Exhibit 10.46

QUESTCOR PHARMACEUTICALS, INC.

SERIES B PREFERRED SHAREHOLDER AGREEMENT AND WAIVER

     This Series B Preferred Shareholder Agreement and Waiver (this “Agreement”)
is executed as of March 29, 2005 by Questcor Pharmaceuticals, Inc., a California
corporation (the “Company”), and the undersigned shareholders of the Company,
being all of the holders of the outstanding shares of Series B Preferred Stock
of the Company. Capitalized terms used and not defined herein shall have the
meanings set forth in that certain Certificate of Determination of Series B
Convertible Preferred Stock of the Company (the “Series B Certificate of
Determination”).

     The Company and the undersigned agree to the following:

     1. For the period up to, but not including, March 31, 2006, each of the
holders of the Series B Preferred Stock waives all rights under the Series B
Certificate of Determination arising out of any Additional Dividend Event
pursuant to clause (9) or clause (10) of the definition of Additional Dividend
Event.

     2. Each holder of Series B Preferred Stock agrees that, with respect to
dividends payable on April 1, 2005, July 1, 2005, October 1, 2005 and January 1,
2006, it shall accept as full and complete payment of all such dividend payments
the issuance by the Company to them in a private placement of shares of the
Company’s common stock having an aggregate value equal to the dividends
otherwise payable on those dates. The Company shall issue such shares to the
holders within three business days of the date hereof. The shares of common
stock so issued shall be valued at fair market value based upon a ten-day
weighted average trading price formula through the date hereof.

     3. The expiration date of the Warrants to purchase common stock held by the
undersigned holders of, and acquired in connection with the issuance of, the
Series B Preferred Stock shall be extended for one year, until January 15, 2008.

     4. Each of the undersigned shareholders hereby represents and warrants to
the Company that (i) it has not sold, transferred or otherwise conveyed any
shares of Series B Preferred Stock through the date hereof and (ii) the
representations and warranties contained in Section 3 of their respective
Subscription Agreement continue to be accurate and correct as of the date hereof
and shall apply in full force and effect as though made with respect to the
shares of Company common stock referenced in Section 2 above. Each of the
undersigned shareholders hereby agrees that it may transfer its shares of
Series B Preferred Stock only if it transfers such shares to a transferee that
agrees in writing to be bound by the terms of this Agreement.

     5. Except as expressly set forth herein, the agreements and waivers
contained in this Agreement shall not by implication or otherwise limit, impair,
constitute a waiver of or otherwise affect the rights and remedies of the
holders of the Series B Preferred Stock, and shall not alter, modify, amend or
in any way affect any of the terms, conditions, obligations, covenants

 

--------------------------------------------------------------------------------

 

or agreements contained in the Series B Certificate of Determination, the
Subscription Agreements and the Warrants, all of which shall continue in full
force and effect.

     6. The agreements and waivers contained in this Agreement shall become
effective upon the occurrence of all of the following: the execution of this
Agreement by the Company and all of the holders of record of outstanding shares
of Series B Preferred Stock and the delivery by the Company of copies of this
Agreement as so executed to each of the undersigned shareholders.

     7. This Agreement may be executed in one or more counterparts, each of
which shall for all purposes be deemed to be an original and all of which shall
constitute the same instrument.

[Signatures Follow]

-2-

--------------------------------------------------------------------------------

 

     IN WITNESS THEREOF, the Company and the undersigned shareholders have
executed this Series B Preferred Shareholder Agreement and Waiver as of the date
set forth above.

              QUESTCOR PHARMACEUTICALS, INC.
 
       

  By:   /s/ JAMES L. FARES

       

      Name: James L. Fares
Its: President and Chief Executive Officer
 
            SHAREHOLDERS:
 
            DELTA OPPORTUNITY FUND, LTD.
 
       

      By: Diaz & Altschul Advisors, LLC, as
Investment Advisor
 
       

      By: /s/ ARTHUR G. ALTSCHUL, JR.

       

      Name: Arthur G. Altschul, Jr.
Title: Managing Member
 
            DELTA OPPORTUNITY FUND
    (INSTITUTIONAL), LLC
 
       

      By: Diaz & Altschul Management, LLC, its
Managing Member
 
       

      By: /s/ ARTHUR G. ALTSCHUL, JR.

       

      Name: Arthur G. Altschul, Jr.
Title: Managing Member
 
            CORPORATE OPPORTUNITIES FUND, L.P.
 
       

      By: SMM Corporate Management, LLC, its
General Partner
 
       

      By: /s/ JAMES C. GALE

       

      Name: James C. Gale
Title: Chief Investment Dealer

 

--------------------------------------------------------------------------------

 

              CORPORATE OPPORTUNITIES FUND
    (INSTITUTIONAL), L.P.
 
       

      By: SMM Corporate Management, LLC, its
General Partner
 
       

      By: /s/ JAMES C. GALE

       

      Name: James C. Gale
Title: Chief Investment Dealer
 
            MONTREUX EQUITY PARTNERS II SBIC, L.P.
 
       

      By: Montreux Equity Management II SBIC,
L.P., its General Partner
 
       

      By: /s/ DANIEL K. TURNER, III

       

      Name: Daniel K. Turner, III
Title: Managing Member