**Exhibit 10.13**

 

**LIMITEDLIABILITY COMPANY AGREEMENTOFRICH DAD EDUCATION, LLC**

 

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

 

**RECITALS**

 

WHEREAS, WIN is in thebusiness of developing, producing and marketing educational curricula on realestate, business development, and asset protection;

 

WHEREAS, Rich Dad is inthe business of developing, producing and marketing educational curricula onsecurities and financial investment and asset protection;

 

WHEREAS, WIN and Rich Daddesire to form the joint venture described in this Agreement for the purpose ofconducting the Business (defined below);

 

NOW, THEREFORE, for goodand valuable consideration, the receipt of sufficiency of which his herebyacknowledged, the parties agree as follows:

 

**SECTION **1.**DEFINITIONS; THE COMPANY**

 

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

 

1.2           Formation. TheMembers hereby form the Company as a limited liability company pursuant to theprovisions of the Act and upon the terms and conditions set forth in thisAgreement and in the Certificate.

 

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

 

1.4           Purposes. Thepurposes of the Company and the general character of its business are to marketand fulfill to current and prospective customers of Rich Dad and WIN and to thegeneral public through new acquisition channels developed by the Company, realestate, business and stock based trainings throughout the United States andCanada using the Rich Dad logo, trademark(s), branding and goodwill associatedwith such logo and trademarks and to engage in any and all other activitiesreasonably related or incidental to the foregoing not prohibited by thisAgreement, and any other purposes agreed to by the Members in a writingexecuted by all the Members (collectively, the “Business”). The Membersintend that the Business shall be based on a modified version of WIN’smarketing model described in Appendix 1.4, which shall be subject to aLicensing Agreement to be entered into between the Company and WIN, andutilizing WIN’s operations and fulfillment centers with the exception ofcoaching services which shall be provided by Rich Dad’s 

 

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

 

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

 

1.5           Intent. It isthe intent of the Members that the Company shall always be operated in a mannerconsistent with its treatment as a “partnership” for federal and state incometax purposes. The Company is not a “partnership” for purposes of the WyomingUniform Partnership Act or a “limited partnership” for purposes of the WyomingUniform Limited Partnership Act, and the Members are not partners. It also isthe 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 Membershall take any action inconsistent with the express intent of the partieshereto.

 

1.6           Office. Theprincipal office of the Company shall be maintained at Whitney InformationNetwork, 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 allMembers.

 

1.7           Registered Officeand Agent for Service of Process. The registered office of the Company inthe 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 timein compliance with the Act. The name and business address of the Company’sagent for service of process are Corporate Direct, 60 East Simpson Ave.,Jackson, Wyoming 83001 (mailing Address P.O. Box 2869, Jackson, Wyoming83001), or such other qualified person or entity and such other businessaddress 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 alldocuments and take all actions as determined by Manager as may be necessary tocomply 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 liabilitycompany.

 

1.8           Term. The termof 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 theCompany is dissolved in accordance with this Agreement.

 

1.9          IndependentActivities.

 

1.9.1 General Scope ofIndependent Activities. Except as otherwise provided below, the Membershereby expressly acknowledge that each Member (either directly or through itsAffiliates) is involved in transactions, investments and business ventures andundertakings of every nature, which include, without limitation, activitiesassociated with real 

 

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

 

1.9.2 Waiver of Rightswith Respect to Independent Activities. Except as provided below, nothingin this Agreement shall be construed to: (i) prohibit any Member or itsAffiliates from continuing, acquiring, owning or otherwise participating in anyIndependent Activity that is not owned or operated by the Company, even if suchIndependent Activity is or may be in competition with the Company or (ii) requireany Member to allow the Company or the other Members to participate in theownership or profits of any such Independent Activity. To the extent any Memberwould have any rights or claims against the other Member as a result of theIndependent Activities of such Member or its Affiliates, whether arising bystatute, common law or in equity, the same are hereby waived with respect tothe operation of the Company except as provided below.

 

1.9.3 ConfidentialInformation. During the course of this Agreement, each Member may comeinto possession of confidential information and materials of the Company, theother Member and their respective members and Affiliates, which comprisesconfidential and proprietary information or data which is not readilyascertainable by proper means and which derives economic value, actual orpotential, from not being generally known. All information regarding theproducts or the business of the Company or other Members or their respectivemembers to which a Member may obtain access to under this Agreement shall bedeemed to be confidential and proprietary information or data of the Company orother Member as applicable, unless such Member can show such information hasbecome generally known to the public other than as a result of a breach ordefault of this Agreement. Any such information or materials are “Confidential,”and each Member agrees not to use or disclose such information except inaccordance with the terms of this Agreement. Each Member further agrees tomaintain Confidential information of the Company and of other Members inconfidence and limit disclosure on a need to know basis, to take all reasonableprecautions to prevent unauthorized disclosure, and to treat such informationat least as much care as it treats its own information of a similar nature,until the information becomes publicly available through no fault of thenondisclosing party. All Members shall keep confidential and not disclose to,discuss with or otherwise make available to any Person any Confidentialinformation 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 onbehalf of any Member or the Company (“Representatives”) on a “need-to-know”basis to the extent the assistance of Representatives is required in connectionwith 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 legalmeans available to minimize the disclosure to third parties, including withoutlimitation seeking a confidential treatment request or protective order; (ii) theMember compelled to make the disclosure shall inform the Company and the otherMember at least ten (10) business days (i.e., not a Saturday, Sunday, or aday on which banks are not open for business in the geographic area in whichthe non-disclosing party’s principal office is located) in advance of thedisclosure; and (iii) the Member compelled to make disclosure shall givethe Company or the other Member, as the case may be, a reasonable opportunityto review and comment upon the disclosure, and any request for confidentialtreatment or a protective order pertaining thereto, prior to making suchdisclosure. Moreover, no press release or other information release shall bemade by the Company or any Member without the prior approval 

 

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and consent of theMembers.

 

1.9.4 Enforcement.The Company and each Member recognizes that irreparable harm and damage willresult to the affected party in the event of any breach by any Member or theCompany of any of the covenants contained in this Agreement relating toconfidentiality. The Company and each Member agrees to use commerciallyreasonable efforts to obtain an executed confidentiality agreement from anyRepresentatives in accordance with Section 1.9.3 prior to the disclosureof any Confidential information to such Representatives. The Company and eachMember agrees that, in the event of such a breach and in addition to any otherlegal or equitable remedies to which the affected party may be entitled orwhich may be available, the affected party will be entitled to an injunctionfrom a court of law to restrain the violation of those covenants by the Companyor Member and all other Persons acting for or with such party, to damages or toboth 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 thosecovenants, and if the court finds any part of the covenants unreasonable as totime, area, or activity covered, the disclosing party agrees to abide by anyfinding, judgment or decree of the court as to what is reasonable and thedisclosing party agrees that the affect party may enforce this Agreement to theextent of such finding, judgment or decree. The Company and each Member furtheracknowledges that the provisions of this Section 1.9 shall survive thetermination of this Agreement, and shall continue thereafter in full force andeffect in accordance with the terms of this Section 1.9.

 

1.9.5 Acknowledgmentof Reasonableness. The Members hereby expressly acknowledge, represent andwarrant that they are sophisticated investors, they understand the terms,conditions and waivers set forth in this Section 1.9, and that theprovisions of this Section 1.9 are reasonable, taking into account therelative 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 Managerof 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 CapitalContributions. The Members shall make the contributions to the Company setforth opposite their names on Exhibit A within 15 calendar days of theEffective Date.

 

2.4           Additional CapitalContributions. If, during the term of the Company, funds available to theCompany (including any borrowings) are insufficient for the Company to carryout its purposes hereunder, the Manager may send a written request to eachMember and each Member shall contribute within 15 days following such writtenrequest their pro rata share (based on their then existing profits interest) ofthe funds needed for the Company to carry out its purposes hereunder Rich Dad’scapital contribution shall be based on the following percentage split: Rich Dad45%, WIN 55%.

 

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2.5           LimitationsPertaining to Capital Contributions.

 

2.5.1 Return ofCapital. Except as otherwise provided in this Agreement, no Member shallwithdraw any Capital Contributions or any money or other property from theCompany without the written consent of each other Member. Except as otherwisemay be provided for in this Agreement, under circumstances requiring a returnof any Capital Contributions, no Member shall have the right to receiveproperty other than cash, unless otherwise specifically agreed to in writing bythe Members at the time of such distribution.

 

2.5.2 No Interest orSalary. No Member shall receive any interest, salary or drawing withrespect to its Capital Contributions or its Capital Account or for servicesrendered on behalf of the Company or otherwise in its capacity as the Manageror as a Member, except as otherwise expressly provided in this Agreement.

 

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

 

2.5.4 No Third PartyRights. Nothing contained in this Agreement is intended or will be deemedto benefit any creditor of the Company, and no creditor of the Company will beentitled to require the Manager or any Member to solicit or demand AdditionalCapital Contributions.

 

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

 

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

 

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

 

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

 

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2.6           Failure toContribute.

 

2.6.1 Remedy forFailure to Contribute Capital Contributions. If any Member fails to fundits Initial Capital Contributions or Additional Capital Contributions when due,then the contributing Member shall have the right to either (a) cause anadjustment in the Members’ Profits Interests to the equal of the overallpercentage of contributions made by each party over the course of the previoustwelve months; or (b) initiate the buy-out provisions set forth in Section 8.8below.

 

2.6.2 Treatment ofDistributions. Upon a change in the Members’ Profits Interests as describedin Section 2.6.1, all future distributions of the Company occurring aftersuch 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 writingby the Manager at the time of a Member Loan, (a) each Member Loan shallbear simple noncompounded) interest at the Prime Rate per annum (provided thatany Wyoming laws limiting the rate of interest that may be legally charged withrespect to a Member Loan shall be taken into account and, if applicable, therate of interest charged on the Member Loan shall be reduced to the maximumrate of interest permitted by such laws), and shall be repaid solely from theCompany’s Net Cash Flow, prior to any distributions to the Members pursuant toSections 3.1 or 9 hereof, and (b) all payments on Member Loans shall beapplied first to repay interest on all Member Loans, in proportion to theunpaid interest outstanding on all such Member Loans, and then to repayprincipal on all Member Loans, in proportion to the unpaid principaloutstanding on all such Member Loans. No Member shall be required to make aMember Loan, unless that Member has agreed in writing to make such Member Loanand no Member shall have any obligation to repay the Member Loans of any otherMember or to make Additional Capital Contributions to the Company to provide itwith funds with which to repay Member Loans. Each Member shall have the rightto fund its pro rata share, based on the Member’s Profits Interest, of anyMember Loan pursuant to this Section 2.7.

 

2.8                               Contributionof Database and Lead Sources; Generation and Ownership of Leads.

 

2.8.1        In furtherance of the Business, eachMember agrees to use its reasonable best efforts to generate leads (i.e., identifypotential new customers not in existing database) for the Company’s marketingpurposes and shall share leads with the Company arising from such Member’sinternal database or lead source.

 

2.8.2        Notwithstanding the sharing of leadswith the Company, any Member generating such leads shall be deemed to jointlyown such leads with the Company. The non-originating Member shall have noownership claim (joint or otherwise) or right whatsoever to leads generated bythe other Member and shall not disclose such leads or use such leads other thanon behalf of the Company. Original leads provided by a Member which do not infact result in a consumer response are not leads generated by the Company, andthe Company shall have no ownership or licensing claims with respect to suchoriginal leads, and such original leads shall remain the sole property of theMember who contributed them. Notwithstanding the joint ownership of leads by anoriginating Member and the Company, in no event shall any Member, whetherduring the existence of the Company or following its dissolution, be restrictedin any way whatsoever from continuing to utilize leads and/or databases whichwere originated by such Member and shared with the Company.

 

2.8.3        All leads generated by the Company priorto its dissolution shall be deemed to be jointly owned by each Member and,following dissolution, each Member shall have the right to use such lead in anymanner whatsoever.

 

2.8.4        The Company shall maintain recordsidentifying the source (Rich Dad, WIN, or the Company) of all leads, the accuracyof which shall be subject to review from time to time by each Member in theirsole discretion.

 

2.9           Product andMaterials.

 

2.9.1 Promptly followingthe Effective Date, the Members shall review the WIN Materials for the purposeof determining which Materials shall be used by the Company in the Business. Inconsideration for the license rights granted by Rich Dad to the Companypursuant to the Rich Dad License Agreement, Rich Dad shall have editorial andeducational approval rights pursuant to the terms and conditions set forth inthe Rich Dad License 

 

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Agreement with respect tothe selection of WIN Materials and any other related materials for use by theCompany.

 

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

 

2.9.3  Within 15 days of the Effective Date, WIN andthe 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, andsubject to the provisions of Section 2.7 hereof, distributions of Net CashFlow, if available, shall be made to the Members on a quarterly basis in thefollowing order of priority:

 

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

 

3.1.2        Second, to the Members inproportion to their respective Unreturned Capital Contributions, until eachMember’s Unreturned Capital Contribution has been reduced to zero; and

 

3.1.3       The balance, to the Membersin proportion to their Profits Interests.

 

SECTION 4. TAXALLOCATIONS

 

4.1          Allocation of Profitsand Loss. (not used)

 

4.2          Limitation onAllocation of Losses. (not used)

 

4.3           Qualified IncomeOffset. If any Member unexpectedly receives any adjustments, allocation ordistributions 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 anamount and manner sufficient to eliminate the Adjusted Capital Account Deficitcreated by such adjustments, allocations or distributions as quickly aspossible. This Section 4.3 is intended to constitute a “qualified incomeoffset” within the meaning of Regulations Section 1.7041(b)(2)(ii)(d)(3).

 

4.4           Minimum GainChargeback. If there is a net decrease in Company Minimum Gain during aFiscal Year, each Member will be allocated, before any other allocation underthis Section 4, items of income and gain for such fiscal year (and ifnecessary, subsequent years) in proportion to and to the extent of an amountequal to such Member’s share of the net decrease in Company Minimum Gaindetermined in accordance with Regulations Section 1.7042(g)(2). This Section 4.4is intended to comply with, and shall be interpreted 

 

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

 

4.5           Member NonrecourseDebt Minimum Gain Chargeback. Notwithstanding any other provision of this Section 4,except Section 4.4 hereof, if there is a net decrease in MemberNonrecourse Debt Minimum Gain attributable to a Member Nonrecourse Debt duringany Fiscal Year of the Company, each Member who has a share of the MemberNonrecourse 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 ofthe net decrease in Member Nonrecourse Debt Minimum Gain attributable to suchMember Nonrecourse Debt, determined in accordance with Regulations Section 1.704-2(i)(4).Allocations pursuant to the previous sentence shall be made in proportion tothe respective amounts required to be allocated to each Member pursuantthereto. The items to be so allocated shall be determined in accordance withRegulations Section 1.704-2(i)(4). This Section 4.5 is intended tocomply with a minimum gain chargeback requirement of that Section of theRegulations and shall be interpreted consistently therewith.

 

4.6           NonrecourseDeductions. (not used)

 

4.7           Member NonrecourseDeductions. (not used)

 

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

 

4.9           Fees To Members OrAffiliates. Notwithstanding the provisions of this Section 4, in theevent that any fees, interest, or other amounts paid to any Member or anyAffiliate thereof pursuant to this Agreement or any other agreement between theCompany and any Member or Affiliate thereof providing for the payment of suchamount, and deducted by the Company in reliance on Section 707(a) and/or707(c) of the Code, are disallowed as deductions to the Company on itsfederal income tax return and are treated as Company distributions, then:

 

4.9.1 the Profits orLosses, 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 asCompany distributions; and

 

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

 

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

 

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Regulations thereunder,income, gain, loss and deduction with respect to any property contributed to thecapital of the Company shall, solely for tax purposes, be allocated among theMembers by the Manager so as to take account of any variation between theadjusted basis of such property to the Company for federal income tax purposesand its fair market value as agreed to by the Manager and the contributingMember using any method approved of under the Code, Regulations, or any otherIRS issuance.

 

**SECTION 5.MANAGEMENT**

 

5.1                     Managementof Company.

 

5.1.1 General.Except as specifically provided in Sections 5.4, 5.5 and 5.11 hereof, the rightto manage, control and conduct the business and affairs of the Company shall bevested 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 dailybusiness affairs of the Company, for making the day-to-day operating decisionsin carrying out the purposes, objectives and policies established by thisAgreement and the Members, and for implementing all Approved Business Plans andApproved Budgets adopted pursuant to the terms of this Agreement. The Managershall devote such time to the Company and its business as is appropriate tocarry out the Manager’s responsibilities hereunder, but shall not be obligatedto devote its full time efforts to the Company. Subject to the terms of theApproved Business Plans and Approved Budgets, the Manager (exercising suchskill and care as a prudent person with experience in the Business wouldexercise in dealing with its own property), shall have the rights and theduties to exert commercially reasonable efforts in a prompt, courteous andbusinesslike manner to do, accomplish and complete, in accordance with thisAgreement, all of the following:

 

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

 

5.1.1.2 Implement, usingthe Manager’s commercially reasonable efforts and subject to 5.5, the ApprovedBusiness Plan, and in connection therewith, undertake each and every act onbehalf of the Company as deemed necessary by the Manager to implement thepurposes of the Company, pursuant to authority delegated to the Managerpursuant to this Section 5.1;

 

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

 

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

 

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

 

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the Company areavailable, all bills and expenses of the Company in accordance with theApproved Budgets;

 

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

 

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

 

5.1.1.8 Maintain allfunds of the Company in a Company account in a bank or banks located in LeeCounty, Florida or any other location as agreed upon by the Members, and be thesignatory to such accounts;

 

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

 

5.1.1.10 Undertake suchactions as are necessary or desirable in order that the Company promptlycomplies with all material present and future laws, ordinances, orders, rules,regulations and requirements of all governmental authorities havingjurisdiction which may be applicable to the Company, its assets, and theoperations and management of the Company; and

 

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

 

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

 

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

 

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

 

5.1.1.16 Perform allother duties otherwise described in this Agreement to he carried out by theManager and take all actions reasonably deemed necessary to carry out any ofthe above rights and duties.

 

5.1.2 Designation ofManager. WIN is the initial Manager of the Company. Any Person then servingas 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 thisAgreement or engaging in acts constituting fraud, gross negligence or willfulmisconduct, unless in the case of a default, the Manager cures such defaultwithin 30 days after receipt of notice of default (a “Notice of Default”)from any Member specifying in reasonable detail the facts and circumstances ofsuch default, or (ii) in the case of a default, the Manager in good faithcommences to cure the default within 30 days following the Manager’s receipt ofthe 

 

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Notice of Default andthereafter prosecutes to completion with diligence and continuity the curingthereof and cures such default within a reasonable period of time. With respectto matters involving fraud, gross negligence or willful misconduct, the Managershall have no cure period. If the Manager disputes that “cause” exists underthe preceding sentences, it shall promptly so advise the Members in writing andthe determination of whether “cause” exists shall be made through the proceduredescribed in Section 5.7. During the pendency of the dispute resolutionprocess, the 30-day cure period shall be shall be tolled pending the outcomethereof, and if “cause” is determined to exist, such cure period shall commenceupon the date of such determination. Upon the removal of a Manager, areplacement Manager may be designated only upon the unanimous written approvalof the Members. At any time during the term of the Company when there is noManager, management of the Company shall revert to the Members. Nothing in thisSection 5.1.2 shall be construed to affect the rights and remedies of theother Members under Section 2.6 if the Manager fails to make AdditionalCapital Contributions as and when required under this Agreement.

 

5.1.3 Signature Powerof Manager. The Manager, acting alone and without the joinder of any otherMember, shall have the power to execute and deliver documents and instrumentsof every type and nature on behalf of the Company, which shall be binding onthe Company. Any Person dealing with the Company may rely, without furtherinquiry, upon the identity of the Manager set forth in the Company’sCertificate at the time action is taken by or on behalf of the Company by theManager, and may rely on a certificate signed by the Manager as to theexistence or nonexistence of any fact or facts which constitute a conditionprecedent to acts by the Manager or which are in any other manner germane tothe affairs of the Company.

 

5.1.4 Delegation ofAuthority to Officers. Subject to the approval of the Members, the Managermay designate one or more Persons, including its Affiliates, as officers of theCompany. 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 ofthe Company may include a chairman, chief executive officer, president, vicepresidents, a secretary and such other officers as the Manager deemsappropriate in the exercise of its discretion. The officers of the Company willnot be entitled to compensation for their services except in accordance with anApproved Budget.

 

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

 

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

 

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time submit revisions ormodifications to the Business Plan to the Members for approval in the samemanner; provided that the Manager shall submit annually an updated BusinessPlan containing such revisions and modifications as may be needed for approvalby the Members not later than November 1 of the year preceding the yearcovered by the proposed Business Plan, and the Members shall approve theupdated Business Plan by December 1 of each year in accordance with theprovisions of Section 5.4. The Business Plan, including modificationsthereto, approved by the Members shall be termed the “Approved Business Plan.”

 

5.3 Budgets. In furtheranceof the Business Plan, the Manager shall have prepared and attached hereto as Exhibit B(the “Initial Operating Budget”) an operating budget for the remainderof 2006, which shall have been approved by the Members. From time to timeduring the development and operation of the Business, the Manager shall prepareand present for the approval of the Members in accordance with Section 5.4a separate annual budget for the Business (each, a “Budget”). TheManager shall update all outstanding Budgets, including the annual operatingbudget, and present such Budgets for approval by the Members not later than November 1of the year preceding the year covered by the proposed Budget, and the Membersshall approve the updated Budgets, including the annual operating budget by December 1of each year in accordance with the provisions of Section 5.4. Budgetsshall include a reasonable contingency reserve for unanticipated costsassociated with the matters covered thereby. The Manager may from time to timesubmit revisions or modifications to Budgets to the Members for approval;provided that no revisions or modifications shall be implemented unlessapproved in accordance with Section 5.4 hereof. The Initial OperatingBudget and each other Budget, including any revisions thereto, which isapproved separately or as part of a Business Plan in accordance with Section 5.4hereof, shall be termed an “Approved Budget.” Specific expenditures to developand operate the Business may be made only pursuant to an Approved Budget; providedthat the Manager shall have discretion to use contingency reserves included inany Approved Budget in any reasonable manner and shall be permitted to makereasonable adjustments between line items reflected on an Approved Budget ifthe expenses intended to be paid pursuant to the line item from which funds aretransferred 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 amongthe items set forth in the Approved Budget (and were incurred at a cost greaterthan budgeted). Notwithstanding the foregoing, any increase in excess of tenpercent (10%) in any individual line item in an Approved Budget that alsoexceeds $100,000 shall require the approval of the Members. All expense itemsidentified in the Company’s Approved Budget from time to time shall constitute “ApprovedExpenses” of the Company. Until a Budget is otherwise modified as provided inthis Agreement, each Budget shall remain in effect subject to modificationsrequired by an increases in Non-Discretionary Expenditures in order to avoid amaterial adverse change to the financial condition or assets of the Company.Non-Discretionary Expenditures shall be deemed Approved Expenses until oneMember or the other disapproves of such expenditures. The Manager shall informthe Members within a reasonable time of any incurrence of a Non-discretionaryExpenditure.

 

5.4 Mechanism forObtaining Consents. The Manager may propose approval of a Business Plan,Budgets and amendments thereto and other matters required to be approved by theMembers 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 toobtain Member consent pursuant to Section 5.5, the procedure set forth in5.5.29 shall apply and not 

 

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

 

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

 

5.5.1                        Any amendment to thisAgreement;

 

5.5.2                        Requesting for approval all orany part of a Business Plan in a manner that is inconsistent with thisAgreement;

 

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

 

5.5.4                        The dissolution of the Companypursuant to Section 9.1.3 hereof,

 

5.5.5                        Admission of any new Member tothe Company;

 

5.5.6                        Filing a voluntary petition onbehalf of the Company seeking protection under the United States BankruptcyCode or debtor relief or insolvency laws of any jurisdiction;

 

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

 

5.5.8                        Any call for Additional CapitalContributions in excess of an Approved Budget unless they are: (i) anyNon-Discretionary Expenditures, (ii) any expense paid in an EmergencySituation, (iii) any other Approved Expenses, and (iv) the permittedvariances to an Approved Budget as described in Section 5.3 hereof or asotherwise permitted herein;

 

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

 

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

 

5.5.11                      Except for Member Loans permittedby Section 2.7 and 

 

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5.1.1, borrowingor incurring any indebtedness on behalf of the Company, making or delivering onbehalf of the Company any indemnity bond or surety bond, lending fundsbelonging 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 theCompany or another Member as a surety, guarantor, or accommodation party to anyobligation, or granting any lien or encumbrance on the assets of the Company,including, without limitation, any modification of any of the foregoing, unlessin accordance with the Member Loans permitted by Section 2.7 hereof;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

5.5.23                      Commingling any Company funds orcapital with the funds of any other person;

 

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

 

5.5.25                      Entering into one or morepartnerships, joint ventures, limited liability companies or other businessassociations between the Company and other Persons, except as described in anApproved Business Plan;

 

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

 

5.5.27                      Taking any action inconsistentwith the Approved Business Plan;

 

5.5.28                      Engaging or changing the Company’sindependent accountants; or

 

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

 

The Manager shall seekthe consent required by this Section 5.5 by delivering reasonably detailedwritten notice of the matter(s) requiring such consent to each Member inany manner reasonably designed to reach the Member, including via electronicmail, or in the matter set forth in Section 11. 1. Each Member shall have15 days from the receipt of such notice to advise the Manager of its decision(s) regardingsuch matter(s). A Member’s failure to respond to such consent request withinsuch 15 day period shall be deemed to be an affirmative vote 

 

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with respect to thematter(s) subject to such consent request.

 

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

 

(a) tendto impair or damage the goodwill associated with any trademarks or service marksused by the Company, whether such marks are owned by the Company or used underlicense from a third party;

 

(b) contestor in any way impair or tend to impair any part of the licensor’s right, titleand interest in trademarks or service marks used by the Company under licensefrom a third party; or

 

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

 

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

 

5.7                         DisputeResolution.

 

5.7.1 Initial DisputeResolution. It is the Parties’ desire that any disputes that might arisebetween them be amicably settled, without resort to litigation, and the Partieswill attempt to settle any such disputes through consultation and negotiationin good faith and in a spirit of mutual cooperation. All disputes ordisagreements arising between the Parties, out of or relating to thisAgreement, that cannot be resolved by the involved employees of the Parties,shall be brought before a conciliation committee, consisting of one managementexecutive from each Party. The executives shall be of at least vicepresidential level, and with the authority to bind the Parties. Theconciliation committee shall, within fifteen (15) days after a written requestfrom either Party, meet in person (or telephonically, if agreeable to bothParties) and attempt to work out a settlement. Such meeting shall be held atthe facility of the nonrequesting Party, or such other location as mutuallyagreed 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 anyclaims arising from or in connection with the subject matter of this Agreementmust be brought in (i) the state or federal courts in and for Lee, PalmBeach or Broward Counties, Florida, if an action is commenced by Rich Dad or (ii) thestate of federal courts in Arizona if an action is commenced by WIN. Theparties further waive the right and hereby agree not to assert by way ofmotion, as a defense or otherwise in any action, suit or other legal proceedingbrought in any such court, any claim that it, he or she is not subject to thejurisdiction of such court, that such action, suit or proceeding is brought inan inconvenient forum or that the venue of such action, suit or proceeding isimproper. Each party irrevocably and unconditionally consents to the service ofany process, pleadings, notices or other papers in a manner permitted by the rules ofthe state and federal courts serving the respective lawsuit. The prevailingparty shall be entitled to reasonable attorneys’ fees and costs.

 

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

 

5.9                      Compensation.

 

5.9.1 Fees.In consideration for the services to be performed by the Manager under thisAgreement, the Company shall pay the Manager a monthly fee**equal to *** of theCompany’s Net Seminar Revenues. Any adjustments in the fee shall be subject tothe unaminous written consent of the Members.

 

As used herein the term “Net Seminar Revenues” shallmean monies actually received by the Company less:

 

(a)           a reasonable reserve for returns andrefunds (ten percent or such other percentage as agreed upon by the parties)adjusted to actual returns on a quarterly basis;

 

(b)           royalty payments to the parties orthird parties;

 

(c)           applicable taxes; and

 

(d)           merchant fees.

 

5.9.2 Reimbursement ofExpenses of the Manager. The Manager shall be entitled to reimbursementfrom the Company for all reasonable out of pocket costs and expenses paid tothird parties in connection with the performance of its duties hereunder,including all actual and necessary direct expenses incurred by the Manager forlegal, accounting, auditing and similar services (whether rendered byAffiliates of the Manager or otherwise). For purposes of clarification, such expensesshall not include any payments made to affiliates of WIN, the salaries of anyemployee of WIN or Affiliates of WIN (other than reasonable direct compensationto seminar leaders) or any overhead expenses of WIN or Affiliates of WIN, whichamounts 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 forthin the Company’s Approved Budget for such period, and shall be identified as aseparate line item in such Approved Budget (i.e., the Approved Budget shallinclude a line item stating “amounts reimbursable to Manager”). No specificallocation of reimbursements to the Manager will be included in the ApprovedBudget (i.e., the line item will be an aggregate number for allreimbursements), but amounts actually paid or reimbursed to the Manager or itsAffiliates pursuant to this Section 5.9.1 will be reported to the Membersin accordance with Section 6.3 The Members shall have the right to objectto the amount of reimbursements paid or payable to the Manager or itsAffiliates (in connection with the adoption of the Approved Budget or revisionsor 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 thatthe amounts paid or payable to the Manager failed to satisfy the requirementsof this Section 5.92, but the Members shall have no right to object to theManager’s right to receive reimbursements which actually satisfy therequirements of this Section 5.9.2.

 

5.9.3 Limitation.Except as set forth in this Section 5.9, the Manager and the Members shallnot receive any reimbursements, fees or other compensation unless unanimouslyagreed from time to time by the Members. Approval of the budget, however, 

 

[***] Confidential treatment requested. Omittedportions have been filed separately with the Securities and ExchangeCommission.

 

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constitutes defaultapproval of any of the aforementioned, if applicable.

 

5.10                       EmergencySituations. Notwithstanding anything herein to the contrary, if theManager, in its commercially reasonable business judgment, concludes thatemergency repairs, replacements or other actions (including by way of exampleand limitation, the signing of documents) are immediately necessary for thepreservation or safety of persons or any portion of the Business (individuallyor collectively, an “Emergency Situation”) and the Manager after usingreasonably diligent efforts is unable to consult with the Members prior totaking any action, then the Manager may take said action without the priorapproval of the Members. If the Manager takes such action by reason of anEmergency Situation, the Manager shall notify the Members in writing as quicklyas possible after taking the action, the reasons therefor and the cost thereof.

 

**SECTION 6.BOOKS, RECORDS, REPORTS AND ACCOUNTING**

 

6.1 Records. TheManager shall keep or cause to be kept at the specified office of the Companythe following: (a) a current list of the full name and last knownbusiness, residence or mailing address of each Member, (b) a copy of theinitial Certificate and all amendments thereto, (c) copies of all writtenoperating agreements, including this Agreement, and all amendments to theoperating agreements, including any prior written operating agreements, nolonger in effect, (d) copies of any written and signed promises by Membersto make Additional Capital Contributions or Member Loans to the Company, (e) copiesof the Company’s federal, state and local income tax returns and reports, (f) copiesof all prepared financial statements of the Company, and (g) minutes ofevery meeting of the Members as well as any written consents of Members oractions taken by Members without a meeting. Any such records maintained by theCompany may be kept on or be in the form of any information storage device, orkept off site pursuant to arrangements with a suitable outside vendorspecializing in data and document storage, provided that the records so keptcan be obtained or are convertible into legible written form within areasonable period of time. Any Member or its designated representative shallhave the right, at any reasonable time, to have access to and inspect and copythe contents of such books or records, which, upon request, shall be madeavailable to such Member at the Company’s specified office in Lee County,Florida.

 

6.2 Fiscal Year andAccounting. The fiscal year of the Company shall be the calendar year. Allamounts computed for the purposes of this Agreement and all applicablequestions concerning the rights of Members shall be determined using the cashmethod of accounting. All decisions as to other accounting matters, except asspecifically 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 closeof each fiscal year, the Manager shall make available to the Members as of thelast day of that fiscal year reports containing unaudited financial statementson an accrual basis (as determined by the Manager) of the Company for thefiscal year, presented in accordance with generally accepted accountingprinciples, including a balance sheet, a statement of income, a statement ofMembers’ investment and a statement of cash flows.

 

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

 

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progress and status ofthe business of the Company. In addition, as soon as practicable, but in noevent later than 45 days after the close of each calendar quarter, the Managershall use its best efforts to furnish to the Members as of the last day of thatcalendar quarter reports containing unaudited financial statements of theCompany for that calendar quarter, including a balance sheet and statements ofincome and cash flows. The Manager also shall provide monthly statements to theMembers comparing actual Company expenses with those projected on the thencurrent Approved Budget.

 

6.5 Preparation of TaxReturns. The Manager shall arrange for the preparation and timely filing ofall returns of Company income, gains, deductions, losses and other itemsnecessary for federal and state income tax purposes and shall cause to befurnished to the Members the tax information reasonably required for federaland state income tax reporting purposes. The classification, realization andrecognition of income, gain, losses and deductions and other items, for federalincome tax purposes, shall be on that method of accounting as the Manager shalldetermine in its reasonable discretion with the advice of the Members and theCompany’s independent accountants.

 

6.6 Tax Elections.The Manager may in its reasonable discretion determine, with the advice of theCompany’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 MattersPartner” pursuant to the Code and is authorized and required to represent theCompany in connection with all examinations of the Company’s affairs by taxauthorities, including resulting administrative and judicial proceedings, andto expend Company funds for professional services and costs associatedtherewith. The Members agree to cooperate with the Manager and to do or refrainfrom doing any or all things reasonably required by the Manager to conductthose proceedings. The Manager agrees to promptly notify the Members upon thereceipt of any correspondence from any federal, state or local tax authoritiesrelating to any examination of the Company’s affairs. The Manager shall beprohibited from entering into any settlement or arrangement in excess of $5,000on behalf of the Company with respect to any federal, state or local taxauthorities without the express written approval of the Members.

 

**SECTION **7.**AMENDMENTS**

 

7.1   Amendments. This Agreement may not beamended, 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 Persondirectly or indirectly holding any interest in such Member directly orindirectly to Transfer any part of such interest), except for Transfers (a) approvedin 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 beadmitted as a Substituted Member only pursuant to Section 8.4 hereof, Anypurported Transfer which does not comply with the provisions of this Section 8shall be void 

 

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and of no force oreffect.

 

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

 

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

 

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

 

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

 

8.3.3        shall share indistributions from the Company with respect to the transferred interest, on thesame basis as the transferring Member.

 

8.4           Substituted Members.Except as specifically provided in Sections 8.2 and 8.5.9 or elsewhere in thisAgreement, no Person taking or acquiring, by whatever means, the interest ofany Member in the Company shall be admitted as a substituted Member in theCompany (a “Substituted Member”) without the written consent of allMembers, which consent may be withheld or granted in the sole and absolutediscretion 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 8or upon a Transfer of any interest in a Member that is prohibited by thisAgreement (a “Triggering Event”), the Members to whom a Triggering Eventhas not occurred (the “Option Members”) shall have the right, but not theobligation, to purchase the entire interest in the Company (the “OptionInterest’) of the Member to whom the Triggering Event occurred (the “SellingMember”), 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 bygiving written notice (the “Valuation Notice”) to the Selling Member(or, if applicable, its representatives, successors, or assigns) and to eachother Option Member at any time within six months following the Option Member’sactual knowledge of the Triggering Event.

 

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8.5.3 ValuationProcedure. For a period of 60 days following the Valuation Notice, theOption Members and the Selling Member (or, if applicable, the representatives,successors or assigns of the Selling Member) shall negotiate in good faith todetermine the fair market value of all of the Company’s assets, taken as awhole, exclusive of any goodwill or other intangible asset that does not have abook value for accounting purposes (the “Assets”). If the parties areunable to agree on the fair market value of the Assets within the prescribed60-day period, the parties shall, within 15 days following the end of such60-day period, unanimously select an appraiser or appraisers to determine thefair market value of the Assets. If the parties are unable to agree on anappraiser or appraisers within the foregoing 15day period, then at the electionof any party, the selection of an appraiser or appraisers shall be made asfollows: (a) each party shall select an appraiser, and (b) theappraisers selected by the parties shall in turn appoint another appraiser toperform the appraisal. Following his or their selection, the appraiser(s) shalldetermine as soon as practicable the fair market value of the Assets assuming,for purposes of determining such value, that the Assets are liquidated in anorderly manner over a period of six months. The parties’ agreement as to value,or if applicable, the appraiser’s (appraisers’) determination of value shall bebinding 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 finalappraisal 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 theSelling Member would receive pursuant to Section 9.2.3 if the Assets weresold 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 distributedin liquidation pursuant to Section 9.2 hereof. For the avoidance of alldoubt, no discount for marketability, minority interest or any other discountshall apply to the Selling Member’s interest.

 

8.5.5 Exercise ofRight. Within 60 days following the Valuation Date, each Option Membershall give written notice to the other Members stating whether such OptionMember desires to purchase the Option Interest. Each Option Member who gives atimely notice stating its intent to purchase the Option Interest is referred tohereinafter as a “Purchasing Member.” If there is more than onePurchasing Member, the Purchasing Members shall be entitled to purchase theOption Interest in proportion to their Profits Interests, or in such otherproportions as they may agree (with such proportions being referred tohereinafter as the “Purchase Percentages”). Each Purchasing Member shallthereafter be entitled to purchase its proportionate share of the OptionInterest (determined as provided in the immediately preceding sentence) bydelivering to the Selling Member (or, if applicable, to the representatives,successors or assigns of the Selling Member) the Purchasing Member’s negotiablepromissory note (the “Note”) in a principal amount equal to the purchaseprice determined under Section 8.5.4 multiplied by the Purchasing Member’sPurchase Percentage, payable in equal annual installments of principal togetherwith annual payments of interest at the Prime Rate, over a period not to exceedfive years, with the first installment due and payable one year from the dateof sale. The Note shall be secured by a collateral assignment of the portion ofthe Option Interest acquired by the Purchasing Member, in a commerciallyreasonable form determined by the Purchasing Member.

 

8.5.6 Deliveries bySelling 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 deliverto the Purchasing Member an executed assignment of the portion of the OptionInterest to be acquired by the Purchasing Member, sufficient to convey suchinterest to the Purchasing Member free and clear of any liens, claims orencumbrances, except those taken subject to by the Purchasing Member, asprovided in Section 8.5.8 below.

 

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

 

8.5.8 ClosingAdjustments. If the Option Interest is subject to any lien, claim orencumbrance, a Purchasing Member may elect (a) to cause the purchase price(or a portion thereof) to be applied to discharge such lien, claim orencumbrance, or (b) to take the relevant portion of the Option Interestsubject to such lien, claim or encumbrance and to reduce the purchase priceotherwise payable by the Purchasing Member to the Selling Member by the amountof 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 theOption Interest pursuant to this Section 8.5 may be completed by a nomineeof the Purchasing Member, in which case, the obligations of the PurchasingMember under this Section 8.5 shall be performed by the nominee ratherthan the Purchasing Member. If a nominee completes the purchase of the OptionInterest, the nominee shall be admitted as a Substituted Member in the Companyupon the execution and delivery by such nominee to the remaining Members of aninstrument in a form approved by the remaining Members in their reasonablediscretion, whereby such nominee agrees to be bound by the terms and conditionsof this Agreement from and after the date the nominee acquires the OptionInterest.

 

8.6           Distributions inRespect of Transferred Interests. If any interest in the Company istransferred during any accounting period in compliance with the provisions ofthis Section 8, all distributions on or before the date of such Transfershall be made to the transferor, and all distributions thereafter shall be madeto the transferee.

 

8.7           Right of FirstRefusal. In the event any Member proposes to sell all or any portion of itsinterest in the Company (at “Transferring Member”) to a third party,such Transferring Member shall deliver a written notice (the “TransferNotice”) to the Company and to the other Member (the “ROFO Offeree”).The Transfer Notice shall specify the interest in the Company the TransferringMember proposes to sell (the “Transfer Securities”) and shall describethe material terms of the third party offer (the “Third Party Offer”).If, following delivery of the Transfer Notice, the ROFO Offeree is interestedin purchasing all of the Transfer Securities, the ROFO Offeree shall, withintwenty (20) days thereafter, deliver a written notice to the TransferringMember expressing the ROFO Offeree’s interest in acquiring the TransferSecurities on the same terms as set forth in the Third Party Offer (the “Expressionof Interest”). If, following delivery of the Transfer Notice, the ROFO Offerreedetermines it is not interested in purchasing all of the Transfer Securities,the ROFO Offeree shall, within twenty (20) days thereafter, deliver a writtennotice of its decision not to purchase the Transfer Securities (the “RejectionNotice”). If the ROFO Offeree elects to 

 

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proceed with the purchaseof the Transfer Securities, such sale transaction shall be consummated withinninety (90) days following delivery of the Expression of Interest. In the eventthe ROFO Offeree elects not to purchase the Transfer Securities pursuant to theRejection Notice, the Transferring Holder shall have the right to sell theTransfer Securities to the third party pursuant to the terms of the Third PartyOffer. If such sale transaction is not completed with ninety (90) days of thereceipt of the Rejection Notice, the Transferring Member shall be obligated toreinitiate 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 theother 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 theCompany 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 “DeadlockEvent”), then the Consenting Member and the NonConsenting Member shall eachhave 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 DeadlockEvent, the Company shall give written notice (the “Company Notice”) tothe Consenting Member and the Non-Consenting Member of the occurrence of suchDeadlock Event. Each of the Consenting Member and the Non-Consenting Membershall have an option, continuing for a period of ninety (90) days, beginningwith the day following receipt of the Company Notice by both the Consenting andNon-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/sellrights 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”), whichshall set forth the interest in the Company held by such Notifying Member (the “SpecifiedInterests”) and the price (the “Selling Price”) at which the SpecifiedShares may be transferred, which shall be determined pursuant to the samevaluation procedures set forth in Section 8.5.3 hereof. The SpecifiedInterests shall include all Interests held by the Notifying Member. In theevent both the Consenting Member and the NonConsenting Member attempt toexercise their buy/sell rights under this Section 8.8, the operativeBuy/Sell Notice shall be the first notice received by a Notified Member.Notwithstanding anything in this Section 8.8 to the contrary, in the eventany license agreement from (i) Rich Dad to the Company is terminated forany reason, then only Rich Dad shall have the right to deliver a Buy/SellNotice, and (ii) WIN to the Company is terminated for any reason, thenonly WIN shall have the right to deliver a Buy/Sell Notice.

 

8.8.2 Notified Member’sOption. The Notified Member shall have an option, continuing for a periodof ninety (90) days beginning with the day following receipt of the Buy/SellNotice to elect: (i) to acquire all, but not less than all, of theSpecified Shares at the Selling Price and on the terms set forth in theBuy/Sell Notice, or (ii) to sell all, but not less than all, of the Sharesthen held by such Notified Member to the Notifying Member at the Selling Priceand on the terms set forth in the Buy/Sell Notice. The Notified Member mustselect one of the two foregoing options within such ninety day period and shallnotify the Notifying Member of the option it has selected prior to theexpiration of such ninety day period. If the Notified Member fails to notifythe Notifying Member of its selection prior to the expiration of such ninetyday period, the Notified Member shall be deemed to have 

 

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elected to sell itsShares to the Notifying Member at the Selling Price.

 

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

 

**SECTION 9.DISSOLUTION AND TERMINATION**

 

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

 

9.1.1             The sale of all orsubstantially all of the assets of the Company and the collection of theproceeds of such sale;

 

9.1.2             The unanimouselection by the Members to dissolve the Company;

 

9.1.3             Upon the entry of adecree of dissolution under the Act; or

 

9.1.4 Upon any otherWithdrawal Event, unless the business of the Company is continued by thespecific written consent of the remaining Member(s) given within 90 daysafter such event.

 

9.2                         WindingUp.

 

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

 

9.2.2 Effect ofFiling. After the dissolution of the Company, the Company shall cease tocarry on its business, except insofar as may be necessary for the winding up ofits business, but the Company’s separate existence shall continue untilarticles of termination have been filed with the Wyoming Secretary of State oruntil a decree dissolving the Company has been entered by a court of competentjurisdiction.

 

9.2.3 Liquidation andDistribution of Assets. Upon the dissolution of the Company, the Manager,or, if there is no Manager, the remaining Member(s), or a court appointedtrustee if there is no remaining Member, shall take full account of the Company’sliabilities and assets, and such assets shall be liquidated as promptly as isconsistent with obtaining the fair value thereof During the period of liquidation,the business and affairs of the Company shall continue to be governed by theprovisions of this Agreement, with the management of the Company continuing asprovided in Section 5 hereof. The proceeds from liquidation of the Company’sproperty, to the extent sufficient therefore, shall be applied and distributedin the following order:

 

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

 

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

 

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

 

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

 

9.4 Articles ofTermination. When all debts, liabilities and obligations of the Companyhave been paid and discharged or adequate provisions have been made thereforeand all of the remaining property and assets of the Company have beendistributed to the Members. articles of termination shall be executed and filedby the Manager, or if there is no Manager, by the remaining Members, with theWyoming Secretary of State.

 

9.5 Rights of theMembers Following Dissolution. Upon dissolution of the Company as describedin this Section 9, the Members shall have the following rights withrespect to the assets of the Company:

 

9.5.1.1 WIN shall havethe exclusive right to use all proprietary information owned by the Company atthe time of dissolution, including, without limitation, all handouts,workbooks, presentation manuals, software programs, or any other literature ormaterial and other collateral (the “Company Materials”) to the extent,and only to the extent, that WIN was the owner of any original works which gaverise to the derivative works comprising the Company Materials, provided,however, that WIN shall remove any and all Rich Dad logos, trademark(s) andbranding, as well as any materials comprising Rich Dad materials, or which arederived from Rich Dad materials or which would tend to create a likelihood ofconfusion with respect to affiliation or sponsorship (the “Rich DadProprietary Materials”), between the Company and Rich Dad, from suchmaterials 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 Materialcontributed to the Company.

 

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

 

9.5.1.3 Neither Membershall have any right whatsoever to use any 

 

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Company logo or tradename, unless agreed to in writing by the Members, provided, however, that RichDad shall have the exclusive right to use the Rich Dad Education name upon thedissolution of the Company, however, not in connection with any products or servicesas offered by the Company under 9.5.1.1 herein.

 

9.5.1.4 Any and alllicenses of intellectual property entered into between the Company and a Memberthat provide for the right by the Company to use the Member’s intellectualproperty described in such license agreement shall automatically terminate uponthe occurrence of a dissolution event and shall be of no further force oreffect.

 

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

 

**SECTION 10.CONVERSION TO CORPORATE FORM  **Notwithstandinganything to the contrary set forth in this Agreement, upon the consent of theMembers, 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 waivedby the Members), cause the Company to convert into a corporation (the “SuccessorCorporation”), by such means (including, without limitation, filing ofappropriate certificates of conversion and incorporation; merger orconsolidation or other business combination; transfer of all or a part of theCompany’s assets; and/or exchange of interest in the Company for securities ofthe Successor Corporation) as the Manager may reasonably select. Upon suchconversion:

 

(a)  eachMember’s interest in the Company shall be exchanged for, or otherwise convertedinto, the number of shares of common stock of the Successor Corporationrepresenting, as nearly as reasonably practicable, an equity interest thereinequivalent to the “economic interest” in the Company represented by such Member’sinterest immediately prior to the conversion (without regard to whether suchcorporation is subject to federal or state income taxation at the entitylevel); and

 

(b)  thecertificate of incorporation, bylaws and other organizational documents of suchcorporation (and/or, to the extent determined by the Members to be customarywith respect to the particular provisions of this Agreement in documentationtypically used in joint venture transactions, agreements among security holdersof such corporation) shall, to the extent reasonably practicable and unlesssuch conversion is being effected in connection with an initial public offering(“IPO) (in which case the Members shall be expressly authorized herebyto make such modifications with respect thereto as the deemed necessary oradvisable in connection with the IPO), reflect voting, management, exculpation,indemnification and other arrangements among the stockholders and directorswhich are comparable to the voting, management, exculpation, indemnificationand 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 anyprovision of this Agreement shall be in writing and shall be deliveredpersonally to the Person to whom the same is directed, sent by registered orcertified mail, return receipt requested, addressed to the Manager or any Memberat the address appearing below such Person’s name on Exhibit A, orby 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 hereinprovided, or to such other address as the parties may from time to time specifyby notice in accordance with this Section 11.1. Any such notice shall bedeemed to be delivered, given and received for all purposes as of the date sodelivered, if delivered personally or if sent by facsimile transmission, or, ifsent by certified or registered mail, three days following the date on whichthe same was deposited in a regularly maintained receptacle for the deposit ofUnited States mail, postage and charges prepaid.

 

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

 

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

 

11.4   Time. Time is of the essence withrespect to this Agreement.

 

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

 

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

 

11.7 Incorporation byReference. Every exhibit, schedule and other appendix attached to thisAgreement and referred to herein is hereby incorporated in this Agreement byreference.

 

11.8 AdditionalDocuments. Each Member, upon the request of any other Member, agrees toperform all further acts and execute, acknowledge and deliver any documentswhich may be reasonably necessary, appropriate or desirable to carry out theprovisions of this Agreement.

 

11.9 Variation ofPronouns. All pronouns and any variations thereof shall be deemed to referto masculine, feminine or neuter, singular or plural, as the identity of thePerson 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 dutiesof the Members.

 

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

 

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Company’s property.

 

11.12 CounterpartExecution; Facsimile Signatures. This Agreement may be executed in anynumber of counterparts pursuant to original or facsimile copies of signatureswith the same effect as if the Manager and all of the Members had signed thesame document pursuant to original signatures. All counterparts shall beconstrued together and shall constitute one agreement.

 

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

 

11.13.1 It has acquiredits interest in the Company for its own account, for investment, and not with aview to or for the resale, distribution, subdivision or fractionalizationthereof;

 

11.13.2 Except asotherwise permitted herein, it has no contract, undertaking, understanding,agreement or arrangement, formal or informal, with any person to sell, transferor pledge all or any portion of its interest in the Company and has no currentplans to enter into any such contract, undertaking, understanding, agreement orarrangement;

 

11.13.3 It has suchbusiness and financial experience alone, or together with its professionaladvisers, that it has the capacity to protect its own interests in connectionwith its acquisition of an interest in the Company;

 

11.13.4 It has sufficientfinancial strength to hold the interest in the Company as an investment andbear the economic risks of that investment (including possible complete loss ofsuch investment) for an indefinite period of time;

 

11.13.5 It has beenafforded an opportunity to ask such questions as it has deemed necessary ordesirable in order to evaluate the merits and risks of the investmentcontemplated herein;

 

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

 

11.13.7   This Agreement constitutes a legal, validand binding obligation of the Member enforceable against the Member inaccordance with its terms;

 

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

 

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

 

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reporting or regulatoryrequirements on the part of Rich Dad, including, without limitation, filingswith the Federal Trade Commission under the Hart-Scott Rodino AntitrustImprovements Act of 1976, as amended, except for such obligations to reportRich Dad’s allocable share of profits and losses under applicable state andfederal tax laws.

 

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

 

“Act” means the WyomingLimited Liability Company Act, as amended from time to time (or anycorresponding provisions of succeeding law).

 

“Additional CapitalContributions” means the additional Capital Contributionsmade under Section 2.4 hereof.

 

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

 

“Affiliate”means, with respect to any Person: (a) any Person directly or indirectlycontrolling, controlled by or under common control with such Person; (b) anyPerson owning or controlling 10% or more of the outstanding voting interests ofsuch Person; (c) any officer, director, or general partner of such Person;or (d) any Person who is an officer, director, general partner, trustee orholder of 10% or more of the voting interests of any Person described inclauses (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 maintainedfor such Person in accordance with the following provisions:

 

(a) To eachPerson’s Capital Account there shall be credited such Person’s CapitalContributions, such Person’s distributive share of Profits and any items in thenature 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 securedby any Property distributed to such Person.

 

(b) To eachPerson’s Capital Account there shall be debited the amount of cash and theGross Asset Value of any Property distributed to such Person pursuant to anyprovision of this Agreement, such Person’s distributive share of Losses and anyitems in the nature of expenses or losses which are specially allocatedpursuant to Section 4, and the amount of any liabilities of such Personassumed by the Company or which are secured by any property contributed by suchPerson to the Company.

 

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

 

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

 

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

 

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

 

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

 

“Capital Contribution”means, with respect to any Member, the amount of money and the net fair marketvalue of any property (other than money) contributed to the Company by suchMember 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 anycorresponding 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 ofthis 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 theCompany in the Business.

 

“Company Minimum Gain”has the meaning set forth in Regulations Section 1.7042(b)(2) and isdetermined by computing with respect to each nonrecourse liability of theCompany, the amount of gain (of whatever character), if any, that would berealized by the Company if it disposed (in a taxable transaction) of theProperty subject to such liability in full satisfaction thereof, and by thenaggregating 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 controlwith such Person. For the purposes of this definition, the terms “controlled”and “control” means the possession, directly or indirectly, of the power todirect or cause the direction of management and policies of a Person, whetherthrough 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 thisAgreement.

 

“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 forfederal income tax purposes, except as follows:

 

(a) Theinitial Gross Asset Value of any asset contributed by a Member to the Companyshall be the fair market value of such asset at the time of contribution to the

 

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

 

(b) The GrossAsset Value of all Company assets shall be adjusted to equal their respectivegross fair market values, as determined by the Members, as of the followingtimes: (A) the acquisition of an additional interest in the Company by anynew or existing Members in exchange for more than a de minimis CapitalContribution if the Members determine that such adjustment is necessary orappropriate to reflect the relative economic interests of the Members in theCompany; (B) the distribution by the Company to a Member of more than a deminimis amount of Company property as consideration for an interest inthe Company if the Members determine that such adjustment i s necessary orappropriate to reflect the relative economic interests of the Members in theCompany; (C) the liquidation of the Company within the meaning ofRegulations Section 1.704-1(b)(2)(ii)(g); and (D) upon the grant ofan interest in the Company (other than a de minimis interest) in considerationfor the provision of services to or for the benefit of the Company by anexisting Member acting in a Member capacity, or by a New Member acting in aMember capacity, or in anticipation of being a Member;

 

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

 

(d) if anelection under Code Section 754 has been made, the Gross Asset Value ofCompany assets shall be increased (or decreased) to reflect any adjustments tothe adjusted basis of the assets pursuant to Code Section 734(b) orCode Section 743(b), but only to the extent that those adjustments aretaken into account in determining Capital Accounts pursuant to TreasuryRegulation Section 1.704-1(b)(2)(iv)(m) and Section 4.1 hereof;provided, however, that Gross Asset Value shall not be adjusted pursuant tothis subsection (d) to the extent that the Manager determines that anadjustment pursuant to subsection (b) hereof is necessary or appropriatein connection with a transaction that would otherwise result in an adjustmentpursuant 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 1.9hereof.

 

“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.

 

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

 

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

 

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

 

“Member”means any Person identified as a Member in the introductory paragraph to thisAgreement. If any Person is admitted as Substituted Member pursuant to theterms 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.

 

“MemberNonrecourse Debt” has the meaning set forth in Section L704-2(b)(4) ofthe Regulations.

 

“MemberNonrecourse Debt Minimum Gain” means an amount, with respectto each Member Nonrecourse Debt, equal to the Company Minimum Gain that wouldresult 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 usedto (a) pay any royalties due pursuant to the Rich Dad License Agreementand WIN License Agreement, and (b) pay or establish reserves for Companyexpenses, debt payments (other than payments to Members in relation to MemberLoans 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-DiscretionaryExpenditure” means expenditures which the Company is requiredto pay by law or pursuant to existing contracts between the Company and anythird party in accordance with an Approved Business Plan. For example, suchexpenditures may include increases in taxes, loan payments, etc.

 

“NonrecourseLiability” has the meaning set forth in Section 1.704-2(b)(3) ofthe 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.

 

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

 

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

 

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

 

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

 

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

 

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

 

(a) Anyincome of the Company that is exempt from federal income tax, and not otherwisetaken into account in this definition in computing Profits or Losses, shall beadded to such taxable income or loss;

 

(b) AnyCompany expenditures described in Code Section 705(a)(2)(B), or treated assuch pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and nototherwise taken into account in this definition in computing Profits or Lossesshall be subtracted from such taxable income or loss;

 

(c) Gainor loss resulting from any disposition of Company property shall be computed byreference to the Gross Asset Value of the Company property disposed of,notwithstanding that the adjusted tax basis of such property differs from itsGross Asset Value;

 

(d) Inlieu of the depreciation, amortization and other cost recovery deductions takeninto account in computing such taxable income or loss, there shall be takeninto account the “Capital Account Depreciation” computed in accordance withsuch definition contained above;

 

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

 

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

 

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

 

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

 

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

 

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

 

“Rich Dad ProprietaryMaterials” 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 bepositive or negative) equal to (i) the hypothetical amount that Memberwould receive upon the liquidation of the Company, assuming that (x) allassets of the Company were sold for an amount equal to their respective GrossAsset Values, (y) all liabilities of the Company allocable to thoseproperties became due and were satisfied in accordance with their terms(limited with respect to each non-recourse liability, to the Gross Asset Valueof the asset securing such liability), and (z) all net assets of theCompany were distributed pursuant to Section 9.2.3.2 hereof as of the lastday of the fiscal year or the applicable period, reduced by (ii) theMember’s share of Company Minimum Gain and Member Nonrecourse Debt MinimumGain, 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 CapitalContribution” means, with respect to each Member, such Member’stotal Capital Contributions less distributions previously received by suchMember 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 andamong the Company and the WIN Subsidiaries relating to the Company’s use of theWIN Materials, a copy of which is attached hereto as Exhibit D tothis Agreement.

 

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

 

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

 

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

 

[REMAINDER OF PAGEINTENTIONALLY LEFT BLANK.]

 

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IN WITNESS WHEREOF, theparties 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: (   )    -        |
|        |                                                                             |  |  |  |  |  |  |

 

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**EXHIBIT**A

 
| **Manager and Members**                                                                                                                                                                                                                                     | ** ** | **Profits**   | ** ** | **Initial Capital** | ** ** |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|---------------|------------|---------------------|------------|
| **Names and Addresses**                                                                                                                                                                                                                                     | ** ** | **Interests** | ** ** | **Contribution**    | ** ** |
|                                                                                                                                                                                                                                                        |       |          |       |                |       |
| **Manager/Member:**                                                                                                                                                                                                                                         | ** ** | ** **    | ** ** | ** **          | ** ** |
|                                                                                                                                                                                                                                                        |       |          |       |                |       |
| Whitney  Information Network, Inc.                                                                                                                                                                                                                     |       | 51            | %          | $                   |       |   |
|                                                                                                                                                                                                                                                        |       |          |       |                |       |
| Attn:                                                                                                                                                                                                                                                       |       |          |       |                |       |
| Fax No.: (     )                                                                                                                                                                                     |       |          |       |                |       |
|                                                                                                                                                                                                                                                        |       |          |       |                |       |
| **Member:**                                                                                                                                                                                                                                                 | ** ** | ** **    | ** ** | ** **          | ** ** |
|                                                                                                                                                                                                                                                        |       |          |       |                |       |
| Rich Global, LLC                                                                                                                                                                                                                                            |       | 49            | %          | $                   |       |   |
|                                                                                                                                                                                                                                                        |       |          |       |                |       |
| Attn:                                          |       |          |       |                |       |
| Fax No.: (~                                                                                                                                                                                                                                                 |       |          |       |                |       |

 

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EXHIBIT C

Rich Dad LicenseAgreement

 

(See Attachment)

 

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EXHIBIT C

 

LICENSE AGREEMENT

 

Thisis an Agreement between Rich Global, LLC. a Wyoming limited liability company(Rich Dad) and Rich Dad Education, LLC, a Wyoming limited liability company, (the“Licensee”),

 

WHEREAS,Rich Dad and Whitney Information Network, Inc., a Colorado corporation(“WIN”), have entered into a Limited Liability Company Agreement of even dateherewith pursuant to which Rich Dad has agreed to enter into this LicenseAgreement and WIN has agreed to enter into a license agreement through whichLicensee is given the right to use certain intellectual properties relating tomarketing models and systems for conducting seminars (the WIN model) andcertain trade names, trademarks, and servicemarks (“Wealth Intelligence AcademyMarks”);

 

WHEREAS,Rich Dad has the right to grant licenses with respect to use of certainintellectual properties, including certain valuable trademarks, service marks,names, characters, symbols, designs, likenesses and visual representationsthereof.

 

WHEREAS,Licensee desires to utilize certain of those intellectual properties upon andin connection with certain seminars hereinafter described;

 

Accordingly,the parties agree as follows:

 

**1.Definitions.**

 

1.1.                            The term “Business” means the sole activitiesof promoting, marketing, and conducting educational seminars on PermittedSubjects utilizing the “Modified WIN Marketing Model” described in Appendix1.1.

 

1.2.                            The term “Permitted Subjects” mean thesubjects of real estate, business, the stock market, and such other subjects,if any, identified in Schedule 1.2 as may be amended in writing from time totime by the parties.

 

1.3.                            The term “Field of Use” means seminars on thePermitted Subjects offered to the general public which are not represented ashaving Rich Dad Personalities as speakers or participants. The Field of Usedoes not include “Coaching” or other subscription based programs.

 

1.4.                            The term “Rich Dad Personalities” meansauthors or co-authors of a work in the “Rich Dad”, “Rich Dad Advisor”, “RichFamily” or “Rich Woman” series of books and individuals otherwise associatedwith the Rich Dad brand and affiliated brands.

 

1.5.                            The term Know-How” means general and specificknowledge, experience and information, not in written or printed form.

 

1.6.                            The term “Business Data” means documents andother media (whether in human or machine readable form) pertaining toconducting the Business including, but

 

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notlimited to, plans, specifications, descriptions of procedures, quality andinspection standards, test records and data.

 

1.7.                            The term “Customer Data” means documents andother media (whether in human or machine readable form) containing information,regarding customer and prospective customers.

 

1.8.                            The term “Business Information” meansKnow-How, Business Data, and Customer Data.

 

1.9.                            The term “Licensed Rich Dad BusinessInformation” means Business Information applicable to the development orconducting the Business communicated to, or embodied in items delivered to, theLicensee by or on behalf of Rich Dad.

 

1.10.                      The term “Seminars” means seminars presentedby Licensee during the term of this License Agreement.

 

1.11.                      The term “Seminar Materials” means alladvertising and promotional materials, handouts, workbooks, presentations,manuals, software programs, and any other literature or material and othercollateral items employed, provided, distributed, sold, or otherwise madeavailable in connection with the Seminars.

 

1.12.                      The term “Confidential Information”, as usedin this License Agreement, means any and all Technology, business informationand/or data which is not readily ascertainable by proper means and whichderives economic value, actual or potential, from not being generally known,and which has been the subject of efforts that are reasonable under thecircumstances to maintain its secrecy. All Business Information and/orinformation relating to the products or operations of a party, which isprovided to the other party, or to which the other party otherwise obtainsaccess, pursuant to, or as a result of, this Agreement shall be treated asConfidential Information hereunder; Except such information which the otherparty can clearly show: (a) at the time of this Agreement is publicly andopenly known; (b) after the date of this Agreement becomes publicly andopenly known through no fault of the other party; (c) comes into the otherparty’s possession and lawfully obtained by the other party from a source otherthan from the party or a source deriving from the party, and not subject to anyobligation of confidentiality or restrictions on use; or (d) is approvedfor release by written authorization of the other party.

 

1.13.                      The term “Licensed Marks” means the tradename “Rich Dad Education”, the Rich Dad Education Logo (more particularlyidentified in Schedule 1.13 to this License Agreement), and such other tradenames, trademarks, and servicemarks identified in Schedule 1.13 (as may beamended from time to time by written agreement of the parties), as well as anyabbreviations, initialisms, and derivations thereof.

 

1.14.                      The term “Wealth Intelligence Academy Marks”means the trade names, trademarks, and servicemarks identified in Schedule 1.14to this License

 

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Agreement (as may beamended from time to time by written agreement of the parties), as well as anyabbreviations, initialisms, and derivations thereof.

 

1.15.                      The term “Territory” means theUnited States of America and Canada.

 

1.16.                      The term “Accounting Period”shall mean a three (3) month period commencing on January 1, April 1, July 1 and October 1 and ending on March 31, June 30,September 30 and December 31, respectively, during the Term of thisLicense Agreement.

 

1.17.                      The term “Term” means the periodof time from the execution date of this Agreement until the Agreement isterminated as provided in Paragraph 10.2 hereof.

 

**2.Grant of License:**

 

2.1.                            Subjectto the terms and conditions of this License Agreement, Rich Dad hereby grantsto the Licensee:

 

a.                                     Aright and license to use, subject to Section 6, the Licensed Rich DadBusiness Information in, and in connection with, the Business in the Field ofUse in the Territory.

 

b.                                    Aright and license to use the Licensed Marks in connection with the Business inthe Field of Use in the Territory.

 

2.2.                            TheLicensee shall not:

 

a.                                     usethe Licensed Rich Dad Business Information other than as permitted by thisLicense Agreement;

 

b.                                    usethe Licensed Marks other than as permitted by this License Agreement,

 

c.                                     duringthe term of this License Agreement provide seminars or, subject to Section 5,products or services, with which the trade name “Rich Dad Education”, the RichDad Education Logo, and such other Licensed Marks as may be agreed to by theparties are not used;

 

d.                                    duringthe term of this License Agreement use any trademarks, service marks, or tradenames other than Licensed Marks in connection with seminars or, subject to Section 5,products or services; exceptthat certain seminars of the type presently known as Wealth IntelligenceAcademy (WIA), more fully identified in Schedule 2.2d, may be co-branded withthe Wealth Intelligence Academy Marks

 

e.                                     duringthe term of this License Agreement provide seminars other than pursuant to thisLicense Agreement; or

 

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f.                                       duringthe term of this License Agreement, advise on, promote, offer for sale or sell:

 

i.                                        anyinvestments or opportunities to invest; or

 

ii.                                     anyproduct or service not approved by Rich Dad before hand in writing pursuant to Section 5.

 

2.3.                            RichDad shall not, during the term of this License Agreement, grant any third partya license to use the Licensed Trademarks within the Field Of Use except thatRich Dad may license third-party use of licensed trademarks within Field Of Usein connection with courses that are taught as part of the curriculum atlearning institutions (e.g. K-12, Colleges, Universities). Licenseeacknowledges that Rich Dad may itself provide, or separately license others toprovide, products and/or services outside of the Field of Use. Rich Dad mayprovide seminars under the Licensed Marks in which Rich Dad Personalities arespeakers or participants, and Rich Dad Personalities may speak or participatein seminars hosted or sponsored by third parties.

 

2.4.                            TheLicensee may not grant sublicenses hereunder or assign this License to anythird party without the prior written approval of Rich Dad. Any attemptedsublicense or assignment in derogation of this provision shall be null andvoid.

 

**3. Use of and Rights in the Licensed Rich DadBusiness Information**

 

3.1.                            RichDad shall provide to Licensee, in such form as reasonably requested byLicensee, Customer Data applicable to the development or conducting theBusiness (i.e., comprising Licensed Rich Dad Business Information), pursuant tothe LLC Agreement within a reasonable time, and shall provide seasonableupdates.

 

3.2.                            Licenseeshall submit a marketing plan to Rich Dad for approval specifying the frequencyof contact with respect to customers reflected in the Customer Data and suchother information as Rich Dad may reasonably request. Licensee shall notcontact such customers until such plan is approved by Rich Dad or other than inaccordance with such approved plan.

 

3.3.                            Licenseeacknowledges and agrees that this License Agreement grants Licensee no title orright of ownership in or to the Licensed Rich Dad Business Information. TheLicensee shall not at any time do or cause to be done any act, omission, orthing contesting or in any way impairing or tending to impair any part of RichDad’s right, title and interest in the Licensed Rich Dad Business Information.

 

3.4.                            Inthe event the Licensee shall be deemed to have acquired any rights in theLicensed Rich Dad Business Information in the Territory (or anywhere in theworld), the Licensee shall assign, and agrees to execute all documentsreasonably requested by Rich Dad to assign, all such rights in the LicensedRich Dad Business Information to Rich Dad or its nominee.

 

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3.5.                            Nothingin this License Agreement shall limit the right of Rich Dad to limit the rightsor access of the Rich Dad to its own Business Information, or Licensed Rich DadBusiness Information.

 

**4.Use of and Rights in the Licensed Marks, Marking:**

 

4.1.                            TheLicensee shall use the Licensed Marks only in accordance with the terms of thisAgreement, and shall not use the Licensed Marks, any derivations thereof, orany Mark confusingly similar thereto, except as permitted under this Agreement.

 

4.2.                            TheLicensee shall maintain high standards of quality, style, appearance andservice with respect to all seminars provided hereunder, and Seminar Materials.All seminars; and Seminar Materials, shall be in accordance with all applicablelaws and regulations, and shall not violate or infringe any right of privacy orpublicity, copyright, or trademark or constitute defamatory, obscene, orunlawful matter, or otherwise violate or infringe any personal or proprietaryrights of any person, firm, or corporation.

 

4.3.                            Alluses of Licensed Marks are subject to approval of Rich Dad. The Licensed Marksshall be used only in connection with seminars and Seminar Materials that havebeen approved by Rich Dad pursuant to Section 5.

 

4.4.                            AllSeminar Materials shall prominently display the Rich Dad name, Rich Dad Logo,and such other Licensed Marks as agreed to by the parties, and shall includeall proprietary notices (e.g., trademark markings, copyright notice, patentmarking) reasonably requested by Rich Dad.

 

4.5.                            TheLicensee acknowledges the validity of the Licensed Marks. The Licensed Marks(and all versions and derivatives thereof) are owned by Rich Dad and shall beand remain the exclusive property of Rich Dad. All rights in and to theLicensed Marks other than those specifically granted to the Licensee herein,are reserved to Rich Dad for its own use and benefit. The Licensee shall notacquire any ownership rights in or to the Licensed Marks and all use of theLicensed Marks by the Licensee shall inure to the benefit of Rich Dad or itsnominee.

 

4.6.                            Inthe event the Licensee shall be deemed to have acquired any rights in theLicensed Marks within the Territory (or anywhere in the world), the Licenseeshall assign, and agrees to execute all documents reasonably requested by RichDad to assign, all such rights in the Licensed Marks to Rich Dad or itsnominee.

 

**5.Quality Control**

 

5.1.                            AllSeminars (including curriculum) and all Seminar Materials shall be subject toapproval of Rich Dad. The Licensee shall provide Rich Dad access to samples forquality review upon Rich Dad’s reasonable request.

 

5.2.                            ApprovalProcess

 

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a.                                     Licenseeshall provide Rich Dad a syllabus (in such form as Rich Dad may reasonablyrequest) for each Seminar and samples of all associated Seminar Materials(including any collateral items not bearing the Licensed Marks) prior tooffering or conducting the Seminar or distributing or offering for sale orotherwise making available to the public the Seminar Materials.

 

b.                                    UnlessRich Dad notifies Licensee that the Seminar or Seminar Materials are rejectedwithin thirty (30) days from receipt by Rich Dad of the samples, Licensee maygo forward with offering the Seminar and Seminar Materials, subject toparagraph 5.3.

 

c.                                     Aftersamples have been approved Licensee may not make any material change in themerchandise or materials without Rich Dad’s prior approval.

 

d.                                    Licenseeshall provide Rich Dad, without charge, additional samples of each item ofSeminar Materials from time to time as Rich Dad may reasonably request.

 

e.                                     Paragraph5.2b notwithstanding, any product, service or other collateral items (whetheror not bearing the Licensed Marks) provided, distributed, offered for sale, orotherwise made available in connection with the Seminars shall be separatelysubmitted to Rich Dad, and shall not be provided, distributed, offered forsale, or otherwise made available in connection with the Seminars unless anduntil Rich Dad approves such product, service or other collateral items inwriting.

 

5.3.                            IfRich Dad determines at any time that there is a deficiency in a Seminar orSeminar Materials, Rich Dad shall notify Licensee of the deficiency, andLicensee shall, as soon as practicable, but in any case within a 30-day periodfrom such notice remedy the deficiency to Rich Dad’s satisfaction.

 

**6.Confidentiality**

 

6.1.                            Eachparty acknowledges the other’s Confidential Information is unique and valuableand was developed or otherwise acquired by the other at great expense, and thatany unauthorized disclosure or use of the other’s Confidential Informationwould cause the other irreparable injury loss for which damages would be aninadequate remedy. The party agrees to hold such Confidential Information instrictest confidence, to use all efforts reasonable under the circumstances tomaintain the secrecy thereof, and not to make use thereof other than inaccordance with this License Agreement, and not to release or discloseConfidential Information to any third party without the other’s prior writtenconsent, subject to a court order, or subject to a sublicense consistent withthis Agreement and requiring thesublicensee to maintain the Confidential Information in strictest confidence,to use all efforts reasonable under the circumstances to maintain the secrecythereof,

 

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not to make use thereofother than in accordance with the sublicense Agreement, and not to release ordisclose Confidential Information to any third party without the other’s priorwritten consent.

 

6.2.                            Eachparty further acknowledges that any violation of this Section 6 shallconstitute a material breach of this License Agreement resulting in irreparableinjury to the non-breaching party and agree that, in addition to any and allother rights available to the non-breaching party by law or by this Agreement,the non-breaching party shall have the right to have an injunction enteredagainst the party to enjoin any further violations of this Agreement.

 

**7.License Fees and Reporting**

 

7.1.                            Inpartial consideration of the Licenses granted hereunder, the Licensee shall payto Rich Dad a royalty in the amount of *** of gross revenue. Royalties withrespect to activities within an Accounting Period shall be paid to Rich Dadwithin 30 days of the end of the Accounting Period except that no royalties orlicense fees shall be paid to Rich Dad prior to one hundred fifty (150) daysfollowing the initial free customer acquisition Seminar. Payments will be madein U.S. Dollars and shall be considered to have been made when received by RichDad at its principal place of business.

 

7.2.                            Grossrevenue shall be considered realized when received by Licensee and shall be netof any separately itemized taxes, shipping, rebates, and discounts.

 

7.3.                            Foreach Accounting Period, the Licensee shall render to Rich Dad, a writtenstatement, in such form as Rich Dad may request, setting forth the place, date,subject and attendance of seminars provided by Licensee during the AccountingPeriod, the applicable admission price, and such other information as Rich Dadmay reasonably request to verify the royalty payments due hereunder. Suchstatement shall be provided whether or not a royalty payment for the AccountingPeriod is to be made. The Licensee shall keep-such written records respectingseminars and attendance thereat put on by the Licensee as Rich Dad mayreasonably request so that royalties payable hereunder may be accuratelydetermined, and shall permit such records to be examined by Rich Dad or itsauthorized representative at any reasonable time during regular business hoursto verify the records, reports and payments herein provided.

 

7.4.                            Licenseeshall be responsible for, and shall pay, all sales, value added and similartaxes, if any, which may be imposed on any receipts of the seminars hereunder,as well as any other tax based upon Licensee’s use of the Licensed Rich DadBusiness Information, or Licensed Marks in connection with the seminars.

 

**8.Performance Requirements**

 

8.1.                            Licenseeshall use all reasonable commercial efforts to exploit and use the LicensedRich Dad Business Information and Licensed Marks for the benefit of Licenseeand Rich Dad.

 

[***] Confidential termsomitted and provided separately to the Securities and Exchange Commission.

 

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8.2.                            Licenseeshall advertise and promote the seminars in a manner consistent with normalbusiness practices using all reasonable commercial efforts to achieve themaximum attendance possible for its seminars.

 

8.3.                            Inthe event of any of the following circumstances, Rich Dad at its solediscretion may, by written notice, terminate the licenses under this LicenseAgreement:

 

a.                                     theLicensee fails to make seminars available for sale in the marketplace within 6months of the Effective Date;

 

b.                                    anytime after the first anniversary of this Agreement, the number of free customeracquisition Seminars provided fall below 6 in two of three successiveAccounting Periods.

 

**9.Warranties and Representations.**

 

9.1.                            RichDad warrants and represents that:

 

a.                                     Ithas the right to grant the licenses and enter into this Agreement withoutseeking the approval or consent of any third party and without payments to anythird party;

 

b.                                    Thereare no existing or threatened claims or proceedings by any entity relating tothe Licensed Rich Dad Business Information, or Licensed Marks or challengingRich Dad’s ownership of the same;

 

c.                                     Noneof the Licensed Rich Dad Business Information, or Licensed Marks are subject toany outstanding order, decree, judgment, stipulation, written restriction,undertaking or agreement limiting the scope or use of the Licensed Rich DadBusiness Information, or Licensed Marks or declaring any of it abandoned;

 

d.                                    Tothe best of Rich Dad’s knowledge, with respect to the Licensed Rich DadBusiness Information, or Licensed Marks, Rich Dad has not interfered with,infringed upon, misappropriated, or otherwise come into conflict with anyintellectual property rights of third parties, and Rich Dad has not receivedany charge, complaint, claim, or notice alleging any such interference,infringement, misappropriation or violation nor does Rich Dad have anyknowledge that any such charge or claim may be forthcoming; and

 

e.                                     Tothe best of Rich Dad’s knowledge, any trade secrets comprising part of theLicensed Rich Dad Business Information have been properly maintained as tradesecrets.

 

9.2.                            Licenseewarrants and represents that::

 

a.                                     Licenseehas all rights necessary and is fully authorized to enter into and performunder this Agreement;

 

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b.                                      There are no existing or threatenedclaims or proceedings by any entity against Licensee that would impair Licensee’sability to perform under this agreement.

** **

**10.Term and Termination.**

** **

10.1.**                     **The licensehereunder shall commence upon the Effective Date, and shall continue untilterminated pursuant to Paragraph 10.2 of this Agreement.

 

10.2.                      The licensehereunder may be terminated

 

a.                                       By either partyin the event of a breach of this License Agreement by another party that issusceptible of cure, immediately, upon the end of a 30-day period after writtennotice of such breach to the breaching party, if such breach is not curedwithin the 30-day period.

 

b.                                      By eitherparty, in the event of a breach of this Agreement by another party that is notsusceptible of cure, immediately, upon written notice of such breach to theother party.

 

c.                                       By eitherparty, immediately, if the other party becomes insolvent, makes an assignmentfor the benefit of its creditors, or becomes the subject of any bankruptcy orinsolvency proceedings, or ceases to do business.

 

d.                                      By Rich Dadpursuant to Paragraph 8.3.

 

e.                                       By Rich Dad,immediately, in the event of a breach by Licensee (that is susceptible of cure)which impairs or tends to impair the value of, the goodwill associated with, orany part of Rich Dad’s right, title and interest in, the Licensed Trademarksand/or the Licensed Rich Dad Business Information, if after written notice ofsuch breach to Licensee, such breach is not cured as soon as practicable, butin any case within a 30-day period from such notice.

 

f.                                         By Rich Dad,immediately, in the event that Licensee attempts to assign, transfer orsublicense any of the rights and licenses’ granted hereunder without Rich Dad’sprior written approval except as permitted under Paragraph 2.4

 

g.                                      By Licensee,immediately, in the event that Licensee is enjoined from practicing theLicensed Rich Dad Business Information by a court of competent jurisdiction, byreason of the Licensed Rich Dad Business Information per se violating the rightsof a third party. This provision, however, shall not apply if the injunctionrelates to:

 

i.                                        a product,system, combination, method or process in which the Licensed Rich Dad BusinessInformation is or may be used, where use of the Licensed Rich Dad BusinessInformation standing alone is not

 

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enjoined;

 

ii.                                     a modificationor other alteration of the Licensed Rich Dad Business Information by any personor entity other than Rich Dad, where use of the unmodified or unalteredLicensed Rich Dad Business Information provided by Rich Dad is not enjoined;

 

iii.                                  an aspect orfeature of the Licensed Rich Dad Business Information, not specificallyproposed by Rich Dad and specifically required by Licensee or implemented by orfor Licensee, where the Licensed Rich Dad Business Information, without suchaspect or feature is not enjoined; or

 

iv.                                 one manner ofpracticing the Licensed Rich Dad Business Information, where the practice ofanother commercially viable manner of practicing the Licensed Rich Dad BusinessInformation is not enjoined.

 

10.3.                      Upontermination of the license hereunder, all rights and privileges in and to theLicensed Rich Dad Business Information and Licensed Marks granted to theLicensee herein shall automatically revert to Rich Dad or its nominee, and theLicensee shall immediately cease any use thereof.

 

10.4.                      Paragraphs 3.4,and 4.6, and Sections 6 (Confidentiality), and 11 (Indemnification) hereofshall survive termination (for any reason) of this License Agreement.

 

**11. Indemnification.**

** **

11.1.                      Each partyshall defend, indemnify and hold harmless the other party against and from allclaims, demands or causes ofaction, as well as any and all damages, expenses, costs, interest andreasonable legal fees, including such fees incurred on appeal, in any wayrelated to, arising out of or connected with a breach of the indemnifying party’srepresentations, warranties or agreements, or otherwise with respect to theindemnifying party’s conduct and actions, under and pursuant to this Agreement.

 

**12. Insurance.**

** **

12.1.                      Licensee shallobtain and maintain in effect during the term of this Agreement and so long asLicensee uses Licensed Rich Dad Business Information and/or the Licensed Marks,appropriate liability insurance policies in such amounts and against such risksas are obtained and maintained by companies similarly situated, and Licenseeshall, at Licensee’s expense, name Rich Dad as an additional insured under suchpolicies. Licensee shall furnish Rich Dad, for Rich Dad’s review and approval,a certificate of insurance evidencing the insurance coverage then in effect,which certificate shall indicate that the policies of insurance shall not becancelable without at least 30 days prior written notice to Rich Dad.

 

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**13. Waiver.**

** **

13.1.                      The failure ofeither party at any time or times to demand strict performance by the otherparty of any of the terms, covenants or conditions set forth herein shall notbe construed as a continuing waiver or relinquishment thereof, and either partymay at any time demand strict and complete performance by the other party ofsaid terms, covenants and conditions.

 

**14. Notices.**

** **

14.1.                      All notices andother written communications required to be given under this Agreement shall bein writing and shall be delivered to the addressee in person, mailed byregistered or certified mail, return receipt requested, or transmitted viatele-facsimile (fax). Any such notice shall be deemed to be delivered, givenand received for all purposes as of the date so delivered, if delivered personallyor if sent by facsimile transmission, or, if sent by certified or registeredmail, three days following the date on which the same was deposited in aregularly maintained receptacle for the deposit of United States mail, postageand charges prepaid. The addresses and Fax numbers of the parties (untilwritten notice of change shall have been given) shall be as follows:

 
| To  Rich Dad     |   | Rich  Global LLC                |
|------------------|--------|---------------------------------|
|             |   | 4330  North Civic Center Plaza, |
|             |   | Scottsdale,  Arizona 85251      |
|             |   |                            |
|             |   | Fax:                            |
|             |   |                            |
| With  a copy to: |   |                            |
|             |   |                            |
| To  Licensee:    |   |                            |
|             |   |                            |
|             |   |                            |
| With  a copy to: |   |                            |
|             |   |                            |

** **

**15. Binding Effect.**

** **

15.1.                      This Agreementshall be binding upon and inure to the benefit of the parties hereto and theirrespective successors and permitted assigns.

 

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**16. Governing Law.**

 

16.1.                      This agreementis made under and shall be governed by and construed in accordance with thelaws of the United States and the internal laws of the State of Arizona withoutreference to principles of conflict of laws.

 

**17. Force****Majeure****.**

 

17.1.                      To the extentany event beyond the control of either party (such as an act of God, action ofthe elements, man-made or natural disaster, industry or supplier strike orother labor disturbance, or civil or military disturbance) shall prevent suchparty from performing any of its duties or obligations hereunder by the dateprovided or to be provided, the time for such performance shall be deemedextended for a period of time equivalent to the duration of such event;provided, however, that the party so prevented from performing must give promptwritten notice to the other party of the nature of such event, the date whensuch event shall have taken place, and the date when the duration of such eventshall have terminated; and further provided, however, that if performance shallbe so prevented for a period of more than six months, the other party mayterminate this Agreement by written notice of such termination, and thereafterneither party hereto shall be under anyfurther liability or obligation to the other hereunder.

 

**18. Dispute Resolution.**

** **

18.1.                      It is theParties’ desire that any disputes that might arise between them be amicablysettled, without resort to litigation, and the Parties will attempt to settleany such disputes through consultation and negotiation in good faith and in aspirit of mutual cooperation. All disputes or disagreements arising between theParties, out of or relating to this Agreement, that cannot be resolved by theinvolved employees of the Parties, shall be brought before a conciliationcommittee, consisting of one management executive from each Party. Theexecutives shall be of at least vice presidential level, and with the authorityto bind the Parties. The conciliation committee shall, within fifteen (15) daysafter a written request from either Party, meet in person (or telephonically,if agreeable to both Parties) and attempt to work out a settlement. Suchmeeting shall be held at the facility of the non-requesting Party, or suchother location as mutually agreed upon by the Parties.

 

18.2.*                     *Notwithstandingthis Section 18, judicial proceedings may be brought without need forprior arbitration:

 

a.                                       by eitherParty, for interim relief pending resolution pursuant to this Section 18of the Agreement; or

 

b.                                      by Rich Dad fornonpayment by Licensee of undisputed royalties

 

c.                                       by either Partyfor injunctive relief pertaining to violation of Section 6,Confidentiality.

 

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**19.Enforcement of****Intellectual****Property Rights**

** **

19.1.                      Notice ofInfringement. Rich Dad and Licensee shall promptly notify one another inwriting of any alleged infringement of the Licensed Marks withinthe Field Of Use. Within 15 days of the receipt of such notice or such otherperiod as may be agreed to by the parties, Rich Dad and Licensee shall meet andformulate a strategy for resolving the alleged infringement.

 

19.2.                      Rich Dad andLicensee (to the extent permitted under the law) each shall have the right toinstitute an action for such an infringement of the Licensed Marks against suchthird party in accordance with the following:

** **

a.                                       If Rich Dad andLicensee agree to institute suit jointly, the suit shall be brought in boththeir names; the out-of-pocket costs thereof shall be borne equally by Rich Dadand Licensee or as otherwise agreed by the parties; and recoveries, if any,whether by judgment, award, decree or settlement, shall be divided in order asfollows:

 

i.                                        reimbursementto Rich Dad and Licensee for all costs of the litigation; and

 

ii.                                     any remainingrecovery will be divided between Rich Dad and Licensee with damagesattributable to activities outside of the Field of Use (if any) paid to theRich Dad and the remainder divided equally between the parties. Rich Dad shallchoose lead legal counsel, subject to Licensee’s approval, which shall not beunreasonably withheld, and shall exercise control over such action. However,Rich Dad shall not enter into any settlement without Licensee’s approval, whichapproval shall not be unreasonably withheld, and Licensee may, if it sodesires, be represented by counsel of its own selection, the fees for whichcounsel shall be paid by Licensee at Licensee’s sole expense (and notreimbursable hereunder).

** **

b.                                      In the absenceof agreement to institute a suit jointly, Rich Dad may institute suit, and, atits option, join Licensee as a plaintiff or otherwise appropriate participantin such legal process. Rich Dad shall bear the entire cost of such litigationand shall be entitled to retain the entire amount of any recovery by way ofjudgment or settlement, Rich Dad shall choose lead legal counsel and exercise controlover such action, provided, however, that Licensee may, if it so desires, berepresented by counsel of its own selection, the fees for which counsel shallbe paid by Licensee at Licensee’s sole expense (and not reimbursablehereunder).

 

c.                                       In the absenceof agreement to institute a suit jointly and Rich Dad determines not toinstitute a suit, as provided in paragraph 19.2b above, Licensee shall have theright, but not the obligation, to pursue legal process to redress any allegedinfringement. Upon Rich Dad’s written consent, Licensee may bring such legalaction in the name of Rich Dad and may make Rich Dad a party plaintiff orotherwise appropriate participant in such

 

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legalprocess. Licensee shall pay Rich Dad’s legal expenses incurred in such legalprocess, and shall indemnify Rich Dad against any order for costs that may bemade against Rich Dad in such proceedings. Should Licensee decide to pursuelegal process under this paragraph, Licensee shall have the right to selectlead legal counsel, subject to Rich Dad’s approval, which shall not be unreasonablywithheld, and shall exercise control over such litigation. However, Licenseeshall not enter into any settlement without Rich Dad’s approval, which approvalshall not be unreasonably withheld. Any monetary recovery for an infringementin a suit brought by Licensee shall be considered Licensee’s recovery. However,any recovery in excess of expenses shall be considered gross revenue subject toroyalty payments pursuant to Section 7 of this Agreement.

 

d.                                      Should eitherRich Dad or Licensee commence a suit under the provisions of this Section andthereafter elect to abandon the same, it shall give timely notice to the otherparty who may, if it so desires, continue prosecution of such suit, provided, however,that the sharing of expenses and a recovery in such suit shall be as agreedupon between Rich Dad and Licensee.

 

19.3.                      Rich Dad andLicensee shall cooperate in any legal process concerning alleged infringementof the Licensed Marks. Each party shall, to the fullest extent possible, makeavailable its employees, records, information and the like as relevant to thelegal process.

 

**20.****Further****documents.**

** **

20.1.                      The partiesagree to execute and deliver all such further documents, agreements and instrumentsand take such other and further action as may be necessary or appropriate to carry outthe purposes and intent of this Agreement.

 

**21.Entire Agreement.**

** **

21.1.                      This Agreement,along with any attachments, exhibits, schedules and documents incorporated byreference herein, constitutes the entire agreement between the parties heretowith respect to the subject matter hereof and supersedes all priorcommunications, writings and other documents with regard thereto. Nomodification, amendment or waiver of any provision hereof shall be binding uponeither party hereto unless it is in writing and executed by both of the partieshereto or, in the case of a waiver, by the party waiving compliance.

 

**22.Relationship of Parties.**

** **

22.1.                      Nothingcontained in this Agreement shall be deemed or construed by the parties heretoor by any third person to create the relationship of principal and agent or ofpartnership or of joint venture or of any association between the parties. Noneof the provisions contained in this Agreement nor any acts of the partieshereto shall be deemed to create any relationship between the parties otherthan the relationship specified in this Agreement.

 

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**23.Captions.**

** **

23.1.                      The division ofthis Agreement into and the use of captions for paragraphs is for convenienceof reference only and shall not affect the interpretation or construction ofthis Agreement.

** **

**24.Severability.**

** **

24.1.                      In the eventany provision of this Agreement or the application of any provision shall beheld by a tribunal of competent jurisdiction to be contrary to law, then, theremaining provisions of this Agreement shall be unimpaired, and the illegal,invalid or unenforceable provision shall be replaced by a provision, which,being legal, valid and enforceable, comes closest to the intent of the partiesunderlying the illegal, invalid or unenforceable provision. In any event anillegal, invalid or unenforceable provision shall not affect the enforceabilityor the validity of the remaining terms or portions thereof, and each suchunenforceable or invalid provision or portion thereof shall be severable fromthe remainder of this Agreement.

 

**25.Cost of Enforcement.**

** **

25.1.                      If a partycommences any arbitration, action at law or in equity, or for declaratoryrelief, or in appellate proceedings, to secure or protect any rights under, orto enforce any provision of, this License Agreement, then, in addition to anyjudgment, order, or other relief obtained in such proceedings, the prevailingparty shall be entitled to recover from the losing party all reasonable costs,expenses, and attorneys’ fees incurred by the party in connection with suchproceedings, including, attorneys’ fees incurred for consultation and otherlegal services performed prior to the filing of such proceeding.

** **

** **
| **Licensee**                | ** **          | **Licensor**         |
|-----------------------------|---------------------|----------------------|
| **Rich Dad Education, LLC** | ** **          | **Rich Global, LLC** |
| ** **                  | ** **          |                 |
| By:                         | /s/ Ronald S. Simon |                 | By: | /s/ Sharon L Lechter |
| Name:                       | Ronald S. Simon     |                 | Name: | Sharon L Lechter |
|                        |                |                 | Member |

 

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EXHIBIT D

WIN LicenseAgreement

 

(See Attachment)

 

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EXHIBITD

 

LICENSE AGREEMENT

 

This is an Agreement between Whitney Information Network, Inc., aColorado corporation (“WIN”) and Rich Dad Education, LLC, a Wyoming limitedliability company, (the “Licensee”),

 

WHEREAS, WIN and Rich Global, LLC. a Wyoming limited liability company(Rich Dad), have entered into a Limited Liability Company Agreement (the “LLCAgreement”) of even date herewith pursuant to which WIN has agreed to enterinto this License Agreement and Rich Dad has agreed to enter into a licenseagreement through which Licensee is given the right to use certain intellectualproperties relating to certain Business Information and certain trade names,trademarks, and servicemarks (“Rich Dad Marks”);

 

WHEREAS, WIN has the right to grant licenses with respect to use ofcertain intellectual properties relating to marketing models and systems forconducting seminars (the WIN model).

 

WHEREAS, Licensee desires to utilize certain of those intellectual propertiesupon and in connection with certain seminars hereinafter described;

 

Accordingly, the parties agree as follows:

 

**1. Definitions.**

 

1.1.                            Theterm “Business” means the sole activities of promoting, marketing, andconducting educational seminars on Permitted Subjects utilizing the “ModifiedWIN Marketing Model” described in Appendix 1.1.

 

1.2.                            Theterm “Permitted Subjects” mean the subjects of real estate, business, the stockmarket, and such other subjects, if any, identified in Schedule 1.2 as may beamended in writing from time to time by the parties.

 

1.3.                            Theterm “Field of Use” means seminars on the Permitted Subjects offered to thegeneral public which are not represented as having WIN Personalities asspeakers or participants. The Field of Use does not include “Coaching” or othersubscription based programs.

 

1.4.                            Theterm “WIN Personalities” means Russ Whitney and other individuals otherwiseassociated with WIN and its affiliated brands.

 

1.5.                            Theterm Know-How” means general and specific knowledge, experience andinformation, not in written or printed form.

 

1.6.                            Theterm “Business Data” means documents and other media (whether in human ormachine readable form) pertaining to conducting the Business including, but notlimited to,plans, specifications, descriptions of procedures, quality and inspectionstandards, test records and data.

 

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1.7.                            The term “Customer Data” means documents andother media (whether in human or machine readable form) containing information,regarding customer and prospective customers.

 

1.8.                            The term “Business Information” meansKnow-How, Business Data, and Customer Data.

 

1.9.                            The term “Licensed WIN Business Information”means Business Information applicable to the development or conducting theBusiness communicated to, or embodied in items delivered to, the Licensee by oron behalf of WIN.

 

1.10.                      The term “Seminars” means seminars presentedby Licensee during the term of this License Agreement.

 

1.11.                      The term “Seminar Materials” means alladvertising and promotional materials, handouts, workbooks, presentations,manuals, software programs, and any other literature or material and othercollateral items employed, provided, distributed, sold, or otherwise madeavailable in connection with the Seminars.

 

1.12.                      The term “Confidential Information”, as usedin this License Agreement, means any and all Technology, business informationand/or data which is not readily ascertainable by proper means and whichderives economic value, actual or potential, from not being generally known,and which has been the subject of efforts that are reasonable under thecircumstances to maintain its secrecy. All Business Information and/orinformation relating to the products or operations of a party, which isprovided to the other party, or to which the other party otherwise obtainsaccess, pursuant to, or as a result of, this Agreement shall be treated asConfidential Information hereunder; Except such information which the otherparty can clearly show: (a) at the time of this Agreement is publicly andopenly known; (b) after the date of this Agreement becomes publicly andopenly known through no fault of the other party; (c) comes into the otherparty’s possession and lawfully obtained by the other party from a source otherthan from the party or a source deriving from the party, and not subject to anyobligation of confidentiality or restrictions on use; or (d) is approvedfor release by written authorization of the other party.

 

1.13.                      The term “Licensed Marks” means the tradenames, trademarks, and servicemarks identified in Schedule 1.13 to this LicenseAgreement (as may be amended from time to time by written agreement of theparties), as well as any abbreviations, initialisms, and derivations thereof.

 

1.14.                      The term “Rich Dad Marks” means the tradename “Rich Dad Education”, the Rich Dad Education Logo, and such other tradenames, trademarks, and servicemarks identified in Schedule 1.14, as well as anyabbreviations, initialisms, and derivations thereof.

 

1.15.                      The term “Territory” means the United Statesof America and Canada.

 

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1.16.                      The term“Accounting Period” shall mean a three (3) month period commencing onJanuary 1, April 1, July 1and October 1 and ending on March 31, June 30, September 30and December 31, respectively, during the Term of this License Agreement.

 

1.17.                      The term“Term” means the period of time from the execution date of this Agreement untilthe Agreement is terminated as provided in Paragraph 10.2 hereof.

 

**2. Grantof License:**

 

2.1.                            Subjectto the terms and conditions of this License Agreement, WIN hereby grants to theLicensee:

 

a.                                     Aright and license to use, subject to Section 5, the Licensed WIN BusinessInformation in, and in connection with, the Business in the Field of Use in theTerritory.

 

b.                                    Aright and license to use the Licensed Marks in connection with the Business inthe Field of Use in the Territory, but solely in conjunction with use of theRich Dad Marks pursuant to the license agreement between licensee and Rich Dad.

 

2.2.                            TheLicensee shall not:

 

a.                                     usethe Licensed WIN Business Information or Licensed Marks other than as permittedby this License Agreement;

 

b.                                    duringthe term of this License Agreement provide Seminars with which Know-How andBusiness Data comprising Licensed WIN Business Information are not used;

 

c.                                     duringthe term of this License Agreement provide seminars other than pursuant to thisLicense Agreement; or

 

d.                                    duringthe term of this License Agreement, advise on, promote, offer for sale or sell:

 

i.                                          anyinvestments or opportunities to invest; or

 

ii.                                       anyproduct or service not approved by WIN before hand in writing pursuant toSection 5.

 

2.3.                            WINshall not, during the term of this License Agreement, grant any third party alicense to use the Licensed Trademarks within the Field Of Use. Licenseeacknowledges that WIN may itself provide, or separately license others toprovide, products and/or services outside of the Field of Use. WIN may provideseminars under the Licensed Marks in which WIN Personalities are speakers orparticipants,

 

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and WIN Personalities may speak or participate inseminars hosted or sponsored by third parties.

 

2.4.                            TheLicensee may not grant sublicenses hereunder or assign this License to anythird party without the prior written approval of WIN. Any attempted sublicenseor assignment in derogation of this provision shall be null and void.

 

**3. Use of and Rights in the Licensed WIN BusinessInformation**

 

3.1.                            WIN shall provide to Licensee, in suchform as reasonably requested by Licensee, Customer Data applicable to thedevelopment or conducting the Business (i.e., comprising Licensed WIN BusinessInformation), pursuant to the LLC Agreement within a reasonable time, and shallprovide seasonable updates.

 

3.2.                            WINshall provide to Licensee, in such form as reasonably requested by Licensee,access to Know-How and Business Data comprising Licensed WIN BusinessInformation sufficient for the development or conducting the Business.

 

3.3.                            Licenseeshall submit a marketing plan to WIN for approval specifying the frequency ofcontact with respect to customers reflected in the Customer Data and such otherinformation as WIN may reasonably request. Licensee shall not contact suchcustomers until such plan is approved by WIN or other than in accordance withsuch approved plan.

 

3.4.                            All Seminar Materials including orderived from WIN Business Information shall include all proprietary notices(e.g. copyright notice, patent marking) reasonably requested by WIN.

 

3.5.                            Licenseeacknowledges and agrees that this License Agreement grants Licensee no title orright of ownership in or to the Licensed WIN Business Information. The Licenseeshall not at any time do or cause to be done any act, omission, or thingcontesting or in any way impairing or tending to impair any part of WIN’S right,title and interest in the Licensed WIN Business Information.

 

3.6.                            In theevent the Licensee shall be deemed to have acquired any rights in the LicensedWIN Business Information in the Territory (or anywhere in the world), theLicensee shall assign, and agrees to execute all documents reasonably requestedby WIN to assign, all such rights in the Licensed WIN Business Information toWIN or its nominee.

 

3.7.                            Nothingin this License Agreement shall limit the right of WIN to limit the rights oraccess of the WIN to its own Business Information, or Licensed WIN BusinessInformation.

 

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**4. Useof and Rights in the Licensed Marks, Marking:**

 

4.1.                            TheLicensee shall use the Licensed Marks only in accordance with the terms of thisAgreement, and shall not use the Licensed Marks, any derivations thereof, orany Mark confusingly similar thereto, except as permitted under this Agreement.

 

4.2.                            TheLicensee shall maintain high standards of quality, style, appearance andservice with respect to all seminars provided hereunder, and Seminar Materials.All seminars; and Seminar Materials, shall be in accordance with all applicablelaws and regulations, and shall not violate or infringe any right of privacy orpublicity, copyright, or trademark or constitute defamatory, obscene, orunlawful matter, or otherwise violate or infringe any personal or proprietaryrights of any person, firm, or corporation.

 

4.3.                            Alluses of Licensed Marks are subject to approval of WIN. The Licensed Marks shallbe used only in connection with seminars and Seminar Materials that have beenapproved by WIN pursuant to Section 5.

 

4.4.                            AllSeminar Materials shall include all proprietary notices (e.g., trademarkmarkings, copyright notice, patent marking) reasonably requested by WIN.

 

4.5.                            TheLicensee acknowledges the validity of the Licensed Marks. The Licensed Marks(and all versions and derivatives thereof) are owned by WIN and shall be andremain the exclusive property of WIN. All rights in and to the Licensed Marksother than those specifically granted to the Licensee herein, are reserved toWIN for its own use and benefit.The Licensee shall not acquire any ownership rights in or to the Licensed Marksand all use of the Licensed Marks by the Licensee shall inure to the benefit ofWIN or its nominee.

 

4.6.                            In theevent the Licensee shall be deemed to have acquired any rights in the LicensedMarks within the Territory (or anywhere in the world), the Licensee shallassign, and agrees to execute all documents reasonably requested by WIN toassign, all such rights in the Licensed Marks to WIN or its nominee.

 

**5. Quality Control**

 

5.1.                            AllSeminars (including curriculum) and all Seminar Materials shall be subject toapproval of WIN. The Licensee shall provide WIN access to samples for qualityreview upon WIN’s reasonable request.

 

5.2.                            ApprovalProcess

 

a.                                     Licenseeshall provide WIN a syllabus (in such form as WIN may reasonably request) foreach Seminar and samples of all associated Seminar Materials (including anycollateral items not bearing the Licensed Marks) prior to offering orconducting the Seminar or distributing or offering for sale or otherwise makingavailable to the public the Seminar Materials.

 

b.                                    UnlessWIN notifies Licensee that the Seminar or Seminar Materials are rejected withinthirty (30) days from receipt by WIN of the

 

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samples,Licensee may go forward with offering the Seminar and Seminar Materials,subject to paragraph 5.3.

 

c.                                     After samples have been approved Licensee maynot make any material change in the merchandise or materials without WIN’sprior approval.

 

d.                                    Licensee shall provide WIN, without charge,additional samples of each item of Seminar Materials from time to time as WINmay reasonably request.

 

e.                                     Paragraph 5.2b notwithstanding, any product,service or other collateral items (whether or not bearing the Licensed Marks)provided, distributed, offered for sale, or otherwise made available inconnection with the Seminars shall be separately submitted to WIN, and shallnot be provided, distributed, offered for sale, or otherwise made available inconnection with the Seminars unless and until WIN approves such product,service or other collateral items in writing.

 

5.3.                            If WIN determines at any time that there is adeficiency in a Seminar or Seminar Materials, WIN shall notify Licensee of thedeficiency, and Licensee shall, as soon as practicable, but in any case withina 30-day period from such notice remedy the deficiency to WIN’s satisfaction.

 

**6.Confidentiality**

 

6.1.                            Each party acknowledges the other’sConfidential Information is unique and valuable and was developed or otherwiseacquired by the other at great expense, and that any unauthorized disclosure oruse of the other’s Confidential Information would cause the other irreparableinjury loss for which damages would be an inadequate remedy. The party agreesto hold such Confidential Information in strictest confidence, to use allefforts reasonable under the circumstances to maintain the secrecy thereof, andnot to make use thereof other than in accordance with this License Agreement,and not to release or disclose Confidential Information to any third partywithout the other’s prior written consent, subject to a court order, or subjectto a sublicense consistent with this Agreement and requiring the sublicensee tomaintain the Confidential Information in strictest confidence, to use allefforts reasonable under the circumstances to maintain the secrecy thereof, notto make use thereof other than in accordance with the sublicense Agreement, andnot to release or disclose Confidential Information to any third party withoutthe other’s prior written consent.

 

6.2.                            Each party further acknowledges that anyviolation of this Section 6 shall constitute a material breach of thisLicense Agreement resulting in irreparable injury to the non-breaching partyand agree that, in addition to any and all other rights available to thenon-breaching party by law or by this Agreement, the non-breaching party

 

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shall have the right to have an injunction enteredagainst the party to enjoin any further violations of this Agreement.

 

**7. LicenseFees and Reporting**

 

7.1.                            Inpartial consideration of the Licenses granted hereunder, the Licensee shall payto WIN a royalty in the amount of *** of gross revenue. Royalties with respectto activities within an Accounting Period shall be paid to WIN within 30 daysof the end of the Accounting Period, except that no royalties or license feesshall be paid to WIN prior to one hundred fifty (150) days following theinitial free customer acquisition Seminar. Payments will be made in U.S.Dollars and shall be considered to have been made when received by WIN at itsprincipal place of business.

 

7.2.                            Grossrevenue shall be considered realized when received by Licensee and shall be netof any separately itemized taxes, shipping, rebates, and discounts.

 

7.3.                            Foreach Accounting Period, the Licensee shall render to WIN, a written statement,in such form as WIN may request, setting forth the place, date, subject andattendance of seminars provided by Licensee during the Accounting Period, theapplicable admission price, and such other information as WIN may reasonablyrequest to verify the royalty payments due hereunder. Such statement shall beprovided whether or not a royalty payment for the Accounting Period is to bemade. The Licensee shall keep-such written records respecting seminars andattendance thereat put on by the Licensee as WIN may reasonably request so thatroyalties payable hereunder may be accurately determined, and shall permit suchrecords to be examined by WIN or its authorized representative at anyreasonable time during regular business hours to verify the records, reportsand payments herein provided.

 

7.4.                            Licenseeshall be responsible for, and shall pay, all sales, value added and similartaxes, if any, which may be imposed on any receipts of the seminars hereunder,as well as any other tax based upon Licensee’s use of the Licensed WIN BusinessInformation, or Licensed Marks in connection with the seminars.

 

**8. PerformanceRequirements**

 

8.1.                            Licenseeshall use all reasonable commercial efforts to exploit and use the Licensed WINBusiness Information for the benefit of Licensee and WIN.

 

8.2.                            Licenseeshall advertise and promote the seminars in a manner consistent with normalbusiness practices using all reasonable commercial efforts to achieve themaximum attendance possible for its seminars.

 

8.3.                            In theevent of any of the following circumstances, WIN at its sole discretion may, bywritten notice, terminate the licenses under this License Agreement:

 

[***] Confidential termsomitted and provided separately to the Securities and Exchange Commission.

 

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a.                                     theLicensee fails to make seminars available for sale in the marketplace within 6months of the Effective Date;

 

b.                                    anytime after the first anniversary of this Agreement, the number of free customeracquisition Seminars provided fall below 6 in two of three successiveAccounting Periods.

 

**9.Warranties and Representations.**

** **

9.1.                            WINwarrants and represents that:

 

a.                                     Ithas the right to grant the licenses and enter into this Agreement withoutseeking the approval or consent of any third party and without payments to anythird party;

 

b.                                    Thereare no existing or threatened claims or proceedings by any entity relating tothe Licensed WIN Business Information, or Licensed Marks or challenging WIN’sownership of the same;

 

c.                                     Noneof the Licensed WIN Business Information, or Licensed Marks are subject to anyoutstanding order, decree, judgment, stipulation, written restriction,undertaking or agreement limiting the scope or use of the Licensed WIN BusinessInformation, or Licensed Marks or declaring any of it abandoned;

 

d.                                    Tothe best of WIN’s knowledge, with respect to the Licensed WIN BusinessInformation, or Licensed Marks, WIN has not interfered with, infringed upon,misappropriated, or otherwise come into conflict with any intellectual propertyrights of third parties, and WIN has not received any charge, complaint, claim,or notice alleging any such interference, infringement, misappropriation orviolation nor does WIN have any knowledge that any such charge or claim may beforthcoming; and

 

e.                                     Tothe best of WIN’s knowledge, any trade secrets comprising part of the LicensedWIN Business Information have been properly maintained as trade secrets.

 

9.2.                            Licenseewarrants and represents that::

 

a.                                     Licenseehas all rights necessary and is fully authorized to enter into and performunder this Agreement;

 

b.                                    Thereare no existing or threatened claims or proceedings by any entity againstLicensee that would impair Licensee’s ability to perform under this agreement.

 

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**10. Termand Termination.**

 

10.1.                      The licensehereunder shall commence upon the Effective Date, and shall continue untilterminated pursuant to Paragraph 10.2 of this Agreement.

 

10.2.                      The licensehereunder may be terminated

 

a.                                     Byeither party in the event of a breach of this License Agreement by anotherparty that is susceptible of cure, immediately, upon the end of a 30-day periodafter written notice of such breach to the breaching party, if such breach is not cured within the30-day period.

 

b.                                    Byeither party, in the event of a breach of this Agreement by another party thatis not susceptible of cure, immediately, upon written notice of such breach tothe other party.

 

c.                                     Byeither party, immediately, if the other party becomes insolvent, makes an assignmentfor the benefit of its creditors, or becomes the subject of any bankruptcy orinsolvency proceedings, or ceases to do business.

 

d.                                    ByWIN pursuant to Paragraph 8.3.

 

e.                                     ByWIN, immediately, in the event of a breach by Licensee (that is susceptible ofcure) which impairs or tends to impair the value of, the goodwill associatedwith, or any part of WIN’s right, title and interest in, the LicensedTrademarks and/or the Licensed WIN Business Information, if after writtennotice of such breach to Licensee, such breach is not cured as soon aspracticable, but in any case within a 30-day period from such notice.

 

f.                                       ByWIN, immediately, in the event that Licensee attempts to assign, transfer orsublicense any of the rights and licenses’ granted hereunder without WIN’sprior written approval except as permitted under Paragraph 2.3

 

g.                                    ByLicensee, immediately, in the event that Licensee is enjoined from practicingthe Licensed WIN Business Information by a court of competent jurisdiction, byreason of the Licensed WIN Business Information per se violating the rights ofa third party. This provision, however, shall not apply if the injunctionrelates to:

 

i.                                        aproduct, system, combination, method or process in which the Licensed WINBusiness Information is or may be used, where use**ofthe Licensed WIN Business Information standing alone is not enjoined;

 

ii.                                     amodification or other alteration of the Licensed WIN Business Information byany person or entity other than WIN, where use of the unmodified or unalteredLicensed WIN Business Information provided by WIN is not enjoined;

 

iii*.**                                 *anaspect or feature of the Licensed WIN Business Information, not

 

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specifically proposed byWIN and specifically required by Licensee or implemented by or for Licensee,where the Licensed WIN Business Information, without such aspect or feature isnot enjoined; or

 

iv.                                 onemanner of practicing the Licensed WIN Business Information, where the practiceof another commercially viable manner of practicing the Licensed WIN BusinessInformation is not enjoined.

 

10.3.                      Upontermination of the license hereunder, all rights and privileges in and to theLicensed WIN Business Information and Licensed Marks granted to the Licenseeherein shall automatically revert to WIN or its nominee, and the Licensee shallimmediately cease any use thereof.

 

10.4.                      Paragraphs3.6, and Sections 6 (Confidentiality), and 11 (Indemnification) hereof shallsurvive termination (for any reason) of this License Agreement.

 

**11.Indemnification.**

 

11.1.                      Each partyshall defend, indemnify and hold harmless the other party against and from allclaims, demands or causes of action, as well as any and all damages, expenses,costs, interest and reasonable legal fees, including those incurred on appeal,in any way related to, arising out of or connected with a breach of theindemnifying party’s representations, warranties or agreements, or otherwisewith respect to the indemnifying party’s conduct and actions, under andpursuant to this Agreement.

 

**12.Insurance.**

 

12.1.                      Licenseeshall obtain and maintain in effect during the term of this Agreement and solong as Licensee uses Licensed WIN Business Information and/or the LicensedMarks, appropriate liability insurance policies in such amounts and againstsuch risks as are obtained and maintained by companies similarly situated, andLicensee shall, at Licensee’s expense, name WIN as an additional insured undersuch policies. Licensee shall furnish WIN, for WIN’s review and approval, a certificate of insuranceevidencing the insurance coverage then in effect, which certificate shallindicate that the policies of insurance shall not be cancelable without atleast 30 days prior written notice to WIN.

 

**13. Waiver.**

 

13.1.                      The failureof either party at any time or times to demand strict performance by the otherparty of any of the terms, covenants or conditions set forth herein shall notbe construed as a continuing waiver or relinquishment thereof, and either partymay at any time demand strict and complete performance by the other party ofsaid terms, covenants and conditions.

 

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**14. Notices.**

 

14.1.                      All noticesand other written communications required to be given under this Agreementshall be in writing and shall be delivered to the addressee in person, mailedby registered or certified mail, return receipt requested, or transmitted viatele-facsimile (fax). Any such notice shall be deemed to be delivered, givenand received for all purposes as of the date so delivered, if deliveredpersonally or if sent by facsimile transmission, or, if sent by certified orregistered mail, three days following the date on which the same was depositedin a regularly maintained receptacle for the deposit of United States mail,postage and charges prepaid. The addresses and Fax numbers of the parties (untilwritten notice of change shall have been given) shall be as follows:

 

To WIN

 

 

 

Fax:

 

With a copy to:

 

To Licensee:

 

 

With a copy to:

 

 

**15. BindingEffect.**

 

15.1.                      ThisAgreement shall be binding upon and inure to the benefit of the parties heretoand their respective successors and permitted assigns.

 

**16. GoverningLaw.**

 

16.1.                      Thisagreement is made under and shall be governed by and construed in accordancewith the laws of the United States and the internal laws of the State ofArizona without reference to principles of conflict of laws.

 

**17. ForceMajeure.**

 

17.1.                      To theextent any event beyond the control of either party (such as an act of God,action of the elements, man-made or natural disaster, industry or supplierstrike or other labor disturbance, or civil or military disturbance) shallprevent such party fromperforming any of its duties or obligations hereunder by the date provided orto be provided, the time for such performance shall be deemed

 

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extended for a period of time equivalent to the durationof such event; provided, however, that the party so prevented from performingmust give prompt written notice to the other party of the nature of such event,the date when such event shall have taken place, and the date when the durationof such event shall have terminated; and further provided, however, that ifperformance shall be so prevented for a period of more than six months, theother party may terminate this Agreement by written notice of such termination,and thereafter neither party hereto shall be under any further liability orobligation to the other hereunder.

 

**18.Dispute Resolution.**

 

18.1.                      It is theParties’ desire that any disputes that might arise between them be amicablysettled, without resort to litigation, and the Parties will attempt to settleany such disputes through consultation and negotiation in good faith and in aspirit of mutual cooperation, All disputes or disagreements arising between theParties, out of or relating to this Agreement, that cannot be resolved by the involvedemployees of the Parties, shall be brought before a conciliation committee,consisting of one management executive from each Party. The executives shall beof at least vice presidential level, and with the authority to bind theParties. The conciliation committee shall, within fifteen (15) days after awritten request from either Party, meet in person (or telephonically, ifagreeable to both Parties) and attempt to work out a settlement. Such meetingshall be held at the facility of the non-requesting Party, or such otherlocation as mutually agreed upon by the Parties.

 

18.2.                      Notwithstandingthis Section 18, judicial proceedings may be brought without need forprior arbitration:

 

a.                                     byeither Party, for interim relief pending resolution pursuant to thisSection 18 of the Agreement;

 

b.                                    byWIN for nonpayment by Licensee of undisputed royalties; or

 

c.                                     byeither Party for injunctive relief pertaining to violation of Section 6,Confidentiality.

 

**19.Enforcement of Intellectual Property Rights**

 

19.1.                      Notice ofInfringement. WIN and Licensee shall promptly notify one another in writing ofany alleged infringement of the Licensed Marks within the Field Of Use. Within15 days of the receipt of such notice or such other period as may be agreed toby the parties, WIN and Licensee shall meet and formulate a strategy forresolving the alleged infringement.

 

19.2.                      WIN andLicensee (to the extent permitted under the law) each shall have the right toinstitute an action for such an infringement of the Licensed Marks against suchthird party in accordance with the following:

 

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a.                                     IfWIN and Licensee agree to institute suit jointly, the suit shall be brought inboth their names; the out-of-pocket costs thereof shall be borne equally by WINand Licensee or as otherwise agreed by the parties; and recoveries, if any,whether by judgment, award, decree or settlement, shall be divided in order asfollows:

 

i.                                        reimbursementto WIN and Licensee for all costs of the litigation; and

 

ii.                                     anyremaining recovery will be divided between WIN and Licensee with damagesattributable to activities outside of the Field of Use (if any) paid to the WINand the remainder divided equally between the parties. WIN shall choose leadlegal counsel, subject to Licensee’s approval, which shall not be unreasonablywithheld, and shall exercise control over such action. However, WIN shall notenter into any settlement without Licensee’s approval, which approval shall notbe unreasonably withheld, and Licensee may, if it so desires, be represented bycounsel of its own selection, the fees for which counsel shall be paid byLicensee at Licensee’s sole expense (and not reimbursable hereunder).

 

b.                                    Inthe absence of agreement to institute a suit jointly, WIN may institute suit,and, at its option, join Licensee as a plaintiff or otherwise appropriate participantin such legal process. WIN shall bear the entire cost of such litigation andshall be entitled to retain the entire amount of any recovery by way ofjudgment or settlement. WIN shall choose lead legal counsel and exercisecontrol over such action, provided, however, that Licensee may, if it sodesires, be represented by counsel of its own selection, the fees for whichcounsel shall be paid by Licensee at Licensee’s sole expense (and notreimbursable hereunder).

 

c.                                     Inthe absence of agreement to institute a suit jointly and WIN determines not toinstitute a suit, as provided in paragraph 19.2b above, Licensee shall have the right, but not the obligation, topursue legal process to redress any alleged infringement. Upon WIN’swritten consent, Licensee may bring such legal action in the name of WIN andmay make WIN a party plaintiff or otherwise appropriate participant in suchlegal process. Licensee shall pay WIN’s legal expenses incurred in such legal process,and shall indemnify WIN against any order for costs that may be made againstWIN in such proceedings. Should Licensee decide to pursue legal process underthis paragraph, Licensee shall have the right to select lead legal counsel,subject to WIN’s approval, which shall not be unreasonably withheld, and shallexercise control over such litigation. However, Licensee shall not enter intoany settlement without WIN’s approval, which approval shall not be unreasonablywithheld. Any monetary recovery for an infringement in a suit brought byLicensee shall be considered Licensee’s recovery. However, any recovery inexcess of expenses shall be consideredgross revenue subject to royalty payments pursuant to Section 7 ofthis Agreement.

 

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d.                                    Shouldeither WIN or Licensee commence a suit under the provisions of thisSection and thereafter elect to abandon the same, it shall give timelynotice to the other party who may, if it so desires, continue prosecution ofsuch suit, provided, however, that the sharing of expenses and a recovery insuch suit shall be as agreed upon between WIN and Licensee.

 

19.3.                      WIN andLicensee shall cooperate in any legal process concerning alleged infringementof the Licensed Marks. Each party shall, to the fullest extent possible, makeavailable its employees, records, information and the like as relevant to thelegal process.

 

**20. Further documents.**

 

20.1.                      The partiesagree to execute and deliver all such further documents, agreements andinstruments and take such other and further action as may be necessary orappropriate to carry out the purposes and intent of this Agreement.

 

**21. Entire Agreement.**

 

21.1.                      ThisAgreement, along with any attachments, exhibits, schedules and documentsincorporated by reference herein, constitutes the entire agreement between theparties hereto with respect to the subject matter hereof and supersedes allprior communications, writings and other documents with regard thereto. Nomodification, amendment or waiver of any provision hereof shall be binding uponeither party hereto unless it is in writing and executed by both of the partieshereto or, in the case of a waiver, by the party waiving compliance.

 

**22. Relationship of Parties.**

 

22.1.                      Nothingcontained in this Agreement shall be deemed or construed by the parties heretoor by any third person to create the relationship of principal and agent or ofpartnership or of joint venture or of any association between the parties. Noneof the provisions contained in this Agreement nor any acts of the parties heretoshall be deemed to create any relationship between the parties other than therelationship specified in this Agreement.

 

**23. Captions.**

 

23.1.                      The divisionof this Agreement into and the use of captions for paragraphs is forconvenience of reference only and shall not affect the interpretation orconstruction of this Agreement.

 

**24. Severability.**

 

24.1.                      In the eventany provision of this Agreement or the application of any provision shall beheld by a tribunal of competent jurisdiction to be contrary to law, then, theremaining provisions of this Agreement shall be unimpaired, and the illegal,invalid or unenforceable provision shall be replaced by a provision, which,

 

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being legal, valid and enforceable, comes closest tothe intent of the parties underlying the illegal, invalid or unenforceableprovision. In any event an illegal, invalid or unenforceable provision shallnot affect the enforceability or the validity of the remaining terms orportions thereof, and each such unenforceable or invalid provision or portionthereof shall be severable from the remainder of this Agreement.

 

**25. Costof Enforcement.**

 

25.1.                      If a partycommences any arbitration, action at law or in equity, or for declaratoryrelief, or in appellate proceedings, to secure or protect any rights under, orto enforce any provision of, this License Agreement, then, in addition to anyjudgment, order, or other relief obtained in such proceedings, the prevailingparty shall be entitled to recover from the losing party all reasonable costs,expenses, and attorneys’ fees incurred by the party in connection with suchproceedings, including, attorneys’ fees incurred for consultation and otherlegal services performed prior to the filing of such proceeding.

 

 
| **Licensee**                | ** **               | **Licensor**                          |
|-----------------------------|--------------------------|---------------------------------------|
| **Rich Dad Education, LLC** | ** **               | **Whitney Information Network, Inc.** |
|                        |                     |                                  |
| By:                         | /s/ Sharon L Lechter     |                                  | By: | /s/ [ILLEGIBLE] |
| Name:                       | Sharon L Lechter  Member |                                  | Name: |   |

 

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