Satisfaction and Release of Security Interest

Name of Debtor: Catuity, Inc., a Delaware corporation (“Debtor” or Catuity”).

Name of Lenders/Secured parties: Gottbetter Capital Master, Ltd., a Cayman
Islands company (“Gottbetter”) and Bridgepointe Master Fund Ltd., a Cayman
Islands Exempted Company (“Bridgepointe”)(each individually, a “Lender” and
collectively, “Lenders”).

For purposes hereof:

“BridgePointe Debt” means a Secured Promissory Note issued by Catuity to
Bridgepointe dated at of November 22, 2006 in the original principal amount of
$688,888, and a new Secured Promissory Note issued by Catuity to Bridgepointe
dated as of July 5, 2007, in the amount of $75,000 (the “BridgePointe $75,000
Note”).

“BridgePointe Net Settlement Amount” means $75,000, plus the interest accrued on
the BridgePointe $75,000 Note through the date that funds are wired to
BridgePointe, plus 38.3% of the Net Convertible Settlement amount.

Gottbetter Debt” means a Secured Promissory Note issued by Catuity to Gottbetter
dated at of November 22, 2006 in the original principal amount of $1,111,112,
and a new Secured Promissory Note issued by Catuity to Gottbetter dated as of
July 5, 2007, in the amount of $75,000 (the “Gottbetter $75,000 Note”).

“Gottbetter Net Settlement Amount” means $75,000, plus the interest accrued on
the Gottbetter $75,000 Note through the date that funds are wired to Gottbetter,
plus 61.7% of the Net Convertible Settlement amount.

“Loyalty Magic Shares” means 4,216,708 fully paid ordinary shares in Loyalty
Magic Pty Ltd (ABN 51 075 350 239), which constitutes all of the issued shares
in the Company.

“Net Convertible Settlement Amount” means AUD $2,650,000, less reasonable
attorneys fees to Arnold Bloch Leibler, Lawyers and Advisers in an amount not to
exceed AUD $20,000 and less $50,000 in expenses to Catuity, less the $75,000
plus accrued interest to be paid to Gottbetter for its $75,000 Note in
accordance herewith and less the $75,000 plus accrued interest to be paid to
BridgePointe for its $75,000 Note in accordance herewith.

For valuable consideration, the parties agree as follows:

I. Subject to receipt of a wire transfer by BridgePointe of the BridgePointe Net
Settlement Amount, BridgePointe hereby certifies that all of Catuity’s debt to
BridgePointe, including but not limited to the BridgePointe Debt, has been
settled, satisfied and paid in full, and the lien therein created and retained
is hereby released.
 

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II. Subject to receipt of a wire transfer by Gottbetter of the Gottbetter Net
Settlement Amount, Gottbetter hereby certifies that all of Catuity’s debt to
Gottbetter, including but not limited to the Gottbetter Debt has been settled,
satisfied and paid in full, and the lien therein created and retained is hereby
released.

III. Specifically, subject to receipt of a wire transfer by BridgePointe of the
BridgePointe Net Settlement Amount and receipt of a wire transfer by Gottbetter
of the Gottbetter Net Settlement Amount, Lenders, jointly and severally, release
Debtor from the following specific security agreement:

Security Agreement dated on or about November 21, 2006 by and between the Debtor
and the Lenders.

and release their security interest in the Collateral described in the Security
Agreement and in following property of the Debtor:

All personal property of the Debtor, wherever located, whether now owned or
hereafter acquired and whether now existing or hereafter coming into existence,
including but not limited to the Loyalty Magic Shares (as defined below).

Lender has not assigned any claims or obligations covered by this Release to any
other party.

Lenders will each sign a Release of U.C.C. Financing Statement in each U.S.
state where such a statement was filed with a public agency.

       
Lender:
Gottbetter Capital Master, Ltd.
   
Lender:
BridgePointe Master Fund Ltd.
        Signed:     Signed:

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        Print name:      Print name:  

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        Title:       Title:  

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        Date:     Date:  

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