sv3
As
filed with the Securities and Exchange Commission on June 9, 2006.
Registration No. 333-
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
QUESTCOR PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
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California
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33-0476164 |
(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification Number) |
3260 Whipple Road
Union City, California 94587
(510) 400-0700
(Address, including zip code, and telephone number, including area code, of registrants principal executive offices)
James L. Fares
President and Chief Executive Officer
Questcor Pharmaceuticals, Inc.
3260 Whipple Road
Union City, California 94587
(510) 400-0700
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
Michael H. Mulroy, Esq.
Stradling Yocca Carlson & Rauth
660 Newport Center Drive, Suite 1600
Newport Beach, California 92660
(949) 725-4000
Approximate date of commencement of proposed sale to the public: From time to time after this
Registration Statement becomes effective.
If the only securities being registered on this form are being offered pursuant to dividend or
interest reinvestment plans, please check the following box. o
If any of the securities being registered on this form are to be offered on a delayed or continuous
basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in
connection with dividend or interest reinvestment plans, check the following box. þ
If this form is filed to register additional securities for an offering pursuant to Rule 462(b)
under the Securities Act of 1933, please check the following box and list the Securities Act
registration statement number of the earlier effective registration statement for the same
offering. o
If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act
of 1933, check the following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. o
If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the
following box. o
If this Form is a registration statement pursuant to General Instruction I.D. or a post-effective
amendment thereto that shall become effective upon filing with the Commission pursuant to Rule
462(e) under the Securities Act, check the following box. o
If this Form is a post-effective amendment to a registration statement filed pursuant to General
Instruction I.D. filed to register additional securities or additional classes of securities
pursuant to Rule 413(b) under the Securities Act, check the following box. o
CALCULATION OF REGISTRATION FEE
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Proposed Maximum |
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Proposed Maximum |
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Title of Each Class of Securities to Be |
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Amount to be |
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Offering Price Per |
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Aggregate Offering |
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Amount of |
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Registered |
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Registered(1) |
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Unit(1) |
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Price(1) |
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Registration Fee(2) |
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Common stock, no par value(3) |
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Debt securities(4) |
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Equity warrants |
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Debt warrants |
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Total |
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$25,000,000 |
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$2,675 |
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(1) |
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Pursuant to General Instruction II.D of Form S-3, the table lists each class of securities
being registered and the aggregate proceeds to be raised, but does not specify by each class
information as to the amount to be registered, proposed maximum offering price per unit, or
proposed maximum aggregate offering price. Any securities registered hereunder may be sold
separately or as units with other securities registered hereunder. If any debt securities are
issued at an original issue discount, the offering may be in such greater principal amount as
shall result in a maximum aggregate offering price not to exceed $200,000,000. |
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Pursuant to Rule 457(o) of the Securities Act of 1933, the registration fee has been
calculated on the basis of the maximum aggregate offering price of the securities listed. |
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There is being registered hereunder an indeterminate number of shares of common stock as may
from time to time be sold hereunder. In addition, there is being registered hereunder an
indeterminate number of shares of common stock as may from time to time be issued upon
conversion, exercise or exchange of the securities issued directly hereunder. No separate
consideration will be received for any shares of common stock so issued upon conversion or
exchange. |
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Debt securities may be issued in primary offerings or upon the conversion of other securities
registered hereby. |
Questcor hereby amends this registration statement on such date or dates as may be
necessary to delay its effective date until Questcor files a further amendment that specifically
states that this registration statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until this registration statement becomes effective
on such date as the commission acting pursuant to Section 8(a) may determine.
The information in this prospectus is not complete and may be changed.
These securities may not be sold until the registration statement filed with
the Securities and Exchange Commission is effective. This prospectus is not an
offer to sell, nor does it seek an offer to buy, these securities in any
jurisdiction in which the offer or sale is not permitted.
SUBJECT
TO COMPLETION, DATED JUNE 9, 2006
PROSPECTUS
QUESTCOR PHARMACEUTICALS, INC.
$25,000,000
Common Stock
Debt Securities
Warrants
We may, from time to time in one or more offerings, sell up to $25,000,000 in the aggregate of:
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shares of our common stock; |
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our secured or unsecured debt securities, in one or more series, which may be either
senior, senior subordinated or subordinated debt securities; |
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warrants to purchase shares of our common stock; |
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warrants to purchase our debt securities; or |
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any combination of the foregoing. |
We will provide the specific terms of these securities in supplements to this prospectus. The
prospectus supplement may also add, update or change information in this prospectus. You should
read this prospectus and any prospectus supplement carefully before you invest. This prospectus
may not be used to offer or sell securities unless it includes a prospectus supplement.
Our principal executive offices are located at 3260 Whipple Road, Union City, California
94587, and our telephone number is (510) 400-0700.
Our
common stock is quoted on the American Stock Exchange under the
symbol QSC. On June 8,
2006, the closing sale price as quoted on the American Stock Exchange
was $1.69 per share.
Investing in the securities we may offer involves various risks. See the sections entitled
Risk Factors and Note Regarding Forward-Looking Statements on page 2. Additional
risks associated with an investment in our company as well as with the particular types of
securities will be described in the related prospectus supplement.
Neither the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal offense.
The
date of this prospectus is_______, 2006.
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the Securities and
Exchange Commission, or the SEC, using a shelf registration process. Under this shelf process,
we may offer from time to time up to $25,000,000 of the following securities:
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shares of our common stock; |
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our secured or unsecured debt securities, in one or more series, which may be either
senior, senior subordinated or subordinated debt securities; |
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warrants to purchase shares of our common stock; |
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warrants to purchase our debt securities; or |
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any combination of the foregoing. |
This prospectus provides you with a general description of the securities we may offer. Each
time we offer securities, we will provide you with a prospectus supplement that describes the
specific amounts, prices and terms of the securities we offer. The prospectus supplement also may
add, update or change information contained in this prospectus. You should read carefully both
this prospectus and any prospectus supplement together with additional information described below
under Information Incorporated By Reference.
This prospectus does not contain all the information provided in the registration statement we
filed with the SEC. For further information about us or the securities offered hereby, you should
refer to that registration statement, which you can obtain from the SEC as described below under
Where You Can Find More Information.
You should rely only on the information contained or incorporated by reference in this
prospectus or a prospectus supplement. We have not authorized any other person to provide you with
different information. If anyone provides you with different or inconsistent information, you
should not rely on it. This prospectus is not an offer to sell these securities and it is not
soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not
permitted. You should assume that the information appearing in this prospectus or any prospectus
supplement, as well as information we have previously filed with the SEC and incorporated by
reference, is accurate as of the date on the front of those documents only. Our business,
financial condition, results of operations and prospects may have changed since those dates.
We may sell the securities to or through underwriters, dealers or agents or directly to
purchasers. We and our agents reserve the sole right to accept or reject in whole or in part any
proposed purchase of securities. The prospectus supplement, which we will provide to you each time
we offer securities, will set forth the names of any underwriters, dealers or agents involved in
the sale of the securities, and any applicable fee, commission or discount arrangements with them.
See Plan of Distribution.
ABOUT QUESTCOR PHARMACEUTICALS, INC.
We are a specialty pharmaceutical company that focuses on novel therapeutics for the treatment
of diseases and disorders of the central nervous system, or CNS. Our current commercial CNS
products are H.P. Acthar Gel®, which we refer to as Acthar, an injectable drug that is approved for
the treatment of certain CNS disorders with an inflammatory component, including the treatment of
flares associated with multiple sclerosis, or MS, and is also used in treating patients with
infantile spasm, an epileptic syndrome, and Doral® (quazepam), a non-narcotic, selective
benzodiazepine receptor agonist that is indicated for the treatment of insomnia, characterized by
difficulty in falling asleep, frequent nocturnal awakenings, and/or early morning awakenings.
We announced our CNS strategy in April 2005. As part of this strategy, we intend to pursue the
licensing and acquisition of additional CNS commercial products, the development of new products
that have the potential to address unmet medical needs in the CNS field, using both our own
intellectual property and intellectual property
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acquired or licensed from other companies, and selected opportunities to co-promote CNS
commercial products of other pharmaceutical companies.
Our principal executive offices are located at 3260 Whipple Road, Union City, California
94587, and our telephone number is (510) 400-0700. We maintain a website at www.questcor.com. The
reference to our website address does not constitute incorporation by reference into this
prospectus of the information contained at that site. We are organized as a California corporation.
RISK FACTORS
Before making an investment decision, you should carefully consider the risks described
under Risk Factors in the applicable prospectus supplement, together with all of the other
information appearing in this prospectus or incorporated by reference into this prospectus and any
applicable prospectus supplement, in light of your particular investment objectives and financial
circumstances. The risks so described are not the only risks facing our company. Additional risks
not presently known to us or that we currently deem immaterial may also impair our business
operations. Our business, financial condition or results of operations could be materially
adversely affected by any of these risks. The trading price of our securities could decline due to
any of these risks, and you may lose all or part of your investment.
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus, any prospectus supplement, and the documents incorporated by reference herein
include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933,
as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as
amended, or the Exchange Act. Forward-looking statements are those that predict or describe future
events or trends and that do not relate solely to historical matters. You can generally identify
forward-looking statements as statements containing the words believe, expect, will,
anticipate, intend, estimate, project, plan, assume or other similar expressions, or
negatives of those expressions, although not all forward-looking statements contain these
identifying words. All statements contained or incorporated by reference in this prospectus and
any prospectus supplement regarding our future strategy, future operations, projected financial
position, estimated future revenues, projected costs, future prospects, the future of our
industries and results that might be obtained by pursuing managements current plans and objectives
are forward-looking statements.
You should not place undue reliance on our forward-looking statements because the matters they
describe are subject to known and unknown risks, uncertainties and other unpredictable factors,
many of which are beyond our control. Our forward-looking statements are based on the information
currently available to us and speak only as of the date on the cover of this prospectus, the date
of any prospectus supplement, or, in the case of forward-looking statements incorporated by
reference, as of the date of the filing that includes the statement. New risks and uncertainties
arise from time to time, and it is impossible for us to predict these matters or how they may
affect us. Over time, our actual results, performance or achievements will likely differ from the
anticipated results, performance or achievements that are expressed or implied by our
forward-looking statements, and such difference might be significant and materially adverse to our
security holders. We do not undertake and specifically decline any obligation to update any
forward-looking statements or to publicly announce the results of any revisions to any statements
to reflect new information or future events or developments.
We have identified some of the important factors that could cause future events to differ from
our current expectations and they are described in this prospectus and supplements to this
prospectus under the caption Risk Factors as well as in our most recent Annual Report on Form
10-K, including without limitation under the captions Risk Factors, Management Discussion and
Analysis of Financial Condition and Results of Operations and Quantitative and Qualitative
Disclosures About Market Risk, in our most recent Quarterly Report on Form 10-Q, and in other
documents that we may file with the SEC, all of which you should review carefully. Please consider
our forward-looking statements in light of those risks as you read this prospectus and any
prospectus supplement.
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USE OF PROCEEDS
We will retain broad discretion over the use of the net proceeds from the sale of our
securities offered hereby. Except as described in any prospectus supplement, we currently intend
to use the net proceeds from the sale of securities offered by this prospectus to fund
product development and licensing, acquisitions of businesses, technologies or products that
complement our current business. However, we currently have no commitments or agreements for any
specific acquisitions. We may also use the proceeds for working capital, capital expenditures and other general corporate purposes. Pending application of the net proceeds, we intend to invest the net
proceeds of the offering in investment-grade, interest-bearing securities.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratio of earnings to fixed charges for the periods
indicated:
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Quarter Ended |
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Fiscal Years Ended December 31, |
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March 31, 2006 |
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2003 |
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2002 |
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2001 |
Ratio of earnings
to fixed charges |
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8.3 |
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For the purposes of computing the ratio of earnings to fixed charges, earnings consist of net
income (loss) before income taxes plus fixed charges. Fixed charges consist of interest expense,
non-cash amortization of deemed debt discount on convertible debentures, and that portion of rental
expense that we estimate to be representative of interest. Earnings, as defined, were not
sufficient to cover fixed charges by $3,037,000 for the quarter ended March 31, 2006, $832,000 for
fiscal year 2004, $3,791,000 for fiscal year 2003, $2,785,000 for fiscal year 2002 and $8,697,000
for fiscal year 2001.
GENERAL DESCRIPTION OF SECURITIES
We, directly or through agents, dealers or underwriters designated from time to time, may
offer, issue and sell, together or separately, in one or more offerings, up to $25,000,000 in the
aggregate of:
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shares of our common stock, no par value; |
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our secured or unsecured debt securities, in one or more series, which may be either
senior, senior subordinated or subordinated debt securities; |
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warrants to purchase common stock or debt securities; or |
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any combination of the foregoing, either individually or as units consisting of one or
more of the foregoing, each on terms to be determined at the time of sale. |
We may issue the debt securities as exchangeable for and/or convertible into shares of our
common stock. The common stock, the debt securities, and the warrants are collectively referred to
herein as the securities. This prospectus provides you with a general description of the
securities we may offer. Each time we offer securities, we will provide you with a prospectus
supplement that describes the specific amounts, prices and terms of the securities we offer. The
securities involve various risks that we will describe in the section entitled Risk Factors that
will be included in each prospectus supplement.
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DESCRIPTION OF COMMON STOCK AND PREFERRED STOCK
General
We have 112,500,000 shares of capital stock authorized under our Articles of Incorporation,
consisting of 105,000,000 shares of common stock, no par value, and 7,500,000 shares of preferred
stock, no par value. The authorized shares of common stock and the authorized and undesignated
shares of preferred stock are available for issuance without further action by our shareholders,
unless such action is required by applicable law or the rules of any stock exchange or automated
quotation system on which our securities may be listed or traded. If the approval of our
shareholders is not so required, our board of directors may determine not to seek shareholder
approval.
Common Stock
As of May 31, 2006, we have approximately 56,702,163 shares of common stock outstanding.
Holders of common stock are entitled to one vote for each share of common stock held on all matters
submitted to a vote of shareholders, except in the election of directors shareholders are entitled
to cumulate their votes if timely notice is given pursuant to California law. Directors are elected
by a plurality of the votes of the shares present in person or by proxy at the meeting and entitled
to vote in such election. Holders of common stock are entitled to receive ratably any dividends as
may be declared by the board of directors out of funds legally available for distribution, after
provision has been made for any preferential dividend rights of outstanding preferred stock, if
any. Upon our liquidation, dissolution or winding up, the holders of common stock are entitled to
receive ratably the net assets available after the payment of all of our debts and other
liabilities, and after the satisfaction of the rights of any outstanding preferred stock, if any.
Holders of the common stock have no preemptive, subscription, redemption or conversion rights. The
rights, powers, preferences and privileges of holders of common stock are subordinate to, and may
be adversely affected by, the rights of the holders of shares of any series of preferred stock that
we may designate and issue in the future.
Our common stock is listed on the American Stock Exchange under the symbol QSC.
Computershare Trust Company, Inc. is the transfer agent and registrar for our common stock. Its
address is 350 Indiana Street, Suite 800, Golden, CO 80401, and its telephone number is (303)
262-0600.
Outstanding Preferred Stock
As of May 31, 2006, we have designated 2,155,715 shares of our preferred stock as Series A
Preferred Stock, all of which shares are issued and outstanding. Each share of convertible
preferred stock has a liquidation preference of $4.639 per share (equaling $10 million in the
aggregate) and is initially convertible into 1 share of our common stock, representing a conversion
price of $4.639 per share, subject to customary adjustments. Only after holders of the convertible
preferred stock have received their liquidation preference and any accrued and unpaid dividends
will we distribute assets, if any are remaining, to our common shareholders.
Registered holders of Series A Preferred Stock are entitled to receive dividends concurrently
with dividends on Questcors common stock, if any, on an as-converted basis, when and as declared
by Questcors Board of Directors out of funds legal available therefor. Such dividends shall be
payable only when, as and if declared by Questcors Board of Directors and shall be non-cumulative.
We may elect to automatically convert some or all of the Series A preferred stock into shares
of our common stock if the closing price of our common stock has exceeded $12.00 per share for at
least 15 consecutive trading days.
The holders of the preferred stock are entitled to one vote per share on all questions upon
which the holders of stock are entitled to vote and shall vote together on all matters presented to
shareholders, except those matters for which a vote by class or series is required by state law.
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Preferred Share Purchase Rights
On February 11, 2003, we entered into a rights agreement with Computershare Trust Company,
Inc., as rights agent. The rights agreement provides for one preferred share purchase right for
each outstanding share of our common stock (subject to adjustment for stock splits, stock dividends
and recapitalizations with respect to our common stock). The rights trade automatically with shares
of common stock and become exercisable only under the circumstances described below. The rights are
designed to protect the interests of Questcor and our shareholders against coercive takeover
tactics. The purpose of the rights is to encourage potential acquirers to negotiate with our board
prior to attempting a takeover and to provide the board with leverage in negotiating on behalf of
all shareholders the terms of any proposed takeover. The rights may have anti-takeover effects. The
rights should not, however, interfere with a merger or other business combination approved by our
board.
Until a right is exercised, the right does not entitle the holder to additional rights as a
shareholder, including, without limitation, the right to vote or to receive dividends. Upon
becoming exercisable, each right entitles its holder to purchase from Questcor one one-hundredth of
a share of Series C Junior Participating Preferred Stock at an exercise or purchase price of $10.00
per one-hundredth of a preferred share, subject to adjustment. Each share of Series C Junior
Participating Preferred Stock entitles the holder to receive quarterly dividends payable in cash of
an amount per share equal to the greater of (a) $1.00, or (b) 100 times the aggregate per share
amount of all cash dividends paid on the shares of common stock
The dividends on the Series C Junior Participating Preferred Stock are cumulative. Holders of
Series C Junior Participating Preferred Stock have voting rights entitling them to 100 votes per
share on all matters submitted to a vote of our shareholders.
In general, the rights will not be exercisable until the distribution date, which is the
earlier of (a) the date of the first Section 11.1.2 Event (as defined below) or the date of the
first Section 13 Event (as defined below) and (b) the close of business on the tenth business day
(or such later date as our board shall determine) after the commencement of a tender or exchange
offer for 15% or more of our outstanding common stock. A person or group acquiring at least 15% of
our common stock is referred to as an acquiring person below.
In the event that a person or group acquires beneficial ownership of 15% or more of our
outstanding common stock as described in Section 11(a)(ii) of the rights agreement (a Section
11.1.2 Event) and the expiration date has not occurred prior to the tenth business day after a
Section 11.1.2 Event, each holder of a right will have the right to exercise and receive common
stock having a value equal to two times the exercise price of the right. The exercise price is the
purchase price times the number of shares of common stock associated with each right. Any rights
that are at any time beneficially owned by an acquiring person will be null and void and any holder
of such right will be unable to exercise or transfer the right.
Sigma-Tau Finanziaria SpA and its affiliates shall not be deemed an acquiring person unless
they purchase more than an additional 800,000 shares of Questcors common stock, other than
purchases to maintain their percentage ownership in Questcor following issuances by us of our
common stock (excluding issuances relating to stock option plans, other equity incentive
arrangements or pursuant to the conversion of the convertible securities outstanding as of August
8, 2005).
In the event that at any time prior to the earlier of the redemption date or the expiration
date as defined in the rights agreement, a Section 13 Event as described in Section 13 of the
rights agreement occurs, each right becomes exercisable and each right will entitle its holder to
receive common stock of the principal party having a value equal to two times the exercise price of
the right. A Section 13 Event is where we either (a) engage in a merger or other business
combination in which we are not the surviving corporation, (b) engage in a merger or other business
combination in which we are the surviving corporation but all or a part of our common stock is
changed or exchanged, or (c) sell or transfer 50% or more of our assets, cash flow or earning
power.
The rights will expire at the close of business on February 10, 2013, unless redeemed before
that time. At any time prior to the earlier of (a) a Section 11.1.2 Event, (b) the date of the
first Section 13 Event, and (c) February 10, 2013, our board may redeem the rights in whole, but
not in part, at a price of $0.01 per right. Prior to the date of the first Section 11.1.2 Event or
the date of the first Section 13 Event, we may amend the rights agreement in any respect without
the approval of the rights holders. However, after the date of the first Section 11.1.2 Event or
the date of the first Section 13 Event, the rights agreement may not be amended in any way that
would adversely affect
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the holders of rights (other than any acquiring person or a principal party). The Series C
Junior Participating Preferred Stock ranks junior to all other existing and future series of our
preferred stock as to the payment of dividends and the distribution of assets unless the terms of
the series specify otherwise. Holders should refer to the applicable provisions of the rights
agreement, which we filed with the SEC as Exhibit 4 to our Current Report on Form 8-K filed
February 14, 2003.
Undesignated Preferred Stock
In addition to our Series A Preferred Stock, our Certificate of Incorporation permits us to
issue up to 5,344,285 shares of preferred stock in one or more series and with rights and
preferences that may be fixed or designated by our board of directors without any further action by
our shareholders. We are required to reserve 1,000,000 of these shares pursuant to the rights
agreement discussed above. The designation, powers, preferences, rights and qualifications,
limitations and restrictions of the preferred stock of each series will be fixed by the certificate
of designation relating to such series, which will specify the terms of the preferred stock,
including:
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the designation of the series, which may be by distinguishing number, letter or title; |
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the number of shares of the series, which number the board of directors may thereafter
(except where otherwise provided in the preferred stock designation) increase or decrease
(but not below the number of shares thereof then outstanding); |
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whether dividends, if any, shall be cumulative or noncumulative and the dividend rate of the series; |
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the dates on which dividends, if any, shall be payable; |
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the redemption rights and price or prices, if any, for shares of the series; |
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the terms and amount of any sinking fund provided for the purchase or redemption of shares of the series; |
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the amounts payable on shares of the series in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of Questcor; |
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whether the shares of the series shall be convertible into shares of any other class or
series, or any other security, of Questcor or any other corporation, and, if so, the
specification of such other class or series or such other security, the conversion price or
prices or rate or rates, any adjustments thereof, the date or dates as of which such shares
shall be convertible and all other terms and conditions upon which such conversion may be
made; |
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restrictions on the issuance of shares of the same series or of any other class or
series; and |
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the voting rights, if any, of the holders of shares of the series, provided that no
share of preferred stock of any series will be entitled to more than one vote per share of
preferred stock. |
If our board of directors elects to exercise this authority, the rights and privileges of
holders of shares of our common stock could be made subject to the rights and privileges of such
series of preferred stock. Although our board of directors has no intention at the present time of
doing so, it could issue a series of preferred stock that could, depending on the terms of such
series, impede the completion of a merger, tender offer or other takeover attempt.
DESCRIPTION OF DEBT SECURITIES
This prospectus describes certain general terms and provisions of our debt securities. When we
offer to sell a particular series of debt securities, we will describe the specific terms of the
series in a supplement to this prospectus. The following description of debt securities will apply
to the debt securities offered by this prospectus
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unless we provide otherwise in the applicable prospectus supplement. The applicable prospectus
supplement for a particular series of debt securities may specify different or additional terms.
We may offer under this prospectus up to $25,000,000 aggregate principal amount of secured or
unsecured debt securities, or if debt securities are issued at a discount, or in a foreign currency
or composite currency, such principal amount as may be sold for an initial public offering price of
up to $25,000,000. The debt securities may be either senior debt securities, senior subordinated
debt securities or subordinated debt securities.
The debt securities offered hereby will be issued under an indenture between us and a trustee.
We have filed a copy of the form indenture as an exhibit to the registration statement and you
should read the indenture for provisions that may be important to you. We have summarized select
portions of the indenture below. The summary is not complete.
General
The terms of each series of debt securities will be established by or pursuant to a resolution
of our Board of Directors and detailed or determined in the manner provided in a Board of
Directors resolution, an officers certificate or by a supplemental indenture. The particular
terms of each series of debt securities will be described in a prospectus supplement relating to
the series, including any pricing supplement.
We can issue an unlimited amount of debt securities under the indenture that may be in one or
more series with the same or various maturities, at par, at a premium or at a discount. We will set
forth in a prospectus supplement (including any pricing supplement) relating to any series of debt
securities being offered, the initial offering price, the aggregate principal amount and the
following terms of the debt securities:
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the title of the debt securities; |
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the price or prices (expressed as a percentage of the aggregate principal amount) at
which we will sell the debt securities; |
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any limit on the aggregate principal amount of the debt securities; |
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the date or dates on which we will pay the principal on the debt securities; |
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the rate or rates (which may be fixed or variable) per annum or the method used to
determine the rate or rates (including any commodity, commodity index, stock exchange index
or financial index) at which the debt securities will bear interest, the date or dates from
which interest will accrue, the date or dates on which interest will commence and be
payable and any regular record date for the interest payable on any interest payment date; |
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the place or places where the principal of, premium, and interest on the debt securities will be payable; |
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the terms and conditions upon which we may redeem the debt securities; |
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any obligation we have to redeem or purchase the debt securities pursuant to any sinking
fund or analogous provisions or at the option of a holder of debt securities; |
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the dates on which and the price or prices at which we will repurchase the debt
securities at the option of the holders of debt securities and other detailed terms and
provisions of these repurchase obligations; |
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the denominations in which the debt securities will be issued, if other than
denominations of $1,000 and any integral multiple thereof; |
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whether the debt securities will be issued in the form of certificated debt securities
or global debt securities; |
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the portion of principal amount of the debt securities payable upon declaration of
acceleration of the maturity date, if other than the principal amount; |
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the currency of denomination of the debt securities; |
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the designation of the currency, currencies or currency units in which payment of
principal of, premium and interest on the debt securities will be made; |
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if payments of principal of, premium or interest on the debt securities will be made in
one or more currencies or currency units other than that or those in which the debt
securities are denominated, the manner in which the exchange rate with respect to these
payments will be determined; |
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the manner in which the amounts of payment of principal of, premium or interest on the
debt securities will be determined, if these amounts may be determined by reference to an
index based on a currency or currencies other than that in which the debt securities are
denominated or designated to be payable or by reference to a commodity, commodity index,
stock exchange index or financial index; |
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any provisions relating to any security provided for the debt securities; |
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any addition to or change in the events of default described in this prospectus or in
the indenture with respect to the debt securities and any change in the acceleration
provisions described in this prospectus or in the indenture with respect to the debt
securities; |
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any addition to or change in the covenants described in this prospectus or in the
indenture with respect to the debt securities; |
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any other terms of the debt securities, which may modify or delete any provision of the
indenture as it applies to that series; and |
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any depositaries, interest rate calculation agents, exchange rate calculation agents or
other agents with respect to the debt securities. |
We may issue debt securities that are exchangeable and/or convertible into shares of our
common stock. The terms, if any, on which the debt securities may be exchanged for and/or
converted will be set forth in the applicable prospectus supplement. Such terms may include
provisions for conversion, either mandatory, at the option of the holder or at our option, in which
case the number of shares of common stock or other securities to be received by the holders of debt
securities would be calculated as of a time and in the manner stated in the prospectus supplement.
We may issue debt securities that provide for an amount less than their stated principal
amount to be due and payable upon declaration of acceleration of their maturity pursuant to the
terms of the indenture. We will provide you with information on the federal income tax
considerations and other special considerations applicable to any of these debt securities in the
applicable prospectus supplement.
If we denominate the purchase price of any of the debt securities in a foreign currency or
currencies or a foreign currency unit or units, or if the principal of and any premium and interest
on any series of debt securities is payable in a foreign currency or currencies or a foreign
currency unit or units, we will provide you with information on the restrictions, elections,
general tax considerations, specific terms and other information with respect to that issue of debt
securities and such foreign currency or currencies or foreign currency unit or units in the
applicable prospectus supplement.
Payment of Interest and Exchange
Each debt security will be represented by either one or more global securities registered in
the name of The Depository Trust Company, as Depositary, or a nominee of the Depositary (we will
refer to any debt security
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represented by a global debt security as a book-entry debt security), or a certificate issued
in definitive registered form (we will refer to any debt security represented by a certificated
security as a certificated debt security), as described in the applicable prospectus supplement.
Except as described under Global Debt Securities and Book-Entry System below, book-entry debt
securities will not be issuable in certificated form.
Certificated Debt Securities. You may transfer or exchange certificated debt securities at the
trustees office or paying agencies in accordance with the terms of the indenture. No service
charge will be made for any transfer or exchange of certificated debt securities, but we may
require payment of a sum sufficient to cover any tax or other governmental charge payable in
connection with a transfer or exchange.
You may transfer certificated debt securities and the right to receive the principal of,
premium and interest on certificated debt securities only by surrendering the old certificate
representing those certificated debt securities and either we or the trustee will reissue the old
certificate to the new holder or we or the trustee will issue a new certificate to the new holder.
Global Debt Securities and Book-Entry System. Each global debt security representing
book-entry debt securities will be deposited with, or on behalf of, the Depositary, and registered
in the name of the Depositary or a nominee of the Depositary.
The Depositary has indicated it intends to follow the following procedures with respect to
book-entry debt securities.
Ownership of beneficial interests in book-entry debt securities will be limited to persons
that have accounts with the Depositary for the related global debt security, whom we refer to as
participants, or persons that may hold interests through participants. Upon the issuance of a
global debt security, the Depositary will credit, on its book-entry registration and transfer
system, the participants accounts with the respective principal amounts of the book-entry debt
securities represented by the global debt security beneficially owned by such participants. The
accounts to be credited will be designated by any dealers, underwriters or agents participating in
the distribution of the book-entry debt securities. Ownership of book-entry debt securities will be
shown on, and the transfer of the ownership interests will be effected only through, records
maintained by the Depositary for the related global debt security (with respect to interests of
participants) and on the records of participants (with respect to interests of persons holding
through participants). The laws of some states may require that certain purchasers of securities
take physical delivery of such securities in definitive form. These laws may impair the ability to
own, transfer or pledge beneficial interests in book-entry debt securities.
So long as the Depositary for a global debt security, or its nominee, is the registered owner
of that global debt security, the Depositary or its nominee, as the case may be, will be considered
the sole owner or holder of the book-entry debt securities represented by such global debt security
for all purposes under the indenture. Except as described herein, beneficial owners of book-entry
debt securities will not be entitled to have securities registered in their names, will not receive
or be entitled to receive physical delivery of a certificate in definitive form representing
securities and will not be considered the owners or holders of those securities under the
indenture. Accordingly, to exercise any rights of a holder under the indenture, each person
beneficially owning book-entry debt securities must rely on the procedures of the Depositary for
the related global debt security and, if that person is not a participant, on the procedures of the
participant through which that person owns its interest.
We understand, however, that under existing industry practice, the Depositary will authorize
the persons on whose behalf it holds a global debt security to exercise certain rights of holders
of debt securities, and the indenture provides that we, the trustee and our respective agents will
treat as the holder of a debt security the persons specified in a written statement of the
Depositary with respect to that global debt security for purposes of obtaining any consents or
directions required to be given by holders of the debt securities pursuant to the indenture.
We will make payments of principal of, and premium and interest on book-entry debt securities
to the Depositary or its nominee, as the case may be, as the registered holder of the related
global debt security. We, the trustee and any other agent of ours or agent of the trustee will not
have any responsibility or liability for any aspect of the records relating to or payments made on
account of beneficial ownership interests in a global debt security or for maintaining, supervising
or reviewing any records relating to such beneficial ownership interests.
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We expect that the Depositary, upon receipt of any payment of principal of, premium or
interest on a global debt security, will immediately credit participants accounts with payments in
amounts proportionate to the respective amounts of book-entry debt securities held by each
participant as shown on the records of the Depositary. We also expect that payments by participants
to owners of beneficial interests in book-entry debt securities held through those participants
will be governed by standing customer instructions and customary practices, as is now the case with
the securities held for the accounts of customers in bearer form or registered in street name,
and will be the responsibility of those participants.
We will issue certificated debt securities in exchange for each global debt security if the
Depositary is at any time unwilling or unable to continue as Depositary or ceases to be a clearing
agency registered under the Exchange Act, and a successor Depositary registered as a clearing
agency under the Exchange Act is not appointed by us within 90 days. In addition, we may at any
time and in our sole discretion determine not to have any of the book-entry debt securities of any
series represented by one or more global debt securities and, in that event, we will issue
certificated debt securities in exchange for the global debt securities of that series. Global debt
securities will also be exchangeable by the holders for certificated debt securities if an event of
default with respect to the book-entry debt securities represented by those global debt securities
has occurred and is continuing. Any certificated debt securities issued in exchange for a global
debt security will be registered in such name or names as the Depositary shall instruct the
trustee. We expect that such instructions will be based upon directions received by the Depositary
from participants with respect to ownership of book-entry debt securities relating to such global
debt security.
We have obtained the foregoing information in this section concerning the Depositary and the
Depositarys book-entry system from sources we believe to be reliable, but we take no
responsibility for the accuracy of this information.
No Protection in the Event of a Change in Control
Unless we provide otherwise in the applicable prospectus supplement, the debt securities will
not contain any provisions which may afford holders of the debt securities protection in the event
we have a change in control or in the event of a highly leveraged transaction (whether or not such
transaction results in a change in control).
Covenants
Unless we provide otherwise in the applicable prospectus supplement, the debt securities will
not contain any restrictive covenants, including covenants restricting us or any of our
subsidiaries from incurring, issuing, assuming or guarantying any indebtedness secured by a lien on
any of our or our subsidiaries property or capital stock, or restricting us or any of our
subsidiaries from entering into any sale and leaseback transactions.
Consolidation, Merger and Sale of Assets
Unless we provide otherwise in the applicable prospectus supplement, we may not consolidate
with or merge into, or convey, transfer or lease all or substantially all of our properties and
assets to, any person (a successor person), and we may not permit any person to merge into, or
convey, transfer or lease its properties and assets substantially as an entirety to us, unless:
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the successor person is a corporation, partnership, trust or other entity organized and
validly existing under the laws of any U.S. domestic jurisdiction and expressly assumes our
obligations on the debt securities and under the indenture; |
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immediately after giving effect to the transaction, no event of default, and no event
which, after notice or lapse of time, or both, would become an event of default, shall have
occurred and be continuing under the indenture; and |
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certain other conditions are met. |
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Events of Default
Unless we provide otherwise in the applicable prospectus supplement, event of default means
with respect to any series of debt securities, any of the following:
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default in the payment of any interest upon any debt security of that series when it
becomes due and payable, and continuance of that default for a period of 30 days (unless
the entire amount of such payment is deposited by us with the trustee or with a paying
agent prior to the expiration of the 30-day period); |
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default in the payment of principal of or premium on any debt security of that series
when due and payable; |
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default in the deposit of any sinking fund payment, when and as due in respect of any
debt security of that series; |
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default in the performance or breach of any other covenant or warranty by us in the
indenture (other than a covenant or warranty that has been included in the indenture solely
for the benefit of a series of debt securities other than that series), which default
continues uncured for a period of 60 days after we receive written notice from the trustee
or we and the trustee receive written notice from the holders of at least 25% in principal
amount of the outstanding debt securities of that series as provided in the indenture; |
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certain events of our bankruptcy, insolvency or reorganization; and |
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any other event of default provided with respect to debt securities of that series that
is described in the applicable prospectus supplement accompanying this prospectus. |
No event of default with respect to a particular series of debt securities (except as to
certain events of bankruptcy, insolvency or reorganization) necessarily constitutes an event of
default with respect to any other series of debt securities. An event of default may also be an
event of default under our bank credit agreements or other debt securities in existence from time
to time and under certain guaranties by us of any subsidiary indebtedness. In addition, certain
events of default or an acceleration under the indenture may also be an event of default under some
of our other indebtedness outstanding from time to time.
Unless we provide otherwise in the applicable prospectus supplement, if an event of default
with respect to debt securities of any series at the time outstanding occurs and is continuing
(other than certain events of our bankruptcy, insolvency or reorganization), then the trustee or
the holders of not less than 25% in principal amount of the outstanding debt securities of that
series may, by written notice to us (and to the trustee if given by the holders), declare to be due
and payable immediately the principal (or, if the debt securities of that series are discount
securities, that portion of the principal amount as may be specified in the terms of that series)
of and accrued and unpaid interest, if any, of all debt securities of that series. In the case of
an event of default resulting from certain events of bankruptcy, insolvency or reorganization, the
principal (or such specified amount) of and accrued and unpaid interest, if any, of all outstanding
debt securities will become and be immediately due and payable without any declaration or other act
by the trustee or any holder of outstanding debt securities. At any time after a declaration of
acceleration with respect to debt securities of any series has been made, but before the trustee
has obtained a judgment or decree for payment of the money due, the holders of a majority in
principal amount of the outstanding debt securities of that series may, subject to our having paid
or deposited with the trustee a sum sufficient to pay overdue interest and principal which has
become due other than by acceleration and certain other conditions, rescind and annul such
acceleration if all events of default, other than the non-payment of accelerated principal and
interest, if any, with respect to debt securities of that series, have been cured or waived as
provided in the indenture. For information as to waiver of defaults see the discussion under
Modification and Waiver below. We refer you to the prospectus supplement relating to any series
of debt securities that are discount securities for the particular provisions relating to
acceleration of a portion of the principal amount of the discount securities upon the occurrence of
an event of default and the continuation of an event of default.
Unless we provide otherwise in the applicable prospectus supplement, the indenture will
provide that the trustee will be under no obligation to exercise any of its rights or powers under
the indenture at the request of any holder of outstanding debt securities, unless the trustee
receives indemnity satisfactory to it against any loss, liability or expense. Subject to certain
rights of the trustee, the holders of a majority in principal amount of the outstanding
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debt securities of any series shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the trustee or exercising any trust or power
conferred on the trustee with respect to the debt securities of that series.
Unless we provide otherwise in the applicable prospectus supplement, no holder of any debt
security of any series will have any right to institute any proceeding, judicial or otherwise, with
respect to the indenture or for the appointment of a receiver or trustee, or for any remedy under
the indenture, unless:
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that holder has previously given to the trustee written notice of a continuing event of
default with respect to debt securities of that series; and |
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the holders of at least 25% in principal amount of the outstanding debt securities of
that series have made written request, and offered reasonable indemnity, to the trustee to
institute such proceeding as trustee, and the trustee shall not have received from the
holders of a majority in principal amount of the outstanding debt securities of that series
a direction inconsistent with that request and has failed to institute the proceeding
within 60 days. |
Notwithstanding the foregoing, the holder of any debt security will have an absolute and
unconditional right to receive payment of the principal of, premium and any interest on that debt
security on or after the due dates expressed in that debt security and to institute suit for the
enforcement of payment.
The indenture requires us, within 90 days after the end of our fiscal year, to furnish to the
trustee a certificate as to compliance with the indenture. The indenture provides that the trustee
may withhold notice to the holders of debt securities of any series of any default or event of
default (except in payment on any debt securities of that series) with respect to debt securities
of that series if it in good faith determines that withholding notice is in the interest of the
holders of those debt securities.
Modification and Waiver
Unless we provide otherwise in the applicable prospectus supplement, we and the trustee may
modify and amend the indenture with the consent of the holders of at least a majority in principal
amount of the outstanding debt securities of each series affected by the modifications or
amendments. We and the trustee may not make any modification or amendment without the consent of
the holder of each affected debt security then outstanding if that amendment will:
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change the amount of debt securities whose holders must consent to an amendment or
waiver; |
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reduce the rate of or extend the time for payment of interest (including default
interest) on any debt security; |
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reduce the principal of or premium on or change the fixed maturity of any debt security
or reduce the amount of, or postpone the date fixed for, the payment of any sinking fund or
analogous obligation with respect to any series of debt securities; |
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reduce the principal amount of discount securities payable upon acceleration of
maturity; |
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waive a default in the payment of the principal of, premium or interest on any debt
security (except a rescission of acceleration of the debt securities of any series by the
holders of at least a majority in aggregate principal amount of the then outstanding debt
securities of that series and a waiver of the payment default that resulted from that
acceleration); |
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make the principal of or premium or interest on any debt security payable in currency
other than that stated in the debt security; |
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make any change to certain provisions of the indenture relating to, among other things,
the right of holders of debt securities to receive payment of the principal of, premium and
interest on those debt securities, the right of holders to institute suit for the
enforcement of any payment or the right of holders to waive past defaults or to amend the
limitations described in this bullet point; or |
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waive a redemption payment with respect to any debt security or change any of the
provisions with respect to the redemption of any debt securities. |
Except for certain specified provisions, the holders of at least a majority in principal
amount of the outstanding debt securities of any series may, on behalf of the holders of all debt
securities of that series, waive our compliance with provisions of the indenture. The holders of a
majority in principal amount of the outstanding debt securities of any series may, on behalf of the
holders of all the debt securities of that series, waive any past default under the indenture with
respect to that series and its consequences, except a default in the payment of the principal of,
premium or any interest on any debt security of that series; PROVIDED, HOWEVER, that the holders of
a majority in principal amount of the outstanding debt securities of any series may rescind an
acceleration and its consequences, including any related payment default that resulted from the
acceleration.
Defeasance of Debt Securities and Certain Covenants in Certain Circumstances
Legal Defeasance. The indenture provides that, unless the terms of the applicable series of
debt securities provide otherwise, we may be discharged from any and all obligations in respect of
the debt securities of any series (except for certain obligations to register the transfer or
exchange of debt securities of the series, to replace stolen, lost or mutilated debt securities of
the series, and to maintain paying agencies and certain provisions relating to the treatment of
funds held by paying agents). We will be so discharged upon the deposit with the trustee, in trust,
of money and/or U.S. government obligations or, in the case of debt securities denominated in a
single currency other than U.S. dollars, foreign government obligations (as described at the end of
this section), that, through the payment of interest and principal in accordance with their terms,
will provide money in an amount sufficient in the opinion of a nationally recognized firm of
independent public accountants to pay and discharge each installment of principal, premium and
interest on and any mandatory sinking fund payments in respect of the debt securities of that
series on the stated maturity of such payments in accordance with the terms of the indenture and
those debt securities.
This discharge may occur only if, among other things, we have delivered to the trustee an
officers certificate and an opinion of counsel stating that we have received from, or there has
been published by, the United States Internal Revenue Service a ruling or, since the date of
execution of the indenture, there has been a change in the applicable United States federal income
tax law, in either case to the effect that holders of the debt securities of such series will not
recognize income, gain or loss for United States federal income tax purposes as a result of the
deposit, defeasance and discharge and will be subject to United States federal income tax on the
same amount and in the same manner and at the same times as would have been the case if the
deposit, defeasance and discharge had not occurred.
Defeasance of Certain Covenants. The indenture provides that, unless the terms of the
applicable series of debt securities provide otherwise, upon compliance with certain conditions, we
may omit to comply with the restrictive covenants contained in the indenture, as well as any
additional covenants contained in a supplement to the indenture, a board resolution or an officers
certificate delivered pursuant to the indenture. The conditions include:
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depositing with the trustee money and/or U.S. government obligations or, in the case of
debt securities denominated in a single currency other than U.S. dollars, foreign
government obligations, that, through the payment of interest and principal in accordance
with their terms, will provide money in an amount sufficient in the opinion of a nationally
recognized firm of independent public accountants to pay principal, premium and interest on
and any mandatory sinking fund payments in respect of the debt securities of that series on
the stated maturity of those payments in accordance with the terms of the indenture and
those debt securities; and |
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delivering to the trustee an opinion of counsel to the effect that the holders of the
debt securities of that series will not recognize income, gain or loss for United States
federal income tax purposes as a result of |
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the deposit and related covenant defeasance and will be subject to United States federal
income tax in the same amount and in the same manner and at the same times as would have
been the case if the deposit and related covenant defeasance had not occurred. |
Covenant Defeasance and Events of Default. In the event we exercise our option, as described
above, not to comply with certain covenants of the indenture with respect to any series of debt
securities and the debt securities of that series are declared due and payable because of the
occurrence of any event of default, the amount of money and/or U.S. government obligations or
foreign government obligations on deposit with the trustee will be sufficient to pay amounts due on
the debt securities of that series at the time of their stated maturity but may not be sufficient
to pay amounts due on the debt securities of that series at the time of the acceleration resulting
from the event of default. However, we will remain liable for those payments.
Foreign government obligations means, with respect to debt securities of any series that are
denominated in a currency other than U.S. dollars:
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direct obligations of the government that issued or caused to be issued such currency
for the payment of which obligations its full faith and credit is pledged, which are not
callable or redeemable at the option of the issuer thereof; or |
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obligations of a person controlled or supervised by or acting as an agency or
instrumentality of that government the timely payment of which is unconditionally
guaranteed as a full faith and credit obligation by that government, which are not callable
or redeemable at the option of the issuer thereof. |
DESCRIPTION OF WARRANTS
We may issue debt warrants to purchase debt securities, as well as equity warrants to purchase
common stock. The warrants may be issued independently or together with any securities and may be
attached to or separate from the securities. The warrants are to be issued under warrant agreements
to be entered into between us and a bank or trust company, as warrant agent, all as shall be set
forth in the prospectus supplement relating to warrants being offered pursuant to such prospectus
supplement. The following description of warrants will apply to the warrants offered by this
prospectus unless we provide otherwise in the applicable prospectus supplement. The applicable
prospectus supplement for a particular series of warrants may specify different or additional
terms.
Debt Warrants
The applicable prospectus supplement will describe the terms of debt warrants offered, the
warrant agreement relating to the debt warrants and the debt warrant certificates representing the
debt warrants, including the following:
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the title of the debt warrants; |
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the aggregate number of the debt warrants; |
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the price or prices at which the debt warrants will be issued; |
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the provisions, if any, for changes to or adjustments in the exercise price; |
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the designation, aggregate principal amount and terms of the debt securities purchasable
upon exercise of the debt warrants, and the procedures and conditions relating to the
exercise of the debt warrants; |
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the designation and terms of any related debt securities with which the debt warrants
are issued, and the number of the debt warrants issued with each debt security; |
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the date, if any, on and after which the debt warrants and the related debt securities
will be separately transferable; |
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the principal amount of debt securities purchasable upon exercise of each debt warrant; |
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the date on which the right to exercise the debt warrants will commence, and the date on
which this right will expire; |
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the maximum or minimum number of debt warrants which may be exercised at any time; |
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a discussion of any material federal income tax consequences of holding or exercising
the debt warrants; and |
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any other terms of the debt warrants and terms, procedures and limitations relating to
the exercise of debt warrants. |
Debt warrant certificates will be exchangeable for new debt warrant certificates of different
denominations, and debt warrants may be exercised at the corporate trust office of the warrant
agent or any other office indicated in the prospectus supplement. Prior to the exercise of their
debt warrants, holders of debt warrants will not have any of the rights of holders of the debt
securities purchasable upon exercise and will not be entitled to payment of principal of or any
premium, if any, or interest on the debt securities purchasable upon exercise.
Equity Warrants
The applicable prospectus supplement will describe the following terms of equity warrants offered:
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the title of the equity warrants; |
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the securities (i.e., common stock) for which the equity warrants are exercisable; |
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the price or prices at which the equity warrants will be issued; |
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the provisions, if any, for changes to or adjustments in the exercise price; |
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the date on which the right to exercise the equity warrant shall commence and the date
on which the right will expire; |
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if applicable, the number of equity warrants issued with each share of common stock; |
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if applicable, the date on and after which the equity warrants and the related common
stock will be separately transferable; |
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a discussion of any material federal income tax consequences of holding or exercising
the equity warrants; and |
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any other terms of the equity warrants, including terms, procedures and limitations
relating to the exchange and exercise of equity warrants. |
Holders of equity warrants will not be entitled, by virtue of being such holders, to vote,
consent, receive dividends, receive notice as shareholders with respect to any meeting of
shareholders for the election of our directors or any other matter, or to exercise any rights
whatsoever as our shareholders.
The exercise price payable and the number of shares of common stock purchasable upon the
exercise of each equity warrant will be subject to adjustment in certain events, including the
issuance of a stock dividend to holders of common stock or a stock split, reverse stock split,
combination, subdivision or reclassification of common stock. In lieu of adjusting the number of
shares of common stock purchasable upon exercise of each equity warrant, we may elect to adjust the
number of equity warrants. We may, at our option, reduce the exercise price at any time.
15
No fractional shares will be issued upon exercise of equity warrants, but we will pay the cash
value of any fractional shares otherwise issuable. Notwithstanding the foregoing, in case of any
consolidation, merger, or sale or conveyance of our property as an entirety or substantially as an
entirety, the holder of each outstanding equity warrant shall have the right to the kind and amount
of shares of stock and other securities and property, including cash, receivable by a holder of the
number of shares of common stock into which the equity warrant was exercisable immediately prior to
such transaction.
Exercise of Warrants
Each warrant will entitle the holder to purchase for cash such principal amount of securities
or shares of stock at such exercise price as shall in each case be set forth in, or be determinable
as set forth in, the prospectus supplement relating to the warrants offered thereby. Warrants may
be exercised at any time up to the close of business on the expiration date set forth in the
prospectus supplement relating to the warrants offered thereby. After the close of business on the
expiration date, unexercised warrants will become void.
The warrants may be exercised as set forth in the prospectus supplement relating to the
warrants offered. Upon receipt of payment and the warrant certificate properly completed and duly
executed at the corporate trust office of the warrant agent or any other office indicated in the
prospectus supplement, we will, as soon as practicable, forward the securities purchasable upon
such exercise. If less than all of the warrants represented by such warrant certificate are
exercised, a new warrant certificate will be issued for the remaining warrants.
PLAN OF DISTRIBUTION
We may sell the securities through underwriters or dealers, through agents, or directly to one
or more purchasers or through a combination of these methods. The applicable prospectus supplement
will describe the terms of the offering of the securities, including:
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the name or names of any underwriters, if any, and if required, any dealers or agents; |
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the purchase price of the securities and the proceeds we will receive from the sale; |
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any underwriting discounts and other items constituting underwriters compensation; |
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any initial public offering price; |
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any discounts or concessions allowed or reallowed or paid to dealers; and |
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any securities exchange or market on which the securities may be listed. |
We may distribute the securities from time to time in one or more transactions at:
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a fixed price or prices, which may be changed; |
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market prices prevailing at the time of sale; |
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prices related to such prevailing market prices; or |
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negotiated prices. |
Only underwriters named in the prospectus supplement are underwriters of the securities
offered by the prospectus supplement.
If we use underwriters in the sale, they will acquire the securities for their own account and
may resell them from time to time in one or more transactions at a fixed public offering price or
at varying prices determined at the
16
time of sale. We may offer the securities to the public through underwriting syndicates
represented by managing underwriters or by underwriters without a syndicate. Subject to specific
limited conditions, the underwriters will be obligated to purchase all the securities of the series
offered by the prospectus supplement. Any public offering price and any discounts or concessions
allowed or reallowed or paid to dealers may change from time to time.
If we use a dealer in the sale of the securities being offered pursuant to this prospectus, we
will sell the securities to the dealer, as principal. The dealer may then resell the securities to
the public at varying prices to be determined by the dealer at the time of resale.
We may sell securities directly or through agents we designate from time to time. We will
name any agent involved in the offering and sale of securities and we will describe any commissions
we will pay the agent in the prospectus supplement. Unless the prospectus supplement states
otherwise, our agent will act on a best-efforts basis for the period of its appointment.
We may authorize agents or underwriters to solicit offers by institutional investors to
purchase securities from us at the public offering price set forth in the prospectus supplement
pursuant to delayed delivery contracts providing for payment and delivery on a specified date in
the future. We will describe the conditions to these contracts and the commissions we must pay for
solicitation of these contracts in the prospectus supplement.
In connection with the sale of the securities, underwriters, dealers or agents may receive
compensation from us or from purchasers of the securities for whom they act as agents in the form
of discounts, concessions or commissions. Underwriters may sell the securities to or through
dealers, and those dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters or commissions from the purchasers for whom they may act as
agents. Underwriters, dealers and agents that participate in the distribution of the securities,
and any institutional investors or others that purchase securities directly and then resell the
securities, may be deemed to be underwriters, and any discounts or commissions received by them
from us and any profit on the resale of the securities by them may be deemed to be underwriting
discounts and commissions under the Securities Act.
We may provide agents and underwriters with indemnification against particular civil
liabilities, including liabilities under the Securities Act, or contribution with respect to
payments that the agents or underwriters may make with respect to such liabilities. Agents and
underwriters may engage in transactions with, or perform services for, us in the ordinary course of
business.
In addition, we may enter into derivative transactions with third parties (including the
writing of options), or sell securities not covered by this prospectus to third parties in
privately negotiated transactions. If the applicable prospectus supplement indicates, in
connection with such a transaction the third parties may, pursuant to this prospectus and the
applicable prospectus supplement, sell securities covered by this prospectus and the applicable
prospectus supplement. If so, the third party may use securities borrowed from us or others to
settle such sales and may use securities received from us to close out any related short positions.
We may also loan or pledge securities covered by this prospectus and the applicable prospectus
supplement to third parties, who may sell the loaned securities or, in an event of default in the
case of a pledge, sell the pledged securities pursuant to this prospectus and the applicable
prospectus supplement. The third party in such sale transactions will be an underwriter and will be
identified in the applicable prospectus supplement or in a post-effective amendment.
All securities we offer other than common stock will be new issues of securities with no
established trading market. Any underwriters may make a market in these securities, but will not
be obligated to do so and may discontinue any market making at any time without notice. We cannot
guarantee the liquidity of the trading markets for any securities.
Underwriters may engage in stabilizing and syndicate covering transactions in accordance with
Rule 104 under the Exchange Act. Rule 104 permits stabilizing bids to purchase the securities
being offered as long as the stabilizing bids do not exceed a specified maximum. Underwriters may
over-allot the offered securities in connection with the offering, thus creating a short position
in their account. Syndicate covering transactions involve purchases of the offered securities by
underwriters in the open market after the distribution has been completed in order to cover
syndicate short positions. Underwriters may also cover an over-allotment or short position by
17
exercising their over-allotment option, if any. Stabilizing and syndicate covering
transactions may cause the price of the offered securities to be higher than it would otherwise be
in the absence of these transactions. These transactions, if commenced, may be discontinued at any
time.
LEGAL MATTERS
Stradling Yocca Carlson & Rauth, a Professional Corporation, 660 Newport Center Drive, Suite
1600, Newport Beach, California, will provide us with an opinion as to the legality of the
securities we are offering.
EXPERTS
The consolidated financial statements and financial statement schedule for the year ended
December 31, 2005 of Questcor Pharmaceuticals, Inc. incorporated in this Prospectus by reference to
the Annual Report on Form 10-K for the year ended December 31, 2005 have been so incorporated in
reliance on the report of Odenberg, Ullakko, Muranishi & Co. LLP, an independent registered public
accounting firm, given on the authority of said firm as experts in auditing and accounting.
Ernst & Young LLP, independent registered public accounting firm, has audited our consolidated
financial statements and schedule as of December 31, 2004 and
for each of the two years in the period ended
December 31, 2004 that are included in our Annual Report on Form 10-K for the year ended December
31, 2005, as set forth in their report, which is incorporated by reference in this prospectus and
elsewhere in the registration statement. Our financial statements and schedule are incorporated by
reference in reliance on Ernst & Young LLPs report, given on their authority as experts in
accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other information with the
SEC. You can read our SEC filings over the Internet at the SECs website at http://www.sec.gov.
You may also read and copy any document we file with the SEC at its public reference room located
at 100 F Street, N.E., Room 1580, Washington, DC 20549. You can request copies of these documents
and obtain information on the operation of the public reference room by writing to the Public
Reference Section of the SEC, 100 F Street, N.E., Room 1580, Washington, DC 20549 or by calling the
SEC at 1-800-SEC-0330.
We have filed with the SEC a registration statement on Form S-3 under the Securities Act.
This prospectus does not contain all the information in the registration statement. We have
omitted parts of the registration statement, as permitted by the rules and regulations of the SEC.
You may inspect and copy the registration statement, as amended, including exhibits, at the SECs
public reference facilities or website. If we have filed any contract or other document as an
exhibit to the registration statement or any other document incorporated by reference in the
registration statement, you should read the exhibit for a more complete understanding of the
document or matter involved. Each statement regarding a contract or other document is qualified in
its entirety by reference to the actual document.
INFORMATION INCORPORATED BY REFERENCE
The SEC allows us to incorporate by reference into this prospectus the information we file
with it. This means that we can disclose important information to you by referring you to those
documents. The information we incorporate by reference is considered a part of this prospectus,
and later information we file with the SEC will automatically update and supersede this
information. The following documents filed with the SEC (in each case, File No. 001-14758) are
incorporated by reference in this prospectus:
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our Annual Report on Form 10-K for the year ended December 31, 2005; |
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our Quarterly Report on Form 10-Q for the quarter ended March 31, 2006; |
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our Current Report on Form 8-K, filed with the SEC on January 12, 2006; |
18
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our Current Report on Form 8-K, filed with the SEC on March 2, 2006; |
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our Current Report on Form 8-K, filed with the SEC on May 10, 2006; |
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our Current Report on Form 8-K, filed with the SEC on May 24, 2006; |
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our definitive Proxy Statement dated April 10, 2006, filed in connection with our
2006 Annual Meeting of Shareholders; and |
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the description of our common stock contained in our registration statement on Form
8-A filed under the Exchange Act on January 14, 1998, including any amendment or report
hereafter filed for the purpose of updating such description. |
We are also incorporating by reference any future filings we make with the SEC under Section
13(a), 13(c), 14 or 15(d) of the Exchange Act until this offering is completed. We are not,
however, incorporating by reference any documents or portion thereof, whether specifically listed
above or filed in the future, that are not deemed filed with the SEC or any information furnished
pursuant to Item 2.02 or 7.01 of Form 8-K or certain exhibits furnished pursuant to Item 9.01 of
Form 8-K.
You may obtain any of the documents incorporated by reference through the SEC or the SECs website
as described above. You may also obtain copies of these documents, other than exhibits to such
documents, free of charge upon written or oral request to Investor Relations, 3260 Whipple Road,
Union City, California 94587, telephone: (510) 400-0700.
19
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the costs and expenses, other than underwriting discounts,
payable by the registrant in connection with the offering of the securities being registered. All
the amounts shown are estimates except for the SEC registration fee.
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SEC registration fee |
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$ |
2,675 |
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Printing fees and expenses |
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* |
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Transfer Agent fees |
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* |
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Trustee/issuing and paying agent fees and expenses |
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* |
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Legal fees and expenses |
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* |
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Accounting fees and expenses |
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* |
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Miscellaneous expenses |
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* |
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Total |
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* |
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* |
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To be filed by amendment on Form 8-K or Rule 424 filing. |
Item 15. Indemnification of Directors and Officers
Pursuant to provisions of the California General Corporation Law (the CGCL), our Articles of
Incorporation include a provision which eliminates the personal liability of our directors for
monetary damages to the fullest extent permissible under California law. This limitation has no
effect on a directors liability (i) for acts or omissions that involve intentional misconduct or a
knowing and culpable violation of law, (ii) for acts or omissions that a director believes to be
contrary to the best interest of the corporation or its shareholders or that involve the absence of
good faith on the part of the director, (iii) for any transaction from which a director derived an
improper benefit, (iv) for acts or omissions that show a reckless disregard for the directors duty
to the corporation or its shareholders in circumstances in which the director was aware, or should
have been aware, in the ordinary course of performing a directors duties, of a risk of serious
injury to the corporation or its shareholders, (v) for acts or omissions that constitute an
unexcused pattern of inattention that amounts to an abdication of the directors duty to the
corporation or its shareholders, (vi) under Section 310 of the CGCL (concerning contracts or
transactions between the corporation and a director) or (vii) under Section 316 of the CGCL
(concerning a directors liability for improper distributions, loans and guarantees). The provision
has no effect on claims arising under federal or state securities laws and does not affect the
availability of injunctions and other equitable remedies available to the corporations
shareholders for any violation of a directors fiduciary duty to the corporation or its
shareholders. Although the validity and scope of the legislation underlying the provision have not
yet been interpreted to any significant extent by the California courts, the provision may relieve
our directors of monetary liability for grossly negligent conduct, including conduct in situations
involving attempted takeovers of Questcor.
Our Articles of Incorporation also include a section authorizing us to indemnify our officers,
directors and other agents through bylaw provisions, agreements with such agents, vote of
shareholders or otherwise in excess of the indemnification permitted by Section 317 of the CGCL,
subject only to the limits set forth in Section 204 of the CGCL with respect to actions for breach
of duty to the corporation and its shareholders. We have entered into agreements with its executive
officers and directors to provide indemnity to such persons to the maximum extent permitted under
applicable law.
Our Bylaws expressly provide that we shall have the right to purchase and maintain insurance
against any liability asserted against or incurred by officers, directors and other agents, whether
or not we would have the power to indemnify such person against the liability insured against. We
have obtained directors and officers liability and
II-1
company reimbursement insurance pursuant to three policies currently in effect, referred to as
the D & O Policies. The D & O Policies are subject to customary exclusions.
Section 317 of the California General Corporation law makes provisions for the indemnification
of officers, directors and other corporate agents in terms sufficiently broad to indemnify such
persons, under certain circumstances, against such liabilities (including reimbursement of expenses
incurred) arising under the Securities Act.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted
to directors, officers or persons controlling the registrant pursuant to the foregoing provisions,
the registrant has been informed that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and is therefore unenforceable.
Item 16. Exhibits
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Exhibit |
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Number |
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Description |
1.1* |
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Form of Underwriting Agreement |
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4.1 |
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Form of Indenture |
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4.2* |
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Form of Debt Security |
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4.3* |
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Form of Warrant Agreement, if any, including form of Warrant |
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5.1 |
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Opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation |
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12.1 |
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Computation of Ratio of Earnings to Fixed Charges |
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23.1 |
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Consent of Odenberg, Ullakko, Muranishi & Co. LLP, Independent Registered Public Accounting Firm |
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23.2 |
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Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm |
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23.3 |
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Consent of
Stradling Yocca Carlson & Rauth, a Professional Corporation (included in its opinion filed as Exhibit 5.1 hereto) |
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24.1 |
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Power of Attorney (included on signature page) |
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25.1* |
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Form T-1 Statement of Eligibility of Trustee |
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* |
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To be filed by amendment or as an exhibit to a Current Report on Form 8-K under the Exchange
Act, subsequent to effectiveness, if necessary. |
Item 17. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities
Act;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a fundamental
change in the information set forth in the registration statement. Notwithstanding
the foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Securities and Exchange
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20 percent change in the maximum aggregate offering
price set forth in the Calculation of Registration Fee table in the effective
registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any material
change to such information in the registration statement;
II-2
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Securities and Exchange Commission by the registrant pursuant to Section 13 or 15(d)
of the Securities Exchange Act that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the Securities Act, each
such post-effective amendment shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the registrants annual report pursuant to
Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee
benefit plans annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the registration statement shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy as expressed in
the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses incurred or paid by
a director, officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public policy as expressed
in the Securities Act and will be governed by the final adjudication of such issue.
(d) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act, the information
omitted from the form of prospectus filed as part of this registration statement in reliance
upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act, each
post-effective amendment that contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering thereof.
(e) The undersigned registrant hereby undertakes to file an application for the purpose of
determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust
Indenture Act (the Act) in accordance with the rules and regulations prescribed by the Securities
and Exchange Commission under Section 305(b)(2) of the Act.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant
certifies that it has reasonable grounds to believe that it meets all the requirements for filing
on Form S-3 and has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Union City,
State of California, on June 8, 2006.
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QUESTCOR PHARMACEUTICALS, INC. |
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By:
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/s/ James L. Fares |
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James L. Fares
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President and Chief Executive Officer |
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POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes, appoints and authorizes James L.
Fares and George M. Stuart, or any of them, as his attorney in fact and agent, with full power of
substitution and resubstitution, to execute, in his name and on his behalf, in any and all
capacities, this Registration Statement on Form S-3 and any amendments thereto (and any additional
registration statement related thereto permitted by Rule 462(b) promulgated under the Securities
Act of 1933 (and all further amendments including post-effective amendments thereto)) necessary or
advisable to enable the registrant to comply with the Securities Act of 1933, and any other laws,
and any rules, regulations and requirements of the Securities and Exchange Commission, in respect
thereof, in connection with the registration of the securities which are the subject of such
registration statement, which amendments may make such changes in such registration statement as
such attorney may deem appropriate, and with full power and authority to perform and do any and all
acts and things whatsoever which any such attorney or substitute may deem necessary or advisable to
be performed or done in connection with any or all of the above-described matters, as fully as each
of the undersigned could do if personally present and acting, hereby ratifying and approving all
acts of any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration
statement has been signed by the following persons in the capacities
indicated on June 8, 2006.
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Signature |
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Title |
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/s/ James L. Fares
James L. Fares
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President, Chief Executive Officer and Director (Principal
Executive Officer) |
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/s/ George M. Stuart
George M. Stuart
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Vice President, Finance and Chief Financial
Officer and Secretary (Principal Financial and Accounting
Officer) |
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/s/ Don M. Bailey
Don M. Bailey
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Director |
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/s/ Neal C. Bradsher
Neal C. Bradsher
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Director |
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/s/ Albert Hansen
Albert Hansen
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Director |
II-4
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Signature |
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Title |
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/s/ Gregg Lapointe
Gregg Lapointe
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Director |
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/s/ Virgil D. Thompson
Virgil D. Thompson
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Director |
II-5
EXHIBIT INDEX
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Exhibit |
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Number |
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Description |
1.1* |
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Form of Underwriting Agreement |
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4.1 |
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Form of Indenture |
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4.2* |
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Form of Debt Security |
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4.3* |
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Form of Warrant Agreement, if any, including form of Warrant |
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5.1 |
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Opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation |
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12.1 |
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Computation of Ratio of Earnings to Fixed Charges |
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23.1 |
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Consent of Odenberg, Ullakko, Muranishi & Co. LLP, Independent Registered Public Accounting Firm |
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23.2 |
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Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm |
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23.3 |
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Consent of
Stradling Yocca Carlson & Rauth, a Professional Corporation (included in its opinion filed as Exhibit 5.1 hereto) |
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24.1 |
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Power of Attorney (included on signature page) |
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25.1* |
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Form T-1 Statement of Eligibility of Trustee |
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* |
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To be filed by amendment or as an exhibit to a Current Report on Form 8-K under the Exchange
Act, subsequent to effectiveness, if necessary. |
exv4w1
Exhibit 4.1
QUESTCOR PHARMACEUTICALS, INC.
INDENTURE
Dated as of
[ ]
Trustee
TABLE OF CONTENTS
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Page |
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ARTICLE I |
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DEFINITIONS AND INCORPORATION BY REFERENCE |
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Section 1.1.
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Definitions
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1 |
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Section 1.2.
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Other Definitions
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5 |
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Section 1.3.
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Incorporation by Reference of Trust Indenture Act
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5 |
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Section 1.4.
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Rules of Construction
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5 |
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ARTICLE II |
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THE SECURITIES |
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Section 2.1.
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Issuable in Series
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6 |
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Section 2.2.
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Establishment of Terms of Series of Securities
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6 |
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Section 2.3.
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Execution and Authentication
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8 |
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Section 2.4.
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Registrar and Paying Agent
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Section 2.5.
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Paying Agent to Hold Money in Trust
|
|
|
9 |
|
Section 2.6.
|
|
Securityholder Lists
|
|
|
10 |
|
Section 2.7.
|
|
Transfer and Exchange
|
|
|
10 |
|
Section 2.8.
|
|
Mutilated, Destroyed, Lost and Stolen Securities
|
|
|
10 |
|
Section 2.9.
|
|
Outstanding Securities
|
|
|
11 |
|
Section 2.10.
|
|
Treasury Securities
|
|
|
11 |
|
Section 2.11.
|
|
Temporary Securities
|
|
|
12 |
|
Section 2.12.
|
|
Cancellation
|
|
|
12 |
|
Section 2.13.
|
|
Defaulted Interest
|
|
|
12 |
|
Section 2.14.
|
|
Global Securities
|
|
|
12 |
|
|
|
|
|
|
|
|
|
|
ARTICLE III |
|
|
|
|
|
|
REDEMPTION |
|
|
|
|
|
|
|
|
|
|
|
Section 3.1.
|
|
Notice to Trustee
|
|
|
13 |
|
Section 3.2.
|
|
Selection of Securities to be Redeemed
|
|
|
14 |
|
Section 3.3.
|
|
Notice of Redemption
|
|
|
14 |
|
Section 3.4.
|
|
Effect of Notice of Redemption
|
|
|
14 |
|
Section 3.5.
|
|
Deposit of Redemption Price
|
|
|
14 |
|
Section 3.6.
|
|
Securities Redeemed in Part
|
|
|
15 |
|
|
|
|
|
|
|
|
|
|
ARTICLE IV |
|
|
|
|
|
|
COVENANTS |
|
|
|
|
|
|
|
|
|
|
|
Section 4.1.
|
|
Payment of Principal and Interest
|
|
|
15 |
|
Section 4.2.
|
|
SEC Reports
|
|
|
15 |
|
Section 4.3.
|
|
Compliance Certificate
|
|
|
15 |
|
Section 4.4.
|
|
Stay, Extension and Usury Laws
|
|
|
15 |
|
Section 4.5.
|
|
Corporate Existence
|
|
|
15 |
|
Section 4.6.
|
|
Taxes
|
|
|
16 |
|
i
TABLE OF CONTENTS
|
|
|
|
|
|
|
|
|
|
|
Page |
|
|
ARTICLE V |
|
|
|
|
|
|
SUCCESSORS |
|
|
|
|
|
|
|
|
|
|
|
Section 5.1.
|
|
When Company May Merge, Etc
|
|
|
16 |
|
Section 5.2.
|
|
Successor Corporation Substituted
|
|
|
16 |
|
|
|
|
|
|
|
|
|
|
ARTICLE VI |
|
|
|
|
|
|
DEFAULTS AND REMEDIES |
|
|
|
|
|
|
|
|
|
|
|
Section 6.1.
|
|
Events of Default
|
|
|
16 |
|
Section 6.2.
|
|
Acceleration of Maturity; Rescission and Annulment
|
|
|
18 |
|
Section 6.3.
|
|
Collection of Indebtedness and Suits for Enforcement by Trustee
|
|
|
19 |
|
Section 6.4.
|
|
Trustee May File Proofs of Claim
|
|
|
19 |
|
Section 6.5.
|
|
Trustee May Enforce Claims Without Possession of Securities
|
|
|
20 |
|
Section 6.6.
|
|
Application of Money Collected
|
|
|
20 |
|
Section 6.7.
|
|
Limitation on Suits
|
|
|
20 |
|
Section 6.8.
|
|
Unconditional Right of Holders to Receive Principal and Interest
|
|
|
21 |
|
Section 6.9.
|
|
Restoration of Rights and Remedies
|
|
|
21 |
|
Section 6.10.
|
|
Rights and Remedies Cumulative
|
|
|
21 |
|
Section 6.11.
|
|
Delay or Omission Not Waiver
|
|
|
21 |
|
Section 6.12.
|
|
Control by Holders
|
|
|
22 |
|
Section 6.13.
|
|
Waiver of Past Defaults
|
|
|
22 |
|
Section 6.14.
|
|
Undertaking For Costs
|
|
|
22 |
|
|
|
|
|
|
|
|
|
|
ARTICLE VII |
|
|
|
|
|
|
TRUSTEE |
|
|
|
|
|
|
|
|
|
|
|
Section 7.1.
|
|
Duties of Trustee
|
|
|
22 |
|
Section 7.2.
|
|
Rights of Trustee
|
|
|
24 |
|
Section 7.3.
|
|
Individual Rights of Trustee
|
|
|
24 |
|
Section 7.4.
|
|
Trustees Disclaimer
|
|
|
24 |
|
Section 7.5.
|
|
Notice of Defaults
|
|
|
24 |
|
Section 7.6.
|
|
Reports by Trustee to Holders
|
|
|
25 |
|
Section 7.7.
|
|
Compensation and Indemnity
|
|
|
25 |
|
Section 7.8.
|
|
Replacement of Trustee
|
|
|
25 |
|
Section 7.9.
|
|
Successor Trustee by Merger, Etc
|
|
|
26 |
|
Section 7.10.
|
|
Eligibility; Disqualification
|
|
|
26 |
|
Section 7.11.
|
|
Preferential Collection of Claims Against Company
|
|
|
27 |
|
|
|
|
|
|
|
|
|
|
ARTICLE VIII |
|
|
|
|
|
|
SATISFACTION AND DISCHARGE; DEFEASANCE |
|
|
|
|
|
|
|
|
|
|
|
Section 8.1.
|
|
Satisfaction and Discharge of Indenture
|
|
|
27 |
|
Section 8.2.
|
|
Application of Trust Funds; Indemnification
|
|
|
28 |
|
Section 8.3.
|
|
Legal Defeasance of Securities of Any Series
|
|
|
28 |
|
Section 8.4.
|
|
Covenant Defeasance
|
|
|
30 |
|
Section 8.5.
|
|
Repayment to Company
|
|
|
31 |
|
ii
TABLE OF CONTENTS
|
|
|
|
|
|
|
|
|
|
|
Page |
|
|
ARTICLE IX |
|
|
|
|
|
|
AMENDMENTS AND WAIVERS |
|
|
|
|
|
|
|
|
|
|
|
Section 9.1.
|
|
Without Consent of Holders
|
|
|
31 |
|
Section 9.2.
|
|
With Consent of Holders
|
|
|
31 |
|
Section 9.3.
|
|
Limitations
|
|
|
32 |
|
Section 9.4.
|
|
Compliance with Trust Indenture Act
|
|
|
32 |
|
Section 9.5.
|
|
Revocation and Effect of Consents
|
|
|
32 |
|
Section 9.6.
|
|
Notation on or Exchange of Securities
|
|
|
33 |
|
Section 9.7.
|
|
Trustee Protected
|
|
|
33 |
|
|
|
|
|
|
|
|
|
|
ARTICLE X |
|
|
|
|
|
|
MISCELLANEOUS |
|
|
|
|
|
|
|
|
|
|
|
Section 10.1.
|
|
Trust Indenture Act Controls
|
|
|
33 |
|
Section 10.2.
|
|
Notices
|
|
|
33 |
|
Section 10.3.
|
|
Communication by Holders with other Holders
|
|
|
34 |
|
Section 10.4.
|
|
Certificate and Opinion as to Conditions Precedent
|
|
|
34 |
|
Section 10.5.
|
|
Statements Required in Certificate or Opinion
|
|
|
34 |
|
Section 10.6.
|
|
Rules by Trustee and Agents
|
|
|
35 |
|
Section 10.7.
|
|
Legal Holidays
|
|
|
35 |
|
Section 10.8.
|
|
No Recourse Against Others
|
|
|
35 |
|
Section 10.9.
|
|
Counterparts
|
|
|
35 |
|
Section 10.10.
|
|
Governing Laws
|
|
|
35 |
|
Section 10.11.
|
|
No Adverse Interpretation of Other Agreements
|
|
|
35 |
|
Section 10.12.
|
|
Successors
|
|
|
35 |
|
Section 10.13.
|
|
Severability
|
|
|
35 |
|
Section 10.14.
|
|
Table of Contents, Headings, Etc
|
|
|
35 |
|
Section 10.15.
|
|
Securities in a Foreign Currency or in ECU
|
|
|
35 |
|
Section 10.16.
|
|
Judgment Currency
|
|
|
36 |
|
|
|
|
|
|
|
|
|
|
ARTICLE XI |
|
|
|
|
|
|
SINKING FUNDS |
|
|
|
|
|
|
|
|
|
|
|
Section 11.1.
|
|
Applicability of Article
|
|
|
37 |
|
Section 11.2.
|
|
Satisfaction of Sinking Fund Payments with Securities
|
|
|
37 |
|
Section 11.3.
|
|
Redemption of Securities for Sinking Fund
|
|
|
37 |
|
iii
QUESTCOR PHARMACEUTICALS, INC.
Reconciliation and tie between Trust Indenture Act of 1939 and
Indenture, dated as of
|
|
|
Section. 310(a)(1) |
|
7.10 |
(a)(2) |
|
7.10 |
(a)(3) |
|
Not Applicable |
(a)(4) |
|
Not Applicable |
(a)(5) |
|
7.10 |
(b) |
|
7.10 |
Section. 311(a) |
|
7.11 |
(b) |
|
7.11 |
(c) |
|
Not Applicable |
Section. 312(a) |
|
2.6 |
(b) |
|
10.3 |
(c) |
|
10.3 |
Section. 313(a) |
|
7.6 |
(b)(1) |
|
7.6 |
(b)(2) |
|
7.6 |
(c)(1) |
|
7.6 |
(d) |
|
7.6 |
Section. 314(a) |
|
4.2, 10.5 |
(b) |
|
Not Applicable |
(c)(1) |
|
10.4 |
(c)(2) |
|
10.4 |
(c)(3) |
|
Not Applicable |
(d) |
|
Not Applicable |
(e) |
|
10.5 |
(f) |
|
Not Applicable |
Section. 315(a) |
|
7.1 |
(b) |
|
7.5 |
(c) |
|
7.1 |
(d) |
|
7.1 |
(e) |
|
6.14 |
Section. 316(a) |
|
2.10 |
(a)(1)(A) |
|
6.12 |
(a)(1)(B) |
|
6.13 |
(b) |
|
6.8 |
Section. 317(a)(1) |
|
6.3 |
(a)(2) |
|
6.4 |
(b) |
|
2.5 |
Section. 318(a) |
|
10.1 |
Note: This reconciliation and tie shall not, for any purpose, be deemed to be part of the
Indenture.
iv
Indenture dated as of , ___between Questcor Pharmaceuticals, Inc., a
California corporation (Company), and , a
(Trustee).
Each party agrees as follows for the benefit of the other party and for the equal and ratable
benefit of the Holders of the Securities issued under this Indenture.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. Definitions.
Additional Amounts means any additional amounts which are required hereby or by any
Security, under circumstances specified herein or therein, to be paid by the Company in respect of
certain taxes imposed on Holders specified therein and which are owing to such Holders.
Affiliate of any specified person means any other person directly or indirectly controlling
or controlled by or under direct or indirect common control with such specified person. For the
purposes of this definition, control (including, with correlative meanings, the terms controlled
by and under common control with), as used with respect to any person, shall mean the
possession, directly or indirectly, of the power to direct or cause the direction of the management
or policies of such person, whether through the ownership of voting securities or by agreement or
otherwise.
Agent means any Registrar, Paying Agent or Service Agent.
Authorized Newspaper means a newspaper in an official language of the country of publication
customarily published at least once a day for at least five days in each calendar week and of
general circulation in the place in connection with which the term is used. If it shall be
impractical in the opinion of the Trustee to make any publication of any notice required hereby in
an Authorized Newspaper, any publication or other notice in lieu thereof that is made or given by
the Trustee shall constitute a sufficient publication of such notice.
Bearer means anyone in possession from time to time of a Bearer Security.
Bearer Security means any Security, including any interest coupon appertaining thereto, that
does not provide for the identification of the Holder thereof.
Board of Directors means the Board of Directors of the Company or any duly authorized
committee thereof.
Board Resolution means a copy of a resolution certified by the Secretary or an Assistant
Secretary of the Company to have been adopted by the Board of Directors or pursuant to
authorization by the Board of Directors and to be in full force and effect on the date of the
certificate and delivered to the Trustee.
Business Day means, unless otherwise provided by Board Resolution, Officers Certificate or
supplemental indenture hereto for a particular Series, any day except a Saturday, Sunday or a legal
holiday in The City of New York or The City of Union City, California on which banking institutions
are authorized or required by law, regulation or executive order to close.
Company means the party named as such above until a successor replaces it and thereafter
means the successor.
Company Order means a written order signed in the name of the Company by two Officers, one
of whom must be the Companys principal executive officer, principal financial officer or principal
accounting officer.
Company Request means a written request signed in the name of the Company by any Officer and
delivered to the Trustee.
Corporate Trust Office means the office of the Trustee at which at any particular time its
corporate trust business shall be principally administered.
Default means any event which is, or after notice or passage of time or both would be, an
Event of Default.
Depository means, with respect to the Securities of any Series issuable or issued in whole
or in part in the form of one or more Global Securities, the person designated as Depository for
such Series by the Company, which Depository shall be a clearing agency registered under the
Exchange Act; and if at any time there is more than one such person, Depository as used with
respect to the Securities of any Series shall mean the Depository with respect to the Securities of
such Series.
Discount Security means any Security that provides for an amount less than the stated
principal amount thereof to be due and payable upon declaration of acceleration of the maturity
thereof pursuant to Section 6.2.
Dollars means the currency of the United States of America.
ECU means the European Currency Unit as determined by the Commission of the European Union.
Exchange Act means the Securities Exchange Act of 1934, as amended.
Foreign Currency means any currency or currency unit issued by a government other than the
government of the United States of America.
Foreign Government Obligations means with respect to Securities of any Series that are
denominated in a Foreign Currency, (i) direct obligations of the government that issued or caused
to be issued such currency for the payment of which obligations its full faith and credit is
pledged or (ii) obligations of a person controlled or supervised by or acting as an agency or
instrumentality of such government the timely payment of which is unconditionally guaranteed as a
full faith and credit obligation by such government, which, in either case under clauses (i) or
(ii), are not callable or redeemable at the option of the issuer thereof.
Global Security or Global Securities means a Security or Securities, as the case may be,
in the form established pursuant to Section 2.2 evidencing all or part of a Series of Securities,
issued to the Depository for such Series or its nominee, and registered in the name of such
Depository or nominee.
2
Holder or Securityholder means a person in whose name a Security is registered or the
holder of a Bearer Security.
Indenture means this Indenture as amended or supplemented from time to time and shall
include the form and terms of particular Series of Securities established as contemplated
hereunder.
interest with respect to any Discount Security which by its terms bears interest only after
Maturity, means interest payable after Maturity.
Maturity, when used with respect to any Security or installment of principal thereof, means
the date on which the principal of such Security or such installment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption, notice of option to elect repayment or otherwise.
Officer means the Chairman of the Board, any President, any Vice-President, the Chief
Financial Officer, the Treasurer, the Secretary, any Assistant Treasurer or any Assistant Secretary
of the Company.
Officers Certificate means a certificate signed by two Officers, one of whom must be the
Companys principal executive officer, principal financial officer or principal accounting officer.
Opinion of Counsel means a written opinion of legal counsel who is acceptable to the
Trustee. The counsel may be an employee of or counsel to the Company.
person means any individual, corporation, partnership, joint venture, association, limited
liability company, joint-stock company, trust, unincorporated organization or government or any
agency or political subdivision thereof.
principal of a Security means the principal of the Security plus, when appropriate, the
premium, if any, on, and any Additional Amounts in respect of, the Security.
Responsible Officer means any officer of the Trustee in its Corporate Trust Office and also
means, with respect to a particular corporate trust matter, any other officer to whom any corporate
trust matter is referred because of his or her knowledge of and familiarity with a particular
subject.
SEC means the Securities and Exchange Commission.
Securities means the debentures, notes or other debt instruments of the Company of any
Series authenticated and delivered under this Indenture.
Series or Series of Securities means each series of debentures, notes or other debt
instruments of the Company created pursuant to Sections 2.1 and 2.2 hereof.
Significant Subsidiary means (i) any direct or indirect Subsidiary of the Company that would
be a significant subsidiary as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act of 1933, as amended, as such regulation is in effect on the date
hereof, or (ii) any group of direct or indirect Subsidiaries of the Company that, taken together as
a group, would be a significant subsidiary as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act of 1933, as amended, as such regulation is in effect on
the date hereof.
3
Stated Maturity when used with respect to any Security or any installment of principal
thereof or interest thereon, means the date specified in such Security as the fixed date on which
the principal of such Security or such installment of principal or interest is due and payable.
Subsidiary of any specified person means any corporation of which at least a majority of the
outstanding stock having by the terms thereof ordinary voting power for the election of directors
of such corporation (irrespective of whether or not at the time stock of any other class or classes
of such corporation shall have or might have voting power by reason of the happening of any
contingency) is at the time directly or indirectly owned by such person, or by one or more other
Subsidiaries, or by such person and one or more other Subsidiaries.
TIA means the Trust Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb) as in effect
on the date of this Indenture; provided, however, that in the event the Trust Indenture Act of 1939
is amended after such date, TIA means, to the extent required by any such amendment, the Trust
Indenture Act as so amended.
Trustee means the person named as the Trustee in the first paragraph of this instrument
until a successor Trustee shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter Trustee shall mean or include each person who is then a Trustee
hereunder, and if at any time there is more than one such person, Trustee as used with respect to
the Securities of any Series shall mean the Trustee with respect to Securities of that Series.
U.S. Government Obligations means securities which are (i) direct obligations of the United
States of America for the payment of which its full faith and credit is pledged or (ii) obligations
of a person controlled or supervised by and acting as an agency or instrumentality of the United
States of America the payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, and which in the case of (i) and (ii) are not callable
or redeemable at the option of the issuer thereof, and shall also include a depository receipt
issued by a bank or trust company as custodian with respect to any such U.S. Government Obligation
or a specific payment of interest on or principal of any such U.S. Government Obligation held by
such custodian for the account of the holder of a depository receipt, provided that (except as
required by law) such custodian is not authorized to make any deduction from the amount payable to
the holder of such depository receipt from any amount received by the custodian in respect of the
U.S. Government Obligation evidenced by such depository receipt.
4
Section 1.2. Other Definitions.
|
|
|
Term |
|
Defined in Section |
Bankruptcy Law |
|
6.1 |
Custodian |
|
6.1 |
Event of Default |
|
6.1 |
Journal |
|
10.15 |
Judgment Currency |
|
10.16 |
Legal Holiday |
|
10.7 |
mandatory sinking fund payment |
|
11.1 |
Market Exchange Rate |
|
10.15 |
New York Banking Day |
|
10.16 |
optional sinking fund payment |
|
11.1 |
Paying Agent |
|
2.4 |
Registrar |
|
2.4 |
Required Currency |
|
10.16 |
Service Agent |
|
2.4 |
successor person |
|
5.1 |
Section 1.3. Incorporation by Reference of Trust Indenture Act. Whenever this Indenture
refers to a provision of the TIA, the provision is incorporated by reference in and made a part of
this Indenture. The following TIA terms used in this Indenture have the following meanings:
Commission means the SEC.
indenture securities means the Securities.
indenture security holder means a Securityholder.
indenture to be qualified means this Indenture.
indenture trustee or institutional trustee means the Trustee.
obligor on the indenture securities means the Company and any successor obligor upon the
Securities.
All other terms used in this Indenture that are defined by the TIA, defined by TIA reference
to another statute or defined by SEC rule under the TIA and not otherwise defined herein are used
herein as so defined.
Section 1.4. Rules of Construction. Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned to it in accordance with
generally accepted accounting principles;
5
(c) references to generally accepted accounting principles shall mean generally accepted
accounting principles in effect as of the time when and for the period as to which such accounting
principles are to be applied;
(d) or is not exclusive;
(e) words in the singular include the plural, and in the plural include the singular; and
(f) provisions apply to successive events and transactions.
ARTICLE II
THE SECURITIES
Section 2.1. Issuable in Series. The aggregate principal amount of Securities that may be
authenticated and delivered under this Indenture is unlimited. The Securities may be issued in one
or more Series. All Securities of a Series shall be identical except as may be set forth in a
Board Resolution, a supplemental indenture or an Officers Certificate detailing the adoption of
the terms thereof pursuant to the authority granted under a Board Resolution. In the case of
Securities of a Series to be issued from time to time, the Board Resolution, Officers Certificate
or supplemental indenture may provide for the method by which specified terms (such as interest
rate, maturity date, record date or date from which interest shall accrue) are to be determined.
Securities may differ between Series in respect of any matters, provided that all Series of
Securities shall be equally and ratably entitled to the benefits of the Indenture.
Section 2.2. Establishment of Terms of Series of Securities. At or prior to the issuance of
any Securities within a Series, the following shall be established (as to the Series generally, in
the case of Subsection 2.2.1 and either as to such Securities within the Series or as to the Series
generally in the case of Subsections 2.2.2 through 2.2.21) by a Board Resolution, a supplemental
indenture or an Officers Certificate pursuant to authority granted under a Board Resolution:
2.2.1. the title of the Series (which shall distinguish the Securities of that particular
Series from the Securities of any other Series);
2.2.2. the price or prices (expressed as a percentage of the principal amount thereof) at
which the Securities of the Series will be issued;
2.2.3. any limit upon the aggregate principal amount of the Securities of the Series which may
be authenticated and delivered under this Indenture (except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of
the Series pursuant to Section 2.7, 2.8, 2.11, 3.6 or 9.6);
2.2.4. the date or dates on which the principal of the Securities of the Series is payable;
2.2.5. the rate or rates (which may be fixed or variable) per annum or, if applicable, the
method used to determine such rate or rates (including, but not limited to, any commodity,
commodity index, stock exchange index or financial index) at which the Securities of the Series
shall bear interest, if any, the date or dates from which such interest, if any, shall accrue,
6
the date or dates on which such interest, if any, shall commence and be payable and any
regular record date for the interest payable on any interest payment date;
2.2.6. the place or places where the principal of and interest, if any, on the Securities of
the Series shall be payable, or the method of such payment, if by wire transfer, mail or other
means;
2.2.7. if applicable, the period or periods within which, the price or prices at which and the
terms and conditions upon which the Securities of the Series may be redeemed, in whole or in part,
at the option of the Company;
2.2.8. the obligation, if any, of the Company to redeem or purchase the Securities of the
Series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof
and the period or periods within which, the price or prices at which and the terms and conditions
upon which Securities of the Series shall be redeemed or purchased, in whole or in part, pursuant
to such obligation;
2.2.9. the dates, if any, on which and the price or prices at which the Securities of the
Series will be repurchased by the Company at the option of the Holders thereof and other detailed
terms and provisions of such repurchase obligations;
2.2.10. if other than denominations of $1,000 and any integral multiple thereof, the
denominations in which the Securities of the Series shall be issuable;
2.2.11. the forms of the Securities of the Series in bearer or fully registered form (and, if
in fully registered form, whether the Securities will be issuable as Global Securities);
2.2.12. if other than the principal amount thereof, the portion of the principal amount of the
Securities of the Series that shall be payable upon declaration of acceleration of the maturity
thereof pursuant to Section 6.2;
2.2.13. the currency of denomination of the Securities of the Series, which may be Dollars or
any Foreign Currency, including, but not limited to, the ECU, and if such currency of denomination
is a composite currency other than the ECU, the agency or organization, if any, responsible for
overseeing such composite currency;
2.2.14. the designation of the currency, currencies or currency units in which payment of the
principal of and interest, if any, on the Securities of the Series will be made;
2.2.15. if payments of principal of or interest, if any, on the Securities of the Series are
to be made in one or more currencies or currency units other than that or those in which such
Securities are denominated, the manner in which the exchange rate with respect to such payments
will be determined;
2.2.16. the manner in which the amounts of payment of principal of or interest, if any, on the
Securities of the Series will be determined, if such amounts may be determined by reference to an
index based on a currency or currencies or by reference to a commodity, commodity index, stock
exchange index or financial index;
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2.2.17. the provisions, if any, relating to any security provided for the Securities of the
Series;
2.2.18. any addition to or change in the Events of Default which applies to any Securities of
the Series and any change in the right of the Trustee or the requisite Holders of such Securities
to declare the principal amount thereof due and payable pursuant to Section 6.2;
2.2.19. any addition to or change in the covenants set forth in Articles IV or V which applies
to Securities of the Series;
2.2.20. any other terms of the Securities of the Series (which terms shall not be inconsistent
with the provisions of this Indenture, except as permitted by Section 9.1, but which may modify or
delete any provision of this Indenture insofar as it applies to such Series); and
2.2.21. any depositories, interest rate calculation agents, exchange rate calculation agents
or other agents with respect to Securities of such Series if other than those appointed herein.
All Securities of any one Series need not be issued at the same time and may be issued from
time to time, consistent with the terms of this Indenture, if so provided by or pursuant to the
Board Resolution, supplemental indenture or Officers Certificate referred to above, and the
authorized principal amount of any Series may not be increased to provide for issuances of
additional Securities of such Series, unless otherwise provided in such Board Resolution,
supplemental indenture or Officers Certificate.
Section 2.3. Execution and Authentication. Two Officers shall sign the Securities for the
Company by manual or facsimile signature.
If an Officer whose signature is on a Security no longer holds that office at the time the
Security is authenticated, the Security shall nevertheless be valid.
A Security shall not be valid until authenticated by the manual signature of the Trustee or an
authenticating agent. The signature shall be conclusive evidence that the Security has been
authenticated under this Indenture.
The Trustee shall at any time, and from time to time, authenticate Securities for original
issue in the principal amount provided in the Board Resolution, supplemental indenture hereto or
Officers Certificate, upon receipt by the Trustee of a Company Order. Such Company Order may
authorize authentication and delivery pursuant to oral or electronic instructions from the Company
or its duly authorized agent or agents, which oral instructions shall be promptly confirmed in
writing. Each Security shall be dated the date of its authentication unless otherwise provided by
a Board Resolution, a supplemental indenture hereto or an Officers Certificate.
The aggregate principal amount of Securities of any Series outstanding at any time may not
exceed any limit upon the maximum principal amount for such Series set forth in the Board
Resolution, supplemental indenture hereto or Officers Certificate delivered pursuant to Section
2.2, except as provided in Section 2.8.
Prior to the issuance of Securities of any Series, the Trustee shall have received and
(subject to Section 7.2) shall be fully protected in relying on: (a) the Board Resolution,
supplemental
indenture hereto or Officers Certificate establishing the form of Securities of that Series
or of
8
Securities within that Series and the terms of Securities of that Series or of Securities
within that Series, (b) an Officers Certificate complying with Section 10.4, and (c) an Opinion of
Counsel complying with Section 10.4.
The Trustee shall have the right to decline to authenticate and deliver any Securities of such
Series: (a) if the Trustee, being advised by counsel, determines that such action may not lawfully
be taken; or (b) if the Trustee in good faith by its board of directors or trustees, executive
committee or a trust committee of directors and/or vice-presidents shall determine that such action
would expose the Trustee to personal liability to Holders of any then outstanding Series of
Securities.
The Trustee may appoint an authenticating agent acceptable to the Company to authenticate
Securities. An authenticating agent may authenticate Securities whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes authentication by such
agent. An authenticating agent has the same rights as an Agent to deal with the Company or an
Affiliate of the Company.
Section 2.4. Registrar and Paying Agent. The Company shall maintain, with respect to each
Series of Securities, at the place or places specified with respect to such Series pursuant to
Section 2.2, an office or agency where Securities of such Series may be presented or surrendered
for payment (Paying Agent), where Securities of such Series may be surrendered for registration
of transfer or exchange (Registrar) and where notices and demands to or upon the Company in
respect of Securities of such Series and this Indenture may be served (Service Agent). The
Registrar shall keep a register with respect to each Series of Securities and to their transfer and
exchange. The Company will give prompt written notice to the Trustee of the name and address, and
any change in the name or address, of each Registrar, Paying Agent or Service Agent. If at any
time the Company shall fail to maintain any such required Registrar, Paying Agent or Service Agent
or shall fail to furnish the Trustee with the name and address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee,
and the Company hereby appoints the Trustee as its agent to receive all such presentations,
surrenders, notices and demands.
The Company may also from time to time designate one or more co-registrars, additional paying
agents or additional service agents and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the Company of its
obligations to maintain a Registrar, Paying Agent and Service Agent in each place so specified
pursuant to Section 2.2 for Securities of any Series for such purposes. The Company will give
prompt written notice to the Trustee of any such designation or rescission and of any change in the
name or address of any such co-registrar, additional paying agent or additional service agent. The
term Registrar includes any co-registrar; the term Paying Agent includes any additional paying
agent; and the term Service Agent includes any additional service agent.
The Company hereby appoints the Trustee the initial Registrar, Paying Agent and Service Agent
for each Series unless another Registrar, Paying Agent or Service Agent, as the case may be, is
appointed prior to the time Securities of that Series are first issued.
Section 2.5. Paying Agent to Hold Money in Trust. The Company shall require each Paying Agent
other than the Trustee to agree in writing that the Paying Agent will hold in trust, for the
benefit of Securityholders of any Series of Securities, or the Trustee, all money held by the
Paying Agent for the payment of principal of or interest on the Series of Securities, and will
notify
9
the Trustee of any default by the Company in making any such payment. While any such
default continues, the Trustee may require a Paying Agent to pay all money held by it to the
Trustee. The Company at any time may require a Paying Agent to pay all money held by it to the
Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary of the Company) shall have no further liability for the money. If the Company or a
Subsidiary of the Company acts as Paying Agent, it shall segregate and hold all money held by it as
Paying Agent in a separate trust fund for the benefit of Securityholders of any Series of
Securities.
Section 2.6. Securityholder Lists. The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and addresses of
Securityholders of each Series of Securities and shall otherwise comply with TIA Section 312(a).
If the Trustee is not the Registrar, the Company shall furnish to the Trustee at least ten days
before each interest payment date and at such other times as the Trustee may request in writing a
list, in such form and as of such date as the Trustee may reasonably require, of the names and
addresses of Securityholders of each Series of Securities.
Section 2.7. Transfer and Exchange. Where Securities of a Series are presented to the
Registrar or a co-registrar with a request to register a transfer or to exchange them for an equal
principal amount of Securities of the same Series, the Registrar shall register the transfer or
make the exchange if its requirements for such transactions are met. To permit registrations of
transfers and exchanges, the Trustee shall authenticate Securities at the Registrars request. No
service charge shall be made for any registration of transfer or exchange (except as otherwise
expressly permitted herein), but the Company may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith (other than any such
transfer tax or similar governmental charge payable upon exchanges pursuant to Sections 2.11, 3.6
or 9.6).
Neither the Company nor the Registrar shall be required (a) to issue, register the transfer
of, or exchange Securities of any Series for the period beginning at the opening of business
fifteen days immediately preceding the mailing of a notice of redemption of Securities of that
Series selected for redemption and ending at the close of business on the day of such mailing, or
(b) to register the transfer of or exchange Securities of any Series selected, called or being
called for redemption as a whole or the portion being redeemed of any such Securities selected,
called or being called for redemption in part.
Section 2.8. Mutilated, Destroyed, Lost and Stolen Securities. If any mutilated Security is
surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a new Security of the same Series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence to their satisfaction
of the destruction, loss or theft of any Security and (ii) such security or indemnity as may be
required by them to save each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall authenticate and make
available for delivery, in lieu of any such destroyed, lost or stolen Security, a new Security of
the same Series and of like tenor and principal amount and bearing a number not contemporaneously
outstanding.
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In case any such mutilated, destroyed, lost or stolen Security has become or is about to
become due and payable, the Company in its discretion may, instead of issuing a new Security, pay
such Security.
Upon the issuance of any new Security under this Section, the Company may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Trustee) connected
therewith.
Every new Security of any Series issued pursuant to this Section in lieu of any destroyed,
lost or stolen Security shall constitute an original additional contractual obligation of the
Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately
with any and all other Securities of that Series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the extent lawful) all
other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost
or stolen Securities.
Section 2.9. Outstanding Securities. The Securities outstanding at any time are all the
Securities authenticated by the Trustee except for those canceled by it, those delivered to it for
cancellation, those reductions in the interest on a Global Security effected by the Trustee in
accordance with the provisions hereof and those described in this Section as not outstanding.
If a Security is replaced pursuant to Section 2.8, it ceases to be outstanding until the
Trustee receives proof satisfactory to it that the replaced Security is held by a bona fide
purchaser.
If the Paying Agent (other than the Company, a Subsidiary of the Company or an Affiliate of
any thereof) holds on the Maturity of Securities of a Series money sufficient to pay such
Securities payable on that date, then on and after that date such Securities of the Series cease to
be outstanding and interest on them ceases to accrue.
A Security does not cease to be outstanding because the Company or an Affiliate of the Company
holds the Security.
In determining whether the Holders of the requisite principal amount of outstanding Securities
have given any request, demand, authorization, direction, notice, consent or waiver hereunder, the
principal amount of a Discount Security that shall be deemed to be outstanding for such purposes
shall be the amount of the principal thereof that would be due and payable as of the date of such
determination upon a declaration of acceleration of the Maturity thereof pursuant to Section 6.2.
Section 2.10. Treasury Securities. In determining whether the Holders of the required
principal amount of Securities of a Series have concurred in any request, demand, authorization,
direction, notice, consent or waiver, Securities of a Series owned by the Company or an Affiliate
of the Company shall be disregarded, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such request, demand, authorization, direction,
notice, consent or waiver only Securities of a Series that the Trustee knows are so owned shall be
so disregarded.
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Section 2.11. Temporary Securities. Until definitive Securities are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Securities upon a Company Order.
Temporary Securities shall be substantially in the form of definitive Securities but may have
variations that the Company considers appropriate for temporary Securities. Without unreasonable
delay, the Company shall prepare and the Trustee, upon request, shall authenticate definitive
Securities of the same Series and date of Maturity in exchange for temporary Securities. Until so
exchanged, temporary Securities shall have the same rights under this Indenture as the definitive
Securities.
Section 2.12. Cancellation. The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Securities
surrendered to them for registration of transfer, exchange or payment. The Trustee shall cancel
all Securities surrendered for transfer, exchange, payment, replacement or cancellation and shall
destroy such canceled Securities (subject to the record retention requirement of the Exchange Act)
and deliver a certificate of such destruction to the Company, unless the Company otherwise directs.
The Company may not issue new Securities to replace Securities that it has paid or delivered to
the Trustee for cancellation.
Section 2.13. Defaulted Interest. If the Company defaults in a payment of interest on a
Series of Securities, it shall pay the defaulted interest, plus, to the extent permitted by law,
any interest payable on the defaulted interest, to the persons who are Securityholders of the
Series on a subsequent special record date. The Company shall fix the record date and payment
date. At least 30 days before the record date, the Company shall mail to the Trustee and to each
Securityholder of the Series a notice that states the record date, the payment date and the amount
of interest to be paid. The Company may pay defaulted interest in any other lawful manner.
Section 2.14. Global Securities.
2.14.1. Terms of Securities. A Board Resolution, a supplemental indenture hereto or
an Officers Certificate shall establish whether Securities of a Series shall be issued in whole or
in part in the form of one or more Global Securities and the Depository for such Global Security or
Securities.
2.14.2. Transfer and Exchange. Notwithstanding any provisions to the contrary
contained in Section 2.7 of the Indenture and in addition thereto, any Global Security shall be
exchangeable pursuant to Section 2.7 of the Indenture for Securities registered in the names of
Holders other than the Depository for such Security or its nominee only if (i) such Depository
notifies the Company that it is unwilling or unable to continue as Depository for such Global
Security or if at any time such Depository ceases to be a clearing agency registered under the
Exchange Act, and, in either case, the Company fails to appoint a successor Depository within 90
days of such event, (ii) the Company executes and delivers to the Trustee an Officers Certificate
to the effect that such Global Security shall be so exchangeable or (iii) an Event of Default with
respect to the Securities represented by such Global Security shall have happened and be
continuing. Any Global Security that is exchangeable pursuant to the preceding sentence shall be
exchangeable for Securities registered in such names as the Depository shall direct in writing in
an aggregate principal amount equal to the principal amount of the Global Security with like tenor
and terms.
Except as provided in this Section 2.14.2, a Global Security may not be transferred except as
a whole by the Depository with respect to such Global Security to a nominee of such
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Depository, by a nominee of such Depository to such Depository or another nominee of such
Depository or by the Depository or any such nominee to a successor Depository or a nominee of such
a successor Depository.
2.14.3. Legend. Any Global Security issued hereunder shall bear a legend in
substantially the following form:
This Security is a Global Security within the meaning of the Indenture hereinafter
referred to and is registered in the name of the Depository or a nominee of the
Depository. This Security is exchangeable for Securities registered in the name of
a person other than the Depository or its nominee only in the limited circumstances
described in the Indenture, and may not be transferred except as a whole by the
Depository to a nominee of the Depository, by a nominee of the Depository to the
Depository or another nominee of the Depository or by the Depository or any such
nominee to a successor Depository or a nominee of such a successor Depository.
2.14.4. Acts of Holders. The Depository, as a Holder, may appoint agents and
otherwise authorize participants to give or take any request, demand, authorization, direction,
notice, consent, waiver or other action which a Holder is entitled to give or take under the
Indenture.
2.14.5. Payments. Notwithstanding the other provisions of this Indenture, unless
otherwise specified as contemplated by Section 2.2, payment of the principal of and interest, if
any, on any Global Security shall be made to the Holder thereof.
2.14.6. Consents, Declaration and Directions. Except as provided in Section 2.14.5,
the Company, the Trustee and any Agent shall treat a person as the Holder of such principal amount
of outstanding Securities of such Series represented by a Global Security as shall be specified in
a written statement of the Depository with respect to such Global Security, for purposes of
obtaining any consents, declarations, waivers or directions required to be given by the Holders
pursuant to this Indenture.
2.14.7. CUSIP Numbers. The Company in issuing the Securities may use CUSIP numbers
(if then generally in use), and, if so, the Trustee shall use CUSIP numbers in notices of
redemption as a convenience to Holders; provided that any such notice may state that no
representation is made as to the correctness of such numbers either as printed on the Securities or
as contained in any notice of a redemption and that reliance may be placed only on the other
elements of identification printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers.
ARTICLE III
REDEMPTION
Section 3.1. Notice to Trustee. The Company may, with respect to any Series of Securities,
reserve the right to redeem and pay the Series of Securities or may covenant to redeem and pay the
Series of Securities or any part thereof prior to the Stated Maturity thereof at such time and on
such terms as provided for in such Securities. If a Series of Securities is redeemable and the
Company wants or is obligated to redeem prior to the Stated Maturity thereof all or part of the
Series of Securities pursuant to the terms of such Securities, it shall notify the Trustee of the
redemption date and the principal amount of Series of Securities to be redeemed. The Company shall
give the
13
notice at least 45 days before the redemption date (or such shorter notice as may be
acceptable to the Trustee).
Section 3.2. Selection of Securities to be Redeemed. Unless otherwise indicated for a
particular Series by a Board Resolution, a supplemental indenture or an Officers Certificate, if
less than all the Securities of a Series are to be redeemed, the Trustee shall select Securities of
the Series to be redeemed in any manner that the Trustee deems fair and appropriate. The Trustee
shall make the selection from Securities of the Series outstanding not previously called for
redemption. The Trustee may select for redemption portions of the principal of Securities of the
Series that have denominations larger than $1,000. Securities of the Series and portions of them
it selects shall be in amounts of $1,000 or whole multiples of $1,000 or, with respect to
Securities of any Series issuable in other denominations pursuant to Section 2.2.10, the minimum
principal denomination for each Series and integral multiples thereof. Provisions of this
Indenture that apply to Securities of a Series called for redemption also apply to portions of
Securities of that Series called for redemption.
Section 3.3. Notice of Redemption. Unless otherwise indicated for a particular Series by a
Board Resolution, a supplemental indenture hereto or an Officers Certificate, at least 30 days but
not more than 60 days before a redemption date, the Company shall mail a notice of redemption by
first-class mail to each Holder whose Securities are to be redeemed and if any Bearer Securities
are outstanding, publish on one occasion a notice in an Authorized Newspaper.
The notice shall identify the Securities of the Series to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) the name and address of the Paying Agent;
(d) that Securities of the Series called for redemption must be surrendered to the Paying
Agent to collect the redemption price;
(e) that interest on Securities of the Series called for redemption ceases to accrue on and
after the redemption date; and
(f) any other information as may be required by the terms of the particular Series or
Securities of a Series being redeemed.
At the Companys request, the Trustee shall give the notice of redemption in the Companys
name and at its expense.
Section 3.4. Effect of Notice of Redemption. Once notice of redemption is mailed or published
as provided in Section 3.3, Securities of a Series called for redemption become due and payable on
the redemption date and at the redemption price. A notice of redemption may not be conditional.
Upon surrender to the Paying Agent, such Securities shall be paid at the redemption price plus
accrued interest to the redemption date.
Section 3.5. Deposit of Redemption Price. On or before the redemption date, the Company shall
deposit with the Paying Agent money sufficient to pay the redemption price of and accrued interest,
if any, on all Securities to be redeemed on that date.
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Section 3.6. Securities Redeemed in Part. Upon surrender of a Security that is redeemed in
part, the Trustee shall authenticate for the Holder a new Security of the same Series and the same
Maturity equal in principal amount to the unredeemed portion of the Security surrendered.
ARTICLE IV
COVENANTS
Section 4.1. Payment of Principal and Interest. The Company covenants and agrees for the
benefit of the Holders of each Series of Securities that it will duly and punctually pay the
principal of and interest, if any, on Securities of that Series in accordance with the terms of
such Securities and this Indenture.
Section 4.2. SEC Reports. The Company shall deliver to the Trustee, within 15 days after it
files them with the SEC, copies of the annual reports and of the information, documents, and other
reports (or copies of such portions of any of the foregoing as the SEC may by rules and regulations
prescribe) which the Company is required to file with the SEC pursuant to Section 13 or 15(d) of
the Exchange Act. The Company also shall comply with the other provisions of TIA Section 314(a).
Section 4.3. Compliance Certificate. The Company shall deliver to the Trustee, within 90 days
after the end of each fiscal year of the Company, an Officers Certificate stating that a review of
the activities of the Company and its Subsidiaries during the preceding fiscal year has been made
under the supervision of the signing Officers with a view to determining whether the Company has
kept, observed, performed and fulfilled its obligations under this Indenture, and further stating,
as to each such Officer signing such certificate, that to the best of such Officers knowledge the
Company has kept, observed, performed and fulfilled each and every covenant contained in this
Indenture and is not in default in the performance or observance of any of the terms, provisions
and conditions hereof (or, if a Default or Event of Default shall have occurred, describing all
such Defaults or Events of Default of which such Officer may have knowledge).
The Company will, so long as any of the Securities are outstanding, deliver to the Trustee,
forthwith upon becoming aware of any Default or Event of Default, an Officers Certificate
specifying such Default or Event of Default and what action the Company is taking or proposes to
take with respect thereto.
Section 4.4. Stay, Extension and Usury Laws. The Company covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at
any time hereafter in force, which may affect the covenants or the performance of this Indenture or
the Securities; and the Company (to the extent it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law and covenants that it will not, by resort to any such law,
hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law has been enacted.
Section 4.5. Corporate Existence. Subject to Article V, the Company will do or cause to be
done all things necessary to preserve and keep in full force and effect its corporate existence and
the corporate, partnership or other existence of each Significant Subsidiary in accordance with the
respective organizational documents of each Significant Subsidiary and the rights (charter and
statutory), licenses and franchises of the Company and its Significant Subsidiaries; provided,
15
however, that the Company shall not be required to preserve any such right, license or franchise,
or the corporate, partnership or other existence of any Significant Subsidiary, if the Board of
Directors shall determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company and its Subsidiaries taken as a whole and that the loss thereof is not
adverse in any material respect to the Holders.
Section 4.6. Taxes. The Company shall, and shall cause each of its Significant Subsidiaries
to, pay prior to delinquency all taxes, assessments and governmental levies, except as contested in
good faith and by appropriate proceedings.
ARTICLE V
SUCCESSORS
Section 5.1. When Company May Merge, Etc. The Company shall not consolidate with or merge
into, or convey, transfer or lease all or substantially all of its properties and assets to, any
person (a successor person), and may not permit any person to merge into, or convey, transfer or
lease its properties and assets substantially as an entirety to, the Company, unless:
(a) the successor person (if any) is a corporation, partnership, trust or other entity
organized and validly existing under the laws of any U.S. domestic jurisdiction and expressly
assumes the Companys obligations on the Securities and under this Indenture and
(b) immediately after giving effect to the transaction, no Default or Event of Default, shall
have occurred and be continuing.
The Company shall deliver to the Trustee, prior to the consummation of the proposed
transaction, an Officers Certificate to the foregoing effect and an Opinion of Counsel stating
that the proposed transaction and such supplemental indenture comply with this Indenture.
Section 5.2. Successor Corporation Substituted. Upon any consolidation or merger, or any
sale, lease, conveyance or other disposition of all or substantially all of the assets of the
Company in accordance with Section 5.1, the successor corporation formed by such consolidation or
into or with which the Company is merged or to which such sale, lease, conveyance or other
disposition is made shall execute a written assumption of the Companys obligations under this
Indenture and upon such assumption shall succeed to, and be substituted for, and may exercise every
right and power of, the Company under this Indenture with the same effect as if such successor
person has been named as the Company herein; provided, however, that the predecessor Company in the
case of a sale, lease, conveyance or other disposition shall not be released from the obligation to
pay the principal of and interest, if any, on the Securities.
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.1. Events of Default. Event of Default, wherever used herein with respect to
Securities of any Series, means any one of the following events, unless in the establishing Board
Resolution, supplemental indenture or Officers Certificate, it is provided that such Series shall
not have the benefit of said Event of Default:
16
(a) default in the payment of any interest on any Security of that Series when it becomes due
and payable, and continuance of such default for a period of 30 days (unless the entire amount of
such payment is deposited by the Company with the Trustee or with a Paying Agent prior to the
expiration of such period of 30 days); or
(b) default in the payment of the principal of any Security of that Series at its Maturity; or
(c) default in the deposit of any sinking fund payment, when and as due in respect of any
Security of that Series; or
(d) default in the performance or breach of any covenant or warranty of the Company in this
Indenture (other than a covenant or warranty that has been included in this Indenture solely for
the benefit of Series of Securities other than that Series), which default continues uncured for a
period of 60 days after there has been given, by registered or certified mail, to the Company by
the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of
the outstanding Securities of that Series a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a Notice of Default hereunder; or
(e) the Company or any of its Significant Subsidiaries pursuant to or within the meaning of
any Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in an involuntary case,
(iii) consents to the appointment of a Custodian of it or for all or substantially all of its
property,
(iv) makes a general assignment for the benefit of its creditors, or
(v) generally is unable to pay its debts as the same become due; or
(f) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:
(i) is for relief against the Company or any of its Significant Subsidiaries in an involuntary
case,
(ii) appoints a Custodian of the Company or any of its Significant Subsidiaries or for all or
substantially all of its property, or
(iii) orders the liquidation of the Company or any of its Significant Subsidiaries, and the
order or decree remains unstayed and in effect for 60 days; or
(g) any other Event of Default provided with respect to Securities of that Series, which is
specified in a Board Resolution, a supplemental indenture hereto or an Officers Certificate, in
accordance with Section 2.2.18.
17
The term Bankruptcy Law means title 11, U.S. Code or any similar Federal or State law for
the relief of debtors. The term Custodian means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.
Section 6.2. Acceleration of Maturity; Rescission and Annulment. If an Event of Default with
respect to Securities of any Series at the time outstanding occurs and is continuing (other than an
Event of Default referred to in Section 6.1(e) or (f)) then in every such case the Trustee or the
Holders of not less than 25% in principal amount of the outstanding Securities of that Series may
declare the principal amount (or, if any Securities of that Series are Discount Securities, such
portion of the principal amount as may be specified in the terms of such Securities) of and accrued
and unpaid interest, if any, on all of the Securities of that Series to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given by Holders), and
upon any such declaration such principal amount (or specified amount) and accrued and unpaid
interest, if any, shall become immediately due and payable. If an Event of Default specified in
Section 6.1(e) or (f) shall occur, the principal amount (or specified amount) of and accrued and
unpaid interest, if any, on all outstanding Securities shall ipso facto become and be immediately
due and payable without any declaration or other act on the part of the Trustee or any Holder.
At any time after such a declaration of acceleration with respect to any Series has been made
and before a judgment or decree for payment of the money due has been obtained by the Trustee as
hereinafter in this Article provided, the Holders of a majority in principal amount of the
outstanding Securities of that Series, by written notice to the Company and the Trustee, may
rescind and annul such declaration and its consequences if:
(a) the Company has paid or deposited with the Trustee a sum sufficient to pay:
(i) all overdue interest, if any, on all Securities of that Series,
(ii) the principal of any Securities of that Series which have become due otherwise than by
such declaration of acceleration and interest thereon at the rate or rates prescribed therefor in
such Securities,
(iii) to the extent that payment of such interest is lawful, interest upon any overdue
principal and overdue interest at the rate or rates prescribed therefor in such Securities, and
(iv) all sums paid or advanced by the Trustee hereunder and the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel; and
(b) all Events of Default with respect to Securities of that Series, other than the
non-payment of the principal of Securities of that Series which have become due solely by such
declaration of acceleration, have been cured or waived as provided in Section 6.13.
No such rescission shall affect any subsequent Default or impair any right consequent thereon.
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Section 6.3. Collection of Indebtedness and Suits for Enforcement by Trustee. The Company
covenants that if
(a) default is made in the payment of any interest on any Security when such interest becomes
due and payable and such default continues for a period of 30 days, or
(b) default is made in the payment of principal of any Security at the Maturity thereof, or
(c) default is made in the deposit of any sinking fund payment when and as due by the terms of
a Security,
then, the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of
such Securities, the whole amount then due and payable on such Securities for principal and
interest and, to the extent that payment of such interest shall be legally enforceable, interest on
any overdue principal or any overdue interest, at the rate or rates prescribed therefor in such
Securities, and, in addition thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand, the Trustee, in its own
name and as trustee of an express trust, may institute a judicial proceeding for the collection of
the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon such Securities and collect the
moneys adjudged or deemed to be payable in the manner provided by law out of the property of the
Company or any other obligor upon such Securities, wherever situated.
If an Event of Default with respect to any Securities of any Series occurs and is continuing,
the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the
Holders of Securities of such Series by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein,
or to enforce any other proper remedy.
Section 6.4. Trustee May File Proofs of Claim. In case of the pendency of any receivership,
insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the Securities or the
property of the Company or of such other obligor or their creditors, the Trustee (irrespective of
whether the principal of the Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the
Company for the payment of overdue principal or interest) shall be entitled and empowered, by
intervention in such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of principal and interest owing and unpaid
in respect of the Securities and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and of
the Holders allowed in such judicial proceeding, and
19
(b) to collect and receive any moneys or other property payable or deliverable on any such
claims and to distribute the same, and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and
counsel, and any other amounts due the Trustee under Section 7.7.
Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to
or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
Section 6.5. Trustee May Enforce Claims Without Possession of Securities. All rights of
action and claims under this Indenture or the Securities may be prosecuted and enforced by the
Trustee without the possession of any of the Securities or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment shall, after provision for the
payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which
such judgment has been recovered.
Section 6.6. Application of Money Collected. Any money collected by the Trustee pursuant to
this Article shall be applied in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of principal or interest, upon
presentation of the Securities and the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:
First: To the payment of all amounts due the Trustee under Section 7.7; and
Second: To the payment of the amounts then due and unpaid for principal of and interest on
the Securities in respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the amounts due and payable on
such Securities for principal and interest, respectively; and
Third: To the Company.
Section 6.7. Limitation on Suits. No Holder of any Security of any Series shall have any
right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for
the appointment of a receiver or trustee, or for any other remedy hereunder, unless
(a) such Holder has previously given written notice to the Trustee of a continuing Event of
Default with respect to the Securities of that Series;
(b) the Holders of not less than 25% in principal amount of the outstanding Securities of that
Series shall have made written request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
20
(c) such Holder or Holders have offered to the Trustee reasonable indemnity against the costs,
expenses and liabilities to be incurred in compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity
has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been given to the Trustee during
such 60-day period by the Holders of a majority in principal amount of the outstanding Securities
of that Series;
it being understood and intended that no one or more of such Holders shall have any right in any
manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb
or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such Holders.
Section 6.8. Unconditional Right of Holders to Receive Principal and Interest.
Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the
right, which is absolute and unconditional, to receive payment of the principal of, premium and
interest, if any, on such Security on the Stated Maturity or Stated Maturities expressed in such
Security (or, in the case of redemption, on the redemption date) and to institute suit for the
enforcement of any such payment, and such rights shall not be impaired without the consent of such
Holder.
Section 6.9. Restoration of Rights and Remedies. If the Trustee or any Holder has instituted
any proceeding to enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to
such Holder, then and in every such case, subject to any determination in such proceeding, the
Company, the Trustee and the Holders shall be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall
continue as though no such proceeding had been instituted.
Section 6.10. Rights and Remedies Cumulative. Except as otherwise provided with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities in Section 2.8, no
right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to
be exclusive of any other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment
of any other appropriate right or remedy.
Section 6.11. Delay or Omission Not Waiver. No delay or omission of the Trustee or of any
Holder of any Securities to exercise any right or remedy accruing upon any Event of Default shall
impair any such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to
the
Holders may be exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders, as the case may be.
21
Section 6.12. Control by Holders. The Holders of a majority in principal amount of the
outstanding Securities of any Series shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power
conferred on the Trustee, with respect to the Securities of such Series, provided that
(a) such direction shall not be in conflict with any rule of law or with this Indenture,
(b) the Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction, and
(c) subject to the provisions of Section 6.1, the Trustee shall have the right to decline to
follow any such direction if the Trustee in good faith shall, by a Responsible Officer of the
Trustee, determine that the proceeding so directed would involve the Trustee in personal liability.
Section 6.13. Waiver of Past Defaults. The Holders of not less than a majority in principal
amount of the outstanding Securities of any Series may on behalf of the Holders of all the
Securities of such Series waive any past Default hereunder with respect to such Series and its
consequences, except a Default (i) in the payment of the principal of or interest on any Security
of such Series (provided, however, that the Holders of a majority in principal amount of the
outstanding Securities of any Series may rescind an acceleration and its consequences, including
any related payment default that resulted from such acceleration) and (ii) in respect of a covenant
or provision hereof which cannot be modified or amended without the consent of the Holder of each
outstanding Security of such Series affected. Upon any such waiver, such Default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.
Section 6.14. Undertaking For Costs. All parties to this Indenture agree, and each Holder of
any Security by his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or
in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable attorneys fees,
against any party litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; but the provisions of this Section shall not apply
to any suit instituted by the Company, to any suit instituted by the Trustee, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in principal
amount of the outstanding Securities of any Series, or to any suit instituted by any Holder for the
enforcement of the payment of the principal of or interest on any Security on or after the Stated
Maturity or Stated Maturities expressed in such Security (or, in the case of redemption, on the
redemption date).
ARTICLE VII
TRUSTEE
Section 7.1. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee shall exercise the
rights and powers vested in it by this Indenture and use the same degree of care and skill
22
in their
exercise as a prudent man would exercise or use under the circumstances in the conduct of his own
affairs.
(b) Except during the continuance of an Event of Default:
(i) The Trustee need perform only those duties that are specifically set forth in this
Indenture and no others.
(ii) In the absence of bad faith on its part, the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed therein, upon Officers
Certificates or Opinions of Counsel furnished to the Trustee and conforming to the requirements of
this Indenture; however, in the case of any such Officers Certificates or Opinions of Counsel
which by any provisions hereof are specifically required to be furnished to the Trustee, the
Trustee shall examine such Officers Certificates and Opinions of Counsel to determine whether or
not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except that:
(i) This paragraph does not limit the effect of paragraph (b) of this Section.
(ii) The Trustee shall not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the
pertinent facts.
(iii) The Trustee shall not be liable with respect to any action taken, suffered or omitted to
be taken by it with respect to Securities of any Series in good faith in accordance with the
direction of the Holders of a majority in principal amount of the outstanding Securities of such
Series relating to the time, method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture
with respect to the Securities of such Series.
(d) Every provision of this Indenture that in any way relates to the Trustee is subject to
paragraph (a), (b) and (c) of this Section.
(e) The Trustee may refuse to perform any duty or exercise any right or power unless it
receives indemnity satisfactory to it against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money received by it except as the
Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be
segregated from other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to risk its own funds or
otherwise incur any financial liability in the performance of any of its duties, or in the exercise
of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk is not reasonably assured to it.
23
(h) The Paying Agent, the Registrar and any authenticating agent shall be entitled to the
protections, immunities and standard of care as are set forth in paragraphs (a), (b) and (c) of
this Section with respect to the Trustee.
(i) The Trustee shall not be deemed to have knowledge of any default or Event of Default
unless a Responsible Officer has actual knowledge of such default or Event of Default.
Section 7.2. Rights of Trustee.
(a) The Trustee may rely on and shall be protected in acting or refraining from acting upon
any document believed by it to be genuine and to have been signed or presented by the proper
person. The Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an Officers Certificate
or an Opinion of Counsel. The Trustee shall not be liable for any action it takes or omits to take
in good faith in reliance on such Officers Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible for the misconduct or
negligence of any agent appointed with due care. No Depository shall be deemed an agent of the
Trustee and the Trustee shall not be responsible for any act or omission by any Depository.
(d) The Trustee shall not be liable for any action it takes or omits to take in good faith
which it believes to be authorized or within its rights or powers.
(e) The Trustee may consult with counsel and the advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon.
(f) The Trustee shall be under no obligation to exercise any of the rights or powers vested in
it by this Indenture at the request or direction of any of the Holders of Securities unless such
Holders shall have offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such request or
direction.
Section 7.3. Individual Rights of Trustee. The Trustee in its individual or any other
capacity may become the owner or pledgee of Securities and may otherwise deal with the Company or
an Affiliate of the Company with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. The Trustee is also subject to Sections 7.10 and 7.11.
Section 7.4. Trustees Disclaimer. The Trustee makes no representation as to the validity or
adequacy of this Indenture or the Securities, it shall not be accountable for the Companys use of
the proceeds from the Securities, and it shall not be responsible for any statement in the
Securities other than its authentication.
Section 7.5. Notice of Defaults. If a Default or Event of Default occurs and is continuing
with respect to the Securities of any Series and if it is known to a Responsible Officer of the
Trustee, the Trustee shall mail to each Securityholder of the Securities of that Series and, if any
Bearer Securities are outstanding, publish on one occasion in an Authorized Newspaper, notice of a
Default or Event of Default within 90 days after it occurs or, if later, after a Responsible
Officer of the
24
Trustee has knowledge of such Default or Event of Default. Except in the case of a
Default or Event of Default in payment of principal of or interest on any Security of any Series,
the Trustee may withhold the notice if and so long as its corporate trust committee or a committee
of its Responsible Officers in good faith determines that withholding the notice is in the
interests of Securityholders of that Series.
Section 7.6. Reports by Trustee to Holders. Within 60 days after May 15 in each year, the
Trustee shall transmit by mail to all Securityholders, as their names and addresses appear on the
register kept by the Registrar and, if any Bearer Securities are outstanding, publish in an
Authorized Newspaper, a brief report dated as of such May 15, in accordance with, and to the extent
required under, TIA Section 313.
A copy of each report at the time of its mailing to Securityholders of any Series shall be
filed with the SEC and each stock exchange on which the Securities of that Series are listed. The
Company shall promptly notify the Trustee when Securities of any Series are listed on any stock
exchange.
Section 7.7. Compensation and Indemnity. The Company shall pay to the Trustee from time to
time reasonable compensation for its services. The Trustees compensation shall not be limited by
any law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee
upon request for all reasonable out-of-pocket expenses incurred by it. Such expenses shall include
the reasonable compensation and expenses of the Trustees agents and counsel.
The Company shall indemnify the Trustee (including the cost of defending itself) against any
loss, liability or expense incurred by it except as set forth in the next paragraph in the
performance of its duties under this Indenture as Trustee or Agent. The Trustee shall notify the
Company promptly of any claim for which it may seek indemnity. The Company shall defend the claim
and the Trustee shall cooperate in the defense. The Trustee may have separate counsel and the
Company shall pay the reasonable fees and expenses of such counsel. The Company need not pay for
any settlement made without its consent, which consent shall not be unreasonably withheld. This
indemnification shall apply to officers, directors, employees, shareholders and agents of the
Trustee.
The Company need not reimburse any expense or indemnify against any loss or liability incurred
by the Trustee or by any officer, director, employee, shareholder or agent of the Trustee through
negligence or bad faith.
To secure the Companys payment obligations in this Section, the Trustee shall have a lien
prior to the Securities of any Series on all money or property held or collected by the Trustee,
except that held in trust to pay principal and interest on particular Securities of that Series.
When the Trustee incurs expenses or renders services after an Event of Default specified in
Section 6.1(e) or (f) occurs, the expenses and the compensation for the services are intended to
constitute expenses of administration under any Bankruptcy Law.
Section 7.8. Replacement of Trustee. A resignation or removal of the Trustee and appointment
of a successor Trustee shall become effective only upon the successor Trustees acceptance of
appointment as provided in this Section.
25
The Trustee may resign with respect to the Securities of one or more Series by so notifying
the Company at least 30 days prior to the date of the proposed resignation. The Holders of a
majority in principal amount of the Securities of any Series may remove the Trustee with respect to
that Series by so notifying the Trustee and the Company. The Company may remove the Trustee with
respect to Securities of one or more Series if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with
respect to the Trustee under any Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any
reason, the Company shall promptly appoint a successor Trustee. Within one year after the
successor Trustee takes office, the Holders of a majority in principal amount of the then
outstanding Securities may appoint a successor Trustee to replace the successor Trustee appointed
by the Company.
If a successor Trustee with respect to the Securities of any one or more Series does not take
office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company or the Holders of at least 10% in principal amount of the Securities of the applicable
Series may petition any court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee with respect to the Securities of any one or more Series fails to comply with
Section 7.10, any Securityholder of the applicable Series may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment to the retiring
Trustee and to the Company. Immediately after that, the retiring Trustee shall transfer all
property held by it as Trustee to the successor Trustee subject to the lien provided for in Section
7.7, the resignation or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee with respect to each Series of
Securities for which it is acting as Trustee under this Indenture. A successor Trustee shall mail
a notice of its succession to each Securityholder of each such Series and, if any Bearer Securities
are outstanding, publish such notice on one occasion in an Authorized Newspaper. Notwithstanding
replacement of the Trustee pursuant to this Section 7.8, the Companys obligations under Section
7.7 hereof shall continue for the benefit of the retiring trustee with respect to expenses and
liabilities incurred by it prior to such replacement.
Section 7.9. Successor Trustee by Merger, Etc. If the Trustee consolidates with, merges or
converts into, or transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the successor Trustee.
Section 7.10. Eligibility; Disqualification. This Indenture shall always have a Trustee who
satisfies the requirements of TIA Section 310(a)(1), (2) and (5). The Trustee shall always have a
combined capital and surplus of at least $25,000,000 as set forth in its most recent published
annual report of condition. The Trustee shall comply with TIA Section 310(b).
26
Section 7.11. Preferential Collection of Claims Against Company. The Trustee is subject to
TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b). A Trustee
who has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated.
ARTICLE VIII
SATISFACTION AND DISCHARGE; DEFEASANCE
Section 8.1. Satisfaction and Discharge of Indenture. This Indenture shall upon Company Order
cease to be of further effect (except as hereinafter provided in this Section 8.1), and the
Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction
and discharge of this Indenture, when
(a) either
(i) all Securities theretofore authenticated and delivered (other than Securities that have
been destroyed, lost or stolen and that have been replaced or paid) have been delivered to the
Trustee for cancellation; or
(ii) all such Securities not theretofore delivered to the Trustee for cancellation
(1) have become due and payable, or
(2) will become due and payable at their Stated Maturity within one year, or
(3) are to be called for redemption within one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of
the Company, or
(4) are deemed paid and discharged pursuant to Section 8.3, as applicable;
and the Company, in the case of (1), (2) or (3) above, has irrevocably deposited or caused to be
deposited with the Trustee as trust funds in trust an amount sufficient for the purpose of paying
and discharging the entire indebtedness on such Securities not theretofore delivered to the Trustee
for cancellation, for principal and interest to the date of such deposit (in the case of Securities
which have become due and payable on or prior to the date of such deposit) or to the Stated
Maturity or redemption date, as the case may be;
(b) the Company has paid or caused to be paid all other sums payable hereunder by the Company;
and
(c) the Company has delivered to the Trustee an Officers Certificate and an Opinion of
Counsel, each stating that all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the
Company to the Trustee under Section 7.7, and, if money shall have been deposited with the Trustee
27
pursuant to clause (a) of this Section, the provisions of Sections 2.4, 2.7, 2.8, 8.1 8.2 and 8.5
shall survive.
Section 8.2. Application of Trust Funds; Indemnification.
(a) Subject to the provisions of Section 8.5, all money deposited with the Trustee pursuant to
Section 8.1, all money and U.S. Government Obligations or Foreign Government Obligations deposited
with the Trustee pursuant to Section 8.3 or 8.4 and all money received by the Trustee in respect of
U.S. Government Obligations or Foreign Government Obligations deposited with the Trustee pursuant
to Section 8.3 or 8.4, shall be held in trust and applied by it, in accordance with the provisions
of the Securities and this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may determine, to the persons
entitled thereto, of the principal and interest for whose payment such money has been deposited
with or received by the Trustee or to make mandatory sinking fund payments or analogous payments as
contemplated by Sections 8.3 or 8.4.
(b) The Company shall pay and shall indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against U.S. Government Obligations or Foreign Government Obligations
deposited pursuant to Sections 8.3 or 8.4 or the interest and principal received in respect of such
obligations other than any payable by or on behalf of Holders.
(c) The Trustee shall deliver or pay to the Company from time to time upon Company Request any
U.S. Government Obligations or Foreign Government Obligations or money held by it as provided in
Sections 8.3 or 8.4 which, in the opinion of a nationally recognized firm of independent certified
public accountants expressed in a written certification thereof delivered to the Trustee, are then
in excess of the amount thereof which then would have been required to be deposited for the purpose
for which such U.S. Government Obligations or Foreign Government Obligations or money were
deposited or received. This provision shall not authorize the sale by the Trustee of any U.S.
Government Obligations or Foreign Government Obligations held under this Indenture.
Section 8.3. Legal Defeasance of Securities of Any Series. Unless this Section 8.3 is
otherwise specified, pursuant to Section 2.2.20, to be inapplicable to Securities of any Series,
the Company shall be deemed to have paid and discharged the entire indebtedness on all the
outstanding Securities of such Series on the 91st day after the date of the deposit referred to in
subparagraph (d) hereof, and the provisions of this Indenture, as it relates to such outstanding
Securities of such Series, shall no longer be in effect (and the Trustee, at the expense of the
Company, shall, at Company Request, execute proper instruments acknowledging the same), except as
to:
(a) the rights of Holders of Securities of such Series to receive, from the trust funds
described in subparagraph (d) hereof, (i) payment of the principal of and each installment of
principal of and interest on the outstanding Securities of such Series on the Stated Maturity of
such principal or installment of principal or interest and (ii) the benefit of any mandatory
sinking fund
payments applicable to the Securities of such Series on the day on which such payments are due
and payable in accordance with the terms of this Indenture and the Securities of such Series;
(b) the provisions of Sections 2.4, 2.7, 2.8, 8.2, 8.3 and 8.5; and
(c) the rights, powers, trust and immunities of the Trustee hereunder;
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provided that, the following conditions shall have been satisfied:
(d) the Company shall have deposited or caused to be deposited irrevocably with the Trustee as
trust funds in trust for the purpose of making the following payments, specifically pledged as
security for and dedicated solely to the benefit of the Holders of such Securities (i) in the case
of Securities of such Series denominated in Dollars, cash in Dollars (or such other money or
currencies as shall then be legal tender in the United States) and/or U.S. Government Obligations,
or (ii) in the case of Securities of such Series denominated in a Foreign Currency (other than a
composite currency), money and/or Foreign Government Obligations, which through the payment of
interest and principal in respect thereof, in accordance with their terms, will provide (and
without reinvestment and assuming no tax liability will be imposed on such Trustee), not later than
one day before the due date of any payment of money, an amount in cash, sufficient, in the opinion
of a nationally recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and discharge each installment of principal
(including mandatory sinking fund or analogous payments) of and interest, if any, on all the
Securities of such Series on the dates such installments of interest or principal are due;
(e) such deposit will not result in a breach or violation of, or constitute a default under,
this Indenture or any other agreement or instrument to which the Company is a party or by which it
is bound;
(f) no Default or Event of Default with respect to the Securities of such Series shall have
occurred and be continuing on the date of such deposit or during the period ending on the 91st day
after such date;
(g) the Company shall have delivered to the Trustee an Officers Certificate and an Opinion of
Counsel to the effect that (i) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling, or (ii) since the date of execution of this Indenture, there has
been a change in the applicable Federal income tax law, in either case to the effect that, and
based thereon such Opinion of Counsel shall confirm that, the Holders of the Securities of such
Series will not recognize income, gain or loss for Federal income tax purposes as a result of such
deposit, defeasance and discharge and will be subject to Federal income tax on the same amount and
in the same manner and at the same times as would have been the case if such deposit, defeasance
and discharge had not occurred;
(h) the Company shall have delivered to the Trustee an Officers Certificate stating that the
deposit was not made by the Company with the intent of preferring the Holders of the Securities of
such Series over any other creditors of the company or with the intent of defeating, hindering,
delaying or defrauding any other creditors of the Company;
(i) such deposit shall not result in the trust arising from such deposit constituting an
investment company (as defined in the Investment Company Act of 1940, as amended), or such trust
shall be qualified under such Act or exempt from regulation thereunder; and
(j) the Company shall have delivered to the Trustee an Officers Certificate and an Opinion of
Counsel, each stating that all conditions precedent provided for relating to the defeasance
contemplated by this Section have been complied with.
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Section 8.4. Covenant Defeasance. Unless this Section 8.4 is otherwise specified pursuant to
Section 2.2.20 to be inapplicable to Securities of any Series, on and after the 91st day after the
date of the deposit referred to in subparagraph (a) hereof, the Company may omit to comply with any
term, provision or condition set forth under Sections 4.2, 4.3, 4.4, 4.5, 4.6, and 5.1 as well as
any additional covenants contained in a supplemental indenture hereto for a particular Series of
Securities or a Board Resolution or an Officers Certificate delivered pursuant to Section 2.2.20
(and the failure to comply with any such covenants shall not constitute a Default or Event of
Default under Section 6.1) with respect to the Securities of such Series, provided that the
following conditions shall have been satisfied:
(a) With reference to this Section 8.4, the Company has deposited or caused to be irrevocably
deposited (except as provided in Section 8.2(c)) with the Trustee as trust funds in trust,
specifically pledged as security for, and dedicated solely to, the benefit of the Holders of such
Securities (i) in the case of Securities of such Series denominated in Dollars, cash in Dollars (or
such other money or currencies as shall then be legal tender in the United States) and/or U.S.
Government Obligations, or (ii) in the case of Securities of such Series denominated in a Foreign
Currency (other than a composite currency), money and/or Foreign Government Obligations, which
through the payment of interest and principal in respect thereof, in accordance with their terms,
will provide (and without reinvestment and assuming no tax liability will be imposed on such
Trustee), not later than one day before the due date of any payment of money, an amount in cash,
sufficient, in the opinion of a nationally recognized firm of independent certified public
accountants expressed in a written certification thereof delivered to the Trustee, to pay principal
and interest, if any, on and any mandatory sinking fund in respect of the Securities of such Series
on the dates such installments of interest or principal are due;
(b) Such deposit will not result in a breach or violation of, or constitute a default under,
this Indenture or any other agreement or instrument to which the Company is a party or by which it
is bound;
(c) No Default or Event of Default with respect to the Securities of such Series shall have
occurred and be continuing on the date of such deposit or during the period ending on the 91st day
after such date;
(d) the Company shall have delivered to the Trustee an Opinion of Counsel confirming that
Holders of the Securities of such Series will not recognize income, gain or loss for federal income
tax purposes as a result of such deposit and defeasance and will be subject to federal income tax
on the same amounts, in the same manner and at the same times as would have been the case if such
deposit and defeasance had not occurred;
(e) the Company shall have delivered to the Trustee an Officers Certificate stating the
deposit was not made by the Company with the intent of preferring the Holders of the
Securities of such Series over any other creditors of the Company or with the intent of
defeating, hindering, delaying or defrauding any other creditors of the Company; and
(f) The Company shall have delivered to the Trustee an Officers Certificate and an Opinion of
Counsel, each stating that all conditions precedent herein provided for relating to the defeasance
contemplated by this Section have been complied with.
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Section 8.5. Repayment to Company. The Trustee and the Paying Agent shall pay to the Company
upon request any money held by them for the payment of principal and interest that remains
unclaimed for two years. After that, Securityholders entitled to the money must look to the
Company for payment as general creditors unless an applicable abandoned property law designates
another person.
ARTICLE IX
AMENDMENTS AND WAIVERS
Section 9.1. Without Consent of Holders. The Company and the Trustee may amend or supplement
this Indenture or the Securities of one or more Series without the consent of any Securityholder:
(a) to cure any ambiguity, defect or inconsistency;
(b) to comply with Article V;
(c) to provide for uncertificated Securities in addition to or in place of certificated
Securities;
(d) to make any change that does not adversely affect the rights of any Securityholder;
(e) to provide for the issuance of and establish the form and terms and conditions of
Securities of any Series as permitted by this Indenture;
(f) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee
with respect to the Securities of one or more Series and to add to or change any of the provisions
of this Indenture as shall be necessary to provide for or facilitate the administration of the
trusts hereunder by more than one Trustee; or
(g) to comply with requirements of the SEC in order to effect or maintain the qualification of
this Indenture under the TIA.
Section 9.2. With Consent of Holders. The Company and the Trustee may enter into a
supplemental indenture with the written consent of the Holders of at least a majority in principal
amount of the outstanding Securities of each Series affected by such supplemental indenture
(including consents obtained in connection with a tender offer or exchange offer for the Securities
of such Series), for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Securityholders of each such Series. Except as provided
in Section 6.13, the Holders of at least a majority in principal amount of the outstanding
Securities of each Series
affected by such waiver by notice to the Trustee (including consents obtained in connection
with a tender offer or exchange offer for the Securities of such Series) may waive compliance by
the Company with any provision of this Indenture or the Securities with respect to such Series.
It shall not be necessary for the consent of the Holders of Securities under this Section 9.2
to approve the particular form of any proposed supplemental indenture or waiver, but it shall be
sufficient if such consent approves the substance thereof. After a supplemental indenture or
waiver under this section becomes effective, the Company shall mail to the Holders of Securities
affected
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thereby and, if any Bearer Securities affected thereby are outstanding, publish on one
occasion in an Authorized Newspaper, a notice briefly describing the supplemental indenture or
waiver. Any failure by the Company to mail or publish such notice, or any defect therein, shall
not, however, in any way impair or affect the validity of any such supplemental indenture or
waiver.
Section 9.3. Limitations. Without the consent of each Securityholder affected, an amendment
or waiver may not:
(a) change the amount of Securities whose Holders must consent to an amendment, supplement or
waiver;
(b) reduce the rate of or extend the time for payment of interest (including default interest)
on any Security;
(c) reduce the principal or premium on or change the Stated Maturity of any Security or reduce
the amount of, or postpone the date fixed for, the payment of any sinking fund or analogous
obligation;
(d) reduce the principal amount of Discount Securities payable upon acceleration of the
maturity thereof;
(e) waive a Default or Event of Default in the payment of the principal of, premium on or
interest, if any, on any Security (except a rescission of acceleration of the Securities of any
Series by the Holders of at least a majority in principal amount of the outstanding Securities of
such Series and a waiver of the payment default that resulted from such acceleration);
(f) make the principal of or interest, if any, on any Security payable in any currency other
than that stated in the Security;
(g) make any change in Sections 6.8, 6.13 or 9.3 (this sentence); or
(h) waive a redemption payment with respect to any Security or change any of the provisions
with respect to the redemption of any Securities.
Section 9.4. Compliance with Trust Indenture Act. Every amendment to this Indenture or the
Securities of one or more Series shall be set forth in a supplemental indenture hereto that
complies with the TIA as then in effect.
Section 9.5. Revocation and Effect of Consents. Until an amendment or waiver becomes
effective, a consent to it by a Holder of a Security is a continuing consent by the Holder and
every subsequent Holder of a Security or portion of a Security that evidences the same debt as the
consenting Holders Security, even if notation of the consent is not made on any Security.
However, any such Holder or subsequent Holder may revoke the consent as to his Security or portion
of a Security if the Trustee receives the notice of revocation before the date the amendment or
waiver becomes effective.
Any amendment or waiver once effective shall bind every Securityholder of each Series affected
by such amendment or waiver unless it is of the type described in any of clauses (a) through (h) of
Section 9.3. In that case, the amendment or waiver shall bind each Holder of a Security who
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consented to it and every subsequent Holder of a Security or portion of a Security that evidences
the same debt as the consenting Holders Security.
Section 9.6. Notation on or Exchange of Securities. The Trustee may place an appropriate
notation about an amendment or waiver on any Security of any Series thereafter authenticated. The
Company in exchange for Securities of that Series may issue and the Trustee shall authenticate upon
request new Securities of that Series that reflect the amendment or waiver.
Section 9.7. Trustee Protected. In executing, or accepting the additional trusts created by,
any supplemental indenture permitted by this Article or the modifications thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and (subject to Section 7.1)
shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture. The Trustee shall sign all
supplemental indentures, except that the Trustee need not sign any supplemental indenture that
adversely affects its rights.
ARTICLE X
MISCELLANEOUS
Section 10.1. Trust Indenture Act Controls. If any provision of this Indenture limits,
qualifies, or conflicts with another provision which is required or deemed to be included in this
Indenture by the TIA, such required or deemed provision shall control.
Section 10.2. Notices. Unless otherwise provided herein, any notice or communication by the
Company or the Trustee to the other shall be in writing and delivered in person or by courier,
telegraphed, telexed or by facsimile transmission or mailed by first-class mail as follows:
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if to the Company:
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Questcor Pharmaceuticals, Inc.
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3260 Whipple Road |
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Union City, California 94587 |
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Attention: Chief Financial Officer |
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Facsimile: (510) 400-___ |
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with a copy to:
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Stradling Yocca Carlson & Rauth |
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660 Newport Center Drive, Suite 1600 |
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Newport Beach, California 92660 |
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Attention: Michael H. Mulroy |
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Facsimile: (949) 725-4100 |
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if to the Trustee:
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Attention: |
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Facsimile: |
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The Company or the Trustee by notice to the other may designate additional or different
addresses for subsequent notices or communications.
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Any notice or communication to a Securityholder shall be mailed by first-class mail to his
address shown on the register kept by the Registrar and, if any Bearer Securities are outstanding,
published in an Authorized Newspaper. Failure to mail a notice or communication to a
Securityholder of any Series or any defect in it shall not affect its sufficiency with respect to
other Securityholders of that or any other Series.
If a notice or communication is mailed in the manner provided above, within the time
prescribed, it is duly given, whether or not the Securityholder receives it. If a notice or
communication is delivered in person, by courier, telegraphed, telexed or by facsimile transmission
(with confirmation of receipt) within the time prescribed, it is duly given.
If the Company mails a notice or communication to Securityholders, it shall mail a copy to the
Trustee and each Agent at the same time.
Section 10.3. Communication by Holders with other Holders. Securityholders of any Series may
communicate pursuant to TIA Section 312(b) with other Securityholders of that Series or any other
Series with respect to their rights under this Indenture or the Securities of that Series or all
Series. The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA
Section 312(c).
Section 10.4. Certificate and Opinion as to Conditions Precedent. Upon any request or
application by the Company to the Trustee to take any action under this Indenture, the Company
shall furnish to the Trustee:
(a) an Officers Certificate stating that, in the opinion of the signers, all conditions
precedent, if any, provided for in this Indenture relating to the proposed action have been
complied with; and
(b) an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions
precedent have been complied with.
Section 10.5. Statements Required in Certificate or Opinion. Each certificate or opinion with
respect to compliance with a condition or covenant provided for in this Indenture (other than a
certificate provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of TIA
Section 314(e) and shall include:
(a) a statement that the person making such certificate or opinion has read such covenant or
condition;
(b) a brief statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are based;
(c) a statement that, in the opinion of such person, he has made such examination or
investigation as is necessary to enable him to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(d) a statement as to whether or not, in the opinion of such person, such condition or
covenant has been complied with.
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Section 10.6. Rules by Trustee and Agents. The Trustee may make reasonable rules for action
by or a meeting of Securityholders of one or more Series. Any Agent may make reasonable rules and
set reasonable requirements for its functions.
Section 10.7. Legal Holidays. Unless otherwise provided by Board Resolution, Officers
Certificate or supplemental indenture for a particular Series, a Legal Holiday is any day that is
not a Business Day. If a payment date is a Legal Holiday at a place of payment, payment may be
made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period.
Section 10.8. No Recourse Against Others. A director, officer, employee or stockholder, as
such, of the Company shall not have any liability for any obligations of the Company under the
Securities or the Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Securityholder by accepting a Security waives and releases all
such liability. The waiver and release are part of the consideration for the issue of the
Securities.
Section 10.9. Counterparts. This Indenture may be executed in any number of counterparts and
by the parties hereto in separate counterparts, each of which when so executed shall be deemed to
be an original and all of which taken together shall constitute one and the same agreement.
Section 10.10. Governing Laws. THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE,
WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF.
Section 10.11. No Adverse Interpretation of Other Agreements. This Indenture may not be used
to interpret another indenture, loan or debt agreement of the Company or a Subsidiary. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
Section 10.12. Successors. All agreements of the Company in this Indenture and the Securities
shall bind its successor. All agreements of the Trustee in this Indenture shall bind its
successor.
Section 10.13. Severability. In case any provision in this Indenture or in the Securities
shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
Section 10.14. Table of Contents, Headings, Etc. The Table of Contents, Cross Reference
Table, and headings of the Articles and Sections of this Indenture have been inserted for
convenience of reference only, are not to be considered a part hereof, and shall in no way modify
or restrict any of the terms or provisions hereof.
Section 10.15. Securities in a Foreign Currency or in ECU. Unless otherwise specified in a
Board Resolution, a supplemental indenture hereto or an Officers Certificate delivered pursuant to
Section 2.2 of this Indenture with respect to a particular Series of Securities, whenever for
purposes of this Indenture any action may be taken by the Holders of a specified percentage in
aggregate principal amount of Securities of all Series or all Series affected by a particular
action at the time outstanding and, at such time, there are outstanding Securities of any Series
which are denominated
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in a coin or currency other than Dollars (including ECUs), then the principal
amount of Securities of such Series which shall be deemed to be outstanding for the purpose of
taking such action shall be that amount of Dollars that could be obtained for such amount at the
Market Exchange Rate at such time. For purposes of this Section 10.15, Market Exchange Rate
shall mean the noon Dollar buying rate in New York City for cable transfers of that currency as
published by the Federal Reserve Bank of New York; provided, however, in the case of ECUs, Market
Exchange Rate shall mean the rate of exchange determined by the Commission of the European Union
(or any successor thereto) as published in the Official Journal of the European Union (such
publication or any successor publication, the Journal). If such Market Exchange Rate is not
available for any reason with respect to such currency, the Trustee shall use, in its sole
discretion and without liability on its part, such quotation of the Federal Reserve Bank of New
York or, in the case of ECUs, the rate of exchange as published in the Journal, as of the most
recent available date, or quotations or, in the case of ECUs, rates of exchange from one or more
major banks in The City of New York or in the country of issue of the currency in question or, in
the case of ECUs, in Luxembourg or such other quotations or, in the case of ECUs, rates of exchange
as the Trustee, upon consultation with the Company, shall deem appropriate. The provisions of this
paragraph shall apply in determining the equivalent principal amount in respect of Securities of a
Series denominated in currency other than Dollars in connection with any action taken by Holders of
Securities pursuant to the terms of this Indenture.
All decisions and determinations of the Trustee regarding the Market Exchange Rate or any
alternative determination provided for in the preceding paragraph shall be in its sole discretion
and shall, in the absence of manifest error, be conclusive to the extent permitted by law for all
purposes and irrevocably binding upon the Company and all Holders.
Section 10.16. Judgment Currency. The Company agrees, to the fullest extent that it may
effectively do so under applicable law, that (a) if for the purpose of obtaining judgment in any
court it is necessary to convert the sum due in respect of the principal of or interest or other
amount on the Securities of any Series (the Required Currency) into a currency in which a
judgment will be rendered (the Judgment Currency), the rate of exchange used shall be the rate at
which in accordance with normal banking procedures the Trustee could purchase in The City of New
York the Required Currency with the Judgment Currency on the day on which final unappealable
judgment is entered, unless such day is not a New York Banking Day, then, the rate of exchange used
shall be the rate at which in accordance with normal banking procedures the Trustee could purchase
in The City of New York the Required Currency with the Judgment Currency on the New York Banking
Day preceding the day on which final unappealable judgment is entered and (b) its obligations under
this Indenture to make payments in the Required Currency (i) shall not be discharged or satisfied
by any tender, any recovery pursuant to any judgment (whether or not entered in accordance with
subsection
(a)), in any currency other than the Required Currency, except to the extent that such tender
or recovery shall result in the actual receipt, by the payee, of the full amount of the Required
Currency expressed to be payable in respect of such payments, (ii) shall be enforceable as an
alternative or additional cause of action for the purpose of recovering in the Required Currency
the amount, if any, by which such actual receipt shall fall short of the full amount of the
Required Currency so expressed to be payable, and (iii) shall not be affected by judgment being
obtained for any other sum due under this Indenture. For purposes of the foregoing, New York
Banking Day means any day except a Saturday, Sunday or a legal holiday in The City of New York on
which banking institutions are authorized or required by law, regulation or executive order to
close.
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ARTICLE XI
SINKING FUNDS
Section 11.1. Applicability of Article. The provisions of this Article shall be applicable to
any sinking fund for the retirement of the Securities of a Series, except as otherwise permitted or
required by any form of Security of such Series issued pursuant to this Indenture.
The minimum amount of any sinking fund payment provided for by the terms of the Securities of
any Series is herein referred to as a mandatory sinking fund payment and any other amount
provided for by the terms of Securities of such Series is herein referred to as an optional
sinking fund payment. If provided for by the terms of Securities of any Series, the cash amount
of any sinking fund payment may be subject to reduction as provided in Section 11.2. Each sinking
fund payment shall be applied to the redemption of Securities of any Series as provided for by the
terms of the Securities of such Series.
Section 11.2. Satisfaction of Sinking Fund Payments with Securities. The Company may, in
satisfaction of all or any part of any sinking fund payment with respect to the Securities of any
Series to be made pursuant to the terms of such Securities (1) deliver outstanding Securities of
such Series to which such sinking fund payment is applicable (other than any of such Securities
previously called for mandatory sinking fund redemption) and (2) apply as credit Securities of such
Series to which such sinking fund payment is applicable and which have been redeemed either at the
election of the Company pursuant to the terms of such Series of Securities (except pursuant to any
mandatory sinking fund) or through the application of permitted optional sinking fund payments or
other optional redemptions pursuant to the terms of such Securities, provided that such Securities
have not been previously so credited. Such Securities shall be received by the Trustee, together
with an Officers Certificate with respect thereto, not later than 15 days prior to the date on
which the Trustee begins the process of selecting Securities for redemption, and shall be credited
for such purpose by the Trustee at the price specified in such Securities for redemption through
operation of the sinking fund and the amount of such sinking fund payment shall be reduced
accordingly. If as a result of the delivery or credit of Securities in lieu of cash payments
pursuant to this Section 11.2, the principal amount of Securities of such Series to be redeemed in
order to exhaust the aforesaid cash payment shall be less than $100,000, the Trustee need not call
Securities of such Series for redemption, except upon receipt of a Company Order that such action
be taken, and such cash payment shall be held by the Trustee or a Paying Agent and applied to the
next succeeding sinking fund payment, provided, however, that the Trustee or such Paying Agent
shall from time to time upon receipt of a Company Order pay over and deliver to the Company any
cash payment so being held by the Trustee or such Paying Agent upon delivery by the Company to the
Trustee of Securities of that Series purchased by the Company having an unpaid principal amount
equal to the cash payment required to be released to the Company.
Section 11.3. Redemption of Securities for Sinking Fund. Not less than 45 days (unless
otherwise indicated in the Board Resolution, supplemental indenture hereto or Officers Certificate
in respect of a particular Series of Securities) prior to each sinking fund payment date for any
Series of Securities, the Company will deliver to the Trustee an Officers Certificate specifying
the amount of the next ensuing mandatory sinking fund payment for that Series pursuant to the terms
of that Series, the portion thereof, if any, which is to be satisfied by payment of cash and the
portion thereof, if any, which is to be satisfied by delivering and crediting of Securities of that
Series pursuant to Section 11.2, and the optional amount, if any, to be added in cash to the next
ensuing mandatory sinking fund payment, and the Company shall thereupon be obligated to pay the
amount therein
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specified. Not less than 30 days (unless otherwise indicated in the Board
Resolution, Officers Certificate or supplemental indenture in respect of a particular Series of
Securities) before each such sinking fund payment date the Trustee shall select the Securities to
be redeemed upon such sinking fund payment date in the manner specified in Section 3.2 and cause
notice of the redemption thereof to be given in the name of and at the expense of the Company in
the manner provided in Section 3.3. Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in Sections 3.4, 3.5 and 3.6.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of
the day and year first above written.
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QUESTCOR PHARMACEUTICALS, INC. |
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By: |
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Name: |
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39
exv5w1
Exhibit 5.1
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Stradling Yocca Carlson & Rauth |
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A PROFESSIONAL CORPORATION
ATTORNEYS AT LAW
660 NEWPORT CENTER DRIVE, SUITE 1600
NEWPORT BEACH, CA 92660-6422
TELEPHONE (949) 725-4000
FACSIMILE (949) 725-4100
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SAN FRANCISCO OFFICE
44 MONTGOMERY STREET, SUITE 4200
SAN FRANCISCO, CALIFORNIA 94104
TELEPHONE (415) 283-2240
FACSIMILE (415) 283-2255 |
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SANTA BARBARA OFFICE
302 OLIVE STREET
SANTA BARBARA, CALIFORNIA 93101
TELEPHONE (805) 564-0065
FACSIMILE (805) 564-1044 |
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SANTA MONICA OFFICE
233 WILSHIRE BOULEVARD, SUITE 830
SANTA MONICA, CALIFORNIA 90401
TELEPHONE (310) 437-2797
FACSIMILE (310) 451-6240 |
June 8, 2006
Questcor Pharmaceuticals, Inc.
3260 Whipple Road
Union City, CA 94587
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Re:
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Questcor Pharmaceuticals, Inc., Registration Statement on Form S-3;
$25,000,000 Aggregate Offering Price of Securities |
Dear Ladies and Gentlemen:
In connection with the registration statement on Form S-3 (the Registration
Statement) to be filed by Questcor Pharmaceuticals, Inc., a California corporation (the
Company), with the Securities and Exchange
Commission (the Commission) on June 8, 2006 under the Securities Act of 1933, as amended (the Securities Act), and Rule
462(b) promulgated thereunder, you have requested our opinion with respect to the matters set forth
below.
You have provided us with a draft of the Registration Statement in the form in which it will
be filed, which includes the prospectus (the Prospectus). The Prospectus provides that
it will be supplemented in the future by one or more supplements to the Prospectus (each, a
Prospectus Supplement). The Prospectus as supplemented by various Prospectus
Supplements will provide for the registration by the Company of up to $25,000,000 aggregate
offering price of (i) shares of common stock (the Common Stock), (ii) one or more series
of secured or unsecured debt securities, which may be either senior, senior subordinated or
subordinated debt securities (the Debt Securities), and (iii) warrants to purchase Common
Stock or Debt Securities (the Warrants), or any combination of the foregoing
(collectively, the Securities). Any Debt Securities may be exchangeable and/or
convertible into shares of Common Stock or into other securities. The Debt Securities may be
issued pursuant to an indenture between the Company and a financial institution to be identified
therein as trustee (the Trustee) in the form included as Exhibit 4.1 to the Registration
Statement, as such indenture may be supplemented from time to time (the Indenture). The
Warrants may be issued under one or more warrant agreements (each, a Warrant Agreement)
between the Company and a bank or trust company to be identified therein as warrant agent (each, a
Warrant Agent).
Questcor Pharmaceuticals, Inc.
June 8, 2006
Page Two
In our capacity as your counsel in connection with such registration, we are familiar with the
proceedings taken and proposed to be taken by the Company in connection with the authorization of
the Indenture and the authorization, issuance and sale of the Securities. For the purposes of this
opinion, we have assumed that such proceedings to be taken in the future will be timely completed
in the manner presently proposed and that the terms of each issuance will otherwise be in
compliance with law. In addition, we have examined such matters of fact and questions of law as we
have considered appropriate for purposes of this letter.
We are opining herein as to the effect on the subject transaction only of the General
Corporation Law of the State of California, and with respect to the opinions set forth in
paragraphs 2 through 4 below, the internal laws of the State of New York, and we express no opinion
with respect to the applicability thereto, or the effect thereon, of the laws of any other
jurisdiction or, in the case of California, any other laws, or as to any matters of municipal law
or the laws of any local agencies within any state.
Subject to the foregoing and the other matters set forth herein, it is our opinion that as of
the date hereof:
1. When the Registration Statement and any required post-effective amendments thereto have all
become effective under the Securities Act and any and all Prospectus Supplement(s) required by
applicable laws have been delivered and filed as required by such laws, and upon adoption by the
Board of Directors of the Company of a resolution in form and content as required by applicable law
authorizing the issuance of such shares and upon issuance and delivery of and payment of legal
consideration for shares of Common Stock in the manner contemplated by the Registration Statement,
the Prospectus and the related Prospectus Supplement(s) and by such resolution, and assuming that
(i) the terms of such shares as issued and delivered are as described in the Registration
Statement, the Prospectus and the related Prospectus Supplement(s) and such
resolution, (ii) at the time of issuance of such shares, the Company has a sufficient number
of authorized but unissued shares under the Companys Amended and Restated Articles of
Incorporation, as amended (the Articles of Incorporation), (iii) such shares as issued
and delivered comply with all requirements and restrictions, if any, applicable to the Company,
whether imposed by any court or governmental or regulatory body having jurisdiction over the
Company or otherwise and (iv) such shares are then issued and sold as contemplated in the
Registration Statement, the Prospectus and the related Prospectus Supplement(s) and such
resolution, such shares of Common Stock (including any Common Stock duly issued upon the exercise
of any Warrants pursuant to the terms thereof that are exercisable for the purchase of Common Stock
or upon the exchange or conversion of Debt Securities that are exchangeable or convertible into
Common Stock) will be validly issued, fully paid and nonassessable.
2. When (i) the Indenture has been duly authorized, executed and delivered by the Company and
the Trustee, and (ii) the Debt Securities have been duly authorized and duly established in
accordance with the Indenture and applicable law (including, without limitation, by the adoption by
the Board of Directors of the Company of a resolution duly authorizing the issuance and delivery of
the Debt Securities) (the Debt Securities Authorization), duly authenticated by the
Questcor Pharmaceuticals, Inc.
June 8, 2006
Page Three
Trustee and duly executed and delivered on behalf of the Company against payment therefor in
accordance with the terms and provisions of the Indenture and as contemplated by the Registration
Statement, the Prospectus and the related Prospectus Supplement(s) and the Debt Securities
Authorization, and (iii) the Registration Statement and any required post-effective amendments
thereto have all become effective under the Securities Act and any and all Prospectus Supplement(s)
required by applicable laws have been delivered and filed as required by such laws, and assuming
that (a) the terms of the Debt Securities as executed and delivered are as described in the
Registration Statement, the Prospectus and the related Prospectus Supplement(s) and the Debt
Securities Authorization, (b) the Debt Securities as executed and delivered do not violate any law
applicable to the Company or result in a default under or breach of any agreement or instrument
binding upon the Company, (c) the Debt Securities as executed and delivered comply with all
requirements and restrictions, if any, applicable to the Company, whether imposed by any court or
governmental or regulatory body having jurisdiction over the Company or otherwise, and (d) the Debt
Securities are then issued and sold as contemplated in the Registration Statement, the Prospectus
and the related Prospectus Supplement(s) and the Debt Securities Authorization, the Debt Securities
(including any Debt Securities duly issued (i) upon the exchange or conversion of any Debt
Securities that are exchangeable or convertible into another series of Debt Securities or (ii) upon
the exercise of any Warrants pursuant to the terms thereof that are exercisable for the purchase of
Debt Securities) will constitute legally valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms.
3. When (i) the Registration Statement and any required post-effective amendments thereto have
all become effective under the Securities Act and any and all Prospectus Supplement(s) required by
applicable laws have been delivered and filed as required by such laws, (ii) the applicable Warrant
Agreement has been duly authorized, executed and delivered by the Company and the Warrant Agent,
(iii) the Warrants have been duly authorized and duly established in accordance with
the terms of the Warrant Agreement and applicable law (including, without limitation, by the
adoption by the Board of Directors of the Company of a resolution duly authorizing the issuance and
delivery of the Warrants) (the Warrant Authorization) and (iv) the Warrants have been
duly executed, authenticated and/or countersigned in accordance with the Warrant Agreement relating
to such Warrants and delivered on behalf of the Company against payment therefor as contemplated by
the Registration Statement, the Prospectus and the related Prospectus Supplement(s) and the Warrant
Authorization, and assuming that (a) the terms of the Warrants as executed and delivered are as
described in the Registration Statement, the Prospectus and the related Prospectus Supplement(s)
and the Warrant Authorization, (b) the Warrants as executed and delivered do not violate any law
applicable to the Company or result in a default under or breach of any agreement or instrument
binding upon the Company, (c) the Warrants as executed and delivered comply with all requirements
and restrictions, if any, applicable to the Company, whether imposed by any court or governmental
or regulatory body having jurisdiction over the Company or otherwise and (d) the Warrants are then
issued and sold as contemplated by the Registration Statement, the Prospectus and the related
Prospectus Supplement(s) and the Warrant Authorization, the Warrants will constitute legally valid
and binding obligations of the Company, enforceable against the Company in accordance with their
terms.
Questcor Pharmaceuticals, Inc.
June 8, 2006
Page Four
4. When (i) the Registration Statement and any required post-effective amendments thereto have
all become effective under the Securities Act and any and all Prospectus Supplement(s) required by
applicable laws have been delivered and filed as required by such laws, and (ii) the Indenture has
been duly authorized, executed and delivered by the Company and the Trustee, and (iii) assuming
that the Indenture does not violate any law applicable to the Company or result in a default under
or breach of any agreement or instrument binding upon the Company, and (iv) assuming that the
Indenture complies with all requirements and restrictions, if any, applicable to the Company,
whether imposed by any court or governmental or regulatory body having jurisdiction over the
Company or otherwise, the Indenture will constitute the legally valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms.
The opinions set forth in paragraphs 2, 3 and 4 relating to the enforceability of the Debt
Securities, the Warrants and the Indenture, respectively, are subject to the following exceptions,
limitations and qualifications: (i) the effect of bankruptcy, insolvency, reorganization,
preference, fraudulent transfer, moratorium or other similar laws relating to or affecting the
rights and remedies of creditors; and (ii) the effect of general principles of equity, whether
enforcement is considered in a proceeding in equity or at law (including the possible
unavailability of specific performance or injunctive relief), concepts of materiality,
reasonableness, good faith and fair dealing, and the discretion of the court before which any
proceeding therefor may be brought.
The opinions expressed herein as to Debt Securities do not include (i) any opinion with
respect to the creation, validity, perfection or priority of any security interest or lien, or (ii)
any opinion with respect to compliance with laws relating to permissible rates of interest.
We have not been requested to express and, with your consent, do not render any opinion as to
the applicability to the obligations of the Company under the Indenture or the Debt Securities of
Sections 547 and 548 of the United States Bankruptcy Code or applicable state law relating to
preferences and fraudulent transfers and obligations.
With your consent, we have assumed for purposes of this opinion that (i) each of the parties
to the Indenture and any Warrant Agreement (collectively the Operative Documents) other
than the Company (a) is duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization; (b) has the requisite power and authority to execute and deliver and
to perform its obligations under each of the Operative Documents to which it is a party; and (c)
has duly authorized, executed and delivered each such Operative Document; (ii) with respect to each
of the parties to the Operative Documents other than the Company, each Operative Document to which
it is a party constitutes its legally valid and binding agreement, enforceable against it in
accordance with its terms; (iii) the Trustee is in compliance, generally and with respect to acting
as Trustee under the Indenture, with all applicable laws and regulations; and (iv) the Warrant
Agent is in compliance, generally and with respect to acting as warrant agent under the Warrant
Agreement, with all applicable laws and regulations.
Questcor Pharmaceuticals, Inc.
June 8, 2006
Page Five
We consent to the use of this opinion as an exhibit to the Registration Statement and to the
use of our name under the caption Legal Matters in the Prospectus which is part of the
Registration Statement.
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Very truly yours,
/s/ Stradling Yocca Carlson & Rauth
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MHM:bsf
exv12w1
Exhibit 12.1
RATIO OF EARNINGS TO FIXED CHARGES
(in thousands, except ratio data)
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Quarter Ended |
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Fiscal Years Ended December 31, |
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March 31, 2006 |
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2005 |
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2004 |
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2003 |
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2002 |
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2001 |
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EARNINGS: |
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Net income
(loss) before
taxes |
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$ |
(3,037 |
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$ |
7,592 |
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$ |
(832 |
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$ |
(3,791 |
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$ |
(2,785 |
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$ |
(8,697 |
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Fixed charges |
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157 |
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1,045 |
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1,683 |
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1,658 |
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1,584 |
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1,282 |
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Total earnings (loss) |
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$ |
(2,880 |
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$ |
8,637 |
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$ |
851 |
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$ |
(2,133 |
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$ |
(1,201 |
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$ |
(7,415 |
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FIXED CHARGES: |
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Interest expense |
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$ |
0 |
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$ |
275 |
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$ |
420 |
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$ |
333 |
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315 |
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$ |
465 |
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Non-cash
amortization of
deemed debt
discount |
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0 |
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108 |
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522 |
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522 |
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415 |
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0 |
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Estimated
interest charges
within rental
expense |
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157 |
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662 |
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741 |
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803 |
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854 |
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817 |
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Total
fixed
charges |
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$ |
157 |
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$ |
1,045 |
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$ |
1,683 |
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$ |
1,658 |
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$ |
1,584 |
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$ |
1,282 |
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RATIO OF EARNINGS
TO FIXED CHARGES |
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N/A |
(1) |
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8.3 |
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N/A |
(2) |
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N/A |
(3) |
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N/A |
(4) |
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N/A |
(5) |
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1. |
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As a result of the net loss incurred in the quarter ended March 31, 2006, the Company was
unable to fully cover fixed charges. The amount of such deficiency was approximately $3.0
million for the quarter ended March 31, 2006. |
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2. |
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As a result of the net loss incurred in fiscal year 2004, the Company was unable to fully
cover fixed charges. The amount of such deficiency was approximately $0.8 million for fiscal
year 2004. |
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3. |
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As a result of the net loss incurred in fiscal year 2003, the Company was unable to fully
cover fixed charges. The amount of such deficiency was approximately $3.8 million for fiscal
year 2003. |
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4. |
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As a result of the net loss incurred in fiscal year 2002, the Company was unable to fully
cover fixed charges. The amount of such deficiency was approximately $2.8 million for fiscal
year 2002. |
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5. |
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As a result of the net loss incurred in fiscal year 2001, the Company was unable to fully
cover fixed charges. The amount of such deficiency was approximately $8.7 million for fiscal
year 2001. |
exv23w1
Exhibit 23.1
CONSENT
OF ODENBERG, ULLAKKO, MURANISHI & CO. LLP
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in the Registration Statement on Form S-3 of
Questcor Pharmaceuticals, Inc. to be filed on or about June 8,
2006 of our report dated February 27, 2006, relating to the consolidated financial statements of Questcor Pharmaceuticals, Inc.,
included in the Annual Report on Form 10-K for the year ended December 31, 2005, filed with the
Securities and Exchange Commission. We also consent to the incorporation by reference of our report
dated February 27, 2006, relating to the financial statement schedule for year ended December 31,
2005, which appears in such Annual Report on Form 10-K.
/s/
Odenberg, Ullakko, Muranishi & Co. LLP
San Francisco, California
June 8, 2006
exv23w2
Exhibit 23.2
CONSENT OF ERNST & YOUNG LLP,
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the reference to our firm under the caption Experts in the Registration
Statement (Form S-3) and related Prospectus of Questcor Pharmaceuticals, Inc. for the registration
of up to $25,000,000 of its common stock, debt securities and warrants, and to the incorporation by
reference of our report dated February 18, 2005 (except for Note 17 as to which the date is March
29, 2005, and which is not presented therein), with respect to the 2004 and 2003 consolidated
financial statements and schedule of Questcor Pharmaceuticals, Inc. included in its Annual Report
(Form 10-K) for the year ended December 31, 2005, filed with the Securities and Exchange
Commission.
/s/ Ernst & Young LLP
Palo Alto, California
June 8, 2006