Document:

MD - Filed by Filing Services Canada Inc. (403) 717-3898

AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER is made as of the  29th day of February, 2012

AMONG:

 

VAULT AMERICA, INC., a corporation formed pursuant to the laws of the State of Nevada and having an office for business located at PO Box 15040, Aspenwoods, Calgary, Alberta T3H0N8

 

(“Vault”)

  AND:

GREEN PD ACQUISITIONS, INC., a corporation formed pursuant to the laws of the State of Nevada and a wholly owned subsidiary of Vault

(the "Acquirer")

AND:

THE GREEN POLKADOT BOX, INC., a corporation formed pursuant to the laws of the State of Utah and having an office for business located at 629 East Quality drive, Ste. 103, American Fork, Utah 84003

("GPDB")

	
  

	
WHEREAS:

A.              GPDB is a Utah corporation and an online membership club that operates a website selling natural and organic foods;

B.              The GPDB Shareholders own an aggregate of Twenty Six Million Seven Hundred Thirty Five Thousand Nine Hundred Twenty Five (26,735,925) GPDB Shares, being 100% of the presently issued and outstanding GPDB Shares;

C.              Vault is a reporting company whose common stock is quoted on the OTC Bulletin Board and which has been engaged in a search for potential merger candidates; and

D.              The respective Boards of Directors of Vault, GPDB and the Acquirer deem it advisable and in the best interests of Vault, GPDB and the Acquirer that the Acquirer merge with and into GPDB (the "Merger") pursuant to this Agreement and the Certificate of Merger, and the applicable provisions of the laws of the State of Utah.

NOW THEREFORE, WITNESSETH THAT in consideration of the premises and the mutual covenants, agreements, representations and warranties contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:

 

ARTICLE 1

DEFINITIONS AND INTERPRETATION

Definitions

	
1.1  

	
In this Agreement the following terms will have the following meanings:

	
(a)  

	
“Acquisition Shares” means the 9,919,028 Vault Common Shares, which shares are to be issued and delivered to the GPDB Shareholders at Closing pursuant to the terms of the Merger in accordance with Schedule A, annexed hereto;

 

  

  

  

 

	
(b)  

	
“Acquisition Options” means the 4,304,572 options to purchase Vault Common Shares, which options are to be delivered to the GPDB Optionholders at Closing pursuant to the terms of the Merger in accordance with Schedule B, annexed hereto, each Acquisition Option having the same terms and proportionately reduced exercise prices as each GPDB Optionholder’s GPDB Option;

	
(c)  

	
“Acquisition Warrants” means the 142,560 warrants to purchase Vault Common Shares, which warrants are to be delivered to the GPDB Warrantholders at Closing pursuant to the terms of the Merger in accordance with Schedule C, annexed hereto;

	
(d)  

	
“Agreement” means this agreement and plan of merger among Vault, the Acquirer, and GPDB;

	
(e)  

	
“Cancellation Shares” means 1,044,133  shares of common stock of Vault, 460 shares of Series A Preferred Stock of Vault, and 1,000 shares of Series B Preferred Stock of Vault, sold to GPDB pursuant to the Common Stock Purchase Agreement;

	
(f)  

	
 “Closing” means the completion, on the Closing Date, of the transactions contemplated hereby in accordance with Article 9 hereof;

	
(g)  

	
“Closing Date” means the day on which all conditions precedent to the completion of the transaction as contemplated hereby have been satisfied or waived;

	
(h)  

	
“Commission” means the Securities and Exchange Commission;

	
(i)  

	
“Common Stock Purchase Agreement” means that certain Common Stock Purchase Agreement dated February 2, 2012, whereby certain shareholders of Vault sold to GPDB the Cancellation Shares;

	
(j)  

	
“Effective Time” means the date of the filing of appropriate Certificates of Merger in the form required by the State of Nevada and the State of Utah provided that the Merger shall become effective as provided in the NRS and URBC;

	
(k)  

	
“Exchange Act” means the Securities Exchange Act of 1934, as amended;

	
(l)  

	
“GPDB Accounts Receivable” means all accounts receivable and other amounts owing to GPDB;

	
(m)  

	
“GPDB Assets” means all the property and assets of the GPDB Business of every kind and description wherever situated including, without limitation, GPDB Inventory, GPDB Material Contracts, GPDB Accounts Receivable, GPDB Cash, GPDB Intangible Assets and GPDB Goodwill, and all credit cards, charge cards and banking cards issued to GPDB;

	
(n)  

	
“GPDB Business” means all aspects of the business conducted by GPDB;

	
(o)  

	
“GPDB Cash” means all cash on hand or on deposit to the credit of GPDB on the Closing Date, subject to reduction pursuant to Section 7.1(f) below;

	
(p)  

	
“GPDB Financial Statements” means collectively, the audited financial statements of GPDB for the fiscal years ending December 31, 2011 and December 31, 2010, which shall be delivered at Closing, all of which will be prepared in accordance with United States generally accepted accounting principles and the requirements of Regulation S-X as promulgated by the Commission;

 

  

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(q)  

	
“GPDB Goodwill” means the goodwill of the GPDB Business together with the exclusive right of GPDB to represent itself as carrying on the GPDB Business in succession of GPDB subject to the terms hereof, and the right to use any words indicating that the GPDB Business is so carried on including the right to use the name "The Green PolkaDot Box, Inc.” or any variation thereof as part of the name of or in connection with the GPDB Business or any part thereof carried on or to be carried on by GPDB, the right to all corporate, operating and trade names associated with the GPDB Business, or any variations of such names as part of or in connection with the GPDB Business, all telephone listings and telephone advertising contracts, all lists of customers, books and records and other information relating to the GPDB Business, all necessary licenses and authorizations and any other rights used in connection with the GPDB Business;

	
(r)  

	
“GPDB Intangible Assets” means all of the intangible assets of GPDB, including, without limitation, GPDB Goodwill, all trademarks, logos, copyrights, designs, and other intellectual and industrial property of GPDB;

	
(s)  

	
“GPDB Inventory” means all inventory and supplies of the GPDB Business as of December 31, 2011 as increased or decreased in the ordinary course of business;

	
(t)  

	
“GPDB Optionholder” means the holder of options to purchase GPDB Shares as set forth in Schedule B;

	
(u)  

	
“GPDB Options” means all outstanding options to purchase GPDB Shares as set forth in Schedule B;

	
(v)  

	
“GPDB Material Contracts” means the burden and benefit of and the right, title and interest of GPDB in, to and under all trade and non-trade contracts, engagements or commitments, whether written or oral, to which GPDB is entitled in connection with the GPDB Business under which GPDB is obligated to pay or entitled to receive the sum of Ten Thousand Dollars ($10,000) or more annually including, without limitation, any pension plans, profit sharing plans, bonus plans, loan agreements, security agreements, indemnities and guarantees, any agreements with employees, lessees, licensees, managers, accountants, suppliers, agents, distributors, officers, directors, attorneys or others which cannot be terminated without liability on not more than one month's notice; and

	
(w)  

	
“GPDB Shares” means all of the issued and outstanding shares of GPDB's equity stock;

	
(x)  

	
“GPDB Shareholders” means all of the holders of the issued and outstanding GPDB Shares;

	
(y)  

	
“GPDB Warrantholder” means the holder of warrants to purchase GPDB Shares as set forth in Schedule C;

	
(z)  

	
“GPDB Warrants” means all outstanding warrants to purchase GPDB Shares as set forth in Schedule C;

	
(aa)  

	
“Merger” means the merger, at the Effective Time, of GPDB and the Acquirer pursuant to this Agreement;

	
(bb)  

	
“NRS” means the Nevada Revised Statutes;

	
(cc)  

	
 “Place of Closing” means the offices of Sichenzia Ross Friedman Ference LLP, or such other place as Vault and GPDB may mutually agree upon;

	
(dd)  

	
“PPM” means the private placement memorandum of GPDB and Vault (including all exhibits and supplements thereto), dated February 13, 2012;

	
(ee)  

	
“Securities Act” means the Securities Act of 1933, as amended;

 

  

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(ff)  

	
“SEC Reports” means all forms, reports and documents filed  by Vault with the Commission under the Exchange Act on and after January 1, 2009 through the date hereof;

	
(gg)  

	
“Subscription Agreements” means the series of subscription agreements between Vault and a group of investors, pursuant to the PPM, pursuant to which the investors will subscribe for shares of Vault’s common stock;

	
(hh)  

	
“Surviving Company” means GPDB following the merger with the Acquirer;

	
(ii)  

	
“Vault Business” means all aspects of any business conducted by Vault and its subsidiaries, including Subsidary (as defined herein);

	
(jj)  

	
“Vault Common Shares” means the shares of common stock in the capital of Vault,

	
(kk)  

	
“Vault Financial Statements” means, collectively, the audited financial statements of Vault for the two fiscal years ended October 31, 2011 and 2010, and the unaudited financial statements of Vault for the period ending January 31, 2012;

	
(ll)  

	
“URBC” means the Utah Business Corporation Act;

 

Any other terms defined within the text of this Agreement will have the meanings so ascribed to them.

Captions and Section Numbers

1.2              The headings and section references in this Agreement are for convenience of reference only and do not form a part of this Agreement and are not intended to interpret, define or limit the scope, extent or intent of this Agreement or any provision hereof.

Section References and Schedules

1.3              Any reference to a particular “Article”, “section”, “paragraph”, “clause” or other subdivision is to the particular Article, section, clause or other subdivision of this Agreement and any reference to a Schedule by letter will mean the appropriate Schedule attached to this Agreement and by such reference the appropriate Schedule is incorporated into and made part of this Agreement.

Severability of Clauses

1.4              If any part of this Agreement is declared or held to be invalid for any reason, such invalidity will not affect the validity of the remainder which will continue in full force and effect and be construed as if this Agreement had been executed without the invalid portion, and it is hereby declared the intention of the parties that this Agreement would have been executed without reference to any portion which may, for any reason, be hereafter declared or held to be invalid.

ARTICLE 2

THE MERGER

The Merger

2.1              At Closing, the Acquirer shall be merged with and into GPDB pursuant to this Agreement and the separate corporate existence of the Acquirer shall cease and GPDB, as it exists from and after the Closing, shall be the Surviving Company.

 

  

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Effect of the Merger

2.2              The Merger shall have the effect provided therefore by the NRS and URBC. Without limiting the generality of the foregoing, and subject thereto, at Closing (i) all the rights, privileges, immunities, powers and franchises, of a public as well as of a private nature, and all property, real, personal and mixed, and all debts due on whatever account, including without limitation subscriptions to shares, and all other choices in action, and all and every other interest of or belonging to or due to GPDB or the Acquirer, as a group, subject to the terms hereof, shall be taken and deemed to be transferred to, and vested in, the Surviving Company without further act or deed; and all property, rights and privileges, immunities, powers and franchises and all and every other interest shall be thereafter as effectually the property of the Surviving Company, as they were of GPDB and the Acquirer, as a group, and (ii) all debts, liabilities, duties and obligations of GPDB and the Acquirer, as a group, subject to the terms hereof, shall become the debts, liabilities and duties of the Surviving Company and the Surviving Company shall thenceforth be responsible and liable for all debts, liabilities, duties and obligations of GPDB and the Acquirer, as a group, and neither the rights of creditors nor any liens upon the property of GPDB or the Acquirer, as a group, shall be impaired by the Merger, and may be enforced against the Surviving Company.

Articles of Incorporation; Bylaws; Directors and Officers

2.3              The Articles of Incorporation of the Surviving Company from and after the Closing shall be the Articles of Incorporation of GPDB as in effect immediately prior to the Closing until thereafter amended in accordance with the provisions therein and as provided by the applicable provisions of the URBC.  The Bylaws of the Surviving Company from and after the Closing shall be the Bylaws of GPDB as in effect immediately prior to the Closing, continuing until thereafter amended in accordance with their terms, the Articles of Incorporation of the Surviving Company and as provided by the URBC.  The directors and officers of the Surviving Company from and after the Closing shall be the directors and officers of GPDB immediately prior to the Closing.

Conversion of Securities

2.4              At the Effective Time, by virtue of the Merger and without any action on the part of the Acquirer or GPDB, the shares of capital stock of each of GPDB and the Acquirer shall be converted as follows:

	
(a)  

	
Capital Stock of the Acquirer. Each issued and outstanding share of the Acquirer's capital stock shall continue to be issued and outstanding and shall be converted into one share of validly issued, fully paid, and non-assessable common stock of the Surviving Company. Each stock certificate of the Acquirer evidencing ownership of any such shares shall continue to evidence ownership of such shares of capital stock of the Surviving Company.

	
(b)  

	
Conversion of GPDB Shares. Each GPDB Share that is issued and outstanding at the Effective Time, set forth on Schedule A, shall automatically be cancelled and extinguished and converted, without any action on the part of the holder thereof, into the right to receive 0.371 Acquisition Share for each GPDB Share. All such GPDB Shares, when so converted, shall no longer be outstanding and shall automatically be cancelled and retired and shall cease to exist, and each holder of a certificate representing any such shares shall cease to have any rights with respect thereto, except the right to receive the Acquisition Shares paid in consideration therefor upon the surrender of such certificate in accordance with this Agreement.

	
(c)  

	
Conversion of GPDB Options and GPDB Warrants. Each GPDB Option or GPDB Warrant that is outstanding, whether vested or unvested, at the Effective Time, set forth on Schedule B and Schedule C, shall automatically be cancelled and extinguished and converted, without any action on the part of the holder thereof, into the right to receive 0.371 Acquisition Option or Acquisition Warrant for each GPDB Option or GPDB Warrant. All such GPDB Options and GPDB Warrants, when so converted, shall no longer be outstanding and shall automatically be cancelled and retired and shall cease to exist, and each holder of a certificate representing any such shares shall cease to have any rights with respect thereto, except the right to receive the Acquisition Options or Acquisition Warrants paid in consideration therefor upon the surrender of such instrument evidencing the GPDB Options or GPDB Warrants in accordance with this Agreement.

  

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Dissenting Shareholders

2.5

	
(a)  

	
Notwithstanding any provision of this Agreement to the contrary, each share of GPDB common stock that is issued and outstanding immediately prior to the Closing and that is held by a shareholder of GPDB who has not voted in favor of this Agreement or consented thereto in writing and who shall have otherwise perfected such holder’s dissenters’ rights in accordance with and as contemplated by Section 1302 of the URBC (each such shareholder, a “Dissenting Stockholder”, and each share of GPDB common stock held by such shareholder, a “Dissenting Share”) shall not be canceled, extinguished and converted, but shall be entitled to receive from the Surviving Company the value of the shares of GPDB common stock held by such Dissenting Stockholder as determined pursuant to Section 1302 of the URBC; provided, however, that if such Dissenting Stockholder fails to perfect, or effectively withdraws or loses such holder’s right to appraisal of and payment for such holder’s shares under Section 1302 of the URBC, each share of GPDB common stock of such Dissenting Stockholder shall thereupon be deemed to have been converted into and to have become exchangeable for, as of the Closing, the right to receive shares of Vault common stock, and such share of GPDB common stock shall no longer be a Dissenting Share.  In such event, GPDB shall deliver the number of shares of Vault common stock to which such shareholder is entitled (without interest) upon surrender by such shareholder of the certificate or certificates representing the shares of GPDB common stock held by such shareholder.

	
(b)  

	
GPDB shall give prompt notice to Vault of any demands received by GPDB for appraisal of shares of GPDB common stock.  The Surviving Corporation shall promptly pay to any Dissenting Stockholder any and all amounts due and owing to such holder as a result of any settlement of, or determination by a court of proper jurisdiction of the State of Utah with respect to such demands.

 

Cancellation Shares

2.6              All Cancellation Shares owned by GPDB at the Effective Time, shall automatically be cancelled and extinguished without any action on the part of GPDB.  All such Cancellation Shares, when cancelled shall no longer be outstanding and shall automatically be cancelled and retired and shall cease to exist, and any certificate representing such shares shall cease to have any rights with respect thereto and such shares shall be returned to the capital stock of Vault.

 

ARTICLE 3

REPRESENTATIONS AND WARRANTIES

OF Vault

Representations and Warranties

3.1              Vault and the Acquirer jointly and severally represent and warrant in all material respects to GPDB, with the intent that GPDB will rely thereon in entering into this Agreement and in approving and completing the transactions contemplated hereby, that:

Vault - Corporate Status and Capacity

	
(a)  

	
Incorporation. Vault is a corporation duly incorporated and validly existing under the laws of the State of Nevada, and is in good standing with the office of the Secretary of State for the State of Nevada.  Security Bancorp, a Canadian corporation (“Subsidiary”), is a corporation duly incorporated and validly existing under the applicable laws of Canada;

	
(b)  

	
Carrying on Business. Vault and its subsidiaries, including the Subsidiary, currently do not carry on any material business activity in any jurisdiction. The nature of the Vault Business does not require Vault and its subsidiaries to register or otherwise be qualified to carry on business in any jurisdiction other than the respective states of their organization, where Vault and its subsidiaries  are each dully qualified and authorized to do business;

 

  

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(c)  

	
Corporate Capacity. Vault has the corporate power, capacity and authority to own its assets and to enter into and complete this Agreement. None of Vault’s subsidiaries, except the Subsidiary, has any assets or liabilities;

	
(d)  

	
Reporting Status; Listing. Vault’s common stock is not registered under Section 12(g) of the Exchange Act and Vault voluntarily files reports with the Commission. The Vault Common Shares are quoted on the OTC Bulletin Board under the symbol “VAMA”. None of Vault’s subsidiaries, including the Subsidiary has common stock that is registered under Section 12(g) of the Exchange Act and none of Vault’s subsidiaries is required to file current reports with Commission pursuant to Section 13(a) or 15(d) of the Exchange Act;

	
(e)  

	
SEC Reports. Vault has filed all SEC Reports with the Commission under the Exchange Act that it would have been required to file if its common stock had been registered under Section 12(g) of the Exchange Act. The SEC Reports, at the time filed, complied as to form in all material respects with the requirements of the Exchange Act. None of the SEC Reports, including without limitation any financial statements or schedules included therein, contains any untrue statements of a material fact or omits to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading;

Acquirer - Corporate Status and Capacity

	
(f)  

	
Incorporation. The Acquirer is a corporation duly incorporated and validly existing under the laws of the State of Nevada, and is in good standing with the office of the Secretary of State for the State of Nevada;

	
(g)  

	
Carrying on Business. Other than corporate formation and organization, the Acquirer has not carried on business activities to date;

	
(h)  

	
Corporate Capacity. The Acquirer has the corporate power, capacity and authority to enter into and complete this Agreement;

 
  Vault
  - Capitalization

	
(i)  

	
Authorized Capital. The authorized capital of Vault consists of 100,000,000 shares of common stock, $0.001 par value, 5,000,000 shares of Preferred A Stock, $0.001 par value, and 5,000,000 shares of Preferred B Stock, , $0.001 par value, of which  1,144,324 Vault Common Shares are presently issued and outstanding, 790 shares of Preferred “A” are presently issued and outstanding and 1,000 shares of Preferred “B” are presently issued and outstanding.  The authorized capital of the Subsidiary consists of 100,000 common shares;

	
(j)  

	
No Option. Except as provided in, contemplated by, or set forth in this Agreement, the SEC Reports, the PPM or the Subscription Agreements, no person, firm or corporation has any agreement or option or any right capable of becoming an agreement or option for the acquisition of any common or preferred shares of Vault or for the purchase, subscription or issuance of any of the unissued shares in the capital of Vault;

Acquirer - Capitalization

	
(k)  

	
Authorized Capital. The authorized capital of the Acquirer consists of 3,000 shares of common stock, of which 1,000 shares of common stock are presently issued and outstanding and which are owned by Vault;

 

  

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(l)  

	
No Option. No person, firm or corporation has any agreement or option or any right capable of becoming an agreement or option for the acquisition of any common or preferred shares in Acquirer or for the purchase, subscription or issuance of any of the unissued shares in the capital of Acquirer;

 
  Vault - Records and Financial Statements

  

	
(m)  

	
Charter Documents. The charter documents of Vault, the Subsidiary and the Acquirer are as set forth as exhibits to the officers certificate to be delivered at Closing pursuant to Section 9.3 hereof;

	
(n)  

	
Corporate Minute Books.  Vault and its subsidiaries, including the Subsidiary are not in violation or breach of, or in default with respect to, any term of their respective Certificates of Incorporation (or other charter documents) or by-laws;

	
(o)  

	
Vault Financial Statements. The Vault Financial Statements present fairly, in all material respects, the assets and liabilities (whether accrued, absolute, contingent or otherwise) of Vault, including the assets and liabilities, if any of Vault’s subsidiaries, as of the respective dates thereof, and the results of operations and changes in financial position of Vault during the period covered thereby, in all material respects and have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods indicated;

	
(p)  

	
Vault Accounts Payable and Liabilities. There are no liabilities, contingent or otherwise, of Vault or its subsidiaries, including the Subsidiary which are not reflected in the Vault Financial Statements except those incurred in the ordinary course of business since the date of the Vault Financial Statements, all of which will be satisfied prior to Closing, and neither Vault nor its subsidiaries have guaranteed or agreed to guarantee any debt, liability or other obligation of any person, firm or corporation;

	
(q)  

	
Vault Accounts Receivable. There are no accounts receivable of Vault or any of Vault’s subsidiaries, including the Subsidiary;

	
(r)  

	
No Debt. Neither Vault nor its subsidiaries, including the Subsidiary are, on the date hereof and on Closing will be, materially indebted to any, person or entity or other third party, including any  affiliate, director or officer of Vault.

	
(s)  

	
No Related Party Debt to Vault. No director or officer or affiliate of Vault or its subsidiaries, including the Subsidiary is now indebted to or under any financial obligation to Vault or its subsidiaries on any account whatsoever, except for advances on account of travel and other expenses not exceeding One Thousand Dollars ($1,000) in total;

	
(t)  

	
No Dividends. No dividends or other distributions on any shares in the capital of Vault or the Subsidiary have been made, declared or authorized since the date of the Vault Financial Statements;

	
(u)  

	
No Payments. No payments of any kind have been made or authorized since the date of the Vault Financial Statements to or on behalf of officers, directors, shareholders or employees of Vault or its subsidiaries or under any management agreements with Vault or its subsidiaries, except payments made in the ordinary course of business and at the regular rates of salary or other remuneration payable to them;

	
(v)  

	
No Pension Plans. There are no pension, profit sharing, group insurance or similar plans or other deferred compensation plans affecting Vault or its subsidiaries;

	
(w)  

	
No Adverse Events. Since October 31, 2011,

 

  

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(i)  

	
there has not been any material adverse change in the properties, results of operations, financial position or condition (financial or otherwise) of Vault, its subsidiaries, its assets or liabilities or any damage, loss or other change in circumstances materially affecting Vault, the Vault Business or Vault’s right to carry on the Vault Business, other than non-material changes in the ordinary course of business or as contemplated pursuant to this Agreement,

	
(ii)  

	
there has not been any damage, destruction, loss or other event (whether or not covered by insurance) materially and adversely affecting Vault, its subsidiaries, or the Vault Business,

	
(iii)  

	
there has not been any material increase in the compensation payable or to become payable by Vault to any of Vault’s officers, employees or agents or any bonus, payment or arrangement made to or with any of them,

	
(iv)  

	
the Vault Business has been and continues to be carried on in the ordinary course,

	
(v)  

	
Vault has not waived or surrendered any right of material value,

	
(vi)  

	
Neither Vault nor its subsidiaries, including the Subsidiary  have discharged, satisfied or paid any lien or encumbrance or obligation or liability other than current liabilities in the ordinary course of business; and

	
(vii)  

	
no capital expenditures in excess of Five Thousand Dollars ($5,000) have been authorized or made by Vault.

Vault - Income Tax Matters

	
(x)  

	
Tax Returns. As of the Closing Date, tax returns for 2011, 2010, 2009 and 2008 and reports of Vault and its subsidiaries, including the Subsidiary, required by law to be filed have been filed and are true, complete and correct, and any taxes payable in accordance with any return filed by Vault and its subsidiaries, including the Subsidiary or in accordance with any notice of assessment or reassessment issued by any taxing authority have been so paid and no amounts are owed to any taxing authority as of the Closing Date. Without limiting the generality of the foregoing, Vault hereby represents that no amounts are owed to any taxing authorities by Vault and/or its subsidiaries, including the Subsidiary, for the period commencing on the formation(incorporation) of Vault though the Closing Date;

	
(y)  

	
Current Taxes. At October 31, 2011, deferred tax assets consisted of $0.00. Vault had a net operating loss carry forward of approximately $3,026,422 at October 31, 2011. Adequate provisions have been made for taxes payable for the current period for which tax returns are not yet required to be filed and there are no agreements, waivers, or other arrangements providing for an extension of time with respect to the filing of any tax return by, or payment of, any tax, governmental charge or deficiency by Vault or its subsidiaries.  There are no contingent tax liabilities or any grounds which would prompt a reassessment including aggressive treatment of income and expenses in filing earlier tax returns for Vault or its subsidiaries including the Subsidiary;

Vault - Applicable Laws and Legal Matters

	
(z)  

	
Licenses. Vault and its subsidiaries hold all licenses and permits as may be requisite for carrying on the Vault Business in the manner in which it has heretofore been carried on, which licenses and permits have been maintained and continue to be in good standing except where the failure to obtain or maintain such licenses or permits would not have a material adverse effect on the Vault Business;

 

  

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(aa)  

	
Applicable Laws. Neither Vault nor its subsidiaries have been charged with or received notice of breach of any laws, ordinances, statutes, regulations, by-laws, orders or decrees to which they are subject or which apply to them the violation of which would have a material adverse effect on the Vault Business, and to Vault’s knowledge, neither Vault nor its subsidiaries are in breach of any laws, ordinances, statutes, regulations, bylaws, orders or decrees the contravention of which would result in a material adverse impact on the Vault Business;

	
(bb)  

	
Pending or Threatened Litigation. Except as provided in the SEC Reports, there is no litigation or administrative or governmental proceeding pending or threatened against or relating to Vault, its subsidiaries, or the Vault Business nor does Vault have any knowledge of any act or omission of Vault or its subsidiaries that would form any material basis for any such action or proceeding;

	
(cc)  

	
No Bankruptcy. Neither Vault nor its subsidiaries have made any voluntary assignment or proposal under applicable laws relating to insolvency and bankruptcy and no bankruptcy petition has been filed or presented against Vault or its subsidiaries and no order has been made or a resolution passed for the winding-up, dissolution or liquidation of Vault or its subsidiaries;

	
(dd)  

	
Labor Matters. Neither Vault nor its subsidiaries are party to any collective agreement relating to the Vault Business with any labor union or other association of employees and no part of the Vault Business has been certified as a unit appropriate for collective bargaining or, to the knowledge of Vault, has made any attempt in that regard;

	
(ee)  

	
Finder's Fees. Neither Vault nor its subsidiaries are party to any agreement which provides for the payment of finder's fees, brokerage fees, commissions or other fees or amounts which are or may become payable to any third party in connection with the execution and delivery of this Agreement and the transactions contemplated herein;

Execution and Performance of Agreement

	
(ff)  

	
Authorization and Enforceability. The execution and delivery of this Agreement, and the completion of the transactions contemplated hereby, have been duly and validly authorized by all necessary corporate action on the part of Vault, the Subsidiary and the Acquirer;

	
(gg)  

	
No Violation or Breach. The execution and performance of this Agreement will not:

	
(i)  

	
violate the charter documents of Vault, the Subsidiary or the Acquirer or result in any breach of, or default under, any loan agreement, mortgage, deed of trust, or any other agreement to which Vault or its subsidiaries are party,

	
(ii)  

	
give any person any right to terminate or cancel any agreement or any right or rights enjoyed by Vault or its subsidiaries,

	
(iii)  

	
result in any alteration of Vault’s or its subsidiaries’ obligations under any agreement to which Vault or its subsidiaries are party,

	
(iv)  

	
result in the creation or imposition of any lien, encumbrance or restriction of any nature whatsoever in favor of a third party upon or against the assets of Vault,

	
(v)  

	
result in the imposition of any tax liability to Vault or its subsidiaries relating to the assets of Vault, or

	
(vi)  

	
violate any court order or decree to which either Vault or its subsidiaries is subject;

  

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The Vault Business

	
(hh)  

	
Maintenance of Business. Since the date of the Vault Financial Statements, Vault and its subsidiaries have not entered into any material agreement or commitment except in the ordinary course and except as provided in, contemplated by, or set forth in this Agreement, the PPM, the Subscription Agreements or in the SEC Reports;

	
(ii)  

	
Subsidiaries. Except for the Acquirer and the Subsidiary, Vault does not own any subsidiaries and does not otherwise own, directly or indirectly, any shares or interest in any other corporation, partnership, joint venture or firm.  References in this Agreement to any subsidiaries of the Vault shall include the Acquirer, the Subsidiary and any other subsidiary that Vault may have but has not disclosed in this Agreement;

Vault - Acquisition Shares

	
(jj)  

	
Acquisition Shares. The Acquisition Shares when delivered to the holders of GPDB Shares pursuant to the Merger shall be validly issued and outstanding as fully paid and non-assessable shares and the Acquisition Shares shall be transferable upon the books of Vault, in all cases subject to the provisions and restrictions of all applicable securities laws; and

	
(kk)  

	
Securities Law Compliance.  Except as set forth in the SEC Reports, Vault has not issued any shares of its common stock (or securities convertible into or exercisable for shares of common stock).  Neither Vault nor any person acting on its behalf has taken or will take any action (including, without limitation, any offering of any securities of Vault under circumstances which would require the integration of such offering with the offering of the Acquisition Shares issued to the GPDB Shareholders) which subject the issuance or sale of such shares to the GPDB Shareholders to the registration requirements of Section 5 of the Securities Act.

Non-Merger and Survival

3.2              The representations and warranties of Vault and the Acquirer contained herein are true and correct as of the date of this Agreement and will be true at and as of Closing in all material respects as though such representations and warranties were made as of such time.  Notwithstanding the completion of the transactions contemplated hereby, the waiver of any condition contained herein (unless such waiver expressly releases a party from any such representation or warranty) or any investigation made by the GPDB Shareholders, the representations and warranties of Vault shall survive the Closing for a period of two (2) years.

Indemnity

3.3              Vault shall defend, indemnify and save harmless GPDB from and against any and all claims, demands, actions, suits, proceedings, assessments, judgments, damages, costs, losses and expenses, including any payment made in good faith in settlement of any claim, resulting from the breach by Vault of any representation, covenant or warranty made under this Agreement or from any misrepresentation in or omission from any certificate or other instrument furnished or to be furnished by Vault and/or the Acquirer to GPDB hereunder. Legal fees and other costs of defending and prosecuting this action shall be borne by Vault.

ARTICLE 4

COVENANTS OF VAULT

Covenants

4.1              Vault covenants and agrees with GPDB that Vault will:

 

  

11

  

	
(a)  

	
Conduct of Business. Until the Closing, conduct its business diligently and in the ordinary course consistent with the manner in which it generally has been operated up to the date of execution of this Agreement;

	
(b)  

	
Access. Until the Closing, give the GPDB Shareholders and their representatives full access to all of the properties, books, contracts, commitments and records of GPDB, and furnish to the GPDB Shareholders and their representatives all such information as they may reasonably request;

	
(c)  

	
Procure Consents. Until the Closing, take all reasonable steps required to obtain, prior to Closing, any and all third party consents required to permit the Merger;

	
(d)  

	
Public Information.  Make and keep public information available, as those terms are understood and defined in Rule 144 (defined below); and

	
(e)  

	
SEC Filings.  File with the Commission in a timely manner, all reports and other documents required of Vault under either the Securities Act or the Exchange Act.

	
(f)  

	
Tax Returns.  Vault shall on and after the Closing Date be responsible for any taxes owed or penalties thereon pertaining to the failure of Vault and its subsidiaries to file tax returns with the appropriate jurisdictions, but Vault shall not be liable for expenses incurred in filing any such tax returns other than for the years set forth in Section 3.1(x).

Authorization

4.2          Vault hereby agrees to authorize and direct any and all federal, state, municipal, foreign and international governments and regulatory authorities having jurisdiction respecting Vault and its subsidiaries to release any and all information in their possession respecting Vault and its subsidiaries to GPDB. Vault shall promptly execute and deliver to GPDB any and all consents to the release of information and specific authorizations which GPDB reasonably requires to gain access to any and all such information.

Reports Under the Exchange Act

4.3          With a view to making available to the GPDB Shareholders the benefits of Rule 144 promulgated under the Securities Act or any other similar rule or regulation of the Commission that may at any time permit the GPDB Shareholders to sell securities of Vault to the public without registration and without imposing restrictions arising under the federal securities laws on the purchases thereof (“Rule 144”), and provided that the applicable holding period imposed by Rule 144 has been met, Vault agrees to furnish to each GPDB Shareholder, so long as such GPDB Shareholder owns Vault Common Shares, promptly upon request, (i) a written statement by Vault that it has complied with the reporting requirements of Rule 144, the Securities Act and the Exchange Act, (ii) a copy of the most recent annual or quarterly report of Vault and such other reports and documents so filed by Vault, and (iii) such other information as may be reasonably requested to permit the GPDB Shareholders to sell such securities pursuant to Rule 144 without registration.

Survival

4.4 The covenants set forth in this Article shall survive the Closing for the benefit of the GPDB Shareholders.

 

 

  

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ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF

GPDB

Representations and Warranties

5.1              GPDB represents and warrants in all material respects to Vault, with the intent that it will rely thereon in entering into this Agreement and in approving and completing the transactions contemplated hereby, that:

GPDB - Corporate Status and Capacity

	
(a)  

	
Incorporation. GPDB is a corporation duly incorporated and validly existing under the laws of the State of Utah, and is in good standing with the office of the Secretary of State for the State of Utah;

	
(b)  

	
Carrying on Business. GPDB carries on business primarily in the State of Utah and California and does not carry on any material business activity in any other jurisdiction. The nature of the GPDB Business does not require GPDB to register or otherwise be qualified to carry on business in any other jurisdiction;

	
(c)  

	
Corporate Capacity. GPDB has the corporate power, capacity and authority to own the GPDB Assets and to carry on the GPDB Business and GPDB has the corporate power, capacity and authority to enter into and complete this Agreement;

GPDB - Capitalization

	
(d)  

	
Authorized Capital. The authorized capital of GPDB consists of 100,000,000 shares of common stock, no par value;

	
(e)  

	
Ownership of GPDB Shares. The issued and outstanding share capital of GPDB will on Closing consist of 26,735,925 common shares (being the GPDB Shares), which shares on Closing shall be validly issued and outstanding as fully paid and non-assessable shares. The GPDB Shareholders will be at Closing the registered and beneficial owner of the GPDB Shares. The GPDB Shares owned by the GPDB Shareholders will on Closing be free and clear of any and all liens, charges, pledges, encumbrances, restrictions on transfer and adverse claims whatsoever not created by or through Vault and/or the Acquirer;

	
  

	 

	
(f)  

	
No Restrictions. There are no restrictions on the transfer, sale or other disposition of GPDB Shares contained in the charter documents of GPDB or under any agreement;

GPDB - Records and Financial Statements

	
(g)  

	
Charter Documents. The charter documents of GPDB have not been altered since its incorporation date, except as filed in the record books of GPDB, and GPDB is not in violation or breach of, or in default with respect to, any term of its Articles of Incorporation (or other charter documents) or by-laws;

	
(h)  

	
GPDB Financial Statements. The GPDB Financial Statements present fairly, in all material respects, the assets and liabilities (whether accrued, absolute, contingent or otherwise) of GPDB as of the respective dates thereof, and the results of operations and changes in financial position of GPDB during the periods covered thereby, and will be prepared in accordance with generally accepted accounting principles consistently applied throughout the periods indicated;

	
(i)  

	
GPDB Accounts Payable and Liabilities. There are no material liabilities, contingent or otherwise, of GPDB which are not reflected in the GPDB Financial Statements except those incurred in the ordinary course of business since the date of the GPDB Financial Statements;

 

  

13

  

	
(j)  

	
No Dividends. No dividends or other distributions on any shares in the capital of GPDB have been made, declared or authorized since the date of the GPDB Financial Statements;

	
  

	 

  GPDB - Income Tax Matters

	
(k)  

	
Tax Returns. All tax returns and reports of GPDB required by law to be filed have been filed and to the best of GPDB’s knowledge and belief are true, complete and correct, and any taxes payable in accordance with any return filed by GPDB or in accordance with any notice of assessment or reassessment issued by any taxing authority have been so paid;

	
(l)  

	
Current Taxes. Adequate provisions have been made for taxes payable for the current period for which tax returns are not yet required to be filed and there are no agreements, waivers, or other arrangements providing for an extension of time with respect to the filing of any tax return by, or payment of, any tax, governmental charge or deficiency by GPDB. GPDB is not aware of any contingent tax liabilities or any grounds which would prompt a reassessment including aggressive treatment of income and expenses in filing earlier tax returns;

  GPDB - Applicable Laws and Legal Matters

	
(m)  

	
Licenses. GPDB holds all licenses and permits as may be requisite for carrying on the GPDB Business in the manner in which it has heretofore been carried on, which licenses and permits have been maintained and continue to be in good standing except where the failure to obtain or maintain such licenses or permits would not have a material adverse effect on the GPDB Business;

	
(n)  

	
Applicable Laws. GPDB has not been charged with or received notice of breach of any laws, ordinances, statutes, regulations, by-laws, orders or decrees to which it is subject or which applies to it the violation of which would have a material adverse effect on the GPDB Business, and, to GPDB’s knowledge and belief, GPDB is not in breach of any laws, ordinances, statutes, regulations, by-laws, orders or decrees the contravention of which would result in a material adverse impact on the GPDB Business;

	
(o)  

	
Pending or Threatened Litigation. There is no material litigation or administrative or governmental proceeding pending or threatened against or relating to GPDB, the GPDB Business, or any of the GPDB Assets, nor does GPDB have any knowledge of any deliberate act or omission of GPDB that would form any material basis for any such action or proceeding;

	
(p)  

	
No Bankruptcy. GPDB has not made any voluntary assignment or proposal under applicable laws relating to insolvency and bankruptcy and no bankruptcy petition has been filed or presented against GPDB and no order has been made or a resolution passed for the winding-up, dissolution or liquidation of GPDB;

	
(q)  

	
Labor Matters. GPDB is not a party to any collective agreement relating to the GPDB Business with any labor union or other association of employees and no part of the GPDB Business has been certified as a unit appropriate for collective bargaining or, to the knowledge of GPDB, has made any attempt in that regard and GPDB has no reason to believe that any current employees will leave GPDB's employ as a result of this Merger;

	
  

	 

Execution and Performance of Agreement

	
(r)  

	
Authorization and Enforceability. The execution and delivery of this Agreement, and the completion of the transactions contemplated hereby, have been duly and validly authorized by all necessary corporate action on the part of GPDB and the GPDB Shareholders;

	
(s)  

	
No Violation or Breach. The execution and performance of this Agreement will not

 

  

14

  

 

	
(i)  

	
violate the charter documents of GPDB or result in any breach of, or default under, any loan agreement, mortgage, deed of trust, or any other agreement to which GPDB is a party,

	
(ii)  

	
except as provided in, contemplated by, or set forth in the PPM or the Subscription Agreements, give any person any right to terminate or cancel any agreement including, without limitation, GPDB Material Contracts, or any right or rights enjoyed by GPDB,

	
(iii)  

	
except as provided in, contemplated by, or set forth in the PPM or the Subscription Agreements, result in any material alteration of GPDB's obligations under any agreement to which GPDB is a party including, without limitation, the GPDB Material Contracts,

	
(iv)  

	
result in the creation or imposition of any lien, encumbrance or restriction of any nature whatsoever in favor of a third party upon or against the GPDB Assets,

	
(v)  

	
result in the imposition of any tax liability to GPDB relating to GPDB Assets or the GPDB Shares, or

	
(vi)  

	
violate any court order or decree to which GPDB is subject;

GPDB Assets - Ownership and Condition

	
  

	 

	
(t)  

	
No Option. Except as provided in, contemplated by, or set forth in the PPM or the Subscription Agreements, no person, firm or corporation has any agreement or option or a right capable of becoming an agreement for the purchase of any of the GPDB Assets;

	
  

	 

	
(u)  

	
GPDB Material Contracts. Except as provided in, contemplated by, or set forth in the PPM or the Subscription Agreements, the GPDB Material Contracts constitute all of the material contracts of GPDB;

	
(v)  

	
No Default. There has not been any default in any material obligation of GPDB or any other party to be performed under any of the GPDB Material Contracts, each of which is in good standing and in full force and effect and unamended, and GPDB is not aware of any default in the obligations of any other party to any of the GPDB Material Contracts;

	
  

	 

  GPDB Assets - GPDB Goodwill and Other Assets

	
(w)  

	
GPDB does not have any knowledge of any infringement by GPDB of any patent, trademark, copyright or trade secret;

The Business of GPDB

	
(x)  

	
Maintenance of Business. Since the date of the GPDB Financial Statements, the GPDB Business has been carried on in the ordinary course, and GPDB has not entered into any material agreement or commitment except in the ordinary course or as provided in, contemplated by, or set forth in the PPM or the Subscription Agreements; and

	
(y)  

	
Subsidiaries. GPDB does not have any subsidiaries and does not otherwise own, directly or indirectly, any shares or interest in any other corporation, partnership, joint venture or firm.

Non-Merger and Survival

5.2              The representations and warranties of GPDB contained herein will be true at and as of Closing in all material respects as though such representations and warranties were made as of such time.  Notwithstanding the completion of the transactions contemplated hereby, the waiver of any condition contained herein (unless such waiver expressly releases a party from any such representation or warranty) or any investigation made by Vault, the representations and warranties of GPDB shall survive the Closing for a period of two (2) years.

 

  

15

  

Indemnity

5.3              GPDB agrees to indemnify and save harmless Vault from and against any and all claims, demands, actions, suits, proceedings, assessments, judgments, damages, costs, losses and expenses, including any payment made in good faith in settlement of any claim (subject to the right of GPDB to defend any such claim), resulting from the breach by GPDB of any representation or warranty of GPDB made under this Agreement or from any misrepresentation in or omission from any certificate or other instrument furnished or to be furnished by GPDB to Vault hereunder.  Legal fees and other costs of defending and prosecuting this action shall be borne by GPDB.

ARTICLE 6

COVENANTS OF GPDB

Covenants

6.1              GPDB covenants and agrees with Vault that it will:

	
(a)  

	
Conduct of Business. Until the Closing, conduct the GPDB Business diligently and in the ordinary course consistent with the manner in which the GPDB Business generally has been operated up to the date of execution of this Agreement;

	
(b)  

	
Preservation of Business.  Until the Closing, use their best efforts to preserve the GPDB Business and the GPDB Assets;

	
  

	 

	
(c)  

	
Procure Consents. Until the Closing, take all reasonable steps required to obtain, prior to Closing, any and all third party consents required to permit the Merger and to preserve and maintain the GPDB Assets, including the GPDB Material Contracts; and

	
(d)  

	
Reporting and Internal Controls. From and after the Effective Time, forthwith take all required actions to implement internal controls on the business of the Surviving Company to ensure that the Surviving Company complies with Section 13(b)(2) of the Exchange Act.

Authorization

6.2              GPDB hereby agrees to authorize and direct any and all federal, state, municipal, foreign and international governments and regulatory authorities having jurisdiction respecting GPDB to release any and all information in their possession respecting GPDB to Vault.  GPDB shall promptly execute and deliver to Vault any and all consents to the release of information and specific authorizations which Vault reasonably require to gain access to any and all such information.

Survival

6.3              The covenants set forth in this Article shall survive the Closing for the benefit of Vault.

ARTICLE 7

CONDITIONS PRECEDENT

Conditions Precedent in favor of Vault

7.1              Vault’s obligations to carry out the transactions contemplated hereby are subject to the fulfillment (or waiver by Vault) of each of the following conditions precedent on or before the Closing:

 

  

16

  

	
(a)  

	
all documents or copies of documents, securities issuances and wire transfers required to be executed and delivered to Vault as set forth in Article 9 hereof will have been so executed and delivered;

	
(b)  

	
all of the terms, covenants and conditions of this Agreement to be complied with or performed by GPDB at or prior to the Closing will have been complied with or performed;

	
  

	 

	
(c)  

	
title to the GPDB Shares held by the GPDB Shareholders will be free and clear of all mortgages, liens, charges, pledges, security interests, encumbrances or other claims whatsoever not created by or through Vault and/or the Acquirer;

	
(d)  

	
the Certificates of Merger shall be executed by GPDB in form acceptable for filing with the Nevada and Utah Secretary of State;

	
(e)  

	
subject to Article 8 hereof, there will not have occurred:

	
  

	 

	
(i)  

	
any material adverse change in the financial position or condition of GPDB, its liabilities or the GPDB Assets or any damage, loss or other change in circumstances materially and adversely affecting the GPDB Business or the GPDB Assets or GPDB's right to carry on the GPDB Business, other than changes in the ordinary course of business, none of which has been materially adverse, or

	
(ii)  

	
any damage, destruction, loss or other event, including changes to any laws or statutes applicable to GPDB or the GPDB Business (whether or not covered by insurance) materially and adversely affecting GPDB, the GPDB Business or the GPDB Assets;

	
  

	 

	
(f)  

	
the transactions contemplated hereby shall have been approved by all other regulatory authorities having jurisdiction over the subject matter hereof, if any;

	
(g)  

	
all representations and warranties of GPDB contained herein shall be true and correct as of the Closing Date;

	
(h)  

	
GPDB shall have no more assets and no liabilties; and

	
(i)  

	
All payments under the Common Stock Purchase Agreement shall have been made or irrevocably caused to be made to Vault.

Waiver by Vault

7.2              The conditions precedent set out in the preceding section are inserted for the exclusive benefit of Vault and any such condition may be waived in whole or in part by Vault at or prior to Closing by delivering to GPDB a written waiver to that effect signed by Vault. In the event that the conditions precedent set out in the preceding section are not satisfied on or before the Closing, Vault shall be released from all obligations under this Agreement.

Conditions Precedent in Favor of GPDB

7.3              The obligations of GPDB to carry out the transactions contemplated hereby are subject to the fulfillment of each of the following conditions precedent on or before the Closing:

	
(a)  

	
all documents or copies of documents, securities issuances and wire transfers required to be executed and delivered to Vault as set forth in Article 9 hereof will have been so executed and delivered;

	
(b)  

	
the board of directors of Vault shall have expanded the number of directors by one in a form reasonably acceptable to GPDB, and Rod A. Smith shall have been appointed to Vault’s board of directors in a form reasonably acceptable to GPDB;

 

  

17

  

	
(c)  

	
except for Harold Schultz and Rod A. Smith, all directors of the board of directors of Vault shall have resigned and Harold Shcultz shall have tendered his resignation which resignation is to be effective upon filing Vault’s quarterly report for the quarter ended January 31, 2012 with the Commission;

	
(d)  

	
GPDB shall be in receipt of the Vault Financial Statements;

	
(e)  

	
Vault shall have no assets and no liabilities;

	
(f)  

	
all of the terms, covenants and conditions of this Agreement to be complied with or performed by Vault or the Acquirer at or prior to the Closing shall have been complied with or performed;

	
(g)  

	
GPDB shall have completed its review and inspection of the books and records of Vault and its subsidiaries and shall be reasonably satisfied with same in all material respects;

	
(h)  

	
Vault will have delivered the Acquisition Shares to be issued pursuant to the terms of the Merger to the GPDB Shareholders at the Closing and the Acquisition Shares will be registered on the books of Vault in the name of the GPDB Shareholders at the Effective Time;

	
(i)  

	
title to the Acquisition Shares will be free and clear of all mortgages, liens, charges, pledges, security interests, encumbrances or other claims whatsoever;

	
(j)  

	
the Certificates of Merger shall be executed by the Acquirer in form acceptable for filing with the Nevada and Utah Secretary of State;

	
(k)  

	
subject to Article 8 hereof, there will not have occurred

	
(i)  

	
any material adverse change in the financial position or condition of Vault, its subsidiaries, their assets or liabilities or any damage, loss or other change in circumstances materially and adversely affecting Vault or the Vault Business or Vault’s right to carry on the Vault Business, other than changes in the ordinary course of business, none of which has been materially adverse, or

	
(ii)  

	
any damage, destruction, loss or other event, including changes to any laws or statutes applicable to Vault or the Vault Business (whether or not covered by insurance) materially and adversely affecting Vault, its subsidiaries or its assets;

	
(j)  

	
the transactions contemplated hereby shall have been approved by all other regulatory authorities having jurisdiction over the subject matter hereof, if any; and

	
(k)  

	
all representations and warranties of Vault and the Acquirer contained herein shall be true and correct as of the Closing Date.

	
(l)  

	
Vault shall prepare appropriate tax returns for Vault and any of its subsidiaries as contemplated in Section 3.1(x) and shall submit such return to GPDB for its review and comment; Vault shall incorporate any reasonable comments of GPDB into such tax returns and after Vault shall file such returns with the appropriate jurisdiction. Vault shall pay and be responsible for all filing fees, penalties and payments related to such tax returns;

	
(m)  

	
All deliveries of securities under the Common Stock Purchase Agreement shall have been made or irrevocably caused to be made to GPDB; and

	
(n)  

	
An opinion of counsel to Vault reasonably acceptable to GPDB shall be delivered.

 

  

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Waiver by GPDB

7.4              The conditions precedent set out in the preceding section are inserted for the exclusive benefit of GPDB and any such condition may be waived in whole or in part by GPDB at or prior to the Closing by delivering to Vault a written waiver to that effect signed by GPDB. In the event that the conditions precedent set out in the preceding section are not satisfied on or before the Closing GPDB shall be released from all obligations under this Agreement.

Nature of Conditions Precedent

7.5              The conditions precedent set forth in this Article are conditions of completion of the transactions contemplated by this Agreement and are not conditions precedent to the existence of a binding agreement. Each party acknowledges receipt of the sum of $1.00 and other good and valuable consideration as separate and distinct consideration for agreeing to the conditions precedent in favor of the other party or parties set forth in this Article.

Confidentiality

7.6              Notwithstanding any provision herein to the contrary, the parties hereto agree that the existence and terms of this Agreement are confidential and that if this Agreement is terminated pursuant to the preceding section the parties agree to return to one another any and all financial, technical and business documents delivered to the other party or parties in connection with the negotiation and execution of this Agreement and shall keep the terms of this Agreement and all information and documents received from GPDB and Vault and the contents thereof confidential and not utilize nor reveal or release same, provided, however, that Vault may be required to issue news releases regarding the execution and consummation of this Agreement and file a Current Report on Form 8-K with the Commission respecting the proposed Merger contemplated hereby together with such other documents as are required to maintain the accuracy of Vault’s filings with the Commission.

ARTICLE 8

RISK

Material Change in the Business of GPDB

8.1              If any material loss or damage to the GPDB Business occurs prior to Closing and such loss or damage, in Vault's reasonable opinion, cannot be substantially repaired or replaced within sixty (60) days, Vault shall, within two (2) days following any such loss or damage, by notice in writing to GPDB, at its option, either:

	
(a)  

	
terminate this Agreement, in which case no party will be under any further obligation to any other party; or

	
(b)  

	
elect to complete the Merger and the other transactions contemplated hereby, in which case the proceeds and the rights to receive the proceeds of all insurance covering such loss or damage will, as a condition precedent to Vault's obligations to carry out the transactions contemplated hereby, be vested in GPDB or otherwise adequately secured to the satisfaction of Vault on or before the Closing Date.

Material Change in the Vault Business

8.2              If any material loss or damage to the Vault Business occurs prior to Closing and such loss or damage, in GPDB's reasonable opinion, cannot be substantially repaired or replaced within sixty (60) days, GPDB shall, within two (2) days following any such loss or damage, by notice in writing to Vault, at its option, either:

	
(a)  

	
terminate this Agreement, in which case no party will be under any further obligation to any other party; or

	
(b)  

	
elect to complete the Merger and the other transactions contemplated hereby, in which case the proceeds and the rights to receive the proceeds of all insurance covering such loss or damage will, as a condition precedent to GPDB's obligations to carry out the transactions contemplated hereby, be vested in Vault or otherwise adequately secured to the satisfaction of GPDB on or before the Closing Date.

 

  

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ARTICLE 9

CLOSING

Closing

9.1              The Merger and the other transactions contemplated by this Agreement will be closed on or before February 29, 2012, in accordance with the closing procedure set out in this Article.

Documents to be Delivered by GPDB

9.2              On or before the Closing, GPDB will deliver or cause to be delivered to Vault:

	
  

	 

	
(a)  

	
all reasonable consents or approvals required to be obtained by GPDB for the purposes of completing the Merger and preserving and maintaining the interests of GPDB under any and all GPDB Material Contracts and in relation to GPDB Assets;

	
(b)  

	
an officers certificate containing articles, bylaws, and certified copies of such resolutions of the shareholders and directors of GPDB as are required to be passed to authorize the execution, delivery and implementation of this Agreement;

	
(c)  

	
an acknowledgement from GPDB of the satisfaction of the conditions precedent set forth in section 7.1 hereof;

	
(d)  

	
such other documents as Vault may reasonably require to give effect to the terms and intention of this Agreement.

Documents to be Delivered by Vault

9.3              On or before the Closing, Vault and the Acquirer shall deliver or cause to be delivered to GPDB:

	
(a)  

	
a transfer agent instruction letter for issuance of the Acquistion Shares to the GPDB  Shareholders;

	
(b)  

	
an officers certificate containing articles, bylaws, and certified copies of such resolutions of the directors of Vault and the Acquirer as are required to be passed to authorize the execution, delivery and implementation of this Agreement;

	
(c)  

	
a certified copy of a resolution of the directors of Vault dated as of the Closing Date appointing the Rod A. Smith to the board of directors of Vault;

	
(d)  

	
an acknowledgement from Vault of the satisfaction of the conditions precedent set forth in section 7.3 hereof;

	
(e)  

	
an opinion of counsel to Vault reasonably acceptable to GPDB;

	
(f)  

	
such other documents as GPDB may reasonably require to give effect to the terms and intention of this Agreement.

	
(g)  

	
proof of the filing of all tax returns referred to in Section 3.1(x) in the appropriate jurisdictions for Vault and any of its subsidiaries.

 

  

20

  

Other Documents and Wires to be Delivered by Vault and GPDB

9.4               On or before the Closing, the following shall be delivered:

	
(a)  

	
Securities representing the Acuquisition Shares, the Acquisition Oprions and the Acquisition Warrants shall be delivered in the amounts and to the parties as set forth in Schedule A, Schedule B and Schedule C.

 
   

ARTICLE 10

POST-CLOSING MATTERS

General

10.1              Forthwith after the Closing, Vault and GPDB agree to use all their best efforts to:

	
(a)  

	
file the Certificates of Merger with the Secretary of State of Nevada and Utah;

	
(b)  

	
issue a news release reasonably acceptable to each party reporting the Closing; and

	
(c)  

	
file a Form 8-K with the Securities and Exchange Commission disclosing the terms of this Agreement which includes audited financial statements of GPDB as well as pro forma financial information of GPDB and Vault as required by Regulation S-X as promulgated by the Commission (all at no cost to the GPDB Shareholders).

 
   

ARTICLE 11

GENERAL PROVISIONS

Arbitration

11.1              The parties hereto shall attempt to resolve any dispute, controversy, difference or claim arising out of or relating to this Agreement by negotiation in good faith.  If such good negotiation fails to resolve such dispute, controversy, difference or claim within thirty (30) days after any party delivers to any other party a notice of its intent to submit such matter to arbitration, then any party to such dispute, controversy, difference or claim may submit such matter to arbitration.

              Any action or proceeding seeking to enforce any provision of, or based upon any right arising out of, this Agreement shall be settled by binding arbitration by a panel of three (3) arbitrators in accordance with the Commercial Arbitration Rules of the American Arbitration Association and governed by the laws of the State of New York (without regard to the choice-of-law rules or principles of that jurisdiction).  Judgment upon the award may be entered in any court located in the State of New York, and all the parties hereto hereby expressly waive any objections or defense based upon lack of personal jurisdiction.

              Each of the plaintiff and defendant party to the arbitration shall select one (1) arbitrator (or where multiple plaintiffs and/or defendants exist, one (1) arbitrator shall be chosen collectively by such parties comprising the plaintiffs and one (1) arbitrator shall be chosen collectively by those parties comprising the defendants) and then the two (2) arbitrators shall mutually agree upon the third arbitrator.  Where no agreement can be reached on the selection of either a third arbitrator or an arbitrator to be named by either a group of plaintiffs or a group of defendants, any implicated party may apply to a judge of the courts of the State of New York, to name an arbitrator.    Process in any such action or proceeding may be served on any party anywhere in the world.

 

  

21

  

Indemnification Provisions

11.2           Notice to Indemnifying Party.  If any party (the "Indemnitee") receives notice of any claim or the commencement of any action or proceeding with respect to which the other party (or parties) is obligated to provide indemnification (the "Indemnifying Party") pursuant to Sections 3.3 or 5.3 hereof, the Indemnitee shall give the Indemnifying Party written notice thereof within a reasonable period of time following the Indemnitee’s receipt of such notice.  Such notice shall describe the claim in reasonable detail and shall indicate the amount (estimated if necessary) of the losses that have been or may be sustained by the Indemnitee.  The Indemnifying Party may, subject to the other provisions of this Section 11.2, compromise or defend, at such Indemnifying Party's own expense and by such Indemnifying Party's own counsel, any such matter involving the asserted liability of the Indemnitee in respect of a third-party claim.  If the Indemnifying Party elects to compromise or defend such asserted liability, it shall within thirty (30) days (or sooner, if the nature of the asserted liability so requires) notify the Indemnitee of its intent to do so, and the Indemnitee, shall reasonably cooperate, at the request and reasonable expense of the Indemnifying Party, in the compromise of, or defense against, such asserted liability.  The Indemnifying Party will not be released from any obligation to indemnify the Indemnitee hereunder with respect to a claim without the prior written consent of the Indemnitee, unless the Indemnifying Party delivers to the Indemnitee a duly executed agreement settling or compromising such claim with no monetary liability to or injunctive relief against the Indemnitee and a complete release of the Indemnitee with respect thereto.  The Indemnifying Party shall have the right to conduct and control the defense of any third-party claim made for which it has been provided notice hereunder.  All costs and fees incurred with respect to any such claim will be borne by the Indemnifying Party.  The Indemnitee will have the right to participate, but not control, at its own expense, the defense or settlement of any such claim; provided, that if the Indemnitee and the Indemnifying Party shall have conflicting claims or defenses, the Indemnifying Party shall not have control of such conflicting claims or defenses and the Indemnitee shall be entitled to appoint a separate counsel for such claims and defenses at the cost and expense of the Indemnifying Party.   If the Indemnifying Party chooses to defend any claim, the Indemnitee shall make available to the Indemnifying Party any books, records or other documents within its control that are reasonably required for such defense.

Notice

11.3              Any notice required or permitted to be given by any party will be deemed to be given when in writing and delivered to the address for notice of the intended recipient by personal delivery, prepaid  certified or registered mail, or Facsimile. Any notice delivered by mail shall be deemed to have been received on the fourth business day after and excluding the date of mailing, except in the event of a disruption in regular postal service in which event such notice shall be deemed to be delivered on the actual date of receipt. Any notice delivered personally or by Facsimile shall be deemed to have been received on the actual date of delivery.

Addresses for Service

11.4              The address for service of notice of each of the parties hereto is as follows:

	
(a)  

	
Vault or the Acquirer:

Harold Schultz

Po Box 15040 RPO Aspenwoods

Calgary Alberta T3H 0N8

Can Phone: 403-719-5401

Can Fax: 403-719-5401

US Phone – 480-279-5277

US Fax – 480-279-5277

Email – halsch1@hotmail.com

	
(b)  

	
GPDB:

The Green PolkaDot Box, Inc.

629 East Quality drive, Ste. 103

American Fork, Utah 84003

Attn:  Rod A. Smith, Chief Executive Officer

Phone: (801) 787-8835

 

  

22

  

With a copy to:

Sichenzia Ross Friedman Ference LLP

61 Broadway

New York, New York 10006

Attn:  Andrea Cataneo, Esq.

Phone:  (212) 930-9700

Facsimiles:  (212) 930-9725

Change of Address

11.5              Any party may, by notice to the other parties change its address for notice to some other address in North America and will so change its address for notice whenever the existing address or notice ceases to be adequate for delivery by hand. A post office box may not be used as an address for service.

Further Assurances

11.6              Each of the parties will execute and deliver such further and other documents and do and perform such further and other acts as any other party may reasonably require to carry out and give effect to the terms and intention of this Agreement.

Time of the Essence

11.7              Time is expressly declared to be the essence of this Agreement.

Entire Agreement

11.8              The provisions contained herein constitute the entire agreement among GPDB, the Acquirer and Vault respecting the subject matter hereof and supersede all previous communications, representations and agreements, whether verbal or written, among GPDB, the Acquirer and Vault with respect to the subject matter hereof.

Enurement

11.9              This Agreement will enure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, successors and permitted assigns.

Assignment

11.10              This Agreement is not assignable without the prior written consent of the parties hereto.

Expenses

11.11               Each party agrees to pay, without right of reimbursement from any other party and regardless of whether or not the transaction is consummated, the costs incurred by it in connection with this transaction, including legal fees and other costs incidental to the negotiation of the terms of the transaction and the preparation of related documentation; notwithstanding anything to the contrary herein, legal fees owed to Brewer & Pritchard PC (some of which relate to the transaction set forth in this Agreement) will be paid at Closing as set forth in Section 9.4 hereof.

Counterparts

11.12              This Agreement may be executed in counterparts, each of which when executed by any party will be deemed to be an original and all of which counterparts will together constitute one and the same Agreement. Delivery of executed copies of this Agreement by Facsimile will constitute proper delivery, provided that originally executed counterparts are delivered to the parties within a reasonable time thereafter.

 

  

23

  

Applicable Law

11.13           This Agreement is subject to the laws of the State of New York.

Termination

11.14           This Agreement may only be terminated at any time prior to the Closing Date:

(a)           upon mutual written consent authorized by the Board of Directors of Vault and GPDB; or

(b)           by either Vault or GPDB if the Closing shall not have been consummated by the close of business on February 29, 2012.

   

   

   

   

   

[Remainder of page intentionally left blank.]

 
 

 

 

 

 

 

  

24

  

 

IN WITNESS WHEREOF the parties have executed this Agreement effective as of the day and year first above written.

 

	 	VAULT AMERICA, INC.	 
	 	 	 
	
 

	
By: /s/
  Harold F. Schultz

	 
	 	Name/Title:	 
	 	 	 
	 	GREEN PD ACQUISITIONS, INC.	 
	 	 	 
	 	By: /s/
  Harold F. Schultz	 
	 	        Name/Title:	 
	 	 	 
	 	THE GREEN POLKADOT BOX, INC.	 
	 	 	 
	 	By: /s/ Rod Smith	 
	 	        Name/Title:	 

 

 

 

 

  

25

  

Schedule A

	
GPDB Shareholder

	 	

  GPDB Shares

	 	

  Acquisition Shares

	
Smith Family Trust

	 	
7,615,000

	 	
2,825,165

	
Smith, Gary or Helen

	 	
2,660,000

	 	
986,860

	
Fugal, Daniel and Jill

	 	
2,069,549

	 	
767,803

	
Karlen, Russ

	 	
1,700,000

	 	
630,700

	
Kammersell, Fred

	 	
1,462,160

	 	
542,461

	
Smith, Rod A.

	 	
1,350,000

	 	
500,850

	
Fugal, Brandon and Lacy

	 	
1,320,000

	 	
489,720

	
Smith, Andrew

	 	
1,120,000

	 	
415,520

	
Scenic Holdings LLC

	 	
1,061,801

	 	
393,928

	
Hoffer, Berkley or Diane

	 	
900,492

	 	
334,083

	
Allen, David or Barbara

	 	
800,000

	 	
296,800

	
Kammersell, Jeffrey S. or Nancy M

	 	
629,713

	 	
233,624

	
Self, Constance L.

	 	
500,000

	 	
185,500

	
Ocean Fund, LLC

	 	
447,578

	 	
166,051

	
Goldberg, David

	 	
433,274

	 	
160,745

	
Kammersell, Matt

	 	
292,240

	 	
108,421

	
James, Patty

	 	
275,137

	 	
102,076

	
Corry, EJ

	 	
270,150

	 	
100,226

	
Carson, Larry and Sandee

	 	
216,766

	 	
80,420

	
Hadfield, Dawn and Lynn

	 	
165,000

	 	
61,215

	
Mayberry, Kevin

	 	
138,537

	 	
51,397

	
Dutton, Zachary

	 	
100,000

	 	
37,100

	
Lange, Michael

	 	
100,000

	 	
37,100

	
Marco, Harry or Mary Ann

	 	
100,000

	 	
37,100

	
Spencer, Samuel and Patrice

	 	
100,000

	 	
37,100

	
Turner, Jim

	 	
100,000

	 	
37,100

	
Kammersell, Melissa

	 	
85,418

	 	
31,690

	
3SP Investments LLC

	 	
80,000

	 	
29,680

	
Hanson, Mark A.

	 	
80,000

	 	
29,680

	
Savage, Sandra or Kelly

	 	
80,000

	 	
29,680

	
Smith, Thomas S. and Susan M

	 	
80,000

	 	
29,680

	
Rice, Daris

	 	
54,000

	 	
20,034

	
Domanski, Teri

	 	
45,000

	 	
16,695

	
Warner, Kimberly

	 	
40,000

	 	
14,840

	
Hymus, David

	 	
25,000

	 	
9,275

	
Nobrega, Ralph

	 	
25,000

	 	
9,275

	
Brownstein, Joel

	 	
20,000

	 	
7,420

	
Haglund, Bruce H.

	 	
20,000

	 	
7,420

	
Hayes, Tim

	 	
20,000

	 	
7,420

	
Houle, David or Laura

	 	
20,000

	 	
7,420

	
Weih, Fred

	 	
20,000

	 	
7,420

	
Jones, Jeni

	 	
16,110

	 	
5,977

	
Rodda, Tony

	 	
15,000

	 	
5,565

	
Codling, Craig

	 	
10,000

	 	
3,710

	
Smith, Dan

	 	
10,000

	 	
3,710

	
Davis, Kevin

	 	
5,000

	 	
1,855

	
Maretich, John

	 	
5,000

	 	
1,855

  

26

  

 

Schedule A (Continued)

	
GPDB Shareholder

	 	

  GPDB Shares

	 	

  Acquisition Shares

	
Maretich, Miles

	 	
5,000

	 	
1,855

	
Robles, Sandra

	 	
5,000

	 	
1,855

	
Smith, Rachel

	 	
5,000

	 	
1,855

	
Stilson, Kim

	 	
5,000

	 	
1,855

	
Zufelt, Carter

	 	
5,000

	 	
1,855

	
Steele, Blake

	 	
3,000

	 	
1,113

	
Bennion, Kiera

	 	
2,500

	 	
928

	
Llavina, Joe

	 	
2,500

	 	
928

	
Smith, Trevor

	 	
2,500

	 	
928

	
Ames, Lauren

	 	
2,000

	 	
742

	
Smith, Olivia

	 	
2,000

	 	
742

	
Warner, Christine

	 	
2,000

	 	
742

	
Burningham, Beau

	 	
1,500

	 	
557

	
Below, Deborah

	 	
1,000

	 	
371

	
Bennion, Annie

	 	
1,000

	 	
371

	
Bennion, Michelle

	 	
1,000

	 	
371

	
Childs, Christian

	 	
1,000

	 	
371

	
Powell, Riley

	 	
1,000

	 	
371

	
Reeves, Brandon

	 	
1,000

	 	
371

	
Sidwell, Brennan

	 	
1,000

	 	
371

	
Stilson, Maddie

	 	
1,000

	 	
371

	
Vialpando, Ryan

	 	
1,000

	 	
371

	
Wilson, Michael

	 	
1,000

	 	
371

	
Totals

	 	
26,735,925

	 	
9,919,028

 

  
   

27

  

 

Schedule B

	
GPDB Optionholders

	 	

  GPDB Options

	 	

  Acquisition Options

	
Janine See - Member Advisory Board

	 	
                           1,200

	 	
                              445

	
Allyson Phillips - Member Advisory Board

	 	
                           1,800

	 	
                              668

	
Judy Sears - Member Advisory Board

	 	
                           4,200

	 	
                           1,558

	
Joan Linton - Member Advisory Board

	 	
                           7,500

	 	
                           2,783

	
Chris Hatch

	 	
                         10,000

	 	
                           3,710

	
Ryan Ratliff - Director of Legendary Member Services

	 	
                         20,000

	 	
                           7,420

	
Suzi Mayer - Product Manager

	 	
                         20,000

	 	
                           7,420

	
Brittany Quinn

	 	
                         20,000

	 	
                           7,420

	
Matt Ricks

	 	
                         20,000

	 	
                           7,420

	
Igor Alexandrov

	 	
                         20,000

	 	
                           7,420

	
Charles Codling - Advisor

	 	
                         20,000

	 	
                           7,420

	
Ronnie Cummins-Advisor

	 	
                         20,000

	 	
                           7,420

	
Jeffrey Smith - Advisor

	 	
                         20,000

	 	
                           7,420

	
Mike Adams - Advisor

	 	
                         20,000

	 	
                           7,420

	
Richard Sheldon - Advisor

	 	
                         20,000

	 	
                           7,420

	
Lauren Bailey - Executive Assistant

	 	
                         33,333

	 	
                         12,367

	
Hunter Smith

	 	
                         50,000

	 	
                         18,550

	
Dillon Smith

	 	
                         50,000

	 	
                         18,550

	
Troy Fullmer - Director of Field Operations

	 	
                         50,000

	 	
                         18,550

	
Jeni Jones

	 	
                         50,000

	 	
                         18,550

	
Jeni Jones

	 	
                         50,000

	 	
                         18,550

	
Wade Melton

	 	
                         50,000

	 	
                         18,550

	
Kat James - Advisor

	 	
                         50,000

	 	
                         18,550

	
Bruce Haglund - Legal Counsel

	 	
                         50,000

	 	
                         18,550

	
Laura Jacobs - Member Advisory Chair

	 	
                         51,400

	 	
                         19,069

	
Jeni Jones

	 	
                         64,440

	 	
                         23,907

	
Ryan Ratliff - Director of Legendary Member Services

	 	
                         65,000

	 	
                         24,115

	
Lauren Bailey - Executive Assistant

	 	
                         66,667

	 	
                         24,733

	
Melissa Kammersell

	 	
                         77,081

	 	
                         28,597

	
Andrew Smith

	 	
                         80,000

	 	
                         29,680

	
Chris Hatch

	 	
                         90,000

	 	
                         33,390

	
Jeff and Jeanette Pfeiffer Co-Directors CA Operations

	 	
                       100,000

	 	
                         37,100

	
Jeff Nilsson - Chief Financial Officer

	 	
                       100,000

	 	
                         37,100

	
Karl Sun - Lender

	 	
                       100,000

	 	
                         37,100

	
David Kaplan - Consultant

	 	
                       100,000

	 	
                         37,100

	
Dusty Eskelson

	 	
                       100,000

	 	
                         37,100

	
Sheldon Traube - Consultant*

	 	
                       120,000

	 	
                         44,520

	
Pete Anderson - Creative Director

	 	
                       150,000

	 	
                         55,650

	
Sariah Smith

	 	
                       200,000

	 	
                         74,200

	
Daris Rice - Director of Institutional Sales

	 	
                       200,000

	 	
                         74,200

	
Mitch Huhem - Advisor

	 	
                       200,000

	 	
                         74,200

	
Sariah Smith

	 	
                       250,000

	 	
                         92,750

	
Ryan Ratliff - Director of Legendary Member Services

	 	
                       330,000

	 	
                       122,430

	
Hunter Smith

	 	
                       400,000

	 	
                       148,400

	
Dillon Smith

	 	
                       400,000

	 	
                       148,400

  

28

  

 

Schedule B (Continued)

	
Midtown Partners - Advisor

	 	
                       400,000

	 	
                       148,400

	
Troy Fullmer - Director of Field Operations

	 	
                       450,000

	 	
                       166,950

	
Russ Karlen - Advisor

	 	
                       500,000

	 	
                       185,500

	
Jeff and Jeanette Pfeiffer Co-Directors CA Operations

	 	
                       900,000

	 	
                       333,900

	
Jeff Nilsson - Chief Financial Officer

	 	
                       900,000

	 	
                       333,900

	
Rod Smith

	 	
                    1,250,000

	 	
                       463,750

	
Pete Anderson - Creative Director

	 	
                    1,350,000

	 	
                       500,850

	
Employee/Key Hire (Reserved)

	 	
                    1,950,000

	 	
                       723,450

	
Totals

	 	
11,602,621

	 	
4,304,572

 
   

   

   

   

  

29

  

Schedule C

	
GPDB Warrantholders

	 	

  GPDB Warrants

	 	

  Acquisition Warrants

	
Donald Newman

	 	
                           9,259

	 	
                           3,435

	
Mitchell Fleisher

	 	
                         23,148

	 	
                           8,588

	
Tom Smith

	 	
                         23,148

	 	
                           8,588

	
Mark Hanson

	 	
                         23,148

	 	
                           8,588

	
David Kaplan

	 	
                         27,778

	 	
                         10,306

	
Jay Eisen

	 	
                         46,296

	 	
                         17,176

	
Joyce Smith

	 	
                         46,296

	 	
                         17,176

	
Bill Roberts

	 	
                       185,184

	 	
                         68,703

	
Totals

	 	
384,257

	 	
                       142,560

 

  
   

   

   

30MD - Filed by Filing Services Canada Inc. (403) 717-3898

EXHIBIT B

SUBSCRIPTION AGREEMENT

 

THIS SUBSCRIPTION AGREEMENT (this “Agreement”) is made as of the last date set forth on the signature page hereof between Green PolkaDot Box, Inc., a Nevada corporation f/k/a Vault America, Inc. (the “Company”) and the undersigned (the “Subscriber”).

 

WITNESSETH:

 

WHEREAS, the Company is offering on a “best efforts basis,” a maximum of $6,000,000 of units (the “Units”, and the transaction, the “Offering”)  with each Unit consisting of one share of common stock, par value $0.001 per share (the “Shares”) and one five-year warrant substantially in the form attached hereto as Exhibit A (the “Warrants”) to purchase the number of Shares purchased in the Offering with an exercise price of $4.50 per share for sale to accredited investors at a price of $3.00 per Unit (the “Offering Price “) pursuant to Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”) and Rule 506 promulgated thereunder;

 

WHEREAS, the Subscriber desires to purchase that number of Units set forth on the signature page hereof on the terms and conditions hereinafter set forth; and

 

WHEREAS, on _________ __, 2012, the Company and The Green PolkaDot Box, Inc., a Utah corporation, completed the Reverse Merger, as defined in the Memorandum referenced below.

 

NOW, THEREFORE, in consideration of the premises and the mutual representations and covenants hereinafter set forth, the parties hereto do hereby agree as follows:

 

I.        SUBSCRIPTION FOR UNITS AND REPRESENTATIONS BY SUBSCRIBER

 

1.1 Subject to the terms and conditions hereinafter set forth and in the Confidential Private Placement Memorandum dated February 10, 2012 (such memorandum, together with all amendments thereof and supplements and exhibits thereto, the “Memorandum”), the Subscriber hereby irrevocably subscribes for and agrees to purchase from the Company such number of Units, and the Company agrees to sell to the Subscriber, as is set forth on the signature page hereof, at a per Unit price equal to $3.00 per Unit.  Within a commercially reasonable time after the execution and delivery of this Agreement, the Subscriber shall wire the aggregate Offering Price to be held in escrow in accordance with the terms of the Escrow Agreement substantially in the form attached as Exhibit B (the “Escrow Agreement”).  In the event the Closing (as defined below) does not take place because of (i) the rejection of subscription for Units by the Company; or (ii) failure to effectuate the Closing on or prior to May 15, 2012 (the “Termination Date”) for any reason or no reason, unless waived by the Subscriber; or (iii) the termination of the Offering by election of the Company and the Placement Agent (as defined in the Memorandum), this Agreement and any other transaction documents shall thereafter be terminated and have no force or effect, and the parties shall take all steps, including the execution of instructions to the escrow agent, to ensure that the funds held in accordance with the Escrow Agreement shall promptly be returned or cause to be returned to the Subscriber without interest thereon or deduction therefrom.  The Subscriber understands and agrees that, subject to Section 2 and applicable laws, by executing this Agreement, it is entering into a binding agreement.  The aggregate Offering Price is payable by wire transfer of immediately available funds to:

 

  

  

  

 

Wire instructions:

 

1.2 Closing.  The closing of the purchase and sale of the Units hereunder  shall take place at the offices of Sichenzia Ross Friedman Ference LLP, 61 Broadway, 32nd Floor, New York, NY 10006 or such other place as determined by the Company.  The Closing shall take place on a Business Day promptly following the satisfaction of the conditions set forth in Article IV below, as determined by the Company (the “Closing Date”). The Company may hold an initial closing (“Initial Closing”) at any time after the receipt of accepted subscriptions.  After the Initial Closing, subsequent closings with respect to additional Units may take place at any time prior to the Termination Date as determined by the Company, with respect to subscriptions accepted prior to the Termination Date (each such closing, together with the Initial Closing, being referred to as a “Closing”).  The last Closing of the Offering, occurring on or prior to the Termination Date, shall be referred to as the “Final Closing” and the date of such Final Closing shall be referred to as the “Final Closing Date”.  Any subscription documents or funds received after the Final Closing will be returned, without interest or deduction.  In the event that the any Closing does not occur prior to the Termination Date, all amounts paid by the Subscriber shall be returned to the Subscriber, without interest or deduction.  “Business Day” shall mean from the hours of 9:00 a.m. (Eastern Time) through 5:00 p.m. (Eastern Time) of a day other than a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required to be closed. The Shares and Warrants purchased by the Subscriber will be delivered by the Company promptly following the Closing.  At the Closing, the Company shall deliver to the Subscriber an irrevocable instruction letter to the transfer agent instructing the transfer agent to deliver the Shares.

 

1.3 The Subscriber recognizes that the purchase of the Units involves a high degree of risk including, but not limited to, the following: (a) the Company has limited operating history and requires substantial funds in addition to the proceeds of the Offering; (b) an investment in the Company is highly speculative, and only investors who can afford the loss of their entire investment should consider investing in the Company and the Units; (c) the Subscriber may not be able to liquidate its investment; (d) transferability of the Units is extremely limited; (e) in the event of a disposition, the Subscriber could sustain the loss of its entire investment; (f) the Company has not paid any dividends since its inception and does not anticipate paying any dividends in the foreseeable future; and (g) the Company may issue additional securities in the future which have rights and preferences that are senior to those of the Shares.  Without limiting the generality of the representations set forth in Section 1.5 and 1.6 below, the Subscriber represents that the Subscriber has carefully reviewed the section of the Memorandum captioned “Risk Factors.”

 

1.4 The Subscriber represents that the Subscriber is an “accredited investor” as such term is defined in Rule 501 of Regulation D (“Regulation D”) promulgated under the Securities Act, as indicated by the Subscriber’s responses to the questions contained in Article VII hereof, and that the Subscriber is able to bear the economic risk of an investment in the Units.

 

  

2

  

 

1.5 The Subscriber hereby acknowledges and represents that (a) the Subscriber has knowledge and experience in business and financial matters, prior investment experience, including investment in securities that are non-listed, unregistered and/or not traded on a national securities exchange, or the Subscriber has employed the services of a “purchaser representative” (as defined in Rule 501 of Regulation D), attorney and/or accountant to read all of the documents furnished or made available by the Company both to the Subscriber and to all other prospective investors in the Units to evaluate the merits and risks of such an investment on the Subscriber’s behalf; (b) the Subscriber recognizes the highly speculative nature of this investment; and (c) the Subscriber is able to bear the economic risk that the Subscriber hereby assumes.

 

1.6 The Subscriber hereby acknowledges receipt and careful review of this Agreement, the Memorandum (which includes the Risk Factors), including all exhibits thereto, and any documents which may have been made available upon request as reflected therein (collectively referred to as the “Offering Materials”) and hereby represents that the Subscriber has been furnished by the Company during the course of the Offering with all information regarding the Company, the terms and conditions of the Offering and any additional information that the Subscriber has requested or desired to know, and has been afforded the opportunity to ask questions of and receive answers from duly authorized officers or other representatives of the Company concerning the Company and the terms and conditions of the Offering.

 

1.7   (a)           In making the decision to invest in the Units the Subscriber has relied solely upon the information provided by the Company in the Offering Materials.  To the extent necessary, the Subscriber has retained, at its own expense, and relied upon appropriate professional advice regarding the investment, tax and legal merits and consequences of this Agreement and the purchase of the Units hereunder.  The Subscriber disclaims reliance on any statements made or information provided by any person or entity in the course of Subscriber’s consideration of an investment in the Units other than the Offering Materials.

 

    
  (b)           The Subscriber represents and warrants that (i) the Subscriber was contacted regarding the sale of the Units by the Company (or an authorized agent or representative thereof) with whom the Subscriber had a prior substantial pre-existing relationship and (ii) no Units were offered or sold to it by means of any form of general solicitation or general advertising, and in connection therewith, the Subscriber did not (A) receive or review any advertisement, article, notice or other communication published in a newspaper or magazine or similar media or broadcast over television or radio, whether closed circuit, or generally available; or (B) attend any seminar meeting or industry investor conference whose attendees were invited by any general solicitation or general advertising; or (C) observe any website or filing of the Company in which any offering of securities by the Company was described and as a result learned of any offering of securities by the Company.

 

1.8 The Subscriber hereby represents that the Subscriber, either by reason of the Subscriber’s business or financial experience or the business or financial experience of the Subscriber’s professional advisors (who are unaffiliated with and not compensated by the Company or any affiliate or selling agent of the Company, directly or indirectly), has the capacity to protect the Subscriber’s own interests in connection with the transaction contemplated hereby.

 

  

3

  

 

1.9 The Subscriber hereby acknowledges that the Offering has not been reviewed by the United States Securities and Exchange Commission (the “SEC”) nor any state regulatory authority since the Offering is intended to be exempt from the registration requirements of Section 5 of the Securities Act, pursuant to Regulation D.  The Subscriber understands that the Units have not been registered under the Securities Act or under any state securities or “blue sky” laws and agrees not to sell, pledge, assign or otherwise transfer or dispose of the Units unless they are registered under the Securities Act and under any applicable state securities or “blue sky” laws or unless an exemption from such registration is available.

 

1.10 The Subscriber understands that the Units have not been registered under the Securities Act by reason of a claimed exemption under the provisions of the Securities Act that depends, in part, upon the Subscriber’s investment intention.  In this connection, the Subscriber hereby represents that the Subscriber is purchasing the Units for the Subscriber’s own account for investment and not with a view toward the resale or distribution to others.  The Subscriber, if an entity, further represents that it was not formed for the purpose of purchasing the Units.

 

1.11 The Subscriber understands that there is a limited trading market for the Company’s common stock (the “Common Stock”) and that an active market may not develop for the Common Stock.  The Subscriber understands that even if an active market develops for the Common Stock, Rule 144 promulgated under the Securities Act requires for non-affiliates (“Rule 144”), among other conditions, a one-year holding period commencing as of the date that the Company files “Form 10 information” with the SEC, prior to the resale of securities acquired in a non-public offering without having to satisfy the registration requirements under the Securities Act.  The Subscriber understands and hereby acknowledges that the Company is under no obligation to register any of the Shares, the Warrant Shares, or the Warrants under the Securities Act or any state securities or “blue sky” laws other than as set forth in Article V.

 

1.12 The Subscriber consents to the placement of a legend on any certificate or other document evidencing the Units (including, the underlying Shares, Warrants and common stock underlying the Warrants) that such Units have not been registered under the Securities Act or any state securities or “blue sky” laws and setting forth or referring to the restrictions on transferability and sale thereof contained in this Agreement.  The Subscriber is aware that the Company will make a notation in its appropriate records with respect to the restrictions on the transferability of such Units. The legend to be placed on each certificate shall be in form substantially similar to the following:

 

“The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended and may not be sold, transferred, pledged, hypothecated or otherwise disposed of in the absence of (i) an effective registration statement for such securities under said act or (ii) an opinion of company counsel that such registration is not required.”

 

  

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1.13 The Subscriber understands that the Company will review this Agreement and is hereby given authority by the Subscriber to call Subscriber’s bank or place of employment or otherwise review the financial standing of the Subscriber; and it is further agreed that the Company, at its sole discretion, reserves the unrestricted right, without further documentation or agreement on the part of the Subscriber, to reject or limit any subscription, to accept subscriptions for fractional Units and to close the Offering to the Subscriber at any time and that the Company will issue stop transfer instructions to its transfer agent with respect to such Units.

 

1.14 The Subscriber hereby represents that the address of the Subscriber furnished by Subscriber on the signature page hereof is the Subscriber’s principal residence if Subscriber is an individual or its principal business address if it is a corporation or other entity.

 

1.15 The Subscriber represents that the Subscriber has full power and authority (corporate, statutory and otherwise) to execute and deliver this Agreement and to purchase the Units.  This Agreement constitutes the legal, valid and binding obligation of the Subscriber, enforceable against the Subscriber in accordance with its terms.

 

1.16 If the Subscriber is a corporation, partnership, limited liability company, trust, employee benefit plan, individual retirement account, Keogh Plan, or other tax-exempt entity, it is authorized and qualified to invest in the Company and the person signing this Agreement on behalf of such entity has been duly authorized by such entity to do so.

 

1.17 The Subscriber acknowledges that if he or she is a Registered Representative of a Financial Industry Regulatory Authority (“FINRA”) member firm, he or she must give such firm the notice required by the FINRA’s Rules of Fair Practice, receipt of which must be acknowledged by such firm in Section 7.4 below.

 

1.18 The Subscriber acknowledges that at such time, if ever, as the Units are registered, sales of the Units will be subject to state securities laws.

 

1.19   (a)            The Subscriber agrees not to issue any public statement with respect to the Subscriber’s investment or proposed investment in the Company or the terms of any agreement or covenant between them and the Company without the Company’s prior written consent, except such disclosures as may be required under applicable law or under any applicable order, rule or regulation.

 

   
  (b)   The Company agrees not to disclose the names, addresses or any other information about the Subscribers, except as required by law; provided, that the Company may use the name of the Subscriber for any offering or in any registration statement filed pursuant to Article V in which the Subscriber’s Units are included.

 

1.20 The Subscriber agrees to hold the Company and its directors, officers, employees, affiliates, controlling persons and agents and their respective heirs, representatives, successors and assigns harmless and to indemnify them against all liabilities, costs and expenses incurred by them as a result of (a) any sale or distribution of the Units by the Subscriber in violation of the Securities Act or any applicable state securities or “blue sky” laws; or (b) any false representation or warranty or any breach or failure by the Subscriber to comply with any covenant made by the Subscriber in this Agreement (including the Confidential Investor Questionnaire contained in Article VII herein) or any other document furnished by the Subscriber to any of the foregoing in connection with this transaction.

 

  

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II.       REPRESENTATIONS BY AND COVENANTS OF THE COMPANY

 

The Company hereby represents and warrants to the Subscriber that:

 

2.1 Organization, Good Standing and Qualification.  The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada and has full corporate power and authority to conduct its business.

 

2.2 Authorization; Enforceability.  The Company has all corporate right, power and authority to enter into this Agreement and to consummate the transactions contemplated hereby.  All corporate action on the part of the Company, its directors and stockholders necessary for the (a) authorization execution, delivery and performance of this Agreement by the Company; and (b) authorization, sale, issuance and delivery of the Units contemplated hereby and the performance of the Company’s obligations hereunder has been taken.  This Agreement has been duly executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency and the relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies, and to limitations of public policy.  The Units, when issued and fully paid for in accordance with the terms of this Agreement, will be validly issued, fully paid and nonassessable.  The issuance and sale of the Units contemplated hereby will not give rise to any preemptive rights or rights of first refusal on behalf of any person which have not been waived in connection with this offering.

 

2.3 No Conflict; Governmental Consents.

 

(a) The execution and delivery by the Company of this Agreement and the consummation of the transactions contemplated hereby will not result in the violation of any material law, statute, rule, regulation, order, writ, injunction, judgment or decree of any court or governmental authority to or by which the Company is bound, or of any provision of the Articles of Incorporation or Bylaws of the Company, and will not conflict with, or result in a material breach or violation of, any of the terms or provisions of, or constitute (with due notice or lapse of time or both) a default under, any lease, loan agreement, mortgage, security agreement, trust indenture or other agreement or instrument to which the Company is a party or by which it is bound or to which any of its properties or assets is subject, nor result in the creation or imposition of any lien upon any of the properties or assets of the Company.

 

(b) No consent, approval, authorization or other order of any governmental authority is required to be obtained by the Company in connection with the authorization, execution and delivery of this Agreement or with the authorization, issue and sale of the Units, except such filings as may be required to be made with the SEC, FINRA, NASDAQ and with any state or foreign blue sky or securities regulatory authority.

 

  

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2.4 Price Protection Adjustment.

 

(a) During the period from the date of the initial closing of the Offering at such time following the Reverse Merger until twelve (12) months following such initial closing, in the event, and only upon the first occurrence of such event,  that the Company issues or sells any shares of Common Stock or any Common Stock Equivalents (as defined below) pursuant to which shares of Common Stock may be acquired at a price (a “Lower Price”) less than $3.00 per share, then the Company shall promptly issue additional shares of Common Stock to the Subscriber in an amount sufficient that the subscription price paid hereunder, when divided by the total number of shares issued will result in an actual price paid per share of Common Stock hereunder equal to such lower price (this is intended to be a “full ratchet” adjustment).  In addition, the exercise price of all unexercised Warrants shall be reduced to a number equal to the Lower Price multiplied by 1.5.  Notwithstanding the foregoing, this Section 2.4 shall not apply in respect of an Exempt Issuance (as defined below).

 

(b) For purposes of this Agreement, (i) “Common Stock Equivalents” means any securities of the Company or any of its subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock and (ii) “Exempt Issuance” means the issuance of (a) shares of Common Stock or options to employees, officers, directors, or consultants of the Company pursuant to any stock or option plan duly adopted for such purpose by a majority of the non-employee members of the Board of Directors of the Company or a majority of the members of a committee of non-employee directors established, (b) securities upon the exercise or exchange of or conversion of any securities issued hereunder and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this Agreement; and (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company, provided that any such issuance shall only be to a person which is either an owner of, or an entity that is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities.

 

III.       TERMS OF SUBSCRIPTION

 

3.1 All funds paid hereunder shall be deposited with the Company in the account identified in Section 1.1 hereof.

 

3.2 Certificates representing the Shares and Warrants purchased by the Subscriber pursuant to this Agreement will be prepared for delivery to the Subscriber within 15 business days following the closing at which such purchase takes place. The Subscriber hereby authorizes and directs the Company to deliver the certificates representing the Shares and Warrants purchased by the Subscriber pursuant to this Agreement directly to the Subscriber’s residential or business address indicated on the signature page hereto.

 

  

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IV.       CONDITIONS TO OBLIGATIONS OF THE SUBSCRIBERS

 

4.1 The Subscriber’s obligation to purchase the Units at the closing at which such purchase is to be consummated is subject to the fulfillment on or prior to such closing of the following conditions, which conditions may be waived at the option of each Subscriber to the extent permitted by law:

 

(a) Covenants.  All covenants, agreements and conditions contained in this Agreement to be performed by the Company on or prior to the date of such closing shall have been performed or complied with in all material respects.

 

(b) No Legal Order Pending.  There shall not then be in effect any legal or other order enjoining or restraining the transactions contemplated by this Agreement.

 

(c) No Law Prohibiting or Restricting Such Sale.  There shall not be in effect any law, rule or regulation prohibiting or restricting such sale or requiring any consent or approval of any person, which shall not have been obtained, to issue the Units (except as otherwise provided in this Agreement).

 

V.        REGISTRATION RIGHTS

 

5.1 Definitions.  As used in this Agreement, the following terms shall have the following meanings.

 

(a) The term “Holder” shall mean any person owning or having the right to acquire Registrable Securities or any permitted transferee of a Holder.

 

(b) The terms “register,” “registered” and “registration” refer to a registration effected by preparing and filing a registration statement or similar document in compliance with the Securities Act, and the declaration or order of effectiveness of such registration statement or document.

 

(c) The term “Registrable Securities” shall mean: (i) the Shares, and (ii) the shares of Common Stock underlying the Warrants (the “Warrant Shares”), provided, however, that securities shall only be treated as Registrable Securities if and only for so long as they (A) have not been disposed of pursuant to a registration statement declared effective by the SEC; (B) have not been sold in a transaction exempt from the registration and prospectus delivery requirements of the Securities Act so that all transfer restrictions and restrictive legends with respect thereto are removed upon the consummation of such sale; (C) are held by a Holder or a permitted transferee of a Holder pursuant to Section 5.8; and (D) may not be disposed of under Rule 144 under the Securities Act without restriction.

 

(d)           The term “SEC Guidance” means (i) any publicly-available written or oral guidance, requirements or notice of the staff of the SEC, and (ii) the Securities Act.

(e)           The term “Rule 415” means Rule 415 promulgated by the SEC pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same purpose and effect as such Rule.

 

  

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5.2 Shelf Registration.  The Company will use its best reasonable efforts to file a registration statement, within 45 days after the final Public Company Closing Date (as defined in the Memorandum), covering the resale of all or such portion of the Registrable Securities as permitted by SEC Guidance, for an offering to be made on a continuous basis pursuant to Rule 415. The registration statement filed pursuant to this Section 5.2 shall be on Form S-1, except if the Company is not then eligible to register for resale the Registrable Securities on Form S-1, in which case such registration shall be on another appropriate form. In the event that less than all of the Registrable Securities are included in the registration statement as a result of SEC Guidance, then the Company will use its best reasonable efforts to file additional registration statements, registering the allowable balance pursuant to Rule 415, in a manner permitted by the SEC, until all of the Registrable Securities have been registered.

 

5.3 Registration Procedures.  Whenever required under this Article V to include Registrable Securities in a Company registration statement, the Company shall, as expeditiously as reasonably possible:

 

(a) Use its best reasonable efforts to (i) cause such registration statement to become effective within 150 days of the final Public Company Closing Date and (ii) cause such registration statement to remain effective until the earliest to occur of (A) such date as the sellers of Registrable Securities (the “Selling Holders”) have completed the distribution described in the registration statement and (B) such time that all of such Registrable Securities are no longer, by reason of Rule 144 under the Securities Act, required to be registered for the sale thereof by such Holders.  The Company will also use its best reasonable efforts to, during the period that such registration statement is required to be maintained hereunder, file such post-effective amendments and supplements thereto as may be required by the Securities Act and the rules and regulations thereunder or otherwise to ensure that the registration statement does not contain any untrue statement of material fact or omit to state a fact required to be stated therein or necessary to make the statements contained therein, in light of the circumstances under which they are made, not misleading; provided, however, that if applicable rules under the Securities Act governing the obligation to file a post-effective amendment permits, in lieu of filing a post-effective amendment that (i) includes any prospectus required by Section 10(a)(3) of the Securities Act or (ii) reflects facts or events representing a material or fundamental change in the information set forth in the registration statement, the Company may incorporate by reference information required to be included in (i) and (ii) above to the extent such information is contained in periodic reports filed pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) in the registration statement.

 

(b) Prepare and file with the SEC such amendments and supplements to such registration statement, and the prospectus used in connection with such registration statement, as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement.

 

(c) Furnish to the Selling Holders such numbers of copies of a prospectus, including a preliminary prospectus as amended or supplemented from time to time, in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them.

 

  

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(d) Use best reasonable efforts to register and qualify the securities covered by such registration statement under such other federal or state securities laws of such jurisdictions as shall be reasonably requested by the Selling Holders; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act.

 

(e) In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter of such offering.  Each Selling Holder participating in such underwriting shall also enter into and perform its obligations under such an agreement.

 

(f) Notify each Holder of Registrable Securities covered by such registration statement, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, (i) when the registration statement or any post-effective amendment and supplement thereto has become effective; (ii) of the issuance by the SEC of any stop order or the initiation of proceedings for that purpose (in which event the Company shall make every effort to obtain the withdrawal of any order suspending effectiveness of the registration statement at the earliest possible time or prevent the entry thereof); (iii) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation of any proceeding for such purpose; and (iv) of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing.

 

(g) Cause all such Registrable Securities registered hereunder to be listed on each securities exchange or quotation service on which similar securities issued by the Company are then listed or quoted.

 

(h) Provide a transfer agent for all Registrable Securities registered pursuant hereunder and CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration.

 

(i) Cooperate with the Selling Holders and the managing underwriters, if any, to facilitate the timely preparation and delivery of certificates representing the Registrable Securities to be sold, which certificates will not bear any restrictive legends; and enable such Registrable Securities to be in such denominations and registered in such names as the managing underwriters, if any, shall request at least two business days prior to any sale of the Registrable Securities to the underwriters.

 

(j) Comply with all applicable rules and regulations of the SEC.

 

  

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(k) If the offering is underwritten and at the request of any Selling Holder, use its best reasonable efforts to furnish on the date that Registrable Securities are delivered to the underwriters for sale pursuant to such registration: (i) opinions dated such date of counsel representing the Company for the purposes of such registration, addressed to the underwriters and the transfer agent for the Registrable Securities so delivered, respectively, to the effect that such registration statement has become effective under the Securities Act and such Registrable Securities are freely tradable, and covering such other matters as are customarily covered in opinions of issuer’s counsel delivered to underwriters and transfer agents in underwritten public offerings and (ii) a letter dated such date from the independent public accountants who have certified the financial statements of the Company included in the registration statement or the prospectus, covering such matters as are customarily covered in accountants’ letters delivered to underwriters in underwritten public offerings.

 

5.4 Furnish Information.  It shall be a condition precedent to the obligation of the Company to take any action pursuant to this Article V with respect to the Registrable Securities of any Selling Holder that such Holder shall furnish to the Company such information regarding the Holder, the Registrable Securities held by the Holder, and the intended method of disposition of such securities as shall be reasonably required by the Company to effect the registration of such Holder’s Registrable Securities.

 

5.5 Registration Expenses.  The Company shall bear and pay all registration expenses incurred in connection with any registration, filing or qualification of Registrable Securities with respect to registration pursuant to Section 5.2 for each Holder, but excluding (i) legal expenses of the Holders and (ii) underwriting discounts and commissions relating to Registrable Securities.

 

5.6 Delay of Registration.

 

(a) No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any such registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Article.

 

(b) If following the Reverse Merger, should the Company fail to file the registration statement by the 45th day after the final Public Company Closing Date or should the registration statement not be declared effective by the SEC by the 150th day after the final Public Company Closing Date then, in each case as and if applicable, for each month the registration statement is not filed or continues not to be declared effective, the Company will pay to each Subscriber as liquidated damages and not as a penalty an amount in cash equal to 0.5% of the aggregate purchase price paid by such Subscriber for the subscription of Units in the Offering, up to a maximum of 6% in the aggregate. Notwithstanding the aforesaid, the Public Company shall not be obligated to pay any such liquidated damages if the Public Company is unable to fulfill its registration obligations as a result of rules, regulations, positions or releases issued or actions taken by the SEC pursuant to its authority with respect to “Rule 415”, but shall be required to file such additional registration statements necessary to satisfy the foregoing registration obligations as soon as practicable.

 

5.7 Indemnification.  In the event that any Registrable Securities are included in a registration statement under this Article V:

 

  

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(a) To the extent permitted by law, the Company will indemnify and hold harmless each Holder, any underwriter (as defined in the Securities Act) for such Holder and each person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Securities Act, or the Exchange Act, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a “Violation”):  (i) any untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii) any violation by the Company of the Securities Act, the Exchange Act, or any rule or regulation promulgated under the Securities Act, or the Exchange Act, and the Company will pay to each such Holder, underwriter or controlling person, as incurred, any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability, or action; provided, however, that the indemnity agreement contained in this Section 5.7(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable in any such case for any such loss, claim, damage, liability, or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by any such Holder, underwriter or controlling person.

 

(b) To the extent permitted by law, each Selling Holder will indemnify and hold harmless the Company, each of its directors, each of its officers, each person, if any, who controls the Company within the meaning of the Securities Act, any underwriter, any other Holder selling securities in such registration statement and any controlling person of any such underwriter or other Holder, against any losses, claims, damages, or liabilities (joint or several) to which any of the foregoing persons may become subject, under the Securities Act, or the Exchange Act, insofar as such losses, claims, damages, or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by such Holder expressly for use in connection with such registration; and each such Holder will pay, as incurred, any legal or other expenses reasonably incurred by any person intended to be indemnified pursuant to this Section 5.7(b), in connection with investigating or defending any such loss, claim, damage, liability, or action; provided, however, that the indemnity agreement contained in this Section 5.7(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld; provided, further, that, in no event shall any indemnity under this Section 5.7(b) exceed the greater of the cash value of the (i) gross proceeds from the Offering received by such Holder or (ii) such Holder’s investment pursuant to this Agreement as set forth on the signature page attached hereto.

 

  

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(c) Promptly after receipt by an indemnified party under this Section 5.7 of notice of the commencement of any action (including any governmental action), such indemnified party shall, if a claim in respect thereof is to be made against any indemnifying party under this Section 5.7, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly notified, to assume the defense thereof with counsel selected by the indemnifying party and approved by the indemnified party (whose approval shall not be unreasonably withheld); provided, however, that an indemnified party (together with all other indemnified parties which may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding.  The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 5.7, but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 5.7.

 

(d) If the indemnification provided for in this Section 5.7 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim, damage, or expense referred to therein, then the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, claim, damage, or expense in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the statements or omissions that resulted in such loss, liability, claim, damage, or expense as well as any other relevant equitable considerations.  The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the alleged omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission.

 

(e) Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in an underwriting agreement entered into in connection with an underwritten public offering are in conflict with the foregoing provisions, the provisions in such underwriting agreement shall control.

 

(f) The obligations of the Company and Holders under this Section 5.7 shall survive the completion of the Offering.

 

5.8 Permitted Transferees.  The rights to cause the Company to register Registrable Securities granted to the Holders by the Company under this Article V may be assigned in full by a Holder in connection with a transfer by such Holder of its Registrable Securities, to (a) any partner or retired partner of a Holder that is a partnership, or (b) any family member or trust for the benefit of any individual Holder, provided that (i) such Holder gives prior written notice to the Company; (ii) such transferee agrees to comply with the terms and provisions of this Agreement;  (iii) such transfer is otherwise in compliance with this Agreement; and (iv) such transfer is otherwise effected in accordance with applicable securities laws.  Except as specifically permitted by this Section 5.8, the rights of a Holder with respect to Registrable Securities as set out herein shall not be transferable to any other person, and any attempted transfer shall cause all rights of such Holder therein to be forfeited.

 

  

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VI.       MISCELLANEOUS

 

6.1 Any notice or other communication given hereunder shall be deemed sufficient if in writing and sent by registered or certified mail, return receipt requested, or delivered by hand against written receipt therefor, addressed as follows:

 

if to the Company, at:

Green PolkaDot Box, Inc.

629 East Quality Drive, Suite 103

American Fork, Utah 84003

Attn:  Rod A. Smith, Chief Executive Officer

With a copy to (which shall not constitute notice):

Sichenzia Ross Friedman Ference LLP

61 Broadway, 32nd Floor

New York, NY 10006

Attn:  Andrea Cataneo, Esq.

if to the Subscriber, to the Subscriber’s address indicated on the signature page of this Agreement.

 

Notices shall be deemed to have been given or delivered on the date of mailing, except notices of change of address, which shall be deemed to have been given or delivered when received.

 

6.2 Except as otherwise provided herein, this Agreement shall not be changed, modified or amended except by a writing signed by the parties to be charged, and this Agreement may not be discharged except by performance in accordance with its terms or by a writing signed by the party to be charged.

 

6.3 Subject to the provisions of Section 6.11, this Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective heirs, legal representatives, successors and assigns.  This Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings of any and every nature among them.

 

6.4 Upon the execution and delivery of this Agreement by the Subscriber, this Agreement shall become a binding obligation of the Subscriber with respect to the purchase of Units as herein provided, subject, however, to the right hereby reserved by the Company to enter into the same agreements with other subscribers and to add and/or delete other persons as subscribers.

 

  

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6.5 NOTWITHSTANDING THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY ANY OF THE PARTIES HERETO, THE PARTIES EXPRESSLY AGREE THAT ALL THE TERMS AND PROVISIONS HEREOF SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO SUCH STATE’S PRINCIPLES OF CONFLICTS OF LAW.  IN THE EVENT THAT A JUDICIAL PROCEEDING IS NECESSARY, THE SOLE FORUM FOR RESOLVING DISPUTES ARISING OUT OF OR RELATING TO THIS AGREEMENT IS THE COURTS STATE OF NEW YORK IN AND FOR THE COUNTY OF NEW YORK OR THE FEDERAL COURTS FOR SUCH STATE AND COUNTY, AND ALL RELATED APPELLATE COURTS, THE PARTIES HEREBY IRREVOCABLY CONSENT TO THE JURISDICTION OF SUCH COURTS AND AGREE TO SAID VENUE.

 

6.6 In order to discourage frivolous claims the parties agree that unless a claimant in any proceeding arising out of this Agreement succeeds in establishing his claim and recovering a judgment against another party (regardless of whether such claimant succeeds against one of the other parties to the action), then the other party shall be entitled to recover from such claimant all of its/their reasonable legal costs and expenses relating to such proceeding and/or incurred in preparation therefor.

 

6.7 The holding of any provision of this Agreement to be invalid or unenforceable by a court of competent jurisdiction shall not affect any other provision of this Agreement, which shall remain in full force and effect.  If any provision of this Agreement shall be declared by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced in whole or in part, such provision shall be interpreted so as to remain enforceable to the maximum extent permissible consistent with applicable law and the remaining conditions and provisions or portions thereof shall nevertheless remain in full force and effect and enforceable to the extent they are valid, legal and enforceable, and no provisions shall be deemed dependent upon any other covenant or provision unless so expressed herein.

 

6.8 It is agreed that a waiver by either party of a breach of any provision of this Agreement shall not operate, or be construed, as a waiver of any subsequent breach by that same party.

 

6.9 The parties agree to execute and deliver all such further documents, agreements and instruments and take such other and further action as may be necessary or appropriate to carry out the purposes and intent of this Agreement.

 

6.10 This Agreement may be executed in two or more counterparts each of which shall be deemed an original, but all of which shall together constitute one and the same instrument.

 

6.11 Nothing in this Agreement shall create or be deemed to create any rights in any person or entity not a party to this Agreement, except for the holders of Registrable Securities.

 
   

   

   

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 
 

 

  

15

  

VII.      CONFIDENTIAL INVESTOR QUESTIONNAIRE

 

7.1 The Subscriber represents and warrants that he, she or it comes within one category marked below, and that for any category marked, he, she or it has truthfully set forth, where applicable, the factual basis or reason the Subscriber comes within that category.  ALL INFORMATION IN RESPONSE TO THIS SECTION WILL BE KEPT STRICTLY CONFIDENTIAL.  The undersigned agrees to furnish any additional information which the Company deems necessary in order to verify the answers set forth below.

 

	
Category A  

	
The undersigned is an individual (not a partnership, corporation, etc.) whose individual net worth, or joint net worth with his or her spouse, presently exceeds $1,000,000.

Explanation.  In calculating net worth you may include equity in personal property and real estate, including your principal residence, cash, short-term investments, stock and securities.  Equity in personal property and real estate should be based on the fair market value of such property less debt secured by such property.

	
Category B  

	
The undersigned is an individual (not a partnership, corporation, etc.) who had an income in excess of $200,000 in each of the two most recent years, or joint income with his or her spouse in excess of $300,000 in each of those years (in each case including foreign income, tax exempt income and full amount of capital gains and losses but excluding any income of other family members and any unrealized capital appreciation) and has a reasonable expectation of reaching the same income level in the current year.

	
Category C  

	
The undersigned is a director or executive officer of the Company which is issuing and selling the Units.

	
Category D  

	
The undersigned is a bank; a savings and loan association; insurance company; registered investment company; registered business development company; licensed small business investment company (“SBIC”); or employee benefit plan within the meaning of Title 1 of ERISA and (a) the investment decision is made by a plan fiduciary which is either a bank, savings and loan association, insurance company or registered investment advisor, or (b) the plan has total assets in excess of $5,000,000 or (c) is a self directed plan with investment decisions made solely by persons that are accredited investors. (describe entity)

	
 

	
 

	
 

	
 

 

	
Category E  

	
The undersigned is a private business development company as defined in section 202(a)(22) of the Investment Advisors Act of 1940. (describe entity)

	
 

	
 

	
 

	
 

  

16

  

 

	
Category F  

	
The undersigned is either a corporation, partnership, Massachusetts business trust, or non-profit organization within the meaning of Section 501(c)(3) of the Internal Revenue Code, in each case not formed for the specific purpose of acquiring the Units and with total assets in excess of $5,000,000. (describe entity)

	
 

	
 

	
 

	
 

 

	
Category G  

	
The undersigned is a trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Units, where the purchase is directed by a “sophisticated investor” as defined in Regulation 506(b)(2)(ii) under the Act.

 

	
Category H  

	
The undersigned is an entity (other than a trust) in which all of the equity owners are “accredited investors” within one or more of the above categories.  If relying upon this Category alone, each equity owner must complete a separate copy of this Agreement.  (describe entity)

	
 

	
 

	
 

	
 

 

	
Category I  

	
The undersigned is not within any of the categories above and is therefore not an accredited investor.

 

The undersigned agrees that the undersigned will notify the Company at any time on or prior to the closing in the event that the representations and warranties in this Agreement shall cease to be true, accurate and complete.

 

7.2 SUITABILITY (please answer each question)

 

(a)           For an individual Subscriber, please describe your current employment, including the company by which you are employed and its principal business:

 

	 	 
	 	 
	 	 
	 	 

 

(b)           For an individual Subscriber, please describe any college or graduate degrees held by you:

 

	 	 
	 	 
	 	 
	 	 

(c)           For all Subscribers, please list types of prior investments:

 

	 	 
	 	 
	 	 
	 	 

 

  

17

  

 

(d)           For all Subscribers, please state whether you have participated in other private placements before:

 

YES_______                                           NO_______

 

(e)           If your answer to question (d) above was “YES”, please indicate frequency of such prior participation in private placements of:

 

	  	
 

Public

Companies

	 	
 

Private

Companies

	 	
Public or Private Companies

with no, or insignificant,

assets and operations

 

	
Frequently

	  	 	  	 	  
	
Occasionally

	  	 	  	 	  
	
Never

	  	 	  	 	  

(f)           For individual Subscribers, do you expect your current level of income to significantly decrease in the foreseeable future:

 

YES_______                                           NO_______

 

(g)           For trust, corporate, partnership and other institutional Subscribers, do you expect your total assets to significantly decrease in the foreseeable future:

 

YES_______                                           NO_______

 

(h)           For all Subscribers, do you have any other investments or contingent liabilities which you reasonably anticipate could cause you to need sudden cash requirements in excess of cash readily available to you:

 

YES_______                                           NO_______

 

(i)           For all Subscribers, are you familiar with the risk aspects and the non-liquidity of investments such as the securities for which you seek to subscribe?

 

YES_______                                           NO_______

 

(j)            For all Subscribers, do you understand that there is no guarantee of financial return on this investment and that you run the risk of losing your entire investment?

 

YES_______                                           NO_______

 

7.3 MANNER IN WHICH TITLE IS TO BE HELD.  (circle one)

 

(a)           Individual Ownership

(b)           Community Property

(c)           Joint Tenant with Right of

Survivorship (both parties

must sign)

(d)           Partnership*

(e)           Tenants in Common

 

  

18

  

 

(f)           Company*

(g)           Trust*

(h)           Other*

 

*If Securities are being subscribed for by an entity, the attached Certificate of Signatory must also be completed.

 

7.4 FINRA AFFILIATION.

 

Are you affiliated or associated with a FINRA member firm (please check one):

 

Yes _________                                           No __________

 

If Yes, please describe:

	 
	 
	 

 

*If Subscriber is a Registered Representative with an FINRA member firm, have the following acknowledgment signed by the appropriate party:

 

The undersigned FINRA member firm acknowledges receipt of the notice required by Article 3, Sections 28(a) and (b) of the Rules of Fair Practice.

 

	 	 	 
	Name of FINRA Member Firm	 
	 	 	 
	By:	 	 
	 	Authorized Officer	 
	 	 	 
	Date:	 	 

 

7.5 The undersigned is informed of the significance to the Company of the foregoing representations and answers contained in the Confidential Investor Questionnaire contained in this Article VII and such answers have been provided under the assumption that the Company will rely on them.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

  

19

  

DOLLAR SUBSCRIPTION __________ / $3.00 = ______________ NUMBER OF UNITS

(rounded up to the nearest whole Unit)

(Minimum Subscription $24,000/8,000 Units)

 

	Signature	 	Signature (if purchasing jointly)	 
	 	 	 	 
	 	 	 	 
	Name Typed or Printed	 	Name Typed or Printed	 
	 	 	 	 
	 	 	 	 
	Title (if Subscriber is an Entity)	 	Title (if Subscriber is an Entity)	 
	 	 	 	 
	 	 	 	 
	Entity Name (if applicable) 	 	Entity Name (if applicable	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	Address	 	Address	 
	 	 	 	 
	 	 	 	 
	City, State and Zip Code	 	City, State and Zip Code	 
	 	 	 	 
	 	 	 	 
	Telephone-Business 	 	Telephone-Business	 
	 	 	 	 
	 	 	 	 
	Telephone-Residence	 	Telephone-Residence	 
	 	 	 	 
	 	 	 	 
	Facsimile-Business	 	Facsimile-Business	 
	 	 	 	 
	 	 	 	 
	Facsimile-Residence	 	Facsimile-Residence	 
	 	 	 	 
	 	 	 	 
	Tax ID # or Social Security #	 	Tax ID # or Social Security #	 
	 	 	 	 
	Name in which securities should be issued: 	 	 	 

Dated:                      _____________ , 2012

This Subscription Agreement is agreed to and accepted as of ________________, 2012.

 

	 	GREEN POLKADOT BOX, INC.	 
	 	 	 	 
	
 

	
By: 

	/s/ 	 
	 	Name:	 	 
	 	Title:	 	 
	 	 	 	 

 

  

20

  

CERTIFICATE OF SIGNATORY

(To be completed if Units are

being subscribed for by an entity)

I, ____________________________, am the ____________________________ of __________________________________________ (the “Entity”).

I certify that I am empowered and duly authorized by the Entity to execute and carry out the terms of the Subscription Agreement and to purchase and hold the Units, and certify further that the Subscription Agreement has been duly and validly executed on behalf of the Entity and constitutes a legal and binding obligation of the Entity.

IN WITNESS WHEREOF, I have set my hand this ________ day of _________________, 2012

 

	
 

	
 

	 	 
	 	 	(Signature)	 

 
   

   

   

   

   

   

  

21

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