LOAN AGREEMENT among BOSTON SCIENTIFICCORPORATION as Purchaser, and CORAUTUS GENETICS INC. and VASCULAR GENETICS INC. as Issuers Dated as of July 30, 2003 TABLE OF CONTENTS

Exhibit 10.3

LOAN AGREEMENT
 
among
 
  BOSTON SCIENTIFIC CORPORATION
 
as Purchaser,
 
and
 
CORAUTUS GENETICS INC.
 
and
 
VASCULAR GENETICS INC.
 
as Issuers
 
Dated as of July 30, 2003

TABLE OF CONTENTS

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Exhibit A -       Form of Senior Convertible Promissory Note

Exhibit B -        Form of Notice of Borrowing

Exhibit C -        Form of Opinion of Counsel to the Company

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Exhibit 10.3

LOAN AGREEMENT

                     LOAN AGREEMENT (this “Agreement”) is made and entered into this 30^th day of July, 2003, among CORAUTUS GENETICS INC., a Delaware corporation (“Parent”), and its wholly-owned subsidiary, VASCULAR GENETICS INC., a Delaware corporation (“VGI” and, together with the Parent, the “Issuers”), and BOSTON SCIENTIFIC CORPORATION, a Delaware corporation (the “Purchaser” and, together with the Issuers, the “Parties”).

                     WHEREAS, pursuant to the Investment Agreement, dated July 30, 2003, between Parent and Purchaser (the “Investment Agreement”), Parent and Purchaser agreed, subject to the conditions set forth in the Investment Agreement, to enter into this Agreement, an Investor Rights Agreement, a Development Agreement (the “Development Agreement”), a Distribution Agreement and a Patent Sublicense Agreement (collectively, with this Agreement and the Investment Agreement, the “Transaction Documents”); and

                     WHEREAS, the Purchaser is willing to fund the Issuers’ research and development and clinical trials conducted in accordance with the Development Agreement, by subscribing for, subject to the terms and conditions of this Agreement, up to three senior convertible promissory notes of the Issuers, each in principal amount of U.S. $5,000,000;

                     NOW, THEREFORE, in consideration of the premises and the mutual representations and warranties, agreements and covenants hereinafter set forth, the Parties hereby agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

                     SECTION 1.01  Certain Defined Terms.  As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

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                     SECTION 1.02  Additional Definitions.  The following terms have the meanings assigned to such terms in the corresponding Sections set forth below:

                     SECTION 1.03   Interpretation and Rules of Construction.  In this Agreement, except to the extent that the context otherwise requires:

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                     SECTION 1.04   Accounting Terms.  All accounting terms not specifically defined herein shall be construed in accordance with United States generally accepted accounting principles (“GAAP”).

ARTICLE II

SUBSCRIPTION FOR THE NOTES

                     SECTION 2.01   Issuance of Notes.  Upon the terms and subject to the conditions contained in this Agreement, the Purchaser agrees to subscribe for up to three senior convertible promissory notes of the Issuers, each in principal amount of U.S. $5,000,000 and in the form attached as Exhibit A hereto (each a “Note”).

                     SECTION 2.02  Request for Funding.  The Issuers shall make any request of the Purchaser to subscribe for a Note by delivering a notice to the Purchaser, given not later than 3:00 P.M. (New York City time) ten (10) Business Days prior to the date of the proposed issuance of the Note by the Issuers. Each such notice (a “Notice of Borrowing”) shall be made in writing, in substantially the form of Exhibit B hereto, specifying therein the requested date of

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such issuance. Each Notice of Borrowing shall be irrevocable and binding on the Issuers. Subject to the terms and conditions of this Agreement, the Purchaser shall, before 3:00 P.M. (New York City time) on the date of issuance, make such funds available to the Issuers as directed in the Notice of Borrowing.

ARTICLE III

CONDITIONS TO SUBSCRIPTIONS

                     SECTION 3.01   Conditions Precedent to Subscription for Each Note.  The obligation of the Purchaser to subscribe for any Note shall be subject to the satisfaction (or waiver by the Purchaser in its sole discretion) of the conditions set forth in this Article III, and each of the giving by the Issuers of the applicable Notice of Borrowing and the acceptance by Issuers of the proceeds of such Note subscription shall constitute a joint and several representation and warranty by the Issuers that on the date of the issuance of such Note each of the following statements are true and correct in all respects):

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ARTICLE IV

TERMINATION

                   SECTION 4.01   Termination.    This Agreement shall terminate automatically upon any of (a) the termination of any of the other Transaction Documents or (b) a Change of Control. Upon termination of this Agreement, the Purchaser shall have no further obligation to subscribe for any Notes hereunder.

ARTICLE V

MISCELLANEOUS

                   SECTION 5.01   Public Announcements and Publications.   Except as required by Law or by the requirements of any securities exchange on which the securities of a Party hereto are listed, no Party shall make, or cause to be made, any press release or public announcement in respect of this Agreement or the transactions contemplated hereby or otherwise communicate with any news media in respect of this Agreement or the transactions contemplated hereby without the prior written consent of the other Party, and the Parties shall cooperate as to the timing and contents of any such press release or public announcement.

                   SECTION 5.02   Amendments, Etc.   No amendment or waiver of any provision of this Agreement, nor consent to any departure by the Issuers or the Purchaser therefrom, shall in

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any event be effective unless the same shall be in writing and signed by the other Party, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

                   SECTION 5.03   Notices.    All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by an internationally recognized overnight courier service, by telecopy or registered or certified mail (postage prepaid, return receipt requested) to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 5.03):

                   Any notice, if mailed and properly addressed with postage prepaid or if properly addressed and sent by pre-paid courier service, shall be deemed given when received; any notice, if transmitted by facsimile, shall be deemed given when the confirmation of transmission thereof is received by the transmitter.

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                   SECTION 5.04   No Waiver; Remedies.   No failure on the part of the Purchaser to exercise, and no delay in exercising, any right hereunder or under this Agreement shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right.

                   SECTION 5.05   Treatment of Note.   To the extent permitted by generally accepted accounting principles, the Issuers will treat, account and report this Note as debt and not equity for accounting purposes and with respect to any returns filed with federal, state or local tax authorities.

                   SECTION 5.06   Costs and Expenses. Except as otherwise specified in this Agreement or a Note, all costs and expenses, including, without limitation, fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the Party incurring such costs and expenses.

                   SECTION 5.07 Binding Effect.   This Agreement shall become effective when it shall have been executed by the Parties and thereafter shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns, except that the Issuers shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of the Purchaser.

                   SECTION 5.08   Survival.   The representations, warranties, covenants and agreements made herein and in connection with the issuance of any Note shall survive any investigation made by Purchaser and the closing of the transactions contemplated hereby.

                   SECTION 5.09   Severability.   If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any Law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect for so long as the economic or legal substance of the transactions contemplated by this Agreement is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner in order that the transactions contemplated by this Agreement are consummated as originally contemplated to the greatest extent possible.

                   SECTION 5.10   Entire Agreement.   The Transaction Documents constitute the entire agreement of the Parties with respect to the subject matter hereof and thereof and supersede all prior agreements and undertakings, both written and oral, among the Parties with respect to the subject matter hereof and thereof.

                   SECTION 5.11   No Third Party Beneficiaries.   This Agreement shall be binding upon and inure solely to the benefit of the Parties and their permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever.

                   SECTION 5.12   Governing Law; Jurisdiction and Enforcement.   This Agreement shall be governed by the Laws of the State of New York. All actions and proceedings arising out

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of or relating to this Agreement shall be heard and determined in any New York state or federal court sitting in the City of New York. The Parties hereto hereby (a) submit to the exclusive jurisdiction of any state or federal court sitting in The City of New York for the purpose of any action arising out of or relating to this Agreement brought by any Party hereto and (b) irrevocably waive, and agree not to assert by way of motion, defense, or otherwise in any such action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the action is brought in an inconvenient forum, that the venue of the action is improper, or that this Agreement may not be enforced in or by any of the above-named courts.

                   SECTION 5.13   Dispute Resolution.   Except to the limited extent necessary to obtain interim relief, including injunctive relief, to preserve the status quo or prevent irreparable harm, neither Party shall file an action or institute legal proceedings with respect to any dispute, controversy, or claim arising out of this Agreement or the validity, interpretation, breach or termination thereof, including claims seeking redress or asserting rights under any Law, until:

                   SECTION 5.14   Counterparts.   This Agreement may be executed and delivered (including by facsimile transmission) in one or more counterparts, and by the different Parties in separate counterparts, each of which when executed shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by facsimile shall be effective as delivery of a manually executed counterpart of this Agreement.

                   SECTION 5.15   Waiver of Jury Trial.   The Parties hereby knowingly, voluntarily and irrevocably waive all right to trial by jury in any action, proceeding or counterclaim (whether based on contract, tort or otherwise) arising out of or relating to this Agreement or any course of conduct, course of dealing or statements (whether oral or written) or actions of the Purchaser in the negotiation, administration, performance or enforcement thereof.

[Signature Page Follows]

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                   IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.

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EXHIBIT A

FORM OF SENIOR CONVERTIBLE PROMISSORY NOTE

EXHIBIT B

FORM OF NOTICE OF BORROWING

EXHIBIT C

FORM OF OPINION OF COUNSEL TO THE COMPANY