**Exhibit 10.5**

 

**AGREEMENT**

 

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

 

**WITNESSETH:**

 

A.            Lender and Borrower are parties to thatcertain Master Security Agreement dated as of July 26, 2004, as amended byan Amendment dated as of December 29, 2004, an Amendment dated June 16,2005, an Amendment dated December 30, 2005 and a Loan Amendment Agreementdated as of May 16, 2008, pursuant to which Lender made a series of loans(the “Loans”) to Borrower arising under and evidenced by a series of promissorynotes delivered by Borrower to Lender (the foregoing Master Security Agreement,the promissory notes, this Agreement, and any other documents evidencing orrelating to the obligations arising thereunder, as any such documents may havebeen amended, restated, modified or supplemented from time to time, arehereafter referred to as the “Loan Documents”), which Loans are secured by asecurity interest in certain property owned by Borrower (the “Collateral”).

 

B.            A default occurred under the LoanDocuments on or about June 4, 2008, thus entitling Lender to exercise itslegal rights and remedies.  On or about June 5and 6, 2008, Lender and General Electric Capital Corporation (“GE Capital”),another secured creditor of Borrower, delivered notices of exclusive control(the “Control Notices”) to certain financial institutions at which Borrowermaintained funds.  On or about June 11,2008, Lender and GE Capital notified those financial institutions to deliverfunds to Lender and to GE Capital.

 

C.            Pursuant to the Control Notices, Lenderreceived $3,795,101.99 on or about June 11, 2008.  On or about June 17, 2008, Lendernotified Borrower of such receipt and of how such funds were applied.  Lender also demanded repayment of the balancethat Lender contended was still owing.

 

D.            A portion of the funds that Lenderreceived was applied by Lender on account of a prepayment charge that Lendercontends was owed to it.  Borrower hasdisputed Lender’s entitlement to receive the prepayment charge.

 

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

 

F.             Borrower has informed Lender that it isconcurrently entering into an Agreement with GE Capital (the “Borrower/GECapital Agreement”) that resolves Borrower’s similar dispute with GE Capital.

 

**NOW, THEREFORE**, in consideration of the premises, thecovenants and agreements contained herein, and for other good and valuableconsideration, the receipt and adequacy of which are hereby acknowledged, theparties do hereby agree as follows:

 

STATEMENTOF TERMS

 

### **.24**           Acknowledgment of Recitals. Borrower and Lender acknowledge the accuracy of the recitals set forthabove.

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### **.25**           GE Capital Wire Transfer.  Nolater than two business days after Borrower’s execution and delivery of thisAgreement (“Execution Date”) and GE Capital’s receipt of an executed copy of theBorrower/GE Capital Agreement and this Agreement, GE Capital shall send a wiretransfer for the benefit of

 

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### **Borrower in the amount of $54,920.28 (the “GETransfer”).  At Borrower’s request, theGE Transfer will be sent by GE Capital to Lender.  Borrower has informed GE Capital that it isconcurrently entering into this Agreement with Lender (the “Borrower/OxfordAgreement”) that resolves Borrower’s similar dispute with Lender and that,pursuant thereto, Lender is to receive the Transfer directly from GECapital.  GE Capital is not a party tothe Borrower/Oxford Agreement and has no responsibility to Borrower or toLender with regard thereto; provided that GE Capital shall not be obligated tosend the Transfer until it has received an executed copy of this Ageement.**

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### **.26**           Favrille Wire Transfer.   No later than two business days after Borrower’sexecution and delivery of this Agreement, Borrower shall send a wire transferto Lender in the amount of $46,742.85 (the “Favrille Transfer”).  The Favrille Transfer consists of principalin the amount of $46,490.61 and interest in the amount of $252.24 through June 30,2008.  The principal amount will bearinterest at the rate of $13.28 per day commencing on July 1, 2008 andcontinuing until Lender has been paid in full.

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### **.27**           Resolution of Dispute.  Borrowerand Lender agree that Lender’s receipt of the GE Transfer and the FavrilleTransfer and the mutual releases contained herein are in full satisfaction ofthe prepayment charge dispute and that, with the exception of the mattersreferred to in Section 5 and Section 9 of this Agreement, constitutea full and final settlement of all outstanding obligations between them arisingout of the Loan Documents.

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### **.28**           Matters that Survive Repayment of the Loan. Notwithstanding the provisions of Section 4 of this Agreement orthe release set forth herein, Borrower shall continue to remain obligated toLender with respect to those terms and provisions in the Loan Documents, ifany, that by their terms or by their nature survive payment in full of theLoans and related obligations, including any indemnities.

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### **.29**           Release of Liens on Collateral. Lender agrees that all liens and security interests held by it in anyCollateral shall be deemed immediately and automatically released on the datethat this Agreement is executed and delivered by the parties hereto (the “AgreementEffective Date”).  Lender agrees toexecute and deliver to Borrower, at Borrower’s expense, such documents asBorrower shall reasonably request in order to evidence the release of suchliens and security interests.  Borroweris authorized to file for recordation UCC-3 termination statements covering allfinancing 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 withregard to obligations outside the scope of the Loan Documents), including, butnot limited to, those set forth in Exhibit A attached hereto andincorporated herein: provided, however, where such file number(s) relateto filings made jointly by Lender and GE Capital (“Joint UCC-1 Filings”),Borrower shall wait until it also has authority from Lender and GE Capital toterminate the Joint UCC-1 Filings.  Within 2 business days after the Execution Date, Lender shall deliverwritten notice to the bank or other financial institution that is party to thefollowing account control agreements that Lender is terminating Lender’s rightsunder the account control agreement:  a)Securities Account Control Agreement/Oxford/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 ControlAgreement/Oxford & GECC/State Street Bank dated 12/29/05, and d)Deposit Account Control Agreement/Oxford & GECC/ Silicon Valley Bankdated 12/29/05 with respect to the following accounts: 300275403, 3300295983,3300261889 and, 3300368044.  Lender’snotice shall not terminate any rights of GE Capital and Borrower understandsthat it will need to make separate arrangements with GE Capital for GE Capitalto terminate its interest in such accounts.

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### **.30**           Release of Lender by Borrower.  Borrowerhereby releases, remises, acquits and forever discharges Lender and each of itsemployees, agents, representatives, consultants, attorneys, fiduciaries,officers, directors, partners, predecessors, successors and assigns, subsidiarycorporations, parent corporations, and related corporate divisions(collectively, the “Lender Released Parties”), from any and all actions andcauses 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

 

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### **whatsoever kind or nature, for or because of anymatter or things done, omitted or suffered to be done by any of the LenderReleased Parties prior to and including the Agreement Effective Date, whicharises out of or is connected to the Loan Documents (collectively, the “BorrowerReleased Matters”).  Borroweracknowledges that the agreements in this Section are intended to be infull satisfaction of all or any alleged injuries or damages arising inconnection with the Borrower Released Matters.**

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Without limiting thegenerality of the foregoing, Borrower hereby waives the provisions of anystatute that prevents a general release from extending to claims unknown by thereleasing party.  By entering into thisrelease, Borrower recognizes that no facts or representations are everabsolutely certain and it may hereafter discover facts in addition to ordifferent from those which it presently knows or believes to be true, but thatit is the intention of Borrower to hereby to fully, finally and forever settleand release all matters, disputes and differences, known or unknown, suspectedor unsuspected.  Accordingly, if Borrowershould subsequently discover that any fact that it relied upon in deliveringthis 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 circumstanceswhatsoever.  Borrower acknowledges thatit is not relying upon and has not relied upon any representation or statementmade by Lender with respect to the facts underlying this release or with regardto Borrower’s rights or asserted rights.

 

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

 

### **.31**           Release of Borrower by Lender.  Lenderhereby releases, remises, acquits and forever discharges Borrower and each ofits employees, agents, representatives, consultants, attorneys, fiduciaries,officers, directors, partners, predecessors, successors and assigns, subsidiarycorporations, parent corporations, and related corporate divisions(collectively, the “Borrower Released Parties”), from any and all actions andcauses 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 kindor nature, for or because of any matter or things done, omitted or suffered tobe done by any of the Borrower Released Parties prior to and including theAgreement Effective Date, which arises out of or is connected to the LoanDocuments (collectively, the “Lender Released Matters”).  Lender acknowledges that the agreements inthis Section are intended to be in full satisfaction of all or any allegedinjuries or damages arising in connection with the Lender Released Matters.

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Without limiting the generalityof the foregoing, Lender hereby waives the provisions of any statute thatprevents a general release from extending to claims unknown by the releasingparty.  By entering into this release,Lender recognizes that no facts or representations are ever absolutely certainand it may hereafter discover facts in addition to or different from thosewhich it presently knows or believes to be true, but that it is the intentionof Lender to hereby to fully, finally and forever settle and release allmatters, disputes and differences, known or unknown, suspected orunsuspected.  Accordingly, if Lendershould subsequently discover that any fact that it relied upon in deliveringthis 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 circumstanceswhatsoever.  Lender acknowledges that itis not relying upon and has not relied upon any representation or statementmade by Borrower with respect to the facts underlying this release or withregard to Lender’s rights or asserted rights.

 

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

 

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### **.32**           Effect of Insolvency Proceeding. This Agreement shall remain in full force andeffect and continue to be effective should Borrower become the subject of any bankruptcyor insolvency proceeding. Notwithstanding the provisions of Section 4 of this Agreement orthe release set forth herein, if in connection with any such proceeding, anyaction is commenced against Lender seeking to have any payment received by Lenderreturned, disgorged, rescinded, set aside, or reduced in amount, then therelease set forth herein from Lender to Borrower shall no longer be of anyforce or effect and Lender shall be entitled to assert all claims againstBorrower that it would have been entitled to assert had this Agreement not beenentered into and, among other things, to seek return to Lender of theTransfer.  The rescission of the releaseby Lender shall not affect the release by Borrower.

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### **.33**           Counterparts. ThisAgreement may be executed in multiple counterparts, each of which shall bedeemed to be an original and all of which when taken together shall constituteone and the same document.  Any signaturedelivered by a party via facsimile or electronic transmission shall be deemedto be an original signature hereto.

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### **.34**           Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY, ANDCONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF DELAWAREAPPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE WITHOUT REGARD TO THEPRINCIPLES THEREOF REGARDING CONFLICTS OF LAWS.

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[Remainder of Page Intentionally LeftBlank; Signatures Begin on Next Page]

 

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

 

 
|   | FAVRILLE,  INC. |
|--------|-----------------|
|   |            |
|   | By:             | /s/ | Tamara  A. Seymour |   |
|   | Name:           | Tamara A. Seymour |   |
|   | Title:          | Chief Financial Officer |   |

 

 
|   | OXFORD  FINANCE CORPORATION |
|--------|-----------------------------|
|   |                        |
|   |                        |
|   | By:                         | /s/ | T.  A. Lex |   |
|   | Name:                       |   | T. A. Lex |   |
|   | Title:                      | Duly Authorized Signatory |   |
|        |                             |  |  |  |  |

 

 

GE Capital acknowledges receipt of this Agreement andhas no objection to it.  GE Capitalagrees that it has no claims against Lender arising from the intercreditoragreement between them and from Lender’s receipt of collateral proceeds fromaccounts of Borrower and waives and releases any claims, known or unknown, thatit has or may have against Lender.

 

 
|   | GENERAL ELECTRIC  CAPITAL CORPORATION |
|--------|---------------------------------------|
|   |                                  |
|   | By:                                   | /s/ | Jason  Dufour |   |
|   | Name:                                 |   | Jason Dufour |   |
|   | Title:                                | Duly Authorized Signatory |   |
|        |                                       |  |  |  |  |

 

**Exhibit A**

 

**JointUCC GE and Oxford UCC Filings):**

 
| **UCC No.** | ** ** | **File Date** | ** ** | **Secured Parties**  |
|-------------|------------|---------------|------------|----------------------|
| 54070406    |       | 12/30/2005    |       | GE & Oxford |

 

**OxfordUCC Filings :**

 
| **UCC No.** | ** ** | **File Date** | ** ** | **Secured Party** |
|-------------|------------|---------------|------------|-------------------|
| 42497719    |       | 9/3/2004      |       | Oxford            |
| 43153071    |       | 11/4/2004     |       | Oxford            |
| 43688191    |       | 12/30/2004    |       | Oxford            |
| 51439638    |       | 4/28/2005     |       | Oxford            |
| 51992107    |       | 6/28/2005     |       | Oxford            |
| 53469344    |       | 11/1/2005     |       | Oxford            |
| 60016576    |       | 12/27/2005    |       | Oxford            |

 

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