EXHIBIT 10.1

LLC OWNERSHIP INTEREST PURCHASE AGREEMENT

This LLC Ownership Interest Purchase Agreement ("Agreement") is made as of July 1, 2013 by Vystar Corporation, a Georgia corporation ("Vystar" or "Buyer") and Michael Soo, M.D., an individual resident in Durham County, North Carolina (Seller") for the consideration and on the terms set forth in this Agreement

RECITALS

Seller desires to sell, and Buyer desires to purchase, all of the issued and outstanding limited liability corporate membership and ownership interest (the " Ownership Interest") of Kiron Clinical Sleep Lab, LLC, a North Carolina limited liability company ("Company").

AGREEMENT

The parties, intending to be legally bound, agree as follows:

For purposes of this Agreement, the following terms have the meanings specified or referred to in this Section 1:

"Adjustment Amount" —as defined in Section 2.5.

"Applicable Contract" —any Contract (a) under which the Company has or may acquire any rights, (b) under which the Company has or may become subject to any obligation or liability, or (c) by which the Company or any of the assets owned or used by it is or may become bound.

"Balance Sheet" —as defined in Section 3.4.

"Best Efforts" —the efforts that a prudent Person desirous of achieving a result would use in similar circumstances to ensure that such result is achieved as expeditiously as possible provided, however, that an obligation to use Best Efforts under this Agreement does not require the Person subject to that obligation to take actions that would result in a materially adverse change in the benefits to such Person of this Agreement and the Contemplated Transactions.

"Breach" —a "Breach" of a representation, warranty, covenant, obligation, or other provision of this Agreement or any instrument delivered pursuant to this Agreement will be deemed to have occurred if there is or has been (a) any inaccuracy in or breach of, or any failure to perform or comply with, such representation, warranty, covenant, obligation, or other provision, or (b) any claim (by any Person) or other occurrence or circumstance that is or was inconsistent with such representation, warranty, covenant, obligation, or other provision, and the term "Breach" means any such inaccuracy, breach, failure, claim, occurrence, or circumstance. The Parties note that determining whether a "Breach" has occurred will be determined in light of whether the essential representation, warranty, covenant, obligation or other provision of this Agreement is accurate and/or can be accomplished with the intent of this Agreement with immaterial impact. Notwithstanding, however, it will be solely within the non breaching party's discretion whether to assert any breach due to any such failure by the other party, and any such determination not to assert breach in one circumstance will not preclude or otherwise be determined to be a waiver for that nonbreaching party to assert such claim of breach in a subsequent or similar circumstance.

"Buyer" —as defined in the first paragraph of this Agreement.

"Closing" —as defined in Section 2.3.

"Closing Date" —the date and time as of which the Closing actually takes place.

"Company" —as defined in the Recitals of this Agreement, which is the company to be acquired by Vystar.

"Consent" —any approval, consent, ratification, waiver, or other authorization (including any Governmental Authorization).

"Contemplated Transactions" —all of the transactions contemplated by this Agreement, including:

"Contract" —any agreement, contract, obligation, promise, or undertaking (whether written or oral and whether express or implied) that is legally binding.

"Damages" —as defined in Section 10.2.

"Disclosure Letter" —the disclosure letter delivered by Seller to Buyer concurrently with the execution and delivery of this Agreement.

"Encumbrance" —any charge, claim, community property Ownership Interest, condition, equitable Ownership Interest, lien, option, pledge, security Ownership Interest, right of first refusal, or restriction of any kind, including any restriction on use, voting, transfer, receipt of income, or exercise of any other attribute of ownership.

"Environment" —soil, land surface or subsurface strata, surface waters (including navigable waters, ocean waters, streams, ponds, drainage basins, and wetlands), ground waters, drinking water supply, stream sediments, ambient air (including indoor air), plant and animal life, and any other environmental medium or natural resource.

"Environmental, Health, and Safety Liabilities" —any cost, damages, expense, liability, obligation, or other responsibility arising from or under Environmental Law or Occupational Safety and Health Law and consisting of or relating to:

The terms "removal," "remedial," and "response action," include the types of activities covered by the United States Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. § 9601 et seq., as amended ("CERCLA").

"Environmental Law" —any Legal Requirement that requires or relates to:

"Facilities" —any real property, leaseholds, or other interests currently or formerly owned or operated by the Company and any buildings, plants, structures, or equipment (including motor vehicles, tank cars, and rolling stock) currently or formerly owned or operated by the Company.

"GAAP" —generally accepted United States accounting principles, applied on a basis consistent with the basis on which the Balance Sheet and the other financial statements referred to in Section 3.4(b) were prepared.

"Governmental Authorization" —any approval, consent, license, permit, waiver, or other authorization issued, granted, given, or otherwise made available by or under the authority of any Governmental Body or pursuant to any Legal Requirement.

"Governmental Body" —any:

"Hazardous Materials" —any waste or other substance that is listed, defined, designated, or classified as, or otherwise determined to be, hazardous, radioactive, or toxic or a pollutant or a contaminant under or pursuant to any Environmental Law, including any admixture or solution thereof, and specifically including petroleum and all derivatives thereof or synthetic substitutes therefor and asbestos or asbestos-containing materials.

"Intellectual Property Assets" —as defined in Section 3.22.

"Interim Balance Sheet" —as defined in Section 3.4.

"IRC" —the Internal Revenue Code of 1986 or any successor law, and regulations issued by the IRS pursuant to the Internal Revenue Code or any successor law.

"IRS" —the United States Internal Revenue Service or any successor agency, and to the extent relevant, the United States Department of the Treasury.

"Knowledge" —an individual will be deemed to have "Knowledge" of a particular fact or other matter if:

A Person (other than an individual) will be deemed to have "Knowledge" of a particular fact or other matter if any individual who is serving, or who has at any time served, as a director, officer, partner, executor, or trustee of such Person (or in any similar capacity) has, or at any time had, Knowledge of such fact or other matter.

"Legal Requirement" —any federal, state, local, municipal, foreign, international, multinational, or other administrative order, constitution, law, ordinance, principle of common law, regulation, statute, or treaty.

"Material Adverse Effect" means any change, event, state of facts or effect (each being an "Effect") that is materially adverse to the business of either of the Company or when aggregated could be to the combined Company or to Buyer upon or after acquisition of the Company.

"Noncompetition Agreements" —as defined in Section 2.4(a) .

"Occupational Safety and Health Law" —any Legal Requirement designed to provide safe and healthful working conditions and to reduce occupational safety and health hazards, and any program, whether governmental or private (including those promulgated or sponsored by industry associations and insurance companies), designed to provide safe and healthful working conditions.

"Order" —any award, decision, injunction, judgment, order, ruling, subpoena, or verdict entered, issued, made, or rendered by any court, administrative agency, or other Governmental Body or by any arbitrator.

"Ordinary Course of Business" —an action taken by a Person will be deemed to have been taken in the "Ordinary Course of Business" only if:

"Organizational Documents" —Operating Agreement, any Articles of Organization; and any amendment to any of the foregoing.

"Ownership Interest” —as defined in the recitals to this Agreement.

"Person" —any individual, corporation (including any non-profit corporation), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, labor union, or other entity or Governmental Body.

"Proceeding" —any action, arbitration, audit, hearing, investigation, litigation, or suit (whether civil, criminal, administrative, investigative, or informal) commenced, brought, conducted, or heard by or before, or otherwise involving, any Governmental Body or arbitrator.

"Promissory Note" —as defined in Section 2.4(b)(ii).

"Related Person" —with respect to a particular individual:

With respect to a specified Person other than an individual:

For purposes of this definition, the "Family" of an individual includes (i) the individual, (ii) the individual's spouse and former spouses if any, (iii) any other natural person who is related to the individual or the individual's spouse within the second degree, and (iv) any other natural person who resides with such individual, and (b) "Material Interest" means direct or indirect beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934) of voting securities or other voting interests representing at least 20% of the outstanding voting power of a Person or equity securities or other equity interests representing at least 20% of the outstanding equity or equity interests in a Person.

"Representative" —with respect to a particular Person, any director, officer, employee, agent, consultant, advisor, or other representative of such Person, including legal counsel, accountants, and financial advisors.

"Securities Act" —the Securities Act of 1933 or any successor law, and regulations and rules issued pursuant to that Act or any successor law.

"Seller" —as defined in the first paragraph of this Agreement.

"Seller's Releases" —as defined in Section 2.4.

"Subsidiary" —with respect to any Person (the "Owner"), any corporation or other Person of which securities or other interests having the power to elect a majority of that corporation's or other Person's board of directors or similar governing body, or otherwise having the power to direct the business and policies of that corporation or other Person (other than securities or other interests having such power only upon the happening of a contingency that has not occurred) are held by the Owner or one or more of its Subsidiaries; when used without reference to a particular Person, "Subsidiary" means a Subsidiary of the Company.

"Tax Return" —any return (including any information return), report, statement, schedule, notice, form, or other document or information filed with or submitted to, or required to be filed with or submitted to, any Governmental Body in connection with the determination, assessment, collection, or payment of any Tax or in connection with the administration, implementation, or enforcement of or compliance with any Legal Requirement relating to any Tax.

"Territory" shall mean the geographical area within a 25 mile radius of any facility of Purchaser for which Seller was serving as Medical Director or providing medical services at the time of termination for any reason of any services agreement between Buyer and Seller.

. "Threatened" —a claim, Proceeding, dispute, action, or other matter will be deemed to have been "Threatened" if any demand or statement has been made (orally or in writing) or any notice has been given (orally or in writing), or if any other event has occurred or any other circumstances exist, that would lead a prudent Person to conclude that such a claim, Proceeding, dispute, action, or other matter is likely to be asserted, commenced, taken, or otherwise pursued in the future.

Subject to the terms and conditions of this Agreement, at the Closing, Seller will sell and transfer the Ownership Interest to Buyer, and Buyer will purchase the Ownership Interest from Seller.

The purchase price (the "Purchase Price") for the Ownership Interest will be approximately $300,000 minus the Adjustment Amount if necessary based upon the Adjustment Procedure. The Purchase Price shall be paid one-third (1/3) or thirty three and a third percent (33⅓%) in cash, or $100,000 in cash ("Closing Cash Amount"), less ten percent (10%) held back for the Adjustment Amount, one-third (1/3) or thirty three and a third percent (33⅓%), or $100,000 worth of shares of the Buyer ("Closing Share Amount") less fifty percent (50%) held back for the Adjustment Amount and the remaining amount in the form of two percent (2%) of gross receipts received by the Acquired Company after the Closing Date of the Acquisition for a period of five (5) years. The Buyer shares shall be priced at $0.069/share for a total of 727,434 shares.

The purchase and sale (the "Closing") provided for in this Agreement will take place at the offices of Buyer at 3235 Satellite Blvd., Bldg 400, Suite 290, Duluth, GA 30096, at 3 pm (local time) on June 28, 2013 or at such time and place as the parties may agree.

At the Closing each party shall deliver to the other party those items set forth below, which shall operate as conditions precedent to the obligation to close:

The Adjustment Amount will be equal to ten percent (10%) of the Closing Cash Amount, or $10,000 and fifty percent (50%) of the Closing Share Amount, or $50,000 worth of shares. This Adjustment Amount shall be held back from payment or delivery to Seller pending application of the Adjustment Procedure described in Section 2.6 below to determine whether such Adjustment Amount should be paid to Seller in accordance with the Adjustment Procedure. The Adjustment Amount shall be reflected in a promissory note, in the form of Exhibit 2.5. The Adjustment Amount that is to be paid in Buyer shares shall be priced as of the Closing Date, but shall not be issued until the Adjustment Procedure results have determined Buyer is in fact eligible for receiving those shares.

Buyer will cause its certified public accountants to conduct a post-acquisition audit of the Company, its financial and other records ("the Audit"). If the Audit confirms the Company's 2011, 2012 and first six (6) months of 2013 financials within two percent (2%) as stated and submitted to Buyer at or immediately prior to the Close Date, then Buyer shall pay to Seller the Adjustment Amount (a copy of Company's Statement of Revenues and Expenses for the 4 Quarters Ended for both December 31, 2012 and December 31, 2011 that were disclosed by Seller to Buyer prior to the Close Date, is attached hereto as Exhibit 2.6). If the results of the Audit show the revenue and net income figures reported to Buyer were not in fact represented accurately within this two percent (2%) variability but were within three percent (3%), then fifty percent (50%) of the Adjustment Amount shall be paid to Seller. If the Audit reveals a variability greater than three percent (3%) of these revenue and net income financials, then none of the Adjustment Amount shall be paid to Seller. For purposes of this "variability" referred to herein, this refers to figures that are below those reported to Buyer prior to the Closing Date. Any upside or variability showing higher income and revenues than the financials reported will result in all of the Adjustment Amount being paid. In the event that the Adjustment Amount is due and payable to Seller, such Adjustment Amount shall be paid by Buyer as set forth in the Promissory Note.

Seller represents and warrants to Buyer as follows:

Unless set forth in Part 3.2 of the Disclosure Letter, neither Seller nor the Company is or will be required to give any notice to or obtain any Consent from any Person in connection with the execution and delivery of this Agreement or the consummation or performance of any of the Contemplated Transactions.

The authorized equity securities of the Company consist of one hundred percent (100%) of the membership and ownership interest of the Company which are issued and outstanding to Michael Soo, constituting the Ownership Interest. Seller is and will be on the Closing Date the beneficial owner and holder of record of all of the Ownership Interest, free and clear of all Encumbrances. No legend or other reference to any purported Encumbrance appears upon any certificate representing equity securities of the Company. All of the outstanding equity securities of the Company have been duly authorized and validly issued and are fully paid and nonassessable. There are no Contracts relating to the issuance, sale, or transfer of any equity securities or other securities of the Company. None of the outstanding equity securities or other securities of the Company was issued in violation of the Securities Act or any other Legal Requirement. No Company owns, or has any Contract to acquire, any equity securities or other securities of any Person (other than Company) or any direct or indirect equity or ownership interest in any other business.

Seller has delivered to Buyer financial statements of the Company as for the fiscal years ending December 31, 2012 and for December 31, 2011 and the three month period ending March 31, 2013 including a balance sheet, an income statement and a statement of cash flows. Such financial statements and notes fairly present the financial condition and the results of operations, changes in stockholders' equity, and cash flow of the Company as at the respective dates of and for the periods referred to in such financial statements, all in accordance with GAAP, subject, in the case of interim financial statements, to normal recurring year-end adjustments (the effect of which will not, individually or in the aggregate, be materially adverse) and the absence of notes (that, if presented, would not differ materially from those included in the Balance Sheet); the financial statements referred to in this Section 3.4 reflect the consistent application of such accounting principles throughout the periods involved. No financial statements of any Person other than the Company are required by GAAP to be included in the consolidated financial statements of the Company.

The books of account, minute books, stock record books, and other records of the Company, all of which have been made available to Buyer, are complete and correct and have been maintained in accordance with sound business practices, GAAP and the requirements of Section 13(b)(2) of the Securities Exchange Act of 1934, as amended (regardless of whether or not the Company are subject to that Section), including the maintenance of an adequate system of internal controls. The minute books of the Company contain accurate and complete records.

Part 3.6 of the Disclosure Letter contains a complete and accurate list of all real property, leaseholds, or other interests therein owned by the Company. Seller has delivered or made available to Buyer copies of the deeds, leases and other instruments (as recorded) by which the Company acquired such real property and interests, and copies of all title insurance policies, opinions, abstracts, and surveys in the possession of Seller or the Company and relating to such property or interests. The Company owns all the properties and assets (whether real, personal, or mixed and whether tangible or intangible) that they purport to own located in the facilities owned or operated by the Company or reflected as owned in the books and records of the Company, including all of the properties and assets reflected in the Balance Sheet and the Interim Balance Sheet (except for assets held under capitalized leases disclosed in Part 3.6 of the Disclosure Letter and personal property sold or acquired since the date of the Balance Sheet and the Interim Balance Sheet, as the case may be, in the Ordinary Course of Business), and all of the properties and assets purchased or otherwise acquired by the Company since the date of the Balance Sheet (except for personal property acquired and sold since the date of the Balance Sheet in the Ordinary Course of Business and consistent with past practice), which subsequently purchased or acquired properties and assets (other than inventory ) are listed in Part 3.6 of the Disclosure Letter. All material properties and assets reflected in the Balance Sheet and the Interim Balance Sheet are free and clear of all Encumbrances and are not, in the case of real property, subject to any rights of way, building use restrictions, exceptions, variances, reservations, or limitations of any nature except, with respect to all such properties and assets, (a) mortgages or security Ownership Interests shown on the Balance Sheet or the Interim Balance Sheet as securing specified liabilities or obligations, with respect to which no default (or event that, with notice or lapse of time or both, would constitute a default) exists, (b) mortgages or security Ownership Interests incurred in connection with the purchase of property or assets after the date of the Interim Balance Sheet (such mortgages and security Ownership Interests being limited to the property or assets so acquired), with respect to which no default (or event that, with notice or lapse of time or both, would constitute a default) exists, (c) liens for current taxes not yet due.

The structures and equipment of the Company are structurally sound, are in good operating condition and repair, and are adequate for the uses to which they are being put, and none of such structures, or equipment is in need of maintenance or repairs except for ordinary, routine maintenance and repairs that are not material in nature or cost. The structures and equipment of the Company are sufficient for the continued conduct of the Company's businesses after the Closing in substantially the same manner as conducted prior to the Closing.

All accounts receivable of the Company that are reflected on the Balance Sheet or the Interim Balance Sheet or on the accounting records of the Company as of the Closing Date (collectively, the "Accounts Receivable") represent or will represent valid obligations arising from sales actually made or services actually performed in the Ordinary Course of Business. Unless paid prior to the Closing Date, the Accounts Receivable are or will be as of the Closing Date current and collectible net of the respective reserves shown on the Balance Sheet or the Interim Balance Sheet or on the accounting records of the Company as of the Closing Date (which reserves are adequate and calculated consistent with past practice and, in the case of the reserve as of the Closing Date, will not represent a greater percentage of the Accounts Receivable as of the Closing Date than the reserve reflected in the Interim Balance Sheet represented of the Accounts Receivable reflected therein and will not represent a material adverse change in the composition of such Accounts Receivable in terms of aging). Subject to such reserves, each of the Accounts Receivable either has been or will be collected in full, without any set-off, within ninety days after the day on which it first becomes due and payable. There is no contest, claim, or right of set-off, other than returns in the Ordinary Course of Business, under any Contract with any obligor of an Accounts Receivable relating to the amount or validity of such Accounts Receivable. Part 3.8 of the Disclosure Letter contains a complete and accurate list of all Accounts Receivable as of the date of the Interim Balance Sheet, which list sets forth the aging of such Accounts Receivable.

All inventory of the Company, whether or not reflected in the Balance Sheet or the Interim Balance Sheet, consists of a quality and quantity usable or salable in the Ordinary Course of Business, except for obsolete items and items of below-standard quality, all of which have been written off or written down to net realizable value in the Balance Sheet or the Interim Balance Sheet or on the accounting records of the Company as of the Closing Date, as the case may be. All inventories not written off have been priced at the lower of cost or [market] [net realizable value] on a [last in, first out] [first in, first out] basis. The quantities of each item of inventory (whether raw materials, work- in-process, or finished goods) are not excessive, but are reasonable in the present circumstances of the Company.

Unless set forth in Part 3.10 of the Disclosure Letter, the Company has no liabilities or obligations of any nature (whether known or unknown and whether absolute, accrued, contingent, or otherwise) except for liabilities or obligations reflected or reserved against in the Balance Sheet or the Interim Balance Sheet and current liabilities incurred in the Ordinary Course of Business since the respective dates thereof.

With regard to that certain line of credit with Wells Fargo bank in the name of the Company, personally guaranteed by Seller ("Seller LOC"), Seller hereby certifies, warrants and represents that the full amount of the outstanding Seller LOC as of the Effective Date will be paid in full according to the Seller LOC bank terms to its complete and full satisfaction and shall fully indemnify and hold harmless Buyer for all costs, liabilities and expenses with respect to this Seller LOC. The details of such Seller LOC is reflected in Part 3.10 of the Disclosure Letter.

Since the date of the Balance Sheet, there has not been any material adverse change in the business, operations, properties, prospects, assets, or condition of the Company, and no event has occurred or circumstance exists that may result in such a material adverse change.

The Governmental Authorizations listed in Part 3.14 of the Disclosure Letter collectively constitute all of the Governmental Authorizations necessary to permit the Company to lawfully conduct and operate their businesses in the manner they currently conduct and operate such businesses and to permit the Company to own and use their assets in the manner in which they currently own and use such assets.

Unless set forth in Part 3.16 of the Disclosure Letter, since the date of the Balance Sheet, the Company have conducted their businesses only in the Ordinary Course of Business and there has not been any:

Except as set forth in part 3.19 of the Disclosure Letter:

Since January 1, 2010, the Company has not been nor is a party to any collective bargaining or other labor Contract.

(i)                    With respect to each Trade Secret, the documentation relating to such Trade Secret is current, accurate, and sufficient in detail and content to identify and explain it and to allow its full and proper use without reliance on the knowledge or memory of any individual.

(ii)                    Seller and the Company have taken all reasonable precautions to protect the secrecy, confidentiality, and value of their Trade Secrets.

(iii)                   One or more of the Company has good title and an absolute (but not necessarily exclusive) right to use the Trade Secrets. The Trade Secrets are not part of the public knowledge or literature, and, to Seller' Knowledge, have not been used, divulged, or appropriated either for the benefit of any Person (other than one or more of the Company) or to the detriment of the Company. No Trade Secret is subject to any adverse claim or has been challenged or threatened in any way.

Since January 1, 2010 neither the Company or director, officer, agent, or employee of the Company, or any other Person associated with or acting for or on behalf of the Company, has directly or indirectly (a) made any contribution, gift, bribe, rebate, payoff, influence payment, kickback, or other payment to any Person, private or public, regardless of form, whether in money, property, or services (i) to obtain favorable treatment in securing business, (ii) to pay for favorable treatment for business secured, (iii) to obtain special concessions or for special concessions already obtained, for or in respect of the Company or any Affiliate of an Company, or (iv) in violation of any Legal Requirement, (b) established or maintained any fund or asset that has not been recorded in the books and records of the Company.

Neither the Seller nor any Related Person of Seller or of the Company except as disclosed in the Disclosure Letter has, or has had, any interest in any property (whether real, personal, or mixed and whether tangible or intangible), used in or pertaining to the Company' businesses. No Seller or any Related Person of Seller or of the Company owns or has owned (of record or as a beneficial owner) an equity interest or any other financial or profit interest in, a Person that has (i) had business dealings or a material financial interest in any transaction with the Company, or (ii) engaged in competition with the Company with respect to any line of the products or services of such Company (a "Competing Business") in any market presently served by such Company. Except as set forth in Part 3.25 of the Disclosure Letter, no Seller or any Related Person of Seller or of the Company is a party to any Contract with, or has any claim or right against, the Company.

Seller and their agents have incurred no obligation or liability, contingent or otherwise, for brokerage or finders' fees or agents' commissions or other similar payment in connection with this Agreement.

Buyer represents and warrants to Seller as follows:

4.1                  ORGANIZATION AND GOOD STANDING

Buyer is a corporation duly organized, validly existing, and in good standing under the laws of the State of North Carolina.

4.2                  AUTHORITY; NO CONFLICT

This Agreement constitutes the legal, valid, and binding obligation of Buyer, enforceable against Buyer in accordance with its terms. Upon the execution and delivery by Buyer of the Promissory Note and the Buyer stock certificate (collectively, the "Buyer's Closing Documents"), the Buyer's Closing Documents will constitute the legal, valid, and binding obligations of Buyer, enforceable against Buyer in accordance with their respective terms. Buyer has the absolute and unrestricted right, power, and authority to execute and deliver this Agreement and the Buyer's Closing Documents and to perform its obligations under this Agreement and the Buyer's Closing Documents, including without limitation to issue stock Vystar Corporation to Michael Soo, M.D. as part of the consideration paid under this Agreement.

Except as set forth in Schedule 4.2, Buyer is not and will not be required to obtain any Consent from any Person in connection with the execution and delivery of this Agreement or the consummation or performance of any of the Contemplated Transactions.

There is no pending Proceeding that has been commenced against Buyer and that challenges, or may have the effect of preventing, delaying, making illegal, or otherwise interfering with, any of the Contemplated Transactions. To Buyer's Knowledge, no such Proceeding has been Threatened.

Buyer and its officers and agents have incurred no obligation or liability, contingent or otherwise, for brokerage or finders' fees or agents' commissions or other similar payment in connection with this Agreement and will indemnify and hold Seller harmless from any such payment alleged to be due by or through Buyer as a result of the action of Buyer or its officers or agents.

Buyer hereby certifies, warrants and represents that it will not at any time, without express Seller written consent, borrow against or in any way intentionally or knowingly increase the principal outstanding balance of the Seller LOC. Buyer will hold harmless and indemnify Seller for any increase in outstanding principal balance and associated fees and interest to that increased principal of the Seller LOC that it knowingly or intentionally increases without express Buyer written consent.

Between the date of this Agreement and the Closing Date, Seller will, and will cause the Company and its Representatives to, (a) afford Buyer and its Representatives and their Representatives (collectively, "Buyer's Advisors") full and free access to the Company's personnel, properties (including subsurface testing), contracts, books and records, and other documents and data, (b) furnish Buyer and Buyer's Advisors with copies of all such contracts, books and records, and other existing documents and data as Buyer may reasonably request, and (c) furnish Buyer and Buyer's Advisors with such additional financial, operating, and other data and information as Buyer may reasonably request.

Between the date of this Agreement and the Closing Date, Seller will, and will cause the Company to:

Except as otherwise expressly permitted by this Agreement, between the date of this Agreement and the Closing Date, Seller will not, and will cause the Company not to, without the prior consent of Buyer, take any affirmative action, or fail to take any reasonable action within their or its control, as a result of which any of the changes or events listed in Section 3.16 is likely to occur.

As promptly as practicable after the date of this Agreement, Seller will, and will cause the Company to, make all filings required by Legal Requirements to be made by them in order to consummate the Contemplated Transactions (including all filings under the HSR Act). Between the date of this Agreement and the Closing Date, Seller will, and will cause the Company to, (a) cooperate with Buyer with respect to all filings that Buyer elects to make or is required by Legal Requirements to make in connection with the Contemplated Transactions, and (b) cooperate with Buyer in obtaining all consents identified in Schedule 4.2 (including taking all actions requested by Buyer to cause early termination of any applicable waiting period under the HSR Act).

Between the date of this Agreement and the Closing Date, each Seller will promptly notify Buyer in writing if such Seller or the Company becomes aware of any fact or condition that causes or constitutes a Breach of any of Seller' representations and warranties as of the date of this Agreement, or if such Seller or the Company becomes aware of the occurrence after the date of this Agreement of any fact or condition that would (except as expressly contemplated by this Agreement) cause or constitute a Breach of any such representation or warranty had such representation or warranty been made as of the time of occurrence or discovery of such fact or condition. Should any such fact or condition require any change in the Disclosure Letter if the Disclosure Letter were dated the date of the occurrence or discovery of any such fact or condition, Seller will promptly deliver to Buyer a supplement to the Disclosure Letter specifying such change. During the same period, each Seller will promptly notify Buyer of the occurrence of any Breach of any covenant of Seller in this Section 5 or of the occurrence of any event that may make the satisfaction of the conditions in Section 7 impossible or unlikely.

Except as expressly provided in this Agreement, Seller will cause all indebtedness owed to the Company by either Seller or any Related Person of either Seller to be paid in full prior to Closing

Until such time, if any, as this Agreement is terminated pursuant to Section 9, Seller will not, and will cause the Company and each of their Representatives not to, directly or indirectly solicit, initiate, or encourage any inquiries or proposals from, discuss or negotiate with, provide any non-public information to, or consider the merits of any unsolicited inquiries or proposals from, any Person (other than Buyer) relating to any transaction involving the sale of the business or assets (other than in the Ordinary Course of Business) of the Company, or any of the capital stock of the Company, or any merger, consolidation, business combination, or similar transaction involving the Company.

Between the date of this Agreement and the Closing Date, Seller will use their Best Efforts to cause the conditions in Sections 7 and 8 to be satisfied.

As promptly as practicable after the date of this Agreement, Buyer will, and will cause each of its Related Persons to, make all filings required by Legal Requirements to be made by them to consummate the Contemplated Transactions (including all filings under the HSR Act). Between the date of this Agreement and the Closing Date, Buyer will, and will cause each Related Person to, cooperate with Seller with respect to all filings that Seller are required by Legal Requirements to make in connection with the Contemplated Transactions, and (ii) cooperate with Seller in obtaining all consents identified in Part 3.2 of the Disclosure Letter; provided that this Agreement will not require Buyer to dispose of or make any change in any portion of its business or to incur any other burden to obtain a Governmental Authorization.

Except as set forth in the proviso to Section 6.1, between the date of this Agreement and the Closing Date, Buyer will use its Best Efforts to cause the conditions in Sections 7 and 8 to be satisfied.

Buyer's obligation to purchase the Ownership Interest and to take the other actions required to be taken by Buyer at the Closing is subject to the satisfaction, at or prior to the Closing, of each of the following conditions (any of which may be waived by Buyer, in whole or in part):

Each of the Consents identified in Part 3.2 of the Disclosure Letter and each Consent identified in Schedule 4.2, must have been obtained and must be in full force and effect.

Such other documents as Buyer may reasonably request for the purpose of (i) enabling its counsel to provide the opinion referred to in Section 8.4(a), (ii) evidencing the accuracy of any of Seller' representations and warranties, (iii) evidencing the performance by either Seller of, or the compliance by either Seller with, any covenant or obligation required to be performed or complied with by such Seller, (iv) evidencing the satisfaction of any condition referred to in this Section 7, or (v) otherwise facilitating the consummation or performance of any of the Contemplated Transactions.

Since the date of this Agreement, there must not have been commenced or Threatened against Buyer, or against any Person affiliated with Buyer, any Proceeding (a) involving any challenge to, or seeking damages or other relief in connection with, any of the Contemplated Transactions, or (b) that may have the effect of preventing, delaying, making illegal, or otherwise interfering with any of the Contemplated Transactions.

There must not have been made or Threatened by any Person any claim asserting that such Person (a) is the holder or the beneficial owner of, or has the right to acquire or to obtain beneficial ownership of, any stock or membership of, or any other voting, equity, or ownership interest in, any of the Company, or (b) is entitled to all or any portion of the Purchase Price payable for the Ownership Interest.

Neither the consummation nor the performance of any of the Contemplated Transactions will, directly or indirectly (with or without notice or lapse of time), materially contravene, or conflict with, or result in a material violation of, or cause Buyer or any Person affiliated with Buyer to suffer any material adverse consequence under, (a) any applicable Legal Requirement or Order, or (b) any Legal Requirement or Order that has been published, introduced, or otherwise [formally] proposed by or before any Governmental Body.

Seller's obligation to sell the Ownership Interest and to take the other actions required to be taken by Seller at the Closing is subject to the satisfaction, at or prior to the Closing, of each of the following conditions (any of which may be waived by Seller, in whole or in part):

All of Buyer's representations and warranties in this Agreement (considered collectively), and each of these representations and warranties (considered individually), must have been accurate in all material respects as of the date of this Agreement and must be accurate in all material respects as of the Closing Date as if made on the Closing Date.

Each of the Consents identified in Part 3.2 of the Disclosure Letter must have been obtained and must be in full force and effect.

Buyer must have caused such other documents as Seller may reasonably request for the purpose of (i) enabling their counsel to provide the opinion referred to in Section 7.4(a), (ii) evidencing the accuracy of any representation or warranty of Buyer, (iii) evidencing the performance by Buyer of, or the compliance by Buyer with, any covenant or obligation required to be performed or complied with by Buyer, (ii) evidencing the satisfaction of any condition referred to in this Section 8, or (v) otherwise facilitating the consummation of any of the Contemplated Transactions.

There must not be in effect any Legal Requirement or any injunction or other Order that (a) prohibits the sale of the Ownership Interest by Seller to Buyer, and (b) has been adopted or issued, or has otherwise become effective, since the date of this Agreement.

This Agreement may, by notice given prior to or at the Closing, be terminated:

Each party's right of termination under Section 9.1 is in addition to any other rights it may have under this Agreement or otherwise, and the exercise of a right of termination will not be an election of remedies. If this Agreement is terminated pursuant to Section 9.1, all further obligations of the parties under this Agreement will terminate, except that the obligations in Sections 11.1 and 11.3 will survive; provided, however, that if this Agreement is terminated by a party because of the Breach of the Agreement by the other party or because one or more of the conditions to the terminating party's obligations under this Agreement is not satisfied as a result of the other party's failure to comply with its obligations under this Agreement, the terminating party's right to pursue all legal remedies will survive such termination unimpaired.

All representations, warranties, covenants, and obligations in this Agreement, the Disclosure Letter, the supplements to the Disclosure Letter, the certificate delivered pursuant to Section 2.4(a)(v), and any other certificate or document delivered pursuant to this Agreement will survive the Closing. The right to indemnification, payment of Damages or other remedy based on such representations, warranties, covenants, and obligations will not be affected by any investigation conducted with respect to, or any Knowledge acquired (or capable of being acquired) at any time, whether before or after the execution and delivery of this Agreement or the Closing Date, with respect to the accuracy or inaccuracy of or compliance with, any such representation, warranty, covenant, or obligation. The waiver of any condition based on the accuracy of any representation or warranty, or on the performance of or compliance with any covenant or obligation, will not affect the right to indemnification, payment of Damages, or other remedy based on such representations, warranties, covenants, and obligations.

Seller, jointly and severally, will indemnify and hold harmless Buyer, the Company, and their respective Representatives, stockholders, controlling persons, and affiliates (collectively, the "Indemnified Persons") for, and will pay to the Indemnified Persons the amount of, any loss, liability, claim, damage (including incidental and consequential damages), expense (including costs of investigation and defense and reasonable attorneys' fees) or diminution of value, whether or not involving a third-party claim (collectively, "Damages"), arising, directly or indirectly, from or in connection with:

The remedies provided in this Section 10.2 will not be exclusive of or limit any other remedies that may be available to Buyer or the other Indemnified Persons.

Seller, jointly and severally, will indemnify and hold harmless Buyer, the Company, and the other Indemnified Persons for, and will pay to Buyer, the Company, and the other Indemnified Persons the amount of, any Damages (including costs of cleanup, containment, or other remediation) arising, directly or indirectly, from or in connection with any Environmental, Health, and Safety or Hazardous Materials Liabilities arising out of or relating to the ownership, operation, or condition at any time on or prior to the Closing Date of the Facilities or any other properties and assets (whether real, personal, or mixed and whether tangible or intangible) in which Seller or the Company has or had an interest, or any bodily injury (including illness, disability, and death, and regardless of when any such bodily injury occurred, was incurred, or manifested itself), personal injury, property damage (including trespass, nuisance, wrongful eviction, and deprivation of the use of real property), or other damage of or to any Person, including any employee or former employee of Seller or the Company or any other Person for whose conduct they are or may be held responsible. 

Buyer will indemnify and hold harmless Seller, and will pay to Seller the amount of any Damages arising, directly or indirectly, from or in connection with (a) any Breach of any representation or warranty made by Buyer in this Agreement or in any certificate delivered by Buyer pursuant to this Agreement, (b) any Breach by Buyer of any covenant or obligation of Buyer in this Agreement, or (c) any claim by any Person for brokerage or finder's fees or commissions or similar payments based upon any agreement or understanding alleged to have been made by such Person with Buyer (or any Person acting on its behalf) in connection with any of the Contemplated Transactions.

If the Closing occurs, Seller will have no liability (for indemnification or otherwise) with respect to any representation or warranty, or covenant or obligation to be performed and complied with prior to the Closing Date, other than those in Sections 3.3, 3.11, 3.13, and 3.19, unless on or before two (2) years post the Closing Date Buyer notifies Seller of a claim specifying the factual basis of that claim in reasonable detail to the extent then known by Buyer; a claim with respect to Section 3.3, 3.11, 3.13, or 3.19 or a claim for indemnification or reimbursement not based upon any representation or warranty or any covenant or obligation to be performed and complied with prior to the Closing Date, may be made at any time. If the Closing occurs, Buyer will have no liability (for indemnification or otherwise) with respect to any representation or warranty, or covenant or obligation to be performed and complied with prior to the closing Date, unless on or before two (2) years post the Closing Date and Seller notifies Buyer of a claim specifying the factual basis of that claim in reasonable detail to the extent then known by Seller.

Upon notice to Seller specifying in reasonable detail the basis for such set-off, Buyer may set off any amount to which it may be entitled under this Section 10 against amounts otherwise payable under the Promissory Note or may give notice of a Claim in such amount that may be taken out of any payment owed from the Adjustment Amount. The exercise of such right of set-off by Buyer in good faith, whether or not ultimately determined to be justified, will not constitute an event of default under the Promissory Note or any instrument securing a Promissory Note. Neither the exercise of nor the failure to exercise such right of set-off or to give a notice of a Claim to set-off against the Adjustment Amount will constitute an election of remedies or limit Buyer in any manner in the enforcement of any other remedies that may be available to it.

A claim for indemnification for any matter not involving a third-party claim may be asserted by notice to the party from whom indemnification is sought.

Seller agrees that for a period of four (4) years from and after the Closing Date he shall not, and shall not cause any third party to, without the prior written consent of Buyer, directly or indirectly:

For purposes of this Section 11, a "Competing Business" shall mean the Company, person or group of persons providing services in sleep health, including but not limited to services involving providing diagnostic tests in clinical settings, selling equipment and supplies relating to sleep health, providing consulting services with respect to sleep health, sleep health operations and/or operating a sleep health clinical or consulting services. "Territory" shall mean the United States.

Except as otherwise expressly provided in this Agreement, each party to this Agreement will bear its respective expenses incurred in connection with the preparation, execution, and performance of this Agreement and the Contemplated Transactions, including all fees and expenses of agents, representatives, counsel, and accountants. Seller will cause the Company not to incur any out-of-pocket expenses in connection with this Agreement. In the event of termination of this Agreement, the obligation of each party to pay its own expenses will be subject to any rights of such party arising from a breach of this Agreement by another party.

Any public announcement or similar publicity with respect to this Agreement or the Contemplated Transactions will be issued, if at all, at such time and in such manner as Buyer determines. Unless consented to by Buyer in advance or required by Legal Requirements, prior to the Closing Seller shall, and shall cause the Company to, keep this Agreement strictly confidential and may not make any disclosure of this Agreement to any Person. Seller and Buyer will consult with each other concerning the means by which the Company' employees, customers, and suppliers and others having dealings with the Company will be informed of the Contemplated Transactions, and Buyer will have the right to be present for any such communication.

Between the date of this Agreement and the Closing Date, Buyer and Seller will maintain in confidence, and will cause the directors, officers, employees, agents, and advisors of Buyer and the Company to maintain in confidence, and not use to the detriment of another party the Buyer, the Seller, or the Company any written, oral, or other information obtained in confidence from another party, the Buyer, the Seller, or the Company in connection with this Agreement or the Contemplated Transactions, unless (a) such information is already known to such party or to others not bound by a duty of confidentiality or such information becomes publicly available through no fault of such party, (b) the use of such information is necessary or appropriate in making any filing or obtaining any consent or approval required for the consummation of the Contemplated Transactions, or (c) the furnishing or use of such information is required by or necessary or appropriate in connection with legal proceedings. 

If the Contemplated Transactions are not consummated, each party will return or destroy as much of such written information as the other party may reasonably request. Whether or not the Closing takes place, Sellers waive, and will upon Buyer's request cause the Company to waive, any cause of action, right, or claim arising out of the access of Buyer or its representatives to any trade secrets or other confidential information of the Company except for the intentional competitive misuse by Buyer of such trade secrets or confidential information.

All notices, consents, waivers, and other communications under this Agreement must be in writing and will be deemed to have been duly given when (a) delivered by hand (with written confirmation of receipt), (b) sent by facsimile and email with confirmations of delivery and/or receipt, provided that a copy is mailed by registered mail, return receipt requested, or (c) when received by the addressee, if sent by a nationally recognized overnight delivery service (receipt requested), in each case to the appropriate addresses and facsimile numbers set forth below (or to such other addresses and facsimile numbers as a party may designate by notice to the other parties):

Seller :

Attention: Michael Soo, M.D.

17 Stoneridge Circle

Durham, NC 27705

Email:       mlsoo@mindspring.com

With a copy to:

Joseph W. Marion

Harriss & Marion, PLLC

Suite 210-C

Duke Forest Place

3326 Durham-Chapel Hill Blvd

Durham, NC 27707

Email:      joe@hmattorneys.net

Facsimile: 919-493-8425

Any action or proceeding seeking to enforce any provision of, or based on any right arising out of, this Agreement may be brought against any of the parties in the courts of the State of Georgia, County of Gwinnett, or if it has or can acquire jurisdiction, in the United States District Court in that county, and each of the parties consents to the jurisdiction of such courts (and of the appropriate appellate courts) in any such action or proceeding and waives any objection to venue laid therein. Process in any action or proceeding referred to in the preceding sentence may be served on any party anywhere in the world.

The parties agree (a) to furnish upon request to each other such further information, (b) to execute and deliver to each other such other documents, and (c) to do such other acts and things, all as the other party may reasonably request for the purpose of carrying out the intent of this Agreement and the documents referred to in this Agreement. 

The rights and remedies of the parties to this Agreement are cumulative and not alternative. Neither the failure nor any delay by any party in exercising any right, power, or privilege under this Agreement or the documents referred to in this Agreement will operate as a waiver of such right, power, or privilege, and no single or partial exercise of any such right, power, or privilege will preclude any other or further exercise of such right, power, or privilege or the exercise of any other right, power, or privilege. To the maximum extent permitted by applicable law, (a) no claim or right arising out of this Agreement or the documents referred to in this Agreement can be discharged by one party, in whole or in part, by a waiver or renunciation of the claim or right unless in writing signed by the other party; (b) no waiver that may be given by a party will be applicable except in the specific instance for which it is given; and (c) no notice to or demand on one party will be deemed to be a waiver of any obligation of such party or of the right of the party giving such notice or demand to take further action without notice or demand as provided in this Agreement or the documents referred to in this Agreement.

This Agreement supersedes all prior agreements between the parties with respect to its subject matter (including any Letter of Intent between the parties), and constitutes (along with the documents referred to in this Agreement) a complete and exclusive statement of the terms of the agreement between the parties with respect to its subject matter. This Agreement may not be amended except by a written agreement executed by both parties.

Neither party may assign any of its rights under this Agreement without the prior consent of the other party, which will not be unreasonably withheld. Subject to the preceding sentence, this Agreement will apply to, be binding in all respects upon, and inure to the benefit of the successors and permitted assigns of the parties. Nothing expressed or referred to in this Agreement will be construed to give any Person other than the parties to this Agreement any legal or equitable right, remedy, or claim under or with respect to this Agreement or any provision of this Agreement. This Agreement and all of its provisions and conditions are for the sole and exclusive benefit of the parties to this Agreement and their successors and assigns. 

If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

The headings of Sections in this Agreement are provided for convenience only and will not affect its construction or interpretation. All references to "Section" or "Sections" refer to the corresponding Section or Sections of this Agreement. All words used in this Agreement will be construed to be of such gender or number as the circumstances require. Unless otherwise expressly provided, the word "including" does not limit the preceding words or terms.

With regard to all dates and time periods set forth or referred to in this Agreement, time is of the essence.

This Agreement will be governed by the laws of the State of Georgia without regard to conflicts principles.

This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement.

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

EXHIBIT 1

DISCLOSURE LETTER

EXHIBIT 2.4(a)(i)

ASSIGNMENT OF OWNERSHIP INTEREST

EXHIBIT 2.4(a)(ii)

SELLER'S RELEASE

EXHIBIT 2.5

PROMISSORY NOTE - Adjustment Amount

EXHIBIT 2.6

ADJUSTMENT PROCEDURE

COMPANY'S STATEMENT OF REVENUES AND EXPENSES FOR THE 4 QUARTERS ENDED FOR BOTH DECEMBER 31, 2012 AND DECEMBER 31, 2011

EXHIBIT 10.2

SENIOR SECURED CONVERTIBLE PROMISSORY NOTE

SUBSCRIPTION AGREEMENT

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES COMMISSION OF ANY STATE UNDER ANY STATE SECURITIES LAW. THEY ARE BEING OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER REGULATION D (“REGULATION D”) PROMULGATED UNDER THE ACT. THE SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS THE SECURITIES ARE REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, OR SUCH OFFERS, SALES AND TRANSFERS ARE MADE PURSUANT TO AVAILABLE EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND THOSE LAWS. THIS NOTE SUBSCRIPTION AGREEMENT DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY OF THE SECURITIES OFFERED HEREBY BY OR TO ANY PERSON IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL. INVESTMENT IN THESE SECURITIES INVOLVES A HIGH DEGREE OF RISK. IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE COMPANY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND THE RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED OR DETERMINED THE ACCURACY OR ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

This Note Subscription Agreement (this “ Agreement ”) dated as of June 28, 2013 is executed by the purchasers set forth on the signature pages hereto (each a “ Purchaser ”, together, the “ Purchasers ”) in connection with the subscription by the Purchasers for certain senior secured convertible promissory notes (each, a “ Note ”, and together, the “ Notes ”) (which terms shall be deemed to include any and all senior secured convertible promissory notes issued) of Vystar Corporation, a Georgia corporation (the “ Company ”) which is offering an aggregate principal amount of Five Hundred Thousand Dollars ($500,000 (U.S.)) of the Notes. The terms of the Notes are set forth in the form of Note attached hereto as Exhibit A .

It is agreed as follows:

1.           Purchase and Sale of Notes

(a) Subject to the terms and conditions hereof, the Company has authorized the issuance and sale of the Notes to the Purchasers at the Closings (as defined below).

(b) At the closing of the transactions contemplated hereby which will occur simultaneously with the execution of this Agreement (the “ Closing ”), subject to the terms and conditions of this Agreement, each Purchaser hereby purchases, and the Company hereby issues and sells to each Purchaser the Notes (each an “ Note ” and collectively the “ Notes ”) in the aggregate original principal amount of Two Hundred Thousand Dollars ($200,000 (U.S.)), allocated among the Purchasers in the principal amounts set forth under the heading “Note Principal Amount” on Schedule I attached hereto.

(d) The Company’s agreement with each Purchaser in this Agreement is a separate agreement, and the sale of each Note to each Purchaser is a separate sale. No Purchaser shall have any obligation to purchase any Note not purchased by another Purchaser.

2.           Purchasers’ Representations and Covenants; Access to Information Independent Investigation

Each Purchaser represents and warrants to, and covenants with, the Company, solely on his, her or its own behalf and on behalf of each person or entity for which such Purchaser is acting as a fiduciary, as follows:

2.1            Exempt Transaction; Investment Intent . (a) The Purchaser is an “accredited investor” as the term is defined in Rule 501(a) under the Act and (b) the Purchaser is purchasing Notes for his, her or its own account (or for beneficiaries’ accounts over which the Purchaser has investment discretion) and not with a view of reselling the Notes in violation of the Securities Act.

2.2            Independent Investigation . The Purchaser, in purchasing his, her or its Notes hereunder, has relied upon an independent investigation made by him or it and, to his, her or its knowledge has, prior to the date hereof, been given access to and the opportunity to examine all books and records of the Company, and all material contracts and documents of the Company; provided , that such investigation shall not affect the Purchaser’s ability to rely on the accuracy of the representations and warranties of the Company set forth herein. The Purchaser will keep confidential all non-public information regarding the Company that the Purchaser receives from the Company unless disclosure of such information is compelled by a court or other administrative body or, in the opinion of the Purchaser’s counsel, to comply with applicable law. In making the investment decision to purchase Notes, the Purchaser is not relying on any oral or written representations or assurances from the Company or any other person or any representation of the Company or any other person other than as set forth in this Agreement, the public filings of the Company or in a document executed by a duly authorized representative of the Company making reference to this Agreement. The Purchaser has such experience in business and financial matters that it is capable of evaluating the risk of its investment and determining the suitability of its investment. The Purchaser is a sophisticated investor, and an accredited investor as defined in Rule 501 of Regulation D. The Purchaser has obtained and reviewed the copies of the Company’s Form 10-K Annual Report for the most recent year ended December 31, 2012, Form 10-Q for the recent fiscal quarter ended September 30, 2012, and copies of all Form 8-K Reports from the beginning of the past fiscal year to the date hereof and is aware that the Company has continued to sustain losses.

2.3            Economic Risk . The Purchaser understands and acknowledges that an investment in his, her or its Notes involves a high degree of risk, including a possible total loss of investment. The Purchaser represents that he or it is able to bear the economic risk of the investment. In making this statement, the Purchaser hereby represents and warrants that the Purchaser has adequate means of providing for the Purchaser’s current needs and contingencies. The Purchaser further represents that the Purchaser has such knowledge and experience in financial and business matters that the Purchaser is capable of evaluating the merits and risks of the investment in the Notes to be received by the Purchaser. Further, the Purchaser represents that it has no present need for liquidity in his, her or its Notes.

2.4            No Government Recommendation or Approval . The Purchaser understands that no United States federal or state agency or similar agency of any other country has passed upon or made any recommendation or endorsement of the Company, this transaction or the subscription of the Notes.

2.5            No Registration . The Purchaser understands that the Notes have not been registered under the Act and are being offered and sold pursuant to an exemption from registration contained in the Act based in part upon the representations of the Purchaser contained herein.

2.6            No Public Solicitation . Without conducting any independent investigation, the Purchaser knows of no public solicitation or advertisement of an offer in connection with the proposed issuance and sale of the Notes.

2.7            Authority . The Purchaser, (a) if not a natural person, has the full power and authority, and (b) if a natural person, has the legal capacity, to execute, deliver and perform this Agreement and to perform its obligations hereunder. This Agreement has been duly approved by all necessary action of the Purchaser, as applicable, has been executed by persons duly authorized by the Purchaser, and constitutes a valid and legally binding obligation of the Purchaser, enforceable in accordance with its terms.

2.8            No Reliance on Tax Advice . The Purchaser has reviewed with his, her or its own tax advisors the foreign, federal, state and local tax consequences of this investment, where applicable, and the transactions contemplated by this Agreement. The Purchaser is relying solely on such advisors and not on any statements or representations of the Company or any of its agents and understands that the Purchaser (and not the Company) shall be responsible for the Purchaser own income tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement.

2.9            Independent Legal Advice . The Purchaser and the Company acknowledge that each has had the opportunity to review this Agreement and the transactions contemplated by this Agreement and has consulted with his, her or its own legal counsel, and other advisors prior to execution of the within Agreement.

2.10          Acknowledgment . The Purchaser understands that the Notes are being offered and sold to it in reliance of specific exemptions from the registration requirements of Federal and state securities laws and that the Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of the Purchaser set forth herein in order to determine the applicability of such exemptions and the suitability of the Purchaser to acquire the Notes.

3.           Resales

The Purchasers acknowledge and agree that the Notes may and will only be resold (a) pursuant to a Registration Statement under the Act; or (b) pursuant to an exemption from registration under the Act.

4.           Legends

Each Note shall bear a legend similar to the legend set forth below and any other legend, if such legend or legends are reasonably required to comply with state, Federal or foreign law:

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

5.           Representations, Warranties and Covenants of Company

The Company represents and warrants to, and covenants with, the Purchasers as follows:

5.1            Organization, Good Standing, and Qualification . The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Georgia and has all requisite corporate power and authority to carry on its business as now conducted and as proposed to be conducted. The Company and its subsidiaries are duly qualified to transact business and are in good standing as foreign corporations or other entities in each jurisdiction in which the nature of the business conducted or property owned by them makes such qualification necessary, except where the failure to so qualify would not, individually or in the aggregate, have a material adverse effect on the business, condition (financial or otherwise), earnings, properties, prospects or results of operations of the Company or any of its subsidiaries (a “ Material Adverse Effect ”).

5.2            Corporate Condition . None of the Company’s filings made with the Securities and Exchange Commission (the “ Commission ”) (such filings, the “ SEC Reports ”), including, but not limited to, those reports referenced in Section 5.5 below, contain any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading. There have been no material adverse changes in the Company’s business, properties, results of operations, condition (financial or otherwise) or prospects since the date of those reports which have not been disclosed to the Purchasers in writing. Further, all material non-public information (other than the specific information respecting the sale of the Notes themselves) respecting the Company, its business and its financial condition, as the same would be required to be disclosed in an SEC Report or registration statement (or corresponding prospectus) if the Notes were otherwise being registered for sale by the Company, has been so publicly reported or disclosed prior to the sale of the Notes as contemplated herein.

5.3            Authorization . The transactions contemplated by this Agreement and the Transaction Documents (as defined below) have been approved by a majority of disinterested directors. The Transaction Documents constitute valid and legally binding obligations of the Company, enforceable in accordance with their respective terms. “ Transaction Documents ” means, collectively, this Agreement, the Notes, the Security Agreements (the “ Security Agreements ”) dated on or about the date hereof among certain the Company and the Purchasers (in substantially the form attached hereto as Exhibit B ), and each of the other documents entered into or delivered by the parties hereto, if any, in connection with the transactions contemplated by this Agreement.

5.4            Valid Issuance of the Notes . When executed and delivered in accordance with the terms hereof for the consideration expressed herein, the Notes will have been issued in compliance with all applicable U.S. federal securities laws. Upon issue, each Purchaser will acquire good and marketable title to the Notes, free and clear of all liens, claims and encumbrances. Subject in part to the truth and accuracy of each Purchaser’s representations set forth in this Agreement, the offer, sale and issuance of the Notes contemplated by this Agreement are exempt from the registration pursuant to any applicable securities laws, and neither the Company nor any authorized agent acting on its behalf will take any action hereafter that would cause the loss of such exemption.

5.5            Current Public Information . The Company is a “reporting issuer” and it has a class of securities registered under Section 12(g) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), and has filed all the materials required to be filed as reports pursuant to the Exchange Act for a period of at least twelve (12) months preceding the date hereof (or for such shorter period as the Company was required by law to file such material) with the exception of the Company’s Form 10-Q for the quarter ending March 31, 2013. All such reports including, without limitation, the SEC Reports) complied in all material respects with all applicable requirements of Federal securities laws and the rules and regulations promulgated thereunder. The Purchaser has obtained copies of the Company’s Form 10-K Annual Report for the most recent year ended December 31, 2012, Form 10-Q for the fiscal quarter ended September 31, 2012, and copies of all Form 8-K Reports from the beginning of the Company’s past fiscal year to the date of execution of the within Agreement.

5.6            No Directed Selling Efforts in Regard to this Transaction . The Company has not, and, to the best of the Company’s knowledge, neither the Purchasers nor any distributor, if any, participating in the offering of the Notes, nor has any person acting for the Company or any such distributor conducted any “directed selling efforts” as that term is defined under the Act. Such activity includes, without limitation, the making of printed material available to investors, the holding of promotional seminars, the placement of advertisements with radio or television stations which discuss the offering of the Notes.

5.7            No Conflicts . The execution and delivery of this Agreement and the consummation of the issuance of the Notes and the transactions contemplated by this Agreement do not and will not conflict with or result in a breach by the Company of any of the terms or provisions of, or constitute a default under, the Articles of Incorporation or bylaws of the Company, or any indenture, credit agreement, mortgage, deed of trust or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which it or any of its subsidiaries or any of its or any of its subsidiaries’ properties or assets are bound, or any existing applicable decree, judgment or order of any court, Federal or State regulatory body, administrative agency or other governmental body having jurisdiction over the Company or any of its subsidiaries or any of its or any of its subsidiaries’ properties or assets.

5.8            Issuance of Notes . The Company will issue each Note in the name of the applicable Purchaser. Nothing in this section shall affect in any way each Purchaser’s obligations and agreement to comply with all applicable securities laws upon resale of his, her or its Notes.

5.9            No Action . The Company has not taken and will not take any action that will affect in any way each Purchaser’s ability to resell his, her or its Notes in accordance with applicable securities laws.

5.10          Compliance with Laws . As of the date hereof, the conduct of the business of the Company and its subsidiaries complies (and has complied) in all material respects with all statutes, laws, regulations, ordinances, rules, judgments, orders or decrees applicable thereto. The Company and its subsidiaries have not received notice of any alleged violation of any statute, law, regulations, ordinance, rule, judgment, order or decree from any governmental authority. The Company shall comply with all applicable securities laws with respect to the sale of the Notes, including, but not limited to, the filing of all reports required to be filed in connection therewith with the Commission or any other regulatory authority.

5.11          Litigation . There is no action, suit or proceeding before or by any court or governmental agency or body, domestic or foreign, now pending or, to the knowledge of the Company, threatened, against or affecting the Company and its subsidiaries, or any of the Company or its subsidiaries assets or properties, which could reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. The Company and its subsidiaries are not the subject of any pending or, to their knowledge, threatened investigation or administrative or legal proceeding by the Internal Revenue Service, the taxing authorities of any state or local jurisdiction, or the Commission or any state securities commission which have not been disclosed in the reports referred to in Section 5.5.

5.12          Disclosures . There is no fact known to the Company (other than general economic conditions known to the public generally) that has not been disclosed in writing to the Purchasers that (a) could reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect or (b) could reasonably be expected, individually or in the aggregate, to materially and adversely affect the ability of the Company to perform its obligations pursuant the Transaction Documents.

5.13        Capitalization .

(a)          The Company, as of the date of the Initial Closing, will have 50,000,000 shares of Common Stock, par value $0.0001 per share (“ Shares ”) authorized pursuant to its articles of incorporation and 27,673,851 Shares issued and outstanding. All of the issued and outstanding shares of capital stock of the Company and each of its subsidiaries have been duly authorized and are validly issued, fully paid and non-assessable. No personal liability attaches to the registered holders of the Common Stock by reason of their being registered holders thereof.

(b)          All of the issued and outstanding shares of the Company’s and its subsidiaries’ capital stock (or other equity securities) have been offered, issued and sold by the Company and such subsidiaries in compliance with applicable Federal and State securities Laws.

5.14        Material Changes . Except as disclosed in the SEC Reports: (a) the Company and its subsidiaries have not incurred any material liabilities or obligations, indirect, or contingent, or entered into any material oral or written agreement or other transaction which is not in the ordinary course of business or which could reasonably be expected to result in a material reduction in the future earnings or prospects of the Company and its subsidiaries; (b) each of the Company and its subsidiaries have not sustained any material loss or interference with its businesses or properties from fire, flood, windstorm, accident or other calamity not covered by insurance; (c) except as described in the SEC Reports, the Company and its subsidiaries have not paid or declared any dividends or other distributions with respect to its capital stock and neither the Company nor any of its subsidiaries is in default in the payment of principal or interest on any outstanding debt obligations; (d) there has not been any change in the capital stock of the Company or any of its subsidiaries, other than shares or options issued pursuant to stock option plans or purchase plans approved by the Company’s Board of Directors and repurchases of shares or options pursuant to repurchase plans already approved by the Company’s Board of Directors, or indebtedness material to the Company or any of its subsidiaries (other than the sale of Notes hereunder and in the ordinary course of business); and (e) there has not been any other event or change that would have, individually or in the aggregate, a Material Adverse Effect.

5.15        Financial Statements . The consolidated financial statements of the Company and the related notes contained in the SEC Reports present fairly, in accordance with generally accepted accounting principles, the consolidated financial position of the Company and its subsidiaries as of the dates indicated, and the results of their operations, cash flows and the changes in shareholders’ equity for the periods therein specified, subject, in the case of unaudited financial statements for interim periods, to normal year-end audit adjustments. Such consolidated financial statements (including the related notes) have been prepared in accordance with generally accepted accounting principles applied on a consistent basis throughout the periods therein specified, except that unaudited financial statements may not contain all footnotes required by generally accepted accounting principles. The Company and each of its subsidiaries have fully complied with the Sarbanes-Oxley Act of 2002; however auditor attestation of the Company’s compliance is not currently required.

5.16        Brokers . The Company has taken no action which would give rise to any claim by any person for brokerage commissions, finders’ fees or similar payments by any Purchaser relating to this Agreement or the transactions contemplated hereby.

5.17        Consents . Except as to filings which may be required under applicable state securities regulations, no consent, authorization, approval, order, license, certificate, or permit of or from, or declaration or filing with, any federal, state, local, or other governmental authority or of any court or other tribunal is required by the Company or any of its subsidiaries in connection with the transactions contemplated hereby. No consent of any party to any contract, agreement, instrument, lease, license, arrangement, or understanding to which the Company or any of its subsidiaries is a party, or by which any of its properties or assets is bound, is required for the execution, delivery, or performance by the Company of the transactions contemplated by the Transaction Documents.

5.18        Intellectual Property . To the Company’s knowledge, the Company or its subsidiaries own, or have the right to use, all patents, trademarks, service marks, trade names, copyrights, licenses, trade secrets or other proprietary rights necessary to their business as now conducted without conflicting with or infringing upon the right or claimed right of any person or entity under or with respect to any of the foregoing. Except for hardware and software licenses entered into in the ordinary course of business, the Company and its subsidiaries are not bound by or a party to any options, licenses or agreements of any kind with respect to patents, trademarks, service marks, trade names, copyrights, licenses, trade secrets or other proprietary rights of any other person or entity. The Company and its subsidiaries have not received any communications alleging that the Company or any of its subsidiaries have violated the patents, trademarks, service marks, trade names, copyrights or trade secrets or other proprietary rights of any other person or entity. The Company and its subsidiaries are not aware of any violation by a third party of any of the Company’s or its subsidiaries patents, trademarks, service marks, trade names, copyrights, trade secrets or other proprietary rights.

5.19        Foreign Corrupt Practices Act . Neither the Company or any of its subsidiaries nor any director, officer, agent, or other person acting on behalf of the Company or any of its subsidiaries has, in the course of his, her or its actions for or on behalf of the Company or any of its subsidiaries violated any provision of the United States Foreign Corrupt Practices Act of 1977, as amended, or the regulations there under.

6.          Additional Covenants of Company

6.1          Corporate Existence and Taxes . For as long as any Notes remain outstanding, the Company and its subsidiaries shall, maintain their corporate existence in good standing, and shall pay all taxes when due except for taxes which the Company or its subsidiaries dispute in good faith and for which adequate reserves are established on the Company’s or its subsidiaries books and records.

6.2          Use of Proceeds . The Company and/or its subsidiaries shall use all of the net proceeds from the sale of all Notes for funding the purchase of Kiron Clinical Sleep Lab, LLC, a North Carolina limited liability company (“ Kiron ”), working capital, planned capital investments and other general corporate purposes.

6.3          Reports . The Company shall timely file all reports (if any) required to be filed with the Commission pursuant to the Exchange Act.

The obligation of each of the Purchasers to purchase Notes at the Closing is subject to the fulfillment, or the waiver by such Purchasers, of each of the following conditions on or before the Closing Date:

7.1          Accuracy of Representations and Warranties . The representations and warranties of the Company contained in this Agreement shall be true and correct in all material respects as of the date of this Agreement and as of each Closing Date as if made on and as of each Closing Date.

7.2          Compliance with Covenants . The Company shall have performed and complied in all material respects with all agreements and covenants contained in the Transaction Documents.

8.          Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the State of Georgia, applicable to agreements made in and wholly to be performed in that jurisdiction without regard to the choice of law rules of such state, except for matters arising under the Act or the Exchange Act which matters shall be construed and interpreted in accordance with such laws. Any action brought to enforce, or otherwise arising out of, this Agreement shall be heard and determined in either a Federal or state court sitting in the County of Gwinnett, State of Georgia, and the parties consent to jurisdiction in the State of Georgia.

9.          Entire Agreement; Amendment

Each Transaction Document delivered pursuant hereto constitute the full and entire understanding and agreement between the parties hereto with regard to the subject matter hereof and thereof, and no party hereto shall be able or bound to any other party hereto in any manner by any warranties, representations or covenants except as specifically set forth herein or therein. Except as expressly provided herein, none of the Transaction Documents may be amended, waived, discharged or terminated other than by a written instrument signed by the party or parties hereto against whom enforcement of any such amendment, waiver, discharge or termination is sought, except that the holders of Notes representing a majority of the then-outstanding principal balance of the Notes (the “ Majority Noteholders ”), may agree to amend, waive, discharge or terminate this Agreement and the Notes on behalf of all Purchasers (so long as all Purchasers are proportionately treated (based on the relative then-outstanding principal balance of the Notes)).

10.         Notices, Etc.

Any notice, demand or request required or permitted to be given by either the Company or any Purchaser pursuant to the terms of this Agreement shall be in writing and shall be deemed given when delivered personally, by facsimile, electronic mail (or similar electronic transmission) with a hard copy to follow by two day courier addressed to the intended recipient thereof at the addresses of the parties hereto in the books and records of the Company or such other address as a party hereto may request by notifying the other in writing.

11.         Indemnification

11.1          Company Indemnification . In consideration of the Purchasers’ execution and delivery of the Transaction Documents to which it is a party and acquiring the Notes hereunder and thereunder and in addition to all of the Company’s other obligations under the Transaction Documents to which it is a party, the Company shall defend, protect, indemnify and hold harmless the Purchasers and all of their affiliates, shareholders, trustees, partners, members, officers, directors, employees and direct or indirect investors and any of the foregoing persons’ agents or other representatives (including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the “ Purchaser Indemnitees ”) from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages (other than consequential damages), and expenses in connection therewith (irrespective of whether any such Purchaser Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “ Purchaser Indemnified Liabilities ”), incurred by any Purchaser Indemnitee as a result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation or warranty made by the Company in the Transaction Documents, (b) any breach of any covenant, agreement or obligation of the Company contained in the Transaction Documents, or (c) any cause of action, suit or claim brought or made against such Purchaser Indemnitee by a third party (including for these purposes a derivative action brought on behalf of the Company) and arising out of or resulting from (i) other than those arising from or resulting from a misrepresentation or breach of any representation or warranty made by such Purchaser Indemnitee contained in the Transaction Documents to which it is a party, the execution, delivery, performance or enforcement of the Transaction Documents, (ii) any transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds of the issuance of the Notes, or (iii) the status of the Purchasers as investors in the Company.

11.2          Contribution; Mechanics and Procedures . To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction of each of the Purchaser Indemnified Liabilities which is permissible under applicable law.

12.         Expenses

Any expenses of each Purchaser reasonably incurred in connection with such Purchaser’s prior, present and future investments in or otherwise relating to the Company, including, without limitation, the transactions contemplated under the Transaction Documents and any future financing of the Company, including, without limitation, any and all advisory, legal, filing and other fees incurred in connection therewith, whether incurred prior to or after the date hereof, shall in each case be paid by the Company.

13.          No Strict Construction

The language used in this Agreement will be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rules of strict construction will be applied against any party hereto.

14.         No Third Party Beneficiaries

This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person or entity.

15.         Survival

All covenants, agreements, representations and warranties made by the Company and the Purchasers herein and in the Transaction Documents shall survive the execution of this Agreement, the delivery to the Purchasers of the Notes being purchased and the payment therefore.

16.         Successors and Assigns

This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns, including any purchasers of the Notes. The Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Majority Noteholders, including by merger or consolidation, except in accordance with the applicable provisions of the Notes with respect to which the Company is in compliance. Each Purchaser may assign, without the consent of the Company, some or all of its rights hereunder to any person or entity to whom such Purchaser assigns or transfers Notes, or the right to acquire Notes, in accordance herewith; provided , that such transferee agrees in writing to be bound with respect to the transferred Notes to the provisions hereof that apply to the transferring Purchaser, in which event such assignee shall be deemed to be a Purchaser hereunder with respect to such assigned rights.

17.         Counterparts

This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party hereto and delivered to the other party hereto; provided , that a facsimile or PDF signature shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original, not a facsimile or PDF signature.

18.         Headings

The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement.

19.         Severability

If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction.

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

EXHIBIT 10.3

SENIOR SECURED CONVERTIBLE PROMISSORY NOTE

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

Issuance Date: June 28, 2013

VYSTAR CORPORATION

SENIOR SECURED CONVERTIBLE PROMISSORY NOTE DUE JUNE 30, 2018

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

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

This Note is subject to the following additional provisions:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

EXHIBIT 10.4

SECURITY AGREEMENT

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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SIGNATURE PAGE TO THE SECURITY AGREEMENT

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