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Exhibit 4.2.1
SYNTA PHARMACEUTICALS CORP.
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
THIS
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT (this
"Agreement")
dated as of December 13, 2002, is by and among Synta
Pharmaceuticals Corp., a
Delaware corporation (the "Company"), Robert A. Day and Mountain
Trail
Investments, LLC, (singly, a "DAY INVESTOR", and collectively, the
"DAY
INVESTOR"), Keith R. Gollust, Gollust Trust II, and Wyandanch
Partners, L.P.
(singly, a "GOLLUST INVESTOR", and collectively, the "GOLLUST
INVESTOR") and
Cxsynta LLC, an affiliate of Caxton Corporation (the "Caxton
Investor") (each an
"INVESTOR" and, collectively, the "INVESTORS").
Reference is hereby made to that certain Investor Rights Agreement
dated
May 16, 2002 by and between the Company and Cxsynta LLC, which
agreement is
hereby amended and restated in its entirety and shall be without
further force
or effect as of the date hereof
RECITALS
WHEREAS, the Investors have purchased the number of shares (the
"SHARES")
of the Common Stock, $.0001 par value, of the Company (the "COMMON
STOCK") set
forth opposite their respective names on SCHEDULE A hereto;
WHEREAS, concurrently with the execution of this Agreement, the
Investors
have executed the Amended and Restated Stockholders' Agreement of
even date
herewith (the "STOCKHOLDERS' AGREEMENT") with the Company pursuant
to which all
parties have agreed to provide for certain board of director
representation and
meeting requirements, co-sale rights and rights of first refusal
with respect to
the Common Stock; and
WHEREAS, the Company wishes to provide the Investors with
certain
information rights, registration rights and rights of first refusal
in
conjunction with the purchase of their respective Shares;
NOW,
THEREFORE, in consideration of the mutual covenants and
agreements
contained herein, and for other good and valuable consideration,
the receipt and
sufficiency of which are hereby acknowledged, the parties hereto
agree as
follows:
1. DEFINITIONS.
For purposes of this Agreement:
(a) The term
"AFFILIATE" means any general or limited partner of any
person that is a partnership, any member or manager of any person
that is a
limited liability company or any person or entity that, directly
or
indirectly, through one or more intermediaries, controls or is
controlled
by,
or is under common control with, such person.
(b) The term "ACT"
means the Securities Act of 1933, as amended, or
any
similar federal statute, and the rules and regulations of the SEC,
all
as
shall be in effect at the time.
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(c) The term "BUDGET"
has the meaning set forth in SECTION 3.3
hereof.
(d) The term "COMPANY
INDEMNIFIED PARTIES" has the meaning set forth
in
SECTION 2.6(a) hereof.
(e) The term "DEMAND
PERIOD" has the meaning set forth in SECTION
2.2(a) hereof.
(f) The term "FORM
S-3" means such form under the Act as in effect on
the
date hereof or any registration form under the act subsequently
adopted
by
the SEC that permits inclusion or incorporation of substantial
information by reference to other documents filed by the Company
with the
SEC.
(g) The term "GAAP"
means generally accepted accounting principles as
consistently applied by the Company.
(h) The term "HOLDER"
means any person owning or having the right to
acquire Registrable Securities, or any assignee thereof, in
accordance with
SECTION 2.8 hereof.
(i) The term "INITIAL
OFFERING" means the Company's first firm
commitment underwritten public offering of its Common Stock under
the Act.
(j) The term "1934
ACT" means the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and
regulations of
the
SEC, all as shall be in effect at the time.
(k) The term "NEW
SECURITIES" shall mean any equity securities of the
Company, whether now authorized or not, and rights, options, or
warrants to
purchase said equity securities, and securities of any type
whatsoever that
are,
or may become, convertible into said equity securities;
PROVIDED,
HOWEVER that "New Securities" does not include: (i) securities
offered to
the
public pursuant to an Initial Offering; (ii) securities issued
pursuant
to
the acquisition of another corporation or entity by the Company
by
merger, purchase of substantially all of the assets, or other
reorganization whereby the Company acquires a majority of the
voting power
of
such corporation or entity; (iii) up to ten million (10,000,000)
shares
of
Common Stock issued or issuable to employees, consultants or
directors
of
the Company pursuant to the Company's 2001 Stock Plan (including
shares
issued or issuable upon exercise of options previously granted),
which
number of shares may be adjusted upward by the affirmative vote of
the
Company's Board of Directors; (iv) up to three hundred sixty eight
thousand
eight hundred ninety four (368,894) shares of Common Stock issuable
to
employees of the Company pursuant to the Company's 2002 Employee
Stock
Purchase Plan; (v) securities issued to strategic partners of the
Company,
such
as biotechnology, pharmaceutical, drug manufacturing or
clinical
research companies; (vi) securities issued to licensors of
technology to
the
Company; or (vii) securities issued in connection with any bank
lines
of
credit, equipment lease transactions, or real estate transactions;
in
each
case as approved by the Company's Board of Directors.
(1) The term "NOTICE
OF ACCEPTANCE" has the meaning set forth in
SECTION 4.3
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hereof.
(m) The term "OFFER"
has the meaning set forth in SECTION 4.2 hereof.
(n) The term "PRO RATA
AMOUNT" has the meaning set forth in SECTION
4.1
hereof.
(o) The term "REFUSED
SECURITIES" has the meaning set forth in
SECTION 4.4 hereof.
(p) The term
"REGISTER," "REGISTERED," and "REGISTRATION" refer to a
registration effected by preparing and filing a registration
statement or
similar document in compliance with the Act, and the declaration
or
ordering of effectiveness of such registration statement or
document.
(q) The term
"REGISTRABLE SECURITIES" means (i) any shares of Common
Stock held by an Investor (ii) any shares of capital stock of the
Company
acquired by an Investor (or any transferee of an Investor) after
the date
hereof pursuant to the Stockholders' Agreement and (iii) any Common
Stock
issued as (or issuable upon the conversion or exercise of any
warrant,
right or other security) a dividend or other distribution with
respect to
or
because of stock splits, stock dividends, reclassifications,
recapitalizations, or similar events, or in exchange for, or in
replacement
of
the shares referenced in (i) and (ii) above, excluding in all
cases,
however, any Registrable Securities sold by a person in a
transaction in
which his, her or its rights under SECTION 2 hereof are not
assigned.
Registrable Securities shall exclude any shares which (A) have
been
registered under the Securities Act pursuant to an effective
registration
statement filed thereunder and disposed of in accordance with
the
registration statement covering them, or (B) may be publicly sold
pursuant
to
and in compliance with SEC Rule 144 in any ninety (90) day
period,
provided that such shares shall not be excluded if (x) the number
of shares
proposed to be sold by such Investor is larger than the number of
shares
that
may be sold in any single 90-day period pursuant to Rule 144 or
(y)
such
Investor believes in good faith that a sale pursuant to Rule 144
will
be
less advantageous to it than a sale pursuant to Section 2.1 or
2.2.
(r) The term
"REQUESTING HOLDERS" has the meaning set forth in
SECTION 2.2(a) hereof.
(s) The term "SEC"
means the Securities and Exchange Commission.
(t)
The term "SELLING
HOLDER" has the meaning set forth in SECTION
2.1(a) hereof.
(u) The term "SELLING
HOLDER INDEMNIFIED PARTIES" has the meaning set
forth in SECTION 2.6(b) hereof.
(v) The term
"VIOLATION" has the meaning set forth in SECTION 2.6(a)
hereof.
2. Registration
Rights. The Company covenants and agrees as follows:
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2.1
PIGGYBACK
REGISTRATION.
(a) If (but without
any obligation to do so) the Company proposes to
register (including for this purpose a registration effected by the
Company for
stockholders other than the Holders) any of its stock or other
securities under
the Act in connection with the public offering of such securities
(other than a
registration statement on Form S-8 or Form S-4, or their
successors, or any
registration statement covering only securities proposed to be
issued in
exchange for securities or assets of another corporation), the
Company shall, at
such time, promptly give each Holder written notice of such
registration. Upon
the written request of each Holder (a "SELLING HOLDER") given
within thirty (30)
days after mailing of such notice by the Company in accordance with
the
provisions hereof, the Company shall, subject to the provisions of
SECTION
2.1(c), use all reasonable efforts to cause to be registered under
the Act all
of the Registrable Securities that each such Holder has requested
to be
registered.
(b) The Company shall
have the right to terminate or withdraw any
registration initiated by it under this SECTION 2.1 prior to the
effectiveness
of such registration whether or not any Holder has elected to
include securities
in such registration. The expenses of such withdrawn registration
shall be borne
by the Company in accordance with SECTION 2.5 hereof.
(c) In connection with
any offering involving an underwriting of
shares of the Company's capital stock, the Company shall not be
required under
this SECTION 2.1 to include any of the Holders' securities in such
underwriting
unless they accept the terms of the underwriting as agreed upon
between the
Company and the underwriters selected by it, which terms shall not
contravene
any of the terms hereof without the consent of the Selling Holders
holding fifty
percent (50%) of the Registrable Securities requested to be
included in such
registration statement, and enter into such an underwriting
agreement in
customary form with an underwriter or underwriters selected by the
Company. In
connection with any such underwriting agreement, no Selling Holder
shall be
required to make representations and warranties other than
representations and
warranties regarding such Selling Holder's ownership and title to
the
Registrable Securities being sold by it and its plan of
distribution with
respect to its Registrable Securities. The number of securities
which shall be
included in such registration shall be in such quantity as the
managing
underwriter determines in its sole discretion will not materially
and adversely
affect the offering by the Company. If the total number of
securities, including
Registrable Securities, requested by stockholders to be included in
such
offering exceeds the number of securities that the managing
underwriter
determines in its sole discretion will not materially and adversely
affect the
offering, then the Company shall be required to include in the
offering only
that number of such securities, including Registrable Securities,
that the
managing underwriter determines in writing in its sole discretion
will not
materially and adversely affect the offering (the securities so
included to be
apportioned pro rata among the Selling Holders according to the
total amount of
securities entitled to be included therein owned by each Selling
Holder or in
such other proportions as shall mutually be agreed to by such
Selling Holders).
Notwithstanding anything to the contrary contained in this
Agreement, to the
extent the stockholders of the Company that have requested to have
securities
included in such registration include stockholders other than
Holders exercising
contractual demand registration rights, then the Company will
include in such
registration, to the extent of the number and type which the
Company is so
advised can be sold in such offering, (i) FIRST all Registrable
Securities
requested for inclusion held by the Holders exercising contractual
demand
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registration rights, and
(ii) SECOND such securities requested to be included in such
registration
statement by all other stockholders. For purposes of the foregoing
parenthetical
concerning apportionment, for any selling stockholder that is a
Holder of
Registrable Securities and that is a partnership, limited liability
company or
corporation, the partners, members, retired partners, retired
members and
stockholders of such Holder, or the estates and family members of
any such
partners, members, retired partners and retired members and any
trusts for the
benefit of any of the foregoing persons shall be deemed to be a
single Selling
Holder, and any pro rata reduction with respect to such Selling
Holder shall be
based upon the aggregate amount of Registrable Securities owned by
all such
related entities and individuals.
(d) In the event a
Selling Holder (i) is unable to include in a
registration by the Company under this SECTION 2.1 all of the
Registrable
Securities that such Holder has requested, or (ii) disapproves the
terms of the
underwriting as agreed upon between the Company and the
underwriters selected by
it, the Selling Holder will have the demand registration rights set
forth in
SECTION 2.2.
2.2
DEMAND
REGISTRATION.
(a) Commencing at
least one hundred eighty (180) days from the
effective date of a registration statement that could have included
Registrable
Securities under SECTION 2.1 and expiring two (2) years from such
effective date
or until such time as the registration statement delayed pursuant
to Section
2.2.(b) has been granted effectiveness (the "DEMAND PERIOD"), any
Holders
entitled to demand registration rights under Section 2.1(d) (the
"REQUESTING
HOLDERS") shall be entitled to request in writing during the Demand
Period that
the Company effect the registration, qualification or compliance of
the
Registrable Securities owned by such Requesting Holders; PROVIDED,
HOWEVER, that
the expected aggregate price to the public of the Registrable
Securities will
equal or exceed five million dollars ($5,000,000). If the
Requesting Holders
intend to distribute the Registrable Securities by means of an
underwriting,
they shall so advise the Company in their request. The underwriter
shall be
reasonably acceptable to the Company.
(b) The Company shall
file a registration statement covering the
Registrable Securities so requested to be registered as soon as
practicable
after receipt of the request or requests of the Requesting Holders,
and shall
use its commercially reasonable efforts to effect such
registration,
qualification or compliance (including, without limitation, the
execution of an
undertaking to file post-effective amendments, appropriate
qualification under
applicable blue sky or other state securities laws and appropriate
compliance
with applicable regulations issued under the Securities Act and any
other
governmental requirements or regulations) as may be so requested
and as would
permit or facilitate the sale and distribution of all or such
portion of such
Registrable Securities as are specified in such request; PROVIDED,
HOWEVER, that
if: (i) in the good faith judgment of the Board of Directors of the
Company,
such registration would be seriously detrimental to the Company and
the Board of
Directors of the Company concludes, as a result, that it is
essential to defer
the filing of such registration statement at such time, and (ii)
the Company
shall furnish to such Holders a certificate signed by the Chief
Executive
Officer of the Company stating that in the good faith judgment of
the Board of
Directors of the Company, it would be seriously detrimental to the
Company for
such registration statement to be filed in the near future
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and that it is, therefore, essential to defer the filing for a
period of not
more than one hundred twenty (120) days after receipt of the
request of the
Requesting Holders; and FURTHER PROVIDED, that the Company shall
not defer its
obligation in this manner more than once in any twelve-month
period.
(c) The Company shall not be required to effect more than one
(1)
registration pursuant to this SECTION 2.2 during the Demand
Period.
2.3
OBLIGATIONS OF THE
COMPANY. Whenever required under this SECTION 2 to
effect the registration of any Registrable Securities, the Company
shall, at the
earliest possible date:
(a) prepare and file
with the SEC a registration statement with
respect to such Registrable Securities and use all reasonable
efforts to cause
such registration statement to become effective, and, upon the
request of the
Holders of a majority of the Registrable Securities registered
thereunder, keep
such registration statement effective for one hundred twenty (120)
days from the
effective date or, if earlier, until the distribution contemplated
in the
Registration Statement has been completed;
(b) as promptly as
possible prepare and file with the SEC such
amendments and supplements to such registration statement and the
prospectus
used in connection with such registration statement as may be
necessary to
comply with the provisions of the Act with respect to the
disposition of all
securities covered by such registration statement;
(c) as promptly as
possible furnish to the Holders such numbers of
copies of the registration statement and amendments thereto, a
prospectus,
including a preliminary prospectus, in conformity with the
requirements of the
Act, and such other documents as they may reasonably request in
order to
facilitate the disposition of Registrable Securities owned by
them;
(d) as promptly as
possible use all reasonable efforts to register
and qualify the securities covered by such registration statement
under such
other securities or blue sky or other state securities laws of
such
jurisdictions as shall be reasonably requested by the Holders,
provided that the
Company shall not be required in connection therewith or as a
condition thereto
to qualify to do business or to file a general consent to service
of process in
any such states or jurisdictions;
(e) as promptly as
possible in the event of any underwritten public
offering, enter into and perform its obligations under an
underwriting
agreement, in usual and customary form, with the managing
underwriter of such
offering;
(f) as promptly as
possible notify each Holder of Registrable
Securities covered by such registration statement at any time when
a prospectus
relating thereto is required to be delivered under the Act of the
happening of
any event as a result of which the prospectus included in such
registration
statement, as then in effect, includes an untrue statement of a
material fact or
omits to state a material fact required to be stated therein or
necessary to
make the statements therein not misleading in the light of the
circumstances
then existing;
(g) as promptly as
possible cause all such Registrable Securities
registered pursuant hereunder to be listed on each securities
exchange on which
similar securities issued by
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the Company are then listed;
(h) as promptly as
possible. provide a transfer agent and registrar
for all Registrable Securities registered pursuant hereunder and a
CUSIP number
for all such Registrable Securities, in each case not later than
the effective
date of such registration; and
(i) if such securities
are being sold in an underwritten offering,
as promptly as possible furnish at the request of any Holder
requesting
registration of Registrable Securities pursuant hereto, on the date
that such
Registrable Securities are delivered to the underwriters for sale
in connection
with a registration pursuant hereto, (A) an opinion, dated such
date, of the
counsel representing the Company for the purposes of such
registration, in form
and substance as is customarily given to underwriters in an
underwritten public
offering, addressed to the underwriters, and to the Holders
requesting
registration of Registrable Securities, and (B) a letter dated such
date, from
the independent certified public accountants of the Company, in
form and
substance as is customarily given by independent certified public
accountants to
underwriters in an underwritten public offering, addressed to the
underwriters,
and to the Holders requesting registration of Registrable
Securities.
2.4
INFORMATION FROM
HOLDER. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this
SECTION 2 with
respect to the Registrable Securities of any Selling Holder that
such Holder
shall furnish to th
