Exhibit 10.7B


 


AMENDMENT
NO. THREE

TO BUILD-TO-SUIT LEASE


 


THIS AMENDMENT NO. THREE (“Amendment”) is made and entered
into as of July 24, 2006, effective as of May 1, 2006 (the “Effective Date”),
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 parties to that certain Build-To-Suit Lease dated as of May 16,
2001 (the “Original Lease”), as amended by the Amendment No. One to
Build-to-Suit Lease dated as of October 18, 2002 (the “First Amendment”)
and by the Amendment No. Two to Build-to-Suit Lease dated as of January 31,
2005 (the “Second Amendment”) (the Original Lease and the First
Amendment and Second Amendment being referred to herein collectively as the “Lease”),
pursuant to which Landlord leases to Tenant, and Tenant leases from Landlord,
the two connected buildings commonly known as 1170 Veterans Boulevard and 1180
Veterans Boulevard, containing approximately 146,923 square feet in the
aggregate, in the Britannia Oyster Point business park, South San Francisco,
California.


 


B.            The
parties wish to amend the Lease, effective as of the Effective Date, to provide
for, inter alia, (i) a deferral of certain
amounts of rent which would otherwise fall due during 2006 and 2007, (ii) terms
for the future payment of such deferred rent, and (iii) issuance of a new
warrant to Landlord or its nominee, 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, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:


 


1.             Deferral of Rent; Adjusted
Current Rental Amount.  A portion of Tenant’s monthly rental
obligation under the Lease for the months from and including May 2006 (Month 40
of the Lease term) through December 2007 (Month 59 of the Lease term) shall be
deferred, subject to repayment in accordance with Paragraph 3 below, and Tenant’s
current monthly rental payment obligation under the Lease shall be
correspondingly reduced.  The amount of
such deferral and reduction (collectively, the “Deferred Rent”) shall be
(a) for the months of May 2006 through December 2006, $250,000 per month (total
deferral of $2,000,000 for remainder of calendar year 2006); and (b) for the
months of January 2007 through November 2007, $333,333 per month, and for the
month of December 2007, $333,337 (total deferral of $4,000,000 for calendar
year 2007).  To reflect such adjustments,
the previously applicable minimum rent schedule under the Lease (as set forth
in Exhibit 1 to the First Amendment) is hereby modified, solely for Months 40
through 59 of the Lease term, to read as set forth in Exhibit A
attached hereto and incorporated herein by this reference, subject to the
obligations set forth in this Amendment with respect to Deferred Rent.  Except as expressly modified in such Exhibit A hereto, such previously
applicable minimum rent schedule shall remain in full force and effect.  Deferred Rent as set forth in this Paragraph
shall accrue interest at the rate of nine percent (9%) per annum, compounded
monthly, from the date the applicable rental installment would have originally
been due (but for this deferral) until the date the 


 

















 


applicable Deferred Rent
amount is either actually paid or converted to an Amortizable Balance (as of December
31, 2008) in accordance with Paragraph 3 below, as illustrated in Exhibit B attached hereto and
incorporated herein by this reference, whichever occurs first.


 


2.             Issuance of Warrant.  Substantially
concurrently with the mutual execution of this Amendment, Tenant shall execute,
issue and deliver to Landlord or Landlord’s nominee (which Landlord presently
anticipates will be Kwacker Limited, an affiliate of Landlord and the holder of
certain existing warrants previously issued by Tenant pursuant to the Lease), a
Warrant, dated as of the date of execution of this Amendment, in the form
attached hereto as Exhibit C
and incorporated herein by this reference, for 100,000 shares of Tenant’s
Common Stock.  Such Warrant shall be
exercisable at any time from the issue date through the seventh (7th) anniversary of the issue
date, inclusive.  The exercise of such
Warrant shall not result in any credit against payment of Deferred Rent or
accrued interest.  The exercise price per share under such
Warrant, to be inserted at the time of issuance, shall be equal to the higher
of (a) Ten Dollars ($10.00) per share or (b) one hundred ten percent (110%) of
the closing market price per share for Tenant’s Common Stock on the date of
execution of this Amendment.


 


3.             Payment
of Deferred Rent.  The Deferred Rent, together with interest
thereon as provided in Paragraph 1 above, shall be repaid by Tenant, as
additional rent under the Lease, in accordance with the provisions of this
Paragraph 3.  All payments made by Tenant
pursuant to this Paragraph 3 shall be applied first to accrued interest on the
Deferred Rent, then to the principal amount of the Deferred Rent.  In the case of any such payment made prior to
January 1, 2009, the crediting of such payment against the principal amount of
the Deferred Rent shall be applied in chronological order (oldest deferred amounts
first).  In the case of any such payment
made after amortization payments have commenced on January 1, 2009 pursuant to
subparagraph (a) below, there shall be a recalculation of the required
amortization payments (after giving effect to the prepayment) as provided in
the final sentence of such subparagraph (a).


 


(a)           Amortized
Repayment.  If the Deferred Rent and interest accrued
thereon have not been paid in full by December 31, 2008, the entire then
outstanding balance of Deferred Rent and interest accrued thereon
(collectively, the “Amortizable Balance”) shall be repaid by Tenant, as
additional rent under the Lease, in equal monthly installments amortized over
four (4) years, including interest at nine percent (9%) per annum on the unpaid
portion of the Amortizable Balance remaining outstanding from time to
time.  A calculation of the Amortizable
Balance as of January 1, 2009 and of the required monthly amortization payment
based on such Amortizable Balance, assuming no prepayment of any Deferred Rent
or interest prior to January 1, 2009, is set forth in Exhibit B
attached hereto and incorporated herein by this reference.  Such monthly amortization payments shall be
due, together with minimum monthly rent otherwise payable under the Lease, on
the first day of each calendar month beginning January 1, 2009 and continuing
through December 1, 2012.  In the event
of any prepayment after December 31, 2008 of less than the entire then
remaining balance of Deferred Rent and interest thereon, the Amortizable Balance
shall be recalculated (after giving effect to such prepayment) and the required
monthly amortization payment under this Paragraph 3(a) and Exhibit B
shall be recalculated to provide for a level amortization of such recalculated
Amortizable Balance, with interest at nine percent (9%) per annum, over the
number of full calendar months remaining from the date of such prepayment
(beginning with the first full calendar month following the actual prepayment
date) through and including December 2012.


 


(b)           Voluntary
Prepayment.  The Deferred Rent and interest accrued
thereon may be prepaid by Tenant at any time, without penalty, in Tenant’s sole
discretion.


 


2

















 


4.             No Other Modifications.  Except as
otherwise expressly provided herein, the terms and provisions of the Lease are
unmodified and remain in full force and effect.


 


IN WITNESS WHEREOF, the parties have executed this Amendment No. Three
as of the date first set forth above, effective as of the Effective Date.


 


 


	
  LANDLORD:

  	
  SLOUGH
  BTC, LLC,

  
	
   

  	
  a Delaware
  limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  SLOUGH
  ESTATES USA INC.,

  
	
   

  	
   

  	
  a Delaware
  corporation, Its 

  Managing Member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Jonathan M.
  Bergschneider

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
  Senior Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
  TENANT:

  	
  RIGEL
  PHARMACEUTICALS, INC.,

  
	
   

  	
  a Delaware
  corporation

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James M.
  Gower

  
	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Ryan D. Maynard

  
	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  VP and Acting CFO

  



 


Attachments:


	
  Exhibit A

  	
  Adjusted Minimum Rent
  Schedule

  
	
  Exhibit B

  	
  Calculation of
  Amortizable Balance and Amortization Payment

  
	
  Exhibit C

  	
  Form of Warrant

  



 


3

















 


EXHIBIT
A


 


Adjusted
Minimum Rent Schedule


 


Pursuant
to Paragraph 1 of the foregoing Amendment, the schedule of current monthly
minimum rental payments for Months 40 through 59 of the Lease term is modified
to read as follows:


 


	
  Months

  	
   

  	
  Previously Scheduled

  Monthly Rent (per

  Lease)

  	
   

  	
  Deferred Monthly

  Rent (per

  Amendment)

  	
   

  	
  Modified “Current”

  Monthly Rent

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  040 – 047 (May 06 – Dec 06)

  	
   

  	
  $

  	
  1,094,393

  	
   

  	
  $

  	
  250,000

  	
   

  	
  $

  	
  844,393

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  048 (Jan 07)

  	
   

  	
  $

  	
  1,094,393

  	
   

  	
  $

  	
  333,333

  	
   

  	
  $

  	
  761,060

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  049 – 058 (Feb 07 – Nov 07)

  	
   

  	
  $

  	
  1,128,917

  	
   

  	
  $

  	
  333,333

  	
   

  	
  $

  	
  795,584

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  059 (Dec 07)

  	
   

  	
  $

  	
  1,128,917

  	
   

  	
  $

  	
  333,337

  	
   

  	
  $

  	
  795,580

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  060 (Jan 08)

  	
   

  	
  $

  	
  1,128,917

  	
   

  	
  none

  	
   

  	
  no change

  	
   

  



 


Month
60 and all subsequent months are unchanged, subject to Tenant’s obligation to
repay (as additional rent) the deferred rent and interest thereon as provided
in Paragraph 3 of the Amendment.


 

















 


EXHIBIT
B


 


Calculation
of Amortizable Balance and Amortization Payment


 


	
   

  	
   

  	
   

  	
   

  	
  Cumulative

  	
   

  	
  Interest (Monthly

  	
   

  	
  Cumulative

  	
   

  
	
   

  	
   

  	
  Principal Amt.

  	
   

  	
  Deferred P&I as

  	
   

  	
  Compounding at

  	
   

  	
  Deferred P&I

  	
   

  
	
  Month

  	
   

  	
  Deferred Rent

  	
   

  	
  of 1st of Month

  	
   

  	
  9% p.a. (.7207%))

  	
   

  	
  at Month-End

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Apr 06

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  
	
  May 06

  	
   

  	
  250,000

  	
   

  	
  250,000

  	
   

  	
  1,802

  	
   

  	
  251,802

  	
   

  
	
  June 06

  	
   

  	
  250,000

  	
   

  	
  501,802

  	
   

  	
  3,616

  	
   

  	
  505,418

  	
   

  
	
  July 06

  	
   

  	
  250,000

  	
   

  	
  755,418

  	
   

  	
  5,444

  	
   

  	
  760,863

  	
   

  
	
  Aug 06

  	
   

  	
  250,000

  	
   

  	
  1,010,863

  	
   

  	
  7,285

  	
   

  	
  1,018,148

  	
   

  
	
  Sept 06

  	
   

  	
  250,000

  	
   

  	
  1,268,148

  	
   

  	
  9,140

  	
   

  	
  1,277,287

  	
   

  
	
  Oct 06

  	
   

  	
  250,000

  	
   

  	
  1,527,287

  	
   

  	
  11,007

  	
   

  	
  1,538,295

  	
   

  
	
  Nov 06

  	
   

  	
  250,000

  	
   

  	
  1,788,295

  	
   

  	
  12,888

  	
   

  	
  1,801,183

  	
   

  
	
  Dec 06

  	
   

  	
  250,000

  	
   

  	
  2,051,183

  	
   

  	
  14,783

  	
   

  	
  2,065,966

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Jan 07

  	
   

  	
  333,333

  	
   

  	
  2,399,299

  	
   

  	
  17,292

  	
   

  	
  2,416,591

  	
   

  
	
  Feb 07

  	
   

  	
  333,333

  	
   

  	
  2,749,924

  	
   

  	
  19,819

  	
   

  	
  2,769,743

  	
   

  
	
  Mar 07

  	
   

  	
  333,333

  	
   

  	
  3,103,076

  	
   

  	
  22,364

  	
   

  	
  3,125,440

  	
   

  
	
  Apr 07

  	
   

  	
  333,333

  	
   

  	
  3,458,773

  	
   

  	
  24,927

  	
   

  	
  3,483,701

  	
   

  
	
  May 07

  	
   

  	
  333,333

  	
   

  	
  3,817,034

  	
   

  	
  27,509

  	
   

  	
  3,844,543

  	
   

  
	
  June 07

  	
   

  	
  333,333

  	
   

  	
  4,177,877

  	
   

  	
  30,110

  	
   

  	
  4,207,987

  	
   

  
	
  July 07

  	
   

  	
  333,333

  	
   

  	
  4,541,320

  	
   

  	
  32,729

  	
   

  	
  4,574,049

  	
   

  
	
  Aug 07

  	
   

  	
  333,333

  	
   

  	
  4,907,383

  	
   

  	
  35,368

  	
   

  	
  4,942,750

  	
   

  
	
  Sept 07

  	
   

  	
  333,333

  	
   

  	
  5,276,083

  	
   

  	
  38,025

  	
   

  	
  5,314,108

  	
   

  
	
  Oct 07

  	
   

  	
  333,333

  	
   

  	
  5,647,442

  	
   

  	
  40,701

  	
   

  	
  5,688,143

  	
   

  
	
  Nov 07

  	
   

  	
  333,333

  	
   

  	
  6,021,476

  	
   

  	
  43,397

  	
   

  	
  6,064,873

  	
   

  
	
  Dec 07

  	
   

  	
  333,337

  	
   

  	
  6,398,210

  	
   

  	
  46,112

  	
   

  	
  6,444,322

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Jan 08

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  46,444

  	
   

  	
  6,490,766

  	
   

  
	
  Feb 08

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  46,779

  	
   

  	
  6,537,545

  	
   

  
	
  Mar 08

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  47,116

  	
   

  	
  6,584,661

  	
   

  
	
  Apr 08

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  47,456

  	
   

  	
  6,632,117

  	
   

  
	
  May 08

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  47,797

  	
   

  	
  6,679,914

  	
   

  
	
  June 08

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  48,143

  	
   

  	
  6,728,057

  	
   

  
	
  July 08

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  48,489

  	
   

  	
  6,776,546

  	
   

  
	
  Aug 08

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  48,838

  	
   

  	
  6,825,384

  	
   

  
	
  Sept 08

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  49,191

  	
   

  	
  6,874,575

  	
   

  
	
  Oct 08

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  49,545

  	
   

  	
  6,924,120

  	
   

  
	
  Nov 08

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  49,902

  	
   

  	
  6,974,022

  	
   

  
	
  Dec 08

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  50,262

  	
   

  	
  7,024,284

  	
   

  



 


Amortization of $7,024,284 over 4 years at 9% interest = $173,498/mo


 

















 


EXHIBIT
C


 


Form of
Warrant


 


[See
attached form.]


 
















 


THE SECURITIES
REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE.  THESE SECURITIES ARE SUBJECT TO RESTRICTIONS
ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT
AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT
TO REGISTRATION OR EXEMPTION THEREFROM. 
THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN
FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY
PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE
STATE SECURITIES LAWS.


 


COMMON STOCK PURCHASE WARRANT


 


	
  Warrant No. CS-[   ]

  	
   

  	
  100,000 Shares

  



July 24,
2006


 


RIGEL PHARMACEUTICALS, INC.


 


WARRANT FOR THE PURCHASE OF SHARES OF
COMMON STOCK


 


1.             Issuance. 
For value received, this Warrant is issued to KWACKER LIMITED, a corporation organized and existing under
the laws of England, by RIGEL
PHARMACEUTICALS, INC., a Delaware corporation (hereinafter with its
successors called the “Company”),
in partial consideration for that certain Amendment No. Three to
Build-to-Suit Lease, dated as of the date hereof, between the Company and
Slough BTC, LLC, as landlord (“Amendment Three”).


 


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 one hundred thousand (100,000) 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
$0.57 (the “Purchase Price”).  Until such time as this Warrant is exercised
in full or expires, the Purchase 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 of Common Stock is
issued hereunder 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 may be paid (i) in
cash or by check; (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 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; or (iii) by any combination of the foregoing.


 


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 Purchase 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 (i) if 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.


 


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.  This Warrant or any Successor Warrant (as
defined in Section 10 below) shall remain exercisable until the close of
business on July 24, 2013, when it shall expire and thereafter be void.


 


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.  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, or combine the Common
Stock, or issue additional shares of Common Stock in payment of a stock
dividend on the Common Stock, the number of shares of Common Stock issuable on
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 Purchase 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 which 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 Purchase
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.


 


(b)          For
the purposes of this Section 10:


 


(i)            the term “Acquisition
Transaction” shall include without limitation 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); and


 


(ii)           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), an
Acquisition Transaction, 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 Purchase 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 Purchase 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 fifteen (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 Holder’s rights or by general equity principles or public policy concerns.


 


(b)           The shares of Common Stock issuable upon
the exercise of this Warrant 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.


 


(c)           The issuance, execution and delivery of
this Warrant do not, and the issuance of the shares of Common Stock upon the
exercise of this Warrant in accordance with the terms hereof will not, (i) violate
or contravene the Company’s Amended and Restated Certificate of Incorporation
or by-laws, or any law, statute,


 

















 


regulation, rule,
judgment or order applicable to the Company, (ii) violate, contravene or
result in a breach or default under any material contract, agreement or
instrument to which the Company is a party or by which the Company or any of
its assets are bound or (iii) require the consent or approval of or the
filing of any notice or registration with any person or entity.


 


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 Common
Stock Purchase Warrant has been entered into by the Company in reliance upon
the following representations and covenants of the Holder, which by its
acceptance hereof the Holder hereby confirms:


 


(a)           Investment
Purpose.  The right to acquire Common Stock or the Common
Stock issuable upon exercise of the Holder’s rights contained herein will be
acquired for investment and not with a view to the sale or distribution of any
part thereof, and the Holder has no present intention of selling or engaging in
any public distribution of the same except pursuant to a registration or
exemption.


 


(b)           Accredited
Investor.  Holder is an “accredited investor” within the
meaning of the Securities and Exchange Commission’s Rule 501 of
Regulation D, as presently in effect.


 


(c)           Private
Issue.  The Holder understands (i) that the
Common Stock issuable upon exercise of the Holder’s rights contained herein is
not registered under the 1933 Act or qualified under applicable state
securities laws on the ground that the issuance contemplated by this Warrant
will be exempt from the registration and qualifications requirements thereof
and (ii) that the Company’s reliance on such exemption is predicated on
the representations set forth in this Section 15.


 


(d)           Financial
Risk.  The Holder has such knowledge and experience
in financial and business matters as to be capable of evaluating the merits and
risks of its investment and has the ability to bear the economic risks of its
investment.


 


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, 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 of Common Stock
purchasable hereunder, 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.


 


(c)           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 of 1933.   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 of 1933, as amended (the “Securities
Act”), and applicable blue sky laws, shall bear a legend substantially in the
following form:


 


THE SECURITIES REPRESENTED
HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE.  THESE SECURITIES ARE SUBJECT TO RESTRICTIONS
ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT
AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT
TO REGISTRATION OR EXEMPTION THEREFROM. 
THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN
FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY
PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE
STATE SECURITIES LAWS.


 


Any certificate for any Shares issued at any time in
exchange or substitution for any certificate for any Shares bearing such legend
(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 legend 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 legend and all
subsequent holders of this Warrant, if any.


 


18.          Rights
of Holder.  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 Holder are limited to those expressed in this
Warrant.  Nothing contained in this Warrant
shall be construed as conferring upon Holder hereof the right to vote or 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.  “Market Stand Off” Agreement. 
Holder hereby agrees not to sell, transfer, make any short sale of,
grant any option for the purchase of, or enter into any hedging or similar
transaction with the same economic effect as a sale of, any Common Stock (or
other securities) of the Company held by Holder for a period specified by a
representative of the underwriters of Common Stock (or other securities) of the
Company not to exceed ninety (90) days following the effective date of a
registration statement of the Company filed under the Securities Act; provided that all officers and directors
of the Company and each holder of that number of shares of Common Stock equal
to or greater than the number of Shares then issuable upon exercise of this
Warrant enter into similar agreements.


 


20.          No
Impairment.  The Company will not, by amendment of its
Certificate 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 or 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.


 


21.          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.


 


22.          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.


 


23.          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 which is not a Saturday or Sunday or such
a legal holiday.


 


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:

  	
  /s/ James M. Gower

  
	
   

  	
   

  	
  James M. Gower

  
	
   

  	
   

  	
  Chief Executive Officer

  
				



 

















 


SUBSCRIPTION


 


	
  To:

  	
   

  	
   

  	
  Date:

  	
   

  



 


The
undersigned hereby subscribes for                
shares of Common Stock covered by this Warrant. 
The certificate(s) for such shares shall be issued in the name of
the undersigned or as otherwise indicated below:


 


	
   

  	
   

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name for Registration

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Mailing Address

  



 


NET ISSUE ELECTION NOTICE


 


	
  To:

  	
   

  	
   

  	
  Date:

  	
   

  



 


The
undersigned hereby elects under Section 4 to surrender the right to
purchase                    
shares of Common Stock pursuant to this Warrant.  The certificate(s) for such shares
issuable upon such net issue election shall be issued in the name of the
undersigned or as otherwise indicated below:


 


	
   

  	
   

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name for Registration

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Mailing Address

  



 
















 


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: