THIS
WARRANT AND THE SHARES OF COMMON STOCK ISSUED UPON ITS


EXERCISE
ARE SUBJECT TO THE RESTRICTIONS ON


TRANSFER
SET FORTH IN SECTION 4 OF THIS WARRANT


 






 


	Warrant No.: 2012-1	Number of Shares: 33,334
	 	(subject to adjustment)


Date of
Issuance: April 13, 2012


 


BRAINSTORM
CELL THERAPEUTICS. INC.


 


Common
Stock Purchase Warrant


 


(Void after
April 13, 2022)


 


BrainStorm
Cell Therapeutics, Inc., a Delaware corporation (the “Company”), for value received, hereby certifies that Hadasit
Medical Research Services and Development Ltd., or its registered assigns (the “Registered Holder”), is entitled, subject
to the terms and conditions set forth below, to purchase from the Company, at any time or from time to time on or after the date
of issuance and on or before 5:00 p.m. (New York time) on April 13, 2022 (the “Expiration Date”), 33,334 shares of
Common Stock, $0.00005 par value per share, of the Company, at a purchase price of $0.00005 per share. The shares purchasable upon
exercise of this Warrant, and the purchase price per share, each as adjusted from time to time pursuant to the provisions of this
Warrant, are hereinafter referred to as the “Warrant Shares” and the “Purchase Price,” respectively.


 


1.       Exercise.


 


(a)       This
Warrant may be exercised by the Registered Holder, in whole or in part, by surrendering this Warrant, with the purchase form appended
hereto as Exhibit I duly executed by the Registered Holder or by the Registered Holder’s duly authorized attorney,
at the principal office of the Company, or at such other office or agency as the Company may designate, accompanied by payment
in full, in lawful money of the United States, of the Purchase Price payable in respect of the number of Warrant Shares purchased
upon such exercise; provided however that this Warrant may only be exercised as to vested Warrant Shares, and shall vest and become
exercisable as follows: in twelve (12) consecutive equal monthly amounts at the end of each calendar month starting April 30, 2012
such that all Warrant Shares are vested in full on March 31, 2013 (the “Fully Vested Date”), unless the Agreement dated
April 13, 2010 by and among Prof. Avi Israeli, the Registered Holder and the Company (the “Agreement”) is terminated
prior to the Fully Vested Date, in which case no further Warrant Shares shall vest on or after the date of such termination. Upon
termination of the Agreement vesting shall cease and the Registered Holder shall be entitled to exercise this Warrant only with
respect to the portion of the Warrant Shares that shall have vested prior to the date of termination of the Agreement, rounded
to the nearest number without decimal. The Warrant shall be valid until and may be exercised only on or before the earliest of
the following: (i) immediately prior to a sale of all or substantially all of the shares of the Company in a merger and/or acquisition
transaction; (ii) the Expiration Date; or (iii) six (6) months following the termination of the Agreement. Immediately after such
date all unexercised Warrant Shares shall expire and be forfeited, and this Warrant shell
terminate.


 




    	 



    	 



    

 


(b)       The
Registered Holder may, at its option, elect to pay some or all of the Purchase Price payable upon an exercise of this Warrant by
canceling a portion of this Warrant exercisable for such number of Warrant Shares as is determined by dividing (i) the total Purchase
Price payable in respect of the number of Warrant Shares being purchased upon such exercise by (ii) the excess of the Fair Market
Value per share of Common Stock (as defined below) as of the Exercise Date (as defined in subsection 1(c) below) over the Purchase
Price per share. If the Registered Holder wishes to exercise this Warrant pursuant to this method of payment with respect to the
maximum number of Warrant Shares purchasable pursuant to this method, then the number of Warrant Shares so purchasable shall be
equal to the total number of Warrant Shares, minus the product obtained by multiplying (x) the total number of Warrant Shares by
(y) a fraction, the numerator of which shall be the Purchase Price per share and the denominator of which shall be the Fair Market
Value per share of Common Stock as of the Exercise Date. The Fair Market Value per share of Common Stock shall be determined as
follows:


 


(i)       If
the Common Stock is listed on a national securities exchange or another nationally recognized trading system as of the Exercise
Date, the Fair Market Value per share of Common Stock shall be deemed to be the average of the high and low reported sale prices
per share of Common Stock thereon on the trading day immediately preceding the Exercise Date (provided that if no such price is
reported on such day, the Fair Market Value per share of Common Stock shall be determined pursuant to clause (ii)).


 


(ii)       If
the Common Stock is not listed on a national securities exchange or another nationally recognized trading system as of the Exercise
Date, the Fair Market Value per share of Common Stock shall be deemed to be the amount most recently determined by the Board of
Directors to represent the fair market value per share of the Common Stock (including without limitation a determination for purposes
of granting Common Stock options or issuing Common Stock under an employee benefit plan of the Company); and, upon request of the
Registered Holder, the Board of Directors (or a representative thereof) shall promptly notify the Registered Holder of the Fair
Market Value per share of Common Stock. Notwithstanding the foregoing, if the Board of Directors has not made such a determination
within the three-month period prior to the Exercise Date, then (A) the Board of Directors shall make a determination of the Fair
Market Value per share of the Common Stock within 15 days of a request by the Registered Holder that it do so, and (B) the exercise
of this Warrant pursuant to this subsection 1(b) shall be delayed until such determination is made.


 


(c)       Each
exercise of this Warrant shall be deemed to have been effected immediately prior to the close of business on the day on which this
Warrant shall have been surrendered to the Company as provided in subsection 1(a) above (the “Exercise Date”). At such
time, the person or persons in whose name or names any certificates for Warrant Shares shall be issuable upon such exercise as
provided in subsection 1(d) below shall be deemed to have become the holder or holders of record of the Warrant Shares represented
by such certificates.


 


(d)       As
soon as practicable after the exercise of this Warrant in full or in part, and in any event within 10 days thereafter, the Company,
at its expense, will cause to be issued in the name of, and delivered to, the Registered Holder, or as such Holder (upon payment
by such Holder of any applicable transfer taxes) may direct:


 






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(i)       a
certificate or certificates for the number of full Warrant Shares to which the Registered Holder shall be entitled upon such exercise
plus, in lieu of any fractional share to which the Registered Holder would otherwise be entitled, cash in an amount determined
pursuant to Section 3 hereof; and


 


(ii)       in
case such exercise is in part only, a new warrant or warrants (dated the date hereof) of like tenor, calling in the aggregate on
the face or faces thereof for the number of Warrant Shares equal (without giving effect to any adjustment therein) to the number
of such shares called for on the face of this Warrant minus the sum of (a) the number of such shares purchased by the Registered
Holder upon such exercise plus (b) the number of Warrant Shares (if any) covered by the portion of this Warrant cancelled in payment
of the Purchase Price payable upon such exercise pursuant to subsection 1(b) above.


 


2.       Adjustments.


 


(a)       Adjustment
for Stock Splits and Combinations. If the Company shall at any time or from time to time after the date on which this Warrant
was first issued (the “Original Issue Date”) effect a subdivision of the outstanding Common Stock, the Purchase Price
then in effect immediately before that subdivision shall be proportionately decreased. If the Company shall at any time or from
time to time after the Original Issue Date combine the outstanding shares of Common Stock, the Purchase Price then in effect immediately
before the combination shall be proportionately increased. Any adjustment under this paragraph shall become effective at the close
of business on the date the subdivision or combination becomes effective.


 


(b)       Adjustment
for Certain Dividends and Distributions. In the event the Company at any time, or from time to time after the Original Issue
Date shall make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend
or other distribution payable in additional shares of Common Stock, then and in each such event the Purchase Price then in effect
immediately before such event shall be decreased as of the time of such issuance or, in the event such a record date shall have
been fixed, as of the close of business on such record date, by multiplying the Purchase Price then in effect by a fraction:


 


(1)       the
numerator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of
such issuance or the close of business on such record date, and


 


(2)       the
denominator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of
such issuance or the close of business on such record date plus the number of shares of Common Stock issuable in payment of such
dividend or distribution;


 


provided, however, if such record date shall have been fixed and such dividend is not fully paid or if
such distribution is not fully made on the date fixed therefor, the Purchase Price shall be recomputed accordingly as of the close
of business on such record date and thereafter the Purchase Price shall be adjusted pursuant to this paragraph as of the time of
actual payment of such dividends or distributions.


 






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(c)       Adjustment
in Number of Warrant Shares. When any adjustment is required to be made in the Purchase Price pursuant to subsections 2(a)
or 2(b), the number of Warrant Shares purchasable upon the exercise of this Warrant shall be changed to the number determined by
dividing (i) an amount equal to the number of shares issuable upon the exercise of this Warrant immediately prior to such adjustment,
multiplied by the Purchase Price in effect immediately prior to such adjustment, by (ii) the Purchase Price in effect immediately
after such adjustment.


 


(d)       Adjustments
for Other Dividends and Distributions. In the event the Company at any time or from time to time after the Original Issue Date
shall make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or other
distribution payable in securities of the Company (other than shares of Common Stock) or in cash or other property (other than
cash out of earnings or earned surplus, determined in accordance with generally accepted accounting principles), then and in each
such event provision shall be made so that the Registered Holder shall receive upon exercise hereof, in addition to the number
of shares of Common Stock issuable hereunder, the kind and amount of securities of the Company and/or cash and other property which
the Registered Holder would have been entitled to receive had this Warrant been exercised into Common Stock on the date of such
event and had the Registered Holder thereafter, during the period from the date of such event to and including the Exercise Date,
retained any such securities receivable, giving application to all adjustments called for during such period under this Section
2 with respect to the rights of the Registered Holder.


 


(e)       Adjustment
for Mergers or Reorganizations, etc. If there shall occur any reorganization, recapitalization, consolidation or merger involving
the Company in which the Common Stock is converted into or exchanged for securities, cash or other property (other than a transaction
covered by subsections 2(a), 2(b) or 2(d)), then, following any such reorganization, recapitalization, consolidation or merger,
the Registered Holder shall receive upon exercise hereof the kind and amount of securities, cash or other property which the Registered
Holder would have been entitled to receive if, immediately prior to such reorganization, recapitalization, consolidation or merger,
the Registered Holder had held the number of shares of Common Stock subject to this Warrant. In any such case, appropriate adjustment
(as determined in good faith by the Board of Directors of the Company) shall be made in the application of the provisions set
forth herein with respect to the rights and interests thereafter of the Registered Holder, to the end that the provisions set
forth in this Section 2 (including provisions with respect to changes in and other adjustments of the Purchase Price) shall thereafter
be applicable, as nearly as reasonably may be, in relation to any securities, cash or other property thereafter deliverable upon
the exercise of this Warrant.


 






    	- 4 -



    	 



    

 


(f)       Certificate
as to Adjustments. Upon the occurrence of each adjustment or readjustment of the Purchase Price pursuant to this Section 2,
the Company at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish
to the Registered Holder a certificate setting forth such adjustment or readjustment (including the kind and amount of securities,
cash or other property for which this Warrant shall be exercisable and the Purchase Price) and showing in detail the facts upon
which such adjustment or readjustment is based. The Company shall, upon the written request at any time of the Registered Holder,
furnish or cause to be furnished to the Registered Holder a certificate setting forth (i) the Purchase Price then in effect and
(ii) the number of shares of Common Stock and the amount, if any, of other securities, cash or property which then would be received
upon the exercise of this Warrant.


 


3.       Fractional
Shares. The Company shall not be required upon the exercise of this Warrant to issue any fractional shares, but shall make
an adjustment therefor in cash on the basis of the Fair Market Value per share of Common Stock, as determined pursuant to subsection
1(b) above.


 


4.       Requirements
for Transfer.


 


(a)       This
Warrant and the Warrant Shares shall not be sold or transferred unless either (i) they first shall have been registered under the
Securities Act of 1933, as amended (the “Act”), or (ii) the Company first shall have been furnished with an opinion
of legal counsel, reasonably satisfactory to the Company, to the effect that such sale or transfer is exempt from the registration
requirements of the Act.


 


(b)       Notwithstanding
the foregoing, no registration or opinion of counsel shall be required for (i) a transfer by a Registered Holder which is a corporation
to a wholly owned subsidiary of such corporation, a transfer by a Registered Holder which is a partnership to a partner of such
partnership or a retired partner of such partnership or to the estate of any such partner or retired partner, or a transfer by
a Registered Holder which is a limited liability company to a member of such limited liability company or a retired member or to
the estate of any such member or retired member, provided that the transferee in each case agrees in writing to be subject to the
terms of this Section 4, or (ii) a transfer made in accordance with Rule 144 under the Act.


 


(c)       Each
certificate representing Warrant Shares shall bear a legend substantially in the following form:


 


“The
securities represented by this certificate have not been registered under the Securities Act of 1933, as amended, and may not be
offered, sold or otherwise transferred, pledged or hypothecated unless and until such securities arc registered under such Act
or an opinion of counsel satisfactory to the Company is obtained to the effect that such registration is not required.”


 


5.        No
Impairment. The Company will not, by amendment of its charter or through reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in order to protect the rights of the holder of this Warrant against
impairment.


 






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6.       Notices
of Record Date, etc. In the event:


 


(a)       the
Company shall take a record of the holders of its Common Stock (or other stock or securities at the time deliverable upon the exercise
of this Warrant) for the purpose of entitling or enabling them to receive any dividend or other distribution, or to receive any
right to subscribe for or purchase any shares of stock of any class or any other securities, or to receive any other right; or


 


(b)       of
any capital reorganization of the Company, any reclassification of the Common Stock of the Company, any consolidation or
merger of the Company with or into another corporation (other than a consolidation or merger in which the Company is the
surviving entity and its Common Stock is not converted into or exchanged for any other securities or property), or any
transfer of all or substantially all of the assets of the Company; or


 


(c)       of
the voluntary or involuntary dissolution, liquidation or winding-up of the Company,


 


then, and in each such case, the Company will
mail or cause to be mailed to the Registered Holder a notice specifying, as the case may be, (i) the record date for such dividend,
distribution or right, and the amount and character of such dividend, distribution or right, or (ii) the effective date on which
such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up is to take place,
and the time, if any is to be fixed, as of which the holders of record of Common Stock (or such other stock or securities at the
time deliverable upon the exercise of this Warrant) shall be entitled to exchange their shares of Common Stock (or such other stock
or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger,
transfer, dissolution, liquidation or winding-up. Such notice shall be mailed at least ten days prior to the record date or effective
date for the event specified in such notice.


 


7.       Reservation
of Stock. The Company will at all times reserve and keep available, solely for issuance and delivery upon the exercise of this
Warrant, such number of Warrant Shares and other securities, cash and/or property, as from time to time shall be issuable upon
the exercise of this Warrant.


 


8.       Exchange
of Warrants. Upon the surrender by the Registered Holder, properly endorsed, to the Company at the principal office of the
Company, the Company will, subject to the provisions of Section 4 hereof, issue and deliver to or upon the order of such Holder,
at the Company’s expense, a new Warrant or Warrants of like tenor, in the name of the Registered Holder or as the Registered
Holder (upon payment by the Registered Holder of any applicable transfer taxes) may direct, calling in the aggregate on the face
or faces thereof for the number of shares of Common Stock (or other securities, cash and/or property) then issuable upon exercise
of this Warrant.


 






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9.       Replacement
of Warrants. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation
of this Warrant and (in the case of loss, theft or destruction) upon delivery of an indemnity agreement (with surety if reasonably
required) in an amount reasonably satisfactory to the Company, or (in the case of mutilation) upon surrender and cancellation of
this Warrant, the Company will issue, in lieu thereof, a new Warrant of like tenor.


 


10.       Transfers,
etc.


 


(a)       The
Company will maintain a register containing the name and address of the Registered Holder of this Warrant. The Registered Holder
may change its or his address as shown on the warrant register by written notice to the Company requesting such change.


 


(b)       Subject
to the provisions of Section 4 hereof, this Warrant and all rights hereunder are transferable, in whole or in part, upon surrender
of this Warrant with a properly executed assignment (in the form of Exhibit II hereto) at the principal office of the Company.


 


(c)       Until
any transfer of this Warrant is made in the warrant register, the Company may treat the Registered Holder as the absolute owner
hereof for all purposes; provided, however, that if and when this Warrant is properly assigned in blank, the Company
may (but shall not be obligated to) treat the bearer hereof as the absolute owner hereof for all purposes, notwithstanding any
notice to the contrary.


 


11.       Mailing
of Notices, etc. All notices and other communications from the Company to the Registered Holder shall be mailed by first-class
certified or registered mail, postage prepaid, to the address last furnished to the Company in writing by the Registered Holder.
All notices and other communications from the Registered Holder or in connection herewith to the Company shall be mailed by first-class
certified or registered mail, postage prepaid, to the Company at its principal office set forth below. If the Company should at
any time change the location of its principal office to a place other than as set forth below, it shall give prompt written notice
to the Registered Holder and thereafter all references in this Warrant to the location of its principal office at the particular
time shall be as so specified in such notice.


 


12.       No
Rights as Stockholder. Until the exercise of this Warrant, the Registered Holder shall not have or exercise any rights
by virtue hereof as a stockholder of the Company. Notwithstanding the foregoing, in the event (i) the Company effects a split
of the Common Stock by means of a stock dividend and the Purchase Price of and the number of Warrant Shares are adjusted as
of the date of the distribution of the dividend (rather than as of the record date for such dividend), and
(ii) the Registered Holder exercises this Warrant between the record date and
the distribution date for such stock dividend, the Registered Holder shall be entitled to receive, on the distribution date,
the stock dividend with respect to the shares of Common Stock acquired upon such exercise, notwithstanding the fact that such
shares were not outstanding as of the close of business on the record date for such stock dividend.


  




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13.       Change
or Waiver. Any term of this Warrant may be changed or waived only by an instrument in writing signed by the party against which
enforcement of the change or waiver is sought.


 


14.       Section
Headings. The section headings in this Warrant are for the convenience of the parties and in no way alter, modify, amend, limit
or restrict the contractual obligations of the parties.


 


15.       Governing
Law. This Warrant will be governed by and construed in accordance with the internal laws of the State of Delaware (without
reference to the conflicts of law provisions thereof).


  




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EXECUTED
as of the date of set forth below.


 


	 	BRAINSTORM CELL THERAPEUTICS, INC.
	 	 
	 	By:	Liat 
    Sossover
	 	 	 
	 	Title:	CFO
	 	 	 
	 	Date:	April 13, 2012


 


[Corporate Seal]


 


	ATTEST:	 
	 	 
	/s/Illegible 	 
	 	 
	Hadasit	 
	Medical Research Services &	 
	Development Ltd.	 


 


April 23, 2012


 




    	- 9 -



    	 



    

 


EXHIBIT I


 


PURCHASE
FORM


 


	To:_____________	Dated:___________


 


The
undersigned, pursuant to the provisions set forth in the attached Warrant (No. ___), hereby irrevocably elects to purchase (check
applicable box):


 


		0	______ shares of the Common Stock covered by such Warrant; or



 


		0	the maximum number of shares of Common Stock covered by such Warrant pursuant to the cashless exercise
procedure set forth in Section 1(b).



 


The
undersigned herewith makes payment of the full purchase price for such shares at the price per share provided for in such Warrant,
which is $_____. Such payment takes the form of (check applicable box or boxes):


 


		0	$______ in lawful money of the United States; and/or



 


		0	the cancellation of such portion of the attached Warrant as is exercisable for a total of
                                                             ______ Warrant Shares (using a Fair Market Value of $_____ per share for purposes of this calculation); and/or



 


		0	the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula
set forth in Section 1(b), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to
the cashless exercise procedure set forth in Section 1(b).



 


	 	Signature:
  	 
	 	 	 
	 	Address:	 
	 	 	 
	 	 	 


 




    	- 10 -



    	 



    

 


EXHIBIT II


 


ASSIGNMENT
FORM


 


FOR VALUE
RECEIVED, __________________________________ hereby sells, assigns and transfers all of the rights of the undersigned under the
attached Warrant (No. ___) with respect to the number of shares of Common Stock covered thereby set forth below, unto:


 


	Name of Assignee	 	Address	 	No. of Shares
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 


 


	Dated:	 	Signature:	 
	 
	Signature Guaranteed:
	 	 
	By:	 	 


 


The signature
should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions
with membership in an approved signature guarantee medallion program) pursuant to Rule 17Ad-15 under the Securities Exchange Act
of 1934.


 




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