Item 6. Indemnification of Directors and
Officers.
As a matter of Cayman Islands company law, a Cayman
Islands company may include a provision in its articles of association permitting indemnification of its directors (and may indemnify
a director in a separate contractual arrangement with a director to the extent permitted by such provision) against all losses and costs
suffered by such director as a consequence of performance of his or her role as such, and exculpating a director from any liability to
the company itself, including in circumstances where such director is in breach of his or her duties (provided that there has been no
willful neglect, willful default, fraud, dishonesty or criminal act on the part of the director). A Cayman Islands company may also purchase
insurance for directors and certain other officers against liability incurred as a result of any negligence, default, breach of duty or
breach of trust in relation to the company. Our articles of association (the “Articles”) allow us to extend indemnities
to directors, as described below.
Article XI of our Articles
provides as follows:
“11.1 To the maximum extent permitted by
law, the Company, by determination of the Board of Directors, shall have the power to indemnify any person who 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, criminal, administrative
or investigative (other than an action by or in the right of the Company) by reason of the fact that he is or was a director, officer,
employee or agent of the Company, or 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 or entity against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he
acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interest of the Company, and with request
to any criminal action or proceeding, had no reasonable cause to believe that his 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 the person did not act in good faith and in a manner which 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 reasonable cause to believe that his conduct
was unlawful.
11.2 To the maximum extent permitted by law, the
Company, by determination of the Board of Directors, shall have the power to indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action or suit by or in the right of the Company to procure a judgment in its
favor by reason of the fact that he is or was a director, officer, employee or agent of the Company, or 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
or entity against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with the defense or settlement of such action or suit 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 except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been finally adjudged to be liable to the company for improper conduct unless
and only to the extent that the court in which such action or suit was brought or any other court having appropriate jurisdiction shall
determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses, judgments, fines and amounts paid in settlement which the court in which
the action or suit was brought or such other court having appropriate jurisdiction shall deem proper.
11.3 To the extent that a director, officer, employee
or agent of the Company has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in this
Article XI, or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
11.4 Any indemnification under this Article XI
(unless ordered by a court) shall be made by the Company only as authorized by contract approved, or by-laws, resolution or other action
adopted or taken, by the Board of Directors or by the shareholders.
11.5 Expenses incurred in defending a civil or
criminal action, suit or proceeding will be paid by the Company in advance of the final disposition of such action, suit or proceeding
upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount if it shall ultimately
be determined that he is not entitled to be indemnified by the Company as authorized by this Article XI.
11.6 The indemnification and advancement of expenses
provided by or granted pursuant to the other paragraphs of this Article XI shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement of expenses may be entitled under any law, by-law, agreement, vote of shareholders or disinterested
directors, or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and
shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such person.
11.7 The Company, by determination of the Board
of Directors, shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee
or agent of the Company, or 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 any liability asserted against him and incurred by him in any such capacity,
or arising out of his status as such, whether or not the Company would have the power to indemnify him against such liability under the
provisions of this Article XI.
11.8 For purpose of this Article XI, reference
to the Company shall include, in addition to the resulting corporation, 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
his Directors, officers, and employees or agents, so that any person who 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, shall stand in the same position under the provisions of this Article
XI with respect to the resulting or surviving corporation as he would have with respect to such constituent corporation if its separate
existence had continued.”
Pursuant to the aforesaid allowances under Article
XI of our Articles, we have entered into indemnification agreements with our executive officers and directors. The amount of indemnification
that we provide to our executive officers under these agreements is not specifically limited.
Any underwriting agreement that we may enter into
in connection with an offering of common shares pursuant to this registration statement may include provisions providing that the underwriters
are obligated, under certain circumstances, to indemnify the directors, certain officers and the controlling persons of Sapiens against
certain liabilities under the Securities Act.
We also maintain directors’ and officers’
liability insurance to insure such persons against certain liabilities, which includes coverage for liability under the federal securities
laws.
Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors and officers pursuant to the foregoing provisions, we have been informed that in
the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.