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Exhibit 10.4

AMENDED AND RESTATED SECURED PROMISSORY NOTE
(Revolving Loan)
 
$10,000,000.00
Salt Lake City, Utah
 
March 14, 2011

 
1.           PROMISE TO PAY.
 
FOR VALUE RECEIVED, FRANKLIN COVEY CO., a Utah corporation (“Maker”), with a
business address of 2200 West Parkway Blvd., Salt Lake City, Utah 84119,
promises to pay to the order of JPMORGAN CHASE BANK, N.A., a national banking
association (“Holder”), at its office at 201 South Main Street, Suite 300, Salt
Lake City, Utah, 84111, or at such other place as Holder may from time to time
designate in writing, the principal sum of up to TEN MILLION AND NO/100 DOLLARS
($10,000,000.00) or so much thereof as shall from time to time be disbursed as
Revolving Loan Advances under that certain Amended and Restated Credit Agreement
(as it may be amended, modified, extended, and renewed from time to time, the
“Loan Agreement”) of even date herewith between Maker and Holder, together with
accrued interest from the date of disbursement on the unpaid principal at the
applicable rate as set forth in Section 5 hereof.  This Amended and Restated
Secured Promissory Note (as it may be amended, modified, extended, and renewed
from time to time, the “Note”) is issued pursuant to, entitled to the benefits
of, and referred to as the “Revolving Loan Note” in the Loan Agreement.  In the
event of any inconsistency between the provisions of this Note and the
provisions of the Loan Agreement, the Loan Agreement shall control.
 
2.           DEFINITIONS.
 
The following terms shall have the following meanings when used
herein.  Capitalized terms used herein without definition shall have the
meanings set forth in the Loan Agreement.
 
“Interest Rate” means the “Interest Rate” (as defined in the Loan Agreement)
applying the Applicable Margin (whether for LIBOR Rate Advances or CB Floating
Rate Advances) for Revolving Loan Advances.
 
“Maturity Date” means the Revolving Loan Maturity Date, as defined in Section
1.1 of the Loan Agreement.
 
3.           MATURITY DATE.
 
Absent the occurrence and continuance of an Event of Default hereunder or under
any of the Loan Documents, the unpaid principal balance hereof, together with
all unpaid interest accrued thereon, and all other amounts payable by Maker
under the terms of the Loan Documents, shall be due and payable on the Maturity
Date.  If the Maturity Date should fall (whether by acceleration or otherwise)
on a day that is not a Business Day, payment of the outstanding principal shall
be made on the next succeeding Business Day and such extension of time shall be
included in computing the interest included in such payment.
 
4.           REVOLVING LINE OF CREDIT.
 
The Revolving Loan evidenced hereby is a revolving line of credit and Maker
shall be entitled to reborrow amounts prepaid prior to the Maturity
Date.  Although the outstanding principal balance of this Note may be zero from
time to time, this Note and the other Loan Documents will remain in full force
and effect until the Maturity Date or until all obligations of Maker or
Guarantor relating to the Revolving Loan are indefeasibly paid and performed in
full, whichever is later.  Upon the occurrence, and continuance, of any Event of
Default, Holder may suspend or terminate its
 

 
 

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commitment to make Revolving Loan Advances of the proceeds hereof without notice
to Maker or further act on the part of Holder.

5.           INTEREST.
 
 
(a)
Absent a continuing Event of Default hereunder or under any of the Loan
Documents, each Advance made hereunder shall bear interest at the Interest Rate
in effect from time to time as determined in accordance with the Loan Agreement,
subject to the limitations of Section 15 of this Note. Interest on this Note
shall be computed by applying the ratio of the annual Interest Rate over a year
of three hundred sixty (360) days, multiplied by the outstanding principal
balance, multiplied by the actual number of days the principal balance is
outstanding.

 
 
(b)
All payments of principal and interest due hereunder shall be made (i) without
deduction of any present and future taxes, levies, imposts, deductions, charges
or withholdings, which amounts shall be paid by Maker, and (ii) without any
other set off.  Maker will pay the amounts necessary such that the gross amount
of the principal and interest received by Holder is equal to that required by
this Note.

 
 
(c)
Interest accruing hereunder shall be payable by Maker to Holder monthly, the
first of which interest payments shall be payable on the Payment Date occurring
in April 2011, and on each Payment Date thereafter as provided in the Loan
Agreement.  If any payment of interest to be made by Maker hereunder shall
become due on a day which is not a Business Day, such payment shall be made on
the next succeeding Business Day and such extension of time shall be included in
computing the interest in such payment.

 
6.           LAWFUL MONEY.
 
Principal and interest are payable in lawful money of the United States of
America.
 
7.           APPLICATION OF PAYMENTS; LATE CHARGE; DEFAULT RATE.
 
 
(a)
Unless otherwise agreed to, in writing, or otherwise required by applicable law,
payments will be applied first to accrued, unpaid interest, then to any unpaid
collection costs, late charges and other charges, and any remaining amount to
principal; provided however, upon a continuing Event of Default, Holder reserves
the right to apply payments among principal, interest, late charges, collection
costs and other charges at its discretion.  All prepayments shall be applied to
the indebtedness owing hereunder in such order and manner as Holder may from
time to time determine in its reasonable discretion.

 
 
(b)
If any payment required under this Note is not paid within ten (10) days after
such payment is due, then, at the option of Holder, Maker shall pay a late
charge equal to five percent (5.0%) of the amount of such payment or Twenty-Five
and No/100 Dollars ($25.00), whichever is greater, up to the maximum amount of
One Thousand Five Hundred and No/100 Dollars ($1,500.00) per late charge to
compensate Holder for administrative expenses and other costs of delinquent
payments.  This late charge may be assessed without notice, shall be immediately
due and payable and shall be in addition to all other rights and remedies
available to Holder.

 
 
(c)
Upon a continuing Event of Default or upon maturity by acceleration, Holder, at
its option, may also, if permitted under applicable law, do one or both of the
following, in addition to any other right or remedy available to Holder: (i)
increase the applicable interest rate on this Note to the Default Interest Rate,
and (ii) add any unpaid accrued interest to principal and

 

 
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such sum will bear interest therefrom until paid at the rate provided in this
Note (including any increased rate).  The interest rate hereunder will not
exceed the maximum rate permitted by applicable law.  Application of the Default
Interest Rate will not cure any Event of Default.

8.           SECURITY; GUARANTY.
 
This Note is secured by one or more liens and security interests upon the
Collateral, as more particularly set forth in the Loan Agreement and other Loan
Documents, and payments hereunder are unconditionally guaranteed by Guarantor
pursuant to the Guaranty.
 
9.           EVENT OF DEFAULT.
 
The occurrence of any of the following shall be deemed to be an event of default
(“Event of Default”) hereunder:
 
 
(a)
Failure by Maker to pay any monetary amount within ten (10) days of when due
under any Loan Document; or

 
 
(b)
The occurrence of any event of default under any of the other Loan Documents.

 
10.           REMEDIES.
 
Upon the occurrence, and during the continuance, of an Event of Default, then at
the option of Holder, the entire balance of principal together with all accrued
interest thereon, and all other amounts payable by Maker under the Loan
Documents shall, without demand or notice, immediately become due and
payable.  Upon the occurrence of an Event of Default (and so long as such Event
of Default shall continue), without notice or demand, the entire balance of
principal hereof, together with all accrued interest thereon, all other amounts
due under the Loan Documents, and any judgment for such principal, interest, and
other amounts shall bear interest at the Default Interest Rate.  Maker may also,
at its election, add any unpaid accrued interest to principal and such sum will
bear interest therefrom until paid at the Default Interest Rate.  The Interest
Rate under this Note will not exceed the maximum rate permitted by applicable
law under any circumstances.  No delay or omission on the part of Holder in
exercising any right under this Note or under any of the other Loan Documents
hereof shall operate as a waiver of such right and no application of the Default
Interest Rate or addition of interest to principal shall constitute an election
of remedies by Holder nor shall any such exercise of any right cure any Event of
Default under the Loan Documents.
 
11.           WAIVER.
 
 
(a)
Maker, endorsers, guarantors, and sureties of this Note hereby waive diligence,
demand for payment, presentment for payment, protest, notice of nonpayment,
notice of protest, notice of intent to accelerate, notice of acceleration,
notice of dishonor, and notice of nonpayment, and all other notices or demands
of any kind (except notices specifically provided for in the Loan Documents) and
expressly agree that, without in any way affecting the liability of Maker,
endorsers, guarantors, or sureties, Holder may extend any maturity date or the
time for payment of any installment due hereunder, otherwise modify the Loan
Documents, accept additional security, release any Person liable, and release
any security or guaranty.  Maker, endorsers, guarantors, and sureties waive, to
the full extent permitted by law, the right to plead any and all statutes of
limitations as a defense.

 
 
(b)
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, MAKER SHALL NOT ASSERT, AND
HEREBY WAIVES, ANY CLAIM AGAINST HOLDER, ON ANY

 

 
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THEORY OF LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES
(AS OPPOSED TO DIRECT OR ACTUAL DAMAGES) ARISING OUT OF, IN CONNECTION WITH, OR
AS A RESULT OF THIS NOTE OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY, THE
REVOLVING LOAN OR THE USE OF THE PROCEEDS THEREOF.

12.           CHANGE, DISCHARGE, TERMINATION, OR WAIVER.
 
No provision of this Note may be changed, discharged, terminated, or waived
except in a writing signed by the party against whom enforcement of the change,
discharge, termination, or waiver is sought.  No failure on the part of Holder
to exercise and no delay by Holder in exercising any right or remedy under this
Note or under the law shall operate as a waiver thereof.
 
13.           ATTORNEYS’ FEES.
 
If this Note is not paid when due or if any Event of Default occurs, Maker
promises to pay all costs of enforcement and collection and preparation
therefor, including, but not limited to, reasonable attorneys’ fees, whether or
not any action or proceeding is brought to enforce the provisions hereof
(including, without limitation, all such costs incurred in connection with any
bankruptcy, receivership, or other court proceedings (whether at the trial or
appellate level)) or with regard to any arbitration or other dispute resolution
proceeding.
 
14.           SEVERABILITY.
 
If any provision of this Note is unenforceable, the enforceability of the other
provisions shall not be affected and they shall remain in full force and effect.
 
15.           INTEREST RATE LIMITATION.
 
Maker hereby agrees to pay an effective rate of interest that is the sum of the
interest rate provided for herein, together with any additional rate of interest
resulting from any other charges of interest or in the nature of interest paid
or to be paid in connection with the Revolving Loan, including without
limitation, the Origination Fee and any other fees to be paid by Maker pursuant
to the provisions of the Loan Documents.  Holder and Maker agree that none of
the terms and provisions contained herein or in any of the Loan Documents shall
be construed to create a contract for the use, forbearance or detention of money
requiring payment of interest at a rate in excess of the maximum interest rate
permitted to be charged by the laws of the State of Utah.  In such event, if any
holder of this Note shall collect monies which are deemed to constitute interest
which would otherwise increase the effective interest rate on this Note to a
rate in excess of the maximum rate permitted to be charged by the laws of the
State of Utah, all such sums deemed to constitute interest in excess of such
maximum rate shall, at the option of Holder, be credited to the payment of other
amounts payable under the Loan Documents or returned to Maker.
 
16.           NUMBER AND GENDER.
 
In this Note the singular shall include the plural and the masculine shall
include the feminine and neuter gender, and vice versa.
 
17.           HEADINGS.
 
Headings at the beginning of each numbered section of this Note are intended
solely for convenience and are not part of this Note.
 

 
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18.           CHOICE OF LAW.
 
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF UTAH WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES.  THE PARTIES
AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS NOTE AND
THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND
FEDERAL COURTS LOCATED IN THE COUNTY OF SALT LAKE, STATE OF UTAH OR, AT THE SOLE
OPTION OF HOLDER, IN ANY OTHER COURT IN WHICH HOLDER SHALL INITIATE LEGAL OR
EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER JURISDICTION OVER THE MATTER
IN CONTROVERSY.  EACH OF MAKER AND HOLDER WAIVES, TO THE EXTENT PERMITTED UNDER
APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON
CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN
ACCORDANCE WITH THIS SECTION 18.
 
19.           INTEGRATION.
 
The Loan Documents contain the complete understanding and agreement of Holder
and Maker and supersede all prior representations, warranties, agreements,
arrangements, understandings, and negotiations. PURSUANT TO UTAH CODE ANNOTATED
SECTION 25-5-4, MAKER IS NOTIFIED THAT THIS NOTE AND OTHER WRITTEN LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF ANY ALLEGED PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.
 
20.           COUNTERPARTS.
 
This document may be executed and acknowledged in counterparts, all of which
executed and acknowledged counterparts shall together constitute a single
document.
 
21.           BINDING EFFECT.
 
The Loan Documents will be binding upon, and inure to the benefit of, Holder,
Maker, and their respective successors and assigns.  Maker may not delegate its
obligations hereunder or under the Loan Documents.
 
22.           TIME OF THE ESSENCE.
 
Time is of the essence with regard to each provision of the Loan Documents as to
which time is a factor.
 
23.           SURVIVAL.
 
The representations, warranties, and covenants of Maker in the Loan Documents
shall survive the execution and delivery of the Loan Documents and the making of
the Revolving Loan.
 
24.           RENEWAL AND EXTENSION.
 
This Note is given in replacement, renewal and/or extension of, but not in
extinguishment of the indebtedness evidenced by, that certain Secured Promissory
Note dated March 14, 2007, executed by Maker in the original principal amount of
EIGHTEEN MILLION AND NO/100 DOLLARS ($18,000,000.00), including previous
renewals or modifications thereof, if any (the “Prior Note”
 

 
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and together with all loan agreements, credit agreements, reimbursement
agreements, security agreements, mortgages, deeds of trust, pledge agreements,
assignments, guaranties, and any other instrument or document executed in
connection with the Prior Note, the “Prior Related Documents”), and is not a
novation thereof. All interest evidenced by the Prior Note shall continue to be
due and payable until paid. Maker fully, finally, and forever releases and
discharges Holder and its successors, assigns, directors, officers, employees,
agents, and representatives (each a “Bank Party”) from any and all causes of
action, claims, debts, demands, and liabilities, of whatever kind or nature, in
law or equity, of Maker, whether now known or unknown to Maker (a) in respect of
the Obligations evidenced by the Prior Note and the Prior Related Documents, or
of the actions or omissions of any Bank Party in any manner related to the
Obligations evidenced by the Prior Note or the Prior Related Documents and (b)
arising from events occurring prior to the date of this Note.  All Collateral
continues to secure the payment of this Note and the Obligations. The provisions
of this Note are effective on the date that this Note has been executed by all
of the signers and delivered to Holder.
 
 
 
 
 
 
 
 
[Remainder of Page Intentionally Left Blank]
 

 
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IN WITNESS WHEREOF, Maker has executed and delivered this Note as of the day and
year first above written.
 

 
FRANKLIN COVEY CO.
a Utah corporation
 
By:
  /s/ Stephen D. Young
Name:
Stephen D. Young
Title:
Executive Vice President and Chief Financial Officer
 
 
“Maker”

 
 
 

 
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