Document:

Exhibit 10.4

THIS WARRANT AND THE COMMON  SHARES  ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THIS WARRANT
AND THE COMMON  SHARES  ISSUABLE  UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD,
OFFERED  FOR SALE,  PLEDGED  OR  HYPOTHECATED  IN THE  ABSENCE  OF AN  EFFECTIVE
REGISTRATION  STATEMENT  UNDER  SAID ACT OR AN  OPINION  OF  COUNSEL  REASONABLY
SATISFACTORY TO BRAINSTORM CELL  THERAPEUTICS INC. THAT SUCH REGISTRATION IS NOT
REQUIRED.

              Right to Purchase 6,363,849 shares of Common Stock of
                        BrainStorm Cell Therapeutics Inc.
                   (subject to adjustment as provided herein)

COMMON STOCK PURCHASE WARRANT AT $0.01 PER SHARE

No.                                     Issue Date: November 4, 2004

         BRAINSTORM CELL  THERAPEUTICS  INC., a corporation  organized under the
laws of the State of Washington  (the  "Company"),  hereby  certifies  that, for
value received, Ramot at Tel-Aviv University Ltd. or its assigns (the "Holder"),
is entitled,  subject to the terms set forth below, to purchase from the Company
at any time  after  the one year  anniversary  of the Issue  Date (the  "Vesting
Date") up to 5:00 p.m.,  E.S.T on the SIXTH  anniversary  of the Issue Date (the
"Expiration  Date"), up to 6,363,849 fully paid and nonassessable  shares of the
common stock of the Company (the "Common Stock"), $.00005 par value per share at
a per share  purchase  price of $0.01.  The  aforedescribed  purchase  price per
share, as adjusted from time to time as herein  provided,  is referred to herein
as the "Purchase Price." The number and character of such shares of Common Stock
and the  Purchase  Price are  subject to  adjustment  as provided  herein.  This
Warrant  is  that  certain  Warrant  referred  to in the  Research  and  License
Agreement  dated July 8, 2004  between the Company and the Holder (the  "License
Agreement").

         This Warrant,  when issued and  delivered in accordance  with the terms
hereof will be duly authorized and validly issued, and the Common Stock issuable
upon the  exercise  hereof,  when issued  pursuant to the terms  hereof and upon
payment of the exercise price,  shall,  upon such issuance,  be duly authorized,
validly issued, fully paid and nonassessable.

         As used  herein  the  following  terms,  unless the  context  otherwise
requires, have the following respective meanings:

         (a) The term "Company" means Brainstorm Cell  Therapeutics Inc. and any
corporation  which shall succeed or assume the  obligations  of Brainstorm  Cell
Therapeutics  Inc.  hereunder.

         (b) The term "Common  Stock"  includes (a) the Company's  Common Stock,
$.00005 par value per share, as authorized on the date hereof, and (b) any other
securities into which or for which any of the securities described in (a) may be
converted or exchanged pursuant to a plan of  recapitalization,  reorganization,
merger, sale of assets or otherwise.

         (c) The term "Other  Securities" refers to any stock (other than Common
Stock) and other  securities  of the Company or any other person  (corporate  or
otherwise)  which the holder of the  Warrant at any time  shall be  entitled  to
receive,  or shall have received,  on the exercise of the Warrant, in lieu of or
in  addition  to Common  Stock,  or which at any time shall be issuable or shall
have been  issued in exchange  for or in  replacement  of Common  Stock or Other
Securities pursuant to Section 4 or otherwise.

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<PAGE>

         1. Exercise of Warrant.

                  1.1. Number of Shares  Issuable upon Exercise.  From and after
the Vesting Date through and including the  Expiration  Date,  the Holder hereof
shall  be  entitled  to  receive,  upon  exercise  of this  Warrant  in whole in
accordance  with the terms of subsection 1.2 or upon exercise of this Warrant in
part in accordance  with  subsection 1.3, shares of Common Stock of the Company,
subject to adjustment  pursuant to Section 4. This Warrant is fully vested as of
the Vesting Date.

                  1.2. Full  Exercise.  This Warrant may be exercised in full by
the Holder  hereof by delivery of an original or  facsimile  copy of the form of
subscription  attached  as  Exhibit  A hereto  (the  "Subscription  Form")  duly
executed by such Holder and surrender of the original  Warrant  within seven (7)
days of exercise, to the Company at its principal office or at the office of its
Warrant Agent (as provided  hereinafter),  accompanied by payment, in cash, wire
transfer  or by  certified  or official  bank check  payable to the order of the
Company,  in the amount  obtained by multiplying  the number of shares of Common
Stock for which this Warrant is then  exercisable  by the Purchase Price then in
effect.

                  1.3. Partial  Exercise.  This Warrant may be exercised in part
(but not for a fractional  share) by surrender of this Warrant in the manner and
at the place  provided in subsection  1.2 except that the amount  payable by the
Holder on such partial  exercise shall be the amount obtained by multiplying (a)
the  number of whole  shares of Common  Stock  designated  by the  Holder in the
Subscription  Form by (b) the Purchase Price then in effect. On any such partial
exercise,  the Company,  at its expense,  will forthwith issue and deliver to or
upon the order of the Holder hereof a new Warrant of like tenor,  in the name of
the Holder  hereof,  the whole  number of shares of Common  Stock for which such
Warrant may still be exercised.

                  1.4. Fair Market Value. Fair Market Value of a share of Common
Stock as of a particular date (the "Determination Date") shall mean:

                           (a) If the  Company's  Common  Stock is  traded on an
exchange or is quoted on the National  Association of Securities  Dealers,  Inc.
Automated  Quotation  ("NASDAQ"),  National  Market System,  the NASDAQ SmallCap
Market or the American Stock Exchange, LLC, then the closing or last sale price,
respectively,  reported for the last  business  day  immediately  preceding  the
Determination Date;

                           (b) If the Company's Common Stock is not traded on an
exchange or on the NASDAQ National Market System,  the NASDAQ SmallCap Market or
the American Stock Exchange, Inc., but is traded in the over-the-counter market,
then  the  average  of the  closing  bid and ask  prices  reported  for the last
business day immediately preceding the Determination Date;

                           (c) Except as  provided  in clause (d) below,  if the
Company's  Common  Stock is not  publicly  traded,  then as the  Holder  and the
Company  agree,  or in the  absence  of such an  agreement,  by  arbitration  in
accordance with the rules then standing of the American Arbitration Association,
before a single  arbitrator  to be chosen from a panel of persons  qualified  by
education and training to pass on the matter to be decided; or

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<PAGE>

                           (d) If  the  Determination  Date  is  the  date  of a
liquidation, dissolution or winding up, or any event deemed to be a liquidation,
dissolution or winding up pursuant to the Company's charter, then all amounts to
be payable per share to holders of the Common  Stock  pursuant to the charter in
the event of such liquidation, dissolution or winding up, plus all other amounts
to be payable per share in respect of the Common Stock in liquidation  under the
charter,  assuming for the purposes of this clause (d) that all of the shares of
Common Stock then issuable upon exercise of all of the Warrants are  outstanding
at the Determination Date.

                  1.5. Company Acknowledgment.  The Company will, at the time of
the exercise of the Warrant,  upon the request of the Holder hereof  acknowledge
in writing  its  continuing  obligation  to afford to such  Holder any rights to
which  such  Holder  shall  continue  to be  entitled  after  such  exercise  in
accordance with the provisions of this Warrant. If the Holder shall fail to make
any such request, such failure shall not affect the continuing obligation of the
Company to afford to such Holder any such rights.

                  1.6. Trustee for Warrant Holders.  In the event that a bank or
trust  company  shall  have been  appointed  as  trustee  for the  Holder of the
Warrants  pursuant to Subsection  3.2, such bank or trust company shall have all
the powers and duties of a warrant agent (as  hereinafter  described)  and shall
accept,  in its own name for the account of the Company or such successor person
as may be entitled thereto, all amounts otherwise payable to the Company or such
successor,  as the case may be, on  exercise  of this  Warrant  pursuant to this
Section 1.

                  1.7  Delivery of Stock  Certificates,  etc. on  Exercise.  The
Company  agrees that the shares of Common Stock  purchased upon exercise of this
Warrant shall be deemed to be issued to the Holder hereof as the record owner of
such shares as of the close of business on the date on which this Warrant  shall
have been surrendered and payment made for such shares as aforesaid.  As soon as
practicable  after the exercise of this  Warrant in full or in part,  and in any
event  within ten (10)  business  days  thereafter,  the  Company at its expense
(including  the payment by it of any  applicable  issue  taxes) will cause to be
issued in the name of and  delivered  to the Holder  hereof,  or as such  Holder
(upon  payment by such Holder of any  applicable  transfer  taxes) may direct in
compliance with applicable  securities  laws, a certificate or certificates  for
the number of duly and validly issued,  fully paid and  nonassessable  shares of
Common  Stock (or Other  Securities)  to which such Holder  shall be entitled on
such exercise,  plus, in lieu of any fractional share to which such Holder would
otherwise be entitled,  cash equal to such fraction  multiplied by the then Fair
Market Value of one full share of Common Stock, together with any other stock or
other securities and property  (including cash, where  applicable) to which such
Holder is entitled upon such exercise pursuant to Section 1 or otherwise.

         2. Exercise.

                  (a)  Payment  upon  exercise  may be made at the option of the
Holder either in (i) cash,  wire transfer or by certified or official bank check
payable to the order of the Company equal to the applicable  aggregate  Purchase
Price,  (ii) by delivery of Common Stock  issuable upon exercise of the Warrants
in  accordance  with Section (b) below or (iii) by a  combination  of any of the
foregoing  methods,  for the number of Common  Stock  specified in such form (as
such  exercise  number shall be adjusted to reflect any  adjustment in the total
number of shares of Common  Stock  issuable  to the holder per the terms of this
Warrant)  and the holder  shall  thereupon  be entitled to receive the number of
duly authorized,  validly issued, fully-paid and non-assessable shares of Common
Stock (or Other Securities) determined as provided herein.

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<PAGE>

                  (b) In lieu of exercising this Warrant for cash, wire transfer
or certified or official  bank  cheque,  the holder may elect to receive  shares
equal to the value (as determined below) of this Warrant (or the portion thereof
being  cancelled)  by surrender of this Warrant at the  principal  office of the
Company together with the properly endorsed Subscription Form in which event the
Company  shall issue to the holder a number of shares of Common  Stock  computed
using the following formula:

                           X=Y (A-B)
                           ---------
                               A

                  Where    X=       the number of shares of Common Stock to be
                                    issued to the holder

                           Y=       the   number  of  shares  of  Common   Stock
                                    purchasable  under the Warrant or, if only a
                                    portion of the  Warrant is being  exercised,
                                    the portion of the Warrant  being  exercised
                                    (at the date of such calculation)

                           A=       the Fair  Market  Value of one  share of the
                                    Company's  Common Stock (at the date of such
                                    calculation)

                           B=       Purchase  Price (as  adjusted to the date of
                                    such calculation).

         3. Adjustment for Reorganization, Consolidation, Merger, etc.

                  3.1.  Reorganization,  Consolidation,  Merger, etc. In case at
any time or from time to time,  the Company  shall (a) effect a  reorganization,
(b)  consolidate  with or merge  into any other  person or (c)  transfer  all or
substantially all of its properties or assets to any other person under any plan
or arrangement  contemplating the dissolution of the Company, then, in each such
case,  as a condition  to the  consummation  of such a  transaction,  proper and
adequate  provision  shall be made by the  Company  whereby  the  Holder of this
Warrant,  on the exercise hereof as provided in Section 1, at any time after the
consummation of such  reorganization,  consolidation  or merger or the effective
date of such  dissolution,  as the case may be,  shall  receive,  in lieu of the
Common  Stock (or Other  Securities)  issuable  on such  exercise  prior to such
consummation or such effective date, the stock and other securities and property
(including  cash) to which  such  Holder  would  have  been  entitled  upon such
consummation or in connection with such dissolution, as the case may be, if such
Holder had so exercised this Warrant,  immediately prior thereto, all subject to
further adjustment thereafter as provided in Section 4.

                  3.2.  Dissolution.  In the  event  of any  dissolution  of the
Company  following the transfer of all or substantially all of its properties or
assets, the Company, prior to such dissolution,  shall at its expense deliver or
cause to be delivered  the stock and other  securities  and property  (including
cash,  where  applicable)  receivable  by the Holder of the  Warrants  after the
effective date of such dissolution pursuant to this Section 3 to a bank or trust
company (a "Trustee") as trustee for the Holder of the Warrants.

                                       4
<PAGE>

                  3.3.   Continuation   of  Terms.   Upon  any   reorganization,
consolidation,  merger or transfer (and any dissolution  following any transfer)
referred to in this  Section 3, this  Warrant  shall  continue in full force and
effect and the terms  hereof shall be  applicable  to the Other  Securities  and
property  receivable on the exercise of this Warrant after the  consummation  of
such   reorganization,   consolidation  or  merger  or  the  effective  date  of
dissolution  following  any such  transfer,  as the case  may be,  and  shall be
binding upon the issuer of any Other Securities,  including,  in the case of any
such transfer,  the person acquiring all or substantially  all of the properties
or assets of the  Company,  whether  or not such  person  shall  have  expressly
assumed  the terms of this  Warrant as  provided in Section 4. In the event this
Warrant does not continue in full force and effect after the consummation of the
transaction  described  in this  Section  3,  then only in such  event  will the
Company's securities and property (including cash, where applicable)  receivable
by the Holder of the  Warrants be delivered  to the Trustee as  contemplated  by
Section 3.2.

         4.  Extraordinary  Events Regarding Common Stock. In the event that the
Company shall (a) issue  additional  shares of the Common Stock as a dividend or
other  distribution on outstanding  Common Stock,  (b) subdivide its outstanding
shares of Common  Stock,  or (c)  combine its  outstanding  shares of the Common
Stock into a smaller  number of shares of the Common  Stock,  then, in each such
event,  the Purchase  Price  shall,  simultaneously  with the  happening of such
event,  be adjusted by multiplying  the then Purchase  Price by a fraction,  the
numerator  of which  shall be the number of shares of Common  Stock  outstanding
immediately prior to such event and the denominator of which shall be the number
of shares of Common  Stock  outstanding  immediately  after such event,  and the
product so obtained shall  thereafter be the Purchase Price then in effect.  The
Purchase Price, as so adjusted,  shall be readjusted in the same manner upon the
happening of any successive  event or events described herein in this Section 4.
The  number of shares of Common  Stock  that the  Holder of this  Warrant  shall
thereafter,  on the  exercise  hereof as  provided  in Section 1, be entitled to
receive shall be adjusted to a number  determined by  multiplying  the number of
shares of Common  Stock that would  otherwise  (but for the  provisions  of this
Section 4) be issuable on such exercise by a fraction of which (a) the numerator
is the  Purchase  Price that would  otherwise  (but for the  provisions  of this
Section 4) be in effect, and (b) the denominator is the Purchase Price in effect
on the date of such exercise.

         5.  Certificate  as to  Adjustments.  In each case of any adjustment or
readjustment in the shares of Common Stock (or Other Securities) issuable on the
exercise of the  Warrants,  the Company at its expense will  promptly  cause its
Chief Financial Officer or other appropriate designee to compute such adjustment
or  readjustment  in  accordance  with the terms of the  Warrant  and  prepare a
certificate  setting forth such adjustment or readjustment and showing in detail
the facts upon which such  adjustment  or  readjustment  is based,  including  a
statement of (a) the consideration received or receivable by the Company for any
additional shares of Common Stock (or Other Securities) issued or sold or deemed
to have been issued or sold,  (b) the number of shares of Common Stock (or Other
Securities) outstanding or deemed to be outstanding,  and (c) the Purchase Price
and the number of shares of Common  Stock to be received  upon  exercise of this
Warrant,  in effect  immediately prior to such adjustment or readjustment and as
adjusted or readjusted as provided in this Warrant.  The Company will  forthwith
mail a copy of each  such  certificate  to the  Holder  of the  Warrant  and any
Warrant Agent of the Company (appointed pursuant to Section 11 hereof).

                                       5
<PAGE>

         6.  Reservation  of Stock,  etc.  Issuable on Exercise of Warrant.  The
Company will at all times  reserve and keep  available,  solely for issuance and
delivery on the exercise of the  Warrants,  all shares of Common Stock (or Other
Securities) from time to time issuable on the exercise of the Warrant.  Prior to
the exercise of this  Warrant,  the holder  shall not be entitled,  by virtue of
holding this Warrant,  to any rights of a stockholder of the Company,  including
(without limitation) the right to vote, receive dividends or other distributions
or be notified of stockholder meetings, and such holder shall not be entitled to
any notice or other  communication  concerning  the  business  or affairs of the
Company).

         7. Assignment; Exchange of Warrant. This Warrant is non-transferable by
the Holder and any purported transfer hereof is null and void,  except,  subject
to compliance with applicable  securities  laws, in the event of a transfer to a
Permitted Transferee of the Holder (the "Transferor").  For the purposes of this
Article 7, the term "Permitted Transferee" shall mean

                  (a)      with respect to any Holder that is an entity, (1) any
                           party that is,  directly or indirectly,  controlling,
                           controlled  by or under  common  control  with,  that
                           Holder,  where  the  term  "control"  (including  its
                           correlative   meanings,   the  terms   "controlling",
                           "controlled by" and "under common control with"),  as
                           used  with  respect  to any  party,  shall  mean  the
                           possession,  directly or indirectly,  of the power to
                           direct  or  cause  the  direction  of the  other  and
                           policies of the Holder, whether through the ownership
                           of voting  securities,  by contract or otherwise  (an
                           "Affiliate"),  (2) any general or limited  partner of
                           that Holder (a "Partner"),  (3) any officer,  general
                           partner,  director or limited  partner of that Holder
                           or any Partner (collectively,  "Associates"), (4) the
                           heirs,   executors,   administrators,    testamentary
                           trustees, legatees or beneficiaries of any Associate,
                           (5) any  trust,  corporation,  partnership  or  other
                           entity  substantially  all the economic  interests of
                           which are held by or for the benefit of that  Holder,
                           its  Affiliates,   any  Partner,   Associate,   their
                           spouses,   children,   parents,    grandparents   and
                           grandchildren (whether by birth or adoption); and

                  (b)      with respect to any Holder that is an individual, (1)
                           the spouse,  children,  parents and grandchildren (in
                           each  case,  whether  by  birth or  adopted)  of that
                           Holder,  (2) a person to whom Company  Securities are
                           transferred  by that  Holder  by will or the  laws of
                           descent, inheritance and distribution and (3) a trust
                           established for the exclusive  benefit of that Holder
                           and/or his or her Permitted Transferees;

         provided that a person or party shall only be a Permitted Transferee of
a Holder for so long as the facts and  circumstances  giving rise to that status
do not change in a manner  that  would  result in that party or person no longer
being such a Permitted Transferee after that change.

         On the surrender for exchange of this  Warrant,  with the  Transferor's
endorsement  in  the  form  of  Exhibit  B  attached  hereto  (the   "Transferor
Endorsement   Form")  and  together  with  an  opinion  of  counsel   reasonably
satisfactory  to the  Company  that  the  transfer  of this  Warrant  will be in
compliance with applicable securities laws, the Company at its expense, but with
payment by the  Transferor  of any  applicable  transfer  taxes,  will issue and
deliver to or on the order of the  Transferor  thereof a new Warrant or Warrants
of like tenor, in the name of the Transferor and/or the Permitted  Transferee(s)
specified in such Transferor  Endorsement Form,  calling in the aggregate on the
face or faces thereof for the number of shares of Common Stock called for on the
face or faces of the Warrant so surrendered by the Transferor. No such transfers
shall result in a public distribution of the Warrant; and the Company shall only
be  responsible  for  "blue  sky"  compliance  expenses  for  resales  under any
registration  statement filed in accordance with agreements  between the Company
and the Holder for two (2) such  transfers to two (2)  applicable  states of the
United States only.

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<PAGE>

         Upon the issue to the Transferor of the new Warrant or Warrants of like
tenor,  in the  name  of  the  Transferor  and/or  the  Permitted  Transferee(s)
specified in such Transferor  Endorsement  Form, the Permitted  Transferee shall
execute any and all  agreements  of the Company to which  Transferor is a party,
and shall become party thereto.

         8.   Replacement  of  Warrant.   On  receipt  of  evidence   reasonably
satisfactory  to the Company of the loss,  theft,  destruction  or mutilation of
this Warrant  and, in the case of any such loss,  theft or  destruction  of this
Warrant,   on  delivery  of  an  indemnity   agreement  or  security  reasonably
satisfactory  in form and  amount  to the  Company  or,  in the case of any such
mutilation,  on surrender and  cancellation of this Warrant,  the Company at its
expense will execute and deliver, in lieu thereof, a new Warrant of like tenor.

         9.  Registration  Rights.  The Company agrees to register the shares of
Common Stock underlying this Warrant (whether by demand, piggy back registration
or  otherwise)  by no later than  December 31, 2006,  and agrees to maintain the
effectiveness of a registration statement covering such shares until the earlier
of (i) the time at which all of the shares  underlying  the warrant then held by
the  Holder  could be sold in any 90 day period  pursuant  to Rule 144 under the
Securities Act or (ii) the expiration  date of the warrant.  These  registration
rights shall be set forth fully in a separate  registration  rights agreement to
be entered into between the Company and the Holder

         10. Notices. All notices, demands, requests,  consents,  approvals, and
other  communications  required or permitted  hereunder shall be in writing and,
unless  otherwise  specified  herein,  shall  be  (i)  personally  served,  (ii)
deposited  in the mail,  registered  or  certified,  return  receipt  requested,
postage  prepaid,  (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed
as set forth below or to such other  address as such party shall have  specified
most recently by written notice. Any notice or other  communication  required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or  delivery  by  facsimile,   with  accurate  confirmation   generated  by  the
transmitting  facsimile  machine,  at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received),  or the first  business day following  such delivery (if delivered
other than on a business day during normal  business  hours where such notice is
to be received) or (b) on the second  business day following the date of mailing
by express courier service,  fully prepaid,  addressed to such address,  or upon
actual receipt of such mailing,  whichever shall first occur.  The addresses for
such communications shall be:

         (i) if to the Company to: 1350 Avenue of Americas, New York, NY 10019to
such other address as specified by the Company.

         (ii) if to the Holder, to_____________________________ or to such other
address as specified by the Holder.

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<PAGE>

         11.  Securities  Matters.  In order to make  available  the benefits of
certain  rules  and  regulations  of the  Securities  Exchange  Commission  (the
"Commission"),  including without  limitation Rule 144 and any successor rule or
regulation of the Commission, that may at any time permit the sale of the shares
of Common Stock  issuable  upon  exercise of this Warrant to the public  without
registration,  the Company  agrees (i) to file in a timely  manner all  reports,
statements  and  other  information  and  documents  required  to be filed by it
pursuant  to  Section 13 or 15(d) of the  Securities  Exchange  Act of 1934,  as
amended (the "Exchange  Act"), and (ii) whether or not the Company is subject to
the  reporting  and other  filing  requirements  of  Section  13 or 15(d) of the
Exchange Act, to file with the  Commission  and,  within fifteen (15) days after
the date if would be required to file such  reports  with the  Commission  if it
were subject to such  reporting  and other filing  requirements  of the Exchange
Act, to deliver to the holder of this Warrant all such reports,  information and
other  documents as it would be required to file with the  Commission if it were
subject  to the  requirements  of Section  13 of 15(d) of the  Exchange  Act and
otherwise to make and keep publicly  available all such  information  concerning
the  Company  as shall be  necessary  to enable  the  holder to comply  with the
aforementioned rules and regulations of the Commission.

         12.  Miscellaneous.  This  Warrant  and any term hereof may be changed,
waived,  discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought.  This Warrant shall be construed and enforced in accordance  with and
governed by the laws of Washington.  Any dispute  relating to this Warrant shall
be adjudicated in the State of Washington.  The headings in this Warrant are for
purposes of reference  only, and shall not limit or otherwise  affect any of the
terms hereof. The invalidity or  unenforceability  of any provision hereof shall
in no way affect the validity or enforceability of any other provision.

         IN WITNESS  WHEREOF,  the Company has  executed  this Warrant as of the
date first written above.

                                   BRAINSTORM CELL THERAPEUTICS INC.

                                   By:
                                      -----------------------------------
                                      Name:
                                      Title:

                                       8
<PAGE>

                                    EXHIBIT A

                              FORM OF SUBSCRIPTION
                   (to be signed only on exercise of Warrant)

TO:  BRAINSTORM CELL THERAPEUTICS INC.

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

         |_|      ________  shares of the Common Stock  covered by such Warrant,
                  or

         |_|      ________  shares  of  Common  Stock  covered  by such  Warrant
                  pursuant  to the  cashless  exercise  procedure  set  forth in
                  Section 2.

         |_|      the maximum  number of shares of Common Stock  covered by such
                  Warrant pursuant to the cashless exercise  procedure set forth
                  in Section 2.

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):

         |_|      $__________ in lawful money of the United States, and/or

         |_|      the cancellation of such portion of the attached Warrant as is
                  exercisable  for a total of  _______  shares of  Common  Stock
                  (using a Fair Market  Value of $_______ per share for purposes
                  of this calculation); and/or

         |_|      the  cancellation  of such number of shares of Common Stock as
                  is  necessary,  in  accordance  with the  formula set forth in
                  Section  2, to  exercise  this  Warrant  with  respect  to the
                  maximum number of shares of Common Stock purchasable  pursuant
                  to the cashless exercise procedure set forth in Section 2.

The undersigned requests that the certificates for such shares be issued in the
name of, and delivered to

_______________________________________________________________ whose address is

_______________________________________________________________________________.

The undersigned represents and warrants that all offers and sales by the
undersigned of the securities issuable upon exercise of the within Warrant shall
be made pursuant to registration of the Common Stock under the Securities Act of
1933,  as amended  (the  "Securities  Act"),  or pursuant to an  exemption  from
registration under the Securities Act.

Dated:___________________
                                       ----------------------------------------
                                      (Signature must conform to name of holder
                                       as specified on the face of the Warrant)

                                       ----------------------------------------

                                       ----------------------------------------
                                       (Address)

                                       9
<PAGE>

                                    EXHIBIT B

                         FORM OF TRANSFEROR ENDORSEMENT
                   (To be signed only on transfer of Warrant)

      For value received, the undersigned hereby sells, assigns, and transfers
unto the person(s)  named below under the heading  "Permitted  Transferees"  the
right represented by the within Warrant to purchase the percentage and number of
shares of Common Stock of BRAINSTORM CELL  THERAPEUTICS INC. to which the within
Warrant  relates  specified  under the  headings  "Percentage  Transferred"  and
"Number Transferred,"  respectively,  opposite the name(s) of such person(s) and
appoints each such person Attorney to transfer its respective right on the books
of BRAINSTORM  CELL  THERAPEUTICS  INC. with full power of  substitution  in the
premises.

--------------------------------------------------------------------------------

Permitted Transferees           Percentage Transferred        Number Transferred
---------------------           ----------------------        ------------------

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------

Dated:  ______________, ___________

                                     -----------------------------------------
                                     (Signature must conform to name of holder
                                     as specified on the face of the warrant)

Signed in the presence of:

-----------------------------        -----------------------------------------
         (Name)

                                     -----------------------------------------
                                       (address)

ACCEPTED AND AGREED:
                                     -----------------------------------------

[PERMITTED TRANSFEREE]
                                     -----------------------------------------
                                       (address)

--------------------------------
         (Name)Exhibit
        10.1

       

      PROMISSORY
        NOTE

       

    

    
      	
              $400,000

            	
              Effective
                Date:

               

              March
                31,2006
                

            

    

    

    For
      value
      received, OXIS INTERNATIONAL, INC., a Delaware corporation (“Oxis”)
      and
      each of the undersigned subsidiaries of Oxis, jointly and severally, hereby
      promise to pay, on or before the Maturity Date (as defined below), to the order
      of FAGAN
      CAPITAL INC., a Texas corporation (the
      "Lender"),
      the
      principal amount of FOUR
      HUNDRED THOUSAND
      AND 00/100 DOLLARS ($400,000.00),
      plus all accrued and unpaid interest thereon plus any other sums owing under
      or
      pursuant to this Note, all upon the terms and conditions set forth below.

     

    
      	 	
              1.

            	
              Definitions.
                For
                purposes of this Note, certain other capitalized terms used herein
                shall
                have the following meanings:

            

    

    

    
      	 	
              (a)

            	
              “Acceleration”
                is defined later herein. 

            

    

    

    
      	 	
              (b)

            	
              “Borrowers”
                shall mean Oxis and each of the undersigned subsidiaries of Oxis,
                individually, collectively, jointly, severally, and interchangeably
                any,
                each, and/or all of them. 

            

    

    

    
      	 	
              (c)

            	
              “Effective
                Date” shall mean March 31, 2006. 

            

    

    

    
      	 	
              (d)

            	
              “Event
                of Default” is defined later
                herein.

            

    

    

    
      	 	
              (e)

            	
              “Excluded
                Indebtedness” shall mean the following obligations of the Borrowers:
                

            

    

    

    
      	 	
              i.

            	
              The
                Existing Secured Debt in a principal amount not to exceed at any
                time
                $3,100,000, plus accrued interest thereon,
                plus

            

    

    
      	 	
              ii.

            	
              Any
                indebtedness which is specifically subordinated to this Note (and
                upon
                which no payments of principal can be made while any Financial Obligations
                are outstanding). 

            

    

    

    
      	 	
              (f)

            	
              “Existing
                Secured Debt” shall mean the existing loan due by Borrowers to Bridge Bank
                N.A. whose address is 2120 El Camino Real, Santa Clara, CA 95050.,
                

            

    

    

    
      	 	
              (g)

            	
              “Financial
                Obligations” shall mean collectively, the principal amount of this Note,
                plus all accrued and unpaid interest thereon, plus any other sums
                owing
                under this Note.

            

    

    

    
      	 	
              (h)

            	
              “Fundamental
                Transaction” is defined later
                herein.

            

    

    

    
      	 	
              (i)

            	
              “Indebtedness”
                shall mean all indebtedness of the Borrowers (inclusive of the Financial
                Obligations), as the term indebtedness is generally understood;
                provided
                that the term Indebtedness specifically shall not include normal
                course
                trade debt and normal course accrued expenses which are generally
                being
                paid when due. 

            

    

    

    
      	 	
              (j)

            	
              “Indemnified
                Party” is defined later herein.

            

    

    

    
      	 	
              (k)

            	
              “Lien”
                shall mean a lien and/or security interest.

            

    

    

    
      	 	
              (l)

            	
              “Maturity
                Date” is defined later herein.

            

    

    

    
      	 	
              (m)

            	
              “Maximum
                Legal Rate” shall mean the highest legal non-usurious interest rate
                permissible by law from time to time under the laws of the State
                of Texas
                or the federal laws of the United States, or the laws of an applicable
                foreign jurisdiction in the case of non-U.S. companies, as the case
                may
                be, whichever applicable laws allow the highest rate of interest
                to be
                charged on all amounts due under the
                Note.

            

    

    

    
      	 	
              (n)

            	
              “Non-Permitted
                Event” is defined later herein.

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	 	
              (o)

            	
              “Note”
                shall mean this Promissory Note.

            

    

    

    
      	 	
              (p)

            	
              “Permitted
                Lien” shall mean the existing Lien on a certificate of deposit owned by
                Borrowers, in a face amount not to exceed at any time $3,100,000,
                plus
                accrued interest, which certificate of deposit secures the Existing
                Secured Debt.

            

    

     

    
      	 	
              2.

            	
              Payments
                Due Under This Note.

            

    

    

    
      	 	
              (a)

            	
              Unless
                sooner paid, all principal and accrued interest shall be due and
                payable
                on June 2, 2006, or earlier upon the occurrence of an Event of Default
                (the “Maturity Date”). 

            

    

    

    
      	 	
              (b)

            	
              Interest
                shall accrue and be payable on the outstanding principal balance
                until the
                Maturity Date at the lesser of eight percent (8%) per annum or the
                Maximum
                Legal Rate. 

            

    

    

    
      	 	
              (c)

            	
              Upon
                an Event of Default, the Financial Obligations shall thereafter bear
                interest from such date until paid in full at the lesser of eighteen
                percent (18%) per annum or the Maximum Legal
                Rate.

            

    

    

    
      	 	
              (d)

            	
              Notwithstanding
                anything else to the contrary, it is the intent of Borrowers and
                Lender to
                conform to and contract in strict compliance with applicable usury
                laws
                from time to time in effect. All agreements between Lender and Borrowers
                are hereby limited by the provisions of this paragraph which shall
                override and control all agreements, whether now existing or hereafter
                arising and whether written or oral. In no way, nor in any event
                or
                contingency (including, but not limited to, prepayment, default,
                demand
                for payment, or acceleration of the maturity of any obligation),
                shall the
                interest taken, reserved, contracted for, charged or received under
                this
                Note or otherwise, exceed the maximum non-usurious amount permissible
                under applicable law. If, from any possible construction of any document,
                interest would otherwise be payable in excess of the maximum non-usurious
                amount, any such construction shall be subject to the provisions
                of this
                paragraph and such document shall be automatically reformed and the
                interest payable shall be automatically reduced to the maximum
                non-usurious amount permitted under applicable law, without the necessity
                of execution of any amendment or new document. If Lender shall ever
                receive anything of value which is characterized as interest under
                applicable law and which would apart from this provision be in excess
                of
                the maximum lawful amount, an amount equal to the amount which would
                have
                been excessive interest shall, without penalty, be applied to the
                reduction of the Financial Obligations other than accrued interest
                or
                shall be refunded to Borrowers to the extent such amount exceeds
                the
                then-outstanding Financial Obligations other than accrued interest.
                The
                right to accelerate maturity of this Note does not include the right
                to
                accelerate any interest which has not otherwise accrued on the date
                of
                such acceleration, and Lender does not intend to charge or receive
                any
                unearned interest in the event of acceleration. All interest paid
                or
                agreed to be paid to Lender shall, to the extent permitted by applicable
                law, be amortized, prorated, allocated and spread throughout the
                full
                stated term (including any renewal or extension) of the Note so that
                the
                amount of interest on account of such Note does not exceed the maximum
                non-usurious amount permitted by applicable
                law.

            

    

    

    
      	 	
              (e)

            	
              All
                interest shall be computed on the basis of a year of 360 days for
                the
                actual number of days (including the first day but excluding the
                last day)
                elapsed. 

            

    

    

    
      	 	
              (f)

            	
              All
                payments on the Financial Obligations are payable in lawful money
                of the
                United States of America in immediately available funds at Fagan
                Capital
                Inc., 5201 North O'Connor Blvd. Suite 440, Irving, Texas 75039, or
                at such
                other office as the Lender may
                designate.

            

    

    

    
      	 	
              3.

            	
              Representations
                and Warranties of Borrowers. Borrowers
                hereby represent and warrant as follows:

            

    

     

    
      	 	
              (a)

            	
              Oxis
                is a corporation duly organized, validly existing and in good standing
                under the laws of the State of Delaware.

            

    

    

    
      	 	
              (b)

            	
              Each
                undersigned subsidiary of Oxis is a corporation or other legal entity
                duly
                organized, validly existing and in good standing under the laws of
                the
                jurisdiction shown in the signature block for each such subsidiary.
                

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      
        	 	
                (c)

              	Excluding Biocheck Inc., a California corporation
                (“Biocheck”) which is a 51%-owned subsidiary of Oxis and which is not a
                party to this Note as of the Effective Date, the Borrowers do not
                have any
                other direct or indirect subsidiaries which own any assets. Within
                21 days
                after Effective Date, Borrowers will provide a letter to Lender which
                is
                signed by an officer of Oxis reaffirming this representation, after
                conducting a further internal review of the status of any subsidiaries
                presently believed to have no assets. 

      

       

    

    
      	 	
              (d)

            	
              The
                execution, delivery and performance of this Note by Borrowers are
                within
                Borrowers' corporate powers, have been duly authorized by all necessary
                corporate action, and do not contravene (i) Borrowers' charter or
                by-laws
                or (ii) any law or any contractual restriction binding on or affecting
                Borrowers or their properties;

            

    

     

    
      	 	
              (e)

            	
              No
                authorization or approval or other action by, and no notice to or
                filing
                with, any governmental authority or regulatory body is required for
                the
                due execution, delivery and performance by Borrowers of this Note
                and any
                other documents or instruments executed in connection with this
                Note;

            

    

     

    
      	 	
              (f)

            	
              This
                Note constitutes the legal, valid and binding obligation of Borrowers,
                enforceable against Borrowers in accordance with its
                terms;

            

    

     

    
      	 	
              (g)

            	
              All
                information and other materials concerning Borrowers which have been
                made
                available by, or on behalf of Borrowers are, when considered as a
                whole,
                complete and correct in all material respects and do not contain
                any
                untrue statement of material fact or omit to state a material fact
                necessary in order to make the statements contained therein not misleading
                in light of the circumstances under which such statements have been
                made.

            

    

    

    
      	 	
              (h)

            	
              There
                is no action, litigation or proceeding pending or, to the knowledge
                of
                Borrowers, threatened against Borrowers before any court or administrative
                agency which might result in any material adverse change in the business
                or financial condition of
                Borrowers.

            

    

    

    
      	 	
              4.

            	
              Representations
                and Warranties of Lender. 
                Lender hereby represents and warrants as follows:
                

            

    

    

    
      	 	
              (a)

            	
              Lender
                represents that Lender has full power and authority to enter into
                and
                purchase this Note. 

            

    

    

    
      	 	
              (b)

            	
              This
                Note is being purchased for investment for Lender’s own account, not as a
                nominee or agent, and not with a view to the public resale or distribution
                thereof within the meaning of the 1933 Act, and Lender has no present
                intention of selling, granting any participation in, or otherwise
                distributing the same. 

            

    

    

    
      	 	
              (c)

            	
              Lender
                has received or has had full access to all the information it considers
                necessary or appropriate to make an informed investment decision
                with
                respect to the Note.  Lender further has had an opportunity to ask
                questions and receive answers from Borrowers regarding the terms
                and
                conditions of the offering of the Note and to obtain additional
                information (to the extent the Borrowers possessed such information
                or
                could acquire it without unreasonable effort or expense) necessary
                to
                verify any information furnished to Lender. 
                

            

    

    

    
      	 	
              (d)

            	
              Lender
                understands that the purchase of the Note involves substantial risk. 
                Lender has experience as an investor in securities of companies and
                acknowledges that Lender is able to fend for itself, can bear the
                economic
                risk of Lender’s investment in the Note and has such knowledge and
                experience in financial or business matters that Lender is capable
                of
                evaluating the merits and risks of this investment in the Note and
                protecting its own interests in connection with this investment.
                

            

    

    

    
      	 	
              (e)

            	
              Lender
                understands that this Note may be characterized as a “restricted security”
                under the 1933 Act and Rule 144 promulgated thereunder inasmuch as it
                is being acquired from the Borrowers in a transaction not involving
                a
                public offering, and that under the 1933 Act and applicable regulations
                thereunder such Note may be subject to restrictions on resale. 
                Lender understands that the Borrowers are under no obligation to
                register
                the Note. 

            

    

    

    
      	 	
              5.

            	
              Covenants
                of Borrowers. So
                long as any portion of the Financial Obligations shall remain outstanding,
                unless the Lender shall otherwise consent in
                writing:

            

    

     

    
      	 	
              (a)

            	
              Borrowers
                will comply in all material respects with all applicable laws, ordinances,
                rules, regulations, orders and other requirements of governmental
                authorities;

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	 	
              (b)

            	
              Borrowers
                will maintain and preserve their existence, rights and privileges,
                intellectual property, licenses and franchises and obtain, maintain
                and
                preserve all permits, licenses, authorizations and approvals that
                are
                necessary in the proper conduct of their
                business;

            

    

     

    
      	 	
              (c)

            	
              Borrowers
                will keep adequate and proper records and books of account, in which
                complete and correct entries will be made in accordance with generally
                accepted accounting principles consistently applied, reflecting all
                financial matters and transactions in relation to the business and
                activities of Borrowers and their subsidiaries and
                affiliates;

            

    

     

    
      	 	
              (d)

            	
              Borrowers
                shall file, on a timely basis, all Federal, state and local tax returns
                and other reports required by applicable law to be filed by Borrowers
                and
                all taxes, assessments and other charges imposed by any governmental
                authority upon Borrowers or any property of Borrowers (including,
                without
                limitation, all federal income and social security taxes on employees'
                wages) and all such taxes, assessments and other charges which become
                due
                and payable shall be paid when due;

            

    

     

    
      	 	
              (e)

            	
              Borrowers
                will not merge or consolidate with any person or entity or sell,
                convey,
                transfer, lease or dispose of (whether in one transaction or in a
                series
                of transactions) all or substantially all of their assets to any
                person or
                entity, or abandon all or substantially all of their assets (any
                such
                transaction, a "Fundamental Transaction"); provided, however, that
                Borrowers may consummate a Fundamental Transaction if (i) Borrowers
                are
                the surviving entities and, after the consummation of such Fundamental
                Transaction, Borrowers will reaffirm in writing their obligations
                under
                this Note if requested to do so by Lender, (ii) no other provision
                of this
                Note would be violated by or after consummation of such Fundamental
                Transaction, and (iii) no Non-Permitted Event shall have occurred
                either
                before or after giving effect to such Fundamental Transaction;
                

            

    

    

    
      	 	
              (f)

            	
              Borrowers
                shall not incur or maintain total Indebtedness, other than Excluded
                Indebtedness, which at any time exceeds a total of $1,000,000;
                

            

    

    

    
      	 	
              (g)

            	
              Other
                than the Permitted Lien, Borrowers shall not pledge, grant or convey
                to
                any other party a Lien in or on any of the assets of Borrowers. If
                Borrowers should attempt to grant any Lien other than the Permitted
                Lien
                to a creditor, Borrowers shall be deemed hereby to have pledged,
                granted
                and conveyed to Lender, to secure all Financial Obligations, a prior
                Lien
                in the collateral subject to such Lien, and the Lien of such creditor
                shall be automatically subordinated to the Lien of Lender;
                

            

    

    

    
      	 	
              (h)

            	
              Oxis
                shall not reduce its ownership of the capital stock of Biocheck or
                its
                voting interest in Biocheck below fifty one percent
                (51%);

            

    

    

    
      	 	
              (i)

            	
              Oxis
                shall not make any distributions or dividends of any of its cash
                or assets
                to any of its shareholders and shall not redeem or repurchase any
                of its
                outstanding capital stock;

            

    

    

    
      	 	
              (j)

            	
              Any
                transaction which Borrowers purport to enter into, which would be
                in
                violation of Borrowers’ covenants in Sections 5(f), 5(g), 5(h), or 5(i) of
                this Note shall
                be null and void and of no force or effect;

            

    

    

    
      	 	
              (k)

            	
              If
                subsequent to the Effective Date, Borrowers increase their ownership
                of
                the capital stock of or voting interest in Biocheck to 80% or greater,
                Borrowers will immediately cause Biocheck to enter into this Note
                as one
                of the joint and several obligors hereunder (or at the option of
                Lender,
                to enter into a full guaranty of this Note); and
                

            

    

    

    
      	 	
              (l)

            	
              Subsequent
                to the Effective Date, Borrowers will not acquire or form, or contribute
                any assets to any existing, acquired or newly formed subsidiary,
                in any
                jurisdiction worldwide, without simultaneously causing each such
                entity to
                become a joint and several obligor under this Note (or at the option
                of
                Lender, to enter into a full guaranty of this
                Note).

            

    

    

    
      	 	
              (m)

            	
              If
                subsequent to the Effective Date, Borrowers discover than any of
                their
                existing subsidiaries which are not obligors under this Note, in
                fact have
                any assets whatsoever, Borrowers will immediately cause each subsidiary
                which has assets to become a joint and several obligor under this
                Note (or
                at the option of Lender, to enter into a full guaranty of this
                Note).

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	 	
              6.

            	
              Payments
                and Prepayments. Borrowers
                may, at their option, prepay the principal amount of the Note, in
                whole at
                any time and in part from time to time. No check, draft or other
                instrument shall constitute final payment unless and until such checks,
                drafts or instruments have actually been collected. Any monies received
                shall be applied first to accrued and unpaid interest hereunder,
                second to
                principal of the Note, and third to any other Financial
                Obligations.

            

    

     

    
      	 	
              7.

            	
              Non-Permitted
                Event.
                Any of the following events will be a “Non-Permitted Event”:
                

            

    

    

    
      	 	
              (a)

            	
              Borrowers
                shall fail to pay any principal of, or interest on, this Note when
                due
                (whether by scheduled maturity, acceleration, demand or
                otherwise):

            

    

     

    
      	 	
              (b)

            	
              Any
                representation or warranty made by Borrowers in this Note shall have
                been
                incorrect in any material respect when
                made;

            

    

     

    
      	 	
              (c)

            	
              Borrowers
                shall fail to perform or observe any term, covenant or agreement
                contained
                in the Note; 

            

    

     

    
      	 	
              (d)

            	
              Borrowers
                or any of their subsidiaries shall fail to pay when due any payment
                on any
                debt for borrowed money or other similar obligation or liability
                in excess
                of $200,000;

            

    

     

    
      	 	
              (e)

            	
              One
                or more judgments or orders for the payment of money exceeding any
                applicable insurance coverage by more than $200,000 in the aggregate
                shall
                be rendered against Borrowers or any of their subsidiaries;
                

            

    

     

    
      	 	
              (f)

            	
              Borrowers
                or any of their subsidiaries shall be generally not paying their
                debts as
                such debts become due, or shall admit in writing their inability
                to pay
                their debts generally, or shall make a general assignment for the
                benefit
                of creditors;

            

    

     

    
      	 	
              (g)

            	
              The
                filing by or against Borrowers of any voluntary or involuntary petition
                in
                bankruptcy or any petition for relief under the federal bankruptcy
                code or
                any other state or federal law for the relief of debtors; provided
                ,
                however
                ,
                with respect to an involuntary petition in bankruptcy, such petition
                has
                not been dismissed within sixty (60) days after the filing of such
                petition; 

            

    

     

    
      	 	
              (h)

            	
              The
                execution by Borrowers of an assignment for the benefit of creditors
                or
                the appointment of a receiver, custodian, trustee or similar party
                to take
                possession of a material portion of Borrowers’ assets or property.
                

            

    

     

    
      	 	
              (i)

            	
              Any
                provision of this Note shall at any time for any reason be declared
                to be
                null and void by a court of competent jurisdiction, or the validity
                or
                enforceability thereof shall be contested by Borrowers, or a proceeding
                shall be commenced by Borrowers seeking to establish the invalidity
                or
                unenforceability thereof, or Borrowers shall deny that they have
                any
                liability or obligation hereunder or thereunder.

            

    

    

    
      	 	
              8.

            	
              Event
                of Default.
                If any Non-Permitted Event occurs and is not cured within five (5)
                days
                after written notice is delivered to Borrowers regarding such
                Non-Permitted Event, then such Non-Permitted Event will constitute
                an
                “Event of Default”. Upon an Event of Default, all Financial Obligations
                will become immediately due and payable ("Acceleration"), without
                the need for any further action on the part of Lender. Lender will
                have,
                in addition to its rights and remedies under this Note, full recourse
                against any real, personal, tangible or intangible assets of Borrowers,
                and may pursue any legal or equitable remedies that are available
                to
                Lender, and
                Lender may take any other actions or remedies available to it under
                this
                Note or other applicable law. Borrowers will not have an opportunity
                to
                cure any Event of Default, and prevent Acceleration, if Borrowers
                have
                failed to cure within the cure period provided in this Section 8,
                absent
                written Lender approval at such time, which approval may be granted
                or
                withheld in Lender's sole discretion.

            

    

    

    
      	 	
              9.

            	
              Amendments
                and Waivers of Note Provisions.
                No amendment of any provision of this Note shall be effective unless
                it is
                in writing and signed by Borrowers and Lender, and no waiver of any
                provision of this Note, and no consent to any departure therefrom,
                shall
                be effective unless it is in writing and signed by Lender, and then
                such
                waiver or consent shall be effective only in the specific instance
                and for
                the specific purpose for which given. No
                course of dealing between Borrowers and Lender will operate as a
                waiver or
                modification of any party’s rights or obligations under this Note. 
                No delay or failure on the part of Lender in exercising any right
                or
                remedy under this Note will operate as a waiver of such right or
                any other
                right.  A waiver given on one occasion will not be construed as a bar
                to, or as a waiver of, any right or remedy on any future occasion.
                

            

    

    

    
      	 	
              10.

            	
              Joint
                and Several Obligation.
                It
                is the express intention of Lender and Borrowers that the obligations
                under this Note shall be joint and several as to Borrowers. The fact
                that
                this Note is a joint and several obligation of Borrowers, is a material
                inducement and bargained-for exchange pursuant to which Lender has
                agreed
                to purchase this Note. Borrowers agree that they have received or
                shall
                receive a material benefit, whether direct or indirect, from entering
                into
                this Note, and do hereby waive any claim or argument, whether now
                or
                hereafter existing, relating in any way to fraudulent conveyance
                or lack
                of consideration for entering into this Note.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      

      
        	 	
                11.

              	Other Waivers by Borrowers.
                Presentment for payment, demand, notice of nonpayment or nonperformance,
                protest, notice of protest, notice of intent to accelerate, notice
                of
                acceleration, and all other notices (except only for any notices
                which are
                specifically required by this Note), filing of suit and diligence
                in
                collecting this Note or enforcing any of the security herefor are
                hereby
                waived by Borrowers, all makers, sureties, guarantors and endorsers
                hereof. This Note shall be the joint and several obligation of Borrowers,
                all makers, sureties, guarantors and endorsers, and shall be binding
                upon
                them and their successors and assigns. Borrowers, and any endorsers,
                or
                guarantors hereof, severally waive and relinquish, to the fullest
                extent
                permitted by law, all rights to the benefits of any moratorium,
                reinstatement, marshaling, forbearance, valuation, stay, extension,
                redemption, appraisement, and exemption now or hereafter provided
                by the
                constitution and laws of the United States of America and of each
                state
                thereof and any other jurisdiction, both as to themselves and in
                and to
                all of their property, real and personal, against the enforcement
                of the
                obligations evidenced by this Note.  

      

    

    

    
      	 	
              12.

            	
              Exercise
                of Remedies. No
                failure on the part of the Lender to exercise, and no delay in exercising,
                any right hereunder shall operate as a waiver thereof, nor shall
                any
                single or partial exercise of any such right preclude any other or
                further
                exercise thereof or the exercise of any other right.
                

            

    

    

    
      	 	
              13.

            	
              Severability; Unenforceability;
                Deemed Amendment. The
                invalidity or unenforceability of any term or provision of this Note
                will
                not affect the validity or enforceability of any other term or provision
                hereof.  Any
                provision of this Note which is prohibited or unenforceable in any
                jurisdiction shall, as to such jurisdiction, be ineffective to the
                extent
                of such prohibition or unenforceability without invalidating the
                remaining
                portions hereof or thereof or affecting the validity or enforceability
                of
                such provision in any other jurisdiction. With respect to any
                jurisdiction, it
                is also the intent and agreement of the Borrowers and Lender that
                this
                Note shall be deemed amended by modifying such invalid or unenforceable
                provision to the extent necessary to make it legal and enforceable
                while
                preserving its intent or, if that is not possible, by substituting
                therefor another provision that is legal and enforceable and achieves
                the
                same objectives.

            

    

    

    
      	 	
              14.

            	
              Fees
                and Expenses.
                Borrowers hereby agree to reimburse on demand, to Lender all costs
                and
                expenses (including, without limitation, all legal fees and expenses)
                incurred by Lender in connection with (i) the preparation, execution,
                delivery and administration of this Note, and (ii) the enforcement of
                Lender's rights, and the collection of all amounts due, hereunder.
                Notwithstanding the above, in connection with the preparation and
                execution of this Note, Lender’s costs and expenses will be deemed to be
                exactly $4500, for work performed through the Effective Date only.
                

            

    

    

    
      	 	
              15.

            	
              Indemnification.
                Borrowers hereby indemnify and hold harmless to the fullest lawful
                extent
                the Lender and each of its directors, officers, shareholders, employees,
                agents, affiliates and advisors (each, an “Indemnified Party”) from and
                against any and all claims, damages, losses, liabilities and expenses
                (including, without limitation, all legal fees and expenses) which
                may be
                incurred by or asserted against Lender or any other Indemnified Party
                in
                connection with or arising out of any investigation, litigation or
                proceeding related to or arising out of this Note or any other related
                document or instrument or any transaction contemplated hereby or
                thereby
                (but in any case excluding any such claims, damages, losses, liabilities
                or expenses incurred solely by reason of the gross negligence or
                willful
                misconduct of any such Indemnified Party). The obligations of Borrowers
                under this Section shall survive the payment in full of this
                Note.

            

    

    

    
      	 	
              16.

            	
              Exchange
                Rights.
                At any time on or before the repayment of the Financial Obligations
                in
                full, if Borrowers enter into an agreement with any party other than
                Lender, to incur debt, then Lender may, at Lender’s sole option and
                discretion, exchange the remaining Financial Obligations due under
                this
                Note into such debt arrangement, on the same terms and conditions
                (including the right to receive or purchase any equity-linked securities
                which are offered to such other debt providers in conjunction with
                such
                debt offering).

            

    

    

    
      	 	
              17.

            	
              Assignment.
                This
                Note is freely transferable and assignable by Lender, provided that
                such
                transfer is made in compliance with all applicable state and federal
                laws.  Any reference to Lender herein will be deemed to refer to any
                subsequent transferee of this Note at such time as such transferee
                acquires title to this Note.   This Note may not be assigned or
                delegated by Borrowers, whether by voluntary assignment or transfer,
                operation of law, merger or
                otherwise.

            

    

    

    
      	 	
              18.

            	
              No
                Impairment.
                Borrowers will not, by amendment of any of Borrowers’ charters, by-laws or
                similar governing documents, or through any reorganization,
                recapitalization, 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 and covenants
                to be observed or performed hereunder by Borrowers, but will at all
                times
                in good faith assist in the carrying out and abidance of all the
                terms and
                covenants of this Note and in the taking of all such action as may
                be
                necessary or appropriate in order to protect the intent of all the
                terms
                and covenants of this Note.

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	 	
              19.

            	
              Notices.
                All notices and other communications provided for hereunder shall
                be in
                writing and shall be mailed, telecopied or delivered, if to Lender,
                to
                Fagan Capital Inc., 5201 North O'Connor Blvd. Suite 440, Irving,
                Texas
                75039, facsimile no.: 972-869-4066; and if to Borrowers, to Oxis
                International Inc., 323 Vintage Park Drive, Suite B, Foster City,
                California 94404, facsimile no.: 650-573-1969
                attention: Steven Guillen; or at such other addresses as shall be
                designated in a written notice complying as to delivery with the
                terms of
                this paragraph. All such demands, notices, and other communications
                shall
                be effective (i) if mailed, three days after being deposited in the
                mails, (ii) if telecopied, when received, and (iii) if
                delivered, upon delivery.

            

    

    

    
      	 	
              20.

            	
              Headings.
                 The
                headings of this Note have been inserted for convenience of reference
                only
                and shall in no way restrict or otherwise modify any of the terms
                or
                provisions hereof or affect in any way the meaning or interpretation
                of
                this Note.

            

    

    

    
      	 	
              21.

            	
              Pronouns
                and Plurals.
                Whenever the context may require, any pronoun used in this Note shall
                include the corresponding masculine, feminine, or neuter forms, and
                the
                singular form of nouns, pronouns, and verbs shall include the plural
                and
                vice versa.

            

    

    

    
      	 	
              22.

            	
              Further
                Action. Borrowers
                and Lender shall execute all documents, provide all information,
                and take
                or refrain from taking all actions as may be necessary or appropriate
                to
                comply with the terms and covenants of this
                Note.

            

    

    

    
      	 	
              23.

            	
              Binding
                Effect.
                The terms and covenants of this Note shall be binding upon and enforceable
                by Borrowers and Lender and their respective executors, administrators,
                successors, personal represent-atives, heirs, and
                assigns.

            

    

    

    
      	 	
              24.

            	
              Replacement
                of Note.
                On
                receipt by Borrowers of evidence of the loss, theft, destruction
                or
                mutilation of this Note, Borrowers shall execute and deliver, in
                lieu
                thereof, a new Note of like tenor.

            

    

    

    
      	 	
              25.

            	
              Entire
                Agreement.
                This Note constitutes the entire agreement and understanding between
                Borrower and Lenders relating to the subject matter hereof and thereof
                and
                supersedes all prior representations, inducements, promises, projections,
                endorsements, premises, agreements, memoranda, communications,
                negotiations, discussions, understandings, and arrangements, whether
                oral,
                written, or inferred, between the parties relating to the subject
                matter
                hereof.

            

    

    

    
      	 	
              26.

            	
              Counterparts.
                This Note may be executed in any number of counterparts, each of
                which
                shall be deemed an original, but all of which together shall constitute
                one and the same instrument. The parties intend that faxed versions
                or pdf
                versions of signature pages will be enforceable without presentation
                of
                the manually executed signature
                pages.

            

    

    

    
      	 	
              27.

            	
              Jurisdiction.
                BORROWERS HEREBY (A) IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION
                OF
                ANY TEXAS STATE OR FEDERAL COURT SITTING IN DALLAS, TEXAS IN ANY
                ACTION OR
                PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE, (B) WAIVE ANY
                DEFENSE BASED ON DOCTRINES OF VENUE OR FORUM NON CONVENIENS, OR SIMILAR
                RULES OR DOCTRINES, AND (C) IRREVOCABLY AGREE THAT ALL CLAIMS IN
                RESPECT OF SUCH AN ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
                IN
                SUCH TEXAS STATE OR FEDERAL COURT.

            

    

     

    
      	 	
              28.

            	
              Jury
                Trial.
                BORROWERS AND LENDER MUTUALLY WAIVE ANY RIGHT TO TRIAL BY JURY IN
                ANY
                ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
                THIS
                NOTE.

            

    

    

    
      	 	
              29.

            	
              Governing
                Law.
                This Note shall be governed by, and construed and interpreted in
                accordance with, the internal laws of the State of Texas applicable
                to
                contracts made and to be performed therein without consideration
                as to
                choice of law.

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, the undersigned have executed this Note under seal as of the
      date first set forth above.

    

    OXIS
      INTERNATIONAL, INC., a Delaware corporation

    By:
      /s/
      Steven T.
      Guillen                           

    Name:
      Steven
      T.
      Guillen                            

    Title:
      President
      &
CEO                              

    

    OXIS
      HEALTH PRODUCTS, INC., a Delaware corporation

    By:
      /s/
      Steven T.
      Guillen                           

    Name:
      Steven
      T.
      Guillen                            

    Title:
      President
      &
CEO                              

    

    

    OXIS
      THERAPEUTICS, INC., a Delaware corporation

    By:
      /s/
      Steven T.
      Guillen                            

    Name:
      Steven
      T.
      Guillen                             

    Title:
      President
      &
CEO                               

     

    

    

    AGREED
      TO
      AND ACCEPTED:

    

    FAGAN
      CAPITAL, INC.

    

    By:
      /s/
      William S.
      Fagan                            

    William
      S. Fagan, President

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