Unassociated Document


    THIS
CONVERTIBLE NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE SOLD, OFFERED FOR SALE,
ASSIGNED, TRANSFERRED OR OTHERWISE DISPOSED OF, UNLESS REGISTERED PURSUANT TO
THE PROVISIONS OF THE SECURITIES ACT OR AN OPINION OF COUNSEL OR OTHER
REASONABLE EVIDENCE IS OBTAINED STATING THAT SUCH DISPOSITION IS IN COMPLIANCE
WITH AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION.

     

    BRAINSTORM
CELL THERAPEUTICS INC.

     

    Convertible
Note Due Immediately

     

    
      	
              U.S.$135,000.00

            	
              Petach
      Tikva, Israel

            


    

     

    September
15, 2010

     

    BrainStorm
Cell Therapeutics Inc., a Delaware corporation (the “Company”), for value received, hereby promises to pay to
Thomas B. Rosedale, or his assigns (the “Holder”), the principal sum of One Hundred Thirty Five
Thousand Dollars (US$135,000.00) (the “Original Principal
Amount”), and to pay interest
(computed on the basis of a 365-day year) from the date hereof on the unpaid
balance of such principal amount from time to time outstanding at the rate of
4.00% per annum. The Original Principal Amount represents the amount of legal
fees owed to BRL Law Group LLC (which entity is controlled by the original
Holder) by the Company through December 31, 2010, as the Company and the Holder
have agreed.

     

    1.           Conversion.

    


    (a)            The
Holder has the right, at its option and in its sole and absolute discretion, to
convert all or any part of the outstanding principal amount of this Note and all
accrued and unpaid interest (“Note Amount”) into shares of the Company’s common stock,
$0.00005 par value per share (“Common Stock”). The number of shares of Common Stock to be
issued upon such conversion shall be equal to the quotient obtained by dividing
the aggregate Note Amount being converted by the Fair Market Value (as defined
below). In order to convert all or any part of the Note Amount into Common
Stock, the Holder shall notify the Company in writing (both a fax and an e-mail
shall constitute a writing) that the Holder elects to convert the Note Amount or
a portion hereof specified in such notice pursuant to this Section 1(a) (a
“Conversion
Notice”). Such Conversion Notice
shall also state the name or names (with address) in which the certificate or
certificates (if applicable) for shares of Common Stock which shall be issuable
on such conversion shall be issued and the date on which such Conversion Notice
is sent shall be the “Conversion Date”. For purposes of this
Note, “Fair Market Value” shall mean:

    


    (i) If
the Common Stock is listed on a national securities exchange or admitted to
unlisted trading privileges on such exchange or listed for trading on the NASDAQ
system or the Over-the-Counter Bulletin Board, then the Fair Market Value shall
be the average mean of the last reported sale prices of the Common Stock on such
exchange or system on the five (5) business days prior to the Value Date (as
defined below); or

     

    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


     

    (ii)            If
the Common Stock is not so listed or so admitted to unlisted trading privileges,
the Fair Market Value shall be determined in good faith by the Board of Directors of the Company.

     

    For
purposes of this Note, “Value Date” shall mean the business day two business days
prior to the Conversion Date.

    


    (b)            Delivery of Instruction
Letter for Certificates.  Within one (1) business day after the
Conversion Date, the Company shall deliver or cause to be delivered an
instruction letter to its transfer agent (or other appropriate person or entity)
and take all other necessary and appropriate actions for the Holder to be
delivered a stock certificate for the Common Stock to be received upon
conversion in whole or in part pursuant to this Section 1 or for such
Common Stock to be issued in book entry form or via Deposit/Withdrawal at
Custodian (DWAC).

     

    (c)            Fractional
Shares.  No fractional shares of Common Stock shall be issuable upon
conversion of this Note, but a payment in cash will be made in respect of any
fraction of a share which would otherwise be issuable upon the surrender of this
Note, or portion hereof, for conversion. Such payment shall be based on the Fair
Market Value of the Common Stock at the time of conversion of this
Note.

     

    (d)            Legal Opinion. 
The Company acknowledges and agrees that BRL Law Group LLC shall be an
acceptable law firm to issue any necessary legal opinions in connection with the
issuance of the shares of Common Stock and the subsequent sale of the shares of
Common Stock received upon conversion of the Note Amount in whole or in
part.

     

    2.           Payment of Note
Amount.  The Note Amount is due immediately and may be paid by the
Company to the Holder without advance notice.

    


    3.            Note
Register.

    


    (a)            The
Company shall keep at its principal executive office a register (herein
sometimes referred to as the “Note Register”), in which, subject to such reasonable
regulations as it may prescribe, but at its expense (other than transfer taxes,
if any), the Company shall provide for the registration and transfer of this
Note.

    


    (b)            Whenever
this Note shall be surrendered at the principal executive office of the Company
for transfer or exchange, accompanied by a written instrument of transfer in
form reasonably satisfactory to the Company duly executed by the holder hereof
or his or its attorney duly authorized in writing, the Company shall execute and
deliver in exchange therefor a new Note or Notes, as may be requested by such
holder, in the same aggregate unpaid principal amount and payable on the same
date as the principal amount of the Note or Notes so surrendered; each such new
Note shall be dated as of the date to which interest has been paid on the unpaid
principal amount of the Note or Notes so surrendered and shall be in such
principal amount and registered in such name or names as such holder may
designate in writing.

     

    (c)            Upon
receipt by the Company of evidence reasonably satisfactory to it of the
loss,
theft, destruction or mutilation of this Note and of indemnity reasonably
satisfactory to it, and upon reimbursement to the Company of
all reasonable expenses incidental thereto, and upon surrender and
cancellation of this Note (in case of mutilation) the Company will make and
deliver in lieu of
this Note a new Note of like tenor and unpaid principal amount and dated
as of
the date to which interest has been paid on the unpaid principal amount
of this Note in lieu of which such new Note is made and delivered.

     

    
      
        
        

      

      
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    4.           Accredited Investor
Representation.  The Holder is an accredited investor as defined in
Rule 501(a) of Regulation D promulgated under the Securities Act of 1933, as
amended.

    


    5.           No Impairment. 
The Company will not, by any voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Company, but will at all times in good faith assist in the
carrying out of all the provisions of this Note and in the taking of all such
action as may be necessary or appropriate in order to protect the rights of the
Holder against impairment.

    


    5.           General.

     

    (a)            Successors and
Assigns.  This Note, and the obligations and rights of the Company
hereunder, shall be binding upon and inure to the benefit of the Company, the
holder of this Note, and their respective heirs, successors and assigns. The
holder of this Note may transfer or assign this Note in whole or in part without
the consent of the Company so long as such transfer complies with applicable
securities laws. The Company may not assign or transfer this Note or any of the
obligations hereunder in whole or in part.

     

    (b)           Recourse.  
Recourse under this Note shall be to the general unsecured assets of
the
Company.

     

    (c)            Changes. 
Changes in or additions to this Note may be made or compliance with any term,
covenant, agreement, condition or provision set forth herein may be omitted or
waived (either generally or in a particular instance and either retroactively or
prospectively), upon written consent of the Company and the Holder.

     

    (d)            Currency.  All
payments shall be made in such coin or currency of the United States of America
as at the time of payment shall be legal tender therein for the payment of
public and private debts.

     

    (e)            Governing Law. 
This Note shall be construed and enforced in accordance with, and the rights of
the parties shall be governed by, the laws of the state of Delaware, without
regard to the conflict of laws provisions of such state.

     

    (f)            Interest Rate. 
If any provisions of this Note would require the Company to pay interest hereon
at a rate exceeding the highest rate allowed by applicable law, the Company
shall instead pay interest under this Note at the highest rate permitted by
applicable law.

     

    ********

     

    
      
        
           


        

        
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    IN
WITNESS WHEREOF, this Note has been executed and delivered as a sealed
instrument on the date first above written by the duly authorized representative
of the Company.

     

    
      
        
          
            
              
                
                  	 
      	
                          BRAINSTORM
      CELL THERAPEUTICS INC.

                        
	 
      	 
      	 
      	 
      
	 
      	
                          By:

                        	
                          /s/ Rami Efrati

                        	 
      
	 
      	
                          Name:

                        	
                          Rami
      Efrati

                        
	 
      	
                          Title:

                        	
                          CEO

                        


                

              

            

          

        

      

    

    


    
      
        
           


        

        
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