SEPARATION AGREEMENT AND RELEASE OF CLAIMS

Exhibit 10.41

SEPARATION AGREEMENT AND RELEASE OF CLAIMS
(Agreement provided to Employee November 7, 2006)

     If you choose to accept Avanir Pharmaceuticals (“The Company”) Severance Package, please sign and return this Agreement to Theresa Hope-Reese, Vice President Human Resources, by no later than 5:00 p.m. on November 29th. You may scan and e-mail the signed Agreement to Theresa Hope-Reese at THope-Reese@Avanir.com . and mail the original to her at The Company’s offices at 101 Enterprise, Suite 300, Aliso Viejo, California 92656, telephone 949.389.6745.

RECITALS

     WHEREAS, Mr. Berg will conclude his employment with the Company, as described herein;

     WHEREAS, after the conclusion of Mr. Berg’s employment with the Company, Mr. Berg wishes to serve as a consultant to the Company, and the Company wishes to retain Mr. Berg as a consultant; and

     WHEREAS, each of the Parties to this Agreement desires an amicable separation of employment and to resolve any and all claims, disputes, issues, or matters that were asserted or could be asserted;

     NOW THEREFORE, in consideration of the promises, covenants and agreements set forth herein, and subject to the terms and conditions set forth below, the Parties desire to, and hereby do, agree as follows:

	1.		Mr. Berg’s employment with the Company will terminate effective November 7, 2006 (the “Termination Date”);
	2.		For a term of twelve (12) months following the Termination Date (the “Consulting Period”), the Company will retain Mr. Berg and Mr. Berg agrees to provide services as an independent contractor on the terms provided in the independent contractor agreement attached hereto as Exhibit A. The Parties agree that, concurrent with the signing of this Agreement, they will sign the independent contract agreement that is attached hereto as Exhibit A.
	3.		In exchange for agreeing to be bound by the terms of this Agreement and the attached Consulting Agreement, the Company will provide Mr. Berg with the following separation payments to which she/he otherwise would not be entitled:

	•		Thirty-nine (39) weeks of separation pay, calculated based on Berg’s current base salary, less all the required withholdings and taxes.
	•		If Berg chooses to elect continuation of coverage under federal law known as COBRA, the Company will continue to pay his medical, dental and vision premium through 31 August 2007, unless he becomes eligible for coverage

			under another group insurance plan before that date. Effective 01 September 2007, COBRA payments become Berg’s responsibility.
	•		Outplacement benefits as approved and offered through Right Management Consultants.

The payment described in this paragraph will become due fourteen (14) days after the Effective Date of this Agreement, as defined herein, provided that Employee complies with his obligations under Section (e) below.

     4.  Release .

               4.1 Berg, for himself and his heirs, agents, assigns, executors, successors and each of them, unconditionally, irrevocably and absolutely releases and discharges the Company, and any parent and subsidiary corporations, divisions, and affiliated corporations, partnerships or other affiliated entities of the Company, past and present, as well as the Company’s employees, officers, directors, agents, predecessors, successors and assigns (collectively “Released Parties”), from all claims related in any way to the transactions or occurrences between them to date, to the fullest extent permitted by law, including, but not limited to, Berg’s employment with the Company, the termination of his employment, and all other losses, liabilities, claims, demands and causes of action, known or unknown, suspected or unsuspected, arising directly or indirectly out of or in any way connected with Berg’s employment with the Company and the termination of that employment. This release is intended to have the broadest possible application permitted by law and includes, but is not limited to, any tort, contract, common law, constitutional or statutory claims and all claims for attorneys’ fees, costs and expenses. Notwithstanding the foregoing, this release shall not serve as a waiver of Berg’s rights to (i) vested benefits such as the Avanir Pharmaceuticals Employee Savings and Protection Plan, (ii) workers compensation or unemployment benefits, (iii) statutorily-required indemnification under California Labor Code Section 2802 or any comparable provisions of other states’ laws, or (iv) any other benefits or claims that cannot be released as a matter of law.

               4.2 Berg declares and represents that he intends this Agreement to be complete and not subject to any claim of mistake, and that the release herein expresses a full and complete release and, regardless of the adequacy or inadequacy of the consideration, the Parties intend the release to be final and complete. The Parties execute this release with the full knowledge that this release covers all possible claims against the Released Parties, to the fullest extent permitted by law.

     5.  Acknowledgement of Understanding . Berg and The Company acknowledge that they may discover facts or law different from, or in addition to, the facts or law that they know or believe to be true with respect to the claims released in this Agreement and agree, nonetheless, that this Agreement and the release contained in it shall be and remain effective in all respects notwithstanding such different or additional facts or the discovery of them. Berg and The Company expressly acknowledge and agree that Berg’s rights under Section 1542 of the California Civil Code and any comparable provisions of other states’ and federal law are expressly waived. That section provides:

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.

     6.  Pursuit of Released Claims . Berg represents that, as of the date of this Agreement, he has not filed any lawsuits, charges, complaints, petitions, claims or other accusatory pleadings against Released Parties in any court or with any governmental agency. Berg further agrees that, to the fullest extent permitted by law, he/she will not prosecute, nor allow to be prosecuted on his behalf, in any court, whether state or federal, any claim or demand of any type related to the matters released above, it being the intention of Berg that with the execution of this release, Released Parties will be absolutely, unconditionally and forever discharged of and from all obligations to or on behalf of Berg related in any way to the matters discharged herein. Berg further represents that he has not assigned any claim he may have against Released Parties to any other person or entity. Nothing in this Agreement limits Berg’s right to file a charge or complaint with any state or federal agency or to participate or cooperate in such a matter, but Berg acknowledges that he is not entitled to any other monies other than those payments described in this Agreement.

     7.  Return of Company Property . By signing this Agreement, Berg represents and warrants that he will have returned to the Company on or before the Effective Date of this Agreement, all Company property, including all originals and copies of documents removed from The Company’s premises at any time during his employment with The Company. Berg will not be entitled to the Severance Package described in Paragraph 3 herein unless and until all such property is returned to The Company.

     8.  Expense Reimbursement . By signing this Agreement, Berg agrees to submit all outstanding reimbursements he incurred as an employee of the Company to the Company on or before the Effective Date of this Agreement.

     9.  Nondisparagement . Berg will not make any voluntary statements, written or verbal, or cause or encourage others to make any such statements that defame, disparage or in any way criticize the Company’s business reputation, practices or conduct.

     10.  Arbitration of Disputes and Enforcement of Agreement .

               10.1 Berg and the Company agree to resolve any claims they may have against each other or that Berg has with any other Released Party through final and binding arbitration. This agreement to arbitrate applies to any and all disputes about the validity, interpretation, or effect of this Agreement or alleged violations of it and whether a particular claim is covered by this Agreement (“Arbitrable Claims”). Except as provided in Section (h)(3) below, arbitration shall be the exclusive remedy for any such claim or dispute, and the parties expressly waive their rights to a jury trial on any such claim or dispute. Arbitration shall be conducted through JAMS or, if JAMS is not available, through another arbitration provider mutually acceptable to the parties. However, either party may bring an action in court to compel arbitration under this Agreement or to enforce an arbitration award. The Federal Arbitration Act shall govern the interpretation and enforcement of this section. If a court or arbitrator finds the Federal

Arbitration Act does not govern, then California law shall govern the interpretation and enforcement of this section.

               10.2 In any arbitration, legal proceeding or other proceeding bro