BIOCANCELLTHERAPEUTICS INC. WARRANT To purchase Shares of Common Stock (subject to adjustment) of BIOCANCELL THERAPEUTICS INC.(the Company) at a per share price and subject to the terms detailed below VOID AFTER 17:00 p.m. Eastern Standard Time on the last day of the Warrant Period (as defined below)

 

1.1.

Cash Exercise of Warrant.  This Warrant may be exercised from time to time or at any time during the Warrant Period by presentation and surrender thereof to the Company at its principal office or at such other office or agency as it may designate from time to time, accompanied by:

 

1.1.1.

A duly executed notice of exercise, in the form attached hereto as Exhibit A (the “Exercise Notice”); and

 

1.1.2.

Payment to the Company, for the account of the Company, of the aggregate Exercise Price for the number of Warrant Shares specified in the applicable Exercise Notice, payable in immediately available funds by wire transfer to the Company's bank account or by banker’s check or by any other means of payment agreed upon between the Company and the Holder.

 

1.2.

Partial Exercise, Etc.  If this Warrant should be exercised in part only, the Company shall, upon surrender of this Warrant for cancellation, execute and deliver a new Warrant evidencing the rights of the Holder to purchase the balance of the Warrant Shares purchasable hereunder.

 

1.3.

Issuance of Warrant Shares Upon Cash Exercise.  Upon presentation and surrender of this Warrant accompanied by a duly executed Exercise Notice and the payment of the applicable aggregate Exercise Price pursuant to Section 1.1 above, the Company shall promptly (i) issue to the Holder the Warrant Shares to which the Holder is entitled; and (ii) deliver to the Holder the share certificate(s) evidencing such Warrant Shares. Upon receipt by the Company of this Warrant, the applicable Exercise Notice and the applicable aggregate Exercise Price, the Holder shall be deemed to be the holder of record of the Warrant Shares issuable upon such exercise, notwithstanding that the stock transfer books of the Company shall then be closed or that certificates representing such stock shall not then be actually delivered to the Holder.

 

1.4.

Fractional Shares.  No fractions of shares shall be issued in connection with the exercise of this Warrant, and the number of shares issued shall be rounded up to the nearest whole number.

 

1.5.

Taxes.  The Holder acknowledges that the grant of the Warrant, the issue of the Warrant Shares and the execution and/or performance of this Warrant may have tax consequences to the Holder and that the Company is not able to ensure or represent to the Holder the nature and extent of such tax consequences. The Company shall pay all of the applicable taxes and other charges payable by the Company in connection with the issuance of the Warrant Shares and the preparation and delivery of share certificates pursuant to this Section 1 in the name of the Holder (such as documentary stamp or similar issue or transfer taxes in respect of the issue or delivery of Common Sharess on exercise of this Warrant), but shall not pay any taxes payable by the Holder by virtue of the holding, issuance, exercise or sale of this Warrant or the Warrant Shares by the Holder and the Holder shall indemnify the Company, without derogating from the Holder’s obligation to pay such amounts, for any and all charges or payments as aforesaid, which may be deducted at source or set-off from any amounts payable to the Holder (including, without limitation, dividends, consideration for the sale of stock or from any other source), at the Company’s absolute and sole discretion, subject to applicable law.

 

1.6.

Additional Documents.  The Holder will sign any and all documents required by law, the Company’s ByLaws and/or any agreement to which the Company is a party or by which it bound, to facilitate the issuance of stock upon exercise of this Warrant.

 

1.7.

Loss or Destruction of Warrant.  Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and (in the case of loss, theft or destruction) of reasonably expenses reimbursement and satisfactory indemnification, and upon surrender and cancellation of this Warrant, if mutilated, the Company will execute and deliver a new Warrant of like tenor and date.

 

2.

RESERVATION OF STOCK; preservation of rights of holder

 

2.1.

Reservation of Shares.  The Company hereby agrees that, at all times prior to the expiration or exercise of this Warrant, it will maintain and reserve, free from pre-emptive or similar rights, such number of authorized but unissued shares of Common Stock so that this Warrant may be exercised without additional authorization of Common Stock after giving effect to all other warrants, convertible securities and other rights to acquire shares of the Company.

 

2.2.

Preservation of Rights.  The Company will not, by amendment of its organizational documents or through reorganization, recapitalization, consolidation, merger, dissolution, transfer of assets, issue or sale of securities or any other voluntary act, avoid or seek to avoid the observance or performance of any of the covenants, stipulations, conditions or terms to be observed or performed hereunder, but will at all times in good faith assist in the carrying out of all the provisions hereof and in taking of all such actions and making all such adjustments as may be necessary or appropriate in order to fulfill the provisions hereof.

 

 

3.1.

Adjustments.  The number of Warrant Shares purchasable upon the exercise of this Warrant and the payment of the Exercise Price shall be subject to adjustment from time to time or upon exercise as provided in this Section 3.

 

3.2.

In the event that during the Warrant Period the Company shall distribute a stock dividend or shares pursuant to a reclassification of its share capital to all of the stockholders of the Company (i.e., bonus shares) or issue rights, option or warrants for its Common Stock at below market price to all of the Company's stockholders, then this Warrant shall represent the right to acquire, in addition to the number of Warrant Shares indicated in the caption of this Warrant, the amount of such bonus shares and/or to receive the stock dividends and/or the rights, option or warrants for its Common Stock, without payment of any additional consideration therefor (excluding payment required upon actual exercise of such rights, options or warrants), to which the Holder would have been entitled had this Warrant been exercised prior to the distribution of the stock dividends or the bonus shares.

 

3.3.

Consolidation and Division.  In the event that during the Warrant Period the Company consolidates its share capital into stock of greater par value, or subdivides them into stock of lesser par value, then the number of Warrant Shares to be allotted on exercise of this Warrant after such consolidation or subdivision shall be reduced or increased accordingly, as the case may be, such increase or decrease, as the case may be, to become effective immediately after the opening of business on the day following the day upon which such subdivision or combination becomes effective, and in each case the Exercise Price shall be adjusted appropriately such that the aggregate consideration hereunder to the Company shall not change.

 

3.4.

Capital Reorganization.  In the event that during the Warrant Period a reorganization of the share capital of the Company is effected (other than subdivision, combination or reclassification provided for elsewhere in this Section 3) and the shares of Common Stock are exchanged for other securities of the Company, then, as part of such reorganization, provision shall be made so that the Holder shall be entitled to purchase upon exercise of this Warrant such kind and number of shares or other securities of the Company to which the Holder would have been entitled had this Warrant been exercised prior to such reorganization, and such that the aggregate consideration to the Company hereunder shall not change.

 

3.5.

Dividends. If at any time the Company shall distribute a dividend in liquidation or partial liquidation or by way of return of capital, or a dividend regardless of whether or not payable out of earnings or surplus legally available for dividends, the Exercise Price shall be reduced by an amount equal to the Dollar equivalent of the per-share distribution on the record date fixed for the purpose of such distribution.

 

 

 

 

 

7.1.

Entire Agreement; Amendment.  This Warrant sets forth the entire understanding of the parties hereto with respect to the subject matter hereof and supersedes all existing agreements among them concerning such subject matter. All article and section headings herein are inserted for convenience only and shall not

 

modify or affect the construction or interpretation of any provision of this Warrant. No modification or amendment of this Warrant will be valid unless executed in writing by the Company and the Holder.

 

7.2.

Waiver.  No failure or delay on the part of any of the parties hereto in exercising any right, power or privilege hereunder and/or under any applicable laws or the exercise of such right or power in a manner inconsistent with the provisions of this Warrant or applicable law shall operate as a waiver thereof. Any waiver must be evidenced in writing signed by the party against whom the waiver is sought to be enforced.

 

7.3.

Successors and Assigns; Assignment.  This Warrant shall inure to the benefit of, be binding upon, and be enforceable by the Holder and its respective successors, assigns, and administrators. Either party may freely assign or transfer the rights granted pursuant to this Warrant. If, as a result of such assignment by the Purchaser, the Company is required under applicable law to file any registration statement or prospectus with the US Securities and Exchange Commission or any stock exchange or other similar institution in any jurisdiction, the party that seeks such assignment will cover the Company’s expenses for such filing.

 

7.4.

Governing Law. This Warrant shall be governed by and construed under the laws of the State of Israel, without regard for the conflicts of laws provisions thereof. Any dispute arising under in connection with this Note shall be settled exclusively before the competent courts of the city of Tel-Aviv-Jaffa.

 

7.5.

Notices.  Any notice required or permitted to be given to a party pursuant to the provisions of this Warrant will be in writing and will be effective and deemed delivered to such party on the earliest of the following:  (a) all notices and other communications delivered in person or by courier service shall be deemed to have been delivered as of actual delivery thereof; or, (b) those given by facsimile transmission shall be deemed delivered on the following business day after transmission, with confirmed transmission thereof; or (c) all notices and other communications sent by registered mail (or air mail if the posting is international) shall be deemed given seven (7) days after posting.

 

7.6.

Severability.  If any provision of this Warrant is held to be unenforceable, this Warrant shall be considered divisible and such provision shall be deemed inoperative to the extent it is deemed unenforceable, and in all other respects this Warrant shall remain in full force and effect; provided, however, that if any such provision may be made enforceable by limitation thereof, then such provision shall be deemed to be so limited and shall be enforceable to the maximum extent permitted by applicable law.

 

7.7.

Counterparts.  This Warrant may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument.  Facsimile signatures of a party shall be binding as evidence of such party’s agreement hereto and acceptance hereof.

Dated:  March __, 2010

 

 

 

By: ______________________________

       Name:  Uri Danon

       Title:    Chief Executive Officer