EXHIBIT10.43[QUESTCOR LETTERHEAD]May 4, 2005Craig Chambliss3260 Whipple RoadUnion City, California 94587**RE:****Severance Agreement**Dear Craig:In addition to the terms and conditions of your employment with Questcor Pharmaceuticals, Inc. (the“Company”) which are set forth in your Offer Letter dated March 31, 2005, and Change-in-ControlAgreement dated May 1, 2005, which are incorporated herein, the Company agrees to provide youseverance in the event that the following conditions are met.In the event (1) your employment is terminated by the Company other than (a) for Cause (as definedbelow) or (b) as a result of your permanent and total disability within the meaning of Section422(c)(6) of the Internal Revenue Service Code of 1986, as amended (the “Code”), or (c) you resignyour employment upon 30 days’ prior written notice to the Company for Good Reason (as definedbelow), during your first three years of employment, you will receive severance compensationtotaling Six (6) months of base salary. In the event (2) your employment is terminated by theCompany other than (a) for Cause (as defined below) or (b) as a result of your disability withinthe meaning of Section 422(c)(6) of the Code, or (c) you resign your employment upon 30 days’prior written notice to the Company for Good Reason (as defined below), after your first threeyears of employment, you will receive severance compensation totaling Twelve (12) months of basesalary.As a condition precedent to receiving severance compensation, you will be required to execute ageneral release (in a form prepared by counsel for the Company) of claims against the Company andits officers, directors, agents and shareholders. Such general release will not include rights tovested options or claims for any compensation earned (including, without limitation, accruedvacation), or reimbursement of expenses incurred, through the date of termination. Severancecompensation will be paid in accordance with normal payroll procedures. If you are reemployed atany time during the severance period, all further severance compensation payments shall immediatelycease.
 

 
“Cause” will mean termination of your employment for any one or more of the following: (a) habitualor material neglect of your assigned duties (other than by reason of disability) or intentionalrefusal to perform your assigned duties (other than by reason of disability) which continuesuncured for 30 days following receipt of written notice of such deficiency or “Cause” event fromthe Board of Directors, specifying in detail the scope and nature of the deficiency or the “Cause”event; (b) an act of dishonesty intended to result in your gain or personal enrichment; (c)personally engaging in illegal conduct which causes material harm to the reputation of the Companyor its affiliates; (d) committing a felony or gross misdemeanor directly relating to, an act ofdishonesty or fraud against, or a misappropriation of property belonging to, the Company or itsaffiliates; (e) personally engaging in any act of moral turpitude that causes material harm to thereputation of the Company; (f) intentionally breaching in any material respect the terms of anynondisclosure agreement with the Company; or (g) commencement of employment with another Companywhile an employee of the Company without the prior consent of the Board of Directors. Anydetermination of “Cause” as used herein will be made only in good faith by the Board of Directors.“Good Reason” will mean the removal of your title of Vice President, Sales and Marketing withoutyour written consent; provided, however, that Good Reason shall not exist as a result of anyreduction of your authority, duties or responsibilities so long as you retain the title of VicePresident, Sales and Marketing of the Company.This letter, your Offer Letter, your Change-in-Control Agreement, your stock option grant dated May1, 2005, and any future stock option grants, constitute the entire agreement between you and theCompany regarding the terms and conditions of your employment with the Company and supersede anyother agreement or promises made to you by anyone, whether oral or written, express or implied.This Agreement shall be interpreted, construed and administered in a manner that satisfies therequirements of Sections 409A of the Code, and the Treasury Regulations there under.Please sign and date this letter, and return it to me a soon as possible acknowledging yourunderstanding and acceptance of the terms and conditions set forth above.Sincerely,              /s/ JAMES L. FARES                 James L. Fares        President and CEO   Date:      May 4, 2005                    Agreed:             /s/ CRAIG C. CHAMBLISS                 Craig Chambliss        Vice President, Sales and Marketing   Date:      May 4, 2005