Document:

Exhibit 10.17

 

FORM OF
 INDEMNIFICATION AGREEMENT

 

INDEMNIFICATION AGREEMENT

 

This Indemnification Agreement is made and entered into this      day of             2015 (the “Agreement”) by and between Bellerophon Therapeutics LLC, a Delaware limited liability company (the “Company,” which term shall include any successor entity resulting from the conversion of the Company into another form of business entity and, where appropriate, any Entity (as hereinafter defined) controlled, directly or indirectly, by the Company), and [    ] (the “Indemnitee”).

 

WHEREAS, it is essential to the Company that it be able to retain and attract as directors and officers the most capable persons available;

 

WHEREAS, increased litigation has subjected directors and officers to litigation risks and expenses, and the limitations on the availability of directors and officers liability insurance have made it increasingly difficult for the Company to attract and retain such persons;

 

WHEREAS, the Company’s Governing Documents (as hereinafter defined) require it to indemnify its directors and officers to the fullest extent permitted by law and permit it to make other indemnification arrangements and agreements;

 

WHEREAS, the Company desires to provide Indemnitee with specific contractual assurance of Indemnitee’s rights to full indemnification against litigation risks and expenses (regardless, among other things, of any amendment to or revocation of any of the Governing Documents or any change in the ownership of the Company or the composition of its Board of Directors);

 

WHEREAS, the Company intends that this Agreement provide Indemnitee with greater protection than that which is provided by the Governing Documents; and

 

WHEREAS, Indemnitee is relying upon the rights afforded under this Agreement in continuing as a director or an officer of the Company.

 

NOW, THEREFORE, in consideration of the promises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

 

1.                                      Definitions.

 

(a)                                 “Board of Directors” of an Enterprise shall mean the board of directors, or, if the Enterprise is not a corporation, the board of managers, management committee or similar governing body of the Enterprise.

 

(b)                                 A “Change in Control” shall be deemed to occur upon the earliest to occur after the date of this Agreement of any of the following:

 

(i) Acquisition of Stock by Third Party. Any Person (as hereinafter defined) (other than New Mountain Capital, LLC or any of its affiliates) is or becomes the Beneficial

 

 

Owner (as hereinafter defined), directly or indirectly, of securities of the Company representing forty percent (40%) or more of the combined voting power of the Company’s then outstanding securities unless the change in relative Beneficial Ownership of the Company’s securities by any Person results solely from a reduction in the aggregate number of outstanding shares of securities entitled to vote generally in the election of directors;

 

(ii) Change in Board of Directors. Individuals who were either (A) directors of the Company on the later of the date hereof or the date of an IPO, or (B) appointed or nominated by the directors who were directors of the Company on the date hereof or on the date of an IPO or (C) appointed or nominated by directors referred to in clause (B) above, in each case other than any individual (x) whose initial nomination or appointment occurred as a result of an actual or threatened solicitation of proxies or consents for the election or removal of one or more directors on the Board of Directors of the Company (other than any such solicitation made by the Board of Directors of the Company), or (y) designated by a Person that has entered into an agreement with the Company to effect a transaction described in clause (i), (iii), (iv) or (v) of this Section 1(b) cease for any reason to constitute at least a majority of the members of the Board of Directors of the Company;

 

(iii) Corporate Transactions. The effective date of a merger or consolidation of the Company with any other entity, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its ultimate parent, as applicable) more than 51% of the combined voting power of the voting securities of the surviving entity or its ultimate parent, as applicable, outstanding immediately after such merger or consolidation and with the power to elect at least a majority of the board of directors or other governing body of such surviving entity or its ultimate parent, as applicable;

 

(iv) Liquidation or Sale of Assets. The approval by the stockholders of the Company of a complete liquidation of the Company or an agreement for the sale or other disposition by the Company of all or substantially all of the Company’s assets; and

 

(v) Other Events. The occurrence of any other event of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or a response to any similar item on any similar schedule or form) promulgated under the Exchange Act (as hereinafter defined), whether or not the Company is then subject to such reporting requirement.

 

For purposes of this Section 2(b), the following terms shall have the following meanings:

 

(A) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.

 

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(B) “IPO” shall mean the initial public offering of equity interests in the Company or in any person of which the Company is a wholly-owned subsidiary, in each case pursuant to an effective registration statement filed with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended.

 

(C) “Person” shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange Act; provided, however, that Person shall exclude (i) the Company, (ii) any trustee or other fiduciary holding securities under an employee benefit plan of the Company, and (iii) any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.

 

(D) “Beneficial Owner” shall have the meaning given to such term in Rule 13d3 under the Exchange Act; provided, however, that Beneficial Owner shall exclude any Person otherwise becoming a Beneficial Owner by reason of the stockholders of the Company approving a merger of the Company with another entity

 

(c)                                  “Enterprise” shall mean the Company and any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that Indemnitee is or was serving at the express request of the Company as a director, officer, employee, agent, partner, managing member, manager, trustee or fiduciary.

 

(d)                                 “Entity” shall mean any corporation, partnership, limited liability company, joint venture, trust, foundation, association, organization or other legal entity.

 

(e)                                  “Expenses” shall mean all reasonable fees, costs and expenses incurred by Indemnitee in connection with any Proceeding (as hereinafter defined) (including in connection with investigating, being a witness in or defending any Proceeding, or any preparation for any of the foregoing), including, without limitation, attorneys’ fees, disbursements and retainers (including, without limitation, any such fees, disbursements and retainers incurred by Indemnitee pursuant to Section 11 or 12(c) below), fees and disbursements of expert witnesses, private investigators and professional advisors (including, without limitation, accountants and investment bankers), court costs, transcript costs, fees and disbursements of experts, travel expenses, duplicating, printing and binding costs, telephone and fax transmission charges, postage, delivery services, secretarial services, the premium, security for and other costs relating to any cost bond, supersedeas bond or other appeal bond or its equivalent, and other disbursements and expenses.  The parties agree that for purposes of any advancement of expenses for which Indemnitee has made written demand to the Company in accordance with this Agreement, all Expenses included in such demand that are certified by affidavit of Indemnitee’s counsel as being reasonable shall be presumed conclusively to be reasonable. Notwithstanding anything else herein to the contrary, the term “Expenses” shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.

 

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(d)                                 “Finally Adjudicated” shall mean that there has been a final adjudication by a court of competent jurisdiction from which there is no further right to appeal.

 

(e)                                  “Governing Documents” shall mean, as applicable, the Limited Liability Company Agreement, as amended, or the Certificate of Incorporation and By-laws or other equivalent governing documents of the Company.

 

(f)                                   “Independent Counsel” means a law firm, or a partner (or, if applicable, member) of such a law firm, that is experienced in matters of Delaware limited liability company law or Delaware corporation law, as applicable, and neither presently is, nor in the past three years has been, retained to represent (i) the Company, any other Enterprise or Indemnitee in any matter material to any such party (other than with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder.  Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.  The Company agrees to pay the reasonable fees, costs and expenses of the Independent Counsel and to fully indemnify such counsel against any and all expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

 

(g)                                  “Liabilities” shall mean judgments, damages, liabilities, losses, penalties, excise taxes, fines and amounts paid in settlement.

 

(h)                                 “Proceeding” shall mean any threatened, pending or completed claim, action, suit, arbitration, alternate dispute resolution process, investigation, administrative hearing, or any other proceeding, whether civil, criminal, administrative, arbitrative or investigative, whether formal or informal, including any appeal from any of the foregoing and further including any inquiry which Indemnitee reasonably believes might lead to the institution of any of the foregoing and further including any Proceeding initiated by Indemnitee pursuant to Section 11 below to enforce Indemnitee’s rights hereunder.

 

(i)                                     “Status” describes the status of a person who is serving or has served (i) as a director or officer of the Company, (ii) in any capacity with respect to any employee benefit plan of the Company, or (iii) as a director, partner, trustee, member, manager, shareholder, officer, employee, or agent of any other Entity at the request of the Company.  For purposes of this Agreement, including subsection (iii) of this Section l(i), if Indemnitee is serving or has served as a director, partner, trustee, member, manager, shareholder, officer, employee or agent of a Subsidiary, Indemnitee shall be deemed to be serving at the request of the Company.

 

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(j)                                    “Subsidiary” shall mean any corporation, partnership, limited liability company, joint venture, trust or other Entity of which the Company owns (either directly or through or together with another Subsidiary of the Company) either (i) a general partner, managing member or other similar interest or (ii) (A) 50% or more of the voting power of the voting capital equity interests of such corporation, partnership, limited liability company, joint venture or other Entity, or (B) 50% or more of the outstanding capital stock or other equity interests of such corporation, partnership, limited liability company, joint venture or other Entity.

 

2.                                      Services of Indemnitee.  In consideration of the Company’s covenants and commitments hereunder, Indemnitee agrees to serve and continue to serve as a director or an officer of the Company.  However, this Agreement shall not impose any obligation on Indemnitee or the Company to continue Indemnitee’s service to the Company beyond any period otherwise required by law or by other agreements or commitments of the parties, if any.

 

3.                                      Agreement to Indemnify.

 

(a)                                 The Company agrees to indemnify Indemnitee as follows:

 

(i)                                     Proceedings Other Than By or In the Right of the Company.  Subject to the exceptions contained in Section 4(a) below, if Indemnitee was or is a party or is threatened to be made a party to any Proceeding (other than an action by or in the right of the Company) by reason of Indemnitee’s Status, Indemnitee shall be indemnified by the Company against all Expenses and Liabilities incurred or paid by Indemnitee (referred to herein collectively as “Indemnifiable Amounts”) in connection therewith.

 

(ii)                                  Proceedings By or In the Right of the Company.  Subject to the exceptions contained in Section 4(b) below, if Indemnitee was or is a party or is threatened to be made a party to any Proceeding by or in the right of the Company by reason of Indemnitee’s Status, Indemnitee shall be indemnified by the Company against all Expenses incurred or paid by Indemnitee in connection therewith.

 

(b)                                 Conclusive Presumption Regarding Rights to Indemnification.  In making any determination required to be made under Delaware law or under this Agreement with respect to entitlement to indemnification hereunder, the person, persons or entity making such determination, including, as applicable, Independent Counsel, shall presume that Indemnitee is entitled to indemnification under this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making by any person, persons or Entity of any determination contrary to that presumption.

 

(c)                                  Reliance on Books and Records.  For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the officers of the

 

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Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or the Board of Directors of the Enterprise or any committee thereof, or on information or records given or reports made to the Enterprise by an independent certified public accountant, an appraiser or other expert selected with reasonable care by the Enterprise or the Board of Directors of the Enterprise or any committee thereof or on an opinion rendered by an investment bank or other financial advisor to the Board of Directors of the Enterprise or any committee thereof, at the request of the Board of Directors of the Enterprise or any committee thereof, with respect to the fairness, from a financial point of view, to the Company of a transaction or series or combination of transactions to be undertaken by the Company.  The knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.  The provisions of this Section 3(c) shall not be deemed to be exclusive or to limit in any way the other circumstances in which Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.

 

(d)                                 Acting as Witness.  To the extent that Indemnitee is, by reason of Indemnitee’s Status, a witness or otherwise asked to participate (including responding to discovery requests) in any Proceeding to which Indemnitee is not a party and is not threatened to be made a party, Indemnitee shall be indemnified against all Expenses incurred or paid by Indemnitee in connection therewith.

 

(e)                                  Indemnification of Appointing Shareholder.  If (i) Indemnitee is or was affiliated with (or is the appointee of) an investor entity which has invested in the Company and was granted the right to appoint one or more directors (an “Appointing Shareholder”), (ii) the Appointing Shareholder is, or is threatened to be made, a party to or a participant in any Proceeding and (iii) the Appointing Shareholder’s being, or being threatened to be made, a party to or a participant in such Proceeding results from a claim based on the Indemnitee’s service to the Company as a director or otherwise on Indemnitee’s Status, then the Appointing Shareholder shall be entitled to the indemnification rights and remedies under this Agreement as if the Appointing Shareholder were Indemnitee. The Company and Indemnitee agree that the Appointing Shareholder is an express third party beneficiary of the terms of this Section 3(e).

 

4.                                      Exceptions to Indemnification.  Indemnitee shall be entitled to indemnification under Sections 3(a)(i) and 3(a)(ii) above in all circumstances other than with respect to any specific claim, issue or matter involved in the Proceeding out of which Indemnitee’s claim for indemnification has arisen (each such specific claim, issue or matter, a “Specific Claim”) as follows:

 

(a)                                 Proceedings Other Than By or In the Right of the Company.  If indemnification is requested under Section 3(a)(i) above and it has been Finally Adjudicated that, in connection with a Specific Claim, Indemnitee failed to act (i) in good faith and (ii) in a manner Indemnitee reasonably believed to be in or not opposed to the best

 

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interests of the Company, or, with respect to any criminal Proceeding, Indemnitee had reasonable cause to believe that Indemnitee’s conduct was unlawful, Indemnitee shall not be entitled to payment under Section 3 above of any Indemnifiable Amounts incurred or paid by Indemnitee by reason of such Specific Claim.

 

(b)                                 Proceedings By or In the Right of the Company.  If indemnification is requested under Section 3(a)(ii) above and

 

(i)                                     it has been Finally Adjudicated that, in connection with a Specific Claim, Indemnitee failed to act (A) in good faith and (B) in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, Indemnitee shall not be entitled to payment under Section 3 above of any Expenses incurred or paid by Indemnitee by reason of such Specific Claim; or

 

(ii)                                  it has been Finally Adjudicated that Indemnitee is liable to the Company with respect to such Specific Claim, Indemnitee shall not be entitled to payment under Section 3 above of any Expenses incurred or paid by Indemnitee by reason of such Specific Claim unless the Court of Chancery of the State of Delaware or another court in which such Proceeding was brought shall determine upon application that, despite the adjudication of liability, but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification for such Expenses which such court shall deem proper; or

 

(iii)                               it has been Finally Adjudicated that Indemnitee is liable to the Company for an accounting of profits made from the purchase or sale by Indemnitee of securities of the Company pursuant to the provisions of Section 16(b) of the Securities Exchange Act of 1934, as amended, the rules and regulations promulgated thereunder and amendments thereto or similar provisions of any federal, state or local statutory law, Indemnitee shall not be entitled to payment of Expenses relating thereto under Section 3 above.

 

(c)                                  Insurance Proceeds.  To the extent payment of Indemnifiable Amounts in connection with a Specific Claim is actually made to Indemnitee under a valid and collectible insurance policy the premiums for which have been paid by the Company, Indemnitee shall not be entitled to payment hereunder of Indemnifiable Amounts with respect to such Specific Claim except to the extent that the amount of such payment under such insurance policy is less than such Indemnifiable Amounts.  Any fees, costs and expenses incurred or paid by Indemnitee in enforcing Indemnitee’s rights under any liability insurance policy paid for by the Company and insuring Indemnitee shall be considered an Expense hereunder.

 

5.                                      Additional Indemnity.  In addition to, and without regard to any limitations on, the indemnification provided for in Section 3 above, the Company shall and hereby does indemnify and hold harmless Indemnitee against all Expenses and Liabilities incurred by

 

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Indemnitee or on Indemnitee’s behalf if, by reason of Indemnitee’s Status, Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding (including a Proceeding by or in the right of the Company), including, without limitation, all liability arising out of the negligence or active or passive wrongdoing of Indemnitee.  The only limitation that shall exist upon the Company’s obligations pursuant to this Agreement shall be that the Company shall not be obligated to make any payment to Indemnitee that has been Finally Adjudicated (under the procedures, and subject to the presumptions, set forth herein, including in Sections 3, 9 and 11 hereof) to be unlawful.

 

6.                                      Contribution.

 

(a)                                 Whether or not the indemnification provided in Sections 3 and 5 hereof is available, in respect of any Proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such Proceeding), the Company shall pay, in the first instance, the entire amount of any judgment or settlement of such Proceeding without requiring Indemnitee to contribute to such payment and the Company hereby waives and relinquishes any right of contribution it may have against Indemnitee. The Company shall not enter into any settlement of any Proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such Proceeding) unless such settlement provides for a full and final release of all claims asserted against Indemnitee.

 

(b)                                 The Company hereby agrees to fully indemnify and hold Indemnitee harmless from any claims of contribution which may be brought by officers, directors or employees of the Company, other than Indemnitee, who may be jointly liable with Indemnitee.

 

(c)                                  To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee in respect of any Proceeding for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the Indemnifiable Amounts incurred by Indemnitee in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).  The relative fault of the Company and all officers, directors or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, shall be determined by reference to, among other things, the degree to which their actions were motivated by intent to gain personal profit or advantage, the degree to which their liability is primary or secondary and the degree to which their conduct was active or passive.

 

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7.                                      Procedure for Payment of Indemnifiable Amounts.

 

(a)                                 Indemnitee shall submit to the Company a written request specifying the Indemnifiable Amounts for which Indemnitee seeks payment under Section 3 above and the basis for the claim.  At the request of the Company, Indemnitee shall furnish such documentation and information as are reasonably available to Indemnitee and necessary to establish that Indemnitee has incurred or paid such Indemnifiable Amounts.

 

(b)                                 Upon written request by Indemnitee for indemnification pursuant to Section 7(a) hereof, a determination with respect to Indemnitee’s entitlement thereto shall be made in the specific case: (A) if a Change in Control shall have occurred, by Independent Counsel in a written opinion to the Board of Directors of the Company, a copy of which shall be delivered to Indemnitee; or (B) if a Change in Control shall not have occurred, by one of the following four (4) methods, which shall be at the election of the Board of Directors of the Company: (i) by a majority vote of the disinterested directors, even though less than a quorum, (ii) by a committee of disinterested directors designated by a majority vote of the disinterested directors, even though less than a quorum, (iii) if there are no disinterested directors or if the disinterested directors so direct, by Independent Counsel in a written opinion to the Board of Directors of the Company, a copy of which shall be delivered to the Indemnitee, or (iv) if so directed by the Board of Directors of the Company, by the shareholders of the Company.  For purposes hereof, disinterested directors are those members of the Board of Directors of the Company who are not parties to the action, suit or other Proceeding in respect of which indemnification is sought by Indemnitee.

 

(c)                                  If the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 7(b) hereof, the Independent Counsel shall be selected as provided in this Section 7(c).  If a Change in Control shall have occurred, the Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall request that such selection be made by the Board of Directors of the Company, in which event the next succeeding sentence shall apply), and Indemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so selected. If a Change in Control shall not have occurred, the Independent Counsel shall be selected by the Board of Directors of the Company, and the Company shall give written notice to Indemnitee advising it of the identity of the Independent Counsel so selected .  In either event, the Company or Indemnitee, as applicable, may, within ten (10) days after written notice of such selection shall have been given, deliver to Indemnitee or the Company, as applicable,  a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in this Agreement, and the objection shall set forth with particularity the factual basis of such assertion.  Absent a proper and timely objection, the person so selected shall act as Independent Counsel.  If a written objection is made and substantiated, the Independent Counsel selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit.  If, within twenty (20)

 

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days after submission by Indemnitee of a written request for indemnification pursuant to Section 7(a) hereof, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition the Court of Chancery of the State of Delaware or other court of competent jurisdiction for resolution of any objection which shall have been made by the Indemnitee to the Company’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the court or by such other person as the court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 7(b) hereof.  The Company shall pay any and all reasonable fees, costs and expenses of Independent Counsel incurred by such Independent Counsel in connection with acting pursuant to Section 7(b) hereof, and the Company shall pay all reasonable fees, costs and expenses of Indemnitee incurred in connection with the procedures of this Section 7(c), regardless of the manner in which such Independent Counsel was selected or appointed.

 

(d)                                 The Company shall pay such Indemnifiable Amounts to Indemnitee within twenty (20) calendar days of receipt of the request and receipt of the documentation referred to in Section 7(a), as applicable; provided, that, in the event that the determination of Indemnitee’s entitlement to indemnification is to be made by Independent Counsel or the shareholders of the Company pursuant to Section 7(b) hereto, then the Company shall pay such Indemnifiable Amounts to Indemnitee within (20) calendar days of the date of such determination of entitlement.

 

8.                                      Indemnification for Expenses of a Party Who is Wholly or Partly Successful.  Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of Indemnitee’s Status, a party to or otherwise the subject of, and is successful, on the merits or otherwise, in, any Proceeding, Indemnitee shall be indemnified against all Expenses reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith.  If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with each successfully resolved claim, issue or matter.  For purposes of this Agreement, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, by reason of settlement, judgment, order or otherwise, shall be deemed to be a successful result as to such claim, issue or matter.

 

9.                                      Effect of Certain Resolutions.  The termination of any Proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent shall not create a presumption that Indemnitee did not act in good faith and in a manner which Indemnitee reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, had reasonable cause to believe that Indemnitee’s action was unlawful.

 

10.                               Agreement to Advance Expenses; Undertaking.  The Company shall advance all Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding, including a Proceeding by or in the right of the Company, in which Indemnitee is involved by reason of

 

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Indemnitee’s Status within twenty (20) calendar days after the receipt by the Company of a written statement from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding.  Advances shall be unsecured and interest free and shall be made without regard to Indemnitee’s ability to repay the advances and without regard to Indemnitee’s ultimate entitlement to indemnification hereunder.  To the extent required by Delaware law, Indemnitee hereby undertakes to repay (without interest) any and all of the amount of Expenses paid to Indemnitee if it is Finally Adjudicated that Indemnitee is not entitled under this Agreement to indemnification with respect to such Expenses.  This undertaking is an unlimited general obligation of Indemnitee, and no other undertaking shall be required.

 

11.                               Remedies of Indemnitee.

 

(a)                                 Adjudication.  In the event that it should appear to Indemnitee that the Company has failed to comply with any of its obligations under this Agreement, or in the event that the Company advises Indemnitee that a determination has been made that Indemnitee is not entitled to indemnification under this Agreement or, subject to the provisions of Section 11(d)(iv) below, fails to advise Indemnitee, within sixty (60) days of Indemnitee’s written request therefor, that a determination has been made that Indemnitee is entitled to indemnification under this Agreement, or in the event that the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any action, suit or other Proceeding designed to deny, or to recover from, Indemnitee the benefits provided or intended to be provided to Indemnitee hereunder, Indemnitee shall be entitled to an adjudication in an appropriate court of the State of Delaware, or in any other court of competent jurisdiction, of Indemnitee’s entitlement to such indemnification or otherwise to enforce the provisions of this Agreement.  Alternatively, Indemnitee, at Indemnitee’s option, may seek an award in an arbitration to be conducted by a single arbitrator in the State of Delaware pursuant to the rules of the American Arbitration Association, such award to be made within twenty (20) calendar days following the filing of the demand for arbitration if the arbitration relates to failure by the Company to advance expenses and otherwise within sixty (60) calendar days following the filing of the demand for arbitration.  The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.

 

(b)                                 In the event that, following the final disposition of the underlying Proceeding in respect of which indemnification is being sought, , the Company provides written notice to Indemnitee stating that a determination has been made, in compliance with the provisions of this Agreement, including Sections 7(b) and 7(c), that Indemnitee is not entitled to indemnification under this Agreement and indemnification will not be made, then Indemnitee shall be required to commence such proceeding or arbitration with respect thereto on or before the date which is twelve (12) months of the date of delivery of such notice.Legal Fees and Expenses.  It is the intent of the Company that Indemnitee not be required to incur legal fees or other Expenses associated with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement by litigation or otherwise

 

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because the cost and expense thereof would substantially detract from the benefits intended to be extended to Indemnitee hereunder.  Accordingly, if it should appear to Indemnitee that the Company has failed to comply with any of its obligations under this Agreement, or in the event that the Company advises Indemnitee that a determination has been made that Indemnitee is not entitled to indemnification under this Agreement or, subject to the provisions of Section 11(d)(iv) below, fails to advise Indemnitee, within sixty (60) days of Indemnitee’s written request therefor, that a determination has been made that Indemnitee is entitled to indemnification under this Agreement, or in the event that the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any action, suit or other Proceeding designed to deny, or to recover from, Indemnitee the benefits provided or intended to be provided to Indemnitee hereunder, the Company irrevocably authorizes Indemnitee from time to time to retain counsel of Indemnitee’s choice, at the expense of the Company as hereafter provided, to advise and represent Indemnitee in connection with any such interpretation, enforcement or defense, including without limitation the initiation or defense of any action, suit or other Proceeding, whether by or against the Company or any director, officer, member, shareholder or other person affiliated with the Company or otherwise, in any jurisdiction.  Notwithstanding any existing or prior attorney-client relationship between the Company and any counsel, the Company irrevocably consents to Indemnitee’s entering into an attorney-client relationship with such counsel, and in that connection the Company and Indemnitee agree that a confidential relationship shall exist between Indemnitee and such counsel.  Without regard to whether Indemnitee prevails, in whole or in part, in connection with any of the foregoing, the Company will pay and be solely financially responsible for any and all Expenses incurred by Indemnitee in connection with any of the foregoing.

 

(c)                                  Burden of Proof.  In any action, suit or other Proceeding brought under Section 11(a) above to obtain payment by the Company of any Indemnifiable Amounts, the Company shall have the burden of proving that Indemnitee is not entitled to such payment hereunder.

 

(d)                                 Prior Determinations Made Concerning Permissibility of Payment of Indemnifiable Amounts.

 

(i)                                     Neither the failure of the Company (including its members, shareholders, Board of Directors or any committee thereof) or Independent Counsel, as applicable, to make a determination concerning the permissibility of the payment of Indemnifiable Amounts or the advancement of Expenses under this Agreement or the entitlement of Indemnitee to indemnification nor an actual determination by the Company (including its members, shareholders, Board of Directors or any committee thereof), or Independent Counsel that such payment or advancement is not permissible or that Indemnitee is not entitled to indemnification shall be a defense in any action, suit or other Proceeding brought under Section 11(a) above,

 

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and shall not create a presumption that such payment or advancement is not permissible or that Indemnitee is not entitled to indemnification.

 

(ii)                                  In the event that the Company (including its members, shareholders, Board of Directors or any committee thereof) or Independent Counsel, as applicable, has made a determination that the payment of Indemnifiable Amounts or the advancement of Expenses under this Agreement is not permissible and/or that Indemnitee is not entitled to indemnification, any action, suit or other Proceeding brought under Section 11(a) above shall be conducted in all respects as a de novo trial on the merits, and Indemnitee shall not be prejudiced by reason of such adverse determination.

 

(iii)                               In the event that the Company (including its members, shareholders, Board of Directors or any committee thereof) or Independent Counsel, as applicable, has made a determination that the payment of Indemnifiable Amounts or the advancement of Expenses under this Agreement is permissible and/or that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any action, suit or other Proceeding brought under Section 11(a) above, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s misstatement not materially misleading in connection with the application for indemnification, or (ii) a prohibition of such indemnification under applicable law.

 

(iv)                              Notwithstanding anything in this Agreement to the contrary, no determination as to the permissibility of the payment of Indemnifiable Amounts and/or the advancement of Expenses or as to the entitlement to indemnification under this Agreement shall be required to be made prior to the final disposition of the underlying Proceeding.

 

(e)                                  The Company shall be precluded from asserting in any action, suit or other Proceeding brought under Section 11(a) above that the procedures, presumptions or other provisions of this Agreement are not valid, binding and enforceable and shall stipulate in any such Proceeding that the Company is bound by all the provisions of this Agreement.

 

12.                               Defense of the Underlying Proceeding.

 

(a)                                 Notice by Indemnitee.  Indemnitee agrees to notify the Company promptly upon being served with any summons, citation, subpoena, complaint, indictment, information, or other document relating to any Proceeding which may result in the payment of Indemnifiable Amounts or the advancement of Expenses hereunder; provided, however, that the failure to give any such notice shall not disqualify Indemnitee from the right, or otherwise affect in any manner any right of Indemnitee, to receive payments of Indemnifiable Amounts or advancements of Expenses unless the Company’s ability to defend in such Proceeding is materially and adversely prejudiced thereby.

 

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(b)                                 Defense by Company.  Subject to the provisions of the last sentence of this Section 12(b) and Section 12(c) below, the Company shall have the right to defend Indemnitee in any Proceeding which may give rise to the payment of Indemnifiable Amounts hereunder with counsel reasonably satisfactory to Indemnitee; provided, however, that the Company shall notify Indemnitee of any such decision to defend within ten (10) calendar days of receipt of notice of any such Proceeding under Section 12(a) above.  The Company shall not, without the prior written consent of Indemnitee, consent to the entry of any judgment against Indemnitee or enter into any settlement or compromise (including a settlement referred to in Section 6(a)) which (i) includes an admission of fault of Indemnitee or (ii) does not include, as an unconditional term thereof, the full release of Indemnitee from all liability in respect of such Proceeding, which release shall be in form and substance reasonably satisfactory to Indemnitee.  This Section 12(b) shall not apply to (x) a Proceeding brought by Indemnitee under Section 11(a) above or to any counterclaims or defenses of Indemnitee referred to in Section 20 below, or (y) a Proceeding brought by or in the right of the Company (unless Indemnitee consents to such assumption thereof by the Company).

 

(c)                                  Indemnitee’s Right to Counsel.  Notwithstanding the provisions of Section 12(b) above, if in a Proceeding to which Indemnitee is a party by reason of Indemnitee’s Status, (i) Indemnitee reasonably concludes that Indemnitee may have separate defenses or counterclaims to assert with respect to any issue which may be different from or in addition to those of the Company or other defendants in such Proceeding, (ii) a conflict of interest or potential conflict of interest exists between Indemnitee and the Company or the representation of Indemnitee by the Company would be precluded under the applicable standards of professional conduct then prevailing, (iii) the Company fails to assume the defense of such Proceeding in a timely manner, or (iv) the Proceeding is one that is brought by or in the right of the Company (regardless of which party has assumed the defense thereof ), Indemnitee shall be entitled to be represented by separate legal counsel of Indemnitee’s choice (but not more than one law firm plus, if applicable, local counsel in respect of any one Proceeding) at the expense of the Company.

 

13.                               Representations and Warranties of the Company.  The Company hereby represents and warrants to Indemnitee as follows:

 

(a)                                 Authority.  The Company has all necessary power and authority to enter into, and be bound by the terms of, this Agreement, and the execution, delivery and performance by the Company of the undertakings contemplated by this Agreement have been duly authorized by all requisite limited liability action.

 

(b)                                 Enforceability.  This Agreement, when executed and delivered by the Company in accordance with the provisions hereof, shall be a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar laws affecting the enforcement of creditors’ rights generally.

 

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14.                               Insurance.  Upon the Company becoming and for so long as the Company remains a public company, the Company shall use commercially reasonable efforts to purchase and maintain a policy or policies of insurance with reputable insurance companies providing Indemnitee with coverage for losses from wrongful acts or omissions.  For so long as Indemnitee shall remain a director or an officer of the Company and with respect to any such prior service, in all policies of director and officer liability insurance, Indemnitee shall be named as an insured in such a manner as to provide Indemnitee the same rights and benefits as are accorded to the most favorably insured of the Company’s directors or officers, as applicable.  If the Company has such insurance in place at the time it receives from Indemnitee any notice of any Proceeding, the Company shall give prompt notice thereof to the insurers in accordance with the procedures set forth in the policy, and shall thereafter take all necessary or desirable action to cause such insurers to pay to Indemnitee any amounts owing to Indemnitee under the terms of the policy. For a period of at least six (6) years after Indemnitee ceases to serve as a director or officer of the Company or have any other Status (the period during which Indemnitee so served or had other Status, the “Applicable Coverage Time”), the Company shall continue to provide such insurance coverage to Indemnitee with respect to matters that existed or occurred at any time during the Applicable Coverage Time.

 

15.                               Contract Rights Not Exclusive; Third Party Indemnitors

 

(a)                                 Except as otherwise provided in Section 4(c) above, the rights to payment of Indemnifiable Amounts and advancement of Expenses provided by this Agreement shall be in addition to, but not exclusive of, any other rights which Indemnitee may have at any time under applicable law, any of the Governing Documents, or any other agreement, vote of directors (or a committee of directors), or otherwise, both as to action in Indemnitee’s official capacity and as to action in any other capacity as a result of Indemnitee’s serving as a director or an officer of the Company.

 

(b)                                 The Company hereby acknowledges that Indemnitee may have certain rights to indemnification, advancement of expenses and/or insurance provided by the Appointing Shareholder or an affiliate thereof (other than the Company or any of its Subsidiaries) (the “Third Party Indemnitors”).  The Company hereby agrees:

 

(i)                                     that it is the indemnitor of first resort (i.e., its obligations to Indemnitee are primary and any obligation of the Third Party Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by Indemnitee is secondary);

 

(ii)                                  that it shall be required to advance the full amount of Expenses incurred by Indemnitee and shall be liable for the full amount of all Indemnifiable Amounts to the extent legally permitted and as required by the terms of any of the Governing Documents and/or this Agreement, without regard to any rights Indemnitee may have against the Third Party Indemnitors or any insurance policy purchased or maintained by the Third Party Indemnitors;

 

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(iii)                               that it irrevocably waives, relinquishes and releases the Third Party Indemnitors from any and all claims against the Third Party Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof; and

 

(iv)                              that no advancement or payment by the Third Party Indemnitors on behalf of Indemnitee with respect to any claim for which Indemnitee has sought indemnification from the Company shall affect the foregoing and the Third Party Indemnitors shall have a right of reimbursement of such advancement or payment from, and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of Indemnitee against, the Company.  The Company agrees that the Third Party Indemnitors are express third party beneficiaries of the terms of this Section 15(b).

 

(c)                                  Except as provided in Section 15(b) above, the Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy maintained by the Company, contract, agreement or otherwise.

 

(d)                                 Except as provided in Section 15(b) above, the Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, partner, trustee, member, manager, shareholder, officer, employee, or agent of any other Entity shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of expenses from such other Entity.

 

16.                               Successors.  This Agreement shall be (a) binding upon all successors and assigns of the Company (including any transferee of all or a substantial portion of the business, membership interests and/or assets of the Company, any direct or indirect successor by merger or consolidation or otherwise by operation of law or the successor entity resulting from the conversion of the Company into another form of business entity) and (b) binding on and shall inure to the benefit of the heirs, personal representatives, executors and administrators of Indemnitee.  This Agreement shall continue for the benefit of Indemnitee and Indemnitee’s heirs, personal representatives, executors and administrators after Indemnitee has ceased to have Status with respect to acts and omissions by Indemnitee that shall have occurred while Indemnitee had Status.

 

17.                               Subrogation.  Except as provided in Section 15(b) above or with respect to any insurance policy purchased or maintained by Indemnitee, in the event of any payment of Indemnifiable Amounts under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of contribution or recovery of Indemnitee against other persons, and Indemnitee shall take, at the request and expense of the Company, all reasonable action necessary to secure such rights, including the execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

 

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18.                               Change in Law; Amendments to Governing Documents.  To the extent that a change in Delaware law (whether by statute or judicial decision) shall permit broader indemnification or advancement of expenses than is provided under the terms of any of the Governing Documents and/or this Agreement, Indemnitee shall be entitled to such broader indemnification and advancements, and this Agreement shall be deemed to be amended to such extent.  The Company will not adopt any amendments to any of the Governing Documents (or, in the case of any successor to the Company following the date hereof, will not allow any of the Governing Documents to contain any provision) the effect of which would be to deny or diminish or encumber Indemnitee’s right to indemnification under this Agreement.

 

19.                               Severability.  Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement, or any clause thereof, shall be determined by a court of competent jurisdiction to be illegal, invalid or unenforceable, in whole or in part, such provision or clause shall be limited or modified in its application to the minimum extent necessary to make such provision or clause valid, legal and enforceable, and the remaining provisions and clauses of this Agreement shall remain fully enforceable and binding on the parties.

 

20.                               Indemnitee as Plaintiff.  Except as provided in Section 11 above, in the last sentence of Section 4(c) above and in the next sentence, Indemnitee shall not be entitled to payment of Indemnifiable Amounts or advancement of Expenses with respect to any Proceeding brought by Indemnitee against the Company, any Entity which it controls, any director or officer thereof, or any third party, unless the Board of Directors of the Company or a committee thereof has validly consented to the initiation of such Proceeding.  This Section shall not apply to counterclaims or affirmative defenses asserted by Indemnitee in any Proceeding brought against Indemnitee.

 

21.                               Modifications, Amendments and Waiver.  Except as provided in Section 18 above with respect to changes in Delaware law which broaden the right of Indemnitee to be indemnified by the Company, no supplement, modification or amendment of this Agreement shall be binding unless executed in writing by each of the parties hereto. No waiver of any of the provisions of this Agreement shall be effective unless made in writing by the party against which the waiver of such provision is sought to be enforced.  No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement (whether or not similar), nor shall such waiver constitute a continuing waiver.

 

22.                               General Notices.  All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given (a) when delivered by hand, (b) if sent for next-day delivery by means of a nationally recognized overnight courier service, on the next day after it is so sent, or (c) if mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed:

 

(i)             If to Indemnitee, to:

 

[    ]
 [    ]

[    ]

 

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(ii)          If to the Company, to:

 

Bellerophon Therapeutics LLC

Attn: Chief Executive Officer

Perryville III Corporate Park

53 Frontage Road, Suite 301

Hampton, New Jersey 08827

Fax: (908) 574-4770

 

or to such other address as may have been furnished in the same manner by any party to the others.

 

23.                               Governing Law: Consent to Jurisdiction; Service of Process.  This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to its rules of conflict of laws.  Each of the Company and Indemnitee hereby irrevocably and unconditionally consents to submit to the exclusive jurisdiction (except as provided below) of the Court of Chancery of the State of Delaware and the courts of the United States of America located in the State of Delaware (the “Delaware Courts”) for any litigation arising out of or relating to this Agreement and the transactions contemplated hereby (and agrees not to commence any litigation relating thereto other than in such courts except (i) to enforce a judgment or order rendered by any of the aforesaid courts or (ii) as otherwise provided in Section 11), waives any objection to the laying of venue of any such litigation in the Delaware Courts and agrees not to plead or claim in any Delaware Court that such litigation brought therein has been brought in an inconvenient forum.  Each of the parties hereto agrees that service of process may also be made on such party by prepaid certified mail with a proof of mailing receipt validated by the United States Postal Service constituting evidence of valid service.  Service made pursuant to the preceding sentence shall have the same legal force and effect as if served upon such party personally within the State of Delaware.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

 

	
 
    	
BELLEROPHON THERAPEUTICS LLC
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
Jonathan M. Peacock
    
	
 
    	
Title:
    	
Chief Executive Officer and President
    
	
 
    	
 
    
	
 
    	
INDEMNITEE
    
	
 
    	
 
    
	
 
    	
 
    

 

19Exhibit 10.18

 

EXECUTION VERSION

 

EMPLOYMENT AGREEMENT

 

AGREEMENT by and between Ikaria, Inc., a Delaware corporation (the “Company”), and Mr. Manesh Naidu (the “Employee”), dated as of the 4th day of January, 2012.

 

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

 

WHEREAS, the Company desires to enlist the services of the Employee on behalf of the Company as its Vice President and General Manager, INOPulse and Outpatient Indications, and the Employee is willing to render such services, in each case on the terms and conditions set forth herein.

 

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

 

1.                                     Employment Period. The Company shall employ the Employee, and the Employee shall serve the Company, on the terms and conditions set forth in this Agreement, for the period commencing on January 4th, 2012 (the “Effective Date”), and ending on January 3rd, 2013; provided, however, that commencing on January 3rd, 2012 and each annual anniversary of such date January 3rd, 2012, and each annual anniversary thereof, shall hereinafter be referred to as the “Renewal Date”), unless previously terminated, the Employment Period shall be automatically extended so as to terminate one year from the applicable Renewal Date (the Employee’s period of employment pursuant to this Agreement, the “Employment Period”), unless ninety (90) days prior to such Renewal Date the Company or the Employee shall terminate the Employment Period by giving written notice to the other party that the Employment Period shall not be so extended.

 

2.                                     Position and Duties.

 

(a)                                 During the Employment Period, the Employee shall serve as Vice President and General Manager, INOPulse and Outpatient Indications, of the Company, with such duties and responsibilities as are customarily assigned to such position, and such other duties and responsibilities not inconsistent therewith as may be assigned to the Employee from time to time by the Company.

 

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

 

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

 

 

3.                                     Compensation.

 

(a)                                 Base Salary. During the Employment Period, the Employee shall receive a base salary (such base salary, as it may be increased from time to time hereunder, the “Annual Base Salary”) at the annual rate of $237,500. The Annual Base Salary shall be payable in accordance with the Company’s payroll practices as in effect from time to time, subject to applicable taxes and withholding. During the Employment Period, the Annual Base Salary shall be reviewed for possible merit increases at least annually but shall not be reduced during the Employment Period.

 

(b)                                 Employee Performance Bonus. For the 2012 calendar year, the Employee will be eligible to earn the performance based bonus within the calendar year or as the performance criteria in Exhibit C establishes. The amount of the Employee Performance Bonus is $320,000 and will be paid out as set forth in Exhibit C, provided that each performance criteria set forth in Exhibit C hereto has been met within the prescribed deliverables and timelines.

 

(c)                                  Annual Bonus. For the 2012 calendar year and each subsequent calendar year during the Employment Period, the Employee shall be eligible to receive a cash bonus based on the Employee’s service during such year in such amount as is determined in accordance with the terms of the Company’s management incentive program then applicable to the Employee at an annualized target of 35% of Annual Base Salary, provided that the Employee is employed by the Company at the time such Annual Bonus is declared due and owing (the “Annual Bonus”).

 

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

 

(e)                                  Equity Compensation.

 

(i)                                                RSU Grant.  As soon as practicable, after the Effective Date, the Company shall grant to the Employee restricted stock units pursuant to the Plan, as amended, in respect of 20,000 shares of Common Stock (“RSU’s”). Subject to the provisions of this Agreement, the RSUs shall vest 5,000 on each of the second and third anniversary, and 10,000 on the fourth anniversary date of the Effective Date, and shall include such other terms and conditions consistent with this Agreement as are set forth in the form of RSU award agreement.

 

4.                                     Termination of Employment.

 

(a)                                 Death or Disability. The Employee’s employment hereunder shall terminate automatically upon the Employee’s death during the Employment Period. The Company shall, to the full extent permitted by law, be entitled to terminate the Employee’s employment because of the Employee’s “Disability” (as herein defined) during the Employment Period. “Disability” means the permanent disability of the Employee in accordance with the long-term disability plan of the Company applicable to the Employee.

 

 

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

 

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

 

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

 

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

 

C.                                    any adverse change in the Employee’s compensation or benefits;

 

For purposes of this Agreement, a “Change in Control” shall have occurred if, after the Effective Date, (A) any “Person” (as the term person is used for purposes of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (other than any Person that includes New Mountain Partners II, L.P., New Mountain Affiliated Investors II, L.P. or

 

 

Allegheny New Mountain Partners, L.P. or any of their affiliates (an “Excluded Person”)), is the “Beneficial Owner” (within the meaning of Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of more than 50% of the voting capital stock of the Company, (B) any Person other than an Excluded Person has or obtains the right to elect a majority of the Board or (C) the Company sells in a single transaction or series of transactions all or substantially all of its assets; and provided, that, for avoidance of doubt, an initial public offering of securities of the Company shall not constitute a Change in Control for purposes of this Agreement.

 

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

 

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

 

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

 

5.                                     Obligations of the Company upon Termination.

 

(a)                                 Termination Other Than for Cause; Termination for Good Reason; Non-Renewal of the Employment Period. If, during the Employment Period, (i) the Company terminates the Employee’s employment, other than for Cause, death or Disability, or (ii) the Employee terminates his employment for Good Reason, or (iii) the Employee terminates his employment at the end of the Employment Period and the Company has previously given notice to the Employee that the Employment Period will not be extended, the Company shall pay the amounts and provide the benefits described, in each case as set forth in paragraphs A through C below.

 

A.                                    The Employee’s earned and accrued but unpaid cash compensation, in the form of a lump-sum payment, to be paid not later than the regularly scheduled pay period next following the date on which the Release becomes effective, which shall equal the sum of (l) any portion of the Employee’s Annual Base Salary earned through the Date of Termination that has not yet been paid, (2) any unpaid Annual Bonus that was earned by the Employee and declared due and owing by the Company, and (3) any accrued but unpaid vacation time, in each case subject to applicable taxes and withholding (the amounts set forth in subclauses (1)-(3) constitute the “Accrued Obligations”). The Company shall also provide the Employee with any other benefits (other than severance benefits) to

 

 

which the Employee is entitled under the Company’s benefit plans and arrangements as and when due under such plans and arrangements (the “Accrued Benefits”).

 

B.                                    A payment, payable in accordance with the Company’s standard monthly payroll practices and subject to withholding and taxes, of an amount equal to the sum of (i) the Employee’s Annual Base Salary and (ii) the greater of the Annual Bonus at the target level and the actual Annual Bonus most recently paid to the Employee, determined on a monthly basis, for a period of twelve (12) months from the Date of Termination (the “Salary Continuation Severance Payment”).

 

C.                                    For twelve (12) months from the Date of Termination, and subject to the Employee electing COBRA continuation coverage, the Company shall provide the Employee with medical, dental and vision benefits at active-employee rates.

 

In addition, if during the Employment Period and within 12 months after the date on which a Change in Control occurs (i) the Company terminates the Employee’s employment, other than for Cause, death or Disability, or (ii) the Employee terminates his employment for Good Reason, or (iii) the Employee terminates his employment at the end of the Employment Period and the Company has previously given notice to the Employee that the Employment Period will not be extended, then any equity compensation granted to the Employee shall (whether or not specified in the grant agreements evidencing such equity compensation) become fully vested as of the Date of Termination.

 

The Company’s obligations to make the payments set forth in paragraphs B and C of this Section 5(a) shall be conditioned upon: (x) the Employee’s continued compliance with his obligations under Section 6 of this Agreement and (y) the Employee’s execution, delivery and non-revocation of a valid and enforceable general release of claims against the Company and its affiliates in the form attached hereto as Exhibit A (the “Release”). The severance payment described herein shall constitute the exclusive payments in the nature of severance or termination pay which shall be due to the Employee upon a termination of employment other than for Cause or with Good Reason and shall be in lieu of any other such payments under any plan, program, policy or other arrangement of the Company or any affiliate. The Employee shall have no obligation to mitigate any amounts payable to the Employee under this Agreement, whether by seeking employment or otherwise.

 

Notwithstanding the provisions of this Section 5 relating to the timing of payments to the Employee hereunder, if Section 409A of the Internal Revenue Code of 1986, as amended, would cause the imposition of the additional tax under Section 409A if paid as aforesaid, then payment of the Salary Continuation Severance Payment and Pro Rata Bonus shall be ordered so as to avoid the imposition of such additional tax, as follows: (i) as much of the Pro Rata Bonus as may be paid without the imposition of the additional tax shall be paid in a lump sum as aforesaid, and any remaining portion of the Pro Rata Bonus shall be paid upon the day following the six-month anniversary of the Date of Termination; and (ii) if any installments of the Salary Continuation Severance Payment may be paid (in whole or in part) as aforesaid without the imposition of the additional tax, then such installments shall be paid as aforesaid, and the remaining installments shall commence on the day following the six-month anniversary of the termination date, and the first installment paid on the day following the six-month anniversary of the termination date shall include all portions of the Salary Continuation Severance Payment that

 

 

would have been paid but for the application of Section 409A to the Salary Continuation Severance Payment.

 

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

 

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

 

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

 

(a)                                 The Employee, at all times during the Employment Period and thereafter, shall hold in a fiduciary capacity for the benefit of the Company all secret, trade, proprietary or confidential information, knowledge or data relating to the Company or any of its affiliated companies and shareholders, and their respective businesses, that the Employee obtains during the Employee’s employment by the Company or any of its affiliated companies and that is not public knowledge (other than as a result of the Employee’s violation of this Section 6(a)) (“Confidential Information”). The Employee shall not communicate, divulge or disseminate Confidential Information at any time during or after the Employee’s employment with the Company, except with the prior written consent of the Company or as otherwise required by law or legal process. The Employee shall deliver promptly to the Company on termination of the Employee’s employment by the Company, or at any other

 

 

time the Company may so request, at the Company’s expense, all memoranda, notes, records, reports and other documents (and all copies thereof) relating to the Company’s business, which the Employee obtained while employed by, or otherwise serving or acting on behalf of, the Company and which the Employee may then posses or have under the Employee’s control.

 

(b)                                 During the “Noncompetition Period,” the Employee shall not, without the prior written consent of the Board, engage in or become associated with a “Competitive Activity.” For purposes of this Section 6: (i) the “Noncompetition Period” means the period commencing on the Effective Date and ending on the twelve-month anniversary of the date upon which Employee’s employment with the Company is terminated for any reason; (ii) a “Competitive Activity” means any business or other endeavor that engages in any business activity (x) engaged in by the Company or any of its subsidiaries at the Date of Termination in any geographic location in the United States or (y) proposed to be engaged in by the Company or any of its subsidiaries at the Date of Termination in any geographic location in the United States (but clause (y) shall apply only to any proposed business activity as to which the Company or any of its subsidiaries has devoted significant efforts at the Date of Termination); and (iii) the Employee shall be considered to have become “associated with a Competitive Activity” if the Employee becomes directly or indirectly involved as an owner, investor (other than a passive stockholder of less than five percent (5%) of a corporation the securities of which are traded on a national securities exchange), employee, officer, director, consultant, independent contractor, agent, partner, advisor, or in any other capacity calling for the rendition of the Employee’s personal services, with any individual, partnership, corporation or other organization that is engaged directly or indirectly in a Competitive Activity.

 

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

 

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

 

(e)                                  The Employee acknowledges that during the Employment Period, the Employee may conceive of, discover, invent or create inventions, improvements, new contributions, literary property, computer programs and software material, ideas and discoveries, whether patentable or copyrightable or not (all of the foregoing being collectively referred to herein as “Work Product”), and that various business opportunities shall be presented to the

 

 

Employee by reason of the Employee’s employment by the Company. The Employee acknowledges that all of the foregoing shall be owned by and belong exclusively to the Company and that the Employee shall have no personal interest therein; provided that they are either related in any manner to the business (commercial or experimental) of the Company or any of its subsidiaries, or are, in the case of Work Product, conceived or made on the Company’s time or with the use of the Company’s facilities or materials, or, in the case of business opportunities, are presented to the Employee for the possible interest or participation of the Company or any of its subsidiaries. The Employee shall (i) promptly disclose any such Work Product and business opportunities to the Company; (ii) assign to the Company, upon request and without additional compensation, the entire rights to such Work Product and business opportunities; (iii) sign all papers necessary to carry out the foregoing; and (iv) give testimony in support of the Employee’s inventorship or creation in any appropriate case. The Employee agrees that the Employee will not assert any rights to any Work Product or business opportunity as having been made or acquired by the Employee prior to the date of this Agreement except for Work Product or business opportunities disclosed on Exhibit B to this Agreement.

 

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

 

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

 

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

 

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

 

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

 

 

Employee’s employment, the Employee shall be covered under any directors’ and officers’ insurance policy maintained by the Company.

 

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

 

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

 

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

 

If to the Employee, to the Employee’s address as maintained by the Company.

 

If to the Company:

 

Ikaria, Inc.

Perryville III Corporate Park

53 Frontage Road, Third Floor

Hampton, New Jersey 08827

Telephone: (908) 238-6600

Facsimile: (908) 238-6699

Attention: General Counsel

 

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

 

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

 

 

original, so as to be valid and enforceable to the maximum extent permissible under applicable law.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(k)                                 Each party (i) hereby irrevocably submits itself to and acknowledges and recognizes the jurisdiction of the courts of the State of New Jersey in the County of Middlesex (which court, together with all applicable appellate courts, for purposes of this Agreement, are the only “courts of competent jurisdiction”), for the purpose of any suit, action or other proceeding arising out of, under, or in connection with, relating to, or based upon this Agreement, (ii) agrees that any service of process in connection with any such suit, action or

 

 

other proceeding may be made upon it by means of the United States mail or such other service as may be authorized by any such court, (iii) agrees that the courts of competent jurisdiction shall be the sole and exclusive courts and forums for the purpose of any such suit, action or proceeding and (iv) waives and agrees not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject to the jurisdiction of courts of competent jurisdiction, that such suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court. Each party agrees that its submission to jurisdiction and its consent to service of process by mail is made for the express benefit of the other party.

 

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

 

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

 

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

 

[SIGNATURE PAGE FOLLOWS]

 

 

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

 

 

	
/s/   Mr. Manesh Naidu
    	
 
    
	
Mr.   Manesh Naidu
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
IKARIA,   INC.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Mr. Daniel Tasse’
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
Mr. Daniel   Tasse’
    	
 
    
	
Title:   
    	
Chairman   and Chief Executive Officer
    	
 
    

 

Exhibits:

A: Form of Waiver and Release of Claims

B: Disclosed Work Product and Business Opportunities

C: Performance Bonus and Performance Bonus Criteria

 

 

Exhibit A

Form of Waiver and Release of Claims

 

WAIVER AND RELEASE OF CLAIMS

 

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

 

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

 

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

 

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

 

(d)                                 rights to indemnification the Employee may have (i) under applicable corporate law, (ii) under the by-laws or certificate of incorporation of any Company Released Party or (iii) as an insured under any director’s and officer’s liability insurance policy now or previously in force;

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

 

	
 
    	
 
    
	
 
    	
Mr. Manesh   Naidu
    

 

 

Exhibit B

Disclosed Work Product and Business Opportunities

 

NONE

 

 

Exhibit C

Performance Bonus and Performance Bonus Criteria

 

	
Top Objectives
    	
 
    	
Key Metric
    	
 
    	
Due Date
    	
 
    	
Weight
    	
 
    
	
1.  Have   device available for pharmacodynamic (3 day, in hospital) study evaluating INOpulse   DS use in COPD
    	
 
    	
Device   is ready for human use & meets relevant regulatory requirements
    	
 
    	
August 1,   2012
    	
 
    	
34
    	
%
    
	
2.  Identify   design specs and develop non-working model/prototype for next generation   device
    	
 
    	
Device   is half the size and weight and (per ET judgment) shows the potential of   device evolution strategy
    	
 
    	
September 30,   2012
    	
 
    	
33
    	
%
    
	
3.  Craft a   strategy that provides for market protection beyond data exclusivity   (including IPF strategy)
    	
 
    	
Strategy   meets ET approval (i.e. spells M.O.T.H.E.R.)
    	
 
    	
December 27,   2012
    	
 
    	
33
    	
%

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