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EXHIBIT 10.39 [QUESTCOR LETTERHEAD] September 30, 2004 Reinhard Koenig, M.D., Ph.D.
3260 Whipple Road
Union City, CA 94587 Dear Reinhard: This letter amends the terms of the March 23, 2004 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 nine (9) month period commencing
ninety (90) days prior to such Change in Control, and you are a full-time employee of the
Company at any time within the thirty (30) days prior to the termination of your employment
with the Company, then you will be entitled to receive from Questcor a severance benefit of
six (6) months of base salary continuation, payable in accordance with the Companys normal
payroll practices. 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
thirty (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).
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 forty (40)
hours per week. Furthermore, in the event you are entitled to receive a severance benefit
under this paragraph as a result of your termination of employment: (i) if the Board of
Directors of Questcor (the Board) (or the Compensation Committee thereof) has determined
the amount of your bonus for the fiscal year of Questcor immediately preceding the fiscal
year of Questcor in which your termination of employment occurs (the Prior Fiscal Year)
prior to the Change in Control, and Questcor has not paid the bonus for the Prior Fiscal
Year (if any) to you prior to such termination of employment, Questcor will pay your bonus
(as so




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determined) for the Prior Fiscal Year to you, or (ii) if the Board (or the
Compensation Committee thereof) has not determined the amount of your bonus for the Prior
Fiscal Year prior to the Change in Control, the Board (or the Compensation Committee) shall
promptly determine the amount of such bonus, if any, in good faith and Questcor will pay to
you the amount of such bonus, if any, for the Prior Fiscal Year in cash in a lump sum
payment not later than ten (10) days following such termination of employment. For
purposes of this paragraph, any reference to the fiscal year of the Company will include
the fiscal year of any successor thereto. 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, term life and
disability insurance benefits coverage (Company-Provided Coverage) as is provided to you
(and your dependents, if applicable) immediately prior to the termination of your
employment with the Company, for six (6) months following the termination of your
employment, or until you become covered under another employers group insurance plan or
plans providing health, term life and disability insurance coverage, whichever occurs
first. In addition, for fifteen (15) months following the termination of the
Company-Provided Coverage, the Company will provide you (and your dependents, if
applicable) with such health, term life and disability insurance benefits coverage as is
provided to you (and your dependents, if applicable) immediately prior to the termination
of your employment with the Company, at your election and expense. The benefits coverage
provided under this paragraph 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); provided, however, that,
following the termination of the Company-Provided Coverage, your premiums for such benefits
coverage will be based on the full cost of such coverage. In the event that you are entitled to a severance benefit under this letter amendment,
then in addition to such severance benefit, you will have the right to require an extension
of the exercise period of each of your stock options under any plan of the Company (or any
options into which any such options have been converted) for a period of 90 days following
the later of: (i) the termination of employment, or (ii) the expiration of a lock-up
agreement (if any) imposed on the Companys optionees at the time of your termination of
employment; provided, however, that in no event will such extension of such option extend
beyond the expiration of the original term of the option. 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




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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, 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 overall job responsibilities from
your position with the Company and your prior responsibilities (provided, however, that the
fact that the Company may no longer be a public reporting or publicly-held company shall
not be the basis for an Involuntary Termination pursuant to this clause (A)), (B) a
reduction in your annual base compensation or material reduction of your bonus opportunity
from the Company, (C) 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, (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 3260 Whipple Road, Union City, California
94587. During the notice period set forth in clause (ii) above, the Company shall be
afforded opportunity to demonstrate that the circumstances references to in your notice
were not present on the




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date of such notice, or are no longer present, in which case your employment shall not
have been terminated and an Involuntary Termination shall not have occurred. 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 acquirer of such assets or business, or accept
employment with such purchaser or acquirer, 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 acquirer would result in any of the following: (A) a material
reduction in job responsibilities inconsistent with your position with the Company and your
prior responsibilities, (provided, however, that the fact that the purchaser or acquirer
(i) may not be a public reporting company or publicly-held company or (ii) may be a
substantially larger or smaller entity than the Company, shall not be the basis for
triggering benefits pursuant to this clause (A)), (B) a reduction in your annual base
compensation or material reduction of your bonus opportunity from the Company, (C) 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, (D) a material
reduction in your benefits, or (E) a reduction of your regularly scheduled work hours to
less than 40 hours per week. If any legal action or other proceeding is brought for the enforcement of this letter
amendment, or because of an alleged dispute, breach or default in connection with any of
the provisions of this letter amendment, the successful or prevailing party will be
entitled to recover attorneys fees and other expenses and costs incurred in that action or
proceeding, in addition to any other relief that may be granted. 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 benefits will commence ten
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 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/ Timothy E. MorrisTimothy E. MorrisSr. Vice President, Finance & Administration
Chief Financial Officer

Member, Office of the PresidentQuestcor Pharmaceuticals, Inc.Date: September 30, 2004Accepted by,/s/ Reinhard KoenigReinhard Koenig, M.D., Ph.D.Date: September 30, 2004




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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 ___(Employee) and other valuable consideration,
the receipt and adequacy of which are hereby acknowledged, Employee does hereby release and forever
discharge the Company Releasees 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, the
Americans with Disabilities Act, as amended, the Family and Medical Leave Act, as amended, the
Sarbanes-Oxley Act, as amended, the California Fair Employment and Housing Act, as amended, and the
California Family Right Act, as amended. This Release shall also not 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 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 HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH, IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR. EMPLOYEE BEING AWARE OF SAID CODE SECTION, HEREBY EXPRESSLY WAIVES ANY RIGHTS HE MAY HAVE
THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT.




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3. Release of Age Discrimination Claims and Rights under the Older Workers Benefit
Protection Act. Employee agrees and expressly acknowledges that this Letter Amendment 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. § 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 Letter Amendment: (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




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null and void in its entirety, and Employee will not receive the benefits provided for under the
Letter Amendment. 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:Title:Date:EMPLOYEEBy:Print NameSignatureDate: