Exhibit 10.5


    
      

    

     

    Exhibit
      10.5

     

    

      PLEDGE
        AND SECURITY AGREEMENT

       

      This
        PLEDGE
        AND SECURITY AGREEMENT
        (as the
        same may be amended, restated or otherwise modified, this “Agreement”)
        is
        made as of March 14, 2007, between FRANKLIN
        COVEY CO.,
        a Utah
        corporation with a place of business at 2200 West Parkway Blvd., Salt Lake
        City,
        Utah 84119 (“Pledgor”),
        and
        JPMORGAN CHASE BANK, N.A.,
        a
        national banking association with offices at 80 West Broadway, Suite 200,
        Salt
        Lake City, Utah, 84101 (“Collateral
        Agent”),
        not
        in its individual capacity, but solely as collateral agent for JPMORGAN
        CHASE BANK, N.A.,
        a
        national banking association (“Chase”),
        and
ZIONS
        FIRST NATIONAL BANK,
        a
        national banking association (“Zions”
and,
        together with Chase, individually and collectively, as the context requires,
        the
“Lender”),
        in
        conjunction with the Loan made to Pledgor by Lender pursuant to the Loan
        Agreement.

       

      Pledgor
        understands that Lender is willing to grant the Loan to Pledgor only upon
        certain conditions, one of which is that Pledgor execute and deliver this
        Agreement and this Agreement is being executed and delivered in consideration
        of
        each of the Obligations (as defined below) granted to Pledgor by Lender and
        for
        other valuable considerations.

       

      For
        good
        and valuable consideration, receipt of which is hereby acknowledged, Pledgor
        and
        Collateral Agent hereby agree as follows:

       

      1.  Definitions.
        Except
        as otherwise provided herein, terms defined in the Chase Loan Agreement shall
        have the same meanings when used herein. Terms defined in the singular shall
        have the same meaning when used in the plural and vice versa. Terms defined
        in
        the Uniform Commercial Code which are used herein shall have the meanings
        set
        forth in the Uniform Commercial Code, except as expressly defined otherwise.
        As
        used herein, the term:

       

      “Chase
        Loan”
means
        the revolving line of credit extended by Chase to Pledgor pursuant and subject
        to the Chase Note, the Chase Loan Agreement and the other Chase Loan
        Documents.

       

      “Chase
        Loan Documents”
means,
        collectively, the Chase Loan Agreement, the Chase Note, and all other documents
        that from time to time govern or evidence the Chase Obligations or secure
        payment or performance thereof, as such documents may be amended or modified
        from time to time.

       

      “Chase Loan Agreement”
means
        that certain Revolving Line of Credit Agreement of even date herewith by
        and
        between Pledgor and Chase, as the same may be amended or modified from time
        to
        time.

       

      “Chase
        Note”
means
        that certain Secured Promissory Note of even date herewith executed by Pledgor
        and payable to Chase in the maximum principal amount of $18,000,000, as the
        same
        may be amended or modified from time to time. 

       

      “Chase Obligations”
means:
        (a) the Obligations, as such term is defined in the Chase Loan Agreement;
        (b) transactions in which the documents evidencing the indebtedness refer
        to this grant of security interest as providing security therefor; (c) the
        payment of all other sums, with interest thereon, advanced in accordance
        herewith to protect the security of this Agreement; and (d) the performance
        of
        the covenants and agreements of Pledgor contained in this
        Agreement.

       

      “Collateral”
means
        the following, wherever located, now owned or existing or hereafter acquired
        or
        created: (a) THREE THOUSAND FOUR HUNDRED NINETY-TWO (3,492) common shares
        of
FRANKLIN
        COVEY PRINTING, INC.,
        a Utah
        corporation (“Printing”),
        evidenced by Certificate No. 33, and all other equity interests of Pledgor
        in
        Printing now owned or acquired in the future; (b) ONE HUNDRED SEVENTY-SIX
        THOUSAND TWO HUNDRED FIFTY (176,250) common shares of FRANKLIN
        DEVELOPMENT CORPORATION
        (“Development”),
        evidenced by Certificate No. 42, and all other equity interests of Pledgor
        in
        Development now owned or acquired in the future; (c) ONE HUNDRED THOUSAND
        (100,000) common shares of FRANKLIN
        COVEY TRAVEL, INC.,
        a Utah
        corporation (“Travel”),
        evidenced by Certificate No. 2, and all other equity interests of Pledgor
        in
        Travel now owned or acquired in the future; (d) ONE HUNDRED THOUSAND (100,000)
        common shares of FRANKLIN
        COVEY CATALOG SALES, INC.,
        a Utah
        corporation (“Catalog”),
        evidenced by Certificate No. 2, and all other equity interests of Pledgor
        in
        Catalog now owned or acquired in the future; (e) ONE HUNDRED THOUSAND (100,000)
        common shares of FRANKLIN
        COVEY CLIENT SALES, INC.,
        a Utah
        corporation (“Client”),
        evidenced by Certificate No. 2, and all other equity interests of Pledgor
        in
        Client now owned or acquired in the future; (f) ONE HUNDRED THOUSAND (100,000)
        common shares of FRANKLIN
        COVEY PRODUCT SALES, INC.,
        a Utah
        corporation (“Product”),
        evidenced by Certificate No. 2, and all other equity interests of Pledgor
        in
        Product now owned or acquired in the future; (Printing, Development, Travel,
        Catalog, Client and Product are collectively referred to as the “Issuer”);
        (g)
        all proceeds of the foregoing, including, without limitation, (i) any and
        all
        equity interests of the Issuer issued in replacement thereof; (ii) any and
        all
        equity interests of the Issuer issued as a dividend or issued in connection
        with
        any increase or decrease of capital, reclassification, merger, consolidation,
        sale of assets, combination of shares, split, spin-off or split-off; (iii)
        any
        and all options, warrants, or rights applicable to the equity interests of
        the
        Issuer, whether as an addition to, or in substitution or exchange for any
        of
        said shares and equity interests or otherwise; and (iv) any and all dividends
        or
        distributions on the foregoing described equity interests, whether payable
        in
        cash or in property, excluding those made with Collateral Agent’s or Lender’s
        consent or those that are not inconsistent with any restrictions imposed
        by
        Collateral Agent or Lender.

       

      “Default Rate”
means
        the default interest rate provided in the Note.

       

      “Event
        of Default”
means
        the failure of Debtor to pay or perform any of the Obligations as and when
        due
        to be paid or performed under the terms of the Loan Documents. 

       

      “Intercreditor
        Agreement”
means
        that certain Intercreditor Agreement of even date herewith by and among
        Collateral Agent and Lender, as the same may be amended or modified from
        time to
        time.

       

      “Loan”
means,
        individually and collectively, as the context requires, the Chase Loan and
        the
        Zions Loan. 

       

      “Loan
        Agreement”
means,
        individually and collectively, as the context requires, the Chase Loan Agreement
        and the Zions Loan Agreement. 

       

      “Loan
        Documents”
means,
        individually and collectively, as the context requires, the Chase Loan Documents
        and the Zions Loan Documents. 

       

      “Note”
means,
        individually and collectively, as the context requires, the Chase Note and
        the
        Zions Note.

       

      “Obligations”
means,
        individually and collectively, as the context requires, the Chase Obligations
        and the Zions Obligations.

       

      “Organizational
        Documents”
means
        the Articles of Incorporation of Pledgor, as filed with the predecessor filing
        office to the Utah Department of Commerce, Division of Corporations and
        Commercial Code on December 2, 1983, and the Amended and Restated Bylaws
        of
        Pledgor, dated effective as of January 11, 2002, and all modifications and
        amendments to those documents, pursuant to which Pledgor has been formed
        and
        exists.

       

      “Security
        Agreement”
means
        that certain Security Agreement of even date herewith among Pledgor, Guarantors,
        and Collateral Agent, as the same may be amended or modified from time to
        time.

       

      “Uniform Commercial Code”
means
        the Uniform Commercial Code as adopted now or in the future in the State
        of
        Utah.

       

      “Zions
        Loan”
means
        the revolving line of credit extended by Zions to Pledgor pursuant and subject
        to the Zions Note, the Zions Loan Agreement and the other Zions Loan
        Documents.

       

      “Zions
        Loan Agreement”
means
        that certain Revolving Line of Credit Agreement of even date herewith by
        and
        between Pledgor and Zions, as the same may be amended or modified from time
        to
        time. 

       

      “Zions
        Loan Documents”
means,
        collectively, the Zions Loan Agreement, the Zions Note, and all other documents
        that from time to time govern or evidence the Zions Obligations or secure
        payment or performance thereof, as such documents may be amended or modified
        from time to time.

       

      “Zions
        Note”
means
        that certain Secured Promissory Note of even date herewith executed by Pledgor
        and payable to Zions in the maximum principal amount of $7,000,000, as the
        same
        may be amended or modified from time to time.

       

      “Zions Obligations”
means:
        (a) the Obligations, as such term is defined in the Zions Loan Agreement;
        (b) transactions in which the documents evidencing the indebtedness refer
        to this grant of security interest as providing security therefor; (c) the
        payment of all other sums, with interest thereon, advanced in accordance
        herewith to protect the security of this Agreement; and (d) the performance
        of
        the covenants and agreements of Pledgor contained in this
        Agreement.

       

      2.  Grant
        of Security Interest.
        Pledgor
        hereby grants to Collateral Agent a security interest in the Collateral.
        Pledgor
        and Collateral Agent acknowledge their mutual intent that all security interests
        contemplated herein are given as a contemporaneous exchange for new value
        to
        Pledgor, regardless of when advances to Pledgor are actually made or when
        the
        Collateral is created or acquired.

       

      3.  Debts
        Secured.
        The
        security interest granted by this Agreement shall secure all of Pledgor’s
        present and future debts, obligations, and liabilities of whatever nature
        to
        Lender or Collateral Agent, including, without limitation, the Obligations.
        

       

      4.  Representations,
        Warranties and Covenants.
        Pledgor
        represents and warrants to Collateral Agent as follows: (a) Pledgor is a
        corporation duly organized under the laws of the State of Utah, (b) Pledgor
        is
        duly qualified to do business in each jurisdiction where the conduct of its
        business requires qualification and where failure to so qualify would result
        in
        a Material Adverse Change, (c) Pledgor has the full power and authority to
        own
        its properties and to conduct the business in which it engages and to enter
        into
        and perform its obligations under this Agreement, (d) the execution, delivery,
        and performance by Pledgor of this Agreement have been duly authorized by
        all
        necessary action on the part of Pledgor and are not inconsistent with Pledgor’s
        Organizational Documents or any resolution of Pledgor, do not and will not
        contravene any provision of, or constitute a default under, any indenture,
        mortgage, contract, or other instrument to which Pledgor is a party or by
        which
        it is bound except to the extent that any such contravention or default would
        not cause a Material Adverse Change, and that upon execution and delivery
        hereof
        and thereof, this Agreement will constitute legal, valid, and binding agreements
        and obligations of Pledgor, enforceable in accordance with their respective
        terms except as enforceability may be limited by bankruptcy, insolvency,
        reorganization, moratorium or similar Requirements of Laws affecting creditors’
rights generally and by principles of equity, and (e) the organizational
        identification number assigned to Pledgor by its state of organization is
        set
        forth in the Security Agreement.

       

      5.  Representations
        and Warranties Concerning Collateral.
        Pledgor
        further represents and warrants to Collateral Agent as follows: (a) the
        Collateral is not subject to any purchase agreement, voting trust or other
        agreement affecting, restricting, or limiting the sale, transfer, disposition
        or
        voting rights concerning said shares and equity interests, other than as
        provided in the Organizational Documents of Pledgor and as permitted under
        the
        Loan Agreement, (b) Pledgor is the sole owner of the Collateral, (c) as of
        the
        date of this Agreement, Pledgor is the owner of (i) THREE THOUSAND FOUR HUNDRED
        NINETY-TWO (3,492) common shares of Printing, which constitute one hundred
        percent (100%) of the issued and outstanding common shares of Printing; (ii)
        ONE
        HUNDRED SEVENTY-SIX THOUSAND TWO HUNDRED FIFTY (176,250) common shares of
        Development, which constitute one hundred percent (100%) of the issued and
        outstanding common shares of Development; (iii) ONE HUNDRED THOUSAND (100,000)
        common shares of Travel, which constitute one hundred percent (100%) of the
        issued and outstanding common shares of Travel; (iv) ONE HUNDRED THOUSAND
        (100,000) common shares of Catalog, which constitute one hundred percent
        (100%)
        of the issued and outstanding common shares of Catalog; (v) ONE HUNDRED THOUSAND
        (100,000) common shares of Client, which constitute one hundred percent (100%)
        of the issued and outstanding common shares of Client; and (vi) ONE HUNDRED
        THOUSAND (100,000) common shares of Product, which constitute one hundred
        percent (100%) of the issued and outstanding common shares of Product, and
        (d)
        the Collateral is not subject to any security interest, lien, prior assignment
        or other encumbrance of any nature whatsoever except Permitted
        Exceptions.

       

      6.  Covenants
        Concerning Collateral.
        Pledgor
        covenants that: (a) Pledgor will keep the Collateral free and clear of any
        and
        all security interests, liens, assignments or other encumbrances, except
        Permitted Exceptions, as provided in the Loan Agreement and as provided in
        the
        Organizational Documents of Pledgor, (b)
        Pledgor will not sell or transfer the Collateral without the prior written
        consent of Collateral Agent unless such sale or transfer does not cause a
        Material Adverse Change, (c)
        Pledgor hereby authorizes Collateral Agent to file financing statements
        concerning the Collateral, (d) Pledgor will execute and deliver any documents
        (properly endorsed, if necessary) reasonably requested by Collateral Agent
        for
        perfection or enforcement of any security interest or lien in the Collateral,
        give good faith, diligent cooperation to Collateral Agent, and perform such
        other acts reasonably requested by Collateral Agent for perfection and
        enforcement of any security interest or lien in the Collateral, including,
        without limitation, obtaining control for purposes of perfection; Collateral
        Agent is authorized to file, record, or otherwise utilize such documents
        as it
        deems necessary to perfect and/or enforce any security interest or lien granted
        hereunder, (e) Pledgor will deliver any and all stock certificates or similar
        instruments evidencing the Collateral to Collateral Agent at the time of
        execution of this Agreement, and (f) during the continuance of an Event of
        Default and except as otherwise expressly provided herein, Pledgor will promptly
        deliver to Collateral Agent all written notices, dividends, certificates,
        and
        other documents constituting or relating to the Collateral, which are received
        during the continuance of such Event of Default and will promptly give
        Collateral Agent written notice of any other notices which are received during
        the continuance of such Event of Default by Pledgor with respect to the
        Collateral.

       

      7.  Transfer
        of Ownership.
        Pledgor
        agrees to execute and deliver to Collateral Agent, at the time of execution
        of
        this Agreement, Transfer Powers in a form reasonably acceptable to Collateral
        Agent. The Transfer Powers may contain blanks or otherwise be incomplete
        but
        shall nonetheless be binding and effective. Collateral Agent is hereby
        irrevocably authorized, and Pledgor hereby irrevocably makes, constitutes
        and
        appoints Collateral Agent as its true and lawful attorney in fact, with full
        power of substitution, to fill in such blanks and otherwise complete the
        Transfer Powers, now or at any time in the future, such power to be exercised
        only upon the occurrence and during the continuance of an Event of Default.
        Collateral Agent may deliver the Transfer Powers as Collateral Agent deems
        appropriate in connection with any transfer of the Collateral pursuant to
        this
        Agreement. 

       

      Pledgor
        hereby makes, constitutes and appoints Collateral Agent as its true and lawful
        attorney in fact, with full power of substitution, to transfer the Collateral
        on
        the books of the issuing entity or any transfer agent to the name of any
        transferee upon foreclosure of this security interest.

       

      Collateral
        Agent shall not be under any obligation to exercise any of such rights or
        privileges.

       

      Pledgor
        agrees to give full cooperation and to use its best efforts to cause any
        issuer,
        transfer agent, or registrar of the Collateral to take all such actions and
        to
        execute all such documents as may be necessary or appropriate to effect any
        sale, transfer or other disposition of the Collateral upon the occurrence
        of and
        during the continuance of an Event of Default.

       

      Pledgor
        acknowledges that a breach of any of the covenants contained in this Section
        may
        cause irreparable injury to Collateral Agent, that Collateral Agent will
        have no
        adequate remedy at law with respect to such breach, and, as a consequence,
        that
        the covenants in this Section shall be specifically enforceable.

       

      8.  Collection
        of Dividends.
        During
        the term of this Agreement, Pledgor is authorized to collect all dividends,
        distributions, payments and other amounts that may be or become payable on
        any
        of the Collateral so long as no Event of Default has occurred and is continuing.
        Upon occurrence of an Event of Default and during the continuance of an Event
        of
        Default, Collateral Agent is authorized to collect all dividends, distributions,
        payments or other amounts that may be or become payable on any of the
        Collateral. Such amounts collected shall be distributed ratably to each Lender
        and applied by each Lender to the indebtedness secured hereby. Collateral
        Agent
        shall be under no obligation to collect any such amounts. 

       

      9.  Voting
        Rights.
        So long
        as no Event of Default has occurred and is continuing, Pledgor shall have
        the
        right, where applicable, to vote the Collateral on all corporate questions,
        or
        otherwise exercise such similar rights as may arise from the Collateral.
        Upon
        the occurrence of an Event of Default and during the continuance of an Event
        of
        Default, such right shall, at the sole option of Collateral Agent, terminate
        whereupon Collateral Agent may exercise all such rights. Pledgor agrees to
        appoint Collateral Agent as its proxy, and to execute such additional documents
        as are necessary to effect the same, pursuant to the Organizational
        Documents of
        Pledgor.

       

      10.  Exercise
        of Options.
        In the
        event that during the term of this Agreement subscription warrants or any
        other
        rights or options shall be issued in connection with the Collateral, such
        warrants, rights and options shall constitute part of the Collateral. If
        such
        subscription warrants or other rights or options shall expire during the
        term of
        this Agreement and Pledgor has not elected to exercise such warrants or options,
        Collateral Agent may elect (without any duty to do so) to exercise such
        warrants, rights and options at its own expense and to the extent assignable,
        Pledgor will assign its rights thereunder. All new shares or other equity
        interests so acquired shall be subject to and held under the terms hereof
        as
        Collateral.

       

      11.  Duty
        of Collateral Agent.
        Beyond
        the exercise of reasonable care to assure safe custody of the certificates
        evidencing the Collateral while held hereunder, Collateral Agent shall have
        no
        duty or liability to preserve rights pertaining to the Collateral.

       

      12.  Right
        to Perform for Pledgor.
        Collateral Agent may, in its sole discretion and without any duty to do so,
        elect to discharge taxes, tax liens, security interests, or any other
        encumbrance upon the Collateral (other than Permitted Exceptions), perform
        any
        duty or obligation of Pledgor and pay filing, recording, insurance and other
        charges payable by Pledgor provided herein if Pledgor fails to do so. Any
        such
        payments advanced by Collateral Agent shall be repaid by Pledgor upon demand,
        together with interest thereon from the date of the advance until repaid,
        both
        before and after judgment, at the Default Rate.

       

      13.  Default.
        Time is
        of the essence of this Agreement. No course of dealing or any delay or failure
        to assert any Event of Default shall constitute a waiver of that Event of
        Default or of any prior or subsequent Event of Default.

       

      14.  Remedies.
        Upon
        the occurrence of an Event of Default and during the continuance of an Event
        of
        Default, Collateral Agent shall have the following rights and remedies, in
        addition to all other rights and remedies existing at law, in equity, or
        by
        statute or provided in the Loan Documents: (a) Collateral Agent shall have
        all
        the rights and remedies available under the Uniform Commercial Code; and
        (b)
        Collateral Agent may sell or otherwise dispose of any or all of the Collateral
        and, after deducting any costs or expenses incurred by Collateral Agent in
        connection with such sale or disposition, including, without limitation,
        attorneys’ fees, ratably distribute the remainder to each Lender to pay, or to
        hold as a reserve against, the obligations secured by this Agreement.


       

      Pledgor
        shall be liable for all deficiencies owing on any obligation secured by this
        Agreement after liquidation of the Collateral. Collateral Agent shall not
        have
        any obligation to prepare any Collateral for sale or other
        disposition.

       

      The
        rights and remedies herein conferred are cumulative and not exclusive of
        any
        other rights and remedies and shall be in addition to every other right,
        power
        and remedy herein specifically granted or hereafter existing at law, in equity,
        or by statute which Collateral Agent might otherwise have, and any and all
        such
        rights and remedies may be exercised from time to time and as often and in
        such
        order as Collateral Agent may deem expedient. No delay or omission in the
        exercise of any such right, power or remedy or in the pursuance of any remedy
        shall impair any such right, power or remedy or be construed to be a waiver
        thereof or of any default or to be an acquiescence therein.

       

      Regardless
        of the occurrence of any Event of Default, Pledgor agrees to pay all expenses,
        including reasonable attorneys fees and legal expenses, incurred by Collateral
        Agent in any bankruptcy proceeding of any type involving Pledgor, the
        Collateral, or this Agreement, including, without limitation, expenses incurred
        in modifying or lifting the automatic stay, determining adequate protection,
        use
        of cash collateral, or relating to any plan of reorganization.

       

      15.  Suretyship
        Waivers by Pledgor.
        Pledgor
        waives demand, notice, protest, notice of acceptance of this Agreement, notice
        of loans made, credit extended, Collateral received or delivered or other
        action
        taken in reliance hereon and all other demands and notices of any description.
        With respect to both the Obligations and the Collateral, Pledgor assents
        to any
        extension or postponement of the time of payment or any other indulgence,
        to any
        substitution, exchange or release of or failure to perfect any security interest
        in any Collateral, to the addition or release of any party or person primarily
        or secondarily liable, to the acceptance of partial payment thereon and the
        settlement, compromising or adjusting of any thereof, all in such manner
        and at
        such time or times as Collateral Agent may deem advisable. Collateral Agent
        shall have no duty as to the collection or protection of the Collateral or
        any
        income therefrom, the preservation of rights against prior parties, or the
        preservation of any rights pertaining thereto beyond the safe custody thereof
        as
        set forth in Section
        11
        above.
        Pledgor further waives any and all other suretyship defenses.

       

      16.  CHOICE
        OF LAW.
        THIS
        AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREUNDER 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 AGREEMENT AND THE OTHER LOAN
        DOCUMENTS MAY BE TRIED AND LITIGATED IN THE STATE AND FEDERAL COURTS LOCATED
        IN
        THE COUNTY OF SALT LAKE, STATE OF UTAH OR, IN ANY OTHER COURT IN WHICH A
        PARTY
        SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER
        JURISDICTION OVER THE MATTER IN CONTROVERSY. EACH OF PLEDGOR AND COLLATERAL
        AGENT 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 ANY STATE OR FEDERAL COURT LOCATED IN
        THE
        COUNTY OF SALT LAKE, STATE OF UTAH.

       

      17.  WAIVER
        OF JURY TRIAL.
        EACH OF
        PLEDGOR AND COLLATERAL AGENT HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED
        BY
        APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
        DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
        TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED UPON CONTRACT, TORT OR ANY
        OTHER
        THEORY). EACH OF PLEDGOR AND COLLATERAL AGENT (A) CERTIFIES THAT NO
        REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
        OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION,
        SEEK
        TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
        PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
        THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

       

      18.  WAIVER
        OF SPECIAL DAMAGES. TO
        THE
        EXTENT PERMITTED BY APPLICABLE LAW, PLEDGOR SHALL NOT ASSERT, AND HEREBY
        WAIVES,
        ANY CLAIM AGAINST COLLATERAL AGENT ON ANY 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 AGREEMENT
        OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY, THE TRANSACTIONS, THE
        LOAN
        OR THE USE OF THE PROCEEDS THEREOF.

       

      19.  MISCELLANEOUS
        WAIVERS.
        WITH
        RESPECT TO ANY SUIT, ACTION OR PROCEEDINGS RELATING TO THIS AGREEMENT (EACH,
        A
“PROCEEDING”),
        PLEDGOR IRREVOCABLY (A) SUBMITS TO THE JURISDICTION OF THE STATE AND FEDERAL
        COURTS HAVING JURISDICTION IN THE CITY OF SALT LAKE, COUNTY OF SALT LAKE
        AND
        STATE OF UTAH, AND (B) WAIVES ANY OBJECTION WHICH IT MAY HAVE AT ANY TIME
        TO THE
        LAYING OF VENUE OF ANY PROCEEDING BROUGHT IN ANY SUCH COURT, WAIVES ANY CLAIM
        THAT ANY PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM AND FURTHER
        WAIVES
        THE RIGHT TO OBJECT, WITH RESPECT TO SUCH PROCEEDING, THAT SUCH COURT DOES
        NOT
        HAVE JURISDICTION OVER SUCH PARTY. NOTHING IN THIS AGREEMENT SHALL PRECLUDE
        COLLATERAL AGENT FROM BRINGING A PROCEEDING IN ANY OTHER JURISDICTION NOR
        WILL
        THE BRINGING OF A PROCEEDING IN ANY ONE OR MORE JURISDICTIONS PRECLUDE THE
        BRINGING OF A PROCEEDING IN ANY OTHER JURISDICTION. PLEDGOR FURTHER AGREES
        AND
        CONSENTS THAT, IN ADDITION TO ANY METHODS OF SERVICE OF PROCESS PROVIDED
        FOR
        UNDER APPLICABLE LAW, ALL SERVICE OF PROCESS IN ANY PROCEEDING IN ANY UTAH
        STATE
        OR UNITED STATES COURT SITTING IN THE CITY OF SALT LAKE AND COUNTY OF SALT
        LAKE
        MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, DIRECTED
        TO PLEDGOR AT THE ADDRESS INDICATED IN THE GUARANTY, AND SERVICE SO MADE
        SHALL
        BE COMPLETE UPON RECEIPT; EXCEPT
        THAT IF
        PLEDGOR SHALL REFUSE TO ACCEPT DELIVERY, SERVICE SHALL BE DEEMED COMPLETE
        FIVE
        (5) DAYS AFTER THE SAME SHALL HAVE BEEN SO MAILED.

       

      20.  Indemnification.
        Pledgor
        shall indemnify Collateral Agent for any and all claims and liabilities,
        and for
        damages which may be awarded or incurred by Collateral Agent, and for all
        reasonable attorneys fees, legal expenses, and other out-of-pocket expenses
        incurred in defending such claims, arising from or related in any manner
        to the
        negotiation, execution, or performance by Collateral Agent of this Agreement,
        but excluding any such claim based upon breach or default by Collateral Agent
        or
        gross negligence or willful misconduct of Collateral Agent.

       

      Collateral
        Agent shall have the sole and complete control of the defense of any such
        claims. Collateral Agent is hereby authorized to settle or otherwise compromise
        any such claims as Collateral Agent in good faith determines shall be in
        Collateral Agent’s best interest.

       

      21.  Notices.
        All
        notices or demands by any party hereto shall be in writing and shall be sent
        as
        provided in the Chase Loan Agreement. 

       

      22.  General.
        This
        Agreement is made for the sole and exclusive benefit of Pledgor, Lender and
        Collateral Agent and is not intended to benefit any other third party, other
        than Lender. No such third party may claim any right or benefit or seek to
        enforce any term or provision of this Agreement.

       

      If
        the
        incurring of any debt by Pledgor, or the payment of any money or transfer
        of
        property to Collateral Agent or Lender by or on behalf of Pledgor should
        for any
        reason subsequently be determined to be “voidable” or “avoidable” in whole or in
        part within the meaning of any state or federal law (collectively “voidable
        transfers”), including, without limitation, fraudulent conveyances or
        preferential transfers under the United States Bankruptcy Code or any other
        federal or state law, and Collateral Agent or Lender is required to repay
        or
        restore any voidable transfers or the amount or any portion thereof, or upon
        the
        advice of Collateral Agent’s or Lender’s counsel is advised to do so, then, as
        to any such amount or property repaid or restored, including all reasonable
        costs, expenses, and attorneys fees of Collateral Agent or Lender related
        thereto, the liability of Pledgor, and each of them, and this Agreement,
        shall
        automatically be revived, reinstated and restored and shall exist as though
        the
        voidable transfers had never been made.

       

      Any
        provision of this Agreement which is prohibited or unenforceable in any
        jurisdiction shall, as to such jurisdiction only, be ineffective to the extent
        of such prohibition or unenforceability without invalidating the remaining
        provisions hereof, and any such prohibition or unenforceability in any
        jurisdiction shall not invalidate or render unenforceable such provision
        in any
        other jurisdiction.

       

      All
        references in this Agreement to the singular shall be deemed to include the
        plural if the context so requires and vice versa. References in the collective
        or conjunctive shall also include the disjunctive unless the context otherwise
        clearly requires a different interpretation.

       

      All
        agreements, representations, warranties and covenants made by Pledgor shall
        survive the execution and delivery of this Agreement, the filing and
        consummation of any bankruptcy proceedings, and shall continue in effect
        so long
        as any Obligation or any obligation to Collateral Agent contemplated by this
        Agreement is outstanding and unpaid. All agreements, representations, warranties
        and covenants in this Agreement shall bind the party making the same and
        its
        heirs and successors, and shall be to the benefit of and be enforceable by
        each
        party for whom made and their respective heirs, successors and
        assigns.

       

      This
        Agreement may be executed in several counterparts, without the requirement
        that
        all parties sign each counterpart. Each of the counterparts shall be an original
        but all of which together shall constitute one and the same
        instrument.

       

      This
        Agreement constitutes the entire agreement between Pledgor and Collateral
        Agent
        as to the subject matter hereof and may not be altered or amended except
        by
        written agreement signed by Pledgor and Collateral Agent. All other prior
        and
        contemporaneous agreements, arrangements, and understandings between the
        parties
        hereto as to the subject matter hereof are, except as otherwise expressly
        provided herein, rescinded.

       

      [Remainder
        of Page Intentionally Left Blank]

       

       

      
        
          
          

        

        
          
          

          
          

        

        
          
          

        

      



      IN
        WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
        executed as of the date first above written.

       

       

      
        	 	 	 
	 	FRANKLIN
                COVEY CO.
	 
 	 
 	a
                Utah
                corporation
 
	 	By:  	 /s/ RICHARD PUTNAM
	 	
                
Name:
                Richard Putnam
	 	
                Title:
                  Treasurer and Vice President of Investor Relations

                "Pledgor"

              


      

       

       

      
         

        
          	 	 	 
	 	JPMORGAN
                  CHASE BANK, N.A.
	 
 	 
 	a national
                  banking association
 
	 	By:  	 /s/ TONY C. NIELSEN
	 	
                  
Name:
                  Tony C. Nielsen
	 	
                  Title:
                    Senior Vice President

                  "Collateral
                    Agent"