Document:

Kencott eo and above release

Exhibit 10.20

 

SETTLEMENT AND RELEASE AGREEMENT

 

This Settlement and

Release Agreement (the “Agreement”) is entered into this 27th day of March,

2002 (the “Effective Date”) between Axsys Technologies, Inc. (the “Company”)

and Mark J. Bonney (the “Employee”).

 

NOW, THEREFORE, in

consideration of the promises and covenants contained herein, the Company and

the Employee, hereby agree as follows:

 

1.             Termination of Employment.  The Employee’s employment with the Company

and its Affiliates (as hereinafter defined) was terminated on March 18th, 2002

(the “Termination Date”).  The Employee

hereby resigns, as applicable, from all of his positions as an employee,

officer and director of the Company and/or its Affiliates.

 

2.                                       Payments and Benefits.

 

(a)           On the Effective Date, the Company

shall pay to the Employee his accrued but unpaid base salary as well as any

unpaid incentive payment due for the calendar year 2001. The Company shall also

make a payment to the Employee in lieu of his unused vacation accrued as of the

Termination Date, if any.

 

(b)           During the period commencing on the

Termination Date and ending on the earlier of (i) the first anniversary of the

Termination Date and (ii) the Employee’s commencement of full-time employment

with a subsequent employer (the “Continuation Period”), the Company shall

continue to pay the Employee his base salary at the rate in effect on the

Termination Date.  Such base salary will

be paid in accordance with the Company’s normal payroll practice. The Company

shall also continue to provide medical, dental and life insurance benefits

during the Continuation Period.  At the

end of the Continuation Period, the Company shall pay to the Employee an amount

in cash equal to the matching contributions the Company would have made on the

employee’s behalf to the Company’s 401k Plan had the Employee participated in

the Plan during the Continuation Period at the same rate of the Employee’s

participation as in effect immediately prior to the Termination Date.  The Employee shall promptly notify the

Company upon his commencement of any subsequent employment.

 

(c)           The Company shall amend the

Employee’s outstanding stock options in respect of 155,000 shares of the

Company’s common stock to extend the exercise period of such options (to the

extent such options are vested and exercisable on the Termination Date) to the

end of business on the date 90 days following the expiration of the

Continuation Period.

 

(d)           The Company will provide the Employee

with outplacement services through a firm selected by the Employee, provided

that the Company’s cost of providing such services shall not exceed $7,500.00.

 

 

All applicable

withholdings will be made for the payments provided for in this Section 2.

 

3.             Release. 

In consideration of the benefits set forth in Section 2 of this

Agreement, the sufficiency of which is hereby acknowledged by the Employee, the

Employee, with the intention of binding himself and his heirs, executors,

administrators and assigns, does hereby release, remise, acquit and forever

discharge the Company, its Affiliates and their respective present and former

officers, directors, executives, shareholders, agents, attorneys and employees,

(collectively the “Released Parties”), of and from any and all claims, actions,

causes of action, demands, rights, damages, debts, sums of money, accounts,

financial obligations, suits, expenses, attorneys’ fees and liabilities of

whatever kind or nature in law, equity or otherwise, including, without

limitation, arising under the laws of any jurisdiction, whether accrued,

absolute, contingent, unliquidated or otherwise and whether now known or

unknown, suspected or unsuspected, which the Employee, individually or as a

member of a class, now has, owns or holds, may hereafter have, own or hold or

has at any time heretofore had, owned or held, against any Released Party

arising out of any act or omission occurring, or state of facts existing, on or

prior to the time of execution of this Agreement including, without limitation,

(i) any claims in any way connected with the Employee’s employment

relationship with the Company and/or its Affiliates, or the termination

thereof, and (ii) any claims for severance or vacation or other benefits,

unpaid wages, salary or incentive payment, breach of contract, wrongful discharge,

impairment of economic opportunity, defamation, intentional infliction of

emotional harm or other tort, or employment discrimination under any applicable

federal, state or local statute, provision, order, rule, regulation or other

law of any jurisdiction, excepting only those obligations of the Company to the

Employee set forth in Section 2 of this Agreement.  For purposes of this Agreement, “Affiliates” shall mean the

Company’s subsidiaries and any other entity, directly or indirectly, controlled

by, controlling or under common control with the Company.

 

This release is for any

relief no matter how called, including but not limited to, wages, back pay,

front pay, compensatory damages, liquidated damages, punitive damages, damages

for pain or suffering, costs, attorneys fees and expenses and claims to be

reinstated to employment with the Company.

 

The Employee acknowledges

and agrees that this Agreement is not to be construed in any way as an

admission of any liability whatsoever by any Released Party under any federal

or state statute or the principals of common law or any other law, rule or

regulation of any jurisdiction, any such liability having been expressly

denied.

 

The Employee acknowledges

and agrees that he has not, with respect to any act or omission occurring, or

state of facts existing, on or prior to the time of execution of this

Agreement, filed any complaints, charges or lawsuits, or taken similar action,

against any of the Released Parties with any governmental agency or any court

or tribunal or similar body or authority.

 

2

 

4.             Voluntary Agreement; Attorney Consultation;

Revocation.  

 

The Employee represents that he has carefully read

this Agreement, that he has been advised to consult with an attorney, that he

knows and understands the contents of this Agreement, that he executes this

Agreement knowingly and voluntarily as his own free act and deed, that the

terms of this Agreement including, but not limited to, those of Section 3

are totally satisfactory and thoroughly understood by him, and that this

Agreement was entered into without fraud, duress or coercion.

 

5.             Confidentiality; Return of Company Property.  The Employee agrees and understands that in

the Employee’s position with the Company and performance of his

responsibilities, duties and services for the Company and/or its Affiliates,

the Employee has been exposed to and received information relating to the

confidential affairs of the Company and/or its Affiliates, including but not limited

to technical information, intellectual property, business and marketing plans,

strategies, customer information, other information concerning the products,

promotions, development, financing, expansion plans, business policies and

practices of the Company and/or its Affiliates, and other forms of confidential

information, trade secrets and/or confidential information in the nature of

trade secrets of the Company and/or its Affiliates (“Confidential

Information”).  The Employee

acknowledges and represents that as of the time of execution of this Agreement

the Employee has not disclosed, and agrees that at any time thereafter the

Employee will not disclose, Confidential Information, either directly or

indirectly, to any third person or entity without the prior written consent of

the Company and/or its Affiliates, as appropriate.  This confidentiality covenant has no temporal, geographical or

territorial restriction.  Except for his

cell phone and computer which the Employee will be permitted to retain until

the end of the Continuation Period, the employee has returned to the Company

and/or its Affiliates, as appropriate, all property, keys, mobile phones,

computer equipment, software data files, notes, memoranda, writings, lists,

files, reports, customer lists, correspondence, tapes, disks, cards, surveys,

maps, logs, machines, technical data and any other tangible product or document

which has been produced by, received by or otherwise submitted to the Employee

during or prior to his employment with the Company and, as applicable, all

copies, in whatever medium, thereof. 

Any such data or property (including copies thereof) stored on computer,

software data files or other equipment belonging to the Employee (or to which

the Employee otherwise has lawful access after the date hereof) shall be

deleted by the Employee immediately following execution of this Agreement.

 

6.             Non-Disparagement.  The Employee agrees not to make any written or oral statement

that could disparage the goods, products, services, employees, officers,

directors, shareholders or reputation, of the Company or its Affiliates.  The Company agrees that it shall use its

best efforts to cause its officers and directors not to make any written or

oral statement that could disparage the Employee.

 

7.             Successors. 

This Agreement shall be binding upon and shall inure to the benefit of

each of the parties hereto and their respective heirs, personal

representatives, successors and assigns.

 

3

 

8.             Entire Agreement; Waiver; and Severability.  This instrument contains the entire

agreement of the parties relating to the subject matter hereof, and it replaces

and supersedes any prior agreements, written or oral, between the parties

relating to said subject matter.  No

modifications or amendments of this Agreement shall be valid unless made in

writing and signed by the parties hereto. 

The waiver of the breach of any term or of any condition of this

Agreement shall not be deemed to constitute the waiver of any other breach of

the same or any other term or condition. 

If any provision of this Agreement is held invalid or unenforceable, the

remainder of this Agreement shall nevertheless remain in full force and effect,

and if any provision is held invalid or unenforceable with respect to

particular circumstances, it shall nevertheless remain in full force and effect

in all other circumstances.

 

9.             Governing Law. 

This Agreement shall be governed by the laws of the state of

Connecticut, without regard to the choice of law principles thereof.

 

	

   

  	

  AXSYS TECHNOLOGIES, INC.

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/:  Stephen W. Bershad

  	

   

  
	

   

  	

   

  	

  Name: Stephen W.

  Bershad

  
	

   

  	

   

  	

  Title: CEO

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  /s/:  Mark J. Bonney

  	

   

  
	

   

  	

   

  	

  Mark J. Bonney

  
					

 

4Exhibit 4.8

 

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.

STOCK

SUBSCRIPTION WARRANT

To

Purchase Common Stock of

Rigel

Pharmaceuticals, Inc.

 

DATE

OF INITIAL ISSUANCE:  January 24, 2002

THIS CERTIFIES THAT for value received, TBCC FUNDING TRUST II or

its registered assigns (hereinafter called the “Holder”) is entitled to

purchase from Rigel Pharmaceuticals, Inc., a Delaware corporation (the

“Company”), at any time during the Term of this Warrant, Twenty-three Thousand

Eight Hundred Ten (23,810) shares of common stock of the Company (the “Common

Stock”), at the Warrant Price, payable as provided herein.  The exercise of this Warrant shall be

subject to the provisions, limitations and restrictions herein contained.  This Warrant may be exercised in whole or in

part.

SECTION 1.         Definitions.

For all purposes of this

Warrant, the following terms shall have the meanings indicated:

Common Stock  - shall mean and include the Company’s

authorized Common Stock, as constituted at the date hereof.

Exchange Act - shall mean the Securities Exchange Act of 1934, as

amended from time to time.

Securities Act  - the Securities Act of 1933, as amended

from time to time.

Term of this Warrant  -

shall mean the period beginning on the date of initial issuance hereof and

ending on January 31 , 2007.

Warrant Price — $4.20 per share, subject to adjustment in

accordance with Section 6 hereof.

Warrants - this Warrant and any other Warrant or Warrants issued

in connection with the Master Loan and Security Agreement dated January 24,

2002 executed by the Company and Transamerica Technology Finance Corporation

(the “Loan Agreement”) to the original holder of this Warrant, or any

transferees from such original holder or this Holder.

 

Warrant Shares — 23,810 shares of Common Stock, subject to

adjustment or change as herein provided, purchased or purchasable by the Holder

of this Warrant upon the exercise hereof.

SECTION 2.         Exercise of Warrant.

2.1          Procedure for Exercise of Warrant. 

To exercise this Warrant in whole or in part (but not as to any

fractional share of Common Stock), the Holder shall deliver to the Company at

its office referred to in Section 15hereof at any time and from time to

time during the Term of this Warrant: (i) the Notice of Exercise in the

form attached hereto, (ii) cash, certified or official bank check payable

to the order of the Company, wire transfer of funds to the Company’s account,

or cancellation of any indebtedness of the Company to the Holder (or any

combination of any of the foregoing) in the amount of the Warrant Price for

each share being purchased, and (iii) this Warrant.  Notwithstanding any provisions herein to the

contrary, if the Current Market Price (as defined in Section 6) is greater

than the Warrant Price (at the date of calculation, as set forth below), in

lieu of exercising this Warrant as hereinabove permitted, the Holder may elect

to receive shares of Common Stock equal to the value (as determined below) of

this Warrant (or the portion thereof being canceled) by surrender of this

Warrant at the office of the Company referred to in Section 15 hereof,

together with the Notice of Exercise, in which event the Company shall issue to

the Holder that number of whole shares of Common Stock computed using the

following formula:

CS = WCS x (CMP-WP)

CMP

Where

CS                                 equals the number of shares of Common

Stock to be issued to the Holder

WCS                    equals the number of shares of Common Stock

purchasable under the Warrant or, if only a portion of the Warrant is being

exercised, the portion of the Warrant being exercised (at the date of such

calculation)

CMP                     equals the Current Market Price (at the date of such

calculation)

WP                            equals the Warrant Price (as adjusted to

the date of such calculation)

In the event of

any exercise of the rights represented by this Warrant, a certificate or

certificates for the shares of Common Stock so purchased, registered in the

name of the Holder or such other name or names as may be designated by the

Holder, shall be delivered to the Holder hereof within a reasonable time, not

exceeding five (5) days, after the rights represented by this Warrant shall

have been so exercised; and, unless this Warrant has expired, a new Warrant

representing the number of shares (except a remaining fractional share), if

any, with respect to which this Warrant shall not then have been exercised

shall also be issued to the Holder hereof within such time.  The person in whose name any certificate for

shares of Common Stock is issued upon exercise of this Warrant shall for all

purposes be deemed to have become the holder of record of such shares on the

date on which the Holder shall have complied with the conditions for exercise

of this Warrant set forth above, irrespective of the date of delivery of such

certificate, except that, if the date of such compliance is a date when the

stock transfer books of the Company are closed, such person shall be deemed to

have become the holder of such shares at the close of business on the next

succeeding date on which the stock transfer books are open.

2

 

To the extent this

Warrant is not previously exercised as to all Common Stock subject hereto prior

to the expiration of the term of this Warrant, and if the Current Market Price

(as defined in Section 6) of one share of the Common Stock is greater than the

Warrant Price then in effect, this Warrant shall be deemed automatically

exercised pursuant to the net issuance (cashless exercise) provisions set forth

above (even if not surrendered) immediately before its expiration.  For purposes of such automatic exercise, the

Current Market price (as defined in Section 5) of one share of the Common Stock

upon such expiration shall be determined pursuant to Section 6.  To the extent this Warrant or any portion

thereof is deemed automatically exercised pursuant to this paragraph, the

Company agrees to promptly notify the Holder of the number of shares of Common

Stock, if any, the Holder is to receive by reason of such automatic exercise

and shall send such certificates representing the shares that the Holder is

entitled, to the Holder within a reasonable time not to exceed fifteen (15)

days.

2.2          Transfer

Restriction Legend.  Each certificate for Warrant

Shares shall bear the following legend (and any additional legend required by

(i) any applicable state securities laws and (ii) any securities

exchange upon which such Warrant Shares may, at the time of such exercise, be

listed) on the face thereof unless at the time of exercise such Warrant Shares

shall be registered under the Securities Act:

“The shares

represented by this certificate have not been registered under the Securities

Act of 1933, as amended, and may not be sold or transferred in the absence of

such registration or an exemption therefrom under said Act.”

Any certificate

issued at any time in exchange or substitution for any certificate bearing such

legend (except a new certificate issued upon completion of a public

distribution under a registration statement of the securities represented

thereby) shall also bear such legend unless, in the opinion of counsel for the

Holder thereof (which counsel shall be reasonably satisfactory to the Company)

the securities represented thereby are not, at such time, required by law to

bear such legend.

SECTION 3.         Covenants

as to Common Stock.  The Company covenants and

agrees that all shares of Common Stock that may be issued upon the exercise of

the rights represented by this Warrant will, upon issuance, be validly issued, fully

paid and nonassessable, and free from all taxes, liens and charges with respect

to the issue thereof.  The Company

further covenants and agrees that it will pay when due and payable any and all

federal and state taxes which may be payable in respect of the issue of this

Warrant or any Common Stock or certificates therefor issuable upon the exercise

of this Warrant other than taxes based on the gross or net income of the

Holder.  The Company further covenants

and agrees that the Company will at all times have authorized and reserved,

free from preemptive rights, a sufficient number of shares of Common Stock to

provide for the exercise of the rights represented by this Warrant.  The Company further covenants and agrees

that if any shares of capital stock to be reserved for the purpose of the

issuance of shares upon the exercise of this Warrant require registration with

or approval of any governmental authority under any federal or state law before

such shares may be validly issued or delivered upon exercise, then the Company

will in good faith and as expeditiously as possible endeavor to secure such

registration or approval, as the case may be. 

If and so long as the Common Stock issuable upon the exercise of this Warrant

is listed on any national securities exchange, the Company will, if permitted

by the rules of such exchange, list and keep listed on such exchange, upon

official notice of issuance, all shares of such Common Stock issuable upon

exercise of this Warrant.

SECTION 4.         Intentionally deleted.

SECTION 5.         Adjustment

of Number of Shares.  Upon each adjustment of the

Warrant Price as provided in Section 6, the Holder shall thereafter be entitled

to purchase, at the Warrant Price

3

 

resulting from such adjustment,

only the number of shares (calculated to the nearest tenth of a share) obtained

by multiplying the Warrant Price in effect immediately prior to such adjustment

by the number of shares purchasable pursuant hereto immediately prior to such

adjustment and dividing the product thereof by the Warrant Price resulting from

such adjustment.

SECTION 6.         Adjustment

of Warrant Price.  The Warrant Price shall be

subject to adjustment from time to time as follows:

(i)  If, at any time during the Term of this Warrant,

the number of shares of Common Stock outstanding is increased by a stock

dividend payable in shares of Common Stock or by a subdivision or split-up of

shares of Common Stock, then, following the record date fixed for the

determination of holders of Common Stock entitled to receive such stock

dividend, subdivision or split-up, the Warrant Price shall be appropriately

decreased so that the number of shares of Common Stock issuable upon the

exercise hereof shall be increased in proportion to such increase in

outstanding shares.

(ii)  If, at any time during the Term of this Warrant, the number

of shares of Common Stock outstanding is decreased by a combination of the

outstanding shares of Common Stock, then, following the record date for such

combination, the Warrant Price shall appropriately increase so that the number

of shares of Common Stock issuable upon the exercise hereof shall be decreased

in proportion to such decrease in outstanding shares.

(iii)  In case, at any time during the Term of this Warrant, the

Company shall declare a cash dividend upon its Common Stock payable otherwise

than out of earnings or earned surplus or shall distribute to holders of its

Common Stock shares of its capital stock (other than Common Stock), stock or

other securities of other persons, evidences of indebtedness issued by the

Company or other persons, assets (excluding cash dividends and distributions)

or options or rights (excluding options to purchase and rights to subscribe for

Common Stock or other securities of the Company convertible into or

exchangeable for Common Stock), then, in each such case, immediately following

the record date fixed for the determination of the holders of Common Stock

entitled to receive such dividend or distribution, the Warrant Price in effect

thereafter shall be determined by multiplying the Warrant Price in effect

immediately prior to such record date by a fraction of which the numerator

shall be an amount equal to the difference between (x) the Current Market

Price of one share of Common Stock and (y) the fair market value (as determined

by the Board of Directors of the Company, whose determination shall be

conclusive) of the amount of cash, stock, securities, evidences of

indebtedness, assets, options or rights, as the case may be, so distributed in

respect of one share of Common Stock, and of which the denominator shall be

such Current Market Price.

(iv)  All calculations under this Section 6 shall be made to

the nearest cent or to the nearest one-tenth (1/10) of a share, as the case may

be.

(v)  For the purpose of any computation pursuant to this

Section 6, the Current Market Price at any date of one share of Common

Stock shall be deemed to be the average of the daily closing prices for the 5

consecutive business days ending on the last business day before the day in

question (as adjusted for any stock dividend, split, combination or

reclassification that took effect during such 5 business day period).  The closing price for each day shall be the

last reported sales price regular way or, in case no such reported sales took

place on such day, the average of the last reported bid and asked prices

regular way, in either case on the principal national securities exchange on

which the Common Stock is listed or admitted to trading or as reported by

Nasdaq (or if the Common Stock is not at the time listed or admitted for

trading on any such exchange or if prices of the Common Stock are not reported

by Nasdaq then such price shall be equal to the average of the last reported

bid and asked prices on such day as reported by The National Quotation Bureau

Incorporated or any similar reputable quotation and reporting service, if such

4

 

quotation is not reported by The National Quotation

Bureau Incorporated); provided, however, that if the Common Stock is not traded

in such manner that the quotations referred to in this clause (v) are

available for the period required hereunder, the Current Market Price shall be

determined in good faith by the Board of Directors of the Company.

(vi)  Whenever the Warrant Price shall be adjusted as provided in

Section 6, the Company shall prepare a statement showing the facts

requiring such adjustment and the Warrant Price that shall be in effect after

such adjustment.  The Company shall

cause a copy of such statement to be sent by mail, first class postage prepaid,

to each Holder of this Warrant at its, his or her address appearing on the

Company’s records.  Where appropriate,

such copy may be given in advance and may be included as part of the notice

required to be mailed under the provisions of subsection (x) of this

Section 6.

(vii)  Adjustments made pursuant to clauses (i), (ii) and

(iii) above shall be made on the date such dividend, subdivision,

split-up, combination or distribution, as the case may be, is made, and shall

become effective at the opening of business on the business day next following

the record date for the determination of stockholders entitled to such

dividend, subdivision, split-up, combination or distribution.

(viii)  In the event the Company shall propose to take any action

of the types described in clauses (i), (ii) and (iii) of this

Section 6, the Company shall forward, at the same time and in the same

manner, to the Holder of this Warrant such notice, if any, which the Company

shall give to the holders of capital stock of the Company.

(ix)  In any case in which the provisions of this Section6shall

require that an adjustment shall become effective immediately after a record

date for an event, the Company may defer until the occurrence of such event

issuing to the Holder of all or any part of this Warrant which is exercised

after such record date and before the occurrence of such event the additional

shares of capital stock issuable upon such exercise by reason of the adjustment

required by such event over and above the shares of capital stock issuable upon

such exercise before giving effect to such adjustment exercise; provided,

however, that the Company shall deliver to such Holder a due bill or other

appropriate instrument evidencing such Holder’s right to receive such

additional shares upon the occurrence of the event requiring such adjustment.

SECTION 7.         Ownership.

7.1          Ownership

of This Warrant.  The Company may deem and treat the person in

whose name this Warrant is registered as the holder and owner hereof

(notwithstanding any notations of ownership or writing hereon made by anyone

other than the Company) for all purposes and shall not be affected by any

notice to the contrary until presentation of this Warrant for registration of

transfer as provided in this Section 7.

7.2          Transfer

and Replacement.  This Warrant and all rights hereunder are

transferable in whole or in part upon the books of the Company by the Holder

hereof in person or by duly authorized attorney, and a new Warrant or Warrants,

of the same tenor as this Warrant but registered in the name of the transferee

or transferees (and in the name of the Holder, if a partial transfer is

effected) shall be made and delivered by the Company upon surrender of this

Warrant duly endorsed, at the office of the Company referred to in

Section 15 hereof.  Upon receipt by

the Company of evidence reasonably satisfactory to it of the loss, theft or

destruction, and, in such case, of indemnity or security reasonably

satisfactory to it, and upon surrender of this Warrant if mutilated, the

Company will make and deliver a new Warrant of like tenor, in lieu of this

Warrant.  This Warrant shall be promptly

cancelled by the Company upon the surrender hereof in connection with any

transfer or replacement.  Except as

otherwise provided above, in the case of the loss, theft or destruction of a

Warrant, the Company shall pay all expenses, taxes

5

 

and other charges payable

in connection with any transfer or replacement of this Warrant, other than

stock transfer taxes (if any) payable in connection with a transfer of this

Warrant, which shall be payable by the Holder. 

Holder will not transfer this Warrant and the rights hereunder except in

compliance with federal and state securities laws.

SECTION 8.         Mergers,

Consolidation, Sales.  In the case of any proposed

consolidation or merger of the Company with another entity, or the proposed

sale of all or substantially all of its assets to another person or entity, or

any proposed reorganization or reclassification of the capital stock of the

Company, then, as a condition of such consolidation, merger, sale,

reorganization or reclassification, the Company shall give 10 days’ prior

written notice thereof to the Holder hereof and lawful and adequate provision

shall be made whereby the Holder of this Warrant shall thereafter have the

right to receive upon the basis and upon the terms and conditions specified

herein, in lieu of the shares of the Common Stock of the Company immediately

theretofore purchasable hereunder, such shares of stock, securities or assets

as may (by virtue of such consolidation, merger, sale, reorganization or

reclassification) be issued or payable with respect to or in exchange for the

number of shares of such Common Stock purchasable hereunder immediately before

such consolidation, merger, sale, reorganization or reclassification.  In any such case appropriate provision shall

be made with respect to the rights and interests of the Holder of this Warrant

to the end that the provisions hereof shall thereafter be applicable as nearly

as may be practicable, in relation to any shares of stock, securities or assets

thereafter deliverable upon the exercise of this Warrant.

Notwithstanding

the term of this Warrant fixed pursuant to Section 1 above and the provisions

of this Section 8, the right to purchase Common Stock as granted herein shall

expire, to the extent not previously exercised, immediately upon the closing of

a merger or consolidation of the Company with or into another corporation when

the Company is not the surviving corporation (other than a merger or

consolidation for the principal purpose of changing the domicile of the

Company), provided (1) that any securities received in such merger or

consolidation are publicly traded or all or substantially all of the Company’s

capital stock, properties and assets are sold to any other person, in each case

where the stockholders of the Company immediately prior to such merger,

consolidation or sale of assets own (directly or indirectly) less than 50% of

the voting securities of the surviving entity or purchaser of assets in such

transaction (collectively, a “Merger”) and (2) that the Company has given

thirty (30) days written notice to the Holder stating that a Merger is to be

completed and that this Warrant will expire unless exercised prior to or in

connection with the Merger, except to the extent assumed by the successor

corporation (or parent thereof) in connection with such Merger.  In the event that any outstanding warrants

to purchase equity securities of the Company are assumed, this Warrant shall

also be similarly assumed.

SECTION 9.         Notice

of Dissolution or Liquidation.  In case of

any distribution of the assets of the Company in dissolution or liquidation

(except under circumstances when the foregoing Section 8 shall be

applicable), the Company shall give 10 days’ notice thereof to the Holder

hereof and shall make no distribution to shareholders until the expiration of

thirty (30) days from the date of mailing of the aforesaid notice and, in any

case, the Holder hereof may exercise this Warrant within thirty ten (10) days

from the date of the receipt of such notice, and all rights herein granted not

so exercised within such ten-day period shall thereafter become null and void.

SECTION 10.       Notice

of Extraordinary Dividends.  If the Board

of Directors of the Company shall declare any dividend or other distribution on

its Common Stock except out of earned surplus or by way of a stock dividend

payable in shares of its Common Stock, the Company shall mail notice thereof to

the Holder hereof not less than ten (10) days prior to the record date fixed

for determining shareholders entitled to participate in such dividend or other

distribution, and the Holder hereof shall not participate in such dividend or

other distribution

6

 

unless this Warrant is

exercised prior to such record date. 

The provisions of this Section 10shall not apply to distributions

made in connection with transactions covered by Section 8.

SECTION 11.       Fractional

Shares.  Fractional shares shall not be issued upon

the exercise of this Warrant but in any case where the Holder would, except for

the provisions of this Section 11, be entitled under the terms hereof to

receive a fractional share upon the complete exercise of this Warrant, the

Company shall, upon the exercise of this Warrant for the largest number of

whole shares then called for, pay a sum in cash equal to the excess of the

value of such fractional share (determined in such reasonable manner as may be

prescribed in good faith by the Board of Directors of the Company) over the

Warrant Price for such fractional share.

SECTION 12.       Special

Arrangements of the Company.  The Company

covenants and agrees that during the Term of this Warrant, unless otherwise

approved by the Holder of this Warrant

12.1        Will

Not Amend Certificate.  The Company

will not amend its Articles or Certificate of Incorporation to eliminate as an

authorized class of capital stock that class denominated as “Common Stock” on

the date hereof.

12.2        Will

Bind Successors.  This Warrant shall be binding upon any

corporation or other person or entity succeeding to the Company by merger, consolidation

or acquisition of all or substantially all of the Company’s assets.

SECTION 13.       Registration

Rights; Etc.   Intentionally omitted.

SECTION 14.       Rule 144 Reporting.    With a

view to making available the benefits of certain rules and regulations of the

Securities and Exchange Commission (the “Commission”) which may permit the sale

of the Warrant Shares to the public without registration, the Company agrees

to:

                (a)           Make

and keep public information available, as those terms are understood and

defined in Rule 144 under the Securities Act, at all times that the Holder

holds Warrant Shares from and after ninety (90) days following the effective

date of the first registration under the Securities Act filed by the Company

for an offering of its securities to the general public;

                (b)           File

with the Commission in a timely manner all reports and other documents required

of the Company under the Exchange Act at any time after it has become subject

to such reporting requirements; and

(c)           So long as the Holder owns any

Warrant Shares, furnish to the Holder forthwith upon request a written

statement by the Company as to its compliance with the reporting requirements

of Rule 144 (at any time from and after the end of the ninety (90) day period

referred to in clause (i)), and of the Securities Act and the Exchange Act

(at any time after it has become subject to such reporting requirements), a

copy of the most recent annual or quarterly report of the Company, and such

other reports and documents so filed as the Holder may reasonably request in

availing itself of any rule or regulation of the Commission allowing the Holder

to sell any such securities without registration.

SECTION 15.       Notices.  Any notice

or other document required or permitted to be given or delivered to the Holder

shall be delivered at, or sent by certified or registered mail to, the Holder

at Transamerica Technology Finance Division, 76 Batterson Park Road,

Farmington, Connecticut 06032, Attention: 

Assistant Vice President, Loan Administration, with a copy to the Lender

at Riverway II, West Office Tower, 9399 West Higgins Road, Rosemont,

Illinois  60018, Attention:  Legal Department or to such other address as

shall have been furnished to the Company in

7

 

writing by the

Holder.  Any notice or other document

required or permitted to be given or delivered to the Company shall be

delivered at, or sent by certified or registered mail to, the Company at 240

East Grand Avenue, South San Francisco, California 94080, or to such other

address as shall have been furnished in writing to the Holder by the Company.

Any notice so addressed and mailed by registered or certified mail shall be

deemed to be given when so mailed. Any notice so addressed and otherwise delivered

shall be deemed to be given when actually received by the addressee.

SECTION 16.       No Rights as Stockholder; Limitation of Liability. 

This Warrant shall not entitle the Holder to any of the rights of a

shareholder of the Company except upon exercise in accordance with the terms

hereof.  No provision hereof, in the

absence of affirmative action by the Holder to purchase shares of Common Stock,

and no mere enumeration herein of the rights or privileges of the Holder, shall

give rise to any liability of the Holder for the Warrant Price hereunder or as

a shareholder of the Company, whether such liability is asserted by the Company

or by creditors of the Company.

SECTION 17.       Law Governing.  THE VALIDITY,

INTERPRETATION, AND ENFORCEMENT OF THIS WARRANT SHALL BE GOVERNED BY AND

CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT GIVING

EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF.

SECTION 18.       Miscellaneous.

                (a)           This

Warrant and any provision hereof may be changed, waived, discharged or terminated

only by an instrument in writing signed by both parties (or any respective

predecessor in interest thereof).  The

headings in this Warrant are for purposes of reference only and shall not

affect the meaning or construction of any of the provisions hereof.

(b)           All capitalized terms used herein and

not otherwise defined herein shall have the meanings ascribed to them in the

Loan Agreement.

SECTION 19.       Representations

of Holder.

(a)           Investment Representation. 

Holder is aware that the Warrant and the Warrant Shares have not been

registered under the Securities Act, or qualified under the California

Corporate Securities Law of 1968, as amended, or any other state securities of

“blue sky” laws.  The Warrant and the Warrant

Shares are being acquired by it for investment purposes only and not for sale

or with a view to distribution of all or any part of such Warrant or Warrant

Shares.

(b)           Access to Information. 

Holder has had an opportunity to ask questions and receive answers from

the Company regarding the business, financial affairs and other aspects of the

Company, and it has further had the opportunity to obtain any information (to

the extent the Company possesses or can acquire such information without

unreasonable effort or expense) which it deems necessary to evaluate its

investment or to verify the accuracy of information otherwise provided to it.

(c)           Investment

Experience.  Holder is

experienced in evaluating and investing in companies such as the Company, is

capable of evaluating the merits and risks of its investment in the Warrant and

the Warrant Shares, is able to bear the economic risk of the investment and is

prepared to hold the Warrant and the Warrant Shares for an indefinite period of

time.  Holder is an “accredited

investor,” within the meaning of Regulation D under the Securities Act.

8

 

                (d)           Restricted Securities. 

Holder understands that the Warrant and the Warrant Shares will be

characterized as “restricted securities” under the federal securities laws

inasmuch as they are being acquired from the Company in a transaction not

involving a public offering, and that under such laws and applicable

regulations such securities may be resold without registration under the Act

only in certain limited circumstances. 

In this connection, Holder represents that it is familiar with Rule 144

under the Securities Act, as presently in effect, and the conditions which must

be met in order for that Rule to be available for resale of restricted

securities, and understands the resale limitations imposed by the Securities

Act.

Signature page to follow.

9

Signature

page to Stock Subscription Warrant.

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by

its duly authorized officer on the 24th  day of January, 2002.

	

   

  	

  Rigel Pharmaceuticals, Inc.

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ James H.

  Welch

  	

   

  
	

   

  	

  Title:

  	

  Chief Financial

  Officer

  	

   

  

 

10

FORM OF

NOTICE OF EXERCISE

 

[To be signed only upon exercise of

the Warrant]

TO BE EXECUTED BY THE REGISTERED

HOLDER

TO EXERCISE THE WITHIN WARRANT

The undersigned hereby exercises the right to purchase shares of Common

Stock which the undersigned is entitled to purchase by the terms of the within

Warrant according to the conditions thereof, and herewith

[check appropriate

box(es)]

o            makes payment of $                     therefor in cash;

o            makes payment of $                     therefor through

cancellation of indebtedness; or

o                                    directs the Company to issue              shares, and to withhold           shares in lieu of payment of the Warrant Price, as

described in Section 2.1 of the Warrant.

All shares to be issued

pursuant hereto shall be issued in the name of and the initial address of such

person to be entered on the books of                        shall be:

The shares are to be issued in certificates of the

following denominations:

 

	

   

  	

   

  	

   

  
	

   

  	

  [Type Name of

  Holder]

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Title:

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  Dated:

  	

   

  	

   

  

 

 

 

FORM OF

ASSIGNMENT

(ENTIRE)

[To be signed only upon transfer of

entire Warrant]

TO BE EXECUTED BY THE REGISTERED

HOLDER

TO TRANSFER THE WITHIN WARRANT

FOR

VALUE RECEIVED                                                         hereby

sells, assigns and transfers unto                                                 all rights of the undersigned under and

pursuant to the within Warrant, and the undersigned does hereby irrevocably

constitute and appoint                                             

Attorney to transfer the said Warrant on the books of                           , with full power

of substitution.

 

	

   

  	

   

  	

   

  
	

   

  	

  [Type Name of

  Holder]

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Title:

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  Dated:

  	

   

  	

   

  

 

 

NOTICE

The signature to the

foregoing Assignment must correspond to the name as written upon the face of

the within Warrant in every particular, without alteration or enlargement or

any change whatsoever.

1

FORM

OF ASSIGNMENT

(PARTIAL)

[To be signed only upon partial

transfer of Warrant]

TO BE EXECUTED BY THE REGISTERED

HOLDER

TO TRANSFER THE WITHIN WARRANT

FOR VALUE RECEIVED                                                      hereby sells,

assigns and transfers unto                                                   (i) the

rights of the undersigned to purchase        

shares of Common Stock under and pursuant to the within Warrant, and

(ii) on a non-exclusive basis, all other rights of the undersigned under

and pursuant to the within Warrant, it being understood that the undersigned

shall retain, severally (and not jointly) with the transferee(s) named herein,

all rights assigned on such non-exclusive basis.  The undersigned does hereby irrevocably constitute and

appoint                                                       Attorney to

transfer the said Warrant on the books of                          , with full power of substitution.

 

	

   

  	

   

  	

   

  
	

   

  	

  [Type Name of

  Holder]

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Title:

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  Dated:

  	

   

  	

   

  

 

 

NOTICE

The signature to the

foregoing Assignment must correspond to the name as written upon the face of

the within Warrant in every particular, without alteration or enlargement or

any change whatsoever.

1

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