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THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THIS WARRANT
AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY
NOT BE SOLD,
OFFERED FOR SALE, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE
REGISTRATION STATEMENT UNDER SAID ACT OR AN OPINION OF COUNSEL
REASONABLY
SATISFACTORY TO BRAINSTORM CELL THERAPEUTICS INC. THAT SUCH
REGISTRATION IS NOT
REQUIRED.
Right to Purchase 630,000 shares of Common Stock of
Brainstorm Cell Therapeutics Inc. (subject to adjustment
as provided herein)
COMMON STOCK PURCHASE WARRANT
No. 2006-002 Issue Date: October 3, 2006
BRAINSTORM CELL THERAPEUTICS INC., a corporation organized under
the laws
of the State of Washington (the "Company"), hereby certifies
that, for value
received, DOUBLE U MASTER FUND L.P., c/o Navigator Management
Ltd., Harbor
House, Waterfront Drive, P.O. Box 972, Road Town, Tortola,
British Virgin
Islands, Fax: (284) 494-4771, or its assigns (the "Holder"), is
entitled,
subject to the terms set forth below, to purchase from the
Company at any time
after the Issue Date until 5:00 p.m., E.D.T on the third
anniversary of the
Issue Date (the "Expiration Date"), up to 630,000 fully paid and
nonassessable
shares of the common stock of the Company (the "Common Stock"),
$0.00005 par
value per share at a per share purchase price of $0.30. The
aforedescribed
purchase price per share, as adjusted from time to time as
herein provided, is
referred to herein as the "Purchase Price." The number and
character of such
shares of Common Stock and the Purchase Price are subject to
adjustment as
provided herein. The Company may reduce the Purchase Price
without the consent
of the Holder.
The Company issued a Note, dated as of February 1, 2006, to the
Holder in
the original principal amount of One Hundred Eighty-Nine
Thousand Dollars
($189,000) (the "Note"). In consideration of the Holder's
agreement to extend
the maturity date of the Note to December 31, 2006 and to waive
any and all
interest or fees on, or default under, such Note, the Company
hereby issues this
Warrant to the Holder.
As used herein the following terms, unless the context otherwise
requires,
have the following respective meanings:
(a) The term "Common Stock" includes (a) the Company's Common
Stock,
$0.00005 par value per share, as authorized on the date of this
Warrant, and (b)
any other securities into which or for which any of the
securities described in
(a) may be converted or exchanged pursuant to a plan of
recapitalization,
reorganization, merger, sale of assets or otherwise.
(b) The term "Other Securities" refers to any stock (other than
Common
Stock) and other securities of the Company or any other person
(corporate or
otherwise) which the holder of the Warrant at any time shall be
entitled to
receive, or shall have received, on the exercise of the Warrant,
in lieu of or
in addition to Common Stock, or which at any time shall be
issuable or shall
have been issued in exchange for or in replacement of Common
Stock or Other
Securities pursuant to Section 3 or otherwise.
1. Exercise of Warrant.
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<PAGE>
1.1. Number of Shares Issuable upon Exercise. From and after the
Issue
Date through and including the Expiration Date, the Holder
hereof shall be
entitled to receive, upon exercise of this Warrant in whole in
accordance with
the terms of subsection 1.2 or upon exercise of this Warrant in
part in
accordance with subsection 1.3, shares of Common Stock of the
Company, subject
to adjustment pursuant to Section 3.
1.2. Full Exercise. This Warrant may be exercised in full by the
Holder
hereof by delivery of an original or facsimile copy of the form
of subscription
attached as Exhibit A hereto (the "Subscription Form") duly
executed by such
Holder and surrender of the original Warrant within five (5)
days of exercise,
to the Company at its principal office or at the office of its
Warrant Agent (as
provided hereinafter), accompanied by payment, in cash, wire
transfer or by
certified or official bank check payable to the order of the
Company, in the
amount obtained by multiplying the number of shares of Common
Stock for which
this Warrant is then exercisable by the Purchase Price then in
effect.
1.3. Partial Exercise. This Warrant may be exercised in part
(but not for
a fractional share) by surrender of this Warrant in the manner
and at the place
provided in subsection 1.2 except that the amount payable by the
Holder on such
partial exercise shall be the amount obtained by multiplying (a)
the number of
whole shares of Common Stock designated by the Holder in the
Subscription Form
by (b) the Purchase Price then in effect. On any such partial
exercise, the
Company, at its expense, will forthwith issue and deliver to or
upon the order
of the Holder hereof a new Warrant of like tenor, in the name of
the Holder
hereof or as such Holder (upon payment by such Holder of any
applicable transfer
taxes) may request, the whole number of shares of Common Stock
for which such
Warrant may still be exercised.
1.4. Fair Market Value. Fair Market Value of a share of Common
Stock as of
a particular date (the "Determination Date") shall mean:
(a) If the Company's Common Stock is traded on an exchange or is
quoted on
the National Association of Securities Dealers, Inc. Automated
Quotation
("NASDAQ"), National Market System, the NASDAQ Capital Market or
the American
Stock Exchange, LLC, then the closing or last sale price,
respectively, reported
for the last business day immediately preceding the
Determination Date;
(b) If the Company's Common Stock is not traded on an exchange
or on the
NASDAQ Global Market System, the NASDAQ Capital Market or the
American Stock
Exchange, Inc., but is traded in the over-the-counter market,
then the average
of the closing bid and ask prices reported for the last business
day immediately
preceding the Determination Date;
(c) Except as provided in clause (d) below, if the Company's
Common Stock
is not publicly traded, then as the Holder and the Company
agree, or in the
absence of such an agreement, by arbitration in accordance with
the rules then
standing of the American Arbitration Association, before a
single arbitrator to
be chosen from a panel of persons qualified by education and
training to pass on
the matter to be decided; or
(d) If the Determination Date is the date of a liquidation,
dissolution or
winding up, or any event deemed to be a liquidation, dissolution
or winding up
pursuant to the Company's charter, then all amounts to be
payable per share to
holders of the Common Stock pursuant to the charter in the event
of such
liquidation, dissolution or winding up, plus all other amounts
to be payable per
share in respect of the Common Stock in liquidation under the
charter, assuming
for the purposes of this clause (d) that all of the shares of
Common Stock then
issuable upon exercise of all of the Warrants are outstanding at
the
Determination Date.
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<PAGE>
1.5. Company Acknowledgment. The Company will, at the time of
the exercise
of the Warrant, upon the request of the Holder hereof
acknowledge in writing its
continuing obligation to afford to such Holder any rights to
which such Holder
shall continue to be entitled after such exercise in accordance
with the
provisions of this Warrant. If the Holder shall fail to make any
such request,
such failure shall not affect the continuing obligation of the
Company to afford
to such Holder any such rights.
1.6. Trustee for Warrant Holders. In the event that a bank or
trust
company shall have been appointed as trustee for the Holder of
the Warrants
pursuant to Subsection 2.2, such bank or trust company shall
have all the powers
and duties of a warrant agent (as hereinafter described) and
shall accept, in
its own name for the account of the Company or such successor
person as may be
entitled thereto, all amounts otherwise payable to the Company
or such
successor, as the case may be, on exercise of this Warrant
pursuant to this
Section 1.
1.7 Delivery of Stock Certificates, etc. on Exercise. The
Company agrees
that the shares of Common Stock purchased upon exercise of this
Warrant shall be
deemed to be issued to the Holder hereof as the record owner of
such shares as
of the close of business on the date on which this Warrant shall
have been
surrendered and payment made for such shares as aforesaid. As
soon as
practicable after the exercise of this Warrant in full or in
part, and in any
event within five (5) days thereafter ("Delivery Date"), the
Company at its
expense (including the payment by it of any applicable issue
taxes) will cause
to be issued in the name of and delivered to the Holder hereof,
or as such
Holder (upon payment by such Holder of any applicable transfer
taxes) may direct
in compliance with applicable securities laws, a certificate or
certificates for
the number of duly and validly issued, fully paid and
nonassessable shares of
Common Stock (or Other Securities) to which such Holder shall be
entitled on
such exercise, plus, in lieu of any fractional share to which
such Holder would
otherwise be entitled, cash equal to such fraction multiplied by
the then Fair
Market Value of one full share of Common Stock, together with
any other stock or
other securities and property (including cash, where applicable)
to which such
Holder is entitled upon such exercise pursuant to Section 1 or
otherwise.
2. Adjustment for Reorganization, Consolidation, Merger,
etc.
2.1. Reorganization, Consolidation, Merger, etc. In case at any
time or
from time to time, the Company shall (a) effect a
reorganization, (b)
consolidate with or merge into any other person or (c) transfer
all or
substantially all of its properties or assets to any other
person under any plan
or arrangement contemplating the dissolution of the Company,
then, in each such
case, as a condition to the consummation of such a transaction,
proper and
adequate provision shall be made by the Company whereby the
Holder of this
Warrant, on the exercise hereof as provided in Section 1, at any
time after the
consummation of such reorganization, consolidation or merger or
the effective
date of such dissolution, as the case may be, shall receive, in
lieu of the
Common Stock (or Other Securities) issuable on such exercise
prior to such
consumm
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