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EXHIBIT 4.3
COMMON STOCK WARRANT
NEITHER THIS WARRANT NOR THE SECURITIES
ISSUABLE UPON EXERCISE OF THIS WARRANT
HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED. NO SALE OR
DISPOSITION MAY BE EFFECTED EXCEPT IN
COMPLIANCE WITH RULE 144 UNDER SAID ACT OR
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO OR AN OPINION OF
COUNSEL FOR THE HOLDER, SATISFACTORY TO THE
COMPANY, THAT SUCH REGISTRATION IS
NOT REQUIRED UNDER THE ACT OR RECEIPT OF A
NO-ACTION LETTER FROM THE SECURITIES
AND EXCHANGE COMMISSION.
WARRANT TO PURCHASE 451 SHARES OF COMMON STOCK
Dated: October 28, 2003
THIS CERTIFIES THAT, for value received,
Oxford Finance Corporation, ("Holder")
is entitled to subscribe for and purchase
Four Hundred Fifty One (451) shares of
the fully paid and nonassessable Common
Stock (the "Shares") of Vanda
Pharmaceuticals Inc., a Delaware
corporation (the "Company"), at the Warrant
Price (as hereinafter defined), subject to
the provisions and upon the terms and
conditions hereinafter set forth. As used
herein, the term "Common Stock" shall
mean the Company's presently authorized
Class A Common Stock, and any stock into
which such Common Stock may hereafter be
exchanged.
1. Warrant Price. The Warrant Price shall
initially be Forty and 00/100 dollars
($40.00) per share, subject to adjustment
as provided in Section 7 below.
2. Conditions to Exercise. The purchase
right represented by this Warrant may be
exercised at any time, or from time to
time, in whole or in part during the term
commencing on the date hereof and ending on
the earlier of:
(a)
5:00 P.M.
Eastern Standard time on the eighth annual anniversary of
this Warrant Agreement; or
(b)
The closing of
the initial public offering of the Company's Common
Stock pursuant to a registration statement under the Securities
Act
of 1933, as amended (the "Initial Public Offering"). The
Company
shall provide notice of the Initial Public Offering to the Holder
at
least 10 business days prior to the closing thereof; or
(c)
The effective
date of the merger of the Company with or into, the
consolidation of the Company with, or the sale by the Company of
all
or substantially all of its assets or all or substantially all
of
its shares to another corporation or other entity (other than such
a
transaction wherein the shareholders of the Company retain or
obtain
a majority of the voting capital stock of the surviving,
resulting,
or purchasing corporation); provided that the Company shall
notify
the registered Holder of this Warrant of the proposed effective
date
of the merger, consolidation, or sale at least 10 business days
prior to the effectiveness thereof.
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In the event that, although the Company
shall have given notice of a transaction
pursuant to subparagraph (b) or
subparagraph (c) hereof, the transaction does
not close within 60 days of the day
specified by the Company, unless otherwise
elected by the Holder any exercise of the
Warrant subsequent to the giving of
such notice shall be rescinded and the
Warrant shall again be exercisable until
terminated in accordance with this
Paragraph 2.
3. Method of Exercise; Payment; Issuance of
Shares; Issuance of New Warrant.
(a)
Cash Exercise. Subject to Section
2 hereof, the purchase right
represented by this Warrant may be exercised by the Holder
hereof,
in whole or in part, by the surrender of this Warrant (with a
duly
executed Notice of Exercise in the form attached hereto) at the
principal office of the Company (as set forth below) and by
payment
to the Company, by check, of an amount equal to the then
applicable
Warrant Price per share multiplied by the number of shares then
being purchased. In the event of any exercise of the rights
represented by this Warrant, certificates for the shares of stock
so
purchased shall be in the name of, and delivered to, the Holder
hereof (subject to the terms of transfer contained herein and
upon
payment by such Holder hereof of any applicable transfer
taxes).
Such delivery shall be made within 10 days after exercise of
the
Warrant and at the Company's expense and, unless this Warrant
has
been fully exercised or expired, a new Warrant having terms and
conditions substantially identical to this Warrant and
representing
the portion of the Shares, if any, with respect to which this
Warrant shall not have been exercised, shall also be issued to
the
Holder hereof within 10 days after exercise of the Warrant.
(b)
Net Issue
Exercise. In lieu of exercising this Warrant pursuant to
Section 3(a), Holder may elect to receive shares equal to the
value
of this Warrant (or of any portion thereof remaining unexercised)
by
surrender of this Warrant at the principal office of the
Company
together with notice of such election, in which event the
Company
shall issue to Holder the number of shares of the Company's
Common
Stock computed using the following formula:
X = Y (A-B)
-------
A
Where X = the number of shares of Common Stock to be issued to
Holder.
Y = the number of shares of Common Stock purchasable under
this Warrant (at the date of exercise).
A = the Fair Market Value of one share of the Company's Common
Stock (at the date of exercise).
B = Warrant Price (as adjusted to the date of exercise).
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(c)
Fair Market
Value. For purposes of this Section 3, Fair Market Value
of one share of the Company's Common Stock shall mean:
(i) In the event of an exercise in connection with an Initial
Public Offering, the per share Fair Market Value for the
Common Stock shall be the Offering Price at which the
underwriters initially sell Common Stock to the public; or
(ii) The average of the closing bid and asked prices of the
Common Stock quoted in the Over-The-Counter Market Summary, or
the average of, the last reported sale price of the Common
Stock or the closing price quoted on the Nasdaq National
Market System ("NMS") or on any exchange on which the Common
Stock is listed, whichever is applicable, as published in The
Wall Street Journal over the ten (10) trading days prior to
the date of determination of fair market value; or
(iii) In the event of an exercise in connection with a merger,
acquisition or other consolidation in which the Company is not
the surviving entity, as described in Section 2(c), the per
share Fair Market Value for the Common Stock shall be the
value to be received per share of Common Stock by all holders
of the Common Stock in such transaction as determined by the
Board of Directors; or
(iv) If the Common Stock is not publicly traded, the per share
fair market value of the Common Stock shall be as determined
in good faith by the Company's Board of Directors unless
Holder elects to have such fair market value determined by an
appraiser selected by the Company, which election must be made
by Holder within ten (10) business days of the date the
Company notifies Holder of the fair market value as determined
by its Board of Directors. In the event of such an appraisal,
the cost thereof shall be borne by the Holder unless such
appraisal results in a fair market value in excess of 115% of
that determined by the Company's Board of Directors, in which
event the Company shall bear the cost of such appraisal.
In the event of 3(c)(iii) or 3(c)(iv), above, the Company
shall deliver to the Holder a certificate setting forth in
reasonable detail the basis for and method of determination of
the per share Fair Market Value of the Common Stock. Such
certificate must be made to Holder at least 10 business days
prior to the proposed effective date of the merger,
consolidation, sale, or other triggering event as defined in
3(c)(iii) and 3(c)(iv).
(d)
Automatic
Exercise. To the extent this Warrant is not previously
exercised, it shall be automatically exercised in accordance
with
Sections 3(b) and 3(c) hereof (even if not surrendered)
immediately
before: (i) its expiration, or (ii) the consummation of any
consolidation or merger of the Company, or any sale or transfer of
a
majority of the Company's assets or stock pursuant to Section
2(b)
and 2(c).
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4. Representations and Warranties of Holder
and Restrictions on Transfer Imposed
by the Securities Act of 1933.
(a)
Representations
and Warranties by Holder. The Holder represents and
warrants to the Company with respect to this purchase as
follows:
(i) The Holder has substantial experience in evaluating and
investing in private placement transactions of securities of
companies similar to the Company so that the Holder is capable
of evaluating the merits and risks of its investment in the
Company and has the capacity to protect its interests.
(ii) The Holder is acquiring the Warrant and the Shares of
Common Stock issuable upon exercise of the Warrant
(collectively, the "Securities") for investment for its own
account and not with a view to, or for resale in connection
with, any distribution thereof. The Holder understands that
the Securities have not been registered under the Securities
Act of 1933, as amended (the "Act") by reason of a specific
exemption from the registration provisions of the Act, which
depends upon, among other things, the bona fide nature of the
investment intent as expressed herein. In this connection, the
Holder understands that, in the view of the Securities and
Exchange
Commission (the "EC"), the statutory basis for such
exemption may be unavailable if this representation was
predicated solely upon a present intention to hold the
Securities for the minimum capital gains period specified
under tax statutes, for a deferred sale, for or until an
increase or decrease in the market price of the Securities or
for a period of one year or any other fixed period in the
future.
(iii) The Holder acknowledges that the Securities must be held
indefinitely unless subsequently registered under the Act or
an exemption from such registration is available. The Holder
is aware of the provisions of Rule 144 promulgated under the
Act ("Rule 144") which permits limited resale of securities
purchased in a private placement subject to the satisfaction
of certain conditions, including, in case the securities have
been held for more than one but less than two years, t
