Document:

Exhibit
10.32

 

IKARIA HOLDINGS, INC.

 

2007 STOCK OPTION PLAN

 

NOTICE OF STOCK OPTION GRANT

 

Matthew
M. Bennett (“Optionee”)

c/o
Ikaria Holdings, Inc.

6
Route 173

Clinton,
NJ 08809

 

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

 

	
  Board
  Approval Date:

  	
   

  	
  June 29,
  2007

  
	
   

  	
   

  	
   

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

  	
   

  	
  July 23,
  2007

  
	
   

  	
   

  	
   

  
	
  Exercise
  Price per Share:

  	
   

  	
  $4.63

  
	
   

  	
   

  	
   

  
	
  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:

  	
   

  	
  200,000

  
	
   

  	
   

  	
   

  
	
  Total
  Exercise Price:

  	
   

  	
  $926,000

  
	
   

  	
   

  	
   

  
	
  Type
  of Option:

  	
   

  	
  Incentive
  Stock Option

  
	
   

  	
   

  	
   

  
	
  Expiration
  Date:

  	
   

  	
  July 22,
  2017

  
	
   

  	
   

  	
   

  
	
  Vesting
  Commencement Date:

  	
   

  	
  July 23,
  2007

  
	
   

  	
   

  	
   

  
	
  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; and provided, further, that
  vesting and exercisability of the Option may accelerate as provided in
  Section 5 of the Stock Option Agreement.

  
	
   

  	
   

  	
   

  
	
  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.

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/
  Matthew M. Bennett

  	
   

  	
  By:

  	
  /s/
  David Shaw

  
	
  Matthew
  M. Bennett

  	
   

  	
  Name:

  	
  David Shaw

  
	
   

  	
   

  	
  Title:

  	
  CEO

  

 

2

 

	
  Attachments:

  	
  Ikaria
  Holdings, Inc. 2007 Stock Option Plan

  
	
   

  	
  Stock
  Option Agreement

  
	
   

  	
  Exhibit A:
  Form of Exercise Notice & Restricted Stock Purchase Agreement

  
	
   

  	
  Exhibit B:
  Form of Common Stockholders Agreement

  

 

3

 

Ikaria Holdings, Inc. 2007 Stock Option Plan

 

See
Ikaria, Inc. 2007 Stock Option Plan, as amended, filed as exhibit 10.4 to
Ikaria Inc.’s Registration Statement on Form S-1 filed on May 13,
2010.

 

 

IKARIA HOLDINGS, INC.

 

2007 STOCK OPTION PLAN

 

STOCK OPTION AGREEMENT

 

1.             Grant of
Option.  Ikaria Holdings, Inc.,
a Delaware corporation (the “Company”), hereby grants to Matthew M.
Bennett (“Optionee”), an option (the “Option”) to purchase the
total number of shares of Common Stock (the “Shares”) set forth in the
Notice of Stock Option Grant (the “Notice”), at the exercise price per
Share set forth in the Notice (the “Exercise Price”) subject to the
terms, definitions and provisions of the Ikaria Holdings, Inc. 2007 Stock
Option Plan (the “Plan”) adopted by the Company, which is incorporated
in this Agreement by reference.  Unless
otherwise defined in this Agreement, the terms used in this Agreement shall
have the meanings defined in the Plan. 
This Option shall initially be exercisable for shares of Non-Voting Common Stock of the Company; provided, however,
that in the event of 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 automatically become exercisable
instead for shares of the Company’s Voting Common
Stock without any further action on the part of the Company or Optionee.

 

2.             Designation
of Option.  This Option is
intended to be an Incentive Stock Option as defined in Section 422 of the
Code only to the extent so designated in the Notice, and to the extent it is
not so designated or to the extent the Option does not qualify as an Incentive
Stock Option, it is intended to be a Nonstatutory Stock Option.

 

Notwithstanding
the above, if designated as an Incentive Stock Option, in the event that the
Shares subject to this Option (and all other Incentive Stock Options granted to
Optionee by the Company or any Parent or Subsidiary, including under other
plans of the Company) that first become exercisable in any calendar year have
an aggregate fair market value (determined for each Share as of the date of
grant of the option covering such Share) in excess of $100,000, the Shares in
excess of $100,000 shall be treated as subject to a Nonstatutory Stock Option,
in accordance with Section 5(c) of the Plan.

 

3.             Exercise
of Option.  This Option
shall be exercisable during its term in accordance with the Vesting/Exercise
Schedule set out in the Notice and with the provisions of Section 10 of
the Plan as follows:

 

(a)           Right to Exercise.

 

(i)            This Option may not be exercised for
a fraction of a share.

 

(ii)           In the event of Optionee’s death,
disability or other termination of employment, the exercisability of the Option
is governed by Section 5 below, subject to the limitations contained in
this Section 3.

 

 

(iii)          In no event may this Option be
exercised after the Expiration Date of the Option as set forth in the Notice.

 

(b)           Method of Exercise.

 

(i)            This Option shall be exercisable by
execution and delivery of (A) the Exercise Notice and Restricted Stock
Purchase Agreement attached hereto as Exhibit A (the “Exercise
Agreement”) or of any other form of written notice approved for such
purpose by the Company which shall state Optionee’s election to exercise the
Option, the number of Shares in respect of which the Option is being exercised,
and such other representations and agreements as to the holder’s investment
intent with respect to such Shares as may be required by the Company pursuant
to the provisions of the Plan and (B) a counterpart signature page to
the Company’s Common Stockholders Agreement, a copy of which is attached hereto
as Exhibit B.  Such written
notice shall be signed by Optionee and shall be delivered to the Company by
such means as are determined by the Plan Administrator in its discretion to
constitute adequate delivery.  The
written notice shall be accompanied by payment of the Exercise Price.  This Option shall be deemed to be exercised
upon receipt by the Company of such written notice accompanied by the Exercise
Price and the counterpart signature page to the Common Stockholders
Agreement.

 

(ii)           As a condition to the exercise of
this Option and as further set forth in Section 12 of the Plan, Optionee
agrees to make adequate provision for federal, state or other tax withholding
obligations, if any, which arise upon the vesting or exercise of the Option, or
disposition of Shares, whether by withholding, direct payment to the Company,
or otherwise.

 

(iii)          The Company is not obligated, and will
have no liability for failure, to issue or deliver any Shares upon exercise of
the Option unless such issuance or delivery would comply with the Applicable
Laws, with such compliance determined by the Company in consultation with its
legal counsel.  This Option may not be
exercised until such time as the Plan has been approved by the stockholders of
the Company, or if the issuance of such Shares upon such exercise or the method
of payment of consideration for such shares would constitute a violation of any
applicable federal or state securities or other law or regulation, including
any rule under Part 221 of Title 12 of the Code of Federal
Regulations as promulgated by the Federal Reserve Board.  As a condition to the exercise of this
Option, the Company may require Optionee to make any representation and
warranty to the Company as may be required by the Applicable Laws.  Assuming such compliance, for income tax
purposes the Shares shall be considered transferred to Optionee on the date on
which the Option is exercised with respect to such Shares.

 

4.             Method of
Payment.  Payment of the
Exercise Price shall be by any of the following, or a combination of the
following, at the election of Optionee:

 

(a)           cash or check;

 

(b)           prior to the date, if any, upon which
the Common Stock becomes a Listed Security, by surrender of other shares of
Common Stock of the Company that have an aggregate

 

2

 

Fair
Market Value on the date of surrender equal to the Exercise Price of the Shares
as to which the Option is being exercised; provided, however,
that this Section 4(b) shall only apply to Options granted following
the consummation of the merger of the Company’s wholly owned subsidiary, Ikaria
Acquisition, Inc., with and into Ikaria, Inc. if permitted by the
Administrator at the time of exercise. 
In the case of shares acquired directly or indirectly from the Company,
such shares must have been owned by Optionee for more than six (6) months
on the date of surrender (or such shorter or longer period of time as may be
deemed necessary in the Administrator’s sole discretion to avoid risk of the
incurrence of adverse accounting charges by the Company);

 

(c)           following the date, if any, upon
which the Common Stock is a Listed Security, and if the Company is at such time
permitting “same day sale” cashless brokered exercises, delivery of a properly
executed exercise notice together with irrevocable instructions to a broker
participating in such cashless brokered exercise program to deliver promptly to
the Company the amount required to pay the exercise price (and applicable
withholding taxes); or

 

(d)           any other method of payment permitted
under the Plan and approved by the Administrator at the time of exercise.

 

5.             Termination
of Relationship. 
Following the date of termination of Optionee’s Continuous Service
Status for any reason (the “Termination Date”), any portion of the
Option which is then unvested and unexercisable (as increased after giving effect
to Section 5(a), if applicable) shall be forfeited.  To the extent that Optionee is not entitled
to exercise this Option as of the Termination Date, or if Optionee does not
exercise this Option within the Termination Period set forth in the Notice or the
termination periods set forth below (as applicable), the Option shall
terminate.  In no event may any Option be
exercised after the Expiration Date of the Option as set forth in the Notice.

 

(a)           Acceleration of Vesting
Upon Certain Events.  In
the event that the termination of Optionee’s Continuous Service Status is a
termination to which Section 5(a) of the Employment Agreement, dated
as of July 23, 2007, by and between Optionee and the Company (the “Employment
Agreement”) applies, the unvested portion of the Option shall automatically
become vested as to that portion thereof that would have become vested during
the period beginning on the Termination Date and ending on the first
anniversary of the Termination Date, assuming that Optionee’s employment had
continued during the entirety of such period; provided, that if the
Termination Date is on or after the date on which a Change in Control occurs,
then the Option shall automatically become fully vested as of the Termination
Date.  To the extent Optionee is vested
in the Option Shares after giving effect to this Section 5(a), Optionee
may exercise this Option during the Termination Period set forth in the
Notice.  For purposes of this Stock
Option Agreement, the term “Change in Control” shall have the meaning set forth
in the Employment Agreement.

 

(b)           Other Terminations.  In connection with any termination other than
a termination covered by Section 5(a), Optionee may exercise the Option
only as described below:

 

(i)            Termination upon
Disability of Optionee. 
In the event of termination of Optionee’s Continuous Service Status as a
result of Optionee’s Disability,

 

3

 

Optionee
may, but only within six (6) months from the Termination Date, exercise
this Option to the extent Optionee was vested in the Option Shares as of such
Termination Date.

 

(ii)           Death of Optionee.  In the event of the death of Optionee (a) during
the term of this Option and while an Employee or Consultant of the Company and
having been in Continuous Service Status since the date of grant of the Option,
or (b) within ninety (90) days after Optionee’s Termination Date, the
Option may be exercised at any time within six months following the date of
death by Optionee’s estate or by a person who acquired the right to exercise
the Option by bequest or inheritance, but only to the extent Optionee was
vested in the Option as of the Termination Date.

 

(iii)          Termination for Cause.  In the event Optionee’s Continuous Service
Status is terminated for Cause, the Option shall terminate immediately upon
such termination for Cause as set forth in Section 10(b)(iv) of the Plan.  In the event Optionee’s employment or
consulting relationship with the Company is suspended pending investigation of
whether such relationship shall be terminated for Cause, all Optionee’s rights
under the Option, including the right to exercise the Option, shall be
suspended during the investigation period, also as set forth in Section 10(b)(iv)
of the Plan.  For purposes of this Stock
Option Agreement, the term “Cause” shall have the meaning set forth in the
Employment Agreement.

 

6.             Restrictions
on Transfers of the Option and the Shares.  This Option may not be transferred in any
manner otherwise than by will or by the laws of descent or distribution and may
be exercised during the lifetime of Optionee only by him or her.  The terms of this Option shall be binding
upon the executors, administrators, heirs, successors and assigns of Optionee.  The Shares issued upon exercise of this
Option are subject to the restrictions on transfers set forth in the Common
Stockholders Agreement attached hereto as Exhibit B.

 

7.             Tax
Consequences.  Below is a
brief summary as of the date of this Option of certain of the federal tax
consequences of exercise of this Option and disposition of the Shares under the
laws in effect as of the Date of Grant. 
THIS SUMMARY IS INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT
TO CHANGE.  OPTIONEE SHOULD CONSULT A TAX
ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

 

(a)           Incentive Stock Option.

 

(i)            Tax Treatment upon
Exercise and Sale of Shares. 
If this Option qualifies as an Incentive Stock Option, there will be no
regular federal income tax liability upon the exercise of the Option, although
the excess, if any, of the fair market value of the Shares on the date of
exercise over the Exercise Price will be treated as an adjustment to the
alternative minimum tax for federal tax purposes and may subject Optionee to
the alternative minimum tax in the year of exercise.  If Shares issued upon exercise of an
Incentive Stock Option are held for at least one year after exercise and are
disposed of at least two years after the Option grant date, any gain realized
on disposition of the Shares will also be treated as long-term capital gain for
federal income tax purposes.  If Shares
issued upon exercise of an Incentive Stock Option are disposed of within such
one-year period or within two years after the Option grant date, any gain

 

4

 

realized
on such disposition will be treated as compensation income (taxable at ordinary
income rates) to the extent of the difference between the Exercise Price and
the lesser of (i) the fair market value of the Shares on the date of
exercise, or (ii) the sale price of the Shares.

 

(ii)           Notice of Disqualifying
Dispositions.  With
respect to any Shares issued upon exercise of an Incentive Stock Option, if
Optionee sells or otherwise disposes of such Shares on or before the later of (i) the
date two years after the Option grant date, or (ii) the date one year
after the date of exercise, Optionee shall immediately notify the Company in
writing of such disposition.  Optionee
acknowledges and agrees that he or she may be subject to income tax withholding
by the Company on the compensation income recognized by Optionee from the early
disposition by payment in cash or out of the current earnings paid to Optionee.

 

(b)           Nonstatutory Stock Option.  If this Option does not qualify as an
Incentive Stock Option, there may be a regular federal (and state) income tax
liability upon the exercise of the Option. 
Optionee will be treated as having received compensation income (taxable
at ordinary income tax rates) equal to the excess, if any, of the fair market
value of the Shares on the date of exercise over the Exercise Price.  If Optionee is an Employee, the Company will
be required to withhold from Optionee’s compensation or collect from Optionee
and pay to the applicable taxing authorities an amount equal to a percentage of
this compensation income at the time of exercise.  If Shares issued upon exercise of a
Nonstatutory Stock Option are held for at least one year, any gain realized on
disposition of the Shares will be treated as long-term capital gain for federal
income tax purposes.

 

8.             Lock-Up
Agreement.  In connection
with the initial public offering of the Company’s securities and upon request
of the Company or the underwriters managing any underwritten offering of the
Company’s securities, Optionee hereby agrees not to sell, make any short sale
of, loan, grant any option for the purchase of, or otherwise dispose of any
securities of the Company (other than those included in the registration)
without the prior written consent of such underwriters for such period (not to
exceed 180 days, but subject to such extension(s) as may be required by the
underwriters in order to publish research reports while complying with the Rule
2711 of the National Association of Securities Dealers, Inc.) from the effective
date of such registration as may be requested by such managing underwriters and
to execute an agreement reflecting the foregoing as may be requested by the
underwriters at the time of the Company’s initial public offering.  The foregoing restrictions shall be subject
to any longer restrictive periods that may be agreed between an Optionee and
the Company, including without limitation as provided in that certain Common
Stockholders Agreement dated as of February 22, 2007, by and among the
Company and certain current holders of the Company’s Common Stock.

 

9.             Effect of
Agreement.  Optionee
acknowledges receipt of a copy of the Plan and represents that he or she is
familiar with the terms and provisions thereof (and has had an opportunity to
consult counsel regarding the Option terms), and hereby accepts this Option and
agrees to be bound by its contractual terms as set forth herein and in the
Plan.  Optionee hereby agrees to accept
as binding, conclusive and final all decisions and interpretations of the Plan
Administrator regarding any questions relating to the Option.  In the event of a conflict between the terms
and provisions of the Plan and the terms and provisions of the Notice and this
Agreement, the Plan terms and provisions shall prevail.  The Option, including the Plan,

 

5

 

constitutes
the entire agreement between Optionee and the Company on the subject matter
hereof and supersedes all proposals, written or oral, and all other
communications between the parties relating to such subject matter.

 

[BY EXECUTING THE NOTICE OF STOCK OPTION GRANT TO WHICH THIS AGREEMENT
IS ATTACHED YOU AGREE TO THE TERMS SET FORTH HEREIN]

 

6

 

EXHIBIT A

 

IKARIA HOLDINGS, INC.

 

2007 STOCK OPTION PLAN

 

EXERCISE NOTICE AND RESTRICTED STOCK PURCHASE AGREEMENT

 

This
Agreement (“Agreement”) is made as of
                  ,
by and between Ikaria Holdings, Inc., a Delaware corporation (the “Company”),
and Matthew M. Bennett (“Purchaser”). 
To the extent any capitalized terms used in this Agreement are not
defined, they shall have the meaning ascribed to them in the 2007 Stock Option
Plan.

 

1.             Exercise
of Option.  Subject to the
terms and conditions hereof, Purchaser hereby elects to exercise his or her
option to purchase
              
shares of the Non-Voting Common Stock (the “Shares”) of the Company
under and pursuant to the Company’s 2007 Stock Option Plan (the “Plan”)
and the Stock Option Agreement granted July 23, 2007 (the “Option
Agreement”).  The purchase price for
the Shares shall be $4.63 per Share for a total purchase price of
$              .  The term “Shares” refers to the
purchased Shares and all securities received in replacement of the Shares or as
stock dividends or splits, all securities received in replacement of the Shares
in a recapitalization, merger, reorganization, exchange or the like, and all
new, substituted or additional securities or other properties to which
Purchaser is entitled by reason of Purchaser’s ownership of the Shares.  Enclosed herewith is a counterpart signature page indicating
Purchaser’s 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 (the “Common Stockholders Agreement”).

 

2.             Time and
Place of Exercise.  The
purchase and sale of the Shares under this Agreement shall occur at the
principal office of the Company simultaneously with the execution and delivery
of this Agreement in accordance with the provisions of Section 3(b) of
the Option Agreement.  On such date, the
Company will deliver to Purchaser a certificate representing the Shares to be
purchased by Purchaser (which shall be issued in Purchaser’s name) against
payment of the exercise price therefor by Purchaser by any method listed in Section 4
of the Option Agreement.

 

3.             Limitations
on Transfer.  In addition
to any other limitation on transfer created by applicable securities laws,
Purchaser shall not assign, encumber or dispose of any interest in the Shares
except in compliance with the Common Stockholders Agreement and applicable
securities laws.

 

4.             Investment
and Taxation Representations. 
In connection with the purchase of the Shares, Purchaser represents to
the Company the following:

 

(a)           Purchaser is aware of the Company’s
business affairs and financial condition and has acquired sufficient
information about the Company to reach an informed and

 

 

knowledgeable
decision to acquire the Shares.  Purchaser
is purchasing these securities for investment for his or her own account only
and not with a view to, or for resale in connection with, any “distribution”
thereof within the meaning of the Securities Act of 1933, as amended (the “Securities
Act”), or under any applicable provision of state law.  Purchaser does not have any present intention
to transfer the Shares to any person or entity.

 

(b)           Purchaser understands that the Shares
have not been registered under the Securities Act by reason of a specific
exemption therefrom, which exemption depends upon, among other things, the bona
fide nature of Purchaser’s investment intent as expressed herein.

 

(c)           Purchaser further acknowledges and
understands that the securities must be held indefinitely unless they are
subsequently registered under the Securities Act or an exemption from such
registration is available.  Purchaser
further acknowledges and understands that the Company is under no obligation to
register the securities.  Purchaser
understands that the certificate(s) evidencing the securities will be
imprinted with a legend which prohibits the transfer of the securities unless
they are registered or such registration is not required in the opinion of
counsel for the Company.

 

(d)           Purchaser is familiar with the
provisions of Rules 144 and 701, each promulgated under the Securities
Act, which, in substance, permit limited public resale of “restricted
securities” acquired, directly or indirectly, from the issuer of the securities
(or from an affiliate of such issuer), in a non-public offering subject to the
satisfaction of certain conditions. 
Purchaser understands that the Company provides no assurances as to
whether he or she will be able to resell any or all of the Shares pursuant to Rule 144
or Rule 701, which rules require, among other things, that the
Company be subject to the reporting requirements of the Securities Exchange Act
of 1934, as amended, that resales of securities take place only after the
holder of the Shares has held the Shares for certain specified time periods,
and under certain circumstances, that resales of securities be limited in
volume and take place only pursuant to brokered transactions.  Notwithstanding this paragraph (d), Purchaser
acknowledges and agrees to the restrictions set forth in paragraph (e) below.

 

(e)           Purchaser further understands that in
the event all of the applicable requirements of Rule 144 or 701 are not
satisfied, registration under the Securities Act, compliance with Regulation A,
or some other registration exemption will be required; and that,
notwithstanding the fact that Rules 144 and 701 are not exclusive, the
Staff of the Securities and Exchange Commission has expressed its opinion that
persons proposing to sell private placement securities other than in a
registered offering and otherwise than pursuant to Rule 144 or 701 will
have a substantial burden of proof in establishing that an exemption from
registration is available for such offers or sales, and that such persons and
their respective brokers who participate in such transactions do so at their
own risk.

 

(f)            Purchaser understands that Purchaser
may suffer adverse tax consequences as a result of Purchaser’s purchase or
disposition of the Shares.  Purchaser
represents that Purchaser has consulted any tax consultants Purchaser deems
advisable in connection with the purchase or disposition of the Shares and that
Purchaser is not relying on the Company for any tax advice.

 

2

 

5.             Restrictive
Legends and Stop-Transfer Orders.

 

(a)           Legends.  The certificate or certificates representing
the Shares shall bear the following legends (as well as any legends required by
applicable state and federal corporate and securities laws):

 

(i)                                     THE SHARES REPRESENTED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND
HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION
WITH, THE SALE OR DISTRIBUTION THEREOF. 
NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL FOR THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.

 

(ii)                                  THE SHARES
REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH
THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF
WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.

 

(b)           Stop-Transfer Notices.  Purchaser agrees that, in order to ensure
compliance with the restrictions referred to herein, the Company may issue
appropriate “stop transfer” instructions to its transfer agent, if any, and
that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.

 

(c)           Refusal to Transfer.  The Company shall not be required (i) to
transfer on its books any Shares that have been sold or otherwise transferred
in violation of any of the provisions of this Agreement or (ii) to treat
as owner of such Shares or to accord the right to vote or pay dividends to any
purchaser or other transferee to whom such Shares shall have been so
transferred.

 

6.             No
Employment Rights. 
Nothing in this Agreement shall affect in any manner whatsoever the
right or power of the Company, or a parent or subsidiary of the Company, to
terminate Purchaser’s employment or consulting relationship, for any reason,
with or without cause.

 

7.             Lock-Up
Agreement.  In connection
with the initial public offering of the Company’s securities and upon request
of the Company or the underwriters managing any underwritten offering of the
Company’s securities, Purchaser agrees not to sell, make any short sale of,
loan, grant any option for the purchase of, or otherwise dispose of any
securities of the Company (other than those included in the registration) without
the prior written consent of such

 

3

 

underwriters
for such period (not to exceed 180 days, but subject to such extension(s) as
may be required by the underwriters in order to publish research reports while
complying with the Rule 2711 of the National Association of Securities Dealers,
Inc.) from the effective date of such registration as may be requested by such
managing underwriters and to execute an agreement reflecting the foregoing as
may be requested by the underwriters at the time of the Company’s initial
public offering.  The foregoing
restrictions shall be subject to any longer restrictive periods that may be
agreed between an Optionee and the Company, including without limitation as
provided in that certain Common Stockholders Agreement.

 

8.             Miscellaneous.

 

(a)           Governing Law.  This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
Washington, without giving effect to principles of conflicts of law.

 

(b)           Entire Agreement;
Enforcement of Rights.  This Agreement sets forth the entire agreement
and understanding of the parties relating to the subject matter herein and
merges all prior discussions between them. 
No modification of or amendment to this Agreement, nor any waiver of any
rights under this Agreement, shall be effective unless in writing signed by the
parties to this Agreement.  The failure
by either party to enforce any rights under this Agreement shall not be
construed as a waiver of any rights of such party.

 

(c)           Severability.  If one or more provisions of this Agreement
are held to be unenforceable under applicable law, the parties agree to renegotiate
such provision in good faith.  In the
event that the parties cannot reach a mutually agreeable and enforceable
replacement for such provision, then (i) such provision shall be excluded
from this Agreement, (ii) the balance of the Agreement shall be
interpreted as if such provision were so excluded and (iii) the balance of
the Agreement shall be enforceable in accordance with its terms.

 

(d)           Construction.  This Agreement is the result of negotiations
between and has been reviewed by each of the parties hereto and their
respective counsel, if any; accordingly, this Agreement shall be deemed to be
the product of all of the parties hereto, and no ambiguity shall be construed
in favor of or against any one of the parties hereto.

 

(e)           Notices.  Any notice required or permitted by this
Agreement shall be in writing and shall be deemed sufficient when delivered
personally or sent by telegram or fax or forty-eight (48) hours after being
deposited in the U.S. mail, as certified or registered mail, with postage prepaid,
and addressed to the party to be notified at such party’s address as set forth
below or as subsequently modified by written notice.

 

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

 

4

 

(g)           Successors and Assigns.  The rights and benefits of this Agreement
shall inure to the benefit of, and be enforceable by the Company’s successors
and assigns.  The rights and obligations
of Purchaser under this Agreement may only be assigned with the prior written
consent of the Company.

 

(h)           California Corporate
Securities Law.  THE SALE
OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN
QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND
THE ISSUANCE OF THE SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF
THE CONSIDERATION THEREFOR PRIOR TO THE QUALIFICATION IS UNLAWFUL, UNLESS THE
SALE OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102 OR
25105 OF THE CALIFORNIA CORPORATIONS CODE. 
THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED
UPON THE QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.

 

[Signature Page Follows]

 

5

 

The
parties have executed this Exercise Notice and Restricted Stock Purchase
Agreement as of the date first set forth above.

 

	
   

  	
   

  	
  COMPANY:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  IKARIA
  HOLDINGS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PURCHASER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Matthew
  M. Bennett

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Signature)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
					

 

I,
                                        ,
spouse of Matthew M. Bennett, have read and hereby approve the foregoing
Agreement.  In consideration of the
Company’s granting my spouse the right to purchase the Shares as set forth in
the Agreement, I hereby agree to be irrevocably bound by the Agreement and
further agree that any community property or other such interest shall hereby
by similarly bound by the Agreement.  I
hereby appoint my spouse as my attorney-in-fact with respect to any amendment
or exercise of any rights under the Agreement.

 

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Spouse
  of Matthew M. Bennett

  

 

6

 

NOTE:  THE FOLLOWING SHEET IS A COUNTERPART SIGNATURE
PAGE TO THE COMPANY’S COMMON STOCKHOLDER AGREEMENT, WHICH MUST ALSO BE SIGNED
AND RETURNED TO THE COMPANY IN ORDER TO EXERCISE YOUR STOCK OPTION PURSUANT TO SECTION 6
OF YOUR STOCK OPTION AGREEMENT.

 

IF
YOU ARE MARRIED YOUR SPOUSE MUST ALSO SIGN THE COUNTERPART SPOUSAL CONSENT
TO THE COMMON STOCKHOLDERS AGREEMENT.

 

 

IN
WITNESS WHEREOF, this Common Stockholders Agreement has been signed by or on
behalf of each of the parties hereto, all as of the date first above written.

 

	
   

  	
   

  	
  INDIVIDUAL
  STOCKHOLDER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:
  Matthew M. Bennett

  

 

[SIGNATURE PAGE TO IKARIA
HOLDINGS, INC. COMMON STOCKHOLDERS AGREEMENT]

 

 

The
undersigned acknowledges that the undersigned has read the foregoing Common
Stockholders Agreement between the Company and the undersigned’s spouse,
understands that the undersigned’s spouse holds shares of Common Stock subject
to the provisions of such Agreement and agrees to be bound by the foregoing
Agreement.

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Spouse
  of Matthew M. Bennett

  

 

[SIGNATURE
PAGE TO IKARIA HOLDINGS, INC. COMMON STOCKHOLDERS AGREEMENT]

 

 

EXHIBIT B

 

See
Common Stockholders Agreement among Ikaria, Inc. and the stockholders
listed on the signature pages thereto, dated as of February 22, 2007,
filed as exhibit 4.2 to Ikaria Inc.’s Registration Statement on Form S-1
filed on May 13, 2010.Exhibit
10.33

 

IKARIA HOLDINGS, INC.

 

2007 STOCK OPTION PLAN

 

NOTICE OF STOCK OPTION GRANT

 

Ralf
Rosskamp (“Optionee”)

c/o
Ikaria Holdings, Inc.

6
Route 173

Clinton,
NJ 08809

 

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

 

	
   

  	
  Board
  Approval Date:

  	
   

  	
  October 4,
  2007

  
	
   

  	
   

  	
   

  	
   

  
	
   

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

  	
   

  	
  October 4,
  2007

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Exercise
  Price per Share:

  	
   

  	
  $4.63

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  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:

  	
   

  	
  300,000

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Total
  Exercise Price:

  	
   

  	
  $1,389,000

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Type
  of Option:

  	
   

  	
  Incentive
  Stock Option

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Expiration
  Date:

  	
   

  	
  September 30,
  2017

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Vesting
  Commencement Date:

  	
   

  	
  October 1,
  2007

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  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 (4) 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;
  and provided, further, that vesting and exercisability of the Option may
  accelerate as provided in Section 5 of the Stock Option Agreement.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  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 Dale). 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 to 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 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.

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ Ralf Rosskamp

  	
   

  	
  By: 

  	
  /s/ Elizabeth A. Larkin

  
	
  Ralf
  Rosskamp

  	
   

  	
  Name:

  	
  Elizabeth
  A. Larkin

  
	
   

  	
   

  	
  Title:

  	
  Chief
  Financial Officer

  

 

2

 

	
  Attachments:

  	
  Ikaria
  Holdings, Inc. 2007 Stock Option Plan

  
	
   

  	
  Stock
  Option Agreement

  
	
   

  	
  Exhibit A:
  Form of Exercise Notice & Restricted Stock Purchase Agreement

  
	
   

  	
  Exhibit B:
  Form of Common Stockholders Agreement

  

 

3

 

Ikaria Holdings, Inc. 2007 Stock Option Plan

 

See
Ikaria, Inc. 2007 Stock Option Plan, as amended, filed as exhibit 10.4 to
Ikaria Inc.’s Registration Statement on Form S-1 filed on May 13,
2010.

 

 

IKARIA HOLDINGS, INC.

 

2007 STOCK OPTION PLAN

 

STOCK OPTION AGREEMENT

 

1.                                       Grant
of Option.  Ikaria Holdings, Inc., a Delaware
corporation (the “Company”), hereby grants to Ralf Rosskamp (“Optionee”),
an option (the “Option”) to purchase the total number of shares of
Common Stock (the “Shares”) set forth in the Notice of Stock Option
Grant (the “Notice”), at the exercise price per Share set forth in the
Notice (the “Exercise Price”) subject to the terms, definitions and provisions
of the Ikaria Holdings, Inc. 2007 Stock Option Plan (the “Plan”)
adopted by the Company, which is incorporated in this Agreement by
reference.  Unless otherwise defined in
this Agreement, the terms used in this Agreement shall have the meanings defined
in the Plan.  This Option shall initially
be exercisable for shares of Non-Voting Common Stock of the Company;
provided, however, that in the event of 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
automatically become exercisable instead for shares of the Company’s Voting Common Stock without any further action on the part of the
Company or Optionee.

 

2.                                       Designation
of Option.  This Option is intended to be an Incentive
Stock Option as defined in Section 422 of the Code only to the extent so
designated in the Notice, and to the extent it is not so designated or to the
extent the Option does not qualify as an Incentive Stock Option, it is intended
to be a Nonstatutory Stock Option.

 

Notwithstanding
the above, if designated as an Incentive Stock Option, in the event that the
Shares subject to this Option (and all other Incentive Stock Options granted to
Optionee by the Company or any Parent or Subsidiary, including under other
plans of the Company) that first become exercisable in any calendar year have
an aggregate fair market value (determined for each Share as of the date of
grant of the option covering such Share) in excess of $100,000, the Shares in
excess of $100,000 shall be treated as subject to a Nonstatutory Stock Option,
in accordance with Section 5(c) of the Plan.

 

3.                                       Exercise
of Option.  This Option shall be exercisable during its
term in accordance with the Vesting/Exercise Schedule set out in the Notice and
with the provisions of Section 10 of the Plan as follows:

 

(a)                                  Right
to Exercise.

 

(i)                                     This Option may
not be exercised for a fraction of a share.

 

(ii)                                  In the event of
Optionee’s death, disability or other termination of employment, the
exercisability of the Option is governed by Section 5 below, subject to
the limitations contained in this Section 3.

 

 

(iii)                               In no event may
this Option be exercised after the Expiration Date of the Option as set forth
in the Notice.

 

(b)                                 Method
of Exercise.

 

(i)                                     This Option
shall be exercisable by execution and delivery of (A) the Exercise Notice
and Restricted Stock Purchase Agreement attached hereto as Exhibit A
(the “Exercise Agreement”) or of any other form of written notice
approved for such purpose by the Company which shall state Optionee’s election
to exercise the Option, the number of Shares in respect of which the Option is
being exercised, and such other representations and agreements as to the holder’s
investment intent with respect to such Shares as may be required by the Company
pursuant to the provisions of the Plan and (B) a counterpart signature page to
the Company’s Common Stockholders Agreement, a copy of which is attached hereto
as Exhibit B.  Such written
notice shall be signed by Optionee and shall be delivered to the Company by
such means as are determined by the Plan Administrator in its discretion to
constitute adequate delivery.  The
written notice shall be accompanied by payment of the Exercise Price.  This Option shall be deemed to be exercised
upon receipt by the Company of such written notice accompanied by the Exercise
Price and the counterpart signature page to the Common Stockholders
Agreement.

 

(ii)                                  As a condition
to the exercise of this Option and as further set forth in Section 12 of
the Plan, Optionee agrees to make adequate provision for federal, state or
other tax withholding obligations, if any, which arise upon the vesting or
exercise of the Option, or disposition of Shares, whether by withholding,
direct payment to the Company, or otherwise.

 

(iii)                               The Company is
not obligated, and will have no liability for failure, to issue or deliver any
Shares upon exercise of the Option unless such issuance or delivery would
comply with the Applicable Laws, with such compliance determined by the Company
in consultation with its legal counsel. 
This Option may not be exercised until such time as the Plan has been
approved by the stockholders of the Company, or if the issuance of such Shares
upon such exercise or the method of payment of consideration for such shares
would constitute a violation of any applicable federal or state securities or
other law or regulation, including any rule under Part 221 of Title
12 of the Code of Federal Regulations as promulgated by the Federal Reserve
Board.  As a condition to the exercise of
this Option, the Company may require Optionee to make any representation and
warranty to the Company as may be required by the Applicable Laws.  Assuming such compliance, for income tax purposes
the Shares shall be considered transferred to Optionee on the date on which the
Option is exercised with respect to such Shares.

 

4.                                       Method
of Payment.  Payment of the Exercise Price shall be by any
of the following, or a combination of the following, at the election of
Optionee:

 

(a)                                  cash or check;

 

(b)                                 prior to the
date, if any, upon which the Common Stock becomes a Listed Security, by
surrender of other shares of Common Stock of the Company that have an aggregate

 

2

 

Fair
Market Value on the date of surrender equal to the Exercise Price of the Shares
as to which the Option is being exercised; provided, however,
that this Section 4(b) shall only apply to Options granted following
the consummation of the merger of the Company’s wholly owned subsidiary, Ikaria
Acquisition, Inc., with and into Ikaria, Inc. if permitted by the
Administrator at the time of exercise. 
In the case of shares acquired directly or indirectly from the Company,
such shares must have been owned by Optionee for more than six (6) months
on the date of surrender (or such shorter or longer period of time as may be
deemed necessary in the Administrator’s sole discretion to avoid risk of the
incurrence of adverse accounting charges by the Company);

 

(c)                                  following the
date, if any, upon which the Common Stock is a Listed Security, and if the
Company is at such time permitting “same day sale” cashless brokered exercises,
delivery of a properly executed exercise notice together with irrevocable
instructions to a broker participating in such cashless brokered exercise
program to deliver promptly to the Company the amount required to pay the
exercise price (and applicable withholding taxes); or

 

(d)                                 any other
method of payment permitted under the Plan and approved by the Administrator at
the time of exercise.

 

5.                                       Termination of Relationship.  Following the date of
termination of Optionee’s Continuous Service Status for any reason (the “Termination
Date”), any portion of the Option which is then unvested and unexercisable
(as increased after giving effect to Section 5(a), if applicable) shall be
forfeited.  To the extent that Optionee
is not entitled to exercise this Option as of the Termination Date, or if
Optionee does not exercise this Option within the Termination Period set forth
in the Notice or the termination periods set forth below (as applicable), the
Option shall terminate.  In no event may
any Option be exercised after the Expiration Date of the Option as set forth in
the Notice.

 

(a)                                  Acceleration of Vesting Upon Certain Events.  In the event
that the termination of Optionee’s Continuous Service Status is a termination
to which Section 5(a) of the Employment Agreement, dated as of October 1,
2007, by and between Optionee and the Company (the “Employment Agreement”)
applies, the unvested portion of the Option shall automatically become vested
as to that portion thereof that would have become vested during the period
beginning on the Termination Date and ending on the first anniversary of the
Termination Date, assuming that Optionee’s employment had continued during the
entirety of such period; provided, that if the Termination Date is on or
after the date on which a Change in Control occurs, then the Option shall
automatically become fully vested as of the Termination Date.  To the extent Optionee is vested in the
Option Shares after giving effect to this Section 5(a), Optionee may
exercise this Option during the Termination Period set forth in the
Notice.  For purposes of this Stock Option
Agreement, the term “Change in Control” shall have the meaning set forth in the
Employment Agreement.

 

(b)                                 Other Terminations.  In connection with any
termination other than a termination covered by Section 5(a), Optionee may
exercise the Option only as described below:

 

(i)                                     Termination upon Disability of Optionee.  In the event of
termination of Optionee’s Continuous Service Status as a result of Optionee’s
Disability, 

 

3

 

Optionee
may, but only within six (6) months from the Termination Date, exercise
this Option to the extent Optionee was vested in the Option Shares as of such
Termination Date.

 

(ii)                                  Death of Optionee.  In the event of the death of
Optionee (a) during the term of this Option and while an Employee or
Consultant of the Company and having been in Continuous Service Status since
the date of grant of the Option, or (b) within ninety (90) days after
Optionee’s Termination Date, the Option may be exercised at any time within six
(6) months following the date of death by Optionee’s estate or by a person
who acquired the right to exercise the Option by bequest or inheritance, but
only to the extent Optionee was vested in the Option as of the Termination
Date.

 

(iii)                               Termination for Cause.  In the event Optionee’s
Continuous Service Status is terminated for Cause, the Option shall terminate
immediately upon such termination for Cause as set forth in Section 10(b)(iv) of
the Plan.  In the event Optionee’s
employment or consulting relationship with the Company is suspended pending
investigation of whether such relationship shall be terminated for Cause, all
Optionee’s rights under the Option, including the right to exercise the Option,
shall be suspended during the investigation period, also as set forth in Section 10(b)(iv) of
the Plan.  For purposes of this Stock
Option Agreement, the term “Cause” shall have the meaning set forth in the
Employment Agreement.

 

6.                                       Restrictions on Transfers of the Option and the Shares.  This Option may
not be transferred in any manner otherwise than by will or by the laws of
descent or distribution and may be exercised during the lifetime of Optionee
only by him or her.  The terms of this
Option shall be binding upon the executors, administrators, heirs, successors
and assigns of Optionee.  The Shares
issued upon exercise of this Option are subject to the restrictions on
transfers set forth in the Common Stockholders Agreement attached hereto as Exhibit B.

 

7.                                       Tax Consequences.  Below is a brief summary as of the date of this
Option of certain of the federal tax consequences of exercise of this Option
and disposition of the Shares under the laws in effect as of the Date of
Grant.  THIS SUMMARY IS INCOMPLETE, AND
THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.  OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE
EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

 

(a)                                  Incentive
Stock Option.

 

(i)                                     Tax Treatment upon Exercise and Sale of
Shares.  If this Option
qualifies as an Incentive Stock Option, there will be no regular federal income
tax liability upon the exercise of the Option, although the excess, if any, of
the fair market value of the Shares on the date of exercise over the Exercise
Price will be treated as an adjustment to the alternative minimum tax for
federal tax purposes and may subject Optionee to the alternative minimum tax in
the year of exercise.  If Shares issued
upon exercise of an Incentive Stock Option are held for at least one (1) year
after exercise and are disposed of at least two (2) years after the Option
grant date, any gain realized on disposition of the Shares will also be treated
as long-term capital gain for federal income tax purposes.  If Shares issued upon exercise of an
Incentive Stock Option are disposed of within such one-year period or within two
(2) years after the Option grant date, any

 

4

 

gain
realized on such disposition will be treated as compensation income (taxable at
ordinary income rates) to the extent of the difference between the Exercise
Price and the lesser of (i) the fair market value of the Shares on the
date of exercise, or (ii) the sale price of the Shares.

 

(ii)                                  Notice
of Disqualifying Dispositions.  With respect to any Shares issued upon
exercise of an Incentive Stock Option, if Optionee sells or otherwise disposes
of such Shares on or before the later of (i) the date two (2) years
after the Option grant date, or (ii) the date one (1) year after the
date of exercise, Optionee shall immediately notify the Company in writing of
such disposition.  Optionee acknowledges
and agrees that he or she may be subject to income tax withholding by the
Company on the compensation income recognized by Optionee from the early
disposition by payment in cash or out of the current earnings paid to Optionee.

 

(b)                                 Nonstatutory
Stock Option.  If this Option does not qualify as an
Incentive Stock Option, there may be a regular federal (and state) income tax
liability upon the exercise of the Option. 
Optionee will be treated as having received compensation income (taxable
at ordinary income tax rates) equal to the excess, if any, of the fair market
value of the Shares on the date of exercise over the Exercise Price.  If Optionee is an Employee, the Company will
be required to withhold from Optionee’s compensation or collect from Optionee
and pay to the applicable taxing authorities an amount equal to a percentage of
this compensation income at the time of exercise.  If Shares issued upon exercise of a
Nonstatutory Stock Option are held for at least one year, any gain realized on
disposition of the Shares will be treated as long-term capital gain for federal
income tax purposes.

 

8.                                       Lock-Up
Agreement.  In connection with the initial public
offering of the Company’s securities and upon request of the Company or the
underwriters managing any underwritten offering of the Company’s securities,
Optionee hereby agrees not to sell, make any short sale of, loan, grant any
option for the purchase of, or otherwise dispose of any securities of the
Company (other than those included in the registration) without the prior
written consent of such underwriters for such period (not to exceed 180 days,
but subject to such extension(s) as may be required by the underwriters in
order to publish research reports while complying with the Rule 2711 of
the National Association of Securities Dealers, Inc.) from the effective
date of such registration as may be requested by such managing underwriters and
to execute an agreement reflecting the foregoing as may be requested by the
underwriters at the time of the Company’s initial public offering.  The foregoing restrictions shall be subject
to any longer restrictive periods that may be agreed between an Optionee and
the Company, including without limitation as provided in that certain Common
Stockholders Agreement dated as of February 22, 2007, by and among the
Company and certain current holders of the Company’s Common Stock.

 

9.                                       Effect
of Agreement.  Optionee acknowledges receipt of a copy of
the Plan and represents that he or she is familiar with the terms and
provisions thereof (and has had an opportunity to consult counsel regarding the
Option terms), and hereby accepts this Option and agrees to be bound by its
contractual terms as set forth herein and in the Plan.  Optionee hereby agrees to accept as binding,
conclusive and final all decisions and interpretations of the Plan
Administrator regarding any questions relating to the Option.  In the event of a conflict between the terms
and provisions of the Plan and the terms and provisions of the Notice and this

 

5

 

Agreement,
the Plan terms and provisions shall prevail. 
The Option, including the Plan, constitutes the entire agreement between
Optionee and the Company on the subject matter hereof and supersedes all
proposals, written or oral, and all other communications between the parties
relating to such subject matter.

 

[BY EXECUTING THE NOTICE OF STOCK OPTION GRANT TO WHICH THIS AGREEMENT
IS ATTACHED YOU AGREE TO THE TERMS SET FORTH HEREIN]

 

6

 

EXHIBIT A

 

IKARIA HOLDINGS, INC.

 

2007 STOCK OPTION PLAN

 

EXERCISE NOTICE AND RESTRICTED STOCK PURCHASE AGREEMENT

 

This
Agreement (“Agreement”) is made as of
                              ,
by and between Ikaria Holdings, Inc., a Delaware corporation (the “Company”),
and Ralf Rosskamp (“Purchaser”). 
To the extent any capitalized terms used in this Agreement are not
defined, they shall have the meaning ascribed to them in the 2007 Stock Option
Plan.

 

1.                                       Exercise of Option.  Subject to the terms and
conditions hereof, Purchaser hereby elects to exercise his or her option to
purchase
                    
shares of the Non-Voting Common Stock (the “Shares”) of the Company
under and pursuant to the Company’s 2007 Stock Option Plan (the “Plan”)
and the Stock Option Agreement granted October 1, 2007 (the “Option
Agreement”).  The purchase price for
the Shares shall be $4.63 per Share for a total purchase price of
$                    .  The term “Shares” refers to the
purchased Shares and all securities received in replacement of the Shares or as
stock dividends or splits, all securities received in replacement of the Shares
in a recapitalization, merger, reorganization, exchange or the like, and all
new, substituted or additional securities or other properties to which
Purchaser is entitled by reason of Purchaser’s ownership of the Shares.  Enclosed herewith is a counterpart signature page indicating
Purchaser’s 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 (the “Common Stockholders Agreement”).

 

2.                                       Time and Place of Exercise.  The purchase and sale of the Shares under
this Agreement shall occur at the principal office of the Company
simultaneously with the execution and delivery of this Agreement in accordance
with the provisions of Section 3(b) of the Option Agreement.  On such date, the Company will deliver to Purchaser a
certificate representing the Shares to be purchased by Purchaser (which shall
be issued in Purchaser’s name) against payment of the exercise price therefor
by Purchaser by any method listed in Section 4 of the Option Agreement.

 

3.                                       Limitations on Transfer.  In addition to any other
limitation on transfer created by applicable securities laws, Purchaser shall
not assign, encumber or dispose of any interest in the Shares except in
compliance with the Common Stockholders Agreement and applicable securities
laws.

 

4.                                       Investment and Taxation Representations.  In connection with
the purchase of the Shares, Purchaser represents to the Company the following:

 

(a)                                  Purchaser is
aware of the Company’s business affairs and financial condition and has
acquired sufficient information about the Company to reach an informed and

 

 

knowledgeable
decision to acquire the Shares. 
Purchaser is purchasing these securities for investment for his or her
own account only and not with a view to, or for resale in connection with, any “distribution”
thereof within the meaning of the Securities Act of 1933, as amended (the “Securities
Act”), or under any applicable provision of state law.  Purchaser does not have any present intention
to transfer the Shares to any person or entity.

 

(b)                                 Purchaser
understands that the Shares have not been registered under the Securities Act
by reason of a specific exemption therefrom, which exemption depends upon,
among other things, the bona fide nature of Purchaser’s investment intent as
expressed herein.

 

(c)                                  Purchaser
further acknowledges and understands that the securities must be held
indefinitely unless they are subsequently registered under the Securities Act
or an exemption from such registration is available.  Purchaser further acknowledges and
understands that the Company is under no obligation to register the
securities.  Purchaser understands that
the certificate(s) evidencing the securities will be imprinted with a
legend which prohibits the transfer of the securities unless they are
registered or such registration is not required in the opinion of counsel for
the Company.

 

(d)                                 Purchaser is
familiar with the provisions of Rules 144 and 701, each promulgated under
the Securities Act, which, in substance, permit limited public resale of “restricted
securities” acquired, directly or indirectly, from the issuer of the securities
(or from an affiliate of such issuer), in a non-public offering subject to the
satisfaction of certain conditions. 
Purchaser understands that the Company provides no assurances as to
whether he or she will be able to resell any or all of the Shares pursuant to Rule 144
or Rule 701, which rules require, among other things, that the
Company be subject to the reporting requirements of the Securities Exchange Act
of 1934, as amended, that resales of securities take place only after the
holder of the Shares has held the Shares for certain specified time periods,
and under certain circumstances, that resales of securities be limited in
volume and take place only pursuant to brokered transactions.  Notwithstanding this paragraph (d), Purchaser
acknowledges and agrees to the restrictions set forth in paragraph (e) below.

 

(e)                                  Purchaser
further understands that in the event all of the applicable requirements of Rule 144
or 701 are not satisfied, registration under the Securities Act, compliance
with Regulation A, or some other registration exemption will be required; and
that, notwithstanding the fact that Rules 144 and 701 are not exclusive,
the Staff of the Securities and Exchange Commission has expressed its opinion
that persons proposing to sell private placement securities other than in a
registered offering and otherwise than pursuant to Rule 144 or 701 will
have a substantial burden of proof in establishing that an exemption from
registration is available for such offers or sales, and that such persons and
their respective brokers who participate in such transactions do so at their
own risk.

 

(f)                                    Purchaser
understands that Purchaser may suffer adverse tax consequences as a result of
Purchaser’s purchase or disposition of the Shares.  Purchaser represents that Purchaser has
consulted any tax consultants Purchaser deems advisable in connection with the
purchase or disposition of the Shares and that Purchaser is not relying on the
Company for any tax advice.

 

2

 

5.                                       Restrictive
Legends and Stop-Transfer Orders.

 

(a)                                  Legends.  The certificate or certificates representing
the Shares shall bear the following legends (as well as any legends required by
applicable state and federal corporate and securities laws):

 

(i)                                     THE SHARES REPRESENTED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND
HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION
WITH, THE SALE OR DISTRIBUTION THEREOF. 
NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL FOR THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.

 

(ii)                                  THE SHARES REPRESENTED BY
THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF
AN AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON
FILE WITH THE SECRETARY OF THE COMPANY.

 

(b)                                 Stop-Transfer
Notices.  Purchaser agrees that, in order to ensure
compliance with the restrictions referred to herein, the Company may issue
appropriate “stop transfer” instructions to its transfer agent, if any, and
that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.

 

(c)                                  Refusal
to Transfer.  The Company shall not be required (i) to
transfer on its books any Shares that have been sold or otherwise transferred
in violation of any of the provisions of this Agreement or (ii) to treat
as owner of such Shares or to accord the right to vote or pay dividends to any
purchaser or other transferee to whom such Shares shall have been so
transferred.

 

6.                                       No
Employment Rights.  Nothing in this Agreement shall affect in any
manner whatsoever the right or power of the Company, or a parent or subsidiary
of the Company, to terminate Purchaser’s employment or consulting relationship,
for any reason, with or without cause.

 

7.                                       Lock-Up
Agreement.  In connection with the initial public
offering of the Company’s securities and upon request of the Company or the underwriters
managing any underwritten offering of the Company’s securities, Purchaser
agrees not to sell, make any short sale of, loan, grant any option for the
purchase of, or otherwise dispose of any securities of the Company (other than
those included in the registration) without the prior written consent of such

 

3

 

underwriters
for such period (not to exceed 180 days, but subject to such extension(s) as
may be required by the underwriters in order to publish research reports while
complying with the Rule 2711 of the National Association of Securities
Dealers, Inc.) from the effective date of such registration as may be
requested by such managing underwriters and to execute an agreement reflecting
the foregoing as may be requested by the underwriters at the time of the
Company’s initial public offering.  The
foregoing restrictions shall be subject to any longer restrictive periods that
may be agreed between an Optionee and the Company, including without limitation
as provided in that certain Common Stockholders Agreement.

 

8.                                       Miscellaneous.

 

(a)                                  Governing
Law.  This
Agreement and all acts and transactions pursuant hereto and the rights and
obligations of the parties hereto shall be governed, construed and interpreted
in accordance with the laws of the State of Washington, without giving effect
to principles of conflicts of law.

 

(b)                                 Entire
Agreement; Enforcement of Rights.  This Agreement sets forth the entire
agreement and understanding of the parties relating to the subject matter
herein and merges all prior discussions between them.  No modification of or amendment to this
Agreement, nor any waiver of any rights under this Agreement, shall be
effective unless in writing signed by the parties to this Agreement.  The failure by either party to enforce any
rights under this Agreement shall not be construed as a waiver of any rights of
such party.

 

(c)                                  Severability.  If one or more provisions of this Agreement
are held to be unenforceable under applicable law, the parties agree to
renegotiate such provision in good faith. 
In the event that the parties cannot reach a mutually agreeable and
enforceable replacement for such provision, then (i) such provision shall
be excluded from this Agreement, (ii) the balance of the Agreement shall
be interpreted as if such provision were so excluded and (iii) the balance
of the Agreement shall be enforceable in accordance with its terms.

 

(d)                                 Construction.  This Agreement is the result of negotiations
between and has been reviewed by each of the parties hereto and their
respective counsel, if any; accordingly, this Agreement shall be deemed to be
the product of all of the parties hereto, and no ambiguity shall be construed
in favor of or against any one of the parties hereto.

 

(e)                                  Notices.  Any notice required or permitted by this
Agreement shall be in writing and shall be deemed sufficient when delivered
personally or sent by telegram or fax or forty-eight (48) hours after being
deposited in the U.S. mail, as certified or registered mail, with postage
prepaid, and addressed to the party to be notified at such party’s address as
set forth below or as subsequently modified by written notice.

 

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

 

4

 

(g)                                 Successors
and Assigns.  The rights and benefits of this Agreement
shall inure to the benefit of, and be enforceable by the Company’s successors
and assigns.  The rights and obligations
of Purchaser under this Agreement may only be assigned with the prior written
consent of the Company.

 

(h)                                 California Corporate Securities Law.  THE SALE OF THE SECURITIES
WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE
COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF THE
SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION
THEREFOR PRIOR TO THE QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES
IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE
CALIFORNIA CORPORATIONS CODE.  THE RIGHTS
OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON THE
QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.

 

[Signature Page Follows]

 

5

 

The
parties have executed this Exercise Notice and Restricted Stock Purchase
Agreement as of the date first set forth above.

 

 

	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  IKARIA
  HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PURCHASER:

  
	
   

  	
   

  
	
   

  	
  Ralf
  Rosskamp

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Signature)

  
	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
				

 

I,
                                          ,
spouse of Ralf Rosskamp, have read and hereby approve the foregoing
Agreement.  In consideration of the
Company’s granting my spouse the right to purchase the Shares as set forth in
the Agreement, I hereby agree to be irrevocably bound by the Agreement and
further agree that any community property or other such interest shall hereby
by similarly bound by the Agreement.  I
hereby appoint my spouse as my attorney-in-fact with respect to any amendment
or exercise of any rights under the Agreement.

 

 

	
   

  	
   

  
	
   

  	
  Spouse
  of Ralf Rosskamp

  

 

6

 

NOTE:
THE FOLLOWING SHEET IS A COUNTERPART SIGNATURE PAGE TO THE COMPANY’S
COMMON STOCKHOLDER AGREEMENT, WHICH MUST ALSO BE SIGNED AND RETURNED TO THE
COMPANY IN ORDER TO EXERCISE YOUR STOCK OPTION PURSUANT TO SECTION 6 OF
YOUR STOCK OPTION AGREEMENT.

 

IF
YOU ARE MARRIED YOUR SPOUSE MUST ALSO SIGN THE COUNTERPART SPOUSAL CONSENT
TO THE COMMON STOCKHOLDERS AGREEMENT.

 

 

IN
WITNESS WHEREOF, this Common Stockholders Agreement has been signed by or on
behalf of each of the parties hereto, all as of the date first above written.

 

 

	
   

  	
  INDIVIDUAL
  STOCKHOLDER:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:
  Ralf Rosskamp

  

 

[SIGNATURE
PAGE TO IKARIA HOLDINGS, INC. COMMON STOCKHOLDERS AGREEMENT]

 

 

The
undersigned acknowledges that the undersigned has read the foregoing Common
Stockholders Agreement between the Company and the undersigned’s spouse,
understands that the undersigned’s spouse holds shares of Common Stock subject
to the provisions of such Agreement and agrees to be bound by the foregoing
Agreement.

 

 

	
   

  	
   

  
	
   

  	
  Spouse
  of Ralf Rosskamp

  

 

[SIGNATURE PAGE TO IKARIA HOLDINGS, INC.
COMMON STOCKHOLDERS AGREEMENT]

 

 

EXHIBIT B

 

See Common Stockholders Agreement among Ikaria, Inc. and the
stockholders listed on the signature pages thereto, dated as of February 22,
2007, filed as exhibit 4.2 to Ikaria Inc.’s Registration Statement on Form S-1
filed on May 13, 2010.

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