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  Exhibit 10.17    
    

 
 

LOAN AND SECURITY AGREEMENT

THIS LOAN AND SECURITY AGREEMENT NO. 4611 (this "Agreement") is entered into as of
March 21, 2005, by and between LIGHTHOUSE CAPITAL PARTNERS V, L.P. ("Lender") and  NOVACARDIA, INC., a Delaware corporation ("Borrower") and sets forth the terms and conditions
upon which Lender will lend and Borrower will repay money. In consideration of the mutual covenants herein contained, the parties agree as follows: 

1.     DEFINITIONS AND CONSTRUCTION

        1.1    Definitions.    Initially capitalized terms used and not otherwise defined herein are
defined in the California Uniform Commercial Code ("UCC"). 

"ACH" means the Automated Clearing House electronic funds transfer system. 

"Advance" means a Loan advanced by Lender to Borrower hereunder. 

"Basic Rate" means a variable per annum rate of interest equal to the Index plus the Interest Margin
which shall be subject to upward or downward adjustment as effective as of the day the Index is changed. On and after the Loan Commencement Date the Basic Rate shall be fixed and not subject to any
further adjustments. Notwithstanding the foregoing, in no event shall the Basic Rate be less than 7%. 

"Borrower's Books" means all of Borrower's books and records, including records concerning Collateral, Borrower's assets, liabilities, business
operations or financial condition, on any media, and the equipment containing such information. 

"Collateral" means: (i) all property in which Lender now has or hereafter obtains a security interest or which is listed on any
UCC-1 naming Borrower as Debtor in any capacity and Lender or an affiliate of Lender as Secured Party including Exhibit A
attached hereto; and (ii) all products and proceeds of the foregoing, including proceeds of insurance and proceeds of proceeds; provided that,
"Collateral" shall not include any of the following: (x) any Intellectual Property, provided,  however, that the Collateral shall include all accounts
and general intangibles and the resulting proceeds of such accounts and general intangibles that
consist of rights to payment from the sale, licensing or disposition of all or any part of, or rights in, the Intellectual Property (the "Rights to
Payment"). Notwithstanding the foregoing, if a judicial authority (including a U.S. Bankruptcy Court) holds that a security interest in the underlying Intellectual
Property is necessary to have a security interest in the Rights to Payment, then the collateral shall automatically, and effective as of the date of this Agreement include the Intellectual Property
only to the extent necessary to permit perfection of Lender's security interest in the Rights to Payment; or (y) any property of Borrower (a) that is nonassignable by its terms without
the consent of another party (but only to the extent such prohibition on transfer is enforceable under applicable law, including, without limitation, Sections 9406 and 9408 of the
UCC), or (b) the granting of a security interest therein is contrary to applicable law, provided that upon the cessation of any such restriction or prohibition,
such property shall automatically become part of the Collateral. 

"Commitment" means $5,000,000. 

"Commitment Fee" means $10,000. 

"Commitment Termination Date" means the earliest to occur of (i) September 1, 2005; (ii) any Default or Event of Default, or
(iii) in Lender's reasonable judgment, any adverse change in the management or composition of Borrower's Board of Directors after the date hereof. 

"Control Agreement" means an agreement substantially in the form of Exhibit I or otherwise
acceptable to Lender. 

"Default" means any event that with the passing of time or the giving of notice or both would become an Event of Default. 

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"Default Rate" means the lesser of 5% per annum above the interest rate then in effect with respect to each Advance immediately before the relevant
Event of Default or the highest rate permitted by applicable law. 

"Disclosure Schedule" means the schedule attached as Schedule I hereto, as the same may be
amended from time to time by Borrower. 

"Event of Default" is defined in Section 8. 

"Funding Date" means any date on which an Advance is made to or on account of Borrower hereunder. 

"Indebtedness" means (i) all indebtedness for borrowed money or the deferred purchase of property or services; (ii) all obligations
evidenced by notes, bonds, debentures or similar instruments, (iii) all capital lease obligations, and (iv) all contingent obligations, including guaranties and obligations of
reimbursement or respecting letters of credit. 

"Incumbency Certificate" means the document in the form of Exhibit E. 

"Index" means the prevailing variable Prime Rate of annual interest as quoted from time to time in the western edition of the Wall
Street Journal. 

"Intellectual Property" means all of Borrower's right, title, and interest in and to the following: 

	(a)
	Copyrights,
trademarks and patents;

	(b)
	Any
and all trade secrets, and any and all intellectual property rights in computer software and computer software products now or hereafter existing, created, acquired
or held;

	(c)
	Any
and all design rights which may be available to Borrower now or hereafter existing, created, acquired or held;

	(d)
	The
right, but not the obligation, to sue for and collect damages by way of past, present and future infringement of the intellectual property rights identified above, but excluding
the recovery of such claims;

	(e)
	All
licenses or other rights to use any of the copyrights, patents or trademarks which are proprietary to the Borrower, and

	(f)
	All
amendments, renewals and extensions of any of the copyrights, trademarks or patents. 

"Interest Margin" means (i) prior to the Loan Commencement Date, 4% per annum; or (ii) at the Loan Commencement Date, 1.75%
per annum. 

"Lender's Expenses" means all reasonable costs or expenses (including reasonable attorneys' fees and expenses) incurred in connection with the
preparation, negotiation, modification, administration, or enforcement of the Loan or Loan Documents, or the exercise or preservation of any rights or remedies by Lender, whether or not suit is
brought. Lender will apply deposits received before the date hereof, if any, towards Lender's Expenses. 

"Lien" means any lien, security interest, pledge, bailment, lease, mortgage, hypothecation, conditional sales and title retention agreement, charge,
claim, or other encumbrance. 

"Liquidation Event" means any of: (1) a merger of Borrower with another entity unless (x) no Event of Default has occurred and is
continuing or would exist after giving effect to the transaction and (y) the resulting entity provides an unconditional, unlimited guaranty of the Obligations in form and substance reasonably
satisfactory to Lender and is of a credit quality reasonably acceptable to Lender; (ii) the sale of all or substantially all of Borrower's assets unless the acquiring entity provides an
unconditional, unlimited guaranty of the Obligations in form and substance reasonably satisfactory to Lender and is of a credit quality reasonably acceptable to Lender; or (iii) any transaction
(or series of related transactions) whereby the shareholders of Borrower owning at least 50% of the outstanding voting securities of Borrower immediately prior to such transaction(s) own less
than 25% of the outstanding voting securities of Borrower immediately after such transaction(s) other than as a result of a bona fide equity financing with corporate, institutional or venture
capital investors or the initial public offering of Borrower's capital stock. 

"Loan" means all of the Advances, however evidenced, and all other amounts due or to become due hereunder. 

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"Loan Commencement Date" means September 1, 2005. 

"Loan Documents" means, collectively, this Agreement, the Warrant, the Notes and all other documents, instruments and agreements entered into between
Borrower and Lender in connection with the Loan, all as amended or extended from time to time. 

"Negative Pledge Agreement" means an agreement in the form of Exhibit H. 

"Note" means a Secured Promissory Note in the form of Exhibit B. 

"Notice of Borrowing" means the form attached as Exhibit D. 

"Obligations" means all Loans, debt, principal, interest, fees, charges, Lender's Expenses and other amounts, obligations, covenants, and duties owing
by Borrower to Lender of any kind or description (whether pursuant to the Loan Documents or otherwise (with the exception of the Warrant), and whether or not for the payment of money), whether direct
or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, and including any of the same obtained by Lender by assignment or otherwise. 

"Permitted Indebtedness" means: (i) the Loan; (ii) unsecured trade debt incurred in the ordinary course of Borrower's business;
(iii) Indebtedness secured by clause (ii) of Permitted Liens; (iv) Indebtedness secured by a Lien described in clause (v) of the defined term "Permitted Liens",  provided such
Indebtedness does not exceed the lesser of the cost or fair market value of the equipment financed with such Indebtedness and is in an
amount not to exceed $1,000,000; and (v) extensions, refinancings, and renewals of any items of Permitted Indebtedness, provided that the
principal amount is not increased or the terms modified to impose more burdensome terms upon the Borrower. 

"Permitted Liens" means: (i) Liens in favor of Lender; (ii) any Liens existing as of the date hereof and disclosed on the Disclosure
Schedule; (iii) Liens for taxes, fees, assessments or other governmental charges or levies, either not delinquent or being contested in good faith by appropriate proceedings, provided the same
have no superior priority over Lender's Lien in the Collateral; (iv) Liens to secure payment of worker's compensation, employment insurance, old age pensions or other social security
obligations of Borrower in the ordinary course of Borrower's business; (v) purchase money Liens (including for this purpose Liens incurred in connection with capital leases) (a) on
Equipment acquired or held by Borrower incurred for financing the acquisition of the Equipment, or (b) existing on Equipment when acquired, if the Lien is confined to the property and
improvements and the proceeds of the Equipment; (vi) licenses or sublicenses of Borrower's Intellectual Property granted in the ordinary course of Borrower's business and, with respect to any
licenses where Borrower is the licensee, any interest or title of a licensor or sublicensor under any such license or sublicense; (vii) leases or subleases entered into in the ordinary course
of Borrower's business, in connection with Borrower's leased premises or leased property; (viii) Liens in favor of other financial institutions arising in connection with Borrower's deposit
accounts held at such institutions to secure standard fees for deposit services charged by, but not financing made available by such institutions and banker's liens, and rights of setoff incurred in
the ordinary course of business; (ix) materialmen's, mechanics', repairmen's, employees' or other like Liens arising in the ordinary course of business and which are not delinquent for more
than 45 days or are being contested in good faith by appropriate proceedings; and (x) Liens incurred in connection with the extension, renewal or refinancing of the indebtedness secured
by Liens of the type
described in clauses (i) through (vii) above, provided that any extension, renewal or replacement Lien shall be limited to the property
encumbered by the existing Lien and the principal amount of the indebtedness being extended, renewed or refinanced does not increase. 

"Regulated Substance" means any substance, material or waste the use, generation, handling, storage, treatment or disposal of which is regulated by any
local or state government authority, including any of the same designated by any authority as hazardous, genetic, cloning, fetal, or embryonic. 

"Responsible Officer" means each of the President, Chief Executive Officer and the Chief Financial Officer of Borrower. 

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"Term" means the period from and after the date hereof until the full, final and indefeasible payment and performance of all Obligations. 

"Warrant" means the Warrant in favor of Lender and its affiliates to purchase securities of Borrower substantially in the form of  Exhibit C. 

        1.2    Interpretation.    References to "Articles," "Sections," "Exhibits," and "Schedules"
are to articles, sections, exhibits and schedules herein and hereto unless otherwise indicated. "Hereof," "herein" and "hereunder" refer to this Agreement as a whole. "Including" is not limiting. All
accounting and financial computations shall be computed in accordance with generally accepted accounting principles consistently applied ("GAAP"). "Or"
is not necessarily exclusive. All interest computation interest shall be based on a 360-day year and actual days elapsed. 

2.     THE LOANS

        2.1    Commitment.    Subject to the terms hereof, Lender will make Advances to Borrower up to
the principal amount of the Commitment, before the Commitment Termination Date. Notwithstanding anything in the Loan Documents to the contrary, Lender's obligation to make any Advances or to lend the
undisbursed portion of the Commitment shall terminate on the Commitment Termination Date. Repaid principal of the Advances may not be re-borrowed. 

        2.2    The Advances.    A Note setting forth the specific terms of repayment will evidence
each Advance. No Advance will be made for less than $1,000,000, unless less than $1,000,000 remains available under the Commitment for borrowing. Absence of a Note evidencing any portion of the Loan
shall not impair Borrower's obligation to repay it to Lender. 

        2.3    Terms of Payment, Repayment.    

        (a)   Repayment.    Borrower shall repay the principal and pay interest on each Advance on the terms set forth in the
applicable Note. Amounts not paid when due hereunder or under the Note shall bear interest at the Default Rate. If a court of competent jurisdiction determines that Lender has received payments that,
if interest, would exceed the maximum lawfully permitted, Lender will instead apply such money to fees and expenses and then to early prepayment of principal. 

        (b)   ACH.    All payments due to Lender must be, at Lender's option, paid to Lender in cash or through ACH. Borrower
shall execute and deliver the ACH Authorization Form substantially in the form of Exhibit G. If the ACH payment arrangement is terminated for any
reason, Borrower shall make all payments due to Lender at Lender's address specified in Section 11.  

         (c)   Default Rate.    While an Event of Default has occurred and is
continuing, interest on
the Loan shall be increased to the Default Rate. Lender's failure to charge or accrue interest at the Default Rate during the existence of an Event of Default shall not be deemed a waiver by Lender of
its right or claim thereto. 

        (d)   Date.    Whenever any payment due under the Loan Documents is due on a day other than a business day, such
payment shall be made on the next succeeding business day, and such extension of time shall be included in the computation of interest or fees, as the case may be. 

        2.4    Fees.    Borrower shall pay to Lender the following: 

        (a)   Commitment Fee.    The Commitment Fee, which has been previously paid by Borrower, and shall be applied by
Lender to Lender's Expenses and other Obligations; 

        (b)   Late Fee.    On demand, a late charge on any sums due hereunder that are not paid within 3 days of when
due, in an amount equal to 2% of the past due amount, payable on demand. 

        (c)   Lender's Expenses.    When requested, all Lender's Expenses. Lender's Expenses not 

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paid
when due shall bear interest as principal at the Default Rate. 

3.     CONDITIONS OF ADVANCES; PROCEDURE FOR REQUESTING ADVANCES

        3.1    Conditions Precedent to any and all Advances.    The obligation of Lender to make any
Advances is subject to each and every of the following conditions precedent in form and substance reasonably satisfactory to Lender: (i) this Agreement, a Note evidencing the Advance, the
Warrant, and all other UCC financing statements, and other documents required or as specified herein have been duly authorized, executed and delivered; (ii) no Default or Event of Default has
occurred and is continuing; (iii) delivery of a Notice of Borrowing with respect to the proposed Advance; (iv) Lender's security interests in the Collateral are valid and first priority,
except for Permitted Liens; and (v) all such other items as Lender may reasonably deem necessary or appropriate have been delivered or satisfied. The extension of an Advance prior to the
receipt by Lender of any of the foregoing shall not constitute a waiver by Lender of Borrower's obligation to deliver such item. 

        3.2    Procedure for Making Advances.    For any Advance, Borrower shall provide Lender an
irrevocable Notice of Borrowing at least 7 business days prior to the desired Funding. Date and Lender shall only be required to make Advances hereunder based upon ' written requests
which comply with the terms and exhibits of this Loan Agreement (as the same may be amended from time to time), and which are submitted and signed by a Responsible Officer. Borrower shall
execute and deliver to Lender a Note and such other documents and instruments as Lender may reasonably require for each Advance made. 

4.     CREATION OF SECURITY INTEREST

        4.1    Grant of Security Interest.    Borrower grants to Lender a valid, first priority,
continuing security interest in all present and future Collateral in order to secure prompt, full, faithful and timely payment and performance of all Obligations. 

        4.2    Inspections.    Lender shall have the right upon reasonable prior notice and during
reasonable business hours to inspect Borrower's Books, including computer files, and to make copies, and to test, inspect and appraise the Collateral, in order to verify any matter relating to
Borrower or the Collateral. 

        4.3    Authorization to File Financing Statements.    Borrower irrevocably authorizes Lender
at any time and from time to time to file in any jurisdiction any financing statements and amendments that: (i) name
Collateral as collateral thereunder, regardless of whether any particular Collateral falls within the scope of the UCC; (ii) contain any other information required by the UCC for sufficiency or
filing office acceptance, including organization identification numbers; and (iii) contain such language as Lender determines helpful in protecting or preserving rights against third parties.
Borrower ratifies any such filings made prior to the date hereof. 

5.     REPRESENTATIONS AND WARRANTIES

Borrower
represents, warrants and covenants as follows: 

        5.1    Due Organization and Qualification.    Borrower is a corporation duly formed, existing
and in good standing under the laws of its state of incorporation and qualified and licensed to do business in, and is in good standing in, Delaware, California and any state in which the conduct of
its business or its ownership of property requires that it be so qualified or in which the Collateral is located except for such states (but this exception does not apply with respect to
Delaware or California) as to which any failure so to qualify would not reasonably be expected to have a material adverse effect on Borrower. 

        5.2    Authority.    Borrower has all corporate power and authority, and has taken all
actions, and has obtained all third party consents necessary to execute, deliver, and perform the Loan Documents. 

        5.3    Disclosure Schedule.    All information on the Disclosure Schedule is true, correct
and complete. 

        5.4    Authorization; Enforceability.    The execution and delivery hereof, the granting of
the security 

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interest
in the Collateral, the incurring of the Obligations, the execution and delivery of all Loan Documents and the consummation of the transactions herein and therein contemplated have been duly
authorized by all necessary action by Borrower. The Loan Documents constitute legal, valid and binding obligations of Borrower, enforceable in accordance with their terms, except as enforceability may
be limited by bankruptcy or similar laws relating to enforcement of creditors' rights generally or by general principles of equity. 

        5.5    Name and Location.    Except as set forth on the Disclosure Schedule Borrower has not
done business under any name other than that specified on the signature page hereof. The chief executive office,
principal place of business, and the place where Borrower maintains its records concerning the Collateral is set forth in Section 11. The
Collateral is presently located at the address(es) set forth in Section 11 and on the Disclosure Schedule. 

        5.6    Litigation.    All actions or proceedings pending by or against Borrower before any
court or administrative agency are set forth on the Disclosure Schedule.. 

        5.7    Financial Statements.    All financial statements fairly represent, in all material
respects, the financial condition of the Borrower as at the respective dates thereof, subject, in the case of any such unaudited financial statements, to changes resulting from audit and normal
year-end adjustments and the absence of footnotes. All statements respecting Collateral that have been or may hereafter be delivered by Borrower to Lender are true, complete and correct in
all material respects for the periods indicated. 

        5.8    Solvency.    Borrower is solvent and able to pay its debts (including trade debts) as
they come due. 

        5.9    Taxes.    Borrower has filed and will file all required tax returns, and has paid and
will pay all taxes it owes other than where the failure to comply would not reasonably be expected to have an adverse effect on Borrower or those being contested in good faith for which Borrower
maintains adequate reserves under GAAP. 

        5.10    Rights; Title to Assets.    Borrower possesses and owns all necessary assets, rights,
trademarks, trade names, copyrights, patents, patent rights, franchises and licenses which it needs to conduct of its business as now operated or proposed to be operated. Borrower has good title to
its assets, free and clear of any Liens, except for Permitted Liens. 

        5.11    Full Disclosure.    No written representation, warranty or other statement made by
Borrower in any Loan Document, certificate or statement furnished to Lender contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements
contained in such certificates or statements not misleading. 

        5.12    Regulated Substances.    Borrower complies and will comply with all laws respecting
Regulated Substances. 

        5.13    Reaffirmation.    Each Notice of Borrowing will constitute (i) a warranty and
representation in favor of Lender that there does not exist any Default and (ii) a reaffirmation as of the date thereof of all of the representations and warranties contained in this Agreement
and the Loan Documents. 

6.     AFFIRMATIVE COVENANTS

Borrower
covenants and agrees that it shall do all of the following: 

        6.1    Good Standing and Compliance.    Borrower shall maintain all governmental licenses,
rights and agreements necessary for its operations or business, the loss of which would reasonably be expected to have a material adverse effect on its financial condition, operations or business, and
without being limited by the foregoing and comply in all material respects with all statutes, laws, ordinances and government rules and regulations to which it is subject. 

        6.2    Financial Statements, Reports, Certificates.    Borrower shall deliver to Lender:
(i) as soon as 

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prepared,
and no later than 30 days after the end of each calendar month, a balance sheet, income statement and cash flow statement covering Borrower's operations during such period;
(ii) as soon as prepared, but no later than 90 days after the end of the fiscal year or such other time period as reasonably approved by Borrower's Board of Directors, audited financial
statements prepared in accordance with GAAP, together with an opinion that such financial statements fairly present Borrower's financial condition by an independent public accounting firm reasonably
acceptable to Lender; (iii) immediately upon notice thereof, a report of any legal or administrative action pending or threatened against Borrower which is likely to result in liability to
Borrower in excess of $100,000; and (iv) such other financial information as Lender may reasonably request from time to time. Financial statements delivered pursuant to subsections (i)
and (ii) above shall be accompanied by a certificate signed by a Responsible Officer (each an "Officer's Certificate") in the form of  Exhibit F. 

        6.3    Notice of Defaults.    Upon any Default or Event of Default, an Officer's Certificate
setting forth the facts relating to or giving rise thereto, and the Borrower's proposed action with respect thereto. 

        6.4    Use; Maintenance.    Borrower, at its expense, shall (i) maintain the Collateral
in good condition, reasonable wear and tear excepted, and will comply in all material respects with all laws, rules and regulations regarding use and operation of the Collateral and (ii) repair
or replace any lost or damaged Collateral. 

        6.5    Insurance.    Borrower, at its own expense, shall maintain insurance in amounts and
coverages reasonably satisfactory to Lender. Each insurance shall: (i) name Lender loss payee or additional insured, as appropriate, (ii) provide for insurer's waiver of its right of
subrogation against Lender and Borrower, (iii) provide that such insurance shall not be invalidated by any action of, or breach of warranty by, Borrower and waive set-off,
counterclaim or offset against Lender, (iv) be primary without a right of contribution of Lender's insurance, if any, or any obligation on the part of Lender to pay premiums of Borrower, and
(v) require the insurer to give Lender at least 30 days prior
written notice of cancellation. Borrower shall furnish all certificates of insurance reasonably required by Lender. 

        6.6    Loss Proceeds.    So long as no Event of Default has occurred and is continuing, any
proceeds of insurance on or condemnation of Collateral shall, at Borrower's election and so long as Lender's security interest in such proceeds remains first priority, be used either to repair or
replace such Collateral or otherwise applied to the purchase or acquisition of property useful to Borrower's business or otherwise applied to the purchase or acquisition of property useful to
Borrower's business. 

        6.7    Further Assurances.    At any time and from time to time, Borrower shall execute and
deliver such further instruments and take such further action as Lender may reasonably request to effect the intent and purposes hereof, to perfect and continue perfected and of first priority
Lender's security interests in the Collateral, and to effect and maintain ACH payment arrangements. 

7.     NEGATIVE COVENANTS

Borrower
will not do any of the following: 

        7.1    Location of Collateral.    Change its chief executive office or principal place of
business or remove, except in the ordinary course of Borrower's business, the Collateral or Borrower's Books from the premises listed in  Section 11 or on the Disclosure Schedule without giving
30 days prior written notice to Lender. 

        7.2    Extraordinary Transactions.    Enter into any transaction not in the ordinary course of
Borrower's business, including the sale, lease, license or other disposition of its assets not in the ordinary course of Borrower's business, except as specifically provided in Section 7.3.  

Notwithstanding anything contained in this Section 7.2 to the contrary, the Borrower may do any of the following:
(i) declare and make any dividend or distribution payable solely in capital stock of the Borrower, (ii) convert any of its convertible securities into other securities pursuant to the
terms of such convertible securities or otherwise in exchange therefor, (iii) repurchase equity securities with the proceeds from the issuance of equity securities, (iv) undertake any
merger, consolidation or acquisition not constituting a Liquidation Event, (v) make loans to 

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employees,
officers or directors relating to the purchase of equity securities of Borrower pursuant to employee stock purchase plans or agreements approved by Borrower's Board of Directors in the
aggregate not to exceed $100,000; (vi) make repurchases of stock from former employees or directors of Borrower under the terms of applicable repurchase agreements approved by Borrower's Board
of Directors; and (vii) make repurchases for value of equity securities in connection with or pursuant to any employees benefit plan or stock option plan of the Borrower approved by Borrower's
Board of Directors. 

        7.3    Restructure.    Except as permitted by  Section 7.2, make any material change in Borrower's financial structure or
business operations (other than as a result of a bona fide
equity financing with corporate, institutional, or venture capital investors or the initial public offering of Borrower's capital stock); cause a Liquidation Event; or suspend operation of Borrower's
business. 

        7.4    Liens.    Create, incur, assume or suffer to exist any Lien of any kind with respect to
any of its property, whether now owned or hereafter acquired, except for Permitted Liens. 

        7.5    Indebtedness.    Create, incur, assume or suffer to exist any Indebtedness, other than
Permitted Indebtedness or cause or suffer any Subsidiary to create, incur, assume or suffer to exist any Indebtedness, other than Permitted Indebtedness. 

        7.6    Distributions.    Except as permitted by  Sections 7.2 or 7.3, pay
any dividends or distributions, or redeem or purchase, any
capital stock. 

        7.7    Transactions with Affiliates.    Except as permitted by  Sections 7.2 or 7.3, directly or indirectly enter into any transaction with any affiliate
which is on terms less favorable to Borrower than would be obtained in an arm's length transaction with a non-affiliated entity; provided,
any such transaction shall not be a breach of this Section 7.7 if approved by a disinterested majority of the Borrower's Board
of Directors. 

        7.8    Compliance.    (i) Become an "investment company" under the Investment Company Act of
1940 or extend credit to purchase or carry margin stock; (ii) fail to meet the minimum funding requirements of ERISA; (iii) permit a Reportable Event or Prohibited Transaction, as
defined in ERISA, to occur; (iv) fail to comply with the Federal Fair Labor Standards Act; or (v) violate any other material law or material regulation. 

        7.9    UCC Effectiveness.    Change its name, jurisdiction of organization, or take any other
action that could render Lender's financing statements misleading under the Code, without giving Lender 30 days advance written notice. 

        7.10    Deposit and Securities Accounts.    Maintain any deposit accounts or accounts holding
securities owned by Borrower except accounts in which Lender has obtained a perfected first priority security interest. 

8.     EVENTS OF DEFAULT

Any
one or more of the following shall constitute an Event of Default by Borrower hereunder: 

        8.1    Payment.    Borrower fails to pay within 1 day of when due and payable in
accordance with the Loan Documents any portion of the Obligations, or cancels an ACH payment or transfer Lender has initiated in conformity with the terms hereof  provided, however, that an Event of Default shall not occur on account of a failure to pay due solely to
an administrative or operational error if Borrower had the funds to make the payment when due and makes the payment the business day following Borrower's knowledge of such failure to pay. 

        8.2    Certain Covenant Defaults.    Borrower fails to perform any obligation
under Section 6.5 or 6.6, or violates any of the covenants contained in Section 7.  

        8.3    Other Covenant Defaults.    Borrower fails or neglects to
perform, keep, or observe any other term, provision, condition, covenant, or agreement contained in this Agreement, in any of the other Loan Documents, or in any other present or future agreement
between Borrower and Lender and has failed to cure such 

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failure
within 30 days after its occurrence. 

        8.4    Attachment.    Any material portion of Borrower's assets is attached, seized, subjected
to a government levy, lien, writ or distress warrant, or comes into the possession of any trustee or receiver and the same is not returned, removed, waived, stayed, discharged or rescinded within
20 days. 

        8.5    Other Agreements.    There is a default in any agreement to which Borrower is a party
resulting in a right by a third party, whether or not exercised, to accelerate the maturity of any Indebtedness, in an aggregate amount exceeding $100,000, subject to any applicable
cure periods. 

        8.6    Judgments.    One or more judgments for an aggregate of at least $100,000 is rendered
against Borrower and remains unsatisfied and unstayed for more than 30 days. 

        8.7    Injunction.    Borrower is enjoined, restrained, or in any way prevented by court order
from continuing to conduct any material part of its business affairs, or if a judgment or other claim becomes a Lien upon any material portion of Borrower's assets. 

        8.8    Misrepresentation.    Any representation, statement, or report made to Lender by
Borrower was false or misleading when made in any material respect. It is recognized by Lender that the projections and forecasts provided by Borrower in good faith and based upon reasonable
assumptions are not to be viewed as facts and that actual results during the period or periods covered by such projections and forecasts may differ from the projected and forecasted results. 

        8.9    Enforceability.    Lender's ability to enforce its rights against Borrower or any
Collateral is impaired in any material respect, or Borrower asserts that any Loan Document is not a legal, valid and binding obligation of Borrower enforceable in accordance with its terms. 

        8.10    Involuntary Bankruptcy.    An involuntary bankruptcy case remains undismissed or
unstayed for 30 days or, if earlier, an order granting the relief sought is entered. 

        8.11    Voluntary Bankruptcy or Insolvency.    Borrower commences a voluntary case under
applicable bankruptcy or insolvency law, consents to the entry of an order for relief in an involuntary case under any such law, or consents or is subject to the appointment of or taking possession by
a receiver, liquidator, assignee, trustee, custodian or other similar official of Borrower or any substantial part of its property, or makes an assignment for the benefit of creditors, or fails
generally or admits in writing to its inability to pay its debts as they become due, or takes any corporate action in furtherance of any of the foregoing. 

        8.12    Merger without Assumption.    Borrower or all or substantially all of Borrower's
assets are acquired by or merged into any other business entity where more than 50% of Borrower's voting power is transferred by existing shareholders of Borrower, and such acquirer or resulting
entity either: (i) does not pay off the Obligations at the closing of the acquisition, merger or sale; or (ii) does not provide an unconditional, unlimited guaranty of the Obligations in
form and substance satisfactory to Lender and is of a credit quality unacceptable to Lender. 

9.     LENDER'S RIGHTS AND REMEDIES

        9.1    Rights and Remedies.    Upon the occurrence and continuance of any Event of Default,
Lender may, at its election, without notice of election and without demand, do any one or more of the following, all of which are authorized by Borrower: (i) accelerate and declare the Loan and
all Obligations immediately due and payable; (ii) make such payments and do such acts as Lender considers necessary or reasonable to protect its security interest in the Collateral, with such
amounts becoming Obligations bearing interest at the Default Rate; (iii) exercise any and all other rights and remedies available under the UCC or otherwise; (iv) require Borrower to
assemble the Collateral at such places as Lender may
designate; (v) enter premises where any Collateral is located, take, maintain possession of, or render unusable the Collateral or any part of it; (vi) without notice to Borrower, set off
and recoup against any portion of the Obligations; (vii) ship, reclaim, recover, store, finish, maintain, repair, 

9

 

prepare
for sale, advertise for sale, and sell the Collateral, in connection with which Borrower hereby grants Lender a license to use without charge Borrower's premises, labels, name, trademarks, and
other property necessary to complete, advertise, and sell any Collateral; and (viii) sell the Collateral at one or more public or private sales. 

        9.2    Power of Attorney in Respect of the Collateral.    Borrower hereby irrevocably appoints
Lender (which appointment is coupled with an interest) its true and lawful attorney in fact with full power of substitution, for it and in its name to, upon an Event of Default and during the
continuance thereof: (i) ask, demand, collect, receive, sue for, compound and give acquittance for any and all Collateral with full power to settle, adjust or compromise any claim,
(ii) receive payment of and endorse the name of Borrower on any items of Collateral, (iii) make all demands, consents and waivers, or take any other action with respect to, the
Collateral, (iv) file any claim or take any other action, in Lender's or Borrower's name, which Lender may reasonably deem appropriate to protect its rights in the Collateral, or
(v) otherwise act with respect to the Collateral as though Lender were its outright owner. 

        9.3    Charges.    If Borrower fails to pay any amounts required hereunder to be paid by
Borrower to any third party, Lender may with notice to Borrower at its option pay any part thereof and any amounts so paid including Lender's Expenses incurred shall become Obligations, immediately
due and payable, bearing interest at the Default Rate, and secured by the Collateral. Any such payments by Lender shall not constitute an agreement to make similar payments or a waiver of any Event
of Default. 

        9.4    Remedies Cumulative.    Lender's rights and remedies under the Loan Documents and all
other agreements with Borrower shall be cumulative. Lender shall have all other rights and remedies as provided under the UCC, by law, or in equity. No exercise by Lender of one right or remedy shall
be deemed an election, and no waiver by Lender of any Event of Default shall be deemed a continuing waiver. No delay by Lender shall constitute a waiver, election, or acquiescence. 

        9.5    Application of Collateral Proceeds.    Lender will apply proceeds of sale, to the
extent actually received in cash, in the manner and order it determines in its sole discretion, and as prescribed by applicable law. 

10.   WAIVERS; INDEMNIFICATION

        10.1    Waivers.    Without limiting the generality of the other waivers made by Borrower
herein, to the maximum extent permitted under applicable law, Borrower hereby irrevocably waives all of the following: (i) any right to assert against
Lender as a defense, counterclaim, set-off or crossclaim, any defense (legal or equitable), set-off, counterclaim, crossclaim and/or other claim
(a) which Borrower may now or at any time hereafter have against any party liable to Lender in any way or manner, or (b) arising directly or indirectly from the present or future lack of
perfection, sufficiency, validity and/or enforceability of any Loan Document, or any security interest; (ii) presentment, demand and notice of presentment, dishonor, notice of intent to
accelerate, protest, default, nonpayment, maturity, release, compromise, settlement, extension or renewal of any or all accounts, documents, instruments, chattel paper and guaranties at any time held
by Lender on which Borrower may in any way be liable and hereby ratifies and confirms whatever Lender may do in this regard; (iii) the benefit of all marshalling, valuation, appraisal and
exemption laws; (iv) the right, if any, to require Lender to (a) proceed against any person liable for any of the Obligations as a condition to or before proceeding hereunder; or
(b) foreclose upon, sell or otherwise realize upon or collect or apply any other property, real or personal, securing any of the Obligations, as a condition to, or before proceeding hereunder;
(v) any demand for possession before the commencement of any suit or action to recover possession of Collateral; and (vi) any requirement that Lender retain possession and not dispose of
Collateral until after trial or final judgment. 

        10.2    Lender's Liability for Collateral.    Subject to Lender's obligations under
Section 9207 of the UCC, Lender shall not in any way or manner be liable or responsible for: (i) the safekeeping of any Collateral; (ii) any loss or damage thereto occurring or
arising in any manner or fashion from any cause; (iii) any diminution in the value thereof; or (iv) any act or default of any carrier, warehouseman, bailee, forwarding agency, or other
person or entity whomsoever. All risk of loss, damage or destruction of the Collateral shall be borne by Borrower. Lender will have no responsibility for taking any steps to preserve rights against
any parties respecting any Collateral. Lender's powers hereunder are conferred solely to protect its interest in the Collateral and do not impose any duty to exercise any such powers. None of Lender
or any of its officers, directors, employees, agents or counsel will be 

10

 

liable
for any action lawfully taken or omitted to be taken hereunder or in connection herewith (excepting gross negligence or willful misconduct), nor under any circumstances have any liability to
Borrower for lost profits or other special, indirect, punitive, or consequential damages. Lender retains any documents delivered by Borrower only for its purposes and for such period as Lender, at its
sole discretion, may determine necessary, after which time Lender may destroy such records without notice to or consent from Borrower. 

        10.3    Indemnification.    Borrower shall, on an after tax basis, defend, indemnify, and hold
Lender and each of its officers, directors, employees, counsel, partners, agents and attorneys-in-fact (each, an "Indemnified
Person") harmless from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, charges, expenses or disbursements
(including Lender's Expenses and reasonable attorney's fees and the allocated cost of in-house counsel) of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement and any other Loan Documents, or the transactions contemplated hereby and thereby, with respect to noncompliance with laws or regulations
respecting Regulated Substances, government secrecy or technology export, or any Lien not created by Lender or right of another against any Collateral, even if the Collateral is foreclosed upon or
sold pursuant hereto, and with respect to any investigation, litigation or proceeding before any agency, court or other governmental authority relating to this Agreement or the Advances or the use of
the proceeds thereof, whether or not any Indemnified Person is a party thereto (all the foregoing, collectively, the "Indemnified Liabilities");  provided, that Borrower shall have no obligation hereunder to any Indemnified Person with respect to Indemnified Liabilities arising from the gross
negligence or willful misconduct of such Indemnified Person. The obligations in this Section shall survive the Term. At the election of any Indemnified Person, Borrower shall defend such Indemnified
Person using legal counsel reasonably satisfactory to such Indemnified Person and Borrower, at the sole reasonable cost and expense of Borrower. All amounts owing under this Section shall be paid
within 30 days after written demand. 

11.   NOTICES

All
notices shall be in writing and personally delivered or sent by certified mail, postage prepaid, return receipt requested, or by confirmed facsimile, at the respective addresses set
forth below: 

	If to Borrower:

NovaCardia, Inc.

12651 High Bluff Drive, Suite 200

San Diego, California 92130

Attention: President and CEO

FAX: (858) 509-0456	 	If to Lender:

Lighthouse Capital Partners V, LP

500 Drake's Landing Road

Greenbrae, California 94904

Attention: Contract Administrator

FAX: (415) 925-3387

12.   GENERAL PROVISIONS

        12.1    Successors and Assigns.    This Agreement shall bind and inure to the benefit of the
parties' respective successors and permitted assigns. Borrower may not assign any rights hereunder without Lender's prior written consent, which consent shall not be unreasonably withheld. Lender
shall have the right without the consent of or notice to Borrower to sell, transfer, negotiate, or grant participations in all or any part of any Loan Document except to a competitor of Borrower as
determined in good faith by Borrower's Board of Directors. 

        12.2    Time of Essence.    Time is of the essence for the performance of all Obligations. 

        12.3    Severability of Provisions.    Each provision hereof shall be severable from every
other provision in determining its legal enforceability. 

        12.4    Entire Agreement.    This Agreement and each of the other Loan Documents dated as of
the date hereof, taken together, constitute and contain the entire agreement between Borrower and Lender with respect to their subject matter and supersede any and all prior agreements, negotiations,
correspondence, understandings and communications between the parties, whether written or oral. This Agreement is the result of negotiations between and has been reviewed by the Borrower and Lender as
of the date hereof and their respective counsel; accordingly, this Agreement shall be deemed to be the product of the parties hereto, and no ambiguity
shall be construed in favor 

11

 

of
or against Borrower or Lender. This Agreement may only be modified with the written consent of Lender and Borrower. Any waiver or consent with respect to any provision of the Loan Documents shall
be effective only in the specific instance and for the specific purpose for which it was given. No notice to or demand on Borrower in any one case shall entitle Borrower to any other or further notice
or demand in similar or other circumstances. 

        12.5    Reliance by Lender.    All covenants, agreements, representations and warranties made
herein by Borrower shall, notwithstanding any investigation by Lender, be deemed to be material to and to have been relied upon by Lender. 

        12.6    No Set-Offs by Borrower.    All sums payable by Borrower pursuant to this
Agreement or any of the other Loan Documents shall be payable without notice or demand and shall be payable in United States Dollars without set-off or reduction of any manner
whatsoever. 

        12.7    Counterparts.    This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, and all of which, when taken together, shall constitute one and the same original instrument. 

        12.8    Survival.    All covenants, representations and warranties made in this Agreement
shall continue in full force and effect so long as any Obligations remain outstanding. 

        12.9    No Original Issue Discount.    Borrower and Lender acknowledge and agree that the
Warrant is part of an investment unit within the meaning of Section 1273(c)(2) of the Internal Revenue Code, which includes the Loan. Borrower and Lender further agree as between them, that the
fair market value of
the Warrant is $100 and that, pursuant to Treas. Reg. § 1.1273-2(h), $100 of the issue price of the investment unit will be allocable to the Warrant and the balance
shall be allocable to the Loans. Borrower and Lender agree to prepare their federal income tax returns in a manner consistent with the foregoing and, pursuant to Treas. Reg.
§ 1.1273, the original issue discount on the Loan shall be considered to be zero. 

        12.10    Relationship of Parties.    The relationship between Borrower and Lender is, and at
all times shall remain, solely that of a borrower and lender. Lender is not a partner or joint venturer of Borrower; nor shall Lender under any circumstances be deemed to be in a relationship of
confidence or trust or have a fiduciary relationship with Borrower or any of its affiliates, or to owe any fiduciary duty to Borrower or any of its affiliates. Lender does not undertake or assume any
responsibility or duty to Borrower or any of its affiliates to select, review, inspect, supervise, pass judgment upon or otherwise inform any of them of any matter in connection with its or their
property, the Loans, any Collateral or the operations of Borrower or any of its affiliates. Borrower and each of its affiliates shall rely entirely on their own judgment with respect to such matters,
and any review, inspection, supervision, exercise of judgment or supply of information undertaken or assumed by Lender in connection with such matters is solely for the protection of Lender and
neither Borrower nor any affiliate is entitled to rely thereon. 

        12.11    Choice of Law and Venue; Jury Trial Waiver.    THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF BORROWER AND LENDER HEREBY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN THE CITY AND COUNTY OF SAN FRANCISCO, STATE OF CALIFORNIA. BORROWER AND LENDER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND
ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH PARTY FURTHER WAIVES ANY RIGHT TO CONSOLIDATE ANY ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR
HAS NOT BEEN WAIVED.

        12.12    Confidentiality.    In handling any confidential information
of Borrower, Lender will exercise the same degree of care that it exercises with respect to its own proprietary information. 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. 

12

 

	NOVACARDIA, INC.	 	LIGHTHOUSE CAPITAL PARTNERS V, L.P.
	 	 	 	By:	LIGHTHOUSE MANAGEMENT PARTNERS V, L.L.C.,
 its general partner
	

By:	

/s/ Randall E. Woods
	
 	

By:	

/s/ Thomas Conneely

	

Name:	

Randall E. Woods
	
 	

Name:	

Thomas Conneely

	

Title:	

CEO
	
 	

Title:	

Vice President

	Exhibit A	 	Collateral Description
	Exhibit B	 	Form of Note
	Exhibit C	 	Form of Preferred Stock Warrant
	Exhibit D	 	Form of Notice of Borrowing
	Exhibit E	 	Form of Incumbency Certificate
	Exhibit F	 	Form of Officers Certificate
	Exhibit G	 	ACH Authorization
	Exhibit H	 	Form of Negative Pledge Agreement
	Exhibit I	 	Control Agreement
	
 Schedule 1	
 	

Disclosure Schedule

13

  

  
 

  EXHIBIT A
  
  COLLATERAL    
    

This
FINANCING STATEMENT and SECURITY AGREEMENT covers all of Debtor's interests in all of the following types or items of property, wherever located and whether now owned or hereafter acquired, and
Debtor hereby grants Secured Party a security interest therein as collateral for the payment and performance of all present and future indebtedness, liabilities, guarantees and obligations of Debtor
to Secured Party, howsoever arising. Debtor agrees that said security interest may be enforced by Secured Party in accordance with the terms of all security and other agreements between Secured Party
and Debtor, the California Uniform Commercial Code, or both, and that this document shall be fully effective as a security agreement, even if there is no other security or other agreement between
Secured Party or Debtor: 

All
assets of the Debtor, all personal property of Debtor; 

All
"accounts", "general intangibles", "chattel paper", "contract rights", "documents", "instruments", "deposit accounts", "inventory", "farm products", "fixtures" and "equipment", as such terms are
defined in Division 9 of the California Uniform Commercial Code in effect on the date hereof; 

All
general intangibles of every kind, including without limitation, federal, state and local tax refunds and claims of all kinds; all rights as a licensee or any kind; all customer lists, telephone
numbers, and purchase orders, and all rights to purchase, lease sell, or otherwise acquire or deal with real or personal property and all rights relating thereto; 

All
returned and repossessed goods and all rights as a seller of goods; all collateral securing any of the foregoing; all deposit accounts, special and general, whether on deposit with Secured Party
or others; 

All
life and other insurance policies, claims in contract, tort or otherwise, and all judgments now or hereafter arising therefrom; 

All
right, title and interest of Debtor, and all of Debtor's rights, remedies, security and liens, in, to and in respect of all accounts and other collateral, including, without limitation, rights of
stoppage in transit, replevin, repossession and reclamation and other rights and remedies of an unpaid vendor, lienor or secured party, and all guarantees and other contracts of suretyship with
respect to any accounts and other collateral, and all deposits and other security for any accounts and other collateral, and all credit and other insurance; 

All
notes, drafts, letters of credit, contract rights, and things in action; all drawings, specifications, blueprints and catalogs; and all raw materials, work in process, materials used or consumed
in Debtor's business, goods, finished goods, returned goods and all other goods and inventory of whatsoever kind or nature, any and all wrapping, packaging, advertising and shipping materials, and all
documents relating thereto, and all labels and other devices, names and marks affixed or to be affixed thereto for purposes of selling or identifying the same or the seller or manufacturer thereof; 

All
inventory wherever located; all present and future claims against any supplier of any of the foregoing, including claims for defective goods or overpayments to or undershipments by suppliers; all
proceeds arising from the lease or rental of any of the foregoing; INVENTORY RETURNED BY DEBTOR TO IT'S SUPPLIERS SHALL REMAIN SUBJECT TO SECURED PARTY'S SECURITY INTEREST; 

All
equipment and fixtures, including without limitation all machinery, machine tools, motors, controls, parts, vehicles, workstations, tools, dies, jigs, furniture, furnishings and fixtures; and all
attachments, accessories, accessions and property now or hereafter affixed to or used in connection with any of the foregoing, and all substitutions and replacements for any of the foregoing; all
warranty and other claims against any vendor or lessor of any of the foregoing; 

All
investment property; 

1

 

All
books, records, ledger cards, computer data and programs and other property and general intangibles at any time evidencing or relating to any or all of the foregoing; and 

All
cash and non-cash products and proceeds of any of the foregoing, in whatever form, including proceeds in the form of inventory, equipment or any other form of personal property,
including proceeds of proceeds and proceeds of insurance, and all claims by Debtor against third parties for loss or damage to, or destruction of, or otherwise relating to, any or all of
the foregoing. 

NOTICE—PURSUANT
TO AN AGREEMENT BETWEEN DEBTOR AND SECURED PARTY, DEBTOR HAS AGREED NOT TO FURTHER ENCUMBER THE COLLATERAL DESCRIBED HEREIN EXCEPT FOR PERMITTED LIENS, THE FURTHER
ENCUMBERING OF WHICH MAY CONSTITUTE THE TORTIOUS INTERFERENCE WITH SECURED PARTY'S RIGHTS BY SUCH ENCUMBRANCER. IN THE EVENT THAT ANY
ENTITY IS GRANTED A SECURITY INTEREST IN DEBTOR'S ACCOUNTS, CHATTEL PAPER, GENERAL INTANGIBLES OR OTHER ASSETS CONTRARY TO THE ABOVE, THE SECURED PARTY ASSERTS A CLAIM TO ANY PROCEEDS THEREOF RECEIVED
BY SUCH ENTITY. 

Notwithstanding
any of the foregoing, the collateral shall not under any circumstance include, and no security interest is granted in any of the following; (i) Intellectual Property,  provided, however, that the
collateral shall include accounts and general intangibles and the resulting proceeds. Of such accounts and general
intangibles ("Rights to Payment"). Notwithstanding the foregoing, if a judicial authority (including a U.S. Bankruptcy Court) holds that a security interest in the underlying Intellectual
Property is necessary to have a security interest in the Rights to Payment, then the collateral shall automatically, and effective as of the date of the Loan and Security Agreement dated as of
March 21, 2005 (the "Loan and Security Agreement") by and between Lighthouse Capital Partners V, LP. ("Lender") and NovaCardia, Inc., a Delaware corporation ("Debtor")
include the Intellectual Property only to the extent necessary to permit perfection of Lender's security interest in the Rights to Payment; or (ii) the granting of a security interest therein
is contrary to applicable law; provided that upon cessation of any such restriction or prohibition, such property shall automatically become part of the collateral. 

	"DEBTOR"	 	"SECURED PARTY"
	
NOVACARDIA, INC., a Delaware corporation	
 	
LIGHTHOUSE CAPITAL PARTNERS V, L.P.

LIGHTHOUSE MANAGEMENT PARTNERS V, L.L.C., its general partner
	

By:	

    
	
 	

By:	

    

	

Name:	

    
	
 	

Name:	

    

	

Title:	

    
	
 	

Title:	

    

2

  

  
 

  EXHIBIT B    
    

[                             ]

 
 

SECURED PROMISSORY NOTE

This  SECURED PROMISSORY NOTE (this "Note") is made
                        ,
200    , by NOVACARDIA, INC. ("Borrower") in favor of  LIGHTHOUSE CAPITAL PARTNERS V,
 L.P. (collectively with its assigns, "Lender"). Initially
capitalized terms used and not otherwise defined herein are defined in that certain Loan and Security Agreement No. 4611 between Borrower and Lender dated March 21, 2005
(the "Loan Agreement"). 

FOR VALUE RECEIVED, Borrower promises to pay in lawful money of the United States, to the order of Lender, at 500 Drake's Landing Road,
Greenbrae, California 94904, or such other place as Lender may from time to time designate ("Lender's Office"), the principal sum of
$                         (the "Advance"), including interest on the unpaid balance and all other amounts due or to
become due hereunder according to the terms hereof and of
the Loan Agreement. 

"Basic Rate" means a variable per annum rate of interest equal to the Index plus the Interest Margin
which shall be subject to upward or downward adjustment effective as of the day the Index is changed. On and after the Loan Commencement Date the Basic Rate shall be fixed and not subject to any
further adjustments. Notwithstanding the foregoing, in no event shall the Basic Rate be less than 7%. 

"Final Payment" means 4% of the Advance. 

"Index" means the prevailing variable Prime Rate of annual interest as quoted from time to time in the western edition of the Wall
Street Journal. 

"Interest Margin" means (i) prior to the Loan Commencement Date, 4% per annum; or (ii) at the Loan Commencement Date, 1.75%
per annum. 

"Loan Commencement Date" means September 1, 2005. 

"Maturity Date" means the last day of the Repayment Period, or if earlier, the date of prepayment under the Note. 

"Payment Date" means the first day of each calendar month. 

"Repayment Period" means the period beginning on the Loan Commencement Date and continuing for 36 calendar months. 

1.    Repayment.    Borrower shall pay principal and interest due hereunder from the Funding Date, until this Note is paid in full,
on each Payment Date pursuant to the terms of the Loan Agreement and this Note. Prior to the Loan Commencement Date, Borrower shall pay to Lender, monthly in advance on each Payment Date, interest
calculated using the Basic Rate prevailing on the first business day of such calendar month. Beginning on the Loan Commencement Date and on each Payment Date thereafter during the Repayment Period,
Borrower shall make equal installments of principal and interest in advance, calculated at the Basic Rate. On the Maturity Date, Borrower shall pay, in addition to all unpaid principal and interest
outstanding hereunder, the Final Payment. 

2.    Interest.    Interest not paid when due will, to the maximum extent permitted under applicable law, become part of principal,
at Lender's option, and thereafter bear like interest as principal. Interest shall be computed on the basis of a 360 day year. All Obligations not paid when due shall bear interest at the
Default Rate unless waived in writing by Lender. All amounts paid hereunder will be applied to the Obligations in Lender's discretion and as provided in the Loan Agreement. 

3.    Voluntary Prepayment.    Borrower may prepay the Note if and only if Borrower pays to Lender (i) the outstanding
principal amount of this Note and any unpaid accrued interest; (ii) the Final Payment; and (iv) all other sums, if any, that shall have become due and payable hereunder with respect to
this Note. 

1

 

4.    Collateral.    This Note is secured by the Collateral. 

5.    Waivers.    Borrower, and all guarantors and endorsers of this Note, regardless of the time, order or place of signing, hereby
waive notice, demand, presentment, protest, and notices of every kind, presentment for the purpose of accelerating maturity, diligence in collection, and, to the fullest extent permitted by law, all
rights to plead any statute of limitations as a defense to any action on this Note. 

6.    Choice of Law; Venue.    THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF BORROWER AND LENDER HEREBY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN
THE CITY AND COUNTY OF SAN FRANCISCO, STATE OF CALIFORNIA. BORROWER AND LENDER EACH HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF
THIS NOTE. EACH PARTY FURTHER WAIVES ANY RIGHT TO CONSOLIDATE ANY ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT
BEEN WAIVED.

7.    Miscellaneous.    THIS NOTE MAY BE MODIFIED ONLY BY A WRITING SIGNED BY BORROWER AND
LENDER. Each provision hereof is severable from every other provision hereof and of the Loan Agreement when determining its legal enforceability. Sections and subsections are
titled for convenience, and not for construction. "Hereof," "herein," "hereunder," and similar words refer to this Note in its entirety. "Or" is not necessarily exclusive. "Including" is not limiting.
The terms and conditions hereof inure to the benefit of and are binding upon the parties' respective permitted successors and assigns. This Note is subject to all the terms and conditions of the
Loan Agreement. 

IN
WITNESS WHEREOF, Borrower has caused this Note to be executed by a duly authorized officer as of the day and year first above written. 

	 	 	NOVACARDIA, INC.
	

 	
 	

By:	

    

	

 	
 	

Name:	

    

	

 	
 	

Title:	

    

2

  

 
 

EXHIBIT C
  
    WARRANTS

1

  

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. 

PREFERRED STOCK PURCHASE WARRANT 

	Warrant No.	 	    
	 	Number of Shares: initially, 238,095

Shares Series A Preferred Stock

Subject to increase as set forth below

 
 

NOVACARDIA, INC.

Effective as of March 21, 2005

Void after March 21, 2012 

1.    Issuance.    This Preferred Stock Purchase Warrant (the "Warrant") is
issued to LIGHTHOUSE CAPITAL PARTNERS V, L.P. by NOVACARDIA, INC., a Delaware corporation
(hereinafter with its successors called the "Company"). 

2.    Purchase Price; Number of Shares.

        (a)   The
registered holder of this Warrant (the "Holder"), commencing on the date hereof, is entitled upon surrender of
this Warrant with the subscription form annexed hereto duly executed, at the principal office of the Company, to purchase from the Company, at a price per share of $0.84
(the "Purchase Price"), 238,095 fully paid and nonassessable shares (the "Exercise
Quantity") of the Company's Series A Preferred Stock (the "Shares"), $0.001 par value
(the "Preferred Stock"). 

        (b)   On
the Commitment Termination Date, the Exercise Quantity shall automatically be increased by (i) such additional number of shares as is equal to 2% of the.
Aggregate Advances under the Loan Agreement, if any, divided by (B) the Purchase Price. For purposes of clarification, the maximum number of Shares that the Exercise Quantity may be increased
by is 84,000. 

In
addition to other terms which may be defined herein, the following terms, as used in this Warrant, shall have the following meanings: 

        (i)    "Aggregate
Advances" means the aggregate original dollar amount of all Advances made under the Loan Agreement, whether such Advances are outstanding or prepaid, at the
time of any scheduled adjustment to the Exercise Quantity. 

        (ii)   "Loan
Agreement" means that certain Loan and Security Agreement No. 4611 dated March 21, 2005 between the Company and Lighthouse Capital Partners
V, L.P. 

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

1

 

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 Preferred 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 Preferred 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 Preferred Stock as is computed using the
following formula: 

	 	 	X=Y(A-B)
 A
	

where:    X =	
 	

the number of shares of Preferred Stock to be issued to the Holder pursuant to this Section 4.
	

Y =	
 	

the number of shares of Preferred 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 Preferred Stock, as determined at the time the net issue election is made pursuant to this Section 4.
	

B =	
 	

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

        "Fair Market Value" of a share of Preferred Stock (or fully paid and nonassessable shares of the Company's common stock, $0.001 par
value (the "Common Stock") if the Preferred Stock has been automatically converted into Common Stock) as of the date that the net issue election
is made (the "Determination Date") shall mean: 

        (i)    If
the net issue election is made in connection with and contingent upon the closing of the sale of the Company's Common Stock to the public in a public offering
pursuant to a Registration Statement under the 1933 Act (a "Public Offering"), and if the Company's Registration Statement relating to such
Public Offering ("Registration Statement") has been declared effective by the Securities and Exchange Commission, then the initial "Price to Public"
specified in the final prospectus with respect to such offering multiplied by the number of shares of Common Stock into which each share of Preferred Stock is then convertible. 

        (ii)   If
the net issue election is not made in connection with and contingent upon a Public Offering, then as follows: 

        (a)   If
traded on a securities exchange or the Nasdaq National 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 over the five day period ending five trading days prior to the Determination Date, and the fair market value of the Preferred Stock
shall be deemed to be such fair market value of the Common Stock multiplied by the number of shares of Common Stock into which each share of Preferred Stock is then convertible; 

2

 

        (b)   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 over the five day period ending five trading days prior to the Determination Date, and the fair market value of the Preferred Stock shall be deemed to be such fair market
value of the Common Stock multiplied by the number of shares of Common Stock into which each share of Preferred Stock is then convertible; and 

        (c)   If
there is no public market for the Common Stock, then fair market value shall be determined in good faith by the Company's Board of Directors. 

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

6.    Fractional Shares.    In no event shall any fractional share of Preferred 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 Preferred Stock, then the Company shall,in lieu of such fractional share, make a cash payment for such fractional share uon the basis of the Purchase Price then in effect. 

7.    Expiration Date; Automatic Exercise.    This Warrant shall expire at the close of business on March 21, 2012, and shall
be void thereafter (the "Expiration Date"). 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 the preceding sentence, provided, however, that the Company shall have no obligation to issue any shares of Preferred Stock hereunder until the Holder has
surrendered this Warrant to the Company as provided herein. 

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 Preferred Stock and
Common Stock free from all preemptive or similar rights therein, as will be sufficient to permit, respectively, the exercise of this Warrant in full and the conversion into shares of Common Stock of
all shares of Preferred Stock receivable upon such exercise. The Company further covenants that such shares as may be issued pursuant to such exercise and/or conversion 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 Preferred Stock, by
split-up or otherwise, or combine the Preferred Stock, or issue additional shares of Preferred Stock in payment of a stock dividend on the Preferred Stock, the number of shares of
Preferred Stock issuable on the exercise of this Warrant shall forthwith be proportionately increased in the case of a subdivision or stock dividend, or proportionately decreased in the case of a
combination, and the Purchase Price shall forthwith be proportionately decreased in the case of a subdivision or stock dividend, or proportionately increased in the case of a combination. 

10.    Adjustments for Diluting Issuances.    The other antidilution rights applicable to the Preferred Stock and the Common Stock
of the Company are set forth in the Company's Certificate of Incorporation, as amended from time to time (the "Certificate"), a true and complete
copy in its current form which is attached hereto as Exhibit A. Such rights shall not be restated, amended or modified in any manner which
affects the Holder differently from the other holders of the same series of Preferred Stock into which this Warrant is exercisable without such Holder's prior written consent. The Company shall
promptly provide the Holder hereof with any restatement, amendment or modification to the Certificate promptly after the same has been made. For clarification, the "pay to play" provisions of the
Certificate apply only to the holders of Preferred Stock and not holders of warrants to acquire Preferred Stock. In no event shall the Preferred Stock be construed to mean Company's
Series A-1 Preferred Stock upon or prior to the exercise hereof. After exercise, the holder of the Preferred Stock shall have the same rights as other holders of the Preferred Stock
as set forth in the Certificate. 

11.    Mergers and Reclassifications.    If after the date hereof the Company shall enter into any Reorganization
(as hereinafter defined), then, as a condition of such Reorganization, lawful provisions shall be made, and duly executed documents evidencing the same from the Company or its successor shall
be delivered to the Holder, so that the Holder shall thereafter have the right to purchase, at a total price not to exceed that payable upon the exercise of 

3

 

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 Preferred 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 Preferred 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 Preferred
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; 

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 twenty (20) 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 Preferred 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 Preferred Stock upon the exercise of this Warrant in accordance with the
terms hereof will not, (i) violate or contravene the Certificate or bylaws, or any law, statute, regulation, rule, judgment or
order applicable to the Company, (ii) violate, contravene or result in a breach or default under any contract, agreement or instrument to which the Company is a party or by which the Company or
any of its assets are bound or (iii) require the consent or approval of or the filing of any notice or registration with any person or entity. 

        (d)   As
long as this Warrant is, or any shares of Preferred Stock issued upon exercise of this 

4

 

Warrant
or any shares of Common Stock issued upon conversion of such shares of Preferred Stock are, issued and outstanding, the Company will provide to the Holder the financial and other information
described in that certain Loan Agreement. 

        (e)   As
of the date hereof, the authorized capital stock of the Company consists of (i) 63,150,954 shares of Common Stock, of which 2,070,000 shares are issued
and outstanding and 322,095 shares are reserved for issuance upon the exercise of this Warrant with respect to Common Stock and the conversion of the Preferred Stock into Common Stock if this
Warrant is exercised with respect to Preferred Stock, (ii) 26,512,572 shares of Series A Preferred Stock, of which 26,190,477 are issued and outstanding shares; and
(iii) 26,190,477 shares of Series A-1 Preferred Stock, of which none are issued and outstanding shares. Attached hereto as  Exhibit B is a capitalization table summarizing the
capitalization of the Company. Once per calendar quarter, the Company will provide Holder
with a current capitalization table indicating changes, if any, to the number of outstanding shares of common stock and preferred stock. 

15.    Registration Rights.    The Company grants to the Holder all the rights of a "Holder" under the Company's Investors' Rights
Agreement dated as of August 18, 2003 (the "Rights Agreement"), including, without limitation, the registration rights contained therein,
and agrees to amend the Rights Agreement so that (i) the shares of Common Stock issuable upon conversion of the Shares of Preferred Stock issuable upon exercise of this Warrant shall be
"Registrable Securities," and (ii) the Holder shall be a "Holder" for all purposes of such Rights Agreement. 

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

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 the Preferred Stock issuable upon exercise of the Holder's rights
contained herein will be acquired for investment and not with a view to the sale or distribution of any part thereof, and the Holder has no present intention of selling or engaging in any public
distribution of the same except pursuant to a registration or exemption. 

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

        (c)   Private Issue.    The Holder understands (i) that the Preferred 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.    The Holder has such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of its investment and has the ability to bear the economic risks of its investment. The Holder further acknowledges that it has had access to all information
concerning the Company which it has requested. 

18.    Notices, Transfers, Etc.

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

        (b)   Subject
to compliance with applicable federal and state securities laws, this Warrant may be transferred by the Holder with respect to any or all of the shares
purchasable hereunder. Upon surrender of this Warrant to the Company, together with the assignment notice annexed hereto duly executed, for transfer of this 

5

 

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 Preferred Stock purchasable hereunder, the Company shall issue a new warrant to the assignee, in such
denomination as shall be requested by the Holder hereof, and shall issue to such Holder a new warrant covering the number of shares in respect of which this Warrant shall not have been transferred. 

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

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

20.    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. 

21.    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. 

22.    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. 

23.    Rights as Shareholders.    No holder of this Warrant, as such, shall be entitled to vote or receive dividends or be deemed
the holder of Preferred Stock or otherwise be entitled to any voting or other rights as a shareholder (other than rights granted under the terms of this Warrant and as a "Holder" under the Rights
Agreement, as "Holder" is defined in the Rights Agreement) of the Company, until this Warrant shall have been exercised and the shares purchasable upon the exercise shall have become deliverable, as
provided herein. 

24.    Compliance with Securities Act.    The Holder of this Warrant, by acceptance hereof, agrees that this Warrant, and the
Preferred Stock to be issued upon exercise hereof, are being acquired for investment purposes only and that such Holder will not offer, sell or otherwise dispose of this Warrant or any Preferred Stock
to be issued upon exercise hereof except under circumstances which will not result in a violation of the Act. This Warrant and all Preferred Stock issued upon exercise of this Warrant (unless
registered under the Act) shall be stamped or imprinted with a legend in substantially the following form: 

        THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). NO SALE OR DISPOSITION MAY BE EFFECTED WITHOUT (i) AN EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO OR (ii) AN OPINION OF COUNSEL FOR THE HOLDER, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED, EXCEPT THAT NO SUCH OPINION
SHALL BE REQUIRED IF SUCH SALE IS PURSUANT TO RULE 144 PROMULGATED UNDER THE ACT. 

25.    Qualifying Public Offering.    If the Company shall effect a firm commitment underwritten public offering of shares of Common
Stock which results in the conversion of the Preferred Stock into Common Stock pursuant to the Certificate in effect immediately prior to such offering, then, effective upon such conversion, this
Warrant shall change from the right to purchase shares of Preferred Stock to the right to purchase shares of Common Stock, and the Holder shall thereupon have the right to purchase, at a total price
equal to that payable upon the exercise of this Warrant in full, the number of shares of Common Stock which would have been receivable by the Holder upon the 

6

 

exercise
of this Warrant for shares of Preferred Stock immediately prior to such conversion of such shares of Preferred Stock into shares of Common Stock, and in such event 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, the provisions for the adjustment of the Purchase Price and of
the number of shares purchasable upon exercise of this Warrant and the provisions relating to the net issue election) shall thereafter be applicable to any shares of Common Stock deliverable upon the
exercise hereof. 

26.    Value.    The Company and the Holder agree that the value of this Warrant on the date of grant is $100. 

	

 	
 	
NOVACARDIA, INC.
	

 	

 	

By:	

    

	

 	

 	

Name:	

    

	

 	

 	

Title:	

    

7

   Subscription  

	
 To:	
 	

	
 	

 

	
 Date:	
 	

	
 	

 

        The
undersigned hereby subscribes for
                                         
                    shares of Preferred 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	
 	

 

1

   Net Issue Election Notice  

	
 To:	
 	

	
 	

Date:	
 	

        The
undersigned hereby elects under Section 4 to surrender the right to purchase shares of Preferred 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	
 	

 

1

   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:	
 	

 
	

	
 	

 

1

  

 
 

EXHIBIT A    
    
    Amended and Restated Certificate of Incorporation    
    

See attached pages.

1

  

 
 

EXHIBIT B
  
    Capitalization Table    
    

1

  

 
 

EXHIBIT D
  
    NOTICE OF BORROWING

                        ,
           

Lighthouse
Capital Partners V,

L.P. 500 Drake's Landing Road

Greenbrae, CA 94904-3011 

Ladies
and Gentlemen: 

        Reference
is made to the Loan and Security Agreement No. 4611 dated as of March 21, 2005 (as it has been and may be amended from time to time, the
"Loan Agreement," initially capitalized terms used herein as defined therein), between LIGHTHOUSE CAPITAL PARTNERS
V, L.P. and NOVACARDIA, INC. (the "Company") 

        The
undersigned is the President and CEO of the Company, and hereby irrevocably requests an Advance under the Loan Agreement, and in that connection certifies as follows: 

        1.     The
amount of the proposed Advance is $                        . The business day of the proposed Advance is
                                    . 

        2.     The
Loan Commencement Date for this Advance shall be September 1, 2005. 

        3.     As
of this date, no Event of Default, or event which with notice or the passage of time would constitute an Event of Default, has occurred and is continuing, or will
result from the making of the proposed Advance, and the representations and warranties of the Company contained in Section 5 of the Loan
Agreement are true and correct in all material respects. 

        4.     No
event that could reasonably be expected to have a material adverse effect on the ability of Borrower to fulfill its obligations under the Loan Agreement has occurred
since the date of the most recent financial statements, submitted to you by the Company. 

        The
Company agrees to notify you promptly before the funding of the Advance if any of the matters to which I have certified above shall not be true and correct on the
Funding Date. 

	 	 	Very truly yours,
	
 	
 	
NOVACARDIA, INC.
	

 	
 	

By:	

	

 	
 	

Name:	

	

 	
 	

Title:	

1

  

 
 

EXHIBIT E
  
    INCUMBENCY CERTIFICATE

        The
undersigned, Eckard Weber, M.D., hereby certifies that 

1.    He/She is the duly elected and acting Chairman of the Board of NOVACARDIA, INC., a
Delaware corporation (the "Company"). 

2.    That on the date hereof, each person listed below holds the office in the Company indicated opposite his or her name and that the
signature appearing thereon is the genuine signature of each such person: 

	NAME
 
	 	OFFICE
 
	 	SIGNATURE
 

	Randall E. Woods	 	President and CEO	 	    

3.    Attached hereto as Exhibit A is a true and correct copy of the Certificate of
Incorporation of the Company, as amended, as in effect as of the date hereof. 

4.    Attached hereto as Exhibit B is a true and correct copy of the Bylaws of the
Company, as amended, as in effect as of the date hereof. 

5.    Attached hereto as Exhibit C is a copy of the resolutions of the Board of
Directors of the Company authorizing and approving the Company's execution, delivery and performance of a loan facility with Lighthouse Capital Partners V, L.P. 

        IN
WITNESS WHEREOF, the undersigned has executed this Incumbency Certificate on March 21, 2005. 

	 	 	NOVACARDIA, INC.
	

 	
 	

By:	

    

	

 	
 	

Name:	

Eckard Weber, M.D.

	

 	
 	

Title:	

Chairman of the Board

        I,
the President and CEO of the Company, do hereby certify that Eckard Weber, M.D. is the duly qualified, elected and acting Chairman of the Board of the Company and that the above
signature is his or her genuine signature. 

        IN
WITNESS WHEREOF, the undersigned has executed and delivered this Officer's Certificate on March 21, 2005. 

	 	 	NOVACARDIA, INC.
	

 	
 	

By:	

    

	

 	
 	

Name:	

Randall E. Woods

	

 	
 	

Title:	

President and CEO

1

  

 
 

EXHIBIT F
  
    OFFICER'S CERTIFICATE

        The undersigned, to induce LIGHTHOUSE CAPITAL PARTNERS V, L.P.
("Lender"), to extend or continue financial accommodations to NOVACARDIA, INC., a Delaware corporation
(the "Borrower") pursuant to the terms of that certain Loan and Security Agreement dated March 21, 2005
(the "Loan Agreement"), hereby certifies that on the date hereof: 

	1.
	I
am the duly elected and acting                          of Borrower.

	2.
	I
am a Responsible Officer as that term is defined in the Loan Agreement.

	3.
	The
information submitted herewith is in fact what it purports to be.

	4.
	The
information delivered herewith is true, correct and complete.

	5.
	Borrower
is currently able to meet its obligations as they come due.

	6.
	I
understand that Lender is relying upon the truthfulness, accuracy and completeness hereof in connection with the Loan Agreement.

	7.
	I
will advise you if it comes to my attention that, as of the date hereof, the information submitted herewith was not in fact true, correct and complete. 

        IN
WITNESS WHEREOF, the undersigned has executed this Officer's Certificate on                         . 

	 	 	NOVACARDIA, INC.
	

 	
 	

By:	

    

	

 	
 	

Name:	

    

	

 	
 	

Title:	

    

1

  

  
 

  EXHIBIT G
  
  AUTHORIZATION FOR AUTOMATIC PAYMENT

The
undersigned NOVACARDIA, INC. ("Borrower") authorizes LIGHTHOUSE CAPITAL
PARTNERS V, L.P. and any and all affiliated funds (collectively, "Lender") and the bank / financial institution
("Bank") named below to initiate variable debit and/or credit entries to Borrower's deposit, checking or savings accounts as designated below and to
cause funds transfers to an account of Lender as payment of any and all amounts due under the Loan and Security Agreement between Borrower and Lender dated March 21, 2005
(the "Loan Agreement"). 

1.    Lender is hereby authorized to initiate variable debit and/or credit transactions and resulting funds transfers in Borrower's designated
accounts with respect to amounts calculated by Lender to be due and owing to Lender by Borrower periodically under the Loan Agreement. Borrower consents to all such debit and/or credit transactions
and resulting funds transfers and hereby authorizes Lender to take all such actions as may be required by Bank with respect to such transactions. Borrower acknowledges and agrees that such credit
and/or debit entries may be made in amounts due under the Loan Agreement in order to cause timely payments as required by the terms of the Loan Agreement. 

2.    Borrower hereby authorizes Lender to release to Bank all information concerning Borrower that may be necessary or desirable for Bank to
investigate or recover any erroneous funds transfers that may occur. 

3.    Borrower acknowledges and agrees that all such debit and/or credit transactions and funds transfers are intended to be made through an
Automated Clearing House system and in compliance with the NACHA Rules and in compliance with Bank's security procedures. 

4.    Borrower represents and warrants that the account information set forth below is accurate and complete and that each of the account(s)
set forth below is a business account maintained in Borrower's name and for Borrower's account. 

This
Consent shall be effective as of March 21, 2005 and shall remain in effect until the Loan Agreement has been terminated. Any cancellation by Borrower of this consent shall (i) be
made in writing and (ii) delivered to Bank and Lender in such time as to afford Bank and Lender a reasonable opportunity to act on said cancellation. 

	 	 	                Silicon Valley Bank
 (Name of Borrower's Bank)

	 	 	3003 Tasman Drive	 	Santa Clara	 	CA	 	95054	 	 
	 	 	

	 	 	(Address of Bank)	 	(City)	 	(State)	 	(Zip Code)	 	 

	 	 	Bank Routing Number	 	    
 (between these symbols "/:" ":/" on bottom left of check)	 	 

	 	 	Account Number:	 	            33001315045            (checking/deposit/savings)	(circle one)	 
	 	 	 	 	
	 	 

Copy of a voided check is attached to this form  

	Borrower Name:	 	NOVACARDIA, INC	 	 
	Borrower Address:	 	12651 High Bluff Drive, Suite 200
San Diego, CA 92130
	 	 
	

Authorized by:	
 	

    
	
 	

 
	 	 	Its:	    
	 	 
	

Date authorized:	
 	

    
	
 	

 

Internal
ACH Authorizations from Lender: 

	Approved by:	 	    
	 	Date:	 	    

1

  

  
 

  EXHIBIT H
  
  NEGATIVE PLEDGE AGREEMENT

        THIS NEGATIVE PLEDGE AGREEMENT is made as of March 21, 2005, by and between  NOVACARDIA,
 INC. ("Borrower") and LIGHTHOUSE CAPITAL PARTNERS
V, L.P. ("Lender"). 

In
consideration of the Loan and Security Agreement between the parties of proximate date herewith (the "Loan Agreement"), Borrower agrees
as follows: 

Except
as otherwise permitted in the Loan Agreement, Borrower shall not sell, transfer, assign, mortgage, pledge, lease, grant a security interest in, or encumber any of Borrower's intellectual
property, including, without limitation, the following: 

        (a)   Any
and all copyright rights, copyright applications, copyright registration and like protection in each work or authorship and derivative work thereof, whether
published or unpublished and whether or not the same also constitutes a trade secret, now or hereafter existing, created, acquired or held (collectively, the
"Copyrights"); 

        (b)   Any
and all trade secrets, and any and all intellectual property rights in computer software and computer software products now or hereafter existing, created, acquired
or held; 

        (c)   Any
and all design rights which may be available to Borrower now or hereafter existing, created, acquired or held; 

        (d)   All
patents, patent applications and like protections, including, without limitation, improvements, divisions, continuations, renewals, reissues, extensions and
continuations-in-part of the same, including, without limitation, the patents and patent applications (collectively,
the "Patents"); 

        (e)   Any
trademark and servicemark rights, whether registered or not, applications to register and registrations of the same and like protections, and the entire goodwill of
the business of Borrower connected with and symbolized by such trademarks (collectively, the "Trademarks"); 

        (f)    Any
and all claims for damages by way of past, present and future infringements of any of the rights included above, with the right, but not the obligation, to sue for
an collect such damages for said use or infringement of the intellectual property rights identified above; 

        (g)   Any
and all licenses or other rights to use any of the Copyrights, Patents or Trademarks and all license fees and royalties arising from such use to the extent permitted
by such license or rights; 

        (h)   Any
and all amendments, extensions, renewals and extensions of any of the Copyrights, Patents or Trademarks; and 

        (i)    Any
and all proceeds and products of the foregoing, including, without limitation, all payments under insurance or any indemnity or warranty payable in respect of any of
the foregoing. 

It
shall be an Event of Default under the Loan Agreement if there is a breach of any term of this Negative Pledge Agreement. Borrower agrees to properly execute all documents reasonably required by
Lender in order to fulfill the intent and purposes hereof. 

	NOVACARDIA, INC.	 	LIGHTHOUSE CAPITAL PARTNERS V, L.P.
	 	 	 	By:	LIGHTHOUSE MANAGEMENT PARTNERS V, L.L.C.,

its general partner
	

By:	

    
	
 	

By:	

    

	

Name:	

    
	
 	

Name:	

    

	

Title:	

    
	
 	

Title:	

    

1

  

 
 

EXHIBIT I
  
    CONTROL AGREEMENT

[In
form and substance acceptable to Lender in its reasonable discretion] 

1

  

	Account Numbers:	 	33001315045
	 	 
	
 	
 	

	
 	

 

[SILICON VALLEY BANK LOGO]

 
 

DEPOSIT ACCOUNT CONTROL AGREEMENT    
    

	Customer:	 	NovaCardia, Inc.
	 	 
	Creditor:	 	Lighthouse Capital Partners V, L.P.
	 	 
	Date:	 	March 21, 2005
	 	 

        This
Deposit Account Control Agreement ("Agreement") is entered into as of the above date between Silicon Valley Bank ("Bank"), Creditor identified above ("Creditor"), and Customer
identified above ("Customer"). 

        All
parties agree as follows: 

        1.     Deposit Account.    Bank maintains one or more demand, time, savings, passbook,
certificates of deposit or other similar accounts that are identified above in which Customer has an interest. The referenced account(s) is (are) subject to the Bank's Deposit Agreement Disclosure
Statement, unless specifically altered by this Agreement. The parties acknowledge that the Deposit Account constitutes a 'Deposit Account" within the meaning of Section 9102 of the Uniform
Commercial Code of the State of California ("UCC") and Bank is a "Bank" within the meaning of Section 9102 of the UCC. The provisions of this Agreement constitute "Control" over the Deposit
Account within the meaning of Section 9104 of the UCC. 

        2.     Security Interests.    Pursuant to a security agreement or similar agreement identified
in Exhibit A hereto ("Security Agreement"), Customer has granted to Creditor a lien on and security interest in the above account(s) and in all cash, funds, items, instruments and any
other amounts now or later deposited into or held therein (collectively, the "Deposit Account"). Bank acknowledges the lien on and security interest in the Deposit Account granted by Customer to
Creditor. With respect to Bank's rights pursuant to Section 6 of this Agreement, Customer has granted to Bank a security interest in the Deposit Account, or Bank has a lien or right of setoff
under the UCC or other laws applicable to the Deposit Account. Creditor acknowledges the Bank's lien or right of setoff on the Deposit Account under the UCC or other laws applicable to the Deposit
Account and/or the security interest in the Deposit Account granted by Customer to Bank. Customer hereby ratifies and confirms the security interests and/or liens and/or rights of setoff it has
granted in the Deposit Account to Bank and Creditor. 

        3.     Other Deposit Control Agreements.    Bank has entered into Deposit Account Control
Agreements with the parties listed on Exhibit A attached hereto. Customer covenants and agrees that it will not enter into a deposit control agreement with any other party without Creditor's
prior written consent. Bank agrees that it will not enter into a deposit control agreement with any other party with respect to the Deposit Account without Creditor's prior written consent. 

        4.     Customer's Rights in Deposit Account.    For purposes of perfection under the UCC of
Creditor's security interest in the Deposit Account(s), Creditor has control over the Deposit Account(s), provided that until Bank receives a Notice of Exclusive Control (as described and set
forth below), Customer will be entitled to draw items on and otherwise to withdraw or direct the disposition of funds from the Deposit Account. So long as this Agreement is in effect, Customer may not
close the Deposit Account without Creditor's prior written consent. Bank may close Customer's Deposit Account in accordance with Bank's business practices and as required by applicable law. 

1

 

Customer
will notify Creditor if Bank closes Customer's Deposit Account. 

        5.     Creditor's Control of Deposit Account.    Except as permitted in section 6 of
this Agreement, and except as required pursuant to the terms of any other deposit account control agreement executed by Customer and/or referenced in Section 3 and Exhibit A
to this Agreement, after Bank receives a Notice of Exclusive Control from Creditor and has had reasonable opportunity to comply with it, but no later than two Business Days ("Business Days"
means days which Bank is open to the public for business and are measured in 24 hour increments) after the Notice of Exclusive Control has been validly given (in accordance with
Section 13(B) below), Bank and Customer agree that: (a) Bank will comply only with    •    Creditor's instructions as to the withdrawal or disposition
of any funds credited to the Deposit Account, and to any other matters relating to the Deposit Account, without Customer's further consent, and (b) Bank will not comply with any instructions
from Customer concerning the Deposit Account or any funds in the Deposit Account. Creditor agrees that it will not send a Notice of Exclusive Control unless it believes that it is entitled to exercise
its rights as to the Deposit Account under the Security Agreement or any of the other documents executed in connection with the Security Agreement. The Notice of Exclusive Control must be in the form
set forth in Exhibit B hereto and must be signed by an authorized representative of Creditor. Creditor's instructions may include the giving of stop payment orders for any items being
presented to the Deposit Account for payment. Bank will be fully entitled to rely upon such instructions from Creditor even if such instructions are contrary to any instructions or demands given by
Customer. Customer confirms that Bank should follow instructions from Creditor even if the result of following such instructions is that Bank dishonors items presented for payment from the Deposit
Account. Customer further confirms that Bank will have no liability to Customer for wrongful dishonor of such items in following such instructions from Creditor. Bank shall have no duty to inquire or
determine whether Customer's obligations to Creditor are in default, or whether the Creditor is entitled to send a Notice of Exclusive Control. 

        6.     Priorities of Security Interests; Rights Reserved by Bank.    Creditor agrees that
nothing herein subordinates or waives, and that Bank expressly reserves, any and/or all of Bank's present and future rights (whether described as rights of setoff, banker's liens, chargeback or
otherwise, and whether available to Bank under the law or under any other agreement between Bank and Customer concerning the Deposit Account) with respect to (a) items deposited to the Deposit
Account and returned unpaid, whether for insufficient funds or for any other reason; (b) overdrafts on the Deposit Account; (c) automated clearing house entries; (d) any
provisional credits granted by Bank to the Deposit Account; (e) claims of breach of the Uniform Commercial Code's transfer or presentment warranties made against Bank in connection with items
deposited to the Deposit Account; (f) Bank's usual and customary charges for services rendered in connection with the Deposit Account; or (g) any lien arising in connection with any loan
or other credit relationship between Customer and Bank, which lien shall be subject to the provisions of the Subordination/ Intercreditor Agreement identified in Exhibit A hereto. Creditor
agrees that notwithstanding receipt of Creditor's Notice of Exclusive Control, subject to the terms and obligations in the Subordination/ Intercreditor Agreement listed in Exhibit A, Bank may
exercise Bank's rights and remedies in connection with any liens, security interests or claims it may have in or on the Deposit Account as described in this Section 6. 

        7.     Statements.    At Customer's expense, Bank will send copies of all statements for the
Deposit Account to Creditor at Creditor's address set forth below Creditor's signature block at the end of this Agreement. Until this Agreement is terminated, Customer authorizes Bank to disclose to
Creditor at Creditor's request any information concerning Customer's Deposit Account, including but not limited to the identity of any other party with which Customer and Bank have executed deposit
control agreements or similar agreements. 

        8.     Returned Items.    Bank will pay returned items by debiting the Deposit Account. If at
any time after Creditor exercises exclusive control over the Deposit Account (a) funds are not available in the Deposit Account to cover the amount of any returned item, and (b) Customer
fails to pay such amount within 15 Business Days of Bank's written demand therefor, then Creditor agrees that it will pay, within ten (10) Business Days of a written demand by Bank, any
amounts owed for a returned item that is not paid in full by Customer up to the amount of the proceeds received by Creditor from the corresponding returned item. 

        9.     Indemnity and Hold Harmless of Bank by Customer.    Customer hereby agrees to indemnify
and hold harmless Bank, its affiliates and their 

2

 

respective
directors, officers, agents and employees (each, an "Indemnified Person") against any and all claims, causes of action, liabilities, lawsuits, demands and
damages (each, a "Claim") asserted by Creditor or any other party (other than an Indemnified Person), including without limitation, any and all court costs and reasonable
attorneys' fees, in any way related to or arising out of or in connection with this Agreement or any action taken or not taken pursuant hereto, including any Claims arising as a result of Bank's
adherence (or alleged failure of adherence) to the foregoing instructions including, without limitation, Claims that allegedly result from Bank's ceasing, based on this Agreement, to permit
withdrawals of or from the Deposit Account or the funds in the Deposit Account or resulting from Bank's paying over or delivering all or any part of the Deposit Account or the funds in the Deposit
Account pursuant to the directions of Creditor; provided that no Indemnified Person shall be entitled to be indemnified to the extent that such Claims result from an
Indemnified Person's gross negligence or willful misconduct. Customer will indemnify Creditor for any indemnity obligations Creditor owes to Bank under this Agreement. 

        10.   Indemnification and Hold Harmless of Bank by Creditor.    Creditor hereby agrees to
indemnify Indemnified Persons against any and all Claims asserted by Customer or any other party (other than an Indemnified Person), including, without limitation, any and all court costs and
reasonable attorneys' fees, arising directly out of Bank's adherence or failure of adherence to Creditor's instructions in its Notice of Exclusive Control, including, without limitation, any Claim
that arises directly out of Bank's ceasing, based on this Agreement, to permit withdrawals of or from the Deposit Account or the funds in the Deposit Account or resulting from Bank's paying over or
delivering all or any part of the Deposit Account or the funds in the Deposit Account pursuant to Creditor's instructions in its Notice of Exclusive Control; provided,
that no Indemnified Person shall be entitled to be indemnified (a) to the extent that such Claim results from an Indemnified Person's gross negligence or willful misconduct; (b) for any
special, indirect, consequential or punitive damages asserted by Customer if the waiver in Section 11 of this Agreement is enforceable; or (c) any Claim asserted against Bank for Bank's
breach of the Subordination/Intercreditor Agreement identified in Exhibit A. Creditor agrees that it will not hold Indemnified Persons liable for any Claim arising out of or relating to
any Indemnified Person's performance or failure of performance under this Agreement other than those Claims that result directly from the acts or omissions of an Indemnified Person which constitute
gross negligence or willful misconduct. 

        11.   Waiver.    NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED
IN THIS AGREEMENT OR ANYWHERE ELSE, CUSTOMER WAIVES AND AGREES THAT IT SHALL NOT SEEK FROM BANK OR CREDITOR UNDER ANY THEORY OF LIABILITY (INCLUDING WITHOUT LIMITATION ANY THEORY IN TORT), ANY
SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES RELATING TO THIS AGREEMENT.  

        12.   Amendments.    This Agreement and all exhibits attached hereto may be amended only
by a written agreement,
signed by Bank, Creditor, and Customer. 

        13.   Notices.    

        (A)  Any
notice, other than a Notice of Exclusive Control, or other communication provided for or allowed hereunder shall be in writing and shall
be considered to have been validly given (a) when received if delivered personally (whether by messenger, hand delivery or otherwise) or by overnight delivery or by facsimile to the recipient
to the address or facsimile number set forth below the signature of the applicable party hereto, or (b) 72 hours after being deposited in the United States mail, registered or
certified, postage prepaid, return receipt requested, if sent to the address and addressee as set forth below the signature of the applicable party hereto. The addresses to which notices or other
communications are to be given (including a Notice of Exclusive Control pursuant to subsection (B) below) may be changed from time to time by notice served as provided herein. 

        (B)  A
Notice of Exclusive Control shall be in writing, must be in the form set forth in Exhibit B hereto, must be delivered to the
address listed below Bank's signature block at the end of this Agreement, must be delivered to Bank via hand delivery, messenger, overnight delivery or facsimile and shall be considered to have been
validly given when actually received, except that a facsimile will be considered to have been validly given only when acknowledged in writing by Bank (Bank agrees that it will use its good faith
effort to acknowledge receipt of such facsimile). Creditor acknowledges that Bank may not be able to respond to a Notice of Exclusive 

3

 

Control
pursuant to Section 5 above, and Creditor agrees that Bank will not be held liable for any failure to respond to a Notice of Exclusive Control, if the Creditor does not deliver
the Notice of Exclusive Control as set forth in this Section 13 or to the address listed below Bank's signature block at the end of this Agreement. 

        In
accordance with the provisions of §326 of the USA PATRIOT Act, Creditor agrees that it will provide the Bank with a copy of its formation documentation when delivering a
Notice of Exclusive Control, 

        14.   Integration Provision.    Except for the Subordination/Intercreditor Agreement
identified in Exhibit A, this Agreement constitutes the entire agreement among Bank, Customer and Creditor with respect to Creditor's control over the Deposit Account and matters related
thereto, and all prior communications, whether verbal or written, between any of the parties hereto with respect to the subject matter hereof shall be of no further effect or evidentiary value. 

        15.   Counterparts.    This Agreement may be signed in counterparts that, when signed by all
parties, shall constitute one agreement. 

        16.   Relationship of the Parties.    Nothing in this Agreement shall create any agency or
fiduciary relationship between Customer, Creditor and Bank. 

        17.   Governing Law and Jurisdiction.    The parties hereto agree that this Agreement shall
be governed exclusively under and in accordance with the laws of the State of California. All parties hereto each submit to the exclusive jurisdiction of the State and Federal courts in Santa Clara
County, California. 

        18.   Jury Trial Waiver.    CUSTOMER, CREDITOR, AND BANK EACH WAIVES
ITS RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS.
THIS WAIVER IS A MATERIAL INDUCEMENT FOR ALL PARTIES TO ENTER INTO THIS AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.  

         19.   Successors.    The terms of this Agreement shall be binding upon, and shall inure
to the benefit of, the
parties hereto and their respective corporate successors or heirs and personal representatives. However, Customer may not assign this Agreement without the prior written consent of the Creditor and
Bank. Creditor may assign this Agreement upon written notice to Bank; provided, that such assignee must assume in a writing all of Creditor's obligations under this Agreement. Bank may assign this
Agreement upon written notice to Creditor; provided, that such assignee must assume in a writing or by law all of the Bank's obligations under this Agreement. 

        20.   Attorneys' Fees, Costs and Expenses.    In any action or proceeding between Bank and
any other party to this agreement, the prevailing party will be entitled to recover its reasonable attorneys' fees and other reasonable costs and expenses incurred, in addition to any other relief to
which it may be entitled. 

        21.   Termination; Survival.    Creditor may terminate this Agreement by giving Bank and
Customer written notice of termination; provided that, by giving such notice, Creditor acknowledges that it will thereby be confirming that, as of the termination date, it will no longer have a
perfected security interest in the Deposit Account via control pursuant to this Deposit Account Control Agreement, although Creditor may continue to have a perfected security interest in the Deposit
Account by other means. Bank may terminate this Agreement by giving Creditor and Customer 30 days' prior written notice of termination. Customer may only terminate this Agreement with the
written consent of Creditor; provided that, by giving such notice with Creditor's written consent, both Customer and Creditor acknowledge that they will thereby be confirming that, as of the
termination date, Creditor will no longer have a perfected security interest in the Deposit Account via control pursuant to this Deposit Account Control Agreement, although Creditor may continue to
have a perfected security interest in the Deposit Account by other means. Subject to the foregoing, this Agreement automatically terminates when the Deposit Account closes or when Creditor notifies
Bank that all obligations owed to Creditor have been paid in full and Creditor has terminated its security interest in the Deposit Account. Sections 9, 10, 11, 17, 18 and 20 shall
survive the termination of this Agreement. 

        [The
rest of this page intentionally left blank] 

4

 

	BANK:	 	SILICON VALLEY BANK
	 	 	By:	 	

	 	 	Title:

Account Control Department
	
 	
 	

Address for Notices:

Silicon Valley Bank

Account Control Department

3003 Tasman Drive, Mail Sort HG180

Santa Clara, CA 95054

Telephone: 408-654-5512/408-654-3099/408-654-5506

Facsimile: 408-496-2409
	
CUSTOMER:	
 	

NovaCardia, Inc.	
 	

,
	 	 	
	 	 
	 	 	a	 	Delaware	 	corporation
	 	 	 	 	
	 	 
	 	 	TIN*	 	
	 	 
	
    	
 	

 	
 	

 	
 	

 
	 	 	By:	 	

	 	 	Name:

Title:
	
 	
 	

Address for Notices:

12651 High Bluff Drive, Suite 200
San Diego, CA 92130
    
 Telephone: (858) 509-0455

Facsimile: (858) 509-0456
	
CREDITOR:	
 	
Lighthouse Capital Partners V, L.P.
	
 	

,
	 	 	a	 	Delaware
	 	 
	 	 	TIN*	 	14-1854721
	 	 
	
 	
 	

By:	
 	

Lighthouse Management Partners V, L.L.C., its general partner
	 	 	By:	 	

	 	 	Name:

Title:
	
 	
 	

Address for Notices:

500 Drakes Landing Road
Greenbrae, CA 94904
Attn: Contracts Administration
 Telephone: (415) 464-5900

Facsimile: (415) 925-3387

* Pursuant
to §326 of the USA PATRIOT Act, the Bank is required to obtain a Tax Identification Number (TIN) from all parties to this Agreement 

5

 
Silicon Valley Bank

Deposit Account Control Agreement

Exhibit A  

1.     "Security Agreement":  

Loan
and Security Agreement dated March 21, 2005 

2.     Deposit Account Control Agreements Previously Executed by Silicon Valley Bank with other Parties Asserting an Interest in the Deposit Account:  

3.     Subordination/Intercreditor Agreement(s) executed by Silicon Valley Bank and Creditor:  

6

 
 Silicon Valley Bank

Deposit Account Control Agreement

Exhibit B

Notice of Exclusive Control  

	To:	 	Silicon Valley Bank ("Bank")	 	 	 	 
	From:	 	
	 	("Creditor")	 	 
	Re:	 	
	 	("Customer")	 	 
	Date:	 	
	 	 	 	 

        Pursuant
to the Deposit Account Control Agreement dated
                                         
                    ("Agreement") entered among Bank, Customer and Creditor, Creditor hereby notifies
Bank of Creditor's exercise of Creditor's rights under the Agreement and directs Bank to cease complying with instructions or any directions originated by Customer or its agents. Creditor hereby
certifies that it is entitled to exercise its rights under the Agreement, that Creditor has a right to all or part of the funds in the Deposit Account (as defined in the Agreement). 

        Creditor
understands and agrees that Bank shall have no duty or obligation whatsoever of any kind or character to determine the validity of Creditor's exercise of its rights under the
Agreement or the certification above, to determine if Bank is obligated to take further instructions from Customer, or to determine whether Creditor has a right to all or part of the funds in the
Deposit Account. Creditor hereby agrees to indemnify and hold harmless Bank, its affiliates, and their respective directors, officers, employees and agents pursuant to the terms of Section 10
of the Agreement. 

        Creditor
agrees that, upon receipt of Creditor's Notice of Exclusive Control, Bank may exercise Bank's rights and remedies as permitted under Sections 5 and 6 of the
Agreement and under any applicable laws, and may need to comply with obligations pursuant to the deposit account control agreements set forth in Exhibit A of the Agreement. 

        Upon execution of this Notice of Exclusive Control, Creditor must supply the Bank with a copy of their formation documentation, pursuant to §326 of
the USA PATRIOT Act.

        Creditor
hereby certifies that the person executing this Notice of Exclusive Control is an officer, representative or agent of Creditor authorized to act on the behalf of Creditor and to
make the representations and agreements contained in this Notice of Exclusive Control. 

	CREDITOR:	 	

	 	 	By:	 	

	 	 	Title:
	
 ACKNOWLEDGED BY:	
 	

SILICON VALLEY BANK
	
 (for facsimile only)	
 	

By:	
 	

	 	 	Name:

Title:

Date:

Time:

7

State Street Bank and Trust Company

1200 Crown Colony Drive

Quincy, MA 02169 

ATTENTION:
Kevin J. Hughes, Vice President 

RE:
NovaCardia, Inc. 

Dear
Mr. Hughes: 

        All
terms not defined herein but defined in the Uniform Commercial Code, as in effect from time to time in the Commonwealth of Massachusetts
(the "UCC"), shall have the meanings given to such terms in Articles 8 & 9 of the UCC. 

        For
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned, (a) NOVACARDIA, INC., a Delaware corporation
(the "Borrower"), (b) CAPITAL ADVISORS GROUP INC., a Massachusetts corporation
(the "Investment Manager"), (c) LIGHTHOUSE CAPITAL PARTNERS V, L.P., a Delaware limited partnership,
(the "Lender") and (d) STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust company
(the "Securities Intermediary" and "Custodian"), intending to be legally bound, do hereby agree as follows: 

1.     Establishment of Account.  

        The Securities Intermediary hereby confirms that certain account (Account No. DE2245)
(the "Account"), identified in the books of the Securities Intermediary in the name of the Borrower, has been
established with and is held by the Securities Intermediary. The Account is an account to which financial assets may be credited in accordance with this Agreement. 

2.     Acknowledgement of Security Interest.  

        The Borrower and Securities Intermediary are parties to one or more agreements governing or relating to the establishment and administration of the Account
(referred to herein, collectively if more than one, as the "Custodial Agreement"). The Securities Intermediary hereby acknowledges that the Borrower has granted to the Lender a security interest in
the Borrower's rights and interests in and to the Account and all entitlements to any and all securities, investment property and other financial assets which are now or hereafter may be deposited in
and credited to the Account, and in all cash balances that are credited to the Account from time to time, and in all proceeds of any of the foregoing (collectively, the
"Account Assets") pursuant to the Loan Agreement between Borrower and Lender dated as of March 21, 2005. 

3.     Account Control.  

        3.1    Borrower Control.    

        (i)    Unless
and until the Securities Intermediary receives written notice from the Lender directing the Securities Intermediary that the Lender is exercising its right to
exclusive control over the Account, which notice is substantially in the form attached hereto as Exhibit A (a "Notice
of Exclusive Control"), or if all previous Notices of Exclusive Control have been revoked or rescinded in writing by the Lender, the Borrower (or, until the
Investment Manager's receipt of notice from the Lender that it is exercising exclusive control over the Account, the Investment Manager pursuant to the Custodial Agreement) shall be entitled to
exercise all rights with respect to, and to direct the Securities Intermediary with respect to, the Account and the Account Assets, including, but not limited to, the investment and
re-investment of the Account Assets and the Securities Intermediary shall be entitled to deal with the Borrower (or the Investment Manager pursuant to the Custodial Agreement) as
the sole and absolute owner thereof, including without limitation the sale, liquidation, purchase, trading, transfer, delivery, withdrawal, release or payment of any Account Assets, including any
cash balances. 

 

        (ii)   The
Securities Intermediary shall have no responsibility or liability to the Lender for settling trades of financial assets carried in the Account at the direction of
and in accordance with the instructions of the Borrower or the Investment Manager given in accordance with the Custodial Agreement, or for complying with entitlement orders concerning any Account
Assets from the Borrower, if received by the Securities Intermediary prior to receipt of a Notice of Exclusive Control from the Lender or at any time after all Notices of Exclusive Control have been
revoked or rescinded in writing by the Lender. 

        3.2    Control by Lender.    

        (i)    Promptly
upon receipt by the Securities Intermediary of a Notice of Exclusive Control, but in any event, within forty-eight (48) hours thereof, each of the
Securities Intermediary shall thereafter follow only the instructions of the Lender with respect to the Account and the Account Assets, and shall comply with any entitlement order (within the meaning
of Section 8-102(a)(8) of the UCC) or other written instructions received from the Lender, without further consent of the Borrower or any other person, and notwithstanding any
demand or notice to the contrary from the Borrower and the Lender shall be entitled to exercise all rights with respect to, and to direct the Securities Intermediary with respect to, the Account and
the Account Assets, including, but not limited to, the investment and re-investment of the Account Assets and the Securities Intermediary shall be entitled to deal with the as the sole and
absolute owner or controlling party thereof, including without limitation the sale, liquidation, purchase, trading, transfer, delivery, withdrawal, release or payment of any Account Assets, including
any cash balances. 

        (ii)   The
Securities Intermediary shall be authorized to follow the instruction or any entitlement order of the Lender pursuant to this Section 3.2 with respect to the
Account and the Account Assets in all respects and shall be entitled to deal with the Lender as though the Lender were the sole and absolute owner of the Account and Account Assets, including without
limitation with respect to the sale, liquidation, purchase, delivery, trading, transfer, withdrawal, release or payment of any Account Assets, including any cash balances credited to
the Account. 

        (iii)  The
Securities Intermediary shall have no responsibility or liability to the Borrower for complying with a Notice of Exclusive Control or complying with entitlement
orders concerning any Account Assets originated by the Lender. The Securities Intermediary shall have no duty to investigate or make any determination as to whether a default or an event of default
exists under any credit agreement between the Borrower and the Lender, and the Securities Intermediary shall comply with a Notice of Exclusive Control whether or not the Borrower may allege that no
such default or event of default exists. 

        (iv)  Concurrently
with notifying the Securities Intermediary that it is exercising or rescinding its right of exclusive control over the Account, the Lender shall also
provide written notice to the Investment Manager of such exercise or rescission. 

4.     Lender Security Interest.  

        This Agreement is intended by the Borrower and Lender to grant "control" of the Account Assets to the Lender in order to perfect the Lender's security interest in
the Account Assets pursuant to Article 9 of the UCC. Notwithstanding the foregoing, the Securities Intermediary makes no representation with respect to and shall have no responsibility for the
sufficiency of this Agreement for such purpose. 

5.     Indemnification.  

        In addition to the indemnities set forth in the Custodial Agreement, the Borrower hereby agrees to indemnify and hold the Securities Intermediary harmless from
and against all liabilities, obligations, losses, damages, claims, costs and expenses (including without limitation attorney's fees and costs) which may be asserted against or incurred or suffered by
the Securities Intermediary arising out of this Agreement or the performance of the Securities Intermediary's agreements or duties hereunder, or as a consequence of any action or omission by the
Securities Intermediary pursuant to the terms of this Agreement (except for such claims which have been determined by a court of competent jurisdiction to have resulted from the Securities
Intermediary's willful misconduct or gross 

2

 

negligence).
The Lender agrees to indemnify and hold the Securities Intermediary harmless from and against any and all liabilities, obligations, losses or claims which may arise as a direct result of
the Securities Intermediary acting in accordance with any notice, instruction or direction received from the Lender pursuant to the terms of this Agreement (except for such claims which have been
determined by a court of competent jurisdiction to have resulted from the Securities Intermediary's or Borrower's willful misconduct or gross negligence). THE SECURITIES INTERMEDIARY SHALL NOT BE
LIABLE IN ANY EVENT TO THE LENDER, BORROWER, OR INVESTMENT MANAGER FOR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES WHICH ANY PARTY MAY INCUR OR SUFFER IN CONNECTION WITH THIS AGREEMENT,
REGARDLESS OF WHETHER THE SECURITIES INTERMEDIARY KNEW OF THE LIKELIHOOD OF SUCH LOSS OR DAMAGE. This paragraph shall survive termination of this Agreement and the satisfaction or termination of the
Lender's interest in the Account. 

6.     Force Majeure.  

        The Securities Intermediary shall not be liable for delays or errors occurring by reason of circumstances beyond the control of the parties, including, without
limitation, acts of civil, military, or banking authorities, national emergencies, market disorder, labor difficulties, fire, flood or other catastrophes, acts of God, terrorism, insurrection, war,
riots, failure of transportation or equipment, or failure of vendors, communication or power supply. 

7.     Duties of Securities Intermediary; No Implied Obligations.  

        (i)    The
Securities Intermediary shall have no duties, obligations, responsibilities or liabilities with respect to the Account or the Account Assets except as and to the
extent expressly set forth in this Agreement and the Custodial Agreement, and no implied duties of any kind shall be read into this Agreement against the Securities Intermediary. 

        (ii)   Except
for the rights in favor of the Lender agreed to herein, nothing herein shall be deemed to modify, limit, restrict, amend or supercede the terms of the Custodial
Agreement, and Securities Intermediary shall remain entitled to all of the rights, indemnities, powers, immunities and protections in its favor under the Custodial Agreement. The Securities
Intermediary does not herein waive or agree to subordinate, and the Securities Intermediary hereby expressly reserves, any lien, security interest and rights of offset which it is granted or to which
it is entitled under the Custodial Agreement and/or applicable law. 

        (iii)  Without
limiting the generality of the foregoing, in no instance shall the Securities Intermediary be under any obligation to take any action to preserve, protect or
exercise rights in the Account Assets (except to the extent that may be expressly required by the terms of the Custodial Agreement). It is understood that the Securities Intermediary shall have at no
time any responsibility (a) for determining the value of the Account Assets, (b) for any market decline in the value of the Account Assets or (c) for notifying any person of any
such decline in market value of the Account Assets. 

        (iv)  The
Lender hereby expressly acknowledges that the Account may include Account Assets in the nature of securities entitlements in favor of the Securities Intermediary in
one or more securities accounts at one or more underlying securities intermediaries in which or through which underlying assets, or entitlements thereto, are held or credited (including without
limitation, with respect to federal book-entry securities, a "security entitlement" within the meaning of applicable federal book-entry regulations). The Securities
Intermediary shall have no liability for the actions or omissions of, or any errors or omissions in the records of, any such underlying securities intermediary. 

        (v)   All
securities and investment property now or hereafter held in the Account shall be treated as "financial assets" within the meaning of
Section 8-102(a)(9) of the UCC. 

        (vi)  The
parties hereto acknowledge that no "security entitlement" under the UCC shall exist with respect to any financial asset held in the Account which is registered in
the name of the Borrower, payable to the order of the Borrower or specially indorsed to the Borrower (each such asset an "Identified 

3

 

Security"),
except to the extent such Identified Security has been specially indorsed by the Borrower to the Securities Intermediary or in blank. The parties further acknowledge and agree that any
such Identified Securities received by it and credited to the Account from time to time shall (so long as so credited to the Account and so long as this Agreement remains in effect) be held by
the Securities Intermediary (directly or through a Sub-Custodian, as defined below, as applicable) for the benefit of the Lender, not in its capacity as a "securities intermediary"
(as defined in the UCC), but in its capacity as a custodial agent under and subject to the terms of this Agreement. 

        (vii) For
avoidance of doubt, the Lender hereby acknowledges that any Account Assets issued outside the United States ("Foreign Security System Assets") and held in
the Account, which are held by the Securities Intermediary, a sub-custodian within the Securities Intermediary's network of sub-custodians (each a
"Sub-Custodian") or a depository or book-entry system for the central handling of securities and
other financial assets in which the Securities Intermediary or the Sub-Custodian are participants (each, a "Securities
System") may not permit the Borrower to have a security entitlement under the UCC with respect to such Foreign Security System Assets (and such property
shall be deemed for purposes of this Agreement not to be a financial asset held within the Account). 

        (viii) The
Securities Intermediary shall not change the name or the account number of the Account without the prior written consent of the Borrower and the Lender. 

8.     Standard of Care.  

        8.1    Custodial Agreement.    In no event shall the Securities
Intermediary be liable for its failure to perform under the terms of the Custodian Agreement, except to the extent that the Securities Intermediary has acted with gross negligence or willful
misconduct. The Securities Intermediary shall not be responsible for the sufficiency of this Agreement or the arrangement contemplated hereby to create, cause to attach or perfect, any security
interest in favor of the Lender. 

        8.2    No Implied Duties.    The Securities Intermediary shall have no
responsibilities, obligations or duties other than those expressly set forth in this Agreement and the Custodial Agreement, and no implied duties, responsibilities or obligations shall be read into
this Agreement against the Securities Intermediary; without limiting the generality of the foregoing, the Securities Intermediary shall have no duty to preserve, exercise or enforce rights in the
Account Assets (against prior parties or otherwise). 

        8.3    Borrower Instruction.    As between the Borrower and the
Securities Intermediary, except as may be otherwise expressly stated herein, the liabilities of each to the other shall be governed by the provisions of the Custodial Agreement. Instructions from a
Borrower's Authorized Representative given in accordance with the terms of the Custodial Agreement to the Securities Intermediary hereunder shall also constitute Proper Instructions (as defined
in the Custodial Agreement) under the Custodial Agreement. Upon the Investment Manager's receipt from the Lender of the Lender's exercise of exclusive control over the Account, the Borrower
acknowledges that the Investment Manager shall have no responsibility for investing and reinvesting the Account Assets, until such time as written notice of the Lender's revocation of such exclusive
control is received by the Investment Manager. 

        8.4    Lender Instruction.    Notwithstanding any provision contained
herein or in any other document or instrument to the contrary, the Securities Intermediary shall not be liable for any action taken or omitted to be taken at the instruction of the Lender, or any
action otherwise taken or omitted to be taken under, in connection with, or pursuant to the terms of this Agreement, except for in the case of (and to the extent of) the Securities
Intermediary's own gross negligence or willful misconduct. 

        8.5    Certain Immunities and Protections.    Notwithstanding any
provision to the contrary contained herein, the Securities Intermediary in performing hereunder: 

        (i)    may
in any instance where the Securities Intermediary reasonably determines that it lacks authority to take or refrain from taking certain action, or as to the
requirements of this Agreement under any circumstance before it, delay or refrain from taking action unless and until it has received appropriate 

4

 

instructions
hereunder; provided, however, that under no circumstances shall this clause (i) be construed as requiring the Securities Intermediary to obtain the consent of the Borrower in order
to comply with any entitlement order originated by the Lender hereunder; 

        (ii)   may
consult with legal counsel, independent public accountants, or other experts selected by it in good faith, and shall not be liable for any action taken or omitted
to be taken in good faith in accordance with the advice of such experts; 

        (iii)  will
have no duty to ascertain or inquire as to the performance or observance by the Borrower of any of the terms, conditions or covenants of this Agreement, or as to
the terms of (or the Borrower's or Lender's compliance with) any credit agreement or related security agreement between the Borrower and Lender, or to inspect the property, books or records of
the Borrower; 

        (iv)  except
for the representations of the Securities Intermediary set forth in Section 9, will not be responsible for the due execution,
legality, validity, enforceability, genuineness, effectiveness or sufficiency of this Agreement with respect to any party other than the Securities Intermediary; 

        (v)   will
not incur any liability by acting or not acting in reliance upon any notice, consent, certificate, statement or other instrument or writing reasonably believed by
it to be genuine and to be signed or sent by the proper party or parties; 

        (vi)  will
not incur liability for any notice, consent, certificate, statement, wire instruction, telecopy, or other writing which is delayed, canceled or changed without the
actual knowledge of the Securities Intermediary; 

        (vii) shall
not be deemed to have or be charged with notice or knowledge of any fact or matter unless a written notice thereof has been received by the Securities
Intermediary at the address designated in (or as subsequently designated pursuant to) this Agreement; 

        (viii) shall
not be required by any provision of this Agreement to expend or risk the Securities Intermediary's own funds, or to take any action (including but not limited
to the institution or defense of legal proceedings) which in its reasonable judgment could cause it to incur or suffer any significant expense or liability (including but not limited to reasonable
attorneys' fees and disbursements), unless and until security or indemnity in form and amount reasonably satisfactory to the Securities Intermediary shall have been provided therefor; 

        (ix)  shall
not incur any liability for acts or omissions of any domestic or foreign depository, securities intermediary or book-entry system for the central
handling of financial assets (except to the extent provided in the Custodial Agreement, if applicable); and 

        (x)   except
as expressly set forth herein, shall not be responsible for the title, validity or genuineness of any Account Asset carried in the Account at any time
or times. 

9.     Compliance with Legal Process and Judicial Orders.  

        The Securities Intermediary shall have no responsibility or liability to the Borrower or to the Lender or to any other person or entity for acting in accordance
with any judicial or arbitral process, order, writ, judgment or decree relating to the Account Assets subject to this Agreement notwithstanding that such order or process is subsequently modified,
vacated or otherwise determined to have been without legal force or effect. 

10.   Representations and Warranties; Covenants.  

        10.1    General Representations.    Each of the parties to this
Agreement represents and warrants to the other parties to this Agreement as follows: 

5

 

        (i)    it
is duly organized and existing under the laws of the jurisdiction of its organization with full power and authority to execute and deliver this Agreement and to
perform all of the duties and obligations to be performed by it under this Agreement; and 

        (ii)   this
Agreement has been duly authorized, executed and delivered by it, and constitutes its valid, legal and binding obligation enforceable against it in accordance with
its terms, except as enforceability may be limited by bankruptcy, insolvency or other similar laws of general application relating to or affecting the enforcement of creditors' rights in general or by
general principles of equity whether considered in a proceeding at law or equity. 

        10.2    Securities Intermediary Representations.    The Securities
Intermediary represents, warrants, covenants, agrees and confirms, as of the date hereof, and at all times until the termination of this Agreement: 

        (i)    that
in the ordinary course of its business the Securities Intermediary maintains securities accounts for others, and that it is acting in that capacity with respect to
the Account; 

        (ii)   that
there are to its knowledge no other agreements entered into between the Securities Intermediary and the Borrower with respect to the Account except for this
Agreement, the Custodial Agreement and any related fee agreement, funds transfer agreement and data access agreement; 

        (iii)  that
the Securities Intermediary has not entered into, and until the termination of this Agreement will not enter into, any agreement (other than the Custodial
Agreement) with any other person or entity relating to the Account or the Account Assets under which it has agreed to comply with entitlement orders (as defined in of the UCC) of such other
person or entity; and 

        (iv)  that
the Securities Intermediary has not entered into, and until the termination of this Agreement will not enter into, any agreement with the Borrower or any other
person or entity, purporting to revoke, limit or condition the agreement of the Securities Intermediary set forth in this Agreement to comply with entitlement orders of the Lender, as set forth
herein, without the Lender's express written consent. 

        10.3    Notice of Third Party Claims.    If the Securities
Intermediary receives written notice that any person or entity asserts a lien, encumbrance or adverse claim (including any writ, garnishment, judgment, warrant of attachment, execution or similar
process) against the Account, the Securities Intermediary will undertake reasonable efforts promptly to notify the Lender and the Borrower thereof (but shall have no liability in the event of
any delay or failure on its part to do so). 

        10.4 The
Investment Manager is executing this Agreement for the purpose of acknowledging (i) receipt of this Agreement and (ii) knowledge of its terms
and conditions. 

11.   Further Agreements. 

        11.1    Settlement By Borrower.    The Borrower agrees with the
Securities Intermediary that assets of the Borrower shall not be deposited, delivered or held in the Account until such assets have been fully paid by the Borrower. 

        11.2    No Borrower Contravention of Lender Control.    After the
Lender has delivered a Notice of Exclusive Control to the Securities Intermediary, unless such Notice of Exclusive Control is revoked in writing by the Lender, the Borrower agrees that it shall not
give any instruction to the Securities Intermediary in respect of the Account or Account Assets without the prior written consent of the Lender. 

12.   Access to Reports; Tax Reporting.  

6

 

        12.1    Information Sharing.    The Borrower hereby authorizes the
Securities Intermediary to forward directly to the Lender a copy of the monthly statement of the Account which is provided by the Securities Intermediary to the Borrower, provided,
however, that the Securities Intermediary failure not to forward a copy of such statement to the Lender shall not give rise to any liability hereunder. 

        12.2    Tax Reporting.    All items of income, gain, expense and loss
recognized in the Account which the Securities Intermediary determines that it is required by law to report to the Internal Revenue Service or any other taxing authorities shall be reported to the
Internal Revenue Service or such taxing authorities under the name and taxpayer identification number of the Borrower. 

13.   Interpleader.  

        Notwithstanding any provision contained in this Agreement to the contrary, in the event the Securities Intermediary believes, in its reasonable opinion, that
(i) a bona fide dispute exists concerning this Agreement or the disposition of any of the Account or the Account Assets, (ii) a person or entity makes a claim against the Account
or the Account Assets other than Borrower or Lender, or (iii) any action under any bankruptcy, insolvency or similar law is commenced relating to the Borrower, the Securities Intermediary shall
have the absolute right, at its election, to petition a court of competent jurisdiction as to the appropriate action to be taken and either deliver the Account Assets to the court in which the action
is commenced or freeze the Account pending receipt of such court direction or order, whereupon the Securities Intermediary shall thereby be relieved from any further liability respecting the Account
and the Account Assets and shall be held harmless by the Borrower, Investment Manager and the Bank in taking any action or refraining from taking any action if done pursuant to any direction or order
given by such court. 

14.   Fees and Expenses of Securities Intermediary. 

        14.1    Compensation.    The Securities Intermediary shall be entitled
to, and the Borrower hereby agrees to pay to the Securities Intermediary, compensation in accordance with the terms of the Custodial Agreement. 

        14.2    Reimbursement For Costs.    In addition to the terms of the
Custodial Agreement, the Borrower hereby agrees to pay and reimburse the Custodian for any advances, costs, expenses (including without limitation reasonable attorney's fees and costs) and
disbursements that may be paid or incurred by the Custodian in connection with, this Agreement or the arrangement contemplated hereby, including any that may be incurred in performing its duties or
responsibilities pursuant to the terms of this Agreement. 

        14.3    Liens.    Any amounts that may be owing to the Custodian from
time to time pursuant to the terms of, or as described in, this Section 14 and/or Section 5 hereof shall be deemed to be amounts owing under the Custodial Agreement, and shall be deemed
to be secured by any lien, encumbrance and other rights that the Custodian may have under the Custodian Agreement and/or applicable law; and the Custodian shall be entitled to exercise such rights and
interests in accordance with the terms of the Custodial Agreement. 

        14.4    Advances.    Without limiting the generality of the foregoing,
it is hereby expressly acknowledged and agreed by the parties that the Custodian (including its affiliates, subsidiaries and agents) shall not be obligated to advance cash or investments to, for or on
behalf of the Borrower; however, if the Custodian, or its affiliates, subsidiaries or agents, does advance cash or investments for any purpose (including but not limited to securities settlements,
foreign exchange contracts, assumed settlement or account overdraft) for the benefit of the Borrower, or in the event that the Custodian or its nominee shall incur or be assessed any taxes, charges,
expenses, assessments, claims or liabilities in connection with the performance of this Agreement, except such as may arise from the Custodian's or its nominee's own gross negligence, bad faith or
willful misconduct, any property at any time held pursuant to this Agreement shall be security therefore and should the Borrower fail to repay the Custodian promptly, the Custodian shall be entitled
to utilize available cash and to dispose of Company assets to the extent necessary to obtain reimbursement. 

15.   Termination. 

7

 

        (a)   This
Agreement may be terminated by the Securities Intermediary at any time upon not less than thirty (30) days written notice to the Borrower and the Lender. In
such event, the Borrower and the Lender shall within twenty (20) days of such notice notify the Securities Intermediary in writing of the appointment of a successor custodian (including name,
address, contact person and telephone number) and shall give written instruction to the Securities Intermediary to deliver the Account Assets to such successor Custodian. In the event of the failure
of the Borrower and Lender to give such written notification and instruction within such twenty (20) days, the Securities Intermediary shall be entitled to petition a court of competent
jurisdiction to appoint a successor (and otherwise to exercise its rights pursuant to Section 13 hereof). 

        (b)   Upon
the sooner to occur of (i) the Securities Intermediary's receipt of notice of the termination or release of the Lender's claim hereunder as provided in
Section 16.2 hereof, (ii) delivery of the Account Assets to a successor Custodian pursuant to Section 15.6(a) hereof, or (iii) the termination of the Account in accordance
with the Custodial Agreement and distribution or application of the Account Assets in accordance with the terms of this Agreement, this Agreement shall terminate and all obligations and duties of the
Securities Intermediary hereunder shall immediately terminate and be discharged. 

16.   Miscellaneous. 

        16.1    Authorization.    The Borrower hereby directs the Securities
Intermediary to comply with the terms of this Agreement. 

        16.2    Release of Security Interest.    The Lender agrees to notify
the Securities Intermediary promptly in writing when all obligations of the Borrower to the Lender under the credit agreement between the Borrower and Lender have been fully paid and satisfied or the
Lender otherwise no longer claims any interest in the Account Assets, whichever is soonest; at which time the Securities Intermediary shall have no further liabilities or responsibilities hereunder
and the Securities Intermediary's obligations under this Agreement shall terminate. 

        16.3    Notices.    All notices, requests and demands to or upon the
respective parties hereto shall be in writing (including by facsimile transmission) and may be sent by hand, or by confirmed facsimile transmission (confirmed promptly by mailing of the original) or
by telex, answer back received, or delivery by any recognized delivery service, prepaid, or by certified or registered mail, return receipt requested, postage prepaid, and addressed as follows, or to
such other address as any party may hereafter notify the other respective parties hereto in writing: 

	(a)	 	If to the Securities Intermediary,

then:	 	State Street Bank and Trust Company.

1200 Crown Colony Drive

Quincy, MA 02169

Attn: Kevin J. Hughes
	
 (b)	
 	

If to the Lender,

then:	
 	

Lighthouse Capital Partners V, L.P.

500 Drake's Landing Road

Greenbrae, CA 94904

Attn: Contract Administration
	
 (c)	
 	

If to the Borrower,

then:	
 	

NovaCardia, Inc.

12651 High Bluff Drive, Suite 200

San Diego, CA 92130

Attn: Chief Executive Officer
	
 (d)	
 	

If to the Investment Manager,

then:	
 	

Capital Advisors Group Inc.

29 Crafts Street

Newton, MA 02458

Attn: Benjamin Campbell

8

 

        16.4    Additional Information.    The Borrower, the Lender and the
Investment Manager shall provide to the Securities Intermediary any information or documents and execute any document or instrument which the Securities Intermediary may reasonably request, deem
necessary or appropriate to perform its obligations hereunder. 

        16.5    Amendments in Writing; Counterparts.    This Agreement may be
amended or modified only in a written document signed by all of the parties hereto. This Agreement may be executed in two or more counterparts, each of which shall constitute an original, but such
counterparts together shall constitute one and the same instrument. Any proof of this Agreement shall require production of only one such counterpart. 

        16.6    Severability.    If any provision of this Agreement or any
portion of such *vision, or the application thereof to any person or circumstance, shall to any extent be prohibited or held invalid or unenforceable, the remainder of this Agreement or the remainder
of such provision and the application thereof to other persons or circumstances (other than those as to which it is prohibited or held invalid or unenforceable) shall not be affected thereby, and each
term and provision hereof shall be valid and enforced to the fullest extent permitted by law. To the extent permitted by law, the parties hereto waive any provision of law which renders any such
provision or the application thereof to any person or circumstance prohibited, invalid or unenforceable in any respect. 

        16.7    Successors.    This Agreement shall be binding upon the
parties hereto and their respective successors and assigns. 

        16.8    Governing Law; Jurisdiction of Securities
Intermediary.    Each of the parties hereby agrees that this Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of
Massachusetts, without giving effect to the conflict of law provisions thereof, and that the Securities Intermediary's jurisdiction, for purposes of Section 8-110(e) of the UCC as
it pertains to this Agreement, the Account and the security entitlements relating to the financial assets (including without limitation, the Account Assets) credited to or otherwise deposited or held
in the Account, shall be the Commonwealth of Massachusetts. 

        16.9    Assignment.    No party may assign or transfer any of its
rights or obligations hereunder without the prior written consent of the other parties hereto. 

        16.10    Headings.    Any headings appearing on this Agreement are for
convenience only and shall not affect the interpretation of any of the terms of this Agreement. 

        16.11    Counterparts.    This Agreement may be executed
simultaneously in any number of counterparts each of which when so executed and delivered shall be an original but all of which shall constitute but one and the same document. 

[THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY] 

9

 

        IN
WITNESS WHEREOF, the undersigned have executed this Agreement under their respective seals as of March 21, 2005. 

	 	 	STATE STREET BANK AND TRUST COMPANY
	
 	
 	

By:	
 	

	 	 	Name:

Title:

Its duly authorized officer
	
 	
 	

LIGHTHOUSE CAPITAL PARTNERS V, L.P.
	
 	
 	

BY:	
 	

Lighthouse Management Partners V, L.L.C. its general partner
	
 	
 	

By:	
 	

	 	 	Name:

Title:

Its duly authorized                         
	
 	
 	

NOVACARDIA, INC.
	
 	
 	

By:	
 	

	 	 	Name:

Title:

Its duly authorized                         
	
 	
 	

CAPITAL ADVISORS GROUP INC.
	
 	
 	

By:	
 	

	 	 	Name:

Title:

10

 
DESCRIPTION OF INITIAL SECURITIES  

Exhibit A  

11

 
[Lender
letterhead] 

State
Street Bank and Trust Company

1200 Crown Colony Drive

Quincy, MA 02169

Attention: Kevin J. Hughes 

NOTICE OF EXCLUSIVE CONTROL  

        We hereby instruct you pursuant to the terms of that certain Account Control Agreement dated as
of                                    (as from time to time
amended and
supplemented, the "Control Agreement") among the undersigned Lighthouse Capital Partners V, L.P. (the "Lender"), Capital Advisors Group (the "Investment Manager"),
NovaCardia, Inc. (together with its successors and assigns, the "Borrower") and you, as Securities Intermediary, that you (i) shall not follow any instructions or entitlement orders of
the Borrower in respect of the Account or the Collateral (as each such capitalized term is defined in the Control Agreement), and (ii) unless and until otherwise expressly instructed by
the undersigned, shall exclusively follow the entitlement orders and instructions of the undersigned in respect of the Account or the Collateral. 

Very
truly yours, 

LIGHTHOUSE
CAPITAL PARTNERS V, L.P. 

	BY:	 	Lighthouse Management Partners V, L.L.C.

its general partner	 	 
	
 By:	
 	

 Authorized Signatory	
 	

 
	
 cc:	
 	

NovaCardia, Inc.

Capital Advisors Group	
 	

 

12

   SCHEDULE 1

DISCLOSURE SCHEDULE

DEPOSIT AND SECURITIES ACCOUNTS

	 
	 	Account Information:
 
	 	Contact Information for Account:
 

	Account Number 1	 	Company Name:	 	Silicon Valley Bank	 	Contact Name:	 	Deanna Mihalinec
	 	 	Address:	 	4445 Eastgate Mall, Suite 110	 	Phone:	 	(858) 784-3324
	 	 	City, State, Zip:	 	San Diego, CA 92121	 	Fax:	 	(858) 622-1424
	 	 	Phone:	 	(858) 784-3300	 	E-mail:	 	dmihalinec@svbank.com
	 	 	Fax:	 	(858) 622-1424	 	 	 	 
	 	 	Type of Account:	 	Corporate Checking	 	 	 	 
	 	 	Account number:	 	33001315045	 	 	 	 
	 	 	Approximate Dollar Amount: $300K	 	 	 	 
	
Account Number 2	
 	

Company Name:	
 	

Capital Advisors Group/State Street Bank	
 	

Contact Name:	
 	

Glen T. Fuzy
	 	 	Address:	 	389 Passaic Ave.	 	Phone:	 	(973) 808-0869
	 	 	City, State, Zip:	 	Fairfield, NJ 07004	 	Fax:	 	(973) 808-0783
	 	 	Phone:	 	(973) 808-0869	 	E-mail:	 	gfuzy@capitaladvisors.com.
	 	 	Fax:	 	(973) 808-0783	 	 	 	 
	 	 	Type of Account:	 	Money Market/Investment	 	 	 	 
	 	 	Account number:	 	DE2245	 	 	 	 
	 	 	Approximate Dollar Amount: $7.12M	 	 	 	 
	
Account Number 3	
 	

Company Name:	
 	

 	
 	

Contact Name:	
 	

 
	 	 	Address:	 	 	 	Phone:	 	 
	 	 	City, State, Zip:	 	 	 	Fax:	 	 
	 	 	Phone:	 	 	 	E-mail:	 	 
	 	 	Fax:	 	 	 	 	 	 
	 	 	Type of Account:	 	 	 	 	 	 
	 	 	Account number:	 	 	 	 	 	 
	 	 	Approximate Dollar Amount:	 	 	 	 
	
Account Number 4	
 	

Company Name:	
 	

 	
 	

Contact Name:	
 	

 
	 	 	Address:	 	 	 	Phone:	 	 
	 	 	City, State, Zip:	 	 	 	Fax:	 	 
	 	 	Phone:	 	 	 	E-mail:	 	 
	 	 	Fax:	 	 	 	 	 	 
	 	 	Type of Account:	 	 	 	 	 	 
	 	 	Account number:	 	 	 	 	 	 
	 	 	Approximate Dollar Amount:	 	 	 	 

PERMITTED LIENS

        EXISTING LIENS    None 

SUBSIDIARIES

None 

1

 
LITIGATION AND ADMINISTRATIVE PROCEEDINGS

None 

BUSINESS PREMISES

[TO
BE PROVIDED BY BORROWER—indicate street address and landlord contact information] 

	 
	 	Each Location Address where Lighthouse Capital Partners has financed assets:
 
	 	Landlord/Property Management Information:
 

	Current Headquarters (Location 1)	 	Contact Name:	 	Randall Woods	 	Contact Name:	 	Deanna Delaney
	 	 	Address:	 	12651 High Bluff Drive, Suite 200	 	Company Name:	 	Coast Income Properties, Inc.
	 	 	City, State, Zip:	 	San Diego, CA 92130	 	Address:	 	4350 La Jolla Village Drive, Suite 150
	 	 	Phone:	 	(858) 509-0455	 	City, State, Zip:	 	San Diego, CA 92122
	 	 	 	 	 	 	Phone:	 	(858) 587-9192
	 	 	 	 	 	 	Fax:	 	(858) 587-0576
	
Location 2	
 	

Company Name:	
 	

 	
 	

Company Name:	
 	

 
	 	 	Address:	 	 	 	Address:	 	 
	 	 	City, State, Zip:	 	 	 	City, State, Zip:	 	 
	 	 	Phone:	 	 	 	Phone:	 	 
	 	 	Fax:	 	 	 	Fax:	 	 
	
Location 3	
 	

Company Name:	
 	

 	
 	

Company Name:	
 	

 
	 	 	Address:	 	 	 	Address:	 	 
	 	 	City, State, Zip:	 	 	 	City, State, Zip:	 	 
	 	 	Phone:	 	 	 	Phone:	 	 
	 	 	Fax:	 	 	 	Fax:	 	 

2

QuickLinks

Exhibit 10.17

LOAN AND SECURITY AGREEMENT

EXHIBIT A COLLATERAL

EXHIBIT B

SECURED PROMISSORY NOTE

EXHIBIT C WARRANTS

NOVACARDIA, INC.

EXHIBIT A Amended and Restated Certificate of Incorporation

EXHIBIT B Capitalization Table

EXHIBIT D NOTICE OF BORROWING

EXHIBIT E INCUMBENCY CERTIFICATE

EXHIBIT F OFFICER'S CERTIFICATE

EXHIBIT G AUTHORIZATION FOR AUTOMATIC PAYMENT

EXHIBIT H NEGATIVE PLEDGE AGREEMENT

EXHIBIT I CONTROL AGREEMENT

DEPOSIT ACCOUNT CONTROL AGREEMENTQuickLinks
 -- Click here to rapidly navigate through this document
  

 
 

Exhibit 10.18    
    

 
 

AMENDMENT NO. 01 ("Amendment")
  TO LOAN AND SECURITY AGREEMENT NO. 4611    
    

Entered
into as of July 14, 2006 by and between
 LIGHTHOUSE CAPITAL PARTNERS, L.P. ("Lender")

and NOVACARDIA, INC. ("Borrower"). 

RECITALS  

        WHEREAS, Borrower and Lender have previously entered into that certain Loan and Security Agreement No. 4611 dated as of March 21, 2005,
(the "Loan and Security Agreement"; all initially capitalized terms not otherwise defined herein shall have the meanings given to such terms in
the Loan and Security Agreement) together with the other agreements and instruments entered into in connection therewith (collectively, the "Loan
Documents"); and 

        WHEREAS,
Advances under the Loan and Security Agreement are currently $5,000,000; and 

        WHEREAS,
Lender agrees to amend the Loan Documents to allow Lender to provide to Borrower additional financing capacity in the amount of $3,000,000; and 

        WHEREAS,
Borrower and Lender each have agreed to amend the Loan Documents subject to Borrower's performance of the terms and conditions hereof. 

        NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants herein contained, the parties hereby agree to modify the Loan Documents by entering into this Amendment and
Borrower agrees to perform such other covenants and conditions as follows: 

	A)
	Loan and Security Agreement

        (i)    Definitions—The following definitions shall be added to the
Loan and Security Agreement: 

        "Bridge Loan Commitment" means $3,000,000. 

        "Bridge Loan Commitment Termination Date" means the 60th day following the date hereof. 

	B)
	Additional Terms and Conditions

        1.     Warrant.    Borrower shall issue to Lender a warrant in the form of  EXHIBIT A attached hereto. 

        2.     Note.    Borrower shall issue to Lender a Bridge Note (the "Bridge Loan
Note") in the form of EXHIBIT B attached hereto. Subject to the terms in the Bridge Loan Note, Lender shall make Advances
to Borrower up to the principal amount of the Bridge Loan Commitment, before the Bridge Loan Commitment Termination Date. 

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        3.     Expenses.    Borrower shall pay reasonable fees and expenses incurred by Lender's legal counsel in connection
with the preparation and negotiation of documentation related to this Amendment. Such expenses are due and payable when billed. 

        Except
as amended hereby, the Loan Documents remain unmodified and unchanged and ratified by Borrower as though fully set forth herein. Lender and Borrower have executed this Amendment
as of the date first written above. 

	BORROWER:	 	LENDER:
	
NOVACARDIA, INC.	
 	
LIGHTHOUSE CAPITAL PARTNERS V, L.P.
	

 	

 	
 	
By:	
LIGHTHOUSE MANAGEMENT

PARTNERS V, L.L.C., its general partner
	
 By:	

/s/ Randall E. Woods
	
 	

By:	

/s/ Dennis Ryan

	
 Name:	

Randall E. Woods
	
 	

Name:	

Dennis Ryan

	
 Title:	

President and CEO
	
 	

Title:	

Chief Financial Officer

2

 
EXHIBIT A
WARRANT

        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. 

PREFERRED
STOCK PURCHASE WARRANT 

	Warrant No. PAWLH-2	 	Number of Shares: TBD

Shares: Preferred Stock

Subject to increase as set forth below

NOVACARDIA, INC.

Effective
as of July 14, 2006 

Void
after July 14, 2013 

        1.    Issuance.    This Preferred Stock Purchase Warrant
(the "Warrant") is issued to LIGHTHOUSE CAPITAL PARTNERS V, L.P. by  NOVACARDIA INC., a
Delaware corporation (hereinafter with its successors called
the "Company"). 

        2.    Purchase Price; Number of Shares.    

        (a)   The registered holder of this Warrant (the "Holder"), commencing
on the date hereof, is entitled upon surrender of this Warrant with the subscription form annexed hereto duly executed, at the principal office of the Company, to purchase from the Company, that
number of fully paid and nonassessable shares of Preferred Stock equal to (A) 5% of the Aggregate Advances multiplied by the number of full calendar months (or pro rata portion of
such amount for any partial calendar month, based on a 30-day month) (but in any event at least $150,000, regardless of whether there are any Advances under the Bridge Loan
Commitment), divided by (B) the Purchase Price. This Warrant will not become exercisable for Series A Preferred Stock unless and until the Next Round of Financing has not closed by
December 31, 2006 (the "Financing Cutoff Date"). If Holder exercises all or a portion of this Warrant prior to the closing of the Next
Round of Financing or Financing Cutoff Date, then the Holder will be entitled to receive shares of the Next Round Stock, when and if such shares of Next Round Stock are issued in the Next Round
Financing. 

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        In
addition to other terms which may be defined herein, the following terms, as used in this Warrant, shall have the following meanings: 

        (i)    "Aggregate Advances" means the aggregate original dollar amount of all
Advances made under the Bridge Loan Note, as defined in the Loan Agreement. 

        (ii)   "Loan Agreement" means that certain Loan and Security Agreement
No. 4611 dated March 21, 2005 between the Company and Lighthouse Capital Partners V, L.P., as amended by Amendment No, 1 to Loan and Security Agreement No. 4611 dated as of
the date hereof. 

        (iii) "Next Round Financing" means the Company's next bona fide round
of preferred stock equity financing resulting in net aggregate proceeds to the Company in an amount equal to or in excess of $5,000,000. 

        (iv)  "Next Round Stock" means any new series of the Company's preferred
equity securities issued in connection with the Next Round Financing. 

        (v)   "Preferred Stock" means those shares of Next Round Stock or
Series A Preferred Stock, as the case may be, issued or issuable upon exercise of this Warrant. 

        (vi)  "Purchase Price" means (i) if this Warrant is exercisable for
shares of Next Round Stock, the lowest price per share paid by an investor for a share of Next Round Stock in connection with the Next Round Financing or (ii) if this Warrant is exercisable for
shares of Series A Preferred Stock, $0.84 per share. 

        (vii) "Series A Preferred Stock" means the Company's Series A
Preferred Stock, $0.001 par value per share. 

        If
prior to the closing of the Next Round Financing, the Company enters into a Reorganization (as hereinafter defined), then the Warrant shall be treated as if it is exercisable
for Series A Preferred Stock and the Purchase Price shall be $0.84 per share. 

        Any
capitalized 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 Preferred Stock is issued hereunder shall be deemed to have become the holder of record of the shares
represented thereby as at the close of business on the date this Warrant is exercised with respect to such shares, whether or not the transfer books of the Company shall be closed. 

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

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        4.    Net Issue Election.    The Holder may elect to receive, without
the payment by the Holder of any additional consideration, shares of Preferred 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 Preferred Stock as is computed using the following formula: 

	 	X =	Y(A-B)
 A	 

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

Y =	
 	

the number of shares of Preferred 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 Preferred Stock, as determined at the time the net issue election is made pursuant to this Section 4.
	

 	
 	

B =	
 	

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

        "Fair Market Value" of a share of Preferred Stock (or fully paid and nonassessable shares of the Company's common stock, $0.001 par
value (the "Common Stock") if the preferred Stock has been automatically converted into Common Stock) as of the date that the net issue election
is made (the "Determination Date") shall mean: 

        (i)    If the net issue election is made in connection with and contingent upon the closing of the sale of the Company's Common
Stock to the public in a public offering pursuant to a Registration Statement under the 1933 Act (a "Public Offering"), and if the Company's
Registration Statement relating to such Public Offering ("Registration Statement") has been declared effective by the Securities and Exchange
Commission, then the initial "Price to Public" specified in the final prospectus with respect to such offering multiplied by the number of shares of Common Stock into which each share of Preferred
Stock is then convertible. 

        (ii)   If the net issue election is not made in connection with and contingent upon a Public Offering, then as follows: 

        a)    If traded on a securities exchange or the Nasdaq National 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 over the five day period ending five trading days prior to the Determination Date,
and the fair market value of the Preferred Stock shall be deemed to be such fair market value of the Common Stock multiplied by the number of shares of Common Stock into which each share of Preferred
Stock is then convertible; 

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        b)    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 over the five day period ending five trading days prior to the Determination Date, and the fair market value of the Preferred
Stock shall be deemed to be such fair market value of the Common Stock multiplied by the number of shares of Common Stock into which each share of Preferred Stock is then convertible; and 

        c)     If there is no public market for the Common Stock, then fair market value shall be determined in good faith by the
Company's Board of Directors. 

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

        6.    Fractional Shares.    In no event shall any fractional share of
Preferred 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 Preferred Stock, then the Company shall, in lieu of such fractional share, make a cash
payment for such fractional share on the basis of the Purchase Price then in effect. 

        7.    Expiration Date; Automatic Exercise.    This Warrant shall
expire at the close of business on July 14, 2013, and shall be void thereafter (the "Expiration Date"). 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 the preceding sentence, provided, however, that the Company shall have no obligation to issue any
shares of Preferred Stock hereunder until the Holder has surrendered this Warrant to the Company as provided herein. 

        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 Preferred Stock and Common Stock free from all preemptive or similar rights
therein, as will be sufficient to permit, respectively, the exercise of this Warrant in full and the conversion into shares of Common Stock of all shares of Preferred Stock receivable upon such
exercise. The Company further covenants that such shares as may be issued pursuant to such exercise and/or conversion 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 Preferred Stock, by split-up or otherwise, or combine the Preferred Stock, or issue additional shares of Preferred Stock in payment of a stock dividend on the
Preferred Stock, the number of shares of Preferred 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. 

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        10.    Adjustments for Diluting Issuances.    The other antidilution
rights applicable to the Preferred Stock and the Common Stock of the Company are set forth in the Company's Certificate of Incorporation, as amended from time to time
(the "Certificate"), a true and complete copy in its current form which is attached hereto as  Exhibit A. Such rights shall not be restated,
 amended or modified in any manner which affects the Holder differently from the other holders of
the same series of Preferred Stock into which this Warrant is exercisable without such Holder's prior written consent. The Company shall promptly provide the Holder hereof with any restatement,
amendment or modification to the Certificate promptly after the same has been made. For clarification, the "pay to play" provisions of the Certificate apply only to the holders of Preferred Stock and
not holders of warrants to acquire Preferred Stock. In no event shall the Preferred Stock be construed to mean Company's Series A-1 Preferred Stock upon or prior to the exercise
hereof. After exercise, the holder of the Preferred Stock shall have the same rights as other holders of the Preferred Stock as set forth in the Certificate. 

        11.    Mergers and Reclassifications.    If after the date hereof the
Company shall enter into any Reorganization (as hereinafter defined), then, as a condition of such Reorganization, lawful provisions shall be made, and duly executed documents evidencing the
same from the Company or its successor shall be delivered to the Holder, so that the Holder shall thereafter have the right to purchase, at a total price not to exceed that payable upon the exercise
of this Warrant in full, the kind and amount of shares of stock and other securities and property receivable upon such Reorganization by a holder of the number of shares of Preferred 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 Preferred 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 Preferred 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 

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dispose
of any shares of stock of any class or any other securities or property, or to receive any other right; 

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

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

then
in each such event the Company will provide or cause to be provided to the Holder a written notice thereof. Such notice shall be provided at least twenty (20) 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 Preferred 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 Preferred Stock upon the
exercise of this Warrant in accordance with the terms hereof will not, (i) violate or contravene the Certificate or bylaws, or any law, statute, regulation, rule, judgment or order applicable
to the Company, (ii) violate, contravene or result in a breach or default under any contract, agreement or instrument to which the Company is a party or by which the Company or any of its
assets are bound or (iii) require the consent or approval of or the filing of any notice or registration with any person or entity. 

        (d)   As long as this Warrant is, or any shares of Preferred Stock issued upon exercise of this Warrant or any shares of Common
Stock issued upon conversion of such shares of Preferred Stock are, issued and outstanding, the Company will provide to the Holder the financial and other information described in that certain
Loan Agreement. 

        (e)   As of the date hereof, the authorized capital stock of the Company consists of (i) 70,736,668 shares of Common
Stock, of which 2,076,219 shares are issued and outstanding, and (ii) 34,098,286 shares of Series A Preferred Stock, of which 26,190,477 are issued and outstanding shares;
and (iii) 34,098,286 shares of Series A-1 Preferred Stock, of which none are issued and outstanding shares. As of the date hereof, 357,143 shares of Series A
Preferred Stock are reserved for issuance upon the exercise of this Warrant and 357,143 shares of Common Stock are reserved for issuance upon the conversion of such Series A Preferred
Stock into Common Stock. Attached hereto as Exhibit B is a capitalization table summarizing the 

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capitalization
of the Company. Once per calendar quarter, the Company will provide Holder with a current capitalization table indicating changes, if any, to the number of outstanding shares of common
stock and preferred stock. 

        15.    Registration Rights.    The Company shall grant to the Holder
all the rights of a "Holder" under the Company's Investors' Rights Agreement dated as of August 18, 2003, as amended (the "Rights
Agreement"), including, without limitation, the registration rights contained therein, and agrees to amend the Rights Agreement so that (i) the shares of Common Stock
issuable upon conversion of the Shares of Preferred Stock issuable upon exercise of this Warrant shall be "Registrable Securities," and (ii) the
Holder shall be a "Holder" for all purposes of such Rights Agreement; provided, however, that if this Warrant is exercisable for Series A Preferred Stock, the Holder shall have the same rights
as the holders of Series A Preferred Stock and if the Warrant is exercisable for shares of Next Round Stock, then the Holder shall have the same rights as the holders of the Next Round Stock
and the Company shall not be obligated to seek an amendment to the Investors' Rights Agreement, to include as "Registrable Securities" thereunder the
shares of Common Stock issuable upon conversion of the Shares of Preferred Stock issuable upon exercise of this Warrant, until the earlier of the closing of the Next Round Financing or the Financing
Cutoff Date. 

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

        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 the Preferred Stock
issuable upon exercise of the Holder's rights contained herein will be acquired for investment and not with a view to the sale or distribution of any part thereof, and the Holder has no present
intention of selling or engaging in any public distribution of the same except pursuant to a registration or exemption. 

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

        (c)   Private Issue.    The Holder understands (i) that the
Preferred 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.    The Holder has such knowledge and experience in
financial and
business matters as to be capable of evaluating the merits and risks of its investment and has the ability to bear the economic risks of its investment. The Holder further acknowledges that it has had
access to all information concerning the Company which it has requested. 

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        18.    Notices, Transfers, Etc.    

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

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

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

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

        20.    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. 

        21.    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. 

        22.    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. 

        23.    Rights as Stockholders.    No holder of this Warrant, as such,
shall be entitled to vote or receive dividends or be deemed the holder of Preferred Stock or otherwise be entitled to any voting or other rights as a stockholder (other than rights granted under the
terms of this Warrant and as a "Holder" under the Rights 

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Agreement,
as "Holder" is defined in the Rights Agreement) of the Company, until this Warrant shall have been exercised and the shares purchasable upon the exercise shall have become deliverable, as
provided herein. 

        24.    Compliance with Securities Act.    The Holder of this Warrant,
by acceptance hereof, agrees that this Warrant, and the Preferred Stock to be issued upon exercise hereof (and Common Stock issuable upon conversion thereof), are being acquired for investment
purposes only and that such Holder will not offer, sell or otherwise dispose of this Warrant or any Preferred Stock to be issued upon exercise (and Common Stock issuable upon conversion
thereof), hereof except under circumstances which will not result in a violation of the 1933 Act. This Warrant and all Preferred Stock issued upon exercise of this Warrant (and Common Stock
issuable upon conversion thereof) (in each case, unless registered under the 1933 Act) shall be stamped or imprinted with a legend in substantially the following form: 

        THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). NO SALE OR DISPOSITION MAY BE EFFECTED WITHOUT (i) AN EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO OR (ii) AN OPINION OF COUNSEL FOR THE HOLDER, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED, EXCEPT THAT NO SUCH OPINION
SHALL BE REQUIRED IF SUCH SALE IS PURSUANT TO RULE 144 PROMULGATED UNDER THE ACT. 

        25.    Qualifying Public Offering.    If the Company shall effect a
firm commitment underwritten public offering of shares of Common Stock which results in the conversion of the Preferred Stock into Common Stock pursuant to the Certificate in effect immediately prior
to such offering, then, effective
upon such conversion, this Warrant shall change from the right to purchase shares of Preferred Stock to the right to purchase shares of Common Stock, and the Holder shall thereupon have the right to
purchase, at a total price equal to that payable upon the exercise of this Warrant in full, the number of shares of Common Stock which would have been receivable by the Holder upon the exercise of
this Warrant for shares of Preferred Stock immediately prior to such conversion of such shares of Preferred Stock into shares of Common Stock, and in such event 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, the provisions for the adjustment of the Purchase Price and of the number of
shares purchasable upon exercise of this Warrant and the provisions relating to the net issue election) shall thereafter be applicable to any shares of Common Stock deliverable upon the exercise
hereof. 

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        26.    Value.    The Company and the Holder agree that the value of
this Warrant on the date of grant is $100. Notwithstanding the foregoing, the Company shall be entitled to report a different value for the Warrant for tax purposes if its financial and tax advisors
advise the Company that a different value should be used for such purposes. 

	 	 	NOVACARDIA, INC.
	

 	
 	

By:	

	

 	
 	

Name:	

	

 	
 	

Title:	

12

   Subscription  

	
 To:	
 	

	
 	

 

	
 Date:	
 	

	
 	

 

        The
undersigned hereby subscribes for
                                         
                    shares of Preferred 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	
 	

 

1

   Net Issue Election Notice  

	
 To:	
 	

	
 	

Date:	
 	

        The
undersigned hereby elects under Section 4 to surrender the right to purchase shares of Preferred 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	
 	

 

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   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:	
 	

 
	

	
 	

 

1

   EXHIBIT A

Amended and Restated Certificate of Incorporation, as amended  

See attached pages.

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EXHIBIT B    
    
    Capitalization Table    
    

 
 

EXHIBIT B    
    
    BRIDGE NOTE

$3,000,000.00  

        This BRIDGE NOTE (this "Note") is made
                                         
                   , by NOVACARDIA, INC. ("Borrower")
in favor of  LIGHTHOUSE CAPITAL PARTNERS V, L.P. (collectively with its assigns, "Lender"). Initially
capitalized terms used and not otherwise defined herein are defined in that certain Loan and Security Agreement No. 4611 between Borrower and Lender dated March 21, 2005, as amended to
date (the "Loan Agreement"). 

        FOR VALUE RECEIVED, Borrower promises to pay in lawful money of the United States, to the order of Lender, at 500 Drake's
Landing Road, Greenbrae, California 94904, or such other place as Lender may from time to time designate ("Lender's Office"), on the Maturity Date, the
principal sum of $3,000,000.00 (the "Advance"), including interest on the unpaid balance at the Basic Rate and all other amounts due or to become
due hereunder according to the terms hereof and of the Loan Agreement. 

        "Basic Rate" means a fixed per annum rate of interest equal to 7%. 

        "Maturity Date" means the 60th day following the date hereof. 

        1.     Repayment.    Borrower shall pay principal and interest due hereunder in full on the Maturity Date. 

        2.     Interest.    Interest not paid when due will, to the maximum extent permitted under applicable law, become part
of principal, at Lender's option, and thereafter bear like interest as principal. Interest shall be computed on the basis of a 360 day year. All Obligations not paid when due shall bear
interest at the Default Rate unless waived in writing by Lender. All amounts paid hereunder will be applied to the Obligations in Lender's discretion and as provided in the Loan Agreement. 

        3.     Voluntary Prepayment.    This Note can be prepaid in whole or in part. 

        4.     Collateral.    This Note is secured by the Collateral. 

        5.     Waivers.    Borrower, and all guarantors and endorsers of this Note, regardless of the time, order or place of
signing, hereby waive notice, demand, presentment, protest, and notices of every kind, presentment for the purpose of accelerating maturity, diligence in collection, and, to the fullest extent
permitted by law, all rights to plead any statute of limitations as a defense to any action on this Note. 

        6.     Choice of Law; Venue.    THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF
THE STATE OF CALIFORNIA WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF BORROWER AND LENDER HEREBY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN THE CITY
AND COUNTY OF SAN FRANCISCO, STATE OF CALIFORNIA. BORROWER AND LENDER EACH  

HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS NOTE. EACH PARTY FURTHER WAIVES
ANY RIGHT TO CONSOLIDATE ANY ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.

        7.     Miscellaneous.    THIS NOTE MAY BE MODIFIED ONLY BY A WRITING SIGNED BY BORROWER AND
LENDER. Each provision hereof is severable from every other provision hereof and of the Loan Agreement when determining its legal enforceability. Sections and subsections are
titled for convenience, and not for construction. "Hereof," "herein," "hereunder," and similar words refer to this Note in its entirety. "Or" is not necessarily exclusive. "Including" is not limiting.
The terms and conditions hereof inure to the benefit of and are binding upon the parties' respective permitted successors and assigns. This Note is subject to all the terms and conditions of the
Loan Agreement. 

        IN WITNESS WHEREOF, Borrower has caused this Note to be executed by a duly authorized officer as of the day and year first
above written. 

	 	 	 	NOVACARDIA, INC.
	
    	

 	
 	

 	

 
	
    	

 	
 	

By:	

	
    	

 	
 	

Name:	

Randall E. Woods

	
    	

 	
 	

Title:	

President and CEO

QuickLinks

Exhibit 10.18

AMENDMENT NO. 01 (" Amendment ") TO LOAN AND SECURITY AGREEMENT NO. 4611

EXHIBIT B Capitalization Table

EXHIBIT B BRIDGE NOTE

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