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                                                                   Exhibit 10.26

                                                           [QUESTCOR LETTERHEAD]


                                                                November 7, 2001


Questcor Pharmaceuticals, Inc.
3260 Whipple Road
Union City, CA 94587


Dear Tim:


     This letter amends the terms of the offer letter agreement between
Questcor Pharmaceuticals, Inc. ("Questcor") and you and provides you with
certain benefits in the event of a "Change in Control" (as defined below),
subject to the terms and conditions set forth herein.

     In the event that a Change in Control occurs, and you are employed by
Questcor or one of its direct or indirect, majority-owned subsidiaries, as
determined from time to time (collectively, the "Company"), as a full time
employee of the Company at any time during the period commencing 90 days prior
to the Change in Control and ending on the Change in Control, all of your stock
options under any plan of the Company that are then outstanding shall become
vested and exercisable immediately prior to the Change in Control.

     Also, in the event that a Change in Control occurs, and your employment
with the Company is terminated as a result of Involuntary Termination (as
defined below) other than for Cause (as defined below), at any time within the
fifteen month period commencing 90 days prior to such Change in Control, and
you are a full-time employee of the Company at any time within the 30 days
prior to the termination of your employment with the Company, then you will be
entitled to receive from Questcor a severance benefit, payable in cash in a
lump sum payment, an amount equal to the sum of: (i) nine months of base salary,
and (ii) your pro-rated maximum bonus opportunity for the fiscal year of the
Company in which the termination of your employment occurs. For purposes of
determining your severance benefit, your monthly rate of base salary will equal
your greatest monthly rate of base salary in effect during the 30 days prior to
the date of the termination of your employment (or, if greater, your monthly
rate of base salary in effect immediately prior to the Change in Control), and
your pro-rated maximum bonus opportunity will equal your maximum bonus
opportunity under the Company's bonus and incentive compensation plans,
multiplied by a fraction, the numerator of which is the number of days during
such fiscal year that have elapsed on the date of the termination of your
employment, and the denominator of which is the number of days in such fiscal
year. For purposes of this letter amendment, you will be treated as a full-time
employee of the Company if you are regularly scheduled to work for the Company
for not less than 40 hours per week.

     In the event you are entitled to a severance benefit under this letter
amendment, then in addition to such severance benefit, you will receive such
health insurance benefits coverage as is provided to you (and your dependents,
if applicable) immediately prior to the termination of your employment with the
Company, for nine months following the termination
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of your employment, or until you become covered under another employer's group
health insurance plan, whichever occurs first. Such benefits coverage will be
under such terms and conditions (including benefits, premiums, deductibles and
co-payments) as are at least as favorable as those in effect immediately prior
to the date of termination of your employment (or, if more favorable, those in
effect immediately prior to the Change in Control).

            For purposes of this letter amendment, "Cause" means: (i) a
material and willful violation of any federal or state law by you, (ii) the
commission of a fraud by you against the Company, (iii) your repeated
unexplained or unjustified absence from the Company, or (iv) your gross
negligence or willful misconduct where such gross negligence or willful
misconduct has resulted or is likely to result in substantial and material
damage to the Company.

            Also, for purposes of this letter amendment, a "Change in Control"
will occur upon any of the following events: (i) upon the acquisition (other
than from Questcor) by any person, entity or "group," within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
from time to time (the "Exchange Act") (excluding, for this purpose, Questcor
or its affiliates, or any employee benefit plan of Questcor or its affiliates
which acquires beneficial ownership of voting securities of Questcor), of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of fifty percent (50%) or more of either the then outstanding
shares of common stock, no par value, of Questcor or the combined voting power
of Questcor's then outstanding voting securities entitled to vote generally in
the election of directors; (ii) at the time individuals who, as of the date
hereof, constitute the Board of Directors (the "Board") of Questcor (the
"Incumbent Board") cease for any reason to constitute at least a majority of
the Board, provided that any person becoming a director subsequent to the date
hereof, whose election, or nomination for election by Questcor's stockholders,
was approved by a vote of at least a majority of the directors then comprising
the Incumbent Board (other than an election or nomination of an individual
whose initial assumption of office is in connection with an actual or
threatened election contest relating to the election of the directors of
Questcor, as such terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) shall be, for purposes of this letter amendment,
considered as though such person were a member of the Incumbent Board; (iii)
immediately prior to the consummation by Questcor of a reorganization, merger,
consolidation, (in each case, with respect to which persons who were the
stockholders of Questcor immediately prior to such reorganization, merger or
consolidation do not, immediately thereafter, own more than fifty percent (50%)
of the combined voting power entitled to vote generally in the election of
directors of the reorganized, merged, or consolidated company's then
outstanding voting securities) or a liquidation or dissolution of Questcor or
the sale of all or substantially all of the assets of Questcor; or (iv) the
occurrence of any other event which the Incumbent Board in its sole discretion
determines constitutes a Change of Control.

            Finally, for purposes of this letter amendment, "Involuntary
Termination" means the termination of your employment with the Company either:
(i) by the Company, or (ii) by you upon 30 days' prior written notice to the
Company as a result of any of the following, without your written consent: (A)
a material reduction in job responsibilities inconsistent with your position
with the Company and your prior responsibilities, (B) a reduction in your
annual base compensation or bonus opportunity from the Company, (C) a
requirement that you perform
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services at a principal location that is more than 50 miles from the principal
location at which you perform services for the Company, (D) a material reduction
in your benefits from the Company, or (E) a reduction of your regularly
scheduled work hours for the Company to less than 40 hours per week. The
principal location at which you perform services for the Company on the date of
this letter amendment is the Company's principal offices at 26118 Research Road,
Hayward, California 94545.

     Notwithstanding the foregoing, in the event that the Company sells,
transfers or otherwise disposes of all or substantially all of the assets or
business related to any business unit, division, department or operational unit
of the Company, and you are offered employment with the purchaser or other
acquiror of such assets or business, or accept employment with such purchaser
or acquiror, within 30 days following the termination of your employment with
the Company, you will thereupon cease to be eligible for severance benefits and
health insurance benefits coverage under this letter amendment, unless you
reject such offer of employment, and the terms and conditions of employment
offered by the purchaser or other acquiror would result in any of the
following: (i) a material reduction in job responsibilities inconsistent with
your position with the Company and your prior responsibilities, (ii) a
reduction in your annual base compensation or bonus opportunity from the
Company, (iii) a requirement that you perform services at a principal location
that is more than 50 miles from the principal location at which you perform
services for the Company, (iv) a material reduction in your benefits, or (v) a
reduction of your regularly scheduled work hours to less than 40 hours per
week. For purposes of this paragraph, a material reduction in your benefits
will occur unless the terms and conditions of employment offered by the
purchaser or acquiror would provide for severance benefits to you that are
equal to or greater than the benefits to be provided under the terms of this
letter amendment.

     As a condition to receiving your severance benefit under this letter
amendment, you will waive any and all claims against the Company and its
affiliates. Such waiver will be a general release of claims, and will be
substantially in the form of the general release attached as Exhibit A hereto
(or in such other form of general release as Questcor will, in its sole
discretion, determine). The general release will be executed and delivered by
you prior to receiving your severance benefit, and your severance benefit will
be paid 10 days after you execute and deliver the general release, unless you
have revoked the general release.
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          Except as provided in this letter amendment, the offer letter
agreement will remain in full force and effect. Please indicate your
acceptance of this letter amendment by returning a signed copy of this
letter amendment.

                                    Sincerely,


                                    /s/ Charles J. Casamento
                                    ----------------------------
                                    Charles J. Casamento
                                    Chairman, President and CEO
                                    Questcor Pharmaceuticals, Inc.

                                    Date:     Nov. 7, 2001
                                         --------------------------

Accepted by,

/s/ Timothy E. Morris
---------------------------
Date:   Nov. 7, 2001
      ---------------------
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                                                                     EXHIBIT "A"


FORM OF GENERAL RELEASE

     1.     General Release by Employee. In consideration for certain severance
benefits from Questcor Pharmaceuticals, Inc. ("Questcor") under the offer letter
amendment (the "Letter Amendment") between Questcor and Timothy E. Morris
("Employee") and other valuable consideration, the receipt and adequacy of which
are hereby acknowledged, Employee does hereby release and forever discharge the
"Company Releases" herein, consisting of Questcor and each of Questcor's
parents, subsidiaries, and affiliates, associates, members, owners,
stockholders, predecessors, successors, heirs, assigns, employees, agents,
directors, officers, partners, representatives, lawyers, and all persons acting
by, through, under, or in concert with them, or any of them, of and from any and
all manner of action or actions, causes or causes of action, in law or in
equity, suits, debts, liens, contracts, agreements, promises, liabilities,
claims, demands, damages, losses, costs or expenses, of any nature whatsoever,
known or unknown, fixed or contingent (hereinafter called "Claims"), which they
now have or may hereafter have against the Releasees by reason of any and all
acts, omissions, events or facts occurring or existing prior to the date hereof,
except as expressly provided herein. The Claims released hereunder include,
without limitation, any alleged breach of any employment agreement; any alleged
breach of any covenant of good faith and fair dealing, express or implied; any
alleged torts or other alleged legal restrictions relating to the Employee's
employment and the termination thereof; and any alleged violation of any
federal, state or local statute or ordinance including, without limitation,
Title VII of the Civil Rights Act of 1964, as amended, the Federal Age
Discrimination in Employment Act of 1967, as amended, and the California Fair
Employment and Housing Act. This Release shall also no apply to Employee's right
to retirement and/or employee welfare benefits that have vested and accrued
prior to his separation from employment with Questcor and its parents,
subsidiaries and affiliates; or Employee's rights to indemnification under
Section 2802 of the California Labor Code.

     2.   RELEASE OF UNKNOWN CLAIMS. EMPLOYEE ACKNOWLEDGES THAT HE OR SHE IS
FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH
PROVIDES AS FOLLOWS:

     "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
     KNOW OR SUSPECT TO EXIST IN HER FAVOR AT THE TIME OF EXECUTING THE RELEASE,
     WHICH, IF KNOWN BY HER MUST HAVE MATERIALLY AFFECTED HER SETTLEMENT WITH
     THE DEBTOR."

EMPLOYEE BEING AWARE OF SAID CODE SECTION, HEREBY EXPRESSLY WAIVES ANY RIGHTS HE
OR SHE MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON LAW
PRINCIPLES OF SIMILAR EFFECT.

     3.   Release of Age Discrimination Claims and Rights under the Older
Workers' Benefit Protection Act. Employee agrees and expressly acknowledges that
this Agreement

                                      A-1

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includes a waiver and release of all claims which Employee has or may have under
the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. Section
621, et seq. ("ADEA"). The following terms and conditions apply to and are part
of the waiver and release of the ADEA claims under this Agreement:

          (a)  That this paragraph, this General Release and the Letter
      Amendment are written in a manner calculated to be understood by
      Employee.

          (b)  The waiver and release of claims under the ADEA contained in this
      General Release do not cover rights or claims that may arise after the
      date on which Employee signs this General Release.

          (c)  The Letter Amendment provides for consideration in addition to
      anything of value to which Employee is already entitled.

          (d)  Employee is advised to consult an attorney before signing this
      General Release.

          (e)  Employee is granted twenty-one (21) days (or forty-five (45)
      days, if this General Release is in connection with an exit incentive or
      other employment termination program) after Employee is presented with
      this General Release to decide whether or not to sign this General
      Release. If Employee executes this General Release prior to the expiration
      of such period, Employee does so voluntarily and after having had the
      opportunity to consult with an attorney.

          (f)  If this General Release is in connection with an exit incentive
      or other termination program, Employee has received the information
      required to be disclosed under Section 7(f)(1)(H) of ADEA and the
      regulations thereunder.

          (g)  Employee will have the right to revoke the waiver and release of
      claims under the ADEA within seven (7) days of signing this General
      Release. In the event this General Release is revoked, the General Release
      executed concurrently herewith will be null and void in their entirety.

      4.  Manner and Consequences of Revocation of Release

          (a)  Manner of Revocation. In the event that Employee elects to revoke
      this General Release, he or she shall deliver within the time period
      prescribed above to the Chairperson of the Company's Board of Directors, a
      writing stating that he or she is revoking this General Release and
      subscribed by the Employee.

          (b)  Consequences of Revocation. In the event that Employee should
      elect to revoke this General Release as described in the paragraph above,
      this General Release shall be null and void in its entirety.



                                      A-2
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     5.   No Claims. Employee represents and warrants to the Releasees that
there has been no assignment or other transfer of any interest in any Claim
which Employee may have against the Releasees, or any of them. Employee agrees
to indemnify and hold harmless the Releasees released by him or her from any
liability, claims, demands, damages, costs, expenses and attorneys' fees
incurred as a result of any person asserting such assignment or transfer of any
right or claims under any such assignment or transfer from Employee.

     6.   Indemnification. Employee agrees that if he or she hereafter
commence, join in, or in any manner seek relief through any suit arising out of,
based upon, or relating to any of the Claims released hereunder or in any manner
asserts against the Releasees any of the Claims released hereunder, then
Employee will pay to the Releasees against whom such claim(s) is asserted, in
addition to any other damages caused thereby, all attorneys' fees incurred by
such Releasees in defending or otherwise responding to said suit or Claim.

          The Parties further understand and agree that neither the payment of
money nor the execution of this Release shall constitute or be construed as an
admission of any liability whatsoever by the Releasees.

                                        QUESTCOR PHARMACEUTICALS, INC.

                                        By: /s/ Charles J. Casamento
                                           -------------------------------------
                                           Title:
                                                 -------------------------------
                                        Date: Nov. 7, 2001
                                             -----------------------------------

                                        "EMPLOYEE"

                                        By: /s/ Timothy E. Morris
                                           -------------------------------------
                                                      Print Name

                                            /s/ Timothy E. Morris
                                           -------------------------------------
                                                      Signature

                                        Date: Nov. 7, 2001
                                             -----------------------------------

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