Exhibit
10.28


 


	
  Promissory
  Note

  	
  Collateral
  Schedule 13

  



 


 


PROMISSORY NOTE


To Master Security
Agreement No. 4081063


December 30,
2005


(Date)


 


FOR VALUE
RECEIVED, Favrille, Inc., a  Delaware
corporation, located at the address stated below (“Maker”)
promises, jointly and severally if more than one, to pay to the order of Oxford Finance Corporation or any subsequent holder hereof
(each, a “Payee”) at its office located at 133 N. Fairfax Street, Alexandria, VA 22314 or at such other
place as Payee or the holder hereof may designate, the principal sum of One
Million Four Hundred Ninety Eight Thousand Six Hundred Seventy Seven Dollars
and Twenty Seven Cents($1,498,677.27), with interest on the unpaid principal
balance, from the date hereof through and including the dates of payment, at a
fixed interest rate of ten and eighty-nine hundredths percent (10.89%) per
annum, in twenty-four (24) consecutive monthly installments of principal and
interest as follows:


 


	
  Periodic

  Installment

  	
   

  	
  Amount

  	
   

  
	
  1-24

  	
   

  	
  $

  	
  69,773.59

  	
   

  
					



 


each (“Periodic Installment”) and a
final installment which shall be in the amount of the total outstanding
principal and interest.  The first
Periodic Installment shall be due and payable on or before  February 1, 2006 and the following Periodic
Installments shall be due and payable on the first day of each succeeding month
(each, a “Payment Date”) beginning March 1, 2006.  Such installments have been calculated on the
basis of a 360-day year of twelve 30-day months.  Each payment may, at the option of the Payee,
be calculated and applied on an assumption that such payment would be made on
its due date. Maker agrees to pay any initial partial month interest payment
from the date of this Note to the first day of the following month (“Interim
Interest”).


 


The acceptance by
Payee of any payment which is less than payment in full of all amounts due and
owing at such time shall not constitute a waiver of Payee’s right to receive
payment in full at such time or at any prior or subsequent time.


 


The Maker hereby expressly authorizes the Payee to
insert the date value is actually given in the blank space on the face hereof
and on all related documents pertaining hereto.


 


This Note may be
secured by a security agreement, chattel mortgage, pledge agreement or like
instrument (each of which is hereinafter called a “Security
Agreement” and any Security Agreement, this Note and any other document
evidencing or securing this loan is hereinafter called a “Debt Document”).


 


Time is of the essence hereof.  If any installment or any other sum due under
this Note or any Security Agreement is not received within 7 days of when due,
the Maker agrees to pay, in addition to the amount of each such installment or
other sum, a late payment charge of five percent (5%) of the amount of said installment
or other sum, but not exceeding any lawful maximum.  If (i) Maker fails to make payment of any
amount due hereunder within 7 days after the same becomes due and payable;
or  (ii) Maker is in default under, or
fails to perform under any term or condition contained in any Security
Agreement and such default or failure to perform is not cured within the
applicable cure period, if any, then the entire principal sum remaining unpaid,
together with all accrued interest thereon and any other sum payable under this
Note or any Security Agreement, at the election of Payee, shall immediately
become due and payable, with interest thereon at the lesser of eighteen percent
(18%) per annum or the highest rate not prohibited by applicable law from the
date of such accelerated maturity until paid (both before and after any
judgment).


 


Maker may prepay in full any indebtedness hereunder upon five (5) days’
notice to the Payee. The prepayment shall be accompanied by payment of (i) all
accrued and unpaid interest on the outstanding principal balance of this Note
on the date of prepayment and (ii) a premium of 6% of the principal prepaid if
such prepayment shall occur in Year 1, a premium of 4% of the principal prepaid
if such prepayment shall occur in Year 2 and a premium of 2% of the principal
prepaid if such prepayment shall occur in Year 3 and thereafter. Year 1 will
mean the period consisting of the 1st through the 12th installments under this
Note and subsequent years will refer to the subsequent twelve monthly payment
periods.


 


The Maker and all sureties, endorsers, guarantors or
any others (each such person, other than the Maker, an “Obligor”)
who may at any time become liable for the payment hereof jointly and severally
consent hereby to any and all extensions of time, renewals, waivers or
modifications of, and all substitutions or releases of, security or of any
party primarily or secondarily liable on this Note or any Security Agreement or
any term and provision of either, which may be made, granted or consented to by
Payee, and agree that suit may be brought and maintained against any one or
more of them, at the election of Payee without joinder of any other as a party
thereto, and that Payee shall not be required first to foreclose, proceed
against, or exhaust any security hereof in order to enforce payment of this
Note.  The Maker and each Obligor hereby
waives presentment, demand for payment, notice of nonpayment, protest, notice
of protest, notice of dishonor,


 


1

















 


and all other notices in connection herewith, as well
as filing of suit (if permitted by law) and diligence in collecting this Note
or enforcing any of the security hereof, and agrees to pay (if and to the
extent permitted by law) all expenses incurred in collection, including Payee’s
reasonable attorneys’ fees.


 


Maker and Payee intend to strictly comply with all
applicable federal and Virginia laws, including applicable usury laws (or the
usury laws of any jurisdiction whose usury laws are deemed to apply to the Note
or any other Debt Document despite the intention and desire of the parties to
apply the usury laws of the Commonwealth of Virginia).  Accordingly, the provisions of this paragraph
shall govern and control over every other provision of this Note or any other
Debt Document which conflicts or is inconsistent with this Section, even if
such provision declares that it controls. 
As used in this paragraph, the term “interest”
includes the aggregate of all charges, fees, benefits or other compensation
which constitute interest under applicable law, provided that, to the
maximum extent permitted by applicable law, (a) any non-principal payment shall
be characterized as an expense or as compensation for something other than the
use, forbearance or detention of money and not as interest, and (b) all
interest at any time contracted for, reserved, charged or received shall be
amortized, prorated, allocated and spread, in equal parts during the full term
of the obligations.  In no event shall
Maker or any other person be obligated to pay, or Payee have any right or
privilege to reserve, receive or retain, (a) any interest in excess of the
maximum amount of non-usurious interest permitted under the laws of the
Commonwealth of Virginia or the applicable laws (if any) of the United States
or of any other state, or (b) total interest in excess of the amount which
Payee could lawfully have contracted for, reserved, received, retained or
charged had the interest been calculated for the full term of the obligations.  On each day, if any, that the interest rate
(the “Stated Rate”) called for under this Note or any other Debt
Document exceeds the maximum non-usurious rate, the rate at which interest
shall accrue shall automatically be fixed by operation of this sentence at the
maximum non-usurious rate for that day. 
Thereafter, interest shall accrue at the Stated Rate unless and until
the Stated Rate again exceeds the maximum non-usurious rate, in which case, the
provisions of the immediately preceding sentence shall again automatically
operate to limit the interest accrual rate to the maximum non-usurious
rate.  The daily interest rates to be
used in calculating interest at the maximum non-usurious rate shall be
determined by dividing the applicable maximum non-usurious rate by the number
of days in the calendar year for which such calculation is being made.  None of the terms and provisions contained in
this Note or in any other Debt Document which directly or indirectly relate to
interest shall ever be construed without reference to this paragraph, or be
construed to create a contract to pay for the use, forbearance or detention of
money at an interest rate in excess of the maximum non-usurious rate.  If the term of any obligation is shortened by
reason of acceleration of maturity as a result of any  default or by any other cause, or by reason
of any required or permitted prepayment, and if for that (or any other) reason
Payee at any time, including but not limited to, the stated maturity, is owed
or receives (and/or has received) interest in excess of interest calculated at
the maximum non-usurious rate, then and in any such event all of any such
excess interest shall be canceled automatically as of the date of such
acceleration, prepayment or other event which produces the excess, and, if such
excess interest has been paid to Payee, it shall be credited pro tanto
against the then-outstanding principal balance of Maker’s obligations to Payee,
effective as of the date or dates when the event occurs which causes it to be excess
interest, until such excess is exhausted or all of such principal has been
fully paid and satisfied, whichever occurs first, and any remaining balance of
such excess shall be promptly refunded to its payor.


 


THE MAKER HEREBY UNCONDITIONALLY WAIVES ITS RIGHTS
TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF,
DIRECTLY OR INDIRECTLY, THIS NOTE, ANY OF THE RELATED DOCUMENTS, ANY DEALINGS
BETWEEN MAKER AND PAYEE RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION OR
ANY RELATED TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED
BETWEEN MAKER AND PAYEE.  THE SCOPE OF
THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY
BE FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY
CLAIMS.)  THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS NOTE, ANY RELATED DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR
AGREEMENTS RELATING TO THIS TRANSACTION OR ANY RELATED TRANSACTION.  IN THE EVENT OF LITIGATION, THIS NOTE MAY BE
FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.


 


This Note and any Security Agreement constitute the
entire agreement of the Maker and Payee with respect to the subject matter
hereof and supersedes all prior understandings, agreements and representations,
express or implied.


 


No variation or modification of this Note, or any
waiver of any of its provisions or conditions, shall be valid unless in writing
and signed by an authorized representative of Maker and Payee.  Any such waiver, consent, modification or
change shall be effective only in the specific instance and for the specific
purpose given.


 


Any provision in this Note or any Security Agreement
which is in conflict with any statute, law or applicable rule shall be deemed
omitted, modified or altered to conform thereto.


 


Upon receipt of an
affidavit of an officer of Payee as to the loss, theft, destruction or
mutilation of this Note or any Debt Document which is not of public record,
and, in the case of any such loss, theft, destruction or mutilation, upon
surrender and cancellation of such Note or other Debt Document, Maker will
issue, in lieu thereof, a replacement Note or other Debt Document in the same
principal amount thereof and otherwise of like tenor.


 


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It is understood
and agreed that this Note and all of the Debt Documents were negotiated and
have been or will be delivered to Payee in the Commonwealth of Virginia, which
State the parties agree has a substantial relationship to the parties and to
the underlying transactions embodied by this Note and the Debt Documents. Maker
agrees to furnish to Payee at Payee’s office in Alexandria, VA, all further
instruments, certifications and documents to be furnished hereunder.    The parties also agree that if collateral
is pledged to secure the debt evidenced by this Note, that the state or states
in which such collateral is located each have a substantial relationship to the
parties and to the underlying transaction embodied by this Note and the Debt
Documents.


 


MAKER AGREES THAT THE PAYEE OF THIS NOTE SHALL HAVE
THE OPTION BY WHICH STATE LAWS THIS NOTE SHALL BE GOVERNED AND CONSTRUED: (A)
THE LAWS OF THE COMMONWEALTH OF VIRGINIA; OR (B) IF COLLATERAL HAS BEEN PLEDGED
TO SECURE THE DEBT EVIDENCED BY THIS NOTE, THEN BY THE LAWS OF THE STATE OR
STATES WHERE THE COLLATERAL IS LOCATED, AT PAYEE’S OPTION.  THIS CHOICE OF STATE LAWS IS EXCLUSIVE TO THE
PAYEE OF THIS NOTE.  MAKER SHALL NOT HAVE
ANY OPTION TO CHOOSE THE LAWS BY WHICH THIS NOTE SHALL BE GOVERNED.  MAKER AND GUARANTORS HEREBY CONSENT TO THE
EXERCISE OF JURISDICTION OVER IT BY ANY FEDERAL COURT SITTING IN VIRGINIA OR
ANY VIRGINIA COURT SELECTED BY PAYEE, FOR THE PURPOSES OF ANY AND ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THE NOTE, THE LOAN AGREEMENT AND ALL
OTHER DOCUMENTS.  MAKER AND GUARANTORS IRREVOCABLY
WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH PROCEEDING BROUGHT IN ANY
SUCH COURT, ANY CLAIM BASED ON THE CONSOLIDATION OF PROCEEDINGS IN SUCH COURTS
IN WHICH PROPER VENUE MAY LIE IN DIVERGENT JURISDICTIONS, AND ANY CLAIM THAT
ANY SUCH PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.  MAKER AND GUARANTORS
HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT
TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
NOTE, THE OTHER DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY.


 


	
   

  
	
   

  	
  Favrille, Inc.

  
	
   

  	
   

  
	
  /s/ Michele Owen

  	
   

  	
  By:

  	
  /s/ Tamara A. Seymour

  	
   

  
	
  (Witness)

  	
   

  
	
  Michele Owen

  	
   

  	
  Name:

  	
  Tamara A. Seymour

  	
   

  
	
  (Print name)

  	
   

  
	
  10421 Pacific Center Court San Diego, CA 92121

  	
   

  	
  Title:

  	
  CFO

  	
   

  
	
  (Address)

  	
   

  
	
   

  	
  Federal Tax ID
  #:

  	
  33-0892797

  	
   

  
	
   

  	
   

  
	
   

  	
  Address: 10421 Pacific
  Center Court

  
	
   

  	
   

  	
  San Diego, CA 92121

  
	
   

  	
   

  
													



 


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