Document:

Exhibit 10.3

EXHIBIT 10.3

PERSONAL EMPLOYMENT AGREEMENT

THIS PERSONAL EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into this 6th day of May,
2009 by and between TopSpin Medical (Israel) Ltd. (the “Company”), and Eldad Yehieli (the
“Employee”).

General

1. Position. The Employee shall serve as the Finance Manager of the Company and the
Company’s parent corporation, TopSpin Medical, Inc. (the “Parent”). The Employee shall report
regularly and shall be subject to the direction and control of the Company’s Chief Executive
Officer or, if no person is serving in such capacity, the Company’s Board of Directors or anyone
designated by it for this purpose. The Employee shall perform his duties diligently,
conscientiously and in furtherance of the Company’s best interests. The Employee agrees and
undertakes to inform the Company, immediately after becoming aware of any matter that may in any
way raise a conflict of interest between the Employee and the Company. During his employment by the
Company, the Employee shall not receive any payment, compensation or benefit from any third party
in connection, directly or indirectly, with his position in the Company.

2. Full Time Employment. The Employee will be employed on a full time basis. The Employee
shall devote his entire business time and attention to the business of the Company and shall not
undertake or accept any other paid or unpaid employment or occupation or engage in any other
business activity, except with the prior written consent of the Company.

3. Employee’s Representations and Warranties.

3.1. The Employee represents and warrants that the execution and delivery of this Agreement and the
fulfillment of its terms: (i) will not constitute a default under or conflict with any agreement or
other instrument to which he is a party or by which he is bound; and (ii) do not require the
consent of any person or entity. Further, with respect to any past engagement of the Employee with
third parties and with respect to any permitted engagement of the Employee with any third party
during the term of his engagement with the Company (for purposes hereof, such third parties shall
be referred to as “Other Employers”), the Employee represents, warrants and undertakes that: (a)
his engagement with the Company is and/or will not be in breach of any of his undertakings toward
Other Employers, and (b) he will not disclose to the Company, nor use, in provision of any services
to the Company, any proprietary or confidential information belonging to any Other Employer.

3.2. The Employee acknowledges and agrees that all information technology systems of the Company to
which he shall have access are the sole and exclusive property of the Company, and that all such
systems are and shall be monitored by the Company regularly, at its discretion. Employee
understands that he should have no expectation of privacy in his use of such systems.

Term and Termination of Employment

4. Term. The Employee’s employment by the Company will commence on May 6, 2009 (the
“Commencement Date”), and shall continue until it is terminated pursuant to the terms set forth
herein.

5. Termination at Will. Either party may terminate the employment relationship hereunder at
any time by giving the other party 45 days prior written notice (the “Notice Period”). It is
clarified that the Company is entitled to terminate this Agreement and the employment relationship
with immediate effect upon a written notice to Employee and payment to the Employee of a one time
amount equal to the Salary (as defined below) to which the Employee would have been entitled during
the Notice Period, in
lieu of such prior notice.

 

 

 

6. Termination for Cause. The Company may immediately terminate the employment relationship
for Cause, and such termination shall be effective as of the time of notice of the same. “Cause”
means (a) a material breach of this Agreement; (b) any willful failure to perform or willful
failure to perform competently any of the Company’s instructions or any of the Employee’s
fundamental functions or duties hereunder; (c) engagement in willful misconduct or acting in bad
faith with respect to the Company, (d) conviction of a felony involving moral turpitude; or (e) any
cause justifying termination or dismissal in circumstances in which the Company can deny the
Employee severance payment under applicable law.

7. Notice Period; End of Relations. During the Notice Period and unless otherwise
determined by the Company in a written notice to the Employee, the employment relationship
hereunder shall remain in full force and effect, the Employee shall be obligated to continue to
discharge and perform all of his duties and obligations with Company, and the Employee shall
cooperate with the Company and assist the Company with the integration into the Company of the
person who will assume the Employee’s responsibilities.

Covenants

8. Proprietary Information; Assignment of Inventions and Non-Competition. By executing this
Agreement the Employee confirms and agrees to the provisions of the Company’s Proprietary
Information, Assignment of Inventions and Non-Competition Agreement attached as Schedule A hereto.

Salary
and Additional Compensation; Insurance; Advanced Study Fund

9. Salary. The Company shall pay to the Employee as compensation for the employment
services a base salary in the gross amount of NIS25,000 (the “Salary”). The parties agree that the
Salary includes all payments due from the Company for any and all daily travel costs to which he
may be entitled under any applicable law, collective bargaining agreements or orders, to the extent
any apply. Except as specifically set forth herein, the Salary includes any and all payments to
which the Employee is entitled from the Company hereunder and under any applicable law, regulation
or agreement. The Salary and any other amount to be paid to the Employee by the Company under this
Agreement, is to be paid to the Employee in accordance with the Company’s normal and reasonable
payroll practices, after deduction of applicable taxes and like payments.

Position of Trust. The Employee agrees that Employee’s position is one that requires a
special measure of personal trust and loyalty. Therefore, the provisions of the Hours of Work and
Rest Law-1951 shall not apply to the Employee and the Employee shall not be entitled to any
compensation for working more than the maximum number of hours per week set forth in such Law in
addition to the compensation set forth in this Section 9.

10. Manager’s Insurance 

10.1. The Company will insure the Employee under a “Manager’s Insurance Policy” to be selected by
the Company (the “Policy”), and shall remit to the Policy as follows: (i) an amount equal to 5% of
the Salary for savings and risk component; (ii) an amount equal to 8 1/3% of the Salary for
severance pay component (the “Severance Pay Component”); and (iii) amount of up to 2.5% (two and
half percents) of the Salary for loss of earning capacity component, (collectively, the “Company’s
Contribution”). In addition, the Company shall deduct from the Employee’s Salary an amount equal to
5% of the Salary, which it shall remit to the Policy for the savings and risk component (the
“Employee’s Contributions”).

10.2. The Company undertakes to transfer the Policy to the Employee within a reasonable time after
termination of the Employee’s employment with the Company, whether terminated by the Company or the
Employee.

 

 

 

10.3. The Company’s Contributions will be in lieu of the severance pay that the Employee will be
entitled to in the event of his termination, all in accordance with the provisions of Section 14 of
the Severance Pay Law, 5723-1963. The Employee’s signature on this Agreement represents the
Employee’s agreement to the content of this section. The Company waives in advance any right it may
have in the future for the return of the Company’s
Contributions, or any of them, unless:

10.3.1. The Employee’s entitlement for severance pay has been deprived by a judgment, under the
provisions of sections 16 or 17 of the Severance Pay Law, 5723-1963, and as long as it was so
deprived; or

10.3.2. The employee has withdrawn monies from the Policy not in circumstances of death, disability
or retirement at the age of 60 or more.

A copy of the Order and Confirmation Regarding Payments of Employers to Pension Funds and
Insurance Funds instead of Severance Pay is attached as Schedule B to this Agreement.

10.4. The Company’s Contribution to the Policy shall be calculated solely based on the Salary, and
the Employee’s entitlement to severance pay, if any, shall be calculated solely based on the Salary
and no other payment, right or benefit to which the Employee is entitled under this Agreement or by
law shall be taken into account in such calculations.

11. Further Education Fund. The Company together with the Employee will maintain a Further
Education Fund (“Keren Hishtalmut”). Each month, the Company shall contribute to such fund an
amount equal to 7.5% of the Salary and the Employee shall contribute to such fund an amount equal
to 2.5% of the Salary. All of the Employee’s aforementioned contributions shall be transferred to
the fund by the Company by deducting such amounts from each monthly Salary payment. Notwithstanding
the aforesaid, the Employee may instruct the Company in writing to pay him directly, together with
his/hers monthly Salary and after deducting the applicable taxes, the amount exceeding the income
tax exempted amount. For the avoidance of doubt, no amount remitted by the Company in respect of
this Section 11 shall be considered as part of the Salary for purposes of any deduction therefrom
or calculation of severance pay.

Additional Benefits

12. Expenses. The Company will reimburse the Employee for business expenses borne by the
Employee, provided that such expenses were approved in advance by the Company, and against valid
invoices furnished by the Employee to the Company.

13. Vacation. The Employee shall be entitled to 16 paid vacation days during each year, to
be taken at times subject to the reasonable approval of the Company. Up to 15 of unused vacation
days may be carried forward from one year to the next and any such carried unused vacation day
shall be forfeited without any payment at the end of the second year. The Employee shall not
receive payment in lieu of any accrued and unused vacation days, except in the context of his
termination in accordance with applicable law.

14. Sick Leave; Recuperation Pay. The Employee shall be entitled to sick leave and
Recuperation Pay (“Dmei Havra’a”) pursuant to applicable law.

15. Company Car. Employee shall be entitled to the full time use of a class 2 Company car.
The Company shall pay all the expenses in connection with the maintenance and use of the said car,
except for the applicable tax and other payments as set forth below. Employee hereby undertakes to
use the car reasonably and properly, as if he owned the car, and to return the car to Company
immediately upon the termination of this Agreement. The Employee shall be liable for any and all
income tax liability applicable to the Company providing him with the car. The Employee hereby
covenants to pay and to bear any fine regarding parking violation, traffic violation or any other
violation, and to bear any expense
with respect to any trial or other proceeding thereto and Employee hereby irrevocably authorizes
and instructs Company to deduct from the Salary any costs incurred due to any violation of law.

 

 

 

16. Options. The Employee shall be granted options to purchase up to 1,500,000 shares of
Common Stock of the Parent, pursuant to the option agreement to be signed by the Employee and the
Parent.

Miscellaneous

17. The laws of the State of Israel shall apply to this Agreement and the sole and exclusive place
of jurisdiction in any matter arising out of or in connection with this Agreement shall be the
Tel-Aviv Regional Labor Court. The provisions of this Agreement are in lieu of the provisions of
any collective bargaining agreement, and therefore, no collective bargaining agreement shall apply
with respect to the relationship between the parties hereto (subject to the applicable provisions
of law). No failure, delay of forbearance of either party in exercising any power or right
hereunder shall in any way restrict or diminish such party’s rights and powers under this
Agreement, or operate as a waiver of any breach or nonperformance by either party of any terms of
conditions hereof. In the event it shall be determined under any applicable law that a certain
provision set forth in this Agreement is invalid or unenforceable, such determination shall not
affect the remaining provisions of this Agreement unless the business purpose of this Agreement is
substantially frustrated thereby. The preface and schedules to this Agreement constitute an
integral and indivisible part hereof. This Agreement constitutes the entire understanding and
agreement between the parties hereto, supersedes any and all prior discussions, agreements and
correspondence with regard to the subject matter hereof, including, without limitation, the
Previous Agreement, and may not be amended, modified or supplemented in any respect, except by a
subsequent writing executed by both parties hereto. The Employee acknowledges and confirms that all
terms of the Employee’s employment are personal and confidential, and undertake to keep such term
in confidence and refrain from disclosing such terms to any third party.

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

	 	 	 	 
	TopSpin Medical (Israel) Ltd.

	 	Eldad Yehieli
	 
		 	 
	By: 	/s/ Avi Molcho

	 	/s/ Eldad Yehieli
	 	 

	 	 
	 
	 Avi Molcho	 	 
	 
	Title: Director	 	 

 

 

 

Schedule A

Name of Employee: Eldad Yehieli

ID No. of Employee:
 _____ 

General

1. Capitalized terms herein shall have the meanings ascribed to them in the Agreement to which this
Schedule is attached (the “Agreement”). For purposes of any undertaking of the Employee toward the
Company, the term Company shall include any subsidiaries and affiliates of the Company. The
Employee’s obligations and representations and the Company’s rights under this Schedule shall apply
as of the Commencement Date, regardless of the date of execution of the Agreement.

Confidentiality; Proprietary Information

2. “Proprietary Information” means confidential and proprietary information concerning the business
and financial activities of the Company, including patents, patent applications, trademarks,
copyrights, brand names and other intellectual property, and information relating to the same,
technologies and products (actual or planned), know how, inventions, research and development
activities, inventions, trade secrets and industrial secrets, and also confidential commercial
information such as investments, investors, employees, customers, suppliers, marketing plans, etc.,
all the above — whether documentary, written, oral or computer generated. Proprietary Information
shall also include information of the same nature which the Company may obtain or receive from
third parties.

3. Proprietary Information shall be deemed to include any and all proprietary information disclosed
by or on behalf of the Company and irrespective of form but excluding information that (i) was
known to Employee prior to Employee’s association with the Company, as evidenced by written
records; (ii) is or shall become part of the public knowledge except as a result of the breach of
the Agreement or this Schedule by Employee; (iii) reflects general skills and experience; or (iv)
reflects information and data generally known in the industries or trades in which the Company
operates.

4. Employee recognizes that the Company received and will receive confidential or proprietary
information from third parties, subject to a duty on the Company’s part to maintain the
confidentiality of such information and to use it only for certain limited purposes. In connection
with such duties, such information shall be deemed Proprietary Information hereunder, mutatis
mutandis.

5. Employee agrees that all Proprietary Information, and patents, trademarks, copyrights and other
intellectual property and ownership rights in connection therewith shall be the sole property of
the Company its subsidiaries and their assigns. At all times, both during the employment
relationship and after the termination of the engagement between the parties, Employee will keep in
confidence and trust all Proprietary Information, and will not use or disclose any Proprietary
Information or anything relating to it without the written consent of the Company or its
subsidiaries, except as may be necessary in the ordinary course of performing Employee’s duties
under the Agreement.

6. Upon termination of Employee’s engagement with the Company, Employee will promptly deliver to
the Company all documents and materials of any nature pertaining to Employee’s engagement with the
Company, and will not take with his any documents or materials or copies thereof containing any
Proprietary Information.

7. Employee’s undertakings set forth in Section 1 through Section 6 shall remain in full force and
effect after termination of the Agreement or any renewal thereof.

Disclosure and Assignment of Inventions

8. “Inventions” means any and all inventions, improvements, designs, concepts, techniques, methods,
systems, processes, know how, brand names, computer software programs, databases, mask works and
trade secrets, whether or not patentable, copyrightable or protectible as trade secrets;
“Company Inventions” means any Inventions that are made or conceived or first reduced to practice
or created by Employee, whether alone or jointly with others, during the period of Employee’s
engagement with the Company, and which are: (i) developed using equipment, supplies, facilities or
Proprietary Information of the Company, (ii) result from work performed by Employee for the
Company, or (iii) related to the field of business of the Company, or to current or anticipated
research and development.

 

 

 

9. Employee undertakes and covenants he will promptly disclose in confidence to the Company all
Inventions deemed as Company Inventions. The Employee agrees and undertakes not to disclose to the
Company any confidential information of any third party and, in the framework of his employment by
the Company, not to make any use of any intellectual property rights of any third party.

10. Employee hereby irrevocably transfers and assigns to the Company all worldwide patents, patent
applications, copyrights, mask works, trade secrets and other intellectual property rights in any
Company Invention, and any and all moral rights that he may have in or with respect to any Company
Invention.

11. Employee agrees to assist the Company, at the Company’s expense, in every proper way to obtain
for the Company and enforce patents, copyrights, mask work rights, and other legal protections for
the Company Inventions in any and all countries. Employee will execute any documents that the
Company may reasonably request for use in obtaining or enforcing such patents, copyrights, mask
work rights, trade secrets and other legal protections. Such obligation shall continue beyond the
termination of Employee’s engagement with the Company. Employee hereby irrevocably designates and
appoints the Company and its authorized officers and agents as Employee’s agent and attorney in
fact, coupled with an interest to act for and on Employee’s behalf and in Employee’s stead to
execute and file any document needed to apply for or prosecute any patent, copyright, trademark,
trade secret, any applications regarding same or any other right or protection relating to any
Proprietary Information (including Company Inventions), and to do all other lawfully permitted acts
to further the prosecution and issuance of patents, copyrights, trademarks, trade secrets or any
other right or protection relating to any Proprietary Information (including Company Inventions),
with the same legal force and effect as if executed by Employee himself.

Non-Competition

12. In consideration of Employee’s terms of employment hereunder, which include special
compensation for his undertakings under this Section 12 and the following Section 13, and in order
to enable the Company to effectively protect its Proprietary Information, Employee agrees and
undertakes that he will not, so long as the Agreement is in effect and for a period of twelve (12)
months following termination of the Agreement, for any reason whatsoever, directly or indirectly,
in any capacity whatsoever, engage in, become financially interested in, be employed by, or have
any connection with any business or venture that is engaged in any activities competing with the
activities of the Company.

13. Employee agrees and undertakes that during the employment relationship and for a period of
twelve (12) months following termination of this engagement for whatever reason, Employee will not,
directly or indirectly, including personally or in any business in which Employee may be an
officer, director or shareholder, solicit for employment any person who is employed by the Company,
or any person retained by the Company as a consultant, advisor or the like who is subject to an
undertaking towards the Company to refrain from engagement in activities competing with the
activities of the Company (for purposes hereof, a “Consultant”), or was retained as an employee or
a Consultant during the six months preceding termination of Employee’s employment with the Company.

 

 

 

Reasonableness of Protective Covenants

14. Insofar as the protective covenants set forth in this Schedule are concerned, Employee
specifically acknowledges, stipulates and agrees as follows: (i) the protective covenants are
reasonable and necessary to protect the goodwill, property and Proprietary Information of the
Company, and the operations and business of the Company; and (ii) the time duration of the
protective covenants is reasonable and necessary to protect the goodwill and the operations and
business of Company, and does not impose a greater restrain than is necessary to protect the
goodwill or other business interests of the
Company. Nevertheless, if any of the restrictions set forth in this Schedule is found by a court
having jurisdiction to be unreasonable or overly-broad as to geographic area, scope or time or to
be otherwise unenforceable, the parties hereto intend for the restrictions set forth in this
Schedule to be reformed, modified and redefined by such court so as to be reasonable and
enforceable and, as so modified by such court, to be fully enforced.

Remedies for Breach

15. Employee acknowledges that the legal remedies for breach of the provisions of this Schedule may
be found inadequate and therefore agrees that, in addition to all of the remedies available to
Company in the event of a breach or a threatened breach of any of such provisions, the Company may
also, in addition to any other remedies which may be available under applicable law, obtain
temporary, preliminary and permanent injunctions against any and all such actions.

Intent of Parties

16. Employee recognizes and agrees: (i) that this Schedule is necessary and essential to protect
the business of Company and to realize and derive all the benefits, rights and expectations of
conducting Company’s business; (ii) that the area and duration of the protective covenants
contained herein are in all things reasonable; and (iii) that good and valuable consideration
exists under the Agreement, for Employee’s agreement to be bound by the provisions of this
Schedule.

	 	 	 	 
	TopSpin Medical (Israel) Ltd.

	 	Eldad Yehieli
	 
		 	 
	By: 	/s/ Avi Molcho

	 	/s/ Eldad Yehieli
	 	 

	 	 
	 
	 Avi Molcho	 	 
	 
	Title: Director	 	 

 

 

 

Schedule B

GENERAL APPROVAL REGARDING PAYMENTS BY EMPLOYERS TO A PENSION FUND AND INSURANCE FUND IN LIEU OF
SEVERANCE PAY

By virtue of my power under section 14 of the Severance Pay Law, 5723-1963 (hereinafter: the
“Law”), I certify that payments made by an employer commencing from the date of the publication of
this approval publication for his employee to a comprehensive pension benefit fund that is not an
insurance fund within the meaning thereof in the Income Tax (Rules for the Approval and Conduct of
Benefit Funds) Regulations, 5724-1964 (hereinafter: the “Pension Fund”) or to managers insurance
including the possibility of an insurance pension fund as aforesaid (hereinafter: the “Insurance
Fund), including payments made by him by a combination of payments to a Pension Fund and an
Insurance Fund (hereinafter: the “Employer’s Payments), shall be made in lieu of the severance pay
due to the said employee in respect of the salary from which the said payments were made and for
the period they were paid (hereinafter: the “Exempt Salary”), provided that all the following
conditions are fulfilled:

(1) The Employer’s Payments -

	 	(a)	 	to the Pension Fund are not less than 141/3% of the Exempt Salary or 12% of the
Exempt Salary if the employer pays for his employee in addition thereto also payments
to supplement severance pay to a benefit fund for severance pay or to an Insurance Fund
in the employee’s name in an amount of 21/3% of the Exempt Salary. In the event the
employer has not paid an addition to the said 12%, his payments shall be only in lieu
of 72% of the employee’s severance pay;

	 
	 	(b)	 	to the Insurance Fund are not less than one of the following:

	 	(1)	 	131/3% of the Exempt Salary, if the employer pays for his
employee in addition thereto also payments to secure monthly income in the
event of disability, in a plan approved by the Commissioner of the Capital
Market, Insurance and Savings Department of the Ministry of Finance, in an
amount required to secure at least 75% of the Exempt Salary or in an amount of
21/2% of the Exempt Salary, the lower of the two (hereinafter: “Disability
Insurance”);

	 
	 	(2)	 	11% of the Exempt Salary, if the employer paid, in addition, a
payment to the Disability Insurance, and in such case the Employer’s Payments
shall only replace 72% of the Employee’s severance pay; In the event the
employer has paid in addition to the aforegoing payments to supplement
severance pay to a benefit fund for severance pay or to an Insurance Fund in
the employee’s name in an amount of 21/3% of the Exempt Salary, the Employer’s
Payments shall replace 100% of the employee’s severance pay.

(2) No later than three months from the commencement of the Employer’s Payments, a written
agreement is executed between the employer and the employee in which -

	 	(a)	 	the employee has agreed to the arrangement pursuant to this approval in a text
specifying the Employer’s Payments, the Pension Fund and Insurance Fund, as the case
may be; the said agreement shall also include the text of this approval;

	 
	 	(b)	 	the employer waives in advance any right which it may have to a refund of
monies from his payments, unless the employee has withdrawn monies from the Pension
Fund or Insurance Fund other than by reason of an entitling event; in such regard
“Entitling Event” means death, disability or retirement at after the age of 60.

(3) This approval is not such as to derogate from the employee’s right to severance pay pursuant to
any law, collective agreement, extension order or employment agreement, in respect of salary over
and above the Exempt Salary.

June 9, 1998.Exhibit 10.4

EXHIBIT 10.4

TopSpin Medical, Inc.

INDEMNIFICATION AGREEMENT

This INDEMNIFICATION AGREEMENT (the “Agreement”) is made as of                     , 2009 by and between
TopSpin Medical, Inc., a Delaware corporation (the “Company”), and                      (“Indemnitee”).

	 	 	 
	WHEREAS,

	 	The Company desires to attract and retain qualified directors,
officers, employees and other agents (hereinafter collectively
“Office Holders”, and individually “Office Holder”), and to
provide them with protection against liability and expenses
incurred while acting in that capacity;
	 
	 	 
	WHEREAS,

	 	The Amended and Restated Certificate of Incorporation of the
Company (the “Certificate”) and the Amended and Restated Bylaws
of the Company (the “Bylaws”) contain provisions for indemnifying
Office Holders of the Company, and the Bylaws and Delaware law
contemplate that separate contracts may be entered into between
the Company and its Office Holders with respect to their
indemnification by the Company, which contracts may provide
greater protection than is afforded by the Certificate and
Bylaws;
	 
	 	 
	WHEREAS,

	 	The Company understands that Indemnitee has reservations about
serving or continuing to serve the Company without adequate
protection against personal liability arising from such service,
and that it is also of critical importance to Indemnitee that
adequate provision be made for advancing costs and expenses of
legal defense; and
	 
	 	 
	WHEREAS,

	 	The Board of Directors of the Company has approved as being in
the best interests of the Company indemnity contracts
substantially in the form of this Agreement for directors and
officers of the Company and its subsidiaries and for certain
other employees and agents of the Company designated by the Board
of Directors.

NOW, THEREFORE, in order to induce Indemnitee to serve or to continue to serve as an Office Holder
of the Company, and in consideration of Indemnitee’s service to the Company, the parties agree as
follows:

1. Contractual Indemnity. In addition to the indemnification provisions of the Bylaws, the
Company hereby agrees, subject to the limitations of Sections 2 and 5 hereof:

1.1. To indemnify, defend and hold Indemnitee harmless to the greatest extent possible under
applicable law from and against any and all judgments, fines, penalties, amounts paid in settlement
and any other amounts reasonably incurred or suffered by Indemnitee (including attorneys’ fees) in
connection with any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, including an action by or in the right of the Company,
to which Indemnitee is, was or at any time becomes a party, or is threatened to be made a party, by
reason of the fact that Indemnitee is, was or at any time becomes an Office Holder of the Company
or is or was serving or at any time serves at the request of the Company as an Office Holder of
another corporation, partnership, joint venture, trust or other enterprise (collectively referred
to hereafter as a “Claim”), whether or not arising prior to the date of this Agreement.

 

 

 

1.2. To pay any and all expenses reasonably incurred by Indemnitee in defending any Claim
or Claims (including reasonable attorneys’ fees and other reasonable costs of investigation and
defense), as the same are incurred and in advance of the final disposition of any such Claim or
Claims, upon receipt of an undertaking by or on behalf of Indemnitee to reimburse such amounts if
it shall be ultimately determined that Indemnitee: (i) is not entitled to be indemnified by the
Company under this Agreement, and (ii) is not entitled to be indemnified by the Company under the
Certificate or the Bylaws.

The termination of any action or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that:
(i) Indemnitee did not act in good faith and in a manner which Indemnitee reasonably believed to be
in the best interests of the Company, or (ii) with respect to any criminal action or proceeding,
Indemnitee had reasonable cause to believe that Indemnitee’s conduct was unlawful.

2. Limitations on Contractual Indemnity. Indemnitee shall not be entitled to
indemnification or advancement of expenses under Section 1:

2.1. if a court of competent jurisdiction, by final judgment or decree, shall determine that (i)
the Claim or Claims in respect of which indemnity is sought arise from Indemnitee’s fraudulent,
dishonest or willful misconduct, or (ii) such indemnity is not permitted under applicable law; or

2.2. on account of any suit in which judgment is rendered for an accounting of profits made from
the purchase or sale by Indemnitee of securities of the Company in violation of the provisions of
Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar provisions
of any federal, state or local statutory law; or

2.3. for any acts or omissions or transactions from which an Office Holder may not be indemnified
under the Delaware General Corporation Law; or

2.4. with respect to proceedings or claims initiated or brought voluntarily by Indemnitee and not
by way of defense, except (i) with respect to proceedings brought in good faith to establish or
enforce a right to indemnification under this Agreement or any other statute or law, or (ii) at the
Company’s discretion, in specific cases if the Board of Directors of the Company has approved the
initiation or bringing of such suit; or

2.5. for expenses or liabilities of any type whatsoever (including, but not limited to, judgments,
fines, ERISA excise taxes or penalties, and amounts paid in settlement) which have been paid
directly to Indemnitee by an insurance carrier under a policy of directors’ and officers’ liability
insurance maintained by the Company; or

2.6. on account of any suit brought against Indemnitee for misuse or misappropriation of non public
information, or otherwise involving Indemnitee’s status as an “insider” of the Company, in
connection with any purchase or sale by Indemnitee of securities of the Company.

3. Continuation of Contractual Indemnity. Subject to the termination provisions of Section
11, all agreements and obligations of the Company contained herein shall continue for so long as
Indemnitee shall be subject to any possible action, suit, proceeding or other assertion of a Claim
or Claims.

4. Expenses; Indemnification Procedure. The Company shall advance all expenses incurred by
Indemnitee in connection with the investigation, defense, settlement or appeal of any civil or
criminal action or proceeding referenced in Section 1 hereof (but not amounts actually paid in
settlement of any such action or proceeding). Indemnitee hereby undertakes to repay such amounts
advanced if, and to the extent that, it shall ultimately be determined that Indemnitee is not
entitled to be indemnified by the Company as authorized hereby. The advances to be made hereunder
shall be paid by the Company to Indemnitee within twenty (20) days following delivery of a written
request therefor by Indemnitee to the Company.

 

 

 

 5. Notification and Defense of Claim. If any action, suit, proceeding or other Claim is
brought
against Indemnitee in respect of which indemnity may be sought under this Agreement:

5.1. Indemnitee will promptly notify the Company in writing of the commencement thereof, and the
Company and any other indemnifying party similarly notified will be entitled to participate therein
at its own expense or to assume the defense thereof and to employ counsel reasonably satisfactory
to Indemnitee. Notice to the Company shall be directed to the Chief Executive Officer of the
Company at the address shown on the signature page of this Agreement (or such other address as the
Company shall designate in writing to Indemnitee). Notice shall be deemed received three (3)
business days after the date postmarked if sent by domestic certified or registered mail, properly
addressed; otherwise notice shall be deemed received when such notice shall actually be received by
the Company. Indemnitee shall have the right to employ its own counsel in connection with any such
Claim and to participate in the defense thereof, but the fees and expenses of such counsel shall be
at the expense of Indemnitee unless (i) the Company shall not have assumed the defense of the Claim
and employed counsel for such defense, or (ii) the named parties to any such action (including any
impleaded parties) include both Indemnitee and the Company, and Indemnitee shall have reasonably
concluded that joint representation is inappropriate under applicable standards of professional
conduct due to a material conflict of interest between Indemnitee and the Company, in either of
which events the reasonable fees and expenses of such counsel to the Indemnitee shall be borne by
the Company upon delivery to the Company of the undertaking referred to in Section 1.2. However,
in no event will the Company be obligated to pay the fees or expenses of more than one firm of
attorneys representing Indemnitee and any other Office Holders of the Company in connection with
any one Claim or separate but substantially similar or related Claims in the same jurisdiction
arising out of the same general allegations or circumstances.

5.2. The Company shall not be liable to indemnify Indemnitee for any amounts paid in settlement of
any Claim effected without the Company’s written consent, and the Company shall not settle any
Claim in a manner which would impose any penalty or limitation on Indemnitee without Indemnitee’s
written consent; provided, however, that neither the Company nor Indemnitee will unreasonably
withhold its consent to any proposed settlement and, provided further, that if a Claim is settled
by the Indemnitee with the Company’s written consent, or if there be a final judgment or decree for
the plaintiff in connection with the Claim by a court of competent jurisdiction, the Company shall
indemnify and hold harmless Indemnitee from and against any and all losses, costs, expenses and
liabilities incurred by reason of such settlement or judgment.

5.3. Indemnitee shall give the Company such information and cooperation as it may reasonably
require and as shall be within Indemnitee’s power.

5.4. Any indemnification provided for in Section 1 shall be made no later than forty-five (45) days
after receipt of the written request of Indemnitee. If a Claim under this Agreement, under any
statute, or under any provision of the Certificate or Bylaws providing for indemnification, is not
paid in full by the Company within forty-five (45) days after a written request for payment thereof
has first been received by the Company, Indemnitee may, but need not, at any time thereafter bring
an action against the Company to recover the unpaid amount of the claim and, subject to Section 13
of this Agreement, Indemnitee shall also be entitled to be reimbursed for the expenses (including
attorneys’ fees) of bringing such action. It shall be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in connection with any action or proceeding
in advance of its final disposition) that Indemnitee has not met the standards of conduct which
make it permissible under applicable law for the Company to indemnify Indemnitee for the amount
claimed but the burden of proving such defense shall be on the Company, and Indemnitee shall be
entitled to receive interim payments of expenses pursuant to Section 4 unless and until such
defense may be finally adjudicated by court order or judgment from which no further right of appeal
exists. It is the parties’ intention that if the Company contests Indemnitee’s right to
indemnification, the question of Indemnitee’s right to indemnification shall be for the court to
decide, and neither the failure of the Company (including its Board of Directors, any committee or
subgroup of the Board of Directors, independent legal counsel, or its stockholders) to have made a
determination that indemnification of Indemnitee is proper in the circumstances because Indemnitee
has
met the applicable standard of conduct required by applicable law, nor an actual determination by
the Company (including its Board of Directors, any committee or subgroup of the Board of Directors,
independent legal counsel, or its stockholders) that Indemnitee has not met such applicable
standard of conduct, shall create a presumption that Indemnitee has or has not met the applicable
standard of conduct.

 

 

 

5.5. If, at the time of the receipt of a notice of a Claim, the Company has director and officer
liability insurance in effect, the Company shall give prompt notice of the commencement of such
proceeding to the insurers in accordance with the procedures set forth in the respective policies.
The Company shall thereafter take all necessary or desirable action to cause such insurers to pay,
on behalf of the Indemnitee, all amounts payable as a result of such proceeding in accordance with
the terms of such policies.

6. Scope. Notwithstanding any other provision of this Agreement, the Company hereby agrees
to indemnify the Indemnitee against any Claim to the fullest extent permitted by law,
notwithstanding that such indemnification is not specifically authorized by the other provisions of
this Agreement, the Certificate, the Bylaws or by statute. In the event of any change, after the
date of this Agreement, in any applicable law, statute or rule which expands the right of a
Delaware corporation to indemnify its Office Holders, such changes shall be, ipso facto, within the
purview of Indemnitee’s rights and Company’s obligations, under this Agreement. In the event of
any change in any applicable law, statute, or rule which narrows the right of a Delaware
corporation to indemnify its Office Holders, such changes, to the extent not otherwise required by
applicable law to be applied to this Agreement, shall have no effect on this Agreement or the
parties’ rights and obligations hereunder.

7. Partial Indemnification. If Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for some or a portion of the expenses, judgments, fines
or penalties actually or reasonably incurred by him in the investigation, defense, appeal or
settlement of any civil or criminal action or proceeding, but not, however, for the total amount
thereof, the Company shall nevertheless indemnify Indemnitee for the portion of such expenses,
judgments, fines or penalties to which Indemnitee is entitled.

8. Public Policy. Both the Company and Indemnitee acknowledge that in certain instances,
Federal law or applicable public policy may prohibit the Company from indemnifying its Office
Holders under this Agreement or otherwise. Indemnitee understands and acknowledges that the
Company has undertaken or may be required in the future to undertake with the Securities and
Exchange Commission to submit the question of indemnification to a court in certain circumstances
for a determination of the Company’s right under public policy to indemnify Indemnitee.

9. Insurance. Although the Company may from time to time maintain insurance for the
purpose of indemnifying Indemnitee and other Office Holders of the Company against personal
liability, including costs of legal defense, nothing in this Agreement shall obligate the Company
to do so.

10. No Restrictions. The rights and remedies of Indemnitee under this Agreement shall not
be deemed to exclude or impair any other rights or remedies to which Indemnitee may be entitled
under the Certificate or Bylaws, or under any other agreement, provision of law or otherwise, nor
shall anything contained herein restrict the right of the Company to indemnify Indemnitee in any
proper case even though not specifically provided for in this Agreement, nor shall anything
contained herein restrict Indemnitee’s right to contribution as may be available under applicable
law.

11. Termination. The Company may terminate this Agreement at any time upon 90 days written
notice, but any such termination will not affect Claims relating to events occurring prior to the
effective date of termination.

 

 

 

12. Severability. Each of the provisions of this Agreement is a separate and distinct
agreement and
independent of the others, so that if any provision hereof shall be held to be invalid or
unenforceable for any reason, such invalidity or unenforceability shall not affect the validity or
enforceability of the other provisions hereof.

13. Attorneys’ Fees. In the event of any litigation or other action or proceeding to
enforce or interpret this Agreement, the prevailing party as determined by the court shall be
entitled to an award of its reasonable attorneys’ fees and other costs, in addition to such relief
as may be awarded by a court or other tribunal.

14. Further Assurances. The parties will do, execute and deliver, or will cause to be
done, executed and delivered, all such further acts, documents and things as may be reasonably
required for the purpose of giving effect to this Agreement and the transactions contemplated
hereby.

15. Acknowledgment. The Company expressly acknowledges that it has entered into this
Agreement and assumed the obligations imposed on the Company hereunder in order to induce
Indemnitee to serve or to continue to serve as an Office Holder of the Company, and acknowledges
that Indemnitee is relying on this Agreement in serving or continuing to serve in such capacity.

16. Construction of Certain Phrases.

16.1. “Company”: For purposes of this Agreement, references to the “Company” shall also include,
in addition to the resulting corporation in any consolidation or merger to which TopSpin Medical,
Inc. is a party, any constituent corporation (including any constituent of a constituent) absorbed
in consolidation or merger which, if its separate existence had continued, would have had power and
authority to indemnify its Office Holders, so that if Indemnitee is or was an Office Holder of such
constituent corporation, or is or was serving at the request of such constituent corporation as an
Office Holder of another corporation, partnership, joint venture, trust or other enterprise,
Indemnitee shall stand in the same position under the provisions of this Agreement with respect to
the resulting or surviving corporation as Indemnitee would have with respect to such constituent
corporation if its separate existence had continued.

16.2. Benefit Plans: References to “fines” contained in this Agreement shall include any excise
taxes assessed on Indemnitee with respect to an employee benefit plan; and references to “serving
at the request of the Company” shall include any service as an Office Holder of the Company which
imposes duties on, or involves services by, such Office Holder with respect to an employee benefit
plan, its participants, or beneficiaries.

17. Notice. All notices, requests, demands and other communications under this Agreement
shall be in writing and shall be deemed duly given (i) if delivered by hand and receipted for by
the party addressee, on the date of such receipt, or (ii) if mailed by domestic certified or
registered mail with postage prepaid, on the third business day after the date postmarked.
Addresses for notice to either party are as shown on the signature page of this Agreement, or as
subsequently modified by written notice.

18. Governing Law; Binding Effect; Amendment.

18.1. This Agreement shall be interpreted and enforced in accordance with the laws of the State of
Delaware applicable to contracts entered into in Delaware and any dispute arising from or in
connection with this Agreement shall be submitted to the sole and exclusive jurisdiction of the
competent court in the State of New York.

18.2. This Agreement shall be binding upon Indemnitee and the Company, their successors and
assigns, and shall inure to the benefit of Indemnitee, his heirs, personal representatives and
assigns and to the benefit of the Company, its successors and assigns.

18.3. No amendment, modification, termination or cancellation of this Agreement shall be effective
unless in writing signed by both parties hereto.

 

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first
above written.

“Company”

TopSpin Medical, Inc.

a Delaware corporation

	 	 	 	 	 
	By: 
	 	 	 	 
	 

	 

	 	 
	 	Name: 
	 	 	 
	 

	 	 

	 	 
	 	Title:
	 	 	 
	 

	 	 

	 	 

“Indemnitee”

	 	 	 
	 

(Signature of Indemnitee)

	 	 
	 
	 	 
	 

(Social Security Number)

	 	 

	 	 	 	 	 
	Address:

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