EXHIBIT 10.8
INDEMNIFICATION AGREEMENT
This Indemnification Agreement (the "Agreement") is made and entered into
as of the 4th day of December, 1997, by and between ClientLink, Inc., a Delaware
corporation (the "Company"), and _________________, a __________ resident
("Indemnitee").
WHEREAS, competent and experienced persons are reluctant to serve or to
continue to serve corporations as directors or in other capacities unless they
are provided with adequate protection through insurance or indemnification (or
both) against claims and actions against them arising out of their service to
and activities on behalf of those corporations;
WHEREAS, the current uncertainties relating to the availability of adequate
insurance for directors and officers have increased the difficulty for
corporations to attract and retain competent and experienced persons;
WHEREAS, the Board of Directors of the Company has determined that the
continuation of present trends in litigation will make it more difficult to
attract and retain competent and experienced persons, that this situation is
detrimental to the best interests of the stockholders of the Company and that
such corporation should act to assure its directors and officers that there will
be increased certainty of adequate protection in the future;
WHEREAS, the Certificate of Incorporation of the Company requires the
Company to indemnify its directors and officers to the fullest extent permitted
by law;
WHEREAS, it is reasonable, prudent, and necessary for the Company to
obligate itself contractually to indemnify its directors and officers to the
fullest extent permitted by applicable law in order to induce them to serve or
continue to serve such corporation;
WHEREAS, Indemnitee is willing to serve, continue to serve, and to take on
additional service for or on behalf of the Company on the condition that he be
indemnified to the fullest extent permitted by law; and
WHEREAS, concurrently with the execution of this Agreement, Indemnitee is
agreeing to serve or to continue to serve as a director or officer of the
Company.
NOW, THEREFORE, in consideration of the foregoing premises, Indemnitee's
agreement to serve or continue to serve as a director or officer of the Company,
and the covenants contained in this Agreement, the parties hereto hereby
covenant and agree as follows:
1. Certain Definitions:
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(a) Acquiring Person: shall mean any Person other than (i) the
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Company, (ii) any of the Company's Subsidiaries, (iii) any employee benefit plan
of the Company or of a Subsidiary of the Company or of a corporation owned
directly or indirectly by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company, or (iv) any trustee
or other fiduciary holding securities under an employee benefit plan of the
Company or of a Subsidiary of the Company or of a corporation owned directly or
indirectly by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company.
(b) Change in Control: shall be deemed to have occurred if:
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(i) any Acquiring Person, other than CompuCom Systems, Inc., is
or becomes the "beneficial owner" (as defined in Rule l3d-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")), directly or indirectly,
of securities of the Company representing 20% or more of the combined voting
power of the then outstanding Voting Securities of the Company; or
(ii) members of the Incumbent Board cease for any reason to
constitute at least a majority of the Board of Directors of the Company; or
(iii) a public announcement is made of a tender or exchange offer
by any Acquiring Person for 50% or more of the outstanding Voting Securities of
the Company, and the Board of Directors of the Company approves or fails to
oppose that tender or exchange offer in its statements in Schedule 14D-9 under
the Exchange Act; or
(iv) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, partnership or other
entity (or, if no such approval is required, the consummation of such a merger
or consolidation of the Company), other than a merger or consolidation that
would result in the Voting Securities of the Company outstanding immediately
prior to the consummation thereof continuing to represent (either by remaining
outstanding or by being converted into Voting Securities of the surviving entity
or of a parent of the surviving entity) a majority of the combined voting power
of the Voting Securities of the surviving entity (or its parent) outstanding
immediately after that merger or consolidation; or
(v) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all the Company's assets (or, if no such
approval is required, the consummation of such a liquidation, sale, or
disposition in one transaction or series of related transactions) other than a
liquidation, sale, or disposition of all or substantially all the Company's
assets in one transaction or a series of related transactions to a corporation
owned directly or indirectly by the stockholders of the Company in substantially
the same proportions as their ownership of stock of the Company.
(c) Claim: any threatened, pending, or completed action, suit, or
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proceeding (including, without limitation, securities laws actions, suits, and
proceedings), or any inquiry or investigation (including discovery), whether
conducted by the Company or any other party, that Indemnitee in good faith
believes might lead to the institution of any action, suit, or proceeding,
whether civil, criminal, administrative, investigative, or other.
(d) Company: ClientLink, Inc.
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(e) Expenses: all costs, expenses (including attorneys' and expert
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witnesses' fees), and obligations paid or incurred in connection with
investigating, defending (including affirmative defenses and counterclaims),
being a witness in, or participating in (including on appeal), or preparing to
defend, be a witness in, or participate in, any Claim relating to any
Indemnifiable Event.
(f) Incumbent Board: individuals who, as of December 4, 1997,
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constitute the Board of Directors of the Company and any other individual who
becomes a director of the Company after that date and whose election or
appointment by the Board of Directors or nomination for election by the
Company's stockholders was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board.
(g) Indemnifiable Event: any event or occurrence related to the fact
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that Indemnitee is or was a director, officer, employee, agent, or fiduciary of
the Company, or is or was serving at the request of the Company as a director,
officer, employee, trustee, agent, or fiduciary of another corporation,
partnership, joint venture, employee benefit plan, trust, or other enterprise,
or by reason of anything done or not done by Indemnitee in any such capacity.
For purposes of this Agreement, the Company agrees that Indemnitee's service on
behalf of or with respect to any Subsidiary of the Company shall be deemed to be
at the request of the Company.
(h) Person: any person or entity of any nature whatsoever,
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specifically including an individual, a firm, a company, a corporation, a
partnership, a limited liability company, a trust, or other entity. A Person,
together with that Person's Affiliates and Associates (as those terms are
defined in Rule 12b-2 under the Exchange Act), and any Persons acting as a
partnership, limited partnership, joint venture, association, syndicate, or
other group (whether or not formally organized), or otherwise acting jointly or
in concert or in a coordinated or consciously parallel manner (whether or not
pursuant to any express agreement), for the purpose of acquiring, holding,
voting, or disposing of securities of the Company with such Person, shall be
deemed a single "Person."
(i) Potential Change in Control: shall be deemed to have occurred if
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(i) the Company enters into an agreement, the consummation of which would result
in the occurrence of a Change in Control; (ii) any Person (including the
Company) publicly announces an intention to take or to consider taking actions
that, if consummated, would constitute a Change in Control; (iii) any Acquiring
Person (other than CompuCom Systems, Inc.) who is or becomes the beneficial
owner, directly or indirectly, of securities of the Company representing 10% or
more of the combined voting power of the then outstanding Voting Securities of
the Company increases its beneficial ownership of such securities by 5% or more
over the percentage so owned by that Person on the date of this Agreement; or
(iv) the Board of Directors of the Company adopts a resolution to the effect
that, for purposes of this Agreement, a Potential Change in Control has
occurred.
(j) Reviewing Party: any appropriate person or body consisting of a
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member or members of the Company's Board of Directors or any other person or
body appointed by the Board (including Special Counsel referred to in Section 3)
who is not a party to the particular Claim for which Indemnitee is seeking
indemnification.
(k) Special Counsel: special, independent counsel selected by
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Indemnitee and approved by the Company (which approval shall not be unreasonably
withheld), and who has not
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otherwise performed services for the Company or for Indemnitee within the last
three years (other than as Special Counsel under this Agreement or similar
agreements).
(l) Subsidiary: with respect to any Person, any corporation or other
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entity of which a majority of the voting power of the voting equity securities
or equity interest is owned, directly or indirectly, by that Person.
(m) Voting Securities: any securities that vote generally in the
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election of directors, in the admission of general partners, or in the selection
of any other similar governing body.
2. Basic Indemnification and Expense Reimbursement Arrangement.
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(a) If Indemnitee was, is, or becomes a party to or witness or other
participant in, or is threatened to be made a party to or witness or other
participant in, a Claim by reason of (or arising in part out of) an
Indemnifiable Event, the Company shall indemnify Indemnitee to the fullest
extent permitted by law as soon as practicable but in any event no later than 30
days after written demand is presented to the Company, against any and all
Expenses, judgments, fines, penalties, and amounts paid in settlement (including
all interest, assessments, and other charges paid or payable in connection with
or in respect of such Expenses, judgments, fines, penalties, or amounts paid in
settlement) of or with respect to that Claim. Notwithstanding the foregoing,
the obligations of the Company under Section 2(a) shall be subject to the
condition that the Reviewing Party shall not have determined (in a written
opinion, in any case in which Special Counsel referred to in Section 3 hereof is
involved) that Indemnitee would not be permitted to be indemnified under
applicable law. Nothing contained in this Agreement shall require any
determination under this Section 2(a) to be made by the Reviewing Party prior to
the disposition or conclusion of the Claim against the Indemnitee; provided,
however, that Expense Advances shall continue to be made by the Company pursuant
to and to the extent required by the provisions of Section 2(b).
(b) If so requested by Indemnitee, the Company shall pay any and all
Expenses incurred by Indemnitee (or, if applicable, reimburse Indemnitee for any
and all Expenses incurred by Indemnitee and previously paid by Indemnitee)
within two business days after such request (an "Expense Advance"). The Company
shall be obligated to make or pay an Expense Advance in advance of the final
disposition or conclusion of any Claim. In connection with any request for an
Expense Advance, if requested by the Company, Indemnitee or Indemnitee's counsel
shall submit an affidavit stating that the Expenses incurred were reasonable.
Any dispute as to the reasonableness of any Expense shall not delay an Expense
Advance by the Company, and the Company agrees that any such dispute shall be
resolved only upon the disposition or conclusion of the underlying Claim against
the Indemnitee. If, when, and to the extent that the Reviewing Party determines
that Indemnitee would not be permitted to be indemnified with respect to a Claim
under applicable law, the Company shall be entitled to be reimbursed by
Indemnitee and Indemnitee hereby agrees to reimburse the Company without
interest (which agreement shall be an unsecured obligation of Indemnitee) for
all related Expense Advances theretofore made or paid by the Company; provided,
however, that if Indemnitee has commenced legal proceedings in a court of
competent jurisdiction to secure a determination that Indemnitee should be
indemnified under applicable law, any determination made by the Reviewing Party
that Indemnitee would not be permitted to be
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indemnified under applicable law shall not be binding and Indemnitee shall not
be required to reimburse the Company for any Expense Advance, and the Company
shall be obligated to continue to make Expense Advances, until a final judicial
determination is made with respect thereto (as to which all rights of appeal
therefrom have been exhausted or lapsed). If there has not been a Change in
Control, the Reviewing Party shall be selected by the Board of Directors of the
Company. If there has been a Change in Control, the Reviewing Party shall be
advised by or shall be Special Counsel referred to in Section 3 hereof, if and
as Indemnitee so requests. If there has been no determination by the Reviewing
Party or if the Reviewing Party determines that Indemnitee substantively would
not be permitted to be indemnified in whole or in part under applicable law,
Indemnitee shall have the right to commence litigation in any court in the State
of Texas having subject matter jurisdiction thereof and in which venue is proper
seeking an initial determination by the court or challenging any such
determination by the Reviewing Party or any aspect thereof, and the Company
hereby consents to service of process and to appear in any such proceeding. Any
determination by the Reviewing Party otherwise shall be conclusive and binding
on the Company and Indemnitee.
3. Change in Control. The Company agrees that, if there is a Change in
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Control and if Indemnitee requests in writing that Special Counsel advise the
Reviewing Party or be the Reviewing Party, then the Company shall not deny any
indemnification payments (and Expense Advances shall continue to be paid by the
Company pursuant to Section 2(b)) that Indemnitee requests or demands under this
Agreement or any other agreement or law now or hereafter in effect relating to
Claims for Indemnifiable Events. The Company further agrees not to request or
seek reimbursement from Indemnitee of any related Expense Advances unless, with
respect to a denied indemnification payment, Special Counsel has rendered its
written opinion to the Company and Indemnitee that the Company would not be
permitted under applicable law to pay Indemnitee such indemnification payment.
The Company agrees to pay the reasonable fees of Special Counsel referred to in
this Section 3 and to indemnify fully Special Counsel against any and all
expenses (including attorneys' fees), claims, liabilities, and damages arising
out of or relating to this Agreement or Special Counsel's engagement pursuant
hereto.
4. Establishment of Trust. In the event of a Potential Change in
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Control, the Company shall, upon written request by Indemnitee, create a trust
for the benefit of Indemnitee (the "Trust") and from time to time upon written
request of Indemnitee the Company 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, and
defending any Claim relating to an Indemnifiable Event, and any and all
judgments, fines, penalties, and settlement amounts of any and all Claims
relating to an Indemnifiable Event from time to time actually paid or claimed,
reasonably anticipated, or proposed to be paid. The amount or amounts to be
deposited in the Trust pursuant to the foregoing funding obligation shall be
determined by the Reviewing Party, in any situation in which Special Counsel
referred to in Section 3 is involved. The terms of the Trust shall provide
that, upon a Change in Control, (i) the Trust shall not be revoked or the
principal thereof invaded, without the written consent of Indemnitee; (ii) the
trustee of the Trust shall advance, within two business days of a request by
Indemnitee, any and all Expenses to Indemnitee (and Indemnitee hereby agrees to
reimburse the Trust under the circumstances in which Indemnitee would be
required to reimburse the Company for Expense Advances under Section 2(b) 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 of the
Trust shall promptly pay to Indemnitee all amounts for which
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Indemnitee shall be entitled to indemnification pursuant to this Agreement or
otherwise; and (v) all unexpended funds in that Trust shall revert to the
Company upon a final determination by the Reviewing Party or a court of
competent jurisdiction, as the case may be, that Indemnitee has been fully
indemnified under the terms of this Agreement. The trustee of the Trust shall be
chosen by Indemnitee. Nothing in this Section 4 shall relieve the Company of any
of its obligations under this Agreement.
5. Indemnification for Additional Expenses. The Company shall indemnify
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Indemnitee against any and all costs and expenses (including attorneys' and
expert witnesses' fees) and, if requested by Indemnitee, shall (within two
business days of that request) advance those costs and expenses to Indemnitee,
that are incurred by Indemnitee in connection with any claim asserted against or
action brought by Indemnitee for (i) indemnification or advance payment of
Expenses by the Company under this Agreement or any other agreement or provision
of the Company's Certificate of Incorporation or Bylaws now or hereafter in
effect relating to Claims for Indemnifiable Events or (ii) recovery under any
directors' and officers' liability insurance policies maintained by the Company,
regardless of whether Indemnitee ultimately is determined to be entitled to that
indemnification, advance expense payment, or insurance recovery, as the case may
be.
6. Partial Indemnity. If Indemnitee is entitled under any provision of
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this Agreement to indemnification by the Company for some or a portion of the
Expenses, judgments, fines, penalties, and amounts paid in settlement of a Claim
but not, however, for all of the total amount thereof, the Company shall
nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is
entitled. Moreover, notwithstanding any other provision of this Agreement, to
the extent that Indemnitee has been successful on the merits or otherwise in
defense of any or all Claims relating in whole or in part to an Indemnifiable
Event or in defense of any issue or matter therein, including dismissal without
prejudice, Indemnitee shall be indemnified against all Expenses incurred in
connection therewith.
7. Contribution.
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(a) Contribution Payment. To the extent the indemnification provided
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for under any provision of this Agreement is determined (in the manner
hereinabove provided) not to be permitted under applicable law, then if
Indemnitee was, is, or becomes a party to or witness or other participant in, or
is threatened to be made a party to or witness or other participant in, a Claim
by reason of (or arising in part out of) an Indemnifiable Event, the Company, in
lieu of indemnifying Indemnitee, shall contribute to the amount of any and all
Expenses, judgments, fines, or penalties assessed against or incurred or paid by
Indemnitee on account of that Claim and any and all amounts paid in settlement
of that Claim (including all interest, assessments, and other charges paid or
payable in connection with or in respect of such Expenses, judgments, fines,
penalties, or amounts paid in settlement) for which such indemnification is not
permitted ("Contribution Amounts"), in such proportion as is appropriate to
reflect the relative fault with respect to the Indemnifiable Event giving rise
to the Contribution Amounts of Indemnitee, on the one hand, and of the Company
and any and all other parties (including officers and directors of the Company
other than Indemnitee) who may be at fault with respect to such Indemnifiable
Event (collectively, including the Company, the "Third Parties") on the other
hand.
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(b) Relative Fault. The relative fault of the Third Parties and the
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Indemnitee shall be determined (i) by reference to the relative fault of
Indemnitee as determined by the court or other governmental agency assessing the
Contribution Amount, or (ii) to the extent such court or other governmental
agency does not apportion relative fault, by the Reviewing Party (which shall
include Special Counsel) after giving effect to, among other things, the
relative intent, knowledge, access to information, and opportunity to prevent or
correct the applicable Indemnifiable Event and other relevant equitable
considerations of each party. The Company and Indemnitee agree that it would
not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation or by any other method of allocation which
does take account of the equitable considerations referred to in this Section
7(b).
8. Burden of Proof. In connection with any determination by the
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Reviewing Party or otherwise as to whether Indemnitee is entitled to be
indemnified under any provision of this Agreement or to receive contribution
pursuant to Section 7 of this Agreement, the burden of proof shall be on the
Company to establish that Indemnitee is not so entitled.
9. No Presumption. For purposes of this Agreement, the termination of
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any claim, action, suit, or proceeding, by judgment, order, settlement (whether
with or without court approval), or conviction, or upon a plea of nolo
contendere, or its equivalent, shall not create a presumption that Indemnitee
did not meet any particular standard of conduct or have any particular belief or
that a court has determined that indemnification is not permitted by applicable
law.
10. Non-exclusivity. The rights of Indemnitee hereunder shall be in
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addition to any other rights Indemnitee may have under the Company's Certificate
of Incorporation or Bylaws, the Delaware General Corporation Law or otherwise.
To the extent that a change in the Delaware General Corporation Law (whether by
statute or judicial decision) permits greater indemnification by agreement than
would be afforded currently under the Company's Certificate of Incorporation or
Bylaws and this Agreement, it is the intent of the parties hereto that
Indemnitee shall enjoy by this Agreement the greater benefits so afforded by
that change.
11. Liability Insurance. Except as otherwise agreed to by the Company and
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Indemnitee in a written agreement, to the extent the Company maintains an
insurance policy or policies providing directors' and officers' liability
insurance, Indemnitee shall be covered by that policy or those policies, in
accordance with its or their terms, to the maximum extent of the coverage
available for any Company director or officer.
12. Period of Limitations. No legal action shall be brought and no cause
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of action shall be asserted by or on behalf of the Company or any affiliate of
the Company against Indemnitee or Indemnitee's spouse, heirs, executors, or
personal or legal representatives after the expiration of three years from the
date of accrual of that cause of action, and any claim or cause of action of the
Company or its affiliate shall be extinguished and deemed released unless
asserted by the timely filing of a legal action within that three-year period;
provided, however, that, if any shorter period of limitations is otherwise
applicable to any such cause of action, the shorter period shall govern.
13. Amendments. No supplement, modification, or amendment of this
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Agreement shall be binding unless executed in writing by both of the parties
hereto. No waiver of any of the
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provisions of this Agreement shall be deemed or shall constitute a waiver of any
other provisions hereof (whether or not similar) nor shall that waiver
constitute a continuing waiver.
14. Subrogation. In the event of payment under this Agreement, the
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Company shall be subrogated to the extent of that payment to all of the rights
of recovery of Indemnitee, who shall execute all papers required and shall do
everything that may be necessary to secure those rights, including the execution
of the documents necessary to enable the Company effectively to bring suit to
enforce those rights.
15. No Duplication of Payments. The Company shall not be liable under
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this Agreement to make any payment in connection with any claim made against
Indemnitee to the extent Indemnitee has otherwise actually received payment
(under any insurance policy, provision of the Company's charter or Bylaws or
otherwise) of the amounts otherwise indemnifiable hereunder.
16. Binding Effect; Merger. This Agreement shall be binding upon and
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inure to the benefit of and be enforceable by the parties hereto and their
respective successors, assigns (including any direct or indirect successor by
purchase, merger, consolidation, or otherwise to all or substantially all of the
business or assets of the Company), spouses, heirs, and personal and legal
representatives. This Agreement shall continue in effect regardless of whether
Indemnitee continues to serve as an officer or director of the Company or
another enterprise at the Company's request.
17. Severability. If any provision of this Agreement is held to be
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illegal, invalid, or unenforceable under present or future laws effective during
the term hereof, that provision shall be fully severable; this Agreement shall
be construed and enforced as if that illegal, invalid, or unenforceable
provision had never comprised a part hereof; and the remaining provisions shall
remain in full force and effect and shall not be affected by the illegal,
invalid, or unenforceable provision or by its severance from this Agreement.
Furthermore, in lieu of that illegal, invalid, or unenforceable provision, there
shall be added automatically as a part of this Agreement a provision as similar
in terms to the illegal, invalid, or unenforceable provision as may be possible
and be legal, valid, and enforceable.
18. Governing Law. This Agreement shall be governed by and construed and
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enforced in accordance with the laws of the State of Texas applicable to
contracts made and to be performed in that state without giving effect to the
principles of conflicts of laws or choice of laws.
19. Construction. The headings contained in this Agreement are for
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reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Pronouns shall be construed to include the
masculine, feminine, neuter, singular and plural as the contest requires.
20. Notices. Whenever this Agreement requires or permits notice to be
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given by one party to the other, such notice must be in writing to be effective
and shall be deemed delivered and received by the party to whom it is sent upon
actual receipt (by any means) of such notice. Receipt of a notice by any officer
of the Company shall be deemed receipt of such notice by the Company.
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21. Counterparts. This Agreement may be executed in any number of
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counterparts, each of which shall be deemed an original, but in making proof
hereof it shall not be necessary to produce or account for more than one such
counterpart.
EXECUTED as of the date first written above.
CLIENTLINK, INC.,
a Delaware corporation
By:
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Xxxxx X. Xxxxxxxx, President
INDEMNITEE:
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