BRAINSTORM CELL THERAPEUTICS, INC. Common Stock Purchase Warrant
Exhibit
10.2
Warrant
No.: [__]
Number
of
Shares of Common Stock: [_____]
Date
of
Issuance: [] (“Issuance
Date”)
BRAINSTORM
CELL THERAPEUTICS, INC.
BRAINSTORM
CELL THERAPEUTICS, INC.,
a
Delaware corporation (“Company”),
hereby certifies that, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, ACCBT
CORP.,
the
registered holder hereof or its permitted assigns ( “Holder”),
is
entitled, subject to the terms set forth below, to purchase from the Company,
at
the Exercise Price (as defined below) then in effect, upon surrender of this
Warrant Common Stock (including any Warrants to Purchase Common Stock issued
in
exchange, transfer or replacement hereof, “Warrant”),
at
any time or times on or after the date hereof, but not after 11:59 p.m., Eastern
Standard Time, on the Expiration Date (as defined below), [________] fully
paid
nonassessable shares of Common Stock (as defined below) (“Warrant
Shares”).
Except as otherwise defined herein, capitalized terms in this Warrant shall
have
the meanings set forth in Section 1.
This
Warrant is one of a series of warrants to purchase Common Stock (“Warrants”)
issued
pursuant to that certain Subscription Agreement, dated as of July 2, 2007
(“Subscription
Date”),
by
and between the Company and ACCBT Corp. (“Investor”)
referred to therein (the “Subscription
Agreement”).
1. DEFINITIONS
1.1
“$”
means
United States Dollars.
1.2
“Board”
means
the board of directors of the Company.
1.3
“Bloomberg”
means
Bloomberg Financial Markets.
1.4
“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.
1.5
“Closing
Bid Price”
and
“Closing
Sale Price”
means,
for any security as of any date, the last closing bid price and last closing
trade price, respectively, for such security on the Principal Market, as
reported by Bloomberg, or, if the Principal Market begins to operate on an
extended hours basis and does not designate the closing bid price or the closing
trade price, as the case may be, then the last bid price or last trade price,
respectively, of such security prior to 4:00 p.m., New York Time, as reported
by
Bloomberg, or, if the Principal Market is not the principal securities exchange
or trading market for such security, the last closing bid price or last trade
price, respectively, 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 closing bid price or last trade
price, respectively, of such security in the over-the-counter market on the
electronic bulletin board for such security as reported by Bloomberg, or, if
no
closing bid price or last 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 Pink Sheets LLC (formerly the National Quotation Bureau, Inc.). If
the Closing Bid Price or the Closing Sale Price cannot be calculated for a
security on a particular date on any of the foregoing bases, the Closing Bid
Price or the Closing Sale Price, as the case may be, of such security on such
date shall be the fair market value as mutually determined by the Company and
the Holder. All such determinations to be appropriately adjusted for any stock
dividend, stock split, stock combination or other similar transaction during
the
applicable calculation period.
1.6
“Common
Stock”
means
(i) shares of common stock in the capital of the Company par value $0.00005,
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.
1.7 “Convertible
Securities”
means
any
shares or securities or instruments (other than Options) directly or indirectly
convertible into or exercisable or exchangeable for Common Shares.
1.8 “Excluded
Securities”
means
(i) shares of Common Stock issued pursuant to a transaction described in Section
3.3
below;
(ii)
shares of Common Stock issued or deemed issued to employees, consultants,
officers or directors (if in transactions with primarily non-financing purposes)
of this Company pursuant to a board approved stock option plan and in an
aggregate amount of up to [10%] of the shares of common Stock from time to
time
calculated on a fully-diluted as converted basis; (iii) shares of Common Stock
issued pursuant to other Warrants ; and (iv) shares of Common Stock issued
pursuant to other conversion of principal (but not interest) of any Convertible
Securities outstanding as of the Issuance Date
1.9
“Expiration
Date”
means
November 5, 2011.
1.10
“Options”
means
any
rights, warrants or options to subscribe for or purchase Common Shares or
Convertible Securities.
1.11
“Principal
Market”
means
the NASD’s OTC Bulletin Board.
2. EXERCISE
OF WARRANT
2.1
Mechanics
of Exercise.
Subject
to the terms and conditions hereof, this Warrant may be exercised by the Holder
on any day on or after the date hereof, in whole or in part, by (i) delivery
of
a written notice, in the form attached hereto as Exhibit A (“Exercise
Notice”),
of
the Holder’s election to exercise this Warrant and (ii) (A) payment to the
Company of an amount equal to the applicable Exercise Price multiplied by the
number of Warrant Shares as to which this Warrant is being exercised
(“Aggregate
Exercise Price”)
in
cash or wire transfer of immediately available funds or (B) by notifying the
Company that this Warrant is being exercised in a Cashless Exercise pursuant
to
and subject to the conditions set forth in Section 2.3
below.
The
Holder shall not be required to deliver the original Warrant in order to effect
an exercise hereunder. Execution and delivery of the Exercise Notice with
respect to less than all of the Warrant Shares shall have the same effect as
cancellation of the original Warrant and issuance of a new Warrant evidencing
the right to purchase the remaining number of Warrant Shares. On or before
the
first Business Day following the date on which the Company has received each
of
the Exercise Notice and the Aggregate Exercise Price (or notice of a Cashless
Exercise) (“Exercise
Delivery Documents”),
the
Company shall transmit by facsimile an acknowledgment of confirmation of receipt
of the Exercise Delivery Documents to the Holder and the Company’s transfer
agent (“Transfer
Agent”).
On or
before the third Business Day following the date on which the Company has
received all of the Exercise Delivery Documents (“Share
Delivery Date”),
the
Company shall issue and dispatch by overnight courier to the address as
specified in the Exercise Notice, a certificate, registered in the Company’s
share register in the name of the Holder or its designee, for the number of
shares of Common Stock to which the Holder is entitled pursuant to such
exercise. Upon delivery of the Exercise Notice and Aggregate Exercise Price
referred to in clause (ii)(A) above or notification to the Company of a Cashless
Exercise referred to in Section 2.3
below,
the
Holder shall be deemed for all corporate purposes to have become the holder
of
record of the Warrant Shares with respect to which this Warrant has been
exercised, irrespective of the date of delivery of the certificates evidencing
such Warrant Shares. If this Warrant is submitted in connection with any
exercise pursuant to this Section 2.1
and the
number of Warrant Shares represented by this Warrant submitted for exercise
is
greater than the number of Warrant Shares being acquired upon an exercise,
then
the Company shall as soon as practicable and in no event later than three
Business Days after any exercise and at its own expense, issue a new Warrant
(in
accordance with Section 5.4
below)
representing the right to purchase the number of Warrant Shares purchasable
immediately prior to such exercise under this Warrant, less the number of
Warrant Shares with respect to which this Warrant is exercised. No fractional
shares of Common Stock are to be issued upon the exercise of this Warrant,
but
rather the number of shares of Common Stock to be issued shall be rounded up
to
the nearest whole number. The Company shall pay any and all taxes which may
be
payable with respect to the issuance and delivery of Warrant Shares upon
exercise of this Warrant.
Notwithstanding anything to the contrary, a Cashless Exercise may only be
utilized with respect to up to and including 50% of the Warrant Shares, with
the
payment of the exercise price for all other Warrant Shares being in the form
of
cash or wire transfer of immediately available funds. Subject to the foregoing,
the Holder shall be entitled to determine which of the Warrant Shares shall
be
considered to qualify for Cashless Exercise.
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2.2
Exercise
Price.
For
purposes of this Warrant, “Exercise
Price”
means
[$0.20, $0.29, $0.36] subject to adjustment as provided herein.
2.3
Cashless
Exercise.
The
Holder may, in its sole discretion, exercise this Warrant with respect to up
to
50% of the number of shares of Common Stock issuable hereunder and, in lieu
of
making the cash payment otherwise contemplated to be made to the Company upon
such exercise in payment of the Aggregate Exercise Price, elect instead to
receive upon such exercise the “Net Number” of shares of Common Stock determined
according to the following formula (“Cashless
Exercise”):
Net
Number = (A
x
B) - (A x C)
B
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For
purposes of the foregoing formula:
A=
the
total number of shares with respect to which this Warrant is then being
exercised.
B=
the
Closing Sale Price of the shares of Common Stock (as reported by Bloomberg)
on
the date immediately preceding the date of the Exercise Notice.
C=
the
Exercise Price then in effect for the applicable Warrant Shares at the time
of
such exercise.
2.4
Disputes.
In the
case of a dispute as to the determination of the Exercise Price or the
arithmetic calculation of the Warrant Shares, the Company shall promptly issue
to the Holder the number of Warrant Shares that are not disputed.
2.5
Insufficient
Authorized Shares.
If at
any time while any of the Warrants remain outstanding the Company does not
have
a sufficient number of authorized and unreserved shares of Common Stock to
satisfy its obligation to reserve for issuance upon exercise of the Warrants
at
least a number of shares of Common Stock equal to 110% (“Required
Reserve Amount”)
of the
number of shares of Common Stock as shall from time to time be necessary to
effect the exercise of all of the Warrants then outstanding (“Authorized
Share Failure”),
then
the Company shall immediately take all action necessary to increase the
Company’s authorized shares of Common Stock to an amount sufficient to allow the
Company to reserve the Required Reserve Amount for the Warrants then
outstanding. Without limiting the generality of the foregoing sentence, as
soon
as practicable after the date of the occurrence of an Authorized Share Failure,
but in no event later than sixty (60) days after the occurrence of such
Authorized Share Failure, the Company shall hold a meeting of its stockholders
for the approval of an increase in the number of authorized shares of Common
Stock. In connection with such meeting, the Company shall provide each
stockholder with a proxy statement and shall use its best efforts to solicit
its
stockholders’ approval of such increase in authorized shares of Common Stock and
to cause its board of directors to recommend to the stockholders that they
approve such proposal.
3. ADJUSTMENT
OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES
The
Exercise Price and the number of Warrant Shares shall be adjusted from time
to
time as follows:
3.1
Full
Ratchet Adjustment of Exercise Price upon Issuance of Common
Stock.
After
the Closing Date, if the Company issues any shares of Common Stock in a bona
fide offering of its securities (including the issuance or sale of shares of
Common Stock owned or held by or for the account of the Company, but excluding
shares of Common Stock deemed to have been issued or sold by the Company in
connection with any Excluded Securities) for a consideration per share
(“New
Issuance Price”)
less
than the Exercise Price in effect immediately prior to such issue or sale (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.
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3.2
Provisions
Applicable to Exercise Price Adjustments.
For
purposes of determining the adjusted Exercise Price under Section 3.1
above,
the
following provisions shall apply:
3.2.1
Issuance
of Options.
If the
Company in any manner grants or sells any Options (other than any Excluded
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 or exchange
or exercise of any Convertible Securities issuable upon exercise of such Option
is less than the Exercise 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 3.2.1,
the
“lowest price per share for which one share of Common Stock is issuable upon
the
exercise of any such Option or upon conversion or exchange or exercise of any
Convertible Securities issuable upon exercise of such Option” shall be equal to
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 granting
or
sale of the Option, upon exercise of the Option and upon conversion or exchange
or exercise of any Convertible Security issuable upon exercise of such
Option.
3.2.2
Issuance
of Convertible Securities.
If the
Company in any manner issues or sells any Convertible Securities (other than
Excluded Securities) and the lowest price per share for which one share of
Common Stock is issuable upon such conversion or exchange or exercise thereof
is
less than the Exercise 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 of sale of such Convertible Securities for such price per share.
For the purposes of this Section 3.2.2,
the
“price per share for which one share of Common Stock is issuable upon such
conversion or exchange or exercise” shall be equal to 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 issuance or sale of the
Convertible Security and upon the conversion or exchange or exercise of such
Convertible Security.
3.2.3 Change
in Option Price or Rate of Conversion.
If the
purchase price provided for in any Options (other than Excluded Securities),
the
additional consideration, if any, payable upon the issue, conversion, exchange
or exercise of any Convertible Securities, or the rate at which any Convertible
Securities (other than Excluded Securities) are convertible into or exchangeable
or exercisable for Common Stock is changed, the Exercise Price in effect at
the
time of such change 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 changed purchase price, additional consideration or changed conversion
rate, as the case may be, at the time initially granted, issued or sold. For
purposes of this Section 3.2.3,
if the
terms of any Option or Convertible Security that was outstanding as of the
Closing Date are changed in the manner described in the immediately preceding
sentence, then such Option or Convertible Security and the Common Stock deemed
issuable upon exercise, conversion or exchange thereof shall be deemed to have
been issued as of the date of such change. No adjustment shall be made if such
adjustment would result in an increase of the Exercise Price then in
effect.
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3.2.4
Record
Date.
If the
Company takes a record of the holders of Common Stock for the purpose of
entitling them (i) to receive a dividend or other distribution payable in Common
Stock, Options or in Convertible Securities or (ii) to subscribe for or purchase
Common Stock, Options or Convertible Securities, then such record date will
be
deemed to be the date of the issue or sale of the Common Stock deemed to have
been issued or sold upon the declaration of such dividend or the making of
such
other distribution or the date of the granting of such right of subscription
or
purchase, as the case may be.
3.2.5
Dividends.
In case
the Company shall declare a dividend or make any other distribution upon any
stock of the Company (other than the Common Stock) payable in Common Stock,
Options or Convertible Securities, then any Common Stock, Options or Convertible
Securities, as the case may be, issuable in payment of such dividend or
distribution shall be deemed to have been issued or sold without
consideration.
3.2.6 Calculation
of Consideration.
In case
any shares of Common Stock, Options or Convertible Securities shall be issued
or
sold for cash, the consideration received therefor shall be deemed to be the
net
amount received by the Company therefor, after deduction therefrom of any
expenses incurred or any underwriting commissions or concessions paid or allowed
by the Company in connection therewith. In case any shares of Common Stock,
Options or Convertible Securities shall be issued or sold for a consideration
other than cash, the amount of the consideration other than cash received by
the
Company shall be deemed to be the fair value of such consideration as determined
in good faith by the Board, after deduction of any expenses incurred or any
underwriting commissions or concessions paid or allowed by the Company in
connection therewith. In case any Options shall be issued in connection with
the
issuance and sale of other securities of the Company, together comprising one
integral transaction in which no specific consideration is allocated to such
Options by the parties thereto, such Options shall be deemed to have been issued
for such consideration as determined in good faith by the Board. If Common
Stock, Options or Convertible Securities shall be issued or sold by the Company
and, in connection therewith, other Options or Convertible Securities
(“Additional
Rights”)
are
issued, then the consideration received or deemed to be received by the Company
shall be reduced by the fair market value of the Additional Rights (as
determined using the Black-Scholes option pricing model or another method
mutually agreed to by the Company and the Holder). The Board shall respond
promptly, in writing, to an inquiry by the Holder as to the fair market value
of
the Additional Rights.
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3.3
Adjustment
upon Subdivision or Combination of Common Stock.
If the
Company at any time on or after the date hereof subdivides (by any stock split,
stock dividend, recapitalization or otherwise) one or more classes of its
outstanding shares of Common Stock into a greater number of shares, the Exercise
Price in effect immediately prior to such subdivision will be proportionately
reduced and the number of Warrant Shares will be proportionately increased.
If
the Company at any time on or after the Closing Date combines (by combination,
reverse stock split or otherwise) one or more classes of its outstanding shares
of Common Stock into a smaller number of shares, the Exercise Price in effect
immediately prior to such combination will be proportionately increased and
the
number of Warrant Shares will be proportionately decreased. Any adjustment
under
this Section 3.3
shall
become effective at the close of business on the date the subdivision or
combination becomes effective.
4. NONCIRCUMVENTION
The
Company hereby covenants and agrees that the Company will not, by amendment
of
its Certificate of Incorporation, Bylaws (as such terms are defined in the
Subscription Agreement) or through any reorganization, transfer of assets,
consolidation, merger, scheme of arrangement, 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, and will at all times in
good faith carry out all the provisions of this Warrant and take all action
as
may be required to protect the rights of the Holder. Without limiting the
generality of the foregoing, the Company (i) shall not increase the par
value of any shares of Common Stock receivable upon the exercise of this Warrant
above the Exercise Price then in effect, (ii) shall take all such actions
as may be necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable shares of Common Stock upon the
exercise of this Warrant, and (iii) shall, so long as any of the Warrants are
outstanding, take all action necessary to reserve and keep available out of
its
authorized and unissued shares of Common Stock, solely for the purpose of
effecting the exercise of the Warrants, 110% of the number of shares of Common
Stock as shall from time to time be necessary to effect the exercise of the
Warrants then outstanding.
5. REISSUANCE
OF WARRANTS
5.1 Transfer
of Warrant.
If this
Warrant is to be transferred, the Holder shall surrender this Warrant to the
Company, whereupon the Company will forthwith issue and deliver upon the order
of the Holder a new Warrant (in accordance with Section 5.4
below),
registered as the Holder may request, representing the right to purchase the
number of Warrant Shares being transferred by the Holder and, if less then
the
total number of Warrant Shares then underlying this Warrant is being
transferred, a new Warrant (in accordance with Section 5.4
below)
to the
Holder representing the right to purchase the number of Warrant Shares not
being
transferred.
5.2
Lost,
Stolen or Mutilated Warrant.
Upon
receipt by the Company of evidence reasonably satisfactory to the Company of
the
loss, theft, destruction or mutilation of this Warrant, and, in the case of
loss, theft or destruction, of any indemnification undertaking by the Holder
to
the Company in customary form and, in the case of mutilation, upon surrender
and
cancellation of this Warrant, the Company shall execute and deliver to the
Holder a new Warrant (in accordance with Section 5.4
below)
representing the right to purchase the Warrant Shares then underlying this
Warrant.
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5.3
Exchangeable
for Multiple Warrants.
This
Warrant is exchangeable, upon the surrender hereof by the Holder at the
principal office of the Company, for a new Warrant or Warrants (in accordance
with Section 5.4
below)
representing in the aggregate the right to purchase the number of Warrant Shares
then underlying this Warrant, and each such new Warrant will represent the
right
to purchase such portion of such Warrant Shares as is designated by the Holder
at the time of such surrender; provided, however, that no Warrants for
fractional shares of Common Stock shall be given.
5.4
Issuance
of New Warrants.
Whenever the Company is required to issue a new Warrant pursuant to the terms
of
this Warrant, such new Warrant (i) shall be of like tenor with this Warrant,
(ii) shall represent, as indicated on the face of such new Warrant, the right
to
purchase the Warrant Shares then underlying this Warrant (or in the case of
a
new Warrant being issued pursuant to Section 5.1
or
Section 5.3,
the
Warrant Shares designated by the Holder which, when added to the number of
shares of Common Stock underlying the other new Warrants issued in connection
with such issuance, does not exceed the number of Warrant Shares then underlying
this Warrant), (iii) shall have an issuance date, as indicated on the face
of
such new Warrant which is the same as the Issuance Date, and (iv) shall have
the
same rights and conditions as this Warrant.
6. NOTICES
Whenever
notice is required to be given under this Warrant, unless otherwise provided
herein, such notice shall be given in accordance with Section 10.6 of the
Subscription Agreement. The Company shall provide the Holder with prompt written
notice of all actions taken pursuant to this Warrant, including in reasonable
detail a description of such action and the reason therefore. Without limiting
the generality of the foregoing, the Company will give written notice to the
Holder (i) immediately upon any adjustment of the Exercise Price, setting forth
in reasonable detail, and certifying, the calculation of such adjustment and
(ii) at least fifteen days prior to the date on which the Company closes its
books or takes a record (A) with respect to any dividend or distribution upon
the shares of Common Stock, (B) with respect to any grants, issuances or sales
of any Options, Convertible Securities or rights to purchase stock, warrants,
securities or other property to holders of shares of Common Stock.
7. AMENDMENT
AND WAIVER
Except
as
otherwise provided herein, the provisions of this Warrant may be amended and
the
Company may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if the Company has obtained the written
consent of the Holder.
8. GOVERNING
LAW
This
Agreement shall be governed by, and construed in accordance with, the internal
laws of the State of Israel without regard to the choice of law principles
thereof.
9. CONSTRUCTION;
HEADINGS
This
Warrant shall be deemed to be jointly drafted by the Company and all the Holder
and shall not be construed against any person as the drafter hereof. The
headings of this Warrant are for convenience of reference and shall not form
part of, or affect the interpretation of, this Warrant.
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10. TRANSFER
This
Warrant may be offered for sale, sold, transferred or assigned without the
consent of the Company.
IN
WITNESS WHEREOF,
the
Company has caused this Warrant to Purchase Common Stock to be duly executed
as
of the Issuance Date set out above.
| BRAINSTORM CELL THERAPEUTICS, INC. | ||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
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EXHIBIT
A
EXERCISE
NOTICE
TO
BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
WARRANT
TO PURCHASE COMMON STOCK
BRAINSTORM
CELL THERAPEUTICS, INC.
The
undersigned holder hereby exercises the right to purchase _________________
of
the shares of Common Stock (“Warrant
Shares”)
of
BRAINSTORM CELL THERAPEUTICS, INC., a Delaware corporation (“Company”),
evidenced by the attached Warrant to Purchase Common Stock (“Warrant”).
Capitalized terms used herein and not otherwise defined shall have the
respective meanings set forth in the Warrant.
|
1.
|
Form
of Exercise Price.
The Holder intends that payment of the Exercise Price shall be made
as:
|
__________ a
“Cash
Exercise” with respect to _________________ Warrant Shares; and/or
__________ a
“Cashless Exercise” with respect to _______________ Warrant Shares.
| 2. |
Payment
of Exercise Price.
In the event that the holder has elected a Cash Exercise with respect
to
some or all of the Warrant Shares to be issued pursuant hereto, the
holder
shall pay the Aggregate Exercise Price in the sum of $___________________
to the Company in accordance with the terms of the
Warrant.
|
| 3. |
Delivery
of Warrant Shares.
The Company shall deliver to the holder __________ Warrant Shares
in
accordance with the terms of the
Warrant.
|
Date:
_______________ __, ______
Name
of
Registered Holder
| By: | ||||
| Name: | ||||
| Title: |
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ACKNOWLEDGMENT
The
Company hereby acknowledges this Exercise Notice and hereby directs [Insert
Name
of Transfer Agent] to issue the above indicated number of shares of Common
Stock
in accordance with the Transfer Agent Instructions dated _______________ from
the Company and acknowledged and agreed to by [Insert Name of Transfer
Agent].
BRAINSTORM
CELL THERAPEUTICS, INC.
| By: | ||||
| Name: | ||||
| Title: |
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