actual days elapsed (depending upon the subscription date). Accrual of interest
on this Note shall commence on the Issuance Date and shall continue to accrue (and shall be compounded on a semiannual basis) until
the next Interest Payment Date. The interest so payable will be paid on each Interest Payment Date to the person or entity in whose
name this Note (or one or more predecessor Notes) is registered on the records of the Company regarding registration and transfers
of the Notes (the “Notes Register”) on the first business day immediately prior to such Interest Payment Date.
All accrued and unpaid interest shall bear interest at the same rate of 10% per annum until the date of payment. The principal
(and all accrued and unpaid interest) of this Note is payable in currency of the United States of America. The Notes Register shall
represent the record of ownership and right to receive principal and interest payments on this Note. Interest and principal shall
be payable only to the registered Holder as reflected in the Notes Register. The right to receive principal and interest payments
under this Note shall be transferable only through an appropriate entry in the Notes Register as provided herein.

 

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This Note is subject to the following additional
provisions:

 

1.            No
Prepayment; Conversion Rights and Obligations; Maturity Date Extension.

 

(a)          The
Company shall not prepay any amount of principal or accrued interest outstanding under this Note prior to the Maturity Date without
the prior written consent of the Majority Noteholders (as defined in the Note Subscription Agreement).

 

(b)          At
the election of the Holder, at their sole option and discretion, all principal and interest amounts then outstanding under all
of the Notes shall be exchanged (the “Note Conversion”) for shares of the Company’s common stock, par
value $0.01 per share (the “Common Stock”) at a price equal to the greater of $0.075 per share and eighty percent
(80%) of the volume weighted average 20 day trailing closing price prior to the applicable Conversion Date (as adjusted for any
stock split, stock dividend or other similar adjustment) (as adjusted, the “Conversion Price”);

 

(c)          The
Company hereby covenants that upon receipt by the Company of notice by the Holder that the Note Conversion is being implemented,
the Company shall take all measures requested by the Purchaser (as defined in the Note Subscription Agreement) to make available
or authorize sufficient shares of Common Stock including, but not limited to, (i) calling a special meeting of the Company’s
board of directors and/or holders of all classes of capital stock to authorize an amendment to the Company’s articles of
incorporation authorizing the applicable shares of Common Stock issuable upon the Notes Conversion, (ii) filing such amendment
with the Department of State of the State of Georgia and (iii) taking any other action necessary to consummate the transactions
contemplated hereby to permit the Note Conversion to occur as promptly as practicable. Upon delivery, all such applicable shares
of Common Stock issuable upon the Note Conversion shall be duly and validly issued and fully paid and nonassessable.

 

(d)          The
Holder may, at their sole option and discretion, extend the Maturity Date.

 

2.             Transfer.
This Note has been issued subject to investment representations of the original purchaser hereof and may be transferred, assigned
or exchanged only in compliance with the Securities Act of 1933, as amended (the “Securities Act”), including Regulation
D promulgated under the Securities Act. Any Holder of this Note, by acceptance hereof, agrees to the representations, warranties
and covenants herein. Prior to due presentment to the Company for transfer of this Note, the Company and any agent of the Company
may treat the person in whose name this Note is duly registered on the Company’s Notes Register as the owner hereof for the
purpose of receiving payment as herein provided and for all other purposes, whether or not this Note be overdue, and neither the
Company nor any such agent shall be affected by notice to the contrary.

 

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(a)          No
Interference. The Company shall not close its books against the transfer of this Note.

 

(b)          Non-Circumvention.
The Company shall not, and shall cause its subsidiaries not to, directly or indirectly, by any action avoid or seek to avoid the
observance or performance of any terms of this Note or impair or diminish its value, but shall at all times in good faith assist
in carrying out of all such terms of this Note.

 

(c)          Authority.
The Company warrants and represents that: (i) it has all requisite corporate power and authority to enter into and perform its
obligations under this Note and to issue and deliver the Note to the Holder; (ii) the execution, delivery, and performance by the
Company of its obligations under this Note, including the issuance and delivery of the Note to the Holder, have been duly authorized
by all necessary corporate action on the part of the Company; and (iii) this Note has been duly executed and delivered by the Company
and is a legal, valid and binding obligation of the Company and is enforceable against the Company in accordance with its terms.

 

(d)          Governmental
Actions. Without limiting the generality of the foregoing, the Company shall obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction thereof as may be necessary to enable the Company to perform its obligations
under this Note.

 

3.             No
Impairment. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of, and interest on, this Note at the time, place, and rate, and in the
manner herein prescribed. This Note and all other Notes now and hereafter issued of similar terms are direct obligations of the
Company.

 

4.             Termination.
After this Note shall have been fully surrendered in connection with (a) any payment in full of the outstanding principal and interest
or (b) any exchange for Common Stock or similar equity rights pursuant to Section 1(b), this Note shall no longer be deemed
to be outstanding and all rights with respect to this Note, including, without limitation, the right to receive interest hereon
and the principal hereof, shall forthwith terminate.

 

5.             Costs
and Expenses. The Company agrees to pay all costs and expenses, including reasonable attorney’s fees, which may be incurred
by the Holder in collecting any amount due under this Note.

 

6.             Events
of Default; Remedies. If one or more of the following described “Events of Default” shall occur:

 

(a)          The
Company shall default in the payment of principal or interest on these Notes; or

 

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(b)          Any
of the representations or warranties made by the Company in the Note Subscription Agreement or herein, or in any certificate or
financial or other written statements heretofore or hereafter furnished by or on behalf of the Company or any of its subsidiaries
in connection with the execution and delivery of this Note shall be false or misleading in a any material respect at the time made;
or

 

(c)          The
Company shall fail to perform or observe, in any material respect, any other covenant, term, provision, condition, agreement or
obligation of the Company under this Note or the Note Subscription Agreement and such failure shall continue uncured for a period
of fifteen (15) business days after notice from Holder of such failure; or

 

(d)          The
Company or any of its subsidiaries shall (1) admit in writing its inability to pay its debts generally as they mature; (2) make
an assignment for the benefit of creditors or commence proceedings for its dissolution; or (3) apply for or consent to the appointment
of a trustee, liquidator or receiver for its or for a substantial part of its property or business; or

 

(e)          A
trustee, liquidator or receiver shall be appointed for the Company, any of its subsidiaries or for a substantial part of their
respective property or business without their consent and shall not be discharged within forty five (45) business days after such
appointment; or

 

(f)          Any
governmental agency or any court of competent jurisdiction at the instance of any governmental agency shall assume custody or control
of the whole or any substantial portion of the properties or assets of the Company or any of its subsidiaries and shall not be
dismissed within forty five (45) business days thereafter; or

 

(g)          Bankruptcy,
reorganization, insolvency or liquidation proceedings or other proceedings for relief under any bankruptcy law or any law for the
relief of debtors shall be instituted by or against the Company or any of its subsidiaries and, if instituted against the Company
or any of its subsidiaries shall not be dismissed within forty five (45) business days after such instruction or if the Company
or any of its subsidiaries shall by any action or answer approve of, consent to, or acquiesce in any such proceedings or admit
the material allegations of, or default in answering a petition filed in any proceeding; or

 

(h)          Cessation
by the Company or any of its subsidiaries of doing business in the ordinary course; or

 

(i)          A
material adverse change to the Company’s or any of its subsidiaries business condition (financial or otherwise), earnings,
properties, prospects or results of operations of the Company or any of its subsidiaries taken as a whole.

 

Then, or at any time
thereafter, and in each and every such case, unless such Event or Default shall have been waived in writing by the Majority Noteholders
(which waiver shall not be deemed to be a waiver of any subsequent default) at the option of the Majority Noteholders and in the
Majority Noteholders’ sole discretion, the principal (and any accrued interest) amount of this Note shall become immediately
due and payable, without presentment, demand protest or notice of any kind, all of which are hereby expressly waived, anything
herein or in any note or other instruments contained to the contrary notwithstanding, and the Majority Noteholders may immediately,
enforce any and all of the Holder’s rights and remedies provided herein or any other rights or remedies afforded by law.

 

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8.             Lost
or Destroyed Note. If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange
and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed
Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed, but only upon receipt of evidence
of such loss, theft or destruction of such Note, and of the ownership thereof, and indemnity and bond, if requested, all reasonably
satisfactory to the Company.

 

9.             Governing
Law. This Note shall be governed by and construed in accordance with the laws of the State of Georgia, without giving effect
to the principles of conflicts of laws.

 

10.           Business
Day Definition. For purposes hereof, the term “business day” shall mean any day on which banks are generally open
for business in the State of Georgia, USA and excluding any Saturday and Sunday.

 

11.           Notices.
Any notice, demand or request required or permitted to be given by either the Company or the Holder pursuant to the terms of this
Note shall be made in accordance with Section 11 of the Note Subscription Agreement.

 

12.           Waiver.
Any waiver by the Company, the Holders hereof or the Majority Noteholders of a breach of any provision of this Note shall not operate
as or be construed to be a waiver of any breach of such provision or of any breach of any other provision of this Note. The failure
of the Company, the Holder hereof or the Majority Noteholders to insist upon strict adherence to any term of this Note on one or
more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Note. Subject to the terms of Section 10 of the Note Subscription Agreement, any waiver must
be in writing and signed by such party against whom such waiver is sought to be enforced.

 

13.           Notices
of Certain Actions. In case at any time the Company shall propose to:

 

(a)          pay
any dividend or make any distribution on shares of Common Stock in shares of Common Stock or equivalents thereto or make any other
distribution; or

 

(b)          issue
any rights, warrants or Common Stock to any holders of Common Stock entitling them to purchase any additional shares of Common
Stock or any other rights, debentures, warrants or other Common Stock; or

 

(c)          effect
any reclassification or change of outstanding shares of Common Stock, or any consolidation, merger, sale (or similar transaction),
lease or conveyance of property (not in the Company’s ordinary course of business); or

 

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(d)          effect
any liquidation, dissolution or winding-up of the Company; then, and in any one or more of such cases (a) through (d), the Company
shall, subject to any other Sections of this Note, give written notice thereof, by certified mail, postage prepaid, or by facsimile,
electronic mail (or similar electronic transmission) to the Holder at the Holder’s address as it shall appear in the Notes
Register, mailed at least fifteen (15) days prior to (i) the date as of which the holders of record of shares of securities to
be entitled to receive any such dividend, distribution, rights, debentures, warrants or other securities are to be determined
or (ii) the date on which any such reclassification, change of outstanding shares of Common Stock, consolidation, merger, sale,
lease, conveyance of property, liquidation, dissolution or winding-up is expected to become effective, and the date as of which
it is expected that holders of record of shares of Common Stock shall be entitled to exchange their shares for securities or other
property, if any, deliverable upon such reclassification, change of outstanding shares, consolidation, merger, sale, lease, conveyance
of property, liquidation, dissolution or winding-up. 

 

14.           Unenforceable
Provisions. If any provision of this Notice is invalid, illegal or unenforceable, the balance of this Notice shall remain in
effect, and if any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other
persons and circumstances.

 

15.           Restriction
on Redemption and Dividends. Until all of the Notes issued (on or after the date hereof) pursuant to the Note Subscription
Agreement have been paid in full, exchanged or otherwise satisfied in accordance with their terms, the Company shall not, directly
or indirectly, (A) repurchase, redeem, or declare or pay any cash dividend or distribution on, the Common Stock or (B) distribute
any material property or assets of any kind to holders of the Common Stock in respect of the Common Stock.

 

16.           Senior
Secured Ranking. As security for all obligations under the Notes, Company has granted to the Holder first priority security
interest in the Collateral pursuant to the Security Agreement (as defined in the Note Subscription Agreement).

 

17.           Payment
of Collection, Enforcement and Other Costs. If (a) this Note is placed in the hands of an attorney for collection or enforcement
or is collected or enforced through any legal proceeding or the Holder otherwise takes action to collect amounts due under this
Note or to enforce the provisions of this Note or (b) there occurs any bankruptcy, reorganization, receivership of the Company
or other proceedings affecting Company creditors’ rights and involving a claim under this Note, then the Company shall pay
the reasonable costs incurred by the Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization,
receivership or other proceeding, including, but not limited to, reasonable attorneys’ fees and disbursements.

 

18.           Construction;
Headings. This Note shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against
any person as the drafter hereof. The headings of this Note are for convenience of reference and shall not form part of, or affect
the interpretation of, this Note.

 

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19.           Remedies,
Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Note shall be cumulative
and in addition to all other remedies available under this Note and any of the other Transaction Documents (as defined in the Note
Subscription Agreement), at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing
herein shall limit the Majority Noteholders’ right to pursue actual damages for any failure by the Company to comply with
the terms of the Notes. Amounts set forth or provided for herein with respect to payments shall be the amounts to be received by
the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance
thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and
that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach
or threatened breach, the Majority Noteholders shall be entitled, in addition to all other available remedies, to an injunction
restraining any breach, without the necessity of showing economic loss and without any bond or other security being required.

 

20.           Waiver
of Notice. To the extent permitted by law, the Company hereby waives demand, notice, protest and all other demands and notices
in connection with the delivery, acceptance, performance, default or enforcement of this Note and the Note Subscription Agreement.

 

[Remainder of page intentionally left
blank] 

 

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IN WITNESS WHEREOF, the Company has
caused this Note to be duly executed by an officer thereof duly authorized.

 

	 	VYSTAR CORPORATION 
	 	 	 
	 	By:	 
	 	 	 
	 	Name:	 
	 	 	 
	 	Title:	 

 

    	Page 8 of 8EXHIBIT 10.4

 

SECURITY AGREEMENT

 

SECURITY AGREEMENT
(this “Security Agreement”) is made and entered into as of _____________________ by and among: VYSTAR CORPORATION,
a Georgia corporation (the “Grantor”) and _____________________________ a Purchaser (each a “Secured
Party” and together, the “Secured Parties”) as set forth on Schedule I to the Note Subscription
Agreement (the “Note Subscription Agreement”) dated as of the date thereof.

 

WHEREAS, on
or about July 1, 2013 and concurrent with this Agreement, Vystar entered into an LLC Ownership Interest Purchase Agreement (the
“Acquisition Agreement,” a copy of which has been attached hereto as Exhibit A) whereby the Grantor acquired
100% of the limited liability corporate membership and ownership interest of Kiron Clinical Sleep Lab, LLC, a North Carolina limited
liability company (“Kiron”) such that following the Acquisition Agreement, Kiron will continue its existence
as a wholly owned subsidiary of the Grantor (collectively the “Acquisition”)

 

WHEREAS, Vystar
issued (and committed to issue, subject to certain conditions) to the Secured Party a secured convertible promissory note in the
principal amount of _________________________________ ($________________), (the “Note”) and additional secured
convertible promissory notes to additional Secured Parties set forth on Schedule I to the Note Subscription Agreement.

 

WHEREAS, as
a condition to the closing of the Note Subscription Agreement and the issuance of the Note, the Parties agree that the Grantor
execute and deliver to the Secured Party this Agreement with the intent to secure the Note with a pro-rata percentage of the Kiron
limited liability corporate membership and ownership interest and provide for the grant to the Secured Party of a senior security
interest in the pro-rata percentage of the Kiron limited liability corporate membership and ownership interest.

 

NOW, THEREFORE,
in consideration of the premises, and in consideration of the mutual representations, warranties, and covenants herein contained,
and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree
as follows:

 

		1.	Grant of Security

 

The Grantor hereby
assigns, conveys, mortgages, pledges, grants and transfers to the Secured Party, a lien on and a security interest in the Kiron
limited liability corporate membership and ownership interest equal to the principal amount of the Note divided by the total principal
of the Notes issued pursuant to the Note Subscription Agreements as set forth in the Schedule I to the Note Subscription Agreements,
the “Collateral”.

 

		2.	Security for Obligations

 

The security interest
granted by the Grantor hereunder secures the prompt and complete payment and performance when due (whether at stated maturity,
upon acceleration or otherwise) of all the Secured Obligations now or hereafter existing, whether matured or unmatured, contingent
or liquidated, under the Notes including any extensions, modifications, substitutions, amendments and renewals thereof, whether
for principal, interest, premium, fees, expenses or otherwise.

 

    	 

    	 

    

 

		3.	Grantor Remains Liable

 

Anything herein to
the contrary notwithstanding, (i) the Grantor shall remain liable under the contracts and agreements included in the Collateral
to the extent set forth therein to perform all of its duties and obligations thereunder to the same extent as if this Security
Agreement had not been executed, (ii) the exercise by the Secured Party of any of the rights hereunder shall not release the Grantor
from any of its duties or obligations in connection with the general intangibles and under the contracts and agreements included
in the Collateral, (iii) the Secured Party shall not have any obligation or liability under the contracts and agreements included
in the Collateral by reason of this Security Agreement, nor shall it be obligated to perform any of the obligations or duties of
the Grantor thereunder or to take any action to collect or enforce any claim for payment assigned hereunder, and (iv) the Secured
Party shall not assume any liability or obligation whatsoever with respect to any membership or limited liability company interest
of any limited liability company or any partnership interest of any partnership included in the Collateral, nor shall it become
a substituted member or partner of any such limited liability company or partnership solely by virtue of this Security Agreement.

 

		4.	Representations and Warranties

 

The Grantor, as of
the date hereof, represents and warrants as follows:

 

(a)            The chief place of business
and chief executive office of the Grantor and the office where it keeps its records concerning the Collateral, and the original
copies of the Contracts owned by it and in its possession and of all Chattel Paper that evidences Collateral owned by it, are located
at the addresses set forth on Part I of Schedule 4(a) hereto. The federal tax identification number of the Grantor is set forth
in Part II of Schedule 4(a). The trade names, if any, of the Grantor are set forth on Part III of Schedule 4(a).

 

(b)            The Grantor is the legal and
beneficial owner of the Collateral purported to be granted by it hereunder free and clear of any lien, except for the security
interest created by this Security Agreement and those listed on Schedule 4(b) (the “Permitted Liens”). No effective
financing statement or other instrument similar in effect covering all or any part of such Collateral is on file in any recording
office, except such as may have been filed in favor of the Secured Party relating to this Security Agreement or such as may have
been filed in connection with the Permitted Liens.

 

(c)            This Security Agreement, together
with the filing of financing statements with respect hereto creates a valid and perfected first priority lien on and security interest
in the Collateral owned by the Grantor (other than Collateral which has a Permitted Lien attached, and for such Collateral, this
Security Agreement, together with the filing of financing statements with respect hereto creates a valid and perfected lien and
security interest in such Collateral), securing the payment of the Secured Obligations.

 

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		5.	Further Assurances. 

 

The Grantor agrees
that from time to time, at Grantor’s expense, it will promptly execute and deliver all further instruments and documents,
and take all further action, that may be necessary or desirable, or that the Secured Party may request, in order to perfect and
protect any security interest granted or purported to be granted hereby or to enable the Secured Party to exercise and enforce
its rights and remedies hereunder with respect to any Collateral. Without limiting the generality of the foregoing, the Grantor
will: (i) at the request of the Secured Party, mark conspicuously each document pertaining to the Collateral with a legend, in
form and substance satisfactory to the Secured Party, indicating that such document, chattel paper, Related Contract or Collateral
is subject to the security interest granted hereby; (ii) execute and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as may be necessary or desirable, or as the Secured Party may request, in order
to perfect and preserve the security interests granted or purported to be granted hereby; provided that neither the failure of
the Secured Party to make such demand nor the failure of the Grantor to comply with such demand will impair or affect the validity
of the grant effected by this Security Agreement.

 

The Grantor hereby
authorizes the Secured Party to file one or more financing or continuation statements, and amendments thereto, relative to all
or any part of the Collateral without the signature of the Grantor where permitted by law. A carbon, photographic or other reproduction
of this Security Agreement or any financing statement covering the Collateral or any part thereof shall be sufficient as a financing
statement where permitted by law.

 

The Grantor will furnish
to the Secured Party from time to time statements and schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as the Secured Party may reasonably request, all in reasonable detail.

 

		6.	Transfers and Other Liens

 

The Grantor shall not
create or suffer to exist any Lien upon or with respect to any of the Collateral, except for (a) the security interest created
by this Security Agreement and (b) existing Permitted Liens.

 

		7.	Remedies

 

If an Event of Default
(as defined in the Notes) shall have occurred and be continuing:

 

(a)            The Secured Party may exercise
in respect of the Collateral, in addition to other rights and remedies provided for herein or otherwise available to it, all the
rights and remedies of a secured party on default under the UCC (whether or not the UCC applies to the affected Collateral) and
also may (i) require the Grantor to, and the Grantor hereby agrees that it will at its expense and upon request of the Secured
Party forthwith, assemble all or part of the Collateral owned by it as directed by the Secured Party and make it available to the
Secured Party at a place to be designated by the Secured Party which is reasonably convenient to each party and (ii) without notice
except as specified below, sell the Collateral or any part thereof in one or more parcels at public or private sale, at any of
the Secured Party’s offices or elsewhere, for cash, on credit or for future delivery, and upon such other terms as the Secured
Party may deem commercially reasonable. The Grantor agrees that, to the extent notice of sale shall be required by law, at least
thirty days’ notice to the Grantor of the time and place of any public sale or the time after which any private sale is to
be made shall constitute reasonable notification. The Secured Party shall not be obligated to make any sale of Collateral regardless
of notice of sale having been given. The Secured Party may adjourn any public or private sale from time to time by announcement
at the time and place fixed therefore, and such sale may, without further notice, be made at the time and place to which it was
so adjourned.

 

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(b)            The Secured Party may exercise
any and all rights and remedies of the Grantor under or in connection with respect of the Collateral, including, without limitation,
any and all rights of the Grantor to demand or otherwise require payment of any amount under, or performance of any provision of
the Collateral.

 

(c)            All cash proceeds received by
the Secured Party in respect of any sale of, collection from, or other realization upon all or any part of the Collateral of the
Grantor may, in the discretion of the Secured Party, be held by the Secured Party as collateral for, and/or then or at any time
thereafter applied in whole or in part by the Secured Party against, all or any part of the Secured Obligations. Any surplus of
such cash or cash proceeds held by the Secured Party and remaining after payment in full of all such Secured Obligations shall
be paid over to the Grantor or to whomsoever may be lawfully entitled to receive such surplus.

 

		8.	Indemnity

 

The Grantor agrees
to indemnify the Secured Party from and against any and all claims, losses and liabilities growing out of or resulting from this
Security Agreement (including, without limitation, enforcement of this Security Agreement), except claims, losses or liabilities
resulting from such indemnified person’s gross negligence or willful misconduct.

 

		9.	Continuing Security Interest; Transfer of Rights and Obligations

 

This Security Agreement
shall create a continuing security interest in the Collateral and shall remain in full force and effect until the indefeasible
payment in full of the Secured Obligations. If permitted pursuant to the Note, the Secured Party may assign or otherwise transfer,
all or any portion of its rights and obligations under the Note to any other person, and such other person shall thereupon become
vested with all the benefits in respect thereof granted to the Secured Party herein or otherwise.

 

		10.	Security Interest Absolute

 

All rights of the Secured
Party and security interests hereunder, and all obligations of the Grantor hereunder, shall be absolute and unconditional irrespective
of:

 

(a)            any lack of validity or enforceability
of any Transaction Document or any other agreement or instrument relating thereto;

 

(b)            any change in the time, manner
or place of payment of, or in any other term of, all or any of the Secured Obligations, or any other amendment or waiver of or
any consent to any departure from any of the Transaction Documents;

 

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(c)            any taking and holding of Collateral
or additional guarantees for all or any of the Secured Obligations, or any amendment, alteration, exchange, substitution, transfer,
enforcement, waiver, subordination, termination or release of any Collateral or such guarantees, or non-perfection of any Collateral,
or any consent to departure from any guaranty, for all or any of the Secured Obligations;

 

(d)            any manner of application of
Collateral, or proceeds thereof, to all or any of the Secured Obligations, or the manner of sale of any Collateral;

 

(e)            any consent by the Secured Party
or any other person to the change, restructure or termination of the corporate structure or existence of the Grantor and any corresponding
restructure of the Secured Obligations, or any other restructure or refinancing of the Secured Obligations or any portion thereof;

 

(d)            any modification, compounding,
compromise, settlement, release by the Secured Party or any other person (or by operation of law or otherwise), collection or other
liquidation of the Secured Obligations or the liability of the Grantor or any guarantor, or of the Collateral, in whole or in part,
and any refusal of payment by the Secured Party or any other Person, in whole or in part, from any obligor or guarantor in connection
with any of the Secured Obligations, whether or not with notice to, or further assent by, or any reservation of rights against,
the Grantor; or

 

(e)            any other circumstance which
might otherwise constitute a defense available to, or a discharge of, the Grantor.

 

Without limiting the
generality of the foregoing, the Grantor hereby consents to, and hereby agrees, that the rights of the Secured Party hereunder,
and the liability of the Grantor hereunder, shall not be affected by any and all releases of any Collateral from the liens created
by any Transaction Document, whether for purposes of sales or other dispositions of assets or for any other purpose. This Security
Agreement shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Secured
Obligations is rescinded or must otherwise be returned by the Secured Party or any other person upon the insolvency, bankruptcy
or reorganization of the Grantor, or otherwise, all as though such payment had not been made.

 

		11.	Waivers

 

The Grantor hereby
waives any requirement that the Secured Party or any other person protect, secure, protect or insure any lien or any property subject
thereto or exhaust any right or take any action against the Grantor or any other person or any Collateral; and

 

		12.	Release of Collateral

 

Upon all of the principal
and interest and other indebtedness evidenced by the Note having been repaid, then the security interests created hereby shall
terminate and Secured Party shall release the Collateral. Upon any such termination of the security interests created hereby and
the release of the Collateral, the Secured Party will execute and deliver to the Grantor such documents as the Grantor shall reasonably
request to evidence the termination of the security interests created hereby and the release of the Collateral.

 

    	Page 5 of 7

    	 

    

 

		13.	No Waiver; Cumulative Remedies

 

The Secured Party shall
not by any act, delay, omission or otherwise be deemed to have waived any of its rights or remedies hereunder, and no waiver shall
be valid unless in writing, signed by the Secured Party, and then only to the extent therein set forth. A waiver by the Secured
Party of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which the Secured
Party would otherwise have on any future occasion. No failure to exercise nor any delay in exercising on the part of the Secured
Party, any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided are cumulative and may be exercised singly or concurrently,
and are not exclusive of any rights or remedies provided by law.

 

		14.	Incorporation by Reference of Note Subscription Agreement Provisions

 

Each of the provisions
of Sections 8, 9, 10, 12, 13, 15, 16, 17, 18, and 19 of the Note Subscription Agreement are hereby incorporated by reference and
shall be deemed to be a part of this Security Agreement as if fully set forth herein; provided that references in such sections
to “this Agreement” shall be replaced for such purposes by references to “this Security Agreement”.

 

[Remainder of this page intentionally
left blank]

 

    	Page 6 of 7

    	 

    

 

SIGNATURE PAGE TO THE SECURITY AGREEMENT

 

IN WITNESS WHEREOF, the parties have
executed this Security Agreement as of the date first above written.

 

	 	COMPANY:
	 	 	 
	 	VYSTAR CORPORATION
	 	 	 
	 	By:	 
	 	 	 
	 	Name:	 
	 	 	 
	 	Title:	 
	 	 	 
	 	SECURED PARTY
	 	 	 
	 	 	 
	 	 	 
	 	By:	 
	 	 	 
	 	Name:	 
	 	 	 
	 	Title:	 

 

    	Page 7 of 7

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