UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of
The
Securities Exchange Act of 1934
Date of
Report (Date of Earliest Event Reported):
December
1, 2009
FRANKLIN
COVEY CO.
(Exact name of registrant as specified in its charter)
Commission
File No. 1-11107
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Utah
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87-0401551
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(State
or other jurisdiction of incorporation)
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(IRS
Employer Identification Number)
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2200
West Parkway Boulevard
Salt
Lake City, Utah 84119-2099
(Address
of principal executive offices)(Zip Code)
Registrant’s
telephone number, including area code: (801) 817-1776
Former
name or former address, if changed since last report: Not Applicable
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
[
] Written communications pursuant to Rule 425
under the Securities Act (17 CFR 230.425)
[
] Soliciting material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)
[
] Pre-commencement communications pursuant to
Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[
] Pre-commencement communications pursuant to
Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item
1.01 Entry into a Material Definitive Agreement
On
February 25, 2010, Franklin Covey Co. (the Company) entered into a fourth
modification agreement with JPMorgan Chase Bank, N.A. (the Lender) on its line
of credit facility (the Fourth Modification Agreement). The Lender
also provides the majority of the Company’s day-to-day banking
services.
Under
provisions of the Fourth Modification Agreement, the following terms of the line
of credit agreements were modified:
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1.
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Loan Amount – The line
of credit will continue to allow up to $13.5 million of borrowing capacity
until December 31, 2010, when the loan amount will be reduced to $10.0
million.
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2.
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Maturity Date – The
maturity date of the credit facility has been extended one year to March
14, 2011.
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3.
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Interest Rate – The
effective interest rate will be based upon the calculation of the Funded
Debt to EBITDAR Ratio and the Fixed Charge Coverage Ratio. If
the Company’s Funded Debt to EBITDAR Ratio is less than 2.5 to 1.0 and the
Fixed Charge Coverage Ratio is greater than 2.0 to 1.0, the interest rate
will be LIBOR plus 2.6 percent. If the ratios are in excess of
these amounts, but still in compliance with the terms of the line of
credit facility, the interest rate will be LIBOR plus 3.5
percent.
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4.
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Financial Covenants –
The Funded Debt to EBITDAR Ratio was modified for the twelve (12)
month periods then ending, to be less than (a) 3.75 to 1.00 as of the
end of the fiscal quarter ending on February 28, 2010, (b) 3.50 to 1.00 as
of the end of the fiscal quarter ending on May 29, 2010, and (c) 3.00 to
1.00 as of the end of the fiscal quarter ending on August 31, 2010 and
each fiscal quarter thereafter. The Fixed Charge Coverage Ratio
is required to be greater than 1.5 to 1.0 for all periods and the minimum
net worth was revised to $67.0 million. The capital expenditure
limitations remain unchanged. In the event of noncompliance
with these financial covenants and other defined events of default, the
Lender is entitled to certain remedies, including acceleration of the
repayment of amounts outstanding on the line of
credit.
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On
December 1, 2009, the Company obtained an unsecured short-term loan from a bank
in Japan for 100.0 million yen. The United States dollar equivalent
of the loan exceeded the allowable $1.0 million, which resulted in an
instance of non-compliance with the Company’s line of credit
agreement. This instance of non-compliance has since been cured and
did not increase the outstanding obligation on the line of credit
agreement. The Fourth Modification Agreement waived the instance of
non-compliance with regard to the Japan loan.
The
foregoing description of the Fourth Modification Agreement does not purport to
be complete and is qualified in its entirety by reference to the text of the
Fourth Modification Agreement, which is filed as Exhibit 10.1 attached
hereto.
The
original credit agreements with the Lender are described in further detail in,
and the corresponding agreements are attached as exhibits to, the Form 8-K filed
with the Securities and Exchange Commission on March 19, 2007.
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Item
2.03
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Creation
of a Direct Financial Obligation or an Obligation Under an Off-Balance
Sheet Arrangement
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On
February 25, 2010, the Company entered into the Fourth Modification Agreement
with the Lender on its line of credit facility as described above in Item
1.01. The information in Item 1.01 is incorporated by reference
herein.
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Item
2.04
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Triggering
Events That Accelerate or Increase a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet
Arrangement
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On
December 1, 2009, the Company entered into a short-term loan with a bank in
Japan, which resulted in an instance of non-compliance with certain terms of the
line of credit agreement. The Fourth Modification waived the instance
of non-compliance as described in Item 1.01. The information in Item
1.01 is incorporated by reference herein.
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Item
9.01
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Financial
Statements and Exhibits
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(d)
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Exhibits:
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10.1
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Fourth
Modification Agreement by and among Franklin Covey Co. and JPMorgan Chase
Bank, N.A., dated February 25, 2010.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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FRANKLIN
COVEY CO.
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Date:
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March 2, 2010
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By:
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/s/ Stephen D.
Young
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Stephen D.
Young
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Chief Financial
Officer
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Exhibit 10.1
FOURTH
MODIFICATION AGREEMENT
This
FOURTH MODIFICATION
AGREEMENT (the “Modification Agreement”) is
made effective as of February 25, 2010, by and among FRANKLIN COVEY CO., a Utah
corporation (“Borrower”), whose address is
2200 West Parkway Blvd., Salt Lake City, Utah 84119, each undersigned Guarantor,
and JPMORGAN CHASE BANK,
N.A., a national banking association (“Lender”), whose address is
201 South Main Street, Suite 300, Salt Lake City, Utah 84111.
RECITALS:
A. Lender
has previously extended to Borrower a revolving line of credit loan (the “Loan”) in the maximum
principal amount of TWENTY-FIVE MILLION AND NO/100 DOLLARS ($25,000,000.00), as
reduced from time to time, pursuant to a Revolving Line of Credit Agreement
dated as of March 14, 2007 (as amended and modified from time to time, the
“Loan Agreement”), and
evidenced by a Secured Promissory Note dated March 14, 2007 (as amended and
modified from time to time, the “Note”). As of the
date hereof, the maximum principal amount of the Loan is THIRTEEN MILLION FIVE
HUNDRED THOUSAND AND NO/100 DOLLARS ($13,500,000.00). Capitalized
terms used herein without definition shall have the meanings given to such terms
in the Loan Agreement and Note.
B. Repayment
of the Loan is guaranteed pursuant to the terms of a Repayment Guaranty dated as
of March 14, 2007 (as amended and modified from time to time, the “Guaranty”), executed by FRANKLIN DEVELOPMENT
CORPORATION, a Utah corporation, FRANKLIN COVEY TRAVEL, INC., a
Utah corporation, and FRANKLIN
COVEY CLIENT SALES, INC., a Utah corporation (individually and
collectively, as the context requires, and jointly and severally, “Guarantor”), in favor of
Lender.
C. The Loan
is secured by, among other things, (i) a Security Agreement dated as of March
14, 2007 (as amended and modified from time to time, the “Security Agreement”),
executed by Borrower and Guarantor, as “debtor,” in favor of JPMORGAN CHASE BANK, N.A., a
national banking association, not in its individual capacity, but solely as
collateral agent (in such capacity, the “Collateral Agent”) for
Lender; (ii) a Pledge and Security Agreement dated as of March 14, 2007 (as
amended and modified from time to time, the “Pledge and Security Agreement”),
executed by Borrower, as “pledgor,” in favor of Collateral Agent; and (iii) an
Account Control Agreement dated as of March 14, 2007 (as amended and modified
from time to time, the “Account Control Agreement”),
executed by Borrower and Guarantor, as “debtor,” Collateral Agent, as
“creditor,” and Zions First National Bank, a national banking association, as
“bank” (collectively, the “Security
Documents”).
D. The Loan
Agreement, Note, Guaranty, Security Documents and all other agreements,
documents, and instruments governing, evidencing, securing, guaranteeing or
otherwise relating to the Loan, as modified in this Modification Agreement, are
sometimes referred to individually and collectively as the “Loan Documents.”
E. The
incurrence of a 100 million yen loan in December 2009 by Franklin Covey Japan, a
Subsidiary of Borrower and one of the Consolidated Entities (the “FC Japan Loan”), resulted in
an Event of Default under Section 7.1 of the Loan Agreement because the FC Japan
Loan, which when obtained equaled approximately $1,100,000, violated the
prohibition against the incurrence of additional Indebtedness by the
Consolidated Entities in excess of $1,000,000 in any individual case (generally,
the “FC Japan Loan
Default”). Borrower has informed Lender that the outstanding
balance of the FC Japan Loan (expressed in U.S. Dollars) as of the date hereof
is less than $1,000,000.
F. Subject
to the terms and conditions contained herein, Borrower and Lender now desire to
modify the Loan Documents to: (i) extend the maturity date of the Loan from
March 14, 2010 to March 14, 2011; (ii) modify the schedule pursuant to which the
Loan Amount will be reduced; (iii) modify the method by which the interest rate
applicable under the Loan Documents will be calculated; (iv) modify the funded
debt to EBITDAR ratio, the fixed charge coverage ratio, and the net worth
covenant as set forth herein; (v)
modify
the definition of “Obligations” and “Chase Obligations” under the Loan Agreement
and the Security Agreement, respectively; (vi) make such other modifications as
are set forth herein; and (vii) waive the FC Japan Loan Default.
AGREEMENT:
For good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Borrower, Guarantor and Lender agree as follows:
1. ACCURACY
OF RECITALS. Each of Borrower and each Guarantor acknowledges
the accuracy of the Recitals which are incorporated herein by
reference.
2. MODIFICATION
OF LOAN DOCUMENTS. The Loan Documents are modified as
follows:
(a) Loan Amount
Reductions.
(1) Loan
Agreement. The definition of “Loan Amount” set forth in
Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety
to read as follows:
“Loan Amount” means, effective
as of November 30, 2009, the amount of up to THIRTEEN MILLION FIVE HUNDRED
THOUSAND AND NO/100 DOLLARS ($13,500,000.00), plus any sum in addition thereto
advanced by Lender in its sole and absolute discretion in accordance with the
Loan Documents, to be disbursed pursuant to the terms and conditions of this
Agreement; provided,
however, that such amount shall be reduced effective as of December 31,
2010 to the amount of TEN MILLION AND NO/100 DOLLARS
($10,000,000.00).
(2) Note. The
reference in Section 1 of the Note to “TWENTY-FIVE MILLION AND NO/100 DOLLARS
($25,000,000.00)” has previously been amended so that, effective as of November
30, 2009, such amount is THIRTEEN MILLION FIVE HUNDRED THOUSAND AND NO/100
DOLLARS ($13,500,000.00). Section 1 of the Note is hereby further
amended to provide that the amount of such reference shall be reduced effective
as of December 31, 2010 to TEN MILLION AND NO/100 DOLLARS
($10,000,000.00).
(b) Maturity Date
Extension.
(1) Loan
Agreement. The definition of “Maturity Date” set forth in
Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety
to read as follows:
“Maturity Date” means March 14,
2011.
(2) Note. The
definition of “Maturity Date” set forth in Section 2 of the Note is hereby
amended and restated in its entirety to read as follows:
“Maturity Date” has the meaning
given to such term in the Loan Agreement.
(c) Interest Rate
Calculations.
(1) Amended Definition of
Interest Rate. The definition of “Interest Rate” set forth in
Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety
to read as follows:
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“Interest Rate” means a
variable rate equal to the LIBO Rate in effect from time to time plus the
applicable Interest Rate Margin in effect from time to time.
(2) New Definition of Interest
Rate Margin. Section 1.1 of the Loan Agreement is hereby
amended by adding the following new definition of “Interest Rate
Margin”:
“Interest Rate Margin” means a
per annum margin expressed in basis points calculated in accordance with the
following table:
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Pricing
Level
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Funded Debt to
EBITDAR Ratio
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Fixed Charge
Coverage Ratio
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Interest Rate
Margin
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1
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Greater
than
or
equal to
2.50
to 1.00
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OR
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Less
than
2.00
to 1.00
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350
bps
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2
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Less
than
2.50
to 1.00
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AND
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Greater
than
or
equal to
2.00
to 1.00
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260
bps
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(d) Financial
Covenants.
(1) Funded Debt to EBITDAR
Ratio. Section 6.8(a) of the Loan Agreement is hereby amended
and restated in its entirety to read as follows:
(a) Funded Debt to EBITDAR
Ratio. Permit its ratio of (A) total liabilities, plus the net
present value of payments under operating leases at a discount rate of seven
percent (7%), but excluding (1) accounts arising from the purchase of goods and
services in the ordinary course of business, (2) accrued expenses or losses, and
(3) deferred revenues or gains, to (B) net income, plus amortization expense,
depreciation expense, interest expense, income tax expense, and rents and
operating lease payments, less extraordinary gains and losses (collectively,
“EBITDAR”), for the
twelve (12) month period then ending, to be greater than (x) 3.75 to 1.00 as of
the end of the fiscal quarter of Borrower ending on February 28, 2010, (y) 3.50
to 1.00 as of the end of the fiscal quarter of Borrower ending on May 29, 2010,
and (z) 3.00 to 1.00 as of the end of the fiscal quarter of Borrower ending on
August 31, 2010 and each fiscal quarter thereafter.
Notwithstanding
the foregoing, clause (B) of the definition of EBITDAR shall be revised as
follows for the specified periods to permit Borrower to add the following
amounts to the calculation of EBITDAR (in each case to the extent actually
incurred): (i) for the twelve (12) month period ending on February 28, 2010, up
to $3,569,000 of non-recurring impairment costs related to the sale of
Borrower’s Consumer Solutions Business Unit and up to $6,325,000 of
non-recurring restructuring, severance and other costs; and (ii) for the twelve
(12) month period ending on May 29, 2010, up to $3,569,000 of non-recurring
impairment costs related to the sale of Borrower’s Consumer Solutions Business
Unit and up to $4,045,000 non-recurring restructuring, severance and other
costs.
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(2) Fixed Charge Coverage
Ratio. Section 6.8(b) of the Loan Agreement is hereby amended
to provide that the fixed charge coverage ratio described therein shall not be
less than 1.50 to 1.00 as of the end of the fiscal quarter of Borrower ending on
February 28, 2010 and each fiscal quarter thereafter.
(3) Minimum Net Worth
Covenant. Section 6.8(d) of the Loan Agreement is hereby
amended and restated in its entirety to read as follows:
(d) Minimum Net
Worth. Permit its Net Worth to be less than SIXTY-SEVEN
MILLION AND NO/100 DOLLARS ($67,000,000.00). As used in this Section 6.8(d), the term
“Net Worth” means the
Consolidated Entities’ total assets less total
liabilities, in each case as determined in accordance with GAAP.
(e) Secured
Obligations.
(1) Loan
Agreement. The definition of “Obligations” set forth in
Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety
to read as follows:
“Obligations” means all
obligations, indebtedness and liabilities of Borrower, whether individual, joint
and several, absolute or contingent, direct or indirect, liquidated or
unliquidated, now or hereafter existing, in favor of Lender, including without
limitation, all liabilities, all interest, costs and fees arising under or from
the Loan Documents or any other note, open account, overdraft, letter of credit
application, endorsement, surety agreement, guaranty, credit card, lease, Rate
Management Transaction, acceptance, foreign exchange contract or depository
service contract, whether payable to Lender or to a third party and subsequently
acquired by Lender, any monetary obligations (including interest) incurred or
accrued during the pendency of any bankruptcy, insolvency, receivership or other
similar proceedings, regardless of whether allowed or allowable in such
proceeding, and all renewals, extensions, modifications, consolidations,
rearrangements, restatements, replacements or substitutions of any of the
foregoing. “Rate
Management Transaction” means any transaction (including an agreement
with respect thereto) evidenced by a Swap Agreement or that is a rate swap,
basis swap, forward rate transaction, commodity swap, commodity option, equity
or equity index swap, equity or equity index option, bond option, interest rate
option, foreign exchange transaction, cap transaction, floor transaction, collar
transaction, forward transaction, currency swap transaction, cross-currency rate
swap transaction, currency option, derivative transaction or any other similar
transaction (including any option with respect to any of these transactions) or
any combination thereof, whether linked to one or more interest rates, foreign
currencies, commodity prices, equity prices or other financial measures.
Borrower and Lender specifically contemplate that the Obligations include
indebtedness or other obligations hereafter incurred by Borrower to
Lender.
(2) Security
Agreement. The definition of “Chase Obligations” set forth in
Section 2 of the Note is hereby amended and restated in its entirety to read as
follows:
“Chase Obligations” means all
obligations, indebtedness and liabilities of Borrower or Guarantor, whether
individual, joint and several, absolute or contingent, direct or indirect,
liquidated or unliquidated, now or hereafter
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existing,
in favor of Lender, including without limitation, all liabilities, all interest,
costs and fees arising under or from the Loan Documents or any other note, open
account, overdraft, letter of credit application, endorsement, surety agreement,
guaranty, credit card, lease, Rate Management Transaction, acceptance, foreign
exchange contract or depository service contract, whether payable to Lender or
to a third party and subsequently acquired by Lender, any monetary obligations
(including interest) incurred or accrued during the pendency of any bankruptcy,
insolvency, receivership or other similar proceedings, regardless of whether
allowed or allowable in such proceeding, and all renewals, extensions,
modifications, consolidations, rearrangements, restatements, replacements or
substitutions of any of the foregoing. “Rate Management Transaction”
means any transaction (including an agreement with respect thereto) evidenced by
a Swap Agreement or that is a rate swap, basis swap, forward rate transaction,
commodity swap, commodity option, equity or equity index swap, equity or equity
index option, bond option, interest rate option, foreign exchange transaction,
cap transaction, floor transaction, collar transaction, forward transaction,
currency swap transaction, cross-currency rate swap transaction, currency
option, derivative transaction or any other similar transaction (including any
option with respect to any of these transactions) or any combination thereof,
whether linked to one or more interest rates, foreign currencies, commodity
prices, equity prices or other financial measures. Each of Borrower, Guarantor
and Lender specifically contemplate that the Chase Obligations include
indebtedness or other obligations hereafter incurred by Borrower or any
Guarantor to Lender.
(f) Conforming
Modifications. Each of the Loan Documents is modified to be
consistent herewith and to provide that it shall be a default or an Event of
Default thereunder if Borrower shall fail to comply with any of the covenants of
Borrower herein or if any representation or warranty by Borrower herein or by
any guarantor in any related Consent and Agreement of Guarantor(s) is materially
incomplete, incorrect, or misleading as of the date hereof. In order
to further effect certain of the foregoing modifications, Borrower and Guarantor
agree to execute and deliver such other documents or instruments as Lender
reasonably determines are necessary or desirable.
(g) References. Each
reference in the Loan Documents to any of the Loan Documents shall be a
reference to such document as modified herein or as modified on or about the
date hereof.
(h) Allonge to
Note. An original of this Modification Agreement may be
attached to the original Note as an allonge and made a part of the Note, provided, however, that
failure to attach an original of this Modification Agreement as an allonge to
the Note shall not impact the effectiveness of this Modification Agreement and
this Modification Agreement shall nonetheless be valid, binding and
enforceable.
3. WAIVER OF
FC JAPAN LOAN DEFAULT. Lender hereby waives the FC Japan Loan
Default. Notwithstanding the foregoing waiver, strict compliance with
the underlying covenant which was breached shall be required at all times
hereafter. Borrower represents and warrants to Lender that the
outstanding balance of the FC Japan Loan (expressed in U.S. Dollars) as of the
date hereof is less than $1,000,000.
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4. RATIFICATION
OF LOAN DOCUMENTS AND COLLATERAL. The Loan Documents are
ratified and affirmed by Borrower and shall remain in full force and effect as
modified herein. Any property or rights to or interests in property
granted as security in the Loan Documents shall remain as security for the Loan
and the obligations of Borrower in the Loan Documents. The waivers
set forth herein, if any, shall be limited precisely as written and shall not be
deemed, except as expressly set forth herein, (i) to be a consent to any
modification or waiver of any other terms or conditions of any of the Loan
Documents; (ii) to prejudice any right, remedy, power or privilege which Lender
now has or may have in the future under or in connection with the Loan
Documents; or (iii) to be construed as a commitment on the part of Lender to
waive any subsequent violation of the same or any other term or condition set
forth in the Loan Documents.
5. FEES AND
EXPENSES.
(a) Fees and
Expenses. In consideration of Lender’s agreement to amend the
Loan Documents as set forth herein, and in addition to any other fees or amounts
payable by Borrower hereunder, Borrower has agreed to pay to Lender (i) all
legal fees and expenses incurred by Lender in connection herewith; and (ii) all
other costs and expenses incurred by Lender in connection with executing this
Modification Agreement and otherwise modifying the Loan
Documents. Borrower acknowledges and agrees that such fees are fully
earned and nonrefundable as of the date this Modification Agreement is executed
and delivered by the parties hereto.
(b) Method of
Payment. Such fees shall be paid by Borrower to Lender on the
date hereof or at such later date as such fees, costs and expenses are incurred
by Lender. Borrower and Lender agree and acknowledge that the
foregoing shall not relieve Borrower of its obligation to make future monthly
payments of interest and other amounts as required under the terms of the
Loan.
6. BORROWER
REPRESENTATIONS AND WARRANTIES. Each of Borrower and Guarantor
represents and warrants to Lender: (a) No default or event of default
under any of the Loan Documents as modified herein, nor any event, that, with
the giving of notice or the passage of time or both, would be a default or an
event of default under the Loan Documents as modified herein has occurred and is
continuing; (b) There has been no material adverse change in the financial
condition of Borrower or Guarantor or any other person whose financial statement
has been delivered to Lender in connection with the Loan from the most recent
financial statement received by Lender; (c) Each and all representations and
warranties of Borrower and Guarantor in the Loan Documents are accurate on the
date hereof; (d) Neither Borrower nor Guarantor has any claims, counterclaims,
defenses, or set-offs with respect to the Loan or the Loan Documents as modified
herein; (e) The Loan Documents as modified herein are the legal, valid, and
binding obligation of Borrower and Guarantor, enforceable against Borrower and
Guarantor in accordance with their terms; (f) Each of Borrower and each
Guarantor is validly existing under the laws of the State of its formation or
organization, has not changed its legal name as set forth above, and has the
requisite power and authority to execute and deliver this Modification Agreement
and to perform the Loan Documents as modified herein; (g) The execution and
delivery of this Modification Agreement and the performance of the Loan
Documents as modified herein have been duly authorized by all requisite action
by or on behalf of Borrower and Guarantor; and (h) This Modification Agreement
has been duly executed and delivered on behalf of Borrower and
Guarantor.
7. BORROWER
AND GUARANTOR COVENANTS. Each of Borrower and Guarantor
covenants with Lender:
(a) Each of
Borrower and Guarantor shall execute, deliver, and provide to Lender such
additional agreements, documents, and instruments as reasonably required by
Lender to effectuate the intent of this Modification Agreement.
(b) Each of
Borrower and Guarantor fully, finally, and forever releases and discharges
Lender and its successors, assigns, directors, officers, employees, agents, and
representatives from
6
any and
all actions, causes of action, claims, debts, demands, liabilities, obligations,
and suits, of whatever kind or nature, in law or equity, that either Borrower or
Guarantor has or in the future may have, whether known or unknown, (i) in
respect of the Loan, the Loan Documents, or the actions or omissions of Lender
in respect of the Loan or the Loan Documents and (ii) arising from events
occurring prior to the date of this Modification Agreement.
(c) Contemporaneously
with the execution and delivery of this Modification Agreement, Borrower has
paid to Lender all of the internal and external costs and expenses incurred by
Lender in connection with this Modification Agreement (including, without
limitation, inside and outside attorneys, appraisal, appraisal review,
processing, title, filing, and recording costs, expenses, and
fees).
(d) On or
prior to the execution and delivery of this Modification Agreement, each of
Borrower and Guarantor shall have executed and delivered, or caused to be
executed and delivered, to Lender, each in form and substance satisfactory to
Lender, such other documents, instruments, resolutions, subordinations, and
other agreements as Lender may require in its sole discretion.
8. EXECUTION
AND DELIVERY OF AGREEMENT BY LENDER. Lender shall not be bound
by this Modification Agreement until (a) Lender has executed and delivered this
Modification Agreement to Borrower and Guarantor, (b) each of Borrower and
Guarantor has performed all of the obligations of Borrower and Guarantor under
this Modification Agreement to be performed contemporaneously with the execution
and delivery of this Modification Agreement, if any, and (c) Borrower has paid
all fees and costs required under Section 5 hereof.
9. INTEGRATION,
ENTIRE AGREEMENT, CHANGE, DISCHARGE, TERMINATION, OR
WAIVER. The Loan Documents as modified herein contain the
complete understanding and agreement of Borrower, Guarantor and Lender in
respect of the Loan and supersede all prior representations, warranties,
agreements, arrangements, understandings, and negotiations. No
provision of the Loan Documents as modified herein may be changed, discharged,
supplemented, terminated, or waived except in a writing signed by the parties
thereto.
10. BINDING
EFFECT. The Loan Documents, as modified herein, shall be
binding upon and shall inure to the benefit of Borrower, Guarantor and Lender
and their successors and assigns; provided, however, neither
Borrower nor Guarantor may assign any of its rights or delegate any of its
obligations under the Loan Documents and any purported assignment or delegation
shall be void.
11. CHOICE OF
LAW. THIS MODIFICATION AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF UTAH WITHOUT GIVING EFFECT TO CONFLICT OF LAWS
PRINCIPLES. THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING
IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED
AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF SALT
LAKE, STATE OF UTAH OR, AT THE SOLE OPTION OF LENDER, IN ANY OTHER COURT IN
WHICH LENDER SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT
MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY. EACH OF THE
PARTIES WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY
HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE
EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION.
7
12. COUNTERPART
EXECUTION. This Modification Agreement may be executed in one
or more counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same document. Signature pages
may be detached from the counterparts and attached to a single copy of this
Modification Agreement to physically form one document. Receipt by the Lender of
an executed copy of this Modification Agreement by facsimile shall constitute
conclusive evidence of execution and delivery of the Modification by the
signatory thereto.
[Remainder
of Page Intentionally Left Blank]
8
DATED as
of the date first above stated.
|
FRANKLIN
COVEY CO.
a
Utah corporation
|
|
|
By:
|
/s/
Stephen D. Young
|
|
Name:
|
Stephen
D. Young
|
|
Title:
|
Chief
Financial Officer
|
|
“Borrower”
|
|
|
FRANKLIN
DEVELOPMENT CORPORATION
a
Utah corporation
|
|
|
By:
|
/s/
Stephen D. Young
|
|
Name:
|
Stephen
D. Young
|
|
Title:
|
Vice
President
|
|
FRANKLIN
COVEY TRAVEL, INC.
a
Utah corporation
|
|
|
By:
|
/s/
Stephen D. Young
|
|
Name:
|
Stephen
D. Young
|
|
Title:
|
Vice
President
|
|
FRANKLIN
COVEY CLIENT SALES, INC.
a
Utah corporation
|
|
|
By:
|
/s/
Stephen D. Young
|
|
Name:
|
Stephen
D. Young
|
|
Title:
|
Vice
President
|
|
“Guarantor”
|
|
|
JPMORGAN
CHASE BANK, N.A.
a
national banking association
|
|
|
By:
|
/s/
Tony C. Nielsen
|
|
Name:
|
Tony
C. Nielsen
|
|
Title:
|
Senior
Vice President
|
|
“Lender”
|
|