EXHIBIT 10.51
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("Agreement") is effective as of June 3, 2004, by
and between Brightpoint, Inc., an Indiana corporation (the "Company"), and
___________________ ("Indemnitee").
RECITALS
The Company and Indemnitee recognize the increasing difficulty in obtaining
directors' and officers' liability insurance, the increases in the cost of such
insurance and the general reductions in the coverage of such insurance.
The Company and Indemnitee further recognize the substantial increase in
corporate litigation in general, subjecting officers and directors to expensive
litigation risks at the same time as the availability and coverage of liability
insurance has been severely limited. Indemnitee does not regard the current
protection available as adequate under the present circumstances, and Indemnitee
and other officers and directors of the Company may not be willing to continue
to serve as officers and directors without additional protection.
The Company desires to attract and retain the services of highly qualified
individuals, such as Indemnitee, to serve as officers and directors of the
Company and to indemnify its officers and directors so as to provide them with
the maximum protection permitted by law.
The Company previously entered into an Indemnification Agreement with the
Indemnitee but has subsequently changed its state of incorporation from Delaware
to Indiana and; therefore, the Company and the Indemnitee desire to enter into a
new Indemnification Agreement subject to Indiana law.
AGREEMENT
In consideration of the mutual promises made in this Agreement, and for other
good and valuable consideration, receipt of which is hereby acknowledged, the
Company and Indemnitee hereby agree as follows:
1. INDEMNIFICATION.
(a) GENERAL AGREEMENT. The Company shall indemnify Indemnitee if Indemnitee is
or was a party to or witness or other participant in, or is threatened to
be made a party to or witness or other participant to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (including an action by or in the right of
the Company) by reason of the fact that Indemnitee is or was a director,
officer, employee or agent of the Company, or any subsidiary of the
Company, by reason of any action or inaction on the part of Indemnitee
while an officer or director or by reason of the fact that Indemnitee is
or was serving at the request of the Company as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including attorneys' fees and
costs), judgments, fines, any interest, assessments, and other charges and
amounts paid in settlement (if such settlement is approved in advance by
the Company, which approval shall not be unreasonably withheld) actually
and reasonably incurred by Indemnitee in connection with such action,
suit or proceeding if Indemnitee acted in good faith and in a manner
Indemnitee reasonably believed (i) in the case of conduct in the
Indemnitee's official capacity with the Company, that the Indemnitee's
conduct was in the Company's best interest and (ii) in all other cases,
that the Indemnitee's conduct was at least not opposed to the Company's
best interests, and, with respect to any criminal action or proceeding,
had no reasonable cause to believe Indemnitee's conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that Indemnitee did
not act in good faith and in a manner which Indemnitee reasonably believed
to be in or not opposed to the best interests of the Company, and, with
respect to any criminal action or proceeding, had reasonable cause to
believe that Indemnitee's conduct was unlawful.
(b) MANDATORY PAYMENT OF EXPENSES. To the extent that Indemnitee has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in Subsection (a) of this Section 1 or the defense
of any claim, issue or matter therein, Indemnitee shall be indemnified
against expenses (including reasonable attorneys' fees) actually and
reasonably incurred by Indemnitee in connection therewith.
2. NO EMPLOYMENT RIGHTS. Nothing contained in this Agreement is intended to
create in Indemnitee any right to continued employment.
3. EXPENSES; INDEMNIFICATION PROCEDURE.
(a) ADVANCEMENT OF EXPENSES. Subject to the terms and conditions of this
Agreement, the Company shall advance all expenses incurred by Indemnitee
in connection with the investigation, defense, settlement or appeal of any
civil or criminal action, suit or proceeding referenced in Section 1(a)
hereof (including amounts actually paid in settlement of any such action,
suit or proceeding). Indemnitee hereby undertakes to repay such amounts
advanced only if, and to the extent that, it shall ultimately be
determined that Indemnitee is not entitled to be indemnified by the
Company as authorized hereby. Any advances made hereunder shall be paid by
the Company to Indemnitee within twenty (20) days following delivery of a
written request therefor by Indemnitee to the Company.
(b) NOTICE/COOPERATION BY INDEMNITEE. Indemnitee shall, as a condition
precedent to his or her right to be indemnified under this Agreement, give
the Company notice in writing as soon as practicable of any claim made
against Indemnitee for which indemnification will or could be sought under
this Agreement. Notice to the Company shall be directed to the Chief
Executive Officer of the Company at the address shown on the signature
page of this Agreement (or such other address as the Company shall
designate in writing to Indemnitee). Notice shall be deemed received three
(3) business days after the date postmarked if sent by domestic certified
or registered mail, properly addressed, otherwise notice shall be deemed
received when such notice shall actually be received by the Company. In
addition, Indemnitee shall give the Company such information and
cooperation as it may reasonably require and as shall be within
Indemnitee's power.
(c) PROCEDURE. Any indemnification and advances provided for in Section 1
shall be made no later than forty-five (45) days after receipt of the
written request of Indemnitee. If a claim under this Agreement, under any
statute, or under any provision of the Company's Restated Articles of
Incorporation or Bylaws providing for indemnification, is not paid in
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full by the Company within forty-five (45) days after a written request
for payment thereof has first been received by the Company, Indemnitee
may, but need not, at any time thereafter bring an action against the
Company to recover the unpaid amount of the claim and, subject to Section
13 of this Agreement, Indemnitee shall also be entitled to be paid for the
expenses (including attorneys' fees and interest, at the Bank One,
Indiana, National Association, prime rate in effect on the date of
Indemnitee's written request, on the unpaid amount of the claim) of
bringing such action. It shall be a defense to any such action (other than
an action brought to enforce a claim for expenses incurred in connection
with any action, suit or proceeding in advance of its final disposition)
that Indemnitee has not met the standards of conduct which make it
permissible under applicable law for the Company to indemnify Indemnitee
for the amount claimed. Indemnitee shall be entitled to receive interim
payments of expenses pursuant to Subsection 3(a) unless and until such
defense may be finally adjudicated by court order or judgment from which
no further right of appeal exists. It is the parties' intention that if
the Company contests Indemnitee's right to indemnification, the question
of Indemnitee's right to indemnification shall be for the court to decide,
and neither the failure of the Company (including its Board of Directors,
any committee or subgroup of the Board of Directors, independent legal
counsel, or its shareholders) to have made a determination that
indemnification of Indemnitee is proper in the circumstances because
Indemnitee has met the applicable standard of conduct required by
applicable law, nor an actual determination by the Company (including its
Board of Directors, any committee or subgroup of the Board of Directors,
independent legal counsel, or its shareholders) that Indemnitee has not
met such applicable standard of conduct, shall create a presumption that
Indemnitee has or has not met the applicable standard of conduct.
(d) NOTICE TO INSURERS. If, at the time of the receipt of a notice of a claim
pursuant to Section 3(b) hereof, the Company has director and officer
liability insurance in effect, the Company shall give prompt notice of
the commencement of such proceeding to the insurers in accordance with
the procedures set forth in the respective policies. The Company shall
thereafter take all necessary or desirable action to cause such insurers
to pay, on behalf of the Indemnitee, all amounts payable as a result of
such proceeding in accordance with the terms of such policies.
(e) SELECTION OF COUNSEL. In the event the Company shall be obligated under
Section 3(a) hereof to pay the expenses of any proceeding against
Indemnitee, the Company, if appropriate, shall be entitled to assume the
defense of such proceeding, with counsel approved by Indemnitee, upon the
delivery to Indemnitee of written notice of its election so to do. After
delivery of such notice, approval of such counsel by Indemnitee and the
retention of such counsel by the Company, the Company will not be liable
to Indemnitee under this Agreement for any fees of counsel subsequently
incurred by Indemnitee with respect to the same proceeding, provided that
(i) Indemnitee shall have the right to employ his or her counsel in any
such proceeding at Indemnitee's expense; and (ii) if (A) the employment of
counsel by Indemnitee has been previously authorized by the Company, (B)
Indemnitee shall have reasonably concluded that there may be a conflict of
interest between the Company and Indemnitee in the conduct of any such
defense, or (C) the Company shall not, in fact, have employed counsel to
assume the defense of such proceeding, then the fees and expenses of
Indemnitee's counsel shall be at the expense of the Company.
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(f) CHANGE OF CONTROL. (i) For purposes of this Agreement, a "Change of
Control" shall be deemed to occur, unless previously consented to in
writing by the Indemnitee, upon (a) individuals who, as of the date
hereof, constitute the Board of Directors of the Company (the "Incumbent
Board") ceasing for any reason to constitute at least a majority of the
Board of Directors of the Company (the "Board"); provided, however, that
any individual becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company's shareholders, was
approved by a vote of at least a majority of the directors then comprising
the Incumbent Board shall be considered as though such individual were a
member of the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs in connection with a
Combination, as defined below, or as a result of either an actual or
threatened election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) or other actual or threatened solicitation
of proxies or consents by or on behalf of a person other than the Board;
(b) the acquisition of beneficial ownership (as determined pursuant to
Rule 13d-3 promulgated under the Exchange Act) of 15% or more of the
voting securities of the Company by any person, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) not
affiliated with the Indemnitee or the Company; provided, however, that no
Change of Control shall be deemed to have occurred -------- ------- for
purposes of this Agreement if such person, entity or group acquires
beneficial ownership of 15% or more of the voting securities of the
Company (i) as a result of a combination of the Company or a wholly-owned
subsidiary of the Company with such person, entity or group or another
entity owned or controlled by such person, entity or group (whether
effected by a merger, consolidation, sale of assets or exchange of stock
or otherwise) (a "Combination") and (ii) (x) executive officers of the
Company (as designated by the Board for purposes of Section 16 of the
Exchange Act) immediately prior to the Combination constitute not less
than 50% of the executive officers of the Company for a period of not less
than six (6) months after the Combination (for purposes of calculating the
executive officers of the Company after the Combination, those executive
officers who are terminated by the Company for Cause or who terminate
their employment without Good Reason shall be excluded from the
calculation entirely), and (y) the members of the Incumbent Board
immediately prior to the Combination constitute not less than 50% of the
membership of the Board after the Combination and (z) after the
Combination, more than 35% of the voting securities of the Company is then
beneficially owned, directly or indirectly, by all or substantially all of
the individuals and entities who were the beneficial owners of the
outstanding voting securities of the Company immediately prior to the
Combination, it being understood that while the existence of a Change in
Control pursuant to this Section 6.4.2(b) may not be ascertainable for six
(6) months after the Combination, if it is ultimately determined that such
Combination constituted a Change in Control, the date of the Change of
Control shall be the effective date of the Combination; (c) the
commencement of a proxy contest against the management for the election of
a majority of the Board of the Company if the group conducting the proxy
contest owns, has or gains the power to vote at least 15% of the voting
securities of the Company; (d) the consummation of a reorganization,
merger or consolidation, or the sale, transfer or conveyance of all or
substantially all of the assets of the Company to any person or entity not
affiliated with the Indemnitee or the Company unless, following such
reorganization, merger, consolidation, sale, transfer or conveyance, the
conditions set forth in clause (b)(ii) above are present; or (e) the
complete liquidation or dissolution of the Company. (ii) With respect to
all matters arising after a Change in Control (other than a Change in
Control approved by a
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majority of the directors on the Board who were directors immediately
prior to such Change in Control) concerning the rights of Indemnitee to
indemnity payments and advancement of expenses under this Agreement, the
Company shall seek legal advice only from independent counsel selected by
Indemnitee and approved by the Company (which approval shall not be
unreasonably withheld) (the "Independent Counsel"), and who has not
otherwise performed services for the Company or the Indemnitee (other than
in connection with indemnification matters) within the last five years.
The Independent Counsel shall not include any person who, under the
applicable standards of professional conduct then prevailing, would have a
conflict of interest in representing either the Company or Indemnitee in
an action to determine Indemnitee's rights under this Agreement. Such
counsel, among other things, shall render its written opinion to the
Company and Indemnitee as to whether and to what extent the Indemnitee
should be permitted to be indemnified under applicable law. The Company
agrees to pay the reasonable fees of the Independent Counsel and to
indemnify fully such counsel against any and all expenses (including
attorneys' fees), claims, liabilities, loss, and damages arising out of or
relating to this Agreement or the engagement of Independent Counsel
pursuant hereto.
(g) ESTABLISHMENT OF TRUST. In the event of a Change in Control (other than a
Change in Control approved by a majority of the directors on the Board who
were directors immediately prior to such Change in Control) the Company
shall, upon written request by Indemnitee, create a trust for the benefit
of the Indemnitee and from time to time upon written request of Indemnitee
shall fund the trust in an amount sufficient to satisfy any and all
expenses reasonably anticipated at the time of each such request to be
incurred in connection with investigating, preparing for, participating
in, and/or defending any proceeding relating to any indemnifiable event
covered herein. The amount or amounts to be deposited in the trust
pursuant to the foregoing funding obligation shall be determined by the
Independent Counsel. The terms of the trust shall provide that (i) the
trust shall not be revoked or the principal thereof invaded without the
written consent of the Indemnitee, (ii) the trustee shall advance, within
ten business days of a request by the Indemnitee, any and all expenses to
the Indemnitee (and the Indemnitee hereby agrees to reimburse the trust
under the same circumstances for which the Indemnitee would be required to
reimburse the Company under Section 3(a) of this Agreement), (iii) the
trust shall continue to be funded by the Company in accordance with the
funding obligation set forth above, (iv) the trustee shall promptly pay to
the Indemnitee all amounts for which the Indemnitee shall be entitled to
indemnification pursuant to this Agreement or otherwise, and (v) all
unexpended funds in the trust shall revert to the Company upon a final
determination by the Independent Counsel or a court of competent
jurisdiction, as the case may be, that the Indemnitee has been fully
indemnified under the terms of this Agreement. The trustee shall be chosen
by the Indemnitee. Nothing in this Section 3(g) shall relieve the Company
of any of its obligations under this Agreement. All income earned on the
assets held in the trust shall be reported as income by the Company for
federal, state, local, and foreign tax purposes. The Company shall pay all
costs of establishing and maintaining the trust and shall indemnify the
trustee against any and all expenses (including attorneys' fees), claims,
liabilities, loss, and damages arising out of or relating to this
Agreement or the establishment and maintenance of the trust.
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4 ADDITIONAL INDEMNIFICATION RIGHTS; NONEXCLUSIVITY.
(a) SCOPE. Notwithstanding any other provision of this Agreement, the Company
hereby agrees to indemnify the Indemnitee to the fullest extent permitted
by law, notwithstanding that such indemnification is not specifically
authorized by the other provisions of this Agreement, the Company's
Restated Articles of Incorporation, the Company's Bylaws or by statute. In
the event of any change in any applicable law, statute or rule which
narrows the right of an Indiana corporation to indemnify a member of its
board of directors or an officer, such changes, to the extent not
otherwise required by such law, statute or rule to be applied to this
Agreement shall have no effect on this Agreement or the parties' rights
and obligations hereunder.
(b) NONEXCLUSIVITY. The indemnification provided by this Agreement shall not
be deemed exclusive of any rights to which Indemnitee may be entitled
under the Company's Restated Articles of Incorporation, its Bylaws, any
agreement, any vote of shareholders or disinterested members of the
Company's Board of Directors, the Business Corporation Law of the State of
Indiana, or otherwise, both as to action in Indemnitee's official capacity
and as to action in another capacity while holding such office. The
indemnification provided under this Agreement shall continue as to
Indemnitee for any action taken or not taken while serving in an
indemnified capacity even though he or she may have ceased to serve in
such capacity at the time of any action, suit or other covered proceeding.
5. PARTIAL INDEMNIFICATION. If Indemnitee is entitled under any provision of
this Agreement to indemnification by the Company for some or a portion of
the expenses, judgments, fines or penalties actually or reasonably
incurred by him or her in the investigation, defense, appeal or settlement
of any civil or criminal action, suit or proceeding, but not, however, for
the total amount thereof, the Company shall nevertheless indemnify
Indemnitee for the portion of such expenses, judgments, fines or penalties
to which Indemnitee is entitled.
6. MUTUAL ACKNOWLEDGMENT. Both the Company and Indemnitee acknowledge that in
certain instances, Federal law or applicable public policy may prohibit
the Company from indemnifying its directors and officers under this
Agreement or otherwise. Indemnitee understands and acknowledges that the
Company has undertaken or may be required in the future to undertake with
the Securities and Exchange Commission to submit the question of
indemnification to a court in certain circumstances for a determination of
the Company's right under public policy to indemnify Indemnitee.
7. OFFICER AND DIRECTOR LIABILITY INSURANCE. The Company shall, from time to
time, make the good faith determination whether or not it is practicable
for the Company to obtain and maintain a policy or policies of insurance
with reputable insurance companies providing the officers and directors of
the Company with coverage for losses from wrongful acts, or to ensure the
Company's performance of its indemnification obligations under this
Agreement. Among other considerations, the Company will weigh the costs of
obtaining such insurance coverage against the protection afforded by such
coverage. Notwithstanding the foregoing, the Company shall have no
obligation to obtain or maintain such insurance if the Company determines
in good faith that such insurance is not necessary or is not reasonably
available, if the premium costs for such insurance are
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disproportionate to the amount of coverage provided, if the coverage
provided by such insurance is limited by exclusions so as to provide an
insufficient benefit, or if Indemnitee is covered by similar insurance
maintained by a subsidiary or parent of the Company. However, the
Company's decision whether or not to adopt and maintain such insurance
shall not affect in any way its obligations to indemnify its officers and
directors under this Agreement or otherwise. In all policies of director
and officer liability insurance, Indemnitee shall be named as an insured
in such a manner as to provide Indemnitee the same rights and benefits as
are accorded to the most favorably insured of the Company's directors, if
Indemnitee is a director; or of the Company's officers, if Indemnitee is
not a director of the Company, but is an officer; or of the Company's key
employees, if Indemnitee is not an officer or director, but is a key
employee.
8. SEVERABILITY. Nothing in this Agreement is intended to require or shall be
construed as requiring the Company to do or fail to do any act in
violation of applicable law. The Company's inability, pursuant to court
order, to perform its obligations under this Agreement shall not
constitute a breach of this Agreement. The provisions of this Agreement
shall be severable as provided in this Section 8. If this Agreement or any
portion hereof shall be invalidated on any ground by any court of
competent jurisdiction, then the Company shall nevertheless indemnify
Indemnitee to the full extent permitted by any applicable portion of this
Agreement that shall not have been invalidated, and the balance of this
Agreement not so invalidated shall be enforceable in accordance with its
terms.
9. EXCEPTIONS. Any other provision herein to the contrary notwithstanding,
the Company shall not be obligated pursuant to the terms of this
Agreement:
(A) CLAIMS INITIATED BY INDEMNITEE. To indemnify or advance expenses to
Indemnitee with respect to proceedings or claims initiated or brought
voluntarily by Indemnitee and not by way of defense, except with respect
to proceedings brought to establish or enforce a right to indemnification
under this Agreement or any other statute or law or otherwise as required
under Section 23-1-37 of the Indiana Business Corporation Law, but such
indemnification or advancement of expenses may be provided by the Company
in specific cases if the Board of Directors has approved the initiation or
bringing of such suit.
(B) LACK OF GOOD FAITH. To indemnify Indemnitee for any expenses incurred by
the Indemnitee with respect to any proceeding instituted by Indemnitee to
enforce or interpret this Agreement, if a court of competent jurisdiction
determines that each of the material assertions made by the Indemnitee in
such proceeding was not made in good faith or was frivolous.
(C) INSURED CLAIMS. To indemnify Indemnitee for expenses or liabilities of any
type whatsoever (including, but not limited to, judgments, fines, ERISA
excise taxes or penalties, and amounts paid in settlement) to the extent
such expenses or liabilities have been paid directly to Indemnitee by an
insurance carrier under a policy of officers' and directors' liability
insurance maintained by the Company.
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(d) CLAIMS UNDER SECTION 16(b). To indemnify Indemnitee for expenses and the
payment of profits arising from the purchase and sale by Indemnitee of
securities in violation of Section 16(b) of the Securities Exchange Act of
1934, as amended, or any similar successor statute.
10. CONSTRUCTION OF CERTAIN PHRASES.
(a) For purposes of this Agreement, references to the "COMPANY" shall include
any constituent corporation (including any constituent of a constituent)
absorbed in a consolidation or merger which, if its separate existence had
continued, would have had power and authority to indemnify its directors,
officers, and employees or agents, so that if Indemnitee is or was a
director, officer, employee or agent of such constituent corporation, or
is or was serving at the request of such constituent corporation as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, Indemnitee shall stand in the
same position under the provisions of this Agreement with respect to the
resulting or surviving corporation as Indemnitee would have with respect
to such constituent corporation if its separate existence had continued.
(b) For purposes of this Agreement, references to "OTHER ENTERPRISES", shall
include employee benefit plans; references to "FINES" shall include any
excise taxes assessed on Indemnitee with respect to an employee benefit
plan; and references to "SERVING AT THE REQUEST OF THE COMPANY" shall
include any service as a director, officer, employee or agent of the
Company which imposes duties on, or involves services by, such director,
officer, employee or agent with respect to an employee benefit plan, its
participants, or beneficiaries; and if Indemnitee acted in good faith and
in a manner Indemnitee reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan, Indemnitee
shall be deemed to have acted in a manner "NOT OPPOSED TO THE BEST
INTERESTS OF THE COMPANY" as referred to in this Agreement.
11. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the Company
and its successors and assigns, and shall inure to the benefit of
Indemnitee and Indemnitee's estate, heirs, legal representatives and
assigns.
12. ATTORNEYS' FEES. In the event that any action is instituted by Indemnitee
under this Agreement to enforce or interpret any of the terms hereof,
Indemnitee shall be entitled to be paid all court costs and expense,
including reasonable attorneys' fees, incurred by Indemnitee with respect
to such action. The Company hereby consents to service of process and to
appear in any such action. In the event of an action instituted by or in
the name of the Company under this Agreement or to enforce or interpret
any of the terms of this Agreement, Indemnitee shall be entitled to be
paid all court costs and expenses, including attorneys' fees and costs,
incurred by Indemnitee in defense of such action (including with respect
to Indemnitee's counterclaims and cross-claims made in such action).
13. NOTICE. All notices, requests, demands and other communications under this
Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and receipted for by the party addressee, on the date of
such receipt, or (ii) if mailed by domestic certified or
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registered mail with postage prepaid, on the third business day after the
date postmarked. Addresses for notice to either party are as shown on the
signature page of this Agreement, or as subsequently modified by written
notice.
14. CONSENT TO JURISDICTION. The Company and Indemnitee each hereby
irrevocably consent to the jurisdiction of the courts of the State of
Indiana for all purposes in connection with any action or proceeding which
arises out of or relates to this Agreement and agree that any action
instituted under this Agreement shall be brought only in the state courts
of the State of Indiana.
15. CHOICE OF LAW. This Agreement shall be governed by and its provisions
construed in accordance with the laws of the State of Indiana, as applied
to contracts between Indiana residents entered into and to be performed
entirely within Indiana.
16. MODIFICATION. This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof. All prior
negotiations, agreements and understandings between parties with respect
thereto are superseded hereby. This Agreement may not be modified or
amended except by an instrument in writing signed by or on behalf of the
parties hereto.
The parties hereto have executed this Agreement as of the day and year set forth
on the first page of this Agreement.
BRIGHTPOINT, INC.
By:
________________________________
Name:
________________________________
Title:
________________________________
AGREED TO AND ACCEPTED:
INDEMNITEE
____________________________________
Printed Name:
Address: ___________________________
___________________________
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