Document:

Exhibit 10.8

    
      

    

     

    Exhibit
      10.8

     

    
      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 ZIONS FIRST
        NATIONAL BANK, 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 SEVEN MILLION AND NO/100 DOLLARS ($7,000,000.00) 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§ 57-1-32and 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:           
        Zions First National Bank

                 10
        East South Temple, Suite 200

      Salt
        Lake
        City, Utah 84133

      Attn: 
        Donald Rands

      with
        a
        copy
        to:                 Callister Nebeker &
McCullough

      10
        East
        South Temple, Suite 200

      Salt
        Lake
        City, Utah 84133

      Attn:
        Bradley E. Morris, 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, its member
 
	 	By:  	 /s/ RICHARD
                                      PUTNAM
	 	
                                      
Name:
                                      Richard Putnam
	 	
                                      Title:
                                        Vice President

                                    

                            

                             

                          

                        

                      

                    

                  

                

                
                  
                     

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

                              	FRANKLIN DEVELOPMENT
                                CORPORATION 
	 	 	
                                a
                                  Utah corporation, its general partner

                                 

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

                                "Guarantor"Exhibit 10.9

    
      

    

     

    Exhibit
      10.9

     

     

    
      	 	
	 	
               

              South
                Central Ontario Region

              381
                King St. W. & Francis St., 2nd Fl.

              Kitchener,
                Ontario

              N2G
                1B8

               

              Telephone
                No.: (519) 570-7322

              Fax
                No.: (519) 579-2610

            

    

     

    February
      19, 2007

     

    Franklin
      Covey Canada, Ltd.

    60
      Struck
      Crt

    Cambridge,
      ON  N1R 8L2

     

     

    Attn:
      Mr.
      Mark Pallin,

     

    Dear
      Sir,

     

    We
      are
      pleased to offer the Borrower the following credit facilities (the
      "Facilities"), subject to the following terms and conditions.

     

    
      	
              BORROWER 

               

            	
              (the
                "Borrower")

               

            
	
              LENDER

               

            	
              The
                Toronto-Dominion Bank
                (the "Bank"), through its South Central Ontario Region branch, in
                Kitchener, Ontario.

               

            
	
              CREDIT
                LIMIT

               

               

            	
              1) CDN
                $500,000

              
                2)
                  CDN $895,253 as reduced pursuant to the section headed "Repayment
                  and
                  Reduction of Amount of Credit Facility".

                 

              

            
	TYPE
              OF CREDIT AND
              BORROWING OPTIONS 	
              1)
                Operating
                Loan
                available at the Borrower's option by way of:

                       
                Prime Rate Based Loans in CDN$ ("Prime Based Loans")

               

              
                2)
                  Committed
                  Reducing Term Facility (Single
                  Draw)available
                  at the Borrower's option by way of:

                         
                  Fixed Rate Term Loan in CDN$

                         
                  Floating Rate Term Loan available by way of:

                                   
                  Prime Rate Based Loans in CDN$ ("Prime Based
                  Loans")

              

            
	
               

            	 
	
              PURPOSE 

            	
              1)
                Working Capital

              
                2)
                  Real Estate Financing

              

            
	 	 
	
              TENOR

            	
              1)
                Uncommitted

              2)
                Committed

               

            
	
               

            	 
	
              CONTRACTUAL
                TERM

            	
              1)
                No term

              2)
                March 15, 2009

               

            
	 	 
	
              RATE
                TERM (FIXED
                RATE TERM
                LOAN)

            	
              1)
                No term

              2)
                Fixed rate: 6 month, 1-3 years but never to exceed the Contractual
                Term Maturity Date

                 
                Floating rate: No term 

               

            
	 	 
	
              AMORTIZATION

            	
              2)
                15 years to January 2015

               

            
	 	 
	INTEREST
              RATES AND
              FEES 	
              Advances
                shall bear interest and fees as follows:

               

              1)
                Operating
                Loan:

              Prime
                Based Loans: Prime Rate + 0% per
                annum

              2)
                Committed
                Reducing Term Facility: 

              Fixed
                Rate Term Loans: As determined by the
                Bank, in its sole discretion, for the Rate Term selected bythe Borrower,
                and as set out in the Rate and Payment Terms Notice applicable to
                that
                Fixed Rate Term Loan.

                         
                Floating Rate Term Loans available by way of:

                         
                Prime Based Loans: Prime Rate + 0% per annum

               

              For
                all Facilities, interest payments will be made in accordance with
                Schedule
                "A" attached hereto unless otherwise stated in this Letter or in
                the Rate
                and Payment Terms Notice applicable for a particular drawdown. Information
                on interest rate and fee definitions, interest rate calculations
                and
                payment is set out in the Schedule "A" attached hereto.

            
	 	 
	
              DRAWDOWN 

            	
              1)
                On a revolving basis.

              2)
                Fully drawn. Amounts repaid may not be redrawn.

            
	 	 
	
              BUSINESS
                CREDIT SERVICE 

               

            	
              The
                Borrower will have access to the Operating Loan (Facility 1) via
                Loan
                Account Number 9327791-2752 (the "Loan Account") up to the Credit
                Limit of
                the Operating Loan by withdrawing funds from the Borrower's Current
                Account Number 327791-2752 (the "Current Account"). The Borrower
                agrees
                that each advance from the Loan Account will be in an amount equal to
                $10,000 (the "Transfer Amount") or a multiple thereof. If the Transfer
                Amount is NIL, the Borrower agrees that an advance from the Borrower's
                Loan Account may be in an amount sufficient to cover the debits made
                to
                the Current Account.

               

              The
                Borrower agrees that:

              a)
                all other overdraft privileges which have governed the Borrower's
                Current
                Account are hereby cancelled.

              b)
                all outstanding overdraft amounts under any such other agreements
                are now
                included in indebtedness under this Agreement.

               

              The
                Bank may, but is not required to, automatically advance the Transfer
                Amount or a multiple thereof or any other amount from the Loan Account
                to
                the Current Account in order to cover the debits made to the Current
                Account if the amount in the Current Account is insufficient to cover
                the
                debits. The Bank may, but is not required to, automatically and without
                notice apply the funds in the Current Account in amounts equal to
                the
                Transfer Amount or any multiple thereof or any other amount to repay
                the
                outstanding amount in the Loan Account.

            
	 	 
	
              REPAYMENT
                AND REDUCTION
                OF AMOUNT
                OF CREDIT FACILITY 

            	
              1)
                On demand. If the Bank demands repayment, the Borrower will pay to
                the
                Bank all amounts outstanding under the Operating Loan.

              2)
                All amounts outstanding will be repaid on or before the Contractual
                Term
                Maturity Date. The drawdown will be repaid in equal monthly payments.
                The
                details of repayment and interest rate applicable to such drawdown
                will be set out in the" Rate and Payment Terms Notice" applicable
                to that
                drawdown. Any amounts repaid may not be reborrowed.

            
	 	 
	
              SECURITY

            	
              The
                following security shall be provided, shall, unless otherwise indicated,
                support all present and future indebtedness and liability of the
                Borrower
                and the grantor of the security to the Bank including without limitation
                indebtedness and liability under guarantees, foreign exchange contracts,
                cash management products, and derivative contracts, shall be registered
                in
                first position, and shall be on the Bank's standard form, supported
                by
                resolutions and solicitor's opinion, all acceptable to the
                Bank:

               

              a)
                General Security Agreement ("GSA") representing a first charge on
                all the
                Borrower’s assets and undertakings with SLO and Resolution

              b)
                General Assignment of Fire Insurance.

              c)
                Continuing Collateral Mortgage, representing a first charge, on real
                property located at 60 Struck Court, Cambridge, Ontario, in the principal
                amount of $1,500,000, beneficially owned by and registered in the
                name of
                Franklin Covey Canada, Ltd. 

              d)
                Guarantee of Advances from Franklin Covey Co.

                       Limited
                $1,500,000

               

              All
                persons and entities required to provide a guarantee shall be referred
                to
                herein individually as a "Surety" and/or "Guarantor" and collectively
                as
                the "Guarantors". 

               

              All
                of the above security and guarantees shall be referred to collectively
                in
                this Agreement as "Bank Security". 

            
	 	 
	
              DISBURSEMENT
                CONDITIONS 

            	
              The
                obligation of the Bank to permit any drawdown hereunder is subject
                to the
                Standard Disbursement Conditions contained in Schedule "A" and the
                following additional drawdown conditions:

               

              a)
                Borrower Questionnaire and Site Visit to be completed satisfactory
                to the
                Bank.

              b)
                Accountant Prepared Financial statements for the year ended Aug 31,
                2006
                are to be provided to the bank with no material change from management
                prepared statements.

              c)
                Management prepared interim financial statements for the most recent
                period ended are to be provided to the bank.

              d)
                Borrower to commit to transferring all day-to-day banking to
                TDBFG.

            
	 	 
	
              REPRESENTATIONS
                AND
                WARRANTIES

            	
              All
                representations and warranties shall be deemed to be continually
                repeated
                so long as any amounts remain outstanding and unpaid under this Agreement
                or so long as any commitment under this Agreement remains in effect.
                The
                Borrower makes the Standard Representations and Warranties set out
                in
                Schedule "A".

               

            
	 	 
	
              POSITIVE
                COVENANTS 

            	
              So
                long as any amounts remain outstanding and unpaid under this Agreement
                or
                so long as any commitment under this Agreement remains in effect,
                the
                Borrower will and will ensure that its subsidiaries and each of the
                Guarantors will observe the Standard Positive Covenants set out in
                Schedule "A" and in addition will: 

               

              a)
                provide to the Bank annually, Audited year end financial statements
                for
                Franklin Covey Co. within 120 days of each fiscal year end, 

              b)
                provide to the Bank annually, Accountant Prepared Notice to Reader
                Financial Statements for Franklin Covey Canada, Ltd. , within 120
                days of
                each fiscal year end, 

              c)
                obtain prior approval from the Bank and it's solicitor, for any lease
                or
                easement that would restrict use of the property. Approval not to
                be
                unreasonably withheld.

            
	 	 
	
              NEGATIVE
                COVENANTS 

            	
              So
                long as any amounts remain outstanding and unpaid under this Agreement
                or
                so long as any commitment under this Agreement remains in effect,
                the
                Borrower will and will ensure that its subsidiaries and each of the
                Guarantors will observe the Standard Negative Covenants set out in
                Schedule "A". In addition the Borrower will not and will ensure that
                its
                subsidiaries and each of the Guarantors will not:

               

              a)
                allow the subject property herein to be further
                encumbered.

            
	 	 
	
              REPORTING

            	
              The
                Borrower acknowledges that the financial reporting obligations contained
                herein, including the submission of the financial statements to the
                Bank
                on a timely basis, constitute a material condition precedent to the
                Bank
                providing the credit facilities contemplated herein. Should the Borrower
                fail to fulfill such obligations within the delays set forth herein
                and
                such default is not remedied within 10 days from the date of the
                Bank's
                written notice to the Borrower setting forth the nature of the default,
                then the Borrower shall be deemed to have committed an "Event of
                Default"
                as hereinafter defined.

               

              Notwithstanding
                the foregoing, and without prejudice to and under strict reserve
                thereof,
                of any rights and recourses the Bank may have in the circumstances,
                the
                Bank shall nevertheless have the right to engage, at the Borrower's
                expense, an independent auditor to examine the Borrower's books,
                records
                and physical assets, and perform such tests and analysis and such
                other
                verifications as the Bank may, in its sole discretion, determine
                necessary
                to assess its loan risk and realizable value of the
                Security.

            
	 	 
	
              PERMITTED
                LIENS

            	
              Permitted
                Liens as referred to in Schedule "A" are:

               

              Purchase
                Money Security Interests in equipment which Purchase Money Security
                Interest exists on the date of this Agreement ("Existing PMSIs")
                which are
                known to the Bank and all future Purchase Money Security Interests
                on
                equipment acquired to replace the equipment under Existing PMSIs,
                provided
                that the cost of such replacement equipment may not exceed the cost
                of the
                equipment subject to the Existing Lien by more than 10%.
                

            
	 	 
	
              FINANCIAL
                COVENANTS 

            	
              The
                Borrower agrees at all times to:

               

              a)
                maintain a Debt Service Coverage ratio, of not less than 1.25:1.
                Tested
                Annually. 

               

              The
                Debt
                Service Coverage
                ratio to be calculated as follows:

               

              
                EBITDA
                  - Any Capital Cash Outflows to related company (Dividends, Shareholder
                  loans, etc.) - Capital Expenditures

                
                  Principal
                    + Interest 

                   

                  
                    EBITDA
                      is
                      defined as Earnings Before Interest, Income Taxes, Depreciation,
                      and
                      Amortization.

                  

                

              

            
	 	 
	
              EVENTS
                OF DEFAULT

            	
              The
                Bank may accelerate the payment of principal and interest under any
                committed credit facility hereunder and cancel any undrawn portion
                of any
                committed credit facility hereunder, at any time after the occurrence
                of
                any one of the Standard Events of Default contained in Schedule "A"
                attached hereto.

            
	 	 
	
              ANCILLARY
                FACILITIES

            	As
              at the date of this Agreement, the following uncommitted ancillary
              products are made available. These products may be subject to other
              agreements.
               

              1)
                TD Visa Business cards.

              2)
                Spot Foreign Exchange Facility which allows the Borrower to enter
                into
                US$1,000,000 for settlement on a spot basis.

              3)
                Certain treasury products, such as forward foreign exchange
                transactions.

               

              The
                Borrower agrees that treasury products will be used to hedge its
                risk and
                will not be used for speculative purposes.

               

              The
                paragraph headed "FX CLOSE OUT" as set out in Schedule "A" shall
                apply to
                FX Transactions.

            
	 	 
	
              AVAILABILITY
                OF OPERATING
                LOAN

            	
              The
                Operating Loan is uncommitted, made available at the Bank's discretion,
                and is not automatically available upon satisfaction of the terms
                and
                conditions, conditions precedent, or financial tests set out
                herein.

               

              The
                occurrence of an Event of Default is not a precondition to the Bank's
                right to accelerate repayment and cancel the availability of the
                Operating
                Loan.

            
	 	 
	
              SCHEDULE
                "A" - STANDARD
                TERMS
                

              AND
                CONDITIONS 

            	
              Schedule
                "A" sets out the Standard Terms and Conditions ("Standard Terms and
                Conditions") which apply to these credit facilities. The Standard
                Terms
                and Conditions, including the defined terms set out therein, form
                part of
                this Agreement, unless this letter states specifically that one or
                more of
                the Standard Terms and Conditions do not apply or are
                modified.

            
	 	 
	 	 

    

    
    

    We
      trust you will find these facilities helpful in meeting your ongoing financing
      requirements. We ask that if you wish to accept this offer of financing (which
      includes the Standard Terms and Conditions), please do so by signing and
      returning the attached duplicate copy of this letter to the undersigned. This
      offer will expire if not accepted in writing and received by the Bank on or
      before February
      26, 2007.
       

      Yours
        truly, 

    

     

    THE
      TORONTO-DOMINION BANK

     

     

    
      	
              John
                W. Edwards

              Relationship
                Manager

            	
               

            	
               

            	
              Robert
                Lewis

              Manager
                Commercial Credit

            	
               

            	
               

            

    

      

     

     

    TO
      THE TORONTO-DOMINION BANK:

     

     hereby
      accepts the foregoing offer this
            day
      of                           ,
      2007.

     

    
      	
              Signature

            	
               

            	
              Signature

            
	
              Print
                Name & Position

            	
               

            	
              Print
                Name & Position

            

    

     

    cc.
      Guarantor(s)

     

    
      The
        Bank
        is providing the guarantor(s) with a copy of this letter as a courtesy only.
        The
        delivery of a copy of this letter does not create any obligation of the Bank
        to
        provide the guarantor(s) with notice of any changes to the credit facilities,
        including without limitation, changes to the terms and conditions, increases
        or
        decreases in the amount of the credit facilities, the establishment of new
        credit facilities or otherwise. The Bank may, or may not, at its option,
        provide
        the guarantor(s) with such information, provided that the Bank will provide
        such
        information upon the written request of the guarantor.

    

     

     

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

     

    
      SCHEDULE
        A

      STANDARD
        TERMS AND CONDITIONS

       

       

      1.INTEREST
        RATE DEFINITIONS

       

      Prime
        Rate means the rate of interest per annum (based on a 365/366 day year)
        established and reported by the Bank to the Bank of Canada from time to time
        as
        the reference rate of interest for determination of interest rates that the
        Bank
        charges to customers of varying degrees of creditworthiness in Canada for
        Canadian dollar loans made by it in Canada.

       

      The
        Stamping Fee rate per annum for CDN$ B/As is based on a 365/366 day year
        and the
        Stamping Fee is calculated on the Face Amount of each B/A presented to the
        Bank
        for acceptance.  The Stamping Fee rate per annum for US$ B/As is based on a
        360 day year and the Stamping Fee is calculated on the Face Amount of each
        B/A
        presented to the Bank for acceptance. 

       

      LIBOR
        means the rate of interest per annum (based on a 360 day year) as determined
        by
        the Bank (rounded upwards, if necessary to the nearest whole multiple of
        1/16th
        of 1%) at which the Bank may make available United States dollars which are
        obtained by the Bank in the Interbank Euro Currency Market, London, England
        at
        approximately 11:00 a.m. (Toronto time) on the second Business Day before
        the
        first day of, and in an amount similar to, and for the period similar to
        the
        interest period of, such advance. 

       

      USBR
        means the rate of interest per annum (based on a 365/366 day year) established
        by the Bank from time to time as the reference rate of interest for the
        determination of interest rates that the Bank charges to customers of varying
        degrees of creditworthiness for US dollar loans made by it in Canada.

       

      Any
        interest rate based on a period less than a year expressed as an annual rate
        for
        the purposes of the Interest Act (Canada) is equivalent to such determined
        rate
        multiplied by the actual number of days in the calendar year in which the
        same
        is to be ascertained and divided by the number of days in the period upon
        which
        it was based.

       

      2.
        INTEREST CALCULATION AND PAYMENT   

       

      Interest
        on Prime Based Loans and USBR Loans is calculated daily and payable monthly
        in
        arrears based on the number of days  the subject loan is outstanding unless
        otherwise provided in the Rate and Payment Terms Notice. 

       

      The
        Stamping Fee is calculated based on the amount and the term of the B/A and
        payable upon acceptance by the Bank of the B/A. The net proceeds received
        by the
        Borrower on a B/A advance will be equal to the Face Amount of the B/A discounted
        at the Bank's then prevailing B/A discount rate for CDN$ B/As or US$ B/As as the
        case may be, for the specified term of the B/A less the B/A Stamping
        Fee.

       

      Interest
        on LIBOR Loans is calculated and payable on the earlier of contract maturity
        or
        quarterly in arrears, for the number of days in the LIBOR interest
        period.

       

      L/C
        and
        L/G fees are payable at the time set out in the Letter of Credit Indemnity
        Agreement applicable to the issued L/C or L/G.

       

      Interest
        on Fixed Rate Term Loans is compounded monthly and payable monthly in arrears
        unless otherwise provided in the Rate and Payment Terms Notice.

       

      Interest
        is payable both before and after maturity or demand, default and
        judgment.

       

      Each
        payment under this Agreement shall be applied first in payment of costs and
        expenses, then interest and fees and the balance, if any, shall be applied
        in
        reduction of principal.

       

      For
        loans
        not secured by real property, all overdue amounts of principal and interest
        and
        all amounts outstanding in excess of the Credit Limit shall bear interest
        from
        the date on which the same became due or from when the excess was incurred,
        as
        the case may be, until the date of payment or until the date the excess is
        repaid at 21% per annum, or such lower interest rate if the Bank agrees to
        a
        lower interest rate in writing.  Nothing in this clause shall be deemed to
        authorize the Borrower to incur loans in excess of the Credit
        Limit.

       

      3.
        DRAWDOWN PROVISIONS

       

      Prime
        Based and USBR Loans

      There
        is
        no minimum amount of drawdown by way of Prime Based Loans and USBR Loans,
        except
        as stated in the section of the Agreement titled "Business Credit Services
        Agreement", if that section of the Agreement has not been deleted. The Borrower
        shall provide the Bank with 3 Business Days' notice of a requested Prime
        Based
        Loan or USBR Loan over $1,000,000.

       

      B/As

      The
        Borrower shall advise the Bank of the requested term or maturity date for
        B/As
        issued hereunder.  The Bank shall have the discretion to restrict the term
        or maturity dates of B/As. In no event shall the term of the B/A exceed the
        Contractual Term Maturity Date. The minimum amount of a drawdown by way of
        B/As
        is $1,000,000 and in multiples of $100,000 thereafter. The Borrower shall
        provide the Bank with 3 Business Days' notice of a requested B/A
        drawdown.

       

      The
        Borrower shall pay to the Bank the full amount of the B/A  at the maturity
        date of the B/A.

       

      The
        Borrower appoints the Bank as its attorney to and authorizes the Bank to
        (i)
        complete, sign, endorse, negotiate and deliver B/As on behalf of the Borrower
        in
        handwritten form, or by facsimile or mechanical signature or otherwise, (ii)
        accept such B/As, and (iii) purchase, discount, and/or negotiate
        B/As.

       

      LIBOR

      The
        Borrower shall advise the Bank of the requested LIBOR contract maturity
        period.  The Bank shall have the discretion to restrict the LIBOR contract
        maturity.  In no event shall the term of the LIBOR contract exceed the
        Contractual Term Maturity Date.  The minimum amount of a drawdown by way of
        a LIBOR Loan is $1,000,000, and shall be in multiples of $100,000 thereafter.
        The Borrower will provide the Bank with 3 Business Days' notice of a requested
        LIBOR Loan.

       

      L/C
        and/or L/G

      The
        Bank
        shall have the discretion to restrict the maturity date of L/Gs or
        L/Cs.

       

      B/A
        - Prime Conversion

      The
        Borrower will provide the Bank with at least 3 Business Days' notice of its
        intention either to convert a B/A to a Prime Based Loan or vice versa, failing
        which, the Bank may decline to accept such additional B/As or may charge
        interest on the amount of Prime Based Loans resulting from maturity of B/As
        at
        the rate of 115% of the rate applicable to Prime Based Loans for the 3 Business
        Day period immediately following such maturity.  Thereafter, the rate shall
        revert to the rate applicable to Prime Based Loans.

       

      Notice

      Prior
        to
        each drawdown and at least 10 days prior to each Rate Term Maturity, the
        Borrower will advise the Bank of its selection of drawdown options from 
those made available by the Bank.  The Bank will, after each drawdown,
        other than drawdowns by way of BA, LIBOR Loan or under the operating loan,
        send
        a Rate and Payment Terms Notice to the Borrower. 

       

      4.
        PREPAYMENT

       

      (a)    
        10% Prepayment Option Chosen.  If the Borrower has elected a 10% Prepayment
        Option for a Facility the following shall apply to all Fixed Rate Loans made
        under that Facility.  Each calendar year, ("Year"), the Borrower may prepay
        in one lump sum, once each Year, an amount outstanding under a Fixed Rate
        Term
        Loan not exceeding 10% of the original amount of the Fixed Rate Term Loan
        being
        prepaid, upon payment of all interest accrued to the date of prepayment
        ("Prepayment Date") without paying any prepayment charge, provided that an
        Event
        of Default has not occurred.  This privilege is not cumulative from Year to
        Year. 

       

      (b)    
        10% Prepayment Option Not Chosen or Borrower Prepaying More than 10%. 
During each Year, the Borrower may, provided that an Event of Default has
        not
        occurred:

       

      if
        it has
        not chosen the 10% Prepayment Option, prepay all or any part of the principal
        then outstanding under Fixed Rate Term Loans, or,

      if
        it has
        chosen the 10% Prepayment Option, prepay more than 10% of the original amount
        of
        the Fixed Rate Term Loan being prepaid, in any Year, 

       

      in
        either
        case, upon payment of all interest accrued to the Prepayment Date and prepayment
        charges equal to the greater of:

       

      (a)    
        three months' interest on the amount of the prepayment (and in the case where
        the Borrower has chosen the 10% Prepayment Option, the amount of prepayment
        is
        the amount of prepayment exceeding the 10% limit) using the interest rate
        applicable to the Fixed Rate Term Loan being prepaid; and

       

      (b)    
        the Interest Rate Differential, being the amount by which:

       

      the
        total
        amount of interest on the amount of the prepayment using the interest rate
        applicable to the Fixed Rate Term Loan being prepaid calculated for the period
        of time equal to the Remaining Term, exceeds

      the
        total
        amount of interest on the amount being prepaid using the interest rate
        applicable to a fixed rate term loan that the Bank would make to a borrower
        for
        a comparable facility on the Prepayment Date, calculated for the period of
        time
        from the Prepayment Date until the Rate Term Maturity Date for the Fixed
        Rate
        Term Loan being prepaid ("Remaining Term").

       

      5.
        STANDARD DISBURSEMENT CONDITIONS 

       

      The
        obligation of the Bank to permit any drawdowns hereunder at any time is subject
        to the following conditions precedent:

      a)        
        The Bank shall have received the following documents which shall be in form
        and
        substance satisfactory to the Bank:

                 
        i)          A copy of a duly
        executed resolution of the Board of Directors of the Borrower empowering
        the
        Borrower to enter into this Agreement;  

                 
        ii)          A copy of any
        necessary government approvals authorizing the Borrower to enter into this
        Agreement;

                 
        iii)         All of the Bank Security
        and supporting resolutions and solicitors' letter of opinion required
        hereunder;

                 
        iv)         The Borrower's compliance
        certificate certifying compliance with all terms and conditions hereunder;
        

                 
        v)         all operation of account
        documentation; and

                 
        vi)         For drawdowns under the
        Facility by way of L/C or L/G, the Bank’s standard form Letter of Credit
        Indemnity Agreement

      b)        
        The representations and warranties contained in this Agreement are
        correct.

      c)        
        No event has occurred and is continuing which constitutes an Event of Default
        or
        would constitute an Event of Default, but for the requirement that notice
        be
        given or time elapse or both.

      d)        
        The Bank has received the arrangement fee payable hereunder (if any) and
        the
        Borrower has paid all legal and other expenses incurred by the Bank in
        connection with the Agreement or the Bank Security.

       

      6. 
        STANDARD REPRESENTATIONS AND WARRANTIES

       

      The
        Borrower hereby represents and warrants, which  representations and
        warranties shall be deemed to be continually repeated so long as any amounts
        remain outstanding and unpaid under this Agreement or so long as any commitment
        under this Agreement remains in effect, that:

      a)        
        The Borrower is a duly incorporated corporation, a limited partnership,
        partnership, or sole proprietorship, duly organized, validly existing and
        in
        good standing under the laws of the jurisdiction where the Branch/Centre
        is
        located and each other jurisdiction where the Borrower has property or assets
        or
        carries on business and the Borrower has adequate corporate power and authority
        to carry on its business, own property, borrow monies and enter into agreements
        therefore, execute and deliver the Agreement, the Bank Security, and documents
        required hereunder, and observe and perform the terms and provisions of this
        Agreement.

      b)        
        There are no laws, statutes or regulations applicable to or binding upon
        the
        Borrower and no provisions in its charter documents or in any by-laws,
        resolutions, contracts, agreements, or arrangements which would be contravened,
        breached, violated as a result of the execution, delivery, performance,
        observance, of any terms of this Agreement.

      c)        
        No Event of Default has occurred nor has any event occurred which, with the
        passage of time or the giving of notice, would constitute an Event of Default
        under this Agreement or which would constitute a default under any other
        agreement.

      d)        
        There are no actions, suits or proceedings, including appeals or applications
        for review, or any knowledge of pending actions, suits, or proceedings against
        the Borrower and its subsidiaries, before any court or administrative agency
        which would result in any material adverse change in the property, assets,
        financial condition, business or operations of the Borrower.

      e)        
        All material authorizations, approvals, consents, licenses, exemptions, filings,
        registrations and other requirements of governmental, judicial and public
        bodies
        and authorities required to carry on its business have been or will be obtained
        or effected and are or will be in full force and effect.

      f)         
        The financial statements and forecasts delivered to the Bank fairly present
        the
        present financial position of the Borrower, and have been prepared by the
        Borrower and its auditors in accordance with Canadian  Generally Accepted
        Accounting Principles consistently applied.

      g)        
        All of the remittances required to be made by the Borrower to the federal
        government and all provincial and municipal governments have been made, are
        currently up to date and there are no outstanding arrears.  Without
        limiting the foregoing, all employee source deductions (including income
        taxes,
        Employment Insurance and Canada Pension Plan), sales taxes (both provincial
        and
        federal), corporate income taxes, corporate capital taxes, payroll taxes
        and
        Workers' Compensation dues are currently paid and up to date.

       

      7.
        STANDARD POSITIVE COVENANTS

       

      So
        long
        as any amounts remain outstanding and unpaid under this Agreement or so long
        as
        any commitment under this Agreement remains in effect, the Borrower will,
        and
        will ensure that its subsidiaries and each of the Guarantors will:

      a)        
        Pay all amounts of principal, interest and fees on the dates, times and place
        specified herein, under the Rate and Payment Terms Notice, and under any
        other
        agreement between the Bank and the Borrower.

      b)        
        Advise the Bank of any change in the amount and the terms of any credit
        arrangement made with other lenders or any action taken by another lender
        to
        recover amounts outstanding with such other lender.

      c)        
        Advise promptly after the happening of any event which will result in a material
        adverse change in the financial condition, business, operations, or prospects
        of
        the Borrower or the occurrence of any Event of Default or default under this
        Agreement or under any other agreement for borrowed money.

      d)        
        Do all things necessary to maintain in good standing its corporate existence
        and
        preserve and keep all material agreements, rights, franchises, licenses,
        operations, contracts or other arrangements in full force and
        effect.

      e)        
        Take all necessary actions to ensure that the Bank Security and its obligations
        hereunder will rank ahead of all other indebtedness of and all other security
        granted by the Borrower.

      f)         
        Pay all taxes, assessments and government charges unless such taxes,
        assessments, or charges are being contested in good faith and appropriate
        reserves shall be made with funds set aside in a separate trust
        fund.

      g)        
        Provide the Bank with information and financial data as it may request from
        time
        to time.

      h)        
        Maintain property, plant and equipment in good repair and working
        condition.

      i)         
        Inform the Bank of any actual or probable litigation and furnish the Bank
        with
        copies of details of any litigation or other proceedings, which might affect
        the
        financial condition, business, operations, or prospects of the
        Borrower.

      j)         
        Provide such additional security and documentation as may be required from
        time
        to time by the Bank or its solicitors.

      k)         
        Continue to carry on the business currently being carried on by the Borrower
        its
        subsidiaries and each of the Guarantors at the date hereof.

      l)         
        Maintain adequate insurance on all of its assets, undertakings, and business
        risks.

      m)       
        Permit the Bank or its authorized representatives full and reasonable access
        to
        its premises, business, financial and computer records and allow the duplication
        or extraction of pertinent information therefrom and

      n)        
        Comply with all applicable laws.

       

      8.
        STANDARD NEGATIVE COVENANTS

       

      So
        long
        as any amounts remain outstanding and unpaid under this Agreement or so long
        as
        any commitment under this Agreement remains in effect, the Borrower will
        not and
        will ensure that its subsidiaries and each of the Guarantors will
        not:

       

      a)
                Create, incur, assume, or suffer to
        exist, any mortgage, deed of trust, pledge, lien, security interest, assignment,
        charge, or encumbrance (including without limitation, any conditional sale,
        or
        other title retention agreement, or finance lease) of any nature, upon or
        with
        respect to any of its assets or undertakings, now owned or hereafter acquired,
        except for those Permitted Liens, if any, set out in the Letter. 

      b)        
        Create, incur, assume or suffer to exist any other indebtedness for borrowed
        money (except for indebtedness resulting from Permitted Liens, if any) or
        guarantee or act as surety or agree to indemnify the debts of any other
        Person.

      c)        
        Merge or consolidate with any other Person, or acquire all or substantially
        all
        of the shares, assets or business of any other Person.

      d)        
        Sell, lease, assign, transfer, convey or otherwise dispose of any of its
        now
        owned or hereafter acquired assets (including, without limitation, shares
        of
        stock and indebtedness of subsidiaries, receivables and leasehold interests),
        except for inventory disposed of in the ordinary course of
        business.

      e)
                Terminate or enter into a surrender
        of any lease of any property mortgaged under the Bank Security.

      f)         
        Cease to carry on the business currently being carried on by each of the
        Borrower, its subsidiaries, and the Guarantors at the date hereof.

      g)        
        Permit any change of ownership or change in the capital structure of the
        Borrower.

       

      9.
        ENVIRONMENTAL

       

      The
        Borrower represents and warrants (which representation and warranty shall
        continue throughout the term of this Agreement) that the business of the
        Borrower, its subsidiaries and each of the Guarantors is being operated in
        compliance with applicable laws and regulations respecting the discharge,
        omission, spill or disposal of any hazardous materials and that any and all
        enforcement actions in respect thereto have been clearly conveyed to the
        Bank.

       

      The
        Borrower shall, at the request of the Bank from time to time, and at the
        Borrower's expense, obtain and provide to the Bank an environmental audit
        or
        inspection report of the property from auditors or inspectors acceptable
        to the
        Bank.

       

      The
        Borrower hereby indemnifies the Bank, its officers, directors, employees,
        agents
        and shareholders, and agrees to hold each of them harmless from all loss,
        claims, damages and expenses (including legal and audit expenses) which may
        be
        suffered or incurred in connection with the indebtedness under this Agreement
        or
        in connection with the Bank Security. 

       

      10.
        STANDARD EVENTS OF DEFAULT

       

      The
        Bank
        may accelerate the payment of principal and interest under any committed
        credit
        facility hereunder and cancel any undrawn portion of any committed credit
        facility hereunder, at any time after the occurrence of any one of the following
        Events of Default:

      a)        
        Non-payment of principal outstanding under this Agreement when due or
        non-payment of interest or fees outstanding under this Agreement within 3
        Business Days of when due.

      b)        
        If any representation, warranty or statement made hereunder or made in
        connection with the execution and delivery of this Agreement or the Bank
        Security is false or misleading at any time.

      c)        
        If there is a breach or non-performance or non-observance of any term or
        condition of this Agreement or the Bank Security and, if such default is
        capable
        to being remedied, the default continues unremedied for 5 Business Days after
        the occurrence. 

      d)        
        If the Borrower, any one of its subsidiaries, or, if any of the Guarantors
        makes
        a general assignment for the benefit of creditors, files or presents a petition,
        makes a proposal or commits any act of bankruptcy, or if any action is taken
        for
        the winding up, liquidation or the appointment of a liquidator, trustee in
        bankruptcy, custodian, curator, sequestrator, receiver or any other officer
        with
        similar powers or if a judgment or order shall be entered by any court approving
        a petition for reorganization, arrangement or composition of or in respect
        of
        the Borrower, any of its subsidiaries, or any of the Guarantors or if the
        Borrower, any of its subsidiaries, or any of the Guarantors is insolvent
        or
        declared bankrupt.

      e)
                If there exists a voluntary or
        involuntary suspension of business of the Borrower, any of its subsidiaries,
        or
        any of the Guarantors.

      f)         
        If action is taken by an encumbrancer against the Borrower,  any of its
        subsidiaries, or any of the Guarantors to take possession of property or
        enforce
        proceedings against any assets.

      g)        
        If any final judgment for the payment of monies is made against the Borrower,
        any of its subsidiaries, or any of the Guarantors and it is not discharged
        within 30 days from the imposition of such judgment.

      h)        
        If there exists an event, the effect of which with lapse of time or the giving
        of notice, will constitute an event of default or a default under any other
        agreement for borrowed money in excess the Cross Default Threshold entered
        into
        by the Borrower, any of its subsidiaries, or any of the Guarantors.

      i)         
        If the Bank Security is not enforceable or if any party to the Bank Security
        shall dispute or deny any liability or any of its obligations under the Bank
        Security.

      j)
                 If, in the Bank's
        determination, a material adverse change occurs in the financial condition,
        business operations or prospects of the Borrower, any of the Borrower's
        subsidiaries, or any of the Guarantors.

       

      11.
        ACCELERATION

       

      If
        the
        Bank accelerates the payment of principal and interest hereunder, the Borrower
        shall immediately pay to the Bank all amounts outstanding hereunder, including
        without limitation, the amount of unmatured B/As and LIBOR Loans and the
        amount
        of all drawn and undrawn  L/Gs and  L/Cs.  All cost to the Bank
        of unwinding LIBOR Loans and all loss suffered by the Bank in re-employing
        amounts repaid will be paid by the Borrower.

       

      The
        Bank
        may demand the payment of principal and interest under the Operating Loan
        (and
        any other uncommitted facility) hereunder and cancel any undrawn portion
        of the
        Operating Loan (and any other uncommitted facility) hereunder, at any time
        whether or not an Event of Default has occurred.

       

      12.
        CURRENCY INDEMNITY

       

      US$
        loans
        must be repaid with US$ and CDN$ loans must be repaid with CDN$ and the Borrower
        shall indemnify the Bank for any loss suffered by the Bank if US$ loans are
        repaid with CDN$ or vice versa, whether such payment is made pursuant to
        an
        order of a court or otherwise.

       

      13.
        TAXATION ON PAYMENTS

       

      All
        payments made by the Borrower to the Bank will be made free and clear of
        all
        present and future taxes (excluding the Bank's income taxes), withholdings
        or
        deductions of whatever nature.  If these taxes, withholdings or deductions
        are required by applicable law and are made, the Borrower, shall, as a separate
        and independent obligation, pay to the Bank all additional amounts as shall
        fully indemnify the Bank from any such taxes, withholdings or
        deductions.

       

      14.
        REPRESENTATION

       

      No
        representation or warranty or other statement made by the Bank concerning
        any of
        the credit facilities shall be binding on the Bank unless made by it in writing
        as a specific amendment to this Agreement.

       

      15.
        ADDED COST

       

      If
        the
        introduction of or any change in any present or future law, regulation, treaty,
        official or unofficial directive, or regulatory requirement, (whether or
        not
        having the force of law) or in the interpretation or application thereof,
        relates to:

      i)         
        the imposition or exemption of taxation of payments due to the Bank or on
        reserves or deemed reserves in respect of the undrawn portion of any Facility
        or
        loan made available hereunder; or,

      ii)         
        any reserve, special deposit, regulatory or similar requirement against assets,
        deposits, or loans or other acquisition of funds for loans by the Bank;
        or,

      iii)        
        the amount of capital required or expected to be maintained by the Bank as
        a
        result of the existence of the advances or the commitment made
        hereunder;

       

      and
        the
        result of such occurrence is, in the sole determination of the Bank, to increase
        the cost of the Bank or to reduce the income received or receivable by the
        Bank
        hereunder, the Borrower shall, on demand by the Bank, pay to the Bank that
        amount which the Bank estimates will compensate it for such additional cost
        or
        reduction in income and the Bank's estimate shall be conclusive, absent manifest
        error.

       

      16.
        EXPENSES

       

      The
        Borrower shall pay, within 5 Business Days following notification, all fees
        and
        expenses (including but not limited to all legal fees) incurred by the Bank
        in
        connection with the preparation, registration and ongoing administration
        of this
        Agreement and the Bank Security and with the enforcement of the Bank's rights
        and remedies under this Agreement and the Bank Security whether or not any
        amounts are advanced under the Agreement. These  fees and expenses shall
        include, but not be limited, to all outside counsel fees and expenses and
        all
        in-house legal fees and expenses, if in-house counsel are used, and all outside
        professional advisory fees and expenses. The Borrower shall pay interest
        on
        unpaid amounts due pursuant to this paragraph at the All-In Rate plus 2%
        per
        annum.

       

      17.
        NON WAIVER

       

      Any
        failure by the Bank to object to or take action with respect to a breach
        of this
        Agreement or any Bank Security or upon the occurrence of an Event of Default
        shall not constitute a waiver of the Bank's right to take action at a later
        date
        on that breach. No course of conduct by the Bank will give rise to any
        reasonable expectation which is in any way inconsistent with the terms and
        conditions of this Agreement and the Bank Security or the Bank's rights
        thereunder.

       

      18.
        EVIDENCE OF INDEBTEDNESS

       

      The
        Bank
        shall record on its records the amount of all loans made hereunder, payments
        made in respect thereto, and all other amounts becoming due to the Bank under
        this Agreement.  The Bank's records constitute, in the absence of manifest
        error, conclusive evidence of the indebtedness of the Borrower to the Bank
        pursuant to this Agreement.

       

      The
        Borrower will sign the Bank’s standard form Letter of Credit Indemnity Agreement
        for all L/Cs and  L/Gs issued by the Bank.

       

      With
        respect to chattel mortgages taken as Bank Security, this Agreement is the
        Promissory Note referred to in same chattel mortgage, and the indebtedness
        incurred hereunder is the true indebtedness secured by the chattel
        mortgage.

       

      19.
        ENTIRE AGREEMENTS

       

      This
        Agreement replaces any previous letter agreements dealing specifically with
        terms and conditions of the credit facilities described in the Letter.
        Agreements relating to other credit facilities made available by the Bank
        continue to apply for those other credit facilities.  This Agreement, and
        if applicable, the Letter of Credit Indemnity Agreement, are the entire
        agreements relating to the Facilities described in this Agreement.

       

      20.
        ASSIGNMENT

       

      The
        Bank
        may assign or grant participation in all or part of this Agreement or in
        any
        loan made hereunder without notice to and without the Borrower's consent.
        

       

      The
        Borrower may not assign or transfer all or any part of its rights or obligations
        under this Agreement.  

       

      21.
        RELEASE OF
        INFORMATION        

       
        

      The
        Borrower hereby irrevocably authorizes and directs the Borrower's accountant,
        (the "Accountant") to deliver all financial statements and other financial
        information concerning the Borrower to the Bank and agrees that the Bank
        and the
        Accountant may communicate directly with each other. 

       

      22. 
        FX CLOSE OUT

       

      The
        Borrower hereby acknowledges and agrees that in the event any of the following
        occur: (i) Default by the Borrower under any forward foreign exchange contract
        ("FX Contract"); (ii) Default by the Borrower in payment of monies owing
        by it
        to anyone, including the Bank; (iii) Default in the performance of any other
        obligation of the Borrower under any agreement to which it is subject; or
        (iv)
        the Borrower is adjudged to be or voluntarily becomes bankrupt or insolvent
        or
        admits in writing to its inability to pay its debts as they come due or has
        a
        receiver appointed over its assets, the Bank shall be entitled without advance
        notice to the Borrower to close out and terminate all of the outstanding
        FX
        Contracts entered into hereunder, using normal commercial practices employed
        by
        the Bank, to determine the gain or loss for each terminated FX contract. 
The Bank shall then be entitled to calculate a net termination value for
        all of
        the terminated FX Contracts which shall be the net sum of all the losses
        and
        gains arising from the termination of the FX Contracts which net sum shall
        be
        the "Close Out Value" of the terminated FX Contracts.  The Borrower
        acknowledges that it shall be required to forthwith pay any positive Close
        Out
        Value owing to the Bank and the Bank shall be required to pay ant negative
        Close
        Out Value owing to the Borrower, subject to any rights of set-off to which
        the
        Bank is entitled or subject. 

       

      23.
        SET-OFF

       

      In
        addition to and not in limitation of any rights now or hereafter granted
        under
        applicable law, the Bank may at any time and from time to time without notice
        to
        the Borrower or any other Person, any notice being expressly waived by the
        Borrower, set-off and compensate and apply any and all deposits, general
        or
        special, time or demand, provisional or final, matured or unmatured, in any
        currency, and any other indebtedness or amount payable by the Bank (irrespective
        of the place of payment or booking office of the obligation), to or for the
        credit of or for the Borrower's account, including without limitation, any
        amount owed by the Bank to the Borrower under any FX Contract or other treasury
        or derivative product, against and on account of the indebtedness and liability
        under this Agreement notwithstanding that any of them are contingent or
        unmatured or in a different currency than the indebtedness and liability
        under
        this Agreement. 

       

      When
        applying a deposit or other obligation in a different currency than the
        indebtedness and liability under this Agreement to the indebtedness and
        liability under this Agreement, the Bank will convert the deposit or other
        obligation to the currency of the indebtedness and liability under this
        Agreement using the Bank's noon spot rate of exchange for the conversion
        of such
        currency.

       

      24. 
        USE OF INFORMATION

       

      The
        word
        "Information" means the Borrower's business and credit information and the
        Guarantor's personal, business and credit information.  It includes
        information provided to the Bank by the Borrower and Guarantors, including
        through the products and services the Borrower and Guarantor(s) uses, and
        information obtained from others.

       

      The
        Borrower and the Guarantor agree to the use of its Information as
        follows:

      Use
        of
        Information - The Bank may use Information to establish and serve the Borrower
        as its customer, determine whether any products or services of the TD Bank
        Financial Group are suitable for the Borrower and offer them to the Borrower,
        or
        when required or permitted by law. The Bank may share Information within
        the TD
        Bank Financial Group where permitted by law;  

      Collection
        and Use of Credit Information - THE BANK MAY OBTAIN INFORMATION FROM PARTIES
        OUTSIDE THE TD BANK FINANCIAL GROUP, INCLUDING THROUGH A CREDIT CHECK, AND
        VERIFY INFORMATION WITH THEM.  THE BORROWER AND THE GUARANTOR AUTHORIZE
        THOSE PARTIES TO GIVE THE BANK INFORMATION.  The Bank may disclose
        Information to other lenders and credit bureaus. 

       

      The
        Borrower and the Guarantor may obtain the Bank’s Privacy Code - "Protecting Your
        Privacy" or review its options for refusing or withdrawing this consent,
        including its option not to be contacted about offers of products or services,
        by contacting the Branch or calling the Bank at 1-800-9TD BANK.

       

      25.
        MISCELLANEOUS

       

      i)         
        The Borrower has received a signed copy of this Agreement;

      ii)         
        If more than one Person, firm or corporation signs this Agreement as the
        Borrower, each party is jointly and severally liable hereunder, and the Bank
        may
        require payment of all amounts payable under this Agreement from any one
        of
        them, or a portion from each, but the Bank is released from any of its
        obligations by performing that obligation to any one of them;

      iii)        
        Accounting terms will (to the extent not defined in this Agreement) be
        interpreted in accordance with accounting principles established from time
        to
        time by the Canadian Institute of Chartered Accountants (or any successor)
        consistently applied, and all financial statements and information provided
        to
        the Bank will be prepared in accordance with those principles;

      iv)        
        This Agreement is governed by the law of the Province or Territory where
        the
        Branch/Centre is located.

      v)        
        Unless stated otherwise, all amounts referred to herein are in Canadian
        dollars

       

      26.
        DEFINITIONS

       

      Capitalized
        Terms used in this Agreement shall have the following meanings:

      "All-In
        Rate" means the greater of the Interest Rate that the Borrower pays for
        Prime Based Loans (which for greater certainty includes the percent per annum
        added to the Prime Rate) or the highest fixed rate paid for Fixed Rate Term
        Loans. 

      "Agreement"
        means the agreement between the Bank and the Borrower set out in the Letter
        and
        this Schedule "A" - Standard Terms and Conditions.

      "Business
        Day" means any day (other than a Saturday or Sunday) that the Branch/Centre
        is open for business.

      "Branch/Centre"
        means The Toronto-Dominion Bank branch or banking centre noted on the first
        page
        of the Letter, or such other branch or centre as may from time to time be
        designated by the Bank.

      "Contractual
        Term Maturity Date" means the date set out in the Letter under the heading
        "Contractual Term".

      "Face
        Amount" means, in respect of:

      (i)        
        a B/A, the amount payable to the holder thereof on its maturity;

      (ii)        
        A L/C or L/G, the maximum amount payable to the beneficiary specified therein
        or
        any other Person to whom payments may be required to be made pursuant to
        such
        L/C or L/G.

      "Fixed
        Rate Term Loan" means any drawdown in Canadian dollars under a Credit
        Facility at an interest rate which is fixed for a Rate Term at such rate
        as is
        determined by the Bank as its sole discretion.  

      "Inventory
        Value" means, at any time of determination, the total value (based on the
        lower of cost or market) of the Borrower's inventories that are subject to
        the
        Bank Security (other than (i) those inventories supplied by trade creditors
        who
        at that time have not been fully paid therefore and would have a right to
        repossess all or part of such inventories if the Borrower were then either
        bankrupt or in receivership, (ii) those inventories comprising work in process
        and (iii) those inventories that the Bank may from time to time designate
        in its
        sole discretion) minus the total amount of any claims, liens or encumbrances
        on
        those inventories having or purporting to have priority over the
        Bank.

      "Letter"
        means the letter from the Bank to the Borrower to which this Schedule "A"
        -  Standard Terms and Conditions is attached.

      "Letter
        of Credit" or "L/C" means a documentary letter of credit or similar
        instrument in form and substance satisfactory to the Bank.

      "Letter
        of Guarantee" or "L/G" means a stand-by letter of guarantee or
        similar instrument in form and substance satisfactory to the Bank.

      "Person"
        includes any individual, sole proprietorship, corporation, partnership, joint
        venture, trust, unincorporated association, association, institution, entity,
        party, or government (whether national, federal, provincial, state, municipal,
        city, county, or otherwise and including any instrumentality, division, agency,
        body, or department thereof).

      "Purchase
        Money Security Interest" means a security interest on equipment which is
        granted to a lender or to the seller of such equipment in order to secure
        the
        purchase price of such equipment or a loan to acquire such equipment, provided
        that the amount secured by the security interest does not exceed the cost
        of the
        equipment, the Borrower provides written notice to the Bank prior to the
        creation of the security interest, and the creditor under the security interest
        has, if requested by the Bank, entered into an inter-creditor agreement with
        the
        Bank, in a format acceptable to the Bank.  

       

      "Rate
        Term" means that period of time as selected by the Borrower from the options
        offered to it by the Bank, during which a Fixed Rate Term Loan will bear
        a
        particular interest rate.  If no Rate Term is selected, the Borrower will
        be deemed to have selected a Rate Term of 1 year.

      "Rate
        Term Maturity" means the last day of a Rate Term which day may never exceed
        the Contractual Term Maturity Date.

      "Rate
        and Payment Terms Notice" means the notice sent by the Bank setting out the
        interest rate and payment terms for a particular drawdown.

      "Receivable
        Value" means, at any time of determination, the total value of those of the
        Borrower's trade accounts receivable that are subject to the Bank Security
        other
        than (i) those accounts then outstanding for 90 days, (ii) those accounts
        owing
        by Persons, firms or corporations affiliated with the Borrower, (iii) those
        accounts that the Bank may from time to time designate in its sole discretion,
        (iv) those accounts subject to any claim, liens, or encumbrance having or
        purporting to have priority over the Bank, (v) those accounts which are subject
        to a claim of set-off by the obligor under such account, MINUS the total
        amount
        of all claims, liens, or encumbrances on those receivables having or purporting
        to have priority over the Bank. 

      "Receivables/Inventory
        Summary" means a summary of the Customer's trade account receivables and
        inventories, in form as the Bank may require and certified by a senior
        officer/representative of the Borrower.

      "US$
        Equivalent" means, on any date, the equivalent amount in United States
        Dollars after giving effect to a conversion of a specified amount of 
Canadian Dollars to United States Dollars at the Bank's noon spot rate of
        exchange for Canadian Dollars to United States Dollars established by the
        Bank
        for the day in question.

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