Exhibit 10.4


 


AGREEMENT


 


This Agreement dated as of June 30, 2008 (this “Agreement”),
is made by and between General Electric Capital Corporation (“Lender”) and
Favrille, Inc. a Delaware corporation (“Borrower”).


 


WITNESSETH:


 


A.            GE Capital and Borrower are parties to
that certain Master Security Agreement dated as of December 30, 2005 as
amended by an Amendment No. 1 dated as of December 30, 2005, pursuant
to which Lender made a series of loans (the “Loans”) to Borrower arising under
and evidenced by a series of promissory notes delivered by Borrower to Lender
(the foregoing Master Security Agreement, the promissory notes, this Agreement,
and any other documents evidencing or relating to the obligations arising
thereunder, as any such documents may have been amended, restated, modified or
supplemented from time to time, are hereafter referred to as the “Loan
Documents”), which Loans are secured by a security interest in certain property
owned by Borrower (the “Collateral”).


 


B.            A default occurred under the Loan
Documents on or about June 4, 2008, thus entitling Lender to exercise its
legal rights and remedies.  On or about June 5
and 6, 2008, Lender and Oxford Finance Corporation (“Oxford”), another secured
creditor of Borrower, delivered notices of exclusive control (the “Control
Notices”) to certain financial institutions at which Borrower maintained
funds.  On or about June 11, 2008,
Lender and Oxford notified those financial institutions to deliver funds to
Lender and to Oxford.


 


C.            Pursuant to the Control Notices, Lender
received $5,051,588.68 on or about June 11, 2008.  On or about June 17, 2008, Lender
notified Borrower of such receipt and of how such funds were applied.  Lender also demanded repayment of the balance
that Lender contended was still owing.


 


D.            A portion of the funds that Lender
received was applied by Lender on account of a prepayment charge that Lender
contends was owed to it.  Borrower has
disputed Lender’s entitlement to receive the prepayment charge.


 


E.             Borrower and Lender desire to resolve
that dispute, to settle any remaining issues under the Loan Documents, and to
provide each other with mutual releases of claims.


 


NOW, THEREFORE, in consideration of the premises, the
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties do hereby agree as follows:


 


STATEMENT OF TERMS


 


.14           Acknowledgment
of Recitals.  Borrower and Lender acknowledge the accuracy of the
recitals set forth above.


 


.15           Wire Transfer.  No
later than two business days after execution and delivery of this Agreement and
Lender’s receipt of an executed copy of the Borrower/Oxford Agreement (as
defined below), Lender shall send a wire transfer for the benefit of Borrower in
the amount of $54,920.28 (the “Transfer”). 
At Borrower’s request, the Transfer will be sent by Lender to
Oxford.  Borrower has informed Lender
that it is concurrently entering into an agreement with Oxford (the “Borrower/Oxford
Agreement”) that resolves Borrower’s similar dispute with Oxford and that,
pursuant thereto, Oxford is to receive the Transfer directly from Lender.  Lender is not a party to the Borrower/Oxford
Agreement and has no responsibility to Borrower or


 

















 


to Oxford with regard thereto; provided that Lender
shall not obligated to send the Transfer until it has received an executed copy
of the Borrower/Oxford Agreement.


 


.16           Resolution of Dispute.  Borrower and Lender agree that Lender’s
sending the Transfer and the mutual releases contained herein are in full
satisfaction of the prepayment charge dispute and that, with the exception of
the matters referred to in Section 4 and Section 8 of this Agreement,
constitute a full and final settlement of all outstanding obligations between
them arising out of the Loan Documents.


 


.17           Matters that
Survive Repayment of the Loan.  Notwithstanding the provisions of Section 3 of
this Agreement or the release set forth herein, Borrower shall continue to
remain obligated to Lender with respect to those terms and provisions in the
Loan Documents, if any, that by their terms or by their nature survive payment
in full of the Loans and related obligations, including any indemnities.


 


.18           Release of
Liens on Collateral.  Lender agrees that all liens and security
interests held by it in any Collateral shall be deemed immediately and
automatically released on the date that this Agreement is executed and
delivered by the parties hereto (the “Agreement Effective Date”).  Lender agrees to execute and deliver to Borrower,
at Borrower’s expense, such documents as Borrower shall reasonably request in
order to evidence the release of such liens and security interests.  Borrower is authorized to file for
recordation UCC-3 termination statements covering all financing statements
recorded and/or filed by or on behalf of 
Lender with respect to the Loan Documents (but not any financing
statements that may have been filed by Lender with regard to obligations
outside the scope of the Loan Documents), including, but not limited to, those
set forth in Exhibit A attached hereto and incorporated herein: provided,
however, where such file number(s) relate to filings made jointly by
Lender and Oxford (“Joint UCC-1 Filings”), Borrower shall wait until it also
has authority from Oxford to terminate the Joint UCC-1 Filings.   Within 2 business days after the Agreement
Effective Date, Lender shall deliver written notice to the bank or other
financial institution that is party to the following account control agreements
that Lender is terminating Lender’s rights under the account control
agreement:  a) Securities Account
Control Agreement/GECC Silicon Valley Bank dated 12/29/05 — Account No. 48600699,
b) Securities Account Control Agreement/Oxford & GECC/Bear Stearns
dated 12/29/05, c) Securities Account Control Agreement/Oxford &
GECC/State Street Bank dated 12/29/05, and d) Deposit Account Control
Agreement/Oxford & GECC/ Silicon Valley Bank dated 12/29/05 with
respect to the following accounts: 300275403, 3300295983, 3300261889 and,
3300368044.  Lender’s notice shall not
terminate any rights of Oxford and Borrower understands that it will need to
make separate arrangements with Oxford for Oxford to terminate its interest in
such accounts.


 


.19          Release
of Lender by Borrower.  Borrower
hereby releases, remises, acquits and forever discharges Lender and each of its
employees, agents, representatives, consultants, attorneys, fiduciaries,
officers, directors, partners, predecessors, successors and assigns, subsidiary
corporations, parent corporations, and related corporate divisions
(collectively, the “Lender Released Parties”), from any and all actions and
causes of action, judgments, executions, suits, debts, claims, demands,
liabilities, obligations, damages and expenses of any and every character,
known or unknown, direct and/or indirect, at law or in equity, of whatsoever
kind or nature, for or because of any matter or things done, omitted or
suffered to be done by any of the Lender Released Parties prior to and
including the Agreement Effective Date, which arises out of or is connected to
the Loan Documents (collectively, the “Borrower Released Matters”).  Borrower acknowledges that the agreements in
this Section are intended to be in full satisfaction of all or any alleged
injuries or damages arising in connection with the Borrower Released Matters.


 


Without limiting the generality of the foregoing,
Borrower hereby waives the provisions of any statute that prevents a general
release from extending to claims unknown by the releasing party.  By entering into this release, Borrower
recognizes that no facts or representations are ever absolutely certain and it
may hereafter discover facts in addition to or different from those which it
presently knows or believes to be true, but that it is the intention of
Borrower to hereby to fully, finally and forever settle and release all
matters, disputes and differences, known or unknown, suspected or
unsuspected.  Accordingly, if Borrower
should subsequently


 

















 


discover that any fact that it relied upon in delivering
this release was untrue, or that any understanding of the facts was incorrect,
Borrower shall not be entitled to set aside this release by reason thereof,
regardless of any claim of mistake of fact or law or any other circumstances
whatsoever.  Borrower acknowledges that
it is not relying upon and has not relied upon any representation or statement
made by Lender with respect to the facts underlying this release or with regard
to Borrower’s rights or asserted rights.


 


This release may be pleaded as a full and complete
defense and/ or as a cross-complaint or counterclaim against any action, suit,
or other proceeding that may be instituted, prosecuted or attempted in breach
of this release.  Borrower acknowledges
that the release contained herein constitutes a material inducement to Lender
to enter into this Agreement and that Lender would not have done so but for its
expectation that such release is valid and enforceable in all events.


 


.20           Release of Borrower by Lender.  Lender hereby releases, remises, acquits and forever
discharges Borrower and each of its employees, agents, representatives,
consultants, attorneys, fiduciaries, officers, directors, partners,
predecessors, successors and assigns, subsidiary corporations, parent
corporations, and related corporate divisions (collectively, the “Borrower
Released Parties”), from any and all actions and causes of action, judgments,
executions, suits, debts, claims, demands, liabilities, obligations, damages
and expenses of any and every character, known or unknown, direct and/or
indirect, at law or in equity, of whatsoever kind or nature, for or because of
any matter or things done, omitted or suffered to be done by any of the
Borrower Released Parties prior to and including the Agreement Effective Date, which
arises out of or is connected to the Loan Documents (collectively, the “Lender
Released Matters”).  Lender acknowledges
that the agreements in this Section are intended to be in full
satisfaction of all or any alleged injuries or damages arising in connection
with the Lender Released Matters.


 


Without limiting the generality of the foregoing,
Lender hereby waives the provisions of any statute that prevents a general
release from extending to claims unknown by the releasing party.  By entering into this release, Lender
recognizes that no facts or representations are ever absolutely certain and it
may hereafter discover facts in addition to or different from those which it
presently knows or believes to be true, but that it is the intention of Lender
to hereby to fully, finally and forever settle and release all matters,
disputes and differences, known or unknown, suspected or unsuspected.  Accordingly, if Lender should subsequently
discover that any fact that it relied upon in delivering this release was
untrue, or that any understanding of the facts was incorrect, Lender shall not
be entitled to set aside this release by reason thereof, regardless of any
claim of mistake of fact or law or any other circumstances whatsoever.  Lender acknowledges that it is not relying
upon and has not relied upon any representation or statement made by Borrower
with respect to the facts underlying this release or with regard to Lender’s
rights or asserted rights.


 


This release may be pleaded as a full and complete
defense and/ or as a cross-complaint or counterclaim against any action, suit,
or other proceeding that may be instituted, prosecuted or attempted in breach
of this release.  Lender acknowledges
that the release contained herein constitutes a material inducement to Borrower
to enter into this Agreement and that Borrower would not have done so but for
its expectation that such release is valid and enforceable in all events.


 


.21           Effect of Insolvency Proceeding. This Agreement shall remain in full force and
effect and continue to be effective should Borrower become the subject of any
bankruptcy or insolvency proceeding. 
Notwithstanding the provisions of Section 3 of this Agreement or
the release set forth herein, if in connection with any such proceeding, any
action is commenced against Lender seeking to have any payment received by
Lender returned, disgorged, rescinded, set aside, or reduced in amount, then
the release set forth herein from Lender to Borrower shall no longer be of any
force or effect and Lender shall be entitled to assert all claims against
Borrower that it would have been entitled to assert had this Agreement not been
entered into and, among other things, to seek return to Lender of the
Transfer.  The rescission of the release
by Lender shall not affect the release by Borrower.


 

















 


.22           Counterparts. This
Agreement may be executed in multiple counterparts, each of which shall be
deemed to be an original and all of which when taken together shall constitute
one and the same document.  Any signature
delivered by a party via facsimile or electronic transmission shall be deemed
to be an original signature hereto.


 


.23           Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF DELAWARE
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE WITHOUT REGARD TO THE
PRINCIPLES THEREOF REGARDING CONFLICTS OF LAWS.


 


[Remainder of Page Intentionally Left
Blank; Signatures Begin on Next Page]


 

















 


IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed and delivered as of the day and year
specified at the beginning hereof.


 


 


	
   

  	
  FAVRILLE, INC.

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  

  	
  Tamara
  A. Seymour

  	
   

  
	
   

  	
  Name:
  

  	
  Tamara
  A. Seymour

  	
   

  
	
   

  	
  Title: 

  	
  Chief Financial Officer

  	
   

  



 


 


	
   

  	
  GENERAL
  ELECTRIC CAPITAL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  

  	
  Jason
  Dufour

  	
   

  
	
   

  	
  Name:
  

  	
  Jason
  Dufour

  	
   

  
	
   

  	
  Title: 

  	
  Duly Authorized Signatory

  	
   

  



 


 


Oxford acknowledges receipt of this Agreement and has
no objection to it.  Oxford agrees to
notify Lender and Borrower upon its receipt of the Transfer.  Oxford agrees that it has no claims against
Lender arising from the intercreditor agreement between them and from Lender’s
receipt of collateral proceeds from accounts of Borrower and waives and
releases any claims, known or unknown, that it has or may have against Lender.


 


	
   

  	
  OXFORD FINANCE
  CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  

  	
  T.
  A. Lex

  	
   

  
	
   

  	
  Name:
  

  	
  T.
  A. Lex

  	
   

  
	
   

  	
  Title: 

  	
  Chief Operating Officer

  	
   

  



 


 


Exhibit A


 


Joint
UCC Filing: GE and Oxford


 


	
  UCC No.

  	
   

  	
  File Date

  	
   

  	
  Secured Parties

  
	
  54070406

  	
   

  	
  12/30/2005

  	
   

  	
  GE & Oxford

  



 


GE UCC
Filings:


 


	
  UCC No.

  	
   

  	
  File Date

  	
   

  	
  Secured Party

  
	
  61315464

  	
   

  	
  4/6/2006

  	
   

  	
  GE

  
	
  62223162

  	
   

  	
  6/26/2006

  	
   

  	
  GE

  
	
  63692662

  	
   

  	
  10/4/2006

  	
   

  	
  GE

  
	
  64556973

  	
   

  	
  12/21/2006

  	
   

  	
  GE

  
	
  71344281

  	
   

  	
  4/3/2007

  	
   

  	
  GE

  
	
  73051181

  	
   

  	
  7/3/2007

  	
   

  	
  GE