**Exhibit 4.13**

 

**COMMONSTOCK WARRANT**

 

NEITHER THIS WARRANTNOR THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE BEEN REGISTEREDUNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO SALE OR DISPOSITION OF THISWARRANT OR THE SHARES FOR WHICH THIS WARRANT IS EXERCISABLE MAY BEEFFECTED EXCEPT IN COMPLIANCE WITH RULE 144 UNDER SAID ACT OR WITHOUT ANEFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL FORTHE HOLDER, SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIREDUNDER THE ACT OR RECEIPT OF A NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGECOMMISSION.

 

# **WARRANT TO PURCHASE SHARES OF COMMON STOCK**

 
|   | Dated: | April 8, 2008 |
|--------|--------|--------------------|

 

THIS CERTIFIES THAT,for value received, Porter Novelli Life Sciences, LLC, (“Holder”) is entitledto subscribe for and purchase that number of shares as set forth in Section 1of the fully paid and nonassessable Common Stock (the “Shares” or the “CommonStock”) of FAVRILLE, INC., a Delaware corporation (the “Company”), at theWarrant Price (as hereinafter defined), subject to the provisions and upon theterms and conditions hereinafter set forth. As used herein, the term “CommonStock” shall mean the Company’s presently authorized Common Stock.

 

1.             Warrant Price and Number ofShares.  The “Warrant Price” per share shall initially be $1.80,subject to adjustment as provided in Section 7 below. This Warrant shallbe exercisable for Ten Thousand (10,000) shares of Common Stock.

 

2.             Conditions toExercise.  The purchase right represented by this Warrant may beexercised at any time, or from time to time, in whole or in part duringthe term commencing on the date hereof and ending at 5:00 P.M. EasternStandard time on the fifth (5th) annual anniversary of this Warrant.

 

3.             Method of Exercise; Payment;Issuance of Shares; Issuance of New Warrant.

 

(a)                                  CashExercise. Subject to Section 2 hereof, thepurchase right represented by this Warrant may be exercised by the Holderhereof, in whole or in part, by the surrender of this Warrant (with a dulyexecuted Notice of Exercise in the form attached hereto) at the principaloffice of the Company (as set forth in Section 17 below) and by payment tothe Company, by check, of an amount equal to the then applicable Warrant Priceper share multiplied by the number of shares then being purchased. In the eventof any exercise of the rights represented by this Warrant, certificates for theshares of stock so purchased shall be in the name of, and delivered to, theHolder hereof, or as such Holder may direct (subject to the terms oftransfer contained herein and upon payment by such Holder hereof of anyapplicable transfer taxes). Such delivery shall be made within 10 days afterexercise of the Warrant and at the Company’s expense and, unless this Warranthas been fully exercised or expired, a new Warrant having terms and conditionssubstantially identical to this Warrant and representing the portion of theShares, if any, with respect to which this Warrant shall not have beenexercised, shall also be issued to the Holder hereof within 10 days afterexercise of the Warrant.

 

(b)                                 NetIssue Exercise. In lieu ofexercising this Warrant pursuant to Section 3(a), Holder may elect toreceive shares equal to the value of this Warrant (or of any portion thereofremaining unexercised) by surrender of this Warrant at the principal office ofthe Company together with notice of such election, in which event the Companyshall issue to Holder the number of shares of the Company’s Common Stockcomputed using the following formula:

 

X = Y (A-B)

A

 

Where X = the number of shares of Common Stockto be issued to Holder.

 

Y = the number of shares of Common Stockpurchasable under this Warrant (at the date of such calculation).

 

A = the Fair Market Value of one share of theCompany’s Common Stock (at the date of such calculation).

 

B = Warrant Price per share (as adjusted to thedate of such calculation).

 

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(c)                                  FairMarket Value. For purposesof this Section 3, “Fair Market Value” of one share of the Company’sCommon Stock shall mean:

 

(i)                                     Ifthe Common Stock is traded Over-The-Counter or on The NASDAQ Stock Market, LLCor on another exchange, the per share Fair Market Value for the Common Stockwill be the average of the closing bid and asked prices of the Common Stockquoted in the Over-The-Counter Market Summary or the closing price quoted onany exchange on which the Common Stock is listed, whichever is applicable, aspublished in the Western Edition of The Wall Street Journal for the ten (10) tradingdays prior to the date of determination of Fair Market Value; or

 

(ii)                                  Inany other instance, the per share Fair Market Value for the Common Stock shallbe as determined in good faith by the Company’s Board of Directors.

 

In the event of 3(c)(ii) above, theCompany’s Board of Directors shall prepare a certificate, to be signed by anauthorized Officer of the Company, setting forth in reasonable detail the basisfor and method of determination of the per share Fair Market Value of theCommon Stock. The Board will also certify to the Holder that this per shareFair Market Value will be applicable to all holders of the Company’s CommonStock that require a fair market value determination as of the same date asHolder.

 

(d)                                 AutomaticExercise. To the extent this Warrant is notpreviously exercised, it shall be automatically exercised in accordance withSections 3(b) and 3(c) hereof (even if not surrendered) immediatelybefore its expiration.

 

(e)                                  No Net CashSettlement. Notwithstanding any other provision of this Warrant to the contrary,under no circumstances will the Company be required to effect any “net-cashsettlement” (within the meaning of the Financial Accounting Standards Board’sEITF 00-19, *Accounting for DerivativeFinancial Instruments Indexed to, and Potentially Settled in, a Company’s OwnStock*) of this Warrant.

 

4.             Representations and Warrantiesof Holder and Restrictions on Transfer Imposed by the Securities Act of 1933.

 

(a)                                  Representationsand Warranties by Holder. The Holderrepresents and warrants to the Company with respect to this purchase asfollows:

 

(i)                                     TheHolder has substantial experience in evaluating and investing in privateplacement transactions of securities of companies similar to the Company sothat the Holder is capable of evaluating the merits and risks of its investmentin the Company and has the capacity to protect its interests. The Holder is an “accreditedinvestor” as that term is defined in Rule 501 promulgated under theSecurities Act of 1933, as amended (the “Act”).

 

(ii)                                  TheHolder is acquiring the Warrant and the Shares of Common Stock issuable uponexercise of the Warrant (collectively the “Securities”) for investment for itsown account and not with a view to, or for resale in connection with, anydistribution thereof. The Holder understands that the Securities have not beenregistered under the Act by reason of a specific exemption from theregistration provisions of the Act, which depends upon, among other things, thebona fide nature of the investment intent as expressed herein. In thisconnection, the Holder understands that, in the view of the Securities andExchange Commission (the “SEC”), the statutory basis for such exemptionmay be unavailable if this representation was predicated solely upon apresent intention to hold the Securities for the minimum capital gains periodspecified under tax statutes, for a deferred sale, for or until an increase ordecrease in the market price of the Securities or for a period of one year orany other fixed period in the future.

 

(iii)                               TheHolder acknowledges that the Securities must be held indefinitely unlesssubsequently registered under the Act or an exemption from such registration isavailable. The Holder is aware of the provisions of Rule 144 promulgatedunder the Act (“Rule 144”) which permits limited resale of securitiespurchased in a private placement subject to the satisfaction of certainconditions more fully set forth in such rule.

 

(iv)                              TheHolder further understands that at the time the Holder wishes to sell theSecurities there may be no public market upon which such a salemay be effected, and that even if such a public market exists, the Companymay not be satisfying the current public information requirements of Rule 144,and that in such event, the Holder may be precluded from selling theSecurities under Rule 144.

 

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(v)                                 TheHolder has had an opportunity to discuss the Company’s business, management andfinancial affairs with its management. The Holder understands that suchdiscussions, as well as the written information issued by the Company, wereintended to describe the aspects of the Company’s business and prospects whichit believes to be material but were not necessarily a thorough or exhaustivedescription.

 

(vi)                              ThisWarrant and the Shares issuable upon exercise of this Warrant (and thesecurities issuable, directly or indirectly, upon conversion of the Shares, ifany) may not be transferred or assigned in whole or in part withoutcompliance with applicable federal and state securities laws by the transferorand the transferee (including, without limitation, the delivery of investmentrepresentation letters and legal opinions reasonably satisfactory to theCompany, as reasonably requested by the Company) and the transferee agrees tobe bound by all of the terms and conditions of this Warrant. The Company shallnot require Holder to provide an opinion of counsel if the transfer is to anyother affiliate of Holder. Additionally, the Company shall also not require anopinion of counsel if there is no material question as to the availability of Rule 144.

 

(b)                                 Legends.Each certificate representing the Securities shall be endorsed with thefollowing legend:

 

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDERTHE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE TRANSFERRED UNLESSCOVERED BY AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT, A “NO ACTION”LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION WITH RESPECT TO SUCHTRANSFER, A TRANSFER MEETING THE REQUIREMENTS OF RULE 144 OF THESECURITIES AND EXCHANGE COMMISSION, OR (IF REASONABLY REQUIRED BY THE COMPANY)AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY SUCHTRANSFER IS EXEMPT FROM SUCH REGISTRATION.

 

The Company need not enter into its stockregister a transfer of Securities unless the conditions specified in theforegoing legend are satisfied. The Company may also instruct its transferagent not to register the transfer of any of the Shares unless the conditionsspecified in the foregoing legend are satisfied.

 

(c)                                  Removalof Legend and Transfer Restrictions.The legend relating to the Act endorsed on a certificate pursuant to paragraph4(b) of this Warrant and the stop transfer instructions with respect tothe Securities represented by such certificate shall be removed and the Companyshall issue a certificate without such legend to the Holder of the Securitiesif (i) the Securities are registered under the Act and a prospectusmeeting the requirements of Section 10 of the Act is available or (ii) theHolder provides to the Company an opinion of counsel for the Holder reasonablysatisfactory to the Company, or a no-action letter or interpretive opinion ofthe staff of the SEC reasonably satisfactory to the Company, to the effect thatpublic sale, transfer or assignment of the Securities may be made withoutregistration and without compliance with any restriction such as Rule 144.

 

5.             Condition of Transfer orExercise of Warrant. It shall be a condition to any transfer or exercise ofthis Warrant that at the time of such transfer or exercise, the Holder shallprovide the Company with a representation in writing that the Holder ortransferee is acquiring this Warrant and the shares of Common Stock to beissued upon exercise, for investment purposes only and not with a view to anysale or distribution, or will provide the Company with a statement of pertinentfacts covering any proposed distribution. As a further condition to anytransfer of this Warrant or any or all of the shares of Common Stock issuableupon exercise of this Warrant, other than a transfer registered under the Act,the Company must have received a legal opinion, in form and substancesatisfactory to the Company and its counsel, reciting the pertinentcircumstances surrounding the proposed transfer and stating that such transferis exempt from the registration and prospectus delivery requirements of theAct. Each certificate evidencing the shares issued upon exercise of the Warrantor upon any transfer of the shares (other than a transfer registered under theAct or any subsequent transfer of shares so registered) shall, at the Company’soption, contain a legend in form and substance satisfactory to the Companyand its counsel, restricting the transfer of the shares to sales or otherdispositions exempt from the requirements of the Act.

 

Asfurther condition to each transfer, the Holder shall surrender this Warrant tothe Company and the transferee shall receive and accept a Warrant, of liketenor and date, executed by the Company.

 

6.             Stock Fully Paid; Reservation ofShares.  All Shares which may be issued upon the exercise of therights represented by this Warrant will, upon issuance, be fully paid andnonassessable, and free from all taxes, liens, and charges with respect to theissue thereof. During the period within which the rights represented by thisWarrant may be exercised, the Company will at all times have authorized,and reserved for issuance upon exercise of the purchase rights evidenced bythis Warrant, a sufficient number of shares of its Common Stock to provide forthe exercise of the rights represented by this Warrant.

 

7.             Adjustment for Certain Events. In the event of changes in the outstanding Common Stock by reason ofstock dividends, split-ups, recapitalizations, reclassifications, mergers,consolidations, combinations or exchanges of shares, separations, 

 

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reorganizations,liquidations, or the like, the number and class of shares available underthe Warrant in the aggregate and the Warrant Price shall be correspondinglyadjusted, as appropriate, by the Board of Directors of the Company. Theadjustment shall be such as will give the Holder of this Warrant upon exercisefor the same aggregate Warrant Price the total number, class and kind ofshares as it would have owned had the Warrant been exercised prior to the eventand had it continued to hold such shares until after the event requiringadjustment.

 

8.             Notice of Adjustments. Whenever any Warrant Price shall be adjusted pursuant to Section 7hereof, the Company shall prepare a certificate signed by its chief financialofficer setting forth, in reasonable detail, the event requiring theadjustment, the amount of the adjustment, the method by which such adjustmentwas calculated, and the Warrant Price and number of Shares issuable uponexercise of the Warrant after giving effect to such adjustment, and shall causecopies of such certificate to be mailed (by certified or registered mail,return receipt required, postage prepaid) within thirty (30) days of suchadjustment to the Holder of this Warrant as set forth in Section 19hereof.

 

9.             Transferability of Warrant.This Warrant is transferable on the books of the Company at its principaloffice by the registered Holder hereof upon surrender of this Warrant properlyendorsed, subject to compliance with Section 5 and applicable federal andstate securities laws. The Company shall issue and deliver to the transferee anew Warrant representing the Warrant so transferred. Upon any partial transfer,the Company will issue and deliver to Holder a new Warrant with respect to theWarrant not so transferred.

 

10.           No Fractional Shares.  Nofractional share of Common Stock will be issued in connection with any exercisehereunder, but in lieu of such fractional share the Company shall make a cashpayment therefor upon the basis of the Warrant Price then in effect.

 

11.           Charges, Taxes and Expenses.Issuance of certificates for shares of Common Stock upon the exercise of thisWarrant shall be made without charge to the Holder for any United States orstate of the United States documentary stamp tax or other incidental expensewith respect to the issuance of such certificate, all of which taxes andexpenses shall be paid by the Company, and such certificates shall be issued inthe name of the Holder.

 

12.           No Stockholder Rights UntilExercise. This Warrant does not entitle the Holder hereof to any votingrights or other rights as a stockholder of the Company prior to the exercisehereof.

 

13.           Registry of Warrant. TheCompany shall maintain a registry showing the name and address of theregistered Holder of this Warrant. This Warrant may be surrendered forexchange or exercise, in accordance with its terms, at such office or agency ofthe Company, and the Company and Holder shall be entitled to rely in allrespects, prior to written notice to the contrary, upon such registry.

 

14.           Loss, Theft, Destruction orMutilation of Warrant. Upon receipt by the Company of evidence reasonablysatisfactory to it of the loss, theft, destruction or mutilation of thisWarrant, and, in the case of loss, theft, or destruction, of indemnity reasonablysatisfactory to it, and, if mutilated, upon surrender and cancellation of thisWarrant, the Company will execute and deliver a new Warrant, having terms andconditions substantially identical to this Warrant, in lieu hereof.

 

15.           Miscellaneous.

 

(a)                                  IssueDate.  The provisions of this Warrantshall be construed and shall be given effect in all respect as if it had beenissued and delivered by the Company on the date hereof.

 

(b)                                 Successors. This Warrant shall be binding upon any successors or assigns of theCompany.

 

(c)                                  GoverningLaw.  This Warrant shall be governed byand construed in accordance with the laws of the State of California.

 

(d)                                 Headings. The headings used in this Warrant are used for convenience only and arenot to be considered in construing or interpreting this Warrant.

 

(e)                                  Saturdays,Sundays, Holidays.  If thelast or appointed day for the taking of any action or the expiration of anyright required or granted herein shall be a Saturday or a Sunday or shall be alegal holiday in the State of California, then such action may be taken orsuch right may be exercised on the next succeeding day not a legalholiday.

 

16.           No Impairment. The Companyshall not by any action including, without limitation, amending its articles orcertificate of incorporation or by-laws, any reorganization, transfer ofassets, consolidation, merger, share exchange dissolution, issue or sale ofsecurities or any other voluntary action, avoid or seek to avoid the observanceor performance of any of the terms of the Warrant or impair the ability of theHolder(s) to realize upon the intended economic value hereof, but will atall times in good faith assist in the 

 

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carrying out of allsuch terms and in the taking of all such action as may be necessary orappropriate to protect the rights of the Holder(s) hereof againstimpairment.

 

17.           Addresses. Any notice requiredor permitted hereunder shall be in writing and shall be mailed by overnightcourier, registered or certified mail, return receipt required, and postage pre-paid,or otherwise delivered by hand or by messenger, addressed as set forth below,or at such other address as the Company or the Holder hereof shall havefurnished to the other party.

 
|   | If to the Company: | Favrille, Inc.               |
|--------|--------------------|-----------------------------------|
|   |               | 10445 Pacific Center  Court       |
|   |               | San Diego, CA 92121               |
|   |               | Attn: Chief  Financial Officer    |
|   |               |                              |
|   | If to the Holder:  | Porter Novelli Life Sciences, LLC |
|   |               | 3033 5th  Avenue, Ste. 400        |
|   |               | San Diego,  California 92103      |
|   |               | Attn: Carin Canale,  President    |

 

18.           Modification and Waiver. TheWarrant and any provision hereof may be changed, waived, discharged orterminated only by an instrument in writing signed by the Company and theHolder of the Warrant.

 

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IN WITNESS WHEREOF, the Company has caused thisWarrant to be executed by an officer thereunto duly authorized.

 
| Dated as of April 8,  2008. |
|----------------------------------|
|                             |
| FAVRILLE, INC.                   |
|                             |
| By:                              | /s/ Tamara A.  Seymour |   |
|                             |   |
| Name:                            | Tamara A. Seymour |   |
|                             |   |
| Title:                           | Chief Financial  Officer |   |

 

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**NOTICE OF EXERCISE**

 

TO:

 

1.             The undersigned Warrantholder (“Holder”)elects to acquire shares of the Common Stock (the “Common Stock”) of Favrille, Inc.(the “Company”), pursuant to the terms of the Common Stock Warrant dated April 8,2008 (the “Warrant”).

 

2.             The Holder exercises its rightsunder the Warrant as set forth below:

 

o                                    TheHolder elects to purchase              sharesof Common Stock as provided in Section 3(a) and 3(c) and tendersherewith a check in the amount of $             aspayment of the Warrant Price.

 

o                                    TheHolder elects to net issue exercise the Warrant for shares of Common Stock asprovided in Section 3(b) and 3(c) of the Warrant.

 

3.             The Holder surrenders the Warrantwith this Notice of Exercise.

 

4.             The Holder represents that it isacquiring the aforesaid shares of Common Stock for investment and not with aview to, or for resale in connection with, distribution and that the Holder hasno present intention of distributing or reselling the shares unless incompliance with all applicable federal and state securities laws.

 

5.             Please issue a certificaterepresenting the shares of the Common Stock in the name of the Holder or insuch other name as is specified below:

 

 
|   | Name:          |
|--------|----------------|
|   |           |
|   | Address:       |
|   |           |
|   | Taxpayer I.D.: |

 

 
|   | Porter Novelli Life  Sciences, LLC |
|--------|------------------------------------|
| By:    |                               |   |
|   |                               |   |
| Name:  |                               |   |
|   |                               |   |
| Title: |                               |   |
|   |                               |   |
| Date:  |                               |   |

 

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