ClickSoftware Technologies Ltd. Givat Shmuel 54017 Israel
Exhibit
4.12
00
Xxx Xxxxxx Xxxxxx
Givat
Xxxxxx 54017 Israel
July
9, 2007
To
______________
______________
______________
Letter of
Exemption, Indemnification and Insurance
(the
“Letter” or the “Indemnification
Letter”)
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1.
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Exemption from
Liability
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We,
Clicksoftware Technologies Ltd. (the "Company"), hereby exempt
you from all liabilities to the Company and from any damage which has been
caused or that may be caused by you to the Company as a result of a breach
of your duty of care towards the Company, while acting in good faith,
subject to any limitations of applicable law, including those set forth
Sections 258 – 263 of the Companies Law, 1999 (the “Companies Law”), which
inter alia,
prohibit exemption from a breach of your duty of care in the case of a
dividend distribution.
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This
exemption will not apply to counter claims filed against you by the
Company in a lawsuit instigated by you, nor will it apply to liabilities
arising from the acts or omissions enumerated in section 10
below.
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2.
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Indemnification
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2.1.
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We
hereby undertake to indemnify you for any liability or expense, as
detailed below, imposed upon you for acts or omissions that you have made
or may make in the future, by virtue of your service as a director or
officer of the Company, or as a director or officer on behalf of the
Company in a company controlled by the Company or in which the Company has
an interest (such companies being referred to herein as the “Subsidiaries”), as
follows:
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2.1.1.
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financial
liability that you incur or is imposed on you in favor of another person
in accordance with a judgment, including a judgment given in a settlement
or a judgment of an arbitrator approved by the Court, provided that such
liability pertains to one or more of the events set out in the Schedule
hereto (the “Schedule”);
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2.1.2.
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reasonable
litigation expenses, including legal fees that you incur or for which you
are ordered to pay by a court within the framework of proceedings filed
against you by or on behalf of the Company or by a third party, or in a
criminal proceeding in which you are acquitted, or in
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a
criminal proceeding in which you are convicted of a felony but which does
not require a finding of criminal intent; and
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2.1.3.
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reasonable
litigation expenses, including legal fees that you incur due to an
investigation or proceeding conducted against you by an authority
authorized to conduct such investigation or proceeding and which ends
without the filing of an indictment against you and without your being
subject to a financial obligation as a substitute for a criminal
proceeding, or that ends without the filing of an indictment against you
but with the imposition of financial obligation as a substitute for a
criminal proceeding relating to an offense which does not require criminal
intent, within the meaning of the relevant terms, and in accordance with,
Section 260 to the Companies Law.
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2.2.
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The
maximum indemnification amount that the Company may pay to all of its
directors and officers in the aggregate pursuant to all the letters of
indemnification issued and that may be issued by the Company shall be US$
20 million (the “Maximum
Indemnification Amount”).
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2.3.
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If,
and to the extent that, the total of all indemnification amounts which the
Company is called upon to pay to directors and officers exceeds the
Maximum Indemnification Amount, the Maximum Indemnification Amount shall
be divided among the directors and officers entitled to indemnification in
a manner whereby the amount of indemnification paid to each of the
directors and officers will be calculated according to the ratio between
the amount of the indemnifiable liability of such directors and officers
and the aggregate amount of indemnifiable liability of all directors and
officers, in respect of such event or events.
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2.4.
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The
provisions of Section 2.2 above to the contrary notwithstanding, no
payment hereunder shall be made to you in connection with an indemnifiable
event for which payment is actually paid to you or on your behalf under a
valid and collectible insurance policy or under a valid and enforceable
indemnity clause or agreement, to the extent of the amount of such
payment.
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2.5.
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As
part of the aforementioned undertaking, the Company will make available to
you any security or guarantee that you may be required to post in
accordance with an interim decision given by a court or an arbitrator,
including for the purpose of substituting liens imposed on your
assets.
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2.6.
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The
Company will be entitled to any amount collected from a third party,
including any payments made under an insurance policy, in connection with
liabilities indemnified hereunder. You shall execute all papers
required and shall do everything that may be necessary to secure the
Company’s rights of subrogation, including the execution of such documents
necessary to enable the Company effectively to bring suit to enforce such
rights.
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2
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2.7.
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Upon
the occurrence of an event that by its virtue you are likely to be
entitled to indemnification in accordance with this Section 2, the Company
shall place at your disposal, from time to time, the funds required to
cover the expenditures and payments that are connected to handling the
legal proceeding, in a manner that you shall not be required to pay for,
or personally finance the legal expenses, subject to the conditions and
instructions in this Indemnification Letter.
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2.8.
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In
order to avoid any doubt, upon the occurrence of an event that may entitle
you to indemnification, you shall be entitled to appoint an advocate of
your choice, with the exception of an advocate whom the Company deems
unacceptable for reasonable cause, provided that you shall immediately
inform the Company of the identity of the advocate, when it becomes
necessary to appoint such advocate. In the event you do not inform the
Company regarding your choice of advocate in compliance with the above
mentioned, the Company shall have discretion to appoint an advocate on
your behalf.
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3.
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Limitations on
Obligation to Indemnify
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The
obligation to indemnify in accordance with this Letter is subject to the
following:
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3.1.
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You
shall inform the Company of every legal proceeding that shall be brought
against you in connection with any event that may entitle you to
indemnification, and of every warning made to you in writing, pertaining
to legal proceedings that may be commenced against you, and this shall be
done in a timely manner, immediately after you shall first be aware of
such, and you shall provide the Company or to whom the Company shall
instruct you to, all documents in connection with such
proceedings.
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3.2.
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Notwithstanding
Section 2.8 above, the Company is entitled to take upon itself the care of
your defense in the legal proceeding and/or to give the above care to any
prominent advocate that the Company shall select for this purpose (except
an advocate that shall not be reasonably acceptable to you) subject to the
fulfillment of all of the following conditions: (a) The Company
shall inform the holder of this Indemnification Letter, within 45 days
from the time of receiving the notice as said in Section 3.1 above (or
within a shorter period of time – if the matter requires filing a
statement of defense or a response to a proceeding), that it shall
indemnify the holder of the Indemnification Letter according to this
Letter; and (b) The legal proceeding against the holder of the
Indemnification Letter shall solely entail a claim for monetary
damages. The Company and/or the aforementioned advocate shall
be entitled to act with their exclusive discretion and to bring the
proceeding to a close. The appointed advocate shall act and
shall owe its duty of loyalty to the Company and to you. In the
event that a conflict of interest shall arise between you and the Company,
you shall inform the Company of such conflict, you shall be entitled to
appoint an advocate on your behalf, and the provisions of this
Indemnification Letter shall apply to expenses you may incur as a result
of such appointment. In the event that the Company decides to
settle a monetary obligation or to decide a monetary obligation by
arbitration, or
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3
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by
mediation or by settlement, the Company shall be entitled to do so long as
the lawsuit or the threat of a lawsuit against you shall be fully
withdrawn. Following the request of the Company, you shall sign any
document that shall empower the Company and/or an advocate as mentioned
above, to act on your name with regard to your defense in the
above-mentioned proceedings and to represent you in all matters pertaining
to these proceedings, as set forth above.
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3.3.
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You
shall cooperate with the Company and/or with any advocates as set forth
above in every reasonable manner that shall be required from you by any of
them in connection with the handling of such legal proceedings, all in
accordance with Section 3.2 above. You shall not bear any additional legal
expenses due to such cooperation.
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3.4.
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Subject
to the provisions of this Indemnification Letter, whether or not the
Company shall act in accordance with section 3.2 above, the Company shall
cover litigation expenses in a manner that you shall not be required to
pay or finance such litigation expenses yourself.
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3.5.
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Your
indemnification in connection with the legal proceeding of any actions
against you, as set forth in this Letter, will not be enforceable in
connection with amounts that you shall be required to pay as a result of a
settlement or arbitration, unless the Company agrees, in advance and in
writing, to the settlement, or to the arbitration award.
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3.6.
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The
Company shall not be required to pay, pursuant to this Letter, monies that
were actually paid in connection with an indemnifiable event to you, or on
your behalf, from proceeds of an insurance policy or from proceeds of an
obligation to any indemnification that was made by any other person other
than the Company, to the extent of the amount of such payment or
proceeds.
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3.7.
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In
addition, in the event of the indemnification hereunder is being paid in
respect of your serving as an director or officer in any Subsidiary, such
indemnification will only be paid after all your rights to insurance and
indemnification from such Subsidiary will have been exhausted, if and to
the extent they exist. In order to avoid any doubt, it shall be
clarified that the indemnification amount pursuant to this Letter shall be
independent of (and in addition to) the amount that shall be paid (if
paid) pursuant to an insurance policy procured by any Subsidiary and/or
any other indemnification made by any Subsidiary.
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3.8.
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Upon
your request to an execution of a payment in connection with any event
pursuant to this Letter, the Company shall take all necessary steps
according to any applicable law to pay such payment and will do all that
is required to obtain any approval that is required. If any approval is
required for the above payment and that payment shall not be approved for
any reason, such payment, or any part of it, that will not be approved, as
said above, shall be subject to the approval of a court and the Company
shall take all necessary steps to obtain the court’s
approval.
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4.
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The
obligations of the Company according to this Letter shall remain valid
even if you have ceased to serve as a director or officer of the Company,
provided that acts or omissions for which you are given a commitment of
indemnification were performed or shall be performed during your service
as a director or officer of the Company.
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5.
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In
the event the Company pays to you, or in your place, any amount pertaining
to this Letter in connection with a legal proceeding as stated above, and
afterwards it shall be determined that you are not entitled to any
indemnification from the Company for any reason whatsoever, the sums paid
by the Company shall be considered a loan that was granted to you by the
Company, and shall be linked to the Consumer Price Index and accrue
interest in accordance with the Income Tax Regulations (Determination of
the interest rate), 1985, as amended from time to time. You will be
required to repay these sums to the Company when requested to do so in
writing by the Company and in accordance with a payment schedule that the
Company shall determine.
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6.
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The
terms contained in this Letter will be construed in accordance with the
Companies Law, and in the absence of any definition in the Companies Law,
pursuant to the Securities Law, 5728-1968.
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7.
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The
obligations of the Company according to this Indemnification Letter shall
be interpreted broadly and in a manner that shall facilitate its
execution, to the extent permitted by law, and for the purposes for which
it was intended. In the event of a conflict between any
provision of this Letter and any provision of the law, said provision of
the law shall supersede the specific provision in this Letter, but shall
not limit or diminish the validity of the remaining provisions of this
Letter.
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8.
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The
indemnification under this Letter will enter into effect upon your signing
a copy of the same in the appropriate place, and the delivery of such
signed copy to the Company. This Letter shall supersede and
replace any and all prior indemnification undertakings made to you by the
Company.
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9.
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The
Company may, at its sole discretion and at any time, revoke its
undertaking to indemnify you hereunder, or reduce the Maximum
Indemnification Amount, or limit the events to which it applies, either in
regard to all the directors and officers or to some of them, but only to
the extent it relates to events that will apply after the date of such
change, provided that prior notice has been given to the director or
officer of the Company’s intention to do so, in writing at least 60 days
before the date on which such decision will enter into effect. For the
avoidance of any doubt, it is hereby clarified that any such decision will
not have retroactive effect of any kind whatsoever and the Indemnification
Letter, prior to such change or revocation, as the case may be, will
continue to apply and be in full force and effect for all purposes in
relation to any event that has preceded such change or revocation, even if
the proceeding in respect thereof has been filed against the director or
officer after the change or revocation of the Indemnification Letter. In
all other cases, this Indemnification Letter may not be changed, unless
the Company and yourself have signed it
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10.
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You
will not be indemnified for any of the following:
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10.1.
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a
breach of your duty of loyalty, except for a breach of your duty of
loyalty while acting in good faith and having reasonable grounds to assume
that such act or omission would be in the best interests of the
Company;
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10.2.
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A willful breach of the
duty of care or reckless disregard for the circumstances or to the
consequences of a breach of the duty of care towards the Company, unless
committed through negligence only;
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10.3.
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An
act or omissions done with intent to make unlawful personal profit;
or
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10.4.
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A
fine or forfeit imposed upon you.
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11.
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The
Company shall at all times maintain liability insurance applicable to
directors and officers, with a reputable insurer in an amount and
on terms which are customary for a company comparable to the Company, but
in an amount of not less than US$ 10,000,000 (ten million US Dollars), and
you shall be covered by such
policy during the term of and following your service as an officer
or director of the Company.
In addition, in the event of the acquisition of the Company by a
third party or in the event of the cessation of the activities of the
Company, the Company shall procure and maintain a “run-off” policy, which
will extend directors and officers insurance coverage to you for a
reasonable period after the date of such acquisition or the cessation of
the activities of the Company.
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12.
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This
Letter does not constitute a contract for the benefit of any third party
and is not assignable. For the avoidance of any doubt, in the event of
death, this Letter will apply to you and your estate.
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13.
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No
waiver, delay, forbearance to act or extension granted by the Company or
by you will be construed in any circumstances as a waiver of the rights
hereunder or by law, and will not prevent any such party from taking all
legal and other steps as will be required in order to enforce such
rights.
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14.
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The
foregoing does not derogate from the Company’s right to indemnify you
retroactively in accordance with the articles of association of the
Company and subject to any applicable law.
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15.
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The
law of the State of Israel shall govern this Letter and all issues related
thereto, without giving effect to any conflicts of law
principles.
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6
In
witness whereof, the Company hereby executes this Indemnification Letter by its
authorized signatories.
By:__________________________
Name:
Title:
I
hereby confirm receiving this Letter and consent to all its terms.
____________
[Officer/Director]
Date:
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7
SCHEDULE
Subject
to any provision of the law, the events are as follows:
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1.
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Any
issuance of securities, including without limitation, a public offering
pursuant to a prospectus, a private offering, the issuance of bonus shares
or any offer of securities in any other manner;
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2.
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Conducting
tender offers and anything related thereto;
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3.
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A
"Transaction" within the meaning of Section 1 of the Companies Law1, including without limitation
negotiations for entering into a transaction, the transfer, sale or
purchase or charge of assets or liabilities, including securities, or the
grant or receipt of a right to any of the foregoing, receiving credit and
the grant of collateral and any act directly or indirectly involved in
such "Transaction";
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4.
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Report
or notice filed in accordance with any applicable law, including the
Companies Law and/or the Israeli Securities Law of 1968, and/or the
Securities Exchange Act of 1933 and/or the Securities Exchange Act of 1934
including regulations promulgated under any of these laws, or in
accordance with rules or instructions prevailing on an Israeli stock
exchange or on a Nasdaq stock market on which the Company's securities are
traded from time to time and/or the Tel Aviv Stock Exchange and/or a stock
exchange outside of Israel, or any law of another country regulating
similar matters and/or the omission to act accordingly;
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5.
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Any
resolution with respect to distribution, as defined in the Companies
Law;
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6.
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Amendment
to the Company’s structure or its reorganization or any resolution with
respect to such matters, including without limitation, a merger, split,
change in the Company’s capital structure, incorporation of subsidiaries,
dissolution or sale thereof, issuance or distribution;
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7.
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Taking
part in tenders;
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8.
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The
making of any statement, including a bona fide statement or opinion made
by an officer or director of the Company in such capacity, including
during meetings of the Board of Directors or any committee
thereof;
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9.
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An
act in contradiction to the articles or memorandum of association of the
Company;
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10.
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Any
action or decision in relation to employer-employee or consultant
relations, including the negotiation for, signing and performance of
employment or consultancy agreements, other employees’ benefits (including
allocation of securities to employees) and harassment suits;
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__________________________
| 1 | Article 1 of the Companies Law defines “Transaction” as a contract or engagement or a unilateral decision of the company regarding a grant of a right or another benefit.” |
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11.
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Any
action or decision in relation to work safety and/or working
conditions;
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12.
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Negotiation
for, signing and performance of an insurance policy;
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13.
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Formulating
working programs, including pricing, marketing, distribution, directives
to employees, customers and suppliers and collaborations with
competitors;
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14.
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Decisions
and/or acts pertaining to the environment, including dangerous
substances;
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15.
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Decisions
and/or acts pertaining to the Consumer Protection Law, 5741-1981, and/or
orders and/or Regulations thereunder;
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16.
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Negotiating,
making and performing of contracts of any kind and type with suppliers,
customers, distributors, agents, franchisees and the like of the products
that are marketed and/or sold by, or by those serving, the
Company;
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17.
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Negotiating,
the making and performing agreements with manpower contractors, service
contractors, building contractors, renovations contractors,
etc;
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18.
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Reporting
and/or filing of applications to the state authorities and other
authorities;
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19.
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The
borrowing or other receipt of funds or other financing transaction or
arrangement of the Company, or any such proposed
action;
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20.
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A
merger, sale, acquisition or other business combination or similar
transaction of the Company or affiliates;
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21.
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Any
action with respect to the intellectual property of the Company or of any
other person, and its protection;
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22.
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Any
action related to an obligation of the Company to obtain regulatory or
other governmental licenses, permits or authorizations in any
jurisdiction;
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23.
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Approval
of corporate actions, including the approval of the acts of the Company’s
management, their guidance and their supervision; and
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24.
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Any
of the foregoing events relating to the capacity of such officer or
director as an officer or director of a corporation controlled (directly
or indirectly) by the Company or otherwise affiliated
therewith.
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