THIS REDEMPTION
AGREEMENT (“ Agreement ”) is made and entered
into this 19th day of February, 2008, by and between QUESTCOR
PHARMACEUTICALS, INC., a California corporation (“
Company ”) and SHIRE PHARMACEUTICALS, INC., a Delaware
corporation (“ Shareholder ”).
A. Shareholder
holds of record 2,155,715 shares of the Series A Preferred
Stock, no par value, of the Company (the “ Shares
”), by way of corporate merger with Roberts Pharmaceuticals
Corporation, previous holder of the Shares.
B. The
Company desires to repurchase the Shares from Shareholder and
Shareholder desires to sell the Shares to the Company, for an
aggregate repurchase consideration equal to U.S. $10,347,432 (the
“ Repurchase Price ”) representing a per share
price of U.S. $4.80, all on the terms set forth in this
Agreement.
NOW THEREFORE, for
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree as
follows:
1.
Repurchase . Shareholder agrees to and does hereby sell,
transfer and convey to the Company the Shares, free and clear of
all liens, claims and encumbrances, and the Company agrees to and
does hereby purchase the Shares. In consideration of the sale and
transfer of the Shares, and the waiver and termination of all
rights, interests and obligations relating to or arising from
Shareholder’s ownership of the Shares, including any rights,
interests and obligations under the Company’s Articles of
Incorporation, and any and all other agreements providing
shareholder or investor rights to which Shareholder is or may be
deemed to be a party, and in full payment therefor, the Company
shall pay to Shareholder the Repurchase Price, all on the terms set
forth in this Agreement.
2.
Deliveries . Concurrently with the purchase and sale
contemplated by Section 1, Shareholder shall deliver a duly
executed stock power in the form of Exhibit A attached
hereto transferring the Shares to the Company, together with stock
certificate A-2 representing the Shares registered in the name of
Shareholder for cancellation and return to the Company’s
stock record book. Against delivery by Shareholder of the executed
stock power and the stock certificate representing the Shares, the
Company shall pay the Repurchase Price to Shareholder by wire
transfer in immediately available funds. Shareholder has provided
the correct wire transfer instructions to effect the wire transfer
to the Company.
3.
Representations, Warranties and Covenants of Shareholder .
Shareholder hereby represents, warrants and covenants to the
Company as follows:
(a)
Legal Power . Shareholder has the requisite legal power and
authority to enter into this Agreement, to deliver the Shares and
to carry out and perform its obligations under the terms of this
Agreement, without obtaining the approval or consent of any other
party or authority.
(b)
Title to Shares . Shareholder owns the Shares free and clear
of all liens, charges, claims, encumbrances, security interests,
equities, restrictions on transfer or other defects in title of any
kind or description and, upon delivery of the Shares and receipt of
the Repurchase Price therefor, Shareholder will convey to the
Company valid and marketable title to the Shares, free and clear of
all liens, charges, claims, encumbrances, security interests,
equities, restrictions on transfer or other defects in title or
description.
(c)
Investment Representations .
(i) Shareholder
is a company in the pharmaceutical industry. Due to
Shareholder’s pharmaceutical experience, including its
experience in maintaining and divesting equity positions in other
pharmaceutical companies, Shareholder possesses the expertise to be
able to fend for itself in the transaction contemplated by this
Agreement, and is capable of evaluating and bearing the risks and
merits of selling the Shares for the Repurchase Price and pursuant
to the terms of this Agreement.
(ii) Shareholder
has had, during the course of this transaction and prior hereto,
the opportunity to ask questions of, and receive answers from, the
Company and its management concerning the Company, its operations
and prospects, and the terms and conditions of this
Agreement.
(iii) Shareholder
believes that it has received all such information as it considers
necessary for evaluating the risks and merits of selling the Shares
for the Repurchase Price and pursuant to the terms of this
Agreement and for verifying the accuracy of any information
furnished to it or to which it had access.
(iv) Neither
the Company, nor any affiliate of the Company, has made any
representations or warranty, express or implied, regarding any
aspect of the transaction except as set forth herein this
Agreement, and Shareholder is not relying on any such
representation or warranty not contained in this
Agreement.
(v) Shareholder
acknowledges that this Agreement is being entered into during a
regularly scheduled trading black-out under the Company’s
Insider Trading Compliance Program and that the Company may possess
or have access to material non-public information which has not
been communicated to Shareholder.
(d)
Acceptance of Risk . Shareholder is entering into this
Agreement freely and understands and expressly accepts and assumes
the economic and market risk associated with selling the Shares for
the Repurchase Price and agrees that this Agreement shall be in all
respects effective and not subject to termination or rescission
under any circumstances.
(e)
Tax Consequences . Shareholder acknowledges that the Company
is making no representation or warranty as to the tax consequences
for Shareholder in selling the Shares fo
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