Settlement and Waiver Agreement
Made as of this 25
th day of July, 2011
By and among
Brainstorm
Cell Therapeutics Inc. ,
(“ BCLI Inc. ”);
Brainstorm
Cell Thrapeutics Ltd. , a
100% subsidiary of BCLI Inc. (" BCLI Ltd. ")
Mr. Abraham
Efrati (" Efrati
").
Pro Int
Ltd. , a company held
100% by Efrati (" Pro Int ").
WHEREAS , Efrati, personally and through Pro Int was
employed and served as the CEO of BCLI Inc. and BCLI Ltd. since
October 2007 through his resignation on 28 February 2011 (the "
Service ") and served as a member of the Board of Directors
of BCLI Inc. (the " Board Membership "); and
WHEREAS , in connection with the Service a debt (the "
Debt ") has accrued through the termination of the Service
with BCLI Inc. and BCLI Ltd.
WHEREAS , in connection with the Service Efrati was
granted options under the Stock Option Plan of BCLI Inc. (the "
Plan ") to purchase shares of BCLI Inc. some of which became
exercisable prior to the termination of the Service as follows: (i)
up to 1,000,000 shares at $0.15 per share and (ii) up to 333,333
shares at $0.067 per share (together, the " Vested Options
") and the rest of the options that were granted to Efrati to
purchase shares at $0.067 per share were not vested (the "
Non-Vested Options ").
WHEREAS , BCLI Inc., BCLI Ltd, on one hand, and Efrati
and Pro Int, on the other, wish to terminate all of their legal
relationships, and settle any possible claims against one
another;
NOW,
THEREFORE , in
consideration of the foregoing and the mutual covenants herein
contained, the parties hereto hereby agree as follows:
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Settlement
of the Debt, Payments. As
full settlement of the Debt, BCLI Inc. and/or BCLI Ltd. will pay to
Efrati (i) NIS 543,077 on or before August 1
st , 2011, (ii) an additional NIS 200,000 on or
before August 20 th
, 2011 and (ii) an additional NIS
162,051 on or before September 15 th , 2011,
by wire transfer to a bank account indicated by Efrati less any
taxes that they are required to withhold by law or otherwise with
respect to such amounts.
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Acceleration
of Vesting of
Non-Vested Options . The vesting of 150,000 of the Non-Vested
Options shall be accelerated such that they will become exercisable
in accordance with the Plan and Section 3 below (the "
Accelerated Options ").
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Vesting and
Exercise Period of Options . The exercise period of the Vested Options and
the Accelerated Options shall be extended such that they may be
exercised at any time prior to April 30, 2012, 4 PM, New York
Time.
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Sale of
Shares. Efrati and Pro
Int. undertake that following the exercise of the options that they
will sell all shares of BCLI Inc., in coordination with a
representative of BCLI Inc. and through a broker designated by such
representative. Until notified otherwise by the Company, the
representative of BCLI Inc. is Mr. Mark Segal. BCLI Inc. may refuse
to register any transfer or any attempt to sell or transfer any
shares not in accordance with the provisions of this Section
4.
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The BCLI
representative will take all reasonable actions in good faith to
carry out the selling instructions from Efrati provided that such
sale will not detrimentally effect the share price of the BCLI Inc.
The BCLI representative obligates himself to be reasonably
available to Efrati and Pro Int. during all days that the stock
market is open and during all trading hours for one year from the
signing of this agreement. The BCLI representative will obligate
himself to sell shares only upon receiving Efrati and/or
Pro-Int’s request and only at a price agreed to with Efrati
and/or Pro Int.
BCLI undertakes
that if the BCLI representative sells shares without a request from
Efrati or Pro Int. or a at a price not approved by Efrati or Pro
Int. it will not deliver any shares on behalf of Efrati or Pro Int.
to the representative and Efrati and Pro Int’s option amounts
will remain the same as they were prior to such sale by the
representative.
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Subject to the
payment pursuant to Section 1 and the execution of Section 2 above
and the approval by the Board of Directors of BCLI Inc. of the
acceleration of the Non-Vested Options and the extension of the
exercise period of the Vested Options and Accelerat
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