Document:

Exhibit
10.2

         

        Execution
Copy

      

       

      
        SECURITY
AGREEMENT

         

        SECURITY
AGREEMENT (this “Agreement”), dated as of February 24, 2009, by and between
Synvista Therapeutics, Inc., a Delaware corporation (“Company” or the “Debtor”)
and Baker Bros. Advisors LLC as collateral agent for the Secured Parties
(together with its successors and assigns in such capacity, the “Collateral
Agent”).

         

        WITNESSETH:

         

        WHEREAS,
pursuant to a Note Purchase Agreement, dated the date hereof, between Company
and the Collateral Agent (the “Purchase Agreement”), Company has agreed to issue
to the Holders (as defined in the Purchase Agreement) and the Holders have each
agreed to purchase from Company certain of Company’s Senior Secured Notes (the
“Notes”) in the principal amounts as described in the Purchase Agreement;
and

         

        WHEREAS,
in order to induce the Holders to purchase the Notes, the Debtor has agreed to
execute and deliver to the Collateral Agent this Agreement for the benefit of
the Collateral Agent and the Holder and to grant to it a first priority security
interest in certain property of the Debtor to secure the prompt payment and
performance of all of the Obligations (as hereinafter defined).

         

        NOW,
THEREFORE, in consideration of the agreements herein contained and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:

         

        1.           Certain
Definitions.  As used in this Agreement, the following terms
shall have the meanings set forth in this Section 1.  Terms used but
not otherwise defined in this Agreement that are defined in Article 9 of the UCC
shall have the respective meanings given such terms in Article 9 of the
UCC.

         

        (a)           “Collateral”
means all right, title and interest in and to, whether now owned or hereafter
acquired and wherever located:

         

          (i)        all
Receivables;

         

         
(ii)       all Equipment;

         

         
(iii)      all General
Intangibles;

         

         
(iv)      all Inventory;

         

         
(v)       all Investment
Property;

         

         
(vi)      all Intellectual
Property;

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        (vii)       (a)
without limiting the generality of the foregoing, all contract rights, rights of
payment which have been earned under a contract right, instruments (including,
without limitation, promissory notes), documents, chattel paper (including,
without limitation, electronic chattel paper), warehouse receipts, deposit
accounts, letters of credit and money; (b) all commercial tort claims (whether
now existing or hereafter arising); (c) all letter of credit rights (whether or
not the respective letter of credit is evidenced by a writing); (d) all
supporting obligations; (e) all clinical, preclinical and non-clinical data; (f)
all regulatory filings, applications, approvals and permits whether with or from
the U.S. Food and Drug Administration or other government agency; (g) clinical
and preclinical trial quantities or commercial inventories of finished product,
active pharmaceutical ingredient and bulk drug supply and (h) to the extent
assignable, all rights to tax credits and tax refunds;

         

        (viii)    
  ledger sheets, ledger cards, files, correspondence, records, books
of account, business papers, computers, computer software (owned by the Debtor
or in which it has an interest), computer programs, tapes, disks and documents
relating to (i), (ii), (iii), (iv), (v), (vi) or (vii) of this Section;
and

         

        (ix)         all
Proceeds and products of (i), (ii), (iii), (iv), (v), (vi) and (vii) in whatever
form, including, without limitation:  cash, deposit accounts (whether
or not comprised solely of proceeds), certificates of deposit, insurance
proceeds (including, without limitation, hazard, flood and credit insurance),
negotiable instruments and other instruments for the payment of money, chattel
paper, security agreements, documents, eminent domain proceeds, condemnation
proceeds and tort claim proceeds,

         

        in each
case relating to all of the Company’s diagnostic assets, including, without
limitation, (a) that certain License and Research Agreement dated as of
July 12, 2004, as amended (the “License Agreement”), between BIO-RAP
Technologies Ltd. (“BIO-RAP”), on its own behalf and on behalf of the Rappaport
Family Institute for Research in the Medical Sciences, and the Company, (b) the
Licensed Technology (as defined in the License Agreement) being developed
thereunder, (c) the Company’s HAPTOCHEKTM diagnostic test kit, and (d) the
Company's diagnostic test kit for the measurement of
carboxy-methyllysine ("CML").

         

        (b)           “Copyright
Licenses” means any and all agreements, licenses and covenants providing for the
granting of any right in or to Copyrights or otherwise providing for a covenant
not to sue (whether the Debtor is licensee or licensor thereunder) including,
without limitation, each agreement referred to in Schedule C
hereto.

         

        (c)           “Copyrights”
mean all United States and foreign copyrights (including, without limitation,
Community designs), including but not limited to copyrights in software and all
rights in and to databases, and all Mask Works (as defined under 17 U.S.C. 901
of the U.S. Copyright Act), whether registered or unregistered, moral rights,
reversionary interests, termination rights, and, with respect to any and all of
the foregoing: (i) all registrations and applications therefor including,
without limitation, the registrations and applications required to be listed in
Schedule C
hereto, (ii) all extensions and renewals thereof, (iii) all rights corresponding
thereto throughout the world, (iv) all rights to sue for past, present and
future infringements thereof, and (v) all Proceeds of the foregoing, including,
without limitation, licenses, royalties, income, payments, claims, damages and
proceeds of suit.

        
          
             

          

          
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        (d)           “Equipment”
means goods (other than Inventory) whether now owned or hereafter acquired and
wherever located including, without limitation, all equipment, machinery,
apparatus, motor vehicles, fittings, furniture, furnishings, fixtures, parts,
accessories and all replacements and substitutions therefor or accessions
thereto.

         

        (e)           “General
Intangibles” means all general intangibles as defined in the UCC, whether now
owned or hereafter acquired, including, without limitation, all payment
intangibles, and without limiting the generality of the foregoing all of the
following whether or not constituting general intangibles as defined in the UCC:
all choses in action, causes of action, corporate or other business records,
inventions, designs, equipment formulations, manufacturing procedures, quality
control procedures, service marks, trade secrets, goodwill, design rights,
software, computer information, source codes, codes, records and updates,
registrations, licenses, franchises, customer lists, tax refunds, tax refund
claims, computer programs, all claims under guaranties, security interests or
other security held or granted to secure payment of any of the Receivables by a
Customer (other than to the extent covered by Receivables), all rights of
indemnification and all other intangible property of every kind and nature
(other than Receivables).

         

        (f)      
     “Inventory” means all now owned or hereafter
acquired goods, merchandise and other personal property, wherever located, to be
furnished under any consignment arrangement, contract of service or held for
sale or lease, all raw materials, work in process, finished goods and materials
and supplies of any kind, nature or description which are or might be used or
consumed in such party’s business or used in selling or furnishing such goods,
merchandise and other personal property, and all documents of title or other
documents representing them.

         

        (g)           “Intellectual
Property” means all Copyrights, Copyright Licenses, Patents, Patent Licenses,
Trademarks and Trademark Licenses.

         

        (h)           “Investment
Property” means all now owned or hereafter acquired securities (whether
certificated or uncertificated), securities entitlements, securities accounts,
commodities contracts and commodities accounts.

         

        (i)        
   “Obligations” means all of the Company’s obligations under
this Agreement and the Notes, in each case, whether now or hereafter existing,
voluntary or involuntary, direct or indirect, absolute or contingent, liquidated
or unliquidated, as such obligations may be amended, supplemented, converted,
extended or modified from time to time.

         

        (j)         
  “Patent Licenses” shall mean all agreements, licenses and covenants
providing for the granting of any right in or to Patents or otherwise providing
for a covenant not to sue (whether the Debtor is licensee or licensor
thereunder) including, without limitation, each agreement referred to in Schedule
C.

        
          
             

          

          
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        (k)         “Patents”
shall mean all United States and foreign patents and certificates of invention,
or similar industrial property rights, and applications for any of the
foregoing, including, without limitation: (i) each patent and patent application
referred to in Schedule C hereto,
(ii) all reissues, divisions, continuations, continuations-in-part, extensions,
renewals, and reexaminations thereof, (iii) all rights corresponding thereto
throughout the world, (iv) all inventions and improvements described therein,
(v) all rights to sue for past, present and future infringements thereof, (vi)
all licenses, claims, damages, and proceeds of suit arising therefrom, and (vii)
all Proceeds of the foregoing, including, without limitation, licenses,
royalties, income, payments, claims, damages, and proceeds of suit.

         

        (l)          “Permitted
Liens” means any and all of the following:  (i) liens existing as of
the date of this Agreement and listed on Schedule D; (ii)
liens for taxes, fees, assessments or other governmental charges or levies,
either not delinquent or being contested in good faith by appropriate
proceedings; provided, that the Company maintains adequate reserves therefor in
accordance with GAAP; (iii) liens securing claims or demands of materialmen,
artisans, mechanics, carriers, warehousemen, landlords and other like persons
arising in the ordinary course of the Company’s business and imposed without
action of such parties; provided, that the payment thereof is not yet required;
(iv) liens arising from judgments, decrees or attachments that do not exceed
$250,000 and to the extent applicable are not covered by a policy of insurance;
(v) the following deposits, to the extent made in the ordinary course of
business:  deposits under worker’s compensation, unemployment
insurance, social security and other similar laws, or to secure the performance
of bids, tenders or contracts or to secure indemnity, performance or other
similar bonds for the performance of bids, tenders or contracts (other than for
the repayment of borrowed money) or to secure statutory obligations (other than
liens arising under ERISA or environmental liens) or surety or appeal bonds, or
to secure indemnity, performance or other similar bonds; (vi) purchase money
security interests and liens in connection with financing leases on equipment,
and (vii) liens incurred in connection with the extension, renewal or
refinancing of the indebtedness secured by liens of the type described in clause
(vi) above.

         

        (m)        “Receivables”
means (i) all Accounts (as defined in the UCC), (ii) such contract rights,
instruments, documents, chattel paper (including, without limitation, electronic
chattel paper), general intangibles relating to accounts, drafts and
acceptances, credit card receivables and all other forms of obligations owing
arising out of or in connection with the sale or lease of Inventory or the
rendition of services, and (iii) all supporting obligations, guarantees and
other security for any of the foregoing, whether secured or unsecured, now
existing or hereafter created.

         

        (n)         “Secured
Parties” means from time to time each person or entity who is at any such time a
Holder (as defined in the Purchase Agreement).

         

        (o)         “Trademark
Licenses” shall mean any and all agreements, licenses and covenants providing
for the granting of any right in or to Trademarks or otherwise providing for a
covenant not to sue or permitting co-existence (whether the Debtor is licensee
or licensor thereunder) including, without limitation, each agreement referred
to in Schedule C.

         

        (p)         “Trademarks”
shall mean all United States, and foreign trademarks, trade names, corporate
names, company names, business names, fictitious business names, Internet domain
names, service marks, certification marks, collective marks, logos, other source
or business identifiers, designs and general intangibles of a like nature, all
registrations and applications for any of the foregoing including, without
limitation: (i) the registrations and applications referred to in Schedule C, (ii) all
extensions or renewals of any of the foregoing, (iii) all of the goodwill of the
business connected with the use of and symbolized by the foregoing, (iv) the
right to sue for past, present and future infringement or dilution of any of the
foregoing or for any injury to goodwill, and (v) all Proceeds of the foregoing,
including, without limitation, licenses, royalties, income, payments, claims,
damages, and proceeds of suit.

        
          
             

          

          
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        (q)           “UCC”
means the Uniform Commercial Code, as currently in effect in the State of New
York.

         

        2.           Grant of Security
Interest.  To secure the payment and performance of all of the
Obligations, the Debtor hereby grants to the Collateral Agent, a continuing
security interest in all of the Debtor’s right, title and interest of whatsoever
kind and nature in and to the Collateral (the “Security
Interest”).  Notwithstanding any provision of this Agreement to the
contrary, Collateral shall not include (i) any property that is subject to a
Permitted Lien pursuant to subsection (vi) of such definition to the extent that
such Permitted Lien prohibits the security interest hereunder or (ii) any
agreement with a third party existing on the date hereof that prohibits the
grant of a lien on (but not merely the assignment of or of any interest in) such
agreement or any of the Debtor’s rights thereunder without the consent of such
party or under which a consent to such grant is otherwise required, which
consent has not been obtained, except to the extent any such prohibition is made
ineffective as a result of Section 9-406(d), 9-407, 9-408, or 9-409 of the
UCC.

         

        3.           Representations, Warranties,
Covenants and Agreements of the Debtor.  The Debtor represents
and warrants to, and covenants and agrees with, the Collateral Agent as
follows:

         

        (a)           The
Debtor has the requisite corporate power and authority to enter into this
Agreement and otherwise to carry out its obligations hereunder.  The
execution, delivery and performance by the Debtor of this Agreement and the
filings contemplated herein have been duly authorized by all necessary action on
the part of the Debtor and no further action is required by the
Debtor.  This Agreement constitutes a legal, valid and binding
obligation of the Debtor enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditor’s rights
generally.

         

        (b)           The
Debtor represents and warrants that it has no place of business or offices where
its respective books of account and records are kept (other than temporarily at
the offices of its attorneys or accountants) or places where Collateral is
stored or located, except as set forth on Schedule A attached
hereto.

         

        (c)           The
full legal name of the Debtor is as set forth on the signature page
hereof.  The Debtor has not done in the last five (5) years, and does
not do, business under any other name (including, without limitation, any trade
name or fictitious business name), except as set forth on Schedule B attached
hereto.

        
          
             

          

          
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        (d)         Without
limiting any prohibitions or restrictions in the Note, the Debtor shall not
change its name, identity, corporate structure (e.g., by merger,
consolidation, change in corporate form or otherwise), sole place of business,
chief executive office, type of organization or jurisdiction of organization or
establish any trade names unless it shall have (a) notified the Collateral Agent
in writing at least ten (10) days prior to any such change or establishment,
identifying such new proposed name, identity, corporate structure, sole place of
business, chief executive office, jurisdiction of organization or trade name and
providing such other information in connection therewith as the Collateral Agent
may reasonably request and (b) taken all actions reasonably necessary or
advisable to maintain the continuous validity, perfection and the same priority
of the Collateral Agent’s security interest in the Collateral intended to be
granted and agreed to hereby.

         

        (e)         Except
for Permitted Liens, the Debtor is the sole owner of the Collateral (except for
exclusive, semi-exclusive and non-exclusive licenses granted by a Debtor in the
ordinary course of business which licenses existing as of the date hereof are
identified on Schedule
E hereto), free and clear of any liens, security interests, encumbrances,
rights or claims, and, subject to the receipt of the consent of BIO-RAP under
the License Agreement, is fully authorized to grant the Security Interest in and
to pledge the Collateral.

         

        (f)          This
Agreement creates in favor of the Collateral Agent a valid security interest in
the Collateral securing the payment and performance of the Obligations and, upon
making the filings described in the immediately following sentence, a perfected
first priority security interest in such Collateral.  Except for the
filing of financing statements on Form-1 under the UCC with the Secretary of
State of the State of Delaware, no authorization or approval of or filing with
or notice to any governmental authority or regulatory body is required either
(i) for the grant by a Debtor of, or the effectiveness of, the Security Interest
granted hereby or for the execution, delivery and performance of this Agreement
by the Debtor or (ii) for the perfection of or exercise by the Collateral Agent
of its rights and remedies hereunder.

         

        (g)         Other
than Permitted Liens and Permitted Transfers, the Debtor will not transfer,
pledge, hypothecate, encumber, license, sell or otherwise dispose of any of the
Collateral without the prior written consent of the Collateral
Agent.  “Permitted Transfers” means (i) sales of inventory in the
normal course of business, (ii) licenses of technology in the ordinary course of
business on commercially reasonable terms and consistent with the Company's past
practices, (iii) dispositions of worn-out or obsolete equipment and dispositions
of equipment not exceeding $50,000 per year, (iv) certain amounts that may be
payable to JMP Securities LLC pursuant to the engagement letter dated November
18, 2008 in the event of the sale of all or substantially all of the Debtor’s
business, or (v) payment of certain amounts owed to unsecured creditors of the
Debtor, including approximately $475,000 in liabilities outstanding as of
December 31, 2008, and up to $3,199,955 in additional liabilities that are
anticipated to be incurred in the near term, including, without limitation,
operating expenses, severance payments, cost of tail policies relating to the
current directors’ and officers’ liability insurance policies maintained by the
Company on the date of this Agreement and other costs related to the winding-up
of the Company’s business; provided, however, that of the
amount to be paid in additional liabilities, $1,462,000 shall be reserved for
the payment of all costs related to the winding-up of the Company’s business and
$136,000 shall be paid to BIO-RAP, which represents all the payments due to
BIO-RAP under the License Agreement between BIO-RAP and the Company through
December 31, 2009.  The funds for the payment of such liabilities
shall first come from available cash on hand and second, from proceeds of the
sale or other liquidation of unencumbered assets, excluding the
Collateral.  The Collateral may not be sold to unsecured creditors and
the proceeds may not be used to pay any of the unsecured
creditors.

        
          
             

          

          
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        (h)         The
Debtor shall promptly execute (as applicable) and deliver to the Collateral
Agent such further assignments, security agreements, financing statements or
other instruments, documents, certificates and assurances and take such further
action as the Collateral Agent may from time to time reasonably request and may
reasonably deem necessary to perfect, protect or enforce its security interest
in the Collateral.

         

        (i)          
Schedule C sets
forth a true and complete list of (i) all United States, state and foreign
registrations of and applications for Patents, Trademarks, and Copyrights owned
by or, in the case of Copyrights, exclusively licensed to, the Debtor and (ii)
all Patent Licenses, Trademark Licenses, Trade Secret Licenses and Copyright
Licenses relating to all of the Company’s diagnostic assets, including, without
limitation, (a) the License Agreement between BIO-RAP and the Company, (b) the
Licensed Technology (as defined in the License Agreement) being developed
thereunder, (c) the Company’s HAPTOCHEKTM diagnostic test kit, and (d) the
Company’s diagnostic test kit for the measurement of CML.

         

        (j)          
The Debtor shall promptly report to the Collateral Agent (i) the filing of any
application to register any Intellectual Property with the United States Patent
and Trademark Office, the United States Copyright Office, or any state registry
or foreign counterpart of the foregoing (whether such application is filed by
the Company or through any agent, employee, licensee, or designee thereof) and
(ii) the registration of any Intellectual Property by any such
office.  The Debtor shall take such step as may be reasonably
requested by the Collateral Agent to ensure that the security interest of the
Collateral Agent is registered with each such recording office.

         

        (k)         
With respect to any Collateral that is evidenced by, or constitutes, a
Certificated Security, Chattel Paper or Instrument (other than any Chattel Paper
or Instruments having a value less than $10,000 individually or $50,000 in the
aggregate), the Debtor shall cause each originally executed copy thereof to be
delivered to the Collateral Agent (or its agent or designee) appropriately
indorsed to the Collateral Agent or indorsed in blank:  (i) with
respect to any such Collateral in existence on the date hereof, on or prior to
the date hereof and (ii) with respect to any such Collateral hereafter arising,
within ten (10) days of the Debtor acquiring rights therein.

         

        4.           Event of
Default.  The occurrence of an Event of Default (as defined in
the Notes) under the Notes shall constitute an Event of Default
hereunder.

         

        5.           Duty To Hold In
Trust.  Upon the occurrence of any Event of Default that
remains continuing and at any time thereafter, following written notice from
Collateral Agent the Company shall, upon receipt by it of any revenue, income or
other sums subject to the Security Interest, whether payable pursuant to the
Notes or otherwise, or of any check, draft, note, trade acceptance or other
instrument evidencing an obligation to pay any such sum, hold the same in trust
for the Collateral Agent and shall forthwith endorse and transfer any such sums
or instruments, or both, to the Collateral Agent for application to the
satisfaction of the Obligations.

        
          
             

          

          
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        6.           Rights and Remedies Upon
Default.  Upon occurrence of any Event of Default that remains
continuing and at any time thereafter, the Collateral Agent shall have the right
to exercise all of the remedies conferred hereunder, and the Collateral Agent
shall have all the rights and remedies of a Collateral Agent under the UCC
and/or any other applicable law or in equity (including, without limitation, the
Uniform Commercial Code of any jurisdiction in which any Collateral is then
located).  Without limitation, the Collateral Agent shall have the
following rights and powers:

         

        (a)           The
Collateral Agent shall have the right to take possession of the Collateral and,
for that purpose, enter, with the aid and assistance of any person, any premises
where the Collateral, or any part thereof, is or may be placed and remove the
same, and the Debtor shall assemble the Collateral and make it available to the
Collateral Agent at places which the Collateral Agent shall reasonably select,
whether at the Company’s premises or elsewhere, and make available to the
Collateral Agent, without rent, all of the Company’s respective premises and
facilities for the purpose of the Collateral Agent taking possession of,
removing or putting the Collateral in saleable or disposable form.

         

        (b)           The
Collateral Agent shall have the right to operate the business of the Debtor
using the Collateral and shall have the right to assign, sell, lease or
otherwise dispose of and deliver all or any part of the Collateral, at public or
private sale or otherwise, either with or without special conditions or
stipulations, for cash or on credit or for future delivery, in such parcel or
parcels and at such time or times and at such place or places, and upon such
terms and conditions as the Collateral Agent may deem commercially reasonable,
all without (except as shall be required by applicable statute and cannot be
waived) advertisement or demand upon or notice to the Company or right of
redemption of the Company, which are hereby expressly waived.  Upon
each such sale, lease, assignment or other transfer of Collateral, the
Collateral Agent may, unless prohibited by applicable law which cannot be
waived, purchase all or any part of the Collateral being sold, free from and
discharged of all trusts, claims, right of redemption and equities of the
Company, which are hereby waived and released.

         

        7.           Applications of
Proceeds.  The proceeds of any such sale, lease or other
disposition of the Collateral hereunder shall be applied first, to the expenses
of retaking, holding, storing, processing and preparing for sale, selling, and
the like (including, without limitation, any taxes, fees and other costs
incurred in connection therewith) of the Collateral, to the reasonable
attorneys’ fees and expenses incurred by the Collateral Agent in enforcing its
rights hereunder and in connection with collecting, storing and disposing of the
Collateral, and then to satisfaction of the Obligations, and to the payment of
any other amounts required by applicable law, after which the Collateral Agent
shall pay to the Company any surplus proceeds.

         

        8.           Costs and
Expenses.  The Company agrees to pay all reasonable
out-of-pocket fees, costs and expenses incurred in connection with any filing
required hereunder, including without limitation, any financing statements,
continuation statements, partial releases and/or termination statements related
thereto.  The Company will also, upon demand, pay to the Collateral
Agent the amount of any and all reasonable expenses, including the reasonable
fees and expenses of its counsel, which the Collateral Agent may incur in
connection with (i) the enforcement of this Agreement or (ii) the custody or
preservation of, or the sale of, collection from, or other realization upon, any
of the Collateral.

        
          
             

          

          
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        9.           Security Interest
Absolute.  All rights of the Collateral Agent and all
Obligations of the Debtor hereunder, shall be absolute and unconditional,
irrespective of: (a) any lack of validity or enforceability of this Agreement,
the Notes or any agreement entered into in connection with the foregoing, or any
portion hereof or thereof; (b) any change in the time, manner or place of
payment or performance of, or in any other term of, all or any of the
Obligations, or any other amendment or waiver of or any consent to any departure
from the Notes or any other agreement entered into in connection with the
foregoing; (c)  any exchange, release or nonperfection of any of the
Collateral, or any release or amendment or waiver of or consent to departure
from any other collateral for, or any guaranty, or any other security, for all
or any of the Obligations; (d) any action by the Collateral Agent to obtain,
adjust, settle and cancel in its sole discretion any insurance claims or matters
made or arising in connection with the Collateral; or (e) any other circumstance
which might otherwise constitute any legal or equitable defense available to the
Debtor, or a discharge of all or any part of the Security Interest granted
hereby.  The Debtor expressly waives presentment, protest, notice of
protest, demand, notice of nonpayment and demand for performance.  In
the event that at any time any transfer of any Collateral or any payment
received by the Collateral Agent hereunder shall be deemed by final order of a
court of competent jurisdiction to have been a voidable preference or fraudulent
conveyance under the bankruptcy or insolvency laws of the United States, or
shall be deemed to be otherwise due to any party other than the Collateral
Agent, then, in any such event, the Debtor’s obligations hereunder shall survive
cancellation of this Agreement, and shall not be discharged or satisfied by any
prior payment thereof and/or cancellation of this Agreement, but shall remain a
valid and binding obligation enforceable in accordance with the terms and
provisions hereof.  The Debtor waives all right to require the
Collateral Agent to proceed against any other person or to apply any Collateral
which the Collateral Agent may hold at any time, or to marshal assets, or to
pursue any other remedy.  The Debtor waives any defense arising by
reason of the application of the statute of limitations to any obligation
secured hereby.

         

        10.         Power of
Attorney.  The Debtor hereby irrevocably appoints the
Collateral Agent (such appointment being coupled with an interest) as the
Debtor’s attorney-in-fact, with full authority in the place and stead of the
Debtor and in the name of the Debtor, the Collateral Agent or otherwise, from
time to time upon the occurrence and during the continuance of any Event of
Default in the Collateral Agent’s discretion to take any action and to execute
any instrument that the Collateral Agent may deem reasonably necessary or
advisable to accomplish the purposes of this Agreement.

         

        11.         Access; Right of
Inspection.  The Collateral Agent shall at all times have full
and free access during normal business hours following reasonable advance notice
to all the books, correspondence and records of the Debtor, and the Collateral
Agent and its representatives may examine the same, take extracts therefrom and
make photocopies thereof, and the Debtor agrees to render to the Collateral
Agent, at the Debtor's cost and expense, such clerical and other assistance as
may be reasonably requested with regard thereto.  The Collateral Agent
and its representatives shall at all times also have the right to enter any
premises of the Debtor and inspect any property of the Debtor where any of the
Collateral of the Debtor granted pursuant to this Agreement is located for the
purpose of inspecting the same, observing its use or otherwise protecting its
interests therein.

         

        
          
             

          

          
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        12.           Further
Assurances.  The Debtor agrees that from time to time, at its
expense, that it shall promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary or desirable, or
that the Collateral Agent may reasonably request, in order to create and/or
maintain the validity, perfection or priority of and protect any security
interest granted hereby or to enable the Collateral Agent to exercise and
enforce its rights and remedies hereunder with respect to any
Collateral.

         

        13.           Term of
Agreement.  This Agreement and the Security Interest shall
terminate on the date on which all payments under the Notes have been made in
full.  Upon such termination, the Collateral Agent will promptly file
all termination statements with respect to any financing statement executed and
filed pursuant to this Agreement.

         

        14.           Notices.  All
notices, requests, demands and other communications hereunder shall be in
writing and shall be sent in accordance with the provision of Section 9 of the
Purchase Agreement.

         

        15.           Miscellaneous.

         

          (a)           No
course of dealing between the Debtor and the Collateral Agent, nor any failure
to exercise, nor any delay in exercising, on the part of the Collateral Agent,
any right, power or privilege hereunder or under the Notes shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or thereunder preclude any other or further exercise thereof
or the exercise of any other right, power or privilege.

         

         
(b)           All
of the rights and remedies of the Collateral Agent with respect to the
Collateral, whether established hereby or by the Notes or by any other
agreements, instruments or documents or by law shall be cumulative and may be
exercised singly or concurrently.

         

          (c)           This
Agreement constitutes the entire agreement of the parties with respect to the
subject matter hereof and is intended to supersede all prior negotiations,
understandings and agreements with respect thereto.  Except as
specifically set forth in this Agreement, no provision of this Agreement may be
modified or amended except by a written agreement specifically referring to this
Agreement and signed by the parties hereto.

         

         
(d)           In
the event that any provision of this Agreement is held to be invalid, prohibited
or unenforceable in any jurisdiction for any reason, unless such provision is
narrowed by judicial construction, this Agreement shall, as to such
jurisdiction, be construed as if such invalid, prohibited or unenforceable
provision had been more narrowly drawn so as not to be invalid, prohibited or
unenforceable.  If, notwithstanding the foregoing, any provision of
this Agreement is held to be invalid, prohibited or unenforceable in any
jurisdiction, such provision, as to such jurisdiction, shall be ineffective to
the extent of such invalidity, prohibition or unenforceability without
invalidating the remaining portion of such provision or the other provisions of
this Agreement and without affecting the validity or enforceability of such
provision or the other provisions of this Agreement in any other
jurisdiction.

         

          (e)           No
waiver of any breach or default or any right under this Agreement shall be
considered valid unless in writing and signed by the party giving such waiver,
and no such waiver shall be deemed a waiver of any subsequent breach or default
or right, whether of the same or similar nature or otherwise.

        
          
             

          

          
            10

            
              

            

          

          
             

          

        

        (f)          This
Agreement shall be binding upon and inure to the benefit of each party hereto
and its successors and assigns.

         

        (g)         This
Agreement shall be construed in accordance with the laws of the State of New
York, except to the extent the validity, perfection or enforcement of a security
interest hereunder in respect of any particular Collateral which are pursuant to
mandatory choice of law rules governed by a jurisdiction other than the State of
New York in which case such law shall govern.

         

        (h)         This
Agreement may be executed in any number of counterparts, each of which when so
executed shall be deemed to be an original, and all of which taken together
shall constitute one and the same Agreement.  In the event that any
signature is delivered by facsimile transmission, such signature shall create a
valid binding obligation of the party executing (or on whose behalf such
signature is executed) the same with the same force and effect as if such
facsimile signature were the original thereof.

         

        (i)           To
the fullest extent permitted by applicable law, the Debtor shall remain
obligated hereunder notwithstanding that, any demand for payment of any of the
Obligations made by any Secured Party may be rescinded by such Secured Party and
any of the Obligations continued, and the Obligations or any collateral security
or guarantee therefor or right of offset with respect thereto, may, from time to
time, in whole or in part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by the Collateral Agent or any
Secured Party, and the Note and/or Purchase Agreement and any other documents
executed and delivered in connection therewith may be amended, modified,
supplemented or terminated, in whole or in part, as the Collateral Agent (or the
requisite Holders) may deem advisable from time to time, and any collateral
security, guarantee or right of offset at any time held by any Secured Party for
the payment of the Obligations may be sold, exchanged, waived, surrendered or
released.

         

        [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

        
          
             

          

          
            11

            
              

            

          

          
             

          

        

        IN
WITNESS WHEREOF, the parties hereto have caused this Security Agreement to be
duly executed on the day and year first above written.

         

        
          
            
              
                
                  
                    
                      
                        
                          	
                                  DEBTOR:

                                
	 
	
                                  SYNVISTA
      THERAPEUTICS, INC.

                                
	 
      	 
      
	
                                  By:

                                	
                                  /s/
      Noah Berkowitz, M.D., Ph.D.

                                
	
                                  Name:  

                                	
                                  Noah
      Berkowitz, M.D., Ph.D.

                                
	
                                  Title:

                                	
                                  President
      and Chief Executive Officer

                                
	 
      	 
      
	
                                  COLLATERAL AGENT:

                                
	 
      	 
      
	
                                  BAKER
      BROS. ADVISORS, LLC

                                
	 
      	 
      
	
                                  By:

                                	
                                  /s/
      Julian Baker

                                
	
                                  Name:

                                	
                                  Julian
      Baker

                                
	
                                  Title:

                                	
                                  Managing
      Member

                                

                        

                      

                    

                  

                

              

            

          

        

        
          
             

          

          
            12

            
              

            

          

          
             

          

        

        SCHEDULE
A

         

        Places of Business of the
Company:

         

        221 West
Grand Avenue

        Montvale,
New Jersey 07645

         

        Locations Where Collateral
is Located or Stored:

         

        221 West
Grand Avenue

        Montvale,
New Jersey 07645

        

        Maine
Biotechnology Services, Inc,

        1037R
Forest Avenue

        Portland,
ME 04103

        207-797-5595

        

        Dr. Andy
Levy

        Technion
Faculty of Medicine

        Technion
Israel Institute of Technology

        Rappaport
Building 12th Floor

        Haifa 31096

        Israel

        

        Biocheck

        323
Vintage Park Drive

        Foster
City, CA 94404

        
          
             

          

          
            13

            
              

            

          

          
             

          

        

        SCHEDULE
B

         

        The
Company changed its name from Alteon Inc. to Synvista Therapeutics, Inc.
effective July 25, 2007.

         

        
          
             

          

          
            14

            
              

            

          

          
             

          

        

         

        SCHEDULE
C

        

        List of
Intellectual Property

         

        Copyrights

         

        None.

         

        Copyright
Licenses

         

        None.

         

        Patents

         

        See
attached for list of issued patents and patent applications of the
Company.

         

        Patent
Licenses

         

        
          	
                   
      

                	
                  1.

                	
                  License
      and Research Agreement dated as of July 12, 2004 by and between BIO-RAP
      Technologies, Ltd., an Israeli corporation on its own behalf and on behalf
      of the Rappaport Family Institute for Research in the Medical Sciences and
      HaptoGuard, Inc.

                

        

         

        Trademarks

         

        None.

         

        Trademark
Licenses

         

        None.

         

        
          
             

          

          
            15

            
              

            

          

          
             

          

        

        SCHEDULE
D

        

        Existing
Liens

         

        None.

         

        
          
             

          

          
            16

            
              

            

          

          
             

          

        

        SCHEDULE
E

        

        Existing
Licenses Where Debtor is Licensor

        

        ARUP
Laboratories at the University of Utah

        MicroCoat
Biotechnolgie GmbH

        
          
             

          

          
            17Exhibit
10.3

      

      Execution
Copy

      

      INTELLECTUAL
PROPERTY SECURITY AGREEMENT

      

      INTELLECTUAL
PROPERTY SECURITY AGREEMENT (this “Agreement”), dated as of February 24, 2009,
by and among Synvista Therapeutics, Inc., a Delaware corporation (“Debtor”) and
Baker Bros. Advisors, LLC, as Collateral Agent for the Secured Parties (together
with its successors and assigns in such capacity, the “Collateral
Agent”).

       

      WITNESSETH:

       

      WHEREAS,
pursuant to a Note Purchase Agreement, dated the date hereof, between Debtor and
the Collateral Agent (the “Purchase Agreement”), Debtor has agreed to issue to
the Holders (as defined in the Purchase Agreement) and the Holders have each
agreed to purchase from Debtor certain of Debtor’s Senior Secured Notes (the
“Notes”) in the principal amounts as described in the Purchase Agreement;
and

       

      WHEREAS, in order to induce the Holders
(as defined in the Purchase Agreement) to purchase the Notes, the Debtor has
agreed to execute and deliver to the Collateral Agent for the benefit of the
Secured Parties (as defined in the Security Agreement) that certain Security
Agreement dated the date hereof for the benefit of the Collateral Agent and the
Secured Parties in which the Debtor has, among other things, granted to the
Collateral Agent a security interest in the Collateral (as defined in the
Security Agreement) including a security interest in all of the Debtor’s United
States and foreign patents and certificates of invention, or similar industrial
property rights, and applications for any of the foregoing, including, without
limitation: (i) each patent and patent application referred to in Schedule I hereto,
(ii) all reissues, divisions, continuations, continuations-in-part, extensions,
renewals, and reexaminations thereof, (iii) all rights corresponding thereto
throughout the world, (iv) all inventions and improvements described therein,
(v) all rights to sue for past, present and future infringements thereof, (vi)
all licenses, claims, damages, and proceeds of suit arising therefrom, and (vii)
all Proceeds of the foregoing, including, without limitation, licenses,
royalties, income, payments, claims, damages, and proceeds of suit, in each case
relating to all of Debtor’s diagnostic assets, including, without limitation,
(a) that certain License and Research Agreement dated as of July 12, 2004,
as amended (the “License Agreement”), between BIO-RAP Technologies Ltd., on its
own behalf and on behalf of the Rappaport Family Institute for Research in the
Medical Sciences, and Debtor, (b) the Licensed Technology (as defined in the
License Agreement) being developed thereunder, (c) Debtor’s HAPTOCHEKTM
diagnostic test kit, and (d) Debtor’s diagnostic test kit for the measurement of
carboxy-methyllysine (“CML”) (together, the “Patent Collateral”) and all
United States and foreign trademarks, trade names, corporate names, company
names, business names, fictitious business names, Internet domain names, service
marks, certification marks, collective marks, logos, other source or business
identifiers, designs and general intangibles of a like nature, all registrations
and applications for any of the foregoing including, without limitation: (i) the
registrations and applications referred to in Schedule II, (ii) all
extensions or renewals of any of the foregoing, (iii) all of the goodwill of the
business connected with the use of and symbolized by the foregoing, (iv) the
right to sue for past, present and future infringement or dilution of any of the
foregoing or for any injury to goodwill, and (v) all Proceeds of the foregoing,
including, without limitation, licenses, royalties, income, payments, claims,
damages, and proceeds of suit, in each case relating to all of Debtor’s
diagnostic assets, including, without limitation, (a) the License Agreement, (b)
the Licensed Technology (as defined in the License Agreement) being developed
thereunder, (c) Debtor’s HAPTOCHEKTM diagnostic test kit, and (d) Debtor’s
diagnostic test kit for the measurement of CML (collectively, the “Trademark
Collateral” and together with the Patent Collateral the “IP Collateral”), to
secure the payment and performance of all of the Obligations (as defined in the
Security Agreement);

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      NOW, THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Borrower and the Collateral Agent agree as follows:

      

      1.           The
Debtor hereby grants to the Collateral Agent, for the benefit of the Collateral
Agent, a continuing security interest in (i) all of the Debtor’s right, title
and interest in and to the IP Collateral, (ii) the right (but not the
obligation) to sue or bring like proceedings in the name of the Debtor or in the
name of the Collateral Agent for past, present and future infringements of the
IP Collateral and (iii) all rights (but not obligations) corresponding thereto
in the United States and any foreign country.  The Debtor hereby
further acknowledges and affirms that the rights and remedies of the Collateral
Agent with respect to the security interest in the IP Collateral are more fully
set forth in the Security Agreement, the terms and provisions of which are
incorporated by reference herein as if fully set forth herein.

      

      2.           All
notices, demands, consents, statements, requests, approvals or other
communications which are permitted or required to be given by either party to
the other hereunder shall be in writing and shall be given as provided in
Section 9 of the Purchase Agreement.

      

      3.           This
Agreement cannot be modified, changed or discharged except by an agreement in
writing signed by the Debtor and the Collateral Agent.

      

      4.           This
Agreement shall be construed and enforced in accordance with the laws of the
State of New York.

      

      5.           This
Agreement is subject in all respects to the Security Agreement, the terms of
which are incorporated herein by this reference.

      

      6.           The
security interests created hereunder and under the Security Agreement in the IP
Collateral shall cease and be released in accordance with the terms of the
Security Agreement and the Purchase Agreement.

      

      7.           If
any provision hereof conflicts with any provision of the Security Agreement, the
terms of the Security Agreement shall control to the extent of such
inconsistency.

      

      8.           The
Debtor and the Collateral Agent hereby request that the Commissioner of Patents
and Trademarks record this Agreement with respect to the applicable IP
Collateral.

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      9.        Authorization
to Supplement.  If the Debtor shall obtain rights to any additional
patent application, patent, trademark or trademark application relating to the
IP Collateral or for any reissue, division, or continuation, of any patent or
trademark relating to the IP Collateral, the provisions of this Agreement shall
automatically apply thereto.  The Debtor shall give prompt notice in
writing to Collateral Agent with respect to any such new patent rights. Without
limiting the Debtor’s obligations under this Section 9, Debtor authorizes
Collateral Agent unilaterally to modify this Agreement by amending Schedules I
and II respectively to include any such new patent rights or trademark rights.
Notwithstanding the foregoing, no failure to so modify this Agreement or amend
Schedule I or II shall in any way affect, invalidate or detract from Collateral
Agent’s continuing security interest in all Collateral, whether or not listed on
Schedule I or II.

      

      [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      IN
WITNESS WHEREOF, the Debtor and Collateral Agent have caused this Intellectual
Property Security Agreement to be duly executed and delivered as of the day and
year first above written.

      

      
        
          
            
              
                
                  	
                          DEBTOR:

                        
	 
      
	
                          SYNVISTA
      THERAPEUTICS, INC.

                        
	 
      	 
      
	
                          By:

                        	
                          /s/ Noah Berkowitz, M.D.,
    Ph.D.

                        
	
                          Name:  Noah
      Berkowitz, M.D., Ph.D.

                        
	
                          Title:    President
      and Chief Executive Officer

                        
	 
      	 
      
	
                          COLLATERAL
      AGENT:

                        
	 
      
	
                          BAKER
      BROS. ADVISORS, LLC

                        
	 
      	 
      
	
                          By:

                        	
                          /s/ Julian Baker

                        
	
                          Name: 
       Julian Baker

                        
	
                          Title:   
       Managing
Member

                        

                

              

            

          

        

      

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      

      SCHEDULE
I

      

      PATENTS
AND PATENT APPLICATIONS

       

      See
Attached.

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      SCHEDULE
II

      

      TRADEMARKS
AND TRADEMARK APPLICATIONS

       

      None.

      
        
           

        

        
          6

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