Exhibit 4.8


 


THIS
WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “1933 ACT”), OR ANY
APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR TRANSFERRED
UNLESS SUCH SALE OR TRANSFER IS IN ACCORDANCE WITH THE REGISTRATION
REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS OR SOME OTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS IS AVAILABLE WITH
RESPECT THERETO.


 


COMMON
STOCK PURCHASE WARRANT


 


	
  Warrant No.

  	
  Number of Shares: 158,770

  
	
   

  	
  Common Stock

  



 


ARYX THERAPEUTICS, INC.


 


Effective
as of October 17, 2008


 


Void
after October 17, 2013


 


1.             Issuance. 
This Common Stock Purchase Warrant (the “Warrant”) is issued to LIGHTHOUSE
CAPITAL PARTNERS V, L.P. (the “Holder”)
by ARYX THERAPEUTICS, INC., a
Delaware corporation (hereinafter with its successors called the “Company”).


 


2.                                      Purchase Price; Number
of Shares.


 


(a)           The registered holder of this Warrant, 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, at a price per share equal to $3.97516
(the “Purchase Price”), 158,770
fully paid and nonassessable shares of the Company’s Common Stock, par value
$0.001 per share  (the “Common Stock”).


 


Any term not defined herein shall have the meaning as
set forth in the Loan Agreement.


 


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 in 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, 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.

  



 


For purposes of this
Warrant, the “Fair Market Value”
of a share of Common Stock as of the date that the net issue election is made
(the “Determination Date”) shall
mean: (i) if traded on a securities exchange or the NASDAQ Global Market,
the fair market value of the Common Stock shall be deemed to be the average of
the closing or last reported sale prices of the Common Stock on such exchange
or market for the five (5) consecutive trading days immediately prior to
the Determination Date, or (ii) if otherwise traded in an over-the-counter
market, the fair market value of the Common Stock shall be deemed to be the
average of the closing ask prices of the Common Stock for the five (5) consecutive
trading days immediately prior to the Determination Date, or (iii) if
there is no public market for the Common Stock or if the fair market value
cannot be calculated as of the Determination Date on any of the foregoing
bases, then the 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 in its 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,
in lieu of issuance of any fractional share, pay the Holder otherwise entitled
to such fraction a sum in cash equal to the product resulting from multiplying
the then current Fair Market Value of one share of Common Stock by such
fraction.


 


7.             Expiration Date; Automatic
Exercise.  This Warrant shall expire at the earliest
to occur of (i) the close of business on October 17, 2013; or (ii) the
effective date of a Merger as defined below, unless otherwise assumed per the
language below (the “Expiration Date”)
and shall be void thereafter.


 


“Merger” means: (i) a sale, license or
other disposition of all or substantially all of the Company’s assets to an
Unaffiliated Entity (as defined below), or (ii) the merger, consolidation
or acquisition of the Company with, into or by an Unaffiliated Entity (other
than a merger or consolidation for the principle purpose of changing the
domicile of the Company or a bona fide stock equity financing), the result of
which is that stockholders of the Company immediately prior to the merger,
consolidation or acquisition do not own or control more than fifty percent (50%)
of the voting power of the surviving entity immediately following such merger,
consolidation or acquisition.  “Unaffiliated Entity” means any entity that
is owned or controlled by parties who own less than twenty percent (20%) of the
combined voting power of the voting securities of the Company immediately prior
to such merger, consolidation or acquisition. 
Notwithstanding the foregoing, in the event that any outstanding
warrants to purchase equity securities of the Company are assumed by the
successor entity of a Merger (or parent thereof), this Warrant will be
similarly assumed.    Notwithstanding
anything to the contrary in this Warrant, if Holder exercises this Warrant
after receiving a notice from the Company of a proposed merger or if the
exercise was otherwise precipitated by such proposed Merger, the Company will
hold the exercise notice, without processing such notice, until immediately prior
to the consummation of the Merger, at which time the exercise notice shall be
processed. If the Merger is terminated, the Holder will have ten (10) business
days from the date the Company gives Holder notice indicating such termination
to rescind its exercise notice, otherwise the exercise notice shall be
processed by 


 


2

















 


the Company as set forth
herein.  In the event of such rescission,
this Warrant will continue to be exercisable on the same terms and conditions.


 


Notwithstanding the foregoing, this Warrant shall
automatically be deemed to be exercised in full pursuant to the provisions of Section 4 hereof, without any further
action on behalf of the Holder, immediately prior to the time this Warrant would
otherwise expire pursuant to this Section 7,
unless otherwise assumed per above.


 


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 issuable upon exercise of this Warrant free from all preemptive or
similar rights therein.  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.


 


11.          Mergers and Reclassifications. 
Subject to Section 7,
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 11, 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.


 


12.          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.


 


13.          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;


 


3

















 


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 ten (10) business days prior to the date
specified in such notice on which any such action is to be taken.


 


14.          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.


 


(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
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 material breach or default under any material contract, material
agreement or material 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.


 


16.          Amendment. 
The terms of this Warrant may be amended, modified or waived only with
the written consent of the Holder and the Company.


 


17.          Representations and Covenants of the
Holder.  This 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 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 Rule 501
of Regulation D promulgated under the 1933 Act.


 


(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 17.


 


(d)           Financial Risk.  Holder
understands that the purchase of this Warrant and its underlying securities
involves substantial risk.  Holder has
experience as an investor in securities of companies in the development stage
and acknowledges that Holder can bear the economic risk of such Holder’s
investment in this Warrant and its underlying securities and has such knowledge
and experience in financial or business matters that Holder is capable of
evaluating the merits and risks of its investment in this Warrant and its
underlying securities and/or has a preexisting personal or business
relationship with the Company and certain of its officers, directors or
controlling persons of a nature and duration that enables Holder to be aware of
the character, business acumen and financial circumstances of such persons.


 


4

















 


(e)           Rule 144. The Holder is aware that
neither the Warrant, nor the Common Stock issuable upon conversion thereof may
be sold pursuant to Rule 144 adopted under the 1933 Act unless certain
conditions are met, including, among other things, the existence of a public
market for the shares, the availability of certain current public information
about the Company, the resale following the required holding period under Rule 144
and the number of shares being sold during any three month period not exceeding
specified limitations. Holder is aware that the Company has no obligation
hereunder to satisfy the conditions for resale set forth in Rule 144.


 


18.          Notices, Transfers, Etc.


 


(a)           Any notice or written communication required
or permitted hereunder 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 facsimile to the facsimile number specified in writing by the
recipient if sent during normal business hours of the recipient on a business
day, if not, then on the next business day, or (c) the next business 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
Company or the Holder at the address listed on the signature page hereto
or at such other address as the Company or Holder may designate by ten (10) days
advance written notice to the other party hereto.


 


(b)           Subject
to compliance with applicable federal and state securities laws and the terms
hereof, 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, on such terms as to indemnity or otherwise as it may reasonably impose
(which shall, in the case of a mutilated Warrant, include the surrender
thereof), 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


 


19.          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
without giving effect to its principles regarding conflicts of laws.


 


20.          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.


 


21.          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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22.          No
Stockholder Rights. This
Warrant in and of itself shall not entitle the Holder to any voting rights or
other rights as a stockholder of the Company.


 


 


	
   

  	
  ARYX THERAPEUTICS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John Varian

  
	
   

  	
   

  
	
   

  	
  Name:

  	
  John Varian

  
	
   

  	
   

  
	
   

  	
  Title:

  	
     COO

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address: 

  	
  6300 Dumbarton Circle

  
	
   

  	
   

  	
  Fremont, CA 94555

  
						



 


Accepted
and Agreed:


 


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

  	
   

  
							



 


6

















 


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 typewrite 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:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signature

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Name for Registration

  	
   

  
	
   

  	
   

  
	
  In the Presence of: