EXHIBIT 10.31
                                                                   -------------

          CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT,
        MARKED BY BRACKETS AND ASTERISKS, IS FILED WITH THE SECRETARY OF
        THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF
                 THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED



                                    MAY, 1996






                               CIBA-GEIGY Limited


                                       and


                       SYNAPTIC PHARMACEUTICAL CORPORATION








                          RESEARCH & LICENSE AGREEMENT

                                concerning [***]


















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                                            RESEARCH AND LICENSE AGREEMENT


THIS AGREEMENT is made as of the day of May, 1996 between: CIBA-GEIGY Limited, a
Swiss corporation having its principal place of business at Klybeckstrasse  141,
CH-4002  Basel,  Switzerland  (hereinafter  referred  to as  "CIBA-GEIGY"),  and
SYNAPTIC PHARMACEUTICAL CORPORATION, a Delaware corporation having its principal
place of business at 215  College  Road,  Paramus,  New Jersey  07652-1410,  USA
(hereinafter referred to as "SYNAPTIC").


RECITALS

(A)      Pursuant to a Research and License  Agreement  made between the parties
         hereto and dated as of the 4th  August,  1994  ("the  1994  Agreement")
         CIBA-GEIGY and SYNAPTIC have been collaborating in a research programme
         (the "PP Project")  directed to discovering  and  developing  compounds
         useful for  treating  obesity and eating  disorders  starting  with the
         modulation of PP Receptors.

(B)      Due to progress  made in the PP Project,  CIBA-GEIGY  and  SYNAPTIC are
         interested  in  collaborating  in an additional  research  programme to
         discover and develop compounds which, [***] are also useful in treating
         obesity and eating disorders, as well as other metabolic disorders, and
         in connection  therewith,  desire to reallocate  between the PP Project
         and the new research programme SYNAPTIC scientists originally dedicated
         to the PP Project and funded by CIBA-GEIGY under the 1994 Agreement.

(C)      CIBA-GEIGY is willing to fund the scientists reallocated from the PP
         Project to the new research programme and SYNAPTIC is willing to
         reallocate such scientists and accept such funding in accordance with
         the terms of this Agreement and of the 1994 Agreement as supplemented
         by Supplement No.  1 to such Agreement of even date herewith
         ("Supplement No.1").  In return for this research support, SYNAPTIC
         will grant CIBA-GEIGY
         the right to use [***] for the discovery of such compounds for ultimate
         manufacture and sale, and an exclusive world-wide right to develop,
         manufacture, use and sell such compounds.


NOW,  THEREFORE,  in  consideration  of the  premises  and the mutual  covenants
hereinafter set out, the parties agree as follows:

SECTION 1
Definitions
1.0      General.  Capitalised  terms used and not defined herein shall have the
         meanings  ascribed  to them in the 1994  Agreement.  When  used in this
         Agreement,  each of the following terms shall have the meanings set out
         below:

1.1      "Affiliate" means, with respect to any entity, any other entity

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         controlling,  controlled  by or under common  control with that entity,
         but only for so long as such control exists. One entity shall be deemed
         to control  another entity if it holds not less than fifty (50) percent
         of the voting  stock of that other  entity  or, if lower,  the  maximum
         percentage  of voting  stock of the other  entity  permitted to be held
         under the laws of any country in which such entity is registered.

1.2      "Assay" means a proprietary assay for [***]

1.3      "Early  Development  Compound" means a compound  accepted by CIBA-GEIGY
         for pre-clinical development and approved for the carrying out of Phase
         I and Phase II trials.

1.4      "Effective Date" shall mean the 4th August, 1995.

1.5      "Full Development Compound" means a compound which has been approved by
         CIBA-GEIGY for Phase III clinical development.

1.6      "Field" means [***]

1.7      "FTE"  means a  researcher  employed  by  SYNAPTIC  or  CIBA-GEIGY  and
         assigned to work on the Project with such time and effort to constitute
         one  scientist  working on the Project on a full time basis  consistent
         with normal business and scientific  practice (e.g. at least forty (40)
         hours per week of dedicated effort for at least 48 weeks per year).

1.8      "Half-Year" means a period of six (6) calendar months commencing on the
         1st January or the 1st July in any Year.

1.9      "Net  Sales"  means the total  amount  invoiced  to  un-licensed  third
         parties for sales of  Products in each  Half-Year  by  CIBA-GEIGY,  its
         Affiliates or sublicensees, less all trade, quantity and cash discounts
         actually allowed,  credits or allowances actually granted on account of
         rejections,  returns,  billing errors, or retroactive price reductions,
         and  duties,   taxes  and  other  governmental  charges  determined  in
         accordance with CIBA- GEIGY's normal accounting procedures.

1.10     [***]













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         [***]

1.11     "Patent  Rights"  means  patents  and  patent   applications  owned  or
         controlled  by  SYNAPTIC  and/or  CIBA-GEIGY  [***] and all  divisions,
         continuations, continuations-in-part, reissues, extensions (which shall
         be deemed to include Supplementary Protection Certificates) and foreign
         counterparts   thereof,   at  least  one  claim  of  which  covers  the
         manufacture, use or sale of Products.

1.12     "Product" means any commercial form of a Project  Compound  (including,
         specifically,  acids,  esters,  salts and pro-drug forms,  enantiomers,
         metabolites,  solvates, polymorphs and special formulations) or Project
         Technology,  including  diagnostic  testing  services and/or  products,
         made, used or sold for a Project Use.

1.13     "Project" means a collaborative  research and development project to be
         carried out by SYNAPTIC and CIBA-GEIGY in the Field in accordance  with
         the terms of this Agreement and directed to the design and  development
         of compounds for Project Uses.

1.14     "Project Compound" means [***]

1.15     "Project  Funds"  means  financial  support  provided  to  SYNAPTIC  by
         CIBA-GEIGY  to support the Project.  All Project Funds will be spent at
         SYNAPTIC,  except in the event of  termination as described in Sections
         5.2 through 5.5.

1.16     "Post-Project Term" means the period of thirty-six months immediately
         following the Project Term.

1.17     "Project  Team"  means a  committee,  comprising  [***] which will have
         responsibility  for planning and directing the  operational  aspects of
         the Project subject to the provisions of Section 2.6.

1.18     "Project Technology" means [***]

1.19     "Project Term" means a period commencing as of the Effective Date and
         ending on (i) the 3rd August, 1998 or, if extended pursuant to Section













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         5.1,  the 3rd  August,  1999;  or (ii) the date of  termination  of the
         Project pursuant to any of Sections 5.2 through 5.5, if earlier.

1.20     "Project  Use" means and includes the  treatment in humans of eating or
         metabolic  disorders,  or  obesity,  and/or the  diagnosis  of any such
         disorders or conditions.

1.21     "Steering  Committee"  means the joint  steering  committee  comprising
         [***]  which,  subject  to the  provisions  of Section  2.5,  will have
         responsibility  for  monitoring  and  directing  the  activities of the
         Project Team.

1.22     "Year" means any period of twelve (12)  calendar  months  commencing on
         the 1st January in any calendar year.


SECTION 2
Planning and Execution of Project
2.0      The  Project.  Not later than the 31st May,  1996 the Project Team will
         establish  an initial  Research  Plan which  will be  submitted  to the
         Steering  Committee  for  approval  within two months after the date of
         signature of this  Agreement.  Thereafter,  during the Project Term the
         parties shall engage in the Project in accordance with the terms of the
         Research Plan, as modified from time to time in accordance with Section
         2.1.

2.1      Planning and Review. During the Project Term the Project Team will meet
         at  least  [***] to plan  and  direct  the  operational  phases  of the
         Project, and the Steering Committee will meet at least [***] to monitor
         the progress of the Project and to provide  strategic  direction to the
         Project Team. [***]

         The Research  Plan may be modified at any time by [***] in the light of
         experience gained in the course of the Project.  The Project Team shall
         endeavour to assign  specific  tasks to both SYNAPTIC and CIBA-GEIGY so
         as to maximise  progress of the Project and to avoid any duplication of
         research efforts.

2.2      Conduct of Studies.  All studies  done in  connection  with the Project
         shall be carried out in strict  compliance  with all  applicable  laws,
         regulations,  or  guidelines  governing  the conduct of research at the
         site where such studies are being  conducted.  SYNAPTIC and  CIBA-GEIGY
         shall both comply with all laws and regulations  applicable to the care
         and use of  experimental  animals  at the site  where the  studies  are
         conducted.  In addition,  all animals  utilised in the Project shall be
         provided  humane  care  and  treatment  in  accordance  with  the  most
         acceptable current veterinary practices.






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2.3      Personnel of Steering Committee. The Steering Committee shall be formed
         promptly  following  execution of this Agreement,  but in no case later
         than thirty  (30) days after the  Effective  Date.  Each party shall be
         entitled to appoint [***] to act as its representatives on the Steering
         Committee.  Both  CIBA-GEIGY  and  SYNAPTIC  shall have the  ability to
         change  their  representation  on  the  Steering  Committee  as  deemed
         appropriate,  but will  notify  the other  party  promptly  of any such
         change.


2.4      Personnel of Project  Team.  The Project Team shall be formed  promptly
         following execution of this Agreement.  Each party shall be entitled to
         appoint [***] to act as its  representatives  on the Project Team. Both
         CIBA-GEIGY  and  SYNAPTIC  shall  have  the  ability  to  change  their
         representation  on the  Project  Team as deemed  appropriate,  but will
         notify the other party  promptly of any such  change.  The Project Team
         shall report to and operate under the overall direction of the Steering
         Committee.

2.5      Responsibilities  of Steering  Committee.  The Steering Committee shall
         monitor  and direct the  activities  of the Project  Team,  approve and
         decide  on the  direction  of the  Project  (within  the  terms of this
         Agreement), and ensure high performance by both parties.

         Any issues which cannot be resolved by the Steering Committee shall be
         referred to a Management Committee, comprising [***], for resolution.
         The members of the Management Committee are currently, from
         CIBA-GEIGY: [***] and from SYNAPTIC: [***]

2.6      Responsibilities  of the Project Team. The Project Team shall elaborate
         and coordinate  action plans and will be  responsible  for the economic
         use of capacities  and for the fulfilment of the Research Plan approved
         by the Steering Committee. It reports to the Steering Committee.

2.7      Exclusivity  of Research.  [***] For the  avoidance  of doubt,  for the
         purposes of this Section 2.7 any entity other than Sandoz  Limited,  of
         Basle,  Switzerland,  or  any  company  acquiring  the  pharmaceuticals
         business  of  CIBA-GEIGY  as part of the merger of Sandoz  Limited  and
         CIBA-GEIGY, which at the Effective Date was not an Affiliate of a party
         shall remain a third party  notwithstanding that it may later become an
         Affiliate.  Any such  third  party  shall be  bound by  obligations  of
         confidentiality no less stringent than those set out in this Agreement,
         and, unless otherwise agreed to by the other party, shall be obliged to
         transfer the results of its  research to the parties to this  Agreement
         as though the work had been undertaken by the party on whose behalf the
         research is being carried out.

2.8      Joint Project Team and Steering Committee Meetings.  It is contemplated






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that members of the Project Team and Steering  Committee  may also be members of
the Project  Team and  Steering  Committee  for the PP Project.  In view of this
potential  overlap in membership,  as well as the potential  value  perceived by
both parties in having the two Project  Teams and Steering  Committees  interact
and share scientific data and observations  regarding their respective projects,
it is also contemplated  that the two Project Teams and Steering  Committees may
hold joint meetings, prepare single sets of minutes reflecting such meetings and
prepare joint reports such as those required by Section 4.0.


SECTION 3
Funding of Project
3.0      Funding. In consideration of the research performed by SYNAPTIC as part
         of the Project,  CIBA-GEIGY  shall  provide  Project  Funds to SYNAPTIC
         during the Project Term as follows:

3.1      Amount. For each period of twelve (12) months from first anniversary of
         the Effective  Date Project Funds shall be an amount equal to [***] (as
         adjusted  for  inflation  pursuant  to the  Bureau of Labor  Statistics
         Consumer  Price Index for Urban  Consumers,  New York,  N.E. New Jersey
         Metropolitan  Region Price Index ("the CPI"))  multiplied by the number
         of SYNAPTIC  FTEs which the Steering  Committee  has decided  should be
         employed on the Project  during such period in accordance  with Section
         3.3. This figure shall be subject to further  adjustment  for inflation
         pursuant to the CPI on each  subsequent  anniversary  of the  Effective
         Date.

3.2      Payment.  Project  Funds  shall be paid to SYNAPTIC  by  CIBA-GEIGY  in
         substantially  equal quarterly  instalments in advance on or before the
         first day of each calendar quarter, namely: January 1, April 1, July 1,
         and October 1 of each Year during the Project  Term;  PROVIDED  HOWEVER
         that the first  payment,  which shall be made at least thirty (30) days
         prior to the first anniversary of the Effective Date, shall be equal to
         (a) the quarterly payment plus (b) a pro-rated portion of the quarterly
         payment  (based on the number of days between the first  anniversary of
         the  Effective  Date and the beginning of the first  complete  calendar
         quarter following such anniversary) but no additional quarterly payment
         shall be payable on the first day of such  complete  calendar  quarter;
         AND PROVIDED  FURTHER that the final  payment shall be reduced pro rata
         according  to the  number  of days  between  the  end of the  preceding
         calendar  quarter and the date of expiry hereof,  so that the amount of
         the  first  and last  payments  hereunder  are  equal to the sum of the
         instalments  for  two  complete   calendar  quarters  except  only  for
         adjustment of the last payment in accordance with Section 3.1.

3.3      Allocation of Resources by SYNAPTIC.  SYNAPTIC  shall at  substantially
         all times during the Project Term assign such number of FTEs to work on
         the  Project  as  shall be  agreed  from  time to time by the  Steering
         Committee, which number shall be equal to [***] less the number of FTEs
         assigned from time to time to work on the PP Project in accordance with
         the 1994 Agreement as supplemented by Supplement No. 1. While the level
         of training and research experience of these FTEs may vary from time to
         time, SYNAPTIC will use its best reasonable efforts to ensure that at

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least [***] of the aggregate  number of FTE's assigned to the Project and the PP
Project will have educational  degrees of Ph.D. or M.D., or research  experience
of greater  than ten (10) years in a relevant  scientific  field that  qualifies
them as equivalent  to a Ph.D. or M.D.  level  researcher.  SYNAPTIC  shall keep
accurate records showing  manpower  utilisation on the Project and shall produce
such records to CIBA-GEIGY at any time on request.

3.4      Allocation of Resources by  CIBA-GEIGY.  CIBA-GEIGY  shall at all times
         reasonably required for the purposes of the Project allocate sufficient
         resources of suitably  qualified and experienced  scientists to perform
         those tasks assigned to it by the Project Team. If it should fail to do
         so, or if there  should be a dispute  between the parties as to whether
         CIBA-GEIGY  is  fulfilling  its  obligations  in this regard  which the
         Management Committee is not able to resolve, [***]


SECTION 4
Results of Project
4.0      Reports.  The  Project  Team  shall  prepare  or cause  to be  prepared
         confidential  comprehensive  written  reports at least [***] during the
         Project Term.  These  reports shall  describe in detail the progress of
         the  Project,  [***] and shall be  distributed  to the  members  of the
         Steering Committee.

4.1      Experimental  Techniques.  During the Project  Term both  SYNAPTIC  and
         CIBA- GEIGY shall disclose  Project  Technology to each other so far as
         necessary for the purposes of the Project.  Such disclosure may include
         limited  visits by  CIBA-GEIGY  and SYNAPTIC to the  facilities  of the
         other to permit  discussion and  observation of Project  Technology and
         Assays,  on a  frequency  and  duration  to be  mutually  agreed by the
         Project Team. During the Project Term SYNAPTIC shall provide assistance
         as  reasonably  necessary to enable  [***].  In the event that SYNAPTIC
         uses the services of any third party to develop equipment  required for
         an Assay,  such  equipment  shall be supplied to  CIBA-GEIGY at cost of
         manufacture. Development costs shall not be charged.

4.2      Samples.  During the Project Term both  SYNAPTIC and  CIBA-GEIGY  shall
         provide  each other with  samples of  materials  which  embody  Project
         Technology and Assays, and may provide other samples as well, including
         Project Compounds,  for use in the Project as reasonably  requested and
         approved by the Steering Committee. (Such samples shall be cared for by
         the receiving party as described in Clause 4.7.)









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4.3      Responsibilities of the Parties.
         (a)      Responsibilities of SYNAPTIC:
                  During the Project Term SYNAPTIC  will provide,  insofar as it
                  is relevant to the Project, molecular biology expertise [***],
                  and the  development  of the  relevant  functional  Assays and
                  [***].

         (b)      Responsibilities of CIBA-GEIGY:
                  1. During the Project Term and for so long as CIBA-GEIGY shall
                  have a license under Section 6.0(a) it will [***].

                  2.  During  the  Project  Term  and  the   Post-Project   Term
                  CIBA-GEIGY will:- (i) use no less efforts than it employs with
                  regard to its own compounds that are being  actively  pursued,
                  to develop  and  commercialise  the  Products;  (ii)  promptly
                  notify  SYNAPTIC  of the  selection  of a  particular  Project
                  Compound as an Early Development  Compound;  and (iii) provide
                  SYNAPTIC with [***] report  summarising the efforts devoted to
                  any such Early Development Compound during the [***] preceding
                  such report.  CIBA-GEIGY's  obligation to provide such reports
                  shall continue with respect to each Early Development Compound
                  until development thereof is terminated or upon the first sale
                  of  a  Product   consisting  of  or  containing  such  Project
                  Compound, whichever is the later.

4.4      Patentable  Inventions.  In the event that a  patentable  invention  is
         conceived  or reduced to practice in the course,  and within the scope,
         of the  Project  by  SYNAPTIC  or  CIBA-GEIGY,  the  party  making  the
         invention shall disclose  sufficient details thereof to the other party
         in sufficient  time for the other party to comment  thereon  before any
         application  for a patent  therefor  is  filed,  it  being  understood,
         however,  that the party  making  the  invention  shall  make the final
         decision with respect to any such filing. The party whose employees are
         inventors  of  patentable  technology  shall  have the right to file or
         cause to have filed a patent  application  covering such invention.  In
         the  event  SYNAPTIC  or  CIBA-GEIGY  chooses  not  to  file  a  patent
         application  for an invention  made by its  employees,  the other party
         will be given the  opportunity  to  pursue  patent  protection  on that
         invention at its own  expense;  PROVIDED,  HOWEVER,  that in this event
         ownership  in the patent will be assigned to the party that pursues the
         patent,  and the  inventing  party  shall be  granted  a  royalty-free,
         non-exclusive license to practice the patented invention.

         SYNAPTIC shall own any such patent application and any patent
         or patents









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maturing  therefrom on inventions  made by SYNAPTIC  employees,  and  CIBA-GEIGY
shall  own any such  patent  applications  and any  patent or  patents  maturing
therefrom on inventions made by CIBA-GEIGY employees.  Each party shall bear the
expenses  incurred  in  the  filing,   prosecution,  or  maintenance  of  patent
applications or patents which are owned by or assigned to it, in accordance with
the foregoing provisions of this Section.

4.5      [***]

4.6      Filing and Prosecution of Patent Applications on [***].

         [***]

4.7      Assistance.
         (a)      If so  requested  by the  party  filing a  patent  application
                  pursuant to Sections  4.4 or 4.6, the other party will provide
                  reasonable  assistance to the filing party if such  assistance
                  is  necessary  or  desirable  in order to obtain  the  optimum
                  patent protection for the invention.

         (b)      Each party  agrees to notify the other  party  promptly  if it
                  should  become  aware  of  any   infringement   or  threatened
                  infringement of the Patent Rights by a third party, and in the
                  event  that  the  owner  of  the  Patent   Rights   institutes
                  proceedings against the third party to restrain or prevent the
                  infringement,  the other party will, if so requested,  provide
                  reasonable assistance to the owner at the owner's expense.

4.8      Confidentiality.   Except  as  otherwise  expressly  provided  in  this
         Agreement, both SYNAPTIC and CIBA-GEIGY,  and their employees,  agents,
         consultants  and others  having access to Project  Technology,  Assays,
         information  and  samples  including  but not  limited to the  Steering
         Committee and its individual  members,  shall use their best efforts to
         retain in confidence all Project  Technology,  information  and samples
         received  from each other prior to or during the course of the Project.
         A party receiving such Project Technology shall handle it with the same
         degree  of  care  as  regards   confidentiality  as  it  does  its  own
         proprietary technology,  information and samples. Such information may,
         however, be













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         disclosed if and to the extent  reasonably  necessary to allow SYNAPTIC
         or CIBA-GEIGY and its respective Affiliates,  their employees,  agents,
         consultants  and others  having access to Project  Technology,  Assays,
         information and samples received from each other prior to or during the
         course of the Project,  including  but not limited to the Project Team,
         the Steering Committee,  the Management Committee, and their individual
         members,  to prosecute or defend against litigation with third parties,
         to  file  and  prosecute  patent   applications,   or  to  comply  with
         governmental  regulations.   Moreover,   SYNAPTIC  and  CIBA-GEIGY  may
         disclose confidential Project Technology to third parties to the extent
         needed to fulfil the objectives of the Project,  with the prior written
         approval of the other party.

         Such  obligation of  confidentiality,  as to SYNAPTIC,  CIBA-GEIGY  and
         third parties,  shall be waived as to  information  which (i) is in the
         public  domain at the time of  disclosure;  (ii)  comes into the public
         domain through no fault of the party claiming  waiver;  (iii) was known
         to the party claiming  waiver prior to its disclosure by the other;  or
         (iv) is disclosed to the party claiming  waiver by a third party having
         a lawful right to make such disclosure.

         The above obligation of confidentiality  shall be modified after expiry
         of the Post-Project  Term, such that SYNAPTIC and CIBA-GEIGY can pursue
         exploitation  of the  Project  Technology  with third  parties,  to the
         extent of the rights  licensed to them  respectively  hereunder,  after
         expiry  of the  Post-Project  Term.  Should  CIBA-GEIGY  terminate  the
         Agreement  prematurely  in  accordance  with  Section  5.2,  SYNAPTIC's
         obligation of  confidentiality  as to CIBA-GEIGY's  Project  Technology
         shall be eliminated.

         In the event of a breach,  or threat of breach,  of the  obligations of
         confidentiality  provided  herein,  the  course of  action or  remedies
         available to the damaged  party shall  include,  but not be limited to,
         injunctive relief.

4.9      Publications.  While it is understood that both CIBA-GEIGY and SYNAPTIC
         shall  be free to  publish  the  results  of their  respective  studies
         carried out under this Agreement, both SYNAPTIC and CIBA-GEIGY agree to
         provide the other the  opportunity  to review any  proposed  abstracts,
         posters and other  material or information to be published or presented
         at a scientific meeting,  and any manuscripts at least thirty (30) days
         prior to their intended presentation or submission for publication and,
         at either party's request, shall delay presentation or submission for a
         period sufficient to permit adequate steps to be taken to secure patent
         protection for any patentable  subject matter referred to therein.  The
         reviewing party shall carry out its review with  reasonable  promptness
         and  approval  for  publication  shall  not be  unreasonably  withheld.
         SYNAPTIC  and  CIBA-GEIGY  will delay or refrain  from  publication  if
         either party can  demonstrate  this to be contrary to its  interests or
         damaging to the Project.





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SECTION 5
Term and Termination
5.0      Term. This Agreement shall come into operation as of the Effective Date
         and  shall  remain  in  force  until  the  expiration  of  all  royalty
         obligations   pursuant  to  Section  6,  unless  sooner  terminated  in
         accordance with the provisions of Section 5.2.

5.1      Extension.  CIBA-GEIGY may extend the Project Term for a further period
         of twelve (12) months provided it serves on SYNAPTIC notice of its wish
         to do so not later than the 4th August,  1997.  Such extension shall be
         on substantially  the same terms as set out herein,  mutatis  mutandis,
         with such extension  contemplating  additional funding by CIBA-GEIGY at
         the  same  index-adjusted  rate  per FTE per  year in  accordance  with
         Section 3.1 and continuing studies on the Project pursuant to direction
         by the Steering Committee.  Any extensions beyond the fourth year would
         be by mutual agreement.

5.2      Termination for Breach. If either party shall be in material default of
         any of its  obligations  under this  Agreement and shall fail to remedy
         such  default  within  sixty (60) days  after  written  notice  thereof
         specifying the nature of such default then, notwithstanding anything to
         the  contrary  contained  in this  Agreement,  the party not in default
         shall have the option of  terminating  this Agreement by giving written
         notice of termination to the party in default,  which option,  if it is
         to be  exercised,  must be  exercised  within  thirty  (30) days of the
         expiry of the sixty (60) days allowed to correct the default.

5.3      Termination of the Project for Bankruptcy.  Either party shall have the
         right, at its option,  to terminate the Project  forthwith in the event
         that the other party shall become involved in insolvency,  dissolution,
         bankruptcy or receivership  proceedings affecting the operation of that
         other  party's  business  to such an  extent  that it is  incapable  of
         fulfilling its  obligations  hereunder,  except that in the event of an
         involuntary  bankruptcy  filing against either party,  that party shall
         have sixty (60) days to remedy the situation  before the Project may be
         terminated.

5.4      Change of Control. Either party may terminate the Project twelve months
         after the other party merges with or is taken over by another entity if
         the terminating party can demonstrate to the reasonable satisfaction of
         the other party that such merger or change of  ownership  or control is
         adversely  affecting,  or has adversely  affected,  its interests (e.g.
         because  such other entity is a competitor  of the  terminating  party,
         because the other  party  would not be in a position  to  continue  the
         Project, etc.) provided that it serves written notice of termination on
         the  other  party  not  less  than  three  months  before  the  date of
         termination.  It is  expressly  agreed  that  this  right  shall not be
         exercised by SYNAPTIC on the merger of CIBA-GEIGY  and Sandoz  Limited,
         Basel, Switzerland.

5.5      Third Party Patents.  If CIBA-GEIGY or SYNAPTIC is prevented from
         effectively pursuing the Project with the use of SYNAPTIC Project
         Technology as a result of an issued patent owned by a third party, the

                                    11


<PAGE>



         party so prevented  shall have the option of terminating the Project by
         giving written notice of termination to the other. Should CIBA-GEIGY or
         SYNAPTIC  become  aware of a blocking  patent,  or be notified  that by
         practicing  Project Technology or Assays it is infringing a third party
         patent, it will immediately inform the other party.

5.6      Effect  of  Termination  or  Expiry.  Termination  or  expiry  of  this
         Agreement  shall not affect the rights and  obligations  of the parties
         accrued under this Agreement  prior to  termination  or expiry,  all of
         which  shall  survive  such  termination  or expiry.  In  addition  the
         liabilities  of the  parties  for any  breach of this  Agreement  shall
         survive any such termination or expiry.  Sections 1.0 through 1.22, 4.2
         (the last sentence only) 4.4 (the second paragraph only),4.5, 4.6, 4.7,
         4.8,  5.4, 6.1 through 6.6, 7, 8.3 and 8.5 shall,  except to the extent
         expressly  limited  by  their  terms  or by  other  provisions  of this
         Agreement,  also survive any such  termination  or expiry.  Any Project
         Funds paid by CIBA-GEIGY  but not committed by SYNAPTIC at  termination
         shall be refunded to CIBA-GEIGY,  and CIBA-GEIGY  shall have no further
         obligation to pay Project Funds.

         Notwithstanding  anything to the contrary  contained in this Agreement,
         if this  Agreement is  terminated  by either party  pursuant to Section
         5.2, then, in addition to the  provisions  referred to in the preceding
         paragraph,  the provisions hereof pursuant to which the non-terminating
         party grants any license to the  terminating  party shall  survive such
         termination to the extent provided therein.


5.7      Cooperation  during the Post-Project Term: During the Post-Project Term
         the Steering  Committee  will meet at least once per year at a venue to
         be  mutually  agreed  to  exchange   information   concerning   Project
         Compounds.

SECTION 6
Commercial Rights and Payments
6.0      (a)      SYNAPTIC hereby grants to CIBA-GEIGY the following licences:
                  (i)      during the Project Term and the Post-Project Term: an
                  exclusive, worldwide licence to use, for the sole purpose of
                  discovering and/or developing Project Compounds to be employed
                  for Project Uses, all SYNAPTIC Project Technology and Assays
                  and all SYNAPTIC Patent Rights which would be infringed by the
                  exercise by CIBA-GEIGY of its rights under this Agreement, 
                  subject to the reservation in favour of SYNAPTIC of the right
                  to use all the said Project Technology, Assays and Patent 
                  Rights for the purposes of this Agreement and for other 
                  purposes not falling within the scope
                  of the licence hereby granted; and

                  (ii)  following  the   Post-Project   Term,  a  non-exclusive,
                  worldwide, licence to use, for the sole purpose of identifying
                  or  discovering  and  developing  compounds to be employed for
                  Project  Uses and negative  testing of  compounds  for Project
                  Uses, all such SYNAPTIC Project  Technology and Assays and all
                  SYNAPTIC   Patent   Rights   which  would  be   infringed   by
                  CIBA-GEIGY's exercise of its rights under this Agreement. Such
                  licence shall be royalty-free unless the compound

                                    12


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                  being developed is a Project Compound, in which case royalties
                  shall be  payable  in  respect  of such  Project  Compound  in
                  accordance with the provisions of this Section 6.

                  (iii) an exclusive,  worldwide,  royalty-bearing licence under
                  SYNAPTIC's  Patent  Rights  for the life of those  patents  to
                  manufacture,   have   manufactured,   use  and  sell  Products
                  developed  from  Project   Compounds  or  Project   Technology
                  identified or  discovered  during the Project Term or existing
                  as at the Effective Date.

         (b)      CIBA-GEIGY  hereby grants to SYNAPTIC the following  licences:
                  (i) during the Project  Term a sole,  worldwide,  royalty-free
                  licence to use exclusively for the purposes of the Project all
                  CIBA-  GEIGY   Project   Technology   in  the  Field  and  all
                  CIBA-GEIGY's   Patent  Rights  which  would  be  infringed  by
                  SYNAPTIC's   performance   of  its   obligations   under  this
                  Agreement; and

                  (ii) following the Project Term a  non-exclusive  royalty-free
                  licence  to use  all  CIBA-GEIGY  Project  Technology  and all
                  CIBA-GEIGY  Patent  Rights (not being Patent Rights in respect
                  of  CIBA-GEIGY  compounds)  for uses that are neither  Project
                  Uses nor uses for  indications  the  subject  of an  agreement
                  concluded  between   CIBA-GEIGY  and  SYNAPTIC  following  the
                  exercise  by  CIBA-GEIGY  of the rights set out in Section 6.0
                  (d) below.

         (c)      The licences  granted  pursuant to Section  6.0(a) above shall
                  not be sub-licensable by CIBA-GEIGY except so far as necessary
                  to enable  Products  to be  manufactured,  used and/or sold by
                  CIBA-GEIGY's Affiliates and/or third party sub-licensees.

     (d)  If as a result of the Project,  and during the Project  Term  SYNAPTIC
          should discover uses for [***] other than a Project Use, SYNAPTIC will
          report such  discovery  to  CIBA-GEIGY  together  with all  scientific
          evidence available to it to support the hypothesis that such use could
          be of therapeutic importance. Within one hundred and twenty (120) days
          of  receipt  of such  information,  CIBA-GEIGY  will  notify  SYNAPTIC
          whether it wishes to exercise  rights of first  negotiation for rights
          to such  discovery,  and shall, if it chooses to exercise such rights,
          conclude an  agreement to that effect with  SYNAPTIC  within a further
          ninety (90) days.

     (e) Should  CIBA-GEIGY  fail to  exercise  its rights of first  negotiation
     within  the  one  hundred  and  twenty  (120)  day  period  referred  to in
     sub-section  (d) above,  or fail to conclude  an  agreement  with  SYNAPTIC
     during  the  ninety  (90) day  period  referred  to in that  sub-  section,
     SYNAPTIC shall be free to pursue the  exploitation of such discovery on its
     own  or  with  other   partners,   subject  to  payment  to  CIBA-GEIGY  of
     compensation  to be negotiated in good faith for the core research  funding
     by CIBA-GEIGY under this Agreement,  such  compensation to be paid only out
     of sums received by SYNAPTIC either from the sale of products consisting of
     or containing compounds discovered or developed using such discovery and/or
     received by

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                  SYNAPTIC  either as a lump sum or as royalties  from any third
                  party on sales of such  products.  In assessing  what, if any,
                  compensation  should be paid to CIBA-GEIGY regard shall be had
                  to the extent of CIBA-GEIGY's  financial or other contribution
                  to the  discovery  and to the amount of further  research  and
                  development  effort required to be invested by SYNAPTIC and/or
                  the third party.

     (f)  If during the Post-Project Term SYNAPTIC should identify or discover a
          Project   Compound   (hereinafter   referred  to  as  a  "Post-Project
          Compound") it will notify  CIBA-GEIGY  promptly and supply  CIBA-GEIGY
          with a sample of the compound and as much information  relating to the
          compound as SYNAPTIC  has  available  to it to support the  hypothesis
          that such  compound  could be of  therapeutic  importance.  CIBA-GEIGY
          shall notify  SYNAPTIC within one hundred and twenty (120) days of the
          date of receipt of the  sample  and  information  whether it wishes to
          negotiate  for  rights to the  compound.  On  receipt  of notice  from
          CIBA-GEIGY  that it wishes to negotiate for a licence of the rights to
          the compound  SYNAPTIC shall as soon as practicable  notify CIBA-GEIGY
          of the terms on which it is prepared to grant a licence to CIBA-GEIGY.
          The  parties  will then  negotiate  the terms of the  licence  in good
          faith.  If the parties fail to reach  agreement on the principal terms
          of the  licence  within  ninety  (90) days,  or if  CIBA-GEIGY  should
          decline the compound or fail to notify SYNAPTIC within the one hundred
          and twenty (120) day period that it wishes to negotiate  for a licence
          to the compound SYNAPTIC shall be free to offer rights to the compound
          to a third party. However, if CIBA-GEIGY had notified SYNAPTIC that it
          wished to  negotiate  for a  licence,  SYNAPTIC  shall not  thereafter
          license or offer to license  the  compound  to a third  party on terms
          more  favourable  to the third party than those  offered to CIBA-GEIGY
          without first offering the same terms to  CIBA-GEIGY.  Notwithstanding
          anything   hereinbefore   contained   SYNAPTIC   shall   not  offer  a
          Post-Project   Compound  to  a  third  party  nor  itself   develop  a
          Post-Project  Compound for a Project Use if such Post-Project Compound
          is an analog  of a  Project  Compound  which is under  development  by
          CIBA-GEIGY  or of which  CIBA-GEIGY  notifies  SYNAPTIC  it intends to
          commence  development  during the  Post-Project  Term unless and until
          CIBA-GEIGY subsequently  discontinues development of such Post-Project
          Compound.  CIBA-GEIGY will advise SYNAPTIC promptly in the event of it
          discontinuing development of such a Post-Project Compound.

6.1      Royalties.  In further consideration of the collaboration with SYNAPTIC
         and of the licenses granted to CIBA-GEIGY hereunder:

         (a)      CIBA-GEIGY  shall pay to  SYNAPTIC  a royalty  on Net Sales of
                  Products  in  countries  where  the sale of such  Products  is
                  covered by a claim of the Patent Rights ("Patented  Products")
                  as follows:

                  (i)      In each Year [***] per cent of the first Five hundred
                           million US Dollars (US  $500,000,000) of Net Sales in
                           such Year; and

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<PAGE>



                  (ii)     thereafter in such Year,  [***] per cent of Net Sales
                           in such  Year in excess of Five  hundred  million  US
                           Dollars (US $500,000,000).

         (b)      In the case of Net Sales of  Products in  countries  where the
                  sale of the  Products  is not covered by a claim of the Patent
                  Rights ("Unpatented Products") the rate of the royalty payable
                  in respect  of such Net Sales  shall be reduced to one half of
                  the royalty rate payable pursuant to Section 6.1 (a).

     (c)  If the  aggregate  Net  Sales  of  Patented  Products  and  Unpatented
          Products in any Year should  exceed  five  hundred  million US dollars
          ($500,000,000),  sales of each category of Products shall be deemed to
          have taken place in the same  proportions  throughout  the Year.  (For
          example, if Net Sales of Products in any year totalled $900 million of
          which $600 million were of Patented  Products and $300 million were of
          Unpatented   Products  the  royalties  due  on  such  sales  would  be
          calculated as follows:
                  Patented Products:
                  $500 million x 2/3 at [***] million
                  $400 million x 2/3 at [***] million

                  Unpatented Products:
                  $500 million x 1/3 at [***] million
                  $400 million x 1/3 at [***] million

                  Total royalties = [***]

     (d)  CIBA-GEIGY's obligation to pay SYNAPTIC royalties under this Agreement
          shall  commence  on the first  commercial  launch  of a Product  for a
          Project Use and shall continue,  for Patented Products until expiry of
          the last to expire of the Patent  Rights and for  Unpatented  Products
          for a period  of ten  (10)  years  from  the date of first  commercial
          launch, in each case on a  country-by-country  basis. Only one royalty
          will  be due on the  sale of a  specific  Product,  regardless  of the
          number of patent claims covering such Product. If the patents relating
          to a Patented  Product expire,  lapse or are revoked before the expiry
          of ten (10) years from the launch  date in any  country,  the  Product
          shall be treated as an Unpatented Product for the remainder of the ten
          (10) year period.

6.2      Payment.  Royalty payments shall be calculated for each Half-Year,  and
         made within ninety (90) days of the end of such  Half-Year.  CIBA-GEIGY
         shall provide a statement and accounting with each payment, including a
         breakdown  of  Net  Sales  during  the  applicable  Half-Year  and  the
         calculation of the royalty.

6.3      Blocked  Currency.  In each  country  in which  the local  currency  is
         blocked  and  cannot  be  removed  from the  country,  at  CIBA-GEIGY's
         election royalty accrued in each such country shall be paid to SYNAPTIC
         in local currency by deposit in a local bank designated by SYNAPTIC.


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<PAGE>



6.4      Royalty Reduction.  In the event that CIBA-GEIGY must obtain a separate
         license  from a third  party  in  order to  practice  SYNAPTIC  Project
         Technology or use an Assay,  the amount of royalty  payable to SYNAPTIC
         pursuant to Section 6.1 with respect to any Half-Year  shall be reduced
         by an amount  equal to that paid or to be paid to the third  party with
         respect to the same  period,  but in no case shall the  royalty  amount
         paid to SYNAPTIC  with respect to any such period be less than one half
         of the amount of the royalty otherwise due with respect to such period.

         Each  party  shall  notify  the other as soon as  practicable  after it
         becomes  aware of the  existence of any third party patent rights which
         would prevent CIBA-GEIGY from practicing  SYNAPTIC Project  Technology.
         Thereafter  the parties  will meet to discuss the action to be taken in
         relation  to any  such  blocking  patent  rights.  CIBA-GEIGY  shall be
         entitled to approach the owner of such patent  rights to negotiate  for
         an  unblocking  license.  If it does so, it shall  negotiate  with such
         owner in good faith with a view to obtaining the best possible  license
         terms from such owner, and shall keep SYNAPTIC informed of the progress
         of such negotiations. SYNAPTIC shall have the right to participate with
         CIBA- GEIGY in such negotiations.

6.5      Audit  Rights.  Either party shall have the right to audit the books of
         the other  party  once a Year to verify  the  accuracy  of the  royalty
         payments.  Such audit will be  performed  by an  independent  certified
         public accountant at the expense of the party seeking the audit, unless
         the audit reveals a greater than five percent (5%)  discrepancy  in the
         royalty  amount  that  should  have  been  paid in  comparison  to that
         actually  paid, in which case the expense of the audit will be borne by
         the other  party.  Both  SYNAPTIC  and  CIBA-GEIGY  shall keep fair and
         accurate  records on the use of Project  Technology  and Assays in drug
         discovery and compound research.

6.6      Milestone Payments.

     (a)  Subject to the last sentence of this Section 6.6,  CIBA-GEIGY will pay
          to SYNAPTIC milestone payments as follows:

          (i)  On acceptance by CIBA-GEIGY of each Project  Compound as an Early
               Development Compound: [***]

          (ii) On acceptance by CIBA-GEIGY of each Project Compound as a Full
               Development Compound:  [***] 

          (iv) Upon approval for marketing of each Project  Compound  (including
               approval  of  the  price  and  approval  for  reimbursement,   if
               applicable) in one of the following countries,  namely: the US; a
               key country in Europe (UK,

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<PAGE>



                  Germany, or France); or Japan: [***]

         (b)      [***]  PROVIDED  ALWAYS  that the  amount  creditable  against
                  royalties in any Half-Year  shall not exceed fifty per cent of
                  the royalties due in respect of such period, the balance being
                  carried  forward  to be  credited  against  royalties  due  in
                  respect of future periods.

         (c)      If a Project Compound fails during development and is replaced
                  by another Project  Compound ("the New Project  Compound") and
                  if the New Project  Compound has the same  mechanism of action
                  [***]  as  that  of  the   failed   Project   Compound,   then
                  notwithstanding  anything to the  contrary  contained  herein,
                  milestones  already  paid with  respect to the failed  Project
                  Compound  will be credited  against  milestones  payable  with
                  respect to the New Project Compound.


SECTION 7
Disclosure of Agreement
7.0      Disclosure of Agreement.  Except as required by law,  neither  SYNAPTIC
         nor CIBA-GEIGY  shall release to any third person or publish in any way
         any non-public  information with respect to the terms of this Agreement
         or concerning  their  cooperation  without the prior written consent of
         the other, which consent will not be unreasonably  withheld.  The form,
         content  and  timing  of any such  announcement  shall be agreed by the
         parties in advance.

         The  text  of  any  press  release  to be  issued  by  SYNAPTIC  and/or
         CIBA-GEIGY  concerning  the conclusion of this Agreement as well as the
         precise  date and  timing of the press  release  shall be agreed by the
         parties in writing in advance,  such  agreement not to be  unreasonably
         withheld or delayed.


SECTION 8
Miscellaneous Provisions
8.0      No Agency.  It is understood  and agreed that  SYNAPTIC and  CIBA-GEIGY
         shall  each have the  status of an  independent  contractor  under this
         Agreement  and that  nothing in this  Agreement  shall be  construed as
         authorisation for either party to act as agent for the other.  SYNAPTIC
         members  of  the  Project  Team,  Steering  Committee,  and  Management
         Committee  shall  be  and  shall  remain  employees  of  SYNAPTIC,  and
         CIBA-GEIGY  members  of  the  Project  Team,  Steering  Committee,  and
         Management Committee shall be and shall remain employees of CIBA-GEIGY,
         and neither  party shall incur any  liability for any act or failure to
         act by employees of the other party.

8.1      Force Majeure.  The obligations of each party hereto shall be suspended
         during  such  time  and to the  extent  that  fulfillment  of any  such
         obligation shall be prevented by acts beyond the reasonable  control of
         the party affected thereby.


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8.2      Amendment.  This Agreement may not be amended, supplemented, or 
         otherwise modified except by an instrument in writing signed by both 
         parties.

8.3      Entire  Agreement.  This  Agreement  together  with the PP Agreement as
         supplemented by Supplement No. 1,  represents the entire  agreement and
         understanding  between  the  parties  relating  to the  subject  matter
         hereof,  and  supersedes  all written or oral  agreements,  consents or
         understandings  (if any) with respect thereto given or made between the
         parties prior to the date hereof.

8.4      Waivers.  Any  obligation of either party  hereunder may be waived by a
         written  instrument signed by the other party. Any delay or omission on
         the part of any party in the  exercise of its strict  rights  hereunder
         will not impair those rights nor will it constitute a  renunciation  or
         waiver  of  those  rights.  Any  waiver  by any  party  of any  term or
         condition of this  Agreement in any one instance shall not be deemed or
         construed  to be a  waiver  of such  term or  condition  for any  other
         instance  in the  future  (whether  similar  or  dissimilar)  or of any
         subsequent breach hereof.

8.5      Applicable Law. This Agreement shall be construed and the rights of the
         parties determined in accordance with the laws of the State of New York
         without  regard to the principles of conflict of laws. The venue of any
         legal  proceedings to resolve any dispute  between the parties shall be
         New York, New York State.

8.6      Headings.  The  headings  of the  Sections  of this  Agreement  are for
         general information and reference only, and this Agreement shall not be
         construed by reference to such titles.

8.7      Notices.  Any  notice  required  or  permitted  to be given  under this
         Agreement  shall  be in  writing  and  shall  be  deemed  to have  been
         sufficiently  given for all  purposes  hereof if mailed by first  class
         certified or registered mail,  postage prepaid,  addressed to the party
         to be notified at its address  shown below or such other address as may
         have been furnished in writing to the notifying party.

         To CIBA-GEIGY:
         CIBA-GEIGY Limited
         Legal Department
         Klybeckstrasse 141
         CH-4002 Basel
         Switzerland
         Attention : The Head of Legal Department

         To SYNAPTIC:
         Synaptic Pharmaceutical Corporation
         215 College Road
         Paramus
         New Jersey 07562-1410
         USA
         Attention: The President


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AS WITNESS  the  signatures  of the  authorised  representatives  of the parties
hereto the day and year first above written.

SYNAPTIC PHARMACEUTICAL CORPORATION

Signature:  /s/Kathleen P. Mullinix
            -----------------------
Name:       Kathleen P.  Mullinix
Title:      President



CIBA-GEIGY Limited

Signatures:/s/Dr. D.W. Scholer          /s/R.E. Walker
           -------------------          ----------------
Names:      Dr. D.W. Scholer            R.E. Walker
Titles:     R & D Alliances             Division Counsel



































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