Document:

Exhibit 10.1

 

 

May 11, 2004

 

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

  
	
   

  	
   

  	
   

  
	
  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 Amount:

  	
   

  	
  $2,500,000

  
	
   

  	
   

  	
   

  
	
  Funding Dates:

  	
   

  	
  January 2004 through
  June 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:

  	
   

  	
  3.1545% of the Loan
  Amount per month for 36 months

  
	
   

  	
   

  	
  2.7619% of the Loan Amount
  per month for 42 months

  
	
   

  	
   

  	
   

  
	
  Payment Rate Implicit
  Interest:

  	
   

  	
  8.96%

  
	
   

  	
   

  	
   

  
	
  Periodicity:

  	
   

  	
  Monthly, in advance.

  
	
   

  	
   

  	
   

  
	
  Index Basis:

  	
   

  	
  The three-year Treasury
  Bill Weekly Average rate of 2.96% as published in Federal Reserve statistical
  release H.15 (519) on May 10, 2004.

  

 

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

 

 

	
  Payment Commencements:

  	
   

  	
  First day of the month
  following a Schedule funding.

  
	
   

  	
   

  	
   

  
	
  Stock Warrants:

  	
   

  	
  Borrower shall issue to
  Lender warrants for the purchase of stock equal to two percent (2%) of the
  Loan Amount using a share strike price equal to the most recent preferred
  equity round.

  
	
   

  	
   

  	
   

  
	
  Documentation:

  	
   

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

  
	
   

  	
   

  	
   

  
	
  Facility Fee:

  	
   

  	
  Borrower will provide a
  $15,000 Facility Fee to Lender upon execution of this proposal letter. $5,000
  will be retained by Lender after loan facility approval to cover associated
  costs. The remaining $10,000 will be applied to first payment. Should the
  Lender not issue an approval to provide funding, the Facility Fee, less any
  transaction costs, will be returned.

  
	
   

  	
   

  	
   

  
	
  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.

  
	
   

  	
   

  	
   

  
	
  Management Assistance:

  	
   

  	
  Lender will make
  available to Borrower significant managerial assistance, including equipment
  tracking and financing, cash flow and expense management, and general
  financing opportunities.

  
	
   

  	
   

  	
   

  
	
  Expiration:

  	
   

  	
  This loan proposal will
  expire if a signed copy of this proposal letter is not received by Oxford on
  or beforeMay 31, 2004.

  

 

2

 

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.

 

 

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:

  	
  May 28, 2004

  	
   

  	
   

  
							

 

3

 

ATTACHMENT A

 

 

Estimated Categories of Equipment:

 

	
  Category

  	
   

  	
  Amount

  	
   

  	
  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lab equipment, furniture, manufacturing and computer
  hardware

  	
   

  	
  $

  	
  1,500,000

  	
   

  	
  60

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  All other softcosts

  	
   

  	
  $

  	
  1,000,000

  	
   

  	
  40

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  2,500,000

  	
   

  	
  100

  	
  %

  

 

4Exhibit
10.2

 

AMENDMENT

 

THIS AMENDMENT is made as of the 16th day of
June, 2005, between Oxford Finance Corporation
(“Secured Party”) and Favrille, Inc.
(“Debtor”) in connection with that certain Master Security Agreement,
dated as of  July 26, 2004 (“Agreement”).  The terms of this Amendment are hereby
incorporated into the Agreement as though fully set forth therein.  Section references below
refer to the section numbers of the Agreement. 
The Agreement is hereby amended as
follows:

 

1.  Subsection (r) of Section 2 is hereby added and
reads as follows:

 

“Debtor shall not create, incur, assume or
permit to exist any Additional Indebtedness except Permitted Indebtedness.”

 

2.  Subsection (xviii) of Section 7(a) is hereby
added and reads as follows:

 

“Debtor breaches any of its obligations under
Section 2(r);”

 

3.  Subsection (j) of Section 8 is hereby added
and reads as follows:

 

“As used herein, “Additional
Indebtedness” means, with respect to Debtor or any of its
subsidiaries, the aggregate amount of, without duplication, (a) all obligations
of such Person for borrowed money, (b) all obligations of such Person evidenced
by bonds, debentures, notes or other similar instruments, (c) all obligations
of such Person to pay the deferred purchase price of property or services
(excluding trade payables aged less than one hundred eighty (180) days), (d)
all capital lease obligations of such Person, (e) all obligations or
liabilities of others secured by a Lien on any asset of such Person, whether or
not such obligation or liability is assumed, (f) all obligations or liabilities
of others guaranteed by such Person, and (g) any other obligations or
liabilities which are required by GAAP to be shown as debt on the balance sheet
of such Person.  Unless otherwise
indicated, the term “Additional Indebtedness”
shall include all Indebtedness of Debtor and all of its subsidiaries.

 

As used herein, “Permitted
Indebtedness” means and includes: (i) Indebtedness of Debtor to
Secured Party, (ii) Additional Indebtedness existing on the date hereof, (iv)
Subordinated Indebtedness, and (v) Additional Indebtedness up to a maximum of
fifteen million dollars ($15,000,000.00).

 

As used herein, “Subordinated
Indebtedness” means Additional Indebtedness subordinated to the
Indebtedness of Debtor to Secured Party on terms and conditions acceptable to
Secured Party in its sole discretion.”

 

This
Amendment is only effective until Debtor raises an additional Twenty Million
Dollars in gross cash proceeds on or after the date hereof from the sale by Debtor
of its capital stock, at which sections 1, 2 and 3 above shall no longer be
effective.

 

TERMS USED, BUT NOT OTHERWISE DEFINED
HEREIN SHALL HAVE THE MEANINGS GIVEN TO THEM IN THE AGREEMENT.  EXCEPT AS EXPRESSLY AMENDED HEREBY, THE
AGREEMENT SHALL REMAIN IN FULL FORCE AND EFFECT.   IF THERE IS ANY CONFLICT BETWEEN THE
PROVISIONS OF THE AGREEMENT AND THIS AMENDMENT, THEN THIS AMENDMENT SHALL
CONTROL.

 

 

IN WITNESS WHEREOF, the parties hereto have executed this
Amendment simultaneously with the Agreement by signature of their respective
authorized representative set forth below.

 

	
  Oxford Finance Corporation

  	
  Favrille, Inc.

  
	
   

  	
   

  
	
  By:

  	
  /s/ Michael J. Altenburger

  	
   

  	
  By:

  	
  /s/ Tamara A. Seymour

  	
   

  
	
  Name:

  	
  Michael J. Altenburger

  	
   

  	
  Name:

  	
  Tamara A. Seymour

  	
   

  
	
  Title:

  	
  Chief Financial Officer

  	
   

  	
  Title:

  	
  CFOExhibit 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.

 

1

 

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

  	
   

  
					

 

2

 

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

  	
  %

  

 

3

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