Amiad Water Systems Ltd. Indemnification and Exemption Agreement

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1 Amiad Water Systems Ltd. Indemnification and Exemption Agreement This Indemnification and Exemption Agreement entered into on the 11 day of March, 2018 by and between Amiad Water Systems Ltd., an Israeli corporation, having its principal place of business at Amiad, Israel (the "Company") and of (the Beneficiary ). Whereas the Beneficiary serves as a director of the Company, and in addition may also serve as a member of the board of directors of any of the Company s subsidiaries (the Subsidiaries ), as may be agreed from time to time between the Company and the Beneficiary, and qualifies as an "office holder" of the Company, as such term is defined in the Companies Law, 1999 (the Law ); and Whereas the Beneficiary desires to have the Company, in advance, to exempt the Beneficiary from responsibility in certain events, as set forth herein, and to undertake to indemnify him for certain Indemnifiable Expenses, as defined herein, incurred by the Beneficiary in his capacity as an office holder of the Company and/or a member of the board of directors of any of the Subsidiaries; and Whereas the Company agrees to provide the Beneficiary with Indemnification and Exemption (both as defined herein), subject to the provisions of the Law and of the Articles of Association of the Company (the "Articles"), and as set forth in this Agreement. NOW, THEREFORE, the parties hereto, intending to be legally bound hereby, agree as follows: 1. Exemption 1.1. Pursuant to the provisions of section 259 of the Law and of the Articles, and as detailed herein, the Company hereby exempts the Beneficiary from responsibility for any damage caused due to the Beneficiary s breach of the duty of care owed by the Beneficiary to the Company and its Subsidiaries (the "Exemption") The Exemption shall be granted for any damage that may be caused, and/or was caused, to the Company and/or the Subsidiaries, directly or indirectly, during the Beneficiary s service and/or after its termination, due to a breach of the Beneficiary's duty of care, owed to the Company and/or the Subsidiaries, due to Beneficiary s acts and/or omissions, provided that the acts and/or omissions were committed in good faith and in the Beneficiary's capacity as an office holder of the Company and/or of the Subsidiaries, as the case may be The Exemption shall not be granted to the Beneficiary due to breach of his duty of care towards the Company if such breach is in connection with a distribution by the Company, as such term is defined in the Law

2 2. Indemnification Pursuant to the provisions of section 260 of the Law and of the Articles, and as detailed herein, the Company hereby undertakes to indemnify the Beneficiary for expenses and liabilities imposed or incurred by the Beneficiary due to acts performed in his capacity of office holder in the Company and/or of Subsidiaries (the Indemnification ). 3. Indemnifiable Act 3.1. The Indemnification hereunder shall be offered to the Beneficiary solely in connection with acts performed thereby in his capacity as an office holder of the Company and/or as an office holder of the Subsidiaries (the Indemnifiable Act ), provided that such act is related to one of the categories of events set forth in Exhibit A attached hereto, as may be amended from time to time, which sets forth the categories of events that the board of directors anticipates may occur in light of the Company's business (the Qualifying Categories ) For the avoidance of doubt, the Indemnification undertaking shall not apply with respect to: (a) (b) (c) (d) 4. The Claim A breach of a fiduciary duty by the Beneficiary, except for a breach of a fiduciary duty while acting in good faith and having reasonable grounds to assume that such act would not be detrimental to the Company. A willful or reckless breach of the duty of care toward the Company. An act intended to unduly generate personal gain. A fine or monetary composition imposed on the Beneficiary The Beneficiary shall notify the Company in writing, immediately after receipt by the Beneficiary of notice, or any other indication of any, actual or threatened claim, action, suit, or other proceeding (each, a Claim ), for which the Beneficiary may be entitled to Indemnification hereunder. Such notice shall provide a detailed description of such actual or threatened Claim Non-performance by the Beneficiary of its obligation to notify the Company of a Claim shall not relieve the Company of its Indemnification obligations, except and to the extent that such non-performance materially prejudices the Company in the defense of the Claim in the event it decides to assume such defense The Beneficiary shall allow the Company, at its discretion (other than in the case of a Criminal Claim against the Beneficiary), to assume the exclusive defense of a Claim The Beneficiary shall, for no consideration, fully cooperate with the Company, and provide any information, cooperation and assistance requested by the Company, including, but not limited to, the execution of power(s) of attorney and other documents. In connection therewith, the Beneficiary shall deliver to the Company, without delay, all documents which the Beneficiary received or will receive regarding the Claim The Beneficiary shall make no admission relating to any Claim unless required by law

3 4.6. In the case of a criminal Claim, the Beneficiary shall consult with the Company as to the choice of counsel. In the event that the Company does not approve of the Beneficiary s choice of counsel, Indemnification for the Litigation Expenses (defined below) shall be limited to such amounts as would have been paid with respect to counsel approved by the Company. 5. Compromise, Settlement, Arbitration and Mediation 5.1. The Company may, at its discretion, decide on an alternative dispute resolution procedure with respect to a Claim, such as arbitration or mediation The Company may, at its discretion, negotiate for the settlement or compromise of a non-criminal Claim, as it deems fit. Notwithstanding the foregoing, the Company shall inform the Beneficiary before finalizing a settlement and the Beneficiary shall be entitled to object to the settlement only in the event that in the Beneficiary s counsel legal opinion, as a result of such settlement, the Beneficiary may be held legally responsible in a pending or threatened criminal Claim The Indemnification hereunder shall not apply in regard to any sum paid by the Beneficiary as part of a settlement finalized by the Beneficiary, unless the Beneficiary received, in advance, the Company's written consent to the said settlement. 6. Indemnifiable Expenses 6.1. Indemnification hereunder will only apply to the following liabilities and expenses (the Indemnifiable Expenses ), incurred in connection with an Indemnifiable Act related to one of the Qualifying Categories, and subject to the monetary limitations defined in sections 6.2 to 6.4 below: (a) (b) (c) monetary liabilities imposed upon the Beneficiary for the benefit of another person pursuant to a final judgment by a competent court, including a judgment giving effect to a compromise and/or an arbitration award approved by a court ( Judgment Liability ); and/or reasonable litigation expenses, including attorney's fees, incurred by the Beneficiary due to an investigation or process conducted against him by an authority authorized to conduct such investigation or process, that did not result in indictment and was concluded without imposing monetary liability in lieu of criminal proceedings, or that did not result in indictment but did include the imposition of monetary liability in lieu of criminal proceedings in an offence that does not require proof of criminal intent ( Litigation Expenses ); and/or reasonable litigation expenses, including attorney's fees, incurred by the Beneficiary or which were imposed on the Beneficiary by a court in proceedings filed against the Beneficiary by the Company or in its name or by any other person or in an indictment in respect of which the Beneficiary was acquitted or in an indictment in respect of which the Beneficiary was convicted for an offence that does not require proof of criminal intent in respect of an act performed by him by virtue of him being an "office holder" of the Company - 3 -

4 6.2. Indemnification Expenses shall be due and payable by the Company up to the maximum amount set forth on Exhibit A opposite the Category of Events in relation to which the Indemnifiable Act was performed (each, a Cap ) In the event that in addition to the Beneficiary other persons shall be entitled to indemnification from the Company for the same Indemnifiable Act for which the Beneficiary is being indemnified, or an act directly related thereto, which also qualifies under the same Category of Events ( Additional Beneficiaries ), the Company s Indemnification obligation regarding the Beneficiary and such Additional Beneficiaries Judgment Liabilities, in aggregate, shall be limited to the higher of the Beneficiary s or such Additional Beneficiaries relevant Cap for the relevant Category of Events. In such event, the Company shall indemnify the Beneficiary and Additional Beneficiary (collectively Joint Beneficiaries ) pro rata to their respective indemnification Cap, and if two or more of the Joint Beneficiaries Cap is similar than the Indemnification shall be distributed between them pro rata to the percentage of their culpability, as finally determined in the relevant Claim, or, absent such determination or in the event such beneficiaries are parties to different Claims, in equal amounts Notwithstanding anything to the contrary, the Beneficiary shall bear the Indemnifiable Expenses up to US$ 1,000 (the Minimum Amount ), and shall not be entitled to Indemnification therefore. 7. Advances towards Indemnifiable Expenses 7.1. Upon commencement of a Claim, the Beneficiary shall be entitled to request from the Company an advance towards Litigation Expenses, and the Company may make such advance, on condition that: (a) (b) (c) the Company is reasonably satisfied that the Beneficiary will be entitled to Indemnification for such expenses; the amount of the advance shall not exceed half of the relevant Cap for such Litigation Expenses; the Beneficiary undertakes that if, when and to the extent that it is determined that he is not entitled to Indemnification, he will promptly reimburse the Company for all amounts advanced. 8. Interim Expenses and Liabilities In the event that in a non-criminal Claim, encumbrances are imposed on the Beneficiary s assets in connection with the principal remedy applied for in the Claim, the Company shall make its best efforts to effect the removal of such encumbrances, including by way of providing for securities in substitution of the Beneficiary s encumbered assets, provided that it is reasonably satisfied that the Beneficiary will be entitled to Indemnification hereunder

5 9. Reimbursement from Third Parties 9.1. The Company shall not be obligated to make Indemnification payments in connection with an Indemnifiable Expense, or part thereof, for which the Beneficiary receives or is entitled to receive compensation or reimbursement from a third party, such as under a valid and collectable insurance policy or under a valid and enforceable agreement ( Reimbursement ) In the event the Beneficiary actually receives Reimbursement following receipt of Indemnification payments from the Company ( Indemnification Payments ), the Beneficiary shall immediately pay the full Reimbursement amount to the Company. Notwithstanding the foregoing, in the event the Indemnifiable Expenses actually incurred exceed the relevant Cap, the Beneficiary shall only be required to pay the Company an amount equal to the sum of the Reimbursement amount plus the Indemnification Payments less the actual Indemnification Expenses incurred by the Beneficiary As a condition to receiving the Indemnification payments, the Beneficiary hereby assigns its rights to receive the Reimbursement amounts to the Company, in accordance with section 9.2 above. 10. Miscellaneous If any provision of this Agreement is found by a court of competent jurisdiction to be invalid or void, such provisions, to the extent possible shall be severed from this Agreement, all of the other provisions shall remain in effect, and neither party shall have any claim against the other in such event This Agreement shall be governed by, interpreted and construed in accordance with the laws of the State of Israel. The competent court in Haifa, Israel shall have sole and exclusive jurisdiction regarding any dispute or claim arising hereunder Notice as required herein shall be delivered by hand, by fax, by courier service or by registered or certified mail, return receipt requested, postage prepaid. A notice shall be addressed to the other party at the address listed above, or to another address that may subsequently be specified in writing by a party. A notice shall be effective three (3) days after being delivered by hand, courier service or by fax, and five days after being sent by mail. IN WITNESS WHEREOF, THE PARTIES HAVE SIGNED: Amiad Water Systems Ltd. [Beneficiary] - 5 -

6 Exhibit A - Indemnifiable Events and Caps Qualifying Categories 1 Any claim or demand made by a customer, suppliers, contractors or other third parties transacting any form of business with the Company and/or its Subsidiaries, in the ordinary course of their business, relating to the negotiations or performance of such transactions, representations or inducements provided in connection thereto or otherwise. 2 Any claim or demand made in connection with any transaction not in the ordinary course of business of the Company and/or its Subsidiaries or the party making such claim, including the sale, lease or purchase of any assets or business. 3 Any claim or demand made by employees, consultants, agents or other individuals or entities employed by or providing services to the Company and/or its Subsidiaries relating to compensation owed to them or damages or liabilities suffered by them in connection with such employment or service. 4 Any claim or demand made under any securities laws or by reference thereto, or related to the failure to disclose any information in the manner or time such information is required to be disclosed pursuant to such laws, or related to inadequate or improper disclosure of information to shareholders, or prospective shareholders, or related to the purchasing, holding or disposition of securities of the Company or any other investment activity involving or affected by such securities. 5 Any claim or demand made for actual or alleged infringement, misappropriation or misuse of any third party s intellectual property rights by the Company and/or its Subsidiaries. 6 Any claim or demand made by any lenders or other creditors or for moneys borrowed by, or other indebtedness of, the Company and/or its Subsidiaries. 7 Any claim or demand made by any third party suffering any personal injury or damage to business or personal property through any act or omission attributed to the Company and/or its Subsidiaries, or their respective employees, agents or other persons acting or allegedly acting on their behalf. 8 Any claim or demand made directly or indirectly in connection with complete or partial failure, by the Company and/or its Subsidiaries, or their respective directors, officers and employees, to pay, report, keep applicable records or otherwise, of any foreign, federal, state, country, local, municipal or city taxes or other compulsory payments of any nature whatsoever, including without limitation, income, sales, use, transfer, excise, value added, registration, severance, stamp, occupation, customs, duties, real property, personal property, capital stock, social security, unemployment, disability, payroll or employee withholding or other withholding, including any interest, penalty or addition thereto, whether disputed or not. Cap Amount (in US$) Judgment Liability Litigation Expenses 3,400, ,

7 Qualifying Categories 9 Any administrative, regulatory or judicial actions, orders, decrees, suits, demands, demand letters, directives, claims, liens, investigations proceedings or notices of noncompliance or violation by any governmental entity or other person alleging potential responsibility or liability (including potential responsibility or liability for costs of enforcement, investigation, cleanup, governmental response, removal or remediation, for natural resources damages, property damage, personal injuries, or penalties or contribution, indemnification, cost recovery, compensation, or injunctive relief) arising out of, based on or related to (x) the presence of, release spill, emission, leaking, dumping, pouring, deposit, disposal, discharge, leaching or migration into the environment (each a Release ) or threatened Release of, or exposure to, any hazardous, toxic, explosive or radioactive substance, wastes or other substances or wastes of any nature regulated pursuant to any environmental law, at any location, whether or not owned, operated, leased or managed by the Company or any of its subsidiaries, or (y) circumstances forming the basis of any violation of any environmental law, environmental permit, license, registration or other authorization required under applicable environmental law. 11 Any administrative, regulatory or judicial actions, orders, decrees, suits, demands, demand letters, directives, claims, liens, investigations, proceedings or notices of noncompliance or violation by any governmental entity or other person alleging the failure to comply with any statute, law, ordinance, rule, regulation, order or decree of any of its subsidiaries, or any of their respective business operations. 12 Any claim or demand, not covered by any of the categories of events described above, which, pursuant to any applicable law, a director or officer of the Company may be held liable to any government or agency thereof, or any person or entity, in connection with actions taken by such director or officer in such capacity. Cap Amount (in US$) Judgment Liability Litigation Expenses 3,400, ,

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