ESCROW AGREEMENT
EXECUTION
VERSION
THIS
AGREEMENT
is made
this 25th
day of
October, 2007, by and among XTL Biopharmaceuticals Ltd., a
public
company limited by shares organized under the laws of the State of Israel (the
“Company”) and WILMINGTON TRUST COMPANY (“Escrow Agent.”)
WHEREAS,
the Company proposes to sell an aggregate of up to 89,000,000 shares of its
ordinary
shares, par value NIS 0.02
(the
“Shares”)
for an
aggregate of up to $ 12,000,000 (the “Securities”);
and
WHEREAS,
the Securities are being offered by the Company to purchasers identified by
the
Securities Purchase Agreements (the “Securities
Purchase Agreements”)
executed by the subscribers (the “Purchasers”);
and
WHEREAS,
unless the transactions contemplated by the Securities Purchase Agreements
have
been abandoned pursuant to the terms thereof, or unless otherwise agreed to
by
the Company and the Placement Agents, the Escrow Amount (as defined below)
shall
be released promptly after the date a registration statement (the “Registration
Statement”)
meeting the requirements set forth in that certain Registration Rights
Agreement, dated the date hereof, among the Company and the Purchasers is first
declared effective (“Effective
Date”)
by the
United States Securities and Exchange Commission (“SEC”),
unless the Escrow Amount is released earlier in accordance herewith;
and
WHEREAS,
the offering of the Securities may be terminated pursuant to the terms of the
Securities Purchase Agreements if the Effective Date has not occurred on or
before October 18, 2008; and
WHEREAS,
with respect to the subscription payments received from the Purchasers, the
Company proposes to establish an escrow account with the Escrow Agent in the
name of the Company; and
WHEREAS,
the Escrow Agent is willing to receive and disburse the proceeds from the
offering of the Securities in accordance herewith.
NOW,
THEREFORE,
in
consideration of the premises, and further consideration of the covenants set
forth hereafter, it is hereby agreed mutually as follows:
I. Designation
as Escrow Agent.
Subject
to the terms and conditions hereof, the Company hereby appoints Wilmington
Trust
Company as Escrow Agent and Wilmington Trust Company hereby accepts such
appointment.
II. Deposit
of Escrow Funds.
(a)
Following the execution of this Agreement and the Securities Purchase
Agreements, each Purchaser shall wire or deposit with the Escrow Agent
immediately available funds of such Purchaser in payment for the Securities
(the
“Escrowed Funds”), into an account (the "Escrow Account") established with
Escrow Agent. The Company shall be responsible for providing the Escrow Agent
with advance written notice of the name, address, and amount expected from
each
Purchaser.
(b)
Escrow Agent will hold all deposits of Escrowed Funds in the Escrow Account,
together with all investments thereof and all interest accumulated thereon
and
proceeds therefrom (collectively, the “Escrow
Amount”),
in
escrow upon the terms and conditions set forth in this Escrow Agreement and
shall not disburse funds from the Escrow Account except as provided
herein.
(c)
Escrow Agent shall invest the Escrow Account pursuant to written directions
of
the Company, and in the absence of such directions, in the U.S. Government
Portfolio (Service Class shares) of the Wilmington family of mutual funds or
any
other mutual funds for which Escrow Agent or any affiliate of Escrow Agent
may
serve as investment advisor or other service provider. The Company acknowledges
that shares in this mutual fund are not obligations of Wilmington Trust Company
or Wilmington Trust Corporation, are not deposits and are not insured by the
FDIC. Escrow Agent or its affiliate may be compensated by the mutual fund for
services rendered in its capacity as investment advisor, or other service
provider, such as provider of shareholder servicing and distribution services,
and such compensation is both described in detail in the prospectus for the
fund, and is in addition to the compensation, if any, paid to Wilmington Trust
Company in its capacity as Escrow Agent hereunder.
III. Disbursement
of Escrow Account.
The
Company shall deliver to the Escrow Agent a notice (an “Effective
Date Notice”),
certifying that the conditions in the Purchase Agreement for release of the
Escrow Amount have been complied with and designating to whom the Escrow Amount
shall be distributed, including the amount payable to each party. The Escrow
Agent shall promptly after receipt of such Effective Date Notice, pay, in
federal or other immediately available funds and otherwise in the manner
specified in such Effective Date Notice, an amount equal to the Escrow Amount
in
accordance with the Effective Date Notice. In the event that the Escrow Account
is terminated in accordance with Section 2.3 of the Securities Purchase
Agreements, and the Escrow Agent shall have received the notice of termination
specified therein, the Escrow Agent shall return the Escrow Amount to the
purchasers, pro rata in accordance with each purchaser’s proportional share of
the Escrow Amount.
Notwithstanding
anything contained herein to the contrary, in the event funds transfer
instructions are given, whether in writing, by telecopier or otherwise, Escrow
Agent is authorized (but not required) to seek confirmation of such instructions
by telephone call-back, and the Escrow Agent may rely upon the confirmations
of
anyone purporting to be the person or persons designated in the instructions.
The persons and telephone numbers for call-backs may be changed only in a
writing actually received and acknowledged by the Escrow Agent. The parties
to
this Escrow Agreement acknowledge that such security procedure is commercially
reasonable. It is understood, however, that the Escrow Agent may disburse any
funds in the Escrow Account without any separate instructions, if such
disbursements are in accordance with the terms of this Escrow
Agreement.
IV.
Authority
of Escrow Agent and Limitation of Liability.
(a)
In
acting hereunder, Escrow Agent shall have only such duties as are specified
herein and no implied duties shall be read into this Agreement, and Escrow
Agent
shall not be liable for any act done, or omitted to be done, by it in the
absence of its gross negligence or willful misconduct.
(b)
Escrow Agent may act in reliance upon any writing or instrument or signature
which it, in good faith, believes to be genuine, and may assume the validity
and
accuracy of any statement or assertion contained in such a writing or instrument
and may assume that any person purporting to give any writing, notice, advice
or
instruction in connection with the provisions hereof has been duly authorized
to
do so.
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(c)
Escrow Agent shall be entitled to consult with legal counsel in the event that
a
question or dispute arises with regard to the construction of any of the
provisions hereof, and shall incur no liability and shall be fully protected
in
acting in accordance with the advice or opinion of such counsel.
(d)
Escrow Agent shall not be required to use its own funds in the performance
of
any of its obligations or duties or the exercise of any of its rights or powers,
and shall not be required to take any action which, in Escrow Agent's sole
and
absolute judgment, could involve it in expense or liability unless furnished
with security and indemnity which it deems, in its sole and absolute discretion,
to be satisfactory.
(e)
The
Company shall pay to Escrow Agent compensation for its services hereunder to
be
determined from time to time by the application of the current rates than
charged by Escrow Agent for accounts of similar size and character, with a
minimum rate of $1,500 per annum. In the event Escrow Agent renders any
extraordinary services in connection with the Escrow Account at the request
of
the parties, Escrow Agent shall be entitled to additional compensation therefor.
Escrow Agent shall have a first lien against the Escrow Account to secure the
obligations of the Company hereunder. The terms of this paragraph shall survive
termination of this Agreement.
(f)
The
Company hereby agrees to indemnify Escrow Agent, its directors, officers,
employees and agents (collectively, the “Indemnified Parties”), and hold the
Indemnified Parties harmless from any and against all liabilities, losses,
actions, suits or proceedings at law or in equity, and any other expenses,
fees
or charges of any character or nature, including, without limitation, attorney's
fees and expenses, which an Indemnified Party may incur or with which it may
be
threatened by reason of acting as or on behalf of Escrow Agent under this
Agreement or arising out of the existence of the Escrow Account, except to
the
extent the same shall be caused by Escrow Agent's gross negligence or willful
misconduct. Escrow Agent shall have a first lien against the Escrow Account
to
secure the obligations of the parties hereunder. The terms of this paragraph
shall survive termination of this Agreement.
(g)
In
the event Escrow Agent receives conflicting instructions hereunder, Escrow
Agent
shall be fully protected in refraining from acting until such conflict is
resolved to the satisfaction of Escrow Agent.
(h)
Escrow Agent may resign as Escrow Agent, and, upon its resignation, shall
thereupon be discharged from any and all further duties and obligations under
this Agreement by giving notice in writing of such resignation to the Company,
which notice shall specify a date upon which such resignation shall take effect.
Upon the resignation of Escrow Agent, the Company shall, within sixty (60)
business days after receiving the foregoing notice from Escrow Agent, designate
a substitute escrow agent (the "Substitute Escrow Agent"), which Substitute
Escrow Agent shall, upon its designation and notice of such designation to
Escrow Agent, succeed to all of the rights, duties and obligations of Escrow
Agent hereunder. In the event the Company shall not have delivered to Escrow
Agent a written designation of Substitute Escrow Agent within the aforementioned
thirty (30) day period, together with the consent to such designation by the
Substitute Escrow Agent, the Escrow Agent may apply to a court of competent
jurisdiction to appoint a Substitute Escrow Agent, and the costs of obtaining
such appointment shall be reimbursable from the Company and from the Escrow
Amount.
V. Notices.
Except
as
otherwise provided herein, any notice, instruction or instrument to be delivered
hereunder shall be in writing and shall be effective upon receipt at the
addresses set forth on the signature page hereof or at such other address
specified in writing by the addressee, or if to the Escrow Agent, upon receipt
via facsimile or telecopier transmission, at the number set forth on the
signature page hereof, or at such other number specified by Escrow
Agent.
3
VI. Amendment.
This
Escrow Agreement may not be amended, modified, supplemented or otherwise altered
except by an instrument in writing signed by the parties hereto.
VII. Termination.
This
Agreement will terminate upon the disbursement of all funds in the Escrow
Account, as provided above, by the Escrow Agent.
VIII. Tax
Reporting.
The
parties hereto, other than the Escrow Agent, agree that, for tax reporting
purposes, all interest and other income earned from the investment of amounts
in
the Escrow Account (“Taxable
Income”)
in any
tax year shall be allocated to the Company. Upon execution of this Escrow
Agreement, the Company shall provide Escrow Agent with its certified tax
identification number (“TIN”)
on an
executed Internal Revenue Service Form (“IRS”)
W-9 or
other applicable IRS Form. The Company agrees to report all Taxable Income
allocable to it on its federal and other applicable tax returns. The Company
acknowledges and agrees that, in the event its TIN is not certified to the
Escrow Agent, and/or it does not make all certifications set forth in IRS Form
W-9 or other applicable IRS Form, applicable tax laws may require withholding
of
a portion of any income earned with respect to amounts in the Escrow Account
that are allocable to it.
IX.
Anti-Terrorism/Anti-Money
Laundering Laws.
IMPORTANT
INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT - To help the United
States government fight the funding of terrorism or money laundering activities,
Federal law requires all financial institutions to obtain, verify, and record
information that identifies each person who opens a new account. What this
means
for the parties to this Agreement: the Escrow Agent will ask for your name,
address, date of birth, and other information that will allow the Escrow Agent
to identify you (e.g.,
your
social security number or tax identification number.) The Escrow Agent may
also
ask to see your driver’s license or other identifying documents (e.g.,
passport, evidence of formation of corporation, limited liability company,
limited partnership, etc., certificate of good standing.)
Each
party to this Agreement hereby agrees to provide the Escrow Agent, prior to
the
establishment of the Escrow Account, with the information identified above
pertaining to it by completing the form attached as Exhibit A and returning
it
to the Escrow Agent. Exhibit A includes one form for individuals and another
form for entities.
X.
Governing
Law.
XI. Counterparts.
This
Agreement may be executed in any number of counterparts, each of which when
so
executed shall be deemed to be an original, and such counterparts together
shall
constitute and be one and the same instrument.
[This
space is intentionally left blank.]
4
IN
WITNESS WHEREOF,
the
parties hereto have caused their names to be hereto subscribed by their
respective Presidents or Vice Presidents as of the day and year first above
written.
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By:
/s/
Xxx
Xxxxxxx
Name:
Xxx Xxxxxxx
Title:
Chief Executive Officer Title:
Address:
000
Xxxxxxxxx Xxxxxxxxx
Xxxxx
X
Xxxxxx
Xxxxxxx, XX 00000
Fax
No.: (000) 000-0000
Xxx.Xx.:
000-000-0000
Attention:
Xxx Xxxxxxx, Chief Executive Officer
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WILMINGTON
TRUST COMPANY,
Escrow
Agent
By:
/s/
Xxxxx X.
Xxxxx
Name:
Xxxxx X. Xxxxx
Title:
Assistant Vice President
Address:
0000
Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx,
Xxxxxxxx 00000
Fax
No.: (302)
636
-4149
Tel.
No.: (000)
000-0000
Attention:
Xxxxx
X.
Xxxxx
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EXHIBIT
A
Due
Diligence Questionnaire for Entity Customers
Dear
Customer:
IMPORTANT
INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT
To
help
the government fight the funding of terrorism or money laundering activities,
Federal law requires all financial institutions to obtain, verify, and record
information that identifies each person who opens a new account. What this
means
for you: When you open an account, we will ask for your name, address, date
of
birth, and other information that will allow us to identify you. We may also
ask
to see your driver’s license or other identifying documents.
Please
complete the items identified and sign below. In certain circumstances, we
may
be required to request additional information. Thank you for your cooperation
in
this matter.
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Company
Name:___________________________________________________________________________________________________
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SSN/TIN*:_______________________________________________________________________________________________________
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Street
Address**:_________________________________________________________________________________________________
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City:_____________________________________
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State:_____________________________________
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Zip
Code:___________
|
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Phone
(Optional):___________________________
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Fax (Optional):_____________________________
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eMail
(Optional):
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____________ |
*If
SSN/TIN has been applied for please attach copy of filed
application
**
Business
street address, address for the principal place of business, local office or
other physical location,
P.O.
Box address is not acceptable
Required
documents from non-individuals:
Please
provide the following executed
document:
Completed
IRS Form W-9/W-8 (form attached)
Please
provide at
least one
(1) of
the
following certified documents:
Certificate
or Articles of Incorporation
Government-issued
business license
Partnership
Agreement
LLC
Agreement
Trust
Agreement
Certificate
of Good Standing (issued within the last six months)
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Signature
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Date
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EXHIBIT
A (Cont’d)
Due
Diligence Questionnaire for Individual Customers
Dear
Customer:
IMPORTANT
INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT
To
help
the government fight the funding of terrorism or money laundering activities,
Federal law requires all financial institutions to obtain, verify, and record
information that identifies each person who opens a new account. What this
means
for you: When you open an account, we will ask for your name, address, date
of
birth, and other information that will allow us to identify you. We may also
ask
to see your driver’s license or other identifying documents.
Please
complete the items identified and sign below. In certain circumstances, we
may
be required to request additional information. Thank you for your cooperation
in
this matter.
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Your
Name:______________________________________________________________________________________________________
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||||
|
SSN/TIN*:_________________________________________________________
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Date
of Birth (Individuals):_______________________
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Street
Address (individual’s
residential address**):______________________________________________________________________
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||||
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City:_______________________________________
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State:___________________
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Zip
Code:___________________
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Phone
(Optional):_____________________________
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Fax
(Optional):_________________________________
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eMail
(Optional):________
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*
If
SSN/TIN has been applied for please attach copy of filed
application
**
P.O. Box address is not acceptable
Required
documents from individuals:
Please
provide the following executed
document:
Completed
IRS Form W-9/W-8 (form attached)
Copy
of
at
least one
(1) of
the following documents:
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1)
Driver License (Photo ID):
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2)
Passport:
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State/Country
of Issuance:________________
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Country
of Issuance:_________________________________
|
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License
Number:________________________
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Issuance
Date:______________________________________
|
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Issuance
Date:_________________________
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Passport
Number:____________________________________
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Expiration
Date:________________________
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Expiration
Date:______________________________________
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3)
Government Issued ID Card (Photo ID):
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State/Country
of Issuance:___________
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||
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ID
Number:_______________________
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||
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Issuance
Date:____________________
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||
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Expiration
Date:___________________
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||
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___________________________________
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___________________
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Signature
|
Date
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Revised:
January 9, 2007/Due Diligence Form
