Document:

exhibit10_1.htm

     

     

     

    
      

      

    

    Exhibit 10.1

     

    
 

    FOURTH
MODIFICATION AGREEMENT

     

    This
FOURTH MODIFICATION
AGREEMENT (the “Modification Agreement”) is
made effective as of February 25, 2010, by and among FRANKLIN COVEY CO., a Utah
corporation (“Borrower”), whose address is
2200 West Parkway Blvd., Salt Lake City, Utah 84119, each undersigned Guarantor,
and JPMORGAN CHASE BANK,
N.A., a national banking association (“Lender”), whose address is
201 South Main Street, Suite 300, Salt Lake City, Utah 84111.

     

    RECITALS:

     

    A. Lender
has previously extended to Borrower a revolving line of credit loan (the “Loan”) in the maximum
principal amount of TWENTY-FIVE MILLION AND NO/100 DOLLARS ($25,000,000.00), as
reduced from time to time, pursuant to a Revolving Line of Credit Agreement
dated as of March 14, 2007 (as amended and modified from time to time, the
“Loan Agreement”), and
evidenced by a Secured Promissory Note dated March 14, 2007 (as amended and
modified from time to time, the “Note”).  As of the
date hereof, the maximum principal amount of the Loan is THIRTEEN MILLION FIVE
HUNDRED THOUSAND AND NO/100 DOLLARS ($13,500,000.00).  Capitalized
terms used herein without definition shall have the meanings given to such terms
in the Loan Agreement and Note.

     

    B. Repayment
of the Loan is guaranteed pursuant to the terms of a Repayment Guaranty dated as
of March 14, 2007 (as amended and modified from time to time, the “Guaranty”), executed by FRANKLIN DEVELOPMENT
CORPORATION, a Utah corporation, FRANKLIN COVEY TRAVEL, INC., a
Utah corporation, and FRANKLIN
COVEY CLIENT SALES, INC., a Utah corporation (individually and
collectively, as the context requires, and jointly and severally, “Guarantor”), in favor of
Lender.

     

    C. The Loan
is secured by, among other things, (i) a Security Agreement dated as of March
14, 2007 (as amended and modified from time to time, the “Security Agreement”),
executed by Borrower and Guarantor, as “debtor,” in favor of JPMORGAN CHASE BANK, N.A., a
national banking association, not in its individual capacity, but solely as
collateral agent (in such capacity, the “Collateral Agent”) for
Lender; (ii) a Pledge and Security Agreement dated as of March 14, 2007 (as
amended and modified from time to time, the “Pledge and Security Agreement”),
executed by Borrower, as “pledgor,” in favor of Collateral Agent; and (iii) an
Account Control Agreement dated as of March 14, 2007 (as amended and modified
from time to time, the “Account Control Agreement”),
executed by Borrower and Guarantor, as “debtor,” Collateral Agent, as
“creditor,” and Zions First National Bank, a national banking association, as
“bank” (collectively, the “Security
Documents”).

     

    D. The Loan
Agreement, Note, Guaranty, Security Documents and all other agreements,
documents, and instruments governing, evidencing, securing, guaranteeing or
otherwise relating to the Loan, as modified in this Modification Agreement, are
sometimes referred to individually and collectively as the “Loan Documents.”

     

    E. The
incurrence of a 100 million yen loan in December 2009 by Franklin Covey Japan, a
Subsidiary of Borrower and one of the Consolidated Entities (the “FC Japan Loan”), resulted in
an Event of Default under Section 7.1 of the Loan Agreement because the FC Japan
Loan, which when obtained equaled approximately $1,100,000, violated the
prohibition against the incurrence of additional Indebtedness by the
Consolidated Entities in excess of $1,000,000 in any individual case (generally,
the “FC Japan Loan
Default”).  Borrower has informed Lender that the outstanding
balance of the FC Japan Loan (expressed in U.S. Dollars) as of the date hereof
is less than $1,000,000.

     

    F. Subject
to the terms and conditions contained herein, Borrower and Lender now desire to
modify the Loan Documents to: (i) extend the maturity date of the Loan from
March 14, 2010 to March 14, 2011; (ii) modify the schedule pursuant to which the
Loan Amount will be reduced; (iii) modify the method by which the interest rate
applicable under the Loan Documents will be calculated; (iv) modify the funded
debt to EBITDAR ratio, the fixed charge coverage ratio, and the net worth
covenant as set forth herein; (v)

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    modify
the definition of “Obligations” and “Chase Obligations” under the Loan Agreement
and the Security Agreement, respectively; (vi) make such other modifications as
are set forth herein; and (vii) waive the FC Japan Loan Default.

     

    AGREEMENT:

     

    For good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Borrower, Guarantor and Lender agree as follows:

     

    1. ACCURACY
OF RECITALS.  Each of Borrower and each Guarantor acknowledges
the accuracy of the Recitals which are incorporated herein by
reference.

     

    2. MODIFICATION
OF LOAN DOCUMENTS.  The Loan Documents are modified as
follows:

     

    (a) Loan Amount
Reductions.

     

    (1) Loan
Agreement.  The definition of “Loan Amount” set forth in
Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety
to read as follows:

     

    “Loan Amount” means, effective
as of November 30, 2009, the amount of up to THIRTEEN MILLION FIVE HUNDRED
THOUSAND AND NO/100 DOLLARS ($13,500,000.00), plus any sum in addition thereto
advanced by Lender in its sole and absolute discretion in accordance with the
Loan Documents, to be disbursed pursuant to the terms and conditions of this
Agreement; provided,
however, that such amount shall be reduced effective as of December 31,
2010 to the amount of TEN MILLION AND NO/100 DOLLARS
($10,000,000.00).

     

    (2) Note.  The
reference in Section 1 of the Note to “TWENTY-FIVE MILLION AND NO/100 DOLLARS
($25,000,000.00)” has previously been amended so that, effective as of November
30, 2009, such amount is THIRTEEN MILLION FIVE HUNDRED THOUSAND AND NO/100
DOLLARS ($13,500,000.00).  Section 1 of the Note is hereby further
amended to provide that the amount of such reference shall be reduced effective
as of December 31, 2010 to TEN MILLION AND NO/100 DOLLARS
($10,000,000.00).

     

    (b) Maturity Date
Extension.

     

    (1) Loan
Agreement.  The definition of “Maturity Date” set forth in
Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety
to read as follows:

     

    “Maturity Date” means March 14,
2011.

     

    (2) Note.  The
definition of “Maturity Date” set forth in Section 2 of the Note is hereby
amended and restated in its entirety to read as follows:

     

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

     

    (c) Interest Rate
Calculations.

     

    (1) Amended Definition of
Interest Rate.  The definition of “Interest Rate” set forth in
Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety
to read as follows:

     

    
      
         

      

      
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    “Interest Rate” means a
variable rate equal to the LIBO Rate in effect from time to time plus the
applicable Interest Rate Margin in effect from time to time.

     

    (2) New Definition of Interest
Rate Margin.  Section 1.1 of the Loan Agreement is hereby
amended by adding the following new definition of “Interest Rate
Margin”:

     

    “Interest Rate Margin” means a
per annum margin expressed in basis points calculated in accordance with the
following table:

     

    
      	
              Pricing

              Level

            	
              Funded Debt to

              EBITDAR Ratio

            	 
      	
              Fixed Charge

              Coverage Ratio

            	
              Interest Rate

              Margin

               

            
	
              1

            	
              Greater
      than

              or
      equal to

              2.50
      to 1.00

            	
              OR

            	
              Less
      than

              2.00
      to 1.00

            	
              350
      bps

            
	
              2

            	
              Less
      than

              2.50
      to 1.00

            	
              AND

            	
              Greater
      than

              or
      equal to

              2.00
      to 1.00

            	
              260
      bps

            

    

    

     

    (d) Financial
Covenants.

     

    (1) Funded Debt to EBITDAR
Ratio.  Section 6.8(a) of the Loan Agreement is hereby amended
and restated in its entirety to read as follows:

     

    (a) Funded Debt to EBITDAR
Ratio.  Permit its ratio of (A) total liabilities, plus the net
present value of payments under operating leases at a discount rate of seven
percent (7%), but excluding (1) accounts arising from the purchase of goods and
services in the ordinary course of business, (2) accrued expenses or losses, and
(3) deferred revenues or gains, to (B) net income, plus amortization expense,
depreciation expense, interest expense, income tax expense, and rents and
operating lease payments, less extraordinary gains and losses (collectively,
“EBITDAR”), for the
twelve (12) month period then ending, to be greater than (x) 3.75 to 1.00 as of
the end of the fiscal quarter of Borrower ending on February 28, 2010, (y) 3.50
to 1.00 as of the end of the fiscal quarter of Borrower ending on May 29, 2010,
and (z) 3.00 to 1.00 as of the end of the fiscal quarter of Borrower ending on
August 31, 2010 and each fiscal quarter thereafter.

     

    Notwithstanding
the foregoing, clause (B) of the definition of EBITDAR shall be revised as
follows for the specified periods to permit Borrower to add the following
amounts to the calculation of EBITDAR (in each case to the extent actually
incurred): (i) for the twelve (12) month period ending on February 28, 2010, up
to $3,569,000 of non-recurring impairment costs related to the sale of
Borrower’s Consumer Solutions Business Unit and up to $6,325,000 of
non-recurring restructuring, severance and other costs; and (ii) for the twelve
(12) month period ending on May 29, 2010, up to $3,569,000 of non-recurring
impairment costs related to the sale of Borrower’s Consumer Solutions Business
Unit and up to $4,045,000 non-recurring restructuring, severance and other
costs.

     

    
      
         

      

      
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    (2) Fixed Charge Coverage
Ratio.  Section 6.8(b) of the Loan Agreement is hereby amended
to provide that the fixed charge coverage ratio described therein shall not be
less than 1.50 to 1.00 as of the end of the fiscal quarter of Borrower ending on
February 28, 2010 and each fiscal quarter thereafter.

     

    (3) Minimum Net Worth
Covenant.  Section 6.8(d) of the Loan Agreement is hereby
amended and restated in its entirety to read as follows:

     

    (d) Minimum Net
Worth.  Permit its Net Worth to be less than SIXTY-SEVEN
MILLION AND NO/100 DOLLARS ($67,000,000.00).  As used in this Section 6.8(d), the term
“Net Worth” means the
Consolidated Entities’ total assets less total
liabilities, in each case as determined in accordance with GAAP.

     

    (e) Secured
Obligations.

     

    (1) Loan
Agreement.  The definition of “Obligations” set forth in
Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety
to read as follows:

     

    “Obligations” means all
obligations, indebtedness and liabilities of Borrower, whether individual, joint
and several, absolute or contingent, direct or indirect, liquidated or
unliquidated, now or hereafter existing, in favor of Lender, including without
limitation, all liabilities, all interest, costs and fees arising under or from
the Loan Documents or any other note, open account, overdraft, letter of credit
application, endorsement, surety agreement, guaranty, credit card, lease, Rate
Management Transaction, acceptance, foreign exchange contract or depository
service contract, whether payable to Lender or to a third party and subsequently
acquired by Lender, any monetary obligations (including interest) incurred or
accrued during the pendency of any bankruptcy, insolvency, receivership or other
similar proceedings, regardless of whether allowed or allowable in such
proceeding, and all renewals, extensions, modifications, consolidations,
rearrangements, restatements, replacements or substitutions of any of the
foregoing.  “Rate
Management Transaction” means any transaction (including an agreement
with respect thereto) evidenced by a Swap Agreement or that is a rate swap,
basis swap, forward rate transaction, commodity swap, commodity option, equity
or equity index swap, equity or equity index option, bond option, interest rate
option, foreign exchange transaction, cap transaction, floor transaction, collar
transaction, forward transaction, currency swap transaction, cross-currency rate
swap transaction, currency option, derivative transaction or any other similar
transaction (including any option with respect to any of these transactions) or
any combination thereof, whether linked to one or more interest rates, foreign
currencies, commodity prices, equity prices or other financial measures.
Borrower and Lender specifically contemplate that the Obligations include
indebtedness or other obligations hereafter incurred by Borrower to
Lender.

     

    (2) Security
Agreement.  The definition of “Chase Obligations” set forth in
Section 2 of the Note is hereby amended and restated in its entirety to read as
follows:

     

    “Chase Obligations” means all
obligations, indebtedness and liabilities of Borrower or Guarantor, whether
individual, joint and several, absolute or contingent, direct or indirect,
liquidated or unliquidated, now or hereafter

     

    
      
         

      

      
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    existing,
in favor of Lender, including without limitation, all liabilities, all interest,
costs and fees arising under or from the Loan Documents or any other note, open
account, overdraft, letter of credit application, endorsement, surety agreement,
guaranty, credit card, lease, Rate Management Transaction, acceptance, foreign
exchange contract or depository service contract, whether payable to Lender or
to a third party and subsequently acquired by Lender, any monetary obligations
(including interest) incurred or accrued during the pendency of any bankruptcy,
insolvency, receivership or other similar proceedings, regardless of whether
allowed or allowable in such proceeding, and all renewals, extensions,
modifications, consolidations, rearrangements, restatements, replacements or
substitutions of any of the foregoing.  “Rate Management Transaction”
means any transaction (including an agreement with respect thereto) evidenced by
a Swap Agreement or that is a rate swap, basis swap, forward rate transaction,
commodity swap, commodity option, equity or equity index swap, equity or equity
index option, bond option, interest rate option, foreign exchange transaction,
cap transaction, floor transaction, collar transaction, forward transaction,
currency swap transaction, cross-currency rate swap transaction, currency
option, derivative transaction or any other similar transaction (including any
option with respect to any of these transactions) or any combination thereof,
whether linked to one or more interest rates, foreign currencies, commodity
prices, equity prices or other financial measures. Each of Borrower, Guarantor
and Lender specifically contemplate that the Chase Obligations include
indebtedness or other obligations hereafter incurred by Borrower or any
Guarantor to Lender.

     

    (f) Conforming
Modifications.  Each of the Loan Documents is modified to be
consistent herewith and to provide that it shall be a default or an Event of
Default thereunder if Borrower shall fail to comply with any of the covenants of
Borrower herein or if any representation or warranty by Borrower herein or by
any guarantor in any related Consent and Agreement of Guarantor(s) is materially
incomplete, incorrect, or misleading as of the date hereof.  In order
to further effect certain of the foregoing modifications, Borrower and Guarantor
agree to execute and deliver such other documents or instruments as Lender
reasonably determines are necessary or desirable.

     

    (g) References.  Each
reference in the Loan Documents to any of the Loan Documents shall be a
reference to such document as modified herein or as modified on or about the
date hereof.

     

    (h) Allonge to
Note.  An original of this Modification Agreement may be
attached to the original Note as an allonge and made a part of the Note, provided, however, that
failure to attach an original of this Modification Agreement as an allonge to
the Note shall not impact the effectiveness of this Modification Agreement and
this Modification Agreement shall nonetheless be valid, binding and
enforceable.

     

    3. WAIVER OF
FC JAPAN LOAN DEFAULT.  Lender hereby waives the FC Japan Loan
Default.  Notwithstanding the foregoing waiver, strict compliance with
the underlying covenant which was breached shall be required at all times
hereafter.  Borrower represents and warrants to Lender that the
outstanding balance of the FC Japan Loan (expressed in U.S. Dollars) as of the
date hereof is less than $1,000,000.

     

    
      
         

      

      
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    4. RATIFICATION
OF LOAN DOCUMENTS AND COLLATERAL.  The Loan Documents are
ratified and affirmed by Borrower and shall remain in full force and effect as
modified herein.  Any property or rights to or interests in property
granted as security in the Loan Documents shall remain as security for the Loan
and the obligations of Borrower in the Loan Documents.  The waivers
set forth herein, if any, shall be limited precisely as written and shall not be
deemed, except as expressly set forth herein, (i) to be a consent to any
modification or waiver of any other terms or conditions of any of the Loan
Documents; (ii) to prejudice any right, remedy, power or privilege which Lender
now has or may have in the future under or in connection with the Loan
Documents; or (iii) to be construed as a commitment on the part of Lender to
waive any subsequent violation of the same or any other term or condition set
forth in the Loan Documents.

     

    5. FEES AND
EXPENSES.

     

    (a) Fees and
Expenses.  In consideration of Lender’s agreement to amend the
Loan Documents as set forth herein, and in addition to any other fees or amounts
payable by Borrower hereunder, Borrower has agreed to pay to Lender (i) all
legal fees and expenses incurred by Lender in connection herewith; and (ii) all
other costs and expenses incurred by Lender in connection with executing this
Modification Agreement and otherwise modifying the Loan
Documents.  Borrower acknowledges and agrees that such fees are fully
earned and nonrefundable as of the date this Modification Agreement is executed
and delivered by the parties hereto.

     

    (b) Method of
Payment.  Such fees shall be paid by Borrower to Lender on the
date hereof or at such later date as such fees, costs and expenses are incurred
by Lender.  Borrower and Lender agree and acknowledge that the
foregoing shall not relieve Borrower of its obligation to make future monthly
payments of interest and other amounts as required under the terms of the
Loan.

     

    6. BORROWER
REPRESENTATIONS AND WARRANTIES.  Each of Borrower and Guarantor
represents and warrants to Lender:  (a) No default or event of default
under any of the Loan Documents as modified herein, nor any event, that, with
the giving of notice or the passage of time or both, would be a default or an
event of default under the Loan Documents as modified herein has occurred and is
continuing; (b) There has been no material adverse change in the financial
condition of Borrower or Guarantor or any other person whose financial statement
has been delivered to Lender in connection with the Loan from the most recent
financial statement received by Lender; (c) Each and all representations and
warranties of Borrower and Guarantor in the Loan Documents are accurate on the
date hereof; (d) Neither Borrower nor Guarantor has any claims, counterclaims,
defenses, or set-offs with respect to the Loan or the Loan Documents as modified
herein; (e) The Loan Documents as modified herein are the legal, valid, and
binding obligation of Borrower and Guarantor, enforceable against Borrower and
Guarantor in accordance with their terms; (f) Each of Borrower and each
Guarantor is validly existing under the laws of the State of its formation or
organization, has not changed its legal name as set forth above, and has the
requisite power and authority to execute and deliver this Modification Agreement
and to perform the Loan Documents as modified herein; (g) The execution and
delivery of this Modification Agreement and the performance of the Loan
Documents as modified herein have been duly authorized by all requisite action
by or on behalf of Borrower and Guarantor; and (h) This Modification Agreement
has been duly executed and delivered on behalf of Borrower and
Guarantor.

     

    7. BORROWER
AND GUARANTOR COVENANTS.  Each of Borrower and Guarantor
covenants with Lender:

     

    (a) Each of
Borrower and Guarantor shall execute, deliver, and provide to Lender such
additional agreements, documents, and instruments as reasonably required by
Lender to effectuate the intent of this Modification Agreement.

     

    (b) Each of
Borrower and Guarantor fully, finally, and forever releases and discharges
Lender and its successors, assigns, directors, officers, employees, agents, and
representatives from

     

    
      
         

      

      
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    any and
all actions, causes of action, claims, debts, demands, liabilities, obligations,
and suits, of whatever kind or nature, in law or equity, that either Borrower or
Guarantor has or in the future may have, whether known or unknown, (i) in
respect of the Loan, the Loan Documents, or the actions or omissions of Lender
in respect of the Loan or the Loan Documents and (ii) arising from events
occurring prior to the date of this Modification Agreement.

     

    (c) Contemporaneously
with the execution and delivery of this Modification Agreement, Borrower has
paid to Lender all of the internal and external costs and expenses incurred by
Lender in connection with this Modification Agreement (including, without
limitation, inside and outside attorneys, appraisal, appraisal review,
processing, title, filing, and recording costs, expenses, and
fees).

     

    (d) On or
prior to the execution and delivery of this Modification Agreement, each of
Borrower and Guarantor shall have executed and delivered, or caused to be
executed and delivered, to Lender, each in form and substance satisfactory to
Lender, such other documents, instruments, resolutions, subordinations, and
other agreements as Lender may require in its sole discretion.

     

    8. EXECUTION
AND DELIVERY OF AGREEMENT BY LENDER.  Lender shall not be bound
by this Modification Agreement until (a) Lender has executed and delivered this
Modification Agreement to Borrower and Guarantor, (b) each of Borrower and
Guarantor has performed all of the obligations of Borrower and Guarantor under
this Modification Agreement to be performed contemporaneously with the execution
and delivery of this Modification Agreement, if any, and (c) Borrower has paid
all fees and costs required under Section 5 hereof.

     

    9. INTEGRATION,
ENTIRE AGREEMENT, CHANGE, DISCHARGE, TERMINATION, OR
WAIVER.  The Loan Documents as modified herein contain the
complete understanding and agreement of Borrower, Guarantor and Lender in
respect of the Loan and supersede all prior representations, warranties,
agreements, arrangements, understandings, and negotiations.  No
provision of the Loan Documents as modified herein may be changed, discharged,
supplemented, terminated, or waived except in a writing signed by the parties
thereto.

     

    10. BINDING
EFFECT.  The Loan Documents, as modified herein, shall be
binding upon and shall inure to the benefit of Borrower, Guarantor and Lender
and their successors and assigns; provided, however, neither
Borrower nor Guarantor may assign any of its rights or delegate any of its
obligations under the Loan Documents and any purported assignment or delegation
shall be void.

     

    11. CHOICE OF
LAW. THIS MODIFICATION 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 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 LENDER, IN ANY OTHER COURT IN
WHICH LENDER SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT
MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY.  EACH OF THE
PARTIES 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.

     

    
      
         

      

      
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    12. COUNTERPART
EXECUTION.  This Modification Agreement may be executed in one
or more counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same document.  Signature pages
may be detached from the counterparts and attached to a single copy of this
Modification Agreement to physically form one document. Receipt by the Lender of
an executed copy of this Modification Agreement by facsimile shall constitute
conclusive evidence of execution and delivery of the Modification by the
signatory thereto.

     

     

     

    [Remainder
of Page Intentionally Left Blank]

    
      
         

      

      
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    DATED as
of the date first above stated.

     

    
 

    
      
        	
                FRANKLIN
      COVEY CO.

                a
      Utah corporation

                 

                 

              
	
                By:

              	
                /s/
      Stephen D. Young

              
	
                Name:

              	
                Stephen
      D. Young

              
	
                Title:

              	
                Chief
      Financial Officer

              
	 
      	
                “Borrower”

                 

              
	
                FRANKLIN
      DEVELOPMENT CORPORATION

                a
      Utah corporation

                 

                 

              
	
                By:

              	
                /s/
      Stephen D. Young

              
	
                Name:

              	
                Stephen
      D. Young

              
	
                Title:

              	
                Vice
      President

                 

                 

              
	
                FRANKLIN
      COVEY TRAVEL, INC.

                a
      Utah corporation

                 

                 

              
	
                By:

              	
                /s/
      Stephen D. Young

              
	
                Name:

              	
                Stephen
      D. Young

              
	
                Title:

              	
                Vice
      President

                 

                 

              
	
                FRANKLIN
      COVEY CLIENT SALES, INC.

                a
      Utah corporation

                 

                 

              
	
                By:

              	
                /s/
      Stephen D. Young

              
	
                Name:

              	
                Stephen
      D. Young

              
	
                Title:

              	
                Vice
      President

              
	 
      	
                “Guarantor”

              

      

     

     
 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    

    
      	
              JPMORGAN
      CHASE BANK, N.A.

              a
      national banking association

               

               

            
	
              By:

            	
              /s/
      Tony C. Nielsen

            
	
              Name:

            	
              Tony
      C. Nielsen

            
	
              Title:

            	
              Senior
      Vice President

            
	 
      	
              “Lender”Exhibit 10.32 

January 5,
2010 

Joe McCullough

1792 Hartford Avenue 

St. Paul, MN 55116 

Dear Joe, 

This letter
will memorialize the discussions with respect to your retirement from St. Jude
Medical, Inc. It has been agreed that: 

	
  

 	
  

 	
  

 
	
  

 	
 1.

 	
 Compensation.
 You will retire from the Company effective December 24, 2010. Beginning with
 the pay period that started on November 2, 2009, your current annual base pay
 of $575,000 has been adjusted to $500,000 per year, payable in accordance
 with the Company’s standard payroll practices. You will remain a full-time
 employee through December 24, 2010. During the period from November 2, 2009
 to December 24, 2010, your duties have been and will be limited to specific
 matters on which Dan Starks may ask your assistance. You may terminate your
 relationship with the Company at any time by written notice. Should you
 terminate your employment before December 24, 2010, you will be entitled to
 receive a lump sum payment equal to $500,000 less any amounts already paid to
 you as salary for 2010 and less applicable taxes, to be paid in accordance
 with the Company’s standard practices for such payments. You are no longer
 eligible for the executive perquisite allowance. 

 
	
  

 	
  

 	
  

 
	
  

 	
 2.

 	
 Non-Competition
 Agreement. Subject to the earlier termination of
 your employment with the Company, the effective date of your retirement will
 be December 24, 2010 for purposes of the Non-Competition Agreement with the
 Company dated October 2, 2007, unless your employment is terminated earlier,
 in which case the non-competition agreement period commences on the date of
 actual termination of employment. 

 
	
  

 	
  

 	
  

 
	
  

 	
 3.

 	
 Resignation
 as Officer. You have resigned as an officer of the
 Company and all subsidiaries and affiliates effective November 1, 2009. 

 
	
  

 	
  

 	
  

 
	
  

 	
 4.

 	
 MICP.
 You will continue to participate in MICP for 2009 with a target percentage at
 100% of your eligible base earnings for 2009, reflecting the adjustment
 described in #1 above. The MICP payment will be paid during February 2010
 based on performance results in accordance with the Company’s normal business
 practices, assuming: (a) your continued employment by the Company until the
 payment date; (b) that you sign and do not rescind the Release provided for
 in #11 below; and (c) that you cooperate with the Company in the transition
 of your position and otherwise comply with the terms hereof. You will not be
 eligible for MICP for 2010. 

 
	
  

 	
  

 	
  

 
	
  

 	
 5.

 	
 PTO.
 You will arrange for the use of vacation time and other PTO days such that
 any available PTO balance as of November 1, 2009 will be completely consumed
 during 2009 and 2010 and no unused PTO will exist at December 24, 2010. 

 
	
  

 	
  

 	
  

 
	
  

 	
 6.

 	
 Options and
 Restricted Stock. You will not participate in the
 Company’s normal December 2009 stock option grant. Any unvested stock option
 grants will continue to vest through December 24, 2010 or any earlier date on
 which you may terminate your relationship with the Company. As provided under
 the Company’s stock option plans, as an Early Retiree, you will have 3 years
 after your last day as an employee to exercise stock options that have vested
 as of the termination of your employment subject to the condition that no
 option shall be exercisable after the Expiration Date of such option. In the
 event your employment is terminated for the reasons of death or disability,
 you or your representatives will have 12 months from your termination to
 exercise any options that have vested as of the termination of your
 employment subject to the condition that no option shall be exercisable after
 the expiration date of the option. Upon your termination of employment, all
 unvested options will be forfeited. Restricted stock will be treated in
 accordance with its terms.

 

	
  

 	
  

 	
  

 
	
  

 	
 7.

 	
 Insider
 Trading. We understand that after November 1, 2009
 you no longer had access to Company “insider information.” Consequently, as
 of that date you were removed from the Insider List and free to trade in
 shares of STJ (including the same-day sale and cashless exercise of vested
 stock options). Please keep in mind that, regardless of whether your name is
 on the Insider List, it is illegal to trade in Company securities if you are
 aware of material non-public information about the Company. 

 
	
  

 	
  

 	
  

 
	
  

 	
 8.

 	
 Management
 Savings Plan. Pursuant to the terms of the MSP, you
 will begin to receive lump sum distributions from your MSP account beginning
 six months following the end of the quarter in which your employment
 terminates in accordance with the valid elections on file. You will not be
 eligible to contribute to the MSP in 2010. 

 
	
  

 	
  

 	
  

 
	
  

 	
 9.

 	
 Profit Sharing.
 You will participate in any profit sharing made available in 2009 and paid in
 2010. You will not receive this benefit for 2010. 

 
	
  

 	
  

 	
  

 
	
  

 	
 10.

 	
 Benefits.
 You and your dependents may continue as participants in the Company’s benefit
 programs (medical, dental, vision, and life insurance) program so long as you
 continue your employment with the Company. The human resources department
 and/or our COBRA administrator (Benesyst) will provide additional information
 regarding your options to continue all of these plans under COBRA shortly
 after your retirement date. 

 
	
  

 	
  

 	
  

 
	
  

 	
 11.

 	
 Termination
 of Severance Agreement and Release. You have been
 notified that your Severance Agreement with the Company dated December 31,
 2008, was terminated, pursuant to Section 1 of that agreement, effective
 December 29, 2009. Contemporaneous with countersigning this letter, you will
 enter into a Release in a form substantially similar to the Release attached
 hereto as Exhibit A. As a further condition of the Company’s
 agreements herein, on or about December 24, 2010, you will enter into a
 Release in a form substantially similar to the Release attached hereto as Exhibit
 B. 

 
	
  

 	
  

 	
  

 
	
  

 	
 12.

 	
 Indemnification
 Agreement. Your Indemnification Agreement with the
 Company dated September 30, 2008 will remain in full force and effect
 regardless of your change in position, this agreement and the Releases
 referenced in the paragraph above. 

 
	
  

 	
  

 	
  

 
	
  

 	
 13.

 	
 Expense.
 Travel expenses that you incur that are authorized in advance, in writing,
 will be reimbursed in accordance with the Company’s travel expense policy for
 officer level employees. No expenses not specifically authorized will be
 reimbursed. 

 

	
  

 	
  

 	
  

 
	
  

 	
 Thank you
 for your willingness to assist us through this transition and for your
 substantial contribution to the success of St. Jude Medical. 

 
	
  

 	
  

 
	
  

 	
 Sincerely, 

 
	
  

 	
  

 
	
  

 	
 ST. JUDE
 MEDICAL, INC.

 
	
  

 	
  

 
	
  

 	
 /s/ Pamela
 S. Krop

 	
  

 
	
  

 	
 Pamela S.
 Krop

 
	
  

 	
 Vice
 President and General Counsel

 

	
  

 	
  

 	
  

 
	
  

 	
 Acknowledged
 and Agreed:

 
	
  

 	
  

 
	
  

 	
 /s/ Joseph
 H. McCullough

 	
  

 
	
  

 	
 Joseph H.
 McCullough

 

EXHIBIT A

FULL AND FINAL RELEASE

I.            Definitions.
I intend all words used in this Full and Final Release to have their plain
meanings in ordinary English. Technical legal words are not needed to describe
what I mean. Specific terms I use in this Full and Final Release have the
following meanings: 

A.          “I,”
“me,” “my” and “Employee” include both me, Joseph McCullough, and
anyone who has or obtains any legal rights or claims through me. 

B.          “Employer,”
as used in this Full and Final Release, shall at all times mean St. Jude
Medical, Inc., and its parent and any subsidiary corporations, successors,
predecessors and assigns, present or former officers, directors, shareholders,
agents, assigns, employees, and attorneys, whether in their individual or
official capacities. 

C.          “Claims”
mean any and all of the actual or potential claims of any kind whatsoever I may
have had, or currently may have against Employer, arising up to the date I sign
this Full and Final Release, regardless of whether I now know about those
claims, that are in any way related to my employment with Employer or the
termination of that employment. Such claims include, but are not limited to any
claims for: invasion of privacy; breach of written or oral, express or implied,
contract (including, without limitation, that certain Severance Agreement
between Employer and me dated December 31, 2008); fraud or misrepresentation;
violation of the Age Discrimination in Employment Act of 1967 (“ADEA”), 29
U.S.C. § 626, as amended, the Older Workers Benefit Protection Act of 1990
(“OWBPA”), 29 U.S.C. 626(f), Title VII of the Civil Rights Act of 1964 (“Title
VII”), 42 U.S.C. § 2000e, et seq., the Americans with
Disabilities Act (“ADA”), 29 U.S.C. § 2101, et seq., the Family
and Medical Leave Act (“FMLA”), 29 U.S.C. § 2601 et seq., the
Employee Retirement Income Security Act of 1978 (“ERISA”), as amended, 29
U.S.C. §§ 1001, et seq., Equal Pay Act (“EPA”), 29 U.S.C. §
206(d), the Worker Adjustment and Retraining Notification Act (“WARN”), 29
U.S.C. § 2101 et seq., the Minnesota Human Rights Act, Minn.
Stat. § 363A.01, et seq., Minnesota Statutes § 181 et seq.
or any other state human rights or fair employment practices act, and any other
federal, state, local or foreign statute, law, rule, regulation, ordinance or
order. Such claims also include, but are not limited to: claims under the
Management Incentive Compensation Plan; claims for violation of any civil
rights laws based on protected class status; claims for assault, battery, defamation,
intentional or negligent infliction of emotional distress, breach of the
covenant of good faith and fair dealing, promissory estoppel, negligence,
negligent hiring, retention or supervision, retaliation, constructive
discharge, violation of whistleblower protection laws, unjust enrichment,
violation of public policy, and all other claims for unlawful employment
practices, and all other common law or statutory claims. 

II.          Agreement
to Release My Claims. Except as stated in Section IV of this Full and Final
Release, I agree to release all my Claims. I may, but am not required to,
withdraw or dismiss, or attempt to withdraw or dismiss, any charges that I may
have pending against the Employer with the Equal Employment Opportunity
Commission (“EEOC”) or other civil rights enforcement agency. In exchange for
my agreement to release my Claims, I am receiving satisfactory consideration
from Employer to which I am not otherwise entitled by law or contract. The
consideration I am receiving is a full and fair payment for the release of all
my Claims. Employer does not owe me anything in addition to what I will be
receiving. 

III.         Older
Workers Benefit Protection Act. I understand and have been advised that the
above release of My Claims is subject to the terms of the Older Workers Benefit
Protection Act (“OWBPA”). The OWBPA provides that an individual cannot waive a
right or claim under the Age Discrimination in Employment Act (“ADEA”) unless
the waiver is knowing and voluntary. I have been advised of this law, and I
agree that I am signing this Full and Final Release voluntarily, and with full
knowledge of its consequences. I understand that the Employer is giving me
twenty-one (21) days from the date I received a copy of this Full and Final
Release to decide whether I want to sign it. I acknowledge that I have been
advised to use this time to consult with an attorney about the effect of this
Full and Final Release. If I sign this Full and Final Release before the end of
the twenty-one (21) day period it will be my personal, voluntary decision to do
so, and will be done with full knowledge of my legal rights. I agree that
material and/or immaterial changes to this Agreement or Full and Final Release
will not restart the running of this consideration period. 

IV.         Exclusions
from Release. 

A.          The
term “Claims” does not include my rights, if any, to claim the following:
unemployment insurance benefits; workers compensation benefits; claims for my
vested post-termination benefits under any 401(k), SERP or similar retirement
benefit plan; my rights to group medical or group dental insurance coverage
pursuant to section 4980B of the Internal Revenue Code of 1986, as amended
(“COBRA”); my rights to indemnification, with respect to events occurring prior
to the date of this Full and Final Release, under Employer’s charter documents,
Minnesota corporate law, any Directors and Officers insurance maintained by the
Employer and my indemnification agreement with Employer dated September 30,
2008; my rights to enforce the terms of this Full and Final Release; or my
rights to assert claims that are based on events occurring after this Full and
Final Release becomes effective. 

B.          Nothing
in this Full and Final Release interferes with my right to file or maintain a
charge with the EEOC or other local civil rights enforcement agency, or
participate in any manner in an EEOC or other such agency investigation or
proceeding. I, however, understand that I am waiving my right to recover individual
relief including, but not limited to, back pay, front pay, reinstatement,
attorneys’ fees, and/or punitive damages, in any administrative or legal action
whether brought by the EEOC or other civil rights enforcement agency, me, or
any other party, arising from my voluntary resignation. 

C.          Nothing
in this Full and Final Release interferes with my right to challenge the
knowing and voluntary nature of this Full and Final Release under the ADEA
and/or OWBPA.

D.          I agree that the Employer
reserves any and all defenses which it has or might have against any claims
brought by me. This includes, but is not limited to, the Employer’s right to
seek available costs and attorneys’ fees as allowed by law, and to have any
monetary award granted to me, if any, reduced by the amount of money that I
received in consideration for this Full and Final Release. 

V.          Right
to Revoke Release. I understand that insofar as this Full and Final Release
relates to my rights under the Age Discrimination in Employment Act (“ADEA”),
it shall not become effective or enforceable until seven (7) days after I sign
it. I also have the right to revoke this Full and Final Release insofar as it
extends to potential claims under the ADEA by written notice to Employer within
seven (7) calendar days following my signing this Full and Final Release, and
within fifteen (15) calendar days as to waiver of claims under the Minnesota
Human Rights Act. Any such revocation must be in writing and hand-delivered to
Employer or, if sent by mail, it must be: 

A.          post-marked
within the applicable seven (7) or fifteen (15) day revocation period; 

B.          
properly addressed to: 

	
  

 	
  

 
	
  

 	
 Pamela Krop 

 
	
  

 	
 General
 Counsel 

 
	
  

 	
 St. Jude
 Medical Inc. 

 
	
  

 	
 One St. Jude
 Medical Drive 

 
	
  

 	
 St. Paul, MN
 55117-1799, and

 

C.          sent
by certified mail, return receipt requested. 

	
  

 	
  

 
	
  

 	
 I understand
 that the payment I am receiving for settling and releasing My Claims,
 described in paragraphs 2-7 of the attached January 5, 2010 letter (the
 “Separation Letter”), is contingent upon my agreement to be bound by the
 terms of this Full and Final Release. Accordingly, if I decide to revoke this
 Full and Final Release, I understand that I am not entitled to the
 consideration described in paragraphs 2-7 of the Separation Letter. 

 

VI.         Employee
Representation. I represent that, as of the date I sign this Full and Final
Release, I am not aware of any violations of federal or state law or regulation
or Employer policy, and that I am not aware of any facts which would constitute
a violation of any federal or state law or regulation or Employer policy. I
further represent and warrant that I have not violated any federal or state
law, statute, regulation, or ordinance. 

VII.        Controlling
Law. This Full and Final Release shall be governed by and interpreted in
accordance with the laws of the State of Minnesota. To the extent any clause or
provision of this Exhibit A shall be determined to be invalid and/or
unenforceable, such a clause or provision shall be deleted and the validity and
enforceability of the remainder of this Exhibit A shall be unaffected. 

VIII.       I Understand the Terms of this Release. I have had the opportunity to read
this Full and Final Release carefully and understand all its terms. I have had
the opportunity to review this Full and Final Release with my own attorney. In
agreeing to sign this Full and Final Release, I have not relied on any
statements or explanations made by Employer or their attorneys. I understand
and agree that this Full and Final Release, the Separation Letter and exhibits
thereto, including my Non-Disclosure and Non-Competition Agreement, and my
Indemnification Agreement, contain all the agreements between Employer and me.
We have no other written or oral agreements. 

	
  

 	
  

 	
  

 
	
  

 	
                JOSEPH
 H. McCULLOUGH

 
	
  

 	
  

 
	
 Dated: January 13, 2010

 	
 /s/ Joseph H. McCullough

 	
  

 
	
  

 	
                Signature

 	
  

 
	
  

 	
  

 

EXHIBIT B

FULL AND FINAL RELEASE 

I.          Definitions. I intend all words used in this Full and Final Release to have their plain
meanings in ordinary English. Technical legal words are not needed to describe
what I mean. Specific terms I use in this Full and Final Release have the
following meanings: 

A.         “I,”
“me,” “my” and “Employee” include both me, Joseph McCullough, and
anyone who has or obtains any legal rights or claims through me. 

B.         “Employer,”
as used in this Full and Final Release, shall at all times mean St. Jude
Medical, Inc., and its parent and any subsidiary corporations, successors, predecessors
and assigns, present or former officers, directors, shareholders, agents,
assigns, employees, and attorneys, whether in their individual or official
capacities. 

C.         “Claims”
mean any and all of the actual or potential claims of any kind whatsoever I may
have had, or currently may have against Employer, arising up to the date I sign
this Full and Final Release, regardless of whether I now know about those
claims, that are in any way related to my employment with Employer or the
termination of that employment. Such claims include, but are not limited to any
claims for: invasion of privacy; breach of written or oral, express or implied,
contract (including, without limitation, that certain Severance Agreement
between Employer and me dated December 31, 2008); fraud or misrepresentation;
violation of the Age Discrimination in Employment Act of 1967 (“ADEA”), 29
U.S.C. § 626, as amended, the Older Workers Benefit Protection Act of 1990
(“OWBPA”), 29 U.S.C. 626(f), Title VII of the Civil Rights Act of 1964 (“Title
VII”), 42 U.S.C. § 2000e, et seq., the Americans with
Disabilities Act (“ADA”), 29 U.S.C. § 2101, et seq., the Family
and Medical Leave Act (“FMLA”), 29 U.S.C. § 2601 et seq., the
Employee Retirement Income Security Act of 1978 (“ERISA”), as amended, 29
U.S.C. §§ 1001, et seq., Equal Pay Act (“EPA”), 29 U.S.C. §
206(d), the Worker Adjustment and Retraining Notification Act (“WARN”), 29
U.S.C. § 2101 et seq., the Minnesota Human Rights Act, Minn.
Stat. § 363A.01, et seq., Minnesota Statutes § 181 et seq.
or any other state human rights or fair employment practices act, and any other
federal, state, local or foreign statute, law, rule, regulation, ordinance or
order. Such claims also include, but are not limited to: claims under the
Management Incentive Compensation Plan; claims for violation of any civil
rights laws based on protected class status; claims for assault, battery,
defamation, intentional or negligent infliction of emotional distress, breach
of the covenant of good faith and fair dealing, promissory estoppel,
negligence, negligent hiring, retention or supervision, retaliation,
constructive discharge, violation of whistleblower protection laws, unjust
enrichment, violation of public policy, and all other claims for unlawful employment
practices, and all other common law or statutory claims. 

II.          Agreement
to Release My Claims. Except as stated in Section IV of this Full and Final
Release, I agree to release all my Claims. I may, but am not required to,
withdraw or dismiss, or attempt to withdraw or dismiss, any charges that I may
have pending against the Employer with the Equal Employment Opportunity
Commission (“EEOC”) or other civil rights enforcement agency. In exchange for
my agreement to release my Claims, I am receiving satisfactory consideration
from Employer to which I am not otherwise entitled by law or contract. The
consideration I am receiving is a full and fair payment for the release of all
my Claims. Employer does not owe me anything in addition to what I will be
receiving. 

III.        Older
Workers Benefit Protection Act. I understand and have been advised that the
above release of My Claims is subject to the terms of the Older Workers Benefit
Protection Act (“OWBPA”). The OWBPA provides that an individual cannot waive a
right or claim under the Age Discrimination in Employment Act (“ADEA”) unless
the waiver is knowing and voluntary. I have been advised of this law, and I
agree that I am signing this Full and Final Release voluntarily, and with full
knowledge of its consequences. I understand that the Employer is giving me
twenty-one (21) days from the date I received a copy of this Full and Final
Release to decide whether I want to sign it. I acknowledge that I have been
advised to use this time to consult with an attorney about the effect of this
Full and Final Release. If I sign this Full and Final Release before the end of
the twenty-one (21) day period it will be my personal, voluntary decision to do
so, and will be done with full knowledge of my legal rights. I agree that
material and/or immaterial changes to this Agreement or Full and Final Release
will not restart the running of this consideration period. 

IV.         Exclusions
from Release.

A.          The
term “Claims” does not include my rights, if any, to claim the following:
unemployment insurance benefits; workers compensation benefits; claims for my
vested post-termination benefits under any 401(k), SERP or similar retirement
benefit plan; my rights to group medical or group dental insurance coverage
pursuant to section 4980B of the Internal Revenue Code of 1986, as amended
(“COBRA”); my rights to indemnification, with respect to events occurring prior
to the date of this Full and Final Release, under Employer’s charter documents,
Minnesota corporate law, any Directors and Officers insurance maintained by the
Employer and my indemnification agreement with Employer dated September 30,
2008; my rights to enforce the terms of this Full and Final Release; or my
rights to assert claims that are based on events occurring after this Full and
Final Release becomes effective. 

B.          Nothing
in this Full and Final Release interferes with my right to file or maintain a
charge with the EEOC or other local civil rights enforcement agency, or
participate in any manner in an EEOC or other such agency investigation or
proceeding. I, however, understand that I am waiving my right to recover
individual relief including, but not limited to, back pay, front pay,
reinstatement, attorneys’ fees, and/or punitive damages, in any administrative
or legal action whether brought by the EEOC or other civil rights enforcement
agency, me, or any other party, arising from my voluntary resignation. 

C.          Nothing
in this Full and Final Release interferes with my right to challenge the
knowing and voluntary nature of this Full and Final Release under the ADEA
and/or OWBPA. 

D.          I
agree that the Employer reserves any and all defenses which it has or might
have against any claims brought by me. This includes, but is not limited to,
the Employer’s right to seek available costs and attorneys’ fees as allowed by
law, and to have any monetary award granted to me, if any, reduced by the
amount of money that I received in consideration for this Full and Final
Release. 

V.          Right
to Revoke Release. I understand that insofar as this Full and Final Release
relates to my rights under the Age Discrimination in Employment Act (“ADEA”),
it shall not become effective or enforceable until seven (7) days after I sign
it. I also have the right to revoke this Full and Final Release insofar as it
extends to potential claims under the ADEA by written notice to Employer within
seven (7) calendar days following my signing this Full and Final Release, and
within fifteen (15) calendar days as to waiver of claims under the Minnesota
Human Rights Act. Any such revocation must be in writing and hand-delivered to
Employer or, if sent by mail, it must be:

A.          post-marked within the applicable seven (7) or fifteen (15) day revocation period; 

B.          properly addressed to: 

	
  

 	
  

 
	
  

 	
 Pamela Krop 

 
	
  

 	
 General
 Counsel 

 
	
  

 	
 St. Jude
 Medical Inc. 

 
	
  

 	
 One St. Jude
 Medical Drive 

 
	
  

 	
 St. Paul, MN
 55117-1799, and

 

C.          sent
by certified mail, return receipt requested. 

	
  

 	
  

 
	
  

 	
 I understand
 that the payment I am receiving for settling and releasing My Claims,
 described in paragraphs 2-7 of the attached January 5, 2010 letter (the
 “Separation Letter”), is contingent upon my agreement to be bound by the
 terms of this Full and Final Release. Accordingly, if I decide to revoke this
 Full and Final Release, I understand that I am not entitled to the
 consideration described in paragraphs 2-7 of the Separation Letter. 

 

VI.         Employee
Representation. I represent that, as of the date I sign this Full and Final
Release, I am not aware of any violations of federal or state law or regulation
or Employer policy, and that I am not aware of any facts which would constitute
a violation of any federal or state law or regulation or Employer policy. I
further represent and warrant that I have not violated any federal or state
law, statute, regulation, or ordinance. 

VII.        Controlling
Law. This Full and Final Release shall be governed by and interpreted in
accordance with the laws of the State of Minnesota. To the extent any clause or
provision of this Exhibit B shall be determined to be invalid and/or
unenforceable, such a clause or provision shall be deleted and the validity and
enforceability of the remainder of this Exhibit B shall be unaffected. 

VIII.       I
Understand the Terms of this Release. I have had the opportunity to read
this Full and Final Release carefully and understand all its terms. I have had
the opportunity to review this Full and Final Release with my own attorney. In
agreeing to sign this Full and Final Release, I have not relied on any
statements or explanations made by Employer or their attorneys. I understand
and agree that this Full and Final Release, the Separation Letter and exhibits
thereto, including my Non-Disclosure and Non-Competition Agreement, and my
Indemnification Agreement, contain all the agreements between Employer and me.
We have no other written or oral agreements. 

	
  

 	
  

 	
  

 
	
  

 	
                JOSEPH
 H. McCULLOUGH

 
	
  

 	
  

 
	
 Dated: January 13, 2010

 	
 /s/ Joseph H. McCullough

 	
  

 
	
  

 	
                Signature

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