As filed with the Securities and
Exchange Commission on August 5, 2009
Registration
No. 333-155341
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C.
20549
Pre-Effective
Amendment No. 5
to
Form
S-1
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
VYSTAR
CORPORATION
(Exact
name of registrant as specified in its charter)
Georgia
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8731
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20-2027731
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(State
or other jurisdiction of
incorporation
or organization)
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(Primary
Standard Industrial
Classification Code
Number)
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(I.R.S.
Employer
Identification
Number)
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3235
Satellite Boulevard
Building
400, Suite 290
Duluth,
GA 30096
(770)
965-0383
(Address,
including zip code, and telephone number, including
area
code, of registrant’s principal executive offices)
William
Doyle
Chief
Executive Officer
3235
Satellite Boulevard
Building
400, Suite 290
Duluth,
GA 30096
(770)
965-0383
(Name,
address, including zip code, and telephone
number,
including area code, of agent for service)
Copy
to:
Gerald L.
Baxter, Esq.
Greenberg
Traurig, LLP
3290
Northside Parkway, Suite 400
Atlanta,
GA 30327
(678)
553-2430
Approximate date of commencement of
proposed sale to public:
As soon as practicable after this
Registration Statement is declared effective.
If any of
the securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933,
check the following box.
x
If this
Form is filed to register additional securities for an offering pursuant to
Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering.
o
If this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier registration statement for the same
offering.
o
If this
Form is a post-effective amendment filed pursuant to Rule 462(d) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier registration statement for the same
offering.
o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check
one):
Large
accelerated filer
£
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Accelerated
filer
£
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Non-accelerated
filer
£
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Smaller
reporting company
x
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(Do
not check if a smaller reporting
company)
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CALCULATION
OF REGISTRATION FEE
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Title of Each Class of
Securities to be Registered
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Amount to be
Registered
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Proposed Maximum Aggregate
Offering Price Per Unit
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Proposed Maximum
Aggregate Offering Price (1)
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Amount of Registration
Fee
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Common
Stock
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4,803,338
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$
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2.00
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(1)
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$
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9,606,676
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(1)
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$
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536.05
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(1) Estimated
solely for the purpose of calculating the registration fee pursuant to Rule
457(o) under the Securities Act. Previously paid.
The Registrant hereby amends this
Registration Statement on such date or dates as may be necessary to delay its
effective date until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of 1933 or
until the Registration Statement shall become effective on such date as the
Commission, acting pursuant to Section 8(a), may
determine.
PART II
INFORMATION
NOT REQUIRED IN PROSPECTUS
This
Amendment to Part II is being filed solely for the purpose of amending the
Exhibit Index below and adding final versions of all Exhibits to the extent not
previously filed as indicated in the Exhibit Index.
Item
13.
Other Expenses of
Issuance and Distribution.
The
following table indicates the expenses to be incurred in connection with the
distribution and resale offering described in this Registration Statement, other
than underwriting discounts and commissions, all of which will be paid by the
Registrant. All amounts are estimated except the Securities and Exchange
Commission registration fee and the Financial Industry Regulatory Authority
fee.
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Amount
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Securities
and Exchange Commission registration fee
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$
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536
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Accountants’
fees and expenses
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32,000
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Legal
fees and expenses
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200,000
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Transfer
Agent’s fees and expenses
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20,000
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Printing
and engraving expenses
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10,000
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Miscellaneous
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10,000
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Total
Expenses
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$
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272,536
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Item
14.
Indemnification
of Directors and Officers.
As
permitted by Georgia law, provisions in our articles of incorporation and bylaws
limit or eliminate the personal liability of our directors. Our articles of
incorporation and bylaws limit the liability of directors to the maximum extent
permitted by Georgia law. Georgia law provides that directors of a corporation
will not be personally liable for monetary damages for breaches of their
fiduciary duties as directors, except liability for:
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·
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any
breach of the director’s duty of loyalty to us or our
shareholders;
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any
act or omission not in good faith or that involves intentional misconduct
or a knowing violation of
law;
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·
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any
unlawful payments related to dividends or unlawful stock repurchases,
redemptions or other
distributions; or
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·
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any
transaction from which the director derived an improper personal
benefit.
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These
limitations do not apply to liabilities arising under federal securities laws
and do not affect the availability of equitable remedies, including injunctive
relief or rescission. If Georgia law is amended to authorize the further
elimination or limiting of a director, then the liability of our directors will
be eliminated or limited to the fullest extent permitted by Georgia law as so
amended.
As
permitted by Georgia law, our articles of incorporation and bylaws also provide
that:
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·
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we
will indemnify our directors and officers to the fullest extent permitted
by law;
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·
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we
may indemnify our other employees and other agents to the same extent that
we indemnify our officers and directors, unless otherwise determined by
the board of
directors; and
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·
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we
will advance expenses to our directors and executive officers in
connection with legal proceedings in connection with a legal proceeding to
the fullest extent permitted by
law.
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The
indemnification provisions contained in our articles of incorporation and bylaws
are not exclusive.
The
Registrant maintains a general liability insurance policy which covers certain
liabilities of our directors and officers arising out of claims based on acts or
omissions in their capacities as directors or officers.
Item
15.
Recent Sales of
Unregistered Securities.
Set forth
below is information regarding shares of common stock, warrants and options to
purchase common stock issued by the Registrant within the past three years that
were not registered under the Securities Act of 1933, as amended, the Securities
Act. Also included is the consideration, if any, received by the Registrant for
such shares, warrants and options and information relating to the section of the
Securities Act, or rule of the Securities and Exchange Commission, under which
exemption from registration was claimed.
(a)
Common Stock and
Warrant Financings
From
December 2005 through July 2007, the Registrant issued 1,430,632 shares of
its common stock at a price of $1.50 per share. In connection with such
offering, the Registrant issued one warrant to purchase one share of common
stock at an exercise price of $.50 per share for each share of common stock
purchased. From October 2006 through May 2008, the Registrant issued 1,198,066
shares of common stock upon the exercise of such warrants (and warrants issued
prior to December 2005) at $.50 per share.
From May
2008 through May 2009, the Registrant issued 1,477,000 shares of its
common stock at a price of $2.00 per share. In connection with such offering,
the Registrant issued one warrant to purchase one share of common stock at an
exercise price of $1.00 per share for each two shares of common stock purchased.
In September 2008, the Registrant issued 5,000 shares of common stock upon the
exercise of such warrants at $1.00 per share.
From June
2006 through May 28, 2009 the Registrant issued 164,902 shares of its
common stock for services rendered to the Registrant.
(b)
Stock Option
Grants
Since
November 2005, the Registrant has issued options to certain employees and
consultants to purchase an aggregate of 2,800,00 shares of common
stock at exercise prices from $1.00 to $1.50. Through the date hereof, none of
such options have been exercised.
(c)
Application of
Securities Laws and Other Matters
No
underwriters were involved in the foregoing sales of securities. The securities
described in section (a) of this Item 15 were issued to investors in
reliance upon the exemption from the registration requirements of the Securities
Act, as set forth in Section 4(2) under the Securities Act and
Regulation D promulgated thereunder, as applicable, relative to sales by an
issuer not involving any public offering, to the extent an exemption from such
registration was required.
The
issuance of stock options as described in section (b) of this Item 15
were issued pursuant to written compensatory plans or arrangements with the
Registrant’s employees, directors and consultants, in reliance on the exemption
provided by Rule 701 promulgated under the Securities Act. All recipients
either received adequate information about the Registrant or had access, through
employment or other relationships, to such information.
All of
the foregoing securities are deemed restricted securities for purposes of the
Securities Act. All certificates representing the issued shares of common stock,
warrants and options described in this Item 15 included appropriate legends
setting forth that the securities had not been registered and the applicable
restrictions on transfer.
Item
16.
Exhibits.
The
exhibits to the Registration Statement are listed in the Exhibit Index
attached hereto and incorporated by reference herein.
Item
17.
Undertakings.
(a) The
undersigned registrant hereby undertakes:
(1) To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement;
(i) To
include any prospectus required by Section 10(a)(3) of the Securities Act
of 1933, as amended;
(ii) To
reflect in the prospectus any facts or events arising after the effective date
of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement; and
(iii) To
include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to
such information in the registration statement.
(2) That,
for the purpose of determining any liability under the Securities Act of 1933,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
(4) That,
for the purpose of determining liability under the Securities Act of 1933 to any
purchaser:
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(i)
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If
the registrant is subject to Rule 430C, each prospectus filed pursuant to
Rule 424(b) as part of a registration statement relating to an offering,
other than registration statements relying on Rule 430B or other than
prospectuses filed in reliance on Rule 430A, shall be deemed to be part of
and included in the registration statement as of the date it is first used
after effectiveness. Provided, however, that no statement made in a
registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by
reference into the registration statement or prospectus that is part of
the registration statement will, as to a purchaser with a time of contract
of sale prior to such first use, supersede or modify any statement that
was made in the registration statement or prospectus that was part of the
registration statement or made in any such document immediately prior to
such date of first
use.
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Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the Registrant has duly
caused this Pre-Effective Amendment No. 5 to Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Duluth, State of Georgia, on this 5th day of August,
2009.
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Vystar
Corporation
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By:
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/s/ William
R. Doyle
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William
R. Doyle
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Chairman,
President and Chief Executive Officer
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Each
person whose signature appears below constitutes and appoints William R. Doyle
his true and lawful attorney-in-fact and agent, acting alone, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments (including post effective
amendments) to this Pre-Effective Amendment No. 5 to Registration Statement
on Form S-1, and to sign any registration statement for the same offering
covered by this Registration Statement that is to be effective upon filing
pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and
all post effective amendments thereto, and to file the same, with all exhibits
thereto, and all documents in connection therewith, with the Commission,
granting unto said attorney-in-fact and agent, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, acting alone, or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Signature
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Title
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Date
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Chairman,
President, Chief Executive
Officer
and Director (Principal Executive
Officer)
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/s/ LINDA
S. HAMMOCK
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Chief
Financial Officer
(Principal
Financial and Accounting
Officer)
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Director
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August
5, 2009
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Director
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August
5, 2009
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*By
William R. Doyle, attorney in fact.
Exhibit
Index *
*
Some Exhibits have certain confidential information redacted pursuant to a
request for confidential treatment
Exhibit
Number
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Description
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3.1
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Articles
of Incorporation of Vystar Acquisition Corporation (now named Vystar
Corporation) dated December 17, 2003 (as amended) (previously
filed)
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3.2
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Bylaws
of Vystar Corporation (previously filed)
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4.1
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Specimen
Certificate evidencing shares of Vystar common stock (previously filed)
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4.2
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Form
of Share Subscription Agreements and Investment Letter (First Private
Placement) (previously filed)
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4.3
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Form
of Share Subscription Agreement and Investment Letter (Second Private
Placement) (previously filed)
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4.4
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Form
of Vystar Corporation Investor Questionnaire and Subscription Agreement
(Third Private Placement) (previously filed)
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5.1
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Opinion
of Greenberg Traurig LLP (previously filed)
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10.1*
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Manufacturing
Agreement between Vystar Corporation and Revertex (Malaysia) Sdn. Bhd.
effective April 1, 2008 (previously filed)
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10.2*
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Distributor
Agreement among Vystar Corporation, Centrotrade Minerals & Metals,
Inc. and
Centrotrade
Deutschland, GmbH dated January 6, 2009
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10.3
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Executive
Employment Agreement between Vystar Corporation and William R. Doyle,
dated November 11, 2008
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10.4
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Management
Agreement dated January 31, 2008 between Universal Capital Management,
Inc. and Vystar Corporation
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10.5
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Letter
Agreement dated August 15, 2008 between Universal Capital Management, Inc.
and Vystar Corporation
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10.6
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Addendum
to Management Agreement dated February 29, 2008 between Universal Capital
Management, Inc. and Vystar Corporation
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10.7
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Warrant
Purchase Agreement dated January 31, 2008 between Universal Capital
Management, Inc. and Vystar Corporation
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10.8
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Management
Agreement dated April 30, 2008 between Universal Capital Management, Inc.
and Vystar Corporation
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10.9
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Warrant
Purchase Agreement dated April 30, 2008 between Universal Capital
Management, Inc. and Vystar Corporation
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10.10
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Vystar
Corporation 2004 Long-Term Compensation Plan, as
amended
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10.11
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Employment
Agreement between Vystar Corporation and Sandra Parker dated April 1,
2008
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10.12
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First
Amendment to Employment Agreement dated July 1, 2009, between Vystar
Corporation and Sandra Parker.
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10.13
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Note
agreement between Vystar Corporation and Climax Global Energy, Inc. dated
August 15, 2008
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10.14
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Lockup
Agreement with Glen W. Smotherman dated July 30, 2009 (previously
filed)
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21.1
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Subsidiaries
of Vystar Corporation (previously filed)
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23.1
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Consent
of Independent Registered Public Accounting Firm (previously
filed)
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23.2
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Consent
of Independent Registered Public Accounting Firm (previously
filed)
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23.3
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Consent
of Greenberg Traurig, LLP (included in Exhibit 5.1)
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24.1
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Powers
of Attorney (included on signature page) (previously
filed)
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*
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Confidential
treatment requested as to certain portions, which portions have been
omitted and filed separately with the Securities and Exchange
Commission.
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CONFIDENTIAL
TREATMENT REQUESTED
CERTAIN
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND THAT MATERIAL HAS BEEN FILED SEPARATELY
DISTRIBUTOR
AGREEMENT
This
Agreement (“Distributor Agreement” or “Agreement”), dated and effective as of
January 6, 2009 (the “Effective Date”), is made and entered into by and between
Vystar Corporation, a Georgia corporation, with an address of 3235 Satellite
Blvd., Bldg. 400, Suite 290, Duluth, GA 30096 (“Company” or “Vystar”), and
Centrotrade Minerals & Metals, Inc., a Delaware corporation with an address
of 1317 Executive Boulevard, Suite 120, Chesapeake, VA 23320 and Centrotrade
Deutschland, GmbH, a German company with an address of Koelner Strasse 10b 65760
Eschborn Germany (individually and collectively referred to as
“Distributor”).
ARTICLE
1 APPOINTMENT
Section
1.1 Term and Renewal
Company
hereby appoints Distributor, and Distributor hereby accepts appointment, as
********** Distributor for the Company for its Vytex NRL™ products (“Products”)
in the territory/ies defined in Schedule
A. *********** This appointment is subject to the terms
and conditions of this Agreement, is effective as of the Effective Date, and
shall continue in effect until the end of the third (3
rd
) full
calendar year following the Effective Date unless earlier terminated pursuant to
Section 1.3 below. This Agreement shall renew automatically for
successive one (1)-year terms thereafter. Terms may be changed at any
time upon mutual agreement in writing.
Section
1.2 Category & Responsibilities
(1)
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In
addition to the responsibilities set forth there and elsewhere in this
Agreement, Distributor shall have the following
responsibilities:
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(a)
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To
use its best efforts to promote, market, and sell the Products for
Company-branded Products located in the Territories pursuant to Schedule
A. Distributor shall accept shipments of such Products at
Company’s ship point of Malaysia, pursuant to Section 3.6. The Company
branding shall be pursuant to the Trademark Guidelines described in
Schedule B;
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(b)
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To
provide pre-sale, transactional and post sale (technical and logistical)
functions including, but not limited
to:
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(i)
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making
and providing to potential customers reasonable quantities of sales
literature relating to such Products available to Distributor;
and
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(ii)
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providing
such pre-sale functions as Company in its sole discretion shall permit;
and
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(iii)
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sampling
the Products as requested by end-user customers pursuant to the Sampling
Agreement contained on Schedule E. Distributor shall ensure
that the Sampling Agreement in Schedule E is either executed by such
end-user customers or is made an integral part of the contract and sample
ordering between Distributor and end-user
customer.
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**********THESE
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
Distributor
Agreement – Page 1
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(c)
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To
maintain at its address an active place of business for sale of the
Products
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(d)
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To
maintain warehouse space that protects the Products from damage and
deterioration consistent with: (i) Company’s handling and storage
requirements discussed in Schedule C; (ii) the Product labels and
packaging; and (iii) all federal and state laws and
regulations;
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(e)
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To
promote the Products as Distributor’s ********** low protein natural
rubber latex product, and in all circumstances no less than equal to other
comparable natural rubber latex or natural rubber latex substitute or
synthetic products Distributor may carry in terms of product quality and
customer value, giving ********** for the Products in responding to
customer requests for proposals or bids for natural rubber latex and at
least equal representation for synthetic or natural rubber latex
substitute products, and providing Company representatives an equal
opportunity to participate in presentations to potential customers,
including presentations involving representatives of other
companies;
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(f)
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To
make no representations with respect to any given Product inconsistent
with the specifications, documentation, and warranty from Company for the
Product;
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(g)
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To
promptly deliver ordered Products to customers only in Company’s original
packaging or re-packaging approved by Company. Distributor
shall not deliver Products without a Company-approved user agreement and
license being made part of the agreement between Distributor and end-user
customer or delivered prior to or along with the shipment of Products
delivered to end-user customers. Distributor shall not
otherwise use or distribute the Products (including temporarily or
otherwise transferring to a third party) for its own use and purpose or
for the use and purpose of
others;
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(h)
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To
purchase Products only from Company, or another authorized Company
Distributor acting within the scope of its authority from Company, , or as
otherwise mutually agreed;
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(i)
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To
require that Distributor personnel participate in training for the Company
Products, and to provide efficient and effective after-sale services, as
described in the Company training, and in this Agreement and its
Schedules;
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(j)
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To
facilitate Product returns by such customers due to market withdrawals by
Company, to ensure Product quality, appearance, and performance prior to
redistribution, and to maintain records of all re-distributions and/or
returns;
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(k)
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To
provide Company with regular and accurate reports and information
regarding Distributor’s sale and service of Products in the format and
frequency requested by
Company;
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(l)
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To
maintain distribution records reflecting volumes sold to whom and
otherwise sufficient to meet legal and regulatory requirements for recalls
relating to the Products, as instructed by Company. Distributor
shall provide Company with these distribution reports
quarterly;
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(m)
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To
immediately notify Company of any concerns, comments or complaints from
customers involving the safety, labeling, effectiveness, quality,
performance, reliability or other problem with a Product by contacting
Company pursuant to the Notice provisions contained
herein. Such notice shall
include:
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(i)
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an
explanation of the specific nature of each problem or issue;
and
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(ii)
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the
Product lot and batch number;
and
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(iii)
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whether
any alleged event involved any injuries or created the potential for
injury;
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(n)
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To
comply with local, municipal, state, and federal laws,
and
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(o)
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To
otherwise comply with all obligations and requirements of this Agreement
and Company Policies, as distributed to Distributor, and which may be
updated from time to time as described
below.
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**********THESE
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
Distributor
Agreement – Page 2
(2)
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Company
reserves the right to sell any or all of its products in the Territories
and elsewhere directly and/or to appoint other Distributors to sell any or
all of its products in Distributor’s non-exclusive Territories. **********
Distributor reserves the right, subject to its obligations under this
Agreement, to market and/or distribute any products of other manufacturers
.
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(3)
|
Company
reserves the right to unilaterally amend, modify or supplement its
Policies or adopt additional terms or Policies applicable to Distributors
upon thirty (30) days written notice. Each amended or new
provision shall be deemed incorporated by reference herein, shall prevail
over any conflicting prior provision, and apply to Distributor by the
later of its effective date or the end of the thirty (30) day notice
period.
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(4)
|
In
the event that Company sells Product directly, as provided for in Schedule
A, and Company desires to utilize Distributor to receive Product from
Company’s manufacturing facility and deliver Product to Company’s end-user
customer, Company will so notify Distributor. Company shall pay
Distributor a fee-for-service rate consistent with Distributor’s
then-current service rates. Each year of this Agreement, Distributor and
Company shall negotiate what those fee-for-service rates for the handling
and delivery of Product on behalf of Company shall
be.
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Section
1.3 Termination
(1)
|
This
Agreement may be terminated, to the extent permitted by law, as
follows:
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|
(a)
|
by
Company or Distributor, without cause and without regard to any other
provision of this Agreement, by providing at least ninety (90) days
written notice of termination to the
other;
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|
(b)
|
by
Company or Distributor, if the other is in violation of any of its
obligations under this Agreement, by providing at least thirty (30) days
written notice of termination specifying the breach or violation for which
termination will occur, but only if such breach or violation is not
remedied within the notice period;
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|
(c)
|
by
either Party immediately by providing written notice of termination if the
other Party, in the first Party’s reasonable judgment, engages in fraud or
misrepresentation or violates Article 2, Section 5.1, Section 5.2, Section
5.3, or any other section or provision of this Agreement where a violation
cannot be promptly remedied or which indicates within its text that
failure to comply with it is immediate grounds for
termination;
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|
(d)
|
by
Company or Distributor if voluntary or involuntary bankruptcy, arrangement
of creditors, insolvency, or receivership proceedings are brought with
respect to the other party and (if “voluntary”) not terminated within 30
days.
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|
(a)
|
Distributor
shall immediately pay Company for all Products previously ordered and
acknowledged by Company whether received by Distributor or not, but not
yet paid for and for all other amounts owed to Company for any reason,
whether otherwise immediately due or not (neither termination nor receipt
of such payments shall limit Company’s other legal or equitable rights
under this Agreement or otherwise)
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|
(b)
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Company
shall have the option, but, subject to applicable law, not the obligation,
to purchase Distributor’s remaining Product inventory at Distributor’s net
cost Company costs, or at such other amount as may be
agreed;
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|
(c)
|
Distributor
shall no longer in any manner represent or imply that it is a Company
Distributor and, with respect to any person or entity who continues to
believe, or acts as if it continues to believe, that Distributor is a
Company Distributor, shall affirmatively notify said person or entity that
Distributor is no longer a Company
Distributor;
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**********THESE
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
Distributor
Agreement – Page 3
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(d)
|
When
this Agreement concludes for any reason, each party shall immediately
return, or if not feasible to return, shall destroy and otherwise cease to
use all Confidential and Proprietary Information, as defined herein, of
the other party in its possession or control (electronic copies on
non-removable media shall be erased and made incapable of
recovery).
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(3)
|
Upon
the issuance of a notice of termination by either Company or Distributor,
Company may, in its discretion and without waiting for the end of the
notice or cure period, refuse to accept or cancel or suspend an order or
require payment in advance of shipment, cancel or suspend any pending
orders or require payment in advance and may direct customers of
Distributor to other Company Distributors and/or authorized re-sellers
and/or may recommend to other Distributors that they call upon such
customers.
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(4)
|
The
following parts of this Agreement survive expiration or termination of
this Agreement: Article 2, ARTICLE 4, Section 5.2, and ARTICLE
6.
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Section
1.4 Joint Marketing Activities
(1)
Vystar and Distributor (and/or Distributor’s agents approved by Vystar) shall
mutually market the Vytex natural rubber latex consistent with the training,
education and literature Company provides to Distributor as provided
above.
(2) Each
party shall be fully responsible for the costs of its marketing materials for
its marketing efforts. In the event that the parties engage in joint
efforts that result in joint marketing materials, the parties shall share
equally in these costs unless otherwise expressly agreed by the
parties.
(3) Each
party shall provide to the other party sufficient documentation and training to
facilitate each party’s marketing efforts under the licensing and non-disclosure
requirements contained in this Agreement.
(4) Each
Party hereby grants a limited, nonexclusive, world-wide, non-assignable and
non-transferable, royalty-free license to each party’s trademarks and copyrights
for the joint marketing and sales activities and materials, provided that the
trademarks and marketing materials are not altered or modified from the parties’
approved versions.
(5) Each
party shall only use marketing materials related to the other party that are
approved by the other party.
(6)
Distributor may make opportunities available to invite the Company
representatives to marketing and sales meetings with potential customers with
respect to the Products. Company may make opportunities available to
invite Distributor to such sales meetings with potential customers within
Distributor’s exclusive Territories. Each party shall make good faith
efforts to attend such sales and marketing meetings.
ARTICLE
2 INTELLECTUAL PROPERTY
Section
2.1 Confidential & Proprietary Information
(1)
|
Confidential
and Proprietary Information of a party includes information concerning its
(or any of its affiliated entities) business (including, but not limited
to, trade secrets, systems, manufacturing or other processes, technical
data and test reports, computer software programs, procedures, prices,
pricing policies, discounts, terms of sale, sales data, marketing plans or
strategies, customer information, names of customers, manuals and
documentation, confidential reports and communications), financial
condition, data supplied by Company for technical support, testing,
operation and maintenance of its products, or any other information
identified by a party in writing upon disclosure as being confidential
information or proprietary information. The terms of this
Agreement and its Schedules shall be considered Confidential and
Proprietary Information.
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Distributor
Agreement – Page 4
(2)
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Each
party agrees that it shall not permit (or permit its employees, agents,
affiliates or related entities to permit) the duplication or disclosure of
any Confidential and Proprietary Information of the other party to any
person (other than an employee of the party who must have such information
for the performance of his obligations hereunder, and who agrees, in
writing, not to disclose such information), unless such duplication, use
or disclosure is specifically authorized by the other party in
writing.
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(3)
|
Confidential
and Proprietary Information does not include information of a party (the
“Disclosing Party”) that:
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|
(a)
|
is
or becomes publicly available and confirmed through no fault of the
non-Disclosing Party;
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|
(b)
|
is
rightfully obtained by the non-Disclosing party from an unrelated source
not in violation of a non-disclosure obligation; is disclosed with the
written consent of the Disclosing Party;
or
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|
(c)
|
is
disclosed pursuant to court order or other legal compulsion (in which
case, however, the non-Disclosing Party who may be compelled to disclose
the information shall advise the Disclosing Party of the possibility of
disclosure and cooperate with the Disclosing Party in opposing disclosure
if the Disclosing Party so
desires).
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(4)
|
Distributor
shall treat the terms of this Agreement as Confidential & Proprietary
Information of Company, but may disclose the terms as required to lenders,
counsel, auditors, or others having legitimate business interests in the
content upon a commitment of said persons or entities to be bound by the
terms of this Section. Distributor shall be responsible to
Company for any breaches by any such persons or entities of such
provisions.
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Section
2.2 Documentation & Distributor End-Customer
Licenses
Distributor
acknowledges that the purchase of any Product includes a license to use the
Product pursuant to Company licensing and other terms for the sale and use of
the Product. Distributor shall have the right to use this license
only to the extent that Distributor requires in order to sell and repackage said
Products pursuant to Company approval and the terms of this
Agreement. The license must be transferred to a permitted purchaser
of said Product, and Distributor must require the end-user customer to execute
and/or acknowledge agreement to the license and/or Product purchase agreement
provided to Distributor by Company, attached hereto as Schedule
D. Distributor shall not (and shall not authorize any third party to)
copy, disassemble or reverse engineer, or otherwise use Product for any purpose
other than use or sale for the manufacture of an end consumer product, and shall
not make copies or make media translations of the documentation for any Products
except as allowed by Company in writing. Distributor agrees to take
commercially reasonable steps to prevent its own employees and agents from
allowing access to such documentation other than as part of a Product that is
sold in compliance with this Distributor Agreement.
Distributor
Agreement – Page 5
Distributor
shall not make any modifications to the end user or sub-contractor Distributor
licenses or other documentation without the prior written consent of
Company. Distributor acknowledges that the Products may be used
for raw material for the manufacture of medical devices subject to Federal and
other medical device regulations (“Regulations”). Any tampering,
alteration or technical service without proper training, certification, and
prior authorization from Company could implicate these
Regulations. Such activities may also result in the voiding of the
Products’ warranty. If Distributor modifies, causes modification to
be made, or fails to comply with the storage ,shipment and handling requirements
contained in this Agreement without the prior written consent of Company,
Distributor shall indemnify and hold Company harmless against damages, costs and
expenses (including, without limitation, reasonable attorney’s fees and costs of
suit) resulting from the defense and settlement of any claim by a third party
that Customer’s or Distributor's use or mishandling violates any regulation or
law or infringes any intellectual property rights of such claiming
party. The provisions contained in this paragraph shall survive
termination or expiration of this Agreement. Distributor shall
require that any end-user customer to whom Distributor sells Products abides by
the terms contained in this paragraph.
Section
2.3 Labeling & Marketing Trademarks
Company
hereby grants to Distributor a non-exclusive license to use the Company
trademarks, both the name and the stylized form as used by the Company from time
to time, and the applicable Product trademarks (collectively, the “Trademarks”)
solely in connection with the advertising, promotion and repackaging of the
Products. Distributor’s use shall be strictly in accordance with Company’s
policies regarding advertising, labeling and trademark usage, attached hereto as
Schedule B, and all uses shall inure to the benefit of
Company. Company shall have the right to monitor the quality of the
Products and all uses of Trademarks by Distributor. Distributor shall
provide Company with copies of any and all promotional, advertising, sales or
other materials using Company trademarks or product names prior to publication,
use and distribution.
Except to
the extent set forth above in this paragraph regarding the right to “use”
Company trademarks, Distributor shall have no right whatsoever in or to any
trademark, trade name, or copyright of Company. Distributor shall not
misuse, alter, remove, obliterate, deface, change, replace, or apply any
labeling or trademark, copyright or other proprietary notices including any
patent, trademark, copyright or other proprietary notice of Company used on or
in connection with Products, documentation and other related materials supplied
to Distributor under this Agreement.
Section
2.4 Ownership
Patents,
trademarks, copyrights, trade secrets, documentation and any other intellectual
and/or proprietary property and information pertaining to or included with the
Products, whether in original form or any derivative works, are acknowledged by
Distributor to be valuable trade secrets and the exclusive property of Company
and/or its suppliers, and neither Distributor nor any customer shall have or
gain any right, title, interest in or to or a license in any such property
except where expressly assigned or granted in writing by Company
hereunder.
Company
maintains and retains exclusively all proprietary rights to any Products
specified in this Agreement and to all discoveries, inventions, patents,
copyrights and other rights arising out of work done by Company or Distributor
in connection with this Agreement and to any and all products developed by
Company or Distributor as a result thereof, including the sole right to
manufacture, reproduce, sell and license any and all such
products. Distributor shall not, either on its behalf or on behalf of
others, register or attempt to register or make any claim of ownership adverse
to Company regarding any of the patents, trademarks, copyrights or intellectual
property rights of Company or any other rights resembling those of
Company.
Distributor
shall promptly report to Company any infringement of which Distributor may
become aware in connection with the patents, trademarks, copyrights or other
intellectual property rights of Company pertaining to the
Products. Company shall have the sole discretion to pursue any such
infringements. If Company pursues such infringements, Distributor
shall cooperate with Company as requested.
Distributor
Agreement – Page 6
ARTICLE
3 ORDERS, CREDIT, SECURITY INTEREST, PAYMENT, SHIPMENT, RETURNS &
PRICING
Section
3.1 Orders, Forecasts &
Minimums
Distributor
shall place orders with Company as desired and is required to supply
Distributor’s end-user customers with Product. Within the first
eighteen (18) months of this Agreement, Distributor and Company shall meet to
determine ********** described in Schedule A. Thereafter, if Distributor fails
to **********, Company may, in its sole discretion, ********** upon notice to
Distributor. If no forecasts or other advance estimation
is given to Company for Product orders, a Distributor order may take up to 90
days from Distributor order to delivery of Product. In certain
instances, at Company’s sole election, Company may provide to Distributor
advance stock of Product for Distributor to have on-hand and available to be
shipped to Distributor’s end-user customers without having to wait for the full
order and shipment schedule from order placement to order receipt (“Advance
Stock”). Distributor will distribute this Advance Stock on a
first-in, first-out basis and shall pay Company for such Product within thirty
(30) days of shipment to Distributor’s end-user customers, or upon receipt of
payment by Distributor, whichever occurs first.
Section
3.2 Credit
If
Distributor intends to purchase Products on credit from Company, it must be
approved by Company’s Credit Department. If Distributor desires to
seek such approval, it shall submit a Company Distributor credit application
consisting of a completed and signed Company credit application form, a
completed and signed Bank Information Release Form, current annual financial
report as published (“Credit Documents”), and must authorize Company to
investigate its credit. Distributor shall supply such Credit
Documents on an annual basis if requested by Company for the purposes of
evaluating Distributor’s credit-worthiness and compliance with the terms of this
Distributor Agreement. Each order received from Distributor shall be
subject to Company credit department approval, and shall not be considered
binding or valid unless and until accepted in writing by the
Company. Any conflicting terms or conditions set forth in any
purchase order or acknowledgment shall have no force or effect, notwithstanding
Company’s acceptance of the order.
Section
3.3 Payments
Distributor
shall place purchase orders with Company for all purchases of Products, which
shall be payable upon thirty (30) days from date of invoice unless the Parties
have mutually agreed otherwise. Company in its sole discretion may
move Distributor to a pre-payment or cash on delivery method of payment if
Distributor is more than sixty (60) days delinquent or becomes thirty (30) days
or more delinquent in its payments for more than two (2) out of any six (6)
month period of time.
**********THESE
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
Distributor
Agreement – Page 7
Section
3.4 Security Interest
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(a)
|
Company
shall retain a security interest in the Products and any related goods and
documents until the complete satisfaction and discharge of any and all of
Company’s present and future claims and receivables from the business
relationship between Company and Distributor. (b) Distributor hereby
undertakes to mark and store separately the Products with the security
interest retained by Company (i.e., those subject to this reservation of
title). (c) Company shall become the owner of any new products
produced in the case that Distributor processes, converts or
transforms
the Products subject to Company’s reservation or permits any of the
foregoing, without incurring thereby any liability or any
obligation. In the case that Distributor combines, mixes,
blends, commingles or processes the Products subject to this reservation
of title with other goods owned by third parties or transforms them with
other goods owned by third parties, Company shall acquire and be entitled
to co-ownership of the new goods produced in the proportion to the
contributing values of the goods subject to the reservation and the value
of the other goods previously owned by third parties. To that
extent, the new goods are considered goods subject to reservation for the
purposes of these terms and conditions. (d) a sale of goods
subject to reservation is only permitted in the ordinary course of
business. Any other dispositions, in particular pledging or
chattel mortgaging of the goods subject to reservation are not permitted,
and Distributor shall not allow any lien or encumbrances on such
goods. Any claims or receivables arising to the Distributor in
connection with the goods subject to this reservation due to resale or
other disposal or otherwise are hereby fully assigned to Company in
advance by Distributor. In the case of co-ownership, the
assignment applies only to the share of the claim or receivable
corresponding to Company’s co-ownership. An onward sale or
other disposal is only permitted if the assignment to Company and its and
its other rights are maintained and not negatively affected
thereby. (e) Distributor is only authorized to collect the
claims and receivables assigned to Company in the ordinary course of
business and subject to revocation by Company at any time. On
Company’s request, Distributor shall inform its debtors of the assignment
in the proper form. In addition, Distributor grants Company an
irrevocable power of attorney so that Company is likewise entitled and
authorized to do so at any time. (f) Distributor’s
authorization to dispose, to process, to transform, to combine, to mix,
and to blend the goods subject to this reservation, and to collect the
claims and receivables assigned hereby, shall terminate ipso jure upon its
non-compliance with the terms of payment, in the case of unauthorized
disposals or of any protest in connection with checks, bills or letters of
exchange, or default on any other payment obligation or if Distributor
files a voluntary bankruptcy petition or if insolvency proceedings are
instituted against Distributor, or if a substantial deterioration of the
customer’s financial situation becomes apparent or known to
Company. In such cases, Company shall be entitled to take
immediate possession of the goods subject to reservation, for this purpose
or at any time upon reasonable request (which may be up to 72 hours from
Company request) Company may enter Distributor’s premises, and to obtain
all information reasonably required by Company on the goods subject to
reservation and, if applicable, on claims or receivables which have arisen
or may result from their resale or other disposition, as well as to
inspect Distributor’s records, if this serves to secure Company’s
rights. Acceptance of the goods, receivables or respective
claims by Company involves a rescission of the contract only if explicitly
stated in writing by Company. (g) Should the value of the
collateral or security given by Distributor to Company or retained by
Company hereunder exceed the value of Company’s claims, rights and
receivables as a whole, by more than 20%, Company shall release upon
Distributor’s request an appropriate amount of any such surplus of
collateral. (h) Company may file or record this Agreement or a copy of
this Agreement or financing statement(s), pursuant to the Uniform
Commercial Code, to perfect, continue, release, assign, terminate and/or
amend its security interest. (i) When all such amounts have
been paid in full, Company shall, at Distributor’s written request,
execute financing statements to terminate Company’s security interest in
the Products. (j) Distributor will provide additional security
as may, from time to time, be deemed necessary by Company’s credit
department. Such security may include, but is not limited to,
personal guarantee(s), security agreement(s) and letter(s) of
credit.
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Distributor
Agreement – Page 8
Section
3.5 Past Due Payments to Company
All
amounts more than thirty days past due from Distributor to Company will be
subject to a service charge of 1.5% per month or the maximum allowed by law
measured from the date the amount was due. Amounts due from
Distributor to Company shall not be subject to set-off against credits or
payments due from Company to Distributor.
Section
3.6 Shipment
All
shipments of Product to Distributor will be F.O.B. Malaysia – 1
st
loading
point. Distributor shall be responsible for the cost and payment of
all shipments. Upon mutual agreement by the Parties, Company may
pre-pay for shipping and charge to Distributor on its invoices. In the event
that Distributor requires shipping methods out of the ordinary course of
business for urgent situations or otherwise (e.g., air shipments), Distributor
shall be responsible for the costs and risk of loss of such
shipments.
Section
3.7 Returns and End User Claims
Generally,
Products are sold without return privileges. Distributor shall
inspect the Products for any physical and observable defects within forty-eight
(48) hours of receipt to determine if Products are damaged. If
Products are damaged, as determined within this forty-eight (48) hour
period, Distributor shall notify Company within such forty-eight (48) hour
period for instructions on either return or disposal of the Product. Distributor
may return to Company Product returned to Distributor which does not meet the
published specifications provided Distributor complies with the following
requirements: (a) Distributor requires its end-user customers to inspect Product
shipped to such end user customers within seven (7) days of such end-user
customer receipt and notify Distributor within that seven (7) day period of such
Product rejection; (b) Distributor requires that all claims made by its end-user
customers in connection with Products be in writing to Distributor disclosing
specific information regarding claim of defect or nonconformance, including test
results. (c) Distributor notifies Company of any such Product rejection by
Distributor’s end-user customers within forty-eight (48) hours of receiving
notice of such rejection by Distributor’s end-user customer; (d) Distributor
shall require that all Products must be in original condition, unadulterated or
altered; (e) Distributor shall require that its end-user customers comply with
the storage and handling requirements described in Schedule C; and (f)
Distributor complied with the requirements in Schedule C with respect to such
rejected Product. Distributor shall be required to retain a return-authorization
for all returns. Failure to make such claim within the stated period
or prior to the alteration of Products shall constitute an irrevocable
acceptance of the Products and deemed conforming without return
privileges.
Section
3.8 Pricing
Pricing
shall be based on a cost plus model.
ARTICLE
4 WARRANTIES AND LIMITATIONS
Section
4.1 Warranties
UNLESS
OTHERWISE AGREED IN WRITING, THE WARRANTY (INCLUDING THE REMEDY FOR BREACH
THEREOF) ON A PRODUCT PURCHASED BY DISTRIBUTOR, THAT IS SOLD WITH WRITTEN
DOCUMENTATION DELIVERED WITH THE PRODUCT THAT INCLUDES A SPECIFIC WARRANTY SHALL
BE THE WARRANTY STATED THEREIN, AND, IF THERE IS NO DOCUMENTATION OR NO SPECIFIC
WARRANTY WITHIN THE DOCUMENTATION DELIVERED WITH THE PRODUCT, SHALL BE THE
PUBLICLY PUBLISHED WARRANTY SET FORTH FOR THE PRODUCT IN THE COMPANY CATALOG OR
WEBSITE IN EFFECT AT THE TIME OF THE SALE OR AS OTHERWISE IDENTIFIED IN THIS
AGREEMENT OR THE SCHEDULES. ALL OTHER WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE AND MERCHANTABILITY,
ARE EXCLUDED.
Distributor
Agreement – Page 9
Section
4.2 Limitations of Liability
COMPANY
SHALL NOT BE LIABLE TO DISTRIBUTOR (OR ANYONE CLAIMING THROUGH DISTRIBUTOR) FOR
DAMAGES FOR INTERRUPTION OF BUSINESS, OR INDIRECT, SPECIAL, PUNITIVE,
INCIDENTAL, OR CONSEQUENTIAL DAMAGES OF ANY KIND (INCLUDING LOST
PROFITS). THIS EXCLUSION APPLIES REGARDLESS OF WHETHER THE ACTION
LIES IN CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT PRODUCT LIABILITY OR ANY
OTHER FORM. IT APPLIES TO ANY CLAIM RELATED TO ANY DEGREE TO THIS
AGREEMENT AND TO ANY CLAIM RELATED TO THE SALE OR PURCHASE OF A SPECIFIC PRODUCT
OR SERVICE FROM COMPANY, AND APPLIES EVEN IF COMPANY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES. COMPANY SHALL IN NO CASE BE LIABLE TO
DISTRIBUTOR (OR ANYONE CLAIMING THROUGH DISTRIBUTOR) ON A CLAIM RELATED TO A
GIVEN PRODUCT OR SERVICE IN EXCESS OF THE AMOUNT ACTUALLY PAID BY DISTRIBUTOR
FOR THAT PRODUCT, OR ON ANY OTHER KIND OF CLAIM IN EXCESS OF THE AMOUNT PAID BY
DISTRIBUTOR TO COMPANY FOR THE SIX MONTHS PRIOR TO OCCURRENCE OF THE LAST EVENT
WHICH GAVE RISE TO THE CLAIM.
Section
4.3 Indemnification
Distributor
agrees to defend, indemnify and hold Company, its affiliates and their
respective employees, officers, directors and stockholders harmless from and
against any and all damages claimed by a third party as a result of actions by
Distributor in violation of this Agreement. Distributor agrees to
defend, indemnify and hold Company, its affiliates and their respective
employees, officers, directors and stockholders harmless from and against any
and all damages for damages to property, bodily injury, death, or other injuries
arising from the negligence or misconduct of Distributor or any person for whom
Distributor is legally responsible, or has apparent responsibility, relating to
the storage, handling, or sale of any of the Products, or
otherwise. Company agrees to defend, indemnify and hold Distributor,
its affiliates and their respective employees, officers, directors and
stockholders harmless from and against any and all damages arising from a claim
of infringement of a United States patent, trademark, or copyright arising from
the authorized sale by Distributor of one or more Products. The party
seeking indemnification in any case shall promptly give written notice to the
other of the claim for which indemnification is sought and shall cooperate with
the other party in the defense of such an action or suit. The failure
to give or delay in giving any such notice shall not limit the indemnifying
party’s rights hereunder except to the extent it is prejudiced
thereby. The indemnifying party shall have the right, at its expense,
to direct any such legal proceeding and the negotiation and settlement of any
such claim or demand. The indemnifying party shall have no liability
for any settlement made without its consent or for any fees or expenses incurred
by the other party after the indemnifying party begins directing the legal
proceeding.
ARTICLE
5 MISCELLANEOUS
Section
5.1 Independent Contractor; No Property Rights
Distributor
is not an agent, representative, partner, fiduciary or franchisee of Company and
has no right to sell franchises or to become a franchisee under the laws of any
state. Nothing in this Agreement or any other agreement between the
parties or in the course of business or course of performance between the
parties shall make either party a representative, agent, joint venture, partner,
fiduciary or franchisee of the other. It is not intended by the
Parties, and this Agreement shall not be deemed to confer any property or other
rights onto Distributor beyond the terms contained
herein. Distributor shall not make any statements or representations
to the contrary. No party shall have any authority to legally bind
the other in any way whatsoever. In all of their respective
performance hereunder, the parties are acting solely as independent
contractors.
Distributor
Agreement – Page 10
Section
5.2 Inspections & Audits
Company
shall have the right within twenty-four (24) hours of Company’s request during
normal business hours to inspect the Products in Distributor’s inventory, and to
inspect and audit (i) Distributor’s storage and handling procedures, (ii)
Distributor’s purchasing and sales records and other books and records, (iii)
Distributor’s, warranty (and post-warranty if applicable) and other contracts
and records regarding the Products, and (iv) Distributor’s documentation and
procedures relating to information supplied by it to Company for purposes of any
discount program or otherwise, all to determine Distributor’s compliance with
this Agreement and with Company Policies and requirements. Company
shall be responsible for all third-party costs in conducting such
audits. Otherwise, each party shall bear their
respective internal administrative time and related internal
costs incurred in connection with such inspections. Distributor shall
maintain its books and records necessary to verify such compliance for no less
than seven years. Such audit shall be conducted with reasonable
notice during normal business hours and may be conducted by Company personnel or
by independent agents selected by Company. Following completion of
the audit, Company may deduct from any credits due to Distributor the amount
determined by the audit to be owed by Distributor to Company, along with
interest on such amounts at the rate identified herein. If
insufficient credits exist to cover the deduction or Company elects not to
deduct from credits, Distributor shall promptly transfer to Company funds
necessary to cover the amount owed to Company and make Company whole.
Distributor
and Company shall reconcile account receivables and inventory accounts monthly
or at time increments to be mutually agreed upon.
Section
5.3 Assignment and Transfer of Control
Distributor
may not assign or delegate, or permit the assignment or delegation of this
Agreement, in whole or in part, may not accept assignment or delegation by
another authorized Company Distributor of its Distributor agreement to
Distributor, and may not acquire authorized shipment points of another
authorized Company Distributor without the express written consent of
Company. Company has complete discretion regarding the criteria and
terms and conditions under which Company may permit assignment of this
Agreement, or permit another authorized Company Distributor to assign its
Distributor agreement to Distributor, or permit the transfer of authorized
shipment points from another authorized Company Distributor.
Section
5.4 Insurance
Distributor
shall procure and maintain in force at its expense during the term of the
Distributor Agreement a comprehensive general liability insurance policy with a
limit of not less than ********** inclusive per occurrence and an aggregate
liability limit of not less than **********. Such policy shall not be
canceled without at least thirty (30) days prior notice to
Company. Distributor shall, on request, provide a certificate of such
coverage to Company and shall name Company as an additional insured under this
policy.
**********THESE
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
Distributor
Agreement – Page 11
Section
5.5 Taxes
Sales,
use, property and other taxes measured by sales, receipts or otherwise due as a
result of, or in
connection
with, the sale, license, or transfer of the Products are not included in the
prices on Company’s pricing, and shall be the responsibility of Distributor for
the purchase of such Products. Where applicable, such taxes will be
billed unless a valid exemption certificate is furnished. Taxes will
be billed on the full price of the items purchased, i.e., the amount prior to
discounts due to trade-ins, credits, etc. Where a valid exemption
certificate is furnished, tax will not be billed unless Company can determine
that the purchase will be used in a taxable manner. Omission of tax
should not be construed as a basis for exemption. If items purchased
are used in a taxable manner, and no tax is billed by Company, Distributor is
required to remit applicable taxes directly to the taxing
authorities. Distributor shall pay all applicable state and local
taxes and all shipping and handling charges. Distributor shall
promptly reimburse Company for any such charges paid by
Company. Distributor will be responsible for collecting any taxes due
resulting from the re-sale of Product to its end-user customers.
ARTICLE
6 ITEMS OF LAW
Section
6.1 Construction & Interpretation
This
Agreement, together with the attached Schedules, contains the entire agreement
between Company and Distributor with respect to the subject
matter. All prior oral and written arrangements, understandings,
discussions, representations, demonstrations, negotiations, and correspondence
are merged into and superseded by this Agreement. If any provision of
this Agreement is held to be illegal or invalid or unenforceable by any court or
arbitrator of competent jurisdiction, such provision shall be deemed severed and
deleted, without affecting the validity of the remaining provisions of this
Agreement. The failure of any party at any time to require
performance by any other party of any provision of this Agreement shall not
affect in any way the full right to require such performance at any time
thereafter, nor shall the waiver by any party of the breach of any provision
hereof be held to be a waiver of the provision itself. All titles and
captions, as well as the Table of Contents hereto, are for convenience only and
are not to be used in interpretation or construction of this
Agreement. The terms and conditions of this Agreement shall extend
to, and inure to the benefit of, and be binding upon the respective permitted
successors and assigns of the parties, including shareholders in
liquidation.
Section
6.2 Law & Disputes
This
Agreement shall be deemed to have been entered into and executed in Georgia and
shall be construed, interpreted, performed, and enforced in all respects
(including choice of law principles) in accordance with the laws of
Georgia. Any legal proceedings relating in any manner to this
Agreement or the relationship between the parties shall be brought in Atlanta,
Georgia. Distributor irrevocably waives any objection which it may
now or hereafter have to such venue, and further irrevocably waives any claim
that any such proceedings are in an inconvenient forum. If Company
places Distributor’s account in the hands of an agency or attorney for
collection, Distributor will be responsible for the expenses, fees, and costs of
collection, including, without limitation, agency and attorney fees and court
costs incurred to the extent permitted by law. In the event of a
breach of any provision in ARTICLE 2, Section 5.2 (Inspections and Audits), or
Section 1.2(1)(h) (Representations of Warranties) by a party, the other party
shall, in addition to any other remedies available under this Agreement or in
law or equity, be entitled to obtain injunctive relief to require compliance,
and costs incurred in obtaining such injunctive relief, and such damages as a
court of competent jurisdiction shall award. EACH PARTY WAIVES ITS
RIGHT TO TRIAL BY JURY.
Section
6.3 Notices
All
notices required by this Agreement shall be in writing and be sent (i) by
certified mail, return receipt requested; (ii) by hand; or (iii) by a nationally
recognized overnight courier service. A notice shall be effective
upon receipt. A party may change the addresses for notice to it by
written notice in compliance with this paragraph. Notices shall be
sent to the following addresses as appropriate:
Distributor
Agreement – Page 12
To
Distributor:
«
Centrotrade Minerals & Metals, Inc »
1317
Executive Boulevard, Suite 120
Chesapeake,
VA 23320
To
Company:
Vystar
Corporation
3235
Satellite Blvd
Bldg.
400, Suite 290
Duluth,
GA 30096
Section
6.4 Force Majeure
Force
Majeure is defined as any circumstance beyond the reasonable control of the
party including, without limitation, fire, explosion, or other casualty, power
failure, acts of God, war, revolution, civil commotion, or acts of public
enemies, any law, order, regulation, ordinance, or requirement of any government
or legal body or any representative of any such government or legal body, or
labor unrest including without limitation, strikes, slowdowns, picketing or
boycotts. If either party’s performance under this Agreement is
interfered with by reason of a Force Majeure, that party shall be excused from
such performance on a day-to-day basis; the excusal shall not apply to
Distributor’s obligation to make payment for sums due.
Section
6.5 Counterparts
This
Agreement may be executed in one or more identical counterparts, and shall
become effective when one or more identical counterparts have been signed by
each of the parties.
IN
WITNESS WHEREOF, this Agreement is made and entered into as of the day and year
first above written. The person signing this Agreement on behalf of
Distributor personally warrants that he or she has authority to sign this
Agreement and bind Distributor to observe and perform as required by this
Agreement.
Distributor
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Centrotrade
Minerals & Metals, Inc
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By:
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Print
Name: ____________________________________________
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Title:
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Date:
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Centrotrade
Deutschland GmbH
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By:
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(Signature)
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Name:
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(Print)
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Title:
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Distributor
Agreement – Page 13
Company:
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VYSTAR
CORPORATION
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By:
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Print
Name:
___________________________________________________
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Title:
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Distributor
Agreement – Page 14
SCHEDULES
Distributor
Agreement – Page 15
SCHEDULE
A – TERRITORIES
**********
Canada
United States of America & its
Territories
Mexico
To
determine where a shipment or sale is located – ********** – the location of the
sale shall be determined by the manufacturing location or “ship-to” location for
that sale.
**********
Vystar sales to and by
those companies with whom Vystar has a relationship existing as of the Effective
Date of the Agreement, Revertex Malaysia and its corporate affiliates who shall
have authorization to sell any Revertex-manufactured pre-vulcanized version of
Vytex Products worldwide, and any others as may be directed by
Company with notice to Distributor.
**********
Rest of
World
Distributor
Authorized Signatures
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CENTROTRADE
MINERALS & METALS, INC
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CENTROTRADE
DEUTSCHLAND GMBH
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Company
Authorized
Signature
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**********THESE
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
Distributor
Agreement – Page 16
SCHEDULE
B – Trademark Usage Guidelines
Distributor
shall place the following trademark label on all packaging and/or bills of
lading shipping the Vytex™ NRL. The size of this label shall be appropriate for
the size of the packaging. For example, for sample-sized shipments,
the label shall be no smaller than 4 inches by 6 inches. For 55
gallon drum-sized shipments, the Vytex label shall be no smaller than 8 inches
by 12 inches. Vystar shall provide Distributor with the graphics for
such labeling.
If the
Vytex order is in a larger sized vessel than a 55-gallon drum, the Vytex label
shall be placed on the bill of lading accompanying that shipment. The
Vytex trademark label on the bills of lading shall be no smaller than 2 inches
by 3 inches.
Distributor
shall also comply with the following additional usage requirements:
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1.
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The
Vytex logo must be present on all Vytex NRL products and
samples.
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2.
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Distributor
must not obstruct the Vytex logo by placing any other elements either on
or too close to the logo.
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3.
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The
Vytex oval shape must not be used as a decorative
element.
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4.
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Distributor
must not add any trademark symbol to any of the Vytex or other Vystar
products or in conjunction with the Vytex or Vystar logos that do not
already appear there from Vystar.
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5.
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Distributor
may only use the Vystar and Vytex logo or oval symbol in connection with
the packing and shipping of Vytex consistent with the terms in this
Manufacturing Agreement.
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Distributor
may use the Vystar and Vytex trademarks only as provided for herein unless
expressly approved in writing by Vystar.
The
following is the Vytex logo.
Vytex™
and related marks are trademarks of Vystar Corporation, Duluth, Ga
The
following is the Vytex logo as it should be used on product
labeling.
SCHEDULE
C – Shipping, Storage & Handling
Requirements
1.
Vytex NRL has colloidal
behavior similar to normal NR centrifuged latex concentrates. It can
be adversely affected if the Vytex NRL is exposed to extreme temperatures,
excessive shear and chemical contamination. Vytex NRL should be
stored under a covered roof and away from exposure to direct
sunlight.
2. Temperature
Vytex NRL
should be stored at a storage temperature between 10 to 30
°
C. Excess heat
increases the Brownian motion and could result in microcoagulum and coagulum due
to particle agglomeration. Additionally, heat evaporates water and
the ammonia in Vytex NRL which would result in a drop in pH that could
potentially lead to Vytex NRL destabilization.
3.
Mechanical Shear
Vytex NRL is
a colloidally stable compound largely due to the removal of species vulnerable
to free radical breakdown. The stability of Vytex NRL can be overcome
if product is subjected to excessive mechanical shear. When handling
Vytex NRL, gravity feed should be used. When gravity feed is not
applicable, single or double diaphragm pumps which produce the lowest level of
shear are to be used. Rotor/stator shear or piston pumps must be avoided. Where
pump facilities are not available, the practice of using compressed air applied
to the barrel is sometimes resorted to. This is a potential safety hazard as the
plastic barrels or totes used to supply the latex can on occasion
rupture.
4.
Chemical
Destabilization of
Vytex NRL would result when the latex is exposed to calcium and magnesium ions
commonly found in hard water. Deionised (DI) ammoniated water should
be used when diluting Vytex NRL. DI ammoniated water is to be used when
compounding Vytex NRL.
5. Shelf Life
Vytex
NRL has a shelf life of 6 months when kept away from extreme
temperatures. As previously recorded, the optimum storage temperature
is 10 to 30
°
C.
Excessive loss of ammonia can occur during storage and possibly lead to
destabilization of Vytex NRL. The pH should be monitored and if the
pH drops below 10.0, it should be adjusted to 10.5 with an approved ammonia
hydroxide solution.
6. Drum Storage
Vytex NRL should be stored and transported in 200Kg/205 litre metal
(Bitumen or Epoxy coated) or plastic barrels which are with a mouth for filling
and removal of contents. Drums should be agitated by rolling or with
a collapsible stirrer before drawing samples or before use. For drums
being rolled, 20 minutes every 3 to 4 days is optimum.
7. Storage Tanks
Vytex NRL should be stored in tanks made from mild steel (MS), stainless
steel (SS) or glass fiber reinforced plastics (FRP). Vytex NRL stored
in mild steel tanks, the MS tanks must be given a protective coating to prevent
corrosion and contamination of Vytex NRL. Paraffin wax and epoxy
resin based coating materials could both be used. Prior to coating,
the tank surface must be cleaned (if possible sand blasted), dry and free of
scale to prevent the lining from lifting.
8. Storage Tank Cleaning
Vytex storage tanks must be cleaned regularly and
disinfected. Disinfection is done on the storage tanks twice a year.
30% Formaldehyde solution is used as a disinfectant. If its use is not
permitted, sodium hypochlorite can be used or any other permitted bactericide.
The solution is left for 12-16 hours, removed and the tank must be cleaned with
ammoniated DI water to remove all traces of the disinfectant.
SCHEDULE D – “End
User License Form”
The attached form shall be used to convey
the use, manufacturing and sales license for all end-customers of Products sold
by Distributor and its subcontractor distributors.
Vystar
Corporation
VYTEX™
NRL
MANUFACTURER
SALES & LICENSE AGREEMENT
As a
condition precedent to receiving the Vytex natural rubber latex (“NRL”), the
Customer (hereinafter referred to as “Customer” “You” or “Your”) expressly and
implicitly agrees to the following terms and conditions for receipt, use and
further processing using the Vytex™ NRL (“Agreement”). This Agreement
is made effective as of the date of Your receipt of the Vytex (“Effective Date”)
and shall constitute a binding contract between you and Vystar Corporation, a
Georgia corporation with its principal place of business at 3235 Satellite
Blvd., Bldg 400, Suite 290, Duluth, GA 30096 (“Vystar” “Company” or
“Our”). The parties hereto may be referred to individually as
“Party” or collectively as “Parties.”
1.
Scope and
Purpose.
The exclusive purpose for Your purchase
of Vytex in its various forms (“Product”) is for further processing and/or
manufacturing the Vytex NRL to create end product(s) for the exclusive purpose
of sales and distribution of the end product(s) made with Vytex.
2. Limited
License; Ownership.
(a)
Subject to the terms of
this Agreement, Company grants to Customer, and Customer accepts a
non-transferable, non-exclusive, terminable license (i) to use the Vytex NRL
only for the further processing and/or manufacturing of Vytex as a raw material
to create an end product for Your sales and distribution, and (ii) to use any
Documentation that may be provided by Company in connection with Customer’s use
of the Vytex NRL in accordance with this Agreement. Customer shall
not cause, suffer or permit the modification, alteration, reverse engineering,
decompilation or creation of derivative works using the Vytex NRL in any way or
on any portion thereof beyond your standard compounding, processing and/or
manufacturing processes in the ordinary course of your business. Any
derivative works, or other changes to the Vytex NRL shall be the sole and
exclusive property of Company.
(b)
Customer agrees that, except for the license rights granted in this Agreement,
nothing in this Agreement gives Customer any right, title or interest in, to or
under any Vytex NRL or Documentation or any intellectual property rights
therein, and further agrees that the foregoing are the sole and exclusive
property of Company.
(c) Customer shall not, and shall not
permit its employees, representatives or agents to (i) move, sell, assign,
lease, sublet, sublicense, transfer, pledge, transmit, display or disclose or
make available to any third party the Vytex NRL or allow any third party to use
any of the Vytex NRL or the Documentation, except as specifically permitted
pursuant to this Agreement, or, (ii) copy or otherwise reproduce the
Documentation (or any portion thereof) except as necessary for Customer's use,
in accordance with the terms and conditions of this Agreement. Each
such copy, whether complete or partial, shall bear the same copyright notices
and restrictive legends, if any, as are included in the material delivered to
Customer. All copies shall be the sole and exclusive property of
Company and shall be subject to the terms and conditions of this
Agreement.
3. Labeling
& Trademarks
. With labels, packaging
and/or other collateral of sizes at least 1 inch by 1 inch, Customer must
include the Vytex logo according to the Trademark and Labeling Use Requirements
contained in Attachment 1 to this Agreement. Company hereby grants to
Customer a non-exclusive, limited, non-transferable, terminable license to use
the Company trademarks, both the name and the stylized form as used by the
Company from time to time, and the applicable Product trademarks (collectively,
the “Trademarks”) solely in connection with the advertising, promotion and
repackaging of the Products. Customer’s use shall be strictly in accordance with
Company’s policies regarding advertising, labeling and trademark usage, attached
hereto as Attachment 1, and all uses shall inure to the benefit of
Company. Company shall have the right to monitor the quality of the
Products and all uses of Trademarks by Customer, and my revoke Customer’s
license at any time in Company’s sole discretion if Company believes Customer
has violated this provision.
Except to
the extent set forth above in this paragraph regarding the right and license to
“use” Company trademarks, Customer shall have no right whatsoever in or to any
trademark, trade name, or copyright of Company. Customer shall not
misuse, alter, remove, obliterate, deface, change, replace, or apply any
labeling or trademark, copyright or other
proprietary notices
including any patent, trademark, copyright or other proprietary notice of
Company used on or in connection with Products,
documentation and other
related materials supplied to Customer under this
Agreement. Failure
of
Customer to comply
with any provision of this paragraph is grounds for immediate termination of
this Agreement.
4.
Confidentiality
;
Nondisclosure
.
Customer acknowledges the
proprietary rights of Company in and to the Vytex NRL, the Documentation, and
the trademarks, identifying symbols and other supporting material. This
Agreement creates a confidential relationship between the parties, based upon
which Company is willing to grant the above license, and provide certain
proprietary information and knowledge to Customer. Customer
acknowledges and agrees that the use and further processing of the Vytex is
furnished to Customer for the sole and exclusive use of
Customer. Except as specifically agreed to in this Agreement,
Customer will not use, publish, disclose or otherwise divulge to any person,
except as necessary to officers and employees of Customer, at any time, either
during or after the termination of this Agreement, or permit its officers or
employees to so divulge any such information regarding the Vytex NRL, without
the prior written consent of an officer of Company. The provisions in this
paragraph shall survive termination or expiration of this
Agreement.
5. Infringement
Indemnification.
Company shall defend and indemnify and hold
Customer harmless against any action brought against Customer to the extent that
it is based on a claim that Vytex NRL, properly used within the scope of this
Agreement, infringes a United States patent or copyright, provided Customer
notifies Company promptly in writing of the action and gives Company the sole
control of the defense, all negotiations and any settlement. If Vytex
NRL becomes, or is likely to become, the subject of an infringement claim,
Company may, at its option, secure Customer’s right to continue using the Vytex
NRL or replace or modify it to make it non-infringing with substantially similar
functions and levels of performance. If neither of these alternatives
is reasonable available, Company may terminate this Agreement. THIS
PARAGRAPH STATES THE ENTIRE RESPONSIBILITY OF COMPANY CONCERNING PATENT,
COPYRIGHT OR OTHER PROPRIETARY RIGHT INFRINGEMENT.
6.
Entire Understanding & Future
Orders.
This Agreement (inclusive of any Attachments hereto
which are all incorporated herein by reference) constitutes the entire agreement
and sets forth the entire understanding between the Parties hereto with respect
to the subject matter hereof and supersedes all prior agreements, covenants,
arrangements, discussions and negotiations with respect thereto. Any
conflicting terms or conditions set forth in any purchase order or
acknowledgment shall have no force or effect, notwithstanding Company’s or other
third party’s acceptance of the order. No modification, waiver or amendment of
this Agreement shall be effective unless it is in writing and signed by an
authorized signatory of Company and Customer. This Agreement shall
also apply to all future deliveries, purchases, orders and all other relations
between the parties with respect to the subject matter hereof which may occur
during the next five (5) years from the effective date of this Agreement, unless
the Parties agree to and execute a separate agreement.
7.
Governing Law.
This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of Georgia without the application of the conflict of laws
principles. Any legal action or proceeding with respect to this
Agreement shall be brought and maintained in the state or federal courts located
in the city of Atlanta or County of Gwinnett, and, by execution and delivery of
this Agreement, each Party hereby accepts for itself and in respect of its
property, generally and unconditionally the jurisdiction of the aforesaid
courts. Each Party further irrevocably consents to the service of
process out of any of the aforementioned courts in any such action or
proceeding.
8.
LIMITED WARRANTY/LIMITED LIABILITY.
No warranties, whether express, implied or statutory, are made with respect to
the Products except as expressly set forth in this Section.
So long as
Customer complies with the Shipping, Storage and Handling Requirements
identified in Attachment 2 to this Agreement, for six (6) months from the date
of manufacturer, Company warrants that the Vytex NRL will conform substantially
to the specifications set forth in the certificate of analysis (“COA”) provided
by Company to Customer with the Vytex NRL shipment. Company’s sole
obligation under this warranty shall be limited to replacing the Vytex NRL,
without charge, during Company’s normal production and delivery schedule;
provided the Vytex NRL has been inspected and rejected prior to accepting the
Vytex NRL as provided in the Acceptance and Return provision stated herein.
Excluded Items
:
This warranty does not cover circumstances beyond Company’s reasonable control
(including but not limited to Customer and/or Customer handling, storage and
transportation conditions and treatment or acts of God). All warranties and
obligations of Company shall terminate if Customer fails to perform its
obligations under this or any other agreement between the parties or fails to
pay any charge otherwise due Company.
THE WARRANTIES EXPRESSLY SET FORTH IN
THIS SECTION ARE EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES, WHETHER EXPRESS,
IMPLIED OR STATUTORY, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT
WILL COMPANY BE LIABLE FOR: (1) LOST PROFITS OR LOST USE, OR ANY OTHER
INCIDENTAL OR CONSEQUENTIAL DAMAGES, OR FOR ANY INDIRECT, SPECIAL, OR PUNITIVE
DAMAGES REGARDLESS OF THE FORM OF ACTION, WHETHER CONTRACT, TORT (INCLUDING
NEGLIGENCE), STRICT PRODUCT LIABILITY OR OTHERWISE, EVEN IF CUSTOMER OR ANY
OTHER PERSON HAS ADVISED COMPANY OR ANY OF ITS SUPPLIERS OR LICENSEES OF THE
POSSIBILITY OF SUCH DAMAGES; (2) DAMAGE CAUSED BY CUSTOMER’S FAILURE TO PERFORM
ITS RESPONSIBILITIES UNDER THIS AGREEMENT; (3) ALTERATIONS DONE WITHOUT THE
PRIOR WRITTEN APPROVAL OF COMPANY; OR (4) USE OF VYTEX NRL IN A MANNER THAT IS
NOT AUTHORIZED BY THIS AGREEMENT. THE REMEDY OF CONSEQUENTIAL DAMAGES SHALL NOT
BE AVAILABLE EVEN IN THE EVENT THE SOLE AND EXCLUSIVE REMEDY OF REPLACEMENT
FAILS OF ITS ESSENTIAL PURPOSE.
9. Independent
Contractors.
The
relationship between Customer and Company is that of independent
contractors. Neither Party shall be deemed to be the agent, fiduciary
or legal representative of the other. Customer and Customer Coordinator shall
have no authority to make any representations, or to take any action, which
shall be binding upon Company except as is provided for herein or as is
otherwise authorized in writing by Company.
10.
Miscellaneous.
The
waiver or failure of either party to exercise in any respect any right provided
for herein shall not be deemed a waiver of any further right. Neither
party may assign or delegate any of its rights or obligations under this
Agreement without the prior written consent of the other; provided, however, the
sale of Company or the sale, assignment or other transfer of Company’s business
and/or assets will not be deemed an assignment or delegation. Any
provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.
11.
Company
Contact.
For any questions regarding the Vytex NRL sample or
Vystar, please contact the following: Sandra Parker, 3235 Satellite
Blvd, Bldg 400, Suite 290, Duluth, GA 30096, USA,
P: 001-770-965-0383, F: 001-770-965-0162,
E-mail: sparker@vytex.com.
Attachment
1
Trademarks
& Labeling
Customer
shall place the following trademark label on all packaging and/or bills of
lading shipping the Vytex™ NRL. The size of this label shall be appropriate for
the size of the packaging. For example, for sample-sized shipments,
the label shall be no smaller than 4 inches by 6 inches. For 55
gallon drum-sized shipments, the Vytex label shall be no smaller than 8 inches
by 12 inches. Vystar shall provide Customer with the graphics for
such labeling.
If the
Vytex order is in a larger sized vessel than a 55-gallon drum, the Vytex label
shall be placed on the bill of lading accompanying that shipment. The
Vytex trademark label on the bills of lading shall be no smaller than 2 inches
by 3 inches.
Customer
shall also comply with the following additional usage requirements:
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1.
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The
Vytex logo must be present on all Vytex NRL products and
samples.
|
|
2.
|
Distributor
must not obstruct the Vytex logo by placing any other elements either on
or too close to the logo.
|
|
3.
|
The
Vytex oval shape must not be used as a decorative
element.
|
|
4.
|
Customer
must not add any trademark symbol to any of the Vytex or other Vystar
products or in conjunction with the Vytex or Vystar logos that do not
already appear there from Vystar.
|
|
5.
|
Customer
may only use the Vystar and Vytex logo or oval symbol in connection with
the packing and shipping of Vytex consistent with the terms in this
Manufacturing Agreement.
|
Customer
may use the Vystar and Vytex trademarks only as provided for herein unless
expressly approved in writing by Vystar.
The
following is the Vytex logo.
Vytex™
and related marks are trademarks of Vystar Corporation, Duluth, Ga
The
following is the Vytex logo as it should be used on product
labeling.
Attachment
2
Shipping,
Storage & Handling Requirements
1.
Vytex NRL has colloidal
behavior similar to normal NR centrifuged latex concentrates. It can
be adversely affected if the Vytex NRL is exposed to extreme temperatures,
excessive shear and chemical contamination. Vytex NRL should be
stored under a covered roof and away from exposure to direct
sunlight.
2. Temperature
Vytex NRL is to
be stored at a storage temperature between 10 to 30
°
C. Excess heat
increases the Brownian motion and could result in microcoagulum and coagulum due
to particle agglomeration. Additionally, heat evaporates water and
the ammonia in Vytex NRL which would result in a drop in pH that could
potentially lead to Vytex NRL destabilization.
3.
Mechanical Shear
Vytex NRL is
a colloidally stable compound largely due to the removal of species vulnerable
to free radical breakdown. The stability of Vytex NRL can be overcome
if product is subjected to excessive mechanical shear. When handling
Vytex NRL, gravity feed should be used. When gravity feed is not
applicable, single or double diaphragm pumps which produce the lowest level of
shear are to be used. Rotor/stator shear or piston pumps must be avoided. Where
pump facilities are not available, the practice of using compressed air applied
to the barrel is sometimes resorted to. This is a potential safety hazard as the
plastic barrels or totes used to supply the latex can on occasion
rupture.
4.
Chemical
Destabilization of
Vytex NRL would result when the latex is exposed to calcium and magnesium ions
commonly found in hard water. Deionised (DI) ammoniated water should
be used when diluting Vytex NRL. DI ammoniated water is to be used when
compounding Vytex NRL.
5. Shelf Life
Vytex
NRL has a shelf life of 6 months when kept away from extreme
temperatures. As previously recorded, the optimum storage temperature
is 10 to 30
°
C.
Excessive loss of ammonia can occur during storage and possibly lead to
destabilization of Vytex NRL. The pH should be monitored and if the
pH drops below 10.0, it should be adjusted to 10.5 with an approved ammonia
hydroxide solution.
6. Drum Storage
Vytex NRL should be stored and transported in 200Kg/205 litre metal
(Bitumen or Epoxy coated) or plastic barrels which are with a mouth for filling
and removal of contents. Drums should be agitated by rolling or with
a collapsible stirrer before drawing samples or before use. For drums
being rolled, 20 minutes every 3 to 4 days is optimum.
7. Storage Tanks
Vytex NRL should be stored in tanks made from mild steel (MS), stainless
steel (SS) or glass fiber reinforced plastics (FRP). Vytex NRL stored
in mild steel tanks, the MS tanks must be given a protective coating to prevent
corrosion and contamination of Vytex NRL. Paraffin wax and epoxy
resin based coating materials could both be used. Prior to coating,
the tank surface must be cleaned (if possible sand blasted), dry and free of
scale to prevent the lining from lifting.
8. Storage Tank Cleaning
Vytex storage tanks must be cleaned regularly and
disinfected. Disinfection is done on the storage tanks twice a year.
30% Formaldehyde solution is used as a disinfectant. If its use is not
permitted, sodium hypochlorite can be used or any other permitted bactericide.
The solution is left for 12-16 hours, removed and the tank must be cleaned with
ammoniated DI water to remove all traces of the disinfectant.
SCHEDULE
E - Sampling Agreement
Vystar
Corporation
VYTEX™
NRL
SAMPLING
USER LICENSE AGREEMENT
As a
condition precedent to receiving the enclosed sample of Vytex natural rubber
latex (“NRL”), the Evaluator
(
hereinafter referred
to as “Evaluator” “You” or “Your”) expressly and implicitly agrees to the
following terms and conditions for receipt and use of the enclosed Vytex NRL™
sample (“Agreement”). This Agreement shall constitute a binding
contract between you and Vystar Corporation, a Georgia corporation with its
principal place of business at 3235 Satellite Blvd., Bldg 400, Suite 290,
Duluth, GA 30096 (“Vystar” “Company” or “Our”). The parties
hereto may be referred to individually as “Party” or collectively as
“Parties.” In consideration of the mutual benefits described in this
Agreement, Vystar is pleased to allow Evaluator to use and evaluate Company’s
proprietary, low-protein, natural rubber latex, Vytex NRL, solely
under circumstances described herein.
1.
Scope and
Purpose.
The exclusive purpose of this evaluation
is for further processing or manufacturing the Vytex NRL to create end
product(s) for the sole and exclusive purpose of evaluating the Vytex NRL in
terms its (i) reliability and ease of use; (ii) low protein result
after processing and/or manufacturing with Vytex NRL; (iii) clarity, composition
and other physical properties of end product(s) made with Vytex NRL; and (iv)
general quality of end product(s) made with Vytex NRL (“Assessment
Metrics”).
2.
Limited
License.
Subject to the terms of this Agreement, Company
grants to Evaluator, and Evaluator accepts a non-transferable, non-exclusive,
terminable license (i) to use the Vytex NRL only for performance, and (ii) to
use any Documentation that may be provided by Company in connection with
Evaluator’s use of the Vytex NRL in accordance with this
Agreement. Evaluator shall not cause, suffer or permit the
modification, alteration, disassembly, reverse engineering or decompilation of
or creation of derivative works using the Vytex NRL in any way or on any portion
thereof beyond your standard compounding, processing and/or manufacturing
processes in the ordinary course of your business. Any derivative
works, or other changes to the Vytex NRL whether authorized or unauthorized
shall be the sole and exclusive property of Company.
3.
Future
Releases.
Evaluator acknowledges that: (a) the Vytex NRL may
not be in the form of subsequent releases and may contain different levels of
proteins or have different characteristics within batches; and (b) Company
reserves the right, in its sole and absolute discretion, to alter prices,
features, specifications, capabilities, functions, licensing terms, release
dates, general availability or other characteristics of the Vytex
NRL.
4.
Evaluation.
Evaluator shall undertake the testing and evaluation of Vytex NRL as described
above. Evaluator shall test, gather and record all data required for
the Assessment Metrics. Evaluator shall submit to Company or the
Company-authorized distributor from whom Evaluator received the Vytex NRL
sample, a brief final report including the Assessment Metrics data,
study results, test data, supporting data, etc., but only those which represent
the physical attributes of the end products, and which are not proprietary or
confidential to Evaluator (“Evaluation Records”).
5. Ownership
and Prohibition on Releasing or Distributing.
(a) Evaluator
agrees that, except for the license rights granted in this Agreement, nothing in
this Agreement gives Evaluator any right, title or interest in, to or under any
Vytex NRL or Documentation or any intellectual property rights therein, and
further agrees that the foregoing are the sole and exclusive property of
Company.
(b) Evaluator
shall not, and shall not permit its employees, representatives or agents to (i)
move, sell, assign, lease, sublet, sublicense, transfer, pledge, transmit,
display or disclose or make available to any third party the Vytex NRL sample or
any product made with the Vytex NRL sample, or allow any third party to use any
of the Vytex NRL or the Documentation, except as specifically permitted pursuant
to this Agreement, or, (ii) copy or otherwise reproduce the Documentation (or
any portion thereof) except as necessary for Evaluator's use, in accordance with
the terms and conditions of this Agreement. Each such copy, whether
complete or partial, shall bear the same copyright notices and restrictive
legends, if any, as are included in the material delivered to
Evaluator. All copies shall be the sole and exclusive property of
Company and shall be subject to the terms and conditions of this
Agreement.
(c) In
the event that Evaluator desires to sell, market or distribute any Vytex NRL or
any product made with Vytex NRL, Evaluator shall enter into a separate agreement
with either Company or a Company-authorized distributor describing the terms for
such (“Definitive Agreement”).
6.
Publication.
Evaluator
shall not issue any press release or otherwise make any public announcement or
disclosure regarding this Agreement, Vystar or Vytex NRL without the express
written consent of the Company prior to executing a Definitive Agreement for the
sales and/or licensing of Vytex NRL.
7.
Infringement
Indemnification.
Company shall defend and indemnify and hold
Evaluator harmless against any action brought against Evaluator to the extent
that it is based on a claim that Vytex NRL, properly used within the scope of
this Agreement, infringes a United States patent or copyright, provided
Evaluator notifies Company promptly in writing of the action and gives Company
the sole control of the defense, all negotiations and any
settlement. If Vytex NRL becomes, or is likely to become, the subject
of an infringement claim, Company may, at its option, secure Evaluator’s right
to continue using the Vytex NRL or replace or modify it to make it
non-infringing with substantially similar functions and levels of
performance. If neither of these alternatives is reasonable
available, Company may terminate this Agreement. THIS PARAGRAPH
STATES THE ENTIRE RESPONSIBILITY OF COMPANY CONCERNING PATENT, COPYRIGHT OR
OTHER PROPRIETARY RIGHT INFRINGEMENT.
8.
Entire
Understanding.
This Agreement and the Confidentiality and/or
Non-Disclosure Agreement executed between the Parties (inclusive of any
Schedules and Attachments hereto which are all incorporated herein by reference)
constitutes the entire agreement and sets forth the entire understanding between
the Parties hereto with respect to the subject matter hereof and supersedes all
prior agreements, covenants, arrangements, discussions and negotiations with
respect thereto. No modification, waiver or amendment of this
Agreement shall be effective unless it is in writing and signed by an authorized
signatory of Company and Evaluator. The waiver or failure of either
Party to exercise in any respect any right provided for in this Agreement shall
not be deemed a waiver of any further right.
9.
Governing Law.
This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of Georgia without the application of the conflict of laws
principles. Any legal action or proceeding with respect to this
Agreement shall be brought and maintained in the state or federal courts located
in the city of Atlanta or County of Gwinnett, and, by execution and delivery of
this Agreement, each Party hereby accepts for itself and in respect of its
property, generally and unconditionally the jurisdiction of the aforesaid
courts. Each Party further irrevocably consents to the service of
process out of any of the aforementioned courts in any such action or
proceeding.
10.
Disclaimer Of Any And All Warranties.
THE VYTEX NRL IS PROVIDED “AS IS” AND “WHERE IS,” WITH ANY FAULTS AND
WITHOUT WARRANTY OF ANY KIND. COMPANY MAKES NO REPRESENTATIONS ABOUT
THE SUITABILITY OF THE VYTEX NRL FOR EVALUATOR’S INTENDED REQUIREMENTS OR
PURPOSES. COMPANY DOES NOT WARRANT THAT THE VYTEX NRL WILL PERFORM AS DESIRED OR
WITH THE DESIRED RESULTS OR IS ERROR-FREE. COMPANY EXPRESSLY DISCLAIMS ALL
EXPRESS AND IMPLIED WARRANTIES, INCLUDING THE IMPLIED WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND
NONINFRINGEMENT.
11.
Limitation of
Liability.
IN NO EVENT WILL COMPANY BE LIABLE TO EVALUATOR OR
ANY THIRD PARTY ARISING OUT OF THE USE OF VYTEX NRL, OR ANY END PRODUCT MADE
WITH VYTEX NRL, REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, TORT
(INCLUDING NEGLIGENCE), STRICT PRODUCT LIABILITY OR OTHERWISE, EVEN IF EVALUATOR
OR ANY OTHER PERSON HAS ADVISED COMPANY OR ANY OF ITS LICENSORS OF THE
POSSIBILITY OF SUCH DAMAGES. COMPANY SHALL NOT UNDER ANY
CIRCUMSTANCES BE LIABLE TO EVALUATOR OR ANY OTHER PARTY FOR ANY SPECIAL,
INDIRECT, PUNITIVE OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING, WITHOUT
LIMITATION, DAMAGES FOR LOSS OF GOODWILL, WORK STOPPAGE, LOST PROFITS, LOST
PRODUCT OR LOST USE, FAILURE OR MALFUNCTION OR OTHER LOSS.
12.
Regulatory
Filings.
The Parties recognize that the information produced
hereunder may be used by Company for filings made with regulatory agencies.
Evaluator agrees to assist Company as reasonably necessary for any such
regulatory filings.
13. Independent
Contractors.
The
relationship between Evaluator and Company is that of independent
contractors. Neither Party shall be deemed to be the agent, fiduciary
or legal representative of the other. Evaluator and Evaluator Coordinator shall
have no authority to make any representations, or to take any action, which
shall be binding upon Company except as is provided for herein or as is
otherwise authorized in writing by Company.
14.
Company
Contact.
For any questions regarding the Vytex NRL sample or
Vystar, please contact the following: Sandra Parker, 3235 Satellite
Blvd, Bldg 400, Suite 290, Duluth, GA 30096, P: 770-965-0383,
F: 770-965-0162, E-mail: sparker@vytex.com.
EXECUTIVE
EMPLOYMENT AGREEMENT
THIS
EXECUTIVE EMPLOYMENT AGREEMENT
(“Agreement”) made and entered into on this 11
th
day of November,
2008 (the "Effective Date"), by and between Vystar Corporation, a Georgia
corporation (the "Company"), and William R. Doyle, a resident of the State
of
Georgia ("Employee").
In
consideration of the employment by the Company and of the compensation and
other
remuneration paid, and to be paid, by the Company and received by Employee
for
such employment, and for other good and valuable consideration, the receipt
and
sufficiency of which is hereby acknowledged by Employee, it is agreed by and
between the parties hereto as follows:
1.
Definitions.
For
purposes of this Agreement, the following terms shall have the meanings
specified below:
"
Business
"
- the
research, development, manufacturing, marketing, distribution, licensing and
offering of products, services and technologies offered by the Company as of
the
Effective Date and as may be offered by Company during the term of this
Agreement, including all renewals. Such products, services and technologies
include, but are not limited to, marketing, selling, distributing and developing
natural rubber latex (NRL) raw material and related products and services to
processors, manufacturers, distributors and other parties who use and/or
purchase NRL as a raw material and/or who manufacture products using NRL.
“Competitor”
-
means
any
Person (as defined herein) offering, selling, distributing, processing,
developing, licensing or manufacturing NRL and related products, services and
technologies to or for processors, manufacturers, distributors and other parties
who use, manufacture, process and/or purchase NRL raw material and/or who
manufacture end products using NRL raw materials or a synthetic alternative
to
NRL in competition with Company or any of its subsidiaries
.
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"
Confidential
Information
"
-
information relating to the operations, customers, or finances of
the
Company, or the Business, that derives value from not being generally
known to other Persons, including, but not limited to, technical
or
nontechnical data, formulas, patterns, compilations, programs, devices,
methods, techniques, drawings, processes, financial data, and lists
of or
identifying information about actual or potential customers or suppliers,
including all customer lists, whether or not reduced to writing,
certain
patented and unpatented information relating to the research and
development, manufacture or serving of the Company's products, information
concerning proposed new products, market feasibility studies and
proposed
or existing marketing techniques or plans, and all information defined
as
a “Trade Secret” pursuant to the Georgia Trade Secrets Act or otherwise by
Georgia law. Confidential Information also includes the same types
of
information relating to the operations, customers, finances, or Business
of any affiliate of the Company, if such information is learned by
Employee during the term of this Agreement or in connection with
Employee's performance of Services, as defined herein. Con-fidential
Information also includes information disclosed to the Company by
third
parties that the Company is obligated to maintain as confiden-tial.
Confidential Information may include information that is not a Trade
Secret, but Confiden-tial Information that is not also a Trade Secret
shall constitute Confidential Information only for five (5) years
after
the Termination Date. Confidential Information does not include
information generally available to the public through no violation
of a
confidentiality or non-disclosure obligation owed to
Company;
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"
Customer
"
-
any customer of the Company in the Territory that Employee, during
the
term of this Agreement, (i) provided goods or services to or solicited
on
behalf of the Company; or (ii) about whom Employee possesses Confidential
Information;
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"
Person
"
-
any individual, corporation, partnership, limited liability company,
association, municipality, government agency, government, unin-corporated
organization or other entity;
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"
Services
"
-
the duties and functions that Employee shall provide in the Territory
as
an employee of the Company and as further outlined on Exhibit
B;
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"
Termination
Date
"
-
the last day Employee is employed by the Com-pany, whether the termination
is voluntary or involuntary and whether with or without cause;
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“Territory”
- shall
be the geographic region in which Employee initially and/or within the last
eighteen (18) months during the term of this Agreement provides the Services.
Territory shall be more fully described in Exhibit B along with Employee’s
description of Services.
2.
Employment:
The
Company agrees to employ Employee and Employee agrees that Employee will devote
Employee’s full productive time, skill, energy, knowledge and best efforts
during the period of Employee’s employment to such duties as the Board of
Directors of the Company may reasonably assign to Employee, and Employee will
faithfully and diligently endeavor to the best of Employee’s ability to further
the best interest of the Company during the period of Employee’s employment.
However, Employee is not prohibited from making personal investments in any
other businesses, as long as those investments do not require Employee to
participate in the operation of the companies in which Employee invests and
such
other businesses are not in competition with the Company or any of its
subsidiaries (“Competitor”). Employee may invest in any publicly traded company
registered on a bona fide stock exchange without reservation.
3.
Terms
of Employment:
Employee's employment pursuant to this Agreement will begin on the
1
st
day of November, 2008, and will continue uninterrupted unless
terminated by either party pursuant to the Termination Section herein. This
Agreement shall supersede all terms of employment previously executed and
existing prior to the execution of this Agreement.
4.
Compensation:
On the
terms and subject to the conditions of this Agreement, (i) the Company will
pay
Employee a salary and a bonus determined in accordance with Exhibit A, (ii)
Employee will be entitled to participate in the Company’s 2004 Long-Term
Incentive Compensation Plan (“Stock Option Plan”), or such other employee stock
option plan as may be in effect from time to time, and (iii) the Company will
provide Employee with employee benefits consistent with those provided by the
Company to similarly situated executives. The employee benefits provided by
the
Company as of the date hereof shall also be distributed to Employee. The Company
reserves the sole and unilateral right to modify any and all employee benefits
at any time in its sole discretion.
5.
Title,
Duties and Conduct of Employee:
The
Employee’s initial title shall be President, Chief Executive Officer, and
Chairman of the Board, and shall report to the Board of Directors of Company.
Employee shall perform such duties and functions for the Company as shall be
specified from time to time by the Board of Directors of the Company, including,
but not limited to the duties and functions expressly set forth on Schedule
B,
and which are consistent therewith (“Services”).
a.
Disparagement.
Employee
shall not at any time make false, misleading or disparaging statements about
the
Company, including the Business, management, employees and/or
Customers.
b.
Prior
Agreements.
Employee
represents and warrants that Employee is not under any obligation, contractual
or otherwise, limiting, impairing or affecting Employee's performance of
Services. Upon execution of this Agreement, Employee shall give the Company
any
agreement with a prior employer or other Person purporting to limit or affect,
in any way, Employee's ability to work for the Company, to solicit customers
or
potential customers or employees or to use any type of information.
c.
Confidential
Information.
Employee
shall protect Confidential Information. Except as required in connection with
work for the Company, Employee will not use, disclose or give to others, during
or after Employee's employment, any Confidential Information.
d.
Compliance
with Company Policies and Laws.
At all
times while performing Services, Employee shall comply with all laws and
regulations applicable to Employee and/or Company. Employee shall at all times
comply with all Company policies and procedures. Failure to comply with this
Section shall be grounds for Termination For Cause, as described in Section
9
Term and Termination.
6.
Illness
or Incapacity:
Employee
is entitled to paid-time off and absence from Employee’s duties during regular
work hours for any reason for a total of four (4) weeks each calendar year
(“PTO”). If Employee cannot perform his/her duties because of major illness or
incapacity for more than a total of ninety (90) days in any year, the Company
may terminate this Agreement upon thirty (30) days' written notice to Employee.
Employee is not entitled to receive, and the Company shall not be required
to
pay, Employee's compensation hereunder for absences because of major illness
or
incapacity other than the total of ninety (90) days in each year granted to
Employee under this Section 6.
7.
Ownership
of Information
a.
Work
For Hire Acknowledgment; Assignment.
All
writings, draw-ings, photographs, tapes, recordings, strategies, formulas,
operating procedures, patents, product developments, computer programs and
other
works in any tangible medium of expression, regardless of the form of medium,
which have been or are prepared by Employee, or to which Employee contributes,
in connection with Employee's employ-ment by the Company, whether patented,
copyrighted, trademarked or otherwise (collectively the "Works") and all
copyrights, patents, trademarks and other rights in and to the Works, belong
solely, irrevocably and exclusively throughout the world to the Company as
works
made for hire. However, to the extent any court or agency should conclude that
the Works (or any of them) do not constitute or qualify as a "work made for
hire," Employee hereby assigns, grants and delivers, solely, irrevocably,
exclusively and throughout the world to the Company all ownership and other
rights to the Works. Employee also agrees to cooperate with the Company and
to
execute such other further grants and assignments of all rights as the Company
from time to time reasonably may request for the purpose of evidencing,
enforcing, filing, registering or defending its ownership of the Works and
the
copyrights in them, and Employee hereby irrevoca-bly constitutes and appoints
the Company as Employee's agent and attorney-in-fact, with full power of
substitu-tion, in Employee's name, place and stead, to execute and deliver
any
and all such assignments or other instruments which Employee shall fail or
refuse promptly to execute and deliver, this power and agency being coupled
with
an interest and being irrevo-cable. Without limiting the preceding provisions
of
this Paragraph 7(a), Employee agrees that the Company may edit and otherwise
modify, and use, publish and otherwise exploit, the Works in all media and
in
such manner as the Company, in its discretion, may determine.
b.
Inventions,
Ideas and Patents.
Employee
shall disclose promptly to the Company (which shall receive it in confidence),
and only to the Company, any invention or idea of Employee (developed alone
or
with others) conceived or made during Employee's employment by the Company
(or,
if related to the Business, during employment or within one year after the
Termination Date). Employee assigns to the Company any such invention or idea
in
any way connected with Employee's employment or related to the Business,
research or development of the Company, or demonstrably anticipated research
or
development of the Company, and will cooperate with the Company and sign all
papers deemed necessary by the Company to enable it to obtain, maintain, protect
and defend patents covering such inventions and ideas and to confirm the
exclusive ownership of the Company of all rights in such inventions, ideas
and
patents, and irrevoca-bly appoints the Company as its agent to execute and
deliver any assignments or documents Employee fails or refuses to execute and
deliver promptly, this power and agency being coupled with an interest and
being
irrevocable. This constitutes written notification to Employee that this
assignment does not apply to an invention for which no equipment, supplies,
facility or Trade Secret information of the Company or any Customer was used
and
which was developed entirely on Employee's own time, unless (a) the invention
relates (i) directly to the Business or (ii) to the actual or demonstrably
anticipated research or develop-ment of the Company, or (b) the invention
results from any work performed by Employee for the Company.
8.
Nonsolicitation;
Noncompetition
.
a.
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Non-Solicitation
of Customers.
During the term of this Agreement, and for one (1) year after the
Termination Date, Employee will not solicit Customers within the
Territory
for the purpose of providing products or services comparable to those
provided by the Business, except on behalf of the
Company.
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b.
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Non-Solicitation
of Company Employees.
During the term of this Agreement and for one (1) year after the
Termination Date, Employee will not solicit for employment with another
Person anyone who is an employee of the
Company.
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c.
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Non-Compete.
During the term of this Agreement and for one (1) year after the
Termination Date, Employee will not provide services substantially
similar
to Services within the Territory to any Competitor. Employee shall
be
prohibited from providing in the Territory in competition with the
Company
in accordance with the terms of this Agreement, including the Services
expressly set forth on Schedule B attached hereto. Employee acknowledges
that Employee has been informed of and discussed with the Company
the
specific activities that Employee will perform as Services and that
Employee understands the scope of the activities that constitute
Services
and the Territory under this Agreement. In exchange for entering
into this
noncompete during the one-year period after Termination of this Agreement,
Employee shall be compensated as described in Effect of Termination,
Section 9.c.
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d.
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Future
Employment Opportunities.
Prior to and for one (1) year after the Termination Date, Employee
shall
(a) provide any employer with a copy of this Agreement, and (b) upon
accepting any position, provide the Company with the employer's name
and a
description of the services, if any, Employee will provide for such
employer.
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9.
Termination
.
At all
times, Employee’s employment shall be subject to “employment at will”. This
Agreement and the employment of Employee may be terminated as
follows:
a.
Without
Cause
.
Either
party may terminate this Agreement upon thirty (30) days notice to the other
party.
b.
For
Cause.
(1)
By
the
Company (i) pursuant to Paragraph 6 , (ii) upon conviction of the Employee
of
any felony or material misdemeanor under federal, state or local laws or
ordinances, except traffic violations (iii) upon the failure of Employee to
reasonably, diligently or competently discharge the duties assigned to him
pursuant to this Agreement; (iv) if Employee engages in any act of dishonesty
or
bad faith with respect to the Company; (v) if Employee uses alcohol, drugs
or
other similar substances in a manner that adversely affects Employee’s work
performance; (vi) Employee otherwise commits any act or crime reflecting
unfavorably upon the Company or
(2)
(i)
By
Employee upon thirty (30) days' written notice to the Company for any breach
of
this Agreement by Company and failure to cure within that thirty (30) day notice
period; or
(3)
By
the
Company upon any breach by Employee of any of the terms and conditions of this
Agreement or the breach by Employee of any representation or warranty made
to
the Company herein or in any other agreement, document or instrument executed
by
Employee and delivered to the Company, or should any representation or warranty
made by Employee hereunder or thereunder prove to have been false or misleading
in any material respect when made or furnished; or
(4)
Immediately
by the Company upon the death or incapacitation of more than ninety (90) days
of
Employee.
c.
Effect
of Termination.
(1)
In
the
event Employee is terminated by the Company without cause, the Company shall
(i)
pay Employee his then current salary and provide Employee with Group Health
Insurance, but no other compensation or benefits, for six (6) months beginning
with the date of termination (“Severance Payment”), and (ii) subject to the
Employee's strict adherence to and performance of the covenants set forth in
Paragraph 8, Company shall pay to Employee, an amount equal to seventy-five
percent (75%) of Employee’s monthly salary amount for the one (1)-year period
Employee remains obligated to the Non-Compete and Non-Solicitation covenants
described in paragraph 8. If Employee is terminated for cause or Employee
terminates this Agreement without cause, Employee shall be entitled only to
compensation accrued through the date of Termination and all benefits accrued
as
of such date, and shall not be entitled to any Severance Payment described
herein, but shall remain obligated to the Non-Compete and Non-Solicitation
obligations.
(2)
Return
of Materials.
On the
Termination Date or for any reason or at any time at the Company's request,
Employee will deliver promptly to the Company all materials, documents, plans,
records, notes, manuals, subcontracts, procedures, customer lists, and any
other
papers and any copies thereof in Em-ployee's possession, custody or control
relating to the Company or the Business, whether defined as Confidential
Information, Trade Secret or otherwise, all of which at all times shall be
the
property of the Company.
10.
Miscellaneous
.
a.
Assignability.
(1)
This
Agreement may be assigned by the Company to any successor in interest to its
business, which successor in interest shall be bound herein to the same extent
as the Company. Employee agrees to perform his duties for such successor in
interest to the same extent as for the Company.
(2)
This
is a personal agreement on the part of Employee and may not be sold, assigned,
transferred or conveyed by Employee.
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b.
No
Waiver
.
The
waiver by either party of a breach of any provision of this Agreement
by
the other party shall not operate or be construed as a waiver of
any
subsequent breach by the other
party.
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c.
Governing
Law and Jurisdiction
.
This
Agreement shall be governed by and construed in accordance with the
laws
of the State of Georgia. Any cause of action shall be filed in and
the
parties agree to subject themselves to the jurisdiction of any State
or
Federal court of competent jurisdiction located in Atlanta, Georgia.
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d.
Entire
Agreement
.
This
Agreement states the entire agreement and understanding between the
parties and supersedes all prior understandings and
agreements.
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e.
No
Modification
.
No
change
or modification to this Agreement shall be valid unless in writing and signed
by
both parties hereto.
f.
Independence
of Covenants
.
The
covenants contained herein shall be construed as agreements independent of
each
other and of any other provision of this or any other contract between the
parties hereto, and the existence of any claim or cause of action by Employee
against the Company, whether predicated upon this or any other contract, shall
not constitute a defense to the enforcement by the Company of said
covenants.
g
.
Right
to Injunctive Relief
.
Employee
recognizes and agrees that the injury the Company will suffer in the event
of
the Employee's breach of any covenant or agreement contained herein cannot
be
compensated by monetary damages alone, and Employee therefore agrees that the
Company, in addition and without limiting any other remedies or rights that
it
may have, either under his Agreement or otherwise, shall have the right to
obtain an injunction against Employee from any court of competent jurisdiction
enjoining any such breach without having to show or prove damages or
injury.
h.
Jury
Trial Waiver
.
Both
parties hereby waive their right to a trial by jury in the event of any dispute
or cause of action regarding this Agreement.
(THE
REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK)
IN
WITNESS WHEREOF
,
the
undersigned have executed this Agreement as of the day and year first above
written.
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VYSTAR
CORPORATION
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By:
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(Signature)
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Name:
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Joseph
Allegra
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Title:
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Director,
Chair Compensation
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Date:
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EMPLOYEE:
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(Signature)
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Name:
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William
R. Doyle
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Date:
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Schedule
A - Salary and Bonus
Annual
Salary. $185,000
,
which
may be amended from time to time by the Board.
The
Salary shall be payable bi-weekly according to the Company’s established payroll
periods. The Board and Employee shall review the Annual Salary amount annually
upon Employee’s Annual performance review that determines Employee’s Annual
Bonus discussed below.
Bonus.
Annual
Bonus.
Employee
shall be eligible each year of the term of this Agreement for a cash bonus
equal
to a maximum of 125% of Employee’s Annual Salary amount based on the success of
the Company in meeting its objectives, as set out for Employee; provided that
no
cash bonus shall be payable to Employee on any date unless Employee is employed
by the Company on that date. The amount of the Annual Bonus shall be determined
by the Board based on the percentage of achievement of the stated Company
objectives. Notwithstanding, if Company does not meet at least 90% of its stated
objectives, the Board may choose not to award Employee any portion of his Annual
Bonus. The effective date of Annual Bonus calculation shall be the Company
Fiscal Year-End, and shall be payable in one or more installments as determined
by the Board beginning in the first quarter of the following Fiscal
Year.
(THE
REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK)
Schedule
B - Duties and Functions (“Services”)
Services:
Oversee
and promote all aspects of the Company business. This shall include, but not
be
limited to: (i) having all operations, marketing, finance, sales, distribution
and research and development functions report to Employee; (ii) mentoring and
guiding all employees in the management and furtherance of the Company
objectives.
Territory:
Worldwide
(THE
REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK)
MANAGEMENT
AGREEMENT
THIS
MANAGEMENT AGREEMENT (“Agreement”)
is
dated
January 31, 2008 (“Effective Date”) by and between
UNIVERSAL
CAPITAL MANAGEMENT, INC.
,
a
Delaware corporation (“
Manager
”),
and
VYSTAR
CORPORATION,
a
Georgia corporation (
“VYSTAR”
or “Company”
)
.
BACKGROUND
VYSTAR
desires to obtain from the Manager, and the Manager is willing and able to
provide to VYSTAR, management services and other assistance in accordance with
and subject to the terms and conditions set forth in this
Agreement.
For
and
in consideration of the mutual benefits and covenants set forth below, and
other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto, intending to be legally bound, hereby agree
as
follows:
1.
Appointment
as Manager
.
(a)
VYSTAR
hereby engages Manager to provide management services and other assistance
in
accordance with the terms of this Agreement. The Manager shall and hereby agrees
to devote such time as is reasonably necessary to provide such services and
assistance.
2.
Scope
of Services
.
(a)
Manager
hereby agrees to provide to VYSTAR the following services (as amended from
time
to time, collectively, the
“Services”
):
(i)
Strategic
Planning.
Manager
shall assist VYSTAR management in the strategic planning process to include
but
not be limited to analysis of potential markets, competition, product marketing
approaches, pricing and future product utility.
(ii)
Investment
Banking Consultation and Investor Introduction Services
.
Manager
is not registered at this time as a securities broker or dealer, and represents
and warrants that such registration is not required. Manager further represents
that it does not have an affiliation with any securities brokerage firm. As
a
result, the Company understands that, while the Manager will introduce the
Company to qualified persons and/or institutions who indicate a serious interest
in pursuing a possible financing transaction for the Company within the
parameters established by the Company, the Manager will not be involved in
conducting negotiations for the Company with any such persons, handling any
funds or securities, or performing services that would constitute a business
of
effecting transactions in securities under applicable federal or state law.
Manager further represents and warrants that it has not acted as a broker or
finder in any other sale of securities and does not intend to participate in
any
distribution of securities after any transaction under this
Agreement.
Manager
will use its best efforts to assist VYSTAR in seeking and raising funding and
in
preparation for entering the public market, pursuant to the Manager letter
attached hereto as Exhibit A. Manager will provide VYSTAR with various options
and methods for attaining its investment banking and public market
goals.
(iii)
Investor
Relations Services.
Manager
will introduce VYSTAR to qualified Investor Relations Manager(s) suitable for
providing marketing and public relations services in the investor community
on
behalf of VYSTAR. At VYSTAR’S request, the Manager will co-ordinate investor
relations and public relations services between VYSTAR the provider of such
services.
3.
Term
and Termination
.
(a)
This
Agreement shall be effective as of the Effective Date and, subject to the
provisions of section (b) of this Section 3, shall terminate after three (3)
months (the “
Term
”).
(b)
Notwithstanding
the provisions of subsection (a) of this Section 3, (i) Manager can terminate
this Agreement at any time upon thirty (30) days’ notice to VYSTAR upon VYSTAR’s
failure to pay the amounts required hereunder, and (ii) VYSTAR can terminate
this Agreement after thirty (30) days’ notice to Manager of Manager’s material
failure to fulfill its obligations hereunder and Manager’s failure to correct
such failure during such time period.
4.
Compensation
.
Within
thirty (30) days of the signing of this agreement VYSTAR shall pay Manager
for
the Services by delivering to Manager a Warrant attached hereto as Exhibit
A,
pursuant to a Warrant Purchase Agreement attached hereto as Exhibit B, to
purchase up to One Million (1,000,000) Shares of the common stock of the Company
at an exercise price of $0.01. The Warrant will be exercisable in whole or
in
part at or before 5:00 p.m. E.S.T. on January 31, 2013.
In
addition, VYSTAR shall reimburse Manager for third party and out-of-pocket
expenses actually and reasonably incurred by Manager as an adjunct to and as
a
supplement to Manager’s responsibility for performing the Services for which
Manager is being paid compensation described herein, and which are approved
in
advance by VYSTAR; provided that expenses of Affiliates of Manager shall not
be
deemed third party expenses for purposes of this Section 4.
5.
Non-Exclusive
Contract
.
The
Manager acts as adviser to other clients and may give advice, and take action,
with respect to any such client which may differ from the advice given, or
the
timing or nature of action taken, with respect to VYSTAR.
6.
Delegation
and Assignment
.
With
VYSTAR’s prior written consent, which consent shall not be unreasonably withheld
or delayed, Manager may delegate all or part of its duties to perform Services
hereunder; provided, that Manager’ costs associated with any duties so delegated
shall not be deemed out-of-pocket expenses added to the price of Services
pursuant to Section 4. Notwithstanding the foregoing, Manager shall be entitled
to delegate all or any part of its duties to one or more of its Affiliates
upon
notice to VYSTAR; provided, however, that Manager and its designee Affiliate(s)
shall be jointly and severally liable for performance of Manager’s obligations
under this Agreement. VYSTAR shall not assign or subcontract its rights, duties,
or obligations under this Agreement.
7.
Confidential
Information; Ownership
.
(a)
Each
party shall treat as confidential all Confidential Information of the other
party that comes to its knowledge through this Agreement. Each party shall
take
such steps to prevent disclosure of such Confidential Information to any third
person as it would take in protecting its own proprietary or confidential
information and shall not use any portion of such Confidential Information
for
any purpose not authorized herein. All Confidential Information of each party
and any information containing a party’s Confidential Information shall at all
times remain the exclusive property of that party.
(b)
No
party
shall be under any obligations with respect to any Confidential
Information:
(i)
which
is,
at the time of disclosure, available to the general public;
(ii)
which
becomes at a later date available to the general public through no fault on
the
part of such party and then only after such later date;
(iii)
which
such party can demonstrate was in its possession before receipt from the other
party; or
(iv)
which
is
disclosed to such party without restriction on disclosure by a third party
who
has the lawful right to disclose such information.
(c)
The
confidentiality obligations of this Section 7 shall survive the termination
of
this Agreement.
8.
Independent
Contractor
.
Manager
is and shall remain at all times an independent contractor of VYSTAR in the
performance of all Services hereunder, and all persons employed by Manager
to
perform such Services shall be and remain employees solely of Manager and
subject only to the supervision of Manager’s supervisory personnel. With respect
to Manager’s employees providing services under this Agreement, Manager shall be
responsible for the payment of all salaries and benefits and all income taxes,
social security taxes, employment compensation taxes and other employment taxes
and withholdings with respect to such employees and all fringe benefits program
expenses, such as insurance costs, pension or retirement plans, vacation, sick
leave and similar matters, with respect to such employees. Manager shall be
entitled to determine which of its employees shall provide the
Services.
9.
Force
Majeure
.
(a)
Neither
party shall be liable for any loss or damage for delay or non-performance under
this Agreement resulting from the operation of any applicable law, rule,
ordinance or regulation of any governmental entity or regulatory agency, or
from
any requirement or intervention of civil, naval or military authorities or
other
agencies of the government, or by reason of any other causes whatsoever not
reasonably within the control of such party, including, but not limited to,
acts
of God, war, riot, insurrection, civil violence or disobedience, blockages,
embargoes, sabotage, epidemics, fire, strikes, lock-outs or other industrial
or
labor disturbances, lightning, hurricanes, cyclonic storms, explosions and
delay
of carriers; provided, that the affected party notifies the other party promptly
of the occurrence of the cause and thereafter exerts reasonable commercial
efforts to overcome the cause of prevention and hindrance and to resume
performance; and provided, further, that the settlement of strikes, lock-outs
and other industrial or labor disturbances shall be entirely within the
discretion of the affected party, and the affected party shall not be required
to make settlement of strikes, lock-outs and other industrial or labor
disturbances by acceding to the demands of any opposing third party or parties
when such course is unfavorable in the affected party’s judgment.
(b)
If
Manager’s performance under this Agreement is suspended or rendered impractical
by reason of any cause covered by subsection (a) of this Section 9
(“
Force
Majeure
”)
for a
period in excess of twenty (20) days, VYSTAR shall have either the right
to terminate this Agreement with respect to the disrupted Services immediately
upon written notice to Manager or require that the Agreement continue in force
for that period of time beyond the Term that such Force Majeure condition
existed during the Term without incurring any obligation by VYSTAR for
additional payment for Services by Manager. An event of Force Majeure shall
not
otherwise limit amounts payable for Services rendered on or prior to the actual
date of the event of Force Majeure.
10.
Limitation
of Liability
.
Notwithstanding any other provision of this Agreement to the contrary, Manager
shall not be liable to VYSTAR by reason of any error of omission or commission,
performance or failure to perform or delay in performing any Services under
this
Agreement, for special, incidental or consequential damages, suffered by VYSTAR
beyond a refund to VYSTAR of all charges paid and/or shares issued by VYSTAR
to
Manager for the Services that caused such damages, unless Manager shall have
committed gross negligence or willful misconduct. The provisions of this Section
10 shall survive termination of this Agreement.
11.
Manager’s
Investment Representations
.
Manager
hereby represents and warrants to and with VYSTAR that:
(a)
Manager
will be acquiring the Shares for its own account as principal and not with
a
view to, or for sale in connection with, any distribution of all or any of
such
Shares. Manager hereby agrees that it will not, directly or indirectly, assign,
transfer, offer, sell, pledge, hypothecate or otherwise dispose of all or any
of
such Shares (or solicit any offers to buy, purchase or otherwise acquire or
take
a pledge of any of such Shares) except in accordance with the registration
provisions of the Securities Act of 1933 (the “Securities Act”) or an exemption
from such registration provisions or any applicable securities laws.
(b)
Manager
(i) is knowledgeable and experienced with respect to the financial, tax and
business aspects of the ownership of investments such as the Shares and of
the
business contemplated by VYSTAR and is capable of evaluating the risks and
merits of acquiring the Shares and in making a decision to proceed with this
investment, has not relied on any representations, warranties or agreements
of
VYSTAR or others, and (ii) can bear the economic risk of an investment in Shares
for an indefinite period of time and can afford to suffer the complete loss
thereof.
(c)
Manager
has evaluated the risks involved in investing in the Shares and has determined
that the Shares are a suitable investment for Manager. Specifically, the
aggregate amount of the investments the Manager has in, and Manager’s
commitments to, all similar investments that are illiquid is reasonable in
relation to Manager’s net worth, both before and after the acquisition of the
Shares pursuant to this Agreement.
(d)
Manager
understands and acknowledges that the Shares have not been registered under
the
Securities Act or any state securities laws and are being offered and sold
in
reliance on exemptions provided in the Securities Act and state securities
laws
for transactions not involving any public offering and, therefore, cannot be
resold or transferred unless they are subsequently registered under the
Securities Act and such applicable state securities laws or unless an exemption
from such registration is available. Manager also understands that VYSTAR does
not have any obligation or intention to register the Shares for sale under
the
Securities Act or any state securities laws or of supplying the information
which may be necessary to enable the Manager to sell Shares and that Manager
has
no right to require the registration of the Shares under the Securities Act,
any
state securities laws or other applicable securities regulations.
(e)
Manager
has no contract, understanding, agreement or arrangement with any person to
sell, transfer or pledge to such person or anyone else any of the Shares which
the Manager will acquire pursuant to this Agreement and that Manager has no
present plans to enter into any such contract, undertaking, agreement or
arrangement.
12.
Definitions
.
(a)
“Affiliate”
means, with respect to a Person, another Person who controls, is controlled
by
or is under common control with the first such Person.
(b)
“Confidential
Information” means any and all information of either party that might reasonably
be considered confidential, secret, sensitive, proprietary or private. To the
extent practical, Confidential Information shall be marked “proprietary” or
“confidential.” Confidential Information shall include the
following:
(i)
data,
know-how, formulae, processes, designs, sketches, photographs, plans, drawings,
specifications, samples, reports, lists, financial information, studies,
findings, inventions and ideas, computer programs and software, or proprietary
information relating to either party or the methods or techniques used by either
party;
(ii)
data,
documents or proprietary information employed in connection with the marketing
and implementation of each party’s products, including cost information,
business policies and procedures, revenues and markets, distributor and customer
lists, and similar items of information; and
(iii)
any
other
data or information obtained by either party during the term of this Agreement
which is not generally known to and not readily ascertainable by proper means
by
third persons who could obtain economic value from its use or
disclosure.
(c)
“Control”
means the ability, through stock ownership, contract, or otherwise, to control
the business or officers of a Person.
(d)
“Damages
and Expenses” means costs, liabilities, and expenses incurred in investigating,
defending, and paying settlements or judgments with respect to claims (including
reasonable attorneys’ fees).
(e)
“Holiday”
means for purposes of this Agreement, a day, other than a Saturday or Sunday,
on
which national banks with branches in the Commonwealth of Pennsylvania are
or
may elect to be closed.
(f)
“Person”
means an individual or entity.
(g)
“Shares”
means shares of common stock of VYSTAR, par value $.0001 dollars per share
acquired by Manager pursuant to this Agreement.
13.
Miscellaneous
.
(a)
Indulgences,
Etc
.
Neither
the failure nor any delay on the part of either party to exercise any right,
remedy, power or privilege under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, remedy, power
or
privilege preclude any other or further exercise of the same or of any other
right, remedy, power or privilege, nor shall any waiver of any right, remedy,
power or privilege with respect to any occurrence be construed as a waiver
of
such right, remedy, power or privilege with respect to any other occurrence.
No
waiver shall be effective unless it is in writing and is signed by the party
asserted to have granted such waiver.
(b)
Controlling
Law
.
This
Agreement and all questions relating to its validity, interpretation,
performance and enforcement (including, without limitation, provisions
concerning limitations of actions), shall be governed by and construed in
accordance with the laws of the State of Delaware, notwithstanding any
conflict-of-laws doctrines of any jurisdiction to the contrary, and without
the
aid of any canon, custom or rule of law requiring construction against the
draftsman.
(c)
Notices
.
All
notices, requests, demands and other communications required or permitted under
this Agreement shall be in writing and shall be deemed to have been duly given,
made and received only when delivered (personally, by courier service such
FedEx
or by other messenger) against receipt or upon actual receipt of registered
or
certified mail, postage prepaid, return receipt requested, addressed as set
forth below:
|
If
to:
|
Manager
Universal
Capital Management, Inc.
2601
Annand Drive, Suite 16
Wilmington,
DE 19808
Attention:
Michael D.
Queen
|
|
If
to:
|
VYSTAR CORPORATION
3235
Satellite Blvd.
Building
400, Suite 290
Duluth,
GA 30096
Attention:
William R. Doyle
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In
addition, notice by mail shall be sent by a reputable international courier
(such as FedEx) if posted outside of the continental United States. Any party
may alter the address to which communications or copies are to be sent by giving
notice of such change of address in conformity with the provisions of this
subparagraph for the giving of notice.
(d)
Binding
Nature of Agreement; No Assignment
.
This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.
(e)
Provisions
Separable
.
The
provisions of this Agreement are independent of and separable from each other,
and no provision shall be affected or rendered invalid or unenforceable by
virtue of the fact that for any reason any other or others of them may be
invalid or unenforceable in whole or in part.
(f)
Entire
Agreement
.
This
Agreement contains the entire understanding among the parties hereto with
respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements and understandings, inducements or conditions,
express or implied, oral or written, except as herein contained. The express
terms hereof control and supersede any course of performance and/or usage of
the
trade inconsistent with any of the terms hereof. This Agreement may not be
modified or amended other than by an agreement in writing.
(g)
Section
Headings
.
The
Section and subsection headings in this Agreement have been inserted for
convenience of reference only; they form no part of this Agreement and shall
not
affect its interpretation.
(h)
Gender,
Etc
.
Words
used herein, regardless of the number and gender specifically used, shall be
deemed and construed to include any other number, singular or plural, and any
other gender, masculine, feminine or neuter, as the context indicates is
appropriate.
(i)
Number
of Days
.
In
computing the number of days for purposes of this Agreement, all days shall
be
counted, including Saturdays, Sundays and Holidays; provided, however, that
if
the final day of any time period falls on a Saturday, Sunday or Holiday, then
the final day shall be deemed to be the next day which is not a Saturday, Sunday
or Holiday.
IN
WITNESS WHEREOF
,
the
Parties hereto have executed this Management Agreement
VYSTAR
Corporation
|
Universal
Capital Management, Inc.
|
|
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|
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By:
_______________________________
|
By:
____________________________
|
Name:
William R. Doyle
|
Name:
Joseph T. Drennan
|
Title:
President and COO
|
Title:
Vice President and CFO
|
VYSTAR
CORPORATION
August
15, 2008
Mr.
Michael Queen
Universal
Capital Management, Inc.
2601
Annand Drive
Wilmington,
DE 19808
Re:
|
Agreement
regarding Issuance of 600,000 Shares of Vystar Corporation (“Vystar)
Common Stock to Universal Capital Management, Inc.
(“UCM”)
|
Dear
Mike:
This
letter will memorialize the agreement between Vystar and UCM with respect
to
certain services to be rendered by UCM to Vystar in connection with the proposed
registration of the distribution of 600,000 shares of Vystar Common Stock
described below to the UCM stockholders. In consideration of the services
described below, on or about the effective date of a Vystar registration
statement on Form S-1 which is contemplated to be filed later this year,
Vystar
shall issue to UCM 600,000 shares of its common stock as compensation for
such
services and, in accordance with the contemplated description in the
Registration Statement, UCM shall distribute such shares to its stockholders
on
a record date to be determined. The services include the following:
|
1.
|
Assistance
in preparation of the S-1 Registration Statement and accompanying
documents;
|
|
2.
|
Assistance
in locating appropriate market makers with respect to Vystar’s
contemplated listing of its shares for sale on the OTC Bulletin
Board;
|
|
3.
|
Assistance
with Vystar’s contemplated application with FINRA with respect to such OTC
Bulletin Board listing; and
|
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4.
|
Assistance
with the contemplated arrangements with a stock transfer agent
with
respect to the Vystar common stock following effectiveness of such
registration statement.
|
Notwithstanding
the foregoing, these shares will only be issued to UCM in the event that
such
registration statement is declared effective by the Securities and Exchange
Commission.
If
the
foregoing is acceptable, please so indicate in the space provided
below.
|
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Vystar
Corporation
|
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|
|
Date:
|
By:
|
/s/
|
|
William
R. Doyle
|
|
|
Agreed
to
as of this 15
th
day of August, 2008:
Universal
Capital Management, Inc.
ADDENDUM
TO MANAGEMENT AGREEMENT
THIS
ADDENDUM TO
MANAGEMENT
AGREEMENT
(“Addendum”) dated February 29, 2008 is by and between
UNIVERSAL
CAPITAL MANAGEMENT, INC.
and
VYSTAR
CORPORATION
This
Addendum amends and modifies that certain Management Agreement dated January
31,
2008 between the parties hereto.
|
1.
|
Paragraphs
3. and 4. of the Management Agreement entitled
“Term
and
Termination”
and “
Compensation”
respectively, are deleted in their entirety and replaced with the
following:
|
(a)
This
Agreement shall be effective as of the Effective Date and, subject to the
provisions of section (b) of this Section 3, shall terminate after one (1)
year
(the “
Term
”).
The
Term shall be automatically extended from year to year in the absence of ninety
(90) days’ notice from one party to the other.
(b)
Notwithstanding
the provisions of subsection (a) of this Section 3, (i) Manager can terminate
this Agreement at any time upon thirty (30) days’ notice to VYSTAR upon VYSTAR’s
failure to pay the amounts required hereunder, and (ii) VYSTAR can terminate
this Agreement after thirty (30) days’ notice to Manager of Manager’s material
failure to fulfill its obligations hereunder and Manager’s failure to correct
such failure during such time period.
(c)
Not withstanding any other provision of subsections (a) or (b) of this Section
3, Manager will earn Sixty-Five percent (65%) of the Compensation, Section
4,
for the Agreement as of January 31, 2008.
(c)
Within
thirty (30) days of the signing of this agreement Vystar shall pay Manager
for
the Services by delivering to Manager a Warrant, pursuant to a Warrant agreement
attached hereto as Exhibit C, to purchase up to One Million (1,000,000) shares
of the common stock of the Company at an exercise price of $0.01. If the Term
of
this Agreement extends beyond the its Term, VYSTAR shall pay for continuing
Services hereunder by delivering five hundred thousand (500,000) additional
Warrants to Manager on the anniversary of the Effective Date and each
anniversary date thereafter during the term of this Agreement. , and
(b)
A Warrant, pursuant to a Warrant agreement attached hereto as Exhibit B, to
purchase up to Five Hundred Thousand (500,000) shares of the common stock,
par
value $.0001 of VYSTAR at an exercise price of $2.00. The Warrant will be
exercisable in whole or in part at or before 5:00 p.m. E.S.T. on January 31,
2013.
In
addition, VYSTAR shall reimburse Manager for third party and out-of-pocket
expenses actually and reasonably incurred by Manager as an adjunct to and as
a
supplement to Manager’s responsibility for performing the Services for which
Manager is being paid compensation described herein, and which are approved
in
advance by Vystar; provided that expenses of Affiliates of Manager shall not
be
deemed third party expenses for purposes of this Section 4.
|
2.
|
All
other provisions of the Management Agreement remain in full force
and
effect.
|
The
Parties hereto have executed this Management Agreement as of the date first
above written.
Vystar
Corporation
|
|
UNIVERSAL
CAPITAL MANAGEMENT, INC.
|
|
|
|
|
|
|
BY:
__________________________
|
|
BY:
_______________________
|
NAME:
William R Doyle
|
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NAME:
Joseph T Drennan
|
TITLE:
President & Chief Operating Officer
|
|
TITLE:
Vice President
|
WARRANT
PURCHASE AGREEMENT
January
31, 2008
Universal
Capital Management, Inc.
2
601
Annand Dr., #16
Wilmington,
Delaware 19808
Vystar
Corporation
,
a
Georgia corporation (the "
Company
"),
hereby agrees with you as follows:
|
1.
|
Concurrently
with the execution of this Warrant Purchase Agreement (the “
Agreement
”),
the Company is entering into with you a consulting agreement, of
even date
hereof. Pursuant to the terms of the consulting agreement, the Company
will deliver to you a Warrant (the "
Warrant
")
in the form of
Exhibit
A
hereto, to purchase up to One Million (1,000,000) shares of the Company’s
common stock, par value $.0001 per share (the “
Common
Stock
”),
at a purchase price of ($0.01) per share, exercisable for a period
of up
to Sixty (60) months commencing on the date hereof. The right to
purchase
all One Million (1,000,000) shares shall vest
immediately.
|
|
2.
|
The
Company covenants that all shares that may be issued upon the exercise
of
the Warrant, upon issuance, will be validly issued, fully paid and
non-assessable and free from all taxes, liens and charges with respect
to
the issuance thereof. The Company further covenants that during the
period
within which the Warrant may be exercised, the Company will at all
times
have authorized and reserved a sufficient number of shares of Common
Stock
to permit the exercise of the
Warrant.
|
|
3.
|
This
Warrant is not transferable.
|
If
the
foregoing correctly sets forth our understanding, please sign
below.
Very truly yours,
|
Accepted as of the
|
|
date written above:
|
Vystar Corporation
|
|
William
R Doyle
|
Joseph
T Drennan, Vice President
|
President
& Chief Operating Officer
|
Universal
Capital Management, Inc.
|
EXHIBIT
A
WARRANT
No. ___
NO
SALE,
TRANSFER, PLEDGE OR OTHER DISPOSITION OF THIS WARRANT OR THE SHARES PURCHASABLE
HEREUNDER SHALL BE MADE EXCEPT PURSUANT TO REGISTRATION UNDER THE SECURITIES
ACT
OF 1933, AS AMENDED, OR PURSUANT TO AN OPINION OF COUNSEL SATISFACTORY TO THE
ISSUER THAT REGISTRATION IS NOT REQUIRED. TRANSFER OF THIS WARRANT IS ALSO
RESTRICTED BY A WARRANT PURCHASE AGREEMENT DATED February 28, 2008 A COPY OF
WHICH IS AVAILABLE FROM THE ISSUER.
WARRANT
TO PURCHASE COMMON STOCK
IN
VYSTAR CORPORATION
Exercisable
Commencing
January
31, 2008
Void
After
January
31, 2013
THIS
CERTIFIES
that,
for value received, Universal Capital Management, Inc. of
2601
Annand Dr., #16, Wilmington, Delaware 19808
,
is
entitled, subject to the terms and conditions set forth in this Warrant, to
purchase from Vystar Corporation (“
Company
"),
located at 3235 Satellite Blvd., Building 400, Suite 290, Duluth, GA 30096
One
Million (1,000,000) shares of the Company’s common stock, par value $.0001 per
share (the “
Common
Stock
”),
at a
purchase price of ($.01) per share, exercisable for a period of up to Sixty
(60)
months commencing on the date hereof, subject to adjustment as provided in
Section 5 below. This Warrant is issued pursuant to a Warrant Purchase Agreement
between Universal Capital Management, Inc. and the Company, dated January 31,
2008, and is subject to all the terms thereof, including the vesting schedules
set forth in Section 1 thereof, and the limitations on transferability set
forth
in Section 3 thereof.
1.
This
Warrant may be exercised by the holder hereof, in whole or in part (but not
as
to a fractional share), by the presentation and surrender of this Warrant with
the form of Election to Purchase duly executed, at the principal office of
the
Company (or at such other address as the Company may designate by notice in
writing to the holder hereof at the address of such holder appearing on the
books of the Company), and upon payment to the Company of the purchase price
by
certified or bank cashier's check. The shares of Common Stock so purchased
shall
be deemed to be issued to the holder hereof as the record owner of such shares
of Common Stock as of the close of business on the date on which this Warrant
shall have been surrendered and payment made for such shares. Certificates
for
the shares of Common Stock so purchased shall be delivered or mailed to the
holder promptly after this Warrant has been exercised, and if applicable, a
new
Warrant identical in form representing the number of shares of Common Stock
with
respect to which this Warrant shall not then have been exercised shall also
be
issued to the holder hereof.
2.
Nothing
contained herein shall be construed to confer upon the holder of this Warrant,
as such, any of the rights of a shareholder of the Company.
3.
The
Company shall not issue certificates representing fractions of shares of Common
Stock upon the exercise of this Warrant, but shall make a cash payment for
any
fractional share based on the market price of the Common Stock on the date
of
exercise, which shall be the closing sale price on the principal exchange on
which the Common Stock is traded; or if not traded on any exchange, then the
representative closing bid price in the over-the-counter market; or if not
traded in the over-the-counter market, the fair market value as determined
by
the Company’s board of directors. All calculations under this Section 3 and
under Section 5 shall be made to the nearest cent or shares, as the case may
be.
4.
Subject
to the limitations on transfer set forth in Section 3 of the Warrant Purchase
Agreement, this Warrant is exchangeable, upon its surrender by the holder at
the
office of the Company referred to in Section 1 above, for new warrants
(containing the same terms as this Warrant) each representing the right to
purchase such number of shares of Common Stock as shall be designated by such
holder at the time of such surrender (but not exceeding in the aggregate the
remaining number of shares of Common Stock which may be purchased hereunder).
Upon receipt of evidence satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant and upon delivery of a bond of
indemnity satisfactory to the Company (or, in the case of mutilation, upon
surrender of this Warrant), the Company will issue to the holder a replacement
warrant (containing the same terms as this Warrant). As used herein, "Warrant"
shall include all new warrants issued in exchange for or replacement of this
Warrant.
5.
If
the
Company shall pay a dividend in shares of its Common Shares, subdivide
(forward-split) its outstanding shares of Common Stock, combine (reverse-split)
its outstanding shares of Common Stock, issue by reclassification of its shares
of Common Stock any shares or other securities of the Company, or distribute
to
holders of its Common Stock any securities of the Company or of another entity,
the number of shares of Common Stock or other securities the holder hereof
is
entitled to purchase pursuant to this Warrant immediately prior thereto shall
be
adjusted so that the holder shall be entitled to receive upon exercise the
number of shares of Common Stock or other securities which he or she would
have
owned or would have been entitled to receive after the happening of any of
the
events described above had this Warrant been exercised immediately prior to
the
happening of such event, and the exercise price per share shall be
correspondingly adjusted; provided, however, that no adjustment in the number
of
shares and/or the exercise price shall be required unless such adjustment would
require an increase or decrease of at least one percent (1%) in such number
and/or price; and provided further, however, that any adjustments which by
reason of this Section 5 are not required to be made shall be carried forward
and taken into account in any subsequent adjustment. An adjustment made pursuant
to this Section 5 shall become effective immediately after the record date
in
the case of the stock dividend or other distribution and shall become effective
immediately after the effective date in the case of a subdivision, combination
or reclassification. The holder of this Warrant shall be entitled to participate
in any subscription or other rights offering made to holders of Common Stock
had
he purchased the full number of shares as to which this Warrant remains
unexercised immediately prior to the record date for such rights offering.
If
the Company is consolidated or merged with or into another corporation or if
all
or substantially all of its assets are conveyed to another corporation this
Warrant shall thereafter be exercisable for the purchase of the kind and number
of shares of stock or other securities or property, if any, receivable upon
such
consolidation, merger or conveyance by a holder of the number of shares of
Common Stock of the Company which could have been purchased on the exercise
of
this Warrant immediately prior to such consolidation, merger or conveyance;
and,
in any such case, appropriate adjustment (as determined by the Board of
Directors) shall be made in the application of the provisions herein set forth
with respect to the rights and interests thereafter of the holder of this
Warrant to the end that the provisions set forth herein (including provisions
with respect to changes in and other adjustments of the number of shares of
Common Stock the holder of this Warrant is entitled to purchase) shall
thereafter be applicable, as nearly as possible, in relation to any shares
of
Common Stock or other securities or other property thereafter deliverable upon
the exercise of this Warrant. Upon any adjustment of the number of shares of
Common Stock or other securities the holder of this Warrant is entitled to
purchase, and of any change in exercise price per share, then in each such
case
the Company shall give written notice thereof to the then registered holder
of
this Warrant at the address of such holder as shown on the books of the Company,
which notice shall state such change and set forth in reasonable detail the
method of calculation and the facts upon which such calculation is
based.
6.
If
at any
time:
|
A.
|
The
Company shall declare a dividend or other distribution on its Common
Stock
payable otherwise than in cash at the same rate as the immediately
preceding regular dividend or in Common Stock;
|
|
B.
|
The
Company shall authorize the granting to the holders of its Common
Stock of
rights to subscribe for or purchase any shares of capital stock of
any
class or of any other rights;
|
|
C.
|
There
shall be any plan or agreement of reorganization, or reclassification
of
the capital stock of the Company, or consolidation or merger of the
Company with, or sale of all or substantially all of its assets to,
another corporation; or
|
|
D.
|
There
shall be a voluntary or involuntary dissolution, liquidation or winding
up
of the Company; then the Company shall give to the registered holder
of
this Warrant at the address of such holder as shown on the books
of the
Company, at any time prior to the applicable record date or dates,
a
written notice summarizing such action or event and stating the record
date or dates for any such dividend or rights (or if a record is
not to be
taken, the date or dates as of which the holders of Common Stock
of record
to be entitled to such dividend or rights are to be determined),
the date
on which any such reorganization, reclassification, consolidation,
merger,
sale of assets, dissolution, liquidation or winding up is expected
to
become effective, and the date or dates as of which it is expected
the
holders of Common Stock of record shall be entitled to effect any
exchange
of their shares of Common Stock for securities of other property
deliverable upon any such reorganization, reclassification, consolidation,
merger, sale of assets, dissolution, liquidation or winding
up.
|
IN
WITNESS WHEREOF
,
the
Company has caused this Warrant to be signed by its duly authorized officers
on
January 31, 2008.
Attested:
|
VYSTAR
CORPORATION
|
|
|
|
|
By:_______________________
|
By: __________________________
|
|
William R Doyle
,
President & Chief Operating Officer
|
MANAGEMENT
AGREEMENT
THIS
MANAGEMENT AGREEMENT (“Agreement”)
is
dated
April 30, 2008 (“Effective Date”) by and between
UNIVERSAL
CAPITAL MANAGEMENT, INC.
,
a
Delaware corporation (“
Manager
”),
and
VYSTAR
CORPORATION,
a
Georgia corporation (
“VYSTAR”
or “Company”
)
.
BACKGROUND
VYSTAR
desires to obtain from the Manager, and the Manager is willing and able to
provide to VYSTAR, management services and other assistance in accordance with
and subject to the terms and conditions set forth in this
Agreement.
For
and
in consideration of the mutual benefits and covenants set forth below, and
other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto, intending to be legally bound, hereby agree
as
follows:
1.
Appointment
as Manager
.
(a)
VYSTAR
hereby engages Manager to provide management services and other assistance
in
accordance with the terms of this Agreement. The Manager shall and hereby agrees
to devote such time as is reasonably necessary to provide such services and
assistance.
2.
Scope
of Services
.
(a)
Manager
hereby agrees to provide to VYSTAR the following services (as amended from
time
to time, collectively, the
“Services”
):
|
(i)
|
Significant
Managerial Assistance. Upon VYSTAR’s request, Manager may provide VYSTAR
with day to day managerial assistance on issues such as employment,
payroll, and benefits; real estate leasing; utility utilization;
capital
expenditures; personnel; and other related
matters.
|
|
(ii)
|
Financial
Reporting Services. Upon VYSTAR’s request, Manager may assist in providing
VYSTAR on a quarter-annual basis a balance sheet, income statement
and
statement of cash flow for VYSTAR. Such financial reports shall be
completed not later than thirty (30) days after the end of the
quarter-annual period reported on. Income statements will be based
on
generally accepted accounting principles as in effect in the United
States
of America, consistently applied from period to period and in accordance
with the terms of contracts and service
agreements.
|
|
(iii)
|
Tax
Reporting Services. Upon VYSTAR’s request, Manager may assist in the
preparation of sales and use tax returns for all jurisdictions in
which
VYSTAR is then subject to reporting as determined by VYSTAR for goods
or
services sold. If such services are requested, Manager shall provide
VYSTAR with the amount of such liability not later than the 10
th
business day of each calendar month in which a sales/use tax liability
is
due to be paid VYSTAR.. Such returns shall be delivered to VYSTAR
for
execution no later than three (3) days prior to the filing due date
for
any such return.
|
|
(iv)
|
Accounts
Payable Services.
|
(I.)
Upon
VYSTAR’s request, Manager may assist VYSTAR in providing for the usual and
ordinary business aspects of the accounts payable process for VYSTAR, including
but not limited to:
|
A.
|
Maintaining
vendor master
|
|
B.
|
Processing
vendor invoices
|
|
C.
|
Executing
vendor payments from
VYSTAR’s
funds
|
|
D.
|
Processing
travel expense reports
|
|
E.
|
Executing
employee payments for
travel
expense from funds
|
|
F.
|
Stop
payment administration
|
|
I.
|
Documentation
retention
|
(II.)
Upon
VYSTAR’s request, Manager may assist VYSTAR with its outstanding accounts
payable based upon contracted payment terms and consistent with past business
practice.
(b)
To
the
extent that Manager is able in the ordinary course of business, Manager shall
provide or cause to be provided, and shall be responsible for said costs
associated with, all personnel, facilities, equipment, systems and management
necessary or appropriate to provide such Services. In no event will Manager
be
required to stay in business or take other extraordinary measures solely to
provide the Services to VYSTAR; provided, that Manager shall provide Services
pursuant to this Agreement in the same order of priority as it provides the
same
or similar services to its own departments, and provided VYSTAR is notified
in
advance of any delay and the Services are provided to VYSTAR at the next
available opportunity.
(c)
During the Term of this Agreement, VYSTAR may from time to time request that
Manager provide special services or projects in addition to the Services
identified in this Section 2, and Manager may in its sole discretion agree
to
provide such additional services or projects. If Manager agrees to provide
such
additional services or projects, the Parties shall negotiate in good faith
to
establish the terms (including, without limitation, price) for providing such
additional services or projects, and following agreement on such terms, this
Section 2 shall be amended to include such additional services and
projects.
3.
Term
and Termination
.
(a)
This
Agreement shall be effective as of the Effective Date and, subject to the
provisions of section (b) of this Section 3, shall terminate after one (1)
year
(the “
Term
”).
The
Term shall be automatically extended from year to year in the absence of ninety
(90) days’ notice from one party to the other.
(b)
Notwithstanding
the provisions of subsection (a) of this Section 3, (i) Manager can terminate
this Agreement at any time upon thirty (30) days’ notice to VYSTAR upon VYSTAR’s
failure to pay the amounts required hereunder, and (ii) VYSTAR can terminate
this Agreement after thirty (30) days’ notice to Manager of Manager’s material
failure to fulfill its obligations hereunder and Manager’s failure to correct
such failure during such time period.
4.
Compensation
.
Within
thirty (30) days of the signing of this agreement VYSTAR shall pay Manager
for
the Services by delivering to Manager a Warrant attached hereto as Exhibit
A,
pursuant to a Warrant Purchase Agreement attached hereto as Exhibit B, to
purchase up to Five Hundred Thousand (500,000) Shares of the common stock of
the
Company at an exercise price of $2.00. The Warrant will be exercisable in whole
or in part at or before 5:00 p.m. E.S.T. on April 30, 2013.
If
the
term of this Agreement extends beyond the Term, VYSTAR shall pay for continuing
Services hereunder by delivering to the Manager a Warrant to purchase up to
five
hundred thousand (500,000) additional shares, at an exercise price of $0.01,
on
the anniversary of the Effective Date and each anniversary date thereafter
during the term of this Agreement.
In
addition, VYSTAR shall reimburse Manager for third party and out-of-pocket
expenses actually and reasonably incurred by Manager as an adjunct to and as
a
supplement to Manager’s responsibility for performing the Services for which
Manager is being paid compensation described herein, and which are approved
in
advance by VYSTAR; provided that expenses of Affiliates of Manager shall not
be
deemed third party expenses for purposes of this Section 4.
5.
Non-Exclusive
Contract
.
The
Manager acts as adviser to other clients and may give advice, and take action,
with respect to any such client which may differ from the advice given, or
the
timing or nature of action taken, with respect to VYSTAR.
6.
Delegation
and Assignment
.
With
VYSTAR’s prior written consent, which consent shall not be unreasonably withheld
or delayed, Manager may delegate all or part of its duties to perform Services
hereunder; provided, that Manager’ costs associated with any duties so delegated
shall not be deemed out-of-pocket expenses added to the price of Services
pursuant to Section 4. Notwithstanding the foregoing, Manager shall be entitled
to delegate all or any part of its duties to one or more of its Affiliates
upon
notice to VYSTAR; provided, however, that Manager and its designee Affiliate(s)
shall be jointly and severally liable for performance of Manager’s obligations
under this Agreement. VYSTAR shall not assign or subcontract its rights, duties,
or obligations under this Agreement.
7.
Confidential
Information; Ownership
.
(a)
Each
party shall treat as confidential all Confidential Information of the other
party that comes to its knowledge through this Agreement. Each party shall
take
such steps to prevent disclosure of such Confidential Information to any third
person as it would take in protecting its own proprietary or confidential
information and shall not use any portion of such Confidential Information
for
any purpose not authorized herein. All Confidential Information of each party
and any information containing a party’s Confidential Information shall at all
times remain the exclusive property of that party.
(b)
No
party
shall be under any obligations with respect to any Confidential
Information:
(i)
which
is,
at the time of disclosure, available to the general public;
(ii)
which
becomes at a later date available to the general public through no fault on
the
part of such party and then only after such later date;
(iii)
which
such party can demonstrate was in its possession before receipt from the other
party; or
(iv)
which
is
disclosed to such party without restriction on disclosure by a third party
who
has the lawful right to disclose such information.
(c)
The
confidentiality obligations of this Section 7 shall survive the termination
of
this Agreement.
8.
Independent
Contractor
.
Manager
is and shall remain at all times an independent contractor of VYSTAR in the
performance of all Services hereunder, and all persons employed by Manager
to
perform such Services shall be and remain employees solely of Manager and
subject only to the supervision of Manager’s supervisory personnel. With respect
to Manager’s employees providing services under this Agreement, Manager shall be
responsible for the payment of all salaries and benefits and all income taxes,
social security taxes, employment compensation taxes and other employment taxes
and withholdings with respect to such employees and all fringe benefits program
expenses, such as insurance costs, pension or retirement plans, vacation, sick
leave and similar matters, with respect to such employees. Manager shall be
entitled to determine which of its employees shall provide the
Services.
9.
Force
Majeure
.
(a)
Neither
party shall be liable for any loss or damage for delay or non-performance under
this Agreement resulting from the operation of any applicable law, rule,
ordinance or regulation of any governmental entity or regulatory agency, or
from
any requirement or intervention of civil, naval or military authorities or
other
agencies of the government, or by reason of any other causes whatsoever not
reasonably within the control of such party, including, but not limited to,
acts
of God, war, riot, insurrection, civil violence or disobedience, blockages,
embargoes, sabotage, epidemics, fire, strikes, lock-outs or other industrial
or
labor disturbances, lightning, hurricanes, cyclonic storms, explosions and
delay
of carriers; provided, that the affected party notifies the other party promptly
of the occurrence of the cause and thereafter exerts reasonable commercial
efforts to overcome the cause of prevention and hindrance and to resume
performance; and provided, further, that the settlement of strikes, lock-outs
and other industrial or labor disturbances shall be entirely within the
discretion of the affected party, and the affected party shall not be required
to make settlement of strikes, lock-outs and other industrial or labor
disturbances by acceding to the demands of any opposing third party or parties
when such course is unfavorable in the affected party’s judgment.
(b)
If
Manager’s performance under this Agreement is suspended or rendered impractical
by reason of any cause covered by subsection (a) of this Section 9
(“
Force
Majeure
”)
for a
period in excess of twenty (20) days, VYSTAR shall have either the right
to terminate this Agreement with respect to the disrupted Services immediately
upon written notice to Manager or require that the Agreement continue in force
for that period of time beyond the Term that such Force Majeure condition
existed during the Term without incurring any obligation by VYSTAR for
additional payment for Services by Manager. An event of Force Majeure shall
not
otherwise limit amounts payable for Services rendered on or prior to the actual
date of the event of Force Majeure.
10.
Limitation
of Liability
.
Notwithstanding any other provision of this Agreement to the contrary, Manager
shall not be liable to VYSTAR by reason of any error of omission or commission,
performance or failure to perform or delay in performing any Services under
this
Agreement, for special, incidental or consequential damages, suffered by VYSTAR
beyond a refund to VYSTAR of all charges paid and/or shares issued by VYSTAR
to
Manager for the Services that caused such damages, unless Manager shall have
committed gross negligence or willful misconduct. The provisions of this Section
10 shall survive termination of this Agreement.
11.
Manager’s
Investment Representations
.
Manager
hereby represents and warrants to and with VYSTAR that:
(a)
Manager
will be acquiring the Shares for its own account as principal and not with
a
view to, or for sale in connection with, any distribution of all or any of
such
Shares. Manager hereby agrees that it will not, directly or indirectly, assign,
transfer, offer, sell, pledge, hypothecate or otherwise dispose of all or any
of
such Shares (or solicit any offers to buy, purchase or otherwise acquire or
take
a pledge of any of such Shares) except in accordance with the registration
provisions of the Securities Act of 1933 (the “Securities Act”) or an exemption
from such registration provisions or any applicable securities laws.
(b)
Manager
(i) is knowledgeable and experienced with respect to the financial, tax and
business aspects of the ownership of investments such as the Shares and of
the
business contemplated by VYSTAR and is capable of evaluating the risks and
merits of acquiring the Shares and in making a decision to proceed with this
investment, has not relied on any representations, warranties or agreements
of
VYSTAR or others, and (ii) can bear the economic risk of an investment in Shares
for an indefinite period of time and can afford to suffer the complete loss
thereof.
(c)
Manager
has evaluated the risks involved in investing in the Shares and has determined
that the Shares are a suitable investment for Manager. Specifically, the
aggregate amount of the investments the Manager has in, and Manager’s
commitments to, all similar investments that are illiquid is reasonable in
relation to Manager’s net worth, both before and after the acquisition of the
Shares pursuant to this Agreement.
(d)
Manager
understands and acknowledges that the Shares have not been registered under
the
Securities Act or any state securities laws and are being offered and sold
in
reliance on exemptions provided in the Securities Act and state securities
laws
for transactions not involving any public offering and, therefore, cannot be
resold or transferred unless they are subsequently registered under the
Securities Act and such applicable state securities laws or unless an exemption
from such registration is available. Manager also understands that VYSTAR does
not have any obligation or intention to register the Shares for sale under
the
Securities Act or any state securities laws or of supplying the information
which may be necessary to enable the Manager to sell Shares and that Manager
has
no right to require the registration of the Shares under the Securities Act,
any
state securities laws or other applicable securities regulations.
(e)
Manager
has no contract, understanding, agreement or arrangement with any person to
sell, transfer or pledge to such person or anyone else any of the Shares which
the Manager will acquire pursuant to this Agreement and that Manager has no
present plans to enter into any such contract, undertaking, agreement or
arrangement.
12.
Definitions
.
(a)
“Affiliate”
means, with respect to a Person, another Person who controls, is controlled
by
or is under common control with the first such Person.
(b)
“Confidential
Information” means any and all information of either party that might reasonably
be considered confidential, secret, sensitive, proprietary or private. To the
extent practical, Confidential Information shall be marked “proprietary” or
“confidential.” Confidential Information shall include the
following:
(i)
data,
know-how, formulae, processes, designs, sketches, photographs, plans, drawings,
specifications, samples, reports, lists, financial information, studies,
findings, inventions and ideas, computer programs and software, or proprietary
information relating to either party or the methods or techniques used by either
party;
(ii)
data,
documents or proprietary information employed in connection with the marketing
and implementation of each party’s products, including cost information,
business policies and procedures, revenues and markets, distributor and customer
lists, and similar items of information; and
(iii)
any
other
data or information obtained by either party during the term of this Agreement
which is not generally known to and not readily ascertainable by proper means
by
third persons who could obtain economic value from its use or
disclosure.
(c)
“Control”
means the ability, through stock ownership, contract, or otherwise, to control
the business or officers of a Person.
(d)
“Damages
and Expenses” means costs, liabilities, and expenses incurred in investigating,
defending, and paying settlements or judgments with respect to claims (including
reasonable attorneys’ fees).
(e)
“Holiday”
means for purposes of this Agreement, a day, other than a Saturday or Sunday,
on
which national banks with branches in the Commonwealth of Pennsylvania are
or
may elect to be closed.
(f)
“Person”
means an individual or entity.
(g)
“Shares”
means shares of common stock of VYSTAR, par value $.0001 dollars per share
acquired by Manager pursuant to this Agreement.
13.
Miscellaneous
.
(a)
Indulgences,
Etc
.
Neither
the failure nor any delay on the part of either party to exercise any right,
remedy, power or privilege under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, remedy, power
or
privilege preclude any other or further exercise of the same or of any other
right, remedy, power or privilege, nor shall any waiver of any right, remedy,
power or privilege with respect to any occurrence be construed as a waiver
of
such right, remedy, power or privilege with respect to any other occurrence.
No
waiver shall be effective unless it is in writing and is signed by the party
asserted to have granted such waiver.
(b)
Controlling
Law
.
This
Agreement and all questions relating to its validity, interpretation,
performance and enforcement (including, without limitation, provisions
concerning limitations of actions), shall be governed by and construed in
accordance with the laws of the State of Delaware, notwithstanding any
conflict-of-laws doctrines of any jurisdiction to the contrary, and without
the
aid of any canon, custom or rule of law requiring construction against the
draftsman.
(c)
Notices
.
All
notices, requests, demands and other communications required or permitted under
this Agreement shall be in writing and shall be deemed to have been duly given,
made and received only when delivered (personally, by courier service such
FedEx
or by other messenger) against receipt or upon actual receipt of registered
or
certified mail, postage prepaid, return receipt requested, addressed as set
forth below:
|
If
to:
|
Manager
Universal
Capital Management, Inc.
2601
Annand Drive
Suite
16
Wilmington,
DE 19808
Attention: Michael D.
Queen
|
|
If
to:
|
VYSTAR CORPORATION
3235
Satellite Blvd.
Building
400, Suite 290
Duluth,
GA 30096
Attention:
William R. Doyle
|
In
addition, notice by mail shall be sent by a reputable international courier
(such as FedEx) if posted outside of the continental United States. Any party
may alter the address to which communications or copies are to be sent by giving
notice of such change of address in conformity with the provisions of this
subparagraph for the giving of notice.
(d)
Binding
Nature of Agreement; No Assignment
.
This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.
(e)
Provisions
Separable
.
The
provisions of this Agreement are independent of and separable from each other,
and no provision shall be affected or rendered invalid or unenforceable by
virtue of the fact that for any reason any other or others of them may be
invalid or unenforceable in whole or in part.
(f)
Entire
Agreement
.
This
Agreement contains the entire understanding among the parties hereto with
respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements and understandings, inducements or conditions,
express or implied, oral or written, except as herein contained. The express
terms hereof control and supersede any course of performance and/or usage of
the
trade inconsistent with any of the terms hereof. This Agreement may not be
modified or amended other than by an agreement in writing.
(g)
Section
Headings
.
The
Section and subsection headings in this Agreement have been inserted for
convenience of reference only; they form no part of this Agreement and shall
not
affect its interpretation.
(h)
Gender,
Etc
.
Words
used herein, regardless of the number and gender specifically used, shall be
deemed and construed to include any other number, singular or plural, and any
other gender, masculine, feminine or neuter, as the context indicates is
appropriate.
(i)
Number
of Days
.
In
computing the number of days for purposes of this Agreement, all days shall
be
counted, including Saturdays, Sundays and Holidays; provided, however, that
if
the final day of any time period falls on a Saturday, Sunday or Holiday, then
the final day shall be deemed to be the next day which is not a Saturday, Sunday
or Holiday.
IN
WITNESS WHEREOF
,
the
Parties hereto have executed this Management Agreement
VYSTAR
Corporation
|
Universal
Capital Management, Inc.
|
|
|
|
|
By:
_______________________________
|
By:
____________________________
|
|
|
|
|
Name:
____________________________
|
Name:
Joseph
T. Drennan
|
|
|
|
|
Title:
____________________________
|
Title:
Vice
President and CFO
|
WARRANT
PURCHASE AGREEMENT
April
30,
2008
Universal
Capital Management, Inc.
2
601
Annand Dr., #16
Wilmington,
Delaware 19808
Vystar
Corporation
,
a
Georgia corporation (the "
Company
"),
hereby agrees with you as follows:
|
1.
|
Concurrently
with the execution of this Warrant Purchase Agreement (the “
Agreement
”),
the Company is entering into with you a consulting agreement, of
even date
hereof. Pursuant to the terms of the consulting agreement, the Company
will deliver to you a Warrant (the "
Warrant
")
in the form of
Exhibit
A
hereto, to purchase up to Five Hundred Thousand (500,000) shares
of the
Company’s common stock, par value $.0001 per share (the “
Common
Stock
”),
at a purchase price of ($2.00) per share, exercisable for a period
of up
to Sixty (60) months commencing on the date hereof. The right to
purchase
all Five Hundred Thousand (500,000) shares shall vest immediately.
|
|
2.
|
The
Company covenants that all shares that may be issued upon the exercise
of
the Warrant, upon issuance, will be validly issued, fully paid and
non-assessable and free from all taxes, liens and charges with respect
to
the issuance thereof. The Company further covenants that during the
period
within which the Warrant may be exercised, the Company will at all
times
have authorized and reserved a sufficient number of shares of Common
Stock
to permit the exercise of the
Warrant.
|
|
3.
|
This
Warrant is not transferable.
|
If
the
foregoing correctly sets forth our understanding, please sign
below.
Very
truly yours,
|
|
|
Accepted
as of the
|
Vystar
Corporation
|
date
written above:
|
William
R Doyle
|
Joseph
T Drennan, Vice President
|
President
& Chief Executive Officer
|
Universal
Capital Management, Inc.
|
EXHIBIT
A
WARRANT
No. ___
NO
SALE,
TRANSFER, PLEDGE OR OTHER DISPOSITION OF THIS WARRANT OR THE SHARES PURCHASABLE
HEREUNDER SHALL BE MADE EXCEPT PURSUANT TO REGISTRATION UNDER THE SECURITIES
ACT
OF 1933, AS AMENDED, OR PURSUANT TO AN OPINION OF COUNSEL SATISFACTORY TO THE
ISSUER THAT REGISTRATION IS NOT REQUIRED. TRANSFER OF THIS WARRANT IS ALSO
RESTRICTED BY A WARRANT PURCHASE AGREEMENT DATED April 30, 2008 A COPY OF WHICH
IS AVAILABLE FROM THE ISSUER.
WARRANT
TO PURCHASE COMMON STOCK
IN
VYSTAR CORPORATION
Exercisable
Commencing
April
30,
2008
Void
After
April
30,
2013
THIS
CERTIFIES
that,
for value received, Universal Capital Management, Inc. of
2601
Annand Dr., #16, Wilmington, Delaware 19808
,
is
entitled, subject to the terms and conditions set forth in this Warrant, to
purchase from Vystar Corporation (“
Company
"),
located at 3235 Satellite Blvd., Building 400, Suite 290, Duluth, GA 30096
Five
Hundred Thousand (500,000) shares of the Company’s common stock, par value
$.0001 per share (the “
Common
Stock
”),
at a
purchase price of ($2.00) per share, exercisable for a period of up to Sixty
(60) months commencing on the date hereof, subject to adjustment as provided
in
Section 5 below. This Warrant is issued pursuant to a Warrant Purchase Agreement
between Universal Capital Management, Inc. and the Company, dated April 30,
2008, and is subject to all the terms thereof, including the vesting schedules
set forth in Section 1 thereof, and the limitations on transferability set
forth
in Section 3 thereof.
1.
This
Warrant may be exercised by the holder hereof, in whole or in part (but not
as
to a fractional share), by the presentation and surrender of this Warrant with
the form of Election to Purchase duly executed, at the principal office of
the
Company (or at such other address as the Company may designate by notice in
writing to the holder hereof at the address of such holder appearing on the
books of the Company), and upon payment to the Company of the purchase price
by
certified or bank cashier's check. The shares of Common Stock so purchased
shall
be deemed to be issued to the holder hereof as the record owner of such shares
of Common Stock as of the close of business on the date on which this Warrant
shall have been surrendered and payment made for such shares. Certificates
for
the shares of Common Stock so purchased shall be delivered or mailed to the
holder promptly after this Warrant has been exercised, and if applicable, a
new
Warrant identical in form representing the number of shares of Common Stock
with
respect to which this Warrant shall not then have been exercised shall also
be
issued to the holder hereof.
2.
Nothing
contained herein shall be construed to confer upon the holder of this Warrant,
as such, any of the rights of a shareholder of the Company.
3.
The
Company shall not issue certificates representing fractions of shares of Common
Stock upon the exercise of this Warrant, but shall make a cash payment for
any
fractional share based on the market price of the Common Stock on the date
of
exercise, which shall be the closing sale price on the principal exchange on
which the Common Stock is traded; or if not traded on any exchange, then the
representative closing bid price in the over-the-counter market; or if not
traded in the over-the-counter market, the fair market value as determined
by
the Company’s board of directors. All calculations under this Section 3 and
under Section 5 shall be made to the nearest cent or shares, as the case may
be.
4.
Subject
to the limitations on transfer set forth in Section 3 of the Warrant Purchase
Agreement, this Warrant is exchangeable, upon its surrender by the holder at
the
office of the Company referred to in Section 1 above, for new warrants
(containing the same terms as this Warrant) each representing the right to
purchase such number of shares of Common Stock as shall be designated by such
holder at the time of such surrender (but not exceeding in the aggregate the
remaining number of shares of Common Stock which may be purchased hereunder).
Upon receipt of evidence satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant and upon delivery of a bond of
indemnity satisfactory to the Company (or, in the case of mutilation, upon
surrender of this Warrant), the Company will issue to the holder a replacement
warrant (containing the same terms as this Warrant). As used herein, "Warrant"
shall include all new warrants issued in exchange for or replacement of this
Warrant.
5.
If
the
Company shall pay a dividend in shares of its Common Shares, subdivide
(forward-split) its outstanding shares of Common Stock, combine (reverse-split)
its outstanding shares of Common Stock, issue by reclassification of its shares
of Common Stock any shares or other securities of the Company, or distribute
to
holders of its Common Stock any securities of the Company or of another entity,
the number of shares of Common Stock or other securities the holder hereof
is
entitled to purchase pursuant to this Warrant immediately prior thereto shall
be
adjusted so that the holder shall be entitled to receive upon exercise the
number of shares of Common Stock or other securities which he or she would
have
owned or would have been entitled to receive after the happening of any of
the
events described above had this Warrant been exercised immediately prior to
the
happening of such event, and the exercise price per share shall be
correspondingly adjusted; provided, however, that no adjustment in the number
of
shares and/or the exercise price shall be required unless such adjustment would
require an increase or decrease of at least one percent (1%) in such number
and/or price; and provided further, however, that any adjustments which by
reason of this Section 5 are not required to be made shall be carried forward
and taken into account in any subsequent adjustment. An adjustment made pursuant
to this Section 5 shall become effective immediately after the record date
in
the case of the stock dividend or other distribution and shall become effective
immediately after the effective date in the case of a subdivision, combination
or reclassification. The holder of this Warrant shall be entitled to participate
in any subscription or other rights offering made to holders of Common Stock
had
he purchased the full number of shares as to which this Warrant remains
unexercised immediately prior to the record date for such rights offering.
If
the Company is consolidated or merged with or into another corporation or if
all
or substantially all of its assets are conveyed to another corporation this
Warrant shall thereafter be exercisable for the purchase of the kind and number
of shares of stock or other securities or property, if any, receivable upon
such
consolidation, merger or conveyance by a holder of the number of shares of
Common Stock of the Company which could have been purchased on the exercise
of
this Warrant immediately prior to such consolidation, merger or conveyance;
and,
in any such case, appropriate adjustment (as determined by the Board of
Directors) shall be made in the application of the provisions herein set forth
with respect to the rights and interests thereafter of the holder of this
Warrant to the end that the provisions set forth herein (including provisions
with respect to changes in and other adjustments of the number of shares of
Common Stock the holder of this Warrant is entitled to purchase) shall
thereafter be applicable, as nearly as possible, in relation to any shares
of
Common Stock or other securities or other property thereafter deliverable upon
the exercise of this Warrant. Upon any adjustment of the number of shares of
Common Stock or other securities the holder of this Warrant is entitled to
purchase, and of any change in exercise price per share, then in each such
case
the Company shall give written notice thereof to the then registered holder
of
this Warrant at the address of such holder as shown on the books of the Company,
which notice shall state such change and set forth in reasonable detail the
method of calculation and the facts upon which such calculation is
based.
6.
If
at any
time:
|
A.
|
The
Company shall declare a dividend or other distribution on its Common
Stock
payable otherwise than in cash at the same rate as the immediately
preceding regular dividend or in Common Stock;
|
|
B.
|
The
Company shall authorize the granting to the holders of its Common
Stock of
rights to subscribe for or purchase any shares of capital stock of
any
class or of any other rights;
|
|
C.
|
There
shall be any plan or agreement of reorganization, or reclassification
of
the capital stock of the Company, or consolidation or merger of the
Company with, or sale of all or substantially all of its assets to,
another corporation; or
|
|
D.
|
There
shall be a voluntary or involuntary dissolution, liquidation or winding
up
of the Company; then the Company shall give to the registered holder
of
this Warrant at the address of such holder as shown on the books
of the
Company, at any time prior to the applicable record date or dates,
a
written notice summarizing such action or event and stating the record
date or dates for any such dividend or rights (or if a record is
not to be
taken, the date or dates as of which the holders of Common Stock
of record
to be entitled to such dividend or rights are to be determined),
the date
on which any such reorganization, reclassification, consolidation,
merger,
sale of assets, dissolution, liquidation or winding up is expected
to
become effective, and the date or dates as of which it is expected
the
holders of Common Stock of record shall be entitled to effect any
exchange
of their shares of Common Stock for securities of other property
deliverable upon any such reorganization, reclassification, consolidation,
merger, sale of assets, dissolution, liquidation or winding
up.
|
IN
WITNESS WHEREOF
,
the
Company has caused this Warrant to be signed by its duly authorized officers
on
April 30, 2008.
Attested:
|
VYSTAR
CORPORATION
|
|
|
|
|
|
|
By:_______________________
|
By:
________________________________________
|
|
William
R Doyle
,
President & Chief Executive Officer
|
VYSTAR
CORPORATION
2004
LONG-TERM INCENTIVE COMPENSATION PLAN
VYSTAR
CORPORATION
2004
LONG-TERM INCENTIVE COMPENSATION PLAN
1.
|
Purpose
|
1
|
|
|
|
2.
|
Definitions
|
1
|
|
|
|
3.
|
Administration
|
6
|
|
|
|
4.
|
Shares Subject to Plan
|
7
|
|
|
|
5.
|
Eligibility
|
9
|
|
|
|
6.
|
Specific Terms of Awards
|
9
|
|
|
|
7.
|
Certain Provisions Applicable to
Awards
|
15
|
|
|
|
8.
|
Code Section 162(m)
Provisions
|
17
|
|
|
|
9.
|
Change in Control
|
19
|
|
|
|
10.
|
General Provisions
|
21
|
VYSTAR
CORPORATION
2004
LONG-TERM INCENTIVE COMPENSATION PLAN
1.
Purpose
. The
purpose of this 2004 LONG TERM INCENTIVE COMPENSATION PLAN (the “Plan”) is to
assist VYSTAR CORPORATION, a Georgia corporation (the “Company”) and its Related
Entities (as hereinafter defined) in attracting, motivating, retaining and
rewarding high-quality executives and other employees, officers, directors,
consultants and other persons who provide services to the Company or its Related
Entities by enabling such persons to acquire or increase a proprietary interest
in the Company in order to strengthen the mutuality of interests between such
persons and the Company's shareholders, and providing such persons with annual
and long term performance incentives to expend their maximum efforts in the
creation of shareholder value.
2.
Definitions
. For
purposes of the Plan, the following terms shall be defined as set forth below,
in addition to such terms defined in Section 1 hereof and elsewhere
herein.
(a) “
Award
”
means any Option, Stock Appreciation Right, Restricted Stock Award, Deferred
Stock Award, Share granted as a bonus or in lieu of another Award, Dividend
Equivalent, Other Stock-Based Award or Performance Award, together with any
other right or interest, granted to a Participant under the Plan.
(b) “
Award
Agreement
” means any written agreement, contract or other instrument or
document evidencing any Award granted by the Committee hereunder.
(c) “
Beneficiary
”
means the person, persons, trust or trusts that have been designated by a
Participant in his or her most recent written beneficiary designation filed with
the Committee to receive the benefits specified under the Plan upon such
Participant's death or to which Awards or other rights are transferred if and to
the extent permitted under Section 10(b) hereof. If, upon a
Participant's death, there is no designated Beneficiary or surviving designated
Beneficiary, then the term Beneficiary means the person, persons, trust or
trusts entitled by will or the laws of descent and distribution to receive such
benefits.
(d) “
Beneficial
Owner
”
and “Beneficial
Ownership”
shall have the meaning ascribed to such term in Rule 13d-3
under the Exchange Act and any successor to such Rule.
(e) “
Board
”
means the Company's Board of Directors.
(f) “
Cause
”
shall, with respect to any Participant, have the meaning specified in the Award
Agreement. In the absence of any definition in the Award Agreement,
“Cause” shall have the equivalent meaning or the same meaning as “cause” or “for
cause” set forth in any employment, consulting, or other agreement for the
performance of services between the Participant and the Company or a Related
Entity or, in the absence of any such agreement or any such definition in such
agreement, such term shall mean (i) the failure by the Participant to perform,
in a reasonable manner, his or her duties as assigned by the Company or a
Related Entity, (ii) any violation or breach by the Participant of his or her
employment, consulting or other similar agreement with the Company or a Related
Entity, if any, (iii) any violation or breach by the Participant of any
non-competition, non-solicitation, non-disclosure and/or other similar agreement
with the Company or a Related Entity, (iv) any act by the Participant of
dishonesty or bad faith with respect to the Company or a Related Entity, (v) use
of alcohol, drugs or other similar substances in a manner that adversely affects
the Participant’s work performance, or (vi) the commission by the Participant of
any act, misdemeanor, or crime reflecting unfavorably upon the Participant or
the Company or any Related Entity. The good faith determination by
the Committee of whether the Participant’s Continuous Service was terminated by
the Company for “Cause” shall be final and binding for all purposes
hereunder.
(g) “
Change in
Control
” means a Change in Control as defined in Section 9(b) of the
Plan.
(h) “
Code
”
means the Internal Revenue Code of 1986, as amended from time to time, including
regulations thereunder and successor provisions and regulations
thereto.
(i) “
Committee
”
means a committee designated by the Board to administer the Plan; provided,
however, that if the Board fails to designate a committee or if there are no
longer any members on the committee so designated by the Board, or for any other
reason determined by the Board, then the Board shall serve as the
Committee. In the event that the Company becomes a Publicly Held
Corporation (as hereinafter defined), then the Committee shall consist of at
least two directors, each of whom shall be (i) a “non-employee director”
within the meaning of Rule 16b-3 (or any successor rule) under the
Exchange Act, unless administration of the Plan by “non-employee directors” is
not then required in order for exemptions under Rule 16b-3 to apply to
transactions under the Plan, (ii) an “outside director” within the meaning of
Section 162(m) of the Code, and (iii) “Independent”, the failure of the
Committee to be so comprised shall not invalidate any Award that otherwise
satisfies the terms of the Plan.
(j) “
Consultant
”
means any Person (other than an Employee or a Director, solely with respect to
rendering services in such Person’s capacity as a director) who is engaged by
the Company or any Related Entity to render consulting or advisory services to
the Company or such Related Entity.
(k) “
Continuous
Service
” means the uninterrupted provision of services to the Company or
any Related Entity in any capacity of Employee, Director, Consultant or other
service provider. Continuous Service shall not be considered to be
interrupted in the case of (i) any approved leave of absence, (ii) transfers
among the Company, any Related Entities, or any successor entities, in any
capacity of Employee, Director, Consultant or other service provider, or (iii)
any change in status as long as the individual remains in the service of the
Company or a Related Entity in any capacity of Employee, Director, Consultant or
other service provider (except as otherwise provided in the Award
Agreement). An approved leave of absence shall include sick leave,
military leave, or any other authorized personal leave.
(l) “
Deferred
Stock
” means a right to receive Shares, including Restricted Stock, cash
measured based upon the value of Shares or a combination thereof, at the end of
a specified deferral period.
(m) “
Deferred Stock
Award
” means an Award of Deferred Stock granted to a Participant under
Section 6(e) hereof.
(n) “
Director
”
means a member of the Board or the board of directors of any Related
Entity.
(o) “
Disability
”
means a permanent and total disability (within the meaning of Section 22(e) of
the Code), as determined by a medical doctor satisfactory to the
Committee.
(p) “
Discounted
Option
” means any Option Awarded under Section 6(b)
hereof with an exercise price that is less than the Fair Market Value
of a Share on the date of grant.
(q) “
Discounted Stock
Appreciation Right
” means any Stock Appreciation Right Awarded under
Section 6(c) hereof with an exercise price that is less than the Fair
Market Value of a Share on the date of grant.
(r) “
Dividend
Equivalent
” means a right, granted to a Participant under Section 6(g)
hereof, to receive cash, Shares, other Awards or other property equal in value
to dividends paid with respect to a specified number of Shares, or other
periodic payments.
(s) “
Effective
Date
” means the effective date of the Plan, which shall be November 30,
2004.
(t) “
Eligible
Person
” means each officer, Director, Employee, Consultant and other
person who provides services to the Company or any Related
Entity. The foregoing notwithstanding, only Employees of the Company,
or any parent corporation or subsidiary corporation of the Company (as those
terms are defined in Sections 424(e) and (f) of the Code, respectively), shall
be Eligible Persons for purposes of receiving any Incentive Stock
Options. An Employee on leave of absence may, in the discretion of
the Committee, be considered as still in the employ of the Company or a Related
Entity for purposes of eligibility for participation in the Plan.
(u) “
Employee
”
means any person, including an officer or Director, who is an employee of the
Company or any Related Entity. The payment of a director’s fee by the
Company or a Related Entity shall not be sufficient to constitute “employment”
by the Company.
(v) “
Exchange
Act
” means the Securities Exchange Act of 1934, as amended from time to
time, including rules thereunder and successor provisions and rules
thereto.
(w) “
Fair Market
Value
” means the fair market value of Shares, Awards or other property as
determined by the Committee, or under procedures established by the
Committee. Unless otherwise determined by the Committee, the Fair
Market Value of a Share as of any given date after which the Company is a
Publicly Held Corporation shall be the closing sale price per Share reported on
a consolidated basis for stock listed on the principal stock exchange or market
on which Shares are traded on the date immediately preceding the date as of
which such value is being determined (or as of such later measurement date as
determined by the Committee on the date the Award is authorized by the
Committee), or, if there is no sale on that date, then on the last previous day
on which a sale was reported.
(x) “
Good
Reason
” shall, with respect to any Participant, have the meaning
specified in the Award Agreement. In the absence of any definition in
the Award Agreement, “Good Reason” shall have the equivalent meaning or the same
meaning as “good reason” or “for good reason” set forth in any employment,
consulting or other agreement for the performance of services between the
Participant and the Company or a Related Entity or, in the absence of any such
agreement or any such definition in such agreement, such term shall mean (i) the
assignment to the Participant of any duties inconsistent in any material respect
with the Participant's duties or responsibilities as assigned by the Company or
a Related Entity, or any other action by the Company or a Related Entity which
results in a material diminution in such duties or responsibilities, excluding
for this purpose an isolated, insubstantial and inadvertent action not taken in
bad faith and action which is remedied by the Company or a Related Entity
promptly after receipt of notice thereof given by the Participant; (ii) any
material failure by the Company or a Related Entity to comply with its
obligations to the Participant as agreed upon, other than an isolated,
insubstantial and inadvertent failure not occurring in bad faith and a failure
which is remedied by the Company or a Related Entity promptly after receipt of
notice thereof given by the Participant; or (iii) the Company's or Related
Entity’s requiring the Participant to be based at any office or location outside
of fifty miles from the location of employment or service as of the date of
Award, except for travel reasonably required in the performance of the
Participant’s responsibilities.
(y) “
Incentive Stock
Option
” means any Option intended to be designated as an incentive stock
option within the meaning of Section 422 of the Code or any successor provision
thereto.
(z) “
Independent
”,
when referring to either the Board or members of the Committee, shall have the
same meaning as used in the rules of the Listing Market.
(aa) “
Incumbent
Board
” means the Incumbent Board as defined in Section 9(b)(ii)
hereof.
(bb)
“Listing
Market”
means the New York Stock Exchange or any other national
securities exchange on which any securities of the Company are listed for
trading, and if not listed for trading, by the rules of the Nasdaq
Market.
(cc) “
Option
”
means a right granted to a Participant under Section 6(b) hereof, to purchase
Shares or other Awards at a specified price during specified time
periods.
(dd) “
Optionee
”
means a person to whom an Option is granted under this Plan or any person who
succeeds to the rights of such person under this Plan.
(ee) “
Option
Proceeds
” means the cash actually received by the Company for the
exercise price in connection with the exercise of Options that are exercised
after the Effective Date of the Plan, plus the maximum tax benefit that could be
realized by the Company as a result of the exercise of such Options, which tax
benefit shall be determined by multiplying (i) the amount that is deductible for
Federal income tax purposes as a result of any such option exercise (currently,
equal to the amount upon which the Participant's withholding tax obligation is
calculated), times (ii) the maximum Federal corporate income tax rate for the
year of exercise. With respect to Options, to the extent that a
Participant pays the exercise price and/or withholding taxes with Shares, Option
Proceeds shall not be calculated with respect to the amounts so paid in
Shares.
(ff) “
Other Stock-Based
Awards
” means Awards granted to a Participant under Section 6(i)
hereof.
(gg) “
Participant
”
means a person who has been granted an Award under the Plan which remains
outstanding, including a person who is no longer an Eligible
Person.
(hh) “
Performance
Award
” means any Award of Performance Shares or Performance Units granted
pursuant to Section 6(h) hereof.
(ii) “
Performance
Period
” means that period established by the Committee at the time any
Performance Award is granted or at any time thereafter during which any
performance goals specified by the Committee with respect to such Award are to
be measured.
(jj) “
Performance
Share
” means any grant pursuant to Section 6(h) hereof of a unit valued
by reference to a designated number of Shares, which value may be paid to the
Participant by delivery of such property as the Committee shall determine,
including cash, Shares, other property, or any combination thereof, upon
achievement of such performance goals during the Performance Period as the
Committee shall establish at the time of such grant or thereafter.
(kk) “
Performance
Unit
” means any grant pursuant to Section 6(h) hereof of a unit valued by
reference to a designated amount of property (including cash) other than Shares,
which value may be paid to the Participant by delivery of such property as the
Committee shall determine, including cash, Shares, other property, or any
combination thereof, upon achievement of such performance goals during the
Performance Period as the Committee shall establish at the time of such grant or
thereafter.
(ll) “
Person
”
shall have the meaning ascribed to such term in Section 3(a)(9) of the
Exchange Act and used in Sections 13(d) and 14(d) thereof, and shall include a
“group” as defined in Section 13(d) thereof.
(mm) “
Publicly Held
Corporation
” shall mean a publicly held corporation as that term is used
under Section 162(m)(2) of the Code.
(nn) “
Related
Entity
” means any Subsidiary, and any business, corporation, partnership,
limited liability company or other entity designated by the Board, in which the
Company or a Subsidiary holds a substantial ownership
interest, directly or indirectly.
(oo)
“Restriction
Period”
means the period of time specified by the Committee that
Restricted Stock Awards shall be subject to such restrictions on
transferability, risk of forfeiture and other restrictions, if any, as the
Committee may impose.
(pp) “
Restricted
Stock
” means any Share issued with the restriction that the holder may
not sell, transfer, pledge or assign such Share and with such risks of
forfeiture and other restrictions as the Committee, in its sole discretion, may
impose (including any restriction on the right to vote such Share and the right
to receive any dividends), which restrictions may lapse separately or in
combination at such time or times, in installments or otherwise, as the
Committee may deem appropriate.
(qq) “
Restricted Stock
Award
” means an Award granted to a Participant under Section 6(d)
hereof.
(rr) “
Rule
16b-3
” means Rule 16b-3, as from time to time in effect and applicable to
the Plan and Participants, promulgated by the Securities and Exchange Commission
under Section 16 of the Exchange Act.
(ss) “
Shares
”
means the shares of Class B Common Stock of the Company, par value $0.001 per
share, and such other securities as may be substituted (or resubstituted) for
Shares pursuant to Section 10(c) hereof.
(tt) “
Stock
Appreciation Right
” means a right granted to a Participant under Section
6(c) hereof.
(uu) “
Subsidiary
”
means any corporation or other entity in which the Company has a direct or
indirect ownership interest of 50% or more of the total combined voting power of
the then outstanding securities or interests of such corporation or other entity
entitled to vote generally in the election of directors or in which the Company
has the right to receive 50% or more of the distribution of profits or 50% or
more of the assets on liquidation or dissolution.
(vv) “
Substitute
Awards
” means Awards granted or Shares issued by the Company in
assumption of, or in substitution or exchange for, Awards previously granted, or
the right or obligation to make future Awards, by a company (i) acquired by the
Company or any Related Entity, (ii) which becomes a Related Entity after the
date hereof, or (iii) with which the Company or any Related Entity
combines.
3.
Administration
.
(a)
Authority
of the Committee
. The Plan shall be administered by the
Committee; provided, however, that except as otherwise expressly provided in
this Plan, the Board may exercise any power or authority granted to the
Committee under this Plan and in that case, references herein shall be deemed to
include references to the Board. The Committee shall have full and
final authority, subject to and consistent with the provisions of the Plan, to
select Eligible Persons to become Participants, grant Awards, determine the
type, number and other terms and conditions of, and all other matters relating
to, Awards, prescribe Award Agreements (which need not be identical for each
Participant) and rules and regulations for the administration of the Plan,
construe and interpret the Plan and Award Agreements and correct defects, supply
omissions or reconcile inconsistencies therein, and to make all other decisions
and determinations as the Committee may deem necessary or advisable for the
administration of the Plan. In exercising any discretion granted to
the Committee under the Plan or pursuant to any Award, the Committee shall not
be required to follow past practices, act in a manner consistent with past
practices, or treat any Eligible Person or Participant in a manner consistent
with the treatment of any other Eligible Persons or
Participants.
(b)
Manner
of Exercise of Committee Authority.
In the
event that the Company becomes a Publicly Held Corporation, the Committee, and
not the Board, shall exercise sole and exclusive discretion (i) on any matter
relating to a Participant then subject to Section 16 of the Exchange Act
with respect to the Company to the extent necessary in order that transactions
by such Participant shall be exempt under Rule 16b-3 under the Exchange Act,
(ii) with respect to any Award that is intended to qualify as “performance-based
compensation” under Section 162(m), to the extent necessary in order for such
Award to so qualify; and (iii) with respect to any Award to an Independent
Director. Any action of the Committee shall be final, conclusive and
binding on all persons, including the Company, its Related Entities, Eligible
Persons, Participants, Beneficiaries, transferees under Section 10(b) hereof or
other persons claiming rights from or through a Participant, and
shareholders. The express grant of any specific power to the
Committee, and the taking of any action by the Committee, shall not be construed
as limiting any power or authority of the Committee. The Committee
may delegate to officers or managers of the Company or any Related Entity, or
committees thereof, the authority, subject to such terms and limitations as the
Committee shall determine, to perform such functions, including administrative
functions as the Committee may determine to the extent that such delegation will
not result in the loss of an exemption under Rule 16b-3(d)(1) for Awards granted
to Participants subject to Section 16 of the Exchange Act in respect of the
Company and will not cause Awards intended to qualify as “performance-based
compensation” under Code Section 162(m) to fail to so qualify. The
Committee may appoint agents to assist it in administering the
Plan. Any such delegations shall be set forth in a written instrument
that specifies the persons authorized to act thereunder and the terms and
limitations of such authority, which writing shall be delivered to the Company’s
Chief Financial Officer, Principal Accounting Officer and General Counsel before
any authority may be exercised.
(c)
Limitation
of Liability
. The Committee and the Board, and each member
thereof, shall be entitled to, in good faith, rely or act upon any report or
other information furnished to him or her by any officer or Employee, the
Company's independent auditors, Consultants or any other agents assisting in the
administration of the Plan. Members of the Committee and the Board,
and any officer or Employee acting at the direction or on behalf of the
Committee or the Board, shall not be personally liable for any action or
determination taken or made in good faith with respect to the Plan, and shall,
to the extent permitted by law, be fully indemnified and protected by the
Company with respect to any such action or determination.
4.
Shares Subject to
Plan
.
(a)
Limitation
on Overall Number of Shares Available for Delivery Under
Plan
. Subject to adjustment as provided in Section 10(c)
hereof, the total number of Shares reserved and available for delivery under the
Plan shall be 10,000,000. Any Shares that are subject to Awards of
Options or Stock Appreciation Rights shall be counted against this limit as one
(1) Share for every one (1) Share granted. Any Shares that are
subject to Awards other than Options or Stock Appreciation Rights shall be
counted against this limit as one and one-half (1.5) Shares for every one (1)
Share granted. Any Shares delivered under the Plan may consist, in
whole or in part, of authorized and unissued shares or treasury
shares.
(b)
Application
of Limitation to Grants of Awards.
. No Award may be granted if
the number of Shares to be delivered in connection with such an Award exceeds
the number of Shares remaining available for delivery under the Plan, minus the
number of Shares deliverable in settlement of or relating to then outstanding
Awards. The Committee may adopt reasonable counting procedures to
ensure appropriate counting, avoid double counting (as, for example, in the case
of tandem or substitute awards) and make adjustments if the number of Shares
actually delivered differs from the number of Shares previously counted in
connection with an Award.
(c)
Availability
of Shares Not Delivered under Awards and Adjustments to
Limits.
(i) If
any Awards are forfeited, expire or otherwise terminate without issuance of such
Shares, or any Award is settled for cash or otherwise does not result in the
issuance of all or a portion of the Shares subject to such Award, the Shares to
which those Awards were subject, shall, to the extent of such forfeiture,
expiration, termination, cash settlement or non-issuance, again be available for
delivery with respect to Awards under the Plan, subject to Section 4(c)(iii)(iv)
below.
(ii) In
the event that any Option or other Award granted hereunder is exercised through
the tendering of Shares (either actually or by attestation) or by the
withholding of Shares by the Company, or withholding tax liabilities arising
from such option or other award are satisfied by the tendering of Shares (either
actually or by attestation) or by the withholding of Shares by the Company, then
only the number of Shares issued net of the Shares tendered or withheld shall be
counted for purposes of
determining the maximum
number of Shares available for grant under the Plan.
(iii) Substitute
Awards shall not reduce the Shares authorized for delivery under the Plan or
authorized for delivery to a Participant in any period. Additionally,
in the event that a company acquired by the Company or any Related Entity or
with which the Company or any Related Entity combines has shares available under
a pre-existing plan approved by its shareholders, the shares available for
delivery pursuant to the terms of such pre-existing plan (as adjusted, to the
extent appropriate, using the exchange ratio or other adjustment or valuation
ratio or formula used in such acquisition or combination to determine the
consideration payable to the holders of common stock of the entities party to
such acquisition or combination) may be used for Awards under the Plan and shall
not reduce the Shares authorized for delivery under the Plan; if and to the
extent that the use of such Shares would not require approval of the Company’s
shareholders under the rules of the Listing Market.
(iv) Any
Share that again becomes available for delivery pursuant to this Section 4(c)
shall be added back as one (1) Share if such Share was subject to an Option or
Stock Appreciation Right granted under the Plan, and as one and one-half (1.5)
Shares if such Share was subject to an Award other than an Option or Stock
Appreciation Right granted under the Plan.
(v) Notwithstanding
anything in this Section 4(c) to the contrary but subject to adjustment as
provided in Section 10(c) hereof, the maximum aggregate number of Shares that
may be delivered under the Plan as a result of the exercise of the Incentive
Stock Options shall be
[ ]
Shares.
5.
Eligibility
. Awards
may be granted under the Plan only to Eligible Persons.
6.
Specific Terms of
Awards
.
(a)
General
. Awards
may be granted on the terms and conditions set forth in this Section
6. In addition, the Committee may impose on any Award or the exercise
thereof, at the date of grant or thereafter (subject to Section 10(e)), such
additional terms and conditions, not inconsistent with the provisions of the
Plan, as the Committee shall determine, including terms requiring forfeiture of
Awards in the event of termination of the Participant’s Continuous Service and
terms permitting a Participant to make elections relating to his or her
Award. Except as otherwise expressly provided herein, the Committee
shall retain full power and discretion to accelerate, waive or modify, at any
time, any term or condition of an Award that is not mandatory under the
Plan. Except in cases in which the Committee is authorized to require
other forms of consideration under the Plan, or to the extent other forms of
consideration must be paid to satisfy the requirements of Georgia law, no
consideration other than services may be required for the grant (as opposed to
the exercise) of any Award.
(b)
Options
. The
Committee is authorized to grant Options to any Eligible Person on the following
terms and conditions:
(i)
Exercise
Price
. Other than in connection with Substitute Awards, the
exercise price per Share purchasable under an Option shall be determined by the
Committee, provided that such exercise price shall not, in the case of Incentive
Stock Options, be less than 100% of the Fair Market Value of a Share on the date
of grant of the Option and shall not, in any event, be less than the par value
of a Share on the date of grant of the Option. If an Employee owns or
is deemed to own (by reason of the attribution rules applicable under Section
424(d) of the Code) more than 10% of the combined voting power of all classes of
stock of the Company (or any parent corporation or subsidiary corporation of the
Company, as those terms are defined in Sections 424(e) and (f) of the Code,
respectively) and an Incentive Stock Option is granted to such Employee, the
exercise price of such Incentive Stock Option (to the extent required by the
Code at the time of grant) shall be no less than 110% of the Fair Market Value
of a Share on the date such Incentive Stock Option is granted. Other than
pursuant to Section 10(c)(i) and (ii), the Committee shall not be permitted to
(A) lower the exercise price per Share of an Option after it is granted, (B)
cancel an Option when the exercise price per Share exceeds the Fair Market Value
of the underlying Shares in exchange for another Award (other than in connection
with Substitute Awards), or (C) take any other action with respect to
an Option that may be treated as a repricing pursuant to the applicable rules of
the Listing Market, without approval of the Company's
shareholders.
(ii)
Time and Method
of Exercise
. The Committee shall determine the time or times
at which or the circumstances under which an Option may be exercised in whole or
in part (including based on achievement of performance goals and/or future
service requirements), the time or times at which Options shall cease to be or
become exercisable following termination of Continuous Service or upon other
conditions, the methods by which the exercise price may be paid or deemed to be
paid (including in the discretion of the Committee a cashless exercise
procedure), the form of such payment, including, without limitation, cash,
Shares (including without limitation the withholding of Shares otherwise
deliverable pursuant to the Award), other Awards or awards granted under other
plans of the Company or a Related Entity, or other property (including notes or
other contractual obligations of Participants to make payment on a deferred
basis provided that such deferred payments are not in violation of Section 13(k)
of the Exchange Act, or any rule or regulation adopted thereunder or any other
applicable law), and the methods by or forms in which Shares will be delivered
or deemed to be delivered to Participants.
(iii)
Incentive Stock
Options
. The terms of any Incentive Stock Option granted under
the Plan shall comply in all respects with the provisions of Section 422 of the
Code. Anything in the Plan to the contrary notwithstanding, no term
of the Plan relating to Incentive Stock Options (including any Stock
Appreciation Right issued in tandem therewith) shall be interpreted, amended or
altered, nor shall any discretion or authority granted under the Plan be
exercised, so as to disqualify either the Plan or any Incentive Stock Option
under Section 422 of the Code, unless the Participant has first requested, or
consents to, the change that will result in such
disqualification. Thus, if and to the extent required to comply with
Section 422 of the Code, Options granted as Incentive Stock Options shall be
subject to the following special terms and conditions:
(A) the
Option shall not be exercisable for more than ten years after the date such
Incentive Stock Option is granted; provided, however, that if a Participant owns
or is deemed to own (by reason of the attribution rules of Section 424(d) of the
Code) more than 10% of the combined voting power of all classes of stock of the
Company (or any parent corporation or subsidiary corporation of the Company, as
those terms are defined in Sections 424(e) and (f) of the Code, respectively)
and the Incentive Stock Option is granted to such Participant, the term of the
Incentive Stock Option shall be (to the extent required by the Code at the time
of the grant) for no more than five years from the date of grant;
and
(B) The
aggregate Fair Market Value (determined as of the date the Incentive Stock
Option is granted) of the Shares with respect to which Incentive Stock Options
granted under the Plan and all other option plans of the Company (and any parent
corporation or subsidiary corporation of the Company, as those terms are defined
in Sections 424(e) and (f) of the Code, respectively) that become exercisable
for the first time by the Participant during any calendar year shall not (to the
extent required by the Code at the time of the grant) exceed
$100,000.
(c)
Stock
Appreciation Rights
. The Committee may grant Stock
Appreciation Rights to any Eligible Person in conjunction with all or part of
any Option granted under the Plan or at any subsequent time during the term of
such Option (a “Tandem Stock Appreciation Right”), or without regard to any
Option (a “Freestanding Stock Appreciation Right”), in each case upon such terms
and conditions as the Committee may establish in its sole discretion, not
inconsistent with the provisions of the Plan, including the
following:
(i)
Right to
Payment
. A Stock Appreciation Right shall confer on the
Participant to whom it is granted a right to receive, upon exercise thereof, the
excess of (A) the Fair Market Value of one Share on the date of exercise over
(B) the grant price of the Stock Appreciation Right as determined by the
Committee. The grant price of a Stock Appreciation
Right shall not be less than 100% of the Fair Market Value of a Share
on the date of grant, in the case of a Freestanding Stock Appreciation Right, or
less than the associated Option exercise price, in the case of a Tandem Stock
Appreciation Right. Other than pursuant to Section 10(c)(i) and (ii),
the Committee shall not be permitted to (A) lower the grant price per Share of a
Stock Appreciation Right after it is granted, (B) cancel a Stock Appreciation
Right when the grant price per Share exceeds the Fair Market Value of the
underlying Shares in exchange for another Award (other than in connection
with Substitute Awards), or (C) take any other action with respect to
a Stock Appreciation Right that may be treated as a repricing pursuant to the
applicable rules of the Listing Market, without shareholder
approval.
(ii)
Other
Terms
. The Committee shall determine at the date of grant or
thereafter, the time or times at which and the circumstances under which a Stock
Appreciation Right may be exercised in whole or in part (including based on
achievement of performance goals and/or future service requirements), the time
or times at which Stock Appreciation Rights shall cease to be or become
exercisable following termination of Continuous Service or upon other
conditions, the method of exercise, method of settlement, form of consideration
payable in settlement, method by or forms in which Shares will be delivered or
deemed to be delivered to Participants, whether or not a Stock Appreciation
Right shall be in tandem or in combination with any other Award, and any other
terms and conditions of any Stock Appreciation Right.
(iii)
Tandem Stock
Appreciation Rights
. Any Tandem Stock Appreciation Right may be granted
at the same time as the related Option is granted or, for Options that are not
Incentive Stock Options, at any time thereafter before exercise or expiration of
such Option. Any Tandem Stock Appreciation Right related to an Option
may be exercised only when the related Option would be exercisable and the Fair
Market Value of the Shares subject to the related Option exceeds the exercise
price at which Shares can be acquired pursuant to the Option. In
addition, if a Tandem Stock Appreciation Right exists with respect to less than
the full number of Shares covered by a related Option, then an exercise or
termination of such Option shall not reduce the number of Shares to which the
Tandem Stock Appreciation Right applies until the number of Shares then
exercisable under such Option equals the number of Shares to which the Tandem
Stock Appreciation Right applies. Any Option related to a Tandem Stock
Appreciation Right shall no longer be exercisable to the extent the Tandem Stock
Appreciation Right has been exercised, and any Tandem Stock Appreciation Right
shall no longer be exercisable to the extent the related Option has been
exercised.
(d)
Restricted
Stock Awards
. The Committee is authorized to grant Restricted
Stock Awards to any Eligible Person on the following terms and
conditions:
(i)
Grant and
Restrictions
. Restricted Stock Awards shall be subject to such
restrictions on transferability, risk of forfeiture and other restrictions, if
any, as the Committee may impose, or as otherwise provided in this Plan during
the Restriction Period. The terms of any Restricted Stock Award
granted under the Plan shall be set forth in a written Award Agreement which
shall contain provisions determined by the Committee and not inconsistent with
the Plan. The restrictions may lapse separately or in combination at
such times, under such circumstances (including based on achievement of
performance goals and/or future service requirements), in such installments or
otherwise, as the Committee may determine at the date of grant or
thereafter. Except to the extent restricted under the terms of the
Plan and any Award Agreement relating to a Restricted Stock Award, a Participant
granted Restricted Stock shall have all of the rights of a shareholder,
including the right to vote the Restricted Stock and the right to receive
dividends thereon (subject to any mandatory reinvestment or other requirement
imposed by the Committee). During the period that the Restriction
Stock Award is subject to a risk of forfeiture, subject to Section 10(b) below
and except as otherwise provided in the Award Agreement, the Restricted Stock
may not be sold, transferred, pledged, hypothecated, margined or otherwise
encumbered by the Participant.
(ii)
Forfeiture
. Except
as otherwise determined by the Committee, upon termination of a Participant's
Continuous Service during the applicable Restriction Period, the Participant's
Restricted Stock that is at that time subject to a risk of forfeiture that has
not lapsed or otherwise been satisfied shall be forfeited and reacquired by the
Company; provided that, subject to the limitations set forth in Section 6(j)(ii)
hereof, the Committee may provide, by rule or regulation or in any Award
Agreement, or may determine in any individual case, that forfeiture conditions
relating to Restricted Stock Awards shall be waived in whole or in part in the
event of terminations resulting from specified causes, and the Committee may in
other cases waive in whole or in part the forfeiture of Restricted
Stock.
(iii)
Certificates for
Stock
. Restricted Stock granted under the Plan may be
evidenced in such manner as the Committee shall determine. If
certificates representing Restricted Stock are registered in the name of the
Participant, the Committee may require that such certificates bear an
appropriate legend referring to the terms, conditions and restrictions
applicable to such Restricted Stock, that the Company retain physical possession
of the certificates, and that the Participant deliver a stock power to the
Company, endorsed in blank, relating to the Restricted Stock.
(iv)
Dividends and
Splits
. As a condition to the grant of a Restricted Stock
Award, the Committee may require or permit a Participant to elect that any cash
dividends paid on a Share of Restricted Stock be automatically reinvested in
additional Shares of Restricted Stock or applied to the purchase of additional
Awards under the Plan. Unless otherwise determined by the Committee,
Shares distributed in connection with a stock split or stock dividend, and other
property distributed as a dividend, shall be subject to restrictions and a risk
of forfeiture to the same extent as the Restricted Stock with respect to which
such Shares or other property have been distributed.
(e)
Deferred
Stock Award
. The Committee is authorized to grant Deferred
Stock Awards to any Eligible Person on the following terms and
conditions:
(i)
Award and
Restrictions
. Satisfaction of a Deferred Stock Award shall
occur upon expiration of the deferral period specified for such Deferred Stock
Award by the Committee (or, if permitted by the Committee, as elected by the
Participant). In addition, a Deferred Stock Award shall be subject to
such restrictions (which may include a risk of forfeiture) as the Committee may
impose, if any, which restrictions may lapse at the expiration of the deferral
period or at earlier specified times (including based on achievement of
performance goals and/or future service requirements), separately or in
combination, in installments or otherwise, as the Committee may
determine. A Deferred Stock Award may be satisfied by delivery of
Shares, cash equal to the Fair Market Value of the specified number of Shares
covered by the Deferred Stock, or a combination thereof, as determined by the
Committee at the date of grant or thereafter. Prior to satisfaction
of a Deferred Stock Award, a Deferred Stock Award carries no voting or dividend
or other rights associated with Share ownership.
(ii)
Forfeiture
. Except
as otherwise determined by the Committee, upon termination of a Participant's
Continuous Service during the applicable deferral period or portion thereof to
which forfeiture conditions apply (as provided in the Award Agreement evidencing
the Deferred Stock Award), the Participant's Deferred Stock Award that is at
that time subject to a risk of forfeiture that has not lapsed or otherwise been
satisfied shall be forfeited; provided that, subject to the limitations set
forth in Section 6(j)(ii) hereof, the Committee may provide, by rule or
regulation or in any Award Agreement, or may determine in any individual case,
that forfeiture conditions relating to a Deferred Stock Award shall be waived in
whole or in part in the event of terminations resulting from specified causes,
and the Committee may in other cases waive in whole or in part the forfeiture of
any Deferred Stock Award.
(iii)
Dividend
Equivalents
. Unless otherwise determined by the Committee at
the date of grant, any Dividend Equivalents that are granted with respect to any
Deferred Stock Award shall be either (A) paid with respect to such Deferred
Stock Award at the dividend payment date in cash or in Shares of unrestricted
stock having a Fair Market Value equal to the amount of such dividends, or (B)
deferred with respect to such Deferred Stock Award and the amount or value
thereof automatically deemed reinvested in additional Deferred Stock, other
Awards or other investment vehicles, as the Committee shall determine or permit
the Participant to elect. The applicable Award Agreement shall
specify whether any Dividend Equivalents shall be paid at the dividend payment
date, deferred or deferred at the election of the Participant. If the
Participant may elect to defer the Dividend Equivalents, such election shall be
made within 30 days after the grant date of the Deferred Stock Award, but in no
event later than 12 months before the first date on which any portion of such
Deferred Stock Award vests.
(f)
Bonus Stock and
Awards in Lieu of Obligations
. The Committee is authorized to
grant Shares to any Eligible Persons as a bonus, or to grant Shares or other
Awards in lieu of obligations to pay cash or deliver other property under the
Plan or under other plans or compensatory arrangements, provided that, in the
case of Eligible Persons subject to Section 16 of the Exchange Act, the amount
of such grants remains within the discretion of the Committee to the extent
necessary to ensure that acquisitions of Shares or other Awards are exempt from
liability under Section 16(b) of the Exchange Act. Shares or Awards
granted hereunder shall be subject to such other terms as shall be determined by
the Committee.
(g)
Dividend
Equivalents
. The Committee is authorized to grant Dividend
Equivalents in connection with another Award granted to any Eligible Person
entitling the Eligible Person to receive cash, Shares, other Awards, or other
property equal in value to the dividends paid with respect to a specified number
of Shares, or other periodic payments. Dividend Equivalents may be
awarded on a free-standing basis or in connection with another
Award. The Committee may provide that Dividend Equivalents shall be
paid or distributed when accrued or shall be deemed to have been reinvested in
additional Shares, Awards, or other investment vehicles, and subject to such
restrictions on transferability and risks of forfeiture, as the Committee may
specify. Any such determination by the Committee shall be made at the
grant date of the applicable Award.
(h)
Performance
Awards
. The
Committee is authorized to grant Performance Awards to any Eligible Person
payable in cash, Shares, or other Awards, on terms and conditions established by
the Committee, subject to the provisions of Section 8 if and to the extent that
the Committee shall, in its sole discretion, determine that an Award shall be
subject to those provisions. The performance criteria to be achieved
during any Performance Period and the length of the Performance Period shall be
determined by the Committee upon the grant of each Performance Award; provided,
however, that a Performance Period shall not be shorter than 12 months nor
longer than four years. Except as provided in Section 9 or as may be
provided in an Award Agreement, Performance Awards will be distributed only
after the end of the relevant Performance Period. The performance
goals to be achieved for each Performance Period shall be conclusively
determined by the Committee and may be based upon the criteria set forth in
Section 8(b), or in the case of an Award that the Committee determines shall not
be subject to Section 8 hereof, any other criteria that the Committee, in its
sole discretion, shall determine should be used for that purpose. The
amount of the Award to be distributed shall be conclusively determined by the
Committee. Performance Awards may be paid in a lump sum or in
installments following the close of the Performance Period or, in accordance
with procedures established by the Committee, on a deferred basis.
(i)
Other Stock-Based
Awards
. The
Committee is authorized, subject to limitations under applicable law, to grant
to any Eligible Person such other Awards that may be denominated or payable in,
valued in whole or in part by reference to, or otherwise based on, or related
to, Shares, as deemed by the Committee to be consistent with the purposes of the
Plan. Other Stock-Based Awards may be granted to Participants either
alone or in addition to other Awards granted under the Plan, and such Other
Stock-Based Awards shall also be available as a form of payment in the
settlement of other Awards granted under the Plan. The Committee
shall determine the terms and conditions of such Awards. Shares
delivered pursuant to an Award in the nature of a purchase right granted under
this Section 6(i) shall be purchased for such consideration, paid for at such
times, by such methods, and in such forms, including, without limitation, cash,
Shares, other Awards or other property, as the Committee shall
determine.
(j)
Certain Vesting
Requirements and Limitations on Waiver of Forfeiture
Restrictions.
Except for certain limited situations (including
death, disability, retirement, a Change in Control referred to in Section 9,
grants to new hires to replace forfeited compensation, grants representing
payment of earned Performance Awards or other incentive compensation, Substitute
Awards or grants to Directors):
(i) Restricted
Stock Awards, Deferred Stock Awards, Performance Share Awards and Other
Stock-Based Awards (A) that are not subject to performance-based vesting
requirements shall vest over a period of not less than three years from date of
grant (but permitting pro-rata vesting over such time); (B) that are subject to
performance-based vesting requirements shall vest over a period of not less than
one year; and
(ii) The
Committee shall not waive the vesting requirements set forth in the foregoing
clause (i).
The
limitations set forth in this Section 6(j) shall not apply with respect to up to
[insert number of shares that does not exceed 5% (for a large cap company) or
10% (for a small cap company) of shares available under the Plan) Shares
(subject to adjustment as provided in Section 10(c) hereof) with respect to
which Awards have been made by Independent Directors.
7.
Certain
Provisions Applicable to Awards
.
(a)
Stand-Alone,
Additional, Tandem, and Substitute Awards
. Awards
granted under the Plan may, in the discretion of the Committee, be granted
either alone or in addition to, in tandem with, or in substitution or exchange
for, any other Award or any award granted under another plan of the Company, any
Related Entity, or any business entity to be acquired by the Company or a
Related Entity, or any other right of a Participant to receive payment from the
Company or any Related Entity. Such additional, tandem, and
substitute or exchange Awards may be granted at any time. If an Award
is granted in substitution or exchange for another Award or award, the Committee
shall require the surrender of such other Award or award in consideration for
the grant of the new Award. In addition, Awards may be granted in
lieu of cash compensation, including in lieu of cash amounts payable under other
plans of the Company or any Related Entity, in which the value of Shares subject
to the Award is equivalent in value to the cash compensation (for example,
Deferred Stock or Restricted Stock), or in which the exercise price, grant price
or purchase price of the Award in the nature of a right that may be exercised is
equal to the Fair Market Value of the underlying Shares minus the value of the
cash compensation surrendered (for example, Options or Stock Appreciation Right
granted with an exercise price or grant price “discounted” by the amount of the
cash compensation surrendered), provided that any such determination to grant an
Award in lieu of cash compensation must be made in compliance with Section 409A
of the Code.
(b)
Term of
Awards
. The
term of each Award shall be for such period as may be determined by the
Committee; provided that in no event shall the term of any Option or Stock
Appreciation Right exceed a period of ten years (or in the case of an Incentive
Stock Option such shorter term as may be required under Section 422 of the
Code).
(c)
Form and Timing
of Payment Under Awards; Deferrals
. Subject
to the
terms of
the Plan and any applicable Award Agreement, payments to be made by the Company
or a Related Entity upon the exercise of an Option or other Award or settlement
of an Award may be made in such forms as the Committee shall determine,
including, without limitation, cash, Shares, other Awards or other property, and
may be made in a single payment or transfer, in installments, or on a deferred
basis, provided that any determination to pay in installments or on a deferred
basis shall be made by the Committee at the date of grant. Any
installment or deferral provided for in the preceding sentence shall, however,
be subject to the Company’s compliance with applicable law and all applicable
rules of the Listing Market, and in a manner intended to be exempt from or
otherwise satisfy the requirements of Section 409A of the
Code. Subject to Section 7(e) hereof, the settlement of any Award may
be accelerated, and cash paid in lieu of Shares in connection with such
settlement, in the sole discretion of the Committee or upon occurrence of one or
more specified events (in addition to a Change in Control). Any such
settlement shall be at a value determined by the Committee in its sole
discretion, which, without limitation, may in the case of an Option or Stock
Appreciation Right be limited to the amount if any by which the Fair Market
Value of a Share on the settlement date exceeds the exercise or grant
price. Installment or deferred payments may be required by the
Committee (subject to Section 7(e) of the Plan, including the consent provisions
thereof in the case of any deferral of an outstanding Award not provided for in
the original Award Agreement) or permitted at the election of the Participant on
terms and conditions established by the Committee. The Committee may,
without limitation, make provision for the payment or crediting of a reasonable
interest rate on installment or deferred payments or the grant or crediting of
Dividend Equivalents or other amounts in respect of installment or deferred
payments denominated in Shares.
(d)
Exemptions from
Section 16(b) Liability.
If the
Company becomes a Publicly Held Corporation, it is the intent of the Company
that the grant of any Awards to or other transaction by a Participant who is
subject to Section 16 of the Exchange Act shall be exempt from Section 16
pursuant to an applicable exemption (except for transactions acknowledged in
writing to be non-exempt by such Participant). Accordingly, if any
provision of this Plan or any Award Agreement does not comply with the
requirements of Rule 16b-3 then applicable to any such transaction, such
provision shall be construed or deemed amended to the extent necessary to
conform to the applicable requirements of Rule 16b-3 so that such Participant
shall avoid liability under Section 16(b).
(e)
Code Section
409A
.
(i) The
Award Agreement for any Award that the Committee reasonably determines to
constitute a Section 409A Plan, and the provisions of the Plan applicable to
that Award, shall be construed in a manner consistent with the applicable
requirements of Section 409A, and the Committee, in its sole discretion and
without the consent of any Participant, may amend any Award Agreement (and the
provisions of the Plan applicable thereto) if and to the extent that the
Committee determines that such amendment is necessary or appropriate to comply
with the requirements of Section 409A of the Code.
(ii) If
any Award constitutes a “nonqualified deferred compensation plan” under Section
409A of the Code (a “Section 409A Plan”), then the Award shall be subject to the
following additional requirements, if and to the extent required to comply with
Section 409A of the Code:
(A) Payments
under the Section 409A Plan may not be made earlier than the first to occur of
(u) the Participant’s “separation from service”, (v) the date the Participant
becomes “disabled”, (w) the Participant’s death, (x) a “specified time (or
pursuant to a fixed schedule)” specified in the Award Agreement at the date of
the deferral of such compensation, (y) a “change in the ownership or effective
control of the corporation, or in the ownership of a substantial portion of the
assets” of the Company, or (z) the occurrence of an “unforeseeble
emergency”;
(B) The
time or schedule for any payment of the deferred compensation may not be
accelerated, except to the extent provided in applicable Treasury Regulations or
other applicable guidance issued by the Internal Revenue Service;
(C) Any
elections with respect to the deferral of such compensation or the time and form
of distribution of such deferred compensation shall comply with the requirements
of Section 409A(a)(4) of the Code; and
(D) In
the case of any Participant who is “specified employee”, a distribution on
account of a “separation from service” may not be made before the date which is
six months after the date of the Participant’s “separation from service” (or, if
earlier, the date of the Participant’s death).
For
purposes of the foregoing, the terms in quotations shall have the same meanings
as those terms have for purposes of Section 409A of the Code, and the
limitations set forth herein shall be applied in such manner (and only to the
extent) as shall be necessary to comply with any requirements of Section 409A of
the Code that are applicable to the Award. The Company does not make
any representation to the Participant that any Awards awarded under this Plan
will be exempt from, or satisfy, the requirements of Section 409A, and the
Company shall have no liability or other obligation to indemnify or hold
harmless any Participant or Beneficiary for any tax, additional tax, interest or
penalties that any Participant or Beneficiary may incur in the event that any
provision of this Plan, any Award Agreement, or any amendment or modification
thereof, or any other action taken with respect thereto, is deemed to violate
any of the requirements of Section 409A.
(iii) Notwithstanding
the foregoing, the Company does not make any representation to any Participant
or Beneficiary that any Awards made pursuant to this Plan are exempt from, or
satisfy, the requirements of Section 409A, and the Company shall have no
liability or other obligation to indemnify or hold harmless the Participant or
any Beneficiary for any tax, additional tax, interest or penalties that the
Participant or any Beneficiary may incur in the event that any provision of this
Plan, or any Award Agreement, or any amendment or modification thereof, or any
other action taken with respect thereto, is deemed to violate any of the
requirements of Section 409A.
8.
Code Section
162(m) Provisions
.
(a)
Covered
Employees.
If the
Company becomes a Publicly Held Corporation, then, unless otherwise specified by
the Committee, the provisions of this Section 8 shall be applicable to any
Performance Award granted to an Eligible Person who is, or is likely to be, as
of the end of the tax year in which the Company would claim a tax deduction in
connection with such Award, a Covered Employee.
(b)
Performance
Criteria
. If
a Performance Award is subject to this Section 8, then the payment or
distribution thereof or the lapsing of restrictions thereon and the distribution
of cash, Shares or other property pursuant thereto, as applicable, shall be
contingent upon achievement of one or more objective performance
goals. Performance goals shall be objective and shall otherwise meet
the requirements of Section 162(m) of the Code and regulations thereunder
including the requirement that the level or levels of performance targeted by
the Committee result in the achievement of performance goals being
“substantially uncertain.” One or more of the following business
criteria for the Company, on a consolidated basis, and/or for Related Entities,
or for business or geographical units of the Company and/or a Related Entity
(except with respect to the total shareholder return and earnings per share
criteria), shall be used by the Committee in establishing performance goals for
such Awards: (1) earnings per share; (2) revenues or margins;
(3) cash flow; (4) operating margin; (5) return on net assets,
investment, capital, or equity; (6) economic value added; (7) direct
contribution; (8) net income; pretax earnings; earnings before interest and
taxes; earnings before interest, taxes, depreciation and amortization; earnings
after interest expense and before extraordinary or special items; operating
income or income from operations; income before interest income or expense,
unusual items and income taxes, local, state or federal and excluding budgeted
and actual bonuses which might be paid under any ongoing bonus plans of the
Company; (9) working capital; (10) management of fixed costs or
variable costs; (11) identification or consummation of investment
opportunities or completion of specified projects in accordance with corporate
business plans, including strategic mergers, acquisitions or divestitures;
(12) total shareholder return; (13) debt reduction; (14) market share;
(15) entry into new markets, either geographically or by business unit; (16)
customer retention and satisfaction; (17) strategic plan development and
implementation, including turnaround plans; and/or (18) the Fair Market Value of
a Share. Any of the above goals may be determined on an absolute or
relative basis or as compared to the performance of a published or special index
deemed applicable by the Committee including, but not limited to, the Standard
& Poor’s 500 Stock Index or a group of companies that are comparable to the
Company. In determining the achievement of the performance goals, the
Committee shall exclude the impact of any (i) restructurings, discontinued
operations, extraordinary items, and other unusual or non-recurring charges,
(ii) event either not directly related to the operations of the Company or not
within the reasonable control of the Company’s management, or (iii) change in
accounting standards required by generally accepted accounting
principles.
(c)
Performance
Period; Timing For Establishing Performance Goals
. Achievement
of performance goals in respect of Performance Awards shall be measured over a
Performance Period no shorter than 12 months and no longer than four years, as
specified by the Committee. Performance goals shall be established
not later than 90 days after the beginning of any Performance Period applicable
to such Performance Awards, or at such other date as may be required or
permitted for “performance-based compensation” under Section 162(m) of the
Code.
(d)
Adjustments
. The
Committee may, in its discretion, reduce the amount of a settlement otherwise to
be made in connection with Awards subject to this Section 8, but may not
exercise discretion to increase any such amount payable to a Covered Employee in
respect of an Award subject to this Section 8. The Committee shall
specify the circumstances in which such Awards shall be paid or forfeited in the
event of termination of Continuous Service by the Participant prior to the end
of a Performance Period or settlement of Awards.
(e)
Committee
Certification
. No
Participant shall receive any payment under the Plan that is subject to this
Section 8 unless the Committee has certified, by resolution or other
appropriate action in writing, that the performance criteria and any other
material terms previously established by the Committee or set forth in the Plan,
have been satisfied to the extent necessary to qualify as "performance based
compensation" under Section 162(m) of the Code.
9.
Change in
Control
.
(a)
Effect of “Change
in Control.”
If
and only to the extent provided in any employment or other agreement between the
Participant and the Company or any Related Entity, or in any Award Agreement, or
to the extent otherwise determined by the Committee in its sole discretion and
without any requirement that each Participant be treated consistently, upon the
occurrence of a “Change in Control,” as defined in Section 9(b):
(i) Any
Option or Stock Appreciation Right that was not previously vested and
exercisable as of the time of the Change in Control, shall become immediately
vested and exercisable, subject to applicable restrictions set forth in Section
10(a) hereof.
(ii) Any
restrictions, deferral of settlement, and forfeiture conditions applicable to a
Restricted Stock Award, Deferred Stock Award or an Other Stock-Based Award
subject only to future service requirements granted under the Plan shall lapse
and such Awards shall be deemed fully vested as of the time of the Change in
Control, except to the extent of any waiver by the Participant and subject to
applicable restrictions set forth in Section 10(a) hereof.
(iii) With
respect to any outstanding Award subject to achievement of performance goals and
conditions under the Plan, the Committee may, in its discretion, deem such
performance goals and conditions as having been met as of the date of the Change
in Control.
(iv) Notwithstanding
the foregoing or any provision in any Award Agreement to the contrary, and
unless the Committee otherwise determines in a specific instance, each
outstanding Option, Stock Appreciation Right, Restricted Stock Award, Deferred
Stock Award or Other Stock-Based Award shall not be accelerated as described in
Sections 9(a)(i), (ii) and (iii), if either (A) the Company is the surviving
entity in the Change in Control and the Option, Stock Appreciation Right,
Restricted Stock Award, Deferred Stock Award or Other Stock-Based Award
continues to be outstanding after the Change in Control on the substantially
same terms and conditions as were applicable immediately prior to the Change in
Control or (B) the successor company assumes or substitutes for the applicable
Award. For the purposes of this Section 9(a)(iv), an Option, Stock
Appreciation Right, Restricted Stock Award, Deferred Stock Award or Other
Stock-Based Award shall be considered assumed or substituted for if following
the Change in Control the Award confers the right to purchase or receive, for
each Share subject to the Option, Stock Appreciation Right, Restricted Stock
Award, Deferred Stock Award or Other Stock-Based Award immediately prior to the
Change in Control, on substantially the same vesting and other terms and
conditions as were applicable to the Award immediately prior to the Change in
Control, the consideration (whether stock, cash or other securities or property)
received in the transaction constituting a Change in Control by holders of
Shares for each Share held on the effective date of such transaction (and if
holders were offered a choice of consideration, the type of consideration chosen
by the holders of a majority of the outstanding shares); provided, however, that
if such consideration received in the transaction constituting a Change in
Control is not solely common stock of the successor company or its parent or
subsidiary, the Committee may, with the consent of the successor company or its
parent or subsidiary, provide that the consideration to be received upon the
exercise or vesting of an Option, Stock Appreciation Right, Restricted Stock
Award, Deferred Stock Award or Other Stock-Based Award, for each Share subject
thereto, will be solely common stock of the successor company or its parent or
subsidiary substantially equal in fair market value to the per share
consideration received by holders of Shares in the transaction constituting a
Change in Control. The determination of such substantial equality of
value of consideration shall be made by the Committee in its sole discretion and
its determination shall be conclusive and binding. Notwithstanding the
foregoing, on such terms and conditions as may be set forth in an Award
Agreement, in the event of a termination of a Participant’s employment in such
successor company (other than for Cause) within 24 months following such Change
in Control, each Award held by such Participant at the time of the Change in
Control shall be accelerated as described in Sections 9(a)(i), (ii) and (iii)
above.
(b)
Definition of
“Change in Control”
. Unless
otherwise specified in any employment agreement between the Participant and the
Company or any Related Entity, or in an Award Agreement, a “Change in Control”
shall mean the occurrence of any of the following:
(i) The
acquisition by any Person of Beneficial Ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of more than fifty percent (50%) of
either (A) the value of then outstanding equity securities of the Company (the
“Outstanding Company Stock”) or (B) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting Securities) (the
foregoing Beneficial Ownership hereinafter being referred to as a "Controlling
Interest"); provided, however, that for purposes of this Section 9(b), the
following acquisitions shall not constitute or result in a Change in
Control: (v) any acquisition directly from the Company; (w) any
acquisition by the Company; (x) any acquisition by any Person that as of the
Effective Date owns Beneficial Ownership of a Controlling Interest; (y) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any Related Entity; or (z) any acquisition by any
entity pursuant to a transaction which complies with clauses (A), (B) and (C) of
subsection (iii) below; or
(ii) During
any period of two (2) consecutive years (not including any period prior to the
Effective Date) individuals who constitute the Board on the Effective Date (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to
the Effective Date whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or
(iii) Consummation
of a reorganization, merger, statutory share exchange or consolidation or
similar transaction involving the Company or any of its Related Entities, a sale
or other disposition of all or substantially all of the assets of the Company,
or the acquisition of assets or equity of another entity by the Company or any
of its Related Entities (each a “Business Combination”), in each case, unless,
following such Business Combination, (A) all or substantially all of the
individuals and entities who were the Beneficial Owners, respectively, of the
Outstanding Company Stock and Outstanding Company Voting Securities immediately
prior to such Business Combination beneficially own, directly or indirectly,
more than fifty percent (50%) of the value of the then outstanding equity
securities and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of members of the board of
directors (or comparable governing body of an entity that does not have such a
board), as the case may be, of the entity resulting from such Business
Combination (including, without limitation, an entity which as a result of such
transaction owns the Company or all or substantially all of the Company’s assets
either directly or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business Combination
of the Outstanding Company Stock and Outstanding Company Voting Securities, as
the case may be, (B) no Person (excluding any employee benefit plan (or related
trust) of the Company or such entity resulting from such Business Combination or
any Person that as of the Effective Date owns Beneficial Ownership of a
Controlling Interest) beneficially owns, directly or indirectly, fifty percent
(50%) or more of the value of the then outstanding equity securities of the
entity resulting from such Business Combination or the combined voting power of
the then outstanding voting securities of such entity except to the extent that
such ownership existed prior to the Business Combination and (C) at least a
majority of the members of the Board of Directors or other governing body of the
entity resulting from such Business Combination were members of the Incumbent
Board at the time of the execution of the initial agreement, or of the action of
the Board, providing for such Business Combination; or
(iv) Approval
by the shareholders of the Company of a complete liquidation or dissolution of
the Company.
10.
General
Provisions
.
(a)
Compliance With
Legal and Other Requirements
. The
Company may, to the extent deemed necessary or advisable by the Committee,
postpone the issuance or delivery of Shares or payment of other benefits under
any Award until completion of such registration or qualification of such Shares
or other required action under any federal or state law, rule or regulation,
listing or other required action with respect to the Listing Market, or
compliance with any other obligation of the Company, as the Committee, may
consider appropriate, and may require any Participant to make such
representations, furnish such information and comply with or be subject to such
other conditions as it may consider appropriate in connection with the issuance
or delivery of Shares or payment of other benefits in compliance with applicable
laws, rules, and regulations, listing requirements, or other
obligations.
(b)
Limits on
Transferability; Beneficiaries
. No
Award or other right or interest granted under the Plan shall be pledged,
hypothecated or otherwise encumbered or subject to any lien, obligation or
liability of such Participant to any party, or assigned or transferred by such
Participant otherwise than by will or the laws of descent and distribution or to
a Beneficiary upon the death of a Participant, and such Awards or rights that
may be exercisable shall be exercised during the lifetime of the Participant
only by the Participant or his or her guardian or legal representative, except
that Awards and other rights (other than Incentive Stock Options and Stock
Appreciation Rights in tandem therewith) may be transferred to one or more
Beneficiaries or other transferees during the lifetime of the Participant, and
may be exercised by such transferees in accordance with the terms of such Award,
but only if and to the extent such transfers are permitted by the Committee
pursuant to the express terms of an Award Agreement (subject to any terms and
conditions which the Committee may impose thereon). A Beneficiary,
transferee, or other person claiming any rights under the Plan from or through
any Participant shall be subject to all terms and conditions of the Plan and any
Award Agreement applicable to such Participant, except as otherwise determined
by the Committee, and to any additional terms and conditions deemed necessary or
appropriate by the Committee.
(c)
Adjustments.
(i)
Adjustments to
Awards
. In the event that any extraordinary dividend or other
distribution (whether in the form of cash, Shares, or other property),
recapitalization, forward or reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, share exchange, liquidation,
dissolution or other similar corporate transaction or event affects the Shares
and/or such other securities of the Company or any other issuer such that a
substitution, exchange, or adjustment is determined by the Committee to be
appropriate, then the Committee shall, in such manner as it may deem equitable,
substitute, exchange or adjust any or all of (A) the number and kind of
Shares which may be delivered in connection with Awards granted thereafter,
(B) the number and kind of Shares by which annual per-person Award
limitations are measured under Section 4 hereof, (C) the number and kind of
Shares subject to or deliverable in respect of outstanding Awards, (D) the
exercise price, grant price or purchase price relating to any Award and/or make
provision for payment of cash or other property in respect of any outstanding
Award, and (E) any other aspect of any Award that the Committee determines to be
appropriate.
(ii)
Adjustments in
Case of Certain Transactions
. In the event of any merger,
consolidation or other reorganization in which the Company does not survive, or
in the event of any Change in Control, any outstanding Awards may be dealt with
in accordance with any of the following approaches, without the requirement of
obtaining any consent or agreement of a Participant as such, as determined by
the agreement effectuating the transaction or, if and to the extent not so
determined, as determined by the Committee: (a) the continuation of the
outstanding Awards by the Company, if the Company is a surviving entity, (b) the
assumption or substitution for, as those terms are defined in Section 9(a)(iv)
hereof, the outstanding Awards by the surviving entity or its parent or
subsidiary, (c) full exercisability or vesting and accelerated expiration of the
outstanding Awards, or (d) settlement of the value of the outstanding Awards in
cash or cash equivalents or other property followed by cancellation of such
Awards (which value, in the case of Options or Stock Appreciation Rights, shall
be measured by the amount, if any, by which the Fair Market Value of a Share
exceeds the exercise or grant price of the Option or Stock Appreciation Right as
of the effective date of the transaction). The Committee shall give
written notice of any proposed transaction referred to in this Section 10(c)(ii)
at a reasonable period of time prior to the closing date for such transaction
(which notice may be given either before or after the approval of such
transaction), in order that Participants may have a reasonable period of time
prior to the closing date of such transaction within which to exercise any
Awards that are then exercisable (including any Awards that may become
exercisable upon the closing date of such transaction). A Participant
may condition his exercise of any Awards upon the consummation of the
transaction.
(iii)
Other
Adjustments
. The Committee (and the Board if and only to the
extent such authority is not required to be exercised by the Committee to comply
with Section 162(m) of the Code) is authorized to make adjustments in the terms
and conditions of, and the criteria included in, Awards (including Performance
Awards, or performance goals and conditions relating thereto) in recognition of
unusual or nonrecurring events (including, without limitation, acquisitions and
dispositions of businesses and assets) affecting the Company, any Related Entity
or any business unit, or the financial statements of the Company or any Related
Entity, or in response to changes in applicable laws, regulations, accounting
principles, tax rates and regulations or business conditions or in view of the
Committee's assessment of the business strategy of the Company, any Related
Entity or business unit thereof, performance of comparable organizations,
economic and business conditions, personal performance of a Participant, and any
other circumstances deemed relevant.
(d)
Taxes
. The
Company and any Related Entity are authorized to withhold from any Award
granted, any payment relating to an Award under the Plan, including from a
distribution of Shares, or any payroll or other payment to a Participant,
amounts of withholding and other taxes due or potentially payable in connection
with any transaction involving an Award, and to take such other action as the
Committee may deem advisable to enable the Company or any Related Entity and
Participants to satisfy obligations for the payment of withholding taxes and
other tax obligations relating to any Award. This authority shall
include authority to withhold or receive Shares or other property and to make
cash payments in respect thereof in satisfaction of a Participant's tax
obligations, either on a mandatory or elective basis in the discretion of the
Committee.
(e)
Changes to the
Plan and Awards
. The
Board may amend, alter, suspend, discontinue or terminate the Plan, or the
Committee's authority to grant Awards under the Plan, without the consent of
shareholders or Participants, except that any amendment or alteration to the
Plan shall be subject to the approval of the Company's shareholders not later
than the annual meeting next following such Board action if such shareholder
approval is required by any federal or state law or regulation (including,
without limitation, Rule 16b-3 or Code Section 162(m)) or the rules of the
Listing Market, and the Board may otherwise, in its discretion, determine to
submit other such changes to the Plan to shareholders for approval; provided
that, except as otherwise permitted by the Plan or Award Agreement, without the
consent of an affected Participant, no such Board action may materially and
adversely affect the rights of such Participant under the terms of any
previously granted and outstanding Award. The Committee may waive any
conditions or rights under, or amend, alter, suspend, discontinue or terminate
any Award theretofore granted and any Award Agreement relating thereto, except
as otherwise provided in the Plan; provided that, except as otherwise permitted
by the Plan or Award Agreement, without the consent of an affected Participant,
no such Committee or the Board action may materially and adversely affect the
rights of such Participant under terms of such Award. Notwithstanding
anything to the contrary, the Committee shall be authorized to amend any
outstanding Option and/or Stock Appreciation Right to reduce the exercise price
or grant price without the prior approval of the shareholders of the
Company. In addition, the Committee shall be authorized to cancel
outstanding Options and/or Stock Appreciation Rights replaced with Awards having
a lower exercise price without the prior approval of the shareholders of the
Company.
(f)
Limitation on
Rights Conferred Under Plan
. Neither
the Plan nor any action taken hereunder or under any Award shall be construed as
(i) giving any Eligible Person or Participant the right to continue as an
Eligible Person or Participant or in the employ or service of the Company or a
Related Entity; (ii) interfering in any way with the right of the Company
or a Related Entity to terminate any Eligible Person's or Participant's
Continuous Service at any time, (iii) giving an Eligible Person or
Participant any claim to be granted any Award under the Plan or to be treated
uniformly with other Participants and Employees, or (iv) conferring on a
Participant any of the rights of a shareholder of the Company including, without
limitation, any right to receive dividends or distributions, any right to vote
or act by written consent, any right to attend meetings of shareholders or any
right to receive any information concerning the Company’s business, financial
condition, results of operation or prospects, unless and until such time as the
Participant is duly issued Shares on the stock books of the Company in
accordance with the terms of an Award. None of the Company, its
officers or its directors shall have any fiduciary obligation to the Participant
with respect to any Awards unless and until the Participant is duly issued
Shares pursuant to the Award on the stock books of the Company in accordance
with the terms of an Award. Neither the Company nor any of the
Company’s officers, directors, representatives or agents is granting any rights
under the Plan to the Participant whatsoever, oral or written, express or
implied, other than those rights expressly set forth in this Plan or the Award
Agreement.
(g)
Unfunded Status
of Awards; Creation of Trusts
. The
Plan is intended to constitute an “unfunded” plan for incentive and deferred
compensation. With respect to any payments not yet made to a
Participant or obligation to deliver Shares pursuant to an Award, nothing
contained in the Plan or any Award shall give any such Participant any rights
that are greater than those of a general creditor of the Company; provided that
the Committee may authorize the creation of trusts and deposit therein cash,
Shares, other Awards or other property, or make other arrangements to meet the
Company's obligations under the Plan. Such trusts or other
arrangements shall be consistent with the “unfunded” status of the Plan unless
the Committee otherwise determines with the consent of each affected
Participant. The trustee of such trusts may be authorized to dispose
of trust assets and reinvest the proceeds in alternative investments, subject to
such terms and conditions as the Committee may specify and in accordance with
applicable law.
(h)
Nonexclusivity of
the Plan
. Neither
the adoption of the Plan by the Board nor its submission to the shareholders of
the Company for approval shall be construed as creating any limitations on the
power of the Board or a committee thereof to adopt such other incentive
arrangements as it may deem desirable including incentive arrangements and
awards which do not qualify under Section 162(m) of the Code.
(i)
Payments in the
Event of Forfeitures; Fractional Shares
. Unless
otherwise determined by the Committee, in the event of a forfeiture of an Award
with respect to which a Participant paid cash or other consideration, the
Participant shall be repaid the amount of such cash or other
consideration. No fractional Shares shall be issued or delivered
pursuant to the Plan or any Award. The Committee shall determine
whether cash, other Awards or other property shall be issued or paid in lieu of
such fractional shares or whether such fractional shares or any rights thereto
shall be forfeited or otherwise eliminated.
(j)
Governing
Law
. The
validity, construction and effect of the Plan, any rules and regulations under
the Plan, and any Award Agreement shall be determined in accordance with the
laws of the State of Georgia without giving effect to principles of conflict of
laws, and applicable federal law.
(k)
Non-U.S.
Laws
. The
Committee shall have the authority to adopt such modifications, procedures, and
subplans as may be necessary or desirable to comply with provisions of the laws
of foreign countries in which the Company or its Related Entities may operate to
assure the viability of the benefits from Awards granted to Participants
performing services in such countries and to meet the objectives of the
Plan.
(l)
Plan Effective
Date and Shareholder Approval; Termination of Plan
. The
Plan shall become effective on the Effective Date, subject to subsequent
approval, within 12 months of its adoption by the Board, by shareholders of the
Company eligible to vote in the election of directors, by a vote sufficient to
meet the requirements of Code Sections 162(m) (if applicable) and 422, Rule
16b-3 under the Exchange Act (if applicable), applicable requirements
under the rules of any stock exchange or automated quotation system on which the
Shares may be listed or quoted, and other laws, regulations, and obligations of
the Company applicable to the Plan. Awards may be granted subject to
shareholder approval, but may not be exercised or otherwise settled in the event
the shareholder approval is not obtained. The Plan shall terminate at
the earliest of (a) such time as no Shares remain available for issuance under
the Plan, (b) termination of this Plan by the Board, or (c) the tenth
anniversary of the Effective Date. Awards outstanding upon expiration
of the Plan shall remain in effect until they have been exercised or terminated,
or have expired.
EMPLOYMENT
AGREEMENT
THIS
EMPLOYMENT AGREEMENT
(“Agreement”) made and entered into on this 1st day of April, 2008 (the
"Effective Date"), by and between Vystar Corporation, a Georgia corporation
(the
"Company"), and Sandra Parker, a resident of the State of Georgia
("Employee").
In
consideration of the employment by the Company and of the compensation and
other
remuneration paid, and to be paid, by the Company and received by Employee
for
such employment, and for other good and valuable consideration, the receipt
and
sufficiency of which is hereby acknowledged by Employee, it is agreed by and
between the parties hereto as follows:
1.
Definitions.
For
purposes of this Agreement, the following terms shall have the meanings
specified below:
"
Business
"
- the
research, development, manufacturing, marketing, sales, distribution and
offering of products and services related to low-protein natural rubber latex
raw materials and products offered by the Company as of the Effective Date
and
as may be offered by Company during the term of this Agreement
.
“Competitor”
-
means
any
Person (as defined herein) offering products or services in competition with
Company or any of its subsidiaries, specifically any Person offering or involved
in the research, development, manufacturing, marketing, selling and/or
distribution of any low-protein natural rubber latex raw material or
product
.
"
Confidential
Information
"
-
information relating to the operations, customers, or finances of the Company,
or the Business, that derives value from not being generally known to other
Persons, including, but not limited to, technical or nontechnical data,
formulas, patterns, compilations, programs, devices, methods, techniques,
drawings, processes, financial data, and lists of or identifying information
about actual or potential customers or suppliers, including all customer lists,
whether or not reduced to writing, certain patented and unpatented information
relating to the research and development, manufacture or serving of the
Company's products, information concerning proposed new products, market
feasibility studies and proposed or existing marketing techniques or plans,
and
all information defined as a “Trade Secret” pursuant to the Georgia Trade
Secrets Act or otherwise by Georgia law. Confidential Information also includes
the same types of information relating to the operations, customers, finances,
or Business of any affiliate of the Company, if such information is learned
by
Employee during the term of this Agreement or in connection with Employee's
performance of Services. Con-fidential Information also includes information
disclosed to the Company by third parties that the Company is obligated to
maintain as confiden-tial. Confidential Information may include information
that
is not a Trade Secret, but Confiden-tial Information that is not also a Trade
Secret shall constitute Confidential Information only for five (5) years after
the Termination Date. Confidential Information does not include information
generally available to the public through no violation of a confidentiality
or
non-disclosure obligation owed to Company;
"
Customer
"
- any
customer of the Company in the Territory that Employee, during the term of
this
Agreement, (i) provided goods or services to or solicited on behalf of the
Company; or (ii) about whom Employee possesses Confidential
Information;
"
Person
"
- any
individual, corporation, partnership, limited liability company, association,
municipality, government agency, government, unin-corporated organization or
other entity;
"
Services
"
- the
duties and functions that Employee shall provide in the Territory as an employee
of the Company and as further outlined on Exhibit B;
"
Termination
Date
"
- the
last day Employee is employed by the Com-pany, whether the termination is
voluntary or involuntary and whether with or without cause;
“Territory”
- shall
be the geographic region in which Employee initially and/or at anytime
throughout the term of this Agreement provides the Services. Territory shall
be
more fully described in Exhibit B along with Employee’s description of
Services.
2.
Employment:
The
Company agrees to employ Employee and Employee agrees that Employee will devote
Employee’s full productive time, skill, energy, knowledge and best efforts
during the period of Employee’s employment to such duties as the Board of
Directors of the Company and/or the Employee’s Direct Supervisor (as identified
in Section 5 below) may reasonably assign to Employee, and Employee will
faithfully and diligently endeavor to the best of Employee’s ability to further
the best interest of the Company during the period of Employee’s employment.
However, Employee is not prohibited from making personal investments in any
other businesses, as long as those investments do not require Employee to
participate in the operation of the companies in which Employee invests and
such
other businesses are not in competition with the Company or any of its
subsidiaries (“Competitor”). Employee may invest in any publicly traded company
registered on a bona fide stock exchange without reservation.
3.
Terms
of Employment:
Employee's employment will begin on the _______ day of ___________, 20__, and
will continue unless one party gives the other party of such intent to not
renew
ninety (90) days prior to each annual anniversary date, unless earlier
terminated in accordance with Section 9 herein. Notwithstanding, the foregoing,
the first 180 days of Employee’s employment shall be a probationary period
during which Company may terminate Employee without cause and without the
obligation of the Severance Payment, as described in Section 10.c. Effect of
Termination (“Probationary Period”). Termination of this Agreement during the
Probationary Period shall be effective upon written notice to Employee. At
Company’s election, in the event of Company’s termination of Employee without
cause during the Probationary Period, Company may elect to activate the
Noncompete provisions. In the event of Company’s termination of Employee for
cause, whether in the Probationary Period or otherwise, Employee shall be
obligated to comply with the Noncompete covenants.
4.
Compensation:
On the
terms and subject to the conditions of this Agreement, (i) the Company will
pay
Employee a salary and a bonus determined in accordance with Schedule A, (ii)
Employee will be entitled to participate in the Company’s Employee Stock Option
Plan as may be in effect from time to time, and (iii) the Company will provide
Employee with employee benefits consistent with those provided by the Company
to
similarly situated executives. The Company’s Employee Stock Option Plan will be
distributed to Employee. The employee benefits provided by the Company as of
the
date hereof shall also be distributed to Employee. The Company reserves the
sole
and unilateral right to modify any and all employee benefits at any time in
its
sole discretion.
5.
Title,
Duties and Conduct of Employee:
The
Employee’s initial title shall be Executive Vice President Sales and Marketing,
and shall report to William R. Doyle, President & COO, as Employee’s Direct
Supervisor. Employee shall perform such duties and functions for the Company
as
shall be specified from time to time by the Chairman or Board of Directors
of
the Company, and/or the Employee’s Direct Supervisor, including, but not limited
to the duties and functions expressly set forth on Schedule B, and which are
consistent with Employee's duties set forth on Schedule B
(“Services”).
a.
Disparagement.
Employee
shall not at any time make false, misleading or disparaging statements about
the
Company, including the Business, management, employees and/or
Customers.
b.
Prior
Agreements.
Employee
represents and warrants that Employee is not under any obligation, contractual
or otherwise, limiting, impairing or affecting Employee's performance of
Services. Upon execution of this Agreement, Employee shall give the Company
any
agreement with a prior employer or other Person purporting to limit or affect,
in any way, Employee's ability to work for the Company, to solicit customers
or
potential customers or employees or to use any type of information.
c.
Confidential
Information.
Employee
shall protect Confidential Information. Except as required in connection with
work for the Company, Employee will not use, disclose or give to others, during
or after Employee's employment, any Confidential Information.
d.
Compliance
with Company Policies and Laws.
At all
times while performing Services, Employee shall comply with all laws and
regulations applicable to Employee and/or Company. Employee shall at all times
comply with all Company policies and procedures. Failure to comply with this
Section shall be grounds for Termination For Cause, as described in Section
10
Term and Termination.
6.
Paid
Time Off, Illness or Incapacity:
Employee
is entitled to vacation paid time off and absence from Employee’s duties during
regular work hours for a total of four (4) weeks each calendar year. Employee
shall be entitled to paid time off for sick leave pursuant to Company policy.
If
Employee cannot perform his/her duties because of major illness or incapacity
for more than a total of ninety (90) days in any year, the Company may terminate
this Agreement upon thirty (30) days' written notice to Employee. Employee
is
not entitled to receive, and the Company shall not be required to pay,
Employee's compensation hereunder for absences because of major illness or
incapacity other than the total of ninety (90) days in each year granted to
Employee under this Section 6.
7.
Termination
of Agreement Upon Sale or Termination of Company's
Business:
a.
Not--with-standing
anything to the contrary contained in this Agreement, the Company may terminate
Employee's employment upon thirty (30) days' written notice to Employee upon
the
occurrence of any of the following events:
(1)
The
acquisition, directly or indirectly, of any "person" (excluding any "person"
who
on the date hereof owns or controls ten percent (10%) or more of the voting
power of the Company's common stock), as such term is used in Sections 13(d)
and
14(d) of the Securities Exchange Act of 1934, as amended, within any twelve
(12)
month period of securities of the Company representing an aggregate of fifty
percent (50%) or more of the combined voting power of the Company's then
outstanding securities; provided, that for purposes of this Paragraph (a),
"acquisition" shall not include shares which are received by a person through
gift, inheritance, under a will or otherwise through the laws of descent and
distribution;
(2)
During
any period of two consecutive years, individuals who at the beginning of such
period constitute the Board of Directors of the Company (the "Board"), cease
for
any reason to constitute at least a majority thereof, unless the election of
each new director was approved in advance by a vote of at least a majority
of
the directors then still in office who were directors at the beginning of such
period; or
(3)
The
occurrence of any other event or circumstance which is not covered by (1) or
(2)
above which the Board determines affects control of the Company and, in order
to
implement the purposes of this Agreement, adopts a resolution that such event
or
circumstance constitutes an “event” under this Paragraph 7.
b.
If
the
Company terminates Employee pursuant to Paragraph 7(a), Company will, for the
Severance Period (as defined in Paragraph 10(c)), pay Employee her then current
salary and provide Employee with Group Health Insurance, but Company shall
not
be required to pay any other compensation or provide any other
benefits.
8.
Ownership
of Information
a.
Work
For Hire Acknowledgment; Assignment.
All
writings, draw-ings, photographs, tapes, recordings, computer programs and
other
works in any tangible medium of expression, regardless of the form of medium,
which have been or are prepared by Employee, or to which Employee contributes,
in connection with Employee's employ-ment by the Company, whether patented,
copyrighted, trademarked or otherwise (collectively the "Works") and all
copyrights, patents, trademarks and other rights in and to the Works, belong
solely, irrevocably and exclusively throughout the world to the Company as
works
made for hire. However, to the extent any court or agency should conclude that
the Works (or any of them) do not constitute or qualify as a "work made for
hire," Employee hereby assigns, grants and delivers, solely, irrevocably,
exclusively and throughout the world to the Company all ownership and other
rights to the Works. Employee also agrees to cooperate with the Company and
to
execute such other further grants and assignments of all rights as the Company
from time to time reasonably may request for the purpose of evidencing,
enforcing, filing, registering or defending its ownership of the Works and
the
copyrights in them, and Employee hereby irrevoca-bly constitutes and appoints
the Company as Employee's agent and attorney-in-fact, with full power of
substitu-tion, in Employee's name, place and stead, to execute and deliver
any
and all such assignments or other instruments which Employee shall fail or
refuse promptly to execute and deliver, this power and agency being coupled
with
an interest and being irrevo-cable. Without limiting the preceding provisions
of
this Paragraph 8(a), Employee agrees that the Company may edit and otherwise
modify, and use, publish and otherwise exploit, the Works in all media and
in
such manner as the Company, in its discretion, may determine.
b.
Inventions,
Ideas and Patents.
Employee
shall disclose promptly to the Company (which shall receive it in confidence),
and only to the Company, any invention or idea of Employee (developed alone
or
with others) conceived or made during Employee's employment by the Company
(or,
if related to the Business, during employment or within one year after the
Termination Date). Employee assigns to the Company any such invention or idea
in
any way connected with Employee's employment or related to the Business,
research or development of the Company, or demonstrably anticipated research
or
development of the Company, and will cooperate with the Company and sign all
papers deemed necessary by the Company to enable it to obtain, maintain, protect
and defend patents covering such inventions and ideas and to confirm the
exclusive ownership of the Company of all rights in such inventions, ideas
and
patents, and irrevoca-bly appoints the Company as its agent to execute and
deliver any assignments or documents Employee fails or refuses to execute and
deliver promptly, this power and agency being coupled with an interest and
being
irrevocable. This constitutes written notification to Employee that this
assignment does not apply to an invention for which no equipment, supplies,
facility or Trade Secret information of the Company or any Customer was used
and
which was developed entirely on Employee's own time, unless (a) the invention
relates (i) directly to the Business or (ii) to the actual or demonstrably
anticipated research or develop-ment of the Company, or (b) the invention
results from any work performed by Employee for the Company.
9.
Nonsolicitation;
Noncompetition
.
a.
Non-Solicitation
of Customers.
During
the term of this Agreement, and for one (1) year after the Termination Date,
Employee will not solicit Customers within the Territory for the purpose of
providing products or services comparable to those provided by the Business,
except on behalf of the Company.
b.
Non-Solicitation
of Company Employees.
During
the term of this Agreement and for one (1) year after the Termination Date,
Employee will not solicit for employment with another Person anyone who is
an
employee of the Company.
c.
Non-Compete.
During
the term of this Agreement and for one (1) year after the Termination Date,
Employee will not provide services substantially similar to Services within
the
Territory to any Competitor. Employee shall be prohibited from providing in
the
Territory in competition with the Company in accordance with the terms of this
Agreement, including the Services expressly set forth on Schedule B attached
hereto. Employee acknowledges that Employee has been informed of and discussed
with the Company the specific activities that Employee will perform as Services
and that Employee understands the scope of the activities that constitute
Services and the Territory under this Agreement.
d.
Future
Employment Opportunities.
Prior to
and for one (1) year after the Termination Date, Employee shall (a) provide
any
employer with a copy of this Agreement, and (b) upon accepting any position,
provide the Company with the employer's name and a description of the services,
if any, Employee will provide for such employer.
10.
Termination
.
At all
times, Employee’s employment shall be subject to “employment at will”. This
Agreement and the employment of Employee may be terminated as
follows:
a.
Without
Cause
.
Either
party may terminate this Agreement upon thirty (30) days notice to the other
party.
b.
For
Cause.
(1)
By
the
Company (i) pursuant to Paragraphs 6 or 7, (ii) upon conviction of the Employee
of any felony or material misdemeanor under federal, state or local laws or
ordinances, except traffic violations (iii) upon the failure of Employee to
diligently or competently discharge the duties assigned to him pursuant to
this
Agreement; or
(2)
(i)
By
Employee upon thirty (30) days' written notice to the Company for any breach
of
this Agreement by Company and failure to cure within that thirty (30) day notice
period; or
(3)
By
the
Company upon any breach by Employee of any of the terms and conditions of this
Agreement or the breach by Employee of any representation or warranty made
to
the Company herein or in any other agreement, document or instrument executed
by
Employee and delivered to the Company, or should any representation or warranty
made by Employee hereunder or thereunder prove to have been false or misleading
in any material respect when made or furnished; or
(4)
By
the
Company upon the death of Employee.
c.
Effect
of Termination.
(1)
In
the
event Employee is terminated by the Company without cause (other than during
the
Probationary Period pursuant to Paragraph 3 the Company shall (i) pay Employee
his then current salary and provide Employee with Group Health Insurance, but
no
other compensation or benefits, for three (3) months (“Severance Period”)
beginning with the date of termination (“Severance Payment”). If Employee is
terminated for cause or Employee terminates this Agreement without cause,
Employee shall be entitled only to compensation accrued through the date of
Termination and all benefits accrued as of such date, and shall not be entitled
to any Severance Payment described herein, but shall remain obligated to the
Non-Compete and Non-Severance obligations.
(2)
Return
of Materials.
On the
Termination Date or for any reason or at any time at the Company's request,
Employee will deliver promptly to the Company all materials, documents, plans,
records, notes, manuals, subcontracts, procedures, customer lists, and any
other
papers and any copies thereof in Em-ployee's possession, custody or control
relating to the Company or the Business, whether defined as Confidential
Information, Trade Secret or otherwise, all of which at all times shall be
the
property of the Company.
11.
Miscellaneous
.
a.
Assignability.
(1)
This
Agreement may be assigned by the Company to any successor in interest to its
business, which successor in interest shall be bound herein to the same extent
as the Company. Employee agrees to perform his duties for such successor in
interest to the same extent as for the Company.
(2)
This
is a personal agreement on the part of Employee and may not be sold, assigned,
transferred or conveyed by Employee.
b.
No
Waiver
.
The
waiver by either party of a breach of any provision of this Agreement by the
other party shall not operate or be construed as a waiver of any subsequent
breach by the other party.
c.
Governing
Law and Jurisdiction
.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Georgia. Any cause of action shall be filed in and the parties agree
to
subject themselves to the jurisdiction of any State or Federal court of
competent jurisdiction located in Atlanta, Georgia.
d.
Entire
Agreement
.
This
Agreement, together with the Employee confidential Information, Copyright and
Invention Assignment Agreement, attached hereto as Exhibit C, states the entire
agreement and understanding between the parties and supersedes all prior
understandings and agreements.
e.
No
Modification
.
No
change
or modification to this Agreement shall be valid unless in writing and signed
by
both parties hereto.
f.
Independence
of Covenants
.
The
covenants contained herein shall be construed as agreements independent of
each
other and of any other provision of this or any other contract between the
parties hereto, and the existence of any claim or cause of action by Employee
against the Company, whether predicated upon this or any other contract, shall
not constitute a defense to the enforcement by the Company of said
covenants.
g
.
Right
to Injunctive Relief
.
Employee
recognizes and agrees that the injury the Company will suffer in the event
of
the Employee's breach of any covenant or agreement contained herein cannot
be
compensated by monetary damages alone, and Employee therefore agrees that the
Company, in addition and without limiting any other remedies or rights that
it
may have, either under his Agreement or otherwise, shall have the right to
obtain an injunction against Employee from any court of competent jurisdiction
enjoining any such breach without having to show or prove damages or
injury.
h.
Jury
Trial Waiver
.
Both
parties hereby waive their right to a trial by jury in the event of any dispute
or cause of action regarding this Agreement.
IN
WITNESS WHEREOF
,
the
undersigned have executed this Agreement as of the day and year first above
written.
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VYSTAR
CORPORATION
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By:
|
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Name:
William R. Doyle
|
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Title:
CEO
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EMPLOYEE:
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Name:
Sandra Parker
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(THE
REMAINDER OF THIS PAGE INTENTIONALLY LEFT
BLANK)
Schedule
A - Salary and Bonus
Annual
Salary. $95,000*
Salary.
Company
shall pay Employee a Monthly Salary of $7,916.00* The Monthly Salary shall
be
payable bi-weekly according to the Company’s established payroll periods.
*
The
salary may be adjusted upon the introduction of a mutually agreed-upon
commission and/or bonus structure.
Bonus.
For the
first six (6) months of Employee’s employment, Employee shall receive in
addition to her Salary a guaranteed bonus of Five Thousand Dollars ($5,000)
per
month, which shall be divided equally among the scheduled payroll periods for
each month, and payable as part of the standard, scheduled payroll for each
month. Thereafter, a further bonus structure may be made available to Employee
depending upon the Company and Employee performance, at Company’s complete and
sole discretion. Such bonus structure may alter the base and/or commission
compensation described herein.
Commission
.
It is
anticipated by both parties that a commission structure will be mutually agreed
upon at some point during the term of this Agreement. Such commission structure
may alter the base salary and/or bonus compensation described
herein.
Stock
Option Grant.
Employee
shall be granted 200,000 stock options at the strike price of $1/share pursuant
to Company’s current 2004 Long-Term Incentive Compensation Plan, which shall
vest according to the following schedule:
50,000
vesting upon the execution of this Agreement and the execution of the
corresponding Stock Option Agreement effecting the stock option
grant.
50,000
vesting each of the next 3 years upon the anniversary date of the execution
of
the Stock Option Agreement.
Employee
may be awarded additional option grants at the Company’s and/or her Supervisor’s
sole discretion. In all cases, the execution of a Stock Option Agreement shall
be required in order to effect any such grant.
Schedule
B - Duties and Functions (“Services”)
Employee
shall be responsible for implementing and overseeing, including all budgetary
and revenue responsibility, for all Company sales and marketing activities
and
initiatives. The Territory for Employee’s scope of Services responsibility shall
be the world-wide.
(THE
REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK)
Schedule
C
Employee
Confidential Information, Copyright and Invention Assignment
Agreement