Document:

Exhibit 10.6

 

June 6,
2002

 

INO THERAPEUTICS LONG TERM INCENTIVE PLAN

 

Purpose

 

The INO Therapeutics Long Term Incentive Plan (the “Plan”) is
established effective as January 1, 2001, to give Employees an incentive
to contribute to the success and profitability of INO Therapeutics (the “Company”)
and the Participating Affiliated Companies, and as a reward for doing so; and
to assist these companies in attracting and retaining the highest caliber of
Employees.

 

Article 1 - Definitions

 

For purposes of the Plan, the following terms shall mean the following:

 

1.1           “Annual
Grant” means the annual grant of Units, if any, to a Participant pursuant
to the Plan.

 

1.2           “Affiliated
Company” means a Subsidiary, or a parent of the Company that owns fifty
(50%) percent or more of the total combined voting power of all classes of
stock of the Company (the “Parent”).

 

1.3           “Board”
means the AGA Healthcare Board of Directors.

 

1.4           “Code”
means the Internal Revenue Code of 1986, as amended from time to time.

 

References to any section of the Code include
corresponding successor provisions.

 

1.5           “Change of
Control” means the occurrence of any of the following:

 

(a)           the Board votes
to approve:

 

(i)            any
consolidation or merger of the Company or the Parent pursuant to which less
than fifty (50%) percent of the outstanding voting securities of the surviving
or 

 

 

resulting
company are owned by the individuals or entities that were shareholders of the
Company or the Parent prior to the consolidation or merger;

 

(ii)           any sale,
lease, exchange or other transfer (in one transaction or a series of related
transactions) of all, or substantially all, of the assets of the Company or the
Parent other than any sale, lease, exchange or other transfer to any company in
which the Company or the Parent owns, directly or indirectly, one hundred
(100%) percent of the outstanding voting securities of such company after any
such transfer;

 

(b)           any person (as
such term is used in Section 13(d) of the Securities Exchange Act of
1934, as amended (the Exchange Act”)) other than one or more current
shareholders, the Company, or an Affiliated Company, or one or more employee
benefit plans established by the Company, or an Affiliated Company, for the
benefit of its employees, shall become the beneficial owner (within the meaning
of Rule 13d-3 under the Exchange Act) whether directly, indirectly,
beneficially or of record, of thirty-five (35%) percent or more of outstanding
common stock (other than as the result of an initial public offering); or

 

(c)           commencement by
any entity, person, or group of a tender offer or exchange offer by which the
offeree acquires more than fifty (50%) percent of the outstanding voting
securities of the Company or the Parent.

 

1.6           “Committee”
means the committee under Article 2.

 

1.7           “Company”
means INO Therapeutics and any successor thereto.

 

1.8           “Company
Value” means the value of the Company as of a Valuation Date determined in
accordance with a valuation method established by the Board for the Annual
Grant.  The Board, in its exclusive
discretion, may change the valuation method used to determine Company Value at
any time and from time to time. 
Notwithstanding the foregoing, if 

 

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the
method used to determine Company Value as of any Valuation Date is
substantially changed from the method used to determine the Company Value as of
the immediately preceding Valuation Date, then the number of Equity Stakes and
the number of the Participant’s Units under each prior Annual Grant shall be
adjusted so that after the change (a) the ratio of the number of the
Equity Stakes covered by the Participant’s Units awarded under each prior
Annual Grant to the total number of Equity Stakes remains the same, and (b) the
total amount of Unit Appreciation (as defined below) on all the Units granted
to the Participant from before the change remains the same. The Unit
Appreciation for any Unit shall be an amount equal to the excess, if any,
of:  (a) the Equity Stake Value as
of the specified Valuation Date, over (b) the Equity Stake Value as of the
Valuation Date immediately preceding the effective date of the Annual Grant of
which the Unit is a part.

 

1.9           “Disability”
means a long term disability that qualifies the Participant to receive benefits
under the long term disability income plan maintained by Participating Company
by which he or she is employed.  In the
absence of a long term disability income plan, Disability means a mental or
physical condition that, in the opinion of the Committee, renders a Participant
unable to carry out the job responsibilities he or she held, or the tasks to
which he or she was assigned at the time the disability was incurred, and which
is expected to be permanent or last for an indefinite duration exceeding one (1) year.

 

1.10         “Employee”
means a person who is a common law employee of the Company or an Affiliated
Company; provided, however, that Employee does not include any person who is (a) a
person who is classified by the Company or any Affiliated Company as employed
on a temporary basis, regardless of how long the person actually works for the
Company or Affiliated Company; (b) a person who is classified by the
Company or any Affiliated Company as an 

 

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independent
contractor, as evidenced by its action in not withholding taxes from his or her
compensation or other action, regardless of whether the person is the Company’s
or Affiliated Company’s common law employee; (c) a person working for an
organization that provides goods or services (including without limitation
temporary employee services) to the Company or any Affiliated Company and whom
the Company or Affiliated Company does not regard to be its common law
employee, as evidenced by its action in not withholding taxes from his or her
compensation or other action, regardless of whether the person is the Company’s
or Affiliated Company’s common law employee; (d) a person who is a leased
employee within the meaning of Code Section 414(n), as amended; and (e) a
person to whom the Company or any Affiliated Company did not extend the
opportunity to participate in this Plan and who agreed orally or in writing to
nonparticipant status.

 

1.11         “Equity
Appreciation Unit” or “Unit” means the equity appreciation unit granted
under the Plan.  A Unit shall, upon
becoming nonforfeitable, entitle the holder to payment in cash of an amount
equal to the excess, if any, of: (a) the Equity Stake Value as of the
Valuation Date immediately preceding the date the Unit becomes vested, over (b) the
Equity Stake Value as of the Valuation Date immediately preceding the effective
date of the Annual Grant of which the Unit is a part.

 

1.12         “Equity
Stake” means a stake representing a portion of the Company Value as of a
Valuation Date.  The Committee shall, in
its exclusive discretion, determine the number of Equity Stakes as of any
Valuation Date (the “Equity Stake Value”). 
The number of Equity Stakes shall remain fixed unless (a) there is
a substantial change in the valuation method to determine the Company Value and
a change in the number of Equity Stakes is necessary to preserve the total
amount of Unit Appreciation (as defined in Section 1.8) on all of the
Units 

 

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granted
to the Participant, or (b) there is a change in capitalization of the
Company.  The Committee shall, in its
exclusive discretion, determine whether an adjustment because of the reasons
described in (a) or (b) is necessary or appropriate.

 

1.13         “Equity
Stake Value” means the value of an Equity Stake determined as of a
specified Valuation Date equal to (a) the Company Value as of that
Valuation Date, divided by (b) the total number of Equity Stakes as of
that Valuation Date.

 

1.14         “Grant
Agreement” means any written agreement, contract or other document that
sets forth the terms of an Annual Grant to a Participant.

 

1.15         “Maximum
Payout Amount” means an amount determined with respect to a Unit equal to
fifty (50%) percent of the Equity Stake Value determined as of the Valuation
Date immediately preceding the date that the Unit becomes vested.

 

1.16         “Participant”
means an Employee who is granted Units as part of an Annual Grant.

 

1.17         “Participating
Company” means the Company, or any Affiliated Company that the Board
authorizes to adopt the Plan and which has Employees who have received Units in
an Annual Grant.  The Board shall
determine each calendar year whether Employees of the Company and any
Affiliated Company shall receive Annual Grants for that year.

 

1.18         “Plan”
means the INO Therapeutics Long Term Incentive Plan as it may be amended from
time to time.

 

1.19         “Retirement”
means a Participant’s retirement as defined in the tax-qualified defined
benefit plan maintained by the Participating Company by which the Participant
is employed.  If no such defined benefit
plan exists then retirement means the Termination of Employment on or after the
Participant’s sixty-fifth (65th) birthday other than due to death,

 

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Disability, or Termination for Cause.

 

1.20         “Subsidiary”
means (a) any corporation that the Company owns, directly or indirectly,
fifty (50%) percent or more of the total combined voting power of all classes
of stock, and (b) any entity that the Board reasonably expects to become a
Subsidiary under clause (a).

 

1.21         “Termination
Due to Change of Control” means, within twelve (12) months after a Change
of Control (a) a Termination of Employment from the Company and all
Affiliated Companies, other than Termination for Cause, by the Company and all
Affiliated Companies, or (b) resignation from the Company and all
Affiliated Companies by an Employee for Good Reason.  For purposes of the Plan, Good Reason means
any one of the following:

 

(i)            the assignment
by the board of directors of the Company or Affiliated Company that employs the
Employee (the “Employer Board”) of duties that result in a significant adverse
change or diminution in the Employee’s authority and responsibilities;

 

(ii)           the change of
the Employee’s site of principal employment to a location more than fifty (50)
miles from the location at which the Employee was principally employed
immediately prior to the date of the Change of Control;

 

(iii)          a reduction of
the Employee’s base salary; and

 

(iv)          nonpayment of
base salary when due other than for an inadvertent and insubstantial failure
that is cured within thirty (30) days after the Employee notifies the Employer
Board in writing of the nonpayment.

 

1.22         “Termination
of Employment” means a termination of employment or Retirement with the
Company and all Participating Companies for any reason other than death or
Disability.  For Purposes of Section 1.23
(definition of Termination for Cause) a Termination of Employment shall mean a
termination of Employment with the Company and all Affiliated Companies.

 

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1.23         “Termination
for Cause” means a Termination of Employment of a Participant with the
Company or any Affiliated Company by reason of (a) that person’s material
dishonesty (including, without limitation, embezzlement, financial
misrepresentation, fraud, theft, or other similar action) in his or her
dealings with the Company or any Affiliated Company or any other entity that
the Company or any Affiliated Company is engaged in or be attempting to engage
in commerce; (b) that person’s conviction of, or entry of a plea of nolo contendere to, the commission of a felony; (c) any
act or omission by that person that actually has, and which either that person
intends to have or that person or a reasonable person would expect to have, a
material adverse effect on the Company or any Affiliated Company; or (d)if any
Participant is party to an employment agreement governing the terms of his or
her employment with the Company or any Affiliated Company, and the employment
agreement includes a definition of termination for cause, then for purposes
hereof Cause also includes those grounds not inconsistent with the foregoing
provisions of this Section 1.23.  If
the provisions of the employment agreement and this Plan are inconsistent, the
provisions of this Plan shall control.

 

1.24         “Threshold
Level” means a level of Company performance for a calendar year as
specified by the Board by the February 1st of that year.

 

1.25         “Valuation
Date” —means the December 31st of each
calendar year, or any other date determined by the Committee.

 

Article 2 - Administration

 

2.1           The Plan shall
be administered by the Board, or a committee of the Board (as the Board in its
exclusive discretion determines). The Board may delegate to the committee
described in the prior sentence or to one or more persons, the authority and
discretion to perform those functions as the Board determines.  For purposes of the Plan, the Board acting in
this 

 

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capacity
or its delegate shall be referred to as the “Committee.” Notwithstanding any
other provision of this Plan, if the Company registers any class of equity
security pursuant to Section 12 of the Exchange Act, and if the Plan is to
be administered by a committee, then such committee shall consist of two or
more members of the Board, each of whom shall each qualify as a “Non-employee
Director” within the meaning of Rule 16b-3 of the Exchange Act and also
qualify as an “outside director” within the meaning of Code Section 162(m) and
the regulations thereunder.

 

2.2           The Committee
shall have the exclusive authority and discretion to interpret the provisions
of the Plan and to decide all questions of fact arising in its application; to
determine whether and to what extent Units will be granted under the Plan; to
determine the number, terms and conditions of each Unit; to adopt, alter and
repeal such administrative rules, guidelines and practices governing the Plan
as it from time to time determines appropriate; and to make all other
determinations necessary or appropriate for the administration of the Plan.

 

2.3           The Committee
shall have the exclusive authority and discretion to vary the terms of the Plan
to the extent necessary to comply with federal, state, or local law.

 

2.4           Notwithstanding
anything in the Plan to the contrary, with respect to any Participant who is
resident outside of the United States, the Committee may, in its exclusive
discretion, amend the terms of the Plan to conform to such terms with the
requirements of local law or to meet the objectives of the Plan.  The Committee may, when appropriate,
establish one or more sub-plans for this purpose.

 

2.5           All decisions
made by the Committee pursuant to the provisions of the Plan shall be final and
binding on all Participants.

 

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2.6           All expenses
and liabilities incurred by the Committee in the administration of the Plan
shall be borne by the Company or the Participating Companies.  The Committee may employ attorneys,
consultants, accountants or other persons in the administration of the
Plan.  The Company and all Affiliated
Companies, and their officers and directors, are entitled to rely upon the
advice, opinions or valuations of any such persons.

 

Article 3 - Eligibility.

 

The Committee shall, in its exclusive discretion, determine the
Employees of the Company and Affiliated Companies who are eligible to
participate in the Plan and receive an Annual Grant in any year.  The grant of Units pursuant to an Annual
Grant in any year does not give any Employee any right to grants of Units in
future years.

 

Article 4 - Grant and Payment of Units.

 

4.1           Grant of Units.  For each calendar year in which the Company’
s performance achieves the Threshold Level, the Committee may, in its exclusive
discretion, grant to the eligible Employees in the following calendar year an
Annual Grant of Units.  The effective
date of an Annual Grant is the January 1 of the calendar year for which
the Board makes the Annual Grant.

 

4.2           Nonforfeitability
of Units.

 

(a)           Subject to
Articles 5 and 6, Section 4.2(b) and (c), and the Participant’s Grant
Agreement, a Participant must remain an Employee a Participating Company until
the fifth (5th) anniversary of the effective date of the Annual Grant of Units
(the “Vesting Date”) for these Units to become vested.  If the Participant has a Termination of
Employment for any 

 

9

 

reason
(other than due to death, Disability, or a Termination Due to a Change of
Control) prior to the Vesting Date, the Participant shall forfeit all rights to
the unvested Units.

 

(b)           Subject to a
Participant’s Grant Agreement, if, while an Employee of a Participating
Company, a Participant dies or becomes Disabled before the Vesting Date
applicable to his or her Units granted under the Annual Grant, the Participant
shall become vested in a prorated portion of these Units.  The prorated portion shall be equal to a
fraction (i) the numerator of which is the number of months (rounded up to
the nearest whole month) elapsed for the period beginning on the January 1
of the calendar year of the Annual Grant of which the Units are a part and
ending on the date of death or Disability, and (ii) the denominator of
which is sixty (60).

 

(c)           Subject to a
Participant’s Grant Agreement, if an Employee of a Participating Company
transfers to an Affiliated Company that is not a Participating Company (“Nonparticipating
Company”), before the Vesting Date applicable to his or her Units granted under
the Annual Grant, the Participant shall become vested in a prorated portion of
these Units.  The prorated portion shall
be equal to a fraction (i) the numerator of which is the number of months
(rounded up to the nearest whole month) elapsed for the period beginning on the
January 1 of the calendar year of the Annual Grant of which the Units are
a part and ending on the date of transfer to the Nonparticipating Company, and (ii) the
denominator of which is sixty (60).

 

4.3           Payment of
Units.

 

(a)           Subject to Section 4.3(b) and
the Participant’s Grant Agreement, the Participating Company that employs a
Participant on the date his or her Units become vested shall pay the
Participant in cash in a single lump sum the amount due the Participant under Section 1.9
as soon as practicable after the date that the Units become vested.

 

10

 

(b)           Notwithstanding
the foregoing, in no event shall the lump sum payment to a Participant under
paragraph (a) for any Unit exceed the Maximum Payout Amount applicable to
that Unit.  If, in accordance with the
prior sentence, a Participant’s lump sum payment is limited to the Maximum
Payout Amount, he or she shall receive the balance of the payment in three
equal annual installments of principal, together with interest thereon at the
prime rate as published in The Wall Street Journal on the date the
Participating Company makes the initial payment.  The installment payments do not reduce or
otherwise affect the determination of the Maximum Payment Amount in any
subsequent year.  No further employment
or other service is required for a Participant to receive the installment
payments.  Notwithstanding the foregoing
provisions, the payment of Units that become vested as a result of a Change to
Control shall not be subject to the Maximum Payment Amount, and all unpaid
installment payments of previously vested Units, and accrued interest thereon,
shall become immediately payable in full as a single lump sum on a Change of
Control.

 

Article 5 - Change Of Control

 

5.1           Effect of
Change of Control.  If a Change
of Control occurs and a Participant has a Termination Due to a Change of
Control before the Participant’s Vesting Date, then the Participant shall
become fully vested in all unvested Units.

 

5.2           Limits on
Payments Due to a Change of Control.  Notwithstanding any other provision of the
Plan, if a Participant would be subject to the excise tax under Code Section 4999
on the amounts payable under this Plan, and on any other amounts and benefits
received and to be received from the Company and all other entities by reason
of the provisions of Code Section 280G (the “Other 280G Amounts”), the
amounts payable under this Plan shall be reduced to an 

 

11

 

amount
one dollar less than the amount which, when combined with the Other 280G
Amounts, would subject the Participant to the excise tax under Code Section 4999.

 

Article 6 - Amendment And Termination

 

6.1           Termination and
Amendment.  The Board
in its sole discretion may terminate or amend the Plan at any time and from
time to time, including but not limited to amendments to the Plan necessary to
comply with the requirements of Section 16(b) of the Exchange Act, to
correct any defect, to reflect adjustments as a result of a Change of Control
or change in capitalization, and to supply an omission or reconcile any
inconsistency in the Plan or any Annual Grant of Units, without approval of the
shareholders of the Company, unless shareholder approval is required by Rule 16b-3
of the Exchange Act, applicable stock exchange or NASDAQ or other quotation
system rules, or applicable Code provisions. 
No amendment, termination or modification of the Plan shall affect any
Units previously granted in any material adverse way without the written
consent of the Participant.

 

Article 7 Other Provisions

 

7.1           No Right to
Continue Employment.  Nothing in
the Plan, any Grant Agreement, or any instrument shall confer upon any Employee
any right to continue to serve the Company or any Affiliated Company in the
capacity in effect at the time a Unit was granted, or shall affect the right of
the Company or any Affiliated Company to terminate the employment of an
Employee with or without notice and with or without cause.

 

7.2           Withholding.  The Participating Company’s obligation to pay
cash in payment of any Unit shall be subject to the statutory withholding
requirements under applicable foreign, federal, state, and local law.

 

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7.3           Indemnification.  No member of the Board or the Committee, nor
any officer or employee of the Company or any Affiliated Company acting on
behalf of the Board or the Committee, shall be personally liable for any
action, determination, or interpretation taken or made in good faith with
respect to the Plan, and all members of the Board or the Committee and each
officer or employee of the Company and any Affiliated Company acting on their
behalf shall, to the fullest extent permitted by law, be indemnified and
protected by the Company or Affiliated Company in respect of any such action, determination,
or interpretation.

 

7.4           Nonassignability.  No Units shall be assignable or transferable
by a Participant.  No payment with
respect to a vested Unit shall be assignable or transferable by a Participant
except by will, the laws of descent and distribution, and such other means as
the Committee approves from time to time.

 

7.5           Severability.  With respect to Participants subject to Section 16
of the Exchange Act, (a) the Plan is intended to comply with all
applicable conditions of Rule 16b-3 or its successors, (b) all
transactions involving Participants who are subject to Section 16(b) of
the Exchange Act are subject to such conditions, regardless of whether the
conditions are expressly set forth in the Plan, and (c) any provision of
the Plan that is contrary to a condition of Rule 16b-3 shall not apply to
Participants who are subject to Section 16(b) of the Exchange
Act.  If any of the provisions of this
Plan, or grants of Units, conflict with the requirements of Code Section 162(m) with
respect to Units governed by Code Section 162(m), then such terms or
provisions shall be inoperative to the extent they conflict with the
requirements of Code Section 162(m).

 

7.6           Other Plans.  Any Units and payments therefor shall not be
used in determining the benefits provided under any other benefit or incentive
plan of the Company or any Affiliated Company unless specifically provided by
that other plan or other agreement.

 

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7.7           Governing Law.  The Plan and all agreements executed pursuant
to the Plan shall be governed by, and construed in accordance with, the laws of
the State of Delaware, without regard to its conflicts of law principles.

 

7.8           Gender and
Number.  Words denoting the masculine
gender shall include the feminine gender, and words denoting the feminine
gender shall include the masculine gender.

 

Words in the plural shall include the singular, and
the singular shall include the plural.

 

7.9           Acceleration of
Vesting.  The Committee may accelerate
the time at which a Unit will become nonforfeitable, notwithstanding the
provisions in the Plan.

 

7.10         No Rights of a
Shareholder.  No
Participant shall have rights of a shareholder with respect to any Units.

 

7.11         Unfunded Plan.  The Plan is unfunded.  The Company and all other Participating
Companies shall not segregate any of its assets for payment of Units, and no
Participant has any right, title, or interest in any asset of the Company and
Affiliated Company.  Participants have
only the rights of general unsecured creditors for the payment of Units.

 

7.12         Successors.  This Plan is binding on and shall inure to
the benefit of any successor to a Participating Company, whether by way of
merger, consolidation, purchase, or otherwise.

 

7.13         Headings.  The headings and captions used in the Plan
are for convenience only, are not a part of the Plan, and shall not
characterize, limit, or affect in any way the Plan’s provisions.

 

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IN WITNESS WHEREOF, the INO Therapeutics Long Term Incentive Plan, by
the authority of the Board of Directors of AGA Healthcare, is executed as of
the          day of June, 2002.

 

	
   

  	
  AGA HEALTHCARE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
  Attest

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Secretary

  	
   

  
	
  [Corporate Seal]

  	
   

  
				

 

15

 

Amendments to the INO Therapeutics Long Term Incentive Plan

 

Effective January 1, 2008, the INO Therapeutics Long Term Incentive
Plan is hereby amended as follows:

 

Section 1.5 is amended and restated in
its entirety as follows:

 

1.5           “Change of Control” means a
change in ownership or control of the Company or a Related Parent effected
through any one or more of the following:

 

(i)            any one person or entity, or more
than one person or entity acting as a group, acquires ownership of stock of a
corporation that, together with stock previously held by the acquiror,
constitutes more than fifty percent (50%) of the total voting power of the
corporation’s stock.  If any one person
or entity, or more than one person or entity acting as a group, is considered
to own more than fifty percent (50%) of the total voting power of the
corporation’s stock, the acquisition of additional stock by the same person or
entity or persons or entities acting as a group does not cause a change in
ownership.  An increase in the percentage
of stock owned by any one person or entity, or persons or entities acting as a
group, as a result of a transaction in which the corporation acquires its stock
in exchange for property, is treated as an acquisition of stock;

 

(ii)           any one person or entity, or more
than one person or entity acting as a group, acquires (or has acquired during
the twelve (12) month period ending on the date of the most recent acquisition
by that person or entity or persons or entities acting as a group) ownership of
a corporation’s stock possessing at least thirty-five percent (35%) of the
total voting power of the stock; or

 

(iii)          any one person or entity, or more than
one person or entity acting as a group, acquires (or has acquired during the
twelve (12) month period ending on the date of the most recent acquisition by
that person or entity or persons or entities acting as a group) assets from a
corporation that have a total gross fair market value equal to at least forty
percent (40%) of the total gross fair market value of all the corporation’s
assets immediately prior to the acquisition or acquisitions.  Gross fair market value means the value of
the corporation’s assets, or the value of the assets being disposed of, without
regard to any liabilities associated with these assets.

 

(iv)          In determining whether a Change of
Control occurs, the attribution rules of Section 318 of the Code
apply to determine stock ownership.  The
stock underlying a vested option is treated as owned by the individual who
holds the vested option, and the stock underlying an unvested option is not
treated as owned by the individual who holds the unvested option.

 

(v)           Rules similar to the foregoing
provisions apply for determining whether a Change of Control of a noncorporate
entity has occurred.

 

 

(vi)          “Related Parent” means any corporation
or other entity in an unbroken chain of corporations or other entities in which
the Company is a member and in which each corporation or other entity owns more
than fifty percent (50%) of the total fair market value and total voting power
in one of the other corporations or entities in the chain.

 

The
foregoing definition shall be interpreted and implemented in a manner
consistent with Section 409A of the Code and the final regulations and
other interpretive authority issued thereunder, it being the intention of the
Company that a “Change of Control” for purposes of the Plan shall have the same
meaning as under Section 409A of the Code;

 

Section 1.9 is amended and restated in
its entirety as follows:

 

1.9           “Disability” means that a
Participant is (a) unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment that can be
expected to result in death or last for a continuous period of at least twelve
(12) months, or (b) by reason of any medically determinable physical or
mental impairment that can be expected to result in death or last for a
continuous period of at least twelve (12) months, receiving income replacement
benefits for at least three (3) months under an accident and health plan
covering the Company’s or any Affiliated Company’s employees;

 

Section 1.20 is amended and restated in
its entirety as follows:

 

1.20         “Subsidiary” means any
corporation in which the Company owns, directly or indirectly, fifty percent
(50%) or more of the total combined voting power of all classes of stock;

 

Section 4.3(a) is amended and
restated in its entirety as follows:

 

(a)           Subject to Section 4.3(b) (if
then in effect) and the Participant’s Grant Agreement, the Participating
Company that employs a Participant on the date his or her Units vest shall pay
the Participant in cash in a single lump sum the amount due the Participant
under Section 1.8 within ninety (90) days after the date that the Units
vest;

 

The Long Term Incentive Plan is amended to
insert a new Section 7.14 as follows:

 

7.14         Fixed Unit Alternative.  Notwithstanding any provision of the Plan to
the contrary, the Company shall be permitted, on such terms and conditions as
the Company shall deem appropriate in its sole discretion, to offer each
Participant the opportunity to elect an alternative crediting method (the “Fixed
Unit Alternative”) with respect to such Participant’s Units consisting of (a) the
value of all Units previously granted to such Participant being frozen as of September 30,
2007 at $9.62 per Unit (each such Unit, a “Frozen Unit”), (b) as to
each Frozen Unit, the accrual of interest on the amount equal to the excess of
$9.62 over the “baseline” value of such Frozen Unit at the rate of 7% per annum,
compounded 

 

 

annually
from October 1, 2007 to the date of payment (less applicable withholding
taxes), and (c) the Maximum Payout Amount no longer applying to payments
made with respect to Frozen Units.  The
Units held by any Participant who elects the Fixed Unit Alternative shall be
deemed modified to the extent (but only to the extent) provided in the election
form and any related materials provided to the Participant with respect to the
Fixed Unit Alternative, and any such election form and related materials shall
be deemed incorporated into the Plan with respect to such Frozen Units.Exhibit 10.31

 

Confidential
Materials omitted and filed separately with the

Securities and
Exchange Commission.  Asterisks denote
omissions.

 

Logistics
Services Agreement

 

This Logistics Services Agreement is made this 31st
day of March, 2004, by and between AGA Linde HealthCare, Institutional
Division, a corporation, with a usual place of business at 420 Calaf Street,
Hato Rey, Puerto Rico 00919 (“ALH”) and INO Therapeutics, LLC, a Delaware
corporation with a usual place of business at 6 Route 173, Clinton, New Jersey
08809 (“INO-T”) (“Med One” and “INO-T”, sometimes each a “Party” or
collectively, the “Parties”).

 

RECITALS

 

WHEREAS, INO-T is a biopharmaceutical company
developing nitric oxide by inhalation as a proprietary pharmaceutical therapy (“Therapy”)
and is the exclusive licensee or owner of certain patents pertaining to the use
of nitric oxide by inhalation, as well as certain patents pertaining to the
delivery and monitoring of nitric oxide by inhalation; and

 

WHEREAS, ALH has a Facility located in Hato Rey,
Puerto Rico (the “Facility”) which, inter alia, ALH provides
equipment, repair, maintenance and logistics services (“Logistics Services”) to
health care facilities; and

 

WHEREAS, ALH and INO-T have agreed that ALH shall
provide to INO-T certain equipment maintenance on delivery devices (“Delivery
Devices”) used in connection with the Therapy, and logistics services, as more
particularly described in Exhibit A attached hereto and upon the terms and
conditions set forth herein.

 

NOW THEREFORE, in consideration of the mutual
covenants and promises set forth herein, ALH and INO-T hereby agree as follows:

 

1.               Term

 

The initial term (“Term”) of this Agreement shall be
for a period of three (3) years commencing on April 1, 2004.  This Agreement shall automatically renew for
additional terms of [one (1)] year
unless either Party provides to the other written notice of its intent to
terminate at least six (6) months prior to the then scheduled termination
date.

 

 

2.               Scope of Agreement: Logistics Services

 

In the commonwealth of Puerto Rico ALH shall provide
to INO-T certain equipment maintenance and service on Delivery Devices, and
logistics services including, but not limited to, the provision of manpower and
services for safely and securely receiving, handling, storing and transporting
INOmax® drug product, Delivery Devices INOcal calibration gas, and disposable
adaptors from the Facility as well as certain administrative services
including, but not limited to, warehousing, shipment and pick-up coordination,
order processing, back-up customer service, data processing and related data
warehousing and data management functions all as more particularly described in
Exhibit A attached hereto as such may be amended in writing from time to
time by the mutual agreement of the Parties (the “Services”).  All references to Exhibit A shall
include any subsequent amendments.

 

3.               Hours of Operation

 

(a)           ALH will provide the necessary labor and Services
contemplated herein within the times specified in Exhibit A attached
hereto as such may be amended in writing, from time to time, by the mutual
agreement of the Parties.

 

(b)           ALH shall operate and maintain a 24 hour / 7 day call
center to receive orders from INO-T.

 

4.               Duties and Responsibilities of INO-T Concerning Logistics
Services

 

Throughout the term hereof, INO-T shall have the
following duties and responsibilities:

 

(a)           Deliver to the Facility such cylinder quantities of
INOmax® drug product, Delivery Devices, INOcal® calibration gas, NO test gas,
and disposable adaptors, as it shall require ALH to deliver to INO-T customers
hereunder;

 

(b)           Track or otherwise determine, in accordance with FDA
Regulations, the movement of INOmax® cylinders, Delivery Devices, the INOcal®
calibration gas, NO test gas, and disposable adaptors to the Facility;

 

(c)           Receive delivery requests from INO-T customers (the “Customers”)
and promptly transmit same to ALH’s 24 hour/7 day call center in Puerto Rico;

 

(d)           Negotiate with INO-T Customers to determine an adequate
contingency stock of INOmax® drug product, Delivery Devices, the INOcal®
calibration gas, NO test gas and disposable adaptors for such Customers and,
thereafter, require ALH to deliver and periodically inventory such contingency
stock, so that in the event a Force Majeure Event (as defined herein) prevents
ALH from being able to promptly deliver drug product, Delivery Devices, INOcal
calibration gas, NO test gas, and disposable adaptors, a Customer will
nevertheless be able to initiate treatment; (provided, however, that this provision
shall not be construed to excuse ALH’s non-performance in the event of such
Force Majeure Event);

 

2

 

(e)           Furnish to ALH information within INO-T’s possession
regarding INOmax® drug product, Delivery Devices, INOcal calibration gas, NO
test gas, and disposable adaptors demand requirements in various geographic
locales reasonably necessary for ALH to perform the Services hereunder;

 

(f)            Provide current Material Safety Data (“MSD”) sheets to
ALH for INOmax® and INOcal calibration gas and current information concerning
the storage, handling and other characteristics of INOmax® and Delivery
Devices, the INOcal calibration gas, NO test gas, and disposable adaptors, as
such information becomes available;

 

(g)           Use its good faith efforts throughout the term of this
Agreement to insure that INOmax® drug product, Delivery Devices, INOcal
calibration gas, NO test gas and disposable adaptors are delivered to INO-T
Customers in a prompt and safe manner and as specifically provided in Exhibit A
irrespective of any nonperformance or breach of this Agreement by ALH.  ALH shall provide reasonable support to INO-T
in order to facilitate compliance by INO-T with its obligations hereunder.

 

5.               Duties and Responsibilities of ALH Concerning
Logistics Services

 

Throughout the term hereof ALH shall have the
following duties and responsibilities concerning the provision of Logistics
Services which shall be performed by ALH at its sole cost and expense unless
otherwise specifically provided:

 

(a)           Receive INOmax® drug product, Delivery Devices, INOcal®
calibration gas, NO test gas, and disposable adaptors delivery requests from
INO-T and promptly deliver INOmax® drug product, Delivery Devices, INOcal®
calibration gas, NO test gas and disposable adaptors (as applicable) to the
INO-T Customer within the time frame, and in accordance with the format
mutually agreed between both Parties and set out in Exhibit A attached
hereto.  Notwithstanding the foregoing,
ALH shall not be required to deliver INOmax® drug product, Delivery Devices,
INOcal® calibration gas, NO test gas, NO test gas and disposable adaptors (as
applicable) to any INO-T Customer where such delivery is in connection with an
INO-T-sponsored clinical trial;

 

(b)           Promptly and accurately transmit to INO-T such information
as the Parties shall mutually agree with respect to each delivery and pick-up
of INOmax® drug product, Delivery Devices, INOcal® calibration gas, NO test
gas, and disposable adaptors (as applicable) from an INO-T Customer location
and with respect to damaged or lost INOmax® drug product, Delivery Devices, the
INOcal® calibration gas, and disposable adaptors, accessories and equipment;

 

(c)           Transport, receive, store and track all cylinders of
INOmax® in a manner that complies with all applicable federal, state and local
laws, rules and regulations; including but not limited to the Occupational
Safety & Health Administration, Department of Transportation, United
States Food and Drug Administration (“FDA”) and International Air Transport
Association.  ALH will notify INO-T of
any deficiency, fine or penalty resulting from a failure to comply with all
applicable federal, state and local laws, rules and regulations;
immediately after receiving such notice. 
Any fine or penalty assessed as a result of failing to comply shall be
borne by ALH;

 

3

 

(d)           Insure that all ALH employees responsible for the storage
and handling of INOmax® drug product, Delivery Devices, INOcal® calibration
gas, NO test gas and disposable adaptors are provided the most current MSD
sheet for INOmax® and INOcal calibration gas that has been provided to ALH by
INO-T, and are trained on the proper storage, handling and other
characteristics of INOmax® or other compressed gas cylinders cylinders;

 

(e)           Apply for and obtain the state licenses and resources
legally necessary to distribute pharmaceuticals under applicable laws in the
commonwealth of Puerto Rico; including but not limited to having a registered pharmacist
on site for the dispensing of INOmax® to hospitals.  Any fines or penalties assessed as a result
of failing to comply shall be borne by ALH. 
With respect to renewal of such licenses, renewals shall be submitted
[**] days prior to the expiration thereof with all applicable fees;

 

(f)            Register with CHEMTREC, or such similar agency,
responsible for providing 24-hour/7-day emergency communications services for
hazardous materials.  Any fines or
penalties assessed as a result of failing to comply shall be borne by ALH;

 

(g)           Ship to INO-T’s manufacturing plant in Port Allen, LA, all
used INOmax® cylinders, NO test gas or those cylinders deemed not reusable as
agreed by the Parties, using a carrier designated and paid for by INO-T;

 

(h)           Develop and maintain Standard Operating Procedures, that
shall be approved by INO-T and specifically set forth in Exhibit A, with
respect to all of the Services provided by ALH hereunder;

 

(i)            Clean, calibrate, and maintain such INOtherapyTM delivery
systems (including, but not limited to the Delivery Devices) as the Parties
shall mutually agree, in conformity with the manufacturer’s standards, to
ensure the Delivery Devices, at all times hereunder, are in proper working
condition;

 

(j)            Exercise due and diligent care in discharging its
obligations hereunder, including, but not limited to subparagraph (i) above
and with respect to the storage and transportation of the INOmax® drug product,
Delivery Devices, INOcal® calibration gas, NO test gas, and disposable
adaptors.  To the extent any INOmax® drug
product, Delivery Devices, INOcal® calibration gas, NO test gas, and disposable
adaptors is damaged or destroyed by ALH (or its employees, agents or anyone
else under its control), ALH shall be liable for the cost of repairing or
replacing, as the case may be, such INOmax® drug product, Delivery Devices,
INOcal® calibration gas, NO test gas, and disposable adaptors.

 

(k)           Adhere to the Process Flows and Standard Operating
Procedures that have been agreed upon by both Parties specified in Exhibit A;

 

4

 

(l)            Use its good faith efforts throughout the term of this
Agreement to insure that INOmax® drug product, Delivery Devices, INOcal
calibration gas, NO test gas, and disposable adaptors are delivered to INO-T
Customers in a prompt and safe manner, and as specifically provided in Exhibit A
irrespective of any nonperformance or breach of this Agreement by INO-T.  INO-T shall provide reasonable support to ALH
in order to facilitate compliance by ALH with its obligations hereunder.

 

(m)          Notify INO-T immediately upon having actual knowledge,
whether from personal observations and/or observations of third Parties, that
Customers are using nitric oxide gas from a source other than INO-T.

 

6.               Parties’ Rights and Duties Concerning Delivery Devices
and INOtherapyTM.

 

(a)           The cost of all accessories parts and disposable items
used in connection with the Delivery Devices shall be borne by INO-T.  ALH shall provide INO-T with written service
reports detailing all service work that has been performed on Delivery
Devices.  ALH shall submit to INO-T’s
Senior Service Technician, located at its Woodridge , IL Service Center, all
service reports on a bi-weekly basis;

 

(b)           ALH will notify INO-T immediately if a Customer has caused
damage to any Delivery Device for reasons other than normal wear and tear,
INO-T shall bear both the labor and the parts costs associated with the
requisite repairs.

 

(c)           INO-T at all times, retains title to and owns each and
every Delivery Device, notwithstanding delivery of same to ALH under the terms
hereof.  Neither title to nor ownership
of any Delivery Devices, or any other component of INOtherapy, that INO-T ships
to ALH pursuant to this Agreement shall pass to ALH;

 

(d)           ALH shall not make any use whatsoever of the Delivery
Devices, or any other component of INOtherapy, delivered to it by INO-T except
in the manner and for the purposes set forth in this Agreement;

 

(e)           ALH shall not, in any way, attempt or purport to sell,
lease convey, pledge or grant any Party a security interest in any Delivery
Devices or INOtherapyTM that INO-T will deliver to ALH in the future pursuant to
this Agreement, nor shall ALH represent to any Party in any way or for any
reason that it owns or has title to any INOtherapyTM or to any of the Delivery
Devices that INO-T has delivered to ALH;

 

(f)            Within [**] days of the earlier of the date of the
expiration of the Term of this Agreement pursuant to paragraph 1 above or the
date of its termination pursuant to paragraph 9 below, ALH shall return to
INO-T any and all: (i) Delivery Devices, (ii) INOmax®, (iii) NO
test gas, (iv) INOcal®, and (v) any parts, accessories or unused
disposable items used in connection with the Delivery Devices that have been
delivered to it by INO-T and that remain in its possession, custody or control.

 

7.               Exclusive Relationship

 

5

 

(a)           Throughout the term of this Agreement, INO-T and any of
its subsidiaries, parent company or affiliates may not enter into a contract,
agreement or other arrangement (whether written or oral, formal or informal)
with any other person or entity that, in substance, creates the same kind of
contractual relationship as contained herein regarding the provision of
services that are the same or substantially similar as the Services provided
for INOmax® drug product, Delivery Devices, INOcal® calibration gas, NO test
gas, and disposable adaptors within the commonwealth of Puerto Rico.  If INO-T has a good faith, reasonable belief
that ALH, its successor or affiliates, intends to (A) discontinue or
otherwise materially alter the type, manner or method of delivery of Logistics
Services or (B) provide services that are competitive with INO-T’s, INO-T
can terminate this Agreement.

 

(b)           Throughout the term of this Agreement, ALH covenants that
neither ALH nor any of its subsidiaries, parent company or affiliates will
enter into a contract, agreement or other arrangement (whether written or oral,
formal or informal) with any other person or entity that, in substance, creates
the same kind of contractual relationship as contained herein regarding the
provision of Services that are the same or substantially similar as the
Services hereunder for products that are the same or substantially similar to
INOmax® drug product, Delivery Devices, INOcal calibration gas, NO test gas and
disposable adaptors within the commonwealth of Puerto Rico.

 

8.               Compensation

 

(a)           INO-T shall pay to ALH a monthly fee of [**] Dollars
during the term of this Agreement.  ALH
shall invoice INO-T at the beginning of every month.  The Compensation for Services rendered with
be reviewed by both parties at six month intervals during the term of the
agreement.

 

9.               Termination

 

(a)           Either Party shall have the right to terminate this
Agreement by providing written notice to the non-terminating Party if:

 

(i)  The other Party
fails to pay any amounts hereunder, and such failure continues for a period of
twenty (20) days or more after written notice of same;

 

(ii)  There is a
material violation by the other Party of any provision of this Agreement (other
than the non-payment of monies and the failure to agree on the adjustment of
ALH’s compensation hereunder) including, but not limited to ALH’s failure to
comply with subparagraphs (c), (d), (e), (f), (h), (i), (j), (k), (l), and (m) of
Section 5, which violation or failure to comply continues uncured for a
period of thirty (30) after written notice to the other Party specifying such
violation;

 

(iii)  In the event the
other Party shall cease to function as a going concern or cease to conduct its
operations in the normal course of business;

 

6

 

(iv)  Subject to the
provisions of the United States Bankruptcy Code, the other Party shall become
insolvent or cease to pay its debts as they mature or commence a voluntary
proceeding (or consent to the commencement of an involuntary proceeding) under
any bankruptcy or similar law or seek or consent to the appointment of a
trustee, receiver or similar official of it or a substantial part of its
property or fail to have dismissed or stayed within sixty (60) days an
involuntary proceeding under such law or a proceeding for the appointment of such
a trustee, receiver or similar official.

 

(v)  The other Party
shall have made any misrepresentation as to a material fact in connection with
this Agreement or the transactions contemplated hereby, including, but not
limited to, any statement, or omission thereof, made by or provided by any
Party hereto relating to the financial condition of such Party.

 

(vi)  Any court or
governmental or regulatory authority of competent jurisdiction shall enter an
order or take substantial steps to cause an order to be entered restraining or
prohibiting any of the transactions contemplated hereby;

 

(vii)  A Party shall be
unable to perform one or more of its material duties or responsibilities
hereunder for a period of ninety (90) days or more as a result of a Force Majeure
Event;

 

(b)           INO-T may terminate this Agreement:

 

(i)  Upon five (5) business
days prior written notice to ALH, if ALH fails to make five (5) deliveries
within six (6) hours during any consecutive twelve (12) month period.

 

(c)           Any termination of this Agreement shall not affect any
obligations which accrued prior to the effective date of such termination.

 

(d)           The Parties hereby acknowledge that the services provided
hereunder are necessary for the well being of individuals served by the INOmax®
drug product, Delivery Devices, INOcal® calibration gas, and disposable
adaptors and therefore, notwithstanding notice of termination, ALH and INO-T
shall continue to fulfill their respective duties and obligations hereunder to
the fullest extent for a period not to exceed [**] months after the effective
date of such termination, or for such other period as the Parties shall
mutually agree in writing.

 

(e)           ALH agrees that, at least [**], it shall provide INO-T
with a mutually agreeable performance status report summarizing logistics
services events, including, but not limited to those which may, in any way,
adversely affect ALH’s ability to fully perform any of its duties, obligations
or responsibilities hereunder.

 

10.         Access to Information; Right of Audit

 

7

 

(a)           If this Agreement is subject to Section 1861(v)(1)(I) of
the Social Security Act as amended, ALH agrees that until the expiration of
four (4) years after the furnishing of any services hereunder, ALH shall,
upon request, make available to the Secretary of Health and Human Services, the
Comptroller General, and other duly authorized representatives, the Agreement
and all books, documents and records that are necessary to verify the nature
and extent of the cost of those services, and that if ALH carries out the
duties of the Agreement through a subcontract for $10,000 or more over a twelve
(12) month period, such subcontract shall also contain an access clause to
permit access by the Secretary, Comptroller General, and other duly authorized
representatives to the related organization’s subcontract and related books,
documents and records.  ALH agrees that
within [**] business days of any request (whether written or oral) from any
regulatory agency or licensure body (or such body’s designee) including, but
not limited to, the Internal Revenue Service, the Health Care Financing
Administration (“HCFA”) or the Office of the Inspector General of the United
States, relating to the cost, nature, or extent of the services provided
hereunder or the relationship between the Parties, ALH shall notify INO-T of
the same and shall, to the extent permissible under law, allow INO-T to
participate in any discussions between ALH and such regulatory agency or
licensure body.

 

(b)           Upon reasonable prior notice of no less than [**] business
days, INO-T shall be entitled to audit, during regular business hours, ALH’s
facility and operations as they relate to the activities contemplated by this
Agreement.

 

11.         Insurance

 

(a)           INO-T shall obtain and maintain a commercial general
liability insurance policy that, in the aggregate, shall provide coverage, of
not less than One Million Dollars ($1,000,000) per occurrence and One Million
Dollars ($1,000,000) aggregate.  The
policy shall be issued by an insurance company with a minimum Best’s rating of
A-X11 or an equivalent rating from a nationally recognized credit rating
agency.

 

(b)           INO-T shall cause ALH to be an additional named insured
with respect to the coverage described in Section 11(a) above.  INO-T shall furnish to ALH a certificate or
other adequate proof of the foregoing insurance.  Any such certification furnished by INO-T
shall state that ALH shall be notified in writing at least thirty (30) calendar
days prior to cancellation of, or any material change in, the insurance
coverage.

 

(c)           ALH shall obtain and maintain, during the term of this
Agreement, at its own cost and expense, with insurers reasonably acceptable to
INO-T, all insurance and or bonds required by law including, but not limited
to: worker’s compensation insurance in the form and amount prescribed by the
law of the commonwealth of Puerto Rico; comprehensive general liability
insurance with a Broad Form endorsement which includes, but is not limited
to, coverage for (i) products liability; (ii) personal injury with
limits of not less than Three Million Dollars ($3,000,000) per person for each
occurrence; (iii) property damage with limits of not less than One Million
Dollars (1,000,000); (iv) completed operations and contractual liability,
with respect to the liabilities assumed by ALH hereunder, and with limits of
not less than Three Million

 

8

 

Dollars ($1,000,000.00) per occurrence and One Million
Dollars ($1,000,000.00) in the aggregate; and (v) comprehensive automobile
liability insurance covering the use and maintenance by Med One of owned,
not-owned, hired and rented vehicles, with limits of at least One Million
Dollars ($1,000,000.00) combined single limit coverage for each occurrence.

 

(d)           ALH shall cause INO-T to be an additional named insured
with respect to the coverage described in Section 11(c) above.  ALH shall furnish to INO-T, a certificate or
other adequate proof of the foregoing insurance.  Any such certification furnished by ALH shall
state that INO-T shall be notified in writing at least thirty (30) calendar
days prior to cancellation of, or any material change in, the insurance
coverage.

 

12.         Indemnification

 

(a)           INO-T hereby agrees to indemnify, defend and hold harmless
ALH, its officers, directors, employees, subsidiaries and parent company from
any and all claims, suits, damages or liabilities, including but not limited to
reasonable attorneys’ fees and costs, arising out of: (i) any claim that
the INOmax® drug product, INOcal calibration gas, and disposable adaptors
distributed by INO-T under this Agreement infringes upon the patents or other
intellectual property rights of any other person or entity; (ii) any
claims that the INOmax® drug product, Delivery Devices, INOcal® calibration
gas, NO test gas, and disposable adaptors distributed by INO-T under this
Agreement violates any federal, state or local laws, rules or regulations,
including but not limited to rules and regulations promulgated by the FDA;
(iii) any recall of the INOmax® drug product, Delivery Devices, INOcal
calibration gas, NO test gas and disposable adaptors; (iv) any death or
injury caused by any other drug distributed by INO-T under this Agreement; or (v) any
breach by INO-T in the performance of its duties and responsibilities under
this Agreement, provided, however that such indemnification shall not apply to
the extent any of the events set forth in (i)-(iv) above are the result of
or caused by (directly or indirectly) the negligent, reckless or willful acts
or omissions of ALH.

 

(b)           ALH hereby agrees to indemnify, defend and hold harmless
INO-T from any and all claims, liabilities or damages, arising out of (i) any
breach by ALH in the performance of its duties and responsibilities under this
Agreement including, but not limited to ALH’s failure to comply with Sections
5(c), 5(d), 5(e) and 5(f) hereunder, (ii) the negligent,
reckless or willful misconduct of ALH in the performance of its duties and
responsibilities hereunder, (iii) any death or injury caused by ALH’s
breach of this Agreement or ALH’s performance or non-performance hereunder, or (iv) any
of the events set forth in (i) — (iii) above caused by any
subcontractor of ALH hereunder, provided, however that such indemnification
shall not apply to the extent any of the events set forth in (i)-(iii) above
are the result of or caused by (directly or indirectly) the negligent, reckless
or willful acts or omissions of INO-T.

 

13.         Limitation of Liability

 

(a)           ALH shall not be liable, under any circumstance or legal
theory whatsoever, for any loss of business, revenue, profits, goodwill,
interruption of business or for any indirect, special, incidental or
consequential damages of any character. 
In no event shall ALH be liable

 

9

 

for damages in an amount in excess of the amount paid
by INO-T to ALH pursuant to this Agreement. 
This limitation of liability provision, however, shall not apply to any
damages that are the sole result of or directly caused by the negligent,
reckless or willful acts or omissions of ALH or as a result of events or
circumstances affecting ALH’s performance hereunder whether or not disclosed
pursuant to section 9(e) hereof.

 

(b)           INO-T shall not be liable, under any circumstance or legal
theory whatsoever, for any loss of business, revenue, profits, goodwill,
interruption of business or for any indirect, special, incidental or
consequential damages of any character. 
In no event shall INO-T be liable for damages in an amount in excess of
the amount paid by INO-T to ALH pursuant to this Agreement.  This limitation of liability provision,
however, shall not apply to any damages that are the sole result of or directly
caused by the negligent, reckless or willful acts or omissions of INO-T.

 

14.         Relationship of the Parties

 

ALH is an independent contractor and nothing in this
Agreement shall be deemed or construed to create any agency relationship
between the Parties.  Neither INO-T nor
ALH, nor any of their employees, shall be construed to be the agents,
employers, representatives or servants of the other.

 

15.         Notices

 

All notices required to be given by one Party to the
other shall be sent by registered mail, return receipt requested, or overnight
delivery service addressed as follows:

 

If to ALH:                                                                                     AG A Linde Healthcare

Institutional Division

420 Calaf Street

Hato Rey

Puerto Rico  00919

Attn: Mr. Guillermo Witte

Title: Institutional Division Director

 

If to INO-T:                                                                             INO Therapeutics, Inc.

6 Route 173

Clinton, New Jersey 08809

Attn: Mr. Todd L. Dixon

Title: Vice President, Global Operations

 

All such notices and communications shall be effective
upon receipt.

 

16.         Non-Assignability

 

10

 

This Agreement may not be assigned by either Party
without the prior written consent of the other Party, which consent shall not
be unreasonably withheld, conditioned or delayed.  Notwithstanding the foregoing, either Party
may assign this Agreement, without the prior consent of the other, to any
subsidiary or parent of the assigning Party.

 

17.         Subcontracting

 

ALH may not subcontract any portion of the Services to
be performed under this agreement without the prior written consent of INO-T,
which consent shall not be unreasonably withheld, conditioned or delayed.  Notwithstanding the foregoing, in the event
that AHL does subcontract any Services hereunder, ALH shall nevertheless remain
primarily responsible and liable to INO-T for the performance of all of its
duties, obligations and responsibilities under this Agreement.

 

18.         Governing Law

 

This Agreement shall be governed in all respects by
the laws of the State of New Jersey in which it has been executed and in which
it has a situs.

 

19.         Legal Fees

 

In the event there is a default by either Party
hereto, and the other Party initiates litigation or undertakes other legal
proceedings to enforce this Agreement, the prevailing Party shall be entitled
to recover its costs and reasonable attorneys’ fees incurred in connection
therewith.

 

20.         Force Majeure

 

If a Party’s obligation to perform any duty hereunder
is rendered impossible of performance or observance due to an event caused by
the elements, an act of God, war, civil disturbance, fire or other casualty, strike
or other labor dispute, and/or governmental rule (collectively, a “Force
Majeure Event”), then said Party, for up to one hundred eighty (180) days, and
subject to paragraph 9 shall be excused from such performance or observance;
provided, however, that the Party so prevented from complying herewith shall
not have caused such Force Majeure Event, shall have used reasonable diligence
to avoid such Force Majeure Event or mitigate its effects, and shall continue
to take all actions within its power to comply as fully as possible with the
terms of this Agreement.  Except where
the nature of the Force Majeure Event shall prevent it from doing so, the Party
affected by such Force Majeure shall notify the other Party in writing as
promptly as practicable and in any event within five (5) business days
after the occurrence of such Force Majeure Event and shall in every instance,
to the extent reasonable and lawful under the circumstances, use its best
efforts to remove or remedy such Force Majeure Event with all reasonable
dispatch.

 

21.         Entire Agreement

 

This Agreement constitutes the entire agreement
between the Parties hereto pertaining to the subject matter hereof and
supersedes all prior and contemporaneous agreements,

 

11

 

understandings, negotiations and discussions, oral or
written.  There are no other agreements
between the Parties in connection with the subject matter hereof except as
specifically set forth herein.  No
supplement to or modification, waiver or termination of this Agreement shall be
binding unless executed in writing by the Party to be bound thereby.  In the event any provision of this Agreement
shall be held invalid, such provision shall be deleted from the Agreement,
which shall then be construed to give effect to the remaining provisions
thereof.

 

22.         Headings

 

The headings or titles of the various paragraphs of
this Agreement are inserted merely for the purpose of convenience and do not
expressly or by implication or intention, limit, define, extend or affect the
meaning or interpretation of this Agreement or the specific terms or text of
the paragraph so designated.

 

23.         Counterparts

 

This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but such counterparts
together shall constitute but one and the same instrument.

 

12

 

In witness whereof, this Agreement has been executed
by the duly authorized officers of the above-referenced Parties on the date set
forth above.

 

	
  AGA
  Linde Healthcare

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Guillermo Witte

  	
   

  	
   

  
	
   

  	
  Guillermo Witte

  	
   

  	
   

  
	
   

  	
  its duly authorized
  Institutional Division Director

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  INO
  Therapeutics, Inc.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Todd L. Dixon

  	
   

  	
   

  
	
   

  	
  Todd L. Dixon

  	
   

  	
   

  
	
   

  	
  Vice President, Global Operations

  	
   

  	
   

  

 

13

 

Exhibit A

 

ALH shall provide certain equipment, repair,
maintenance on Delivery Devices, and logistics services including, but not
limited to, the provision of manpower and services for safely and securely
receiving, handling, storing and transporting INOmax® drug product, Delivery
Devices, INOcal calibration gas, NO test gas and disposable adaptors, from ALH’s
Facility as well as certain administrative services including, but not limited
to, warehousing, shipment and pick-up coordination, order processing, asset
tracking, back-up customer service, data processing and related data
warehousing and data management functions. 
All Services shall be conducted in full compliance with FDA regulations
as same may be set forth in applicable Codes of Federal Regulations.  Services shall be defined in process flows
and standard operating procedures (listed below).  These Services may be modified from time to
time by the mutual agreement of the Parties to comply with FDA Regulations and
meet the ongoing needs of the customer.

 

Services
as defined in Process Flows:

1.               Receiving INOmax® drug product, Delivery
Devices, INOcal® calibration gas, NO test gas, and disposable adaptors at the
Facility.

2.               Transporting INOmax® drug product,
Delivery Devices, INOcal® calibration gas, NO test gas, and disposable adaptors
from the Facility.

3.               Storage and Handling of INOmax® drug
product, Delivery Devices, INOcal® calibration gas, NO test gas, and disposable
adaptors at the Facility.

4.               Delivery and Pick-up of INOmax® drug
product, Delivery Devices, INOcal® calibration gas, NO test gas, and disposable
adaptors to and from the customer.

5.               Inventory management of cylinders of
INOmax® drug product, Delivery Devices, INOcal® calibration gas, NO test gas,
and disposable adaptors.

6.               Operate and maintain 24 hour/7 day Call
Center capabilities to receive Orders from INO-T.

Services
as defined in Standard Operation Procedures:

1.               Complaint Procedure (reporting INOmax® drug product,
Delivery Devices, INOcal calibration gas, and disposable adaptors complaints to
INO-T).

2.               Employee Training (for the warehousing,
distribution, and complaint reporting of Pharmaceutical products).

3.               Compliance for meeting the CODE OF
FEDERAL REGULATIONS (CFR) and State Wholesale Distribution Licensing
requirements for INOmax® Pharmaceutical gas distribution.

4.               Receiving Policy and Procedure for
INOmax® drug product, Delivery Devices, INOcal® calibration gas, NO test gas,
and disposable adaptors.

5.               Distribution and Tracking Policies and
Procedures for INOmax® drug product, Delivery Devices, INOcal® calibration gas,
NO test gas, and disposable adaptors.

6.               Pick-up and Tracking Policies and
Procedures for INOmax® drug product, Delivery Devices, INOcal® calibration gas,
NO test gas, and disposable adaptors

7.               Recall Policies and Procedures for
INOmax® Pharmaceutical Gases.

8.               Routine Reporting of INOmax®
Pharmaceutical Gas Cylinder Movements to INO Therapeutics Port Allen, LA
Manufacturing Plant.

9.               Warehousing and Storage Policies and
Procedures for INOmax® drug product, Delivery Devices, INOcal® calibration gas,
NO test gas, and disposable adaptors.

 

 

10.         Complaint and Incident Reporting of
INOmax® Pharmaceutical Gas Products.

11.         Customer Complaints on Product
Performance.

12.         Patient Injury or Death Reporting Policy
related to equipment distributed or serviced by ALH

13.         Monthy Delivery Device Quality Control
checks

 

2

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