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.


 

















 


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.


 

















 


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.


 

















 


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.


 

















 


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.


 

















 


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.


 

















 


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.


 

















 


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.


 

















 


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.


 
















 


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.


 

















 


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.


 

















 


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 


 


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Commission.


 

















 


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 


 


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Commission.


 

















 


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.


 

















 


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 


 


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Commission.


 

















 


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.


 

















 


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, 


 


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Commission.


 

















 


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
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Commission.


 

















 


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 


 


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Commission.


 

















 


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
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Commission.


 
















 


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 


 


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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 


 


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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 


 


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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 


 


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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 


 


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Commission.


 

















 


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. 


 


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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 


 


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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.


 
















 


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.


 

















 


“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.


 

















 


“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.


 

















 


“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.


 

















 


“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.


 

















 


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.


 

















 


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.


 

















 


EXHIBIT B




Initial Operating
Budget


 


(See Attachment)


 


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


 

















 


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.