Document:

Exhibit

AMENDMENT NO. 7 TO CREDIT AGREEMENT AND LIMITED WAIVER

THIS AMENDMENT NO. 7 TO CREDIT AGREEMENT AND LIMITED WAIVER dated as of February 28, 2018 (this “Amendment”), is among DIVERSIFIED RESTAURANT HOLDINGS, INC., a Nevada corporation (“Holdings” and a “Guarantor”), each of the undersigned Subsidiaries of Holdings identified as a “Borrower” on the signature pages hereto (each, a “Borrower” and, collectively, the “Borrowers”), each of the undersigned Subsidiaries of Holdings identified as a “Guarantor” on the signature pages hereto (each, a “Guarantor” and together with Holdings, collectively, the “Guarantors”), CITIZENS BANK, NATIONAL ASSOCIATION, in its capacity as administrative agent (in such capacity, the “Administrative Agent”), and each of the Lenders (as defined below) party hereto.

RECITALS:

A.Holdings, the Borrowers, the lenders from time to time party thereto (collectively, the “Lenders”) and the Administrative Agent have entered into a Second Amended and Restated Credit Agreement dated as of June 29, 2015 (as amended by Amendment No. 1 to Credit Agreement dated as of July 27, 2015, Amendment No. 2 to Credit Agreement dated as of August 24, 2015, Amendment No. 3 to Credit Agreement dated as of December 22, 2015, Limited Consent dated as of October 19, 2016, Amendment No. 4 to Credit Agreement and Limited Consent dated as of December 23, 2016, Amendment No. 5 to Credit Agreement dated as of March 27, 2017 and Amendment No. 6 to Credit Agreement dated as of June 30, 2017, and as may be further amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”).  Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement.

B.Holdings and the Borrowers have requested that the Administrative Agent and the Lenders amend the Credit Agreement as set forth below and waive certain Defaults as set forth below.

C.Subject to the terms and conditions set forth below, the Administrative Agent and the Lenders party hereto have agreed to so amend the Credit Agreement and waive such Defaults.

In furtherance of the foregoing, the parties agree as follows:

Section 1.    AMENDMENT.  Subject to the terms and conditions set forth herein and in reliance upon the representations and warranties set forth herein, the Credit Agreement is hereby amended as follows:

(a)    Section 1.2 of the Credit Agreement is amended by adding the following definitions in the appropriate alphabetical location therein: 

“Deferred Royalty” has the meaning assigned to such term in the definition of “Consolidated EBITDA”

“Disqualified Stock” means any Equity Interest which, by its terms (or by the terms of any Equity Interest into which it is convertible or for which it is exchangeable), or upon the happening of any event or condition, (a) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part, on or prior to the date that is ninety-one (91) days following the latest to occur of the DF Term Loan Maturity Date, the Term Loan Maturity Date and the Revolving Credit Maturity Date (excluding any provisions requiring redemption upon a “change of control” or similar event; provided that such “change of control” or similar event results in the Facility Termination Date), (b) is convertible into or exchangeable for (i) debt securities or (ii) any Equity Interest referred to in (a) above, in each case, at any time on or prior to the date that is ninety-one (91) days following the latest to occur of the DF Term Loan Maturity Date, the Term Loan Maturity Date and the Revolving Credit Maturity Date, or (c) is entitled to receive scheduled dividends or distributions in cash prior to the Facility Termination Date.

“Financial Covenants” means the covenants contained in Section 10.17.

“Specified Equity Proceeds” has the meaning assigned to such term in the definition of Consolidated EBITDA.
(b)    The definitions of “Consolidated EBITDA”, “Excess Cash Flow”, “Incurrence Test” and “New Unit” in Section 1.2 of the Credit Agreement are amended and restated in their entirety as follows:

“Consolidated EBITDA” means, with respect to the Consolidated Group for any period, an amount equal to the sum of (a) Consolidated Net Income for such period, plus (b) the following to the extent deducted in arriving at Consolidated Net Income for such period, (i) Consolidated Interest Expense, (ii) the provision for federal, state, local and foreign income taxes (and franchise tax in the nature of income tax), (iii) depreciation and amortization expense, (iv) Pre-Opening Expense, (v) non-cash stock compensation charges, (vi) other non-cash items reducing Consolidated Net Income that do not represent a cash item in such period or any future period, (vii) nonrecurring expenses; provided that the aggregate amount of such expenses added back pursuant to this clause (vii) during any Four-Quarter Period shall not exceed $500,000, (viii) extraordinary losses, (ix) nonrecurring cash fees and expenses paid in connection with the Bagger Dave’s Legendary Burger Tavern Restaurant Spin-Off; provided that the aggregate amount of such fees and expenses added back pursuant to this clause (ix) during the term of this Agreement shall not exceed $250,000, (x) with respect to any period that includes the Fiscal Quarter that ended on or about June 30, 2017, expected cost savings and operating expense reductions related to operating improvements, restructurings and cost saving initiatives that have been identified to the Administrative Agent prior to June 30, 2017 and which are pursuant to actions that have been already taken in an aggregate amount for such Fiscal Quarter equal to $460,232, (xi) with respect to any period that includes a Fiscal Quarter that ended on or prior to March 31, 2018, expected cost savings and operating expense reductions related to operating improvements, restructurings and/or cost saving initiatives that have been identified to the Administrative Agent prior to March 31, 2018 and which are pursuant to actions that have been already taken in an aggregate amount for such Fiscal Quarter equal to $95,704 (in the case of the Fiscal Quarter ending on or about June 30, 2017), $95,704 (in the case of the Fiscal Quarter ending on or about September 30, 2017), $95,704 (in the case of the Fiscal Quarter ending on or about December 31, 2017) and $47,852 (in the case of the Fiscal Quarter ending on or about March 31, 2018), (xii) with respect to any period that includes the Fiscal Quarter that ended on or about September 30, 2017, expenses and losses arising with respect to the impact of Hurricane Irma in an aggregate amount for such Fiscal Quarter equal to $274,899, (xiii) non-cash charges reflecting the deferral of payment of any portion of the royalties to the Franchisor (any such portion, a “Deferred Royalty”) for such period and (xiv) fees and reasonable and documented out-of-pocket expenses incurred in connection with any amendments, modifications, supplements or waivers to this Agreement and the other Loan Documents, plus (c) with respect to any period that includes the Fiscal Quarter that ended on or about June 30, 2017, an amount equal to $240,000, which reflects the pro forma contribution to Consolidated EBITDA with respect to the Restaurant located at 4015 S. Dale Mabry Hwy, Tampa, Florida had such Restaurant been open for the entirety of such Fiscal Quarter, plus (d) subject to the limitations set forth in the immediately succeeding sentence, to the extent elected by Holdings, an amount equal to the cash proceeds received by Holdings during such period from any issuance of Equity Interests in Holdings that are not Disqualified Stock (any such proceeds, the “Specified Equity Proceeds”); provided that the aggregate amount of all such cash proceeds included in the calculation of Consolidated EBITDA pursuant to this clause (d) during the term of this Agreement shall not exceed $5,000,000, minus (e) the following to the extent included in arriving at Consolidated Net Income for such period, (i) federal, state, local and foreign income tax credits, (ii) all non-cash items increasing Consolidated Net Income for such period, (iii) cash capital gains and (iv) nonrecurring and extraordinary gains, minus (f) to the extent not otherwise deducted in arriving at Consolidated Net Income for such period, the cash charges for such period reflecting the payment of any Deferred Royalty.

Notwithstanding anything to the contrary contained in this Agreement, if Holdings elects to include any Specified Equity Proceeds in calculating Consolidated EBITDA as set forth above, then (a) such inclusion shall be solely for the purposes of determining compliance with the Financial Covenants for any Four-Quarter Period that includes the period in which such Specified Equity Proceeds were received by Holdings, (b) such inclusion shall not increase Consolidated EBITDA for any other purpose, including but not limited to calculating Consolidated EBITDA for purposes of determining the Applicable Margin, basket levels, carveouts, 

incurrence tests and other items governed by reference to Consolidated EBITDA or any Financial Covenant and (c) any repayment or prepayment of Indebtedness with such Specified Equity Proceeds shall be deemed not to have occurred for purposes of calculating the Financial Covenants for any Four-Quarter Period that includes the period in which such Specified Equity Proceeds were received by Holdings.
“Excess Cash Flow” means, for Holdings and its Subsidiaries on a consolidated basis, in accordance with GAAP for any Fiscal Year:

(a)    the sum, without duplication, of (i) Consolidated Net Income for such Fiscal Year, (ii) an amount equal to the amount of all non-cash charges to the extent deducted in determining Consolidated Net Income for such Fiscal Year and (iii) decreases in Working Capital for such Fiscal Year, minus

(b)    the sum, without duplication, of (i) the aggregate amount of (A) cash actually paid by Holdings and its Subsidiaries during such Fiscal Year on account of Capital Expenditures and Acquisitions permitted under this Agreement (other than any amounts that were committed during a prior Fiscal Year to the extent such amounts reduced Excess Cash Flow in such prior Fiscal Year per clause (b)(i)(B) below) and (B) cash committed during such Fiscal Year to be used to make Capital Expenditures or Acquisitions permitted under this Agreement which in either case have been actually made or consummated or for which a binding agreement exists as of the time of determination of Excess Cash Flow for such Fiscal Year (in each case under this clause (i) other than to the extent any such Capital Expenditure or Acquisition is made or is expected to be made with the proceeds of Indebtedness, any Equity Issuance, casualty proceeds, condemnation proceeds or other proceeds that would not be included in Consolidated EBITDA), (ii) the aggregate amount of all scheduled principal payments or repayments of Indebtedness (other than mandatory prepayments of Loans) made by Holdings and its Subsidiaries during such Fiscal Year, but only to the extent that such payments or repayments by their terms cannot be reborrowed or redrawn and do not occur in connection with a refinancing of all or any portion of such Indebtedness, (iii) an amount equal to the amount of all non-cash credits to the extent included in determining Consolidated Net Income for such Fiscal Year, (iv) to the extent not otherwise deducted in arriving at Consolidated Net Income for such period, the cash charges for such period reflecting the payment of any Deferred Royalty and (v) increases to Working Capital for such Fiscal Year.

“Incurrence Test” means, with respect to any borrowing of Development Loans pursuant to Section 5.1, (i) no Default or Event of Default shall have occurred and be continuing or result from such borrowing and (ii) the Consolidated Lease-Adjusted Leverage Ratio determined as of the date of such borrowing and after giving effect thereto is not greater than the lesser of (A) 5.75 to 1.00 and (B) 0.25 less than the maximum Consolidated Lease-Adjusted Leverage Ratio allowed under Section 10.17(a) as of such date.

“New Unit” means, as of any date of determination, any Restaurant (other than any Restaurant acquired pursuant to the Closing Date Acquisition or the Restaurant located at 4015 S. Dale Mabry Hwy, Tampa, Florida) that has not yet been in operation or that has been in operation for less than twelve (12) months.

(c)    Section 6.1(c) of the Credit Agreement is amended and restated in its entirety as set forth below:

(c)    Equity Issuances.  The Borrowers, jointly and severally, shall make mandatory principal prepayments of the Loans in the manner set forth in subsection (f) below in an amount equal to one hundred percent (100%) of the aggregate Net Cash Proceeds from any Equity Issuance other than the exercise price on stock options issued as part of employee compensation; provided that, so long as on the date of receipt of such Net Cash Proceeds no Default has occurred and is continuing and the Consolidated Lease-Adjusted Leverage Ratio is less than 4.50 to 1.00 determined as of such date, no prepayment under this subsection (c) shall be required with respect to such Equity Issuance; provided further that, notwithstanding the foregoing, (i) the amount of any prepayment required pursuant to this subsection (c) shall be limited to an amount sufficient to result in a Consolidated Lease Adjusted Leverage Ratio of less than 4.50 to 1.00 determined as of such date of prepayment and after giving effect thereto and (ii) no prepayment under this subsection (c) shall be required with respect to the first $5,000,000 of aggregate Net Cash Proceeds from Equity Issuances received after 

February 28, 2018.  Any prepayment required by this subsection (c) shall be made immediately upon receipt by any Loan Party or any Subsidiary of the proceeds of any such Equity Issuance.

(d)    Section 10.17(a) of the Credit Agreement is amended by replacing the table set forth therein with the following table: 
	
		
	Date of Measurement
	Maximum Consolidated Lease-Adjusted Leverage Ratio

	Last day of the Fiscal Quarter ending on or about March 31, 2018  through the day immediately prior to the end of the Fiscal Quarter ending on or about September 30, 2018
	6.50 to 1.00

	Last day of the Fiscal Quarter ending on or about September 30, 2018 through the day immediately prior to the end of the Fiscal Quarter ending on or about June 30, 2019
	6.25 to 1.00

	Last day of the Fiscal Quarter ending on or about June 30, 2019 through the day immediately prior to the end of the Fiscal Quarter ending on or about September 30, 2019
	6.00 to 1.00

	Last day of the Fiscal Quarter ending on or about September 30, 2019 through the day immediately prior to the end of the Fiscal Quarter ending on or about December 31, 2019
	5.75 to 1.00

	Last day of the Fiscal Quarter ending on or about December 31, 2019 and thereafter
	5.50 to 1.00

(e)    Section 10.17(b) of the Credit Agreement is amended and restated in its entirety as set forth below:

(b)    Consolidated Debt Service Coverage Ratio.  Permit the Consolidated Debt Service Coverage Ratio as of the end of any Fiscal Quarter (commencing with the Fiscal Quarter ending on or about March 31, 2018) to be less than the applicable ratio set forth below opposite such period:

	
		
	Date of Measurement
	Minimum Consolidated Debt Service Coverage Ratio

	Last day of the Fiscal Quarter ending on or about March 31, 2018 through the last day of the Fiscal Quarter ending on or about  December 31, 2018 
	1.00 to 1.00

	Last day of the Fiscal Quarter ending on or about March 31, 2019
	1.05 to 1.00

	Last day of the Fiscal Quarter ending on or about June 30, 2019
	1.10 to 1.00

	Last day of the Fiscal Quarter ending on or about September 30, 2019
	1.15 to 1.00

	Last day of the Fiscal Quarter ending on or about December 31, 2019 and the last day of each Fiscal Quarter ending thereafter
	1.20 to 1.00

(f)    Article X of the Credit Agreement is amended by adding the following new Section 10.23 to the end thereof:

SECTION 10.23    Capital Projects.  So long as the Consolidated Lease-Adjusted Leverage Ratio is greater than 5.50 to 1.00 (determined as of such date after giving pro forma effect to any Indebtedness to be incurred in connection therewith), (a) build-out or develop any new restaurant or (b) commence or continue any non-mandatory remodel of any restaurant without approval of the Administrative Agent (excluding, in the case of this clause (b), the required maintenance with respect to any restaurant).

(g)    The schedules to Exhibit E to the Credit Agreement are hereby amended to incorporate those changes that are necessary in order to conform the calculation(s) of the financial covenants set forth therein to the amendment(s) of the financial covenants and related definitions contemplated by this Amendment.  A copy of the revised Exhibit E to the Credit Agreement has been provided to Holdings and the Borrowers. 

The amendments to the Credit Agreement are limited to the extent specifically set forth above and no other terms, covenants or provisions of any Loan Document are intended to be affected hereby.

Section 2.     LIMITED WAIVER.  Subject to the terms and conditions set forth herein and in reliance upon the representations and warranties set forth herein, each Lender hereby (a) waives the Defaults and Events of Default arising prior to the date hereof under Section 11.1(d) of the Credit Agreement as a result of the Consolidated Group’s failure to comply with (i) the Consolidated Lease-Adjusted Leverage Ratio covenant set forth in Section 10.17(a) of the Credit Agreement with respect to the Four-Quarter Period ended on or about December 31, 2017 and (ii) the Consolidated Debt Service Coverage Ratio covenant set forth in Section 10.17(b) of the Credit Agreement with respect to the Four-Quarter Period ended on or about December 31, 2017 (collectively, the “Specified Defaults”) and (b) waives any requirement under Section 9.2(a) of the Credit Agreement to deliver a Compliance Certificate with respect to the Four-Quarter Period ended on or about December 31, 2017; provided, however, that (i) the Applicable Margin shall continue to be based on Pricing Level I until the fifth Business Day immediately following the next Interest Determination Date and (ii) for informational purposes, the Consolidated Group shall be required to deliver calculations (in form and detail reasonably satisfactory to the Administrative Agent and the Required Lenders) of each of the Consolidated Debt Service Coverage Ratio and the Consolidated Lease-Adjusted Leverage Ratio for the Four-Quarter Period ending on or about December 31, 2017 concurrently with the financial statements delivered pursuant to Section 9.1(a) for such Four-Quarter Period, in each case as such ratios would have been calculated prior to giving effect to this Amendment.
 
Each of the parties hereto acknowledges and agrees that the waivers set forth in this Section 2 are limited to the extent specifically set forth in this Section 2 and no other terms, covenants or provisions of the Loan Documents are intended to be affected hereby.

Section 3.    CONDITIONS PRECEDENT.  The parties hereto agree that this Amendment shall be effective as of the date first written above upon (a) the Administrative Agent’s receipt of counterparts of this Amendment duly executed by each Borrower, each Guarantor, the Administrative Agent and Lenders constituting Required Lenders, (b) the payment by the Borrowers of an amendment fee to each Lender party hereto in the amount of 0.25% (25.0 basis points) of such Lender’s Total Credit Exposure (which amount shall be delivered to the Administrative Agent for distribution to such Lenders) and (c) the payment by the Borrowers of all other documented fees and expenses (including estimated fees and expenses) due to Citizens and its counsel (without prejudice to rights of reimbursement at a later date for any amounts not so invoiced on or prior to the date hereof).  

Section 4.    REPRESENTATIONS AND WARRANTIES.  

(a)    In order to induce the Administrative Agent and the Lenders party hereto to enter into this Amendment, Holdings and each Borrower represents and warrants to the Administrative Agent and the Lenders party hereto as follows:

(i)    the representations and warranties contained in the Credit Agreement and the other Loan Documents are true and correct in all material respects (or if such representation or warranty is already qualified by materiality, in all respects) on and as of the date hereof (after giving effect to this Amendment), except to the extent that any such representation and warranty expressly relates to an earlier date, in which case such representation and warranty is true and correct in all material respects (or if such representation or warranty is already qualified by materiality, in all respects) on and as of such earlier date and except that, for purposes of this Amendment, the representations and warranties contained in Section 8.5 of the Credit Agreement shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b) of Section 9.1 of the Credit Agreement.

(ii)    since December 25, 2016, there has been no event or circumstance, either individually or in the aggregate, that has had or could reasonably be expected to have a Material Adverse Effect.

(iii)    no Default or Event of Default has occurred and is continuing (other than the Specified Defaults) or will exist after giving effect to this Amendment. 

(b)    In order to induce the Administrative Agent and the Lenders to enter into this Amendment, each Borrower and each Guarantor represents and warrants to the Administrative Agent and the Lenders that this Amendment has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

Section 5.    MISCELLANEOUS.

(a)    Ratification and Confirmation of Loan Documents.  Each Borrower and each Guarantor hereby consents, acknowledges and agrees to the amendment(s) and waiver(s) set forth herein and hereby confirms and ratifies in all respects the Loan Documents to which such Person is a party (including without limitation, with respect to any Guarantor, the continuation of its payment and performance obligations under the Guaranty or the Subsidiary Guaranty Agreement, as the case may be, and, with respect to each Borrower and each Guarantor, the continuation and extension of the liens granted under the Collateral Documents to secure the Obligations), in each case upon and after the effectiveness of the amendment(s) and waiver(s) contemplated hereby.    

(b)    Fees and Expenses.  The Borrowers shall pay on demand all reasonable costs and expenses of the Administrative Agent in connection with the preparation, reproduction, execution, and delivery of this Amendment and any other documents prepared in connection herewith, including, without limitation, the reasonable fees and out-of-pocket expenses of counsel for the Administrative Agent.

(c)    Governing Law; Waiver of Jury Trial.  This Amendment shall be governed by, and construed in accordance with, the laws of the State of New York, and shall be further subject to the provisions of Sections 14.5 and 14.6 of the Credit Agreement.

(d)    Counterparts.  This Amendment may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  Delivery of an executed counterpart of a signature page of this Amendment by facsimile or in electronic (i.e., “pdf” or “tif”) format shall be effective as delivery of a manually executed counterpart of this Amendment.

(e)    Entire Agreement.  This Amendment, together with all the Loan Documents (collectively, the “Relevant Documents”), sets forth the entire understanding and agreement of the parties hereto in relation to the subject matter hereof and supersedes any prior negotiations and agreements among the parties relating to such subject matter.  No promise, condition, representation or warranty, express or implied, not set forth in the Relevant Documents shall bind any party hereto, and no such party has relied on any such promise, condition, representation or warranty.  Each of the parties hereto acknowledges that, except as otherwise expressly stated in the Relevant Documents, no representations, warranties or commitments, express or implied, have been made by any party to the other.  None of the terms or conditions of this Amendment may be changed, modified, waived or canceled orally or otherwise except in a writing and in accordance with Section 14.2 of the Credit Agreement.  This Amendment is a Loan Document.

(f)    Enforceability.  Should any one or more of the provisions of this Amendment be determined to be illegal or unenforceable as to one or more of the parties hereto, all other provisions nevertheless shall remain effective and binding on the parties hereto.

(g)    Successors and Assigns.  This Amendment shall be binding upon and inure to the benefit of each Borrower, each Guarantor, the Administrative Agent, each Lender and their respective successors and assigns (subject to Section 14.10 of the Credit Agreement).

(h)    Release.  EACH OF THE BORROWERS AND THE GUARANTORS ACKNOWLEDGES AND AGREES THAT: (I) THE ADMINISTRATIVE AGENT, EACH LENDER AND EACH RELATED PARTY OF ANY OF THE FOREGOING PERSONS HAVE ACTED IN GOOD FAITH IN NEGOTIATING AND ENTERING INTO THIS AMENDMENT AND EACH OTHER LOAN DOCUMENT AND THAT THE PROVISIONS HEREOF AND THEREOF ARE NOT IN BREACH OR VIOLATION OF ANY DUTY OR OBLIGATION, EXPRESS OR IMPLIED, OF THE ADMINISTRATIVE AGENT, ANY LENDER OR ANY RELATED PARTY OF ANY OF THE FOREGOING TO ANY BORROWER, ANY GUARANTOR OR ANY OTHER LOAN PARTY; (II) THE ADMINISTRATIVE AGENT, EACH LENDER AND EACH RELATED PARTY OF ANY OF THE FOREGOING PERSONS HAVE FULLY PERFORMED ALL OF THEIR RESPECTIVE EXPRESS AND IMPLIED OBLIGATIONS TO EACH BORROWER, EACH GUARANTOR AND EACH OTHER LOAN PARTY IN CONNECTION WITH THE LOAN DOCUMENTS AND WITH RESPECT TO ALL OTHER LOAN AND CONTRACTUAL RELATIONSHIPS BETWEEN OR AMONG THE ADMINISTRATIVE AGENT, ANY LENDER OR ANY RELATED PARTY OF ANY OF THE FOREGOING PERSONS, ON ONE HAND, AND ANY BORROWER, ANY GUARANTOR OR ANY OTHER LOAN PARTY, ON THE OTHER HAND; AND (III) NEITHER ANY BORROWER NOR ANY GUARANTOR NOR ANY OTHER LOAN PARTY HAS ANY CLAIM, DEMAND OR CAUSE OF ACTION AGAINST THE ADMINISTRATIVE AGENT, ANY LENDER OR ANY RELATED PARTY OF ANY OF THE FOREGOING PERSONS OF ANY NATURE, WHETHER IN TORT OR IN CONTRACT.  IN CONSIDERATION FOR THE EXECUTION OF THIS AMENDMENT, EACH OF THE BORROWERS AND THE GUARANTORS DOES HEREBY RELEASE AND FOREVER DISCHARGE THE ADMINISTRATIVE AGENT, EACH LENDER AND EACH RELATED PARTY OF ANY OF THE FOREGOING PERSONS FROM ANY AND ALL ACTIONS, CAUSES OF ACTION, DEBTS, DUES, CLAIMS, DEMANDS, LIABILITIES AND OBLIGATIONS OF EVERY KIND AND NATURE, BOTH IN LAW AND IN EQUITY, KNOWN OR UNKNOWN, NOW EXISTING, WHICH MIGHT BE ASSERTED AGAINST THE ADMINISTRATIVE AGENT, ANY LENDER OR ANY RELATED PARTY OF ANY OF THE FOREGOING PERSONS ARISING OUT OF, BASED UPON, OR ASSOCIATED WITH ANY ACTION TAKEN OR NOT TAKEN BY THE ADMINISTRATIVE AGENT, ANY LENDER OR ANY RELATED PARTY OF ANY OF THE FOREGOING PERSONS FROM THE BEGINNING OF TIME TO THE DATE OF THIS AMENDMENT.  THIS PARAGRAPH SHALL SURVIVE THE TERMINATION OF EACH LOAN DOCUMENT AND THE REPAYMENT, SATISFACTION OR DISCHARGE OF THE LOANS AND OTHER OBLIGATIONS.

[Remainder of Page Intentionally Left Blank; Signature Pages Follow]

IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 7 to Credit Agreement and Limited Waiver to be executed by their duly authorized officers, all as of the date and year first written above.
                        
    
BORROWERS:
AMC ADRIAN, INC.
AMC BAGLEY, INC.    
AMC BIRCH RUN, INC.
AMC CALUMET CITY, INC.
AMC CHESTERFIELD, INC.
AMC CHICAGO, INC.
AMC CLEARWATER, INC.
AMC CROWN POINT INC.
AMC DETROIT, INC.
AMC FLINT, INC.
AMC FT. MYERS, INC.
AMC GRAND BLANC, INC.
AMC HAMMOND INC.
AMC HOBART INC.
AMC HOMEWOOD, INC.
AMC LAKELAND, INC.
AMC LANSING, INC.
AMC LAPEER, INC.
AMC LARGO, INC.
AMC MARQUETTE, INC.
AMC NORTH PORT, INC.
AMC OLDSMAR, INC.
AMC PETOSKEY, INC.
AMC PINELLAS PARK, INC. 
AMC PORT HURON, INC.
AMC RIVERVIEW, INC.
AMC ROYAL OAK, INC.
AMC SARASOTA, INC.
AMC SAULT STE. MARIE, INC.
AMC SCHERERVILLE INC.

By:   /s/ David G. Burke                
Name:  David G. Burke
Title:    Treasurer  

BORROWERS (continued):
AMC TRAVERSE CITY, INC.
AMC TRINITY, INC.
AMC TROY, INC.
AMC VALPARAISO INC.
AMC WARREN, LLC
AMC WESLEY CHAPEL, INC.
AMC YBOR, INC.
ANKER, INC.
BEARCAT ENTERPRISES, INC.
BUCKEYE GROUP, LLC
BUCKEYE GROUP II, LLC
FLYER ENTERPRISES, INC.
MCA ENTERPRISES BRANDON, INC.
TMA ENTERPRISES OF NOVI, INC.

By:   /s/ David G. Burke                
Name:  David G. Burke
Title:    Treasurer 
    

BORROWERS (continued):
AMC BALLWIN, INC.
AMC BELLEVILLE, INC. 
AMC BRENTWOOD, INC.
AMC CAPE CORAL, INC.
AMC CHESTERFIELD MISSOURI, INC.
AMC COLUMBIA, INC.
AMC CREVE COEUR MISSOURI, INC.
AMC EDWARDSVILLE, INC.
AMC FENTON MISSOURI, INC.
AMC JEFFERSON CITY, INC.
AMC KIRKWOOD, INC.
AMC LAKE OZARK, INC.
AMC O’FALLON ILLINOIS, INC.
AMC O’FALLON MISSOURI, INC.
AMC ROLLA, INC.
AMC SOUTH TAMPA, INC.
AMC ST. CHARLES, INC.
AMC ST. LOUIS, INC.
AMC ST. PETERS, INC.
AMC WENTZVILLE, INC.
AMC BRADENTON, INC.
AMC TYRONE, INC.

By:   /s/ David G. Burke                
Name:     David G. Burke 
Title:     Treasurer     

    

GUARANTORS:
    
DIVERSIFIED RESTAURANT HOLDINGS, INC.

By:   /s/ David G. Burke                
Name:   David G. Burke
Title:     President and Chief Executive Officer  

AMC GROUP, INC.
AMC WINGS, INC.
AMC REAL ESTATE, INC.

By:   /s/ David G. Burke                
Name:   David G. Burke
Title:     Treasurer  
    
 

ADMINISTRATIVE AGENT / LENDERS:

CITIZENS BANK, NATIONAL ASSOCIATION, as Administrative Agent, LC Issuer and a Lender

By: /s/ David A. Burger                                    
Name: David A. Burger                     
Title: Senior Vice President               

BMO HARRIS BANK, N.A., as a Lender

By: /s/ Elizabeth Kurtti                
Name:  Elizabeth Kurtti                
Title: Director                              

FIFTH THIRD BANK, as a Lender

By: /s/ Douglas P. Best                                
Name: Douglas P. Best                
Title: Vice President                    

THE HUNTINGTON NATIONAL BANK, as a Lender

By: /s/ Kevin Contat                                          
Name: Kevin Contat                  
Title: Vice Presidentrigl_Ex_10_39

		
			Exhibit 10.39
		

		
			Rigel Pharmaceuticals, Inc.
		

		
			Inducement Plan
		

		
			Adopted by the Compensation Committee: October 10, 2016
		

		
			Amended by the Compensation Committee: January 3, 2017
		

		
			Amended by the Compensation Committee: August 16, 2017
		

		
			Amended by the Compensation Committee: November 7, 2017
		

		
			Amended by the Compensation Committee: December 23, 2017
		

		
			Amended by the Compensation Committee: January 24, 2018
		

		
			 
		

			
	
			
				 1.
			General.

			
	
			
				 (a)
			Eligible Stock Award Recipients. The only persons eligible to receive grants of Stock Awards under this Plan are individuals who satisfy the standards for inducement grants under NASDAQ Marketplace Rule 5635(c)(4) and the related guidance under NASDAQ IM 5635-1. A person who previously served as an Employee or Director will not be eligible to receive Stock Awards under the Plan, other than following a bona fide period of non-employment. Persons eligible to receive grants of Stock Awards under this Plan are referred to in this Plan as “Eligible Employees”. These Stock Awards must be approved by either a majority of the Company's “Independent Directors” (as such term is defined in NASDAQ Listing Rule 5605(a)(2)) or the Company’s compensation committee, provided such committee is comprised solely of Independent Directors (the “Independent Compensation Committee”) in order to comply with the exemption from the stockholder approval requirement for “inducement grants” provided under Rule 5635(c)(4) of the NASDAQ Listing Rules. NASDAQ Marketplace Rule 5635(c)(4) and the related guidance under NASDAQ IM 5635-1 are referred to in this Plan as the “Inducement Award Rules”.

			
	
			
				 (b)
			Available Awards. The Plan provides for the grant of Options and Restricted Stock Unit Awards. All Options will be Nonstatutory Stock Options. Awards intended to qualify as stockholder-approved performance based compensation for purposes of Section 162(m) of the Code may not be granted under this Plan. 

			
	
			
				 (c)
			Purpose. This Plan, through the granting of Stock Awards, is intended to provide (i) an inducement material for certain individuals to enter into employment with the Company within the meaning of Rule 5635(c)(4) of the NASDAQ Listing Rules, (ii) incentives for such persons to exert maximum efforts for the success of the Company and any Affiliate and (iii) a means by which Eligible Employees may be given an opportunity to benefit from increases in value of the Common Stock through the granting of Stock Awards.

			
	
			
				 2.
			Administration.

			
	
			
				 (a)
			Administration by Board. The Board will administer the Plan, provided, however, that Stock Awards may only be granted by either (i) a majority of the Company's Independent Directors or (ii) the Independent Compensation Committee. Subject to those constraints and the other constraints of the Inducement Award Rules, the Board may delegate some of its powers of administration of the Plan to a Committee, as provided in Section 2(c). 

			
	
			
				 (b)
			Powers of Board. The Board will have the power, subject to, and within the limitations of, the express provisions of the Plan and the Inducement Award Rules:

			
	
			
				 (i)
			To determine: (A) who will be granted Stock Awards; (B) when and how each Stock Award will be granted; (C) what type of Stock Award will be granted; (D) the provisions of each Stock Award (which need not be identical), including when a person will be permitted to exercise or otherwise receive cash or Common Stock under the Stock Award; (E) the number of shares of Common Stock subject to, or the cash value of, a Stock Award; and (F) the Fair Market Value applicable to a Stock Award; provided, however, that Stock Awards may only be granted by either (i) a majority of the Company's Independent Directors or (ii) the Independent Compensation Committee.

			
	
			
				 (ii)
			To construe and interpret the Plan and Stock Awards granted under it, and to establish, amend and revoke rules and regulations for administration of the Plan and Stock Awards. The Board, in the exercise of these powers, may 

		 

		

			1

		

 

	correct any defect, omission or inconsistency in the Plan or in any Stock Award Agreement, in a manner and to the extent it will deem necessary or expedient to make the Plan or Stock Award fully effective.

			
	
			
				 (iii)
			To settle all controversies regarding the Plan and Stock Awards granted under it.

			
	
			
				 (iv)
			To accelerate, in whole or in part, the time at which a Stock Award may be exercised or vest (or at which cash or shares of Common Stock may be issued). 

			
	
			
				 (v)
			To suspend or terminate the Plan at any time. Except as otherwise provided in the Plan or a Stock Award Agreement, suspension or termination of the Plan will not materially impair a Participant’s rights under his or her then-outstanding Stock Award without his or her written consent except as provided in subsection (viii) below.

			
	
			
				 (vi)
			To amend the Plan in any respect the Board deems necessary or advisable, including, without limitation, adopting amendments relating to nonqualified deferred compensation under Section 409A of the Code and/or making the Plan or Stock Awards granted under the Plan exempt from or compliant with the requirements for nonqualified deferred compensation under Section 409A of the Code, subject to the limitations, if any, of applicable law. If required by applicable law or listing requirements, and except as provided in Section 9(a) relating to Capitalization Adjustments, the Company will seek stockholder approval of any amendment of the Plan that (A) materially increases the number of shares of Common Stock available for issuance under the Plan, (B) materially expands the class of individuals eligible to receive Stock Awards under the Plan, (C) materially increases the benefits accruing to Participants under the Plan, (D) materially reduces the price at which shares of Common Stock may be issued or purchased under the Plan, (E) materially extends the term of the Plan, or (F) materially expands the types of Stock Awards available for issuance under the Plan. Except as otherwise provided in the Plan (including subsection (viii) below) or a Stock Award Agreement, no amendment of the Plan will materially impair a Participant’s rights under an outstanding Stock Award without the Participant’s written consent. 

			
	
			
				 (vii)
			To submit any amendment to the Plan for stockholder approval, including, but not limited to, amendments to the Plan intended to satisfy the requirements of Rule 16b-3 of Exchange Act or any successor rule.

			
	
			
				 (viii)
			To approve forms of Stock Award Agreements for use under the Plan and to amend the terms of any one or more outstanding Stock Awards, including, but not limited to, amendments to provide terms more favorable to the Participant than previously provided in the Stock Award Agreement, subject to any specified limits in the Plan that are not subject to Board discretion. A Participant’s rights under any Stock Award will not be impaired by any such amendment unless the Company requests the consent of the affected Participant, and the Participant consents in writing. However, a Participant’s rights will not be deemed to have been impaired by any such amendment if the Board, in its sole discretion, determines that the amendment, taken as a whole, does not materially impair the Participant’s rights. In addition, subject to the limitations of applicable law, if any, the Board may amend the terms of any one or more Stock Awards without the affected Participant’s consent (A) to clarify the manner of exemption from, or to bring the Stock Award into compliance with, Section 409A of the Code, or (B) to comply with other applicable laws or listing requirements.

			
	
			
				 (ix)
			Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the Company and that are not in conflict with the provisions of the Plan and/or Stock Award Agreements.

			
	
			
				 (x)
			To adopt such procedures and sub-plans as are necessary or appropriate (A) to permit participation in the Plan by individuals who are foreign nationals or employed outside the United States or (B) allow Stock Awards to qualify for special tax treatment in a foreign jurisdiction; provided that Board approval will not be necessary for immaterial modifications to the Plan or any Stock Award Agreement that are required for compliance with the laws of the relevant foreign jurisdiction.

			
	
			
				 (c)
			Delegation to Committee. 

			
	
			
				 (i)
			General. The Board may delegate some or all of the administration of the Plan to a Committee or Committees. If administration of the Plan is delegated to a Committee, the Committee will have, in connection with the administration of the Plan, the powers theretofore possessed by the Board that have been delegated to the Committee, including the power to delegate to a subcommittee of the Committee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board will thereafter be to the Committee or subcommittee). Any delegation of administrative powers will be reflected in resolutions, not inconsistent with the provisions of the Plan, adopted from time to time by the Board or Committee (as applicable). The Committee may, at any time, abolish the subcommittee and/or revest in 

		 

		

			2

		

 

	the Committee any powers delegated to the subcommittee. The Board may retain the authority to concurrently administer the Plan with the Committee and may, at any time, revest in the Board some or all of the powers previously delegated.

			
	
			
				 (ii)
			Rule 16b-3 Compliance. The Committee may consist solely of two or more Non-Employee Directors, in accordance with Rule 16b-3 of the Exchange Act.

			
	
			
				 (d)
			Effect of Board’s Decision. All determinations, interpretations and constructions made by the Board in good faith will not be subject to review by any person and will be final, binding and conclusive on all persons.

			
	
			
				 (e)
			Cancellation and Re-Grant of Stock Awards.  Neither the Board nor any Committee will have the authority to: (i) reduce the exercise, purchase or strike price of any outstanding Option, or (ii) cancel any outstanding Option that has an exercise price or strike price greater than the current Fair Market Value of the Common Stock in exchange for cash or other Stock Awards under the Plan, unless the stockholders of the Company have approved such an action within twelve (12) months prior to such an event.

			
	
			
				 3.
			Shares Subject to the Plan.

			
	
			
				 (a)
			Share Reserve.  

			
	
			
				 (i)
			Subject to Section 9(a) relating to Capitalization Adjustments, the aggregate number of shares of Common Stock that may be issued pursuant to Stock Awards will not exceed 1,878,000 shares (the “Share Reserve”).    

			
	
			
				 (ii)
			Shares may be issued under the terms of this Plan in connection with a merger or acquisition as permitted by NASDAQ Listing Rule 5635(c), NYSE Listed Company Manual Section 303A.08, AMEX Company Guide Section 711 or other applicable rule, and such issuance will not reduce the number of shares available for issuance under the Plan.

			
	
			
				 (b)
			Reversion of Shares to the Share Reserve.  If a Stock Award or any portion of a Stock Award (i) expires or otherwise terminates without all of the shares covered by the Stock Award having been issued or (ii) is settled in cash (i.e., the Participant receives cash rather than stock), such expiration, termination or settlement will nevertheless reduce (or otherwise offset) the number of shares of Common Stock that are available for issuance under the Plan. If any shares of Common Stock issued under a Stock Award are forfeited back to or repurchased by the Company because of the failure to meet a contingency or condition required to vest such shares in the Participant, then the shares that are forfeited or repurchased will not revert to and again become available for issuance under the Plan. Any shares reacquired by the Company in satisfaction of tax withholding obligations on a Stock Award or as consideration for the exercise or purchase price of a Stock Award will not again become available for issuance under the Plan. 

			
	
			
				 (c)
			Source of Shares. The stock issuable under the Plan will be shares of authorized but unissued or reacquired Common Stock, including shares repurchased by the Company on the open market or otherwise.

			
	
			
				 4.
			Eligibility.

			
	
			
				 (a)
			Eligibility for Specific Stock Awards. Stock Awards may only be granted to persons who are Eligible Employees described in Section 1(a) of the Plan, where the Stock Award is an inducement material to the individual’s entering into employment with the Company or an Affiliate within the meaning of Rule 5635(c)(4) of the NASDAQ Listing Rules, provided however, that Stock Awards may not be granted to Eligible Employees who are providing Continuous Service only to any “parent” of the Company, as such term is defined in Rule 405 of the Securities Act, unless (i) the stock underlying such Stock Awards is treated as “service recipient stock” under Section 409A of the Code (for example, because the Stock Awards are granted pursuant to a corporate transaction such as a spin off transaction), or (ii) the Company, in consultation with its legal counsel, has determined that such Stock Awards are otherwise exempt from or comply with the distribution requirements of Section 409A of the Code. 

			
	
			
				 (b)
			Approval Requirements. All Stock Awards must be granted either by a majority of the Company’s independent directors or the Independent Compensation Committee. 

		
			

		 

		

			3

		

 

		

			
	
			
				 5.
			Provisions Relating to Options.

		
			Each Option will be in such form and will contain such terms and conditions as the Board deems appropriate. All Options will be Nonstatutory Stock Options. The provisions of separate Options need not be identical; provided, however, that each Option Agreement will conform to (through incorporation of provisions hereof by reference in the applicable Option Agreement or otherwise) the substance of each of the following provisions:
		

			
	
			
				 (a)
			Term. No Option will be exercisable after the expiration of 10 years from the date of its grant or such shorter period specified in the Option Agreement.

			
	
			
				 (b)
			Exercise Price. The exercise or strike price of each Option will be not less than 100% of the Fair Market Value of the Common Stock subject to the Option on the date the Option is granted. Notwithstanding the foregoing, an Option may be granted with an exercise price lower than 100% of the Fair Market Value of the Common Stock subject to the Option if such Option is granted pursuant to an assumption of or substitution for another option or stock appreciation right pursuant to a Corporate Transaction and in a manner consistent with the provisions of Section 409A of the Code. 

			
	
			
				 (c)
			Purchase Price for Options. The purchase price of Common Stock acquired pursuant to the exercise of an Option may be paid, to the extent permitted by applicable law and as determined by the Board in its sole discretion, by any combination of the methods of payment set forth below. The Board will have the authority to grant Options that do not permit all of the following methods of payment (or otherwise restrict the ability to use certain methods) and to grant Options that require the consent of the Company to use a particular method of payment. The permitted methods of payment are as follows:

			
	
			
				 (i)
			by cash, check, bank draft or money order payable to the Company;

			
	
			
				 (ii)
			pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of the stock subject to the Option, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds;

			
	
			
				 (iii)
			by delivery to the Company (either by actual delivery or attestation) of shares of Common Stock;

			
	
			
				 (iv)
			by a “net exercise” arrangement pursuant to which the Company will reduce the number of shares of Common Stock issuable upon exercise by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price; provided, however, that the Company will accept a cash or other payment from the Participant to the extent of any remaining balance of the aggregate exercise price not satisfied by such reduction in the number of whole shares to be issued. Shares of Common Stock will no longer be subject to an Option and will not be exercisable thereafter to the extent that (A) shares issuable upon exercise are used to pay the exercise price pursuant to the “net exercise,” (B) shares are delivered to the Participant as a result of such exercise, and (C) shares are withheld to satisfy tax withholding obligations; or

			
	
			
				 (v)
			in any other form of legal consideration that may be acceptable to the Board and specified in the applicable Option Agreement.

			
	
			
				 (d)
			Transferability of Options. The Board may, in its sole discretion, impose such limitations on the transferability of Options as the Board will determine. In the absence of such a determination by the Board to the contrary, the following restrictions on the transferability of Options will apply:

			
	
			
				 (i)
			Restrictions on Transfer. An Option will not be transferable except by will or by the laws of descent and distribution (or pursuant to subsections (ii) and (iii) below), and will be exercisable during the lifetime of the Participant only by the Participant. The Board may permit transfer of the Option in a manner that is not prohibited by applicable tax and securities laws. Except as explicitly provided in the Plan, an Option may not be transferred for consideration. 

			
	
			
				 (ii)
			Domestic Relations Orders. Subject to the approval of the Board or a duly authorized Officer, an Option may be transferred pursuant to the terms of a domestic relations order, official marital settlement agreement or other divorce or separation instrument.  

			
	
			
				 (iii)
			Beneficiary Designation. Subject to the approval of the Board or a duly authorized Officer, a Participant may, by delivering written notice to the Company, in a form approved by the Company (or the designated broker), 

		 

		

			4

		

 

	designate a third party who, on the death of the Participant, will thereafter be entitled to exercise the Option and receive the Common Stock or other consideration resulting from such exercise. In the absence of such a designation, the executor or administrator of the Participant’s estate will be entitled to exercise the Option and receive the Common Stock or other consideration resulting from such exercise. However, the Company may prohibit designation of a beneficiary at any time, including due to any conclusion by the Company that such designation would be inconsistent with the provisions of applicable laws.

			
	
			
				 (e)
			Vesting Generally. The total number of shares of Common Stock subject to an Option may vest and therefore become exercisable in periodic installments that may or may not be equal. The Option may be subject to such other terms and conditions on the time or times when it may or may not be exercised (which may be based on the satisfaction of performance goals or other criteria) as the Board may deem appropriate. The vesting provisions of individual Options may vary. The provisions of this Section ‎5(e) are subject to any Option provisions governing the minimum number of shares of Common Stock as to which an Option may be exercised.

			
	
			
				 (f)
			Termination of Continuous Service. Except as otherwise provided in the applicable Option Agreement or other agreement between the Participant and the Company, if a Participant’s Continuous Service terminates (other than for Cause and other than upon the Participant’s death or Disability), the Participant may exercise his or her Option (to the extent that the Participant was entitled to exercise such Option as of the date of termination of Continuous Service) within the period of time ending on the earlier of (i) the date which occurs 3 months following the termination of the Participant’s Continuous Service, and (ii) the expiration of the term of the Option as set forth in the Option Agreement. If, after termination of Continuous Service, the Participant does not exercise his or her Option within the applicable time frame, the Option will terminate.

			
	
			
				 (g)
			Extension of Termination Date. Except as otherwise provided in the applicable Stock Award Agreement, if the exercise of an Option following the termination of the Participant’s Continuous Service (other than for Cause and other than upon the Participant’s death or Disability) would be prohibited at any time solely because the issuance of shares of Common Stock would violate the registration requirements under the Securities Act, then the Option will terminate on the earlier of (i) the expiration of a total period of time (that need not be consecutive) equal to the applicable post-termination exercise period after the termination of the Participant’s Continuous Service during which the exercise of the Option would not be in violation of such registration requirements, and (ii) the expiration of the term of the Option as set forth in the applicable Option Agreement. In addition, unless otherwise provided in a Participant’s Option Agreement, if the sale of any Common Stock received upon exercise of an Option following the termination of the Participant’s Continuous Service (other than for Cause) would violate the Company’s insider trading policy, then the Option will terminate on the earlier of (i) the expiration of a period of days or months (that need not be consecutive) equal to the applicable post-termination exercise period after the termination of the Participant’s Continuous Service during which the sale of the Common Stock received upon exercise of the Option would not be in violation of the Company’s insider trading policy, or (ii) the expiration of the term of the Option as set forth in the applicable Option Agreement.

			
	
			
				 (h)
			Disability of Participant. Except as otherwise provided in the applicable Option Agreement or other agreement between the Participant and the Company, if a Participant’s Continuous Service terminates as a result of the Participant’s Disability, the Participant may exercise his or her Option (to the extent that the Participant was entitled to exercise such Option as of the date of termination of Continuous Service), but only within such period of time ending on the earlier of (i) the date 12 months following such termination of Continuous Service and (ii) the expiration of the term of the Option as set forth in the Option Agreement. If, after termination of Continuous Service, the Participant does not exercise his or her Option within the applicable time frame, the Option will terminate.

			
	
			
				 (i)
			Death of Participant. Except as otherwise provided in the applicable Option Agreement or other agreement between the Participant and the Company, if (i) a Participant’s Continuous Service terminates as a result of the Participant’s death, or (ii) the Participant dies within the period (if any) specified in the Option Agreement for exercisability after the termination of the Participant’s Continuous Service for a reason other than death, then the Option may be exercised (to the extent the Participant was entitled to exercise such Option as of the date of death) by the Participant’s estate, by a person who acquired the right to exercise the Option by bequest or inheritance or by a person designated to exercise the Option upon the Participant’s death, but only within the period ending on the earlier of (i) the date 18 months following the date of death, and (ii) the expiration of the term of such Option as set forth in the Option Agreement. If, after the Participant’s death, the Option is not exercised within the applicable time frame, the Option will terminate.

			
	
			
				 (j)
			Termination for Cause. Except as explicitly provided otherwise in a Participant’s Stock Award Agreement or other individual written agreement between the Company or any Affiliate and the Participant, if a Participant’s Continuous Service is terminated for Cause, the Option will terminate upon the date on which the event giving rise to the termination for 

		 

		

			5

		

 

	Cause first occurred, and the Participant will be prohibited from exercising his or her Option from and after the date on which the event giving rise to the termination for Cause first occurred (or, if required by applicable law, the date of termination of Continuous Service). If a Participant’s Continuous Service is suspended pending an investigation of the existence of Cause, all of the Participant’s rights under the Option will also be suspended during the investigation period, except to the extent prohibited by applicable law.

			
	
			
				 (k)
			Non-Exempt Employees. If an Option is granted to an Employee who is a non-exempt employee for purposes of the Fair Labor Standards Act of 1938, as amended, the Option will not be first exercisable for any shares of Common Stock until at least 6 months following the date of grant of the Option (although the Option may vest prior to such date). Consistent with the provisions of the Worker Economic Opportunity Act, (i) if such non-exempt Employee dies or suffers a Disability, (ii) upon a Corporate Transaction in which such Option is not assumed, continued, or substituted, or (iii) upon the non-exempt Employee’s retirement (as such term may be defined in the non-exempt Employee’s Option Agreement in another agreement between the non-exempt Employee and the Company, or, if no such definition, in accordance with the Company's then current employment policies and guidelines), the vested portion of any Options may be exercised earlier than 6 months following the date of grant. The foregoing provision is intended to operate so that any income derived by a non-exempt employee in connection with the exercise or vesting of an Option will be exempt from his or her regular rate of pay. To the extent permitted and/or required for compliance with the Worker Economic Opportunity Act to ensure that any income derived by a non-exempt Employee in connection with the exercise, vesting or issuance of any shares under any other Option will be exempt from such Employee’s regular rate of pay, the provisions of this paragraph will apply to all Options and are hereby incorporated by reference into such Option Agreements.

			
	
			
				 6.
			Provisions Relating to Restricted Stock Unit Awards.

		
			Each Restricted Stock Unit Award Agreement will be in such form and will contain such terms and conditions as the Board deems appropriate. The terms and conditions of Restricted Stock Unit Award Agreements may change from time to time, and the terms and conditions of separate Restricted Stock Unit Award Agreements need not be identical. Each Restricted Stock Unit Award Agreement will conform to (through incorporation of the provisions hereof by reference in the Agreement or otherwise) the substance of each of the following provisions:
		

			
	
			
				 (a)
			Consideration. At the time of grant of a Restricted Stock Unit Award, the Board will determine the consideration, if any, to be paid by the Participant upon delivery of each share of Common Stock subject to the Restricted Stock Unit Award. The consideration to be paid (if any) by the Participant for each share of Common Stock subject to a Restricted Stock Unit Award may be paid in any form of legal consideration that may be acceptable to the Board, in its sole discretion, and permissible under applicable law.

			
	
			
				 (b)
			Vesting. At the time of the grant of a Restricted Stock Unit Award, the Board may impose such restrictions on or conditions to the vesting of the Restricted Stock Unit Award as it, in its sole discretion, deems appropriate.

			
	
			
				 (c)
			Payment. A Restricted Stock Unit Award may be settled by the delivery of shares of Common Stock, their cash equivalent, any combination thereof or in any other form of consideration, as determined by the Board and contained in the Restricted Stock Unit Award Agreement.

			
	
			
				 (d)
			Additional Restrictions. At the time of the grant of a Restricted Stock Unit Award, the Board, as it deems appropriate, may impose such restrictions or conditions that delay the delivery of the shares of Common Stock (or their cash equivalent) subject to a Restricted Stock Unit Award to a time after the vesting of such Restricted Stock Unit Award. 

			
	
			
				 (e)
			Dividend Equivalents. Dividend equivalents may be credited in respect of shares of Common Stock covered by a Restricted Stock Unit Award, as determined by the Board and contained in the Restricted Stock Unit Award Agreement. At the sole discretion of the Board, such dividend equivalents may be converted into additional shares of Common Stock covered by the Restricted Stock Unit Award in such manner as determined by the Board. Any additional shares covered by the Restricted Stock Unit Award credited by reason of such dividend equivalents will be subject to all of the same terms and conditions of the underlying Restricted Stock Unit Award Agreement to which they relate.

			
	
			
				 (f)
			Termination of Participant’s Continuous Service. Except as otherwise provided in the applicable Restricted Stock Unit Award Agreement, such portion of the Restricted Stock Unit Award that has not vested will be forfeited upon the Participant’s termination of Continuous Service. 

		
			

		 

		

			6

		

 

		

			
	
			
				 7.
			Covenants of the Company.

			
	
			
				 (a)
			Availability of Shares. The Company will keep available at all times the number of shares of Common Stock reasonably required to satisfy then-outstanding Stock Awards.

			
	
			
				 (b)
			Securities Law Compliance. The Company will seek to obtain from each regulatory commission or agency having jurisdiction over the Plan such authority as may be required to grant Stock Awards and to issue and sell shares of Common Stock upon exercise of the Stock Awards; provided, however, that this undertaking will not require the Company to register under the Securities Act the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any such Stock Award. If, after reasonable efforts and at a reasonable cost, the Company is unable to obtain from any such regulatory commission or agency the authority that counsel for the Company deems necessary for the lawful issuance and sale of Common Stock under the Plan, the Company will be relieved from any liability for failure to issue and sell Common Stock upon exercise of such Stock Awards unless and until such authority is obtained. A Participant will not be eligible for the grant of a Stock Award or the subsequent issuance of cash or Common Stock pursuant to the Stock Award if such grant or issuance would be in violation of any applicable securities law. 

			
	
			
				 (c)
			No Obligation to Notify or Minimize Taxes. The Company will have no duty or obligation to any Participant to advise such holder as to the time or manner of exercising such Stock Award. Furthermore, the Company will have no duty or obligation to warn or otherwise advise such holder of a pending termination or expiration of a Stock Award or a possible period in which the Stock Award may not be exercised. The Company has no duty or obligation to minimize the tax consequences of a Stock Award to the holder of such Stock Award.

			
	
			
				 8.
			Miscellaneous.

			
	
			
				 (a)
			Use of Proceeds from Sales of Common Stock. Proceeds from the sale of shares of Common Stock pursuant to Stock Awards will constitute general funds of the Company.

			
	
			
				 (b)
			Corporate Action Constituting Grant of Stock Awards. Corporate action constituting a grant by the Company of a Stock Award to any Participant will be deemed completed as of the date of such corporate action, unless otherwise determined by the Board, regardless of when the instrument, certificate, or letter evidencing the Stock Award is communicated to, or actually received or accepted by, the Participant. In the event that the corporate records (e.g., Board consents, resolutions or minutes) documenting the corporate action constituting the grant contain terms (e.g., exercise price, vesting schedule or number of shares) that are inconsistent with those in the Stock Award Agreement as a result of a clerical error in the papering of the Stock Award Agreement, the corporate records will control and the Participant will have no legally binding right to the incorrect term in the Stock Award Agreement.

			
	
			
				 (c)
			Stockholder Rights. No Participant will be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Common Stock subject to a Stock Award unless and until (i) such Participant has satisfied all requirements for exercise of, or the issuance of shares of Common Stock under, the Stock Award pursuant to its terms, and (ii) the issuance of the Common Stock subject to such Stock Award has been entered into the books and records of the Company.

			
	
			
				 (d)
			No Employment or Other Service Rights. Nothing in the Plan, any Stock Award Agreement or any other instrument executed thereunder or in connection with any Stock Award granted pursuant thereto will confer upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the time the Stock Award was granted or will affect the right of the Company or an Affiliate to terminate (i) the employment of an Employee with or without notice and with or without cause, including, but not limited to, Cause, (ii) the service of a Consultant pursuant to the terms of such Consultant’s agreement with the Company or an Affiliate, or (iii) the service of a Director pursuant to the bylaws of the Company or an Affiliate, and any applicable provisions of the corporate law of the state in which the Company or the Affiliate is incorporated, as the case may be.

			
	
			
				 (e)
			Change in Time Commitment. In the event a Participant’s regular level of time commitment in the performance of his or her services for the Company and any Affiliates is reduced (for example, and without limitation, if the Participant is an Employee of the Company and the Employee has a change in status from a full-time Employee to a part-time Employee or takes an extended leave of absence) after the date of grant of any Stock Award to the Participant, the Board has the right in its sole discretion to (i) make a corresponding reduction in the number of shares or cash amount subject to any portion of such Stock Award that is scheduled to vest or become payable after the date of such change in time commitment, and (ii) in lieu of or in combination with such a reduction, extend the vesting or payment schedule applicable to such Stock 

		 

		

			7

		

 

	Award. In the event of any such reduction, the Participant will have no right with respect to any portion of the Stock Award that is so reduced or extended.

			
	
			
				 (f)
			Investment Assurances. The Company may require a Participant, as a condition of exercising or acquiring Common Stock under any Stock Award, (i) to give written assurances satisfactory to the Company as to the Participant’s knowledge and experience in financial and business matters and/or to employ a purchaser representative reasonably satisfactory to the Company who is knowledgeable and experienced in financial and business matters and that he or she is capable of evaluating, alone or together with the purchaser representative, the merits and risks of exercising the Stock Award, and (ii) to give written assurances satisfactory to the Company stating that the Participant is acquiring Common Stock subject to the Stock Award for the Participant’s own account and not with any present intention of selling or otherwise distributing the Common Stock. The foregoing requirements, and any assurances given pursuant to such requirements, will be inoperative if (i) the issuance of the shares upon the exercise of a Stock Award or acquisition of Common Stock under the Stock Award has been registered under a then currently effective registration statement under the Securities Act, or (ii) as to any particular requirement, a determination is made by counsel for the Company that such requirement need not be met in the circumstances under the then applicable securities laws. The Company may, upon advice of counsel to the Company, place legends on stock certificates issued under the Plan as such counsel deems necessary or appropriate in order to comply with applicable securities laws, including, but not limited to, legends restricting the transfer of the Common Stock. 

			
	
			
				 (g)
			Withholding Obligations. Unless prohibited by the terms of a Stock Award Agreement, the Company may, in its sole discretion, satisfy any U.S. federal, state, local, foreign or other tax withholding obligation relating to a Stock Award by any of the following means or by a combination of such means: (i) causing the Participant to tender a cash payment; (ii) withholding shares of Common Stock from the shares of Common Stock issued or otherwise issuable to the Participant in connection with the Stock Award; provided, however, that no shares of Common Stock are withheld with a value exceeding the minimum amount of tax required to be withheld by law (or such other amount as may be necessary to avoid classification of the Stock Award as a liability for financial accounting purposes); (iii) withholding cash from a Stock Award settled in cash; (iv) withholding payment from any amounts otherwise payable to the Participant, including proceeds from the sale of shares of Common Stock issued pursuant to a Stock Award; or (v) by such other method as may be set forth in the Stock Award Agreement. 

			
	
			
				 (h)
			Electronic Delivery. Any reference herein to a “written” agreement or document will include any agreement or document delivered electronically, filed publicly at www.sec.gov (or any successor website thereto), or posted on the Company’s intranet (or other shared electronic medium controlled by the Company to which the Participant has access).

			
	
			
				 (i)
			Deferrals. To the extent permitted by applicable law, the Board, in its sole discretion, may determine that the delivery of Common Stock or the payment of cash, upon the exercise, vesting or settlement of all or a portion of any Stock Award may be deferred and may establish programs and procedures for deferral elections to be made by Participants. Deferrals by Participants will be made in accordance with Section 409A of the Code (to the extent applicable to a Participant). Consistent with Section 409A of the Code, the Board may provide for distributions while a Participant is still an employee or otherwise providing services to the Company. The Board is authorized to make deferrals of Stock Awards and determine when, and in what annual percentages, Participants may receive payments, including lump sum payments, following the Participant’s termination of Continuous Service, and implement such other terms and conditions consistent with the provisions of the Plan and in accordance with applicable law.

			
	
			
				 (j)
			Compliance with Section 409A. Unless otherwise expressly provided for in a Stock Award Agreement and the Plan will be interpreted to the greatest extent possible in a manner that makes the Plan and the Stock Awards granted hereunder exempt from Section 409A of the Code, and, to the extent not so exempt, in compliance with Section 409A of the Code. If the Board determines that any Stock Award granted hereunder is not exempt from and is therefore subject to Section 409A of the Code, the Stock Award Agreement evidencing such Stock Award will incorporate the terms and conditions necessary to avoid the consequences specified in Section 409A(a)(1) of the Code, and to the extent a Stock Award Agreement is silent on terms necessary for compliance, such terms are hereby incorporated by reference into the Stock Award Agreement. Notwithstanding anything to the contrary in this Plan (and unless the Stock Award Agreement specifically provides otherwise), if the shares of Common Stock are publicly traded, and if a Participant holding a Stock Award that constitutes “deferred compensation” under Section 409A of the Code is a “specified employee” for purposes of Section 409A of the Code, no distribution or payment of any amount that is due because of a “separation from service” (as defined in Section 409A of the Code) will be issued or paid before the date that is six (6) months following the date of such Participant’s “separation from service” or, if earlier, the date of the Participant’s death, unless such distribution or payment can be made in a manner that complies with Section 409A of the Code, and any amounts so deferred will be paid in a lump sum on the day after such six (6) month period elapses, with the balance paid thereafter on the original schedule.

		
			

		 

		

			8

		

 

		

			
	
			
				 (k)
			Clawback/Recovery. All Stock Awards granted under the Plan will be subject to recoupment in accordance with any clawback policy that the Company is required to adopt pursuant to the listing standards of any national securities exchange or association on which the Company’s securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law. In addition, the Board may impose such other clawback, recovery or recoupment provisions in a Stock Award Agreement as the Board determines necessary or appropriate, including, but not limited to, a reacquisition right in respect of previously acquired shares of Common Stock or other cash or property upon the occurrence of an event constituting Cause. No recovery of compensation under such a clawback policy will be an event giving rise to a right to resign for “good reason” or “constructive termination” (or similar term) under any agreement with the Company or an Affiliate.

			
	
			
				 9.
			Adjustments upon Changes in Common Stock; Other Corporate Events.

			
	
			
				 (a)
			Capitalization Adjustments. In the event of a Capitalization Adjustment, the Board will appropriately and proportionately adjust: (i) the class(es) and maximum number of securities subject to the Plan pursuant to Section 3(a) and (ii) the class(es) and number of securities and price per share of stock subject to outstanding Stock Awards. The Board will make such adjustments, and its determination will be final, binding and conclusive. 

			
	
			
				 (b)
			Dissolution or Liquidation.  In the event of a dissolution or liquidation of the Company, then all outstanding Stock Awards shall terminate immediately prior to such event.

			
	
			
				 (c)
			Corporate Transaction.  In the event of (i) a sale, lease or other disposition of all or substantially all of the securities or assets of the Company, (ii) a merger or consolidation in which the Company is not the surviving corporation or (iii) a reverse merger in which the Company is the surviving corporation but the shares of Common Stock outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise (a “Corporate Transaction”), then any surviving corporation or acquiring corporation may assume any Stock Awards outstanding under the Plan or may substitute similar stock awards (including an award to acquire the same consideration paid to the stockholders in such Corporate Transaction) for those outstanding under the Plan. In the event any surviving corporation or acquiring corporation does not assume such Stock Awards or substitute similar stock awards for those outstanding under the Plan, then with respect to Stock Awards held by Participants whose Continuous Service has not terminated, the vesting of such Stock Awards (and, if applicable, the time during which such Stock Awards may be exercised) shall be accelerated in full, and the Stock Awards shall terminate if not exercised (if applicable) at or prior to such event. With respect to any other Stock Awards outstanding under the Plan, such Stock Awards shall terminate if not exercised (if applicable) prior to such event. 

			
	
			
				 10.
			Termination or Suspension of the Plan.

		
			The Board may suspend or terminate the Plan at any time. No Stock Awards may be granted under the Plan while the Plan is suspended or after it is terminated.
		

			
	
			
				 11.
			Effective Date of Plan; Timing of First Grant or Exercise.

		
			The Plan will come into existence on the Effective Date. No Stock Award may be granted prior to the Effective Date.
		

			
	
			
				 12.
			Choice of Law.

		
			The laws of the State of Delaware will govern all questions concerning the construction, validity and interpretation of this Plan, without regard to that state’s conflict of laws rules.
		

			
	
			
				 13.
			Definitions.  As used in the Plan, the following definitions will apply to the capitalized terms indicated below: 

			
	
			
				 (a)
			“Affiliate” means, at the time of determination, any “parent” or “subsidiary” of the Company, as such terms are defined in Rule 405 of the Securities Act. The Board will have the authority to determine the time or times at which “parent” or “subsidiary” status is determined within the foregoing definition. 

			
	
			
				 (b)
			“Board” means the Board of Directors of the Company.

		
			

		 

		

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				 (c)
			“Capitalization Adjustment” means any change that is made in, or other events that occur with respect to, the Common Stock subject to the Plan or subject to any Stock Award after the Effective Date without the receipt of consideration by the Company through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, large nonrecurring cash dividend, stock split, reverse stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other similar equity restructuring transaction, as that term is used in Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor thereto). Notwithstanding the foregoing, the conversion of any convertible securities of the Company will not be treated as a Capitalization Adjustment.

			
	
			
				 (d)
			“Cause” will have the meaning ascribed to such term in any written agreement between the Participant and the Company or any Affiliate defining such term and, in the absence of such agreement, such term means, with respect to a Participant, the occurrence of any of the following events: (i) such Participant’s conviction of any felony or any crime involving moral turpitude or dishonesty, (ii) such Participant’s participation in a fraud or act of dishonesty against the Company, (iii) such Participant’s conduct that, based upon a good faith and reasonable factual investigation and determination by the Board, demonstrates the Participant’s gross unfitness to serve, or (iv) such Participant’s intentional, material violation of any contract between the Company and the Participant or any statutory duty that the Participant has to the Company that the Participant does not correct within 30 days after written notice to the Participant thereof. The determination as to whether a Participant is being terminated for Cause will be made in good faith by the Company and will be final and binding on the Participant. Any determination by the Company that the Continuous Service of a Participant was terminated with or without Cause for the purposes of outstanding Stock Awards held by such Participant will have no effect upon any determination of the rights or obligations of the Company, any Affiliate or such Participant for any other purpose. 

			
	
			
				 (e)
			“Code” means the U.S. Internal Revenue Code of 1986, as amended, including any applicable regulations and guidance thereunder.

			
	
			
				 (f)
			“Committee” means a committee of one (1) or more Independent Directors to whom authority has been delegated by the Board in accordance with Section ‎2(c).

			
	
			
				 (g)
			“Common Stock” means the common stock of the Company.

			
	
			
				 (h)
			“Company” means Rigel Pharmaceuticals, Inc., a Delaware corporation.

			
	
			
				 (i)
			“Consultant” means any person, including an advisor, who is (i) engaged by the Company or an Affiliate to render consulting or advisory services and is compensated for such services, or (ii) serving as a member of the board of directors of an Affiliate and is compensated for such services. However, service solely as a Director, or payment of a fee for such service, will not cause a Director to be considered a “Consultant” for purposes of the Plan. Notwithstanding the foregoing, a person is treated as a Consultant under this Plan only if a Form S-8 Registration Statement under the Securities Act is available to register either the offer or the sale of the Company’s securities to such person. 

			
	
			
				 (j)
			“Continuous Service” means that the Participant’s service with the Company or an Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. A change in the capacity in which the Participant renders service to the Company or an Affiliate as an Employee, Consultant or Director or a change in the Entity for which the Participant renders such service, provided that there is no interruption or termination of the Participant’s service with the Company or an Affiliate, will not terminate a Participant’s Continuous Service. For example, a change in status from an Employee of the Company to a Consultant of an Affiliate or to a Director will not constitute an interruption of Continuous Service. If the Entity for which a Participant is rendering services ceases to qualify as an Affiliate, as determined by the Board in its sole discretion, such Participant’s Continuous Service will be considered to have terminated on the date such Entity ceases to qualify as an Affiliate. To the extent permitted by law, the Board or the chief executive officer of the Company, in that party’s sole discretion, may determine whether Continuous Service will be considered interrupted in the case of (i) any leave of absence approved by the Board or chief executive officer, including sick leave, military leave or any other personal leave, or (ii) transfers between the Company, an Affiliate, or their successors. In addition, if required for exemption from or compliance with Section 409A of the Code, the determination of whether there has been a termination of Continuous Service will be made, and such term will be construed, in a manner that is consistent with the definition of “separation from service” as defined under Treasury Regulation Section 1.409A-1(h). A leave of absence will be treated as Continuous Service for purposes of vesting in a Stock Award only to such extent as may be provided in the Company’s leave of absence policy, in the written terms of any leave of absence agreement or policy applicable to the Participant, or as otherwise required by law. 

		
			

		 

		

			10

		

 

		

			
	
			
				 (k)
			“Director” means a member of the Board. Directors are not eligible to receive Stock Awards under the Plan with respect to their service in such capacity.

			
	
			
				 (l)
			“Disability” means the permanent and total disability of a person within the meaning of Section 22(e)(3) of the Code. 

			
	
			
				 (m)
			“Effective Date” means October 10, 2016.

			
	
			
				 (n)
			“Employee” means any person employed by the Company or an Affiliate. However, service solely as a Director, or payment of a fee for such services, will not cause a Director to be considered an “Employee” for purposes of the Plan. 

			
	
			
				 (o)
			“Entity” means a corporation, partnership, limited liability company or other entity.

			
	
			
				 (p)
			“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

			
	
			
				 (q)
			“Fair Market Value”  means, as of any date, the value of the Common Stock determined as follows:

			
	
			
				 (i)
			If the Common Stock is listed on any established stock exchange or traded on any established market, the Fair Market Value of a share of Common Stock will be, unless otherwise determined by the Board, the closing sales price for such stock as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in the Common Stock) on the last market trading day prior to the date of determination, as reported in a source the Board deems reliable.

			
	
			
				 (ii)
			Unless otherwise provided by the Board, if there is no closing sales price for the Common Stock on the date of determination, then the Fair Market Value will be the closing selling price on the last preceding date for which such quotation exists.

			
	
			
				 (iii)
			In the absence of such markets for the Common Stock, the Fair Market Value will be determined by the Board in good faith and in a manner that complies with Sections 409A of the Code.

			
	
			
				 (r)
			“Independent Director” has the meaning set forth in Section 1(a) above.

			
	
			
				 (s)
			“Non-Employee Director” means a Director who either (i) is not a current employee or officer of the Company or an Affiliate, does not receive compensation, either directly or indirectly, from the Company or an Affiliate for services rendered as a consultant or in any capacity other than as a Director (except for an amount as to which disclosure would not be required under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act (“Regulation S-K”)), does not possess an interest in any other transaction for which disclosure would be required under Item 404(a) of Regulation S-K, and is not engaged in a business relationship for which disclosure would be required pursuant to Item 404(b) of Regulation S-K; or (ii) is otherwise considered a “non-employee director” for purposes of Rule 16b-3 of the Exchange Act.

			
	
			
				 (t)
			“Nonstatutory Stock Option” means any option granted pursuant to Section ‎4(b) of the Plan that does not qualify as an “incentive stock option” within the meaning of Section 422 of the Code.

			
	
			
				 (u)
			“Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act. 

			
	
			
				 (v)
			“Option” means a Nonstatutory Stock Option to purchase shares of Common Stock granted pursuant to the Plan.

			
	
			
				 (w)
			“Option Agreement” means a written agreement between the Company and an Optionholder evidencing the terms and conditions of an Option grant. Each Option Agreement will be subject to the terms and conditions of the Plan.

			
	
			
				 (x)
			“Optionholder” means a person to whom an Option is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Option.

		
			

		 

		

			11

		

 

		

			
	
			
				 (y)
			“Participant” means a person to whom a Stock Award is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Stock Award.

			
	
			
				 (z)
			“Plan” means this Rigel Pharmaceuticals, Inc. Inducement Plan, as it may be amended.

			
	
			
				 (aa)
			“Restricted Stock Unit Award” means a right to receive shares of Common Stock which is granted pursuant to the terms and conditions of Section 6(b).

			
	
			
				 (bb)
			“Restricted Stock Unit Award Agreement” means a written agreement between the Company and a holder of a Restricted Stock Unit Award evidencing the terms and conditions of a Restricted Stock Unit Award grant. Each Restricted Stock Unit Award Agreement will be subject to the terms and conditions of the Plan. 

			
	
			
				 (cc)
			“Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3, as in effect from time to time.

			
	
			
				 (dd)
			“Securities Act” means the Securities Act of 1933, as amended.

			
	
			
				 (ee)
			“Stock Award” means any right to receive Common Stock granted under the Plan, including an Option or a Restricted Stock Unit Award. 

			
	
			
				 (ff)
			  “Stock Award Agreement” means a written agreement between the Company and a Participant evidencing the terms and conditions of a Stock Award grant. Each Stock Award Agreement will be subject to the terms and conditions of the Plan.

		
			 
		

		
			 
		

		 

		

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