Document:

ex10ia.htm

    
      

      

    

     

    Exhibit
10(i)(a)

    

    NEITHER
THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON CONVERSION OF THESE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.

    

    Date of
Issuance:  August 20,
2009                                                                                                                          $50,000.00

    

    

    10%
CONVERTIBLE DEBENTURE

    DUE
AUGUST 20, 2012

    

             THIS
DEBENTURE is authorized and issued 10% Convertible Debentures of Juniper Group,
Inc. (the "Company"), designated as its 10% Convertible Debenture, due August
20, 2012 (the Debenture").

    

             FOR
VALUE RECEIVED, the Company promises to pay to Redwood Management LLC or its
registered assigns (the "Holder"), the principal sum of fifty thousand Dollars
($50,000) on August 20, 2012 or such earlier date as the Debentures are required
or permitted to be repaid as provided hereunder (the "Maturity Date"), and to
pay interest to the Holder on the aggregate unconverted and then outstanding
principal amount of this Debenture at the rate of 10% per annum,
payable  on the Maturity Date, unless the Debenture is converted to
shares of common stock in accordance with the terms and conditions
herein.

    

    THE
COMPANY MAY PREPAY ANY PORTION OF THE PRINCIPAL AMOUNT AT 125% OF SUCH AMOUNT
ALONG WITH ANY ACCRUED INTEREST OF THIS DEBENTURE AT ANY TIME UPON SEVEN DAYS
WRITTEN NOTICE TO THE HOLDER

    

    IN THE
EVENT ALL OR PART OF THE DEBENTURE REAMINS OUTSTANDING AS OF THE MATURITY DATE,
THE DEBENTURE AND ALL ACCRUED INTEREST SHALL AUTOMNATICLLY BE CONVERTED TO
COMPANY COMMON STOCK IN ACCORDANCE WITH THE
PROVISIONS  HEREIN.

    

    This
Debenture is subject to the following additional provisions:

    

     Section
1. This Debenture is exchangeable for an equal aggregate principal amount of
Debentures of different authorized denominations, as requested by the Holder
surrendering the same. No service charge will be made for such registration of
transfer or exchange.

            Section
2. This Debenture may be transferred or exchanged only in compliance with
applicable federal and state securities laws and regulations. Prior to due
presentment to the Company for transfer of this Debenture, the Company and any
agent of the Company may treat the Person in whose name this Debenture is duly
registered on the Debenture Register as the owner hereof for the purpose of
receiving payment as herein provided and for all other purposes, whether or not
this Debenture is overdue, and neither the Company nor any such agent shall be
affected by notice to the contrary.

    

             Section
3. Events of Default.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

                      (a)
"Event of Default", wherever used herein, means any one of the following events
(whatever the reason and whether it shall be voluntary or involuntary or
effected by operation of law or pursuant to any judgment, decree or order of any
court, or any order, rule or regulation of any administrative or governmental
body):

    

                               (i)
any default in the payment of the principal of, interest (including Late Fees)
on, or liquidated damages in respect to this Debenture, free of any claim
of                   subordination,
as and when the same shall become due and payable (whether on a Conversion Date
or the Maturity Date or by acceleration or otherwise) which default is not
cured, if possible to cure, within 5 business days of notice of such default
sent by the Holder;

    

                               (ii)
the Company or any of its subsidiaries shall commence, or there shall be
commenced against the Company or any such subsidiary a case under any applicable
bankruptcy or insolvency laws as now or hereafter in effect or any
successor                   thereto,
or the Company commences any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction whether now or hereafter in
effect relating to the Company or any subsidiary thereof or there is commenced
against the Company or any subsidiary thereof any such bankruptcy, insolvency or
other proceeding which
remains                   undismissed
for a period of 60 days; or the Company or any subsidiary thereof is adjudicated
insolvent or bankrupt; or any order of relief or other order approving any such
case or proceeding is entered; or the Company or any subsidiary thereof suffers
any appointment of any custodian or the like for it or any substantial part of
its property which continues undischarged or unstayed for a period of 60 days;
or
the                 Company
or any subsidiary thereof makes a general assignment for the benefit of
creditors; or the Company shall fail to pay, or shall state that it is unable to
pay, or shall be unable to pay, its debts generally as they become due; or the
Company or any subsidiary thereof shall call a meeting of its creditors with a
view to arranging a composition, adjustment or restructuring of its debts; or
the Company or
any                   subsidiary
thereof shall by any act or failure to act expressly indicate its consent to,
approval of or acquiescence in any of the foregoing; or any corporate or other
action
is                   taken
by the Company or any subsidiary thereof for the purpose of effecting any of the
foregoing; or the Company shall fail to timely file all reports required to be
filed by it with the SEC pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise required by
the Exchange Act.

    

                     (b)
If any Event of Default occurs and is continuing, the full principal amount of
this Debenture, together with interest and other amounts owing in respect
thereof, to the date of acceleration shall become at the Holder's election,
immediately due and payable in cash. The Holder need not provide and the Company
hereby waives any presentment, demand, protest or other notice of any kind, and
the Holder may immediately and without expiration of any grace period enforce
any and all of its rights and remedies hereunder and all other remedies
available to it under applicable law. Such declaration may be rescinded and
annulled by Holder at any time prior to payment hereunder and the Holder shall
have all rights as a Debenture holder until such time, if any, as the full
payment under this Section shall have been received by it. No such rescission or
annulment shall affect any subsequent Event of Default or impair any right
consequent thereon.

    

             Section
4. Conversion.

    

                      (a)       (i)
Holder's Conversion Right. At any time after the Original Issue Date until this
Debenture is no longer outstanding, this Debenture, including interest and
principal, shall be convertible into shares of Common Stock at a price of
percent (40%) of the lowest closing bid price, determined on the then current
trading market for the Company’s common stock, for 10 trading days prior to
conversion. (the “Set Price”) at the option of the Holder, in whole at any time
and from time to time after six (6) months from the date of
issuance.  The Holder shall effect conversions by delivering to the
Company the form of Notice of Conversion attached hereto as Annex A (a "Notice
of Conversion"), specifying the date on which such conversion is to be effected
(a "Conversion Date"). If no Conversion Date is specified in a Notice of
Conversion, the Conversion Date shall be the date that such Notice of Conversion
is provided hereunder. To effect conversions hereunder, the Holder shall not be
required to physically surrender Debentures to

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    the
Company. The Company shall deliver any objection to any Notice of Conversion
within 5 Business Days of receipt of such notice. In the event of any dispute or
discrepancy, the records of the Holder shall be controlling and determinative in
the absence of manifest error. The Holder and any assignee, by acceptance of
this Debenture, acknowledge and agree that, by reason of the provisions of this
paragraph, following conversion of a portion of this Debenture, the unpaid and
unconverted principal amount of this Debenture may be less than the amount
stated on the face hereof.

    

                               (ii)
If the Company, at any time while this Debenture is outstanding: (A) shall pay a
stock dividend or otherwise make a distribution or distributions on shares of
its Common Stock or any other equity or equity equivalent
securities  payable in shares of Common Stock (which, for avoidance of
doubt, shall not include any shares of Common Stock issued by the Company
pursuant to this Debenture, including as interest  thereon), (B)
subdivide outstanding shares of Common Stock into a larger number of shares, (C)
combine (including by way of reverse stock split) outstanding shares of Common
Stock into a smaller number of shares, or (D) issue
by                   reclassification
of shares of the Common Stock any shares of capital stock of the Company, then
the Set Price shall be multiplied by a fraction of which the numerator shall be
the number of shares of Common Stock (excluding treasury shares, if any)
outstanding before such event and of which the denominator shall be the number
of shares of Common Stock outstanding after such event. Any adjustment made
pursuant to this Section shall become effective immediately after the record
date for the determination of stockholders entitled to receive such dividend or
distribution and shall become effective immediately after the effective date in
the case of a subdivision, combination or re-classification.

    

                               (iii)  Whenever
the Set Price is adjusted pursuant to any of Section 4, the Company shall
promptly mail to each Holder a notice setting forth the Set Price after such
adjustment and setting forth a brief statement of the facts requiring such
adjustment.

    

                               (iv)
If (A) the Company shall declare a dividend (or any other distribution) on the
Common Stock; (B) the Company shall declare a special nonrecurring cash dividend
on or a redemption of the Common Stock; (C) the Company
shall  authorize the granting to all holders of the Common Stock
rights or warrants to subscribe for or purchase any shares of capital stock of
any class or of any rights; (D) the approval  of any stockholders of
the Company shall be required in connection with any reclassification of the
Common Stock, any consolidation or merger to which the Company is a party,
any  sale or transfer of all or substantially all of the assets
of                   the
Company, of any compulsory share exchange whereby the Common Stock is converted
into other securities, cash or property; (E) the Company shall authorize the
voluntary or involuntary dissolution, liquidation or winding up of the affairs
of the Company; then, in each case, the Company shall cause to be filed at each
office or agency maintained for the purpose of conversion of the Debentures, and
shall cause to be mailed to the Holders at their last addresses as they
shall  appear upon the stock books of the Company, at least 20
calendar days prior to the applicable record or effective date hereinafter
specified, a notice stating (x) the date on which a record is to be taken for
the purpose of such dividend, distribution, redemption, rights or warrants, or
if a record is not to be taken, the date as of which the holders of the Common
Stock of record to be entitled to such dividend, distributions, redemption,
rights or warrants are to be determined or (y) the date on which such
reclassification, consolidation, merger, sale, transfer or share exchange is
expected to become effective or close, and the date as
of                   which
it is expected that holders of the Common Stock of record shall be entitled to
exchange their shares of the Common Stock for securities, cash or other
property                   deliverable
upon such reclassification, consolidation, merger, sale, transfer or share
exchange; provided, that the failure to mail such notice or any defect therein
or in the mailing thereof shall not affect the validity of the corporate action
required to be specified in such notice. Holders are entitled to convert
Debentures during the 20-day period commencing the date of such notice to the
effective date of the event triggering such notice.

    

                               (v)
If, at any time while this Debenture is outstanding, (A) the Company effects any
merger or consolidation of the Company with or into another Person, (B) the
Company effects any sale of all or substantially all of its assets in one or a
series of related transactions, (C) any tender offer or exchange offer (whether
by the Company or another Person) is completed pursuant to which holders
of

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Common
Stock are permitted to tender or exchange their shares for other securities,
cash or property, or (D) the Company effects any reclassification of the Common
Stock or any compulsory share exchange pursuant to which the Common Stock is
effectively converted into or exchanged for other securities, cash or property
(in any such case, a "Fundamental Transaction"), then upon any subsequent
conversion of this Debenture, the Holder shall have the right to receive, for
each Underlying Share that would have been issuable upon such conversion absent
such Fundamental Transaction, the same kind and amount of securities, cash or
property as it would have been entitled to receive upon the occurrence of such
Fundamental Transaction if it had been, immediately prior to  such
Fundamental Transaction, the holder of one share of  Common Stock (the
"Alternate Consideration"). For purposes of any such conversion, the
determination of the Set Price shall be appropriately adjusted to apply to such
Alternate Consideration based on the amount of Alternate Consideration issuable
in respect of one share of Common Stock in such Fundamental Transaction, and the
Company shall apportion the Set Price among the Alternate Consideration in a
reasonable manner reflecting the relative value of any different components of
the Alternate Consideration. If holders of Common Stock are given any choice as
to the securities, cash or property to be received in a Fundamental Transaction,
then the Holder shall be given the same choice as to the Alternate consideration
it receives upon any conversion of this Debenture following such Fundamental
Transaction. To the extent necessary to effectuate the foregoing provisions, any
successor to the Company or surviving entity in such Fundamental Transaction
shall issue to the Holder a new debenture consistent with the foregoing
provisions and     evidencing the Holder's right to
convert such debenture into Alternate Consideration. The terms of any agreement
pursuant to which a Fundamental Transaction is effected shall include terms
requiring any such successor or surviving entity to comply with the provisions
of this paragraph (c) and insuring that this Debenture (or any such replacement
security) will be similarly adjusted upon any subsequent transaction analogous
to a Fundamental Transaction. If any Fundamental Transaction constitutes or
results in a Change of Control Transaction, then at the request of the Holder
delivered before the 90th day after such Fundamental Transaction, the Company
(or any such successor or surviving entity) will purchase the Debenture from the
Holder for a purchase price, payable in cash within five Trading Days after such
request (or, if  later, on the effective date of the Fundamental
Transaction), equal to the 100% of the remaining unconverted principal amount of
this Debenture on the date of such request, plus all accrued and unpaid interest
thereon, plus all other accrued and unpaid amounts due hereunder.

    

                      (d)
The Company covenants that it will at all times reserve and keep available out
of its authorized and unissued shares of Common Stock solely for the purpose of
issuance upon conversion of the Debenture

    

                      (e)
Any and all notices or other communications or deliveries to be provided by the
Holders hereunder, including, without limitation, any Notice of Conversion,
shall be in writing and delivered personally, by facsimile, sent by a nationally
recognized overnight courier service, addressed to the Company, at the address
set forth or such other  address or facsimile number as the Company
may specify for such purposes by notice to the Holders delivered in accordance
with this Section. Any and all notices or other communications or deliveries to
be provided by the Company hereunder shall be in writing and delivered
personally, by facsimile, sent by a nationally recognized overnight courier
service addressed to each Holder at the facsimile
telephone   number or address of such Holder appearing on the
books of the Company, or if no such facsimile telephone number or address
appears, at the principal place of business of the Holder. Any notice or
other    communication or deliveries hereunder shall be
deemed given and effective on the earliest of (i) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified in this Section prior to 5:30 p.m. (New
York   City time), (ii) the date after the date of transmission,
if such notice or communication is delivered via facsimile at the
facsimile  telephone number specified in this Section later than 5:30
p.m. (New York City time) on any date and earlier than 11:59 p.m. (New York
City  time) on such date, (iii) the second Business Day following the
date of  mailing, if sent by nationally recognized overnight courier
service, or  (iv) upon actual receipt by the party to whom such notice
is required to be given.

    

             Section
5. Definitions. For the purposes hereof, in addition to the terms defined
elsewhere in this Debenture: (a) capitalized terms not otherwise defined herein
have the meanings given to such terms in the Purchase Agreement, and (b) the
following terms shall have the following meanings:

    

                      "Business
Day" means any day except Saturday, Sunday and any day which shall be a federal
legal holiday in the United States or a day on which banking institutions in the
State of New York are authorized or required by law or other government action
to close.

    

                      "Common
Stock" means the common stock, $.0001 par value per share, of the Company and
stock of any other class into which such shares may hereafter have been
reclassified or changed.

    

                      "Person"
means a corporation, an association, a partnership, organization, a business, an
individual, a government or political subdivision thereof or a governmental
agency.

    

                        "Securities
Act" means the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.

    

                      "Set
Price" shall have the meaning set forth in Section 4.

    

             Section
6. Except as expressly provided herein, no provision of this Debenture shall
alter or impair the obligation of the Company, which is absolute and
unconditional, to pay the principal of, interest and liquidated damages (if any)
on, this Debenture at the time, place, and rate, and in the coin or currency,
herein prescribed. This Debenture is a direct debt obligation of the Company.
This Debenture ranks pari passu with all other Debentures now or hereafter
issued under the terms set forth herein. As long as this Debenture is
outstanding, the Company shall not and shall cause it subsidiaries not to,
without the consent of the Holder, (a) amend its certificate of incorporation,
bylaws or other charter documents so as to adversely affect any rights of the
Holder; (b) repay, repurchase or offer to repay, repurchase or otherwise acquire
more than a de minimis number of shares of its Common Stock or other equity
securities other than as to the Underlying Shares to the extent permitted or
required under the Transaction Documents or as otherwise permitted by the
Transaction Documents; or (c) enter into any agreement with respect to any of
the foregoing.

    

             Section
7. If this Debenture shall be mutilated, lost, stolen or destroyed, the Company
shall execute and deliver, in exchange and substitution for and upon
cancellation of a mutilated Debenture, or in lieu of or in substitution for a
lost, stolen or destroyed Debenture, a new Debenture for the principal amount of
this Debenture so mutilated, lost, stolen or destroyed but only upon receipt of
evidence of such loss, theft or destruction of such Debenture, and of the
ownership hereof, and indemnity, if requested, all reasonably satisfactory to
the Company.

    

     
 

       Section
8. So long as any portion of this Debenture is outstanding, the Company will not
and will not permit any of its subsidiaries to, directly or indirectly, enter
into, create, incur, assume or suffer to exist any indebtedness of any kind, on
or with respect to any of its property or assets now owned or hereafter acquired
or any interest therein or any income or profits there from that is senior in
any respect to the Company's obligations under the Debentures without the prior
consent of the Holder, which consent shall not be unreasonably
withheld.

    

             Section
9. All questions concerning the construction, validity, enforcement and
interpretation of this Debenture shall be governed by and construed and enforced
in accordance with the internal laws of the State of New York, without regard to
the principles of conflicts of law thereof. Each party agrees that all legal
proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by any of the Transaction Documents (whether brought
against a party hereto or its respective affiliates, directors, officers,
shareholders, employees or agents) shall be commenced in the state and federal
courts sitting in the City of New York, Borough of Manhattan (the "New York
Courts"). Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the New York Courts for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein (including with respect to the enforcement of any of the
Transaction Documents), and hereby irrevocably waives, and agrees not to assert
in any suit, action or proceeding, any claim that it is not personally subject
to the jurisdiction of any such court, or such New York Courts are improper or
inconvenient venue for such proceeding. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Debenture and agrees that such
Service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. Each party hereto hereby
irrevocably waives, to the fullest extent permitted by applicable law, any and
all right to trial by jury in any legal proceeding arising out of or relating to
this Debenture or the transactions contemplated hereby. If either party shall
commence an action or proceeding to enforce any provisions of this Debenture,
then the prevailing party in such action or proceeding shall be reimbursed by
the other party for its attorneys fees and other costs and expenses incurred
with the investigation, preparation and prosecution of such action or
proceeding.

    

             Section
10. Any waiver by the Company or the Holder of a breach of any provision of this
Debenture shall not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this
Debenture. The failure of the Company or the Holder to insist upon strict
adherence to any term of this Debenture on one or more occasions shall not be
considered a waiver or deprive that party of the right thereafter to insist upon
strict adherence to that term or any other term of this Debenture. Any waiver
must be in writing.

    

             Section
11.   For six months from the date of this Debenture, the Holders
shall be entitled to “piggyback” registration rights on registrations initiated
by the Company on forms which permit the general sale of securities to the
public, subject to customary cut-backs if deemed necessary or advisable by the
underwriters for any such registration; except for any draw down or “Pipe”
transactions.

    

             Section
12. If any provision of this Debenture is invalid, illegal or unenforceable, the
balance of this Debenture shall remain in effect, and if any provision is
inapplicable to any person or circumstance, it shall nevertheless remain
applicable to all other persons and circumstances. If it shall be found that any
interest or other amount deemed interest due hereunder violates applicable laws
governing usury, the applicable rate of interest due hereunder shall
automatically be lowered to equal the maximum permitted rate of interest. The
Company covenants (to the extent that it may lawfully do so) that it shall not
at any time insist upon, plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay, extension or usury law or other law which
would prohibit or forgive the Company from paying all or any portion of the
principal of or interest on the Debentures as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this indenture, and the Company (to the extent
it may lawfully do so) hereby expressly waives all benefits or advantage of any
such law, and covenants that it will not, by resort to any such law, hinder,
delay or impeded the execution of any power herein granted to the Holder, but
will suffer and permit the execution of every such as though no such law has
been enacted.

    

             Section
13. Whenever any payment or other obligation hereunder shall be due on a day
other than a Business Day, such payment shall be made on the next succeeding
Business Day.

    

    *********************

             IN
WITNESS WHEREOF, the Company has caused this Convertible Debenture

    to be
duly executed by a duly authorized officer as of the date first above
indicated.

    

                                                                      JUNIPER
GROUP, INC.

    

    

                                                             By:
/s/_______________________________

                                           Name:  Vlado
Hreljanovic

                                                              Title:  President
and CEOexhibit10_1.htm

     

     

    
      

      

    

     

    Exhibit
10.1

     

    

     

    THIRD
MODIFICATION AGREEMENT

     

    This
THIRD MODIFICATION
AGREEMENT (the “Modification Agreement”) is
made effective as of November 11, 2009, 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”).  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
Agreement, Note, Guaranty, 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.”

     

    D. Subject
to the terms and conditions contained herein, Borrower and Lender now desire to
modify the Loan Documents to: (i) increase the interest rate applicable under
the Loan Documents from the LIBO Rate in effect from time to time plus 2.00% per
annum to the LIBO Rate in effect from time to time plus 3.50% per annum; (ii)
modify the funded debt to EBITDAR ratio and the fixed charge coverage ratio as
set forth herein; (iii) modify certain provisions regarding the expiration date
of Letters of Credit issued under the Loan Agreement; (iv) require the delivery
of monthly financial statements as set forth herein; and (v) make such other
modifications as are set forth herein.

     

    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) Interest Rate
Increase.  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:

     

    “Interest Rate” means a
variable rate equal to the LIBO Rate in effect from time to time plus Three and
One-Half Percent (3.50%) per annum.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

     

    (b) Financial
Covenants.

     

    (1)           Funded Debt to EBITDAR
Ratio.  Section 6.8(a) of the Loan Agreement is hereby amended
to provide that the funded debt to EBITDAR ratio described therein shall not be
greater than (A) 4.00 to 1.00 as of the end of the fiscal quarter of Borrower
ending on November 30, 2009, and (B) 3.75 to 1.00 as of the end of the fiscal
quarter of Borrower ending on February 28, 2010.

     

    (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 (A) 1.25 to 1.00 as of the end of the fiscal quarter of Borrower
ending on November 30, 2009 and (B) 1.50 to 1.00 as of the end of the
fiscal quarter of Borrower ending on February 28, 2010.

     

    (c) Letters of
Credit.  The second sentence of Section 3.1(a) of the Loan
Agreement is hereby amended and restated as follows:

     

    Unless
otherwise approved by Lender, Letters of Credit (i) will expire on the earlier
of the date stated therein or thirty (30) days prior to the Maturity Date; and
(ii) will not exceed, in the aggregate stated amount outstanding at any time,
the lesser of (A) Letter of Credit Limit or (B) the difference between the Loan
Amount and the then outstanding principal balance of the Loan.

     

    (d) Monthly Financial
Statements.  Section 6.7 of the Loan Agreement is hereby
amended by adding the following as a new subsection (e):

     

    (e)           Monthly Financial
Statements.  Within thirty (30) days of the end of each
calendar month, the complete consolidated financial statements of the
Consolidated Entities which shall consist of a balance sheet, statements of
income, cash flow and retained earnings, and a schedule of contingent
liabilities as of the end of each such monthly period, such financial statements
to be certified as true and correct by the president or chief financial officer
of Borrower.

     

    (e) 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.

     

    (f) 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.

     

    3. 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.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

     

    4. 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.

     

    5. 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.

     

    6. 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 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.

     

    7. 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 4 hereof.

     

    8. 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.

     

    9. 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.

     

    10. 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.

     

    11. 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]

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    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”

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