[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

Exhibit 10.26

AMENDMENT NO. ONE
TO BUILD-TO-SUIT LEASE

THIS AMENDMENT NO. ONE (“Amendment”) is made and entered into as of October 18,
2002 by and between SLOUGH BTC, LLC, a Delaware limited liability company
(“Landlord”) and RIGEL PHARMACEUTICALS, INC., a Delaware corporation (“Tenant”).

RECITALS

A.            Landlord and Tenant are partners to that certain Build-To-Suit
Lease dated as of May 16, 2001 (“Lease”) pursuant to which Landlord shall lease
to Tenant, and Tenant shall lease from Landlord up to approximately 146,910
square feet.

B.            The parties wish to amend the Lease to provide, inter alia, (i) an
increase in the Tenant Improvement Allowance to be provided by Landlord, (ii)
the establishment of the Phase I Rent Commencement Date and the Phase II Rent
Commencement Date (which shall be deemed to occur at the same time and are
hereinafter collectively called the “Rent Commencement Date”), (iii) a rent
deferral payment to be made in Month 25 of the Lease term, and (iv) an
adjustment in minimum rental to reflect the increased Tenant Improvement
Allowance and the rent deferral, all subject to the terms and conditions set
forth herein.

C.            Unless otherwise defined herein, all capitalized terms have the
meanings assigned to them in the Lease.

THEREFORE, the parties agrees as follows:

1.             Increase in Tenant Improvement Allowance.  The Tenant Improvement
Allowance, as defined in Paragraph 4(b) of the Work Letter attached to the Lease
as Exhibit C, is hereby increased by $[ * ] per square foot (the “Additional
Tenant Improvement Allowance”).  Notwithstanding the provisions of such
Paragraph 4(b), Tenant shall not be required to match such Additional Tenant
Improvement Allowance in the fifteen percent (15%) ratio stated in the Lease. 
In the event Tenant does not use the entire Additional Tenant Improvement
Allowance towards the Cost of Improvements for the Tenant Improvements, then
Tenant may apply any unused Additional Tenant Improvement Allowance to reimburse
Tenant for its contribution to the Cost of Improvements for the Tenant
Improvements, including without limitation to its fifteen (15%) matching
contribution to the initial Tenant Improvement Allowance.  Tenant may seek such
reimbursement by providing to Landlord evidence of Tenant’s payment of such
contribution in form reasonably satisfactory to Landlord.  Landlord shall remit
such reimbursement to Tenant within ten (10) business days following such
request.  In no event shall the Additional Tenant Improvement Allowance be
eligible to be applied toward furniture or other personal property of Tenant.

 

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2.             Rent Commencement Date.  The Rent Commencement Date shall be
February 1, 2003, except that if Tenant takes occupancy of and commences
operation of its business in any portion of the Phase I Building or the Phase II
Building prior to February 1, 2003, then the Rent Commencement Date shall be the
date of such occupancy and commencement of business; provided, however, that if
the Rent Commencement Date occurs prior to February 1, 2003, Tenant shall have
no obligation to make payments of minimum rent under the Lease until the payment
that becomes due February 1, 2003 for the month of February, 2003, but all other
obligations of Tenant under the Lease (including, but not limited to, the
payment of Tenant’s Operating Expense Share) shall commence as of the Rent
Commencement Date and the term of the Lease shall commence as of the Rent
Commencement Date.  The foregoing shall not prohibit the Tenant from access to
the building prior to the Rent Commencement Date for the purposes of building
start-up (including, but not limited to, start-up of building systems,
network/phone setup, lab/equipment setup, furniture setup and vivarium
decontamination) nor affect or diminish Landlord’s obligation to complete
Landlord’s Work in accordance with the provisions of the Lease.

3.             Rent Deferral.  In consideration of Landlord’s agreement to the
provisions of this Amendment, Tenant shall make a lump-sum rent deferral payment
to Landlord in the amount of $[ * ], which payment shall be due on the first day
of Month 25 of the Lease (counting from the Rent Commencement Date), as shown in
the schedule of minimum rental set forth on Exhibit 1 to this Amendment.

4.             Minimum Rental.  In consideration for the increase in the Tenant
Improvement Allowance and the deferral of the Rent Commencement Date and/or of
Tenant’s minimum rent obligation as set forth above, the schedules of minimum
rental set forth in Paragraph 3.1(a) and 3.1(b) of the Lease are hereby
combined, amended and restated as set forth on Exhibit 1 to this Amendment. 
Such schedule remains subject to the provisions of Paragraph 3.1(e) of the
Lease.

5.             Prepayment of Minimum Rental.  Tenant may at any time prepay the
minimum rental reflected as Tranche 2 and/or Tranche 3 on Exhibit 1, but only by
prepaying all of Tranche 2 or Tranche 3 alone or all of both Tranches.  In the
event of any such prepayment on or before the first day of Month 25 of the Lease
(counting from the Rent Commencement Date), the amount necessary to prepay each
respective Tranche shall be equal to the portion of  the Additional Tenant
Improvement Allowance originally allocable to that Tranche (which portion is
assumed to be $[ * ] per Tranche for purposes of Exhibit 1) plus an imputed
return calculated as if the originally allocable portion had accrued interest
from the Rent Commencement Date to the date of prepayment at the rate of [ * ] %
per annum compounded annually.  In the event of any such prepayment after the
first day of Month 25 of the Lease, the amount necessary to prepay each
respective Tranche shall be equal to the unamortized balance of the portion of
the Additional Tenant Improvement Allowance originally allocable to that
Tranche.

6.             Warrant.  As additional consideration for the increase in the
Tenant Improvement Allowance and the deferral of rent, Tenant agrees (a) to
grant, concurrent with the execution of this Amendment, to Landlord or
Landlord’s designees (which may be any members, partners, shareholders or
affiliates of Landlord or any affiliates of any such members, partners,
shareholders or affiliates of Landlord) warrants registered in the name of
Landlord or such Landlord designees for the acquisition of an aggregate of
500,000 shares of Tenant’s common

 

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stock, which warrants shall be in the form attached hereto as Exhibit 2, shall
have an expiration date five (5) years after the date of issuance and shall have
an exercise price per share equal to one hundred fifteen percent (115%) of the
closing market price per share of Tenant’s common stock on the date this
Amendment is mutually executed; and (b) to amend and reissue, concurrent with
the execution of this Amendment, the existing warrant (Warrant No. CS-4) dated
May 16, 2001 in favor of Kwacker Limited, for 150,000 shares of Tenant’s common
stock, in such a manner that Sections 7 and 10 of such existing warrant shall be
identical to Section 7 and 10 of the form attached hereto as Exhibit 2 (except
that the expiration date of the existing warrant as set forth in Section 7
thereof shall remain May 16, 2006).

7.             No Further Modifications.  Unless otherwise define herein, the
terms and provisions of the Lease shall remain unmodified and in full force and
effect.

IN WITNESS WHEREOF, the parties have executed this Amendment No. One as of the
date first set forth above.

LANDLORD:

SLOUGH BTC, LLC,
a Delaware limited liability company 

 

 

 

 

 

 

 

 

 

 

 

By:

SLOUGH ESTATES USA, INC.,
a Delaware corporation, Its Manager

 

 

 

 

 

 

By:

/s/  William Rogalla

 

 

 

 

 

 

Its:

Vice President

 

 

 

 

 

 

 

 

TENANT:

RIGEL PHARMACEUTICALS, INC.
a Delaware corporation

 

 

 

 

 

By:

/s/ James M. Gower

 

 

 

 

 

Its:

CEO

 

 

 

 

 

By:

/s/ James H. Welch

 

 

 

 

 

Its:

CFO

 

 

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EXHIBIT 1

MINIMUM RENTAL

[*]

 

EXHIBIT 2

FORM OF WARRANT

See Exhibit 4.7

 

EXHIBIT 3

FORM OF WARRANT

See Exhibit 4.10

 

 

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

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