Exhibit 1
Execution Copy
VOTING TRUST AGREEMENT
THIS VOTING TRUST AGREEMENT (this "Agreement"), is dated as of April
19, 2004, by and among Biomedical Value Fund, L.P., a Delaware limited
partnership and Biomedical Offshore Value Fund, Ltd., a Cayman Islands exempt
company (each, a "Stockholder" and collectively, the "Stockholders"), Xmark
Asset Management, LLC (the "Voting Trustee") and Incara Pharmaceuticals
Corporation, a Delaware corporation (the "Company").
R E C I T A L S
WHEREAS, each of the Stockholder is the legal and beneficial owner of
(i) the number of shares indicated on Schedule I hereto of Common Stock, par
value $0.001 (the "Common Stock") of the Company, and (ii) the number of
warrants (the "Warrants") to purchase shares of Common Stock of the Company
listed on Schedule I hereto; and
WHEREAS, this Agreement is intended to cover all matters upon which any
Stockholder is entitled to vote any shares of Common Stock listed on Schedule I
hereto and any shares of Common Stock issued upon the exercise of the Warrants
listed on Schedule I hereto; and
WHEREAS, this Agreement is a voting trust agreement, entered into in
accordance with the provisions of Section 218 of the Delaware General
Corporation Law.
NOW, THEREFORE, the parties hereto hereby agree that a voting trust
with respect to the Voting Trust Stock (as defined below) now or hereafter owned
by a Stockholder is hereby created and established, subject to the terms and
conditions of this Agreement (the "Voting Trust"), and further agree as follows:
SECTION 1. Registration of Voting Trust Stock.
----------------------------------
(a) Simultaneously with the execution of this Agreement, the
Stockholder(s) shall deposit with the Voting Trustee all of the Common Stock
owned by such Stockholder by delivery to the Voting Trustee of certificates
representing such shares of Common Stock, together with stock powers, duly
endorsed in blank, transferring such certificates to the Voting Trustee. If a
Stockholder exercises a Warrant, upon receipt by such Stockholder of the Common
Stock issued in connection with such exercise, such Stockholder shall promptly
deposit with the Voting Trustee all of the Common Stock issued to such
Stockholder upon any such exercise by delivery to the Voting Trustee of
certificates representing such shares of Common Stock, together with stock
powers, duly endorsed in blank, transferring such certificates to the Voting
Trustee. The Voting Trustee and the Company are fully authorized to take such
actions as are necessary to effect the transfer of such shares of Common Stock
to, and in the name of, the Voting Trustee on the books of the Company (and also
to cause any further transfers of such shares to be made which become necessary
through any change of the entities holding the office of Voting Trustee, as
hereinafter provided). The Voting Trustee shall file duplicates of this
Agreement with the Secretary of the Company and the registered office of the
Company in the State of Delaware. The certificates for the Common Stock
transferred and delivered to the Voting Trustee pursuant to this Agreement shall
be surrendered by the Voting Trustee to the Company and canceled, and new
certificates therefor shall be issued to and held by the Voting Trustee in the
name of the Voting Trustee in denominations of 500,000 shares each (in its
capacity as such) (such shares of Common Stock and any other shares of Common
Stock that may in the future be deposited in the Voting Trust being referred to
herein as the "Voting Trust Stock"). Upon receipt by the Voting Trustee of the
certificates for such shares of Common Stock and upon the transfer of such
shares of Common Stock into the name of the Voting Trustee, the Voting Trustee
shall hold the Voting Trust Stock, as stockholder of record, subject to the
terms and conditions of this Agreement. The Company shall state in the stock
ledger of the Company that the shares of Common Stock transferred or issued to
the Voting Trustee were transferred or issued pursuant to this Agreement.
SECTION 2. Stock Certificates. On all certificates representing Voting
Trust Stock, in addition to any other legend that may be required, the following
legend shall appear:
The shares of Common Stock evidenced by this stock certificate
are subject to certain restrictions, including restrictions on voting,
contained in the Voting Trust Agreement, dated as of April 19, 2004
among the Company, Biomedical Value Fund, L.P., Biomedical Offshore
Value Fund, Ltd. and Xmark Asset Management, LLC, as voting trustee,
and are issued pursuant to such Voting Trust Agreement. The Voting
Trust Agreement is available for inspection by the holder hereof daily
at the registered office of the Company in the State of Delaware during
regular business hours.
In addition, on all certificates representing Warrants exercisable for
Voting Trust Stock, in addition to any other legend that may be required, the
following legend shall appear:
This Warrant and the shares of Common Stock issuable upon the
exercise of this Warrant are subject to certain restrictions, including
restrictions on voting, contained in the Voting Trust Agreement, dated
as of April 19, 2004 among the Company, Biomedical Value Fund, L.P.,
Biomedical Offshore Value Fund, Ltd. and Xmark Asset Management, LLC,
as voting trustee, and are issued pursuant to such Voting Trust
Agreement. The Voting Trust Agreement is available for inspection by
the holder hereof daily at the registered office of the Company in the
State of Delaware during regular business hours.
SECTION 3. Issuance of Voting Trust Certificates. The Voting Trustee
shall issue to the Stockholder, in exchange for the Voting Trust Stock delivered
hereunder, a voting trust certificate substantially in the form attached as
Exhibit A hereto (a "Voting Trust Certificate"). Except as otherwise provided
herein, all powers and privileges affecting the Voting Trust Stock represented
by a Voting Trust Certificate shall attach to such Voting Trust Certificate.
-2-
SECTION 4. Voting of the Voting Trust Stock.
--------------------------------
(a) The Voting Trustee shall have the exclusive right to exercise, in
person or by its nominees or proxies or by written consent, all voting rights
and powers granted under the Delaware General Corporation Law (the "DGCL") in
respect of all Voting Trust Stock deposited hereunder, and to take part in, or
consent to, any corporate or stockholder action of any kind whatsoever
permissible under the DGCL (including, without limitation, calling such meetings
and taking such other actions as may be permitted under the Company's
Certificate of Incorporation and By-laws).
(b) Throughout the term of this Agreement, the Voting Trustee shall
possess and be entitled in its discretion to exercise all rights and power to
vote the Voting Trust Stock and to give consents with respect to any lawful
corporate action, including without limitation, the election of directors, a
merger or consolidation, an amendment or restatement of the certificate of
incorporation or by-laws of the Company, the sale, lease or exchange of all or
substantially all of the Company's assets, and the liquidation or dissolution of
the Company. During such time, no holder of Voting Trust Certificates shall have
any rights or powers to vote such shares or to give consents with respect to or
otherwise take part in any Company action.
(c) The holders of the Voting Trust Certificates agree that (i) in
voting the Voting Trust Stock, the Voting Trustee shall incur no liability in
its capacity as such except for its own gross negligence or willful misconduct
as trustee hereunder or the willful failure to comply with the terms of this
Agreement as trustee hereunder, and (ii) to the fullest extent permitted by law,
neither the Voting Trustee, nor any officer, director, employee or agent of the
Voting Trustee, shall be liable for the consequence of any vote cast, or consent
given by the Voting Trustee, or any other action taken or omitted to be taken by
the Voting Trustee, in good faith, except for any such liability resulting from
its gross negligence or willful misconduct or the willful failure to comply with
the terms of this Agreement as trustee hereunder.
SECTION 5. Transfers of Certificates.
-------------------------
(a) A holder of a Voting Trust Certificate may transfer its Voting
Trust Certificate to any person; provided that, as a condition to any transfer
of a Voting Trust Certificate, such transferee shall provide notice thereof to
the Voting Trustee and agree in writing to be bound by the terms of this
Agreement. Any attempt to transfer any of the Voting Trust Certificates not in
compliance with this Agreement shall be null and void and the Voting Trustee
shall give no effect to any such attempted transfer.
(b) If any mutilated Voting Trust Certificate is surrendered to the
Voting Trustee, or the Voting Trustee receives evidence to its satisfaction that
any Voting Trust Certificate has been destroyed, lost or stolen, and upon proof
of ownership satisfactory to the Voting Trustee together with such security or
indemnity as may be reasonably requested (without the need to post a bond), in
the case of destroyed, lost or stolen Voting Trust Certificates, by the Voting
Trustee to save it harmless, the Voting Trustee shall execute and deliver a new
Voting Trust Certificate for the same number of shares of Voting Trust Stock as
the Voting Trust Certificate so mutilated, destroyed, lost or stolen, with such
notations, if any, as the Voting Trustee shall determine.
-3-
(c) Prior to due presentment of a Voting Trust Certificate for transfer
in compliance with the requirements of Section 5(a), the Voting Trustee may
treat the registered holder of any Voting Trust Certificate as the owner thereof
for all purposes whatsoever, and the Voting Trustee shall not be affected by
notice to the contrary.
SECTION 6. Disposition of Voting Trust Stock.
---------------------------------
(a) The Voting Trustee shall have no authority to sell, transfer or
otherwise dispose of the Voting Trust Stock except in accordance with the
provisions of this Agreement.
(b) A holder of a Voting Trust Certificate may, at any time and from
time to time, sell, transfer or dispose of (a "Transfer") shares of Voting Trust
Stock related to such Voting Trust Certificate; provided, however, that if such
Transfer is not an Open Market Transfer (as defined below) then the shares of
Voting Trust Stock so transferred shall remain subject to the Voting Trust and
the provisions of this Agreement and the transferee of any such shares shall
agree in writing to be bound by the terms of this Agreement.
As used herein, the term "Open Market Transfer" shall mean a Transfer
of Voting Trust Stock to an unaffiliated third-party (i) pursuant to an
effective registration statement under the Securities Act of 1933, as amended
(the "1933 Act"), with a current prospectus available, providing for resale of
the Voting Trust Stock or (ii) pursuant to an exemption from the registration
requirements of the 1933 Act, in each case, in a "brokers' transaction," as that
term is defined in Rule 144(g) promulgated under the 1933 Act or a transaction
effected by a "market maker" (as that term is defined in Section 3(a)(38) of the
Securities Exchange Act of 1934, as amended, the "1934 Act") in the Voting Trust
Stock; provided, however, that for the purposes of this Agreement, a "brokers'
transaction" shall also include a sale of a substantial block of Voting Trust
Stock that is solicited or arranged by a broker-dealer or such a "market maker"
and effected through the exchange, quotation system or market on which the
Voting Trust Stock is then traded; provided, further, however, any Transfer
which violates the spirit and intent of this Agreement shall not be deemed an
Open Market Transfer. Any shares of Voting Trust Stock Transferred in an Open
Market Transfer pursuant to the terms of this Agreement are referred to herein
as "Released Shares" and, upon an Open Market Transfer, such Released Shares
shall no longer be subject to this Voting Trust.
(c) Upon a Transfer, the transferring holder of Voting Trust Stock
represented by a Voting Trust Certificate shall provide the Voting Trustee with
written notice of such Transfer (a "Transfer Notice"), which such notice shall
state (i) the number of shares of Voting Trust Stock Transferred, (ii) the
method of the Transfer, and (iii) whether or not the Transfer is an Open Market
Transfer. As promptly as practicable (but in any event within two trading days
of receipt by the Voting Trustee of a proper Transfer Notice) the Voting Trustee
shall deliver certificates representing the Voting Trust Stock so Transferred to
the transfer agent for the Company together with stock powers, duly endorsed in
blank, and, if (and only if) the Transfer was an Open Market Transfer, the
Voting Trustee shall also provide the transfer agent with authorization to
remove the restrictive legend required by this Agreement from the Voting Trust
Stock so transferred. If the certificates delivered by the Voting Trustee
represent more shares of Common Stock than are being Transferred, the remaining
shares shall be re-issued and returned to Voting Trustee and shall remain
subject to the Voting Trust. If the Transfer was not an Open Market Transfer,
the provisions of Section 1 shall apply.
-4-
SECTION 7. Termination.
-----------
(a) The Voting Trust created hereby shall remain in effect until
terminated as follows:
(i) The Voting Trust created hereby shall terminate upon an
Open Market Transfer with respect to Released Shares, but not with
respect to the remaining Voting Trust Stock.
(ii) The Voting Trust created hereby shall terminate in its
entirely at such time as (y) none of the Warrants remain outstanding
and (z) all of the Voting Trust Stock has become Released Shares.
(b) The Voting Trust created hereby shall terminate in its entirety if
the Voting Trustee resigns and is not replaced in accordance with the provisions
of Section 10.
(c) The Voting Trust created hereby shall terminate in its entirety
upon ten (10) days written notice from the holders of all then outstanding
Voting Trust Certificates to the Voting Trustee if the Voting Trustee
"beneficially owns" (determined in accordance with Section 13(d) of the 1934
Act, as amended, and Regulations 13D-G thereunder) less than thirty percent
(30%) of the outstanding Common Stock, including for the purposes of such
calculation, shares of Voting Trust Stock.
Promptly, but in no event more than two (2) trading days after
termination under Section 7(b) or 7(c), the Voting Trustee shall deliver the
certificates representing all of the Voting Trust Stock then held by the Voting
Trustee to the transfer agent for the Company with instructions to re-issue and
deliver certificates to the holders of the Voting Trust Certificates, together
with stock powers, duly endorsed in blank, and with authorization to remove the
restrictive legend required by this Agreement from such Voting Trust Stock.
SECTION 8. Dividends. The Voting Trustee shall not be entitled to
retain any dividends or other distributions of cash or other property or
securities (other than Common Stock), if any, with respect to the Voting Trust
Stock and such distributions (other than distributions of Common Stock), if any,
shall be paid by the Voting Trustee to the registered holders of the Voting
Trust Certificates immediately upon receipt by the Voting Trustee. Any
distributions paid in Common Stock shall be deposited into the Voting Trust and
a Voting Trust Certificate shall be delivered to the beneficial owner of such
Common Stock evidencing such deposit.
SECTION 9. Compensation of Voting Trustee. Without limiting the
provisions of Section 12, the Voting Trustee acknowledges that it shall not be
entitled to receive a fee from the holders of the Voting Trust Certificates.
-5-
SECTION 10. Successor Voting Trustee. The Voting Trustee may resign at
any time by giving written notice 30 days prior to the date of such resignation
to the holders of the Voting Trust Certificates. The resigning Voting Trustee is
hereby authorized to, and shall, appoint a successor Voting Trustee, which such
successor Voting Trustee shall be required to vote all shares of Voting Trust
Stock as directed by Xmark Asset Management, LLC. Upon the acceptance in writing
by a successor Voting Trustee of any appointment as Voting Trustee hereunder and
the agreement in writing of such successor Voting Trustee to be bound by the
obligations contained in this Agreement, (i) the retiring Voting Trustee shall
give written notice to (a) the Company of its retirement, and direct that all
notices due to it by virtue of its position as Voting Trustee should be sent to
the successor Voting Trustee and (b) to the holders of the Voting Trust
Certificate providing the name, address and contact person at the successor
Voting Trustee, and (ii) such successor Voting Trustee shall succeed to and
become vested with all the rights, powers, privileges and duties of the retiring
Voting Trustee such successor Voting Trustee shall deliver to the Company
written notice of its acceptance of the position of Voting Trustee, and (iii)
upon (but only upon) such acceptance, the retiring Voting Trustee shall be
discharged from further responsibilities under this Agreement.
SECTION 11. Concerning the Trustee.
----------------------
(a) The Voting Trustee shall have all requisite power, authority and
discretion as shall be necessary or appropriate to enable it to take all such
actions as it is required to take pursuant to this Agreement. The Voting Trustee
shall have no liability hereunder except for its own gross negligence or willful
misconduct.
(b) The Voting Trustee may consult with any legal counsel satisfactory
to it and the advice of such counsel shall be full and complete authorization
and protection in respect of any reasonable action taken, omitted to be taken or
suffered by the Voting Trustee hereunder in good faith and in accordance with
such opinion. Nothing herein is intended to imply that the Voting Trustee is
required to obtain legal or other professional advice in connection with any
action to be taken or omitted by it.
(c) The Voting Trustee shall be protected and shall incur no liability
for, or in respect of, any action taken or omitted to be taken or anything
suffered by it in reliance upon any notice, direction, consent, certificate,
affidavit, statement or other paper or document reasonably believed by it to be
genuine and to have been presented or signed by the proper parties.
(d) The Voting Trustee shall be obligated to perform such duties and
only such duties as are herein specifically set forth, and no implied duties or
obligations shall be read into this Agreement except to the extent the same
shall inure to the benefit of the Voting Trustee. The Voting Trustee shall not
be under any obligation to take any action hereunder which may tend to involve
it in any expense or liability for which, in its reasonable opinion, it believes
it will not be reimbursed in accordance with this Agreement.
-6-
SECTION 12. Indemnification.
---------------
(a) The holder(s) of the Voting Trust Certificates, jointly and
severally, covenant and agree to indemnify and hold harmless the Voting Trustee
and its Affiliates, directors, officers, employees and agents (each, an
"Indemnified Party"), from and against any and all claims, damages, losses,
liabilities, obligations, actions, suits, costs, disbursements and expenses
(including fees and expenses of counsel) (collectively, "Damages") incurred by
any Indemnified Party, in its capacity as such, arising from or in connection
with the execution of, or performance or inaction under, this Agreement, and as
a result of claims asserted by a third party; provided, however, the holders(s)
of the Voting Trust Certificates shall not be liable for Damages incurred by an
Indemnified Party to the extent that a court having competent jurisdiction shall
have determined by final judgment (not subject to further appeal) that such
Damages resulted from the willful malfeasance or gross negligence of such
Indemnified Party.
(b) The indemnification set forth in this Section 12 shall be in
addition to any other obligations or liabilities of the holders of the Voting
Trust Certificates hereunder or at common law or otherwise and shall survive the
termination of this Agreement and retirement of the Voting Trustee.
SECTION 13. Other Obligations of the Voting Trustee.
---------------------------------------
(a) The Voting Trustee shall file a copy of this Agreement in the
registered office of the Company in the State of Delaware. The Voting Trustee
shall request that such office keep such copy open to the inspection of any
stockholder of the Company, or any holder of a Voting Trust Certificate, daily
during business hours.
(b) The Voting Trustee shall give written notice to the holders of the
Voting Trust Certificates if a meeting of the Company's stockholders is called
at which the Voting Trustee shall be asked to vote, or if in lieu of such
meeting the Voting Trustee shall be asked to act by written consent, on any
corporate action requiring approval of the Company's stockholders.
SECTION 14. No Legal Title to Voting Trust Stock in Holders of Voting
Trust Certificates. The holders of Voting Trust Certificates shall not have
legal title to any part of the Voting Trust Stock and, except as contemplated by
Section 5 and Section 6, shall not be entitled to transfer or convey any
interest in (including, without limitation, any encumbrance on) the Voting Trust
Stock. No creditor of any holder of a Voting Trust Certificate shall be able to
obtain legal title to or exercise legal or equitable remedies with respect to
the Voting Trust Stock. No transfer, by operation of law or otherwise, of any
right, title and interest of any holder of a Voting Trust Certificate in and to
its undivided beneficial interest in the Voting Trust Stock or hereunder shall
operate to terminate this Agreement or the Voting Trust or entitle any successor
of any holder of a Voting Trust Certificate to an accounting or to the transfer
to it of any legal title to any part of the Voting Trust Stock.
SECTION 15. Beneficiaries. Nothing in this Agreement, whether express
or implied, shall be construed to give any person other than the Voting Trustee,
or the holders of the Voting Trust Certificates any right in the Voting Trust
Stock or under or in respect of this Agreement or any covenants, conditions or
provisions contained herein.
-7-
SECTION 16. Assignment. Except as expressly provided in Section 5, no
assignment or transfer of any interest, right or obligation of any holder of a
Voting Trust Certificate under this Agreement shall be allowed and any such
assignment or transfer in contravention hereof shall be void and of no effect;
provided that, as a condition to any assignment or transfer, the assignor or
transferor shall provide notice thereof to the Voting Trustee and the assignee
or transferee shall agree in writing to be bound by the terms of this Agreement.
SECTION 17. Amendments. This Agreement may not be amended, supplemented
or otherwise modified except in a writing signed by the Voting Trustee and all
of the holders of the Voting Trust Certificates. If this Agreement shall be
amended, the Voting Trustee shall file a copy of the instrument effecting such
amendment in the registered office of the Company in the State of Delaware.
SECTION 18. Notices. All notices, consents, approvals and other
communications given or made pursuant hereto shall be in writing and shall be
(a) delivered personally against receipt thereof, (b) sent by overnight courier,
(c) transmitted by telecopier or (d) sent by registered or certified mail
(postage prepaid, return receipt requested), in each case to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
(a) if to any holder of a Voting Trust Certificate, at the address for
such holder specified in the record of beneficial owners maintained by the
Voting Trustee.
(b) if to the Voting Trustee, to the following address:
Xmark Asset Management, LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
All such notices, consents, approvals and other communications shall be
deemed to have been given on (x) the date of receipt if delivered personally or
by overnight courier, (y) the date of transmission with confirmation answerback
if transmitted by telecopier or (z) the third business day following posting if
sent by mail.
SECTION 19. Interpretation. The terms defined in this Agreement include
the plural as well as the singular. When a reference is made in this Agreement
to a Section, Schedule or Exhibit, such reference shall be to a Section,
Schedule or Exhibit of this Agreement unless otherwise indicated. The headings
contained herein are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation."
-8-
SECTION 20. Severability. If any provision of this Agreement shall be
held to be invalid, illegal or unenforceable, in whole or in part, under the
laws of the State of Delaware, such invalidity, illegality or enforceability
shall not in any way whatsoever affect the validity of the other provisions of
this Agreement and such other provisions shall remain in full force and effect.
SECTION 21. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. One or more counterparts
of this document may be delivered via telecopier, with the intention that they
shall have the same effect as an original, executed counterpart hereof.
SECTION 22. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE, REGARDLESS OF
THE LAWS THAT MIGHT BE APPLIED UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS.
EACH OF THE PARTIES HERETO AGREES THAT ANY LEGAL ACTION BETWEEN OR AMONG THE
PARTIES RELATING TO THE ENTRY INTO OR PERFORMANCE OF THIS AGREEMENT, OR THE
INTERPRETATION OR ENFORCEMENT OF THE TERMS HEREOF, SHALL BE BROUGHT ONLY IN A
STATE COURT LOCATED IN NEW CASTLE COUNTY, DELAWARE, HAVING JURISDICTION OF THE
SUBJECT MATTER THEREOF, AND EACH PARTY IRREVOCABLY CONSENTS TO PERSONAL
JURISDICTION IN ANY SUCH STATE COURT, WAIVES ANY RIGHT TO OBJECT TO SUCH VENUE
OR TO ASSERT THE DEFENSE OF FORUM NON-CONVENIENS, AND AGREES THAT SERVICE OF
PROCESS MAY BE MADE BY CERTIFIED OR REGISTERED MAIL ADDRESSED TO SUCH PARTY AT
ITS ADDRESS SET FORTH IN, OR DETERMINED IN ACCORDANCE WITH, SECTION 18 HEREOF.
SECTION 23. Representations. Each of the parties hereto represents that
this Agreement has been duly authorized, executed and delivered by it and
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms.
SECTION 24. No Group Activities. The Voting Trustee has the sole voting
power with respect to the Voting Trust Stock, and such power is not shared or
dependent upon any action of the Stockholders; accordingly, the parties hereto
are not acting in concert with each other, and have not, by virtue of this
Agreement, formed a "group" as contemplated by Rule 13d-5(b) of the 1934 Act.
The Voting Trustee does not have any direct or indirect pecuniary interest (as
that term is defined in Rule 16a-1(a)(2)(i) of the ▇▇▇▇ ▇▇▇) in any of the
Voting Trust Stock.
-9-
IN WITNESS WHEREOF, the Company, the Voting Trustee, each the
Stockholder have duly executed this Voting Trust Agreement as of the day and
year first above written.
INCARA PHARMACEUTICALS
CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman and CEO
BIOMEDICAL VALUE FUND, L.P.
BIOMEDICAL OFFSHORE VALUE
FUND, LTD.
By: Great Point Partners, LLC,
Its Investment Manager
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Title: Chief Financial Officer
XMARK ASSET MANAGEMENT LLC
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Chief Investment Officer
-10-
SCHEDULE I
Stockholder No. of Shares Certif. No. No. of Warrants Certif. No.
----------- ------------- ----------- --------------- -----------
Biomedical Value Fund,
L.P. 6,800,000 2,720,000
Biomedical Offshore
Value Fund, Ltd. 3,200,000 1,280,000
-11-
EXHIBIT A
VOTING TRUST CERTIFICATE
IN RESPECT OF
COMMON STOCK OF INCARA PHARMACEUTICALS CORPORATION
No. _____
THIS IS TO CERTIFY THAT __________________________ or its registered
assigns upon the termination of the Voting Trust Agreement hereinafter referred
to (the "Agreement"), upon surrender of this Certificate, will be entitled to
receive a certificate or certificates for ______ shares of Common Stock of
Incara Pharmaceuticals Corporation (the "Company") (or, if prior to the
termination of the Agreement, the Company shall change the outstanding shares of
its Common Stock into the same or a different number of shares of stock or of
the same or any other class or classes, a number of shares of such class or
classes of stock equivalent to such number which would have been issued for the
aforesaid number and classes of shares of Common Stock); and until such time is
entitled to receive payments of any dividends or distributions (other than such
as shall be in the form of shares of the capital stock of the Company having
present or contingent voting power, which shall continue to be held by the
undersigned Trustee or any successors thereto (the "Trustee")) received by the
Trustee in respect of the aforesaid number and classes of shares of Common
Stock.
Until the termination of the Agreement and the delivery of such stock
certificates, the Trustee shall have the full, exclusive and unqualified right
and power to vote and to execute consents and dissents with respect to all
shares of stock of the Company having voting power held by the Trustee, at all
meetings of stockholders of the Company (or written actions in lieu thereof),
for any purpose, whether annual or special, and generally to exercise all the
powers of an absolute owner thereof, subject only to the limitations and
restrictions which are set forth in the Agreement, including, without
limitation, Section 4 of the Agreement; it being expressly stipulated that,
except as specifically set forth in the Agreement, no voting right passes to the
holder hereof by or under this Certificate or by or under any agreement,
expressed or implied.
This Certificate is issued pursuant and is subject to all of the terms
and conditions of the Voting Trust Agreement, dated as of April ___2004, by and
among the Company, the original Trustee, as Trustee and the original holder
hereof, the terms of which the holder hereof agrees and consents to. A copy of
the Agreement is on file in the registered office of the Company in Delaware.
This Certificate and the rights and interests represented hereby are
transferable only on the books of the Trustee upon surrender hereof at the
principal business office of the Trustee, properly endorsed, subject to such
rules and requirements concerning transfers as the Trustee may from time to time
adopt, by the registered holder hereof in person or by attorney duly authorized.
-12-
IN WITNESS WHEREOF, the Trustee has executed this Certificate this
_____ day of _____________, 2004.
TRUSTEE
By: __________________________________
Name: ________________________________
Title: _______________________________
-13-