[*] = 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.


 


1

















 


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 


 


2

















 


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

  



 


 


3

















 


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.