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                                                                   EXHIBIT 10.22

                                            ***Text Omitted and Filed Separately
                                                Confidential Treatment Requested
                                            Under 17 C.F.R. (S)(S) 200.80(b)(4),
                                                            200.83 and 240.24B-2

                           RESTATED LICENSE AGREEMENT

         This Restated License Agreement (the "Agreement") is entered into as of
November 13, 2001 by and between Pierre Fabre Medicament, organized under the
laws of France having an address of 45, place Abel-Gance, 92654 Boulogne cedex,
France ("Pierre Fabre"), and Cypress Bioscience, Inc., a Delaware corporation
having an address of 4350 Executive Drive, Suite 325, San Diego, CA 92121,
U.S.A. ("Cypress") and amends and restates in its entirety the License Agreement
between Pierre Fabre and Cypress dated August 1, 2001 (the "Effective Date").

                                    Recitals

         Whereas, Pierre Fabre owns or controls certain patents and valuable
know-how related to the compound Milnacipran (as defined below) and the Licensed
Product (as defined below) in the form of a IR Formulation (as defined below)
and a SR Formulation (as defined below) that Cypress wishes to license;

         Whereas, Pierre Fabre has developed Milnacipran for the treatment of
depression and currently markets itself or through licensees the IR Formulation
in such indication in certain territories outside the United States;

         Whereas, Pierre Fabre has also conducted a development program on the
SR Formulation, which formulation is not commercialized;

         Whereas, Cypress which is currently developing know-how and expertise
in FMS (as defined below) with the objective of becoming the leading company in
North America for the development and commercialization of pharmaceutical
products for the prevention and treatment of FMS, has expressed an interest in
developing, registering, manufacturing and marketing the Licensed Product in the
Field (as defined below) in the Licensed Territory (as defined below);

         Whereas, Pierre Fabre agrees to grant Cypress a license of Pierre Fabre
Patents and Know-How (as defined below) to develop, register, manufacture from
the API purchased from Pierre Fabre, use, distribute, sell, offer for sale and
have sold and import the Licensed Product in the Field with an option for
Cypress to acquire a license for Other Indications (as defined below) in the
Licensed Territory; and

         Whereas, Pierre Fabre agrees to grant Cypress a license to certain
trademarks pursuant to a Trademark License Agreement between Cypress and Pierre
Fabre of even date herewith.

         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.       Definitions

         1.1 "Affiliate" shall mean any company or entity controlled by,
controlling, or under common control with a party hereto. For this purpose, the
term "control" shall mean the direct or indirect ownership of fifty percent
(50%) of the voting stock of that corporation, or in the

                                       1.

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absence of ownership of at least fifty percent (50%) of the voting stock of
that corporation, the power, directly or indirectly to cause the direction of
the management and policies of such corporation.

         1.2  "API" shall mean the active pharmaceutical ingredient Milnacipran
contained in the Licensed Product.

         1.3  "Approval Items" shall have the meaning set forth in Section
9.2(d).

         1.4  "Bottom Price" shall have the meaning set forth in Section 7.2.

         1.5  "Bulk Licensed Product" shall mean the Licensed Product in final
dosage form using Pierre Fabre's formulation or any Cypress Formulation and
"Finished Licensed Product" shall mean the Licensed Product in final dosage form
including primary and secondary packaging and ready for use by the ultimate
consumer.

         1.6  "Change in Control" shall have the meaning set forth in Section
16.6(b).

         1.7  "Commencement of Phase II or Phase III Clinical Trials" shall mean
the date on which the first patient is enrolled for the applicable clinical
trial.

         1.8  "Confidential Information" shall have the meaning set forth in
Section 13.1.

         1.9  "Cypress Information" shall mean all data and Information
developed or acquired by or for Cypress, its Affiliates and permitted
sub-licensees and used by Cypress, its Affiliates and sub-licensees in filing
for any Regulatory Approvals for the Licensed Products and marketing the
Licensed Product in the Licensed Territory.

         1.10 "Cypress Formulations" shall mean all new formulations of the
Licensed Product developed or acquired by or for Cypress, its Affiliates and
permitted sub-licensees other than the existing IR Formulation and the SR
Formulation that have been developed by Pierre Fabre prior to the Effective
Date, excluding however any minor improvements thereto.

         1.11 "Development Plan" shall mean the development plan relating to the
development of the Licensed Product in the Field attached in Exhibit C hereto
and made a part hereof.

         1.12  "Early Termination" shall have the meaning set forth in Section
14.3(b).

         1.13  "Effective Date" shall have the meaning set forth in the
introductory paragraph.

         1.14  "Extended Territory" shall have the meaning set forth in Section
2.2.

         1.15  "FDA" shall mean the United States Food and Drug Administration.

         1.16  "Field" shall mean FMS and related chronic pain syndromes.

         1.17  "FMS" shall mean the prevention and treatment of fibromyalgia
syndrome.

                                       2.

<PAGE>

         1.18 "IND" shall mean an Investigational New Drug Application filed
with the FDA, or the equivalent application or filing necessary to commence
human clinical trials in another country or other jurisdiction, as applicable.

         1.19 "IND Clearance Date" shall have the meaning set forth in Section
3.1(a).

         1.20 "Indemnifing Party" shall have the meaning set forth in Section
15.2.

         1.21 "Information" shall mean all tangible and intangible (a)
techniques, technology, practices, trade secrets, inventions (whether or not
patentable), methods, manufacturing processes, knowledge, know-how, skill,
experience, test data and results (including pharmacological, toxicological and
clinical test data and results), analytical and quality control data, results or
descriptions and software, (b) compounds, compositions of matter, cells, cell
lines, assays, and physical, biological or chemical material, and (c) marketing
data, including clinical studies designed to support promotional efforts,
relating to API or to the Licensed Product in any indication.

         1.22 "Initial IND" shall have the meaning set forth in Section 3.1(a).

         1.23 "License Term" shall have the meaning set forth in Section 14.1.

         1.24 "Licensed Product" shall mean any product containing Milnacipran
as an active ingredient, in any formulation and through any mode of
administration, that incorporates or uses the Licensed Technology or the
manufacture, use or sale of which is within the scope of any claim of the Pierre
Fabre Patents. The Licensed Product includes the following formulations
developed by Pierre Fabre prior to the Effective Date:

              (i)  the immediate release formulation in capsule form containing
25 mg and 50 mg of Milnacipran (the "IR Formulation"), and

              (ii) the slow release formulation covered by Pierre Fabre Patents
containing 120 mg of Milnacipran (the "SR Formulation").

         1.25 "Licensed Technology" shall mean the Pierre Fabre Patents and the
Pierre Fabre Know-How.

         1.26 "Licensed Territory" shall mean the United States of America, its
territories and possessions and Canada and, if extended pursuant to Section 2.2,
countries that are members of the European Union and Japan.

         1.27 "Losses" shall have the meaning set forth in Section 15.1(a).

         1.28 "Major European Countries" shall mean the United Kingdom, France,
Italy, Germany, Spain and Scandinavia (Denmark, Finland, Norway and Sweden).

         1.29 "Manufacturing Know-How" shall mean all data, Information and
know-how in the possession of Pierre Fabre prior to the Effective Date or
developed or acquired by or for Pierre Fabre during the License Term relating to
the manufacture of the API.

                                       3.

<PAGE>

         1.30 "Milnacipran" shall mean the substance known as milnacipran.

         1.31 "Minimum Sales" shall have the meaning set forth in Section
5.3(b).

         1.32 "NDA" shall mean a New Drug Application and all amendments and
supplements thereto filed with the FDA (as more fully defined in 21 C.F.R. 314.5
et seq.), or the equivalent application filed with any equivalent agency or
governmental authority outside the United States (including any supra-national
agency such as in the European Union) requiring such filing, including all
documents, data and other information concerning a pharmaceutical product that
are necessary for gaining Regulatory Approval to market and sell such
pharmaceutical product.

         1.33 "Negotiation Period" shall have the meaning set forth in Section
2.1(b).

         1.34 "Net Selling Price" shall mean on a country by country basis the
price invoiced by Pierre Fabre or Cypress, as applicable, or their respective
Affiliates or sublicensees from a Third Party which is not an Affiliate or
sublicensee of the selling party (unless such Affiliate or sublicensee is the
final user of and does not further sell such product, in which case the amount
billed therefor shall be deemed to be the amount that would be billed to a Third
Party in an arm's-length transaction) for sales of any Licensed Product to such
Third Parties less the following items, as allocable to such Licensed Product:
(i) trade discounts, credits or allowances, (ii) credits or allowances
additionally granted upon returns, rejections or recalls (except where any such
recall arises out of Pierre Fabre's or Cypress' or its Affiliate's or
sublicensee's gross negligence, willful misconduct or fraud), (iii) freight,
shipping and insurance charges, (iv) taxes, duties or other governmental tariffs
(other than income taxes) and (v) government mandated rebates. "Average Net
Selling Price" shall mean the weighted average Net Selling Price of the Licensed
Product in the Licensed Territory or in the Rest of the World as applicable.
"Net Sales" shall mean the amount equal to the total units invoiced by Pierre
Fabre or Cypress, as applicable or their respective Affiliates or sublicensees
from a Third Party which is not an Affiliate or sublicensee of the selling party
at the actual Net Selling Price.

         1.35 "Notice" shall have the meaning set forth in Section 2.4(c).

         1.36 "Option" shall have the meaning set forth in Section 2.4(a).

         1.37 "Option Period" shall have the meaning set forth in Section
2.4(a).

         1.38 "Original Notice" shall have the meaning set forth in Section
2.1(b).

         1.39 "Other Indications" shall mean all indications other than those
defined as the Field.

         1.40 "Patent" shall mean (a) valid and enforceable patents,
re-examinations, reissues, renewals, confirmations, extensions (including
supplemental protection certificates) and term restorations, and (b) pending
applications for patents, including, without limitation, continuations,
continuations-in-part, provisionals, divisionals and substitute applications,
including, without limitation, inventors' certificates.

                                       4.

<PAGE>

         1.41 "Phase II Clinical Trials" shall mean those trials on sufficient
numbers of patients that are designed to establish the safety and biological
activity of a drug for its intended use, and to define warnings, precautions and
adverse reactions that are associated with the drug in the dosage range to be
prescribed, as further defined in Federal Regulation 21 C.F.R. 312.21.

         1.42 "Phase III Clinical Trials" shall mean those trials on sufficient
numbers of patients that are designed to establish that a drug is safe and
efficacious for its intended use, and to define warnings, precautions and
adverse reactions that are associated with the drug in the dosage range to be
prescribed, and supporting Regulatory Approval of such drug or label expansion
of such drug, as further defined in Federal Regulation 21 C.F.R. 312.21.

         1.43 "Pierre Fabre Know-How" shall mean Information that is controlled
by Pierre Fabre or its Affiliates (with the right to license or sublicense) that
is not covered by the Pierre Fabre Patents but is related to the API or the
Licensed Product. The Pierre Fabre Know-How includes, without limitation, the
Information described on Exhibit A. Pierre Fabre Know-How shall exclude
Manufacturing Know-How, subject to the terms of the Supply Agreement.

         1.44 "Pierre Fabre Patents" shall mean all Patents controlled by Pierre
Fabre or any of its Affiliates (with the right to license or sublicense) that
are necessary or useful for the development, manufacture or commercialization of
Milnacipran and the Licensed Product in the Licensed Territory. The Pierre Fabre
Patents include, without limitation, the Patents set forth on Exhibit B.

         1.45 "Proposed License" shall have the meaning set forth in Section
2.4(c).

         1.46 "Reference Period" shall have the meaning set forth in Section
5.3(b).

         1.47 "Regulatory Approval" shall mean any and all approvals (including
price and reimbursement approvals), licenses, registrations, or authorizations
of health/regulatory authorities or any country, federal, state or local
regulatory agency, department, bureau or other government entity that is legally
required or necessary from an economic point of view for the manufacture, use,
storage, import, transport and/or sale of a Licensed Product in such
jurisdiction.

         1.48 "Rest of the World" shall mean the entire world excluding the
Licensed Territory.

         1.49 "Right of First Refusal" shall have the meaning set forth in
Section 2.4(d).

         1.50 "Second Reference Period" shall have the meaning set forth in
Section 5.3(b).

         1.51 "Selection Criteria" shall have the meaning set forth in Section
4.2.

         1.52 "SNRI product" shall mean any serotonin norepinephrine reuptake
inhibitor product, meaning an agent whose sole mode of action (including major
metabolites) is through the selective reuptake inhibition of the two monoamines,
serotonin (5-HT) and norepinephrine (NA). The sole mode of action means a low
binding affinity (>1000nM) on standard assays for dopamine D1- and D2 class;
serotonergic 1, 2, and 3 class; adrenergic alpha and beta; cholinergic nicotinic
and muscarinic; glutamatergic AMPA, Kainate, NMDA, and metabotropic;

                                       5.

<PAGE>

and histaminegic 1- and 2-class receptors. The agent should also not effect
MAO-A and -B enzyme activity. The IC50 or KI of in vivo reuptake inhibition for
NA and 5-HT must be both *1000nM, while the selectivity ratio for 5-HT and NA
(i.e., IC50 or KI of 5-HT in vivo reuptake inhibition divided by that of NA)
must range between 0.2 and 5. Similarly, the IC50 of KI of in vivo reuptake
inhibition for dopamine must be **1000 nM, with a selectivity ratio for dopamine
vs. NA or 5-HT of **50. Finally, the agent must not effect the release of the
amines, including 5-HT, NA and dopamine.

         1.53 "Supply Agreement" shall have the meaning set forth in Section
7.3.

         1.54 "Steering Committee" shall have the meaning set forth in Section
9.1.

         1.55 "Third Party" shall mean any entity other than Cypress or Pierre
Fabre or an Affiliate of Cypress or Pierre Fabre.

         1.56 "Trademarks" shall have the meaning set forth in the Trademark
License Agreement dated as of the Effective Date and entered into between
Cypress and Pierre Fabre.

         1.57 "Trial Period" shall have the meaning set forth in Section 5.3(b).

2.       License Grants

         2.1 License Grant by Pierre Fabre.

             (a) Pierre Fabre hereby grants to Cypress during the License Term,
an exclusive license, with the right to sublicense, under the Licensed
Technology to develop, register, use, distribute, sell, offer for sale, have
sold and import the Licensed Product in the Licensed Territory in the Field.
Pierre Fabre further grants Cypress a license to use Pierre Fabre Know-How and
Pierre Fabre Patents, to the extent necessary to formulate or have the API
formulated into Bulk Licensed Product and package Bulk Licensed Product into
Finished Licensed Product, solely for sale of Licensed Product by Cypress in the
Licensed Territory.

             (b) Cypress shall have the right to sub-license the rights granted
under Section 2.1 above after due consultation with Pierre Fabre; provided,
that, should Cypress decide to appoint a sub-licensee for the development,
registration, marketing and sale of the Licensed Product in the Field in the
Licensed Territory, then Cypress shall provide Pierre Fabre with written notice
thereof (the "Original Notice") and hereby grants Pierre Fabre a right of first
discussion to take such license if at that time, Pierre Fabre has an Affiliate
in the Licensed Territory, and upon Pierre Fabre's request, shall enter into
good faith negotiations with Pierre Fabre to grant Pierre Fabre marketing rights
to the Licensed Product in the Field in the Licensed Territory. If Pierre Fabre
does not notify Cypress of its interest in sublicensing the Licensed Product, in
the Licensed Territory in the Field within 30 days from receipt of the Original
Notice, then Cypress shall be free to appoint a Third Party as sub-licensee for
the development, registration, marketing and sale of the Licensed Product in the
Field in the Licensed Territory. In the event that Pierre Fabre is interested in
obtaining such a license, it shall notify Cypress in writing within 30 days
after receipt of the Original Notice whereupon the parties shall negotiate in
good faith for up to two months (the "Negotiation Period") from the date of the
Original Notice. If the parties fail to enter into a definitive agreement
granting Pierre Fabre such rights within such two-month

*  = less than
** = greater than

                                       6.

<PAGE>

negotiation period despite mutual efforts made by both parties to reach an
agreement, it shall be deemed to constitute rejection by Pierre Fabre of such
right and then Cypress shall be free to appoint a Third Party as sub-licensee
pursuant to the sublicense rights granted pursuant to Section 2.1(a) above.
Pierre Fabre shall have no rights under this Section 2.1(b) if the Negotiation
Period expires without Cypress and Pierre Fabre entering into a definitive
agreement.

              (c) When selecting a sub-licensee, Cypress shall give appropriate
consideration to the following, whether such sub-licensee has proven
capabilities in clinical development, registrations and marketing of
pharmaceutical drugs in the Licensed Territory and whether such sub-licensee
will bring significant valuable skills, assets and resources to successfully
develop and register the Licensed Product in a timely manner and to maximize its
commercial potential in the Field in the Licensed Territory.

              (d) It shall be Cypress' sole responsibility to ensure that the
sub-licensee(s) fully comply with all the terms and conditions described in this
Agreement, the Trademark License Agreement and the Supply Agreement.

         2.2  Extension of the Licensed Territory. In the event that Pierre
Fabre or any of its Affiliates or licensees does not submit an application (in a
reasonably acceptable format) for Regulatory Approval of a Licensed Product in
the Field in either (1) all the Major European Countries and Japan, or (2) the
European Union and Japan, and have in place a commercialization plan for such
Licensed Product in the Field in these territories within [...***...] after
Cypress files an NDA for any Licensed Product in the Field in the United States
(so long as such NDA filing includes data and information that is sufficient for
filing in the applicable territories described above), the Licensed Territory
will automatically be extended to include the European Union and Japan (the
"Extended Territory"). In the event that the Licensed Territory is extended
under this Section 2.2, Pierre Fabre will retain the following rights:

              (a) a right to supply Cypress with Bulk Licensed Product or
Finished Licensed Product for the Extended Territory as long as the Bulk
Licensed Product and the Finished Licensed Product embodies a Pierre Fabre's
formulation, subject to Section 7.1;

              (b) a right to co-market the Licensed Product in the Field under a
different trademark from the Trademark in any of those territories within the
European Union, in which it then has active sales and marketing sales forces for
any product; and

              (c) a right to co-market the Licensed Product in Japan through a
local Japanese partner under a trademark different from the Trademark.

         2.3  Rights Retained by Pierre Fabre. Pierre Fabre shall retain the
following rights:

              (a) the exclusive worldwide right under the Licensed Technology to
make and have made API;

                                               *Confidential Treatment Requested

                                       7.

<PAGE>

              (b) the exclusive worldwide right under the Licensed Technology to
make and have made the Licensed Product using the IR Formulation and/or the SR
Formulation for the Rest of the World, subject to the terms of the purchase and
Supply Agreement; and

              (c) the exclusive right under the Licensed Technology to use,
distribute, sell, offer for sale, have sold and import the Licensed Product in
the Rest of the World in the Field and worldwide for the Other Indications,
subject to Section 2.4.

         2.4  Option; Right of First Refusal.

              (a) During the period from the Effective Date until [...***...]
(the "Option Period"), Pierre Fabre grants to Cypress the non-exclusive option
to acquire an exclusive license, with the right to sublicense to multiple Third
Parties, under the Licensed Technology to develop, register, manufacture, use,
distribute, sell, offer for sale and have sold the Licensed Product in the
Licensed Territory for the Other Indications (the "Option"). Cypress may
exercise the Option at any time during the Option Period upon written notice to
Pierre Fabre. In the event that Cypress exercises the Option, Cypress and Pierre
Fabre will negotiate in good faith the terms of such license for the Other
Indications.

              (b) During the Option Period, in the event that Pierre Fabre
identifies a Third Party and negotiates with such Third Party the terms of a
license to the Licensed Products for any of the Other Indications, Pierre Fabre
shall first notify Cypress (a "Notice"). Each Notice shall contain the identity
of the proposed licensee and all material terms of the proposed license,
including, without limitation, a copy of the written proposal received, the
purchase price and terms of payment and the date and place of the proposed
closing of the transaction (the "Proposed License").

              (c) Cypress shall have the exclusive right for a period of
[...***...] from receipt of the Notice to elect to enter into the Proposed
License on the same financial terms and subject to the same material terms and
conditions as described in the Notice (the "Right of First Refusal"). Cypress
may exercise such Right of First Refusal by notifying Pierre Fabre in writing
before expiration of the [...***...] period. If Cypress gives Pierre Fabre
notice that it desires to enter into the Proposed License, then the closing
shall take place at a place agreed upon between the parties, which shall be no
later than the later of (i) [...***...] after Cypress' receipt of the Notice or
(ii) the date contemplated in the Notice for the closing with the Third Party.

              (d) To the extent that Cypress has not exercised its Right of
First Refusal as to the Proposed License within the time period specified above,
then Pierre Fabre shall be free to enter into the Proposed License with the
identified Third Party on the same terms and conditions as outlined in the
Notice.

3.       Development and Registration

         3.1  Development Activities - transfer and obtaining of the IND.
Cypress shall use commercially reasonable efforts to develop the Licensed
Product in the Licensed Territory at its own expense, and in accordance with the
initial development plan, which is summarized on Exhibit C, as may be amended
from time to time (subject to Steering Committee approval of items in Section
9.2(d)). Cypress shall also use commercially reasonable efforts to achieve the

                                               *Confidential Treatment Requested

                                       8.

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following events with respect to a Licensed Product in the Field in the
United States by the time set forth opposite each such event; provided that the
timelines described below set forth on the following assumptions:

              (a) Cypress has filed an IND for the IR Formulation or the SR
Formulation (the "Initial IND") in the United States and either (i) 30 days has
lapsed after the filing of the Initial IND and the FDA has not placed a hold on
the Initial IND or (ii) if the FDA placed a hold on the Initial IND during the
30-day period after filing of the Initial IND, the FDA has removed any hold on
the Initial IND (the date specified in subsection (i) or (ii), as applicable,
being referred to herein as the "IND Clearance Date"). Consequently the
timelines below will be subject to adjustment as determined by the Steering
Committee if any formulation other than the IR Formulation and the SR
Formulation is used. The timelines for the following events begin on the first
day following the IND Clearance Date:

              (b) Commencement of Phase II Clinical Trial within [...***...]
after the IND Clearance Date.

              (c) Commencement of Phase III Clinical Trial within [...***...]
after the IND Clearance Date.

              (d) NDA filing both in the United States and Canada within
[...***...] after the IND Clearance Date.

         3.2  Filing of the Initial IND. Within 60 days following the Effective
Date, Pierre Fabre will take all necessary steps to provide to Cypress the IND
for Milnacipran filed with the FDA in the United States (No. 37,072) and shall
use commercially reasonable efforts to assist Cypress in filing the Initial IND.
In addition, and as far as it has not already done during the due-diligence
process carried out by Cypress prior to the Effective Date, Pierre Fabre shall
use commercially reasonable efforts to provide to Cypress any additional
available Pierre Fabre Know-How requested by Cypress which Cypress deem useful
for the submission of the Initial IND. Based on Pierre Fabre Know-How received
prior to the Effective Date and hereunder, Cypress shall prepare and submit to
the FDA the Initial IND on or before [...***...] and shall use all commercially
reasonable efforts to cause the IND Clearance Date to occur promptly and in any
event within [...***...] from the date of the submission of the Initial IND. In
addition, Pierre Fabre shall render reasonable assistance to Cypress in
preparing and submitting any data or documentation that may be required to
submit the Initial IND. If the Licensed Territory is extended pursuant to
Section 2.2, Pierre Fabre will promptly transfer to Cypress, any other INDs for
Milnacipran, if any, filed by Pierre Fabre in any other countries in the
Licensed Territory as requested by Cypress.

         3.3  Registration Activities. In conducting registration activities,
Cypress shall use commercially reasonable efforts to obtain in a timely manner
NDA approvals and subsequently all additional necessary price and reimbursement
approvals by the health/regulatory authorities of the Licensed Territory;
provided, however that the parties acknowledge that such price and reimbursement
approvals may not be granted. Cypress shall also keep Pierre Fabre fully
informed of the registration process through the Steering Committee and upon
request of Pierre Fabre, shall allow Pierre Fabre representatives to participate
in substantive meetings with the

                                               *Confidential Treatment Requested

                                       9.

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health/regulatory authorities of the Licensed Territory, if permitted by such
health/regulatory authorities.

         3.4  Pre-marketing Activities. During the development of the Licensed
Product and until Cypress commences commercialization of the Licensed Product in
the Field, Cypress shall conduct pre-marketing activities as determined by
Cypress with input from the Steering Committee to ensure successful launch of
the Licensed Product in the Licensed Territory.

         3.5  Commercially reasonable efforts. As used herein, the term
"commercially reasonable efforts" shall mean that the parties shall conform to
trade standards of diligence in fulfilling their obligations under this Section
3, consistent with those used in the pharmaceutical industry for the research
and development of compounds having comparable commercial potential.

4.       Right to Use Cypress Information and Cypress Formulations

         4.1  Access to Cypress Information. Cypress Information derived from
Cypress and its Affiliates or permitted sub-licensees' development, marketing
and other permitted activities under and during the License Term with respect to
the Licensed Product and all intellectual property rights in connection
therewith, if any, shall be the sole property of Cypress or of its Affiliates or
sub-licensees'; provided, that Pierre Fabre and its Affiliates and sub-licensees
are hereby granted an exclusive right (subject to section 2.2 herein above) to
use the same with respect to the Licensed Product in the Rest of the World
during the License Term and after the expiration of the License Term.

              (a) If Cypress Information is developed using the IR Formulation
or the SR Formulation, then in consideration of the rights granted hereunder,
Pierre Fabre shall pay a [...***...] royalty of Net Sales of the Licensed
Product sold by Pierre Fabre, its Affiliates or sub-licensees in the Rest of the
World in the Field during a ten (10) year period after the first commercial sale
of the Licensed Product in the Field made by Pierre Fabre, its Affiliates or
sub-licensees in the first country of the Rest of the World. During the License
Term, Cypress shall regularly provide Pierre Fabre with up-dated Cypress
Information through the Steering Committee.

              (b) If Cypress Information is developed using a Cypress
Formulation, then the royalty to be paid by Pierre Fabre in consideration of the
rights granted hereunder shall be included in the overall economic discussion
which will take place as indicated in Section 4.2.

         4.2  Cypress Proprietary Formulations. Pierre Fabre agrees that the
license granted to Cypress pursuant to Section 2.1 provides Cypress with the
right to develop Cypress Formulations, subject to the following. The Steering
Committee will establish business and technical criteria ("Selection Criteria")
to be used by Cypress in determining whether a Cypress Formulation should be
used instead of the IR Formulation or SR Formulation. Should the IR Formulation
and SR Formulation fail to conform to the Selection Criteria, and should Cypress
decide to develop any Cypress Formulation, Cypress will then notify Pierre Fabre
of such Cypress Formulations, and the parties will negotiate in good faith the
grant by Cypress of an exclusive license to Pierre Fabre, its Affiliates and
sub-licensees to register, market and sell such

                                               *Confidential Treatment Requested

                                      10.

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Cypress Formulations for the Rest of the World on commercially reasonable terms.
Cypress will own and control any intellectual property claiming Cypress
Formulations.

5.   TRADEMARK - Marketing - Sales Promotion - Non Competition

     5.1  Trademark - Trade dress Marking. In the Licensed Territory, the
Licensed Product will be sold by Cypress, its Affiliates and sub-licensees
exclusively under the Trademark. Terms and conditions of use of the Trademark by
Cypress, its Affiliates and sub-licensees are set forth in the Trademark License
Agreement. The Licensed Product will be marketed by Cypress and its permitted
sub-licensees in the Licensed Territory under Cypress or Cypress sub-licensees
trade dress which shall include the notice "Licensed from PIERRE FABRE" in a
legible manner on all packaging, leaflets, documents, congress materials and
generally in association with the reference to the Licensed Product and the
Trademark, so far as this is acceptable under applicable laws and regulations in
the Licensed Territory.

     5.2  Responsibility for Launch, Promoting and Distributing the Licensed
Product. Cypress and its permitted sublicensees shall be solely responsible for
the launch, promotion and distribution of the Licensed Product in the Licensed
Territory. All costs associated therewith shall be borne by Cypress and its
permitted sublicensees. The launch of the Licensed Product by Cypress or its
permitted sublicensee shall take place within no more than six months following
NDA Approval in each country of the Licensed Territory. No later than the NDA
filing for the Licensed Product in the United States, Cypress shall prepare and
submit to the Steering Committee for review and comments a three years rolling
marketing and commercial plan for the Licensed Product in the Field in the
Licensed Territory which will include marketing strategy, sales forecasts,
minimum sales efforts and promotional commitments and such plan shall be amended
from time to time.

     5.3  Sales Forecasts and Minimum Sales. During the License Term, Cypress
commits to procure sales, create a demand and continuously develop the sales of
the Licensed Product in the Field in the Licensed Territory in the most
effective manner and by all suitable and adequate means.

          (a) Sales Forecasts. No later than NDA filing for the Licensed Product
in the United States, Cypress and Pierre Fabre will discuss sales forecasts to
be achieved by Cypress and its permitted sublicensee with the Licensed Product
in the Field in the Licensed Territory during the License Term. Such sales
forecasts will be based on factors determined by Cypress in consultation with
the Steering Committee, including factors such as, projected sales of the
Licensed Product in the Field, whether or not the Licensed Product will be
marketed for any Other Indications, price positioning, foreseeable market trends
and competition.

          (b) Minimum Sales.

               (i) In the event that Cypress and its permitted sub-licensee fail
to reach at least [...***...] of the sales forecasts of Licensed Product agreed
pursuant to section 5.3(a) (the "Minimum Sales") during [...***...] consecutive
years and Cypress has otherwise met its obligations with respect to the minimum
sales efforts set forth in the marketing plan such as marketing, promotional and
sales force investments as approved by the Steering Committee, then Cypress
shall have [...***...] within which to try to meet the Minimum Sales. If at the
end

                                               *Confidential Treatment Requested

                                      11.

<PAGE>

of such [...***...], Cypress has not achieved the Minimum Sales, then Pierre
Fabre will have the option in its sole discretion to convert the exclusive
license granted under Section 2.1 to a non exclusive license; provided, however,
that Cypress shall first have the option to maintain the rights granted under
section 2.1 for one non renewable additional period of one year (the "Trial
Period") by paying to Pierre Fabre a compensation corresponding to [...***...]
of the difference between the Minimum Sales agreed for such [...***...] year
period (the "Reference Period") and the actual sales achieved by Cypress and its
sub-licensees during the Reference Period valued at [...***...] of the Average
Net Selling Price. The payment of the above compensation shall be made by
Cypress within [...***...] following the end of the Reference Period. If at the
end of the Trial Period, Cypress has again not achieved the Minimum Sales, then
Pierre Fabre shall have the option in its sole discretion to convert the
exclusive license granted under Section 2.1 to a non exclusive license or to
terminate the Agreement.

               (ii) In the event that Cypress and its permitted sub-licensee
fail to reach the Minimum Sales during [...***...] consecutive years and Cypress
has not otherwise met its obligations with respect to the minimum sales efforts
set forth in the marketing plan, then Pierre Fabre will have the option in its
sole discretion to convert the exclusive license granted under Section 2.1 to a
non exclusive license or to terminate the Agreement; provided, however, Cypress
shall first have the option to maintain the rights granted under Section 2.1 for
a Trial Period as defined in the above paragraph (i) by paying to Pierre Fabre
compensation corresponding to the difference between the Minimum Sales agreed
for such [...***...] (the "Second Reference Period") and the actual sales
achieved by Cypress and its sub-licensees during that Second Reference Period
valued at [...***...] of the Average Net Selling Price The payment of the above
compensation shall be made by Cypress within [...***...] following the end of
the Second Reference Period. If at the end of the Trial Period, Cypress has
again not achieved the Minimum Sales, then Pierre Fabre shall have the option in
its sole discretion to convert the exclusive license granted under Section 2.1
to a non exclusive license or to terminate the Agreement.

     5.4  Non Competition. For the term of this Agreement, Cypress, its
Affiliates and its permitted sub-licensees shall not register, market or sell
any other [...***...] in the Licensed Territory in the Field unless otherwise
agreed by Pierre Fabre.

6.   Up Front Fees, Milestone And Royalty Payments

     6.1  Up-Front fees and milestones payments. As partial consideration for
Pierre Fabre's entering into this Agreement with Cypress and for the rights
granted to Cypress on the Licensed Technology, Cypress shall pay to Pierre Fabre
the following up-front fees and milestone payments:

     6.2  Up Front Fees. Cypress shall pay to Pierre Fabre $750,000 within 15
days following the Effective Date. In addition, within 15 days following the IND
Clearance Date, Cypress shall pay Pierre Fabre $750,000. The up front fees shall
not be refundable to Cypress.

     6.3  Milestone Payments. Within 15 days following the first occurrence of
each of the events set forth below, Cypress shall pay to Pierre Fabre the
milestone payments set forth below (whether such milestone is achieved by
Cypress or by its sublicensee):

                                               *Confidential Treatment Requested

                                      12.

<PAGE>

   --------------------------------------------------------------------------
     Milestone Event                                    Milestone Payment
   --------------------------------------------------------------------------
     [...***...]                                           [...***...]
   --------------------------------------------------------------------------
     [...***...]                                           [...***...]
   --------------------------------------------------------------------------
     [...***...]                                           [...***...]
   --------------------------------------------------------------------------
     [...***...]                                           [...***...]
   --------------------------------------------------------------------------

     The milestone payments shall not be refundable to Cypress.

     6.4  Royalties. As further consideration for the rights and licenses hereby
granted to Cypress in respect of the Licensed Technology, Cypress shall pay
Pierre Fabre the following royalty:

          (a) In consideration of the Pierre Fabre Patents, a royalty of
[...***...] on the Net Sales of the Licensed Product made by Cypress, its
Affiliates or sub-licensees in the Licensed Territory from the date of the first
commercial sale until the last to expire of the Pierre Fabre Patents covering
the Licensed Product, including the manufacturing process of Milnacipran or the
formulation of the Licensed Product.

          (b) In consideration for the Pierre Fabre Know-How, a royalty of
[...***...] on the Net Sales of the Licensed Product made by Cypress, its
Affiliates or sub-licensees in the Licensed Territory from the date of the first
commercial sale of the Licensed Product until the 10th anniversary of the date
of the first commercial sale of the License Product.

7.   Supply of API and Transfer Price

     7.1  Supply by Pierre Fabre. Pierre Fabre agrees that it will manufacture
and supply to Cypress such quantities of API as requested by Cypress. The
parties agree that Pierre Fabre will be the exclusive supplier to Cypress of the
API and Cypress agrees that during the License Term, it shall purchase all of
its requirements for API from Pierre Fabre for clinical trials, samples and
commercial sales. Pierre Fabre shall remain the exclusive supplier of API for
Cypress as long as there is no generic competition in the Licensed Territory
taking at least a [...***...] market share of the Licensed Product in the Field
during [...***...]. Should any such generic competition appears in the Licensed
Territory, then Pierre Fabre will remain Cypress' exclusive supplier of API, as
long a Pierre Fabre can supply API to Cypress at a price no greater than
[...***...] more than the price charged by a Third Party generic supplier of
API. In the event Pierre Fabre is not able to provide the API at a price no
greater than [...***...] more than the price charged by a Third Party generic
supplier, Cypress may purchase API from Third Party suppliers; provided that the
API supplied by such Third Party complies with API Specifications as defined in
the Supply Agreement.

     7.2  Transfer Price. For API supplied by Pierre Fabre (other than for
clinical trials). Cypress will pay to Pierre Fabre a transfer price, equal to
[...***...] of the actual Average Net Selling Price of the Licensed Product in
the Licensed Territory during each year. However,

                                               *Confidential Treatment Requested

                                      13.

<PAGE>

since the actual Average Net Selling Price for the Licensed Territory will not
be determinable when the quantities of API are shipped to Cypress, the parties
agree that (i) all deliveries of API to be made during each calendar quarter
will be invoiced on the basis of [...***...] of a tentative Average Net Selling
Price that will be agreed between the parties 60 days before each calendar
quarter, (ii) within 30 days from the end of each calendar quarter, once the
actual Average Net Selling Price for the calendar quarter concerned is
determined according to the provisions of Section 10, then a reconciliation will
be made between (x) the total value of deliveries invoiced by Pierre Fabre at
the tentative Average Net Selling Price and (y) the value of such deliveries at
the actual Average Net Selling Price. Any difference in favor of Pierre Fabre
will be subject to an invoice of Pierre Fabre and paid by Cypress within 30 days
and any difference in favor of Cypress will be credited against next deliveries
of API to be made by Pierre Fabre to Cypress. Notwithstanding the above, the
transfer price to be paid by Cypress to Pierre Fabre for API shall under no
circumstances be less than [...***...] per kilogram of API (the "Bottom Price").
Payments pursuant to this Section 7.2 and to Section 7.4 will be made by Cypress
to Pierre Fabre within 60 days date of invoice.

     7.3  Supply Agreement. Cypress and Pierre Fabre agree that within six
months of the Effective Date that they will enter into a purchase and supply
agreement with respect to API in accordance with the terms set forth in this
Section 7 (the "Supply Agreement").

     7.4  Clinical Trial Supply. Pierre Fabre agrees to provide Cypress with API
for all clinical trials of Licensed Products conducted by Cypress or its
sublicensees in the Licensed Territory at [...***...]. Until the parties enter
into the Supply Agreement, Pierre Fabre will manufacture API for clinical trials
in accordance with Sections 7.5 through 7.10.

     7.5  Forecasts and Purchase Orders. Within [...***...] following the
Effective Date, Cypress will provide to Pierre Fabre a forecast of its estimated
requirements of API and proposed delivery dates for API for the following
[...***...] period, which forecast shall be updated by Cypress each month
thereafter. The API requirements for the [...***...] of each rolling [...***...]
forecast shall be a binding purchase order, and the API requirements for the
[...***...] of each such forecast shall be a non-binding purchase order.

     7.6  Delivery and Acceptance. Pierre Fabre agrees to deliver the API in
such quantities and on such delivery dates as are specified in Cypress' binding
purchase orders. Pierre Fabre shall ship the API to Cypress or to the address
that Cypress designates at Cypress' expense. The shipping and packaging method
used will be at the discretion of Pierre Fabre, but should be sufficient to
ensure that the quantities of API will meet the API Specifications as defined in
the Supply Agreement. Deliveries shall be made Ex-Works Pierre Fabre's facility
(ICC Incoterms 2000) and shall be shipped to Cypress' address as set forth in
this Agreement, or as otherwise directed by Cypress in writing.

     7.7  Specifications; Testing. Pierre Fabre will perform standard analytical
testing that is mutually acceptable to the parties on each lot of API prior to
shipment. Pierre Fabre shall provide a Certificate of Analysis to Cypress or its
designated agent with each shipment of the API supplied hereunder. Such
Certificate of Analysis shall certify with respect to each shipment and lot
(identified by batch or lot number): (a) the quantity of the shipment, and (b)
that the API delivered was manufactured in accordance with the API
Specifications and in conformance with

                                               *Confidential Treatment Requested

                                      14.

<PAGE>

current good manufacturing practices (cGMPs), as well as any further information
required by the relevant regulatory authorities that Cypress may have previously
notified Pierre Fabre is necessary. Cypress shall be under no obligation to
accept any shipment of the API without an accompanying Certificate of Analysis.

     7.8  Acceptance and Rejection.

          (a) Within 60 days of receipt of the API at Cypress' facilities or
such other destination as may be designated by Cypress, Cypress or its agent
shall perform such samplings and tests as are appropriate to determine whether
the API meets the API Specifications. If Cypress rejects any shipment of API,
Cypress shall within such 60-day period inform Pierre Fabre of its refusal to
accept the lot(s), and the reasons therefor; otherwise Cypress shall be deemed
to have accepted the lots.

          (b) Promptly following any notice of rejection of API by Cypress,
Pierre Fabre and Cypress agree to mutually determine whether the rejected API
conformed to the API Specifications. If Cypress and Pierre Fabre cannot agree
after a period of 60 days, they shall select a mutually acceptable independent
laboratory to perform tests on representative samples from the rejected portion
of the shipment. The results of such tests shall be binding upon Cypress and
Pierre Fabre.

          (c) If it is determined with or without reference to an independent
laboratory that the rejected API was non-conforming, Pierre Fabre shall at
Cypress' election, either make a replacement delivery free of any additional
charge, or reimburse Cypress the purchase price, including freight and insurance
(if the purchase price had actually been paid by Cypress) for the rejected API.
Rejected API shall be returned to Pierre Fabre or disposed of at Pierre Fabre's
expense in accordance with Pierre Fabre's instructions, in which case Cypress
shall deliver to Pierre Fabre an appropriate certificate of destruction.

     7.9  Manufacture of API Pierre Fabre will manufacture API in accordance
with the API Specifications, cGMPs and other applicable rules and regulations of
the FDA and other governmental or regulatory agencies with jurisdiction over the
manufacture, use or sale of the API, as then in effect. Pierre Fabre will be
responsible for manufacturing issues related to regulatory compliance. The
parties shall promptly notify each other of any new instructions or
specifications required by the FDA, and of other applicable United States rules
and regulations. The parties shall confer with each other with respect to the
best means to comply with such requirements and shall allocate any costs of
implementing such changes on an equitable basis.

     7.10 Access to Pierre Fabre Facility. Pierre Fabre will provide Cypress
with reasonable access, during business hours upon reasonable prior notice, to
Pierre Fabre's facilities where API is manufactured to review Pierre Fabre's
manufacturing operations and assess its compliance with cGMPs and quality
assurance standards and the opportunity to discuss any manufacturing issues with
Pierre Fabre's manufacturing and management personnel.

     7.11 Manufacture of the Licensed Product.

          (a) Pierre Fabre agrees that it will provide Cypress with reasonable
assistance in securing a Third Party manufacturer to produce Bulk Licensed
Product on behalf of Cypress if

                                      15.

<PAGE>

the Bulk Licensed Product uses the IR Formulation or the SR Formulation, it
being understood that it shall be Cypress' sole responsibility to enter into a
manufacturing agreement with such Third Party manufacturer.

          (b) Cypress shall use due care in the manufacturing, packaging and
control of the Licensed Product and shall be responsible for observing quality
standards and specifications set forth in the Supply Agreement, as well as cGMP
and relevant regulations of the Licensed Territory with respect to
manufacturing, packaging, quality control, storage and sale of ethical
pharmaceuticals.

          (c) Cypress shall permit Pierre Fabre and/or its authorized
representative to inspect Cypress or the Third Party manufacturer premises where
the Licensed Product is manufactured, packaged and stored, at reasonable times
and upon reasonable notice.

8.   Adverse Events

     8.1  Obligation to Provide Notice of Adverse Event. Pierre Fabre and
Cypress shall keep each other informed on all reports of adverse events
(hereinafter AE) coming to their knowledge assumed to be related to the Licensed
Product, regardless of the origin of such reports. The terms "reports" shall
also include publications in journals or other media.

     8.2  Notice of Adverse Event. Reports on such AE which according to the
informing party's careful professional evaluation may negatively affect the
efficacy versus toxicity of the Licensed Product or may have consequences
regarding the Licensed Product information (e.g. labeling, data sheets, package
inserts) or may require immediate safety measures (such as special
information/warnings to the medical profession, patients, authorities or
withdrawal of the Licensed Product) shall be forwarded to the other party hereof
without delay after having become known. The same shall apply in case of reports
on AE's being both serious and unexpected (i.e. not specified in the Licensed
Product information). Information on all other reported AE's shall be provided
according to the procedure described in Exhibit D hereto and made a part hereof.

     8.3  Procedure for Providing Notice of Adverse Event. The informing party
may, and is invited to give its professional evaluation of such reports, in
particular with regard to suspected, causality, either together with such
information or at a later date. The aforementioned information shall be
addressed:

in the case of PIERRE FABRE, to:

     PIERRE FABRE MEDICAMENT - Pharmacovigilance
     Attn: Mr. J.P. DEMAREZ
     45 Place Abel Gance
     92654 Boulogne Cedex - France -
     Tel :[...***...]
     Fax : (33) 1.49.10.80.90
     E-mail: [...***...]

                                               *Confidential Treatment Requested

                                      16.

<PAGE>

in the case of CYPRESS, to:

     CYPRESS BIOSCIENCE, INC.
     4350 Executive Drive, Suite 325
     San Diego, CA 92121
     Attention:  Jay D. Kranzler
     Telephone: (858) 452-2323
     Facsimile: (858) 452-1222

or to such other address as may thereafter be provided by either party.

     8.4  Meeting Regarding Adverse Events. In addition to the mutual exchange
of AE information, via mail or telefax, meetings will be held upon mutual
agreement of the parties, for purposes of discussing AE issues such as regarding
the mutual exchange of AE information as defined in mutually agreed procedures.
An agenda of any said meetings shall be forwarded by Pierre Fabre to Cypress one
month prior to the date of such meetings. All reports to be provided by and to
Cypress hereunder shall be in the English language.

9.   Steering Committee

     9.1  Establishment of Steering Committee. Promptly following the Effective
Date, the parties shall establish a committee (the "Steering Committee") which
shall perform the functions provided in this Section 9. The Steering Committee
shall consist of four persons (or such other number as mutually agreed by the
parties), with an equal number of members designated by each of Pierre Fabre and
Cypress. Each Steering Committee member shall have experience appropriate for
the activities to be conducted by the Steering Committee. The Steering Committee
shall meet at such times and such places as shall be determined from time to
time by Pierre Fabre and Cypress, but in any event, not less than twice in each
calendar year. Members of the Steering Committee may participate in meetings of
the Steering Committee in person or by conference telephone call. A quorum for
the conduct of business by the Steering Committee shall consist of one member
designated by Pierre Fabre and one member designated by Cypress. The members
designated by Pierre Fabre shall collectively have one vote, and the members
designated by Cypress shall collectively have one vote. All actions and
decisions by the Steering Committee shall require unanimous approval at a
meeting at which a quorum is present, which shall be set forth in minutes of the
proceedings of the Steering Committee, or unanimous written consent setting
forth the actions or decisions taken. Expenses incurred by a member of the
Steering Committee in connection with the activities of the Steering Committee
will be borne by the party that designated such member.

     9.2  Steering Committee Functions. The Steering Committee shall have the
authority to conduct the following activities and such other activities as may
be agreed to in writing by the parties:

          (a) Monitor the progress and results of research and development
conducted by Cypress with respect to the Licensed Product;

          (b) Review and discuss any material modification to the Development
Plan for the Licensed Product attached hereto as Exhibit C;

                                      17.

<PAGE>

          (c) Review and discuss the marketing plan for the Licensed Product
proposed by Cypress and any material modification to such marketing plan;

          (d) Approve any modification to the events or the timeline for
achievement of such events described in Section 3.1(a)(i), (ii) and (iii),
approve the Selection Criteria as described in Section 4.2 and any modification
thereto, and approve the provisions in the marketing plan for the Licensed
Product that establish annual Minimum Sales of Licensed Product and minimum
sales efforts with respect to Licensed Product or any modification to such
provisions in the marketing plan (the "Approval Items"). Once approved by the
Steering Committee, any modification or agreement regarding the Approval Items
shall be included by the parties into an amendment to this Agreement.

          (e) Coordinate mutual marketing and promotional activities of the
parties with respect to the Licensed Products.

          (f) review the publications according to the provisions of Section
13.4

     9.3  Dispute Resolution. If the Steering Committee is unable to decide or
resolve an issue with respect to any Approval Item, the issue shall be referred
to the Chief Executive Officers of Pierre Fabre and Cypress. Such officers of
the parties shall meet promptly thereafter and shall negotiate in good faith to
resolve such issue, and if advisable shall refer the matter to a mutually agreed
independent expert. If they cannot resolve the issue within 30 days of
commencing such negotiations, the provisions of Section 16.1 shall apply. If the
Steering Committee is unable to decide or resolve an issue with respect to any
matter other than any Approval Item, the issue shall be referred to the Chief
Executive Officers of Pierre Fabre and Cypress. Such officers of the parties
shall meet promptly thereafter and shall negotiate in good faith to resolve such
issue. If they cannot resolve the issue within 30 days of commencing such
negotiations, the Chief Executive Officer of Cypress shall have the final
tie-breaking vote.

10.  Payment; Records; Audits

     10.1 Payment; Reports. Royalty payments and reports for the sale of
Licensed Product shall be calculated and reported for each calendar quarter. All
payments due to a party under this Agreement shall be paid within 60 days of the
end of each calendar quarter, unless otherwise specifically provided herein.
Each payment of royalties shall be accompanied by a report of Net Sales of
Licensed Products in sufficient detail to permit confirmation of the accuracy of
the payment made, including, without limitation and on a country-by-country
basis, the number of Licensed Product sold, the gross sales and Net Sales of
Licensed Product, the royalty, in United States dollars or in Euro as
applicable, payable, the method used to calculate the payment and the exchange
rates used.

     10.2 Exchange Rate; Manner and Place of Payment. All payments hereunder due
and payable by Pierre Fabre to Cypress shall be payable in United States
dollars. All payments hereunder due and payable by Cypress to Pierre Fabre shall
be payable in Euros. With respect to each quarter, for countries other than the
United States, whenever conversion of payments from any foreign currency shall
be required, such conversion shall be made at the rate of exchange reported in
The Wall Street Journal, Western Edition, on the last business day of the
applicable quarter. All payments owed under this Agreement shall be made by wire
transfer to a bank and

                                      18.

<PAGE>

account designated in writing by the party entitled to receive such payment,
unless otherwise specified in writing by such party.

     10.3 Withholding of Taxes. The party receiving payments under this
Agreement will pay any and all taxes levied on account of such payment. If any
taxes are required to be withheld by the paying party, it will (a) deduct such
taxes from the remitting payment, (b) timely pay the taxes to the proper taxing
authority, and (c) send proof of payment to the other party and certify its
receipt by the taxing authority within 60 days following such payment.

     10.4 Records and Audits. During the License Term and for a period of five
years thereafter, each party shall keep complete and accurate records pertaining
to gross sales and Net Sales of the Licensed Products, including the expenses
incurred by the selling party, in sufficient detail to permit the other party to
confirm the accuracy of all payments due hereunder. A party shall have the right
to cause an independent, certified public accountant reasonably acceptable to
the other party to audit such records to confirm Net Sales and payments for a
period covering not more than the preceding three years. Such audits may be
exercised during normal business hours upon reasonable prior written notice to
the audited party. Prompt adjustments shall be made by the parties to reflect
the results of such audit. The party causing such audit shall bear the full cost
of such audit unless such audit discloses a variance of more than 5% from the
amount of the Net Sales or payments due under this Agreement. In such case, the
audited party shall bear the full cost of such audit. In the event of
underpayment, the audited party shall promptly remit to the other party the
amount of any underpayment.

     10.5 Prohibited Payments. Notwithstanding any other provision of this
Agreement, if a party is prevented from paying any payments due hereunder by
virtue of the statutes, laws, codes or governmental regulations of the country
from which the payment is to be made, then such payments may be paid by
depositing funds in the currency in which accrued to the other party account in
a bank acceptable to such other party in the country whose currency is involved.

11.  Intellectual Property

     11.1 Patent Prosecution and Maintenance. Pierre Fabre shall be responsible
for prosecution and maintenance of all Pierre Fabre Patents at Pierre Fabre's
sole expense. Pierre Fabre shall consider in good faith the requests and
suggestions of Cypress with respect to strategies for prosecuting the Pierre
Fabre Patents in the Licensed Territory. Pierre Fabre shall keep Cypress
informed of progress with regard to the prosecution, maintenance, enforcement
and defense of the Pierre Fabre Patents by providing Cypress of copies of
official actions, amendments and responses with respect to such prosecution. In
the event that Pierre Fabre desires to abandon any Pierre Fabre Patent in the
Licensed Territory, Pierre Fabre shall provide reasonable prior written notice
to Cypress of such intention to abandon and provide Cypress an opportunity to
discuss with Pierre Fabre the possibility of assuming responsibility for such
Pierre Fabre Patent. If Cypress assumes responsibility for any Pierre Fabre
Patent, such Patent shall be assigned to Cypress and shall no longer be included
in the Pierre Fabre Patents subject to this Agreement.

     11.2 Cooperation of the Parties. Each party agrees to cooperate fully in
the prosecution of the Pierre Fabre Patents under this Agreement.

                                      19.

<PAGE>

     11.3 Infringement by Third Parties. Pierre Fabre and Cypress shall promptly
notify the other in writing of any alleged or threatened infringement or any
challenge to the validity of the Pierre Fabre Patents or any challenge to Pierre
Fabre's ownership of or Cypress' and/or its licensees' right to use, the Pierre
Fabre Patents of which they become aware. Both parties shall use their best
efforts in cooperating with each other to terminate such infringement without
litigation. Pierre Fabre shall have the sole right to bring and control any
action or proceeding with respect to infringement of any of the Pierre Fabre
Patents at its own expense and by counsel of its own choice. With respect to
infringement of any of the Pierre Fabre Patents in the Licensed Territory, if
Pierre Fabre fails to bring an action or proceeding within (a) 60 days following
the notice of alleged infringement or (b) 10 days before the time limit, if any,
set forth in the appropriate laws and regulations for the filing of such
actions, whichever comes first, Cypress shall have the right to bring and
control any such action at its own expense and by counsel of its own choice, and
Pierre Fabre shall have the right, at its own expense, to be represented in any
such action by counsel of its own choice. In the event a party brings an
infringement action, the other party shall cooperate fully, including if
required to bring such action, the furnishing of a power of attorney. Neither
party shall have the right to settle any infringement litigation under this
Section 11.3 relating to the Pierre Fabre Patents without the prior written
consent of the other party. Except as otherwise agreed to by the parties as part
of a cost-sharing arrangement, any recovery realized as a result of such
litigation, after reimbursement of any litigation expenses of Pierre Fabre and
Cypress, shall be retained by the party that brought and controlled such
litigation.

     11.4 Infringement of Third Party Rights. Each party shall promptly notify
the other in writing of any allegation by a Third Party that the activity of
either of the parties pursuant to this Agreement infringes or may infringe the
intellectual property rights of such Third Party. Cypress shall have the first
right to control any defense of any such claim alleging that the sale of
Licensed Products in the Field infringes any Third Party rights in the Licensed
Territory, at its own expense and by counsel of its own choice, and Pierre Fabre
shall have the right, at its own expense, to be represented in any such action
by counsel of its own choice. If Cypress fails to proceed in a timely fashion
with regard to such defense, Pierre Fabre shall have the right to control any
such defense of such claim at its own expense and by counsel of its own choice,
and Cypress shall have the right, at its own expense, to be represented in any
such action by counsel of its own choice. Pierre Fabre shall have the first
right to control any defense of any such claim alleging that the manufacture of
API or Licensed Products infringes any Third Party rights in the Licensed
Territory, at its own expense and by counsel of its own choice, and Cypress
shall have the right, at its own expense, to be represented in any such action
by counsel of its own choice. If Pierre Fabre fails to proceed in a timely
fashion with regard to such defense, Cypress shall have the right to control any
such defense of such claim at its own expense and by counsel of its own choice,
and Pierre Fabre shall have the right, at its own expense, to be represented in
any such action by counsel of its own choice. Pierre Fabre shall have the sole
right to control any defense of any such claim alleging infringement of any
Third Party rights outside the Licensed Territory, at its own expense and by
counsel of its own choice. Neither party shall have the right to settle any
patent infringement litigation under this Section 11.4 relating to the
manufacture or commercialization of Licensed Products in the Licensed Territory
without the consent of such other party.

                                      20.

<PAGE>

12.  Representations and Warranties and Covenants

     12.1 Mutual Representations and Warranties. Each party represents and
warrants to the other that:

          (a) Power. It is duly organized and validly existing under the laws of
its jurisdiction of incorporation or formation, and has full power and authority
to enter into this Agreement and to carry out the provisions hereof.

          (b) Due Authorization. It is duly authorized to execute and deliver
this Agreement and to perform its obligations hereunder, and the person or
persons executing this Agreement on its behalf has been duly authorized to do so
by all requisite action.

          (c) Binding Agreement. This Agreement is legally binding upon it,
enforceable in accordance with its terms. The execution, delivery and
performance of this Agreement by it does not conflict with any agreement,
instrument or understanding, oral or written, to which it is a party or by which
it may be bound, nor violate any material law or regulation of any court,
governmental body or administrative or other agency having jurisdiction over it.

          (d) Grant of Rights; Maintenance of Agreements. It has not, and will
not during the License Term, grant any right to any Third Party which would
conflict with the rights granted to the other party hereunder. It has (or will
have at the time performance is due) maintained and will maintain and keep in
full force and effect all agreements (including license agreements) and filings
(including patent filings) necessary to perform its obligations hereunder.

     12.2 Pierre Fabre Representations and Warranties. Pierre Fabre represents
and warrants to Cypress that:

          (a) Ownership of Licensed Technology. Pierre Fabre owns or otherwise
has adequate rights to the Licensed Technology and has the right to grant to
Cypress the exclusive license granted under Section 2.1 hereof and such license
does not conflict with or violate the terms of any agreement between Pierre
Fabre and any Third Party.

          (b) Notice of Proceedings. Pierre Fabre has informed Cypress that to
its knowledge, there is no administrative or judicial proceedings contesting the
inventorship, ownership, validity or enforceability of any element of the
Licensed Technology.

          (c) Patent Infringement. As of the Effective Date, (i) to Pierre
Fabre's knowledge, the practice of the Licensed Technology to develop or
commercialize Licensed Product does not infringe any patents of any Third Party,
and (ii) Pierre Fabre has not received any written notice or communication
alleging that the practice of the Pierre Fabre Patents infringes or may infringe
any patent of any Third Party.

          (d) IND for Milnacipran. There are no liens or encumbrances with
respect to the IND for Milnacipran filed with the FDA in the United States.
Pierre Fabre has not received any written notice or communication indicating
that the IND for Milnacipran filed with the FDA in the United States has been or
may be terminated.

                                      21.

<PAGE>

     12.3 Pierre Fabre Covenant. During the due-diligence process carried out by
Cypress prior to the Effective Date, Pierre Fabre has disclosed to Cypress all
Pierre Fabre Know-How requested by Cypress and will continue after the Effective
Date to disclose and provide to Cypress all information in the possession of
Pierre Fabre or its Affiliates requested by Cypress, including, without
limitation, all available Information necessary or appropriate to file the
Initial IND in the United States.

13.  Confidentiality; Publication

     13.1 Confidentiality. Except to the extent expressly authorized by this
Agreement or otherwise agreed in writing by the parties, the parties agree that,
during the License Term and for [...***...] thereafter, the receiving party
shall keep confidential and shall not publish or otherwise disclose and shall
not use for any purpose other than as expressly provided for in this Agreement
any confidential information (including, without limitation, Information)
furnished to it by the other party pursuant to this Agreement (collectively,
"Confidential Information"). Each party may use such Confidential Information
only to the extent required to accomplish the purposes of this Agreement. Each
party will use at least the same standard of care as it uses to protect
proprietary or confidential information of its own to ensure that its employees,
agents, consultants and other representatives do not disclose or make any
unauthorized use of the Confidential Information. Each party will promptly
notify the other upon discovery of any unauthorized use or disclosure of the
Confidential Information.

     13.2 Exceptions. Confidential Information shall not include any information
which the receiving party can prove by competent written evidence:

          (a) is now, or hereafter becomes, through no act or failure to act on
the part of the receiving party, generally known or available;

          (b) is known by the receiving party at the time of receiving such
information, as evidenced by its records;

          (c) is hereafter furnished to the receiving party by a Third Party, as
a matter of right and without restriction on disclosure;

          (d) is independently discovered or developed by the receiving party
without the use of Confidential Information belonging to the disclosing party;
or

          (e) is the subject of a written permission to disclose provided by the
disclosing party.

     13.3 Authorized Disclosure. Each party may disclose Confidential
Information belonging to the other party to the extent such disclosure is
reasonably necessary in the following instances:

          (a) prosecuting Patents and Trademarks;

          (b) regulatory filings;

                                               *Confidential Treatment Requested

                                      22.






<PAGE>

          (c) prosecuting or defending litigation;

          (d) complying with applicable court orders or governmental
regulations; and

          (e) disclosure to Affiliates, sublicensees, employees, consultants,
agents or other Third Parties in connection with due diligence or similar
investigations by such Third Parties, in each case who agree to be bound by
similar terms of confidentiality and non-use at least equivalent in scope to
those set forth in this Section 13.

     Notwithstanding the foregoing, in the event a party is required to make a
disclosure of the other party's Confidential Information pursuant to this
Section 13.3, it will, except where impracticable, give reasonable advance
notice to the other party of such disclosure and use efforts to secure
confidential treatment of such information at least as diligent as such party
would use to protect its own confidential information, but in no event less than
reasonable efforts. In any event, the parties agree to take all reasonable
action to avoid disclosure of Confidential Information hereunder. The parties
will consult with each other on the provisions of this Agreement to be redacted
in any filings made by the parties with the Securities and Exchange Commission
or as otherwise required by law.

     13.4 Publications. Each party to this Agreement recognizes that the
publication of papers containing results of and other information regarding
development of the Licensed Product in the Field, including oral presentations
and abstracts, may be beneficial to both parties provided such publications are
subject to reasonable controls to protect Confidential Information. In
particular, it is the intent of the parties to maintain the confidentiality of
any Confidential Information included in any United States or foreign
application until such United States or foreign patent application has been
published. Accordingly, the other party shall have the right and obligation to
review and approve any paper proposed for publication by the other party,
including oral presentations and abstracts. Before any such paper is submitted
for publication, the party proposing publication shall deliver a complete copy
to the other party at least 45 days prior to submitting the paper to a
publisher. The other party shall review any such paper and give its comments to
the publishing party within 30 days of the delivery of such paper to the other
party. With respect to oral presentation materials and abstracts, the other
party shall make reasonable efforts to expedite review of such materials and
abstracts, and shall return such items as soon as practicable to the publishing
party with appropriate comments, if any, but in no event later than 30 days from
the date of delivery to the other party. The publishing party shall comply with
the other party's request to delete references to the non-publishing party's
Confidential Information in any such paper. Notwithstanding anything to the
contrary in this Agreement, neither party shall have the right to publish in any
form any Confidential Information of the other party without such other party's
prior written consent. With respect to publications of papers containing results
and other information regarding development of the Licensed Product in the Other
Indications, Pierre Fabre agrees to communicate to Cypress for its information a
copy of such documents prior to their publications.

     13.5 Publicity. It is understood that the parties intend to issue a joint
press release announcing the execution of this Agreement and agree that each
party may desire or be required to issue subsequent press releases relating to
the Agreement or activities thereunder. The parties agree to consult with each
other reasonably and in good faith with respect to the text and timing

                                      23.

<PAGE>

of such press releases prior to the issuance thereof, provided that a party may
not unreasonably withhold consent to such releases, and that either party may
issue such press releases as it determines, based on advice of counsel, are
reasonably necessary to comply with laws or regulations or for appropriate
market disclosure. Each party agrees to review each press release within 48
hours after receiving the press release from the other party. In addition,
following the initial joint press release announcing this Agreement, either
party shall be free to disclose, without the other party's prior written
consent, the existence of this Agreement, the identity of the other party and
those terms of the Agreement which have already been publicly disclosed in
accordance herewith.

14.  Term and Termination

     14.1 Term. The term of this Agreement shall commence on the Effective Date
and continue until the later of (i) the expiration of the last to expire of the
Pierre Fabre Patents or (ii) 10 years after the first commercial sale of a
Licensed Product, unless earlier terminated pursuant to Section 14.2 or 14.3
(the "License Term").

     14.2 Termination for Cause.

          (a) Termination by Either Party. A party shall have the right to
terminate this Agreement upon 90 days' prior written notice to the other upon
the occurrence of any of the following:

               (i)   Upon or after the bankruptcy, insolvency, dissolution or
winding up of the other party (other than a dissolution or winding up for the
purpose of reconstruction or amalgamation); or if a party admits in writing its
inability to pay its debts as they become due, or

               (ii)  Upon or after the breach of any material provision of this
Agreement by the other party if the breaching party has not cured such breach
within the 90 day period following written notice of termination by the
non-breaching party, or

               (iii) in the event that the IND Clearance Date does not occur
within a maximum period of eighteen months from the Effective Date.

          (b) Termination by Pierre Fabre. Pierre Fabre shall have the right to
terminate this Agreement upon 90 days prior notice to Cypress in the following
events:

               (i)   Cypress terminates at any time the development activities
of, or the subsequent marketing of the Licensed Product or withdraws the
Licensed Product from the market in any country in the Licensed Territory for
any reason and such termination or withdrawal is irrevocable; provided, that, if
such termination or withdrawal is expected to be temporary or is otherwise
subject to cure, then Cypress shall be given the ability to resume development
or marketing activities and Pierre Fabre will not have a right to terminate this
Agreement under this Section 14.2(b)(i) as long as Cypress is using commercially
reasonable efforts to cure such withdrawal or termination providing that such
period shall not exceed 12 months from the date of termination of the
development activities or withdrawal of the Licensed Product;

                                      24.

<PAGE>

               (ii)  Cypress shall challenge or contest Pierre Fabre Patents
rights;

               (iii) Upon a Change in Control (as defined in Section 16.6(b)) in
which the Third Party acquiror is developing or marketing an [...***...] in the
Field in the Licensed Territory the sale of which [...***...] would have a
significant adverse effect on the sale of Licensed Product in the Field in the
Licensed Territory within the first five years after the closing of the Change
in Control, then Pierre Fabre may terminate this Agreement upon written notice
to Cypress or its successor in interest within 30 days after the closing of the
Change in Control, with the consequences of such termination as set forth in
Sections 14.3(b)(ii), 14.4 and 14.5; or

               (iv)  Pierre Fabre exercises the option to terminate the
Agreement in case of Cypress' failure to achieve the Minimum Sales all as
indicated in Section 5.3(b).

     14.3 Effect of Expiration - Termination; Surviving Obligations.

          (a) Upon expiration of the License Term, all rights under this
Agreement shall automatically terminate, except as follows, and subject to the
provisions of Section 14.4:

               (i)   Cypress shall have the perpetual royalty free right to
continue to use Pierre Fabre Know-How in the Licensed Territory licensed under
this Agreement, as well as the unrestricted right to use Cypress Information and
Cypress Formulations;

               (ii)  Pierre Fabre shall have the perpetual right to use for the
Rest of the World (i) Cypress Information in consideration of the [...***...]
royalty to be paid until the end of the 10 year period following the first
commercial sale of the Licensed Product by Pierre Fabre in the Field, (ii)
Cypress Formulations according to the license terms agreed between Cypress and
Pierre Fabre pursuant to Section 4.2, and (iii) the unrestricted right to use
Pierre Fabre Know-How;

               (iii) Cypress' right to continue to use the Trademark shall be
governed by the Trademark License Agreement; and

               (iv)  Cypress' commitment to purchase all its requirements of API
shall be governed by the Supply Agreement.

          (b) Upon early termination of this Agreement ("Early Termination")
pursuant to Sections 14.2(a) and 14.2(b), the following shall apply:

               (i)   Early Termination by Cypress pursuant to Sections 14.2(a)
(i) and (ii), then:

                     (1) Cypress' right to continue its license under Pierre
Fabre Licensed Technology owned or acquired by Pierre Fabre prior to the
effective date of Early Termination shall survive subject to the fulfillment by
Cypress of all its financial obligations resulting from this Agreement and the
Trademark License Agreement; and

                     (2) Pierre Fabre's right to use the Cypress Information and
Formulations outside the Licensed Territory shall terminate.

                                               *Confidential Treatment Requested

                                      25.






<PAGE>

              (ii)  Early Termination by Pierre Fabre pursuant to Section
14.2(a) (except as provided in Section 14.3(b)(iii) or 14.2(b), then Cypress and
its sublicensees shall have no more rights under this Agreement and shall return
to Pierre Fabre all Licensed Technology and assign to Pierre Fabre Cypress
Information and Cypress Formulations including any rights and obligations
granted by a Third Party to Cypress on a Cypress Formulation, except that
Cypress may retain one copy for purposes of determining its obligations
hereunder. Pierre Fabre shall then have the worldwide right to use Cypress
Information in consideration of a royalty to be negotiated in good faith taking
into consideration the value of the Information generated by Cypress and the
stage of development of the Licensed Product in the Field, provided that such
royalty shall not be less than [...***...] and shall not exceed [...***...] as
indicated in Section 4.1.

              (iii) Early termination by Pierre Fabre pursuant to Section
14.2(a)(i), then any sublicenses granted under Section 2.1 shall survive the
termination of the License Term and become direct licenses from Pierre Fabre
under this Agreement.

              (iv)  Early Termination by Cypress pursuant to Section
14.2(a)(iii), then Cypress shall have no more rights under this Agreement and
shall return to Pierre Fabre all Licensed Technology.

          (c) Expiration or Early Termination of this Agreement shall not
relieve the parties of any obligation accruing prior to such expiration or
termination. Except as set forth below or elsewhere in this Agreement, the
obligations and rights of the parties under Sections 8, 10.4, 13.1, 13.2, 13.3,
14.3, 14.5, 14.6, 14.7, 14.8, 15 and 16.1 shall survive expiration or
termination of this Agreement.

          (d) \Within 30 days following the expiration or Early Termination of
this Agreement, each party shall deliver to the other party any and all
Confidential Information of the other party in its possession, except as
provided in Section 14.3 herein above.

          (e) All licenses granted under the Agreement will be deemed licenses
of rights to intellectual property for purposes of Section 365(n) of the U.S.
Bankruptcy Code and a licensee under the Agreement will retain and may fully
exercise all of its rights and elections under the US Bankruptcy Code.

     14.4 Exercise of Right to Terminate. The use by either party hereto of a
termination right provided for under this Agreement shall not give rise to the
payment of damages or any other form of compensation or relief to the other
party with respect thereto.

     14.5 Damages; Relief. Termination of this Agreement shall not preclude
either party from claiming any other damages, compensation or relief that it may
be entitled to upon such termination.

15.  Indemnification

     15.1 Indemnification.

* Confidential Treatment Requested

                                       26.

<PAGE>

          (a) Cypress hereby agrees to save, defend, indemnify and hold harmless
Pierre Fabre and its officers, directors, employees, consultants and agents from
and against any and all losses, damages, liabilities, expenses and costs,
including reasonable legal expense and attorneys' fees ("Losses"), to which
Pierre Fabre may become subject as a result of any claim, demand, action or
other proceeding by any Third Party to the extent such Losses arise directly out
of (i) the material breach by Cypress of any representation or warranty under
Section 12, or (ii) the development, manufacture, use, handling, storage, sale
or other disposition of any Licensed Product by Cypress, its Affiliates or
sublicensees, except to the extent such Losses result from the gross negligence
or willful misconduct of Pierre Fabre.

          (b) Pierre Fabre hereby agrees to save, defend, indemnify and hold
harmless Cypress and its officers, directors, employees, consultants and agents
from and against any and all Losses to which Cypress may become subject as a
result of any claim, demand, action or other proceeding by any Third Party to
the extent such Losses arise directly out of (i) the material breach by Pierre
Fabre of any representation or warranty under Section 12, (ii) the defective
Know-How or API supplied by Pierre Fabre, its Affiliates or sublicensees under
this Agreement, except to the extent such Losses result from the gross
negligence or willful misconduct of Cypress.

          (c) Except for amounts payable under Sections 4.1, 6, 7 and 13,
neither party makes any other warranties express or implied, except as set
forth herein and neither party shall be liable to the other party for special,
consequential or incidental damages in connection with this Agreement or any
license granted hereunder.

     15.2 Control of Defense. In the event a party seeks indemnification under
Section 12.1, it shall inform the other party (the "Indemnifying Party") of a
claim as soon as reasonably practicable after it receives notice of the claim,
shall permit the Indemnifying Party to assume direction and control of the
defense of the claim (including the right to settle the claim solely for
monetary consideration), and shall cooperate as requested (at the expense of the
Indemnifying Party) in the defense of the claim.

     15.3 Insurance.

          (a) During the License Term, Pierre Fabre, at its own expense, shall
maintain product liability insurance in amount consistent with industry
standards for claims and actions which might be taken against it in connection
with this Agreement. Pierre Fabre shall provide a certificate of insurance
evidencing such coverage.

          (b) During the License Term, Cypress, at its own expense, shall
maintain product liability insurance (or self-insure) in amount consistent with
industry standards for claims and actions which might be taken against it in
connection with this Agreement. Cypress shall provide a certificate of insurance
(or evidence of self-insurance) evidencing such coverage.

16.  General Provisions

     16.1 Governing Law and Venue. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of New York
excluding its conflicts of laws principles. Each party irrevocably submits to
the jurisdiction and venue of New

                                      27.


<PAGE>

York and any such court in any such action or proceeding and irrevocably waives
any objection thereto.

     16.2 Entire Agreement; Modification. This Agreement is both a final
expression of the parties' agreement and a complete and exclusive statement with
respect to all of its terms. The Exhibits referred to in this Agreement are
incorporated herein and made a part of this Agreement by this reference. This
Agreement supersedes all prior and contemporaneous agreements and
communications, whether oral, written or otherwise, concerning any and all
matters contained herein, including the License Agreement dated August 1, 2001
between Cypress and Pierre Fabre. No rights or licenses with respect to any
intellectual property of either party are granted or deemed granted hereunder or
in connection herewith, other than those rights expressly granted in this
Agreement. No trade customs, courses of dealing or courses of performance by the
parties shall be relevant to modify, supplement or explain any term(s) used in
this Agreement. This Agreement may not be modified or supplemented by any
purchase order, change order, acknowledgment, order acceptance, standard terms
of sale, invoice or the like. This Agreement may only be modified or
supplemented in a writing expressly stated for such purpose and signed by the
parties to this Agreement.

     16.3 Relationship Between the Parties. The parties' relationship, as
established by this Agreement, is solely that of independent contractors. This
Agreement does not create any partnership, joint venture or similar business
relationship between the parties. Neither party is a legal representative of the
other party, and neither party can assume or create any obligation,
representation, warranty or guarantee, express or implied, on behalf of the
other party for any purpose whatsoever.

     16.4 Non-Waiver. The failure of a party to insist upon strict performance
of any provision of this Agreement or to exercise any right arising out of this
Agreement shall neither impair that provision or right nor constitute a waiver
of that provision or right, in whole or in part, in that instance or in any
other instance. Any waiver by a party of a particular provision or right shall
be in writing, shall be as to a particular matter and, if applicable, for a
particular period of time and shall be signed by such party.

     16.5 Assignment. Except as expressly provided hereunder, neither this
Agreement nor any rights or obligations hereunder may be assigned or otherwise
transferred by either party without the prior written consent of the other party
(which consent shall not be unreasonably withheld); provided, however, that
either party may assign this Agreement and its rights and obligations hereunder
without the other party's consent in connection with the transfer or sale of all
or substantially all of the business of such party to which this Agreement
relates to a Third Party, whether by merger, sale of stock, sale of assets or
otherwise; provided, that, any assignment made by Cypress shall be made in full
compliance with the provisions of Section 16.6 "Change of Control." In the event
of such transaction, however, intellectual property rights of the acquiring
party to such transaction (if other than one of the parties to this Agreement)
shall not be included in the technology licensed hereunder. The rights and
obligations of the parties under this Agreement shall be binding upon and inure
to the benefit of the successors and permitted assigns of the parties. Any
assignment not in accordance with this Agreement shall be void.

                                      28.

<PAGE>

     16.6 Change of Control.

          (a) In the event of a proposed Change in Control (as described below),
Cypress shall provide Pierre Fabre with prior notice of at least 10 business
days of such proposed Change in Control. If Pierre Fabre reasonably determines
that the Third Party acquiror in such Change in Control is not likely to comply
with the terms of this Agreement, Pierre Fabre may request reasonable assurances
from such Third Party acquiror regarding its intent to comply with the terms of
this Agreement by providing written notice of such request within five business
days after the date of the notice from Cypress. If Pierre Fabre does not make
such request within such period, this Agreement will remain in full force and
effect. If Pierre Fabre makes such request within such period, then (a) if such
Third Party acquiror provides Pierre Fabre reasonable assurances in writing of
its intent to comply with the terms of this Agreement no later than the closing
of the Change in Control, then this Agreement will remain in full force and
effect, and (b) if such Third Party acquiror does not provide Pierre Fabre
reasonable assurances in writing of its intent to comply with the terms of this
Agreement by the closing of the Change in Control, then Pierre Fabre may
terminate this Agreement upon written notice to Cypress or its successor in
interest within 30 days after the closing of the Change in Control, with the
consequences of such termination as set forth in Sections 14.3(b)(ii), 14.4 and
14.5.

          (b) As used herein, "Change in Control" means (i) a sale, lease or
other disposition of all or substantially all of the assets of Cypress; (ii) a
merger or consolidation of Cypress in which the holders of Cypress' outstanding
voting stock immediately prior to such transaction own, immediately after such
transaction, securities representing less than 50% of the voting power of
Cypress or Cypress' parent or, if Cypress is not the surviving entity, any other
entity surviving such transaction or the surviving entity's parent; or (iii) an
acquisition by any person, entity or group within the meaning of Section 13(d)
or 14(d) of the Securities and Exchange Act of 1934, as amended (the "Exchange
Act"), or any comparable successor provisions (excluding any employee benefit
plan, or related trust, sponsored or maintained by Cypress or any entity
controlled by Cypress) of the beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act, or comparable successor rule) of
securities of Cypress representing at least 50% of the combined voting power
entitled to vote in the election of Directors; provided, however, that clause
(ii) of this Section 16.6(b) shall not apply to a merger effected exclusively
for the purpose of changing the domicile of Cypress or the name of Cypress.

     16.7 No Third Party Beneficiaries. This Agreement is neither expressly nor
impliedly made for the benefit of any party other than those executing it.

     16.8 Severability. If, for any reason, any part of this Agreement is
adjudicated invalid, unenforceable or illegal by a court of competent
jurisdiction, such adjudication shall not affect or impair, in whole or in part,
the validity, enforceability or legality of any remaining portions of this
Agreement. All remaining portions shall remain in full force and effect as if
the original Agreement had been executed without the invalidated, unenforceable
or illegal part.

     16.9 Notices. Any notice to be given under this Agreement must be in
writing and delivered either in person, by any method of mail (postage prepaid)
requiring return receipt, or by overnight courier or facsimile confirmed
thereafter by any of the foregoing, to the party to be

                                      29.

<PAGE>

notified at its address(es) given below, or at any address such party has
previously designated by prior written notice to the other. Notice shall be
deemed sufficiently given for all purposes upon the earlier of: (a) the date of
actual receipt; (b) if mailed, three calendar days after the date of postmark;
or (c) if delivered by overnight courier or by facsimile, the next business day
the overnight courier regularly makes deliveries or on the day after the
facsimile has been sent.

     If to the Pierre Fabre, notices must be addressed to:

                                    Pierre Fabre Medicament
                                    45, place Abel-Gance
                                    92654 Boulogne cedex
                                    France
                                    Attention: Christophe R. Jean
                                    Telephone: [...***...]
                                    Facsimile: (33) 1 49 10 01 44

                     with a copy to:

                                    Pierre Fabre Medicament
                                    La Chartreuse I
                                    81106 Castres, Cedex
                                    France
                                    Attention: General Counsel
                                    Telephone: [...***...]
                                    Facsimile: (05) 63 71 39 90

     If to Cypress, notices must be addressed to:

                                    Cypress Bioscience, Inc.
                                    4350 Executive Drive, Suite 325
                                    San Diego, CA 92121
                                    Attention:  Jay D. Kranzler
                                    Telephone: (858) 452-2323
                                    Facsimile: (858) 452-1222

                     with a copy to:

                                    Cooley Godward LLP
                                    4401 Eastgate Mall
                                    San Diego, CA  92121
                                    Attention: Kay Chandler
                                    Telephone: (858) 550-6000
                                    Facsimile: (858) 550-6420

     16.10 Force Majeure. Except for the obligation to make payment when due,
each party shall be excused from liability for the failure or delay in
performance of any obligation under this Agreement by reason of any event beyond
such party's reasonable control including but not limited to Acts of God, fire,
flood, explosion, earthquake, or other natural forces, war, civil

                                               *Confidential Treatment Requested

                                      30.

<PAGE>

unrest, accident, destruction or other casualty, any lack or failure of
transportation facilities, any lack or failure of supply of raw materials, any
strike or labor disturbance, or any other event similar to those enumerated
above. Such excuse from liability shall be effective only to the extent and
duration of the event(s) causing the failure or delay in performance and
provided that the party has not caused such event(s) to occur. Notice of a
party's failure or delay in performance due to force majeure must be given to
the other party within 10 calendar days after its occurrence. All delivery dates
under this Agreement that have been affected by force majeure shall be tolled
for the duration of such force majeure. In no event shall any party be required
to prevent or settle any labor disturbance or dispute. Notwithstanding the
foregoing, should the event(s) of force majeure suffered by a party extend
beyond a three month period, the other party may then terminate this Agreement
by written notice to the non-performing party, with the consequences of such
termination as set forth in Sections 14.3, 14.4 and 14.5.

     16.11 Legal Fees. If any party to this Agreement resorts to any legal
action or arbitration in connection with this Agreement, the prevailing party
shall be entitled to recover reasonable fees of attorneys and other
professionals in addition to all court costs and arbitrator's fees which that
party may incur as a result.

     16.12 Interpretation.

           (a) Captions & Headings. The captions and headings of clauses
contained in this Agreement preceding the text of the articles, sections,
subsections and paragraphs hereof are inserted solely for convenience and ease
of reference only and shall not constitute any part of this Agreement, or have
any effect on its interpretation or construction.

           (b) Singular & Plural. All references in this Agreement to the
singular shall include the plural where applicable, and all references to gender
shall include both genders and the neuter.

           (c) Articles, Sections & Subsections. Unless otherwise specified,
references in this Agreement to any article shall include all sections,
subsections, and paragraphs in such article; references in this Agreement to any
section shall include all subsections and paragraphs in such sections; and
references in this Agreement to any subsection shall include all paragraphs in
such subsection.

           (d) Days. All references to days in this Agreement shall mean
calendar days, unless otherwise specified.

           (e) Ambiguities. Ambiguities and uncertainties in this Agreement, if
any, shall not be interpreted against either party, irrespective of which party
may be deemed to have caused the ambiguity or uncertainty to exist.

     16.13 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original document, and all of
which, together with this writing, shall be deemed one instrument.

                                      31.

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement.

Pierre Fabre Medicament               Cypress Bioscience, Inc.

By: /s/ Christophe R. Jean                By: /s/ John N. Bonfiglio
    ----------------------------------        ----------------------------------

Name: Christophe R. Jean                  Name: John N. Bonfiglio
      --------------------------------          --------------------------------

Title: President and CEO                  Title: COO and EVP
       -------------------------------           -------------------------------

                  Signature Page to Restated Licence Agreement

                                      32.

<PAGE>

                                    EXHIBIT A

                              Pierre Fabre Know-How

[...***...]


                                               *Confidential Treatment Requested

                                      33.

<PAGE>

                                    EXHIBIT B

                          Patents held by Pierre Fabre

I(degree)- US Patents

Base Patent (active principle)

     Ref. US 4 478 836
       Applied June 22, 1982
       Granted October 23, 1984
       Terminates on May 22, 2002

Process Patent

     Ref: US 5 034 541
       Applied December 27, 1989
       Granted June 23, 1991
       Terminates on December 27, 2009

S.R. Formulation

     Ref:  09/254 014
       Applied August 26, 1997
       In process
Expected termination date of 2017

II(degree)- Canadian Patents

Milnacipran Patent

     Ref: n(degree)405 651
       Applied: June 22, 1982
       Granted April 1, 1986 n(degree)1 202 639
       Terminates: April 1, 2003

Process Patent

     Ref: n(degree)507 320
       Applied: April 23, 1986
       Granted March 3, 1990 n(degree)1 266 486
       Terminates: March 6, 2007

     Ref: n(degree)2 006 464
       Applied: December 21, 1989
       Terminates: December 21, 2009

SR Formulation Patent

                                      34.

<PAGE>

    French patent n(degree)96 10528 applied on August 28, 1996
    PCT extension to Canada : August 26, 1997
    terminates on August 26, 2017

                                      35.

<PAGE>

                                    EXHIBIT C

[...***...]

                                               *Confidential Treatment Requested

                                      36.

<PAGE>

FLOW CHART

[...***...]

                                               *Confidential Treatment Requested

                                      37.

<PAGE>

[...***...]

                                               *Confidential Treatment Requested

                                      38.

<PAGE>

                                    EXHIBIT D

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

                      STANDARD OPERATING PROCEDURE FOR USE
                                     BETWEEN
                       CYPRESS AND PIERRE FABRE MEDICAMENT
                            FOR TRANSMISSION OF DATA

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

The aim of this standard operating procedure is to allow the best possible
conditions for the transmission of data concerning tolerance and safety of the
Licensed Product, between CYPRESS and PIERRE FABRE MEDICAMENT.

However, the procedure detailed herein does not take into account the decisions
that might arise consequent to any exchange of information which could involve
other structures than pharmacovigilance services.

This procedure only concerns the modalities of transmission directly between the
pharmacovigilance services of both parties, whether in the context of clinical
trials or in the context of drug marketing. It is not the aim of this procedure
to describe the modalities for collecting or transmitting information inside the
firms which are already defined by domestic operating procedures.

I - DEFINITIONS

1.1. Adverse Event ("AE")

An Adverse Event is any undesirable event temporarily or otherwise occurring to
a subject, associated with administration of the Licensed Product regardless if
the event is considered causally related to the use of the Product.

In case of clinical trials, no distinction will be made between the Licensed
Product and a comparative drug for reporting purposes.

Adverse Events may occur in the use of the Licensed Product in clinical studies,
in professional practice, from overdoses (whether accidental or intentional)
from abuse or from withdrawal of the Licensed Product or otherwise.

1.2. Serious Adverse Event ("SAE")

A Serious Adverse Event includes, but is not limited to, any Adverse Event that
is fatal, life threatening, disabling or requires in-patient hospitalization or
prolongation of hospitalization. In addition, congenital anomaly, occurrence of
malignancy and the result of an overdose, are considered Serious Adverse Events.

1.3. Unexpected Adverse Event ("UAE")

                                      39.

<PAGE>

An Unexpected Adverse Event is an Adverse Event that is not listed in the
current investigator's brochure in the IND phase and/or in the current
international data sheet in the NDA phase.

In the NDA phase, Unexpected Adverse Events also include:

       . an increase in frequency of an event already listed,
       . an increase in severity or pathological progression of an event already
         listed,
       . a more precise description of events already listed.

1.4. Adverse Drug Reaction ("ADR")

An Adverse Drug Reaction is an Adverse Event suspected or confirmed to be caused
by the Licensed Product. Injuries by overdosing, abuse, dependence and/or
interactions with other medicinal products should also be considered as Adverse
Drug Reactions.

A Serious Adverse Drug Reaction is an Adverse Drug Reaction that fulfils the
definition of seriousness as provided in Paragraph 1.2. hereof.

1.5. Imputability

Imputability is the evaluation of the degree of direct relation between an
Adverse Event and the Licensed Product. When a treatment combines several
medicinal products, the analysis of imputability first concerns the treatment as
a whole and then each of its components separately.

II -   TRANSMISSION IN THE CONTEXT OF CLINICAL TRIALS (WHATEVER THE PHASE: I,
       II, III, IV)

2.1. Assessment of tolerability

Clinical trials are usually designed to assess the benefit / risk ratio or the
tolerance of a drug. All Adverse Events will be recorded on case report forms
provided for the study. Assessment of causal relationship will be based on
pooled data from several studies.

However, the Serious Adverse Events imply a particular transmission and the
investigator will be requested to assess the causal relationship to the Product
being tested for each Serious Adverse Event.

2.2. Modalities of transmission of Serious Adverse Events

       2.2.1. From study monitor to pharmacovigilance services

       Each party must have comprehensive internal Standard Operating
       Procedures, defining the internal circulation of data concerning
       pharmacovigilance.

<PAGE>

       The dictionary used is the most recently revised edition of the WHO
       terminology dictionary.

       2.2.2. Between the pharmacovigilance services

       As soon as received, the pharmacovigilance service sends the S.A.E. data
       to the other party via fax transmission using the reporting form defined
       in Appendix I, page 1 or a similar document. This fax transmission is
       performed according to the conditions of transmission referred to in
       Paragraph 2.2.1. above, to guarantee confidentiality.

       Subsequently, the pharmacovigilance service will upon receipt, send
       additional information, using the reporting form defined in Appendix I,
       page 2 or a similar document.

       Upon request of either party, the pharmacovigilance service shall also
       send all available additional data obtained, if any, on the type of
       Adverse Event described in the above mentioned documents.

       All Serious Adverse Events regarding the Licensed Product, regardless of
       relationship, will be transmitted between CYPRESS and PIERRE FABRE
       MEDICAMENT.


III -  TRANSMISSION IN THE CONTEXT OF DRUG MARKETING (EXCEPT PHASE IV TRIALS)

Procedures concerning Adverse Drug Reactions whether spontaneously notified by
prescribers to either party, transmitted by official pharmacovigilance services
or described in literature.

Adverse Drug Reactions, whatever the imputability might be, are subject to
transmission.

3.1. Frequency in transmitting Adverse Drug Reactions

ADRs are transmitted in a semestrial summary report that can coincide with the
dates of transmission determined by the respective national Authorities, all in
accordance with the regulatory provisions in force in the respective countries
concerned.

All information between the parties will be sent in English, using the standard
reporting forms.

On the basis of this report, each party, upon request, may receive communication
of available additional data, if any, from the pharmacovigilance services which
issued the summary report.

Whenever necessary, the summary report can be issued or exchanged on a more
frequent basis than annually, or even lead to technical meetings, subject to
agreement between the parties.

As far as published Adverse Drug Reactions are concerned, the transmission is
performed by sending the publication to the respective party by the other
pharmacovigilance service, as soon as it is aware of the A.D.R. publication.

<PAGE>

3.2. Transmission of Serious Adverse Drug Reactions

Serious Adverse Drug Reactions, whatever the imputability might be, are subject
to the same specific transmission procedure described in Paragraph 2.2.2. for
Serious Adverse Events in clinical trials.

However, the primary transmission is made by telefax using the reporting form
defined in Appendix II (Suspect Adverse Reaction Report) - or a similar
document.

At any time, Serious Adverse Drug Reactions may lead to a technical meeting of
the concerned pharmacovigilance services.


IV - REPORTING FORMS USED

The forms to be used by CYPRESS and PIERRE FABRE MEDICAMENT are exhibited
hereto:

Appendix I:  Serious Adverse Event in clinical trial (page 1 and 2),

Appendix II: Suspect Adverse Reaction Report (page 1 and 2).