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Exhibit 10.25    
    

        ***Text Omitted and Filed Separately

Confidential Treatment Requested

Under 17 C.F.R. §§200.80(b)(4)

and 240.24B-2  

 PURCHASE AND SUPPLY AGREEMENT  

        THIS PURCHASE AND SUPPLY AGREEMENT (this "Agreement") is made and
entered into as of January 9, 2004 (the "Effective Date"), by and between PIERRE FABRE
MÉDICAMENT, 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"). 

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); 

        WHEREAS, Pierre Fabre and Cypress entered into the Third Restated License Agreement, dated as of the date hereof, as amended (the  "Restated License Agreement"),
pursuant to which Pierre Fabre granted to Cypress an exclusive license to develop, register, manufacture from the API (as
defined below), use, distribute, sell, offer for sale, have sold and import the Licensed Product in any and all indications in the Licensed Territory (as defined below); 

        WHEREAS, Pierre Fabre also granted Cypress a license to certain trademarks pursuant to the First Restated Trademark License Agreement,
dated as of the date hereof, as amended, between Cypress and Pierre Fabre; and 

        WHEREAS, Pierre Fabre and Cypress desire to enter into this Agreement to set forth the terms upon which Pierre Fabre will supply to
Cypress and its sub-licensees, and Cypress and its sub-licensees will purchase from Pierre Fabre, the Bulk API (as defined below) manufactured in compliance with all applicable
requirements set forth herein. 

        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.  

        Capitalized terms used but not otherwise defined in this Agreement will have the meanings given such terms in the Restated License Agreement. Other capitalized
terms will have the meanings set forth below. 

        1.1   "Action" shall have the meaning set forth in Section 9.2(a). 

        1.2   "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 at least 50% of the voting stock of that corporation, or in the absence of ownership of at
least 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. 

        1.3   "Annual Excess" shall have the meaning set forth in Section 5.1(a)(iii). 

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

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        1.5   "API Specifications" means those specifications pertaining to the API set forth in the IND for
the Licensed Product filed by Cypress with the FDA in the United States (No. 63736), and in the DMF filed by Pierre Fabre with the FDA (No11501), as described in  Exhibit I hereto
and made a part hereof, as modified to comply with the NDA for the Licensed Product or otherwise modified from time to time in
accordance with Section 8.3. 

        1.6   "Buffer Stock" shall have the meaning set forth in Section 8.9(a). 

        1.7   "Bulk API" shall mean API in bulk form. 

        1.8   "Certificate of Analysis" shall have the meaning set forth in Section 7.3(d). 

        1.9   "cGMPs" shall mean the standards established by the FDA for current Good Manufacturing Practices,
as specified in the Quality System Regulations set forth at 21 CFR Parts 210 and 211. 

        1.10   "Change of Control" shall mean (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 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) shall not apply to a merger effected exclusively for the purpose of changing the
domicile of Cypress or the name of Cypress. 

        1.11   "Collaboration Agreement" shall mean that certain License and Collaboration
Agreement between Cypress and Forest, dated as of the Effective Date, a copy of which has been provided to Pierre Fabre, as may be amended, modified or restated from time to time, pursuant to which,
among other things, Cypress has granted to Forest a sub-license to the Licensed Technology. 

        1.12   "Commercially Reasonable Efforts" shall mean that the parties shall conform to the
standards of diligence customary in the pharmaceutical industry, with respect to compounds having commercial potential comparable to Milnacipran, in fulfilling their applicable obligations under this
Agreement with regard to manufacturing or otherwise. 

        1.13   "Confidential Information" shall mean any confidential information (including,
without limitation, Information) furnished to it by the other party pursuant to the Restated License Agreement or this Agreement. 

        1.14   "Conform" shall mean that a quality control sample or batch delivery of Bulk API
meets the API Specifications and was manufactured in accordance with the requirements of Section 8.1. 

        1.15   "Control" shall mean, with respect to any Information or intellectual property
right, possession by a party of the ability (whether by ownership, license or otherwise, other than any license granted under this Agreement) to grant access, a license or sub-license to
such Information or intellectual property right as provided for herein without violating the terms of any agreement or other arrangement with any Third Party as of the time such party would first be
required hereunder to grant the other party such access, license or sublicense, or at any other time during the term of such access, license or sublicense. 

        1.16   "Correction Plan" shall have the meaning set forth in Section 8.9(c). 

        1.17   "Current Buffer Stock" shall have the meaning set forth in Section 8.9(c). 

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        1.18   "Cypress Indemnitees" shall have the meaning set forth in Section 9.2(b). 

        1.19   "Date of First Commercial Sale" shall mean the actual date of first commercial
sale of a Licensed Product in the Licensed Territory. 

        1.20   "Delivery Forecast" shall mean a forecast provided by Cypress and/or its
sub-licensees of the quantity of Bulk API required by Cypress and its sub-licensees during the applicable period (including supplies for formulation development, clinical
trials and sampling). 

        1.21   "DMF" shall have the meaning set forth in Section 8.6. 

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

        1.23   "Estimated Date of First Commercial Sale" shall mean the estimated Date of First
Commercial Sale of a Licensed Product in the Licensed Territory, as may be established from time to time by Cypress pursuant to this Agreement. 

        1.24   "Exchange Act" shall mean the Securities and Exchange Act of 1934, as amended. 

        1.25   "Exercise Date" shall have the meaning set forth in Section 8.11(b). 

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

        1.27   "FD&C Act" shall mean the United States Food, Drug and Cosmetic Act. 

        1.28   "First Commercial Sale" shall mean the first commercial sale of the first Licensed
Product in the first country within the Licensed Territory. 

        1.29   "Forest" shall mean Forest Laboratories Ireland Limited, an Irish corporation and
a wholly owned subsidiary of Forest Laboratories, Inc., a Delaware corporation. 

        1.30   "Generic Product" shall mean Licensed Product commercialized as a generic product
by Cypress or any of its sub-licensees or any Third Party. 

        1.31   "Generic Supplier" shall have the meaning set forth in Section 8.12. 

        1.32   "Indemnified Party" shall have the meaning set forth in Section 9.3(a). 

        1.33   "Indemnifying Party" shall have the meaning set forth in Section 9.3(a). 

        1.34   "Index" shall have the meaning set forth in Section 5.1(a). 

        1.35   "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. 

        1.36   "Letter Agreement" shall mean the agreement to be entered into among Pierre Fabre,
Cypress and Forest as of the Restatement Date, as may be amended. 

        1.37   "License Effective Date" shall mean August 1, 2001. 

        1.38   "Licensed Product" shall mean any product (including a Cypress Product or product
containing a Cypress Formulation or Forest Formulation) 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 Licensed Product is otherwise within the scope of any claim of the Pierre Fabre Patents. 

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

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

        1.41   "Losses" shall have the meaning set forth in Sections 9.2(a). 

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

        1.43   "Manufacturing Process" shall have the meaning set forth in Section 8.3. 

        1.44   "Manufacturing Right" shall have the meaning set forth in Section 8.11(b). 

        1.45   "Maximum Time Before Retesting" shall have the meaning set forth in
Section 7.1. 

        1.46   "Milnacipran" shall mean the substance known as milnacipran (INN), which expressly
excludes any analogs, derivatives and enantiomers of milnacipran (INN). 

        1.47   "Minimum Buffer Stock" shall have the meaning set forth in Section 8.9(b). 

        1.48   "Minimum Time to Retesting" shall have the meaning set forth in
Section 7.1. 

        1.49   "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 obtaining
Regulatory Approval to market and sell such pharmaceutical product. 

        1.50   "Other Changes" shall have the meaning set forth in Section 8.3. 

        1.51   "Outsourcing Notice" shall have the meaning set forth in Section 8.12. 

        1.52   "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. 

        1.53   "Pierre Fabre Indemnitees" shall have the meaning set forth in
Section 9.2(a). 

        1.54   "Pierre Fabre Know-How" shall mean Information that is Controlled by
Pierre Fabre or its Affiliates 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 to the Restated License Agreement. Pierre Fabre Know-How shall exclude Manufacturing Know-How. 

        1.55   "Pierre Fabre Patents" shall mean all Patents Controlled by Pierre Fabre or any of
its Affiliates 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 to the Restated License Agreement. 

        1.56   "Pierre Fabre Suppliers" shall include all Third Parties that supply Raw Materials
to Pierre Fabre. 

        1.57   "Postponement" shall have the meaning set forth in Section 4.2. 

        1.58   "Pre-Approved Changes" shall have the meaning set forth in
Section 8.3. 

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        1.59   "Purchase Order" shall have the meaning set forth in Section 4.1(b)(i). 

        1.60   "Quality Agreement" shall mean an agreement between the parties that describes the
parties' quality control, quality assurance and regulatory responsibilities relating to the manufacture and supply of Bulk API. 

        1.61   "Raw Materials" shall mean the materials used in manufacturing Bulk API. 

        1.62   "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. 

        1.63   "Restated License Agreement" shall have the meaning set forth in the second
recital. 

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

        1.65   "Samples" shall mean quantities of the Licensed Product given to authorized
medical professionals free of charge as part of the marketing, advertising or promotion of the Licensed Product. 

        1.66   "Second Source Facility" shall have the meaning set forth in Section 8.10. 

        1.67   "Shared Amount" shall have the meaning set forth in Section 5.1(b). 

        1.68   "Shortfall" shall have the meaning set forth in Section 8.9(c). 

        1.69   "Starting Materials" shall mean those materials that are starting materials within
the meaning of the guideline for submitting supporting documentation in drug applications for the manufacture of drug substances FDA/CDER 02 1987, as may be amended. 

        1.70   "Term" shall have the meaning set forth in Section 10.1. 

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

        1.72   "Transfer Price" shall have the meaning set forth in Section 5.1(a). 

        1.73   "Working Group" shall have the meaning set forth in Section 3.1. 

2.     PURCHASE AND SUPPLY OF API.  

        2.1    Supply by Pierre Fabre.    Pierre Fabre agrees that it will manufacture and supply to Cypress and its
sub-licensees such quantities of Bulk API as requested by Cypress and/or its sub-licensees pursuant to Section 4 to cover their total market needs for the Licensed
Territory. 

        2.2    Exclusive Supplier.    

        (a)   During the Term, subject to Sections 8.11 and 8.12, Pierre Fabre will be the exclusive supplier to Cypress and its
sub-licensees of Bulk API, and Cypress agrees that it and its sub-licensees shall purchase from Pierre Fabre all of their requirements of Bulk API, for clinical trials, samples
and commercial sales of the Licensed Product in the Licensed Territory. 

5

  

        (b)   In the event Pierre Fabre is unable to supply to Cypress or its sub-licensee API requested in a Purchase
Order, in whole or part, due to a shortage of production capacity or Raw Materials for any reason (except to the extent caused by Cypress or any of its sub-licensees), then, in addition to
any other rights that may be available to Cypress under this Agreement, Pierre Fabre shall promptly notify Cypress and/or its sub-licensees, in writing, of such shortage of production
capacity or Raw Materials, and, if possible, the date such shortage of production capacity or Raw Materials is expected to end. In such event, without limiting the provisions of Section 6,
Pierre Fabre shall allocate its available production capacity and/or Raw Materials for the production of API in a manner proportional to the utilization by all customers (including Pierre Fabre) of
such capacity and/or Raw Materials in the previous six month period; provided that in no event shall Cypress and its sub-licensees receive
lesser quantities of API or less favorable delivery dates than the quantities and delivery dates then being allocated by Pierre Fabre to its own product(s). 

        3.    MANUFACTURING AND SUPPLY WORKING GROUP.    

        3.1    Establish the Working Group.    Within 30 days after the Effective Date, the parties will establish a
manufacturing and supply working group (the "Working Group"). The Working Group shall consist of six members, or such other even number of members as
agreed to by the parties, with an equal number of representatives on the Working Group appointed by each of Pierre Fabre and Cypress; provided that
Cypress may appoint one or more representatives of its sub-licensees as Cypress' representatives on the Working Group and, so long as Forest is a sub-licensee of Cypress under
the Restated License Agreement, one or more of the Cypress representatives on the Working Group shall be an employee of Forest (or of any Affiliate of Forest that is primarily responsible for the
activities of Forest under the Collaboration Agreement). Each member of the Working Group shall have experience appropriate for the activities to be conducted by the Working Group. 

        3.2    Function of the Working Group.    The responsibilities of the Working Group are detailed on  Exhibit II. 

        3.3    Meetings.    

        (a)   Prior to the first NDA filing for a Licensed Product, the Working Group shall meet on the dates mutually determined by
the Working Group. Following the date on which an NDA is filed for a Licensed Product, the Working Group shall meet at least one time each calendar quarter. Unless otherwise mutually agreed by the
parties, the location of the Working Group meetings shall alternate between Pierre Fabre's premises and Cypress' or its sub-licensees' premises or may be
held by telephone or video conference if requested by either party; provided that after the first NDA filing for a Licensed Product, the Working Group
shall meet in person at least once a year. 

        (b)   The Working Group through one representative appointed by Cypress and one representative appointed by Pierre Fabre will
report its activities to the Steering Committee on a regular basis. 

        (c)   The Working Group may consult with, and receive assistance from each party's employees who are not Working Group members. 

        3.4    Decision Making Authority.    Pierre Fabre shall have final decision making authority with respect to those
activities identified on Exhibit II as responsibilities of Pierre Fabre and Cypress shall have final decision making authority with respect to
those activities identified on Exhibit II as responsibilities of Cypress; provided that no
decision by either Pierre Fabre or Cypress shall conflict with applicable laws and regulations of the Licensed Territory, or the terms of the Restated License Agreement or this Agreement; and  provided, further, that either party may refer any final decision by the other party to the chief officers of Pierre Fabre and Cypress. Such officers of
the parties shall meet 

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promptly
thereafter and shall negotiate in good faith to resolve such issue within 30 days of commencing such negotiations. 

4.     FORECASTS AND PURCHASE ORDERS.  

        4.1    Forecasts.    During the Term, Cypress and its sub-licensees shall follow the following forecast
and order procedures. 

        (a)   On the first business day of each calendar quarter during the period from the Effective Date until the first day of the
12th calendar month immediately preceding the calendar month during which the Estimated Date of First Commercial Sale is scheduled to occur, Cypress shall submit to Pierre Fabre a
Delivery Forecast for the [...***...] period beginning on the first day of the calendar month immediately following the date of
submission of such Delivery Forecast. Each Delivery Forecast provided during this period shall provide quarterly forecasts for the applicable  [...***...] period. Such Delivery Forecast shall include
supplies of Bulk API required for formulation development and clinical
trials prior to the Estimated Date of First Commercial Sale. In addition, the Delivery Forecast submitted in January of each year during this
period shall also include a non-binding forecast for the [...***...] period immediately following the  [...***...] period covered by such Delivery Forecast.
Each Delivery Forecast submitted during this period will be a
non-binding estimate and shall not obligate Cypress or its sub-licensees to purchase any quantity of Bulk API, except that Cypress or its sub-licensees shall submit
to Pierre Fabre a binding purchase order no fewer than four months prior to any delivery date indicated by Cypress or its sub-licensees in a Delivery Forecast during this period. 

        (b)   Beginning on the first day of the 12th calendar month immediately preceding the calendar month during which
the Estimated Date of First Commercial Sale is scheduled to occur, and on the first day of each calendar month thereafter, Cypress shall submit to Pierre Fabre a rolling Delivery Forecast for the  [...***...] period beginning on the first day of the calendar month immediately following the date of submission of such
Delivery Forecast (e.g., submission on [...***...] of a Delivery Forecast for the period from  [...***...] through [...***...]
). Each Delivery Forecast
provided during this period shall provide monthly forecasts for the [...***...] and quarterly forecasts for the  [...***...] of the applicable [...***...] period. In
addition, the Delivery Forecast submitted in January of each year during this period shall also include a non-binding forecast for the  [...***...] period immediately following the [...***...]
period covered by such Delivery Forecast. Each Delivery Forecast submitted during this period will be a non-binding estimate and shall not obligate Cypress or its sub-licensees
to purchase any quantity of Bulk API, except as expressly provided below (an illustration of the following rules is provided in Exhibit III): 

          (i)  The [...***...] of such Delivery Forecast shall
constitute a binding purchase order ("Purchase Order") for both parties, meaning that Cypress and/or its sub-licensees agree to purchase and
Pierre Fabre agrees to supply the quantities of Bulk API indicated in the Purchase Order; 

         (ii)  The quantities of Bulk API indicated in each of the  [...***...] of such Delivery Forecast may reflect an increase or decrease of up to  [...***...] compared to the quantity specified for the same calendar month in the immediately preceding Delivery Forecast; 

       (iii)  The quantities of Bulk API indicated in each of the  [...***...] months of such Delivery Forecast may reflect an increase or decrease of up to 
[...***...] compared to the quantity specified for the same calendar month in the immediately preceding Delivery Forecast;
 

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        (iv)  The quantities of Bulk API indicated in the  [...***...] of such Delivery Forecast shall equal  [...***...] of the aggregate quantities specified for the  [...***...] period in the immediately preceding Delivery Forecast, plus or minus  [...***...]; and

         (v)  The quantities of Bulk API indicated in the  [...***...] period of such Delivery Forecast shall be non-binding. 

        4.2    Postponement.    Prior to the calendar month during which the Estimated Date of First Commercial Sale is
scheduled to occur, Cypress may change the Estimated Date of First Commercial Sale, at no cost to Cypress, by notifying Pierre Fabre in writing. Thereafter, Cypress may postpone the Estimated Date of
First Commercial Sale one or more additional times (each, a "Postponement") upon written notice to Pierre Fabre. In the event of a Postponement, other
than due to a delay by Pierre Fabre, Cypress or its sub-licensee shall be responsible for the costs of Bulk API ordered under any Purchase Order (whether such orders have been delivered by
Pierre Fabre or not) subject to the conditions set forth in Sections 6 and 7.4, and Cypress and its sub-licensees shall have no other responsibility to Pierre Fabre as a result of
such Postponement. Pierre Fabre agrees that there shall be no limit on the number of Postponements or the duration of any Postponement that may be made by Cypress. 

        4.3    Quantity of Orders.    The parties agree that forecasts and orders of Bulk API to be provided by Cypress will
be expressed by multiples of ten kilograms of Bulk API. 

5.     TRANSFER PRICE.  

        5.1    Transfer Price.    

        (a)   Subject to Section 8.12, for Bulk API supplied by Pierre Fabre for commercial purposes, Cypress will pay to Pierre
Fabre a transfer price [...***...] per kilogram of Bulk API (as may be adjusted pursuant to Section 5.1, the  "Transfer Price"), subject to the
terms of this Section 5.1(a), which Transfer Price does not include tax: 

          (i)  For Bulk API supplied by Pierre Fabre for formulation development of Licensed Product and all toxicology and
pharmacology studies and clinical trials of Licensed Product required for any NDA for Licensed Product, Cypress will pay  [...***...] of such Transfer Price; 

         (ii)  For Bulk API supplied by Pierre Fabre for Samples, so long as Forest has rights under the Licensed Technology, the
following provisions will apply: 

        (1)   Pierre Fabre will supply the following quantities of Bulk API for Samples  [...***...]to Forest for the [...***...]
 after the Date
of First Commercial Sale: (A) for the first year, [...***...]of the quantity of Bulk API supplied for Licensed Product
sold in such first year; (B) for the second year, [...***...] of the quantity of Bulk API supplied for Licensed Product
sold in such second year; and (C) for the third year, [...***...] of the quantity of Bulk API supplied for Licensed
Product sold in such third year. The foregoing quantities will be based on projected sales of Licensed Product for the applicable period, as reflected in the Sales Forecasts (as defined in the
Restated License Agreement) provided pursuant to Section 5.3(a) of the Restated License Agreement, and reconciling payments with respect to Bulk API provided for Samples will be made by as
necessary within 60 days after the end of the applicable year to reflect actual sales of Licensed Product in such year. 

        (2)   For all quantities of Bulk API supplied by Pierre Fabre for Samples in excess of the quantities supplied under
Section 5.1(a)(ii)(1) and throughout the Term, Pierre Fabre will supply such Bulk API at [...***...] of the Transfer
Price otherwise payable under this Section 5.1(a), with Forest paying Pierre Fabre [...***...] of the Transfer Price
otherwise 

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payable
under this Section 5.1(a) to supply such Bulk API, and Cypress paying Pierre Fabre [...***...] of the Transfer
Price otherwise payable under this Section 5.1(a) to supply such Bulk API. 

Forest
shall maintain records regarding actual Sample distribution. Forest shall periodically provide to Pierre Fabre summaries of the information contained in such records and shall make such records
available to Pierre Fabre, at reasonable times and upon reasonable prior notice, at Pierre Fabre's request. 

       (iii)  The Transfer Price described in Section 5.1(a) will be adjusted by Pierre Fabre on January 1 of each year
during the Term, beginning on January 1, 2004, according to the last published French index of consumer prices (Indice mensuel des prix à la consommation (base
100—year 1998)—Ensemble des Ménages France entière, as published in "Bulletin INSEE—tableau 23.NE), or any successor thereto, the base
index being that of
January 2003, i.e.: 106.9 (the "Index"); provided, however, that in no event shall the Transfer
Price decrease or increase by more than [...***...] from the Transfer Price in effect for the prior calendar year.
Notwithstanding the foregoing, in the event any annual increase in the Index for a given calendar year exceeds [...***...],
(i) the Transfer Price shall increase by [...***...] for the next calendar year, and (ii) if such  [...***...]increase in such calendar year was
less than the actual percentage increase in Pierre Fabre's costs of manufacturing
Bulk API during that calendar year (as documented by Pierre Fabre to explain, in general terms, the basis for such actual percentage increase in costs of greater than  [...***...]), then Pierre Fabre
shall have the right to apply the amount by which the actual percentage increase in Pierre
Fabre's costs of manufacturing Bulk API during such calendar year exceeds [...***...] (the  "Annual Excess"), or any portion thereof, to a future adjustment in the Transfer Price for the first
year following such establishment of an Annual Excess that any such adjustment does not result in an increase in the Transfer Price in excess of  [...***...] from that in effect for the prior year. Any
portion of an Annual Excess that is not used in the following year may
be carried over to subsequent years, and the unused portion of the Annual Excess for any and all years may be aggregated to be applied in determining an increase in the Transfer Price as provided
above. By way of illustration only, if the Index at January 2004 and January 2005 is 115.45 and 117.47, respectively, then (A) the Transfer Price for 2004 will be  [...***...] and the
Annual Excess is [...***...] if the
actual percentage increase in Pierre Fabre's cost of manufacturing Bulk API was not less than the percentage increase in the Index, and (B) the Transfer Price for 2005 will be  [...***...]

        (b)   The Transfer Price is established on the Effective Date when the exchange rate is 1.15 U.S. Dollars to 1.00 Euros. In
connection with payment of the Transfer Price, if the exchange rate of U.S. Dollars to Euros, as reported in The Wall Street Journal (absent any error)
for the business day immediately preceding the applicable payment date is higher or lower than such exchange rate on the Effective Date by  [...***...] or more, then Cypress or its sub-licensee, on the
one hand, and Pierre Fabre, on the other hand will
share equally the effect of the increase or decrease in such exchange rate to the extent of any increase or decrease of  [...***...] or more over the exchange rate on the Effective Date (the "Shared
Amount"), as provided below. The Shared Amount will be determined in respect of each payment of the Transfer Price. For any Shared Amount resulting from an increase in the
exchange rate of U.S. Dollars to Euros, Cypress or its sub-licensee shall be entitled to a payment from Pierre Fabre in an amount equal to  [...***...] of the Shared Amount. For any Shared Amount
resulting from a decrease in the exchange rate of U.S. Dollars to Euros,
Pierre Fabre shall be entitled to a payment from Cypress or its sub-licensee in an amount equal to [...***...] of
the Shared Amount. Pierre Fabre shall determine and provide reasonable written evidence to Cypress of the net amount of all Shared Amounts for a given calendar year on or before January 31 of
the following year, and the party owing such net amount shall promptly pay 

9

 

such
net amount to the other party, absent manifest error in such information provided by Pierre Fabre. 

        5.2    Payment Terms.    Payments pursuant to Section 5.1 will be made by Cypress or its
sub-licensee to Pierre Fabre in Euros within 60 days of the date of invoice. 

        5.3    Late Payments.    In the event that any payment due hereunder is not made when due, the payment shall accrue
interest from the date due at the rate of 1.5% per month; provided, however, that in no event shall such rate exceed the maximum legal annual interest
rate; provided further that no such interest shall accrue until the other party has provided written notice of such late payment or during any period
that any dispute with respect to a payment is being diligently pursued in good faith by the party from whom such payment is claimed. The payment of such interest shall not limit a party from
exercising any other rights it may have as a consequence of the lateness of any payment. 

6.    DELIVERY.    Subject to compliance with the forecast and order procedure set
forth in Section 4, Pierre Fabre agrees to deliver Bulk API to Cypress or if designated by Cypress, its sub-licensee, in such quantities and on such monthly delivery dates as are
specified in Purchase Orders. With respect to orders not submitted in accordance with the forecast and order procedure, Pierre Fabre will use Commercially Reasonable Efforts to supply Cypress or its
sub-licensee with the quantities so ordered but shall have no obligation. Deliveries shall be made FCA French Airport (ICC Incoterms 2000) and shall be shipped to Cypress' address set
forth in this Agreement, or as otherwise directed by Cypress in writing. Bulk API delivered to Cypress or its sub-licensee shall be appropriately packaged by Pierre Fabre at its expense
for export shipment to the Licensed Territory. Delivery of Bulk API will be made by Pierre Fabre in conformity with a shipment protocol to be mutually agreed within the Working Group. 

7.     QUALITY ASSURANCE CONTROL—ACCEPTANCE.  

        7.1    Minimum Time to Retesting API.    Upon delivery to Cypress or if designated by Cypress, its
sub-licensee, API will have a minimum time to retesting (the "Minimum Time to Retesting") of  [...***...] when the maximum time before retesting of
API is required, as authorized by the FDA
("Maximum Time Before Retesting") is [...***...]. In addition, Pierre Fabre
agrees to use Commercially Reasonable Efforts, including but not limited to conducting stability studies on API or enabling Cypress or its sub-licensee to conduct such studies, to obtain
FDA approval of an increase in the Maximum Time Before Retesting to [...***...]. Pierre Fabre shall provide Cypress with a
report of all data that Pierre Fabre obtains in such stability studies conducted by or on behalf of Pierre Fabre. In the event such increase in Maximum Time Before Retesting is approved by the FDA,
the Minimum Time to Retesting required upon delivery under this Section 7.1 shall be increased to [...***...]. 

        7.2    Quality Agreement.    Within 90 days from the Effective Date, Cypress and Pierre Fabre will enter into a
Quality Agreement; provided that, if Cypress requests of Pierre Fabre in writing, Forest (or any
Affiliate of Forest that is primarily responsible for the activities of Forest under the Collaboration Agreement) may be added as a party to the Quality Agreement. Cypress and Pierre Fabre (and, if
applicable, Forest or any Affiliate of Forest that is primarily responsible for the activities of Forest under the Collaboration Agreement) shall amend the Quality Agreement from time to time as the
parties deem necessary. The Quality Agreement will include, at a minimum, the subject matter listed in Exhibit IV. 

        7.3    Specifications; Testing.    

        (a)    Batch Testing.    Pierre Fabre will perform standard analytical
testing of each manufactured batch to be delivered to Cypress hereunder to verify that it Conforms according to the procedure described in the corresponding documentation or as required by applicable
laws, regulation and authorities prior to shipment of each batch of Bulk API. 

10

 

        (b)    Quality Control Sample.    Prior to delivery of any batch of
Bulk API, Pierre Fabre shall provide Cypress or its sub-licensee with (i) a quality control sample of such batch for the purpose of confirming that such batch Conforms, and
(ii) written confirmation that the corresponding batch record has been reviewed and approved by Pierre Fabre's Quality Assurance Department. 

        (c)    Quality Control Problem.    In addition, in the event Cypress,
its sub-licensee or Pierre Fabre identifies a quality problem with respect to a quality control sample or any batch sample of API, then, if requested by Cypress or its
sub-licensee in writing, Pierre Fabre shall authorize Cypress or its sub-licensee to consult at Pierre Fabre's facilities the full batch records corresponding to the applicable
quality control sample or applicable batch. 

        (d)    Certificate of Analysis.    Pierre Fabre shall also provide a
certificate of analysis (the "Certificate of Analysis") to Cypress or its sub-licensee with each shipment of Bulk API supplied hereunder.
Such Certificate of Analysis shall certify with respect to each shipment and batch (identified by batch number) (i) the quantity of the shipment, and (ii) that the Bulk API delivered
Conforms, as well as any further information required by the relevant regulatory authorities that Cypress may have previously notified Pierre Fabre is necessary. Cypress or its
sub-licensee shall be under no obligation to accept any shipment of Bulk API without an accompanying Certificate of Analysis. 

        7.4    Acceptance and Rejection.    

        (a)    Acceptance of Quality Control Sample.    No delivery of Bulk
API shall be made until Cypress or its sub-licensee accepts or is deemed to have accepted the quality control sample of Bulk API, as provided in Section 7.4(c) below.
Notwithstanding the above, the parties agree that if the delivery of one batch of Bulk API is made in several shipments and if Cypress or its sub-licensee has accepted the quality control
sample of such batch sent by Pierre Fabre before delivery of the first shipment, then Pierre Fabre shall not have any obligation to send a quality control sample of the same batch of Bulk API before
delivery of the shipments of the same batch. 

        (b)    Rejection.    Cypress or its sub-licensee may
reject any quality control sample or batch delivery that does not Conform. 

        (c)    Quality Control Sample Testing.    Within 15 days after
receipt of the applicable quality control sample, Cypress or its sub-licensee shall perform such samplings and tests that are designed, in accordance with the methods of analysis and API
specifications approved by the FDA, to determine whether the quality control sample Conforms. If Cypress or its sub-licensee rejects the quality control sample, Cypress or its
sub-licensee shall, within such 15 day period, inform Pierre Fabre of its refusal to accept the quality control sample, and the reasons therefore; otherwise, Cypress or its
sub-licensee shall be deemed to have accepted the quality control sample and Pierre Fabre shall be entitled to deliver the corresponding batch (or portion thereof) of Bulk API to Cypress
or its sub-licensee. 

        (d)    Replacement of Quality Control Sample.    Upon rejection by
Cypress or its sub-licensee of a quality control sample, within 10 business days of notice of such rejection, Pierre Fabre shall send a new quality control sample from a different API lot. 

        (e)    Bulk API Testing.    Within 30 days of receipt of any
batch (or portion thereof) delivery of Bulk API at Cypress' facilities or such other destination as may be designated by Cypress, Cypress or its sub-licensee shall perform such samplings
and tests that are designed, in accordance with the methods of analysis and API specifications approved by the FDA, to determine whether the Bulk API Conforms. If Cypress or its
sub-licensee rejects any shipment of Bulk API, Cypress shall within such 30 day period inform Pierre Fabre of its refusal to accept such shipment, and the reasons therefor;
otherwise, Cypress or its sub-licensee shall be deemed to have accepted said shipment; provided that such acceptance shall not preclude a
subsequent rejection of any shipment 

11

 

of
Bulk API by Cypress or its sub-licensee following discovery of latent defects in such Bulk API (including, without limitation, discovery of any substance that would cause Bulk API to be
adulterated within the meaning of the FD&C Act) that would not reasonably be detectable in accordance with industry standards in the Licensed Territory in the stated time period, provided that Cypress
or its sub-licensee notifies Pierre Fabre in writing within 30 days of discovery of such latent defect. 

        (f)    Replacement of Bulk API and Dispute Procedure.    Following any
notice of rejection of Bulk API by Cypress or its sub-licensee, Pierre Fabre shall send a quality control sample within 10 business days of notice of rejection and furthermore, shall send
a replacement batch of Bulk API within 20 business days of approval by Cypress of such quality control sample. Pierre Fabre and Cypress and its sub-licensee shall investigate any failed
test result, in accordance with the procedure described in the Quality Agreement and as required by applicable cGMPs. As part of this investigation, Cypress and Pierre Fabre may mutually select an
independent laboratory to perform tests on representative samples from the rejected portion of the shipment and determine if it Conforms. The entire cost of such audit shall be paid by Pierre Fabre in
the event it is determined such Bulk API did not Conform, and by Cypress in the event it is determined that such Bulk API did Conform. The results of such tests shall be binding upon Cypress and
Pierre Fabre. The entire process described in this Section 7.4(f), including any testing performed by an independent laboratory, shall be conducted diligently and within a maximum period of
180 days from the date of notice of rejection by Cypress. 

        (g)    Cost of Replacement of Rejected Bulk API.    If it is
determined with or without reference to an independent laboratory that the rejected Bulk API did not Conform, the replacement batch shall be provided by Pierre Fabre at no other cost to Cypress than
the original price already paid for such non-Conforming Bulk API, with the same quantity of Bulk API which Conforms. Rejected Bulk 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. 

8.     MANUFACTURE OF BULK API.  

        8.1    Manufacture of Bulk API.    Pierre Fabre will manufacture the Bulk API in accordance with the API
Specifications, cGMPs and other applicable rules and regulations of the FDA and other governmental or regulatory agencies within the Licensed Territory with jurisdiction over the manufacture, use or
sale of the API, as then in effect. 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 Pierre Fabre will bear the costs for implementing such changes. 

        8.2    Multiple Suppliers.    Pierre Fabre agrees that, beginning on the date of the first Purchase Order and
thereafter during the Term, it shall use Commercially Reasonable Efforts to have qualified more than one Pierre Fabre Supplier for each Starting Material. Furthermore, Pierre Fabre agrees that it
shall update Cypress through the Working Group of the number of Pierre Fabre Suppliers for each Raw Material, including Starting Materials. 

        8.3    Changes to the API Specifications or to the Manufacturing Process.    Pierre Fabre shall obtain the prior
written consent of Cypress (such consent not to be unreasonably withheld) with respect to any revisions to the API Specifications, and any change in the Raw Materials, equipment, process or procedures
used to manufacture the Bulk API (the "Manufacturing Process") that would require pre-approval of the FDA or other applicable regulatory
authority of any country of the Licensed Territory (the "Pre-Approved Changes"). Pierre Fabre shall not require the consent of Cypress for
any revisions to the API Specifications, or the Manufacturing Process that would not require pre-approval 

12

 

of
the FDA or other applicable regulatory authority of any country of the Licensed Territory ("Other Changes"). Any changes to the API Specifications or
to the Manufacturing Process shall be in compliance with the NDA for Licensed Product and shall be implemented in accordance with a standard operating procedure to be later defined by the Working
Group. The corresponding costs of implementing any changes to the API Specifications or to the Manufacturing Process will be borne by Pierre Fabre. Pierre Fabre will inform the Working Group upon
implementation of any Pre-Approved Changes and shall discuss any proposed Pre-Approved Changes with the Working Group. Once the changes are effective, all references to the API
Specifications shall thereafter be deemed to refer to the API Specifications, as so modified, and all references to the Manufacturing Process, shall thereafter be deemed to refer to the Manufacturing
Process, as so modified. 

        8.4    Cypress' Right to Audit Pierre Fabre Facility.    Cypress and its sub-licensees shall have the
right, at their own expense, to conduct at mutually agreed times, but not more than twice a year, unless a major modification to the Manufacturing Process occurs or unless a quality problem has
arisen, quality control and quality assurance audits and/or inspection of Pierre Fabre's documentation and the facilities where Bulk API is manufactured (including, without limitation, a Second Source
Facility). Pierre Fabre will provide Cypress and its sub-licensees with reasonable access, during business hours upon reasonable prior notice, to Pierre Fabre's facilities where Bulk 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. Upon Cypress' written request, Pierre Fabre shall authorize Cypress or its sub-licensee to consult on site Pierre Fabre's
manufacturing records, including its master and production batch records, for the purposes of assuring product quality and compliance with the Quality Agreement and cGMPs. Cypress acknowledges that
all documentation relating to Pierre Fabre's manufacturing records shall be considered Confidential Information of Pierre Fabre and shall ensure that its sub-licensees are bound by at
least the same level of confidentiality obligations as contemplated by Section 11.2. 

        8.5    Compliance with Laws.    Pierre Fabre shall comply with all applicable present and future orders, regulations,
requirements and laws of the Licensed Territory, and of local authorities and agencies of the Licensed Territory, as well as with all laws and regulations of other territories applicable to the
actions that it undertakes pursuant to this Agreement. Pierre Fabre represents and warrants to Cypress that it has and will maintain during the Term all government permits, including without
limitation health, safety and environmental permits, necessary for the conduct of the actions and procedures that it undertakes pursuant to this Agreement. Cypress shall provide Pierre Fabre with
written notice of any
additional regulatory requirements of countries of the Licensed Territory other than the United States of which Cypress is aware that relate to the manufacture of the Bulk API for such other
territories. 

        8.6    FDA and Regulatory Support.    Pierre Fabre agrees (i) to establish and maintain a Type II FDA Drug
Master File ("DMF") in accordance with the requirements of the FDA, as well as any comparable files required by regulatory authorities in other
countries within the Licensed Territory, (ii) to provide Cypress and its sub-licensees with letters of access to the DMF and any other comparable files and (iii) to further
provide Cypress and its sub-licensees with all necessary information and data regarding the manufacture of Bulk API to the extent necessary for Cypress and its sub-licensees to
prepare and defend any inquiries from the FDA or to exercise the Manufacturing Right set forth in Section 8.11, to satisfy regulatory requirements in the Licensed Territory. Pierre Fabre
further agrees to use Commercially Reasonable Efforts to assist Cypress and its sub-licensees in obtaining FDA approval for its NDA with respect to the Licensed Product, as well as
approvals from any other government or agency which may be required for the marketing of the Licensed Product in any other country within the Licensed Territory. Pierre Fabre specifically agrees to
cooperate with any inspection by the FDA or other regulatory agency, including but not limited to any inspection prior to 

13

 

approval
of Cypress' NDA for the Licensed Product. Pierre Fabre shall notify Cypress and its sub-licensees of which Pierre Fabre is aware within two business days of any FDA inspection
relating to API or any API related facility and, at the conclusion of such inspection, shall be promptly furnished with a copy of all documentation, including any Form 483 and Pierre Fabre
response thereto, relating to such inspection. In addition, Pierre Fabre shall promptly notify Cypress and its sub-licensees of any other regulatory actions or communications (other than
ministerial, non-substantive communications) relating to API or any API related facility. 

        8.7    Documentation.    Pierre Fabre shall keep complete, accurate and authentic accounts, notes, data and records of
the work performed under this Agreement. Each party shall maintain complete and adequate records pertaining to the methods and facilities used for the manufacture, processing, testing, packing,
labeling, holding and distribution of the Bulk API in accordance with the applicable regulations in the Licensed Territory so that the Bulk API may be used in the production of the Licensed Product,
which shall be used in humans. 

        8.8    Reprocessing and Reworking of Bulk API.    Pierre Fabre agrees that any reprocessing or reworking of any batch
or lot of Bulk API shall be made in full compliance with the procedures described in the DMF, or, if not made in compliance with the procedures described in the DMF, Pierre Fabre shall obtain the
prior written consent of Cypress, which consent shall not be unreasonably withheld. 

        8.9    Buffer Stock.    

        (a)    Requirement of Pierre Fabre Buffer Stock.    Beginning on the
date that is [...***...] and thereafter during the Term, Pierre Fabre shall have available (including as a result of API
manufactured by any Second Source Facility) a buffer stock of API (the "Buffer Stock"), as determined by the Working Group on at least an annual basis,
with the initial determination to be made no later than June 30, 2004, subject to Section 8.9(b). In establishing the level of the Buffer Stock, the Working Group may consider the API
and Licensed Product inventory levels that will be maintained by Cypress and its sub-licensees. The level of Buffer Stock will be expressed as a number of months of supply of API and will
be determined based upon the quantities specified in the most recent applicable months of the Delivery Forecast (including Purchase Orders). For example, if the level of Buffer Stock is a  [...***...]
supply, then the Buffer Stock will be an amount of API equal to the quantities of API specified in the  [...***...] of then most recent Delivery Forecast, including the  [...***...]
that constitute Purchase Orders and the  [...***...] immediately following such [...***...].
 

        (b)    Maximum and Minimum Buffer Stock.    The Buffer Stock
determined by the Working Group (i) shall not exceed (A) [...***...] of API, if there is only one manufacturing
facility available for the manufacture of API by or for Pierre Fabre or (B) [...***...] of API if there is more than one
manufacturing facility available for the manufacture of API by or for Pierre Fabre, unless agreed in writing by Pierre Fabre; and (ii) shall not be less than
(x) [...***...] of API at any time there is only one manufacturing facility available for the manufacture of API by or
for Pierre Fabre, or (y) [...***...] of API at any time there is more than one manufacturing facility available for the
manufacture of API by or for Pierre Fabre (the "Minimum Buffer Stock"). 

        (c)    Information on Buffer Stock; Depletion.    Each month, within
seven days after receipt of the applicable Delivery Forecast, Pierre Fabre will calculate the amount of Buffer Stock based on the latest Delivery Forecast and will compare it to the actual current
Buffer Stock (the "Current Buffer Stock"). Pierre Fabre will provide Cypress and its sub-licensees with information regarding the Current
Buffer Stock from time to time. In the event that, at any time, the Current Buffer Stock is less than the Minimum Buffer Stock (a "Shortfall"), then
Pierre Fabre shall, within 15 business days of the discovery of the Shortfall, provide written notice to Cypress of such Shortfall and a written, commercially reasonable plan detailing its plans to
address any problems or issues 

14

 

contributing
to such Shortfall (a "Correction Plan"). If Pierre Fabre provides Cypress a Correction Plan within such 15 business days, Pierre Fabre
shall have a period following the date on which such Shortfall occurred to increase the level of the Current Buffer Stock to at least the Minimum Buffer Stock as follows: (i) a  [...***...] period
if there is then only one manufacturing facility available for the manufacture of API, or (ii) a  [...***...] period if there is then more than one manufacturing facility available for the
manufacture of API. If Pierre Fabre
does not increase the level of the Current Buffer Stock to at least the Minimum Buffer Stock within the [...***...] or  [...***...] period, as applicable,
or notifies Cypress that it reasonably believes in good faith that it will be unable to cure
the Shortfall within such applicable period, or Pierre Fabre does not provide a Correction Plan within the 15 business day period described above, Cypress shall have the right, immediately upon notice
to Pierre Fabre, to exercise the Manufacturing Right under Section 8.11. 

        (d)    Cost of Carrying Buffer Stock; Audit.    The cost of carrying
the Buffer Stock and insuring the same shall be borne by Pierre Fabre. The cost of carrying an inventory of API and Licensed Product maintained by Cypress or its sub-licensees and insuring
the same shall be borne by Cypress or its sub-licensees. Beginning three months after Date of First Commercial Sale, Cypress and its sub-licensees shall have the right to audit
the API inventory levels of Pierre Fabre and the Second Source Facility, if applicable, to verify Pierre Fabre's compliance with this Section 8.9, and Pierre Fabre shall have the right to audit
the API inventory levels of Cypress and its sub-licensees, which audits shall be conducted at the auditing party's expense, at reasonable times and upon reasonable advance written notice. 

        8.10    Second Source Facility.    No later than  [...***...] and
thereafter during the Term, Pierre Fabre shall have qualified and keep qualified an additional manufacturing
facility (a "Second Source Facility"), in addition to the facility located in Gaillac, France, for the production of API to ensure a second source of
supply of API to Cypress. The Second Source Facility must be a second facility operated by Pierre Fabre or any licensee or subcontractor of Pierre Fabre with quality and reliability in manufacturing
comparable to Pierre Fabre's first facility, and such Second Source Facility must be approved by the FDA or other relevant regulatory authorities for the countries of the Licensed Territory such that
the Licensed Products containing API manufactured by the Second Source Facility may be lawfully sold by Cypress. 

        8.11    Manufacturing Rights.    

        (a)    Qualification.    At any time during the Term, Cypress shall
have the right, but not the obligation, to qualify itself or one of its sub-licensees as an additional manufacturing facility that may undertake the manufacture of Bulk API, but may not
exercise the right to manufacture except as expressly provided in Section 8.11(b). 

        (b)    Manufacturing Right.    Without limiting any other right of
Cypress under this Agreement, Cypress shall have the right, but not the obligation, to make itself, or have made by any Third Party, API in order to satisfy Cypress' and its sub-licensees'
requirements of Bulk API (the "Manufacturing Right"), all pursuant to the license granted under Section 8.11(d), if one of the following events
occurs: 

          (i)  If Cypress exercises its rights in respect of a Shortfall pursuant to Section 8.9(c); or 

         (ii)  If Cypress terminates the Restated License Agreement pursuant to Section 14.2(a)(i) or (ii) thereof
or under the circumstances described in Section 10.3(e) of this Agreement. 

In
the event Cypress or its sub-licensee wishes to exercise the Manufacturing Right, Cypress shall provide Pierre Fabre with written notice thereof no fewer than 30 days in advance
of the effective date of such exercise (the "Exercise Date"). 

15

  

        (c)    Duration of Manufacturing Right.    It is agreed by the parties
that: 

          (i)  If Cypress has exercised the Manufacturing Right under Section 8.11(b)(i), the Manufacturing Right shall continue
until Pierre Fabre has resumed and restored its capability to manufacture and supply Cypress' and its sub-licensees' requirements of Bulk API and recommences its manufacture and supply of
Bulk API, or if longer, for the duration of any commercially reasonable obligation to any Third Party supplier entered into in connection with the exercise of the Manufacturing Right. If Cypress and
its sub-licensees continue to have obligations to any Third Party supplier entered into in connection with the exercise of the Manufacturing Right after Pierre Fabre has resumed its
capability to manufacture and supply under this Agreement, Cypress and its sub-licensees will purchase such portion, if any, of their requirements of Bulk API from Pierre Fabre pursuant to
this Agreement as can be purchased given the obligations to such Third Party supplier. When assessing Third Party suppliers in connection with the exercise of the Manufacturing Right, Cypress will
consider any Third Party suppliers suggested by Pierre Fabre and will in good faith attempt to select a Third Party supplier that will permit Pierre Fabre to resume manufacture and supply under this
Agreement as promptly as possible after it is able to do so, subject to commercially reasonable considerations of material differences in qualification, reliability, pricing, quality and other similar
factors, considered as a whole, with respect to such potential Third Party suppliers. Pierre Fabre shall provide Cypress with written notice of its ability to recommence manufacturing and supplying
Cypress and its sub-licensees with their requirements of Bulk API no less than [...***...] months in advance. 

         (ii)  If Cypress has exercised the Manufacturing Right under Section 8.11(b)(ii), then the Manufacturing Right shall be
perpetual. 

        (d)    License Grant.    Effective upon the Exercise Date, Pierre
Fabre hereby grants to Cypress a worldwide, non-exclusive, [...***...] license, with the right to
sub-license, under the Licensed Technology and the Manufacturing Know-How to make and have made API. Such license shall continue so long as the Manufacturing Right continues to
be in effect under Section 8.11(c). In the event a license is granted to Cypress by Pierre Fabre under this Section 8.11(d), Pierre Fabre shall promptly transfer to Cypress or its
sub-licensee such Licensed Technology and Manufacturing Know-How and any other Information and data concerning and related to the manufacture and supply of Bulk API and shall
assist Cypress and any sub-licensee of Cypress in the implementation thereof. 

        (e)    Provision of Information.    In the event the Manufacturing
Right is exercised, Pierre Fabre shall provide Cypress (without cost to Cypress, except as provided in Section 10.3(e), if applicable) all reasonable relevant Information, data and
Manufacturing Know-How necessary or useful
for Cypress to qualify an alternative facility or to manufacture Bulk API, as applicable. In such event, Pierre Fabre also agrees to send to the location designated by Cypress such specialized
technical and scientific personnel as Pierre Fabre deems necessary for a maximum of two stays, each stay not to exceed two weeks to assist in the technical aspects of the manufacturing of the Bulk
API. 

        (f)    Reimbursement of Costs.    Without limiting any other right of
Cypress under this Agreement, upon the Exercise Date if the Manufacturing Right is exercised pursuant to Section 8.11(b)(i), Pierre Fabre agrees to reimburse Cypress for all reasonable and
documented out-of-pocket costs incurred by Cypress and, if applicable, its sub-licensees, in exercising the Manufacturing Right, including, without limitation,
documented costs incurred for transferring the Manufacturing Know-How, laboratory trials, and writing and filing of a DMF. The amounts owed by Pierre Fabre for reimbursement of such costs
will be fully credited against earned royalties due by Cypress to Pierre Fabre under Section 6.4 of the Restated License Agreement. 

16

 

        8.12    Third Party Outsourcing.    On a country by country basis, Pierre Fabre shall remain the exclusive supplier of
API to Cypress and its sub-licensees, until commercial launch of a Generic Product in such country, subject to the terms of this Agreement. In the event of commercial launch of a Generic
Product, including, without limitation, any planned launch of a Generic Product by Cypress or its sub-licensee(s), in a country of the Licensed Territory, then Pierre Fabre will remain
exclusive supplier of the API to Cypress and its sub-licensees for such country, as long as Pierre Fabre can supply API to Cypress and its sub-licensee(s), including, without
limitation, any quantities of API for Generic Product for commercial launch in the event Cypress or its sub-licensee(s) launch the first Generic Product, at a price no greater than  [...***...] above the
price quoted by a Third Party generic supplier (a "Generic
Supplier") for API that Conforms. Cypress may, from time to time, provide notice to Pierre Fabre of its or its sub-licensee's intent to purchase API from a Generic
Supplier (the "Outsourcing Notice"), together with documentation evidencing the lower price for the API that Conforms to be supplied by such Generic
Supplier for such country; provided, that:

        (a)   if, within 30 days following Pierre Fabre's receipt of the Outsourcing Notice, Pierre Fabre has not provided
written notice to Cypress indicating its agreement to lower the price of the API for the applicable country to a level not exceeding  [...***...] above the price quoted by the Generic Supplier, then,
Cypress may notify Pierre Fabre its decision to terminate the
obligation to purchase all API requirements for such country from Pierre Fabre under this Agreement, as provided in Section 10.2(b). Upon receipt of said notice by Pierre Fabre, Cypress may
terminate this Agreement with respect to such country under Section 10.2(b); and 

        (b)   if, within 30 days following Pierre Fabre's receipt of the Outsourcing Notice, Pierre Fabre has provided written
notice to Cypress lowering the price of the API for the quantity in the applicable country so that the Transfer Price of API for such quantity and such country is no greater than  [...***...] above the
price quoted by the Generic Supplier, then Cypress
will remain obligated to purchase API from Pierre Fabre in accordance with the provisions of this Agreement. 

        8.13    Recall of Licensed Product.    For any Licensed Product, in the event that (i) any governmental agency
or authority issues a request or directive or order that Licensed Product be recalled or retrieved; (ii) a court of competent jurisdiction orders that Licensed Product be recalled or retrieved;
or (iii) Cypress or any of its sub-licensees reasonably determines, after reasonable, good faith discussion with Pierre Fabre, that Licensed Product should be recalled or retrieved,
Cypress shall promptly notify Pierre Fabre of such event and shall conduct such activity and take appropriate corrective actions, and Pierre Fabre shall provide such assistance to Cypress and its
sub-licensees as is reasonably necessary to carry out such activities. All reasonable costs and expenses of such recall and corrective actions shall be the responsibility of Cypress or its
sub-licensees, provided that Pierre Fabre shall indemnify Cypress and its sub-licensees for such cost and expense in accordance
with Section 9.2 below. 

9.     WARRANTIES, INDEMNITIES AND ADDITIONAL COVENANTS.  

        9.1    Product Warranty.    Pierre Fabre warrants that API delivered hereunder will: (a) Conform at the
time of delivery; (b) be manufactured by Pierre Fabre in accordance with cGMP and other applicable FDA and other laws, rules and regulations of the United States and as applicable, the other
countries in the Licensed Territory; (c) have the Minimum Time to Retesting; and (d) not be adulterated or misbranded within the meaning of the FD&C Act. The parties acknowledge that
Pierre Fabre will be responsible for the stability of the Bulk API for the shelf life indicated in the API Specifications, subject to Cypress evidencing that, during its total shelf life,
transportation, storage and use of the Bulk API have been made in accordance with Pierre Fabre's instructions. 

17

 

        9.2    Indemnification.    

        (a)    Cypress Indemnification.    Cypress hereby agrees to save,
defend, indemnify and hold harmless Pierre Fabre and its shareholders, officers, directors, employees, consultants and agents ("Pierre Fabre
Indemnitees") from and against, and to pay on behalf of or reimburse such Pierre Fabre Indemnitees for, any and all losses, damages, liabilities, expenses and costs, whether
based on products liability or otherwise, including, but not limited to, court costs and reasonable attorneys' fees and expenses (collectively,
"Losses"), to which any Pierre Fabre Indemnitee may become subject as a result of any claim, demand, action or other proceeding by any Third Party (an  "Action") to the extent such Losses
arise directly out of (i) the material breach by Cypress of any representation or warranty under this Agreement, or (ii) the development, manufacture, use, handling and storage, sale or
other disposition of any Licensed Product by Cypress, its Affiliates and sub-licensees, except to the extent such Losses result from the negligence or willful misconduct of any Pierre
Fabre Indemnitee or are Losses for which Pierre Fabre is obligated to indemnify any Cypress Indemnitee under Section 9.2(b). 

        (b)    Pierre Fabre Indemnification.    Pierre Fabre hereby agrees to
save, defend, indemnify and hold harmless Cypress and its sub-licensees and their respective shareholders, officers, directors, employees, consultants and agents
("Cypress Indemnitees") from and against, and to pay on behalf of or reimburse such Cypress Indemnitees for, any and all Losses to which any Cypress
Indemnitee may become subject as a result of any Action to the extent such Losses arise directly out of (i) the material breach by Pierre Fabre of any representation or warranty under this
Agreement, (ii) the manufacture, use, handling and storage of API by Pierre Fabre, its Affiliates, licensees and sub-contractors (other than Cypress or its
sub-licensees), except to the extent such Losses result from the negligence or willful misconduct of any Cypress Indemnitee or are Losses for which Cypress is obligated to indemnify any
Pierre Fabre Indemnitee under Section 9.2(a) or (iii) to the extent that the recall and corrective actions taken under Section 8.13 are caused by (x) any breach by Pierre
Fabre of its obligations or representations under this Agreement, or (y) any intentional or negligent act or omission of Pierre Fabre or its Affiliates or any of their directors, officers,
employees or agents in connection with the manufacture and supply of API. 

        (c)    Limitation of Liability.    Except as provided in
Section 11.2, 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. 

        9.3    Control of Defense.    

        (a)   The party seeking indemnification under Section 9.2 (the "Indemnified
Party"), agrees to give notice to the party providing such indemnification (the "Indemnifying Party") of the assertion of any
claim, or commencement of any Action in respect of which indemnity may be sought under Section 9.2 promptly after receipt of notice from a Third Party of the assertion or commencement of such
Action. Failure to notify the Indemnifying Party shall not relieve the Indemnifying Party of any liability that the Indemnifying Party might have to the Indemnified Party unless and to the extent such
failure can be demonstrated to have materially prejudiced the Indemnifying Party's position. 

        (b)   The Indemnifying Party shall be entitled, at its own expense, to participate in or, to the extent that it desires, to
assume the defense of any such Action with its own counsel. If the Indemnifying Party elects to assume such defense, it shall select counsel for the Indemnified Party, which may be the same counsel as
for the Indemnifying Party, at the Indemnifying Party's expense, subject to the limitations set forth below in this Section 9.3. In such a case, the Indemnified Party shall not be entitled to
reimbursement for the costs of its own counsel. 

18

 

        (c)   The Indemnifying Party shall not be entitled to assume the defense of an Action (unless otherwise agreed to in writing by
the Indemnified Party) and shall pay the fees and expenses of counsel reasonably acceptable to the Indemnifying Party retained by the Indemnified Party if (1) the claim for indemnification
relates to or arises in connection with any criminal or quasi-criminal proceeding, action, indictment, allegation or investigation; or (2) the Indemnified Party has been advised by counsel
reasonably acceptable to the Indemnifying Party that a reasonable likelihood exists of a conflict of interest between the Indemnifying Party and the Indemnified Party. 

        (d)   Even if the Indemnifying Party has assumed control of the defense for an Indemnified Party, the Indemnified Party shall
be entitled to participate in the defense of an Action and to employ counsel of its choice for such purpose; provided that the fees and expenses of such
separate counsel shall be borne by the Indemnified Party (other than any fees and expenses of such separate counsel that are incurred prior to the date the Indemnifying Party effectively assumes
control of such defense which, notwithstanding the foregoing, shall be borne by the Indemnifying Party, and except that the Indemnifying Party shall pay all of the fees and expenses of such separate
counsel under the circumstances outlined in Section 9.3(c) above). 

        (e)   Each party agrees to cooperate to the fullest extent possible as requested by the other in the defense of the claim
arising out of an Action, with out-of-pocket expenses resulting from any such cooperation to be at the expense of the Indemnifying Party. 

        (f)    If the Indemnifying Party shall control the defense of an Action, the Indemnifying Party shall obtain the prior written
consent of the Indemnified Party before entering into any settlement of a claim or ceasing to defend such claim if, pursuant to or as a result of such settlement or cessation, injunctive or other
equitable relief will be imposed against the Indemnified Party or if such settlement does not expressly and unconditionally release the Indemnified Party from all liabilities and obligations with
respect to such claim, without prejudice. 

        (g)   Notwithstanding anything to the contrary in this Agreement, to the extent that an Indemnified Party receives insurance
proceeds as a result of any Loss, the Indemnified Party shall pay the amount of such insurance proceeds (but not in excess of the indemnification payment or payments actually received
from the Indemnifying Party with respect to such Loss) to the Indemnifying Party promptly after such insurance proceeds are actually received by the Indemnified Party. 

        9.4    Insurance.    

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

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

19

 

        9.5    Mutual Representations and Warranties.    Each party represents and warrants to the other that, as of the
Effective Date: 

        (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 or have 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 Term, grant any right to any Third Party that 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. 

        9.6    Pierre Fabre Representations and Warranties.    Pierre Fabre represents and warrants to Cypress that, as of the
Effective Date: 

        (a)    Ownership of Licensed Technology and Manufacturing
Know-How.    Pierre Fabre owns or otherwise has adequate rights to the Licensed Technology and the Manufacturing Know-How and has the right to
perform its obligations under this Agreement and such obligations do not conflict with or violate the terms of any agreement between Pierre Fabre and any Third Party. It owes no royalties or other
obligations to any Third Party (including, without limitation, officers, directors, employees or other consultants or agents of Pierre Fabre), in connection with its rights to the Licensed Technology,
and such rights are not subject to termination or limitation by 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 or the
Manufacturing Know-How nor is Pierre Fabre aware of any reasonable basis for such proceeding or claim. 

        (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 and the practice of the Manufacturing Know-How to manufacture API and Bulk
API 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 or alleging that the practice of the Manufacturing Know-How infringes or may infringe any intellectual property rights of any Third Party nor
is Pierre Fabre aware of any reasonable basis for such proceeding or claim. 

        9.7    Pierre Fabre Covenant.    Pierre Fabre has disclosed to Cypress all Pierre Fabre Know-How requested
by Cypress and to the extent required under this Agreement, the Manufacturing Know-How, requested by Cypress and will continue after the Effective Date to disclose and provide to Cypress,
all Confidential Information and data in the possession of Pierre Fabre or its Affiliates which is reasonably necessary for Cypress or its sub-licensees to prepare and defend to any
inquiries from the FDA or other relevant authorities in any country of the Licensed Territory. 

20

 

10.   TERM; TERMINATION.  

        10.1    Term.    The term of this Agreement shall commence on the Effective Date and continue for a period of
10 years from the First Commercial Sale of the Licensed Product by Cypress, its Affiliates and/or sub-licensees in the Licensed Territory, unless sooner terminated in accordance
with Section 10.2 (the "Term"). Twelve months prior to the expiration of the Term, Cypress and Pierre Fabre will mutually decide whether or not
the supply relationship should be extended and if the parties mutually agree to extend such supply relationship, the parties shall attempt to agree on the terms of such supply relationship. 

        10.2    Early Termination.    

        (a)    Termination for Cause 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
(provided that the existence of a Shortfall and the exercise of the Manufacturing Right in connection therewith shall not constitute a breach of a
material provision of this Agreement by Pierre Fabre so long as Pierre Fabre complies with its obligations under Section 8.11) if the breaching party has not cured such breach within the
90 day (30 day in the event of a breach of Section 6) period following written notice of termination by the non-breaching party, or, if such breach (excluding any
breach of Section 6) is not susceptible of cure within such 90 day period, the breaching party has not taken appropriate steps to cure during such 90 day period and continued to
diligently pursue such cure in a manner reasonably assuring such cure within a reasonable period of time thereafter. In addition, termination shall not be permitted for a payment breach where the
obligation to make payment is being diligently contested in good faith by appropriate proceedings and any required payment is promptly made following completion of dispute resolution as contemplated
hereby. In any event, if any such breach has not been cured within one year of the date of occurrence of the breach, the non-breaching party may terminate this Agreement under this
Section. 

        (b)    Termination by Cypress.    Cypress may terminate its rights and
obligations under this Agreement with respect to the applicable country, if within 30 days following receipt of an Outsourcing Notice sent by
Cypress pursuant to Section 8.12, Pierre Fabre has not provided written notice to Cypress agreeing to lower the price of the API to a level not exceeding  [...***...] above the price quoted by a
Generic Supplier. 

        (c)    Termination by Pierre Fabre.    Pierre Fabre may terminate this
Agreement as provided in Section 11.8(b). 

        (d)    Termination of the Restated License Agreement.    This
Agreement shall automatically terminate upon early termination of the Restated License Agreement by Pierre Fabre pursuant to Sections 14.2(a) or 14.2(b) of the Restated License Agreement. 

        10.3    Effect of Expiration; Termination; Surviving Obligations.    

        (a)   Upon early termination of this Agreement by Cypress pursuant to Section 10.2(a), in addition to the provisions set
forth in Section 10.3(c), Sections 8.11(b), 8.11(c), 8.11(d) and 8.11(e) shall survive such termination. 

21

 

        (b)   Upon early termination of this Agreement by Pierre Fabre pursuant to Section 10.2(a) or 10.2(d), then: 

          (i)  all rights granted to Cypress hereunder shall terminate, and, subject to Section 10.3(d), Cypress and its
affiliates and sub-licensees shall cease all use of such Manufacturing Know-How and shall comply with the provisions of Section 11.2 with respect to Pierre Fabre's
Confidential Information; and 

         (ii)  the Restated License Agreement shall automatically terminate with the consequences described in
Section 14.3(b)(ii) of the Restated License Agreement. 

        (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 9.2. "Indemnification", 9.3 "Control of Defense", 10.3
"Effect of Expiration; Termination; Surviving Obligations", 10.4 "Exercise of Right to
Terminate", 10.5 "Damages; Relief", 11.1 "Dispute Resolution and Arbitration", 11.2 "Confidentiality" and 11.3 "Governing Law and Venue" shall survive expiration or termination of this Agreement. 

        (d)   Upon early termination of this Agreement under Section 10.2(d) as a result of early termination of the Restated
License Agreement by Pierre Fabre pursuant to Section 14.2(a)(i), this Agreement shall survive as to any sub-licensee under a sub-license granted Cypress under the
License Agreement that survives and becomes a direct license from Pierre Fabre under this Agreement (other than to Forest, which shall instead be subject to the following provisions) such that such
sub-licensee shall assume all rights and obligations of Cypress under this Agreement. In addition, any rights granted to Cypress pursuant to this Agreement shall survive early termination
of this Agreement by Pierre Fabre and become direct rights granted from Pierre Fabre to Forest under this Agreement with respect to the applicable territory if: 

          (i)  Forest becomes a direct licensee from Pierre Fabre pursuant to Section 14.3(b)(iv) of the Restated License
Agreement; 

         (ii)  such early termination of this Agreement by Pierre Fabre occurred pursuant to
(1) Section 10.2(a)(i) or 10.2(d), or (2) Section 10.2(a)(ii) if Forest (including any Affiliate of Forest that is primarily responsible for the activities of
Forest under the Collaboration Agreement) did not cause the breach of any material provision of this Agreement by Cypress that resulted in such early termination and cures any such payment breach by
Cypress to the extent related to the jurisdictions in which Forest holds a sub-license from Cypress, or (3) Section 10.2(c) if Forest (including any Affiliate of Forest that
is primarily responsible for the activities of Forest under the Collaboration Agreement) is not the Third Party that acquired Cypress in such Change in Control transaction that resulted in such early
termination; and 

       (iii)  Forest agrees to assume the obligations of Cypress under this Agreement in writing, there is no evidence that an event
has occurred or condition exists that would be reasonably likely to result in an event of default by Forest under the terms of this Agreement over the year following the effective date of the early
termination, and the scope of the sub-license to Forest under the License Agreement is substantially similar to that reflected in the Collaboration Agreement as of the date hereof, unless
amended with Pierre Fabre's consent. 

        (e)   In the event that, upon expiration of the Term, this Agreement is not extended pursuant to Section 10.1, then all
rights granted to Cypress hereunder shall terminate as of the last day of the Term, except as provided in Section 10.3(c), and Cypress, its Affiliates and sub-licensees shall cease
all use of the Manufacturing Know-How and shall comply with the provisions of Section 11.1 with respect to Pierre Fabre's Confidential Information. However, in the event that this
Agreement 

22

 

is
not extended because Pierre Fabre is unable or unwilling to agree to the same financial terms as set forth herein at the time such negotiation occurs and there is no qualified supplier of API then
able to supply API on commercially reasonable terms, then the provisions of Section 8.11(b), (c), (d) and (e) shall apply, as if the Manufacturing Right had been duly exercised
under those sections, and shall survive the expiration of this Agreement, except that, in such a case, Cypress shall reimburse Pierre Fabre for its reasonable and documented costs associated with the
transfer of the Manufacturing Know-How, including the assistance provided by Pierre Fabre if requested by Cypress. 

        (f)    All licenses granted under this 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 this Agreement will retain and may fully exercise all of its rights and elections under the US Bankruptcy Code. 

        10.4    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. 

        10.5    Damages; Relief.    Unless otherwise provided in this Agreement, 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. 

11.   GENERAL PROVISIONS.  

        11.1    Dispute Resolution and Arbitration.    In the event of a dispute arising in connection with this Agreement,
the provisions set forth as Sections 16.1 and 16.2 of the Restated License Agreement shall apply; provided, however, that the reference to
Section 9.3 in Section 16.2(a) of the Restated License Agreement shall be deemed to refer to Section 7.4(f) of this Agreement for purposes of applying such provisions to a dispute
arising under this Agreement. 

        11.2    Confidentiality.    Pierre Fabre and Cypress agree that the provisions of Section 13 of the Restated
License Agreement regarding the obligations of both Pierre Fabre and Cypress with respect to Confidential Information shall also govern the parties' obligations under this Agreement. Further, the
parties agree that the term "Confidential Information" as defined in the Restated License Agreement shall also include all information furnished to it
by the other party pursuant to this Agreement, including Manufacturing Know-How which may be disclosed by Pierre Fabre to Cypress. 

        11.3    Governing Law.    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. 

        11.4    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. 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. 

23

  

        11.5    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. 

        11.6    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. 

        11.7    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;  providing, that any assignment made by Cypress shall be made in full compliance with the provisions of Section 11.8
"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. 

        11.8    Change of Control.    In the event of a proposed Change in Control, 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 pursuant to
Section 10.2(c). 

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

        11.10    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. 

        11.11    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 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 

24

 

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 Pierre Fabre, notices must be addressed to: 

Pierre
Fabre Médicament

Parc Industriel de la Chartreuse 1

81106 Castres, Cédex

France

Attention:  Chief Operating Officer

Telephone:  [...***...]

Facsimile:  (33) 5 63 71 45 34 

        with
a copy to: 

Pierre
Fabre Médicament

La Chartreuse I

81106 Castres, Cédex

France

Attention:  General Counsel

Telephone:  [...***...]

Facsimile:  (33) 5 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 

        11.12    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 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 ten calendar days after its occurrence. In no event shall any party be required to prevent or settle any labor disturbance or dispute. 

        11.13    Legal Fees.    If any party to this Agreement resorts to any legal action, dispute resolution or arbitration
in connection with this Agreement, then, subject to Section 11.1 of this Agreement and 

25

 

Section 16.2
of the Restated License 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. 

        11.14    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. 

        11.15    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. 

        IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be signed and delivered by its duly authorized officer or
representative as of the date first set forth above. 

	
PIERRE FABRE MÉDICAMENT	
 	

CYPRESS BIOSCIENCE, INC.
	

By:	

/s/  JEAN PIERRE COUZINIER      
	
 	

By:	

/s/  JAY KRANZLER      

	

Name:	

Jean Pierre Couzinier
	
 	

Name:	

Dr. Jay Kranzler

	

Title:	
Chief Operating Officer
	
 	

Title:	
Chief Executive Officer

26

 
 
 

EXHIBIT I    
    
    Milnacipran hydrochloride
  US DMF # 11501—Specifications    
    

[...***...]

*Confidential Treatment Requested  

27

 
[...***...]

*Confidential Treatment Requested  

28

 
 
 

EXHIBIT II    
    
    RESPONSIBILITIES OF THE WORKING GROUP    
    

        [...***...]

*Confidential Treatment Requested  

29

 
 
 

EXHIBIT III    
    
    Example of changes in forecasts    
    

        [...***...]

*Confidential Treatment Requested  

30

 
 
 

EXHIBIT IV    
    
    Quality Agreement Example    
    
    QUALITY AGREEMENT (QA) TABLE OF CONTENTS GUIDELINE    
    

	I.
	Quality Control/Quality Assurance/Regulatory
	A.
	Regulatory
Requirements 
	B.
	Regulatory
Annual Report 
	C.
	Regulatory
Drug Listing 
	D.
	Regulatory
Drug Master Files (DMF) 
	E.
	FDA
and Regulatory Agencies Inquires / Inspections / Notifications

•    Communication and Support Process

•    Regulatory Inspections, Inspection Observations (483),Warning Letter, Recall 
	F.
	External
Audits: Periodic GMP Assessments of Supplier 
	G.
	Internal
Audits: Suppliers Self Inspection/Audit Program 
	H.
	Product
and Process Qualification 
	I.
	Training/Qualification
Program 
	J.
	Batch
(Lot) Numbers 
	K.
	Incoming
Raw Material/Component Inspections and Control 
	L.
	Equipment
Calibration, Qualification and Maintenance 
	M.
	QA
Presence in Facility 
	N.
	Product
Expiration Dating Assignment and Storage Conditions 
	O.
	In-Process
Controls 
	P.
	Laboratory
Analysis 
	Q.
	Non-Conforming
or Rejected Material 
	R.
	Deviations
and Lab 00S Investigations 
	S.
	Finished
Product Release and Shipping Requirements 
	T.
	Retain
Samples 
	U.
	Batch
Documentation and Quality Records 
	V.
	Printed
Package Materials (PPM) 
	W.
	Destroy
Order System for Printed Components 
	X.
	Change
Notification and Change Control 
	Y.
	Stability

	Z.
	Product
Complaints and Adverse Drug Events (ADE) 
	AA.
	Annual
Product Quality Review (PPQE) 
	BB.
	Specifications
and Specification Change Request 
	CC.
	Laboratory
Methods, Methods Validation, Method Transfer and Laboratory Method/Specifications Change Request 
	DD.
	Reference
Standard 
	EE.
	Subcontracting
and Component Vendors

•    Approved Supplier List for Raw Materials

•    Approval/Evaluation Process

•    Right to Use or Not Use Comments 

31

QuickLinks

Exhibit 10.25

EXHIBIT I Milnacipran hydrochloride US DMF # 11501—Specifications

EXHIBIT II RESPONSIBILITIES OF THE WORKING GROUP

EXHIBIT III Example of changes in forecasts

EXHIBIT IV Quality Agreement Example QUALITY AGREEMENT (QA) TABLE OF CONTENTS GUIDELINEQuickLinks
 -- Click here to rapidly navigate through this document
  

 
 

Exhibit 10.26    
    

***Text Omitted and Filed Separately

Confidential Treatment Requested

Under 17 C.F.R. §§ 200.80(b)(4)

and 240.24B-2

 
 

LICENSE AND COLLABORATION AGREEMENT    
    

        THIS LICENSE AND COLLABORATION AGREEMENT (this "Agreement") is
entered into as of January 9, 2004 (the "Effective Date") by and between FOREST LABORATORIES IRELAND
LIMITED, an Irish corporation ("Forest"), having its principal executive offices at Clonshaugh Industrial Estate, Clonshaugh,
Dublin 17, Republic of Ireland, and CYPRESS BIOSCIENCE, INC., a Delaware corporation ("Cypress"), having offices at 4350 Executive Drive, Suite
325, San Diego, CA 92121, United States of America. 

RECITALS  

        WHEREAS, Cypress and Pierre Fabre Médicament ("Pierre
Fabre") entered into the Third Restated License Agreement as of the date hereof, as may be amended (the "License Agreement"), a
copy of which has been provided to Forest, pursuant to which Pierre Fabre granted to Cypress an exclusive license to certain patents and know-how to develop and commercialize Milnacipran
(as defined below); 

        WHEREAS, Cypress and Pierre Fabre also entered into the First Restated Trademark License Agreement as of the date hereof, as may be
amended (the "Pierre Fabre Trademark Agreement"), a copy
of which has been provided to Forest, pursuant to which Pierre Fabre granted an exclusive license to Cypress to certain trademarks; and 

        WHEREAS, Forest desires to acquire, and Cypress is willing to grant to Forest, an exclusive license under patents and know-how
controlled by Cypress to develop and commercialize Milnacipran, including a sublicense of the rights granted to Cypress by Pierre Fabre under the License Agreement and the Pierre Fabre Trademark
Agreement, all on the terms and conditions set forth in this Agreement. 

AGREEMENT  

        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  

        For purposes of this Agreement, the following capitalized terms shall have the following meanings: 

        1.1   "Administrator" shall have the meaning set forth in Section 16.2(a). 

        1.2   "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 more than 50% of the voting stock or other
ownership interests of that entity, or the power, directly or indirectly to cause the direction of the management and policies of such entity. 

        1.3   "Agreement" shall have the meaning set forth in the introductory paragraph. 

        1.4   Allowable Costs and Expenses" shall mean those costs and expenses incurred by Forest or for its
account that are specifically attributable or related to the manufacturing, marketing or 

1

 

selling
of a Generic Product in the Licensed Territory, and consisting of: Cost of Goods, General and Administrative Expenses, and Sales and Marketing Expenses, using the following defined terms. 

        (a)   "Allocable Overhead" means (for any particular cost item) Forest's internal allocation, based on
direct project headcount or other generally accepted activity based accounting methods, of indirect overhead costs incurred by Forest to support and carry out the activities of the specific business
function, such as manufacturing, and sales and marketing, with respect to Generic Product for the Licensed Territory, which indirect costs may include but are not limited to: indirect labor costs;
occupancy costs; repair and maintenance costs; office supplies and service costs; equipment costs; insurance costs; and outside professional and other service costs. Such overhead will exclude any
indirect costs associated with any excess or unused capacity not directly related to Generic Product for the Licensed Territory. Furthermore, overhead costs of Forest that are not directed to the
manufacturing, marketing or selling of a Generic Product in the Licensed Territory will not be recoverable as Allocable Overhead or otherwise, except as expressly provided herein. 

        (b)   "Cost of Goods" shall mean the cost of Generic Product shipped in either bulk or final
therapeutic form, as applicable. As used herein, the cost of Generic Product means (a) in the case of products and services acquired from Third Parties, payments made to such Third Parties,
including without limitation, royalties paid to Pierre Fabre or other Third Parties, and (b) in the case of manufacturing services performed by Forest or its Affiliates, including manufacturing
services in support of Third Party manufacturing, the actual unit costs of manufacture in bulk form or final manufacturing, as the case may be, plus the variances and other costs specifically provided
for herein. Actual unit costs shall consist of direct material and direct labor costs and Allocable Overhead specifically attributable to the Generic Product at standard unit costs, all calculated in
accordance with reasonable cost accounting methods, consistently applied, of Forest. Direct material costs shall include the costs incurred in purchasing materials, including sales and excise taxes
imposed thereon and customs duty and charges levied by government authorities, and all costs of packaging components. Direct labor shall include the cost of employees engaged in direct manufacturing
activities and direct or indirect quality control and quality assurance activities who are directly employed in Generic Product manufacturing and packaging. Allocable Overhead included in Cost of
Goods shall include other indirect costs associated with the operating unit(s) manufacturing Generic Product for the Licensed Territory. Such Allocable Overhead will include, but not be limited to,
expenses associated with: warehousing of Generic Product in the Licensed Territory; quality assurance, manufacturing and engineering associated with the operating unit(s) manufacturing Generic Product
for the Licensed Territory; and depreciation, repairs and maintenance, insurance and property taxes associated with the plant(s) manufacturing Generic Product for the Licensed Territory. Allocable
Overhead will not include costs associated with capacity not incorporated into standard unit costs. Standard unit costs will exclude costs associated with excess or unused capacity not directly
related to Generic Product for the Licensed Territory. 

        (c)   "General and Administrative Expenses" shall mean Forest's customary allocation, based on direct
project headcount or other generally accepted activity-based accounting methods, of the costs of the following corporate general and administrative functions of Forest incurred to support or
facilitate the manufacturing, marketing or selling of Generic Products in the Licensed Territory: finance and accounting; purchasing and receiving; management information systems; facilities; human
resources; executive management; and legal, patent and trademark. Such costs include, but not limited to, the costs of employees performing such functions, the direct costs of supporting such
individuals in the performance of their jobs (e.g., travel, floor space, computers and other supplies and telephones) and the actual cost of outside services 

2

 

(e.g.,
consulting and audit services). In view of the manner in which General and Administrative Expenses are calculated, administration expenses will be excluded from the definition of each of the
other cost items that make up Allowable Costs and Expenses. Notwithstanding any other provision of this Agreement, total General and Administrative Expenses will not exceed 35% of Net Sales of such
Generic Product in the Licensed Territory in any quarter, except as otherwise agreed in writing by the parties. 

        (d)   "Sales and Marketing Expenses" shall mean the costs which are incurred by Forest or for its
account attributable to the distribution, sale, promotion and marketing of Generic Product in the Licensed Territory, calculated on a fully burdened basis (i.e., including Allocable Overhead
specifically attributable thereto). Sales and Marketing Expenses shall mean the sum of Selling Expenses, Marketing Management, Market and Consumer Research, Advertising, Trade Promotion, Consumer
Promotion, Education Expenses and Freight and Transportation—Out, each of which is specified below. The costs of activities which promote Forest's business as a whole without being product
specific (such as corporate image advertising) are specifically excluded from Sales and Marketing Expenses. To the extent multiple products are involved and some of such products are not Generic
Product, then such allowances will be allocated on a pro rata basis based upon net sales of each respective product by such operating unit during the most recent quarter. Within 30 days of the
end of a calendar year, the parties will make reconciling payments, if any are required, to reflect any difference between actual costs and such allocation for such year. 

        (i)    "Advertising" will include, but not be limited to, all media costs associated with Generic
Product advertising in the Licensed Territory as follows: production expense/artwork including set up; design and art work for an advertisement; the cost of securing print space, air time, etc. in
newspapers, magazines, trade journals, television, radio, billboards, etc. 

        (ii)   "Consumer Promotion" will include, but not be limited to, the expenses associated with programs
to promote Generic Product in the Licensed Territory directly to the prescriber or end user. This category will include, but not be limited to, expenses associated with promoting products directly to
the professional community such as professional samples, professional literature, promotional material costs, patient aids and detailing aids. To the extent multiple products are involved and some of
such products are not Generic Product, then such allowances will be allocated on a pro rata basis based upon net sales of each respective product by such operating unit during the most recent quarter. 

        (iii)   "Education" will include, but not be limited to, expenses associated with
professional education with respect to a Generic Product in the Licensed Territory through any means not covered above, including, but not limited to, articles appearing in journals, newspapers,
magazines or other media; seminars, scientific exhibits, and conventions; and symposia, advisory boards and opinion leader development activities. 

        (iv)   "Freight and Transportation—Out" will include (to the extent not
already recovered in the calculation of Net Sales), but not limited to, the portion of distribution costs relating to moving Generic Product in the Licensed Territory from a warehouse to the customer
as follows: outbound transportation costs; costs of moving goods from a manufacturing point to a warehouse at another location from which it is ultimately to be distributed to a customer; the costs of
the traffic department where there is a separate department that has responsibility for administration of freight costs. 

        (v)   "Market and Consumer Research" will include, but not be limited to, compensation and departmental
expenses for market and consumer research personnel 

3

 

and
payments to Third Parties related to conducting and monitoring professional and consumer appraisals of existing, new or proposed Generic Product in the Licensed Territory, such as market share
services (e.g., IMS data), special research testing and focus groups. 

        (vi)   "Marketing Management" will include, but not be limited to, product management and
sales promotion management compensation and departmental expenses. This will include, but not be limited to, costs associated with developing overall sales and marketing strategies (e.g., product line
or customer segment), as well as planning and programs for Generic Product in the Licensed Territory. In addition, payments to Third Parties in connection with trademark selection, filing, prosecution
and enforcement in the Licensed Territory will be included in this category. 

        (vii)   "Selling Expenses" will include, but not be limited to, the following costs
directly associated with the efforts of field sales representatives with respect to Generic Product in the Licensed Territory: field sales force; field sales offices; home offices; staffs directly
involved in the management of and the performance of the selling functions; and payments to Third Parties under contract sales and marketing agreements. The costs of detailing sales calls will be
allocated on a weighted average basis based on the proportionate time and effort given to the detailing of Generic Product versus product other than Generic Product at an accounting charge rate
consistently applied within and across Forest's or a Third Party's operating units and which is no less favorable than the internal charge rate used by Forest or such Third Party for its own internal
cost accounting purposes for products other than Generic Product (excluding internal profit margins and markups). 

        (viii)   "Trade Promotion" will include, but not be limited to, the allowances given to
retailers, brokers, distributors, hospital buying groups and similar groups for purchasing, promoting, and distribution of Generic Product in the Licensed Territory. This will include, but not be
limited to, purchasing, advertising, new distribution, and display allowances as well as free goods, wholesale allowances and reasonable field sales samples. 

        1.5   "ANDA" shall mean an Abbreviated New Drug Application filed with the FDA (as more fully defined
in 21 USC. §355(j)), 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. 

        1.6   "ANDA Proceeding" shall have the meaning set forth in Section 11.4(b). 

        1.7   "Annual Cypress Percentage" shall have the meaning set forth in Section 3.5(b). 

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

        1.9   "Arbitrators" shall have the meaning set forth in Section 16.2(a). 

        1.10   "Bulk Licensed Product" shall mean Licensed Product in final dosage form or any
Forest Formulation, as defined in the Letter Agreement. 

        1.11   "Change in Control" means (i) a sale, lease or other disposition of all or
substantially all of the assets of the company; (ii) a merger or consolidation of the company in which the holders of the company's outstanding voting stock immediately prior to such
transaction own, immediately after such transaction, securities representing less than 50% of the voting power of such company or such company's parent or, if such company 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 

4

 

amended
(the "Exchange Act"), or any comparable successor provisions (excluding any employee benefit plan, or related trust, sponsored or maintained by
the company or any entity controlled by such company) of the beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act, or comparable successor rule)
of securities of the company representing at least 50% of the combined voting power entitled to vote in the election of the members of the Board of Directors; provided,
however, that clause (ii) shall not apply to a merger effected exclusively for the purpose of changing the domicile of the company or the name of the company. 

        1.12   "Claim" shall have the meaning set forth in Section 16.2(a). 

        1.13   "Collegium" shall mean Collegium Pharmaceutical, Inc. 

        1.14   "Collegium Agreement" shall mean the Reformulation and New Product Agreement
between Collegium and Cypress dated August 22, 2002, as may be amended. 

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

        1.16   "Control" shall mean, with respect to any Information or intellectual property
right, possession by a party of the ability (whether by ownership, license or otherwise, other than any license granted under this Agreement) to grant access, a license or a sublicense to such
Information or intellectual property right as provided for herein without violating the terms of any agreement or other arrangement with any Third Party as of the time such party would first be
required hereunder to grant the other party such access, license or sublicense, or at any other time during the term of such access, license or sublicense. 

        1.17   "Co-Promotion Rights" shall have the meaning set forth in
Section 3.7. 

        1.18   "Cypress" shall have the meaning set forth in the introductory paragraph. 

        1.19   "Cypress Analog" shall mean all analogs of Milnacipran, and products that contain
or are comprised of the foregoing, that are Controlled by Cypress other than pursuant to the License Agreement. 

        1.20   "Cypress Collegium Compounds" shall have the meaning set forth in
Section 2.4(d). 

        1.21   "Cypress Compound" shall mean all Cypress Analogs and Cypress Formulations. 

        1.22   "Cypress FDA Contact" shall have the meaning set forth in Section 3.2. 

        1.23   "Cypress Formulation" shall mean all formulations of Milnacipran, and products
that contain or are comprised of the foregoing, that are Controlled by Cypress other than pursuant to the License Agreement. 

        1.24   "Cypress Information" shall mean all data and Information developed or acquired by
or for Cypress or its Affiliates in the course of performance of the Agreement. Cypress Information excludes Licensed Patents. 

        1.25   "Cypress Sales Force" shall mean those members of Cypress' sales force (whether
Cypress employees, contractors or agents), who promote Licensed Product pursuant to the exercise of the Promotion Rights. 

        1.26   "Cypress Trademark Agreement" shall have the meaning set forth in
Section 5.2. 

        1.27   "Date of First Commercial Sale" shall mean the actual date of first commercial
sale of a Licensed Product in the Licensed Territory. 

        1.28   "Development Plan" shall mean the development plan relating to the development of
Licensed Product in the Field, including but not limited to, the current two planned Phase III clinical trials and extensions for Licensed Product, in the form attached as  Exhibit A, as may be

5

 

amended
from time to time by written agreement of Cypress and Forest, which plan shall allocate the responsibilities of Cypress and Forest in conducting development activities. 

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

        1.30   "Equity Issuance Agreement" shall mean the Equity Issuance Agreement between
Cypress and Forest to be entered into within 30 days of the Effective Date. 

        1.31   "Estimated Date of First Commercial Sale" shall mean the estimated Date of First
Commercial Sale of a Licensed Product in the Licensed Territory. 

        1.32   "Exclusive Period" shall have the meaning set forth in Section 2.4(e). 

        1.33   "FDA" shall mean the United States Food and Drug Administration or any successor
agency. 

        1.34   "Field" shall mean any and all indications. 

        1.35   "Finished Licensed Product" shall mean Licensed Product in final dosage form
including final packaging and ready for use by the consumer. 

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

        1.37   "Forest" shall have the meaning set forth in the introductory paragraph. 

        1.38   "Forest Information" shall mean all data and Information developed or acquired by
or for Forest or any of its Affiliates or sublicensees in the course of performance of, or pursuant to any right granted under, this Agreement. 

        1.39   "Forest Parent" shall mean Forest Laboratories, Inc., a Delaware
corporation. 

        1.40   "Forest Product" shall have the meaning set forth in Section 5.4(c). 

        1.41   "Forest Sales Force" shall mean those members of Forest's sales force (whether
Forest employees, contractors or agents), who promote Licensed Product, but excluding the Cypress Sales Force. 

        1.42   "FTE" shall mean the equivalent of the work time of an employee or consultant of
Cypress with appropriate qualifications performing work under the R&D Plan on a full-time basis over a 12-month period (including normal vacations, sick days and holidays). 

        1.43   "Generic Product" shall have the meaning set forth in Section 2.3. 

        1.44   "Hatch-Waxman Act" shall mean the Drug Price Competition and Patent Term
Restoration Act of 1984, as amended. 

        1.45   "Impairment" shall mean the registration, marketing or sale of a product for FMS
(excluding a Licensed Product) during the Exclusive Period. 

        1.46   "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. 

        1.47   "Indemnifying Party" shall have the meaning set forth in Section 15.2. 

        1.48   "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 

6

 

physical,
biological or chemical material, and (c) marketing data, including clinical studies designed to support promotional efforts. 

        1.49   "IR Formulation" shall mean the immediate release formulation in capsule form
containing Milnacipran. 

        1.50   "Joint Development Committee" shall have the meaning set forth in
Section 9.1. 

        1.51   "Joint Patents" shall have the meaning set forth in Section 11.8. 

        1.52   "Letter Agreement" shall mean the agreement to be entered into among Pierre Fabre,
Cypress and Forest as of the Effective Date, as may be amended. 

        1.53   "License Agreement" shall have the meaning set forth in the recitals. 

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

        1.55   "Licensed Know-How" shall mean Information Controlled by Cypress that
is necessary or useful for the development, manufacture, commercialization or use of Milnacipran or any product containing Milnacipran as an active ingredient, in any formulation and through any mode
of administration (excluding any Cypress Compounds), in the Licensed Territory, including without limitation, the Information described on  Exhibit B.If Forest exercises the Option, Licensed
Know-How shall also mean Information Controlled by Cypress that is necessary or
useful for the development, manufacture, commercialization or use of any Cypress Compounds. In any case, Licensed Know-How excludes the Licensed Patents and Manufacturing
Know-How (subject to the terms of the Supply Agreement). 

        1.56   "Licensed Patents" shall mean all Patents Controlled by Cypress that are necessary
or useful for the development, manufacture, commercialization or use of Milnacipran or any product containing Milnacipran as an active ingredient, in any formulation and through any mode of
administration (excluding any Cypress Compounds), in the Licensed Territory, including without limitation, the Patents set forth on Exhibit C. If
Forest exercises the Option, Licensed Patents shall also mean Patents Controlled by Cypress that are necessary or useful for the development, manufacture, commercialization or use of any Cypress
Compounds. 

        1.57   "Licensed Product" shall mean (a) any product containing Milnacipran as an
active ingredient, in any formulation and through any mode of administration (excluding any Cypress Compounds), which incorporates or uses, or was discovered, identified or developed using, the
Licensed Technology or the manufacture, use, sale, offer for sale or import of which Licensed Product is otherwise within the scope of any claim of the Licensed Patents, including without limitation,
the IR Formulation and SR Formulation, regardless of intended use, and (b) any product containing any analog or derivative of Milnacipran as an active ingredient, in any formulation and through
any mode of administration, which is discovered, identified or developed by Forest or any of its Affiliates or sublicensees using any Licensed Technology or any data or Information provided by Cypress
to Forest, or developed or acquired by or on behalf of Forest or any of its Affiliates or sublicensees, in the course of performance of this Agreement. If Forest exercises the Option, Licensed Product
shall also mean any Cypress Compounds. 

        1.58   "Licensed Product Shortfall" shall have the meaning set forth in
Section 5.3(b)(ii) of the License Agreement. 

        1.59   "Licensed Technology" shall mean Licensed Patents and Licensed
Know-How. 

        1.60   "Licensed Territory" shall mean the United States of America, its territories and
possessions and, if extended pursuant to Section 2.5, Canada. 

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

7

 

        1.62   "Manufacturing Know-How" shall mean all data, Information and
know-how in the possession of Pierre Fabre prior to August 1, 2001 or developed or acquired by or for Pierre Fabre during the term of the License Agreement relating to the
manufacture of API. 

        1.63   "Marketing Plan" shall have the meaning set forth in Section 3.5(b). 

        1.64   "Milnacipran" shall mean the substance known as milnacipran (INN), which expressly
excludes any analogs, derivates and enantiomers of milnacipran (INN). 

        1.65   "Minimums" shall have the meaning set forth in Section 5.3(b) of the
License Agreement. 

        1.66   "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. 

        1.67   "Net Sales" means, for the applicable period, the gross amount invoiced for the
sale or other transfer of Licensed Product by Forest and its Affiliates and sublicensees to Third Parties which are not Affiliates or sublicensees of Forest (unless such Affiliates or sublicensees are
the final user of and do not further sell such Licensed 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), less the following items, as allocable to such Licensed Product: (i) trade discounts, credits or allowances, including without limitation, discounts provided by means of
chargebacks, rebates and administrative fees charged by customers or health care organizations determined based upon sales, (ii) credits or allowances additionally granted upon returns,
rejections or recalls (except where any such recall arises out of Forest's 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) rebates, discounts or other payments on sales of Licensed Product that are mandated
by the government. 

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

        1.69   "Option Exercise Date" shall have the meaning set forth in Section 2.4(b). 

        1.70   "Option Term" shall mean the period from the Effective Date through and including  [...***...]. 

        1.71   "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. 

8

  

        1.72   "Pierre Fabre" shall have the meaning set forth in the first recital. 

        1.73   "Pierre Fabre  [...***...]" shall mean the  [...***...] Milnacipran [...***...], referred to by
Pierre Fabre as [...***...]. 

        1.74   "Pierre Fabre Patents" shall mean any Licensed Patents licensed to Cypress by
Pierre Fabre under the License Agreement. 

        1.75   "Pierre Fabre Trademark Agreement" shall have the meaning set forth in the
recitals. 

        1.76   "Promotion Rights" shall have the meaning set forth in Section 3.6(a). 

        1.77   "Profits" shall mean, on a Generic Product-by-Generic
Product basis, an amount, which shall not be less than zero, equal to (a) Net Sales of Generic Product, minus (b) Allowable Costs and Expenses, in each case calculated using U.S.
generally accepted accounting principles, consistently applied, and consistent with generally accepted methods for activity-based project costing for similar products in similar industries. 

        1.78   "R&D Plan" shall mean the portion of the Development Plan that outlines the
research and/or development services to be performed by FTEs under this Agreement during the R&D Term, as amended from time to time by the Joint Development Committee. 

        1.79   "R&D Term" shall mean the period beginning upon the Effective Date and ending upon
the date of first commercial sale of Licensed Product. 

        1.80   "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 are 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. 

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

        1.82   "Sales Forecast" shall have the meaning set forth in Section 5.3(a) of the
License Agreement. 

        1.83   "SNDA" shall mean a Supplemental New Drug Application filed with the FDA 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. 

        1.84   "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 receptors; serotonergic 1, 2, and 3 class receptors; adrenergic alpha and beta
receptors; cholinergic nicotinic and muscarinic receptors; glutamatergic AMPA, Kainate, NMDA, and metabotropic receptors; histaminegic 1- and 2-class receptors;
MU-, kappa-, delta-opioid receptors; Orphanin (ORL1) receptors; Neurokinin (NK1, NK2, NK3) receptors; Neuropeptide Y receptors; Sigma (sigma-1, sigma-2) receptors;
Vanilloid receptors; Adenosine A1 receptors; Calcitonin gene-related peptide (CGRP) receptor; Cannabinoid (CB1, CB2) receptors; Cholecystokinin (CCK1, CCK2) receptors; Nerotensin
receptors; Voltage-gated calcium channels (N-, P/Q-, L-, T-type); Voltage-gated sodium channels; Bradykinin (B1, B2) receptors; GABA-A,
GABA-B receptors; Galanin (GAL1, GAL2) receptors; Neuropeptide FF receptors; Melanocortin (MC1, MC3, MC4, MC5) receptors; Prostanoid (EP1) receptors; Endothelin (ETA, ETB) receptors; and
Prostanoid (TXA2) receptors. The agent should also not effect MAO-A and—B enzyme activity. The IC50 or KI of  in vitro reuptake inhibition for
NA and 5-HT must be both <1000nM, while the 

9

 

selectivity
ratio for 5-HT and NA (i.e., IC50 or KI of 5-HT in vitro reuptake inhibition divided by that of NA) must range
between 0.2 and 5. Similarly, the IC50 of KI of in vitroreuptake 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. 

        1.85   "SR Formulation" shall mean the slow release formulation containing 120 milligrams
of Milnacipran. 

        1.86   "Steering Committee" shall have the meaning set forth in Section 9.1 of the
License Agreement. 

        1.87   "Supply Agreement" shall mean the Purchase and Supply Agreement dated as of the
date hereof between Pierre Fabre and Cypress, as may be amended. 

        1.88   "Third Party" shall mean any entity other than Cypress or Forest or an Affiliate
of Cypress or Forest. 

        1.89   "Trademarks" shall have the meaning set forth in the Pierre Fabre Trademark
Agreement. 

        1.90   "Transfer Price" shall have the meaning set forth in Section 5.1(a) of the
Supply Agreement. 

        1.91   "Working Group" shall have the meaning set forth in Section 3.1 of the
Supply Agreement. 

2.     LICENSE  

        2.1    License Grant.    Subject to the terms and conditions of this Agreement, Cypress hereby grants to Forest, with
the right to sublicense under the terms described in Section 2.2, during the License Term: 

        (a)   an exclusive license or sublicense, as applicable, to develop and register (but not as to Cypress with respect to
activities of Cypress under Section 3), use, sell, offer for sale and import Licensed Product in the Field in the Licensed Territory, which license shall be under the Licensed Technology and,
solely in the event that Forest exercises the Option and to the extent Cypress has the right to do so, to make and have made Cypress Compounds in the Field in the Licensed Territory; 

        (b)   an exclusive sublicense to use the Licensed Technology licensed to Cypress by Pierre Fabre under the License Agreement,
to the extent necessary to formulate or have API formulated into Bulk Licensed Product and package Bulk Licensed Product into Finished Licensed Product, solely for sale of Licensed Product in the
Field in the Licensed Territory; and 

        (c)   an exclusive sublicense to use, sell and offer for sale Licensed Product under the Trademarks in the Licensed Territory. 

Forest
acknowledges that the rights granted by Cypress to Forest under this Section 2.1 with respect to Trademarks and any Licensed Technology licensed to Cypress by Pierre Fabre under the
License Agreement are subject to the applicable terms and conditions of the License Agreement, the Pierre Fabre Trademark Agreement and if applicable, the Cypress Trademark Agreement. 

        2.2    Sublicense Rights.    

        (a)    Right to Sublicense.    To the extent permitted under the
License Agreement, the Pierre Fabre Trademark Agreement, the Letter Agreement and if applicable, the Cypress Trademark Agreement, and subject to the terms and conditions of this Agreement, Forest
shall have the right to grant sublicenses of the rights granted to it under this Agreement which sublicenses shall not 

10

 

permit
the further grant of sublicenses unless agreed to in writing by Cypress in its sole discretion. The grant of any sublicense to any person or entity other than Forest Parent or any of its
wholly-owned subsidiaries shall require the prior written consent of Cypress, which shall not be unreasonably withheld, and the grant of any such sublicense to Forest Parent or any of its wholly owned
subsidiaries shall require prior written notice to Cypress. 

        (b)    Sublicense Terms.    Any sublicense granted by Forest under
this Agreement shall be subject and subordinate to, and consistent with, the terms and conditions of this Agreement, the License Agreement and the Pierre Fabre Trademark Agreement, and if applicable,
the Cypress Trademark Agreement. Forest shall provide Cypress a copy of any sublicense agreement within 15 business days of its execution. In the event of a material default by any sublicensee under a
sublicense agreement with Forest, Forest will inform Cypress and take such action as necessary or appropriate to cure such default. 

        2.3    Right to Commercialize Generic Licensed Product.    Subject to the terms and conditions of this Agreement, the
License Agreement and the Pierre Fabre Trademark Agreement, and if applicable, the Cypress Trademark Agreement, Forest and any of its Affiliates or sublicensees may, under the license granted in
Section 2.1(a), use, distribute, sell, offer for sale, have sold and import Licensed Product as a generic product ("Generic Product") in a
country of the Licensed Territory at [...***...] Forest will promptly send to Cypress and Pierre Fabre  [...***...] and will notify Cypress and Pierre Fabre
promptly in writing in the event that Forest or any of its Affiliates or
sublicensees decides to use, distribute, sell, offer for sale, have sold and import Licensed Product as a Generic Product in such country of the Licensed Territory, as contemplated by this
Section 2.3. 

        2.4    Option.    

        (a)    Grant of Option.    Cypress hereby grants to Forest an
exclusive option to extend the license described in Section 2.1(a) to Cypress Compounds Controlled by Cypress during the Option Term on a Cypress Compound-by-Cypress
Compound basis (the "Option") during the Option Term. 

        (b)    Exercise of Option.    Forest may exercise the Option with
respect to any Cypress Compound at any time during the Option Term upon written notice to Cypress (such date of exercise, the "Option Exercise Date"). 

        (c)    License Grant.    Subject to Section 2.4(d), effective
immediately upon the Option Exercise Date with respect to a Cypress Compound, subject to the terms and conditions of this Agreement, including but not limited to, (i) payment of any research
and development costs with respect to the applicable Cypress Compound as provided in Section 6.1 and (ii) the license fee with respect to the applicable Cypress Compound as provided in
Section 6.2(c) and (iii) the milestone payments with respect to the applicable Cypress Compound as provided in Section 6.3, with no further action required by Forest, the license
granted under Section 2.1(a) shall include rights with respect to such Cypress Compound in the Field in the Licensed Territory. 

        (d)    Cypress Obligations.    Cypress agrees to exercise its option
under the Collegium Agreement by February 21, 2004 and to pursue its diligence obligations under the Collegium Agreement during the Option Term; provided
that, in the event Cypress determines to terminate the Collegium Agreement during the Option Term, Cypress agrees to provide Forest with written notice of such intention and
Forest shall have a [...***...] period during which it may exercise the Option as to all Cypress Compounds Controlled by Cypress
under the Collegium Agreement ("Cypress Collegium Compounds"). In the event of such exercise of the Option by Forest under this Section 2.4(d),
subject to Forest assuming responsibility for all obligations of Cypress under the Collegium Agreement and the payment of any future research and development costs related to the Collegium Agreement,
as provided in Section 6.1, the license granted under Section 2.1(a) 

11

 

shall
include rights with respect to all Cypress Collegium Compounds in the Field in the Licensed Territory. 

        (e)    Right of First Negotiation.    Cypress shall be permitted,
subject to this Section 2.4, to develop, make, have made, use, sell, offer for sale and import any Cypress Analogs, but not any Cypress Formulations, for any indication and this Agreement shall
not include any rights with respect to Cypress Compounds or any Information or Patents that pertain to the Cypress Compounds. Beginning upon the Effective
Date and ending [...***...] (the "Exclusive Period"), Forest shall have a first
right to negotiate with Cypress to obtain a license to further develop and commercialize Cypress Compounds for all indications to the extent Forest has not exercised the Option with respect to such
Cypress Compounds. In the event Cypress desires to enter into a license arrangement for further development or commercialization of any Cypress Analog in any indication or plans to further develop or
commercialize any Cypress Analog itself, before entering into discussions with any Third Party with respect to such license or commencing such activities itself, Cypress will notify Forest in writing
of its desire. Forest may then elect, by providing written notice to Cypress, to enter into good faith negotiations with Cypress with respect to such license for a period of 90 days following
notice to Forest. In addition, Forest may provide written notice to Cypress at any time of its desire to negotiate a license arrangement for further development or commercialization of any Cypress
Compound in any indication for a period of 90 days following notice to Cypress. If Cypress and Forest do not enter into an agreement with respect to such license during such 90 day
period (or such longer period agreed to in writing by the parties), Cypress will be under no further obligation to negotiate a license with respect to such Cypress Compound, and, if such Cypress
Compound is a Cypress Analog, Cypress will be free to further develop and commercialize, or to negotiate and enter into an agreement with any Third Party with regard to further development and
commercialization of, such Cypress Analog in any indication on any terms, subject to the last sentence of this Section 2.4(e). In addition, in the event a Cypress Analog is commercialized by
Cypress or a sublicensee during the Exclusive Period, Cypress shall pay to Forest, a royalty of [...***...] on net sales of such
Cypress Analog by Cypress or any Third Party to whom Cypress grants a license to such Cypress Analog; provided that such royalty rate may be reduced by
written agreement of Cypress and Forest after good faith negotiations to account for any royalty payments that Cypress or its sublicensees must make to any Third Parties with respect to such Cypress
Analog. Such royalty shall be payable for the Exclusive Period, but in any event, the payment term shall not be less than  [...***...]. With respect to any good faith negotiations regarding a license
arrangement for any Cypress Compounds under this
Section 2.4(e), the parties agree that the fair market value of the rights subject to negotiation shall be determined solely in respect of the incremental value of the marketing of the Cypress
Compounds in question over and above the value of any Licensed Product then being marketed in the Licensed Territory by Forest and excluding value attributable to the conversion of sales of Licensed
Product then being marketed to the Cypress Compounds in question. In addition, any agreement entered into by Cypress with any Third Party with respect to the development or commercialization of any
such Cypress Analog shall not be on principal financial terms more favorable to such Third Party then those principal financial terms last offered by Cypress to Forest. 

        2.5    Potential Extension of Licensed Territory.    At any time prior to the  [...***...]
 anniversary of the Date of First Commercial Sale in the United States, Forest shall have a first right to extend the
Licensed Territory to include Canada. In the event that Cypress desires to enter into a license arrangement with respect to Licensed Product in Canada, or plans to commercialize Licensed Product
itself in Canada, before entering into discussions with any Third Party with respect to such license or beginning such commercialization activities itself, Cypress will notify Forest in writing of its
desire. Forest may then elect, by providing written notice to Cypress within 30 days following such notice from Cypress, to include Canada within the Licensed Territory. If Forest does not
provide such written notice to Cypress during such 30-day period, Cypress will be free to negotiate and enter into an agreement 

12

 

with
any Third Party with respect to such license in Canada on any terms. If Forest provides such written notice to Cypress during such 30-day period, subject to Forest making the payment
to Cypress described in Section 6.2(b), the Licensed Territory shall be extended to include Canada. 

        2.6    License from Forest.    

        (a)   As contemplated under Section 4.2(d) of the License Agreement, Forest hereby grants to Cypress, with the further
right to sublicense to Pierre Fabre and with a further right to sublicense by Pierre Fabre, a royalty-free (subject to the provisions of Section 2.6(b)) exclusive license under all
Patents Controlled by Forest that claim any Forest Information used by Forest or any of its Affiliates or sublicensees in filing for any Regulatory Approvals for, or marketing, any Licensed Product in
the Licensed Territory, which Patents are necessary or useful for the development, manufacture, commercialization or use of Milnacipran and Licensed Product in the Rest of the World, and to use such
Forest Information, in each case to develop, register, manufacture, use, distribute, sell, offer for sale and have sold Milnacipran and Licensed Product in the Rest of the World. 

        (b)   In full consideration for the license granted in Section 2.6(a), Cypress shall pay to Forest that portion of
amounts received by Cypress from Pierre Fabre under Section 4.2(b) of the License Agreement for the sublicense of rights granted to Cypress by Forest under Section 2.6(a) attributable to
the technology related to the license granted in Section 2.6(a) based on the relative contributions of each of Forest and Cypress to the technology in question. 

        2.7    Discussions Regarding Pierre Fabre [...***...].    Forest agrees that, in the event it
decides to negotiate any arrangement with Pierre Fabre related to the Pierre Fabre [...***...], Forest shall explore with
Cypress the opportunities for Cypress to participate in such arrangement with Forest. In the event an arrangement is reached between Forest and Pierre Fabre (and Cypress, if applicable) with respect
to the Pierre Fabre [...***...], Cypress and Forest shall discuss the terms and conditions of this Agreement that may be
impacted by the marketing and sale of the Pierre Fabre [...***...] and shall consider any modifications to such terms and
conditions that are appropriate in light of the circumstances at such time. This Section is not intended to imply any obligation on the part of Forest to enter into an agreement with Cypress regarding
the Pierre Fabre [...***...]. 

3.     DEVELOPMENT; REGISTRATION; PROMOTION, MARKETING AND SALES  

        3.1    Development Activities.    

        (a)    Development Activities.    Development and regulatory
activities will be conducted as outlined in the Development Plan. 

        (b)    Development Activities by Forest.    Beginning upon the
Effective Date, Forest shall use commercially reasonable efforts to: 

        (i)    conduct clinical trials of Licensed Product in accordance with the Development Plan, with assistance and input from
Cypress; 

        (ii)   conduct any additional clinical trials of Licensed Product after completion of the clinical trials contemplated in the
Development Plan, as determined by the Joint Development Committee; provided that Cypress and Forest must mutually agree upon any clinical trials,
including, without limitation, any Phase IV clinical trials, to be conducted by either party for Licensed Product in the Licensed Territory or the Rest of the World, to the extent such clinical trials
would reasonably be expected to have implications on sales of Licensed Product by the other party in any other country.. 

        (iii)   identify new indications for Licensed Product; and 

13

 

        (iv)   develop Licensed Product for FMS and all new indications that are identified, at its own expense,
according to the Development Plan. 

        (c)    FTE Funding.    During the R&D Term, Cypress shall devote the
number of FTEs to the R&D Plan as specified therein and Forest shall make research funding payments to Cypress for such number of FTEs, in advance on a quarterly basis at the beginning of each
calendar quarter, at the rates specified in the R&D Plan per FTE per year. Cypress shall provide a quarterly report detailing the actual FTE time devoted to the R&D Plan during such quarter. Cypress
retains complete discretion to change the identity of any individual employee or consultant assigned to work on matters related to this Agreement and/or the frequency and the time during which such
individual employee's or consultant's efforts are devoted to the R&D Plan. Within 30 days of the end of each quarter, the parties will make reconciling payments, if any are required, to reflect
the actual FTE time devoted to activities under the R&D Plan in such quarter. 

        (d)    Compliance with Laws.    Each party shall comply, and shall
cause its employees, agents and representatives to comply, with all applicable laws, regulations and guidelines in connection with research and development of Licensed Product, including any
registration of Licensed Product, under this Agreement. 

        3.2    Registration Activities.    Forest shall use commercially reasonable efforts to obtain or assist Cypress in
obtaining in a timely manner NDA approvals and any additional Regulatory Approvals with respect to Licensed Product by the health/regulatory authorities of the United States, and if determined
appropriate by Cypress or Forest after review by the Steering Committee as contemplated in Section 9.2 of the License Agreement, Canada. Upon the Effective Date, Cypress shall appoint Forest as
agent for Cypress for purposes of the IND and with respect to the NDA for Licensed Product; provided that, a representative of Cypress (the  "Cypress FDA
Contact") shall be the primary contact with the FDA prior to commencement of the second Phase III clinical trial for Licensed Product or
such other time as mutually agreed. Forest shall be primarily responsible for NDA preparation and submission, and Cypress shall hold the NDA for Licensed Product. Cypress shall review and provide
comments on the NDA for Licensed Product, and Forest agrees that it shall not submit any NDA to the FDA until Cypress and Forest mutually agree to such NDA. Forest and Cypress shall keep one another
fully informed of the registration process of Licensed Product through the Joint Development Committee. 

        3.3    Meetings and Communications with the FDA and Other Regulatory Authorities.    Prior to commencement of the
second Phase III clinical trial for Licensed Product, the Cypress FDA Contact shall be the primary day to day contact with the FDA, except that each party shall notify the other party in advance of
any substantive communications, in which case both parties shall participate in such substantive communications. Subject to the preceding sentence, Cypress and Forest shall mutually attend all
meetings, participate in any oral communications and agree upon any written communications with the FDA and any other health/regulatory authorities in the Licensed Territory relating to Licensed
Product and Cypress and Forest shall allow Pierre Fabre representatives to participate in any substantive meetings and communications, to the extent permitted by such authorities. Beginning upon
commencement of the second Phase III clinical trial for Licensed Product, Forest shall lead all meetings, oral communications and written communications with the FDA and any other health/regulatory
authorities of the Licensed Territory relating to Licensed Product and shall allow Cypress and Pierre Fabre representatives to participate in any substantive meetings and substantive oral or written
communications, to the extent permitted by such authorities. 

14

           3.4    Pre-Marketing Activities.    During the development of Licensed Product and
until Forest commences
commercialization of Licensed Product, Forest shall conduct pre-marketing activities, with input from the Joint Development Committee, and use commercially reasonable efforts to
successfully launch of Licensed Product in the Licensed Territory. 

        3.5    Promotion, Marketing and Sales Activities.    Forest shall use commercially reasonable efforts to conduct all
promotion, marketing and sales activities with respect to Licensed Product in the Licensed Territory, subject to the Promotion Rights of Cypress. 

        (a)    Forest Sales Force.    From the date of launch of Licensed
Product and thereafter during the License Term, and consistent with the Marketing Plan, Forest shall deploy the Forest Sales Force. All direct costs of the Forest Sales Force, such as salaries,
benefits and travel costs, shall be borne in full by Forest. Forest will train the Forest Sales Force with respect to Licensed Product, and will bear its own expenses in connection therewith. 

        (b)    Responsibility for Launch, Promoting and Distributing Licensed
Product.    Forest and its sublicensees shall be responsible for the launch, promotion and distribution of Licensed Product in the Licensed Territory, subject to the
Promotion Rights held by Cypress, provided that the decision to launch the Licensed Product in Canada shall be subject to the good faith business judgment of Forest, after review by the Steering
Committee as contemplated in Section 9.2 of the License Agreement. All costs associated therewith shall be borne by Forest and its sublicensees. The launch of Licensed Product by Forest or its
sublicensee in the United States shall take place within no more than six months following NDA approval, including, for this purpose, FDA approval of labeling and product launch promotional materials
of such Licensed Product. No later than six months prior to the Estimated Date of First Commercial Sale in the United States, Forest shall prepare and submit to the Joint Development Committee for
review and comments a rolling three-year marketing and commercial plan for Licensed Product in the Field in the Licensed Territory that will include its (1) marketing strategy,
(2) Sales Forecasts, as described in Section 5.3(b), and (3) Minimums, as described in Section 5.3(c) (the "Marketing
Plan"). The Marketing Plan for each fiscal year shall also include amounts budgeted for expenditures by Forest on sales and sales management, physician promotion and medical
education for Licensed Product in such fiscal year, the aggregate number of detailing calls with respect to Licensed Product that are projected in such fiscal year and the percentage (up to 25%) of
the total detailing calls with respect to Licensed Product to be performed by the Cypress Sales Force in such fiscal year (the "Annual Cypress
Percentage"). The Marketing Plan shall be updated on an annual basis by Forest by submitting such updated Marketing Plan to Cypress six months in advance of the beginning of
the next applicable fiscal year. Cypress and Forest shall then discuss and agree upon such Marketing Plan within 30 days after submission of such Marketing Plan to Cypress. Cypress may submit
the Marketing Plan to Pierre Fabre under the License Agreement, and the parties acknowledge that the Marketing Plan shall be reviewed by the Steering Committee as contemplated in Section 9.2 of
the License Agreement. 

        (c)    Promotion, Marketing and Sales Efforts.    Forest shall use
commercially reasonable efforts to promote, market and sell Licensed Product in the Licensed Territory, using efforts consistent with pharmaceutical industry standards for pharmaceutical products of
comparable commercial potential. Such efforts shall include, without limitation, positioning Licensed Product at P2 or higher (on a weighted average basis consistent with the weighting of details by
position applied by Forest generally to its promotional activities and consistent with industry standards for comparable promotional activities) during the Exclusive Period;  provided that such
positioning requirements shall be subject to modification by Forest with respect to the last two years of the Exclusive Period based
upon competitive conditions, changes in the market and commercial reasonableness. In the event Forest introduces a product as contemplated under Section 5.4(b), Forest agrees to continue to use
commercially reasonable efforts to promote Licensed Product, 

15

 

taking
into account the current life stage of Licensed Product. In addition, Forest agrees that in each fiscal year, it shall spend on promotion, marketing and sales efforts on Licensed Product an
amount equal to at least [...***...] of the amount budgeted for such activities in such fiscal year and shall make at least  [...***...] of the aggregate
number of detailing calls with respect to Licensed Product that are projected in such fiscal year
to be made by the Forest Sales Force based on the budget or projection in the Marketing Plan for the applicable year. Failure to comply in any material respect with the obligations of this Section
shall be deemed a material breach of this Agreement, subject to all of the terms and conditions applicable to a material breach. 

        (d)    Compliance with Laws.    Forest shall comply, and shall cause
the Forest Sales Force and all other employees, agents and representatives of Forest to comply, with all applicable laws, regulations and guidelines in connection with the promotion, marketing and
sale of Licensed Product, including the Prescription Drug Marketing Act and the Federal Anti-Kickback Statute. 

        3.6    Promotion Rights.    

        (a)    Promotion Rights of Cypress.    Cypress shall have the right to
promote Licensed Product in the Field in the United States through the Cypress Sales Force by making up to 25% of the total detailing calls with respect to Licensed Product in each year of the License
Term measured on a per physician call basis (the "Promotion Rights"), unless Cypress provides written notice to Forest at any time prior to such NDA
filing for the applicable Licensed Product that it waives such Promotion Rights. If Cypress exercises the Promotion Rights, it agrees to use commercially reasonable efforts to cause the Cypress Sales
Force to perform the Annual Cypress Percentage of the total detailing calls with respect to Licensed Product. Cypress' right to exercise its Promotion Rights shall be subject to Cypress possessing a
fully trained and qualified sales force, based on the same criteria applicable by Forest to the qualification and training of sales representatives generally, at least 30 days prior to the
commencement by Cypress of promotional efforts. Cypress shall provide Forest with at least 12 months notice prior to each marketing year of the percentage of detailing efforts (but not more
than 25%) which Cypress agrees to undertake for such marketing year; provided that the percentage specified by Cypress for the launch of Licensed
Product shall apply for at least the first two marketing years. Cypress' performance
of detailing pursuant to the exercise of its Promotion Rights shall be subject to the provisions of the Marketing Plan. 

        (b)    Provision of Materials by Forest.    Forest will supply to
Cypress, at no cost to Cypress, copies of its art work and other marketing materials with respect to Licensed Product and Cypress will be required to use Forest's art work and other marketing
materials in connection with its Promotion Rights. 

        (c)    Payment to Cypress.    In each calendar year, Forest will, on a
quarterly basis in arrears, pay Cypress for the promotional efforts of the Cypress Sales Force, based on the number of detailing calls made by the Cypress Sales Force in such quarter under the
Marketing Plan, in an amount equal to the cost of such effort to Forest had it been accomplished by the Forest Sales Force, such costs to be described on a schedule mutually agreed upon by Forest and
Cypress and attached to this Agreement as Exhibit E. Forest further agrees that, in the event the Marketing Plan provides for any specific
marketing costs to be borne by Cypress, Forest will, on a quarterly basis in arrears, reimburse Cypress for any such actual costs. 

        (d)    Financing for Promotion Rights.    In the event Cypress
maintains the Promotion Rights, Forest will extend a line of credit to Cypress against which, beginning six months prior to the Estimated Date of First Commercial Sale, Cypress may borrow such amounts
as are necessary to constitute and maintain the Cypress Sales Force and otherwise exercise the Promotion Rights, up to $10 million. Cypress agrees to draw down on the line of credit only such
amounts as expected to be needed to finance the Cypress Sales Force by providing written notice to Forest that specifies 

16

 

the
amount requested and the reasons for the draw down with reasonable specificity. Any amounts owing by Cypress to Forest under the line of credit shall bear interest at LIBOR, as adjusted monthly,
and shall be repaid solely by applying future royalties payable to Cypress under this Agreement against such outstanding amounts; provided that such
royalties will not be reduced by more than [...***...] in any quarter as a result of any credit. At the option of Forest, all or
any portion of such amounts owing under the line of credit may instead be converted into equity of Cypress at a pre-determined price, as described in the Equity Issuance Agreement;  provided that in no
event will Cypress be obligated to issue equity of Cypress under this Agreement or the Equity Issuance Agreement to the extent such
issuance would require approval of Cypress' stockholders under the rules and regulations of The Nasdaq Stock Market (or any other national securities exchange on which its Common Stock is then
traded). In the event this Agreement is terminated by Forest or Cypress, other than by Cypress under Section 14.2(a) or (b), and there are any amounts owing by Cypress to Forest under the line
of credit, Cypress agrees that, if it has in cash an amount equal to or greater than [...***...], it shall repay Forest such
outstanding amounts within one year of the date of termination of this Agreement. In the event this Agreement is terminated by Cypress under Sections 14.2(a) or (b), or in the event this Agreement is
terminated under any other circumstances and Cypress does not have an amount at least equal to [...***...] available in cash,
and there are any amounts owing by Cypress to Forest under the line of credit, Forest may elect to convert the outstanding amounts into equity pursuant to the terms of the Equity Issuance Agreement or
may elect to receive payments over the a five year period, in quarterly installments, following the date of termination of this Agreement. 

        (e)    Compliance with Laws.    Cypress shall comply, and shall cause
the Cypress Sales Force and all other employees, agents and representatives of Cypress to comply, with all applicable laws, regulations and guidelines in connection with the promotion, marketing and
sale of Licensed Product, including the Prescription Drug Marketing Act and the Federal Anti-Kickback Statute. 

        3.7    Co-Promotion Rights.    Forest agrees to explore with Cypress opportunities to
co-promote other Forest products on terms to be negotiated in good faith between Cypress and Forest (the "Co-Promotion Rights"). 

        3.8    License to Cypress by Forest for Promotion and Co-Promotion Rights.    Forest shall grant to
Cypress a royalty-free exclusive license, to all Patents and Trademarks Controlled by Forest that are necessary or useful for the development, manufacture, commercialization or use of
Milnacipran and Licensed Product in the Licensed Territory to the extent necessary for Cypress to practice the Promotion Rights. Forest shall also grant to Cypress any license necessary or useful in
connection with its Co-Promotion Rights. 

4.     OWNERSHIP OF INFORMATION AND ACCESS TO INFORMATION  

        4.1    Cypress Information.    Cypress Information derived from development, marketing and other permitted activities
under and during the License Term with respect to Licensed Product and all intellectual property rights therein, if any, including without limitation, the Licensed Patents (other than Pierre Fabre
Patents and any Patents licensed to Cypress under the Collegium Agreement) shall be the sole property of Cypress, subject only to the license rights granted to Forest under this Agreement. Subject to
Section 2.4(d), the interest of Cypress in the Cypress Information shall automatically be deemed included in the rights licensed under this Agreement to Forest with respect to the Licensed
Territory. Forest shall have reasonable access, upon request, to updated Cypress Information and all related intellectual property rights, and Cypress agrees to regularly provide Forest with such
Cypress Information through the Joint Development Committee. 

        4.2    Forest Information.    Forest Information derived from development, marketing and other permitted activities
under and during the License Term with respect to Licensed Product and all 

17

 

intellectual
property rights therein, if any, shall be the sole property of Forest (or its Affiliates or sublicesees, as applicable), subject only to the license rights granted to Cypress under this
Agreement. Cypress shall have reasonable access, upon request, to updated Forest Information and all related intellectual property rights, and Forest shall regularly provide Cypress with such Forest
Information through the Joint Development Committee. 

        4.3    Title to Inventions.    Inventorship of Information will be determined by the applicable laws of the country or
jurisdiction in which the particular Information or invention is made or discovered. If there is a dispute between the parties as to which party shall own any particular item of Information, the Joint
Development Committee shall establish a procedure to resolve such dispute, which may include engaging a qualified third party patent attorney completely unaffiliated with and independent of the
parties and jointly selected by the parties, as an expert to resolve such dispute. 

5.     TRADEMARKS; MINIMUMS; LIMITATIONS  

        5.1    Trademarks; Trade Dress Marking.    In the Licensed Territory, Licensed Product (other than a
non-branded Generic Product) will be sold by Forest and its Affiliates and sublicensees exclusively under the Trademarks and subject to the terms and conditions set forth in the Trademark
License Agreement, and if applicable, the Cypress Trademark Agreement. The Trademarks shall be chosen by Forest, and Forest shall assign to Pierre Fabre all of its rights in such Trademarks to the
extent such assignment is necessary. In choosing such Trademark, Forest will consider trademarks suggested by Pierre Fabre and shall include any such suggested trademarks in market research conducted
by Forest in connection with selecting the Trademark. Licensed Product (other than a non-branded Generic Product) will be marketed by Forest and its Affiliates and sublicensees in the
Licensed Territory under trade dress which shall include the notices "Licensed from PIERRE FABRE" and "Licensed from Cypress
Bioscience" in a legible manner on all packaging, leaflets, documents, materials and generally in association with the reference to Licensed Product and the Trademark, to the
extent acceptable under applicable laws and regulations in the Licensed Territory. 

        5.2    Cypress Trademark.    In the event Pierre Fabre abandons a Trademark and it is assigned to Cypress as provided
in the Pierre Fabre Trademark Agreement, then Forest and Cypress shall enter into a trademark agreement (the "Cypress Trademark Agreement") on the same
terms and conditions as set forth in the Pierre Fabre Trademark Agreement (with Cypress as the Trademark owner and Forest as the licensee), except for the provisions of Section 1.10 thereof
(i.e., the Trademark license will be deemed fully paid and royalty free). 

        5.3    Sales; Sales Forecasts; Minimums.    

        (a)    Sales.    During the License Term, Forest and its Affiliates
and sublicensees commit to procure sales, create a demand and continuously develop the sales of Licensed Product in the Field in the Licensed Territory using commercially reasonable efforts. 

        (b)    Sales Forecasts.    Forest will comply with and satisfy all the
terms and conditions required of Cypress and its sublicensees under Section 5.3(a) of the License Agreement with respect to the Licensed Territory, including, without limitation, delivery of
Sales Forecasts. 

        (c)    Minimums.    Forest will comply with and satisfy all the terms
and conditions required of Cypress and its sublicensees under Section 5.3(b) of the License Agreement with respect to the Licensed Territory, including, but not limited to, achievement of
Minimums and payment of the specified amounts to Pierre Fabre in the event of failure to comply with Minimums. Cypress agrees that in the event it exercises its Promotion Rights, to the extent that
any Licensed Product Shortfall is attributable solely to the failure by the Cypress Sales Force to make its proportional share of detailing calls with respect to Licensed Product in the applicable
year under the Marketing Plan required to achieve the applicable Minimums, then Cypress shall pay its 

18

 

proportional
share of any payment due to Pierre Fabre under Section 5.3(b)(ii) of the License Agreement. 

        5.4    Limitations.    

        (a)   The parties shall be subject to the provisions of Section 3.7 of the Letter Agreement. 

        (b)   If, during the Exclusive Period, Forest or any of its Affiliates, licensees or sublicensees markets or sells any product
(other than (1) Licensed Product, (2) SNRI product, which shall be subject to Section 3.7 of the Letter Agreement or (3) Forest Product, which shall be subject to
Section 5.4(c)) for FMS in the Licensed Territory using any Information developed or generated in the course of performance of this Agreement or disclosed by Cypress to Forest pursuant to this
Agreement, Forest will pay Cypress a royalty of [...***...] on net sales of such product; provided
that such amount may be reduced by written agreement of Cypress and Forest after good faith negotiations to account for any royalty payments that Forest or its licensees must
make to any Third Parties with respect to such product. Such royalty shall be payable for the Exclusive Period, but in any event, the payment term shall not be less than three years, and the
provisions of Section 10 with respect to payment terms shall apply to such royalty payment. This Section 5.4(b) shall not restrict Forest from conducting clinical trials in FMS of any
product being developed by Forest for neuropathic pain
indications as of the Effective Date, including without limitation, the compounds [...***...], if such clinical trials in FMS
are required by the FDA for the NDA submission for such product, and no royalty shall be payable pursuant to this Section 5.4(b) with respect to such product (as long as it is not a Licensed
Product). 

        (c)   If, during the Exclusive Period, Forest or any of its Affiliates, licensees or sub-licensees markets or sells
any product containing the compound [...***...] ("Forest Product") for FMS in
the Licensed Territory, Forest shall negotiate in good faith with Cypress and Pierre Fabre regarding compensation to Cypress for royalty payments and milestone payments with respect to Licensed
Product that would have been made under this Agreement during the Exclusive Period had such Forest Product not been marketed or sold during the Exclusive Period and compensation to Pierre Fabre for
royalty payments, and, if applicable, [...***...] and an amount equal to  [...***...]. In the event the parties are not able to reach agreement with respect
to the compensation that would be payable to
Cypress and Pierre Fabre, the limited issue of the amount of such compensation shall be referred to one expert with relevant industry experience. If the
parties cannot agree on one expert, then a panel of experts with relevant industry experience shall be formed for such purpose, which panel shall be comprised of (i) three experts with one
expert being chosen by Forest and one expert being chosen by mutual agreement of Cypress and Pierre Fabre if Cypress and Pierre Fabre mutually agree to one expert, and the third expert being chosen by
mutual agreement of the two experts chosen by the parties, or (ii) if Cypress and Pierre Fabre do not mutually agree to one expert, then five experts with one expert being chosen by Forest, one
expert being chosen by Cypress, one expert being chosen by Pierre Fabre, and two experts being chosen by mutual agreement of the three experts chosen by the parties. The expert or panel of experts, as
applicable, must be chosen within 30 days from the date of notice by any party regarding the need to appoint such expert or panel of experts. Each party shall provide such expert or panel of
experts any information relevant to the issue of the amount of such compensation, including, without limitation, information regarding the projected sales of such Forest Product and the historical and
projected sales of Licensed Product. The expert or panel of experts shall review such information provided, use such information in calculating the compensation payable by Forest to Cypress and Pierre
Fabre and provide the parties with the result of such calculation within 30 days from the selection of the expert or the last expert on the panel, as applicable. Cypress, Forest and Pierre
Fabre shall each pay one-third of the costs of engaging the expert or the panel of experts under this Section 5.4(c). 

19

 

6.     LICENSE FEES; MILESTONE PAYMENTS; AND ROYALTY PAYMENTS  

        6.1    Research and Development Expenses.    All expenses incurred by Cypress from and after the Effective Date for
research and development with respect to Licensed Product pursuant to the Development Plan, including but not limited to, the amounts payable pursuant to Section 3.1(c) and the expenses for
preclinical development, clinical trials, preparing, filing and maintaining INDs and NDAs and other regulatory activities, shall be paid by Forest. Cypress shall provide Forest with an invoice
outlining its research and development expenses with respect to Licensed Product, other than amounts payable for FTEs which shall be subject to Section 3.1(c), at the end of each quarter.
Forest will reimburse Cypress for such expenses within 30 days of receipt of such invoice. 

        6.2    License Fees.    

        (a)   Forest shall pay Cypress a non-refundable, non-creditable license fee of $25,000,000 payable
within five days of the Effective Date. 

        (b)   Forest shall pay Cypress a non-refundable, non-creditable license fee of  [...***...] if Forest extends the Licensed Territory pursuant to
Section 2.6 to include Canada and of  [...***...] on the Date of First Commercial Sale in Canada.
 

        (c)   In the event Forest exercises an Option under Section 2.4(b), Forest shall pay Cypress a
non-refundable, non-creditable license fee in the amount equal to [...***...] of the amounts paid to any
Third Party, including Collegium, to fund research and development from and after the Effective Date through the date of notice provided by Forest exercising such Option for the applicable Cypress
Compound. In the event Forest exercises the Option under Section 2.4(b), Forest shall also pay Cypress a non-refundable, non-creditable license fee in the amount equal
to all amounts paid by Cypress [...***...] to fund research and development of the applicable Cypress Compound prior to the
Effective Date (such amounts to include, as applicable, the [...***...]. Notwithstanding the foregoing, Forest shall not owe
Cypress any amount under this Section 6.2(c) with respect to Cypress Collegium Compounds in the event Forest exercises the Option as to Cypress Collegium Compounds under the circumstances
described in Section 2.4(d). 

        6.3    Milestone Payments.    

        (a)   Forest shall pay Cypress the following non-refundable, non-creditable payments within
10 days after the occurrence of each of the following milestone events with respect to Licensed Product in the Licensed Territory. 

	Milestone Event
 
	 	Milestone Payment

	[...***...]	 	[***]
	[...***...]	 	[...***...]
	[...***...]	 	[...***...]
	[...***...]	 	[...***...]
	[...***...]	 	[...***...]
	[...***...]	 	[...***...]
	[...***...]	 	[...***...]
	[...***...]	 	[...***...]
	Total Potential Milestone Payments	 	[...***...]

        (b)   In the event the Option is exercised and a Cypress Compound is the only Licensed Product developed and/or commercialized,
the milestone payments described in Section 6.3(a) shall be payable with respect to such Licensed Product. In the event the Option is exercised and Forest has paid the milestone payments under
Section 6.3(a) with respect to a Licensed Product, that is not a Cypress Compound, the following additional milestone payments will be payable to Cypress with respect to one Licensed Product
containing a Cypress Compound, which milestone payment shall be non-refundable, non-creditable and shall be payable within 10 days after the occurrence of 

20

 

each
of the following milestone events with respect to such Licensed Product in the Licensed Territory; provided that, the total milestone payments
payable under this Section 6.3(b) shall not exceed $[...***...]; provided further, that in the
event that both Cypress and Forest determine that a Cypress Compound should be developed and/or commercialized but Forest believes that the aggregate potential milestones under this
Section 6.3(b) are cost prohibitive, Cypress agrees to discuss in good faith with Forest the potential reduction of the milestone payments payable under this Section 6.3(b): 

	Milestone Event
 
	 	Milestone Payment in the Event the Cypress

Compound is a Cypress Formulation

	[...***...]	 	$	[...***...]
	[...***...]	 	$	[...***...]
	[...***...]	 	$	[...***...]
	[...***...]	 	$	[...***...]
	[...***...]	 	$	[...***...]
	Total Potential Milestone Payments	 	$	[...***...]

	Milestone Event
 
	 	Milestone Payment in the Event the Cypress

Compound is a Cypress Analog

	[...***...]	 	$	[...***...]
	[...***...]	 	 	 
	[...***...]	 	$	[...***...]
	[...***...]	 	$	[...***...]
	[...***...]	 	$	[...***...]
	Total Potential Milestone Payments	 	$	[...***...]

        (c)   In no event shall Forest be required to pay any given milestone payment under Section 6.3(a) or
Section 6.3(b), as applicable, for more than one Licensed Product. 

        6.4    Royalty Payments for Licensed Product (other than Generic Product).    As consideration for the rights granted
pursuant to Section 2.1, Forest shall pay on a Licensed Product-by-Licensed Product basis for Licensed Product (other than Generic Product): 

        (a)   To Cypress, a royalty of [...***...] of Net Sales
of Licensed Products during the License Term; and 

        (b)   To Pierre Fabre, the royalty payments described in Sections 6.4(a), (b) and (c) of the License Agreement
with respect to the Licensed Territory during the required term set forth therein. 

        During
the period prior to expiration of the obligation of Forest to make the royalty payment described in Section 6.4(a) of the License Agreement, Forest may credit the amount by
which the total payments by Forest under Sections 6.4(a) and (b) above and Section 7.3 below in any year exceed  [...***...] of Net Sales for such year against royalty payments due to
Cypress under Section 6.4(a) above; provided that in no event shall the amount payable to Cypress under Section 6.4(a) above be reduced
below [...***...] of Net Sales of Licensed Products in any quarter as a result of such credit. During the period after
expiration of the obligation of Forest to make the royalty payment described in Section 6.4(a) of the License Agreement, Forest may credit the amount by which the total payments by Forest under
Sections 6.4(a) and (b) above and Section 7.3 below in any year exceed [...***...] of Net Sales for such year
against royalty payments due to Cypress under Section 6.4(a) above; provided that in no event shall the amount payable to Cypress under
Section 6.4(a) above be reduced below [...***...] of Net Sales of Licensed Products in any quarter as a result of such
credit. 

21

           6.5    Royalty Payments for Generic Product.    As consideration for the rights
granted pursuant to
Section 2.1, Forest shall pay to Cypress, on a Generic Product-by-Generic Product basis, a royalty equal to  [...***...] of Profits during the License Term. 

        6.6    Payment Due to Credit Under the License Agreement.    In the event there is a credit under Section 6.5
of the License Agreement due to a payment made to Pierre Fabre by Cypress under Section 6.5 of the License Agreement and such payment is applied as a credit against the royalty payments that
would otherwise be payable by Forest to Pierre Fabre under Section 6.4(b) of this Agreement, Forest agrees that it shall make a cash payment to Cypress in the aggregate amount of such credit as
such credit is applied to any Forest payment, each such payment to be within 60 days of such credit. 

        6.7    Notice of Payment.    Forest agrees to provide written notice to Cypress of payment to Pierre Fabre of the
royalty payments made under Section 6.4(b) above and the Transfer Price payments made under Section 7.3 below, such notice to include the information required under Section 10.1,
at the time such payments are made to Pierre Fabre. 

        6.8    Cypress Payments to Third Parties.    Cypress will remain responsible for any milestone or royalty payments
that it is obligated to make to Pierre Fabre or any other Third Party with respect to Licensed Products, except as specifically provided herein. 

7.     SUPPLY OF API AND TRANSFER PRICE  

        7.1    Supply by Pierre Fabre.    Forest agrees that Pierre Fabre shall be the exclusive supplier of Bulk API to
Forest, subject to the terms and conditions of the Supply Agreement. 

        7.2    Agreement by Cypress Regarding Supply.    Cypress agrees that it will submit no forecast or binding order for
Licensed Product with respect to the Licensed Territory to Pierre Fabre under the Supply Agreement to the extent inconsistent with any forecast or binding order for Licensed Product submitted
by Forest to Pierre Fabre under the Supply Agreement and will consent to any such forecast or binding order for Licensed Product submitted by Forest. 

        7.3    Transfer Price for API.    As part of the Letter Agreement, Forest shall agree to pay Pierre Fabre directly for
API purchased directly from Pierre Fabre at a price determined and as adjusted under Sections 5.1 and 8.12 of the Supply Agreement, plus transport, customs, duties and similar charges to the extent
not paid by Pierre Fabre. Forest acknowledges that it shall be responsible, at its own cost, for fill and finish of API purchased from Pierre Fabre. 

8.     ADVERSE EVENTS.  

        Forest shall comply with and satisfy all the terms and conditions as agreed to by Cypress in Section 8 of the License Agreement related to adverse events. 

9.     JOINT DEVELOPMENT COMMITTEE; STEERING COMMITTEE AND WORKING GROUP.  

        9.1    Establishment of Joint Development Committee.    Within 30 days of the Effective Date, the parties shall
establish a committee (the "Joint Development Committee"), which shall perform the functions provided in this Section 9. The Joint Development
Committee shall include an equal number of members designated by each of Forest and Cypress, such number to be mutually agreed upon by the parties. Each Joint Development Committee member shall have
experience appropriate for the activities to be conducted by the Joint Development Committee. The Joint Development Committee shall meet at such times and such places as shall be determined from time
to time by Forest and Cypress, but in any event, not less than twice in each calendar year. Members of the Joint Development Committee may participate in meetings of the Joint Development Committee in
person or by conference telephone call. A quorum for the conduct of business by the Joint Development 

22

 

Committee
shall consist of a majority of the members designated by Forest and a majority of the members designated by Cypress. All actions and decisions by the Joint Development Committee shall
require approval of a majority of the members at a meeting at which a quorum is present. All actions taken, whether at a meeting or by an action by written consent, shall be set forth in minutes and
circulated to each member of the Joint Development Committee. Expenses incurred by a member of the Joint Development Committee in connection with the activities of the Joint Development Committee will
be borne by the party that designated such member. 

        9.2    Joint Development Committee Functions.    The Joint Development Committee shall have the authority to conduct
the following activities and such other activities as may be agreed to in writing by the parties; provided that, any reference to any activity to be
monitored, reviewed and/or discussed shall not provide the Joint Development Committee any decision making authority with respect to such activity, unless such decision making authority is expressly
provided in this Section 9.2: 

        (a)   Create, monitor, review, discuss, and amend (as determined necessary) the Development Plan and budget for Licensed
Product, including progress and performance thereunder, 

        (b)   Discuss and determine the choice of formulation for a Licensed Product and intended use of such formulation; 

        (c)   Review and discuss information regarding the status of Cypress Compounds provided by Cypress during the Option Period; 

        (d)   Monitor, review, discuss and amend (as determined necessary) the R&D Plan; 

        (e)   Determine requirements for additional clinical trials of Licensed Product, including any Phase IV clinical trials, after
completion of the clinical trials contemplated in the Development Plan and allocate responsibilities for the conduct of any such additional clinical trials; 

        (f)    Review and discuss the registration process for Licensed Product; 

        (g)   Review and discuss pre-marketing activities designed to ensure successful launch of Licensed Product in the
Licensed Territory; 

        (h)   Monitor, review and discuss the Marketing Plan; 

        (i)    Review and discuss Forest Information and Cypress Information presented at each meeting of the Joint Development
Committee; 

        (j)    Review and discuss the sale by Cypress or Forest of any product (other than Licensed Product) for FMS in the Licensed
Territory (as contemplated under Sections 2.4(d) or 5.4(b) or (c), as applicable); 

        (k)   Determine if there is any basis for filing any NDA for Licensed Product, including discussions regarding whether the
development program indicates issues of safety or efficacy that are likely to prevent or significantly delay the filing or approval of the NDA or to result in labeling or indications which would
significantly adversely affect the marketing of Licensed Product; 

        (l)    If there is a dispute between the parties as to which party shall own any particular item of Information, establish a
procedure to resolve such dispute, which may include engaging a qualified Third Party patent attorney completely unaffiliated and independent of the parties and jointly selected by the parties, as an
expert to resolve such dispute (as contemplated under Section 4.3); 

        (m)  In the event there are Joint Patents, determine which party shall be responsible for obtaining, prosecuting or
maintaining right to such Joint Patents. 

        9.3    Dispute Resolution.    In the event the Joint Development Committee is unable to decide or resolve any issue
related to the Joint Development Committee functions, other than any issue under 

23

 

the
Marketing Plan or any related marketing activities, the issue shall be referred to the Chief Executive Officer of Cypress and the Chief Executive Officer of Forest, or the Chief Executive Officer
of any Affiliate of Forest that is primarily responsible for the activities of Forest under this Agreement, as directed by Forest. Such officers of the parties shall meet promptly thereafter and shall
negotiate in good faith to resolve such issue within 30 days of commencing such negotiations, but in any event shall continue negotiations until they reach mutual agreement and neither party
may take any action related to such disputed issue until there is mutual agreement by the representatives of Forest and Cypress on the Joint Development Committee; provided
that, in the event either party is not acting in good faith with respect to such negotiations, the other party shall be permitted to resolve such issue by arbitration, as
provided in Section 16.2. In the event the Joint Development Committee is unable to decide or resolve any issue related to the Joint Development Committee functions that arises under the
Marketing Plan or any marketing related activities, the representatives of Forest on the Joint Development Committee will have the final determination with respect to such issue. In particular,
without limiting the foregoing, with respect to design of any pivotal Phase III clinical trial, Cypress and Forest will discuss the design of such trial in good faith and attempt to reach agreement on
such design, and the trial will not begin until the parties have reached agreement on the design of such trial. 

        9.4    Steering Committee; Working Group.    The parties acknowledge that under Section 9.1 of the License
Agreement, the Steering Committee shall consist of four persons and under Section 3.1 of the Supply Agreement, the Working Group shall consist of six persons (in each case, or such other number
as mutually agreed by Cypress and Pierre Fabre) with an equal number of members designated by each of Pierre Fabre and Cypress. Each of Cypress and Forest shall designate an equal number of
representatives to the Cypress seats on each of the Steering Committee and the Working Group, except as otherwise agreed upon by Cypress and Forest; provided,
however, that the Cypress representative
shall have the sole decision making authority as to such committees with respect to matters outside the Licensed Territory. 

        9.5    Decision Making Authority.    In every circumstance where the License Agreement, Supply Agreement or Trademark
Agreement provide for ultimate decision making authority by Cypress, Cypress agrees to exercise such decision making authority as directed by Forest with respect to any matter as to which Forest has
final decision making authority under Section 9.3. 

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 under this Agreement shall be paid within 45 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 Products sold, the gross sales and Net Sales of Licensed Product, the Profits (if applicable), the royalty payable,
the method used to calculate the payment and the exchange rates used. 

        10.2    Exchange Rate; Manner and Place of Payment.    All payments due and payable under this Agreement by one party
to the other party shall be payable in United States dollars; provided, however, that any payment to be made by Cypress to Forest under
Section 2.7(b) based on payments made by Pierre Fabre to Cypress in Euros and any payment to be made by Forest to Pierre Fabre under Section 6.4(b) and Section 7.3 shall be made
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, (absent any error), 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 account designated in writing by the party entitled to receive such payment, unless otherwise specified in writing by such party. 

24

 

        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 period during which a party is entitled to receive payments from the other
party under this Agreement and for a period of four years thereafter, the paying party and the receiving party shall keep complete and accurate records sufficient to permit the other party to confirm
the accuracy of all payments due hereunder, including without limitation, with regard to Forest, records pertaining to gross sales and Net Sales of Licensed Products and, including without limitation,
with regard to Cypress, records pertaining to promotional efforts of the Cypress Sales Force, if applicable, and FTE time devoted to the R&D Plan. The party receiving payment or making payment shall
have the right to cause an independent, certified public accountant reasonably acceptable to the other party to audit such records of such other party to confirm the accuracy of the payments made,
including without limitation, with regard to Forest, Net Sales, for a period covering not more than the preceding three years and, including without limitation, with regard to Cypress, records
pertaining to promotional efforts of the Cypress Sales Force, if applicable, and FTE time devoted to the R&D Plan. 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 corresponding payments due under this Agreement. In the case of a variance of more than 5%, 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. 

        10.6    Late Payments.    In the event that any payment due hereunder is not made when due, the payment shall accrue
interest from the date due at the rate of 1.5% per month; provided, however, that in no event shall such rate exceed the maximum legal annual interest
rate; provided further that no such interest shall accrue until the other party has provided written notice of such late payment or during any period
that any dispute with respect to a payment is being diligently pursued in good faith by the party from whom such payment is claimed. The payment of such interest shall not limit a party from
exercising any other rights it may have as a consequence of the lateness of any payment. 

11.   INTELLECTUAL PROPERTY  

        11.1    Patent Prosecution and Maintenance of Pierre Fabre Patents.    Forest acknowledges that Pierre Fabre shall be
responsible for prosecution and maintenance of all Pierre Fabre Patents at Pierre Fabre's sole expense. To the extent Cypress receives relevant information from Pierre Fabre, Cypress shall keep Forest
informed of progress with regard to the prosecution, maintenance, enforcement and defense of the Pierre Fabre Patents by providing Forest with all copies of official actions, amendments and responses
with respect to such prosecution, to the extent received from Pierre Fabre. Forest acknowledges that in the event Pierre Fabre desires to abandon any Pierre Fabre Patent in the Licensed Territory, and
Forest may assume responsibility for such Pierre Fabre Patent and will bear the expense thereof. 

25

 

        11.2    Patent Prosecution and Maintenance of Licensed Patents Other than Pierre Fabre.    Cypress shall be
responsible for prosecution and maintenance of all Licensed Patents (other than Pierre Fabre Patents) at its own expense; provided that Forest will
reimburse Cypress for the costs of filing, prosecution and maintenance (including legal costs) of Licensed Patents (other than the Pierre Fabre Patents) in the Licensed Territory for which it provides
consent, not to be unreasonably withheld prior to such filing. Such reimbursement shall be made within 30 days of receipt of an invoice from Cypress. Cypress shall keep Forest informed of
progress with regard to the prosecution, maintenance, enforcement and defense of the Licensed Patents (other than the Pierre Fabre Patents) in the Licensed Territory by providing Forest with copies of
official actions, amendments and responses with respect to such prosecution. 

        11.3    Cooperation of the Parties.    Each party agrees to cooperate fully in the prosecution of Licensed Patents
under this Agreement. 

        11.4    Infringement by Third Parties of Licensed Patents.    

        (a)   Forest and Cypress shall promptly notify the other in writing of any alleged or threatened infringement or any challenge
to the validity of the Licensed Patents or any challenge to Pierre Fabre's ownership of, or Cypress' and Forest's right to practice, the Pierre Fabre Patents or to Cypress' ownership of, or Forest's
right to practice, the Licensed Patents (other than the Pierre Fabre Patents) of which they become aware. 

        (b)   Forest acknowledges that Pierre Fabre has the first right to bring and control any action or proceeding with respect to
infringement of any of the Pierre Fabre Patents, excluding any such action or proceeding filed in connection with an ANDA filed by a Third Party (an "ANDA
Proceeding") which shall be covered by Section 11.4(c), at its own expense, subject to this Section 11.4(b), and by counsel of its own choice. In connection with
such action or proceeding brought and controlled by Pierre Fabre, Cypress and Forest may elect to share the costs of such action or proceeding with Pierre Fabre and any recovery realized as a result
of such action or proceeding as part of a cost-sharing arrangement, to be determined by mutual agreement of the parties in good faith, taking into account
the relative economic interests of the parties, subject to Section 11.4(e) of the License Agreement. The party that brings and controls such
action or proceeding shall keep the other parties updated regarding the status and costs of such action or proceeding. With respect to infringement of any of the Pierre Fabre Patents in the Licensed
Territory, other than an ANDA Proceeding, if Pierre Fabre fails to bring an action or proceeding within (a) 120 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, Forest shall have the right to bring
and control any such action at its own expense and by counsel of its own choice, and Cypress and Pierre Fabre shall have the right, each at its own expense, to be represented in any such action by
counsel of its own choice. If Forest fails to proceed in a timely fashion with regard to bringing an action or proceeding, Cypress shall have the right to bring and control any such action at its own
expense and by counsel of its own choice. 

        (c)   Forest shall have the first right to bring and control any action or proceeding with respect to infringement of any of
the Licensed Patents (other than the Pierre Fabre Patents) and any ANDA Proceeding related to the Pierre Fabre Patents in the Licensed Territory at its own expense, subject to this
Section 11.4(c), and by counsel of its own choice. With respect to infringement of any Licensed Patents (other than the Pierre Fabre Patents) and any ANDA Proceeding related to the Pierre Fabre
Patents in the Licensed Territory, if Forest fails to bring an action or proceeding within (a) 120 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 Forest shall have the right, at its own expense, to be 

26

 

represented
in any such action by counsel of its own choice. If Forest brings any action or proceeding with respect to infringement of any of the Licensed Patents (other than the Pierre Fabre
Patents), Cypress and Forest will share the costs and any recovery realized as a result of such action or proceeding as part of a cost-sharing arrangement, to be determined by mutual
agreement of the parties in good faith, taking into account the relative economic interests of the parties and Forest shall keep Cypress updated regarding the status and costs of such action or
proceeding. If Cypress or Forest brings an ANDA Proceeding, Cypress, Forest and Pierre Fabre will share the costs and any recovery realized as a result of such action or proceeding as part of a
cost-sharing arrangement, to be determined by mutual agreement of the parties in good faith, taking into account the relative economic interests of the parties, subject to
Section 11.4(e) of the License Agreement, The party that brings and controls such action or proceeding shall keep the other parties updated regarding the status and costs of such action or
proceeding. 

        (d)   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. Both parties shall use their commercially reasonable efforts in cooperating with each other to terminate such infringement without litigation, if
appropriate. Neither party shall have the right to settle any infringement litigation under this Section 11.4 relating to the Licensed Patents without the prior written consent of the other
party (and Pierre Fabre with respect to Pierre Fabre Patents). Except as otherwise agreed to by the parties as part of a cost-sharing arrangement, and except as otherwise provided in
Section 11.4(b) or 11.4(c), any recovery realized as a result of such litigation, after reimbursement of any litigation expenses of Forest and Cypress (and, if applicable, Pierre Fabre with
respect to the Pierre Fabre Patents), shall be retained by the party that brought and controlled such litigation. 

        11.5    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 or their Affiliates, licensees or sublicensees pursuant to this Agreement infringes or may infringe the intellectual property rights of such
Third Party. Forest 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 Cypress and Pierre Fabre shall have the right, each at its own expense, to be represented in any such action by counsel of its own
choice. If Forest 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 Forest shall have the right, at its own expense, to be represented in any such action by counsel of its own choice. Neither party shall have the right to settle any patent infringement
litigation under this Section 11.5 relating to the manufacture or commercialization of Licensed Products in the Licensed Territory without the consent of such other party. 

        11.6    Patent Prosecution Strategy.    The parties intend to establish, in each country worldwide where it is
commercially reasonable to do so, Patent rights that are as broad as reasonably practicable with respect to Licensed Products and their manufacture or use in the Field;  provided that neither party is
obligated to file, prosecute and maintain any Patent unless there is mutual agreement between Cypress and Forest. The
parties agree to cooperate with each other to achieve such intention, so as to maximize the commercial value of the Licensed Products by obtaining broad Patent-based exclusivity where available. 

        11.7    Joint Patents.    The Joint Development Committee shall determine which party shall be responsible for
obtaining, prosecuting or maintaining rights to Patents, in appropriate countries throughout the world, covering each invention in Information jointly owned by two or more parties
("Joint Patents"). The joint owners shall share equally the costs for filing, prosecuting or maintaining such Joint Patents throughout the
world; provided, however, that either party may decline to bear its share of the costs and expenses to file, prosecute or maintain any particular Joint
Patent in one or 

27

 

more
countries. In that case the other party may undertake the responsibility for filing, prosecuting or maintaining such Joint Patent at its own expense, and if it does so, the declining party shall
assign to the other party all its right, title and interest to any such Joint Patent(s) in respect of any territory where such party declined to share expenses, and upon such assignment such Joint
Patent(s) shall become the sole property of the party receiving the assignment in such territories. 

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 that 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. 

        (e)    Right to Grant Licenses.    It has the right to grant to the
other party the rights granted under Section 2.1 and Section 2.6, as applicable. 

        12.2    Cypress Representation.    As of the Effective Date, Cypress' rights to the Licensed Technology are not
subject to any royalty obligation to any Third Party (including for this purpose, to officers, directors, employees or other consultants or agents of Cypress) and such rights are not subject to
termination or limitation by any Third Party, except, in each such case, to the extent provided by the License Agreement and the Collegium Agreement. To Cypress' knowledge, based on representations by
Pierre Fabre with respect to the Pierre Fabre Patents and related know-how, the practice of the Licensed Technology to develop or commercialize Licensed Product does not infringe (except
to the extent such infringement is permitted by the License Agreement) any Patents of any Third Party and Cypress has not received notice or communication alleging that the practice of the Licensed
Technology infringes or may infringe the rights of any Third Party, nor is Cypress aware of any reasonable basis for any such allegation. In addition, Cypress has taken no action which would give rise
to any claim by any person for brokerage commissions, placement agent's fees or similar payments relating to this Agreement or the transactions contemplated hereby, except for its arrangement with
Bear Stearns, whose fees will be paid by Cypress. 

        12.3    Limitation of Representations and Warranties.    Neither party makes any other warranties, expressed or
implied, except as set forth herein. 

28

 

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 10 years 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 agrees that this Agreement is the Confidential Information of each party. 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 that 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; or 

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

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

        (a)   prosecuting Patents and Trademarks; 

        (b)   regulatory filings; 

        (c)   prosecuting or defending litigation; 

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

        (e)   disclosure to Affiliates, sublicensees, employees, consultants, agents or other Third Parties in connection with due
diligence or similar investigations by such Third Parties or the performance of its obligations or exercise of its rights under this Agreement, 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; and 

        (f)    in the case of Cypress, disclosure to Pierre Fabre as required under the License Agreement or Collegium under the
Collegium Agreement. 

        Notwithstanding
the foregoing, in the event a party is required to make a disclosure of the other party's Confidential Information pursuant to Section 13.3(a), (b), (c),
(d) or (e), it will, except where impracticable, and except in the case of subsection (e) above, give reasonable advance notice to the other party of such disclosure and, with respect to
Section 13.3(c) or (d), 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. 

29

           13.4    Publications.    Each party to this Agreement recognizes that the
publication of papers containing results of
and other information regarding development of Licensed Product in the Field (except as provided hereinafter), 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 either party may submit any paper, oral presentation or abstract for
publication, the party proposing publication shall deliver a complete copy of such materials to the other party at least 45 days prior to submitting the paper to a publisher or the date set for
presentation. 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, the other party shall make reasonable efforts to expedite review of such materials, 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. With respect to abstracts, the other party shall make reasonable efforts to expedite review of
such 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 10 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 or other
materials. 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. 

        13.5    Press Release.    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 this Agreement or activities thereunder. The parties agree to consult
with each other reasonably and in good faith with respect to the text and timing 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
this Agreement that have already been publicly disclosed in accordance herewith. 

        13.6    SEC Filings.    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. 

14.   TERM AND TERMINATION  

        14.1    Term.    The term of this Agreement shall commence on the Effective Date and extend on a
country-by-country and Licensed Product-by-Licensed Product basis until the later of (i) the expiration of the last to expire of the applicable
Licensed Patents, (ii) 10 years after the first commercial sale of a Licensed Product (other than a Generic Product) in such country or (iii) the last commercial sale of a Generic
Product in such country or a Licensed Product bearing the Trademark, unless earlier terminated pursuant to Sections 14.2 or 14.3 (the "License Term"). 

30

 

        14.2    Termination for Cause.    A party shall have the right to terminate this Agreement upon 60 days
(10 days with respect to payments) prior written notice to the other upon the occurrence of any of the following: 

        (a)   the bankruptcy, insolvency, dissolution or winding up of the other party, or if a party admits in writing its inability
to pay its debts as they become due; 

        (b)   the breach of any material provision of this Agreement by the other party if the breaching party has not cured such
breach within the 60 day (10 days with respect to payments) period following the date of written notice of termination by the non-breaching party or, if such breach is not
susceptible of cure within such 60 day period (10 days with respect to payments), the breaching party has not taken appropriate steps to commence such cure during such 60 day
period (or 10 day period) and continued to diligently pursue such cure in a manner reasonably assuring such cure within a reasonable period of time thereafter; provided,
however, that to the extent a breach affects only a given country, termination shall apply only to such country. In addition, termination shall not be permitted for a payment
breach where the obligation to make payment is being diligently contested in good faith by appropriate proceedings and any required payment is promptly made following completion of dispute resolution
as contemplated hereby. In any event, if such breach has not been cured within one year of the date of occurrence of the breach, the non-breaching party may terminate this Agreement under
this Section; or 

        (c)   in the event the Joint Development Committee determines there is no basis for filing any NDA for Licensed Products. 

        14.3    Termination by Cypress.    Cypress may, in its sole discretion, upon 60 days prior written notice to
Forest terminate this Agreement, under the circumstances set forth in Section 3.5(c) in the event that Forest has not cured such non-compliance of any of the provisions set forth in
Section 3.5(c) within 60 days from the date of receipt of written notice of termination by Cypress. 

        14.4    Termination by Pierre Fabre.    This Agreement shall automatically terminate on a
country-by-country basis (as applicable) as to any Licensed Technology (as defined in the License Agreement) in the event the License Agreement is terminated by Pierre Fabre
under Section 14.2(b) of the License Agreement. 

        14.5    Termination by Forest.    Forest may terminate this Agreement at any time upon 120 days written notice
to Cypress in the event that Forest reasonably determines (including without limitation, based upon the interim or final results of any clinical study), after review and discussion with Cypress and
the Joint Development Committee, that the development program indicates issues of safety or efficacy that are likely to prevent or significantly delay the filing or approval of the NDA or to result in
labeling or indications which would significantly adversely affect the marketing of Licensed Product; provided that, upon providing such written notice
under this Section 14.5, Forest shall no longer be obligated to make any milestone payments for events that occur after the date of such notice and Forest agrees to assist Cypress in
facilitating the transition of activities being conducted under this Agreement to Cypress or any Third Party that is designated by Cypress and as soon as reasonably practicable, Forest shall transfer
or assign, as applicable, to Cypress all Forest Information and Forest Formulations and shall assign to Cypress all Patents Controlled by Forest related to Licensed Product, or, with respect to such
Forest Information, Forest Formulations and Patents that have applications other than to Licensed Product shall grant to Cypress a perpetual, fully-paid license. 

        14.6    Effect of Expiration—Termination; Surviving Obligations.    

        (a)    License Termination.    Upon expiration or termination of this
Agreement, all rights and obligations under this Agreement shall terminate. 

31

 

        (b)    Obligations that Survive.    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 1, 4.1, 4.2, 10.4, 12.3, 13.1, 13.2, 13.3, 14.5, 14.6, 14.7, 14.8, 14.9, 15.1, 15.2, 16.1, 16.2, 18.2, 18.3, 18.7, 18.8 and 18.11 shall survive expiration or
termination of this Agreement. 

        (c)    Return of Confidential Information.    Subject to
Section 14.5, 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. 

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

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

        14.9    Bankruptcy Code.    All licenses granted under this 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 this Agreement will retain and may fully exercise all of its rights and elections under the
U.S. Bankruptcy Code. 

15.   INDEMNIFICATION  

        15.1    Indemnification.    

        (a)    Cypress Indemnification.    Cypress hereby agrees to save,
defend, indemnify and hold harmless Forest 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 any such indemnitee 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, (ii) the
promotion of any Licensed Product by Cypress upon exercise of its Promotion Rights and the promotion of any products upon exercise of its Co-Promotion Rights, or (iii) the failure
to make payments to Pierre Fabre as required by the License Agreement or Supply Agreement, or to perform other obligations of Cypress as required under the License Agreement or Supply Agreement,
except to the extent arising from the breach by Forest of any of its obligations hereunder, except, in any case, to the extent such Losses result from the negligence or willful misconduct of Forest or
any other person entitled to indemnification under this Section. 

        (b)    Forest Indemnification.    Forest 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 such indemnitee 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 Forest 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 Forest or any of its Affiliates or sublicensees, except to
the extent such losses result from the negligence or willful misconduct of Cypress or any other person entitled to indemnification under this sentence or (iii) the failure to make the payments
directly to Pierre Fabre as required under Section 6.4(b) related to royalty payments and under Section 7.3 related to the Transfer Price. Forest 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 to which such indemnitee 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 the 

32

 

development,
manufacture, use, handling, storage, sale or other disposition of any Licensed Product by Forest or any of its Affiliates or sublicensees, except to the extent such losses result from the
negligence or willful misconduct of Pierre Fabre or any other person entitled to indemnification under this sentence or are Losses for which Pierre Fabre is obligated to indemnify Cypress under
Section 15.1(b) of the License Agreement. 

        15.2    Control of Defense.    In the event a party seeks indemnification under Section 15.1, 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)    Forest Insurance.    During the License Term, Forest, at its
own expense, shall maintain product liability insurance (or self-insure) in amount consistent with industry standards for claims and actions that might be taken against it in connection
with this Agreement. If requested, Forest shall provide Cypress with a certificate of insurance (or evidence of self-insurance) evidencing such coverage. 

        (b)    Cypress Insurance.    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 that might be taken against it in connection
with this Agreement. If requested, Cypress shall provide Forest a certificate of insurance (or evidence of self-insurance) evidencing such coverage. 

16.   DISPUTE RESOLUTION; ARBITRATION  

        16.1    Dispute Resolution.    Any dispute arising under or relating to the parties rights and obligations under this
Agreement (other than with regard to matters to be decided under Section 5.4(c), Patent matters or any decision of the Joint Development Committee) will be referred to the Chief Executive
Officer of Cypress and the Chief Executive Officer of Forest, or the Chief Executive Officer of any Affiliate of Forest that is primarily responsible for the activities of Forest under this Agreement,
as directed by Forest, for resolution. In the event the two Chief Executive Officers are unable to resolve such dispute within 30 days or such dispute being referred to the officers, the
dispute shall be subject to arbitration, as provided in Section 16.2. 

        16.2    Arbitration.    

        (a)    Claims.    Any claim, dispute, or controversy of whatever
nature arising out of or relating to this Agreement (other than with regard to matters to be decided under Section 5.4(c), Patent matters or any inability to reach a decision by the Joint
Development Committee, other than as expressly provided) that is not resolved under Section 16.1 within the required 30 day time period, including without limitation, any action or claim
based on tort, contract, or statute (including any claims of breach or violation of statutory or common law protections from discrimination, harassment and hostile working environment), or concerning
the interpretation, effect, termination, validity, performance and/or breach of this Agreement ("Claim"), shall be resolved by final and binding
arbitration before a panel of three experts with relevant industry experience (the "Arbitrators"). One Arbitrator shall be chosen by Cypress and one
Arbitrator shall be chosen by Forest within 15 days from the notice of initiation of arbitration. The third Arbitrator shall be chosen by mutual agreement of the Arbitrator chosen by Cypress
and the Arbitrator chosen by Forest within 15 days of the date that the last of such Arbitrators were appointed. The Arbitrators shall be administered by JAMS (the  "Administrator") in
accordance with its then existing arbitration rules or procedures regarding commercial or business disputes. The arbitration shall
be 

33

 

held
in San Diego, California if commenced by Forest and in New York, New York if commenced by Cypress; provided however, if there is any matter that is
being arbitrated under the License Agreement, the Supply Agreement, the Pierre Fabre Trademark Agreement or the Letter Agreement that is substantially related to the matter that is the subject of
arbitration under this Agreement, such arbitration shall be held in Toronto, Canada. The arbitration proceeding shall be completed within 90 days after selection of the final Arbitrator, unless
an extension is requested in writing by the Arbitrators. 

        (b)    Arbitrators' Award.    The Arbitrators shall, within 15
calendar days after the conclusion of the arbitration hearing, issue a written award and statement of decision describing the essential findings and conclusions on which the award is based, including
the calculation of any damages awarded. The decision or award rendered by the Arbitrators shall be final and non-appealable, and judgment may be entered upon it in accordance with
applicable law in the State of New York or California, as applicable, or any other court of competent jurisdiction. The Arbitrators shall be authorized to award compensatory damages, but shall NOT be
authorized (i) to award non-economic damages, such as for emotional distress, pain and suffering or loss of consortium, (ii) to award punitive damages, or (iii) to
reform, modify or materially change this Agreement or any other agreements contemplated hereunder; provided, however, that the damage limitations described in parts (i) and (ii) of this
sentence will not apply if such damages are statutorily imposed. 

        (c)    Costs.    Each party shall bear its own attorney's fees, costs,
and disbursements arising out of the arbitration, and shall pay an equal share of the fees and costs of the arbitrators; provided, however, the
arbitrators shall be authorized to determine whether a party is the prevailing party, and if so, to award to that prevailing party reimbursement for its reasonable attorneys' fees, costs and
disbursements (including, for example, expert witness fees and expenses, photocopy charges, travel expenses, etc.), and/or the fees and costs of the Administrator and the Arbitrators. 

        (d)    Compliance with this Agreement.    Unless the parties otherwise
agree in writing, during the period of time that any arbitration proceeding is pending under this Agreement, the parties shall continue to comply with all those terms and provisions of this Agreement
that are not the subject of the pending arbitration proceeding. 

        (e)    Injunctive or Other Equity Relief.    Nothing contained in this
Agreement shall deny any party the right to seek injunctive or other equitable relief from a court of competent jurisdiction in the context of a bona fide emergency or prospective irreparable harm,
and such an action may be filed and maintained notwithstanding any ongoing arbitration proceeding. 

17.   CHANGE IN CONTROL  

        17.1    Change in Control Not Approved by the Board.    In the event of a Change in Control of Forest or Cypress that
was not approved by the applicable Board of Directors in place immediately prior to the Change in Control, (i) with respect to such a Change in Control of Forest, Cypress shall have the option
to elect to terminate this Agreement upon the payment to Forest of the fair market value of the rights being terminated, as determined based on an independent evaluation by a Third Party that is
experienced in the evaluation of pharmaceutical products and (ii) with respect to such a Change in Control of Cypress (excluding an such transaction in which Forest is a party), Forest shall
have the right to terminate Cypress' Promotion Rights and rights to participate with Forest in the Joint
Development Committee, the Steering Committee and the Working Group, but shall continue to pay Cypress the payments required under this Agreement. 

        17.2    Change in Control Approved by the Board.    In the event of a Change in Control of Forest or Cypress that was
approved by the applicable Board of Directors in place immediately prior to such Change in Control, (a) the same rights stated in Section 17.1 shall apply only if  [...***...] with respect

34

 

to
the surviving entity resulting from such Change in Control, unless the surviving entity intends to cure such [...***...]
within 12 months from the date of the Change in Control, as stated in writing, and does cure such [...***...] within the
12 month period, and (b) with respect to such a Change in Control of Cypress, any decisions regarding the development of licensed product shall thereafter be made by Forest. 

18.   GENERAL PROVISIONS  

        18.1    Standstill.    During the License Term (the "Standstill
Period"), subject to the terms of the Equity Issuance Agreement, a party will not, in any manner, directly or indirectly: 

        (a)   make, effect, initiate, cause or participate in (i) any acquisition of beneficial ownership of any securities of
the other party or any securities of any Affiliate of such other party, (ii) any acquisition of any assets of the other party or any assets of any Affiliate of such other party,
(iii) any tender offer, exchange offer, merger, business combination, recapitalization, restructuring, liquidation, dissolution or extraordinary transaction involving the other party or any
Affiliate of such other party, or involving any securities or assets of the other party or any securities or assets of any Affiliate of such other party, or (iv) any "solicitation" of "proxies"
(as those terms are used in the proxy rules of the Securities and Exchange Commission) or consents with respect to any securities of the other party; 

        (b)   form, join or participate in a "group" (as defined in the Securities Exchange Act of 1934 and the rules promulgated
thereunder) with respect to the beneficial ownership of any securities of the other party; 

        (c)   act, alone or in concert with others, to seek to control or influence the management, board of directors or policies of
the other party; 

        (d)   take any action that might require the other party to make a public announcement regarding any of the types of matters
set forth in Section 18.1(a); 

        (e)   agree or offer to take, or encourage or propose (publicly or otherwise) the taking of, any action referred to in
Section 18.1(a), (b), (c) or (d); 

        (f)    assist, induce or encourage any third party to take any action of the type referred to in Section 18.1(a), (b),
(c), (d) or (e); 

        (g)   enter into any discussions, negotiations, arrangement or agreement with any Third Party relating to any of the foregoing;
or 

        (h)   request or propose that the other party amend, waive or consider the amendment or waiver of any provision set forth in
this Section 18.1. 

        18.2    Governing Law.    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. 

        18.3    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 together with the Letter Agreement supersedes all prior and contemporaneous agreements and communications, whether oral, written or otherwise, concerning any and all matters contained
herein. 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 

35

 

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. 

        18.4    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. 

        18.5    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. 

        18.6    Limitation of Damages.    Except for amounts payable (i) due to infringement or misappropriation claims
related to any intellectual property covered by this Agreement, (ii) under Section 13, and (iii) or pursuant to Section 15.1, 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. 

        18.7    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. 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. 

        18.8    No Third Party Beneficiaries.    This Agreement is neither expressly nor impliedly made for the benefit of any
party other than those executing it; provided that the parties acknowledge and agree that Pierre Fabre is intended to be a Third Party beneficiary of
all provisions in this Agreement specifically referring to Pierre Fabre or obligations applicable to any sublicensee of Cypress under the License Agreement, including without limitation, the
provisions of Sections 5.1, 5.3, 5.4, 6.4(b), 7.1, 7.2, 7.3, 8, 10, 11.1, 11.4(b), 15.1(b) and this Section 18.8. 

        18.9    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. 

        18.10    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 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 

36

 

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 Forest, notices must be addressed to: 

Forest
Laboratories Ireland Limited

Clonshaugh Industrial Estate

Clonshaugh, Dublin 17

Republic of Ireland

Attention: Chief Executive Officer

Telephone: [...***...]

Facsimile: 011-353-1-4357773 

with
copies to: 

Forest
Laboratories, Inc.

909 Third Avenue

New York, New York 10022

United States of America

Attention: Chief Executive Officer

Telephone: [...***...]

Facsimile: (212) 750-9152 

Dornbush
Mensch Mandelstam & Schaeffer, LLP

747 Third Avenue

New York, New York 10017

United States of America

Attention: Herschel Weinstein

Telephone: [...***...]

Facsimile: (212) 753-7673 

If
to Cypress, notices must be addressed to: 

Cypress
Bioscience, Inc.

4350 Executive Drive, Suite 325

San Diego, California 92121

United States of America

Attention: Chief Executive Officer

Telephone: (858) 452-2323

Facsimile: (858) 452-1222 

with
a copy to: 

Cooley
Godward LLP

4401 Eastgate Mall

San Diego, California 92121

United States of America

Attention: Kay Chandler

Telephone: (858) 550-6000

Facsimile: (858) 550-6420 

        18.13    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 unrest, accident, destruction or other casualty, any lack or failure of transportation facilities, any lack or failure of supply of
raw 

37

 

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 14.6, 14.7
and 14.8. 

        18.14    Legal Fees.    If any party to this Agreement resorts to any legal action in connection with this Agreement,
subject to Section 16.2(c), the prevailing party shall be entitled to recover reasonable fees of attorneys and other professionals in addition to all court costs which that party may incur as a
result. 

        18.15    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. 

        18.16    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. 

38

 

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

	FOREST LABORATORIES IRELAND LIMITED	 	CYPRESS BIOSCIENCE, INC.
	

 	

 	
 	

 	

 
	By:	/s/  RAYMOND STAFFORD      
	 	By:	/s/  JAY KRANZLER      

	Name:	Raymond Stafford
	 	Name:	Dr. Jay Kranzler

	Title:	Chief Executive Officer
	 	Title:	Chief Executive Officer

39

 
 

EXHIBIT A    
    
    Development Plan    
    

[...***...]

* Confidential Treatment Requested

 
 

EXHIBIT B    
    
    Licensed Know-How    
    

[...***...]

* Confidential Treatment Requested

 
 

EXHIBIT C    
    
    Patents Held by Cypress    
    

	•
	Methods
of treating Fibromyalgia Syndrome (CYPR 100 CIP)

	-
	USSN
6,602,911

	-
	PCT/US02/40976

	•
	Methods
of Treating Chronic Fatigue Syndrome (CYPR 100)

	-
	USSN
6,635,675

	-
	PCT/US02/35396 

[...***...] 

* Confidential Treatment Requested

 
 

Pierre Fabre Patents    
    

I°- US Patents  

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

                Notice of Allowance

Terminations on August 26, 2017 

II°- Canadian Patents  

Process Patent  

        Ref: no 1 266 486

                Applied: April 23, 1986

                Granted March 3, 1990

                Terminates: March 6, 2007 

        Ref:
no 2 006 464

                Applied:: December 21, 1989

                Granted: June 15, 1999

                Terminates: December 21, 2009 

SR Formulation Patent  

Ref
n 2 006 464

Filed August 26, 1997

Pending 

 
 

EXHIBIT D    
    
    Example of Milestone Payment
  Under Section 6.3(a)    
    

[...***...] 

* Confidential Treatment Requested

 
 

EXHIBIT E    
    
    Schedule of Costs for Cypress Sales Force    
    

[...***...]

* Confidential Treatment Requested

QuickLinks

Exhibit 10.26

LICENSE AND COLLABORATION AGREEMENT

EXHIBIT A Development Plan

EXHIBIT B Licensed Know-How

EXHIBIT C Patents Held by Cypress

Pierre Fabre Patents

EXHIBIT D Example of Milestone Payment Under Section 6.3(a)

EXHIBIT E Schedule of Costs for Cypress Sales Force

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