Exhibit 10.13

 

LIMITED LIABILITY COMPANY AGREEMENT
OF
RICH DAD EDUCATION, LLC

 

This LIMITED LIABILITY COMPANY AGREEMENT (this “Agreement”) is entered into as
July 18, 2006 (the “Effective Date”), between Rich Global, LLC., a(n) Wyoming
limited liability company (“Rich Dad”), and Whitney Information Network, Inc.. a
Colorado corporation (“WIN”), as Members, and WIN as the initial Manager of Rich
Dad Education, LLC, a Wyoming limited liability company (the “Company”).

 

RECITALS

 

WHEREAS, WIN is in the business of developing, producing and marketing
educational curricula on real estate, business development, and asset
protection;

 

WHEREAS, Rich Dad is in the business of developing, producing and marketing
educational curricula on securities and financial investment and asset
protection;

 

WHEREAS, WIN and Rich Dad desire to form the joint venture described in this
Agreement for the purpose of conducting the Business (defined below);

 

NOW, THEREFORE, for good and valuable consideration, the receipt of sufficiency
of which his hereby acknowledged, the parties agree as follows:

 

SECTION 1. DEFINITIONS; THE COMPANY

 

1.1           Definitions. Capitalized words and phrases used in this Agreement
shall have the meanings set forth in Section 11.14 hereof

 

1.2           Formation. The Members hereby form the Company as a limited
liability company pursuant to the provisions of the Act and upon the terms and
conditions set forth in this Agreement and in the Certificate.

 

1.3           Name. The name of the Company is Rich Dad Education, LLC. The name
of the Company may be changed by the Manager upon the prior written consent of
all Members.

 

1.4           Purposes. The purposes of the Company and the general character of
its business are to market and fulfill to current and prospective customers of
Rich Dad and WIN and to the general public through new acquisition channels
developed by the Company, real estate, business and stock based trainings
throughout the United States and Canada using the Rich Dad logo, trademark(s),
branding and goodwill associated with such logo and trademarks and to engage in
any and all other activities reasonably related or incidental to the foregoing
not prohibited by this Agreement, and any other purposes agreed to by the
Members in a writing executed by all the Members (collectively, the “Business”).
The Members intend that the Business shall be based on a modified version of
WIN’s marketing model described in Appendix 1.4, which shall be subject to a
Licensing Agreement to be entered into between the Company and WIN, and
utilizing WIN’s operations and fulfillment centers with the exception of
coaching services which shall be provided by Rich Dad’s

 

[***] Confidential treatment requested. Omitted portions have been filed
separately with the Securities and Exchange Commission.

 

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coaching provider or such other entity as may be agreed upon by the Members. The
Members agree that the scope of the Company’s business purpose shall be to
provide education to current and prospective customers of Rich Dad and WIN and
to the general public through new acquisition channels developed by the Company
and that the Company shall have no authority to offer investments or
opportunities to invest (investment opportunities) to its existing or
prospective students during the course of its training or otherwise.

 

The Company shall be a limited liability company only for the purposes specified
in this Section 1.4 (the “Core Activities”). The Company shall not engage in any
activity or business other than the Core Activities, and no Member or Manager
shall have any authority to hold itself out as a general agent of any other
Member in any other business or activity.

 

1.5           Intent. It is the intent of the Members that the Company shall
always be operated in a manner consistent with its treatment as a “partnership”
for federal and state income tax purposes. The Company is not a “partnership”
for purposes of the Wyoming Uniform Partnership Act or a “limited partnership”
for purposes of the Wyoming Uniform Limited Partnership Act, and the Members are
not partners. It also is the intent of the Members that the Company not be
operated or treated as a “partnership” for purposes of Section 303 of the
federal Bankruptcy Code. No Member shall take any action inconsistent with the
express intent of the parties hereto.

 

1.6           Office. The principal office of the Company shall be maintained at
Whitney Information Network, Inc., 1612 E. Cape Coral Parkway, Cape Coral,
Florida 33904, Attn: Thomas McElroy, or at such other location or locations in
Lee County, Florida as the Manager may from time to time designate by written
notice to all Members.

 

1.7           Registered Office and Agent for Service of Process. The registered
office of the Company in the State of Wyoming is c/o Corporate Direct, 60 East
Simpson Ave., Jackson, Wyoming 83001 or such other location as Manager shall
select from time to time in compliance with the Act. The name and business
address of the Company’s agent for service of process are Corporate Direct, 60
East Simpson Ave., Jackson, Wyoming 83001 (mailing Address P.O. Box 2869,
Jackson, Wyoming 83001), or such other qualified person or entity and such other
business address as Manager shall select from time to time in compliance with
the Act. The Manager shall comply, and the Members hereby agree to timely
execute all documents and take all actions as determined by Manager as may be
necessary to comply with the requirements of the laws of the States of Wyoming,
Arizona, Colorado, and any other applicable jurisdiction, for the formation,
registration, continuation, qualification and operation of a limited liability
company.

 

1.8           Term. The term of the Company shall commence on the date the
Certificate of Formation (the “Certificate”) is filed with the Wyoming Secretary
of State and shall continue until the Company is dissolved in accordance with
this Agreement.

 

1.9          Independent Activities.

 

1.9.1 General Scope of Independent Activities. Except as otherwise provided
below, the Members hereby expressly acknowledge that each Member (either
directly or through its Affiliates) is involved in transactions, investments and
business ventures and undertakings of every nature, which include, without
limitation, activities associated with real

 

[***] Confidential treatment requested. Omitted portions have been filed
separately with the Securities and Exchange Commission.

 

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estate and stock based training (all such investments and activities being
referred to individually as an “Independent Activity” and collectively as
“Independent Activities”).

 

1.9.2 Waiver of Rights with Respect to Independent Activities. Except as
provided below, nothing in this Agreement shall be construed to: (i) prohibit
any Member or its Affiliates from continuing, acquiring, owning or otherwise
participating in any Independent Activity that is not owned or operated by the
Company, even if such Independent Activity is or may be in competition with the
Company or (ii) require any Member to allow the Company or the other Members to
participate in the ownership or profits of any such Independent Activity. To the
extent any Member would have any rights or claims against the other Member as a
result of the Independent Activities of such Member or its Affiliates, whether
arising by statute, common law or in equity, the same are hereby waived with
respect to the operation of the Company except as provided below.

 

1.9.3 Confidential Information. During the course of this Agreement, each Member
may come into possession of confidential information and materials of the
Company, the other Member and their respective members and Affiliates, which
comprises confidential and proprietary information or data which is not readily
ascertainable by proper means and which derives economic value, actual or
potential, from not being generally known. All information regarding the
products or the business of the Company or other Members or their respective
members to which a Member may obtain access to under this Agreement shall be
deemed to be confidential and proprietary information or data of the Company or
other Member as applicable, unless such Member can show such information has
become generally known to the public other than as a result of a breach or
default of this Agreement. Any such information or materials are “Confidential,”
and each Member agrees not to use or disclose such information except in
accordance with the terms of this Agreement. Each Member further agrees to
maintain Confidential information of the Company and of other Members in
confidence and limit disclosure on a need to know basis, to take all reasonable
precautions to prevent unauthorized disclosure, and to treat such information at
least as much care as it treats its own information of a similar nature, until
the information becomes publicly available through no fault of the nondisclosing
party. All Members shall keep confidential and not disclose to, discuss with or
otherwise make available to any Person any Confidential information of the
Company and of other Members, except to any affiliates, shareholders,
principals, officers, employees, agents, attorneys, potential investors,
advisors, lenders, consultants, suppliers or other persons acting for or on
behalf of any Member or the Company (“Representatives”) on a “need-to-know”
basis to the extent the assistance of Representatives is required in connection
with the purposes of the Company. If disclosure is required by applicable law,
rule, or regulation, or is compelled by a court or governmental agency,
authority, or body: (i) the parties shall use all legitimate and legal means
available to minimize the disclosure to third parties, including without
limitation seeking a confidential treatment request or protective order;
(ii) the Member compelled to make the disclosure shall inform the Company and
the other Member at least ten (10) business days (i.e., not a Saturday, Sunday,
or a day on which banks are not open for business in the geographic area in
which the non-disclosing party’s principal office is located) in advance of the
disclosure; and (iii) the Member compelled to make disclosure shall give the
Company or the other Member, as the case may be, a reasonable opportunity to
review and comment upon the disclosure, and any request for confidential
treatment or a protective order pertaining thereto, prior to making such
disclosure. Moreover, no press release or other information release shall be
made by the Company or any Member without the prior approval

 

[***] Confidential treatment requested. Omitted portions have been filed
separately with the Securities and Exchange Commission.

 

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and consent of the Members.

 

1.9.4 Enforcement. The Company and each Member recognizes that irreparable harm
and damage will result to the affected party in the event of any breach by any
Member or the Company of any of the covenants contained in this Agreement
relating to confidentiality. The Company and each Member agrees to use
commercially reasonable efforts to obtain an executed confidentiality agreement
from any Representatives in accordance with Section 1.9.3 prior to the
disclosure of any Confidential information to such Representatives. The Company
and each Member agrees that, in the event of such a breach and in addition to
any other legal or equitable remedies to which the affected party may be
entitled or which may be available, the affected party will be entitled to an
injunction from a court of law to restrain the violation of those covenants by
the Company or Member and all other Persons acting for or with such party, to
damages or to both an injunction and damages. The Company and each Member
further agree that, in the event an affected party brings an action for the
enforcement of those covenants, and if the court finds any part of the covenants
unreasonable as to time, area, or activity covered, the disclosing party agrees
to abide by any finding, judgment or decree of the court as to what is
reasonable and the disclosing party agrees that the affect party may enforce
this Agreement to the extent of such finding, judgment or decree. The Company
and each Member further acknowledges that the provisions of this Section 1.9
shall survive the termination of this Agreement, and shall continue thereafter
in full force and effect in accordance with the terms of this Section 1.9.

 

1.9.5 Acknowledgment of Reasonableness. The Members hereby expressly
acknowledge, represent and warrant that they are sophisticated investors, they
understand the terms, conditions and waivers set forth in this Section 1.9, and
that the provisions of this Section 1.9 are reasonable, taking into account the
relative sophistication and bargaining position of the Members.

 

SECTION 2. MEMBERS; MANAGER; PROFITS INTERESTS; CAPITAL CONTRIBUTIONS; LOANS

 

2.1           Members and Manager. The name and address of the Manager and each
Member are set forth on Exhibit A. In addition to being a Member of the Company,
WIN is also the initial Manager of the Company.

 

2.2           Profits Interests. The Members’ Profits Interests in the Company
shall be as set forth on Exhibit A, and are subject to adjustment as provided in
this Agreement.

 

2.3           Initial Capital Contributions. The Members shall make the
contributions to the Company set forth opposite their names on Exhibit A within
15 calendar days of the Effective Date.

 

2.4           Additional Capital Contributions. If, during the term of the
Company, funds available to the Company (including any borrowings) are
insufficient for the Company to carry out its purposes hereunder, the Manager
may send a written request to each Member and each Member shall contribute
within 15 days following such written request their pro rata share (based on
their then existing profits interest) of the funds needed for the Company to
carry out its purposes hereunder Rich Dad’s capital contribution shall be based
on the following percentage split: Rich Dad 45%, WIN 55%.

 

[***] Confidential treatment requested. Omitted portions have been filed
separately with the Securities and Exchange Commission.

 

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2.5           Limitations Pertaining to Capital Contributions.

 

2.5.1 Return of Capital. Except as otherwise provided in this Agreement, no
Member shall withdraw any Capital Contributions or any money or other property
from the Company without the written consent of each other Member. Except as
otherwise may be provided for in this Agreement, under circumstances requiring a
return of any Capital Contributions, no Member shall have the right to receive
property other than cash, unless otherwise specifically agreed to in writing by
the Members at the time of such distribution.

 

2.5.2 No Interest or Salary. No Member shall receive any interest, salary or
drawing with respect to its Capital Contributions or its Capital Account or for
services rendered on behalf of the Company or otherwise in its capacity as the
Manager or as a Member, except as otherwise expressly provided in this
Agreement.

 

2.5.3 Liability of Members. Except as agreed upon in writings signed by the
Members, no Member shall be liable for the debts, liabilities, contracts or any
other obligations of the Company. Except as agreed upon in writings signed by
the Members, and except as otherwise provided by the Act or by any other
applicable state law, the Members shall be liable only to make their Capital
Contributions as provided in Sections 2.3 and 2.4 hereof and no Member shall be
required to make any other Capital Contributions or to loan any amounts to the
Company. No Member shall have any personal liability for the repayment of the
Capital Contributions or loans of any other Member, unless agreed upon in
writing.

 

2.5.4 No Third Party Rights. Nothing contained in this Agreement is intended or
will be deemed to benefit any creditor of the Company, and no creditor of the
Company will be entitled to require the Manager or any Member to solicit or
demand Additional Capital Contributions.

 

2.5.5 Withdrawal. Except as provided in Section 8 hereof, no Member may withdraw
from the Company or terminate its interest therein without the prior written
consent of each other Member, except a member may withdraw if a License
Agreement from such Member to the Company is terminated for any reason. Any
Member who withdraws from the Company in breach of this Section 2.5.5:

 

2.5.5.1               shall be treated as an assignee of a Member’s interest, as
provided in the Act;

 

2.5.5.2               shall have no right to participate in the business and
affairs of the Company or to exercise any rights of a Member under this
Agreement or the Act; and

 

2.5.5.3 shall, subject to Section 8.5 hereof, continue to share in distributions
from the Company, on the same basis as if such Member had not withdrawn,
provided that any damages to the Company as a result of such withdrawal shall be
offset against amounts that would otherwise be distributed to such Member. The
right to share in distributions granted under this Section 2.5.5 shall be in
lieu of any right the withdrawn Member may have under the Act to receive a
distribution or payment of the fair value of the Member’s interest in the
Company.

 

[***] Confidential treatment requested. Omitted portions have been filed
separately with the Securities and Exchange Commission.

 

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2.6           Failure to Contribute.

 

2.6.1 Remedy for Failure to Contribute Capital Contributions. If any Member
fails to fund its Initial Capital Contributions or Additional Capital
Contributions when due, then the contributing Member shall have the right to
either (a) cause an adjustment in the Members’ Profits Interests to the equal of
the overall percentage of contributions made by each party over the course of
the previous twelve months; or (b) initiate the buy-out provisions set forth in
Section 8.8 below.

 

2.6.2 Treatment of Distributions. Upon a change in the Members’ Profits
Interests as described in Section 2.6.1, all future distributions of the Company
occurring after such date shall be in accordance with the Members’ adjusted
Profits Interests.

 

2.7           Member Loans. With the consent of the Manager, any Member may make
loans (“Member Loans”) to the Company to pay Approved Expenses. Unless otherwise
approved in writing by the Manager at the time of a Member Loan, (a) each Member
Loan shall bear simple noncompounded) interest at the Prime Rate per annum
(provided that any Wyoming laws limiting the rate of interest that may be
legally charged with respect to a Member Loan shall be taken into account and,
if applicable, the rate of interest charged on the Member Loan shall be reduced
to the maximum rate of interest permitted by such laws), and shall be repaid
solely from the Company’s Net Cash Flow, prior to any distributions to the
Members pursuant to Sections 3.1 or 9 hereof, and (b) all payments on Member
Loans shall be applied first to repay interest on all Member Loans, in
proportion to the unpaid interest outstanding on all such Member Loans, and then
to repay principal on all Member Loans, in proportion to the unpaid principal
outstanding on all such Member Loans. No Member shall be required to make a
Member Loan, unless that Member has agreed in writing to make such Member Loan
and no Member shall have any obligation to repay the Member Loans of any other
Member or to make Additional Capital Contributions to the Company to provide it
with funds with which to repay Member Loans. Each Member shall have the right to
fund its pro rata share, based on the Member’s Profits Interest, of any Member
Loan pursuant to this Section 2.7.

 

2.8           ***

 

2.8.1 ***

 

2.8.2 ***

 

2.8.3 ***

 

2.8.4 ***

 

2.9           Product and Materials.

 

2.9.1 Promptly following the Effective Date, the Members shall review the WIN
Materials for the purpose of determining which Materials shall be used by the
Company in the Business. In consideration for the license rights granted by Rich
Dad to the Company pursuant to the Rich Dad License Agreement, Rich Dad shall
have editorial and educational approval rights pursuant to the terms and
conditions set forth in the Rich Dad License

 

[***] Confidential treatment requested. Omitted portions have been filed
separately with the Securities and Exchange Commission.

 

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Agreement with respect to the selection of WIN Materials and any other related
materials for use by the Company.

 

2.9.2  Within 15 days of the Effective Date, Rich Dad and the Company shall
enter into the Rich Dad License Agreement.

 

2.9.3  Within 15 days of the Effective Date, WIN and the Company shall enter
into the WIN License Agreement.

 

SECTION 3. DISTRIBUTIONS

 

3.1           Distributions. Except as provided in Section 9 hereof or as
otherwise provided below, and subject to the provisions of Section 2.7 hereof,
distributions of Net Cash Flow, if available, shall be made to the Members on a
quarterly basis in the following order of priority:

 

3.1.1        First, to the extent of Net Cash Flow, the Manager shall make
periodic cash distributions from Net Cash Flow to each Member. Notwithstanding
the above, no distribution shall be made until the Company has accumulated 90
days of working capital, and provided that, unless agreed to in writing by the
Members, mandatory distributions shall be from funds accumulated in excess of
the 90 days of working capital.

 

3.1.2        Second, to the Members in proportion to their respective Unreturned
Capital Contributions, until each Member’s Unreturned Capital Contribution has
been reduced to zero; and

 

3.1.3       The balance, to the Members in proportion to their Profits
Interests.

 

SECTION 4. TAX ALLOCATIONS

 

4.1          Allocation of Profits and Loss. (not used)

 

4.2          Limitation on Allocation of Losses. (not used)

 

4.3           Qualified Income Offset. If any Member unexpectedly receives any
adjustments, allocation or distributions described in clauses (4), (5) or (6) of
Regulations Section 1.704-1(b)(2)(ii)(d), items of Company income shall be
specially allocated to such Member in an amount and manner sufficient to
eliminate the Adjusted Capital Account Deficit created by such adjustments,
allocations or distributions as quickly as possible. This Section 4.3 is
intended to constitute a “qualified income offset” within the meaning of
Regulations Section 1.7041(b)(2)(ii)(d)(3).

 

4.4           Minimum Gain Chargeback. If there is a net decrease in Company
Minimum Gain during a Fiscal Year, each Member will be allocated, before any
other allocation under this Section 4, items of income and gain for such fiscal
year (and if necessary, subsequent years) in proportion to and to the extent of
an amount equal to such Member’s share of the net decrease in Company Minimum
Gain determined in accordance with Regulations Section 1.7042(g)(2). This
Section 4.4 is intended to comply with, and shall be interpreted

 

[***] Confidential treatment requested. Omitted portions have been filed
separately with the Securities and Exchange Commission.

 

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consistently with, the “minimum gain chargeback” provisions of Regulations
Section 1.704-2(f).

 

4.5           Member Nonrecourse Debt Minimum Gain Chargeback. Notwithstanding
any other provision of this Section 4, except Section 4.4 hereof, if there is a
net decrease in Member Nonrecourse Debt Minimum Gain attributable to a Member
Nonrecourse Debt during any Fiscal Year of the Company, each Member who has a
share of the Member Nonrecourse Debt, determined in accordance with Regulations
Section 1.704-2(i)(5), shall be specially allocated items of Company income and
gain for such year (and, if necessary, subsequent years) in an amount equal such
Member’s share of the net decrease in Member Nonrecourse Debt Minimum Gain
attributable to such Member Nonrecourse Debt, determined in accordance with
Regulations Section 1.704-2(i)(4). Allocations pursuant to the previous 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 Regulations Section 1.704-2(i)(4). This
Section 4.5 is intended to comply with a minimum gain chargeback requirement of
that Section of the Regulations and shall be interpreted consistently therewith.

 

4.6           Nonrecourse Deductions. (not used)

 

4.7           Member Nonrecourse Deductions. (not used)

 

4.8           Special Allocations. Any special allocations of items of gain,
income, loss, or deduction pursuant to this Section 4 shall be taken into
account in computing subsequent allocations of Profits or Losses or items
thereof pursuant to this Section 4 so that the net amount of any items so
allocated and the gain, loss and any other item allocated to each Member
pursuant to this Agreement shall, to the extent possible, be equal to the net
amount that would have been allocated to each such Member pursuant to the
provisions of this Section 4 if such special allocations had not occurred.

 

4.9           Fees To Members Or Affiliates. Notwithstanding the provisions of
this Section 4, in the event that any fees, interest, or other amounts paid to
any Member or any Affiliate thereof pursuant to this Agreement or any other
agreement between the Company and any Member or Affiliate thereof providing for
the payment of such amount, and deducted by the Company in reliance on
Section 707(a) and/or 707(c) of the Code, are disallowed as deductions to the
Company on its federal income tax return and are treated as Company
distributions, then:

 

4.9.1 the Profits or Losses, as the case may be, for the fiscal year in which
such fees, interest, or other amounts were paid shall be increased or decreased,
as the case may be, by the amount of such fees, interest, or other amounts that
are treated as Company distributions; and

 

4.9.2 there shall be allocated to the Member to which (or to whose Affiliate)
such fees, interest, or other amounts were paid, prior to the allocations
pursuant to Section 4.1 hereof, an amount of items of gross income or expense
for the fiscal year equal to the amount of such fees, interest, or other amounts
that are treated as Company distributions.

 

4.10         Code Section 704(c). In accordance with Code Section 704(c) and the

 

[***] Confidential treatment requested. Omitted portions have been filed
separately with the Securities and Exchange Commission.

 

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Regulations thereunder, income, gain, loss and deduction with respect to any
property contributed to the capital of the Company shall, solely for tax
purposes, be allocated among the Members by the Manager so as to take account of
any variation between the adjusted basis of such property to the Company for
federal income tax purposes and its fair market value as agreed to by the
Manager and the contributing Member using any method approved of under the Code,
Regulations, or any other IRS issuance.

 

SECTION 5. MANAGEMENT

 

5.1                     Management of Company.

 

5.1.1 General. Except as specifically provided in Sections 5.4, 5.5 and 5.11
hereof, the right to manage, control and conduct the business and affairs of the
Company shall be vested solely in the Manager. Subject to the provisions of
Sections 2.9, 5.4, 5.5 and 5.11, the Manager shall be responsible for conducting
the daily business affairs of the Company, for making the day-to-day operating
decisions in carrying out the purposes, objectives and policies established by
this Agreement and the Members, and for implementing all Approved Business Plans
and Approved Budgets adopted pursuant to the terms of this Agreement. The
Manager shall devote such time to the Company and its business as is appropriate
to carry out the Manager’s responsibilities hereunder, but shall not be
obligated to devote its full time efforts to the Company. Subject to the terms
of the Approved Business Plans and Approved Budgets, the Manager (exercising
such skill and care as a prudent person with experience in the Business would
exercise in dealing with its own property), shall have the rights and the duties
to exert commercially reasonable efforts in a prompt, courteous and businesslike
manner to do, accomplish and complete, in accordance with this Agreement, all of
the following:

 

5.1.1.1 Borrow money in the name of the Company on terms and conditions set
forth in the Approved Business Plan then in effect or otherwise as approved by
all the Members;

 

5.1.1.2 Implement, using the Manager’s commercially reasonable efforts and
subject to 5.5, the Approved Business Plan, and in connection therewith,
undertake each and every act on behalf of the Company as deemed necessary by the
Manager to implement the purposes of the Company, pursuant to authority
delegated to the Manager pursuant to this Section 5.1;

 

5.1.1.3 Engage and supervise, at the Manager’s expenses, such officers,
assistants, employees, sales personnel, contractors, accountants, attorneys,
operations staff, and other persons necessary or appropriate to carry out the
business of the Company and to maintain the books of account and other records
and to produce the reports required by the terms of this Agreement;

 

5.1.1.4 Monitor the Company’s activities and use commercially reasonable efforts
to ensure that the Company maintains adequate insurance with respect to its
operations and assets and not (i) commit or permit others to commit any waste on
or of such assets, or (ii) make any change in the use of the assets that will in
any way increase the risk of fire or other hazard arising out of the use or
operation of such assets;

 

5.1.1.5 Pay, at the expense of the Company and to the extent funds of

 

[***] Confidential treatment requested. Omitted portions have been filed
separately with the Securities and Exchange Commission.

 

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the Company are available, all bills and expenses of the Company in accordance
with the Approved Budgets;

 

5.1.1.6  Cause all books of account and other records of the Company to be kept
in accordance with the terms of this Agreement;

 

5.1.1.7  Prepare and deliver to each Member all reports required by the terms of
this Agreement and as requested from time to time by the Company or any Member;

 

5.1.1.8 Maintain all funds of the Company in a Company account in a bank or
banks located in Lee County, Florida or any other location as agreed upon by the
Members, and be the signatory to such accounts;

 

5.1.1.9  Make distributions periodically to the Members in accordance with the
provisions of this Agreement;

 

5.1.1.10 Undertake such actions as are necessary or desirable in order that the
Company promptly complies with all material present and future laws, ordinances,
orders, rules, regulations and requirements of all governmental authorities
having jurisdiction which may be applicable to the Company, its assets, and the
operations and management of the Company; and

 

5.1.1.11 Provide such other administrative and operational assistance as
required from time to time by the Company with respect to the following
departmental activities of the Company: legal, accounting and finance, booking,
confirmations, education. facilities maintenance, human resources, information
technologies, marketing, operations, sales and shipping;

 

5.1.1.12 Supervision and direction of the general operations of the departments
listed in Section 5.1.1.11 and operate such departments efficiently and with
proper economy;

 

5.1.1.13  Develop internal policies necessary for maximizing the Company’s net
income;

 

5.1.1.15  Take such activities as are reasonably necessary to stimulate and
facilitate the general business of the Company; and

 

5.1.1.16 Perform all other duties otherwise described in this Agreement to he
carried out by the Manager and take all actions reasonably deemed necessary to
carry out any of the above rights and duties.

 

5.1.2 Designation of Manager. WIN is the initial Manager of the Company. Any
Person then serving as Manager (whether WIN or a successor Manager) may be
removed for “cause,” which shall mean and be limited to a default by the Manager
under this Agreement or engaging in acts constituting fraud, gross negligence or
willful misconduct, unless in the case of a default, the Manager cures such
default within 30 days after receipt of notice of default (a “Notice of
Default”) from any Member specifying in reasonable detail the facts and
circumstances of such default, or (ii) in the case of a default, the Manager in
good faith commences to cure the default within 30 days following the Manager’s
receipt of the

 

[***] Confidential treatment requested. Omitted portions have been filed
separately with the Securities and Exchange Commission.

 

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Notice of Default and thereafter prosecutes to completion with diligence and
continuity the curing thereof and cures such default within a reasonable period
of time. With respect to matters involving fraud, gross negligence or willful
misconduct, the Manager shall have no cure period. If the Manager disputes that
“cause” exists under the preceding sentences, it shall promptly so advise the
Members in writing and the determination of whether “cause” exists shall be made
through the procedure described in Section 5.7. During the pendency of the
dispute resolution process, the 30-day cure period shall be shall be tolled
pending the outcome thereof, and if “cause” is determined to exist, such cure
period shall commence upon the date of such determination. Upon the removal of a
Manager, a replacement Manager may be designated only upon the unanimous written
approval of the Members. At any time during the term of the Company when there
is no Manager, management of the Company shall revert to the Members. Nothing in
this Section 5.1.2 shall be construed to affect the rights and remedies of the
other Members under Section 2.6 if the Manager fails to make Additional Capital
Contributions as and when required under this Agreement.

 

5.1.3 Signature Power of Manager. The Manager, acting alone and without the
joinder of any other Member, shall have the power to execute and deliver
documents and instruments of every type and nature on behalf of the Company,
which shall be binding on the Company. Any Person dealing with the Company may
rely, without further inquiry, upon the identity of the Manager set forth in the
Company’s Certificate at the time action is taken by or on behalf of the Company
by the Manager, and may rely on a certificate signed by the Manager as to the
existence or nonexistence of any fact or facts which constitute a condition
precedent to acts by the Manager or which are in any other manner germane to the
affairs of the Company.

 

5.1.4 Delegation of Authority to Officers. Subject to the approval of the
Members, the Manager may designate one or more Persons, including its
Affiliates, as officers of the Company. The officers shall have the authority to
act for and bind the Company, to the extent of the authority granted to them by
the Members. The officers of the Company may include a chairman, chief executive
officer, president, vice presidents, a secretary and such other officers as the
Manager deems appropriate in the exercise of its discretion. The officers of the
Company will not be entitled to compensation for their services except in
accordance with an Approved Budget.

 

5.1.5 Insurance. The Manager shall purchase and maintain or cause to be
purchased and maintained for and at the expense of the Company policies of
insurance for the Company’s operations, for protection of the Company’s assets,
as may be reasonably required to comply with third party requirements, and as
the Members’ agree in the Approved Business Plan. The liability of the Manager
shall be limited, and the Manager shall be indemnified for its acts, to the
extent provided in Section 5.8 hereof. At the request of the Manager, the
Company shall procure at the Company’s sole expense (as an Approved Expense)
errors and omissions insurance coverage for the Manager and insurance to fund
the indemnification described in Section 5.8 hereof, with policy limits and for
risks reasonably acceptable to the Manager.

 

5.2 Submission and Approval of Business Plan. Within 15 days following the
Effective Date, the Manager shall prepare and submit to the Members for review
and approval in accordance with Section 5.4 hereof an overall proposed plan (the
“Business Plan”) for the development and operation of the Business. The Manager
may from time to

 

[***] Confidential treatment requested. Omitted portions have been filed
separately with the Securities and Exchange Commission.

 

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time submit revisions or modifications to the Business Plan to the Members for
approval in the same manner; provided that the Manager shall submit annually an
updated Business Plan containing such revisions and modifications as may be
needed for approval by the Members not later than November 1 of the year
preceding the year covered by the proposed Business Plan, and the Members shall
approve the updated Business Plan by December 1 of each year in accordance with
the provisions of Section 5.4. The Business Plan, including modifications
thereto, approved by the Members shall be termed the “Approved Business Plan.”

 

5.3 Budgets. In furtherance of the Business Plan, the Manager shall have
prepared and attached hereto as Exhibit B (the “Initial Operating Budget”) an
operating budget for the remainder of 2006, which shall have been approved by
the Members. From time to time during the development and operation of the
Business, the Manager shall prepare and present for the approval of the Members
in accordance with Section 5.4 a separate annual budget for the Business (each,
a “Budget”). The Manager shall update all outstanding Budgets, including the
annual operating budget, and present such Budgets for approval by the Members
not later than November 1 of the year preceding the year covered by the proposed
Budget, and the Members shall approve the updated Budgets, including the annual
operating budget by December 1 of each year in accordance with the provisions of
Section 5.4. Budgets shall include a reasonable contingency reserve for
unanticipated costs associated with the matters covered thereby. The Manager may
from time to time submit revisions or modifications to Budgets to the Members
for approval; provided that no revisions or modifications shall be implemented
unless approved in accordance with Section 5.4 hereof. The Initial Operating
Budget and each other Budget, including any revisions thereto, which is approved
separately or as part of a Business Plan in accordance with Section 5.4 hereof,
shall be termed an “Approved Budget.” Specific expenditures to develop and
operate the Business may be made only pursuant to an Approved Budget; provided
that the Manager shall have discretion to use contingency reserves included in
any Approved Budget in any reasonable manner and shall be permitted to make
reasonable adjustments between line items reflected on an Approved Budget if the
expenses intended to be paid pursuant to the line item from which funds are
transferred are in fact incurred and paid (at a total cost less than budgeted)
and the items on which the transferred funds are expended were included among
the items set forth in the Approved Budget (and were incurred at a cost greater
than budgeted). Notwithstanding the foregoing, any increase in excess of ten
percent (10%) in any individual line item in an Approved Budget that also
exceeds $100,000 shall require the approval of the Members. All expense items
identified in the Company’s Approved Budget from time to time shall constitute
“Approved Expenses” of the Company. Until a Budget is otherwise modified as
provided in this Agreement, each Budget shall remain in effect subject to
modifications required by an increases in Non-Discretionary Expenditures in
order to avoid a material adverse change to the financial condition or assets of
the Company. Non-Discretionary Expenditures shall be deemed Approved Expenses
until one Member or the other disapproves of such expenditures. The Manager
shall inform the Members within a reasonable time of any incurrence of a
Non-discretionary Expenditure.

 

5.4 Mechanism for Obtaining Consents. The Manager may propose approval of a
Business Plan, Budgets and amendments thereto and other matters required to be
approved by the Members pursuant to this Agreement (except for those matters
indicated in Section 5.5) by giving notice thereof to each Member. Where the
Manager is required to obtain Member consent pursuant to Section 5.5, the
procedure set forth in 5.5.29 shall apply and not

 

[***] Confidential treatment requested. Omitted portions have been filed
separately with the Securities and Exchange Commission.

 

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this Section 5.4. The Members shall cooperate in good faith to reach mutual
agreement on all matters submitted for the approval of the Members within 30
days of their submission to the Members. All matters submitted for approval by
the Members shall require the affirmative approval of all the Members.

 

5.5  Major Decisions. Notwithstanding any provision of this Agreement to the
contrary, the following matters shall require the consent of all Members, which
may be withheld in the sole and absolute discretion of each Member.

 

5.5.1                        Any amendment to this Agreement;

 

5.5.2                        Requesting for approval all or any part of a
Business Plan in a manner that is inconsistent with this Agreement;

 

5.5.3                        An act which is outside the scope of the Company’s
Core Activities;

 

5.5.4                        The dissolution of the Company pursuant to
Section 9.1.3 hereof,

 

5.5.5                        Admission of any new Member to the Company;

 

5.5.6                        Filing a voluntary petition on behalf of the
Company seeking protection under the United States Bankruptcy Code or debtor
relief or insolvency laws of any jurisdiction;

 

5.5.7                        Acquiring by lease, purchase assets exceeding
$5,000 other than those described in the Business Plan or in this or other
Agreements as may be entered into by the Members from time to time;

 

5.5.8                        Any call for Additional Capital Contributions in
excess of an Approved Budget unless they are: (i) any Non-Discretionary
Expenditures, (ii) any expense paid in an Emergency Situation, (iii) any other
Approved Expenses, and (iv) the permitted variances to an Approved Budget as
described in Section 5.3 hereof or as otherwise permitted herein;

 

5.5.9                        Except as set forth in Section 5.9, entering into
any contracts between the Company and any Member, Manager or Affiliate.

 

5.5.10                      Selling, conveying, exchanging, leasing, pledging,
hypothecating, encumbering or otherwise transferring all or any portion of the
assets of the Company;

 

5.5.11                      Except for Member Loans permitted by Section 2.7 and

 

[***] Confidential treatment requested. Omitted portions have been filed
separately with the Securities and Exchange Commission.

 

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5.1.1, borrowing or incurring any indebtedness on behalf of the Company, making
or delivering on behalf of the Company any indemnity bond or surety bond,
lending funds belonging to the Company to any Member or its Affiliate or to any
third party, or extending credit on behalf of the Company to any person, or
obligating the Company or another Member as a surety, guarantor, or
accommodation party to any obligation, or granting any lien or encumbrance on
the assets of the Company, including, without limitation, any modification of
any of the foregoing, unless in accordance with the Member Loans permitted by
Section 2.7 hereof;

 

5.5.12                      The Manager delegating any of its duties set forth
herein other than to its directors, officers, employees and any contractors,
agents or consultants engaged by the Company in accordance with the Approved
Business Plan;

 

5.5.13                      Possessing, assigning, or using funds or other
property of the Company for other than a Company purpose;

 

5.5.14                      Making, executing or delivering on behalf of the
Company an assignment for the benefit of creditors; causing the Company, a
Member’s Company interest or any part thereof or interest therein to be subject
to the authority of any trustee, custodian or receiver or to be subject to any
proceedings for bankruptcy, insolvency. reorganization, arrangement,
readjustment of debt, relief of debtors, dissolution or liquidation or similar
proceedings;

 

5.5.15                      Partitioning all or any portion of the assets of the
Company, or filing any complaint or institute any proceeding at law or in equity
seeking such partition;

 

5.5.16                      Confessing a judgment against the Company; settling
or adjusting any claims against the Company; or commencing, negotiating and
settling any legal actions or proceedings brought by the Company against
unaffiliated third parties in excess of $100,000;

 

5.5.17                      The recapitalization, equity splitting or any
similar transaction of or with respect to the Company, or the issuance of any
equity interest, debentures or other securities of or in the Company or the
issuance of any options, warrants or rights to purchase or acquire or effectuate
any of the foregoing;

 

5.5.18                      Doing any act that would make it impossible to carry
on the Business;

 

[***] Confidential treatment requested. Omitted portions have been filed
separately with the Securities and Exchange Commission.

 

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5.5.19                      Entering into any contracts between the Company and
any Member, Manager or Affiliate, except as provided in the Approved Business
Plan or Section 5.9 hereof;

 

5.5.20                      Executing any bond in the Company’s name, except in
the ordinary course of business;

 

5.5.21                      Making loans on behalf of the Company or causing the
Company to guarantee the obligations of others;

 

5.5.22                      Pledging or encumbering any Company asset as
security for an obligation of a Member or any Affiliate of a Member;

 

5.5.23                      Commingling any Company funds or capital with the
funds of any other person;

 

5.5.24                      Accepting voluntary Capital Contributions from any
Member without first offering each Member the opportunity to make a pro-rata
share of any such voluntary Capital Contributions, based on that Member’s
Profits Interest in the Company;

 

5.5.25                      Entering into one or more partnerships, joint
ventures, limited liability companies or other business associations between the
Company and other Persons, except as described in an Approved Business Plan;

 

5.5.26                      Except as provided in this Agreement, dissolving,
terminating or liquidating the Company prior to the occurrence of an event
described in Section 9.1,

 

5.5.27                      Taking any action inconsistent with the Approved
Business Plan;

 

5.5.28                      Engaging or changing the Company’s independent
accountants; or

 

5.5.29                      Taking any other action with this Agreement
specifically requires to be agreed upon by all members under the Act (unless
this Agreement supersedes such rights)

 

The Manager shall seek the consent required by this Section 5.5 by delivering
reasonably detailed written notice of the matter(s) requiring such consent to
each Member in any manner reasonably designed to reach the Member, including via
electronic mail, or in the matter set forth in Section 11. 1. Each Member shall
have 15 days from the receipt of such notice to advise the Manager of its
decision(s) regarding such matter(s). A Member’s failure to respond to such
consent request within such 15 day period shall be deemed to be an affirmative
vote

 

[***] Confidential treatment requested. Omitted portions have been filed
separately with the Securities and Exchange Commission.

 

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with respect to the matter(s) subject to such consent request.

 

5.6                         In providing the services hereunder, the Manager
shall not at any time do or cause to be done any act or thing or make or cause
to be any omission that would:

 

(a) tend to impair or damage the goodwill associated with any trademarks or
service marks used by the Company, whether such marks are owned by the Company
or used under license from a third party;

 

(b) contest or in any way impair or tend to impair any part of the licensor’s
right, title and interest in trademarks or service marks used by the Company
under license from a third party; or

 

(c) violate or infringe any right of privacy or publicity, copyright, or
trademark or constitute defamatory, obscene, or unlawful matter, or otherwise
violate or infringe any personal or propriety rights of any person, firm or
corporation; or

 

(d)            violate or breach any license agreement to the Company from a
Member.

 

5.7                         Dispute Resolution.

 

5.7.1 Initial Dispute Resolution. It is the Parties’ desire that any disputes
that might arise between them be amicably settled, without resort to litigation,
and the Parties will attempt to settle any such disputes through consultation
and negotiation in good faith and in a spirit of mutual cooperation. All
disputes or disagreements arising between the Parties, out of or relating to
this Agreement, that cannot be resolved by the involved employees of the
Parties, shall be brought before a conciliation committee, consisting of one
management executive from each Party. The executives shall be of at least vice
presidential level, and with the authority to bind the Parties. The conciliation
committee shall, within fifteen (15) days after a written request from either
Party, meet in person (or telephonically, if agreeable to both Parties) and
attempt to work out a settlement. Such meeting shall be held at the facility of
the nonrequesting Party, or such other location as mutually agreed upon by the
Parties

 

5.7.2 Litigation. If, after complying with the requirements of 5.7.1, no
resolution is reached; either Party may initiate litigation proceedings. The
parties agree that any claims arising from or in connection with the subject
matter of this Agreement must be brought in (i) the state or federal courts in
and for Lee, Palm Beach or Broward Counties, Florida, if an action is commenced
by Rich Dad or (ii) the state of federal courts in Arizona if an action is
commenced by WIN. The parties further waive the right and hereby agree not to
assert by way of motion, as a defense or otherwise in any action, suit or other
legal proceeding brought in any such court, any claim that it, he or she is not
subject to the jurisdiction of such court, that such action, suit or proceeding
is brought in an inconvenient forum or that the venue of such action, suit or
proceeding is improper. Each party irrevocably and unconditionally consents to
the service of any process, pleadings, notices or other papers in a manner
permitted by the rules of the state and federal courts serving the respective
lawsuit. The prevailing party shall be entitled to reasonable attorneys’ fees
and costs.

 

[***] Confidential treatment requested. Omitted portions have been filed
separately with the Securities and Exchange Commission.

 

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5.8           Limitations on Liability; Indemnity. No Member (including the
Manager) or its Affiliates or their members, officers, directors, partners,
stockholders, employees, contractors, advisors or consultant (each an
“Indemnitee”) shall be liable to the Company or the other Members for actions
taken in good faith by the Indemnitee in connection with the Company or its
business. The Company, its receiver or trustee shall indemnify, defend and hold
harmless each Indemnitee, to the extent of the Company’s assets (without any
obligation of any Member to make contributions to the Company to fulfill such
indemnity), from and against any liability, damage, cost, expense, loss, claim
or judgment incurred by the Indemnitee arising out of any claim based upon acts
performed or omitted to be performed by the Indemnitee in connection with the
business of the Company, including without limitation attorneys’ fees and costs
incurred by the Indemnitee in the settlement or defense of such claim; provided
that no Indemnitee shall be indemnified for claims based upon acts performed or
omitted in an intentional breach of this Agreement or which constitute fraud,
willful misconduct or gross negligence. Notwithstanding anything in this
Section 5.8 to the contrary, the Manager shall not be entitled to
indemnification with respect to the matters set forth in Section 5.6.

 

5.9                      Compensation.

 

5.9.1 ***

 

5.9.2 Reimbursement of Expenses of the Manager. The Manager shall be entitled to
reimbursement from the Company for all reasonable out of pocket costs and
expenses paid to third parties in connection with the performance of its duties
hereunder, including all actual and necessary direct expenses incurred by the
Manager for legal, accounting, auditing and similar services (whether rendered
by Affiliates of the Manager or otherwise). For purposes of clarification, such
expenses shall not include any payments made to affiliates of WIN, the salaries
of any employee of WIN or Affiliates of WIN (other than reasonable direct
compensation to seminar leaders) or any overhead expenses of WIN or Affiliates
of WIN, which amounts shall be paid by the Manager outside of the fees pursuant
to Section 5.9.1. The total amount reimbursable to the Manager for any period
shall be set forth in the Company’s Approved Budget for such period, and shall
be identified as a separate line item in such Approved Budget (i.e., the
Approved Budget shall include a line item stating “amounts reimbursable to
Manager”). No specific allocation of reimbursements to the Manager will be
included in the Approved Budget (i.e., the line item will be an aggregate number
for all reimbursements), but amounts actually paid or reimbursed to the Manager
or its Affiliates pursuant to this Section 5.9.1 will be reported to the Members
in accordance with Section 6.3 The Members shall have the right to object to the
amount of reimbursements paid or payable to the Manager or its Affiliates (in
connection with the adoption of the Approved Budget or revisions or
modifications thereto and following delivery of the reports required under
Section 6.3, regardless of whether a Budget may be an Approved Budget), on the
basis that the amounts paid or payable to the Manager failed to satisfy the
requirements of this Section 5.92, but the Members shall have no right to object
to the Manager’s right to receive reimbursements which actually satisfy the
requirements of this Section 5.9.2.

 

5.9.3 Limitation. Except as set forth in this Section 5.9, the Manager and the
Members shall not receive any reimbursements, fees or other compensation unless
unanimously agreed from time to time by the Members. Approval of the budget,
however,

 

[***] Confidential treatment requested. Omitted portions have been filed
separately with the Securities and Exchange Commission.

 

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constitutes default approval of any of the aforementioned, if applicable.

 

5.10                       Emergency Situations. Notwithstanding anything herein
to the contrary, if the Manager, in its commercially reasonable business
judgment, concludes that emergency repairs, replacements or other actions
(including by way of example and limitation, the signing of documents) are
immediately necessary for the preservation or safety of persons or any portion
of the Business (individually or collectively, an “Emergency Situation”) and the
Manager after using reasonably diligent efforts is unable to consult with the
Members prior to taking any action, then the Manager may take said action
without the prior approval of the Members. If the Manager takes such action by
reason of an Emergency Situation, the Manager shall notify the Members in
writing as quickly as possible after taking the action, the reasons therefor and
the cost thereof.

 

SECTION 6. BOOKS, RECORDS, REPORTS AND ACCOUNTING

 

6.1 Records. The Manager shall keep or cause to be kept at the specified office
of the Company the following: (a) a current list of the full name and last known
business, residence or mailing address of each Member, (b) a copy of the initial
Certificate and all amendments thereto, (c) copies of all written operating
agreements, including this Agreement, and all amendments to the operating
agreements, including any prior written operating agreements, no longer in
effect, (d) copies of any written and signed promises by Members to make
Additional Capital Contributions or Member Loans to the Company, (e) copies of
the Company’s federal, state and local income tax returns and reports,
(f) copies of all prepared financial statements of the Company, and (g) minutes
of every meeting of the Members as well as any written consents of Members or
actions taken by Members without a meeting. Any such records maintained by the
Company may be kept on or be in the form of any information storage device, or
kept off site pursuant to arrangements with a suitable outside vendor
specializing in data and document storage, provided that the records so kept can
be obtained or are convertible into legible written form within a reasonable
period of time. Any Member or its designated representative shall have the
right, at any reasonable time, to have access to and inspect and copy the
contents of such books or records, which, upon request, shall be made available
to such Member at the Company’s specified office in Lee County, Florida.

 

6.2 Fiscal Year and Accounting. The fiscal year of the Company shall be the
calendar year. All amounts computed for the purposes of this Agreement and all
applicable questions concerning the rights of Members shall be determined using
the cash method of accounting. All decisions as to other accounting matters,
except as specifically provided to the contrary herein, shall be made by the
Manager.

 

6.3 Annual Reports. As soon as practicable, but in no event later than four
months after the close of each fiscal year, the Manager shall make available to
the Members as of the last day of that fiscal year reports containing unaudited
financial statements on an accrual basis (as determined by the Manager) of the
Company for the fiscal year, presented in accordance with generally accepted
accounting principles, including a balance sheet, a statement of income, a
statement of Members’ investment and a statement of cash flows.

 

6.4 Interim Reports. The Manager shall provide the Members with interim written
reports on a cash basis in such detail as the Members may reasonably require
setting out the

 

[***] Confidential treatment requested. Omitted portions have been filed
separately with the Securities and Exchange Commission.

 

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progress and status of the business of the Company. In addition, as soon as
practicable, but in no event later than 45 days after the close of each calendar
quarter, the Manager shall use its best efforts to furnish to the Members as of
the last day of that calendar quarter reports containing unaudited financial
statements of the Company for that calendar quarter, including a balance sheet
and statements of income and cash flows. The Manager also shall provide monthly
statements to the Members comparing actual Company expenses with those projected
on the then current Approved Budget.

 

6.5 Preparation of Tax Returns. The Manager shall arrange for the preparation
and timely filing of all returns of Company income, gains, deductions, losses
and other items necessary for federal and state income tax purposes and shall
cause to be furnished to the Members the tax information reasonably required for
federal and state income tax reporting purposes. The classification, realization
and recognition of income, gain, losses and deductions and other items, for
federal income tax purposes, shall be on that method of accounting as the
Manager shall determine in its reasonable discretion with the advice of the
Members and the Company’s independent accountants.

 

6.6 Tax Elections. The Manager may in its reasonable discretion determine, with
the advice of the Company’s independent accountants and in the best interests of
all Members, whether to make any available elections pursuant to the Code.

 

6.7 Tax Controversies. Subject to the provisions hereof, the Manager is
designated the “Tax Matters Partner” pursuant to the Code and is authorized and
required to represent the Company in connection with all examinations of the
Company’s affairs by tax authorities, including resulting administrative and
judicial proceedings, and to expend Company funds for professional services and
costs associated therewith. The Members agree to cooperate with the Manager and
to do or refrain from doing any or all things reasonably required by the Manager
to conduct those proceedings. The Manager agrees to promptly notify the Members
upon the receipt of any correspondence from any federal, state or local tax
authorities relating to any examination of the Company’s affairs. The Manager
shall be prohibited from entering into any settlement or arrangement in excess
of $5,000 on behalf of the Company with respect to any federal, state or local
tax authorities without the express written approval of the Members.

 

SECTION 7. AMENDMENTS

 

7.1   Amendments. This Agreement may not be amended, except by a written
instrument signed by the Manager and all Members.

 

SECTION 8. TRANSFER OF COMPANY INTERESTS; NEW MEMBERS

 

8.1 General. Except as otherwise set forth herein, no Member shall sell, assign,
pledge, hypothecate, encumber or otherwise voluntarily transfer by any means
whatever (“Transfer”) all or any portion of its interest in the Company (or
permit any Person directly or indirectly holding any interest in such Member
directly or indirectly to Transfer any part of such interest), except for
Transfers (a) approved in writing by all Members, or (b) permitted as described
in Sections 8.2, 8.7 and 8.8 hereof. A transferee of a Member’s interest in the
Company will be admitted as a Substituted Member only pursuant to Section 8.4
hereof, Any purported Transfer which does not comply with the provisions of this
Section 8 shall be void

 

[***] Confidential treatment requested. Omitted portions have been filed
separately with the Securities and Exchange Commission.

 

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and of no force or effect.

 

8.2 Permitted Transfers. A Member may transfer or assign its Company interest to
a Controlled Affiliate upon the consent of the other Member, which consent shall
not be unreasonably be withheld, conditioned or delayed. Notwithstanding any
language to the contrary herein, any changes in ownership of Member shall not
affect such Member’s status as “Member” for all purposes of this Agreement.
Further, a transferee of a Company interest permitted under this Section 8.2
shall automatically be a Substituted Member after such transfer or transfers if
such transferee assumes all the obligations of the transferor under this
Agreement and the transferor acknowledges that it is not relieved of its
financial obligations hereunder until 6 months after the date of the transfer.

 

8.3 Assignee of Member’s Interest. If, pursuant to a Transfer of an interest in
the Company by operation of law and without violation of Section 8.1 hereof (or
pursuant to a Transfer that the Company is required to recognize notwithstanding
any contrary provisions of this Agreement), a Person acquires an interest in the
Company, but is not admitted as a Substituted Member pursuant to Sections 8.4 or
8.5.9 hereof, then, subject to Section 8.5 hereof, such Person:

 

8.3.1        shall be treated as an assignee of a Member’s interest, as provided
in the Act;

 

8.3.2        shall have no right to participate in the business and affairs of
the Company or to exercise any rights of a Member under this Agreement or the
Act; and

 

8.3.3        shall share in distributions from the Company with respect to the
transferred interest, on the same basis as the transferring Member.

 

8.4           Substituted Members. Except as specifically provided in Sections
8.2 and 8.5.9 or elsewhere in this Agreement, no Person taking or acquiring, by
whatever means, the interest of any Member in the Company shall be admitted as a
substituted Member in the Company (a “Substituted Member”) without the written
consent of all Members, which consent may be withheld or granted in the sole and
absolute discretion of each Member.

 

8.5           Option to Purchase.

 

8.5.1 General. Upon any Transfer of an interest in the Company in violation of
this Section 8 or upon a Transfer of any interest in a Member that is prohibited
by this Agreement (a “Triggering Event”), the Members to whom a Triggering Event
has not occurred (the “Option Members”) shall have the right, but not the
obligation, to purchase the entire interest in the Company (the “Option
Interest’) of the Member to whom the Triggering Event occurred (the “Selling
Member”), on the terms and conditions set forth in this Section 8.5.

 

8.5.2 Election. Any Option Member may invoke the valuation procedure of
Section 8.5.3 by giving written notice (the “Valuation Notice”) to the Selling
Member (or, if applicable, its representatives, successors, or assigns) and to
each other Option Member at any time within six months following the Option
Member’s actual knowledge of the Triggering Event.

 

[***] Confidential treatment requested. Omitted portions have been filed
separately with the Securities and Exchange Commission.

 

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8.5.3 Valuation Procedure. For a period of 60 days following the Valuation
Notice, the Option Members and the Selling Member (or, if applicable, the
representatives, successors or assigns of the Selling Member) shall negotiate in
good faith to determine the fair market value of all of the Company’s assets,
taken as a whole, exclusive of any goodwill or other intangible asset that does
not have a book value for accounting purposes (the “Assets”). If the parties are
unable to agree on the fair market value of the Assets within the prescribed
60-day period, the parties shall, within 15 days following the end of such
60-day period, unanimously select an appraiser or appraisers to determine the
fair market value of the Assets. If the parties are unable to agree on an
appraiser or appraisers within the foregoing 15day period, then at the election
of any party, the selection of an appraiser or appraisers shall be made as
follows: (a) each party shall select an appraiser, and (b) the appraisers
selected by the parties shall in turn appoint another appraiser to perform the
appraisal. Following his or their selection, the appraiser(s) shall determine as
soon as practicable the fair market value of the Assets assuming, for purposes
of determining such value, that the Assets are liquidated in an orderly manner
over a period of six months. The parties’ agreement as to value, or if
applicable, the appraiser’s (appraisers’) determination of value shall be
binding on all parties for purposes of this Agreement. The date of the parties’
agreement on the value of the Assets, or, if applicable, the date of the final
appraisal report(s), is referred to hereinafter as the “Valuation Date.” All
appraisal costs shall be borne by the Selling Member.

 

8.5.4 Purchase Price. The purchase price of the Option Interest shall equal 75%
of the amount the Selling Member would receive pursuant to Section 9.2.3 if the
Assets were sold for cash at their fair market value (determined in accordance
with Section 8.5.3), the Company immediately dissolved, and its assets were
applied and distributed in liquidation pursuant to Section 9.2 hereof. For the
avoidance of all doubt, no discount for marketability, minority interest or any
other discount shall apply to the Selling Member’s interest.

 

8.5.5 Exercise of Right. Within 60 days following the Valuation Date, each
Option Member shall give written notice to the other Members stating whether
such Option Member desires to purchase the Option Interest. Each Option Member
who gives a timely notice stating its intent to purchase the Option Interest is
referred to hereinafter as a “Purchasing Member.” If there is more than one
Purchasing Member, the Purchasing Members shall be entitled to purchase the
Option Interest in proportion to their Profits Interests, or in such other
proportions as they may agree (with such proportions being referred to
hereinafter as the “Purchase Percentages”). Each Purchasing Member shall
thereafter be entitled to purchase its proportionate share of the Option
Interest (determined as provided in the immediately preceding sentence) by
delivering to the Selling Member (or, if applicable, to the representatives,
successors or assigns of the Selling Member) the Purchasing Member’s negotiable
promissory note (the “Note”) in a principal amount equal to the purchase price
determined under Section 8.5.4 multiplied by the Purchasing Member’s Purchase
Percentage, payable in equal annual installments of principal together with
annual payments of interest at the Prime Rate, over a period not to exceed five
years, with the first installment due and payable one year from the date of
sale. The Note shall be secured by a collateral assignment of the portion of the
Option Interest acquired by the Purchasing Member, in a commercially reasonable
form determined by the Purchasing Member.

 

8.5.6 Deliveries by Selling Member. Upon receipt of a Purchasing Member’s

 

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Note, the Selling Member (or, if applicable, its representatives, successors or
assigns) shall deliver to the Purchasing Member an executed assignment of the
portion of the Option Interest to be acquired by the Purchasing Member,
sufficient to convey such interest to the Purchasing Member free and clear of
any liens, claims or encumbrances, except those taken subject to by the
Purchasing Member, as provided in Section 8.5.8 below.

 

8.5.7 Assumption and Release. In connection with the purchase of any portion of
the Option Interest hereunder, the Purchasing Member shall release the Selling
Member from and assume, as appropriate, such Company-related obligations and
guarantees as shall relate to the transferred portion of the Option Interest and
agree to indemnify and hold harmless the Selling Member with respect to all such
obligations and guarantees.

 

8.5.8 Closing Adjustments. If the Option Interest is subject to any lien, claim
or encumbrance, a Purchasing Member may elect (a) to cause the purchase price
(or a portion thereof) to be applied to discharge such lien, claim or
encumbrance, or (b) to take the relevant portion of the Option Interest subject
to such lien, claim or encumbrance and to reduce the purchase price otherwise
payable by the Purchasing Member to the Selling Member by the amount of such
lien, claim or encumbrance.

 

8.5.9 Use of Nominee. At the election of a Purchasing Member, the purchase of
all or part of the Option Interest pursuant to this Section 8.5 may be completed
by a nominee of the Purchasing Member, in which case, the obligations of the
Purchasing Member under this Section 8.5 shall be performed by the nominee
rather than the Purchasing Member. If a nominee completes the purchase of the
Option Interest, the nominee shall be admitted as a Substituted Member in the
Company upon the execution and delivery by such nominee to the remaining Members
of an instrument in a form approved by the remaining Members in their reasonable
discretion, whereby such nominee agrees to be bound by the terms and conditions
of this Agreement from and after the date the nominee acquires the Option
Interest.

 

8.6           Distributions in Respect of Transferred Interests. If any interest
in the Company is transferred during any accounting period in compliance with
the provisions of this Section 8, all distributions on or before the date of
such Transfer shall be made to the transferor, and all distributions thereafter
shall be made to the transferee.

 

8.7           Right of First Refusal. In the event any Member proposes to sell
all or any portion of its interest in the Company (at “Transferring Member”) to
a third party, such Transferring Member shall deliver a written notice (the
“Transfer Notice”) to the Company and to the other Member (the “ROFO Offeree”).
The Transfer Notice shall specify the interest in the Company the Transferring
Member proposes to sell (the “Transfer Securities”) and shall describe the
material terms of the third party offer (the “Third Party Offer”). If, following
delivery of the Transfer Notice, the ROFO Offeree is interested in purchasing
all of the Transfer Securities, the ROFO Offeree shall, within twenty (20) days
thereafter, deliver a written notice to the Transferring Member expressing the
ROFO Offeree’s interest in acquiring the Transfer Securities on the same terms
as set forth in the Third Party Offer (the “Expression of Interest”). If,
following delivery of the Transfer Notice, the ROFO Offerree determines it is
not interested in purchasing all of the Transfer Securities, the ROFO Offeree
shall, within twenty (20) days thereafter, deliver a written notice of its
decision not to purchase the Transfer Securities (the “Rejection Notice”). If
the ROFO Offeree elects to

 

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proceed with the purchase of the Transfer Securities, such sale transaction
shall be consummated within ninety (90) days following delivery of the
Expression of Interest. In the event the ROFO Offeree elects not to purchase the
Transfer Securities pursuant to the Rejection Notice, the Transferring Holder
shall have the right to sell the Transfer Securities to the third party pursuant
to the terms of the Third Party Offer. If such sale transaction is not completed
with ninety (90) days of the receipt of the Rejection Notice, the Transferring
Member shall be obligated to reinitiate the right of first offer procedures set
forth in this Section 8.8.

 

8.8 Buy-Sell Rights. If either the Company or either Member shall request the
written consent of the other Member to any of the actions set forth in Sections
[1.9.3, 5.3, 5.5, 5.9.1] or any License Agreement from Rich Dad to the Company
or from WIN to the Company is terminated for any reason, and one Member (the
“Consenting Member”) gives such consent but the other Member (the
“Non-Consenting Member”) does not so consent (such situation is hereinafter
referred to as a “Deadlock Event”), then the Consenting Member and the
NonConsenting Member shall each have the right to initiate the following
buy/sell option:

 

8.8.1 Company Notice; Buy/Sell Notice. Within ten (10) days of the occurrence of
a Deadlock Event, the Company shall give written notice (the “Company Notice”)
to the Consenting Member and the Non-Consenting Member of the occurrence of such
Deadlock Event. Each of the Consenting Member and the Non-Consenting Member
shall have an option, continuing for a period of ninety (90) days, beginning
with the day following receipt of the Company Notice by both the Consenting and
Non-Consenting Members to exercise its buy/sell rights pursuant to this
Section 8.8. If the Consenting or Non-Consenting Member desires to exercise its
buy/sell rights under this Section 8.8, such Consenting or Non-Consenting Member
(the “Notifying Member”) shall send written notice (“Buy/Sell Notice”) to the
other Member as the case may be (the “Notified Member”), which shall set forth
the interest in the Company held by such Notifying Member (the “Specified
Interests”) and the price (the “Selling Price”) at which the Specified Shares
may be transferred, which shall be determined pursuant to the same valuation
procedures set forth in Section 8.5.3 hereof. The Specified Interests shall
include all Interests held by the Notifying Member. In the event both the
Consenting Member and the NonConsenting Member attempt to exercise their
buy/sell rights under this Section 8.8, the operative Buy/Sell Notice shall be
the first notice received by a Notified Member. Notwithstanding anything in this
Section 8.8 to the contrary, in the event any license agreement from (i) Rich
Dad to the Company is terminated for any reason, then only Rich Dad shall have
the right to deliver a Buy/Sell Notice, and (ii) WIN to the Company is
terminated for any reason, then only WIN shall have the right to deliver a
Buy/Sell Notice.

 

8.8.2 Notified Member’s Option. The Notified Member shall have an option,
continuing for a period of ninety (90) days beginning with the day following
receipt of the Buy/Sell Notice to elect: (i) to acquire all, but not less than
all, of the Specified Shares at the Selling Price and on the terms set forth in
the Buy/Sell Notice, or (ii) to sell all, but not less than all, of the Shares
then held by such Notified Member to the Notifying Member at the Selling Price
and on the terms set forth in the Buy/Sell Notice. The Notified Member must
select one of the two foregoing options within such ninety day period and shall
notify the Notifying Member of the option it has selected prior to the
expiration of such ninety day period. If the Notified Member fails to notify the
Notifying Member of its selection prior to the expiration of such ninety day
period, the Notified Member shall be deemed to have

 

[***] Confidential treatment requested. Omitted portions have been filed
separately with the Securities and Exchange Commission.

 

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elected to sell its Shares to the Notifying Member at the Selling Price.

 

8.8.3 Transfer of Interest. Upon the determination of which Member is to sell
its Interest under this Section 8.8, both Members shall thereupon take all
action as may be required or necessary to effectuate the transfer of such
Interest to the purchasing Member pursuant to the terms set forth in this
Section 8.8 as promptly as practicable, but in no event later than sixty (60)
days thereafter.

 

SECTION 9. DISSOLUTION AND TERMINATION

 

9.1                         The Company shall dissolve upon the first to occur
of any of the following events:

 

9.1.1             The sale of all or substantially all of the assets of the
Company and the collection of the proceeds of such sale;

 

9.1.2             The unanimous election by the Members to dissolve the Company;

 

9.1.3             Upon the entry of a decree of dissolution under the Act; or

 

9.1.4 Upon any other Withdrawal Event, unless the business of the Company is
continued by the specific written consent of the remaining Member(s) given
within 90 days after such event.

 

9.2                         Winding Up.

 

9.2.1 Notice of Winding Up. Following the dissolution of the Company, as
provided in Section 9.1 hereof, the Manager, or if there is no Manager, any
remaining Member, may execute and file a notice of winding up with the Wyoming
Secretary of State.

 

9.2.2 Effect of Filing. After the dissolution of the Company, the Company shall
cease to carry on its business, except insofar as may be necessary for the
winding up of its business, but the Company’s separate existence shall continue
until articles of termination have been filed with the Wyoming Secretary of
State or until a decree dissolving the Company has been entered by a court of
competent jurisdiction.

 

9.2.3 Liquidation and Distribution of Assets. Upon the dissolution of the
Company, the Manager, or, if there is no Manager, the remaining Member(s), or a
court appointed trustee if there is no remaining Member, shall take full account
of the Company’s liabilities and assets, and such assets shall be liquidated as
promptly as is consistent with obtaining the fair value thereof During the
period of liquidation, the business and affairs of the Company shall continue to
be governed by the provisions of this Agreement, with the management of the
Company continuing as provided in Section 5 hereof. The proceeds from
liquidation of the Company’s property, to the extent sufficient therefore, shall
be applied and distributed in the following order:

 

9.2.3.1 To the payment and discharge of all of the Company’s debts and
liabilities, including those to Members who are creditors (to the extent
permitted by law), and to the establishment of any necessary reserves; and

 

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9.2.3.2               To the Members and in accordance with Sections 3.1.2 and
3.1.3 hereof.

 

9.2.4 Winding Up Period. The Company shall have up to one year from the
occurrence of the dissolution event to wind up its affairs, during which the
Company shall fulfill all outstanding trainings as of the date of the
dissolution event.

 

9.3 Deficit Capital Accounts. In no event shall a Member’s negative or deficit
Capital Account balance be considered a debt or obligation owed to the Company,
nor shall any Member with a negative or deficit Capital Account balance have any
obligation to restore such Capital Account by means of an Additional Capital
Contribution to the Company.

 

9.4 Articles of Termination. When all debts, liabilities and obligations of the
Company have been paid and discharged or adequate provisions have been made
therefore and all of the remaining property and assets of the Company have been
distributed to the Members. articles of termination shall be executed and filed
by the Manager, or if there is no Manager, by the remaining Members, with the
Wyoming Secretary of State.

 

9.5 Rights of the Members Following Dissolution. Upon dissolution of the Company
as described in this Section 9, the Members shall have the following rights with
respect to the assets of the Company:

 

9.5.1.1 WIN shall have the exclusive right to use all proprietary information
owned by the Company at the time of dissolution, including, without limitation,
all handouts, workbooks, presentation manuals, software programs, or any other
literature or material and other collateral (the “Company Materials”) to the
extent, and only to the extent, that WIN was the owner of any original works
which gave rise to the derivative works comprising the Company Materials,
provided, however, that WIN shall remove any and all Rich Dad logos,
trademark(s) and branding, as well as any materials comprising Rich Dad
materials, or which are derived from Rich Dad materials or which would tend to
create a likelihood of confusion with respect to affiliation or sponsorship (the
“Rich Dad Proprietary Materials”), between the Company and Rich Dad, from such
materials prior to any use and shall provide evidence of the same to Rich Dad.
WIN shall have the exclusive right to use any WIN Proprietary Material
contributed to the Company.

 

9.5.1.2 Rich Dad shall have the exclusive right to use all proprietary
information owned by the Company at the time of dissolution, including, without
limitation, the Company Materials to the extent, and only to the extent, that
Rich Dad was the owner of any original works which gave rise to the derivative
works comprising the Company Materials, provided, however, that Rich Dad shall
remove any and all WIN trademark(s) and branding, as well as any materials
comprising WIN materials, or which are derived from WIN materials or which would
tend to create a likelihood of confusion with respect to affiliation or
sponsorship (the “WIN Proprietary Materials”), between the Company and WIN, from
such materials prior to any use and shall provide evidence of the same to WIN.
Rich Dad shall have the exclusive right to use any Rich Dad Proprietary Material
contributed to the Company.

 

9.5.1.3 Neither Member shall have any right whatsoever to use any

 

[***] Confidential treatment requested. Omitted portions have been filed
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Company logo or trade name, unless agreed to in writing by the Members,
provided, however, that Rich Dad shall have the exclusive right to use the Rich
Dad Education name upon the dissolution of the Company, however, not in
connection with any products or services as offered by the Company under 9.5.1.1
herein.

 

9.5.1.4 Any and all licenses of intellectual property entered into between the
Company and a Member that provide for the right by the Company to use the
Member’s intellectual property described in such license agreement shall
automatically terminate upon the occurrence of a dissolution event and shall be
of no further force or effect.

 

9.5.1.5 In the event that the Company develops any new Company Materials (the
“Company Developed Proprietary Materials”) that are not derived from Rich Dad
Proprietary Materials or from any WIN Materials, each party shall have the
non-exclusive right to use the Company Development Materials upon the
dissolution of the Company.

 

SECTION 10. CONVERSION TO CORPORATE FORM  Notwithstanding anything to the
contrary set forth in this Agreement, upon the consent of the Members, the
Members may, at any time upon not fewer than [twenty (20) days] prior written
notice given to each Member (unless such notice period is waived by the
Members), cause the Company to convert into a corporation (the “Successor
Corporation”), by such means (including, without limitation, filing of
appropriate certificates of conversion and incorporation; merger or
consolidation or other business combination; transfer of all or a part of the
Company’s assets; and/or exchange of interest in the Company for securities of
the Successor Corporation) as the Manager may reasonably select. Upon such
conversion:

 

(a)  each Member’s interest in the Company shall be exchanged for, or otherwise
converted into, the number of shares of common stock of the Successor
Corporation representing, as nearly as reasonably practicable, an equity
interest therein equivalent to the “economic interest” in the Company
represented by such Member’s interest immediately prior to the conversion
(without regard to whether such corporation is subject to federal or state
income taxation at the entity level); and

 

(b)  the certificate of incorporation, bylaws and other organizational documents
of such corporation (and/or, to the extent determined by the Members to be
customary with respect to the particular provisions of this Agreement in
documentation typically used in joint venture transactions, agreements among
security holders of such corporation) shall, to the extent reasonably
practicable and unless such conversion is being effected in connection with an
initial public offering (“IPO) (in which case the Members shall be expressly
authorized hereby to make such modifications with respect thereto as the deemed
necessary or advisable in connection with the IPO), reflect voting, management,
exculpation, indemnification and other arrangements among the stockholders and
directors which are comparable to the voting, management, exculpation,
indemnification and other arrangements among the Members contained in this
Agreement.

 

SECTION 11.                       MISCELLANEOUS

 

11.1 Notices. Except for communication and/or consents under Section 5.5 and its

 

[***] Confidential treatment requested. Omitted portions have been filed
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subsections, any notice, payment, demand or communication required or permitted
to be given by any provision of this Agreement shall be in writing and shall be
delivered personally to the Person to whom the same is directed, sent by
registered or certified mail, return receipt requested, addressed to the Manager
or any Member at the address appearing below such Person’s name on Exhibit A, or
by facsimile transmission to the “FAX” number set below such Person’s name on
Exhibit A, or if to the Company, by notice to the Manager and each Member as
herein provided, or to such other address as the parties may from time to time
specify by notice in accordance with this Section 11.1. Any such notice shall be
deemed to be delivered, given and received for all purposes as of the date so
delivered, if delivered personally or if sent by facsimile transmission, or, if
sent by certified or registered mail, three days following the date on which the
same was deposited in a regularly maintained receptacle for the deposit of
United States mail, postage and charges prepaid.

 

11.2 Binding Effect. Except as otherwise provided in this Agreement, every
covenant, term and provision of this Agreement shall be binding upon and inure
to the benefit of the Members and their respective heirs, legatees, legal
representatives, successors, transferees and assigns.

 

11.3   Construction. Every covenant, term and provision of this Agreement shall
be construed simply according to its fair meaning and not strictly for or
against any Member.

 

11.4   Time. Time is of the essence with respect to this Agreement.

 

11.5 Headings. Section and other headings contained in this Agreement are for
reference purposes only and are not intended to describe, interpret, define or
limit the scope, extent or intent of this Agreement or any provision hereof.

 

11.6 Severability. Every provision of this Agreement is intended to be
severable. If any term or provision hereof is illegal or invalid for any reason
whatsoever, such illegality or invalidity shall not affect the validity or
legality of the remainder of this Agreement.

 

11.7 Incorporation by Reference. Every exhibit, schedule and other appendix
attached to this Agreement and referred to herein is hereby incorporated in this
Agreement by reference.

 

11.8 Additional Documents. Each Member, upon the request of any other Member,
agrees to perform all further acts and execute, acknowledge and deliver any
documents which may be reasonably necessary, appropriate or desirable to carry
out the provisions of this Agreement.

 

11.9 Variation of Pronouns. All pronouns and any variations thereof shall be
deemed to refer to masculine, feminine or neuter, singular or plural, as the
identity of the Person or Persons may require.

 

11.10 Wyoming Law. The laws of the State of Wyoming shall govern the validity of
this Agreement, the construction of its terms, and the interpretation of the
rights and duties of the Members.

 

11.11 Waiver of Action for Partition. Each Member irrevocably waives any right
that such Member may have to maintain any action for partition with respect to
any of the

 

[***] Confidential treatment requested. Omitted portions have been filed
separately with the Securities and Exchange Commission.

 

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Company’s property.

 

11.12 Counterpart Execution; Facsimile Signatures. This Agreement may be
executed in any number of counterparts pursuant to original or facsimile copies
of signatures with the same effect as if the Manager and all of the Members had
signed the same document pursuant to original signatures. All counterparts shall
be construed together and shall constitute one agreement.

 

11.13 Representations and Warranties. Effective upon the execution of this
Agreement, and as of the Effective Date, each Member represents and warrants to
the Company, to the Manager and to each other Member that:

 

11.13.1 It has acquired its interest in the Company for its own account, for
investment, and not with a view to or for the resale, distribution, subdivision
or fractionalization thereof;

 

11.13.2 Except as otherwise permitted herein, it has no contract, undertaking,
understanding, agreement or arrangement, formal or informal, with any person to
sell, transfer or pledge all or any portion of its interest in the Company and
has no current plans to enter into any such contract, undertaking,
understanding, agreement or arrangement;

 

11.13.3 It has such business and financial experience alone, or together with
its professional advisers, that it has the capacity to protect its own interests
in connection with its acquisition of an interest in the Company;

 

11.13.4 It has sufficient financial strength to hold the interest in the Company
as an investment and bear the economic risks of that investment (including
possible complete loss of such investment) for an indefinite period of time;

 

11.13.5 It has been afforded an opportunity to ask such questions as it has
deemed necessary or desirable in order to evaluate the merits and risks of the
investment contemplated herein;

 

11.13.6 It acknowledges that it has performed its own due diligence with respect
to its interest in the Company and is relying on that due diligence in making
this investment and that it is not relying on the Manager or any other Member or
their respective Affiliates with respect to tax, suitability or other economic
considerations;

 

11.13.7   This Agreement constitutes a legal, valid and binding obligation of
the Member enforceable against the Member in accordance with its terms;

 

11.13.8 To the Member’s knowledge, the execution, delivery and performance of
this Agreement by the Member does not and will not violate, conflict with or
contravene any judgment, order, decree, writ or injunction, or any law, rule,
regulation, contract or agreement to which the Member is subject; and

 

11.13.9 Rich Dad hereby represents and warrants to WIN that, to the knowledge of
Rich Dad, neither the formation of this joint venture nor the participation
therein by Rich Dad (after giving due consideration to WIN’s 51% Profits
Interest in the Company and status as a publicly traded company) shall give rise
to any legal or financial

 

[***] Confidential treatment requested. Omitted portions have been filed
separately with the Securities and Exchange Commission.

 

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reporting or regulatory requirements on the part of Rich Dad, including, without
limitation, filings with the Federal Trade Commission under the Hart-Scott
Rodino Antitrust Improvements Act of 1976, as amended, except for such
obligations to report Rich Dad’s allocable share of profits and losses under
applicable state and federal tax laws.

 

11.14    Glossary. For purposes of this Agreement, the following terms shall
have the meanings specified in this Section 11.14:

 

“Act” means the Wyoming Limited Liability Company Act, as amended from time to
time (or any corresponding provisions of succeeding law).

 

“Additional Capital Contributions” means the additional Capital Contributions
made under Section 2.4 hereof.

 

“Adjusted Capital Account Deficit” means an amount with respect to any Member
equal to the deficit balance in such Member’s Capital Account at the end of the
relevant fiscal year, after increasing the balance in such Member’s Capital
Account by any amount which such Member is obligated to or deemed to be
obligated to restore pursuant to Regulations Sections 1.704-2(g)(1) and
1.704-2(i)(5). The foregoing definition of Adjusted Capital Account Deficit
generally is intended to comply with the provisions of Regulations
Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

 

“Affiliate” means, with respect to any Person: (a) any Person directly or
indirectly controlling, controlled by or under common control with such Person;
(b) any Person owning or controlling 10% or more of the outstanding voting
interests of such Person; (c) any officer, director, or general partner of such
Person; or (d) any Person who is an officer, director, general partner, trustee
or holder of 10% or more of the voting interests of any Person described in
clauses (a) through (c) of this definition.

 

“Agreement” means this Limited Liability Company Agreement, as amended from time
to time. Words such as “herein,” “hereinafter,” “hereinafter,” “hereto” and
“hereunder,” refer to this Agreement as a whole, unless the context otherwise
requires.

 

“Approved Budget” has the meaning given that term in Section 5.3 hereof.

 

“Approved Expenses” has the meaning given that term in Section 5.3 hereof.

 

“Approved Business Plan” has the meaning given that term in Section 5.2 hereof.

 

“Assets” has the meaning given that term in Section 8.5.3 hereof

 

“Asset Acquisition Fee” has the meaning given such term in Section 5.9.2 hereof.

 

“Asset Management Fee” has the meaning given such term in Section 5.9.2 hereof

 

“Book Value” has the meaning given that term in Section 4.1.2 hereof.

 

[***] Confidential treatment requested. Omitted portions have been filed
separately with the Securities and Exchange Commission.

 

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“Budget” has the meaning given that term in Section 5.3 hereof.  

 

“Business Plan” has the meaning given that term in Section 5.2 hereof.

 

“Capital Account” means, with respect to any Member or assignee, the Capital
Account maintained for such Person in accordance with the following provisions:

 

(a) To each Person’s Capital Account there shall be credited such Person’s
Capital Contributions, such Person’s distributive share of Profits and any items
in the nature of income or gain which are specialty allocated pursuant to
Section 4, and the amount of any Company liabilities assumed by such Person or
which are secured by any Property distributed to such Person.

 

(b) To each Person’s Capital Account there shall be debited the amount of cash
and the Gross Asset Value of any Property distributed to such Person pursuant to
any provision of this Agreement, such Person’s distributive share of Losses and
any items in the nature of expenses or losses which are specially allocated
pursuant to Section 4, and the amount of any liabilities of such Person assumed
by the Company or which are secured by any property contributed by such Person
to the Company.

 

(c) In the event all or a portion of an interest in the Company is transferred
in accordance with the terms of this Agreement, the transferee shall succeed to
the Capital Account of the transferor to the extent it relates to the
transferred interest.

 

(d) In determining the amount of any liability for purposes of (a) and (b) of
this definition, there shall be taken into account Code Section 752(c) and any
other applicable provisions of the Code and Regulations.

 

The foregoing provisions and the other provisions of this Agreement relating to
the maintenance of Capital Accounts are intended to comply with Regulations
Section 1.704-1(b), and shall be interpreted and applied in a manner consistent
with such Regulations. In the event the Manager shall determine that it is
prudent to modify the manner in which the Capital Accounts, or any debits or
credits thereto (including, without limitation, debits or credits relating to
liabilities which are secured by contributions or distributed property or which
are assumed by the Company, a Member, or assignee), are computed in order to
comply with such Regulations, the Manager may make such modification, provided
that it is not likely to have a material effect on the amounts distributed to
any Person pursuant to Section 9 of this Agreement upon the dissolution of the
Company. The Manager also shall (i) make any adjustments that are necessary or
appropriate to maintain equality between the Capital Accounts of the Members and
assignees and the amount of Company capital reflected on the Company’s balance
sheet, as computed for book purposes, in accordance with Regulations
Section 1.704- 1 (b)(2)(iv)(g), and (ii) make any appropriate modifications in
the event unanticipated events might otherwise cause this Agreement not to
comply with Regulations Section 1.704-1(b).

 

“Capital Account Depreciation” shall mean for each calendar year or other
period, an amount equal to the depreciation, amortization or other cost recovery
deduction allowable with respect to an asset for such fiscal year or other
period, except that if the Gross Asset

 

[***] Confidential treatment requested. Omitted portions have been filed
separately with the Securities and Exchange Commission.

 

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Value of an asset differs from its adjusted basis for federal income tax
purposes at the beginning of such fiscal year or other period, Capital Account
Depreciation shall be an amount which bears the same ratio to such beginning
Gross Asset Value as the federal income tax depreciation, amortization or other
cost recovery deduction for such fiscal year or other period bears to such
beginning adjusted tax basis.

 

“Capital Contribution” means, with respect to any Member, the amount of money
and the net fair market value of any property (other than money) contributed to
the Company by such Member pursuant to any provision of this Agreement.

 

“Certificate” has the meaning given that term in Section 1.8 hereof.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time (or
any corresponding provisions of succeeding law).

 

“Company” has the meaning given that term in the introductory paragraph to this
Agreement, but shall also include any limited liability company continuing the
business of this Company in the event of dissolution as herein provided.

 

“Company Materials” means all handouts, workbooks, presentations, manuals,
software programs, DVDs, CDs, tapes and such other literature, material and
collateral used by the Company in the Business.

 

“Company Minimum Gain” has the meaning set forth in Regulations
Section 1.7042(b)(2) and is determined by computing with respect to each
nonrecourse liability of the Company, the amount of gain (of whatever
character), if any, that would be realized by the Company if it disposed (in a
taxable transaction) of the Property subject to such liability in full
satisfaction thereof, and by then aggregating the amounts so computed as set
forth in Regulations Section 1.704-2(d).

 

“Confidential” has the meaning given such term in Section 1.9.5 hereof.

 

“Controlled Affiliate” means as to any Person, any other Person controlled by or
under common control with such Person. For the purposes of this definition, the
terms “controlled” and “control” means the possession, directly or indirectly,
of the power to direct or cause the direction of management and policies of a
Person, whether through ownership of voting securities or a partnership or
membership interest, by contract or otherwise.

 

“Core Activities” has the meaning given that term in Section 1.4 hereof.

 

“Effective Date” has the meaning given that term in the introductory paragraph
to this Agreement.

 

“Emergency Situations” has the meaning given such term in Section 5.10 hereof.

 

“Gross Asset Value” shall mean, with respect to any Company 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
Company shall be the fair market value of such asset at the time of contribution
to the

 

[***] Confidential treatment requested. Omitted portions have been filed
separately with the Securities and Exchange Commission.

 

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Company, as determined by the contributing Member and the Company as reflected
in this Agreement or another writing agreed to by all the Members;

 

(b) The Gross Asset Value of all Company assets shall be adjusted to equal their
respective gross fair market values, as determined by the Members, as of the
following times: (A) the acquisition of an additional interest in the Company by
any new or existing Members in exchange for more than a de minimis Capital
Contribution if the Members determine that such adjustment is necessary or
appropriate to reflect the relative economic interests of the Members in the
Company; (B) the distribution by the Company to a Member of more than a de
minimis amount of Company property as consideration for an interest in the
Company if the Members determine that such adjustment i s necessary or
appropriate to reflect the relative economic interests of the Members in the
Company; (C) the liquidation of the Company within the meaning of Regulations
Section 1.704-1(b)(2)(ii)(g); and (D) upon the grant of an interest in the
Company (other than a de minimis interest) in consideration for the provision of
services to or for the benefit of the Company by an existing Member acting in a
Member capacity, or by a New Member acting in a Member capacity, or in
anticipation of being a Member;

 

(c) If the Gross Asset Value has been determined or adjusted pursuant to
Subsections (a) and (b) above, such Gross Asset Value shall be thereafter
adjusted by the Capital Account Depreciation taken into account for purposes of
computing Profits or Losses; and

 

(d) if an election under Code Section 754 has been made, the Gross Asset Value
of Company assets shall be increased (or decreased) to reflect any adjustments
to the adjusted basis of the assets pursuant to Code Section 734(b) or Code
Section 743(b), but only to the extent that those adjustments are taken into
account in determining Capital Accounts pursuant to Treasury Regulation
Section 1.704-1(b)(2)(iv)(m) and Section 4.1 hereof; provided, however, that
Gross Asset Value shall not be adjusted pursuant to this subsection (d) to the
extent that the Manager determines that an adjustment pursuant to subsection
(b) hereof is necessary or appropriate in connection with a transaction that
would otherwise result in an adjustment pursuant to this subsection (d).

 

“Indemnitee” has the meaning given that term in Section 5.8 hereof.

 

“Independent Activity” and “Independent Activities” has the meaning given such
terms in Section 1.9 hereof.

 

“Initial Capital Contribution” has the meaning given that term in Section 2.3
hereof.

 

“Initial Operating Budpet” has the meaning given that term in Section 5.3
hereof.

 

[***] Confidential treatment requested. Omitted portions have been filed
separately with the Securities and Exchange Commission.

 

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“Liquidated Damages” has the meaning given such term in Section 2.3 hereof.

 

“Loan” has the meaning given such term in Section 1.4. 10 hereof.

 

“Manager” means the Person identified as the Manager in the introductory
paragraph to this Agreement, and any new Manager selected by the Manager
pursuant to Section 5.1.2 hereof.

 

“Member” means any Person identified as a Member in the introductory paragraph
to this Agreement. If any Person is admitted as Substituted Member pursuant to
the terms of this Agreement, “Member” shall be deemed to refer also to such
Person. “Members” refers collectively to all Persons who are designated as a
“Member” pursuant to this definition.

 

“Member Loans” has the meaning given that term in Section 2.7 hereof.

 

“Member Nonrecourse Debt” has the meaning set forth in Section L704-2(b)(4) of
the Regulations.

 

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

 

“Net Cash Flow” means the gross cash proceeds from Company operations (including
from sales, dispositions or refinancing of Company property), less the portion
thereof used to (a) pay any royalties due pursuant to the Rich Dad License
Agreement and WIN License Agreement, and (b) pay or establish reserves for
Company expenses, debt payments (other than payments to Members in relation to
Member Loans under Section 2.7 of this Agreement), capital improvements,
replacements and contingencies, all as reasonably determined by the Manager,
consistent with any Approved Budget then in effect.

 

“Non-Discretionary Expenditure” means expenditures which the Company is required
to pay by law or pursuant to existing contracts between the Company and any
third party in accordance with an Approved Business Plan. For example, such
expenditures may include increases in taxes, loan payments, etc.

 

“Nonrecourse Liability” has the meaning set forth in Section 1.704-2(b)(3) of
the Regulations.

 

“Note” has the meaning given that term in Section 8.5.5 hereof.

 

“Notice of Default” has the meaning given that term in Section 5.1.2 hereof.

 

“Option Interest” has the meaning given that term in Section 8.5.1 hereof.

 

“Option Member” has the meaning given that term in Section 8.5.1 hereof.

 

[***] Confidential treatment requested. Omitted portions have been filed
separately with the Securities and Exchange Commission.

 

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“Person” means any individual, partnership, limited liability company,
corporation, trust or other entity.

 

“Prime Rate” means the prime rate of interest announced publicly from time to
time by Bank of America NT & SA, or its successor.

 

“Profits Interest” means, with respect to each Member, the percentage identified
on Exhibit A as that Member’s “Profits Interest” in the Company, subject to
adjustment as provided in Section 2.6 of this Agreement.

 

“Profits” and “Losses” means, for each fiscal year or other period, an amount
equal to the Company’s taxable income or loss for such year or period determined
in accordance with Code Section 703(a) (including in such taxable income or loss
all items of income, gain, loss or deduction required by Code Section 703(a) to
be stated separately) with the following adjustments:

 

(a) Any income of the Company that is exempt from federal income tax, and not
otherwise taken into account in this definition in computing Profits or Losses,
shall be added to such taxable income or loss;

 

(b) Any Company expenditures described in Code Section 705(a)(2)(B), or treated
as such pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise
taken into account in this definition in computing Profits or Losses shall be
subtracted from such taxable income or loss;

 

(c) Gain or loss resulting from any disposition of Company property shall be
computed by reference to the Gross Asset Value of the Company property disposed
of, notwithstanding that the adjusted tax basis of such property differs from
its Gross Asset Value;

 

(d) 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 the “Capital Account Depreciation” computed in accordance
with such definition contained above;

 

(e) In the event the Gross Asset Value of any Company asset is adjusted as
required by subsections (b) or (c) of the definition of Gross Asset Value, the
amount of that adjustment shall be taken into account as gain or loss from the
disposition of that asset (assuming the asset was disposed of just prior to the
adjustment) for purposes of computing Profits or Losses in the Fiscal Year of
adjustment; and

 

 (f) Notwithstanding any other provision of this subsection, any items of
income, gain; loss or deduction which are specifically allocated shall not be
taken into account in computing Profits or Losses.

 

“Purchase Percentage” has the meaning given that term in Section 8.5.5 hereof.

 

[***] Confidential treatment requested. Omitted portions have been filed
separately with the Securities and Exchange Commission.

 

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“Purchasing Member” has the meaning given that term in Section 8.5.5 hereof.

 

“Regulations” means the Income Tax Regulations promulgated under the Code, as
such regulations may be amended from time to time (including corresponding
provisions of succeeding regulations).

 

“Rich Dad License Agreement” means that certain License Agreement dated as of
the Effective Date between the Company and Rich Dad relating to the Company’s
use of the Rich Dad logo on the Company Materials, a copy of which is attached
as Exhibit C to this Agreement.

 

“Rich Dad Proprietary Materials” has the meaning given that term in
Section 9.5.1.2.

 

“Selling Member” has the meaning given that term in Section 8.5.1 hereof.

 

“Substituted Member” has the meaning given that term in Section 8.4 hereof.

 

“Target Account” means, with respect to any Member for any period, a balance
(which may be positive or negative) equal to (i) the hypothetical amount that
Member would receive upon the liquidation of the Company, assuming that (x) all
assets of the Company were sold for an amount equal to their respective Gross
Asset Values, (y) all liabilities of the Company allocable to those properties
became due and were satisfied in accordance with their terms (limited with
respect to each non-recourse liability, to the Gross Asset Value of the asset
securing such liability), and (z) all net assets of the Company were distributed
pursuant to Section 9.2.3.2 hereof as of the last day of the fiscal year or the
applicable period, reduced by (ii) the Member’s share of Company Minimum Gain
and Member Nonrecourse Debt Minimum Gain, as determined pursuant to Regulations
Section 1.704-2.

 

“Transfer” has the meaning given that term in Section 8.1 hereof.

 

“Triggering Event” has the meaning given that term in Section 8.5.1 hereof.

 

“Unreturned Capital Contribution” means, with respect to each Member, such
Member’s total Capital Contributions less distributions previously received by
such Member pursuant to Section 3.1.2 of this Agreement.

 

“Valuation Date” has the meaning given that term in Section 8.5.3 hereof.

 

“Valuation Notice” has the meaning given that term in Section 8.5.2 hereof.

 

“WIN License Agreement” means that certain License Agreement dated as of the
Effective Date by and among the Company and the WIN Subsidiaries relating to the
Company’s use of the WIN Materials, a copy of which is attached hereto as
Exhibit D to this Agreement.

 

“WIN Materials” means the following propriety information of WIN: handouts,
workbooks, presentations, manuals, software programs, and other literature and
material described on Exhibit E attached hereto.

 

[***] Confidential treatment requested. Omitted portions have been filed
separately with the Securities and Exchange Commission.

 

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“WIN Subsidiaries” means the following entities: Whitney Education Group, Inc.
Whitney Canada, Inc., EduTrades, Inc., Wealth Intelligence Academy, Inc.

 

“Withdrawal Event” means those events and circumstances listed in
Section                            of the Act.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

 

[***] Confidential treatment requested. Omitted portions have been filed
separately with the Securities and Exchange Commission.

 

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

 

 

MANAGER/MEMBER:

 

 

 

 

 

WHITNEY INFORMATION NETWORK,
INC., a Colorado corporation, its Manager

 

 

 

 

 

By:

 /s/ Ronald Simon

 

Name:

 Ronald Simon

 

Title:

  EUP

 

 

 

 

 

1612 E. Cape Coral Parkway

 

Cape Coral,Florida 33904

 

 

 

Attn: Thomas McElroy

 

 

Fax No.: (239) 540-6501

 

 

 

 

 

OTHER MEMBER:

 

 

 

RICH GLOBAL, LLC, a(n) Wyoming limited
liability company

 

 

 

 

 

By:

  /s/ Sharon L Lechter

 

Name:

  Sharon L Lechter

 

Its:

      Member

 

 

 

 

 

4330 North Civic Center Plaza

 

Scottsdale, Arizona 85251

 

Attn:

Sharon Lechter

 

Fax No: (   )    -    

 

[***] Confidential treatment requested. Omitted portions have been filed
separately with the Securities and Exchange Commission.

 

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EXHIBIT A

 

Manager and Members

 

Profits

 

Initial Capital

 

Names and Addresses

 

Interests

 

Contribution

 

 

 

 

 

 

 

Manager/Member:

 

 

 

 

 

 

 

 

 

 

 

Whitney Information Network, Inc.

 

51

%

$

 

 

 

 

 

 

 

 

Attn:

 

 

 

 

 

Fax No.: (     )      

 

 

 

 

 

 

 

 

 

 

 

Member:

 

 

 

 

 

 

 

 

 

 

 

Rich Global, LLC

 

49

%

$

 

 

 

 

 

 

 

 

Attn:                                         

 

 

 

 

 

Fax No.: (~

 

 

 

 

 

 

[***] Confidential treatment requested. Omitted portions have been filed
separately with the Securities and Exchange Commission.

 

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EXHIBIT B

Initial Operating Budget

 

(See Attachment)

 

[***] Confidential treatment requested. Omitted portions have been filed
separately with the Securities and Exchange Commission.

 

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EXHIBIT C

Rich Dad License Agreement

 

(See Attachment)

 

[***] Confidential treatment requested. Omitted portions have been filed
separately with the Securities and Exchange Commission.

 

--------------------------------------------------------------------------------

 

EXHIBIT D

WIN License Agreement

 

(See Attachment)

 

[***] Confidential treatment requested. Omitted portions have been filed
separately with the Securities and Exchange Commission.

 

 

--------------------------------------------------------------------------------

 

EXHIBIT E

WIN Materials

 

(See Attachment)

 

[***] Confidential treatment requested. Omitted portions have been filed
separately with the Securities and Exchange Commission.

 

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