INDEMNITY AGREEMENT
THIS AGREEMENT made as of the 12th day of September, 2005.
BETWEEN:
GammaCan International, Inc., a corporation incorporated under the
State of Delaware and having a business address at 00 Xxx Xxxxxx
Xxxxxx, Xxxxx Xxxxxx 00000, Xxxxxx
(the "Indemnitor")
AND:
Chaime Orlev, CFO of Indemnitor and of its Israeli subsidiary,
GammaCan Ltd. (the "Subsidiary"), of 00 XxXxxxxxxx Xx, Xxxxxx Xxx,
Xxxxxx
(the "Indemnitee")
WHEREAS:
A. The Indemnitee has been requested to accept and hold a position as an officer
of the Indemnitor and the Subsidiary; and
B. In consideration of $1.00 and other good and valuable consideration received,
the Indemnitor has agreed to indemnify the Indemnitee for all liability, losses,
damages, costs, charges, expenses, fines and penalties which have been or may be
sustained by the Indemnitee as a result of his acting as an officer of the
Indemnitor.
IN WITNESS THEREFORE that in consideration of the premises and subject to the
conditions hereunder and in consideration of the sum of ONE DOLLAR ($1.00) now
paid by the Indemnitee to the Indemnitor and other good and valuable
consideration (the receipt and sufficiency of which is hereby acknowledged by
the Indemnitor), the parties agree as follows:
1. General Indemnity. Subject to section 4 hereof, the Indemnitor agrees to
indemnify and save the Indemnitee harmless from and against:
(a) any and all costs, charges, expenses, fees, damages or liabilities,
regardless of when they arose and howsoever arising and whether arising in
law or in equity or under statute, regulation or governmental ordinance of
any jurisdiction, common law or otherwise (including legal or other
professional fees), and whether incurred alone or jointly with others,
which the Indemnitee may suffer, sustain, incur or be required to pay
arising out of, in connection with or incidental to any action, suit,
demand, proceeding, investigation or claim which may be brought,
commenced, made, prosecuted or threatened against the Indemnitee (any of
the same hereinafter being referred to as a "Claim") for or in respect of
any act, deed, matter or thing done, made, permitted or in respect of any
omission to do, make or permit any act, deed, matter or thing whatsoever
required or desirable to do, make or permit, by the Indemnitee arising out
of, in connection with or incidental to the management, operations,
activities or affairs of the Indemnitor or the exercise by the Indemnitee
of his powers or the performance of his duties as an officer of the
Indemnitor, whether sustained or incurred by reason of his negligence,
default, breach of duty, failure to exercise due diligence or otherwise in
relation to the Indemnitor;
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(b) any and all costs, charges, expenses, fees, damages or liabilities
which the Indemnitee may suffer, sustain or incur or be required to pay in
connection with investigating, initiating, defending, preparing for,
providing evidence in, instructing and receiving the advice of his own or
other counsel, or any amount paid to satisfy any judgment made, fine
imposed, damages or costs or any amount paid or liability incurred by the
Indemnitee to settle any Claim, or any amount of tax assessed against the
Indemnitee in respect of any indemnity under this Agreement;
(c) that to the extent not satisfied, paid or reimbursed by the
Indemnitor, the Indemnitor shall pay or reimburse the Indemnitee for any
and all costs, charges, expenses, fees or liabilities the Indemnitee
sustains, incurs or is required to pay in or in relation to the
management, operations, activities or affairs of the Indemnitor in the
Indemnitee's capacity as an officer of the Indemnitor, whether or not
incurred in connection with any Claim.
2. Specific Indemnity for Statutory Obligations. Without limiting the generality
of the provisions of section 1 hereof and subject to section 4 hereof, the
Indemnitor agrees to indemnify and save the Indemnitee harmless from and against
any and all charges, costs, expenses, penalties, assessments and liabilities
arising by operation of statute and incurred by the Indemnitee in relation to
the management, operations, activities or affairs of the Indemnitor in the
Indemnitee's capacity as an officer of the Indemnitor, including but not limited
to all statutory obligations to employees, suppliers, contractors,
subcontractors, repairers and the like and any government or any agency or
division of any government, whether federal, provincial, state, regional or
municipal.
3. Exclusion of Liability. Subject to section 4 hereof, the Indemnitee, in his
capacity as an officer of the Indemnitor, shall not be liable for:
(a) any act, default, omission, or neglect of any other consultant,
employee, director of the Indemnitor;
(b) any loss or damages incurred by the Indemnitor owing to any receipt or
act of any consultant, employee, director of the Indemnitor in which the
Indemnitee has concurred or joined in for conformity;
(c) any loss or damages incurred by the Indemnitor through the
insufficiency or deficiency of title to any property acquired by order of
the board of directors or the officers of the Indemnitor for or on behalf
of the Indemnitor;
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(d) the insufficiency or deficiency of any security in or upon which any
money of the Indemnitor shall be invested or loaned;
(e) any loss or damage arising from the bankruptcy, insolvency or tortious
act of any person with whom any money, security or effect of the
Indemnitor shall be deposited;
(f) any loss, conversion, misapplication or misappropriation of or any
damage resulting from any dealings with any money, security or other asset
belonging to the Indemnitor;
(g) any loss or damage occasioned by any error of judgment or oversight on
the part of the Indemnitee; or
(h) any other loss, damage or misfortune whatever.
4. Limitation of Indemnity and Exclusion from Liability. The indemnity provided
for in sections 1 and 2 hereof is subject to the Delaware Revised Statutes, and
will be effective unless proved that:
(a) his failure to act constituted a breach of his fiduciary duties as
officer, and
(b) his breach of those duties involved intentional misconduct, fraud or a
knowing violation of law.
5. Court Applications. The Indemnitor represents and warrants that it will in a
timely manner take all necessary steps, including without limitation any and all
necessary court applications, to discharge its obligations under this Agreement.
6. Extensions, Modifications. Except as otherwise provided herein, this
Agreement is absolute and unconditional and the obligations of the Indemnitor
shall not be affected, discharged, impaired, mitigated or released by any
extension of time, indulgence or modification which the Indemnitee may extend or
make with any person making any Claim or demand against the Indemnitee in
connection with his duty as an officer of the Indemnitor or in respect of any
liability incurred by him as an officer of the Indemnitor.
7. Other Rights and Remedies. The indemnification provided by this Agreement
shall not be deemed to derogate from or exclude any other rights to which the
Indemnitee may be entitled under any provision of any statute or otherwise at
law.
8. Insolvency. The liability of the Indemnitor under this Agreement shall not be
affected, discharged, impaired, mitigated or released by reason of the discharge
or release of the Indemnitee in any bankruptcy, insolvency, receivership or
other proceedings of creditors.
9. Multiple Proceedings. No action or proceeding brought or instituted under
this Agreement and no recovery pursuant thereto shall be a bar or defence to any
further action or proceeding which may be brought under this Agreement.
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10. Modification. No modification of this Agreement shall be valid unless the
same shall be in writing and signed by the Indemnitor and the Indemnitee,
provided however that if the Indemnitee is requested to or agrees to act as an
officer of any subsidiary of the Indemnitor, the indemnity provided for herein
shall automatically be deemed to apply to the Indemnitee acting as such, mutatis
mutandis. It is hereby clarified that on the date hereof Indemnitee serves as
the CFO of the Subsidiary and that the indemnity provided for herein applies to
the Indemnitee acting in such position from and after the date hereof, mutatis
mutandis.
11. Procedure For Claims.
(1) In the event the Indemnitee is named as a party in any action, claim,
suit, proceeding or investigation upon which the Indemnitee intends to
base a claim for indemnification hereunder, the Indemnitee shall give the
Indemnitor prompt written notice of such action, claim, suit, proceeding
or investigation (provided, however, that failure of the Indemnitee to
provide such notice shall not relieve the Indemnitor of any liability to
the Indemnitee the Indemnitor may have under this Agreement except to the
extent that the Indemnitor is materially prejudiced by such failure).
(2) The Indemnitor shall participate in and assume the defence of any such
action, including for certainty any derivative action, claim, suit,
proceeding or investigation all at the Indemnitor's expense, provided,
however, that counsel retained by the Indemnitor shall be satisfactory to
the Indemnitee in the exercise of his reasonable judgement.
Notwithstanding the Indemnitor's assumption of the defense of such action,
claim, suit, proceeding or investigation, the Indemnitee shall have the
right to employ separate counsel and to participate in, but not control,
the defense of such action, claim, suit, proceeding or investigation, and
the Indemnitor shall bear the reasonable fees, costs and expenses of such
separate counsel as such fees, costs and expenses are incurred (provided
that with respect to any single action, claim, suit, proceeding or
investigation, the Indemnitor shall not be required to bear the fees,
costs and expenses of more than one such counsel in any single
jurisdiction) if (a) the use of counsel chosen by the Indemnitor to
represent the Indemnitee would present such counsel with a conflict of
interest; (b) the defendants, respondents or other parties in any such
action, claim, suit, proceeding or investigation include both the
Indemnitee on the one hand and the Indemnitor on the other hand, and the
Indemnitee has reasonably concluded that representation of both parties by
the same counsel would be inappropriate due to actual or potential
differing interests between them (in which case the Indemnitor shall not
have the right to direct the defense of such action, claim, suit,
proceeding or investigation on behalf of the Indemnitee); (c) the
Indemnitor shall not have employed counsel satisfactory to the Indemnitee
in the exercise of the Indemnitee's reasonable judgment to represent him,
within a reasonable time after notice of the institution of such action,
proceeding or investigation; or (d) the Indemnitor authorizes the
Indemnitee to employ separate counsel at the Indemnitor's expense.
(3) The Indemnitee shall cooperate with the Indemnitor in the Indemnitor's
defense by providing such information and other assistance which the
Indemnitor may reasonably request in connection with such defense.
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(4) The Indemnitor shall not, without the Indemnitee's prior written
consent, settle, compromise, consent to the entry of any judgment in or
otherwise seek to terminate any action, claim, suit or proceeding in
respect of which indemnification may be sought hereunder (whether or not
the Indemnitee is a party thereto) unless such settlement, compromise,
consent or termination includes a release of the Indemnitee from any
liabilities arising out of such action, claim, suit or proceeding. The
Indemnitee shall not, without the Indemnitor's prior written consent,
admit liability, settle, compromise, consent to the entry of any judgment
in or otherwise seek to terminate any action, claim, suit, investigation
or proceeding referred to in the preceding paragraph and the Indemnitee
shall not disclose the existence of this Agreement unless required by law,
subpoena, court order or upon the advice of counsel.
12. Resignation. Nothing in this Agreement shall prevent the Indemnitee from
resigning as an officer of the Indemnitor or from exercising any rights he may
have to terminate any consulting, management or other agreement he may have with
the Indemnitor.
13. Termination. The obligations of the Indemnitor shall not terminate or be
released upon the Indemnitee ceasing to act as an officer of the Indemnitor at
any time or times and such obligations shall survive the termination or
resignation of the Indemnitee. The Indemnitor's obligations may be terminated or
released only by a written instrument executed by the Indemnitee.
14. Tax Gross Up. The amount of any indemnity payable to the Indemnitee will be
computed in accordance with the following formula:
(B - D)
A = ------
(1 - C)
where:
A = the amount of indemnity payable by the Indemnitor to the Indemnitee pursuant
to this Agreement,
B = the amount of indemnity that would otherwise be payable by the Indemnitor to
the Indemnitee pursuant to this Agreement on the assumption that such amount is
computed without reference to any increased liability of the Indemnitee under
applicable income, payroll, value added or any other tax laws arising in
consequence of such payment,
C = the aggregate of the highest effective rates of all taxes (including all
surtaxes) under such tax laws applicable to the Indemnitee in respect of such
payment, after giving effect to any applicable bilateral tax convention or
treaty, and
D = any such tax required by law to be paid by or for the account of the
Indemnitee on or with respect to the Grossed Up Amount, and which is deducted by
the Indemnitor from that amount and remitted to a lawful taxing authority for
the account of the Indemnitee.
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For the purposes of this section, "Grossed Up Amount" means (B) divided by (1 -
C).
15. Advances. In any case in which the Indemnitee incurs or becomes liable to
pay any amount in respect of which he is entitled to be indemnified by the
Indemnitor pursuant to the provisions of this Agreement, the Indemnitor shall
advance such amount to the Indemnitee by way of loan forthwith upon written
demand thereof by the Indemnitee to the Indemnitor. Such notice shall be
accompanied by a written undertaking by the Indemnitee to repay the full amount
of any funds so advanced forthwith upon it being determined by the court on
application for such approval, that the Indemnitee is not entitled to
indemnification in respect thereof. In that event any amount so advanced shall
be repaid forthwith following such determination and shall bear interest at 2%
above the prime rate charged by the Indemnitor's bankers to its preferred
commercial customers from time to time during the period from the date of
advance to the date of repayment.
16. Notices. Any notice to be given by one party to the other shall be
sufficient if delivered by hand, deposited in any Post Office in Israel,
registered, postage prepaid, or sent by means of electronic transmission (in
which case any message so transmitted shall be immediately confirmed in writing
and mailed as provided above), addressed, as the case may be:
(a) To the Indemnitor:
GammaCan International, Inc.
00 Xxx Xxxxxx Xxxxxx, Xxxxx Xxxxxx 00000, Xxxxxx
Facsimile: 000-0-0000000
Attention: Xx. Xxxxx Xxxxxx, Acting CEO
(b) To the Indemnitee, at latest adddress known to the Indemnitor;
or at such other address of which notice is given by the parties pursuant to the
provisions of this section. Such notice shall be deemed to have been received
when delivered, if delivered, and if mailed, on the fifth business day
(exclusive of Saturdays, Sundays and statutory holidays) after the date of
mailing. Any notice sent by means of electronic transmission shall be deemed to
have been given and received on the day it is transmitted, provided that if such
day is not a business day then the notice shall be deemed to have been given and
received on the next business day following. In case of an interruption of the
postal service, all notices or other communications shall be delivered or sent
by means of electronic transmission as provided above, except that it shall not
be necessary to confirm in writing and mail any notice electronically
transmitted.
17. Governing Law. This Agreement shall be governed by and construed in
accordance with the State of Delaware and all disputes arising under this
Agreement shall be referred to and the parties hereto irrevocably attorn to the
jurisdiction of the courts of the State of Delaware.
18. Other Acts. The Indemnitor and the Indemnitee agree that they shall do all
such further acts, deeds or things and execute and deliver all such further
documents, instruments or certificates as may be necessary or advisable for the
purpose of assuring and confirming unto the Indemnitee the rights hereby created
or intended, and of giving effect to and carrying out the intention or
facilitating the performance of the terms of this Agreement.
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19. Interpretation. Wherever the singular or masculine are used throughout this
Agreement, the same shall be construed as meaning the plural or the feminine or
body politic or corporate and whenever the plural is used throughout this
Agreement the same shall be construed as meaning the singular, where the context
or the parties hereto so require, and the liabilities and obligations of the
Indemnitor hereunder shall be joint as well as several.
20. Invalid Terms Severable. If any term, clause or provision of this Agreement
shall be held invalid or contrary to law, the validity of any other term, clause
or provision shall not be affected and such invalid term, clause or provision
shall be considered severable.
21. Entire Agreement. This Agreement shall supersede and replace any and all
prior agreements between the parties hereto respecting the matters set forth
herein, and shall constitute the entire agreement between the parties in respect
of the matters set forth herein. There are no representations, warranties,
collateral agreements, or conditions expect as set forth herein.
22. Binding Effect. All of the agreements, conditions and terms of this
Agreement shall extend to and be binding upon the Indemnitor and their heirs,
executors, administrators and other legal representatives, successors and
assigns and shall enure to the benefit of and may be enforced by the Indemnitee
and his heirs, executors, administrators and other legal representatives,
successors and assigns.
23. Independent Legal Advice. The Indemnitor acknowledges that it has been
advised by the Indemnitee to obtain independent legal advice with respect to
entering into this Agreement, that they have obtained such independent legal
advice or have expressly waived such advice, and that they are entering into
this Agreement with full knowledge of the contents hereof, of their own free
will and with full capacity and authority to do so.
24. Power and Authority of Indemnitor. The Indemnitor represents and warrants to
the Indemnitee that this Agreement when duly and validly executed and delivered
by the Indemnitor will constitute a legal, valid and binding obligation of the
Indemnitor enforceable against the Indemnitor in accordance with the terms
hereof and that the Indemnitor, if a corporation, is duly incorporated and
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation, has the necessary corporate power, capacity and
authority to enter into this Agreement and perform its obligations hereunder and
that the execution and delivery of this Agreement by the Indemnitor has been
duly and properly authorized by all necessary corporate action and that.
25. Counterparts. This Agreement may be signed in counterparts, in writing or by
electronic facsimile transmission or by other means of electronic communication
capable of producing a printed copy, each of which will be deemed to be an
original and all such counterparts together will constitute one and the same
instrument and notwithstanding the date of execution, will be deemed to be
effective as of the date set forth above.
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IN WITNESS WHEREOF the Indemnitor and the Indemnitee have hereunto set their
hands and seals as of the day and year first above written.
By the Indemnitor:
GammaCan International, INC.
Per: /s/ Xxxxx Xxxxxx
----------------------------
Authorized Signatory
SIGNED, SEALED and DELIVERED by )
INDEMNITEE in the presence of: )
)
/s/ Xxxxx Xxxxxx )
----------------------------------- )
Name )
) /s/ Chaime Orlev
----------------------------------- ) ----------------
Address )
)
----------------------------------- )
Occupation )
