EXHIBIT 4.1
ANNEX III
TO
SUBSCRIPTION
AGREEMENT
NEITHER THIS WARRANT NOR ISSUANCE OF THE SECURITIES ISSUABLE UPON THE EXERCISE
HEREOF TO THE HOLDER HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED OR QUALIFIED OR REGISTERED UNDER STATE SECURITIES OR BLUE SKY LAWS.
NEITHER THIS WARRANT NOR SUCH SECURITIES MAY BE SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED OR DISPOSED OF EXCEPT IN COMPLIANCE WITH
THE SECURITIES ACT OF 1933, AS AMENDED, APPLICABLE STATE SECURITIES OR BLUE SKY
LAWS AND THE APPLICABLE RULES AND REGULATIONS THEREUNDER.
THIS WARRANT MAY NOT BE TRANSFERRED EXCEPT AS PROVIDED IN SECTION 24.
No. W- Right to Purchase
__________ Shares
of Common Stock of
Questcor Pharmaceuticals, Inc.
QUESTCOR PHARMACEUTICALS, INC.
COMMON STOCK PURCHASE WARRANT
QUESTCOR PHARMACEUTICALS, INC., a California corporation, hereby certifies
that, for value received, [INSERT NAME OF HOLDER] or registered assigns (the
"Holder"), is entitled, subject to the terms set forth below, to purchase from
the Company at any time or from time to time before 5:00 p.m., New York City
time, on the Expiration Date (such capitalized term and all other capitalized
terms used herein having the respective meanings provided herein), ____________
fully paid and nonassessable shares of Common Stock at a purchase price per
share equal to the Purchase Price. The number of such shares of Common Stock and
the Purchase Price are subject to adjustment as provided in this Warrant.
1. DEFINITIONS.
(a) As used in this Warrant, the term "Holder" shall have the
meaning assigned to such term in the first paragraph of this Warrant.
(b) All the agreements or instruments herein defined shall mean such
agreements or instruments as the same may from time to time be supplemented or
amended or the terms thereof waived or modified to the extent permitted by, and
in accordance with, the terms thereof and of this Warrant.
(c) The following terms shall have the following meanings (such
meanings to be equally applicable to both the singular and plural forms of the
terms defined):
"Aggregate Diluted Price Percentage" means, at any time of
determination, the aggregate Diluted Price Percentages for all issuances
of Newly Issued Shares issued in reliance on Section (8)(i) at or prior to
such time of determination.
"Aggregate Purchase Price" means at any time an amount equal to the
product obtained by multiplying (x) the Purchase Price times (y) the
number of shares of Common Stock for which this Warrant may be exercised
at such time.
"Aggregation Parties" shall have the meaning provided in Section
2(c).
"AMEX" means the American Stock Exchange, Inc.
"Board of Directors" means the Board of Directors of the Company.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Corporation to have been duly
adopted by the Board of Directors, or duly authorized committee thereof
(to the extent permitted by applicable law), and to be in full force and
effect on the date of such certification, and delivered to the Holder.
"Business Day" means any day other than a Saturday, Sunday or other
day on which commercial banks in The City of New York are authorized or
required by law or executive order to remain closed.
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"Certificate of Determination" shall have the meaning provided in
the Subscription Agreement.
"Common Stock" includes the Company's Common Stock, no par value per
share, (and any purchase rights issued with respect to the Common Stock in
the future) as authorized on the date hereof, and any other securities
into which or for which the Common Stock (and any such rights issued with
respect to the Common Stock) may be converted or exchanged pursuant to a
plan of recapitalization, reorganization, merger, sale of assets or
otherwise and any stock (other than Common Stock) and other securities of
the Company or any other Person which the Holder at any time shall be
entitled to receive, or shall have received, on the exercise of this
Warrant, in lieu of or in addition to Common Stock.
"Common Stock Equivalents" means any warrant, option, subscription
or purchase right with respect to shares of Common Stock, any security
convertible into, exchangeable for, or otherwise entitling the holder
thereof to acquire, shares of Common Stock or any warrant, option,
subscription or purchase right with respect to any such convertible,
exchangeable or other security.
"Company" shall include Questcor Pharmaceuticals, Inc., a California
corporation, and any corporation that shall succeed to or assume the
obligations of Questcor Pharmaceuticals, Inc. hereunder in accordance with
the terms hereof.
"Current Fair Market Value" means, when used with respect to the
Common Stock as of a specified date:
(i) if the Common Stock is then listed for trading on a national
securities exchange or through the Nasdaq or the Nasdaq SmallCap, (A) the
average of the daily volume-weighted average prices of the Common Stock on
the principal national securities exchange or the Nasdaq or the Nasdaq
SmallCap, as the case may be, on which the Common Stock is so listed for
each Trading Day in the period of five consecutive Trading Days ending on
and including such date, as reported by Bloomberg Financial, L.P.;
(ii) if on the date as of which Current Fair Market Value is to be
determined the Common Stock is not so
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listed, the average of the highest bid and lowest asked prices of the
Common Stock quoted in the Nasdaq OTC Bulletin Board or the
over-the-counter-market, for each Trading Day in the period of five
consecutive Trading Days ending on and including such date; or
(iii) if on the date for which Current Fair Market Value is to be
determined the Common Stock is not listed on any national securities
exchange, the Nasdaq or the Nasdaq SmallCap or quoted in the Nasdaq System
or the over-the-counter market, the Current Fair Market Value of Common
Stock shall be the highest price per share which the Company could then
obtain from a willing buyer (not an employee or director of the Company at
the time of determination), under no compulsion to buy, in an arms'-length
transaction for shares of Common Stock sold by the Company, from
authorized but unissued shares, as determined in good faith by the Board
of Directors.
"Diluted Price Percentage" means, with respect to any issuance of
Newly Issued Shares issued in reliance on Section 8(i), the Diluted Price
Percentage computed in accordance with the following formula:
(( O + (C / FMV)) x PP )
----------------
DPP = PP - (( O + N ))
---------------------
PP
where,
C = aggregate consideration received by the Company for the
Newly Issued Shares
N = number of Newly Issued Shares
O = number of shares of Common Stock outstanding (calculated on
a fully-diluted basis assuming the conversion of all options,
warrants, purchase rights or convertible securities which are
exercisable at the time of the issuance of the Newly Issued
Shares) immediately prior to the issuance of the Newly Issued
Shares
FMV = Current Fair Market Value of the Common
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Stock at the time of issuance of the Newly Issued Shares
PP = Purchase Price immediately prior to the issuance of the
Newly Issued Shares
DPP = Diluted Price Percentage for such issuance of Newly Issued
Shares
"DTC" means The Depository Trust Company.
"ESPP" means the Company's 2000 Employee Stock Purchase Plan.
"Excluded Shares" shall have the meaning provided in the Certificate
of Determination.
"Expiration Date" means January 15, 2007.
"FAST" means the First Automated Securities Transfer program of DTC.
"Issuance Date" means the date of original issuance of this Warrant
or its predecessor instrument.
"Majority Holders" shall have the meaning provided in the
Certificate of Determination; provided, however, that if at the time the
Majority Holders is being determined no Series B Shares are outstanding
then "Majority Holders" shall mean registered holders of this Warrant and
the Other Warrants who hold in the aggregate this Warrant and Other
Warrants which entitle the holders to purchase a majority of the shares of
Common Stock (or Other Securities) issuable at the time of determination
upon exercise of the unexercised portions of this Warrant and all the
Other Warrants (in each case determined without regard to the limitations
on exercise contained in Section 2(c) of this Warrant and the Other
Warrants).
"Nasdaq" means the Nasdaq National Market.
"Nasdaq SmallCap" means the Nasdaq SmallCap Market.
"Newly Issued Shares" shall have the meaning provided in Section 8.
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"1934 Act" means the Securities Exchange Act of 1934, as amended.
"1933 Act" means the Securities Act of 1933, as amended.
"NYSE" means the New York Stock Exchange, Inc.
"Other Securities" means any stock (other than Common Stock) and
other securities of the Company or any other Person which the Holder at
any time shall be entitled to receive, or shall have received, on the
exercise of this Warrant, in lieu of or in addition to Common Stock, or
which at any time shall be issuable or shall have been issued in exchange
for or in replacement of Common Stock or Other Securities pursuant to
Section 4.
"Other Subscription Agreements" means the several Subscription
Agreements, dated as of the date of the Subscription Agreement, by and
between the Company and the several buyers named therein.
"Other Warrants" means the Common Stock Purchase Warrants (other
than this Warrant) issued or issuable by the Company pursuant to the
Subscription Agreement and the Other Subscription Agreements.
"Permitted Indebtedness" shall have the meaning provided in the
Certificate of Determination.
"Person" means an individual, partnership, corporation, limited
liability company, trust or unincorporated organization, or a government
or a governmental agency or political subdivision.
"Purchase Price" means $1.0824, subject to adjustment as provided in
this Warrant.
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"Registration Statement" shall have the meaning provided in the
Subscription Agreement.
"Restricted Ownership Percentage" shall have the meaning provided in
Section 2(c).
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"Restricted Securities" means securities that are not eligible for
resale pursuant to Rule 144(k) under the 1933 Act (or any successor
provision).
"Reorganization Event" means the occurrence of any one or more of
the following events:
(i) any consolidation, merger or similar transaction of the Company
or any Subsidiary with or into another entity (other than a merger or
consolidation or similar transaction of a Subsidiary into the Company or a
wholly-owned Subsidiary); or the sale or transfer of all or substantially
all of the assets of the Company and the Subsidiaries in a single
transaction or a series of related transactions; or
(ii) the occurrence of any transaction or event in connection with
which all or substantially all the Common Stock shall be exchanged for,
converted into, acquired for or constitute the right to receive securities
of any other Person (whether by means of a Tender Offer, liquidation,
consolidation, merger, share exchange, combination, reclassification,
recapitalization, or otherwise); or
(iii) the acquisition by a Person or group of Persons acting in
concert as a partnership, limited partnership, syndicate or group, as a
result of a tender or exchange offer, open market purchases, privately
negotiated purchases or otherwise, of beneficial ownership of securities
of the Company representing 50% or more of the combined voting power of
the outstanding voting securities of the Company ordinarily (and apart
from rights accruing in special circumstances) having the right to vote in
the election of directors.
"Rule 144A" means Rule 144A as promulgated under the 1933 Act.
"SEC" means the Securities and Exchange Commission.
"Series B Shares" means the shares of Series B Preferred Stock, no
par value per share, of the Company issued pursuant to the Subscription
Agreement and the Other Subscription Agreements.
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"Subscription Agreement" means the Subscription Agreement, dated as
of December 29, 2002, by and between the Company and the original Holder
of this Warrant.
"Subsidiary" means any corporation or other entity of which a
majority of the capital stock or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other
Persons performing similar functions are at the time directly or
indirectly owned by the Company.
"Tender Offer" means a tender offer, exchange offer or other offer
by the Company to repurchase outstanding shares of its capital stock.
"Trading Day" means a day on which AMEX, or if the Company's Common
Stock ceases to be traded on AMEX, whichever of the national securities
exchange, the Nasdaq or the Nasdaq SmallCap which then constitutes the
principal securities market for the Common Stock, is open for general
trading.
"Warrant Shares" means the shares of Common Stock issuable upon
exercise of this Warrant.
2. EXERCISE OF WARRANT.
(A) EXERCISE. This Warrant may be exercised by the Holder in whole
at any time or in part from time to time on or before the Expiration Date by (x)
surrendering this Warrant to the Company, (y) giving a subscription form in the
form of EXHIBIT 1 to this Warrant (duly executed by the Holder) to the Company,
and (z) making payment, in cash or by certified or official bank check payable
to the order of the Company, or by wire transfer of funds to the account of the
Company, in any such case, in the amount obtained by multiplying (a) the number
of shares of Common Stock designated by the Holder in the subscription form by
(b) the Purchase Price then in effect. On any partial exercise the Company will
forthwith issue and deliver to or upon the order of the Holder a new Warrant or
Warrants of like tenor, in the name of the Holder or as the Holder (upon payment
by the Holder of any applicable transfer taxes) may request, providing in the
aggregate on the face or faces thereof for the purchase of the number of shares
of Common Stock for which such Warrant or Warrants may still be exercised. The
subscription form may be surrendered by telephone line facsimile transmission to
such telephone number for the Company
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as shall have been specified in writing to the Holder by the Company; provided,
however, that if the subscription form is given to the Company by telephone line
facsimile transmission the Holder shall send an original of such subscription
form to the Company within ten Business Days after such subscription form is so
given to the Company; provided further, however, that any failure or delay on
the part of the Holder in giving such original of any subscription form shall
not affect the validity or the date on which such subscription form is so given
by telephone line facsimile transmission.
(B) NET EXERCISE. Notwithstanding anything to the contrary contained
in Section 2(a), the Holder may elect to exercise this Warrant, in whole at any
time or in part from time to time, by receiving shares of Common Stock equal to
the net issuance value (as determined below) of this Warrant, or any part
hereof, upon surrender of the subscription form annexed hereto (duly executed by
the Holder) to the Company (followed by surrender of this Warrant to the Company
within three Trading Days after surrender of such subscription form), in which
event the Company shall issue to the Holder a number of shares of Common Stock
computed using the following formula:
X = Y x (A - B)
-----------
A
where,
X = the number of shares of Common Stock to be issued to the
Holder
Y = the number of shares of Common Stock as to which this
Warrant is to be exercised
A = the Current Fair Market Value of one share of Common Stock
calculated as of the last Trading Day immediately preceding
the exercise of this Warrant
B = the Purchase Price
(C) 9.9% LIMITATION.
(1) Notwithstanding anything to the contrary contained herein, the
number of shares of Common Stock that may be acquired by the Holder upon
exercise pursuant to the terms hereof at any time shall not exceed a number
that, when added to
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the total number of shares of Common Stock deemed beneficially owned by the
Holder (other than by virtue of the ownership of securities or rights to acquire
securities (including Series B Shares) that have limitations on the Holder's
right to convert, exercise or purchase similar to the limitation set forth
herein (the "Excluded Shares"), together with all shares of Common Stock deemed
beneficially owned at such time (other than by virtue of the ownership of the
Excluded Shares) by Persons whose beneficial ownership of Common Stock would be
aggregated with the beneficial ownership by the Holder for purposes of
determining whether a group exists or for purposes of determining the Holder's
beneficial ownership (the "Aggregation Parties"), in either such case for
purposes of Section 13(d) of the 1934 Act and Regulation 13D-G thereunder
(including, without limitation, as the same is made applicable to Section 16 of
the 1934 Act and the rules promulgated thereunder), would result in beneficial
ownership by the Holder or such group of more than 9.9% of the shares of Common
Stock for purposes of Section 13(d) or Section 16 of the 1934 Act and the rules
promulgated thereunder (as the same may be modified by the Holder as provided
herein, the "Restricted Ownership Percentage"). The Holder shall have the right
(x) at any time and from time to time to reduce its Restricted Ownership
Percentage immediately upon notice to the Company in the event and only to the
extent that Section 16 of the 1934 Act or the rules promulgated thereunder (or
any successor statute or rules) is changed to reduce the beneficial ownership
percentage threshold thereunder to a percentage less than 9.9% and (y) at any
time and from time to time, to increase its Restricted Ownership Percentage
unless the Holder shall have, by written instrument delivered to the Company,
irrevocably waived its rights to so increase its Restricted Ownership
Percentage. If at any time the limits in this Section 2(c) make this Warrant
unexercisable in whole or in part, the Company shall not by reason thereof be
relieved of its obligation to issue shares of Common Stock at any time or from
time to time thereafter upon exercise of this Warrant as and when shares of
Common Stock may be issued in compliance with such restrictions.
(2) For purposes of this Section 2(c), in determining the number of
outstanding shares of Common Stock at any time the Holder may rely on the number
of outstanding shares of Common Stock as reflected in (1) the Company's then
most recent Form 10-Q, Form 10-K or other public filing with the SEC, as the
case may be, (2) a public announcement by the Company that is later than any
such filing referred to in the preceding clause (1) or (3) any other notice by
the Company or its transfer agent
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setting forth the number shares of Common Stock outstanding and knowledge the
Holder may have about the number of shares of Common Stock issued upon
conversion or exercise of Series B Shares or other Common Stock Equivalents by
any Person, including the Holder, which are not reflected in the preceding
clauses (1) through (3). Upon the written request of the Holder, the Company
shall within three Business Days confirm in writing to the Holder the number of
shares of Common Stock then outstanding. In any case, the number of outstanding
shares of Common Stock shall be determined after giving effect to the conversion
or exercise of Common Stock Equivalents, including the Series B Shares and the
Warrants, by the Holder or its affiliates, in each such case subsequent to, the
date as of which such number of outstanding shares of Common Stock was reported.
3. DELIVERY OF STOCK CERTIFICATES, ETC., ON EXERCISE. (a) As soon as
practicable after the exercise of this Warrant and in any event within three
Trading Days thereafter, upon the terms and subject to the conditions of this
Warrant, the Company at its expense (including the payment by it of any
applicable issue or stamp taxes) will cause to be issued in the name of and
delivered to the Holder, or as the Holder (upon payment by the Holder of any
applicable transfer taxes) may direct, a certificate or certificates for the
number of fully paid and nonassessable shares of Common Stock (or Other
Securities) to which the Holder shall be entitled on such exercise, in such
denominations as may be requested by the Holder, plus, in lieu of any fractional
share to which the Holder would otherwise be entitled, cash equal to such
fraction multiplied by the then Current Fair Market Value of one full share of
Common Stock, together with any other stock or Other Securities or any property
(including cash, where applicable) to which the Holder is entitled upon such
exercise pursuant to Section 2 or otherwise. In lieu of delivering physical
certificates for the shares of Common Stock or (Other Securities) issuable upon
any exercise of this Warrant, provided the Company's transfer agent is
participating in the DTC's FAST program, upon request of the Holder, the Company
shall use commercially reasonable efforts to cause its transfer agent
electronically to transmit such shares of Common Stock (or Other Securities)
issuable upon conversion to the Holder (or its designee), by crediting the
account of the Holder's (or such designee's) broker with DTC through its Deposit
Withdrawal Agent Commission system (provided that the same time periods herein
as for stock certificates shall apply). The Company shall pay any taxes and
other governmental charges that may be imposed under
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the laws of the United States of America or any political subdivision or taxing
authority thereof or therein in respect of the issue or delivery of shares of
Common Stock (or Other Securities) or payment of cash upon exercise of this
Warrant (other than income taxes imposed on the Holder). The Company shall not
be required, however, to pay any tax or other charge imposed in connection with
any transfer involved in the issue of any certificate for shares of Common Stock
(or Other Securities) issuable upon exercise of this Warrant or payment of cash
to any Person other than the Holder, and in case of such transfer or payment the
Company shall not be required to deliver any certificate for shares of Common
Stock (or Other Securities) upon such exercise or pay any cash until such tax or
charge has been paid or it has been established to the Company's reasonable
satisfaction that no such tax or charge is due. Upon exercise of this Warrant as
provided herein, the Company's obligation to issue and deliver the certificates
for Common Stock shall be absolute and unconditional, irrespective of the
absence of any action by the Holder to enforce the same, any waiver or consent
with respect to any provision hereof, the recovery of any judgment against any
Person or any action to enforce the same, any failure or delay in the
enforcement of any other obligation of the Company to the Holder, or any setoff,
counterclaim, recoupment, limitation or termination, or any breach or alleged
breach by the Holder or any other Person of any obligation to the Company or any
violation or alleged violation of law by the Holder or any other Person, and
irrespective of any other circumstance which might otherwise limit such
obligation of the Company to the Holder in connection with such exercise.
(b) If in any case the Company shall fail to issue and deliver the
shares of Common Stock to the Holder in connection with a particular exercise of
this Warrant within five Trading Days after the Holder gives the subscription
form and pays the Purchase Price, if any, for such exercise, in addition to any
other liabilities the Company may have hereunder and under applicable law (A)
the Company shall pay or reimburse the Holder on demand for all out-of-pocket
expenses, including, without limitation, reasonable fees and expenses of legal
counsel, incurred by the Holder as a result of such failure, (B) if as a result
of such failure the Holder shall suffer any direct damages or liabilities from
such failure (including, without limitation, margin interest and the cost of
purchasing securities to cover a sale (whether by the Holder or the Holder's
securities broker) or borrowing of shares of Common Stock by the Holder for
purposes of settling any trade involving a sale of shares of Common Stock made
by the Holder during the
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period beginning on the Issuance Date and ending on the date the Company
delivers or causes to be delivered to the Holder such shares of Common Stock),
then the Company shall upon demand of the Holder pay to the Holder an amount
equal to the actual direct, out-of-pocket damages and liabilities suffered by
the Holder by reason thereof which the Holder documents to the reasonable
satisfaction of the Company, and (C) the Holder may by written notice (which may
be given by mail, courier, personal service or telephone line facsimile
transmission) or oral notice (promptly confirmed in writing), given at any time
prior to delivery to the Holder of the shares of Common Stock issuable in
connection with such exercise of the Holder's right, rescind such exercise and
the subscription form relating thereto, in which case the Holder shall
thereafter be entitled to exercise that portion of this Warrant as to which such
exercise is so rescinded and to exercise its other rights and remedies with
respect to such failure by the Company. Notwithstanding the foregoing the
Company shall not be liable to the Holder under clauses (A) or (B) of the
immediately preceding sentence to the extent the failure of the Company to
deliver or to cause to be delivered such shares of Common Stock results from
fire, flood, storm, earthquake, shipwreck, strike, war, acts of terrorism, crash
involving facilities of a common carrier, acts of God, or any similar event
outside the control of the Company (it being understood that the action or
failure to act of the Company's transfer agent shall not be deemed an event
outside the control of the Company except to the extent resulting from fire,
flood, storm, earthquake, shipwreck, strike, war, acts of terrorism, crash
involving facilities of a common carrier, acts of God, or any similar event
outside the control of such transfer agent or the bankruptcy, liquidation, or
reorganization of such transfer agent under any bankruptcy, insolvency or other
similar law). The Holder shall notify the Company in writing (or by telephone
conversation, confirmed in writing) as promptly as practicable following the
third Trading Day after the Holder exercises this Warrant if the Holder becomes
aware that such shares of Common Stock so issuable have not been received as
provided herein, but any failure so to give such notice shall not affect the
Holder's rights under this Warrant or otherwise.
4. ADJUSTMENT FOR DIVIDENDS IN OTHER STOCK, PROPERTY, ETC.;
RECLASSIFICATION, ETC. In case at any time or from time to time on or after the
Issuance Date, all the holders of Common Stock (or Other Securities) shall have
received, or (on or after the record date fixed for the determination of
stockholders eligible to receive) shall have become entitled to receive, without
payment therefor,
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(a) other or additional stock, rights, warrants or other securities
or property (other than cash) by way of dividend, or
(b) any cash (excluding cash dividends payable solely out of
earnings or earned surplus of the Company), or
(c) other or additional stock, rights, warrants or other securities
or property (including cash) by way of spin-off, split-up,
reclassification, recapitalization, combination of shares or similar
corporate rearrangement,
other than (i) additional shares of Common Stock (or Other Securities) issued as
a stock dividend or in a stock-split (adjustments in respect of which are
provided for in Section 6) and (ii) rights or warrants to subscribe for Common
Stock at less than the Current Fair Market Value (adjustments in respect of
which are provided in Section 7), then and in each such case the Holder, on the
exercise hereof as provided in Section 2, shall be entitled to receive the
amount of stock, rights, warrants and Other Securities and property (including
cash in the cases referred to in subdivisions (b) and (c) of this Section 4)
which the Holder would hold on the date of such exercise if on the date of such
action specified in the preceding clauses (a) through (c) (or the record date
therefor) the Holder had been the holder of record of the number of shares of
Common Stock called for on the face of this Warrant and had thereafter, during
the period from the date thereof to and including the date of such exercise,
retained such shares and all such other or additional stock, rights, warrants
and Other Securities and property (including cash in the case referred to in
subdivisions (b) and (c) of this Section 4) receivable by the Holder as
aforesaid during such period, giving effect to all adjustments called for during
such period by Section 5.
5. EXERCISE UPON A REORGANIZATION EVENT. In case of any
Reorganization Event the Company shall, as a condition precedent to the
consummation of the transactions constituting, or announced as, such
Reorganization Event, cause effective provisions to be made so that the Holder
shall have the right thereafter, by exercising this Warrant (in lieu of the
shares of Common Stock of the Company and Other Securities or property
purchasable and receivable upon exercise of the rights represented hereby
immediately prior to such Reorganization Event) to purchase the kind and amount
of shares of stock and Other Securities and property (including cash) receivable
upon
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such Reorganization Event by a holder of the number of shares of Common Stock
that might have been received upon exercise of this Warrant immediately prior to
such Reorganization Event. Any such provision shall include provisions for
adjustments in respect of such shares of stock and Other Securities and property
that shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Warrant. The provisions of this Section 5 shall apply to
successive Reorganization Events.
6. ADJUSTMENT FOR CERTAIN EXTRAORDINARY EVENTS. If on or after the
Issuance Date the Company shall (i) issue additional shares of the Common Stock
as a dividend or other distribution on outstanding Common Stock, (ii) subdivide
or reclassify its outstanding shares of Common Stock, or (iii) combine its
outstanding shares of Common Stock into a smaller number of shares of Common
Stock, then, in each such event, the Purchase Price shall, simultaneously with
the happening of such event, be adjusted by multiplying the Purchase Price in
effect immediately prior to such event by a fraction, the numerator of which
shall be the number of shares of Common Stock outstanding immediately prior to
such event and the denominator of which shall be the number of shares of Common
Stock outstanding immediately after such event, and the product so obtained
shall thereafter be the Purchase Price then in effect. The Purchase Price, as so
adjusted, shall be readjusted in the same manner upon the happening of any
successive event or events described herein in this Section 6. The Holder shall
thereafter, on the exercise hereof as provided in Section 2, be entitled to
receive that number of shares of Common Stock determined by multiplying the
number of shares of Common Stock which would be issuable on such exercise
immediately prior to such issuance, subdivision or combination, as the case may
be, by a fraction of which (i) the numerator is the Purchase Price in effect
immediately prior to such issuance and (ii) the denominator is the Purchase
Price in effect on the date of such exercise.
7. ISSUANCE OF RIGHTS OR WARRANTS TO COMMON STOCKHOLDERS AT LESS
THAN CURRENT FAIR MARKET VALUE. If the Company shall on or after the Issuance
Date issue rights or warrants to all holders of its outstanding shares of Common
Stock entitling them to subscribe for or purchase shares of Common Stock at a
price per share less than the Current Fair Market Value on the record date fixed
for the determination of stockholders entitled to receive such rights or
warrants, then
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(a) the Purchase Price shall be adjusted so that the same shall
equal the price determined by multiplying the Purchase Price in effect at
the opening of business on the day after such record date by a fraction of
which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on such record date plus the number
of shares which the aggregate offering price of the total number of shares
so offered would purchase at such Current Fair Market Value, and the
denominator shall be the number of shares of Common Stock outstanding on
the close of business on such record date plus the total number of
additional shares of Common Stock so offered for subscription or purchase;
and
(b) the number of shares of Common Stock which the Holder may
thereafter purchase upon exercise of this Warrant at the opening of
business on the day after such record date shall be increased to a number
equal to the quotient obtained by dividing (x) the Aggregate Purchase
Price in effect immediately prior to such adjustment in the Purchase Price
pursuant to clause (a) of this Section 7 by (y) the Purchase Price in
effect immediately after such adjustment in the Purchase Price pursuant to
clause (a) of this Section 7.
Such adjustment shall become effective immediately after the opening of business
on the day following the record date fixed for determination of stockholders
entitled to receive such rights or warrants. To the extent that shares of Common
Stock are not delivered pursuant to such rights or warrants, upon the expiration
or termination of such rights or warrants, the Purchase Price shall be
readjusted to the Purchase Price which would then be in effect had the
adjustments made upon the issuance of such rights or warrants been made on the
basis of delivery of only the number of shares of Common Stock actually
delivered and the number of shares of Common Stock for which this Warrant may
thereafter be exercised shall be readjusted (subject to proportionate adjustment
for any intervening exercises of this Warrant) to the number which would then be
in effect had the adjustments made upon the issuance of such rights or warrants
been made on the basis of delivery of only the number of shares of Common Stock
actually delivered. In the event that such rights or warrants are not so issued,
the Purchase Price shall again be adjusted to be the Purchase Price which would
then be in effect if such record date had not been fixed and the number of
shares of Common Stock for which this Warrant may thereafter be exercised shall
again be adjusted
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(subject to proportionate adjustment for any intervening exercises of this
Warrant) to be the number which would then be in effect if such record date had
not been fixed. In determining whether any rights or warrants entitle the holder
to subscribe for or purchase shares of Common Stock at less than such Current
Fair Market Value, and in determining the aggregate offering price of such
shares of Common Stock, there shall be taken into account any consideration
received for such rights or warrants, the value of such consideration, if other
than cash, to be determined by the Board of Directors.
8. LIMITATION ON ISSUANCE AT LESS THAN CURRENT FAIR MARKET VALUE.
The Company shall not, at any time on or after the Issuance Date, issue shares
of Common Stock or Common Stock Equivalents (collectively, the "Newly Issued
Shares"), at a price below the Current Fair Market Value of the Common Stock at
the time of such issuance, unless otherwise agreed in writing by the Majority
Holders. Nothing in this Section 8 shall prohibit the following:
(a) the issuance by the Company of shares of Common Stock or Common
Stock Equivalents pro rata to all holders of the outstanding Common Stock of the
kind and in the circumstances for which adjustments are provided in Section 6 or
7, so long as (i) any adjustment required by Section 6 or 7, as the case may be,
is made and (ii) the Company shall have given notice thereof to the Holder
pursuant to Section 14;
(b) the issuance by the Company of Newly Issued Shares in an
offering for cash for the account of the Company that is underwritten on a firm
commitment basis and is registered under the 1933 Act;
(c) the issuance by the Company of the Series B Shares or the Other
Warrants or shares of Common Stock upon conversion of the Series B Shares in
accordance with the terms thereof or upon exercise of this Warrant or the Other
Warrants in accordance with the terms hereof and thereof;
(d) the issuance by the Company of shares of Common Stock upon
conversion, exercise or exchange of Common Stock Equivalents outstanding as of
the Issuance Date in accordance with their terms in effect on the Issuance Date;
(e) the issuance by the Company of Newly Issued Shares upon grant or
exercise of options for employees, directors and consultants under the ESPP, the
Company's Amended
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1992 Stock Option Plan, the Company's Non-Employee Directors Equity Incentive
Plan or any other stock compensation plan that has been duly adopted by the
Board of Directors and duly approved by the Company's stockholders;
(f) the issuance by the Company for cash of Newly Issued Shares in
connection with a strategic alliance, collaboration, joint venture, partnership
or similar arrangement of the Company with another Person which strategic
alliance, collaboration, joint venture, partnership or similar arrangement
relates to the Company's business as conducted immediately prior thereto and
which Person is engaged in a business similar or related to the business of the
Company so long as (x) the price per Newly Issued Share is not less than 85
percent of the Current Fair Market Value of the common stock on the date of
issuance of such Newly Issued Shares and (y) the consideration other than cash
which the Company receives in connection with such strategic alliance,
collaboration, joint venture, partnership or similar arrangement has a value, as
determined by the Board of directors in its reasonable judgment and set forth in
a Board Resolution, at least equal to the amount by which (i) the product of the
Newly Issued Shares so issued times the Current Fair Market Value of the Common
Stock on the date such Newly issued Shares are issued exceeds (ii) the aggregate
cash consideration received by the Company for such Newly Issued Shares at the
time of issuance thereof;
(g) the issuance by the Company of Common Stock Purchase Warrants
(A) to commercials banks or other institutional lenders incidental to the
incurrence of indebtedness to such banks or institutional lenders by the Company
or any Subsidiary which indebtedness constitutes Permitted Indebtedness and (B)
to equipment vendors or commercial leasing companies incidental to the leasing
of equipment by the Company or any Subsidiary from such vendors or commercial
leasing companies for use in the Company's or such Subsidiary's business;
(h) the issuance by the Company of Newly Issued Shares as all or
part of the consideration payable by the Company in any acquisition of (x) the
business of another Person who, immediately prior to such acquisition, is
principally engaged in a business similar to or related to the business of the
Company and the Subsidiaries or (y) of any pharmaceutical product or the rights
to manufacture, market, and sell any pharmaceutical product and related assets,
in each such case in the preceding clauses (x) and (y) so long as such issuance
and
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acquisition have been duly approved by the Board of Directors as set forth in a
Board Resolution; and
(i) the issuance by the Company of Newly Issued Shares in an amount
and at a price which would not, when taken together with all prior issuances of
Newly Issued Shares issued by the Company in reliance on this clause (i), result
in an Aggregate Diluted Price Percentage that is greater than four percent.
In case at any time on or after the Issuance Date the Company shall
issue shares of Common Stock or Common Stock Equivalents to any Subsidiary, this
Section 8 shall apply to such issuance. In case at any time on or after the
Issuance Date any Subsidiary shall sell any shares of Common Stock or Common
Stock Equivalents owned by such Subsidiary to any Person other than the Company,
such sale shall be deemed for purposes of this Section 8 to be the issuance of
such shares of Common Stock or Common Stock Equivalents by the Company and shall
be subject to the limitations provided herein.
9. EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE. (a) If
any of the following events occur, namely (i) any reclassification or change of
the outstanding shares of Common Stock (other than a change in par value, or
from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination), (ii) any consolidation, merger
statutory exchange or combination of the Company with another corporation as a
result of which holders of Common Stock shall be entitled to receive stock,
securities or other property or assets (including cash) with respect to or in
exchange for such Common Stock, or (iii) any sale or conveyance of the
properties and assets of the Company as, or substantially as, an entirety to any
other Person as a result of which holders of Common Stock shall be entitled to
receive stock, securities or other property or assets (including cash) with
respect to or in exchange for such Common Stock, then the Company or the
successor or purchasing Person, as the case may be, shall execute with the
Holder a written agreement providing that (x) this Warrant shall thereafter
entitle the Holder to purchase the kind and amount of shares of stock and Other
Securities or property or assets (including cash) receivable upon such
reclassification, change, consolidation, merger, statutory exchange,
combination, sale or conveyance by the holder of a number of shares of Common
Stock issuable upon exercise of this Warrant (assuming, for such purposes, a
sufficient number of authorized shares of Common Stock available to exercise
this
Warrant) immediately prior to such reclassification, change, consolidation,
merger, statutory exchange, combination, sale or conveyance assuming such holder
of Common Stock did not exercise such holder's rights of election, if any, as to
the kind or amount of securities, cash or other property receivable upon such
consolidation, merger, statutory exchange, combination, sale or conveyance
(provided that, if the kind or amount of securities, cash or other property
receivable upon such consolidation, merger, statutory exchange, sale or
conveyance is not the same for each share of Common Stock in respect of which
such rights of election shall not have been exercised ("non-electing share"),
then for the purposes of this Section 9 the kind and amount of securities, cash
or other property receivable upon such consolidation, merger, statutory
exchange, sale or conveyance for each non-electing share shall be deemed to be
the kind and amount so receivable per share by a plurality of the non-electing
shares), (y) in the case of any such successor or purchasing Person, upon such
consolidation, merger, statutory exchange, combination, sale or conveyance such
successor or purchasing Person shall be jointly and severally liable with the
Company for the performance of all of the Company's obligations under this
Warrant and the Subscription Agreement and (z) if registration or qualification
is required under the 1933 Act or applicable state law for the public resale by
the Holder of such shares of stock and Other Securities so issuable upon
exercise of this Warrant, such registration or qualification shall be completed
prior to such reclassification, change, consolidation, merger, statutory
exchange, combination or sale. Such written agreement shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Warrant. If, in the case of any such
reclassification, change, consolidation, merger, statutory exchange,
combination, sale or conveyance, the stock or other securities or other property
or assets receivable thereupon by a holder of shares of Common Stock includes
shares of stock, other securities, other property or assets of a Person other
than the Company or any such successor or purchasing Person, as the case may be,
in such reclassification, change, consolidation, merger, statutory exchange,
combination, sale or conveyance, then such written agreement shall also be
executed by such other Person and shall contain such additional provisions to
protect the interests of the Holder as the Board of Directors shall reasonably
consider necessary by reason of the foregoing.
(b) The above provisions of this Section 9 shall similarly apply to
successive reclassifications, changes, consolidations, mergers, combinations,
sales and conveyances.
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(c) If this Section 9 applies to any event or occurrence, Section 5
shall not apply to such event or occurrence.
10. TAX ADJUSTMENTS. The Company may make such reductions in the
Purchase Price, in addition to those required by Sections 4, 5, 6 and 7, as the
Board of Directors considers to be advisable to avoid or diminish any income tax
to holders of Common Stock or rights to purchase Common Stock resulting from any
dividend or distribution of stock (or rights to acquire stock) or from any event
treated as such for income tax purposes.
11. MINIMUM ADJUSTMENT. (a) No adjustment in the Purchase Price (and
no related adjustment in the number of shares of Common Stock which may
thereafter be purchased upon exercise of this Warrant) shall be required unless
such adjustment would require an increase or decrease of at least 1% in the
Purchase Price; provided, however, that any adjustments which by reason of this
Section 11 are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All such calculations under this Warrant
shall be made by the Company and shall be made to the nearest cent or to the
nearest one hundredth of a share, as the case may be.
(b) No adjustment need be made for a change in the par value of the
Common Stock or from par value to no par value or from no par value to par
value.
12. NOTICE OF ADJUSTMENTS. Whenever the Purchase Price is adjusted
as herein provided, the Company shall promptly, but in no event later than ten
Trading Days thereafter, give a notice to the Holder setting forth the Purchase
Price and number of shares of Common Stock which may be purchased upon exercise
of this Warrant after such adjustment and setting forth a brief statement of the
facts requiring such adjustment but which such statement shall not include any
information which would be material non-public information for purposes of the
1934 Act. Failure to deliver such notice shall not affect the legality or
validity of any such adjustment.
13. FURTHER ASSURANCES. The Company will take all action that may be
necessary or appropriate in order that the Company may validly and legally issue
fully paid and nonassessable shares of stock, free from all taxes, liens and
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charges with respect to the issue thereof, on the exercise of all or any portion
of this Warrant from time to time outstanding.
14. NOTICE TO HOLDER PRIOR TO CERTAIN ACTIONS. In case on or after
the Issuance Date:
(a) the Company shall declare a dividend (or any other distribution)
on its Common Stock (other than in cash out of retained earnings); or
(b) the Company shall authorize the granting to the holders of its
Common Stock of rights or warrants to subscribe for or purchase any share of any
class or any other rights or warrants; or
(c) the Board of Directors shall authorize any reclassification of
the Common Stock (other than a subdivision or combination of its outstanding
Common Stock, or a change in par value, or from par value to no par value, or
from no par value to par value), or any consolidation or merger or other
business combination transaction to which the Company is a party and for which
approval of any stockholders of the Company is required, or the sale or transfer
of all or substantially all of the assets of the Company; or
(d) there shall be pending the voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
the Company shall give the Holder, as promptly as possible but in any event at
least ten Trading Days prior to the applicable date hereinafter specified, a
notice stating (x) the date on which a record is to be taken for the purpose of
such dividend, distribution or rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution or rights are to be determined, or (y) the date
on which such reclassification, consolidation, merger, other business
combination transaction, sale, transfer, dissolution, liquidation or winding-up
is expected to become effective or occur, and the date as of which it is
expected that holders of Common Stock of record who shall be entitled to
exchange their Common Stock for securities or other property deliverable upon
such reclassification, consolidation, merger, other business combination
transaction, sale, transfer, dissolution, liquidation or winding-up shall be
determined. Such notice shall
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not include any information which would be material non-public information for
purposes of the 1934 Act. Failure to give such notice, or any defect therein,
shall not affect the legality or validity of such dividend, distribution,
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding-up. In the case of any such action of which the Company
gives such notice to the Holder or is required to give such notice to the
Holder, the Holder shall be entitled to give a subscription form to exercise
this Warrant in whole or in part that is contingent on the completion of such
action.
15. RESERVATION OF STOCK, ETC., ISSUABLE ON EXERCISE OF WARRANTS.
The Company will at all times reserve and keep available out of its authorized
but unissued shares of capital stock, solely for issuance and delivery on the
exercise of this Warrant, a sufficient number of shares of Common Stock (or
Other Securities) to effect the full exercise of this Warrant and the exercise,
conversion or exchange of any other warrant or security of the Company
exercisable for, convertible into, exchangeable for or otherwise entitling the
holder to acquire shares of Common Stock (or Other Securities), and if at any
time the number of authorized but unissued shares of Common Stock (or Other
Securities) shall not be sufficient to effect such exercise, conversion or
exchange, the Company shall take such action as may be necessary to increase its
authorized but unissued shares of Common Stock (or Other Securities) to such
number as shall be sufficient for such purposes.
16. TRANSFER OF WARRANT. This Warrant shall inure to the benefit of
the successors to and assigns of the Holder. This Warrant and all rights
hereunder, in whole or in part, are registrable at the office or agency of the
Company referred to below by the Holder in person or by his duly authorized
attorney, upon surrender of this Warrant properly endorsed accompanied by an
assignment form in the form attached to this Warrant, or other customary form,
duly executed by the transferring Holder.
17. REGISTER OF WARRANTS. The Company shall maintain, at the
principal office of the Company (or such other office as it may designate by
notice to the Holder), a register in which the Company shall record the name and
address of the Person in whose name this Warrant has been issued, as well as the
name and address of each successor and prior owner of such Warrant. The Company
shall be entitled to treat the Person in whose name this Warrant is so
registered as the sole and absolute owner of this Warrant for all purposes.
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18. EXCHANGE OF WARRANT. This Warrant is exchangeable, upon the
surrender hereof by the Holder at the office or agency of the Company referred
to in Section 16, for one or more new Warrants of like tenor representing in the
aggregate the right to subscribe for and purchase the number of shares of Common
Stock which may be subscribed for and purchased hereunder, each of such new
Warrants to represent the right to subscribe for and purchase such number of
shares as shall be designated by the Holder at the time of such surrender.
19. REPLACEMENT OF WARRANT. On receipt by the Company of evidence
reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of this Warrant and (a) in the case of loss, theft or
destruction, of indemnity from the Holder reasonably satisfactory in form to the
Company (and without the requirement to post any bond or other security), or (b)
in the case of mutilation, upon surrender and cancellation of this Warrant, the
Company will execute and deliver to the Holder a new Warrant of like tenor
without charge to the Holder.
20. WARRANT AGENT. The Company may, by written notice to the Holder,
appoint the transfer agent and registrar for the Common Stock as the Company's
agent for the purpose of issuing Common Stock (or Other Securities) on the
exercise of this Warrant pursuant to Section 2, and the Company may, by written
notice to the Holder, appoint an agent having an office in the United States of
America for the purpose of exchanging this Warrant pursuant to Section 18, and
replacing this Warrant pursuant to Section 19, or any of the foregoing, and
thereafter any such exchange or replacement, as the case may be, shall be made
at such office by such agent.
21. REMEDIES. The Company stipulates that the remedies at law of the
Holder in the event of any default or threatened default by the Company in the
performance of or compliance with any of the terms of this Warrant are not and
will not be adequate, and that such terms may be specifically enforced by a
decree for the specific performance of any agreement contained herein or by an
injunction against a violation of any of the terms hereof or otherwise.
22. NO RIGHTS OR LIABILITIES AS A STOCKHOLDER. This Warrant shall
not entitle the Holder to any voting rights or other rights as a stockholder of
the Company. Nothing contained in this Warrant shall be construed as conferring
upon the Holder
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the right to vote or to consent or to receive notice as a stockholder of the
Company on any matters or with respect to any rights whatsoever as a stockholder
of the Company. No dividends or interest shall be payable or accrued in respect
of this Warrant or the interest represented hereby or the Common Stock (or Other
Securities) purchasable hereunder until, and only to the extent that, this
Warrant shall have been exercised in accordance with its terms.
23. NOTICES, ETC. All notices and other communications from the
Company to the Holder shall be in writing and delivered personally, by confirmed
facsimile, by a nationally recognized overnight courier service or mailed by
first class certified mail, postage prepaid, at such facsimile telephone number
or address as may have been furnished to the Company in writing by the Holder or
at the address shown for the Holder on the register of Warrants referred to in
Section 17.
24. TRANSFER RESTRICTIONS. This Warrant has not been and is not
being registered under the provisions of the 1933 Act or any state securities
laws and this Warrant may not be transferred prior to the end of the holding
period applicable to sales hereof under Rule 144(k) under the 1933 Act unless
(1) the transferee is an "accredited investor" (as defined in Regulation D under
the 1933 Act) or a QIB in a transfer that meets the requirements of Rule 144A
and (2) the Holder shall have delivered to the Company an opinion of counsel,
reasonably satisfactory in form, scope and substance to the Company, to the
effect that this Warrant may be sold or transferred without registration under
the 1933 Act. Prior to any such transfer, such transferee shall have represented
in writing to the Company that such transferee has requested and received from
the Company all information relating to the business, properties, operations,
condition (financial or other), results of operations or prospects of the
Company deemed relevant by such transferee; that such transferee has been
afforded the opportunity to ask questions of the Company concerning the
foregoing and has had the opportunity to obtain and review the Registration
Statement and the prospectus related thereto, each as amended or supplemented to
the date of transfer to such transferee, and the reports and other information
concerning the Company which at the time of such transfer have been filed by the
Company with the SEC pursuant to the 1934 Act and which are incorporated by
reference in such prospectus as of the date of such transfer. If such transfer
is intended to assign the rights and obligations of the Holder under the
Subscription
-25-
Agreement, such transfer shall otherwise be made in compliance with Section
10(j) of the Subscription Agreement.
25. RULE 144A INFORMATION REQUIREMENT. Within the period prior to
the expiration of the holding period applicable to sales hereof under Rule
144(k) under the 1933 Act (or any successor provision), the Company covenants
and agrees that it shall, during any period in which it is not subject to
Section 13 or 15(d) under the 1934 Act, make available to the Holder and the
holder of any shares of Common Stock issued upon exercise of this Warrant which
continue to be Restricted Securities in connection with any sale thereof and any
prospective purchaser of this Warrant from the Holder, the information required
pursuant to Rule 144A(d)(4) under the 1933 Act upon the request of the Holder
and it will take such further action as the Holder may reasonably request, all
to the extent required from time to time to enable the Holder to sell this
Warrant and the shares of Common Stock issued upon exercise of this Warrant
without registration under the 1933 Act within the limitation of the exemption
provided by Rule 144A, as Rule 144A may be amended from time to time. Upon the
request of the Holder, the Company will deliver to the Holder a written
statement as to whether it has complied with such requirements.
26. LEGEND. Unless theretofore registered for resale under the 1933
Act, each certificate for shares issued upon exercise of this Warrant shall bear
the following legend:
The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the "1933
Act"). The securities have been acquired for investment and may not
be resold, transferred or assigned in the absence of an effective
registration statement for the securities under the 1933 Act, or an
opinion of counsel that registration is not required under the 1933
Act.
27. AMENDMENT; WAIVER. This Warrant and any terms hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of such change, waiver, discharge
or termination is sought.
28. MISCELLANEOUS. This Warrant shall be construed and enforced in
accordance with and governed by the internal laws of the State of New York. The
headings, captions and footers in this Warrant are for purposes of reference
only, and
-26-
shall not limit or otherwise affect any of the terms hereof. The invalidity or
unenforceability of any provision hereof shall in no way affect the validity or
enforceability of any other provision.
29. ATTORNEYS' FEES. In any litigation, arbitration or court
proceeding between the Company and the Holder relating hereto, the prevailing
party shall be entitled to attorneys' fees and expenses and all costs of
proceedings incurred in enforcing or interpreting the terms of this Warrant.
[Signature Page Follows]
-27-
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed on its behalf by one of its officers thereunto duly authorized.
Dated: QUESTCOR PHARMACEUTICALS, INC.
By:
-----------------------------
Name:
Title:
-28-
ASSIGNMENT
For value ____________________________ hereby sell(s), assign(s) and
transfer(s) unto __________________ (Please insert social security or other
Taxpayer Identification Number of assignee: _____________________) the attached
original, executed Warrant to purchase __________________ share of Common Stock
of Questcor Pharmaceuticals, Inc., a California corporation (the "Company"), and
hereby irrevocably constitutes and appoints __________________ attorney to
transfer the Warrant on the books of the Company, with full power of
substitution in the premises.
In connection with any transfer of the Warrant within the period
prior to the expiration of the holding period applicable to sales thereof under
Rule 144(k) under the 1933 Act (or any successor provision) (other than any
transfer pursuant to a registration statement that has been declared effective
under the 1933 Act), the undersigned confirms that such Warrant is being
transferred:
[ ] To the Company or a subsidiary thereof; or
[ ] To a QIB pursuant to and in compliance with Rule 144A; or
[ ] To an "accredited investor" (as defined in Regulation D under
the 1933 Act) pursuant to and in compliance with the 1933 Act; or
[ ] Pursuant to and in compliance with Rule 144 under the 1933 Act;
and unless the box below is checked, the undersigned confirms that, to the
knowledge of the undersigned, such Warrant is not being transferred to an
"affiliate" (as defined in Rule 144 under the 1933 Act) of the Company.
[ ] The transferee is an affiliate of the Company.
Capitalized terms used in this Assignment and not defined in this
Assignment shall have the respective meanings provided in the Warrant.
Dated: NAME:
---------------------- ----------------------------
----------------------------------
Signature(s)
EXHIBIT 1
FORM OF SUBSCRIPTION
QUESTCOR PHARMACEUTICALS, INC.
(To be signed only on exercise of Warrant)
TO: Questcor Pharmaceuticals, Inc.
3260 Whipple Road
Union City, California 94587
Attention: Chief Financial Officer
Facsimile No.: (510) 400-0715
1. The undersigned Holder of the attached original, executed Warrant
hereby elects to exercise its purchase right under such Warrant with respect to
shares (the "Exercise Shares") of Common Stock, as defined in the Warrant,
of Questcor Pharmaceuticals, Inc., a California corporation (the "Company").
2. The undersigned Holder (check one):
- (a) elects to pay the Aggregate Purchase Price for such shares
of Common Stock (i) in lawful money of the United States or by
the enclosed certified or official bank check payable in
United States dollars to the order of the Company in the
amount of $ , or (ii) by wire transfer of United States
funds to the account of the Company in the amount of $ ,
which transfer has been made before or simultaneously with the
delivery of this Form of Subscription pursuant to the
instructions of the Company;
or
- (b) elects to receive shares of Common Stock having a value
equal to the value of the Warrant calculated in accordance
with Section 2(b) of the Warrant.
3. Please issue a stock certificate or certificates representing the
appropriate number of shares of Common Stock in the name of the undersigned or
in such other name(s) as is specified below:
1-1
Name:
---------------------------------------------------
Address:
---------------------------------------------------
Social Security or Tax Identification Number (if any):
------------------------------
Dated:
---------------------- --------------------------------------------
(Signature must conform to name of Holder as
specified on the face of the Warrant)
--------------------------------------------
--------------------------------------------
(Address)
1-2