EXHIBIT 10.2

 

THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”).  SUCH
SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF REGISTRATION OR AN
EXEMPTION THEREFROM. RIGEL PHARMACEUTICALS, INC. MAY REQUIRE AN OPINION OF
COUNSEL REASONABLY ACCEPTABLE TO IT THAT A PROPOSED TRANSFER OR SALE IS IN
COMPLIANCE WITH THE ACT.

 

THE SALE, TRANSFER OR VOTING OF THE SECURITIES REPRESENTED HEREBY IS RESTRICTED
BY THE TERMS OF A SECOND INVESTOR RIGHTS AGREEMENT BY AND AMONG RIGEL
PHARMACEUTICALS, INC. AND THE INVESTORS NAMED THEREIN. COPIES OF THE AGREEMENT
MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDERS OF RECORD OF
THIS CERTIFICATE TO THE SECRETARY OF RIGEL PHARMACEUTICALS, INC. AT THE
PRINCIPAL EXECUTIVE OFFICES OF RIGEL PHARMACEUTICALS, INC.

 

RIGEL PHARMACEUTICALS, INC.

 

COMMON STOCK PURCHASE WARRANT

 

Warrant No. CS-[      ]

 

[           ] Shares

[                            ,] 2003

 

 

 

1.              Issuance.  For value received, this Warrant is issued to
[Holder], by Rigel Pharmaceuticals, Inc., a Delaware corporation (hereinafter
with its successors called the “Company”), pursuant to the terms and conditions
of that certain Common Stock and Warrant Purchase Agreement, dated as of April
29, 2003, by and among the Company and the investors listed on Schedule A
thereto (the “Purchase Agreement”).

 

2.              Purchase Price; Number of Shares.  The registered holder of this
Warrant (the “Holder”), commencing on the date hereof, is entitled upon
surrender of this Warrant, with the subscription form annexed hereto duly
executed, at the principal office of the Company, to purchase from the Company
[            (            )] [To be 20% of the Holder’s shares under the
Purchase Agreement] fully paid and nonassessable shares (the “Shares”) of common
stock, $.001 par value per share, of the Company (the “Common Stock”), at a
price per share of $0.64 (the “Warrant Price”).  Until such time as this Warrant
is exercised in full or expires, the Warrant Price and the securities issuable
upon exercise of this Warrant are subject to adjustment as hereinafter
provided.  The person or persons under whose name or names any certificate
representing Shares shall be deemed to have become the holder of record of the
Shares represented thereby as at the close of business on the date this Warrant
is exercised with respect to such Shares, whether or not the transfer books of
the Company shall be closed.

 

3.              Payment of Purchase Price.  The Purchase Price (as defined
below) may be paid: (i) by certified or bank check or by wire transfer of
immediately available funds to an account designated by the Company; (ii) by the
surrender by the Holder to the Company of any promissory notes or other
obligations issued by the Company, with all such notes and obligations

 

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so surrendered being credited against the Purchase Price in an amount equal to
the principal amount thereof plus accrued interest to the date of surrender;
(iii) exercise of the “net issue election” right provided for in Section 4; or
(iv) by any combination of the foregoing. The “Purchase Price” shall mean the
amount equal to the then applicable Warrant Price multiplied by the number of
Shares then being purchased.

 

4.              Net Issue Election.  The Holder may elect to receive, without
the payment by the Holder of any additional consideration, shares of Common
Stock equal to the value of this Warrant or any portion hereof by the surrender
of this Warrant or such portion to the Company, with the net issue election
notice annexed hereto duly executed, at the principal office of the Company. 
Thereupon, the Company shall issue to the Holder such number of fully paid and
nonassessable shares of Common Stock as is computed using the following formula:

 

X =

Y(A – B)

A

 

where:                                                             X
=                             the number of shares of Common Stock to be issued
to the Holder pursuant to this Section 4.

 

Y =                              the number of shares of Common Stock covered by
this Warrant in respect of which the net issue election is made pursuant to this
Section 4.

 

A =                            the Fair Market Value (defined below) of one
share of Common Stock, as determined at the time the net issue election is made
pursuant to this Section 4.

 

B =                              the Warrant Price in effect under this Warrant
at the time the net issue election is made pursuant to this Section 4.

 

“Fair Market Value” of a share of Common Stock as of a particular date (the
“Determination Date”) shall mean the average of the closing or last reported
sale prices of the Common Stock as reported on the Nasdaq National Market over
the 30-day period ending five business days prior to the Determination Date;
provided, however, that if (i) the Common Stock is neither traded on the Nasdaq
National Market nor on a national securities exchange, then Fair Market Value
shall be the average of the closing or last reported sale prices of the Common
Stock over the 30-day period ending five business days prior to the
Determination Date reflected in the over-the-counter market, as reported by the
National Quotation Bureau, Inc. or any organization performing a similar
function, or if closing prices are not then routinely reported for the
over-the-counter market, the average of the last bid and asked prices of the
Common Stock over the 30-day period ending five business days prior to the
Determination Date and (ii) if there is no public market for the Common Stock,
then Fair Market Value shall be determined in good faith by the Company’s Board
of Directors.

 

5.              Partial Exercise.  This Warrant may be exercised in part, and
the Holder shall be entitled to receive a new warrant, which shall be dated as
of the date of this Warrant, covering the number of Shares in respect of which
this Warrant shall not have been exercised.

 

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6.              Fractional Shares.  In no event shall any fractional share of
Common Stock be issued upon any exercise of this Warrant.  If, upon exercise of
this Warrant as an entirety, the Holder would, except as provided in this
Section 6, be entitled to receive a fractional share of Common Stock, then the
Company shall pay in lieu thereof, the Fair Market Value of such fractional
share in cash.

 

7.              Expiration Date; Early Termination.  This Warrant or any
Successor Warrant (as defined in Section 10 below) shall expire on the close of
business on [               ,] 2008 [to be the fifth anniversary of the date of
issuance] (the “Expiration Date”), and shall be void thereafter.

 

8.              Reserved Shares; Valid Issuance.  The Company covenants that it
will at all times from and after the date hereof reserve and keep available such
number of its authorized shares of Common Stock, free from all preemptive or
similar rights therein, as will be sufficient to permit the exercise of this
Warrant in full into shares of Common Stock upon such exercise.  If at any time
prior to the Expiration Date the number of authorized but unissued shares of
Common Stock shall not be sufficient to permit exercise of this Warrant, the
Company shall take such corporate action as may, in the opinion of its counsel,
be necessary to increase its authorized but unissued shares of Common Stock  to
such number of shares as shall be sufficient for such purposes. The Company
further covenants that such shares as may be issued pursuant to such exercise
will, upon issuance, be duly and validly issued, fully paid and nonassessable
and free from all taxes, liens and charges with respect to the issuance thereof.

 

9.              Stock Splits and Dividends.  If after the date hereof the
Company shall subdivide the Common Stock, by split-up or otherwise, combine the
Common Stock or issue additional shares of Common Stock in payment of a stock
dividend on the Common Stock, then the number of Shares issuable upon the
exercise of this Warrant shall forthwith be proportionately increased in the
case of a subdivision or stock dividend, or proportionately decreased in the
case of a combination, and the Warrant Price shall forthwith be proportionately
decreased in the case of a subdivision or stock dividend, or proportionately
increased in the case of a combination.

 

10.       Mergers and Reclassifications.

 

(a)          If after the date hereof the Company shall enter into any
Reorganization (as hereinafter defined), then, as a condition of such
Reorganization, lawful provisions shall be made, and duly executed documents
evidencing the same from the Company or its successor shall be delivered to the
Holder (a “Successor Warrant”), so that the Holder shall thereafter have the
right to purchase, at a total price not to exceed that payable upon the exercise
of this Warrant in full, the kind and amount of shares of stock and other
securities and property receivable upon such Reorganization by a holder of the
number of shares of Common Stock that might have been purchased by the Holder
immediately prior to such Reorganization, and in any such case appropriate
provisions shall be made with respect to the rights and interest of the Holder
to the end that the provisions hereof (including without limitation, provisions
for the adjustment of the Warrant Price and the number of shares issuable
hereunder and the provisions relating to the net issue election) shall
thereafter be applicable in relation to any shares of stock or other securities
and property thereafter deliverable upon exercise hereof.

 

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(b)          For the purposes of this Section 10, the term “Reorganization”
shall include without limitation any reclassification, capital reorganization or
change of the Common Stock (other than as a result of a subdivision, combination
or stock dividend provided for in Section 9 hereof), any consolidation of the
Company with, or merger of the Company into, another corporation or other
business organization (other than a merger in which the Company is the surviving
corporation and which does not result in any reclassification or change of the
outstanding Common Stock), or any sale or conveyance to another corporation or
other business organization of all or substantially all of the assets of the
Company

 

11.       Certificate of Adjustment. Whenever the Warrant Price is adjusted, as
herein provided, the Company shall promptly deliver to the Holder a certificate
of the Company’s Chief Financial Officer setting forth the Warrant Price after
such adjustment and setting forth a brief statement of the facts requiring such
adjustment.

 

12.       Notices of Record Date, Etc.  In the event of:

 

(a)          any taking by the Company of a record of the holders of any class
of securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase, sell or otherwise acquire or dispose of any shares of
stock of any class or any other securities or property, or to receive any other
right;

 

(b)          any reclassification of the capital stock of the Company, capital
reorganization of the Company, consolidation or merger involving the Company or
sale or conveyance of all or substantially all of its assets; or

 

(c)           any voluntary or involuntary dissolution, liquidation or
winding-up of the Company;

then in each such event the Company will provide or cause to be provided to the
Holder a written notice thereof.  Such notice shall be provided at least 15
calendar days prior to the date specified in such notice on which any such
action is to be taken.

 

13.       Representations, Warranties and Covenants.  This Warrant is issued and
delivered by the Company and accepted by each Holder on the basis of the
following representations, warranties and covenants made by the Company:

 

(a)          The Company has all necessary authority to issue, execute and
deliver this Warrant and to perform its obligations hereunder.  This Warrant has
been duly authorized, issued, executed and delivered by the Company and is the
valid and binding obligation of the Company, enforceable in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws of general application affecting the
enforcement of the Holder’s rights or by general equity principals or public
policy concerns.

 

(b)          The Shares have been duly authorized and reserved for issuance by
the Company and, when issued in accordance with the terms hereof, will be
validly issued, fully paid and nonassessable.

 

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14.       Amendment and Waiver.  The terms of this Warrant may be amended,
modified or waived only with the written consent of the party against which
enforcement of the same is sought.

 

15.       Representations and Covenants of the Holder.  This Warrant has been
entered into by the Company in reliance upon the following representations and
covenants of the Holder, which by its execution hereof the Holder hereby
confirms:

 

(a)          The Holder is an “accredited investor” as defined in Regulation D
under the Securities Act of 1933, as amended (the “Securities Act”), and the
Holder is knowledgeable, sophisticated and experienced in making, and is
qualified to make decisions with respect to, investments in shares presenting an
investment decision like that involved in the purchase of the Shares and the
Warrant, including investments in securities issued by the Company and
investments in comparable companies, and has requested, received, reviewed and
considered all information it deemed relevant in making an informed decision to
purchase the Warrant;

 

(b)          The Holder is acquiring the Warrant in the ordinary course of its
business and for its own account for investment only and with no present
intention of distributing the Warrant or any of the Shares or any arrangement or
understanding with any other persons regarding the distribution of the Warrant
or the Shares; and

 

(c)          The Holder will not, directly or indirectly, offer, sell, pledge,
transfer or otherwise dispose of (or solicit any offers to buy, purchase or
otherwise acquire or take a pledge of) the Warrant or any of the Shares except
in compliance with the Securities Act, applicable state securities laws and the
respective rules and regulations promulgated thereunder.

 

16.       Notices, Transfers, Etc.

 

(a)          Any notice or written communication required or permitted to be
given to the Holder may be given by certified mall or delivered to the Holder at
the address most recently provided by the Holder to the Company.

 

(b)          Subject to compliance with applicable federal and state securities
laws and any other contractual restrictions between the Company and the Holder
contained in the Purchase Agreement or that certain Second Investor Rights
Agreement, dated as of the date hereof, by and among the Company and the
investors named therein, this Warrant may be transferred by the Holder with
respect to any or all of the Shares purchasable hereunder.  Upon surrender of
this Warrant to the Company, together with the assignment notice annexed hereto
duly executed, for transfer of this Warrant as an entirety by the Holder, the
Company shall issue a new warrant of the same denomination to the assignee. 
Upon surrender of this Warrant to the Company, together with the assignment
hereof properly endorsed, by the Holder for transfer with respect to a portion
of the Shares, the Company shall issue a new warrant to the assignee, in such
denomination as shall be requested by the Holder hereof, and shall issue to such
Holder a new warrant covering the number of Shares in respect of which this
Warrant shall not have been transferred.

 

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(c)          The Company acknowledges and agrees that an opinion of counsel
shall not be required upon the transfer by the Holder of any securities to an
“Affiliate” (as defined in Rule 12b-2 of the rules and regulations promulgated
under the Securities and Exchange Act of 1934, as amended) of such Holder.

 

(d)          In case this Warrant shall be mutilated, lost, stolen or destroyed,
the Company shall issue a new warrant of like tenor and denomination and deliver
the same (i) in exchange and substitution for and upon surrender and
cancellation of any mutilated Warrant or (ii) in lieu of any Warrant lost,
stolen or destroyed, upon receipt of an affidavit of the Holder or other
evidence reasonably satisfactory to the Company of the loss, theft or
destruction of such Warrant and an indemnification of loss by the Holder in
favor of the Company.

 

17.       Transfer to Comply with the Securities Act.  This Warrant may not be
exercised and neither this Warrant nor any of the Shares, nor any interest in
either, may be offered, sold, assigned, pledged, hypothecated, encumbered or in
any other manner transferred or disposed of, in whole or in part, except in
compliance with applicable United States federal and state securities laws and
the terms and conditions hereof.  Each Warrant shall bear a legend in
substantially the same form as the legend set forth on the first page of this
Warrant.  Each certificate for Shares issued upon exercise of this Warrant,
unless at the time of exercise such Shares are acquired pursuant to a
registration statement that has been declared effective under the Securities Act
and applicable blue sky laws, shall bear legends substantially in the following
form:

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”).  SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF
REGISTRATION OR AN EXEMPTION THEREFROM. RIGEL PHARMACEUTICALS, INC. MAY REQUIRE
AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO IT THAT A PROPOSED TRANSFER OR
SALE IS IN COMPLIANCE WITH THE ACT.”

 

“THE SALE, TRANSFER OR VOTING OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED BY THE TERMS OF A SECOND INVESTOR RIGHTS AGREEMENT BY AND AMONG RIGEL
PHARMACEUTICALS, INC. AND THE INVESTORS NAMED THEREIN. COPIES OF THE AGREEMENT
MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDERS OF RECORD OF
THIS CERTIFICATE TO THE SECRETARY OF RIGEL PHARMACEUTICALS, INC. AT THE
PRINCIPAL EXECUTIVE OFFICES OF RIGEL PHARMACEUTICALS, INC.”

 

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Any certificate for any Shares issued at any time in exchange or substitution
for any certificate for any Shares bearing such legends (except a new
certificate for any Shares issued after the acquisition of such Shares pursuant
to a registration statement that has been declared effective under the
Securities Act) shall also bear such legends unless, in the opinion of counsel
for the Company, the Shares represented thereby need no longer be subject to the
restriction contained herein.  The provisions of this Section 17 shall be
binding upon all subsequent holders of certificates for Shares bearing the above
legends and all subsequent holders of this Warrant, if any.

 

18.       Rights of the Holder.  The Holder shall not, by virtue hereof, be
entitled to any rights of a stockholder of the Company, either at law or equity,
and the rights of the Holder are limited to those expressed in this Warrant. 
Nothing contained in this Warrant shall be construed as conferring upon the
Holder hereof the right to vote, to consent or to receive notice as a
stockholder of the Company on any matters or with respect to any rights
whatsoever as a stockholder of the Company.  No dividends or interest shall be
payable or accrued in respect of this Warrant or the interest represented hereby
or the Shares purchasable hereunder until, and only to the extent that, this
Warrant shall have been exercised in accordance with its terms.

 

19.       No Impairment.  The Company will not, by amendment of its Amended and
Restated Certificate of Incorporation or through any reclassification, capital
reorganization, consolidation, merger, sale or conveyance of assets,
dissolution, liquidation, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance of performance of any of the terms
of this Warrant, but will at all times in good faith assist in the carrying out
of all such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holder.

 

20.       Governing Law.  The provisions and terms of this Warrant shall be
governed by and construed in accordance with the internal laws of the State of
California.

 

21.       Successors and Assigns.  This Warrant shall be binding upon the
Company’s successors and assigns and shall inure to the benefit of the Holder’s
successors, legal representatives and permitted assigns.

 

22.       Business Days.  If the last or appointed day for the taking of any
action required or the expiration of any rights granted herein shall be a
Saturday or Sunday or a legal holiday in California, then such action may be
taken or right may be exercised on the next succeeding day that is not a
Saturday or Sunday or such a legal holiday.

 

23.       Severability.  If one or more provisions of this Warrant are held to
be unenforceable under applicable law, such provision shall be excluded from
this Warrant, and the balance of the Warrant shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.

 

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In Witness Whereof, the Company has duly caused this Warrant to be signed by its
duly authorized officer and to be dated as of the date first written above.

 

 

 

Company: 

 

 

 

Rigel Pharmaceuticals, Inc.

 

 

 

 

 

By:

 

 

 

 

 

Name

 

 

 

 

 

Title:

 

 

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Notice of Exercise

 

(1)                                  The undersigned hereby:

 

[          ]                                  elects to purchase              
shares of Common Stock of the Company pursuant to the terms of the attached
Warrant, and tenders herewith payment of the purchase price of such shares in
full, together with all applicable transfer taxes, if any.

 

[          ]                                  elects to exercise its net
issuance rights pursuant to Section 4 of the attached Warrant with respect to
              shares of Common Stock, and shall tender payment of all applicable
transfer taxes, if any.

 

(2)                                  Please issue a certificate or certificates
representing said shares of Common Stock in the name of the undersigned or in
such other name as is specified below:

 

 

(Name)

 

 

 

 

(Address)

 

(3)                                  The undersigned represents that the
aforesaid shares are being acquired for the account of the undersigned for
investment and not with a view to, or for resale in connection with, the
distribution thereof and that the undersigned has no present intention of
distributing or reselling such shares, all except as in compliance with
applicable securities laws.

 

 

 

 

(Date)

(Signature)

 

 

 

(Print name)

 

 

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Assignment

 

For value received

 

 hereby sells, assigns and transfers unto

 

 

 

 

[Please print or type the name and address of Assignee]

 

the within Warrant, and does hereby irrevocably constitute and appoint

 

 its attorney to

transfer the within Warrant on the books of the within named Company with full
power of substitution on the premises.

 

Dated:

 

 

 

 

 

In the Presence of:

 

 

 

 

 

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