Exhibit 10.28


FIRST AMENDMENT


THIS FIRST
AMENDMENT (the “Amendment”) is made and entered into as of September 6, 2006,
by and between CA-PARK PLAZA LIMITED
PARTNERSHIP, a Delaware limited partnership (“Landlord”) and CYPRESS
BIOSCIENCE, INC., a Delaware corporation (“Tenant”).


RECITALS


A.            Landlord (as successor by conversion to EOP-Park
Plaza, L.L.C., a Delaware limited liability company) and Tenant are parties to
that certain lease dated July 10, 2002 (the “Lease”).  Pursuant to the Lease, Landlord has leased to
Tenant space currently containing approximately 5,673 rentable square feet, 4,791 of which is usable space
(the “Premises”) described as Suite No. 325
on the 3rd floor of
the building commonly known as Park Plaza located at 4350 Executive Drive, San
Diego, California (the “Building”).


B.            The Lease by its terms shall expire on July 31,
2007 (“Prior Termination Date”), and the
parties desire to extend the Term of the Lease, all on the following terms and
conditions.


NOW,
THEREFORE, in
consideration of the above recitals which by this reference are incorporated
herein, the mutual covenants and conditions contained herein and other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Landlord and Tenant agree as follows:


1.             Remeasurement of Premises and the
Building.  Landlord and Tenant acknowledge and
agree that Landlord has remeasured Premises and that, according to such
remeasurement, the rentable square footage of the Premises as of the Extension
Date (as hereinafter defined) is 5,673 square
feet, 4,791 of which is usable space and
the Rentable Square Footage of the Building is 73,061 square feet.  For
the period prior to the Extension Date, the rentable area of the Premises and
the Building shall remain as set forth in the Lease and Tenant’s Pro Rata Share
shall not change.  However, commencing on
the Extension Date and continuing throughout the Extended Term (as hereinafter
defined), the rentable area of the Premises, the Building and Tenant’s Pro Rata
Share for the Premises shall be adjusted to reflect such remeasurement.  Tenant and Landlord shall have no further
right to remeasure the Premises during the Extended Term.


2.             Extension.  The Term of the Lease is hereby
extended and shall expire on July 31, 2012, 
(“Extended Termination Date”), unless
sooner terminated in accordance with the terms of the Lease.  That portion of the Term commencing the day
immediately following the Prior Termination Date (“Extension
Date”) and ending on the Extended Termination Date shall be referred
to herein as the “Extended Term”.


3.             Base Rent.  As of the Extension Date, the
schedule of Base Rent payable with respect to the Premises during the Extended
Term is the following:


	
  Months of Term or

  Period

  	
   

  	
  Annual Rate Per Square

  Foot

  	
   

  	
  Monthly Base Rent

  	
   

  
	
  8/01/07-7/31/08

  	
   

  	
   

  	
  $

  	
  33.00

  	
   

  	
  $

  	
  15,600.75

  	
   

  
	
  8/01/08-7/31/09

  	
   

  	
   

  	
  $

  	
  34.20

  	
   

  	
  $

  	
  16,168.05

  	
   

  
	
  8/01/09-7/31/10

  	
   

  	
   

  	
  $

  	
  35.40

  	
   

  	
  $

  	
  16,735.35

  	
   

  
	
  8/01/10-7/31/11

  	
   

  	
   

  	
  $

  	
  36.60

  	
   

  	
  $

  	
  17,302.65

  	
   

  
	
  8/01/11-7/31/12

  	
   

  	
   

  	
  $

  	
  37.80

  	
   

  	
  $

  	
  17,869.95

  	
   

  



 


All such Base Rent shall be payable by Tenant in accordance with the
terms of the Lease.


4.     Additional Security Deposit.  No
additional security deposit shall be required in connection with this
Amendment. Effective as of the Extension Date and subject to the remaining terms
of Article VI, and provided: (i) Tenant has timely paid all Rent due under this
Lease during the 12 month period immediately preceding the effective date of
any reduction of the Security Deposit, (ii) Tenant’s financial condition is
equal to or greater than its financial condition as of August 3, 2006; (iii)
Tenant is not in default under the Lease; and (iv) Tenant is in 100% occupancy
of the Premises, Tenant shall have the right to reduce the amount of the
Security Deposit so that the new Security Deposit amount will be reduced from $31,462.42 to $20,000.00 effective as of
August 1, 2007.  If Tenant is not
entitled to reduce the Security Deposit as of the reduction effective date due
to Tenant’s 



 1
 








failure to satisfy the conditions set forth herein or in the Lease,
Tenant shall not have the right to reduce the Security Deposit.  Notwithstanding anything to the contrary
contained herein, if Tenant has been in Default under the Lease at any time
prior to the effective date of any reduction of the Security Deposit and Tenant
has failed to cure such default within any applicable cure period, then Tenant
shall have no further right to reduce the amount of the Security Deposit as
described herein.


If Tenant is entitled to a reduction in the Security Deposit, Tenant
shall provide Landlord with written notice requesting that the Security Deposit
be reduced as provided above (the “Reduction Notice”).  If Tenant provides Landlord with a Reduction
Notice, and Tenant is entitled to reduce the Security Deposit as provided
herein, Landlord shall refund the applicable portion of the Security Deposit to
Tenant within 45 days after the later to occur of (a) Landlord’s receipt of the
Reduction Notice, or (b) the date upon which Tenant is entitled to a reduction
in the Security Deposit as provided above.


5.             Tenant’s Pro Rata Share.  For the period commencing on the Extension Date
and ending on the Extended Termination Date, Tenant’s Pro Rata Share for the
Premises is 7.7647%.


6.             Expenses and Taxes.  For the
period commencing on the Extension Date and ending on the Extended Termination
Date, Tenant shall pay for Tenant’s Pro Rata Share of Expenses and Taxes in
accordance with the terms of the Lease, provided, however, during such period,
the Base Year for the computation of Tenant’s Pro Rata Share of Expenses and
Taxes is amended from 2002 to 2007. Notwithstanding the foregoing, Tenant shall
not be obligated to pay Tenants’ Pro Rata Share of Expense Excess or Tax Excess
for the period commencing August 1, 2007 and ending July 31, 2008.


7.             Improvements to Premises.


7.01.        Condition of Premises.  Tenant
is in possession of the Premises and accepts the same “as is” without any
agreements, representations, understandings or obligations on the part of
Landlord to perform any alterations, repairs or improvements, except as may be
expressly provided otherwise in this Amendment or the Lease.


7.02.        Responsibility for Improvements
to Premises.  Landlord shall perform improvements to the
Premises in accordance with the Work Letter attached hereto as Exhibit A.


8.             Other Pertinent Provisions.  Landlord
and Tenant agree that, effective as of the date of this Amendment (unless
different effective date(s) is/are specifically referenced in this Section),
the Lease shall be amended in the following additional respects:


8.01.        Conference Facility.  Landlord
currently provides a conference facility (the “Conference Facility”) located
within the Equity Office San Diego portfolio of buildings, accommodating groups
of people for use by building tenants (including Tenant) on a reserved
basis.  In the event Tenant desires to
utilize the Conference Facility, Tenant shall call (800) 430-7715 in advance,
prior to the date on which Tenant desires to utilize such Conference Facility.
The reservations are on a first come first served basis and are subject to the
prevailing market rate. Landlord, in Landlord’s sole and absolute discretion,
may discontinue to provide for the Conference Facility at any time.


8.02.        Deleted Provisions.  Effective
as of the Extension Date, the Acceleration Option and the Right of First Offer
set forth in Sections I & II of Exhibit E. of the Lease shall be deleted in
their entirety and of no further force or effect.


8.03.        Renewal Option. The Renewal Option set forth in Exhibit E,
Section III of the Lease shall apply to this Amendment and shall remain in full
force and effect and the term “Termination Date” shall be replaced with the
term “Extended Termination Date”.


8.04.        Parking.  During
the Extended Term, Tenant shall maintain its existing parking rights as set
forth in the Lease.


9.             Miscellaneous.


9.01.        This Amendment and the attached exhibits,
which are hereby incorporated into and made a part of this Amendment, set forth the entire agreement between the 



 2
 








parties
with respect to the matters set forth herein. 
There have been no additional oral or written representations or
agreements.  Under no circumstances shall
Tenant be entitled to any Rent abatement, improvement allowance, leasehold
improvements, or other work to the Premises, or any similar economic incentives
that may have been provided Tenant in connection with entering into the Lease,
unless specifically set forth in this Amendment. Tenant agrees that neither Tenant nor its agents or any other
parties acting on behalf of Tenant shall disclose any matters set forth
in this Amendment or disseminate or distribute any information concerning the
terms, details or conditions hereof to any person, firm or entity without
obtaining the express written consent of Landlord.


9.02.        Except as herein modified or amended, the
provisions, conditions and terms of the Lease shall remain unchanged and in
full force and effect.


9.03.        In the case of any inconsistency between the
provisions of the Lease and this Amendment, the provisions of this Amendment shall
govern and control.


9.04.        Submission of this Amendment by Landlord is not
an offer to enter into this Amendment but rather is a solicitation for such an
offer by Tenant.  Landlord shall not be
bound by this Amendment until Landlord has executed and delivered the same to
Tenant.


9.05.        The capitalized terms used in this Amendment
shall have the same definitions as set forth in the Lease to the extent that
such capitalized terms are defined therein and not redefined in this Amendment.


9.06.        Tenant hereby represents to Landlord that Tenant
has dealt with no broker other than IPC Commercial Real Estate in connection
with this Amendment.  Tenant agrees to
indemnify and hold Landlord, its members, principals, beneficiaries, partners,
officers, directors, employees, mortgagee(s) and agents, and the respective
principals and members of any such agents (collectively, the “Landlord Related Parties”) harmless from all claims of any
brokers claiming to have represented Tenant in connection with this
Amendment.  Landlord hereby represents to
Tenant that Landlord has dealt with no broker other than IPC Commercial Real
Estate in connection with this Amendment. 
Landlord agrees to indemnify and hold Tenant, its members, principals, beneficiaries,
partners, officers, directors, employees, and agents, and the respective
principals and members of any such agents (collectively, the “Tenant Related Parties”) harmless from all claims of any
brokers claiming to have represented Landlord in connection with this
Amendment.


Equity Office
Properties Management Corp. (“EOPMC”) is an affiliate of Landlord and
represents only the Landlord in this transaction.  Any assistance rendered by any agent or
employee of EOPMC in connection with this Amendment or any subsequent amendment
or modification hereto has been or will be made as an accommodation to Tenant
solely in furtherance of consummating the transaction on behalf of Landlord,
and not as agent for Tenant.


9.07.        Each signatory of this Amendment represents
hereby that he or she has the authority to execute and deliver the same on
behalf of the party hereto for which such signatory is acting.


[SIGNATURES ARE ON FOLLOWING
PAGE]



 3
 








IN WITNESS WHEREOF,
Landlord and Tenant have duly executed this Amendment as of the day and year
first above written.


	
  

  	
  LANDLORD:

  
	
   

  	
   

  	
   

  
	
   

  	
  CA-PARK PLAZA LIMITED PARTNERSHIP, a

  Delaware limited partnership

  
	
   

  	
   

  
	
   

  	
  By:

  	
  EOM GP, L.L.C., a Delaware limited liability 

  
	
   

  	
  company, its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Equity Office Management, L.L.C., a 

  Delaware limited liability company, its non-

  member manager

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Frank R. Campbell

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Frank Campbell

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
  CYPRESS BIOSCIENCE, INC., a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sabrina Johnson

  	
   

  
	
   

  	
  Name:

  	
  Sabrina Johnson

  	
   

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  	
   

  
											



 



 4















EXHIBIT A


WORK LETTER


This Exhibit is attached to and
made a part of the Amendment by and between CA-PARK
PLAZA LIMITED PARTNERSHIP, a Delaware limited partnership (“Landlord”) and CYPRESS BIOSCIENCE, INC., a Delaware corporation (“Tenant”) for space in the Building located at 4350 Executive Drive, San Diego, California.


As used in this
Work Letter, the “Premises” shall be deemed to mean the Premises, as initially
defined in the attached Amendment.


1.                                       This
Work Letter shall set forth the obligations of Landlord and Tenant with respect
to the improvements to be performed in the Premises for Tenant’s use.  All improvements described in this Work
Letter to be constructed in and upon the Premises by Landlord are hereinafter
referred to as the “Landlord Work.”   It
is agreed that construction of the Landlord Work will be completed at Tenant’s
sole cost and expense, subject to the Allowance (as defined below).  Landlord shall enter into a direct contract
for the Landlord Work with a general contractor selected by Landlord.  In addition, Landlord shall have the right to
select and/or approve of any subcontractors used in connection with the
Landlord Work.  Landlord shall be
entitled to deduct a construction management fee for Landlord’s oversight of
the Landlord Work in an amount equal to 3% of the total cost of the Allowance,
as defined in Section 7.


2.                                       Tenant
shall be solely responsible for the timely preparation and submission to
Landlord of the final architectural, electrical and mechanical construction
drawings, plans and specifications (called “Plans”) necessary to construct the
Landlord Work, which plans shall be subject to approval by Landlord and
Landlord’s architect and engineers and shall comply with their requirements to
avoid aesthetic or other conflicts with the design and function of the balance
of the Building.  Tenant shall be
responsible for all elements of the design of Tenant’s plans (including,
without limitation, compliance with law, functionality of design, the
structural integrity of the design, the configuration of the Premises and the
placement of Tenant’s furniture, appliances and equipment), and Landlord’s
approval of Tenant’s plans shall in no event relieve Tenant of the
responsibility for such design.  If
requested by Tenant, Landlord’s architect will prepare the Plans necessary for
such construction at Tenant’s cost. 
Whether or not the layout and Plans are prepared with the help (in whole
or in part) of Landlord’s architect, Tenant agrees to remain solely responsible
for the timely preparation and submission of the Plans and for all elements of
the design of such Plans and for all costs related thereto.  Tenant has assured itself by direct
communication with the architect and engineers (Landlord’s or its own, as the
case may be) that the final approved Plans can be delivered to Landlord on or
before January 15, 2007 (the “Plans
Due Date”), provided that Tenant promptly furnishes complete information
concerning its requirements to said architect and engineers as and when
requested by them.  Tenant covenants and
agrees to cause said final, approved Plans to be delivered to Landlord on or
before said Plans Due Date and to devote such time as may be necessary in
consultation with said architect and engineers to enable them to complete and
submit the Plans within the required time limit.  Time is of the essence in respect of
preparation and submission of Plans by Tenant. 
If the Plans are not fully completed and approved by the Plans Due Date,
Tenant shall be responsible for one day of Tenant delay for each day during the
period beginning on the day following the Plans Due Date and ending on the date
completed Plans are approved.  (The word “architect”
as used in this Exhibit shall include an interior designer or space planner.)


3.                                       Landlord,
prior to commencing any construction of Landlord Work and within 60 days of
receiving the Plans, shall submit to Tenant a written estimate setting forth
the anticipated cost of the Landlord Work, including but not limited to labor
and materials, contractor’s fees and permit fees (the “Estimate’).  Within 3 Business Days thereafter, Tenant
shall either notify Landlord in writing of its approval of the Estimate, or
specify its objections thereto and any desired changes to the proposed Landlord
Work. Tenant, with Landlord’s reasonable approval, shall be allowed to
prioritize the various items comprising the Landlord Work and Tenant shall not
be required to authorize Landlord Work that would exceed the Allowance. Tenant
acknowledges that any amounts included in the Estimate in excess of the
Allowance shall be due and payable by Tenant. 
If Tenant notifies Landlord of such objections and desired changes to
the proposed Landlord Work, Tenant shall work with Landlord to reach a mutually
acceptable 



 1
 








alternative cost
estimate. Before commencing the Landlord Work, a final estimate (the “Final
Estimate”) shall be agreed upon by Tenant and Landlord and to the extent the
Final Estimate exceeds the Allowance, the Final Estimate shall specify the
costs payable by Tenant and Tenant shall pay to Landlord such costs, plus any
applicable state sales or use tax thereon, upon demand. The Final
Estimate does not include Excess Costs, as defined below.


4.                                       If
Landlord’s Final Estimate and/or the actual cost of construction shall exceed
the Allowance, if any (such amounts exceeding the Allowance being herein
referred to as the “Excess Costs”), Tenant shall pay to Landlord such Excess
Costs, plus any applicable state sales or use tax thereon, upon demand. The
statements of costs submitted to Landlord by Landlord’s contractors shall be
conclusive for purposes of determining the actual cost of the items described
therein.  The amounts payable by Tenant
hereunder constitute Rent payable pursuant to the Lease, and the failure to
timely pay same constitutes an event of default under the Lease.  Notwithstanding the foregoing, the parties
acknowledge that if there are no additional changes to the scope of the
Landlord Work, Landlord’s Final Estimate shall remain firm for 45 days of date
of such estimate.  The parties further
acknowledge and agree that if Landlord commences the Landlord Work within such
45 day period that Tenant shall not be responsible for any Excess Costs unless
Tenant requests for any change orders to the scope of the Landlord Work.  If Tenant requests for any change orders to
the scope of the Landlord Work after the 45 day period, all Excess Costs, if
any, shall be born by Tenant in accordance with this Exhibit.


5.                                       If
Tenant shall request any change, addition or alteration in any of the Plans
after approval by Landlord, Landlord shall have such revisions to the drawings
prepared, and Tenant shall reimburse Landlord for the cost thereof, plus any
applicable state sales or use tax thereon, upon demand.  Promptly upon completion of the revisions,
Landlord shall notify Tenant in writing of the increased cost which will be
chargeable to Tenant by reason of such change, addition or deletion. Tenant,
within, one Business Day, shall notify Landlord in writing whether it desires
to proceed with such change, addition or deletion. In the absence of such
written authorization, Landlord shall have the option to continue work on the
Premises disregarding the requested change, addition or alteration, or Landlord
may elect to discontinue work on the Premises until it receives notice of
Tenant’s decision, in which event Tenant shall be responsible for any Tenant
delay in completion of the Premises resulting therefrom. If such revisions
result in a higher estimate of the cost of construction and/or higher actual
construction costs which exceed the Allowance, such increased estimate or costs
shall be deemed Excess Costs pursuant to Paragraph 4 hereof and Tenant
shall pay such Excess Costs, plus any applicable state sales or use tax
thereon, upon demand.


6.                                       Following
approval of the Plans and the payment by Tenant of the required portion of the
Excess Costs, if any, Landlord shall cause the Landlord Work to be constructed
substantially in accordance with the approved Plans.  Landlord shall notify Tenant of substantial
completion of the Landlord Work.


7.                                       Landlord,
provided Tenant is not in default, agrees to provide Tenant with an allowance
(the “Allowance”) in an amount not to exceed $39,711.00 (i.e., $7.00 per
rentable square foot of the Premises) to be applied toward the cost of the
Landlord Work in the Premises.  If the
Allowance shall not be sufficient to complete the Landlord Work, Tenant shall
pay the Excess Costs, plus any applicable state sales or use tax thereon, as
prescribed in Paragraph 4 above. 
Any portion of the Allowance which exceeds the cost of the Landlord Work
or is otherwise remaining after December 15, 2007 shall accrue to the sole
benefit of Landlord, it being agreed that Tenant shall not be entitled to any
credit, offset, abatement or payment with respect thereto.  Notwithstanding the foregoing, Tenant may use
the Allowance pending full execution of this Amendment in the year 2006 or
2007.


9.                                       Tenant
acknowledges that the Landlord Work may be performed by Landlord in the
Premises during Normal Business Hours (defined as 7:00 a.m. to 6:00 p.m. on
Business Days and 9:00 a.m. to 1:00 p.m. on Saturdays) subsequent to the Extension Date.  Landlord and Tenant
agree to cooperate with each other in order to enable the Landlord Work to be
performed in a timely manner and with as little inconvenience to the operation
of Tenant’s business as is reasonably possible. Landlord, Tenant and the general contractor shall
cooperatively prepare a construction schedule that allows the the Landlord Work
to be: i) performed in a timely manner; ii) performed as reasonably possible on
Fridays, Saturdays and Sundays, and; iii) performed with as little
inconvenience to the operation of Tenant’s business as is reasonably possible.



 2
 








Notwithstanding anything
herein to the contrary, any delay in the completion of the Landlord Work or
inconvenience suffered by Tenant during the performance of the Landlord Work
shall not delay the Extension Date nor shall it subject Landlord to any liability
for any loss or damage resulting therefrom or entitle Tenant to any credit,
abatement or adjustment of Rent or other sums payable under the Lease.


10.                                 This
Exhibit shall not be deemed applicable to any additional space added to the
Premises at any time or from time to time, whether by any options under the
Lease or otherwise, or to any portion of the original Premises or any additions
to the Premises in the event of a renewal or extension of the original Term of
the Lease, whether by any options under the Lease or otherwise, unless
expressly so provided in the Lease or any amendment or supplement to the Lease.



 3