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Related Party Transactions
12 Months Ended
Dec. 31, 2017
Related Party Transactions [Abstract]  
Related Party Transactions

19. Related Party Transactions

At December 31, 2016, Kadmon I held approximately 12.1% of the total outstanding common stock of Kadmon Holdings. The sole manager of Kadmon I was an executive officer of the Company. Kadmon I has no special rights or preferences in connection with its investment into Kadmon Holdings, and had the same rights as all other holders of Kadmon Holdings Class A units. On January 23, 2017, Kadmon I, LLC was dissolved and liquidated. Upon dissolution and liquidation, all assets of Kadmon I, LLC which consists solely of the shares of common stock in Kadmon Holdings, Inc., were distributed to the members of Kadmon I, LLC.

During 2014 the Chief Executive Officer and member, a family member of the Chief Executive Officer and member and an executive officer provided the Company with short‑term, interest‑free loans to meet operating obligations. During this time the maximum amount which was outstanding in the aggregate was $3.5 million and was recorded as a related party loan on the Company’s balance sheet. The $0.5 million related party loan with a family member of the Chief Executive Officer and member was settled in January 2015 through the issuance of 43,478 Class E redeemable convertible units. At December 31, 2015, the $3.0 million related party loan with the Chief Executive Officer and director was still outstanding and was repaid in full during the fourth quarter of 2016.

In April 2015, the Company executed several agreements which transferred the Company’s ownership of KGT to MeiraGTx, a then wholly‑owned subsidiary of the Company. The execution of all these agreements resulted in a 48% ownership in MeiraGTx by the Company, or a $24.0 million equity investment at the time of the initial transaction (Note 12).

In July and August 2015, a family member of the Chief Executive Officer and member provided the Company with interest‑free loans totaling $2.0 million. The loans were repaid in full in August 2015.

In September 2015, the Company entered into an agreement with GoldenTree Asset Management LP and certain of its affiliated entities in connection with (i) a settlement of certain claims alleging breaches of a letter agreement between the Company and such entities relating to a prior investment by such entities in the Company’s securities, which letter agreement was terminated as part of this settlement and (ii) participation by such entities in an aggregate amount of $15.0 million in the 2015 Credit Agreement, including the warrants issued in connection therewith, and the Senior Convertible Term Loan (the GoldenTree Agreement). Subject to certain terms and conditions contained therein, the GoldenTree Agreement provided GoldenTree Asset Management LP and certain of its affiliated entities with certain most favored nation rights, anti‑dilution protections including the issuance of additional Class E redeemable convertible membership units with a conversion price equal to any down round price and a right to appoint a member of the Company’s board of directors, among other things. The aforementioned rights terminated upon the closing of the IPO on August 1, 2016.

In June 2016, the Company entered into an agreement with 72 KDMN Investments, LLC whereby the Company agreed to extend certain rights to 72 KDMN Investments, LLC which shall survive closing of the IPO, including board of director designation rights and confidentiality rights, subject to standard exceptions. In addition, the Company agreed to provide 72 KDMN Investments, LLC with most favored nation rights which terminated upon the closing of the IPO on August 1, 2016. Andrew B. Cohen, a former member of our board of directors, is an affiliate of 72 KDMN. In January 2017, Mr. Cohen resigned from the Company’s board of directors and the Company received notice that 72 KDMN forfeits, relinquishes and waives any and all rights it has to designate a director to the Company’s board of directors.

In June 2016, Dr. Harlan W. Waksal, the Company’s President and Chief Executive Officer, certain entities affiliated with GoldenTree Asset Management LP, Bart M. Schwartz, the chairman of the Company’s board of directors, 72 KDMN and D. Dixon Boardman, a member of the Company’s board of directors, subscribed for 86,957,  43,479,  21,740,  86,957 and 21,740 of the Company’s Class E redeemable convertible units, respectively, at a value of $11.50 per unit.

In June 2016, the Company entered into certain agreements with Falcon Flight LLC and one of its affiliates in connection with a settlement of certain claims alleging breaches of a letter agreement between the Company and Falcon Flight LLC relating to a prior investment by Falcon Flight LLC and its affiliate in the Company’s securities, which letter agreement was amended and restated as part of this settlement, which, together with a supplemental letter agreement, we refer to as the Falcon Flight Agreement. Subject to certain terms and conditions contained therein, the Falcon Flight Agreement provides Falcon Flight LLC and its affiliate with certain most favored nation rights, information rights, consent rights, anti‑dilution protections including the issuance of 1,061,741 additional Class E redeemable convertible membership units with a conversion price equal to any down‑round price, a right to designate a member of the Company’s board of then managers or observer and notice requirements with respect to any waivers by the underwriters in connection with lock‑up agreements, among other things. The aforementioned rights terminated upon the closing of the IPO on August 1, 2016, except for indemnification of Falcon Flight LLC’s board designee or observer, which survives termination. In addition, the Company agreed to pay $0.5 million to Falcon Flight LLC within one business day following the consummation of the IPO, and $0.3 million within sixty days following the consummation of the IPO. The Company recorded an estimate for this settlement of approximately $10.4 million in September 2015 and recorded an additional expense of $2.6 million in June 2016 based on the excess of the fair value of this settlement over the $10.4 million previously expensed in 2015.



Certain of the Company’s existing institutional investors, including investors affiliated with certain of the Company’s directors, purchased an aggregate of 2,708,332 shares of the Company’s common stock in its IPO at the IPO price of $12.00 per share, for an aggregate purchase price of $32.5 million, and on the same terms as the shares that were sold to the public generally. Perceptive Advisors, LLC, Third Point Partners, LLC. and GoldenTree purchased 1,458,333 shares of the Company’s common stock for $17.5 million, 1,041,666 shares of the Company’s common stock for $12.5 million and 208,333 shares of the Company’s common stock for $2.5 million, respectively.