Exhibit 10.24


 


MASTER
SECURITY AGREEMENT


Dated as of December 30, 2005  (“Agreement”)


 


THIS AGREEMENT is between General Electric Capital Corporation (together with its successors and assigns, if any, “Secured Party”) and Favrille, Inc. (“Debtor”). Secured Party has an office at 83
Wooster Heights Road, 5th Floor, Danbury, CT 
06810. Debtor is a corporation
organized and existing under the laws of the state of Delaware. Debtor’s
mailing address and chief place of business is 10421 Pacific Center Court, San Diego,
CA 92121.


 


1.                                   CREATION OF SECURITY
INTEREST.


 


Debtor grants to Secured Party, its successors and assigns, a security
interest in and against all property listed on any collateral schedule now
or in the future annexed to or made a part of this Agreement (“Collateral Schedule”), and in and against
all additions, attachments, accessories and accessions to such property, all
substitutions, replacements or exchanges therefore, and all insurance and/or
other proceeds thereof (all such property is individually and collectively
called the “Collateral”). This
security interest is given to secure the payment and performance of all debts,
obligations and liabilities of any kind whatsoever of Debtor to Secured Party,
now existing or arising in the future under or in connection with this
Agreement, including but not limited to the payment and performance of certain
Promissory Notes from time to time identified on any Collateral Schedule (collectively
“Notes” and each a “Note”), and any renewals, extensions and
modifications of such debts, obligations and liabilities (such Notes, debts,
obligations and liabilities are called the “Indebtedness”).
Debtor acknowledges that, Secured Party shall be under no obligation to release
the Collateral unless and until all Indebtedness of Debtor to Secured Party has
been paid and satisfied; provided, however, Secured Party, in its sole and
exclusive discretion, may elect to release some of the Collateral without
prejudice to Secured Party’s security interest in the remaining Collateral.
Unless otherwise provided by applicable law, notwithstanding anything to the
contrary contained in this Agreement, to the extent that Secured Party asserts
a purchase money security interest in any items of Collateral (“PMSI Collateral”): (i) the PMSI
Collateral shall secure only that portion of the Indebtedness which has been
advanced by Secured Party to enable Debtor to purchase, or acquire rights in or
the use of such PMSI Collateral (the “PMSI
Indebtedness”), and (ii) no other Collateral shall secure the
PMSI Indebtedness. Upon the payment in full of all of the Indebtedness, and
termination of Secured Party’s commitment to lend hereunder, this Agreement
shall terminate and Secured Party shall, at the cost and expense of Debtor,
execute and deliver to Debtor all such documents and instruments as shall be
necessary to evidence termination of the security interests created hereunder.


 


2.                                   REPRESENTATIONS, WARRANTIES
AND COVENANTS OF DEBTOR.


 


Debtor represents, warrants
and covenants as of the date of this Agreement and as of the date of each
Collateral Schedule that:


 


(a)          Debtor’s exact legal name is as set forth in the preamble of this
Agreement and Debtor is, and will remain, duly organized, existing and in good
standing under the laws of the State set forth in the preamble of this
Agreement, has its chief executive offices at the location specified in the
preamble, and is, and will remain, duly qualified and licensed in every
jurisdiction wherever necessary to carry on its business and operations except
where the failure to do so could not reasonably be expected to have a material
adverse effect on Debtor’s financial condition, business or operations;


 


(b)         Debtor has adequate power and capacity to enter into, and to perform its
obligations under this Agreement, each Note and any other documents evidencing,
or given in connection with, any of the Indebtedness (all of the foregoing are
called the “Debt Documents”);


 


(c)          This Agreement and the other Debt Documents have been duly authorized,
executed and delivered by Debtor and constitute legal, valid and binding
agreements enforceable in accordance with their terms, except to the extent
that the enforcement of remedies may be limited under applicable
bankruptcy and insolvency laws or similar laws affecting creditors’ rights
generally and by general principles of equity;


 


(d)         No approval, consent or withholding of objections is required from any
governmental authority or instrumentality with respect to the entry into, or
performance by Debtor of any of the Debt Documents, except any already
obtained;


 


(e)          The entry into, and performance by, Debtor of the Debt Documents will
not (i) violate any of the organizational documents of Debtor or any
judgment, order, law or regulation applicable to Debtor, or (ii) result in
any breach of or constitute a default under any contract to which Debtor is a
party, or result in the creation of any lien, claim or encumbrance on any of
Debtor’s property (except for liens in favor of Secured Party) pursuant to any
indenture, mortgage, deed of trust, bank loan, credit agreement, or other
agreement or instrument to which Debtor is a party;


 


(f)     There are no suits or proceedings pending in court or before any
commission, board or other administrative agency against or affecting Debtor which
could, in the aggregate, have a material adverse effect on Debtor, its business
or operations, or its ability to perform its obligations under the Debt
Documents, nor does Debtor have reason to believe that any such suits or
proceedings are threatened;


 


(g)         All financial statements delivered to Secured Party in connection with
the Indebtedness have been prepared in accordance with generally accepted
accounting principles, and since the date of the most recent financial
statement, there has been no material adverse change in Debtors financial
condition;


 


	
   

  	
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(h)         The Collateral is not, and will not be, used by Debtor for personal,
family or household purposes;


 


(i)             The Collateral is, and will remain, in good
condition and repair, ordinary wear and tear excepted, and Debtor will not be
negligent in its care and use;


 


(j)             All of the tangible Collateral is located at
the locations set forth on each Collateral Schedule. Debtor shall give the
Secured Party 30 days prior written notice of any relocation of any Collateral;


 


(k)          Except for Permitted Liens and Permitted Transfers (as defined below),
Debtor is, and will remain, the sole and lawful owner, and in possession of,
the Collateral, and has the sole right and lawful authority to grant the
security interest described in this Agreement (for all purposes of this
Agreement, “Permitted Transfers” means (i) the disposal of worn-out or
obsolete Collateral,  (ii) transfers
to Secured Party, and (iii) transfers for maintenance and repair;


 


(l)             The Collateral is, and will remain, free and
clear of all liens, claims and encumbrances of any kind whatsoever, except
for  (i) liens in favor of Secured
Party,  (ii) liens for taxes not yet
due or for taxes being contested in good faith and which do not involve, in the
judgment of Secured Party, any risk of the sale, forfeiture or loss of any of
the Collateral, and  (iii) inchoate
material men’s, mechanic’s, repairmen’s and similar liens arising by operation
of law in the normal course of business for amounts which are not delinquent
(all of such liens are called  “Permitted Liens”).


 


(m)       All federal, state and local tax returns required to be filed by Debtor
have been filed with the appropriate governmental agencies and all taxes due
and payable by Debtor have been timely paid except as contested in good faith
and by appropriate proceedings and for which adequate reserves have been
established. Debtor will pay when due all taxes, assessments and other
liabilities except as contested in good faith and by appropriate proceedings
and for which adequate reserves have been established;


 


(n)         No event or condition exists under any material agreement, instrument or
document to which Debtor is a party or may be subject, or by which Debtor
or any of its properties are bound, which constitutes a default or an event of
default thereunder, or will, with the giving of notice, passage of time, or
both, would constitute a default or event of default thereunder;


 


(o)         All reports, certificates, schedules, notices and financial information
submitted by Debtor to the Secured Party pursuant to this Agreement shall be
certified as presented fairly in all material respects when made by the
president or chief financial officer of Debtor;


 


(p)   Debtor shall give the Secured Party prompt written
notice of any event, occurrence or other matter which has resulted or may
result in a material adverse change in its financial condition, which would
impair the ability of Debtor to perform its obligations hereunder or under any
of the other financing agreements to which it is a party or of Secured Party to
enforce the Indebtedness or realize upon the Collateral; and


 


(q)         Debtor has previously delivered to the Secured Party a certificate
signed by the Debtor and entitled “Perfection Certificate” (the “Perfection Certificate”). The Debtor
represents and warrants to the Secured Party as follows: (a) the Debtor’s
exact legal name is that indicated on the Perfection Certificate and on the
signature page hereof, (b) the Debtor is an organization of the type,
and is organized in the jurisdiction set forth in the Perfection Certificate, (c) the
Perfection Certificate accurately sets forth the Debtor’s organizational
identification number or accurately states that the Debtor has none, (d) the
Perfection Certificate accurately sets forth the Debtor’s place of business or,
if more than one, its chief executive office, as well as the Debtor’s mailing
address, if different, (e) all other information set forth on the Perfection
Certificate pertaining to the Debtor is accurate and complete, and (f) that
there has been no change in any information provided in the Perfection
Certificate since the date on which it was executed by the Debtor which Debtor
has not previously notified to Secured Party.


 


3.                                   COLLATERAL.


 


(a)          Until the declaration of any default, Debtor shall remain in possession
of the Collateral; except that Secured Party shall have the right to
possess  (i) any chattel paper or
instrument that constitutes a part of the Collateral, and  (ii) any other Collateral in which
Secured Party’s security interest may be perfected only by possession. Secured
Party may inspect any of the Collateral during normal business hours after
giving Debtor reasonable prior notice.


 


(b)         Debtor shall  (i) use the
Collateral only in its trade or business, 
(ii) maintain all of the Collateral in good operating order and
repair, normal wear and tear excepted,  (iii) use
and maintain the Collateral only in compliance with manufacturers recommendations
and all applicable laws, and  (iv) keep
all of the Collateral free and clear of all liens, claims and encumbrances
(except for Permitted Liens).


 


(c)          Secured Party does not authorize and Debtor agrees it shall not  (i) part with possession of any of
the Collateral (except to Secured Party or for maintenance and repair), (ii) remove
any of the Collateral from the continental United States, or  (iii) sell, rent, lease, mortgage,
license, grant a security interest in or otherwise transfer or encumber (except
for Permitted Liens and Permitted Transfers) any of the Collateral.


 


	
   

  	
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(d)         Debtor shall pay promptly when due all taxes, license fees, assessments
and public and private charges levied or assessed on any of the Collateral, on
its use, or on this Agreement or any of the other Debt Documents except as
contested in good faith and by appropriate proceedings and for which adequate
reserves have been established. If Debtor fails, after 10 days, to discharge
taxes, liens, security interests or other encumbrances at any time levied or
placed on the Collateral or to otherwise effect compliance with the terms of
this Agreement or any of the other Debt Documents, at  its option, Secured Party may do so. Debtor
agrees to reimburse Secured Party, on demand, all reasonable costs and expenses
incurred by Secured Party in connection with such payment or performance and
agrees that such reimbursement obligation shall constitute Indebtedness.


 


(e)          Debtor shall, at all times, keep accurate and complete records of the
Collateral, and Secured Party shall have the right to inspect and make copies
of all of Debtor’s books and records relating to the Collateral during normal
business hours, after giving Debtor reasonable prior notice.


 


(f)     Debtor agrees and acknowledges that any third person who may at any
time possess all or any portion of the Collateral shall be deemed to hold, and
shall hold, the Collateral as the agent of, and as pledge holder for, Secured
Party. Secured Party may at any time give notice to any third person
described in the preceding sentence that such third person is holding the
Collateral as the agent of, and as pledge holder for, the Secured Party.


 


4.                                   INSURANCE.


 


(a)          Debtor shall at all times bear the entire risk of any loss, theft,
damage to, or destruction of, any of the Collateral from any cause whatsoever.


 


(b)   Debtor agrees to keep the Collateral insured
against loss or damage by fire and extended coverage perils, theft, burglary,
and for any or all Collateral, which are vehicles, for risk of loss by
collision, and if requested by Secured Party, against such other risks as
Secured Party may reasonably require. The insurance coverage shall be in an
amount no less than the full replacement value of the Collateral, and
deductible amounts, insurers and policies shall be reasonably acceptable to
Secured Party. Debtor shall deliver to Secured Party policies or certificates
of insurance evidencing such coverage. Each policy shall name Secured Party as
a loss payee, shall provide for coverage to Secured Party regardless of the
breach by Debtor of any warranty or representation made therein, shall not be
subject to co-insurance, and shall provide that coverage may not be canceled or
materially altered by the insurer except upon thirty (30) days prior written
notice to Secured Party. Debtor appoints Secured Party as its attorney-in-fact
to make proof of loss, claim for insurance and adjustments with insurers, and
to receive payment of and execute or endorse all documents, checks or drafts in
connection with insurance payments. Secured Party shall not act as Debtor’s
attorney-in-fact unless Debtor is in default. Proceeds of insurance shall be
applied, at the option of Secured Party if a default has occurred and is
continuing, to repair or replace the Collateral or to reduce any of the
Indebtedness. If a default has not occurred and is continuing, proceeds of
insurance shall be paid to Debtor.


 


5.                                   REPORTS.


 


(a)          Debtor shall promptly notify Secured Party of  (i) any change in the name of
Debtor,  (ii) any change in the
state of its incorporation or registration, 
(iii) any relocation of its chief executive offices,  (iv) any of the Collateral being lost,
stolen, missing, destroyed, materially damaged or worn out, or (v) any
lien, claim or encumbrance other than Permitted Liens attaching to or being
made against any of the Collateral.


 


(b)         Debtor will deliver to Secured Party within one hundred and twenty (120)
days of the close of each fiscal year of Debtor, Debtor’s complete financial
statements including a balance sheet, income statement, statement of
shareholders’ equity and statement
of cash flows, each prepared in accordance with generally accepted accounting
principles consistently applied, audited by a recognized firm of certified
public accountants reasonably satisfactory to Secured Party. Debtor will
deliver to Secured Party copies of all Forms 10-K and 10-Q, if any, within 30
days after the dates on which they are filed with the Securities and Exchange Commission.
As long as Debtor is privately owned and has no obligation to file its financial statements with the SEC, Debtor will
deliver to Secured Party copies of Debtor’s monthly financial statements
including a balance sheet, income statement and statement of cash flows, each prepared by Debtor in accordance with generally accepted accounting
principles consistently applied by Debtor and certified by Debtor’s chief financial officer, within forty-five
(45) days after the close of each month. Debtor will deliver to Secured Party
promptly upon request of Secured Party, in form satisfactory to Secured
Party, such other and additional information as Secured Party may reasonably
request from time to time.


 


6.                                   FURTHER ASSURANCES.


 


(a)          Debtor shall, upon request of Secured Party, furnish to Secured Party
such further information, execute and deliver to Secured Party such documents
and instruments (including, without limitation, Uniform Commercial Code
financing statements) and shall do such other acts and things as Secured Party may at
any time reasonably request relating to the perfection or protection of the
security interest created by this Agreement or for the purpose of carrying out
the intent of this Agreement. Without limiting the foregoing, Debtor shall cooperate
and do all acts deemed necessary or advisable by Secured Party to continue in
Secured Party a perfected first security interest in the Collateral, and shall
use reasonable efforts to obtain and furnish to


 


	
   

  	
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Secured Party any subordinations, releases, landlord
waivers, lessor waivers, mortgagee waivers, or control agreements, and similar
documents as may be from time to time reasonably requested by, and in form and
substance satisfactory to, Secured Party.


 


(b)         Debtor shall perform any and all acts reasonably requested by the
Secured Party to establish, maintain and continue the Secured Party’s security
interest and liens in the Collateral, including but not limited to, executing
or authenticating financing statements and such other instruments and documents
when and as reasonably requested by the Secured Party. Debtor hereby authorizes
Secured Party through any of Secured Party’s employees, agents or attorneys to
file any and all financing statements, including, without limitation, any
original filings, continuations, transfers or amendments thereof required to
perfect Secured Party’s security interest and liens in the Collateral under the
UCC without authentication or execution by Debtor. Debtor hereby irrevocably
authorizes the Secured Party at any time and from time to time to file in any
filing office in any Uniform Commercial Code jurisdiction any initial
financing statement(s) and amendments thereto that (a) indicate the
Collateral (i) is subject to the Secured Party’s security interest,
regardless of whether any particular asset comprised in the Collateral falls
within the scope of Article 9 of the Uniform Commercial Code of the
State or such jurisdiction, or (ii) as being of an equal or lesser scope
or with greater detail, and (b) provide any other information required by part 5
of Article 9 of the Uniform Commercial Code of the State or such
other jurisdiction for the sufficiency or filing office acceptance of any
financing statement or amendment, including (i) whether the Debtor is an
organization, the type of organization and any organization identification
number issued to the Debtor, and (ii) in the case of a financing statement
filed as a fixture filing, a sufficient description of real property to which
the Collateral relates. The Debtor agrees to furnish any such information to
the Secured Party promptly upon the Secured Party’s request.


 


(c)          Debtor shall indemnify and defend the Secured Party, its successors and
assigns, and their respective directors, officers and employees, from and
against all claims, actions and suits (including, without limitation, related
reasonable attorneys’ fees) of any kind whatsoever arising, directly or
indirectly, in connection with any of the Collateral except any claims, actions
and suits arising out of Secured Party’s gross negligence or wilful
misconduct..


 


7.                                   DEFAULT AND REMEDIES.


 


(a)          Debtor shall be in default under this Agreement and each of the other
Debt Documents if:


 


(i)               Debtor breaches its obligation to pay within 7
days of when due any installment or other amount due or coming due under any of
the Debt Documents;


 


(ii)            Debtor, without the prior written consent of
Secured Party, attempts to or does sell, rent, lease, license, mortgage, grant
a security interest in, or otherwise transfer or encumber (except for Permitted
Liens and Permitted Transfers) any of the Collateral;


 


(iii)         Debtor breaches any of its insurance obligations under Section 4;


 


(iv)        Debtor breaches any of its other non-payment obligations under any of
the Debt Documents and fails to cure that breach within thirty (30) days after
written notice from Secured Party;


 


(v)           Any warranty, representation or statement made by Debtor in any of the
Debt Documents or otherwise in connection with any of the Indebtedness shall be
false or misleading in any material respect as of the date made;


 


(vi)        Any of the Collateral is subjected to attachment, execution, levy,
seizure or confiscation in any legal proceeding or otherwise, or if any legal
or administrative proceeding is commenced against Debtor or any of the
Collateral, which in the good
faith judgment of Secured Party subjects any of the Collateral to a material
risk of attachment, execution, levy, seizure or confiscation and no bond is
posted or protective order obtained to negate such risk;


 


(vii)     Debtor breaches or is in default under any other agreement between
Debtor and Secured Party and such breach or default is not cured by Debtor or
waived by Secured Party within the applicable cure period;


 


(viii) Debtor or any
guarantor or other obligor for any of the Indebtedness (collectively “Guarantor”) dissolves, terminates its
existence, becomes insolvent or ceases to do business as a going concern;


 


(ix)          If Debtor or any Guarantor is a natural person, Debtor or any such
Guarantor dies or becomes incompetent;


 


(x)             A receiver is appointed for all or of any part of
the property of Debtor or any Guarantor, or Debtor or any Guarantor makes any
assignment for the benefit of creditors;


 


(xi)          Debtor or any Guarantor files a petition under any bankruptcy,
insolvency or similar law, or any such petition is filed against Debtor or any
Guarantor and is not dismissed within forty-five (45) days;


 


	
   

  	
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(xii)       Debtor’s improper filing of an amendment or termination statement
relating to a filed financing statement describing the Collateral.


 


(xiii) Debtor shall
merge with or consolidate into
any other entity or sell all or substantially all of its assets or in any
manner terminate its existence except where no default has occurred and is
continuing or would exist after giving effect to the transaction;


 


(xiv) Debtor is a
privately held corporation, more than 25% of Debtor’s voting capital stock, or
effective control of Debtor’s voting capital stock, issued and outstanding from
time to time, is not retained by the holders of such stock on the date the
Agreement is executed (other than due to the sale of Debtor’s equity securities
in a public offering or to venture capital investors);


 


(xv)      Debtor is a publicly held corporation, there shall be a change in the
ownership of Debtor’s stock such that Debtor is no longer subject to the
reporting requirements of the Securities Exchange Act of 1934 or no longer has
a class of equity securities registered under Section 12 of the
Securities Act of 1933; and


 


(xvi) Debtor defaults
under any other financing arrangement between Debtor and a third party
resulting in the acceleration by such third party of any indebtedness owed by
Debtor to such third party in an amount in excess of $150,000;


 


(xvii)              Secured Party shall have determined in its
sole and good faith judgment that there has been a material adverse change in
the financial condition of Debtor from the date hereof, or a change or event
shall have occurred which would impair the ability of Debtor to perform its
obligations hereunder or under any of the other financing agreements to which
it is a party or of Secured Party to enforce the Indebtedness or realize upon
the Collateral; and


 


(xviii)           Debtor breaches any of its obligations under Section 2(r).


 


 


  (b)       If Debtor is in default, the Secured Party, at its option, may declare
any or all of the Indebtedness to be immediately due and payable, without
demand or notice to Debtor or any Guarantor. The accelerated obligations and
liabilities shall bear interest (both before and after any judgment) until paid
in full at the lower of eighteen percent (18%) per annum or the maximum rate
not prohibited by applicable law.


 


(c)          Upon
the occurrence of a default and during the continuance thereof, Secured Party
shall have all of the rights and remedies of a Secured Party under the Uniform Commercial
Code, and under any other applicable law. Without limiting the foregoing, Secured
Party shall have the right to  (i) notify
any account debtor of Debtor or any obligor on any instrument which constitutes
part of the Collateral to make payment to the Secured Party,  (ii) with or without legal process,
enter any premises where the Collateral may be and take possession of and
remove the Collateral from the premises or store it on the premises,  (iii) sell the Collateral at public or
private sale, in whole or in part, and have the right to bid and purchase at
said sale, or  (iv) lease or
otherwise dispose of all or part of the Collateral, applying proceeds from
such disposition to the obligations then in default. If requested by Secured
Party, Debtor shall promptly assemble the Collateral and make it available to
Secured Party at a place to be designated by Secured Party, which is reasonably
convenient to both parties. Secured Party may also render any or all of
the Collateral unusable at the Debtor’s premises and may dispose of such
Collateral on such premises without liability for rent or costs. Any notice
that Secured Party is required to give to Debtor under the Uniform Commercial
Code of the time and place of any public sale or the time after which any
private sale or other intended disposition of the Collateral is to be made
shall be deemed to constitute reasonable notice if such notice is given to the
last known address of Debtor at least 
ten (10) days prior to such action. Upon the occurrence and during
the continuation of  a default, Debtor
hereby appoints Secured Party as Debtor’s attorney-in-fact, with full authority
in Debtor’s place and stead and in Debtor’s name or otherwise, from time to
time, to take any action and to execute any instrument which Secured Party may deem
necessary or advisable to accomplish the purpose of this Agreement.


 


(d)         Upon the
occurrence of a default and during the continuance thereof, proceeds from any
sale or lease or other disposition shall be applied: first, to all costs of
repossession, storage, and disposition including without limitation reasonable
attorneys’, appraisers’, and auctioneers’ fees; second, to discharge the
obligations then in default; third, to discharge any other Indebtedness of
Debtor to Secured Party, whether as obligor, endorser, guarantor, surety or
indemnitor; fourth, to expenses incurred in paying or settling liens and claims
against the Collateral; and lastly, to Debtor, if there exists any surplus. Debtor
shall remain fully liable for any deficiency.


 


(e)          Debtor
agrees to pay all reasonable attorneys’ fees and other costs incurred by
Secured Party in connection with the enforcement, assertion, defense or
preservation of Secured Party’s rights and remedies under this Agreement, or if
prohibited by law, such lesser sum as may be permitted. Debtor further
agrees that such fees and costs shall constitute Indebtedness.


 


(f)            Secured
Party’s rights and remedies under this Agreement or otherwise arising are
cumulative and may be exercised singularly or concurrently. Neither the
failure nor any delay on the part of the Secured Party to exercise any
right, power or privilege under this Agreement shall operate as a waiver, nor
shall any single or partial exercise of any right, power or privilege preclude
any other or further exercise of that or any other right, power or privilege. SECURED
PARTY SHALL NOT BE DEEMED TO HAVE WAIVED ANY OF ITS RIGHTS UNDER THIS AGREEMENT
OR UNDER ANY OTHER AGREEMENT, INSTRUMENT OR PAPER SIGNED BY DEBTOR UNLESS SUCH
WAIVER IS EXPRESSED IN WRITING AND SIGNED BY SECURED PARTY. A waiver on any one
occasion shall not be construed as a bar to or waiver of any right or remedy on
any future occasion.


 


(g)         DEBTOR AND
SECURED PARTY UNCONDITIONALLY WAIVE THEIR RIGHTS TO A JURY TRIAL OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE OTHER
DEBT DOCUMENTS, ANY OF THE INDEBTEDNESS SECURED HEREBY, ANY DEALINGS BETWEEN
DEBTOR AND SECURED PARTY RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION OR
ANY RELATED TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED
BETWEEN DEBTOR AND SECURED PARTY. THE SCOPE OF THIS WAIVER IS INTENDED TO BE
ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT.
THIS WAIVER IS IRREVOCABLE. THIS WAIVER MAY NOT BE MODIFIED


 


	
   

  	
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EITHER ORALLY OR IN WRITING. THE WAIVER ALSO
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT, ANY OTHER DEBT DOCUMENTS, OR TO ANY OTHER
DOCUMENTS OR AGREEMENTS RELATING TO THIS TRANSACTION OR ANY RELATED TRANSACTION.
THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.


 


8.                                   MISCELLANEOUS.


 


(a)          This Agreement, any Note and/or any of the other Debt Documents may be
assigned, in whole or in part, by Secured Party without notice to Debtor (provided
that, unless a default has occurred and is continuing, Secured Party will not
assign this Agreement, the Note, or any other Debt Document to a competitor of
Debtor or any affiliate thereof), and Debtor agrees not to assert against any
such assignee, or assignee’s assigns, any defense, set-off, recoupment claim or
counterclaim which Debtor has or may at any time have against Secured
Party for any reason whatsoever. Debtor agrees that if Debtor receives written
notice of an assignment from Secured Party, Debtor will pay all amounts payable
under any assigned Debt Documents to such assignee or as instructed by Secured
Party. Debtor also agrees to confirm in writing receipt of the notice of
assignment as may be reasonably requested by Secured Party or assignee.


 


(b)         All notices to be given in connection with this Agreement shall be in
writing, shall be addressed to the parties at their respective addresses set
forth in this Agreement (unless and until a different address may be
specified in a written notice to the other party), and shall be deemed
given  (i) on the date of receipt if
delivered in hand or by facsimile transmission, 
(ii) on the next business day after being sent by express mail,
and  (iii) on the fourth business
day after being sent by regular, registered or certified mail. As used herein,
the term “business day” shall mean and include any day other than Saturdays,
Sundays, or other days on which commercial banks in New York, New York are
required or authorized to be closed.


 


(c)          Secured Party may correct patent errors and fill in all blanks in
this Agreement or in any Collateral Schedule consistent with the agreement
of the parties.


 


(d)         Time is of the essence of this Agreement. This Agreement shall be
binding, jointly and severally, upon all parties described as the “Debtor” and
their respective heirs, executors, representatives, successors and assigns, and
shall inure to the benefit of Secured Party, its successors and assigns.


 


(e)          This Agreement and its Collateral Schedules constitute the entire
agreement between the parties with respect to the subject matter of this
Agreement and supersede all prior understandings (whether written, verbal or
implied) with respect to such subject matter. THIS AGREEMENT AND ITS COLLATERAL
SCHEDULES SHALL NOT BE CHANGED OR TERMINATED ORALLY OR BY COURSE OF CONDUCT,
BUT ONLY BY A WRITING SIGNED BY BOTH PARTIES. Section headings contained
in this Agreement have been included for convenience only, and shall not affect
the construction or interpretation of this Agreement.


 


(f)            This Agreement shall continue in full force
and effect until all of the Indebtedness has been indefeasibly paid in full to
Secured Party or its assignee. The surrender, upon payment or otherwise, of any
Note or any of the other documents evidencing any of the Indebtedness shall not
affect the right of Secured Party to retain the Collateral for such other
Indebtedness as may then exist. This Agreement shall automatically be
reinstated if Secured Party is ever required to return or restore the payment
of all or any portion of the Indebtedness (all as though such payment had never
been made).


 


(g)         DEBTOR AGREES THAT SECURED PARTY AND/OR ITS SUCCESSORS AND ASSIGNS SHALL
HAVE THE OPTION BY WHICH STATE LAWS THIS AGREEMENT SHALL BE GOVERNED AND
CONSTRUED: (A) THE LAWS OF THE STATE OF CONNECTICUT; OR (B) IF
COLLATERAL HAS BEEN PLEDGED TO SECURE THE LIABILITIES, THEN BY THE LAWS OF THE
STATE OR STATES WHERE THE COLLATERAL IS LOCATED, AT SECURED PARTY’S OPTION. THIS
CHOICE OF STATE LAWS IS EXCLUSIVE TO THE SECURED PARTY. DEBTOR SHALL NOT HAVE
ANY OPTION TO CHOOSE THE LAWS BY WHICH THIS AGREEMENT SHALL BE GOVERNED.  DEBTOR ACKNOWLEDGES THAT THIS AGREEMENT IS
BEING SIGNED BY THE SECURED PARTY IN PARTIAL CONSIDERATION OF SECURED PARTY’S
RIGHT TO ENFORCE IN THE JURISDICTION STATED ABOVE. DEBTOR CONSENTS TO
JURISDICTION IN THE STATE OF CONNECTICUT OR THE STATE IN WHICH ANY COLLATERAL IS
LOCATED AND VENUE IN ANY FEDERAL OR STATE COURT IN THE STATE OF CONNECTICUT OR THE STATE IN WHICH COLLATERAL IS LOCATED FOR SUCH PURPOSES AND
WAIVES ANY AND ALL RIGHTS TO CONTEST SAID JURISDICTION AND VENUE AND ANY
OBJECTION THAT SAID COUNTY IS NOT CONVENIENT. DEBTOR WAIVES ANY RIGHTS TO
COMMENCE ANY ACTION AGAINST SECURED PARTY IN ANY JURISDICTION EXCEPT CONNECTICUT, OR IF SECURED PARTY CHOOSES TO LITIGATE IN A
STATE WHERE COLLATERAL IS  LOCATED THEN
IN SUCH COUNTY AND STATE. SECURED PARTY AND DEBTOR HEREBY EACH EXPRESSLY WAIVE
ANY AND ALL RIGHTS TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER


 


	
   

  	
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PARTY WITH RESPECT TO ANY
MATTER WHATSOEVER RELATING TO, ARISING OUT OF OR IN ANY WAY CONNECTED WITH THE
LOAN, THE DOCUMENTS AND/OR THE TRANSACTIONS WHICH ARE THE SUBJECT OF THE
DOCUMENTS


 


(h)         Secured Party acknowledges that Debtor has paid to Secured Party a $50,000
Facility Fee. Debtor agrees that Lender may retain
$25,000 of the Facility Fee to
cover transaction costs. Secured Party agrees that it will apply the remaining
$25,000 of the Facility Fee to
the first installment of principal and interest due under the first Note issued
pursuant to this Agreement.


 


(i)             In handling any confidential information of
Debtor, Secured Party will exercise the same degree of care that it exercises
for its own proprietary information, but disclosure of information may be
made:  (i) to Secured Party’s
subsidiaries or affiliates in connection with their present or prospective
business relations with Debtor; (ii) to prospective transferees or
purchasers of any interest in the Indebtedness, provided that the prospective
transferee or purchaser agrees in writing with Secured Party  to keep such information confidential to the
same extent as required of Secured Party hereunder, (iii) as required by
law, regulation, subpoena or other order, (iv) as required in connection
with Secured Party’s examination or audit, and (v) as Secured Party
considers appropriate in exercising remedies under this Agreement. Confidential
information does not include information that either (a) is in the public
domain or in Secured Party’s possession when disclosed to Secured Party, or
becomes part of the public domain after disclosure to Secured Party
through no fault of Secured Party, or (b) is disclosed to Secured Party by
a third party, if Secured Party does not know that the third party is
prohibited from disclosing the information.


 


IN WITNESS WHEREOF, Debtor and Secured Party, intending to be
legally bound hereby, have duly executed this Agreement in one or more
counterparts, each of which shall be deemed to be an original, as of the day
and year first aforesaid.


 


	
  SECURED PARTY:

  	
     DEBTOR:

  
	
   

  	
   

  
	
  General
  Electric Capital Corporation

  	
     Favrille, Inc.

  
	
   

  	
   

  
	
  By: 

  	
  /s/ John Edel

  	
   

  	
     By:

  	
  /s/ Tamara A. Seymour

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Name: 

  	
  John Edel

  	
   

  	
  Name: 

  	
  Tamara A. Seymour

  	
   

  
	
   

  	
   

  
	
  Title: 

  	
  SVP

  	
   

  	
     Title: 

  	
  CFO

  	
   

  
													



 


	
   

  	
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