Document:

Exhibit 10.4

     

      
        

      

    

    Exhibit
      10.4

     

    

      REPAYMENT
        GUARANTY

      

      THIS
        REPAYMENT GUARANTY
        (as
        amended, modified, extended, and renewed from time to time, the “Guaranty”),
        dated
        as of March 14, 2007, is made by FRANKLIN
        COVEY PRINTING, INC.,
        a Utah
        corporation, FRANKLIN
        DEVELOPMENT CORPORATION,
        a Utah
        corporation, FRANKLIN
        COVEY TRAVEL, INC.,
        a Utah
        corporation, FRANKLIN
        COVEY CATALOG SALES, INC.,
        a Utah
        corporation, FRANKLIN
        COVEY CLIENT SALES, INC.,
        a Utah
        corporation, FRANKLIN
        COVEY PRODUCT SALES,
        a Utah
        corporation, FRANKLIN
        COVEY SERVICES, L.L.C.,
        a Utah
        limited liability company, and FRANKLIN
        COVEY MARKETING, LTD.,
        a Utah
        limited partnership (individually and collectively, as the context requires,
        and
        jointly and severally, “Guarantor”),
        in
        favor of JPMORGAN
        CHASE BANK, N.A.,
        a
        national banking association (“Lender”),
        in
        conjunction with the Loan made to FRANKLIN
        COVEY CO.,
        a Utah
        corporation (“Borrower”),
        by
        Lender pursuant to the Loan Agreement.

       

      1.  DEFINITIONS.
        Except
        as otherwise provided in this Guaranty, all terms defined in the Loan Agreement
        shall have the same meaning when used in this Guaranty. In addition, the
        following terms shall have the following meanings:

       

      (a)  “Change
        of Control”
(a)
        means the closing of a sale or other disposition of all or substantially
        all of
        Guarantor’s assets; (b) shall be deemed to have occurred at such time as a
“person” or “group” (within the meaning of Sections 13(d) and 14(d)(2) of the
        Securities Exchange Act of 1934, as amended), becomes the “beneficial owner” (as
        defined in Rule 13d3 under the Securities Exchange Act of 1934, as amended),
        directly or indirectly, of more than fifty percent (50%) of the total voting
        power of all classes of stock then outstanding of Guarantor entitled to vote
        in
        the election of directors; or (c) Guarantor’s merger into or consolidation with
        any other entity, or any other reorganization or transfer, directly or
        indirectly, of the ownership interests in Guarantor, in which the holders
        of the
        outstanding ownership interests in Guarantor immediately prior to such
        transaction receive or retain, in connection with such transaction on account
        of
        their ownership interests, ownership interests representing less than fifty
        percent (50%) of the voting power of the entity surviving such transaction;
        provided,
        however,
        that a
        Change of Control shall not include a merger effected exclusively for the
        purpose of changing the domicile of Guarantor or a merger of a Guarantor
        into
        Borrower or another Guarantor.

       

      (b)  “Guarantor
        Loan Documents”
means
        this Guaranty and any other guaranties, agreements, documents, or instruments
        now or hereafter executed by Guarantor evidencing, guarantying, securing
        or
        otherwise related to the Guarantor Obligations or the Loan, as this Guaranty
        and
        such other guaranties, agreements, documents, and instruments may be amended,
        modified, extended, renewed, or supplemented from time to time.

       

      (c)  “Guaranty”
means
        this Guaranty, as it may be amended, modified, extended, and renewed, from
        time
        to time.

       

      (d)  “Loan”
means
        a
        revolving line of credit in the maximum principal amount of EIGHTEEN MILLION
        AND
        NO/100 DOLLARS ($18,000,000.00) made to Borrower by Lender pursuant to the
        Loan
        Agreement.

       

      (e)  “Loan
        Agreement”
means
        that certain Revolving Line of Credit Agreement of approximate even date
        herewith between Borrower and Lender, as amended, modified, extended or renewed
        from time to time.

       

      (f)  “Loan
        Party”
means
        Borrower, Guarantor, and each other person that from time to time is obligated
        to Lender under any Loan Document or grants any of the Collateral.

       

      (g)  “Obligations”
means
        the following:

       

      (i)  Payment
        of principal, interest, costs, expenses, fees, and other amounts under the
        Note
        or other Loan Documents;

       

      (ii)  Payment
        of all other amounts payable from time to time by Borrower under the Loan
        Documents; and

       

      (iii)  The
        prompt and complete performance of the obligations of Borrower, as set forth
        in
        the Loan Agreement and other Loan Documents.

       

      (h)  Actions
        by Lender.
        Unless
        otherwise expressly provided in this Guaranty, all determinations, consents,
        approvals, disapprovals, calculations, requirements, requests, acts, actions,
        elections, selections, opinions, judgments, options, exercise of rights,
        remedies or indemnities, satisfaction of conditions or other decisions of
        or to
        be made by Lender under this Guaranty shall be made in the reasonable discretion
        of Lender. Any reference to Lender’s “sole and absolute discretion” or similar
        phrases has the meaning represented by the phrase “sole and absolute discretion,
        acting in good faith”.

       

      2.  GUARANTY.
        FOR
        GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH GUARANTOR
        ACKNOWLEDGES, GUARANTOR UNCONDITIONALLY AND IRREVOCABLY, AND JOINTLY AND
        SEVERALLY, GUARANTEES THE FULL PAYMENT AND PERFORMANCE WHEN DUE, BY ACCELERATION
        OR OTHERWISE, OF EACH AND ALL OBLIGATIONS. GUARANTOR AGREES THAT IMMEDIATELY
        UPON A FAILURE IN PAYMENT OR PERFORMANCE WHEN DUE OF ANY OR ALL OBLIGATIONS,
        GUARANTOR WILL PAY TO LENDER THE FULL AMOUNT OF, OR PERFORM IN FULL, SUCH
        OBLIGATIONS. ALL PAYMENTS UNDER THIS GUARANTY SHALL BE MADE TO LENDER IN
        LAWFUL
        MONEY OF THE UNITED STATES OF AMERICA AT THE ADDRESS OF LENDER DESIGNATED
        IN THE
        LOAN AGREEMENT OR SUCH OTHER LOCATION AS LENDER MAY DESIGNATE IN WRITING.
        ANY
        AMOUNT PAYABLE UNDER THIS GUARANTY NOT PAID WHEN DUE, AND ANY JUDGMENT FOR
        SUCH
        AN AMOUNT AND INTEREST THEREON, SHALL BEAR INTEREST AT THE DEFAULT INTEREST
        RATE
        FROM THE DUE DATE OR SUCH JUDGMENT DATE, RESPECTIVELY, UNTIL SUCH AMOUNT
        AND
        INTEREST THEREON ARE PAID IN FULL. GUARANTOR AGREES TO PAY SUCH INTEREST
        ON
        DEMAND. ALL OF GUARANTOR’S OBLIGATIONS HEREUNDER WILL BE PAID AND PERFORMED BY
        GUARANTOR WITHOUT COUNTERCLAIM, DEDUCTION, DEFENSE, DEFERMENT, REDUCTION,
        OR
        SET-OFF (all of the foregoing obligations of Guarantor and any and all other
        obligations, duties and responsibilities of Guarantor hereunder shall be
        referred to herein collectively as the “Guarantor
        Obligations”).

       

      3.  SECURITY.
        Payment
        and performance of the Guarantor Obligations by Guarantor shall be secured
        by a
        Security Agreement of even date herewith by and between Guarantor and Lender,
        creating a first priority security interest in all personal property assets
        of
each
        Guarantor.

       

      4.  GUARANTOR
        REPRESENTATIONS AND WARRANTIES.
        Guarantor represents and warrants to Lender as of the date of this
        Guaranty:

       

      (a)  Organization
        and Powers.
        Guarantor is either a corporation, a limited liability company, or a limited
        partnership duly organized and validly existing under the laws of the State
        of
        Utah. Guarantor has all requisite power and authority, rights and franchises
        to
        own and operate its properties, to carry on its business as now conducted
        and as
        proposed to be conducted, and to enter into and perform this Guaranty and
        the
        other Loan Documents to which it is a party. The address of Guarantor’s chief
        executive office and principal place of business is c/o Franklin Covey Co,
        2200
        West Parkway Blvd., Salt Lake City, Utah 84119.

       

      (b)  Good
        Standing.
        Guarantor has made all filings and is in good standing in the State of Utah,
        and
        in each other jurisdiction in which the character of the property it owns
        or the
        nature of the business it transacts makes such filings necessary and where
        failure to make such filings would result in a Material Adverse
        Change.

       

      (c)  Authorization.
        The
        execution, delivery and performance of the Guarantor Loan Documents by Guarantor
        are within Guarantor’s corporate, limited liability company or partnership
        powers and have been duly authorized by all necessary action by Guarantor
        and
        its directors, shareholders, members, managers and partners, as
        applicable.

       

      (d)  No
        Conflict.
        The
        execution, delivery and performance of the Guarantor Loan Documents by Guarantor
        will not violate (1) any provision of the Guarantor Operating Documents;
        (2) any
        legal requirement affecting Guarantor or any of Guarantor’s respective
        properties except where a violation of such requirement would not result
        in a
        Material Adverse Change; or (3) any agreement to which Guarantor is bound
        or to
        which Guarantor is a party, except where a violation of any such agreement
        would
        not result in a Material Adverse Change, and will not result in or require
        the
        creation (except as provided in or contemplated by this Guaranty and the
        Loan
        Agreement) of any Lien or Encumbrance upon any of such properties.

       

      (e)  No
        Approvals, etc.
        All
        governmental or regulatory orders, consents, permits, authorizations and
        approvals required for the present use and operation of the Guarantor’s business
        and the Collateral pledged by Guarantor have been obtained and are in full
        force
        and effect, except where failure to obtain such orders, consents, permits,
        authorizations or approvals would not result in a Material Adverse Change.
        To
        the knowledge of Guarantor, no additional governmental or regulatory actions,
        filings or registrations with respect to the Guarantor’s business and the
        Collateral pledged by Guarantor, and no approvals, authorizations or consents
        of
        any trustee or holder of any Indebtedness or obligation of Guarantor are
        required for the due execution, delivery and performance by Guarantor of
        their
        respective duties and obligations under the Guarantor Loan
        Documents.

       

      (f)  Binding
        Obligations.
        This
        Guaranty and the other Guarantor Loan Documents have been duly executed by
        Guarantor, and are the legally valid and binding obligations of Guarantor,
        enforceable against Guarantor in accordance with their terms, except as
        enforceability may be limited by bankruptcy, insolvency, reorganization,
        moratorium or similar Requirements of Laws affecting creditors’ rights generally
        and by general principles of equity.

       

      (g)  Solvency.
        After
        giving effect to this Guaranty, Guarantor is solvent. As used in the preceding
        sentence, “solvent”
means,
        with respect to any person, that at the time of determination:

       

      (i)  the
        fair
        value of its assets, both at fair valuation and at present fair saleable
        value,
        is in excess of the total amount of its liabilities, including, without
        limitation, contingent claims; and

       

      (ii)  it
        is
        then able and expects to be able to pay its debts as they mature;
        and

       

      (iii)  it
        has
        capital sufficient to carry on its business as conducted and as proposed
        to be
        conducted.

       

      Contingent
        liabilities (such as litigation, guaranties, including but not limited to
        this
        Guaranty, and pension plan liabilities) shall be computed at the amount which,
        in light of all the facts and circumstances existing at the time, represents
        the
        amount which can reasonably be expected to become an actual or matured
        liability.

       

      (h)  Inducement.
        Guarantor acknowledges and agrees that this Guaranty is being executed and
        delivered in connection with, and as an inducement for Lender to extend,
        various
        credit accommodations to Borrower that are beneficial to the ongoing business
        and operations of Borrower and Guarantor.

       

      5.  GUARANTOR
        COVENANTS.
        Until
        the Obligations are paid and performed in full, Guarantor agrees that, unless
        Lender otherwise agrees in writing in Lender’s absolute and sole
        discretion:

       

      (a)  Keeping
        Informed About Borrower and Transaction.
        Guarantor understands the Obligations and the Guarantor Obligations and has
        had
        access to information about the financial condition of Borrower and the ability
        of Borrower to perform the Obligations. Guarantor assumes responsibility
        for
        acquiring and maintaining all necessary information concerning the financial
        condition of the Borrower, and any and all endorsers and other guarantors
        of any
        instrument or document evidencing all or any part of the Obligations, and
        of all
        other circumstances bearing upon the risk of nonpayment of the Obligations
        or
        any part thereof that diligent inquiry would reveal, and Guarantor hereby
        agrees
        that Lender shall have no duty to advise Guarantor of information known to
        Lender regarding such condition or circumstances.

       

      (b)  Transfer
        of Assets.
        Unless
        such action would result in a Material Adverse Change (without taking into
        consideration subsections (iii) and (iv) of the definition of Material Adverse
        Change), Guarantor may sell, convey, transfer, assign or dispose of Guarantor’s
        properties or assets, or any right, title or interest, or any part thereof,
        or
        enter into any lease covering all or any portion thereof or an undivided
        interest therein, either voluntarily, involuntarily, or otherwise; provided,
        however,
        that
        Guarantor shall not sell, transfer, lease, or otherwise dispose of all or
        any
        substantial part of its properties or assets other than such a sale, transfer,
        lease or disposition to Borrower or another Guarantor.

       

      (c)  Change
        of Control.
        Without
        the prior written consent of Lender, which consent will not be unreasonably
        withheld or delayed, Guarantor shall not cause, permit, or suffer any Change
        of
        Control to occur.

       

      6.  SPECIAL
        PROVISIONS.

       

      (a)  Nature
        of Guaranty.
        This
        Guaranty is absolute, continuing, irrevocable, and unconditional. This Guaranty
        is a guaranty of payment and performance when due and not of collection.
        This
        Guaranty shall be effective and remain in full force and effect until all
        Obligations are paid and performed in full, regardless of (i) the genuineness,
        regularity, legality, validity, or enforceability of any or all of the liens
        and
        encumbrances securing the Obligations, the Loan Documents, or the Obligations,
        (ii) any law, regulation, or rule (federal, state, or local) or any action
        by
        any Governmental Authority discharging, reducing, varying the terms of payment,
        or otherwise modifying any of the Obligations or any of the liens and
        encumbrances securing the Obligations, or (iii) the death, dissolution, or
        liquidation of Borrower or any Guarantor.

       

      (b)  Enforcement
        Against Guarantor Without Other Action.
        Lender,
        in its sole and absolute discretion, may enforce this Guaranty against any
        Guarantor without first having sought enforcement of any Loan Documents against
        Borrower, any other Guarantor, or any collateral.

       

      (c)  Events
        Not Affecting Guarantor Obligations.
        The
        following shall not affect, impair, or delay the enforcement of this Guaranty,
        regardless of the impact upon any contribution, exoneration, indemnification,
        reimbursement, subrogation, and other rights of Guarantor:

       

      (i)  The
        bankruptcy, death, disability, dissolution, incompetence, insolvency,
        liquidation, or reorganization of Borrower.

       

      (ii)  Any
        defense of Borrower to payment or performance of any or all Obligations,
        or
        enforcement of any or all liens and encumbrances securing the Obligations
        on
        this Guaranty.

       

      (iii)  The
        disallowance, discharge, modification of the terms of, reduction in the amount
        of, or stay of enforcement of any or all Obligations, or any or all liens
        and
        encumbrances securing the Obligations, in any bankruptcy, insolvency,
        reorganization, or other legal proceeding or by any law, ordinance, regulation,
        or rule (federal, state, or local).

       

      (iv)  The
        cessation of liability of Borrower for any or all Obligations without full
        satisfaction of such Obligations.

       

      (d)  Acts
        and Omissions of Lender Not Affecting this Guaranty.
        The
        following acts and omissions of Lender, in each case in its sole and absolute
        discretion, shall not affect, delay, or impair this Guaranty, regardless
        of the
        impact upon any contribution, exoneration, indemnification, reimbursement,
        subrogation, or other rights of Guarantor:

       

      (i)  Lender
        may compromise, delay enforcement, fail to enforce, release, settle, or waive
        any or all Obligations of Borrower or any or all rights and remedies of Lender
        against Borrower.

       

      (ii)  Lender
        may make advances, issue letters of credit, or grant other financial
        accommodations for Borrower without requiring satisfaction of all conditions
        precedent in the Loan Documents.

       

      (iii)  Lender
        may obtain, substitute, and release collateral or additional collateral for
        the
        Obligations or this Guaranty.

       

      (iv)  Lender
        may fail to perfect, fail to protect the priority of, and fail to insure
        any or
        all liens and encumbrances in such collateral.

       

      (v)  Lender
        may fail to inspect, insure, maintain, preserve, or protect any or all such
        collateral.

       

      (vi)  Lender
        may enforce, compromise, delay enforcement, fail to enforce, settle, or waive
        any rights and remedies of Lender as to any or all such collateral.

       

      (vii)  Lender
        may assemble, sell, or otherwise dispose of any collateral in any manner
        and
        order Lender determines in its absolute and sole discretion, and disposition
        may
        be for no value, or for less than fair market value, of the collateral in
        the
        absolute and sole discretion of Lender. With respect to any collateral that
        is
        personal property, Lender shall give Guarantor ten (10) days’ prior written
        notice of any sale or other disposition, except for personal property collateral
        that is perishable, threatens to decline speedily in value, is of a type
        customarily sold on a recognized market, or is cash, cash equivalents,
        certificates of deposit or the like, and except as to Lender’s right of set-off.
        Guarantor’s sole right with respect to all collateral shall be to bid at a sale
        thereof in accordance with applicable law.

       

      (viii)  Lender
        may obtain additional obligors for any or all Obligations, and may substitute
        or
        release Borrower or any other obligor.

       

      (ix)  Lender
        may fail to file or pursue a claim in any bankruptcy, insolvency, probate,
        reorganization, or other proceeding as to any or all Obligations or any or
        all
        liens and encumbrances securing the Obligations.

       

      (x)  Lender
        may subordinate (A) any or all liens and encumbrances securing the Obligations
        or this Guaranty, or (B) any or all Obligations.

       

      (xi)  Lender
        may amend, modify, extend, renew, restate, supplement, or terminate in whole
        or
        in part any or all Loan Documents.

       

      (xii)  Lender
        may assign any or all of its rights and delegate its obligations under the
        Loan
        Documents, in whole or in part (including, without limitation, by
        participation).

       

      (xiii)  Lender
        may do any other act or make any other omission that might otherwise constitute
        an extinguishment or a legal or equitable discharge of, or defense by,
        Guarantor.

       

      7.  GUARANTOR
        WAIVERS.

       

      (a)  Note
        and Notice Waivers.
        Guarantor waives, to the full extent permitted by law, presentment, notice
        of
        dishonor, protest, notice of protest, notice of intent to accelerate, notice
        of
        acceleration, and all other notices or demands of any kind (including, without
        limitation, notice of the acceptance by Lender of this Guaranty, notice of
        the
        existence, creation, non-payment, or non-performance of any or all Obligations,
        and notice of the acts or omissions described in Sections
        6(c) and
        6(d), excepting
        only notices specifically provided for in this Guaranty).

       

      (b)  Waiver
        of Acts and Omissions of Lender.
        Guarantor waives any defense to enforcement of the Guarantor Obligations
        or any
        liens and encumbrances granted by Guarantor based on acts and omissions of
        Lender described in Sections
        6(c)
        and
6(d).

       

      (c)  Waiver
        of Statutory Provisions.
        Guarantor waives any and all rights and benefits under Utah
        Code Annotated§
        78-37-1, Utah
        Code Annotated§
        57-1-32 and
        any
        other similar or replacement statutes or rules now or hereafter in effect
        and
        any other statutes or rules now or hereafter in effect that purport to confer
        specific rights upon, or make specific defenses or procedures available to,
        guarantors, or limit the right of Lender to recover a deficiency judgment,
        or to
        otherwise proceed, against any person or entity obligated for payment of
        the
        Loan, after any trustee’s sale, any judicial foreclosure sale or any personal
        property sale of any collateral securing the Loan.

       

      (d)  Waiver
        of Statute of Limitations.
        To the
        full extent permitted by law, Guarantor waives any and all statutes of
        limitations as a defense to any or all Obligations.

       

      (e)  Waiver
        of Law and Equitable Principles Conflicting With This Guaranty.
        Guarantor waives any and all provisions of law and equitable principles that
        conflict with this Guaranty.

       

      (f)  Waiver
        of Any Obligation of Lender to Inform Guarantor.
        Guarantor waives any right to require Lender, and Lender shall have no
        obligation, to provide to Guarantor any information concerning performance
        of
        the Obligations, the ability of Borrower to perform the Obligations, or any
        other matter, regardless of what information Lender may have from time to
        time.

       

      (g)  Waiver
        of Contribution, Exoneration, Indemnification, Reimbursement, Subrogation,
        and
        Other Rights Against Borrower and Other Loan Parties.
        Until
        such time as the Obligations have been fully satisfied, Guarantor waives
        any and
        all present and future claims, remedies, and rights of Guarantor against
        Borrower or any other guarantor, any collateral, and any other property,
        interests in property, or rights to property of Borrower or any other guarantor
        (i) arising from any performance by Guarantor hereunder, (ii) arising from
        any
        application of any collateral or any other property, interests in property,
        or
        rights to property of Guarantor to payment or performance of the Obligations,
        or
        (iii) otherwise arising in respect of the Loan Documents, regardless of whether
        such claims, remedies, and rights arise under any present or future agreement,
        document, or instrument or are provided by any law, ordinance, regulation,
        or
        rule (federal, state, or local) (including, without limitation, (A) any and
        all
        rights of contribution, exoneration, indemnity, reimbursement, and subrogation,
        and (B) any and all rights to participate in the rights and remedies of Lender
        against Borrower, any other guarantor, and any collateral).

       

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

       

      (i)  WAIVER
        OF SPECIAL DAMAGES. TO
        THE
        EXTENT PERMITTED BY APPLICABLE LAW, GUARANTOR SHALL NOT ASSERT, AND HEREBY
        WAIVES, ANY CLAIM AGAINST LENDER, ON ANY THEORY OF LIABILITY, FOR SPECIAL,
        INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES (AS OPPOSED TO DIRECT OR ACTUAL
        DAMAGES) ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT OF, THIS GUARANTY
        OR
        ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY, THE TRANSACTIONS, THE LOAN
        OR
        THE USE OF THE PROCEEDS THEREOF.

       

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

       

      8.  SUBORDINATION.
        If from
        time to time Borrower shall have liabilities or obligations to Guarantor,
        such
        liabilities and obligations and any and all assignments as security, grants
        in
        trust, liens, mortgages, security interests, other encumbrances, and other
        interests and rights securing such liabilities and obligations shall at all
        times be fully subordinate with respect to (a) assignment as security, grant
        in
        trust, lien, mortgage, security interest, other encumbrance, and other interest
        and right (if any), (b) time and right of payment and performance, and (c)
        rights against any collateral therefor (if any), to payment and performance
        in
        full of the Obligations and the right of Lender to realize upon any or all
        Collateral. Guarantor agrees that such liabilities and obligations of Borrower
        to Guarantor shall not be secured by any assignment as security, grant in
        trust,
        lien, mortgage, security interest, other encumbrance or other interest or
        right
        in any property, interests in property, or rights to property of Borrower
        and
        that during the continuance of an Event of Default, Borrower shall not pay,
        and
        Guarantor shall not receive, payments of any or all liabilities or obligations
        of Borrower to Guarantor until after payment and performance of the Obligations
        in full, unless Lender consents thereto in writing. If, notwithstanding the
        foregoing, during the continuance of an Event of Default, Guarantor receives
        any
        payment from Borrower, such payment shall be held in trust by Guarantor for
        the
        benefit of Lender, shall be segregated from the other funds of Guarantor,
        and
        shall forthwith be paid by Guarantor to Lender and applied to payment of
        the
        Obligations, whether or not then due. To secure this Guaranty, Guarantor
        grants
        to Lender a lien and security interest in all liabilities and obligations
        of
        Borrower to Guarantor, in any assignments as security, grants in trust, liens,
        mortgages, security interests, other encumbrances, other interests or rights
        securing such liabilities and obligations, and in all of Guarantor’s right,
        title, and interest in and to any payments, property, interests in property,
        or
        rights to property acquired or received by Guarantor from Borrower in respect
        of
        any liabilities or obligations of Borrower to Guarantor.

       

      9.  LIMITATION
        ON OBLIGATIONS.
        The
        provisions of this Guaranty are severable, and in any action or proceeding
        involving any state corporate law, or any state, federal or foreign bankruptcy,
        insolvency, reorganization or other law affecting the rights of creditors
        generally, if the obligations of Guarantor under this Guaranty would otherwise
        be held or determined to be avoidable, invalid or unenforceable on account
        of
        the amount of Guarantor’s liability under this Guaranty, then, notwithstanding
        any other provision of this Guaranty to the contrary, the amount of such
        liability shall, without any further action by Guarantor or Lender, be
        automatically limited and reduced to the highest amount that is valid and
        enforceable as determined in such action or proceeding (such highest amount
        determined hereunder being Guarantor’s “Maximum
        Liability”).
        This
        Section
        9
        with
        respect to the Maximum Liability of Guarantor is intended solely to preserve
        the
        rights of Lender hereunder to the maximum extent not subject to avoidance
        under
        applicable law, and neither Guarantor nor any other person or entity shall
        have
        any right or claim under this Section
        9
        with
        respect to the Maximum Liability, except to the extent necessary so that
        the
        obligations of Guarantor hereunder shall not be rendered voidable under
        applicable law.

       

      10.  RIGHTS
        AND REMEDIES OF LENDER.
        The
        rights and remedies of Lender shall be cumulative and non-exclusive. Delay,
        discontinuance, or failure to exercise any right or remedy of Lender shall
        not
        be a waiver thereof, of any other right or remedy of Lender, or of the time
        of
        the essence provision. Exercise of any right or remedy of Lender shall not
        cure
        or waive any Event of Default or invalidate any act done in response to any
        Event of Default.

       

      11.  SURVIVAL.
        The
        representations, warranties, and covenants of Guarantor in this Guaranty
        shall
        survive the execution and delivery of this Guaranty.

       

      12.  INTEGRATION,
        ENTIRE AGREEMENT, CHANGE, DISCHARGE, TERMINATION, WAIVER, APPROVAL, CONSENT,
        ETC.
        This
        Guaranty contains the complete understanding and agreement of Guarantor and
        Lender and supersedes all prior representations, warranties, agreements,
        arrangements, understandings, and negotiations. No provision of this Guaranty
        may be changed, discharged, supplemented, terminated, or waived except in
        a
        writing signed by the parties thereto. Delay or failure by Lender to insist
        on
        performance of any obligation when due or compliance with any other term
        or
        condition in this Guaranty shall not operate as a waiver thereof or of any
        other
        obligation, term, or condition or of the time of the essence provision.
        Acceptance of late payments or performance shall not be a waiver of the time
        of
        the essence provision, the right of Lender to require that subsequent payments
        or performance be made when due, or the right of Lender to declare an Event
        of
        Default if subsequent payments or performance are not made when due. Any
        approval, consent, or statement that a matter is satisfactory by Lender under
        this Guaranty must be in writing executed by Lender and shall apply only
        to the
        person(s) and facts specifically set forth in the writing.

       

      13.  BINDING
        EFFECT.
        This
        Guaranty shall be binding upon Guarantor and shall inure to the benefit of
        Lender and their successors and assigns, and the executors, legal
        administrators, personal representatives, heirs, devisees, and beneficiaries
        of
        Guarantor, provided,
        however,
        that
        Guarantor may not delegate any of its obligations under this Guaranty and
        any
        purported delegation shall be void. Lender may from time to time in its absolute
        and sole discretion assign its rights and delegate its obligations under
        the
        Loan Documents, in whole or in part, without notice to or consent by Guarantor
        (including, without limitation, participation). In addition to any greater
        or
        lesser limitation provided by law, Guarantor shall not assert against any
        assignee of Lender any claims or defenses Guarantor may have against Lender,
        except claims and defenses, if any, arising under this Guaranty.

       

      14.  COSTS,
        EXPENSES, AND FEES.
        Guarantor shall promptly pay to Lender, upon demand, with interest thereon
        at
        the Default Interest Rate, reasonable attorneys’ fees and all costs and other
        expenses paid or incurred by Lender in enforcing or exercising its rights
        or
        remedies created by, connected with or provided for in this
        Guaranty.

       

      15.  SEVERABILITY.
        If any
        provision or any part of any provision of this Guaranty is unenforceable,
        the
        enforceability of the other provisions or the other provisions and the remainder
        of the subject provision, respectively, shall not be affected and they shall
        remain in full force and effect.

       

      16.  CHOICE
        OF LAW.
        THIS
        GUARANTY 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 GUARANTY AND THE OTHER GUARANTOR
        LOAN DOCUMENTS MAY BE TRIED AND LITIGATED IN THE STATE AND FEDERAL COURTS
        LOCATED IN THE COUNTY OF SALT LAKE, STATE OF UTAH OR, IN ANY OTHER COURT
        IN
        WHICH A PARTY SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS
        SUBJECT MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY. EACH OF GUARANTOR,
        AND BY ACCEPTANCE HEREOF, LENDER WAIVES, TO THE EXTENT PERMITTED UNDER
        APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON
        CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT
        IN ANY
        STATE OR FEDERAL COURT LOCATED IN THE COUNTY OF SALT LAKE, STATE OF
        UTAH.

       

      17.  TIME
        OF THE ESSENCE.
        Time is
        of the essence with regard to each provision of this Guaranty as to which
        time
        is a factor.

       

      18.  NOTICES
        AND DEMANDS.
        All
        notices, requests, demands and consents to be made hereunder to the parties
        hereto shall be in writing and shall be delivered by hand or sent by registered
        mail or certified mail, postage prepaid, return receipt requested (except
        for
        any notice address which is a post office box, in which case notice may be
        given
        by first class mail), through the United States Postal Service to the addresses
        shown below, or such other address which the parties may provide to one another
        in accordance herewith. Such notices, requests, demands and consents, if
        sent by
        mail, shall be deemed given two (2) Business Days after deposit in the United
        States mail, and if delivered by hand, shall be deemed given when
        delivered.

       

      To
        Lender:         JPMorgan
        Chase Bank, N.A.

      80
        West
        Broadway, Suite 200

      Salt
        Lake
        City, Utah 84101

      Attn:
        Paul Sommer

       

      with
        a
        copy to:    Snell
        & Wilmer L.L.P.

      Gateway
        Tower West

      15
        West
        South Temple, Suite 1200

      Salt
        Lake
        City, Utah 84101

      Attn:
        Brian D. Cunningham, Esq.

       

      To
        Guarantor:        c/o
        Franklin Covey Co.

      2200
        West
        Parkway Blvd.

      Salt
        Lake
        City, Utah 84110

      Attn:
        Richard Putnam

       

      with
        a
        copy to:    Dorsey
        & Whitney LLP

      170
        South
        Main Street, Suite 900

      Salt
        Lake
        City, Utah 84101

      Attn:
        Nolan S. Taylor, Esq.

      

      19.  JOINT
        AND SEVERAL OBLIGATIONS.
        This
        Guaranty may be executed by more than one person, and in such event the
        obligations hereunder shall be the joint and several obligations of each
        such
        person. Each reference to Guarantor shall be a reference to each person
        executing this Guaranty individually and to all such persons collectively.
        Each
        Guarantor’s liability is independent of the obligations of the other Guarantors.
        Lender may bring an action against any Guarantor to enforce this Guaranty,
        whether an action is brought against the other Guarantors.

       

      20.  PARTIAL
        PERFORMANCE.
        Guarantor’s performance of a portion, but not all, of the Obligations shall in
        no way limit, affect, modify or abridge Guarantor’s liability for the
        Obligations which are not performed. Without in any way limiting the generality
        of the foregoing, in the event that Lender is awarded a judgment in any suit
        brought to enforce Guarantor’s covenant to perform a portion of the Obligations,
        such judgment shall in no way be deemed to release Guarantor from its covenant
        to perform any portion of the Obligations which is not the subject of the
        suit.

       

      21.  INDEMNIFICATION
        OF LENDER. TO
        THE
        FULLEST EXTENT PERMITTED BY LAW, GUARANTOR AGREES TO PROTECT, INDEMNIFY,
        DEFEND
        AND SAVE HARMLESS LENDER, ITS DIRECTORS, OFFICERS, AGENTS, ATTORNEYS, AND
        EMPLOYEES FOR, FROM, AND AGAINST ANY AND ALL LIABILITY, EXPENSE, OR DAMAGE
        OF
        ANY KIND OR NATURE AND FOR, FROM, AND AGAINST ANY SUITS, CLAIMS, OR DEMANDS,
        INCLUDING REASONABLE ATTORNEY’S FEES AND EXPENSES ON ACCOUNT OF ANY MATTER OR
        THING OR ACTION, WHETHER IN SUIT OR NOT, ARISING OUT OF THIS GUARANTY, OR
        IN
        CONNECTION HEREWITH, EXCLUDING HOWEVER, ANY MATTERS ARISING OUT OF AN
        INDEMNIFIED PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OR ANY MATTERS
        ARISING AFTER LENDER HAS TAKEN TITLE TO OR POSSESSION OF THE COLLATERAL PLEDGED
        BY ANY GUARANTOR DOCUMENT. Upon receiving knowledge of any suit, claim, or
        demand asserted by a third party that Lender believes is covered by this
        indemnity, Lender shall give Guarantor notice of the matter and an opportunity
        to defend it, at Guarantor's sole cost and expense, with legal counsel
        satisfactory to Lender. Lender may also require Guarantor to so defend the
        matter. The obligations on the part of Guarantor under this Section
        21
        shall
        survive the payment and performance of the Obligations.

       

      22.  RESCISSION
        OR RETURN OF PAYMENTS.
        If at
        any time or from time to time, whether before or after payment and performance
        of the Obligations in full, all or any part of any amount received by Lender
        in
        payment of, or on account of, any Obligation is or must be, or is claimed
        to be,
        avoided, rescinded, or returned by Lender to Guarantor or any other person
        for
        any reason whatsoever (including, without limitation, bankruptcy, insolvency,
        or
        reorganization of Guarantor or any other person), such Obligation and any
        liens
        and encumbrances that secured such Obligation at the time such avoided,
        rescinded, or returned payment was received by Lender shall be deemed to
        have
        continued in existence or shall be reinstated, as the case may be, all as
        though
        such payment had not been received.

       

      23.  COUNTERPART
        EXECUTION.
        This
        Guaranty may be executed in one or more counterparts, each of which will
        be
        deemed an original and all of which together will constitute one and the
        same
        document. Signature pages may be detached from the counterparts and attached
        to
        a single copy of this Guaranty to physically form one document. Facsimile
        signature pages will be acceptable, provided originally signed signature
        pages
        are provided to each of the other parties by overnight courier.

       

      24.  RIGHT
        OF SET-OFF.
        In
        addition to any other rights and remedies of Lender, upon the occurrence
        of an
        Event of Default, including the failure of Guarantor to timely perform any
        obligation hereunder, Lender is authorized at any time and from time to time
        during the continuance of such default or Event of Default, without prior
        notice
        to Guarantor (any such notice being waived by Guarantor to the fullest extent
        permitted by law) to set-off and apply any and all deposits or deposit accounts
        (general or special, time or demand, provisional or final) at any time held
        by
        Lender to or for the credit or the account of Guarantor against any and all
        obligations of Guarantor under the Loan Documents, now or hereafter existing,
        irrespective of whether or not Lender shall have made demand under this Guaranty
        or any other Loan Document and although such amounts owed may be contingent
        or
        unmatured.

       

      [Remainder
        of Page Intentionally Left Blank]

       

       

      
        
          
          

        

        
          
          

          
          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF, Guarantor has caused this Guaranty to be executed as of
        the
        date first above written.

       

      
        	 	 	 
	 	FRANKLIN
                COVEY PRINTING, INC.
	 
 	 
 	a
                Utah
                corporation
 
	 	By:  	 /s/ RICHARD PUTNAM
	 	
                
Name:
                Richard Putnam
	 	Title:
                Treasurer

      

       

       

      
        
          	 	 	 
	 	FRANKLIN
                  DEVELOPMENT CORPORATION
	 
 	 
 	a
                  Utah
                  corporation
 
	 	By:  	 /s/ RICHARD PUTNAM
	 	
                  
Name:
                  Richard Putnam
	 	Title:
                  Vice President

        

         

        
           

          
            	 	 	 
	 	FRANKLIN
                    COVEY TRAVEL, INC.
	 
 	 
 	a
                    Utah
                    corporation
 
	 	By:  	 /s/ RICHARD PUTNAM
	 	
                    
Name:
                    Richard Putnam
	 	Title:
                    Treasurer

          

           

           

          
            
              
                	 	 	 
	 	FRANKLIN
                        COVEY CATALOG SALES, INC.
	 
 	 
 	a
                        Utah
                        corporation
 
	 	By:  	 /s/ RICHARD PUTNAM
	 	
                        
Name:
                        Richard Putnam
	 	Title:
                        Treasurer

              

               

               

              
                
                  	 	 	 
	 	FRANKLIN
                          COVEY CLIENT SALES, INC.
	 
 	 
 	a
                          Utah
                          corporation
 
	 	By:  	 /s/ RICHARD PUTNAM
	 	
                          
Name:
                          Richard Putnam
	 	Title:
                          Treasurer

                

                 

                
                   

                  
                    	 	 	 
	 	FRANKLIN
                            COVEY PRODUCT SALES, INC.
	 
 	 
 	a
                            Utah
                            corporation
 
	 	By:  	 /s/ RICHARD PUTNAM
	 	
                            
Name:
                            Richard Putnam
	 	Title:
                            Treasurer

                  

                   

                   

                  
                     

                    
                      	 	 	 
	 	FRANKLIN
                              COVEY SERVICES, L.L.C.
	 
 	 
 	a
                              Utah limited liability company
 
	
                               By:  

                            	FRANKLIN
                              COVEY CLIENT
                              SALES, INC. 
	 	 	
                              a Utah corporation, its member

                               

                            
	 	By:  	 /s/ RICHARD PUTNAM
	 	
                              
Name:
                              Richard Putnam
	 	Title:
                              Treasurer

                    

                     

                     

                    
                       

                      
                        	 	 	 
	
                                 By:  
                                  

                              	FRANKLIN
                                DEVELOPMENT CORPORATION
	 
 	 
 	a
                                Utah
                                corporation
 
	 	By:  	 /s/ RICHARD PUTNAM
	 	
                                
Name:
                                Richard Putnam
	 	Title:
                                Vice President

                      

                       

                       

                      
                         

                        
                          	 	 	 
	 	FRANKLIN
                                  COVEY MARKETING, LTD.
	 
 	 
 	a
                                  Utah limited partnership
 
	
                                   By:  

                                	FRANKLIN
                                  COVEY DEVELOPMENT
                                  CORPORATION 
	 	 	
                                  a Utah corporation, its general
                                    partner

                                   

                                
	 	By:  	 /s/ RICHARD PUTNAM
	 	
                                  
Name:
                                  Richard Putnam
	 	
                                  Title:
                                    Vice President

                                  "Guarantor"Exhibit 10.5

    
      

    

     

    Exhibit
      10.5

     

    

      PLEDGE
        AND SECURITY AGREEMENT

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

      16.  CHOICE
        OF LAW.
        THIS
        AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREUNDER SHALL BE GOVERNED BY
        AND
        CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF UTAH WITHOUT GIVING
        EFFECT
        TO CONFLICT OF LAWS PRINCIPLES. THE PARTIES AGREE THAT ALL ACTIONS OR
        PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN
        DOCUMENTS MAY BE TRIED AND LITIGATED IN THE STATE AND FEDERAL COURTS LOCATED
        IN
        THE COUNTY OF SALT LAKE, STATE OF UTAH OR, IN ANY OTHER COURT IN WHICH A
        PARTY
        SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER
        JURISDICTION OVER THE MATTER IN CONTROVERSY. EACH OF PLEDGOR AND COLLATERAL
        AGENT WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH
        MAY
        HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE
        TO THE
        EXTENT ANY PROCEEDING IS BROUGHT IN ANY STATE OR FEDERAL COURT LOCATED IN
        THE
        COUNTY OF SALT LAKE, STATE OF UTAH.

       

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

       

      18.  WAIVER
        OF SPECIAL DAMAGES. TO
        THE
        EXTENT PERMITTED BY APPLICABLE LAW, PLEDGOR SHALL NOT ASSERT, AND HEREBY
        WAIVES,
        ANY CLAIM AGAINST COLLATERAL AGENT ON ANY THEORY OF LIABILITY, FOR SPECIAL,
        INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES (AS OPPOSED TO DIRECT OR ACTUAL
        DAMAGES) ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT OF, THIS AGREEMENT
        OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY, THE TRANSACTIONS, THE
        LOAN
        OR THE USE OF THE PROCEEDS THEREOF.

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

      [Remainder
        of Page Intentionally Left Blank]

       

       

      
        
          
          

        

        
          
          

          
          

        

        
          
          

        

      

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

       

       

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

                "Pledgor"

              

      

       

       

      
         

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

                  "Collateral
                    Agent"

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