**Exhibit 10.7B**

 

**AMENDMENTNO. THREETO BUILD-TO-SUIT LEASE**

** **

**THIS AMENDMENT NO. THREE** (“Amendment”) is made and enteredinto as of July 24, 2006, effective as of May 1, 2006 (the “Effective Date”),by and between **SLOUGH BTC, LLC**, a Delawarelimited liability company (“Landlord”) and **RIGELPHARMACEUTICALS, INC.**, a Delaware corporation (“Tenant”).

 

**RECITALS**

 

**A.**            Landlordand 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 toBuild-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 FirstAmendment 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 1180Veterans Boulevard, containing approximately 146,923 square feet in theaggregate, in the Britannia Oyster Point business park, South San Francisco,California.

 

**B.**            Theparties wish to amend the Lease, effective as of the Effective Date, to providefor, *inter alia*, (i) a deferral of certainamounts of rent which would otherwise fall due during 2006 and 2007, (ii) termsfor the future payment of such deferred rent, and (iii) issuance of a newwarrant to Landlord or its nominee, all subject to the terms and conditions setforth herein.

 

**C.**            Unlessotherwise defined herein, all capitalized terms have the meanings assigned tothem in the Lease.

 

**THEREFORE**, for good and valuable consideration, the receipt andsufficiency of which are hereby acknowledged, the parties agree as follows:

 

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

 

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applicable Deferred Rentamount is either actually paid or converted to an Amortizable Balance (as of December31, 2008) in accordance with Paragraph 3 below, as illustrated in **Exhibit B** attached hereto andincorporated herein by this reference, whichever occurs first.

 

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

 

**3.****            ****Paymentof Deferred Rent****.**  The Deferred Rent, together with interestthereon as provided in Paragraph 1 above, shall be repaid by Tenant, asadditional rent under the Lease, in accordance with the provisions of thisParagraph 3.  All payments made by Tenantpursuant to this Paragraph 3 shall be applied first to accrued interest on theDeferred Rent, then to the principal amount of the Deferred Rent.  In the case of any such payment made prior toJanuary 1, 2009, the crediting of such payment against the principal amount ofthe Deferred Rent shall be applied in chronological order (oldest deferred amountsfirst).  In the case of any such paymentmade after amortization payments have commenced on January 1, 2009 pursuant tosubparagraph (a) below, there shall be a recalculation of the requiredamortization payments (after giving effect to the prepayment) as provided inthe final sentence of such subparagraph (a).

 

**(a)****          ****AmortizedRepayment****.**  If the Deferred Rent and interest accruedthereon have not been paid in full by December 31, 2008, the entire thenoutstanding balance of Deferred Rent and interest accrued thereon(collectively, the “Amortizable Balance”) shall be repaid by Tenant, asadditional rent under the Lease, in equal monthly installments amortized overfour (4) years, including interest at nine percent (9%) per annum on the unpaidportion of the Amortizable Balance remaining outstanding from time totime.  A calculation of the AmortizableBalance as of January 1, 2009 and of the required monthly amortization paymentbased on such Amortizable Balance, assuming no prepayment of any Deferred Rentor 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 bedue, together with minimum monthly rent otherwise payable under the Lease, onthe first day of each calendar month beginning January 1, 2009 and continuingthrough December 1, 2012.  In the eventof any prepayment after December 31, 2008 of less than the entire thenremaining balance of Deferred Rent and interest thereon, the Amortizable Balanceshall be recalculated (after giving effect to such prepayment) and the requiredmonthly amortization payment under this Paragraph 3(a) and **Exhibit B**shall be recalculated to provide for a level amortization of such recalculatedAmortizable Balance, with interest at nine percent (9%) per annum, over thenumber of full calendar months remaining from the date of such prepayment(beginning with the first full calendar month following the actual prepaymentdate) through and including December 2012.

 

**(b)****          ****VoluntaryPrepayment****.**  The Deferred Rent and interest accruedthereon may be prepaid by Tenant at any time, without penalty, in Tenant’s solediscretion.

 

2

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**4.****            ****No Other Modifications****.**  Except asotherwise expressly provided herein, the terms and provisions of the Lease areunmodified and remain in full force and effect.

 

**IN WITNESS WHEREOF**, the parties have executed this Amendment No. Threeas 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

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**EXHIBITA**

 

**AdjustedMinimum Rent Schedule**

 

Pursuantto Paragraph 1 of the foregoing Amendment, the schedule of current monthlyminimum rental payments for Months 40 through 59 of the Lease term is modifiedto 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  |   |

 

Month60 and all subsequent months are unchanged, subject to Tenant’s obligation torepay (as additional rent) the deferred rent and interest thereon as providedin Paragraph 3 of the Amendment.

 

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**EXHIBITB**

 

**Calculationof Amortizable Balance and Amortization Payment**

 
| ** ** | ** ** | ** **         | ** ** | **Cumulative**                   | ** ** | **Interest (Monthly** | ** ** | **Cumulative**       | ** ** |
|------------|------------|--------------------|------------|----------------------------------|------------|-----------------------|------------|----------------------|------------|
| ** ** | ** ** | **Principal Amt.** | ** ** | **Deferred P&I as**          | ** ** | **Compounding at**    | ** ** | **Deferred P&I** | ** ** |
| **Month**  | ** ** | **Deferred Rent**  | ** ** | **of 1****st**** 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

 

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**EXHIBITC**

 

**Form ofWarrant**

 

[Seeattached form.]

 

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THE SECURITIESREPRESENTED 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 RESTRICTIONSON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPTAS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANTTO REGISTRATION OR EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL INFORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANYPROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLESTATE SECURITIES LAWS.

 

**COMMON STOCK PURCHASE WARRANT**

 
| **Warrant No. CS-[   ]** |   | 100,000 Shares |
|----------------------------------------------|--------|----------------|

July 24,2006

 

**RIGEL PHARMACEUTICALS, INC.**

 

**WARRANT FOR THE PURCHASE OF SHARES OFCOMMON STOCK**

 

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

 

**2.             PurchasePrice; Number of Shares**.  The registered holder of thisWarrant (the *“Holder”*),commencing on the date hereof, is entitled upon surrender of this Warrant withthe subscription form annexed hereto duly executed, at the principal office ofthe Company, to purchase from the Company one hundred thousand (100,000) fullypaid 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 exercisedin full or expires, the Purchase Price and the securities issuable uponexercise of this Warrant are subject to adjustment as hereinafterprovided.  The person or persons underwhose name or names any certificate representing shares of Common Stock isissued hereunder shall be deemed to have become the holder of record of theshares represented thereby as at the close of business on the date this Warrantis exercised with respect to such shares, whether or not the transfer books ofthe Company shall be closed.

 

**3.             Paymentof Purchase Price**.  The Purchase Price may be paid (i) incash or by check; (ii) by the surrender by the Holder to the Company ofany promissory notes or other obligations issued by the Company, with all suchnotes and obligations so surrendered being credited against the Purchase Pricein an amount equal to the principal amount thereof plus accrued interest to thedate of surrender; or (iii) by any combination of the foregoing.

 

**4.             NetIssue Election**.  The Holder may elect to receive, without thepayment by the Holder of any additional consideration, shares of Common Stockequal to the value of this Warrant or any portion hereof by the surrender ofthis Warrant or such portion to the Company, with the net issue election noticeannexed hereto duly executed, at the principal office of the Company.  Thereupon, the Company shall issue to theHolder such number of fully paid and nonassessable shares of Common Stock as iscomputed 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             |

 

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|   |   |   | 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.                                    |

 

*“FairMarket Value”* ofa share of Common Stock as of a particular date (the *“DeterminationDate”*) shall mean the average of the closing or last reported saleprices of the Common Stock as reported on the Nasdaq National Market over the30-day period ending five business days prior to the Determination Date;*provided, however,* that (i) if theCommon Stock is neither traded on the Nasdaq National Market nor on a nationalsecurities exchange, then Fair Market Value shall be the average of the closingor last reported sale prices of the Common Stock over the 30-day period endingfive business days prior to the Determination Date reflected in theover-the-counter market, as reported by the National Quotation Bureau, Inc.or any organization performing a similar function, or if closing prices are notthen routinely reported for the over-the-counter market, the average of thelast bid and asked prices of the Common Stock over the 30-day period endingfive business days prior to the Determination Date, and (ii) if there isno public market for the Common Stock, then Fair Market Value shall bedetermined in good faith by the Company’s Board of Directors.

 

**5.             PartialExercise**.  This Warrant may be exercised in part, andthe Holder shall be entitled to receive a new warrant, which shall be dated asof the date of this Warrant, covering the number of shares in respect of whichthis Warrant shall not have been exercised.

 

**6.             FractionalShares**.  In no event shall any fractional share ofCommon Stock be issued upon any exercise of this Warrant.  If, upon exercise of this Warrant as anentirety, the Holder would, except as provided in this Section 6, beentitled to receive a fractional share of Common Stock, then the Company shallpay in lieu thereof, the Fair Market Value of such fractional share in cash.

 

**7.             ExpirationDate**.  This Warrant or any Successor Warrant (asdefined in Section 10 below) shall remain exercisable until the close ofbusiness on July 24, 2013, when it shall expire and thereafter be void.

 

**8.             ReservedShares; Valid Issuance**.  The Company covenants that itwill at all times from and after the date hereof reserve and keep availablesuch number of its authorized shares of Common Stock, free from all preemptiveor similar rights therein, as will be sufficient to permit the exercise of thisWarrant in full into shares of Common Stock upon such exercise.  The Company further covenants that suchshares as may be issued pursuant to such exercise will, upon issuance, be dulyand validly issued, fully paid and nonassessable and free from all taxes, liensand charges with respect to the issuance thereof.

 

**9.             StockSplits and Dividends**.  If after the date hereof the Company shallsubdivide the Common Stock, by split-up or otherwise, or combine the CommonStock, or issue additional shares of Common Stock in payment of a stockdividend on the Common Stock, the number of shares of Common Stock issuable onthe exercise of this Warrant shall forthwith be proportionately increased in thecase of a subdivision or stock dividend, or proportionately decreased in thecase of a combination, and the Purchase Price shall forthwith beproportionately decreased in the case of a subdivision or stock dividend, orproportionately increased in the case of a combination.

 

**10.          Mergers and Reclassifications**.

 

**(a)**           Ifafter the date hereof the Company shall enter into any Reorganization (ashereinafter defined), then, as a condition of such Reorganization, lawfulprovisions shall be made, and duly executed documents evidencing the same fromthe Company or its successor shall be delivered to the Holder (a *“Successor Warrant”*), so that the Holder shall thereafterhave the right to purchase, at a total price not to exceed that payable uponthe exercise of this Warrant in full, the kind and amount of shares of stockand other securities and property receivable upon such Reorganization by aholder of the number of shares of Common Stock which might have been purchasedby the Holder immediately prior to such Reorganization, and in any such caseappropriate provisions shall be made

 

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with respect to therights and interest of the Holder to the end that the provisions hereof(including without limitation, provisions for the adjustment of the PurchasePrice and the number of shares issuable hereunder and the provisions relatingto the net issue election) shall thereafter be applicable in relation to anyshares of stock or other securities and property thereafter deliverable uponexercise hereof.

 

**(b)**          Forthe purposes of this Section 10:

 

(i)            the term *“AcquisitionTransaction”* shall include without limitation any consolidation ofthe Company with, or merger of the Company into, another corporation or otherbusiness organization (other than a merger in which the Company is thesurviving corporation and which does not result in any reclassification orchange of the outstanding Common Stock); and

 

(ii)           the term *“Reorganization”*shall include without limitation any reclassification, capital reorganizationor change of the Common Stock (other than as a result of a subdivision,combination or stock dividend provided for in Section 9 hereof), anAcquisition Transaction, or any sale or conveyance to another corporation orother business organization of all or substantially all of the assets of theCompany.

 

**11.          Certificateof Adjustment**.  Whenever the Purchase Price is adjusted, asherein provided, the Company shall promptly deliver to the Holder a certificateof the Company’s Chief Financial Officer setting forth the Purchase Price aftersuch adjustment and setting forth a brief statement of the facts requiring suchadjustment.

 

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

 

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

 

**(b)          **any reclassification of the capital stockof the Company, capital reorganization of the Company, consolidation or mergerinvolving the Company, or sale or conveyance of all or substantially all of itsassets; or

 

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

 

then in each such eventthe Company will provide or cause to be provided to the Holder a written noticethereof.  Such notice shall be providedat least fifteen (15) calendar days prior to the date specified in suchnotice on which any such action is to be taken.

 

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

 

**(a)          **The Company has all necessary authorityto issue, execute and deliver this Warrant and to perform its obligationshereunder.  This Warrant has been dulyauthorized, issued, executed and delivered by the Company and is the valid andbinding 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 enforcementof Holder’s rights or by general equity principles or public policy concerns.

 

**(b)          **The shares of Common Stock issuable uponthe exercise of this Warrant have been duly authorized and reserved forissuance 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 ofthis Warrant do not, and the issuance of the shares of Common Stock upon theexercise of this Warrant in accordance with the terms hereof will not, (i) violateor contravene the Company’s Amended and Restated Certificate of Incorporationor by-laws, or any law, statute,

 

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

 

**14.          Amendmentand Waiver**.  The terms of this Warrant may be amended,modified or waived only with the written consent of the party against whichenforcement of the same is sought.

 

**15.          Representationsand Covenants of the Holder**.  This CommonStock Purchase Warrant has been entered into by the Company in reliance uponthe following representations and covenants of the Holder, which by itsacceptance hereof the Holder hereby confirms:

 

**(a)           InvestmentPurpose**.  The right to acquire Common Stock or the CommonStock issuable upon exercise of the Holder’s rights contained herein will beacquired for investment and not with a view to the sale or distribution of anypart thereof, and the Holder has no present intention of selling or engaging inany public distribution of the same except pursuant to a registration orexemption.

 

**(b)           AccreditedInvestor**.  Holder is an “accredited investor” within themeaning of the Securities and Exchange Commission’s Rule 501 ofRegulation D, as presently in effect.

 

**(c)           PrivateIssue**.  The Holder understands (i) that theCommon Stock issuable upon exercise of the Holder’s rights contained herein isnot registered under the 1933 Act or qualified under applicable statesecurities laws on the ground that the issuance contemplated by this Warrantwill be exempt from the registration and qualifications requirements thereofand (ii) that the Company’s reliance on such exemption is predicated onthe representations set forth in this Section 15.

 

**(d)           FinancialRisk**.  The Holder has such knowledge and experiencein financial and business matters as to be capable of evaluating the merits andrisks of its investment and has the ability to bear the economic risks of itsinvestment.

 

**16.          Notices, Transfers, Etc.**

 

**(a)          **Any notice or written communicationrequired or permitted to be given to the Holder may be given by certified mallor delivered to the Holder at the address most recently provided by the Holderto the Company.

 

**(b)          **Subject to compliance with applicablefederal and state securities laws, this Warrant may be transferred by theHolder with respect to any or all of the shares purchasable hereunder.  Upon surrender of this Warrant to theCompany, together with the assignment notice annexed hereto duly executed, fortransfer of this Warrant as an entirety by the Holder, the Company shall issuea new warrant of the same denomination to the assignee.  Upon surrender of this Warrant to theCompany, together with the assignment hereof properly endorsed, by the Holderfor transfer with respect to a portion of the shares of Common Stockpurchasable hereunder, the Company shall issue a new warrant to the assignee,in such denomination as shall be requested by the Holder hereof, and shallissue to such Holder a new warrant covering the number of shares in respect ofwhich 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 tenorand denomination and deliver the same (i) in exchange and substitution forand upon surrender and cancellation of any mutilated Warrant or (ii) inlieu of any Warrant lost, stolen or destroyed, upon receipt of an affidavit ofthe Holder or other evidence reasonably satisfactory to the Company of theloss, theft or destruction of such Warrant and an indemnification of loss bythe Holder in favor of the Company.

 

**17.          Transferto Comply with the Securities Act of 1933.**   This Warrantmay not be exercised and neither this Warrant nor any of the Shares, nor anyinterest in either, may be offered, sold, assigned, pledged, hypothecated,encumbered or in any other manner transferred or disposed of, in whole or inpart, except in

 

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compliance withapplicable United States federal and state securities laws and the terms andconditions hereof.  Each Warrant shallbear a legend in substantially the same form as the legend set forth on thefirst page of this Warrant.  Eachcertificate for Shares issued upon exercise of this Warrant, unless at the timeof exercise such Shares are acquired pursuant to a registration statement thathas been declared effective under the Securities Act of 1933, as amended (the “SecuritiesAct”), and applicable blue sky laws, shall bear a legend substantially in thefollowing form:

 

THE SECURITIES REPRESENTEDHEREBY 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 RESTRICTIONSON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPTAS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANTTO REGISTRATION OR EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL INFORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANYPROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLESTATE SECURITIES LAWS.

 

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

 

**18.          Rightsof Holder.**  Holder shall not, by virtue hereof, beentitled to any rights of a stockholder of the Company, either at law orequity, and the rights of Holder are limited to those expressed in thisWarrant.  Nothing contained in this Warrantshall be construed as conferring upon Holder hereof the right to vote or toconsent or to receive notice as a stockholder of the Company on any matters orwith respect to any rights whatsoever as a stockholder of the Company.  No dividends or interest shall be payable oraccrued in respect of this Warrant or the interest represented hereby or theShares purchasable hereunder until, and only to the extent that, this Warrantshall 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 similartransaction with the same economic effect as a sale of, any Common Stock (orother securities) of the Company held by Holder for a period specified by arepresentative of the underwriters of Common Stock (or other securities) of theCompany not to exceed ninety (90) days following the effective date of aregistration statement of the Company filed under the Securities Act; *provided*that all officers and directorsof the Company and each holder of that number of shares of Common Stock equalto or greater than the number of Shares then issuable upon exercise of thisWarrant enter into similar agreements.

 

**20.          NoImpairment**.  The Company will not, by amendment of itsCertificate 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 toavoid the observance or performance of any of the terms of this Warrant, butwill at all times in good faith assist in the carrying out of all such termsand in the taking of all such action as may be necessary or appropriate inorder to protect the rights of the Holder.

 

**21.          GoverningLaw**.  The provisions and terms of this Warrantshall be governed by and construed in accordance with the internal laws of theState of California.

 

**22.          Successorsand Assigns**.  This Warrant shall be binding upon theCompany’s successors and assigns and shall inure to the benefit of the Holder’ssuccessors, legal representatives and permitted assigns.

 

**23.          BusinessDays**.  If the last or appointed day for the takingof any action required or the expiration of any rights granted herein shall bea Saturday or Sunday or a legal holiday in California, then such action may be

 

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taken or right may beexercised on the next succeeding day which is not a Saturday or Sunday or sucha legal holiday.

 

**IN WITNESS WHEREOF,** the Company has duly caused this Warrant to be signed by its dulyauthorized 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 |
|            |                                 |                         |  |

 

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**SUBSCRIPTION**

 
| To: |   |   | Date: |   |
|-----|--------|--------|-------|--------|

 

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

 
|   |                  |
|--------|-----------------------|
|   | Signature             |
|   |                  |
|   |                  |
|   | Name for Registration |
|   |                  |
|   |                  |
|   | Mailing Address       |

 

**NET ISSUE ELECTION NOTICE**

 
| To: |   |   | Date: |   |
|-----|--------|--------|-------|--------|

 

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

 
|   |                  |
|--------|-----------------------|
|   | Signature             |
|   |                  |
|   |                  |
|   | Name for Registration |
|   |                  |
|   |                  |
|   | Mailing Address       |

 

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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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