**EXHIBIT 10.1**

 

**AMENDMENT NO. FOURTO BUILD-TO-SUIT LEASE**

** **

**THIS AMENDMENT NO. FOUR** (“Amendment”)is made and entered into as of March 31, 2009, effective as of February 1,2009 (the “Effective Date”), by and between **HCP BTC, LLC** (formerly known as 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 certainBuild-To-Suit Lease dated as of May 16, 2001 (the “Original Lease”),as amended by Amendment No. One to Build-to-Suit Lease dated as of October 18,2002 (the “First Amendment”), by Amendment No. Two to Build-to-SuitLease dated as of January 31, 2005 (the “Second Amendment”), and byAmendment No. Three to Build-to-Suit Lease dated as of July 24, 2006(the “Third Amendment”) (the Original Lease and the First Amendment, SecondAmendment and Third 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.**            The Third Amendment provided for the deferral of aportion of Tenant’s monthly rental obligation for the months from and includingMay 2006 through December 2007; for the conversion of such deferredrent, together with interest accrued thereon, to an “Amortizable Balance” (asdefined in the Third Amendment) as of December 31, 2008; and for therepayment of such Amortizable Balance by Tenant over a period of four (4) yearsbeginning in January 2009 pursuant to a repayment schedule prescribed inthe Third Amendment.

 

**C.**            The Amortizable Balance as of December 31, 2008 was$7,024,284.  Tenant made one amortizationpayment with respect to such Amortizable Balance in January 2009.

 

**D.**            The parties wish to amend the Lease, effective as of theEffective Date, to provide for, *inter alia*, (i) adeferral of repayment of the remaining portion of the Amortizable Balance(redefined below for purposes of this Amendment as the “Deferral Amount”), (ii) arevised set of terms governing payment of the unpaid balance of such DeferralAmount, and (iii) the cancellation of an existing warrant and issuance of anew warrant to Landlord or its nominee, all subject to the terms and conditionsset forth herein.

 

**E.**             Unless otherwise defined herein, all capitalized termshave the meanings assigned to them in the Lease.

 

**THEREFORE**, for good and valuableconsideration, the receipt and sufficiency of which are hereby acknowledged, theparties agree as follows:

 

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**1.             Calculationand Payment of Deferral Amount.**

 

**(a)          **Theparties agree that the remaining Amortizable Balance as of the Effective Datewas $6,850,786 (the “Deferral Amount”).  The unpaid balance of the Deferral Amountshall be deemed to increase at the rate of twelve percent (12%) per annum, compoundedmonthly, during the Delay Period as defined below (the Deferral Amount, as soincreased from time to time, being sometimes referred to herein as the “AdjustedDeferral Amount” and the amount by which the Adjusted Deferral Amount fromtime to time exceeds the initial Deferral Amount as specified above beingsometimes referred to herein as the “Delay Period Adjustment Amount”).  For purposes of this Amendment, the term “DelayPeriod” means the period from and including the Effective Date until andincluding the earlier of (i) June 30, 2010 or (ii) the date the AdjustedDeferral Amount has been paid in full by Tenant.

 

**(b)          **Tenantshall pay the Adjusted Deferral Amount, together with accrued interest (if any)pursuant to this subparagraph (b), in accordance with the provisions ofthis subparagraph (b).  Paymentsmade by Tenant under the Lease shall be applied first to Tenant’s monetaryobligations due or past due under the Lease otherthan pursuantto this subparagraph (b) (including, but not limited to, Tenant’sobligations for payment of monthly minimum rent, Operating Expenses, andadditional rent payable under any applicable provisions of the Lease as itexisted prior to Amendment No. Three), and shall be applied to Tenant’sobligations under this subparagraph (b) only after all such other monetaryobligations are current.  All amountspaid or payable by Tenant pursuant to this subparagraph (b) shall constituteadditional rent under the Lease and, when paid and properly applicable toTenant’s obligations under this subparagraph (b), shall be applied firstto accrued interest (if any) pursuant to the provisions of thissubparagraph (b), then to the Delay Period Adjustment Amount, and then tothe remaining balance of the Adjusted Deferral Amount.

 

**(i)           **Except as expressly provided insubparagraph (b)(ii), (iii), (iv) or (v) below (if applicable),Tenant shall not be required to make any repayment with respect to the AdjustedDeferral Amount prior to July 1, 2010. If as of June 30, 2010 the Adjusted Deferral Amount has not beenpaid in full and none of the events described in subparagraph (b)(ii), (iii) or(iv) below has occurred, then (A) on July 1, 2010, Tenant shall makea lump-sum payment to Landlord in an amount equal to the then applicable DelayPeriod Adjustment Amount (which amount the parties agree will be $1,262,630 asof June 30, 2010 if there are no prepayments of any portion of the AdjustedDeferral Amount prior to that date), and (B) Tenant shall pay the entire remainingbalance of the Adjusted Deferral Amount (which should, in the absence of anyprepayments, be equal to the initial Deferral Amount as specified above) inequal monthly installments of $173,498 per month for forty-seven (47) months (thesame payment terms previously in effect under the Third Amendment), includinginterest accruing at nine percent (9%) per annum from July 1, 2010 on theunpaid portion of the Adjusted Deferral Amount remaining outstanding from timeto time.  Such monthly payments shall be due, together with all minimum monthlyrent and all other additional rent otherwise payable under the Lease, on thefirst day of each calendar month beginning on July 1, 2010 and continuingthrough and including May 1, 2014.  The rent schedule set forth in **Exhibit A** attached hereto andincorporated herein by this reference sets forth, for purposes of illustration,the modified rent schedule that would be applicable under this Amendment ifthis subparagraph (b)(i) applies and no prepayments of the AdjustedDeferral Amount are made by Tenant prior to July 1, 2010.  In the event of any prepayment after 

 

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June 30, 2010 of less than the entirethen remaining balance of the Adjusted Deferral Amount and interest thereon,the unpaid Adjusted Deferral Amount and accrued interest shall be recalculated(after giving effect to such prepayment) and the required monthly amortizationpayment under this subparagraph (b)(i) shall be recalculated toprovide for a level amortization of such recalculated Adjusted Deferral Amount,with interest at nine percent (9%) per annum, compounded monthly, 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 May 2014.

 

**(ii)          **Ifa Capital Event (as defined below) occurs prior to July 1, 2010 and the TransactionConsideration (as defined below) received pursuant to or in connection withsuch Capital Event is $200 million or more, then within forty-five (45) businessdays after the closing of such Capital Event, Tenant shall pay Landlord alump-sum payment equal to the entire then outstanding Adjusted Deferral Amount,in full and final satisfaction of Tenant’s payment obligations under thissubparagraph (b).

 

**(iii)        **Ifa Capital Event occurs prior to July 1, 2010 and the TransactionConsideration received pursuant to or in connection with such Capital Event isless than $200 million but greater than or equal to $100 million, then (A) withinforty-five (45) business days after the closing of such Capital Event, Tenantshall pay Landlord a lump-sum payment equal to fifty percent (50%) of the thenoutstanding Adjusted Deferral Amount, and (B) on or before July 1,2011, Tenant shall pay Landlord a further lump-sum payment equal to the entireremaining balance of the Adjusted Deferral Amount, which for this purpose shallbe deemed to continue to increase at the rate of twelve percent (12%) perannum, compounded monthly, from the date when the first lump-sum payment wasmade pursuant to clause (A) above through and including June 30,2011, which payments in the aggregate shall constitute full and finalsatisfaction of Tenant’s payment obligations under this subparagraph (b).

 

**(iv)         **Ifa Capital Event occurs prior to July 1, 2010 and the TransactionConsideration received pursuant to or in connection with such Capital Event isless than $100 million but greater than or equal to $50 million, then Tenantshall make payments to Landlord in the same manner and same amounts requiredunder subparagraph (b)(i) above, except that the lump-sum paymentdescribed in clause (A) of subparagraph (b)(i) shall bemade on or before the first day of the calendar month following the month inwhich such Capital Event occurs, and the monthly payments described in clause (B) ofsubparagraph (b)(i) shall commence on the first day of the calendarmonth following the month in which such Capital Event occurs and shall continuefor a total of forty-seven (47) calendar months, including the month in whichthe first such monthly payment is made.

 

**(v)           **Ifmore than one Capital Event occurs prior to July 1, 2010, then theTransaction Consideration received pursuant to or in connection with all suchCapital Events shall be aggregated, on a cumulative basis, for purposes ofapplying subparagraphs (b)(ii), (iii) and (iv) above and thegoverning payment provisions shall be those set forth in the subparagraphapplicable to a Capital Event with Transaction Consideration equal to suchaggregate amount, effective as of the closing of the later or last such CapitalEvent to occur, with Tenant receiving a credit against its payment obligationsunder such governing payment provisions to the extent of any payments alreadymade by Tenant to Landlord pursuant to the earlier-occurring Capital Event(s).

 

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**(c)          **Theunpaid balance of the Adjusted Deferral Amount (and interest accrued thereon,if applicable) may be prepaid by Tenant voluntarily at any time, in whole or inpart, without penalty, in Tenant’s sole discretion, provided that at thetime of such prepayment Tenant is current in its payments with respect to allmonetary obligations under the Lease. Any such prepayment, after all other monetary obligations of Tenantunder the Lease have been brought current, shall be applied first to accruedinterest (if any), then to the unpaid balance (if any) of the Delay PeriodAdjustment Amount, and then to the remaining balance of the Adjusted DeferralAmount.  In the event of any suchprepayment made after amortization payments have commenced on July 1, 2010pursuant to subparagraph (b)(i) above, there shall be a recalculationof the required amortization payments (after giving effect to the prepayment)as provided in the final sentence of such subparagraph (b)(i).

 

**(d)          **Forpurposes of this Amendment, the term “Capital Event” means any of thefollowing:  (i) receipt by Tenant ofcash or cash-equivalent consideration in exchange for an issuance of equitysecurities by Tenant (including, but not limited to, an issuance of warrants,options or other securities exercisable for or convertible into equitysecurities of Tenant), or in exchange for issuance by Tenant of a note or otherdebt security convertible into equity securities of Tenant; (ii) receiptby Tenant of cash or cash-equivalent consideration pursuant to a productlicense by Tenant; (iii) receipt by Tenant of cash or cash-equivalentconsideration pursuant to a strategic partnership, joint venture, collaborationor other similar arrangement with another person or entity; or (iv) occurrenceof any merger, consolidation, reorganization, sale of assets, sale of stock orother similar transaction in which a material part of the considerationreceived by Tenant or by any of its equity security holders in connection withsuch transaction consists of cash or cash-equivalent consideration.  The term “Transaction Consideration”means, with respect to a Capital Event, the aggregate cash and cash-equivalentconsideration received collectively by Tenant and, in the case of a CapitalEvent defined in clause (iv) of the preceding sentence, by Tenant’sequity security holders pursuant to or in connection with such Capital Event.

 

**2.             Cancellationand Issuance of Warrants.** HCP Estates USA Inc., a Delaware corporation (“HCP Estates”), isan affiliate of Landlord and is the holder of Warrant No. CS-23A, issuedby Tenant and dated as of February 26, 2009, for the purchase of 100,000shares of Tenant’s common stock (the “Existing Warrant”), althoughphysical possession of the original Existing Warrant is presently maintained byTenant (for the benefit of HCP Estates). Concurrently with the mutual execution of this Amendment, (a) Tenantshall execute, issue and deliver to Landlord or Landlord’s nominee (whichLandlord presently anticipates will be HCP Life Science REIT, Inc., a Marylandcorporation and an affiliate of Landlord) a Warrant dated as of the date ofexecution of this Amendment, in the same form as the Existing Warrant (exceptwith such modifications as are reasonably necessary to reflect any new ordifferent terms specified in this Amendment), for 200,000 shares of Tenant’s Common Stock (the “New Warrant”),and (b) the Existing Warrant (presently in Tenant’s possession as notedabove) shall be automatically cancelled and shall be of no further force oreffect.  The New Warrant shall beexercisable at any time from the issue date through the seventh (7th) anniversary of the issue date, inclusive.  Neither the issuance nor the exercise of theNew Warrant shall result in any credit against any monetary obligations ofTenant under the Lease or under this Amendment. The exercise price per share under the New Warrant, to beinserted at the time of issuance, shall be equal to the average closing price ofTenant’s Common Stock for the three (3) business days immediatelypreceding the execution date of this Amendment.

 

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**3.             UsuryLaws Not Applicable.**

 

**(a)          **Theparties are entering into this Amendment in reliance upon their mutual understandingand agreement that the California usury laws are not applicable to thetransactions contemplated by this Amendment, including (but not limited to) thedeferral and repayment provisions contained herein and the manner in whichTenant’s repayment obligation is calculated. Without limiting the generality of the foregoing, the parties acknowledgeand agree that the relationship established by the Lease is fundamentally areal property leasing relationship and does not involve a lending or borrowingof money as between Landlord and Tenant, and that the modified rent structureand repayment obligations set forth in this Amendment are part of thenegotiated consideration for Tenant’s leasing of the Premises (as defined inthe Lease).

 

**(b)          **If,notwithstanding the intention and understanding of the parties as set forthabove, it is determined at any time or under any circumstances pursuant to afinal judgment by a court of competent jurisdiction that (i) theprovisions of this Amendment are subject to the California usury laws, (ii) noexemption from such usury laws is available for the transactions contemplatedin this Amendment and (iii) the fulfillment of any provision of thisAmendment would result in Landlord receiving or being deemed to receive interestat a rate exceeding the highest lawful rate permissible under applicableCalifornia usury laws, then (A) the relevant provisions of this Amendmentshall be automatically amended in such a manner as to reduce Tenant’s monetaryobligations hereunder to the maximum limit permissible under applicableCalifornia usury laws, and (B) to the extent Landlord has actuallyreceived amounts determined by such court to constitute interest in an amountin excess of the highest lawful rate, then the amount that would otherwiseconstitute excessive interest shall instead be deemed to be applied inreduction of the unpaid principal balance of Tenant’s obligations under thisAmendment rather than being a payment of interest under this Amendment, or, ifsuch excessive interest exceeds the unpaid principal balance of Tenant’sobligations under this Amendment, then such excess amount shall be refunded toTenant.

 

**4.             NoBrokers.**  Eachparty respectively (i) represents and warrants that no broker representedor acted for such party in connection with the consummation of this Amendmentor of the transactions contemplated herein, and (ii) agrees to indemnify,defend and hold the other party harmless against any liability, cost orexpense, including (but not limited to) reasonable attorneys’ fees, arising outof any claims for brokerage commissions or other similar compensation by anybroker or agent alleging to have represented or acted on behalf of theindemnifying party in connection with this Amendment and the transactions contemplatedherein.

 

**5.             EntireAgreement; Confidentiality.**  This Amendment constitutes the entireagreement between Landlord and Tenant regarding the subject matter hereof andsupersedes all prior negotiations, discussions, terms sheets, letters,understandings and agreements, whether oral or written, between the partieswith respect to such subject matter (other than the Lease itself, as expresslyamended hereby).  The parties agree thatall correspondence, terms sheets, drafts, letters, communications, understandingsand agreements (if any), whether oral or written, exchanged or reached betweenthem prior to the execution of this Amendment and relating in any way to thesubject matter of this Amendment, and all information contained in any of the 

 

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foregoing (except insofar as any such information is expressly setforth in this Amendment itself), are and shall remain confidential informationand shall not be disclosed by either party or its respective agents oremployees to any other person or entity, except that either party may disclosesuch confidential information to its respective employees, agents and financialand legal consultants provided that (a) such disclosure isreasonably necessary to advance or protect the disclosing party’s interests and(b) the disclosing party advises such recipients of the confidentialnature of such information and requires them to respect and maintain theconfidentiality thereof.

 

**6.             NoOther Modifications.** Except as otherwise expressly provided herein, the terms and provisionsof the Lease are unmodified and remain in full force and effect.

 

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

 

 
| **LANDLORD:** | **HCP BTC, LLC** (formerly known as Slough BTC,  LLC), a Delaware limited liability company |
|---------------|---------------------------------------------------------------------------------------------|
| ** **    | ** **                                                                                  |
|          | By:                                                                                         | **HCP ESTATES USA INC.** (formerly known as Slough Estates USA  Inc.)**,**a Delaware corporation, Its  Managing Member |
|          | ** **                                                                                  |
|          | ** **                                                                                  |
|          |                                                                                        | By: | /s/ Jonathan M. Bergschneider |
|          |                                                                                        | Name: | Jonathan M. Bergschneider |
|          |                                                                                        | Title: | Senior Vice President |
|          |                                                                                        |
|          |                                                                                        |
| **TENANT:**   | **RIGEL PHARMACEUTICALS, INC.,**                                                            |
| ** **    | a Delaware corporation                                                                      |
| ** **    |                                                                                        |
|          |                                                                                        |
|          | By:                                                                                         | /s/ James M. Gower |
|          | Name:                                                                                       | James M. Gower |
|          | Title:                                                                                      | Chief Executive Officer |
|          |                                                                                        |
|          |                                                                                        |
|          | By:                                                                                         | /s/ Ryan Maynard |
|          | Name:                                                                                       | Ryan Maynard |
|          | Title:                                                                                      | Chief Financial Officer |

 

Attachment:

Exhibit A                AdjustedRent Schedule (Subparagraph 1(b)(i))

 

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**EXHIBIT A**

**Adjusted Rent Schedule(Subparagraph 1(b)(i))**

 

Pursuant to Subparagraph 1(b)(i) ofthe foregoing Amendment, the schedule of current monthly minimum rentalpayments for Months 73 through 180 of the Lease term (2/1/09 through1/31/18) would be as follows, assuming no prepayments of the Adjusted DeferralAmount by Tenant prior to July 1, 2010:

 
| **Months**                               | ** ** | **Previously  Scheduled Monthly  Rent (per Lease) *** | ** ** | **Additional Monthly  Rent (per Amendment,  Subparagraph 1(b)(i))** | ** ** | **Total Adjusted  Monthly Rent** | ** ** |
|------------------------------------------|------------|---------------------------------------------------------------------------|------------|-----------------------------------------------------------------------------------------|------------|--------------------------------------------|------------|
| ** **                               | ** ** | ** **                                                                | ** ** | ** **                                                                              | ** ** | ** **                                 | ** ** |
| 073 — 084

(2/1/09 —  1/31/10) |       | $                                                                         | 1,203,153  |                                                                                    | none       |                                       | $          | 1,203,153 |   |
|                                     |       |                                                                      |       |                                                                                    |       |                                       |       |
| 085 — 089

(2/1/10 —  6/30/10) |       | $                                                                         | 1,025,154  |                                                                                    | none       |                                       | $          | 1,025,154 |   |
|                                     |       |                                                                      |       |                                                                                    |       |                                       |       |
| 090 (7/1/10)                             |       | $                                                                         | 1,025,154  |                                                                                    | $          | 1,436,128                                  |       | $ | 2,461,282 |   |
|                                     |       |                                                                      |       |                                                                                    |       |                                       |       |
| 091 — 096

(8/1/10 —  1/31/11) |       | $                                                                         | 1,025,154  |                                                                                    | $          | 173,498                                    |       | $ | 1,198,652 |   |
|                                     |       |                                                                      |       |                                                                                    |       |                                       |       |
| 097 — 108

(2/1/11 —  1/31/12) |       | $                                                                         | 1,066,548  |                                                                                    | $          | 173,498                                    |       | $ | 1,240,046 |   |
|                                     |       |                                                                      |       |                                                                                    |       |                                       |       |
| 109 — 120

(2/1/12 —  1/31/13) |       | $                                                                         | 1,109,686  |                                                                                    | $          | 173,498                                    |       | $ | 1,283,184 |   |
|                                     |       |                                                                      |       |                                                                                    |       |                                       |       |
| 121 — 132

(2/1/13 —  1/31/14) |       | $                                                                         | 1,154,583  |                                                                                    | $          | 173,498                                    |       | $ | 1,328,081 |   |
|                                     |       |                                                                      |       |                                                                                    |       |                                       |       |
| 133 — 136

(2/1/14 —  5/31/14) |       | $                                                                         | 1,199,781  |                                                                                    | $          | 173,498                                    |       | $ | 1,373,279 |   |
|                                     |       |                                                                      |       |                                                                                    |       |                                       |       |
| 137 — 144

(6/1/14 —  1/31/15) |       | $                                                                         | 1,199,781  |                                                                                    | none       |                                       | $          | 1,199,781 |   |
|                                     |       |                                                                      |       |                                                                                    |       |                                       |       |
| 145 — 156

(2/1/15 —  1/31/16) |       | $                                                                         | 1,248,232  |                                                                                    | none       |                                       | $          | 1,248,232 |   |
|                                     |       |                                                                      |       |                                                                                    |       |                                       |       |
| 157 — 168

(2/1/16 —  1/31/17) |       | $                                                                         | 1,298,481  |                                                                                    | none       |                                       | $          | 1,298,481 |   |
|                                     |       |                                                                      |       |                                                                                    |       |                                       |       |
| 169 — 180

(2/1/17 —  1/31/18) |       | $                                                                         | 1,350,544  |                                                                                    | none       |                                       | $          | 1,350,544 |   |

 

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* Excludes amortizationamounts that would have been payable under Amendment No. Three, to reflectthe further deferral of such amounts pursuant to this Amendment.

 

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