KADMON HOLDINGS, INC. STOCK APPRECIATION RIGHT AGREEMENT

1. Definitions and Construction.

1.1 Definitions.  Unless otherwise defined herein, capitalized terms shall have the meanings assigned to such terms in the Grant Notice or the Plan.

1.2 Construction.  Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of this SAR Agreement.  Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular.  Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.

2. Administration.

3. Exercise of the SAR.

3.1 Right to Exercise.  Except as otherwise provided herein, the SAR shall be exercisable on and after the Applicable Vesting Date and prior to the termination of the SAR (as provided in Section 5) in an amount as set forth below under Section 3.3.  In no event shall the SAR be exercisable for more shares than the Number of SAR Shares, as adjusted pursuant to Section 8.

3.2 Method of Exercise.  Exercise of the SAR shall be by means of electronic or written notice (the “Exercise Notice”) in a form authorized by the Company.  An electronic Exercise Notice must be digitally signed or authenticated by the Participant in such manner as required by the notice and transmitted to the Company or an authorized representative of the Company (including a third-party administrator designated by the Company).  In the event that the Participant is not authorized or is unable to provide an electronic Exercise Notice, the SAR shall be exercised by a written Exercise Notice addressed to the Company, which shall be signed by the Participant and delivered in person, by certified or registered mail, return receipt requested, by confirmed facsimile transmission, or by such other means as the Company may permit, to the Company, or an authorized representative of the Company (including a third-party administrator designated by the Company).  Each Exercise Notice, whether electronic or written, must state the Participant’s election to exercise the SAR, the number of whole shares of Stock for which the SAR is being exercised and such other representations and agreements as to the Participant’s investment intent with respect to such shares as may be required pursuant to the provisions of this SAR Agreement.  Further, each Exercise Notice must be received by the Company prior to the termination of the SAR as set forth in Section 5.  The SAR shall be deemed to be exercised upon receipt by the Company of such electronic or written Exercise Notice and, subject to Section 3.4, the satisfaction of any tax withholding requirements.

3.3 Exercise of SARs.    Upon the exercise of the SAR, the Participant (or the Participant’s legal representative or other person who acquired the right to exercise the SAR by reason of the Participant’s death) shall be entitled to receive payment of an amount for each Vested Share with respect to which the SAR is exercised equal to the excess, if any, of the Fair Market Value of a share of Stock on the date of exercise of the SAR minus the Exercise Price.  Payment of such amount shall be made in cash, shares of Stock, or any combination thereof as determined by the Committee, in a lump sum upon the date of exercise of the SAR.  When payment is to be made in shares of Stock, the number of shares to be issued shall be determined on the basis of the Fair Market Value of a share of Stock on the date of exercise of the SAR.  For purposes of this Section 3.3, the SAR shall be deemed exercised on the date on which the Company receives the Participant’s Exercise Notice.

3.4 Tax Withholding.

(a) In General.  At the time the SAR is exercised, in whole or in part, or at any time thereafter as requested by a Participating Company, the Participant hereby authorizes withholding from payroll and any other amounts payable to the Participant, and otherwise agrees to make adequate provision for, any sums required to satisfy the federal, state, local and foreign tax (including any social insurance) withholding obligations of the Participating Company Group, if any, which arise in connection with the SAR (collectively, “Tax Withholding 

Obligations”).  The Company shall have no obligation to deliver shares of Stock or cash (or a combination thereof), as applicable, until the Tax Withholding Obligations of the Participating Company Group have been satisfied by the Participant.

(b) Withholding Requirement.    The Committee shall have the right, but not the obligation, to require the Participant to satisfy all or any portion of a Participating Company’s Tax Withholding Obligations upon exercise of the SAR by deducting from the shares of Stock (or the cash equivalent) otherwise issuable to the Participant upon such exercise a number of whole shares (or cash equivalent) having a Fair Market Value, as of the date of exercise, not in excess of the amount of such Tax Withholding Obligations.

3.5 Beneficial Ownership of Shares; Certificate Registration.  The Participant hereby authorizes the Company, in its sole discretion, to deposit for the benefit of the Participant with any broker with which the Participant has an account relationship of which the Company has notice any or all shares acquired by the Participant pursuant to the exercise of the SAR.  Except as provided by the preceding sentence, a certificate for the shares as to which the SAR is exercised shall be registered in the name of the Participant, or, if applicable, in the names of the heirs of the Participant.

3.6 Restrictions on Grant of the SAR and Issuance of Shares.  The grant of the SAR and the issuance of shares of Stock upon exercise of the SAR shall be subject to compliance with all applicable requirements of federal, state or foreign law with respect to such securities.  Shares of Stock will not be issued upon the exercise of the SAR if the issuance of shares of Stock upon exercise would constitute a violation of any applicable federal, state or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the Stock may then be listed or violate the terms of the Plan.  In addition, shares of Stock will not be issued upon the exercise of the SAR unless (i) a registration statement under the Securities Act shall at the time of exercise of the SAR be in effect with respect to the shares issuable upon exercise of the SAR or (ii) in the opinion of legal counsel to the Company, the shares issuable upon exercise of the SAR may be issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act.  THE PARTICIPANT IS CAUTIONED THAT THE SAR MAY NOT BE EXERCISED UNLESS THE FOREGOING CONDITIONS ARE SATISFIED.  ACCORDINGLY, THE PARTICIPANT MAY NOT BE ABLE TO EXERCISE THE SAR WHEN DESIRED EVEN THOUGH THE SAR IS VESTED.  The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of any shares subject to the SAR shall relieve the Company of any liability in respect of the failure to issue or sell such shares as to which such requisite authority shall not have been obtained.  As a condition to the exercise of the SAR, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company.

3.7 Fractional Shares.  The Company shall not be required to issue fractional shares upon the exercise of the SAR.

4. Nontransferability of the SAR.

5. Termination of the SAR.

6. Effect of Termination of Service.

6.1 SAR Exercisability.    Except as otherwise provided in this Section 6 and notwithstanding the terms of any employment agreement between a Participating Company and the Participant, the SAR shall terminate immediately upon Participant’s termination of Service to the extent that it is then unvested.  Upon the Participant’s termination of Service, the vested portion of the SAR shall be exercisable after the Participant’s termination of Service only during the applicable time period as determined below and thereafter shall terminate.

(a) Disability.  If the Participant’s Service terminates because of the Disability of the Participant, the SAR granted hereunder shall be deemed to have vested in its entirety, immediately, and to the extent unexercised by the Participant on the date on which the Participant’s Service terminated, may be exercised by the Participant (or the Participant’s guardian or legal representative) at any time prior to the expiration of twelve (12) months after the date on which the Participant’s Service terminated, but in any event no later than the SAR Expiration Date.

(b) Death.  If the Participant’s Service terminates because of the death of the Participant, the SAR granted hereunder shall be deemed to have vested in its entirety, immediately, and to the extent unexercised by the Participant on the date on which the Participant’s Service terminated, may be exercised by the Participant’s legal representative or other person who acquired the right to exercise the SAR by reason of the Participant’s death at any time prior to the expiration of twelve (12) months after the date on which the Participant’s Service terminated, but in any event no later than the SAR Expiration Date.

(c) Termination for Cause.  Notwithstanding any other provision of this SAR Agreement to the contrary, if the Participant’s Service is terminated for Cause or if, following the Participant’s termination of Service and during any period in which the SAR otherwise would remain exercisable, the Participant engages in any act that would constitute Cause, the SAR shall terminate in its entirety (whether vested or unvested) and cease to be

exercisable immediately upon such termination of Service or act.  For purposes hereof, “Cause” shall have the meaning defined in the Participant’s employment agreement.

(d) Other Termination of Service.  If the Participant’s Service terminates for any reason, except Disability, death or Cause, the SAR, to the extent unexercised and exercisable for Vested Shares by the Participant on the date on which the Participant’s Service terminated, may be exercised by the Participant at any time prior to the expiration of three (3) months after the date on which the Participant’s Service terminated, but in any event no later than the SAR Expiration Date.  Section 6.1 will apply with respect to any unvested shares.

6.2 Extension if Exercise Prevented by Law.  Notwithstanding the foregoing, other than termination of the Participant’s Service for Cause, if the exercise of the SAR within the applicable time periods set forth in Section 6.1 is prevented by the provisions of Section 3.6, the SAR shall, to the extent permitted by Section 409A of the Code, remain exercisable until the later of (a) thirty (30) days after the date such exercise first would no longer be prevented by such provisions, or (b) the end of the applicable time period under Section 6.1, but in any event no later than the SAR Expiration Date.

7. Effect of Change in Control.

8. Adjustments for Changes in Capital Structure.

9. Rights as a Stockholder, Director, Employee or Consultant.

10. Legends.

11. Miscellaneous Provisions.

11.1 Termination or Amendment.  The Committee may terminate or amend the Plan or the SAR at any time; provided, however, that except as provided in Section 7 in connection with a Change in Control, no such termination or amendment may have a materially adverse effect on the SAR or any unexercised portion thereof without the consent of the Participant unless such termination or amendment is necessary to comply with any applicable law or government regulation.  No amendment or addition to this SAR Agreement shall be effective unless in writing.

11.2 Further Instruments.  The parties hereto agree to execute such further instruments and to take such further action as may reasonably be necessary to carry out the intent of this SAR Agreement.

11.3 Binding Effect.  This SAR Agreement shall inure to the benefit of the successors and assigns of the Company and, subject to the restrictions on transfer set forth herein, be binding upon the Participant and the Participant’s heirs, executors, administrators, successors and assigns.

11.4 Delivery of Documents and Notices.  Any document relating to participation in the Plan or any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given (except to the extent that this SAR Agreement provides for effectiveness only upon actual receipt of such notice) upon personal delivery, electronic delivery at the e-mail address, if any, provided for the Participant by a Participating Company, or upon deposit in the U.S. Post Office or foreign postal service, by registered or certified mail, or with a nationally recognized overnight courier service, with postage and fees prepaid, addressed to the other party at the address of such party set forth in the Grant Notice or at such other address as such party may designate in writing from time to time to the other party.

(a) Description of Electronic Delivery.  The Plan documents, which may include but do not necessarily include: the Plan, the Grant Notice, this SAR Agreement, the Plan Prospectus, and any reports of the Company provided generally to the Company’s stockholders, may be delivered to the Participant electronically.  In addition, if permitted by the Company, the Participant may deliver electronically the Grant Notice and Exercise Notice called for by Section 3.2 to the Company or to such third party involved in administering the Plan as the Company may designate from time to time.  Such means of electronic delivery may include but do not necessarily include the delivery of a link to a Company intranet or the Internet site of a third party involved in administering the Plan, the delivery of the document via e-mail or such other means of electronic delivery specified by the Company.

(b) Consent to Electronic Delivery.  The Participant acknowledges that the Participant has read Section 11.4(a) of this SAR Agreement and consents to the electronic delivery of the Plan documents and, if permitted by the Company, the delivery of the Grant Notice and Exercise Notice, as described in Section 11.4(a).  The Participant acknowledges that he or she may receive from the Company a paper copy of any documents delivered electronically at no cost to the Participant by contacting the Company by telephone or in writing.  The Participant further acknowledges that the Participant will be provided with a paper copy of any

documents if the attempted electronic delivery of such documents fails.  Similarly, the Participant understands that the Participant must provide the Company or any designated third party administrator with a paper copy of any documents if the attempted electronic delivery of such documents fails.  The Participant may revoke his or her consent to the electronic delivery of documents described in Section 11.4(a) or may change the electronic mail address to which such documents are to be delivered (if the Participant has provided an electronic mail address) at any time by notifying the Company of such revoked consent or revised e-mail address by telephone, postal service or electronic mail.  Finally, the Participant understands that he or she is not required to consent to electronic delivery of documents described in Section 11.4(a).

11.5 Integrated Agreement.  The Grant Notice, this SAR Agreement and the Plan, together with the Superseding Agreement, if any, shall constitute the entire understanding and agreement of the Participant and the Participating Company Group with respect to the subject matter contained herein and supersede any prior agreements, understandings, restrictions, representations, or warranties among the Participant and the Participating Company Group with respect to such subject matter.  To the extent contemplated herein, the provisions of the Grant Notice, the SAR Agreement and the Plan shall survive any exercise of the SAR and shall remain in full force and effect.

11.6 Applicable Law.  This SAR Agreement shall be governed by the laws of the State of Delaware as such laws are applied to agreements between Delaware residents entered into and to be performed entirely within the State of Delaware.

11.7 Counterparts.  The Grant Notice may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.