Document:

exv10w6wi

 

Exhibit 10.6(i)

loan, share purchase and share repurchase agreement

This Loan, Share Purchase and Share Repurchase Agreement (the “Agreement”) is made and entered
into as of the 9th day of December, 2002, by and between Topspin Medical, Inc., a
Delaware corporation (the “Company”), Topspin Medical (Israel) Ltd., an Israeli company (the
“Subsidiary”) and Erez Golan, Israeli ID no. 28000008 (the “Founder”).

	1.	 	Definitions. The following terms shall have the meanings ascribed to them
below.

	 	1.1.	 	“Change in Control Transaction” shall mean:

	 	1.1.1.	 	the consummation of a merger or consolidation of the Company with or
into another entity or any other corporate reorganization, or the
issuance of shares of the Company other than for financing purposes,
if more than 50% of the combined voting power of the continuing or
surviving entity’s securities outstanding immediately after such
merger, consolidation or other reorganization or transaction is owned
by persons who were not stockholders of the Company immediately prior
to such merger, consolidation or other reorganization; or
	 
	 	1.1.2.	 	the sale, transfer or other disposition of all or substantially all
of the Company’s assets.

A transaction shall not constitute a Change in Control Transaction if its
sole purpose is to change the state of the Company’s incorporation or to
create a holding company that will be owned in substantially the same
proportions by the persons who held the Company’s securities immediately
before such transaction.

	 	1.2.	 	“Employment Agreement” shall mean the Personal Employment Agreement between
the Subsidiary and the Founder, dated on or about the date hereof.
	 
	 	1.3.	 	“Milestone” shall mean the Milestone (as defined in the Stock Purchase
Agreement). The determination whether the Company or the Subsidiary has successfully
achieved the Milestone shall be made in accordance with the provisions of the Stock
Purchase Agreement.
	 
	 	1.4.	 	“Repurchase Price” shall mean an amount equal to the Price Per Share plus 5%
interest on the Price Per Share, compounded annually from the date of purchase of the
Restricted Shares by the Founder and until the date of repurchase thereof by the
Company.
	 
	 	1.5.	 	“Restricted Share(s)” shall mean a Founder Share(s) (as defined below) that
is subject to the Right of Repurchase.
	 
	 	1.6.	 	“Right of Repurchase” shall mean the Company’s right (but not obligation) of
repurchase, as described in Section 5. Notwithstanding anything to the contrary in
this Agreement, the parties agree, that in the event that the Company shall be
prohibited, on account of any applicable law, from repurchasing the Restricted
Shares, the Company may assign the Right of Repurchase to (or designate as the party
or parties entitled to exercise the

 

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	 	 	 	Right of Repurchase) the Subsidiary, or if the same is not possible, to all
of the stockholders of the Company, on a pro-rata, as converted basis, all
under the same terms and conditions as set forth in this Agreement.
	 
	 	1.7.	 	“Securities Act” shall mean the US Securities Act of 1933, as amended.
	 
	 	1.8.	 	“Service” shall mean service as an employee of the Subsidiary, in accordance
with the Employment Agreement.
	 
	 	1.9.	 	“Stock Purchase Agreement” that certain Series C Stock Purchase Agreement
between the Company and certain investors in the Company, dated on or about the date
hereof.
	 
	 	1.10.	 	“Transfer” shall mean to transfer, assign, sell, encumber or otherwise
dispose of.
	 
	 	1.11.	 	“Transferee” shall mean any person to whom the Founder has directly or
indirectly transferred any Founder Share (as defined below).

	2.	 	Grant of Loan by Subsidiary to Founder; Security

	 	2.1.	 	Grant of Loan. Under the terms and conditions hereof, the Subsidiary
hereby lends to the Founder an amount of US$ 100,000 (the “Loan”). The Loan shall
accrue interest of 5% compounded annually from the date of extension of the Loan to
the Founder and until the date of repayment thereof (the “Interest”; the Loan
together with the Interest, the “Loan Amount”).
	 
	 	2.2.	 	Repayment of Loan. The Loan Amount shall be subject to repayment in
accordance with the terms of this Agreement.
	 
	 	2.3.	 	Security Interest. As security to ensure the full and timely
repayment of the Loan Amount, the Founder hereby creates and grants to the Subsidiary
for its benefit, and its successors and assigns, a security interest in the Founder
Shares (as defined below) (the Founder Shares subject to the security interest are
referred to as the “Pledged Founder Shares”). In the event of any default in
repayment of the Loan Amount, the Subsidiary shall be entitled to take possession of
the Pledged Founder Shares and, with respect to the Pledged Founder Shares only, to
exercise any and all rights afforded to a secured party under any applicable law. In
furtherance of the above, the Founder Shares shall be stamped with a legend, as of
the date hereof, stating that such securities have been pledged to the benefit of the
Subsidiary. In addition, the Founder undertakes to execute any document required to
register the pledge of the Pledged Founder Shares with the Israeli Registrar of
Pledges
	 
	 	 	 	The Subsidiary hereby represents, warrants and agrees that in the
event that the Loan Amount will not be repaid in full for any reason
whatsoever, the Subsidiary’s sole remedy shall be the foreclosure upon the
Pledged Founder Shares. The Subsidiary hereby irrevocably waives any and
all other rights it may have both in law and equity with respect to any
default in repayment of the Loan Amount (“Default”), and releases and
forever discharges the Founder from any and all actions, causes of action,
suits, debts, dues, claims, liabilities, complaints and demands whatsoever,
however referred to and of any kind and/or nature, both in law and equity,
with respect to such Default, except with respect to the Pledged Founder
Shares.

 

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	 	2.4.	 	Delivery of Pledged Founder Shares. As soon as practicable, Founder
shall deliver to the Subsidiary the certificate(s) representing all Pledged Founder
Shares, together with duly executed forms of assignment sufficient to transfer title
thereto to the Subsidiary.
	 
	 	2.5.	 	Release of Security Interest. Upon payment of a portion of the Loan
Amount, the pledge and security interest shall be released for such number of Pledged
Founder Shares equal to the number obtained by dividing the amount of the payment by
the sum obtained from adding the Price Per Share and 5% interest on the Price Per
Share compounded annually from the date of disbursement of the Loan and until such
repayment (the “Released Shares”), and the Subsidiary shall execute and deliver to
the Founder an instrument acknowledging the termination of the security interest with
regard to the Released Shares and will deliver to the Founder the Released Shares.
Upon payment in full of the Loan Amount, the pledge and security interest shall be
released, and the Subsidiary shall execute and deliver to the Founder an instrument
acknowledging the satisfaction of the Loan and termination of the security interest
and will deliver to the Founder all remaining Pledged Founder Shares.
	 
	 	2.6.	 	Stock Dividends. So long as any Loan Amount remains unpaid, if the
Founder becomes entitled to receive or receives any securities or other property
(except for cash) in addition to, in substitution of, or in exchange for any of the
Pledged Founder Shares (whether as a distribution in connection with any
recapitalization, reorganization, rearrangement of capital structure or
reclassification, a stock dividend, or otherwise), the Founder shall accept such
securities or other property on behalf of and for the benefit of the Subsidiary as
additional security for the Founder’s obligations hereunder, and the Founder shall
promptly deliver such additional securities or instruments to the Subsidiary,
together with duly executed forms of assignment sufficient to transfer title thereto
to the Subsidiary (shares and the other securities and instruments described above in
this sentence are included in the term “Pledged Founder Shares”).
	 
	 	2.7.	 	Voting Rights; Distributions; Cash Dividends Prior to Default.
Notwithstanding anything to the contrary contained herein, during the term of this
Agreement until such time as there exists a default in the payment of principal or
interest on the Loan, the Founder shall be entitled to all voting rights with respect
to the Pledged Founder Shares and shall be entitled to receive all cash dividends
paid in respect of the Pledged Founder Shares.
	 
	 	2.8.	 	Founder’s Representation and Covenant. The Founder hereby represents
and warrants to the Subsidiary that he shall have good and valid title to all of the
Pledged Founder Shares, free and clear of all liens, security interests and other
encumbrances; provided however that the Founder shall be entitled to create another
security interest in the Founder Shares for the benefit of the Subsidiary which
security interest will be on a pari passu basis with the one granted to the
Subsidiary hereunder, to secure other loans received by him from the Subsidiary,
provided however that the aggregate amount of such other loans including the Loan
Amount shall not exceed US$ 150,000. The Founder further represents and warrants that
upon any transfer of the Pledged Founder Shares to the Subsidiary, the Subsidiary
will acquire such Pledged Founder

 

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	 	 	 	Shares free and clear of all liens, security interests and other
encumbrances.
	 
	 	2.9.	 	Tax Liability. Any tax liability in connection with the grant of the
Loan shall be completely borne by the Founder.

 

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	3.	 	Repayment of Loan 

	 	3.1.	 	The Founder may repay any part of the Loan Amount to the Subsidiary at any
time, subject to his providing to the Subsidiary an advance written notice of 7 days
indicating his wish to do so.
	 
	 	3.2.	 	As set forth in this Section 3.2, the Loan Amount shall be repaid to the
Subsidiary upon Transfers of Founder Shares by the Founder, the consideration for
which is received in cash or securities freely tradeable by Founder (i.e. the
securities are registered and there are no restrictions under any applicable law or
any agreement or undertaking preventing Founder from selling the securities);
provided that the consideration received by the Founder from previous Transfers of
Founder Shares exceeds $300,000 (a “Repayment Transfer”). Within 30 days following a
Repayment Transfer, he shall repay the Subsidiary that portion of the Loan Amount
which will ensure that the remaining outstanding amount of the Loan Amount is not
greater than the fair market value of the number of Founder Shares still held by the
Founder as established in the Transfer transaction (and the Founder Shares which were
not transferred in the Repayment Transfer will continue to serve as a security for
the repayment of the Loan Amount).
	 
	 	3.3.	 	Upon the termination of the Founder’s Service for any reason, that part of
the Loan Amount which equals the product of the Repurchase Price multiplied by the
number of Restricted Shares repurchased by the Company, shall be due and payable to
the Subsidiary immediately upon receipt by the Founder of the Repurchase Price for
the Restricted Shares repurchased by the Company.
	 
	 	3.4.	 	Without derogating from the aforesaid provisions of this Section 3, the Loan
Amount shall be repaid to the Subsidiary not later than the date which is 15 years
from the date of disbursement thereof to the Founder. Notwithstanding the foregoing,
the Subsidiary may request repayment of, and the Employee shall then repay, the
outstanding Loan Amount, prior to such 15 year anniversary immediately before the
Company becomes an “Issuer” as defined in the Sarbanes-Oxley Act of 2002.
	 
	 	3.5.	 	The Founder shall be entitled to set-off any part of the outstanding Loan
Amount from any undisputed sum he is entitled to receive from the Subsidiary.

	4.	 	Purchase of Shares of Company by Founder

	 	4.1.	 	Purchase of Shares. Immediately following the Founder’s receipt of
the Loan from the Subsidiary, the Founder shall purchase from the Company and the
Company shall issue to the Founder 11,927,727 shares of Common Stock of the Company,
US$0.001 par value per share (the “Founder Shares”), in consideration of US$ 0.008384
per Founder Share (the “Price Per Share”) and for an aggregate purchase price and
payment to the Company of US$100,000 (the “Purchase Amount”).
	 
	 	4.2.	 	Fully Paid Shares. The Company is issuing the Founder Shares as
fully-paid and non-assessable.

	5.	 	Right of Repurchase

 

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	 	5.1.	 	Scope of Repurchase Right. 5/12 (five twelfths) of the Founder Shares
shall be initially Restricted Shares and shall be subject to the Right of Repurchase.
	 
	 	5.2.	 	Repurchase Right. The Right of Repurchase shall be exercisable with
respect to the Restricted Shares upon the termination for any reason of the Founder’s
Service, and shall remain exercisable for 90 days thereafter.
	 
	 	5.3.	 	No Transfer. The Founder shall not Transfer any Restricted Shares,
except as provided in this Section 5.3. The Founder may Transfer Restricted Shares
(i) by beneficiary designation, will or intestate succession; or (ii) to his spouse,
children or grandchildren or to a trust established by him for the benefit of himself
or his spouse, children or grandchildren; or (iii) to any corporation or other entity
wholly owned by the Founder; provided in any case that the Transferee agrees in
writing on a form prescribed by the Company to be bound by all provisions of this
Agreement. If the Founder transfers any Restricted Shares, then the provisions of
this Agreement shall apply to the Transferee to the same extent as to the Founder.
	 
	 	5.4.	 	Lapse of Repurchase Right. The Right of Repurchase shall lapse, with
respect to the Restricted Shares, on a monthly basis over a 4 (four) year period
commencing on the date of execution of the Employment Agreement, subject to the
following acceleration terms:

	 	5.4.1.	 	The Right of Repurchase shall lapse, with respect to 1/6 (one sixth)
of the Founder Shares, in the event that, and at such time as, the
Company or the Subsidiary achieves the Milestone.
	 
	 	5.4.2.	 	The Right of Repurchase shall lapse, with respect to 50% of any
remaining Restricted Shares in the event, and at the time, of a Change
in Control Transaction.

	 	5.5.	 	Repurchase Price. If the Company exercises the Right of Repurchase,
it shall pay the Founder an amount equal to the Repurchase Price for each of the
Restricted Shares being repurchased.
	 
	 	5.6.	 	Exercise of Repurchase Right. The Right of Repurchase shall be
exercisable by written notice delivered to the Founder. Such notice shall set forth
the date on which the repurchase is to be effected. Such date shall not be more than
60 days after the date of such notice. The certificate(s) representing the Restricted
Shares to be repurchased shall, prior to the close of business on the date specified
for the repurchase, be delivered to the Company together with a duly endorsed stock
assignment certificate. The Company shall, concurrently with the receipt of such
certificates, pay to the Founder the Repurchase Price according to Section 5.5 above.
Payment shall be made in cash, cash equivalents, or in any other way of payment
allowed under any applicable law, and authorized by the Board of Directors of the
Company.
	 
	 	5.7.	 	Termination of Rights. If the Company makes available, at the time
and place and in the amount and form provided in this Agreement, the consideration
for the Restricted Shares to be repurchased in accordance with this Section 5 then
after such time the Founder shall no longer have any rights as a holder of such
Restricted Shares (other than the right to receive payment therefor in accordance
with this Agreement). Such Restricted Shares shall be deemed to have been repurchased
in accordance with the

 

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	 	 	 	applicable provisions hereof, whether or not the certificate(s) therefor
have been delivered as required by this Agreement.
	 
	 	5.8.	 	Rights of the Company. The Company shall not be required to: (i)
transfer on its books any Restricted Shares that have been sold or transferred in
contravention of this Agreement; or (ii) treat as the owner of Restricted Shares, or
otherwise to accord voting, dividend or liquidation rights to, any transferee to whom
Restricted Shares have been transferred in contravention of this Agreement.
	 
	 	5.9.	 	Rights as a Shareholder. Subject to the terms and conditions of this
Agreement, the Founder shall have all the rights of a shareholder of the Company with
respect to the Restricted Shares, until such time as the Founder disposes of the
Restricted Shares or the Company exercises the Repurchase Right hereunder.
	 
	 	5.10.	 	Repurchase Right: Additional Shares or Substituted Securities. In
the event of the declaration of a stock dividend, the declaration of an extraordinary
dividend payable in a form other than stock, a spin-off, a stock split, an adjustment
in conversion ratio, a recapitalization or a similar transaction affecting the
Company’s outstanding securities without receipt of consideration, any new,
substituted or additional securities or other property (including money paid other
than as an ordinary cash dividend) which are by reason of such transaction
distributed with respect to any Restricted Shares or into which such Restricted
Shares thereby become convertible shall immediately be subject to the Right of
Repurchase. Appropriate adjustments to reflect the distribution of such securities or
property shall be made to the number and/or class of the Restricted Shares.
Appropriate adjustments shall also, after each such transaction, be made to the
Repurchase Price to be paid upon the exercise of the Right of Repurchase in order to
reflect any change in the Company’s outstanding securities effected without receipt
of consideration therefor; provided, however, that the aggregate Repurchase Price
payable for the Restricted Shares shall remain the same.

	6.	 	Founder’s Representations and Warranties to the Company
	 
	 	 	In connection with the issuance of the Founder Shares, the Founder hereby represents and
warrants to the Company as follows:

	 	6.1.	 	The Founder is acquiring and will hold the Founder Shares for investment for
his account only and not with a view to, or for resale in connection with, any
“distribution” thereof within the meaning of the Securities Act.
	 
	 	6.2.	 	The Founder understands that the Founder Shares have not been registered
under the Securities Act by reason of a specific exemption therefrom and that the
Founder Shares must be held indefinitely, unless they are subsequently registered
under the Securities Act or the Founder obtains an opinion of counsel, in form and
substance satisfactory to the Company, that such registration is not required. The
Founder further acknowledges and understands that the Company is under no obligation
to register the Founder Shares. Founder is a director and executive officer of the
Company.
	 
	 	6.3.	 	The Founder will not sell, transfer or otherwise dispose of the Founder
Shares in violation of the Securities Act, the US Securities Exchange Act of 1934, as
amended, or the rules promulgated thereunder, including Rule 144

 

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	 	 	 	under the Securities Act.
	 
	 	6.4.	 	The Founder agrees that he will not dispose of the Founder Shares unless and
until he has complied with all requirements of this Agreement applicable to the
disposition of Founder Shares and he has provided the Company with written
assurances, in substance and form satisfactory to the Company, that the proposed
disposition does not require registration of the Founder Shares under the Securities
Act or all appropriate action necessary for compliance with the registration
requirements of the Securities Act or with any exemption from registration available
under the Securities Act (including Rule 144) has been taken.
	 
	 	6.5.	 	The Founder acknowledges that all certificates evidencing Founders Shares
shall bear the following legends, in addition to the legend regarding the pledge of
the shares:
	 
	 	 	 	“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THE SHARES UNDER THIS ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.”
	 
	 	 	 	If required by the authorities of any state in connection with the issuance
of the Founder Shares, the legend or legends required by such state
authorities shall also be endorsed on all such certificates.

	7.	 	Additional Representations
	 
	 	 	Each of the parties hereto hereby represents and warrants to the other party (to the
extent applicable) that: if a company or corporation, it is duly formed and validly
existing under the laws of its incorporation; if a company or corporation, it has full
power and authority to consummate the transactions contemplated hereunder; no consents,
authorizations or approvals of any kind of any governmental authority or other third party
are required in connection with the execution or performance of this Agreement; the
consummation of the transaction contemplated hereunder do not violate the provisions of
any applicable law, and will not result in any breach of any agreement or instrument to
which it is a party; if a company or corporation, the execution and performance of this
Agreement by it have been duly authorized by all necessary action, and this Agreement is
the legal, valid, and binding obligation of it, and is enforceable as to it in accordance
with its terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws of general applicability relating to or
affecting creditors’ rights generally and by the application of general principles of
equity.
	 
	8.	 	Miscellaneous

	 	8.1.	 	Successors and Assigns. Except as otherwise expressly provided to the
contrary, the provisions of this Agreement shall inure to the benefit of, and be
binding upon, the Company and its successors and assigns and be binding upon the
Founder and the Founder’s legal representatives, heirs, legatees, assigns and
transferees by operation of law, whether or not any such person has become a party to
this Agreement or has agreed in writing to join herein and to be bound by the terms,
conditions and restrictions hereof. Except as

 

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	 	 	 	otherwise provided herein, the Founder shall not assign any of its rights
or obligations hereunder without the prior written consent of the Company
and the Subsidiary.
	 
	 	8.2.	 	No Retention Rights. Nothing in this Agreement shall confer upon the
Founder any right to continue his Service for any period of specific duration or
interfere with or otherwise restrict in any way the rights of the Company, the
Subsidiary or of the Founder, which rights are hereby expressly reserved by each, to
terminate his Service at any time and for any reason, with or without cause, BUT all
subject to the Founder’s rights, limitations and restrictions as set forth in the
Employment Agreement.
	 
	 	8.3.	 	Legends. All certificates evidencing Restricted Shares shall bear the
following legends:
	 
	 	 	 	“THE SHARES REPRESENTED HEREBY MAY NOT BE SOLD, ASSIGNED, TRANSFERRED,
ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN COMPLIANCE WITH THE
TERMS OF A WRITTEN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER
OF THE SHARES (OR THE PREDECESSOR IN INTEREST TO THE SHARES). SUCH
AGREEMENT GRANTS TO THE COMPANY CERTAIN REPURCHASE RIGHTS. THE SECRETARY OF
THE COMPANY WILL UPON WRITTEN REQUEST FURNISH A COPY OF SUCH AGREEMENT TO
THE HOLDER HEREOF WITHOUT CHARGE.”
	 
	 	8.4.	 	Taxes. The Founder hereby acknowledges that its is and shall be
solely responsible for all local and foreign tax liability, if any, and for any other
tax consequences that may arise to him, as a result of the transactions contemplated
by this Agreement. The Founder further acknowledges that he has reviewed with his tax
advisors local and foreign tax consequences of the transactions contemplated hereby.
The Founder is relying solely on such advisors and not on any statements or
representations of the other party or any of its agents.
	 
	 	8.5.	 	Notices. Any notice, declaration or other communication required or
authorized to be given by any party under this Agreement to any other party shall be
in writing and shall be personally delivered, sent by facsimile transmission (with a
copy by ordinary mail in either case) or dispatched by courier addressed to the other
party at the address stated below or such other address as shall be specified by the
parties hereto by notice in accordance with the provisions of this Section. Any
notice shall operate and be deemed to have been served, if personally delivered or
sent by fax on the next following business day, and if by courier, on the fifth
following business day.

	 	 	 
	 

	 	To the Company:
	 

	 	c/o TopSpin Medical (Israel) Ltd.
	 

	 	1 Lev Pesach St., North Industrial Zone
	 

	 	Lod 71293 Israel
	 

	 	fax: 08-928-1233
	 

	 	Attn: Eyal Kolka

 

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	 	To the Subsidiary:
	 

	 	1 Lev Pesach St., North Industrial Zone
	 

	 	Lod 71293 Israel
	 

	 	fax: 08-928-1233
	 

	 	Attn: Eyal Kolka
	 
	 	 
	 

	 	To the Founder:
	 

	 	35 Balfour St.
	 

	 	Tel Aviv, Israel
	 

	 	Fax:
	 

	 	Attn: Erez Golan
	 
	 	 
	 

	 	with copies to (which shall not constitute notice):
	 
	 	 
	 

	 	Berkman, Wechsler, Sahar, Bloom & Co.
	 

	 	1 Azrieli Center
	 

	 	Tel Aviv 67021
	 

	 	Fax: 972+3-607-2250
	 

	 	Attn: Alon Sahar, Adv.

	 	8.6.	 	Entire Agreement. This Agreement constitutes the entire contract
between the parties hereto with regard to the subject matter hereof. It supersedes
any other agreements, representations or understandings (whether oral or written and
whether express or implied) which relate to the subject matter hereof.
	 
	 	8.7.	 	Waivers. The failure or delay of either party hereto at any time or
times to require performance of any provisions hereof shall in no manner affect this
right at a later time. No waiver by any party hereto of a breach of any term
contained in this Agreement, in any one or more instance, shall be deemed or
construed as a further or continuing waiver of any such beach or a waiver of a breach
of any other form.
	 
	 	8.8.	 	Choice of Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, without regard to its conflict of
laws rules.
	 
	 	8.9.	 	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 as reflected thereby.
	 
	 	8.10.	 	Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and enforceable against the
parties actually executing such counterpart, and all of which together shall
constitute one and the same instrument. Facsimile signatures shall be deemed binding
as if originals.

 

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

	 	 	 	 	 	 	 	 	 	 	 
	/s/ Eyal Kolka	 	/s/ Erez Golan	 	 
	 	 	 	 	 	 	 
	TOPSPIN MEDICAL, INC.	 	TOPSPIN MEDICAL (ISRAEL) LTD.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	Eyal Kolka	 	 	 	By:	 	Erez Golan	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Title:

	 	CFO	 	 	 	Title:	 	CEO	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	/s/
Erez Golan
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	EREZ GOLANexv10w6wii

 

Exhibit 10.6 (ii)

	 	 	 
	

	 	TopSpin Medical, Inc.

			
	 	 	 
	To: Erez Golan
	 	Date: August 22, 2005

Re: Revision to Loan, Share Purchase and Share Repurchase Agreement of 

December 9, 2002 (“Loan Agreement”)

We hereby put in writing that which is agreed between yourself, Topspin Medical Inc.
(the “Corporation”) and Topspin Medical Ltd. (the “Subsidiary”) as regards the
modification of your Loan Agreement, in the event that the Company issues its stock
for trading on the Tel Aviv Stock Exchange (the “IPO”). Capitalized terms used
herein shall have the meaning ascribed to them in the Loan Agreement, unless the
context requires otherwise.

Upon consummation of the IPO the following provisions shall enter into effect:

	 	1.	 	The following shall follow on after Section 2.1
	 
	 	 	 	“Half of this loan and the interest accrued thereon shall be converted
to a grant on the second anniversary of the IPO, subject to your being
an employee or a consultant of the Company or any affiliate thereof at
the time and the remaining half of the loan and the interest accrued
thereon shall be converted to a grant on the third anniversary of the
IPO, subject to your being an employee or a consultant of the Company
or any affiliate thereof at the time.”
	 
	 	2.	 	Section 2.3 will be deleted and replaced with the following:
	 
	 	 	 	“Security Interest. As of the date of the Loan Agreement as security to
ensure the full and timely repayment of the Loan Amount, the Founder hereby
creates and grants to the Subsidiary for its benefit, and its successors and
assigns, a security interest in the shares held by the Founder in Erez Golan
Holdings Ltd. The shares subject to the security interest are referred to as the
“Pledged Founder Shares”. In the event of any default in repayment of the Loan
Amount, the Subsidiary shall be entitled to take

 

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	 	 	 	possession of the Pledged Founder Shares and, with respect to the Pledged Founder
Shares only, to exercise any and all rights afforded to a secured party under any
applicable law. In furtherance of the above, the Pledged Founder Shares shall be
stamped with a legend, as of the date hereof, stating that such securities have
been pledged to the benefit of the Subsidiary. In addition, the Founder
undertakes to execute any document required to register the pledge of the Pledged
Founder Shares with the Israeli Registrar of Pledges.

	 	 	 	The Subsidiary hereby represents, warrants and agrees that in the event that
the Loan Amount will not be repaid in full for any reason whatsoever, the
Subsidiary’s sole remedy shall be the foreclosure upon the Pledged Founder Shares.
The Subsidiary hereby irrevocably waives any and all other rights it may have both
in law and equity with respect to any default in repayment of the Loan Amount
(“Default”), and releases and forever discharges the Founder from any and all
actions, causes of action, suits, debts, dues, claims, liabilities, complaints and
demands whatsoever, however referred to and of any kind and/or nature, both in law
and equity, with respect to such Default, except with respect to the Pledged
Founder Shares.”
	 
	 	3.	 	The Subsidiary shall immediately return the Pledged Founder Share, as such term
is defined in the Loan Agreement in effect prior to this amendment, to the Founder and
the Company shall take all necessary actions to remove the legend from these share
certificate(s).

This letter constitutes an appendix to the Loan Agreement. All other provisions of
the Employment Agreement remain unchanged.

	 	 	 	 	 	 	 
	/s/ Michael Berman	 	 	 	/s/ Michael Berman	 	 
	 

	 	 	 	 

	 	 
	TopSpin Medical Inc.

	 	 	 	Topspin Medical (Israel) Ltd.	 	 

 

-3-

I hereby declare that I have read and understood this letter and I agree
to its contents.

	 	 	 	 	 	 	 	 	 	 	 
	Signature:	/s/ Erez Golan	 	 
	Date:

	 	August 22, 2005	 
	 	 	 
	 
	 	 	 	 	Employee’s name:	 	Erez Golan	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	ID No.:

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