Document:

July 25,
2010

     

    Mr.
Pappajohn

    666
Walnut Street

    Suite
2116

    Des
Moines, IA 50309

    

    Re: Conversion of Secured
Promissory Notes.

    

    Dear Mr.
Pappajohn:

    

    Reference
is hereby made to the Secured Promissory Notes (the “Notes”) issued by CNS
Response, Inc. (the “Company”) to you, (the “Holder”) on June 3 and July
25, 2010, each in the original principal amount of $250,000.  This
letter agreement will confirm that in addition to the terms and conditions as
set forth in the Notes, the following provisions are also incorporated into the
Notes (Capitalized terms used herein, unless otherwise indicated, shall have the
same meaning as provided for in the Notes):

    

    1.           CONVERSION OF
NOTES.  The Notes shall be convertible into shares of the
Company’s common stock, par value $0.001 per share (the “Common Stock”), on the terms
and conditions set forth in this Section 1.

     

    (a)           Conversion
Right.  At any time or times on or after the date hereof, the
Holder shall be entitled to convert any portion of the outstanding and unpaid
Conversion Amount (as defined below) into fully paid and nonassessable shares of
Common Stock in accordance with Section 1(c), at the Conversion Rate (as defined
below).  The Company shall not issue any fraction of a share of Common
Stock upon any conversion.  If the issuance would result in the
issuance of a fraction of a share of Common Stock equal to or in excess of one
half of one share, the Company shall round such fraction of a share of Common
Stock up to the nearest whole share.  The Company shall pay any and
all stock transfer, stamp, documentary and similar taxes (excluding any taxes on
the income or gain of the Holder) that may be payable with respect to the
issuance and delivery of shares of Common Stock to the Holder upon conversion of
any Conversion Amount.

     

    (b)           Conversion
Rate.  The number of shares of Common Stock issuable upon
conversion of any Conversion Amount pursuant to Section 1(a) (the “Conversion Rate”) shall be
determined by dividing (x) such Conversion Amount by (y) the Conversion
Price.

     

    (i)           “Conversion Amount” means the
sum of (A) the portion of the principal to be converted, redeemed or otherwise
with respect to which this determination is being made and (B) accrued and
unpaid interest with respect to such principal.

     

    (ii)          “Conversion Price” means, as of
any Conversion Date (as defined below) or other date of determination, $0.50,
subject to adjustment as provided herein.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (c)           Mechanics of
Conversion.

     

    (i)           Optional
Conversion.  To convert any Conversion Amount into shares of
Common Stock on any date (a “Conversion Date”), the Holder
shall (A) transmit by facsimile (or otherwise deliver), for receipt on or prior
to 4:00 p.m., New York Time, on such date, a copy of an executed notice of
conversion in the form attached hereto as Exhibit I (the “Conversion Notice”) to the
Company and (B) if required by Section 1(c)(ii), cause the Note to be delivered
to the Company as soon as practicable on or following such date.  On
or before 4:00 p.m., New York Time, on the first (1st)
Business Day following the date of receipt of a Conversion Notice, the Company
shall transmit by facsimile a confirmation of receipt of such Conversion Notice
to the Holder (at the facsimile number provided in the Conversion Notice) and
the Company’s transfer agent, if any (the “Transfer
Agent”).  On or before 4:00 p.m., New York Time, on the third
(3rd)
Business Day following the date of receipt of a Conversion Notice (the “Share Delivery Date”), the Company shall
issue and deliver to the address as specified in the Conversion Notice, a
certificate, registered in the name of the Holder or its designee, for the
number of shares of Common Stock to which the Holder shall be
entitled.  If the Note is physically surrendered for conversion as
required by Section 1(c)(ii) and the outstanding principal of the Note is
greater than the principal portion of the Conversion Amount being converted,
then the Company shall as soon as practicable and in no event later than three
(3) Business Days after receipt of the Note and at its own expense, issue and
deliver to the Holder a new Note representing the outstanding principal not
converted.  The person or persons entitled to receive the shares of
Common Stock issuable upon a conversion of the Note shall be treated for all
purposes as the record holder or holders of such shares of Common Stock on the
Conversion Date.

     

    (ii)          Book-Entry.
Notwithstanding anything to the contrary set forth herein, upon conversion of
any portion of the Note in accordance with the terms hereof, the Holder shall
not be required to physically surrender the Note to the Company unless (A) the
full Conversion Amount represented by the Note is being converted or
(B) the Holder has provided the Company with prior written notice (which
notice may be included in a Conversion Notice) requesting physical surrender and
reissue of the Note.  The Holder and the Company shall maintain
records showing the principal and interest converted and the dates of such
conversions or shall use such other method, reasonably satisfactory to the
Holder and the Company, so as not to require physical surrender of the Note upon
conversion.

     

    2.           RIGHTS UPON ISSUANCE OF
OTHER SECURITIES.

     

    (a)           Record
Date.  If the Company takes a record of the holders of Common
Stock for the purpose of entitling them (A) to receive a dividend or other
distribution payable in Common Stock, Options or in Convertible Securities or
(B) to subscribe for or purchase Common Stock, Options or Convertible
Securities, then such record date will be deemed to be the date of the issue or
sale of the Common Stock deemed to have been issued or sold upon the declaration
of such dividend or the making of such other distribution or the date of the
granting of such right of subscription or purchase, as the case may
be.

     

    (b)           Adjustment of Conversion
Price upon Subdivision or Combination of Common Stock; Stock
Dividends.  If the Company at any time, or from time to time,
subdivides (by any stock split, stock dividend, recapitalization or otherwise)
one or more classes of its outstanding shares of Common Stock into a greater
number of shares, the Conversion Price in effect immediately prior to such
subdivision will be proportionately reduced.  If the Company at any
time, or from time to time, combines (by combination, reverse stock split or
otherwise) one or more classes of its outstanding shares of Common Stock into a
smaller number of shares, the Conversion Price in effect immediately prior to
such combination will be proportionately increased.  Any adjustment
under this Section 2(b) shall become effective at the close of business on the
date the subdivision or combination becomes effective or, in the case of a stock
dividend or distribution, the date of such event.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (c)           (i)           Adjustment of Conversion
Price upon Cash Dividends and Distributions.  If the Company at
any time, or from time to time, pays a dividend or makes a distribution in cash
to the record holders of any class of Common Stock, then immediately after the
close of business on the day that the Common Stock trades ex-distribution, the
Conversion Price then in effect shall be reduced to an amount equal to the
product of (i) the Conversion Price in effect immediately prior to such dividend
or distribution and (ii) the quotient determined by dividing (A) the Closing
Sale Price of the Common Stock on the day that the Common Stock trades
ex-distribution by (B) the sum of (1) the Closing Sale Price of the Common Stock
on the day that the Common Stock trades ex-distribution plus (2) the amount per
share of such dividend or distribution.  The Company shall not be
required to give effect to any adjustment in the Conversion Price pursuant to
this Section 2(c) unless and until the net effect of one or more adjustments
(each of which shall be carried forward until counted toward an adjustment),
determined in accordance with this Section 2(c), shall have resulted in a change
of the Conversion Price by at least 1%, and when the cumulative net effect of
more than one adjustment so determined shall be to change the Conversion Price
by at least 1%, such change in the Conversion Price shall thereon be given
effect.

     

    (ii)          Adjustment of Conversion
Price upon Distributions of Capital Stock, Indebtedness or Other Non-Cash
Assets.  If the Company at any time, or from time to time,
distributes any shares of capital stock of the Company (other than Common
Stock), evidences of indebtedness or other non-cash assets (including securities
of any person other than the Company but excluding (1) dividends or
distributions paid exclusively in cash or (2) dividends or distributions
referred to in Section 2(b)) to the record holders of any class of Common Stock,
then the Conversion Price then in effect shall be reduced to an amount equal to
the product of (A) the Conversion Price then in effect and (B) a fraction of
which the numerator shall be the Closing Sale Price share of the Common Stock on
the record date fixed for determination of stockholders entitled to receive such
distribution less the fair market value on such record date (as determined by
the Company’s board of directors) of the portion of the capital stock, evidences
of indebtedness or other non-cash assets so distributed applicable to one share
of Common Stock (determined on the basis of the number of shares of Common Stock
outstanding on the record date) and of which the denominator shall be the
Closing Sale Price per share of the Common Stock on such record
date.  Notwithstanding the foregoing, if the securities distributed by
the Company to the record holders of any class of Common Stock consist of
capital stock of, or similar equity interests in, a Subsidiary or other business
unit, the Conversion Price shall be decreased so that the same shall be equal to
the rate determined by multiplying the Conversion Price in effect on the record
date with respect to such distribution by a fraction the numerator of which
shall be the average Closing Sale Price of one share of Common Stock over the
Spinoff Valuation Period (as defined below) and of which the denominator shall
be the sum of (x) the average Closing Sale Price of one share of Common Stock
over the ten consecutive Trading Day period (the “Spinoff Valuation Period”)
commencing on and including the fifth Trading Day after the date on which
“ex-dividend trading” commences on the Common Stock on the Principal Market or
any national or regional exchange or market on which the Common Stock is then
listed or quoted and (y) the average Closing Sale Price over the Spinoff
Valuation Period of the portion of the securities so distributed applicable to
one share of Common Stock, such adjustment to become effective immediately prior
to the opening of business on the fifteenth Trading Day after the date on which
“ex-dividend trading” commences.

     

    (d)           Other Events; Other
Dividends and Distributions.  If any event occurs of the type
contemplated by the provisions of this Section 2 but not expressly provided for
by such provisions (including, without limitation, the granting of stock
appreciation rights, phantom stock rights or other rights with equity features),
then the Company’s board of directors shall make in good faith an adjustment in
the Conversion Price so as to protect the rights of the Holder under the Note;
provided that no such adjustment will increase the Conversion Price as otherwise
determined pursuant to this Section 2.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (e)           Notice of
Adjustment.  Whenever the Conversion Price is adjusted pursuant
to this Section 2, the Company shall promptly mail notice of such adjustment to
the Holder, which notice shall set forth the Conversion Price after adjustment,
the date on which such adjustment became effective and a brief statement of the
facts resulting in such adjustment.

     

    (f)           Minimum Adjusted Conversion
Price.  Notwithstanding anything to the contrary set forth in
the Note, the Conversion Price shall not be less than $0.30.

     

    3.           DEFINED
TERMS.  For purposes of this letter agreement, the following
terms shall have the meanings indicated:

     

    (a)           “Business Day” means any day
other than Saturday, Sunday or other day on which commercial banks in The City
of New York are authorized or required by law to remain closed.

     

    (b)           “Closing Bid Price” and “Closing Sale Price” mean, for
any security as of any date, the last closing bid price and last closing trade
price, respectively, for such security on the Principal Market, as reported by
Bloomberg Financial Markets, or, if the Principal Market begins to operate on an
extended hours basis and does not designate the closing bid price or the closing
trade price, as the case may be, then the last bid price or last trade price,
respectively, of such security prior to 4:00 p.m., New York Time, as reported by
Bloomberg Financial Markets, or if the foregoing do not apply, the last closing
bid price or last trade price, respectively, of such security in the
over-the-counter market on the electronic bulletin board for such security as
reported by Bloomberg Financial Markets, or, if no closing bid price or last
trade price, respectively, is reported for such security by Bloomberg Financial
Markets, the average of the bid prices, or the ask prices, respectively, of any
market makers for such security as reported in the “pink sheets” by Pink Sheets
LLC (formerly the National Quotations Bureau, Inc.).  If the Closing
Bid Price or the Closing Sale Price cannot be calculated for a security on a
particular date on any of the foregoing bases, the Closing Bid Price or the
Closing Sale Price, as the case may be, of such security on such date shall be
the fair market value as mutually determined by the Company and the
Holder.  All such determinations to be appropriately adjusted for any
stock dividend, stock split, stock combination or other similar transaction
during the applicable calculation period.

     

    (c)           “Convertible Securities” means
any stock or securities (other than Options) directly or indirectly convertible
into or exercisable or exchangeable for Common Stock.

     

    (d)           “Options” means any rights,
warrants or options to subscribe for or purchase Common Stock or Convertible
Securities.

     

    (e)           “Person” means an individual, a
limited liability company, a partnership, a joint venture, a corporation, a
trust, an unincorporated organization, any other entity  and a
government or any department or agency thereof.

     

    (f)
           “Principal Market” means the
OTC Bulletin Board or principal stock exchange or trading market for the Common
Stock, if any.

     

    (g)           “Subsidiary” means with respect
to any Person, any corporation, association or other business entity of which
more than 50% of the total voting power of equity entitled (without regard to
the occurrence of any contingency) to vote in the election of directors,
managers or trustees or other governing body thereof is at the time owned or
controlled by such Person (regardless of whether such equity is owned directly
or through one or more other Subsidiaries of such Person or a combination
thereof).

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (h)           “Trading Day” means any day on
which the Common Stock is traded on the Principal Market; provided that “Trading
Day” shall not include any day on which the Common Stock is scheduled to trade
on such exchange or market for less than 4.5 hours or any day that the Common
Stock is suspended from trading during the final hour of trading on such
exchange or market (or if such exchange or market does not designate in advance
the closing time of trading on such exchange or market, then during the hour
ending at 4:00 p.m., New York Time).

     

    The terms
and conditions of this letter agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the undersigned
parties.  This letter agreement and any controversy arising out of or
relating to this letter agreement shall be governed by and construed in
accordance with the internal laws of the State of California, without regard to
conflict of law principles that would result in the application of any law other
than the law of the State of California.  This letter agreement may be
executed and delivered in two or more counterparts, including, but not limited
to, by PDF or facsimile, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

    

    If you
are in agreement with the foregoing, please so indicate by signing and returning
a copy of this letter agreement, which will constitute our agreement with
respect to the matters set forth herein.

    

    
      	 
      	
              Sincerely,

            
	 
      	
              CNS
      RESPONSE, INC.

            
	 
      	 
      
	 
      	
                /s/ George
  Carpenter

            
	 
      	
              George
      Carpenter IV

            
	 
      	
              Chief
      Executive Officer

            

    

    

    ACKNOWLEDGED
AND AGREED TO:

    

    
      
        	
                /s/ John Pappajohn

              	 
      
	
                John
      Pappajohn

              	 
      

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
I

     

    CNS
RESPONSE, INC.

    CONVERSION
NOTICE

     

    Reference
is made to the Convertible Note (the “Note”) issued to the
undersigned by CNS Response, Inc. (the “Company”).  In
accordance with and pursuant to the Note, the undersigned hereby elects to
convert the Conversion Amount (as defined in the Note) of the Note indicated
below into shares of Common Stock par value $0.001 per share (the “Common Stock”) of the Company,
as of the date specified below.

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      	
                                              Date
      of Conversion:

                                            	 
      
	 
      	 
      
	
                                              Aggregate
      Conversion Amount to be converted:

                                            	 
      
	 
      	 
      
	
                                              Please
      confirm the following information:

                                            
	 
      
	
                                              Conversion
      Price:

                                            	 
      
	 
      	 
      
	
                                              Number
      of shares of Common Stock to be issued:

                                            	 
      
	 
      	 
      
	
                                              Please
      issue the Common Stock into which the Note is being converted in the
      following name and to the following address:

                                            
	 
      
	
                                              Issue to:

                                            	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	
                                              Facsimile
      Number:

                                            	 
      
	 
      	 
      
	
                                              Authorization:

                                            	 
      
	 
      	 
      
	
                                              By:

                                            	 
      
	 
      	 
      
	
                                              Title:

                                            	 
      
	 
      	 
      
	
                                              Dated:

                                            	 
      
	 
      	 
      
	
                                              Account
      Number:

                                            	 
      
	
                                                (if
      electronic book entry transfer)

                                            	 
      
	 
      	 
      
	
                                              Transaction
      Code Number:

                                            	 
      
	
                                                (if
      electronic book entry transfer)EMPLOYMENT AGREEMENT

 

This

EMPLOYMENT AGREEMENT

 is entered into as of June 23, 2010 by and between

Brainstorm Cell Therapeutics Ltd.

, a company incorporated under the laws of the State of Israel and maintaining its principal place of business at 12 Bazel St. Petach Tikva, Israel (the “

Company

”), and Liat Sossover, I.D. No.      residing at        Israel (the “

Employee

”)

 

 

WHEREAS

 the Company desires to engage the Employee as the company's CFO and the Employee desires to enter into such employment and represents that she has the requisite skill and knowledge to sene as such; and

 

WHEREAS

 the parties desire to set forth herein the terms and conditions of the Employee's engagement by the Company, effective as of the date of

 

this Agreement, as set forth below;

 

NOW THEREFORE,

 in consideration of the mutual promises contained herein, and intending to be legally bound, the parties hereto agree as follows:

 

	

 

1.

	

EMPLOYMENT       – GENERAL

 

	

 

	

1.1.

	

Employment

..       Company hereby employs Employee and Employee hereby accepts employment       upon the terms and conditions set forth hereinafter. Employee shall       commence her employment in the Company on June 23,   2010.

 

	

 

	

1.2.

	

The       Position

.. The Employee shall be employed as the company’s CFO (the       “

Position

”) and in       such capacity, she shall be subject to the direction and control of       the Company's CEO.

 

	

 

	

1.3.

	

Position

..       During the term of this Agreement, and unless and until otherwise agreed,       Employee shall be employed on a 4 days a week basis. The Employee shall       devote her business time, attention and efforts to the performance of her       duties and responsibilities hereunder, in the above mentioned scope of       work. During the term of this Agreement, Employee can be engaged to other       business or professional activity 1 day a week. The employee hereby       notifies the Company that she is employed by ForeScout Ltd one day a week       and the Company approves such employment.

 

	

 

	

1.4.

	

Personal       Service Contract

.. The Parties hereto confirm that this is a       personal service contract and that the relationship between the parties       hereto shall not be subject to any general or special collective       employment agreement or any custom or practice of Company in respect to       any of its other employees or contractors. Except as expressly provided in       this Agreement, employee shall not be entitled to any payments or other       benefits in respect of her employment and the termination of her       employment with Company.

 

	

 

	

1.5.

	

Special       Degree of Personal Trust

.. Employee acknowledges and agrees, that       from the perspective of the status, responsibility and terms of employment       of Employee, she shall be counted amongst those employees whose functions       require a special degree of personal trust, and the conditions and       circumstances of whose employment do not facilitate the supervision of       their work and rest hours as those expressions are defined in the Hours of       Work and Rest Law, 5711-1951 and accordingly the restrictions specified in       the aforementioned Law and in the Wage Protection Law shall not apply to       her employment. Employee shall not be entitled to demand or receive, inter       alia, payment for overtime, as may be required by the Company, and the       amount paid to him as a Salary (as defined below), shall also include full       compensation for overtime hours.

 

1

	

 

2.

	

EMPLOYEE'S       UNDERTAKINGS

..

 

Employee hereby       undertakes as follows:

 

	

 

	

2.1.

	

Carry       out of Instructions

..

To carry out all of       the instructions related to her employment in accordance with the       instructions of the Company's CEO.

 

	

 

	

2.2.

	

Fidelity

..

To perform the duties       and assignments imposed upon him in the scope of her employment with       Company with devotion, honesty and fidelity, subject to Company's policy       in effect from time to time, and to dedicate to the performance of the       said duties all her know-how, qualifications and experience and all the       time, diligence and attention required for the performance thereof       efficiently, with fidelity and in accordance with the requirements of this       Agreement, and to use her best endeavors in order to consolidate Company       and to advance the affairs and business of Company and the realization of       its objectives.

 

	

 

	

2.3.

	

Conflict       of Interest

..

Employee declares that he is not presently involved, and he       undertakes not to become involved in the future, for so long as he is an       employee of Company, in any obligations towards any third party whatsoever       which entail any form of conflict of interest with her employment with       Company.

 

	

 

3.

	

COMPENSATION

 

	

 

	

3.1.

	

Salary

..       In consideration for Employee's obligations under this Agreement, Company       shall pay Employee a monthly gross salary of 32,000 NIS per month- 25,600       NIS for four days (the “

Salary

”).

 

	

 

	

3.2.

	

The       employee can have a car of Level 2 for a waiver of 3K NIS per month. If       the employee would like to have a higher level car the waiver will be       greater.

 

	

 

	

3.3.

	

Payment

..

The Salary shall be       paid to Employee by no later than the 10th of the following month. As       provided in Section 1.4 above, the Salary includes remuneration for       working overtime and on days of rest, and Employee shall not be entitled       to any further remuneration or payment whatsoever other than the Salary       and/or benefits, unless expressly specified in this Agreement. Employee       acknowledges that the Salary to which he is entitled constitutes due       consideration for him working overtime. The Salary, as mentioned in       Section 3.1 hereto, and it alone, shall constitute the sole basis for       calculating any of Employee's rights under any applicable law, and any       other benefits provided under this Agreement shall not be deemed as the       Salary or any part thereof.

 

	

 

	

3.4.

	

Statuary       Deductions

..

Company shall make the required statutory deductions from the       Salary and from any other amount paid to Employee by Company under this       Agreement, including income tax, social security and healthcare tax, and       make the appropriate payments on behalf of Employee to the Income Tax       Authorities, to the Institute of National Insurance and any other relevant       authority.

 

2

	

 

	

3.5.

	

Additional       Benefits

..

Employee shall be entitled to such additional benefits, as provided       in

Exhibit       A

..

 

	

 

	

3.6.

	

Expenses

..

The Company will       reimburse Employee for any documented, out-of-pocket expenses from time to       time properly incurred by Employee in connection with her employment by       Company,

provided

 

that

 

such expenses       have been approved in advance by Company.

 

	

 

	

3.7.

	

Sick       Leave and Recuperation Pay

..

Employee shall be       entitled to sick leave and Recuperation Pay (Hebrew text)

 

as provided by       law.

 

	

 

	

3.8.

	

Vacation

..

Employee shall be       entitled to such annual vacation of 22 days per year, and no less than the       number of days required by the Annual Vacation Law, 5711-1951, and such       annual vacation shall be increased in accordance with the Annual Vacation       Law, 5711-1951. Annual vacation may not be accumulated for over 2 years       and the Company shall be entitled to redeem leave at any     time.

 

	

 

4.

	

TERM       OF AGREEMENT

 

	

 

	

4.1.

	

Term

..

This Agreement shall       commence on the date hereof and shall continue to be in effect for an       indefinite period of time.

 

	

 

	

4.2.

	

Termination       by Employee

..

Employee shall be entitled to terminate this Agreement by giving       Company a prior notice, to be delivered to Company, in writing, of 30       (thirty) days; It being understood that during such period, Employee shall       (subject to the needs of the Company) continue to perform her duties for       Company, including the training and initiation of her replacement, and,       subject to the performance of such obligations, Company shall make all       payments as required hereunder.

 

	

 

	

4.3.

	

Termination       by Company

..

Company shall be entitled to terminate this Agreement, at any time,       by giving Employee a prior notice, to be delivered to Employee, in       writing, of 30 (thirty) days. In such event Employee shall (subject to the       instructions of the Company) continue to perform her duties for the       Company, including the training and initiation of her replacement, and,       subject to the performance of such obligations, Company shall make all       payments as required hereunder. The Company shall be entitled to terminate       the actual employment of Employee at any time forthwith, including during       the prior notice, and to make a payment to Employee in lieu of such prior       notice. Notwithstanding the foregoing, in the event that Employee had not       completed at least 12 (Twelve) months of employment prior to such       termination - the provisions of the applicable law regarding prior notice       shall apply.

 

	

 

	

4.4.

	

Termination       For Cause

..

Notwithstanding the foregoing provisions of this Section 4, Company       shall be entitled to terminate this Agreement forthwith, and without prior       notice, and Employee shall not be entitled to any severance pay or other       compensation whatsoever, in any of the following events: (i) conviction of       any felony involving moral turpitude or affecting the Company; (ii) any       refusal to carry out a directive of the Management of the Company, or       disregard of a rule or policy of the Company known to the Employee or       contained in a policy and procedure manual provided to the Employee, which       involves the business of the Company and which was capable of being       lawfully performed; (iii) embezzlement of funds of the Company or other       breach of fiduciary duty toward the Company; (iv) ownership, direct or       indirect, of

 

an interest in a       person or entity in competition with the Company, without the prior       written permission of the Management of the Company; and (v) disposition       of company confidential information contrary to the provisions of the law       of

 

this       Agreement; (vi) willful disloyalty and/or deliberate dishonesty: (vii)       material breach of any of the terms of this   Agreement;

 

3

	

 

5.

	

PROPREITARY       INFORMATION

 

	

 

	

5.1.

	

Proprietary       Information

..

The Employee acknowledge and agrees that the business of the       Company and its affiliates is highly competitive and that in the course of       her employment with the Company, he will have access to confidential and       proprietary information concerning the business and financial activities       of the Company and information and technology regarding the Company's       product research and development, including without limitation, the       Company's patents, trade marks, trade secrets, intellectual property,       banking information, investments, investors, properties, employees,       marketing plans, customers, trade secrets, and test results, processes,       data and know-how, improvements, inventions, techniques and products       (actual or planned). Such information, whether documentary; written oral       or computer generated, shall be deemed to be and referred to as

“Proprietary       Information”.

 

	

	

 

	

Proprietary Information shall       be deemed to include any and all

 

preparatory       information disclosed by or on behalf of the Company and irrespective of       form, but excluding information that (i) was known to the Employee prior       to her association with the Company and can be so proven by documentary       evidence. (ii) shall have appeared in any printed publication or patent or       shall have become a part of the public knowledge, except as a result of a       breach of this Agreement or any other obligation to the Company by the       Employee or any other employee or third party or the breach of the       undertakings of the Company towards any third party or (iii) is legally       required by any administrative or governmental agency to be disclosed,       provided that any such disclosure shall be made only to the extent       required to fulfill Employee's legal obligations, and provided further       that the Employee immediately notifies the Company of such obligation or       requirement, prior to making any disclosure, to enable the Company to
  contest the requirement thereof.

 

	

 

	

5.2.

	

Nondisclosure

..

Employees agrees and       declares that all Proprietary Information, patents and other rights in       connection therewith shall be the sole property of the Company and its       assignees at all times. Both during her engagement by the Company and for       seven (7) years after its termination. Employee will keep in confidence       and trust all Proprietary Information and the Employee will not use or       disclose any Proprietary Information or anything relating to it without       the written consent of the Company, except as may be necessary in the       ordinary course of performing the Employee's duties hereunder and in the       best interests of the Company.

 

	

 

	

5.3.

	

Return       of Documents

..

Upon termination of her employment with the Company, and upon the       Company's request, the Employee will promptly deliver to the Company all       documents and materials of any nature pertaining to her work with the       Company, including but not limited to notebooks, notes, memoranda,       records, diagrams, blueprints, bulletins, formulas, reports, computer       programs, other data of any kind coming into Employee's possession or       prepared by him in connection with her Employment, and he will not take       with him any documents or materials or copies thereof containing any       Proprietary information.

 

4

	

 

	

5.4.

	

Third       Party Information

..

 

Employee recognize       that the Company received and will receive confidential or proprietary       information from third parties subject to a duty on the Company's part to       maintain the confidentiality of such information and to use it only for       certain limited purposes at all times. Both during her employment and       after its termination, the Employee undertakes to keep and hold all such       information in strict confidence and trust. He will not trust or disclose       any of such information without the prior written consent of the Company,       except as may be necessary to perform her duties as an employee of the       Company and consistent with the Company's agreement with such third party.       Upon termination of her employment with the Company, Employee shall act       with respect to such information as set forth in Section 5.3

, mutatis       mutundis.

 

	

 

	

5.5.

	

Survival

..

The Employee's       undertakings in this Section 5 shall remain in full force and effect after       termination of this Agreement.

 

	

 

6.

	

DISCLOSURE       AND ASSIGNMENT OF INVENTIONS

 

	

 

	

6.1.

	

Contributions

..

The Employee       understands that the Company is engaged in a continuous program of       research, development, production and marketing in connection with its       business and that, as an essential part of her employment with the       Company, he is expected to make new contributions to and create inventions       of value for the Company.

 

	

 

	

6.2.

	

Obligation       to Keep the Company Informed

..

From and after the       date he first became associated with the Company; Employee undertakes and       covenants that he will promptly disclose in confidence to the Company all       inventions, improvements. designs, original works of authorship formulas,       concepts, techniques, methods. systems, processes, compositions of matter,       computer software programs, databases, mask works, and trade secrets,       related to the Company's business or current or anticipated research and       development, whether or not patentable, copyrightable or protectable as       trade secretes, that are made or conceived or first reduced to practice or       created by him, either alone or jointly with others during the period of       her employment, whether or not in the course of her employment (“

Inventions”

).

 

	

 

	

6.3.

	

Ownership

..

The Employee agrees       and represents, that all Inventions as defined above, will be the sole and       exclusive property of the Company or of any third party specified by the       Company

 

	

 

	

6.4.

	

Assignment       of Inventions

..

The Employee hereby irrevocably transfers and assigns, and will       transfer and assign in the future to the Company, or to any third party       specified by the Company (a) all worldwide patents, patent applications,       copyrights. mask works, trade secrets and other intellectual property       rights in an\ invention; and (b) any and all “Moral Rights” (as defined       below) that he may have in or with respect to any Invention. Employee also       hereby forever waive and agrees never to insert any and all Moral Rights       he may have in or with respect to any Invention, even after termination of       her work on behalf of the Company. “

Moral Rights

” mean any       rights of paternity any right to claim authorship of any Invention and all       right, title and interest worldwide in such Inventions and in all       intellectual property rights based upon such Inventions. To object to any       distortion, mutilation or other modification of, or other derogatory       action in relation to any Invention whether or not such would be       prejudicial to her honor or reputation and any similar right, existing       under judicial or statutory law of any country in the world or under any       treaty, regardless of whether or not such right is denominated or       generally referred to as a '“Moral Right”.

 

5

	

 

	

 

	

The       Employee hereby warrants and represents that he or she has no rights of       any kind whatsoever in, with respect to, or in connection with, any of the       Proprietary Information, nor any other intellectual property, currently       utilized or planned to be utilized by the   Company.

 

	

 

	

6.5.

	

Assistance       in Obtaining Patents and other Legal Protections

.. The Employee       agrees to assist the Company to obtain for the Company and enforce       patents, copyrights, mask work rights and other legal protections for the       Company's inventions in any and all countries. Employee will execute any       documents that the Company may reasonably request for use in obtaining or       enforcing such patents, copyrights, mask work rights, trade secrets and       other legal protections. Employee’s obligation under this Section 6.5 will       continue beyond the termination of her employment with the Company,       provided that the Company will compensate him at a reasonable rate after       such termination for time or expenses actually spent by him at the       Company's request on such assistance. The Employee hereby irrevocably       appoints the Secretary of the Company as her attorney-in-fact to execute       documents on her behalf for this purpose.

 

	

 

7.

	

NON       - COMPETITION

 

	

 

	

7.1.

	

Non       Competition

..

The Employee agrees and undertakes that he will not. so long as he       is employed by the Company and for a period of 12 months following       termination of her employment for whatever reason, directly or indirectly       as owner, partner, joint venturer, stockholder, employee, broker, agent       principal, corporate officer, director, licensor or in any other capacity       whatever, engage in, become financially interested in, be employed by, or       have any connection with any business

 

or venture that       is engaged in any activities involving either (i) products which compete,       directly or indirectly, with the business of the Company or its       affiliates, products produced or proposed to be produced by the Company or       its subsidiaries or affiliates or (ii) information, processes, technology       or equipment that competes with information, processes, technology or       equipment in which the Company or its subsidiaries or affiliates has a       proprietary interest, competing with products or services offered by the       Company;

provided

,

however

,

that the Employee may       own securities of any corporation which is engaged in such business and is       publicly owned and traded but in an amount not exceed at any one time, one       percent of any class of stock or securities of such company, so long as       Employee has no active role in the publicly owned and traded company as       director, employee, consultant or otherwise.

 

	

 

	

7.2.

	

No       Solicitation

..

The Employee agrees and undertakes that during the term of her or       her employment with the Company and for a period of twelve (12) months       provided thereafter, the Employee will not directly or indirectly       including personally or in any business of which it is an officer,       director, joint venturer, partner or   shareholder:

 

	

 

	

(i)

	

Solicit,       entice, canvass or approach or endeavor to solicit, canvass or approach       any person who, to her or her knowledge, was provided with services by the       Company or provided services to the Company as a vendor or supplier or its       parent or subsidiaries at any time during the twelve (12) months       immediately prior to the termination date (i) for the purpose of offering       services or products which directly compete with the business of the       Company or its affiliates or its Proprietary Information, (ii) for the       purpose of interfering with the Company’s relationship with such entity or       person, or (iii) to cease doing business with Company or its affiliates,       reduce its relationship with Company or its affiliates or refrain from       establishing or expanding a relationship with Company or its affiliates or       in any other way interfere with the Company’s or its affiliates’       relationships with its customers, vendors or suppliers;
or

 

6

	

 

	

(ii)

	

Employ,       solicit or entice away or endeavor to solicit or entice away from the       Company or its parent or subsidiaries any person employed by the Company       or its parent or subsidiaries any time during the twelve (12) months       immediately prior to the Termination Date with a view to inducing that       person to leave such employment and to act for another employer in the       same or similar capacity.

 

	

 

	

7.3.

	

Severability

..       If any one or more of the terms contained in this Section 7 shall, for any       reason be held to be excessively broad with regard to time, geographic       scope or activity, the term shall be construed in a manner to enable it to       be enforced to the extent compatible with applicable   law.

 

	

 

8.

	

MISCELLANEOUS

 

	

 

	

8.1.

	

Governing       Law

.. This Agreement shall be governed by and construed and enforced       in accordance with the laws of the State of   Israel.

 

	

 

	

8.2.

	

Assignments

..       Employee may not assign or transfer any right, claim or obligation       provided herein. The Company may assign or transfer any right, claim or       obligation provided herein, provided that any right of the Employee under       this Agreement shall not be diminished.

 

	

 

	

8.3.

	

Notices

..       The addresses of the parties for the purposes of this Agreement shall be       as specified in the preamble hereto and/or any other address as notified       by either party to the other from time to time. All notices and other       communications required or permitted to be given under this Agreement       shall be in writing and shall be sent by the notifying party to the other       party via fax, e-mail, registered mail or personal delivery service.       Notices shall be deemed effective 72 business hours after sending same by       registered mail, postage prepaid, to the other party at the address noted       above, 24 business hours after their authenticated transmission via fax,       or e-mail and immediately upon their personal delivery by courier or other       personal delivery service.

 

	

 

	

8.4.

	

Construction

..       Words in the masculine gender shall include the feminine and vice       versa.

 

	

 

	

8.5.

	

Entire       Agreement

.. This Agreement contains the entire understanding of the       parties. There are no restrictions, agreements, promises, warranties,       covenants or undertakings between the parties with respect to the subject       matter hereof.

 

	

 

	

8.6.

	

Amendments

..       This Agreement may not be altered, modified or amended except by a written       instrument signed by the parties.

 

7

IN WITNESS WHEREOF

 the parties have duly executed this Agreement as of the date first above written:

 

 

	

/s/       Rami Efrata

	

 

	

/s/       Liat Sossover

	

BRAINSTORM       CELL THERAPEUTICS LTD.

	

 

	

EMPLOYEE

By:

Rami Efrata

Title:

CEO

 

[Image to come]

 

8

Exhibit A

 

	

1.

	

Manager's       Insurance Policy

.. The company shall contribute funds on behalf of       its employees to a Managers Insurance Fund in the name of the Employee       (“

Fund

”) and       disability insurance for loss of ability to work (“

Disability Insurance

”)       as specified below.

 

	

 

	

1.1.

	

The       Company shall allocate to the Fund, an aggregated amount equal to thirteen       and a third percent (13.33%) in the following portions; five percent (5%)       of each monthly Salary for pension compensation and eight and a third       percent (8.33%) of each monthly Salary to severance compensation.       Moreover, the Company will allocate for the purpose of the Disability       Insurance a maximum premium up to 2.5% of Employee's monthly Salary, as       provided by the general approval of the Minister of Labor and Social       Welfare regarding payments by employers to a pension fund and insurance       fund in lieu of severance pay (

section 14

). The Company       shall deduct from Employee's monthly Salary an aggregated amount equal to       five percent (5%) of Employee's monthly Salary for the     Fund.

 

	

 

	

1.2.

	

The       aforementioned allocations shall be in lieu of Severance Pay according to       the Severance Pay Law 5723-1963 (“

Severance Pay Law

”)       (section 14).

 

	

2.

	

Education       fund

.. The Company shall pay a sum as high as the recognized       deductible cap by the tax authorities, but in any event no more than 7.5%       of the Salary and shall deduct 2.5% from the Salary to be paid on behalf       of Employee toward a further education fund. Use of these funds shall be       in accordance with the by-laws of the fund. The Employee hereby grants her       consent to such a deduction provided in this section     herein.

 

	

3.

	

Options

..       The employee shall be entitled to participate in the Company’s approved       Employee Stock Option Plan of Brainstorm Cell Therapeutics Inc. (“BCLI”)       The Employee shall be granted 400,000 options to purchase Common Stock of       BCLI upon such terms and conditions set forth by the Board of Directors.       (Subject to the approval of the company's Board of     Directors).

 

Purchase price shall be the share price at the end of the trading day of the Board of Directors approval.

The option shall vest 1/3 each anniversary.

Option shall expire Ten years from grant date.

 

9

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