Document:

Unassociated Document

    EXHIBIT 4.2

     

     

    
      	   	
               

              8
      Hartom St, Jerusalem Israel 97775

              Phone:
      +972-2-548-6555  Fax: +972-2-548-6550

              www.biocancell.com  info@biocancell.com

            

    

    

    Allocation
Letter No:

    

    To:

    

    

    To whom
it may concern,

    

    Re: Allocation Letter for
Series 2 Warrants of BioCancell Therapeutics, Inc,

    a Delaware Corporation (“the
Corporation”)

    

    This is
to inform you that [_______] Series 2 Warrants for the purchase of shares
of the stock of the Corporation (par value $0.01 each) are hereby allocated in
your name as per the prospectus of the Corporation of [_______] (“the
Prospectus”).

    

    Please
note that as established in the Prospectus, anyone exercising a Series 2 Warrant
will be considered to have declared that they are not a U.S. Person, are not in
the United States at the time of exercise, and are not exercising the Series 2
Warrant for a US Person and/or a person in the United States at the time of
exercise.

    

    This
allocation letter can be split, transferred or waived in accordance with the
terms of the Prospectus.

    

    The
allocated Series 2 Warrants will be recorded by the Corporation in its registry
of Series 2 Warrant-holders of the Corporation.

    

    Sincerely,

    

    

    

    
      
        
          
            
              
                
                  
                    
                      
                        	
                                /s/
      Avi Barak

                              	 
      	
                                /s/
      Ira Weinstein

                              	 
	
                                Avi
      Barak

                              	 
      	
                                Ira
      Weinstein

                              	 
	
                                Chief
      Executive Officer

                              	 
      	
                                Chief
      Financial Officer

                              	 
	
                                BioCancell
      Therapeutics, Inc.

                              	 
      	
                                BioCancell
      Therapeutics, Inc.Unassociated Document

    
       

      EXHIBIT 4.3

       

      Execution Copy

       

      THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR ANY OTHER SECURITIES
LAWS. IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT
AND SUCH OTHER LAWS, THESE SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF, EXCEPT PURSUANT TO AN APPLICABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE 1933 ACT AND SUCH OTHER LAWS.

       

      UNSECURED
CONVERTIBLE PROMISSORY NOTE (THE “NOTE”)

       

      Date:

       

      
        	
                1.

              	
                Loan

              

      

       

      1.1.        Loan Amount. The
undersigned, BioCancell Therapeutics Inc., a publicly-held corporation organized
under the laws of the State of Delaware, and traded on the Tel-Aviv Stock
Exchange (the “Borrower” or the “Company”), hereby acknowledges and confirms
receipt from (the “Lender”, “Purchaser” or “Holder”) of the principal loan amount of
[__________] (the “Loan Amount”). This Note shall rank pari passu
with all other Company senior indebtedness, excluding only indebtedness to
banking institutions or car or equipment leasing companies incurred in the
ordinary course of business consistent with past practice but shall be senior to
all shareholder loans.

       

      1.2.        Interest. The unpaid
Loan Amount shall bear U.S. dollar denominated interest at the rate of 10.0% per
annum, compounded annually (the “Interest”), from the date of the Closing, as
such term is defined in the Subscription and Registration Rights Agreement to
which this note is attached as an exhibit, and until the date of actual
repayment. Interest accrued before and until the second anniversary of the
Closing shall be added to and deemed part of the Loan Amount. Commencing as of
the first quarter following the second anniversary of the Closing, the Interest
shall be payable to the Lender on a quarterly basis; provided, however, that
upon conversion of any portion of the Loan, the interest accrued on such
converted portion, from the last interest payment date and until the conversion
date, shall be paid to the Lender within 10 days of such conversion. The Company
will not withhold any taxes on payments to the Lender under this Note if the
Lender shall provide the Company with written confirmation of withholding tax
exemption in the form prescribed by law.

       

      1.3.        Repayment. The relevant portion of the Loan
Amount, and any unpaid Interest accrued thereon, in the period commencing on the
last Interest payment date, will not be payable in the event that this Note is
converted in accordance with Section 2 below, but will be payable upon repayment
pursuant to Section 3 or Section 4 below.

       

      
        	
                2.

              	
                Conversion

              

      

       

      2.1.
Conversion. Lender shall be entitled to
convert the outstanding Loan Amount, or any part thereof, together with any
unpaid Interest accrued thereon as at the date of conversion, which in no event
shall exceed the Interest accrued until the first quarter following the second
anniversary of the Closing, into shares of Common Stock of the Company, par
value US$ 0.01 (the “Underlying Shares”), at any time during the period of
four (4) years commencing as of the date of the Closing. The Loan Amount shall
be converted at a price per share of US$ 0.889 (which, for convenience and
indication purposes only, was equal to NIS 2.90 on the relevant date) (the “Conversion
Price”), which Conversion Price
shall be subject to the adjustments more fully set forth herein. Notwithstanding
the foregoing, in the event that the Average Price (as defined in the
Subscription and Registration Rights Agreement) is lower than US$ 0.743 or
higher than US$ 0.821 (i.e., five percent lower or higher than the PPS (as
defined in the Subscription and Registration Rights Agreement)), the Conversion
Price shall be adjusted to the lower of: (i) the Avenge Price (in US$)
multiplied by 1.20, and (ii) the closing price of the shares of Common Stock of
the Company, as reported on the Tel Aviv Stock Exchange, on the Determination
Date (as defined in the Subscription and Registration Rights Agreement)
multiplied by 1.25. The Average Price and the closing price in subsection (ii)
shall be denominated in US$ by dividing the Average Price or the closing price
denominated in NIS by the exchange rate of the US$ to NIS at the close of
business on the Determination Date. Subject to adjustments set forth herein, the
maximum number of Underlying Shares is [______], of which [______] are on
account of the principal amount and a maximum of [______] are on account of the
accrued Interest.

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

      Execution
Copy

       

      2.2.   M&A Event. In the
event that, prior to the earlier of the repayment or conversion of the Loan
Amount hereunder, the Company proposes to enter into a transaction (or a series
of related transactions) (an “M&A Event”) which entails any of the following:
(i) the consolidation or merger of the Company with or into any other
corporation or entity, in which the Company is not the continuing or the
surviving entity, (ii) the sale, lease, exchange or other transfer of all or
substantially all of the assets of the Company, (iii) the acquisition by any
person or entity of 50% or more of the issued and outstanding share capital of
the Company, or (iv) if any person shall succeed in having its nominees elected
to the Board of Directors of the Company and when added to any existing
directors remaining after such election who acts in concert with such person
shall constitute a majority of the board, then in addition to Lender’s right to
convert the outstanding Loan Amount or any part thereof, together with any
unpaid Interest accrued thereon as provided above, into shares of Common Stock
of the Company at a price per share equal to the Conversion Price then in
effect, at the option of the Holder, (i) the Company will immediately repay
the outstanding Loan Amount together with any Interest accrued thereon as of the
date of early repayment; or (ii) the Holder, upon any conversion of this Note,
at any time after the consummation of such M&A Event, shall be entitled to
receive, in lieu of the Underlying Shares receivable upon the conversion of this
Note prior to such consummation of the M&A Event, the shares or other
securities or property to which such Holder would have been entitled upon the
consummation of the M&A Event if the Holder had converted the Note
immediately prior thereto, all subject to further adjustments as set forth
herein, and the successor or purchasing corporation or other entity in such
M&A Event (if not the Company) shall duly execute and deliver to the Holder
a supplement hereto acknowledging such corporation’s or entity’s obligations
under the Note; and in each such case, the terms of the Note (including the
conversion period, transfer and adjustment provisions of the Note) shall be
applicable to the shares or other securities or property receivable upon the
conversion of the Note after the consummation of such M&A Event. In the
event that shares or other securities are payable as consideration in an M&A
Event, the Conversion Price shall be adjusted in accordance with the exchange
ratio determined in such transaction. The Company shall notify the Holder of the
proposed M&A Event by no later than fourteen (14) days prior to the
consummation of such M&A Event. The Holder hereby agrees and undertakes to
make commercially reasonable efforts to execute all necessary documentation and
take all further action, at the Company’s expense, as may be required or
desirable in order to consummate the M&A Event.

       

      2.3.
Mechanism of
Conversion. Before the Holder shall be entitled to convert any part of
the Note into shares of Common Stock of the Company it shall give an irrevocable
written notice to the Company at its registered office, of the election to
convert the same, together with the presentment of this Note. The Company shall,
as soon as practicable thereafter but in any event by no later than two (2)
Business Days (as defined below) commencing on the date it receives the notice
of conversion and the Note pursuant to the provisions herein, issue and deliver
to the Holder, or to its nominee or nominees, (i) a certificate or certificates
for the number of shares of Common Stock of the Company to which the Holder
shall be entitled as aforesaid, and (ii) a new Note for the balance of the
unconverted principal amount of the Loan Amount and any Interest accrued
thereon. Such conversion shall be deemed to have been made immediately prior to
the close of business on the date on which the Note was to be converted, and the
Holder shall be treated for all purposes as the record holder of such shares as
of such date.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      Execution
Copy

       

      
        
          	
                  
                  

                	
                  2.4.

                	
                  Fractional
      Shares. No fractions of shares shall be issued upon conversion of
      this Note, and the number of shares of stock issued shall be rounded to
      the nearest whole number (with cash being paid by the Company for any
      unissued fractional shares).

                

        

      

       

      
        
          	
                	
                  2.5.

                	
                  Adjustment. If the Company, at
      any time while the Loan Amount is outstanding shall pay a stock dividend
      or otherwise make a distribution or distributions on shares of its Common
      Stock issue rights, option or warrants for its Common Stock at below
      market price to all of the Company’s stockholders, then the Conversion
      Price set forth in Section 2.1 above shall be multiplied by a fraction,
      the numerator of which shall be the number of shares of Common Stock
      (excluding treasury shares, if any) outstanding before such event and the
      denominator of which shall be the number of shares of Common Stock
      outstanding after such event. If the Company shall subdivide or combine
      its shares of Common Stock, the Conversion Price in effect on such date
      shall be proportionately reduced, in case of subdivision of shares, as at
      the effective date of such subdivision, or if the Company shall fix a
      record date for the purpose of so subdividing, as at such record date,
      whichever is earlier, or shall be proportionately increased, in the case
      of combination of shares, as at the effective date of such combination,
      or, if the Company shall fix a
      record date for the purpose of so combining,
      as at such record date, whichever is earlier. If at any time prior to the
      conversion or repayment of the Note 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 Conversion Price shall be reduced by
      an amount equal to the per-share distribution on the record date fixed for
      the purpose of such distribution. Any adjustment made pursuant to this
      Section shall become effective immediately after the record date for the
      determination of stockholders entitled to receive such dividend or
      distribution and shall become effective immediately after the effective
      date in the case of a subdivision, combination or
      reclassification.

                

        

      

       

      
        
          	
                	
                  2.6.

                	
                  Adjustment due to
      Future Issuance of Securities. Until such time in which
      an aggregate amount of US$ 15,000,000 has been invested in the Company
      (excluding the Excluded Capital as defined in the Subscription and
      Registration Rights Agreement to which this note is attached as an
      exhibit), in any event that the Company issues any additional securities
      to the Purchaser or any third party, save for Excluded Issuances (as
      defined in the Subscription and Registration Rights Agreement), either at
      a purchase price, conversion price or exercise price less than the
      Conversion Price, the Lender will benefit from a “full ratchet” anti-dilution
      protection, such that the Conversion Price shall be retroactively reduced
      to the lowest price at which such additional new securities have been
      issued.

                

        

      

       

      2.7.         Reserved.

       

      2.8.         Whenever
the conversion price is adjusted pursuant hereto, the Company shall promptly
mail to the Lender a notice setting forth the conversion price after such
adjustment and setting forth a brief statement of the facts requiring such
adjustment.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      Execution
Copy

       

      2.9.         Most Favored Terms.
Until such time as an aggregate amount of US$ 15,000,000 has been invested in
the Company (excluding the Excluded Capital), in the event that any third party
is issued any type of debt or instrument having a characteristic of debt,
including but not limited to a straight note, a convertible note, an equity
instrument with a redemption right or similar debenture whether or not
convertible into securities of the Company under terms that are fully or
partially more favorable than those set forth herein, then, at the option of the
Lender, upon each such issuance, this Note shall be construed as containing the
most favorable terms afforded to such third party, as though such terms were
previously provided herein, with retroactive effect from the Closing (as defined
in the Subscription and Registration Rights Agreement). For example, if the
Company issues a convertible debenture with a higher conversion price but which
is convertible into shares having liquidation preferences that are superior to
the rights of the shares underlying this Note or with a higher interest rate
and/or longer conversion period, even if all other terms are inferior to this
Note, the Lender shall be entitled to elect that the shares into which this Note
shall be convertible shall be shares containing such superior liquidation
preference rights and – in the case of the higher interest rate and/or longer
conversion period – that the Interest herein and/or longer conversion period
shall be such higher interest rate and/or longer conversion period, while all
other terms of this Note will remain unchanged and in effect. The Company shall
immediately (subject to applicable law) notify the Lender in writing of any such
favorable note or debenture including a provision of the main terms of such
instruments. In the event that the Company issues convertible debentures which
are publicly traded, the Lender shall have the right to replace this Note with
such publicly traded convertible debentures in an amount equal to the
outstanding Loan Amount at such time, and this Note shall be cancelled and the
provisions of the publicly traded debentures shall apply.

       

      2.10. Any
dispute on matters under Sections 2.6 and 2.9 herein shall be referred to a
resolution by Giza Singer Even and Kesselman and Kesselman (PWC Israel). In the
event of different determinations by Giza Singer Even and PWC, the dispute shall
be resolved by calculating the average between the values determined by each of
Giza Singer Even and PWC with respect to each parameter of their determination.
The determination of Giza Singer Even and PWC will be exclusive and final. The
non-prevailing party in such dispute shall bear the expenses of Giza Singer Even
and PWC. The Company hereby acknowledges that the Purchaser and its affiliates
retain the services of Giza Singer Even and PWC in the ordinary course of
business for various tasks (accounting, tax, financial and fairness opinion,
advisory services and the like) and that they will not be limited from retaining
them also in the future. In that respect, the Company waives any claim it may
have against the Purchaser and its affiliates in connection with a conflict of
interest regarding the matters contemplated in this Section 2.10.

       

      
        	
                3. 

              	
                 Event
      of Default

              

      

       

      3.1.       For
the purposes of this Note, an “Event of Default” shall be deemed to have
occurred if any one of the following occurs:

       

      a)       a
default in the payment of interest on the Loan Amount when due and such default
shall continue for more than ten days;

       

      b)       a
default in the payment of the principal at the expressed or any accelerated due
date and such default shall continue for more than ten days;

       

      c)       a
default in the payment when due of the principal of or interest on any debt of
the Borrower to a bank or another financial institution or pursuant to which the
creditor has a registered security interest over assets of the Borrower or any
of its subsidiaries, having an unpaid principal amount in excess of US$ 100,000
(whether by lapse of time, by declaration, by call for redemption or otherwise),
and such default or event shall continue beyond the period of grace, if any,
allowed with respect thereto;

       

      d)       a
default in the observance or performance of any of the negative covenants set
forth in Section 6 (a), (c), (e) or (f) or any of the covenants set forth in
Sections 6.1, 6.2 or 6.3 of the Subscription and Registration Rights
Agreement;

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      Execution
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      e)       final
non-appealable judgment(s) for the payment of money aggregating in excess of
US$100,000 (and US$500,000 with respect to any major supplier of the Company
with annual payments by the Company exceeding 20% of the Company’s annual
expenditures) is or are outstanding against the Borrower or against any of the
property or assets of the Borrower and any such judgment or judgments
aggregating in excess of US$100,000 (and US$500,000 with respect to any major
supplier of the Company with annual payments by the Company exceeding 20% of the
Company’s annual expenditures) has or have remained unpaid, unvacated, unbonded
or unstayed by appeal or otherwise for a period of 30 days from the date of its
or their entry;

       

      f)       If
the Borrower is de-listed from the Tel-Aviv Stock Exchange and its shares are
not listed within 60 days of such de-listing on NASDAQ or in an alternate
exchange reasonably satisfactory to the Lender;

       

      g)       If
there shall be commenced against the Borrower (other than by the Lender) any
proceedings related to the Borrower under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, receivership, dissolution or
liquidation law or statute of any jurisdiction, whether now or hereinafter in
effect, and any such proceedings shall remain undismissed for a period of sixty
(60) days, or if a receiver or trustee shall be appointed for the Borrower or
for all or a substantial part of its assets, and any such receivership or
trusteeship shall remain undischarged for a period of sixty (60)
days;

       

      h)       If
the Borrower applies for an arrangement with its creditors or participants, or
if the
Borrower shall make an assignment of its assets for the benefit of its creditors
(other than in the ordinary
course of business); or

       

      i)       Upon
the levy of an attachment or the institution of execution proceedings (other
than by
the Lender) against the whole or a substantial of Borrower’s assets, where such
attachment or
execution proceeding is not discharged within sixty (60) days.

       

      j) If a
representative of the Purchaser is not a member of each of the Company’s Board
of Directors and the Company’s four-member Executive Committee, other than by
the resignation of such person and the refusal of the Purchaser to appoint
someone in his stead (as long as the Purchaser holds securities (on an
as-converted basis) that represent at least seven percent (7%) of the issued and
outstanding share capital of the Company); provided that in such case, the
Purchaser shall have the right to demand the repayment of the Loan Amount plus
an amount equal to the Interest accruable over a period of four (4) years from
the Closing Date less any amount of Interest actually paid to
Purchaser.

       

      3.2.         The
Borrower shall notify the Lender, in writing, immediately upon becoming aware of
any Event of Default described above.

       

      3.3.         Acceleration of
Maturities. When any Event of Default described in paragraphs (a), (b) or
(j) of Section 3.1 has happened and is continuing, the Lender may, by notice in
writing sent to the Company, declare the Note due and payable, without any
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived.

       

      When any
Event of Default described in paragraphs (c)-(i) of Section 3.1 has occurred,
then the Note shall immediately become due and payable without presentment,
demand or notice of any kind, all of which are hereby expressly waived. Upon the
Note becoming due and payable as a result of any Event of Default as aforesaid,
the Lender shall be entitled to cause the Company to forthwith pay to the Lender
all principal and Interest accrued on the Note. Any amounts payable with respect
to this Section 3.3 shall be supplemented by additional interest accrued thereon
at an annual rate of 5% from the date when the Event of Default has occurred and
until the payment date. Neither any course of dealing on the part of the Lender
nor any delay or failure on the part of the Lender to exercise any right shall
operate as a waiver of such right or otherwise prejudice the Lender’s rights,
powers and remedies. The Company further agrees, to the extent permitted by law,
to pay the Lender all reasonable expenses incurred by it in implementation of
its rights, powers and remedies under this Section 3.

       

      
        
          
          

        

        
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      Execution
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                4. 

              	
                Repayment

              

      

       

      Unless
converted earlier pursuant to Section 2 above, repayment of the Loan Amount
together with any unpaid Interest accrued thereon hereunder shall be due and
payable upon the fourth anniversary of the Closing (the “Maturity
Date”) by check or wire transfer
delivered to the Lender’s account furnished to the Company for that purpose.
Upon repayment, the Note shall be cancelled and returned to the Company.
Whenever any payment or other obligation hereunder shall be due on a day other
than a Business Day, such payment shall be made on the next succeeding Business
Day. “Business
Day” means a day on which commercial banks in Israel are required to be
open for business, but excluding Fridays.

       

      
        	
                5. 

              	
                Reserved.

              

      

       

      
        	
                6.

              	
                Negative
      Covenants

              

      

       

      The
Company hereby undertakes that for as long as the Loan Amount has not been
repaid or converted pursuant to the terms hereof it shall not without the prior
written consent of (i) the Lender with respect to sub-sections (a), (c), (e) or
(f); or (ii) of the Executive Committee (as defined in the Subscription and
Registration Rights Agreement) with respect to sub-sections (b) or
(d):

       

      
        	
              	
                a)

              	
                materially
      change the general nature of its
business;

              

      

       

      
        
          	
                	
                  b)

                	
                  transfer,
      license, encumber, pledge or dispose of more than 20% of its assets;
      provided that if the Executive Committee approves such transaction the
      Purchaser shall have the right to demand the repayment of the Loan Amount
      plus an amount equal to the Interest accruable over a period of four (4)
      years from the Closing Date less any amount of Interest actually paid to
      Purchaser;

                

        

      

       

      
        	
              	
                c) 

              	
                distribute
      any cash or share dividends to its
stockholders;

              

      

       

      
        
          	
                	
                  d)

                	
                  a
      consummation of an M&A Event in which all or part of the consideration
      payable by the acquirer is in a cash; provided that if the Executive
      Committee approves such transaction the Purchaser shall have the right to
      demand the repayment of the Loan Amount plus an amount equal to the
      Interest accruable over a period of four (4) years from the Closing Date
      less any amount of Interest actually paid to
  Purchaser;

                

        

      

       

      
        	
              	
                e)

              	
                make
      any loan or other extension of credit to its distributors, customers, or
      employees other
      than loans and advances granted in the ordinary course of business and
      consistent with past practices; or

              

      

       

      
        
          	
                	
                  f)

                	
                  (i)
      receive any loan or advance from a third party or incur any debt, other
      than (a) inter-company loans granted by the Company to its subsidiaries or
      credit from its suppliers incurred in the ordinary course of business,
      consistent with past practices; and (b) a loan of up to $2 million with
      the same terms as set forth in this Convertible Note, or (ii) issue a
      guarantee in an aggregate amount in excess of
  US$50,000.

                

        

      

       

      
        	
                6A

              	
                Additional
      Covenants.

              

      

       

      
        
          	
                	
                  a)

                	
                  The
      Company will maintain and reserve, free from pre-emptive or similar
      rights, such number of authorized but unissued shares of Common Stock so
      that this Note may be converted without additional authorization of Common
      Stock after giving effect to all other warrants, convertible securities
      and other rights to acquire shares of the
  Company.

                

        

      

       

      
        
          
          

        

        
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      Execution
Copy

       

      
        
          	
                  
                  

                	
                  b)

                	
                  For
      so long as the Note has not been repaid or converted in full, the Company
      agrees that it will not enter into, or be a party to, any transaction,
      arrangement or agreement with any Affiliate (as defined below) without the
      Lender’s prior written consent. For purposes of this Agreement, the term
      “Affiliate” shall mean, any individual or
      any type of entity whether incorporated or not which, directly or
      indirectly through one or more intermediaries, controls or is under common
      control with the Company. The term “control” shall have the meaning
      ascribed to such term in the Israeli Securities
  Law-1968.

                

        

      

       

      
        
          	
                	
                  c)

                	
                  The
      Company shall act in good faith in the performance of this Note and as
      such will not, through any reorganization, recapitalization, transfer of
      assets, consolidation, merger, dissolution, issue or sale of securities or
      any other voluntary action, intentionally avoid or seek to avoid the
      observance or performance of any of the terms to be observed or performed
      hereunder by the Company.

                

        

      

       

      
        
          	
                	
                  d)

                	
                  Milestones. The Company shall
      use its best efforts and allocate the budget required to achieve and
      satisfy the milestones set forth in Exhibit 6A(d) attached hereto. Any
      change in excess of 10% to the budget devoted to the attainment of such
      milestones and to the schedule for its deployment shall require the prior
      written approval of the Executive Committee (as defined in the
      Subscription and Registration Rights Agreement). It is hereby understood
      that the Company’s ability to perform the milestones set forth in sections
      (a) and (b) of Exhibit 6A(d) may be subject to technological or other
      difficulties that are not in its control, and may not be timely realized,
      or may be realized differently than expected subject to the approval of
      the Executive Committee (as defined in the Subscription and Registration
      Rights Agreement). As of the date of this Agreement the Company is not
      aware of any difficulty that may delay this
  schedule.

                

        

      

       

      
        
          	
                	
                  e)

                	
                  Management
      Fees. As long as the director nominated by the Purchaser to the
      Company’s Board of Directors serves in such Capacity, the Purchaser shall
      provide the Company or at the
      request of the Company, to a subsidiary of the Company, with consulting
      services on a non-exclusive basis on average at least five (5) working
      days per month. For such services, the Company or the subsidiary, as
      applicable, shall pay the Purchaser (or its designee) a management fee as
      follows: (i) US$30,000 plus VAT, if applicable, in cash per annum paid on
      a quarterly basis within 10 days following the end of each quarter; and
      (ii) shall grant on the date hereof and on each anniversary thereafter,
      63,939 shares of Common Stock of the Company plus VAT, if applicable. Each
      share granted hereunder shall be fully vested and shall be deemed a
      “Registrable Security” (as defined in the Subscription and Registration
      Rights Agreement. Upon the request of the Purchaser, and subject to the
      approval of the Company’s General Meeting
      to be convened
      as soon as practicable following the date of the Subscription and
      Registration Rights Agreement to approve the transactions contemplated
      herein, in the Subscription and Registration Rights Agreement and in the
      Warrant, the Company shall grant such shares to the person designated by
      the Purchaser to the Company’s Board of Directors under Section 102 of the
      Israeli Income Tax Ordinance. The Company shall reimburse the Purchaser
      for all reasonable out-of-pocket expenses incurred by the director in
      providing such services (travel abroad, accommodation, professional
      counsel etc.), provided that an aggregate amount exceeding US$15,000 per
      year shall be approved in advance by the Company. This provision shall not
      derogate from the director designated by Purchaser to receive the same
      consideration that other non-employee directors of the Company receive in
      their capacity as such. The Company shall withhold required taxes pursuant
      to applicable law on payments to the Purchaser under this sub-section (c),
      unless the Purchaser shall provide the Company with written confirmation
      of withholding tax exemption in the form prescribed by
  law.

                

        

      

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      Execution
Copy

       

      
        	
                7.

              	
                General
      Provisions

              

      

       

      7.1.         Further Assurances. The Borrower and the
Lender shall perform such further acts and execute such further documents as may
reasonably be necessary to carry out and give full effect to the provisions of
this Note and the intentions of the parties as reflected thereby.

       

      7.2.         Entire Agreement; Amendment;
Waiver. This Note, the Subscription and Registration Rights Agreement and
the other Transaction Documents (as defined in the Subscription and Registration
Rights Agreement) constitute the full and entire understanding and agreement
between the parties hereto with regard to the subject matters hereof. Any term
of this Note may be amended with the written consent of the Company and the
Lender. No delay or omission to exercise any right, power, or remedy accruing to
any party upon any breach or default under this Note, shall be deemed a waiver
thereof or of any other breach or default theretofore or thereafter occurring.
Except as otherwise provided for herein, the observance of any term hereof may
be waived (either prospectively or retroactively and either generally or in a
particular instance) only with the written consent of the party against such
waiver is sought.

       

      7.3.         Severability;
Headings. The invalidity or unenforceability of any term or provision of
this Note will not affect the validity or enforceability of any other term or
provision hereof. The headings in this Note are for convenience of reference
only and will not alter or otherwise affect the meaning of this
Note.

       

      7.4.         Replacement Note. If
this Note becomes mutilated and is surrendered by the Holder to the Borrower, or
if the Holder claims that this Note has been lost or destroyed, the Borrower
shall execute and deliver to the Holder a replacement Note upon receipt of
appropriate waiver and undertaking of indemnification by the
Holder.

       

      7.5.         Assignment. This Note
is transferable and assignable by the Holder. Either party may freely assign or
transfer the rights granted pursuant to this Note. 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, that that the Company would not be required to file under the
Subscription and Registration Rights Agreement, the party that seeks such
assignment will cover the Company’s expenses for such filing.

       

      7.6.         General Obligations.
From the date hereof until the conversion or repayment of the Loan Amount in
full, the Company shall inform the Lender of any material developments in the
Company, including without limitation, any material agreement entered into by
the Company or any of its subsidiaries, that would result in significant
expenses to the Company or a material adverse effect on the financial or
business condition of the Company, and shall provide to the Lender copies of any
and all financial statements prepared by the Company, and provide access to any
material documents concerning such developments in the Company.

       

      7.7.         Governing Law. This
Note shall be governed by and construed under the laws of the State of Israel,
without regard for the conflicts of laws provisions thereof. Except as
explicitly set forth in this Note to the contrary, any dispute arising under in
connection with this Note shall be settled exclusively before the competent
courts of the city of Tel-Aviv-Jaffa.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      Execution
Copy

       

      7.8.         Notices. All notices
and other communications required or permitted hereunder to be given to a party
hereto shall be in writing. All notices shall be given by registered mail
(postage prepaid), by facsimile or email or otherwise delivered by hand or by
messenger to the parties’ respective addresses as shall be designated by notice
from time to time. Any notice sent in accordance with
this Section 7.8 shall be deemed received upon the earlier of: (i) if sent by
facsimile or email, upon transmission and confirmation of transmission or (if
transmitted and received on a non-business day)
on the first
business day following transmission and electronic confirmation of transmission,
(ii) if sent
by registered mail, upon 3 (three) days of mailing, (iii) if sent by messenger,
upon delivery; and/or (iv) upon actual receipt. All notices shall be addressed
to:

       

      If sent
to the Company to:

       

      8 Hartom
St. Har Hotzvim

      Jerusalem
97775

      Fax:
02-5486550

      Email:
avi.barak@biocancell.com

      Attention:
Avi Barak

       

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

       

      Yuval
Horn, Adv.

      Baratz,
Horn & Co.

      1 Azrieli
Center

      Tel Aviv,
Israel 67021

      Fax:+972-3-6960986

      Email:
y.horn@bar-law.com

       

      If sent
to the Purchaser to:

       

      [______]

      
         

      

      7.9.
Counterparts.
This Note may be executed in one or more counterparts.

       

      [THE
REMAINDER OF THIS PAGE WAS INTENTIONALLY LEFT BLANK}

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      Execution
Copy

       

      [Signature
Page to BioCancell Therapeutics Inc. Convertible Promissory Note]

       

      IN WITNESS WHEREOF, the Borrower has executed
this Note as of the date and year first above written.

       

      BIOCANCELL
THERAPEUTICS INC

      

      
        
          
            
              
                	
                        By:

                      	
                         

                      	 
	 
      	 
      	 
	
                        Name:

                      	 
      	 
	 
      	 
      	 
	
                        Title:

                      	 
      	 

              

            

          

        

      

      

      AGREED
AND ACCEPTED:

      

      TIKCRO
TECHNOLOGIES LTD.

      

      
        
          
            
              
                	
                        By.

                      	
                         

                      	 
	 
      	 	 
	
                        Name:

                      	
                         
      

                      	 
	 
      	 
      	 
	
                        Title:

                      	
                         

                      	
                         

                      

              

            

          

        

      

       

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      Execution
Copy

       

      Exhibit
6A(d)

       

      MILESTONES

       

      Commencing
at the Closing, the Company shall conduct its best efforts to successfully
conclude the following milestones:

       

      (a)    To
conclude by no later than March lst, 2009
an FDA approved Phase II of the Bladder clinical
trials, which are currently expected to be conducted in centers in Israel and
the U.S;

       

      (b)    To
conclude by no later than May lst, 2009
an FDA approved Phase I of the Ovarian clinical trials, which are currently
expected to be conducted in centers in Israel and the U.S.;

       

      (c)    To
recruit within three (3) months from the Closing
at least two (2) additional industry recognized researchers to hold senior
positions in the Company in addition to the current employees and keep
such team going forward; and

       

      (d)    To
effect a listing of the Company’s shares on NASDAQ or on the OTCQX within 9
months following the Closing.

       

      It is
hereby Understood that the Company’s ability to
perform any of the milestones set forth in (a) and (b) above
may be subject to technological or other difficulties, and may not be timely
realized, or may be
realized differently than expected subject to the approval of the Executive Committee (as
defined in the Subscription and Registration
Rights Agreement).

       

      
        
          
          

        

        
          11

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