Document:

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

 

 
  TRUST MEMBER APPLICATION AND AGREEMENT

 

THIS TRUST MEMBER APPLICATION AND AGREEMENT (this “Agreement”) is a legal agreement between the undersigned (the “Trust Member”) and The Green PolkaDot Box LLC, a Utah limited liability company (the “Company”), effective as of the date that the Company executes and confirms its acceptance of this Agreement after the submission of this Agreement by the Trust Member to the Company and the payment by the Trust Member of the “Trust Member Fee,” as defined below.  Capitalized terms not otherwise defined in this Agreement shall have the meaning assigned to them in Section 1, “Definitions,” below.

 

Consent to Agreement

The Electronic Signatures in Global and National Commerce Act (15 U.S.C. § 7001, et seq.) requires that you consent to entering into an electronic agreement with The Green PolkaDot Box before you can enter into this Agreement online. 

Evidence of the Agreement between you and the Company will be recorded electronically.  To enter into the Agreement, you must acknowledge, electronically, that you agree to the terms and conditions of the Agreement.

 

 

Your consent pertains to and will apply to all transactions between you and the Company.  You may withdraw your consent at any time.  However, should you do so, the Agreement will be terminated immediately and automatically. 

 

	 	To withdraw your consent or update any personal information, you may do so online at http://www.GreenPolkaDotBox.com through your “My Account” link after you log in to the Company’s Website or by sending written notice to The   Green PolkaDot Box LLC, Member Care Department, P.O. Box 675, American Fork, Utah 84003.

 

	 	You will have the ability to read, download, print, and retain this Agreement during the enrollment process. The most current versions of these documents are also posted in the “My Account” section of our Website for viewing, printing, and downloading.

 

When you electronically sign the Agreement, you agree that the Company may amend the Agreement at its sole discretion at any time. 

Please indicate your consent to entering into an electronic version of this Agreement with the Company by clicking on the “I Agree” button on the Web page next to the link to this Agreement. 

 

  

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By providing your consent, you also confirm that you are able to access all the terms of the Agreement electronically.

 

1.             Definitions.  Following are certain defined terms used in the Agreement.  Additional defined terms may be found elsewhere in the Agreement.

 

	 	1.1	“Account” means the record maintained by the Company for each Member that details the activity of a Member with respect to purchases, referrals, Personal Purchase Discounts, PolkaDot Reward Points, PolkaDot Value, Product Bonus Points, Referral Purchase Reward Points, and such other information that the Company from time to time elects to include.

 

           1.2           “Account Basis” means the 2,500 PolkaDot Reward Points in a Trust Member’s Account that were credited when the Trust Membership was purchased.

 

          1.3           “Active” means (i) the status of Trust Members for their natural life, (ii) the status of all Reward Members and Club Members who have paid the Membership Fee for an annual Membership during the applicable Membership Term, and (iii) the status of Reward Members who have received a Reward Membership from a Trust Member for an annual Membership Term.  Active status may be terminated by the Company for any Member who violates the terms and conditions of theAgreement.  An “Active Member” is a Member who is registered, is in good standing, and is compliant with the terms and conditions of this Agreement.

           1.4           “Agreement” means the Founding Trust Member Application and Agreement entered into between the Company and each Trust Member, the Reward Member Application and Agreement entered into between the Company and each Reward Member, and the Club Member Agreement entered into between the Company and each Club Member.

 

           1.5           “Applicant” means a Qualifying Person residing in the United States of America or Puerto Rico who desires to become a Member.

 

           1.6           “Cancellation” means the termination of a Member’s Green PolkaDot Box Membership.  Cancellation may be initiated either (i) voluntarily by a Member by sending the Company a Notice of Cancellation, or (ii) involuntarily at the Company’s initiation for failure of a Member to comply with the terms and conditions of the Agreement. 

 

           1.7           “Claw Back” means the process by which the Company recovers PolkaDot Reward Points that were awarded prior to product returns and/or refunds issued to a Referred Member. When a product is returned to the Company’s warehouse, the awards will be “clawed back” or removed from the Member’s Account to reflect the actual balance.

 

  

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           1.8           “Club Member” means a Qualifying Person who purchases a Club Membership.

           1.9           “Club Membership” means a Membership type that permits unlimited shopping privileges on the Website, subscription privileges to view proprietary information on the Website, and the right to receive proprietary product and service offerings and promotions from the Company. 

 

           1.10           “Company” means The Green PolkaDot Box LLC, a Utah limited liability company.

 

           1.11           “Date of Cancellation” means the date on which a Membership is cancelled by the Company or terminated by a Member and will be not less than 30 days after the transmission of the Notice of Cancellation by the Company or the Member, as the case may be.

 

           1.12           “Green PolkaDot Box” means the trade name of the Company and the Company’s URL for its Website at www.GreenPolkaDotBox.com. 

           1.13           “Immediate Family Members” means the spouse or legal domestic partner, parent, and natural born or adopted children of a Member who are living in the same residence unless not living in the same residence while enrolled in a prep school, college, or university or while on active duty in military service.

 

           1.14           “Member” means a Trust Member, a Reward Member, or a Club Member, as the case may be.

 

           1.15           “Member Agreement” means the contract between the Company and each Member, whether this Agreement or the contract entered into between the Company and a Club Member or a Reward Member, in their current form or as amended from time to time by the Company in its sole discretion.

 

           1.16           “Member Identification” is the full first and last name of a Member together with his or her unique, designated e-mail address, which will serve as the e-mail address of record for purposes of Member Identification.

 

           1.17           “Member Number” refers to the unique number assigned by the Company to each Member when they pre-register or register as a Member. This number is typically used in connection with a Member’s URL in order to be utilized in Company approved printed materials or when electronically promoting The Green PolkaDot Box to personal and professional acquaintances.

 

  

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           1.18           “Member Price” is the listed price of products and services posted for sale in the “Shop” section on the Website.

 

           1.19           “Membership” means a Member’s status with the Company as a Trust Member, Reward Member, or Club Member, as the case may be.

 

           1.20           “Membership Commencement Date” is the date a Member completes Registration or Renewal, after making full payment for the selected type of Membership.

           1.21           “Membership Fee” means the amount paid by a Trust Member on Registration or by a Reward Member or a Club Member on Registration and Renewal for an annual Membership.  Trust Members are not assessed Membership Fees after their initial Registration and Reward Members who receive a Reward Membership from one of the five annual Reward Memberships granted to a Trust Member are not assessed Membership Fees for the applicable annual Membership Term.

           1.22           “Membership Suspension” means the temporary suspension of a Reward Member’s Membership without maintaining “Active” requirements for a period of up to three consecutive years.  During a period of Membership Suspension a Reward Member may not earn or accrue PolkaDot Reward Points or enjoy shopping privileges; however, once the Member removes Membership Suspension status by becoming Active, he or she will be entitled to receive all the benefits of Reward Membership.  A Membership Suspension that is not reinstated within the three-year period will result in the Cancellation of the Membership.

           1.23           “Membership Term” means the one-year period commencing on the Membership Commencement Date (or each anniversary thereof upon Renewal of a Membership) and ending the day before the next anniversary of the Membership Commencement Date.

 

           1.24           “Notice of Cancellation” means the communication by (i) the Company to a Member advising the Member of the Cancellation of the Member’s Membership, or (ii) a Member to the Company advising the Company of the Member’s desire to cancel a Membership.  The Notice of Cancellation from the Member must be delivered to the Company at The Green PolkaDot Box LLC, Member Care Department, P.O. Box 675, American Fork, Utah 84003.  The Notice of Cancellation from the Company must be delivered to the Member at the Member’s designated e-mail address in the Member Identification.

  

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           1.25           “Official Materials” means literature, audio/visual, and other materials developed, printed, published, and distributed by the Company to Members.

 

           1.26           “Perpetual Reward Points” mean PolkaDot Reward Points awarded to a Trust Member that equal 2% of the Membership Fees collected by the Company from the annual Membership Registrations and Renewals from Referred Members in the Trust Member’s Referral Group.  Perpetual Reward Points are calculated and credited to the Trust Member’s Account in 12 monthly installments equal to the Membership Fee paid by the Referred Members in the Referral Group divided by 12 on the 20th of each calendar month beginning in the calendar month after each Referred Member’s Membership Commencement Date or anniversary of the Membership Commencement Date in the case of a Renewal of the Membership.

 

           1.27           “Personal Purchase Discount” means the discount percentage, ranging from 1% to 10%, that is applied to the PolkaDot Value of purchases made by Active Trust Members or Active Reward Members at the time of shopping check out. The Personal Purchase Discount for a Trust Member is 10% of the PolkaDot Value of the Trust Member’s total purchase at time of check out; the Personal Purchase Discount for a Reward Member varies depending on the number of Active Referred Members by the Active Reward Member as set forth in Section 6.1 below.

 

           1.28           “Policies and Procedures” means the terms of the Agreement to which a Member must agree to adhere and comply with as part of the Registration. The Company may amend the Agreement from time to time at its sole discretion.

 

           1.29           “PolkaDot Value” means the unique numerical value assigned to each separate product or service offered by the Company to Members. The PolkaDot Value typically will be less than the Member Price and will be calculated by the Company based on the actual costs to the Company of the products and services offered by the Company. The PolkaDot Value is determined solely by the Company; it may be applied to or removed from specific products from time to time as circumstances may warrant in the sole discretion of the Company.

 

           1.30           “PolkaDot Reward Points” means the numerical value issued to Trust Members and Reward Members, as applicable, for (i) Product Bonus Points, (ii) Referral Purchase Reward Points, (iii) Trust Bonus Points, and (iv) Perpetual Reward Points.  One PolkaDot Reward Point has a monetary value equal to $1.00 in U.S. currency and is redeemable as cash under certain circumstances as set forth in the Agreement. Accumulated PolkaDot Reward Points can be used or applied against a Member’s purchases at time of check out when shopping at the Website.

 

           1.31           “PolkaDot Reward Points Report” means an online report generated by the Company that is accessible through a logged-in Trust Member’s or Reward Member’s “My Account” profile.  The PolkaDot Reward Points Report provides critical data relating to the Activity status of a Member and identities of Referred Members, including their purchase transaction data. The PolkaDot Reward Points Report contains confidential and trade secret information that is proprietary to the Company.

 

  

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           1.32           “Product Bonus Points” means the number of additional PolkaDot Reward Points credited to the Account of a Trust Member, Reward Member, or Club Member accrued for the purchase of specific products for which the Company has assigned Product Bonus Points. Product Bonus Points are calculated and credited to the Member’s Account immediately upon completion of the Member’s purchase transactions for qualifying purchases.

           1.33           “Qualifying Person” refers to a person 18 years or older who pays the appropriate Membership Fee and otherwise qualifies to be a Member.  Only one Qualifying Person is permitted to become a Member among Immediate Family Members or for each physical address provided to the Company unless approved by the Company. A Membership may be used only by the Member and the Member’s Immediate Family Members.

 

           1.34           “Referral Aids” means literature, business cards, and digital media (CDs and DVDs) that the Company makes available for purchase by Members for the promotion of the The Green PolkaDot Box products and Memberships.

 

           1.35           “Referral Group” means the genealogy of all the current Members referred by a Trust Member and all current Members referred by the Trust Member’s Referred Members, generation after generation, who are in direct line to the Trust Member; however, the Referral Group will not include any Members in a Trust Member’s direct down-line after the third Trust Member included in the such direct down-line. For example, if a Trust Member refers another Member and the direct down-line referrals from such Member include three Trust Members, the Referral Group for such direct down-line will stop at the third Trust Member in that down-line.

 

           1.36           “Referral Purchase Reward Points” means the number of additional PolkaDot Reward Points credited to the Account of Trust Members and Reward Members for product purchases by Referred Members.  In the case of Trust Members, the number of Referral Purchase Reward Points will equal 10% of the PolkaDot Value of purchases by Referred Members.  In the case of Reward Members, the number of Referral Purchase Reward Points will equal a varying percentage of the PolkaDot Value depending on the number of Referred Members from such Reward Member as set forth in the Agreement. Referral Purchase Reward Points are calculated and credited to the Member’s Account immediately upon completion of the Referral Member’s purchase transactions for qualifying purchases. 

 

  

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           1.37           “Referred Member” means a new Member who (i) was referred directly by a Referring Member, and (ii) registers under the Member Identification of the Referring Member, either because the Member Identification of the Referring Member was imbedded in the electronic communication regarding the Company from the Referring Member to the Referred Member or manually input at the time of Registration by the Referred Member. 

 

           1.38           “Referring Member” means the Member who introduces a new Member to the Company, either through a Company-generated electronic communication or otherwise, and under whose Member Identification the new Member registers. A Referring Member’s name and e-mail address must be input, either automatically or manually, at Registration.  A Referring Member may be a Trust Member, a Reward Member, or a Club Member.

 

           1.39            “Registration” indicates the application process whereby an Applicant enters into the Agreement, purchases a Membership, is accepted by the Company, and becomes a Member. 

 

           1.40           “Registration Date” refers to the Membership Commencement Date or that date that a Qualifying Person becomes a Member.

 

           1.41           “Renewal” means the annual update of a Membership and payment of the Membership Fee by an Active Member, which is processed automatically by the Company unless it has received a Notice of Cancellation from a Member 30 days prior to the end of the annual Membership Term. 

           1.42           “Reward Member” means a Qualifying Person who purchases a Reward Membership.

           1.43           “Reward Membership” means a Member’s membership type that permits unlimited shopping privileges on the Website, subscription privileges to view proprietary information on the Website, the right to receive proprietary product and service offerings and promotions from the Company, and the right to participate in the Rewards Plan for which a Reward Member is eligible.

 

           1.44           “Rewards Plan” means the Company’s policies and procedures that describe and detail the system for rewarding Trust Members and Reward Members, based on the number of their Referred Members, including (i) the annual waiver of the Trust Membership Fee, (ii) the five free Reward Memberships each year awarded to each Trust Member, (iii) the Personal Purchase Discount available to each Active Member, (iv) the 2,500 PolkaDot Reward Points credited to each Trust Member at the completion of Registration, and (v) the PolkaDot Reward Points that may be earned by each Trust Member and each Reward Member from Product Bonus Points, Referral Purchase Reward Points, Trust Bonus Points, and Perpetual Reward Points. 

 

  

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           1.45           “Social Security Number” means the valid Social Security Number issued by the United states of America that is not the same as the valid Social Security Number of another Member or an Immediate Family Member and not the same as the valid Social Security Number attached to any other Member.

 

           1.46           “Surplus PolkaDot Reward Points” is defined as any accumulation of PolkaDot Reward Points at the end of any calendar month in excess of 200 PolkaDot Reward Points; or, in the case of a Trust Member, any accumulation of PolkaDot Reward Points in excess of 200 PolkaDot Points above the Account Basis.

 

           1.47           “Trust Bonus Points” means the number of additional PolkaDot Reward Points credited to the Account of a Trust Member who agrees to not use do not use more than 160 PolkaDot Reward Points of the Member’s Account Basis during each of the first 18 months of Membership. Trust Bonus Points are calculated and credit to the Trust Member’s Account on the 20th day of each calendar month for the Trust Bonus Points earned during the previous calendar month.

 

           1.48           “Trust Member” means a Qualifying Person who purchases a Trust Membership.

 

           1.49           “Trust Membership” means a Member’s membership type that permits unlimited shopping privileges on the Website, subscription privileges to view proprietary information on the Website, the right to receive proprietary product and service offerings and promotions from the Company, and the right to participate in the Rewards Plan for which a Trust Member is eligible.

 

           1.50           “Trust Membership Fee” means the $2,000 paid by the Trust Member for a Trust Membership during the Registration Process.  The Trust Membership Fee is a one-time fee paid for a Trust Membership for the term of the Trust Member’s natural life.  The Trust Membership Fee may include multiple $2,000 units (“Trust Units”).

           1.51           “Website” means the Company’s www.GreenPolkaDotBox.com URL.

 

2.           Trust Member Agreement Terms and Conditions.

 

2.1           Independent Contractor. The Trust Member who is a party to this Agreement hereby acknowledges the Trust Member is not an employee or representative of the Company, but that the Trust Member’s status is as an independent contractor. 

 

  

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2.2           Trust Membership Fee.  The Trust Member hereby agrees to pay the $2,000 Trust Membership Fee to purchase a Trust Membership for the duration of the Trust Member’s natural life.  The Trust Member may purchase additional Trust Memberships at the price of $2,000 each.  Payment of the Trust Membership Fee entitles the Trust Member to participate in the Rewards Plan described in Section 3.2 below.

 

2.3           Escrow Specialists.  The Company and Escrow Specialists have entered into that certain Proceeds Escrow Agreement dated June 10, 2011, a copy of which is attached hereto and incorporated herein by this reference as Exhibit “A” (the “Escrow Agreement”).  The Company and the Trust Member agree that the Trust Membership Fee will be deposited by the Company into an escrow with Escrow Specialists in accordance with the terms of the Escrow Agreement until 300 Trust Memberships are sold by the Company, after which the aggregate Trust Membership Fees will be released to the Company for its working capital and to purchase inventory (the “Escrow Release”).  If 300 Trust Memberships have not been purchased by September 30, 2011, the Trust Membership Fee paid by the Trust Member will be returned to the Trust Member in the form of a check or credit to the credit card account used by the Trust Member to purchase the Trust Membership (the “Escrow Refund”).  In the event of the Escrow Refund, the Agreement between the Company and the Trust Member will be deemed rescinded and of no force or effect. 

 

2.4           No Annual Membership Fee.  The Company agrees to waive the annual Membership Fee for the duration of the natural life of the Trust Member. 

 

2.5           No Assignment Permitted Other Than to Immediate Family Members.  The Trust Member agrees and acknowledges that the Trust Membership is not useable by, assignable to, or transferable to a third party other than Immediate Family Members without the express written permission of the Chief Executive Officer of the Company, at the Company’s sole discretion.  Additional Trust Memberships purchased by the Trust Member will be registered in the name of a Qualifying Person designated by the Trust Member, and such Qualifying Person must become a party to an Agreement with the Company.

 

2.6           Maintenance of Active Status with the Company.  The Trust Member acknowledges that the Trust Member must be in good standing (not in violation of the Agreement) as an Active Member in order to qualify for Personal Purchase Discounts and to be eligible to earn PolkaDot Reward Points.

     

                2.7           Amendment of Policies and Procedures and Rewards Plan.  The Trust Member agrees that the Company may amend the Policies and Procedures and the Rewards Plan at its sole discretion by amendment of the Agreement and that the Trust Member’s continuation of Membership after any such amendment will constitute the Trust Member’s acceptance of any and all amendments.

 

  

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                2.8           Adherence to Policies and Procedures.  The Trust Member agrees to abide by the terms and conditions of the Agreement, as amended from time to time, as a condition of the Trust Member’s continuing Membership rights and privileges.  If the Trust Member violates the terms and conditions of the Agreement, the Trust Member agrees that the Company at its sole discretion may revoke and terminate the Trust Membership.

 

2.9           Cancellation of Trust Membership by the Trust Member.  The Company agrees that the Trust Member may cancel the Trust Membership at any time, upon 30 days advance written notice using the Notice of Cancellation form on the Website.  Upon Cancellation of the Trust Membership, any unused portion of the PolkaDot Reward Points accumulated in the Trust Member’s account can be redeemed through the purchase of products offered for sale by the Company on the Website at the regular Member Price until the Date of Cancellation.  The Date of Cancellation is 30 days after the receipt of written Notice of Cancellation. The Trust Member agrees that upon the Date of Cancellation the Trust Membership will be terminated, that any unused PolkaDot Reward Points will be forfeited as of the Date of Cancellation, and that all benefits received and/or promised in accordance with this Agreement will be terminated. No portion of the Membership Fee will be refundable in the event of Cancellation of the Membership.

 

               2.10           Cancellation of Membership by the Company.  The Trust Member agrees that if the Company revokes and terminates the Trust Membership, the Trust Member waives all rights to Trust Membership and will forfeit all of the rights set forth in this Agreement.

 

2.11           Termination of Business by the Company.  The Trust Member agrees that if the Company (i) ceases business operations and terminates distribution and sale of its products and services, (ii) files for protection under the Federal bankruptcy laws, or (iii) initiates voluntary dissolution procedures as a business entity, then the Membership will be canceled on the Date of Cancellation set forth in the Company’s Notice of Cancellation to the Trust Member.  The Trust Member agrees that upon the Date of Cancellation the Trust Membership will be terminated, that any unused PolkaDot Reward Points will be forfeited as of the Date of Cancellation, and that all benefits received and/or promised in accordance with this Agreement will be terminated.

 

3.             Rewards Plan for Trust Members.

 

3.1           Commencement of the Rewards Plan. The Trust Member becomes eligible to participate in the Rewards Plan upon completion of the Registration process; however, PolkaDot Reward Points will not be credited to the Trust Member’s Account until 30 days after the Escrow Release referred to in Section 2.3 above, which period is required for the Company to acquire inventory of products for sale on the Website (the “Business Start Date”). 

 

  

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3.2           Components of the Rewards Plan for Trust Members.  In consideration for the Trust Membership Fee, for the duration of the Trust Member’s natural life, the Trust Member will receive:

 

	
  

	 	
(i)

	
a Trust Membership with no additional annual Membership Fee for the duration of the natural life of the Trust Member,

 

	
  

	 	
(ii)

	
an immediate, one-time credit of 2,500 PolkaDot Reward Points per Trust Membership purchased,

 

	
  

	 	
(iii)

	
five one-year Reward Memberships per Trust Membership purchased, annually, that the Trust Member may assign to other individuals for the one-year period of the Reward Membership,

 

	
  

	 	
(iv)

	
a 10% Personal Purchase Discount on all purchases of products and services from the Company by the Trust Member,

 

	
  

	 	
(v)

	
PolkaDot Reward Points credited to the Trust Member’s Account from the following sources:

 

	
  

	
(A)

	
Product Bonus Points for the number of Product Bonus Points assigned to particular products from time to time by the Company if and when those particular products are purchased by the Trust Member,

 

	
  

	
(B)

	
Referral Purchase Reward Points equal to 10% of the PolkaDot Value of all of the products and services purchased by a Referred Members of the Trust Member,

 

	
  

	
(C)

	
Trust Bonus Points for each Trust Member who agrees to not use do not use more than 160 PolkaDot Reward Points of the Member’s Account Basis during each of the first 18 months of Membership following the Business Start Date as more fully described in Section 3.3 below, and

 

	
  

	
(D)

	
Perpetual Reward Points equal to 2% of the Membership Fees collected by the Company from the annual Membership Registrations and Renewals from Members in the Trust Member’s Referral Group.

 

  

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All of the above components of the Rewards Plan will commence on the Business Start Date and are subject to the conditions pertaining to each component of the Rewards Plan.

 

           3.3           Trust Bonus Points Conditions.  Trust Bonus Points, up to a maximum of 2,000 Trust Bonus Points, will accrue monthly on the condition that the Trust Member agrees not to use and does not use more than 160 PolkaDot Reward points during each of the first 18 months of Membership after the Business Start Date.  Trust Bonus Points will be credited to the Trust Member’s Account on the 20th day of the month for each preceding month’s Trust Bonus Points in accordance with the following schedule:

	  	  
	
•Month 1–

	
25 Trust Bonus Points

	
•Month 2–

	
35 Trust Bonus Points

	
•Month 3–

	
45 Trust Bonus Points

	
•Month 4–

	
55 Trust Bonus Points

	
•Month 5–

	
65 Trust Bonus Points

	
•Month 6–

	
75 Trust Bonus Points

	
•Month 7–

	
85 Trust Bonus Points

	
•Month 8–

	
95 Trust Bonus Points

	
•Month 9–

	
105 Trust Bonus Points

	
•Month 10 –

	
115 Trust Bonus Points

	
•Month 11 –

	
125 Trust Bonus Points

	
•Month 12 –

	
135 Trust Bonus Points

	
•Month 13 –

	
145 Trust Bonus Points

	
•Month 14 –

	
155 Trust Bonus Points

	
•Month 15 –

	
165 Trust Bonus Points

	
•Month 16 –

	
175 Trust Bonus Points

	
•Month 17 –

	
185 Trust Bonus Points

	
•Month 18 –

	
215 Trust Bonus Points

 

           3.4           PayPal Account; Surplus PolkaDot Reward Points. A Trust Member must establish a PayPal account to receive a transfer of Surplus PolkaDot Reward Points whenever the total Surplus PolkaDot Reward Points exceed 1,000 PolkaDot Reward Points above the Account Basis. When Surplus PolkaDot Reward Points equal 1,000 points above the Account Basis in a Trust Member’s account 800 of the Surplus PolkaDot Reward Points are converted into cash  (at the rate of $1.00 per Surplus PolkaDot Reward Point) and automatically deposited directly into a Trust Member’s PayPal account.  In the event of such a transfer, the processing fees charged by PayPal will be charged to the Trust Member’s account.

 

           3.5           Free Club Member Referral Privileges. Trust Members may refer an unlimited number of free Club Memberships, until not less than 1,000 Trust Memberships are sold by the Company, on the condition that all referred individuals watch the Founding Trust Membership Webinar in full. Trust Members may refer an unlimited number of Club and Reward Members after the Company opens for business.

 

  

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           3.6           Accrual of Perpetual Reward Points. A Trust Member in full compliance with the Agreement also receives a 2% Perpetual Reward on the Membership Registration and Renewal of every Member in his or her Referral Group for the lifetime of his or her Membership.  The Perpetual Reward Points are credited to the Account of a Trust Member commencing on the 20th day of the month following the Membership Commencement Date (following Registration or Renewal) of each Member in the Referral Group. All Perpetual Reward payments, less charge backs and refunds, will be credited to the Trust Member’s Account. Trust Members may track the growth of their Referral Group and their accumulating Perpetual Bonus Points in the “My Accounts” section the Website.

 

           3.7           Tax Payer Identification. A Trust Member is required to provide a Social Security Number for the Membership Identification. Trust Members are responsible for paying local, state, and Federal taxes on any income generated through the Trust Member Rewards Plan as an independent contractor. Annually and compliant with tax law, the Company will provide an I.R.S. Form 1099 Misc (Non-Employee Compensation) earnings statement to each Member who had earnings (PolkaDot Reward Points) of over $600 in the previous calendar year. The Company will not activate any Membership until the Member posts the required, valid taxpayer identification, in their Account Information section of “My Account,” the provision of which is a condition to completing the Registration.

 

4.           Returns and PolkaDot Reward Points Claw-Back.

 

           4.1           Claw-Back.  All product returns for payment refund by the Trust Member, or by Referred Members will result in a Claw Back of all related Personal Purchase Discounts and/or PolkaDot Reward Points, as applicable. Amounts subject to the Claw Back will be debited and posted to the Member’s Account in the calendar month when the product purchase refund is issued. 

 

5.           Miscellaneous Policies and Procedures.

           5.1           Amendments to the Agreement.  The Company reserves the right to amend the Agreement in its sole and absolute discretion. By signing the Agreement and by continuing to exercise the privileges of a Member, a Member agrees to abide by all amendments or modifications that the Company elects to make. Amendments shall be effective upon 30 days’ notice to all Members that the Agreement has been modified.  Notification of amendments shall be published on the Website. The Company will provide or make available to all Members a complete copy of the amended provisions by (i) posting them on the Website, or by (ii) e-mail to the designated address in the Member Identification.  Any Member’s decision to continue to use the Website or a Member’s acceptance of PolkaDot Reward Points constitutes acceptance of any and all amendments to the Agreement.

 

  

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           5.2           Failures in Performance or Delays. The Company shall not be responsible for delays or failures in performance of its obligations when performance is made commercially impracticable due to circumstances beyond its reasonable control. This includes, without limitation, strikes, labor difficulties, riot, war, fire, death, curtailment of a party’s source of supply, power failures, or government decrees or orders.

           5.3           Terms are Severable.  If any provision of the Agreement, in its current form or as it may be amended, is found to be invalid or unenforceable for any reason, only the invalid portion(s) of the provision shall be severed and the remaining terms and provisions shall remain in full force and effect and shall be construed as if such invalid, or unenforceable provision never comprised a part of the Agreement.

           5.4           Waiver. No failure of the Company to exercise any right or power under the Agreement or to insist upon strict compliance by a Member with any obligation or provision of the Agreement, and no custom or practice of the parties at variance with the terms of the Agreement, shall constitute a waiver of the Company’s right to demand exact compliance with the Agreement. Waiver by the Company can be affected only in writing by an authorized officer of the Company. the Company’s waiver of any particular breach by a Member shall not affect or impair the Company’s rights with respect to any subsequent breach, nor shall it affect in any way the rights or obligations of any other Member. Nor shall any delay or omission by the Company to exercise any right arising from a breach affect or impair the Company’s rights as to that or any subsequent breach. The existence of any claim or cause of action of a Member against the Company shall not constitute a defense to the Company’s enforcement of any term or provision of the Agreement.

           5.5           Requirements to Become a Member.  To become a Member or be a Qualifying Person, each applicant must be of the age of majority in his or her state of residence, reside in the United States or Puerto Rico, have a valid Social Security number, and pay the appropriate Membership Fee. The Company reserves the right to reject any applications for a new Member or applications for Renewal.  To become a new Member an applicant must enroll online on the Website.

           5.6           Upgrade from Club Member to Reward Member. A Club Member may upgrade to a Reward Membership at any time by paying the difference in price between the Club Membership and Reward Membership.

 

  

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           5.7           Renewal of Membership.  The Membership Term is one year from the Membership Commencement Date. Members may renew their Membership each year by paying the applicable annual Membership Fee on or before the anniversary of their Membership Commencement Date. If the Renewal Membership Fee is not paid on or before the Renewal deadline, the Membership will be subject to Cancellation by the Company. Membership Renewal shall be automatic, subject to the Member’s Cancellation right, by charging the Membership Fee to the Member’s authorized credit card on each anniversary of the Membership Commencement Date. 

           5.8           Adherence to the Rewards Plan. Members who desire to receive PolkaDot Reward Points must adhere to the terms of the Rewards Plan as set forth in this Agreement and on the Website.

           5.9           Not a “Business Opportunity.” Members shall not refer to any form of Membership in the Company as a “business opportunity” through or in combination with any other system, program, or method of marketing.  Members shall not require or encourage other current or prospective Members to participate in the Company in any manner that varies from what is stated in Official Materials. Members shall not require or encourage other current or prospective Members to execute any agreement or contract other than official Company agreements and contracts in order to become a Member. Similarly, Members shall not require or encourage other current or prospective Members to make any purchase from, or payment to, any individual or other entity to participate in the Rewards Plan other than those purchases or payments identified as recommended or required Official Materials.

           5.10           Advertising.  All Members shall safeguard and promote the good reputation of the Company and its Rewards Plan. Any promotional efforts by Members shall be consistent with the public interest, and must avoid all discourteous, deceptive, misleading, unethical or immoral conduct or practices.

Members may not use printed or electronic collateral materials for advertising and promotion other than those produced by the Company. 

           5.11           Domain Names and E-mail Addresses.  Members may not use or attempt to register any of the Company trade names, trademarks, service names, service marks, product names, the Company’s name, or any derivative thereof, for any Internet domain name, nor may Members incorporate or attempt to incorporate any of the Company’s trade names, trademarks, service names, service marks, product names, the Company’s name, or any derivative thereof, into any electronic mail address.

           5.12           Trademarks and Copyrights.  The Company will not allow the use of its trade names, trademarks, designs, or symbols by any person, including the Members, without its prior, written permission. Members may not produce for sale or distribution any recorded Company events and speeches without written permission from the Company nor may Members reproduce for sale or for personal use any recording of Company-produced audio or video tape presentations.  The name of the Company and other names as may be adopted by the Company are proprietary trade names, trademarks and service marks of the Company. As such, these marks are of great value to the Company and are supplied to Members for their use only in an expressly authorized manner. Use of the Company name on any item not produced by the Company is prohibited.  No Member may place telephone directory display ads using the Company’s name or logo. Members may not answer the telephone by saying “Green PolkaDot Box” or in any other manner that would lead the caller to believe that he or she has reached business offices of the Company.

 

  

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           5.13           Media and Media Inquiries.  Members must not respond to media inquiries regarding the Company, the Website, or their Membership. All inquiries by any type of media must be immediately referred to the Company’s Public Relations Department.

           5.14           Unsolicited E-Mails (“Spam”).  The Company does not permit Members to send unsolicited commercial e-mails unless such e-mails strictly comply with applicable laws and regulations including, without limitation, the Federal CAN SPAM Act. Any e-mail sent by a Member that promotes the Company, its products and services must comply with the following:

	
(i)            

	
There must be a functioning return e-mail address from the sender,

	
  

	
(ii)

	
There must be a notice in the e-mail that advises the recipient that he or she may reply to the e-mail, via the return e-mail address, to request that future e-mail solicitations or correspondence not be sent to him or her (a functioning “opt-out” notice).

	
  

	
(iii)

	
The e-mail must clearly and conspicuously disclose that the message is an advertisement or solicitation, and

	
  

	
(iv)

	
The use of deceptive subject lines and/or false header information is prohibited.

All opt-out requests, whether received by e-mail or regular mail, must be honored. If a Member receives an opt-out request from a recipient of an e-mail, the Member must forward the opt-out request to the Company.

           5.15           Unsolicited Faxes. Except as provided in this section, Members may not use or transmit unsolicited faxes, mass e-mail distribution, unsolicited e-mail, or “spamming” relative to the operation of their the Company businesses. The terms “unsolicited faxes” and “unsolicited e- mail” mean the transmission via telephone facsimile or electronic mail, respectively, of any material or information advertising or promoting the Company, its Website, its Memberships, its Rewards Plan or any other aspect of the Company that is transmitted to any person, except that these terms do not include a fax or e- mail:

 

  

16

  

	
  

	
(i)

	
to any person with that person’s prior express invitation or permission, or

	
  

	
(ii)

	
to any person with whom the Member has an “established business or personal relationship,” which means a prior or existing relationship formed by a voluntary two-way communication between a Member and a person, on the basis of (A) an inquiry, application, purchase or transaction by the person regarding products or services offered by such Member, or (B) a personal or familial relationship, which relationship has not been previously terminated by either party

           5.16           False Enrollment.  False Enrollment is strictly and absolutely prohibited and is grounds for Cancellation of Membership by the Company. “False Enrollment” includes: (a) the enrollment of individuals or entities without the knowledge of and/or execution of an Agreement by such individuals or entities, (b) the fraudulent enrollment of an individual or entity as a Member, and (c) the enrollment or attempted enrollment of non-existent individuals (“phantoms”) or entities as Members.

           5.17           Changes in Member Information.  Members may make changes to the Membership information, such as the Member Identification, contained in his or her account by modifying “My Account” on the Website. Making changes does not cancel or modify the status of the Member or amend the Agreement. 

           5.18           Change of Referring Member.  To protect the integrity of the Company and safeguard Members, the Company will not allow the Referred Member’s information, such as the Member Identification, to be changed, transferred, or replaced by the Referring Member or any other Member or individual. 

           5.19           Unauthorized Claims and Actions.  Each Member is fully responsible for all of his or her own verbal and written statements regarding the Company, Membership, and the Rewards Plan that are not expressly contained in the Website. Members agree to indemnify the Company and the Company’s directors, managers, officers, employees, and agents, and hold them harmless from any and all liability including judgments, civil penalties, refunds, attorney fees, court costs, or lost business incurred by the Company as a result of the Member’s unauthorized representations or actions. This provision shall survive the termination of the Agreement with any Member.

 

  

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           5.20           Product Claims.  No claims (which include personal testimonials) as to therapeutic, curative or beneficial properties of any products offered by the Company may be made except those contained in the Website. In particular, no Member may make any claim that products available through the Company are useful in the cure, treatment, diagnosis, mitigation or prevention of any diseases. Such statements can be perceived as medical or drug claims. Not only do such claims a violation of the Company policies, but may potentially violate Federal and state laws and regulations, including the Federal Food, Drug, and Cosmetic Act and Federal Trade Commission Act.

           5.21           Income Claims.  Members may not make income projections, income claims, or disclose his or her Account status (including the showing of checks, copies of checks, bank statements, or tax records).

           5.22           Trade Shows, Expositions, and Other Sales Forums.  Members may promote the Company Website and Rewards Plan at trade shows and professional expositions; however, before submitting a deposit to the event promoter, Members must contact the Member Care Department in writing for conditional approval. The Company further reserves the right to require use of an approved booth and/or display and to refuse authorization to participate at any function which it does not deem a suitable forum for the promotion of the Company.

           5.23           Cross Referring.  Actual or attempted “cross referring” is strictly prohibited. “Cross referring” is defined as the enrollment of an individual who or entity that already has a current Agreement on file with the Company, or who has had such an agreement in the past with a different Referring Member. The use of a spouse’s or relative’s name, trade names, DBA’s, assumed names, corporations, partnerships, trusts, fictitious Social Security numbers to circumvent this policy is prohibited. Members shall not demean, discredit or defame other Members in an attempt to refer a new member. If “cross referring” is discovered it must be brought to the Company’s attention immediately. The Company may take disciplinary action against the Member who changed his or her Referring Member and the Member who encouraged or participated in the “cross referring.” Members waive all claims and causes of action against the Company arising from or relating to disciplinary action resulting from the enforcement of this policy.

           5.24           Errors or Questions.  If a Member has questions about or believes any errors have been made regarding Membership rights or status, PolkaDot Reward Points, Product Bonus Points, Referral Purchase Reward Points, Trust Bonus Points, Perpetual Reward Points, Personal Purchase Discounts, My Account Reports, or charges, the Member must notify the Company in writing within 60 days of the date of the purported error or incident in question. The Company will not be responsible for any errors, omissions or problems not reported to the Company within 60 days.

 

  

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           5.25           Governmental Approval or Endorsement.  Members shall not represent or imply that the Company or its Rewards Plan have been “approved,” “endorsed,” or otherwise sanctioned by any government agency.

           5.26           Tax Payer Identification.  All Members are required to provide their Social Security number to the Company on Registration. 

           5.27           Income Taxes.  Each Member is responsible for paying local, state, and Federal taxes on any income generated through the Rewards Plan as a Member. Every year, the Company will provide an IRS Form 1099 MISC (Non-employee Compensation) earnings statement to each Member who had earnings (PolkaDot Reward Points) of over $600 in the previous calendar year.

           5.28           Non-Employee Status.  Members are independent contractors and are not employees and are not purchasers of a franchise or a business opportunity. The Agreement between the Company and its Members does not create an employer/employee relationship, partnership, or joint venture between the Company and the Member. A Member shall not be treated as an employee for his or her services or for Federal or state tax purposes. All Members are responsible for paying local, state, and Federal taxes due from all compensation earned as a Member of the Company. The Member has no authority (expressed or implied) to bind the Company to any obligation.

 

 

           5.29           Minors.  A person who is recognized as a minor in his/her state of residence may not be a Member. Members shall not enroll or refer minors for Membership.

           5.30           Referring.  All Active Members have the right to refer others to enroll as Members into the Company; however, a Trust Member may not refer another Trust Member to the Company. Each prospective Reward Member and Club Member has the ultimate right to choose the Referring Member. If two Members claim to be the Referring Member of the same new Referred Member, the Company shall regard the first application received by the Company as controlling.

           5.31     No Succession of Membership on Death of a Member Other than by Testamentary Transfer.  Upon the death or incapacitation of a Member, his or her Membership will be terminated; however, a Membership may be transferred to an Immediate Family Member after death in accordance with the terms of a the Member’s last will and testament upon presentation of proof of such testamentary transfer to the Company.

 

  

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           5.32           No Telemarketing by Members.  Members must not engage in telemarketing relative to promotion of the Company and referring others to Membership. The term “telemarketing” means the placing of one or more telephone calls to individuals or entities with whom they have no personal or professional relationship in an attempt to refer them or induce them to purchase a Membership.   Members may call family members, personal friends, and acquaintances. An “acquaintance” is someone with whom you have at least a recent first-hand relationship (i.e. you have recently personally met him or her).

           5.33           Maintenance of Current Member Information.  To ensure timely delivery of products and Surplus PolkaDot Reward Points disbursements, it is critically important that Member records, including phone numbers, e-mail and shipping addresses, are kept current. Members planning to move, change credit card or banking information are responsible to update their personal information via the “My Account” function of the Website on a timely basis. To guarantee proper delivery, two weeks advance notice must be provided to the Company on all changes to Member Information.

           5.34           No Member Purchase Requirements.  There are no purchase requirements for Members.

           5.35           Minimum Order. The Company maintains a minimum order requirement of $35.00 before tax and applicable shipping charges.

           5.36           Loss of Active Status.  A Member who is no longer an Active Member because of failure to pay the annual Membership Fee or failure to observe the terms and conditions of the Agreement loses all of the PolkaDot Reward Points accrued in the Member’s Account and forfeits the right to accrue further PolkaDot Reward Points, ceases to be a Member, and loses all Membership rights and privileges.

           5.37           No Refund of Membership Fees.  Membership Fees are considered fully earned by the Company when paid and are not subject to any refund upon Cancellation of Membership or the loss of Active status.

           5.38           Member Reports in “My Account.”  The Company will endeavor to insure that all information provided by the Company in any report, including but not limited to Member orders, referral activity, and PolkaDot Reward Points Reports will be accurate and reliable. Nevertheless, due to various factors including the inherent possibility of human and mechanical error; the accuracy, completeness, and timeliness of orders; denial of credit card and electronic check payments; cancelled Memberships; returned products; credit card and electronic check charge-backs; the information is not guaranteed by the Company or any persons creating or transmitting the information.  Access to and use of the Company’s online reporting services and your reliance upon such information is at your own risk. All such information is provided to you “as is.” If you are dissatisfied with the accuracy or quality of the information, your sole and exclusive remedy is to discontinue use of and access to the Company’s online reporting services and your reliance upon the information.

 

  

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           5.39           Shipping and Return Policy. The Company evaluates and deals with Member complaints and requests for product returns on a case-by-case basis.  As a general policy the Company is committed to provide such a high level of service that Member complaints are not necessary.  In the rare case when a Member is dissatisfied The Green PolkaDot Box for any reason, the Company will do everything reasonably possible to satisfy and retain the trust of that Member.  Members are encouraged to immediately contact the Member Care department via the Website to discuss any problems that may arise.  The Company may, in its sole discretion, choose to terminate a Member’s Membership immediately, if sufficient evidence exists to prove that a Member is engaged in deceptive or abusive complaint practices.

6.           Summary of Current Reward Membership Provisions.

           6.1           Personal Purchase Discounts. Reward Members earn a Personal Purchase Discount (“PPD”) that ranges from 1% to 5% of the PolkaDot Value on personal purchases by Referred Members, depending on the number of Members they refer as follows:

	
(i)  

	
one to four Referred Members results in a 1% PPD,

	
(ii)  

	
five to nine Referred Members results in a 2% PPD,

	
(iii)  

	
10 to 14 Referred Members results in a 3% PPD,

	
(iv)  

	
15 to 19 Referred Members results in a 4% PPD, and

	
(v)  

	
20 or more Referred Members results in a 5% PPD.

Personal Purchase Discount levels, once achieved, are never lost or forfeited if the Reward Member is Active and is in compliance with the Agreement.

           6.2           PolkaDot Reward Points. Reward Members earn PolkaDot Reward Points from Referral Purchase Reward Points (“RPRP”) that range from 2% to 10% of the PolkaDot Value on purchases by Referred Members, depending on the number of Members they refer as follows:

	
(i)  

	
one to four Referred Members results in a 2% RPRP,

 

  

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(ii)  

	
five to nine Referred Members results in a 4% RPRP,

	
(iii)  

	
10 to 14 Referred Members results in a 6% RPRP,

	
(iv)  

	
15 to 19 Referred Members results in a 8% RPRP, and

	
(v)  

	
20 or more Referred Members results in a 10% RPRP.

There is no limit to the number of Members that a Reward Member can refer to the Company if the Reward Member is Active and is in compliance with the Agreement. RPRP levels, once achieved, are never lost or forfeited if the Reward Member is Active and is in compliance with the Agreement.

           6.3           Product Bonus Points. Reward Members are eligible to earn Product Bonus Points.

           6.4           Suplus PolkaDot Reward Points. PolkaDot Reward Points that are accrued yet unused in a Reward Member Account will be carried forward.  Any accumulated balance that exceeds 200 PolkaDot Reward Points is referred to as Surplus PolkaDot Reward Points.  When Surplus PolkaDot Reward Points of a Reward Member exceed 800 in the Reward Member’s Account, the Company will remit the Surplus PolkaDot Reward Points to Reward Members by direct deposit into the Reward Member’s Pay Pal account. The Company will charge a 3% processing fee for all direct deposits into the Reward Member’s Pay Pal account that will be deducted from the Surplus PolkaDot Reward Points at the time of direct deposit.

7.           Summary of Current Club Membership Provisions.

           7.1           Club Membership Benefits.  Club Members cannot qualify to receive Personal Purchase Discounts or PolkaDot Reward Points.  Club Members may refer other Members, but they are not eligible to receive Referral Purchase Reward Points.  Club Members must upgrade to a Reward Membership to become eligible to receive Personal Purchase Discounts and PolkaDot Reward Points, which will accrue from the new Membership Commencement Date upon upgrade or Renewal.

8.           Disclaimer and Hold Harmless.

           8.1           Disclaimer Regarding Product Claims. The Company strives to keep its Members informed concerning product claims and makes every effort to be as accurate as possible; however, the Company shall not be responsible for the claims of manufacturers or suppliers of products offered for sale by the Company.  Members agree that the manufacturers or suppliers of products offered by the Company shall be solely responsible for any health or nutrition problems a Member experiences with any product purchased from the Company or any damages caused by using products offered on the Company’s Website.  The Member agrees that it is the Member’s responsibility to always read the label and/or contact the manufacturer or supplier of product if the Member has any questions regarding the suitability of each product for the Member.  The Member agrees that it is the Member’s responsibility to consult the Member’s healthcare practitioner for any specific health and nutrition concerns.  The Member agrees that the Company is not responsible or liable for compliance by the manufacturer or supplier of products on the Company’s Website with food labeling laws.  All material on the Company’s Website is provided for the Member’s information only and may not be construed as medical/health advice, diagnosis, treatment, or instruction. No action or inaction should be taken based solely on the contents of this information; instead, Members should consult appropriate healthcare professionals on any matter relating to their health and wellbeing. THE COMPANY DISCLAIMS ALL WARRANTIES, EITHER EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR PARTICULAR PURPOSE WITH RESPECT TO THE PRODUCTS OFFERED FOR SALE ON THE COMPANY’S WEB SITE.

 

  

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           8.2           Hold Harmless.  The Member agrees to hold the Company harmless from any and all claims, demands, rights, lawsuits, causes of action, obligations, controversies, debts, costs, expenses (including but not limited to attorneys' fees), damages, judgments, losses and liabilities of whatever kind or nature, fixed or contingent, in law, equity or otherwise, whether known or unknown, whether or not apparent or concealed arising out product liability claims for products offered for sale on the Company’s Website that are manufactured or supplied by others. In no event shall the Company or its owners, affiliates, employees, contractors, officers, or agents be liable for any damages (including, without limitation, incidental and consequential damages, personal injury/wrongful death, lost profits, or damages resulting from the use of products offered on the Company’s Website that are manufactured or supplied by others, whether based on warranty, contract, tort, or any other legal theory.

9.           Dispute Resolution and Disciplinary Proceedings.

           9.1           Disciplinary Sanctions.  Violation of the Agreement or any illegal, fraudulent, deceptive or unethical business conduct by a Member may result, at the Company’s discretion, in one or more of the following corrective measures:

	
(i)            

	
Issuance of a written warning or admonition,

	
  

	
(ii)

	
Requiring the Member to take immediate corrective measures,

 

  

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(iii)

	
Imposition of a fine, which may be deducted from PolkaDot Reward Points,

	
  

	
(iv)

	
Loss of rights to earn PolkaDot Reward Points for a period of time,

	
  

	
(v)

	
Involuntary termination of the offender’s Membership,

	
  

	
(vi)

	
Imposition of any other measure expressly allowed within any provision of the Agreement or which the Company deems practicable to implement and appropriate to equitably resolve injuries caused partially or exclusively by the Member’s policy violation or contractual breach, and/or

	
  

	
(vii)

	
Institute legal proceedings for monetary damages and/or equitable relief in situations deemed appropriate by the Company.

The Company may withhold from a Member all or part of the Member’s earned and accrued PolkaDot Reward Points during the period that the Company is investigating any conduct allegedly in violation of the Agreement. If a Member’s Membership is canceled for disciplinary reasons, the Member will not be entitled to recover any PolkaDot Reward Points withheld during the investigation period.

           9.2           Arbitration.  Any controversy or claim arising out of or relating to the Agreement, or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. Members waive all rights to trial by jury or to any court. All arbitration proceedings shall beheld in Utah County or Salt Lake County, Utah (at the election of the Company), unless the laws of the state in which a Member resides expressly require venue to be in the state of the Member’s residence, in which case the arbitration shall be held in the capital of that state. All parties shall be entitled to all discovery rights pursuant to the Federal Rules of Civil Procedure. There shall be three arbitrators, at least one who is an attorney at law, who shall have expertise in business law transactions with a strong preference for an attorney knowledgeable in the direct selling industry, selected from the panel, which the American Arbitration Panel provides. Each party to the arbitration shall be responsible for its own costs and expenses of arbitration, including legal and filing fees. The decision of the arbitrator shall be final and binding on the parties and may, if necessary, be reduced to a judgment in any court of competent jurisdiction. This agreement to arbitrate shall survive any termination or expiration of the Agreement. Nothing in the Agreement shall prevent the Company from applying to and obtaining from any court having jurisdiction a writ of attachment, a temporary injunction, preliminary injunction, permanent injunction or other relief available to safeguard and protect the Company’s interest prior to, during or following the filing of any arbitration or other proceeding or pending the rendition of a decision or award in connection with any arbitration or other proceeding.

 

  

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           9.3           Governing Law, Jurisdiction and Venue.  Jurisdiction and venue of any matter not subject to arbitration shall reside in Utah County, state of Utah unless the laws of the state in which a Member resides expressly require venue to be laid in the state of the Member’s residence, in which case venue will be in the county of that state’s capital. The Federal Arbitration Act shall govern all matters relating to arbitration. The law of the state of Utah shall govern all other matters relating to or arising from the Agreement unless the laws of the state in which a Member resides expressly require the application of its laws.

           9.4           Louisiana Residents.  Notwithstanding the foregoing, Louisiana residents may bring an action against the Company with jurisdiction and venue as provided by Louisiana law.

           10.           Ordering, Shipping, and Payment.

           10.1           General Order Policies. The Company maintains a minimum order requirement of $35.00 before tax and applicable shipping charges.

           10.2           Shipping Policy.  The Company will normally initiate shipment of products via FedEx Ground within 24 hours or less from the date on which it receives an order, except when orders are received on Federal or Utah state holidays or on weekends.

           10.3           Inspection and Confirmation of Order.  A Member and/or recipient of an order must confirm that the product received matches the product listed on the shipping invoice and is free of damage. Failure to notify the Company of any shipping discrepancy or damage within seven calendar days of receipt of shipment will cancel a Member’s right to request a correction.

           10.4           Insufficient Funds.  All credit card payments that charged back or denied by a Member’s bank for insufficient funds will be re-submitted for payment. A $25.00 Insufficient Funds Fee will be charged to the account of the Member. Any outstanding balance owed to the Company by a Member for insufficient funds will be deducted or withheld from the Member’s Account. If the Company is unable to recover insufficient funds by credit card payment, the Member Care department will notify the Member of the deficiency.  The Member will have five business days to correct the deficiency and make restitution.  If the Member fails to make restitution within five business days the Member’s Membership will be automatically terminated.

           10.5           Restrictions on Third Party Use of Credit Cards and Checking Account Access.  A Member shall not permit other Members to use his or her credit card, or permit EasyPay debits to his or her checking accounts, to enroll or to make purchases from the Company.

           10.6           Sales Tax Collection. The Company is required to charge sales taxes on all purchases made by Members from within the state of Utah and remit the taxes charged to the state.

  

25FG Filed by Filing Services Canada Inc. - (403) 717-3898

 

The securities you are acquiring hereby from THE GREEN POLKADOT BOX LLC through this Subscription Agreement have not been registered under the Securities Act of 1933 or the securities laws of any state or other jurisdiction.  There are further restrictions on the transferability of these securities described herein.

The purchase of the securities involves a high degree of risk and should be considered only by persons who can bear the risk of loss of their entire investment.

Subscription Agreement

for Convertible Promissory Note of

THE GREEN POLKA DOT BOX LLC

This SUBSCRIPTION AGREEMENT made as of this ____ day of ______, 20__ between THE GREEN POLKADOT BOX LLC, a Utah limited liability company (the “Company”, “we,” or “us”) and the undersigned (the “Subscriber”).

WHEREAS, the Company and the Subscribers are executing and delivering this Agreement in reliance upon an exemption from registration afforded by the provisions of Section 4(2), Section 4(6) and/or Regulation D as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “Securities Act”); and

WHEREAS, the Company is offering in a private placement on a “best-efforts” basis to accredited investors up to $500,000 of Convertible Promissory Notes upon the terms and subject to the conditions contained herein.

1.           Subscription for Convertible Promissory Note.

1.1           Subject to the satisfaction or waiver of the terms and conditions of this Agreement, the Subscriber, whose address is as set forth in Section 11 below, hereby agrees to purchase and the Company hereby agrees to sell a Convertible Promissory Note, in substantially the form attached hereto as Exhibit A  (the “Promissory Note”) in the principal amount of $ (the “Principal Amount”).  The Promissory Note will bear interest at the rate of 12% per annum until the Promissory Note is paid in full (the “Interest”). The Promissory Note, including the Principal Amount and all accrued interest will be due and payable on June 30, 2012 (“Maturity”).

1.2           The Subscriber shall effect a wire transfer for the Principal Amount to the Company’s escrow account in accordance with the wire instructions attached hereto as Exhibit __.

 

1.3           The Principal Amount and accrued Interest on Promissory Note may be exchanged in accordance with the terms of the Promissory Note prior to Maturity into (i) Common Units of the Company, as defined in the Company’s Amended Operating Agreement, which is attached hereto as Exhibit “B” (the “Operating Agreement”), at the rate of $.72 per Common Unit, and (ii) a Common Unit Purchase Warrant (the “Warrant”) for each 1.5 Common Units acquired on the conversion of the Promissory Note.  The Promissory Note, the Common Units and the Warrant are hereinafter referred to as the “Securities.” The Warrants will be exercisable at $1.35 per Common Unit until December 31, 2016.  A copy of the form of the Warrant is attached hereto as Exhibit “C”.  For example, if you decide to convert $72,000 of Principal Amount and Interest, the Company would issue to you 100,000 Common Units and 66,667 Warrants or, if you decide to convert $100,000 of Principal Amount and Interest, the Company would issue to you 138,889 Common Units and 92,593 Warrants.

 

  

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1.4           The Subscriber hereby acknowledges and agrees that in accordance with the terms of the Promissory Note, the Company shall have the right to force the exchange of any outstanding and unpaid principal portion of the Promissory Note into the applicable amount of securities issued in a financing transaction undertaken by the Company in connection with a merger of the Company with and into a company whose securities are publicly traded in which transaction or merger the Members of the Company receive securities of the acquiring company. The Mandatory Exchange shall be effected automatically at the closing of such a transaction or merger without further approval of the holders of the Promissory Notes.

2.           Use of Proceeds. Your subscription funds for the Principal Amount will be utilized by the Company for general working capital purposes at the discretion of the Company.

3.           Representations Made by the Company.  The Company represents and warrants that (i) the Company is duly formed and validly existing under the laws of the State of Utah, with full power and authority to conduct its business as it is currently being conducted and to own its assets, (ii) the Company is authorized to issue the Promissory Note, (iii) the Promissory Note, when issued, will be a valid and binding obligation of the Company and its successors, and (iv) the Common Units and the Warrants issuable upon conversion of the Promissory Note, when issued, will entitle you to full rights as a Member of the Company in accordance with the terms of the Operating Agreement.

4.           Representations Made by the Subscriber.  The undersigned hereby represents and warrants to and covenants with the Company that:

4.1           The undersigned has all requisite authority (and in the case of an individual, the capacity) to purchase the Securities, enter into this Agreement and to perform all the obligations required to be performed by the undersigned hereunder, and such purchase will not contravene any law, rule or regulation binding on the undersigned or any investment guideline or restriction applicable to the undersigned.

4.2           The undersigned is a resident of the state set forth on the signature page hereto and is not acquiring the Securities as a nominee or agent or otherwise for any other person.

4.3           The undersigned will comply with all applicable laws and regulations in effect in any jurisdiction in which the undersigned purchases or sells Securities and obtain any consent, approval or permission required for such purchases or sales under the laws and regulations of any jurisdiction to which the undersigned is subject or in which the undersigned makes such purchases or sales, and the Company shall have no responsibility therefor.

 

  

2

  

4.4           The undersigned has such knowledge, skill and experience in business, financial and investment matters that the undersigned is capable of evaluating the merits and risks of an investment in the Securities. With the assistance of the undersigned's own professional advisors, to the extent that the undersigned has deemed appropriate, the undersigned has made its own legal, tax, accounting and financial evaluation of the merits and risks of an investment in the Securities and the consequences of this Subscription Agreement. The undersigned has considered the suitability of the Securities as an investment in light of its own circumstances and financial condition and the undersigned is able to bear the risks associated with an investment in the Securities and its authority to invest in the Securities.

4.5           The undersigned is an "accredited investor" as defined in Rule 501(a) under the Securities Act. The undersigned agrees to furnish any additional information requested by the Company or any of its affiliates to assure compliance with applicable U.S. federal and state securities laws in connection with the purchase and sale of the Securities. The undersigned acknowledges that the undersigned has completed the Accredited Investor Questionnaire contained in Exhibit D and that the information contained therein is complete and accurate as of the date thereof and is hereby affirmed as of the date hereof.

4.6           The undersigned understands and accepts that the purchase of the Securities involves various risks, including but not limited to the risks outlined in Exhibit E hereto. The undersigned represents that it is able to bear any loss associated with an investment in the Securities

4.7           The undersigned confirms that it is not relying on any communication (written or oral) of the Company or any of its affiliates, as investment advice or as a recommendation to purchase the Securities. It is understood that information and explanations related to the terms and conditions of the Securities provided herein or otherwise by the Company or any of its affiliates shall not be considered investment advice or a recommendation to purchase the Securities, and that neither the Company nor any of its affiliates is acting or has acted as an advisor to the undersigned in deciding to invest in the Securities. The undersigned acknowledges that neither the Company nor any of its affiliates has made any representation regarding the proper characterization of the Securities for purposes of determining the undersigned's authority to invest in the Securities.

4.8           The undersigned is familiar with the business and financial condition and operations of the Company. The undersigned has had access to such information concerning the Company and the Securities as it deems necessary to enable it to make an informed investment decision concerning the purchase of the Securities.

4.9           The undersigned understands that no federal or state agency has passed upon the merits or risks of an investment in the Securities or made any finding or determination concerning the fairness or advisability of this investment.

4.10           The undersigned confirms that the Company has not (A) given any guarantee or representation as to the potential success, return, effect or benefit (either legal, regulatory, tax, financial, accounting or otherwise) an of investment in the Securities or (B) made any representation to the undersigned regarding the legality of an investment in the Securities under applicable legal investment or similar laws or regulations. In deciding to purchase the Securities, the undersigned is not relying on the advice or recommendations of the Company and the undersigned has made its own independent decision that the investment in the Securities is suitable and appropriate for the undersigned.

 

  

3

  

4.11           The undersigned is acquiring the Securities solely for the undersigned’s own beneficial account, for investment purposes, and not with a view to, or for resale in connection with, any distribution of the Securities. The undersigned understands that the Securities have not been registered under the Securities Act or any State securities laws by reason of specific exemptions under the provisions thereof which depend in part upon the investment intent of the undersigned and of the other representations made by the undersigned in this Subscription Agreement. The undersigned understands that the Company is relying upon the representations and agreements contained in this Subscription Agreement (and any supplemental information) for the purpose of determining whether this transaction meets the requirements for such exemptions.

4.12           The undersigned understands that the Securities are "restricted securities" under applicable federal securities laws and that the Securities Act and the rules of the U.S. Securities and Exchange Commission (the "Commission") provide in substance that the undersigned may dispose of the Securities only pursuant to an effective registration statement under the Securities Act or an exemption therefrom, and the undersigned understands that the Company has no obligation or intention to register any of the Securities, or to take action so as to permit sales pursuant to the Securities Act (including Rule 144 thereunder). Accordingly, the undersigned understands that under the Commission's rules, the undersigned may dispose of the Securities principally only in "private placements" which are exempt from registration under the Securities Act, in which event the transferee will acquire "restricted securities" subject to the same limitations as in the hands of the undersigned. Consequently, the undersigned understands that the undersigned must bear the economic risks of the investment in the Securities for an indefinite period of time.

4.13           The undersigned agrees: (A) that the undersigned will not sell, assign, pledge, give, transfer or otherwise dispose of the Securities or any interest therein, or make any offer or attempt to do any of the foregoing, except pursuant to a registration of the Securities under the Securities Act and all applicable State Securities Laws, or in a transaction which is exempt from the registration provisions of the Securities Act and all applicable State Securities Laws; (B) that the certificates representing the Securities will bear a legend in substantially the form contained below making reference to the foregoing restrictions; and (C) that the Company and it affiliates shall not be required to give effect to any purported transfer of such Securities except upon compliance with the foregoing restrictions.

 

“NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE STATE SECURITIES LAWS AND THE SECURITIES LAWS OF OTHER JURISDICTIONS, AND IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION, UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT AND SUCH OTHER APPLICABLE LAWS."

 

  

4

  

 

4.14           The undersigned acknowledges that neither the Company nor any other person offered to sell the Securities to it by means of any form of general solicitation or advertising, including but not limited to: (A) any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio or (B) any seminar or meeting whose attendees were invited by any general solicitation or general advertising.

4.15           The undersigned acknowledges that no representations or warranties have been made to the undersigned by the Company or any other persons acting on the Company’s behalf, or any affiliate of any of them, other than those representations set forth in this Subscription Agreement.

4.16           The undersigned acknowledges that the undersigned has been urged to consult with an attorney or other financial advisor with respect to the terms of this Subscription Agreement.

4.17           The undersigned acknowledges and understands that the Company is relying upon the undersigned’s  representations made in this Subscription Agreement in agreeing to issue the Securities to the undersigned.

4.18           The undersigned understands that, unless the undersigned notifies the Company in writing to the contrary at or before the Closing, each of the undersigned's representations and warranties contained in this Subscription Agreement will be deemed to have been reaffirmed and confirmed as of the Closing, taking into account all information received by the undersigned.

4.19            The undersigned acknowledges that the undersigned (i) has been advised by the Company that an investment in the Securities is highly speculative; (ii) may lose its entire investment; (iii) has the financial ability to lose its entire investment; (iv) has no need for liquidity in this investment; and (v) has considered the Risk Factors set forth in Exhibit “E” before determining that an investment in the Securities is an appropriate investment for the undersigned.

5.           Acceptance.  Upon the Company’s acceptance of this Subscription Agreement, the Company will issue to the Subscriber the Promissory Note in the Principal Amount set forth in Section 1 above.

6.           Counterparts.  This Subscription Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which together shall be deemed to be one and the same agreement.

7.           Assignability.  This Subscription Agreement is not transferable or assignable by you to anyone else except as provided within the Subscription Agreement.

8.           Choice of Law and Forum.  This Subscription Agreement shall be governed by the laws of the State of Utah and any claims, litigation, or arbitration asserted or commenced between us regarding any aspect of this Subscription Agreement or related in any way to Securities shall be brought within the State of Utah in Utah County, which jurisdiction shall have exclusive jurisdiction of such matters.  The prevailing party in any dispute shall be entitled to recover costs and reasonable attorneys’ fees as determined by the trier of fact.

 

  

5

  

9.           Entire Agreement.  This Subscription Agreement constitutes the entire understanding and agreement between us with respect to your investment in the Securities and no other agreements, understandings, restrictions, representations, or warranties between us other than those stated in this Subscription Agreement and the Operating Agreement shall govern your investment in the Securities.

10.           Agreement. By signing this document you are entering into a Subscription Agreement, agreeing to invest money in the Company, and you explicitly authorize us to accept your subscription funds as set forth in Section 1 above for our immediate use for the general working capital of the Company.

        11.  Purchaser Information.

 

	Full Name 	 
	 	 
	Street Address: 	 
	 	 
	Telephone Number: 	 
	 	 
	Fax Number: 	 
	 	 
	E-Mail Address: 	 
	 	 
	Social Security or Tax ID Number: 	 

 

(The remainder of this page is intentionally blank; the signature page follows.)

 

  

6

  

NOW THEREFORE, the parties hereto agree to all of the foregoing and the undersigned Subscriber agrees to make the loan evidenced by the Promissory Note as stated in this Subscription Agreement as of December ___, 2011.

 

	THE GREEN POLKADOT BOX LLC   	 	SUBSCRIBER	 
	 	 	 	 	 
	By: 	 	 	 	 
	 	Rod Smith, Manager 	 	Printed Name of Subscriber	 
	 	
 

	
 

	 	 
	 	 	 	Signature of Subscriber	 
	 	 	 	 	 
	 	 	 	Name and Title (if applicable)	 

 

  

7

  

 

EXHIBIT “A”

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE STATE SECURITIES LAWS AND THE SECURITIES LAWS OF OTHER JURISDICTIONS, AND IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION, UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT AND SUCH OTHER APPLICABLE LAWS.

THE GREEN POLKADOT BOX LLC

FORM OF CONVERTIBLE PROMISSORY NOTE

Issue Date:________________

$___,000                                                                                                                                                      American Fork, Utah

FOR VALUE RECEIVED, THE GREEN POLKADOT BOX LLC, a Utah limited liability company (hereinafter called “Borrower”), hereby promises to pay to the order of _________________, at _________________  (the “Holder”), without demand, the sum of _____________________ Dollars ($_____________) (“Principal Amount”), with interest accruing thereon, on June 30, 2012 (the “Maturity Date”), if not sooner paid or exchanged in accordance with the terms hereof.

This Note has been entered into pursuant to the terms of a subscription agreement between the Borrower, the Holder and the other signatories thereto (“Other Holders”) dated at or about the date hereof (the “Subscription Agreement”), who have been issued Promissory Notes pursuant to the Subscription Agreement and shall be governed by the terms of such Subscription Agreement.  Unless otherwise separately defined herein, all capitalized terms used in this Promissory Note shall have the same meaning as is set forth in the Subscription Agreement.  The following terms shall apply to this Note:

ARTICLE I

GENERAL PROVISIONS

1.1           Interest Rate.   Interest payable on this Note shall accrue at the annual rate of twelve (12%) percent  and be payable on the Maturity Date, accelerated or otherwise, when the principal and remaining accrued but unpaid interest shall be due and payable, or sooner as described below.

1.2           Exchange Privileges.  The Exchange Rights set forth in Article II shall remain in full force and effect immediately from the date hereof and until the Note is paid in full.  This Note shall be payable in full on the Maturity Date, unless previously exchanged into other securities of the Company in accordance with Article II hereof.

 

  

Exhibit A 1

  

ARTICLE II

EXCHANGE RIGHTS

2.1.           Exchange of Note.

(a)           Optional Exchange. The Holder shall have the right from and after the date of the issuance of this Promissory Note and then at any time until this Promissory Note is fully paid, to exchange any outstanding and unpaid principal portion of this Note, and accrued interest, at the election of the Holder into (i) Common Units of the Company, as defined in the Company’s Amended Operating Agreement, at the rate of $.72 per Common Unit, and (ii) a Common Unit Purchase Warrant in the form attached hereto as Exhibit C (the “Warrants”) for each 1.5 Common Units acquired through conversion of this Promissory Note (the “Conversion”).  The Warrants will be exercisable at $1.35 per Common Unit until December 31, 2016. For example, if you decide to convert $72,000 of Principal Amount and Interest, the Company would issue to you 100,000 Common Units and 66,667 Warrants or, if you decide to convert $100,000 of Principal Amount and Interest, the Company would issue to you 138,889 Common Units and 92,593 Warrants.

                      (b)           Mandatory Exchange. The Company shall have the right to force the exchange of any outstanding and unpaid principal portion of this Note into the applicable amount of securities issued in a financing transaction undertaken by the Company in connection with a merger of the Company with and into a company whose securities are publicly traded (“Pubco”) in which transaction or merger the Members of the Company receive securities of the acquiring company. Upon a Mandatory Exchange, any outstanding and unpaid principal portion of this Note, and accrued interest into (i) shares of common stock of Pubco at the rate of $.72 per share, and (ii) a common stock purchase warrant (the “Pubco Warrant”) for each 1.5 shares of Pubco common stock acquired through conversion of this Promissory Note (the “Conversion”).  The Pubco Warrants will be exercisable at $1.35 per share until December 31, 2016. The Mandatory Exchange shall be effected automatically at the closing of such a transaction or merger without further approval of the Holder.

ARTICLE III

MISCALLANEOUS

3.1           The Holder shall be entitled to collect a reasonable attorneys’ fee from the Company, as well as other costs, charges, and expenses reasonably incurred, in curing any default or attempting collection of the payment due on this Promissory Note, whether or not litigation or any proceeding to enforce this Agreement is commenced.

3.2           Governing Law. Any litigation brought to enforce any of the terms of this Promissory Note shall be brought in the state courts of Utah located in either Salt Lake County or Utah County.  This Promissory Note shall be governed by and construed solely in accordance with the laws of the State of Utah.

(The remainder of this page is intentionally blank; the signature page follows.)

  

Exhibit A 2

  

IN WITNESS WHEREOF, the Company has executed this Promissory Note as of the day first hereinabove written.

THE GREEN POLKADOT BOX LLC

	
  

	
By:

	 	 

	
  

	
Rod A. Smith, Manager

AGREED AND ACCEPTED BY THE HOLDER:

 

	Name of Holder:	 
	 	 
	Signature:	 
	 	 
	By (if entity):	 
	 	 
	Name (if entity):	 
	 	 
	Title (if entity):	 
	 	 
	Dated:	 

  

Exhibit A 3

  

EXHIBIT “B”

THE GREEN POLKADOT BOX LLC

AMENDED AND RESTATED OPERATING AGREEMENT

This Amended and Restated Operating Agreement (this “Agreement”) is made and entered into and effective as of December 15, 2011 (the “Effective Date”).

R E C I T A L S:

A.           Rod Smith, the initial Manager formed a limited liability company named THE GREEN POLKA DOT BOX LLC (the “LLC” or “GPDB”) by filing the Articles of Organization with the State of Utah on January 18, 2007.

B.           The initial registered agent of the LLC is Rod Alan Smith.

C.           The principal office of the LLC and the registered agent’s office is 10225 North Oak Creek Lane, Highland, Utah 84003.

D.           The initial Members of the LLC are Rod Smith and David & Barbara Allen who were issued 10,000,000 and 1,000,000 common units, respectively.    As of the date of this Agreement, a total of 24,561,982 Common Units have been issued to the Members listed on the signature page of this Agreement and a total of 14,150,031 Common Units have been reserved for issuance upon exercise of options and warrants to purchase Common Units and conversion of Convertible Promissory Notes as set forth in Section 4.8 below.

 

 

E.           The Members desire that this Agreement, as set forth herein, shall evidence their agreement with respect to the operations of the LLC from the date of this Agreement.

SECTION 1: DEFINITIONS

1.1           “Agreement” means this Amended and Restated Operating Agreement.

1.2           “Articles of Organization” means the Articles of Organization forming this LLC.

1.3           “Code” means the Internal Revenue Code of 1986, as amended.

1.4           “Capital Account” means the amount of a Member’s Capital Contribution as adjusted for additional Capital Contributions, Net Profit, Net Loss, and/or Distributions.

1.5           “Capital Contribution” means any contribution of value, including but not limited to cash, property, assets, etc., by a Member to the capital of the LLC.

1.6           “Common Unit” means an ownership interest in the LLC, which includes the Financial Interest, the right to vote, the right to participate in management, the right to obtain information concerning the LLC, and any other rights granted to a Member under the Articles of Organization or this Agreement. The LLC shall be authorized initially to issue up to a total of 100,000,000 Common Units and 50,000,000 Preferred Units.

 

  

Exhibit B 1

  

1.7           “Distribution” means any money or LLC Property (other than money) distributed to any Member arising from such Member’s LLC Interest, other than a payment to any Member for services, royalties, or as payment of interest or principal on a loan from such Member.

1.8           “Extraordinary Cash Flow” means the cash proceeds (including, without limitation, insurance or condemnation proceeds, recoveries, damages and awards) realized by the LLC as a result of an Extraordinary Event, plus cash interest payments received with respect to such proceeds, decreased by the sum of (i) the amount of such proceeds applied by the LLC to pay debts and liabilities encumbering any property of the LLC; (ii) the amount of such proceeds used, set aside or committed by the LLC, in the reasonable discretion of the Manager, for restoration and repair of any property of the LLC in the event of damage or destruction to such property; (iii) any incidental or ancillary expenses, costs or liabilities incurred by the LLC in effecting or obtaining any such Extraordinary Event, or the proceeds thereof (including, without limitation, attorneys, fees, expert witnesses, fees, accountants, fees, court costs, recording fees, transfer taxes and fees, appraisal costs, brokerage fees, and the like); (iv) the payment of such other LLC debts and liabilities, including, without limitation, any loans made to the LLC by a Member as the Manager determine; and (v) any reasonable reserve determined by the Manager in his discretion for anticipated cash disbursements that will have to be made before additional cash receipts from third parties will provide the funds therefore.

1.9           “Extraordinary Event” means the sale, hypothecation, encumbrance, disposition, exchange or other transfer, financing and/or refinancing of all or any portion of the LLC Property (other than incidental sales or exchanges of tangible personal property and fixtures), including, without limitation, condemnation or acquisition by an entity with the power of eminent domain in lieu of formal condemnation proceedings, or any damage or destruction with respect thereto.

1.10           “Financial Interest” means a Member’s right to share in the profits, losses, incomes, expenses, or other monetary items and to receive distributions and allocations from the LLC.

1.11           “Gross Asset Value” means, with respect to any asset, the asset’s adjusted basis for federal income tax purposes, except as follows:

	
  

	
(a)

	
The initial Gross Asset Value of any asset contributed by a Member to the LLC shall be the gross fair market value of such asset as of the date of contribution, as determined by the contributing Member and the Manager; provided that if the contributing Member is the Manager, the determination of the gross fair market value of the contributed asset shall require the affirmative vote or written consent of a majority in interest of the other Members.

	
  

	
(b)

	
The Gross Asset Value of all LLC assets shall be adjusted to equal their respective gross fair market values, as determined by the Manager, as of the following times:  (i) the acquisition of an additional LLC Interest by any new or existing Member in exchange for more than a de minimis Capital Contribution; (ii) the Distribution by the Company to a Member of more than de minimis amount of LLC assets as consideration for an LLC Interest; and (iii) the liquidation of the Company within the meaning of Section1.704-1(b)(2)(ii)(g) of the Treasury Regulations; provided, however, that adjustments pursuant to clauses (i) and (ii) above shall be made only if the Manager reasonably determine that such adjustments are necessary or appropriate to reflect the relative economic interests of the Members of the LLC.

 

  

Exhibit B 2

  

	
  

	
(c)

	
The Gross Asset Value of any LLC asset distributed to any Member shall be adjusted to equal the gross fair market value of such asset on the date of Distribution as determined by the distributee and the Manager; provided that if the distributee is a Manager, the determination of asset shall require the affirmative vote or written consent of a majority in interest of the other Manager.

	
  

	
(d)

	
The Gross Asset Values of LLC assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Section 734(b) or Section 743(b) of the Code, but only to the extent that such adjustments re taken into account in determining Capital Accounts pursuant to Section 1.704-1(b)(2)(iv)(m) of the Treasury Regulations and any applicable sections hereof; provided, however, that Gross Asset Values shall not be adjusted pursuant to this subparagraph (d) to the extent the Manager determine that an adjustment pursuant to subparagraph (b) above is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this subparagraph (d).

If the Gross Asset Value of an asset has been determined or adjusted pursuant to subparagraphs (a), (b), or (d) above, such Gross Asset Value shall thereafter be adjusted by the depreciation taken into account with respect to such asset for purposes of computing Net Profit and Net Loss.

1.12           “LLC” means THE GREEN POLKA DOT BOX LLC.

1.13           “LLC Interest” means an ownership interest in the LLC designated as a Common or Preferred Unit, which includes the Financial Interest, the right to vote, the right to participate in management, and the right to obtain information concerning the LLC and any other rights granted to a Member under the Articles of Organization or this Agreement.  The LLC Interest shall be denominated in Units as set forth below.  The percentage LLC Interest shall equal the percentage that the number of Units issued to a Member bears to the total number of Units outstanding.

1.14            “Manager” means the person elected, appointed, or otherwise designated in accordance with this Agreement to manage and operate the LLC once appointed in accordance with Section 6 below.

1.15           “Member” means any person or entity that owns an LLC Interest.

1.16           “Products” shall mean all Products, GPDB buying club memberships and leads for sale that are distributed by the LLC.

 

  

Exhibit B 3

  

1.17           “Net Profit and Net Loss” mean, for each fiscal year or other period, an amount equal to the LLC’s taxable income or loss for such year or period, net of all reasonable LLC expenses and determined in accordance with Section 703(a) of the Code (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Section 703(a)(1) of the Code shall be included in taxable income or loss), with the following adjustments:

	
  

	
(a)

	
Any income of the LLC that is exempt from federal income tax and not otherwise taken into account in computing Net Profit or Net Loss pursuant to this Section shall be added to such taxable income or loss;

	
  

	
(b)

	
Any expenditures of the LLC described in Section 705(a)(2)(B) of the Code or treated as Code Section 705(a)(2)(B) expenditures pursuant to Section 1.704-1(b)(2)(iv)(i) of the Treasury Regulations, and not otherwise taken into account in computing Net Profit or Net Loss pursuant to this Section, shall be subtracted from such taxable income or loss;

	
  

	
(c)

	
In the event the Gross Asset Value of any LLC asset is adjusted pursuant Section 1.11(b) or Section 1.11(c) above, the amount of such adjustment shall be taken into account as gain or loss from the disposition of such asset for purposes of computing Net Profit or Net Loss;

	
  

	
(d)

	
Gain or loss resulting from any disposition of LLC Property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of the property disposed of, notwithstanding that the adjusted tax basis of such property differs from its Gross Asset Value;

	
  

	
(e)

	
In lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such fiscal year or other period, computed in accordance with the terms herein;

	
  

	
(f)

	
To the extent an adjustment to the adjusted tax basis of any LLC asset pursuant to Section 734(b) or Section 743(b) of the Code is required pursuant to Section 1.704-1(b)(2)(iv)(m)(4) of the Treasury Regulations to be taken into account in determining Capital Accounts as a result of a Distribution other than in complete liquidation of a Member’s Interest, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases the basis of the asset) from the disposition of the asset and shall be taken into account of purposes of computing Net Profit or Net Loss; and

	
  

	
(g)

	
Notwithstanding any other provision of this Section, any items that are specially allocated as provided herein shall not be taken into account in computing Net Profit or Net Loss.

1.18           “Property” means any and all assets, in whole or in part, of the LLC, both tangible and intangible.

 

  

Exhibit B 4

  

1.19            “Statute” means the State of Utah’s limited liability company laws.

1.20           “Unit” shall mean a measurement of LLC Interest owned by a Member and designated as a Common Unit.

SECTION 2:  FORMATION

2.1           Formation of the LLC.  Rod Smith, the initial Manager of the LLC has formed the LLC pursuant to the laws of Utah, within which this LLC will primarily operate.

2.2           Name.  The name of the LLC is as set forth in the caption to this Agreement.  The Members shall operate the business of the LLC under such name or use such other name as the Manager deems necessary, provided that such name does not violate the Statute.

2.3           Principal Office.  The LLC’s principal place of business will be as listed in the Recitals paragraphs or situated at any other location mutually agreed upon by the Manager.  If the principal office is located outside the state of organization, and the LLC has one or more business offices in the state of organization, the Manager shall fix and designate a principal business office in the state of organization.  Branch or subordinate offices may be established at any time and at any place as the Manager may determine.

2.4           Term.           The LLC shall exist for a period of 99 years from the date of the filing of its Articles of Organization, unless sooner terminated or dissolved in accordance with its Articles of Organization or this Agreement.

2.5           Business Purpose.  The purpose of the LLC is to engage in any lawful activities for which a LLC may be organized under the Statute.

2.6           Registered Agent.  The LLC’s registered agent will be the individual specified in the Recitals or any other person or entity with an office in the state of organization as determined by the Manager.

2.7           Registered Office.  The LLC’s registered office will be as listed in the Recitals paragraphs or at any other address as determined by the Manager.

SECTION 3:  MEMBERSHIP

3.1           Current Members.  The current Members of the LLC are those persons who hold a total of 24,599,531 Common Units, whose names and addresses are maintained in the books and records of the Company.

3.2           Additional Members. Additional persons or entities may be admitted into the LLC from time to time as Members if a majority of LLC Members consent to terms and conditions of the admission of the additional Members and in accordance with the Articles of Organization and this Agreement, including persons who have been granted options or warrants to purchase Common Units as set forth in Section 4.8 below.  All new Members must sign a copy of this Agreement and must agree to be bound by the terms contained therein.

 

  

Exhibit B 5

  

 

3.3           Liability to Third Parties.  No Member shall be liable for the debts, obligations or liabilities of the LLC to a third party unless the Member agrees in writing to be liable.

3.4           Authority.  No Member has the authority or power to act for or on behalf of, to bind, or to incur any liability on behalf of the LLC except as provided in this Agreement and any other written agreements entered into with the LLC.

3.5           Withdrawal.  No Member has the right to withdraw from the LLC as a Member except as provided in this Agreement.   The withdrawal of a Member from the LLC shall be deemed a breach of this Agreement.  If a Member withdrawals in breach of this Agreement, the Member shall be liable to the LLC and the other Members for all monetary damages as a result of the breach, including but not limited to direct, indirect, incidental, and consequential damages.  The LLC and the other Members shall not have the right to prevent the withdrawing Member from withdrawing through the use of an injunction or otherwise.

3.6           Compensation.  The LLC may provide compensation to Members, including its manager and employees who are Members, in the form of salaries, loans, units of ownership, warrants to purchase units of ownership, commissions, royalties, and/or other benefits in exchange for services rendered in behalf of the LLC or other forms of assistance that are not considered as capital contributions, including financial assistance in the form of loans, letters of credit and personal guarantees.  The LLC may also determine to compensate future Members for services rendered to the LLC.  The LLC shall reimburse Members for any expense paid by them that is properly an expense of the LLC.

3.7           Classes of Ownership.  The LLC is authorized to issue two classes of equity ownership to be designated as Common and Preferred Units.  The total number of Common Units that the LLC is authorized to issue is 100,000,000; Preferred is 50,000,000.

3.8           Right of First Refusal. The holders of the Common Units shall have the right, in the event the LLC proposes to offer additional Equity Securities for sale to any other person (other than to employees, advisors and Manager), to purchase up to 50% of such Additional Equity Securities, on a pro rata basis among the holders of Common Units.

3.10           Voting Rights.  Each Common and Preferred Unit issued and outstanding shall have one vote.

3.11           Meetings of Members.

3.11.1           Place of Meeting.  Meetings of Members shall be held at any place within the United States designated by the Members and stated in the notice of the meeting.  If no place is so specified, Members’ meetings shall be held at the LLC’s principal office.

3.11.2           Annual Meeting.  An annual meeting of Members shall be held on each year within 90 days after the end of the previous fiscal year. At the annual meeting, any proper business may be transacted.

 

  

Exhibit B 6

  

3.11.3           Special Meetings.  A special meeting of the Members may be called at any time by one or more Members holding Interests that, in the aggregate, constitute not less than 10% of the LLC Interests.  A request for a special meeting of the Members shall be in writing, specifying the tie and place of the meeting and the general nature of the business proposed to be transacted.  The notice shall be delivered in accordance with Sections 3.4 and 3.5 below.

3.11.4           Notice of Members’ Meetings.  All notices of meetings of Members shall be sent or otherwise given in accordance with Section 3.11.5 below and not less than 10 nor more than 60 days before the date of the meeting being noticed.  The notice shall specify the place, date, and hour of the meeting and (i) in the case of a special meeting, the general nature of the business to be transacted, or (ii) in the case of the annual meeting, those matters which are intended to be presented for action by the Members.

3.11.5           Manner of Giving Notice; Affidavit of Notice.  Notice of any meeting of Members shall be given either personally, by first class mail, facsimile, telegraphic, or other written communication, charges prepaid, addressed to each Member at the address of each Member appearing on the books of the LLC or more recently given by the Member to the LLC for the purpose of notice.

3.11.6           Conduct of Meetings.  All meetings of the Members shall be presided over by the Manager.  The Manager shall determine the order of business and the procedures to be followed at the meeting.

3.11.7           Quorum.  The presence, in person or by proxy, of Members holding 60% of the LLC Interests (including the Common Units and Preferred Units) shall constitute a quorum at all meetings of the Members for the transaction of business.

3.11.8           Approval. The vote of a majority of the LLC Interests, inclusive of the Common and Preferred Units, shall be required to approve any action, unless a greater or lesser vote is required pursuant to this Agreement or by Statute.  Unless required by law or by this Agreement, no approvals shall require separate approval by any class of LLC Interests.

3.11.9           Waiver of Notice or Consent by Absent Members.  The transactions of any meeting of Members, either annual or special, however called and noticed, and whenever held, shall be as valid as if it had occurred at a meeting duly held after regular call and notice, if a quorum be present either in person or by proxy, and if, either before or after the meeting, each person entitled to vote but not present in person or by proxy, signs a written waiver of notice, a consent to the holding of the meeting, or any approval of the minutes thereof.

3.11.10 Member Action by Written Consent without a Meeting.  Any action which may be taken at any annual or special meeting of Members may be taken without a meeting and without prior notice, if consent in writing, setting forth the action so taken, are signed by Members holding LLC Interests representing the aggregate number of votes equal to or greater than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all LLC Interests entitled to vote thereon were present and voted.  All such consents shall be filed with the LLC’s books and records.

 

  

Exhibit B 7

  

3.11.11 Proxies.  Every Member entitled to vote shall have the right to do so either in person or by one or more agents authorized by a written proxy signed by the Member and filed with the Board of Manager.  A proxy shall be revocable unless the proxy specifically states that it is irrevocable.

SECTION 4:  CAPITAL CONTRIBUTIONS AND CAPITAL ACCOUNTS

4.1           Initial Contributions.  The Members holding Common Units have each made initial cash contributions or provided services to the LLC for their LLC Interests as set forth in the books and records of the Company.

4.2           Additional Contributions.  No Members shall be required to make any additional Capital Contributions.

4.3           Capital Accounts.  A Capital Account (hereinafter referred to as “Capital Account”) shall be established and maintained for each Member.  Each Member’s Capital Account will be accounted for separately and will be maintained in accordance with generally accepted accounting principles.  However, a Member who has more than one LLC Interest shall have only one Capital Account that reflects all of that Member’s LLC Interests.  If a Member validly transfers his or her LLC Interest, the Capital account of the transferring Member shall carry over to the transferee Member in accordance with the Code.

4.4           Adjustments to Capital Accounts.  Each Member’s Capital Account shall be adjusted as follows:

(a)           Increases.  Each Member’s Capital Account shall be increased by:

	
  

	
(i)

	
Capital contributions of cash, services, and/or property at its agreed upon fair market value;

(ii)           All items of LLC income and gain (including income and gain exempt from tax).

(b)           Decreases.  Each Member’s Capital Account shall be decreased by:

(i)           Distributions of cash and/or property at its agreed upon fair market value;

	
  

	
(ii)

	
All items of LLC deduction and loss (including deductions and loss exempt from tax).

4.5           Advances by Members.  Members may, at any time, advance funds to the LLC if requested by the LLC.  An advance is a loan from the Member to the LLC and shall bear interest at the prevailing interest rate.  An advance is not a Capital Contribution.

4.6           No Preemptive Rights.  Except as set forth in Section 3.9.6, no Member of the LLC shall be entitled to any preemptive or preferential rights, as such rights are defined by law, to subscribe for or purchase his or her proportional part of any additional or future LLC Interest which may be issued by the LLC.

 

  

Exhibit B 8

  

4.7           Return of Capital.  No Member shall have the right to withdraw or obtain a return of his or her Capital Contribution except as provided in this Agreement.  The return of a Member’s Capital Contribution may not be withdrawn in the form of property other than cash except as provided in this Agreement.

4.8           Options and Warrants to Acquire Common Units.

4.8.1           The Manager shall have the right to grant options and issue warrants to purchase Common Units to employees and key consultants of the Company.  The Manager shall also have the right to issue promissory notes that are convertible into Common Units and warrants to purchase Common Units.

4.8.2           As of the date of this Agreement, (i) the Manager has approved the grant to key employees of options to purchase a total of 11,096,521 Common Units at an exercise price of $.25 per Common Unit, which options are either vested or vest over a four-year period, (ii) the Manager has issued to key consultants warrants to purchase 1,896,100 Common Units at exercise prices ranging from $.01 to $1.00, which warrant are either vested or vest over a three-year period, and (iii) the Company has reserved 694,445 Common Units for issuance upon conversion of up to $500,000 in convertible promissory notes at the rate of $.80 per Common Unit, and the Company has reserved 462,965 Common Units issuable upon exercise of warrants at an exercise price of $1.35 per Common Unit, which warrants are issuable upon conversion of such convertible promissory notes.

4.8.3           In approving the terms of this Agreement, a majority of LLC Interests have also approved and ratified the options, warrants, and convertible promissory notes described in this Section 4.8.

SECTION 5:  ALLOCATION OF NET PROFITS, NET LOSSES, AND DISTRIBUTIONS

5.1           Net Loss. After giving effect to the special allocations set forth in Section 5.3 and 5.4 below, Net Loss for any fiscal year shall be allocated among the Members as follows:

	
  

	
(a)

	
Net Loss from Operations.  Net Loss resulting from the operations of the LLC (as distinguished from Net loss resulting from an Extraordinary Event) shall be allocated to the Members’ capital accounts after the end of each fiscal year in accordance with their respective LLC Interests.

	
  

	
(b)

	
Net Loss from an Extraordinary Event.  Net Loss resulting from an Extraordinary Event (as distinguished from Net Loss from operations) shall be allocated to Members’ capital accounts at the end of each fiscal year in accordance with the following:

	
  

	
(i)

	
First, such Net Loss for such fiscal year shall be allocated to the Members in proportion to the balances in their respective Capital Accounts until, and to the extent, required to reduce each Member’s Capital account to zero;

 

  

Exhibit B 9

  

	
  

	
(ii)

	
Thereafter, such Net Loss shall be allocated to the Members in accordance with their respective LLC Interests.

5.2           Net Profit.  After giving effect to the special allocation set forth in Sections 5.3 and 5.4 below, Net Profit for any fiscal year shall be allocated among the Members as follows:

	
  

	
(a)

	
Net Profit from Operations.  Net Profit resulting from the operations of the LLC (as distinguished from Net Profit resulting from an Extraordinary Event) shall be allocated to and apportioned among the Members at the end of each month in proportion to their respective LLC Interests.

	
  

	
(b)

	
Net Profits from an Extraordinary Event.  Net Profit of the LLC from an Extraordinary Event shall be allocated to and apportioned among the Members at the end of each month in proportion to their respective LLC Interests.

5.3           Special Allocations.  The following special allocations shall be made in the following order:

	
  

	
(a)

	
LLC Minimum Gain Chargeback.  Except as otherwise provided in Section 1.704-2(f) of the Treasury Regulations, notwithstanding any other provision of this Article 5, if there is a net decrease in LLC Minimum Gain during any fiscal year, each Member shall be specially allocated items of income and gain for such year (and, if necessary, subsequent years) in an amount equal to such Member’s share of the net decrease in LLC Minimum Gain determined in accordance with Section 1.704-2(j)(2) of the Treasury Regulations.  This paragraph (a) is intended to comply with the minimum gain chargeback requirement in Section 1.704-2(f) of the Treasury Regulations and shall be interpreted consistently therewith.

As used herein,  “LLC Minimum Gain” shall have the meaning set forth in Sections 1.704-2(b)(2) and 1.704-2(i)(4) of the Treasury Regulations

	
  

	
(b)

	
Member Nonrecourse Debt Minimum Gain Chargeback.  Except as otherwise provided in Section 1.704-2(i)(4) of the Treasury Regulations, notwithstanding any other provision of this Article 5, if there is a net decrease in Member Nonrecourse Debt Minimum Gain attributable to a Member Nonrecourse Debt during any fiscal year, each Member who has a share of the Member Nonrecourse Debt Minimum Gain attributable to such Member Nonrecourse Debt, determined in accordance with Section 1.704-2(i)(5) of the Treasury Regulations, shall be specially allocated items of income and gain for such year (and, if necessary, subsequent years) in an amount equal to such Member’s share of the net decrease in Member Nonrecourse Debt Minimum Gain attributable to such Member Nonrecourse Debt, determined in accordance with Section 1.704-2(i)(4) of the Treasury Regulations.  Allocations pursuant to the preceding sentence shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto.  The items to be so allocated shall be determined in accordance with Sections 1.704-2(i)(4) and 1.704-2(j)(2) of the Treasury Regulations.  This paragraph (b) is intended to comply with the minimum gain chargeback requirement in Section 1.704-2(i)(4) of the Treasury Regulations and shall be interpreted consistently therewith.

 

  

Exhibit B 10

  

As used herein, “Member Nonrecourse Debt Minimum Gain” means an amount, with respect to each Member Nonrecourse Debt, equal to the LLC Minimum Gain that would result if such Member Nonrecourse Debt were a Nonrecourse Liability, determined in accordance with Section 1.704-2(i)(3) of the Treasury Regulations.

	
  

	
As used herein, “Member Nonrecourse Debt” shall have the meaning set forth in Section 1.704-2(b)(4) of the Treasury Regulations.

	
  

	
As used herein, “Nonrecourse Liability” shall have the meaning set forth in Section 1.704-2(b)(3) of the Treasury Regulations.

	
  

	
(c)

	
Qualified Income Offset.  In the event any Member receives any adjustments, allocations, or Distributions described in subparagraphs (4), (5), or (6) of Section 1.704-1(b)(2)(ii)(d) of the Treasury Regulations, items of income and gain shall be specially allocated to each such Member in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, the Adjusted Capital account Deficient of such Member as quickly as possible, provided that an allocated pursuant to this paragraph (c) shall be made if and only to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article 5 have been tentatively made as if this paragraph (c) were not in the Agreement.

As used herein, “Adjusted Capital Account Deficit” means, with respect to any Member, the deficit balance, if any, in such Member’s Capital Account as of the end of the relevant fiscal year or other period, after giving effect to the following adjustments:

	
  

	
(i)

	
Credit to such Capital Account any amounts which such Member is obligated to restore pursuant to any provision of this Agreement or is deemed to be obligated to restore pursuant to the penultimate sentences of Section 1.704-2(i)(5) of the Treasury Regulations; and

	
  

	
(ii)

	
Debit to such Capital Account the items descried in subparagraph (4), (5) and (6) of Section 1.704-1(b)(2)(ii)(d) of the Treasury Regulations and shall be interpreted consistently therewith.

The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Section 1.704-1(b)(2)(ii)(d) of the Treasury Regulations and shall be interpreted consistently therewith.

 

  

Exhibit B 11

  

	
  

	
(d)

	
Nonrecourse Deductions.  Nonrecourse Deductions for any fiscal year or other period shall be specially allocated among the Members in accordance with their respective LLC Interests.

As used herein, “Nonrecourse Deductions” shall have the meaning set forth in Section 1.704-2(b)(1) of the Treasury Regulations.

	
  

	
(e)

	
Member Nonrecourse Deductions.  Any Member Nonrecourse Deductions for any fiscal year or other period shall be specially allocated to the Member who bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Section 1.704-2(i)(1) of the Treasury Regulations.

As used herein, “Member Nonrecourse Deductions, shall have the meaning set forth in Section 1.704-2(b)(1) and 1.704-2(i)(2) of the Treasury Regulations.

	
  

	
(f)

	
Section 754 Adjustment.  To the extent an adjustment to the adjusted tax basis of any LLC asset pursuant to Section 734(b) or Section 743(b) of the Code is required, pursuant to subparagraphs (2) or (4) of Section 1.704-1(b)(2)(iv)(m) of the Treasury Regulations, to be taken into account in determining Capital Accounts as a result of a Distribution to a Member in complete liquidation of his or her Interest, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) and such gain or loss shall be specially allocated to the Members in accordance with their respective LLC Interests in the event that Section 1.704-1(b)(2)(iv)(m)(2) of the Treasury Regulations applies, or to the Member to whom such Distribution was made in the event that Section 1.704-1(b)(2)(iv)(m)(4) of the Treasury Regulations applies.

5.4           Curative Allocations.  The allocations set forth above in paragraph (a) through (f) of Section 5.3 (the “Regulatory Allocations”) are intended to comply with certain requirements of the Treasury Regulations.  It is the intent of the Members that, to the extent possible, all Regulatory Allocations shall be offset either with other Regulatory Allocations or with special allocations of other items of income, gain, loss or deduction pursuant to this Section 5.4.  Therefore, notwithstanding any other provision of this Article 5 (other than the Regulatory Allocations), the Manager shall make such offsetting special allocations of income, gain, loss or deduction in whatever manner the Manager determines appropriate so that, after such offsetting allocations are made, each Member’s Capital Account balance is, to the extent possible, equal to the Capital Account balance such Member would have had if the Regulatory Allocations were not part of the Agreement and all items of income, gain, loss or deduction were allocated pursuant to Section 5.1 and 5.2 above.  In exercising his discretion under this Section 5.4, the Manager shall take into account future Regulatory Allocations under Sections 5.3(a) and 5.3(b) above that, although not yet made, are likely to offset other Regulatory Allocations previously made under Section 5.3(d) and 5.3(e) above.

 

  

Exhibit B 12

  

5.5           Other Allocation Rules.

5.5.1           Other Allocations.  Unless otherwise herein expressly provided to the contrary, all allocations to the Members pursuant to this Article 5 shall be divided among them in proportion to their respective LLC Interests.

5.5.2           Period.  For purposes of determining Net Profit, Net Loss, or any other items allocable to any period, Net Profit, Net Loss, and any such other items shall be determined on a daily, monthly, or other basis, as determined by the Manager using any permissible method under Section 706 of the Code and the Treasury Regulations thereunder.

5.5.3           Excess Nonrecourse Liabilities.  Solely for purposes of determining a Member’s proportionate share of the “excess nonrecourse liabilities” of the LLC within the meaning of Section 1.752-3(a)(3) of the Treasury Regulations, the Members’ interests in Net Profit shall be in accordance with their respective LLC Interests.

5.6           Tax Allocations: Section 704(c) of the Code.  In accordance with Section 704(c) of the Code and the Treasury Regulations there under, income, gain, loss and deduction with respect to any property contributed to the capital of the LLC shall, solely for tax purposes, be allocated among the Members to as to take account of the variation between the adjusted basis of such property to the LLC for federal income tax purposes and its Gross Asset Value as follows:

	
  

	
(a)

	
Contributed Property.  The Manager and the Member or Members who contributed such property shall have the sole discretion to choose among the alternatives set forth in the Treasury Regulations issued under Section 704(c) of the Code for handling such variation, and, to the extent allowable under the applicable Treasury Regulations, different methods may be used for specific assets.

	
  

	
(b)

	
Gross Asset Value.  In the event the Gross Asset Value of any asset of the LLC is adjusted pursuant to Section 1.11(b) of (d) hereof, the Manager shall have the sole discretion to choose among the alternatives set forth in the Treasury Regulations issued under Section 704(c) of the Code for allocating income, gain, loss, and deduction with respect to such asset so as to take account of any variation between the adjusted basis of such asset for federal income tax purposes and its Gross Asset Value.

	
  

	
(c)

	
Tax Allocations Only.  Allocations pursuant to this Section 5.6 are solely for purposes of federal and state taxes and shall not affect, or in any way be taken into account in determining, any Member’s Capital Account or LLC Interest.

5.7           Allocation of Net Profits and Losses and Distributions in Respect of a Transferred LLC Interest.

 

  

Exhibit B 13

  

5.7.1           Pro Rata Allocation.  If any LLC Interest is transferred, or is increased or decreased by reason of the admission of a new Member or otherwise, during any Fiscal Year of the LLC, each item of income, gain, loss, deduction, or credit of the LLC for such Fiscal Year shall be assigned pro rata to each day in the particular period of such fiscal year to which such item is attributable (i.e., the day on or during which it is accrued or otherwise incurred) and the amount of each such item so assigned to any such day shall be allocated to the Member based upon his or her respective LLC Interest at the close of such day.

5.7.2           Semi-Monthly.  However, for the purpose of accounting convenience and simplicity, the LLC shall treat a transfer of, or an increase or decrease in, a LLC Interest which occurs at any time during a semi-monthly period (commencing with the semi-monthly period including the date hereof) as having been consummated on the last day of such semi-monthly period, regardless of when during such semi-monthly period such transfer, increase, of decrease actually occurs (i.e., sales and dispositions made during the first 15 days of any month will be deemed to have been made on the 15th day of the month).

5.7.3           Current Members.  Notwithstanding any provision above to the contrary, gain or loss of the LLC realized in connection with a sale or other disposition of any of the assets of the LLC shall be allocated solely to the parties owning LLC Interests as of the date such sale or other disposition occurs.

5.8           Distributable Cash.  Except as otherwise provided in Section 11.4 hereof relating to liquidating distributions, Cash Flow, if any, shall be distributed monthly or at such other times as the Manager in his discretion shall deem appropriate in the following order of priority:

	
  

	
(a)

	
Ordinary Cash Flow. Ordinary Cash Flow shall be distributed to the Members in the following order of priority:

	
  

	
(i)

	
First, to the Members in accordance with any tax distributions called for in this Agreement;

	
  

	
(ii)

	
Second, to the Members in accordance with their LLC Interests.

	
  

	
(b)

	
Extraordinary Cash Flow. Extraordinary Cash Flow shall be distributed to the Members in the following order of priority:

	
(v)  

	
First, to the Members in accordance with any tax distributions called for in this Agreement;

	
(vi)  

	
Second, to the Members in proportion to, and to the extent, of their unrecovered Capital Contribution;

	
  

	
(iv)

	
Third, to any and all Members pro rata until their Capital Accounts equal to –0-; and

	
  

	
(v)

	
Finally to the Members in accordance with their respective LLC Interests.

 

  

Exhibit B 14

  

	
  

	
(c)

	
Notwithstanding the above distribution order, the Manager Rod Smith shall not receive any distributions of any type until such time that all Members’ Capital Accounts are zero.

5.9           Distributions in Kind.  Any property distributed to the Members in kind shall be treated as though such property had been sold by the LLC at the time of Distribution for its fair market value, and unrecognized gain or loss associated with such distributed property shall be allocated to the Capital Accounts of Members in the same manner as Net Profit or Net Loss would have been allocated if such distributed property had actually been sold; provided, however, that if such Distribution takes place pursuant to the dissolution of the LLC, any adjustments to Capital Account balances resulting from actual sales, exchanges, or other dispositions of LLC Property made pursuant to dissolution.

5.10           Distribution of Assets by the LLC.  Subject to applicable law and any limitations contained elsewhere in this Agreement, the Manager may elect from time to time to distribute in kind to the Members, which distributions shall be paid to all Members pro rata according to their percentage of LLC Interest ownership in relation to all Common and Preferred interests then outstanding.  Upon any distribution in kind, Management shall determine a fair market value of the distribution for purposes of determining the value of the distribution to each Member.  All such distributions shall be made only to the Persons who, according to the books and records of the LLC, are the holders of record of the economic interests in respect of which such distributions are made on the actual date of distribution. Neither the LLC nor any Manager shall incur any liability for making distributions in accordance with this Section 5.8.

5.11           Distribution and Sale of Leads and GPDB Club Memberships. The Manager may, at his sole discretion, distribute and sell to the Members leads and GPDB buying club memberships generated by the LLC, which distributions shall be made to all Members pro rata according to their percentage of LLC Interest ownership in relation to all Common Units then outstanding.  Upon any distribution, Management shall determine a fair market value of the distribution for purposes of determining the value of the distribution to each Member.  All such distributions shall be made only to the Persons who, according to the books and records of the LLC, are the holders of record of the economic interests in respect of which such distributions are made on the actual date of distribution. Leads and GPDB buying club memberships not purchased by Members shall be allocated to a general pool for sale to GPDB Rewards members or entities in the GPDB membership organization. Neither the LLC nor any Manager shall incur any liability for making distributions in accordance with this Section 5.11.

5.12           Form of Distribution.  A Member, regardless of the nature of the Member’s Capital Contribution, has no right to demand and receive any distribution from the LLC in any form other than money. No Member may be compelled to accept from the LLC a distribution of any asset in kind in lieu of a proportionate distribution of money being made to other Members. Except upon the dissolution and winding up of the LLC, no Member may be compelled to accept a distribution of any asset in kind.

 

  

Exhibit B 15

  

5.13           Restriction on Distributions.

(a)           No distribution shall be made if, after giving effect to the distribution:

	
  

	
(i)

	
The LLC would not be able to pay its debts as they become due in the usual course of business; or

	
  

	
(ii)

	
The LLC’s total assets would be less than the sum of its total liabilities plus, unless this Agreement provides otherwise, the amount that would be needed, if the LLC were to be dissolved at the time of the distribution, to satisfy the preferential rights of other Members, if any, upon dissolution that are superior to the rights of the Member receiving the distribution.

	
  

	
(b)

	
The Manager may base a determination that a distribution is not prohibited on any of the following:

	
  

	
(i)

	
Financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances.

	
  

	
(ii)

	
A fair valuation.

	
  

	
(iii)

	
Any other method that is reasonable in the circumstances.

5.14           Return of Distributions. Except for distributions made in violation of the Act or this Agreement, no Member or Economic Interest Owner shall be obligated to return any distribution to the LLC or pay the amount of any distribution for the account of the LLC or to any creditor of the LLC. The amount of any distribution returned to the LLC by a Member or paid by a Member for the account of the LLC or to a creditor of the LLC shall be added to the account or accounts from which it was subtracted when it was distributed to the Member.

5.15           Obligations of Members to Report Allocations.   The Members are aware of the income tax consequences of the allocations made by this Section 5 and hereby agree to be bound by the provisions of this Section 5 in reporting their shares of LLC income and loss for income tax purposes.

  

Exhibit B 16

  

SECTION 6:  MANAGEMENT

6.1           Manager.  The day-to-day activities of the LLC shall be managed by Manager selected by the Members. The Members shall have the right to appoint a Manager at any time upon the affirmative vote of a majority of the LLC Interests outstanding.  Members holding a majority of the LLC Interests may vote to appoint a Manager and approve operating procedures to govern the Manager.  The Manager does not have to be a Member.   For purposes of this Agreement, all references to “Manager” shall mean the Manager appointed herein. Until the next meeting of the Members, the Manager shall be Rod Smith.

6.2 Officers.  The LLC shall not have any Officers until such time as the Members vote to elect Officers and specify duties for such Officers.

 

SECTION 7:  TRANSFER AND ASSIGNMENT OF LLC INTEREST

 

7.1           Transfer or Assignment of Member’s Interest.  Except as otherwise provided in this Agreement, no Member may transfer and/or assign, in whole or in part, his or her LLC Interest at any time.  For purposes of this Agreement transfer shall mean sale, exchange, assignment, alienation, disposition, gift, pledge, hypothecation, encumbrance, or grant of security interest in the LLC Interest.

7.2           Consent to Transfer.  No transfer or assignment of a LLC Interest, or any part thereof, will be valid without the express written consent of 51% percent of the LLC Interests.  If a LLC Interest is transferred or assigned without consent of 51% percent of the LLC Interests, the transferee shall have no rights in nor may participate in the management or operation of the business and affairs of the LLC nor have the right to become a Member of the LLC.  Any transfer or assignment of a LLC Interest without the proper compliance with this Section 7 shall only effect a transfer or assignment of the Member’s Financial Interest, and the transferring Member shall still be bound to the terms of this Agreement.  If a transfer or assignment does obtain the required consent, then the transferee shall be admitted as an additional Member pursuant to this Agreement. A transferring Member will be deemed to have received proper consent pursuant to this Section 7.2 if such transferring Member complies with the offer and notice requirements of Section 7.5 below.

7.3           Transfer to Family Members.  For purposes of this section, the restriction on the transfer or assignment of a LLC Interest shall not apply to transfers or assignments to a Member’s immediate family, including his or her spouse, parents, siblings, and children, or a trust, corporation, or other entity controlled by the transferring Member.

7.4           Restriction on Transfer; Right of First Refusal. Prior to a merger or acquisition of the LLC, the sale of all or substantially all of the assets of the LLC, or a firm commitment underwritten public offering pursuant to an effective registration statement, Members shall not sell or otherwise transfer (including transfer by operation of law) any LLC Interest to any third party unless such LLC Interest shall first be offered to the LLC for purchase at the price per Unit offered by a non-related, non-affiliated, third party which the Purchaser agrees to accept subject to this right of first refusal. In the event the LLC agrees to purchase the LLC Interest, 50% of the purchase price shall be paid at the time of the election to purchase the LLC Interest and the balance shall be paid in three equal monthly installments, each installment due on or before the first day of each calendar month thereafter.  If the LLC does not agree to purchase the LLC Interest within 60 days of receiving notice of their first right, the selling Member shall have the right, within 30 days thereafter to sell the LLC Interest to the third party, which shall be deemed transferred in accordance with Section 7.2.

  

Exhibit B 17

  

SECTION 8:  BOOKS AND RECORDS

8.1           Maintenance of Books and Records.  The LLC shall establish and maintain appropriate books and records in accordance with accrual income tax basis of accounting.  There shall be kept at the principal office of the LLC and the registered office of the LLC, if different, the following LLC documents:

	
  

	
(a)

	
A current list of the name and business or residence address of each Member and it, his or her Capital Contribution and LLC Interest;

	
  

	
(b)

	
A current list of the name and business or residence address of the Manager;

	
  

	
(c)

	
A copy of the Articles of Organization and this Agreement and any amendments thereto;

	
  

	
(d)

	
Copies of the LLC’s federal, state, and local income tax or information returns, if any, for the past six fiscal years;

	
  

	
(e)

	
Copies of the financial statements of the LLC, if any, for the past six fiscal years;

	
  

	
(f)

	
Originals or copies of all minutes, actions by written consent, consents to action, and waivers of notice to Members, Member votes, actions and consents; and

	
  

	
(g)

	
Any other information required to be maintained by the LLC pursuant to the state of organization’s LLC statute.

8.2           Annual Accounting.  Within 30 days after the close of each fiscal year of the LLC, the LLC shall cause to be prepared and submitted to each Member a balance sheet and income statement for the preceding fiscal year of the LLC (or portion thereof) in conformity with accrual income tax basis of accounting and provide to the Members all information necessary for them to complete federal and state tax returns.

8.3           Inspection and Audit Rights.  Each Member has the right, upon reasonable request, for purposes reasonably related to the interest of that Member, to inspect and copy during normal business hours any of the LLC books and records.  Such right may be exercised by the Member or his or her agent or attorney.  Any Member may require a review and/or audit of the books, records, and reports of the LLC.

 

  

Exhibit B 18

  

8.4           Bank Accounts.  All funds of the LLC shall be deposited in the LLC’s name in such banks as determined by the Members.  All checks, drafts, or other orders for payment of money, notes or other evidences of indebtedness, issued in the name of or payable to the LLC, shall be signed or endorsed by such person or persons and in such manner as, from time to time, shall be determined by the Members.

8.5           Fiscal Year.  The LLC’s fiscal year shall end on December 31st.

8.6           Accounting Method.  For financial reporting purposes, the books and records of the LLC shall be kept on the accrual tax basis of accounting applied in a consistent manner and shall reflect all transactions of the LLC and be appropriate and adequate for the purposes of the LLC.

SECTION 9:  TAXATION

9.1           Tax Year.  The LLC’s taxable year shall end on December 31st.

9.2           Tax Matters Partner.  A majority of the LLC Interests at a meeting of the Members shall appoint a Tax Matters Partner pursuant to Code Section 6231 to represent the LLC.  The Tax Matters Partner, on behalf of the LLC, shall oversee the LLC tax affairs in the overall best interests of the LLC and make all elections for federal income tax purposes.  The Tax Matters Partner shall have all necessary federal and state income and information tax returns prepared and filed on behalf of the LLC.  The determination of the Tax Matters Partner as to adjustments to the financial reports, books, records, and returns of the LLC, in the absence of fraud or gross negligence, shall be final and binding upon the LLC and all of the Members.  Andrew Smith shall be the initial Tax Matters Partner until such time as another Member is selected as the Tax Matters Partner.

SECTION 10:  INDEMNIFICATION

10.1           Indemnification.  The LLC shall indemnify and hold harmless any Member to the full extent provided for by statute of the state of formation and to a greater extent as determined by a majority vote of the LLC Interests.

SECTION 11:  LLC OWNERSHIP

11.1           Issuance of LLC Certificates. This Agreement shall serve as evidence of each Member’s LLC Interest, designated as Common Units.  In addition, the LLC shall issue a certificate as evidence of each Member’s LLC Interest.  The certificates shall bear a restrictive legend substantially as follows:

The Units represented by this certificate have not been registered under the Securities Act of 1933 (the “Act”) and are “restricted securities” as that term is defined in Rule 144 under the Act.  The Units may not be offered for sale, sold, or otherwise transferred except pursuant to an effective registration statement under the Act or pursuant to an exemption from registration under the Act, the availability of which is to be established to the issuer’s satisfaction.

 

  

Exhibit B 19

  

 

SECTION 12:  TERMINATION AND DISSOLUTION

12.1           Dissolution.  The LLC shall be dissolved upon the occurrence of any of the following events:

(a)           The expiration of the period fixed in the Articles of Organization; or

(b)           The written consent of a majority of the LLC Interests then outstanding.

12.2           Statement of Intent to Dissolve.  Upon the occurrence of any of the events specified above, the LLC shall execute and file a Statement of Intent to Dissolve.

12.3           Conduct of Business.  Upon the occurrence of any of the events specified above, a majority of the Members shall appoint one or more of the Members to act as liquidator and wind up all LLC business and affairs.  However, the LLC shall continue to exist until Articles of Dissolution have been filed or until a decree dissolving the LLC has been entered by a court of competent jurisdiction.

12.4           Distribution upon Termination of LLC Business.  Upon the occurrence of any of the events specified above and the termination of the business of the LLC, and the completion of the winding up all LLC business and affairs, the assets of the LLC shall be promptly liquidated and distributed in the following order:

	
  

	
(a)

	
First, to the payment and discharge of all of the LLC’s debts and liabilities, other than debts to Members and transferable debts secured by LLC Property;

	
  

	
(b)

	
Second, to the setting up of such reserves which the Liquidator may deem reasonably necessary for any contingent or unforeseen liabilities or obligations of the LLC;

	
  

	
(c)

	
Third, to the payment and discharge of any loans or advances made by Members to the LLC and all expenses, including attorneys’ fees, incurred by the Liquidator in connection with winding up and liquidation of the LLC;

	
  

	
(d)

	
Fourth, to the Members, to the extent of and in proportion to the accrued and unpaid Preferred Distribution, and according to the liquidation preferences described in 3.9.1;

	
  

	
(e)

	
Fifth, to the extent the unrecovered Capital Contribution of any of the Members shall then be more than zero, to such Members, each in the ratio which the positive balance of his unrecovered Capital Contribution bears to the aggregate positive balances of all such Members’ unrecovered Capital Contribution, until and to the extent required to cause the balance of each such Member’s unrecovered Capital Contribution to equal zero;

 

  

Exhibit B 20

  

	
  

	
(f)

	
Sixth, the balance, if any, to the extent the Capital Accounts of the Members shall be more than zero (after taking into account all Capital Account adjustments for the taxable year of liquidation), any such proceeds shall be distributed to such Members each in the ratio which the positive balance of his Capital Account bears to the aggregate positive balances of all such Members until and to the extent required to cause the balance of each such Member’s Capital Account to equal zero.

In the discretion of the Liquidator, a pro rata portion of the Distributions that would otherwise be made to the Members pursuant to this Section 12.4 may be:

	
  

	
(i)

	
distributed to a trust established for the benefit of the Members for the purpose of liquidating LLC assets, collecting amounts owed to the LLC, and paying any contingent or unforeseen liabilities or obligations of the LLC.  The assets of any such trust shall be distributed to the Members from time to time, in the reasonable discretion of the Liquidator, in the same proportions as the amount distributed to such trust by the LLC would otherwise have been distributed to the Members pursuant to this Agreement;

	
  

	
(ii)

	
withheld to provide a reasonable reserve for LLC liabilities (contingent or otherwise) and to reflect the unrealized portion of any installment obligations owed the Company, provided that such withheld amounts shall be distributed to the Members as soon as practicable.

12.5           Mixed Distributions.  Where the distribution consists both of cash and non-cash assets, the cash shall be distributed first, in descending order, to the above categories.  With respect to the non-cash assets, which distribution values are to be based on the fair market value of the non-cash asset as determined in good faith by the liquidator, the liquidator may sell the non-cash assets and distribute the cash proceeds or distribute the assets in kind, in descending order, to the above categories.

12.6           Termination.  The LLC shall be terminated upon the distribution of all assets.  The Members shall cause the LLC to file articles of dissolution, if required, or take any other actions necessary to terminate the LLC.

SECTION 13:  MERGER OR CONVERSION

13.1           Merger.  The LLC may be merged into another entity upon the approval of a majority of the LLC Interests then outstanding by vote at a meeting of the Members at which a quorum is present or by written consent.

13.2           Conversion.  The LLC may be converted into another entity in accordance with the provisions of the Utah Code, Title 4c, Chapter 1401 et. seq. upon the approval of a majority of the LLC Interests then outstanding by vote at a meeting of the Members at which a quorum is present or by written consent.

 

  

Exhibit B 21

  

SECTION 14:  AMENDMENTS

14.1           Amendments by Members.  This Agreement may be adopted, amended, altered, or repealed by the vote at a meeting of the Members at which a quorum is present or written consent of a majority of the LLC Interests then outstanding.

SECTION 15:  GENERAL PROVISIONS

15.1           Entire Agreement/Modification.  This Agreement and any related written agreement among the parties or the LLC contain the entire understanding of the parties with respect to the subject matter of the Agreement, and it supersedes all prior understandings and agreements, whether written or oral, and all prior dealings of the parties with respect to the subject matter hereof.  This Agreement may be changed by a vote of a majority of the LLC Interests, so long as no fraud is committed against any of the Members of the LLC. Further, no consent or waiver, express or implied, to or of any breach or default shall constitute a consent or waiver to or of any other breach.

15.2           Partition.  Each Member agrees that he or she has no right, and irrevocably waives any and all such rights, to have the assets of the LLC partitioned, or to file a complaint, or institute and maintain any proceeding at law or equity to have the assets of the LLC partitioned.

15.3           Further Actions.  Each of the Members agrees to execute, acknowledge, and deliver such additional documents, and take such further actions, as may reasonably be required from time to time to carry out each of the provisions and the intent of this Agreement, and every agreement or document relating hereto, or entered into in connection herewith.

15.4           Severability.  If any provision of this Agreement or the application thereof to any person or circumstance shall be invalid or unenforceable to any extent, the remainder of this Agreement and the application of such provision to other persons or circumstances shall not be affected thereby and shall be enforced to the greatest extent permitted by law.

15.5           Successor and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors, legal representatives, and assigns.  This Agreement may not be assigned by any party without the express written consent of the other parties.

15.6           Notices.  All notices, requests, demands, and other communications made hereunder shall be in writing and shall be deemed duly given if delivered or sent by telex, facsimile, or registered or certified mail, postage prepaid as of the date so delivered to the Member’s address listed in the Recital paragraphs or such Member’s principle place of business or principle facsimile number, or to such other address or person as the party may designate by notice to the other party hereunder.

15.7           Attorneys’ Fees.  In the event of any litigation, arbitration or other dispute arising as a result of or by reason of this Agreement, the prevailing party in any such litigation, arbitration or other dispute shall be entitled to, in addition to any other damages assessed, its reasonable attorneys’ fees, and all other costs and expenses incurred in connection with settling or resolving such dispute.

 

  

Exhibit B 22

  

15.8           Construction.  Throughout this Agreement, the masculine, feminine, or neuter genders shall be deemed to include the masculine, feminine, and neuter and the singular, the plural, and vice versa.  The section headings of this Agreement are for convenience of reference only and do not form a part hereof and do not in any way modify, interpret, or construe the intentions of the parties.

15.9           Execution and Counterparts.  This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, and all such counterparts when taken together shall constitute one and the same instrument.

15.10           Governing Law and Forum Selection.  This Agreement shall be governed by, and interpreted in accordance with, the laws of the state of formation.  Suits may only be brought in the state of formation.

IN WITNESS WHEREOF, the Members hereto have caused this Agreement to be duly executed as of the date stated in the Recital paragraphs.

MEMBERS HOLDING COMMON UNITS:

_______________________________

ROD A. SMITH

_______________________________

REGINA SMITH, TRUSTEE ON BEHALF

OF THE SMITH FAMILY TRUST

_______________________________

GARY OR HELEN SMITH

_______________________________

RUSS KARLEN

_______________________________

DAVID & BARBARA ALLEN

_______________________________

BRANDON & LACEY FUGAL

 

  

Exhibit B 23

  

_______________________________

DANIEL & JILL FUGAL

_______________________________

ANDREW SMITH

_______________________________

LYNN J. & DAWN R. HADFIELD

_______________________________

SAMUEL & PATRICE SPENCER

_______________________________

SANDRA OR KELLY SAVAGE

_______________________________

S. PHILIP SPENCER ON BEHALF OF

3SP INVESTMENTS LLC

_______________________________

SCENIC HOLDINGS LLC

_______________________________

JEFFREY S. OR NANCE M. KAMMERSELL

_______________________________

FRED KAMMERSELL

_______________________________

BERKLEY OR DIANE HOFFER

_______________________________

PATTY JAMES

_______________________________

NED WARNER

 

  

Exhibit B 24

  

_______________________________

JOEL BROWNSTEIN

_______________________________

CONNIE SELF

_______________________________

ZACHARY DUTTON

_______________________________

KIMBERLY WARNER

_______________________________

DAVE GOLDBERG

_______________________________

THOMAS S. & SUSAN M. SMITH

_______________________________

E.J. CORRY

_______________________________

HARRY OR MARYANN MARCO

_______________________________

DAVID OR LAURA HOULE

_______________________________

TERI DOMANSKI

_______________________________

DAVE HYMUS

_______________________________

DARIS RICE

 

  

Exhibit B 25

  

_______________________________

DAN SMITH

_______________________________

TONY RODDA

_______________________________

RALPH NOBREGA

_______________________________

SANDRA ROBLES

_______________________________

LARRY & SANDEE CARSON

_______________________________

MARK A. HANSEN

_______________________________

MICHAEL LANGE

_______________________________

TIM HAYES

_______________________________

MATT KAMMERSELL

_______________________________

MELISSA KAMMERSELL

_______________________________

JOEL BROWNSTEIN

_______________________________

KEVIN MAYBERRY

_______________________________

JENI JONES

  

Exhibit B 26

  

 

EXHIBIT “C”

THE GREEN POLKADOT BOX LLC

_____________________________________________________

FORM OF WARRANT

NEITHER THIS WARRANT NOR THE SECURITIES INTO WHICH THIS WARRANT IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS THEREUNDER AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES OR BLUE SKY LAWS.

_____________________________________________________

THE GREEN POLKADOT BOX LLC

COMMON UNIT PURCHASE WARRANT NO. 2011-__

_____________________________________________________

Dated:  December ___, 2011

THE GREEN POLKADOT BOX LLC, a Utah limited liability company located at 629 East Quality Drive, American Fork, Utah 84003  (the “Company”), hereby certifies that, for value received, ____________________________________ or its registered assigns (the “Holder”), is entitled, subject to the terms set forth below, to purchase from the Company up to a total of ______ Common Units (the “Units”) of the Company (each such Unit, a “Warrant Unit” and all such Units, the “Warrant Units”) at an exercise price equal to $1.35 (the “Exercise Price”) per Warrant Unit (hereinafter this Unit purchase warrant is referred to as the “Warrant” or the “Warrants”). The Warrants may be exercised through and including December 31, 2016 (the “Expiration Date”).  This Warrant is subject to the following additional terms and conditions:

1.           Warrant Register; Registration of Transfers and Exchanges.

1.1           The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time.  The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, and the Company shall not be affected by notice to the contrary.

 

  

Exhibit C 1

  

1.2           The Company shall register the transfer of any portion of this Warrant in the Warrant Register, upon surrender of this Warrant, with the Form of Assignment attached hereto duly completed and signed, to the Company at its address for notice specified in Section 9 along with an opinion of counsel to the Holder reasonably acceptable to the Company that such transfer may be made without compliance with Federal and state securities laws.  Upon any such registration or transfer, a new warrant to purchase Units, in substantially the form of this Warrant (any such new warrant, a “New Warrant”), evidencing the portion of this Warrant so transferred shall be issued to the transferee and a New Warrant evidencing the remaining portion of this Warrant not so transferred, if any, shall be issued to the transferring Holder.  The acceptance of the New Warrant by the transferee thereof shall be deemed the acceptance of such transferee of all of the rights and obligations of a holder of a Warrant.

1.3           This Warrant is exchangeable, upon the surrender hereof by the Holder to the office of the Company at its address for notice specified in Section 9 for one or more New Warrants, evidencing in the aggregate the right to purchase the number of Warrant Units which may then be purchased hereunder.  Any such New Warrant will be dated the date of such exchange.

	
2.  

	
Duration, Exercise and Redemption of Warrants.

2.1           This Warrant shall be exercisable by the registered Holder on any business day before 5:00 P.M., Utah time, at any time and from time to time on or after the date hereof to and including the Expiration Date.  At 5:00 P.M., Utah time on the Expiration Date, the portion of this Warrant not exercised prior thereto shall be and become void and of no value.

2.1           Subject to Sections 1.3 and 5, upon surrender of this Warrant, with the Form of Election to Purchase attached hereto duly completed and signed, to the Company at its address for notice set forth in Section 9 and upon payment of the Exercise Price multiplied by the number of Warrant Units that the Holder intends to purchase hereunder, in lawful money of the United States of America, in cash or by certified or official bank check or checks, all as specified by the Holder in the Form of Election to Purchase, the Company shall promptly (but in no event later than five business days after the Date of Exercise, as defined herein) issue or cause to be issued and cause to be delivered to or upon the written order of the Holder and in such name or names as the Holder may designate, a certificate for the Warrant Units issuable upon such exercise.  Any person so designated by the Holder to receive Warrant Units shall be deemed to have become a holder of record of such Warrant Units as of the Date of Exercise of this Warrant.  A “Date of Exercise” means the date on which the Company shall have received (i) this Warrant (or any New Warrant, as applicable), with the Form of Election to Purchase attached hereto (or attached to such New Warrant) appropriately completed and duly signed, and (ii) payment of the Exercise Price for the number of Warrant Units so indicated by the holder hereof to be purchased.

2.3           This Warrant shall be exercisable, either in its entirety or, from time to time, for a portion of the number of Warrant Units.  If less than all of the Warrant Units which may be purchased under this Warrant are exercised at any time, the Company shall issue or cause to be issued, at its expense, a New Warrant evidencing the right to purchase the remaining number of Warrant Units for which no exercise has been evidenced by this Warrant.

 

  

Exhibit C 2

  

3.           Payment of Taxes. The Company will pay all documentary stamp taxes attributable to the issuance of Warrant Units upon the exercise of this Warrant; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the registration of any certificates for Warrant Units or Warrants in a name other than that of the Holder, and the Company shall not be required to issue or cause to be issued or deliver or cause to be delivered the certificates for Warrant Units unless or until the person or persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid.  The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Units upon exercise hereof.

4.           Replacement of Warrant.  If this Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and indemnity, if reasonably satisfactory to it.  Applicants for a New Warrant under such circumstances shall also comply with such other reasonable regulations and procedures and pay such other reasonable charges as the Company may prescribe.

5.           Reservation of Warrant Units.  The Company covenants that it will at all times reserve and keep available out of the aggregate of its authorized but unissued Units, solely for the purpose of enabling it to issue Warrant Units upon exercise of this Warrant as herein provided, the number of Warrant Units which are then issuable and deliverable upon the exercise of this entire Warrant, free from preemptive rights or any other actual contingent purchase rights of persons other than the Holders (taking into account the adjustments and restrictions of Section 6).  The Company covenants that all Warrant Units that shall be so issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms hereof, be duly and validly authorized, issued and fully paid and non-assessable.

6.           Certain Adjustments.

6.1           The Exercise Price and number of Warrant Units issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 6.  Upon each such adjustment of the Exercise Price pursuant to this Section 6, the Holder shall thereafter prior to the Expiration Date be entitled to purchase, at the Exercise Price resulting from such adjustment, the number of Warrant Units obtained by multiplying the Exercise Price in effect immediately prior to such adjustment by the number of Warrant Units issuable upon exercise of this Warrant immediately prior to such adjustment and dividing the product thereof by the Exercise Price resulting from such adjustment.

6.2           If the Company, at any time while this Warrant is outstanding, (i) shall pay a stock dividend or otherwise make a distribution or distributions on shares of its Units (as defined below) or on any other class of capital stock (and not the Units) payable in Units, (ii) subdivide outstanding Units into a larger number of Units, or (iii) combine outstanding Units into a smaller number of Units, the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of Units (excluding treasury Units, if any) outstanding before such event and of which the denominator shall be the number of Units (excluding treasury Units, if any) outstanding after such event.  Any adjustment made pursuant to this Section shall become effective immediately after the record date for the determination of Members entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision or combination, and shall apply to successive subdivisions and combinations.

 

  

Exhibit C 3

  

6.3           In case of any reclassification of the Units, any consolidation or merger of the Company with or into another person, the sale or transfer of all or substantially all of the assets of the Company in which the consideration therefor is equity or equity equivalent securities or any compulsory Unit exchange pursuant to which the Units is converted into other securities or property, then the Holder shall have the right thereafter to exercise this Warrant only into the Units and other securities and property receivable upon or deemed to be held by holders of Units following such reclassification, consolidation, merger, sale, transfer or Unit exchange, and the Holder shall be entitled upon such event to receive such amount of securities or property of the Company’s business combination partner equal to the amount of Warrant Units such Holder would have been entitled to had such Holder exercised this Warrant immediately prior to such reclassification, consolidation, merger, sale, transfer or Unit exchange.  The terms of any such consolidation, merger, sale, transfer or Unit exchange shall include such terms so as to continue to give to the Holder the right to receive the securities or property set forth in this Section 6.3 upon any exercise following any such reclassification, consolidation, merger, sale, transfer or Unit exchange.

6.4           If the Company, at any time while this Warrant is outstanding, shall distribute to all holders of Units (and not to holders of this Warrant) evidences of its indebtedness or assets or rights or warrants to subscribe for or purchase any security (excluding those referred to in Sections 6.2, 6.3 and 6.5), then in each such case the Exercise Price shall be determined by multiplying the Exercise Price in effect immediately prior to the record date fixed for determination of Members entitled to receive such distribution by a fraction of which the denominator shall be the Exercise Price determined as of the record date mentioned above, and of which the numerator shall be such Exercise Price on such record date less the then fair market value at such record date of the portion of such assets or evidence of indebtedness so distributed applicable to one outstanding Unit as determined by a nationally recognized or major regional investment banking firm or firm of independent certified public accountants of recognized standing (which, in all events, may be the firm that regularly examines the financial statements of the Company) (an “Appraiser”) mutually selected in good faith by the holders of a majority in interest of the Warrants then outstanding and the Company.  Any determination made by the Appraiser shall be final.

6.5           If, at any time while this Warrant is outstanding, the Company shall issue or cause to be issued rights or warrants to acquire or otherwise sell or distribute Units to all holders of Units for a consideration per Unit less than the Exercise Price then in effect, then, forthwith upon such issue or sale, the Exercise Price shall be reduced to the price (calculated to the nearest cent) determined by dividing (i) an amount equal to the sum of (A) the number of Units outstanding immediately prior to such issue or sale multiplied by the Exercise Price, and (B) the consideration, if any, received or receivable by the Company upon such issue or sale by (ii) the total number of Units outstanding immediately after such issue or sale.

 

  

Exhibit C 4

  

6.6           For the purposes of this Section 6, the following clauses shall also be applicable:

(i)  Record Date.  In case the Company shall take a record of the holders of its Units for the purpose of entitling the holders of Units (A) to receive a dividend or other distribution payable in Units or in securities convertible or exchangeable into Units, or (B) to subscribe for or purchase Units or securities convertible or exchangeable into Units, then such record date shall be deemed to be the date of the issue or sale of the Units deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may be.

(ii)  Treasury Units.  The number of Units outstanding at any given time shall not include Units owned or held by or for the account of the Company, and the disposition of any such Units shall be considered an issue or sale of Units.

6.7           All calculations under this Section 6 shall be made to the nearest cent or the nearest 1/100th of a Unit, as the case may be.

6.8           If:

(i)           the Company shall declare a dividend (or any other distribution) on its Units; or

(ii)           the Company shall declare a special nonrecurring cash dividend on or a redemption of its Units; or

 (iii)           the Company shall authorize the granting to all holders of the Units rights or warrants to subscribe for or purchase any Units of any class or of any rights; or

 (iv)           the approval of any Members of the Company shall be required in connection with any reclassification of the Units of the Company, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Units is converted into other securities, cash or property; or

 (v)           the Company shall authorize the voluntary dissolution, liquidation or winding up of the affairs of the Company;

then the Company shall cause to be mailed to each Holder at their last addresses as they shall appear upon the Warrant Register, at least 30 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of Units of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of Units of record shall be entitled to exchange their Units for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer, share exchange, dissolution, liquidation or winding up; provided, however, that the failure to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice.

 

  

Exhibit C 5

  

7.           Payment of Exercise Price.  The Holder may exercise this Warrant by tendering to the Company cash or certified or official bank check or checks in an amount calculated by multiplying the Exercise Price per share by the number of Warrant Units the Holder desires to purchase.

8.           Fractional Units.  The Company shall not be required to issue or cause to be issued fractional Warrant Units on the exercise of this Warrant.  The number of full Warrant Units, which shall be issuable upon the exercise of this Warrant, shall be computed on the basis of the aggregate number of Warrant Units purchasable on exercise of this Warrant so presented.  If any fraction of a Warrant Unit would, except for the provisions of this Section 8, be issuable on the exercise of this Warrant, the Company shall, at its option, (i) pay an amount in cash equal to the Exercise Price multiplied by such fraction or (ii) round the number of Warrant Units issuable, up to the next whole number.

9.           Notices. Any and all notices or other communications or deliveries hereunder shall be given either personally, by commercial express mail service (e.g. FedEx), pre-paid for next business day service, fax, or e-mail, addressed to the party at the address of the party appearing below.  Notice shall be deemed to have been given in accordance with this Section 9 and be deemed effective on the earlier of (i) actual receipt in the case of personal delivery or delivery by commercial express mail service, or (ii) upon transmission to the party to whom such notice is required to be given in the case of delivery by fax or e-mail.  The addresses for such communications shall be:

If to the Company:               THE GREEN POLKADOT BOX LLC

                Attention:  Rod Smith, Manager

629 East Quality Drive

American Fork, Utah 84003

Fax:           801-756-4400

E-mail: rsmith@greenpolkadotbox.com

If to the Holder:

 

Fax:

E-mail:

Either party may change the address to which notices are to be sent by delivering notice to the other party in accordance with this Section 9.

 

  

Exhibit C 6

  

10.           Warrant Agent.  The Company shall serve as warrant agent under this Warrant.  Upon 30 days’ notice to the Holder, the Company may appoint a new warrant agent.  Any business entity into which the Company or any new warrant agent may be merged or any business entity resulting from any consolidation to which the Company or any new warrant agent shall be a party or any business entity to which the Company or any new warrant agent transfers substantially all of its transfer agent services business shall be a successor warrant agent under this Warrant without any further act.  Any such successor warrant agent shall promptly cause notice of its succession as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder’s last address as shown on the Warrant Register.

11.           Miscellaneous.

11.1           This Warrant shall be binding on and inure to the benefit of the parties hereto and their respective successors and permitted assigns.  This Warrant may be amended only in writing signed by the Company and the Holder.

11.2           Subject to Section 11(a), above, nothing in this Warrant shall be construed to give to any person or limited liability company other than the Company and the Holder any legal or equitable right, remedy or cause under this Warrant; this Warrant shall be for the sole and exclusive benefit of the Company and the Holder.

11.3           This Warrant shall be governed by and construed and enforced in accordance with the internal laws of the State of Utah without regard to the principles of conflicts of law thereof.

11.4           The headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to limit or affect any of the provisions hereof.

11.5           In case any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby and the parties will attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Warrant.

IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized officer as of the date first indicated above.

 

	 	THE GREEN POLKADOT BOX LLC	 
	 	 	 	 
	
 

	
By: 

	/s/ 	 
	 	 	Rod A. Smith, Manager	 

 

  

Exhibit C 7

  

FORM OF ELECTION TO PURCHASE

(To be executed by the Holder to exercise the right

to purchase Common Units under the foregoing Warrant)

In accordance with the Warrant enclosed with this Form of Election to Purchase, the undersigned hereby irrevocably elects to purchase ___________ Common Units (“Units”) of THE GREEN POLKADOT BOX LLC and encloses herewith $_________________ in cash or certified or official bank check or checks, which sum represents the aggregate Exercise Price (as defined in the Warrant) for the number of Common Units to which this Form of Election to Purchase relates, together with any applicable taxes payable by the undersigned pursuant to the Warrant.  The undersigned requests that certificates for the Common Units issuable upon this exercise be issued in the name of

 

	Print name and address: 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	
Print social security or tax identification number:   

	 

If the number of Common Units issuable upon this exercise shall not be all of the Common Units which the undersigned is entitled to purchase in accordance with the enclosed Warrant, the undersigned requests that a New Warrant (as defined in the Warrant) evidencing the right to purchase the Common Units not issuable pursuant to the exercise evidenced hereby be issued in the name of and delivered to:

 

	Print name and address: 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 

IN WITNESS WHEREOF, this Election to Purchase has been executed by the undersigned as of the date indicated below.

 

	Dated:	 	 	Name of Holder: 	 
	 	 	 	 	 
	 	 	 	Signature:	 
	 	 	 	 	 
	 	 	 	By (if entity):	 
	 	 	 	 	 
	 	 	 	Name (if entity):	 
	 	 	 	 	 
	
 

	 	 	Title (if entity): 	 

(Signature must conform in all respects to name of holder as specified on the face of the Warrant)

 

  

Exhibit C 8

  

ASSIGNMENT OF WARRANT

[To be completed and signed only upon transfer of Warrant]

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto _____________________________________________________________________________________________ the right represented by the within Warrant to purchase Common Units of THE GREEN POLKADOT BOX LLC to which the within Warrant relates and appoints the Secretary of THE GREEN POLKADOT BOX LLC attorney to transfer said right on the books of THE GREEN POLKADOT BOX LLC with full power of substitution in the premises.

 

	Dated:	 	 	Name of Holder: 	 
	 	 	 	 	 
	 	 	 	Signature:	 
	 	 	 	 	 
	 	 	 	By (if entity):	 
	 	 	 	 	 
	 	 	 	Name (if entity):	 
	 	 	 	 	 
	
 

	 	 	Title (if entity): 	 

(Signature must conform in all respects to name of holder as specified on the face of the Warrant)

In the presence of:

___________________________________________

(Signature of Witness)

___________________________________________

(Printed Name of Witness)

 

	Name and Address of Transferee: 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 

  

Exhibit C 9

  

EXHIBIT “D”

THE GREEN POLKADOT BOX LLC

ACCREDITED INVESTOR QUESTIONNAIRE

I represent and warrant that I at the time of my investment in THE GREEN POLKADOT BOX LLC I meet the definition of an “Accredited Investor” under the terms of the section checked below, or I am acting in a fiduciary capacity for a person or entity investing in THE GREEN POLKADOT BOX LLC and such person or entity is an Accredited Investor under the terms of the section checked below:

Definition of Accredited Investor.

	
  

	
I am a natural person who had an individual income of more than $200,000 in each of the most recent two years or joint income with his or her spouse in excess of $300,000 in each of the most recent two years and reasonably expect to reach that same income level for the current year (“income,” for purposes hereof, should be computed as follows: individual adjusted gross income as reported (or to be reported) on a Federal income tax return, increased by (1) any deduction of long-term capital gains under section 1202 of the Internal Revenue Code of 1986 (the “Code”), (2) any deduction for depletion under Section 611 et seq. of the Code, (3) any exclusion for interest under Section 103 of the Code, and (4) any losses of a partnership as reported on Schedule E of Form 1040);

	
  

	
I am a natural person whose individual net worth (i.e., total assets in excess of total liabilities), or joint net worth with his or her spouse, will at the time of purchase of the Common Units be in excess of $1,000,000 excluding the value of your primary residence and the debt secured by your primary residence up to the amount of the value of your primary residence;

	
  

	
The undersigned is the duly authorized officer, general partner, or trustee of a corporation, partnership, Massachusetts or similar business trust, or organization described in Section 501 (c)(3) of the Internal Revenue Code of 1986, as amended (tax exempt organization), not formed for the specific purpose of acquiring the Common Units, having total assets in excess of $5,000,000; or

	
  

	
The undersigned is the duly authorized agent of an entity (other than a trust) in which all of the equity owners meet the requirements of at least one of the above subparagraphs.

 

	 	Company Name	 
	 	 	 	 
	
Dated: December ___, 2011

	
 

	 	 
	 	 	Name of Subscriber	 
	 	 	 	 
	 	 	 	 
	 	 	Signature of Subscriber	 
	 	 	 	 
	 	 	 	 
	 	 	Name and Title (if applicable)	 

 

  

  Exhibit D 1

  

 

EXHIBIT “E”

THE GREEN POLKADOT BOX LLC

ACKNOWLEDGMENT OF RISK FACTORS

The Convertible Promissory Note and the securities into which the Convertible Promissory Note are convertible (hereinafter collectively referred to as the “Offered Securities”) of THE GREEN POLKADOT BOX LLC (“GPDB” or the “Company”) being offered are highly speculative, involve a high degree of risk, and are not suitable for all investors.  Before making an investment in the Offered Securities, each prospective investor is encouraged to consider the following risks factors inherent in and affecting the Company’s business and prospects, as well as other risk factors inherent in such an investment.

No Revenue History 

GPDB is a startup company with limited operating history. Additionally, substantial additional capital is needed to commence business operations and for the growth of the Company, including capital for inventory, sales and marketing, working capital, and general and administrative expenses. The capital raised through the present offering will be used as bridge capital to continue business operations while the Company seeks to secure the substantial additional capital it will require for its operations and growth.  GPDB may incur significant losses for the foreseeable future as it pursues its business plan, promotes its website, offers memberships for its online buying club, and purchase and sell goods.  The Company may never become a viable business.

General Risks of Business

GPDB has formulated its business plans and strategies based on certain assumptions about the market for online club memberships. Any assumptions are based upon the current perceptions of management regarding the market and the perceived likely acceptance of GPDB by the consuming public.  Management’s assumptions and financial projections represent best estimates only and could prove to be wrong as to the viability of the opportunity, market size, potential market share, pricing, product concept acceptance, or a variety of other assumptions.  GPDB’s success will ultimately depend on the Company’s ability to raise the substantial additional capital needed to execute its business plan and many outside factors, some of which cannot be predicted and most of which are outside the control of the management of the Company.

Attraction and Retention of Wholesale Accounts

 

The profitability of GPDB is dependent, in part, on the Company's ability to attract and maintain wholesale merchant accounts that will permit GPDB to purchase and resell popular consumer goods.  Numerous factors could prevent the Company from obtaining sufficient accounts to reach profitability and long-term viability, including faulty market assumptions, inadequate marketing, the presence of direct and indirect competition in the areas in and websites at which desirable products might be sold, the public's interest in purchasing products at any particular time, and general economic conditions.

 

  

Exhibit E 1

  

Competition

 

The wholesale membership club channel is fragmented and intensely competitive. Although GPDB intends to fill a niche in the online marketplace for organic and natural foods, its products, if any, will compete within each market in which the Company operates with other businesses that sell or market retail/wholesale healthy food products and food products in general. The Company also competes in a general sense with other wholesale membership clubs and grocery stores.  Additionally there are relatively few barriers to entry into the online market by new competitors, which may include companies that are larger and have greater resources than the Company.  Because of the competitive marketplace, the Company may at any time be faced with increased competition for sales that could have a negative impact upon the Company’s financial results.

Reliance on Third Party Manufacturing and Distribution

 

The Company's growth strategy depends to a significant degree upon third party manufacturers and distributors and their ability to produce reliable, defect free products; and then to increase production capacity to meet potential demand. There can be no assurance that any of these factors will remain favorable and/or constant.

The ability of management to effectively control the supply of goods and services, quality production and growing capacity for production will depend upon its ability to identify additional manufacturers, product suppliers and distributors in the United States or parts of the world. There is no assurance that suitable manufacturing and distribution partners can be located.  As a result, the Company may not be able to implement its growth strategy, to acquire sufficient quantities of products on a timely and cost-efficient basis.

Potential Liability

 

The Company’s business plan poses some known and potentially unknown risks to consumers. Claims may arise against the Company for death or injury suffered by consumers when using the products sold by the Company. The Company is subject from time to time to the risk of litigation arising out of the alleged problems resulting from using the products sold.  Although GPDB will maintain general liability coverage, the Company may not be able to maintain liability insurance on acceptable terms in the future or may not be able to provide adequate coverage against potential claims. In addition, the Company, from time to time, may be required to incur capital expenditures to bring its products into full compliance with future regulatory acts that may be imposed by the EPA, FDA and OSHA.

Government Regulation

GPDB’s operations and business practices will be subject to federal, state, and local government regulation in the various jurisdictions in which its products are sold and/or distributed, including regulations that prescribe certain forms and provisions related to product advertising, sale, and financing, and to federal, state and local health regulations. The Company believes that it will be in substantial compliance with all such applicable regulations and that the cost of such compliance is not expected to have a material adverse effect on the Company's financial condition or results of operation. However, future events, such as changes in existing regulations or the enactment of new regulations, could negatively impact the Company's financial condition or results of operation.

 

  

Exhibit E 2

  

 

Dependence on Key Personnel

 

GPDB’s formation and business development has resulted from the efforts of Rod Smith and will be dependent in the future upon certain management, employees, contractors, consultants and GPDB’s operating success.  The loss of services of any of these key contributors could adversely affect the progress of the business. GPDB’S failure to execute its business model, the inability to maintain key relationships with personnel at wholesale and retail merchant accounts and other third party marketing companies would also adversely affect the progress and success of the Company.

Investment Liquidity

The Offered Securities have not been registered under the Securities Act of 1933 (the “Act”) and may not be resold unless subsequently registered there under or an exemption from registration is available.  In the absence of such registration, there is no existing public or other market for the Units, and it is not anticipated that any such market will develop.  Moreover, the transferability of the Offered Securities is subject to certain restrictions, some of which are defined in the Company’s Operating Agreement.  Consequently, you may be unable to liquidate your investment in the event of emergency or for any other reason, and the Offered Securities will not be readily acceptable as collateral for loans.  You should be aware that you will be required to bear the financial risks of this investment for an indefinite period of time.

Need for Proceeds of Offering and Subsequent Funding

GPDB has a pending need for additional funds to be used to execute its business strategy.   GPDB intends to raise additional funds through the sale of additional Offered Securities and/or through debt financing secured by the Company’s inventory.  At the present time, the Company does not know if it will be successful in raising additional capital.   Accordingly the continuation of the business may depend upon the Company’s ability to raise additional funds through equity or debt financing, but the ability to obtain additional funding when it is needed, or that such funding, if available, will be obtainable on terms favorable to GPDB cannot be predicted.  The Company’s inability to obtain additional funding, as required, may severely impair business operations and expansion plans.

Substantial Dilution

Some of GPDB’s existing limited liability company members acquired their equity in the Company at a cost substantially below the price at which you may acquire the Offered Securities. As the Company raises additional capital to fully implement its business plan and offers additional Common Units or options or warrants to purchase Common Units to employees or other service providers as compensation, you will suffer further dilution in the ownership potential represented by the Offered Securities.

 

  

Exhibit E 3

  

Arbitrary Determination of Offering Price

The terms of the Offered Securities were arbitrarily determined by the Company and bear no relationship to its assets, book value, planned results, results of operations, or other established criteria of value.

Broad Discretion in Application of Proceeds

Your investment will be used primarily to continue business operations, purchase product inventory, conduct sales and marketing activities, and produce marketing materials.  You will have no individual control over, and you will not be asked to approve, the use of the proceeds received from the current or future offerings.

  

Exhibit E 4

  

ACKNOWLEDGEMENT

I acknowledge that I have carefully read and understand the foregoing risk factors prior to making an investment in the Offered Securities.

	
Dated: December ___, 2011

	
 

	 	 
	 	 	Name of Subscriber	 
	 	 	 	 
	 	 	 	 
	 	 	Signature of Subscriber	 
	 	 	 	 
	 	 	 	 
	 	 	Name and Title (if applicable)	 

 

  

Exhibit E 5

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