Exhibit 10.21


 


Confidential Materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.


 


SUPPLY AGREEMENT


 


This Supply Agreement (“this
Agreement”), effective as of September 15th, 1999 (the “Effective Date”)
is entered into by SCOTT MEDICAL PRODUCTS, INC. 
(“Scott”), located at 6141 Easton Road, Plumsteadville, Pennsylvania
18949-0310, and AGA AB (“AGA”), located at 181 81 Lidingö, Sweden (Scott and
AGA to be collectively referred to herein as the “Parties”).


 


RECITALS


 


A.                                   AGA has a
proprietary position for the world-wide use of a pharmaceutical product and
related delivery/monitoring system associated with the therapeutic use of
nitric oxide by inhalation (“INOtherapyTM”) and, in addition, owns certain related
trademarks including INOcalTM.  AGA acquired
INOtherapyTM through its acquisition of INO Holdings, Inc., and INO
Holdings, Inc. had previously acquired INOtherapyTM from The BOC Group, Inc.  (“BOC”).


 


B.                                     Safe practice
of INOtherapyTM and safe operation of approved delivery systems requires
the use of calibration gases.


 


C.                                     Scott
previously entered into an agreement with BOC dated February 6th, 1997
concerning calibration gases (the “BOC Agreement”), pursuant to which BOC
provided capital and know-how and Scott provided proprietary information and
know-how to develop certain calibration gases. 
Scott now manufactures calibration gases in commercial quantities
exclusively for AGA in the US and Canada.


 


D.                                    AGA, as the
successor-in-interest to BOC, and Scott desire to enter into this Agreement
whereby Scott will supply all of AGA’s needs for these calibration gases
packaged in non-refillable containers (as more specifically described in Exhibit A
hereto, the “Products”) on a world-wide basis, and further desire that this
Agreement replace and supersede the BOC Agreement in all respects.


 


THEREFORE, in consideration
of the mutual promises contained in the following provisions, the Parties agree
as follows:


 


ARTICLE 1
- DEFINITIONS


 


The following terms have
these definitions:


 


1.1                                 “Confidential
Information” shall mean information of a confidential and
proprietary nature, including but not limited to techniques, designs, drawings,
data, processes, inventions, concepts, substances, specifications,
developments, equipment, protocols, sales and
customer information, plans, trade secrets, and business and financial
information, relating to the research, products, practices, and businesses of
the Party owning such Confidential Information.


 


1.2                                 “AGA”
shall mean collectively AGA AB and all its Affiliates (as an
“Affiliate” is defined in Article 1.4 below), unless otherwise indicated.


 


1.3                                 “Scott”
shall mean collectively Scott Medical Products, Inc.  and all its Affiliates, unless otherwise
stated.


 


1

















 


1.4                                 “Affiliate”
shall mean an entity which directly or indirectly controls, is
controlled by or is under common control with a Party (control, in the case of
corporate entities meaning ownership of at least fifty percent (50%) of the
shares entitled to vote for the election of directors; and, in the case of
non-corporate entities, ownership of at least fifty (50%) of the equity).


 


1.5                                 “Drug
Substance” shall mean highly purified, pharmaceutical grade
nitric oxide.


 


1.6                                 “Product
Specifications” shall mean the technical description of the Products
as set forth in the Exhibits attached hereto and incorporated herein.


 


1.7                                 “Drug
Substance Specifications” shall mean the technical
description of the Drug Substance as set forth in the Exhibits attached hereto
and incorporated herein.


 


ARTICLE 2
- SUPPLY OF PRODUCTS


 


2.1                                 General:
Scott shall supply the Products to AGA in accordance with AGA’s written
purchase orders and the terms and conditions of this Agreement.


 


2.2                                 Estimated
Purchases: AGA will provide Scott at the beginning of each
month with a rolling [**] month forecast of its requirements for the Products,
such forecasts to be considered good-faith estimates only, for planning
purposes, and not to be considered as guarantees of the volumes or timing of
such requirements; provided that the first [**] months of such rolling forecast
shall constitute a firm commitment unless modified by the parties by subsequent
written agreement Scott’s and AGA’s cooperative efforts in this regard will be
directed towards developing a plan for these forecasts that will fairly balance
Scott’s need for reliable planning concerning its manufacture of the Products
and AGA’s need for flexibility concerning its ordering of the Products.


 


2.3                                 Exclusivity:
Scott shall be AGA’s exclusive world-wide supplier of the Products and
AGA shall be Scott’s exclusive purchaser of any INOtherapyTM related calibration gases including the Products. 
If Scott is unable to meet the required demand for the Products for
[**]consecutive calendar months, notwithstanding Scott’s exercise of
contingency planning as described in Article 2.21 below, then AGA may
purchase such additional quantities of Products from a third party as are
necessary to meet its requirements; provided, however, that AGA will continue
to purchase all of its requirements of the Products once Scott has demonstrated
that it once again has the ability to supply AGA with the amount of the
Products needed on a consistent and reliable basis.  In addition, during the term of this
Agreement, Scott shall not use, sell, or otherwise dispose of the Products to
any party other than AGA or its designate.


 


2.4                                 Manufacturing:  All the Products shall be
manufactured in compliance with or pursuant to: (a) all applicable CGMP
procedures; (b) all other applicable FDA or equivalent international
agency regulations or requirements; and (c) all other applicable
national/federal, state, and local laws and regulations.


 


2.5                                 Price:
The prices for the Products shall be as set forth in the Exhibits
attached hereto and made a part hereof. 
Such prices shall remain firm for one (1) year after the Effective
Date.  Thereafter, these prices shall be
subject to adjustment annually on the anniversaries of 


 


2

















 


such Effective Date, upon the good-faith
negotiation and agreement of both Parties. 
In the event that the Parties cannot agree on a price adjustment within
six (6) months following an anniversary date, the price shall be adjusted,
effective as of that anniversary date, by the percentage change in the US
Manufacturing Pricing Index, whether it be up or down, from the previous year
and, in no event (except as provided in the next sentence), shall the price
change by more than [**] percent ([**]%) in any given twelve (12) month
period.  In the event that Scott can
prove to AGA that raw material costs have changed in any twelve (12) month
period by more than [**] percent ([**]%), then the Parties agree to adjust the
price so as to reflect the equal sharing of the additional costs by the
Parties.


 


2.6                                 AGA
Purchase Orders: A specific commitment to purchase the Products will
be established by AGA’s issuance of a purchase order against this
Agreement.  All AGA purchase orders shall
be deemed to incorporate the pricing, delivery, specification, and other terms
and conditions contained herein.  None of
the terms and conditions set forth on any purchase order or order form, invoice
or like document shall change or modify the provisions of this Agreement,
unless mutually agreed in writing by the Parties.  Each purchase order shall be considered firm,
and shall not be subject to change or cancellation without Scott’s written
consent and will be subject to Scott’s normal cancellation fees.  A purchase order shall be deemed to have been
issued on the date that it bears if it is received by Scott no later than the
fourth business day following that date; if it is received later than the
fourth business day, it shall be considered to have been issued when received
by Scott.


 


2.7                                 Payment:
AGA’s payment for all orders of the Products shall be due net [**] days
after AGA’s receipt of invoice and confirmation of corresponding shipment from
Scott.


 


2.8                                 Shipment:
Scott shall ship each order of the Products to the destination specified
in AGA’s purchase order.  All shipments
will be F.O.B. Plumsteadville, PA.  AGA
may specify in its purchase order the common carrier to be used.  If AGA fails to specify a qualified common
carrier, Scott shall select the common carrier.


 


2.9                                 Risk
of Loss: Title and all risk of loss of or damage to the
Products (other than loss or damage resulting from the acts or omissions of
Scott, including without limitation acts or omissions in packing the Products)
will pass to AGA, or to such financing institution or other party or parties as
may have been designated to Scott by AGA, upon delivery by Scott to a mutually
agreed upon carrier in accordance with Article 2.8 above.


 


2.10                           Partial
Delivery:  With AGA’s
prior written consent, Scott may make partial shipment of AGA’s orders, to be
separately invoiced and paid for when due with any additional shipment costs
incurred by AGA over and above those that would have resulted from a single
shipment being credited in full by Scott.


 


2.11                           Delivery
Schedule and Delays: Scott will fill AGA’s purchase orders for the
Products, provided that said purchase orders are reasonably consistent with the
forecasts provided in accordance with Article 2.2 above.


 


2.12                           Sales
and Use Tax: AGA shall pay any and all applicable sales or use
taxes or any other assessment levied upon the sale, transportation, delivery,
use or consumption of the 


 


3

















 


Products in connection with any order of the
Products, except those based upon or otherwise measured by Scott’s income.  In the event that AGA is exempt from
applicable sales taxes, AGA will provide to Scott a copy of the exemption
certificate.


 


2.13                           Certificate
of Analysis: Scott shall provide a certificate of compliance for
each lot produced for each item of the Products indicating that the material
has been produced and tested in accordance with the Product Specifications and
manufacturing requirements as set out in Article 2.4 above.  Scott agrees to provide AGA (upon request)
final acceptance and in-process test data to indicate that the processes used
to produce the Products were under control for each lot/batch supplied.


 


2.14                           Acceptance
of the Products by AGA: AGA shall perform and complete its receiving
and quality assurance tests and inspections for the Products shipped under this
Agreement no later than [**] days following delivery of the Products.  Except as otherwise provided in Article 2.15
below, AGA shall be conclusively deemed to have accepted such units of the
Products unless it gives written notice of rejection of any such units to Scott
within such [**] day period.  Scott shall
be deemed to have authorized the return of the rejected Products if it fails to
deny such return authorization within [**] days of receiving AGA’s notice of rejection.  All shipping charges on authorized returns
shall be borne by Scott.  AGA’s
acceptance of the Products shall in no way relieve Scott of its obligations
and/or warranties hereunder.


 


2.15                           Remedies
for Failure to Comply with Product Specifications: Notwithstanding
the provisions of Article 2.14 above, should AGA or a customer of AGA find
that any Product fails to conform with the specifications within the Product
Warranty Period and provided that AGA gives written notice failure thereof to
Scott within [**] days following discovery of the failure, Scott shall replace
such nonconforming Product or refund the purchase price thereof within [**]
days after receipt of such notice.  Scott
will further refund any documented freight or other related costs associated
with the return of the nonconforming Product.


 


2.16                           Regulatory
Recall: As between the Parties hereto, only AGA may initiate
a recall action.  In the event of a
recall, withdrawal, or field correction of the Products because Scott supplied
Products that did not conform to the Product Specifications and/or warranties
in this Agreement, AGA will notify Scott and provide Scott a copy of its recall
letter prior to initiation of the recall. 
Scott will assist AGA in an investigation to determine the cause and
extent of the problem.  No FDA or foreign
regulatory authority contacts or coordination of any recall activities will be
initiated by Scott.


 


2.17                           Recall
Expenses: In the event of a recall because Scott supplied
Products that did not conform to the Product Specifications and/or warranties
in this Agreement, then Scott will bear all reasonable costs and expenses that
are directly related to or associated with such recall.  Recalls for any other reason will be at AGA’s
expense.  If each Party contributes to
the cause for a recall, the cost will be shared in proportion to each Party’s
contribution to said cause.


 


2.18                           Drug
Substance Supply and Use: AGA will supply Drug
Substance without charge at Scott’s request in steel 200 cylinders at 300 psi
(2.4 lbs. per cylinder) with a CGA 626 valve. 
Said Drug Substance shall meet the Drug Substance Specifications.  Transportation costs will be borne by Scott.  Transportation costs will be borne by
Scott.  Scott will use the Drug 


 


4

















 


Substance provided by AGA solely and
exclusively for the manufacture of the Products for AGA and for no other
purpose.  Included with each shipment of
said material will be certificates of analysis, lot identification, and any
other necessary raw material documentation. 
Scott will maintain a log to accurately reflect the disposition of all
Drug Substance supplied by AGA to Scott, and said log will be subject to audit
by AGA throughout the Term of this Agreement (as “Term” is defined in Article 5.1
below) and for [**] years following the expiration or termination, for any
reason, of this Agreement.


 


2.20                           Recycling.  Scott shall provide AGA with
a mechanism for the disposition of used Product by recycling.


 


2.21                           Continuance
of Supply: Scott agrees to develop contingency plans to ensure
continuous supply of the Product to AGA. 
In the event that Scott cannot produce the Products from its medical
facility located at Plumsteadville, PA (“Primary Location”) for more than [**],
Scott will activate manufacturing capabilities at another location (“Secondary
Location”).  Scott will ensure that the
Secondary Location can produce the Product to the equivalent Product
Specifications of the Primary Location, and that it will be able to manufacture
the Product in commercial quantities within [**] of activation.


 


ARTICLE 3
- INSPECTIONS


 


3.1                                 AGA shall have
the right to inspect the Scott manufacturing facility [**] each calendar year,
during normal business hours and on [**] days’ prior notice, for the purpose of
conducting a quality assurance audit to verify Scott’s compliance with the
requirements of this Agreement.  AGA may
inspect the Scott manufacturing facility at other times upon request which
shall state the reasons for such request. 
Scott shall not unreasonably withhold permission for such additional
inspections.  These audits may be
conducted by AGA or by a consultant retained by AGA or both.  Reasonable efforts will be exerted by AGA or
said consultant to ensure that such audits shall not interfere with the normal
operation of Scott’s business.


 


ARTICLE 4
- CONFIDENTIALITY


 


4.1                                 Confidential
Information: Each Party acknowledges that this Agreement may
require the disclosure of Confidential Information to the other Party.  The Party receiving Confidential Information
(the “Receiving Party”) agrees to maintain the confidentiality thereof during
the Term of this Agreement (as “Term” is defined in Article 5.1 below) and
for [**] years thereafter and not to use such Confidential Information except
in its performance of this Agreement during the same period of the Term and the
[**] years thereafter.  For information
to be deemed Confidential Information, it must be clearly identified in writing
as being of a confidential character by the Party disclosing it (the
“Disclosing Party”).  If disclosed orally
or visually or by electronic transfer, such Confidential Information shall be
orally identified and designated as confidential at the time of disclosure and
such identification and designation of confidentiality shall be followed up in
writing within [**] days following such oral or visual or electronic
disclosure.  The Receiving Party shall
use the same level of care to prevent the disclosure, publication or
unauthorized use of Confidential Information that it exercises in protecting
its own Confidential Information, and shall in any event take all reasonable
precautions to prevent the disclosure of Confidential Information to third
parties.


 


5

















 


4.2                                 Exceptions:
The following shall not be considered Confidential Information:


 


(a)                                  Information which is public
knowledge or which becomes public knowledge through no fault of the Receiving
Party.


 


(b)                                 Information which is
lawfully obtained by the Receiving Party from a third party not under an
obligation of confidentiality to the Disclosing Party.


 


(c)                                  Information which is in the
Receiving Party’s lawful possession, as documented by its records, prior to its
initial disclosure by the Disclosing Party. 
This exception shall not apply to release either Party from the terms of
any confidentiality agreement it entered into prior to the Effective Date of
this Agreement.


 


(d)                                 Information which is
independently developed by the Receiving Party without reference to any
Confidential Information of the Disclosing Party.


 


(e)                                  Information which a
Receiving Party is required to disclose to a duly constituted court of law or
government agency, provided that the Receiving Party shall give reasonable
notice of such requirement to the Disclosing Party and shall make reasonable
efforts to obtain confidential treatment therefor.


 


ARTICLE 5
- TERM AND TERMINATION


 


5.1                                 Term:
This Agreement shall commence on the Effective Date and shall continue
in effect for a period of five (5) years (the “Initial Term”) unless
terminated in accordance with the provisions hereof.  This Agreement shall automatically renew for
successive two (2) year terms thereafter (“Renewal Term(s)”) unless either
Party notifies the other in writing not less than one hundred eighty (180) days
prior to expiration of the Initial Term or Renewal Term then in effect that it
does not wish to renew the Agreement. 
The Initial Term and the Renewal Term(s), if any, are herein referred to
collectively as the “Term”.


 


5.2                                 Termination:
This Agreement may be terminated by either Party in the event of one of
the following:


 


(a)                                  A material default by the
other Party of any obligation hereunder to which such Party was entitled, upon
thirty (30) days’ written notice to the defaulting Party, unless the default
shall be substantially cured by the defaulting Party prior to the date
termination becomes effective, or


 


(b)                                 immediately upon written
notice in the event of the bankruptcy or insolvency of the other Party, unless
the trustee in bankruptcy or receiver of such other Party shall within a
reasonable time assume this Agreement or otherwise give reasonable
assurance of the performance of all covenants, and conditions of the Agreement.


 


5.3                                 Upon the
expiration of this Agreement or termination by Scott, Scott shall continue to
honor AGA orders placed by AGA for Products reasonably consistent with prior
volume or rolling forecast up to [**] months after the effective date of
termination.  AGA shall 


 


6

















 


pay the prices currently in effect under this
Agreement (a) upon the date of expiration or (b) upon the date of
AGA’s receipt of Scott’s written notice of termination, as the case may be.


 


5.4                                 Upon
termination by AGA, where such termination was not due to any default by Scott,
or if Scott terminates this Agreement by reason of AGA’s default, AGA shall
purchase Scott’s finished inventory of the Products manufactured on account of
AGA’s forecasts on hand upon the date of AGA’s written notice of termination
and Scott’s then-current work-in-progress when completed, but not in excess of
the next [**] months’ worth of Product, as having been forecast pursuant to Article 2.2,
following said date of AGA’s written notice of termination.


 


ARTICLE 6
- WARRANTIES


 


6.1                                 Product
Warranty: Scott warrants that the Products as delivered to AGA
hereunder, shall conform to the Specifications, shall comply with all
applicable FDA and equivalent international regulatory agency requirements, and
shall be free from manufacturing and workmanship defects under normal care and
use for their intended purpose.  The
warranty for defects in material and workmanship shall extend for a period of
[**] years after delivery of the Product to AGA (“Product Warranty Period”).


 


6.2                                 THE
WARRANTIES SET FORTH IN ARTICLE 6.1 ARE IN LIEU OF ALL OTHER WARRANTIES,
EXPRESSED OR IMPLIED, INCLUDING BUT NOT LIMITED TO ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.


 


6.3                                 Intellectual
Property Indemnification: Scott shall indemnify and
hold harmless AGA and its officers, directors, employees and shareholders
against and from all claims, demands, suits, costs (including reasonable
attorneys’ fees and costs of investigation), and actions, in each case with
respect to claims that the manufacture and/or sale by Scott of the Products
under this Agreement and/or the use by AGA of such Products for the purpose
intended under this Agreement, independent of the combination or concurrent
sale of the Products with any other component or product, infringes a valid
patent right of a third party; provided that no such indemnification shall
apply to the extent that the infringement relates to the manufacture, sale, or
use of the Drug Substance itself.  AGA
shall indemnify and hold harmless Scott and its officers, directors, employees
and shareholders against and from all
claims, demands, suits, costs (including reasonable attorneys’ fees and costs
of investigation) and actions in each case with respect to (a) claims that
the sale and/or use in commerce of the Product by AGA infringes any trademark
right of a third party; and (b) claims that the manufacture and/or sale by
AGA of the Drug Substance under this Agreement, and/or the use by Scott of the
Drug Substance for the purpose intended under this Agreement, independent of
the combination or concurrent sale of the Drug Substance with any other
component or product, infringes a valid patent right of a third party.


 


6.4                                 Indemnification
Against Product Liability: Except with respect to damages or injuries
covered by indemnification under the next sentence, Scott shall indemnify and
hold harmless AGA and its Affiliates, and AGA’s and its Affiliates’ officers,
directors, employees and shareholders, against and from all claims, demands,
suits, costs (including reasonable attorneys’ fees and costs of investigation),
and actions in each case with respect to damages to property or 


 


7

















 


injuries to persons that may be sustained by
any third party on the basis of a defect in the manufacture or supply of the
Products by Scott under this Agreement. 
AGA shall indemnify and hold harmless Scott and its Affiliates, and
Scott’s and its Affiliates’ officers, directors, employees and shareholders, against
and from all claims, demands, suits, costs (including reasonable attorneys’
fees), and actions in each case with respect to damages to property or injuries
to persons that may be sustained by any third party on the basis of a defect in
the manufacture or supply of Drug Substance.


 


6.5                                 Insurance
and Certain Matters Relating to Indemnification: Each Party shall maintain
at its own expense, a product liability policy of not less than five million
U.S. dollars (U.S. $5,000,000.00) per incident with respect to bodily injury
and one million U.S. dollars (U.S. 
$1,000,000.00) per incident with respect to property damage to support
its obligation hereunder to indemnify and hold the other Party harmless from
any and all costs, expenses and liabilities arising out of any damage or injury
(including loss of life) attributable to any improper act on the part of the
indemnifying Party in the manufacture or supply of the Product.  The Parties shall furnish to each other a
certificate of insurance demonstrating compliance with this Article 6.5
for information only and neither Party shall have the right or responsibility
to review such policy or to determine the adequacy thereof.  An indemnified Party shall promptly advise of
any and all such actions or suits brought against the indemnified Party and
should an indemnified Party desire to have its own counsel participate in any
such action or suit the cost of such counsel shall be borne exclusively by the
indemnified Party.


 


6.6                                 Continuing
Obligation: The obligation of the Parties set forth in this Article 6
shall continue notwithstanding the expiration or termination, for any reason,
of this Agreement.


 


6.7                                 LIMITATIONS OF LIABILITY:
EXCEPT TO THE EXTENT EXPRESSLY PROVIDED IN SECTIONS 6.3 AND 6.4, NEITHER PARTY
SHALL BE LIABLE TO THE OTHER PARTY IN CONTRACT, TORT, OR STRICT OR ABSOLUTE
LIABILITY OR OTHERWISE FOR ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES OF
WHATSOEVER NATURE.


 


ARTICLE 7
- GENERAL PROVISIONS


 


7.1                                 Assignment:
This Agreement may not be assigned or subcontracted by either Party
without the prior written consent of the other Party, which consent shall not
be unreasonably withheld or delayed; provided that assignment of this Agreement
shall not release the assigning Party from any of its obligations hereunder.


 


7.2                                 Notice:
Any notices permitted or required to be given hereunder shall be
effective if they are delivered personally, by certified mail (return receipt
requested), by overnight air courier (with return receipt), or by facsimile
machine (with proof of transmission) and delivered:


 


in the case of AGA, to:


 


President
and CEO 

INO Therapeutics, Inc.

54 Old Highway 22 

Clinton, NJ 08809


 


8

















 


and in the case of Scott, to:


 


Vice
President/General Manager

Scott Medical Products, Inc.

6141 Easton Road, Building 3

P.O. Box 310

Plumsteadville, Pennsylvania 18949-0310


 


Notices may be sent to any
changed address or changed titleholder of any of the above of which the sender
has actual knowledge.


 


7.3                                 Integration:
This Agreement represents the entire agreement of the Parties with
respect to its subject matter, and supersedes any and all prior agreements,
understandings, promises, and representations by any Party to any other
respecting its subject matter.


 


7.4                                 No
Brokers: No Party to this Agreement employed any broker or
agent in connection with this transaction or its subject matter.


 


7.5                                 Captions
and Exhibits: All captions contained in this Agreement are
inserted for convenience or reference only and shall not be deemed a part of
this Agreement.  The Exhibits are
incorporated into and deemed a part of this Agreement.


 


7.6                                 Severability:
If any provision of this Agreement is held unenforceable, the provision
shall be regarded as severable from this Agreement and the remaining provisions
shall remain in full force and effect.


 


7.7                                 Status
of the Parties: AGA and Scott shall not be deemed to be partners,
joint venturers or one another’s agents, and neither shall have the right to
act on behalf of the other except as expressly provided herein or otherwise
expressly agreed in writing.


 


7.8                                 Waiver:
The failure or neglect of AGA or Scott to enforce the terms and
conditions of this Agreement shall not be deemed a waiver thereof nor shall it
be deemed a condonation of any breach. 
Such failure or neglect shall not be deemed a waiver or condonation of
any later breach.  All remedies under
this Agreement are cumulative and are not exclusive of other remedies.


 


7.9                                 Force
Majeure: Neither Party will be held liable or responsible to
the other Party nor be deemed to have defaulted under or breached this
Agreement for failure or delay in fulfilling or performing any term of this
Agreement, except for the payment of any sums owing hereunder, when such
failure or delay is caused by or results from causes beyond the reasonable
foreseeability and control of the affected Party including but not limited to
such causes attributable to fire, floods, earthquakes, shortages, failure or
delays of energy, materials, supplies or equipment, breakdowns in machinery or
equipment, embargoes, wars, acts of war (whether war be declared or not),
insurrection, riots, civil commotion, acts of God or acts, omissions or delays
in acting by any governmental authority or the other Party.  In the event of a force majeure adversely
affecting Scott’s ability to supply Product, AGA shall be relieved of the
exclusivity provisions of Article 2.3 during the pendency of said force
majeure.


 


9

















 


7.10                           Amendment:  This Agreement may only be
amended by a writing signed by officers of the respective Parties hereto and
expressly designated as an amendment to this Agreement.


 


7.11                           Binding
Effect, Successors and Assigns: This Agreement shall be
binding upon and inure to the benefit of the Parties hereto, their
subsidiaries, divisions, business units, successors and permitted assigns.


 


7.12                           Choice
of Law: This Agreement shall be construed in accordance with
the laws of the State of New Jersey without giving effect to its choice of law
provisions.


 


7.13                           Counterparts:
This Agreement may be executed in counterparts, to be evidenced by the
simultaneous (within physical limits) exchange of signature pages (telefaxed
if necessary) and confirmatory cover letters, and the counterparts together
shall be regarded as a single instrument binding on the Parties.


 


WHEREFORE, the Parties have
executed this Agreement as of the date of the latest signature below.


 


	
  AGA AB

  	
  SCOTT
  MEDICAL PRODUCTS, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  illegible

  	
   

  	
  By:

  	
  Thomas
  W. Barford

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Exe.
  Vice Pres.

  	
   

  	
  Title:
  

  	
  Vice
  President & General Manager

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  1999-09-15

  	
   

  	
  Date:
  

  	
  9-15-99

  



 


10














 


Exhibit A


Product Specifications


 


	
  Nitric
  Oxide Calibration Gas

  	
   

  
	
  Product

  	
  Nitric
  Oxide Calibration Gas

  
	
  Scott
  Product Code

  	
  03047041IT-6

  
	
  Composition

  	
  45
  ppm Nitric Oxide, bal Nitrogen

  
	
  Blend
  Tolerance

  	
  +/-2% relative

  
	
  Analytical
  Tolerance

  	
  +/-2%
  relative

  
	
  Stability
  Tolerance

  	
  +/-4%
  relative

  
	
  Cylinder

  	
  Scotty
  VI

  
	
  Cylinder
  Capacity

  	
  57
  Liters at 500 psig, 70’F

  
	
  Cylinder
  Treatment

  	
  Aculife

  
	
  Valve

  	
  CGA
  625

  
	
  Label

  	
  As
  provided

  
	
  Packaging

  	
  Single
  white box

  
	
  Shelf
  life:

  	
  Minimum
  one year, extended as available

  
	
   

  	
   

  
	
   

  	
   

  
	
  Nitrogen
  Dioxide Calibration Gas

  
	
  Product

  	
  Nitrogen
  Dioxide Calibration Gas

  
	
  Scott
  Product Code

  	
  03046069IT-6

  
	
  Composition

  	
  10
  ppm Nitrogen Dioxide, bal Air

  
	
  Blend
  Tolerance

  	
  +/-5%
  relative

  
	
  Analytical
  Tolerance

  	
  +/-5%
  relative

  
	
  Stability
  Tolerance

  	
  +/-10%
  relative

  
	
  Cylinder

  	
  Scotty
  VI

  
	
  Cylinder
  Capacity

  	
  57
  Liters at 500 psig, 70’F

  
	
  Cylinder
  Treatment

  	
  Aculife/Megalife

  
	
  Valve

  	
  CGA
  625

  
	
  Label

  	
  As
  provided

  
	
  Packaging

  	
  Single
  white box

  
	
  Shelf
  life:

  	
  Minimum
  one year, extended as available

  



 


11

















 


Exhibit A


Product Specifications, continued


 


	
  INOcal
  Regulator

  	
   

  
	
  Product:
  Calibration Regulator

  
	
  Scott
  Product Code: 0305138M625

  
	
  Material
  of Construction:

  	
   

  
	
  Body

  	
  Stainless
  Steel

  
	
  Wetted Parts

  	
  Teflon,
  Viton

  
	
  Flow
  range:

  	
  300-550
  SCCM

  
	
  Supply
  Pressure range:

  	
  60-550
  psig

  
	
  Labeling:

  	
  Part number,
  manufacturer date code/serial number, country of manufacture

  
	
  Gauge:

  	
  Custom

  
	
  Inlet:

  	
  CGA
  625

  
	
  Outlet:

  	
  1/8”
  Hose Barb

  
	
   

  	
   

  
	
  INOcal
  Tubing

  	
   

  
	
  Scott
  Product Code: 0305INOTUBE

  
	
  Components:

  	
  3
  equal lengths of 3” Silicon Rubber tubing,

  
	
   

  	
  1
  Luer fitting

  
	
   

  	
  1
  Plastic Check valve

  
	
   

  	
  1
  T-fitting

  
	
  Assembly:

  	
  Assembled
  in t-configution, check valve vent out

  



 


Complete
Kit- Case


Scott
Product Code: 0305ITCALKIT


One
Nitric Oxide Calibration Gas


One
Nitrogen Dioxide Calibration Gas


2
INOcal regulators


2
Tubing sets


1
Instruction sheet


Packaged
in hard sided case with INO label


 


Complete
Kit-Boxed


Scott
Product Code: 0305ITCALKITBX


Same
as Complete Kit-Case, except packaged in box instead of case


 


12

















 


Exhibit B


Drug
Substance Specifications


 


	
  Pure
  Nitric Oxide Drug Substance

  
	
   

  	
   

  
	
  Product
  purity:

  	
  98%
  Minimum Purity

  
	
  Cylinder:

  	
  A(200)
  size

  
	
  Valve:

  	
  CGA
  660/626, no safety

  
	
  Pressure:

  	
  300
  psi

  
	
  Contents:

  	
  2.4
  lbs/cylinder

  
	
  Maximum
  impurities:

  	
   

  
	
  NO2

  	
  < 625 ppm

  
	
  SO2

  	
  < 100 ppm

  
	
  N2O

  	
  < 10,000 ppm

  
	
  CO2

  	
  < 7,500 ppm

  
	
  N2 & Ar

  	
  <10,000 ppm

  
	
  Total impurities

  	
  <20,000 ppm

  
	
   

  
	
  Certificate:

  	
  Required
  with each shipment

  
	
  Analysis:

  	
  Verification
  by validated analytical method required for all impurities

  
			



 


13

















 


Exhibit C


Pricing


 


	
  Product
  Description

  	
   

  	
  SMP Product Code

  	
   

  	
  Price

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  45
  ppm NO, Bal. N2

  	
   

  	
  03047041IT
  6

  	
   

  	
  [**]

  
	
  50
  ppm NO, Bal. N2

  	
   

  	
  030246121OH
  BL

  	
   

  	
  [**]

  
	
  10
  ppm NO2, Bal. Air

  	
   

  	
  03046069IT
  6

  	
   

  	
  [**]

  
	
  15
  ppm NO2, Bal. Air

  	
   

  	
  030247008OH
  BL

  	
   

  	
  [**]

  
	
  Complete
  INOcal Kit

  	
   

  	
  0305ITCALKIT

  	
   

  	
  [**]

  
	
  INOcal
  Kit - Boxed

  	
   

  	
  0305ITCALKITBX

  	
   

  	
  [**]

  
	
  INOcal
  Regulator

  	
   

  	
  0305138M625

  	
   

  	
  [**]

  
	
  INOcal
  Tubing set

  	
   

  	
  0305INOTUBE

  	
   

  	
  [**]

  
	
  INOcal
  Carrying Case

  	
   

  	
  0305INOCASE

  	
   

  	
  [**]

  



 


14

















 


FIRST AMENDMENT TO SUPPLY
AGREEMENT AND ASSIGNMENT


 


This First Amendment to
Supply Agreement and Assignment (“Amendment”) is entered into by and between Scott Medical Products, a division of Scott Specialty
Gases, Inc. (“Scott”), AGA AB
(“AGA”), and INO Therapeutics LLC
(“INO-T’).


 


WHEREAS, Scott and AGA entered into a Supply
Agreement effective September 15, 1999 (the “Agreement”);


 


WHEREAS, as of the date hereof, the parties have
agreed that all of AGA’s right, title and interest in, to and under the
Agreement and all of AGA’s rights to any benefits thereunder will be assigned
to INO-T in accordance with Section 7.1 of the Agreement; and


 


WHEREAS, the parties have discussed certain issues
relating to the supply of Products; and


 


WHEREAS, the parties have agreed to modify the terms
of the Agreement to specify certain supply and quality Agreement requirements,
and AGA’s specific remedies in the event of the failure of Scott to meet the
agreed upon requirements.


 


NOW, THEREFORE, in consideration of the
mutual covenants set forth in this Amendment, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties, intending to be legally bound hereby, agree as follows:


 


1.                                      AMENDMENT TO AGREEMENT


 


1.1                                 The first sentence of Section 2.2
Estimated Purchases is deleted
and replaced with the following:


 


On or before the [**] day of
each month, AGA will provide Scott with a rolling [**] month forecast of its
requirements for Products, such forecasts to be considered good-faith estimates
only, for planning purposes, and not to be considered as guarantees of the
volumes or timing of such requirements; provided that the first [**] months of
such rolling forecast shall constitute a firm commitment unless modified by the
parties by subsequent written agreement.


 


1.2                                 Section 2.3 is deleted
and replaced with the following:


 


2.3                                 Exclusivity
and Delivery of Products:  Scott
shall be AGA’s exclusive worldwide supplier of Products and AGA shall be
Scott’s exclusive purchaser of any INOtherapyTM related calibration gases,
including the Products, subject to the terms and conditions set forth in this Section 2.3.


 


Scott shall, at all times
during the Term, deliver (as defined by an ex-factory ship date no earlier than
[**] days prior to the due date set forth in the applicable purchase order) a
minimum of [**] percent ([**]%) of Products, as measured in individual
cylinders of calibration gases ordered by AGA in any consecutive [**] month
period of time (in accordance with the terms set forth in Sections 2.2 and 


 

















 


2.6, or unless modified by
the parties by subsequent written agreement) and that all such Products shall
comply with the Product Specifications, including without limitation,
packaging, labeling and the inclusion of the Products’ Material Safety Data
Sheet (hereinafter the “Delivery Requirements”).


 


By way of example only, if
in a given [**] month period, the firm commitment for Product was [**]
cylinders of Product, Scott would be in compliance with the [**] percent
([**]%) requirement if [**] or more cylinders were delivered in a timely manner
and in compliance with all Product Specifications.


 


In order to maintain the
[**] percent ([**]%) requirement, Scott agrees to maintain no less than [**]
months inventory of Nitrogen filled Scotty-6 cylinders for the production of
calibration gas.


 


At any time that Scott fails
to meet the Delivery Requirements (hereinafter a “Supply Default”), then, in
addition to any other remedies provided under applicable law or this Agreement,
AGA shall have the right, but not the obligation, to purchase Products set
forth in such purchase order from a third party.


 


In addition, in the event of
[**] or more Supply Defaults during any consecutive [**] month period of time,
then, in addition to any other remedies provided under applicable law or this
Agreement, AGA shall have the right, but not the obligation, within [**] days
from the occurrence of the last Supply Default, upon [**] days written notice
to Scott, to delete its obligation to purchase Products exclusively from
Scott.  [**] days following the receipt
of such notice, Scott shall be a non-exclusive supplier of Products.


 


In the event Scott loses its
exclusivity, AGA shall continue to purchase from Scott at least [**] percent
([**]%) of its U.S. forecasted requirements (in accordance with the terms set
forth in Sections 2.2 and 2.6) during the Term of this Agreement, provided that
such Scott deliveries continue to meet the Delivery Requirements (timely, with
[**] percent ([**]%) delivered as set forth in Section 2.3 and in
compliance with Product Specifications).


 


During the Term, Scott shall
not use, sell, or otherwise dispose of the Products to any person or entity
other that AGA or its designee, except that this obligation shall cease upon
AGA’s exercise of its right to delete its obligation to purchase Products
exclusively from Scott.


 


1.3                                 Section 2.11 is amended
to add the following sentence at the end of Section 2.11:


 


In the event that Scott, in
its discretion, determines that Products must be shipped in a manner other than
that set forth in Section 2.8 above for any reason, including, without
limitation, for Scott to avoid a Supply Default, Scott shall be responsible for
incremental additional shipping costs incurred by AGA over and above those that
would have resulted from the Products being shipped in 


 


2

















 


accordance with Section 2.8,
which costs shall be credited by Scott in full to AGA.


 


1.4                                 Section 2.15 is amended
to add the following sentence at the end of Section 2.15:


 


For the avoidance of doubt,
the remedies set forth in this Section 2.15 are in addition to all other
remedies set forth in this Agreement, including, without limitation, the
ability of AGA to modify the exclusivity provisions of this Agreement as set
forth in Section 2.3, as amended.


 


1.5                                 Section 2.16 is amended
to add the following sentence at the end of Section 2.16:


 


Notwithstanding the
foregoing, nothing in this Section 2.16 shall prohibit Scott from
complying with all applicable FDA or equivalent international agency
regulations or requirements and all other applicable federal, state and local
laws and regulations.


 


1.6                                 Section 2.21 is amended
to add the following sentence at the end of Section 2.21:


 


Scott agrees to promptly
inform AGA in writing of any event or circumstance which could reasonably
affect its ability to fulfill the Delivery Requirements of any purchase order.


 


1.7                                 AGA assigns all right, title
and interest in, to and under the Agreement and all of AGA’s rights to any
benefits under the Agreement to INO Therapeutics LLC (“INO-T”) in accordance
with the terms of Section 7.1 of the Agreement.  INO-T accepts such assignment, and agrees to
assume, perform and comply with and to be bound by all of the terms, covenants,
agreements, provisions and conditions of the Agreement to performed on and
after the effective date of this Amendment. 
Scott consents to such assignment.


 


1.8                                 Section 5.4 is amended
to change “but not in excess of [**] months” to “but not in excess of [**]
months”.


 


1.9                                 Section 7.9 is deleted
and replaced with the following:


 


Force
Majeure:  Neither
Party will be held liable or responsible to the other Party nor be deemed to
have defaulted under or breached this Agreement for failure or delay in
fulfilling or performing any term of this Agreement, including, without
limitation, any Supply Default by Scott for purposes of Section 2.3,
except for the payment of any sums owing hereunder, when such failure or delay
is caused by or results from causes beyond the reasonable foreseeability and
control of the affected Party including but not limited to such causes
attributable to fire, floods, earthquakes, shortages, failure or delays of
energy, materials, supplies or equipment, breakdowns in machinery or equipment,
embargoes, wars, acts of war (whether war be declared or not), insurrection,
riots, civil commotion, acts of God or acts, omissions or delays in acting by
any governmental authority or other Party. 
In the event of a force majeure adversely affecting Scott’s ability to
supply 


 


3

















 


Product, AGA shall be
relieved of the exclusivity provisions of Article 2.3 during the pendency
of said force majeure.


 


2.                                      EFFECTIVE DATE
AND CONTINUING EFFECT OF AGREEMENT


 


2.1                                 This Amendment shall be
effective as of the date it is signed by both parties.


 


2.2                                 In the event of any conflict
between this Amendment and the Agreement, the terms of this Amendment shall
control.


 


2.3                                 All other terms and conditions
of the Agreement shall remain in full force and effect.  All defined terms in this Amendment shall
have the same meaning as set forth in the Agreement, unless otherwise defined
in this Amendment.


 


IN WITNESS WHEREOF, the parties have caused
this Amendment to be executed by duly authorized representatives on the dates
set forth below.


 


	
  Scott Medical Products, a division of Scott Specialty
  Gases, Inc.

  	
   

  	
  AGA AB

  
	
   

  	
   

  	
   

  
	
  By:

  	
  Scott
  Specialty Gases, Inc.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Linda J. Myrick

  	
   

  	
  By:

  	
  /s/
  Lars Kallsater

  
	
   

  	
  Name:
  Linda J. Myrick

  	
   

  	
   

  	
  Name:
  Lars Kallsater

  
	
   

  	
  Title:
  VP/GM Scott Medical Products

  	
   

  	
   

  	
  Title:
  Exec. Vice Pres

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  November 18,
  2004

  	
   

  	
  Date:

  	
  Nov
  23, 2004

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  INO Therapeutics LLC

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Dennis Smith

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Dennis
  Smith

  	
   

  	
   

  
	
   

  	
  Title:
  

  	
  President &
  CEO

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  11-22-04

  	
   

  	
   

  



 


4














 


SECOND AMENDMENT TO SUPPLY
AGREEMENT


 


This Second Amendment to Supply Agreement
(this “Second Amendment”) is entered into this 11th day of March 2008 (the “Second
Amendment Effective Date”) by and between Air Liquide Healthcare America
Corporation, assignee of Scott Medical Products, a division of Scott Specialty
Gases, Inc. (“ALHAC”), and INO Therapeutics LLC (“INO-T”).  The Second Amendment amends the Supply
Agreement entered into by and between Scott Medical Products and INO-T dated as
of the 15th of September 1999 (the “Supply
Agreement”), as amended by the First Amendment to Supply Agreement and
Assignment entered into by and between Scott Medical Products and INO dated on
or about November 22, 2004 (the “First Amendment”); together with
the Supply Agreement, the “Agreement”).


 


1.             Background.  Section 5.1 of the Agreement provides
that notice not to renew the Agreement must be given at least 180 days before
the end of the then-current Renewal Term (as defined in the Agreement).  The current Renewal Term is due to end on September 14,
2008 and the next Renewal Term is due to begin on September 15, 2008.  Accordingly, if either party wishes not to
renew the Agreement for the next Renewal Term, notice must be given prior to March 14,
2008 (the “Notice Date”).  The
parties are currently engaged in discussions regarding possible modifications
to the Agreement.  It appears unlikely
that the parties will complete those discussions prior to the Notice Date.  Accordingly, the parties wish to defer the
Notice Date to a later date to provide the parties with more time to complete
their discussions.


 


2.             Deferral
of Notice Date.  The Notice Date is
hereby deferred until May 14, 2008. 
By way of confirmation only, the parties acknowledge and agree that a
notice not to renew for the Renewal Period commencing on September 15,
2008 may be given at any time prior to or on May 14, 2008.


 


3.             Ratification
of Agreement.  Except as set forth in
Section 2 of this Second Amendment, all of the other terms and
conditions of the Agreement are hereby ratified and confirmed to be of full
force and effect, and shall continue in full force and effect.  This Amendment is hereby integrated into and
made a part of the Agreement.


 


4.             Counterparts.  This Second Amendment may be executed in two counterparts,
each of which shall be effective as of the Second Amendment Effective Date, and
all of which shall constitute one and the same instrument.  Each such counterpart shall be deemed an
original, and it shall not be necessary in making proof of this Second
Amendment to produce or account for more than one such counterpart.


 


5.             Execution
and Delivery.  This Second Amendment
shall be deemed executed by the parties when any one or more counterparts
hereof, individually or taken together, bears the signatures of each of the
parties hereto.


 


1

















 


	
  Acknowledged and Agreed to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Air Liquide Healthcare America Corporation

  	
   

  	
  INO Therapeutics LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Linda J. Myrick

  	
   

  	
  By:

  	
  /s/ Todd L. Dixon

  
	
   

  	
  Signature

  	
   

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Linda
  J. Myrick

  	
   

  	
  Todd
  L. Dixon

  
	
  Printed Name

  	
   

  	
  Printed Name

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  VP/GM
  ALHAC/Scott Medical

  	
   

  	
  V.P.
  Operations

  
	
  Title

  	
   

  	
  Title

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  March 11,
  2008

  	
   

  	
  12
  March 2008

  
	
  Date

  	
   

  	
  Date

  



 


2

















 


THIRD AMENDMENT TO SUPPLY
AGREEMENT


 


This Third Amendment to
Supply Agreement (this “Third Amendment”) is entered into this 1st day of October 2008 (the “Third
Amendment Effective Date”) by and between Air Liquide Healthcare America
Corporation, assignee of Scott Medical Products, a division of Scott Specialty
Gases, Inc. (“ALHAC”), on the one hand, and INO Therapeutics LLC (“INO-T”)
on the other hand.  The Third Amendment
amends the Supply Agreement entered into by and between ALHAC and INO-T dated
as of the 15th of September 1999 (the “Supply
Agreement”), as amended by the First Amendment to Supply Agreement and
Assignment entered into by and between ALHAC and INO-T dated on or about November 22,
2004 (the “First Amendment”) and the Second Amendment to Supply
Agreement entered into by and between ALHAC and INO-T dated March 11, 2008
(the “Second Amendment”).  The
Supply Agreement, together with the First Amendment and the Second Amendment
are collectively referred to herein as the “Agreement”.


 


1.             Background.  INO-T has expressed to ALHAC that INO-T is
concerned that any disruption in the supply of Products (as defined in the
Agreement) to INO-T’s customers could have a serious, negative impact on
patient safety and also on INO-T’s business. 
The parties acknowledge that due to the nature of the Products
qualifying and engaging additional suppliers of the Products is a difficult and
lengthy process.  In order to limit the
potential impact of any disruption in the Products by ALHAC, the parties now
wish to further modify the Agreement as set forth in this Third Amendment.


 


2.             Modification of Section 2.2.  Section 2.2 of the Agreement is
hereby amended and restated in its entirety as follows:


 


Estimated Purchases:  INO-T will provide ALHAC at the beginning of
each month with a rolling [**] month forecast of its requirements for the
Products, such forecast to be considered good faith estimates only, for
planning purposes, and not to be considered as guarantees of the volumes or
timing of such requirements; provided that the first [**] months of such
rolling forecast shall constitute a firm commitment unless modified by the
Parties by subsequent written agreement.


 


For the period October 1,
2008 through September 30, 2009, INO-T agrees to purchase not less than
[**] cylinders of Products (hereinafter the “Total Cylinders”) and [**] Kits
with equivalent quarterly volumes.  Total
Cylinders and Kits will include Product sold to Datex-Ohmeda and AGA France.


 


On a quarterly basis, INO-T
agrees to a true-up mechanism to account for Total Cylinders and Kits not
purchased.  For the first [**] of the
twelve (12) month period, INO-T will agree to purchase the quarterly commitment
of [**] Total Cylinders and [**] Kits. 
For the [**], INO-T can choose to accept either the balance of Total
Cylinders and Kits, or pay the remaining balance.


 


Annual volume for subsequent years will be reviewed
and agreed upon no later than [**] days prior to the start of the next annual
period.


 


1

















 


3.             Modification of Section 2.3.  Section 2.3 of the Agreement is
hereby amended and restated in its entirety as follows:


 


Exclusivity and Delivery
of Products:  ALHAC shall
be INO-T’s non-exclusive worldwide supplier of Products as defined in Exhibit A,
including the Nitric Oxide Calibration Gases and Nitrogen Dioxide Calibrations
Gases set forth in Exhibit A and made with the Pure Nitric Oxide Drug
Substance supplied to ALHAC by INO-T and disclosed in Exhibit B.  INO-T shall be ALHAC’s exclusive purchaser of
Nitric Oxide Calibration Gases and Nitrogen Dioxide Calibration Gases made with
the Pure Nitric Oxide Drug Substance supplied by INO-T.  However, nothing in this Section 2.3
shall prevent ALHAC from selling calibration gases to third parties provided
that the calibration gases sold to third parties are not made with the Pure
Nitric Oxide Drug Substance disclosed in Exhibit B, or any Pure Nitric
Oxide Drug Substance supplied by INO-T, it’s subsidiaries or affiliates.


 


ALHAC shall, at all times
during the Term, deliver (as defined by an ex-factory ship date no earlier than
[**] days prior to the due date set forth in the applicable purchase order) a
minimum of [**] percent ([**]%) of Products, as measured in individual
cylinders of calibration gases ordered by INO-T in any consecutive [**] month
period of time (in accordance with the terms set forth in Sections 2.2 and 2.6,
or unless modified by the parties by subsequent written agreement) and that all
such Products shall comply with the Product Specifications, including without
limitation, packaging, labeling and the inclusion of the Products’ Material
Safety Data Sheet (hereinafter the “Delivery Requirements”)


 


By way of example only, if
in a given [**] month period, the firm commitment for Product was [**] cylinders
of Product, ALHAC would be in compliance with the [**] percent ([**]%)
requirement if [**] or more cylinders were delivered in a timely manner and in
compliance with all Product Specifications.


 


In order to maintain the
[**] percent ([**]%) requirement, ALHAC agrees to maintain no less than [**]
months inventory of nitrogen-filled Scotty-6 cylinders for the product of
calibration gas.


 


If ALHAC at any time fails
to meet the Delivery Requirements in a [**], INO-T’s [**] minimum purchase
amounts for Total Cylinders or Kits will not apply for the [**], and the annual
true-up be reduced by the [**] amount. 
For example, if ALHAC failed to meet the Delivery Requirement for Total
Cylinders in the [**], then INO-T would not be required to purchase a total of [**]
Total Cylinders in the [**], and the annual requirement would be reduced to
[**] Total Cylinders.


 


Subject to the first
paragraph of this subsection, during the Term, ALHAC shall not use, sell, or
otherwise dispose of the Products to any person or entity other than INO-T or
its designee.


 


4.             Modification of Section 2.5.  Section 2.5 of the Agreement is
hereby amended and restated in its entirety as follows:


 


Price:  The prices for the Products shall be as set
forth in Exhibit C attached hereto and made a part hereof.  Such prices shall remain firm for one (1) year
after the Effective Date.  


 


2

















 


Thereafter,
these prices shall be subject to adjustment annually on the anniversary of such
Effective Date, upon the good faith negotiation and agreement of both Parties,
and dependent on the volume projection for the subsequent twelve (12) month
period.  However, if INO-T’s annual
forecast for the following contract year increases by [**]% or more, ALHAC
agrees to cap the annual price increase to [**]%.


 


In the event that INO-T
exceeds its forecasted volume of [**] Total Cylinders and [**] Kits during the
period from October 1, 2008 until September 30, 2009, the pricing
from Exhibit C will be discounted by [**]% for volume in excess of [**]
Total Cylinders and [**] Kits.


 


5.             Modification to Length of Subsequent Renewal Terms.  Any Renewal Terms (as defined in Section 5.1
of the Agreement) of the Agreement commencing after the Third Amendment
Effective Date shall be for periods of three years each, instead of two years
each as stated in Section 5.1 of the Agreement.  By way of illustration only, the Renewal Term
that would commence on September 15, 2008 would end on September 14,
2011, instead of September 14, 2010.


 


6.             Modification of Exhibit A, B and C.  Exhibits A, B and C to the Agreement are
hereby amended and restated in entirety and attached.


 


7.             Ratification of Agreement.  Except as set forth in Sections 2
through 6 of this Third Amendment, all of the other terms and conditions
of the Agreement are hereby ratified and confirmed to be of full force and
effect, and shall continue in full force and effect.  This Third Amendment is hereby integrated
into and made a part of the Agreement.


 


8.             Counterparts. 
This Third Amendment may be executed in two counterparts, each of which
shall be effective as of the Third Amendment Effective Date, and all of which
shall constitute one and the same instrument. 
Each such counterpart shall be deemed an original, and it shall not be
necessary in making proof of this Third Amendment to produce or account for
more than one such counterpart.


 


9.             Execution and Delivery.  This Third Amendment shall be deemed executed
by the parties when any one or more counterparts hereof, individually or taken
together, bears the signatures of each of the parties hereto.


 


3

















 


Acknowledged and Agreed to:


 


	
  Air
  Liquide Healthcare America Corporation

  	
   

  	
  INO
  Therapeutics LLC

  
	
   

  	
   

  	
   

  
	
  By:
  /s/ Larry W. Bohannon

  	
   

  	
  By:
  /s/ Todd L. Dixon

  
	
  Signature

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  
	
  Larry
  W. Bohannon

  	
   

  	
  Todd
  L. Dixon

  
	
  Printed Name

  	
   

  	
  Printed Name

  
	
   

  	
   

  	
   

  
	
  CEO

  	
   

  	
  Vice
  President, Operations

  
	
  Title

  	
   

  	
  Title

  
	
   

  	
   

  	
   

  
	
  November       ,
  2008

  	
   

  	
  November 
  6 , 2008

  
	
  Date

  	
   

  	
  Date

  



 


4

















 


Exhibit A - Product
Specifications


 


	
  Nitric
  Oxide Calibration Gas:

  	
   

  
	
  Composition

  	
  45
  ppm Nitric Oxide, bal Nitrogen

  
	
  Blend
  Tolerance

  	
  +/-
  2% relative

  
	
  Analytical
  Tolerance

  	
  +/-
  2% relative

  
	
  Stability
  Tolerance

  	
  +/-
  4% relative

  
	
  Cylinder

  	
  Scotty
  VI

  
	
  Valve

  	
  CGA
  625

  
	
  Cylinder
  Treatment

  	
  Aculife

  
	
  Label

  	
  As
  provided

  
	
  Packaging

  	
  Single
  white box

  
	
  Shelf
  life

  	
  Two
  years

  



 


	
  ALHAC P/N

  	
   

  	
  Ikaria
  P/N

  	
   

  	
  Description

  	
   

  	
  Cylinder
  Capacity

  
	
  03047041IT
  6

  	
   

  	
  111-119

  	
   

  	
  US
  Cal Gas

  	
   

  	
  54
  liters

  
	
  03047041ITI
  6

  	
   

  	
  111-119

  	
   

  	
  International
  Cal Gas

  	
   

  	
  54
  liters

  
	
  03047041ITC
  6

  	
   

  	
  222-119

  	
   

  	
  Canada
  Cal Gas

  	
   

  	
  54
  liters

  
	
  03047041ITJ
  6

  	
   

  	
  333-119

  	
   

  	
  Japan
  Cal Gas

  	
   

  	
  47
  liters

  
	
  03047041OP
  6

  	
   

  	
  6016-0000-119

  	
   

  	
  Datex-Ohmeda
  Cal Gas

  	
   

  	
  54
  liters

  



 


	
  Nitrogen
  Dioxide Calibration Gas:

  	
   

  
	
  Composition

  	
  10
  ppm Nitrogen Dioxide, bal Air

  
	
  Blend
  Tolerance

  	
  +/-
  5% relative

  
	
  Analytical
  Tolerance

  	
  +/-
  5% relative

  
	
  Stability
  Tolerance

  	
  +/-
  10% relative

  
	
  Cylinder

  	
  Scotty
  VI

  
	
  Valve

  	
  CGA
  625

  
	
  Cylinder
  Treatment

  	
  Aculife/Megalife

  
	
  Label

  	
  As
  provided

  
	
  Packaging

  	
  Single
  white box

  
	
  Shelf
  life

  	
  Two
  years

  



 


	
  ALHAC
  P/N

  	
   

  	
  Ikaria P/N

  	
   

  	
  Description

  	
   

  	
  Cylinder Capacity

  
	
  03046069IT
  6

  	
   

  	
  111-120

  	
   

  	
  US
  Cal Gas

  	
   

  	
  54
  liters

  
	
  03046069ITI
  6

  	
   

  	
  111-120

  	
   

  	
  International
  Cal Gas

  	
   

  	
  54
  liters

  
	
  03046069ITC
  6

  	
   

  	
  222-120

  	
   

  	
  Canada
  Cal Gas

  	
   

  	
  54
  liters

  
	
  03046069ITJ
  6

  	
   

  	
  333-120

  	
   

  	
  Japan
  Cal Gas

  	
   

  	
  47
  liters

  
	
  03046069OP
  6

  	
   

  	
  6016-0000-120

  	
   

  	
  Datex-Ohmeda
  Cal Gas

  	
   

  	
  54
  liters

  



 


	
  ALHAC
  P/N

  	
   

  	
  Ikaria P/N

  	
   

  	
  Description

  
	
  0305138IT625N

  	
   

  	
  000-012

  	
   

  	
  Model
  38 Regulator w/spiral wound gage

  
	
  0305INOREGKITN

  	
   

  	
  000-013

  	
   

  	
  Regulator
  Kit w/tubing

  



 

















 


Exhibit B — Drug
Substance Specifications


 


	
  Method

  	
   

  	
  Test

  	
   

  	
  Specification

  
	
  QC-0300

  	
   

  	
  Identification

  	
   

  	
  Positive identification is
  demonstrated if the sample exhibits a peak at 1875.5 ± 0.5 wavenumbers.

  
	
  QC-0297

  	
   

  	
  Assay

  	
   

  	
  NLT 99.0 %

  
	
  QC-0019

  	
   

  	
  Nitrogen Dioxide

  	
   

  	
  NMT 400 ppm

  
	
   

  	
   

  	
  Nitrous Oxide

  	
   

  	
  NMT 3,000 ppm

  
	
   

  	
   

  	
  Carbon Dioxide

  	
   

  	
  NMT 3,000 ppm

  
	
  QC-0020

  	
   

  	
  Nitrogen

  	
   

  	
  NMT 3,000 ppm

  
	
  N/A*

  	
   

  	
  Assay (Mass Balance)

  	
   

  	
  NLT 99.0%

  
	
  QC-0019  +  QC-0020

  	
   

  	
  Total Impurities

  	
   

  	
  NMT 10,000 ppm

  



 






*
Mass balance equation:  100% - (sum of
measured impurities), with results rounded to 1 decimal place.


 

















 


EXHIBIT C - PRICING
AMENDMENT


 


	
  SMP
  P/N

  	
   

  	
  Description - Gases

  	
   

  	
  INO P/N

  	
   

  	
  Current

  Price*

  	
   

  	
  New Price **

  
	
  03046069IT 6

  	
   

  	
  10ppm NO2, Balance Air

  	
   

  	
  111-120

  	
   

  	
  [**]

  	
   

  	
  [**]

  
	
  03046069ITC 6

  	
   

  	
  10ppm NO2, Balance Air
  (Canada)

  	
   

  	
  222-120

  	
   

  	
  [**]

  	
   

  	
  [**]

  
	
  03046069ITI 6

  	
   

  	
  10ppm NO2, Balance Air
  (International)

  	
   

  	
  111-120

  	
   

  	
  [**]

  	
   

  	
  [**]

  
	
  03046069OP 6

  	
   

  	
  10pptn NO2, Balance Air
  (Datex-Ohmeda)

  	
   

  	
  6016-0000-120

  	
   

  	
  [**]

  	
   

  	
  [**]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  03047041IT 6

  	
   

  	
  45ppm NO, Balance N2

  	
   

  	
  111-119

  	
   

  	
  [**]

  	
   

  	
  [**]

  
	
  03047041ITC 6

  	
   

  	
  45ppm NO, Balance N2 (Canada)

  	
   

  	
  222-119

  	
   

  	
  [**]

  	
   

  	
  [**]

  
	
  03047041ITI 6

  	
   

  	
  45ppm NO, Balance N2
  (International)

  	
   

  	
  111-119

  	
   

  	
  [**]

  	
   

  	
  [**]

  
	
  03047041OP 6

  	
   

  	
  45ppm NO, Balance N2 (Datex-Ohmeda)

  	
   

  	
  6016-0000-119

  	
   

  	
  [**]

  	
   

  	
  [**]

  



 


	
  SMP
  P/N

  	
   

  	
  Description - Equipment

  	
   

  	
  INO P/N

  	
   

  	
  Current

  Price*

  	
   

  	
  New Price **

  
	
  0305INOREGKIT

  	
   

  	
  Regulator Kit w/Tubing
  (Domestic/International) w/current Regulator

  	
   

  	
  000-011

  	
   

  	
  [**]

  	
   

  	
  [**]

  
	
  0305INOREGKITN

  	
   

  	
  Regulator Kit w/Tubing
  (Domestic/International) w/new spiral wound gauge

  	
   

  	
  000-013

  	
   

  	
  [**]

  	
   

  	
  [**]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  0305138IT625

  	
   

  	
  Model 38 Regulator w/current
  Regulator

  	
   

  	
  000-010

  	
   

  	
  [**]

  	
   

  	
  [**]

  
	
  0305138IT625N

  	
   

  	
  Model 38 Regulator
  w/new spiral wound gauge

  	
   

  	
  000-012

  	
   

  	
  [**]

  	
   

  	
  [**]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  0305INOCAL FIT

  	
   

  	
  Fitting Assembly

  	
   

  	
  000-106

  	
   

  	
  [**]

  	
   

  	
  [**]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  0303DOCFEE

  	
   

  	
  Documentation Fee for
  AGA Medical Only

  	
   

  	
  Per P.O

  	
   

  	
  [**]

  	
   

  	
  [**]

  



 






*
Effective through 9/30/08


**
Effective 10/1/08 and firm for 12 months