Loan Proposal Agreement between Oxford Finance Corporation and Favrille, Inc. (May 2004)

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.

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.

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

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

%