Unassociated Document


     

    EXHIBIT 10.16

    
 

    SUBSCRIPTION
AND REGISTRATION RIGHTS AGREEMENT

     

    This
Subscription and Registration Rights Agreement (this “Agreement”), dated as
of 12 March, 2008, is entered into by and between BioCancell Therapeutics Inc.,
a Delaware corporation (the “Company”), and Clal
Biotechnology Industries Ltd. (the “Purchaser”).

     

    The
parties hereto agree as follows:

     

    1. Purchase and Sale. In
consideration of and upon the basis of the representations, warranties and
agreements and subject to the terms and conditions set forth in this
Agreement:

     

    (a) The
Purchaser agrees to purchase from the Company, and the Company shall issue and
allot to the Purchaser, on the Closing Date (as defined below), in accordance
with Section 2 below, an aggregate number of 650,000 shares (the “Shares”) of the
Company’s common stock, par value $0.01 per share (the “Common Stock”), at a
price per share of Common Stock of NIS 3.52, for an aggregate purchase price of
NIS 2,288,000 (the “Purchase Price”, and
such purchase, the “Share Purchase”).

     

    (b) Upon
the terms and subject to the conditions set forth in this Agreement, the closing
of the sale and purchase of the Shares contemplated hereby (the “Closing”) shall
take place at the offices of Yigal Arnon & Co., 1 Azrieli Center, Tel Aviv,
at 10:00 a.m. on the date that is one business day after the satisfaction of all
conditions set forth in Section 1(c) hereof, or such other place or date as may
be agreed to by the Company and Purchaser. The date upon which the Closing shall
occur is herein referred to as the “Closing Date.”

     

    (c) The
obligation of the parties hereto to consummate the transactions contemplated by
this Agreement is subject to the satisfaction at or prior to the Closing Date of
the following conditions:

     

    (i)
Approval of the Share Purchase by the shareholders of the Company at the general
meeting of such shareholders under the terms of Section 328(b)(1) and Section
274 of the Israeli Companies Law;

     

    (ii)
Approval by the Tel Aviv Stock Exchange (“TASE”) of the registration of the
Shares under the rules of such exchange; and

     

    (iii)
Approval of the Share Purchase by the Israeli Anti-trust Authority.

     

    2. Closing. The Closing
shall take place on the Closing Date in the manner set forth below. The
deliveries specified in this Section 2 shall be deemed to occur simultaneously
as part of a single transaction, and no delivery shall be deemed to have been
made until all such deliveries have been made.

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

     

    (a) Purchase Price; Purchaser
Deliverables. The Purchaser shall (i) pay the Purchase Price by wire
transfer of immediately available funds to the account of the Company set forth
on Exhibit A
hereto, (ii) deliver true and correct copies of resolutions of the Board of
Directors of the Purchaser authorizing and agreeing to the purchase of the
Shares pursuant and subject to the terms set forth in this Agreement and (iii)
delivery to the Company such evidence of the satisfaction of the condition set
forth in Section l(c)(iii) hereto (Anti-trust approval).

     

    (b) Common Stock
Certificates; Company Deliverables. The Company shall deliver to the
Purchaser (i) one or more validly issued share certificates of the Common Stock
of the Company representing, in aggregate, the Shares in the name of the
Purchaser in consideration for the Purchase Price paid to the Company, (ii) true
and correct copies of resolutions of the Board of Directors of the Company, the
Audit Committee of the Company and of the Shareholders of the Company
authorizing the issuance and sale of the Shares to the Purchaser in exchange for
the Purchase Price as set forth in this Agreement, and (iii) an opinion of
counsel as to the satisfaction of the condition set forth in Section l(c)(i) and
l(c)(ii) hereto (Shareholder approval and TASE approval) and the application of
Section 328 of the Israeli Companies Law on the Company.

     

    (c) Purchase Agreement.
Each of Company and the Purchaser shall deliver to such other party duly
executed copies of this Agreement.

     

    3. Representations and
Warranties of the Company. The Company hereby represents and warrants to
the Purchaser as follows:

     

    (a) Organization. The
Company has been duly incorporated, is validly existing and in good standing
under the laws of Delaware.

     

    (b) Corporate Authorization;
Execution; Validity of Agreement. The execution, delivery and performance
of this Agreement (including the authorization, sale, issuance and delivery of
the Shares) have been duly authorized by the Company. This Agreement has been
duly executed and delivered by the Company and, when duly authorized, executed
and delivered by the Purchaser, will be a valid and binding agreement
enforceable against the Company in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and
other similar laws of general applicability relating to or affecting creditors’
rights generally and to general principles of equity.

     

    (c) Corporate Authority.
The Company has full corporate power and authority necessary to (i) perform its
obligations hereunder and (ii) carry on its business as presently proposed to be
conducted.

     

    (d) Validity of Common
Stock. When issued to the Purchaser against payment therefore, the Shares
will have been duly and validly issued, fully paid and non-assessable; will be
free and clear of any security interests, liens, claims, encumbrances or other
adverse interests, other than those restrictions contemplated by the federal and
state securities laws of the United States and the securities laws of Israel;
and will not have been issued or sold in violation of any preemptive or other
similar rights of the holders of any securities of the Company.

    


    
      
        
           


        

        
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    4. Representations and
Warranties of the Purchaser. The Purchaser hereby represents and warrants
to the Company as follows:

     

    (a) Corporate Authorization;
Validity of Agreement. The execution, delivery and performance of this
Agreement by the Purchaser have been duly authorized by all requisite corporate
action and no further corporate consent or authorization of the Purchaser, its
trustees or shareholders is required. This Agreement has been duly executed and
delivered by the Purchaser and, when duly authorized, executed and delivered by
the Company, will be a valid and binding agreement enforceable against the
Purchaser in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance and other similar laws of
general applicability relating to or affecting creditors’ rights generally and
to general principles of equity.

     

    (b) Accredited Investor
Status. The Purchaser is an “accredited investor” as that term is defined
in Rule 501(a)(3) of Regulation D promulgated under the U.S. Securities Act of
1933, as amended (the “Securities
Act”).

     

    (c) Reliance on
Exemptions. The Purchaser understands that the Shares are being offered
and sold to in reliance on specific exemptions from the registration
requirements of the United States federal and state securities laws and that the
Company is relying in part upon the truth and accuracy of the Purchaser’s
representations and warranties set forth herein in order to determine the
availability of such exemptions and the eligibility of the Purchaser to acquire
the Shares.

     

    (d) Investment Purpose.
The Purchaser is purchasing the Shares for its own account for investment only
and not with a view to, or for resale in connection with, the public sale or
distribution thereof, except pursuant to sales registered under the Securities
Act (such as those contemplated by Section 6 hereof) or an exemption
therefrom.

     

    (e) Knowledge and
Experience. The Purchaser has such knowledge and experience in financial
and business matters as to be capable of evaluating the merits and risks of its
investment in the Company, has the ability to bear the economic risks of its
investment for an indefinite period of time, can afford the complete loss of its
investment and recognizes that an investment in the Shares involves substantial
risk.


     

    (f) Transfer or Resale.
The Purchaser understands and acknowledges that (i) the Shares are sold to him
“AS-IS”; (ii) the Shares are restricted for resale through The TASE in
accordance to the Israeli Securities Law, 5728-1968 for the periods and amounts
specified thereto; (iii) until the Shares are registered under the Securities
Act as set forth in Section 6 and qualified under any state or foreign
securities laws, the Shares may not be offered for sale, sold, assigned or
transferred except through an exemption from the registration and prospectus
delivery requirements of the Securities Act.

    


    
      
        
           


        

        
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    (g) Current Holdings. As
of the date hereof and immediately prior to the sale and purchase of the Shares,
the Purchaser holds of record and owns beneficially 2,863,165 shares of Common
Stock (the “Existing
Clal Stock”).

     

    5. Legend. Until the
sale of Shares under an effective registration statement under the Securities
Act as described in Section 6, the Purchaser understands that the certificates
or other instruments representing the Shares shall bear a restrictive legend
composed of exactly the following words capitalized below:

     

    “THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR ANY STATE SECURITIES
LAWS. SUCH SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED, ASSIGNED,
PLEDGED, HYPOTHECATED OR OTHERWISE DISTRIBUTED IN THE ABSENCE OF REGISTRATION
UNDER THE ACT OR RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL SATISFACTORY TO
THE COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE
ACT.

     

    Additional
language may be added at any time to the legend to the extent required to be
placed thereon by applicable securities laws, contract or
otherwise.

     

    6. Registration.

     

    6.1 Filing of Registration
Statement. Subject to Section 6.4 hereof, the Company shall use its best
efforts to prepare and file a registration statement which shall include the
Shares within nine (9) months from the Closing Date, on a registration statement
on Form S-1 or such other applicable form of registration available under the
Securities Act (the “Registration
Statement”). Following such filing, the Company shall use its best
efforts to cause the Registration Statement to be declared effective under
the Securities Act as promptly as practicable after the filing thereof, subject
to the resolution of any comments received from the staff of the United States
Securities and Exchange Commission (the “SEC”).

     

    6.2 Demand
Registration.

     

    (a) Form S-l Demand. If
at any time after six (6) months following the end of the effectiveness of the
Registration Statement, the Purchaser requests in writing that the Company file
a registration statement on Form S-l (or such other applicable form for
registration of such Registrable Securities) for the registration under the
Securities Act of Registrable Securities in an amount equal to at least 25% of
the Shares, then the Company shall as soon as practicable, and in any event
within sixty (60) days after the date of receipt of such request, file a Form
S-1 registration statement (or such other applicable form) under the Securities
Act covering all Registrable Securities that the Purchaser requested to be
registered as specified in such notice, and including any other securities of
the Company that the Company deems proper to include in such registration, in
each case subject to the limitations in this Section 6.2 and 6.4. If the Company
shall become listed on the NASDAQ national securities exchange (or other
“national securities exchange” as defined by the SEC), the Purchaser shall have
the right to make the foregoing request under this Section 6.2(a) to register
Registrable Securities on a registration statement on (a shelf registration
statement on) Form S-3 instead of under Form S-l (or such other applicable form)
at any time that the Company is eligible to use a Form S-3 under applicable
United State securities law.


    


    
      
        
           


        

        
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    (b) The
Company shall be permitted to register other Common Stock in any registration
contemplated by 6.2(a). The Company shall not be obligated to effect, or to take
any action to effect, any registration pursuant to this Section 6.2 (i) during
the period that is sixty (60) days before the Company’s good faith estimate of
the date of filing of, and ending on date that is one hundred eighty (180) days
after the effective date of, a Company-initiated registration, provided, that the Company is
actively employing in good faith all reasonable efforts to cause such
registration statement to become effective. The Company shall not be required to
effect more than two registrations pursuant to this Section 6.2. The Company
shall not be required to effect any registration statement demanded by Purchaser
under this Section 6.2 if any registration statement demanded by Purchaser was
effective within the twelve months prior to the Company’s receipt of the demand
for registration under this Section 6.2, unless the Purchaser shall bear all
cost and expenses of such registration statement.

     

    6.3 Piggyback
Registration. If the Company at any time proposes to register any of its
securities (other than (i) in a demand registration under Section 6.2, (ii) in a
registration relating solely to employee benefit plans; (iii) in a registration
relating solely to a Rule 145 transaction (such as a registered stock merger
transaction); or (iv) in a registration relating to a corporate reorganization
or other transaction on Form S-4, or in each case a foreign equivalent thereof)
under the Securities Act, it shall give notice to the Purchaser of such
intention. Upon the written request of the Purchaser given to the Company within
twenty (20) days after receipt of any such notice, the Company shall include in
such registration all of the Registrable Securities requested to be registered
in such request. The Company will cause the managing underwriter or
underwriters, if any, of any proposed registration of securities of the Company
through underwriters in such offering to permit the Purchaser, if holding
Registrable Securities requested to be included in such registration in the
Shareholder’s notice, to include in the registration for such offering all such
requested Registrable Securities on the same terms and conditions as any
securities of the Company included therein; provided, that the Purchaser shall
have given customary representations and warranties and indemnifications in
connection therewith. If such underwriter advises the Company in writing that
marketing factors require a limitation of the number of shares to be
underwritten, the Purchaser’s Registrable Securities shall be subject to
customary underwriter cutbacks applicable to all holders of securities subject
to registration in such offering; provided, that such cutbacks shall apply to
the Purchaser and other participants in such offering on a pro rata
basis.

    


    
      
        
           


        

        
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    6.4 Blackout Periods.
Notwithstanding the foregoing obligations in Section 6.1, 6.2 and 6.3, if the
Company furnishes to the Purchaser a certificate signed by the Company’s chief
executive officer stating that in the good faith judgment of the Company’s Board
of Directors it would be materially detrimental to the Company to maintain the
effectiveness of such Registration Statement (or, if no Registration Statement
has yet been filed or become effective, to file such a Registration Statement or
cause it to become effective) because such action would (i) require the public
disclosure of material non-public information concerning any transaction or
negotiations involving the Company or any of its affiliates that would interfere
with such transaction or negotiations, (ii) otherwise require premature
disclosure of information, in either case that would be significantly
disadvantageous or (iii) render the Company unable to comply with requirements
under the Securities Act, the Securities and Exchange Act of 1934 and/or the
securities laws of Israel or the Tel Aviv Stock Exchange (a “Disadvantageous
Condition”), then Company shall have the right to defer taking action
with respect to any filing or cause such Registration Statement or other filing
to become unavailable for use, in each case for such period as a Disadvantageous
Condition shall exist; provided, that the Company
shall not exercise such rights for a period of more than 60 consecutive days
from the date of delivery of such notice to the Purchaser, and in any event when
aggregated with any other Disadvantageous Condition not more than an aggregate
of 100 days in any 365-day period. If the Company exercises such right, it will
provide written notice thereof to the Purchaser, and upon the receipt of any
such notice, the Purchaser shall forthwith discontinue use of the prospectus
contained in such registration statement as provided in this Section 6 and
otherwise act as instructed in such notice. If any Disadvantageous Condition
shall cease to exist, the Company shall promptly notify the Purchaser to such
effect.

     

    6.5 Definitions. As used
in this Agreement, “Registrable
Securities” shall mean the Shares, and in addition any part of the
Existing Clal Stock to be registered for sale pursuant to the Purchaser written
request, and shall also include any Common Stock issued with respect to any
Registrable Securities, including by way of a stock split or stock dividend, in
connection with a recapitalization or merger, consolidation or other
reorganization, or pursuant to a distribution; provided that any such
Registrable Securities shall cease to be considered Registrable Securities if
and when (i) a registration statement with respect to the disposition of such
securities shall have become effective under the Securities Act and such
securities shall have been disposed of pursuant to such effective registration
statement, (ii) such securities shall have been sold under circumstances in
which all of the applicable conditions of Rule 144 (or any similar provisions
then in force) are met, (iii) such securities may be sold pursuant to Rule
144(k) or otherwise in the public market without being registered pursuant to
the Securities Act, or (iv) such securities shall have ceased to be outstanding,
provided, further, that
any such securities that have ceased to be Registrable Securities pursuant any
of the foregoing clauses cannot thereafter become Registrable Securities and
securities that are issued or distributed following the date of such disposition
or sale by way of dividends or otherwise in respect of such securities that has
ceased to be Registrable Securities shall not be Registrable Securities.
“Damages” shall mean any losses, damages,
claims, liabilities, joint or several, costs and expenses (including any amounts
paid in any settlement effected with the Company’s consent) to which a party
hereto or its underwriter or controlling person may become subject under the
Securities Act, the Securities Exchange Act of 1934, as amended, or other United
States federal or state law, insofar as such losses, damages, claims,
liabilities (or actions or proceedings in respect thereof), costs or expenses
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in the registration statement or
included in the prospectus, as amended or supplemented, or (ii) the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
in which they are made, not misleading.

    


    
      
        
           


        

        
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    6.6 Purchaser to Furnish
Information. The Company may require the Purchaser to furnish to the
Company a certified statement as to the number of shares of Common Stock that it
beneficially owns and, if required by the SEC, the person thereof that has
voting and dispositive control over such Common Stock. It shall be a condition
precedent of the Company to take any action pursuant to this Section 6 with
respect to the Registrable Securities of the Purchaser, that the Purchaser shall
furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities
as is reasonably required to effect the registration of the Purchaser’s
Registrable Securities.

     

    6.7 Registration
Procedures. In connection with the Company’s registration obligations
hereunder, the Company shall:

     

    (a)
Prepare and file with the SEC a registration statement with respect to such
Registrable Securities and use all commercially reasonable efforts to cause such
registration statement to become effective, and keep such registration statement
(or in the case of Section 6.1, the Registration Statement) effective for up to
one hundred and twenty (120) days after the applicable effective date or, if
earlier, until the Purchaser has completed the distribution related
thereto.

     

    (b) Not
less than five (5) business days prior to the filing of the Registration
Statement or any related prospectus or any amendment or supplement thereto, the
Company shall furnish to the Purchaser copies of all such documents proposed to
be filed. The Company shall not file in the Registration Statement or any such
prospectus or any amendments or supplements thereto information to which Seller
shall reasonably object in good faith, provided that such objection
by the Purchaser is based solely on information provided in writing to the
Company by the Purchaser relating to information contained therein regarding the
Purchaser, and provided,
the Company is notified of such objection in writing no later than three
(3) business days after the Purchaser has been so furnished copies of such
documents. The Purchaser shall within five (5) business days after receipt of
the request therefor by the Company provide revised information which the
Company reasonably requests for purposes of compliance with the rules and
regulations governing the Registration Statement and the exhibits and documents
in connection therewith.

     

    (c)
Prepare and file with the SEC such amendments and supplements to such
Registration Statement, and the prospectus used in connection with such
registration statement, as may be necessary to comply with the Securities Act in
order to enable the disposition of all securities covered by such Registration
Statement.

     

    (d)
Furnish to the Purchaser such number of copies of a prospectus, including a
preliminary prospectus, as required by the Securities Act, and such other
documents as the Purchaser may reasonably request in order to facility its
disposition of the Registrable Securities.

     

    (e) Use
its commercially reasonable efforts to register and qualify the securities
covered by such Registration Statement under such blue-sky laws in the United
States as shall be necessary for compliance by the Purchaser with such laws;
provided, that the Company shall not be required to qualify to do business or to file
a general consent to service of process in any such states or jurisdictions,
unless the Company is already subject to service in such jurisdiction and except
as may be required by the Securities Act.

    


    
      
        
           


        

        
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    (f)
Notify the Purchaser, promptly after the Company receives notice thereof, of the
time when a Registration Statement has been declared effective by the SEC, when
a supplement to any prospectus forming a party of such Registration Statement
has been filed, and when there is any request by the SEC that the Company amend
or supplement such Registration Statement or prospectus.

     

    (g)
Provide a transfer agent and registrar for all Registrable Securities registered
pursuant to this Agreement and provide a CUSIP number for all such Registrable
Securities, in each case not later than the effective date of such
registration.

     

    7. Indemnification relating to
Registration. In the event of any registered offering of Registrable
Securities pursuant to Section 6 of this Agreement:

     

    (a) The
Company will indemnify and hold harmless, to the fullest extent permitted by
law, the Purchaser, any underwriter for the Purchaser, and each person, if any,
who controls the Purchaser, from and against any and all Damages, and the
Company will reimburse the Purchaser, such underwriter and each such controlling
person of the Purchaser, promptly upon demand, for any reasonable legal or any
other expenses reasonably incurred by them in connection with investigating or
defending against such loss, claim, Damages, liability, action or proceeding;
provided, however, that the Company will not be liable
in any such case to the extent that any such loss, damage, liability, cost or
expense arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission so made in conformity with information
furnished in writing by or on behalf of the Purchaser, such underwriter or such
controlling persons expressly for use in connection with such registration;
provided, that this
indemnity shall not be deemed to relieve any underwriter of any of its due
diligence obligations; provided, further, that the
indemnity agreement contained in this subsection 7(a) shall not apply to amounts
paid in settlement of any such claim, loss, damage, liability or action if such
settlement is effected without the consent of the Company, which consent shall
not be unreasonably withheld.

     

    (b) The
Purchaser will indemnify and hold harmless, to the fullest extent permitted by
law, the Company, any underwriter for the Company, and each person, if any, who
controls the Company, from and against any and all Damages, and the Purchaser
will reimburse the Company, any underwriter and each such controlling person of
the Company, promptly upon demand, for any reasonable legal or other expenses
incurred by them in connection with investigating, preparing to defend or
defending against such loss, claim, Damages, liability, action or proceeding; in
each case to the extent, but only to the extent, that such loss, claim, Damages,
liability, action or proceeding arise out or or are based upon actions or
omissions made in reliance upon and in conformity with written information
furnished by or on behalf of the Purchaser expressly for use in connection with
such registration; provided, that this indemnity
shall not be deemed to relieve any underwriter of any of its due diligence
obligations; provided,
further, that the indemnity
agreement contained in this subsection 7(b) shall not apply to amounts paid in
settlement of any such claim, loss, damage, liability or action if such
settlement is effected without the consent of the Purchaser, as the case may be,
which consent shall not be unreasonably withheld. In no event shall the
liability of a Purchaser exceed the gross proceeds from the offering received by
such purchaser, except in the case of fraud or wilfull misconduct by the
Purchaser.

    


    
      
        
           


        

        
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    (c) The
foregoing indemnity agreement in Section 7(a) and (b) is subject to the
condition that, insofar as it relates to any such untrue statement (or alleged
untrue statement) or omission (or alleged omission) made in the preliminary
prospectus but eliminated or remedied in the amended prospectus at the time the
registration statement becomes effective or in the final prospectus, such
indemnity agreement shall not inure to the benefit of an indemnified party
hereunder if a copy of the final prospectus was not furnished to the person or
entity asserting the loss, liability, claim or damage at or prior to the time
such furnishing is required by the Securities Act.

     

    (d)
Promptly after receipt by an indemnified party pursuant to the provisions of
Sections 7(a) or 7(b) of notice of the commencement of any action involving the
subject matter of the foregoing indemnity provisions, such indemnified party
will, if a claim thereof is to be made against the indemnifying party pursuant
to the provisions of said 7(a) or 7(b), promptly notify the indemnifying party
of the commencement thereof; but the omission to notify the indemnifying party
will not relieve it from any liability which it may have to any indemnified
party otherwise than hereunder. In case such action is brought against any
indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party shall have the right to participate in, and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof with counsel reasonably satisfactory to
such indemnified party; provided, however, that if
the defendants in any action include both the indemnified party and the
indemnifying party and there is a conflict of interests which would prevent
counsel for the indemnifying party from also representing the indemnified party,
the indemnified party or parties shall have the right to select one separate
counsel to participate in the defense of such action on behalf of such
indemnified party or parties. After notice from the indemnifying parry to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party pursuant to the
provisions of said Sections 7(a) or 7(b) for any legal or other expense
subsequently incurred by such indemnified party in connection with the defense
thereof, unless (i) the indemnified party shall have employed counsel in
accordance with the provision of the preceding sentence, (ii) the indemnifying
party shall not have employed counsel reasonably satisfactory to the indemnified
party to represent the indemnified party within a reasonable time after the
notice of the commencement of the action and within 15 days after written notice
of the indemnified party’s intention to employ separate counsel pursuant to the
previous sentence, or (iii) the indemnifying party has authorized the employment
of counsel for the indemnified party at the expense of the indemnifying party.
No indemnifying party will consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such indemnified party of a release from all
liability in respect to such claim or litigation.

     

    (e) If
recovery is not available under the foregoing indemnification provisions, for
any reason other than as specified therein, the parties entitled to
indemnification by the terms thereof shall be entitled to contribution to
liabilities and expenses as more fully set forth in an underwriting agreement to
be executed in connection with such registration. In determining the amount of
contribution to which the respective parties are entitled, there shall be
considered the parties’ relative knowledge and access to information concerning
the matter with respect to which the claim was
asserted, the opportunity to correct and prevent any statement or omission, and
any other equitable considerations appropriate under the
circumstances.

    


    
      
        
           


        

        
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    8. Fees and Expenses.
Each of the parties hereto agrees to pay all of the fees and expenses incurred
by such party in connection with this Agreement, including, but not limited to
the fees, expenses and disbursements of
such party, its counsel and other advisors; provided, however, that all
expenses (other than Selling Shareholder Expenses which shall be paid by the
Purchaser) incurred in connection with the registrations, filings or
qualifications pursuant to Section 6 shall be borne by the Company. “Selling Shareholder
Expenses” shall mean all underwriting discounts, selling commissions,
brokerage fees and stock transfer taxes applicable to the sale of the
Registrable Securities, and fees and disbursements of counsel and/or advisors
for the Purchaser.

     

    9. Survival of Representations,
Warranties, etc. The respective representations, warranties, and
agreements made herein by or on behalf of the parties hereto shall remain in
full force and effect, regardless of any investigation made by or on behalf of
the other party to this Agreement or any officer, director or employee of, or
person controlling or under common control with, such party and will survive
delivery of and payment for the Shares issuable hereunder; provided, that any such
representations, warranties or agreements that survive for a time expressly
provided herein shall only survive for such period of time.

     

    10. Information
Rights.


     

    10.1 The
Company recognizes that the Purchaser is a public company with financial
reporting requirements and also part of the IDB Group (being, for the purposes
of this agreement, IDB Holding Corporation Ltd., IDB Development Corporation
Ltd, Clal Industries and Investments Ltd). The Company will cooperate with the
Purchaser to enable the timely reporting of its financial statements in order to
comply the publishing of the financial statements required by the IDB’s
procedures and the time schedule as set forth by the Purchaser and the IDB Group
subject to the receipt by the Company of three months’ notice prior to the date
on which the Company shall deliver the financial reports to the
Purchaser.

     

    10.2 If
Purchaser notifies the Company in writing that applicable securities laws or
regulations require the Purchaser to include certain information about the
Company in the Purchaser’s publicly filed documents, the Company shall, subject
to applicable law, provide such information to the Purchaser that is reasonably
needed by the Purchaser in order to comply with any applicable law or regulation
requiring public disclosure of such information, and shall use best efforts to
provide such information within seven (7) days following the receipt of such
request.

     

    10.3 If
any request set forth in Section 10.2 hereof would include a request for any
non-public information about the Company, the Purchaser shall coordinate the
delivery of such information with the Company such that it is in compliance with
applicable law; provided,
that the Purchaser shall coordinate the form and the timing of such
publication, subject to any law or regulations, with the Company in a way which
will enable the Company to publish the non-public information prior to its
publication by the Purchaser. The parties hereto acknowledge and agree that all
information provided herein is subject to applicable law and may be subject to
the restrictions applicable to inside information (or material non-public
information) and the parties hereto agree to comply with applicable law
regarding use or disclosure of this information.

     

    10.4 The
agreements contained in this Section 10 shall survive only so long as the
Purchaser is required to include the Company’s financial statement on an equity
basis in the Purchaser’s consolidated financial statements under applicable law.
All financial statements of the Company shall be reviewed by a firm of
Independent Certified Public Accountants which is affiliated with one of the
“big four” U. S. accounting firms. If the Company shall become listed on the
NASDAQ national securities exchange, the Company shall provide, per the Purchaser’s
request, reconciliation of its publicly filed financial statements to
IFRS.

    


    
      
        
           


        

        
          10

          
            

          

        

        
           


        

      

    

     

    10.5 Any
of the above reports or any other consent or approvals of the auditors of the
Company which the Company is otherwise required to prepare or obtain for itself
pursuant to any applicable securities laws or stock exchange rules and
regulations shall be prepared at the Company’s expense. Notwithstanding anything
to the contrary contained in this Agreement, in the event that compliance with
any of the Purchaser’s request under this Section 10, shall cause the Company to
bear direct and reasonable costs and expenses that are in excess of the cost and
expense required to be borne by the Company in order to comply with its own
disclosure requirements according to applicable law, the Purchaser shall pay or
shall caused to be paid, subject to a prior written approval of the Purchaser
(which approval shall be necessary before the Company is obligated to fulfill
the Purchaser’s request), any and all costs or expenses of the Company relating
to compliance with the Purchaser request which, in aggregate with all other
requests of Purchaser, exceed 20,000 New Israeli Shekels during any fiscal year
of the Company.

     

    11. Notices. All notices,
consents, waivers or other communications required or permitted hereunder shall
be in writing and shall be mailed by registered or certified mail, return
receipt requested, postage prepaid or otherwise delivered by hand, messenger,
internationally recognized courier or facsimile transmission, addressed as set
forth below or at such other address as the party shall have furnished to the
other party in writing in accordance with this provision:

    


    
      
        	 
      	
                (a)

              	
                If
      sent to the Company to:

              
	 
      	 
      	 
      
	 
      	 
      	
                BioCancell
      Therapeutics, Inc.

              
	 
      	 
      	
                Beck
      Science Center

              
	 
      	 
      	
                8
      Hartom St

              
	 
      	 
      	
                Jerusalem
      97775 Israel

              
	 
      	 
      	
                Fax:
      +972-2-548-6550

              


      

    

    


    with a
copy (which shall not constitute notice) to:

    


    
      	 
      	 
      	
              Yigal
      Arnon & Co.

            
	 
      	 
      	
              1
      Azrieli Center

            
	 
      	 
      	
              Tel
      Aviv, Israel 67021

            
	 
      	 
      	
              Fax:
      +972-3-608-7714

            
	 
      	 
      	
              Attention:
      Gil Oren

            
	 
      	 
      	 
      
	 
      	
              (b)

            	
              If
      sent to a Purchaser to:

            
	 
      	 
      	 
      
	 
      	 
      	
              Clal
      Biotechnology Industries

            
	 
      	 
      	
              3
      Azrieli St, 45th
      Floor,

            
	 
      	 
      	
              Tel
      Aviv 67023 Israel

            
	 
      	 
      	
              Fax:
      +972-3-612-4545

            


    

    


    
      
        
           


        

        
          11

          
            

          

        

        
           


        

      

    

    


    Each such
notice or other communication shall for all purposes of this Agreement be
treated as effective or as having been given (1) if mailed, seven (7) business
days after mailing, (ii) if sent by hand or
by messenger,
upon delivery, and (iii) If sent via facsimile transmission, 24 hours
after electronic confirmation of receipt, except if such facsimile transmission
was transmitted and received on a non-business day, on the first business day
following transmission and electronic confirmation of receipt.


     

    12 Miscellaneous

     

    (a) THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
ISRAEL WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THEREOF.

     

    (b) This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto, and their respective successors and permitted assigns, and no other
person will have any rights or obligation hereunder. Neither the Company nor the
Purchaser may assign (whether by operation of law or otherwise) this
Agreement.

     

    (c) This
Agreement constitutes the full and entire understanding and agreement between
the parties hereto with regard to the subject matter hereof and supersedes all
prior oral or written (and all contemporaneous oral) agreements or
understandings with respect to the subject matter hereof.

     

    (d) No
delay or omission to exercise any right power or remedy accruing to any party
hereto upon any breach or default of the other party hereto under this Agreement
shall impair any such right, power or remedy or such party, nor shall it be
construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereunder occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default therefore or thereafter occurring. Any waiver, permit, consent
or approval of any kind or character on the part of any party hereto of any
breach or default under this agreement, or any waiver on the part of any party
hereto of any provisions or conditions of this Agreement, must be in writing and
shall be effective only to the extent specifically set forth in such writing.
All remedies, either under this Agreement, or by law or otherwise afforded to
any party, shall be cumulative and not alternative.

     

    (e) This
Agreement may be executed in any number of counterparts, each of which may be
executed by less than all of the parties hereto, each of which shall be
enforceable against the parties actually executing such counterparts, and all of
which together shall constitute one instrument.

     

    (f) If
any provision of this Agreement, or its application to any party hereto, shall
be, or be found by an
authority of competent jurisdiction to be, invalid or unenforceable in whole or
in part, such provision shall be constructed and applied so as to give effect,
to the greatest extent possible, the original intent of the parties hereto. The
invalidity or unenforceability of any of the provisions of this Agreement shall
not affect the other validity herein, all of which shall remain in full force
and effect.

    


    
      
        
           


        

        
          12

          
            

          

        

        
           


        

      

    

    


    (g) This
Agreement may be amended, modified or supplemented only by a written instrument
signed by each of the Purchaser and the Company.


     

    [Signature
Page follows]

    


    
      
        
           


        

        
          13

          
            

          

        

        
           


        

      

    

    


    IN
WITNESS WHEREOF, the parties hereto have duly executed and delivered this
Subscription and Registration Rights Agreement as of the date first written
above.

    


    
      
        
          	 
      	
                  BIOCANCELL
      THERAPEUTICS INC.

                
	 
      	 
      
	 
      	
                  By:

                	
                   
      /s/ Avi
      Barak                            
      /s/ A. Hochberg

                
	 
      	 
      	
                  Name:    
      Avi
      Barak                           A.
      Hochberg

                
	 
      	 
      	
                  Title:

                
	 
      	 
      
	 
      	
                  CLAL
      BIOTECHNOLOGY INDUSTRIES LTD.

                
	 
      	 
      
	 
      	
                  By:

                	
                  /s/ Ruben Krupik

                
	 
      	 
      	
                  Name:
      Ruben Krupik

                
	 
      	 
      	
                  Title:
      CEO

                


        

      

    

     

    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    EXHIBIT
A

    Company
Wire Instructions

    


    Bank
Leumi LeIsrael Ltd

     

    Branch:
Har Hotzvim - #968

     

    Account
Number: 724100/97

     

    Account
Name: BioCancell Therapeutics, Inc.