EXHIBIT 10.7

 

INTERCREDITOR AGREEMENT

 

This Intercreditor Agreement (this “Agreement”) dated as of August 13, 2010 is
between Lighthouse Capital Partners V, L.P., a Delaware limited partnership
(“LCP”);”); MPM BioVentures III LP (“MPM III”), MPM BioVentures III QP, LP (“MPM
III QP”), MPM BioVentures III GmbH & Co. Beteiligungs KG (“MPM III KG”), MPM
BioVentures III Parallel Fund, LP (“MPM III Parallel”), and MPM Asset Management
Investors 2002 BVIII LLC (“MPM III 2002”, collectively with MPM III, MPM III QP,
MPM III KG, and MPM III Parallel”, “MPM”);  Ayer Capital Partners Master Fund,
L.P., a Cayman Islands limited partnership (“Ayer Master”), and Ayer Capital
Partners Kestrel Fund, LP, a Delaware limited partnership (“Ayer Kerstel”,
collectively with Ayer Master, “Ayer”).

 

RECITALS

 

A.                                   LCP and Aryx Therapeutics, Inc. (“Aryx” or
“Company”) are parties to a Loan and Security Agreement originally dated as of
March 28, 2005 pursuant to which LCP extended loans and other financial
accommodations to Aryx and Aryx granted LCP a first position security interest
in certain of its property to secure its repayment obligations to LCP.  Aryx
further covenanted not to pledge or encumber its intellectual property or
further encumber LCP’s collateral.

 

B.                                     Aryx desires to enter into a Secured Note
and Warrant Purchase Agreement pursuant to which MPM and Ayer will purchase
Secured Promissory Notes in an aggregate principal amount not to exceed US$4
Million (“Bridge Notes”) and Aryx grants MPM and Ayer a security interest in
substantially all of its assets, including its intellectual property.

 

C.                                     LCP is willing to make certain additional
advances to Aryx on certain conditions and consent to the security interest
securing Aryx’s obligations under the Bridge Notes; provided that (a) Aryx grant
LCP a lien on Aryx’s intellectual property, (b) Aryx enter into Amendment No. 8,
and (c) LCP, MPM and Ayer agree to the terms set forth herein.

 

NOW THEREFORE, the parties agree as follows:

 

1.                                      Definitions.  The following capitalized
terms shall mean the following in this Agreement:

 

1.1                               “Amendment No. 8” means Amendment No. 8 to the
LCP Loan Agreement and attached hereto as Exhibit A.

 

1.2                               “Assignment Agreement” means the assignment
agreement substantially in the form attached hereto as Exhibit B.

 

1.3                               “Bridge Debt Security Interest” means all
liens and security interests granted Bridge Lenders in the Collateral to the
extent that they secure the indebtedness under the Bridge Notes.

 

1.4                               “Bridge Lender” means either or both MPM and
Ayer.

 

1.5                               “Bridge Note” means any promissory note issued
by Borrower pursuant to the terms of the Bridge Note Agreement.

 

1.6                               “Bridge Note Agreement” means the Secured Note
and Warrant Purchase Agreement dated as of August 13, 2010 between Borrower and
Bridge Lender.

 

1.7                               “Collateral” means all property of the Company
that is subject to a Bridge Debt Security Interest, a Senior LCP Security
Interest or a Subordinated Security Interest.

 

--------------------------------------------------------------------------------

 

1.8                               “Enforcement Action” means any action to
exercise any rights or remedies, including without limitation, (a) to sue for
payment of, or to initiate or participate with others in any suit, action or
proceeding against either the Company or a Secured Party to (i) enforce payment
of or to collect the whole or any part of the amounts owed a Secured Party or
(ii) commence judicial enforcement of any of the rights and remedies with
respect to any indebtedness or other obligations,  (b) to sell, license, lease,
or otherwise dispose of all or any portion of any Collateral, by private or
public sale, other disposition or any other means permissible under applicable
law, or (c) to notify account debtors or directly collect accounts receivable or
other payment, or (d) to foreclose upon, take possession of or sell or otherwise
dispose of any Collateral.

 

1.9                               “Event of Default” has the meaning ascribed to
the term in the LCP Loan Agreement.

 

1.10                        “LCP” means Lighthouse Capital Partners V, L.P and
its assigns under the LCP Loan Agreement.

 

1.11                        “LCP IP Security Agreement” means the Intellectual
Property Security Agreement dated as of August 13, 2010 between LCP and Company
pursuant to which Company granted LCP security interests in its intellectual
property.

 

1.12                        “LCP Loan Agreement” means the Loan and Security
Agreement No. 4521 originally dated March 28, 2005, as amended in writing from
time to time, including Amendment No. 8 and any subsequent amendments.

 

1.13                        “New Value Obligations” has the meaning ascribed to
the term in Amendment No. 8, provided, that in no event shall the aggregate
principal amount of the New Value Obligations exceed $2,290,918.91.

 

1.14                        “Obligations” has the meaning ascribed to the term
in the LCP Loan Agreement

 

1.15                        “Permitted Payments” means (i) regular monthly
installments of principal or interest on the Senior LCP Debt paid by the Company
to LCP pursuant to the terms of the LCP Loan Agreement; (ii) regular monthly
installments of principal or interest on the Subordinated Debt paid by the
Company to LCP pursuant to the terms of the LCP Loan Agreement unless any
indebtedness under a Bridge Note is outstanding and Bridge Lender has provided
LCP with written notice that an Event of Default under Sections7(a),7(b) or
7(c) of a Bridge Note has occurred and is continuing without forbearance;
(iii) payment by the Company of the amount due pursuant to Section 7.9 of The
Bridge Note Agreement; (iv) regular monthly installments of principal and/or
interest paid by the Company to Bridge Lender pursuant to the terms of a Bridge
Note unless any Senior LCP Debt is outstanding and LCP has provided Bridge
Lender with written notice that an Event of Default under Sections 8.1, 8.10 or
8.11 has occurred and is continuing without forbearance; and (v) payment by the
Company of the amount due pursuant to Section 1 of Article VII of Amendment
No. 8.

 

1.16                        “Recovery” means (a) the receipt by any Secured
Party of any Collateral or Proceeds of any Collateral as a result of an
Enforcement Action by such Secured Party; and (b) the receipt by any Secured
Party of any payment or distribution of assets of the Company of any kind or
character on account of any of the Senior LCP Debt, any indebtedness due a
Bridge Lender, or the Subordinated Debt, whether in cash, property or
securities, upon the dissolution, winding-up or total or partial liquidation or
reorganization, readjustment, arrangement or similar proceeding relating to the
Company or its property, whether voluntary or involuntary or in any insolvency
proceeding; provided that a Permitted Payment shall not be a Recovery.

 

--------------------------------------------------------------------------------

 

1.17                        “Secured Party” means either or both LCP or Bridge
Lender as the context requires.

 

1.18                        “Senior LCP Debt” means the New Value Obligations
together with any interest that accrues on the principal amount thereof
subsequent to the commencement of a case under the Bankruptcy Code, whether or
not such interest is allowed as a claim in such case.

 

1.19                        “Senior LCP IP Security Interest” means the security
interest granted LCP pursuant to Section 2 of the LCP IP Security Agreement.

 

1.20                        “Senior LCP Security Interest” means the Senior LCP
IP Security Interest together with any other lien, pledge or security interest
of LCP to the extent that such lien, pledge or security interest secures the New
Value Obligations.

 

1.21                        “Standstill Period” means the period expiring ninety
(90) days after the date LCP receives written notice from Bridge Lender that an
event of default has occurred under a Bridge Note.

 

1.22                        “Subordinated Debt” means all Obligations other than
the New Value Obligations.

 

1.23                        “Subordinated Security Interest” means all liens and
security interests granted LCP in the property of the Company to the extent that
they secure the Subordinated Debt.

 

Terms used but not defined in this Agreement that are defined in Division 9 of
the California Uniform Commercial Code and shall have the meaning ascribed to
such term therein.  Each entity or person referred to includes that entity or
person’s lawful and permitted successors and assigns.

 

2.                                      Perfection of Security Interests. If a
Secured Party is unable to perfect a security interest in any of the Collateral
including, without limitation, control over deposit accounts and securities
accounts and/or possession of certain property, the other Secured Party agrees
to act as agent with respect to such Collateral for perfection by possession or
exercise of control and to promptly perform written instructions received from
such Secured Party with respect to such Collateral that are reasonably necessary
to undertake Enforcement Actions upon the commencement of that Secured Party’s
ability to initiate Enforcement Actions in accordance with Section 6.  The
enforcing Secured Party agrees to defend, indemnify and hold harmless the
Secured Party acting as agent, together with all of its partners, officers,
employees and agents from (a) all obligations, demands, claims, and liabilities
claimed or asserted by any other party in connection with or relating to any
action taken by the Secured Party acting as agent at the request or instruction
of the enforcing Secured Party and (b) all losses or expenses in any way
suffered, incurred, or paid by the Secured Party acting as agent as a result of
or in any way arising out of, following or consequential to any action taken by
the Secured Party acting as agent at the request or instruction of the enforcing
Secured Party (including without limitation, reasonable attorneys fees and
expenses), except for losses arising from or out of such Secured Party’s gross
negligence or willful misconduct.

 

3.                                      Lien Ranking.

 

(a)                                  Notwithstanding any contrary priority
established by (i) the filing dates of their respective financing statements,
(ii) the recording dates of any other security perfection documents, (iii) the
time or order of attachment or perfection of their respective security interests
in the Collateral, or (iv) which Secured Party has possession of or control over
any of the Collateral, the Secured Parties agree that the Senior LCP Security
Interest in the Collateral shall at all times be senior and prior in all
respects to the Bridge Loan Security Interest in the Collateral and the Bridge
Loan Security Interest in the Collateral shall at all times be junior and
subordinate in all respects to the Senior LCP Security Interest.

 

--------------------------------------------------------------------------------

 

(b)                                 Notwithstanding any contrary priority
established by (i) the filing dates of their respective financing statements,
(ii) the recording dates of any other security perfection documents, (iii) the
time or order of attachment or perfection of their respective security interests
in the Collateral, or (iv) which Secured Party has possession of or control over
any of the Collateral, the Secured Parties agree that the Senior LCP Security
Interest and the Bridge Debt Security Interest in the Collateral shall at all
times be senior and prior in all respects to the Subordinated Security Interest
in the Collateral and the Subordinated Security Interest in the Collateral shall
at all times be junior and subordinate in all respects to both the Senior LCP
Security Interest and the Bridge Loan Security Interest.

 

4.                                      Debt Subordination.  All indebtedness of
any kind or character, including without limitation under the Bridge Notes, now
or hereafter owing by the Company to Bridge Lender is subordinated in right to
payment to the Senior LCP Debt subject to Permitted Payments.  All Subordinated
Debt is subordinated in right to payment to the obligations under the Bridge
Notes subject to Permitted Payments.

 

5.                                      Permitted Payments.  A Secured Party is
entitled to receive and retain for its own account all Permitted Payments, and
Permitted Payments are not subject to Sections 7 or 9 of this Agreement.

 

6.                                      Enforcement Actions.  So long as any
Senior LCP Debt is outstanding, Bridge Lender shall not initiate or prosecute
any Enforcement Action until the expiration of the Standstill Period.  Nothing
in this Section 6 shall be deemed to prohibit Bridge Lender from giving the
Company notice of a default under a Bridge Note, provided that Bridge Lender
shall concurrently provide LCP with written notice thereof.  LCP will provide
Bridge Lender with prompt written notice of  (i) an Event of Default of which
LCP is aware and (ii) any initiation of an Enforcement Action.  Bridge Lender
will provide LCP with prompt written notice of  (i) an Event of Default under a
Bridge Note of which a Bridge Lender is aware and (ii) any initiation of an
Enforcement Action.

 

7.                                      Turnover.

 

(a)                                  During continuance of an Event of Default
of which Bridge Lender has been notified and until the Senior LCP Debt is paid
in full, Bridge Lender shall hold in trust for and deliver to LCP in the form
received (except for endorsement or assignment by Bridge Lender) any payment,
distribution, security or proceeds it receives on account of indebtedness
subordinated to the Senior LCP Debt pursuant to Section 4.

 

(b)                                 During continuance of an Event of Default
under a Bridge Note of which LCP has been notified and until all obligations
under the Bridge Notes are paid in full, LCP shall hold in trust for and deliver
to Bridge Lender in the form received (except for endorsement or assignment by
Bridge Lender) any payment, distribution, security or proceeds it receives on
account of the Subordinated Indebtedness pursuant to Section 4.

 

8.                                      Conversion to Equity.  Nothing in this
Agreement shall be deemed to prohibit or restrict Bridge Lender from converting
all or any portion of the Eligible Debt into equity securities of Company.

 

9.                                      Collateral Proceeds Sharing.  Each of
the Secured Parties agrees that Recoveries shall be shared by the Secured
Parties and shall be paid to and applied as follows:

 

(a)                                  First, to the payment of all reasonable
costs of enforcement and collateral preservation and disposition incurred by
LCP, if any, in connection with any such Recovery;

 

(b)                                 Second, after payment in full of all amounts
contemplated in clause (a) above, to LCP until the Senior LCP Debt is paid in
full;

 

--------------------------------------------------------------------------------

 

(c)                                  Third, after payment in full of all amounts
contemplated in clauses (a) and (b) above, to the payment of all reasonable
costs of enforcement and collateral preservation and disposition incurred by a
Bridge Lender, if any, in connection with any such Recovery;

 

(d)                                 Fourth, after payment in full of all amounts
contemplated in clauses (a) through (c) above, to Bridge Lender until
obligations under the Bridge Notes are paid in full;

 

(e)                                  Fifth, after payment in full of all amounts
contemplated in clauses a through (d) above, to LCP until the remaining
Obligations are paid in full;

 

(f)                                    Finally, after payment in full of all
amounts contemplated in clauses (a) through (e) above, the surplus, if any,
shall be paid to the Company or any of its respective successors or to
whomsoever may be lawfully entitled to receive the same.

 

The foregoing hierarchy of payment and applications shall be followed for each
and every distribution of Recoveries.

 

10.                               Purchase Option.  Bridge Lender agrees that
any time following a Purchase Event LCP shall have the option (the right but not
the obligation) for LCP or its designee to purchase the Bridge Notes and all
rights to the Bridge Debt Security Interest (collectively the “Bridge Debt”)
without warranty or representation or recourse (except as otherwise provided for
in the Assignment Agreement) in consideration of payment in good funds to Bridge
Lender the outstanding obligations under the Bridge Notes (the “Purchase
Price”).  If LCP or its designee chooses to exercise such right, it must
irrevocably notify Bridge Lender thereof within two (2) Business Days following
the occurrence of the applicable Purchase Event, and the parties shall close
promptly thereafter, but in any event within two (2) Business Days following
notice of the exercise of LCP’s purchase right (the “Purchase Period”).  If LCP
or its designee chooses to exercise its purchase right, such purchase shall be
effected pursuant the Assignment Agreement and payment to Bridge Lender of the
Purchase Price.  Upon LCP or its designee providing Bridge Lender with
irrevocable notice of its election to purchase the Bridge Debt on such terms,
LCP or its designee shall be obligated to purchase the Bridge Debt for the
Purchase Price.  If LCP elects not to exercise the purchase right under this
Section 10  (or does not so irrevocably provide notice of such exercise within
the required timeframe or close the purchase within the Purchase Period), Bridge
Lender shall have no further obligations pursuant to this Section 10. Bridge
Lender shall not commence any Enforcement Action during the Purchase Period;
provided, that, if upon expiration of the Purchase Period, the parties have not
closed the transaction, Bridge Lender may, at its option, commence or pursue any
such Enforcement Action.  As used herein, the term “Purchase Event” means the
occurrence of any of the following events: (a) the receipt by LCP of written
notice from a Bridge Lender of intent to commence an Enforcement Action in
accordance with Section 6, which Bridge Lender agrees to provide at least two
(2) Business Days prior to commencing any Enforcement Action, or (b) the
commencement of any Proceeding.

 

11.                               Release of Collateral on Authorized
Disposition.  Each Secured Party shall release all of its liens and security in
Collateral as to which the enforcing Secured Party releases all of its liens and
security interests in connection with a sale or disposition of such Collateral
by (i) a Secured Party pursuant to an Enforcement Action permitted hereunder or
(ii) by the Company as permitted under the LCP Loan Agreement and the Bridge
Notes and related documents; provided that neither Secured Party shall be deemed
to have released its security interest in any proceeds of such disposition.

 

12.                               Insolvency.  The terms of this Agreement
remain in full force and effect, despite Company’s insolvency, reorganization or
any case or proceeding under any Bankruptcy or insolvency law.

 

--------------------------------------------------------------------------------

 

13.                               Legends.  No amendment of the Bridge Notes,
LCP Loan Agreement or any instruments or documents relating thereto will modify
this Agreement in any way.  Each Party hereto may, but is not obligated to, put
legends upon the documents to which it is a party with Aryx referencing this
Agreement.

 

14.                               Choice of Law and Venue.  All judicial
proceedings (to the extent that the reference requirement of Section 15  is not
applicable) arising in or under or related to this Agreement may be brought in
any state or federal court located in the State of California.  By execution and
delivery of this Agreement, each party hereto generally and unconditionally:
(a) consents to nonexclusive personal jurisdiction in San Francisco County,
State of California; (b) waives any objection as to jurisdiction or venue in San
Francisco County, State of California; (c) agrees not to assert any defense
based on lack of jurisdiction or venue in the aforesaid courts; and
(d) irrevocably agrees to be bound by any judgment rendered thereby, in each
case, in connection with this Agreement.  Service of process on any party hereto
in any action arising out of or relating to this Agreement shall be effective if
given in accordance with the requirements for notice set forth in Section 18,
and shall be deemed effective and received as set forth in Section 16.  Nothing
herein shall affect the right to serve process in any other manner permitted by
law or shall limit the right of either party to bring proceedings in the courts
of any other jurisdiction.

 

15.                               Mutual Waiver of Jury Trial / Judicial
Reference.

 

(a)                                  Because disputes arising in connection with
complex financial transactions are most quickly and economically resolved by an
experienced and expert person and the parties wish applicable state and federal
laws to apply (rather than arbitration rules), the parties desire that their
disputes be resolved by a judge applying such applicable laws.  EACH PARTY
SPECIFICALLY WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY OF ANY CAUSE OF
ACTION, CLAIM, CROSS-CLAIM, COUNTERCLAIM, THIRD PARTY CLAIM OR ANY OTHER CLAIM
(COLLECTIVELY, “CLAIMS”).  This waiver extends to all such Claims, including
Claims that involve Persons other than a party hereto; Claims that arise out of
or are in any way connected to the relationship amongst the parties hereto; and
any Claims for damages, breach of contract, tort, specific performance, or any
equitable or legal relief of any kind, arising out of this Agreement.

 

(b)                                 If the waiver of jury trial set forth in
Section 17(a) is ineffective or unenforceable, the parties agree that all Claims
shall be resolved by reference to a private judge sitting without a jury,
pursuant to Code of Civil Procedure Section 638, before a mutually acceptable
referee or, if the parties cannot agree, a referee selected by the Presiding
Judge of the San Francisco County, California.  Such proceeding shall be
conducted in San Francisco County, California, with California rules of evidence
and discovery applicable to such proceeding.

 

(c)                                  In the event Claims are to be resolved by
judicial reference, either party may seek from a court identified in Section 16
for any prejudgment order, writ or other relief and have such prejudgment order,
writ or other relief enforced to the fullest extent permitted by law
notwithstanding that all Claims are otherwise subject to resolution by judicial
reference.

 

16.                               Notices.  All notices required or permitted
under this Agreement shall be in writing and shall be deemed effectively given:
(a) upon personal delivery to the party to be notified, (b) when sent by
confirmed telex, electronic mail or facsimile if sent during normal business
hours of the recipient, if not, then on the next business day, (c) five (5) days
after having been sent by registered or certified mail, return receipt
requested, postage prepaid, or (d) one (1) day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with written
verification of receipt.  All communications shall be sent to the addresses set
forth on the signature page hereto and as may be designated by ten (10) days
advance written notice to the other parties hereto.

 

--------------------------------------------------------------------------------

 

17.                               Other Provisions.

 

17.1                        This Agreement binds and benefits each Secured
Party, and their respective successors or assigns.  This Agreement is for Bridge
Lender’s and LCP’s benefit and not for the benefit of the Company or any other
party.  Company has no rights hereunder.  This Agreement is made only for the
benefit of the parties and their successors and assigns, and may not be relied
upon by any other third party, including Company or any successor thereto or any
judgment lien creditor thereof.

 

17.2                        This Agreement represents the entire agreement of
the Parties with respect to the subject matter hereof, and supersedes prior
negotiations or agreements.  This Agreement may be amended only by written
instrument signed by Bridge Lender and LCP.

 

17.3                        Each party hereto warrants and represents to the
others that it has full power and authority to enter hereinto and to perform all
obligations hereunder, that this Agreement is valid, binding and enforceable in
accordance with its terms and that execution and performance hereof does not
violate any agreement with any other person or entity..

 

17.4                        This Agreement may be executed in two or more
counterparts, each of which is an original and all of which together constitute
one instrument.

 

 [Signature pages follow]

 

--------------------------------------------------------------------------------

 

“LCP”

 

LIGHTHOUSE CAPITAL PARTNERS V, L.P.
By: Lighthouse Management Partners V, L.L.C.,
its general partner

 

 

By:

/s/ Thomas Conneely

 

 

 

Name:

Thomas Conneely

 

 

 

Title:

Vice President

 

 

 

Address:

500 Drake’s Landing Road

 

 

Greenbrae, CA 94904

 

 

SIGNATURE PAGE TO

INTERCREDITOR AGREEMENT

 

--------------------------------------------------------------------------------

 

“Bridge Lender”

 

AYER CAPITAL PARTNERS MASTER    FUND, L.P.

By: Ayer Capital Partners, LLC, its general partner

 

 

By:

/s/ Jay Venkatesan

 

Name: Jay Venkatesan

Title: Managing Member

 

 

AYER CAPITAL PARTNERS KESTREL  FUND, L.P.

By: Ayer Kestrel Partners, LLC, its general partner

 

 

By:

/s/ Jay Venkatesan

 

Name: Jay Venkatesan

Title: Managing Member

Address:

 

Ayer Capital Management, LP

Attn:  Jay Venkatesan

230 California Street, Suite 600

San Francisco, CA 94123

f: (415) 651-9005

 

SIGNATURE PAGE TO

INTERCREDITOR AGREEMENT

 

--------------------------------------------------------------------------------

 

“Bridge Lenders”

 

MPM BIOVENTURES III, L.P.

By: MPM BioVentures III GP, L.P., its General Partner

By: MPM BioVentures III LLC, its General Partner

 

 

By:

/s/ Nicholas Simon III

 

 

 

 

Print Name:

Nicholas Simon III

 

 

 

 

Title:

Series A Member

 

 

 

 

Address:

200 Clarendon Street, 54th Floor

 

 

Boston, MA 02116

 

 

MPM BIOVENTURES III-QP, L.P.

By: MPM BioVentures III GP, L.P., its General Partner

By: MPM BioVentures III LLC, its General Partner

 

 

By:

/s/ Nicholas Simon III

 

 

 

 

Print Name:

Nicholas Simon III

 

 

 

 

Title:

Series A Member

 

 

Address:

200 Clarendon Street, 54th Floor

 

 

Boston, MA 02116

 

 

MPM BIOVENTURES III GMBH & CO. BETEILIGUNGS KG

By: MPM BioVentures III GP, L.P., in its capacity as Managing Limited Partner

By: MPM BioVentures III LLC, its General Partner

 

 

By:

/s/ Nicholas Simon III

 

 

 

 

Print Name:

Nicholas Simon III

 

 

 

 

Title:

Series A Member

 

 

Address:

200 Clarendon Street, 54th Floor

 

 

Boston, MA 02116

 

 

SIGNATURE PAGE TO

INTERCREDITOR AGREEMENT

 

--------------------------------------------------------------------------------

 

“Bridge Lenders”

 

MPM BIOVENTURES III PARALLEL FUND, L.P.

By: MPM BioVentures III GP, L.P., its General Partner

By: MPM BioVentures III LLC, its General Partner

 

 

By:

/s/ Nicholas Simon III

 

 

 

 

Print Name:

Nicholas Simon III

 

 

 

 

Title:

Series A Member

 

 

 

 

Address:

200 Clarendon Street, 54th Floor

 

 

Boston, MA 02116

 

 

MPM ASSET MANAGEMENT INVESTORS 2002 BVIII LLC

 

 

By:

/s/ Nicholas Simon III

 

 

 

 

Print Name:

Nicholas Simon III

 

 

 

 

Title:

Manager

 

 

 

 

Address:

200 Clarendon Street, 54th Floor

 

Boston, MA 02116

 

 

SIGNATURE PAGE TO

INTERCREDITOR AGREEMENT

 

--------------------------------------------------------------------------------

 

The Company acknowledges and consents to the terms of this Agreement. The
Company agrees to that it will make no payments inconsistent with the terms of
this Agreement

 

“Company”

 

ARYx INTERNATIONAL, INC.

 

 

By:

/s/ Paul Goddard

 

 

 

 

Print Name:

Paul Goddard, Ph.D.

 

 

 

 

Title:

Chairman and Chief Executive Officer

 

 

 

 

Address:

6300 Dumbarton Circle

 

 

Fremont, CA 94555

 

 

SIGNATURE PAGE TO

INTERCREDITOR AGREEMENT

 

--------------------------------------------------------------------------------

 

EXHIBIT A

 

Amendment No. 8

 

[see attached]

 

--------------------------------------------------------------------------------

 

EXHIBIT B

 

FORM OF ASSIGNMENT AGREEMENT

 

LENDER ASSIGNMENT AGREEMENT

 

This LENDER ASSIGNMENT AGREEMENT (this “Agreement”) dated as of               ,
20        , is made between                                           , a
Delaware corporation (the “Assignor”) and LCP CAPITAL PARTNERS V, L.P., a
Delaware limited partnership (the “Assignee”).

 

WHEREAS, the Assignor and [Borrower] (“Borrower”), have entered into that
certain Note and Warrant Purchase Agreement, dated August 13, 2010 (as amended
and in effect from time to time, the “Purchase Agreement”), pursuant to which
Borrower issues Secured Promissory Notes (the “Notes”) to Assignor and the other
lender which are secured pursuant to the terms of a Security Agreement (the
“Security Agreement”), dated as of August 13, 2010  among Borrower, as pledgor,
and Assignor and the other pledgees thereunder, as pledgees, and by certain
other security agreements (collectively with the Purchase Agreement, Notes and
the Security Agreement, the “Documents”); and

 

WHEREAS, Assignor desires to assign, and Assignee agrees to accept the
assignment of all of the Assignor’s interest in the Documents on the terms and
conditions set forth herein;

 

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, and intending to be legally bound, the parties
hereto hereby agree as follows

 

1.             The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, WITHOUT RECOURSE to the
Assignor, one hundred percent (100%) of the right, title and interest of
Assignor in, to and under (i) the Documents, including, without limitation, such
documents set forth on Annex 1 hereto, and (ii) all obligations owing to the
Assignor under the Documents as of the date hereof (collectively, the “Assigned
Interest”).

 

2.             The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) represents and warrants
that it had full authority to enter into the Documents; (iii)   represents and
warrants that it has no knowledge of any facts or circumstances that would cause
any term or provision of any Document to be invalid or unenforceable outside of
a bankruptcy proceeding commenced by or against Borrower(iv) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Assigned Interest or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Documents or any other instrument or
document furnished pursuant thereto; and (v) makes no representation or warranty
and assumes no responsibility with respect to the financial condition of any
part to any of the Assigned Interest or any Document or the performance or
observance by any such party of any of its respective obligations thereunder.

 

3.             The Assignee (i) confirms that it has received a copy of the
Documents, together with such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Agreement; (ii) agrees that it will, independently and without reliance upon the
Assignor, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own

 

--------------------------------------------------------------------------------

 

credit decisions in taking or not taking action under the Documents; and
(iii) agrees that it will become a party to and be bound by the Documents on the
date hereof as if it were an original “Lender”, “Purchaser” and “Secured Party”
thereunder (collectively, “Lender”) and will have the rights and obligations of
a Lender thereunder and will perform in accordance with their terms all of the
obligations which by the terms of the Documents are required to be performed by
it as a Lender.

 

4.             Upon the execution and delivery of by the parties hereto of this
Agreement, (i) the Assignee shall be a party to the Documents and have the
rights and obligations of a Lender thereunder in accordance with its Assigned
Interest; and (ii) the Assignor shall relinquish its rights and be released from
its obligations under the Documents.

 

5.             From and after the date hereof, all payments under the Documents
to be made to a Lender shall be made to the Assignee in respect of the Assigned
Interest (including, without limitation, all payments of principal, interest,
and fees with respect thereto).

 

6.             This Assignment and Assumption shall be governed by and construed
in accordance with the laws which govern the Documents.

 

 

LIGHTHOUSE CAPITAL PARTNERS V, L.P.

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

 

Title:

 

 

 

 

 

 

 

[ASSIGNOR]

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

 

Title:

 

 

--------------------------------------------------------------------------------