Exhibit 10.3


 





 


June 15, 2005


 


Ms. Tamara Seymour, CFO


Favrille, Inc.


10421 Pacific Center Court


San Diego, CA 92121


 


Dear Tamara:


 


Oxford Finance Corporation is pleased to provide the
following loan proposal to Favrille, Inc. for laboratory and other internal use
assets, subject to terms and conditions embodied in formal loan agreements,
which shall include but not be limited to the following terms and conditions:


 


	
  Borrower:

  	
   

  	
  Favrille, Inc.

  
	
   

  	
   

  	
   

  
	
  Lender:

  	
   

  	
  Oxford Finance
  Corporation, a Delaware Corporation

  
	
   

  	
   

  	
   

  
	
  Equipment:

  	
   

  	
  Laboratory, computers
  and other equipment for the internal use of Borrower as summarized in
  Attachment A (“Equipment”). Equipment must be acceptable to Lender.

  
	
   

  	
   

  	
   

  
	
  Total Loan Expansion:

  	
   

  	
  $1,550,000. $1,000,000
  of soft costs to fund no later than June 30, 2005.

  
	
   

  	
   

  	
   

  
	
  Funding Dates:

  	
   

  	
  June 2005 through
  December 2005

  
	
   

  	
   

  	
   

  
	
  Terms:

  	
   

  	
  Each Schedule shall
  have a fixed term of 42 months for new laboratory equipment and a fixed term
  of 36 months for existing, computer and all other equipment.

  
	
   

  	
   

  	
   

  
	
  Loan Payment Rates:

  	
   

  	
  3.1855% of the Loan
  Amount per month for 36 months

  
	
   

  	
   

  	
  2.7935% of the Loan
  Amount per month for 42 months

  
	
   

  	
   

  	
   

  
	
  Payment Rate Implicit
  Interest:

  	
   

  	
  9.67%

  
	
   

  	
   

  	
   

  
	
  Periodicity:

  	
   

  	
  Monthly, in advance.

  
	
   

  	
   

  	
   

  
	
  Index Basis:

  	
   

  	
  The three-year Treasury
  Bill Weekly Average rate of 3.67% as published in Federal Reserve statistical
  release 

  



 


133 NORTH FAIRFAX STREET, ALEXANDRIA, VIRGINIA 22314,
703-519-4900


 





















 


	
   

  	
   

  	
  H.15 (519) on June 13,
  2005.

  
	
   

  	
   

  	
   

  
	
  Payment Commencements:

  	
   

  	
  First day of the month
  following a Schedule funding.

  
	
   

  	
   

  	
   

  
	
  Stock Warrants:

  	
   

  	
  None

  
	
   

  	
   

  	
   

  
	
  Additional conditions:

  	
   

  	
  Indebtedness not to
  exceed $15,000,000 without prior consent of Lender. The debt cap shall be
  released upon completion of Borrower’s next equity financing of $20,000,000.

  
	
   

  	
   

  	
   

  
	
  Documentation:

  	
   

  	
  Loan documentation
  provided by Lender containing terms generally accepted in the industry and
  mutually agreeable to both Lender and Borrower.

  
	
   

  	
   

  	
   

  
	
  Facility Fee:

  	
   

  	
  No additional fee.

  
	
   

  	
   

  	
   

  
	
  Rate Adjustment:

  	
   

  	
  The effective Loan Rate
  will remain fixed for the duration of each Term. Prior to Schedule funding,
  Lender may adjust the Loan Rate in order to maintain its originally
  anticipated rate of return if there is an increase in the yield on the U.S.
  Treasury Bills, as quoted in the Federal Reserve statistical release H.15
  (519), from the Index Basis specified in this proposal letter.

  
	
   

  	
   

  	
   

  
	
  Costs:

  	
   

  	
  Borrower shall be
  responsible for all costs and expenses relating to the transaction,
  including, without limitation, extraordinary attorneys’ and appraisal fees,
  lien search, inspection and filing fees relating to the preparation,
  execution and recording of all documents.

  
	
   

  	
   

  	
   

  
	
  Expiration:

  	
   

  	
  This loan proposal will
  expire if a signed copy of this proposal letter is not received by Oxford on
  or beforeJune 27, 2005

  



 


This proposal letter, the collateral described, and
any terms and conditions of the loan or warrant agreements, are subject to
final review and approval by Oxford Finance Corporation and its Executive
Credit Team, and is not a commitment to provide financing.


 


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Oxford Finance Corporation welcomes the opportunity to
be of service to Favrille, Inc.  We look
forward to working with you.


 


	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  /s/ Christopher A. Herr

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  OXFORD FINANCE
  CORPORATION

  
	
   

  	
  Christopher A. Herr

  
	
   

  	
   

  
	
  ACKNOWLEDGED AND
  AGREED:

  	
   

  
	
   

  	
   

  
	
  Favrille, Inc.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Tamara A. Seymour

  	
   

  	
   

  
	
   

  	
   

  
	
  Title: Chief Financial
  Officer

  	
   

  
	
   

  	
   

  
	
  Date: June 27, 2005

  	
   

  
					



 


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ATTACHMENT A


 


Estimated Categories of Equipment:


 


	
  Category

  	
   

  	
  Amount

  	
   

  	
  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lab equipment, furniture, manufacturing and computer
  hardware

  	
   

  	
  $

  	
  550,000

  	
   

  	
  36

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  All other softcosts

  	
   

  	
  $

  	
  1,000,000

  	
   

  	
  64

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  1,550,000

  	
   

  	
  100

  	
  %

  



 


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