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EXHIBIT 10.10
LOAN TERMINATION AGREEMENT
This Loan Termination Agreement ("Termination Agreement") made this
30th day of June, 2000 by and between FUTURELINK CORP. (the "Company") and
XXXXXXX X. XXXXXX XX. ("Xxxxxx").
WHEREAS, the Company's predecessor in interest and Xxxxxx entered into
a Loan Agreement dated July 15, 1999 which was effective August 1, 1999 and
which was previously modified by a First Amendment to Loan Agreement which was
effective November 15, 1999 (collectively "Loan Agreement"); and
WHEREAS, pursuant to the Loan Agreement, Xxxxxx purchased from the
Company certain shares of the Company's stock and the Company loaned to Xxxxxx
the funds to buy such shares; and
WHEREAS, as of this date a portion of the loan has been satisfied and
certain shares have been deemed to have been paid for in full; and
WHEREAS, the Loan Agreement has a termination date of August 1, 2001;
and
WHEREAS, the parties believe that it makes sense to bring about an
early termination of the Loan Agreement, in part, because of the volatility of
the trading price of the stock; and
WHEREAS, the parties wish to also resolve the matter of certain monies
advanced by the Company to pay taxes of Xxxxxx, namely $109,016 for Federal
taxes, $4036 for Medicare and $15,989 for State taxes (or a total of $129,041,
hereinafter "Tax Obligation"); and
WHEREAS, the parties wish to utilize this Termination Agreement to
effect the objectives set forth above.
NOW, THEREFORE, BE IT AGREED:
1. The parties acknowledge and agree that the outstanding principal
amount due under the Loan Agreement as of June 30, 2000 is $1,250,000 ("Loan
Amount").
2. The parties acknowledge and agree that the outstanding and
unforgiven interest under the Loan Agreement as of June 30, 2000 is $33,984
("Interest Amount").
3. The parties acknowledge and agree that the number of shares of the
Company's stock that has been paid for and is the property of Xxxxxx is 29,100
shares (all of which are being held by the Trustee) (hereinafter the "Vested
Shares").
4. The value of the stock as determined in accordance with the Loan
Agreement over the five previous trading days is $9.08 per share.
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5. The parties wish to discharge the total indebtedness of Xxxxxx to
the Company in the following manner:
a) the Loan Amount and the Interest Amount, in the amount of
$1,283,984 (the "Loan Indebtedness") will be satisfied by the
assignment to the Company of 141,408 "unvested" shares held by the
Trustee, leaving 4092 "unvested" shares to vest according to their
normal vesting schedule;
b) the Tax Obligation, shall be satisfied by the assignment to
the Company of 14,212 shares of the Vested Shares, also held by the
Trustee. The execution of this Termination Agreement by Xxxxxx shall be
deemed to effect this Assignment. The remaining 14,888 shares of the
Vested Shares would be released to Xxxxxx within thirty (30) business
days.
6. Upon implementation of Paragraph 5, the Loan Agreement shall be
deemed terminated and the parties shall have no further obligations to one
another under the Loan Agreement. Further, the Tax Obligation shall be deemed
satisfied in full.
7. Xxxxxx agrees that, he will save harmless and indemnify the Company
from and against all claims, charges, taxes or penalties and demands which may
be made by any governmental agency or body and payable by Xxxxxx arising out of
this Termination Agreement or the related matters herein.
8. The Company agrees that, it will save harmless and indemnify Xxxxxx
from and against all claims, charges, taxes or penalties and demands which may
be made by any governmental agency or body and payable by the Company arising
out of this Termination Agreement or the related matters herein.
9. The parties hereto shall respectively do all acts and things and
execute all documents reasonably required to give effect to this Agreement.
10. This Agreement may be executed in one or more counterparts by
facsimile each of which together shall constitute the entire agreement.
11. This Termination Agreement shall be governed and interpreted under
the laws of the State of California.
[Signatures on the following page]
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[Signature Page to Loan Termination Agreement]
IN WITNESS WHEREOF, the parties have set their hands and seals as of
the date first written above.
FUTURELINK CORP.
By: /s/ XXXXXXX X. XXXXX
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Print Name: Xxxxxxx X. Xxxxx
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Print Title: SVP Administration
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By: /s/ XXXX X.X. XXXXX
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Print Name: Xxxx X.X. Xxxxx
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Print Title: VP & Secretary
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/s/ X. X. XXXX /s/ XXXXXXX X. XXXXXX, XX.
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Witness XXXXXXX X. XXXXXX, XX.
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