Document:

EXHIBIT
10.1

 

SEPARATION AGREEMENT

 

This
Separation Agreement (“Agreement”) is made and entered into as of this 17th day
of October, 2008, by and among John F. Kane, (“Employee”), and Whitney
Information Network, Inc. (“WIN”) on behalf of itself and its subsidiary
and affiliated companies, and their respective successors and assigns
(collectively “Employer”).  Employee and
Employer are collectively referred to as the Parties throughout this Agreement.

 

In consideration of the mutual covenants, promises,
and conditions expressed in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are expressly acknowledged,
the Parties agree as follows:

 

1.                                  Resignation.     Employee hereby resigns, and Employer hereby accepts such resignation,
from Employee’s employment with Employer effective as of October 17, 2008
(“Separation Date”).  Employee further
hereby resigns from all positions held by Employee as an officer or director of
Employer, effective as of the Separation Date. 
Concurrently with the execution and delivery of this Agreement, and as a
condition to Employer’s obligation to pay the Separation Benefit as set forth
in Section 2, below, Employee shall execute and deliver his written
resignations (individually, “Written Resignation” and collectively, “Written
Resignations”), in the form attached hereto as Exhibit A, from WIN
and each and every subsidiary, affiliate, and trust of Employer of which
Employee is an officer, director, or trustee, including, but not necessary
limited to, the positions with WIN and its subsidiaries, affiliates, and trusts
as set forth in Exhibit B attached hereto.  Employee acknowledges and agrees that after
the Separation Date, he will not have the authority to represent or bind
Employer as an executive officer of Employer. 
The Parties further acknowledge and agree that the resignation by
Employee pursuant to this Agreement shall be deemed a “Voluntary Termination”
pursuant to that certain Executive Employment Agreement (the “Employment Agreement”)
dated June 30, 2003 by and between Employee and Whitney Education Group, Inc.,
a wholly owned subsidiary of WIN. 
Employer shall pay Employee (i) all salary and vacation pay
Employee accrued as of the Separation Date, (ii) vested deferred compensation
(other than pension plan or profit sharing plan benefits, if any, which will be
paid in accordance with the applicable plan), and (iii) the remaining
unpaid balance of the $230,000 performance bonus the WIN Board of Directors
conditionally authorized on May 23, 2008 (“2007 Performance Bonus Balance”);
provided, however that Employer shall only be obligated to make payment of the
remaining balance of the 2007 Performance Bonus Balance if and to the extent
approved by the WIN Board of Directors as described in WIN’s Form 8-K
report dated May 23, 2008 and filed with the Securities and Exchange
Commission.  Except as provided in this
Paragraph 1 of this Agreement, the Employee acknowledges and agrees that this
Agreement shall serve to terminate the Employment Agreement as of the
Separation Date and this Agreement sets forth all of the compensation payable
to him.  In the event of a conflict
between the terms and conditions of the Employment Agreement and the terms and
conditions of this Agreement, the terms and conditions of this Agreement shall
apply. Without limiting the generality of the foregoing sentence, Employee
hereby waives any and all claims to salary, incentive payments, bonuses, or
benefits of any kind, whether based on or arising out of the Employment
Agreement or otherwise, except as expressly 

 

1

 

provided
for in this Section 1 or as otherwise prohibited by law.   Employee agrees that he will submit all
vouchers for reasonable business expenses prior to his Separation Date or as
soon thereafter as is practicable. 
Employer agrees to reimburse Employee for such expenses with within
seven (7) days of receipt of any such voucher.  Employee agrees to return to the Employer, on
or as soon as practicable after the Separation Date, all Employer property or
copies thereof, including, but not limited to, files, records, computer access
codes, computer programs, keys, card key passes, instruction manuals,
documents, business plans, and other property that he received, prepared, or
helped to prepare in connection with his employment with the Employer.

 

2.                                  Separation Benefit.     In consideration of the releases Employee grants pursuant to Section of
3 of this Agreement, Employer shall provide Employee severance benefit of an
amount equal to three (3) months of Employee’s current base rate of pay,
less all applicable withholding taxes and any other amounts required by law to
be withheld. (“Separation Benefit”).  The
Employer shall pay the Separation Benefit in bi-weekly equal installments on
the dates that are Employer’s regular pay days for its employees in an amount
equal to the bi-weekly amount of salary payable to Employee as of the
Separation Date until the Separation Benefit has been paid in full; provided however,
that Employer shall pay the Separation Benefit in full no later than December 31,
2008; and provided further that Employer may prepay any remaining balance of
the Separation Benefit, in whole or in part, at any time or from time to time
prior to December 31, 2008. 
Employer’s obligation to make payments to Employee under this Agreement
is conditioned upon Employee’s compliance with all of his covenants and
obligations contained in this Agreement and those sections of the “Confidentiality,
Non-Compete and Non-Solicitation Agreement (Employee)” as set forth in Section 11
below.

 

3.                                  Waiver and Release.     (a) In exchange for the
Separation Benefit provided by Employer pursuant to Section 2 above, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and intending to be legally bound, Employee on behalf
of himself and his past, present and future agents, representatives,
attorneys,  heirs, executors, assigns and
successors, and all other persons connected therewith, hereby releases and
forever discharges Employer, and all of its past, present and future agents,
representatives, principals, attorneys, affiliates, owners, members,
shareholders, officers, directors, employees, assigns and successors (collectively
“Releasees”), of and from any and all legal, equitable or other claims,
demands, setoffs, defenses, contracts, accounts, suits, debts, agreements,
actions, causes of action, sums of money, judgments, findings, controversies,
disputes, or past, present and future duties, responsibilities, obligations, or
suits at law and/or equity of whatsoever kind, from the beginning of time to
the date hereof, including, without limitation, any and all actions, causes of
action, claims, counterclaims, third party claims, and any and all other
federal, state, local and/or municipality statutes, laws and/or regulations and
any ordinance and/or common law pertaining to employment and any and all other
claims, counterclaims and/or third party claims which have been or which could
have been asserted against any party in any court, arbitration or other forum
involving the subject matter of the Agreement.

 

(b) By signing this Agreement, Employee
knowingly and voluntarily fully releases and forever discharges Releasees of
and from all claims, demands, and liability of any kind arising under any
statute, law or ordinance pertaining to employment, including, without
limitation, Title 

 

2

 

VII
of the Civil Rights Act of 1964, the Fair Labor Standards Act, the National
Labor Relations Act, the Americans with Disabilities Act, any state human
rights act, or the Age Discrimination in Employment Act (“ADEA”).  It is understood that the acceptance of this
Agreement by Releasees is not to be construed as an admission of liability on
their part.  Employee further understands
and agrees that this Agreement is intended to cover all actions, causes of
action, claims, and demands for damages, loss or injury arising from the
beginning of time until the date of this Agreement, whether presently known or
unknown to the Employee.

 

(c)                             In accordance with provisions of the ADEA, as
amended, 29 U.S.C. §601-634, the Employee is hereby provided a period of
twenty-one (21) days from the date of receiving this Agreement to review the
waiver of rights under the ADEA and sign this Agreement.  Furthermore, the Employee has seven (7) days
after the date of signing the Agreement (“Revocation Period”) to revoke the
Employee’s consent.  This Agreement shall
not become effective or enforceable until the Revocation Period has
expired.  If the Employee does not
deliver a written revocation to Marie B. Code, General Counsel, c/o Whitney
Information Network, Inc., 1612 E. Cape Coral Parkway, Cape Coral, FL 33904,
before the Revocation Period expires, this Agreement will become effective.

 

(d)                            Employee is hereby advised to consult with an
attorney prior to executing this Agreement. 
The Employee acknowledges that he has been given a reasonable time in
which to consider the Agreement and seek such consultation and warrants that
the Employee has consulted with knowledgeable persons concerning the effect of
this Agreement and all rights that the Employee might have under any and all
state and federal law relating to employment and employment
discrimination.  The Employee fully
understands these rights and that by signing this Agreement the Employee
forfeits all rights to sue Releasees for matters relating to or arising out of
employment and termination.  The Employee
may preserve a legal right to sue by refusing to sign this Agreement, in which
case the Employee will not receive the Separation Benefit.

 

(e)                             Nothing in this Section 3 shall release
Employer from its obligations to Employee as set forth in this Agreement.  In addition, nothing in this Section 3
shall impair Employee’s rights, if any, to indemnification from WIN pursuant to
and in accordance with the by-laws of WIN.

 

4.                                  SEC Sub-certifications.     Employee covenants and agrees that Employee shall execute and deliver,
substantially in the form attached hereto as Exhibit C, Employee’s
sub-certifications (“Sub-certifications”) in support of the Sarbanes-Oxley Section 302
and Section 906 certifications of WIN’s Chief Executive Officer and Chief
Financial Officer for all of WIN’s 1934 Act filings and disclosures relating to
WIN’s financial statements for 2003, 2004, 2005, and 2006 and for WIN’s 2006 Form 10-K/A,
2007 Form 10-K, 2007 Form 10-Qs and the Form 10-Q for each of
the first three quarters of 2008, all within three (3) business days of
request therefor.  In addition, Employee
shall, for a period of one (1) year after the Separation Date, provide
such assistance, cooperation, consultation, and information, and, to the extent
Employee is able to do so truthfully, shall execute and deliver such documents,
including, by way of example and not limitation, Sub-certifications,
affidavits, and certifications, as may be requested by Employer from time to
time with respect to any filings made by WIN with the SEC.

 

3

 

5.                                  Non-Disparagement.     Employee agrees that he will not, in any private conversation or public
forum (i.e., in lectures, to the media, in published articles, to analysts, or
in comparable forums), (a) criticize, denigrate, speak adversely of, or
make any statements that could reasonably be interpreted or construed as being
negative, critical, derogatory, or otherwise harmful to, or (b) disclose
negative information about, the operations, management or performance of, the
Employer or about any director, officer, employee or agent of the Employer.

 

6.                                  No Admission of Liability.     This Agreement shall not in any way be construed as an admission by
either party that it has acted wrongfully with respect to the other, or that
either party has any rights whatsoever against the other.

 

7.                                  Entire Agreement.     This Agreement contains the entire agreement of the Parties and
replaces any prior or contemporaneous written or oral representations or
understandings about this matter.  This
Agreement may not be changed except in writing signed by the Parties or their
respective attorneys.

 

8.                                  Successors.     This Agreement shall be binding on and shall inure to the benefit of
Employer, its parent and/or subsidiary companies, and the successors,
predecessors, shareholders, officers, directors, representatives, agents, and
employees of the foregoing entities, as well as its assigns.

 

9.                                  Governing Law.     The Parties agree that this Agreement is being consummated in Florida
and that performance by the Parties of this Agreement is in Florida.  This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Florida.  Any legal proceeding of any nature either
party brings against the other to enforce any right or obligation under this
Agreement, or arising out of any matter pertaining to this Settlement
Agreement, shall exclusively be submitted to the United States District Court
for the Middle District of Florida, Fort Myers Division, in Fort Myers, Florida.  The Parties consent and submit to the
exclusive jurisdiction of this Court and agree to accept service of process
outside the State of Florida in any matter to be submitted to any such court
pursuant to this Agreement.

 

10.                            Knowing and Voluntary Assent.     In executing this Agreement, Employee hereby represents that the has
been afforded a reasonable opportunity to consider this Agreement; that he has
completely and carefully read this Agreement; that Employer has advised him to
consult with an attorney of his own choice prior to executing this Agreement,
and relied on the legal advice of his attorney; that he has had the opportunity
to have an attorney explain to him the terms of this Agreement; that he knows
and understand the contents of this Agreement; and that the terms of this
Agreement are satisfactory to him..

 

11.                            Confidential Information, etc.,     Employee hereby ratifies and affirms, and agrees to fully and
faithfully perform and abide by Section 2 (Proprietary Rights), Section 3
(Covenant Not to Compete) (as modified by this Section 11), Section 4
(Covenant Not to Solicit Customers/Clients), Section 5 (Covenant Not to
Solicit Employees, Independent Contractors an/or Vendors), and Section 6
(Covenant Not to Violate Company Confidences) of that certain 

 

4

 

“Confidentiality,
Non-Compete and Non-Solicitation Agreement (Employee)” dated April 1, 2003
by and between Whitney Education Group, Inc., and Employee (“Confidentiality
Agreement”), a copy of which is attached hereto as Exhibit D.  Employee further acknowledges and agrees that
such obligations survive the termination of Employee’s employment with Employer
in accordance with the terms of the Confidentiality Agreement.  Notwithstanding the foregoing, the Parties
acknowledge and agree that the Employee’s obligation not to compete as set
forth in Section 3 (Covenant Not to Compete) of the Confidentiality
Agreement shall expire on July 18, 2009.

 

12.                            Severability.     In the event that any one or more of the provisions contained herein
shall for any reason be held to be unenforceable in any respect under the law,
such unenforceability shall not affect any other provision of this Agreement,
but, with respect only to the jurisdiction holding the provision to be
unenforceable, this Agreement shall then be construed as if such unenforceable
provision or provisions had never been contained herein.

 

13.                            Further Assurances/Cooperation.     Employee shall, from time to time, perform such other acts and execute
and deliver any and all such other instruments, documents or letters as may be
required by law or as Employer reasonably requests to establish, maintain and
protect the rights and remedies of Employer and to carry out the intent and
purpose of this Agreement.  Without
limiting the generality of the foregoing, Employee shall execute and deliver
any and all documents necessary or appropriate to remove Employee as an
authorized signatory to any and all bank accounts and other financial accounts,
including, but not necessarily those accounts listed in Exhibit E,
attached hereto.  In addition, Employee
shall provide such assistance, cooperation, consultation, and information as
Employer may reasonably request from time to time with respect to matters
affecting or related to the Employer and in which Employee was involved or has
knowledge, including, but not limited to, governmental investigations,
contracts, litigation, and financial matters. 
Employer shall reimburse Employee for any reasonable out-of pocket expenses
Employee in performing such acts and in executing, delivering instruments,
documents, or letters.

 

14.                            Compliance
with Securities Laws.     Employee acknowledges and
agrees that WIN is a public company and certain federal and state securities
laws, including but not limited to laws relating to Regulation FD, insider
trading, and Section 16 beneficial reporting requirements, might continue
to apply to him, even though he no longer serves as an executive officer,
director or employee of WIN.  Employee
agrees that he will comply with any securities laws that are applicable to him
after the Separation Date and will rely upon his own legal counsel to advise
him of any such requirements.

 

15.                            Termination; Injunctive Relief.     Employer may terminate this Agreement for Cause.  “Cause” shall mean (i) any action or
omission of Employee which constitutes a willful and material breach of this
Agreement that is not cured or as to which Employee has not commenced diligent
attempts to cure within 10 business days after receipt by Employee of notice of
such breach.  Employer may also terminate
this Agreement if it discovers that Employee has committed any acts or
omissions under the Employment Agreement that would have permitted Employer to
terminate Employee for “Cause,” as defined in the Employment Agreement.  Employee understands and agrees that a
violation of Paragraphs 1, 3, 4, 5, 11, or 13 will be 

 

5

 

considered
a material breach of this Agreement. 
Employee acknowledges and agrees that irreparable harm would result from
any breach by Employee of the covenants contained in Paragraphs 1, 3, 4, 5, 11,
or 13 of this Agreement and that monetary damages alone would not provide
adequate relief for any such breach. 
Accordingly, the parties agree that injunctive relief in favor of
Employer would be proper.  Employee
further agrees, that in the event of such willful and material breach, in
addition to any other relief directed by a court of competent jurisdiction, (i) to
return promptly to Employer consideration of all installment payments of the
Separation Benefit Employee received, except for $1,000.00, (ii) that
Employer shall be released from any further obligation to make any further
payments of the Separation Benefit; and (iii) to pay Employer all of its
actual attorney’s fees and costs incurred in any action, suit, or other
proceeding brought by or on behalf of Employer to recoup payments of the
Separation Benefit to which it is entitled under this Section.

 

16.                       Assignment; Waivers.     Nothing in this Agreement shall
be construed to permit the assignment by either party of any of its rights or
obligations hereunder, and such assignment is expressly prohibited without the
prior written consent of the other party, which consent shall not be
unreasonably delayed or withheld. The waiver by either party hereto of a breach
or violation of any term or provision of this Agreement shall not operate nor
be construed as a waiver of any subsequent breach or violation. Notwithstanding the foregoing, Employer shall
have the absolute right to, assign or otherwise assign its rights and
obligations hereunder to any parent or subsidiary of Employer, or to a
subsidiary of the parent of Employer, or to a corporation with which Employer may
merge or consolidate, without Employee’s consent.

 

17.                            Counterparts.     This Agreement may be executed
in any number of counterparts with the same effect as if each party hereto had
signed the same document.  All
counterparts shall be construed together and shall constitute one
agreement.  The parties agree that the
delivery of facsimile counterparts followed by the conveyance of originally
signed documents shall be sufficient to evidence the parties’ intent for the
ratification of this document.

 

IN WITNESS WHEREOF, the Parties hereto have executed
this Agreement or caused this Agreement to be executed the day and year first
above written.

 

 

	
  WHITNEY INFORMATION

  	
   

  	
  EMPLOYEE:

  
	
  NETWORK, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Anne M.
  Donoho

  	
   

  	
  /s/ John F. Kane

  
	
   

  	
   

  	
  John F. Kane

  
	
  Name:

  	
  Anne M. Donoho

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
    October 17, 2008

  
	
  Title:

  	
    Chief Financial Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
    October 17, 2008

  	
   

  	
   

  
								

 

6

 

EXHIBIT
A

 

FORM OF
WRITTEN RESIGNATION

 

I
hereby resign as President and Director of the following entities effective as
of October 17, 2008:

 

Whitney Information Network, Inc.
(President and Chief Operating Officer)

American Home Buyers Alliance, Inc.

Coral Aviation, Inc.

EduTrades, Inc.

Mortgage Reduction System EquityCorp.

Wealth Intelligence Academy, Inc.

Whitney Consulting Services, Inc.

Whitney Education Group, Inc.

Rich Dad Education Limited (Canada)

Rich Dad Education Limited (UK)

Whitney Canada, Inc.

 

I
hereby resign as Director of the following entities effective as of October 17,
2008:

 

Whitney Development Limited

Whitney International Limited

Whitney UK Limited

 

Furthermore,
I hereby resign as Trustee of the following entities effective as of October 17,
2008:

 

1612 E. Cape Coral Parkway Land Trust

WIN CR II Trust

 

 

	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
  John
  F. Kane

  

 

7

 

EXHIBIT
B

 

POSITIONS
AND SUBSIDIARIES

 

	
  ENTITY

  	
   

  	
  POSITIONS

  
	
   

  	
   

  	
   

  
	
  Whitney
  Information Network, Inc.

  	
   

  	
  President
  and Chief Operating Officer; Director

  
	
   

  	
   

  	
   

  
	
  American
  Home Buyers Alliance, Inc.

  	
   

  	
  President;
  Director

  
	
   

  	
   

  	
   

  
	
  Coral
  Aviation, Inc.

  	
   

  	
  President;
  Director

  
	
   

  	
   

  	
   

  
	
  EduTrades, Inc.

  	
   

  	
  President;
  Director

  
	
   

  	
   

  	
   

  
	
  Mortgage
  Reduction System  EquityCorp.

  	
   

  	
  President;
  Director

  
	
   

  	
   

  	
   

  
	
  Wealth
  Intelligence Academy, Inc.

  	
   

  	
  President;
  Director

  
	
   

  	
   

  	
   

  
	
  Whitney
  Consulting Services, Inc.

  	
   

  	
  President;
  Director

  
	
   

  	
   

  	
   

  
	
  Whitney
  Education Group, Inc.

  	
   

  	
  President;
  Director

  
	
   

  	
   

  	
   

  
	
  Rich
  Dad Education Limited (Canada)

  	
   

  	
  President;
  Director

  
	
   

  	
   

  	
   

  
	
  Rich
  Dad Education Limited (UK)

  	
   

  	
  President;
  Director

  
	
   

  	
   

  	
   

  
	
  Whitney
  Canada, Inc.

  	
   

  	
  President;
  Director

  
	
   

  	
   

  	
   

  
	
  Whitney
  Development Limited

  	
   

  	
  Director

  
	
   

  	
   

  	
   

  
	
  Whitney
  International Limited

  	
   

  	
  Director

  
	
   

  	
   

  	
   

  
	
  Whitney
  UK Limited

  	
   

  	
  Director

  
	
   

  	
   

  	
   

  
	
  1612
  E. Cape Coral Parkway Land Trust

  	
   

  	
  Trustee

  
	
   

  	
   

  	
   

  
	
  WIN
  CR II Trust

  	
   

  	
  Trustee

  

 

8

 

EXHIBIT
C

 

FORM OF
SUB-CERTIFICATION

 

WHITNEY INFORMATION NETWORKS, INC.

 

                      ,
2008

 

The undersigned hereby certifies to Charles
M. Peck, the Chief Executive Officer of Whitney Information Networks, Inc.,
a Colorado corporation (the “Company”), and
to Anne M. Donoho, the Chief Financial Officer of the Company, as follows:

 

(1)           I
served as Interim President of the Company for the period of December 4, 2007
through June 20, 2008 and as President and Chief Operating Officer for the
period of June 20, 2008 through October 17, 2008.

 

(2)           I
have received the Company’s
                    
Report on Form 10-         for the
                      
month period ended
                              ,
in the form to be filed with the Securities and Exchange Commission (“SEC”), a copy of which is attached as Exhibit A (the “Report”), the form of certification of  Mr. Peck and Ms. Donoho which I
understand is required to be provided with the filing of the Report with the
SEC pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 13a-14
of the Securities Exchange Act of 1934 (the “Exchange Act”),
a copy of which form of certification is attached as Exhibit B (the
“Section 302 Certification”), and
the form of certification of Mr. Peck and Ms. Donoho, which I
understand is required to accompany the filing of the Report with the SEC
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, a copy of which
form of certification is attached as Exhibit C (the “Section 906
Certification”).

 

(3)           I
have read and reviewed carefully the Report, the Section 302
Certification, and the Section 906 Certification, and this Certificate is
intended to be a statement of facts upon which Mr. Peck and Ms. Donoho
may each rely in determining whether to execute and deliver the Section 302
Certification and the Section 906 Certification.

 

(4)           The
statements contained in this Certificate are based upon my familiarity with
information included in the Report related to matters that are within my
official responsibilities as an employee of the Company serving in the
positions described in paragraph (1) above and listed in Annex A,
including, as the
                              
of the Company, which familiarity is sufficient to enable me to express an
informed judgment as to matters set forth in this Certificate.

 

(5)           I
am not aware of any violations or possible violations of laws or regulations,
including the United States Foreign Corrupt Practices Act of 1977 (which makes
it unlawful to offer a bribe to a government official, political party or
candidate for political office in any country outside the U.S. for the purpose
of obtaining, retaining, or directing business to any person), whose effects
should be considered for disclosure in the financial statements of the Company
or as a basis for recording a loss contingency.

 

9

 

(6)           I
have participated in the special review process that management has implemented
and that is designed to ensure that the Report is subject to a thorough and
critical review and contains all required information and that the information
in the Report is accurate and complete.

 

(7)           I
know of no facts, circumstances or events that are contrary to or inconsistent
with the statements contained in the Section 302 Certification that (a) the
Report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the
circumstances under which the statements were made, not misleading with respect
to the period covered by the Report and (b) the financial statements, and
other financial information included in the Report, fairly present in all
material respects the financial condition, results of operations and cash flows
of the Company as of, and for, the periods presented in the Report.

 

(8)           I
know of no facts, circumstances or events that are contrary to or inconsistent
with the statements contained in the Section 906 Certification that (a) the
Report fully complies with the requirements of Sections 13(a) or 15(d) of
the Exchange Act and (b) the information contained in the Report fairly
presents, in all material respects, the financial condition and results of
operations of the Company.

 

(9)           I
know of no facts, circumstances or events that are contrary to or inconsistent
with the statements contained in the Report regarding the conclusions of Mr. Peck
or Ms. Donoho about the effectiveness of the disclosure controls and
procedures based on their evaluation as of
                              .

 

(10)         I
know of no facts, circumstances or events that are contrary to or inconsistent
with the statements contained in the Report regarding whether or not there were
significant changes in the Company’s internal controls or in other factors that
could significantly affect these controls subsequent to the date of their most
recent evaluation, including any corrective actions taken with regard to
significant deficiencies and material weaknesses.

 

(11)         I
know of no significant deficiencies in the design or operation of internal
controls which could adversely affect the Company’s ability to record, process,
summarize and report financial data and have identified for the Company’s
auditors any material weaknesses in internal controls.

 

(12)         I
know of no fraud, whether or not material, that involves management or other
employees who have a significant role in the Company’s internal controls.

 

(13)         As
used herein, (a) “disclosure controls and
procedures” means controls and other procedures of the Company that
are designed to ensure that the information required to be disclosed by the
Company in the reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported, within the time periods specified
in the SEC’s rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information
required to be disclosed by the Company in the reports that it files or submits
under the Exchange Act is accumulated and communicated to the 

 

10

 

Company’s management, including its principal
executive officer or officers and principal financial officer or officers, or
persons performing similar functions, as appropriate to allow timely decisions
regarding required disclosure; and (b) “financial
statements and other financial information” includes the financial
statements (including footnote disclosure), selected financial data, management’s
discussion and analysis of financial condition, results of operations and cash
flows. In addition, the certification statement contained herein regarding fair
presentation of financial statements and other financial information is not
limited to a representation that the financial statements and other financial
information have been presented in accordance with GAAP and is not otherwise
limited by GAAP. Rather, it encompasses, among other things, the selection of
appropriate accounting policies, disclosure of financial information that is
informative and reasonably reflects the underlying transactions and events and
the inclusion of any additional disclosure necessary to provide investors with
a materially accurate and complete picture of the Company’s financial
condition, results of operations and cash flows.

 

I will promptly advise Mr. Peck
and Ms. Donoho if there are any changes in the foregoing information prior
to the filing of the Report.

 

IN WITNESS WHEREOF, the undersigned has
executed and delivered this Certificate on the date first set forth above.

 

 

	
   

  	
   

  
	
   

  	
  John F. Kane

  

 

11

 

EXHIBIT D

 

CONFIDENTIALITY,
NON-COMETE

 

AND
NON-SOLICIATION AGREEMENT (EMPLOYEE)

 

(attached)

 

12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXHIBIT E

 

BANK
ACCOUNTS

 

Intentionally Omitted

 

13FIRST AMENDMENT TO

Exhibit 10.1

SECOND AMENDMENT TO

CONTRACT FOR THE SALE AND

PURCHASE OF REAL ESTATE

This SECOND AMENDMENT TO CONTRACT FOR THE SALE AND PURCHASE OF REAL ESTATE (hereinafter referred to as “First Amendment”) is made and entered into this the15th day of October, 2008, by and between Picture Window, LLC, a Mississippi Limited Liability Company, (hereinafter referred to collectively as “Seller”) and MYRIAD WORLD RESORTS OF TUNICA, LLC, a Mississippi limited liability company, (hereinafter referred to as “Purchaser”), collectively referred to as “Parties”.  MYRIAD ENTERTAINMENT AND RESORTS, INC. (“Myriad Entertainment”) and Kenneth M. Murphree, LLC, a Mississippi Limited Liability Company, join in solely and only for the express purpose of consenting to the modifications indicated herein.

WHEREAS, Purchaser and Seller previously entered into that certain Contract for the Sale and Purchase of Real Estate dated July 15, 2008 (the “Original Contract”); and

WHEREAS, Purchaser and Seller previously entered into that certain First Amendment to Contract for the Sale and Purchase of Real Estate dated September 15, 2008 (the “First Amendment”); and 

WHEREAS, the parties desire to modify certain specific terms and conditions of the Original Contract and First Amendment; and

WHEREAS, the parties desire to reduce their agreement and understanding to writing as required by Paragraph 9 of the Original Contract and do hereby do so; 

Now therefore, for and in consideration of the mutual covenants, conditions and promises contained herein, the parties do hereby agree and contract as follows:

WITNESSETH:

1.

The Paragraph 2 of the Original Contract and First Amendment is modified to read as follows, to wit:

“2.

Purchase Price:  Purchaser shall pay Seller for the Property US $36,000,000 plus amounts based on percentage payments or minimum annual payments (“Additional Payments”) as set forth below. All payments shall be in cash or certified funds via wire transfer.

The cash portion of the purchase price shall be paid as follows:

A.

US $100,000 in cash or via wire transfer shall be paid by Purchaser to Seller on or before July 24, 2008;

B.

US $100,000 in cash or via wire transfer shall be paid by Purchaser to Seller on or before August 15, 2008;

C.

US $35,800,000 in cash or via wire transfer shall be paid by Purchaser to Seller at Closing.

The above Cash Payment listed in paragraph A shall be paid directly to Seller and shall not be held in trust.  The parties acknowledge said payments have been made.  The above Cash Payment listed in paragraph B was timely made and was previously being held by Dulaney Law Firm, L.L.P. pursuant to that certain Escrow Agreement for the Sale of Real Property and Deposit of Earnest Money dated August 13, 2008 executed by the parties and Dulaney Law Firm, L.L.P. (the “Escrow Agreement”).  The execution of the First Amendment was the joint direction, consent and authorization of the Seller and Purchaser to Dulaney Law Firm, L.L.P. to pay the $100,000 (paid pursuant to paragraph B above) being held pursuant to the terms of the Escrow Agreement to Seller.  Said payment was made. Subject to the provisions contained in this Contract, in the event that Purchaser fails to timely make the payments set forth above, then Seller may terminate this Contract by sending written notice to Purchaser stating that the Purchaser is in default.  If Purchaser does not make the required payment within ten (10) days of written notice by Seller to Purchaser, then the Contract shall be deemed terminated.  In this event, Seller shall retain any monies previously paid to it.  Purchaser agrees to execute documents reasonably necessary to reflect such termination.

The percentage portion of the purchase price shall be paid as follows:

Purchaser intends to develop a destination resort on the Property.  With regard to the casino portion of the development by Purchaser or Myriad Entertainment on the Property, Purchaser agrees to pay to Seller an amount equal to two percent (2%) of the "Gross Gaming Revenue" derived from any and all gaming or gambling activities conducted on the Property (whether the gaming is conducted by Myriad or any other party) (the “Percentage Payment”).

Gross Gaming Revenue is hereby defined by  §75-76-5(p) of the Mississippi Code of 1972, as amended, as now written or as may be modified by the State of Mississippi in the future.  A copy of §75-76-5(p) of the Mississippi Code of 1972, as amended is attached hereto as Exhibit “A”. 

The Percentage Payment or Minimum Annual Payment shall be payable to Seller and Kenneth M. Murphree, LLC (the basis and amount of Kenneth M. Murphree, LLC payments, which are to be made by Purchaser in addition to any payments made to Seller, are set forth in paragraph 18 below) as follows:

The First and Second Payments

(i)

The first payment shall be made on or before the 15th day of the month immediately following the six calendar month period which begins on the first day of the month immediately following the month in which gaming operations commenced.  For example, if gaming operations commence April 14, the six month period begins on May 1 and ends on October 31.  The first payment would thus be due on or before November 15.  

The first payment shall cover the entire period from the start of gaming operations through the end of the six month period.  Purchaser shall include a copy of the statements sent to the Mississippi Gaming Commission setting forth Gross Gaming Revenue for each of the months included.  If payment is based on Minimum Annual Payment rather than Percentage Payment, then the month in which gaming operations begins shall be prorated according to days in that month.

(ii)

The second payment shall be made on or before the 15th day of the month immediately following the six month period which begins on the first day of the month following the end of the first six month period.  Based on the example in (i) above, the second six month period would begin November 1 and end on April 30.  The second payment would thus be due on May 15.  Purchaser shall include a copy of the statements sent to the Mississippi Gaming Commission setting forth Gross Gaming Revenue for each of the months included.  

Payments After the First and Second Payments

Thereafter, Purchaser shall make payments as follows:

(i)

On or before the first day of the month immediately following payment of the second payment above and on or before the first day of each month thereafter, Purchaser shall pay Seller 1/12 of the Minimum Annual Payment amount and 6% of 1/12 of the Minimum Annual Payment to Kenneth M. Murphree, LLC. 

(ii)

On or before the 20th day of the month immediately following payment of the second payment above and on or before the 20th day of each month thereafter, Purchaser shall pay Seller and Kenneth M. Murphree, LLC any Percentage Payment due to each based on the previous month’s Gross Gaming Revenue.  Such payment shall be calculated by multiplying Gross Gaming Revenue by the applicable percentage and subtracting the 1/12 Minimum Annual Payment (or 6% of 1/12 Minimum Annual Payment for Kenneth M. Murphree, LLC) amount paid in (i) above. If that calculation is 0 or less, then no Percentage Payment is due for that month.  Purchaser shall include a copy of the statements sent to the Mississippi Gaming Commission setting forth Gross Gaming Revenue for the month.   

(iii)

If, during the applicable Full Year of Gaming Operations, Purchaser has paid an amount that equals or exceeds the Minimum Annual Payment for that Full Year of Gaming Operations, then Purchaser will only make the Percentage Payment, if any, set forth in (ii) above.

(iv)

Due to the timing of payments, it may be possible that in any given Full Year of Gaming Operations, Purchaser makes more in Additional Payments than would otherwise be due in that Full Year of Gaming Operations.  In that event, Purchaser is entitled to offset such overpayment against payments due in the next Full Year of Gaming Operations.  In no event shall Seller, or Kenneth M. Murphree, LLC be obligated to repay any monies to Purchaser.  For example, if during the 1st Year of Full Gaming Operations, Purchaser paid Seller $2.2 million of Additional Payments, but Gross Gaming Revenue totaled $100,000,000, then Purchaser would have overpaid Seller for that year by the amount of $200,000.  Purchaser would then deduct that amount against Additional Payments due in the next Full Year of Gaming Operations until that amount was recovered.

Beginning on the earlier of January 1, 2011 or the start of gaming operations on the Property, Purchaser shall pay to Seller the greater of the Percentage Payment or the Minimum Annual Payment (as defined herein).  The Minimum Annual Payment is defined as follows:

			
	Full Year of Gaming Operation:

	 
	Minimum

Annual

Payment:

	1st Year

	 
	$2,000,000

	2nd Year

	 
	$2,500,000

	3rd Year

	 
	$3,000,000

	4th Year

	 
	$3,500,000

	5th Year and thereafter

	 
	$4,000,000

All rights granted herein by this paragraph 2 are assignable, subject to Gaming Commission approval and Paragraph 25.”

2.

Paragraph 18 of the Original Contract is modified to read as follows, to wit:

“18.

Brokers and Agent: Purchaser and Seller represent and warrant that both have existing real estate listing agreements with Kenneth M. Murphree, LLC and that Mr. Murphree is working as a dual agent.  Seller will pay Kenneth M. Murphree, LLC a 6% commission at closing.  The 6% commission to be paid by Seller will be based on the cash sales price (currently $36,000,000 based on paragraph 2 above) and stock consideration (see paragraph 23).  Purchaser will pay Kenneth M. Murphree, LLC an amount equal to 6% of the gross gaming revenue (or Minimum Annual Payments, which ever is greater) to be paid to Seller by Purchaser pursuant to Paragraph 2.  This will result in an amount equal to 0.12% of the gross gaming revenue (or Minimum Annual Payments, which ever is greater) being paid to Kenneth M. Murphree, LLC.   This payment shall be 

made at the same time and in the same manner as the payments are to be made by Purchaser to Seller, provided however, that this payment shall continue only for a total of 25 years commencing on the earlier of the start of gaming operations on the Property or January 1, 2011.  After the said 25 year period, the 0.12% payment to Kenneth M. Murphree, LLC shall terminate.  Except for the referenced agreements, Seller and Purchaser represent and warrant to each other that no broker or agent is due a commission from the proceeds of the Closing except as specifically stated herein and each hereby agrees to indemnify and hold the other and the Property harmless from the claims of any agent or broker for the payment of a commission.”

3.

Paragraph 27 of the Original Contract is modified to read as follows, to wit:

“27.

Within 120 days of the date of execution of this Contract, Seller and related parties and Purchaser will enter into a contract for the sale of additional property as follows:

A.

50 acres adjacent to the Yazoo-Mississippi Delta main line levee.  The Contract will include the terms and conditions and be in a form similar to Exhibit “D” attached hereto;

B.

200-300 acres for a golf course.  Such contract will include the terms and conditions and be in a form similar to Exhibit “E” attached hereto.”

The above referenced contracts shall include a provision that Purchaser shall have no rights to acquire said parcels unless and until the sale of the Property between Seller and Purchaser closes and there is notice signed by both parties that the sale has closed.”

4.

Except as specifically modified by paragraphs 1 and 2 above, all other terms, conditions and provisions of the Original Contract and the First Amendment remain in full force and effect.

Witness our signatures on the day and year as first above written and by signing this Second Amendment each party represents to the Party opposite that this contract has been read in its entirety and all terms, conditions, covenants and obligations are fully understood.

			
	         

	MYRIAD WORLD RESORTS OF

TUNICA, LLC acting through its Manager:

	 
	 

	 
	MYRIAD ENTERTAINMENT AND

 RESORTS, INC.,

	 
	 
	 

	 
	By:  

	 

	 
	

Title:

	Nicholas A. Lopardo

Chairman and CEO

	 
	 
	 

	 
	MYRIAD ENTERTAINMENT AND

 RESORTS, INC.,

	 
	 
	 

	 
	By:  

	 

	 
	

Title:

	Nicholas A. Lopardo

Chairman and CEO

	 
	 
	 

	 
	PICTURE WINDOW, LLC

	 
	 
	 

	 
	By:  

	 

	 
	 
	Shea Leatherman

Member/Manager

	 
	 
	 

	 
	PICTURE WINDOW, LLC

	 
	 
	 

	 
	By:  

	 

	 
	 
	Kenneth M. Murphree

Member/Manager

STATE OF                                 

COUNTY OF                               

Personally appeared before me, the undersigned authority in and for said County and State, the above named Nicholas A. Lopardo, the Chairman and CEO of Myriad Entertainment & Resorts, Inc., the parent and manager of the above named Myriad World Resorts of Tunica, LLC., a Mississippi Limited Liability Company and acknowledged that on behalf of said limited liability company, and in its name, being duly authorized so to do, he signed the foregoing instrument  and delivered said instrument on the day and year therein mentioned.

GIVEN under my hand and official seal, this the _____ day of October, 2008.

                                                                           

          Notary Public

My Commission Expires:                                             

STATE OF                                         

COUNTY OF                                      

Personally appeared before me, the undersigned authority in and for said County and State, the above named Nicholas A. Lopardo, the Chairman of the Board of the Directors and CEO of the above named Myriad Entertainment and  Resorts, Inc., a Delaware Corporation and acknowledged that on behalf of said limited liability company, and in its name, being duly authorized so to do, he signed the foregoing instrument  and delivered said instrument on the day and year therein mentioned.

GIVEN under my hand and official seal, this the _____ day of October, 2008.

                                                                           

          Notary Public

My Commission Expires:                                             

STATE OF MISSISSIPPI

COUNTY OF TUNICA

Personally appeared before me, the undersigned authority in and for said County and State, the above named Shea Leatherman, the Manager and a Member of the above named Picture Window, LLC, a Mississippi Limited Liability Company and acknowledged that on behalf of said limited liability company, and in its name, being duly authorized so to do, he signed the foregoing instrument  and delivered said instrument on the day and year therein mentioned.

GIVEN under my hand and official seal, this the _____ day of October, 2008.

                                                                           

          Notary Public

My Commission Expires:                                             

STATE OF MISSISSIPPI

COUNTY OF TUNICA

Personally appeared before me, the undersigned authority in and for said County and State, the above named Kenneth M. Murphree, the Manager and a Member of the above named Kenneth M. Muphree, LLC, a Mississippi Limited Liability Company and acknowledged that on behalf of said limited liability company, and in its name, being duly authorized so to do, he signed the foregoing instrument  and delivered said instrument on the day and year therein mentioned.

GIVEN under my hand and official seal, this the _____ day of October, 2008.

                                                                           

          Notary Public

My Commission Expires:

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