CoTherix, Inc. 2004 Equity Incentive Plan Notice of Stock Option Grant

Name of Optionee:

«Name»

Total Number of Shares:

«Total Shares»

Type of Option:

Nonstatutory Stock Option (NSO)

Exercise Price Per Share:

$«PricePerShare»

Date of Grant:

«Date of Grant»

Date Exercisable

This option may be exercised at any time after the Date of Grant for all or any part of the Shares subject to this option.

Vesting Commencement Date:

«Date of Vesting Commencement»

Vesting Schedule:

The Shares subject to this option shall vest with respect to [25][8.33]% of the Shares when you complete each 3-month period of continuous “Service” (as defined in the Plan) from the Vesting Commencement Date. The Shares are subject to a right of repurchase by the Company if exercised early.

Expiration Date:

«Expiration Date». This option expires earlier if your Service terminates earlier, as described in the Stock Option Agreement.

By:   

Title:

When you wish to exercise this option, you must comply with the Company’s Insider Trading Policy and notify the Company by filing the proper “Notice of Exercise” form at the address given on the form. Your notice must specify how many shares you wish to purchase. Your notice must also specify how your shares should be registered. Provided you are in compliance with the Company’s Insider Trading Policy, the notice will be effective when the Company receives it.

If someone else wants to exercise this option after your death, that person must prove to the Company’s satisfaction that he or she is entitled to do so.

When you submit your notice of exercise, you must include payment of the option exercise price for the shares that you are purchasing. To the extent permitted by applicable law, payment may be made in one (or a combination of two or more) of the following forms:

•      Your personal check, a cashier’s check or a money order.

•      Certificates for shares of Company stock that you own, along with any forms needed to effect a transfer of those shares to the Company. The value of the shares, determined as of the effective date of the option exercise, will be applied to the option exercise price. Instead of surrendering shares of Company stock, you may attest to the ownership of those shares on a form provided by the Company and have the same number of shares subtracted from the option shares issued to you.

This option will fully vest and any effective Right of Repurchase will lapse entirely if either of the following events occurs:

•      Your Service terminates because of retirement at or after age 65, total and permanent disability, or death, or

•      The Company is subject to a “change in control” (as defined in the Plan) before your Service terminates.

For all purposes under this Agreement, “total and permanent disability” means that you are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted, or can be expected to last, for a continuous period of not less than one year.

In no event will vesting continue after your Service has terminated for any reason.

You, or your estate or heirs, have no rights as a stockholder of the Company until you have exercised this option by giving the required notice to the Company and paying the exercise price. No adjustments are made for dividends or other rights if the applicable record date occurs before you exercise this option, except as described in the Plan.

If the Right of Repurchase is exercised and the Company makes available the Repurchase Price, then you shall no longer have any rights as a holder of the Restricted Shares (other than the right to receive payment of the Repurchase Price). The Restricted Shares will be deemed to have been repurchased whether or not the certificate(s) therefore have been delivered to the Company.

In the event of a stock split, a stock dividend or a similar change in Company stock, the number of shares covered by this option and the exercise price per share may be adjusted pursuant to the Plan.

In the event of a merger or consolidation of the Company with or into another entity, any other corporate reorganization, a stock split, the declaration of a stock dividend, the declaration of an extraordinary dividend payable in a form other than stock, a spin-off, an adjustment in conversion ratio, a recapitalization or other similar transaction affecting the Company’s outstanding securities, any securities or other property (including cash or cash equivalents) that are by reason of such transaction exchanged for, or distributed with respect to, any Restricted Shares shall immediately be subject to the Right of Repurchase and shall immediately be delivered to the Company to be held in escrow. Appropriate adjustments shall be made to the number and/or class of the Restricted Shares and to the price per share to be paid upon exercise of the Right of Repurchase, provided that the aggregate Repurchase Price shall remain the same. In the event of a merger or consolidation of the Company with or into another entity or any other corporate reorganization, the Right of Repurchase may be exercised by the Company’s successor.

Prior to your death, only you may exercise this option. You cannot transfer or assign this option. For instance, you may not sell this option or use it as security for a loan. If you attempt to do any of these things, this option will immediately become invalid. You may, however, dispose of this option in your will or a beneficiary designation.

Regardless of any marital property settlement agreement, the Company is not obligated to honor a notice of exercise from your former spouse, nor is the Company obligated to recognize your former spouse’s interest in your option in any other way.

You may not transfer, assign, encumber or otherwise dispose of any Restricted Shares without the Company’s written consent, except as provided in the next sentence. You may transfer Restricted Shares to one or more members of your immediate family or to a trust established by you for the benefit of you and/or one or more members of your immediate family, provided in either case that the transferee agrees in writing on a form prescribed by the Company to be bound by all provisions of this Agreement. If you transfer any Restricted Shares, then this Agreement shall apply to the transferee to the same extent as to you.

For all purposes under this Agreement, your “immediate family” includes your children, stepchildren, grandchildren, parents, stepparents, grandparents, spouse, siblings, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law and shall include adoptive relationships.

The text of the Plan is incorporated in this Agreement by reference. Capitalized terms not otherwise defined in this Agreement shall be defined as set forth in the Plan.

This Agreement and the Plan constitute the entire understanding between you and the Company regarding this option. Any prior agreements, commitments or negotiations concerning this option are superseded. This Agreement may be amended only by another written agreement between the parties.