Document:

Exhibit 10.20

 

August 12,
2007

 

Mr. Layton
Han

c/o
Mypoints.com, Inc.

100
California Street, Suite 1200

San
Francisco, California 94111

 

Dear
Layton,

 

This letter sets forth the terms and conditions of
your employment with MyPoints.com, Inc. (the “Company”), effective as of August 12,
2007 (the “Effective Date”).

 

1.                                       Position.  You will serve as Co-President of
the Company and shall have such duties and responsibilities consistent with
your position or such other duties and responsibilities as may from time to
time be determined by the board of directors of the Company or any committee
thereof, or such board of directors or committee of any affiliated entity to
which the authority of the board of directors of the Company has been delegated
or assigned (the “Board of Directors”) or the Chief Executive Officer of the
Company to the extent such authority has been delegated or assigned to such
Chief Executive Officer.  You will report
to the Chief Executive Officer of the Company or to such other senior executive
officer as may be designated by the Board of Directors or the Chief Executive
Officer of the Company.  You agree to
devote your full-time attention, skill and efforts to the performance of your
duties for the Company; provided, however, that as we discussed, you have
terminated your employment with LSC, Inc. and any other companies with
which you may be employed and the Company agrees that you can continue to
pursue the outside activities set forth in Appendix A hereto.  Subject to the foregoing, additional outside
activities will require the approval of the Chief Executive Officer of the
Company.

 

2.                                       Salary and Benefits. 
You will be paid a salary at the annual rate of $288,750, payable in
bi-weekly installments in accordance with the Company’s standard payroll
practices, subject to any increases as determined by the Board of Directors
from time to time.  You will be eligible
to participate in the employee benefits plans, including a 401(k) plan, that
are provided to similarly situated executives of the Company or that are made
available to you by the Board of Directors or any affiliate of the Company. You
will be entitled to a minimum of 4 weeks of paid vacation each year, or such
greater amount as determined in accordance with the standard vacation policy applicable
to similarly situated executives of the Company.

 

3.                                       Bonus.  You will also be eligible to receive an annual cash
bonus of up to 100% of your annual base salary for each fiscal year (the “Annual
Bonus”), less withholding required by law, based on performance criteria
established by the Board of Directors.

 

1

 

Your Annual Bonus will be increased to include any increases in your
annual bonus as approved by the Board of Directors.  Except as otherwise determined by the Board
of Directors or set forth herein, your bonus awards will be paid only if you
are employed by and in good standing with the Company at the time of bonus
payments.

 

4.                                       Restricted Stock Units. 
Contingent on the effectiveness of an initial public offering of
securities of Classmates Media Corporation, a Delaware corporation, or
securities issued by an entity that is a direct or indirect parent of the
Company (Classmates Media Corporation or such entity being the “IPO entity,”
and such initial public offering being the “CMC IPO”) prior to April 30,
2008, and subject to the appropriate action taken by the board of directors of
the IPO entity, on the effective date of such CMC IPO, you will be awarded
restricted stock units covering that number of shares of common stock of the
IPO entity equal to $1,250,000 (the “CMC Restricted Stock Units”)  based on the initial offering price of such
share of common stock in such initial public offering.  For purposes of this agreement, all
references to common stock of the IPO entity shall be deemed to refer to Class A
common stock of CMC.  In the event that
the CMC IPO does not become effective prior to April 30, 2008, subject to
the appropriate action taken by the board of directors of United Online, Inc.
(“United Online”), on the earlier of (i) April 30, 2008, or (ii) immediately
prior to the date of a Change in Control of United Online (as defined in
Appendix B attached hereto), you will be awarded restricted stock units
covering that number of shares of common stock of United Online equal to
$1,250,000 divided by (i), if a Change in Control of United Online
occurs prior to or on December 31, 2007, the average of the closing
selling prices of a share of United Online common stock during the 10 trading
day period ending immediately prior to the announcement of such Change in
Control or (ii), if either (x) a Change in Control of United Online occurs
after December 31, 2007 but prior to April 30, 2008 or (y) no Change
in Control of United Online occurs prior to April 30, 2008, the average of
the closing selling prices of a share of United Online common stock during the
month of December 2007, such closing selling prices as reported by the
National Association of Securities Dealers on the Nasdaq Stock Market (the “UOL
Restricted Stock Units”).  The CMC
Restricted Stock Units and the UOL Restricted Stock Units (collectively,
referred to as the “Restricted Stock Units”) will vest on August 15, 2010
subject to your continued employment with the Company.  Except as otherwise set forth herein, in all
other respects, the Restricted Stock Units will be subject to the terms and
conditions set forth in the applicable stock plan and the restricted stock unit
agreement.

 

In the event that the CMC IPO does not become
effective prior to April 30, 2008 and a Change in Control of Classmates
Media Corporation (as defined in Paragraph B of Appendix B attached
hereto) occurs prior to April 30, 2008, subject to the appropriate action
taken by the board of directors of United Online, immediately prior to or in
connection with the closing of such Change in Control, you will be awarded
$1,250,000 in the form of the consideration received by United Online in
connection with such Change of Control with the value of securities or other property
to be received determined as of the date of the closing of such transaction,
provided that, if agreed to by United Online, the acquiring entity may
substitute $1,250,000 in cash or securities, or a combination thereof, of the
acquiring entity valued at $1,250,000 as of the date of closing

 

2

 

of
such transaction.  The consideration
received in such transaction, whether cash, securities or otherwise, will be
subject to the same vesting schedule and treatment upon terminations of
employment as applicable to the Restricted Stock Units, which are set forth in
this Section 4.

 

Upon the termination of your employment by the
Company “without cause” or by you for “good reason” (each term as defined
below) prior to August 15, 2010, and subject to your execution (without
revocation) of a general waiver and release of all claims against the Company,
its affiliates and successors, in a form satisfactory to the Company (a “Release”),
the vesting of your outstanding Restricted Stock Units and any additional
restricted stock units you hold as of the Effective Date will be accelerated by
the additional number of shares in which you would have been vested at the time
of such termination if you had completed an additional twelve (12) months of
service (calculated as if such units vest on a monthly basis); provided,
however, that in no event will the number of shares which vest on such an
accelerated basis exceed the number of shares unvested immediately prior to the
date of such termination.  Such vesting
acceleration will occur upon the expiration of all applicable review and
revocation periods applicable to the Release as statutorily required by law,
and in no event later than the later of (i) the 15th day of the third
month following the end of your taxable year in which such termination of
employment occurs or (ii) the 15th day of the third month following the
end of the Company’s taxable year in which such termination of employment
occurs.

 

Upon the termination of your employment by the
Company “without cause” or by you for “good reason,” prior to August 15,
2010 in connection with, or within twelve (12) months after, a Change in
Control (as defined in Appendix B attached hereto), and subject to your
execution (without revocation) of a Release, the vesting of your outstanding
Restricted Stock Units and any additional restricted stock units you hold as of
the Effective Date will be accelerated by the additional number of shares in
which you would have been vested at the time of such termination if you had
completed an additional twelve (12) months of service, or, if greater, an
additional period of service equal in duration to the actual period of service
you completed between August 15, 2007 (or, with respect to any other restricted
stock units you hold outstanding as of the Effective Date, the date of the
commencement of vesting with respect to such restricted stock units) and the
date of such termination, in all cases calculated as if such units vest on a
monthly basis; provided however, that in no event will the number of shares
which vest on such an accelerated basis exceed the number of shares unvested
immediately prior to the date of such termination.  Such acceleration will occur upon the
expiration of all applicable review and revocation periods applicable to the
Release as statutorily required by law, and in no event later than the later of
(i) the 15th day of the third month following the end of your taxable year
in which such termination of employment occurs or (ii) the 15th day of the
third month following the end of the Company’s taxable year in which such
termination of employment occurs.

 

Upon the termination of your employment as a result
of death or Disability (as defined below), the vesting of your outstanding Restricted
Stock Units and any additional

 

3

 

restricted
stock units you hold as of the Effective Date will be accelerated by the
additional number of shares in which you would have been vested at the time of such
termination if you had completed an additional twelve (12) months of service
(calculated as if such units vest on a monthly basis); provided however, that
in no event will the number of shares which vest on such an accelerated basis
exceed the number of shares unvested immediately prior to the date of such
termination.  For purposes of this
letter, “Disability” means your inability to engage in any substantial gainful
activity necessary to perform your duties hereunder by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted, or can be expected to last, for a continuous period
of not less than twelve (12) months.

 

5.                                       Policies; Procedures;
Proprietary Information and Inventions Agreement.  As an
employee of the Company, you will be expected to abide by all of the policies
and procedures applicable to similarly situated executives of the Company,
including, without limitation, the terms of: the Proprietary Information and
Inventions Agreement between you and United Online (or any successor thereto or
affiliate thereof), a copy of which is attached hereto as Appendix C and is
incorporated herein by reference; the Insider Trading Policy; the Code of
Ethics; and the Employee Handbook, and you agree to execute the foregoing upon
commencement of your employment.

 

6.                                       At Will Employment. 
Notwithstanding anything to the contrary contained herein, your
employment with the Company will be “at will” and will not be for any specified
term, meaning that either you or the Company will be entitled to terminate your
employment at any time and for any reason, with or without cause.  Any contrary representations that may have
been made to you are superseded by the terms set forth in this paragraph.  This is the full and complete agreement
between you and the Company on this subject. 
Although your job duties, title, compensation and benefits, as well as
the personnel policies and procedures applicable to you, may change from time
to time, the “at will” nature of your employment may only be changed in an
express written agreement signed by you and the Chief Executive Officer of the
Company and approved by the Board of Directors or committee thereof.

 

7.                                       Termination of
Employment

 

a.                                       Termination by You.  If you terminate your employment with the Company for
any reason other than for “good reason” as defined below, all obligations of
the Company as set forth in this letter will cease, other than the obligation
to pay you any accrued base salary for services rendered through the date of
termination, to pay you for any accrued but unused vacation days as of the date
of termination, and to fulfill its obligations in accordance with the terms of
the applicable stock plan and award agreement. 
If you terminate your employment with the Company for “good reason,” as
defined below, in addition to the foregoing, the Company will pay you the
Separation Payment (as defined below) and the bonus payment (described in the
second sentence of Section 7(b) below) subject to the conditions set
forth in Section 7(b) below. 
However, and notwithstanding the termination of your employment by you,
you will continue to be

 

4

 

obligated to comply with
the terms of the Proprietary Information and Inventions Agreement and the
restrictive covenants set forth in Section 9 below.

 

b.                                       Termination by the
Company.  If your employment is terminated by the Company “without
cause” as defined below, and subject to your execution (without revocation) of
a Release (as defined in Section 4), the Company will pay you a separation
payment (the “Separation Payment”) equal to the sum of (i) twelve (12)
months of your then current annual base salary, (ii) your Annual Bonus,
and (iii) a prorated portion of your Annual Bonus based upon the time
elapsed between December 31 of the preceding year and your date of
termination In addition, notwithstanding the last sentence of Section 3
hereof, if your date of termination occurs following the end of a fiscal year
and prior to the date that you would have otherwise been entitled to be paid
your annual bonus for such fiscal year, the Company will pay you an amount
equal to the annual bonus that you would have received had you remained
employed by and in good standing with the Company through the date the annual
bonus for such fiscal year is paid, which amount shall be paid at the same time
and manner that such payment would have been paid to you had you remained
employed through such date.  Solely for
purposes of the first sentence hereof, “Annual Bonus” shall mean the lesser of (1) 100%
of your then current annual base salary and (2) the most recent annual
bonus paid to you.  Payment of this
Separation Payment and bonus payment will be contingent on your signing
(without revocation) the Release and your continued compliance with the
Proprietary Information and Inventions Agreement and the restrictive covenants
set forth in Section 9 below.  This
Separation Payment will be payable monthly on a pro rata basis over twelve (12)
months with the first such payment commencing upon the expiration of all
applicable review and revocation periods applicable to the Release as
statutorily required by law.  Upon
termination of your employment by the Company “without cause,” other than the
obligations set forth in the first sentence of Section 7(a) above and
the acceleration of vesting provided in Section 4 above, the Company will
have no further obligation to you except pursuant to this paragraph.

 

If your employment is terminated by the Company “with
cause” as defined below, the Company will have no further obligation to you
under the terms of this letter, other than the obligations set forth in the
first sentence of Section 7(a) above. 
However, and notwithstanding the termination of your employment by the
Company “with cause” or “without cause,” or by you for “good reason,” you will
continue to be obligated to comply with the terms of the Proprietary
Information and Inventions Agreement and the restrictive covenants set forth in
Section 9 below.

 

You have the right decline to receive a portion of
the benefits set forth under Sections 4 and 7 in the event that you determine
that the provision of such benefits to you would result in a “parachute payment”
as such term is defined in Section 280(G)(b)(2) of the Internal
Revenue Code of 1986.

 

c.                                       Definitions.

 

For purposes of this letter, “good reason” means:

 

(i)                   a reduction in your base salary without your
prior written consent;

 

5

 

	
  (ii)

  	
   

  	
  a material reduction in your position, duties or responsibilities in
  a manner inconsistent with the terms of this agreement, without your prior
  written consent, unless such reduction is effected at the request of Mark R.
  Goldston; or

  
	
  (iii)

  	
   

  	
  any material un-waived breach by the Company of the terms of this
  letter;

  
	
  (iv)

  	
   

  	
  provided however, that with respect to any of (i) –
  (iii) above, you shall provide written notice to the Company of the
  existence of the good reason condition within ninety (90) days of its initial
  existence and the Company shall have 30 days to cure such condition.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  For purposes of this letter, “with cause” means your commission of
  any one or more of the following acts:

  
	
   

  	
   

  	
   

  
	
  (i)

  	
   

  	
  willfully damaging of the property, business, business relationships,
  reputation or goodwill of the Company or its parent or any subsidiary
  thereof;

  
	
  (ii)

  	
   

  	
  commission of a felony or a misdemeanor involving moral turpitude;

  
	
  (iii)

  	
   

  	
  theft, dishonesty, fraud or embezzlement;

  
	
  (iv)

  	
   

  	
  willfully violating any rules or regulations of any governmental
  or regulatory body that is or is reasonably expected to be injurious to the
  Company or its parent or any subsidiary thereof;

  
	
  (v)

  	
   

  	
  the use of alcohol, narcotics or other controlled substances to the
  extent that it prevents you from efficiently performing services for the
  Company or its parent or any subsidiary thereof;

  
	
  (vi)

  	
   

  	
  willfully injuring any other employee of the Company or its parent or
  any subsidiary thereof;

  
	
  (vii)

  	
   

  	
  willfully injuring any person in the course of performance of
  services for the Company or its parent or any subsidiary thereof;

  
	
  (viii)

  	
   

  	
  disclosing to a competitor or other unauthorized persons confidential
  or proprietary information or secrets of the Company or its parent or any
  subsidiary thereof;

  
	
  (ix)

  	
   

  	
  solicitation of business on behalf of a competitor or a potential
  competitor of the Company or its parent or any subsidiary thereof;

  
	
  (x)

  	
   

  	
  harassment of any other employee of the Company or its parent or any
  subsidiary thereof or the commission of any act which otherwise creates an
  offensive work environment for other employees of the Company or its parent
  or any subsidiary thereof;

  
	
  (xi)

  	
   

  	
  failure for any reason within five (5) days after receipt by you
  of written notice thereof from the Company, to correct, cease or otherwise
  alter any insubordination, failure to comply with instructions, inattention
  to or neglect of the duties to be performed by you or other act or omission
  to act that in the opinion of the Company does or may adversely affect the
  business or operations of the Company or its parent or any subsidiary
  thereof;

  
	
  (xii)

  	
   

  	
  breach of any material term of this letter; or

  
	
  (xiii)

  	
   

  	
  any other act or omission that is determined to constitute “cause” in
  the good faith discretion of the Board of Directors.

  

 

6

 

For purposes of this letter, “without cause” means
any reason not within the scope of the definition of the term “with cause.”

 

d.                                       Code Section 409A
Deferral Period.  Notwithstanding any provision to the contrary
in this letter, no payment or distribution under this letter which constitutes
an item of deferred compensation under Section 409A of the Internal
Revenue Code (the “Code”) and becomes payable by reason of your termination of
employment with the Company will be made to you prior to the earlier of (i) the
expiration of the six (6)-month period measured from the date of your “separation
from service” (as such term is defined in Treasury Regulations issued under
Code Section 409A) or (ii) the date of your death, if you are deemed
at the time of such separation from service to be a “key employee” within the
meaning of that term under Code Section 416(i) and such delayed
commencement is otherwise required in order to avoid a prohibited distribution
under Code Section 409A(a)(2).  Upon
the expiration of the applicable Code Section 409A(a)(2) deferral
period, all payments and benefits deferred pursuant to this Section 7(d) (whether
they would have otherwise been payable in a single sum or in installments in the
absence of such deferral) shall be paid or reimbursed to you in a lump sum, and
any remaining payments due under this letter will be paid in accordance with
the normal payment dates specified for them herein.

 

8.                                       Withholding Taxes. 
All forms of compensation referred to in this letter are subject to
reduction to reflect applicable withholding and payroll taxes.

 

9.                                       Restrictive Covenants. 
Until twelve (12) months after termination of your employment with the
Company for any reason, so long as you are receiving the Separation Payment,
you will not, at any place in any county, city or other political subdivision
of the United States in which the Company (or its parent or any subsidiary
thereof) is engaged in business or providing its services:

 

a.                                       directly or indirectly design, develop,
manufacture, market or sell any product or service which is in competition with
the products or services of the Company (or its parent or any subsidiary
thereof); or

 

b.                                      directly or indirectly own any interest in,
control, be employed by or associated with or render advisory, consulting or
other services (including but not limited to services in research) to any
person or entity, or subsidiary, subdivision, division or joint venture of such
entity in connection with the design, development, manufacture, marketing or
sale of a product or service which is in competition with the products or
services of the Company (or its parent or any subsidiary thereof); provided,
however, that nothing in this letter will prohibit you from owning less than
one percent (1%) of the equity interests of any publicly held entity.

 

10.                                 Entire Agreement. 
This letter (including any appendices thereto), together with the
Proprietary Information and Inventions Agreement, any handbooks and policies
applicable to similarly situated executives of the Company in effect from time
to time and the applicable stock option plan and restricted stock unit
agreement, contains all of the

 

7

 

terms of your employment
with the Company and supersedes any prior understandings or agreements, whether
oral or written, between you and the Company; provided, however, nothing herein
is intended to modify, terminate or otherwise affect your continuing
obligations including, without limitation, those set forth in the
noncompetition provisions, under the Consulting Services Agreement dated
effective as of November 16, 2004, by and between Mypoints.com, Inc.,
Layton Han and King Ventures, as amended by the Amendments dated February 15,
2005 and November 30, 2005 and the letter dated February 15,
2006.  If any provision of this letter is
held by an arbitrator or a court of competent jurisdiction to conflict with any
federal, state or local law, or to be otherwise invalid or unenforceable, such
provision shall be construed in a manner so as to maximize its enforceability
while giving the greatest effect as possible to the parties’ intent.  To the extent any provision cannot be
construed to be enforceable, such provision will be deemed to be eliminated
from this letter and of no force or effect and the remainder of this letter
will otherwise remain in full force and effect and be construed as if such
portion had not been included in this letter. 
This letter is not assignable by you. 
This letter may be assigned by the Company to its parent or any
subsidiary or any affiliate thereof or to successors in interest to the Company
or its lines of business.

 

11.                                 Amendment and Governing
Law.  This letter may not be amended or modified
except by an express written agreement signed by you and the Chief Executive
Officer of the Company.  The terms of
this letter and the resolution of any disputes will be governed by California
law, and venue for any disputes will be in Los Angeles, California.

 

12.                                 Term.  This
letter will expire on August 15, 2010, except Sections 6, 9, 10, 11, and
12 will survive such expiration. 
Following the expiration of this letter, your employment with the
Company will continue to be “at will.”

 

8

 

We look forward to continuing our successful
relationship.  You may indicate your
agreement with these terms by signing and dating this letter.

 

If you have any questions, please call the
undersigned.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  MYPOINTS.COM, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark R. Goldston

  	
   

  
	
   

  	
  Name: Mark R. Goldston

  
	
   

  	
  Title: Chairman & Chief Executive Officer

  
	
   

  
	
  I have read the foregoing and accept the terms set forth in this
  letter:

  
	
   

  
	
  /s/ Layton Han

  	
   

  
	
  Layton Han

  
					

 

9

 

Appendix A

 

Permitted
Outside Activities:

 

•                  you
may continue your equity holdings in, and Board membership with, LSC, Inc.
with the understanding that the agreement between the Company and LSC, Inc.
has terminated and your board membership represents a minimal time commitment.

 

10

 

Appendix B

 

A
Change in Control shall be deemed to have occurred (i) if a Change in
Control of United Online, Inc. occurs as described in Paragraph A below or
(ii) if a Change in Control of Classmates Media Corporation occurs as
described in Paragraph B below.

 

A.           If CMC IPO Does Not Become
Effective or CMC IPO Becomes Effective and United Online Owns 33 1/3% or More:

 

In
the event a CMC IPO does not become effective, or a CMC IPO becomes effective
and United Online, Inc. owns 33-1/3% or more of the total combined voting
power of all of Classmates Media Corporation’s outstanding securities, “Change
in Control” shall mean a change in ownership or control effected through any of
the following transactions:

 

“Corporation”
shall mean United Online, Inc., a Delaware corporation, and any successor
corporation to all or substantially all of the assets or voting stock of United
Online, Inc.

 

“Board”
shall mean the Corporation’s Board of Directors.

 

“1934
Act” shall mean the Securities Exchange Act of 1934, as amended from time to
time.

 

(i)                                                             a merger or consolidation approved by the
Corporation’s stockholders, unless securities possessing more than fifty
percent (50%) of the total combined voting power of the voting securities of
the successor corporation are immediately thereafter beneficially owned,
directly or indirectly and substantially in the same proportion, by the persons
who beneficially owned the Corporation’s outstanding voting securities
immediately prior to such transaction,

 

(ii)                                                          the sale, transfer or other disposition of
all or substantially all of the Corporation’s assets approved by the
Corporation’s stockholders,

 

(iii)                                                       the acquisition, directly or indirectly by
any person or related group of persons (other than the Corporation or a person
that directly or indirectly controls, is controlled by, or is under common
control with, the Corporation), of beneficial ownership (within the meaning of Rule 13d-3
of the 1934 Act) of securities possessing more than fifty percent (50%) of the
total combined voting power of the Corporation’s outstanding securities, or

 

(iv)                                                      a change in the composition of the Board over
a period of thirty-six (36) consecutive months or less such that a majority of
the Board members ceases, by reason of one or more contested elections for
Board membership, to be comprised of individuals who either (A) have been
Board members continuously since the beginning of such period or (B) have
been elected or nominated for election as Board members during such

 

11

 

period by at least a majority of the Board members
described in clause (A) who were still in office at the time the Board
approved such election or nomination.

 

B.            Change in Control of
Classmates Media Corporation

 

“Change
in Control” of Classmates Media Corporation shall mean a change in ownership or
control of the Corporation effected through any of the following transactions:

 

“Corporation”
shall mean Classmates Media Corporation, a Delaware corporation, and any
successor corporation to all or substantially all of the assets or voting stock
of Classmates Media Corporation.

 

“Board”
shall mean the Corporation’s Board of Directors.

 

“1934
Act” shall mean the Securities Exchange Act of 1934, as amended from time to
time.

 

(i)                                                        a merger, consolidation or reorganization
approved by the Corporation’s stockholders, unless securities
representing more than 33-1/3 percent (33.33%) of the total combined voting
power of the voting securities of the successor corporation are immediately
thereafter beneficially owned, directly or indirectly, by the person or persons
who beneficially owned 33-1/3 percent (33.33%) or more of the Corporation’s
outstanding voting securities immediately prior to such transaction,

 

(ii)                                                     any stockholder-approved transfer or other
disposition of all or substantially all of the Corporation’s assets,

 

(iii)                                                  the closing of any transaction or series of
related transactions pursuant to which any person or any group of persons
comprising a “group” within the meaning of Rule 13d-5(b)(1) of the
1934 Act (other than the Corporation or a person that, prior to such
transaction or series of related transactions, directly or indirectly controls,
is controlled by or is under common control with, the Corporation) becomes
directly or indirectly (whether as a result of a single acquisition or by
reason of one or more acquisitions within the twelve (12)-month period ending
with the most recent acquisition) the beneficial owner (within the meaning of Rule 13d-3
of the 1934 Act) of (A) securities possessing (or convertible into or
exercisable for securities possessing) 33-1/3 percent (33.33%) or more of the
total combined voting power of all of the Corporation’s outstanding securities
(as measured in terms of the power to vote with respect to the election of
Board members) or (B) securities representing 33-1/3 percent (33.33%) or
more of the aggregate market value of all of the Corporation’s outstanding
capital stock, measured in each instance immediately after the consummation of
such transaction or series of related transactions and whether such transaction
or transactions involve a direct issuance from the Corporation or

 

12

 

the acquisition of outstanding securities held by
one or more of the Corporation’s existing stockholders; or

 

(iv)                                                 a change in the composition of the Board over
a period of thirty-six (36) consecutive months or less such that a majority of
the Board members ceases, by reason of one or more contested elections for
Board membership, to be comprised of individuals who either (A) have been
Board members continuously since the beginning of such period or (B) have
been elected or nominated for election as Board members during such period by
at least a majority of the Board members described in clause (A) who were
still in office at the time the Board approved such election or nomination.

 

In no event, however, shall a Change in Control be
deemed to occur as a result of a spin-off distribution by United Online, Inc.
of all or any portion of the Corporation’s outstanding securities held by
United Online, Inc. to its existing stockholders in proportion to their
holdings of United Online, Inc. capital stock.

 

13

 

Appendix C

 

[Proprietary
Information and Inventions Agreement]

 

[Intentionally Omitted]

 

14Filed by Automated Filing Services Inc. (604) 609-0244 - Mobiventures Inc. -

THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 (THE "ACT"), AND ARE PROPOSED TO BE ISSUED IN
RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT
PROVIDED BY REGULATION S PROMULGATED UNDER THE ACT. UPON ANY SALE, SUCH
SECURITIES MAY NOT BE REOFFERED FOR SALE OR RESOLD OR OTHERWISE TRANSFERRED
EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S, PURSUANT TO AN
EFFECTIVE REGISTRATION UNDER THE ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM
REGISTRATION UNDER THE ACT. HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY
NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE ACT. 

REGULATION S DEBT CONVERSION AGREEMENT

THIS REGULATION S DEBT CONVERSION AGREEMENT (the “Agreement”)
  is made effective as of the 9th day of November, 2007.

BETWEEN:

THE UNDERSIGNED CREDITOR

(the "Creditor")

OF THE FIRST PART

AND:

MOBIVENTURES INC.,
a Nevada
corporation
(the “Company")

OF THE SECOND PART

WHEREAS:

          
A.      The Creditor is a creditor of the Company.

          
B.      The Company and the Creditor have agreed
to settle the indebtedness owed by the Company to the Creditor by the issuance
of shares of the Company’s common stock to the Creditor upon the terms and
conditions of this Agreement.

NOW THEREFORE, in consideration of the premises and the
mutual covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows: 

ARTICLE 1.
DEFINITIONS

          1.1     
Definitions. The following terms will have the following meanings for all
purposes of this Agreement.

- 2 -

          (a)      “Common
Stock” means the common stock of the Company, par value $0.001 per share.

          (b)      “Exchange
Act” shall mean the United States Securities Exchange Act of 1934, as
amended;

          (c)     
“Indebtedness” means the amount owed by the Company to the Creditor as set forth
on the execution page of this Agreement.

          (d)     
“Offering” shall mean the offering of the Shares by the Company to the
Creditor;

          (e)     
"SEC" shall mean the United States Securities and Exchange Commission.

          (f)      “SEC
Filings” shall mean those filings made by the Company with the SEC in accordance
with its reporting obligations under the Exchange Act;

          (g)     
"Securities Act" shall mean the United States Securities Act of 1933, as
amended.

          (h)      "Shares"
means shares of Common Stock to be issued to the Creditor pursuant to the terms
and conditions of this Agreement in settlement of the Indebtedness.

          1.2      Schedules.
The following schedules are attached to and form part of this Agreement:

Schedule A Definition of U.S. Person

          1.3      Currency.
All dollar amounts referred to in this agreement are in United States funds,
unless expressly stated otherwise.

     ARTICLE 2.
SETTLEMENT OF
INDEBTEDNESS

          2.1      Settlement
  of Indebtedness. Subject to the terms and conditions hereinafter set forth,
  the Creditor hereby agrees to accept the issuance by the Company to the Creditor
  of a number of Shares equal to the amount of the Indebtedness divided by a price
  of $0.021 US per Share as payment in full of the Indebtedness.

          2.2      Delivery
of Shares. Upon execution of this Agreement by the Company, the Company will
deliver to the Creditor certificates representing the Shares. Upon delivery by
the Company of the certificates representing the Shares:

	the Indebtedness will be deemed to be repaid in full by the Company,
  
	the Company will have no further liability or obligation to the Creditor
  in respect of the Indebtedness,
  
	the Creditor will have no further claim or action against the Company in
  respect of the Indebtedness; and
  
	the Creditor will have been deemed to have released and discharged the
  Company of all liabilities and obligations relating to the Indebtedness.

- 3 -

          2.2      Compliance
with Securities Laws. The obligation of the Company to issue the Shares is
conditional upon compliance with all securities laws and other applicable laws
of the jurisdiction in which the Creditor is resident. Each Creditor will
deliver to the Company all other documentation, agreements, representations and
requisite government forms required by the lawyers for the Company as required
to comply with all securities laws and other applicable laws of the jurisdiction
of the Creditor.

ARTICLE 3.
AGREEMENTS, REPRESENTATIONS AND
WARRANTIES OF THE CREDITOR

          3.1      Exemption
from Registration. The Creditor acknowledges and agrees that the Shares will
be offered and sold to the Creditor without such offers and sales being
registered under the Securities Act and will be issued to the Creditor in an
offshore transaction outside of the United States in accordance with a safe
harbour from the registration requirements of the Securities Act provided by
Rule 903 of Regulation S of the Securities Act based on the representations and
warranties of the Creditor in this Agreement. As such, the Creditor further
acknowledges and agrees that all Shares will, upon issuance, be “restricted
securities” within the meaning of the Securities Act.

          3.2     
Resales of Securities. The Creditor acknowledges that that the Shares may
not be offered, resold, pledged or otherwise transferred except pursuant to the
provisions of Regulation S of the Securities Act, through an exemption from
registration under the Securities Act or pursuant to an effective registration
statement under the Securities Act and in accordance with all applicable state
securities laws and the laws of any other jurisdiction. The Creditor agrees to
resell the Shares only in accordance with the provisions of Regulation S of the
Securities Act, pursuant to registration under the Securities Act, or pursuant
to an available exemption from registration pursuant to the Securities Act. The
Creditor agrees that the Company will refuse to register any transfer of the
Shares not made in accordance with the provisions of Regulation S of the
Securities Act, pursuant to registration under the Securities Act or pursuant to
an available exemption from registration. The Creditor agrees that the Company
may require the opinion of legal counsel reasonably acceptable to the Company in
the event of any offer, sale, pledge or transfer of any of the Shares by the
Creditor pursuant to the provisions of Regulation S of the Securities Act or
pursuant to an exemption from registration under the Securities Act. 

          3.3     
Hedging Transactions. The Creditor agrees not to engage in hedging
transactions with regard to the Shares unless in compliance with the Securities
Act.

          3.4      Share
Certificates. The Creditor acknowledges and agrees that all certificates
representing the Shares will be endorsed with the following legend, or such
similar legend as deemed advisable by legal counsel for the Company, to ensure
compliance with Regulation S of the Securities Act and to reflect the status of
the Shares as restricted securities:

	
      “THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
      NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
      "ACT"), AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM
      THE REGISTRATION REQUIREMENTS OF THE ACT PROVIDED BY
      REGULATION S PROMULGATED UNDER THE ACT. SUCH SECURITIES MAY NOT
      BE REOFFERED FOR SALE OR RESOLD OR OTHERWISE TRANSFERRED EXCEPT IN
      ACCORDANCE WITH THE PROVISIONS OF REGULATION S, PURSUANT TO AN
      EFFECTIVE REGISTRATION UNDER THE ACT, OR PURSUANT TO AN AVAILABLE
      EXEMPTION FROM REGISTRATION UNDER THE ACT. HEDGING
      TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS
      IN COMPLIANCE WITH THE ACT.” 

- 4 -

          3.5      No
Registration Rights. The Creditor acknowledges and agrees that the Company
has no obligation to register the resale of the Shares by the Creditor under the
Securities Act.

          3.6      Representations
and Warranties of the Creditor. The Creditor represents and warrants to the
Company as follows, and acknowledges that the Company is relying upon such
covenants, representations and warranties in connection with the issuance of the
Shares to the Creditor:

          (a)      The
Creditor is not a “U.S. Person” as defined by Regulation S of the Securities
Act, as set forth in Schedule A hereto.

          (b)      The
Creditor is not acquiring the Shares for the account or benefit of a U.S.
Person.

          (c)      The
Creditor was not in the United States at the time the offer to purchase the
Shares was received or at the time this Agreement was executed.

          (d)     
The Creditor has such knowledge, sophistication and experience in business and
financial matters such that it is capable of evaluating the merits and risks of
the investment in the Shares. The Creditor has evaluated the merits and risks of
an investment in the Shares. The Creditor can bear the economic risk of this
investment, and is able to afford a complete loss of this investment.

          (e)      The
Creditor acknowledges that the Company is in the early stages of development of
its business and the Company’s success is subject to a number of significant
risks, including the risk that the Company will not be able to finance its plan
of operations and that the Company’s business plan will not succeed. The
Creditor acknowledges that any forward-looking information provided by the
Company to the Creditor are subject to risks and uncertainties and that the
Company’s actual results may differ materially from the results anticipated.

          (f)      The
Shares will be acquired by the Creditor for investment for the Creditor's own
account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and that the Creditor has no present intention
of selling, granting any participation in, or otherwise distributing the same.
The Creditor does not have any contract, undertaking, agreement or arrangement
with any person to sell, transfer or grant participations to such person or to
any third person, with respect to any of the Shares.

          (g)     
The Creditor has received or has had full opportunity to review the Company’s
SEC Filings. The Creditor has had full opportunity to ask questions and receive
answers from representatives of the Company regarding the Company’s SEC Filings,
the terms and conditions of the Offering and the business, properties, prospects
and financial condition of the Company, each as is necessary to evaluate the
merits and risks of investing in the Shares. The Creditor believes it has
received all the information it considers necessary or appropriate for deciding
whether to purchase the Shares. The Creditor has had full opportunity to discuss
this information with the Creditor’s legal and financial advisers prior to
execution of this Agreement.

          (h)      The
Creditor acknowledges that the Shares will be offered and sold without
registration under the Securities Act in a private placement that is exempt from
the registration provisions of the Securities Act based on the truth and
accuracy of the representations of the Creditor. The Creditor acknowledges that
the Company will rely on these representations in completing the issuance of the
Shares to the Creditor. The Creditor further acknowledges that the offering of
the Shares by the Company has not been reviewed by the SEC or any state
securities regulatory authority.

          (i)      This
Agreement has been duly authorized, validly executed and delivered by the
Creditor.

- 5 -

ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE
COMPANY

          4.1      Representations
and Warranties of the Company. The Company represents and warrants to the
Creditor and acknowledges that the Creditor is relying upon such representations
and warranties in connection with the execution, delivery and performance of
this Agreement:

          (a)      The
Company is a corporation duly incorporated and in good standing under the laws
of the State of Nevada, and has the requisite corporate power and authority to
conduct its business as it is currently being conducted, to enter into this
Agreement and to issue the Shares to the Creditor.

          (b)      The
execution and delivery by the Company of this Agreement has been duly authorized
by all necessary action on the part of the Company, and no further consent or
action is required by the Company, its board of directors or its
stockholders.

          (c)      The
issuance of the Shares has been duly authorized by all necessary corporate
action of the Company.

          (d)      Upon
issuance in accordance with the terms and conditions of this Agreement, the
Shares will be validly issued, fully paid and non-assessable shares of the
Company’s common stock. 

          (e)     
The existing stockholders of the Company have no pre-emptive or similar rights
to purchase shares of Common Stock from the Company.

          (f)      The
issue and sale of the Shares by the Company does not and will not conflict with,
and does not and will not result in a breach of, any of the terms of its
Articles of Incorporation or Bylaws or any agreement or instrument to which the
Company is a party.

ARTICLE 5
MISCELLANEOUS PROVISIONS

          6.1     
Effectiveness of Representations; Survival. Each party is entitled to
rely on the representations, warranties and agreements of each of the other
parties and all such representation, warranties and agreement will be effective
regardless of any investigation that any party has undertaken or failed to
undertake. The representation, warranties and agreements will survive the
Closing and continue in full force and effect until the one year anniversary of
the Closing.

          6.2      Further
Assurances. Each of the parties hereto will cooperate with the others and
execute and deliver to the other parties hereto such other instruments and
documents and take such other actions as may be reasonably requested from time
to time by any other party hereto as necessary to carry out, evidence, and
confirm the intended purposes of this Agreement.

          6.3      Amendment.
This Agreement may not be amended except by an instrument in writing signed by
each of the parties.

          6.4      Expenses.
Each party to this Agreement will bear its respective expenses incurred in
connection with the preparation, execution, and performance of this Agreement
and the transactions contemplated hereby, including all fees and expenses of
agents, representatives, counsel, and accountants. 

          6.5      Entire
Agreement. This Agreement and the schedules attached hereto contain the
entire agreement between the parties with respect to the subject matter hereof
and supersede all prior

- 6 -

arrangements and understandings, both written and oral,
expressed or implied, with respect thereto. Any preceding correspondence or
offers are expressly superseded and terminated by this Agreement.

          6.6      Severability.
If one or more provisions of this Agreement is held to be unenforceable under
applicable law, such provision will be excluded from this Agreement and the
balance of this Agreement will be enforceable in accordance with its terms.

          6.7      Notices.
All notices and other communications required or permitted under to this
Agreement must be in writing and will be deemed given if sent by personal
delivery, faxed with electronic confirmation of delivery,
internationally-recognized express courier or registered or certified mail
(return receipt requested), postage prepaid, to the parties at the following
addresses (or at such other address for a party as will be specified by like
notice):

If to the Creditor:

AT THE ADDRESS SET FORTH ON THE

SIGNATURE PAGE TO THIS AGREEMENT

If to the Company:

MOBIVENTURES INC.
Attention:
Mr. Gary Flint

Suite 3.19 MLS Business Centre
130
Shaftesbury Avenue,
London, England W1D 5EU
Facsimile: +44 (20) 7031
1199

With a copy (which will not constitute
notice) to:

Lang Michener LLP
Attention:
Mr. Michael H. Taylor
Suite 1500, Royal Centre
1055 West Georgia St., Box
11117
Vancouver, British Columbia
Canada V6E 4N7
Phone: (604)
689-9111
Facsimile: (604) 685-7084

All such notices and other communications will be deemed to
have been received (a) in the case of personal delivery, on the date of such
delivery, (b) in the case of a fax, when the party sending such fax has received
electronic confirmation of its delivery, (c) in the case of delivery by
internationally-recognized express courier, on the business day following
dispatch and (d) in the case of mailing, on the fifth business day following
mailing.

          6.8      Headings.
The headings contained in this Agreement are for convenience purposes only
and will not affect in any way the meaning or interpretation of this
Agreement.

          6.9      Benefits.
This Agreement is and will only be construed as for the benefit of or
enforceable by those persons party to this Agreement.

- 7 -

          6.10      Assignment.
This Agreement may not be assigned (except by operation of law) by any party
without the consent of the other parties.

          6.11      Governing
Law. This Agreement will be governed by and construed in accordance with the
laws of the State of Nevada applicable to contracts made and to be performed
therein. 

          6.12      Construction.
The language used in this Agreement will be deemed to be the language chosen by
the parties to express their mutual intent, and no rule of strict construction
will be applied against any party.

          6.13      Counterparts.
This Agreement may be executed in one or more counterparts, all of which will be
considered one and the same agreement and will become effective when one or more
counterparts have been signed by each of the parties and delivered to the other
parties, it being understood that all parties need not sign the same
counterpart.

          6.14      Fax
Execution. This Agreement may be executed by delivery of executed signature
pages by fax and such fax execution will be effective for all purposes.

- 8 -

          6.15      Schedules
and Exhibits. The schedules and exhibits are attached to this Agreement and
incorporated herein.

IN WITNESS WHEREOF, this Subscription Agreement is
executed as of the day and year first written above.

	Amount of Indebtedness: 	USD $ 	 
	 	 	 
	Number of Shares to be Issued: 	  	 
	 	 	 
	(Based on a settlement price of $0.021 per share) 	                 
                         
                         
       Shares 	 
	 	 	 
	Signature of Creditor or Authorized Signatory of
      Creditor: 	  	 
		  	 
	Name of Authorized Signatory of Creditor (if
      applicable): 	  	 
		  	 
	Title of Authorized Signatory of Creditor (if
      applicable): 	  	 
		  	 
	Name of Creditor: 	  	 
	 	 	 
	Address of Creditor: 	  	 
	  	  	 
	 	 	 
	  	  	 
	ACCEPTED BY: 	  	 
	 	 	 
	MOBIVENTURES INC. 	  	 
	  	  	 
	Signature of Authorized Signatory: 	  	 
	 	 	 
	Name of Authorized Signatory: 	  	 
	 	 	 
	Position of Authorized Signatory: 	  	 
	 	 	 
	Date of Acceptance: 	  	 

SCHEDULE A

DEFINITION OF U.S. PERSON

A “U.S. Person” is defined by Regulation S of the Act to be
any person who is:

	 	(a) 	
      any natural person resident in the United
      States;

	 	 	 
	 	(b) 	
      any partnership or corporation organized or
      incorporated under the laws of the United States;

	 	 	 
	 	(c) 	
      any estate of which any executor or administrator is a
      U.S. person;

	 	 	 
	 	(d) 	
      any trust of which any trustee is a U.S.
      person;

	 	 	 
	 	(e) 	
      any agency or branch of a foreign entity located in
      the United States;

	 	 	 
	 	(f) 	
      any non-discretionary account or similar account
      (other than an estate or trust) held by a dealer or other fiduciary
      organized, incorporate, or (if an individual) resident in the United
      States; and

	 	 	 
	 	(g) 	
      any partnership or corporation
  if:

	 	(i) 	
      organized or incorporated under the laws of any
      foreign jurisdiction; and

	 	 	 
	 	(ii) 	
      formed by a U.S. person principally for the purpose of
      investing in securities not registered under the Act, unless it is
      organized or incorporated, and owned, by accredited Subscribers [as
      defined in Section 230.501(a) of the Act] who are not natural persons,
      estates or trusts.

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