Document:

exv10w3

Exhibit 10.3

Mr. John Culver

17087 SE
65th Place

 Bellevue,WA 98006

Dear John:

Thank you for your contributions to the Company’s success and congratulations
on your promotion to president, Starbucks Coffee International, effective
December 1, 2009.

Here are the specifics of your offer:

You will be paid bi-weekly at a base salary that annualizes to $525,000.

Executive Management Bonus Plan

You will continue to be eligible to participate in the Executive Management Bonus
Plan (EMBP) for fiscal year 2010. Your bonus target will be 75% of your eligible
base salary. Payout will be based on achievement of Company, business
unit/department, and individual objectives.

For more information about the bonus plan, or a copy of the plan document, please
talk to your Partner Resources generalist. Starbucks reserves the right to
review, change, amend, or cancel incentive plans at any time.

Stock Option Grant

You will be granted stock options to purchase additional shares of Starbucks
common stock with an economic value of $400,000 USD under the Key Employee
Sub-Plan to the 2005 Long-Term Equity Incentive Plan. The exercise price of the
options will be the regular trading session closing price of a share of Starbucks
stock on the date of the grant. The grant date of your options will be after you
assume your new role and otherwise effective in accordance with the Company’s
equity grant timing policy. The options will be non-qualified and will vest in
equal installments over a period of four (4) years, beginning on the first
anniversary date of the grant, subject to your continued employment.

As a senior executive the Company’s executive stock ownership guidelines will
apply to you. The guidelines require covered executives to achieve a minimum
investment in Starbucks stock within five years. The minimum investment for
president, SCI is $2,000,000. A copy of the guidelines will be provided to you.

 

 

John Culver

Page 2

Management Deferred Compensation Plan

You will continue to be eligible to participate in the Management Deferred Compensation Plan (MDCP)
because you are on our U.S. payroll and meet the eligibility criteria. The MDCP provides eligible
partners with the opportunity to save on a tax-deferred basis. If you have questions about the
MDCP, please contact the Starbucks Savings Team at savings@starbucks.com. You may obtain
more information about the MDCP on the Savings link at http://LifeAt.sbux.com.

Executive Life Insurance

As an executive, you and your family have a greater exposure to financial loss resulting from your
death. You will continue to receive partner life coverage equal to three times your annualized base
pay, paid for by Starbucks. You may purchase up to an additional two times your annualized base pay
(for a total of five times pay) to a maximum life insurance benefit of $2,000,000.

Executive Physical Exam

You will continue to be eligible to participate in Starbucks executive physical program. If you
have questions about this physical, please contact Kelley Hardin at (206) 318-7756.

Benefits

To understand how your new role may affect your benefits, please contact the Starbucks Partner
Contact Center at 1-866-504-7368 or your Partner Resources generalist. Please note that although it
is Starbucks intent to continue these plans, they may be amended or terminated at any time without
notice.

Insider Trading

As an executive, with access to sensitive business and financial information about the Company, you
will continue to be prohibited from trading Starbucks securities (or, in some circumstances, the
securities of companies doing business with Starbucks) from time to time in accordance with the
Company’s Insider Trading Policy and Blackout Procedures.

Coffee Hedging

As an officer of the Company, a member of the Coffee Management Group, or a partner involved in
coffee procurement and trading on behalf of the Company, you are prohibited from trading in coffee
commodity futures for your own account. If you have further questions, please contact your Partner
Resources generalist.

In your position, you will remain employed ‘at will,’ meaning that either you or your employer can
end the employment relationship at any time, for any reason not prohibited by law.

 

 

John Culver

Page 3

On behalf of the entire team, I wish you the best in your new role and look forward to your
continued success.

Warm regards,

Howard Schultz

chairman, president and chief executive officer

			
	cc:	 	partner file

Stock Administration (S-HR3)
Kalen Holmes

I accept employment with Starbucks Corporation, and its wholly-owned subsidiaries, according to the
terms set forth above.

	 	 	 	 	 
	/s/ John Culver

	 	 	 	Nov. 30, 2009
	 

	 	 	 	 
	John Culver

	 	 	 	Date

Please sign and return one copy of this letter to Kalen Holmes.Exhibit 10.1

EXHIBIT 10.1

Agreement

Entered and signed in Tel Aviv on 27 of January, 2010

	 	 	 
	Between:

	 	Medgenesis Partners Ltd.
	 

	 	Private Company 513054064
	 

	 	From 27 Lechi St., Bnei Brak
	 

	 	(Hereinafter: “The Investor”)
	 
	 	 
	 

	 	— On the one part —
	 
	 	 
	And:

	 	TopSpin Medical Inc.
	 

	 	A foreign company incorporated under the laws of the State of Delaware
	 

	 	From 65 Rothschild St. (C/O DDG), Tel Aviv
	 

	 	(Hereinafter: “The Company”)
	 
	 	 
	 

	 	— On the second part —
	 
	 	 
	Whereas

	 	the Company is a foreign company incorporated under the laws
of the State of Delaware and its securities are traded in the
Tel Aviv Stock Exchange (hereinafter: “Stock Exchange”) and
moreover, the Company is also subject to the United States
Securities Act and in addition it reports to the Securities
and Exchange Commission (hereinafter: “SEC”);
	 
	 	 
	And whereas

	 	the Investor is interested in investing in the Company and the
Company is interested in the Investor investing in it, in
exchange for allocation of shares and options in the Company,
all according to the conditions of this Agreement;
	 
	 	 
	And whereas

	 	Dr. Ascher Shmulewits, the controlling shareholder in the
Investor (hereinafter: “Asher”) is an interested party in the
Company holding 120,000,0000 ordinary shares of US Dollar
0.001 of the Company (hereinafter: “Ordinary Shares” or “The
Shares”) as well as 58,064,516 options allocated to Asher by
the Company in March 2009, whose securities number in the
Stock Exchange is 1113430 (hereinafter: “Old Options”);
	 
	 	 
	And whereas

	 	the parties wish to arrange the relations between them.

Now therefore it is stipulated, declared and agreed between the parties as follows:

Preamble and interpretation

	1.	 	The preamble to this Agreement is an integral part thereof.

	 
	2.	 	The paragraphs headings are intended for convenience only and will not be used to interpret
the Agreement.

 

 

 

Company’s declarations and obligations

	3.	 	The Company hereby declares and undertakes as follows:

	 	(a)	 	That Appendix A attached to this Agreement, fully specifies, as of the
date of signing this Agreement, the Company’s issued and outstanding capital, including
by full dilution as a result of exercising convertible securities that the Company
issued until the date of signing this Agreement, including the addition of “allocation
 shares” and “allocated options” (as defined below) to be allocated to the Investor on
the date of completion.

	 	(b)	 	That according to the provisions of this Agreement, the “allocation shares” and
“allocated options” (as defined below) will pass on to the Investor being clean and free
of any third party rights whatsoever.

	 	(c)	 	That it has yet to receive all the necessary approvals for engaging in this
Agreement, except for the Board of Directors’ confirmation that was received prior to
signing this Agreement and that its engagement in this Agreement is subject to receiving
the remaining certificates required according to the law (including the foreign law that
applies to the Company).

	 	(d)	 	This Agreement and fulfilling the Company’s obligations according to it do not
oppose and/or contradict its incorporation certificates and/or any agreement to which it
is a party or any other obligation imposed on it, whether by virtue of an agreement or
whether by virtue of the law, and there is no prevention from its engagement in this
Agreement and application thereof (except the certificates required for its execution
according to the law).

	 	(e)	 	That during the period starting from the date of signing this Agreement and as
long as the “allocation shares” (as defined below) have not been allocated to investors
or this Agreement expired due to non-fulfillment of any of the contingent terms until
the end of the period determined for fulfilling such terms and in order to protect the
Investor’s rights during such period, the Company will refrain from distributing any
type of dividend and/or bonus shares and/or rights.

	 	(f)	 	On the date of signing this Agreement, the Company does not comply with all the
preservation rules required according to the articles and directives of the Stock
Exchange, yet the Company was not given notice by the Stock Exchange that proceedings
were initiated to stop any trade of the Company’s Shares in the Stock Exchange and/or
delete the Company’s Shares from trade in the Stock Exchange.

	 	(g)	 	The Company submitted all notices and material reports that it was obligated to
submit to the Stock Exchange and the Securities Authority, when required, and all the
notices and reports submitted as said are complete and accurate as required.

	 	(h)	 	There is no obligation to allocate Shares in the Company and no person or
corporation is entitled to any right to purchase Company Shares, expect as specified in
section a’ above and except according to this Agreement.

	 	(i)	 	The Company’s financial statements published in Israel, were prepared according
to the Securities Regulations (preparation of annual financial statements) 5753-1993,
Securities Regulations (periodic and immediate reports) 5730-1970 and the conventional
accounting rules, implemented in consistence to the previous years, unless indicated
otherwise in the said statements, as said for the period to which they refer and as
known on the date of signing them. The details that appear in the Company’s statements
duly reflect, according to conventional accounting rules, from all material aspects, the
financial status of the Company, the results of its
activity, changes in its equity capital and the cash flow for the period to which the
statements refer and as known on the date of signing them.

 

 

 

	 	(j)	 	No event occurred after the date of the Company’s last statements, which
adversely affects or may adversely affect the Company’s business, the results of its
activity, its assets and rights. Furthermore, after the date of the Company’s last
statements, the Company did not perform any action, directly or indirectly, which is not
within its regular course of business, including the Company did not reach any decision
to change its issued capital and/or the composition thereof, distribute dividends, sell
a substantial part of its business, purchase substantial assets, purchase corporations
and/or rights in corporations, reached a due creditors’ composition or any type thereof,
all except as specified in this Agreement.

	 	(k)	 	As of the date of signing this Agreement and the date of completion, the Company
submitted or will submit, as applicable, all the reports required from a “reporting
corporation”, as defined in the Securities Act, to the Securities Authority, and the
information included in each one of the said reports submitted by the Company was or
will be according to the requirements of the law, at the time of submission.

	 	(l)	 	Except as specified in the Company’s statements published for the public, the
Company is not a party, whether as a plaintiff and whether as a respondent, to any
material legal and/or arbitration proceedings and there are no orders, injunctions,
instructions by any duly competent authority or any judicial decisions against the
Company and there is no demand and/or warning of a claim or other material legal
proceeding or any trial as said against the Company and/or against anyone on its behalf
in his capacity of an officer in the Company. To the Company’s best knowledge, no person
and/or body have any intention and/or grounds to sue the Company and there is no
investigation conducted against the Company.

Investor’s declarations and obligations

	4.	 	The Investor hereby declares and undertakes as follows:

	 	(a)	 	That he has checked the information needed in order to make his decision to
engage in this Agreement with the Company, received all the information he needed from
the Company and the results of his examination are to his satisfaction.

	 	(b)	 	That he invests in companies similar to the Company and knows and is familiar
with the risk entailed in an investment of this sort.

	 	(c)	 	That he is purchasing the “allocation shares” and “exercise shares” (as defined
in section 5 below) for himself, for purpose of investment and not in trust for a third
party and that he has no intention of selling the Shares allocated according to this
Agreement immediately after completing the transaction.

	 	(d)	 	That he has received the necessary approvals for engaging in this Agreement.

	 	(e)	 	This Agreement and fulfilling the Investor’s obligations according thereto do not
oppose and/or contradict any Agreement to which he is a party or any other obligation
imposed on him, whether by virtue of an agreement and whether by virtue of the law, and
there is no prevention, legal or other, to his engagement in this Agreement and
implementation thereof.

	 	(f)	 	He knows that the restrictions according to both the Securities Law, 5728-1968
(hereinafter: “Securities Law”) and the United States Securities Act and particularly
Rule 144 of the United States Securities Act of 1933 (hereinafter:
“Rule 144”) as specified in sections 20-23 below will apply to sale of the
“allocation shares”, “allocated options” and exercise shares (as defined below).

 

 

 

	 	(g)	 	The Investor knows that the “allocation shares” and the “exercise shares” will
not be registered for trade in the Israeli Stock Exchange and will not be registered in
the Company’s name for the Company’s records, so long as registration of the Shares was
not done according to the United States Securities Act of 1933 (hereinafter: “United
States Securities Act”) and the necessary approval of the SEC was not received
(hereinafter: “Registration in the USA”). The Investor knows that the Company will not
perform the Registration in the USA and does not undertake to do so unless subject to
the said in section 24 below. In addition, as long as the Registration in the USA has
not been done, the “allocation shares” and “exercise shares” will not be registered for
trade in the Israeli Stock Exchange and in the Company’s name for the Company’s records.

	 	(h)	 	The Investor hereby declares that he is a “US Person” and complies with the
definition of an “Accredited Investor” as such terms are defined in the United States
Securities Act.

	 	(i)	 	The Investor hereby declares that there is no agreement between him (including
the controlling shareholder therein, Asher) and another shareholder in the Company,
whether in writing and whether verbally regarding the purchase or sale of Company
securities or any voting rights therein, and there will be no such agreement until the
date of completion.

	 	(j)	 	The Investor undertakes that if he shall transfer any of his Shares in the
Company, starting from the date of signing this Agreement until the date of increasing
the capital or due termination of this Agreement, whichever is earlier, the Shares will
be transferred subject to an irrevocable obligation of the receiver to vote in favor of
increasing the Company’s registered capital and transferring the Shares he received
subject to the aforesaid obligation and so on. The Investor undertakes to ensure that
the said will respectively apply to Asher’s holdings in Company Shares.

	 	(k)	 	The Investor declares that he knows that the Company’s Board of Directors
approved an allocation of 10% of the Company’s issued capital (fully diluted) on the
date of allocation, to the chairman of the Board, Mr. Fufi Fatal, with the allocation
being subject, inter alia, to execution of an investment in the Company by a third party
and increasing the Company’s registered capital (hereinafter: “Terms for Allocation to
the Chairman”). The Investor knows that completing this Agreement constitutes an
execution of an investment by a third party and can lead to fulfilling the Terms for
Allocation to the Chairman and in case of completing the Terms for Allocation to the
Chairman, 118,100,012 options of the Company that can be exercised into 118,100,012
Company Shares will be allocated to Mr. Fufi Fatal (constituting 9.1% of the issued
capital, fully diluted). It is hereby clarified that the said in this section will not
constitute a right and/or agreement in favor of any third party, whereas for such
matter, Mr. Fatal will be considered a third party.

	 	(l)	 	The Investor undertakes that any information about the Company submitted to him
by the Company during the negotiations for engaging in this Agreement, which was not
published by the Company to the public (hereinafter: “Information”) if and as such
Information was submitted, will constitute privileged and confidential Information, and
he undertakes not to disclose it to any third party subject to the obligations that
apply to him by virtue of the law, if such apply.

 

 

 

Description of the transaction 

	5.	 	In exchange for (a) payment in US Dollars 211,673 (hereinafter: “Allocation
Consideration”) by the Investor and (b) transfer of the Old Options to the Company (as
specified in section 8 (c) below), the Company will allocate for the Investor
211,672,857 Ordinary Shares of the Company (hereinafter: “Allocation Shares”) as well
as (b) 122,935,610 option warrants not registered for trade and un-assignable (except
transfer to a third party that the Company approves in advance in writing) (hereinafter:
“Investment Options”) convertible into 122,935,610 Ordinary Shares of the Company as
well as (c) 58,064,516 option warrants not registered for trade and un-assignable,
convertible into 58,064,516 Ordinary Shares of the Company (hereinafter: “Substituted
Options”) according to the following terms and dates.

	 	 	The Investment Options and the Substituted Options will hereinafter be referred to together
as: “Allocated Options” and the Company Ordinary Shares claimed as a result of exercising
the Allocated Options will hereinafter be referred to as: “Exercising Shares”.

	6.	 	For the avoidance of doubt it is clarified that the Allocation Shares will be allocated on
the date of completion, whereas the Allocated Options will only be allocated after and subject
to confirmation of increasing the Company’s registered capital as specified in section 15
below.

	7.	 	Cancelled.

Contingent terms for completing the transaction 

	8.	 	Subject to fulfilling all the terms specified below (hereinafter: “Contingent Terms”), the
Allocation Shares will be allocated to the Investor within 2 business days from the date of
fulfilling all the Contingent Terms (hereinafter: “Date of Completion”) as specified below:

	 	(a)	 	Certainty was formed regarding the majority required for approving the increase
of the registered capital, by way of the Company obtaining a power of attorney covering
at least 154,899,013 Company Shares authorizing any of the Company’s officers to vote
for the increase of the Company’s registered capital during the general assembly that
the Company will convene for such purpose as well as an obligation by the shareholders
to hold the aforementioned shares for a period to be determined in the power of attorney
[so that together with Asher’s holdings and the Investor’s holdings in Company shares on
the determining date for the general assembly for increasing the registered capital,
there will be a rate of at least 50% of the Company’s issued and outstanding capital of
the Company in favor of increasing the registered capital] (hereinafter: “Power of
Attorney for Increasing the Registered Capital”).

	 	(b)	 	The Company’s general assembly will approve the allocation to the Investor as a
private offer according to the provisions of section 328 (b) of the Companies Law,
5759-1999, with the objective of awarding the Investor more than 25% of the voting
rights in the Company.

	 	(c)	 	Asher signed the letter transferring the Old Options to the Company without
consideration, including an irrevocable obligation not to demand exercise of the Old
Options (except the options exercised as such were exercised in the interim period).

 

 

 

	 	(d)	 	Receiving the Stock Exchange’s approval for registering the Allocation Shares for
trade therein, in order to receive the Stock Exchange’s approval (hereinafter: “Approval
of the Stock Exchange”).

	 	(e)	 	Receiving the approval of the SEC and/or any other approval required according to
the United States Securities Act, if and as required as said.

Actions on the Date of Completion 

	9.	 	On the Date of Completion, the parties will convene at the offices of Amit Pollack Matalon &
Co. Law Offices at 17 Yitzhak Sadeh St., Tel Aviv (19th floor) and at such time,
all the actions described below will be conducted simultaneously.

	 	(a)	 	The Investor will transfer the Allocation Consideration to the Company, after
offsetting the amounts transferred by the Investor to the Company on account of the
Allocation Consideration until the Date of Completion as specified in section 12 below,
using a bank draft withdrawn in the name of the Company or a bank transfer together with
confirmation of the transfer.

	 	(b)	 	The Company will allocate the Allocation Shares to the Investor, by delivering a
duly signed share certificate in the Investor’s name and registration of the allocation
in the Company’s shareholders’ register.

	 	(c)	 	Asher will sign a transfer deed for the Old Options in favor of the Company,
without consideration, and the options will be nullified.

	 	(d)	 	The Company will deliver a copy of the Stock Exchange’s confirmation for
registering the Allocation Shares for trade therein to the Investor.

Interim period 

	10.	 	Starting from the date of signing this Agreement until the Date of Completion (hereinafter:
“Interim Period”) or due termination of this Agreement, the Investor and Company, as
applicable, will act as follows.

	11.	 	The Investor hereby undertakes to ensure that Asher refrains from transferring the Old
Options to a third party, yet the said will not prevent exercising the Old Options during the
Interim Period. It is hereby clarified, that if Asher will exercise the Old Options during the
Interim Period, then the quantity of Allocated Shares will decrease according to the quantity
of shares allocated in exchange for exercising the Old Options, and the Allocation
Consideration and the quantity of Investment Options will decrease respectively.

	12.	 	The Investor will transfer funds on account of the Allocation Consideration to the Company
according to the following amounts and dates:

	 	(a)	 	On February 1, 2010, the Investor will transfer US Dollars equal to an amount
of NIS 200,000 on the date of transfer, on account of the Allocation Consideration to
the Company (hereinafter: “Payment on Account of the Allocation Consideration”).

 

 

 

	 	(b)	 	It is hereby clarified that if the Contingent Terms according to this
Agreement will not be fulfilled during the period indicated in section 25 below, the
Company will not be obligated to return funds for the Payment on Account of the
Allocation
Consideration to the Investor, unless it acts so that such funds be converted into
Company Shares at a price per Share equaling their par value, yet subject to the
Company’s ability to perform the said allocation to the Investor according to the law
and particularly sections 328 of the Companies Law, 5759-1999. It is clarified that
as part of section 8 (b) above, the Company will request the general assembly’s
approval for the allocation mentioned in this section 12 (c) if the Contingent Terms
are not fulfilled, in order to allow the allocation of the above Shares, in full. If
the general assembly’s approval as said is not obtained, the Company will allocate
the Shares up to the maximum permitted and from time to time, it will allocate more
Shares to the Investor when possible, until allocating all the aforesaid Shares.
Notwithstanding the aforesaid, if the Company will choose to do so based on its
absolute discretion, the Company will be entitled to notify the Investor that the
execution of the said allocation has expired; it will return the aforesaid payments
to the Investor within 45 days from the notice. The said will not obligate the
Company to return the funds to the Investor, even when it does not have the ability
to allocate all the shares required in return for the said funds.

	13.	 	The Company will convene an extraordinary assembly of Company shareholders with the agenda of
approving the allocation of the Allocation Shares and options allocated for the Investor
according to section 328 (b) of the Companies Law, 5759-1999 (hereinafter: “Approval of
General Assembly”).

Activity after Date of Completion 

	14.	 	The Company will provide the Investor with a copy of the immediate report published on the
websites of the Securities Authority and the Stock Exchange regarding the allocation within 2
business days from the Date of Completion.

	15.	 	The Company will convene an extraordinary assembly for a date later than the Date of
Completion, with the agenda of increasing the Company’s registered capital, in a scope to be
determined by the Company before convening the general assembly (hereinafter: “Increasing the
Registered Capital”). The Investor undertakes before the Company, to vote in favor of
Increasing the Registered Capital of the Company and to ensure that Asher also votes for
Increasing the Registered Capital.

Allocating the Allocated Options 

	16.	 	Within 30 days after approval of Increasing the Registered Capital of the Company and
receiving all the other approvals required for performing the allocation (including the
approval of the Stock Exchange for registration of the Exercising Shares for trade), the
Company will allocate the Allocated Options to the Investor, without consideration.

	17.	 	Substituted options 

	 	(a)	 	The substituted options can be exercised into 58,064,516 Ordinary Shares of the
Company (“Exercise Shares”) until February 28, 2013 with the addition of the period from
the Date of Completion until the date of allocating the substituted options.

	 	(b)	 	Each option can be exercised into one Ordinary Share with a par value of (US)
Dollar 0.001 of the Company in exchange for payment in cash equaling the amount for
exercising the Old Options, meaning a total of NIS 0.01 (one agura) (hereinafter:
“Exercise Amount”).

	 	(c)	 	All the remaining terms of the substituted options, including adjustments to the
Exercise Amount, will be identical to the terms of the Old Options, all according to
the specified in section 4 of the agreement between the Company and Asher dated
February 2, 2009, attached to this Agreement as “Appendix B”.

 

 

 

	18.	 	Investment options 

	 	(a)	 	The investment options (hereinafter in this section also: “The Options”) can be
exercised into 122,935,610 Ordinary Shares of the Company (“Exercise Shares”) during a
period of 4 years from the day of allocating the Options (hereinafter: “Option Period”).

	 	(b)	 	Each option can be exercised into one Ordinary Share with a par value of (US)
Dollar 0.001 of the Company in exchange for payment in cash of US Dollar 0.001 (par
value) (hereinafter: “Exercise Amount”). It is clarified that in any case, the Exercise
Amount will not be less than the Share’s par value.

	 	(c)	 	Exercising the Option will be done by delivering notice of exercise, including
the Exercise Amount, to the Company at its registered office. The Company will allocate
the Exercise Shares within 7 business days from receiving the exercise notice.

	 	(d)	 	The Options will expire if they will not be exercised into shares before the end
of the Option Period and the Investor will not have any argument and/or claim regarding
the Options starting from such date.

	 	(e)	 	Any payment of tax, if and as such applies according to the law to the holder of
the option warrant or a shareholder for giving option warrants and/or allocating
Exercise Shares and/or payment of the Exercise Amount, will fully and solely apply to
the Investor.

	 	 	 	Instructions for protecting investors during the Option Period:

	 	(f)	 	Distributing bonus shares — if during the Option Period and before the Investor
exercises the Options, the Company will distribute bonus shares, then immediately after
the determining date in terms of eligibility to participate in the distribution of bonus
 shares, shares in the number and type that the Investor is entitled to receive as bonus
 shares will be added to the Exercise Shares due to the Investor for the Options, just as
if he had exercised all his Options that can be exercised as said on the eve of the
determining date.

	 	 	 	The number of shares to be allocated to the Investor will not increase in case of
offerings (including offerings to interested parties) which do not constitute
distributing bonus shares, but in case of offering rights, the following provisions
will apply.

	 	(g)	 	Offering shares by way of rights — if during the Option Period and before the
Investor exercises the Options, the Company will offer its shareholders securities by
way of rights, then the number of Exercise Shares will be increased according to the
component of the benefit in rights, as expressed in the ratio between the rate of the
Share in the Stock Exchange on the determining date and the base rate of “x rights”.

	 	(h)	 	Changing the Company’s capital structure — subject to the aforesaid, in any case
of a change in the Company’s issued share capital by way of splitting, consolidating or
replacing Shares, a change in the Company’s capital structure or any similar event by
the Company, then the number and type of Shares that can be exercised as a result of
exercising the Options awarded by virtue of this Agreement and the
exercise price, will be relatively adjusted in order to proportionally maintain the
number of Shares and their accrued exercise price.

	 	 	 	For avoidance of all doubt, it is hereby clarified, that in any event, the exercise
price of the Options will not be lower than the total par value of the Allocation
Shares issued to the Investor (except in a case where the Company distributes shares
or bonus shares without consideration).

 

 

 

Assignment of rights and obligations and restrictions on negotiability 

	19.	 	Subject to the law, this Agreement, including all the rights and obligations included
therein, cannot be transferred as long as the transaction has not been completed.
Nevertheless, subject to the Company’s prior written consent, the Investor may divide its
investment with another investor, within the framework of this Agreement, if such other
investor will accept all obligations and rights arising from this Agreement.

	20.	 	The Investor hereby declares that he is familiar with the provisions of the Securities Law,
5728-1968 and the Securities Regulations (details concerning section 15 a to 15 c of the Law)
5760-2000, which apply restrictions on reselling the Allocation Shares, Allocated Options and
Exercise Shares (hereinafter: “Allocated Securities”).

	21.	 	Not to undermine from the said in section 4 above and as long as the Registration in the USA
has not be done, the Investor hereby declares that he knows that restrictions on sale also
apply on the Allocated Securities according to the United States Securities Act, including
according to Rule 144. The restrictions stipulated in Rule 144 usually deal with a blocking
period of 6 months which prevents registration for trade and/or negotiability of the Allocated
Securities in the Stock Exchange (Israel) as well as prohibiting the sale of the Allocated
Securities outside the stock exchange within the borders of the USA or to a US Person (as such
term is defined in the United States Securities Act).

Furthermore and as long as the Registration in the USA has not been done, restrictions
according to the United States Securities Act will apply to the Investor by virtue of him
being an Affiliate of the Company (including but not only, whomever is a director, officer
and shareholder holding more than 10% of the Company’s Share capital), which prescribe
restrictions that obligate the Investor to perform each sale through a broker and in
addition, the quantity of Shares that the Investor will be entitled to sell during every
three months (after the blocking period according to the US law of 12 months being an
Affiliate) will not exceed the highest of: (1) one percent (1%) of the Company’s issued
Shares; or (2) one percent (1%) of the average scope of weekly trade of the Company’s
Shares in the Stock Exchange.

	22.	 	The Investor hereby declares that he knows that the aforesaid referring to the blocking that
applies to the Allocated Securities is only an abstract and does not include all the blocking
provisions that apply to the Allocated Securities, that he is familiar with the blocking
provisions that apply to the Allocated Securities according to the Israeli laws and the US
laws and that he does not rely on the details in the matter included in this Agreement in
order to engage in this Agreement.

	23.	 	The Investor knows that an appendix indicating the restrictions that apply to trading the
Shares according to the law will be attached to the Share certificates (including the Exercise
Shares) to be allocated in his name. In addition and as long as Registration in the USA has
not been done, the following wording will be added to the Share certificates of the Shares
allocated as said:

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AND HAVE BEEN
ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SUCH TRANSFER MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.”

The Company will not allow registration of the Shares in the Company’s name for the
Company’s records, so long as such wording is not removed from the Share certificate,
unless possible according to the relevant laws.

 

 

 

	24.	 	Subject to the Company’s financial abilities, the Company will act in the best of its ability
to register all the securities, including the Investor’s Allocation Shares as well as Asher’s
securities in the USA within 12 months from the allocation date. If the Company did not
perform the Registration in the USA, the only remedy that the Investor will be entitled to is
notifying the Company of his request that the Company act to perform the Registration in the
USA, provided that he undertakes to bear all expenses and costs (paid to third parties)
required in order to perform the Registration in the USA (hereinafter: “USA Registration
Costs”). In such case, the Company undertakes to return the USA Registration Costs paid by the
Investor within 24 months from the date of registration. The Company undertakes that if it
will perform registration of other securities of the Company, the Investor’s securities and
Asher’s securities will be registered as part of such procedure.

Terminating the Agreement 

	25.	 	If all the Contingent Terms were not fulfilled until the end of June 2010 and the parties
have not agreed in writing to extend the period for fulfilling the Contingent Terms, each
party will be free and released from all his obligations according to this Agreement (except
the allocation of shares as said in section 12 (c) above and/or return of the First Payment on
Account of the Allocation Consideration and the Second Payment on Account of the Allocation
Consideration) immediately after receiving notice of termination and none of the parties will
have any claim and/or argument and/or demand towards the other party regarding this Agreement.
Despite the aforesaid, this section does not exempt the parties from liability for breaching
their obligations or presentations in this Agreement that was performed before the Agreement
expired as said.

Increasing the quantity of Allocation Shares 

	26.	 	The parties hereby agree that subject to the parties agreement and the law, the quantity of
the Allocation Shares will be increased by a total of up to 13,832,438 additional shares of
the Company (so that the total of Allocation Shares will be up to 225,505,295 Shares). In such
case the Allocation Consideration and the quantity of Investment Options will increase
respectively.

General 

	27.	 	Only the laws of Israel will apply to this Agreement and the authorized courts of the
district of Tel Aviv-Yafo are awarded exclusive jurisdiction.

	28.	 	Each party will bear its expenses relating to executing this Agreement.

	29.	 	The parties’ addresses for purpose of this Agreement are as they appear in the preamble; each
notice sent by one party to the other according to the said addresses will be considered as
having reached its destination within 72 hours from delivery to the post office as a
registered mail item and if hand delivered, upon delivery.

 

 

 

	30.	 	Each party will bear payment of any tax that applies to it, if such applies, as a result of
this Agreement.

	31.	 	The provisions of this Agreement will not be amended unless done in writing with the
agreement of the parties.

	32.	 	No conduct by any of the parties will be considered as waiving any of its rights according to
this Agreement and/or the law or as waiving or agreeing to any breach or non-fulfillment of
any of the provisions of this Agreement by the other party or as postponing or extending or as
an amendment, negation or addition of any of the terms, unless explicitly done and in writing.

	33.	 	The parties agree to sign the documents and take additional actions as required in order to
fully validate this Agreement.

In witness thereof the parties have hereunto signed:

	 	 	 	 	 	 	 	 	 	 	 
	TOPSPIN MEDICAL, INC.	 	MEDGENESIS PARTNERS LTD.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Eldad Yehiely
 

Name: Eldad Yehiely
	 	 	 	By:
	 	/s/ Ascher Shmulewits
 

Name: Ascher Shmulewits
	 	 
	 

	 	Title:   Director of Finance
	 	 	 	 	 	Title:   Stockholder	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Fufi Fatal
 

Name: Fufi Fatal
	 	 	 	 	 	 	 	 
	 	 	Title:   Chairman and Acting Principal Executive Officer

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