Document:

Prepared and filed by St Ives Financial

Exhibit 10.46

PXRE GROUP LTD.

CODE OF BUSINESS CONDUCT AND ETHICS

FOR

DIRECTORS, OFFICERS AND EMPLOYEES

FEBRUARY 10, 2004

 
Introduction

     The reputation and integrity of PXRE Group Ltd., its subsidiaries and its affiliates (the “Company”) are valuable assets that are vital to our Company’s success.  This Code of Business Conduct and Ethics (this “Code”) is designed to give you a broad and clear understanding of the conduct that we expect from you to protect and enhance our reputation and integrity.  This Code applies to all of our Company’s directors, officers and employees, who, unless otherwise specified, are referred to herein jointly as “employees”.

     Each employee of the Company is responsible for conducting the Company’s business in a manner that demonstrates a commitment to the highest standards of integrity.  This integrity is critical to ensure that the Company’s business is conducted fairly, impartially, in an ethical and proper manner and in compliance with all laws and regulations.  No code of conduct can replace the thoughtful behavior of an ethical employee.  The purpose of this Code is to focus employees on areas of ethical risk, provide guidance to help employees recognize and deal with ethical issues, provide mechanisms for employees to report unethical conduct, and foster among employees a culture of honesty and accountability.  Dishonest
or unethical conduct or conduct that is illegal will constitute a violation of this Code, regardless of whether such conduct is specifically referenced herein.  Every employee has the responsibility to ask questions, seek guidance, take all responsible steps to prevent a violation of this Code, report suspected violations and express concerns about compliance with this Code.  

Implementation and Oversight

     The Company’s Board of Directors is ultimately responsible for the implementation of this Code.  The Board has designated Bruce Byrnes to be the compliance officer (the “Compliance Officer”) for the implementation and administration of this Code.

     Questions regarding the application or interpretation of this Code are inevitable.  Employees should feel free to direct questions to the Compliance Officer. 

     Requests for a waiver of a provision of this Code must be submitted in writing to the Compliance Officer for appropriate review.  An executive officer, director or appropriate Board committee will decide the outcome.  For conduct involving an executive officer or Board member, only the independent members of the Board of Directors or the Audit Committee of the Board has the authority to waive a provision of this Code.  The Audit Committee must review and approve any transaction in which an executive officer or director has a personal interest that could appear to conflict with that of the Company before it is consummated.  Transactions between the Company and Select Reinsurance Ltd., however, will be permitted if
they are reviewed, approved and reported in the manner set forth below.  In the event of an approved waiver involving the conduct of an executive officer or Board member, appropriate disclosure must be made to the Company’s shareholders as and to the extent required by any SEC rule or listing standard.

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     Statements in this Code to the effect that certain actions may be taken only with the “Company’s approval” mean that appropriate officers or Board directors must give prior written approval before the proposed action may be undertaken. 

     This Code should be read in conjunction with the Company’s other policy statements, including, without limitation, the Company’s Operating Guidelines, Supplemental Operating Guidelines, Anti-Money Laundering Program, Equal Opportunity Policy, Harassment Policy, Policy regarding Personal Loans to Directors and Executive Officers and Insider Trading Policy and Procedures Relating to Complaints about Accounting, Authority or Internal Accounting Controls.

     Employees will receive periodic training on the contents and importance of this Code and related policies and the manner in which violations must be reported and waivers must be requested.  Each employee of the Company will be asked to certify on an annual basis that he/she is in full compliance with this Code and related policy statements.

Reporting of Violations and Disciplinary Action

     Employees who observe, learn of, or, in good faith, suspect a violation of this Code by themselves or by another person must immediately report the violation to the Compliance Officer, or to the Chairman of the Audit Committee of the Board of Directors or through our hotline.  Employees who report violations or suspected violations in good faith will not be subject to retaliation of any kind.  A violation of the requirement to report violations or to cooperate in a Code investigation may result in disciplinary action.  

     In order to make it easier to report violations on a confidential basis, we have established a confidential employee hotline operated by a third party.  Violations can be reported confidentially on this hotline at (866) 300-8364.

     Reported violations will be investigated and addressed promptly and will be treated confidentially to the extent possible.  The Company strives to impose discipline for each Code violation that fits the nature and particular facts of the violation.  The Company uses a system of progressive discipline.  The Company generally will issue warnings or letters of reprimand for less significant, first-time offenses.  Violations of a more serious nature may result in suspension without pay, demotion, loss or reduction of bonus or option awards, or any combination.  Termination of employment generally is reserved for conduct such as theft or other violations amounting to a breach of trust, or for cases where a person has
engaged in multiple violations.

2

 
Compliance with Law and Regulations

     A variety of laws apply to the Company and its operations, and some carry criminal penalties.  These laws include insurance regulations, securities laws and state laws relating to duties owed by corporate directors and officers.  Examples of criminal violations of the law include stealing, embezzling, misapplying corporate or bank funds, using threats, physical force or other unauthorized means to collect money; making a payment for an expressed purpose on the Company’s behalf to an individual who intends to use it for a different purpose; or making payments, whether corporate or personal, of cash or other items of value that are intended to influence the judgment or actions of political candidates, government
officials or businesses in connection with any of the Company’s activities.  The Company must and will report all suspected criminal violations to the appropriate authorities for possible prosecution, and will investigate, address and report, as appropriate, non-criminal violations.

Conflicts of Interest

     The Company requires each of its employees to promptly report his or her outside associations and personal business, financial and other relationships and activities that may involve a conflict or appearance of a conflict between such employee and the Company to the Compliance Officer, unless such relationship or activity was already reported, so that the Company can take steps to avoid such conflicts of interest.  The term "outside association" refers to any affiliation, association or employment of an individual other than with the Company.  It is impractical to conceive of and set forth rules that cover all situations in which a conflict may arise.  The basic factor in all conflict situations is,
however, the division of loyalty or the perception of a division of loyalty, between the Company’s best interests and the interests of the employee that could possibly affect, or appear to affect, the employee’s judgment or actions relating to the Company.  Guidelines with respect to several of the more sensitive areas in which potential conflicts of interest are likely to occur are set forth below.  It is to be emphasized, however, that the following is not an exhaustive list of problem areas but rather a guide in applying the Company’s basic conflict of interest policy to other situations.  The important criterion is adherence to the spirit of this Code.

Business Relationships

     An employee may have a conflict of interest if he or she, a member of his or her immediate family, or his or her business partner owns or has a substantial direct or indirect interest in, or incurs an indebtedness to, a firm with which the Company has or is seeking to have a business relationship or with which the Company competes or is seeking to compete.  Investments in small amounts of the stocks or bonds of a large publicly held company should not, without more, give rise to any conflict of interest.  The question of when an investment becomes so substantial as to possibly affect or appear to affect an individual's judgment is, however, largely dependent on the particular circumstances and must be addressed on a
case by case basis.

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     Conflicts may also arise when an employee, a member of his or her immediate family, or his or her business partner holds a position as director, officer, employee or partner of or consultant, broker, finder or intermediary for a firm with which the Company has or is seeking to have a business relationship or with which the Company competes or is seeking to compete. 

     The Company expects that no individual will discharge his or her Company duties and responsibilities under circumstances where to do so might reflect discredit upon, or reasonably cause unfavorable criticism of the Company, or impair public confidence in the Company’s integrity.  Thus, such associations, interests and business relationships that might cause the employee not to act in the best interests of the Company, or that might be perceived to cause such divided loyalties, will be permitted only after it is first reported, reviewed and addressed in the manner prescripted by this Code, or otherwise established by the Committee. Notwithstanding the foregoing, transactions between the Company and Select
Reinsurance Ltd. shall be permitted if they are reported, reviewed, and approved in the manner prescribed by the Audit Committee as set forth below.

Acceptance of Gifts

     Gifts or favors – other than those of nominal value – from persons or entities with which the Company has or is seeking to have a business relationship or with which the Company competes or is seeking to compete and participation in more than occasional social activities with those with whom the Company maintains business relationships may cause or appear to cause a conflict of interest.

Outside Activities/Employment

     Any outside activity, including employment, should not encroach on the time and attention that employees are expected to devote to their corporate duties, should not adversely affect the quality or quantity of their work, and should not entail the employees’ use of corporate equipment, facilities or supplies, or imply (without the Company’s approval) the Company’s sponsorship or support.  In addition, under no circumstances are employees permitted to compete with the Company, or take for themselves or their family members or their business partners or associates business opportunities that belong to the Company or that they discover or that are discovered or made available to them by virtue of their
positions at the Company.  Full-time employees of the Company are prohibited from taking part in any outside employment without the Company’s prior approval.  

Civic/Political Activities

     Employees are encouraged to participate in civic, charitable and political activities so long as such participation does not encroach on the time and attention they are expected to devote to their company-related duties.  Such activities are to be conducted in a manner that does not involve the Company or its assets or facilities, and does not create an appearance of Company involvement or endorsement.  

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Transactions with Select Reinsurance Ltd.  

     Given the potential for a conflict of interest to arise with respect to Select Re, the Board of Directors closely monitors all transactions between the Company and Select Re on a regular basis to ensure that they are on fair and reasonable terms and are  likely to benefit the Company.  Historically, these transactions have provided a significant financial benefit to the Company, and the Board believes that it continues to be in the Company’s best interest to continue to do business with Select Re.  Therefore, the Company may continue to enter into transactions with Select Re provided that the Company’s Chief Financial Officer approves each transaction in advance and each new transaction is reported to the
Audit Committee at its next meeting.  In addition, the Chief Financial Officer shall provide a quarterly report to the Audit Committee summarizing the status of all open transactions between Company and Select Re.

Reporting Procedure

     Each employee must report promptly to the Compliance Officer the existence of any relationship, activity or interest, as it arises, that actually or potentially involves or may appear to involve a conflict of interest.  Failure to report such relationships, activities and interests will be a ground for disciplinary action.  

     The Compliance Officer will review the disclosure about conflicts of interest and potential conflicts of interest and determine the appropriate manner by which the Company’s approval, or disapproval, would be provided.  Employees must cooperate fully in the review process by providing all necessary information.  Company actions with respect to the conflict of interest or potential conflict of interest will take into account the spirit of this Code.  

     In addition, each employee must sign annually a statement reflecting his or her continuing awareness and understanding of this policy.  At the same time, the individual must report either the absence of potential conflicts or the possible areas of concern.

     All interests, relationships or participation in transactions disclosed by any employee in accordance with this policy shall be held in confidence unless the best interests of PXRE dictate otherwise.

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Resolution of Conflicts

     Actual or potential conflicts may be resolved in the following ways among others:

			
 	
•	
In the case of an offer of a gift, the appropriate resolution may be acceptance, rejection or transfer of the proffered gift to another individual.

			 	 	 
			
 	
•	
Where the nature of the conflict is such that the individual involved is not able to disclose the details thereof without breaching other confidences, he may upon notice to the Compliance Officer remove himself from all meetings, discussions and actions at which the matter is considered.

			 	 	 
			
 	
•	
Where the details of the conflict can be disclosed, the Compliance Officer may determine the proper action either alone or in consultation with the President, or the Chairman of the Audit Committee or the Board of Directors of the Company.
	 	 	 	 	 

			
 	
•	
An employee may appeal the determination by the Compliance Officer of a conflict of interest to the Audit Committee.
	 	 	 	 	 

			
 	
•	
Any interest, relationship or participation in a transaction that is fully disclosed in writing to, and is approved in writing by, the Compliance Officer or other appropriate persons shall be deemed not to involve a conflict of interest for purposes of this statement of policy.
	 	 	 	 	 

			
 	
•	
When it is concluded that a conflict actually or potentially exists, the Compliance Officer, the Audit Committee or the Board of Directors may suspend the individual from all or some of the individual's duties with the Company for such period of time and/or as to such matters as such appropriate persons consider to be appropriate, or request the resignation of the individual from his or her position with the Company.  
	 	 	 	 	 

			
 	
•	
In the event that the actual or potential conflict involves an association, the Company may disqualify the association from further business dealings with PXRE.
	 	 	 	 	 

			
 	
•	
In the event that the reported conflict of interest involves a director, the director may be required to recuse himself or herself from discussions and any decision by the Board on a matter.

Fair Dealing

     Each employee should deal fairly, at arm’s length, and in good faith with the Company’s customers, suppliers, regulators, business partners and others.  No employee may take unfair advantage of anyone through manipulation, misrepresentation, inappropriate threats, fraud, abuse of confidential information or other related conduct.  

Proper Use and Safeguarding of Company Assets

     Company assets, such as information, materials, computers, supplies, work time, intellectual property, facilities, software, and other assets owned or leased by the Company, or that are otherwise in the Company’s possession, may be used only for legitimate business purposes.  The personal use of Company assets without the Company’s approval is prohibited.

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Delegation of Authority

     Each full-time employee, and particularly each of the Company’s officers, must exercise due care to ensure that any delegation of authority is reasonable and appropriate in scope, and includes appropriate and continuous monitoring.  No authority may be delegated to employees who the Company has reason to believe, through the exercise of reasonable due diligence, may have a propensity to engage in illegal activities.

Handling of Confidential Information

     An employee may not use confidential information obtained through Company sources for his or her own or outside association's benefit.  In addition, confidential information about the Company must not be disclosed to others, including persons outside the Company, without the Company’s approval.

     Employees are prohibited from trading in securities while in possession of material inside information about the Company or obtained about third parties as a part of the employee’s business on behalf of the Company.  Among other things, trading while in possession of material inside information can subject the employee to criminal or civil penalties.  The Company’s policy on insider trading provides further guidance with respect to purchasing and sales of securities.

Media and Public Inquiries

     Employees should not disclose or “leak” information to the media or other persons outside the Company.  Unless your employment duties specifically include responding to outside inquiries, refer inquiries to the appropriate department:

			
 	
•	
Refer all inquiries from regulatory agencies to the legal department;
	 	 	 	 	 

			
 	
•	
Refer all inquiries from the news or trade media to public affairs, which identifies an appropriate spokesperson; and
	 	 	 	 	 

			
 	
•	
Refer all inquiries about current or former company employees to your local human resources representative.

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Handling of Financial Information and Public Disclosure

     All employees who participate in the preparation of any part of the Company’s financial information and other disclosures must follow these guidelines:

			
 	
•	
Act with honesty and integrity, avoiding violations of this Code.

			 	 	 
			
 	
•	
Provide the Company’s other employees, consultants, and advisors with information that is accurate, complete, objective, relevant, timely and understandable.

			 	 	 
			
 	
•	
Endeavor to ensure full, fair, timely, accurate and understandable disclosure in the Company’s periodic reports.

			 	 	 
			
 	
•	
Act in good faith, responsibly, and with due care, competence and diligence, without misrepresenting material facts or allowing your independent judgment to be subordinated.

			 	 	 
			
 	
•	
Proactively promote ethical behavior among peers in your work environment.

			 	 	 
			
 	
•	
Achieve responsible use of and control over all assets and resources employed or entrusted to you.

			 	 	 
			
 	
•	
Record or participate in the recording of entries in the Company’s books and records that are accurate to the best of your knowledge.

			 	 	 
			
 	
•	
Comply with the Company’s disclosure controls and procedures and internal controls and procedures for financial reporting.

8Prepared and filed by St Ives Financial

Exhibit 10.8

MIVA, INC.

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

     THIS EXECUTIVE EMPLOYMENT AGREEMENT is made this 18th day of November, 2005, (this “Agreement”) between MIVA, Inc. (“MIVA” or the “Company”), a Delaware corporation, and Anthony Garcia (“Executive”).

Recitals

     A.      Executive is currently employed by MIVA as its Chief Technology Officer on terms and conditions stated in an Executive Employment Agreement between MIVA and Executive, dated April 23, 2001.

     B.      The Company wishes to continue to employ Executive on the terms and conditions set forth in this Amended and Restated Employment Agreement.

Statement of Agreement

     In consideration of the foregoing, and of Executive's employment, the parties agree as follows:

     1.      Employment. Executive’s employment with MIVA shall be upon the terms and conditions hereinafter set forth to become effective upon execution of this Agreement (the “Effective Time”).

     2.      Duties. 

          (a)      Executive shall be employed:  (i) as the Chief Technology Officer of the Company, and (ii) to perform such other or additional duties and responsibilities consistent with Executive’s title(s), status, and position as the Board of Directors of MIVA may, from time to time, prescribe.

          (b)      So long as employed under this Agreement, Executive agrees to devote full time and efforts exclusively on behalf of the Company and to competently, diligently and effectively discharge all duties of Executive hereunder.  Executive shall not be prohibited from engaging in such personal, charitable, or other nonemployment activities as do not interfere with full time employment hereunder and which do not violate the other provisions of this Agreement.  Executive further agrees to comply fully with all reasonable policies of the Company as are from time to time in effect.

          (c)      The Executive shall be based out of the Company’s Ft. Myers, Florida office. If the Company decides to move its operations more than 35 miles from its current offices in Fort Myers, Florida, Executive shall not be required to relocate and, to the extent the Executive cannot perform his duties hereunder as a result of such a move, his non-performance will not constitute Cause (as defined below). 

 
      3.      Compensation.  As full compensation for all services rendered to the Company pursuant to this Agreement, in whatever capacity rendered, the Company will pay to Executive during the term hereof a minimum base salary at the rate of $225,000 per year (the "Basic Salary"), payable in accordance with the usual payroll practices of the Company.  The Basic Salary thereafter may be increased, but not decreased, from time to time, by the Board of Directors in connection with reviews of Executive’s performance occurring no less frequently than annually.  Executive will be entitled to receive incentive compensation pursuant to the terms of plans adopted by the Board of Directors or its
Compensation Committee from time to time.  The Board of Directors or its Compensation Committee, as applicable, shall review Executive's performance on an annual basis and pursuant to the same review process employed by the Board of Directors for the Company’s other executive officers.  In connection with such annual review, the Executive may be entitled to receive additional stock option grants.  Such options will be granted, if at all, in the sole discretion of the Board of Directors or its Compensation Committee on terms and conditions they determine. Notwithstanding the foregoing or any provisions to the contrary in any stock option agreements outstanding as of the date hereof, if there is a change in control of the Company (as that term is used in the governing documents of any
stock option agreement), any stock options granted to Executive shall immediately fully vest and remain exercisable during the term as if the Executive were still employed by the Company.  Additionally, for stock options granted after the Effective Time and notwithstanding any provisions to the contrary in any stock option agreements or plans, if the Executive's employment with the Company is terminated by the Company without Cause (as defined below) or by Executive for Good Reason (as defined below), any stock options granted to Executive shall immediately fully vest and remain exercisable during the term as if the Executive were still employed by the Company.

     4.      Business Expenses.  The Company shall promptly pay directly, or reimburse Executive for, all business expenses to the extent such expenses are paid or incurred by Executive during the term of employment in accordance with Company policy in effect from time to time and to the extent such expenses are reasonable and necessary to the conduct by Executive of the Company's business and properly substantiated.

     5.      Benefits.  During the term of this Agreement and Executive's employment hereunder, the Company shall provide to Executive such insurance, vacation, sick leave and other like benefits as are provided to other executive officers of the Company from time to time.    Executive will use his reasonable best efforts to schedule vacation periods to minimize disruption of the Company’s business.

     6.      Term; Termination.

          (a)      The Company shall employ the Executive, and the Executive accepts such employment, for an initial term commencing on the date of this Agreement and ending on the first anniversary of the date of this Agreement.  Thereafter, this Agreement shall be extended automatically for additional twelve-month periods, unless terminated as described herein.  Executive's employment may be terminated at any time as provided in this Section 6.  For purposes of this Section 6, "Termination Date" shall mean the date on which any notice period required under this Section 6 expires or, if no notice period is specified in this Section 6, the effective date of the
termination referenced in the notice.

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          (b)      The Company may terminate Executive's employment without Cause (as defined below) upon giving 30 days' advance written notice to Executive.  If Executive's employment is terminated without Cause under this Section 6(b), the Executive shall be entitled to receive (A) the earned but unpaid portion of Executive's Basic Salary and pro rata portion of Executive’s bonus, if any, through the Termination Date; (B) over a period of twelve (12) months following such Termination Date (the “Severance Period”) an amount equal to the sum of his (i) Basic Salary at the time of Termination, plus (ii) the Termination Bonus (as defined below); (C) any
other amounts or benefits owing to Executive under the then applicable employee benefit, long term incentive or equity plans and programs of the Company, which shall be paid or treated in accordance with Section 3 hereof and otherwise in accordance with the terms of such plans and programs; and (D) benefits, (including, without limitation health, life, disability and pension) as if Executive were an employee during the Severance Period.

          (c)      The Company may terminate Executive's employment upon a determination by the Company that "Cause" exists for Executive's termination and the Company serves written notice of such termination upon Executive.  As used in this Agreement, the term 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;

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

	 	 
	 	
          (iii)      refusal to perform his assigned duties and responsibilities (so long as the Company does not assign any duties or responsibilities which would give the Executive Good Reason to terminate his employment as described in Section 6(e)) after receipt by Executive of written detailed notice and reasonable opportunity to cure;

	 	 
	 	
          (iv)      gross insubordination by Executive, which shall consist only of a willful refusal to comply with a lawful written directive to Executive issued pursuant to a duly authorized resolution adopted by the Board of Directors (so long as the directive does not give the Executive Good Reason to terminate his employment as described in Section 6(e));

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

	 	 

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	 	           (vi)      Executive's
        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 Executive from
        performing his duties hereunder; or 

	 	 
	 	
          (vii)      the final and unappealable conviction of Executive of a crime which is a felony or a misdemeanor involving an act of moral turpitude, or a misdemeanor committed in connection with his employment by the Company, which causes the Company a substantial detriment.

In the event of a termination under this Section 6(c), the Company will pay Executive the earned but unpaid portion of Executive's Basic Salary through the Termination Date.  If any determination of substantial dependence under Section 6(c)(vi) is disputed by the Executive, the parties hereto agree to abide by the decision of a panel of three physicians appointed in the manner as specified in Section 6(d) of this Agreement.  If any determination of “Cause” is made under items 6(c), (i), (ii), (iii), (iv), (v), or (vii) which Executive contests, Executive shall have the opportunity, within 30 days of such determination, to personally appear in front of the Board of Directors and present his case to the Board of Directors and have the
Board of Directors reconsider the determination of Cause.

          (d)      Executive's employment shall terminate upon the death or permanent disability of Executive.  For purposes hereof, "permanent disability," shall mean the inability of the Executive, as determined by the Board of Directors of MIVA, by reason of physical or mental illness to perform the duties required of his under this Agreement for more than 120 days in any 360 day period. Upon a determination by the Board of Directors of MIVA that Executive's employment shall be terminated under this Section 6(d), the Board of Directors shall give Executive 30 days' prior written notice of the termination.  If Executive disputes a determination of the Board of
Directors under this Section 6(d), the parties agree to abide by the decision of a panel of three physicians.  MIVA will select a physician, Executive will select a physician and the physicians selected by MIVA and Executive will select a third physician.  Executive agrees to make himself available for and submit to examinations by such physicians as may be directed by the Company.  Failure to submit to any examination shall constitute a breach of a material part of this Agreement.   In the event of termination due to death or permanent disability, the Company will pay Executive, or his legal representative, the earned but unpaid portion of Executive's Basic Salary through the Termination Date and the earned but unpaid portion of any vested incentive compensation under and consistent with
plans adopted by the Company prior to the Termination Date.

          (e)      The Executive may terminate his employment for Good Reason (as defined below) upon giving 30 days advance written notice to the Company.  If Executive's employment is terminated with Good Reason under this Section 6(e), the Executive shall be entitled to receive (A) the earned but unpaid portion of Executive's Basic Salary and pro rata portion of Executive’s bonus, if any, through the Termination Date; (B) over a period of twelve (12) months after the Termination Date an amount equal to the sum of his (i) Basic Salary at the time of the Termination Date, plus (ii) the Termination Bonus (as defined below); (C) any other amounts or benefits owing to
Executive under the then applicable employee benefit, long term incentive or equity plans and programs of the Company, which shall be paid or treated in accordance with Section 3 hereof and otherwise in accordance with the terms of such plans and programs; and (D) benefits, (including, without limitation health, life, disability and pension) as if Executive were an employee during the Severance Period.  As used in this Agreement, the term "Good Reason" means any one or more of the following grounds:

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(i)	
a change in Executive’s title(s), status, position or responsibilities without Executive's written consent, which does not represent a promotion from his existing status, position or responsibilities, despite Executive’s written notice to the Company of his 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 Executive of any duties or responsibilities which are inconsistent with his status, position or responsibilities as set forth in Section 2 hereof, despite Executive’s written notice to the Company of his 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 Executive's Basic Salary;

			 	 
			
(iv)	
if there is a Change in Control of the Company and Executive terminates his employment during the “Window Period” (as defined below);

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

			 	 
			
(vi)	
a relocation of the Company’s offices in Fort Myers, Florida to a location more than 35 miles from the current location.

          (f)      The Executive may terminate his employment for any reason (other than Good Reason) upon giving 30 days' advance written notice to the Company.  If Executive's employment is so terminated under this Section 6(f), the Company will pay Executive the earned but unpaid portion of Executive's Basic Salary through the Termination Date and the earned but unpaid portion of any vested incentive compensation under and consistent with plans adopted by the Company prior to the Termination Date.

          (g)      In the event of the Executive's death during the Severance Period, payments of Basic Salary under this paragraph 6 and payments under the Company's employee benefit plan(s) shall continue to be made in accordance with their terms during the remainder of the Severance Period to the beneficiary designated in writing for such purpose by the Executive or, if no such beneficiary is specifically designated, to the Executive's estate.

          (h)      As used in this Agreement, the term “Bonus” shall mean any bonus, incentive compensation or any other cash benefit paid or payable to the Executive under any incentive compensation grant or plan, excluding signing bonuses and the Company's stock incentive plan.  For purposes of this Agreement, the Executive's “Termination Bonus” shall be equal to the amount of the Executive's Bonus for the four (4) fiscal quarters immediately preceding the Termination Date, provided, however, if there has been a Change in Control of the Company the Termination Bonus shall be an amount equal to the greater of (i) the preceding calculation or (ii)
Executive’s Bonus for the four (4) fiscal quarters immediately preceding the Change in Control of the Company.

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          (i)      As used in this Agreement, the term “Window Period” shall mean the period of time after a Change in Control in which Executive can terminate his employment with the Company for any reason and the termination shall be deemed a termination for Good Reason for purposes of this Agreement.  The Window Period begins 180 days after a Change in Control and lasts for thirty (30) days.

          (j)       As used in this Agreement, the term “Change in Control” as a capitalized term shall mean the occurrence of any one of the following events: 

               (i) any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing thirty-five percent (35%) or more, excluding in the calculation of Beneficial Ownership securities acquired directly from the Company, of the combined voting power of the Company's then outstanding voting securities; 

               (ii) any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing fifty-one percent (51%) or more of the combined voting power of the Company’s then outstanding voting securities;

               (iii) the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on the Effective Time, constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board or nomination for election by the Company's stockholders was approved or recommended by a vote of the at least two-thirds (2/3) of the directors then still in office who either were directors
on the Effective Time or whose appointment, election or nomination for election was previously so approved or recommended; 

               (iv) there is a consummated merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation, other than (A) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving or parent entity) more than fifty percent (50%) of the combined voting power of the voting securities of the Company or such surviving or parent equity outstanding immediately after such merger or consolidation or (B) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in which no person, directly or indirectly, acquired twenty-five percent (25%) or more of the combined voting power of the Company's then outstanding securities (not including in the securities beneficially owned by such person any securities acquired directly from the Company or its Affiliates); or 

               (v) the stock holders of the Company approve a plan of complete liquidation of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets (or any transaction having a similar effect), other than a sale or disposition by the Company of all or substantially all of the Company's assets to an entity, at least fifty percent (50%) of the combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportions as their ownership of the Company immediately
prior to such sale. 

6

For purposes of this Section 6, the following terms shall have the following meanings: 

               (i) "Affiliate" shall mean an affiliate of the Company, as defined in Rule 12b-2 promulgated under Section 12 of the Securities Exchange Act of 1934, as amended from time to time (the "Exchange Act"); 

               (ii) "Beneficial Owner" shall have the meaning set forth in Rule 13d-3 under the Exchange Act; 

               (iii) "Person" shall have the meaning set forth in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (1) the Company, (2) a trustee or other fiduciary holding securities under an employee benefit plan of the Company, (3) an underwriter temporarily holding securities pursuant to an offering of such securities or (4) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of shares of Common Stock of the Company.

     7.      Indemnity.  

          (a)      The Company agrees that if the Executive is made a party, is threatened to be made a party or reasonably anticipates being made a party, to any formal or informal action, suit or proceeding, whether civil, criminal, administrative or investigative (a "Proceeding"), by reason of the fact that he is or was a director, officer, manager, trustee, representative, consultant or employee of the Company or is or was serving at the request of the Company as a director, officer, member, employee, manager, trustee, representative, consultant or agent of another corporation, partnership, joint venture, trust or other enterprise, including service with
respect to employee benefit plans, whether or not the basis of such Proceeding is the Executive's alleged action in an official capacity while serving as a director, officer, member, employee, manager, trustee, representative, consultant or agent, the Executive shall be promptly indemnified and held harmless by the Company to the fullest extent permitted by law against all cost, expense, liability and loss (including, without limitation, attorney's fees and other professional fees and charges, judgments, fines, interest, expenses of investigation, ERISA excise taxes or other liabilities or penalties and other amounts paid or to be paid in settlement if such settlement is approved in advance by the Company, which approval shall not be unreasonably withheld) reasonably incurred or suffered
by the Executive in connection therewith, or in connection with seeking to enforce his rights under this Section 7 and such indemnification shall continue as to the Executive even if he has ceased to be a officer, director, member, employee, manager, trustee, representative, consultant or agent of the Company or other entity and shall inure to the benefit of the Executive's heirs, executors and
administrators.

7

          (b)      The Company hereof shall not indemnify Executive pursuant to Section 7(a):

	 	
          (i)      except to the extent the aggregate losses to be indemnified hereunder exceed the amount of such losses for which Executive is indemnified pursuant to any directors and officers liability insurance purchased and maintained by the Company;

	 	 
	 	
          (ii)      in respect to remuneration paid to Executive if it shall be determined by a final judgment or other final adjudication that such remuneration was in violation of law;

	 	 
	 	
          (iii)      on account of any suit in which judgment is rendered against Executive for an accounting of profits made from the purchase or sale by Executive of securities of the Company pursuant to the provisions of Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar provisions of any federal, state or local statutory law;

	 	 
	 	
          (iv)      on account of Executive's material breach of any provision of this Agreement; 

	 	 
	 	
          (v)      on account of Executive's act or omission being finally adjudged to involve intentional misconduct, a knowing violation of law, or grossly negligent conduct; or

	 	 
	 	
          (vi)      if a final decision by a Court having jurisdiction in the matter shall determine that such indemnification is not lawful.

          (c)      If the Executive is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of the cost, expense, liability and loss reasonably incurred or suffered by the Executive in the investigation, defense, appeal or settlement of any Proceeding, but not, however, for the total amount thereof, the Company shall nevertheless indemnify the Executive for the portion of the cost, expense, liability and loss to which the Executive is entitled.

          (d)      The indemnification provided in this Agreement is in addition to, and not in derogation of, any rights to indemnification or advancement of expenses to which the Executive may otherwise be entitled under the Certificate of Incorporation or Bylaws of the Company, any resolutions of the Board of Directors, any indemnification contract or agreement. 

          (e)      The Company shall advance all expenses incurred by the Executive in connection with the investigation, defense, settlement or appeal of any Proceeding (including amounts actually paid in settlement of any such Proceeding).  The Executive hereby undertakes to repay such amounts advanced only if, and to the extent that, it shall ultimately be determined that the Executive is not entitled to be indemnified by the Company as authorized hereby.  Any advances made hereunder shall be paid by the Company to the Executive within twenty (20) days following delivery of a written request therefor by the Executive to
 the Company.

 8

 

          (f)      Neither the failure of the Company (including the Board, independent legal counsel or stockholders) to have made a determination prior to the commencement of any Proceeding concerning payment of amounts claimed by the Executive under Section 7(a) that indemnification of the Executive is proper because he has met the applicable standard of conduct, nor a determination by the Company (including the Board, independent legal counsel or stockholders) that the Executive has not met such applicable standard of conduct, shall create a presumption that the Executive has not met the applicable standard of conduct.

          (g)      During the Executive's employment with the Company and thereafter, the Company agrees to continue and maintain a directors' and officers' liability insurance policy covering the Executive on terms and conditions no less favorable to his in any respect (including, but not limited to, with respect to the period of coverage, scope, exclusions, amounts and deductibles) than the coverage then being provided to any other present or former director or senior executive of the Company.

          (h)      Executive agrees that Executive will reimburse the Company for all customary and reasonable expenses paid by the Company in defending any civil or criminal action, suit or proceeding against Executive in the event and only to the extent that it shall be ultimately determined that Executive is not entitled to be indemnified by the Company for such expenses under the provisions of Delaware law (or the laws of the Company’s state of incorporation at the time), federal securities laws, the Company’s By-laws or this Agreement.

     8.     Certain Additional Payments by the Company.

          (a)     Anything in this Agreement to the contrary  notwithstanding, in the event it shall be determined that any payment, award, benefit or distribution (or any acceleration of any payment, award, benefit or distribution) by the Company (or any of its affiliated entities) or any entity which effectuates a Change in Control (or any of its affiliated entities) to or for the benefit of Executive (whether pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 8) (the "Payments") would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), or any interest or penalties are
incurred by Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), then the Company shall pay to Executive an additional payment (a "Gross-Up Payment") in an amount such that after payment by Executive of all taxes (including any Excise Tax) imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the sum of (x) the Excise Tax imposed upon the Payments and (y) the product of any deductions disallowed because of the inclusion of the Gross-up Payment in Executive's adjusted gross income and the highest applicable marginal rate of federal income taxation for the calendar year in which the Gross-up Payment is to be made.
For purposes of determining the amount of the Gross-up Payment, the Executive shall be deemed to (i) pay federal income taxes at the highest marginal rates of federal income taxation for the calendar year in which the Gross-up Payment is to be made, and (ii) pay applicable state and local income taxes at the highest marginal rate of taxation for the calendar year in which the Gross-up Payment is to be made, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes. Notwithstanding the foregoing provisions of this Section 8(a), if it shall be determined that Executive is entitled to a Gross-Up Payment, but that the Payments would not be subject to the Excise Tax if the Payments were reduced by an amount that is less than 5% of
the portion of the Payments that would be treated as "parachute payments" under Section 280G of the Code, then the amounts payable to Executive under this Agreement shall be reduced (but not below zero) to the maximum amount that could be paid to Executive without giving rise to the Excise Tax (the "Safe Harbor Cap"), and no Gross-Up Payment shall be made to Executive. The reduction of the amounts payable hereunder, if applicable, shall be made by reducing first the payments under Section 8, unless an alternative method of reduction is elected by Executive. For purposes of reducing the Payments to the Safe Harbor Cap, only amounts payable under this Agreement (and no other Payments)
shall be reduced.

9

     If the reduction of the amounts payable hereunder would not result in a reduction of the Payments to the Safe Harbor Cap, no amounts payable under this Agreement shall be reduced pursuant to this provision.

     (b) Subject to the provisions of Section 8(a), all determinations required to be made under this Section 8(b), including whether and when a Gross-Up Payment is required, the amount of such Gross-Up Payment, the reduction of the Payments to the Safe Harbor Cap and the assumptions to be utilized in arriving at such determinations, shall be made by the public accounting firm that is retained by the Company as of the date immediately prior to the Change in Control (the "Accounting Firm") which shall provide detailed supporting calculations both to the Company and Executive within fifteen (15) business days of the receipt of notice from the Company or the Executive that there has been a Payment, or such earlier time as is
requested by the Company (collectively, the "Determination"). In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Executive may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company and the Company shall enter into any agreement requested by the Accounting Firm in connection with the performance of the services hereunder. The Gross-up Payment under this Section 8 with respect to any Payments shall be made no later than thirty (30) days following such Payment. If the
Accounting Firm determines that no Excise Tax is payable by Executive, it shall furnish Executive with a written opinion to such effect, and to the effect that failure to report the Excise Tax, if any, on Executive's applicable federal income tax return will not result in the imposition of a negligence or similar penalty. In the event the Accounting Firm determines that the Payments shall be reduced to the Safe Harbor Cap, it shall furnish Executive with a written opinion to such effect. The Determination by the Accounting Firm shall be binding upon the Company and Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the Determination, it is possible that Gross-up Payments which will not have been made by the Company should have been made
("Underpayment") or Gross-up Payments are made by the Company which should not have been made ("Overpayment"), consistent with the calculations required to be made hereunder. In the event that the Executive thereafter is required to make payment of any Excise Tax or additional Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) shall be promptly paid by the Company to or for the benefit of Executive. In the event the amount of the Gross-up Payment exceeds the amount necessary to reimburse the Executive for his Excise Tax, the Accounting Firm shall determine the amount of the Overpayment that has been made and any such
Overpayment (together with interest at the rate provided in Section 1274(b)(2) of the Code) shall be promptly paid by Executive (to the extent he has received a refund if the applicable Excise Tax has been paid to the Internal Revenue Service) to or for the benefit of  the Company. Executive shall cooperate, to the extent his expenses are reimbursed by the Company, with any reasonable requests by the Company in connection with any contests or disputes with the Internal Revenue Service in connection with the
 Excise Tax.

 10

 

     9.      Assignment.  This Agreement is personal to Executive and Executive may not assign or delegate any of his rights or obligations hereunder.  Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the respective parties hereto, their heirs, executors, administrators, successors and assigns.

     10.      Waiver.  Neither any failure nor any delay by any party in exercising any right, power or privilege under this Agreement or any of the documents referred to in this Agreement will operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege will preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege.  To the maximum extent permitted by applicable law, (a) no claim or right arising out of this Agreement or any of the documents referred to in this Agreement can be discharged by one party, in whole or in part, by a waiver or renunciation
of the claim or right unless in a written document signed by the other party, (b) no waiver that may be given by a party will be applicable except in the specific instance for which it is given, and (c) no notice to or demand on one party will be deemed to be a waiver of any obligation of that party or of the right of the party giving such notice or demand to take further action without notice or demand as provided in this Agreement or the documents referred to in this Agreement.

     11.      Notices.  Any and all notices required or permitted to be given under this Agreement will be sufficient and deemed effective three (3) days following deposit in the United States mail if furnished in writing and sent by certified mail to Executive at:

Anthony Garcia

12709 Aston Oak Drive

Ft. Myers, FL 33912

and to the Company at:  

MIVA

5220 Summerlin Commons Boulevard

Suite 500

Ft. Myers, Florida 33907

Attention:  Chief Executive Officer

11

or such subsequent addresses as one party may designate in writing to the other parties.

     12.      Governing Law.  This Agreement shall be interpreted, construed and governed according to the laws of the State of Florida.

     13.      Amendment.  This Agreement may be amended in any and every respect only by agreement in writing executed by both parties hereto.

     14.      Section Headings.  Section headings contained in this Agreement are for convenience only and shall not be considered in construing any provision hereof.

     15.      Entire Agreement.  With the exception of the Confidentiality, Assignment and Noncompetition Agreement, dated March 1, 2002, and any stock option agreements between Executive and the Company, this Agreement terminates, cancels and supersedes all previous employment or other agreements relating to the employment of Executive with the Company or any predecessor, written or oral, and this Agreement contains the entire understanding of the parties with respect to the subject matter of this Agreement.  This Agreement was fully reviewed and negotiated on behalf of each party and shall not be construed against the interest of either party as the drafter of this Agreement.  EXECUTIVE
ACKNOWLEDGES THAT, BEFORE SIGNING THIS AGREEMENT, HE HAS READ THE ENTIRE AGREEMENT AND HAS THIS DAY RECEIVED A COPY HEREOF.  

     16.      Severability.  The invalidity or unenforceability of any one or more provisions of this Agreement shall not affect the validity or enforceability of any other provisions of this Agreement or parts thereof.

     17.      Survival.  The last sentence of Section 3, and Sections 6, 7 and 8 of this Agreement and this Section 17 shall survive any termination or expiration of this Agreement.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

	 	EXECUTIVE:
	 	 
	 	/s/ Anthony Garcia                                             
	 	Anthony Garcia
	 	 
	 	MIVA
	 	 
	 	By:   /s/ Craig A. Pisaris-Henderson               
	 	         Craig A. Pisaris-Henderson
	 	 
	 	Its: Chief Executive Officer

 

  

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