Exhibit 10.2


     

      
        

      

    

    Exhibit
      10.2

    
 

    SECURED
      PROMISSORY NOTE

     

    
      	$18,000,000.00 	
              Salt
                Lake City, Utah

            
	
               

            	
              March
                14,
                2007

            


    

     

    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 80 West Broadway, Suite 200, Salt Lake City, Utah, 84101, or
      at
      such other place as Holder may from time to time designate in writing, the
      principal sum of up to EIGHTEEN MILLION AND NO/100 DOLLARS ($18,000,000.00),
      or
      so much thereof as shall from time to time be disbursed under that certain
      Revolving Line of 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 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 “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.

     

    “Affiliate”
of
      any
      Person means any other Person directly or indirectly controlling or controlled
      by or under direct or indirect common control with such Person. For the purposes
      of this definition, “control,” when used with respect to any Person, means the
      power to direct the management and policies of such Person, directly or
      indirectly, whether through the ownership of voting securities, by contract
      or
      otherwise; and the terms “controlling” and “controlled” have meanings
      correlative to the foregoing. The term “Affiliate” does not include the
      officers, directors, or employees of a Person, if the Person is a corporation,
      and does not include the employees or members of a Person, if the Person is
      a
      limited liability company or limited partnership.

     

    “Business Day”
means
      a
      day other than a Saturday, Sunday or any other day on which Holder’s branch
      located at 80 West Broadway, Salt Lake City, Utah is authorized or obligated
      to
      close.

     

    “Default Interest Rate”
means
      a
      rate of interest equal to the lesser of (a) the aggregate of THREE PERCENT
      (3.0%) per annum plus the Interest Rate and (b) the highest rate legally
      permissible under applicable law. The Default Interest Rate shall change from
      time to time as and when the Interest Rate changes.

     

    “Interest Rate”
means
      an interest rate equal to the Interest Rate, as defined in Section 1.1 of the
      Loan Agreement.

     

    “Loan Documents”
has
      the
      meaning given to such term in the Loan Agreement.

     

    “Maturity Date”
means
      March 14, 2010.

     

    “Payment Date”
means
      the first (1st)
      day of
      each calendar month.

     

    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
      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 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 commitment to make 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 May 2007, 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 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 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 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 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.

     

    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.

     

    22. 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
      Loan.

     

    [Remainder
      of Page Intentionally Left Blank]

     

     

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    


    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/
              RICHARD PUTNAM
	 	
              
Name:
              Richard Putnam
	 	
              Title:
                Treasurer and Vice President of Investor Relations

              "Maker"