Exhibit 10.3

 

Escrow Agreement

 

This Escrow Agreement (this “Agreement”) is dated as of December 26, 2019 among
ScoutCam Ltd. (the “Company”), a limited liability company organized under the
laws of Israel, Intellisense Solutions Inc., a corporation incorporated under
the laws of Nevada (the “Parent”), Altshuler Shaham Trusts Ltd., Israeli company
no. 513901330 (the “Trustee”), and the persons and entities listed on Exhibit A
attached hereto (each an “Investor” and collectively the “Investors”).

 

WHEREAS, on the date hereof, the Investors shall deposit with the Trustee an
aggregate amount of US$2,862,582.33 (the “Deposited Amount”); and

 

WHEREAS, the Trustee shall hold the Deposited Amount in a secure escrow account
for the benefit of the Investors and the Parent (the “Escrow Account”) and in
accordance with the provisions of this Agreement, of which, subject to certain
terms and conditions expressed in this Agreement, shall be released to the
Parent for the purchase of 5,338,078 shares of the Parent’s common stock, par
value US$0.001 per share (the “Common Stock”), and 8,007,117 warrants to
purchase shares of the Parent’s common stock (the “Warrants”, and together with
the Common Stock the “Purchased Securities”), as defined in a certain securities
purchase agreement (the “SPA”) signed between the Investors, the Company and the
Parent;

 

WHEREAS, concurrent with the execution of this Agreement, the Parent and the
current parent company of the Company (“Medigus”) shall enter into a certain
securities exchange agreement (the “SEA”), pursuant to which the Company shall,
immediately prior to the closing of the SPA, become a subsidiary of the Parent
by effecting a securities exchange, upon the terms and conditions set forth in
the SEA (the consummation of the SEA shall be referred to hereinafter as the
“Securities Exchange”);

 

WHEREAS, if upon February 28, 2020, (the “Investment Termination Date”), Medigus
and the Parent have not consummated the closing of the SEA, this Agreement shall
terminate and the respective portion of the Deposited Amount shall be returned
in full to each of the Investors immediately upon the Investment Termination
Date and without any additional notice or action on the part of the Investors;

 

WHEREAS, in order to act as escrow agent with respect to the Deposited Amount
and the Purchased Securities, and to apply the Deposited Amount pursuant to
instructions to be provided by the parties hereof, the Company, the Parent and
the Investors wish to appoint the Trustee as the trustee to hold the Deposited
Amount in the Escrow Account, and to further take all actions, as instructed by
the parties hereto;

 

NOW, THEREFORE, in consideration of the mutual promises and covenants set forth
herein, the parties hereby agree as follows:

 

1. Escrow Deposit

 

Within two (2) business days following the date of this Agreement, each of the
Investors shall transfer its portion of the Deposited Amount to the Trustee.

 

2. Application of the Deposited Amount

 

2.1. The Trustee shall hold the Deposited Amount in accordance with the
provisions of this Agreement in a U.S dollar weekly deposit account, and upon
notice by the Parent that the Securities Exchange has occurred, the Trustee
shall release the full amount of the Deposited Amount to the Parent.

 

   

 

 

2.2. In the event that the Securities Exchange is not consummated by Investment
Termination Date, the Trustee shall promptly notify each of the Investors, and
shall remit each Investor its portion of the Deposited Amount in accordance with
the instructions of each of the Investors.

 

3. The Investor Obligations

 

Notwithstanding anything to the contrary in this Agreement, the Trustee shall
not be required to apply or transfer any portion of the Deposited Amount,
unless, prior thereto, it shall have received from the each of the Investors and
each payee the following information:

 

  a) Full bank account details: name of bank, branch number, account number,
name of account, SWIFT, IBAN/ABA;         b) Date of birth/Date of
incorporation;         c) ID number/Corporate ID number;         d) Identifying
documents, consisting of:

 

  ● For individuals: a copy of identification card or passport;         ● For
entities: copy of the certificate of incorporation (including identification
documents of the ultimate beneficial owners);

 

  e) Any applicable tax forms obtained from the Israeli Tax Authority;        
f) Bank account ownership approval (which could be either an official letter
from the recipient’s bank or a scanned copy of a canceled check);         g)
Signed W8/W9 forms, as applicable; and         h) CRS forms.

 

4. Tax

 

The Trustee will withhold any and all taxes which are required to be withheld in
order to comply with any Israeli applicable tax laws, unless the Investors
provides the Trustee, prior to any payment, with a valid approval (issued by the
Israeli Tax Authorities) of an exemption from such withholding tax (or a reduced
rate of withholding) to the satisfaction the Trustee, with respect to the
Deposited Amount. To the extent such amounts were so deducted or withheld, such
amounts shall be remitted in accordance with the applicable Israeli law to the
Israeli Tax Authority.

 

5. Term and Termination

 

This Agreement shall terminate upon the earliest of the: (a) the Investment
Termination Date, (b) application or transfer of the Deposited Amount and the
remaining balance in the Escrow Account; (c) immediately after the Investors
representing a majority of the Deposited Amount (the “Majority Investors”), the
Parent and the Parent and Company give the Trustee a joint written notice
regarding termination of this Agreement and regarding the nomination of an
alternative escrow agent; and (d) sixty (60) days after the Trustee gives
written notice to the Parent, the Company and the Investors regarding
termination of this Agreement, in which case the Parent and Company shall have
sixty (60) days during which to instruct the Trustee in writing regarding the
identity of a replacement escrow agent to which the Deposited Amount, as the
case may be, remaining in the Escrow Account is to be transferred, and if no
such instructions are delivered to the Trustee within such period, the Trustee
shall be permitted to transfer the Deposited Amount remaining in the Escrow
Account to a replacement escrow agent or any other person or entity of its sole
choice (the Parent, the Company and the Investors hereby provide the Trustee
with irrevocable instructions to such effect) which will agree, in writing, to
be bound by the terms of this Agreement.

 

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6. Fees

 

  ● In consideration for the provision of the Trustee services hereunder, the
Company shall pay the Trustee a fee of $2,500 (plus VAT).         ● Sell/Release
commission (per each): 0.2% of the sale value (broker fee is not included).    
    ● Processing fee including wire transfer within the Israeli banking system:

 

In NIS: 20 NIS.

In USD: 20 USD.

 

The Company shall bear any and all expenses, of any kind or nature whatsoever,
incurred by the Trustee directly or indirectly, in connection with or as a
result of this Agreement or relating to the Trustee’s holding of the Deposited
Amount or any part thereof.

 

7. Liability of Trustee

 

In order to induce the Trustee to act as trustee hereunder, the parties hereto
agree that:

 

7.1. the Trustee and its officers, directors, employees, and agents hereunder
shall not in any way be bound or affected by any amendment or modification of
this Agreement, unless the same shall have been agreed to in writing by the
Trustee (not to be unreasonably withheld or delayed);

 

7.2. the Trustee and its officers, directors, employees, and agents hereunder
shall not be under any duty to give the Deposited Amount any greater degree of
care than it gives its own similar property, but shall be bound by such degree
of care it gives to its own property;

 

7.3. the Trustee and its officers, directors, employees, and agents hereunder
may act in reliance upon and shall incur no liability for or in respect of any
action taken or omitted to be taken or anything suffered by it in reliance upon,
any notice, direction, consent, certificate, affidavit, statement or other paper
or document believed by the Trustee, in good faith, to be genuine and to have
been presented or signed by the proper party or parties or a representative
thereof. Any notice to and from the Trustee shall be made in writing to all
parties hereof;

 

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7.4. the Trustee and its officers, directors, employees, and agents hereunder
shall not at any time be under any duty or responsibility to make a
determination of any facts contained in any certificate delivered pursuant
hereto or to make any independent verification of the statements or signatures
in such certificate or amounts delivered thereby. The Trustee shall not be
responsible for any failure by the parties to comply with any of their
respective covenants contained in this Agreement or any other agreement;

 

7.5. the Trustee and its officers, directors, employees, and agents hereunder
shall be under no duty or obligation to take any legal action in connection with
this Agreement or to enforce, through the institution of legal proceedings or
otherwise, any of its rights as Trustee hereunder or any rights of any other
party hereto pursuant to this Agreement or any other agreement, nor shall it be
required to defend any action or legal proceeding which, in its opinion, would
or might involve the Trustee in any cost, expense, loss or liability;

 

7.6. the Trustee and its officers, directors, employees, and agents hereunder
may engage or be interested in any financial or other transaction with the
parties hereunder as freely as if it were not the Trustee hereunder;

 

7.7. the Trustee and its officers, directors, employees, and agents hereunder
shall be entitled to rely upon advice of counsel (the reasonable cost of which
shall be borne by the parties in equal parts) of its choosing in reference to
any matter connected herewith, and shall have full and complete authorization
and protection for any action taken or suffered by it hereunder in good faith
and in accordance with the opinion of such counsel and shall not be liable for
any mistake of fact or error of judgment, or for any acts or omissions of any
kind unless caused by its fraud or gross negligence;

 

7.8. notwithstanding anything to the contrary contained herein, if the Trustee
shall be uncertain as to its duties or rights hereunder, shall receive any
notice, advice, direction, or other document from any other party with respect
to this Agreement which, in its opinion, is in conflict with any of the
provisions of this Agreement, or should be advised that a dispute has arisen
with respect to the payment, ownership, or right of possession of or to the
Deposited Amount in the Escrow Account or any part thereof (or as to the
delivery, non-delivery, or content of any notice, advice, direction or other
document), the Trustee shall be entitled (but not obligated), without liability
to any party hereof, to refrain from taking any action other than to use its
reasonable efforts to keep safely the Deposited Amount in the Escrow Account
until the Trustee shall be directed otherwise in writing by all other parties
hereto or by an order, decree or judgment of a court of competent jurisdiction
which has been finally affirmed on appeal or which by lapse of time or otherwise
is no longer subject to appeal, but the Trustee shall be under no duty to
institute or to defend any proceeding, although it may institute or defend such
proceedings;

 

7.9. The Investors, the Parent and the Company hereby authorize the Trustee, if
the Trustee is threatened with litigation or is sued, to interplead all
interested parties in any court of competent jurisdiction; and

 

7.10. This Agreement sets forth exclusively the duties of the Trustee with
respect to any and all matters pertinent hereto and no implied duties or
obligations shall be read into this Agreement against the Trustee.

 

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8. Indemnification of Trustee

 

The Parent and the Company shall fully indemnify, defend and hold the Trustee
and its officers, directors, employees, and agents hereunder entirely harmless
from and against any damages losses, liabilities and expenses, attorney’s fees,
and disbursements that may be imposed on the Escrow Agent) incurred by the
Trustee or any claim, demand or suit filed against the Trustee in connection
with or as a result of this Agreement or relating to the Trustee’s holding of
the Deposited Amount, unless such damages, claim or suit are caused by the
fraud, gross negligence or breach of this Agreement by the Trustee. The
indemnification according to this Section ‎11 shall include reasonable expenses
and damages incurred by the Trustee as a result of the Trustee filing suit or a
motion in court with respect to this Agreement or the transaction contemplated
hereunder.

 

9. Miscellaneous.

 

9.1. Titles and Subtitles. The titles and subtitles used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement.

 

9.2. Further Assurances. Each of the parties hereto shall perform such further
acts and execute such further documents as may reasonably be necessary to carry
out and give full effect to the provisions of this Agreement and the intentions
of the parties hereto as reflected thereby.

 

9.3. Governing Law; Arbitration; Submission to Jurisdiction. This Agreement
shall be governed by and construed in accordance with the laws of the State of
Israel, without regard to the conflict of laws provisions thereof. The sole
jurisdiction with respect to this Agreement shall be with the competent courts
of Tel-Aviv-Jaffa.

 

9.4. Successors and Assigns; Assignment. Except as otherwise expressly limited
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors, and administrators of the
parties hereto. Subject to the provisions of Section ‎4 hereof, none of the
rights, privileges, or obligations set forth in, arising under, or created by
this Agreement may be assigned or transferred without the prior consent in
writing of each of the (i) Investors representing in the aggregate a majority of
the Deposited Amount, (ii) Trustee, (iii) Company and (iv) Parent.

 

9.5. Entire Agreement; Amendment and Waiver. This Agreement and the schedules
hereto constitute the full and entire understandings and agreements between the
parties hereto with regard to the subject matters hereof, and replaces any prior
agreement pertaining to the subject matter hereof. Any term of this Agreement
may be amended and the observance of any term hereof may be waived (either
prospectively or retroactively and either generally or in a particular
instance); provided, however, that each of the (i) Majority Investors, (ii)
Trustee, (iii) Company and (iv) Parent, have furnished satisfactory prior
written consent to such amendment or waiver.

 

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9.6. Notices, etc. All notices and other communications required or permitted
hereunder to be given to a party to this Agreement shall be in writing and shall
be telecopied or mailed by registered mail, postage prepaid, or otherwise
delivered by hand or by messenger, addressed to such party’s address as set
forth next to such party’s signature or at such other address as the party shall
have furnished to each other party in writing in accordance with this provision.
Any notice sent in accordance with this Section ‎9.6 shall be effective (i) if
mailed, seven (7) days after mailing, (ii) if sent by messenger, upon delivery,
and (iii) if sent via facsimile or electronic mail, upon transmission and
electronic confirmation of transmission or (if transmitted on a non-business
day) on the first business day following transmission and electronic
confirmation of transmission.

 

9.7. Delays or Omissions. No delay or omission to exercise any right, power, or
remedy accruing to any party hereto upon any breach or default under this
Agreement, shall be deemed a waiver of any other breach or default theretofore
or thereafter occurring. Any waiver, permit, consent, or approval of any kind or
character on the part of any party hereto of any breach or default under this
Agreement, or any waiver on the part of any party hereto of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in such writing. All remedies, either under
this Agreement or by law or otherwise afforded to any of the parties hereto,
shall be cumulative and not alternative.

 

9.8. Severability. If any provision of this Agreement is held by a court of
competent jurisdiction to be unenforceable under applicable law, then such
provision shall be excluded from this Agreement and the remainder of this
Agreement shall be interpreted as if such provision was so excluded and shall be
enforceable in accordance with its terms, provided however, that in such event
this Agreement shall be interpreted so as to give effect, to the greatest extent
consistent with and permitted by applicable law, to the meaning and intention of
the excluded provision as determined by such court of competent jurisdiction.

 

9.9. Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original and enforceable against the parties
hereto actually executing such counterpart, and all of which together shall
constitute one and the same instrument.

 

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IN WITNESS WHEREOF, the parties have signed this Agreement as of the date first
hereinabove set forth.

 

[SIGNATURES FOLLOW]

 

 

INTELLISENSE SOLUTIONS INC.   ALTSHULER SHAHAM TRUSTS LTD.           By:
                              By: Name:   Name: Title:               Title:
           

 

SCOUTCAM LTD.   INVESTOR           By:                               By:
           Name:   Name:   Title:              Title:  

 

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