Document:

Exhibit
4.10

 

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.

 

COMMON STOCK PURCHASE WARRANT

	
  Warrant
  No. CS-7

  	
   

  	
  500,000 Shares

  
	
  October
  18, 2002

  	
   

  	
   

  

 

 

RIGEL PHARMACEUTICALS, INC.

WARRANT FOR THE PURCHASE OF SHARES
OF COMMON STOCK

1.             Issuance.  For value received, this Warrant is issued
to KWACKER LIMITED, a corporation organized and
existing under the laws of England, by RIGEL PHARMACEUTICALS, INC.,
a Delaware corporation (hereinafter with its successors called the “Company”),
in partial consideration for that certain Amendment No. One to
Build-to-Suit Lease, dated as of the date hereof, between the Company and
Slough BTC, LLC, as landlord.

2.             Purchase
Price; Number of Shares.  The
registered holder of this Warrant (the “Holder”), commencing on the date hereof,
is entitled upon surrender of this Warrant with the subscription form annexed
hereto duly executed, at the principal office of the Company, to purchase from
the Company five hundred thousand (500,000) fully paid and nonassessable shares
(the “Shares”)
of common stock, $.001 par value per share, of the Company (the “Common
Stock”), at a price per share of $1.97 (the “Purchase Price”).  Until such time as this Warrant is exercised
in full or expires, the Purchase Price and the securities issuable upon
exercise of this Warrant are subject to adjustment as hereinafter
provided.  The person or persons under
whose name or names any certificate representing shares of Common Stock is
issued hereunder shall be deemed to have become the holder of record of the
shares represented thereby as at the close of business on the date this Warrant
is exercised with respect to such shares, whether or not the transfer books of
the Company shall be closed.

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

 

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4.             Net Issue Election.  The Holder may elect to receive, without the
payment by the Holder of any additional consideration, shares of Common Stock
equal to the value of this Warrant or any portion hereof by the surrender of
this Warrant or such portion to the Company, with the net issue election notice
annexed hereto duly executed, at the principal office of the Company.  Thereupon, the Company shall issue to the
Holder such number of fully paid and nonassessable shares of Common Stock as is
computed using the following formula:

	
  X
  = 

  	
  Y(A-B)

  	
   

  
	
  A

  	
   

  

 

where:                                                             X =          the number of shares of Common Stock
to be issued to the Holder pursuant to this Section 4.

                                                                                                Y =          the number of shares of Common Stock
covered by this Warrant in respect of which the net issue election is made pursuant
to this Section 4.

                                                                                                A =         the Fair Market Value (defined below)
of one share of Common Stock, as determined at the time the net issue election
is made pursuant to this Section 4.

                                                                                                B =          the Purchase Price in effect under
this Warrant at the time the net issue election is made pursuant to this
Section 4.

“Fair Market Value” of a share of Common Stock as of a particular date
(the “Determination Date”) shall mean the average of the closing or last
reported sale prices of the Common Stock as reported on the Nasdaq National
Market over the 30-day period ending five business days prior to the
Determination Date; provided, however, that if (i) the Common
Stock is neither traded on the Nasdaq National Market nor on a national
securities exchange, then Fair Market Value shall be the average of the closing
or last reported sale prices of the Common Stock over the 30-day period ending
five business days prior to the Determination Date reflected in the
over-the-counter market, as reported by the National Quotation Bureau, Inc. or
any organization performing a similar function, or if closing prices are not
then routinely reported for the over-the-counter market, the average of the
last bid and asked prices of the Common Stock over the 30-day period ending
five business days prior to the Determination Date and (ii) if there is no
public market for the Common Stock, then Fair Market Value shall be determined
in good faith by the Company’s Board of Directors.

5.             Partial
Exercise.  This
Warrant may be exercised in part, and the Holder shall be entitled to receive a
new warrant, which shall be dated as of the date of this Warrant, covering the
number of shares in respect of which this Warrant shall not have been
exercised.

6.             Fractional
Shares.  In no event shall any
fractional share of Common Stock be issued upon any exercise of this
Warrant.  If, upon exercise of this
Warrant as an entirety, the Holder would, except as provided in this Section 6,
be entitled to receive a fractional share of Common Stock, then the Company shall
pay in lieu thereof, the Fair Market Value of such fractional share in cash.

 

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7.             Expiration
Date.  This Warrant or any Successor
Warrant (as defined in Section 10 below) shall remain exercisable until the
close of business on October 18, 2007, when it shall expire and thereafter be
void.

8.             Reserved
Shares; Valid Issuance.  The
Company covenants that it will at all times from and after the date hereof
reserve and keep available such number of its authorized shares of Common
Stock, free from all preemptive or similar rights therein, as will be
sufficient to permit the exercise of this Warrant in full into shares of Common
Stock upon such exercise.  The Company further
covenants that such shares as may be issued pursuant to such exercise will,
upon issuance, be duly and validly issued, fully paid and nonassessable and
free from all taxes, liens and charges with respect to the issuance thereof.

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

10.          Mergers
and Reclassifications.

                (a)           If after the date hereof the Company shall enter into any
Reorganization (as hereinafter defined), then, as a condition of such Reorganization,
lawful provisions shall be made, and duly executed documents evidencing the
same from the Company or its successor shall be delivered to the Holder (a
“Successor Warrant”), so that the Holder shall thereafter have the right to
purchase, at a total price not to exceed that payable upon the exercise of this
Warrant in full, the kind and amount of shares of stock and other securities
and property receivable upon such Reorganization by a holder of the number of
shares of Common Stock which might have been purchased by the Holder
immediately prior to such Reorganization, and in any such case appropriate
provisions shall be made with respect to the rights and interest of the Holder
to the end that the provisions hereof (including without limitation, provisions
for the adjustment of the Purchase Price and the number of shares issuable
hereunder and the provisions relating to the net issue election) shall
thereafter be applicable in relation to any shares of stock or other securities
and property thereafter deliverable upon exercise hereof.

                (b)           If, after the
date hereof the Company shall enter into any Acquisition Transaction (as
hereinafter defined) pursuant to which the Consideration Per Share (as
hereinafter defined) is less than the Purchase Price  (prior to any adjustment under Section 10(a)
with respect to such Acquisition Transaction), then in addition to any
adjustment of the Purchase Price under Section 10(a) with respect to such
Acquisition Transaction, the Purchase Price shall
be reduced to a price equal to the product of (a) the Purchase Price times (b)
the difference of (i) one minus (ii) a fraction the numerator of which is equal
to the product of (A) number of Shares times (B) the Purchase Price and the
denominator of which is equal to the sum of (Y) the product 

 

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of (1) the number of Shares times (2) the Purchase Price plus (Z) the
aggregate consideration to be received by the Company’s stockholders in the
Acquisition Transaction.

(c)           For the purposes of this Section 10:

                (i)            the term “Acquisition Transaction”
shall include without limitation any consolidation of the Company with, or
merger of the Company into, another corporation or other business organization
(other than a merger in which the Company is the surviving corporation and
which does not result in any reclassification or change of the outstanding
Common Stock);

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

                (iii)          the term “Consideration Per Share”
shall equal the closing or last reported sale price of the Common Stock as
reported on the Nasdaq National Market on the first business day immediately
following the public announcement of the Reorganization (such business day
being hereinafter referred to as the “Announcement Date”); provided, however, that if
(i) the Common Stock is neither traded on the Nasdaq National Market nor on a
national securities exchange, then Consideration Per Share shall be the last
reported sale price of the Common Stock on the Announcement Date reflected in
the over-the-counter market, as reported by the National Quotation Bureau, Inc.
or any organization performing a similar function, or if closing prices are not
then routinely reported for the over-the-counter market, the average of the
last bid and asked price of the Common Stock on the Announcement Date and (ii)
if there is no public market for the Common Stock, then Fair Market Value shall
be determined in good faith by the Company’s Board of Directors.

11.          Certificate
of Adjustment.  Whenever
the Purchase Price is adjusted, as herein provided, the Company shall promptly
deliver to the Holder a certificate of the Company’s Chief Financial Officer
setting forth the Purchase Price after such adjustment and setting forth a
brief statement of the facts requiring such adjustment.

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

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

(b)           any
reclassification of the capital stock of the Company, capital reorganization of
the Company, consolidation or merger involving the Company, or sale or
conveyance of all or substantially all of its assets; or

 

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

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

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

(a)           The Company has
all necessary authority to issue, execute and deliver this Warrant and to
perform its obligations hereunder.  This
Warrant has been duly authorized issued, executed and delivered by the Company
and is the valid and binding obligation of the Company, enforceable in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization or other similar laws of general
application affecting the enforcement of Holders rights or by general equity
principals or public policy concerns.

(b)           The shares of
Common Stock issuable upon the exercise of this Warrant have been duly authorized
and reserved for issuance by the Company and, when issued in accordance with
the terms hereof, will be validly issued, fully paid and nonassessable.

(c)           The issuance,
execution and delivery of this Warrant do not, and the issuance of the shares
of Common Stock upon the exercise of this Warrant in accordance with the terms
hereof will not, (i) violate or contravene the Company’s Amended and Restated
Certificate of Incorporation or by-laws, or any law, statute, regulation, rule,
judgment or order applicable to the Company, (ii) violate, contravene or result
in a breach or default under any material contract, agreement or instrument to
which the Company is a party or by which the Company or any of its assets are
bound or (iii) require the consent or approval of or the filing of any
notice or registration with any person or entity.

14.          Amendment
and Waiver.  The terms
of this Warrant may be amended, modified or waived only with the written
consent of the party against which enforcement of the same is sought.

15.          Representations
and Covenants of the Holder.  This Common Stock Purchase Warrant has been entered into by the
Company in reliance upon the following representations and covenants of the
Holder, which by its execution hereof the Holder hereby confirms:

(a)           Investment
Purpose.  The right to acquire Common
Stock or the Common Stock issuable upon exercise of the Holder’s rights
contained herein will be acquired for investment and not with a view to the
sale or distribution of any part thereof, and the Holder has no present
intention of selling or engaging in any public distribution of the same except
pursuant to a registration or exemption.

 

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(b)           Accredited
Investor.  Holder is
an “accredited investor” within the meaning of the Securities and Exchange Rule
501 of Regulation D, as presently in effect.

(c)           Private
Issue.  The Holder understands (i)
that the Common Stock issuable upon exercise of the Holder’s rights contained
herein is not registered under the 1933 Act or qualified under applicable state
securities laws on the ground that the issuance contemplated by this Warrant
will be exempt from the registration and qualifications requirements thereof
and (ii) that the Company’s reliance on such exemption is predicated on the
representations set forth in this Section 15.

(d)           Financial
Risk.  The Holder has such knowledge
and experience in financial and business matters as to be capable of evaluating
the merits and risks of its investment and has the ability to bear the economic
risks of its investment.

16.          Notices, Transfers, Etc.

(a)           Any notice or
written communication required or permitted to be given to the Holder may be
given by certified mall or delivered to the Holder at the address most recently
provided by the Holder to the Company.

(b)           Subject to
compliance with applicable federal and state securities laws, this Warrant may
be transferred by the Holder with respect to any or all of the shares
purchasable hereunder.  Upon surrender
of this Warrant to the Company, together with the assignment notice annexed
hereto duly executed, for transfer of this Warrant as an entirety by the
Holder, the Company shall issue a new warrant of the same denomination to the
assignee.  Upon surrender of this
Warrant to the Company, together with the assignment hereof properly endorsed,
by the Holder for transfer with respect to a portion of the shares of Common
Stock purchasable hereunder, the Company shall issue a new warrant to the
assignee, in such denomination as shall be requested by the Holder hereof, and
shall issue to such Holder a new warrant covering the number of shares in
respect of which this Warrant shall not have been transferred.

(c)           In case this
Warrant shall be mutilated, lost, stolen or destroyed, the Company shall issue
a new warrant of like tenor and denomination and deliver the same (i) in
exchange and substitution for and upon surrender and cancellation of any
mutilated Warrant or (ii) in lieu of any Warrant lost, stolen or destroyed,
upon receipt of an affidavit of the Holder or other evidence reasonably
satisfactory to the Company of the loss, theft or destruction of such Warrant
and an indemnification of loss by the Holder in favor of the Company.

                17.          Transfer to Comply with the Securities
Act of 1933.   This Warrant
may not be exercised and neither this Warrant nor any of the Shares, nor any
interest in either, may be offered, sold, assigned, pledged, hypothecated,
encumbered or in any other manner transferred or disposed of, in whole or in
part, except in compliance with applicable United States federal and state
securities laws and the terms and conditions hereof.  Each Warrant shall bear a legend in substantially the same form
as the legend set forth on the first page of this Warrant.  Each certificate for Shares issued upon
exercise of this Warrant, unless at the time of exercise such Shares are
acquired pursuant to a registration statement that has been declared effective
under the 

 

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Securities Act of 1933, as amended (the “Securities
Act”), and applicable blue sky laws, shall bear a legend substantially in the
following form:

                                                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.

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

18.          Rights
of Holder.  Holder shall not, by virtue hereof, be
entitled to any rights of a stockholder of the Company, either at law or
equity, and the rights of Holder are limited to those expressed in this
Warrant.  Nothing contained in this
Warrant shall be construed as conferring upon Holder hereof the right to vote
or to consent or to receive notice as a stockholder of the Company on any
matters or with respect to any rights whatsoever as a stockholder of the
Company.  No dividends or interest shall
be payable or accrued in respect of this Warrant or the interest represented
hereby or the Shares purchasable hereunder until, and only to the extent that,
this Warrant shall have been exercised in accordance with its terms.

19.          “Market Stand Off” Agreement. Holder hereby agrees not
sell, transfer, make any short sale of, grant any option for the purchase of,
or enter into any hedging or similar transaction with the same economic effect
as a sale of, any Common Stock (or other securities) of the Company held by
Holder for a period specified by a representative of the underwriters of Common
Stock (or other securities) of the Company not to exceed ninety (90) days
following the effective date of a registration statement of the Company filed
under the Securities Act; provided that all officers and directors
of the Company and each holder of that number of shares of Common Stock equal
to or greater than the number of Shares then issuable upon exercise of this
Warrant enter into similar agreements.

20.          No
Impairment.  The
Company will not, by amendment of its Certificate or through any
reclassification, capital reorganization, consolidation, merger, sale or
conveyance of 

 

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assets, dissolution, liquidation, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance of performance of
any of the terms of this Warrant, but will at all times in good faith assist in
the carrying out of all such terms and in the taking of all such action as may
be necessary or appropriate in order to protect the rights of the Holder.

21.          Governing
Law.  The provisions and terms of
this Warrant shall be governed by and construed in accordance with the internal
laws of the State of California.

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

23.          Business Days.  If the last or appointed day for the taking
of any action required or the expiration of any rights granted herein shall be
a Saturday or Sunday or a legal holiday in California, then such action may be
taken or right may be exercised on the next succeeding day which is not a
Saturday or Sunday or such a legal holiday.

 

 

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IN WITNESS
WHEREOF, the Company has duly caused this Warrant to be
signed by its duly authorized officer and to be dated as of the date first
written above.

 

	
   

  	
  Company:  

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  RIGEL
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  James M. Gower

  
	
   

  	
   

  	
  James
  M. Gower

  Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
				

 

 

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SUBSCRIPTION

	
  To:

  	
   

  	
   

  	
  Date:

  	
   

  

 

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

	
   

  	
   

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name
  for Registration

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Mailing
  Address

  

 

 

NET ISSUE ELECTION NOTICE

	
  To:

  	
   

  	
   

  	
  Date:

  	
   

  

 

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

	
   

  	
   

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name
  for Registration

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Mailing
  Address

  

 

 

 

ASSIGNMENT

For value received _______________________________________ hereby
sells, assigns and transfers unto 

 

	
   

  
	
   

  
	
   

  
	
  [Please print or type the name and address of Assignee]

  
	
   

  
	
   

  

the within Warrant, and does
hereby irrevocably constitute and appoint ___________________ _______________
its attorney to transfer the within Warrant on the books of the within named
Company with full power of substitution on the premises.

	
  DATED:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  IN THE
  PRESENCE OF:Exhibit
4.11

 

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.

 

COMMON
STOCK PURCHASE WARRANT

	
  Warrant No. CS-

  	
   

  	
  186,916 Shares

  
	
  December 24, 2002

  	
   

  	
   

  

 

RIGEL
PHARMACEUTICALS, INC.

WARRANT FOR THE PURCHASE OF SHARES OF COMMON STOCK

1.             Issuance. 
For value received, this Warrant is issued to LIGHTHOUSE
CAPITAL PARTNERS IV, L.P., a Delaware limited partnership, by RIGEL PHARMACEUTICALS, INC., a Delaware
corporation (hereinafter with its successors called the “Company”).

2.             Purchase
Price; Number of Shares.  The registered holder of this
Warrant (the “Holder”), commencing on the date hereof, is entitled upon
surrender of this Warrant with the subscription form annexed hereto duly
executed, at the principal office of the Company, to purchase from the Company
one hundred eighty-six thousand, nine hundred sixteen  (186,916) fully paid and nonassessable shares (the “Shares”)
of common stock, $.001 par value per share, of the Company (the “Common Stock”),
at a price per share of $1.07 (the “Purchase Price”).  Until such time as this Warrant is exercised
in full or expires, the Purchase Price and the securities issuable upon
exercise of this Warrant are subject to adjustment as hereinafter provided.  The person or persons under whose name or
names any certificate representing shares of Common Stock is issued hereunder
shall be deemed to have become the holder of record of the shares represented
thereby as at the close of business on the date this Warrant is exercised with
respect to such shares, whether or not the transfer books of the Company shall
be closed.

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

4.             Net
Issue Election.  The Holder may elect to receive, without the
payment by the Holder of any additional consideration, shares of Common Stock
equal to the value of this Warrant or any portion hereof by the surrender of
this Warrant or such portion to the Company, 

 

1

 

with
the net issue election notice annexed hereto duly executed, at the principal
office of the Company.  Thereupon, the
Company shall issue to the Holder such number of fully paid and nonassessable
shares of Common Stock as is computed using the following formula:

	
  X
  = 

  	
  Y(A-B)

  	
   

  
	
  A

  	
   

  

where:                                                             X =          the
number of shares of Common Stock to be issued to the Holder pursuant to this
Section 4.

                                                                                                Y =          the
number of shares of Common Stock covered by this Warrant in respect of which
the net issue election is made pursuant to this Section 4.

                                                                                                A =         the
Fair Market Value (defined below) of one share of Common Stock, as determined
at the time the net issue election is made pursuant to this Section 4.

                                                                                                B =          the
Purchase Price in effect under this Warrant at the time the net issue election
is made pursuant to this Section 4.

“Fair Market
Value” of a share of Common Stock as of a particular date (the “Determination
Date”) shall mean the average of the closing or last reported sale prices of
the Common Stock as reported on the Nasdaq National Market over the 30-day
period ending five business days prior to the Determination Date; provided,
however, that if (i) the Common Stock is neither traded on the
Nasdaq National Market nor on a national securities exchange, then Fair Market
Value shall be the average of the closing or last reported sale prices of the
Common Stock over the 30-day period ending five business days prior to the
Determination Date reflected in the over-the-counter market, as reported by the
National Quotation Bureau, Inc. or any organization performing a similar
function, or if closing prices are not then routinely reported for the
over-the-counter market, the average of the last bid and asked prices of the
Common Stock over the 30-day period ending five business days prior to the
Determination Date and (ii) if there is no public market for the Common Stock,
then Fair Market Value shall be determined in good faith by the Company’s Board
of Directors.

5.             Partial
Exercise.  This Warrant may be exercised in part, and
the Holder shall be entitled to receive a new warrant, which shall be dated as
of the date of this Warrant, covering the number of shares in respect of which
this Warrant shall not have been exercised.

6.             Fractional
Shares.  In no event shall any fractional share of
Common Stock be issued upon any exercise of this Warrant.  If, upon exercise of this Warrant as an
entirety, the Holder would, except as provided in this Section 6, be entitled
to receive a fractional share of Common Stock, then the Company shall pay in
lieu thereof, the Fair Market Value of such fractional share in cash.

 

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7.             Expiration
Date; Automatic Exercise.  Except as otherwise set forth
in Section 10, this Warrant shall expire on the close of business on December
23, 2007, and shall be void thereafter.

8.             Reserved
Shares; Valid Issuance.  The Company covenants that it
will at all times from and after the date hereof reserve and keep available
such number of its authorized shares of Common Stock, free from all preemptive
or similar rights therein, as will be sufficient to permit the exercise of this
Warrant in full into shares of Common Stock upon such exercise.  The Company further covenants that such
shares as may be issued pursuant to such exercise will, upon issuance, be duly
and validly issued, fully paid and nonassessable and free from all taxes, liens
and charges with respect to the issuance thereof.

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

10.          Mergers and
Reclassifications.  If after the date hereof the Company shall
enter into any Reorganization (as hereinafter defined), then, as a condition of
such Reorganization, lawful provisions shall be made, and duly executed
documents evidencing the same from the Company or its successor shall be
delivered to the Holder, so that the Holder shall thereafter have the right to
purchase, at a total price not to exceed that payable upon the exercise of this
Warrant in full, the kind and amount of shares of stock and other securities
and property receivable upon such Reorganization by a holder of the number of
shares of Common Stock which might have been purchased by the Holder
immediately prior to such Reorganization, and in any such case appropriate
provisions shall be made with respect to the rights and interest of the Holder
to the end that the provisions hereof (including without limitation, provisions
for the adjustment of the Purchase Price and the number of shares issuable
hereunder and the provisions relating to the net issue election) shall
thereafter be applicable in relation to any shares of stock or other securities
and property thereafter deliverable upon exercise hereof.  For the purposes of this Section 10, the
term “Reorganization” shall include without limitation any reclassification,
capital reorganization or change of the Common Stock (other than as a result of
a subdivision, combination or stock dividend provided for in Section 9 hereof),
or any consolidation of the Company with, or merger of the Company into,
another corporation or other business organization (other than a merger in
which the Company is the surviving corporation and which does not result in any
reclassification or change of the outstanding Common Stock), or any sale or
conveyance to another corporation or other business organization of all or
substantially all of the assets of the Company.

Notwithstanding
the term of this Warrant fixed pursuant to Section 7 above and the provisions
of this Section 10, 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 

 

3

 

corporation (other
than a merger or consolidation for the principal purpose of changing the
domicile of the Company), and provided that any securities received in such
merger or consolidation are publicly traded or the sale of all or substantially
all of the Company’s capital stock, properties and assets 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”), 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.

The
Company shall notify the Holder at least fifteen (15) calendar days prior to
any proposed Merger, and if the Company fails to deliver such notice, then
notwithstanding anything to the contrary in this Warrant, the rights to
purchase the Company’s Common Stock (or the shares of stock and other
securities and property receivable upon such Merger by a holder of Common Stock
(the “Other
Consideration”)) shall not expire. 
The Holder may exercise the Warrant contingent upon the closing of the
Merger.  If the Merger does not close
within 60 days after notice, any contingent exercise shall be void.

11.          Certificate
of Adjustment.  Whenever the Purchase Price is adjusted, as
herein provided, the Company shall promptly deliver to the Holder a certificate
of the Company’s Chief Financial Officer setting forth the Purchase Price after
such adjustment and setting forth a brief statement of the facts requiring such
adjustment.

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

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

(b)           any reclassification of the capital stock
of the Company, capital reorganization of the Company, consolidation or merger
involving the Company, or sale or conveyance of all or substantially all of its
assets; or

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

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

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

 

4

 

(a)           The Company has all necessary authority
to issue, execute and deliver this Warrant and to perform its obligations
hereunder.  This Warrant has been duly
authorized issued, executed and delivered by the Company and is the valid and
binding obligation of the Company, enforceable in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws of general application affecting the
enforcement of Holders rights or by general equity principals or public policy
concerns.

(b)           The shares of Common Stock issuable upon
the exercise of this Warrant have been duly authorized and reserved for
issuance by the Company and, when issued in accordance with the terms hereof,
will be validly issued, fully paid and nonassessable.

(c)           The issuance, execution and delivery of
this Warrant do not, and the issuance of the shares of Common Stock upon the
exercise of this Warrant in accordance with the terms hereof will not, (i)
violate or contravene the Company’s Amended and Restated Certificate of
Incorporation or by-laws, or any law, statute, regulation, rule, judgment or
order applicable to the Company, (ii) violate, contravene or result in a breach
or default under any material contract, agreement or instrument to which the
Company is a party or by which the Company or any of its assets are bound or
(iii) require the consent or approval of or the filing of any notice or
registration with any person or entity.

(d)           The
shares of Common Stock issuable upon the exercise of this Warrant shall be
listed for quotation on the Nasdaq National Market (or such other quotation or
listing system or exchange where the Company’s shares of capital stock are then
quoted, listed or exchanged for public sale).

14.          Amendment
and Waiver.  The terms of this Warrant may be amended,
modified or waived only with the written consent of the party against which
enforcement of the same is sought.

15.          Representations
and Covenants of the Holder.  This Common
Stock Purchase Warrant has been entered into by the Company in reliance upon
the following representations and covenants of the Holder, which by its
execution hereof the Holder hereby confirms:

(a)           Investment
Purpose.  The right to acquire Common Stock or the
Common Stock issuable upon exercise of the Holder’s rights contained herein
will be acquired for investment and not with a view to the sale or distribution
of any part thereof, and the Holder has no present intention of selling or
engaging in any public distribution of the same except pursuant to a
registration or exemption.

(b)           Accredited
Investor.  Holder is an “accredited investor” within
the meaning of the Securities and Exchange Rule 501 of Regulation D, as
presently in effect.

(c)           Private
Issue.  The Holder understands (i) that the Common
Stock issuable upon exercise of the Holder’s rights contained herein is not
registered under the 1933 Act or qualified under applicable state securities
laws on the ground that the issuance contemplated by this Warrant will be
exempt from the registration and qualifications 

 

5

 

requirements
thereof and (ii) that the Company’s reliance on such exemption is predicated on
the representations set forth in this Section 15.

(d)           Financial
Risk.  The Holder has such knowledge and experience
in financial and business matters as to be capable of evaluating the merits and
risks of its investment and has the ability to bear the economic risks of its
investment.

16.          Notices,
Transfers, Etc.

(a)           Any notice or written communication
required or permitted to be given to the Holder may be given by certified mall
or delivered to the Holder at the address most recently provided by the Holder
to the Company.

(b)           Subject to compliance with applicable
federal and state securities laws, this Warrant may be transferred by the
Holder with respect to any or all of the shares purchasable hereunder.  Upon surrender of this Warrant to the
Company, together with the assignment notice annexed hereto duly executed, for
transfer of this Warrant as an entirety by the Holder, the Company shall issue
a new warrant of the same denomination to the assignee.  Upon surrender of this Warrant to the
Company, together with the assignment hereof properly endorsed, by the Holder
for transfer with respect to a portion of the shares of Common Stock
purchasable hereunder, the Company shall issue a new warrant to the assignee,
in such denomination as shall be requested by the Holder hereof, and shall
issue to such Holder a new warrant covering the number of shares in respect of
which this Warrant shall not have been transferred.

(c)           In case this Warrant shall be mutilated,
lost, stolen or destroyed, the Company shall issue a new warrant of like tenor
and denomination and deliver the same (i) in exchange and substitution for and
upon surrender and cancellation of any mutilated Warrant or (ii) in lieu of any
Warrant lost, stolen or destroyed, upon receipt of an affidavit of the Holder
or other evidence reasonably satisfactory to the Company of the loss, theft or
destruction of such Warrant and an indemnification of loss by the Holder in
favor of the Company.

Transfer
to Comply with the Securities Act of 1933.   This Warrant may not be exercised and neither this Warrant nor any
of the Shares, nor any interest in either, may be offered, sold, assigned,
pledged, hypothecated, encumbered or in any other manner transferred or
disposed of, in whole or in part, except in compliance with applicable United
States federal and state securities laws and the terms and conditions
hereof.  Each Warrant shall bear a
legend in substantially the same form as the legend set forth on the first page
of this Warrant.  Each certificate for
Shares issued upon exercise of this Warrant, unless at the time of exercise
such Shares are acquired pursuant to a registration statement that has been
declared effective under the Securities Act of 1933, as amended (the
“Securities Act”), and applicable blue sky laws, shall bear a legend
substantially in the following form:

                                                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 

 

6

 

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.

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

18.          Rights of
Holder. 
Holder shall not, by virtue hereof, be entitled to any rights of a
stockholder of the Company, either at law or equity, and the rights of Holder
are limited to those expressed in this Warrant.  Nothing contained in this Warrant shall be construed as
conferring upon Holder hereof the right to vote or to consent or to receive
notice as a stockholder of the Company on any matters or with respect to any
rights whatsoever as a stockholder of the Company.  No dividends or interest shall be payable or accrued in respect
of this Warrant or the interest represented hereby or the Shares purchasable
hereunder until, and only to the extent that, this Warrant shall have been
exercised in accordance with its terms.

19.          “Market
Stand Off” Agreement.
Holder hereby agrees not sell, transfer, make any short sale of, grant any
option for the purchase of, or enter into any hedging or similar transaction
with the same economic effect as a sale of, any Common Stock (or other
securities) of the Company held by Holder for a period specified by a
representative of the underwriters of Common Stock (or other securities) of the
Company not to exceed ninety (90) days following the effective date of a
registration statement of the Company filed under the Securities Act; provided that
all officers and directors of the Company and each holder of that number of
shares of Common Stock equal to or greater than the number of Shares then
issuable upon exercise of this Warrant enter into similar agreements.

20.          No
Impairment.  The Company will not, by amendment of its
Certificate or through any reclassification, capital reorganization,
consolidation, merger, sale or conveyance of assets, dissolution, liquidation,
issue or sale of securities or any other voluntary action, avoid or seek to
avoid the observance of performance of any of the terms of this Warrant, but
will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such action as may be necessary or appropriate in
order to protect the rights of the Holder.

21.          Governing
Law.  The provisions and terms of this Warrant
shall be governed by and construed in accordance with the internal laws of the
State of California.

 

7

 

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

23. 
Business Days.  If the last or appointed day for the taking
of any action required or the expiration of any rights granted herein shall be
a Saturday or Sunday or a legal holiday in California, then such action may be
taken or right may be exercised on the next succeeding day which is not a
Saturday or Sunday or such a legal holiday.

 

 

 

8

 

IN WITNESS WHEREOF, the Company has duly caused this Warrant
to be signed by its duly authorized officer and to be dated as of the date
first written above.

 

	
   

  	
  Company:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  RIGEL PHARMACEUTICALS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  James M. Gower

  Chief Executive Officer

  
				

 

 

9

 

SUBSCRIPTION

	
  To:

  	
   

  	
   

  	
  Date:

  	
   

  

 

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

	
   

  	
   

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name for Registration

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Mailing Address

  

 

NET ISSUE ELECTION NOTICE

	
  To:

  	
   

  	
   

  	
  Date:

  	
   

  

 

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

	
   

  	
   

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name for Registration

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Mailing Address

  

 

 

 

ASSIGNMENT

For value received
_______________________________________ hereby sells, assigns and transfers
unto 

	
   

  
	
   

  
	
   

  
	
   

  
	
  [Please print or
  type the name and address of Assignee]

  
	
   

  
	
   

  

the within Warrant, and does hereby irrevocably
constitute and appoint ___________________ _______________ its attorney to
transfer the within Warrant on the books of the within named Company with full
power of substitution on the premises.

 

	
  DATED:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  IN THE
  PRESENCE OF:

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