THIS INVESTMENT
AGREEMENT (this “ Agreement ”) is made as of
February 2, 2009 by and between TopSpin Medical, Inc. (the
“ Company ”) a corporation incorporated under
the laws of the State of Delaware with its address at
and Asher Shmulewitz (the “ Investor ”) with its
address at
.
WHEREAS , the Company’s securities are publicly
traded on the Tel Aviv Stock Exchange Ltd. (the “ TASE
”); and
WHEREAS , the Investor is interested to purchase from
the Company, an aggregate of 120,000,000 shares of Common Stock,
par value $0.001 each (the “ Common Stock ”) at
a price of NIS 0.0075 per share at an aggregate purchase price of
900,000 NIS (the “ Investment Amount ”) and in
addition, to receive from the Company an option, for no additional
consideration, to purchase additional Common Stock and the Company
is interested in receiving the Investment Amount, all on the terms
and conditions as set forth herein.
NOW, THEREFORE, the parties hereby agree as
follows:
1.
Investment . The Investor hereby irrevocably undertakes to
pay the Investment Amount to the Company in consideration for the
issuance to it of 120,000,000 shares of Common Stock (the
“Purchased Shares”), all subject to the fulfillment of
the conditions set forth in Section 5 below.
2.
Representations of the Investor . The Investor hereby
represents and warrants to the Company and acknowledges that the
Company is entering into this Agreement in reliance thereon, as
follows:
2.1. This Agreement has been duly executed and
delivered by the Investor and constitutes its valid and legally
binding obligation, enforceable in accordance with its
terms.
2.2. The execution and delivery of this
Agreement by the Investor and the fulfillment of the terms hereof
will not constitute a default under or conflict with any law or
agreement or other instrument to which it is a party or by which it
is bound.
2.3. The
Investor does not hold any securities of the Company.
2.4. The Investor acknowledges and is aware that
in accordance with the provisions of the Israeli Securities Law
— 1968 (the “Securities Law”) and the Securities
Law Regulations (Details with regard to Sections 15A to 15C of
the Law), 2000 (the “Regulations”), certain limitations
apply with respect to the resale of the Purchased Shares and the
Option Shares (as defined below).
2.5. The Investor is not an “Interested
Party” (as defined in Section 270(5) of the Israeli
Companies Law-1999). In addition, there are no agreements, whether
in writing or oral, concerning the purchase or sale of the
Company’s securities or concerning the voting of the
Company’s securities, between the Investor and any
shareholder of the Company or between the Investor or any third
party
2.6. The Investor is an investor in securities
of companies in similar stage as the Company and acknowledges that
it is able to fend for itself, can bear the economic risk of its
investment (including the total loss of such investment), and has
such knowledge and experience in financial or business matters that
it is capable of evaluating the merits and risks of the investment
in the Purchased Shares.
2.7. The Investor has received all the
information it considers necessary or appropriate for deciding
whether to purchase the Purchased Shares, and hereby acknowledges
its agreement to invest in the Company based on such information.
The Investor further represents that it has had an opportunity to
ask questions and receive answers from the Company regarding the
information delivered to it, the terms and conditions of the
offering of the Purchased Shares and the business, properties,
prospects and financial condition of the Company.
2.8. The Investor understands that although the
Purchased Shares and Option Shares (the “Shares”) will
be approved by the TASE for registration pursuant to
Section 5.1 below, it will not be permitted, except as
specifically permitted herein upon any such sale or transfer being
permitted under the applicable laws of the United States, including
under the applicable provisions of the 33 Act (as defined below)
listed below that limit the transfer of securities, to transfer the
Purchased Shares or the Option Shares to The Nominee Company of
Bank Hapoalim Ltd. (the “Registration Company”).
Therefore the Investor hereby declares and confirms its agreement
that it shall not be able to sell or otherwise transfer any of the
Purchased Shares or the Option Shares on the TASE following their
issuance and shall only be able to do so upon fulfillment of the
conditions set forth herein. The Investor hereby agrees that he
shall have no claim against the Company, the TASE or anyone acting
on their behalf, in connection with the Investor’s inability
to sell or otherwise transfer the Shares through the TASE. In the
event the sale or transfer of the Purchased Shares or the Option
Shares through the TASE is permitted under the applicable laws of
the United States, then the Investor shall execute any and all
documentation and any and all information that the Company may
request evidencing that such sale or transfer is permissible,
including without limitation, providing opinions of counsel
(qualified either in Israeli and/or United States) and written
representations as may be required by the Company, the TASE or any
other governmental authority. Following receipt of all
documentation and information the Company requires in connection
therewith, the Company shall take action in order to remove the
legend from the stock certificates of the shares for which it is
permissible under all applicable laws of the United States in a
manner that will permit the transfer and registration of the shares
in the name of the Registration Company and the sale of such shares
through the TASE and Investor shall bear and all costs that the
Company may incur in connection with such transfer.
2.9. This Agreement is made with the Investor in
reliance upon the Investor’s representation to the Company,
which by the Investor’s execution of this Agreement, the
Investor hereby confirms, that the securities being acquired under
this Agreement (the “Securities”) to be acquired by the
Investor will be acquired for investment for the Investor’s
own account, not as a nominee or agent, and not with a view to the
resale or distribution of any part thereof, and that the Investor
has no present intention of selling, granting any participation in,
or otherwise distributing the same. By executing this Agreement,
the Investor further represents that the Investor does not
presently have any contract, undertaking, agreement or arrangement
with any person or entity to sell or transfer to such person or
entity or to any third person, with respect to any of the
Securities. The Investor has not been formed for the specific
purpose of acquiring the Securities.
2.10. The Investor understands that the
Securities have not been, and will not be, registered under the
Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder (the “33 Act”), by reason of a
specific exemption from the registration provisions of the 33 Act
which depends upon, among other things, the bona fide nature of the
investment intent and the accuracy of the Investor’s
representations as expressed herein. The Investor understands that
the Securities are “restricted securities” under
applicable U.S. federal and state securities laws and that,
pursuant to these laws, the Investor must hold the Securities
indefinitely unless they are registered with the U.S. Securities
and Exchange Commission and qualified by state authorities, or an
exemption from such registration and qualification requirements is
available and such Sec
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