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EXHIBIT 10.23
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("Agreement") is made as of the _______
day of ____________ 19___, by and between Catuity Inc., a Delaware corporation
(the "Company"), and ______________________, a director and/or officer of the
Company (the "Indemnitee").
RECITALS
A. The Indemnitee is presently serving as a director and/or officer of the
Company and the Company desires the Indemnitee to continue in such
capacity. The Indemnitee is willing, subject to certain conditions
including, without limitation, the execution and performance of this
Agreement by the Company, to continue in that capacity.
B. In addition to the indemnification to which the Indemnitee is entitled
under the certificate of incorporation (the "certificate") of the
Company, the Company has obtained (or intends to obtain) at its sole
expense insurance protecting its directors and officers including the
Indemnitee against certain losses arising out of actual or threatened
actions, suits or proceedings to which such persons may be made or
threatened to be made parties. However, as a result of circumstances
having no relation to, and beyond the control of, the Company and the
Indemnitee, there can be no assurance of the continuation or renewal of
that insurance.
Accordingly, and in order to induce the Indemnitee to continue to serve
in his present capacity, the Company and Indemnitee agree as follows:
1. Continued Service.
The Indemnitee will continue to serve as a director and/or officer of
the Company so long as he is duly elected and qualified in accordance
with the bylaws of the Company (the "bylaws") or until he resigns in
writing in accordance with applicable law.
2. Initial Indemnity.
(a) Except with respect to an action, suit or proceeding by or in the
name of the Company as provided in Section 2(b) below, the Company shall
indemnify the Indemnitee when he was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, administrative, investigative or criminal, by
reason of the fact that he is or was or had agreed to become a director
or officer of the Company, or is or was serving or had agreed to serve
at the request of the Company as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other
enterprise, against costs, charges and expenses (including attorneys'
and others' fees and expenses and reasonable time-based fees of the
Indemnitee as determined by a court of competent jurisdiction or, to the
extent permitted by law, a majority of disinterested directors
(collectively "Expenses")), damages, judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection
therewith and any appeal therefrom if he acted in good faith and in a
manner he 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 no reasonable cause to believe his conduct was unlawful.
The termination of any action, suit or
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proceeding by judgment, order, settlement, conviction or upon a plea of
nolo contendre or its equivalent shall not, of itself, create a
presumption that the Indemnitee did not satisfy the foregoing standard
of conduct to the extent applicable thereto.
(b) With respect to an action, suit or proceeding by or in the name of
the Company, the Company shall indemnify the Indemnitee when he was or
is a party or is threatened to be made a party to any such threatened,
pending or completed action, suit or proceeding by reason of the fact
that he is or was or had agreed to become a director or officer of the
Company, or is or was serving or had agreed to serve at the request of
the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise
against costs, charges and Expenses actually and reasonably incurred by
him in connection therewith and any appeal therefrom if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Company. However, no indemnification shall be
made in respect of any claim, issue or matter as to which the Indemnitee
shall have been adjudged to be liable to the Company unless (and only to
the extent that) the Delaware Court of Chancery or the court in which
such action, suit or proceeding was brought shall determine upon
application that, despite the adjudication of liability but in view of
all the circumstances of the case, the Indemnitee is fairly and
reasonably entitled to indemnity for such costs, charges and Expenses
which the Delaware Court of Chancery or such other court shall deem
proper.
(c) To the extent that the Indemnitee has been successful on the merits
or otherwise, including, without limitation, the dismissal of an action
without prejudice, in defense of any action, suit or proceeding referred
to in Sections 2(a) or 2(b) hereof or in defense of any claim, issue or
matter therein, he shall be indemnified against costs, charges and
Expenses actually and reasonably incurred by him in connection
therewith.
(d) Any indemnification under Sections 2(a) or 2(b) (unless ordered by a
court) shall be made by the Company only as authorized in the specific
case upon a determination in accordance with Section 4 hereof or any
applicable provision of the certificate, bylaws, other agreement,
resolution or otherwise. Such determination shall be made (i) by the
Board of Directors of the Company (the "Board"), by a majority vote of a
quorum consisting of directors who were not parties to such action, suit
or proceeding or (ii) if such a quorum of disinterested directors is not
available or such quorum of disinterested directors so directs, by
independent legal counsel (designated in the manner provided below in
this subsection (d)) in a written opinion or (iii) by the stockholders
of the Company (the "Stockholders"). Independent legal counsel shall be
designated by vote of a majority of the disinterested directors;
provided, however, that if the Board is unable or fails to so designate,
such designation shall be made by the Indemnitee. Independent legal
counsel shall not be any person or firm who, under the applicable
standards of professional conduct then prevailing, would have a conflict
of interest in representing either the Company or the Indemnitee in an
action to determine the Indemnitee's rights under this Agreement. The
Company agrees to pay the reasonable fees and expenses of such
independent legal counsel and to indemnify fully such counsel against
costs, charges and expenses actually and reasonably incurred by such
counsel in connection with this Agreement or the opinion of such counsel
pursuant hereto.
(e) All costs, charges and Expenses for which indemnification is
available under Sections 2(a) and 2(b) shall be paid by the Company in
advance of the final disposition of the action, suit or proceeding
giving rise to the indemnification. Such payment shall be made
immediately in the manner described by Section 4(b) hereof.
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(f) The Company shall not adopt any amendment to the certificate or
bylaws the effect of which would be to deny, diminish or encumber the
Indemnitee's rights to indemnity pursuant to the certificate, bylaws,
the General Corporation Law of the State of Delaware (the "DGCL"), or
any other applicable law as applied to any act or failure to act
occurring in whole or in part prior to the date (the "Effective Date")
upon which the amendment was approved by the Board or the Stockholders,
as the case may be. In the event that the Company shall adopt any
amendment to the certificate or bylaws the effect of which is to so
deny, diminish or encumber the Indemnitee's rights to indemnity, such
amendment shall apply only to acts or failures to act occurring entirely
after the Effective Date thereof unless the Indemnitee shall have
expressly agreed otherwise in writing or voted in favor of such adoption
as a director or holder of record of the Company's voting stock.
3. Additional Indemnification.
(a) Pursuant to Section 145(f) of the DGCL, without limiting any right
which the Indemnitee may have pursuant to Section 2 hereof, the
certificate, the bylaws, the DGCL, any policy of insurance or otherwise,
but subject to the limitations on the maximum permissible indemnity
which may exist under applicable law at the time of any request for
indemnity hereunder determined as contemplated by Section 3(a) hereof,
the Company shall indemnify the Indemnitee against any amount which he
is or becomes legally obligated to pay relating to or arising out of any
claim made against him because of any act, failure to act or neglect or
breach of duty, including any actual or alleged error, misstatement or
misleading statement, which he commits, suffers, permits or acquiesces
in while acting in his capacity as a director or officer of the Company,
or, at the request of the Company, as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise. The payments which the Company is obligated to make pursuant
to this Section 3 shall include damages, judgments, fines, settlements
and charges, costs and Expenses, provided, however, that the Company
shall not be obligated under this Section 3(a) to make any payment in
connection with any claim against the Indemnitee:
(i) to the extent of any fine or similar governmental imposition
which the Company is prohibited by applicable law from paying
which results in a final, non-appealable order; or
(ii) to the extent based upon or attributable to the Indemnitee
gaining a personal profit to which he was not legally entitled,
including without limitation profits made from the purchase and
sale by the Indemnitee of equity securities of the Company which
are recoverable by the Company pursuant to Section 16(b) of the
Securities Exchange Act of 1934, as amended, and profits arising
from transactions in publicly traded securities of the Company
which were effected by the Indemnitee in violation of Section
10(b) of the Securities Exchange Act of 1934, as amended,
including Rule 10b-5 promulgated thereunder.
The determination of whether the Indemnitee shall be entitled to
indemnification under this Section 3(a) may be, but shall not be
required to, be made in accordance with Section 4(a) hereof. If that
determination is so made, it shall be binding upon the Company and the
Indemnitee for all purposes.
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(b) To the extent that the Indemnitee has been successful on the merits
or otherwise, including, without limitation, the dismissal of an action
without prejudice, in defense of any action, suit or proceeding referred
to in Section 3(a) or in defense of any claim, issue or matter therein,
he shall be indemnified against costs, charges and Expenses actually and
reasonably incurred by him in connection therewith.
(c) All costs, charges and Expenses for which indemnification is
available under Section 3(a) shall be paid by the Company in advance of
the final disposition of the action, suit or proceeding giving rise to
the indemnification. Such payment shall be made immediately in the
manner described by Section 4(b).
4. Certain Procedures Relating to Indemnification and Advancement of
Expenses.
(a) Except as otherwise permitted or required by the DGCL, for purposes
of pursuing his rights to indemnification under Sections 2(a), 2(b) or
3(a) hereof, as the case may be, the Indemnitee may, but shall not be
required to, (i) submit to the Board a sworn statement of request for
indemnification substantially in the form of Exhibit 1 attached hereto
and made a part hereof (the "Indemnification Statement") averring that
he is entitled to indemnification hereunder and (ii) present to the
Company reasonable evidence of all expenses for which payment is
requested. Submission of an Indemnification Statement to the Board shall
create a presumption that the Indemnitee is innocent of any wrongdoing
and is entitled to indemnification under Sections 2(a), 2(b) or 3(a)
hereof, as the case may be, and the Board shall be deemed to have
determined that the Indemnitee is entitled to such indemnification
unless, within 30 calendar days after submission of the Indemnification
Statement, the Board shall consult with the underwriter of its
directors' and officers' liability insurance and determine by vote of a
majority of the directors at a meeting at which a quorum is present,
based upon clear and convincing evidence (sufficient to rebut the
foregoing presumption) and the Indemnitee shall have received notice
within such period in writing of such determination that the Indemnitee
is not so entitled to indemnification, which notice shall disclose with
particularity the evidence in support of the Board's determination. The
foregoing notice shall be sworn to by all persons who participated in
the determination and voted to deny indemnification. The provisions of
this Section 4(a) are intended to be procedural only and shall not
affect the right of the Indemnitee to indemnification under this
Agreement and any determination by the Board that the Indemnitee is not
entitled to indemnification and any failure to make the payments
requested in the Indemnification Statement shall be subject to judicial
review as provided in Section 7 hereof.
(b) For purposes of determining whether to authorize advancement of
expenses pursuant to Section 2(e) hereof, the Indemnitee shall submit to
the Board a sworn statement of request for advancement of expenses
substantially in the form of Exhibit 2 attached hereto and made a part
hereof (the "Undertaking"), averring that (i) he has reasonably incurred
or will reasonably incur actual expenses in defending an actual or
threatened civil or criminal action, suit, proceeding or claim and (ii)
he undertakes to repay such amount if it shall ultimately be determined
that he is not entitled to be indemnified by the Company under this
Agreement or otherwise. For purposes of requesting advancement of
expenses pursuant to Section 3(b) hereof, the Indemnitee may submit an
Undertaking or such other form of request as he determines to be
appropriate (an "Expense Request"). Upon receipt of an Undertaking or
Expense Request, as the case may be, the Board shall within 10 calendar
days authorize immediate payment of the expenses stated in the
Undertaking or Expense Request, as the case may be, whereupon such
payments shall immediately be made by the Company. No security
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shall be required in connection with any Undertaking or Expense Request
and any Undertaking or Expense Request shall be accepted without
reference to the Indemnitee's ability to make repayment.
5. Subrogation; Duplication of Payments.
(a) In the event of payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of
recovery (including under any directors' and officers' liability
insurance) of the Indemnitee, who shall execute all papers required and
shall do everything that may be necessary to secure such rights,
including the execution of such documents necessary to enable the
Company effectively to bring suit to enforce such rights. This provision
shall in no way entitle the Company to substitute its counsel for any
independent legal counsel appointed by the Indemnitee pursuant to
Section 2(d) or otherwise manage litigation to which the Indemnitee is a
party. If the Company indemnifies the Indemnitee in connection with any
action, suit or proceeding in which the Company and the Indemnitee do
not have adverse interests, then the Company and its counsel shall
cooperate with the Indemnitee and his counsel. In all instances where
the Company and the Indemnitee have adverse interests, the Indemnitee
may nonetheless inspect the books and records of the Company to the
extent permitted by law.
(b) The Company shall not be liable under this Agreement to make any
payment in connection with any claim made against the Indemnitee to the
extent that the Indemnitee has actually received payment (under any
insurance policy, the certificate, the bylaws or otherwise) of the
amounts otherwise payable hereunder.
6. Enforcement.
(a) If a claim for indemnification made to the Company pursuant to
Section 4 hereof is not paid in full by the Company within 30 calendar
days after a written claim has been received by the Company, the
Indemnitee may at any time thereafter bring suit against the Company to
recover the unpaid amount of the claim.
(b) In any action brought under Section 5(a) hereof, it shall be a
defense to a claim for indemnification pursuant to Sections 2(a) or 2(b)
hereof (other than an action brought to enforce a claim for expenses
incurred in defending any proceeding in advance of its final disposition
where the Undertaking, if any is required, has been tendered to the
Company) that the Indemnitee has not met the standards of conduct which
make it permissible under the DGCL for the Company to indemnify the
Indemnitee for the amount claimed, but the burden of proving such
defense shall be on the Company. Neither the failure of the Company
(including the Board, independent legal counsel or the Stockholders) to
have made a determination prior to commencement of such action that
indemnification of the Indemnitee is proper in the circumstances because
he has met the applicable standard of conduct set forth in the DGCL, nor
an actual determination by the Company (including the Board, independent
legal counsel or the Stockholders) that the Indemnitee has not met such
applicable standard of conduct, shall be a defense to the action or
create a presumption that the Indemnitee has not met the applicable
standard of conduct.
(c) It is the intent of the Company that the Indemnitee not be required
to incur the expenses associated with the enforcement of his rights
under this Agreement by litigation or other legal action because the
cost and expense thereof would substantially detract from the
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benefits intended to be extended to the Indemnitee hereunder.
Accordingly, if it should appear to the Indemnitee that the Company has
failed to comply with any of its obligations under this Agreement or in
the event that the Company or any other person takes any action to
declare this Agreement void or unenforceable, or institutes any action,
suit or proceeding designed (or having the effect of being designed) to
deny, or to recover from, the Indemnitee the benefits intended to be
provided to the Indemnitee hereunder, the Company irrevocably authorizes
the Indemnitee from time to time to retain counsel of his choice, at the
expense of the Company as hereafter provided, to represent the
Indemnitee in connection with the initiation or defense of any
litigation or other legal action, whether by or against the Company or
any director, officer, stockholder or other person affiliated with the
Company, in any jurisdiction. Regardless of the outcome thereof, the
Company shall pay and be solely responsible for any and all costs,
charges and expenses, including without limitation attorneys' and
others' fees and expenses, reasonably incurred by the Indemnitee (i) as
a result of the Company's failure to perform this Agreement or any
provision thereof or (ii) as a result of the Company or any person
contesting the validity or enforceability of this Agreement or any
provision thereof as aforesaid.
7. Merger or Consolidation.
In the event that the Company shall be a constituent corporation in a
consolidation, merger or other reorganization, the Company, if it shall
not be the surviving, resulting or other corporation therein, shall
require as a condition thereto the surviving, resulting or acquiring
corporation to agree to indemnify the Indemnitee to the full extent
provided in this Agreement. Whether or not the Company is the resulting,
surviving or acquiring corporation in any such transaction, the
Indemnitee shall also stand in the same position under this Agreement
with respect to the resulting, surviving or acquiring corporation as he
would have with respect to the Company if its separate existence had
continued.
8. Non-exclusivity and Severability
(a) The right to indemnification provided by this Agreement shall not be
exclusive of any other rights to which the Indemnitee may be entitled
under the certificate, bylaws, the DGCL, any other statute, insurance
policy, agreement, vote of Stockholders or of directors or otherwise,
both as to actions in his official capacity and as to actions in another
capacity while holding such office, and shall continue after the
Indemnitee has ceased to be a director, officer, employee or agent and
shall inure to the benefit of his heirs, executors and administrators.
(b) If any provision of this Agreement or the application of any
provision hereof to any person or circumstances is held invalid,
unenforceable or otherwise illegal, the remainder of this Agreement and
the application of such provision to other persons or circumstances
shall not be affected, and the provision so held to be invalid,
unenforceable or otherwise illegal shall be reformed to the extent (and
only to the extent) necessary to make it enforceable, valid and legal.
9. Governing Law.
This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware, without giving effect to the principles
of conflict of laws thereof.
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10. Modification; Survival.
This Agreement contains the entire agreement of the parties relating to
the subject matter hereof. This Agreement may be modified only by an
instrument in writing signed by both parties hereto. The provisions of
this Agreement shall survive the death, disability, or Incapacity of the
Indemnitee or the termination of the Indemnitee's service as a director
or officer of the Company and shall inure to the benefit of the
Indemnitee's heirs, executors and administrators.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the date first above written.
CATUITY INC.
By:
------------------------------------
Name:
Title:
INDEMNITEE
------------------------------------
Name:
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EXHIBIT 1
INDEMNIFICATION STATEMENT
STATE OF _______________________ )
) SS
COUNTY OF ______________________ )
I, _______________________________, being first duly sworn, do depose
and say as follows:
1. This Indemnification Statement is submitted pursuant to the
Indemnification Agreement, dated as of ______________________, 19______,
between Catuity Inc. (the "Company"), a Delaware corporation, and the
undersigned.
2. I am requesting indemnification against charges, costs, expenses
(including attorneys' and others' fees and expenses), judgments, fines
and amounts paid in settlement, all of which (collectively,
"Liabilities") have been or will be incurred by me in connection with an
actual or threatened action, suit, proceeding or claim to which I am a
party or am threatened to be made a party.
3. With respect to all matters related to any such action, suit,
proceeding or claim, I am entitled to be indemnified as herein
contemplated pursuant to the aforesaid Indemnification Agreement.
4. Without limiting any other rights which I have or may have, I am
requesting indemnification against Liabilities which have or may arise
out of _________________________________________________________________
________________________________________________________________________
________________________________________________________________________
Subscribed and sworn to before me, a Notary Public in and for said
County and State, this _________ day of ____________________, 19_____.
[seal]
My commission expires the ___ day of_________________, 19_____.
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EXHIBIT 2
UNDERTAKING
STATE OF ________________________ )
) SS
COUNTY OF _______________________ )
I, _______________________________, being first duly sworn do depose and
say as follows:
1. This Undertaking is submitted pursuant to the Indemnification
Agreement, dated as of _____________________, 19___, between Catuity
Inc. (the "Company"), a Delaware corporation, and the undersigned.
2. I am requesting advancement of certain costs, charges and expenses
which I have incurred or will incur in defending an actual or pending
civil or criminal action, suit, proceeding or claim.
3. I hereby undertake to repay (i) the entire advancement if it shall
ultimately be determined that I am not entitled to be indemnified by the
Company under the Indemnification Agreement or the Company's certificate
of incorporation or bylaws or (ii) any part of the advancement to the
extent that it exceeds the amount that I am entitled to be indemnified
by the Company under the Indemnification Agreement or the Company's
certificate of incorporation or bylaws.
4. The costs, charges and Expenses (as defined in the Indemnification
Agreement) for which advancement is requested are, in general, related
to _____________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
Subscribed and sworn to before me, a Notary Public in and for said
County and State, this _________ day of ____________________, 19_____.
[seal]
My commission expires the ___ day of_________________, 19_____.