EXECUTIVE SERVICE AGREEMENT

Service Agreement

1.     

INTRODUCTION

1

2.     

COMMENCEMENT OF EMPLOYMENT AND TERM

1

3.     

JOB TITLE AND DUTIES

2

4.     

REMUNERATION

3

5.     

PLACE OF WORK

6

6.     

HOURS OF WORK

6

7.     

BENEFITS

6

8.     

HOLIDAY ENTITLEMENT

8

9.     

SICKNESS/INCAPACITY

9

10.     

TERMINATION

10

11.     

CONFIDENTIALITY

13

12.     

RESTRICTIONS DURING EMPLOYMENT

15

13.     

POST-TERMINATION RESTRICTIONS

15

14.     

INTELLECTUAL PROPERTY RIGHTS

17

15.     

GRIEVANCE AND DISCIPLINARY PROCEDURE

18

16.     

DATA PROTECTION

18

17.     

TELECOMMUNICATIONS

19

18.     

ASSOCIATED AND PARENT COMPANY

19

19.     

NOTICES

20

20.     

APPLICABLE LAW

20

21.     

MISCELLANEOUS

20

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Service Agreement

(1)

MIVA (UK) LIMITED whose company registration number is 3971244 and whose registered office is at First Floor, Euston Xchange, 194 Euston Road, London NW1 2DA (the “Company”); and

(2)

ADAM POULTER of Waytefield, 9 Long Wood Drive, Jordans, Buckinghamshire, HP9 2SS (“you” or “your”).

1.

INTRODUCTION

1.1

This Agreement is in substitution for any previous agreement or arrangement between you and the Company which shall be deemed to be terminated by mutual agreement on the date hereof. The Company agrees to employ you and you agree to be employed by the Company on and subject to the terms and conditions set out in this Agreement and you hereby waive your rights to bring any claim against the Company in respect of the termination of any previous agreement or arrangement between you and the Company.

1.2

References in this Agreement to statutes or regulations shall include any statute or regulation modifying, re-enacting, extending or made pursuant to the same or which is modified, re-enacted or extended by the same. Headings are for ease of reference only and shall not be taken into account in the construction of this Agreement. Words importing the singular number shall include the plural and vice versa and words importing the masculine shall include the feminine and neuter and vice versa.

2.

COMMENCEMENT OF EMPLOYMENT AND TERM

2.1

Your employment with the Company under the terms of this Agreement will begin on 14 October 2005 (your “Start Date") and will continue until terminated in accordance with this Agreement.

2.2

You warrant that by entering into and performing your obligations under this Agreement, you will not be in breach of any agreement with or obligation owed by you to any third party and that the Company may lawfully employ you in the UK. You undertake to indemnify and hold harmless the Company against all claims, costs, damages, liabilities and expenses which the Company may incur in connection with any claim that you were, or are, not so at liberty.

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Service Agreement

3.

JOB TITLE AND DUTIES

3.1

You are employed as Managing Director, Europe. You will report to the Chief Operating Officer of the Company’s ultimate parent (your “manager”). You recognise and acknowledge that this position is one of trust and confidence and that you will have access to Confidential Information (as described in Clause 11.1 of this Agreement). This is a key position in which you have a special obligation to further the interests of the Company and of its Associated Companies and to develop its and/or their businesses.

3.2

During the continuance of your employment you will:

3.2.1

unless prevented by ill health or incapacity devote the whole of your attention and abilities to carrying out your duties under this Agreement;

3.2.2

faithfully and diligently perform such duties and exercise such powers consistent with them as your manager may from time to time properly assign to or confer on you (provided that such duties and powers are commensurate with your status and skills);

3.2.3

(if and so long as your manager so directs) perform and exercise the said duties and powers on behalf of any Associated Company and act as a director or other officer of any Associated Company;

3.2.4

do all in your power to protect promote develop and extend the business interests and reputation of the Company and of any Associated Companies;

3.2.5

at all times and in all respects conform to and comply with the Memorandum and Articles of the Company (as amended from time to time), with the policies and procedures of the Company and of any Associated Company that are in force from time to time and which relate to your employment, and with the lawful and reasonable directions your manager; and

3.2.6

promptly give to your manager (in writing if so requested) all such information explanations and assistance as it may require in connection with the business and affairs of the Company and any Associated Company for which you are required to perform duties.

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Service Agreement

4.

REMUNERATION

4.1

Your salary will be paid at a rate of £200,000 per annum. Your Basic Salary will be reviewed during January 2006 and thereafter will be reviewed annually during the last quarter of each year but without any commitment on the Company to increase your Basic Salary. No salary review will result in a decrease in your Basic Salary.

4.2

Your Basic Salary will be paid monthly in arrears in twelve equal monthly instalments on or about the last day of each month by credit transfer into a bank or building society account nominated by you.

Deductions from wages

4.3

For the purposes of Part II of the Employment Rights Act 1996 you hereby authorise the Company to deduct from your Basic Salary, or any other sums due to you from the Company, any sums due from you to the Company, including without limitation any overpayment of salary, or in accordance only with clause 8.4 accrued holiday pay.

Expenses

4.4

You will be reimbursed for reasonable business expenses properly incurred in the performance of your duties in accordance with Company policy on submission of appropriate receipts and such supporting evidence as the Company may from time to time reasonably require.

4.5

Director’s liability insurance

The Company shall maintain in force directors’ liability insurance, at a reasonable level, in respect of the performance by you of your duties, excepting in respect of any claims which arise as the result of a criminal act, act of gross negligence or act in breach of your fiduciary duties as a director of the Company.

Fees

4.6

You shall not be entitled to any director’s or other fees from the Company or any Associated Company or to any fees in respect of any office you may hold as nominee or representative of the Company and/or of an Associated Company unless otherwise agreed in writing between the parties to this Agreement.

Bonus

4.7

Except in respect of the financial year ending 31 December 2005, you are entitled to receive an annual bonus of up to £100,000 per annum, depending on meeting and/or exceeding objectives set by your manager from time to time based on, inter alia, the Company’s annual financial targets. You acknowledge that if the objectives are not fully met, you may receive no bonus.

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Service Agreement

4.8

Provided you have not given or been given notice to terminate your employment as at the date your bonus is payable, your bonus for the year ending 31 December 2005 (the “2005 Bonus”) will be:

     £20,000 plus (£50,000 x A),

     where “A” = the number of days you are actually employed in 2005

                                                                     365

If the Company beats its financial targets for such financial year, “A” will be increased by three percent (3%) for every one percent (1%) that the Company is over target.

4.9

Your bonus will be paid annually once the Company's annual financial statements have been audited (which is anticipated to be in the first quarter after each financial year end of the Company) on or about the last day of the relevant month by credit transfer into a bank or building society account nominated by you.

4.10

If you have given or been given notice to terminate your employment as at the date your 2005 Bonus is payable, you will receive no 2005 Bonus. Otherwise, if your employment with the Company is terminated by the Company without Cause (as defined below) or by you for Good Reason (as defined below) before the date your next bonus is payable, you will be entitled to a pro rata amount for each full quarter you are employed by the Company, which will be paid once the Company’s financial statements for such quarter(s) have been finalised.

4.11

“Good Reason” means any one or more of the following grounds:

(i)

a change in your title(s), status, position or responsibilities without your written consent, which does not represent a promotion from your existing status, position or responsibilities, despite your written notice to the Company of your objection to such change and the Company’s failure to address such notice in a reasonable fashion within 30 days of such notice;

(ii)

the assignment to you of any duties or responsibilities which are inconsistent with your status, position or responsibilities, despite your written notice to the Company of your objection to such change and the Company’s failure to address such notice in a reasonable fashion within 30 days of such notice;

(iii)

if there is a reduction in your Basic Salary;

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Service Agreement

(iv)

a breach by the Company of any material term or provision of this Agreement;

(v)

a relocation of the Company’s offices at First Floor, Euston Xchange, 194 Euston Road, London NW1 2DA to a location more than 35 miles from Euston Xchange, along with a request that you make the relocated office the primary office from which you work for the Company; unless the recommendation to change the Company’s offices in such a situation is made or endorsed by you.”

“Cause” shall refer only to any one or more of the following grounds:

(i)

commission of a material and substantive act of theft, including, but not limited to, misappropriation of funds or any property of the Company or any Associated Company;

(ii)

intentional engagement in activities or conduct clearly injurious to the best interests or reputation of the Company or any Associated Company which in fact result in material and substantial injury to the Company or any Associated Company;

(iii)

refusal to perform your assigned duties and responsibilities (so long as the Company does not assign any duties or responsibilities which would give the you Good Reason to terminate your employment) after receipt by you of written detailed notice and reasonable opportunity to cure;

(iv)

gross insubordination by you, which shall consist only of a wilful refusal to comply with a lawful written directive to you issued pursuant to a duly authorized resolution adopted by the Board of Directors of the Company (so long as the directive does not give the you Good Reason to terminate your employment);

(v)

the clear violation of any of the material terms and conditions of this Agreement or any written agreement or agreements you may from time to time have with the Company (following 30 days' written notice from the Company specifying the violation and your failure to cure such violation within such 30 day period);

(vi)

your substantial dependence, as determined by the Board of Directors of the Company, on alcohol or any narcotic drug or other controlled or illegal substance which materially and substantially prevents you from performing your duties hereunder; or

(vii)

the final and unappealable conviction of you of a crime, which, in the reasonable opinion of the Board of Directors of the Company adversely affects your ability to carry out your role or reputation of the Company.

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Service Agreement

4.12

Any bonus payments will be subject to the deduction of income tax and national insurance contributions.

5.

PLACE OF WORK

5.1

Your normal place of work is the Company’s offices at First Floor, Euston Xchange, 194 Euston Road, London NW1 2DA or any such other place as the Company may from time to time reasonably require.

5.2

You will be required to work at other locations from time to time to meet the needs of the Company's business, both inside and outside the UK. You will be required to travel on the business of the Company to such places as may be reasonably necessary for the proper performance of your duties, both inside and outside the UK.

6.

HOURS OF WORK

6.1

The Company’s normal business hours are 9.00 am to 6.00 pm Monday to Friday (inclusive).

6.2

Your remuneration package is calculated on the basis that you will work as necessary during as well as outside normal business hours in order properly to perform your duties. Accordingly, you will not be paid for any additional hours worked outside normal business hours.

6.3

Because of the autonomous nature of your role, the duration of your working time is not measured or monitored, or determined by the Company and the limit on weekly working time set out in Regulation 4 of the Working Time Regulations 1998 (or such other regulations amending or subsisting those) from time to time) (the “Regulations”) does not apply to your employment.

7.

BENEFITS

Pension Scheme

7.1

You will be eligible for membership of such pension scheme as the Company may operate for the benefit of its employees in accordance with its obligations under the Welfare Reform and Pensions Act 1999 and the Stakeholder Pension Scheme Regulations 2000. The Company will not make contributions on your behalf into such scheme.

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7.2

A contracting-out certificate is not in force in respect of your employment with the Company for the purpose of the Pension Schemes Act 1993.

Share Options

7.3

On the Start Date and pursuant to the terms of the 2004 Stock Incentive Plan (the “Plan) and the stock option agreements issued in accordance with the Plan you will be granted options to acquire at Fair Market Value (as defined in the Plan) an aggregate of 65,000 shares of Common Stock of the Company’s Ultimate parent, of which 16,250 options will vest on each of the first four anniversaries of this Agreement.  The board of directors of the Company’s Ultimate parent (“Board of Directors”) or its compensation committee (“the Compensation Committee”), as applicable, shall review your performance on an annual basis and pursuant to the same review process employed by the Board of Directors for its other executive officers.  In connection with such annual review, you may be entitled to receive additional grants of stock options.  Such additional options will be granted, if at all, in the sole discretion of the Board of Directors or the Compensation Committee on terms and conditions they determine. Notwithstanding the foregoing and provided you continue to be employed by the Company on the 2 January 2006 you shall receive an additional grant of stock options, again at Fair Market Value, on that date for 50,000 shares, subject to standard vesting and termination provisions.

7.4

If there is a change in control (as that term is used in the governing documents of any stock option agreement) of the Company’s Ultimate parent consummated:

(i)  within three (3) months of the Start Date, 50% of any stock options granted to you shall fully vest on the date the change in control is consummated and shall remain exercisable during the term of such option(s) as if you were still employed by the Company; or

(ii)  after three (3) months of the Start Date, any stock options granted to you shall fully vest on the date the change in control is consummated and shall remain exercisable during the term of such option(s) as if you were still employed by the Company. 

Additionally, notwithstanding any provisions to the contrary in any stock option agreements or plans, if your employment with the Company is terminated by the Company without Cause or by you for Good Reason, any stock options granted to you shall immediately fully vest and remain exercisable during the term of such options.

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Service Agreement

7.5

Notwithstanding anything herein to the contrary, the Company and/or its Ultimate parent, in its or their sole discretion, may grant you restricted stock units or other equity compensation in lieu of stock options, provided the substituted equity compensation gives you the opportunity to acquire the same or a substantially similar amount of equity ownership in the Company’s Ultimate parent as if you had been granted stock options, but adjusting such equity compensation award to take into account whether you are required to pay any consideration for the equity compensation as well as such other factors as the Board of Directors or the Compensation Committee, as applicable, shall determine in its or their sole discretion.

Change Of Control

7.6

Notwithstanding clauses 4.10 above and 10.1 to 10.4 inclusive below, if there is a change of control (as defined in clause 7.4 above), then you will be entitled to terminate your employment during the Window Period (as defined below) upon seven days’ written notice to the Company, in which case, the Company will pay you an amount equal to 100% of your then current annual Basic Salary, but shall not be liable to you for any further payment or compensation. The Basic Salary shall be paid in equal instalments over a twelve (12) month period after the date your employment terminates in accordance with the terms of this Agreement. “Window Period” shall mean the period of thirty (30) days beginning 180 days after a change of control. If your employment is terminated without notice or without payment in lieu of notice and without Cause, as defined in clause 4.11 at any time after a change of control (as defined in clause 7.4 above) through the end of the Window Period then, in lieu of any claim against the Company you may have based on termination of your employment, including as provided in Section 10 hereof (but excluding any claim in respect of the vesting of stock options as provided for in clause 7.4), you shall be entitled to 100% of your then current annual Basic Salary payable as set forth in the preceding sentence.

8.

HOLIDAY ENTITLEMENT

8.1

Your paid annual holiday entitlement is 25 days per year. In addition, you are entitled to a maximum of eight days’ holiday on recognised bank or public holidays. These entitlements include your statutory holiday entitlement under the Regulations which, in each holiday year, shall be deemed to be taken first. The Company’s holiday year is 1 January to 31 December.

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Service Agreement

8.2

Holidays must be taken at times convenient to the Company. Reasonable notice of your intention to take holiday must be given to your manager and no holiday shall be taken without consent in writing from your manager. No single period of leave may exceed ten working days without the express consent of your manager.

8.3

The Company encourages employees to take all of their holiday entitlement in the relevant holiday year. If this is not possible, then, with the written consent of your manager, you may be permitted to carry a maximum of two days of your accrued holiday entitlement into the next holiday year.

8.4

On the termination of your employment other than for gross misconduct, outstanding holiday entitlement will be paid on a pro-rata basis at 1/