VYSTAR CORPORATION 8-K

Exhibit 10.1

STOCK PURCHASE AGREEMENT

This Stock Purchase Agreement (this “ Agreement ”) is entered into as of July 18, 2019 by and among Vystar Corporation, a Georgia corporation (the “ Buyer ”) and Steven Rotman and Bernard Rotman (individually, a “ Stockholder ” and collectively, the “ Stockholders ”), who own fifty-eight percent (58%) of the issued and outstanding capital stock of Murida Furniture Co., Inc. dba Rotmans Furniture (“ Rotmans ”). Capitalized terms used in this Agreement shall have the meanings ascribed to them in Article IX.

RECITALS

WHEREAS, each of the Stockholders owns the number of the issued and outstanding shares (collectively, the “ Shares ”) of the common stock (the “ Common Stock ”), of Rotmans set forth opposite his name on Schedule 1.1 attached hereto, which Shares in the aggregate represent fifty-eight percent (58%) of the issued and outstanding shares of capital stock of Rotmans; and

WHEREAS, Buyer desires to purchase, and the Stockholders desire to sell, the Shares for the consideration set forth below, subject to the terms and conditions of this Agreement;

NOW, THEREFORE, in consideration of the mutual promises hereinafter set forth and other good and valuable consideration, the receipt of which is hereby acknowledged, the Parties hereby agree as follows:

ARTICLE I

PURCHASE AND SALE OF SHARES

1.1            Purchase and Sale of Shares . Subject to and upon the terms and conditions of this Agreement, at the Closing, each Stockholder shall sell, transfer, convey, assign and deliver to Buyer, and Buyer shall purchase, acquire and accept from each Stockholder, all the Shares owned by such Stockholder, as set forth opposite such Stockholder’s name on Schedule 1.1 attached hereto. At the Closing, each Stockholder shall deliver to Buyer certificates evidencing the Shares owned by such Stockholder duly endorsed in blank or with stock powers duly executed by such Stockholder.

1.2            Purchase Price . The aggregate purchase price to be paid by Buyer for the Shares shall be Two Million Thirty Thousand Dollars ($2,030,000) (the “ Purchase Price ”) payable by a promissory note for cash in the form of Exhibit 1.2(a) (the “ Promissory Note ”) and a convertible note convertible into shares of the common stock of Buyer in the form set forth as Exhibit 1.2(b) (the “ Convertible Promissory Note ”), payable to each Stockholder in the manner set forth in Exhibit 1.2(c).

1.3            Intentionally Omitted .

1.4            Stockholders’ Representative .

(a)             The Stockholders hereby designate Steven Rotman as their representative (the “ Stockholders’ Representative ”) and authorize such Stockholders’ Representative (i) to take all action necessary in connection with the Closing (including the satisfaction or waiver of any closing condition), (ii) to assert, defend and/or settle any claim for indemnification pursuant to Article VII or Article VIII, (iii) to give and receive all notices required to be given under this Agreement, (iv) to serve as attorney-in-fact and agent for and on behalf of each Stockholder and (v) to take any and all additional action as is contemplated to be taken by or on behalf of the Stockholders by the terms of this Agreement and all Ancillary Agreements.

(b)             In the event that the Stockholders’ Representative dies, becomes unable to perform his responsibilities hereunder or resigns from such position, Stockholders holding, prior to the Closing, a majority of the Shares as set forth on Schedule 1.1 shall select another representative to fill such vacancy and such substituted representative shall be deemed to be the Stockholders’ Representative for all purposes of this Agreement.

(c)             All decisions and actions by the Stockholders’ Representative, including, without limitation, those set forth above in Section 1.4(a) shall be binding upon all of the Stockholders, and no Stockholder shall have the right to object, dissent, protest or otherwise contest the same.

(d)             By their execution of this Agreement, the Stockholders agree that:

(i)               Buyer shall be able to rely conclusively on the instructions and decisions of the Stockholders’ Representative as to all decisions and actions by the Stockholders’ Representative, including, without limitation, those set forth above in Section 1.4(a) or any other actions required to be taken by the Stockholders’ Representative hereunder, and no Party shall have any cause of action against Buyer for any action taken by Buyer in reliance upon the instructions or decisions of the Stockholders’ Representative;

(ii)             all actions, decisions and instructions of the Stockholders’ Representative shall be conclusive and binding upon all of the Stockholders and no Stockholder shall have any cause of action against the Stockholders’ Representative for any action taken, decision made or instruction given by the Stockholders’ Representative under this Agreement or any Ancillary Agreement, except for fraud or willful breach of this Agreement or any Ancillary Agreement by the Stockholders’ Representative;

(iii)            the provisions of this Section 1.4 are independent and severable, are irrevocable and coupled with an interest and shall be enforceable notwithstanding any rights or remedies that either Stockholder may have in connection with the transactions contemplated by this Agreement or any Ancillary Agreement;

(iv)             remedies available at law for any breach of the provisions of this Section 1.4 are inadequate; therefore, Buyer shall be entitled to temporary and permanent injunctive relief without the necessity of proving damages if Buyer brings an action to enforce the provisions of this Section 1.4; and

(v)             the provisions of this Section 1.4 shall be binding upon the executors, heirs, legal representatives and successors of each Stockholder, and any references in this Agreement to a Stockholder or the Stockholders shall mean and include the successors to the Stockholders’ rights hereunder, whether pursuant to testamentary disposition, the laws of descent and distribution or otherwise.

1.5            The Closing .

(a)             The Closing shall take place at the offices of Mirick O’Connell, Massachusetts, in Worcester, Massachusetts commencing at 11:00 a.m. local time on the Closing Date, and shall be deemed effective at 12:01 a.m. on the day of the Closing Date. All transactions at the Closing shall be deemed to take place simultaneously, and no transaction shall be deemed to have been completed and no documents or certificates shall be deemed to have been delivered until all other transactions are completed and all other documents and certificates are delivered.

(b)             At the Closing:

(i)               the Stockholders shall satisfy the conditions and deliver to Buyer the various certificates, instruments and documents set forth in Section 5.1;

(ii)             Buyer shall satisfy the conditions and deliver to the Stockholders the various certificates, instruments and documents set forth in Section 5.2;

(iii)            Buyer shall deliver the Promissory Notes and the Convertible Promissory Notes described in Section 1.2;

(iv)             each of the Stockholders shall deliver to Buyer the stock certificates representing all the Shares duly endorsed in accordance with Section 1.1; and

(v)             Buyer and the Stockholders shall execute and deliver to each other a cross-receipt evidencing the transactions referred to above.

1.6            Intentionally Deleted

1.7            Intentionally Deleted .

1.8            Further Assurances . At any time and from time to time after the Closing, at the request of Buyer and without further consideration, each of the Stockholders shall promptly execute and deliver such other instruments of sale, transfer, conveyance and assignment and take such actions as Buyer may reasonably request to more effectively transfer, convey and assign to Buyer, and to confirm Buyer’s rights to, title in and ownership of, all of the Shares owned by each such Stockholder, to put Buyer in actual possession and operating control of such Shares and the assets, properties and business of Rotmans, to assist Buyer in exercising all rights with respect thereto and to carry out the purpose and intent of this Agreement.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS REGARDING THE SHARES

Each Stockholder severally represents and warrants to Buyer that the statements contained in this Article II are true and correct as of the Closing Date.

2.1            Shares . Such Stockholder has good and marketable title to the Shares which are to be transferred to Buyer by such Stockholder pursuant hereto, free and clear of any and all covenants, conditions, restrictions, voting trust arrangements, liens, charges, encumbrances, options and adverse claims or rights whatsoever. Schedule 1.1 attached hereto sets forth a true and correct description of all Shares owned by such Stockholder.

2.2            Authorization . Such Stockholder has the full right, power and authority to enter into this Agreement and to transfer, convey and sell to Buyer at the Closing the Shares to be sold by such Stockholder hereunder and, upon consummation of the purchase contemplated hereby, Buyer will acquire from such Stockholder good and marketable title to such Shares, free and clear of all covenants, conditions, restrictions, voting trust arrangements, liens, charges, encumbrances, options and adverse claims or rights whatsoever, subject to Section 3.2(a) of the Disclosure Schedule.

2.3            Noncontravention . Except as set forth in Sections 3.2(a) and 3.4 of the Disclosure Schedule, such Stockholder is not a party to, subject to or bound by any agreement or any judgment, order, writ, prohibition, injunction or decree of any court or other Governmental Entity which would prevent the execution or delivery of this Agreement by such Stockholder or the transfer, conveyance and sale of the Shares to be sold by such Stockholder to Buyer pursuant to the terms hereof. None of the Shares held by such Stockholder at Closing will be subject to a repurchase or redemption right except as disclosed in Section 3.2(a) of the Disclosure Schedule.

2.4            Brokers . No broker or finder has acted for such Stockholder in connection with this Agreement or the transactions contemplated hereby, and no broker or finder is entitled to any brokerage or finder’s fee or other commissions in respect of such transactions based upon agreements, arrangements or understandings made by or on behalf of such Stockholder.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS REGARDING ROTMANS

Each of the Stockholders, jointly and severally, represents and warrants to Buyer that, except as set forth in the Disclosure Schedule, the statements contained in this Article III are true and correct as of the Closing Date, except to the extent such representations and warranties are specifically made as of a particular date (in which case such representations and warranties will be true and correct as of such date). The Disclosure Schedule shall be arranged in sections and subsections corresponding to the numbered and lettered sections and subsections contained in this Article III. The disclosures in any section or subsection of the Disclosure Schedule shall qualify other sections and subsections in this Article III only to the extent it is clear from a reading of the disclosure that such disclosure is applicable to such other sections and subsections. For purposes of this Article III, the phrase “to the knowledge of” or any phrase of similar import shall be deemed to refer to the actual knowledge of the Stockholders, as well as any other knowledge which the Stockholders would have possessed had they made reasonable inquiry of appropriate employees of Rotmans with respect to the matter in question.

3.1            Organization, Qualification and Corporate Power . Rotmans is a corporation duly organized, validly existing and in corporate and tax good standing under the laws of the Commonwealth of Massachusetts. Rotmans is duly qualified to conduct business and is in corporate and tax good standing under the laws of each jurisdiction listed in Section 3.1 of the Disclosure Schedule, which jurisdictions constitute the only jurisdictions in which the nature of Rotmans’ businesses or the ownership or leasing of its properties requires such qualification, except for those jurisdictions in which the failure to be so qualified or in good standing, individually or in the aggregate, has not had and would not reasonably be expected to have a Rotmans Material Adverse Effect. Rotmans has all requisite corporate power and authority to carry on the businesses in which it is engaged and to own and use the properties owned and used by it. Rotmans has furnished to Buyer complete and accurate copies of its Articles of Organization and Bylaws. Rotmans is not in default under or in violation of any provision of its Articles of Organization and Bylaws.

3.2            Capitalization .

(a)             The authorized capital stock of Rotmans consists of 20,000 shares of Common Stock, of which, as of the Closing Date, 20,000 shares will be issued and outstanding, and the Shares will as of the Closing Date be held of record and beneficially by the Stockholders as set forth on Schedule 1.1 . The Shares have been and on the Closing Date will be duly and validly issued and are, or will be on such date, fully paid and non-assessable. Except as disclosed in Section 3.2(a) of the Disclosure Schedule there are not, and on the Closing Date there will not be, outstanding (i) any options, warrants or other rights to purchase or acquire from Rotmans any capital stock of Rotmans; (ii) any securities convertible into or exchangeable for shares of such stock; (iii) any other commitments of any kind (written or oral) for the issuance of additional shares of capital stock or options, warrants or other securities of Rotmans; (iv) any obligation (contingent or otherwise) of Rotmans to purchase, redeem or otherwise acquire any shares of its capital stock or any interest therein or to pay any dividend or to make any other distribution in respect thereof; or (v) any outstanding or authorized stock appreciation, phantom stock or similar rights with respect to Rotmans.

(b)             Except as disclosed in Section 3.2(a) of the Disclosure Schedule there is no agreement, written or oral, between Rotmans and either Stockholder, or between the Stockholders, relating to the sale or transfer (including agreements relating to rights of first refusal, co-sale rights or “drag-along” rights), registration under the Securities Act, or voting, of the capital stock of Rotmans.

3.3            Authorization of Transaction . This Agreement has been duly executed and delivered by the Stockholders. This Agreement and all other agreements and obligations entered into and undertaken in connection with the transactions contemplated hereby to which either of the Stockholders is a party constitute the valid and legally binding obligations of the Stockholders, enforceable against them in accordance with their respective terms.

3.4            Noncontravention . The execution, delivery and performance by the Stockholders of this Agreement and the Ancillary Agreements to which they are parties, and the consummation by the Stockholders of the transactions contemplated hereby and thereby, will not, with or without the giving of notice or the passage of time or both, (a) violate the provisions of any law, rule or regulation applicable to Rotmans or either of the Stockholders; (b) violate the provisions of the Articles of Organization or by-laws of Rotmans; (c) violate any judgment, decree, order or award of any court, Governmental Entity or arbitrator; or (d), upon delivery of the notices and receipt of the terminations, consents and approvals set forth in Section 3.4 of the Disclosure Schedule, conflict with or result in the breach or termination of any term or provision of, or constitute a default under, or cause any acceleration under, or cause the creation of any lien, charge or encumbrance upon the properties or assets of Rotmans or the Shares pursuant to, any indenture, mortgage, deed of trust or other instrument or agreement to which Rotmans or either of the Stockholders is a party or by which Rotmans or its properties or either of the Stockholders or the Shares is or may be bound. Section 3.4 of the Disclosure Schedule sets forth a true, correct and complete list of all terminations, and notices to and consents and approvals of third parties, that are required in connection with the consummation by the Stockholders of the transactions contemplated by this Agreement.

3.5            Subsidiaries . Rotmans has no Subsidiaries.

3.6            Financial Statements . The Stockholders have provided to Buyer the Financial Statements. The Financial Statements have been prepared in accordance with good business practices and fairly present, in all material respects, the financial condition, results of operations and cash flows of Rotmans as of the respective dates thereof and for the periods referred to therein and are consistent with the books and records of Rotmans; provided , however, that the Financial Statements referred to in clause (b) of the definition of such term are subject to normal recurring year-end adjustments (which will not be material).

3.7            Absence of Certain Changes . Since the Most Recent Balance Sheet Date, (a) there has occurred no event or development which, individually or in the aggregate, has had a Rotmans Material Adverse Effect, and (b) except as set forth in Section 3.7 of the Disclosure Schedule Rotmans has not taken any of the following actions:

(a)             issued, sold or awarded any stock or other securities of Rotmans or any options, warrants or rights to acquire any such stock or other securities, or repurchased or redeemed any stock or other securities of Rotmans;

(b)             split, combined or reclassified any shares of its capital stock; or declared, set aside or paid any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;

(c)             created, incurred or assumed any indebtedness (including obligations in respect of capital leases); assumed, guaranteed, endorsed or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or made any loans, advances or capital contributions to, or investments in, any other person or entity;

(d)             entered into, adopted or amended any Employee Benefit Plan or any employment or severance agreement or arrangement of the type described in Section 3.21(l) or increased in any manner the compensation or fringe benefits of, or modified the employment terms of, its directors, officers or employees, generally or individually, or paid any bonus or other benefit to its directors, officers or employees (except for existing payment obligations listed in Section 3.21(o) of the Disclosure Schedule) or hired any new officers or (except in the Ordinary Course of Business) any new employees;

(e)             acquired, sold, leased, licensed or disposed of any assets or property, other than purchases and sales of assets in the Ordinary Course of Business;

(f)              mortgaged or pledged any of its property or assets or subjected any such property or assets to any Security Interest;

(g)             discharged or satisfied any Security Interest or paid any obligation or liability other than in the Ordinary Course of Business;

(h)             amended its charter, by-laws or other organizational documents;

(i)              changed its accounting methods, principles or practices, except insofar as may be required by a generally applicable change in GAAP;

(j)              made or changed any Tax election, changed an annual accounting period, filed any amended Tax Return, entered into any closing agreement, waived or extended any statute of limitations with respect to Taxes, settled or compromised any Tax liability, claim or assessment, surrendered any right to claim a refund of Taxes or taken any other similar action relating to the filing of any Tax Return or the payment of any Tax;

(k)             entered into, amended, terminated, taken or omitted to take any action that would constitute a violation of or default under, or waived any rights under, any contract or agreement of a nature required to be listed in Section 3.12, Section 3.13 or Section 3.15 of the Disclosure Schedule;

(l)               made or committed to make any capital expenditure in excess of $25,000 per item or $100,000 in the aggregate;

(m)              instituted or settled any Legal Proceeding; or

(n)             agreed in writing or otherwise to take any of the foregoing actions.

3.8            Undisclosed Liabilities . Except as set forth in Section 3.8 of the Disclosure Schedule, Rotmans has no liabilities (whether known or unknown, whether absolute or contingent, whether liquidated or unliquidated and whether due or to become due), except for (a) liabilities shown on the Most Recent Balance Sheet, (b) liabilities which have arisen since the Most Recent Balance Sheet Date in the Ordinary Course of Business and which are reflected on the Closing Balance Sheet and (c) contractual and other liabilities incurred in the Ordinary Course of Business which are not required by GAAP to be reflected on a balance sheet.

3.9            Tax Matters .

(a)      Rotmans has properly filed on a timely basis all Tax Returns that it was required to file in the jurisdictions listed in Section 3.9(m) of the Disclosure Schedule, and all such Tax Returns were true, correct and complete. Rotmans has properly paid on a timely basis all Taxes, whether or not shown on any Tax Returns, that were due and payable. All Taxes that Rotmans was required by law to withhold or collect have been withheld or collected and, to the extent required, have been properly paid on a timely basis to the appropriate Governmental Entity. Rotmans has complied with all information reporting and back-up withholding requirements, including maintenance of the required records with respect thereto, in connection with amounts paid to any employee, independent contractor, creditor or other third party.

(b)      The unpaid Taxes of Rotmans for periods through the Most Recent Balance Sheet Date do not exceed the accruals and reserves for Taxes (excluding accruals and reserves for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the Most Recent Balance Sheet. All Taxes attributable to the period from and after the Most Recent Balance Sheet Date and continuing through the Closing Date are, or will be, attributable to the conduct by Rotmans of its operations in the Ordinary Course of Business and are, or will be, consistent both as to type and amount with Taxes attributable to such comparable period in the immediately preceding year.

(c)      Rotmans is not and has never been a member of any group of corporations with which it has filed (or been required to file) consolidated, combined or unitary Tax Returns, other than a group of which the common parent is Rotmans. Rotmans (i) has no actual or potential liability under Treasury Regulation Section 1.1502-6 (or any comparable or similar provision of federal, state, local, or foreign law), as a transferee or successor, pursuant to any contractual obligation, or otherwise for any Taxes of any person other than Rotmans or (ii) is not a party to, bound by, or obligated under any Tax allocation, Tax sharing, Tax indemnity or similar agreement.

(d)      The Stockholders have delivered or made available to Buyer (i) complete and correct copies of all Tax Returns of Rotmans relating to Taxes for all taxable periods for which the applicable statute of limitations has not yet expired and (ii) complete and correct copies of all private letter rulings, revenue agent reports, information document requests, notices of assessment, notices of proposed deficiencies, deficiency notices, protests, petitions, closing agreements, settlement agreements, pending ruling requests and any similar documents submitted by, received by or agreed to by or on behalf of Rotmans relating to Taxes for all taxable periods for which the applicable statute of limitations has not yet expired. No examination or audit of any Tax Return of Rotmans by any Governmental Entity is currently in progress or, to the knowledge of the Stockholders, threatened, and the Stockholders do not know of any basis upon which a Tax deficiency or assessment could reasonably be expected to be asserted against Rotmans. Rotmans has not been informed in writing or, to the knowledge of the Stockholders, in any other manner by any jurisdiction that the jurisdiction believes that Rotmans was required to file any Tax Return that was not filed.

(e)      Rotmans has not (i) waived any statute of limitations with respect to Taxes or agreed to extend the period for assessment or collection of any Taxes, (ii) requested any extension of time within which to file any Tax Return, which Tax Return has not yet been filed, or (iii) executed or filed any power of attorney relating to Taxes with any Governmental Entity.

(f)       Rotmans is not a party to any Tax litigation. Rotmans has disclosed on its federal income Tax Returns all positions taken therein that could give rise to a substantial understatement of federal income Tax within the meaning of Section 6662 of the Code. Rotmans has disclosed on its federal and state income Tax Returns all reportable transactions as defined in Treasury Regulation Section 1.6011-4 and, if applicable, comparable provisions under state law.

(g)      There are no liens or other encumbrances with respect to Taxes upon any of the assets or properties of Rotmans, other than with respect to Taxes not yet due and payable.

(h)      Rotmans has not ever been a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code during the applicable period specified in Section 897(c)(l)(A)(ii) of the Code.

(i)        Rotmans has not made any payments, is not obligated to make any payments, nor is it a party to any agreement, contract, arrangement or plan that could obligate it to make any payments, that are or could be, separately or in the aggregate, “excess parachute payments” within the meaning of Section 280G of the Code (without regard to Sections 280G(b)(4) and 280G(b)(5) thereof).

(j)       None of the assets of Rotmans (i) is property that is required to be treated as being owned by any other person pursuant to the provisions of former Section 168(f)(8) of the Internal Revenue Code of 1954, (ii) is “tax exempt use property” within the meaning of Section 168(h) of the Code, (iii) directly or indirectly secures any debt the interest on which is tax exempt under Section 103(a) of the Code, or (iv) is subject to a lease under Section 7701(h) of the Code or under any predecessor section.

(k)      Rotmans has not undergone a change in its method of accounting resulting in an adjustment to its taxable income pursuant to Section 481 of the Code. Rotmans will not be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any (i) change in method of accounting for a taxable period ending on or prior to the Closing Date (or as a result of the transactions contemplated by this Agreement) under Section 481 of the Code (or any corresponding or similar provision of federal, state, local or foreign Tax law); (ii) “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or foreign Tax law) executed on or prior to the Closing Date; (iii) deferred intercompany gain or any excess loss account described in Treasury Regulations under Section 1502 of the Code (or any corresponding or similar provision of state, local or foreign Tax law); (iv) installment sale or open transaction disposition made on or prior to the Closing Date; or (v) prepaid amount received on or prior to the Closing Date. Rotmans currently utilizes the accrual method of accounting for income Tax purposes and such method of accounting has not changed in the past five (5) years.

(l)        Rotmans has not distributed to its stockholders or securityholders stock or securities of a controlled corporation, nor have stock or securities of Rotmans been distributed, in a transaction to which Section 355 or Section 361 of the Code applies.

(m)     Section 3.9(m) of the Disclosure Schedule sets forth each jurisdiction (other than United States federal) in which Rotmans files a Tax Return or is or has been liable for Taxes on a “nexus” basis and each jurisdiction that has sent notices or communications of any kind requesting information relating to Rotmans’ nexus with such jurisdiction.

(n)      Rotmans is not a “consenting corporation” within the meaning of former Section 341(f) of the Code, and none of the assets of Rotmans is subject to an election under former Section 341(f) of the Code.

(o)      Rotmans has maintained for all taxable periods for which the applicable statute of limitations has not yet expired complete and accurate records, including all applicable exemption, resale or other certificates, of (i) all sales to purchasers claiming to be exempt from sale and use Taxes based on the exempt status of the purchaser, and (ii) all other sales for which sales Tax or use Tax was not collected by Rotmans and as to which Rotmans is required to receive and retain resale certificates or other certificates relating to the exempt nature of the sale or use or non-applicability of the sale and use Taxes.

3.10             Personal Property . Section 3.10 of the Disclosure Schedule sets forth: (i) a true, correct and complete list of all items of tangible personal property owned by Rotmans as of the date hereof having either a net book value per unit or an estimated fair market value per unit in excess of $10,000; or not owned by Rotmans but in the possession of or used or useful in the business of Rotmans and having rental payments therefor in excess of $250 per month or $2,500 per year (collectively, the “ Personal Property ”); and (ii) a description of the owner of, and any agreement relating to the use of, each item of Personal Property not owned by Rotmans and the circumstances under which such property is used. For all Personal Property listed in Section 3.10 of the Disclosure Schedule which is a fixed asset (within the meaning of GAAP), the following additional information shall be included for each such fixed asset as of the Most Recent Balance Sheet Date: (i) cost, (ii) accumulated book depreciation (if any) and (iii) net book value. Except as disclosed in Section 3.10 of the Disclosure Schedule:

(a)             Rotmans has good and marketable title to each item of Personal Property listed in Section 3.10 of the Disclosure Schedule as owned by it, free and clear of all liens, leases, encumbrances, claims under bailment and storage agreements, equities, conditional sales contracts, security interests, charges and restrictions, except for liens, if any, for personal property taxes not due;

(b)             no officer, director, stockholder or employee of Rotmans, nor any spouse, child or other relative or affiliate thereof, owns directly or indirectly, in whole or in part, any of the Personal Property described in Section 3.10 of the Disclosure Schedule;

(c)             each item of Personal Property not owned by Rotmans is in such condition that upon the return of such property to its owner in its present condition at the end of the relevant lease term or as otherwise contemplated by the applicable agreement between Rotmans and the owner or lessor thereof, the obligations of Rotmans to such owner or lessor will be discharged;

(d)             the Personal Property is in good operating condition and repair, normal wear and tear excepted, is currently used by Rotmans in the Ordinary Course of Business; and

(e)              Rotmans owns or otherwise has the right to use all of the Personal Property now used or useful in the operation of its business or the use of which is necessary for or useful in the performance of any material contract, letter of intent or proposal to which it is a party.

3.11             Real Property . Rotmans has good, valid and marketable fee simple title to the Real Property listed on Section 3.11 of the Disclosure Schedules. Such real property is free and clear of liens and encumbrances except for the following:

(i)             those items set forth in Section 3.11 of the Disclosure Schedules;

(ii)             liens for Taxes for the then current year not yet due and payable as of the Closing Date or, if due and payable prior to the Closing Date, being contested in good faith by appropriate procedures;

(iii)            liens for municipal betterments assessed after the date of this Agreement;

(iv)            Federal, state and local laws, ordinances, bylaws, rules and regulations regulating use of land, including building codes, zoning bylaws, health and environmental laws;

(v)             mechanics, carriers’, workmen’s, repairmen’s or other like liens arising or incurred in the ordinary course of business;

(vi)            rights and obligations in party walls;

(vii)           any order, easement, restriction or agreement of record presently in force which does not interfere with the reasonable use of the Real Property as now used;

(viii)          utility easements in the adjoining ways;

(ix)             matters that would be disclosed by an accurate survey of the Real Property; and

(x)              other imperfections of title or encumbrances, if any, that have not had, and would not have, a Rotmans Material Adverse Effect.

3.12             Real Property Leases . Section 3.12 of the Disclosure Schedule lists all Leases and lists the term of each such Lease, any extension and expansion options, and the rent payable thereunder. Rotmans has delivered to Buyer complete and accurate copies of the Leases. With respect to each Lease:

(a)             such Lease is legal, valid, binding, enforceable and in full force and effect, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws now or hereinafter in effect relating to creditors’ rights and by general principles of equity;

(b)             such Lease will continue to be legal, valid, binding, enforceable and in full force and effect immediately following the Closing in accordance with the terms thereof as in effect immediately prior to the Closing, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws now or hereinafter in effect relating to creditors’ rights and by general principles of equity;

(c)             Neither Rotmans, nor, to the knowledge of the Stockholders, any other party, is in breach or violation of, or default under, any such Lease, and no event has occurred, is pending or, to the knowledge of the Stockholders, is threatened, which, after the giving of notice, with lapse of time, or otherwise, would constitute a breach or default by Rotmans or, to the knowledge of the Stockholders, any other party under such Lease;

(d)             there are no disputes, oral agreements or forbearance programs in effect as to such Lease;

(e)             Rotmans has not assigned, transferred, conveyed, mortgaged, deeded in trust or encumbered any interest in the leasehold or subleasehold;

(f)              to the knowledge of the Stockholders, all facilities leased or subleased thereunder are supplied with utilities and other services adequate for the operation of said facilities; and

(g)             to the knowledge of the Stockholders, there is no Security Interest, easement, covenant or other restriction applicable to the Real Property subject to such Lease which would reasonably be expected to materially impair the current uses or the occupancy by Rotmans of the property subject thereto.

3.13            Intellectual Property .

(a)             Section 3.13(a) of the Disclosure Schedule lists all Rotmans Registrations, in each case enumerating specifically the applicable filing or registration number, title, jurisdiction in which filing was made or from which registration issued, date of filing or issuance, names of all current applicant(s) and registered owners(s), as applicable. All assignments of Rotmans Registrations to Rotmans have been properly executed and recorded. All Rotmans Registrations are valid and enforceable and all issuance, renewal, maintenance and other payments that are or have become due with respect thereto have been timely paid by or on behalf of Rotmans. Section 3.13(a) also lists all Rotmans Owned Intellectual Property and all Rotmans Licensed Intellectual Property.

(b)             To the knowledge of the Stockholders, no person (including, without limitation, any current or former employee or consultant of Rotmans) is infringing, violating or misappropriating any of Rotmans Owned Intellectual Property or any Rotmans Licensed Intellectual Property which is exclusively licensed to Rotmans. Rotmans has provided to Buyer copies of all correspondence, analyses, legal opinions, complaints, claims, notices or threats concerning the infringement, violation or misappropriation of any Rotmans Owned Intellectual Property.

3.14            Inventory . All inventory of Rotmans, whether or not reflected in the Financial Statements, consists of a quality and quantity usable and 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 reserved for in the Financial Statements or on the accounting records of Rotmans as of the Closing Date, as the case may be.

3.15            Contracts .

(a)             Section 3.15 of the Disclosure Schedule lists the following agreements (written or oral) to which Rotmans is a party as of the date of this Agreement:

(i)             any agreement (or group of related agreements) for the lease of Personal Property from or to third parties;

(ii)            any agreement (or group of related agreements) for the purchase of products (A) which involves more than the sum of $10,000 or (B) in which Rotmans has granted manufacturing rights, “most favored nation” pricing provisions or marketing or distribution rights relating to any products or territory or has agreed to purchase a minimum quantity of goods or services or has agreed to purchase goods or services exclusively from a certain party;

(iii)            any agreement concerning the establishment or operation of a partnership, joint venture or limited liability company;

(iv)             any agreement (or group of related agreements) under which Rotmans has created, incurred, assumed or guaranteed (or may create, incur, assume or guarantee) indebtedness (including capitalized lease obligations) or under which Rotmans has imposed (or may impose) a Security Interest on any of its assets, tangible or intangible;

(v)             any agreement for the disposition of any significant portion of the assets or business of Rotmans (other than sales of products in the Ordinary Course of Business) or any agreement for the acquisition of the assets or business of any other entity (other than purchases of components in the Ordinary Course of Business);

(vi)             any agreement concerning confidentiality or noncompetition;

(vii)            any employment, consulting, retention or change-in-control agreement;

(viii)           any agreement involving any current or former officer, director or stockholder of Rotmans;

(ix)              any agreement under which the consequences of a default or termination would reasonably be expected to have a Rotmans Material Adverse Effect;

(x)             any agreement which contains any provisions requiring Rotmans to indemnify any other party (excluding indemnities contained in agreements for the purchase, sale or license of products entered into in the Ordinary Course of Business);

(xi)              any agreement that could reasonably be expected to have the effect of prohibiting or impairing the conduct of the business of Rotmans as currently conducted;

(xii)             any agreement under which Rotmans is restricted from selling, licensing or otherwise distributing any of its products to, or providing services to, customers or potential customers or any class of customers, in any geographic area, during any period of time or any segment of the market or line of business;

(xiii)            any agreement that would entitle any third party to receive a license or any other right to intellectual property of Buyer or any of Buyer’s Affiliates following the Closing; and

(xiv)            any other agreement (or group of related agreements) either involving more than $10,000 or not entered into in the Ordinary Course of Business.

(b)             Rotmans has delivered to Buyer a complete and accurate copy of each written agreement listed in Section 3.12 or Section 3.15 of the Disclosure Schedule. With respect to each agreement so listed, except as disclosed in Section 3.15(b) of the Disclosure Schedule, neither Rotmans nor, to the knowledge of the Stockholders, any other party, is in breach or violation of, or default under, any such agreement, and no event has occurred, is pending or, to the knowledge of Rotmans, is threatened, which, after the giving of notice, with lapse of time, or otherwise, would constitute a breach or default by Rotmans, or, to the knowledge of the Stockholders, any other party under such agreement.

(c)             Rotmans is not, and was not, a party to any contract currently in force or in force at any time during the six years preceding the date of this Agreement that (i) is or was between Rotmans, on the one hand, and a Governmental Entity, on the other hand, or (ii) is or was entered into by Rotmans as a subcontractor (at any tier) in furtherance of a contract between another entity and a Governmental Entity, and Rotmans has not participated, directly or indirectly, in the submission of any outstanding bids or proposals for any prospective contract that would meet the description of either of clauses (i) or (ii) of this Section 3.15(c) if such bid or proposal were successful.

3.16             Accounts Receivable . To the Stockholders’ knowledge, all accounts receivable of Rotmans reflected on the Most Recent Balance Sheet (other than those paid since the date thereof) are valid receivables subject to no setoffs or counterclaims and are current and will be collected (within 365 days after the date on which it first became due and payable), net of the applicable reserve for bad debts on the Most Recent Balance Sheet. A complete and accurate list of the accounts receivable reflected on the Most Recent Balance Sheet, showing the aging thereof, is included in Section 3.16 of the Disclosure Schedule. All accounts receivable of Rotmans that have arisen since the Most Recent Balance Sheet Date are valid receivables subject to no setoffs or counterclaims and will be collected (within 365 days after the date on which it first became due and payable), net of a reserve for bad debts in an amount proportionate to the reserve shown on the Most Recent Balance Sheet. Rotmans has not received any written notice from an account debtor stating that any account receivable is subject to any contest, claim or setoff by such account debtor.

3.17             Insurance . Section 3.17 of the Disclosure Schedule lists each insurance policy (including fire, theft, casualty, comprehensive general liability, workers compensation, business interruption, environmental, product liability and automobile insurance policies and bond and surety arrangements) to which Rotmans is a party, all of which are in full force and effect. To the Stockholders’ knowledge, such insurance policies are of the type and in amounts customarily carried by organizations conducting businesses or owning assets similar to those of Rotmans. There is no material claim pending under any such policy as to which coverage has been questioned, denied or disputed by the underwriter of such policy. All premiums due and payable under all such policies have been paid, Rotmans is not liable for retroactive premiums or similar payments, and Rotmans is otherwise in compliance in all material respects with the terms of such policies. Each such policy will continue to be enforceable and in full force and effect immediately following the Closing in accordance with the terms thereof as in effect immediately prior to the Closing.

3.18             Litigation . There is no Legal Proceeding which is pending or has been threatened against Rotmans or the Stockholders. There are no judgments, orders or decrees outstanding against Rotmans or either of the Stockholders.

3.19             Warranties . No product or service manufactured, sold, leased, licensed or delivered by Rotmans is subject to any guaranty, warranty, right of return, right of credit or other indemnity other than (i) the contracts that are set forth in Section 3.19 of the Disclosure Schedule, and (ii) manufacturers’ warranties for which Rotmans has no liability. Section 3.19 of the Disclosure Schedule sets forth the aggregate expenses incurred by Rotmans in fulfilling its obligations under its guaranty, warranty, right of return and indemnity provisions during the periods covered by the Financial Statements; and the Stockholders know of no reason why such expenses should significantly increase as a percentage of sales in the future.

3.20             Employees .

(a)             Section 3.20 of the Disclosure Schedule contains a list of all employees of Rotmans, along with the position and the annual rate of compensation of each such person. None of the employees of Rotmans are parties to a confidentiality or a non-competition agreement with Rotmans. Section 3.20 of the Disclosure Schedule contains a list of all employees of Rotmans who are not citizens of the United States. To the knowledge of the Stockholders, no key employee or group of employees has any plans to terminate employment with Rotmans (other than for the purpose of accepting employment with Buyer following the Closing) or not to accept employment with Buyer. Rotmans is in material compliance with all applicable laws relating to the hiring and employment of employees.

(b)             Rotmans is not a party to or bound by any collective bargaining agreement, nor has it experienced any strikes, grievances, claims of unfair labor practices or other collective bargaining disputes. The Stockholders have no knowledge of any organizational effort made or threatened, either currently or within the past two years, by or on behalf of any labor union with respect to employees of Rotmans.

(c)             None of Rotmans or any director, officer or other key employee of Rotmans or an Affiliate of Rotmans other than Steven Rotman, owns, directly or indirectly, individually or collectively, any interest in any entity which is in a business similar or competitive to the business of Rotmans, other than an interest in a publicly-held company of less than 5% of the outstanding stock thereof.

(d)             Section 3.20(d) of the Disclosure Schedule contains a list of all independent contractors currently engaged by Rotmans, along with the position, date of retention and rate of remuneration for each such person or entity. None of such independent contractors is a party to a written agreement or contract with Rotmans.

(e)             Rotmans employs no H-1B workers.

(f)              Rotmans has complied in all material respects with all laws and regulations related to employment and employment practices, including those related to wages, hours, worker classification, labor relations, collective bargaining, discrimination, equal opportunity, disability rights or benefits, affirmative action, workers compensation, employee leave, immigration, and the payment and withholding of Taxes and other sums as required by applicable law. Rotmans has withheld and paid to the appropriate Governmental Entity or is holding for payment not yet due to such Governmental Entity all amounts required to be withheld from its employees and is not liable for any arrears of wages, Taxes, penalties or other sums for failure to comply with any of the foregoing. Except as set forth in Section 3.20(f) of the Disclosure Schedule, there are no, and at no time have been, any independent contractors who have provided services to Rotmans for a period of six consecutive months or longer. Except as set forth in Section 3.20(f) of the Disclosure Schedule, Rotmans has not ever had any temporary or leased employees.

(g)             Rotmans has not caused or anticipates causing any “employment loss” (as that term is defined or used in the Worker Adjustment and Retraining Notification Act of 1988 (the “ WARN Act ”)) at any time from the date that is 90 calendar days immediately preceding the Closing Date and continuing through the Closing Date, in each case, which is reasonably likely to result in a “Plant Closing” or a “Mass Layoff” within the meaning of the WARN Act as of the Closing Date.

(h)             Rotmans is not a party to or bound by any trade union agreement, works council, employee representative agreement, or information or consultation agreement, and Rotmans has no obligations to inform, consult with and/or obtain consent from any of its employees about the transactions contemplated by this Agreement.

3.21             Employee Benefits .

(a)             Section 3.21(a) of the Disclosure Schedule contains a complete and accurate list of all Rotmans Plans. Complete and accurate copies of (i) all Rotmans Plans which have been reduced to writing, (ii) written summaries of all unwritten Rotmans Plans, (iii) all related trust agreements, insurance contracts and summary plan descriptions, and (iv) all annual reports filed on IRS Form 5500 and (for all funded plans) all plan financial statements for the last five plan years for each Rotmans Plan, have been delivered or made available to Buyer. Rotmans has no ERISA Affiliates.

(b)             Each Rotmans Plan has been administered in accordance with its terms and Rotmans has met its obligations with respect to each Rotmans Plan and has made all required contributions thereto. Each Rotmans Plan is in material compliance with the currently applicable provisions of ERISA and the Code and the regulations thereunder (including Section 4980B of the Code, Subtitle K, Chapter 100 of the Code and Sections 601 through 608 and Section 701 et seq. of ERISA). All filings and reports as to each Rotmans Plan required to have been submitted to the Internal Revenue Service or to the United States Department of Labor have been duly submitted. No Rotmans Plan has assets that include securities issued by Rotmans.

(c)             There are no Legal Proceedings (except claims for benefits payable in the normal operation of Rotmans Plans and proceedings with respect to qualified domestic relations orders) against or involving any Rotmans Plan or asserting any rights or claims to benefits under any Rotmans Plan that could give rise to any liability. No Rotmans Plan is or within the last three calendar years has been the subject of, or has received notice that it is the subject of, examination by a Governmental Entity or a participant in a government sponsored amnesty, voluntary compliance or similar program.

(d)             No Rotmans Plans are qualified under Section 401(a) of the Code.

(e)             Rotmans has never maintained an Employee Benefit Plan subject to Section 412 of the Code or Title IV of ERISA or an Employee Pension Benefit Plan (as defined in Section 3(2) of ERISA).

(f)              At no time has Rotmans been obligated to contribute to any “multiemployer plan” (as defined in Section 4001(a)(3) of ERISA).

(g)             There are no unfunded obligations under any Rotmans Plan providing benefits after termination of employment to any employee of Rotmans (or to any beneficiary of any such employee), including but not limited to retiree health coverage and deferred compensation, but excluding continuation of health coverage required to be continued under Section 4980B of the Code or other applicable law and insurance conversion privileges under state law. The assets of each Rotmans Plan which is funded are reported at their fair market value on the books and records of such Rotmans Plan.

(h)             All premiums or other payments for all periods ending on or before the Closing Date have been paid with respect to each Rotmans Plan that is an Employee Welfare Benefit Plan (as defined in Section 3(1) of ERISA).

(i)               No act or omission has occurred and no condition exists with respect to any Rotmans Plan that would subject Rotmans or any plan participant to (i) any material fine, penalty, tax or liability of any kind imposed under ERISA or the Code or (ii) any contractual indemnification or contribution obligation protecting any fiduciary, insurer or service provider with respect to any Rotmans Plan, nor will the transactions contemplated by this Agreement give rise to any such liability.

(j)              No Rotmans Plan is funded by, associated with or related to a “voluntary employee’s beneficiary association” within the meaning of Section 501(c)(9) of the Code.

(k)             Each Rotmans Plan is amendable and terminable unilaterally by Rotmans at any time without liability or expense to Rotmans or such Rotmans Plan as a result thereof (other than for benefits accrued through the date of termination or amendment and reasonable administrative expenses related thereto), and no Rotmans Plan, plan documentation or agreement, summary plan description or other written communication distributed generally to employees by its terms prohibits Rotmans from amending or terminating any such Rotmans Plan. The investment vehicles used to fund a Rotmans Plan may be changed at any time without incurring a sales charge, surrender fee or similar expense.

(l)               Section 3.21(l) of the Disclosure Schedule discloses each: (i) agreement with any stockholder, director, executive officer or other key employee of Rotmans (A) the benefits of which are contingent, or the terms of which are altered, upon the occurrence of a transaction involving Rotmans of the nature of any of the transactions contemplated by this Agreement, (B) providing any term of employment or compensation guarantee or (C) providing severance benefits or other benefits after the termination of employment of such director, executive officer or key employee; (ii) agreement, plan or arrangement under which any person may receive payments from Rotmans that may be subject to the tax imposed by Section 4999 of the Code or included in the determination of such person’s “parachute payment” under Section 280G of the Code; and (iii) agreement or plan binding Rotmans, including any stock option plan, stock appreciation right plan, restricted stock plan, stock purchase plan, severance benefit plan or Rotmans Plan, any of the benefits of which will be increased, or the vesting of the benefits of which will be accelerated, by the occurrence of any of the transactions contemplated by this Agreement or the value of any of the benefits of which will be calculated on the basis of any of the transactions contemplated by this Agreement.

(m)             Each individual who has received compensation for the performance of services on behalf of Rotmans has been properly classified as an employee or independent contractor in accordance with applicable law.

(n)             Section 3.21(n) of the Disclosure Schedule sets forth the policy of Rotmans with respect to accrued vacation, accrued sick time and earned time off and the amount of such liabilities as of the Most Recent Balance Sheet Date.

(o)             Section 3.21(o) of the Disclosure Schedule sets forth each bonus earned by each employee of Rotmans through the Closing Date that is expected to be accrued on the Closing Balance Sheet but unpaid as of the Closing Date.

(p)             Except as set forth in Section 3.21(p) of the Disclosure Schedule, there are no loans or extension of credit from Rotmans to either Stockholder or any employee of or independent contractor to Rotmans.

(q)             There is no plan or commitment, whether legally binding or not, to create any additional Rotmans Plans or to modify any existing Rotmans Plans with respect to employees of Rotmans.

(r)              Section 3.21(r) of the Disclosure Schedule sets forth each corporate-owned life insurance (COLI), split-dollar life insurance policy or any other life insurance policy on the life of any employee of Rotmans or on either Stockholder.

(s)              Each Rotmans Plan that is a “nonqualified deferred compensation plan” that is subject to Code Section 409A complies with the requirements of Code Section 409A(a)(2), (3) and (4) and any Internal Revenue Service guidance issued thereunder except that to the extent Internal Revenue Service guidance allows Code Section 409A to be satisfied by maintenance of a plan in good faith, reasonable compliance with Code Section 409A, such Rotmans Plan has been so maintained and no amounts under any such Rotmans Plan is or has been subject to the interest and additional tax set forth under Code Section 409A(a)(1)(B).

(t)              With respect to each Rotmans Plan that is maintained outside the jurisdiction of the United States or primarily covers employees residing or working outside the United States, (i) said Rotmans Plan has been established, maintained and administered in all material respects in compliance with its terms and all applicable laws; (ii) all contributions and expenses that are required to be made have been made or properly accrued; and (iii) with respect to any such Rotmans Plan that is intended to be eligible to receive favorable tax treatment under the laws applying to such Rotmans Plan, all requirements necessary to obtain such favorable tax treatment have been satisfied.

3.22             Environmental Matters .

(a)             Rotmans has complied in all material respects with all applicable Environmental Laws. There is no pending or, to the knowledge of the Stockholders, threatened civil or criminal litigation, written notice of violation, formal administrative proceeding, or investigation, inquiry or information request by any Governmental Entity, relating to any Environmental Law involving Rotmans.

(b)             Rotmans has no liabilities or obligations arising from the release of any Materials of Environmental Concern into the environment.

(c)             Set forth in Section 3.22(c) of the Disclosure Schedule is a list of all documents (whether in hard copy or electronic form) that contain any environmental reports, investigations and audits relating to premises currently or previously owned or operated by Rotmans (whether conducted by or on behalf of Rotmans or a third party, and whether done at the initiative of Rotmans or directed by a Governmental Entity or other third party) which Rotmans has possession of or access to. A complete and accurate copy of each such document has been provided to Buyer.

(d)             Rotmans is not aware of any material environmental liability of any solid or hazardous waste transporter or treatment, storage or disposal facility that has been used by Rotmans.

3.23             Legal Compliance . Rotmans is currently conducting, and has at all times conducted, its business in material compliance with each applicable law (including rules and regulations thereunder) of any federal, state, local or foreign government, or any Governmental Entity. Rotmans has not received any notice or communication from any Governmental Entity alleging noncompliance with any applicable law, rule or regulation.

3.24             Suppliers . Section 3.24 of the Disclosure Schedule sets forth a list of each supplier that is the sole supplier of any significant product or service to Rotmans. To the Stockholders’ knowledge, no supplier has indicated within the past year that it will stop, or decrease the rate of, buying products or supplying products, as applicable, to Rotmans.

3.25             Permits . Section 3.25 of the Disclosure Schedule sets forth a list of all Permits issued to or held by Rotmans. Such listed Permits are the only Permits that are required for Rotmans to conduct its business as presently conducted. Each such Permit is in full force and effect; Rotmans is in material compliance with the terms of each such Permit; and, to the knowledge of the Stockholders, no suspension or cancellation of such Permit is threatened and there is no basis for believing that such Permit will not be renewable upon expiration. Each such Permit will continue in full force and effect immediately following the Closing for the period of its duration.

3.26             Certain Business Relationships With Affiliates . Except as set forth in Section 3.26 of the Disclosure Schedule, no Affiliate of Rotmans (a) owns any property or right, tangible or intangible, which is used in the business of Rotmans, (b) has any claim or cause of action against Rotmans, or (c) owes any money to, or is owed any money by, Rotmans. Section 3.26 of the Disclosure Schedule describes any commercial transactions or relationships between Rotmans or any Affiliate thereof which occurred or have existed since the beginning of the time period covered by the Financial Statements.

3.27             Brokers’ Fees . Rotmans has no liability or obligation to pay any fees or commissions to any broker, finder or agent with respect to the transactions contemplated by this Agreement.

3.28             Books and Records . Except as set forth in Section 3.28 of the Disclosure Schedule, the minute books and other similar records of Rotmans contains complete and accurate records of all actions taken at any meetings of Rotmans’ stockholders, board of directors or any committee thereof and of all written consents executed in lieu of the holding of any such meeting. Except as set forth in Section 3.28 of the Disclosure Schedule, the books and records of Rotmans accurately reflect the assets, liabilities, business, financial condition and results of operations of Rotmans and have been maintained in accordance with good business and bookkeeping practices.

3.29             Banking Facilities . Section 3.29 of the Disclosure Schedule sets forth a true, correct and complete list of:

(a)             each bank, savings and loan or similar financial institution in which Rotmans has an account or safety deposit box and the numbers of the accounts or safety deposit boxes maintained by Rotmans; and

(b)             the names of all persons authorized to draw on each such account or to have access to any such safety deposit box facility, together with a description of the authority (and conditions thereof, if any) of each such person with respect thereto.

3.30             Powers of Attorney and Suretyships . Rotmans has no general or special powers of attorney outstanding (whether as grantor or grantee thereof) or has any obligation or liability (whether actual, accrued, accruing, contingent or otherwise) as guarantor, surety, co-signer, endorser, co-maker, indemnitor or otherwise in respect of the obligation of any person, corporation, partnership, joint venture, association, organization or other entity, except as endorser or maker of checks or letters of credit, respectively, endorsed or made in the Ordinary Course of Business.

3.31             Controls and Procedures . Rotmans maintains accurate books and records reflecting its assets and liabilities and maintains proper and adequate internal control over financial reporting which provide assurance that (a) transactions are executed with management’s authorization, (b) transactions are recorded as necessary to permit preparation of the financial statements of Rotmans and to maintain accountability for Rotmans’ assets, (c) access to assets of Rotmans is permitted only in accordance with management’s authorization, (d) the reporting of assets of Rotmans is compared with existing assets at regular intervals and (e) accounts, notes and other receivables were recorded accurately in all material respects, and proper and adequate procedures are implemented to effect the collection thereof on a current and timely basis.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE BUYER

Buyer represents and warrants to each of the Stockholders that the statements contained in this Article IV are true and correct as of the Closing Date, except to the extent such representations and warranties are specifically made as of a particular date (in which case such representations and warranties will be true and correct as of such date).

4.1            Organization and Corporate Power . Buyer is a corporation duly organized, validly existing and in corporate and tax good standing under the laws of the State of Georgia. Buyer has all requisite corporate power and authority to carry on the businesses in which it is engaged and to own and use the properties owned and used by it.

4.2            Authorization of the Transaction . Buyer has all requisite power and authority to execute and deliver this Agreement and the Ancillary Agreements and to perform its obligations hereunder and thereunder. The execution and delivery by Buyer of this Agreement and the Ancillary Agreements and the consummation by Buyer of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary corporate action on the part of Buyer and no consents or approvals of third parties are required in connection with the consummation by the Buyer of the transactions contemplated by this Agreement. This Agreement and all other agreements and obligations entered into or undertaken in connection with the transactions contemplated hereby to which Buyer is a party have been duly and validly executed and delivered by Buyer and constitute the valid and legally binding obligations of Buyer, enforceable against it in accordance with their respective terms.

4.3            Noncontravention . Neither the execution, delivery and performance by Buyer of this Agreement or the Ancillary Agreements, nor the consummation by Buyer of the transactions contemplated hereby or thereby, will (a) conflict with or violate any provision of the Certificate of Incorporation or by-laws of Buyer; (b) require on the part of Buyer any filing with, or permit, authorization, consent or approval of, any Governmental Entity, (c) conflict with, result in breach of, constitute (with or without due notice or lapse of time or both) a default under, result in the acceleration of obligations under, create in any party any right to terminate, modify or cancel, or require any notice, consent or waiver under, any contract, indenture, mortgage, deed of trust or other instrument to which Buyer is a party or by which it is bound or to which any of its assets is subject, or (d) violate any judgment, order, writ, injunction, award, or decree of any court, Governmental Entity, or arbitrator, law, statute, rule or regulation applicable to Buyer or any of its properties or assets.

4.4            Investment Representation . Buyer is acquiring the Shares from each Stockholder for its own account for investment and not with a view to, or for sale in connection with, any distribution thereof, nor with any present intention of distributing or selling the same; and Buyer has no present or contemplated agreement, undertaking, arrangement, obligation, indebtedness or commitment providing for the disposition thereof.

ARTICLE V

CONDITIONS TO CLOSING

5.1            Conditions to Obligations of Buyer . The obligation of Buyer to consummate the transactions contemplated by this Agreement to be consummated at the Closing is subject to the satisfaction of the following conditions:

(a)             Unless waived by Buyer, the Stockholders shall have obtained at their own expense (and shall have provided copies thereof to Buyer) all of the waivers, permits, consents, approvals or other authorizations, and effected all registrations, filings and notices which are required on the part of Rotmans, including without limitation, those set forth in Section 3.4 of the Disclosure Schedule;

(b)             the representations and warranties of the Stockholders set forth in this Agreement shall be true and correct in all respects, in each case as of the date of the Closing, except to the extent such representations and warranties are specifically made as of a particular date (in which case such representations and warranties shall be true and correct as of such date);

(c)             the Stockholders shall have performed or complied with their agreements and covenants required to be performed or complied with under this Agreement as of or prior to the Closing;

(d)             no Legal Proceeding shall be pending or threatened wherein an unfavorable judgment, order, decree, stipulation or injunction would (i) prevent consummation of the transactions contemplated by this Agreement, (ii) cause the transactions contemplated by this Agreement to be rescinded following consummation or (iii) affect adversely the right of Buyer to own the Shares, own, operate and control Rotmans, or to conduct the business of Rotmans as currently conducted, following the Closing, and no such judgment, order, decree, stipulation or injunction shall be in effect;

(e)             the Stockholders shall have delivered to Buyer the Stockholder Certificate;

(f)              Buyer shall have received copies of the resignations, effective as of the Closing, of the Stockholders in their capacity as directors and officers of Rotmans;

(g)             prior to the Closing, (i) Rotmans shall deliver to Buyer and to the Internal Revenue Service notices that the Shares are not “U.S. real property interests” in accordance with Treasury Regulations under Sections 897 and 1445 of the Code, or (ii) each of the Stockholders shall deliver to Buyer certifications that they are not foreign persons in accordance with the Treasury Regulations under Section 1445 of the Code. If Buyer does not receive either the notices or the certifications described above on or before the Closing Date, Buyer shall be permitted to withhold from the payments to be made pursuant to this Agreement any required withholding tax under Section 1445 of the Code;

(h)             unless waived by Buyer, the Stockholders shall have obtained at their expense (and shall have provided to Buyer) Tax good standing certificates or other documentation satisfactory to Buyer with respect to each jurisdiction to which Rotmans may be subject to Tax authority; and

(i)               Buyer shall have received such other certificates and instruments (including certificates of good standing (or equivalent) of Rotmans in its jurisdictions of organization and the various foreign jurisdictions (if any) in which it is qualified to do business, certified charter documents, certificates as to the incumbency of officers and the adoption of authorizing resolutions) as it shall reasonably request in connection with the Closing.

5.2            Conditions to Obligations of the Stockholders . The obligation of the Stockholders to consummate the transactions contemplated by this Agreement to be consummated at the Closing is subject to the satisfaction of the following conditions:

(a)             the representations and warranties of Buyer set forth in this Agreement shall be true and correct in all respects, in each case as of the date of the Closing, except to the extent such representations and warranties are specifically made as of a particular date (in which case such representations and warranties shall be true and correct as of such date);

(b)             Buyer shall have performed or complied with its agreements and covenants required to be performed or complied with under this Agreement as of or prior to the Closing;

(c)             no Legal Proceeding shall be pending or threatened wherein an unfavorable judgment, order, decree, stipulation or injunction would (i) prevent consummation of the transactions contemplated by this Agreement or (ii) cause the transactions contemplated by this Agreement to be rescinded following consummation, and no such judgment, order, decree, stipulation or injunction shall be in effect;

(d)             Buyer shall have delivered to the Stockholders the Buyer Certificate; and

(e)             the Stockholders shall have received such other certificates and instruments (including certificates of good standing of Buyer in its jurisdiction of organization, certificates as to the incumbency of officers and the adoption of authorizing resolutions) as they shall reasonably request in connection with the Closing.

ARTICLE VI

POST-CLOSING COVENANTS

6.1            Proprietary Information . From and after the Closing, neither Stockholder shall, either directly or indirectly (including through an Affiliate), disclose or make use of (except to pursue their rights under this Agreement or the Ancillary Agreements), and each Stockholder shall use his reasonable efforts to cause any of his Affiliates not to disclose or make use of, any knowledge, information or documents of a confidential nature or not generally known to the public with respect to Rotmans, Rotmans’ business’s business or Buyer or its business (including the financial information, technical information or data relating to Rotmans’ products and names of customers of Rotmans, as well as filings and testimony (if any) presented in the course of any arbitration of a Dispute pursuant to Section 7.3 and the arbitral award and the Arbitrator’s reasons therefor relating to the same), except to the extent that such knowledge, information or documents shall have become public knowledge other than through improper disclosure by any of the Stockholders or any of their Affiliates.

6.2            Solicitation and Hiring . For a period of five years after the Closing Date neither Stockholder shall, either directly or indirectly (including through an Affiliate or through assistance to an organization other than Rotmans and Buyer), (a) solicit or attempt to induce any Restricted Employee to terminate his employment with Rotmans; (b) hire or attempt to hire any Restricted Employee; provided , that this clause (b) shall not apply to any individual whose employment with Rotmans, Buyer or a subsidiary of Buyer has been terminated for a period of twelve months or longer; or (c) solicit, divert, take away or attempt to take away any of Buyer’s or any of its Affiliates’ customers, or the business or patronage of such customers, or in any way interfere with, disrupt or attempt to disrupt any then-existing relationships between Buyer or any Affiliate of Buyer and any of their respective customers, suppliers or other persons with whom any of them deal.

6.3            Non-Competition .

(a)             For a period of three (3) years after the Closing Date, neither Stockholder shall, either directly or indirectly as a stockholder, investor, partner, consultant or otherwise, engage anywhere in the Commonwealth of Massachusetts in retail selling of furniture, bedding or carpets.

(b)             Each of the Stockholders agrees that the duration and geographic scope of the non-competition provision set forth in this Section 6.3 are reasonable. In the event that any court determines that the duration or the geographic scope, or both, are unreasonable and that such provision is to that extent unenforceable, the Parties agree that the provision shall remain in full force and effect for the greatest time period and in the greatest area that would not render it unenforceable. The Parties intend that this non-competition provision shall be deemed to be a series of separate covenants, one for each and every county of each and every state of the United States of America and each and every political subdivision of each and every country outside the United States of America where this provision is intended to be effective.

(c)             Each of the Stockholders shall, and shall use his best efforts to cause his Affiliates to, refer all inquiries regarding the business, products and services of Rotmans to Buyer.

6.4            Cooperation in Litigation . From and after the Closing Date, each Party shall fully cooperate with the other in the defense or prosecution of any litigation or proceeding already instituted or which may be instituted hereafter against or by such other Party relating to or arising out of the conduct of the business of Rotmans or Buyer prior to or after the Closing Date (other than litigation among the Parties and/or their Affiliates arising out the transactions contemplated by this Agreement). The Party requesting such cooperation shall pay the reasonable out-of-pocket expenses incurred in providing such cooperation (including legal fees and disbursements) by the Party providing such cooperation and, if applicable, by its officers, directors, employees and agents, but shall not be responsible for reimbursing such Party or its officers, directors, employees and agents, for their time spent in such cooperation.

ARTICLE VII

INDEMNIFICATION

7.1            Indemnification by the Stockholders . The Stockholders, severally with respect to claims related to breaches of Article II and Article VI, and jointly and severally with respect to all other claims, shall indemnify Buyer in respect of, and hold Buyer harmless against, Damages incurred or suffered by Buyer or any Affiliate thereof resulting from, relating to or constituting:

(a)             any breach, as of the Closing Date, of any representation or warranty of the Stockholders contained in this Agreement, any Ancillary Agreement or any other agreement or instrument furnished by the Stockholders to Buyer pursuant to this Agreement;

(b)             any failure to perform any covenant or agreement of the Stockholders contained in this Agreement, any Ancillary Agreement or any agreement or instrument furnished by the Stockholders to Buyer pursuant to this Agreement;

(c)             any failure of either Stockholder to have good, valid and marketable title to the issued and outstanding Shares issued in the name of such Stockholder, free and clear of all Security Interests; or

(d)             any claim by a stockholder or former stockholder of Rotmans, or any other person or entity, seeking to assert, or based upon: (i) ownership or rights to ownership of any shares of stock of Rotmans; (ii) any rights of a stockholder, including any option, preemptive rights or rights to notice or to vote; (iii) any rights under the Articles of Organization or by-laws of Rotmans; or (iv) any claim that his or her shares were wrongfully repurchased by Rotmans.

7.2            Indemnification by Buyer . Buyer shall indemnify the Stockholders in respect of, and hold them harmless against, any and all Damages incurred or suffered by the Stockholders resulting from, relating to or constituting:

(a)             any breach, as of the Closing Date, of any representation or warranty of Buyer contained in this Agreement, any Ancillary Agreement or any other agreement or instrument furnished by Buyer to the Stockholders pursuant to this Agreement; or

(b)             any failure to perform any covenant or agreement of Buyer contained in this Agreement, any Ancillary Agreement or any other agreement or instrument furnished by Buyer to the Stockholders pursuant to this Agreement.

7.3            Indemnification Claims .

(a)             An Indemnified Party shall give written notification to the Indemnifying Party of the commencement of any Third Party Action. Such notification shall be given within 20 days after receipt by the Indemnified Party of notice of such Third Party Action, and shall describe in reasonable detail (to the extent known by the Indemnified Party) the facts constituting the basis for such Third Party Action and the amount of the claimed Damages; provided , however, that no delay or failure on the part of the Indemnified Party in so notifying the Indemnifying Party shall relieve the Indemnifying Party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Party may, upon written notice thereof to the Indemnified Party, assume control of the defense of such Third Party Action with counsel reasonably satisfactory to the Indemnified Party; provided , that (i) the Indemnifying Party may only assume control of such defense if (A) it acknowledges in writing to the Indemnified Party that any damages, fines, costs or other liabilities that may be assessed against the Indemnified Party in connection with such Third Party Action constitute Damages, as applicable, for which the Indemnified Party shall be indemnified pursuant to this Article VII and (B) the Claimed Amount is less than or equal to the amount of Damages, as applicable, for which the Indemnifying Party is liable under this Article VII and (ii) the Indemnifying Party may not assume control of the defense of a Third Party Action involving criminal liability, Taxes (which shall be governed by Section 8.6(b)) or in which equitable relief is sought against the Indemnified Party. If the Indemnifying Party does not, or is not permitted under the terms hereof to, so assume control of the defense of a Third Party Action, the Indemnified Party shall control such defense. The Non-controlling Party may participate in such defense at its own expense. The Controlling Party shall keep the Non-controlling Party advised of the status of such Third Party Action and the defense thereof and shall consider in good faith recommendations made by the Non-controlling Party with respect thereto. The Non-controlling Party shall furnish the Controlling Party with such information as it may have with respect to such Third Party Action (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party in the defense of such Third Party Action. The fees and expenses of counsel to the Indemnified Party with respect to a Third Party Action shall be considered Damages, as applicable, for purposes of this Agreement if (i) the Indemnified Party controls the defense of such Third Party Action pursuant to the terms of this Section 7.3(a), or (ii) the Indemnifying Party assumes control of such defense and the Indemnified Party reasonably concludes that the Indemnifying Party and the Indemnified Party have conflicting interests or different defenses available with respect to such Third Party Action. The Indemnifying Party shall not agree to any settlement of, or the entry of any judgment arising from, any Third Party Action without the prior written consent of the Indemnified Party, which shall not be unreasonably withheld, conditioned or delayed. The Indemnified Party shall not agree to any settlement of, or the entry of any judgment arising from, any such Third Party Action without the prior written consent of the Indemnifying Party, which shall not be unreasonably withheld, conditioned or delayed.

(b)             In order to seek indemnification under this Article VII, an Indemnified Party shall deliver a Claim Notice to the Indemnifying Party.

(c)             Within 20 days after delivery of a Claim Notice, the Indemnifying Party shall deliver to the Indemnified Party a Response, in which the Indemnifying Party shall: (i) agree that the Indemnified Party is entitled to receive all of the Claimed Amount (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Claimed Amount, by check or by wire transfer; (ii) agree that the Indemnified Party is entitled to receive the Agreed Amount (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Agreed Amount, by check or by wire transfer; or (iii) dispute that the Indemnified Party is entitled to receive any of the Claimed Amount. If within 25 days after receiving a Claim Notice the Indemnifying Party does not give written notice to the Indemnified Party of a Dispute, the amount of indemnity payable for such claim shall be the Claimed Amount.

(d)             During the 30-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Party and the Indemnified Party shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 30-day period, the Indemnifying Party and the Indemnified Party shall discuss in good faith the submission of the Dispute to binding arbitration, and if the Indemnifying Party and the Indemnified Party agree in writing to submit the Dispute to such arbitration, then the provisions of Section 7.3(e) shall become effective with respect to such Dispute. The provisions of this Section 7.3(d) shall not obligate the Indemnifying Party and the Indemnified Party to submit to arbitration or any other alternative dispute resolution procedure with respect to any Dispute, and in the absence of an agreement by the Indemnifying Party and the Indemnified Party to arbitrate any Dispute, such Dispute shall be resolved in a state or federal court sitting in Boston, Massachusetts, in accordance with Section 10.12.

(e)             If, as set forth in Section 7.3(d), the Indemnified Party and the Indemnifying Party agree to submit any Dispute to binding arbitration, the arbitration shall be conducted by a single arbitrator (the “ Arbitrator ”) in accordance with the Commercial Rules in effect from time to time and the following provisions.

(i)               In the event of any conflict between the Commercial Rules in effect from time to time and the provisions of this Agreement, the provisions of this Agreement shall prevail and be controlling.

(ii)             The parties shall commence the arbitration by jointly filing a written submission with the Boston, Massachusetts office of the AAA in accordance with Commercial Rule 5 (or any successor provision).

(iii)            Not later than 30 days after the conclusion of the arbitration hearing, the Arbitrator shall prepare and distribute to the parties a writing setting forth the arbitral award and the Arbitrator’s reasons therefor. Any award rendered by the Arbitrator shall be final, conclusive and binding upon the parties, and judgment thereon may be entered and enforced in any court of competent jurisdiction (subject to Section 10.12), provided , that the Arbitrator shall have no power or authority to grant injunctive relief, specific performance or other equitable relief.

(iv)             The Arbitrator shall have no power or authority, under the Commercial Rules or otherwise, to (x) modify or disregard any provision of this Agreement, including the provisions of this Section 7.3(e), or (y) address or resolve any issue not submitted by the parties.

(v)             In connection with any arbitration proceeding pursuant to this Agreement, each party shall bear its own costs and expenses, except that the fees and costs of the AAA and the Arbitrator, the costs and expenses of obtaining the facility where the arbitration hearing is held, and such other costs and expenses as the Arbitrator may determine to be directly related to the conduct of the arbitration and appropriately borne jointly by the parties (which shall not include any party’s attorneys’ fees or costs, witness fees (if any), costs of investigation and similar expenses) shall be shared equally by the Indemnified Party and the Indemnifying Party.

(f)              Intentionally omitted.

(g)             Notwithstanding the other provisions of this Section 7.3, if a third party asserts (other than by means of a suit or proceeding) that an Indemnified Party is liable to such third party for a monetary or other obligation which may constitute or result in Damages, for which such Indemnified Party may be entitled to indemnification pursuant to this Article VII, and such Indemnified Party reasonably determines that it has a valid business reason to fulfill such obligation, then (i) such Indemnified Party shall be entitled to satisfy such obligation, with prior notice and consultation in good faith with the Indemnifying Party (provided, that such Indemnified Party shall not be required to obtain the consent of the Indemnifying Party in order to fulfill such obligation), (ii) such Indemnified Party may subsequently make a claim for indemnification in accordance with the provisions of this Article VII by delivery of a Claim Notice, and (iii) such Indemnified Party shall be reimbursed, in accordance with the provisions of this Article VII, for any such Damages, for which it is entitled to indemnification pursuant to this Article VII (subject to the right of the Indemnifying Party to dispute the Indemnified Party’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VII).

(h)             For purposes of this Section 7.3 and the second and third sentences of Section 7.4, (i) if the Stockholders constitute the Indemnifying Party, any references to the Indemnifying Party (except provisions relating to an obligation to make any payments) shall be deemed to refer to the Stockholders’ Representative, and (ii) if the Stockholders constitute the Indemnified Party, any references to the Indemnified Party (except provisions relating to an obligation to make or a right to receive any payments) shall be deemed to refer to the Stockholders’ Representative. The Stockholders’ Representative shall have full power and authority on behalf of each Stockholder to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Stockholders under this Article VII. The Stockholders’ Representative shall have no liability to either Stockholder for any action taken or omitted on behalf of the Stockholders pursuant to this Article VII.

7.4            Survival of Representations and Warranties . All representations and warranties that are covered by the indemnification agreements in Section 7.1(a) and Section 7.2(a) shall (a) survive the Closing and (b) shall expire on the eighteen (18) month anniversary of the Closing Date, except that (i) the representations and warranties set forth in Sections 2.1, 2.2, 3.1, 3.2, 3.3, 4.1 and 4.2 shall survive the Closing without limitation and (ii) the representations and warranties set forth in Sections 3.9 and 3.21 shall survive until 30 days following expiration of the statute of limitation applicable to the matters referred to within each such section. If an Indemnified Party delivers to an Indemnifying Party, before expiration of a representation or warranty, either a Claim Notice based upon a breach of such representation or warranty, or an Expected Claim Notice based upon a breach of such representation or warranty, then the applicable representation or warranty shall survive until, but only for purposes of, the resolution of any claims arising from or related to the matter covered by such notice. If the legal proceeding or written claim with respect to which an Expected Claim Notice has been given is definitively withdrawn or resolved in favor of the Indemnified Party, the Indemnified Party shall promptly so notify the Indemnifying Party. The rights to indemnification set forth in this Article VII shall not be affected by (i) any investigation conducted by or on behalf of an Indemnified Party or any knowledge acquired (or capable of being acquired) by an Indemnified Party, whether before or after the date of this Agreement or the Closing Date, with respect to the inaccuracy or noncompliance with any representation, warranty, covenant or obligation which is the subject of indemnification hereunder or (ii) any waiver by an Indemnified Party of any closing condition relating to the accuracy of any representations and warranties or the performance of or compliance with agreements and covenants.

7.5            Limitations .

(a)             Notwithstanding anything to the contrary herein, (i) the aggregate liability of the Stockholders for Damages under Section 7.1(a) shall not exceed fifteen percent (15%) of the Purchase Price (“Cap”); (ii) the Stockholders shall not be liable under Section 7.1(a) unless and until the aggregate Damages for which they would otherwise be liable thereunder exceed one percent (1%) of the Purchase Price (at which point the Stockholders shall become liable for the aggregate Damages under Section 7.1(a) in excess of 1% of the Purchase Price (“Floor”); provided , that the limitations set forth in this sentence shall not apply to (A) claims based on fraud and claims for equitable relief or (B) a claim pursuant to Section 7.1(a) relating to a breach of the representations and warranties set forth in Sections 2.1, 2.2, 3.1, 3.2, 3.3, 3.9, 3.16 or 3.21. For purposes solely of this Article VII, all representations and warranties of the Stockholders and Rotmans in Article II and Article III (other than Sections 3.7, 3.15(a)(x) and 3.31) shall be construed as if the term “material” and any reference to “Rotmans Material Adverse Effect” (and variations thereof) were omitted from such representations and warranties. Subject to the Cap and Floor provisions above, the aggregate liability of the Stockholders for Damages hereunder cannot exceed the Purchase Price

(b)             For purposes solely of this Article VII, all representations and warranties of Buyer in Article IV shall be construed as if the term “material” were omitted from such representations and warranties.

(c)             Buyer shall have a right to set off any Damages against any outstanding promissory note held by either Stockholder (“ Set-Off ”). The Set-Off is intended to secure the indemnification obligations of the Stockholders under this Agreement. However, the rights of Buyer under this Article VII shall not be limited to the Set-Off nor shall the Set-Off be the exclusive means for Buyer to enforce such rights.

(d)             Except with respect to claims based on fraud and claims for equitable relief, after the Closing, the rights of the Indemnified Parties under this Article VII, Article VIII shall be the exclusive remedy of the Indemnified Parties with respect to claims resulting from or relating to any misrepresentation, breach of warranty or failure to perform any covenant or agreement contained in this Agreement.

(e)             Neither Stockholder shall have any right of contribution against Rotmans with respect to any breach by Rotmans of any of its representations, warranties, covenants or agreements contained in this Agreement or any other agreement contemplated hereby.

7.6            Treatment of Indemnity Payments . Any payments made to an Indemnified Party pursuant to this Article VII or Article VIII shall be treated as an adjustment to the Purchase Price for tax purposes.

ARTICLE VIII

TAX MATTERS

8.1            Preparation and Filing of Tax Returns; Payment of Taxes .

(a)             Buyer shall prepare or cause to be prepared all Tax Returns or reports for Rotmans that must be filed after Closing for all periods of Rotmans ending on or before the Closing. Buyer shall permit the Stockholders’ Representative to review and comment on each such Tax Return described in the preceding sentence prior to filing. Except to the extent otherwise required by law, such Tax Returns will, unless requested otherwise by the Stockholders, be prepared in a manner that permits the Stockholders to obtain the benefit of installment sale tax reporting. Buyer shall file or cause to be filed each such Tax Return. The Stockholders shall pay to Buyer, and Buyer shall remit to the appropriate Governmental Entity, all Taxes, if any, imposed on Rotmans in respect of such Tax Return.

(b)             Buyer shall prepare or cause to be prepared and file all other Tax Returns of Rotmans required to be filed after the Closing Date, and shall pay all Taxes shown thereon or otherwise imposed on or payable by Rotmans after the Closing Date; provided , however, that the Stockholders shall promptly reimburse Buyer to the extent any payment Buyer is required to make relates to the operations of the business of Rotmans for any period ending (or deemed pursuant to Section 8.4(b) to end) on or before the Closing Date.

(c)             Any Tax Return to be prepared and filed for taxable periods beginning before the Closing Date and ending after the Closing Date shall be prepared on a basis consistent with the last previous similar Tax Return. Buyer shall provide the Stockholders’ Representative with a copy of each proposed Tax Return (and such additional information regarding such Tax Return as may reasonably be requested by the Stockholders’ Representative) at least 20 days prior to the filing of such Tax Return.

(d)             The Stockholders shall be responsible for the payment of any transfer, sales, use, stamp, conveyance, value added, recording, registration, documentary, filing and other non-income Taxes and administrative fees (including, without limitation, notary fees) arising in connection with the consummation of the transactions contemplated by this Agreement.

8.2            Tax Indemnification .

(a)             The Stockholders shall indemnify and hold harmless Buyer, Rotmans, and any successors thereto or Affiliates thereof in respect of and against (x) Damages resulting from, relating to, or constituting a breach of any representation contained in Section 3.9 hereof, (y) the failure to perform any covenant or agreement set forth in this Article VIII, and (z) without duplication, the following Taxes:

(i)               Any Taxes for any taxable period ending (or deemed pursuant to Section 8.4(b) to end) on or before the Closing Date due and payable by Rotmans ;

(ii)             Any Taxes for any taxable period ending (or deemed pursuant to Section 8.4(b) to end) on or before the Closing Date for which Rotmans has any liability as a transferee or successor, pursuant to any contractual obligation or otherwise;

(iii)            Any transfer, sales, use, stamp, conveyance, value added, recording, registration, documentary, filing and other non-income Taxes arising in connection with the consummation of the transactions contemplated by this Agreement whether levied on Buyer, Rotmans or any of their respective Affiliates; and

(b)             Buyer shall indemnify and hold harmless the Stockholders in respect of and against (x) the failure to perform any covenant or agreement set forth in this Article VIII, and (y) without duplication, any and all Taxes due and payable by Rotmans for any taxable period beginning (or deemed pursuant to Section 8.4(b) to begin) after the Closing Date.

8.3            Allocation of Certain Taxes .

(a)             Buyer and Rotmans agree that if Rotmans is permitted but not required under applicable foreign, state or local Tax laws to treat the Closing Date as the last day of a taxable period, Buyer and Rotmans shall treat such day as the last day of a taxable period.

(b)             Any Taxes for a taxable period beginning before and ending after the Closing Date shall be paid by Buyer or its Affiliates and the portion of any such Taxes allocable to the portion of such period ending on the Closing Date (and as to which Stockholders shall reimburse Buyer) shall be deemed to equal (i) in the case of Taxes that (x) are based upon or related to income or receipts or (y) imposed in connection with any sale or other transfer or assignment of property, other than Taxes described in Section 8.2(d), the amount which would be payable if the taxable year ended with the Closing Date, and (ii) in the case of other Taxes imposed on a periodic basis (including property Taxes), the amount of such Taxes for the entire period multiplied by a fraction the numerator of which is the number of calendar days in the period ending with the Closing Date and the denominator of which is the number of calendar days in the entire period. For purposes of the provisions of Section 8.2, each portion of such period shall be deemed to be a taxable period (whether or not it is in fact a taxable period). For purposes of computing the Taxes attributable to the two portions of a taxable period pursuant to this Section 8.4(b), the amount of any item that is taken into account only once for each taxable period (e.g., the benefit of graduated tax rates, exemption amounts, etc.) shall be allocated between the two portions of the period in proportion to the number of days in each portion.

8.4            Cooperation on Tax Matters; Tax Audits .

(a)             Buyer, the Stockholders, Rotmans, and their respective Affiliates shall cooperate in the preparation and filing of all Tax Returns for any Tax periods for which one Party could reasonably require the assistance of the other Party in obtaining any necessary information and in any audit, litigation or other proceeding with respect to Taxes. Such cooperation shall include, but not be limited to, furnishing prior years’ Tax Returns or return preparation packages illustrating previous reporting practices or containing historical information relevant to the preparation of such Tax Returns, and furnishing such other information within such Party’s possession requested by the Party filing such Tax Returns as is relevant to their preparation. Such cooperation and information also shall include promptly forwarding copies of appropriate notices and forms or other communications received from or sent to any Governmental Entity which relate to Rotmans, and providing copies of all relevant Tax Returns to the extent related to Rotmans, together with accompanying schedules and related work papers, documents relating to rulings or other determinations by any Governmental Entity and records concerning the ownership and Tax basis of property, which the requested Party may possess. Each of Buyer and the Stockholders agree to, and, in the case of Buyer that it agrees to cause Rotmans to, retain all books and records with respect to Tax matters pertinent to Rotmans relating to any taxable period beginning before the Closing Date until the expiration of the statute of limitations (and, to the extent notified by the other party, any extensions thereof) of the respective taxable periods, and to abide by all record retention agreements entered into with any Governmental Entity. Buyer, Rotmans, and their respective Affiliates shall make their respective employees and facilities available on a mutually convenient basis to explain any documents or information provided hereunder.

(b)             The Stockholders shall have the right, at their own expense, to control any Tax audit, initiate any claim for refund, contest, resolve and defend against any assessment, notice of deficiency, or other adjustment or proposed adjustment relating to any and all Taxes for any taxable period ending on or before the Closing Date. Buyer shall have the right, at its own expense, to control any other Tax audit, initiate any other claim for refund, and contest, resolve and defend against any other assessment, notice of deficiency, or other adjustment or proposed adjustment relating to Taxes with respect to the business of Rotmans; provided , that, with respect to (i) any Taxes for any taxable period beginning before the Closing Date and ending after the Closing Date and (ii) any item the adjustment of which may cause the Stockholders to become obligated to make any payment pursuant to Section 8.2(a) hereof, Buyer shall consult with Stockholders regarding the resolution of any issue that would affect such Stockholders, and not settle any such issue, or file any amended Tax Return relating to such issue, without the consent of the Stockholders, which consent shall not be unreasonably withheld. Where consent to a settlement is withheld by either Stockholder pursuant to this Section 8.6(b), such Stockholder may continue or initiate any further proceedings at his own expense, provided , that any liability of Buyer, after giving effect to this Agreement, shall not exceed the liability that would have resulted had such Stockholder not withheld his consent.

8.5            Termination of Tax Sharing Agreements . All Tax sharing agreements or similar arrangements with respect to or involving the business of Rotmans shall be terminated prior to the Closing Date and, after the Closing Date, Buyer, Rotmans and their Affiliates shall not be bound thereby or have any liability thereunder for amounts due in respect of periods ending on or before the Closing Date.

8.6            Scope of Article VIII . Any claim by any Party relating to a breach by another Party of its obligations under this Article VIII shall be pursued in accordance with the procedures for indemnification claims, and shall otherwise be subject to the terms and conditions, set forth in Article VII. Notwithstanding the foregoing or any other term or condition of Article VII, (i) claims for a breach of an obligation under this Article VIII may be made by a Party at any time prior to the 30th day after the expiration of the statute of limitations applicable to the Tax matter to which the claim relates, and (ii) to the extent there is any inconsistency between the terms of Article VII and this Article VIII with respect to the allocation of responsibility between Rotmans, the Stockholders and Buyer for Taxes relating to the business of Rotmans, the provisions of this Article VIII shall govern.

ARTICLE IX

DEFINITIONS

For purposes of this Agreement, each of the following terms shall have the meaning set forth below.

“ AAA ” shall mean the American Arbitration Association.

“ Affiliate ” shall mean any affiliate, as defined in Rule 12b-2 under the Securities Exchange Act of 1934.

“ Agreed Amount ” shall mean part, but not all, of the Claimed Amount.

“ Agreement ” shall have the meaning set forth in the first paragraph of this Agreement.

“ Allocation ” shall have the meaning set forth in Section 8.5(b).

“ Ancillary Agreements ” shall mean the Promissory Notes, the Convertible Promissory Notes, and any other agreement provided for herein.

“ Arbitrator ” shall have the meaning set forth in Section 7.3(e).

“ Buyer ” shall have the meaning set forth in the first paragraph of this Agreement.

“ Buyer Certificate ” shall mean a certificate to the effect that each of the conditions specified in clauses (a) through (c) of Section 5.2 is satisfied in all respects.

“ Buyer Disclosure Schedule ” shall mean the disclosure schedule provided by Buyer on the date hereof.

“ CERCLA ” shall mean the federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended.

“ Claim Notice ” shall mean written notification which contains (i) a description of the Damages, incurred or reasonably expected to be incurred by the Indemnified Party and the Claimed Amount of such Damages, to the extent then known, (ii) a statement that the Indemnified Party is entitled to indemnification under Article VII for such Damages, and a reasonable explanation of the basis therefor, and (iii) a demand for payment in the amount of such Damages.

“ Claimed Amount ” shall mean the amount of any Damages, incurred or reasonably expected to be incurred by the Indemnified Party.

“ Closing ” shall mean the closing of the transactions contemplated by this Agreement.

“ Closing Balance Sheet ” shall mean the consolidated balance sheet of Rotmans as of the Closing Date (without giving effect to the transactions contemplated by this Agreement).

“ Closing Date ” shall mean the date hereof.

“ Code ” shall mean the Internal Revenue Code of 1986, as amended.

“ Commercial Rules ” shall mean the Commercial Arbitration Rules of the AAA.

“ Common Stock ” shall have the meaning set forth in the Recitals to this Agreement.

“ Controlling Party ” shall mean the party controlling the defense of any Third Party Action.

“ Damages ” shall mean any and all debts, obligations and other liabilities (whether absolute, accrued, contingent, fixed or otherwise, or whether known or unknown, or due or to become due or otherwise), diminution in value, monetary damages, fines, fees, penalties, interest obligations, deficiencies, losses and actual expenses (including amounts paid in settlement, interest, court costs, costs of investigators, reasonable fees and expenses of attorneys, accountants, financial advisors and other experts, and other expenses of litigation, arbitration or other dispute resolution proceedings relating to a Third Party Action or an indemnification claim under Article VII or Article VIII), other than those costs and expenses of arbitration of a Dispute which are to be shared equally by the Indemnified Party and the Indemnifying Party as set forth in Section 7.3(e)(vi).

“ Disclosure Schedule ” shall mean the disclosure schedule provided by the Stockholders on the date hereof.

“ Dispute ” shall mean the dispute resulting if the Indemnifying Party in a Response disputes its liability for all or part of the Claimed Amount.

“ Documentation ” shall mean printed, visual or electronic materials, reports, white papers, documentation, specifications, designs, flow charts, code listings, instructions, user manuals, frequently asked questions, release notes, recall notices, error logs, diagnostic reports, marketing materials, packaging, labeling, service manuals and other information describing the use, operation, installation, configuration, features, functionality, pricing, marketing or correction of a product, whether or not provided to end user.

“ Employee Benefit Plan ” shall mean any “employee pension benefit plan” (as defined in Section 3(2) of ERISA), any “employee welfare benefit plan” (as defined in Section 3(1) of ERISA), and any other written or oral plan, agreement or arrangement involving direct or indirect compensation, including insurance coverage, severance benefits, disability benefits, deferred compensation, bonuses, stock options, stock purchase, phantom stock, stock appreciation or other forms of incentive compensation or post-retirement compensation.

“ Environmental Law ” shall mean any federal, state, local or foreign law, statute, rule, order, directive, judgment, Permit or regulation or the common law relating to the environment, occupational health and safety, or exposure of persons or property to Materials of Environmental Concern, including any statute, regulation, administrative decision or order pertaining to: (i) the presence of or the treatment, storage, disposal, generation, transportation, handling, distribution, manufacture, processing, use, import, export, labeling, recycling, registration, investigation or remediation of Materials of Environmental Concern or documentation related to the foregoing; (ii) air, water and noise pollution; (iii) groundwater and soil contamination; (iv) the release, threatened release, or accidental release into the environment, the workplace or other areas of Materials of Environmental Concern, including emissions, discharges, injections, spills, escapes or dumping of Materials of Environmental Concern; (v) transfer of interests in or control of real property which may be contaminated; (vi) community or worker right-to-know disclosures with respect to Materials of Environmental Concern; (vii) the protection of wild life, marine life and wetlands, and endangered and threatened species; (viii) storage tanks, vessels, containers, abandoned or discarded barrels and other closed receptacles; and (ix) health and safety of employees and other persons. As used above, the term “release” shall have the meaning set forth in CERCLA.

“ ERISA ” shall mean the Employee Retirement Income Security Act of 1974, as amended.

“ ERISA Affiliate ” shall mean any entity which is, or at any applicable time was, a member of (1) a controlled group of corporations (as defined in Section 414(b) of the Code), (2) a group of trades or businesses under common control (as defined in Section 414(c) of the Code), or (3) an affiliated service group (as defined under Section 414(m) of the Code or the regulations under Section 414(o) of the Code), any of which includes or included Rotmans.

“ Expected Claim Notice ” shall mean a notice that, as a result of a Legal Proceeding instituted by or written claim made by a third party, an Indemnified Party reasonably expects to incur Damages, for which it is entitled to indemnification under Article VII.

“ Financial Statements ” shall mean:

(a)             the unaudited consolidated balance sheets and statements of income, changes in stockholders’ equity and cash flows of Rotmans as of the end of and for each of its last three fiscal years, and

(b)             the Most Recent Balance Sheet and the unaudited consolidated statements of income, changes in stockholders’ equity and cash flows of Rotmans for the nine months ended as of the Most Recent Balance Sheet Date.

“ GAAP ” shall mean United States generally accepted accounting principles.

“ Governmental Entity ” shall mean any court, arbitrational tribunal, administrative agency or commission or other governmental or regulatory authority or agency.

“ Indemnified Party ” shall mean a party entitled, or seeking to assert rights, to indemnification under Article VII of this Agreement.

“ Indemnifying Party ” shall mean the party from whom indemnification is sought by the Indemnified Party.

“ Intellectual Property ” shall mean the following subsisting throughout the world:

(a)       Patent Rights;

(b)       Trademarks and all goodwill in the Trademarks;

(c)       copyrights, designs, data and database rights and registrations and applications for registration thereof, including moral rights of authors;

(d)       mask works and registrations and applications for registration thereof and any other rights in semiconductor topologies under the laws of any jurisdiction;

(e)       inventions, invention disclosures, statutory invention registrations, trade secrets and confidential business information, know-how, manufacturing and product processes and techniques, research and development information, financial, marketing and business data, pricing and cost information, business and marketing plans and customer and supplier lists and information, whether patentable or non-patentable, whether copyrightable or non-copyrightable and whether or not reduced to practice; and

(f)       other proprietary rights relating to any of the foregoing (including remedies against infringement thereof and rights of protection of interest therein under the laws of all jurisdictions).

“ Intellectual Property Registrations ” means Patent Rights, registered Trademarks, registered copyrights and designs, mask work registrations and applications for each of the foregoing.

“ Lease ” shall mean any lease or sublease pursuant to which Rotmans leases or subleases from another party any Real Property.

“ Legal Proceeding ” shall mean any action, suit, proceeding, claim, arbitration or investigation before any Governmental Entity or before any arbitrator.

“ Materials of Environmental Concern ” shall mean any: pollutants, contaminants or hazardous substances (as such terms are defined under CERCLA), pesticides (as such term is defined under the Federal Insecticide, Fungicide and Rodenticide Act), solid wastes and hazardous wastes (as such terms are defined under the Resource Conservation and Recovery Act), chemicals, other hazardous, radioactive or toxic materials, oil, petroleum and petroleum products (and fractions thereof) or any other material (or article containing such material) listed or subject to regulation under any law, statute, rule, regulation, order, Permit or directive due to its potential, directly or indirectly, to harm the environment or the health of humans or other living beings.

“ Most Recent Balance Sheet ” shall mean the unaudited consolidated balance sheet of Rotmans as of the Most Recent Balance Sheet Date.

“ Most Recent Balance Sheet Date ” shall mean March 31, 2019.

“ Non-controlling Party ” shall mean the party not controlling the defense of any Third Party Action.

“ Ordinary Course of Business ” shall mean the ordinary course of business of Rotmans consistent with past custom and practice (including with respect to frequency and amount).

“ Parties ” shall mean Buyer, Rotmans, and each of the Stockholders.

“ Patent Rights ” shall mean all patents, patent applications, utility models, design registrations and certificates of invention and other governmental grants for the protection of inventions or industrial designs (including all related continuations, continuations-in-part, divisionals, reissues and reexaminations).

“ Permits ” shall mean all permits, licenses, registrations, certificates, orders, approvals, franchises, variances and similar rights issued by or obtained from any Governmental Entity (including those issued or required under Environmental Laws and those relating to the occupancy or use of leased real property).

“ Personal Property ” shall have the meaning set forth in Section 3.10.

“ Purchase Price ” shall have the meaning set forth in Section 1.2.

“ Response ” shall mean a written response containing the information provided for in Section 7.3(c).

“ Restricted Employee ” shall mean any person who either (i) was an employee of Buyer or any of its subsidiaries on the Closing Date or (ii) was an employee of Rotmans on the Closing Date.

“ Rotmans ” shall have the meaning set forth in the first paragraph of this Agreement.

“ Rotmans Intellectual Property ” shall mean Rotmans Owned Intellectual Property and Rotmans Licensed Intellectual Property.

“ Rotmans Licensed Intellectual Property ” shall mean all Intellectual Property that is licensed to Rotmans by any third party.

“ Rotmans Material Adverse Effect ” shall mean any material adverse change, event, circumstance or development with respect to, or material adverse effect on, (i) the business, assets, liabilities, capitalization, condition (financial or other), or results of operations of Rotmans and the Subsidiaries, taken as a whole, or (ii) the ability of Buyer to operate the business of Rotmans and each of the Subsidiaries immediately after the Closing, other than as a result of (i) changes in laws, (ii) changes in accounting principles or (iii) acts of war or terrorism. For the avoidance of doubt, the parties agree that the terms “material”, “materially” or “materiality” as used in this Agreement with an initial lower case “m” shall have their respective customary and ordinary meanings, without regard to the meaning ascribed to Rotmans Material Adverse Effect.

“ Rotmans Owned Intellectual Property ” shall mean all Intellectual Property owned or purported to be owned by Rotmans, in whole or in part.

“ Rotmans Plan ” shall mean any Employee Benefit Plan maintained, or contributed to, by Rotmans or any ERISA Affiliate.

“ Rotmans Registrations ” shall mean Intellectual Property Registrations that are registered or filed in the name of Rotmans, alone or jointly with others.

“ Securities Act ” shall mean the Securities Act of 1933, as amended.

“ Security Interest ” shall mean any mortgage, pledge, security interest, encumbrance, charge or other lien (whether arising by contract or by operation of law), other than (i) mechanic’s, materialmen’s, and similar liens, (ii) liens arising under worker’s compensation, unemployment insurance, social security, retirement and similar legislation and (iii) liens on goods in transit incurred pursuant to documentary letters of credit, in each case arising in the Ordinary Course of Business of Rotmans and not material to Rotmans.

“ Stockholder Certificate ” shall mean a certificate to the effect that each of the conditions specified in clauses (a) through (e) of Section 5.1 is satisfied in all respects.

“ Set-Off ” shall have the meaning set forth in Section 1.8(g).

“ Shares ” shall have the meaning set forth in the Recitals to this Agreement.

“ Software ” shall mean computer software code, applications, utilities, development tools, diagnostics, databases and embedded systems, whether in source code, interpreted code or object code form.

“ Stockholder or Stockholders ” shall have the meaning set forth in the first paragraph of this Agreement.

“ Stockholders’ Representative ” shall have the meaning set forth in Section 1.4(a).

“ Subsidiary ” shall mean any corporation, partnership, trust, limited liability company or other non-corporate business enterprise in which Rotmans (or another subsidiary) holds stock or other ownership interests representing (a) more than 50% of the voting power of all outstanding stock or ownership interests of such entity or (b) the right to receive more than 50% of the net assets of such entity available for distribution to the holders of outstanding stock or ownership interests upon a liquidation or dissolution of such entity.

“ Tax Purchase Price ” shall have the meaning set forth in Section 8.5(b).

“ Tax Returns ” shall mean any and all reports, returns, declarations, or statements relating to Taxes supplied to a taxing authority, including any schedule or attachment thereto and any related or supporting work papers or information with respect to any of the foregoing, including any amendment thereof.

“ Taxes ” shall mean any and all taxes, charges, fees, duties, contributions, levies or other similar assessments or liabilities in the nature of a tax, including, without limitation, income, gross receipts, corporation, ad valorem, premium, value-added, net worth, capital stock, capital gains, documentary, recapture, alternative or add-on minimum, disability, estimated, registration, recording, excise, real property, personal property, sales, use, license, lease, service, service use, transfer, withholding, employment, unemployment, insurance, social security, national insurance, business license, business organization, environmental, workers compensation, payroll, profits, severance, stamp, occupation, windfall profits, customs duties, franchise and other taxes of any kind whatsoever imposed by the United States of America or any state, local or foreign government, or any agency or political subdivision thereof, and any interest, fines, penalties, assessments or additions to tax imposed with respect to such items or any contest or dispute thereof.

“ Third Party Action ” shall mean any suit or proceeding by a person or entity other than a Party for which indemnification may be sought by Buyer or the Stockholders under Article VII.

“ Trademarks ” shall mean all registered trademarks and service marks, logos, Internet domain names, corporate names and doing business designations and all registrations and applications for registration of the foregoing, common law trademarks and service marks and trade dress.

“ WARN Act ” shall have the meaning set forth in Section 3.20(g).

ARTICLE X

MISCELLANEOUS

10.1             Press Releases and Announcements . No Party shall issue any press release or public announcement relating to the subject matter of this Agreement without the prior written approval of the other Parties; provided , however, that any Party may make any public disclosure it believes in good faith is required by applicable law, regulation or stock market rule (in which case the disclosing Party shall use reasonable efforts to advise the other Parties and provide it with a copy of the proposed disclosure prior to making the disclosure).

10.2             No Third-Party Beneficiaries . This Agreement shall not confer any rights or remedies upon any person other than the Parties and their respective successors and permitted assigns.

10.3             Entire Agreement . This Agreement (including the Ancillary Agreements and the other documents referred to herein) constitutes the entire agreement among the Parties and supersedes any prior understandings, agreements or representations by or among the Parties, written or oral, with respect to the subject matter hereof.

10.4             Succession and Assignment . This Agreement shall be binding upon and inure to the benefit of the Parties named herein and their respective successors and permitted assigns. No Party may assign any of its rights or delegate any of its performance obligations hereunder without the prior written approval of the other Parties. Any purported assignment of rights or delegation of performance obligations in violation of this Section 10.4 is void.

10.5             Counterparts and Facsimile Signature; Headings . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. This Agreement may be executed by facsimile transmission or as a “pdf” or similar attachment to an electronic submission.

10.6             Headings . The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

10.7             Notices . All notices, requests, demands, claims and other communications hereunder shall be in writing. Any notice, request, demand, claim or other communication hereunder shall be deemed duly delivered four business days after it is sent by registered or certified mail, return receipt requested, postage prepaid, or one business day after it is sent for next business day delivery via a reputable nationwide overnight courier service, in each case to the intended recipient as set forth below:

Any Party may give any notice, request, demand, claim or other communication hereunder using any other means (including personal delivery, expedited courier, messenger service, telecopy, ordinary mail or electronic mail), but no such notice, request, demand, claim or other communication shall be deemed to have been duly given unless and until it actually is received by the Party for whom it is intended. Any Party may change the address to which notices, requests, demands, claims and other communications hereunder are to be delivered by giving the other Parties notice in the manner herein set forth.

10.8             Governing Law . All matters arising out of or relating to this Agreement and the transactions contemplated hereby (including without limitation its interpretation, construction, performance and enforcement) shall be governed by and construed in accordance with the internal laws of the Commonwealth of Massachusetts, without giving effect to any choice or conflict of law provision or rule (whether of the Commonwealth of Massachusetts or any other jurisdiction) that would cause the application of laws of any jurisdictions other than those of the Commonwealth of Massachusetts.

10.9             Amendments and Waivers . No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by each of the Parties. No waiver by any Party of any right or remedy hereunder shall be valid unless the same shall be in writing and signed by the Party giving such waiver. No waiver by any Party with respect to any default, misrepresentation, or breach of warranty or covenant hereunder shall be deemed to extend to any prior or subsequent default, misrepresentation or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.

10.10          Severability . Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. If the final judgment of a court of competent jurisdiction declares that any term or provision hereof is invalid or unenforceable, the Parties agree that the court making the determination of invalidity or unenforceability shall have the power to limit the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified.

10.11          Expenses . Except as set forth in Section 1.8, Article VII and Article VIII, each Party shall bear its own costs and expenses (including legal fees and expenses) incurred in connection with this Agreement and the transactions contemplated hereby. For the avoidance of doubt, the Stockholders shall pay any fees or commissions to any broker, finder or agent or any legal counsel with respect to the transactions contemplated by this Agreement.

10.12          Submission to Jurisdiction . Each Party (a) submits to the jurisdiction of any state or federal court sitting in Boston, Massachusetts in any action or proceeding arising out of or relating to this Agreement or the Ancillary Agreements (including any action or proceeding for the enforcement of any arbitral award made in connection with any arbitration of a Dispute hereunder), (b) agrees that all claims in respect of such action or proceeding may be heard and determined in any such court, (c) waives any claim of inconvenient forum or other challenge to venue in such court, (d) agrees not to bring any action or proceeding arising out of or relating to this Agreement or the Ancillary Agreements in any other court; provided , in each case that, solely with respect to any arbitration of a Dispute, the Arbitrator shall resolve all threshold issues relating to the validity and applicability of the arbitration provisions of this Agreement, contract validity, applicability of statutes of limitations and issue preclusion, and such threshold issues shall not be heard or determined by such court. Each Party agrees to accept service of any summons, complaint or other initial pleading made in the manner provided for the giving of notices in Section 10.7, provided , that nothing in this Section 10.12 shall affect the right of any Party to serve such summons, complaint or other initial pleading in any other manner permitted by law.

10.13          Specific Performance . Each Party acknowledges and agrees that the other Parties would be damaged irreparably in the event any of the provisions of this Agreement (including Sections 6.1, 6.2 and 6.3) are not performed in accordance with their specific terms or otherwise are breached. Accordingly, each Party agrees that the other Parties shall be entitled to an injunction or other equitable relief to prevent breaches of the provisions of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof in any action instituted in any court of the United States or any state thereof having jurisdiction over the Parties and the matter, in addition to any other remedy to which it may be entitled, at law or in equity. Notwithstanding the foregoing, the Parties agree that if a Dispute is submitted to arbitration in accordance with Section 7.3(d) and Section 7.3(e), then the foregoing provisions of this Section 10.13 shall not apply to such Dispute, and the provisions of Section 7.3(d) and Section 7.3(e) shall govern availability of injunctive relief, specific performance or other equitable relief with respect to such Dispute.

10.14          Construction . The language used in this Agreement shall be deemed to be the language chosen by the Parties to express their mutual intent, and no rule of strict construction shall be applied against any Party. Any reference to any federal, state, local or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. Any reference herein to “including” shall be interpreted as “including without limitation”. Any reference to any Article, Section or paragraph shall be deemed to refer to an Article, Section or paragraph of this Agreement, unless the context clearly indicates otherwise.

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

	BUYER:
	VYSTAR CORPORATION
	By:
		Name:	Steven Rotman
		Title:	President

	STOCKHOLDERS:
	Steven Rotman
	Bernard Rotman

Exhibit 1.2(a)

Form of Promissory Note

[ Signature Page to Stock Purchase Agreement ]

Exhibit 1.2(b)

Form of Convertible Promissory Note

[ Signature Page to Stock Purchase Agreement ]

PROMISSORY NOTE

FOR VALUE RECEIVED, the undersigned, VYSTAR CORPORATION (“ Borrower ”), promises to pay to STEVEN ROTMAN, or his heirs, successors or assigns, as the case may be (in each case, a “ Holder ”), the principal sum of Three Hundred Sixty-Seven Thousand Five Hundred and 00/100 Dollars ($367,500.00), together with interest from the date hereof on the unpaid balance of such principal amount from time to time outstanding, at the rate of Five Percent (5%) per annum, until paid in full.

1.             Principal and Interest .

(a)            Subject to the terms and conditions of this Promissory Note (the “Note”), the principal and interest on this Note shall be due and payable as follows:

(i)            Beginning on the sixth month anniversary from the date hereof, principal and accrued interest shall be payable on a monthly basis in equal principal installments of $3,828.13 per month over a period of Ninety-Six (96) months, plus accrued interest. The entire unpaid balance shall be immediately due and payable in full on July ___, 2027 (the “ Maturity Date ”).

(ii)           Except as set forth in subsection (i) above, interest on this Note that accrues until the Maturity Date shall be due and payable on the Maturity Date. If the entire unpaid balance under this Note is not paid in full pursuant to Section 2 hereof on or prior to the Maturity Date, then after the Maturity Date, the unpaid balance of the principal under this Note and any accrued interest thereon shall bear interest at the rate that is three percentage points over the interest rate, such interest being payable semiannually, in arrears. All computations of interest payable hereunder shall be on the basis of a 365-day year and actual days elapsed in the period of which such interest is payable. If any interest rate under this Note exceeds the maximum rate permitted by law, such rate shall be reduced to the maximum rate of interest permitted by law.

(b)           The principal under this Note and any interest accrued thereon may be prepaid by the Borrower at any time prior to the Maturity Date, without any fees or penalties to the Borrower for prepayment, at any time.

2.             Default . In the case of one or more of the following events (each, a “Default”) (i) the Borrower fails to pay when due any payment of principal or interest hereof; or (ii) the Borrower applies for a trustee, receiver or other custodian for it or a substantial part of its property; a trustee, receiver or other custodian is appointed for the Borrower or for a substantial part of its property; or any bankruptcy, reorganization, debt arrangement, or other case of proceeding, is commenced in respect of the Borrower which, in the case of any involuntary case or proceeding, is not dismissed within 60 days; or (iii) the Borrower materially breaches any of the covenants or agreements contained in this Note (other than that covered by clause (i) above) and such breach remains uncured for a period of ninety (90) days after receipt from the Holder of written notice thereof; then, notwithstanding the foregoing provisions of this Note, upon the occurrence of any Default described in clauses (i), (ii) or (iii) above, the Holder may, without written notice, declare the unpaid principal and interest on this Note and all other obligations of the Borrower to the Holder at once due and payable. Failure to exercise this option shall not constitute a waiver of the right to exercise the same at any other time.

3.             Waiver of Certain Rights . Subject to any applicable notice periods, all parties to this Note, including maker and any sureties, endorsers, or guarantors, hereby waive protest, presentment, notice of dishonor, and notice of acceleration of maturity and agree to continue to remain bound for the payment of principal, interest and all other sums due under this Note notwithstanding any change or changes by way of release, surrender, exchange, modification or substitution of any security for this Note or by way of any extension or extensions of time for the payment of principal and interest; and all such parties waive all and every kind of notice of such change or changes and agree that the same may be without notice or consent of any of them.

4.             Enforcement. Upon Default the Holder may employ an attorney to enforce the Holder’s rights and remedies and the maker, principal, surety, guarantor and endorsers of this Note hereby agree to pay to the Holder reasonable attorneys’ fees, plus all other reasonable expenses incurred by the Holder in exercising any of the Holder’s rights and remedies upon Default. The rights and remedies of the Holder as provided in this Note shall be cumulative and may be pursued singly, successively, or together against any other funds, property or security held by the Holder for payment or security, in the sole discretion of the Holder. The failure to exercise any such right or remedy shall not be a waiver or release of such rights or remedies or the right to exercise any of them at another time.

5.             Miscellaneous . The following general provisions apply:

(a)            This Note, and the obligations and rights of the Borrower hereunder, shall be binding upon and inure to the benefit of the Borrower, the Holder, and their respective heirs, personal representatives, successors and assigns, except that the Borrower may not assign or transfer any of its rights or obligations under this Note without the prior written consent of the Holder. The transfer of this Note by the Holder is subject to restrictions under federal and state securities laws.

(b)           Changes in or amendments or additions to this Note may be made, or compliance with any term, covenant, agreement, condition or provision set forth herein may be omitted or waived (either generally or in a particular instance and either retroactively or prospectively), upon written consent of the Borrower and the Holder.

(c)           All payments shall be made in such coin and currency of the United States of America as at the time of payment shall be legal tender therein for the payment of public and private debts.

(d)           All notices, requests, consents and demands shall be made in writing and shall be mailed postage prepaid, or delivered by reliable overnight courier service, or delivered by hand, to the Borrower or to the Holder at their respective addresses set forth below or to such other address as may be furnished in writing to the other party hereto and shall be effective upon receipt: If to the Borrower, at its principal office address. If to the Holder, at the address for such Holder as set forth on the written records of the Borrower.

(e)           This Note will be governed by and interpreted and construed in accordance with the internal laws of the Commonwealth of Massachusetts (without reference to principles of conflicts or choice of law that would result in the application of laws of another jurisdiction). The Borrower and the Holder, by its acceptance hereof, hereby irrevocably submit to the exclusive jurisdiction of any state or federal court sitting in the Commonwealth of Massachusetts over any action or proceeding arising out of or relating to this Note, and hereby irrevocably agree that all claims in respect to such action or proceeding may be heard and determined in such state or federal court. The Borrower and the Holder each agree that a final judgment in any action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

IN WITNESS WHEREOF, the Borrower has caused this instrument to be executed in its corporate name by its duly authorized officer as of the day and year first above written.

PROMISSORY NOTE

FOR VALUE RECEIVED, the undersigned, VYSTAR CORPORATION (" Borrower "), promises to pay to BERNARD ROTMAN, or his heirs, successors or assigns, as the case may be (in each case, a " Holder "), the principal sum of One Hundred Forty Thousand and 00/100 Dollars ($140,000.00), together with interest from the date hereof on the unpaid balance of such principal amount from time to time outstanding, at the rate of Five Percent (5%) per annum, until paid in full.

1.               Principal and Interest .

(a)             Subject to the terms and conditions of this Promissory Note (the “Note”), the principal and interest on this Note shall be due and payable as follows:

(i)                Beginning on the sixth month anniversary from the date hereof, principal and accrued interest shall be payable on a monthly basis in equal principal installments of $2,916.67 per month over a period of forty-eight (48) months, plus accrued interest. The entire unpaid balance shall be immediately due and payable in full on July ___, 2023 (the " Maturity Date ").

(ii)               Except as set forth in subsection (i) above, interest on this Note that accrues until the Maturity Date shall be due and payable on the Maturity Date. If the entire unpaid balance under this Note is not paid in full pursuant to Section 2 hereof on or prior to the Maturity Date, then after the Maturity Date, the unpaid balance of the principal under this Note and any accrued interest thereon shall bear interest at the rate that is three percentage points over the interest rate, such interest being payable semiannually, in arrears. All computations of interest payable hereunder shall be on the basis of a 365-day year and actual days elapsed in the period of which such interest is payable. If any interest rate under this Note exceeds the maximum rate permitted by law, such rate shall be reduced to the maximum rate of interest permitted by law.

(b)            The principal under this Note and any interest accrued thereon may be prepaid by the Borrower at any time prior to the Maturity Date, without any fees or penalties to the Borrower for prepayment, at any time.

2.               Default . In the case of one or more of the following events (each, a "Default") (i) the Borrower fails to pay when due any payment of principal or interest hereof; or (ii) the Borrower applies for a trustee, receiver or other custodian for it or a substantial part of its property; a trustee, receiver or other custodian is appointed for the Borrower or for a substantial part of its property; or any bankruptcy, reorganization, debt arrangement, or other case of proceeding, is commenced in respect of the Borrower which, in the case of any involuntary case or proceeding, is not dismissed within 60 days; or (iii) the Borrower materially breaches any of the covenants or agreements contained in this Note (other than that covered by clause (i) above) and such breach remains uncured for a period of ninety (90) days after receipt from the Holder of written notice thereof; then, notwithstanding the foregoing provisions of this Note, upon the occurrence of any Default described in clauses (i), (ii) or (iii) above, the Holder may, without written notice, declare the unpaid principal and interest on this Note and all other obligations of the Borrower to the Holder at once due and payable. Failure to exercise this option shall not constitute a waiver of the right to exercise the same at any other time.

3.               Waiver of Certain Rights . Subject to any applicable notice periods, all parties to this Note, including maker and any sureties, endorsers, or guarantors, hereby waive protest, presentment, notice of dishonor, and notice of acceleration of maturity and agree to continue to remain bound for the payment of principal, interest and all other sums due under this Note notwithstanding any change or changes by way of release, surrender, exchange, modification or substitution of any security for this Note or by way of any extension or extensions of time for the payment of principal and interest; and all such parties waive all and every kind of notice of such change or changes and agree that the same may be without notice or consent of any of them.

4.               Enforcement. Upon Default the Holder may employ an attorney to enforce the Holder's rights and remedies and the maker, principal, surety, guarantor and endorsers of this Note hereby agree to pay to the Holder reasonable attorneys' fees, plus all other reasonable expenses incurred by the Holder in exercising any of the Holder's rights and remedies upon Default. The rights and remedies of the Holder as provided in this Note shall be cumulative and may be pursued singly, successively, or together against any other funds, property or security held by the Holder for payment or security, in the sole discretion of the Holder. The failure to exercise any such right or remedy shall not be a waiver or release of such rights or remedies or the right to exercise any of them at another time.

5.               Miscellaneous . The following general provisions apply:

(a)             This Note, and the obligations and rights of the Borrower hereunder, shall be binding upon and inure to the benefit of the Borrower, the Holder, and their respective heirs, personal representatives, successors and assigns, except that the Borrower may not assign or transfer any of its rights or obligations under this Note without the prior written consent of the Holder. The transfer of this Note by the Holder is subject to restrictions under federal and state securities laws.

(b)             Changes in or amendments or additions to this Note may be made, or compliance with any term, covenant, agreement, condition or provision set forth herein may be omitted or waived (either generally or in a particular instance and either retroactively or prospectively), upon written consent of the Borrower and the Holder.

(c)             All payments shall be made in such coin and currency of the United States of America as at the time of payment shall be legal tender therein for the payment of public and private debts.

(d)             All notices, requests, consents and demands shall be made in writing and shall be mailed postage prepaid, or delivered by reliable overnight courier service, or delivered by hand, to the Borrower or to the Holder at their respective addresses set forth below or to such other address as may be furnished in writing to the other party hereto and shall be effective upon receipt: If to the Borrower, at its principal office address. If to the Holder, at the address for such Holder as set forth on the written records of the Borrower.

(e)             This Note will be governed by and interpreted and construed in accordance with the internal laws of the Commonwealth of Massachusetts (without reference to principles of conflicts or choice of law that would result in the application of laws of another jurisdiction). The Borrower and the Holder, by its acceptance hereof, hereby irrevocably submit to the exclusive jurisdiction of any state or federal court sitting in the Commonwealth of Massachusetts over any action or proceeding arising out of or relating to this Note, and hereby irrevocably agree that all claims in respect to such action or proceeding may be heard and determined in such state or federal court. The Borrower and the Holder each agree that a final judgment in any action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

IN WITNESS WHEREOF, the Borrower has caused this instrument to be executed in its corporate name by its duly authorized officer as of the day and year first above written.

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE LAW OR AN OPINION OF COUNSEL ACCEPTABLE TO THE BORROWER THAT SUCH REGISTRATION IS NOT REQUIRED UNDER SUCH LAWS.

CONVERTIBLE PROMISSORY NOTE

FOR VALUE RECEIVED, the undersigned, VYSTAR CORPORATION (“Borrower”), promises to pay to STEVEN ROTMAN, or his heirs, successors or assigns, as the case may be (in each case, a “Holder”), the principal sum of ONE MILLION ONE HUNDRED TWO THOUSAND FIVE HUNDRED and 00/100 DOLLARS ($1,102,500) together with interest from the date hereof on the unpaid balance of such principal amount from time to time outstanding, at the rate of Five Percent (5%) per annum, until paid in full. Holder acknowledges that Borrower shall issue one or more Promissory Notes to certain interested creditors (the “Notes”).

1.              Principal and Interest .

(a)             Subject to the terms and conditions of this Note, the principal and interest on this Note shall be due and payable as follows:

(i)            The entire unpaid balance shall be immediately due and payable in full eight (8) years from the date hereof (the “Maturity Date”).

(ii)           Except as set forth in subsection (i) above, interest on this Note that accrues until the Maturity Date shall be due and payable on the Maturity Date. If the entire unpaid balance under this Note is not paid in full pursuant to Section 2 hereof on or prior to the Maturity Date, then after the Maturity Date, the unpaid balance of the principal under this Note and any accrued interest thereon shall bear interest at the rate that is three percentage points over the interest rate, such interest being payable semiannually, in arrears. All computations of interest payable hereunder shall be on the basis of a 365-day year and actual days elapsed in the period of which such interest is payable. If any interest rate under this Note exceeds the maximum rate permitted by law, such rate shall be reduced to the maximum rate of interest permitted by law.

(b)             The principal under this Note and any interest accrued thereon may be prepaid by the Borrower at any time prior to the Maturity Date, without any fees or penalties to the Borrower for prepayment.

2.              Repayment prior to Maturity . At Holder’s request, Borrower shall repay the principal amount under this Note (or any portion thereof so requested) and the accrued interest thereon with common stock of the Borrower at any time at the written request of Holder, which notice may be given prior to the Maturity Date solely upon the pricing and events as follows unless otherwise waived by Borrower: Each such share of common stock shall have a deemed value equal to (a) the twenty (20) day average closing price for the twenty (20) trading days beginning on the sixth (6th) trading day following the date that such common stock begins trading with a new trading symbol following the effective date of a reverse stock split made by Borrower of its common stock, and (b) divided by two (2). For the sake of clarity, the following is an example of the formula describe above:

In the event that the reverse stock split contemplated by VYST is not approved by FINRA, the parties agree that the twenty (20) trading day calculation described above shall begin on the first trading day following notification of such disapproval by FINRA.

3.              Stock Restrictions . Notwithstanding anything to the contrary herein, Holder acknowledges and agrees that the shares of common stock transferred to it pursuant to this agreement will be subject to restrictions on resale under applicable rules and regulations of the Securities and Exchange Commission.

4.              Default . In the case of one or more of the following events (each, a “Default”) (i) the Borrower fails to pay when due any payment of principal or interest hereof; or (ii) the Borrower applies for a trustee, receiver or other custodian for it or a substantial part of its property; a trustee, receiver or other custodian is appointed for the Borrower or for a substantial part of its property; or any bankruptcy, reorganization, debt arrangement, or other case of proceeding, is commenced in respect of the Borrower which, in the case of any involuntary case or proceeding, is not dismissed within 60 days; or (iii) the Borrower materially breaches any of the covenants or agreements contained in this Note (other than that covered by clause (i) above) and such breach remains uncured for a period of ninety (90) days after receipt from the Holder of written notice thereof; then, notwithstanding the foregoing provisions of this Note, upon the occurrence of any Default described in clauses (i) and (ii) above, the Holder may, without written notice, declare the unpaid principal and interest on this Note and all other obligations of the Borrower to the Holder at once due and payable, and upon the occurrence of any Default described in clause (iii) above, the Holders of at least a majority of the outstanding principal amount under the Notes, may upon written notice to the Borrower, upon written notice to the Borrower and each of the Holders, as the case may be, declare the unpaid principal and interest on this Note and all other obligations of the Borrower to the Holders at once due and payable, whereupon in each foregoing case such principal, interest and other obligations shall become at once due and payable. Failure to exercise this option shall not constitute a waiver of the right to exercise the same at any other time.

5.              Waiver of Certain Rights . Subject to any applicable notice periods, all parties to this Note, including maker and any sureties, endorsers, or guarantors, hereby waive protest, presentment, notice of dishonor, and notice of acceleration of maturity and agree to continue to remain bound for the payment of principal, interest and all other sums due under this Note notwithstanding any change or changes by way of release, surrender, exchange, modification or substitution of any security for this Note or by way of any extension or extensions of time for the payment of principal and interest; and all such parties waive all and every kind of notice of such change or changes and agree that the same may be without notice or consent of any of them.

6.              Enforcement . Upon Default the Holder may employ an attorney to enforce the Holder’s rights and remedies and the maker, principal, surety, guarantor and endorsers of this Note hereby agree to pay to the Holder reasonable attorneys’ fees, plus all other reasonable expenses incurred by the Holder in exercising any of the Holder’s rights and remedies upon Default. The rights and remedies of the Holder as provided in this Note shall be cumulative and may be pursued singly, successively, or together against any other funds, property or security held by the Holder for payment or security, in the sole discretion of the Holder. The failure to exercise any such right or remedy shall not be a waiver or release of such rights or remedies or the right to exercise any of them at another time.

7.              No Shareholder Rights . Nothing contained in this Note shall be construed as conferring upon the Holder or any other person the right to vote or to consent or to receive notice as a shareholder of the Borrower.

8.              Miscellaneous . The following general provisions apply:

(a)             This Note, and the obligations and rights of the Borrower hereunder, shall be binding upon and inure to the benefit of the Borrower, the Holder, and their respective heirs, personal representatives, successors and assigns, except that the Borrower may not assign or transfer any of its rights or obligations under this Note without the prior written consent of the Holder. The transfer of this Note by the Holder is subject to restrictions under federal and state securities laws.

(b)             Changes in or amendments or additions to this Note may be made, or compliance with any term, covenant, agreement, condition or provision set forth herein may be omitted or waived (either generally or in a particular instance and either retroactively or prospectively), upon written consent of the Borrower and the Holder.

(c)             All notices, requests, consents and demands shall be made in writing and shall be mailed postage prepaid, or delivered by reliable overnight courier service, or delivered by hand, to the Borrower or to the Holder at their respective addresses set forth below or to such other address as may be furnished in writing to the other party hereto and shall be effective upon receipt: If to the Borrower, at its principal office address. If to the Holder, at the address for such Holder as set forth on the written records of the Borrower.

(d)            This Note will be governed by and interpreted and construed in accordance with the internal laws of the Commonwealth of Massachusetts (without reference to principles of conflicts or choice of law that would result in the application of laws of another jurisdiction). The Borrower and the Holder, by its acceptance hereof, hereby irrevocably submit to the exclusive jurisdiction of any state or federal court sitting in the Commonwealth of Massachusetts over any action or proceeding arising out of or relating to this Note, and hereby irrevocably agree that all claims in respect to such action or proceeding may be heard and determined in such state or federal court. The Borrower and the Holder each agree that a final judgment in any action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

IN WITNESS WHEREOF, the Borrower has caused this instrument to be executed in its corporate name by its duly authorized officer as of the day and year first above written.

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE LAW OR AN OPINION OF COUNSEL ACCEPTABLE TO THE BORROWER THAT SUCH REGISTRATION IS NOT REQUIRED UNDER SUCH LAWS.

CONVERTIBLE PROMISSORY NOTE

FOR VALUE RECEIVED, the undersigned, VYSTAR CORPORATION (“Borrower”), promises to pay to BERNARD ROTMAN, or his heirs, successors or assigns, as the case may be (in each case, a “Holder”), the principal sum of FOUR HUNDRED TWENTY THOUSAND and 00/100 DOLLARS ($420,000) together with interest from the date hereof on the unpaid balance of such principal amount from time to time outstanding, at the rate of Five Percent (5%) per annum, until paid in full. Holder acknowledges that Borrower shall issue one or more Promissory Notes to certain interested creditors (the “Notes”).

1.              Principal and Interest .

(a)            Subject to the terms and conditions of this Note, the principal and interest on this Note shall be due and payable as follows:

(i)             The entire unpaid balance shall be immediately due and payable in full four (4) years from the date hereof (the “Maturity Date”).

(ii)            Except as set forth in subsection (i) above, interest on this Note that accrues until the Maturity Date shall be due and payable on the Maturity Date. If the entire unpaid balance under this Note is not paid in full pursuant to Section 2 hereof on or prior to the Maturity Date, then after the Maturity Date, the unpaid balance of the principal under this Note and any accrued interest thereon shall bear interest at the rate that is three percentage points over the interest rate, such interest being payable semiannually, in arrears. All computations of interest payable hereunder shall be on the basis of a 365-day year and actual days elapsed in the period of which such interest is payable. If any interest rate under this Note exceeds the maximum rate permitted by law, such rate shall be reduced to the maximum rate of interest permitted by law.

(b)            The principal under this Note and any interest accrued thereon may be prepaid by the Borrower at any time prior to the Maturity Date, without any fees or penalties to the Borrower for prepayment.

2.              Repayment prior to Maturity . Borrower shall repay the principal amount under this Note and the accrued interest thereon with common stock of the Borrower at any time at the written request of Holder, which notice may be given prior to the Maturity Date solely upon the pricing and events as follows unless otherwise waived by Borrower: Each such share of common stock shall have a deemed value equal to (a) the twenty (20) day average closing price for the twenty (20) trading days beginning on the sixth (6th) trading day following the date that such common stock begins trading with a new trading symbol following the effective date of a reverse stock split made by Borrower of its common stock, and (b) divided by two (2). For the sake of clarity, the following is an example of the formula describe above:

In the event that the reverse stock split contemplated by VYST is not approved by FINRA, the parties agree that the twenty (20) trading day calculation described above shall begin on the first trading day following notification of such disapproval by FINRA.

3.              Stock Restrictions . Notwithstanding anything to the contrary herein, Holder acknowledges and agrees that the shares of common stock transferred to it pursuant to this agreement will be subject to restrictions on resale under applicable rules and regulations of the Securities and Exchange Commission.

4.              Default . In the case of one or more of the following events (each, a “Default”) (i) the Borrower fails to pay when due any payment of principal or interest hereof; or (ii) the Borrower applies for a trustee, receiver or other custodian for it or a substantial part of its property; a trustee, receiver or other custodian is appointed for the Borrower or for a substantial part of its property; or any bankruptcy, reorganization, debt arrangement, or other case of proceeding, is commenced in respect of the Borrower which, in the case of any involuntary case or proceeding, is not dismissed within 60 days; or (iii) the Borrower materially breaches any of the covenants or agreements contained in this Note (other than that covered by clause (i) above) and such breach remains uncured for a period of ninety (90) days after receipt from the Holder of written notice thereof; then, notwithstanding the foregoing provisions of this Note, upon the occurrence of any Default described in clauses (i) and (ii) above, the Holder may, without written notice, declare the unpaid principal and interest on this Note and all other obligations of the Borrower to the Holder at once due and payable, and upon the occurrence of any Default described in clause (iii) above, the Holders of at least a majority of the outstanding principal amount under the Notes, may upon written notice to the Borrower, upon written notice to the Borrower and each of the Holders, as the case may be, declare the unpaid principal and interest on this Note and all other obligations of the Borrower to the Holders at once due and payable, whereupon in each foregoing case such principal, interest and other obligations shall become at once due and payable. Failure to exercise this option shall not constitute a waiver of the right to exercise the same at any other time.

5.              Waiver of Certain Rights . Subject to any applicable notice periods, all parties to this Note, including maker and any sureties, endorsers, or guarantors, hereby waive protest, presentment, notice of dishonor, and notice of acceleration of maturity and agree to continue to remain bound for the payment of principal, interest and all other sums due under this Note notwithstanding any change or changes by way of release, surrender, exchange, modification or substitution of any security for this Note or by way of any extension or extensions of time for the payment of principal and interest; and all such parties waive all and every kind of notice of such change or changes and agree that the same may be without notice or consent of any of them.

6.              Enforcement . Upon Default the Holder may employ an attorney to enforce the Holder’s rights and remedies and the maker, principal, surety, guarantor and endorsers of this Note hereby agree to pay to the Holder reasonable attorneys’ fees, plus all other reasonable expenses incurred by the Holder in exercising any of the Holder’s rights and remedies upon Default. The rights and remedies of the Holder as provided in this Note shall be cumulative and may be pursued singly, successively, or together against any other funds, property or security held by the Holder for payment or security, in the sole discretion of the Holder. The failure to exercise any such right or remedy shall not be a waiver or release of such rights or remedies or the right to exercise any of them at another time.

7.              No Shareholder Rights . Nothing contained in this Note shall be construed as conferring upon the Holder or any other person the right to vote or to consent or to receive notice as a shareholder of the Borrower.

8.              Miscellaneous . The following general provisions apply:

(a)            This Note, and the obligations and rights of the Borrower hereunder, shall be binding upon and inure to the benefit of the Borrower, the Holder, and their respective heirs, personal representatives, successors and assigns, except that the Borrower may not assign or transfer any of its rights or obligations under this Note without the prior written consent of the Holder. The transfer of this Note by the Holder is subject to restrictions under federal and state securities laws.

(b)            Changes in or amendments or additions to this Note may be made, or compliance with any term, covenant, agreement, condition or provision set forth herein may be omitted or waived (either generally or in a particular instance and either retroactively or prospectively), upon written consent of the Borrower and the Holder.

(c)            All notices, requests, consents and demands shall be made in writing and shall be mailed postage prepaid, or delivered by reliable overnight courier service, or delivered by hand, to the Borrower or to the Holder at their respective addresses set forth below or to such other address as may be furnished in writing to the other party hereto and shall be effective upon receipt: If to the Borrower, at its principal office address. If to the Holder, at the address for such Holder as set forth on the written records of the Borrower.

(d)            This Note will be governed by and interpreted and construed in accordance with the internal laws of the Commonwealth of Massachusetts (without reference to principles of conflicts or choice of law that would result in the application of laws of another jurisdiction). The Borrower and the Holder, by its acceptance hereof, hereby irrevocably submit to the exclusive jurisdiction of any state or federal court sitting in the Commonwealth of Massachusetts over any action or proceeding arising out of or relating to this Note, and hereby irrevocably agree that all claims in respect to such action or proceeding may be heard and determined in such state or federal court. The Borrower and the Holder each agree that a final judgment in any action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

IN WITNESS WHEREOF, the Borrower has caused this instrument to be executed in its corporate name by its duly authorized officer as of the day and year first above written.

Exhibit 1.2(c)

Manner of Payment

The Promissory Note payable to Steven Rotman will be in the principal amount of $367,500, bearing interest at the rate of 5%, with principal and interest payable over a term of eight (8) years according to the schedule set forth in such note.

The Convertible Promissory Note payable to Steven Rotman will be in the principal amount of $1,102,500, bearing interest at the rate of 5%, with principal and interest payable over a term of eight (8) years according to the schedule set forth in such note if not sooner converted into shares of the common stock of Buyer in accordance with its terms.

The Promissory Note payable to Bernard Rotman will be in the principal amount of $140,000, bearing interest at the rate of 5%, with principal and interest payable over a term of four (4) years according to the schedule set forth in such note.

The Convertible Promissory Note payable to Bernard Rotman will be in the principal amount of $420,000, bearing interest at the rate of 5%, with principal and interest payable over a term of four (4) years according to the schedule set forth in such note if not sooner converted into shares of the common stock of Buyer in accordance with its terms.

[ Signature Page to Stock Purchase Agreement ]

VYSTAR CORPORATION 8-K  

Exhibit 10.2

MASTER CREDIT AGREEMENT

 (INCLUDING AMENDMENT AND RESTATEMENT OF LOAN DOCUMENTS)

by and among

Fidelity Co-operative Bank

(as “ Lender ”)

and

Murida Furniture Co., Inc. , and  

Vystar Corporation

(individually and/or collectively, as “ Borrower ”)

Dated as of: July 18, 2019

MASTER CREDIT AGREEMENT  

(INCLUDING AMENDMENT AND RESTATEMENT OF LOAN DOCUMENTS)

This MASTER CREDIT AGREEMENT, dated as of July 18, 2019 (the “ Effective Date ”), is made by and among (i) FIDELITY CO-OPERATIVE BANK (d/b/a “Fidelity Bank”) , a Massachusetts-chartered co- operative bank having a principal place of business located at 675 Main Street, Fitchburg, Massachusetts 01420 (collectively with its successors and/or assigns, “ Lender ”), (ii) M urida F urniture C o ., I nc . ( d/b/a “Rotmans” ), a Massachusetts corporation having a principal place of business at 725 Southbridge Street, Worcester, Massachusetts 01610 (collectively with its successors and/or permitted assigns, “ Rotmans ”), and (iii) V ystar C orporation ( a/k/a “Vystar Corp.” ), a Georgia corporation having a principal place of business at 101 Aylesbury Road, Worcester, Massachusetts 01609 (collectively with its successors and/or permitted assigns, “ Vystar ”; Vystar and Rotmans are jointly and severally liable with respect to all Obligations (hereinafter defined), and are herein referred to, individually and/or collectively as the context may require, and jointly and severally, as “ Borrower ”; Borrower and Lender are sometimes hereinafter referred to, each individually, as a “ Party ”, and collectively, as the “ Parties ”).

R E C I T A L S :

A.         On March 3, 2014, Rotmans established a credit, borrowing and/or banking relationship with Lender (the “ Banking Arrangement ”), under which such Banking Arrangement Lender has heretofore extended or otherwise made available to Rotmans, inter alia , a certain revolving demand line of credit loan facility (the “ Existing RLOC ”) in the original Face Amount (hereinafter defined) of T wo M illion F ive H undred T housand and 00/100 D ollars ( $2,500,000.00 ), the drawing availability under which such Existing RLOC has been temporarily increased from time to time to the Face Amount of T hree M illion and 00/100 D ollars ( $3,000,000.00 ) by virtue of certain temporary credit accommodations extended to Rotmans by Lender from time to time under the terms and conditions of separate “Change in Terms Agreements”, each by and between Lender and Rotmans and respectively dated as of (or on or about) June 26, 2018, January 3, 2019, March 4, 2019, April 30, 2019, May 16, 2019 and June 11, 2019, and the most-recent of which such temporary credit accommodations is, immediately prior to the Closing, in effect until no later than September 12, 2019 (as further described in, and subject to the Note and this Agreement).

B.         Immediately prior to the Closing, the Existing RLOC is (i) evidenced by a certain “Demand Revolving Line of Credit Note”, dated as of March 3, 2014, made and delivered by Rotmans to the order of Lender in the original Face Amount of $2,500,000 . 00, as amended, supplemented or otherwise modified from time to time, including by the June COT (hereinafter defined); (ii) made, extended and advanced by Lender to Rotmans pursuant to, inter alia , the terms and conditions of a certain “Loan Agreement” dated as of March 3, 2014 by and between Lender and Rotmans, as amended or otherwise modified from time to time; and (iii) secured by, inter alia , the Liens (hereinafter defined) granted (and/or otherwise created or established) by Rotmans in favor of Lender under and pursuant to the terms and conditions of a certain “Security Agreement” dated as of March 3, 2014 by and between Lender and Rotmans, as amended or otherwise modified from time to time (the instruments, agreements and documents referenced in the immediately preceding clauses (i) – (iii), together with any and all other, heretofore existing agreements, instruments and/or documents evidencing, securing, guaranteeing or otherwise relating to all or any part of any obligations, liabilities or undertakings of Rotmans and/or any guarantors in respect of the existing RLOC, individually and/or collectively as the context may require, the “ Existing Debt Documents ”).

C.         Immediately prior to the Closing, (i) all Indebtedness under or in respect of the Existing RLOC is valid and existing Indebtedness of Rotmans to Lender for which Rotmans and any guarantors thereof are absolutely, unconditionally, jointly and severally liable to Indefeasibly Satisfy (hereinafter defined) immediately upon Lender’s demand therefor; (ii) the Existing Debt Documents and any and all obligations, liabilities and/or undertakings of Rotmans and any guarantors thereunder are legal, valid, binding and enforceable in accordance with their respective terms; and (iii) the Liens granted to, in favor and/or for the benefit of Lender by or under the Existing Debt Documents are and constitute valid, enforceable and First Priority (hereinafter defined) perfected security interests and Liens, as to which there are no setoffs, deductions, claims, counterclaims or defenses of any kind or character whatsoever.

D.         Pursuant to the terms of a certain Stock Purchase Agreement dated as of, or substantially contemporaneously with, the Effective Date by and among Vystar and all of the stockholders of Rotmans, Vystar is prepared to purchase one hundred percent (100%) of the issued and outstanding capital stock of Rotmans (as amended, restated, supplemented and/or otherwise modified from time to time, together with any and all exhibits, schedules and addenda thereto, the “ Acquisition Agreement ”; and such Acquisition Agreement, together with any and all other agreements, instruments, certificates, side letters and documents affecting all or any part of the terms and conditions thereof, or effectuating the transactions contemplated thereby, and/or executed or delivered in connection therewith, collectively, the “ Acquisition Documents ”; and any and all such transactions contemplated by such Acquisition Documents, collectively, the “ Acquisition ”); provided , however , that, pursuant to the terms and conditions of the Existing Debt Documents, the closing, consummation and/or effectuation of the Acquisition Transaction (the “ Acquisition Closing ”) cannot (and shall not) occur absent Lender’s express prior written consent thereto.

E.         Lender is unwilling to consent to the Acquisition Closing unless , simultaneously therewith: (i) Vystar joins with Rotmans under the Banking Arrangement as “ Borrower ” and agrees to be jointly and severally liable for the Indefeasible Satisfaction of all Obligations as a primary, and not merely as a surety or a secondary, obligor and debtor thereunder; (ii) the Existing Debt Documents are amended and restated in their entirety (except as otherwise herein specified) to reflect the same and, among other things, provide new terms and conditions under which the Loan (hereinafter defined) and/or the proceeds thereof will be secured, made, extended, disbursed and/or advanced; and (iii) The Obligors (hereinafter defined) duly enter into, execute and deliver all of the respective Loan Documents (hereinafter defined) to which they are a party (and/or to which they, or all or any part of their respective assets, are subject or otherwise bound by).

F.         To induce Lender’s consent to the Acquisition Closing, to enter into the Loan Documents, and to make and/or extend the Loan or any portion thereof, and to evidence Vystar’s willingness to join as “ Borrower ” under the Banking Arrangement (as hereinabove referenced), the Parties are hereby amending and restating each and all of the Existing Debt Documents in their entirety by their execution and delivery of this Agreement and all other of the Loan Documents executed and/or delivered on or as of the Effective Date (except as otherwise expressly provided herein and/or in any other of such Loan Documents).

G.         It is the express intention of the Parties by their execution and delivery hereof, that, from and after the Closing, the Loan: (i) shall be evidenced by the Note; (ii) shall be made and extended, and advanced and/or disbursed (as applicable), pursuant and subject to the terms and conditions hereof; (iii) shall, together with the Indefeasible Satisfaction of all Obligations (hereinafter defined), be secured by, inter alia , the Liens of the Security Instruments (hereinafter defined); and (iv) shall, together with the Indefeasible Satisfaction of all Obligations, be guaranteed by the Guarantors (hereinafter defined) pursuant and expressly subject to the terms and conditions of their respective Guaranties (hereinafter defined).

H.         Subject to and upon the terms and conditions hereof and the other Loan Documents, the Loan is to be used or applied by Borrower for the “ Purpose ” of enabling it to: (i) have access to short term working capital, and to pay for Costs and Expenses incurred, in connection with the operation of its business in the ordinary course; and (ii) cause one or more letters of credit to be issued from the unadvanced portion(s) of the Loan to secure obligations arising in connection with Permitted Liens (hereinafter defined).

NOW , THEREFORE , for and in consideration of all of the above recitals (collectively, the “ Recitals ”) and the covenants, agreements, representations and warranties herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

A G R E E M E N T :

1.             DEFINITIONS . As used in this Agreement, in addition to those terms elsewhere defined herein (or otherwise incorporated herein by reference; including, without limitation, such capitalized and defined terms appearing in the Recitals and in the preamble to this Agreement), the following terms shall have the respective definitions and meanings ascribed to them below in this Article 1 :

1.1       “ Accommodation Period ”, “ Accommodation Expiration Date ” and “ Accommodation Tranche ” have the respective meanings ascribed to such terms in the Note, and such terms and their respective meanings are incorporated herein by this reference.

1.2       “ Acquisition ”, “ Acquisition Agreement ”, “ Acquisition Closing ” and “ Acquisition Documents ” have the respective meanings ascribed to such terms in Paragraph D of the Recitals.

1.3       “ Affiliate ” means, as to any specified Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is in control of, is controlled by or is under common control with, such specified Person; and, if such specified Person is a natural person, the immediate family members of such specified Person. For purposes of this definition, “ control ” (including with correlative meanings, the terms “ controlling ”, “ controlled by ” and “ under common control with ”) means the possession of the power to direct or cause the direction of the management, governance, policies and/or affairs of such Person, whether through the ownership of voting securities or other Equity Interests, as trustee, legal representative or executor, as general partner or manager, as officer or director, by contract and/or otherwise, including the direct or indirect ownership of securities or other Equity Interests having the power to elect a majority of the board of directors or other management authority governing the affairs, management and/or policies of such Person. In the case of a corporation, the direct or indirect ownership of fifty percent (50 . 00%) or more of the outstanding voting stock or other Equity Interests of such corporation, or the ability otherwise to elect a majority of its board of directors or any such other management authority (as aforesaid), shall in any event be deemed to confer control; provided , however , that it is understood that that the direct or indirect ownership of a lesser percentage of stock or other Equity Interests shall not necessarily preclude the existence of control. For purposes of this definition, and notwithstanding anything contained herein or in any other Loan Document to the contrary: (i) in the case of any Obligor, each of the now or hereafter existing managers, managing-members, officers, directors, trustees, partners, members and principals of such Obligor shall all be deemed to be “ Affiliates ” of each other and of each and all of the other Obligors; and (ii) Lender and its Affiliates on the one hand, and the Obligors and their respective Affiliates on the other hand, shall in no event be deemed to be “ Affiliates ” of each other.

1.4       “ Aggregate Revolving Advances ” has the meaning given to such term in Section 1.123 .

1.5       “ Agreement ” means this Master Credit Agreement, together with any and all exhibits, schedules and/or other addenda now or from time to time hereafter attached hereto (all of which are expressly incorporated herein, and made a part hereof, by this reference), as amended, restated, supplemented, addended, consolidated and/or otherwise modified from time to time.

1.6       “ and/or ” has the meaning given to such term in Section 11.11.2 .

1.7       “ Anti-Terrorism Law ” means any Requirement of Law related to money laundering or directly or indirectly financing terrorism, including, without limitation, any provisions now or hereafter relating to any such activities set forth in (i) the Patriot Act; (ii) the Currency and Foreign Transactions Reporting Act (31 U.S.C. §§5311-5330 and 12 U.S.C. §§1818(s), 1820(b) and 1951-1959) (also known as the “Bank Secrecy Act”); (iii) the Trading With the Enemy Act (50 U.S.C. §1 et seq.); (iv) Executive Order 13224 (effective September 24, 2001); and (v) Regulation GG.

1.8       “ Automatic Payments ” has the meaning given to such term in Section 2.7 .

1.9        “ Banking Arrangement ” has the meaning given to such term in Paragraph A of the Recitals.

1.10      “ Banking Service ” means any banking or other financial accommodation or service now or hereafter made available or extended to Borrower (and/or any other Obligor, as the case may be)— other than pursuant to the terms of this Agreement —by Lender or any Affiliate of Lender, or maintained or established at any time with or by Lender or any Affiliate of Lender for the benefit or the account of Borrower (and/or any other Obligor, as the case may be), including any: (i) deposit, checking, savings or other type(s) of account(s), whether or not interest bearing; (ii) commercial credit cards, or debit, purchase or stored value cards; (iii) credit or merchant card processing services; (iv) cash or treasury management, payroll, remote deposit or related services (including any wire transfer and automated clearing house (ACH) processing services); (v) controlled disbursement accounts or services; or (vi) return items, overdrafts and interstate depository network accounts or services.

1.11      “ Banking Service Agreement ” means each agreement, instrument or other document entered into from time to by Borrower (and/or any other Obligor, as the case may be) with Lender or any Affiliate of Lender in connection the obtaining of any Banking Service ( other than this Agreement ).

1.12      “ Bankruptcy Code ” means Title 11 of the United States Code, as amended from time to time, or any similar federal or state law for the relief of debtors.

1.13      “ Blocked Person ” means any Person that (i) is publicly identified on the most current list of “Specially Designated Nationals and Blocked Persons” published by OFAC or resides, is organized or chartered, or has a place of business in a country or territory subject to OFAC sanctions or embargo programs; or (ii) is publicly identified as prohibited from doing business with the United States under any Requirements of Law (including the International Emergency Economic Powers Act (50 U.S.C. §1701 et seq .) and the Trading With the Enemy Act (40 Stat. 411; codified at 12 U.S.C. §§95a–95b and 50 U.S.C. App. §§1 – 44).

1.14       “ Borrower ” has the meaning given to such term in the preamble to this Agreement, provided that such meaning and term is subject to the terms and conditions of Section 11.1 .

1.15       “ Borrowing Base ” has the meaning given to such term in Section 3.5 .

1.16       “ Borrowing Base Certificate ” means a certificate substantially in the form attached hereto as Exhibit B that computes the Borrowing Base, is signed by a Responsible Officer of Borrower and is submitted to Lender together with any and all reports, schedules, memos and other documents or information as more particularly set forth in Section 6.4.1 .

1.17       “ Bringdown Certificate ” has the meaning given to such term in Section 2.10 .

1.18       “ Brookline ” means B rookline R ealty I nvestment, I nc ., a Massachusetts corporation and a Corporate Obligor that, on the Effective Date, is the fee owner of one of the Mortgaged Properties identified on Schedule 1.85 (namely, 15 Crompton Street, Worcester, Massachusetts), and shall make, grant, execute and deliver to Lender a Mortgage thereon, together with a Guaranty of the Obligations (upon such terms conditions, and subject to any such limitations, as may be more particularly set forth therein), as a condition to Lender’s consummating the Closing and its acceptance, execution and/or delivery of any Loan Documents.

1.19       “ Business Combination ” means, with respect to any specified Person, the (i) merger, combination or consolidation of such Person or any of its Subsidiaries with or into any other Person, or (ii) the sale of all or substantially all of the assets, Equity Interests or other evidence of beneficial ownership of such Person or any of its Subsidiaries.

1.20       “ Business Day(s) ” has the meaning ascribed to such term in the Note and is incorporated herein by this reference.

1.21       “ Capital Expenditures ” with respect to any Person, means the aggregate of all expenditures by such Person for the acquisition or leasing (pursuant to a capital lease) of fixed or capital assets, software or additions to equipment (including replacements, capitalized repairs and improvements) which are required to be capitalized under GAAP on the balance sheet of such Person.

1.22       “ Capital Lease Obligations ” with respect to any Person, means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases under GAAP on the balance sheet of such Person and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

1.23       “ Cash Equivalents ” as to any Person, means (i) securities issued or directly and fully guaranteed or insured by the United States or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof) having maturities of not more than one (1) year from the date of acquisition by such Person; (ii) time deposits and certificates of deposit of any commercial bank having, or which is the principal banking subsidiary of a bank holding company organized under the laws of the United States, any State thereof or the District of Columbia having capital, surplus and undivided profits aggregating in excess of $500,000,000, having maturities of not more than one (1) year from the date of acquisition by such Person; (iii) repurchase obligations with a term of not more than ninety (90) days for underlying securities of the types described in clause (i) above entered into with any bank meeting the qualifications specified in clause (ii) above; (iv) commercial paper issued by any issuer rated at least A-1 by S&P or at least P-1 by Moody’s or carrying an equivalent rating by a nationally recognized rating agency, if both of the two (2) named rating agencies cease publishing ratings of commercial paper issuers generally, and in each case maturing not more than one (1) year after the date of acquisition by such Person; or (v) investments in money market funds substantially all of whose assets are comprised of securities of the types described in clauses (i) through (iv) above.

1.24       “ Change of Control ” or “ Change in Control ” shall occur when: (i) Borrower shall: (A) effect a Business Combination that is not expressly permitted hereby or previously and expressly consented to in writing by Lender (expressly excluding, for the avoidance of doubt, the Acquisition); (B) allow another Person to make a purchase, tender or exchange offer that is accepted by the holders of more than fifty percent (50 . 00%) of the outstanding voting shares of the applicable Borrower; or (C) consummate a stock purchase agreement or similar arrangement (including, without limitation, a reorganization, recapitalization, spin-off or other similar scheme) with another Person, in each case whereby such other Person or its shareholders acquires more than fifty percent (50 . 00%) of the outstanding voting shares of the applicable Borrower and the holders of a majority of the voting shares of the applicable Borrower fail to hold a majority of the voting shares of the resulting or surviving Person, as applicable; (ii) any “person” or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act), other than the holders of a majority of the voting shares of the applicable Borrower as of the Closing, is or shall become the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of fifty percent (50 . 00%) or more of the aggregate voting power of the applicable Borrower; (iii) any Obligor shall execute any agreement, instrument or other document to which any of Borrower is a party or subject, or to which any of Borrower is otherwise bound by, that directly or indirectly provides for any of the events set forth in the immediately preceding clauses (i) – (ii); or (iv) Vystar no longer being a publicly traded company listed on the Principal Trading Market.

1.25       “ Charter Documents ” means, as to any Person that is not a natural Person, if such Person is a (i) a corporation of any kind, such Person’s articles or certificate(s) of organization, incorporation, formation and/or registration (or other constituent documents, as the case may be), by-laws and any all agreements by and between or among any one or more or all of its Equity Interest holders and/or directors with respect to such Person’s organization or the governance of its business and affairs; (ii) limited liability company of any kind, such Person’s articles or certificate(s) of organization, formation and/or registration (or other constituent documents, as the case may be) and any (so-called) ‘operating agreements’ or ‘limited liability company agreements’ (or equivalents), and any all other agreements by and between or among any one or more or all of its Equity Interest holders and/or managers with respect to such Person’s organization or the governance of its business and affairs; (iii) a partnership of any kind, such Person’s articles or certificate(s) of partnership and/or registration (or other constituent documents, as the case may be) and any partnership agreements (or equivalents) (so-called) ‘operating agreements’ or ‘limited liability company agreements’ (or equivalents), and any all other agreements by and between or among any one or more or all of its Equity Interest holders and/or general partners or limited partners with respect to such Person’s organization or the governance of its business and affairs; or (iv) trust of any kind, such Person’s articles, certificate(s), registration(s) and/or declaration(s) of trust (or other constituent documents, as the case may be), and any and all agreements by and between or among any one or all of the trustee(s) and/or the beneficiaries thereof; as any of the documents referenced in the immediately preceding (i) – (iv) may from time to time be (or have been) amended, restated, supplemented, and/or otherwise modified, and together with any and all schedules, exhibits and/or other addenda thereto).

1.26       “ Closing ” has the meaning given to such term in Section 1.77 .

1.27       “ Current Maturity of Long-Term Debt ” means, as to any specified Person and for any specified period, the current scheduled principal required to be paid by such Person during such period on account of such Person’s Indebtedness (including, without limitation and for the avoidance of doubt, payments due on account of Capital Lease Obligations).

1.28       “ Code ” means the Internal Revenue Code of 1986, as amended from time to time.

1.29       “ Collateral ” means, individually and/or collectively as the context may require or specify, any and all now or hereafter existing or arising collateral of every kind or type whatsoever (including tangible, intangible, real, personal or mixed) which, now or at any time hereafter, Lender has a Lien on or in pursuant to the Security Instruments or otherwise, and/or which otherwise secures the payment and/or performance of the Obligations or any part thereof, including, without limitation, any and all “ Collateral ” (and/or “ Pledged Collateral ”) as such term is now (or may hereafter be) defined in any one or more of the Security Instruments, and is (and shall be) in each case incorporated by this reference into the definition provided by this Section 1.29 .

1.30       “ Commitment Fee ” means a certain commitment fee due and payable from Borrower to Lender no later than the Closing in the aggregate amount of $00.00 [WAIVED BY LENDER] .

1.31       “ Compliance Agreement ” means that certain Compliance and Inducement Agreement, dated as of the Effective Date, made, executed and delivered by the Obligors to and for the benefit of Lender with respect to the transactions contemplated by the Loan Documents, the terms and conditions of which are incorporated herein by this reference, as the same may from time to time be amended and/or modified.

1.32       “ Contractual Obligation ” means, with respect to any specified Person, any provision of any security (or other applicable Equity Interest) issued by such Person or of any agreement, contract, instrument, mortgage, deed of trust, lease or other document or undertaking to which such Person is a party or by which it or any of its property is bound, other than with respect to the Obligations.

1.33       “ Corporate Obligor ” and “ Corporate Obligors ” mean, both individually and/or collectively as the context may require, and jointly and severally, any one or more, or all, now or hereafter existing Obligors that are not natural persons, including, without limitation, (i) each entity that now or hereafter constitutes Borrower (including, for the avoidance of doubt but without limitation, on the Effective Date, each of Rotmans and Vystar), and (ii) each entity that, now or hereafter, is a Guarantor and/or executes and delivers to Lender any Security Instrument pursuant to the terms and conditions of this Agreement or any other of the Loan Documents (including, without limitation, pursuant to Section 6.3 hereof).

1.34       “ Cost and Expense ” and “ Costs and Expenses ” mean, both individually and/or collectively as the context may require, any and all reasonable fees, and any and all costs, expenses, disbursements, charges, taxes and assessments (including, without limitation, the out-of-pocket costs, disbursements and expenses, and the reasonable fees, of or by employed or third-party attorneys, paralegals and law clerks), directly or indirectly related or incidental to, or arising or incurred or charged as a consequence of, the specified matter, item, Person, property, event, circumstance, action or thing in connection with, or in the context in, which such phrase is used or appears. For the avoidance of doubt, as used herein and in all other of the Loan Documents, the defined terms “ Cost and Expense ” and/or “ Costs and Expenses ” shall, in each instance in which any such terms appear, and in all events, be deemed to be immediately prefaced with the word “ reasonable ”, even if any such instance(s) in any such Loan Documents do not explicitly so provide, state or specify. The immediately preceding sentence shall be deemed incorporated into Section 11.11 hereof by this reference.

1.35       “ Debt Service Coverage Ratio ” means, for, during and with respect to any specified period being tested by Lender (as may be further specified in Section 6.5 ), the ratio obtained by dividing (A) by (B): (A) the EBIDA of Borrower, less Distributions made by Borrower; divided by (B) Borrower’s Current Maturity of Long-Term Debt, plus Interest Expense of Borrower.

1.36       “ Debtor Relief Laws ” means, collectively, the Bankruptcy Code and all other liquidation, conservatorship, moratorium, receivership, insolvency, rearrangement, reorganization or similar debtor relief laws of the United States, or of any state or commonwealth or other applicable domestic or foreign jurisdiction(s), in effect and as amended from time to time.

1.37       “ Default Rate ” means, as of the specified time or period in question, and subject in all events to the provisions of Section 2.9 , the highest then-applicable “ Default Rate ”, as that term is defined in the Note (and such defined term and its meaning are incorporated into this Section 1.37 by this reference), unless the context shall otherwise require or specify.

1.38       “ Disclosed Litigation ” has the meaning given to such term in Section 5.7 .

1.39       “ Disposition ” or “ Dispose ” means the sale, conveyance, transfer, assignment, license, lease, abandonment or other disposition (whether in one transaction or in a series of transactions, and including any sale and leaseback transaction) of any property or assets (including, without limitation, any Equity Interests) by any Person (or the granting of any option or other right to do any of the foregoing), including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.

1.40       “ Distributions ” collectively means, at or for any applicable or specified time or period with respect to Borrower (or, as the case may be, any other Corporate Obligor), all amounts paid or payable (without duplication) as dividends, cash, options, warrants, rights, instruments, distributions, returns of capital or principal, owner withdrawals, income, interest, profits and other property, interests (debt or equity), proceeds and/or owner withdrawals (including, without limitation, as a result of a split, revision, reclassification or other like change of any Equity Interests in, of and/or owned by Borrower or such Corporate Obligor), and includes any purchase, redemption or other retirement of any stock or other Equity Interests directly or indirectly through a Subsidiary or otherwise, and includes return of capital to shareholders, partners, members or other Equity Interest holders.

1.41       “ Drawing ” has the meaning given to such term in Section 3.7.5 .

1.42       “ EBIDA ” means, as to any specified Person, and for any specified period, the aggregate sum of such Person’s net income (or loss) from continuing operations before Interest Expense, depreciation, amortization and other non-cash items, in each case for such specified period, computed and calculated in accordance with GAAP.

1.43       “ Effective Date ” has the meaning given to such term in the preamble to this Agreement.

1.44       “ Eligible Inventory ” means any and all inventory of Borrower which meets all of the requirements set forth below in this Section 1.44 . Inventory that is at any time Eligible Inventory, but which subsequently fails to meet any of the foregoing requirements, shall forthwith cease to be Eligible Inventory until such time as it again meets the criteria for Eligible Inventory. Eligible Inventory shall be discounted by the percentages or amounts reserved against inventory as set forth in Borrower’s then-most recent financial statements, as delivered to Lender from time to time in accordance with this Agreement. The requirements for inventory to qualify as “Eligible Inventory” hereunder are that such inventory:

1.44.1 is subject to a perfected, First Priority Lien in favor of Lender, and not subject to any other assignment, claim and/or other Lien (other than Permitted Liens) that is superior to the Liens in favor of Lender created by or pursuant to any one or more of the Security Instruments;

1.44.2 is (i) salable, (ii) not “work-in-progress” inventory, and (iii) not supply items, packaging and/or any other similar materials;

1.44.3 is in the possession and control of Borrower and is stored and held in facilities owned by Borrower or, if such facilities are not so owned, Lender is in possession of and has rights under a collateral access agreement (and/or instrument of similar title and effect) with respect thereto;

1.44.4 is not (i) produced in violation of the Labor Act, and (ii) subject to the “hot goods” provisions contained in Sections 15(a)(1) and/or 12(a) of the Labor Act;

1.44.5 is not subject to any agreement, license or Permit which would restrict Lender’s ability to sell or otherwise dispose of such inventory;

1.44.6 is located in the United States or in any territory or possession of the United States that has adopted Article 9 of the UCC;

1.44.7 is (i) not “in transit” to Borrower unless such inventory is (A) fully insured, and (B) certified by Borrower as being “in transit”; or (ii) not held by Borrower on consignment;

1.44.8 is not identified to any purchase order or contract to the extent progress or advance payments are received with respect to such inventory;

1.44.9 is not inventory reported as being ‘not available for sale’ on any inventory report of Borrower due to the damage of such inventory or otherwise; and

1.44.10 is not of a type such that it would create or result in a breach in any material respect any of the representations, warranties or covenants pertaining to inventory set forth in this Agreement or any other Loan Document.

1.45       “ Environmental Laws ” means, both individually and/or collectively as the context may require, any and all federal, state, foreign, local or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, requirements of any Governmental Authority or other Requirements of Law (including common law) as now or may at any time hereafter be in effect, and any binding judicial or administrative interpretation thereof, including any binding judicial or administrative order, consent decree or judgment, regulating, relating to or imposing liability or standards of conduct concerning protection of the environment or, to the extent relating to exposure to substances that are harmful or detrimental to the environment, or human health or safety.

1.46       “ Equity Interests ” means, with respect to any Person, all of the shares of capital stock of (or other ownership, profit or beneficial interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership, profit or beneficial interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership, profit or beneficial interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or other beneficial interests in such Person (including partnership, membership or trust interests therein), whether voting or nonvoting, certificated or uncertificated, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.

1.47       “ ERISA ” means the Employee Retirement Income Security Act of 1974 (Pub. L. 93–406, 88 Stat. 829, enacted September 2, 1974, codified in part at 29 U.S.C. §§ 1001 et seq .), as amended from time to time.

1.48       “ ERISA Affiliate ” means an entity, whether or not incorporated, that is under common control with all or any part of Borrower within the meaning of §4001 of ERISA, or is part of a group that includes all or any part of Borrower and which is treated as a single employer under §414 of the Code.

1.49       “ Event of Default ” has the meaning given to such term in Section 8.1 ; provided that it is understood and agreed that such term and its use, meaning and interpretation, for purposes hereof and any and all other Loan Documents, is subject to the provisions of Section 8.2 below ; and provided further that any defined term in any other Loan Document, the definition for which now or hereafter expressly references or incorporates the definition and/or meaning of “ Event of Default ” as provided by or defined in this Agreement, is and shall be likewise subject to the provisions of Section 8.2 hereof by this reference.

1.50       “ Exchange Act ” means the Securities Exchange Act of 1934, or any successor federal statute, and the rules and regulations of the SEC (or, as the case may be, any other Governmental Authority) thereunder, as the same may be amended from time to time.

1.51       “ Existing Debt Documents ” has the meaning given to such term in Paragraph B of the Recitals.

1.52       “ Face Amount ” when used or appearing herein and/or in any other of the Loan Documents in the context of, or otherwise in conjunction with:

1.52.1 any specified instrument or promissory note (as such terms are respectively defined in UCC §9-102 for all purposes hereof, and irrespective of the negotiability of the same; and including, without limitation, the Note), means the aggregate, maximum, principal , face amount of all of the proceeds of any loan, credit facility, credit accommodation and/or other extension or credit (regardless of any then- outstanding balance of all or any portion of such principal, and whether or not then due, unless otherwise expressly specified in such context) as stated on, and/or as stated within or by or otherwise pursuant to the express terms and conditions of, such specified promissory note or instrument (in each case as such specified promissory note or instrument may be amended, restated, supplemented and/or otherwise modified from time to time; and including, in the case of the Note, but without limitation, pursuant to Section 8.11 thereof ); and/or

1.52.2 any specified loan, credit facility (including, without limitation, the Loan), credit accommodation and/or other specified extension of credit that is evidenced by any promissory note or instrument (irrespective of the negotiability thereof), means the aggregate, maximum, principal , face amount of all of the proceeds of such specified loan, credit facility, credit accommodation and/or other specified extension of credit (regardless of any then-outstanding balance of all or any portion of such principal, and whether or not then due, unless otherwise expressly specified in such context) as stated on, and/or as stated within or by or otherwise pursuant to the express terms and conditions of, such promissory note or instrument (as such promissory note or instrument may be amended, restated, supplemented, and/or otherwise modified from time to time).

1.53       “ First Priority ” has the meaning ascribed to such term in the Security Agreement, and such defined term and its respective meaning therein are incorporated into this Agreement by this reference.

1.54       “ GAAP ” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied; and, in case of any Obligor, with only such modifications thereto upon Lender’s express prior written consent.

1.55       “ Governmental Authority ” means, individually and/or collectively as the context may require, any (i) supra-national, federal, state or local government or political subdivision or body, or public instrumentality, thereof, (ii) court, tribunal, agency, department, commission, arbitrator, board, bureau, instrumentality or other governmental authority of the United States of America or of any other country, or domestic or foreign state, province, commonwealth, city, county, municipality, territory, protectorate or possession, or (iii) any self-regulated organization or other non-governmental regulatory authority or quasi- governmental authority of any jurisdiction (to the extent that the rules, regulations, orders or directives thereof have the force of law), and/or (iv) other Person exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government (which have the force or effect of law) and having jurisdiction over the Person, matters, circumstances, property, items and/or other things in question.

1.56       “ Governmental Charges ” has the meaning given to such term in Section 2.8 .

1.57       “ Guarantor ” and “ Guarantors ” mean, both individually and/or collectively as the context may require, and jointly and severally, any one or more Persons that, at any time or times (whether now or hereafter), execute and deliver to Lender a Guaranty for all or any part of the Obligations (subject to the terms and conditions of any such Person’s respective Guaranty), including, without limitation, each Personal Guarantor and/or other Obligor, and each Subsidiary that now or hereafter delivers a Guaranty to Lender in accordance with this Agreement (including, without limitation, under the provisions of Section 6.3.3 below ) and/or any other of the Loan Documents.

1.58       “ Guaranty ” and “ Guaranties ” mean, both individually and/or collectively as the context may require, with respect to any one or more Guarantors, a duly authorized and executed “guaranty” (and/or any other agreement, instrument or other document of like import, or of similar title , including, without limitation, any “ Guarantee ”, “ Unconditional Guarantee ”, “ Unlimited Guaranty ” “ Completion and Indemnity Guaranty ”, “ Personal Guaranty ” or “ Corporate Guaranty ”), pursuant to which such Guarantor has unconditionally guaranteed, jointly and severally with each other Guarantor, the Indefeasible Satisfaction of all Obligations (except as may be otherwise expressly set forth or limited in or by any such agreement, instrument or other document), in each case as the same may be amended, restated, supplemented, renewed, reaffirmed, ratified and/or otherwise modified from time to time.

1.59       “ Hazardous Materials ” means, both individually and/or collectively as the context may require, (i) any gasoline, petroleum or petroleum products or by-products, radioactive materials, friable asbestos or asbestos-containing materials, urea-formaldehyde insulation, polychlorinated biphenyls and radon gas, and (ii) any other chemicals, materials or substances designated, classified or regulated as hazardous or toxic or as a pollutant or contaminant under any Environmental Law.

1.60       “ HazMat Agreement ” means that certain Hazardous Materials Indemnity Agreement, dated as of the Effective Date, jointly and severally made by the Obligors to, in favor and for the benefit of Lender, as the same may from time to time be amended, restated and/or otherwise modified.

1.61       “ Hedging Contracts ” means any foreign exchange contract, currency swap agreement, futures contract, commodities hedge agreement, interest rate protection agreement, option agreement, interest rate future, swap, cap or collar agreement, or any other similar hedging agreement or arrangement entered into by a Person in the ordinary course of business.

1.62       “ Indebtedness ” means, as to any Person (without duplication): (i) such Person’s indebtedness, obligations or liabilities, whether sole, joint or several, matured or unmatured, liquidated or unliquidated, direct or contingent, and whether now existing or hereafter arising, for with respect to borrowed money; (ii) obligations of such Person representing the deferred purchase price of property or services (other than trade payables entered into in the ordinary course of business; and, in case of any Corporate Obligor, subject to the terms and conditions of the Loan Documents), and all monetary obligations under any leasing or similar arrangement (including Capital Lease Obligations) which, in accordance with GAAP, would be classified as a “ capital lease ” or “ capitalized lease ”; (iii) such Person’s obligations created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property); (iv) such Person’s obligations, contingent or otherwise, that are evidenced by, pursuant to or in respect of bonds, notes, debentures, acceptances, bankers’ acceptances, letters of credit or similar instruments; (v) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Equity Interests in such Person or any other Person or any warrants, rights or options to acquire such Equity Interests, valued, in the case of redeemable preferred interests, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends; (vi) such Person’s obligations and indebtedness under any Hedging Contract or Banking Service Agreement; (vii) all repurchase obligations or liabilities of such Person with respect to accounts or notes receivable sold by such Person; (viii) all indebtedness or obligations which would be classified in accordance with GAAP as liabilities on a balance sheet of such Person (or to which reference should be made in any footnotes thereto); and (ix) all indebtedness, liabilities and other obligations referred to in this Section 1.62 secured by (or for which the holder thereof has an existing right, contingent or otherwise, to be secured by) any Lien on any property (including accounts and contract rights) owned by such Person, or payable out of the proceeds or production from any property of such Person, even though such Person has not assumed or become liable for the payment thereof.

1.63       “ Indefeasible Satisfaction ”, “ Indefeasibly Satisfy ” or “ Indefeasibly Satisfied ” mean, in each instance or circumstance in which such term is used or appears (including the use or appearance of any correlative meanings or participles, or past or present tense forms, thereof) with respect to any specified liabilities, obligations or Indebtedness of a Person (including, in the case of any Obligors, any Indebtedness constituting all or any part of the Obligations), the irrevocable and indefeasible cash payment and performance, in full, of all such liabilities, obligations or Indebtedness, and which payment is not subject to avoidance, rescission, set-aside, invalidation or challenge as a preference in any Insolvency Proceeding that has been commenced at or within ninety-one (91) days of the time such payment has been made. Nothing in this Section 1.63 shall limit or vitiate the provisions of Section 11.6 .

1.64       “ Indemnified Party ” means, individually and/or collectively as the context may require, each and all of: (i) Lender, Lender’s Subsidiaries and Lender’s Affiliates, and each and all of the respective parent, sister and holding companies the foregoing (if any, and whether now or hereafter existing); and (ii) the respective shareholders, officers, directors, members, managers, partners, trustees, principals, corporators, owners, employees, Affiliates, attorneys, accountants, representatives, consultants, family members, engineers, agents, receivers, successors and assigns of, for, appointed or engaged by, or otherwise related to, any one or more of the Persons identified in or contemplated by this Section 1.64 .

1.65       “ Insolvency Event ” and “ Insolvency Proceeding ” mean, individually and/or collectively as the context may require or specify, the occurrence of any one or more of the following with respect to any specified Person: (i) the commencement by such Person of a voluntary case concerning itself under any Debtor Relief Laws; (ii) an involuntary case is commenced against such Person under any Debtor Relief Laws and the petition is not controverted within ten (10) days, or is not dismissed within sixty (60) days, after commencement of the case; (iii) a custodian is appointed for, or takes charge of, all or substantially all of the property or assets of such Person, or such Person commences any other proceedings or takes any action under any Debtor Relief Laws, or there is commenced against such Person any such proceeding which remains un-dismissed for a period of sixty (60) days; (iv) the entrance of any order of relief or other order approving any such case or proceeding contemplated by any of the immediately preceding (i) – (iii) involving such Person; (v) such Person is adjudicated insolvent or bankrupt under any Debtor Relief Laws or otherwise; (vi) such Person suffers or consents to any appointment of any custodian, receiver, interim receiver, receiver-manager, trustee or liquidator or the like for it or any substantial part of its property or assets which continues undischarged or un-stayed for a period of sixty (60) days; (vii) such Person makes a general assignment for the benefit of creditors; (viii) such Person shall fail to pay, or shall state that it is unable to pay, or shall be unable to pay, its debts generally as they become due in the ordinary course, or shall declare itself, or be declared by any Governmental Authority, as no longer being Solvent; (ix) the calling, or sufferance by such Person, of a meeting of the creditors of such Person to discuss such Person’s financial difficulties or (actual or potential) insolvency, or the occurrence of a meeting by such Person (or a representative thereof) with a formal or informal committee of creditors of such Person to discuss the same; and/or (x) such Person shall by any act (including by any partnership, limited liability company, trust, corporate and / or other similar action) or failure to act, consent to, approve of and / or acquiesce in any one or more of the things, events, circumstances or matters contemplated above in this Section 1.65 .

1.66       “ Intellectual Property ” means, both individually and/or collectively as the context may require, any and all intellectual property, including copyrights, copyright licenses, patents, patent licenses, trademarks, trademark licenses, goodwill, technology, know-how and processes, all rights therein, and all rights to sue at law or in equity for any past, present, or future infringement, violation, misuse, misappropriation or other impairment thereof, whether arising under Unites States, multinational or foreign laws or otherwise, including the right to receive injunctive relief and all proceeds and damages therefrom.

1.67       “ Interest Expense ” means, as to any specified Person, and for any specified period, the aggregate sum of such Person’s ordinary, regular, recurring and continuing expenditures for interest on all Indebtedness of such Person, and for commitment fees, agency fees, facility fees, balance deficiency fees and similar expenses incurred in connection with the incurrence of Indebtedness, in each case computed and calculated in accordance with GAAP.

1.70       “ June Accommodation ” and “ June COT ” have the respective meanings given to such terms in Section 11.25.1 .

1.71       “ Labor Act ” means the U.S. Fair Labor Standards Act of 1938 (29 U.S.C. § 201 et seq .), as amended.

1.72       “ Leasehold Assignment ” means that certain Omnibus Collateral Assignment of Leasehold Interests, dated as of March 3, 2014, made, executed, granted and delivered to and in favor of Lender by Rotmans, together with any and all exhibits, schedules and other addenda from time to time attached thereto, as amended, restated, supplemented, reaffirmed, ratified and/or modified from time to time.

1.73       “ Lender ” has the meaning given to such term in the preamble to this Agreement.

1.74       “ Letter of Credit ” has the meaning given to such term in Section 3.7.1 .

1.75       “ Lien ” means any mortgage, pledge, hypothecation, assignment (as security), deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest, or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever having substantially the same economic effect as any of the foregoing (including any conditional sale or other title retention agreement and any capital lease).

1.76       “ Loan ” has the meaning given to such term in Section 3.1 .

1.77       “ Loan Documents ” collectively means and includes this Agreement, the Note, Guaranties, Security Instruments, HazMat Agreement, Compliance Agreement, Leasehold Assignment (as amended hereby, pursuant and subject to Section 11.26 hereof), Subordination Agreements, Banking Service Agreements and all other agreements, instruments, certificates or other documents now or hereafter evidencing, securing, guaranteeing or otherwise referencing by context or incorporation this Agreement, the Loan and/or the Obligations (or any part thereof; and whether directly or indirectly), whether deliverable by any one or more Obligors at or after the closing and the execution and delivery of the documentation evidencing the Loan (the “ Closing ”), as any of the same may from time to time be amended, restated, replaced, renewed, extended, supplemented, consolidated, addended and/or otherwise modified, including, without limitation, all of the documents, certificates, exhibits and schedules deliverable to Lender as provided in (and/or attached to) this Agreement and/or any of the foregoing agreements, instruments, certificates or other documents listed in this Section 1.77 .

1.78       “ Loan Parties ” means Borrower and each Subsidiary of Borrower that is a party to a Loan Document.

1.79       “ Loan Proceeds ” has the meaning given to such term in Section 2.3 .

1.80       “ Margin Securities ” means, individually and/or collectively as the context may require, any “margin security” or “margin stock” as such terms are used in Regulations U and X of the Board of Governors of the Federal Reserve System (12 C.F.R. Parts 221 and 224, as amended).

1.81       “ Massachusetts ” means The Commonwealth of Massachusetts.

1.82      “ Material Adverse Change ” and “ Material Adverse Effect ” both mean, since any specified date or from any circumstances existing immediately prior to the happening of any specified event: (i) a material adverse change in, or a material adverse effect upon, the assets, business, prospects, properties, financial condition or results of operations of any Obligor; (ii) a material impairment of the ability of the Obligors, collectively, to perform any of their respective Obligations under any of the Loan Documents; or (iii) a material adverse effect on: (A) any material portion of the Collateral (including, without limitation, any Mortgaged Property); (B) the legality, validity, binding effect or enforceability against any Obligor of any of the Loan Documents; (C) the perfection or priority (subject to Permitted Liens) of any Lien granted to Lender under any Loan Document; or (D) the rights or remedies of Lender under any Loan Document. For purposes of determining whether any of the foregoing changes, effects, impairments, or other events have occurred, such determination shall be made by Lender, in its sole, but reasonably exercised, discretion, and in the exercise of commercial good faith.

1.83       “ Moody’s ” means M oody’s I nvestors S ervice , I nc . and any successor thereto.

1.84      “ Mortgage ” and “ Mortgages ” both mean, individually and/or collectively as the context may require, any one or more or all of the Mortgage, Assignment of Leases and Rents, Security Agreement, Financing Statement and Fixture Filings made by Borrower or any other Obligor in favor of Lender (including, without limitation, on the Effective Date, that certain Mortgage referenced in Section 1.18 above ), as the same may be amended, amended and restated, supplemented or otherwise modified from time to time to the extent permitted under the Loan Documents.

1.85      “ Mortgaged Property ” means, both individually and/or collectively as the context may require, any one or more or all of the real properties listed on Schedule 1.85 , and as to all of which Lender shall be granted Liens pursuant to the Mortgages. Each such Mortgaged Property is more particularly described in “ Exhibit A ” to the applicable Mortgage granted to Lender that creates a Lien in favor of Lender thereon.

1.86       “ Multiemployer Plan ” means a Plan which is a multiemployer plan as defined in §4001(a)(3) of ERISA to which Borrower or any ERISA Affiliate makes or is obligated to make contributions.

1.87      “ Note ” means that certain Revolving Demand Line of Credit Note, dated as of the Effective Date, made and delivered by Borrower to the order of Lender, as amended, restated, extended, renewed, supplemented, addended, replaced, substituted and/or otherwise modified from time to time (including, without limitation and as the case may be, pursuant and subject to Section 8.11.3 thereof). For the avoidance of doubt, the “ Note ”, as used herein and/or in any other Loan Document (unless otherwise specified herein or therein), shall mean the Note referred to and defined in the immediately preceding sentence, which, pursuant to its express terms, amends and restates in its entirety that certain “ Demand Revolving Line of Credit Note ” that (i) is referred to in Paragraph B of the Recitals, (ii) evidences the Exiting RLOC, and (iii) will be stamped “paid” and returned to Rotmans within ten (10) Business Days after the Effective Date.

1.88      “ Obligations ” is intended to be used in its most comprehensive sense and collectively means and includes any and all Indebtedness, obligations, liabilities and undertakings of Borrower and each and all of the other Obligors to Lender or any Affiliate of Lender of whatever kind and description, whether direct or indirect, absolute or contingent, primary or secondary, joint or several, due or to become due, now existing or hereafter arising, and whether or not evidenced by or arising under this Agreement or any other of the Loan Documents, including, without limiting the generality of any of the foregoing: (i) the principal of (and premium, if any) and interest (including any interest accruing subsequent to the filing of a petition of bankruptcy (or the occurrence of any other Insolvency Event) at the rate provided for in any Loan Documents and/or other documentation with respect thereto, irrespective of whether such interest is an allowed claim in such petition or otherwise under applicable law) on any Indebtedness of Borrower (and/or, as the case may be, any of the Obligors) to Lender or any Affiliate of Lender; (ii) any such obligations acquired or held (or to be acquired or held) by Lender or any Affiliate of Lender for its own account or as agent for any other Person, and any obligations to perform or refrain from performing actions; and (iii) all obligations to reimburse Lender or any Affiliate of Lender for any Costs and Expenses incurred in connection with all or any part of the Loan, the Loan Documents or any other documents or obligations referred to in this Section 1.88 , including, without limitation, Costs and Expenses of attorneys, other professionals, consultants, agents and representatives incurred in connection with (A) the preparation, negotiation, administration, review, inspection, amendment, modification, interpretation, syndication, swapping, development, participation, execution, underwriting, servicing, realization, foreclosure, collection and/or enforcement of all or any part of the Loan Documents, the Loan, any obligations or liabilities referred to in this Section 1.88 , and/or any security or Collateral for all or any part thereof, (B) any proceeding brought, or threatened, to enforce payment of all or any part of any obligations referred to in this Section 1.88 , and/or (C) any Insolvency Proceeding affecting any Obligors and/or any their respective Affiliates that affects or impairs in any manner (or could be reasonably expected to affect or impair in any manner) the repayment of all or any part of the Loan, or the payment or performance of any other obligations hereinabove referred to in this Section 1.88 .

1.89      “ Obligor ” and “ Obligors ” mean, both individually and/or collectively as the context may require, and jointly and severally, any one or more, or all, of: (i) Borrower; (ii) the Guarantors (whether now or at any time hereafter existing; including, without limitation, any and all Personal Guarantors); and (iii) any and all sureties, endorsers or other Persons (whether now or hereafter existing) who are now or at any time hereafter become directly or indirectly liable for, and/or who now or at any time hereafter grant any one or more Liens to (or in favor or for the benefit of) Lender or any Affiliate of Lender under any Security Instrument to secure, the Indefeasible satisfaction (and/or any other payment or performance) of the Obligations or any part thereof.

1.90       “ Obligor Financial Statements ” has the meaning given to such term in Section 5.21.3 .

1.91       “ OFAC ” means the Office of Foreign Assets Control, United States Department of the Treasury and any successor organization thereto (as the case may be).

1.92       “ Operating Account ” means, unless the context otherwise requires or specifies, the primary operating and depository account of Borrower or, as the case may be, any other Corporate Obligor, as further referenced in Section 4.1 .

1.93       “ OSHA ” means The Occupational Safety and Health Act of 1970 (29 U.S.C. § 651 et seq .), as amended.

1.94       “ OTC Market ” has the meaning given to such term in Section 1.108 .

1.95       “ Overadvance ” has the meaning given to such term in Section 3.8 .

1.96       “ Party ” and “ Parties ” have the meanings given to such terms in the preamble hereto.

1.97       “ Patriot Act ” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L. 107-56, signed into law October 26, 2001), as amended, restated, supplemented, replaced and/or modified from time to time.

1.98       “ PBGC ” means the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA (or any successor thereto).

1.99       “ Perfection Certificate ” has the meaning ascribed to such term in the Security Agreement, and such defined term and its meaning are incorporated herein by this reference; provided , however that any reference to the “ Perfection Certificate ” of any specified Person at any time contained within this Agreement or in any other of the Loan Documents shall, in each instance and as of such time, mean and refer to such specified Person’s Perfection Certificate, as amended, restated, supplemented, addended and/or otherwise modified.

1.100      “ Permit ” means any license, permit, approval, waiver, order, authorization, right or privilege of any nature whatsoever, granted, issued, approved or allowed by any Governmental Authority.

1.101       “ Permitted Acquisitions ” means the purchase or acquisition (whether in one or a series of related transactions) by any Person of (i) more than fifty percent (50 . 00%) of the Equity Interests with ordinary voting power of another Person, or (ii) all or substantially all of the assets (other than Equity Interests) of another Person or division or line of business or business unit of another Person, whether or not involving a merger or consolidation with such Person, provided that , in the case of Borrower and/or any Subsidiary: (A) at the time thereof and after giving effect thereto, no Event of Default that has not been waived by Lender (in accordance with the provisions of Section 10.2.1 below ) shall have occurred, nor would any Event of Default result from such acquisition or purchase; (B) the aggregate amount of the consideration (or, in the case of consideration consisting of assets, the fair market value of the assets) paid by Borrower and its Subsidiaries shall not exceed $1,000,000 . 00 on a cumulative basis for all such acquisitions or purchases subsequent to the Effective Date (excluding consideration payable by Borrower solely in its Equity Interests); (C) Borrower would be in compliance with all of its Ratio Covenants for the most recent calculation or testing period and as of the last day thereof, if such acquisition or purchase had been completed on the first day of such calculation or testing period; (D) not less than ten (10) Business Days’ prior to the closing of such proposed acquisition, Borrower shall have delivered to Lender a certificate of a Responsible Officer of Borrower setting forth in reasonable detail calculations demonstrating compliance with the conditions set forth in the preceding clauses (B) and (C), together with a Bringdown Certificate and ( so-called ) ‘execution-ready’ copies of all agreements, instruments and other documents evidencing or relating to, or otherwise intending to consummate, such Permitted Acquisition for Lender’s and its counsel’s review at Borrower’s sole Cost and Expense; and (E) such acquisition or purchase is consummated on a non-hostile basis.

1.102       “ Permitted Liens ” means, collectively, the following:

1.102.1 liens for taxes, assessments or similar charges, incurred in the ordinary course of business, that are not yet due and payable or the validity of which is being contested in good faith by appropriate proceedings, and as to which Borrower (or other Obligor, as the case may be) shall, if appropriate under GAAP, have set aside on its books and records adequate reserves;

1.102.2 pledges or deposits made in the ordinary course of business to secure (i) payment of worker’s compensation, or to participate in any fund in connection with worker’s compensation, unemployment insurance, old-age pensions or other social security programs; (ii) the performance of bids, tenders or contracts (other than for the repayment of borrowed money); (iii) indemnity, performance or other similar bonds for the performance of bids, tenders or contracts (other than for the repayment of borrowed money); (iv) statutory obligations or surety or appeal bonds; or (v) indemnity, performance or other similar bonds in the ordinary course of business;

1.102.3 liens of mechanics, materialmen, warehousemen, carriers or other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue in accordance with the payment terms thereof (but in no event longer than sixty (60) days), or the validity of which is being contested in good faith by appropriate proceedings, and for which Borrower (or such other Obligor, as the context may provide or require) shall, if appropriate under GAAP—and, in any event, subject to the terms and conditions of the Security Instruments—have set aside on its books and records adequate reserves;

1.102.4 easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business which, in the aggregate, are not material in amount and which do not materially detract from the value of the affected property or interfere materially with the ordinary conduct of business of Borrower (or such other Obligor, as the case may be) or any of its Subsidiaries;

1.102.5 to the extent such transactions create a Lien thereunder, liens in favor of lessors securing operating leases or sale and leaseback transactions, in each case only and to the extent such operating leases or sale and leaseback transactions are permitted under the terms of this Agreement, or which are otherwise now or hereafter consented to in writing by Lender (such consent not to be unreasonably withheld or delayed);

1.102.6 any Lien existing on any property or assets prior to the acquisition thereof by Borrower (or such other Obligor, as the case may be) or any of its Subsidiaries or existing on any property or assets of any Person that becomes a Subsidiary of Borrower (or such other Obligor, as the case may be) or any of its Subsidiaries after the Effective Date prior to the time such Person becomes a Subsidiary of Borrower (or such other Obligor, as the case may be) or any of its Subsidiaries; provided that : (i) such Lien is not created in contemplation of, or in connection with, such acquisition or such Person becoming a Subsidiary, as the case may be; (ii) such Lien shall apply to the same category, type and scope of assets; and (iii) such Lien shall secure only those obligations which it secures on the date of such acquisition or the date such Person becomes a Subsidiary, as the case may be, and any refinancing, refunding, extension, renewal or replacement thereof that does not increase the outstanding principal amount thereof plus any accrued interest, premium, fee and reasonable and documented out-of-pocket expenses payable in connection with any such refinancing, refunding, extension, renewal or replacement;

1.102.7 any and all now or hereafter Liens in favor of Lender or any Affiliate of Lender;

1.102.8 Liens (i) specified on Exhibit A , as it may be amended from time to time in accordance herewith; and/or (ii) which have been both disclosed in writing by Borrower (or such other Obligor, as the case may be) to Lender, and expressly permitted to exist in a writing by an officer of Lender; and

1.102.9 subject to the terms and conditions of the Loan Documents, purchase money security interests (each individually, a “ PMSI ”, and collectively, “ PMSIs ”) on any hereafter acquired asset(s) incurred by Borrower (or other Corporate Obligor, as the context may provide) in connection with any conditional sale or other title retention agreement or a financing lease; provided , however , that, except as otherwise now or hereafter consented to in writing by Lender (such consent, in each case, not to be unreasonably withheld, conditioned or delayed, but, in any event, granted, withheld and/or conditioned in Lender’s sole but reasonable discretion and in the exercise of commercial good faith): (i) such PMSIs granted to acquire such assets do not secure not more than eighty percent (80 . 00%) of the purchase price thereof; (ii) the acquisition of any such assets does not violate the provisions of this Agreement or any other of the Loan Documents; (iii) the acquisition of any such assets is made by Borrower (or other Obligor, as the case may be) in the ordinary course of Borrower’s (or other Obligor’s, as the case may be) business as conducted on the Effective Date; (iv) any PMSI on any such assets attaches to such assets concurrently, or within thirty (30) days after, the acquisition thereof; (v) each such PMSI shall attach only to the assets (and applicable proceeds) so acquired, or is a PMSI incurred in connection with the construction or improvement of fixed or capital assets ( e.g. , Capital Expenditures); and (vi) the total obligations secured by any such PMSIs shall not secure more than O ne H undred T housand and 00/100 D ollars ($100,000 . 00) in the aggregate.

1.103      “ Person ” means, individually and/or collectively as the context may require or otherwise specify, any: (i) individual or so-called ‘natural person’; (ii) sole proprietorship; (iii) limited liability company, limited company, holding company or any other kind of company; (iv) corporation, unlimited corporation, nonprofit corporation, municipal corporation or any other kind of corporation; (v) general partnership, limited partnership, limited liability partnership or any other kind of partnership; (vi) joint stock association, association or any other kind of association or any cooperative; (vii) Governmental Authority; (viii) trust, business trust, statutory trust, realty trust, real estate investment trust or any other kind of trust; (ix) estate of any kind (including in any Insolvency Proceeding); or (x) other entity, organization or association of any kind or nature; and in the case of any of the immediately preceding subclauses (i) – (x), whether created by or pursuant to statute, common law or otherwise.

1.104      “ Personal Guarantor ” and “ Personal Guarantors ” mean, both individually and/or collectively as the context may require, and jointly and severally, any and all of: (i) S teven R otman , an individual and natural person, and an Affiliate of each of the other Obligors; and (ii) any one or more other natural persons from time to time (whether now or hereafter) executing and delivering to Lender a Guaranty.

1.105      “ Plan ” means, at any one time, any “employee benefit plan” that is covered by ERISA and in respect of which Borrower or an ERISA Affiliate is (or, if such plan were terminated at such time, would under §4062 or §4069 of ERISA be deemed to be) an “employer” as defined in §3(5) of ERISA.

1.106       “ PMSI ” has the meaning given to such term in Section 1.102.9 .

1.107       “ Primary Market ” has the meaning given to such term in Section 1.108 .

1.108       “ Principal Trading Market ” means the OTC Bulletin Board (it being understood that as used herein “ OTC Bulletin Board ” shall also mean any successor or comparable market quotation system or exchange to the OTC Bulletin Board, or any other over-the-counter market or exchange on which securities that have been assigned a ticker symbol by the Financial Industry Regulatory Authority in the United States of America are traded, such as the OTCQB operated by the OTC M arkets G roup , I nc . (individually or collectively, as the context may require, “ OTC Market ”)); provided , however , that in the event that Vystar’s Common Stock is ever listed or traded on the (i) Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, NYSE MKT LLC, the New York Stock Exchange or the NYSE Amex, or (ii) any of the respective successors or replacements to the exchanges and markets referenced in the immediately preceding clause (i), respectively (the markets and exchanges referenced in the immediately preceding clauses (i) – (ii), individually or collectively, as the context may require, the “ Primary Market ”), then the “ Principal Trading Market ” shall, for purposes hereof, mean the Primary Market on which Vystar’s common stock is then listed or traded.

1.109       “ Projections ” has the meaning given to such term in Section 5.20 .

1.110       “ Property ” and “ Properties ” mean, both individually and/or collectively as the context may require or specify, any and all leasehold interests or fee simple interests (as case may be) in any real property at, upon or within which Borrower or any other Corporate Obligor, and/or any of Corporate Obligors’ respective Subsidiaries, operates or conducts all or any part of its business, or otherwise maintains all or any part of its facilities or any Collateral.

1.113       “ Ratio Covenants ” has the meaning given to such term in Section 6.5 .

1.114       “ Re-IPO ” means, at any time after the Effective Date, the sooner to occur of the following: (i) the closing and/or consummation of any transaction (or series of transactions) entered into or acquiesced in by any Corporate Obligors and/or any of their respective Affiliates, the effect of which directly causes or results (upon such closing and/or consummation or otherwise substantially contemporaneously therewith) in the initial listing or trading of any of Vystar’s common stock or other Equity Interests on any Primary Market, irrespective of whether any such transaction (or series of transactions) is planned or contemplated by Borrower, any other of the Obligors and/or any of the Obligors’ respective Affiliates on the Effective Date; or (ii) any Obligors’ or any of their Affiliates’ respective receipt of any letter or other communication from any Primary Market in which it is confirmed on behalf of the board of directors and/or other management authority of such Primary Market that it has authorized the listing of any of Vystar’s common stock or other Equity Interests on such Primary Market.

1.115       “ Re-IPO Documents ” means, individually and/or collectively as the context may require, any and all agreements, contracts, instruments or other documents (including, without limitation, to which any investment bank is a party, and any engagement letters, letters of intent, agency letters or agreements, prospectuses, underwriting agreements and/or side letters) made, executed, authorized and/or entered into (or, as the case may be or context may require, to be made, executed, authorized and/or entered into) by any Corporate Obligor and/or Subsidiary thereof that directly or indirectly relates to any Re-IPO ( if any ) and/or any transaction (or series of transactions) which, upon the closing or consummation thereof, would or does effectuate or cause the same, together with any and all exhibits, schedules and other addenda from time to time attached thereto, as any such agreements, contracts, instruments or other documents are amended, restated, supplemented, addended and/or otherwise modified from time to time.

1.116       “ Recitals ” has the meaning given to such term in the last paragraph on Page 2 of this Agreement.

1.117       “ Regulation GG ” means the Unlawful Internet Gambling Enforcement Act of 2006 (12 C.F.R. 233 et seq .; enacted as Title VIII of the Security and Accountability For Every Port Act of 2008 (Pub. L. No. 109–347, 120 Stat. 1884), and codified at 31 U.S.C. §§5361–5367, as amended.

1.118       “ Release ” means, individually and/or collectively as the context may require or specify, any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, storing, escaping, leaching, dumping, discarding, burying, abandoning or disposing any Hazardous Materials into the environment.

1.119       “ Reportable Event ” means, individually and/or collectively as the context may require or specify, any one or more of the events set forth in §4043(c) of ERISA, other than those events as to which the thirty (30) day notice period is waived as provided in 29 U.S.C. § 1343 et seq .

1.120       “ Requirements of Law ” means, as to any Person, and both individually and/or collectively as the context may require, any law (including any one or more common laws), statute, ordinance, treaty, rule, regulation, order, decree, judgment, writ, injunction, settlement agreement, requirement, directive or determination or decision of or by any arbitrator or court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property, or to which such Person or any of its property is otherwise subject or bound by.

1.121       “ Responsible Officer ” means, with respect to any Person that is not a natural person, the chief executive officer, president (or, as the context may provide, the manager, general partner, trustee, executive director, legal representative or executor) or chief financial officer of such Person; provided , however , that that with respect to financial matters concerning any Corporate Obligor (including, without limitation, any Borrowing Base Certificate), the Responsible Officer shall be the chief financial officer or treasurer of such Corporate Obligor.

1.122       “ Restricted Payments ” has the meaning given to such term in Section 7.3 .

1.123       “ Revolving Advance ” means each advance of the proceeds of the Loan requested by Borrower, and made by Lender, pursuant, subject to and in accordance with the terms and conditions hereof; and “ Aggregate Revolving Advances ” means, at any time, the aggregate outstanding principal amount of all Revolving Advances made and advanced by Lender to Borrower hereunder.

1.124       “ Rotman Family Notes ” means, both individually and/or collectively as the context may require, any and all now or hereafter existing promissory notes (whether convertible or otherwise) and/or other instruments or documents evidencing any Indebtedness of any Corporate Obligor or any of their respective Subsidiaries to any one or more of (i) Steven Rotman, (ii) Bernard Rotman, (iii) Barry Rotman, (iv) Gregory Rotman, or (v) Jamie Rotman; and all of which such Indebtedness shall be or become Subordinated Indebtedness and, in each case, the holder thereof shall enter into, execute and deliver a Subordination Agreement.

1.125       “ Rotmans ” has the meaning given to such term in the preamble.

1.126       “ S&P ” means Standard & Poor’s Ratings Services, a division of T he M c G raw -H ill C ompanies , I nc ., and any successor thereto.

1.127       “ Sanctions ” means, sanctions administered or enforced by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), U.S. Department of State, United Nations Security Council or any other relevant sanctions authority.

1.128       “ SEC ” means the Securities and Exchange Commission (or successors thereto or an analogous Governmental Authority).

1.129       “ Securities Act ” means the Securities Act of 1933, or any successor federal statute, and the rules and regulations of the SEC (or, as the case may be, any other Governmental Authority) thereunder, as the same may be amended from time to time.

1.130       “ Security Agreement ” means that certain Security Agreement, dated as of the Effective Date, by and between the Parties, pursuant to which Borrower has granted one or more Liens to, and in favor and for the benefit of, Lender on all of Borrower’s business assets and personal property, together with any and all exhibits, schedules, supplements and/or other addenda now or at any time hereafter attached thereto, in each case as amended, restated, reaffirmed, ratified, supplemented and/or otherwise modified from time to time, including, without limitation, as supplemented, addended and/or otherwise modified by any one or more supplemental security agreements of any kind, and/or by any one or more joinders or additional signature pages of any Guarantors or other Obligors, thereto.

1.131       “ Security Instruments ” means, both individually and/or collectively as the context may require: (i) any and all Mortgages; (ii) the Security Agreement; and (iii) any and all agreements, instruments, mortgages, pledges, hypothecations, assignments (whether collateral or otherwise) and/or other documents now or hereafter executed and delivered by any one or more Obligors (together with any and all exhibits, schedules, supplements and/or other addenda thereto) that grant to, or create or establish in favor or for the benefit of, Lender (and/or any Affiliate of Lender) any one or more now or hereafter existing or arising Liens with respect to any real or personal property of any such Obligor (whether tangible or intangible; including the Collateral), and which secure the Obligations (or any part thereof, as may be more particularly set forth therein), in each case as amended, restated, ratified, reaffirmed, supplemented, addended, replaced, renewed, consolidated and/or otherwise modified from time to time.

1.132       “ Senior Funded Debt ” means the aggregate Indebtedness of Borrower for borrowed money, for the deferred purchase price of property not purchased on ordinary trade terms, for Capital Lease Obligations and for other liabilities evidenced by promissory notes or other instruments, but expressly excluding any Indebtedness under the Rotman Family Notes or any other Subordinated Indebtedness.

1.133       “ Senior Funded Debt Ratio ” means, for, during and with respect to any specified period being tested by Lender (as may be further specified in Section 6.5 ), the ratio obtained by dividing (A) by (B): (A) Senior Funded Debt; divided by (B) the Tangible Capital Base of Borrower.

1.134       “ Single Employer Plan ” means any Plan that is covered by Title IV of ERISA, other than a Multiemployer Plan.

1.135       “ SNDA ” has the meaning given to such term in Section 4.2.11 .

1.136       “ Solvent ” means, with respect to any Person on a particular date, that on such date (i) the present fair salable value of the property and assets of such Person exceeds the debts and liabilities, including contingent liabilities, of such Person, (ii) the present fair salable value of the property and assets of such Person is greater than the amount that will be required to pay the probable liability of such Person on its debts and other liabilities, including contingent liabilities, as such debts and other liabilities become absolute and matured, (iii) such Person does not intend to incur, or believe (nor should it reasonably believe) that it will incur, debts and liabilities, including contingent liabilities, beyond its ability to pay such debts and liabilities as they become absolute and matured, and (iv) such Person does not have unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

1.137       “ Subordinated Indebtedness ” means any and all Indebtedness of any kind or nature that Borrower, any other Corporate Obligor and/or any of the respective Subsidiaries owes to any Person other than Lender or any Affiliate of Lender (whether now existing or hereafter created or incurred; and, in any case, if permitted to exist by Lender in its sole discretion or otherwise expressly permitted to exist pursuant to the terms and conditions hereof or any other of the Loan Documents), the repayment of which (and any Liens securing such repayment) is (or, at Lender’s option, exercisable in its sole but reasonable discretion at any time upon Lender’s written notice to Borrower shall be) subordinated to the Infeasible Satisfaction of the Obligations and, as the case may be, to the priority of all Liens in favor of Lender securing the same, pursuant to a written Subordination Agreement.

1.138       “ Subordination Agreement ” means, in each case, a written agreement by and among Lender, the holder of any Subordinated Indebtedness and such Corporate Obligors or their respective Subsidiaries so indebted to such holder, in form and substance satisfactory to Lender in its sole discretion, pursuant to which such Subordinated Indebtedness (and, as the case may be, any Liens securing the repayment thereof) is subordinated to the Infeasible Satisfaction of the Obligations and the priority of all Liens in favor of Lender securing such Indefeasible Satisfaction.

1.139       “ Subsidiary ” as to any Person, means any corporation, partnership, limited liability company, joint venture, trust or estate of or in which more than fifty percent (50 . 00%) of (i) the issued and outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether at the time capital stock of any other class of such corporation may have voting power upon the happening of a contingency), (ii) the interest in the capital or profits of such partnership, limited liability company or joint venture, or (iii) the beneficial interest in such trust or estate is at the time directly or indirectly owned or controlled through one or more intermediaries, or both, by such Person. Unless otherwise qualified, all references to a “ Subsidiary ” or to “ Subsidiaries ” in this Agreement shall refer to a Subsidiary or Subsidiaries of all or any part of the Corporate Obligors.

1.140       “ Tangible Capital Base ” means for, during and with respect to any specified period being tested by Lender (as may be further specified in Section 6.5 ), the aggregate sum of (A) minus (B): (A) Borrower’s stockholders’ equity in Borrower and its Subsidiaries, plus any Subordinated Indebtedness permitted to exist after the Closing by Lender, plus deferred tax liabilities, minus (B) intangible assets (including, without limitation, unamortized product developments costs, goodwill and other Intellectual Property, and unamortized debt issuance costs), all as determined from the most recent Financial Statements of Borrower delivered to Lender.

1.141       “ Temporary Accommodation ” has the meaning given to such term in Section 11.25.2(a) .

1.142       “ Threat of Release ” shall mean a substantial likelihood of a Release which requires action to prevent and/or mitigate damage to the environment which may result from such Release.

1.143       “ UCC ” has the respective meaning ascribed to such term in the Security Agreement, and such term is incorporated herein by this reference. Except as otherwise defined or indicated by the context herein, all terms which are defined in the UCC shall have their respective meanings as used in Article 9 of the UCC; provided , however that if a term is defined in Article 9 of the UCC differently than in another Article of the UCC, the term has the meaning specified in Article 9 of the UCC.

1.144       “ unwaived ” has the meaning given to such term in Section 8.2 .

1.145       “ USD ” and “ Dollars ” each mean and refer to the lawful currency of the United States of America; and any specified amount or sum prefaced with the symbol “ $ ” indicates that such amount or sum is denominated in USD.

2.1           Incorporation of Recitals . The Parties hereby agree that the Recitals (including, without limitation, all defined terms and their respective meanings set forth therein) are all expressly incorporated into this Agreement, and made a part hereof, by this reference.

2.2           Accounting; GAAP . Any and all accounting terms used or referenced in any Loan Document, which are not specifically or completely defined in such Loan Document, shall, unless the context otherwise specifies, be construed in accordance with GAAP. All financial statements and other financial data or information submitted or furnished (or caused to submitted or furnished) by Borrower (and/or any other Obligors) pursuant to any Loan Document shall, unless otherwise therein expressly specified or required from time to time by Lender, be prepared in conformity with GAAP.

2.3           The Note; Loan Proceeds; Loan Amount . Subject to the terms and conditions of the Loan Documents, Lender will disburse and/or advance from one or more of its offices in Massachusetts the proceeds of the Loan (such proceeds, the “ Loan Proceeds ”) to or on behalf of Borrower in accordance the provisions set forth in Article 3 below , and, in any event, a manner satisfactory to Lender. The Parties agree that the Loan established by Lender under Section 3.1 below shall be evidenced by, and, at or as of any specified date or time, the Face Amount thereof shall be as then-stated on or -provided by the terms and conditions of, the Note ( including, without limitation, such terms and conditions in Section 8.11 thereof ).

2.4           Interest on the Loan . Subject to the terms and conditions of the Loan Documents (including, without limitation, Section 2.9 below ), interest on the Loan shall be (i) paid at the rate and in the manner, and shall be calculated as more particularly, set forth in the Note; and (ii) calculated on the basis of a 360-day year, counting the actual number of days elapsed.

2.5           Payments Under the Note . Borrower shall make timely payments under the Note, as and when due, in accordance with the terms thereof. If the Note, or any payment thereunder or under any other of the Loan Documents, becomes due on a day which is not a Business Day, the due date of such Note or such payment shall be extended to the next succeeding Business Day, and such extension of time shall be included in computing interest and fees in connection with such payment.

2.6           Statements of Amounts Due . Lender from time to time may send or electronically transmit (or cause to be sent or electronically transmitted, including through an automated system) to Borrower statements of amounts due under the Note, each of which shall be considered correct and conclusively binding on Borrower, absent manifest error, unless Borrower notifies Lender in writing to the contrary within thirty (30) days after Borrower’s receipt of any such statement that Borrower deems incorrect.

2.7           Automatic Payments; Authorization . In consideration of, and as an inducement to Lender to make and extend, the Loan or any part thereof, Borrower hereby: (i) expressly authorizes and grants the right to Lender, without liability or obligation on Lender’s part (except in the event of Lender’s gross negligence, fraud or willful misconduct), to debit from time to time from the Operating Account (whether through an automated system, initiation of an ACH debit or otherwise) the amount(s) of any one or more payments as and when due to Lender by Borrower under the Note and/or under any other of the Loan Documents (individually and collectively, “ Automatic Payments ”), irrespective of the occurrence or non- occurrence of any Event of Default, and without limiting any rights of setoff Lender may have under any Loan Documents; (ii) acknowledges and agrees that if the funds in the Operating Account are insufficient to cover any such Automatic Payment, Lender shall not be obligated in any way to advance funds to cover any such deficiency; and (iii) acknowledges and agrees that at any time, for any reason, Lender may voluntarily terminate Automatic Payments without any liability or obligation on Lender’s part (except in the event of Lender’s gross negligence, fraud or willful misconduct), and may thereafter notify Borrower of such voluntary termination; provided , however , that any failure of Lender to charge any Automatic Payments or to give Borrower any notice of any such charge or voluntary termination, shall not affect the absolute and unconditional obligation of Borrower to punctually pay all amounts due under the Note and the other Loan Documents in accordance with their respective terms. Lender may at Closing, and/or at any time(s) thereafter, provide Borrower with an ‘automatic payment authorization form’ (or similarly titled document) to further memorialize the agreements, consents and authorizations made and granted under this Section 2.7 ; provided , however , that any failure by any Party to provide, deliver, sign, countersign and/or return any such form shall in no way whatsoever diminish any of the rights, powers and remedies of Lender under this Agreement (including under this Section 2.7 ), the Note and/or any other of the Loan Documents.

2.8           Governmental Charges . All payments made by any Obligor in connection with any and all Obligations shall be made in cleared funds and in immediately available USD, without any set-off or counterclaim on account of, and free and clear of, and without withholding or deduction for, any taxes, assessments, charges, levies, imports, duties, restrictions, conditions or withholdings of any kind whatsoever that may be now or hereafter imposed thereon by any Governmental Authorities (collectively, “ Governmental Charges ”). If any payment made to Lender in connection with any of the Obligations is subject to any such Governmental Charges, Borrower shall and hereby agrees to immediately pay to Lender such additional amounts as are necessary to ensure receipt by Lender of the full and entire amount which Lender would have otherwise received but for the imposition of any such Governmental Charges. Borrower shall and hereby agrees to, within thirty (30) days after Borrower making any payment to any Governmental Authorities on account of the imposition of any Governmental Charges, deliver to Lender written evidence reasonably satisfactory to Lender that such Governmental Charges are paid in full.

2.9           Usury . All agreements between or among Lender and the Obligors are hereby expressly limited so that in no circumstance, contingency or event whatsoever, whether by reason of acceleration of maturity of any Indebtedness constituting any part of the Obligations or otherwise, shall the amount of interest paid or agreed to be paid to Lender for the use of any Loan Proceeds (or otherwise in respect of any credit or other financial accommodations extended under any Loan Documents) exceed the maximum amount permissible under applicable law. For purposes of this Section 2.9 (only), the term “ applicable law ” shall mean the law in effect in Massachusetts as of the Effective Date; provided , however , that in the event there is a change in the law which results in a higher permissible rate of interest, then the Note shall be governed by such new law as of its effective date. If, under or from any circumstances whatsoever, fulfillment of any provision of any of the Loan Documents shall, at the time when performance of such provision shall be due, involve exceeding the limit of such validity prescribed by applicable law, then the obligation to be fulfilled shall automatically be reduced to the limits of such validity; and, if under or from any circumstances whatsoever Lender should ever receive as interest an amount which would exceed the highest lawful rate, such amount which would be excessive interest shall be applied to the reduction of the then-outstanding principal balance under the Note evidencing the obligation or Indebtedness to be fulfilled or repaid, and not to the payment of interest. This Section 2.9 shall control every other provision of, and shall be deemed expressly incorporated, mutatis mutandis , into, any and all agreements between or among any one or more of the Obligors and Lender.

2.10         Bringdown Certificate . At any time or times while any Obligations are outstanding, Lender may in its sole but reasonable discretion require Borrower to deliver to Lender a certificate (or similar document on Borrower’s letterhead; each, a “ Bringdown Certificate ”), dated as of the date so specified by Lender, signed by a Responsible Officer of Borrower, and certifying that as of such date: (i) no Event of Default has occurred that has not been waived by Lender, nor would any Event of Default result, and no event has occurred that, but for the giving of notice or passage of time or both, would constitute an Event of Default; (ii) no Material Adverse Change has occurred since the date of the most recently-delivered (to Lender) financial statements of Borrower; (iii) each of the representations and warranties contained in this Agreement and all other of the Loan Documents is true and correct in all material respects (except that any representation or warranty which by its express terms is made as of an earlier date shall be true and correct as of such earlier date); (iv) Borrower is in compliance with the covenants set forth in this Agreement and all other of the Loan Documents, and is in compliance with all of its Contractual Obligations, except where failure to comply could not reasonably be expected to result in a Material Adverse Change; and (v) all of the Loan Documents remain in full force and effect.

3.1         Establishment of the Loan . Subject to the terms and conditions of this Agreement (expressly including, without limitation, Sections 3.5 and 11.25 hereof), the Note and all other of the Loan Documents, Lender hereby establishes a revolving demand line of credit loan facility for the benefit of Borrower in the Face Amount of the Note (the “ Loan ”; and which such Face Amount of such Loan and the Note evidencing the same will be reduced, subject in any event to (and in accordance with) the terms and conditions of Section 8.11 of the Note and Section 11.25 below , and such reduction is hereby expressly acknowledged, agreed to, confirmed and ratified by Borrower), and agrees to make Revolving Advances of available, unadvanced Loan Proceeds to Borrower from time to time in such amounts as Borrower may request in accordance with the terms and conditions hereinbelow set forth, provided that : (i) Borrower shall have fully complied with each and all of its covenants and agreements under the Loan Documents; (ii) no Event of Default that has not been waived by Lender shall have occurred (nor shall there exist any conditions or event which, with the giving of notice or lapse of time, or both, would constitute an Event of Default); (iii) Borrower shall have fully paid any and all charges then due to, and any and all then- unreimbursed or unpaid Costs and Expenses incurred by, Lender or Lender’s Affiliates, and/or their respective consultants, agents, attorneys and/or representatives, in connection with all or any part of the Obligations and/or any Collateral; (iv) Borrower and its Aggregate Revolving Advances hereunder shall be in compliance with the Borrowing Base, and any such Revolving Advance so requested by Borrower, when taken together with Aggregate Revolving Advances, would not otherwise exceed the Borrowing Base; (v) no Overadvance shall exist with respect to the Loan unless expressly permitted in writing by Lender (in each instance); and (vi) Lender shall not have made DEMAND on the Note (in accordance with the DEMAND character thereof).

3.2         Closing Costs Advance . Subject to the terms and conditions of this Agreement, upon the written request of Borrower made prior to Closing submitted together with a Borrowing Base Certificate, and provided that Borrower has sufficient availability under the Loan and has not would not exceed the Borrowing Base, Lender hereby agrees to make a single Revolving Advance to Borrower at Closing to be used and applied by Borrower solely for Lender-approved (in its sole but reasonable discretion) Costs and Expenses incurred by Borrower directly in connection with the Closing and/or in relation to the Purpose.

3.3            Revolving Nature of the Loan . The credit facility established under Section 3.1 above is a revolving DEMAND line of credit facility such that, subject to the limitations and provisions of such Section 3.1 and of Section 11.25 below , and the Obligors’ compliance with all of terms and conditions of all Loan Documents to which they are a party (respectively), and prior to occurrence of (i) Lender’s DEMAND on the Note (in accordance with the DEMAND character thereof), or (ii) any Event of Default that is unwaived, Borrower may borrow, repay and reborrow Revolving Advances. For the avoidance of doubt, and notwithstanding anything in this Agreement or in any other of the Loan Documents to the contrary, nothing contained herein or therein shall ever be construed to permit or afford Borrower any right to request or obtain, nor in any way whatsoever obligate Lender to make, disburse, fund or credit any Revolving Advance after the occurrence of the immediately preceding subclauses (i) and/or (ii).

3.4            Use of Revolving Advances; Security . Borrower shall and hereby expressly agrees to use each Revolving Advance hereunder made by Lender only in accordance with the Purpose. The repayment of the Aggregate Revolving Advances, and all Indebtedness constituting and/or otherwise under the Loan and the Obligations, shall be secured the Liens of the Security Instruments on a cross-collateralized basis.

3.5            Borrowing Base . Notwithstanding anything herein or in any other Loan Document to the contrary (including, without limitation, elsewhere in this Article 3 ), Aggregate Revolving Advances made by Lender to Borrower in accordance with this Agreement shall in all events be limited to the maximum sum of (such sum collectively, the “ Borrowing Base ”):

(a)       fifty percent (50 . 00%) of Eligible Inventory.

3.6            Mechanics of Requesting and Funding Revolving Advances . Subject to the terms and conditions of this Agreement, Lender will (i) make such Revolving Advances as Borrower may request from time to time by reasonable same Business Day written notice received by Lender, together with a Borrowing Base Certificate, not later than 1 : 00 P.M. (Massachusetts time) of such Business Day; and (ii) credit each such Revolving Advance so requested by Borrower to the Operating Account of Borrower (or the applicable Borrower so requesting or specified, as the case may be). Lender hereby expressly reserves the right in its sole but reasonable discretion to at any time or times condition any one or more Revolving Advances upon Borrower’s prior delivery to Lender of invoices, statements, a Bringdown Certificate and/or any other information or documentation contemplated by Section 6.4.4 below .

3.7            Letters of Credit .

3.7.1 Subject to, and upon, the terms and conditions of this Agreement and all other of the Loan Documents, and provided that all of the conditions set forth in subclauses (i) – (v) of Section 3.1 above are then-satisfied, Lender hereby agrees, until demand on the Note and/or the occurrence of any Event of Default which is not waived by Lender, to issue and/or otherwise facilitate for the account and on behalf of Borrower one or more letters of credit (including, without limitation, standby letters of credit, as the case may be from time to time; each individually, a “ Letter of Credit ” and collectively, “ Letters of Credit ”), with such Letters of Credit and any credit availability amounts set forth therein to be determined on the basis of the unadvanced portions of the Loan.

3.7.2 As a condition precedent to Lender’s obligation to issue any Letter of Credit hereunder, Borrower shall pay to Lender any and all standard issuance fees then in-effect (in accordance with any then-applicable policies and procedures of Lender), and shall pay, on demand and in immediately available funds, any and all other Costs and Expenses charged or incurred by Lender with respect to any Letter of Credit. Any Costs and Expenses charged or incurred by Lender shall: (i) be due and payable immediately upon demand therefor; (ii) bear interest at the Default Rate from the date of Lender’s demand therefor until the same is repaid to Lender in full; (iii) be a part of the Obligations; and (iv) be secured on a cross-collateralized basis by the Liens of the Security Instruments and the other Loan Documents.

3.7.3       Each Letter of Credit shall be in form and substance satisfactory to Lender and in favor of beneficiaries that are satisfactory to Lender in its sole but reasonable discretion. Lender hereby reserves the right to refuse, in its sole but reasonable discretion, to issue a Letter of Credit (i) due to the nature or the terms of any underlying transaction in connection with such issuance; or (ii) in connection with any transaction where Lender, due to the beneficiary or the nationality or residence of the beneficiary, would be prohibited by any Requirements of Law (including, without limitation, any Anti-Terrorism Law) from issuing such Letter of Credit.

3.7.4       Borrower may request the issuance of Letters of Credit by reasonable same Business Day written notice received by Lender, together with a Borrowing Base Certificate, not later than 10 : 00 A.M. (Massachusetts time) of such Business Day. Prior to the issuance of each Letter of Credit, but in no event later than 10 : 00 A.M. (Massachusetts time) on the Business Day such Letter of Credit is to be issued, Lender shall receive from Borrower Lender’s standard form of application for issuance of a letter of credit with proper insertions, duly executed by a Responsible Officer of Borrower.

3.7.5       Upon receipt from any beneficiary under a Letter of Credit of a demand for payment under such Letter of Credit (each, a “ Drawing ”), Lender shall provide Borrower with prompt notice of the same. Borrower hereby covenants and agrees to immediately reimburse Lender, in full and in cash, for any and all amounts paid by Lender pursuant to any Drawing; provided , however , that subject to the terms and conditions hereof and the other Loan Documents, Lender shall allow any such Drawing to constitute a Revolving Advance hereunder (provided there are sufficient unadvanced portions of the Loan and the Borrowing Base is not exceeded) and such Revolving Advance shall bear interest at the rate and in the manner set forth in the Note.

3.7.6       Upon Lender making demand on the Note and/or the occurrence of any Event of Default which is not waived by Lender in accordance herewith, no Letters of Credit shall be issued and/or otherwise facilitated for and/or on behalf of Borrower.

3.8            Overadvances . For the avoidance of doubt, it is the express intention of the Parties that, at any one time outstanding, Aggregate Revolving Advances shall not exceed the Face Amount of the Note; and if, at any time, any excess shall for any reason whatsoever exist (such excess, in each instance, “ Overadvance ”), the full amount of such Overadvance, together with all accrued and unpaid interest thereon (which such interest the Parties hereby acknowledge and agree shall accrue at the Default Rate set forth in the Note, pursuant and subject to Section 4.4 thereof), shall be immediately due and payable to Lender, without the necessity of further action of any kind on the part of Lender (including, without limitation, notice, demand or presentment—all of which are hereby expressly waived by Borrower to the maximum extent permitted by Requirements of Law). In the event any Overadvance shall exist, Borrower hereby agrees and acknowledges that Borrower shall in no event request, and Lender shall not be under any obligation whatsoever to make, any further Revolving Advances unless and until such Overadvance (and all such accrued interest thereon) is fully repaid in accordance with this Section 3.8 .

3.9            Protective Advances . Irrespective of whether all or any portion of the Loan Proceeds have been advanced to or for the benefit of Borrower, Lender may at any time or times, in Lender’s sole and absolute discretion, make (but Lender shall not be obligated to make) any one or more advances or disbursements (in each instance, a “ Protective Advance ”) to: (i) discharge any Liens at any time levied or placed upon any Collateral (except for Permitted Liens), or to prevent the same; (ii) pay for any Costs and Expenses incurred by Lender or Lender’s Affiliates, attorneys agents and/or representatives in connection with any maintenance and/or preservation of any Collateral, or the perfection of any Liens thereon; and/or (iii) pay any applicable insurance premiums, and/or any taxes or other Governmental Charges, in connection with any Obligations and/or any maintenance, protection or preservation of the any Collateral. Any Protective Advance made by Lender shall: (A) be due and payable immediately upon demand therefor; (B) bear interest at the Default Rate from the date of Lender’s demand therefor until the same is repaid to Lender in full; (C) be a part of the Obligations; and (D) be secured on a cross-collateralized basis by the Liens of the Security Instruments and the other Loan Documents.

3.10            Legal Matters . At Lender’s option, and in its sole but reasonable discretion, at the time or upon the occurrence of (i) any subsequent disbursement or advance by Lender to be made after the Closing (if any; including, without limitation, of any Revolving Advance and/or any Protective Advance), (ii) any delivery or receipt of documentation and/or other information by or from any Obligor required hereunder or under any other of the Loan Documents from time to time, and/or (iii) any Event of Default, all legal matters incidental thereto shall be subject to review by Lender’s legal counsel, and the Costs and Expenses incurred by such legal counsel with respect to any such review shall be the sole and exclusive obligation of Borrower, and the same shall be paid in full by Borrower (A) in the case of the immediately preceding subclause (i) or (ii) above, within ten (10) days after Lender’s demand therefor; and (B) in the case of the immediately preceding subclause (iii) above, immediately upon Lender’s written demand therefor.

4.              CONDITIONS PRECEDENT .

4.1        Operating Account . As a condition precedent to Lender furnishing any Loan Proceeds and effectuating the Closing, to the extent not already accomplished and in effect, each of Rotmans and Vystar shall, open and establish their sole and exclusive Operating Accounts, respectively, with Lender on or prior to the Effective Date.

4.2        Required Deliverables to Close . The obligation of Lender to enter into any Loan Documents, make any advances of Loan Proceeds to Borrower (whether at Closing or otherwise), and/or otherwise make or extend any other credit accommodations to Borrower, is conditioned upon Borrower’s (or Borrower causing the) delivery or payment or issuance to, or completion of and for, Lender (as applicable), on or prior to the Closing (unless another date, time or period of time is expressly specified below in this Section 4.2 ), all of the following at Borrower’s sole and exclusive Cost and Expense:

4.2.1     the payment of any Commitment Fee;

4.2.2     the Note, the Security Instruments, any and all Guaranties, the HazMat Agreement, the Compliance Agreement, a “ Signature Specimen and Identity Verification Certificate ” for each Personal Guarantor (on Lender’s form), a “ Beneficial Ownership Certification Form ” (or similarly titled document; in each case in the form provided by Appendix A to 31 CFR Part 101.230) for Borrower, and any and all other Loan Documents required or contemplated to be executed or delivered on the Effective Date, together with any and all certificates and/or other deliverables therein required, and fully completed Schedules, Exhibits and/or other addenda to each such Loan Document prepared by Borrower and/or its counsel (as applicable);

4.2.3     certified title report(s) with respect to each Mortgaged Property, together with all underlying title due diligence documents other and all other material documents affecting the Mortgaged Property, prepared by a title examiner satisfactory to Lender’s counsel, and, in any event, acceptable to Lender in its sole but reasonable discretion;

4.2.4     an ALTA survey or so-called ‘plot plan’ with respect to each Mortgaged Property, in each case sufficient to delete all survey exceptions from, and sufficient to support any and all zoning and related endorsements to, the mortgagee’s title insurance policy or policies delivered to Lender pursuant to Section 4.3.1(c) below , and is prepared by a registered engineer or registered land surveyor who certifies thereon: (i) that all buildings and other improvements upon or located at the Mortgaged Property are in compliance with all zoning laws and regulations, building codes, Environmental Laws and other Requirements of Law applicable to the Mortgaged Property and the use(s) thereof; (ii) that applicable licenses, permits and certificates of occupancy can be issued to permit the lawful use of the Mortgaged Property as contemplated by Borrower; (iii) as to the location of all easements, improvements, utilities and existing rights of way; and (iv) as to the location of the Mortgaged Property within or not within a flood hazard area;

4.2.5     satisfactory evidence that each document (including, without limitation, any Security Instruments and Financing Statements) required by the Loan Documents or any Requirements of Law, or otherwise requested by Lender in its sole discretion, to be filed, registered or recorded in order to create in favor of Lender one or more perfected Liens on the Mortgaged Property and the Collateral, prior and superior in right to any other Person (other than with respect to Permitted Liens), shall have been properly filed, registered or recorded in each applicable jurisdiction;

4.2.6     for each Corporate Obligor, a Secretary’s, General Partner’s, Manager’s or Trustee’s Certificate (as applicable), with the following attached as exhibits thereto: (i) copies of such Corporate Obligor’s Charter Documents ( provided, however , that certified copies of the constituent Charter Documents for such Corporate Obligor ( e.g. , articles or certificate(s) of organization, incorporation and/or registration) shall be delivered to Lender and its legal counsel, as the same are filed with, and in each case certified by, the secretary of state (or other comparable or applicable Governmental Authority) for each state, commonwealth, province, territory and/or other jurisdiction where such Corporate Obligor is organized, qualified and/or registered to conduct business); and (ii) a copy of such Corporate Obligor’s written consent for the execution, delivery and performance of the Loan Documents (to which such Corporate Obligor is a party, or to which it and/or its assets are otherwise bound or affected by) and each other document, certificate or instrument to be delivered pursuant hereto or thereto;

4.2.7     for each Corporate Obligor, certificates of legal existence and good standing (or comparable certificates; for example, in jurisdictions other than Massachusetts, so-called “ certificates of authority ”) issued by the secretary of state (or other comparable or applicable Governmental Authority) for each state, commonwealth, province, territory and/or other jurisdiction where such Corporate Obligor is organized, qualified and/or registered to conduct business;

4.2.8     IRS Form W-9s for each Obligor;

4.2.9     for each Corporate Obligor, either (i) a certificate of tax good standing from the department of revenue (or similarly titled office) in the state, commonwealth or other jurisdiction where such Corporate Obligor is organized, and in each other jurisdiction where such Corporate Obligor conducts business; OR (ii) a letter (on letterhead) from such Corporate Obligor’s independent certified professional accountant certifying that all federal, state and local tax returns of such Corporate Obligor required by Requirements of Law to be filed have been timely filed when due (or within any applicable extension period), and, as applicable, such Corporate Obligor has paid or provided for all taxes shown to be due on such returns (if any), together with any additional assessments with respect thereto;

4.2.10     executed copies of any and all leases, subleases, ground leases, occupancy agreements and similar agreements (including, without limitation, assignments of leases) entered into by, between or among any one or more Corporate Obligors or their respective Subsidiaries and any other Person(s) with respect to all or any part of the Properties, together with and any and all amendments, restatements, extensions, riders, exhibits and/or other addenda thereto or thereof (if any); and, with respect to any such leased Property of Borrower or any such other Corporate Obligor, a “landlord estoppel, waiver of lien and collateral access agreement” (or similarly titled document of like import and effect), duly executed by the landlord thereof and Lender;

4.2.11     with respect to each Person leasing all or any part of any Mortgaged Property from Borrower or any such other Corporate Obligor on the Effective Date, Borrower will make commercially reasonable best efforts to obtain from each such Person (i) a duly executed Tenant Estoppel Certificate, and (ii) a Subordination, Non-Disturbance and Attornment Agreement duly executed by such Person, Borrower and Lender (“ SNDA ”), in each case in form and substance satisfactory to Lender in its sole but reasonable discretion; provided , however , that notwithstanding the foregoing, in the event Borrower shall be unable to cause or otherwise effectuate delivery of each Tenant Estoppel Certificate and SNDA at or before Closing as aforesaid, Borrower shall and hereby covenants and agrees to cause the same to occur within thirty (30) days immediately after the Effective Date;

4.2.12     the Obligor Financial Statements, Projections and any other financial or business information as Lender may require in its sole but reasonable discretion;

4.2.13     pre-Closing UCC, lien, bankruptcy, judgment, pending litigation, and federal and state tax lien, search reports (together with full copies of all filings) for each Obligor prepared by a reputable, third party due diligence search provider acceptable to Lender in its reasonable discretion;

4.2.14     payoff letters, discharges and/or terminations with respect to any prior Liens on any of the Collateral (other than Permitted Liens), as required by Lender in its sole and absolute discretion;

4.2.15     executed copies of any and all agreements, instruments or other documents evidencing the terms and conditions of any and all non-Lender Indebtedness of any Corporate Obligors (including, without limitation, each and all of the Rotman Family Notes, and any Subordinated Indebtedness), all of which such Indebtedness shall be listed and identified on Exhibit C hereto together with a written summary or chart prepared by the Obligors or their respective attorneys which provides or details the (i) name and address of the holder of any such non-Lender Indebtedness, (ii) original Face Amount and current outstanding balance of such non-Lender Indebtedness and the promissory note or other instrument evidencing the same, and (iii) applicable Obligor(s) owning and/or liable (whether direct, indirect, contingent or otherwise) on account of such non-Lender Indebtedness;

4.2.16     any Subordination Agreements that Lender may require in its sole discretion, including, without limitation, Subordination Agreements in respect of (i) the Rotman Family Notes; and (ii) Permitted Liens and Indebtedness related thereto as more particularly described on Exhibit A ;

4.2.17     legal opinion(s) of the Obligors’ counsel (respectively), addressed to Lender (c/o of Lender’s counsel) and opining as to (i) the Corporate Obligors’ respective legal existence, due authorization, execution and delivery of the Loan Documents (to which they are parties); and (ii) the validity, binding nature and enforceability of the Loan Documents to which the Obligors are parties, respectively, except as limited by applicable Debtor Relief Laws affecting the enforcement of creditors’ rights generally and subject to such other customary assumptions and qualifications as may be appropriate;

4.2.18     a completed Perfection Certificate for Borrower to be attached as “ Exhibit A ” to the Security Agreement;

4.2.19     any and all other agreements, instruments or other documents required by this Agreement or any other of the Loan Documents to be delivered to Lender (or to any agent or representative of or for Lender, as the case may be) at or before the Closing; and

4.2.20     true, correct and complete copies of all ( so-called ) ‘execution-ready’ Acquisition Documents, none of which shall be executed or delivered prior to the Closing.

4.3            Certain Insurance Deliverables .

4.3.1     As a condition to Lender’s Closing the Loan and/or furnishing any Loan Proceeds or other credit accommodations to Borrower, and without limiting any terms, conditions or requirements set forth in any other of the Loan Documents concerning insurance and the policies thereof required to be carried by Borrower (expressly including, without limitation, the Security Agreement), Borrower, at its sole and exclusive Cost and Expense, hereby covenants and agrees to furnish to Lender at or prior to the Closing (or at any such other times as may be specified herein or therein) copies of certificates or binders evidencing the following insurance policies, all of which shall (i) expressly name Lender as additional insured and as loss payee pursuant to a valid lender’s loss payable clause, (ii) contain a provision requiring at least twenty (20) days’ prior written notice to Lender before any policy cancellation or modification thereof, and (iii) be in full force and effect:

(a)       personal property hazard insurance confirming that any and all improvements and Collateral located on, at or in each of the Properties are insured with fire and broad form extended coverage for the full replacement value thereof;

(b)       in respect of each Mortgaged Property, an insurance binder or insurance binders, confirming that each Mortgaged Property and the related personal property of Borrower and Collateral thereon are insured with fire and broad-form extended coverage for the full replacement value of all improvements, personal property and Collateral located on each Mortgaged Property; together with coverage for the hazards covered by an “all risk of physical loss” insurance policy, and ( as applicable ) evidence of the existence of owner’s liability and workers’ compensation insurance. Lender hereby reserves the right to request additional insurance coverages, including without limitation, public liability, business interruption, flood, earthquake, boilers and contingent liability from the operation of any building laws as they may pertain to nonconforming property. All policies shall name Lender as both first (1st) mortgagee under a standard mortgagee clause acceptable to Lender, and shall contain a provision requiring at least twenty (20) days’ prior written notice to Lender before any policy cancellation or modification;

(c)       in respect of each Mortgaged Property, a mortgagee’s title insurance commitment or commitment(s) for policy or policies in form and substance satisfactory to Lender in its sole but reasonable discretion, in each case underwritten by a title insurer acceptable to Lender in its sole discretion and issued by an authorized attorney agent thereof practicing office of Lender’s counsel. Each such title policy shall include all applicable zoning endorsements and such other endorsements as Lender shall require in its sole and absolute discretion, and all of which shall be at Borrower’s sole and exclusive Cost and Expense. Lender shall have received evidence satisfactory to Lender in its sole but reasonable discretion that all premiums in respect of each such policy, all charges for mortgage recording taxes or fees, all transfer taxes and all related expenses, if any, have been paid at Borrower’s sole and exclusive expense; and

(d)       if all or any part of any Mortgaged Property is now or hereafter located in a “special flood hazard area” (as determined pursuant to FEMA Form 81-93 or FEMA Form 086-0-32), a policy of flood insurance that (i) covers all such Mortgaged Property that is located within such special flood hazard area, (ii) is written in an amount not less than the outstanding principal amount of the Indebtedness secured by the applicable Mortgage, and is reasonably allocable, to such Mortgaged Property, or the maximum limit of coverage made available with respect Mortgaged Property under the National Flood Insurance Act of 1968, whichever is less, and (iii) has a term ending later than the maturity of the Indebtedness secured by such Mortgage.

4.3.2       Lender hereby reserves the right, in its sole but reasonable discretion, to request from time to time, and at any time, while any Obligations are outstanding additional insurance coverages, including, without limitation, business interruption, flood, earthquake and cyber terrorism coverage, in such amounts and with such endorsements and/or coverages as Lender may require in its sole but reasonable discretion and in commercial good faith.

4.4        Certain Pre-Conditions . At the time of, and as a condition to, the Closing: (i) no Event of Default shall have occurred, and no event or circumstance shall have occurred that, with the giving of notice or passage of time, or both, would constitute an Event of Default; and (ii) no Material Adverse Change shall have occurred since the dates of the most recently delivered (to Lender) financial statements of Borrower.

4.5        Condition as to Lender’s Closing Costs and Expenses . As a condition to Lender furnishing any Loan Proceeds, Borrower hereby agrees to pay to Lender (or its designee) at Closing , in full and in cash, any and all Costs and Expenses incurred by or charged to Lender, and/or Lender’s agents, attorneys, consultants and/or representatives, in connection with the negotiation, preparation, execution and/or Closing of the Loan Documents and the satisfaction of the conditions precedent set forth herein and therein (including, without limitation, any and all reasonable Costs and Expenses incurred by or charged to Lender in connection with any review, valuation, appraisal, testing, screening, examination, title insurance policy premium and/or underwriting of or pertaining to the Loan, the Loan Documents and/or any Collateral).

5.        REPRESENTATIONS AND WARRANTIES . To induce Lender to make or extend any banking, credit and/or other financial accommodations available to Borrower as provided for under the Loan Documents—and, in the case of the Effective Date, to induce Lender to consent to the Acquisition Closing and allow the same to proceed—Borrower hereby makes the following representations and warranties to Lender and its Affiliates, each of which shall be true and correct in all material respects on and as of the Effective Date and the date of each advance or disbursement of any Loan Proceeds made hereunder (except to the extent such representation expressly relates to an earlier date), and all of which shall survive the execution and delivery of this Agreement:

5.1        Recitals; Purpose . The Recitals are true, accurate and correct in all material respects. The Loan Proceeds will be used or otherwise applied only for and in accordance with the Purpose set forth in Paragraph H of the Recitals.

5.2        Existence; Organization . Each Corporate Obligor and each of its Subsidiaries (i) is a corporation, limited liability company, limited partnership or other entity, (ii) is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, (iii) has the full power and authority, and (v) has any and all necessary Permits (including, without limitation, with respect to patents, trademarks, trade names and copyrights licensed and/or granted under any agreements), to: (A) enter into, execute and deliver any and all Loan Documents to which it is a party (and/or to which it or any of its assets is otherwise subject or bound by), and to pay and/or perform all of its Obligations thereunder in accordance with their respective terms; (B) own and operate its assets and respective Properties; and (C) conduct and carry on its business as and to the extent now conducted. Each Corporate Obligor is duly qualified to transact business and is in good standing as a foreign entity in each jurisdiction where the character of its business, and/or the ownership or use and operation of its assets or respective Properties, requires such qualification. Borrower has furnished (or caused to be furnished) to Lender true, complete and correct copies of the Charter Documents of or for each of the Corporate Obligors and their respective Subsidiaries, in each case as amended (and/or restated) and as presently in-effect. Except for the documents delivered to Lender in accordance with the immediately preceding sentence, there are no other shareholder agreements, voting agreements, operating agreements, or other contracts or agreements of any kind or nature that restrict, limit or in any manner impose obligations, restrictions or limitations on the governance of Borrower or any such Corporate Obligor or Subsidiary.

5.3        Authorization . Each Corporate Obligor and each of its Subsidiaries: (i) has full right, power and authority, and all necessary and appropriate organizational action has been taken on its part, to enter into, execute and deliver, and to perform all of its obligations, liabilities and undertakings (including, without limitation and as the case may be, the Obligations) under, all of the Loan Documents to which it is a party (and/or to which it or any of its assets is otherwise subject or bound by); and (ii) is capable of performing, and will perform, all the terms and conditions of all of the Loan Documents to which it is a party (and/or to which it or any of its assets is otherwise subject or bound by), together with any and all other written instruments and documents required or contemplated herein or therein to be executed it, in order to consummate the transactions contemplated hereby or thereby.

5.4        Enforceability . This Agreement constitutes, and each other Loan Document when delivered will constitute, a legal, valid and binding obligation of each Obligor party thereto, enforceable against each such Obligor in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law). Borrower knows of no reason why the Obligors cannot perform any of their respective obligations, liabilities and undertakings (including, without limitation and as the case may be, the Obligations) under any of the respective Loan Documents to which they are a party (and/or to which they or any of their respective assets are otherwise subject or bound by).

5.5        Consents . No consent or authorization of, filing with, notice to or other act by, or in respect of, any Governmental Authority or any other Person is required in connection with the Acquisition and the extensions of credit hereunder or with the execution, delivery, performance, validity or enforceability of this Agreement or any of the Loan Documents, except for: (i) consents, authorizations, filings and notices expressly provided for herein (including as may be disclosed by Borrower in any Schedule hereto), which consents, authorizations, filings and notices have been obtained or made and are in full force and effect; and (ii) the filings referred to in Section 4.2.5 above . All applicable waiting periods in connection with the Acquisition have expired without any action having been taken by any Governmental Authority restraining, preventing or imposing materially adverse conditions upon the Acquisition or the rights of any of the Corporate Obligors or their respective Subsidiaries to freely transfer or otherwise dispose of, or to create any Lien on, any assets now owned or hereafter acquired by any of them. The Acquisition will be consummated in accordance with the Acquisition Documents and applicable Requirements of Law.

5.6        No Contravention . The execution, delivery and performance of this Agreement and the other Loan Documents, the issuance of Letters of Credit, the borrowings hereunder and the use or application of the Loan Proceeds will neither (i) violate any Requirement of Law or any Contractual Obligation of any Corporate Obligor or any of its Subsidiaries, nor (ii) result in, or require, the creation or imposition of any Lien on any of their respective assets pursuant to any Requirement of Law or any such Contractual Obligation (other than the Liens created by the Loan Documents). No Requirement of Law or Contractual Obligation applicable to any Corporate Obligors or any of their respective Subsidiaries could reasonably be expected to have a Material Adverse Effect.

5.7        No Litigation . No action, suit, litigation, investigation or proceeding of or before any arbitrator or other Governmental Authority is pending or, to the best of Borrower’s knowledge, threatened by or against any Corporate Obligor or any of its Subsidiaries or against any of its assets (i) with respect to any of the Loan Documents or any of the transactions contemplated hereby or thereby, or (ii) that could reasonably be expected to have a Material Adverse Effect, other than that set forth on Schedule 5.7 (the “ Disclosed Litigation ”), and there has been no adverse change in the status, or financial effect on Borrower or any other Corporate Obligor, or any of the Corporate Obligors’ respective Subsidiaries, of the Disclosed Litigation from that described on Schedule 5.7 hereto.

5.8        No Default . No (i) Event of Default has occurred that has not been waived by Lender, and no event has occurred and is continuing which, with the lapse of time, the giving of notice, or both, would constitute an Event of Default under this Agreement or any of the other Loan Documents; and (ii) Obligor or Subsidiary is in default (without regard to notice, grace or cure periods) under or with respect to any Contractual Obligation of such Obligor or Subsidiary that could reasonably be expected to have a Material Adverse Effect.

5.9        Title to Assets; Liens . Each Corporate Obligor and each of its Subsidiaries has (i) good and marketable title to all of its assets (including, without limitation, in the case of Borrower or any such other Corporate Obligors, the Mortgaged Properties set forth on Schedule 1.85 hereto), none of which are subject to any Liens except (A) the Liens created by the Loan Documents in favor of Lender and other Permitted Liens, or (B) as otherwise disclosed by Borrower to, and expressly permitted to exist by, Lender in writing; and (ii) the right to create the Liens pursuant to the Loan Documents to which it is a party (and/or to which it or any of its assets is otherwise subject or bound by).

5.10        Indebtedness . A true, correct and complete schedule of all Indebtedness of each Corporate Obligor and each of its Subsidiaries is attached hereto as Exhibit C . Except as otherwise set forth on Exhibit C on the Effective Date (and from time to time thereafter by amendment thereto made in accordance herewith): (i) there are no outstanding debt securities, notes, credit agreements, credit facilities or other contracts or instruments evidencing any Indebtedness of any Corporate Obligor or any of its Subsidiaries, or to which any Corporate Obligor or any of its Subsidiaries is or may become subject or bound by; and (ii) there are no financing statements filed with any Governmental Authority securing any obligations of any Corporate Obligor or any of its Subsidiaries, or filed in connection with any assets (including any Properties) of any Corporate Obligor or any of its Subsidiaries (except for financing statements filed in favor of Lender or otherwise in connection with Permitted Liens).

5.11        Intellectual Property Matters . Each Corporate Obligor and each of its Subsidiaries owns, or is licensed to use, all Intellectual Property necessary for the conduct of its business as currently conducted or proposed to be conducted. No material claim has been asserted and is pending by any Person challenging the use, validity or effectiveness of any Intellectual Property, nor is Borrower aware of any valid basis for any such claim. The use of Intellectual Property by each Corporate Obligor and each of its Subsidiaries does not materially infringe on the rights of any Person.

5.12        Tax Matters . Each Corporate Obligor and each of its Subsidiaries has filed, has caused to be filed or has been included in all federal, state and other tax returns that are required to be filed and has paid all taxes shown thereon to be due, together with applicable interest and penalties, and all other taxes, fees or other charges imposed on it or any of its assets by any Governmental Authority (other than any the amount or validity of which are currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided on the books of the relevant Corporate Obligor or its Subsidiary); no tax Lien has been filed, and, to the knowledge of Borrower, no claim is being asserted, with respect to any such tax, fee or other charge. No Corporate Obligor or any of its Subsidiaries is party to any tax sharing agreement, other than as expressly disclosed by Borrower in a Schedule hereto.

5.13        Margin Regulations . Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying Margin Stock, and no Loan Proceeds (including any drawings under any Letter of Credit) will be used to purchase or carry any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any Margin Stock.

5.14        Labor Matters . Except as, in the aggregate, could not reasonably be expected to have a Material Adverse Effect; (i) there are no strikes, lockouts or other labor disputes pending or, to the knowledge of Borrower, threatened against any Corporate Obligor or any of its Subsidiaries; (ii) hours worked by and wages paid to employees of each Corporate Obligor and its Subsidiaries have not violated the Labor Act or any other applicable Requirement of Law; and (iii) all payments due in respect of employee health and welfare insurance from any Corporate Obligor or its Subsidiaries have been paid or properly accrued on the books of the relevant Corporate Obligor or Subsidiary.

5.15        ERISA Matters . Each Plan is in compliance with ERISA, the Code and any Requirement of Law; neither a Reportable Event nor an “accumulated funding deficiency” (within the meaning of §412 or §430 of the Code or §302 of ERISA) has occurred (or is reasonably likely to occur) with respect to any Plan. No Single Employer Plan has terminated, and no Lien has been incurred in favor of the PBGC or a Plan. Based on the assumptions used to fund each Single Employer Plan, the present value of all accrued benefits under each such Plan did not materially exceed the value of the assets of such Plan allocable to such accrued benefit as of the last annual valuation date prior to the date on which this representation is made. No Corporate Obligor nor any ERISA Affiliate has incurred, or is reasonably expected to incur, any “withdrawal liability” (within the meaning specified in Part I of Subtitle E of Title IV of ERISA) that could reasonably be expected to result in a material liability under ERISA in connection with any Multiemployer Plan, and no such Multiemployer Plan is (or is reasonably expected to be) terminated, in “reorganization” (within the meaning of §4241 of ERISA) or “insolvent” (within the meaning of §4245 of ERISA).

5.16        Investment Company Act; Other Regulations . No Corporate Obligor or Subsidiary thereof is or is required to be registered as an “investment company” under the Investment Company Act of 1940, as amended. No Corporate Obligor or Subsidiary thereof is subject to regulation under any Requirement of Law that limits its ability to incur Indebtedness or which may otherwise render all or any portion of the Obligations unenforceable.

5.17        Subsidiaries; Equity Interests .

5.17.1       Except as expressly disclosed to Lender by Borrower in writing from time to time after the Effective Date, (i) Part A of Schedule 5.17 sets forth the name, address of principal place of business, jurisdiction of formation and U.S. taxpayer identification number of each Subsidiary (or in the case of a non-U.S. Subsidiary that does not have a U.S. taxpayer identification number, its unique identification number issued to it by its jurisdiction of formation) and, as to each such Subsidiary, the percentage of each class of Equity Interest owned by any Corporate Obligor; and (ii) there are no outstanding subscriptions, options, warrants, calls, rights or other agreements or commitments (other than stock options granted to employees or directors and directors’ qualifying shares) relating to any Equity Interest of any Corporate Obligor or any Subsidiary thereof, except as set forth in Part B of Schedule 5.17 or as created by the Loan Documents.

5.17.2       All of the outstanding Equity Interests in each Corporate Obligor and each Subsidiary have been validly issued in compliance with all foreign, federal and state securities laws, are fully paid and non-assessable, and, with respect to any such Equity Interests owned by any Obligor, are free and clear of any and all Liens, except for those set forth in Part C of Schedule 5.17 and those created by the Loan Documents. As of the Effective Date, and except as otherwise expressly disclosed to Lender by Borrower in writing from time to time thereafter (including by way of an amendment to all or any portion of Schedule 5.17 ): (i) Part D of Schedule 5.17 sets forth all of the equity investments that each Corporate Obligor and each Subsidiary thereof has any in any other corporation, limited liability company or other entity or non-natural Person; (ii) Part E of Schedule 5.17 sets forth all outstanding registration statements with respect to any Corporate Obligor or any Subsidiary thereof, or any of their respective securities or other Equity Interests; and (iii) Part F of Schedule 5.17 sets forth all (A) outstanding comment letters from the SEC, any Principal Trading Market or any other Governmental Authority with respect to any securities or other Equity Interests of any Corporate Obligor or any Subsidiary thereof; and (B) agreements or arrangements under which any Corporate Obligor or any Subsidiary thereof is obligated to register the sale of any of its securities under the Securities Act.

5.18        Re-IPO; Issuance of Securities . In connection with any Re-IPO ( if any ), all shares sold in connection therewith will be duly authorized, duly issued, fully paid and non-assessable, and free from all Liens, claims, charges, taxes or other encumbrances with respect thereto, and will be sold in compliance with all applicable Requirements of Law (including all United States federal and state securities laws and the laws of any foreign jurisdiction applicable thereto). Any shares issuable upon conversion of any Rotman Family Note are or shall be duly authorized and, upon issuance, shall be duly issued, fully paid and non-assessable, and free from all Liens, claims, charges, taxes or other encumbrances with respect to the issue thereof, and will be issued in compliance with all applicable Requirements of Law (including all United States federal and state securities laws and the laws of any foreign jurisdiction applicable thereto).

5.19        OSHA and Environmental Laws . Except as otherwise disclosed (and/or caused to be disclosed) in writing by Borrower to Lender prior to the Effective Date or expressly provided for in any of the Loan Documents, to best of Borrower’s knowledge and belief: (i) Borrower and each Subsidiary have duly complied, and the Properties (including, without limitation, the Mortgaged Properties) and any other assets of Borrower or any such Subsidiary, and their respective businesses, are in compliance, in all material respects, with the provisions of OSHA and all applicable Environmental Laws; (ii) there have been no outstanding citations, notices or orders of non-compliance issued to Borrower or any Subsidiary, or relating to any Properties (including, without limitation, any Mortgaged Properties) or any other assets of Borrower or of any Subsidiary, or any of their respective businesses, under OSHA or any applicable Environmental Laws; (iii) Borrower and each Subsidiary has been issued by all applicable Governmental Authorities all required Permits and/or written consents or authorizations relating to all applicable Environmental Laws, other than those the absence of which would not reasonably be likely to produce a Material Adverse Change, and other than those for which Borrower or any such Subsidiary has submitted to any such Governmental Authorities a true, correct and complete application which is presently pending (a copy of which shall be provided to Lender, if any); (iv) no (A) no Release of Hazardous Materials has occurred, nor does their presently exist any Threat of Release, at, under or within any Property (including, without limitation, any Mortgaged Property), excepting such quantities as are handled in accordance with all applicable manufacturer’s instructions and Environmental Laws, and then in proper storage containers and as are necessary for the operation of the business(es) of Borrower in the ordinary course; (B) underground storage tanks or polychlorinated biphenyls exist on or under any Property (including, without limitation, any Mortgaged Property); (C) Property owned, leased or otherwise controlled by Borrower or any Subsidiary (including, without limitation, any Mortgaged Property) has ever been used as or for a treatment, storage or disposal facility of Hazardous Materials; or (D) Hazardous Materials are present upon, under or within any Property (including, without limitation, any Mortgaged Property), excepting such quantities as are handled in accordance with all applicable manufacturer’s instructions and regulations of Governmental Authorities, and then in proper storage containers and as are necessary for the operation of Borrower’s or any such Subsidiary’s business in the ordinary course; and (v) neither Borrower, nor any Subsidiary, has assumed any liability of any other Person under any Environmental Laws, except as contemplated by the Loan Documents.

5.20        Accuracy of Information; Projections . Each Corporate Obligor has disclosed (or Borrower caused each Corporate Obligor to disclose) to Lender all agreements, instruments and organizational or other restrictions to which it or any of its Subsidiaries is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. No statement or information contained in this Agreement or any other Loan Document, or any other document, certificate or statement furnished by or on behalf of any Obligor to Lender, for use in connection with the transactions contemplated by this Agreement or the other Loan Documents, contained, as of the date such statement, information, document or certificate was so furnished, any untrue statement of a material fact or omitted to state a material fact necessary to make the statement contained herein or therein not misleading. The projections and any pro forma financial information (the “ Projections ”) included in such materials are based upon good faith estimates and assumptions believed by Borrower to be reasonable at the time made; it being recognized by Lender that such Projections as to future events are not to be viewed as fact and that actual results during the period or periods covered by the Projections may differ from such projected results and such differences may be material. As of the Effective Date, the representations and warranties contained in the Acquisition Documentation are true and correct in all material respects.

5.21          Financial Statements; Vystar SEC Documents .

5.21.1       As of the Effective Date, the common stock of Vystar is not registered pursuant to Section 12(b) of the Exchange Act, but Vystar is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act. Vystar has filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC (all of the foregoing, together with any and all exhibits included therein and financial statements and schedules thereto and documents incorporated by reference therein, being hereinafter referred to as the “ Vystar SEC Documents ”). Vystar is current with its filing obligations under the Exchange Act, and all Vystar SEC Documents have been filed with the SEC as and when due, or Vystar has received a valid extension of such time of filing and has filed any such SEC Document prior to the expiration of any such extension. Vystar represents and warrants that true and complete copies of the Vystar SEC Documents are available on the SEC’s website ( www.sec.gov ), and Lender acknowledges that it may , at Borrower’s sole Cost and Expense, retrieve all Vystar SEC Documents from such website and that, for purposes of the Closing and the Vystar SEC Documents to be delivered in connection therewith, Lender’s access to such Vystar SEC Documents through such website shall constitute delivery of the Vystar SEC Documents to Lender; provided , however , that nothing in the immediately preceding sentence shall relieve Vystar of its covenants, duties and obligations to deliver to Lender true and complete copies of any Vystar SEC Documents at the time(s) and in the manner herein provided, and upon the request of Lender. As of their respective dates, the Vystar SEC Documents complied in all material respects with the requirements of the Exchange Act, and none of the Vystar SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. None of the statements made in any such Vystar SEC Documents is, or has been, required to be amended or updated under applicable law (except for such statements as have been amended or updated in subsequent filings prior the Effective Date, which amendments or updates are also part of the Vystar SEC Documents).

5.21.2       As of their respective dates, the consolidated financial statements of Vystar and its Subsidiaries included in the Vystar SEC Documents (i) complied in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto; (ii) have been prepared in accordance with GAAP, consistently applied, during the periods involved (except: (A) as may be otherwise indicated in such Financial Statements or the notes thereto; or (B) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements); and (iii) fairly present in all material respects the consolidated financial position of Vystar and all of its Subsidiaries as of the dates thereof and the consolidated results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments).

5.21.3       Except as hereinabove provided and/or otherwise provided in connection with the Vystar SEC Documents, each Obligor has furnished to Lender its most recent and current financial statements depicting its or their actual financial condition (collectively, the “ Obligor Financial Statements ”), all of which such Obligor Financial Statements (i) were, to the extent applicable to such Obligor, prepared in accordance with GAAP; and (ii) fairly and accurately presented the actual or projected financial condition of, and all material matters and transactions affecting the actual or projected operations (as applicable) of, such Obligor and/or its or their business(es) for the periods covered thereby. As of the dates of the Obligor Financial Statements (respectively), and except as otherwise reflected therein or in any footnotes thereto, no such Obligor had any material Indebtedness or other material liabilities or obligations (whether accrued, absolute, contingent or otherwise, whether due or to become due, including, without limitation, liabilities or obligations on account of taxes or other Governmental Charges).

5.22        No Material Adverse Effect . Since the respective date(s) of the (i) most recent financial statements filed as part of the Vystar SEC Documents, and (ii) Obligor Financial Statements, there has been no: (A) event or circumstance of any nature whatsoever that has resulted in, or could reasonably be expected to result in, a Material Adverse Change; or (B) transaction, event, action, development, payment or any other matter of any nature whatsoever entered into by Borrower other than in the ordinary course of business.

5.23        Insurance . The assets of the Corporate Obligors and their Subsidiaries (including, without limitation, the Properties and all Mortgaged Properties) are insured with financially sound and reputable insurance companies which are not Affiliates of Borrower, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar business and owning similar assets in localities where the applicable Corporate Obligor or Subsidiary operates.

5.24        Finder’s Fees . Except as otherwise expressly disclosed in writing to Lender prior to the Effective Date, no Obligor has made any agreement or taken any action which may cause any Person to become entitled to a commission or finder’s fee as a result of, or otherwise in connection with, Lender’s making available to Borrower any Loan Proceeds and / or any other financial accommodations contemplated hereby or by any other of the Loan Documents.

5.25        Perfected Liens .

5.25.1       The Security Agreement is effective to create in favor of Lender, a legal, valid and enforceable security interest in the Collateral described therein and the proceeds thereof. In the case of the Collateral described in the Security Agreement, when financing statements and other filings described therein are filed or otherwise made in appropriate form with the appropriate Governmental Authorities (expressly including the respective offices of the Secretary of the Commonwealth of Massachusetts and the Secretary of the State of Georgia), the Security Agreement shall constitute a fully perfected First Priority Lien on, and security interest in, all rights, title and interest of Borrower (and/or, as the case may be, such other Corporate Obligor parties thereto) in such Collateral and the proceeds thereof, as security for the Indefeasible Satisfaction of the Obligations, subject only to Liens created or permitted under the Loan Documents and other Permitted Liens.

5.25.2       Each of the Mortgages is effective to create in favor of Lender, a legal, valid and enforceable Lien on the Mortgaged Properties described therein and proceeds thereof, and when the Mortgages are filed or recorded with the appropriate Registry or District of the Land Court (in the case of Massachusetts; or other applicable Governmental Authority office in case of any other jurisdiction), each such Mortgage shall constitute a fully perfected First Priority Lien on, and security interest in, all rights, title and interest of Borrower (or such other Corporate Obligors, as the case may be) in the Mortgaged Properties and the proceeds thereof, as security for the Indefeasible Satisfaction of the Obligations, subject only to Liens created or permitted under the Loan Documents and other Permitted Liens.

5.26        Patriot Act, OFAC, Anti-Terrorism Laws and Other Regulations . No Corporate Obligor or any Subsidiary or Affiliate thereof or, to the knowledge of Borrower, any of respective officers, directors, brokers or agents of any such Corporate Obligor, Subsidiary or Affiliate: (i) has violated any Anti-Terrorism Laws; (ii) has engaged in any transaction, investment, undertaking or activity that conceals the identity, source or destination of the proceeds from any category of prohibited offenses designated by the Organization for Economic Co-operation and Development’s Financial Action Task Force on Money Laundering; (iii) is a Person that is, or is owned or controlled by Persons that are (A) the subject or target of any Sanctions, or (B) located, organized or resident in a country or territory that is, or whose government is, the subject of Sanctions, (including, without limitation and currently, Cuba, Iran, North Korea, Sudan and Syria; (iv) conducts any business or engages in making or receiving any contribution of goods, services or money to or for the benefit of any Person, or in any country or territory, that is the subject or target of any Sanctions, (v) deals in, or otherwise engages in any transaction related to, any property or interests in property blocked pursuant to any Anti-Terrorism Law; (vi) engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law; or (vii) has been convicted of, or pleaded nolo contendere to, a “sex offense” against a “minor” (as such terms are defined in 42 U.S.C. § 16911 et seq. )

5.27        Solvency . Each Corporate Obligor and each Subsidiary thereof is now, and after giving effect to the Acquisition and the incurrence of all Indebtedness and obligations, liabilities and undertakings (including, without limitation and as the case may be, the Obligations) incurred in connection with the execution and delivery of the Loan Documents (to which it is a party and/or to which it or any of its assets is otherwise subject or bound by) and the Acquisition Documents will be, Solvent.

5.28        Casualty . Neither the business nor the Properties of any Corporate Obligor or any of its Subsidiaries (including, without limitation, the Mortgaged Properties) are affected by any fire, explosion, accident, strike, lockout or other labor dispute, drought, storm, hail, earthquake, embargo, act of God, or of the public enemy or other casualty (whether or not covered by insurance) that could reasonably be expected to have a Material Adverse Effect.

5.29        Certain Documents . Borrower has delivered to Lender true, complete and correct copies of any and all (i) Acquisition Documents, either in executed or, with respect to those Acquisition Documents to be executed simultaneously with the Closing, in ( so-called ) ‘execution-ready’ form; (ii) Rotman Family Notes currently in effect or outstanding; and (iii) Re-IPO Documents currently existing and in-effect ( if any ).

5.30        Business Combinations . No Corporate Obligor has ever merged or consolidated with, or acquired substantially all of the assets of, or otherwise effectuated any kind of Business Combination with, any other Person, except as set forth on Schedule 5.30 .

5.31        Accuracy of Exhibits and Schedules . All information set forth on or within the Exhibits, Schedules and all other addenda hereto (including in any agreements or other documents that may be attached to any such Exhibits, Schedules or other addenda) is true, correct and complete in all respects.

6.        AFFIRMATIVE COVENANTS .

6.1        General Affirmative Covenants . For so long as any Obligations remain outstanding, Borrower hereby covenants and agrees, and shall cause each other Corporate Obligor and each of the Corporate Obligors’ respective Subsidiaries:

6.1.1       to execute and/or authenticate and deliver to Lender any writings, and do or cause to be done all things reasonably necessary, effectual or requested by Lender to carry into effect the provisions and intent of this Agreement and/or any other of the Loan Documents to which it is a party (and/or to which it or any of its property is otherwise subject or bound by), or to vest more fully in or assure to Lender (including, without limitation, all steps to create and perfect) the Liens granted to Lender and created by the Loan Documents, or to comply with any applicable Requirements of Law and to facilitate the collection of the Collateral, including, without limitation, the furnishing at such intervals as Lender may establish from time to time in its sole but reasonable discretion, of reports, financial data and analyses satisfactory to Lender in its sole but reasonable discretion, the Costs and Expenses of which shall be Borrower’s sole and exclusive responsibility;

6.1.2       to pay, or reimburse Lender immediately upon demand for paying, any and all Costs and Expenses and/or taxes incurred by Lender, its agents, counsel and/or representatives in connection with filing or recording any agreements, instruments or other documents in or with any and all offices, registries and/or Governmental Authorities (as the case may be) in which it is necessary to file or record so as to perfect to the satisfaction of Lender, determined in its sole discretion, Lender’s Liens on all or any part of the Mortgaged Properties and/or Collateral;

6.1.3       upon Lender’s written demand, to pay, or reimburse Lender for paying, all Costs and Expenses associated with Lender causing any agent or representative of Lender to conduct, after the Effective Date, any appraisal, examination (including any field exam), inspection, testing, screening and/or survey of any kind on, of or with respect to all or any part of any Collateral, Property (including, without limitation, any Mortgaged Property) and/or its business operations (as the case may be), and to permit or cause to be permitted (in each case upon reasonable prior notice and during customary business hours) Lender and/or any agent or representative of Lender to enter upon any such Property (including, without limitation, any Mortgaged Property), as applicable, for purposes of conducting the same, in each case if deemed reasonably necessary or advisable by Lender its sole but reasonable discretion (and in the exercise of good faith); provided , however , that, absent (i) the occurrence of any Event of Default that is not waived by Lender, or (ii) any change in any Requirements of Law applicable to Lender after the Effective Date, or directive to Lender by any Governmental Authority after the Effective Date, requiring more periodic or frequent appraisals, examinations, inspections, tests, screenings and/or surveys, the same shall be conducted no more frequently than one (1) time in any twelve (12) month period. After the occurrence of any Event of Default, unless the same shall be waived by Lender in accordance with the provisions of Section 10.2.1 below , Lender shall have the right to obtain or conduct (or cause to be obtained or conducted), at Borrower’s sole Cost and Expense, any such appraisals, examinations, inspections, tests, screenings and/or surveys as and when Lender may deem advisable in its sole but reasonable discretion;

6.1.4       when reasonably requested to do so from time to time after reasonable prior notice (and during customary business hours), to permit and make available (or cause to be permitted and made available) for inspection by Lender and / or its agents or representatives, at Borrower’s sole Cost and Expense, any books and records, and to permit (or cause to be permitted) Lender and / or any such agents or representatives to inspect, examine and make copies of or extracts from any such books and records; provided , however , that, absent (i) the occurrence of any Event of Default that is not waived by Lender, or (ii) any change in any Requirements of Law applicable to Lender after the Effective Date, or directive to Lender by any Governmental Authority after the Effective Date, requiring more periodic or frequent inspections, any such inspection at Borrower’s sole Cost and Expense shall be conducted no more frequently than one (1) time in any twelve (12) month period. After the occurrence of any Event of Default, unless the same shall be waived by Lender in accordance with the provisions of Section 10.2.1 below , Lender shall have the right to conduct (and/or cause to be conducted) any such inspections as and when Lender may deem necessary or advisable in its sole but reasonable discretion;

6.1.5       to take such steps as Lender may at any time reasonably direct, including, without limitation, the noting of Lender’s Liens on the Collateral and/or on any certificates of title therefor (if any), all to perfect, to the satisfaction of Lender (determined in its sole discretion), Lender’s continuing Liens granted under the Loan Documents, which such continuing Liens Borrower hereby confirms, reaffirms and acknowledges its grant thereof to Lender;

6.1.6       to cause each Guarantor to comply in all respects with any and all covenants and agreements set forth in each such Guarantor’s Guaranty and in each other of the Loan Documents to which such Guarantor is a party and / or to which such Guarantor or any of its property is otherwise bound;

6.1.7       to execute and deliver (and to cause each other Obligor to execute and deliver) such additional instruments, and to take (and to cause each other Obligor to take) such further action as Lender may reasonably request from time to time, and at any time, to effect the purpose of, or to carry out the terms of, this Agreement or any other of the Loan Documents;

6.1.8       to (i) duly observe and comply in all material respects with all applicable Requirements of Law; (ii) maintain in full force and effect all Permits necessary in any material respect for the proper conduct of its businesses; and (iii) keep the Properties and Collateral in good repair (including, without limitation, the Mortgaged Properties);

6.1.9       to (i) keep (or cause to be kept) the Properties and Collateral (including, without limitation, the Mortgaged Properties) insured, and to carry all other forms of insurance, in such amounts and with such deductibles as are customary in their respective industries, and (ii) deliver (or cause to be delivered) promptly to Lender any and all written policies, binders and certificates for any such insurance at or prior to Closing, and upon each renewal and / or establishment thereof;

6.1.10     to (i) preserve, renew and maintain (or cause to be preserved, renewed and maintained) in full force and effect its organizational existence in good standing, and (ii) comply with all Contractual Obligations, applicable Requirements of Law and the terms of its Charter Documents;

6.1.11     to duly and punctually perform or cause to be performed each and every part of the Obligations and all of the terms and conditions of the Loan Documents to which it is a party (and/or to which it or any of its assets is otherwise subject or bound by), and to not permit the acceleration of any Indebtedness owed by it to any Person (including, without limitation, Lender);

6.1.12     to furnish or cause to be furnished to Lender, within a reasonable time after Lender’s request, any information regarding (i) any of its business affairs and / or financial condition, (ii) the Obligations, and / or (iii) any Liens created by the Loan Documents;

6.1.13      to provide Lender with thirty (30) days’ prior written notice of any (i) change in its mailing address, (ii) change in the location of any its place(s) of business (as applicable), and / or (iii) establishment of any new, or the discontinuance of any existing, mailing address or place of business (as the context so permits);

6.1.14      except with Lender’s prior written consent or as otherwise provided for or permitted in any other of the Loan Documents (including, without limitation, the Security Instruments), to at all times keep: (i) proper books of account in which full, true and correct entries will be made of all transactions in accordance with GAAP, consistently applied and reasonably adequate to determine its financial condition and the results of its operations; (ii) Lender currently and accurately informed in writing of each location where its respective records relating to accounts and contract rights are kept, and to give Lender thirty (30) days’ prior written notice of the moving of any such records to another location; and (iii) the Collateral at the Properties (including, without limitation, the Mortgaged Properties) or at such other location(s) as may be expressly disclosed by such Corporate Obligor or such Subsidiary in writing;

6.1.15      to permit and authorize (or, as the case may be, cause to be permitted and authorized) Lender and Lender’s agents, representatives and attorneys to, directly contact and communicate with each accountant and attorney employed by it in connection with the review and / or maintenance of its Charter Documents, any of its books and records, and / or any preparation of any financial statements or other information or reports delivered (or caused to be delivered) by any such Corporate Obligor or any such Subsidiary to Lender;

6.1.16       to give prompt written notice to Lender of (i) any litigation or proceeding in which it or any other Obligor is a party; and/or (ii) the institution of any other suit or proceeding involving any it or any other Obligor that could be reasonably expected to produce a Material Adverse Change; and

6.1.17       to promptly notify Lender in writing (after becoming aware or obtaining knowledge) of the occurrence of: (i) each Event of Default hereunder; and (ii) each breach or default that continues beyond applicable notice and cure periods under any of its Contractual Obligations, except to the extent that such breach or default could not reasonably be expected to produce or result in a Material Adverse Change.

6.2        Covenant Relating to the Operating Account . Borrower hereby covenants and agrees that (i) each Corporate Obligor shall promptly open and establish with Lender its Operating Account (to the extent not already open and established immediately prior the Closing; e.g. in the case of Rotmans); and (ii) each Corporate Obligor shall maintain and keep its Operating Account active and in good standing with Lender at all times while any Obligations are outstanding. For purposes of the immediately preceding subclause (i) in this Section 6.2 , the term “ promptly ” means, in the case of Borrower, on or substantially contemporaneously with the Effective Date, and in all other cases, upon or substantially contemporaneously with such Corporate Obligor’s execution and delivery of any Guaranty and/or Security Instrument.

6.3        Certain Covenants Concerning Additional Collateral and Subsidiaries . For so long as any Obligations remain outstanding, Borrower hereby covenants and agrees to, and shall cause each other Corporate Obligor and each of the Corporate Obligors’ respective Subsidiaries to:

6.3.1        Additional Collateral Generally . With respect to any property acquired after the Closing by any Corporate Obligor or any of its Subsidiaries that is intended to be subject to a Lien created by any Loan Documents (pursuant to and in accordance with the respective terms thereof), other than (i) property described in Sections 6.3.2 and 6.3.3 below , and (ii) any property subject to a Permitted Lien and as to which Lender does not have a perfected Lien, promptly, and in any event within thirty (30) days, after acquiring such property:

(a)       execute and deliver to Lender such supplements or amendments to the Security Agreement or such other documents Lender deems necessary or advisable to grant to Lender a security interest in such property; and

(b)       take all actions necessary or advisable to grant to Lender a perfected First Priority security interest in such property, including the filing of UCC-1 financing statements (and/or any continuations or amendments with respect thereto) in such jurisdictions as may be required by the Security Agreement or by law or as may be reasonably requested by Lender. 

6.3.2        Additional Real Property Collateral . With respect to any fee interest in any real property acquired after the Closing by any Corporate Obligor or any of its Subsidiaries, other than any such real property subject to a Lien expressly permitted by this Agreement, promptly, and in any event within thirty (30) days, after acquiring such property:

(a)       deliver title reports, and if requested by Lender in its sole but reasonable discretion, surveys and engineering, soil, environmental assessment and other reports, each in scope, form and substance reasonably satisfactory to Lender;

(b)       execute and deliver a First Priority Mortgage, in favor and for the benefit of Lender together with (i) title and extended coverage insurance covering such real property in an amount at least equal to the purchase price of such real property (or such other amount as shall be specified by Lender in its sole but reasonable discretion) as well as a current ALTA survey (or, if satisfactory to remove any survey exceptions, a plot plan) thereof, together with a surveyor’s certificate, and (ii) any landlord consents or estoppels deemed necessary or advisable by Lender (in its sole but reasonable discretion) in connection with such Mortgage, each of the foregoing in form and substance reasonably satisfactory to Lender; and

(c)       if requested by Lender, deliver to Lender legal opinions relating to the matters described above, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to Lender.

6.3.3        New Subsidiaries . With respect to any new Subsidiary created, acquired, formed, established, organized or incorporated after the Closing by any Corporate Obligor or any of its existing Subsidiaries, promptly, and in any event within thirty (30) days, after the creation, acquisition, formation, organization or incorporation of such new Subsidiary:

(a)       cause such new Subsidiary to (i) execute and deliver to Lender any such Security Instruments as Lender may require in its sole but reasonable discretion, and any joinders to the Security Instruments (expressly including, without limitation, executing a joinder to the Security Agreement); (ii) execute and deliver to Lender a Guaranty providing the for the continuing, irrevocable, absolute, unconditional and unlimited guarantee of the Indefeasible Satisfaction of all Obligations (and in such form as Lender may dictate or provide (or cause its counsel to provide)); and (iii) take all actions necessary or desirable to grant to Lender a perfected security interest in the Collateral described in the Security Instruments with respect to such new Subsidiary, including the filing of UCC-1 financing statements (and/or any continuations or amendments with respect thereto) in such jurisdictions as may be required by the Security Instruments or by law or as may be requested Lender in its sole but reasonable discretion;

(b)       if requested and deemed necessary or advisable by Lender (in its sole but reasonable discretion) execute and deliver to Lender such supplements or amendments to any Security Instruments (including, without limitation, the Security Agreement), or any such other documents, in each case acceptable to Lender and as it deems necessary or advisable (in its sole but reasonable discretion) to grant to Lender a perfected security interest in all of the Equity Interests of such new Subsidiary that is/are owned by any such Corporate Obligor or any other of its Subsidiaries;

(c)       deliver to Lender a secretary’s (or a manager’s, partner’s, trustee’s or other comparable) certificate of such new Subsidiary, together with Charter Documents and appropriate resolutions attached as exhibits or schedules thereto; and

(d)       if requested by Lender in its reasonable discretion, deliver to Lender legal opinions relating to the matters described above, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to Lender.

6.4        Financial Reporting Covenants . For so long as any Obligations remain outstanding, Borrower hereby covenants and agrees with Lender (and each of Lender’s Affiliates) to submit or cause to be submitted, as appropriate, to Lender (or, as the case may be, Lender’s specified designee or Affiliate) the following financial statements and/or other information:

6.4.1        Financial Statements for Borrower :

(a)       Within 120 days after Borrower’s fiscal year-end, CPA-prepared, review quality consolidated financial statements; provided , however , that in the event any such financial statements of Borrower have been then-audited by its independent certified professional accountants (CPA), or are otherwise then-available in or on an audit-quality or as-audited basis, Borrower shall deliver such audited financial statements to Lender.

(b)       Within thirty (30) days after the end of each calendar quarter, management-prepared financial statements for Borrower consisting of at least a balance sheet, income statement and statement of cash flows, in each instance submitted to Lender with a certificate signed by a Responsible Officer of Borrower indicating that such management-prepared financial statements are true, correct and complete in all material respects; and

(c)       Within ten (10) days after the end of each calendar month, a Borrowing Base Certificate in the form attached hereto as Exhibit B and signed by a Responsible Officer of Borrower, together with a (i) memo of returns and credits, (ii) remittance report, (iii) schedule of inventory, (iv) accounts receivable aging report, (v) accounts payable aging report, and (vi) such other supporting documents and materials, and/or any such other information, which Lender, in its sole but reasonable discretion, may require to be delivered together with such Borrowing Base Certificate (including, without limitation, as may be set forth in this Agreement and/or in any other of the Loan Documents).

6.4.2        Financial Statements for the Personal Guarantors :

(a)       On or before May 1st of each calendar year, a personal financial statement for each Personal Guarantor on Lender’s form (or on such other form approved by Lender), in each case with such substance, and in such detail, as is satisfactory to Lender in its sole but reasonable discretion.

6.4.3        Tax Returns of the Obligors : On or before May 1st of each calendar year, copies of the signed and as-filed (with the IRS) federal income tax returns of each of the Obligors for the immediately preceding calendar or fiscal year (as applicable), together with any and all supporting schedules, statements and amendments thereto, as prepared by certified public accountants selected by such Obligor and satisfactory to Lender in its sole but reasonable discretion; provided , however , that in the event that any such Obligor intends to file any such tax return on extension, such Obligor shall promptly, but in no event later than fifteen (15) days after filing any:

(a)       request for any such extension with the IRS, provide Lender with a complete signed and as-filed (with the IRS) copy of such Obligor’s request for extension form ( e.g. , IRS Form Nos. 4868 and 7004); and

(b)       such tax return on extension, provide Lender with a copy of such tax return, as-signed and as-filed (with the IRS), including all supporting schedules, statements and/or amendments thereto.

6.4.4        Additional Financial Information and Related Documents :

(a)       Substantially contemporaneously with the filing of any Vystar SEC Documents, true, correct and complete copies of the same or an electronic hyperlink to a secure portal from which Lender can download the same at no cost to Lender;

(b)       Copies of any and all Re-IPO Documents then-existing and in-effect ( if any ), in both draft and final form, substantially contemporaneously with Vystar’s execution, delivery, receipt, distribution or transmission thereof (as the case may be, and in any event, whichever is sooner);

(c)       Within seven (7) Business Days after Lender’s written request, a management-prepared rent roll for any one or more Mortgaged Properties that Lender may specify or provide with such request, in each case executed and delivered to Lender by a Responsible Officer of and for Borrower (and/or such other Corporate Obligor, as the context may provide); and

(d)       Any other financial statements, documentation and / or information that (i) may be required of or from any Obligor under and/or pursuant to any of the Loan Documents (including, without limitation, any Guaranty), and / or (ii) Lender may require and request in its sole but reasonable discretion from time to time from any Obligor, in each case in in form and substance, and in such detail, as is satisfactory to Lender (in its sole but reasonable discretion).

6.5        Financial Ratio Covenants . For so long as any Obligations remain outstanding, Borrower hereby covenants and agrees with Lender and each of Lender’s Affiliates to maintain or cause to be maintained on an annual and consolidated basis (as the case may be) the following (collectively herein referred to as, the “ Ratio Covenants ”), each of which shall be tested by Lender as of the end of each fiscal year of Borrower, and annually thereafter on a trailing twelve (12) month basis, utilizing Borrower’s financial statements and/or tax returns for such corresponding period(s) (as delivered to Lender at the time(s) and in the manner specified in Section 6.4 above ):

6.5.1        Debt Service Coverage Ratio . A minimum Debt Service Coverage Ratio of not less than 1.25:1.00 .

6.5.2        Senior Funded Debt Ratio . A maximum Senior Funded Debt Ratio of no greater than 1.00:1.00 .

6.6          Certain Covenants Relating to Plans and ERISA . Borrower hereby covenants and agrees with Lender and each of Lender’s Affiliates that, for so long as any Obligations remain outstanding, Borrower shall, with respect to all Plans maintained by any Corporate Obligors and any of their respective Subsidiaries, cause each such Plan to be funded, and to cause to be paid all benefits when due, in accordance with all Requirements of Law, and furnish to Lender and/or cause to be furnished to Lender: (i) written notice of the occurrence of any Reportable Event, such notice to be given promptly, but in any event within five (5) days of the occurrence of a Reportable Event with respect to any such Plan; (ii) a copy of any request for a waiver of the funding standards or an extension of the amortization periods required under §412 of the Code and §302 of ERISA (as such sections have been or shall be amended, restated and/or otherwise modified from time to time), such copy to be furnished not later than the date of submission of the request to the U.S. Department of Labor, the IRS or any other Governmental Authority, as the case may be; (iii) a copy of any notice of intent to terminate any such Plan, such copy to be furnished no later than the date of submission to the PBGC; (iv) notice that Borrower will or may incur any liability to or on account of any such Pension Plan under §§4062, 4063, 4064, 4201 or 4204 of ERISA (as such sections have been or shall be amended, restated and/or otherwise modified from time to time), such notice to be given within the ten (10) days after Borrower (or, as the case may be, such other Corporate Obligor or any Subsidiary) knows or has reason to know thereof; and (v) no later than thirty (30) days after the date of filing, a copy of any annual report(s) of or for each such Plan that are required to be filed by any Corporate Obligor or any such Subsidiary with the IRS, PBGC, U.S. Department of Labor and/or any other applicable Governmental Authorities. Any notice to be provided to Lender, and/or caused to be provided to Lender, pursuant to this Section 6.6 shall include a certificate of a Responsible Officer of Borrower (or, as the case may be, such other Corporate Obligor or any Subsidiary) setting forth details as to such occurrence and the action, if any, which is required or proposed to be taken, together with any notices required or proposed to be filed with or by any Corporate Obligor or any Subsidiary, the PBGC, the IRS or the trustee and/or plan administrator with respect thereto.

6.7          Covenants Relating to OSHA and Environmental Laws . Borrower hereby covenants and agrees with Lender and each of Lender’s Affiliates that, for so long as any Obligations remain outstanding, Borrower shall, and shall cause each other Corporate Obligor and each of the Corporate Obligors’ respective Subsidiaries to: (i) ensure all of the Properties (including, without limitation, the Mortgaged Properties), businesses and other assets remain in material compliance with OSHA and all applicable Environmental Laws; (ii) ensure that no Hazardous Materials are placed (or permitted to be placed) on or within any of the Properties (including, without limitation, any of Mortgaged Properties), except as permitted by appropriate Governmental Authorities, and then only in compliance with applicable Environmental Laws; and (iii) provide immediate notice to Lender (followed by written notice which shall be received by Lender within five (5) days) after the occurrence of any Release or Threat of Release at or with respect to any of the Properties, the occurrence of which could be reasonably expected to produce a Material Adverse Change.

7.          NEGATIVE COVENANTS . For so long as any Obligations remain outstanding, except as otherwise expressly permitted herein or in any other of the Loan Documents or with Lender’s express prior written consent (not to be unreasonably delayed, but, in any event, granted or withheld in Lender’s sole but reasonable discretion), Borrower hereby covenants and agrees not to, nor cause or permit any Subsidiary to:

7.1        Limitations on Fundamental Changes; Business Combinations; Dispositions .

7.1.1       Directly or indirectly (i) enter into or consummate any Business Combination (except to the extent such Business Combination constitutes a Permitted Acquisition); (ii) liquidate, wind- up or dissolve itself; (iii) Dispose of (in one transaction or in a series of transactions, and whether voluntarily or involuntarily) all or substantially all of its assets (whether tangible or intangible; including, without limitation, any sale, transfer, assignment, discount or other disposition of accounts, contract rights, chattel paper or general intangibles with or without recourse); or (iv) acquire all or substantially all of the assets constituting a business, division, branch or other unit of operation of any Person, except to the extent such acquisition constitutes a Permitted Acquisition; or

7.1.2       Dispose of any of its property, whether now owned or hereinafter acquired, or, in the case of any Subsidiary, issue or sell any Equity Interests of such Subsidiary to any Person, except: (i) the sale or Disposition of machinery or equipment that is obsolete, worn-out, unused or not useful in the ordinary course business of Borrower or such Subsidiary ( provided , however , that, in the event any such obsolete, worn-out, unused or not useful machinery or equipment was purchased or otherwise acquired, in whole or in part, with any Loan Proceeds, or is subject to any Liens in favor of Lender, any Disposition thereof shall only be made with and upon Lender’s express prior written consent); (ii) the sale of inventory in the ordinary course of business; (iii) Dispositions of assets between or amongst Borrower and any Subsidiary existing on or prior to the Effective Date ( provided that Lender then-has an existing, or is then- granted, a First Priority perfected Lien in such property, and, in any event, Lender shall be provided with ten (10) days’ prior written notice thereof); (iv) the sale or issuance of any Subsidiary’s Equity Interests to Borrower (subject to the provisions of Section 6.3 above , as applicable, and, in any event, Lender shall be provided with ten (10) days’ prior written notice thereof); and (v) Dispositions of Cash Equivalents in the ordinary course of business and in a manner that is not prohibited by the terms of this Agreement.

7.2        Limitations on Capital Expenditures . Make or commit to make Capital Expenditures by lease, purchase or otherwise, except in the ordinary and usual course of business, and except for the purpose of replacing machinery, equipment or other personal property which, as a consequence of wear, duplication or obsolescence, is no longer used or necessary in the ordinary course of business, and, in all events, provided that fair consideration is received therefor in an arm’s length transaction.

7.3        Limitations on Restricted Payments . Declare or pay any dividend on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any Equity Interests of Borrower or any of its Subsidiaries, whether now or hereafter outstanding, or make any other kind of Distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of Borrower or any of its Subsidiaries (collectively, “ Restricted Payments ”); provided , however , that: (i) a Subsidiary of Borrower may make a Restricted Payment to Borrower and any Subsidiary and/or any other Persons owning Equity Interests in such Subsidiary, so long as such Restricted Payment is made to Borrower, the Subsidiary and/or such other Persons ratably in accordance with their Equity Interests of the same class or series therein, and provided that such Restricted Payment to such other holders of Equity Interests in such Subsidiary is attributable only to cash flows of such Subsidiary; and (ii) so long as no Event of Default has occurred that has not been waived by Lender, and so long as no Event of Default would otherwise result therefrom or after giving effect thereto: (A) Borrower may repurchase shares of its common stock upon three (3) Business Days’ prior written notice to Lender; (B) Borrower may declare and pay dividends and make other Distributions and payments with respect to its Equity Interests if payable solely in its Equity Interests; (C) Borrower may purchase or otherwise acquire Equity Interests in any Subsidiary, using additional shares of Borrower’s Equity Interests only, upon three (3) Business Days’ prior written notice to Lender (and subject, in any event, to applicable provisions of Section 6.3 above ); and (D) Borrower may (y) make repurchases or redemptions of its Equity Interests (1) in connection with the exercise of stock options or restricted stock awards if such Equity Interests represent all or a portion of the exercise price thereof, or (2) deemed to occur upon the withholding of a material portion of such Equity Interests issued to directors, officers or employees of Borrower or any Subsidiary under any stock option plan or other benefit plans or agreements for directors, officers and employees of Borrower and any such Subsidiary to cover withholding tax obligations of such Persons in respect of such issuance; and (z) make other Restricted Payments pursuant to and in accordance with stock option plans or other benefit plans or agreements for directors, officers and employees of Borrower and any such Subsidiary.

7.4        Limitations on Investments . Make any advance, loan, extension of credit (by way of guaranty or otherwise) or capital contribution to, or purchase, hold or acquire any Equity Interests, bonds, notes, debentures or other debt securities of, or any assets constituting a business unit of, or make any other investment in, any Person (all of the foregoing, “ Investments ”), except: (i) Investments in Cash Equivalents ( provided that , at the time of any such Investment in Cash Equivalents, and after giving effect thereto, no Event of Default shall have occurred that has not been waived by Lender, or would result therefrom); (ii) advances made by any Corporate Obligor or any Subsidiary thereof to its employees with respect to expenses incurred or to be incurred by such employees in the ordinary course of business (expressly excluding, for the avoidance of doubt, advances for the repurchase of any Equity Interests), and which such expenses are customarily reimbursable by such Corporate Obligor or such Subsidiary in the ordinary course of business; (iii) intercompany Investments made by a Subsidiary in Borrower ( provided that , at the time of any such intercompany Investment, and after giving effect thereto, no Event of Default shall have occurred that has not been waived by Lender, or would result therefrom; and provided further that Lender shall have (and Lender hereby expressly reserves) the right and option, exercisable at any time in Lender’s sole discretion, to require a Subordination Agreement with respect to any such intercompany Investments); (iv) extensions of trade credit in the ordinary course of business ( provided that the payment terms of any such trade credit do not provide for a due date of more than sixty (60) days after the date on which such trade payable or account payable with respect to the same was created); and (v) Investments constituting Permitted Acquisitions.

7.5        Limitations on Liens and Indebtedness .

7.5.1       Create, incur, assume or suffer to exist any Lien, except Permitted Liens, upon any of its property, assets or revenues, whether tangible or intangible, whether now owned or in existence or hereafter acquired or created and wherever located; nor acquire or agree to acquire any assets subject to any Lien, except for Permitted Liens and the Liens created by the Loan Documents; nor make or enter into any agreement not to grant Liens for the benefit of any Person other than for the benefit of Lender or any Affiliate(s) of Lender;

7.5.2       Create, incur, assume, permit to exist, guarantee or otherwise become liable with respect to any Indebtedness, obligation or liability, whether joint or several, matured or unmatured, liquidated or unliquidated, direct or contingent, of any Person, except: (i) Indebtedness of Borrower or any other Obligor existing or arising under this Agreement and/or any other of the Loan Documents; (ii) Indebtedness constituting Subordinated Indebtedness that is subject to and permitted to exist under a Subordination Agreement (and then only in accordance with the terms and conditions thereof); (iii) Indebtedness incurred to finance the acquisition, construction or improvement of fixed or capital assets (including Capital Lease Obligations) secured by a PMSI (subject to and in accordance with the definition therefor provided by Section 1.102.9 above ); (iv) Indebtedness of the Corporate Obligors and any Subsidiaries thereof existing on the Effective Date and listed on Exhibit C hereto, and any refinancings, modifications, renewals and extensions of any such Indebtedness ( provided that (A) the principal amount of such Indebtedness shall not be increased from that amount outstanding at the time of such refinancing, renewal or extension, (B) the maturity of such Indebtedness shall at no time be shortened, and (C) if deemed necessary or advisable by Lender in sole but its reasonable discretion at the time of any such refinancing, renewal or extension, Borrower shall cause such Indebtedness to be subordinated to Lender pursuant to a Subordination Agreement); (v) Indebtedness of any Person that becomes a new Subsidiary after the Effective Date ( provided that : (w) such Indebtedness exists at the time such Person becomes a new Subsidiary and is not created in contemplation of, or in connection with, such Person becoming a new Subsidiary; (x) Borrower complies (or causes compliance) with the applicable provisions of Section 6.3 above in respect of such Person that becomes a new Subsidiary and/or any such newly-acquired property as a result thereof; (y) the aggregate principal amount of such Indebtedness of such Person that becomes a new Subsidiary shall not exceed $100,000 . 00 at any time outstanding; and (z) if deemed necessary or advisable by Lender in sole but its reasonable discretion at the time such Person becomes a new Subsidiary, cause such Indebtedness to be subordinated to Lender pursuant to a Subordination Agreement); and (vii) Indebtedness that arises out unsecured trade payables incurred, created or assumed in the ordinary course of business and not past due for more than sixty-one (61) days after the date on which each such trade payable or account payable was created;