Document:

Exhibit 10.18

 

EXECUTION VERSION

 

AMENDED AND RESTATED
EMPLOYMENT AGREEMENT

 

AMENDED AND RESTATED
EMPLOYMENT AGREEMENT by and between Ikaria Holdings, Inc., a Delaware
corporation (the “Company”), and Daniel Tassé (the “Executive”),
dated as of the 1st day of June, 2009 (this “Agreement”).

 

WHEREAS, the Executive
possesses skills, experience and knowledge that are of value to the Company;

 

WHEREAS, the Company desires
to continue to employ the Executive as its Chief Executive Officer, and the
Executive is willing to continue such employment, in each case on the terms and
conditions set forth herein; and

 

WHEREAS, the Executive and
the Company previously entered into an Employment Agreement dated as of January 21,
2008 (the “Original Agreement”) and now wish to amend and restate the
Original Agreement In its entirely as set forth in this Agreement.

 

NOW, THEREFORE, in
consideration of the promises and mutual covenants herein contained, the
parties hereto agree as follows:

 

1.             Employment Period.  The Company shall employ the Executive, and
the Executive shall serve the Company, on the terms and conditions set forth in
this Agreement, for the period commencing on June 1, 2009 (the “Effective
Date”), and ending on May 31, 2011 (the “Initial Term”); provided,
however, that commencing on May 31, 2011 and each annual
anniversary of such date (May 31, 2011, and each annual anniversary
thereof, shall hereinafter be referred to as the “Renewal Date”), unless
previously terminated, the Term shall be automatically extended so as to
terminate two years from the applicable Renewal Date (each such two year
renewal, a “Renewal Term,” and the Initial Term together with all
Renewal Term(s), the “Term”), unless at least ninety (90) days prior to
such Renewal Date the Company or the Executive shall give written notice to the
other party that the Term shall not be so extended.  The Executive’s period of employment pursuant
to this Agreement shall hereinafter be referred to as the “Employment Period.”

 

2.             Position and Duties.

 

(a)           During the Employment
Period, the Executive shall serve as Chief Executive Officer of the Company,
with such duties and responsibilities as are customarily assigned to such
position or specified in the Company’s by-laws, and such other duties and
responsibilities not inconsistent therewith as may be assigned to the Executive
from time to time by the Company.  In
such capacity, the Executive shall report to the Company’s Executive Chairman
or Chairman.  During the Employment
Period, the Company shall nominate (and renominate, as appropriate) the
Executive and, if elected by the Company’s stockholders, the Executive shall
serve as a member of the Company’s Board of Directors (the “Board”).

 

(b)           During the Employment
Period, and excluding any periods of vacation and sick leave to which the
Executive is entitled, the Executive shall devote his full business

 

 

time
and efforts to the business and affairs of the Company and use his best efforts
to carry out such responsibilities faithfully and efficiently.  During the Employment Period, the Executive
shall not be engaged in any other business activity without the prior written
consent of the Company except for time spent in managing his personal,
financial and legal affairs, in each case only if, and to the extent that, such
activities do not interfere with the performance of the Executive’s duties and
responsibilities hereunder or otherwise result in a breach of this Agreement.

 

(c)           The Executive’s services
hereunder shall be performed at the Company’s Clinton, New Jersey headquarters,
subject to such business travel as may be required from time to time.

 

3.             Compensation.

 

(a)           Base Salary.  During the Employment Period, the Executive
shall receive a base salary (such base salary, as it may be increased from time
to time hereunder, the “Annual Base Salary”) at the annual rate of
$425,000.  The Annual Base Salary shall
be payable in accordance with the Company’s payroll practices as in effect from
time to time, subject to applicable taxes and withholding.  During the Employment Period, the Annual Base
Salary shall be reviewed for possible merit increases at least annually but
shall not be reduced during the Employment Period.

 

(b)           Annual Bonus.  For each calendar year ending during the
Employment Period, the Executive shall be eligible to earn an annual cash bonus
payable in accordance with the terms of the Company’s management incentive
program at a target of 100% of Annual Base Salary, or such higher level
established by the Company from time to time (the “Annual Bonus”).

 

(c)           Benefits.  During the Employment Period, the Executive
and/or the Executive’s family, as the case may be, shall be provided with such
employee benefits, and under the same terms, as are provided by the Company
from time to time to its executives.  The
Company reserves the right to modify or terminate its benefits plans generally
for employees.

 

(d)           Vacation.  During each year of the Employment Period,
the Executive shall be entitled to paid vacation consistent with the Company’s
practices, policies and programs for its senior executives; provided
that the Executive shall be entitled to no less than four (4) weeks of
paid vacation during each year of the Employment Period.

 

(e)           Business and Entertainment
Expenses.  During the
Employment Period, the Executive shall be entitled to receive prompt
reimbursement for all reasonable expenses, incurred by the Executive in
carrying out the Executive’s duties under this Agreement; provided that
the Executive complies with the policies, practices and procedures of the
Company for submission of expense reports, receipts, or similar documentation
of such expenses.

 

4.             Termination of Employment.

 

(a)           Death or Disability.  The Executive’s employment hereunder shall
terminate automatically upon the Executive’s death during the Term.  The Company shall, to the

 

 

full
extent permitted by law, be entitled to terminate the Executive’s employment
because of the Executive’s “Disability” (as herein defined) during the
Term.  “Disability” means the
permanent disability of the Executive in accordance with the long-term
disability plan of the Company applicable to the Executive.

 

(b)           By the Company.  The Company may terminate the Executive’s
employment hereunder during the Term for Cause or without Cause.  For purposes of this Agreement, the term “Cause”
shall be defined as:  (A) disloyalty
or dishonesty which results or is intended to result in material personal
enrichment to Executive at the material expense of the Company or any of its
subsidiaries (including, without limitation, fraud, embezzlement or dishonesty
or breach of business ethics); (B) fraudulent conduct in connection with
the material business or affairs of the Company or any of its subsidiaries that
materially and adversely affects the Company or any of its subsidiaries; (C) conviction
of a felony or any crime involving moral turpitude (or entering into a plea of
nolo contendere with respect to such crime); (D) gross misconduct that
materially and adversely affects the Company; (E) any breach or intended
breach of any Company policies or procedures as in effect from time to time, in
each case constituting a material violation of such policies or procedures, and
in each case causing material harm to the Company; or (F) failure by the
Executive to provide thirty (30) days advance written notice of resignation; provided
that in the case of subsection (E) of this Section 4(b), the Company
shall give written notice to the Executive at least ten (10) days prior to
such termination (“Notice of Termination for Cause”) of the Company’s
intent to terminate, which notice shall set out in detail the ways in which
Executive has materially breached or expressed an intent to breach materially a
Company policy or procedure in such a way as to cause the Company material
harm, and Executive shall have failed to cure such breach prior to the
expiration of ten (10) days following the date on which such notice is
provided to him; and provided  further that with respect to the
Executive’s violation of Subsection (E) of this Section 4(b), the Executive
shall have only one opportunity to cure such failure and thereafter may be
terminated immediately in connection with subsequent violations of Subsection (E) of
this Section 4(b).

 

(c)           By the Executive for Good
Reason.  The Executive may terminate
the Executive’s employment hereunder during the Term for Good Reason or other
than for Good Reason.  For purposes of
this Agreement, “Good Reason” means that the Company has engaged in any
of the following without the Executive’s consent:

 

A.            any material and adverse
change in the Executive’s position, title or status, any change in the
Executive’s job duties, authority or responsibilities to those of lesser
status, or any obligation that the Executive report other than to the Executive
Chairman or Chairman and the Board;

 

B.            any material and adverse
breach of this Agreement by the Company; provided, that any failure of a
successor to assume and agree to perform under this Agreement required by Section 7(c) shall
be deemed to be a material and adverse breach of this Agreement by the Company;

 

 

C.            relocation of the Company’s
headquarters more than fifty (50) miles from its present location or transfer
of Executive to any location more than fifty (50) miles from the location of
the current headquarters; or

 

D.            any material and adverse
change in the Executive’s compensation or benefits;

 

provided, that, following a Change
in Control, any change (in the case of clauses (A) and (D)) and any breach
(in the case of clause (B)), in each case whether or not material and adverse,
shall constitute Good Reason hereunder and (in the case of clause (A)) a change
shall be deemed to have occurred if, following a Change in Control in which the
Company becomes controlled by another entity (a “Parent Company”) (i) the
Executive’s position, title, status, job duties, authority or responsibilities
with the Parent Company are not equivalent to his position, title, status, job
duties, authority and responsibilities with the Company immediately prior to
the Change in Control and/or (ii) the Executive is obligated to report
other than to the Executive Chairman or Chairman and the Board of Directors of
the Parent Company.  For purposes of this
Agreement, a “Change in Control” shall have occurred if, after the
Effective Date, (A) any “Person” (as the term person is used for purposes
of Section 13(d) or 14(d) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”)) (other than any Person that
includes New Mountain Partners II, L.P., New Mountain Affiliated Investors II,
L.P. or Allegheny New Mountain Partners, L.P. or any of their affiliates (an “Excluded
Person”)), is the “Beneficial Owner” (within the meaning of Rule 13d-3
promulgated under the Exchange Act), directly or indirectly, of more than 50%
of the voting capital stock of the Company, (B) any Person other than an
Excluded Person has or obtains the right to elect a majority of the Board or (C) the
Company sells in a single transaction or series of transactions all or
substantially all of its assets; and provided, that, for avoidance of doubt, an
initial public offering of securities of the Company shall not constitute a
Change in Control for purposes of this Agreement.

 

A termination of employment by the Executive for
Good Reason shall be effectuated by giving the Company written notice (“Notice
of Termination for Good Reason”) of the termination, setting forth the
conduct of the Company that constitutes Good Reason, within ninety (90) days of
the first date on which the Executive has knowledge of such conduct.  The Executive shall further provide the
Company at least thirty (30) days following the date on which such notice is
provided to cure such conduct.  Failing
such cure, a termination of employment by the Executive for Good Reason shall
be effective on the day following the expiration of such cure period.

 

(d)           No Waiver.  The failure to set forth any fact or
circumstance in a Notice of Termination for Cause or a Notice of Termination
for Good Reason shall not constitute a waiver of the right to assert, and shall
not preclude the party giving notice from asserting, such fact or circumstance
in an attempt to enforce any right under or provision of this Agreement.

 

(e)           Date of Termination.  The “Date of Termination” means the
date of the Executive’s death, the date on which the Executive is designated as
having a Disability, or the date on which the termination of the Executive’s
employment by the Company or by the Executive is effective.

 

 

5.             Obligations of the Company
upon Termination.

 

(a)           Termination Other Than for
Cause; Termination for Good Reason; Non-Renewal of the Term.  If either (i) during the Term, (A) the
Company terminates the Executive’s employment, for any reason other than for
Cause, death or Disability, or (B) the Executive terminates his employment
for Good Reason, or (ii) the Executive terminates his employment at the
end of the Term and the Company has previously given notice to the Executive
that the Term will not be extended, then the Company shall pay the amounts and
provide the benefits, subject to and in accordance with Section 5(e) hereof,
in each case as set forth in paragraphs A through F below.

 

A.            The Executive’s earned and
accrued but unpaid cash compensation, in the form of a lump-sum payment, to be
paid not later than the regularly scheduled pay period next following the date
on which the Release becomes effective, which shall equal the sum of (i) any
portion of the Executive’s Annual Base Salary earned through the Date of
Termination that has not yet been paid, (ii) any unpaid Annual Bonus that
was earned by the Executive and declared due and owing by the Company, and (iii) any
accrued but unpaid vacation time, in each case subject to applicable taxes and
withholding (the amounts set forth in subclauses (i)-(iii) constitute the “Accrued
Obligations”).  The Company shall
also provide the Executive with any other benefits (other than severance
benefits) to which the Executive is entitled under the Company’s benefit plans
and arrangements as and when due under such plans and arrangements (the “Accrued
Benefits”).

 

B.            A pro rata portion of the
Executive’s Annual Bonus in the form of a lump-sum payment, which shall equal
the sum of the Executive’s Annual Bonus at target, multiplied by the number
equal to the sum of any partial and full months worked by the Executive in the
year of termination, divided by the number twelve (12) (the “Pro Rata Bonus”).

 

C.            Payments, payable in
accordance with the Company’s standard monthly payroll practices and subject to
withholding and taxes of an amount equal to the sum of one and one half (1.5)
times the sum of (i) the Executive’s Annual Base Salary and (ii) the
greater of the Annual Bonus at the target level and the actual Annual Bonus
most recently paid to the Executive, determined on a monthly basis, for a period
of eighteen (18) months from the Date of Termination (the “Salary
Continuation Severance Payments”).

 

D.            For eighteen (18) months
from the Date of Termination, and subject to the Executive electing COBRA
continuation coverage, the Company shall provide the Executive with medical,
dental and vision benefits at active-employee rates.

 

E.             A lump sum payment of $
27,395 in lieu of the annual financial planning, annual physical and life
insurance benefits (the “Benefit Payment”).

 

F.             The unvested portion of any
equity compensation granted to the Executive shall (whether or not specified in
the grant agreements evidencing such equity compensation) become immediately
vested as to that portion thereof that would become exercisable during the
period beginning on the Date of Termination and ending on the eighteen (18)
month anniversary of the Date of Termination, assuming that the Executive’s
employment

 

 

had
continued during the entirety of such period; provided, that if the Date
of Termination is on or after the date on which a Change in Control occurs,
then any equity compensation granted to the Executive shall (whether or not
specified in the grant agreements evidencing such equity compensation) become
fully vested as of the Date of Termination.

 

(b)           Death or Disability.  If the Executive’s employment is terminated
by reason of the Executive’s death or Disability during the Term, the Company
shall pay the Accrued Obligations to the Executive or the Executive’s estate or
legal representative, as applicable, in a lump-sum payment (subject to
applicable taxes and withholding) not later than the next regularly scheduled
pay period following the Date of Termination, and, following the Date of
Termination, the Company shall provide the Executive with the Accrued Benefits
as and when due.

 

(c)           Cause, etc.  If the Executive’s employment is terminated
by the Company for Cause during the Term, or if the Executive terminates his
employment during the Term other than for Good Reason, the Company shall pay
the Executive, in a lump-sum payment (subject to applicable taxes and
withholding) not later than the next regularly scheduled pay period following
the Date of Termination, the Accrued Obligations, and, following the Date of
Termination, the Company shall provide the Executive with the Accrued Benefits
as and when due.

 

(d)           Termination Other Than for
Cause, Termination for Good Reason, or Non-Renewal of the Term following a
Change in Control.  If either (i) within
eighteen (18) months following a Change in Control, (A) the Company
terminates the Executive’s employment for any reason other than for Cause,
death or Disability, or (B) the Executive terminates his employment for
Good Reason, or (ii) the Executive terminates his employment at the end of
the Term and the Company has given notice to the Executive within eighteen (18)
months following a Change in Control that the Term will not be extended, then
the Company shall, in addition to the payment and benefits provided for in
Sections 5(a)(A) through 5(a)(F) and subject to and in accordance
with Section 5(e), pay the amounts and provide the benefits described in
paragraphs (A) through (D) below:

 

A.            A lump sum payment equal to
one-half (.5) times the sum of (i) the Executive’s Annual Base Salary and (ii) the
greater of the Annual Bonus at the target level and the actual Annual Bonus
most recently paid to the Executive (the “CIC Severance Payment”).

 

B.            In addition to the
continuation coverage provided in Section 5(a)(D) hereof, and subject
to the Executive electing COBRA continuation coverage, the Company shall
provide the Executive with medical, dental and vision benefits at active-
employee rates for an additional six (6) months.

 

C.            A lump sum payment equal to
..34 times the Benefit Payment (the “CIC Benefit Payment”).

 

D.            The unvested portion of any
equity compensation granted to the Executive shall (whether or not specified in
the grant agreements evidencing such equity compensation) become immediately
fully vested.

 

 

If the Executive’s
employment is terminated by the Company for any reason other than for Cause,
death or Disability at any time prior to the date of a Change in Control and
either (i) such termination occurred after the Company entered into a
definitive agreement, the consummation of which would constitute a Change in
Control or (ii) the Executive was terminated at the request of a third
party who has indicated an intention or has taken steps reasonably calculated
to effect a Change in Control, such termination shall be deemed to have
occurred after a Change in Control, notwithstanding that such event or
condition occurred prior to a Change in Control, and the payments and benefits
described above in this Section 5(d) shall apply.

 

For purposes of this Section 5(d),
with respect to the definition of Good Reason, if any event or condition
described in Section 4(c) occurs at any time prior to the date of a
Change in Control and either (i) occurred after the Company entered into a
definitive agreement, the consummation of which would constitute a Change in
Control or (ii) was at the request of a third party who has indicated an
intention or has taken steps reasonably calculated to effect a Change in
Control, any resulting termination by the Executive for Good Reason shall be
deemed to have occurred after a Change in Control, notwithstanding that such
event or condition occurred prior to a Change in Control, and the payments and
benefits described above in this Section 5(d) shall apply.

 

If the Executive terminates
his employment at the end of the Term and the Company has previously given
notice to the Executive that the Term will not be extended at any time prior to
or following the date of a Change in Control and either (i) such notice or
termination occurred after the Company entered into a definitive agreement, the
consummation of which would constitute a Change in Control or (ii) the
Company gave such notice of termination to the Executive that the Term will not
be extended at the request of a third party who has indicated an intention or
has taken steps reasonably calculated to effect a Change in Control, such
termination shall be deemed to have occurred after a Change in Control,
notwithstanding that such event or condition occurred prior to a Change in
Control, and the payments and benefits described above in this Section 5(d) shall
apply.

 

(e)           Timing of Severance Payments
and Benefits.

 

The Company’s obligations to
make the payments, or otherwise perform, as set forth in Sections 5(a)(B), (C),
(D), (E), and (F) and Sections 5(d)(A), (B), (C) and (D), shall be
conditioned upon: (i) the Executive’s continued compliance with his
obligations under Section 6 and (ii) the Executive’s execution,
delivery and non-revocation of a valid and enforceable general release of
claims against the Company and its affiliates in the form attached hereto as Exhibit A
(the “Release”) within forty-five (45) days after the Executive’s Date
of Termination.

 

The payments and benefits
described in Sections 5(a)(A), (D), and (F) and Sections 5(d)(B) and (D) shall
be made, provided, or commenced, as applicable, promptly after the Date of
Termination, provided that the Executive has executed and delivered the
Release, and the Release has become irrevocable by such date.

 

 

If no stock of the Company
is publicly traded on an established securities market or otherwise on the Date
of Termination, the payments and benefits described in Sections 5(a)(B), (C),
and (E) and Sections 5(d)(A) and (C) shall be made, provided, or
commenced, as applicable, on the forty-fifth (45th) day after the Date of Termination.  If stock of the Company is publicly traded on
an established securities market or otherwise on the Date of Termination, the
payments and benefits described in Sections 5(a)(B), (C), and (E) and
Sections 5(d)(A) and (C) shall be made, provided, or commenced, as
applicable, upon the day following the day that is six (6) months after
the Date of Termination.

 

Except for any payments made
pursuant to the Company’s Senior Executive Bonus Pool Program, the payments
described in Sections 5(a) through (d) shall constitute the exclusive
payments in the nature of severance or termination pay which shall be due to
the Executive upon a termination of employment and shall be in lieu of any
other such payments under any plan, program, policy or other arrangement of the
Company or any affiliate.  The Executive
shall have no obligation to mitigate any amounts payable or arrangements made
under any provision of this Agreement, whether by seeking employment or
otherwise.

 

If the Executive dies during
the period between the Date of Termination and the date on which the payments
and benefits described in Sections 5(a) and (d) are due to be paid,
all such payments and benefits shall be paid to the personal representative of
the Executive’s estate.

 

(f)            Immediate Vesting on Change
in Control.  Without
limitation of Section 5(a)(F), the unvested portion of any equity
compensation granted to the Executive shall (whether or not specified in the
grant agreements evidencing such equity compensation) immediately become fully
vested upon a Change in Control, whether or not a termination of the Executive’s
employment occurs; provided, however, that to the extent equity
compensation is treated as deferred compensation for purposes of the Internal
Revenue Code of 1986 as amended, and the regulations issued thereunder (“Section 409
A”), the vesting of such equity compensation shall only accelerate pursuant
to this Section 5(f) upon a Change in Control which also constitutes
a change in control or effective control of the Company or a change in the
ownership of a substantial portion of its assets, in each case within the
meaning of Section 409A.

 

(g)           Separate Payments.  The Pro Rata Bonus, the Salary Continuation
Severance Payments, the Benefit Payment, the CIC Benefit Payment, and the CIC
Severance Payment are each intended to be separate payments for purposes of Section 409A.

 

(h)           Indemnification by the
Company.  The Company shall defend,
indemnify, and hold the Executive harmless from and against any liabilities the
Executive may incur by virtue of the applicability of Section 409A to any
payments made hereunder.

 

(i)            Taxes and Withholding.  All payments and benefits to be made or
otherwise provided to the Executive hereunder shall be subject to applicable
taxes and withholding.

 

6.             Confidential Information;
Noncompetition; Work Product.  The Executive acknowledges that his
employment by the Company will, throughout the Employment Period

 

 

bring
him into close contact with the confidential affairs of the Company and its
affiliates, including information about their client and customer lists and
information concerning proprietary manufacturing formulations and processes,
costs, profits, real estate, markets, sales, products, key personnel, pricing
policies, operational methods, patents, research and development, technical
processes, and other business affairs and methods, plans for future product
development, business development opportunities and strategies and other
information not readily available to the public.  The Executive further acknowledges that the
services to be performed under this Agreement are of a special, unique,
unusual, extraordinary and intellectual character.  The Executive further acknowledges that the
business of the Company and its subsidiaries is international in scope, that
their products are marketed throughout the world, that the Company and its
subsidiaries competes in nearly all of their business activities with other
entities that are or could be located in nearly any part of the world and that
the nature of the Executive’s services, position and expertise are such that he
is capable of competing with the Company and its subsidiaries from nearly any
location in the world. In recognition of the foregoing, the Executive covenants
and agrees:

 

(a)           The Executive, at all times
during the Employment Period and thereafter, shall hold in a fiduciary capacity
for the benefit of the Company all secret, trade, proprietary or confidential
information, knowledge or data relating to the Company or any of its affiliated
companies and shareholders, and their respective businesses, that the Executive
obtains during the Executive’s employment by the Company or any of its
affiliated companies and that is not public knowledge (other than as a result
of the Executive’s violation of this Section 6(a)) (“Confidential
Information”).  The Executive shall
not communicate, divulge or disseminate Confidential Information at any time
during or after the Executive’s employment with the Company, except with the
prior written consent of the Company or as otherwise required by law or legal
process.  The Executive shall deliver
promptly to the Company on termination of the Executive’s employment by the
Company, or at any other time the Company may so request, at the Company’s
expense, all memoranda, notes, records, reports and other documents (and all
copies thereof) relating to the Company’s business, which the Executive
obtained while employed by, or otherwise serving or acting on behalf of, the
Company and which the Executive may then posses or have under the Executive’s
control.

 

(b)           During the “Noncompetition
Period,” the Executive shall not, without the prior written consent of the
Board, engage in or become associated with a “Competitive Activity.”  For purposes of this Section 6:  (i) the “Noncompetition Period”
means the period commencing on the Effective Date and ending on the
eighteen-month anniversary of the date upon which Executive’s employment with
the Company is terminated for any reason; (ii) a “Competitive Activity”
means any business or other endeavor that engages in clinical or pre- clinical
research or development, manufacturing, marketing, sales, or commercialization
of products or services that directly or indirectly compete with, or are a
therapeutic alternative to, either (x) the products of, or services
engaged in by, the Company or any of its subsidiaries at the Date of
Termination in any geographic location in the United States, or (y) the
products proposed to be developed or commercialized, or services proposed to be
engaged in, by the Company or any of its subsidiaries at the Date of
Termination in any geographic location in the United States (provided that
clause (y) shall apply only to any proposed business activity as to which
the Company or any of its subsidiaries has devoted significant and documented
efforts at the Date of Termination, whether internally or through acquisition,
licensing or other business development

 

 

activities);
provided, however, that the Executive shall not be engaged in a Competitive
Activity if he is providing services to a division or subsidiary of a
multi-division entity or holding company, so long as no division or subsidiary
to which the Executive provides services is in competition with the Company or
its subsidiaries or affiliates, and the Executive does not otherwise engage in
a Competitive Activity on behalf of the multi-division entity or any competing
division or subsidiary; and (iii) the Executive shall be considered to
have become “associated with a Competitive Activity” if the Executive becomes
directly or indirectly involved as an owner, investor (other than a passive
stockholder of less than five percent (5%) of a corporation the securities of
which are traded on a national securities exchange), employee, officer,
director, consultant, independent contractor, agent, partner, advisor, or in
any other capacity calling for the rendition of the Executive’s personal
services, with any individual, partnership, corporation or other organization
that is engaged directly or indirectly in a Competitive Activity.

 

(c)           During the Noncompetition
Period, the Executive shall not, on his own behalf or on behalf of any other
person, firm or entity (x) directly or indirectly solicit, induce or
attempt to solicit or induce any employee of the Company or any of its
subsidiaries to terminate his employment with the Company or any of its
subsidiaries, or to provide any assistance whatsoever to any person, firm or
entity engaged in a Competitive Activity, or (y) directly or indirectly
induce any business, entity or person with which the Company or any of their
subsidiaries or affiliates has a business relationship to terminate or alter
such business relationship.

 

(d)           In addition to such other
rights and remedies as the Company may have at equity or in law with respect to
any breach of this Agreement, if the Executive commits a material breach of any
of the provisions of Section 6, the Company shall have the right to seek
to have such provisions specifically enforced by any court having equity
jurisdiction (without any obligation to post a bond or other security); it
being acknowledged and agreed that any such breach or threatened breach will
cause irreparable injury to the Company and that money damages alone will not
provide an adequate remedy to the Company.

 

(e)           The Executive acknowledges
that during the Employment Period, the Executive may conceive of, discover,
invent or create inventions, improvements, new contributions, literary
property, computer programs and software material, ideas and discoveries, whether
patentable or copyrightable or not (all of the foregoing being collectively
referred to herein as “Work Product”), and that various business
opportunities shall be presented to the Executive by reason of the Executive’s
employment by the Company.  The Executive
acknowledges that all of the foregoing shall be owned by and belong exclusively
to the Company and that the Executive shall have no personal interest therein; provided
that they are either related in any manner to the business (commercial, clinical
or experimental) of the Company or any of its subsidiaries, or are, in the case
of Work Product, conceived or made on the Company’s time or with the use of the
Company’s facilities or materials, or, in the case of business opportunities,
are presented to the Executive for the possible interest or participation of
the Company or any of its subsidiaries. 
The Executive shall (i) promptly disclose any such Work Product and
business opportunities to the Company; (ii) assign to the Company, upon
request and without additional compensation, the entire rights to such Work
Product and business opportunities; (iii) sign all papers necessary to
carry out the foregoing; and (iv) give testimony in

 

 

support
of the Executive’s inventorship or creation in any appropriate case.  The Executive agrees that the Executive will
not assert any rights to any Work Product or business opportunity as having
been made or acquired by the Executive prior to the date of this Agreement
except for Work Product or business opportunities disclosed on Exhibit B
to this Agreement.

 

(f)            The Executive acknowledges
and agrees that the provisions of this Section 6 are necessary to protect
the business operations and affairs of the Company and its subsidiaries.  The Executive understands that the
restrictions set forth in this Agreement may limit his ability to earn a
livelihood in a business similar that of the Company, but he nevertheless
believes that he has received and will receive sufficient consideration and
other benefits as an employee of the Company to justify clearly such
restrictions which, in any event (given his education, skills and ability), the
Executive does not believe would prevent him from earning a livelihood.

 

7.             Successors.

 

(a)           This Agreement is personal
to the Executive and, without the prior written consent of the Company, shall
not be assignable by the Executive otherwise than by will or the laws of
descent and distribution.  This Agreement
shall inure to the benefit of and be enforceable by the Executive’s legal
representatives.

 

(b)           This Agreement shall inure
to the benefit of and be binding upon the Company and its successors and
assigns, and may be assigned by Company in connection with any sale, transfer
or other disposition of all or substantially all of its business and assets.

 

(c)           The Company shall require
any successor (whether direct or indirect, by purchase, merger, consolidation
or otherwise) to all or substantially all of the business and/or assets of the
Company expressly to assume and agree to perform under this Agreement in the
same manner and to the same extent that the Company would have been required to
perform it if no such succession had taken place, except under circumstances in
which such assumption occurs by operation of law.  As used in this Agreement, “Company” shall
mean both the Company as defined above and any such successor that assumes and
agrees to perform this Agreement, by operation of law or otherwise.

 

8.             Indemnification.  The Executive shall be entitled to defense by
and full indemnification from the Company for any claims that a third party
brings against him based on any alleged act or omission related in any way to
the Executive’s employment by the Company to the maximum extent permitted under
applicable law. In addition, during the term of the Executive’s employment, the
Executive shall be covered under any directors’ and officers’ insurance policy
maintained by the Company.

 

9.             Post-Termination Assistance.  After the termination of the Executive’s
employment for any reason, for so long as the Executive is receiving any
payments pursuant to this Agreement, the Executive shall cooperate, at the
reasonable request of the Company or any of its subsidiaries, (i) in the
transition of any matter for which the Executive had authority or
responsibility during the Employment Period, or (ii) with respect to any
other matter involving the Company or any of its subsidiaries for which the
Executive may be of assistance.  Any such

 

 

cooperation
required from the Executive shall take into account any responsibilities to
which the Executive is subject to a subsequent employer or otherwise.

 

10.           Miscellaneous.

 

(a)           This Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
Jersey, applicable to agreements made and to be performed entirely within such
state.  The captions of this Agreement
are not part of the provisions hereof and shall have no force or effect.  This Agreement may not be amended or modified
except by a written agreement executed by the parties hereto or their
respective successors and legal representatives.

 

(b)           All notices and other
communications under this Agreement shall be in writing and shall be given by
hand delivery to the other party or by registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:

 

If
to the Executive, to the Executive’s address as

maintained
by the Company.

 

If
to the Company:

 

Ikaria
Holdings, Inc.

6
Route 173

Clinton,
New Jersey 08809

Telephone:  (908) 238-6673

Facsimile:  (908) 238-6773

Attention:  Matthew M. Bennett, General Counsel

 

or to such other address as either party furnishes
to the other in writing in accordance with this Section 10.  Notices and communications shall be effective
when actually received by the addressee.

 

(c)           The invalidity or
unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement.  If any provision of this Agreement shall be
held invalid or unenforceable in part, the remaining portion of such provision,
together with all other provisions of this Agreement, shall remain valid and
enforceable and continue in full force and effect to the fullest extent
consistent with law, and the invalid or unenforceable provision shall be deemed
to have been redrafted as if in the original, so as to be valid and enforceable
to the maximum extent permissible under applicable law.

 

(d)           Notwithstanding any other
provision of this Agreement, the Company may withhold from amounts payable
under this Agreement all federal, state, local and foreign taxes that are
required to be withheld by applicable laws or regulations.

 

(e)           The failure of the Executive
or the Company to insist upon strict compliance with any provision of, or to
assert any right under, this Agreement shall not be deemed to be a waiver of
such provision or right or of any other provision of or right under this
Agreement.

 

 

(f)            The Executive and the
Company acknowledge that this Agreement represents the complete agreement
between the parties and supersedes any other agreement between them concerning
the subject matter hereof, including the Original Agreement.  This Agreement may not be modified except by
express written agreement between the parties.

 

(g)           This Agreement may be
executed in one or more counterparts, each of which shall be deemed an
original, and which together shall constitute one instrument.

 

(h)           Whenever this Agreement
provides for any payment to the Executive’s estate, such payment may be made
instead to such beneficiary or beneficiaries as the Executive may designate by
written notice to the Company.  The
Executive shall have the right to revoke any such designation and to
redesignate a beneficiary or beneficiaries by written notice to the Company
(and to any applicable insurance company) to such effect.

 

(i)            The Executive represents and
warrants to the Company that this Agreement is legal, valid and binding upon
the Executive and the execution of this Agreement and the performance of the
Executive’s obligations hereunder does not and will not constitute a breach of,
or conflict with the terms or provisions of, any agreement or understanding to
which the Executive is a party (including, without limitation, any other
employment agreement). The Company represents and warrants to the Executive
that this Agreement is legal, valid and binding upon the Company and the
execution of this Agreement and the performance of the Company’s obligations
hereunder does not and will not constitute a breach of, or conflict with the
terms or provisions of, any agreement or understanding to which the Company is
a party.

 

(j)            Neither the Executive, his
legal representative nor any beneficiary designated by the Executive shall have
any right, without the prior written consent of the Company, to assign,
transfer, pledge, hypothecate, anticipate or commute to any person or entity
any payment due in the future pursuant to any provision of this Agreement, and
any attempt to do so shall be void and shall not be recognized by the Company.

 

(k)           Each party (i) hereby
irrevocably submits itself to and acknowledges and recognizes the jurisdiction
of the courts of the State of New Jersey in the County of Hunterdon (which
court, together with all applicable appellate courts, for purposes of this
Agreement, are the only “courts of competent jurisdiction”), for the purpose of
any suit, action or other proceeding arising out of, under, or in connection
with, relating to, or based upon this Agreement, (ii) agrees that any
service of process in connection with any such suit, action or other proceeding
may be made upon it by means of the United States mail or such other service as
may be authorized by any such court, (iii) agrees that the courts of competent
jurisdiction shall be the sole and exclusive courts and forums for the purpose
of any such suit, action or proceeding and (iv) waives and agrees not to
assert, by way of motion, as a defense, or otherwise, in any such suit, action
or proceeding, any claim that it is not subject to the jurisdiction of courts
of competent jurisdiction, that such suit, action or proceeding is brought in
an inconvenient forum, that the venue of the suit, action or proceeding is
improper or that this Agreement or the subject matter hereof may not be
enforced in or by such court.  Each party
agrees that its submission to jurisdiction and its consent to service of
process by mail is made for the express benefit of the other party.

 

 

(l)            Each of the parties has been
represented by counsel (or has had the opportunity to be so represented) in the
negotiation and preparation of this Agreement. 
The parties agree that this Agreement is to be construed as jointly
drafted.  Accordingly, this Agreement
will be construed according to the fair meaning of its language, and the rule of
construction that ambiguities are to be resolved against the drafting party
will not be employed in the interpretation of this Agreement.

 

(m)          The Executive acknowledges
and agrees that the Company may satisfy its obligations to make payments to the
Executive under this Agreement by causing one or more of its subsidiaries to
make such payments to the Executive.  The
Executive agrees that any such payment made by any such subsidiary shall fully
satisfy and discharge the Company’s obligation to make such payment to the
Executive hereunder (but only to the extent of such payment).

 

(n)           Notwithstanding the
expiration or termination of this Agreement, the provisions of Sections 6, 7, 9
and 10 of the Agreement shall continue in full force and effect and remain
fully binding upon the parties.

 

(o)           Gross-Up Payment.

 

(i) To
the extent that any (a) severance payment, (b) transaction or other
bonus payment, (c) payment under any transaction or other incentive plan, (d) payment
related to equity or made under an equity incentive program, or (e) other
amounts or payments of any type or kind whatsoever, in the nature of
compensation (within the meaning of Section 280G of the Internal Revenue
Code of 1986, as amended, and the regulations promulgated thereunder (“Section 280G”))
or otherwise to or for the benefit of the Executive under this Agreement, or
any other agreement or plan, or otherwise (or any part of such amount or other
payment) (collectively, “Payments”), in any case constitutes an “excess
parachute payment” within the meaning of Section 280G and Section 4999
of the Internal Revenue Code (“Section 4999”), then the Company
shall pay to the Executive an additional sum (“Gross-Up Payment”) such
that, after all taxes applicable to the receipt of such amount have been
subtracted therefrom, the remaining amount will equal the sum of the amount of
tax imposed with respect to the “excess parachute payments,” plus any interest
and penalties thereon (other than those caused solely by Executive’s action or
inaction).  Therefore, the effect shall
be to maintain the Executive in the same financial position that he would have
been in had no tax under Section 4999 been imposed.  All payments and reimbursements to which the
Executive is entitled under this Section 10(o) shall be made not
later than April 15 of the taxable year of the Executive next following
the taxable year of the Executive in which the Executive receives amounts
subject to Section 4999.

 

(ii) Notwithstanding
the immediately preceding paragraph, in the event that a reduction to the
Payments in respect of the Executive of 10% or less, but not more than
$250,000, would cause none of the Payments to be “excess parachute payments,”
the Executive will not be entitled to a Gross-Up Payment and the Payments shall
be reduced to the extent necessary so that none of the Payments shall be “excess
parachute payments.”  Unless the
Executive shall have given prior written notice to the Company specifying a
different order by which to effectuate the foregoing, the Company shall reduce
or eliminate the Payments (x) by first reducing or eliminating the portion
of the Payments which are not payable in cash (other than that portion of the
Payments subject to clause (z) hereof), (y) then by reducing or 

 

 

eliminating
cash payments (other than that portion of the Payments subject to clause (z) hereof)
and (z) then by reducing or eliminating the portion of the Payments
(whether payable in cash or not payable in cash) to which Treasury Regulation §
1.280G-1 Q/A 24(c) (or successor thereto) applies, in each case in reverse
order beginning with payments or benefits which are to be paid the farthest in
time from the date of the Change in Control. 
Any notice given by the Executive pursuant to the preceding sentence
shall take precedence over the provisions of any other plan, arrangement or
agreement governing the Executive’s rights and entitlements to any benefits or
compensation.

 

(iii) The
provisions of this Section 10(o) shall expire, and shall be of no
further force or effect, on December 31, 2010.

 

[signature page follows]

 

 

IN WITNESS WHEREOF, the
Executive has hereunto set the Executive’s hand and, pursuant to the
authorization of its Board, the Company has caused this Agreement to be executed
in its name on its behalf, all as of the day and year first above written.

 

 

	
  /s/ Daniel Tassé

  	
   

  
	
  Daniel Tassé

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  IKARIA HOLDINGS, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ David Shaw

  	
   

  
	
   

  	
   

  	
   

  
	
  By:  David Shaw

  	
   

  
	
  Title:  Chairman

  	
   

  

 

 

Exhibits:

A: Form of Waiver and Release of Claims

B: Disclosed Work Product and Business Opportunities

 

 

Exhibit A

Form of Waiver and Release of Claims

 

WAIVER AND RELEASE OF
CLAIMS

 

1.             General Release.  In consideration of the payments and benefits
to be made under the Amended and Restated Employment Agreement, dated as of June 1st, 2009, to which Ikaria
Holdings, Inc. (the “Company”) and Daniel Tasse (the “Executive”)
are parties (the “Employment Agreement”), the Executive, with the
intention of binding the Executive and the Executive’s heirs, executors,
administrators and assigns, does hereby release, remise, acquit and forever
discharge the Company and each of its subsidiaries and affiliates (the “Company
Affiliated Group”), their present and former officers, directors,
executives, agents, shareholders, attorneys, employees and employee benefits
plans (and the fiduciaries thereof), and the successors, predecessors and
assigns of each of the foregoing (collectively, the “Company Released
Parties”), of and from any and all claims, actions, causes of action,
complaints, charges, demands, rights, damages, debts, sums of money, accounts,
financial obligations, suits, expenses, attorneys’ fees and liabilities of
whatever kind or nature in law, equity or otherwise, whether accrued, absolute,
contingent, unliquidated or otherwise and whether now known, unknown, suspected
or unsuspected which the Executive, individually or as a member of a class, now
has, owns or holds, or has at any time heretofore had, owned or held, against
any Company Released Party (an “Action”) arising out of or in connection
with the Executive’s service as an employee, officer and/or director to any
member of the Company Affiliated Group (or the predecessors thereof), including
(i) the termination of such service in any such capacity, (ii) for
severance or vacation benefits, unpaid wages, salary or incentive payments, (iii) for
breach of contract, wrongful discharge, impairment of economic opportunity,
defamation, intentional infliction of emotional harm or other tort and (iv) for
any violation of applicable state and local labor and employment laws
(including, without limitation, all laws concerning harassment, discrimination,
retaliation and other unlawful or unfair labor and employment practices), any
and all Actions based on the Employee Retirement Income Security Act of 1974 (“ERISA”),
and any and all Actions arising under the civil rights laws of any federal,
state or local jurisdiction, including, without limitation, Title VII of the
Civil Rights Act of 1964 (“Title VII”). the Americans with Disabilities
Act (“ADA”), Sections 503 and 504 of the Rehabilitation Act, the Family
and Medical Leave Act and the Age Discrimination in Employment Act (“ADEA”),
excepting only:

 

(a)                    rights of the Executive
under this Waiver and Release of Claims and the Employment Agreement;

 

(b)                   rights of the Executive relating to equity
awards held by the Executive as of his date of termination;

 

(c)                    the right of the Executive
to receive COBRA continuation coverage in accordance with applicable law and the
Employment Agreement;

 

(d)                   rights to indemnification the Executive may
have (i) under applicable corporate law, (ii) under the by-laws or
certificate of incorporation of any 

 

 

Company
Released Party or (iii) as an insured under any director’s and officer’s
liability insurance policy now or previously in force;

 

(e)                    claims (i) for benefits
under any health, disability, retirement, deferred compensation, life insurance
or other, similar employee benefit plan or arrangement of the Company
Affiliated Group and (ii) for earned but unused vacation pay through the
date of termination in accordance with applicable Company policy; and

 

(f)                      claims for the reimbursement
of unreimbursed business expenses incurred prior to the date of termination
pursuant to applicable Company policy.

 

2.             No Admissions, Complaints or
Other Claims.  The
Executive acknowledges and agrees that this Waiver and Release of Claims is not
to be construed in any way as an admission of any liability whatsoever by any
Company Released Party, any such liability being expressly denied.  The Executive also acknowledges and agrees
that he has not, with respect to any transaction or state of facts existing
prior to the date hereof, filed any Actions against any Company Released Party
with any governmental agency, court or tribunal.

 

3.             Application to all Forms of
Relief.  This Waiver and Release of
Claims applies to any relief no matter how called, including, without
limitation, wages, back pay, front pay, compensatory damages, liquidated
damages, punitive damages for pain or suffering, costs and attorney’s fees and
expenses.

 

4.             Specific Waiver.  The Executive specifically acknowledges that
his acceptance of the terms of this Waiver and Release of Claims is, among
other things, a specific waiver of any and all Actions under Title VII, ADEA,
ADA and any state or local law or regulation in respect of discrimination of
any kind; provided, however, that nothing herein shall be deemed,
nor does anything herein purport, to be a waiver of any right or Action which
by law the Executive is not permitted to waive.

 

5.             Voluntariness.  The Executive acknowledges and agrees that he
is relying solely upon his own judgment; that the Executive is over eighteen
years of age and is legally competent to sign this Waiver and Release of
Claims; that the Executive is signing this Waiver and Release of Claims of his
own free will; that the Executive has read and understood the Waiver and
Release of Claims before signing it; and that the Executive is signing this
Waiver and Release of Claims in exchange for consideration that he believes is
satisfactory and adequate.  The Executive
also acknowledges and agrees that he has been informed of the right to consult
with legal counsel and has been encouraged to do so.

 

6.             Complete Agreement/Severabilitv.  This Waiver and Release of Claims constitutes
the complete and final agreement between the parties and supersedes and
replaces all prior or contemporaneous agreements, negotiations, or discussions
relating to the subject matter of this Waiver and Release of Claims.  All provisions and portions of this Waiver
and Release of Claims are severable.  If
any provision or portion of this Waiver and Release of Claims or the
application of any provision or portion of the Waiver and Release of Claims
shall be determined to be invalid or unenforceable to any extent or for any
reason, all other provisions and portions of 

 

 

this
Waiver and Release of Claims shall remain in full force and shall continue to
be enforceable to the fullest and greatest extent permitted by law.

 

7.             Acceptance and Revocability.  The Executive acknowledges that he has been
given a period of 21 days within which to consider this Waiver and Release of
Claims, unless applicable law requires a longer period, in which case the
Executive shall be advised of such longer period and such longer period shall
apply.  The Executive may accept this
Waiver and Release of Claims at any time within this period of time by signing
the Waiver and Release of Claims and returning it to the Company.  This Waiver and Release of Claims shall not
become effective or enforceable until seven calendar days after the Executive
signs it.  The Executive may revoke his
acceptance of this Waiver and Release of Claims at any time within that seven
calendar day period by sending written notice to the Company.  Such notice must be received by the Company
within the seven calendar day period in order to be effective and, if so
received, would void this Waiver and Release of Claims for all purposes.

 

8.             Governing Law.  Except for issues or matters as to which
federal law is applicable, this Waiver and Release of Claims shall be governed
by and construed and enforced in accordance with the laws of the State of New
Jersey without giving effect to the conflicts of law principles thereof.

 

 

	
   

  	
   

  
	
   

  	
  Daniel Tassé

  

 

 

EXHIBIT B

 

Disclosed Work Product and
Business Opportunities

 

NoneExhibit
10.19

 

SEPARATION AGREEMENT

 

This Agreement is between
Ikaria Holdings, Inc. and its subsidiaries (referred to in this Agreement
as “Ikaria”) and Elizabeth A. Larkin of                                                                                              
(referred to in this Agreement as “Ms. Larkin”).

 

1.             Background.  Ikaria and Ms. Larkin
are party to an Amended and Restated Employment Agreement dated as of June 1,
2009 (the “Employment Agreement”). 
Ms. Larkin’s employment with Ikaria was terminated other than for
cause on March 15, 2010 (the “Separation Date”).  Both Ms. Larkin and Ikaria desire an
amicable separation and to fully and finally compromise and settle any
differences that may exist between them on the terms set forth in this Agreement.

 

2.             Transition Period.

 

a.             Transition Period.  Ms. Larkin and Ikaria agree that until April 19,
2010, Ms. Larkin will continue to receive the compensation set forth in Section 3
of the Employment Agreement as if her employment continued through that
date.  During the period between the date
on which this Agreement is signed by both parties and April 19, 2010, Ms. Larkin
shall remain available at reasonable times to answer such questions as Ikaria
may have regarding matters within her area of responsibility and to perform
such transition activities as Ikaria may reasonably request.  Ikaria and Ms. Larkin agree and confirm
that notwithstanding any term, condition, or provision of the Employment
Agreement, Ikaria has not terminated Ms. Larkin “for Cause” (as that term
is defined in the Employment Agreement), nor has Ms. Larkin terminated her
employment with Ikaria “for Good Reason” (as that term is defined in the
Employment Agreement).

 

b.             Communication.  Ikaria agrees to distribute to Ikaria’s
employees the internal communication attached hereto as Exhibit A
regarding Ms. Larkin’s separation from Ikaria, and intends that any
communication at the time of announcing a successor and that any external
communication will be consistent with the Exhibit A.

 

3.             Agreed Payment and Additional Payment; No Other Payments.

 

a.             Agreed Payment.  In consideration of (i) the execution of
this Agreement, (ii) this Agreement becoming effective (see  paragraph 18), (iii) Ms. Larkin
honoring all of the terms of this Agreement, and (iv) Ms. Larkin
providing the transition services described in paragraph 2(a) of
this Agreement and the services described in the Professional Services
Agreement between Ms. Larkin and Ikaria, dated as of March 16, 2010
(the “PSA”), Ikaria will pay Ms. Larkin $412,500 less (A) applicable
federal, state, and local taxes and other applicable payroll deductions and
withholdings, such amount to be paid in twelve (12) monthly installments
commencing on the forty-fifth (45th) day after the Separation Date, provided the Agreed
Payment will not be required to be commenced until this Agreement has become
effective (see  paragraph 18)
(the “Agreed Payment”).  Any
amounts owed to Ikaria by Ms. Larkin, and any amounts incurred by Ms. Larkin
which are unauthorized under Ikaria policies (including, without limitation,
any amounts or debts incurred on any company credit or charge card) shall be
deducted from the first such payment and succeeding payments to the extent
necessary.

 

1

 

b.             Additional Payment.  In consideration of (i) the execution of
this Agreement (ii) this Agreement becoming effective (see  paragraph 18) and (iii) Ms. Larkin
honoring all of the terms of this Agreement, Ikaria will pay Ms. Larkin an
additional $337,500, less (A) applicable federal, state, and local taxes
and other applicable payroll deductions and withholdings and (B) any
amounts owed to Ikaria by Ms. Larkin, and any amounts incurred by Ms. Larkin
which are unauthorized under Ikaria policies (including, without limitation,
any amounts or debts incurred on any company credit or charge card) (the “Additional
Payment”).  It is understood and
acknowledged that the Additional Payment represents the amounts described in
Sections 5(a)(A), (B), (D) and (E) of the Employment Agreement and a
supplemental payment of $243,978.68.  The
Additional Payment will be paid on the forty-fifth (45th) day after the Separation
Date, provided that the Additional Payment will not be required to be made
until this Agreement has become effective (see
paragraph 18).

 

c.             No Other Payments.  Ms. Larkin acknowledges and agrees that
the Agreed Payment shall be in satisfaction of, and not in addition to, any payments,
benefits, or other cash or non-cash remuneration of any kind to which Ms. Larkin
may have otherwise been entitled to under (i) the Employment Agreement
(subject to the following sentence), (ii) the INO Therapeutics Long Term
Incentive Plan dated as of June 6, 2002 (or any prior or subsequent
versions or modifications thereof) and any grant certificates or awards issued
thereunder, or (iii) any other agreement, plan, program, or practice of
Ikaria.  Without limiting the generality
of the foregoing, Ms. Larkin acknowledges and agrees that the Agreed
Payment is in satisfaction of, and not
in addition to, any payments or benefits that Ms. Larkin may otherwise
have received under Section 5(a)(C) of the Employment
Agreement.

 

d.             Stock Options.  Notwithstanding any other provision of this
Agreement, Ms. Larkin shall receive the ten-year option granted by the
Compensation Committee of the Board of Directors of Ikaria in December 2009
pursuant to the Company’s 2007 Stock Option Plan, as amended, to purchase
75,000 shares of non-voting common stock, par value $0.01 per share, of the
Company (such shares, including any securities into which such shares are
changed or for which such shares are exchanged, the “Common Stock”) at a
per share exercise price equal to the fair value of the Common Stock (as
determined by the Board) (the “December Option”).  The December Option shall be evidenced
by the form of 2007 Stock Option Plan Stock Option Agreement and shall be
subject to the terms and conditions thereof, including, without limitation, the
vesting conditions set forth in the related Notice of Stock Option Grant
substantially in the form of Exhibit B. 
Pursuant to the terms of the 2007 Stock Option Plan, for so long as Ms. Larkin
is providing services pursuant and in accordance with the PSA, she shall be
considered not to have a termination or interruption of her “Continuous Service
Status”(as defined in the 2007 Stock Option Plan); provided, however,
that Ms. Larkin acknowledges that, to the extent that the December Option
or the stock option granted to Ms. Larkin on April 18, 2007 in
respect of 200,000 shares of Common Stock (the “April Option”) is
exercised more than three (3) months after she ceases to be employed by
Ikaria, the option shall cease to qualify as an “incentive stock option”
(within the meaning of Section 422 of the Internal Revenue Code of 1986),
to the extent it so qualified as of the date hereof.

 

e.             D&O Insurance;
Indemnification.  Ikaria
agrees to continue to cover Ms. Larkin under the directors and officers
insurance policy(ies), if any, maintained by Ikaria for its officers and
directors on terms comparable to the terms in effect from time to time for
Ikaria’s

 

2

 

other officers.  Any indemnification under its certificate of
incorporation or by-laws that Ikaria provides to its other officers will
similarly apply to Ms. Larkin.

 

4.             Acknowledgement.  Ms. Larkin (i) acknowledges
that the Agreed Payment and the Additional Payment will not commence to be paid
or provided unless she accepts this Agreement and this Agreement becomes
effective (see  paragraph 18)
and (ii) acknowledges that the covenants contained in Section 6 of
the Employment Agreement will continue in effect in accordance with their
terms, with the Separation Date being the “Termination Date” for purposes of Section 6
of the Employment Agreement.

 

5.             Release.

 

a.             Ms. Larkin understands
and agrees that her acceptance of this Agreement means that, except as stated
in paragraph 8, she is forever waiving and giving up any and all claims,
actions, causes of action, complaints, charges, demands and rights of whatever
kind or nature in law, equity or otherwise, whether known or unknown
(collectively “Claims”), she has or may have, individually or as a member of a
class, that are based on any event or act or failure to act that occurred prior
to her execution of this Agreement, and hereby releases and forever discharges
Ikaria, its parent, subsidiaries, shareholders and related companies, and their
respective directors, officers, employees, and agents from any and all such
Claims.  Ms. Larkin understands that
this release and waiver of Claims includes Claims relating to (a) her
employment and the termination of her employment, (b) any Ikaria policy,
practice, contract or agreement (including, without limitation, the Employment
Agreement and the INO Therapeutics Long Term Incentive Plan dated as of June 6,
2002), (c) any tort or personal injury, (d) any policies, practices,
laws or agreements governing the payment of wages, commissions or other
compensation, (e) any laws governing employment discrimination including,
but not limited to, the Age Discrimination in Employment Act (ADEA), Older
Worker Benefits Protection Act, Title VII of the Civil Rights Act, the Employee
Retirement Income Security Act, the Americans with Disabilities Act, the New
Jersey Law Against Discrimination and any state or local laws and any state or
local laws, (f) any laws governing whistle blowing or retaliation,
including but not limited to the Sarbanes-Oxley Act, (g) any laws or
agreements that provide for punitive, exemplary or statutory damages, and (h) any
laws or agreements that provide for payment of attorney fees, costs, or
expenses.

 

b.             Subject to (i) the
execution of this Agreement by Ms. Larkin, (ii) this Agreement
becoming effective (see  paragraph
18), (iii) Ms, Larkin honoring all of the terms of this Agreement, and
(iv) Ms. Larkin providing the transition services described in paragraph
2(a) of this Agreement, Ikaria releases and waives any and all claims
it may have against Ms. Larkin that are based on any act or failure to act
by Ms. Larkin that occurred before this Agreement becomes effective (see  paragraph 18), provided,
however, that the foregoing release does not apply to claims relating to
criminal conduct, willful misconduct, gross negligence, fraud or self-dealing.

 

6.             No Disparagement.  Ms. Larkin agrees not
to make critical, negative, or disparaging remarks about Ikaria, its
shareholders, its services, its directors, its employees or its agents to
others.  Ikaria shall advise all of its
officers, directors and human resources personnel not to make, during the term
of their respective employment with Ikaria, critical, negative, or 

 

3

 

disparaging remarks about Ms. Larkin or her employment with or
separation from Ikaria to others.  Ikaria
agrees not to disclose any personal or private information about Ms. Larkin,
except to the extent required by law or court order, or in connection with any
claim, lawsuit, action or other proceeding involving Ikaria and Ms. Larkin.  Ms. Larkin agrees that any request for
employment verification or other employment related information shall be
directed to James Briggs, and she shall so advise any prospective employer or
other person who may make such a request.

 

7.             Future Employment.  Ms. Larkin agrees that
she is not now or hereafter entitled to employment or reemployment with Ikaria
and she agrees not to knowingly seek such employment, on any basis or through
an employment agency.  Ms. Larkin
further agrees and acknowledges that should she apply for any position in
contradiction of this paragraph, Ikaria may completely ignore such application
and fail to consider it based on this paragraph.

 

8.             Claims Not Waived.  Ms. Larkin understands
that this Agreement does not waive any claims that she may have (a) for
compensation for illness or injury or medical expenses under any worker’s
compensation statute, (b) for benefits under any plan currently maintained
by Ikaria that provides for retirement benefits, (c) under any law or any
policy or plan currently maintained by Ikaria that provides health insurance
continuation or conversion rights, (d) under the 2007 Stock Option Plan
and related Notice of Stock Option Grants and Stock Option Agreements, (e) for
indemnification under the Company’s certificate of incorporation, by-laws or
coverage under any of the Company’s directors and officers insurance policies, (f) for
indemnification under Section 5(h) of the Employment Agreement or (g) that
by law cannot be released or waived.

 

9.             Government Cooperation.  Nothing in this Agreement prohibits Ms. Larkin
from cooperating with any government agency.

 

10.           Prior Agreement(s).  Ms. Larkin agrees and understands that
this Agreement does not supersede any obligation to which she was subject under
a prior agreement while employed with Ikaria that addresses confidentiality,
noncompetition, nonsolicitation, or ownership of intellectual or other
proprietary property, nor does this Agreement reduce her obligations to comply
with applicable laws relating to trade secrets, confidential information, or
unfair competition (including, without limitation, any such obligations under
the Employment Agreement or under the Secrecy Agreement between Ikaria and Ms. Larkin
dated as of May 17, 1999).

 

11.           Confidentiality.  Ms. Larkin agrees that
the existence and terms of this Agreement are not to be disclosed to anyone
other than her attorney, tax advisor, or her immediate family, except as
otherwise required by law, and that if disclosed to such persons, Ms. Larkin
will advise them that they may not disclose the existence or terms of this
Agreement to others.  Except for
disclosure required pursuant to applicable laws or regulations, Ikaria agrees
to hold in confidence the existence and terms of this Agreement.

 

12.           Nonadmission.  Ms. Larkin and Ikaria
both acknowledge and agree that nothing in this Agreement is meant to suggest
that Ikaria has violated any law or contract or that Ms. Larkin has any
claim against Ikaria.

 

4

 

13.           Voluntary Agreement.  Ms. Larkin acknowledges
and states that she has entered into this Agreement knowingly and voluntarily.

 

14.           Consulting An Attorney.  Ms. Larkin acknowledges
that Ikaria has advised her that she may consult an attorney of her own choice
about this Agreement and every matter that it covers before signing this
Agreement, and has encouraged her to do so.

 

15.           Obligation to Pay Attorney
Fees and Costs.  Ms. Larkin understands
and agrees that if she violates the commitments she has made in this Agreement,
Ikaria may seek to recover any payments and/or value of any benefits provided
in this Agreement and that, except as provided in paragraph 16, she will
be responsible for paying the actual attorney fees and costs incurred by Ikaria
in enforcing this Agreement or in defending a claim released by paragraph 5.  Ikaria understands and agrees that if Ikaria
violates the commitments it has made in this Agreement, Ms. Larkin may
seek to recover damages from Ikaria and that it will be responsible for paying
the actual attorney fees and costs incurred by Ms. Larkin in enforcing
this Agreement or in defending a claim released by paragraph 5.

 

16.           Exception to Attorney Fees
Obligation. 
The obligation to pay Ikaria’s attorney fees and costs does not apply
to an action by Ms. Larkin regarding the validity of this Agreement under
the ADEA.

 

17.           Complete Agreement.  Ms. Larkin understands
and agrees that this Agreement contains the entire agreement between Ms. Larkin
and Ikaria relating to the termination of her employment, that this Agreement
(except as provided in paragraph 10 of this Agreement) supersedes and
displaces any prior agreements and discussions relating to such matters and
that she may not rely on any such prior agreements or discussions, except that
Sections 5(h), 6, 7 and 10 of the Employment Agreement are not superseded or
displaced by virtue of this paragraph 17 or of this Agreement generally
and shall continue in full force and effect in accordance with their
terms.  Notwithstanding the foregoing,
Ikaria and Ms. Larkin agree that, except as provided in paragraph 3(d) of
this Agreement, the Notice of Stock Option Grant and the related Stock Option
Agreement dated April 18, 2007, and the Stock Purchase Agreement between
Ikaria and Ms. Larkin dated June 15, 2007 (and its related Joinder
Agreement to Common Stockholders Agreement and Stock Certificate and Stock
Power) are not superseded or displaced by virtue of this paragraph 17 or
of this Agreement generally.

 

18.           Effective Date and
Revocation. 
This Agreement shall not be effective until seven days after Ms. Larkin
signs this Agreement and returns it to Ikaria’s Senior Vice President, Human
Resources, James Briggs care of Ikaria Holdings, Inc., 6 Route 173, Clinton,
NJ 08809.  During that seven-day period, Ms. Larkin
may revoke her acceptance of this Agreement by delivering to Mr. Briggs a
written statement stating she wishes to revoke this Agreement and not be bound
by it.  In the event of such revocation,
this Agreement shall become null and void and have no further effect.

 

19.           Final and Binding Effect.  Ms. Larkin understands
that if this Agreement becomes effective it will have a final and binding
effect and that by signing and not timely revoking this Agreement she may be
giving up legal rights.

 

5

 

20.           Future Cooperation.  Ms. Larkin agrees to
cooperate with Ikaria in the future and to provide to Ikaria truthful
information, testimony, or affidavits requested in connection with any matter
that arose during her employment.  This
cooperation may be performed at reasonable times and places and in a manner as
to not interfere with any other employment Ms. Larkin may have at the time
of request.  Ikaria agrees (a) pay Ms. Larkin
$300 per hour for time spent providing such cooperation and (b) to
reimburse Ms. Larkin for expenses incurred in providing such cooperation,
so long as such expenses are approved in advance by Ikaria.

 

21.           Return of Property.  Ms. Larkin acknowledges
an obligation and agrees to return all Ikaria property, unless otherwise
specified in this paragraph.  This
includes all files, memoranda, documents, records, credit cards, keys and key
cards, computers, laptops, personal digital assistants, cellular telephones,
Blackberry devices or similar instruments, other equipment of any sort, badges,
vehicles, and any other property of Ikaria. 
In addition, Ms. Larkin agrees to provide any and all access codes
or passwords necessary to gain access to any computer, program, or other
equipment that belongs to Ikaria or is maintained by Ikaria or on Ikaria
property.  Further, Ms. Larkin
acknowledges an obligation and agrees not to destroy, delete or disable any
Ikaria property, including items, files and materials on computers and laptops.

 

22.           Representations.  By signing this Agreement, Ms. Larkin
represents that she has read this entire document and understands all of its
terms.

 

23.           Twenty One (21) Day
Consideration Period.  Ms. Larkin may consider
whether to sign and accept this Agreement for a period of twenty-one (21) days
from the day she received it.  If this
Agreement is not signed, dated, and returned to Ikaria’s Senior Vice President,
Human Resources, James Briggs care of Ikaria Holdings, Inc., 6 Route 173,
Clinton, NJ 08809 within twenty-two (22) days, the payments and benefits
described in paragraph 3 will no longer be available.

 

6

 

	
  ACCEPTED:

  	
  ACCEPTED:

  
	
   

  	
   

  
	
   

  	
  Ikaria Holdings, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/
  Elizabeth A. Larkin

  	
   

  	
  /s/
  James Briggs

  
	
  Elizabeth A. Larkin

  	
   

  	
  Senior Vice President

  
	
   

  	
   

  	
  Human Resources

  
	
  Date:

  	
  March 27,
  2010

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date Agreement was originally given to
  Ms. Larkin:

  	
  March 26,
  2010

  	
   

  
						

 

 

EXHIBIT B

 

IKARIA
HOLDINGS, INC.

2007 STOCK OPTION PLAN

NOTICE OF STOCK OPTION GRANT

 

Elizabeth A. Larkin (“Optionee”) 

 

You have been granted an
option (this “Option”) to purchase Common Stock of Ikaria Holdings, Inc.
(the “Company”) as follows:

 

	
  Board
  Approval Date:

  	
   

  	
  December 31,
  2009

  
	
   

  	
   

  	
   

  
	
  Date
  of Grant (Later of Board Approval Date or Commencement of
  Employment/Consulting):  

  	
   

  	
  December 31,
  2009

  
	
   

  	
   

  	
   

  
	
  Exercise
  Price per Share:

  	
   

  	
  $[          ]

  
	
   

  	
   

  	
   

  
	
  Type
  of Shares:

  	
   

  	
  Prior
  to an “Initial Public Offering” (as such term is defined in the Company’s
  Amended and Restated Certificate of Incorporation as may be amended from time
  to time), this Option shall be exercisable for shares of Non-Voting
  Common Stock of the Company.  Upon and
  following an “Initial Public Offering” any unexercised portion of this Option
  shall automatically become exercisable instead for an equivalent number of
  shares of the Company’s Voting Common
  Stock without any further action on the part of the Company or Optionee.

  
	
   

  	
   

  	
   

  
	
  Total
  Number of Shares Granted:

  	
   

  	
  75,000

  
	
   

  	
   

  	
   

  
	
  Total
  Exercise Price:

  	
   

  	
  $[          ]

  
	
   

  	
   

  	
   

  
	
  Type
  of Option:

  	
   

  	
  Incentive
  Stock Option

  
	
   

  	
   

  	
   

  
	
  Expiration
  Date:

  	
   

  	
  December 30,
  2019

  
	
   

  	
   

  	
   

  
	
  Vesting
  Commencement Date:  

  	
   

  	
  December 31,
  2009

  
	
   

  	
   

  	
   

  
	
  Vesting/Exercise
  Schedule:

  	
   

  	
  This
  Option shall vest and become exercisable as follows:  25% of the total number of shares that may
  be purchased pursuant to the Option shall be vested and become exercisable on
  each of the first four anniversaries of the Vesting Commencement Date for so

  

 

 

	
   

  	
   

  	
  long
  as the Optionee remains an employee of or consultant to the Company, such that
  the total number of shares shall be fully vested on the four-year anniversary
  of the Vesting Commencement Date.

  
	
   

  	
   

  	
   

  
	
  Termination
  Period:

  	
   

  	
  This
  Option may be exercised for ninety (90) days after termination of employment
  or consulting relationship except as set out in Section 5 of the Stock
  Option Agreement (but in no event later than the Expiration Date).  Optionee is responsible for keeping track
  of these exercise periods following termination for any reason of his or her
  service relationship with the Company. 
  The Company will not provide further notice of such periods.

  
	
   

  	
   

  	
   

  
	
  Transferability:

  	
   

  	
  This
  Option may not be transferred.

  

 

By your signature and the
signature of the Company’s representative below, you and the Company agree that
this Option is granted under and governed by the terms and conditions of the
Ikaria Holdings, Inc. 2007 Stock Option Plan and the Stock Option
Agreement, both of which are attached and made a part of this document.

 

In addition it is a
condition precedent to the exercise of this Option that you sign and return to
the Company a counterpart signature page indicating your agreement to be
bound as a “Stockholder” by the Company’s Common Stockholders Agreement dated
as of February 22, 2007, as may be amended from time to time.

 

In addition, you agree and
acknowledge that your rights to any Shares underlying this Option will be
earned only as you provide services to the Company over time, that the grant of
this Option is not as consideration for services you rendered to the Company
prior to your Vesting Commencement Date, and that nothing in this Notice or the
attached documents confers upon you any right to continue your employment or
consulting relationship with the Company for any period of time, nor does it
interfere in any way with your right or the Company’s right to terminate that
relationship at any time, for any reason, with or without cause.

 

	
   

  	
  IKARIA
  HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:
  [                              ]

  
	
  Elizabeth
  A. Larkin

  	
  Title:  
  [                              ]

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