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                        CONFIDENTIAL TREATMENT REQUESTED

                                                                   Exhibit 10.23

                              EMPLOYMENT AGREEMENT

     This EMPLOYMENT AGREEMENT ("Agreement"), dated as of August 15, 2005 (the
"Effective Date"), is made by and between AVANIR PHARMACEUTICALS, a California
corporation having its principal offices at 11388 Sorrento Valley Road, San
Diego, California, 92121 (the "Company"), and Eric Brandt ("Employee").

                                    AGREEMENT

     1.   Effective Date.

          Employee's employment under this Agreement shall commence on September
6, 2005, or upon such earlier date as the Company and Employee shall mutually
agree on ("Commencement Date").

     2.   At-will Employment.

          Employee's employment relationship with the Company ("Employment") is
at-will, terminable at any time and for any reason by either the Company or
Employee. While certain sections of this Agreement describe events that could
occur at a particular time in the future, nothing in this Agreement shall be
construed as a guarantee of employment of any length.

     3.   Employment Duties.

          a. Title/Responsibilities. Employee shall be the President and Chief
Executive Officer of the Company and shall be elected as a member of the Board
of Directors of the Company as of the Commencement Date. Employee shall perform
all of the duties and responsibilities of such offices set forth in the Bylaws
of the Company and those commonly associated with such offices and such further
duties and responsibilities as may from time to time be assigned to him by the
Board of Directors of the Company (the "Board").

          b. Full-Time Attention. Employee shall devote his full time,
attention, energy and skills to the Company during the period he is employed
under this Agreement. Notwithstanding anything in this Agreement to the
contrary, Employee may, with the consent of the Board, not to be unreasonably
withheld, and subject to the Company's Corporate Governance Guidelines, serve as
a director of one or more other corporations; provided, that, without further
approval by the Board, Employee may serve on the boards of no more than two
public companies and two charitable or civic organizations. Employee's current
board memberships and involvement in charitable organizations, as disclosed by
Employee to the Company, are hereby approved.

          c. Policy Compliance. Employee shall comply with all of the Company's
policies, practices and procedures, including the terms of the Confidentiality
Agreement (defined below).

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     4.   Compensation.

          a. Base Salary. The Company shall pay Employee a base salary of
$41,666.67 per month (an annual rate of $500,000), or such higher amount as the
Board may determine from time to time ("Base Salary"), payable in accordance
with the Company's regular payroll practices. The Compensation Committee will
evaluate whether to increase the Base Salary in October 2006 and then annually
thereafter.

          b. Bonus Compensation. In addition to the Base Salary, Employee shall
be eligible for the following bonus compensation:

               i. a guaranteed bonus equal to 60% of the then-current annual
Base Salary, which is payable on February 15, 2006, but a portion of which
amount shall be immediately repaid to the Company if, within one year from the
Commencement Date, Employee resigns other than for Good Reason or is terminated
with Cause; and

               ii. an annual target bonus equal to 60% of the then-current
annual Base Salary, which is payable in October 2006 and annually thereafter,
provided that the actual bonus may be higher or lower than the target amount,
depending on the Employee's satisfaction of reasonable performance criteria
(which may include Company overall performance criteria) established by the
Compensation Committee of the Board.

          Employee must be employed by the Company when bonuses are distributed
in order to be eligible to receive any portion of such bonus.

          c. Signing Bonus. Employee shall receive a signing bonus upon the
execution of this Agreement in the amount of $150,000, but which amount shall be
immediately repaid to the Company if, within one year from the Commencement
Date, Employee resigns or is terminated with Cause. If the repayment is due in
2006, the amount repaid shall be net of any federal, state or other income taxes
payable by Employee with respect to the receipt of $150,000 in 2005. When, as
and if Employee realizes the benefit of any tax deduction on account of such
repayment (including without limitation realization by way of amending prior tax
returns), he shall promptly thereafter pay an additional amount to the Company
in the amount of such realized tax benefit, provided that Employee shall use his
best efforts to fully realize such tax benefit.

          d. Equity Compensation. Employee shall be granted the following equity
awards as additional compensation:

               i. Employee shall be awarded the right to purchase 1,000,000
shares of Class A common stock on the Commencement Date at a price of $0.001 per
share (the "Restricted Shares"). The Restricted Shares will be subject to a
right of repurchase in favor of the Company that will lapse as to one-third of
the Restricted Shares on the first anniversary of the Commencement Date and as
to an additional one-twelfth of the Restricted Shares on the corresponding day
of every third month thereafter in the form attached hereto as Exhibit 4 (the


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"Restricted Stock Agreement"). Employee will have the option to pay any required
withholdings by surrender of Restricted Shares, which will be valued for this
purpose at the average market price in the 5 most recent trading days prior to
the withholding payment date.

               ii. Employee will be eligible for a target option grant of
250,000 shares of Class A common stock, with an exercise price equal to 100% of
the fair market value of the underlying shares on the date of grant, subject to
a four-year vesting schedule (25% vesting one year after the grant and the
remainder vesting in 12 equal installments on a quarterly basis thereafter) and
otherwise subject to the terms and conditions of the Company's equity incentive
plans. The size of the option grants shall be established by the Compensation
Committee and may be larger or smaller than the target size, depending on the
Employee's satisfaction of reasonable performance criteria (which may include
Company overall performance criteria) established by the Compensation Committee.
Employee shall be eligible to receive such an option grant in February 2006 and
annually thereafter in February of each year.

The foregoing share amounts and share purchase prices shall be adjusted, as
necessary, to give effect to any stock split, reverse stock split, stock
dividend, recapitalization or similar transaction affecting the Company's Class
A common stock that is effected after the Effective Date.

          e. Employee Benefits. Employee shall be entitled to participate in all
employee benefit plans, programs and arrangements maintained by the Company and
made available to employees generally, including, without limitation,
retirement, profit sharing and savings plans and medical, disability, dental,
life and accidental death and dismemberment insurance plans and vacation. The
Employee's participation in such plans, programs and arrangements shall be on
the same basis and terms as are applicable to other employees of the Company
generally. Notwithstanding the above, Employee shall be entitled to 5 weeks of
vacation per year of service, the first 5 weeks to vest immediately upon the
Commencement Date and, beginning in 2006 and continuing for each subsequent year
of employment, 5 weeks shall vest immediately upon the anniversary of the
Commencement Date. Such vested vacation represents accrued vacation for all
purposes under California law.

          f. Reimbursement of Expenses. During his Employment with the Company,
Employee shall be entitled to reimbursement for all reasonable and necessary
business expenses incurred on behalf of the Company, including without
limitation, travel and entertainment expenses, business supplies and cellular
phone expenses, in accordance with the Company's policies and procedures.

          g. Reimbursement of Moving/Housing Expenses. The Company shall (i)
reimburse Employee for his reasonable documented moving expenses related to his
employment with Company, including but not limited to packing and unpacking,
home sale assistance including realtor fees, and incidental expenses and (ii)
reimburse Employee for reasonable documented hotel and/or apartment expenses in
San Diego County until Employee has relocated to San Diego County.


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     5. Confidentiality Agreement. Employee shall concurrently herewith execute
and deliver to the Company the Employee Confidentiality and Inventions Agreement
("Confidentiality Agreement") in the form attached hereto as Exhibit 1.

     6. Non-Competition. During his Employment, Employee shall not, directly or
indirectly, either as an employee, employer, consultant, corporate officer or
director, investor, or in any other capacity, engage or participate in any
business that is a Competitor of the Company, unless such participation or
interest is fully disclosed to the Company and approved by the Board.
"Competitor" as used in this paragraph refers to any company that has
therapeutic products (i) on the market or having successfully completed Phase II
clinical development and (ii) that are in competition with the products the
Company has on the market or that have successfully completed Phase II clinical
development. Notwithstanding the above, Employee may own securities in any
Competitor that is a public company, so long as Employee does not own, of record
or beneficially, more than an aggregate of five percent of the outstanding
securities of such company.

     7. Non-Solicitation. During his Employment, and for a period of 12 months
thereafter, whether for Employee's own account or the account of any other
person, Employee shall not solicit, directly or indirectly, any employee to
leave his or her employment with the Company. For purposes of this Agreement,
the phrase, "shall not solicit, directly or indirectly," includes, without
limitation, that Employee shall not: (i) identify any Company employees to any
third party as potential candidates for employment, such as by disclosing the
names, backgrounds, compensation or qualifications of any Company employees;
(ii) personally or through any other person approach, recruit or otherwise
solicit employees of Company to work for any other employer; or (iii)
participate in any pre-employment interview with any person who was employed by
the Company while Employee was employed by the Company whether under this
Agreement or otherwise. It shall not be a violation of this Agreement for
Employee to respond if any employee or former employee of Company initiates
contact with Employee for the purposes discussed in this paragraph.

     8. Agreement with Previous Employers. Employee represents and warrants to
the Company that he does not have any agreement (other than customary
confidentiality agreements) with any previous employer that prevents him from
performing his duties and responsibilities under this Agreement or that in any
way limits his performance hereunder.

     9. Voluntary Resignation or Termination for "Cause."

          a. Payment upon Voluntary Resignation or Termination for Cause. If
Employee voluntarily resigns his Employment, other than for Good Reason, or if
Employee is terminated for Cause, the Company shall pay Employee all accrued and
unpaid Base Salary through the date of termination and any vacation that is
accrued but unused as of such date. Employee shall not be eligible for Severance
Payments, as defined below, or any continuation of benefits (other than those
provided for under the Federal Consolidated Omnibus Budget Reconciliation Act
("COBRA")), or any other compensation pursuant to this Agreement or otherwise.


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          b. Definition of "Cause." As set forth above, the Employment
relationship between the parties is at-will, terminable at any time by either
party for any reason or no reason. The termination may nonetheless be for
"Cause." For purposes of this Agreement, "Cause" is defined as: (i) the willful
refusal of Employee to comply with a lawful instruction of the Board so long as
the instruction is consistent with the scope and responsibilities of Employee's
position ; (ii) Employee's substantial and material failure or refusal to
perform according to, or to comply with, the policies, procedures or practices
established by the Company or the Board of Directors that results in material
harm to the business of the Company; (iii) Employee's commission of or
participation in a fraud or act of dishonesty against the Company that results
in material harm to the business of the Company or to its public reputation; or
(iv) Employee's conviction of, or the entering of a guilty plea or plea of "no
contest" with respect to a felony involving fraud, dishonesty or an act of moral
turpitude, in each case as determined by no fewer than two-thirds of the members
of the Company's Board of Directors (excluding the Employee, if applicable). The
conduct described under clause (i) and (ii) will only constitute Cause if such
conduct is not cured within 15 business days of Employee's receipt of written
notice from the Company or the Board specifying the particulars of the conduct
that may constitute Cause.

     10. Termination Without Cause or Resignation for Good Reason. If, other
than in connection with a Change in Control Transaction, Employee (i) is
terminated without "Cause," as defined in Section 9(b), or (ii) "Resigns for
Good Reason," as defined in Section 12(d)(ii), then Employee shall be paid all
accrued and unpaid Base Salary and any accrued but unused vacation through the
date of termination. In addition, subject to Employee's resignation from the
Company's board of directors (if applicable) and, if and only if the Company is
also willing to enter into it, in exchange for Employee's execution of a mutual
release of all claims by and against the Company and its subsidiaries and
affiliates effective as of the date of termination in the form attached hereto
as Exhibit 2:

          a. Employee shall be eligible to receive severance payments under this
Agreement in an amount equal to 12 months Base Salary and an amount equal to the
greater of (i) 60% of Base Salary or (ii) the last bonus, if any, paid to
Employee pursuant to Section 4(b) (the "Severance Payments"), payable in full
six months and one day after the date of termination, and

          b. the Company's right to repurchase the Restricted Shares under the
Restricted Stock Agreement shall lapse and Employee's ownership of the
Restricted Shares shall be fully vested.

     11. Employee's Disability or Death. Employee's Employment shall terminate
automatically in the event of Employee's death or "Disability." In the event of
Employee's death or Disability, the Company shall pay Employee's estate or
Employee all accrued and unpaid Base Salary through the date of death or
Disability and any vacation that is accrued but unused as of the date of death
or Disability. For purposes of this Agreement, "Disability" shall mean the
Employee's failure to perform his duties hereunder, for a period of not less
than 90 days within any 120-day period because of Employee's incapacitation due
to physical or mental injury, disability, or illness. In addition, Company shall
reimburse Employee for the cost (as grossed up for applicable taxes) of a $3
million life insurance policy and disability insurance equal to 60%


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of Employee's base salary at the time of any disability for Employee during his
employment with Company, to be purchased and maintained by Employee at his sole
discretion.

     12. Change of Control Termination.

          a. Payment Upon Change of Control Termination. In the event of a
"Change of Control Termination" (defined below), Employee shall be paid all
accrued and unpaid Base Salary and any accrued but unused vacation through the
date of termination. In addition, Employee shall be eligible to receive
severance under this Agreement in the following amounts:

               i. if the Transaction Value (defined below) is less than $***,
then Employee shall receive an amount equal to 12 months Base Salary plus the
greater of (i) 60% of Base Salary or (ii) the last bonus, if any, paid to
Employee pursuant to Section 4(b);

               ii. if the Transaction Value is equal to or greater than $***,
but less than $***, then Employee shall receive an amount equal to 24 months
Base Salary plus two times the greater of (i) 60% of Base Salary or (ii) the
last bonus, if any, paid to Employee pursuant to Section 4(b); and

               iii. if the Transaction Value is equal to or greater than $***,
or if the Aggregate Transaction Value (defined below) is equal to, or greater
than, $***, then Employee shall receive an amount equal to 36 months Base Salary
plus three times the greater of (i) 60% of Base Salary or (ii) the last bonus,
if any, paid to Employee pursuant to Section 4(b).

          The foregoing transaction values shall be adjusted, as necessary, to
give effect to any stock split, reverse stock split, stock dividend,
recapitalization or similar transaction affecting the Company's Class A common
stock that is effected after the Effective Date. For the avoidance of doubt,
Employee shall only be entitled to receive the greatest applicable severance
payment described above in clauses (i) through (iv).

          b. For purposes of Section 12(a):

               i. "Aggregate Transaction Value" shall equal the sum of (i) the
aggregate value of the entire equity interest in the Company, at the valuation
reflected in the Change of Control Transaction, as reasonably determined by the
Company's Board of Directors and (ii) the aggregate indebtedness of the Company
at the time of the Change of Control Transaction; and

               ii. "Transaction Value" shall equal the Aggregate Transaction
Value, less the aggregate indebtedness included in calculating Aggregate
Transaction Value, with the result divided by the total number of shares of
Class A common stock issued and outstanding immediately prior to the
consummation of the Change of Control Transaction (calculated giving effect to
dilutive common stock equivalents using the treasury stock method).

----------
***  Certain confidential portions of this Exhibit were omitted by means of
     blackout of the text (the "Mark"). This Exhibit has been filed separately
     with the Secretary of the Commission without the Mark pursuant to the
     Company's Application Requesting Confidential Treatment under Rule 24b-2
     under the 1934 Act.


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          c. The payment of any severance payment pursuant to this Section 12 is
conditioned on Employee's resignation from the Company's board of directors (if
applicable) and, if and only if the Company is also willing to enter into it,
his execution of a mutual release of all claims by and against the Company and
its subsidiaries and affiliates effective as of the date of termination, in the
form attached hereto as Exhibit 2. Severance payments to be made under this
Section 12 shall be paid in full six months and one day after the date of
termination.

          d. Definition of "Change of Control Termination". A "Change of Control
Termination" occurs where Employee is (i) terminated without Cause, or (ii)
"Resigns for Good Reason," as defined below, in either case within 24 months
following a "Change of Control," as defined below or, if in connection with the
Change of Control, prior thereto. For purposes of this Section 12(d):

               i.   Cause is defined in Section 9(b) above.

               ii.  "Resigns for Good Reason" is defined as a resignation based
                    on:

                    (1)  a material reduction in Employee's duties and
                         responsibilities as set forth in this Agreement;

                    (2)  the assignment to Employee of any significant duties
                         inconsistent with his status as an executive officer of
                         the Company;

                    (3)  a reduction by the Company in Employee's Base Salary by
                         greater than 5%, except to the extent the base salaries
                         of other executive officers of the Company are also
                         reduced; or

                    (4)  a relocation of Employee's or the Company's principal
                         executive offices to a location 50 miles or more from
                         the Company's current principal executive offices; or

                    (5)  Company's material breach of this Agreement.

               Notwithstanding the foregoing, an event described in Section
12(d)(ii)(1)-(4) shall not constitute Good Reason unless it is communicated in
writing within 90 days of the event giving rise to the claim by Employee to the
Company or its successor and unless it is not corrected by the Company or its
successor in a manner that is reasonably satisfactory to Employee within 30 days
of the Company's receipt of such written notice.

               iii. A "Change of Control" shall have occurred if, and only if,

                    (1)  any individual, partnership, firm, corporation,
                         association, trust, unincorporated organization or
                         other entity or person,


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                         or any syndicate or group deemed to be a person under
                         Section 14(d)(2) of the Securities Exchange Act of 1934
                         (the "Exchange Act") is or becomes the "Beneficial
                         Owner" (as defined in Rule 13d-3 of the General Rules
                         and Regulations under the Exchange Act), directly or
                         indirectly, of securities of the Company representing
                         40% or more of the combined voting power of the
                         Company's then outstanding securities entitled to vote
                         in the election of directors of the Company;

                    (2)  there occurs a reorganization, merger, consolidation or
                         other corporate transaction involving the Company
                         ("Transaction"), in each case, with respect to which
                         the stockholders of the Company immediately prior to
                         such Transaction do not, immediately after the
                         Transaction own more than 40% of the combined voting
                         power of the Company or other corporation resulting
                         from such Transaction;

                    (3)  all or substantially all of the assets of the Company
                         are sold, liquidated or distributed; or

                    (4)  Individuals who, as of the Effective Date, constitute
                         the Board of Directors of the Company (the "Incumbent
                         Board"), cease for any reason to constitute at least a
                         majority of the Board of Directors, provided that any
                         person becoming a director subsequent to the date
                         hereof whose election, or nomination for election by
                         the Company's stockholders, is 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
                         the Company, as such terms are used Rule 14a-11 of
                         Regulation 14A promulgated under the Exchange Act)
                         shall, for the purposes of this Agreement, be
                         considered as though such person were a member of the
                         Incumbent Board of the Company.

                    The first of any of these events to occur shall be deemed to
                    be the "Change of Control Transaction" for purposes of this
                    Agreement.

          e. Stock Option and Restricted Stock Vesting Upon Change of Control
Termination. In the event of a Change of Control Termination: (i) all
outstanding stock options issued to Employee, including those options described
in Section 4(d)(ii), shall be accelerated


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and become immediately exercisable, provided, however, that the Stock Options
shall be exercisable for the period or periods set forth in, and in accordance
with the other terms and conditions of, the stock option plans under which such
options were granted, and (ii) the Company's right to repurchase the Restricted
Shares under the Restricted Stock Agreement shall lapse and Employee's ownership
of the Restricted Shares shall be fully vested.

          f. Benefits Continuation. In the event of a Change of Control
Termination, Employee shall, to the extent practicable, be entitled to continue
to participate in all of the employee health and welfare benefit programs
available to Employee before the termination, including but not limited to group
medical insurance, group dental insurance, group-term life insurance, and
disability insurance. In addition, Employee shall receive executive outplacement
benefits of a type and duration generally provided by companies to executives at
Employee's level. These programs shall be continued at no cost to Employee,
except to the extent that tax rules require the inclusion of the value of such
benefits in Employee's income. Employee shall be entitled to continue to
participate in the programs for the shorter of (i) 18 months following the
termination or (ii) the period continuing until the date on which Employee
secures a new position providing for similar benefits. Notwithstanding the above
and in addition to any benefits to which Employee may be entitled above, in the
event of a Change of Control Termination, at a minimum, the Company shall pay
Employee's COBRA benefits until the earlier of (i) such time as when he secures
a new position providing for similar benefits, or (ii) 18 months from
termination.

          g. Indemnification for Excise Tax. In the event that Employee becomes
entitled to receive a severance payment in accordance with the provisions of
Section 12(a), and such severance payment and/or any other benefits or payments
(including transfers of property) that Employee receives, or is to receive,
pursuant to this Agreement or any other agreement, plan or arrangement with the
Company in connection with a Change in Control of the Company ("Other Benefits")
shall be subject to the tax imposed pursuant to Section 4999 of the Internal
Revenue Code of 1986, as amended (the "Code") (or any successor thereto) or any
comparable provision of state law (an "Excise Tax"), the following rules shall
apply:

               i. The Company shall pay to Employee, within 30 days after
Employee's termination, an additional amount (the "Gross-Up Payment") such that
the net amount retained by Employee, after deduction of any Excise Tax with
respect to the severance payments or the Other Benefits and any federal, state
and local income tax, employment tax and Excise Tax upon such Gross-Up Payment,
is equal to the amount that would have been retained by Employee if such Excise
Tax were not applicable, as determined by the accounting firm (the "Auditors")
serving as the Company's independent auditors immediately prior to the Change in
Control. It is intended that Employee shall not suffer any loss or expense
resulting from the assessment of any Excise Tax or the Company's reimbursement
of Employee for payment of any such Excise Tax.

               ii. For purposes of determining whether any of the severance
payments or Other Benefits will be subject to an Excise Tax and the amount of
such Excise Tax,


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                    (1) any other payment or benefits received or to be received
by Employee in connection with a Change in Control of the Company or Employee's
termination of employment (whether pursuant to the terms of this Agreement or
any other plan, arrangement or agreement with the Company, any person whose
actions result in a Change in Control or any person affiliated with the Company
or such person) shall be treated as "parachute payments" within the meaning of
Section 280G(b)(2) of the Code (or any successor thereto), and all "excess
parachute payments" within the meaning of Section 280G(b)(1) of the Code (or any
successor thereto) shall be treated as subject to the Excise Tax, unless in the
opinion of tax counsel selected by the Auditors and acceptable to Employee such
other payments or benefits (in whole or in part) do not constitute parachute
payments, or such excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered within the meaning of
Section 280G(b)(4) of the Code (or any successor thereto)

                    (2) the amount of the Severance Payments and Other Benefits
which shall be treated as subject to the Excise Tax shall be equal to the lesser
of (A) the total amount of the Severance Payments or Other Benefits or (B) the
amount of excess parachute payments within the meaning of Sections 280G(b)(1)
and (4) of the Code (or any successor or successors thereto), after applying
clause (1), above, and

                    (3) the value of any non-cash benefits or any deferred
payment or benefit shall be determined by the Company's independent auditors in
accordance with the principles of Sections 280G(d)(3) and (4) of the Code (or
any successor or successors thereto).

               iii. For purposes of determining the amount of the Gross-Up
Payment, Employee shall be deemed to pay federal income taxes at the highest
marginal rate of federal income taxation in the calendar year in which the
Gross-Up Payment is to be made and state and local income taxes at the highest
marginal rates of taxation in the state and locality of Employee's residence on
the date of Employee's termination, net of the maximum reduction in federal
income taxes which could be obtained from deduction of such state and local
taxes.

               iv. In the event that the Excise Tax is subsequently determined
to be less than the amount taken into account hereunder at the time of
Employee's termination, Employee shall repay to the Company, at the time that
the amount of such reduction in Excise Tax is finally determined, the portion of
the Gross-Up Payment attributable to such reduction plus interest on the amount
of such repayment at the rate provided in Section 1274(b)(2)(B) of the Code (or
any successor thereto) (the "Applicable Rate"). In the event that the Excise Tax
is determined to exceed the amount taken into account hereunder at the time of
such termination (including by reason of any payment the existence or amount of
which cannot be determined at the time of the Gross-Up Payment), the Company
shall make an additional Gross-Up Payment in respect of such excess (plus
interest, determined at the Applicable Rate, payable with respect to such
excess) at the time that the amount of such excess is finally determined.

     13. Allergan Option Losses.

          a. If, during the entire period from the Effective Date until the 3rd
business day prior to the expiration of the Stock Options (the "Exercise and
Sell Period"), Employee is


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unable to exercise some or all of the Stock Options and simultaneously sell in
the public market all Allergan stock to be received on such exercise due to
limitations under Applicable Law, then, upon delivery by Employee of the
Certification, the Company shall issue a number of shares of Class A common
stock with a value equal to the intrinsic value of the forfeited Stock Options
(net of any applicable exercise prices) as to which Employee was unable to make
such exercise and simultaneous sale, such values to be determined with reference
to (i) the average closing price of the Allergan Inc. common stock for each
trading day in the Exercise and Sell Period and (ii) the average closing price
of the Company's Class A common stock for each trading day in the Exercise and
Sell Period.

          b. For purposes of this Section 13, (a) "Stock Options" shall mean
vested options to purchase shares of Allergan Inc. common stock held by Employee
immediately prior to his resignation with Allergan Inc., (b) "Applicable Law"
shall mean the Securities Act of 1933 and the Securities Exchange Act of 1934,
each as amended, and regulations issued thereunder, and (c) the "Certification"
shall mean a certification, executed by Employee, setting forth in reasonable
detail the number of Stock Options as to which Employee was unable to so
exercise and simultaneously sell and that were forfeited as a result, the
exercise price of such options, and a statement to the effect that Employee was
unable to exercise such Stock Options and simultaneously sell in the public
market all Allergan stock to be received on such exercise during the entire
Exercise and Sell Period due to limitations under Applicable Law. Employee
agrees to use his best efforts to exercise such Stock Options cashlessly and
simultaneously sell the resulting shares if and when notified by Allergan that
he has the ability to do so.

          c. Notwithstanding the foregoing, in no event shall the Company be
required under this Section 13 to (i) issue a number of shares of Class A common
stock with an aggregate value in excess of three percent (3%) of the aggregate
market capitalization of the Company immediately prior to such issuance, or (ii)
compensate Employee for the value of any Stock Options that he actually
exercises (it being agreed that this clause (ii) shall not give rise to any duty
of Employee to actually exercise any Stock Option unless Employee can exercise
it cashlessly and simultaneously sell the resulting shares).

     14. Dispute Resolution Procedures. Except as expressly provided in this
Agreement, Employee agrees that any dispute or controversy arising out of,
relating to, or in connection with this Agreement, or the interpretation,
validity, construction, performance, breach, or termination thereof shall be
settled by arbitration, to the extent permitted by law, to be held in San Diego
County, California in accordance with the National Rules for the Resolution of
Employment Disputes then in effect of the American Arbitration Association (the
"Rules") and in accordance with the accompanying Mutual Arbitration Agreement
attached hereto as Exhibit 3. The arbitrator's decision shall be final,
conclusive and binding on the parties to the arbitration pursuant to the Mutual
Arbitration Agreement. Judgment may be entered on the decision of the arbitrator
in any court having competent jurisdiction.

     15. Notices. Any reports, notices or other communications required or
permitted to be given by either party hereto, shall be given in writing by
personal delivery, overnight courier service, or by registered or certified
mail, postage prepaid, return receipt requested, addressed to each respective
party at the address shown below or other current address:


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     If to AVANIR:

          Avanir Pharmaceuticals
          11388 Sorrento Valley Road
          San Diego, California 92121
          Fax: (858) 658-7455
          Attn: Chairman of the Board

     If to Employee:

          Eric Brandt

     16. Notice of Termination. Any purported termination of Employment by the
Company or the Employee shall be communicated by written Notice of Termination
to the other party. For purposes of this Agreement, a "Notice of Termination"
shall mean a notice that indicates the specific termination provision in this
Agreement relied upon and, in the case of a termination for Cause or Resignation
for Good Reason, that sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for such termination of the Employee's
employment. For purposes of this Agreement, no such purported termination of
employment shall be effective without delivery of such a Notice of Termination.

     17. Withholding. All payments to be made hereunder, including Base Salary
and bonus and severance payments, shall be paid less applicable Federal and
state withholding taxes.

     18. General Provisions.

          a. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.

          b. Assignment. Employee may not assign, pledge or encumber his
interest in this Agreement or any part thereof.

          c. No Waiver of Breach. The failure to enforce any provision of this
Agreement shall not be construed as a waiver of any such provision, nor prevent
a party thereafter from enforcing the provision or any other provision of this
Agreement. The rights granted the parties are cumulative, and the election of
one shall not constitute a waiver of such party's right to assert all other
legal and equitable remedies available under the circumstances.

          d. Severability. The provisions of this Agreement are severable, and
if any provision shall be held to be invalid or otherwise unenforceable, in
whole or in part, the remainder of the provisions, or enforceable parts of this
Agreement, shall not be affected.


                                       12

<PAGE>

          e. Entire Agreement. This Agreement, the Restricted Stock Agreement,
and the exhibits hereto constitute the entire agreement of the parties with
respect to the subject matter of this Agreement and supersedes all prior and
contemporaneous negotiations, agreements and understandings between the parties,
whether oral or written.

          f. Modifications and Waivers. No modification or waiver of this
Agreement shall be valid unless in writing, signed by the party against whom
such modification or waiver is sought to be enforced.

          g. Amendment. This Agreement may be amended or supplemented only by a
writing signed by both of the parties hereto.

          h. Duplicate Counterparts. This Agreement may be executed in duplicate
counterparts, each of which shall be deemed an original; provided, however, such
counterparts shall together constitute only one agreement.

          i. Interpretation. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

          j. Drafting Ambiguities. Each party to this Agreement and its counsel
have reviewed and revised this Agreement. The rule of construction that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of this Agreement or any of the amendments to this
Agreement.

     EXECUTED at San Diego, California, this 15th day of August, 2005.

                                        AVANIR PHARMACEUTICALS


Dated: August 13, 2005                  By: /s/ Charles A. Mathews
                                            ------------------------------------
                                            Charles A. Mathews
                                            Chairman of the Board


                                        EMPLOYEE


Dated: August 19, 2005                  /s/ Eric Brandt
                                        ----------------------------------------


                                       13

<PAGE>

                                    EXHIBIT 2

                             MUTUAL GENERAL RELEASE

     This MUTUAL GENERAL RELEASE ("Release"), is made this ___ day of
____________, 20__ (the "Effective Date") by [_____________] ("Employee") and
AVANIR PHARMACEUTICALS, a California Corporation ("the Company").

                                    RECITALS

     A. On _________, 2005, the parties hereto entered into an Employment
Agreement ("Agreement") pursuant to which the parties agreed that, among other
things, upon (i) a termination without "Cause" or (ii) a termination resulting
from "Change in Control," Employee would become eligible for severance payments
for the periods provided in the Agreement from the date of termination of his
Employment ("Termination Date") in exchange for a mutual release by Employee of
the Company and its subsidiaries and affiliates from all claims which each party
may have against the other and its subsidiaries and affiliates as of the
Termination Date.

     B. The parties desire to dispose of, fully and completely, all claims which
each may have against the other and its subsidiaries and affiliates in the
manner set forth in this Release.

     NOW, THEREFORE, in consideration of the severance payments referenced above
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Employee hereby agrees as follows:

     1. Definition. The term "party" as used in this Agreement means and
includes (a) the Company and each of its affiliates, successors, assignees,
subsidiaries, directors, officers, servants, employees, shareholders, attorneys,
accountants, other professionals, insurers and agents, and all persons acting
by, through, under or in concert with it or them and (b) Employee and each of
his heirs, executors, administrators, assigns and successors.

     2. Release. Each party hereby fully and forever releases, relinquishes,
acquits and discharges the other, and all entities related to each party,
including, but not limited to, heirs, executors, administrators, personal
representatives, assigns, parent, subsidiary and sister corporations,
affiliates, partners and co-venturers (collectively "Related Entities"), from
all rights, claims, demands, actions, causes of action, liabilities and
obligations of every kind, nature and description whatsoever, such party now
has, owns or holds or has at any time had, owned or held or may have against the
other party or Related Entities from any source whatsoever, whether or not
arising from or related to the facts recited in this Release. Employee
specifically releases and waives any and all claims arising under any express or
implied contract, rule, regulation or ordinance, including, without limitation,
Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the
Americans with Disabilities Act, the California Fair


                                      -14-

<PAGE>

Employment and Housing Act, and the Age Discrimination in Employment Act, as
amended ("ADEA").

     2. Section 1542 Waiver. This Release is intended as a full and complete
release and discharge of any and all claims that each party may have against the
other or Related Entities. In making this Release, each party intends to release
the other and Related Entities from liability of any nature whatsoever for any
claim of damages or injury or for equitable or declaratory relief of any kind,
whether the claim, or any facts on which such claim might be based, is known or
unknown to such party. Each party expressly waives all rights under Section 1542
of the Civil Code of the State of California, which the parties understand
provides as follows:

     A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT 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.

     Each party acknowledges that he or it may discover facts different from or
in addition to those which he or it now believes to be true with respect to this
Release. Each party agrees that this Release shall remain effective
notwithstanding the discovery of any different or additional facts.

     3. Waiver of Certain Claims. Employee acknowledges that he has been advised
in writing of his right to consult with an attorney prior to executing the
waivers set out in this Release, and that he has been given a twenty-one day
period in which to consider entering into the release of ADEA claims, if any. In
addition, Employee acknowledges that he has been informed that he may revoke a
signed waiver of the ADEA claims for up to 7 days after executing this Release.

     4. No Undue Influence. This Release is executed voluntarily and without any
duress or undue influence. Each party acknowledges such party has read this
Release and executed it with his or its full and free consent. No provision of
this Release shall be construed against any party by virtue of the fact that
such party or its counsel drafted such provision or the entirety of this
Release.

     5. Governing Law. This Release is made and entered into in the State of
California and accordingly the rights and obligations of the parties hereunder
shall in all respects be construed, interpreted, enforced and governed in
accordance with the laws of the State of California as applied to contracts
entered into by and between residents of California to be wholly performed
within California.

     6. Severability. If any provision of this Release is held to be invalid,
void or unenforceable, the balance of the provisions of this Release shall,
nevertheless, remain in full force and effect and shall in no way be affected,
impaired or invalidated.


                                      -15-

<PAGE>

     IN WITNESS WHEREOF, the undersigned have executed this Release at San
Diego, California as of the date first above written.

                                        AVANIR PHARMACEUTICALS


Dated:                                  By:
       ----------                           ------------------------------------

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

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


                                        EMPLOYEE


Dated:
       ----------                           ------------------------------------


                                      -16-

<PAGE>

                                    EXHIBIT 3

                          MUTUAL ARBITRATION AGREEMENT

     This MUTUAL ARBITRATION AGREEMENT ("Agreement"), dated as of ___________,
2005, is made by and between AVANIR Pharmaceuticals, a California corporation
("the Company") and [__________] ("Employee") (collectively, the "Parties" or
"we").

AGREEMENT TO ARBITRATE CERTAIN DISPUTES AND CLAIMS

     We agree to arbitrate before a neutral arbitrator any and all disputes or
claims arising from or relating to Employee's recruitment to or employment with
the Company, or the termination of that employment, including claims against any
current or former agent or employee of the Company, whether the disputes or
claims arise in tort, contract, or pursuant to a statute, regulation, or
ordinance now in existence or which may in the future be enacted or recognized,
including, but not limited to, the following claims:

     -    claims for fraud, promissory estoppel, fraudulent inducement of
          contract or breach of contract or contractual obligation, whether such
          alleged contract or obligation be oral, written, or express or implied
          by fact or law;

     -    claims for wrongful termination of employment, violation of public
          policy and constructive discharge, infliction of emotional distress,
          misrepresentation, interference with contract or prospective economic
          advantage, defamation, unfair business practices, and any other tort
          or tort-like causes of action relating to or arising from the
          employment relationship or the formation or termination thereof;

     -    claims for discrimination, harassment, or retaliation under any and
          all Federal, state, or municipal statutes, regulations, or ordinances
          that prohibit discrimination, harassment, or retaliation in
          employment, as well as claims for violation of any other Federal,
          state, or municipal statute, regulation, or ordinance, except as set
          forth herein;

     -    claims for non-payment or incorrect payment of wages, commissions,
          bonuses, severance, employee fringe benefits, stock options and the
          like, whether such claims be pursuant to alleged express or implied
          contract or obligation, equity, the California Labor Code, the Fair
          Labor Standards Act, the Employee Retirement Income Securities Act,
          and any other Federal, state, or municipal laws concerning wages,
          compensation or employee benefits; and

     -    claims arising out of or relating to the grant, exercise, vesting
          and/or issuance of equity in the Company or options to purchase equity
          in the Company.

     We understand and agree that arbitration of the disputes and claims covered
by this Agreement shall be the sole and exclusive method of resolving any and
all existing and future disputes or claims arising out of Employee's recruitment
to or employment with the Company or


                                      -17-

<PAGE>

the termination thereof. We further understand and agree that the following
disputes and claims are not covered by this Agreement and shall therefore be
resolved in any appropriate forum, including courts of law, as required by the
laws then in effect:

          -    claims for workers' compensation benefits, unemployment
               insurance, or state or Federal disability insurance; and

          -    claims concerning the validity, infringement, enforceability, or
               misappropriation of any trade secret, patent right, copyright,
               trademark, or any other intellectual or confidential property
               held or sought by Employee or the Company, including claims
               alleged by Employee or the Company that arise under the Company's
               Employee Confidentiality and Inventions Agreement.

     Nothing in this Agreement should be interpreted as restricting or
prohibiting the Employee from filing a charge or complaint with a Federal,
state, or local administrative agency charged with investigating and/or
prosecuting complaints under any applicable Federal, state or municipal law or
regulation. Any dispute or claim that is not resolved through the Federal,
state, or local agency must be submitted to arbitration in accordance with this
Agreement.

FINAL AND BINDING ARBITRATION

     We understand and agree that the arbitration of disputes and claims under
this Agreement shall be instead of a trial before a court or jury. We further
understand and agree that, by signing this Agreement, we are expressly waiving
any and all rights to a trial before a court regarding any disputes and claims
which we now have or which we may in the future have that are subject to
arbitration under this Agreement.

ARBITRATION PROCEDURES

     We understand and agree that the arbitration shall be conducted in
accordance with the National Rules for the Resolution of Employment Disputes of
the American Arbitration Association; provided, however, that the Arbitrator
shall allow the discovery authorized by California Code of Civil Procedure
section 1283.05 or any other discovery required by law in arbitration
proceedings. Also, to the extent that any of the National Rules for the
Resolution of Employment Disputes or anything in this Agreement conflicts with
any arbitration procedures required by applicable law, the arbitration
procedures required by applicable law shall govern. Employee and the Company
also agree that nothing in this Agreement relieves either of them from any
obligation they may have to exhaust certain administrative remedies before
arbitrating any claims or disputes under this Agreement.

     We understand and agree that the Arbitrator shall issue a written award
that sets forth the essential findings and conclusions on which the award is
based. The Arbitrator shall have the authority to award any relief authorized by
law in connection with the asserted claims or disputes. The Arbitrator's award
shall be subject to correction, confirmation, or vacation, as provided by any
applicable law setting forth the standard of judicial review of arbitration
awards.


                                      -18-

<PAGE>

PLACE OF ARBITRATION

     We understand and agree that the arbitration shall take place in San Diego
County, California.

GOVERNING LAW

     We understand and agree that this Agreement and its validity, construction
and performance, as well as disputes and/or claims arising under this Agreement,
shall be governed by the laws of California, or Federal law. If both Federal and
state law apply to any given dispute or claim, Employee shall have the right to
elect the applicable law.

COSTS OF ARBITRATION

     We understand and agree that the Company shall bear the arbitrator's fee
and any other type of expense or cost that Employee would not be required to
bear if he or she were free to bring the dispute or claim in court as well as
any other expense or cost that is unique to arbitration. We shall each pay our
own attorneys' fees incurred in connection with the arbitration, and the
arbitrator shall not have authority to award attorneys' fees unless a statute or
contract at issue in the dispute authorizes the award of attorneys' fees to the
prevailing party, in which case the arbitrator shall have the authority to make
an award of attorneys' fees as required or permitted by applicable law. If there
is a dispute as to whether the Company or Employee is the prevailing party in
the arbitration, the Arbitrator shall decide this issue.

SEVERABILITY

     We understand and agree that if any term or portion of this Agreement
shall, for any reason, be held to be invalid or unenforceable or to be contrary
to public policy or any law, then the remainder of this Agreement shall not be
affected by such invalidity or unenforceability but shall remain in full force
and effect, as if the invalid or unenforceable term or portion thereof had not
existed within this Agreement.

COMPLETE AGREEMENT

     We understand and agree that this Agreement contains the complete agreement
between the Company and Employee regarding the subject matter of this Agreement,
superseding any and all prior representations and agreements between the Company
and Employee, if any, and that it may be modified only in a writing, expressly
referencing this Agreement, and signed by Employee and the Chairman of the Board
of the Company.

KNOWING AND VOLUNTARY AGREEMENT

     We understand and agree that we have been advised to consult with an
attorney of our own choosing before signing this Agreement, and we have had an
opportunity to do so. We agree that we have read this Agreement carefully and
understand that by signing it, we are


                                      -19-

<PAGE>

waiving all rights to a trial or hearing before a court or jury of any and all
disputes and claims subject to arbitration under this Agreement.

     IN WITNESS WHEREOF, the parties have executed this Agreement at San Diego,
California on the __ day of _______, 2005.

                                        AVANIR PHARMACEUTICALS


                                        By:
                                            ------------------------------------
                                            Charles A. Mathews
                                            Chairman of the Board


                                        EMPLOYEE


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


                                      -20-

<PAGE>

                                    EXHIBIT 4

                             AVANIR PHARMACEUTICALS

                       RESTRICTED STOCK PURCHASE AGREEMENT

     This Restricted Stock Purchase Agreement (the "Agreement") is made as of
_________, 2005 by and between Avanir Pharmaceuticals, a California corporation
(the "Company"), and ___________ ("Purchaser").

     A. Purchaser and the Company are parties to that certain Employment
Agreement dated as of _________, 2005 (the "Employment Agreement").

     B. Purchaser and the Company desire to specify the terms and conditions of
Purchaser's equity participation in the Company as contemplated in the
Employment Agreement.

     THE PARTIES AGREE AS FOLLOWS:

     1. SALE OF STOCK. In satisfaction of the Company's obligations under
Section 4(d)(i) of the Employment Agreement, and subject to the terms and
conditions of this Agreement, on the Purchase Date (as defined below) the
Company will issue and sell to Purchaser, and Purchaser agrees to purchase from
the Company, 1,000,000 shares of the Company's Class A Common Stock (the
"Purchased Shares") at a purchase price of $0.001 per Share for a total purchase
price of $1,000. The term "Shares" refers to the Purchased Shares and all
securities received in replacement of the Purchased Shares or as stock dividends
or splits, all securities received in replacement of the Shares in a
recapitalization, merger, reorganization, exchange or the like, and all new,
substituted or additional securities or other properties to which Purchaser is
entitled by reason of Purchaser's ownership of the Shares (including the
Purchased Shares).

     2. PURCHASE. The purchase and sale of the Shares under this Agreement shall
occur at the principal office of the Company simultaneously with the execution
of this Agreement by the parties or on such other date as the Company and
Purchaser shall agree (the "Purchase Date"). As promptly as practicable after
the Purchase Date, the Company will deliver to the Company's Secretary pursuant
to Section 4 a certificate representing the Shares to be purchased by Purchaser
(which shall be issued in Purchaser's name) against payment of the purchase
price therefor on the Purchase Date by Purchaser by cash or check made payable
to the Company.

     3. LIMITATIONS ON TRANSFER. In addition to any other limitation on transfer
created by applicable securities laws, Purchaser shall not assign, encumber or
dispose of any interest in any portion of the Shares which are subject to the
Repurchase Option. After any portion of the Shares has been released from the
Repurchase Option, Purchaser shall not assign, encumber or dispose of any
interest in such portion except in compliance with the provisions below and
applicable securities laws.

          (a) REPURCHASE OPTION.

               (i) In the event of the voluntary or involuntary termination of
Purchaser's employment or consulting relationship with the Company for any
reason (including


                                      -21-

<PAGE>

death or disability), with or without cause, upon the date of such termination
(the "Termination Date"), the Company shall have an irrevocable, exclusive
option (the "Repurchase Option") for a period of 90 days from such date to
repurchase all or any portion of the Shares held by Purchaser as of the
Termination Date which have not yet been released from the Company's Repurchase
Option at the original purchase price per Share specified in Section 1 (adjusted
for any stock splits, stock dividends and the like).

               (ii) Unless the Company notifies Purchaser within 90 days from
the Termination Date that it does not intend to exercise its Repurchase Option
with respect to some or all of the Shares, the Repurchase Option shall be deemed
automatically exercised by the Company as of the 90th day following the
Termination Date, provided that the Company may notify Purchaser that it is
exercising its Repurchase Option as of a date prior to such 90th day. Unless
Purchaser is otherwise notified by the Company pursuant to the preceding
sentence that the Company does not intend to exercise its Repurchase Option as
to some or all of the Shares to which it applies at the time of termination,
execution of this Agreement by Purchaser constitutes written notice to Purchaser
of the Company's intention to exercise its Repurchase Option with respect to all
Shares to which such Repurchase Option applies. The Company, at its choice, may
satisfy its payment obligation to Purchaser with respect to exercise of the
Repurchase Option by either (A) delivering a check to Purchaser in the amount of
the purchase price for the Shares being repurchased, or (B) in the event
Purchaser is indebted to the Company, canceling an amount of such indebtedness
equal to the purchase price for the Shares being repurchased, or (C) by a
combination of (A) and (B) so that the combined payment and cancellation of
indebtedness equals such purchase price. In the event of any deemed automatic
exercise of the Repurchase Option pursuant to this Section 3(a)(ii) in which
Purchaser is indebted to the Company, such indebtedness equal to the purchase
price of the Shares being repurchased shall be deemed automatically canceled as
of the 90th day following the Termination Date unless the Company otherwise
satisfies its payment obligations. Any failure on the part of the Company to
promptly satisfy its payment obligations for the Repurchase Option shall not, in
any way, affect the enforceability of the Company's exercise of the Repurchase
Option. As a result of any repurchase of Shares pursuant to this Section 3(a),
the Company shall become the legal and beneficial owner of the Shares being
repurchased and shall have all rights and interest therein or related thereto,
and the Company shall have the right to transfer to its own name the number of
Shares being repurchased by the Company, without further action by Purchaser.

               (iii) All of the Shares shall initially be subject to the
Repurchase Option. Provided that Purchaser remains continuously employed by the
Company (or continues to provide services to the Company as a consultant), the
Shares shall be released from the Repurchase Option pursuant to the following
schedule:

<TABLE>
<CAPTION>
 No. Shares released
from Repurchase Option                Date
----------------------                ----
<S>                      <C>
       333,333           [first anniversary of
                         Effective Date]
        83,333           [same day of the third
</TABLE>


                                      -22-

<PAGE>

<TABLE>
<S>                      <C>
                         following month]
        83,333           [same day of the third
                         following month]
        83,333           [same day of the third
                         following month]
        83,334           [same day of the third
                         following month]
        83,333           [same day of the third
                         following month]
        83,334           [same day of the third
                         following month]
        83,333           [same day of the third
                         following month]
        83,334           [same day of the third
                         following month]
</TABLE>

               (iv) Notwithstanding the provisions of Section 3(a)(iii) above,
if there is a "Change of Control Termination" (as defined in the Employment
Agreement) or if Purchaser resigns Purchaser's employment for "Good Reason" (as
defined in the Employment Agreement), the vesting of the Shares will accelerate
and the Shares will be released from the Repurchase Option as provided in
Sections 12(e)(ii) and 10(b), respectively, of the Employment Agreement.

          (b) RESTRICTIONS BINDING ON TRANSFEREES. All transferees of Shares or
any interest therein will receive and hold such Shares or interest subject to
the provisions of this Agreement, including insofar as applicable the Company's
Repurchase Option. Any sale or transfer of the Shares shall be void unless the
provisions of this Agreement are satisfied.

          (c) TERMINATION OF RIGHTS. Upon the expiration or exercise of the
Repurchase Option, a new certificate or certificates representing the Shares not
repurchased shall be issued, on request, without the legend referred to in
Section 5(a) below and delivered to Purchaser.

     4. ESCROW OF UNVESTED SHARES. For purposes of facilitating the enforcement
of the provisions of Section 3 above, Purchaser agrees, immediately upon receipt
of the certificate(s) for the Shares subject to the Repurchase Option, to
deliver such certificate(s), together with an Assignment Separate from
Certificate in the form attached to this Agreement as Exhibit A executed by
Purchaser and by Purchaser's spouse (if required for transfer), in blank, to the


                                      -23-

<PAGE>

Secretary of the Company, or the Secretary's designee, to hold such
certificate(s) and Assignment Separate from Certificate in escrow and to take
all such actions and to effectuate all such transfers and/or releases as are in
accordance with the terms of this Agreement. Purchaser hereby acknowledges that
the Secretary of the Company, or the Secretary's designee, is so appointed as
the escrow holder with the foregoing authorities as a material inducement to
make this Agreement and that said appointment is coupled with an interest and is
accordingly irrevocable. Purchaser agrees that said escrow holder shall not be
liable to any party hereof (or to any other party). The escrow holder may rely
upon any letter, notice or other document executed by any signature purported to
be genuine and may resign at any time. Purchaser agrees that if the Secretary of
the Company, or the Secretary's designee, resigns as escrow holder for any or no
reason, the Board of Directors of the Company shall have the power to appoint a
successor to serve as escrow holder pursuant to the terms of this Agreement.

     5. RESTRICTED SECURITIES; LEGENDS AND STOP-TRANSFER ORDERS.

          (a) RESTRICTED SECURITIES; LEGENDS. Purchaser understands that the
Shares have not been registered under the Securities Act of 1933, as amended
(the "Securities Act"), by reason of an exemption therefrom. Purchaser is
purchasing the Shares for investment for his own account only and not with a
view to, or for resale in connection with, any "distribution" thereof within the
meaning of the Securities Act. The certificate or certificates representing the
Shares shall bear the following legend (as well as any legends required by
applicable state and federal corporate and securities laws):

     THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
     THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). SUCH SECURITIES MAY NOT
     BE TRANSFERRED UNLESS A REGISTRATION STATEMENT UNDER THE ACT IS IN EFFECT
     AS TO SUCH TRANSFER OR, IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY
     TO THE COMPANY, REGISTRATION UNDER THE ACT IS UNNECESSARY IN ORDER FOR SUCH
     TRANSFER TO COMPLY WITH THE ACT OR UNLESS SOLD PURSUANT TO RULE 144 OF THE
     ACT.

     THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE REPURCHASE
     OPTION OF THE COMPANY AND MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE
     TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF
     WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.

          (b) STOP-TRANSFER NOTICES. Purchaser agrees that, in order to ensure
compliance with the restrictions referred to herein, the Company may issue
appropriate "stop transfer" instructions to its transfer agent, if any, and
that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.

          (c) REFUSAL TO TRANSFER. The Company shall not be required (i) to
transfer on its books any Shares that have been sold or otherwise transferred in
violation of any of the provisions of this Agreement or (ii) to treat as owner
of such Shares or to accord the right to vote


                                      -24-

<PAGE>

or pay dividends to any purchaser or other transferee to whom such Shares shall
have been so transferred.

     6. NO EMPLOYMENT RIGHTS. Nothing in this Agreement shall affect in any
manner whatsoever the right or power of the Company, or a parent or subsidiary
of the Company, to terminate Purchaser's employment or consulting relationship,
for any reason, with or without cause.

     7. SECTION 83(B) ELECTION. Purchaser understands that Section 83(a) of the
Internal Revenue Code of 1986, as amended (the "Code"), taxes as ordinary income
the difference between the amount paid for the Shares and the fair market value
of the Shares as of the date any restrictions on the Shares lapse. In this
context, "restriction" means the right of the Company to buy back the Shares
pursuant to the Repurchase Option set forth in Section 3(a) of this Agreement.
Purchaser understands that Purchaser may elect to be taxed at the time the
Shares are purchased, rather than when and as the Repurchase Option expires, by
filing an election under Section 83(b) (an "83(b) Election") of the Code with
the Internal Revenue Service within 30 days from the date of purchase. In this
case, the difference between the fair market value of the Shares at the time of
the execution of this Agreement and the amount Purchaser is paying for the
Shares makes it unlikely that Purchaser will choose to make an 83(b) Election,
as such election would require that Purchaser pay taxes on that difference at
the time the Shares are purchased. However, the 83(b) Election must be made if
the Purchaser wishes to avoid additional income under Section 83(a) in the
future. Accordingly, Purchaser understands that failure to file such an election
in a timely manner may result in adverse tax consequences for Purchaser.
Purchaser further understands that an additional copy of such election form
should be filed with his or her federal income tax return for the calendar year
in which the date of this Agreement falls. Purchaser acknowledges that the
foregoing is only a summary of the effect of United States federal income
taxation with respect to purchase of the Shares hereunder, and does not purport
to be complete. Purchaser further acknowledges that the Company has directed
Purchaser to seek independent advice regarding the applicable provisions of the
Code, the income tax laws of any municipality, state or foreign country in which
Purchaser may reside, the tax consequences of Purchaser's death and the decision
as to whether or not to file an 83(b) Election in connection with the
acquisition of the Shares.

     Purchaser agrees that he will execute and deliver to the Company with this
executed Agreement a copy of the Acknowledgment and Statement of Decision
Regarding Section 83(b) Election (the "Acknowledgment"), attached hereto as
Exhibit B. Purchaser further agrees that Purchaser will execute and submit with
the Acknowledgment a copy of the 83(b) Election, attached hereto as Exhibit C,
if Purchaser has indicated in the Acknowledgment his or her decision to make
such an election.

     8. MISCELLANEOUS.

          (a) GOVERNING LAW. This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
California, without giving effect to principles of conflicts of law.


                                      -25-

<PAGE>

          (b) ENTIRE AGREEMENT; ENFORCEMENT OF RIGHTS. This Agreement and the
Employment Agreement set forth the entire agreement and understanding of the
parties relating to the subject matter herein and merge all prior discussions
between them. No modification of or amendment to this Agreement, nor any waiver
of any rights under this Agreement, shall be effective unless in writing signed
by the parties to this Agreement. The failure by either party to enforce any
rights under this Agreement shall not be construed as a waiver of any rights of
such party.

          (c) SEVERABILITY. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, the parties agree to renegotiate such
provision in good faith. In the event that the parties cannot reach a mutually
agreeable and enforceable replacement for such provision, then (i) such
provision shall be excluded from this Agreement, (ii) the balance of this
Agreement shall be interpreted as if such provision were so excluded and (iii)
the balance of this Agreement shall be enforceable in accordance with its terms.

          (d) CONSTRUCTION. This Agreement is the result of negotiations between
and has been reviewed by each of the parties hereto and their respective
counsel, if any; accordingly, this Agreement shall be deemed to be the product
of all of the parties hereto, and no ambiguity shall be construed in favor of or
against any one of the parties hereto.

          (e) NOTICES. Any notice required or permitted by this Agreement shall
be in writing and shall be deemed sufficient when delivered personally or sent
by telegram or fax or 48 hours after being deposited in the U.S. mail, as
certified or registered mail, with postage prepaid, and addressed to the party
to be notified at such party's address or fax number as set forth below or as
subsequently modified by written notice.

          (f) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.

          (g) SUCCESSORS AND ASSIGNS. The rights and benefits of this Agreement
shall inure to the benefit of, and be enforceable by the Company's successors
and assigns. The rights and obligations of Purchaser under this Agreement may
only be assigned with the prior written consent of the Company.

                            [Signature Page Follows]


                                      -26-

<PAGE>

     The parties have executed this Agreement as of the date first set forth
above.

                                        COMPANY:

                                        AVANIR PHARMACEUTICALS


                                        By:
                                            ------------------------------------
                                        Title:
                                               ---------------------------------
                                        Address: 11388 Sorrento Valley Road
                                                 San Diego, CA 92121

     PURCHASER ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO
SECTION 3 HEREOF IS EARNED ONLY BY CONTINUING SERVICE AS AN EMPLOYEE OR
CONSULTANT AT THE WILL OF THE COMPANY. PURCHASER FURTHER ACKNOWLEDGES AND AGREES
THAT NOTHING IN THIS AGREEMENT SHALL CONFER UPON PURCHASER ANY RIGHT WITH
RESPECT TO CONTINUATION OF SUCH EMPLOYMENT OR CONSULTING RELATIONSHIP WITH THE
COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH PURCHASER'S RIGHT OR THE
COMPANY'S RIGHT TO TERMINATE PURCHASER'S EMPLOYMENT OR CONSULTING RELATIONSHIP
AT ANY TIME, WITH OR WITHOUT CAUSE.

                                        PURCHASER:

                                        [_____________]


                                        ----------------------------------------
                                        (Signature)

                                        Address:

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

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

I, ________________________________, spouse of [___________], have read and
hereby approve the foregoing Agreement. In consideration of the Company's
granting my spouse the right to purchase the Shares as set forth in the
Agreement, I hereby agree to be irrevocably bound by the Agreement and further
agree that any community property or similar interest that I may have in the
Shares shall be similarly bound by the Agreement. I hereby appoint my spouse as
my attorney-in-fact with respect to any amendment or exercise of any rights
under the Agreement.


                                        ----------------------------------------
                                        Spouse of [___________]


                                      -27-

<PAGE>

                                    EXHIBIT A

                      ASSIGNMENT SEPARATE FROM CERTIFICATE

     FOR VALUE RECEIVED and pursuant to that certain Restricted Stock Purchase
Agreement between the undersigned ("Purchaser") and Avanir Pharmaceuticals (the
"Company") dated as of _________, 2005 (the "Agreement"), Purchaser hereby
sells, assigns and transfers unto the Company _________________________________
(________) shares of the Class A Common Stock of the Company standing in
Purchaser's name on the Company's books and represented by Certificate No.
_____, and does hereby irrevocably constitute and appoint ______________________
to transfer said stock on the books of the Company with full power of
substitution in the premises. THIS ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY
THE AGREEMENT AND THE EXHIBITS THERETO.

Dated:
       ---------------------------

                                        Signature:


                                        ----------------------------------------
                                        [___________]


                                        ----------------------------------------
                                        Spouse of [___________] (if applicable)

Instruction: Please do not fill in any blanks other than the signature line. The
purpose of this assignment is to enable the Company to exercise its repurchase
option set forth in the Agreement without requiring additional signatures on the
part of Purchaser.

<PAGE>

                                    EXHIBIT B

                    ACKNOWLEDGMENT AND STATEMENT OF DECISION
                        REGARDING SECTION 83(B) ELECTION

     The undersigned has entered a Restricted Stock Purchase Agreement with
Avanir Pharmaceuticals, a California corporation (the "Company"), pursuant to
which the undersigned is purchasing [_________] shares of Common Stock of the
Company (the "Shares"). In connection with the purchase of the Shares, the
undersigned hereby represents as follows:

     1. The undersigned has carefully reviewed the Restricted Stock Purchase
Agreement pursuant to which the undersigned is purchasing the Shares.

     2. The undersigned either [check and complete as applicable]:

     (a)  ____ has consulted, and has been fully advised by, the undersigned's
          own tax advisor, __________________________, whose business address is
          _____________________________, regarding the federal, state and local
          tax consequences of purchasing the Shares, and particularly regarding
          the advisability of making elections pursuant to Section 83(b) of the
          Internal Revenue Code of 1986, as amended (the "Code") and pursuant to
          the corresponding provisions, if any, of applicable state law; or

     (b)  ____ has knowingly chosen not to consult such a tax advisor.

     3. The undersigned hereby states that the undersigned has decided [check as
applicable]:

     (a)  ____ to make an election pursuant to Section 83(b) of the Code, and is
          submitting to the Company, together with the undersigned's executed
          Restricted Stock Purchase Agreement, an executed form entitled
          "Election Under Section 83(b) of the Internal Revenue Code of 1986";
          or

     (b)  ____ not to make an election pursuant to Section 83(b) of the Code.

     4. Neither the Company nor any subsidiary or representative of the Company
has made any warranty or representation to the undersigned with respect to the
tax consequences of the undersigned's purchase of the Shares or of the making or
failure to make an election pursuant to Section 83(b) of the Code or the
corresponding provisions, if any, of applicable state law.


Date:
      -----------------------------     ----------------------------------------
                                        [______________]


Date:
      -----------------------------     ----------------------------------------
                                        Spouse of [______________]

<PAGE>

                                    EXHIBIT C

                          ELECTION UNDER SECTION 83(B)
                      OF THE INTERNAL REVENUE CODE OF 1986

     The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the
Internal Revenue Code, to include in taxpayer's gross income for the current
taxable year, the amount of any compensation taxable to taxpayer in connection
with taxpayer's receipt of the property described below:

1.   The name, address, taxpayer identification number and taxable year of the
     undersigned are as follows:

     NAME OF TAXPAYER: [______________]

     NAME OF SPOUSE: _________________

     ADDRESS: ________________________

              ________________________

     IDENTIFICATION NO. OF TAXPAYER: ___________________________________________

     IDENTIFICATION NO. OF SPOUSE: _____________________________________________

     TAXABLE YEAR: _____________________________________________________________

2.   The property with respect to which the election is made is described as
     follows:

     ____________ shares of the Class A Common Stock, of Avanir Pharmaceuticals,
     a California corporation (the "Company").

3.   The date on which the property was transferred is: __________________

4.   The property is subject to the following restrictions:

     Repurchase option at cost in favor of the Company upon termination of
     taxpayer's employment or consulting relationship or failure of vesting
     criteria.

5.   The fair market value at the time of transfer, determined without regard to
     any restriction other than a restriction which by its terms will never
     lapse, of such property is: $______________.

6.   The amount (if any) paid for such property: $______________

The undersigned has submitted a copy of this statement to the person for whom
the services were performed in connection with the undersigned's receipt of the
above-described property. The transferee of such property is the person
performing the services in connection with the transfer of said property.

The undersigned understands that the foregoing election may not be revoked
except with the consent of the Commissioner.


Dated:
       ----------------------------     ----------------------------------------
                                        Taxpayer


Dated:
       ----------------------------     ----------------------------------------
                                        Spouse of Taxpayer

<PAGE>

                                     RECEIPT

          Avanir Pharmaceuticals hereby acknowledges receipt of cash or a check
in the amount of $__________ given by Eric Brandt as consideration for
Certificate No. ___________ for ____________ shares of Class A Common Stock of
Avanir Pharmaceuticals.

Dated:
       ----------------------------

                                        Avanir Pharmaceuticals


                                        By:
                                            ------------------------------------
                                        Title:
                                               ---------------------------------

<PAGE>

                               RECEIPT AND CONSENT

     The undersigned hereby acknowledges receipt of a photocopy of Certificate
No. ______ for _____________ shares of Common Stock of Avanir Pharmaceuticals
(the "Company").

     The undersigned further acknowledges that the Secretary of the Company, or
his or her designee, is acting as escrow holder pursuant to the Restricted Stock
Purchase Agreement the undersigned has previously entered into with the Company.
As escrow holder, the Secretary of the Company, or his or her designee, holds
the original of the aforementioned certificate issued in the undersigned's name.

Dated:
       ----------------------------


                                        ----------------------------------------
                                        [_______________]