Document:

Warrant No: [____]

 

 

 

COMMON STOCK PURCHASE WARRANT

 

brainstorm
cell therapeutics inc.

 

 

	Warrant Shares: [_______]	Initial Exercise Date: August [____], 2013

 

THIS COMMON STOCK PURCHASE
WARRANT (the “Warrant”) certifies that, for value received, [_______] or its assigns (the “Holder”)
is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on
or after the date hereof (the “Initial Exercise Date”) and on or prior to the close of business on the third
anniversary of the Initial Exercise Date (the “Termination Date”) but not thereafter, to subscribe for and purchase
from Brainstorm Cell Therapeutics Inc., a Delaware corporation (the “Company”), up to [_______] shares (as subject
to adjustment hereunder, the “Warrant Shares”) of Common Stock. The purchase price of one share of Common Stock
under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b). This Warrant is the Warrant to purchase Common
Stock (this “Warrant”) issued pursuant to (i) the Underwriting Agreement, dated as of August 13, 2013, by
and among the Company, Roth Capital Partners, LLC and Maxim Group LLC (the “Underwriting Agreement”) and (ii)
the Company’s Registration Statement on Form S-1 File No.: 333-186516). This Warrant is one of a series of warrants containing
substantially identical terms and conditions issued pursuant to the Underwriting Agreement (collectively, the “Warrants”).

 

Section 1.Definitions.
Except as otherwise defined herein, capitalized terms in this Warrant shall have the meanings set forth in Section 6.

 

Section 2.Exercise.

 

a)Exercise
of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial
Exercise Date and on or before the Termination Date by delivery to the Company (or such other office or agency of the Company as
it may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books of the Company)
of a duly executed facsimile copy of the Notice of Exercise Form annexed hereto. Within three (3) Trading Days following the date
of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the shares specified in the applicable Notice
of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified
in Section 2(c) below is available and specified in the applicable Notice of Exercise. Notwithstanding anything herein to the contrary,
the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the
Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant
to the Company for cancellation within three (3) Trading Days of the date the final Notice of Exercise is delivered to the Company.
Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder
shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable
number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased
and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise Form within one (1) Business
Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason
of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant
Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

 

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b)Exercise
Price. The exercise price per share of the Common Stock under this Warrant shall be $0.25, subject to adjustment hereunder
(the “Exercise Price”). Except as where otherwise permitted in accordance with Section 2(c), this Warrant may
only be exercised by means of payment by wire transfer or cashier’s check drawn on a United States bank.

 

c)Cashless
Exercise. If, and only if, at the time of exercise hereof there is no effective registration statement registering, or the
prospectus contained therein is not available for the issuance of the Warrant Shares to the Holder, then, and only then, this Warrant
may at the option of the Holder be exercised, in whole or in part, at such time by means of a “cashless exercise” in
which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)]
by (A), where:

 

	 	(A) =	the VWAP on the Trading Day immediately preceding the date on which Holder elects to exercise this Warrant by means of a “cashless exercise,” as set forth in the applicable Notice of Exercise;
	 	 	 
	 	(B) =	the Exercise Price of this Warrant, as adjusted hereunder; and
	 	 	 
	 	(X) =	the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.

 

“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding
date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading
Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if the OTC Bulletin Board is not a Trading
Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the OTC Bulletin
Board, (c) if the Common Stock is not then listed or quoted for trading on the OTC Bulletin Board and if prices for the Common
Stock are then reported in the “Pink Sheets” published by Pink OTC Markets, Inc. (or a similar organization or agency
succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in
all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith
by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees
and expenses of which shall be paid by the Company.

 

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d)Mechanics
of Exercise.

 

i.Delivery
of Warrant Shares Upon Exercise. The Company shall use best efforts to cause the Warrant Shares purchased hereunder to be transmitted
by the transfer agent for the Common Stock (the “Transfer Agent”) to the Holder by crediting the account of
the Holder’s prime broker with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”)
if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the
issuance of the Warrant Shares to or resale of the Warrant Shares by Holder or (B) this Warrant is being exercised via cashless
exercise, and otherwise by physical delivery to the address specified by the Holder in the Notice of Exercise by the date that
is three (3) Trading Days after the latest of (A) the delivery to the Company of the Notice of Exercise, (B) surrender of this
Warrant (if required) and (C) payment of the aggregate Exercise Price as set forth above (including by cashless exercise, if permitted)
(such date, the “Warrant Share Delivery Date”). The Warrant Shares shall be deemed to have been issued, and
Holder or any other person so designated to be named therein shall be deemed to have become a holder of record of such shares for
all purposes, as of the date the Warrant has been exercised, with payment to the Company of the Exercise Price (or by cashless
exercise, if permitted) and all taxes required to be paid by the Holder, if any, pursuant to Section 2(d)(vi) prior to the issuance
of such shares, having been paid.

 

ii.Delivery
of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder
and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant
evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall
in all other respects be identical with this Warrant.

 

iii.Rescission
Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i)
by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

 

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iv.Compensation
for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder,
if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to an exercise on or before
the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction
or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a
sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”),
then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including
brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the
number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times
(2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder,
either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in
which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have
been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases
Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common
Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding
sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating
the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss.
Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including,
without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely
deliver shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.

 

v.No
Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise
of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the
Company shall pay in cash the fair value of a share as of the time when Holder entitled to receive such fraction of a share is
determined.

 

vi.Charges,
Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or
other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the
Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder;
provided, however, that, in the event Warrant Shares are to be issued in a name other than the name of the Holder,
this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder
and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental
thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise.

 

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vii.Closing
of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this
Warrant, pursuant to the terms hereof.

 

e)Holder’s
Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise
any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after
exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other
Persons acting as a group together with the Holder or any of the Holder’s Affiliates), would beneficially own in excess of
the Beneficial Ownership Limitation (as defined below).  For purposes of the foregoing sentence, the number of shares of Common
Stock beneficially owned by the Holder and its Affiliates shall include the number of shares of Common Stock issuable upon exercise
of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock
which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder
or any of its Affiliates and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of
the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exercise
analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates.  Except as set forth
in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section
13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations
promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation
is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed
in accordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether
this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of which portion
of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall
be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned
by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial
Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition,
a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding
shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s
most recent periodic or annual report filed with the Securities and Exchange Commission (the “Commission”),
as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or
the Transfer Agent setting forth the number of shares of Common Stock outstanding.  Upon the written or oral request of a
Holder, the Company shall within two Trading Days confirm orally and in writing to the Holder the number of shares of Common Stock
then outstanding.  In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to
the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates since the date
as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation”
shall be 4.9% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares
of Common Stock issuable upon exercise of this Warrant. The Holder, upon not less than 61 days’ prior notice to the Company,
may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership
Limitation in no event exceeds 9.9% of the number of shares of the Common Stock outstanding immediately after giving effect to
the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e)
shall continue to apply. Any such increase or decrease will not be effective until the 61st day after such notice is
delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict
conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent
with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to
properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this
Warrant.

 

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Section
3.Certain Adjustments.

 

a)Stock
Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise
makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable
in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon
exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including
by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification
of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied
by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding
immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately
after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the
aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become
effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

 

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b)[RESERVED]

 

c)Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time
during which this Warrant is outstanding the Company grants, issues or sells any Common Stock Equivalents or rights to purchase
stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the “Purchase
Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate
Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon
complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial
Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights,
or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the
grant, issue or sale of such Purchase Rights (provided, however, to the extent that the Holder’s right to participate in
any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be
entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result
of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such
time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

 

d)Pro
Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other
distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital
or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of
a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a "Distribution"),
at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock
acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation,
the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such
record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in
such Distribution (provided, however, to the extent that the Holder's right to participate in any such Distribution
would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate
in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution
to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if
ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

 

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e)Fundamental
Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related
transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly,
effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets
in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether
by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange
their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common
Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization
or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted
into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions
consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization,
recapitalization, spin-off or scheme of arrangement) with another Person or group of Persons whereby such other Person or group
acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person
or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share
purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent
exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon
such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard
to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”)
receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant
is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise
of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to
apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in
a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common
Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder
shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental
Transaction. Notwithstanding anything to the contrary, in the event of a Fundamental Transaction that is (1) an all cash transaction,
(2) a “Rule 13e-3 transaction” as defined in Rule 13e-3 under the Exchange Act, or (3) a Fundamental Transaction involving
a person or entity not traded on the OTCQB, the OTC Bulletin Board, The New York Stock Exchange, Inc., The NYSE MKT, LLC, The NASDAQ
Global Select Market, the NASDAQ Global Market, or the NASDAQ Capital Market, the Company or any Successor Entity (as defined below)
shall, at the Holder’s option, exercisable at any time concurrently with, or within 45 days after, the consummation of the
Fundamental Transaction, purchase this Warrant from the Holder by paying to the Holder an amount
of cash equal to the Black Scholes Value of the remaining unexercised portion of this Warrant on the date of the consummation of
such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on the Black and Scholes
Option Pricing Model obtained from the “OV” function on Bloomberg, L.P. (“Bloomberg”) determined
as of the day of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free interest
rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public announcement of the
applicable Fundamental Transaction and the Termination Date, (B) an expected volatility equal to the greater of 100% and the 100
day volatility obtained from the HVT function on Bloomberg as of the Trading Day immediately following the public announcement
of the applicable Fundamental Transaction, (C) the underlying price per share used in such calculation shall be the sum of the
price per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental
Transaction and (D) a remaining option time equal to the time between the date of the public announcement of the applicable Fundamental
Transaction and the Termination Date. The Company shall cause any successor entity in a Fundamental Transaction in which the Company
is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under
this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant to written agreements
in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such
Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of
the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable
for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares
of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this
Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares
of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction
and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose
of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which
is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor
Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions
of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to the Successor
Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this
Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein.

 

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f)Adjustment
Upon Issuance of Shares of Common Stock. If and whenever on or after the date of this Warrant, the Company issues or sells,
or in accordance with this Section 3 is deemed to have issued or sold, any shares of Common Stock (including the issuance or sale
of shares of Common Stock owned or held by or for the account of the Company, but excluding any Excluded Securities (as defined
below) issued or sold or deemed to have been issued or sold) for a consideration per share (the “New Issuance Price”)
less than a price equal to the Exercise Price in effect immediately prior to such issue or sale or deemed issuance or sale (such
Exercise Price then in effect is referred to as the “Applicable Price”) (the foregoing a “Dilutive
Issuance”), then immediately after such Dilutive Issuance, the Exercise Price then in effect shall be reduced to an amount
equal to the New Issuance Price. For all purposes of the foregoing (including, without limitation, determining the adjusted Exercise
Price and consideration per share under this Section 3(f)), the following shall also be applicable:

 

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(i)Issuance
of Options. If the Company in any manner grants or sells any warrants or other rights to subscribe for or to purchase, or any
options for the purchase of, Common Stock or any stock or security convertible into or exchangeable for Common Stock (such warrants,
rights or options being called “Options” and such convertible or exchangeable stock or securities being called
“Convertible Securities”) and the lowest price per share for which one share of Common Stock is issuable upon
the exercise of any such Option or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of
any such Option is less than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and to have
been issued and sold by the Company at the time of the granting or sale of such Option for such price per share. For purposes of
this Section 3(f)(i), the “lowest price per share for which one share of Common Stock is issuable upon the exercise of any
such Options or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option”
shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company
with respect to any one share of Common Stock upon the granting or sale of such Option, upon exercise of such Option and upon conversion,
exercise or exchange of any Convertible Security issuable upon exercise of such Option and (y) the lowest exercise price set forth
in such Option for which one share of Common Stock is issuable upon the exercise of any such Options or upon conversion, exercise
or exchange of any Convertible Securities issuable upon exercise of any such Option minus (2) the sum of all amounts paid or payable
to the holder of such Option (or any other Person) upon the granting or sale of such Option, upon exercise of such Option and upon
conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option plus the value of any other
consideration received or receivable by, or benefit conferred on, the holder of such Option (or any other Person). Except as contemplated
below, no further adjustment of the Exercise Price shall be made upon the actual issuance of such shares of Common Stock or of
such Convertible Securities upon the exercise of such Options or upon the actual issuance of such shares of Common Stock upon conversion,
exercise or exchange of such Convertible Securities.

 

 

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(ii)Issuance
of Convertible Securities. If the Company in any manner issues or sells any Convertible Securities and the lowest price per
share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof is less than the Applicable
Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the
time of the issuance or sale of such Convertible Securities for such price per share. For the purposes of this Section 3(f)(ii),
the “lowest price per share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof”
shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company
with respect to one share of Common Stock upon the issuance or sale of the Convertible Security and upon conversion, exercise or
exchange of such Convertible Security and (y) the lowest conversion price set forth in such Convertible Security for which one
share of Common Stock is issuable upon conversion, exercise or exchange thereof minus (2) the sum of all amounts paid or payable
to the holder of such Convertible Security (or any other Person) upon the issuance or sale of such Convertible Security plus the
value of any other consideration received or receivable by, or benefit conferred on, the holder of such Convertible Security (or
any other Person). Except as contemplated below, no further adjustment of the Exercise Price shall be made upon the actual issuance
of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities, and if any such issue or sale
of such Convertible Securities is made upon exercise of any Options for which adjustment of this Warrant has been or is to be made
pursuant to other provisions of this Section 3(f), except as contemplated below, no further adjustment of the Exercise Price shall
be made by reason of such issue or sale.

 

(iii)Change
in Option Price or Rate of Conversion. If the purchase or exercise price provided for in any Options, the additional consideration,
if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible
Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases at any time, the
Exercise Price in effect at the time of such increase or decrease shall be adjusted to the Exercise Price which would have been
in effect at such time had such Options or Convertible Securities provided for such increased or decreased purchase price, additional
consideration or increased or decreased conversion rate, as the case may be, at the time initially granted, issued or sold. For
purposes of this Section 3(f)(iii), if the terms of any Option or Convertible Security that was outstanding as of the date of issuance
of this Warrant are increased or decreased in the manner described in the immediately preceding sentence, then such Option or Convertible
Security and the shares of Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been
issued as of the date of such increase or decrease. No adjustment pursuant to this Section 3(f) shall be made if such adjustment
would result in an increase of the Exercise Price then in effect.

 

    	11

    	 

    

 

(iv)Calculation
of Consideration Received. If any Option and/or Convertible Security and/or Adjustment Right is issued in connection with the
issuance or sale or deemed issuance or sale of any other securities of the Company (as determined by the Holder, the “Primary
Security”, and such any Option and/or Convertible Security and/or Adjustment Right, each a “Secondary Securities”),
together comprising one integrated transaction, the consideration per share of Common Stock with respect to such Primary Security
shall be deemed to be equal to the difference of (x) the lowest price per share for which one share of Common Stock was issued
in such integrated transaction (or was deemed to be issued pursuant to Section 3(f)(i) or 3(f)(ii) above, as applicable) solely
with respect to such Primary Security, minus (y) with respect to such Secondary Securities, the sum of (I) the Black Scholes Consideration
Value of each such Option, if any, (II) the fair market value (as determined by the Holder) or the Black Scholes Consideration
Value, as applicable, of such Adjustment Right, if any, and (III) the fair market value (as determined by the Holder) of such Convertible
Security, if any, in each case, as determined on a per share basis in accordance with this Section 3(f)(iv). If any shares of Common
Stock, Options or Convertible Securities are issued or sold or deemed to have been issued or sold for cash, the consideration received
therefor (for the purpose of determining the consideration paid for such Common Stock, Option or Convertible Security, but not
for the purpose of the calculation of the Black Scholes Consideration Value) will be deemed to be the net amount of consideration
received by the Company therefor. If any shares of Common Stock, Options or Convertible Securities are issued or sold for a consideration
other than cash (for the purpose of determining the consideration paid for such Common Stock, Option or Convertible Security, but
not for the purpose of the calculation of the Black Scholes Consideration Value), the amount of such consideration received by
the Company will be the fair value of such consideration, except where such consideration consists of publicly traded securities,
in which case the amount of consideration received by the Company for such securities will be the arithmetic average of the VWAPs
of such security for each of the five (5) Trading Days immediately preceding the date of receipt. If any shares of Common Stock,
Options or Convertible Securities are issued to the owners of the non-surviving entity in connection with any merger in which the
Company is the surviving entity (for the purpose of determining the consideration paid for such Common Stock, Option or Convertible
Security, but not for the purpose of the calculation of the Black Scholes Consideration Value), the amount of consideration therefor
will be deemed to be the fair value of such portion of the net assets and business of the non-surviving entity as is attributable
to such shares of Common Stock, Options or Convertible Securities, as the case may be. The fair value of any consideration other
than cash or publicly traded securities will be determined jointly by the Company and the Holder. If such parties are unable to
reach agreement within ten (10) days after the occurrence of an event requiring valuation (the “Valuation Event”),
the fair value of such consideration will be determined within five (5) Trading Days after the tenth (10th) day following such
Valuation Event by an independent, reputable appraiser jointly selected by the Company and the Holder. The determination of such
appraiser shall be final and binding upon all parties absent manifest error and the fees and expenses of such appraiser shall be
borne by the Company.

 

    	12

    	 

    

 

(v)As
used in this Section 3(f), the following defined terms have the meanings set forth below:

 

(a)“Adjustment
Right” means any right granted with respect to any securities issued in connection with, or with respect to, any issuance
or sale (or deemed issuance or sale in accordance with Section 3) of shares of Common Stock that could result in a decrease in
the net consideration received by the Company in connection with, or with respect to, such securities (including, without limitation,
any cash settlement rights, cash adjustment or other similar rights).

 

(b)“Black
Scholes Consideration Value” means the value of the applicable Option, Convertible Security or Adjustment Right (as the
case may be) as of the date of issuance thereof calculated using the Black Scholes Option Pricing Model obtained from the “OV”
function on Bloomberg utilizing (i) an underlying price per share equal to the Closing Sale Price (as defined below) of the Common
Stock on the Trading Day immediately preceding the public announcement of the execution of definitive documents with respect to
the issuance of such Common Stock, Options, Convertible Securities, other right to purchase shares of Common Stock or Adjustment
Right (as the case may be), (ii) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining
term of such Common Stock, Options, Convertible Securities, other right to purchase shares of Common Stock or Adjustment Right
(as the case may be) as of the date of issuance of such Common Stock, Options, Convertible Securities, other right to purchase
shares of Common Stock or Adjustment Right (as the case may be), (iii) a zero cost of borrow and (iv) an expected volatility equal
to the greater of 100% and the 100- day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day
annualization factor) as of the Trading Day immediately following the date of issuance of such such Common Stock, Options, Convertible
Securities, other right to purchase shares of Common Stock or Adjustment Right (as the case may be).

 

(c)“Closing
Sale Price” means, for any security as of any date, the last closing trade price for such security on the Trading Market
on which the Common Stock is then listed or quoted, as reported by Bloomberg, or, if the Trading Market begins to operate on an
extended hours basis and does not designate the closing trade price, then the last trade price of such security prior to 4:00:00
p.m., New York City time, as reported by Bloomberg, or, if the Trading Market is not the principal securities exchange or trading
market for such security, the last trade price of such security on the principal securities exchange or trading market where such
security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last trade price of such security
in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no closing trade
price, respectively, is reported for such security by Bloomberg, 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 OTC Markets Group Inc. (formerly Pink Sheets
LLC). If the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing
Sale Price of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If
the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved
by an appraiser as provided for in Section 3(f)(iv). All such determinations shall be appropriately adjusted for any stock dividend,
stock split, stock combination or other similar transaction during such period.

 

    	13

    	 

    

 

(d)“Excluded
Securities” means the issuance of (a) shares of Common Stock upon the exercise, conversion or exchange of securities
(including Convertible Securities and Options) issued and outstanding on the date hereof, including the Warrants, provided that
such securities have not been amended since date hereof to increase the number of such securities or to decrease the exercise price,
exchange price or conversion price of such securities, (b) options and the shares of Common Stock issuable upon exercise of the
options granted or to be granted to Dr. Abraham Israeli annually during the term of the Agreement dated
April 13, 2010, by and among the Company, Dr. Abraham Israeli and Hadasit Medical Research Services and Development Ltd. (“Hadasit”),
as amended December 31, 2011 (the “Hadasit Agreement”), for the purchase of 166,666 shares of Common
Stock at an exercise price equal to $0.00005 per share, (c) warrants and the shares of Common Stock issuable upon exercise of the
warrants issued to Hadasit annually during the term of the Hadasit Agreement for the purchase of 33,334 shares of Common Stock
at an exercise price equal to $0.00005 per share, (d) any options or issuances of shares of Common Stock made pursuant to the Company’s
Director Compensation Plan as adopted June 27, 2011, and (e) options or issuances of shares of Common Stock made pursuant to the
Company’s Amended and Restated 2004 Global Share Option Plan or the Company’s Amended and Restated 2005 U.S. Stock
Option and Incentive Plan, each as amended.

 

g)Calculations.
All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be.
For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall
be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

 

h)Notice
to Holder.

 

i.Adjustment
to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly
mail to the Holder a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of
Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.

 

    	14

    	 

    

 

ii.Notice
to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the
Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the
Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares
of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection
with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer
of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted
into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation
or winding up of the affairs of the Company, then, in each case, the Company shall cause to be mailed to the Holder at its last
address as it shall appear upon the Warrant Register (as defined below) of the Company, at least 20 calendar days prior to the
applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the
purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which
the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to
be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected
to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled
to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation,
merger, sale, transfer or share exchange; provided that the failure to mail such notice or any defect therein or in the mailing
thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice
provided hereunder constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries,
the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall
remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event
triggering such notice except as may otherwise be expressly set forth herein.

 

    	15

    	 

    

 

Section 4.Transfer
of Warrant.

 

a)Transferability.
This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in
part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment
of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient
to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company
shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination
or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion
of this Warrant not so assigned, and this Warrant shall promptly be cancelled. The Warrant, if properly assigned in accordance
herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

 

b)New
Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the
Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by
the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants
to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial
issuance date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant
thereto.

 

c)Warrant
Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant
Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered
Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and
for all other purposes, absent actual notice to the contrary.

 

Section 5.Miscellaneous.

 

a)No
Rights as Stockholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends or other rights
as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in
Section 3.

 

b)Loss,
Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant
Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of
the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate,
if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation,
in lieu of such Warrant or stock certificate.

 

    	16

    	 

    

 

c)Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or
granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding
Business Day.

 

d)Authorized
Shares.

 

The Company covenants
that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient
number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant.
The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged
with the duty of executing stock certificates to execute and issue the necessary Warrant Shares upon the exercise of the purchase
rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares
may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market
upon which the Common Stock may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise
of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment
for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from
all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer
occurring contemporaneously with such issue).

 

Except and
to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending
its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions
as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting
the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable
therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate
in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant
and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory
body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.

 

Before taking
any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary
from any public regulatory body or bodies having jurisdiction thereof.

 

    	17

    	 

    

 

e)Jurisdiction;
Consent to Jurisdiction: Waiver of Jury Trial. This Warrant shall be governed by, and construed in accordance with, the internal
laws of the State of New York, without reference to the choice of law provisions thereof. The Company and, by accepting this Warrant,
the Holder, each irrevocably submits to the exclusive jurisdiction of the courts of the State of New York located in New York County
and the United States District Court for the Southern District of New York for the purpose of any suit, action, proceeding or judgment
relating to or arising out of this Warrant and the transactions contemplated hereby. Service of process in connection with any
such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods as are specified for
the giving of notices under this Warrant. The Company and, by accepting this Warrant, the Holder, each irrevocably consents to
the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in such court. The Company
and, by accepting this Warrant, the Holder, each irrevocably waives any objection to the laying of venue of any such suit, action
or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such
court has been brought in an inconvenient forum. EACH OF THE COMPANY AND, BY ITS ACCEPTANCE HEREOF, THE HOLDER HEREBY WAIVES
ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS WARRANT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED
SPECIFICALLY AS TO THIS WAIVER.

 

f)Restrictions.
The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does
not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.

 

g)Nonwaiver
and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate
as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision
of this Warrant, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any
material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and
expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by
the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

 

h)Notices.
The Company shall provide Holder with prompt written notice of all actions taken pursuant to this Warrant. Whenever notice is required
to be given under this Warrant, unless otherwise provided herein, such notice shall be given in writing, will be mailed (a) if
within the domestic United States by first-class registered or certified airmail, or nationally recognized overnight express courier,
postage prepaid, or by facsimile or (b) if delivered from outside the United States, by International Federal Express or facsimile,
and (c) will be deemed given (i) if delivered by first-class registered or certified mail domestic, three business days after so
mailed, (ii) if delivered by nationally recognized overnight carrier, one business day after so mailed, (iii) if delivered by International
Federal Express, two business days after so mailed and (iv) if delivered by facsimile, upon electronic confirmation of receipt,
and will be delivered and addressed as follows:

 

    	18

    	 

    

 

(i)if
to the Company, to:

 

Brainstorm
Cell Therapeutics Inc.

12 Bazel
Street

P.O.Box 10019,

Kiryat Aryeh,

Petach Tikva,

Israel 49001

Attn:
Chaim Lebovits

Facsimile:
(972)3.923.6385

 

with a copy
to:

 

BRL Law Group
LLC

425 Boylston
St., 3rd Flr.

Boston, MA
02116

Attn: Tom Rosedale

Facsimile:
617-399-6930

 

(ii)if
to the Holder, at the address of the Holder appearing on the Warrant Register.

 

i)Limitation
of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase
Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder
for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company
or by creditors of the Company.

 

j)Remedies.
The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled
to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation
for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert
the defense in any action for specific performance that a remedy at law would be adequate.

 

k)Successors
and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure
to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns
of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and
shall be enforceable by the Holder or holder of Warrant Shares.

 

    	19

    	 

    

 

l)Amendment.
This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and
the holders of at least 66 2/3% of the then-outstanding Warrants.

 

m)Severability.
Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions
of this Warrant.

 

n)Headings.
The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of
this Warrant.

 

Section 6.Certain
Definitions. For purposes of this Warrant, the following terms shall have the following meanings:

 

		a)	“Affiliate” means, with respect to any Person, any other Person which directly
or indirectly through one or more intermediaries Controls, is controlled by, or is under common Control with, such Person.

 

		b)	“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. 

 

		c)	“Common Stock” means (i) the Company’s shares of Common Stock, par value
$0.00005 per share, and (ii) any share capital into which such Common Stock shall have been changed or any share capital resulting
from a reclassification of such Common Stock.

 

		d)	“Control” (including the terms “controlling”, “controlled
by” or “under common control with”) means the possession, direct or indirect, of the power to direct or cause
the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

 

		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)	“Trading Day” means any day on which the Common Stock are traded on the Trading
Market, or, if the Trading Market is not the principal trading market for the Common Stock, then on the principal securities exchange
or securities market on which the Common Stock are then traded; provided that “Trading Day” shall not include any day
on which the Common Stock are scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common
Stock are 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 4:00:00 p.m., New
York time). 

 

    	20

    	 

    

 

		g)	“Trading Market” means the OTCQB.

 

 

********************

 

(Signature Page Follows)

 

    	21

    	 

    

 

 

IN WITNESS WHEREOF, the
Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

 

 

 

	 	Brainstorm Cell Therapeutics inc.
	 	 	 
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	22

    	 

    

 

NOTICE OF EXERCISE

 

To:Brainstorm
Cell Therapeutics inc.

 

(1)The undersigned
hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised
in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

 

(2)Payment shall
take the form of (check applicable box):

 

 ̈
in lawful money of the United States by wire transfer or cashier’s check drawn on a United States bank; or

 

 ̈
if permitted by the terms of the Warrant, the cancellation of such number of Warrant Shares as is necessary, in accordance
with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable
pursuant to the cashless exercise procedure set forth in subsection 2(c).

 

(3)Please issue said
Warrant Shares in the name of the undersigned or in such other name as is specified below:

 

	 		 

 

 

The Warrant Shares shall be delivered to
the following DWAC Account Number:

 

	 		 
	 	 	 
	 		 
	 	 	 
	 		 

 

 

[SIGNATURE
OF HOLDER]

 

	Name of Investing Entity:	 

	Signature of Authorized Signatory of Investing Entity:	 

	Name of Authorized Signatory:	 

	Title of Authorized Signatory:	 

	Date:	 

 

    	 

    	 

    

 

ASSIGNMENT FORM

 

(To assign the foregoing warrant, execute

this form and supply required information.

Do not use this form to exercise the warrant.)

 

 

 

FOR VALUE RECEIVED, [____]
all of or [_______] shares of the foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

 

_______________________________________________
whose address is

 

_______________________________________________________________.

 

 

 

_______________________________________________________________

 

	 	Date:  ______________, _______

 

 

 

	 	Holder’s Signature:		 
	 	 	 	 
	 	Holder’s Address:		 
	 	 	 	 
	 	 		 

 

 

 

	Signature Guaranteed:  	___________________________________________	 

 

 

 

NOTE: The signature to this Assignment
Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever,
and must be guaranteed by a bank or trust company. Officers of corporations and those acting in a fiduciary or other representative
capacity should file proper evidence of authority to assign the foregoing Warrant.Waiver
and Second Amendment to Credit Agreement

 

This WAIVER AND SECOND
AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is made and entered into as of August 12, 2013 by and among
Bacterin International, Inc.,
a Nevada corporation (the “Borrower”), BACTERIN INTERNATIONAL HOLDINGS, INC., a Delaware
corporation (“Holdings”), and ROS
Acquisition Offshore LP, a Cayman Islands Exempted Limited Partnership (the “Lender”).

 

WHEREAS, the Borrower
and the Lender are party to that certain Credit Agreement, dated as of August 24, 2012 (as amended by that certain First Amendment
to Credit Agreement, dated as of May 16, 2013, the “Credit Agreement”), pursuant to which the Lenders have extended
credit to the Borrower on the terms set forth therein;

 

WHEREAS, on April
5, 2013, Guy S. Cook (“Cook”) ceased to be employed by Holdings and the Borrower;

 

WHEREAS, pursuant
to Section 9.1.12 of the Credit Agreement, an Event of Default will occur if Holdings and the Borrower do not hire a replacement
for Cook approved by the Lender by July 4, 2013 (the “Replacement Deadline”);

 

WHEREAS, the Borrower
has requested that the Lender extend the Replacement Deadline by seventy-five (75) days to September 17, 2013; and

 

WHEREAS, the Lender
is willing to extend the Replacement Deadline in connection with amending the Credit Agreement as set forth herein, and Holdings
and the Borrower each agrees to such amendment, in each case only upon the terms and subject to the conditions set forth herein.

 

NOW, THEREFORE,
in consideration of the mutual agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:

 

1.                 
Definitions; Loan Document. Capitalized terms used herein without definition shall have the meanings assigned
to such terms in the Credit Agreement. This Amendment shall constitute a Loan Document for all purposes of the Credit Agreement
and the other Loan Documents.

 

2.                 
Amendment. The Credit Agreement is hereby amended by adding a new Section 7.16 to read in its entirety as
follows:

 

SECTION 7.16 Board
Observation Rights.

 

    	 

    	 

    

 

(a)               
Holdings and the Borrower shall permit one (1) person representing the Lender (the “Observer”) to attend
and observe (but not vote) at all meetings of Holdings’ (or the Borrower’s or any Subsidiary’s, as applicable)
board of directors or any committee thereof, whether in person, by telephone or otherwise as requested by the Observer. Holdings
and the Borrower shall notify the Observer in writing at least five (5) Business Days in advance (or, if a shorter notice period
is reasonably necessary given the circumstances, as soon as possible and in all circumstances at least twenty-four (24) hours in
advance) of (i) the date and time for each general or special meeting of any such board of directors or any committee thereof and
(ii) the adoption of any resolutions or actions by any such board of directors or any committee thereof by written consent (describing,
in reasonable detail, the nature and substance of such action). The general meetings of Holdings’ board of directors shall
take place no less than three times per year. Holdings and the Borrower shall concurrently deliver to the Observer all notices
and any materials delivered to any such board of directors or any committee thereof in connection with a meeting or action to be
taken by written consent, including a draft of any material resolutions or actions proposed to be adopted by written consent. The
Observer shall be free prior to such meeting or adoption by written consent to contact the applicable board of directors and/or
committee and discuss the pending actions to be taken. Any such board of directors or committee thereof may meet in executive session
without the Observer present to the extent such board of directors or committee determines in good faith that each of the issues
to be discussed at such session is not appropriate to be discussed with the Observer because (i) such issue directly involves the
Loan Documents and discussion thereof would result in a conflict of interest with the Lender with respect thereto or (ii) the discussion
of such issue in the presence of the Observer would result in the disclosure of trade secrets or the loss of attorney-client privilege.
In the event Holdings or the Borrower excludes the Observer from any meeting or portion thereof or withholds any information or
materials related thereto, Holdings and the Borrower shall promptly provide to the Observer a general description, which shall
be true and correct in all material respects, of the matters discussed during such meeting or portion thereof at which the Observer
was excluded and any such withheld information or materials.

 

(b)              
Holdings (or the Borrower or a Subsidiary, as applicable) shall pay the Observer’s reasonable out-of-pocket expenses
(including the cost of travel, meals and lodging) in connection with the attendance of such meetings.

 

(c)               
The Observer shall be deemed to be a “Receiving Party” for purposes of Sections 7.1 through 7.3 of the Royalty
Agreement and shall be subject to the obligations of a “Receiving Party” contained in such sections.

 

3.                 
Waiver. The Lender hereby (i) agrees to extend the Replacement Deadline until September 17, 2013, (ii) waives
any Event of Default that would have occurred if a replacement for Cook approved by the Lender were not hired by Holdings and the
Borrower by July 4, 2013 and (iii) agrees not to exercise any rights or remedies that may be available to it as a result of the
failure of Holdings and the Borrower to hire a replacement for Cook approved by the Lender by July 4, 2013.

 

4.                 
Effective Date. This Amendment shall become effective on the date on which the Lender, the Borrower and Holdings
each duly executes a counterpart of this Amendment.

 

5.                 
Condition to Effectiveness of Waiver. To induce the Lender to agree to the terms of Section 3, Holdings
and the Borrower agree that they shall hire a replacement for Cook by September 17, 2013, such replacement to be approved in advance
in writing by the Lender in the Lender’s sole discretion (the “Condition”). The failure by Holdings and
the Borrower to satisfy the Condition shall be an immediate Event of Default.

 

    	-2-

    	 

    

 

6.                 
Expenses. The Borrower agrees to pay on demand all expenses of the Lender (including, without limitation,
the fees and out-of-pocket expenses of Covington & Burling LLP, counsel to the Lender, and of local counsel, if any, who may
be retained by or on behalf of the Lender) incurred in connection with the negotiation, preparation, execution and delivery of
this Amendment.

 

7.                 
Representations and Warranties. Holdings and the Borrower each represents and warrants to the Lender as follows:

 

(a)               
After giving effect to this Amendment, the representations and warranties of the Borrower and the Guarantors contained in
the Credit Agreement or any other Loan Document shall, (i) with respect to representations and warranties that contain a materiality
qualification, be true and correct in all respects on and as of the date hereof, and (ii) with respect to representations and warranties
that do not contain a materiality qualification, be true and correct in all material respects on and as of the date hereof, and
except that the representations and warranties limited by their terms to a specific date shall be true and correct as of such date.

 

(b)              
After giving effect to this Amendment, no Default or Event of Default under the Credit Agreement will occur or be continuing
(other than any Default or Event of Default that may directly result from a violation of Section 8.4.1 of the Credit Agreement
solely with respect to the Fiscal Quarter ending June 30, 2013).

 

8.                 
No Implied Amendment or Waiver. Except as expressly set forth in this Amendment, this Amendment shall not,
by implication or otherwise, limit, impair, constitute a waiver of or otherwise affect any rights or remedies of the Lender under
the Credit Agreement or the other Loan Documents, or alter, modify, amend or in any way affect any of the terms, obligations or
covenants contained in the Credit Agreement or the other Loan Documents, all of which shall continue in full force and effect.
Nothing in this Amendment shall be construed to imply any willingness on the part of the Lender to agree to or grant any similar
or future amendment, consent or waiver of any of the terms and conditions of the Credit Agreement or the other Loan Documents.

 

9.                 
Waiver and Release. TO INDUCE THE LENDER TO AGREE TO THE TERMS OF THIS AMENDMENT, HOLDINGS AND THE BORROWER
EACH REPRESENTS AND WARRANTS THAT AS OF THE DATE HEREOF THERE ARE NO CLAIMS OR OFFSETS AGAINST OR RIGHTS OF RECOUPMENT WITH RESPECT
TO OR DEFENSES OR COUNTERCLAIMS TO ITS OBLIGATIONS UNDER THE LOAN DOCUMENTS AND IN ACCORDANCE THEREWITH IT:

 

(a)               
WAIVES ANY AND ALL SUCH CLAIMS, OFFSETS, RIGHTS OF RECOUPMENT, DEFENSES OR COUNTERCLAIMS, WHETHER KNOWN OR UNKNOWN, ARISING
PRIOR TO THE DATE HEREOF; AND

 

(b)              
RELEASES AND DISCHARGES THE LENDER, ITS AFFILIATES AND ITS AND THEIR OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, SHAREHOLDERS
AND ATTORNEYS (COLLECTIVELY THE “RELEASED PARTIES”) FROM ANY AND ALL OBLIGATIONS, INDEBTEDNESS, LIABILITIES,
CLAIMS, RIGHTS, CAUSES OF ACTION OR DEMANDS WHATSOEVER, WHETHER KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED, IN LAW OR EQUITY, WHICH
THE BORROWER EVER HAD, NOW HAS, CLAIMS TO HAVE OR MAY HAVE AGAINST ANY RELEASED PARTY ARISING PRIOR TO THE DATE HEREOF AND FROM
OR IN CONNECTION WITH THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY.

 

    	-3-

    	 

    

 

10.             
Counterparts; Governing Law. This Amendment may be executed in any number of counterparts and by different
parties hereto on separate counterparts, each of such when so executed and delivered shall be an original, but all of such counterparts
shall together constitute but one and the same agreement. Delivery of an executed counterpart of a signature page of this Amendment
by fax transmission or other electronic mail transmission (e.g., “pdf” or “tif”) shall be effective as
delivery of a manually executed counterpart of this Amendment. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS
LAW OF THE STATE OF NEW YORK).

 

[Remainder
of Page Intentionally Left Blank]

 

    	-4-

    	 

    

 

IN WITNESS WHEREOF, the parties
hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized as of the day and year
first above written.

 

 

 

	 	
        BACTERIN INTERNATIONAL, INC.,

        as the Borrower

	 	 
	 	By: /s/ John P. Gandolfo                                
	 	Name:  John P. Gandolfo
	 	Title:    Chief Financial Officer
	 	 
	 	 
	 	
        BACTERIN INTERNATIONAL HOLDINGS, INC.,

        as Holdings and a Guarantor

	 	 
	 	By: /s/ John P. Gandolfo                                
	 	Name:  John P. Gandolfo
	 	Title:    Chief Financial Officer
	 	 
	 	 
	 	ROS Acquisition Offshore LP,

as the Lender
	 	By ROS Acquisition Offshore GP Ltd.,
	 	its General Partner
	 	By OrbiMed Advisors LLC,
	 	its investment manager
	 	 
	 	By: /s/ Samuel D. Isaly                                
	 	Name:  Samuel D. Isaly
	 	Title:    Managing Member

 

 

 

Signature Page to Waiver and Second Amendment
to Credit Agreement

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