Document:

Exhibit 10.34

 

IKARIA HOLDINGS, INC.

 

2007 STOCK OPTION PLAN

 

NOTICE OF STOCK OPTION GRANT

 

Daniel
Tasse (“Optionee”)

c/o
Ikaria Holdings, Inc.

6
Route 173

Clinton,
NJ 08809

 

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

 

	
  Board
  Approval Date:

  	
   

  	
  December 22,
  2007

  
	
   

  	
   

  	
   

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

  	
   

  	
  January 21,
  2008

  
	
   

  	
   

  	
   

  
	
  Exercise
  Price per Share:

  	
   

  	
  $5.57

  
	
   

  	
   

  	
   

  
	
  Type
  of Shares:

  	
   

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

  
	
   

  	
   

  	
   

  
	
  Total
  Number of Shares Granted:

  	
   

  	
  750,000

  
	
   

  	
   

  	
   

  
	
  Total
  Exercise Price:

  	
   

  	
  $4,177,500

  
	
   

  	
   

  	
   

  
	
  Type
  of Option:

  	
   

  	
  Incentive
  Stock Option

  
	
   

  	
   

  	
   

  
	
  Expiration
  Date:

  	
   

  	
  January 20,
  2018

  
	
   

  	
   

  	
   

  
	
  Vesting
  Commencement Date:

  	
   

  	
  January 21,
  2008

  

 

 

	
  Vesting/Exercise
  Schedule:

  	
   

  	
  This
  Option shall vest and become exercisable as follows: (i) 22% of the
  total number of shares that may be purchased pursuant to the Option shall be
  vested and become exercisable on each of the first four
  (4) anniversaries of the Vesting Commencement Date and (ii) the
  remaining 12% of the total number of shares that may be purchased pursuant to
  the Option shall be vested and become exercisable on the fifth anniversary of
  the Vesting Commencement Date, provided that in each case Optionee remains an
  employee of the Company, such that the total number of shares shall be fully
  vested on the five-year anniversary of the Vesting Commencement Date; and
  provided, further, that vesting and exercisability of the Option may
  accelerate as provided in Section 5 of the Stock Option Agreement.

  
	
   

  	
   

  	
   

  
	
  Termination
  Period:

  	
   

  	
  Except
  as set forth in Section 5 of the Stock Option Agreement, in the event of
  Optionee’s termination of employment, this Option may be exercised for twelve
  (12) months thereafter, if the Common Stock is not a Listed Security as of
  the date of termination, or for six (6) months thereafter, if the Common
  Stock is a Listed Security as of the date of termination (but in either case,
  in no event later than the Expiration Date). Optionee is responsible for
  keeping track of these exercise periods following termination for any reason
  of his or her service relationship with the Company. The Company will not
  provide further notice of such periods.

  
	
   

  	
   

  	
   

  
	
  Transferability:

  	
   

  	
  This
  Option may not be transferred.

  

 

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

 

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

 

In
addition, you agree and acknowledge that your rights to any Shares underlying
this Option will be earned only as you provide services to the Company over
time, that the grant of this Option is not consideration for services you
rendered to the Company prior to your Vesting

 

2

 

Commencement
Date and that nothing in this Notice or the attached documents confers upon you
any right to continue your employment or consulting relationship with the
Company for any period of time, nor does it interfere in any way with your
right or the Company’s right to terminate that relationship at any time, for
any reason, with or without cause.

 

(This space intentionally left blank)

 

3

 

	
   

  	
   

  	
  IKARIA
  HOLDINGS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  Daniel Tasse

  	
   

  	
  By:
  

  	
  /s/
  David E. Shaw

  
	
  Daniel
  Tasse

  	
   

  	
  Name:
  

  	
  David
  E. Shaw

  
	
   

  	
   

  	
  Title:
  

  	
  Chairman
  of the Board

  

 

	
  Attachments:

  	
  Ikaria
  Holdings, Inc. 2007 Stock Option Plan

  
	
   

  	
  Stock
  Option Agreement

  
	
   

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

  
	
   

  	
  Exhibit B:
  Form of Common Stockholders Agreement

  

 

4

 

Ikaria Holdings, Inc. 2007 Stock Option Plan

 

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

 

 

IKARIA HOLDINGS, INC.

 

2007 STOCK OPTION PLAN

 

STOCK OPTION AGREEMENT

 

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

 

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

 

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

 

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

 

(a)           Right to Exercise.

 

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

 

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

 

 

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

 

(b)           Method of
Exercise.

 

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

 

(ii)           As a condition to the
exercise of this Option and as further set forth in Section 12 of the Plan,
Optionee agrees to make adequate provision for federal, state or other tax
withholding obligations, if any, which arise upon the vesting or exercise of
the Option, or disposition of Shares, whether by withholding, direct payment to
the Company, or otherwise.  Optionee may
elect to satisfy his minimum withholding tax obligation by having the Company
withhold Shares with respect to which the Option is being exercised having a
Fair Market Value on the date of exercise equal to such minimum withholding tax
obligation.

 

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

 

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

 

(a)           cash or check;

 

2

 

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

 

(c)           by withholding from the
number of Shares with respect to which the Option is being exercised a number
of Shares having a Fair Market Value on the date of exercise equal to the
Exercise Price;

 

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

 

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

 

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

 

(a)           Acceleration
of Vesting Upon Certain Events.  In the event that the
termination of Optionee’s Continuous Service Status is a termination to which Section 5(a) of
the Employment Agreement dated as of October 1, 2007, by and between
Optionee and the Company (the “Employment Agreement”) applies, the
unvested portion of the Option shall continue to vest and the portion thereof
that would become exercisable during the period beginning on the Date of
Termination and ending on the 18 month anniversary of the Termination Date,
assuming that Optionee’s employment had continued during the entirety of such
period shall so vest; provided, that if the Termination Date is on or
after the date on which a Change in Control occurs, then the Option shall
automatically become fully vested as of the Termination Date.  To the extent Optionee is vested in the
Option Shares after giving effect to this Section 5(a), Optionee may
exercise this Option during the Termination Period set forth in the
Notice.  For purposes of this Stock
Option Agreement, the term “Change in Control” shall have the meaning set forth
in the Employment Agreement.

 

3

 

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

 

(i)            Death of
Optionee.  In the event of the death of
Optionee (a) during the term of this Option and while an Employee of the
Company and having been in Continuous Service Status since the date of grant of
the Option, or (b) after Optionee’s Termination Date and prior to the end of
the Termination Period, the Option may be exercised at any time within twelve
(12) months (six (6) months after if the Common Stock is a Listed Security
as of the date of death) following the date of death by Optionee’s estate or by
a person who acquired the right to exercise the Option by bequest or
inheritance, but only to the extent Optionee was vested in the Option as of the
Termination Date.

 

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

 

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

 

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

 

(a)           Incentive Stock Option.

 

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

 

4

 

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

 

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

 

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

 

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

 

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

 

5

 

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

 

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

 

6

 

EXHIBIT A

 

IKARIA HOLDINGS, INC.

 

2007 STOCK OPTION PLAN

 

EXERCISE NOTICE AND RESTRICTED STOCK PURCHASE AGREEMENT

 

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

 

1.             Exercise of
Option.  Subject to the terms and conditions
hereof, Purchaser hereby elects to exercise his or her option to purchase
                      
shares of the Non-Voting Common Stock (the “Shares”) of the Company
under and pursuant to the Company’s 2007 Stock Option Plan (the “Plan”)
and the Stock Option Agreement granted October 1. 2007 (the “Option
Agreement”).  The purchase price for
the Shares shall be $5.57 per Share for a total purchase price of
$                      .  The term “Shares” refers to the
purchased Shares and all securities received in replacement of the Shares or as
stock dividends or splits, all securities received in replacement of the Shares
in a recapitalization, merger, reorganization, exchange or the like, and all
new, substituted or additional securities or other properties to which
Purchaser is entitled by reason of Purchaser’s ownership of the Shares.  Enclosed herewith is a counterpart signature page indicating
Purchaser’s agreement to be bound as a “Stockholder” by the Company’s Common
Stockholders Agreement dated as of February 22, 2007, as may be amended
from time to time (the “Common Stockholders Agreement”).

 

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

 

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

 

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

 

(a)           Purchaser is aware of the
Company’s business affairs and financial condition and has acquired sufficient
information about the Company to reach an informed knowledgeable decision to
acquire the Shares.  Purchaser is
purchasing these securities for

 

 

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

 

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

 

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

 

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

 

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

 

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

 

2

 

5.             Restrictive Legends and
Stop-Transfer Orders.

 

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

 

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

 

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

 

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

 

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

 

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

 

7.             Lock-Up Agreement.  In connection with the initial public
offering of the Company’s securities and upon request of the Company or the
underwriters managing any underwritten offering of the Company’s securities,
Purchaser agrees not to sell, make any short sale of, loan, grant any option
for the purchase of, or otherwise dispose of any securities of the Company
(other than those included in the registration) without the prior written
consent of such underwriters for such period (not to exceed 180 days, but
subject to such extension(s) as may be

 

3

 

required
by the underwriters in order to publish research reports while complying with
the Rule 2711 of the National Association of Securities Dealers, Inc.)
from the effective date of such registration as may be requested by such
managing underwriters and to execute an agreement reflecting the foregoing as
may be requested by the underwriters at the time of the Company’s initial
public offering.  The foregoing
restrictions shall be subject to any longer restrictive periods that may be
agreed between an Optionee and the Company, including without limitation as
provided in that certain Common Stockholders Agreement.

 

8.             Miscellaneous.

 

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

 

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

 

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

 

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

 

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

 

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

 

(g)           Successors
and Assigns.  The rights and benefits of this Agreement
shall inure to the benefit of, and be enforceable by the Company’s successors
and assigns.  The rights

 

4

 

and
obligations of Purchaser under this Agreement may only be assigned with the
prior written consent of the Company.

 

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

 

[Signature Page Follows]

 

5

 

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

 

	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  IKARIA
  HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

   

  
	
   

  	
  PURCHASER:

  
	
   

  	
   

  
	
   

  	
  Daniel
  Tasse

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Signature)

  
	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
				

 

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

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Spouse
  of Daniel Tasse

  

 

6

 

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

 

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

 

 

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

 

 

	
   

  	
  INDIVIDUAL
  STOCKHOLDER:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:
  Daniel Tasse

  

 

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

 

 

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

 

 

	
   

  	
   

  
	
   

  	
  Spouse
  of Daniel Tasse

  

 

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

 

 

EXHIBIT B

 

See
Common Stockholders Agreement among Ikaria, Inc. as the stockholders
listed on the signature pages thereto, dated as of February 22, 2007
filed as exhibit 4.2 to Ikaria Inc.’s Registration Statement on Form S-1
filed on May 13, 2010.Exhibit 10.35

 

IKARIA HOLDINGS, INC.

 

2007 STOCK OPTION PLAN

 

NOTICE OF STOCK OPTION GRANT

 

Randy
Thurman (“Optionee”)

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

 

	
  Board
  Approval Date:

  	
   

  	
  June 8,
  2009

  
	
   

  	
   

  	
   

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

  	
   

  	
  June 8,
  2009

  
	
   

  	
   

  	
   

  
	
  Exercise
  Price per Share:

  	
   

  	
  $9.62

  
	
   

  	
   

  	
   

  
	
  Type
  of Shares:

  	
   

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

  
	
   

  	
   

  	
   

  
	
  Total
  Number of Shares Granted:

  	
   

  	
  7,500

  
	
   

  	
   

  	
   

  
	
  Total
  Exercise Price:

  	
   

  	
  $72,150

  
	
   

  	
   

  	
   

  
	
  Type
  of Option:

  	
   

  	
  Nonstatutory
  Stock Option

  
	
   

  	
   

  	
   

  
	
  Expiration
  Date:

  	
   

  	
  June 7,
  2019

  
	
   

  	
   

  	
   

  
	
  Vesting
  Commencement Date:

  	
   

  	
  June 20,
  2009

  
	
   

  	
   

  	
   

  
	
  Vesting/Exercise
  Schedule:

  	
   

  	
  This
  Option shall vest and become exercisable as follows: 100% of the total number
  of shares that may be purchased pursuant to the Option shall be vested

  

 

 

	
   

  	
   

  	
  and
  become exercisable on the first anniversary of the Vesting Commencement Date
  for so long as the Optionee remains an employee of or consultant to the Company.

  
	
   

  	
   

  	
   

  
	
  Termination
  Period:

  	
   

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

  
	
   

  	
   

  	
   

  
	
  Transferability:

  	
   

  	
  This
  Option may not be transferred.

  

 

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

 

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

 

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

 

	
   

  	
   

  	
   

  	
  IKARIA
  HOLDINGS, INC.

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
  /s/
  Randy Thurman

  	
   

  	
  By:

  	
  /s/
  Elizabeth A. Larkin

  
	
  Randy
  Thurman

  	
   

  	
  Name:

  	
  Elizabeth
  A. Larkin

  
	
   

  	
   

  	
  Title:

  	
  Chief
  Financial Officer

  

 

2

 

Attachments:        Ikaria Holdings, Inc.
2007 Stock Option Plan

Stock
Option Agreement

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

Exhibit B:  Form of Common Stockholders Agreement

 

3

 

Ikaria Holdings, Inc. 2007 Stock Option Plan

 

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

 

 

IKARIA HOLDINGS, INC.

 

2007 STOCK OPTION PLAN

 

STOCK OPTION AGREEMENT

 

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

 

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

 

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

 

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

 

(a)           Right to Exercise.

 

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

 

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

 

 

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

 

(b)           Method of Exercise.

 

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

 

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

 

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

 

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

 

(a)           cash or check;

 

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

 

2

 

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

 

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

 

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

 

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

 

(a)           Termination.  In the event of termination of Optionee’s
Continuous Service Status other than as a result of Optionee’s disability or
death or for Cause (as defined in the Plan), Optionee may, to the extent
Optionee is vested in the Option Shares at the date of such termination (the “Termination
Date”), exercise this Option during the Termination Period set forth in the
Notice.

 

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

 

(i)            Termination upon Disability of
Optionee.  In the event of termination of Optionee’s
Continuous Service Status as a result of Optionee’s disability, Optionee may,
but only within six months from the Termination Date, exercise this Option to
the extent Optionee was vested in the Option Shares as of such Termination
Date.

 

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

 

3

 

exercise
the Option by bequest or inheritance, but only to the extent Optionee was
vested in the Option as of the Termination Date.

 

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

 

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

 

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

 

(a)           Incentive Stock Option.

 

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

 

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

 

4

 

income
tax withholding by the Company on the compensation income recognized by
Optionee from the early disposition by payment in cash or out of the current
earnings paid to Optionee.

 

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

 

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

 

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

 

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

 

5

 

EXHIBIT A

 

IKARIA HOLDINGS, INC.

 

2007 STOCK OPTION PLAN

 

EXERCISE NOTICE AND RESTRICTED STOCK PURCHASE AGREEMENT

 

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

 

1.             Exercise of
Option.  Subject to the terms and
conditions hereof, Purchaser hereby elects to exercise his or her option to
purchase
                            
shares of the Non-Voting Common Stock (the “Shares”) of the Company
under and pursuant to the Company’s 2007 Stock Option Plan (the “Plan”)
and the Stock Option Agreement granted May 21, 2009 (the “Option
Agreement”).  The purchase price for
the Shares shall be $9.62 per Share for a total purchase price of
$                              .  The term “Shares” refers to the
purchased Shares and all securities received in replacement of the Shares or as
stock dividends or splits, all securities received in replacement of the Shares
in a recapitalization, merger, reorganization, exchange or the like, and all
new, substituted or additional securities or other properties to which
Purchaser is entitled by reason of Purchaser’s ownership of the Shares.  Enclosed herewith is a counterpart signature page indicating
Purchaser’s agreement to be bound as a “Stockholder” by the Company’s Common
Stockholders Agreement dated as of February 22, 2007, as may be amended
from time to time (the “Common Stockholders Agreement”).

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

2

 

5.             Restrictive Legends and
Stop-Transfer Orders.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

3

 

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

 

8.             Miscellaneous.

 

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

 

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

 

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

 

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

 

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

 

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

 

4

 

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

 

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

 

[Signature Page Follows]

 

5

 

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

 

	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  IKARIA
  HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PURCHASER:

  
	
   

  	
   

  
	
   

  	
  Randy
  Thurman

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Signature)

  
	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
				

 

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

 

 

	
   

  	
   

  
	
   

  	
  Spouse
  of Randy Thurman

  

 

6

 

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

 

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

 

 

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

 

	
   

  	
  INDIVIDUAL
  STOCKHOLDER:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:
  Randy Thurman

  

 

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

 

 

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

 

 

	
   

  	
   

  
	
   

  	
  Spouse
  of Randy Thurman

  

 

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

 

 

EXHIBIT B

 

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

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