Document:

Exhibit 4.2

		
			EXHIBIT 4.2
		

		
			DESCRIPTION OF CAPITAL STOCK 
		

		
			The following summary describes our capital stock and certain provisions of our restated certificate of incorporation, our bylaws, the registration rights agreements to which we and certain of our stockholders are parties and the General Corporation Law of the State of Delaware. Because the following is only a summary, it does not contain all of the information that may be important to you. For a complete description, you should refer to our restated certificate of incorporation, bylaws, and registration rights agreements, copies of which are filed with this Annual Report on Form 10-K.
		

		
			General 
		

		
			We are a Delaware corporation. We completed transactions on July 26, 2016 pursuant to which we converted into a Delaware corporation and changed our name from Kadmon Holdings, LLC to Kadmon Holdings, Inc. Our authorized share capital consists of 400,000,000 shares of common stock, par value $0.001 per share, and 10,000,000 preferred shares, par value $0.001 per share. 
		

		
			The following descriptions are summaries of important terms contained in our restated certificate of incorporation and our bylaws (our “Certificate of Incorporation” and “Bylaws,” respectively). Reference is made to the more detailed provisions of, and the descriptions are qualified in their entirety by reference to, our Certificate of Incorporation and Bylaws, copies of which are filed with the United States Securities and Exchange Commission (“SEC”) as exhibits to this Annual Report on Form 10-K, and to relevant portions of the General Corporation Law of the State of Delaware (“DGCL”).
		

		
			Common Stock 
		

		
			General.  As of December 31, 2019, there were 159,759,996 shares of common stock issued and outstanding. All outstanding shares of common stock are validly issued, fully paid and nonassessable.  
		

		
			Voting Rights.  The holders of our common stock are entitled to one vote for each share held of record on all matters submitted to a vote of the stockholders, including the election of directors, and do not have cumulative voting rights. Unless otherwise required by law, matters submitted to a vote of our stockholders require the approval of a majority of votes cast by stockholders represented in person or by proxy and entitled to vote on such matter, except that directors will be elected by a plurality of votes cast. Accordingly, the holders of a majority of the shares of common stock entitled to vote in any election of directors are able to elect all of the directors standing for election, if they so choose. 
		

		
			Dividend Rights.  Holders of shares of common stock are entitled to receive ratably dividends if, as and when dividends are declared from time to time by our board of directors out of funds legally available for that purpose, subject to any preferential dividend rights of any then outstanding preferred stock. 
		

		
			Liquidation.  Upon our liquidation, dissolution or winding up, the holders of shares of common stock are entitled to share ratably in the net assets legally available for distribution to stockholders after the payment of all of our debts and other liabilities, subject to any liquidation preference granted to holders of any outstanding preferred stock. 
		

		
			Rights and Preferences.  Holders of shares of common stock have no preemptive or conversion rights or other subscription rights, and no redemption or sinking fund provisions are applicable to our common stock. The rights, preferences and privileges of the holders of our common stock are subject to and may be adversely affected by the rights of the holders of shares of any series of our preferred stock that we may designate in the future. 
		

		
			Fully Paid and Nonassessable.  All outstanding shares of common stock are, and the shares of common stock to be issued in this offering will be, fully paid and nonassessable. 
		

		
			Registration Rights. In connection with a private placement of our securities in March 2017, we entered into a Registration Rights Agreement dated March 8, 2017 with certain investors. Pursuant to the terms of the registration rights agreement, we were obligated to prepare, file and maintain with the SEC a registration statement to register 
		

		 

 

		for resale certain shares purchased by investors in the private placement following the closing of the private placement, among other customary obligations for agreements of this type.   
		

		
			Listing. Our common stock is listed under the symbol “KDMN” on the New York Stock Exchange. 
		

		
			Transfer Agent and Registrar. The transfer agent and registrar for our common stock is American Stock Transfer & Trust Company, LLC. 
		

		
			Preferred Stock 
		

		
			As of December 31, 2019, no shares of our preferred stock were outstanding other than shares of our 5% convertible preferred stock, as described below under “—5% Convertible Preferred Stock.” Our Certificate of Incorporation authorizes our board of directors, without further action by our stockholders, to issue up to 10,000,000 shares of preferred stock in one or more series and to fix the rights, preferences, privileges and restrictions thereof. These rights, preferences and privileges could include dividend rights, conversion rights, voting rights, redemption rights, terms of sinking funds, liquidation preferences, the number of shares constituting any class or series and the designation of the class or series.  Terms selected by our board of directors in the future could decrease the amount of earnings and assets available for distribution to holders of shares of common stock or adversely affect the rights and powers, including voting rights, of the holders of shares of common stock without any further vote or action by the stockholders. As a result, the rights of holders of our common stock will be subject to, and may be adversely affected by, the rights of the holders of the 5% convertible preferred stock and any other preferred stock that may be issued by us in the future, which could have the effect of decreasing the market price of our common stock. The issuance of preferred stock could, among other things, have the effect of delaying, deferring or preventing a change in control of our company, which could depress the market price of our common stock. 
		

		
			The terms of any particular series of preferred stock will be described in the prospectus supplement relating to the offering of shares of such series of preferred stock. If we issue shares of preferred stock under this prospectus and any related prospectus supplement, the shares will be fully paid and nonassessable and will not have, or be subject to, any preemptive or similar rights. 
		

		
			5% Convertible Preferred Stock 
		

		
			        As of December 31, 2019, we had 28,708 shares of convertible preferred stock issued and outstanding, designated as the 5% convertible preferred stock pursuant to the certificate of designations filed by us with the Secretary of State of the State of Delaware, with an aggregate original purchase price and initial liquidation preference of $30.0 million. As of December 31, 2019, the stated liquidation preference of the 5% convertible preferred stock was $33.1 million. Each share of convertible preferred stock was issued for an amount equal to $1,000 per share, which we refer to as the original purchase price. 
		

		
			        The following description is a summary of the material provisions of the 5% convertible preferred stock and the certificate of designations and does not purport to be complete. This summary is subject to and is qualified by reference to all the provisions of the convertible preferred stock and certificate of designations, including the definitions of certain terms used in the certificate of designations. We urge you to read this document because it, and not this description, defines the rights of a holder of the 5% convertible preferred stock. A copy of the form of certificate of designations that we filed with the Secretary of State of the State of Delaware on July 26, 2016 has been incorporated by reference as an exhibit to this Annual Report on Form 10-K. 
		

		
			No Mandatory Redemption Date or Sinking Fund 
		

		
			        The shares of 5% convertible preferred stock do not have a mandatory redemption date and are not subject to any sinking fund. The shares of convertible preferred stock will remain outstanding indefinitely unless we are required to redeem them under the circumstances described below in “—Redemption” or we otherwise repurchase them or they are converted into shares of our common stock as described below under “—Conversion Rights.”   
		

		

		

		 

 

		Dividends 
		

		
			        The shares of 5% convertible preferred stock are entitled to receive dividends, when and as declared by our board of directors and to the extent of funds legally available for the payment of dividends, at an annual rate of 5% of the sum of the original purchase price per share of 5% convertible preferred stock plus any dividend arrearages. Dividends on the convertible preferred stock shall, at our option, either be paid in cash or added to the stated liquidation preference amount for purposes of calculating dividends at the 5% annual rate (until such time as we declare and pay the missed dividend in full and in cash, at which time that dividend will no longer be part of the stated liquidation preference amount). Dividends shall be payable annually on June 30 of each year and shall be cumulative from the most recent dividend payment date on which dividend has been paid or, if no dividend has ever been paid, from the original date of issuance of the 5% convertible preferred stock and shall accumulate from day to day whether or not declared until paid. 
		

		
			        The shares of 5% convertible preferred stock are also entitled to participate in all dividends declared and paid on shares of company common stock on an “as if” converted basis. 
		

		
			Liquidation Preference 
		

		
			In the event of: 
		

		
			(A)  a liquidation, dissolution or winding up of our company, whether voluntary or involuntary; 
		

		
			(B)  certain changes of control; 
		

		
			(C)  a sale or transfer of all, or substantially all, of our consolidated assets other than to a wholly-owned subsidiary of ours; 
		

		
			(D)  any other event of discharge, retirement or cancellation of the 5% convertible preferred stock, in each case in this clause (D), that is not described in the foregoing clauses (A), (B) or (C) or a redemption pursuant to the certificate of designations; 
		

		
			(E)  our company or one of our significant subsidiaries becoming the subject of certain bankruptcy events; 
		

		
			(F)  a material breach of our obligations under the exchange agreement that is not cured within 15 days after we receive notice from a holder of the 5% convertible preferred stock; or 
		

		
			(G)  upon our failure to make any payment of principal, interest, or other amount due and payable of any of our or our subsidiaries’ indebtedness after giving effect to any applicable cure period, 
		

		
			the holders of the 5% convertible preferred stock shall be entitled to receive for each share of 5% convertible preferred stock an amount equal to the greater of (i) (A) (I) the original purchase price per share of 5% convertible preferred stock plus dividend arrearages thereon in cash plus (II) any dividends accrued and unpaid thereon from the last dividend payment date to the date of the final distribution to such holder plus (B) solely in connection with an event specified in clauses (A), (D), (E), (F) or (G) above, a premium equal to 20.2% of the amount described in clause (i)(A) of this sentence at such time or (ii) an amount per share of 5% convertible preferred stock equal to the amount which would have been payable or distributable had each share of 5% convertible preferred stock been converted into shares of our common stock immediately before the event occurred under clause (A), (B), (C) or (D) above. 
		

		
			        Subject to the rights of the holders of any parity shares, upon any of the events specified in clauses (A) through (D) above, after payment shall have been made in full to the holders of the convertible preferred stock and any parity securities, any other series or class or classes of junior securities shall be entitled to receive any and all assets remaining to be paid or distributed, and the holders of the convertible preferred stock and any parity securities as such shall not be entitled to share in that payment or distribution.   
		

		
			        In the event that the event giving rise to the determination of the amount that holders of 5% convertible preferred stock shall be entitled to receive as their liquidation preference is a failure by us to make any payment of principal, interest, or other amount due and payable of any of our or our subsidiaries’ indebtedness after giving effect to any applicable cure period, that event shall be deemed never to have occurred if, subsequent to the expiration of the cure period, (i) that failure to make payment is cured in full, (ii) all other obligations to pay 
		

		 

 

		principal, interest or other amounts due and payable of any of our or our subsidiaries’ indebtedness have been paid at that time, and (iii) no bankruptcy event has occurred. 
		

		
			Ranking 
		

		
			        The 5% convertible preferred stock ranks, with respect to rights to the payment of dividends and the distribution of assets in the event of any of the events specified in clauses (A) through (D) under “—Liquidation Preference” above, 
		

		
			(1)  senior to all common stock and to all other equity securities of our company other than equity securities referred to in clauses (2) and (3) of this sentence (“junior securities”);  
		

		
			(2)  to the extent authorized under the certificate of designations, on a parity with all equity securities of our company the terms of which specifically provide that such equity securities rank on a parity with the 5% convertible preferred stock (“parity securities”); and  
		

		
			(3)  to the extent authorized under the certificate of designations, junior to all equity securities of our company the terms of which specifically provide that such equity securities rank senior to the 5% convertible preferred stock (“senior securities”). 
		

		
			        See “Voting Rights—Matters Requiring Approval of Holders of 5% Convertible Preferred Stock” for a description of the types of issuances of equity securities and other securities of our company requiring approval of holders of a majority of shares of 5% convertible preferred stock then outstanding, voting together as a class. 
		

		
			Redemption 
		

		
			If: 
		

			
					
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						(A) 

					
					
						 

					
					
						we or one of our significant subsidiaries becomes the subject of certain bankruptcy events;

				
	
					
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						(B) 

					
					
						 

					
					
						a material breach of our obligations under the exchange agreement occurs that is not cured within 15 days after we receive notice from a holder of the 5% convertible preferred stock; or

				

			
					
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						(C) 

					
					
						 

					
					
						we fail to make any payment of principal, interest, or other amount due and payable of any of our or our subsidiaries’ indebtedness after giving effect to any applicable cure period,

				

		
			each holder of 5% convertible preferred stock shall have the right to cause us to redeem all or part of the shares of 5% convertible preferred stock held by such holder for a redemption price per share equal to (i) the original purchase price plus any dividend arrearages plus any dividends accrued and unpaid thereon from the last dividend payment date to, but excluding, the redemption date plus (ii) a premium equal to 20.2% of the amount described in clause (i) of this sentence at such time. 
		

		
			        We are required to mail notice of any redemption event to the holders of 5% convertible preferred stock not later than one business day after we acquire knowledge of that event. That notice must state, among other things, (1) the redemption price and the date of redemption, which shall be no sooner than 30 days and no later than 90 days from the date the notice is mailed and (2) any holder of 5% convertible preferred stock electing to have its shares redeemed shall be required to surrender its shares, with a properly completed redemption request, to us before the close of business on the fifth business day before the redemption date. If we fail to give notice of the redemption event within the time period specified above, then any holder of 5% convertible preferred stock may deliver that notice to us and the other holders, in which case the redemption date shall occur on the 45th day after the date of the notice and any holder electing to have any of its shares of 5% convertible preferred stock redeemed shall be required to surrender its shares, with a properly completed redemption request, to us before the close of business on the fifth business day preceding that redemption date. 
		

		
			   
		

		
			        Until the holders of the 5% convertible preferred stock who have delivered a notice to us requesting redemption have been paid the redemption price specified in the previous paragraph in full, no payment will be made to any holder of parity securities or junior securities. 
		

		

		

		 

 

		        Notwithstanding anything to the contrary, in the event that the event giving rise to the above redemption right is a failure by us to make any payment of principal, interest or other amount due and payable of any of our indebtedness after giving effect to any applicable cure period, that event shall be deemed never to have occurred and any request for redemption delivered by a holder of 5% convertible preferred stock in respect of that event shall be deemed automatically rescinded if, subsequent to the expiration of the cure period, (i) our failure to make payment is cured in full, (ii) all other obligations to pay principal, interest or other amounts due and payable of any of our or our subsidiaries’ indebtedness have been paid at such time and (iii) no bankruptcy event has occurred. 
		

		
			Conversion Rights 
		

		
			Conversion at the Option of the Holder.  The holders of shares of 5% convertible preferred stock will, at any time, be entitled to convert some or all of their 5% convertible preferred stock into the number of shares of our common stock obtained by dividing the aggregate original purchase price of the shares to be converted plus any dividend arrearages plus any dividends accrued and unpaid from the last dividend payment date to but excluding the conversion date by an amount equal to 80% of the initial public offering price per share in our initial public offering, which amount we refer to as the conversion price. The conversion price will be adjustable upon the occurrence of certain events and transactions to prevent dilution as described under “—Adjustments to Conversion Price to Prevent Dilution.” Any shares of our common stock issued upon conversion of the shares of 5% convertible preferred stock shall be validly issued, fully paid and nonassessable. Cash shall be paid in lieu of fractional shares. 
		

		
			Conversion at our Option.  At any time following the first anniversary of the issuance of the 5% convertible preferred stock, provided that (A) the volume-weighted average price of our common stock for the 30 consecutive trading days immediately preceding the date we elect for conversion is in excess of 150% of the initial public offering price per share in this offering (as adjusted for the events described below under “—Adjustments to Conversion Price to Prevent Dilution” and dividends paid in shares of our common stock) and (B) we have in place an effective resale shelf registration statement permitting the resale of all of the shares of common stock issuable upon conversion of the 5% convertible preferred stock, we have the right to require the conversion of any number of shares of 5% convertible preferred stock then outstanding into the number of shares of our common stock obtained by dividing the aggregate original purchase price of the shares to be converted plus any dividend arrearages plus any dividends accrued and unpaid from the last dividend payment date to but excluding the conversion date by the then applicable conversion price. 
		

		
			Adjustments to Conversion Price to Prevent Dilution 
		

		
			The 5% convertible preferred stock is subject to provisions that protect the holders against dilution by adjustment of the conversion price and/or number of shares of common stock issuable upon conversion in certain events such as a subdivision, combination or reclassification of our outstanding common stock. 
		

		
			Voting Rights—Matters Requiring Approval of Holders of 5% Convertible Preferred Stock 
		

		
			        Holders of the 5% convertible preferred stock shall be entitled to vote on any and all matters on which holders of the company common stock are entitled to vote on an “as if” converted basis. Additionally, so long as any 5% convertible preferred stock remains outstanding, without the affirmative approval of the holders of at least a majority of the shares of 5% convertible preferred stock then outstanding, we shall not, directly or indirectly (including through merger or consolidation with any other corporation), and shall not permit any of our subsidiaries to: 
		

		
			(1)  authorize or approve the issuance of any senior securities, 5% convertible preferred stock, or parity securities (or, in each case, any security convertible into, or convertible or exchangeable therefor or linked thereto) or authorize or create or increase the authorized amount of any senior securities, 5% convertible preferred stock or parity securities (or, in each case, any security convertible into, or convertible or exchangeable therefor or linked thereto);  
		

		
			(2)  authorize or approve the purchase or redemption of any parity securities or junior securities;  
		

		
			(3)  amend, alter or repeal any of the provisions of the certificate of designations, our Certificate of Incorporation or our Bylaws in a manner that would adversely affect the powers, designations, preferences and rights of the 5% convertible preferred stock;  
		

		

		

		 

 

		 (4)  contract, create, incur, assume or suffer to exist any indebtedness or guarantee any such indebtedness with an aggregate value of more than $5,000,000 (subject to certain exceptions); or  
		

		
			(5)  agree to take any of the foregoing actions. 
		

		
			        The certificate of designations governing the 5% convertible preferred stock also provides that no amendment or waiver of any provision of the certificate of designations or our Certificate of Incorporation or Bylaws shall, without the prior written consent of all holders of the 5% convertible preferred stock who are known to us to hold, together with their affiliates, more than 5% of the 5% convertible preferred stock then outstanding, (i) reduce any amounts payable or that may become payable to holders of the 5% convertible preferred stock, (ii) postpone the payment date of any amount payable to holders of the 5% convertible preferred stock or waive or excuse any payment, (iii) modify or waive the conversion rights of the 5% convertible preferred stock in a manner that would adversely affect any holder of the 5% convertible preferred stock, or (iv) change any of the voting-related provisions or any other provision of the certificate of designations specifying the number or percentage of holders of the 5% convertible preferred stock which are required to waive, amend or modify any rights under the certificate of designations or make any determination or grant any consent under that document. 
		

		
			Registration Rights 
		

		
			The holders of the 5% convertible preferred stock were granted registration rights, subject to customary cutbacks, blackout periods and other exceptions, for all shares of our common stock issued or issuable upon conversion of the 5% convertible preferred stock, including (a) two demand registrations at any time after the expiration of 180 days from the closing of our initial public offering, (b) unlimited piggyback rights and (c) the right to require filing of a resale S-3 registration statement (once we became eligible to file on such form) and maintenance of its effectiveness on an “evergreen” basis until such time as there are no longer any registrable securities. 
		

		
			Anti-Takeover Effects of Provisions of Our Certificate of Incorporation and Bylaws and Delaware Law 
		

		
			The provisions of the DGCL and our Certificate of Incorporation and Bylaws could have the effect of discouraging others from attempting an unsolicited offer to acquire our company. Such provisions may also have the effect of preventing changes in our management. It is possible that these provisions could make it more difficult to accomplish transactions that stockholders may otherwise deem to be in their best interests. 
		

		
			Election and Removal of Directors.  Our directors are elected until the expiration of the term for which they are elected and until their respective successors are elected. Our directors may be removed only by the affirmative vote of at least a majority of the holders of our then outstanding common stock. This system of electing and removing directors generally makes it more difficult for stockholders to replace a majority of our directors. For more information on our board of directors, see the section entitled “Corporate Governance” in our Definitive Proxy Statement dated as of April 2, 2019. 
		

		
			Authorized but Unissued Shares.  The authorized but unissued shares of our common stock and our preferred stock are available for future issuance without any further vote or action by our stockholders. These additional shares may be utilized for a variety of corporate purposes, including future public offerings to raise additional capital, corporate acquisitions and employee benefit plans. The existence of authorized but unissued shares of our common stock and our preferred stock could render more difficult or discourage an attempt to obtain control over us by means of a proxy contest, changes in our management, tender offer, merger or otherwise. 
		

		
			Stockholder Action; Advance Notification of Stockholder Nominations and Proposals.  Our Certificate of Incorporation and Bylaws require that any action required or permitted to be taken by our stockholders must be effected at a duly called annual or special meeting of stockholders and may not be effected by a consent in writing. Our Certificate of Incorporation and Bylaws also require that special meetings of stockholders be called only by our board of directors, the Chairman of our board of directors or our Chief Executive Officer. In addition, our Bylaws provide that candidates for director may be nominated and other business brought before an annual meeting only by the board of directors or by a stockholder who gives written notice to us no later than 90 days prior to nor earlier than 120 days prior to the first anniversary of the last annual meeting of stockholders. These provisions may have the effect of deterring unsolicited offers to acquire our company or delaying changes in our management, which could depress the market price of our common stock. 
		

		

		

		 

 

		Delaware Anti-Takeover Law.  Our Certificate of Incorporation provides that Section 203 of the DGCL, an anti-takeover law, applies to us. In general, Section 203 prohibits a publicly held Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years following the date the person became an interested stockholder, unless the “business combination” or the transaction in which the person became an interested stockholder is approved in a prescribed manner. Generally, a “business combination” includes a merger, asset or stock sale, or other transaction resulting in a financial benefit to the interested stockholder. Generally, an “interested stockholder” is a person who, together with affiliates and associates, owns or, within three years prior to the determination of interested stockholder status, did own, 15% or more of a corporation’s voting stock. 
		

		
			Limitation of Liability and Indemnification 
		

		
			Our Certificate of Incorporation provides that no director will be personally liable for monetary damages for breach of any fiduciary duty as a director, except with respect to liability: 
		

			
					
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						·  

					
					
						 

					
					
						for any breach of the director’s duty of loyalty to us or our stockholders;

				
	
					
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						for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law;

				

			
					
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						·  

					
					
						 

					
					
						under Section 174 of the DGCL (governing distributions to stockholders); or

				
	
					
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						for any transaction from which the director derived any improper personal benefit.

				

		
			If the DGCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of our directors will be eliminated or limited to the fullest extent permitted by the DGCL, as so amended. The modification or repeal of this provision of our Certificate of Incorporation will not adversely affect any right or protection of a director existing at the time of such modification or repeal. 
		

		
			Our Bylaws also provide that we will, to the fullest extent permitted by law, indemnify our directors and officers against all liabilities and expenses in any suit or proceeding or arising out of their status as an officer or director or their activities in these capacities. We also indemnify any person who, at our request, is or was serving as a director, officer, employee, agent or trustee of another corporation or of a partnership, limited liability company, joint venture, trust or other enterprise. We may, by action of our board of directors, provide indemnification to our employees and agents within the same scope and effect as the foregoing indemnification of directors and officers. 
		

		
			Exclusive Forum 
		

		
			Our Certificate of Incorporation provides that the Court of Chancery of the State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum for any (i) derivative action or proceeding brought on behalf of our company, (ii) action asserting a claim of breach of a fiduciary duty owed by any director or officer of our company to our company or our company’s stockholders, (iii) action asserting a claim against our company arising pursuant to any provision of the DGCL or our Certificate of Incorporation or our Bylaws or (iv) action asserting a claim against our company governed by the internal affairs doctrine. This exclusive forum provision would not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. In addition, Section 22 of the Securities Act 1933, as amended (the “Securities Act”), creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. As a result, there is uncertainty as to whether a court would enforce our forum selection clause in connection with claims arising under the Securities Act or the rules and regulations thereunder. 
		

		
			Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of our company shall be deemed to have notice of and consented to the forum provisions in our Certificate of Incorporation. However, the enforceability of similar forum provisions in other companies’ certificates of incorporation has been challenged in legal proceedings, and it is possible that a court could find these types of provisions to be unenforceable.Exhibit 10.29

		
			EXHIBIT 10.29
		

		
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			EMPLOYMENT AGREEMENT
		

		
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			This EMPLOYMENT AGREEMENT, dated as of November 19, 2019 (the “Agreement”), is entered into between Kadmon Corporation, LLC, a Delaware limited liability company (the “Company”), and Harlan W. Waksal, M.D., an individual with a place of domicile of [ADDRESS REDACTED] (the “Employee”).  Each of Company and Employee a “Party” and collectively, the “Parties”.
		

		
			WHEREAS, the Parties have previously entered into that certain Employment Agreement dated as of November 1, 2015 (as amended, the “Previous Agreement”)); and
		

		
			WHEREAS, the Parties now wish to supersede in its entirety the Previous Agreement, effective as of January 1, 2020 (the “Effective Date”), by entering in this Agreement.
		

		
			NOW, THEREFORE, in consideration of the Employee’s employment by the Company, and for other good and valuable consideration set forth herein, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
		

			
	
			
				 1.
			

			
	
			
			Employment. The Employee shall be employed as President and Chief Executive Officer, and shall have the duties, responsibilities and authority as may from time to time be assigned to him by the Board of Directors (the “Board”) of Kadmon Holdings, Inc., the Company’s parent company, that are consistent with such positions in a company of the size and nature of the Company. The Employee will report to the Board and shall, separate and aside from his roles as President and Chief Executive Officer, serve as a member of the Board, which appointment has been previously voted upon and approved in accordance with the Company’s organization documents. The Employee agrees while he is employed by the Company to devote his full business time and attention to the activities of the Company and to not engage in other employment without the prior written consent of the Board. The Employee agrees to perform his duties hereunder diligently and to use his best efforts, skill and ability to promote the interests of the Company and its affiliates.

		
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				 2.
			

			
	
			
			Term. The term of the Employee’s employment under this Agreement shall be effective as of the date hereof and shall continue until terminated by either party in accordance with Section 5 hereof (the “Term”). Upon termination for any reason, the Parties agree that the provisions of Sections 4 and 5 shall survive, and Employee’s service on the Company’s Board shall survive subject to and in accordance with the Company’s organizational documents.

		
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				 3.
			

			
	
			
			Compensation and Benefits

			
	
			
				 a)
			

			
	
			
			Base Salary. Beginning as of the Effective Date, the Company shall pay the Employee a base salary at the rate of $600,000.00 per year (the “Base Salary”). All salary shall be paid in accordance with the Company’s regular payroll schedule and subject to required withholdings. 

			
	
			
				 b)
			

			
	
			
			Discretionary Bonus. Employee will be eligible for a year-end target bonus of 60% of the Base Salary (“Target Bonus”), based on Company performance and Employee performance. The evaluation of both Company performance and Employee performance, and the amount of any bonus paid hereunder (the “Discretionary Bonus”), will be at the discretion of the Board’s Compensation Committee, and no guarantees relating to such cash bonus are being made by the Company. Employee must be employed on the date the bonus is paid in order to receive any Discretionary Bonus described hereunder.

			
	
			
				 c)
			

			
	
			
			Incentive Compensation. The Employee will be entitled to participate in the Company’s annual, year-end incentive compensation plans, subject to the terms of such plans. The decision as to the amounts of any incentive compensation, including grants of equity, to be awarded shall be made by the Company, but in any event shall be consistent in type and amount as are given to other members of executive management generally. 

			
	
			
				 d)
			

			
	
			
			Benefits. The Employee will be entitled to coverage under or participation in all benefit plans provided to members of executive management of the Company. The Company may, in its sole discretion, at any time amend or terminate its benefit plans. The Employee shall be entitled to no 
		

		 

 

			fewer than four weeks of paid vacation per calendar year, to be used in accordance with the Company’s then-current vacation policies.

			
	
			
				 e)
			

			
	
			
			Reimbursements.  In connection with your employment, the Company agrees to reimburse you for business-related expenses incurred in the ordinary course of business, and separately to reimburse you for travel expenses incurred during the Term for travel between the Company’s office(s) and Employee’s residence in Florida.  All reimbursements under this paragraph shall be subject to the Company’s travel and expense policy in effect at the time the expense is incurred.  Employee shall be responsible for any income tax or other tax due in connection with any taxable reimbursement provided under this paragraph.

		
			 
		

			
	
			
				 4.
			

			
	
			
			Covenants

			
	
			
				 a)
			

			
	
			
			Return of Documents. Immediately upon the Company’s request or promptly upon the end of the Employee’s employment, for whatever reason, the Employee shall deliver to the Company any property of the Company or any of its affiliates (including, but not limited to, documents prepared or made by the Employee) which may be in the Employee’s possession, including, but not limited to, materials, memoranda, notes, records, reports, designs, sketches, plans, programs, printouts, or other documents as well as all copies thereof and files related thereto.

			
	
			
				 b)
			

			
	
			
			Confidentiality. The Employee agrees to hold all Proprietary Information (as defined below) in strict confidence during the term of and following the Employee’s employment under this Agreement. “Proprietary Information” includes, by way of example but without limitation, the following information relating to the Company or any of its affiliates or any customer, client or business partner of the Company or any of its affiliates:

			
	
			
				i.
			

			
	
			
			working methods and operations, methodologies, marketing plans and strategies (including internal and external growth strategies), sales and financial reports, customer lists, trade secrets, copyrightable materials, patentable materials, programs, processes, plans, product ideas, techniques, designs, models, formulas, data, know-how and other information used in research, developmental, marketing, sales, and operational activities; and

			
	
			
				ii.
			

			
	
			
			any commercial or technical information, improvements, or things which may be communicated to the Employee or which the Employee may learn by virtue of his employment by the Company, or of which the Employee may have gained knowledge, or discovered, invented, or perfected while employed by the Company, including without limitation any ideas or processes relating to the development, operation, or improvement of any software or other program, product or proposed product, tool, article, or process sold, licensed, distributed, maintained or contemplated by the Company or any of its affiliates (or their respective customers).

		
			Notwithstanding the foregoing, Proprietary Information shall not include information that (a) is publicly known as of the date of this Agreement or (b) becomes publicly known after the date of this Agreement other than by means in violation of this Agreement or another obligation of confidentiality.
		

		
			The Employee agrees to never, directly or indirectly, disclose or otherwise communicate to any person, firm, corporation, or other entity or to use for himself (except while the Employee is employed by the Company, and solely in pursuit of his activities as an employee of the Company), any Proprietary Information.
		

			
	
			
				 c)
			

			
	
			
			Developments. The Employee agrees to disclose promptly to the Company any and all Developments (as defined below) which are made, invented, developed or discovered by the Employee, either singly or jointly with others, in the course of his employment by the Company, including upon termination of such employment. The Employee also agrees that such Developments are works made for hire and are or shall become the exclusive property of the Company, and that he hereby relinquishes and assigns any and all intellectual property rights and or other rights in the Developments to the Company, including, by way of example, but without limitation, rights of identification or authorship and rights of approval with respect to modifications and limitations on subsequent modifications. In order to effectuate ownership by the Company when necessary, the Employee agrees, without further consideration:

		 

 

			
	
			
				i.
			

			
	
			
			to immediately upon the Company’s request execute all documents and make all assignments necessary to vest title to such Developments in the Company;

			
	
			
				ii.
			

			
	
			
			to assist the Company in any reasonable manner to obtain for the benefit of the Company any patents or copyright applications on such Developments, in any and all countries; and

			
	
			
				iii.
			

			
	
			
			to execute when requested any and all patent and copyright applications and any other lawful documents deemed necessary by the Company to carry out the purposes of this Agreement.

		
			“Developments” include, by way of example but without limitation, the following: any and all inventions, improvements, discoveries, developments, results of research, or useful ideas, whether or not patentable, which relate in any manner to any products, work, or other business or proposed business of the Company or one of its affiliates or any customer, client or business partner of the Company or one of its affiliates, or to any process, apparatus, formulas, equipment, or article worked on in connection with the Employee’s employment by the Company.
		

			
	
			
				 5.
			

			
	
			
			Termination

			
	
			
				 a)
			

			
	
			
			Death or Disability.  The Employee’s employment hereunder shall terminate immediately upon his death or upon 30 days written notice by the Company to the Employee that the Employee’s employment has been terminated due to the Employee’s Disability.  For the purposes of this Agreement, “Disability” shall mean upon the earlier of: (i) the date Employee becomes entitled to receive disability benefits under the Company’s long-term disability plan; or (ii) the determination by the Board that the Employee is physically or mentally incapacitated or impaired and has been unable, for a period of at least 90 consecutive days, to perform the duties and responsibilities contemplated under this Agreement, even with a reasonable accommodation.

			
	
			
				 b)
			

			
	
			
			Termination for Cause.  Employment with the Company may be terminated by the Board immediately for Cause. In this context the term “Cause” shall mean: (i) the Employee’s conviction of a felony; (ii) any material misconduct by the Employee with respect to the Company, any affiliate of the Company, or any of their respective employees, customers, clients, business partners or suppliers; (iii) in carrying out his duties and responsibilities set forth herein, refusal, neglect or failure by the Employee to carry out, in all material respects, the legal instructions of the Board; (iv) a material breach by the Employee of any term or provision of Section 4 of this Agreement; or (v) the Employee’s failure to comply in all material with the internal policies or procedures of the Company or its affiliates, or any laws or regulations applicable to Employee’s conduct as an employee of the Company; which in each case of clauses (ii) to (v) above, remains uncured by the Employee for 5 days following receipt by the Employee of written notice of same, which notice shall include reasonable detail as to the nature of the potential resulting Cause.  However, no notice and opportunity to cure shall be required in the event of conduct by the Employee that the Company reasonably believes cannot be adequately cured.

			
	
			
				 c)
			

			
	
			
			Termination Without Cause.  Employment may be terminated by the Board without Cause, at any time, without prior notice.

			
	
			
				 d)
			

			
	
			
			Resignation by Employee for Good Reason.  Employee may resign from his employment hereunder at any time if Employee has Good Reason. For purposes of this Agreement, the term “Good Reason” shall mean: (i) any material diminution in Employee’s duties or responsibilities hereunder (other than in connection with a termination of Employee’s employment), which remains uncured by the Company for 5 days following receipt by the Company of written notice of same, which notice shall include reasonable detail as to the nature of the potential resulting Good Reason; (ii) a material diminution in Employee’s Base Salary; or (iii) a relocation of the Company’s principal place of business outside New York City.

			
	
			
				 e)
			

			
	
			
			Resignation by Employee Without Good Reason.  Employee may resign from his employment hereunder without Good Reason at any time upon written notice to the Company. Following any such notice, the Company may reduce or remove any and all of Employee’s duties, authority or responsibilities with the Company, and any such reduction or removal shall not constitute Good Reason.

			
	
			
				 f)
			

			
	
			
			Effect of Termination.  In the event that the Employee’s employment hereunder is terminated for Cause, or Employee resigns without Good Reason, the Company shall pay the Employee his Base Salary through the date of such termination and any unreimbursed business expense (in accordance 
		

		 

 

			with Company policy). In the event that the Employee’s employment hereunder is terminated without Cause, or Employee resigns with Good Reason, and provided that Employee first signs and does not revoke any portion of a comprehensive release of claims against the Company, and its current and former affiliated entities and individuals, in a customary form drafted by the Company, the Company shall pay the Employee severance in an amount equal to his Base Salary and an amount equal to the greater of his Target Bonus or the previous year’s Discretionary Bonus (collectively, the “Severance”).  This Severance will be combined together and paid in in equal installments, and in accordance with the Company’s regular payroll schedule, and subject to required withholdings, over the one-year period following the expiration of a seven-day revocation period set forth in the comprehensive release of claims, provided, however, that in the event Employee becomes employed by another entity or individual (and not self-employed) during that one-year period, he will so notify the Company, and such employment will end the Company’s obligation to make any further severance payments.

			
	
			
				 g)
			

			
	
			
			Benefits.  Subject to Employee’s timely election of continuation coverage under COBRA, the Company will continue payment of Employee’s medical, dental and vision insurance coverage during the twelve (12) month period following the first day of the month following the date of termination or resignation (the “Coverage Period”) to the same extent that the Company paid for such coverage immediately prior to the date of termination or resignation, in a manner intended to avoid any excise tax under Section 4980D of the Internal Revenue Code of 1986, as amended (the “Code”), subject to the eligibility requirements and other terms and conditions of such insurance coverage, provided that Employee first signs and does not revoke any portion of a comprehensive release of claims against the Company, and its current and former affiliated entities and individuals, in a form drafted by the Company, and provided further that in the event Employee becomes employed by another entity or individual (and not self-employed) during that one-year period, he will so notify the Company, and such employment will end the Company’s obligation to continued payments for medical, dental, and vision insurance coverage.  If Employee fails to sign or revokes any portion of a comprehensive release of claims against the Company, the Employee’s accrual of or participation in plans providing for medical, dental and vision insurance benefits will cease at the end of the Term, unless Employee properly and timely elects to continue medical, dental and vision insurance coverage in accordance with the continuation requirements of COBRA and pays the applicable premiums for such coverage.  The Employee will not receive, as part of his termination pay pursuant to this Section 5, any payment or other compensation for any sick leave or other leave unused on the date the notice of termination or resignation is given, (or on the date the termination or resignation is otherwise effective in the event no notice is required), under this Agreement.

		
			﻿
		

			
	
			
				 6.
			

			
	
			
			Miscellaneous

			
	
			
				 a)
			

			
	
			
			Governing Law.  This Agreement will be governed by the laws of the State of New York without regard to the conflict of laws principles.

			
	
			
				 b)
			

			
	
			
			Arbitration.  The Parties agree that any dispute arising under or concerning this Agreement, the Employee’s employment by the Company or any related entity, or any compensation or benefits claimed by the Employee, shall be resolved solely in a confidential proceeding before a single arbitrator in New York, New York.  The arbitration will be conducted pursuant to the then current rules of the American Arbitration Association for the resolution of employment disputes.  Neither Party will bring any publicity to the arbitration, including, without limitation, the existence of a dispute, any claims or defenses raised in arbitration, or the arbitration award.  However, either Party may bring an action to enforce an arbitration award in the event the other Party refuses to comply with the arbitration award within thirty (30) days following its issuance.   

			
	
			
				 c)
			

			
	
			
			Notices.  All notices, consents, waivers and other communications under this Agreement must be in writing and will be deemed to have been duly given when (i) delivered by hand (with written confirmation of receipt), (ii) sent by email (with written confirmation of receipt), provided that a copy is mailed by registered mail, return receipt requested, or (iii) when received by the addressee, if sent by a nationally recognized overnight delivery service (receipt requested), in each case to the appropriate addresses and facsimile numbers of the Company and Employee as set forth in the records of the Company.

			
	
			
				 d)
			

			
	
			
			Section Headings: Construction. The headings of sections in this Agreement are provided for convenience only and will not affect its construction or interpretation. All references to “Section” 
		

		 

 

			or “Sections” refer to the corresponding Section or Sections of this Agreement unless otherwise specified. All words used in this Agreement will be construed to be of such gender or number as the circumstances require. Unless otherwise expressly provided, the word -including” does not limit the preceding words or terms.

			
	
			
				 e)
			

			
	
			
			Amendments; Entire Agreement; Successors and Assigns. Neither this Agreement nor any term hereof may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the Party against which enforcement of such change, waiver, discharge or termination is sought. This Agreement embodies the entire agreement and the understanding among the Parties, superseding all prior agreements and understandings relating to the subject matter hereof, except the confidentiality and invention assignment agreement between you and the Company, any equity or equity-based or linked award agreements outstanding as of the Effective Date, and any Company employee benefit plan outstanding as of the Effective Date. Employee understands and agrees that this Agreement shall govern his employment with the Company and its related entities, and shall supersede in its entirety any other form of agreement, written or oral, relating to Employee’s employment with the Company, except for the agreements and plans set forth in the preceding sentence . If any provision of this Agreement shall be held illegal, invalid or unenforceable, in whole or in part, such provision shall be modified to the minimum extent necessary to make it legal, valid and enforceable, and the legality, validity and enforceability of the remaining provisions shall not be affected thereby. This Agreement shall be binding upon the Company’s successors and assigns.

			
	
			
				 f)
			

			
	
			
			Non-Disparagement. The Company’s officers and directors and the Employee agree that, during the Term and thereafter (including following the end of Employee’s employment for any reason) neither Party will make any statements or representations, or otherwise communicate, directly or indirectly, in writing, orally, or otherwise, or take any action that may, directly or indirectly, disparage the other Party.  Nothing in this paragraph shall prohibit the Employee or the Company, or its officers or directors, from bringing an action under Section 6(b) above and providing truthful information or making truthful statements in connection with such action, or with providing truthful information or making truthful statements in connection with a subpoena or other legal process.

			
	
			
				 g)
			

			
	
			
			Representations. The Employee represents and warrants to the Company that (i) the execution, delivery and performance of this Agreement by the Employee does not and will not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which the Employee is a party or by which the Employee is bound, (ii) the Employee has had the opportunity to review the covenants contained in Section 4 with counsel, that said covenants were the result of negotiation between the parties, and that he desires to be bound by the covenants in order to obtain the compensation provided by this Agreement and (iii) upon the execution and delivery of this Agreement by the Company, this Agreement shall be the valid and binding obligation of the Employee, enforceable in accordance with its terms. The Company represents and warrants to the Employee that (i) the execution, delivery and performance of this Agreement by the Company does not and will not conflict with, breach, violate or cause a default under any its organizational documents or any contract, agreement, instrument, order, judgment or decree to which the Company is a party or by which the Company is bound, (ii) this Agreement has been duly authorized by all requisite limited liability company action on the part of the Company and (iii) upon the execution and delivery of this Agreement by the Employee, this Agreement shall be the valid and binding obligation of the Company, enforceable in accordance with its terms.

			
	
			
				 h)
			

			
	
			
			Confidentiality of this Agreement. The Employee agrees to keep confidential the terms of this Agreement. This provision does not prohibit the Employee from providing this information to the Employee’s attorneys or accountants for purposes of obtaining legal or tax advice or as required by law; provided that such persons are informed of the confidential nature of such information and the Employee shall be responsible for breaches of the confidentiality restrictions contained herein by such persons as if the Employee had breached such restrictions. The Company shall not disclose the terms of this Agreement except as necessary in the ordinary course of its business, as required by law or as required by any governmental or quasi-governmental entity or any self-regulatory organization.

			
	
			
				 i)
			

			
	
			
			Cooperation. Following termination of employment with the Company for any reason, the Employee shall cooperate with the Company, as requested by the Company, to effect a transition of 
		

		 

 

			the Employee’s responsibilities and to ensure that the Company is aware of all matters being handled by the Employee.

			
	
			
				 j)
			

			
	
			
			Counterparts. This Agreement may be executed in separate counterparts, each of which shall be deemed to be an original and both of which taken together shall constitute one and the same agreement.

			
	
			
				 k)
			

			
	
			
			Section 409A and Taxes.    All forms of compensation paid to you by the Company, including any payments made pursuant to this Agreement, are subject to reduction (or payment by you, to the extent that additional amounts are required) to reflect applicable withholding and payroll taxes and other applicable deductions. You agree that the Company does not have a duty to design its compensation policies in a manner that minimizes your tax liabilities, and you will not make any claim against the Company related to tax liabilities arising from your compensation.  The payments and benefits under this Agreement are intended, and will be construed, to be exempt from or comply with Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”); provided, however, that nothing in this Agreement shall be construed or interpreted to transfer any liability for any tax (including a tax or penalty due as a result of a failure to comply with Section 409A) from you to the Company or to any other entity or person. Any payment to you under this Agreement that is subject to Section 409A and that is contingent on a termination of employment is contingent on a “separation from service” within the meaning of Section 409A. If, upon separation from service, you are a “specified employee” within the meaning of Section 409A, any payment under this Agreement that is subject to Section 409A and triggered by a separation from service and would otherwise be paid within six months after your separation from service will instead be paid in the seventh month following your separation from service or, if earlier, upon your death (to the extent required by Section 409A(a)(2)(B)(i)). Any taxable reimbursement due under the terms of this Agreement shall be paid no later than December 31 of the year after the year in which the expense is incurred, and all taxable reimbursements and in-kind benefits shall be provided in accordance with Treas. Reg. § 1.409A-3(i)(1)(iv). The parties agree that if necessary to avoid non-compliance with Section 409A, they will cooperate in good faith to modify the terms of this Agreement or any applicable equity award, provided, that such modification shall endeavor to maintain the economic intent of this Agreement or any such equity award.

		
			﻿
		

		
			IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the date first written above.
		

		
			KADMON CORPORATION, LLC
		

		
			﻿
		

		
			By: /s/ Tasos G. Konidaris 
		

		
			Tasos G. Konidaris
		

		
			Chairman of the Board
		

		
			
Date: 11/19/2019
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			/s/ Harlan W. Waksal    
		

		
			Harlan W. Waksal, M.D.
		

		
			Date: 11/19/2019

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