Exhibit 10.12
                                INTERCARDIA, INC.

                  1995 EMPLOYEE STOCK PURCHASE PLAN, AS AMENDED


            1. Purpose. The Intercardia, Inc. 1995 Employee Stock Purchase Plan
(the "Plan") is established to provide eligible employees of Intercardia Inc., a
Delaware corporation, and any successor corporation thereto (collectively,
"Intercardia"), and any current or future parent corporation or subsidiary
corporations of Intercardia as the Board of Directors of Intercardia (the
"Board") shall from time to time designate (collectively referred to as the
"Company" and individually referred to as a "Participating Company"), with an
opportunity to acquire a proprietary interest in the Company by the purchase of
common stock of Intercardia. For purposes of the Plan, a parent corporation and
a subsidiary corporation shall be as defined in sections 424(e) and 424(f),
respectively, of the Internal Revenue Code of 1986, as amended (the "Code").

            Intercardia intends that the Plan shall qualify as an "employee
stock purchase plan" under section 423 of the Code (including any amendments or
replacements of such section), and the Plan shall be so construed. Any term not
expressly defined in the Plan but defined for purposes of section 423 of the
Code shall have the same definition herein.

            An employee participating in the Plan (a "Participant") may withdraw
such Participant's accumulated payroll deductions (if any) and terminate
participation in the Plan or any Offering (as defined below) therein at any time
during a Purchase Period (as defined below). Accordingly, each Participant is,
in effect, granted an option pursuant to the Plan (a "Purchase Right") which may
or may not be exercised at the end of a Purchase Period.

            2. Administration. The Plan shall be administered by the Board
and/or by a duly appointed committee of the Board having such powers as shall be
specified by the Board. Any subsequent references to the Board shall also mean
the committee if a committee has been appointed. All questions of interpretation
of the Plan or of any Purchase Right shall be determined by the Board and shall
be final and binding upon all persons having an interest in the Plan and/or any
Purchase Right. Subject to the provisions of the Plan, the Board shall determine
all of the relevant terms and conditions of Purchase Rights granted pursuant to
the Plan; provided, however, that all Participants granted Purchase Rights
pursuant to the Plan shall have the same rights and privileges within the
meaning of section 423(b)(5) of the Code. All expenses incurred in connection
with the administration of the Plan shall be paid by the Company.

            3. Share Reserve. The maximum number of shares which may be issued
under the Plan shall be Two Hundred Thousand (200,000) shares of Intercardia's
authorized but unissued common stock, $.001 par value (the "Shares"). In the
event that any Purchase Right for any reason expires or is canceled or
terminated, the Shares allocable to the unexercised portion of such Purchase
Right may again be subjected to a Purchase Right.

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            4. Eligibility. Any employee of a Participating Company is eligible
to participate in the Plan except employees who:

                  (a)   customarily work less than 20 hours per week;

                  (b) customarily work not more than five months in any calendar
year; or

                  (c) as of the start of an Offering, own stock of Intercardia
(or its parent or subsidiary corporations) and/or own or hold options to
purchase or who, as a result of participation in the Plan, would own or hold
options to purchase, stock of Intercardia (or its parent or subsidiary
corporations), possessing five percent (5%) or more of the total combined voting
power or value of all classes of stock of Intercardia (or its parent or
subsidiary corporations) within the meaning of section 423(b)(3) of the Code.

            Notwithstanding anything herein contained to the contrary, any
individual performing services for a Participating Company solely through a
leasing agency or employment agency shall not be deemed an "employee" of such
Participating Company.

            5.    Offering Dates.

                  (a) Offering Periods. Except as otherwise set forth below, the
Plan shall be implemented by offerings (individually, an "offering") of
approximately twelve (12) months duration (an "Offering Period"). The "Initial
Offering Date" is the date immediately preceding the effective date of a
registration statement filed with the Securities and Exchange Commission
relating to an initial public offering of Intercardia's securities. The Initial
Offering Period shall commence on the Initial Offering Date and shall end on the
first September 30 following the Initial Offering Date which is at least six
months after the Initial Offering Date (the "Initial Offering Termination
Date"). Subsequent Offerings shall commence on October 1 and end on the
September 30 occurring thereafter. Notwithstanding the foregoing, the Board may
establish a different term for one or more Offerings and/or different commencing
and/or ending dates for such Offerings. An employee who becomes eligible to
participate in the Plan after an Offering Period has commenced shall not be
eligible to participate in such Offering but may participate in any subsequent
Offering provided such employee is still eligible to participate in the Plan as
of the commencement of any such subsequent Offering. Eligible employees may not
participate in more than one Offering at a time. The first day of an Offering
Period shall be the "Offering Date" for such Offering Period. In the event the
first and/or last day of an Offering Period is not a business day, Intercardia
shall specify the business day that will be deemed the first or last day, as the
case may be, of the Offering Period.

                  (b) Purchase Periods. Each Offering Period, except for the
Initial Offering Period, shall consist of two (2) consecutive purchase periods
of six (6) months duration (individually, a "Purchase Period"). The last day of
each Purchase Period shall be the "Purchase


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Date" for such Purchase Period. The Initial Offering Period shall consist of one
Purchase Period, commencing on the Initial Offering Date and ending on the
Initial Offering Termination Date. Each Purchase Period commencing on April 1
shall end on the next September 30 and each Purchase Period commencing on
October 1 shall end on the next March 31. Notwithstanding the foregoing, the
Board may establish a different term for one or more Purchase Periods and/or
different commencing dates and/or Purchase Dates for such Purchase Periods. In
the event the first and/or last day of a Purchase Period is not a business day,
Intercardia shall specify the business day that will be deemed the first or last
day, as the case may be, of the Purchase Period.

                  (c) Governmental Approval; Stockholder Approval.
Notwithstanding any other provision of the Plan to the contrary, any Purchase
Right granted pursuant to the Plan shall be subject to (i) obtaining all
necessary governmental approvals and/or qualifications of the sale and/or
issuance of the Purchase Rights and/or the Shares, and (ii) obtaining
stockholder approval of the Plan. Notwithstanding the foregoing, stockholder
approval shall not be necessary in order to grant any Purchase Right granted in
the Plan's Initial Offering Period; provided, however, that the exercise of any
such Purchase Right shall be subject to obtaining stockholder approval of the
Plan.

            6. Participation in the Plan.

                  (a) Initial Participation. An eligible employee shall become a
Participant on the first Offering Date after satisfying the eligibility
requirements and delivering to the Company's payroll office not later than the
close of business for such payroll office on the last business day before such
Offering Date (the "Subscription Date") a subscription agreement indicating the
employee's election to participate in the Plan and authorizing payroll
deductions. An eligible employee who does not deliver a subscription agreement
to the Company's payroll office on or before the Subscription Date shall not
participate in the Plan for that Offering Period or for any subsequent Offering
Period unless such employee subsequently enrolls in the Plan by filing a
subscription agreement with the Company by the Subscription Date for such
subsequent Offering Period. The Company may, from time to time, change the
Subscription Date as deemed advisable by the Company in its sole discretion for
proper administration of the Plan.

                  (b) Continued Participation. A Participant shall automatically
participate in the Offering Period commencing immediately after the final
Purchase Date of each Offering Period in which the Participant participates
until such time as such Participant (i) ceases to be eligible as provided in
paragraph 4, (ii) withdraws from the Plan pursuant to paragraph 11(b) or (iii)
terminates employment as provided in paragraph 12. If a Participant is
automatically withdrawn from an Offering at the end of a Purchase Period of such
Offering pursuant to paragraph 11(d), then the Participant shall automatically
participate in the next Offering Period. If a Participant automatically may
participate in a subsequent Offering Period pursuant to this paragraph 6(b),
then the Participant is not required to file any additional subscription
agreement for such subsequent Offering Period in order to continue participation
in


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the Plan. However, a Participant may file a subscription agreement with respect
to a subsequent Offering Period if the Participant desires to change any of the
Participant's elections contained in the Participant's then effective
subscription agreement.

            7. Right to Purchase Shares. Except as set forth below, during an
Offering Period each Participant in such Offering Period shall have a Purchase
Right consisting of the right to purchase the lesser of:

                  (a) that number of whole Shares arrived at by dividing Fifty
Thousand Dollars ($50,000.00) by the fair market value of a share of the common
stock of Intercardia on the Offering Date of such Offering Period; and

                  (b) 10,000 Shares.

                  The fair market value of Shares shall be determined in
accordance with paragraph 8 below. Shares may only be purchased through a
Participant's payroll withholding pursuant to paragraph 9 below. In no event
shall a Participant's Purchase Right permit such Participant to acquire more
Shares in any calendar year than is permitted under Section 10(a) hereof.

            8. Purchase Price. The purchase price at which Shares may be
acquired in a given Purchase Period pursuant to the exercise of all or any
portion of a Purchase Right granted under the Plan (the "Offering Exercise
Price") shall be set by the Board; provided, however, that the Offering Exercise
Price shall not be less than eighty-five percent (85%) of the lesser of (i) the
fair market value of the Shares on the Offering Date of the Offering Period of
which the Purchase Period is a part, or (ii) the fair market value of the Shares
on the Purchase Date for such Purchase Period; provided, however that the fair
market value of the Shares on the Initial Offering Date shall be deemed to be
the initial public offering price of Intercardia's Common Stock. Unless
otherwise provided by the Board prior to the commencement of an Offering Period,
the Offering Exercise Price for each Purchase Period in that Offering Period
shall be eighty-five percent (85%) of the lesser of (i) the fair market value of
the Shares on the Offering Date of such Offering Period or (ii) the fair market
value of the Shares on the given Purchase Date. The fair market value of the
Shares on the applicable dates shall be the closing sales price on the Nasdaq
National Market (or the average of the closing bid and asked prices if the
Shares are so quoted instead) or as reported on such other national or regional
securities exchange or market system if the Shares are traded on such other
exchange or system instead, or as determined by the Board if the Shares are not
so reported. If the relevant date does not fall on a day on which the common
stock of Intercardia is quoted on the Nasdaq National Market or such other
national or regional securities exchange or market, the date on which the fair
market value per Share shall be established shall be the last day on which the
common stock of Intercardia was so quoted to such relevant date.


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            9. Payment of Purchase Price. Shares which are acquired pursuant to
the exercise of all or any portion of a Purchase Right may be paid for only by
means of payroll deductions from the Participant's Compensation during the
Offering Period. For purposes of the Plan, a Participant's "Compensation" with
respect to an Offering (i) shall include the Participant's base salary before
deduction for any contributions to any plan maintained by a Participating
Company and described in section 401(k) or section 125 of the Code, commissions,
overtime and bonuses and (ii) shall not include annual awards, other incentive
payments, shift premiums, long-term disability, worker's compensation or any
other payments not specifically referenced in (i). Except as set forth below,
the amount of Compensation to be withheld from a Participant's Compensation
during each pay period shall be determined by the Participant's subscription
agreement.

                  (a) Election to Decrease, Increase or Stop Withholding. During
an Offering Period, a Participant may elect to decrease the amount withheld, or
stop withholding, from his or her Compensation by filing as amended subscription
agreement with the Company on or before the "Change Notice Date." The "Change
Notice Date" shall initially be the seventh (7th) day prior to the end of the
first pay period for which such election is to be effective; however, the
Company may change such Change Notice Date from time to time. A Participant may
elect to increase the amount withheld from the Participant's Compensation once
during any Purchase Period.

                  (b) Limitations on Payroll Withholding. The amount of payroll
withholding with respect to the Plan for any Participant during any pay period
shall be in one percent (1%) increments not to exceed ten percent (10%) of the
Participant's Compensation for such pay period. Notwithstanding the foregoing,
the Board may change the limits on payroll withholding effective as of a future
Offering Date, as determined by the Board. Amounts withheld shall be reduced by
any amounts contributed by the Participant and applied to the purchase of
Company stock pursuant to any other employee stock purchase plan qualifying
under section 423 of the Code.

                  (c) Payroll Withholding. Payroll deductions shall commence on
the first payday following the Offering Date and shall continue to the end of
the Offering Period unless sooner altered or terminated as provided in the Plan.

                  (d) Participant Accounts. Individual accounts shall be
maintained for each Participant. All payroll deductions from a Participant's
Compensation shall be credited to such account and shall be deposited with the
general funds of the Company. All payroll deductions received or held by the
Company may be used by the Company for any corporate purpose.

                  (e) No Interest Paid. Interest shall not be paid on sums
withheld from a Participant's Compensation, unless the Board elects to make such
payments to all Participants on a non-discriminatory basis.


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                  (f) Exercise of Purchase Right. On each Purchase Date of an
Offering Period, each Participant who has not withdrawn from the Offering or
whose participation in the Offering has not terminated on or before such
Purchase Date shall automatically acquire pursuant to the exercise of the
Participant's Purchase Right the number of whole Shares arrived at by dividing
the total amount of the Participant's accumulated payroll deductions for the
Purchase Period by the Offering Exercise Price; provided, however, in no event
shall the number of Shares purchased by the Participant exceed the number of
Shares subject to the Participant's Purchase Right or the limitations imposed by
Section 10(a) hereof. No Shares shall be purchased on a Purchase Date on behalf
of a Participant whose participation in the Offering or the Plan has terminated
on or before such Purchase Date.

                  (g) Return of Cash Balance. Any cash balance remaining in the
Participant's account shall be refunded to the Participant as soon as
practicable after the Purchase Date. In the event the cash to be returned to a
Participant pursuant to the preceding sentence is an amount less than the amount
necessary to purchase a whole Share, the Company may establish procedures
whereby such cash is maintained in the Participant's account and applied toward
the purchase of Shares in the subsequent Purchase Period or Offering Period.

                  (h) Tax Withholding. At the time the Purchase Right is
exercised, in whole or in part, or at the time some or all of the Shares are
disposed of, the Participant shall make adequate provision for the foreign,
federal and state tax withholding obligations of the Company, if any, which
arise upon exercise of the Purchase Right and/or upon disposition of Shares,
respectively. The Company may, but shall not be obligated to, withhold from the
Participant's Compensation the amount necessary to meet such withholding
obligations.

                  (i) Company Established Procedures. The Company may, from time
to time, establish or change (i) a minimum required withholding amount for
participation in an Offering, (ii) limitations on the frequency and/or number of
changes in the amount withheld during an Offering, (iii) an exchange ratio
applicable to amounts withheld in a currency other than U.S. dollars, (iv)
payroll withholding in excess of or less than the amount designated by a
Participant in order to adjust for delays or mistakes in the Company's
processing of subscription agreements, (v) the date(s) and manner by which the
fair market value of the Shares is determined for purposes of administration of
the Plan and/or (vi) such other limitations or procedures as deemed advisable by
the Company in the Company's sole discretion which are consistent with the Plan
and in accordance with the requirements of section 423 of the Code.

                  (j) Expiration of Purchase Right. Any portion of a
Participant's Purchase Right remaining unexercised after the end of the Offering
Period to which such Purchase Right relates shall expire immediately upon the
end of such Offering Period.

            10. Limitations on Purchase of Shares; Rights as a Stockholder.


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                  (a) Fair Market Value Limitation. Notwithstanding any other
provision of the Plan, no Participant shall be entitled to purchase Shares under
the Plan (and under all other employee stock purchase plans which are intended
to meet the requirements of section 423 of the Code sponsored by the Company or
a parent or subsidiary corporation of the Company) at a rate which exceeds
$25,000 in fair market value, which fair market value is determined for Shares
purchased during a given Offering Period as of the Offering Date for such
Offering Period (or such other limit as may be imposed by the Code), for each
calendar year in which such Participant's Purchase Right with respect to such
Offering Period remains outstanding under the Plan (and under all other employee
stock purchase plans described in this sentence).

                  (b) Pro Rata Allocation. In the event the number of Shares
which might be purchased by all Participants in the Plan exceeds the number of
Shares available in the Plan, the Company shall make a pro rata allocation of
the remaining Shares in as uniform a manner as shall be practicable and as the
Company shall determine to be equitable.

                  (c) Rights as a Stockholder and Employee. A Participant shall
have no rights as a stockholder by virtue of the Participant's participation in
the Plan until the date of the issuance of a stock certificate(s) for the Shares
being purchased pursuant to the exercise of the Participant's Purchase Right. No
adjustment shall be made for cash dividends or distributions or other rights for
which the record date is prior to the date such stock certificate(s) are issued.
Nothing herein shall confer upon a Participant any right to continue in the
employ of the Company or interfere in any way with any right of the Company to
terminate the Participant's employment at any time.

            11.   Withdrawal.

                  (a) Withdrawal From an Offering. A Participant may withdraw
from an Offering by signing and delivering to the Company's payroll office, a
written notice of withdrawal on form provide by the Company for such purpose.
Such withdrawal may be elected at any time prior to the end of an Offering
Period; provided, however, if a Participant withdraws after the Purchase Date
for a Purchase Period of an Offering, the withdrawal shall not affect Shares
acquired by the Participant in such Purchase Period. Unless otherwise indicated,
withdrawal from an Offering shall not result in a withdrawal from the Plan or
any succeeding Offering therein. By withdrawing from an Offering effective as of
the close of a given Purchase Date, a Participant may have Shares purchased on
such Purchase Date and commence participation in the next Offering commencing
after such Purchase Date. A Participant is prohibited from again participating
in an Offering at any time upon withdrawal from such Offering. The Company may
impose, from time to time, a requirement that the notice of withdrawal be on
file with the Company's payroll office for a reasonable period prior to the
effectiveness of the Participant's withdrawal from an Offering.


<PAGE>

                  (b) Withdrawal from the Plan. A Participant may withdraw from
the Plan by signing a written notice of withdrawal on a form provided by the
Company for such purpose and delivering such notice to the Company's payroll
office. Withdrawals made after a Purchase Date for a Purchase Period shall not
affect Shares acquired by the Participant on such Purchase Date. In the event a
Participant voluntarily elects to withdraw from the Plan, the Participant may
not resume participation in the Plan during the same Offering Period, but may
participate in any subsequent Offering under the Plan by again satisfying the
requirements of paragraphs 4 and 6(a) above. The Company may impose, from time
to time, a requirements that the notice of withdrawal be on file with the
Company's payroll office for a reasonable period prior to the effectiveness of
the Participant's withdrawal from the Plan.

                  (c) Return of Payroll Deductions. Upon withdrawal from an
Offering or the Plan pursuant to paragraphs 11(a) or 11(b), respectively, the
withdrawn Participant's accumulated payroll deductions which have not been
applied toward the purchase of Shares shall be returned as soon as practicable
after the withdrawal, without the payment of any interest (unless the Board
decides otherwise pursuant to paragraph 9(e) above), to the Participant, and the
Participant's interest in the Offering and/or the Plan, as applicable, shall
terminate. Such accumulated payroll deductions may not be applied to any other
Offering under the Plan.

                  (d) Automatic Withdrawal From an Offering. If the fair market
value of the Shares on a Purchase Date of an Offering (other than the final
Purchase Date of such Offering) is less than the fair market value of the Shares
on the Offering Date for such Offering, then every Participant shall
automatically (i) be withdrawn from such Offering at the close of such Purchase
Date and after the acquisition of Shares for such Purchase Period and (ii) be
enrolled in the next Offering commencing subsequent to such Purchase Period. A
Participant may elect not to be automatically withdrawn from an Offering Period
pursuant to this paragraph 11(d) by delivering to the Company not later than the
close of business on the last day before the Purchase Date a written notice
indicating such election.

                  (e) Participation Following Withdrawal. An employee who is
also an officer or director of the Company subject to section 16 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and who is
deemed to "cease participation" in the Plan within the meaning of Rule 16b-3
promulgated under the Exchange Act as amended from time to time or any successor
rule or regulation ("Rule 16b-3") as a consequence of his or her withdrawal from
an Offering pursuant to paragraph 11(a) above or withdrawal from the Plan
pursuant to paragraph 11(b) above shall not again participate in the Plan for at
least six months after the date of such withdrawal.

                  (f) Waiver of Withdrawal Right. The Company may, from time to
time, establish a procedure pursuant to which a Participant may elect (an
"Irrevocable Election"), at least six (6) months prior to a Purchase Date, to
have all payroll deductions accumulated in his or her Plan account as of such
Purchase Date applied to purchase Shares under the Plan, and (i) to waive his or
her


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right to withdraw from the Offering or the Plan and (ii) to waive his or her
right to increase, decrease, or cease payroll deductions under the Plan from his
or her Compensation during the Purchase Period ending on such Purchase Date.
Such election shall be made in writing on a form provided by the Company for
such purpose and must be delivered to the Company not later than the close of
business on the day preceding the date which is six (6) months before the
Purchase Date for which such election is to first be effective.

            12. Termination of Employment. Termination of a Participant's
employment with the Company for any reason, including retirement, disability or
death or the failure of a Participant to remain an employee eligible to
participate in the Plan, shall terminate the Participant's participation in the
Plan immediately. In such event, the payroll deductions credited to the
Participant's account since the last Purchase Date shall, as soon as
practicable, be returned to the Participant or, in the case of the Participant's
death, to the Participant's legal representative, and all of the Participant's
right under the Plan shall terminate. Interest shall not be paid on sums
returned to a Participant pursuant to this paragraph 12 unless the Board elects
otherwise pursuant to paragraph 9(e) above. A Participant whose participation
has been so terminated may again become eligible to participate in the Plan by
again satisfying the requirements of paragraphs 4 and 6(a) above.

            13. Transfer of Control. A "Transfer of Control" shall be deemed to
have occurred in the event any of the following occurs with respect to
Intercardia.

                  (a)   a merger or consolidation in which Intercardia is not
the surviving corporation;

                  (b) a merger or consolidation in which Intercardia is the
surviving corporation where the stockholders of Intercardia before such merger
or consolidation do not retain, directly or indirectly, at least a majority of
the beneficial interest in the voting stock of Intercardia;

                  (c) the sale, exchange, or transfer of all or substantially
all of Intercardia's assets other than a sale, exchange, or transfer to one (1)
or more subsidiary corporations (as defined in section 1, above) of Intercardia;

                  (d) the direct or indirect sale or exchange by the
stockholders of Intercardia of all or substantially all of the stock of
Intercardia where the stockholders of Intercardia before such sale or exchange
do not retain, directly or indirectly, at least a majority of the beneficial
interest in the voting stock of Intercardia after such sale or exchange; or

                  (e)   the liquidation or dissolution of Intercardia;

                  In the event of a Transfer of Control, the Board, in its sole
discretion, may arrange with the surviving, continuing, successor, or purchasing
corporation, as the case may be (the "Acquiring Corporation"), for the Acquiring
Corporation to assume Intercardia's rights and


<PAGE>

obligations under the Plan. All Purchase Rights shall terminate effective as of
the date of the Transfer of Control to the extent that the Purchase Right is
neither exercised as of the date of the Transfer of Control nor assumed by the
Acquiring Corporation.

            14. Capital Changes. In the event of changes in the common stock of
Intercardia due to a stock split, reverse stock split, stock dividend,
recapitalization, combination, reclassification, or like change in Intercardia's
capitalization, or in the event of any merger (including a merger effected for
the purpose of changing Intercardia's domicile), sale or other reorganization,
appropriate adjustments shall be made by Intercardia in the securities subject
to purchase under a Purchase Right, the Plan's share reserve, the number of
Shares subject to a Purchase Right, and in the purchase price per Share.

            15. Transferability. A Purchase Right may not be transferred in any
manner otherwise than by will or the laws of descent and distribution and shall
be exercisable during the lifetime of the Participant only by the Participant.
Intercardia, in its absolute discretion, may impose such restrictions on the
transferability of the Shares purchasable upon the exercise of a Purchase Right
as it deems appropriate, and any such restriction shall be set forth in the
respective subscription agreement and may be referred to on the certificates
evidencing such Shares.

            16. Reports. Each Participant who exercised all or part of his or
her Purchase Right for a Purchase Period shall receive, as soon as practicable
after the Purchase Date of such Purchase Period, a report of such Participant's
account setting forth the total payroll deductions accumulated, the number of
Shares purchased, the fair market value of such Shares, the date of purchase and
the remaining cash balance to be refunded or retained in the Participant's
account pursuant to paragraph 9(g) above, if any. In addition, each Participant
shall be provided information concerning Intercardia equivalent to that
information generally made available to Intercardia's common stockholders.

            17. Plan Term. This Plan shall continue until terminated by the
Board or until all of the Shares reserved for issuance under the Plan have been
issued.

            18. Restriction on Issuance of Shares. The issuance of Shares under
the Plan shall be subject to compliance with all applicable requirements of
foreign, federal or state law with respect to such securities. A Purchase Right
may not be exercised if the issuance of Shares upon such exercise would
constitute a violation of any applicable foreign, federal or state securities
laws or other law or regulations. In addition, no Purchase Right may be
exercised unless (i) a registration statement under the Securities Act of 1933,
as amended, shall at the time of exercise of the Purchase Right be in effect
with respect to the Shares issuable upon exercise of the Purchase Right, or (ii)
in the opinion of legal counsel to Intercardia, the Shares issuable upon
exercise of the Purchase Right may be issued in accordance with the terms of an
applicable exemption from the registration requirements of said Act. As a
condition to the exercise of a Purchase Right, Intercardia may require the
Participant to satisfy any qualifications that may be

<PAGE>

necessary or appropriate, to evidence compliance with any applicable law or
regulation, and to make any representation or warranty with respect thereto as
may be requested by the Company.

            19. Legends. The Company may at any time place legends or other
identifying symbols referencing any applicable foreign, federal and/or state
securities restrictions or any provision convenient in the administration of the
Plan on some or all of the certificates representing Shares issued under the
Plan. The Participant shall, at the request of Intercardia, promptly present to
Intercardia any and all certificates representing Shares acquired pursuant to a
Purchase Right in the possession of the Participant in order to carry out the
provisions of this subparagraph. Unless otherwise specified by Intercardia,
legends placed on such certificates may include but shall not be limited to the
following:

            "THE SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED BY THE
CORPORATION TO THE REGISTERED HOLDER UPON THE PURCHASE OF SHARES UNDER THE
EMPLOYEE STOCK PURCHASE PLAN AS DEFINED IN SECTION 423 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED, THE TRANSFER AGENT FOR THE SHARES EVIDENCED HEREBY
SHALL NOTIFY THE CORPORATION IMMEDIATELY OF ANY TRANSFER OF THE SHARES BY THE
REGISTERED HOLDER HEREOF MADE ON OR BEFORE ______________. THE REGISTERED HOLDER
SHALL HOLD ALL SHARES PURCHASED UNDER THE PLAN IN THE REGISTERED HOLDER'S NAME
(AND NOT IN THE NAME OF ANY NOMINEE) PRIOR TO THIS DATE."

            20. Notification of Sale of Shares. Intercardia may require the
Participant to give Intercardia prompt notice of any disposition of Shares
acquired by exercise of a Purchase Right within two years from the date of
granting such Purchase Right or one year from the date of exercise of such
Purchase Right. Intercardia may require that until such time as a Participant
disposes of Shares acquired upon exercise of a Purchase Right, the Participant
shall hold all such Shares in the Participant's name (and not in the name of any
nominee) until the lapse of the time periods with respect to such Purchase Right
referred to in the preceding sentence. Intercardia may direct that the
certificates evidencing Shares acquired by exercise of a Purchase Right refer to
such requirement to give prompt notice of disposition.

            21. Amendment or Termination of the Plan. The Board may at any time
amend or terminate the Plan, except that such termination shall not affect
Purchase Rights previously granted under the Plan, nor may any amendment make
any change in a Purchase Right previously granted under the Plan which would
adversely affect the right of any Participant (except to the extent permitted by
the Plan or as may be necessary to qualify the Plan as an employee stock
purchase plan pursuant to section 423 of the Code or to obtain qualification or
registration of the Shares under applicable foreign, federal or state securities
laws). In addition, an amendment to the Plan must be approved by the
stockholders of the Company within twelve (12) months of the adoption of such
amendment if such amendment would change the number of Shares authorized for
issuance under the Plan or would change the definition of the employees (or
class of employees) eligible to participate in the Plan, including the
corporations that may be designated by the Board as Participating Companies.
Furthermore, the approval of the Company's stockholders shall be sought for any
amendment to the Plan for which the Board deems stockholder approval necessary
in order to comply with Rule 16b-3 promulgated under section 16 of the Exchange
Act.


<PAGE>

            The foregoing Intercardia, Inc. 1995 Employee Stock Purchase Plan
was duly adopted by the Board of Directors of Intercardia on the 27th day of
October, 1995, and amended by the Board of Directors on the 20th day of
February, 1996 and on the 1st day of December 1998.