**Exhibit 10.4**

 

**AGREEMENT**

 

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

 

**WITNESSETH:**

 

A.            GE Capital and Borrower are parties tothat certain Master Security Agreement dated as of December 30, 2005 asamended by an Amendment No. 1 dated as of December 30, 2005, pursuantto which Lender made a series of loans (the “Loans”) to Borrower arising underand 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 arisingthereunder, as any such documents may have been amended, restated, modified orsupplemented from time to time, are hereafter referred to as the “LoanDocuments”), which Loans are secured by a security interest in certain propertyowned 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 Oxford Finance Corporation (“Oxford”), another securedcreditor of Borrower, delivered notices of exclusive control (the “ControlNotices”) to certain financial institutions at which Borrower maintainedfunds.  On or about June 11, 2008,Lender and Oxford notified those financial institutions to deliver funds toLender and to Oxford.

 

C.            Pursuant to the Control Notices, Lenderreceived $5,051,588.68 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.

 

**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:

 

**STATEMENT OF TERMS**

 

### **.14**           Acknowledgmentof Recitals.  Borrower and Lender acknowledge the accuracy of therecitals set forth above.

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### **.15**           Wire Transfer.  Nolater than two business days after execution and delivery of this Agreement andLender’s receipt of an executed copy of the Borrower/Oxford Agreement (asdefined below), Lender shall send a wire transfer for the benefit of Borrower inthe amount of $54,920.28 (the “Transfer”). At Borrower’s request, the Transfer will be sent by Lender toOxford.  Borrower has informed Lenderthat it is concurrently entering into an agreement with Oxford (the “Borrower/OxfordAgreement”) 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/OxfordAgreement and has no responsibility to Borrower or

 

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### **to Oxford with regard thereto; provided that Lendershall not obligated to send the Transfer until it has received an executed copyof the Borrower/Oxford Agreement.**

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

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

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### **.18**           Release ofLiens on Collateral.  Lender agrees that all liens and securityinterests held by it in any Collateral shall be deemed immediately andautomatically released on the date that this Agreement is executed anddelivered 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 inorder to evidence the release of such liens and security interests.  Borrower is authorized to file forrecordation UCC-3 termination statements covering all financing statementsrecorded and/or filed by or on behalf of Lender with respect to the Loan Documents (but not any financingstatements that may have been filed by Lender with regard to obligationsoutside the scope of the Loan Documents), including, but not limited to, thoseset forth in Exhibit A attached hereto and incorporated herein: provided,however, where such file number(s) relate to filings made jointly byLender and Oxford (“Joint UCC-1 Filings”), Borrower shall wait until it alsohas authority from Oxford to terminate the Joint UCC-1 Filings.   Within 2 business days after the AgreementEffective Date, Lender shall deliver written notice to the bank or otherfinancial institution that is party to the following account control agreementsthat Lender is terminating Lender’s rights under the account controlagreement:  a) Securities AccountControl Agreement/GECC Silicon Valley Bank dated 12/29/05 — Account No. 48600699,b) Securities Account Control Agreement/Oxford & GECC/Bear Stearnsdated 12/29/05, c) Securities Account Control Agreement/Oxford &GECC/State Street Bank dated 12/29/05, and d) Deposit Account ControlAgreement/Oxford & GECC/ Silicon Valley Bank dated 12/29/05 withrespect to the following accounts: 300275403, 3300295983, 3300261889 and,3300368044.  Lender’s notice shall notterminate any rights of Oxford and Borrower understands that it will need tomake separate arrangements with Oxford for Oxford to terminate its interest insuch accounts.

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### **.19**          Releaseof 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 whatsoeverkind or nature, for or because of any matter or things done, omitted orsuffered to be done by any of the Lender Released Parties prior to andincluding the Agreement Effective Date, which arises out of or is connected tothe Loan Documents (collectively, the “Borrower Released Matters”).  Borrower 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 Borrower Released Matters.

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

 

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

 

### **.20**           Release of Borrower by Lender.  Lender hereby releases, remises, acquits and foreverdischarges Borrower and each of its employees, agents, representatives,consultants, attorneys, fiduciaries, officers, directors, partners,predecessors, successors and assigns, subsidiary corporations, parentcorporations, and related corporate divisions (collectively, the “BorrowerReleased Parties”), from any and all actions and causes of action, judgments,executions, suits, debts, claims, demands, liabilities, obligations, damagesand expenses of any and every character, known or unknown, direct and/orindirect, at law or in equity, of whatsoever kind or nature, for or because ofany matter or things done, omitted or suffered to be done by any of theBorrower Released Parties prior to and including the Agreement Effective Date, whicharises out of or is connected to the Loan Documents (collectively, the “LenderReleased Matters”).  Lender acknowledgesthat the agreements in this Section are intended to be in fullsatisfaction of all or any alleged injuries or damages arising in connectionwith the Lender Released Matters.

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

 

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

 

### **.21**           Effect of Insolvency Proceeding. This Agreement shall remain in full force andeffect and continue to be effective should Borrower become the subject of anybankruptcy or insolvency proceeding. Notwithstanding the provisions of Section 3 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 byLender returned, disgorged, rescinded, set aside, or reduced in amount, thenthe release 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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### **.22**           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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### **.23**           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, the parties hereto have causedthis Agreement to be duly executed and delivered as of the day and yearspecified 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 hasno objection to it.  Oxford agrees tonotify Lender and Borrower upon its receipt of the Transfer.  Oxford agrees that it has no claims againstLender arising from the intercreditor agreement between them and from Lender’sreceipt of collateral proceeds from accounts of Borrower and waives andreleases 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**

 

**JointUCC Filing: GE and Oxford**

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

 

**GE UCCFilings:**

 
| **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                |

 

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