Exhibit 10.1
LETTER AGREEMENT
          This Letter Agreement (this “Agreement”) is entered into as of
August 3, 2010 (the “Effective Date”) by and between Forest Laboratories
Holdings Limited (f/k/a Forest Laboratories Ireland limited), an Irish
corporation (“Forest”) having its principal executive offices at Milner House,
18 Parliament Street, Hamilton, Bermuda HM12, and Cypress Bioscience, Inc., a
Delaware corporation (“Cypress”), having offices at 4350 Executive Drive,
Suite 325, San Diego, California, 92121, United States of America. Unless
otherwise defined herein, capitalized terms shall have the respective meanings
assigned to them in the License Agreement as defined below.
          Whereas, Forest and Cypress entered into that certain License and
Collaboration Agreement dated January 9, 2004, pursuant to which Cypress granted
an exclusive license to certain patents and know-how to develop and
commercialize milnacipran (now “Savella®”) (the “License Agreement); and
          Whereas, Forest and Cypress desire to amend certain terms of the
License Agreement with respect to Cypress’s promotion rights, as hereinafter set
forth.
Amendment
          Now, Therefore, in consideration of the foregoing premises and the
mutual covenants and agreements contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
     1. Detailing
     1.1 As of the Effective Date, Cypress will no longer exercise its Promotion
Rights, subject to Section 5. Without limiting the generality of the foregoing,
from and after the Effective Date, the Cypress Sales Force will no longer call
upon physicians to detail Savella and will cease participating in or sponsoring
Savella promotional programs. Except for the payment referred to in Paragraphs 2
and 3 below, Forest shall not be required to pay Cypress any compensation with
respect to the Cypress Promotion Rights with respect to activities taking place
from and after the Effective Date. Forest acknowledges that from and after the
Effective Date, Forest will have the sole responsibility for the detailing and
promotion of Savella in the Territory in accordance with the terms of the
License Agreement.

1

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

 

     2. Transitional Activities
     2.1 Cypress agrees to cause its field representatives and management to
return all Savella samples, vouchers, coupons, sales aids and other promotional
materials to Knipper for return to Forest. All returns shall be by a reputable,
traceable delivery method (e.g., Federal Express) and will be completed as soon
as possible, within 10 business days following the Effective Date. Cypress will
provide written notice to Forest of the completion of all such returns.
     2.2 Cypress will also provide Forest with the support necessary to assist
in the seamless transition of promotional efforts to the Forest sales force and
to avoid gaps in detailing activities. Without limiting the generality of the
foregoing, such activities will include providing Forest with the relevant
details of all appointments and programs (e.g., “lunch and learns”, speaker
programs) which have been scheduled by Cypress prior to the Effective Date in
order to assure the smooth transition of such activities to Forest. In addition,
Cypress will agree to continue to cooperate and assist Forest as Forest may
reasonably request to investigate issues of sample accountability and close out
the final reconciliation of sample inventories relating to the activities of the
Cypress Sales Force, including providing such cooperation as may be reasonably
required following the receipt by Cypress of the payment contemplated by
Paragraph 3 below. Cypress shall require members of the Cypress Sales Force to
agree to corresponding obligations in favor of Cypress and Forest in severance
arrangements entered into between Cypress and such members.
     2.3 Termination of the exercise by Cypress of the Promotion Rights shall
not affect the reconciliation of detailing compensation and expenses for
activities performed prior to the Effective Date, which reconciliation shall
continue to be performed as provided in the License Agreement.
     3. Transfer of Promotional Efforts Fee
          In consideration of the amendments set forth herein, Forest will pay
Cypress a fee of US $2,000,000, payable within five business days following the
receipt by Forest of the notice from Cypress referred to in Paragraph 2.1 above
and the completion of the transfer of scheduling information as contemplated by
Paragraph 2.2.
     4. Interviewing of Sales Representatives

2

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

 

          Cypress will be implementing a reduction-in-force wherein its sales
representatives will be laid off. Forest agrees to interview Cypress’s
representatives requesting such interviews for available job openings in
Forest’s sales department, including its hospital sales force.
     5. Future Co-Promotion Right
          At any time after the Effective Date, Cypress may notify Forest of its
desire to re-initiate its Promotion Rights as set forth in and in accordance
with the terms of Section 3 of the License Agreement. Forest agrees to consider
such request in good faith in light of the then promotional requirements for
Savella and Forest’s sales force capacity and utilization plans.
          All other terms and conditions of the License Agreement shall remain
in full force and effect, unless and until, modified by the parties in writing.
          In Witness Whereof, the parties hereto have duly executed this
Agreement as of the date and year first above written.

                  Forest Laboratories Holdings Limited   Cypress Bioscience,
Inc.    
 
               
By:
  /s/ David Solomon   By:   /s/ Jay Kranzler    
 
 
 
     
 
   
 
               
Name:
  David Solomon   Name:   Jay Kranzler    
 
 
 
     
 
   
 
               
Title:
  Assistant Secretary   Title:   Chief Executive Officer    
 
 
 
     
 
   

3