MailKey Corporation
00 Xxxxxxxx Xxxx Xxxx
Xxxxxx
X0 ODT
January 18,2005
To:Xxxx Xxxxx
iElement Inc.
Dear Xxxx,
Re: Xxxx Xxxxx Employment Agreement - Binding Letter of Intent
The goal of this letter is to set forth the essential terms and conditions of
your Employment Agreement following the Mailkey and I-Element, Inc. merger
agreement to be consummated on January 17,2005.
The terms and conditions set forth here shall be considered binding to both
parties and will survive until the Parties reach a definitive agreement on an
Employment Agreement. Both Parties to this Binding Letter of Intent agree to
work in good faith to complctc thc dcfinitive Employment Agreement within 60
days of the closing of the merger between Mailkey Corporation ("Parent") and
I-Element, Inc. ("Sub")."). This Letter of Intent replaces any earlier letter
of intent.
The Parties agree to the following terms and conditions:
1. Xxxx Xxxxx'x base salary will be paid to Krarnerica Capital
Corporation and will equal $25,000 per month.
2. Title shall be Chief Executive Officer of both Parent and Sub.
3. Duties shall be all the usual duties of CEO.
4. Mr. Zwcig primary office shall bc in the Dallas, TX metropolitan area.
5. He shall receive standard benefits as provided by Sub, but in no event
shall he receive less than four weeks of vacation per year, and as
revised or amended from time to time.
6. Xx. Xxxxx shall have all reasonable business expenses reimbursed by
Sub.
7. Termination / Cessation of Services by Xx. Xxxxx:
a. If Xx. Xxxxx is terminated without cause by the Parent,
Parent shall immediately pay off all Notes owed to Xx. Xxxxx
or his entities, shall fully vest and accelerate all
outstanding unvested options, and shall pay off in full his
earned performance bonuses, shall pay all accrued vacation
and other benefits.
b. If Parent terminates Xxxx Xxxxx prior to expiration of the
48 month period for any reason other than "cause," then
parent is obligated to:
Page 2
January 18,2005
Re: Xxxx Xxxxx Employment Agreement - Binding Letter of Intent
i. Pay Xx. Xxxxx in full all Notes owed to either Xxxx
Xxxxx or Kramerica Capital Corporation,
ii. Pay Xx. Xxxxx within five busincss days at least 75% of
thc earned bonus plan set forth by the Company Board of
Directors.
c. If Xx. Xxxxx is terminated for cause, Company shall pay off
all of Notes and other obligations due and payable to Xx.
Xxxxx within 60 days.
8. The term of this Employment Agreement will be 48 months; unless an event of
default pursuant to section 3.1A of the Company loan notes issued in
pursuance of the merger with iElement is declared, in which event, the
employment agreement under this letter and any subsequent binding
employment agreement(s) shall be immediately terminated with no further
payment due except any base salary and expenses due up until the date of
the declaration of the event of default.
9. Xx Xxxxx will receive bonuses according to the following
- Months 1-12 no bonus
- Months 13 -24 $1M target bonus. This bonus will be calculated on the
closing average revenue number and EBITDA for months 22-24. The target is $15M
in annualized revenue ($1,250,000 per month) with an EBITDA target of 15%.
- Months 25-36 $2M target bonus. The target is $22.5M in actual revenue
during months 25-36. with an EBITDA of 18%.
- Months 37-48 $3M target bonus. The target is $30M in actual revenue during
months 37-48, with an EBITDA of 21%.
There will be a sliding scale agreed by the company for providing partial
bonuses if the performance is less than the target, but still good. Bonus will
be paid in promissory notes. Any cash payment to Xx Xxxxx against the promissory
notes cannot exceed 25% of EBITDA cash flow in one month.
10. During the term of this Agreement, Mailkey shall nominate Xxxx Xxxxx for a
seat on the Parent's Board of Directors; and
//
// Intentionally Left Blank
//
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January 18,2005
Re: Xxxx Xxxxx Employment Agreement - Binding Letter of Intent
11. Mailkey shall use its best efforts to cause I-Element to enter into an
Employment Agreement with Xxxx Xxxxx pursuant to the essential terms and
conditions of this Letter of Intent.
IN WITNESS WHEREOF, the parties have executed this Binding Letter of Intent as
to the above essential terms and conditions for an Emp1oyment Agreement between
Company and Xx. Xxxx Xxxxx as of the date first hereinabove written.
COMPANY - MAILKEY CORPORATION
/s/ Xxx Xxxx-Xxxxx
---------------------------------------
By: Xxx Xxxx-Xxxxx
----------------------------------
Its: CEO
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I-ELEMENT, INC.
/s/ Xxxx Xxxxx
---------------------------------------
By: Xxxx Xxxxx
----------------------------------
Its: CEO
----------------------------------
KRAMERICA CAPITAL CORPORATION, a Nevada corporation
/s/ Xxxx Xxxxx
---------------------------------------
By: Xxxx Xxxxx
----------------------------------
Its: CEO
----------------------------------
XXXX XXXXX, as an individual
/s/ Xxxx Xxxxx
---------------------------------------
By: Xxxx Xxxxx
----------------------------------
Its: CEO
----------------------------------
