Document:

Second Restated Licence Agreement

  *** Text Omitted and Filed Separately
 Confidential Treatment Requested 
 Under 17 C.F.R. §§ 200.80(b)(4),
 200.83 and 240.24B-2
 SECOND RESTATED LICENSE AGREEMENT
 Exhibit 10.1
           THIS SECOND RESTATED LICENSE AGREEMENT (this “Agreement”) is
entered into as of May 30, 2003 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”) and amends and restates in its entirety the Restated License Agreement between Pierre Fabre and Cypress dated November 13, 2001 (the “Prior Agreement”), which amended and restated in its
entirety the License Agreement between Cypress and Pierre Fabre dated August 1, 2001 (the “Effective Date”).
 RECITALS
          WHEREAS, Pierre Fabre owns or controls certain patents and valuable know-how related to the compound Milnacipran (as defined below) and the Licensed
Product (as defined below) in the form of an IR Formulation (as defined below) and a SR Formulation (as defined below) that Cypress has licensed from Pierre Fabre;
          WHEREAS, Pierre Fabre has developed Milnacipran for the treatment of depression and currently markets the IR Formulation itself or through licensees
for the treatment of depression in certain territories outside the United States;
          WHEREAS, Cypress and Pierre Fabre desire to
enter into this Agreement to expand the field of the license granted to Cypress to all indications and to make certain other changes to the Prior Agreement;
          WHEREAS, in partial consideration for entering into this Agreement, Cypress has agreed to issue to Pierre Fabre shares of its Common Stock and a
warrant to purchase shares of its Common Stock, as described herein; and
          WHEREAS, Pierre Fabre has granted to Cypress a license to
certain trademarks pursuant to a Trademark License Agreement between Cypress and Pierre Fabre as of the Effective Date.
 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
           1.1         “Administrator” shall have the
meaning set forth in Section 4.2(b)(iv).
           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 fifty percent (50%) of the voting stock of that
corporation, or in the absence of ownership of at least fifty percent (50%) of the voting stock of that corporation, the
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  power, directly or indirectly to cause the direction of the management and policies of such corporation.
           1.3         “API” shall mean the active pharmaceutical ingredient Milnacipran contained in the
Licensed Product.
           1.4         “Approval Items” shall have the meaning set forth
in Section 9.2(d).
           1.5         “Bulk Licensed Product” shall mean the Licensed
Product in final dosage form using Pierre Fabre’s formulation or any Cypress Formulation and “Finished Licensed Product” shall mean the Licensed Product in final dosage form including primary and secondary packaging and
ready for use by the ultimate consumer.
           1.6         “Change in Control” shall
have the meaning set forth in Section 16.6(b).
           1.7         “Commencement of Phase II or Phase
III Clinical Trials” shall mean the date on which the first patient is enrolled for the applicable clinical trial.
           1.8
        “Confidential Information” shall have the meaning set forth in Section 13.1.
           1.9         “Cypress Information” shall mean all data and Information developed or acquired by or
for Cypress, its Affiliates and permitted sub-licensees and used by Cypress, its Affiliates and sub-licensees in filing for any Regulatory Approvals for the Licensed Products and marketing the Licensed Product in the Licensed Territory. Cypress
Information excludes Cypress Patents and Cypress Formulation Patents.
           1.10         “Cypress
Formulations” shall mean all new formulations of the Licensed Product developed or acquired by or for Cypress (which includes new formulations of the Licensed Product developed by Third Parties for Cypress), its Affiliates and permitted
sub-licensees other than the existing IR Formulation and the SR Formulation that have been developed by Pierre Fabre prior to the Effective Date, excluding however any minor improvements thereto.
           1.11         “Cypress Formulation Patents” shall mean all Patents controlled by Cypress or its
Affiliates (with a right to license or sublicense) that claim any Cypress Information developed using a Cypress Formulation and are necessary or useful for the development, manufacture, commercialization or use of Milnacipran and any Cypress
Formulations in the Rest of the World. The Cypress Formulation Patents exclude any Cypress Patents.
           1.12
        “Cypress Patents” shall mean all Patents controlled by Cypress or its Affiliates (with a right to license or sublicense) that claim any Cypress Information developed using the IR
Formulation or the SR Formulation and are necessary or useful for the development, manufacture, commercialization or use of Milnacipran and the Cypress Product in the Rest of the World. The Cypress Patents include, without limitation, the Patents
set forth on Exhibit E hereto and made a part hereof. The Cypress Patents exclude any Cypress Formulation Patents.
           1.13
        “Cypress Product” shall mean any product containing Milnacipran as an active ingredient, in any formulation and through any mode of administration, that incorporates or uses the
Licensed Technology or any Cypress Information developed using the IR Formulation or the
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  SR Formulation or the manufacture, use or sale of which is within the scope of any claim of the Cypress Patents.
           1.14         “Development Plan” shall mean the development plan relating to the development of the
Licensed Product in the Field attached in Exhibit C hereto and made a part hereof, to be updated at the next meeting of the Steering Committee.
           1.15         “Early Termination” shall have the meaning set forth in Section 14.3(b).

          1.16         “Effective Date” shall have the meaning set forth in the introductory
paragraph.
           1.17         “Equity Investment Agreement” shall mean the Equity
Investment Agreement that is contemplated by Section 2.4 and entered into between Pierre Fabre and Cypress within five business days of execution of this Agreement.
           1.18         “Extended Territory” shall have the meaning set forth in Section 2.2.

          1.19         “FDA” shall mean the United States Food and Drug Administration.

          1.20         “Field” shall mean any and all indications.
           1.21         “FMS” shall mean the prevention and treatment of fibromyalgia syndrome.

          1.22         “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.
           1.23         “IND Clearance Date” shall mean January 2, 2002.
           1.24         “Indemnifying Party” shall have the meaning set forth in Section 15.2.

          1.25         “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.
           1.26
        “License Term” shall have the meaning set forth in Section 14.1.
           1.27
        “Licensed Product” shall mean any product (including a Cypress Product or product containing a Cypress 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 is within the scope of any claim of the Pierre Fabre Patents. The Licensed Product includes the following
formulations developed by Pierre Fabre prior to the Effective Date:
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                                (a)
        the immediate release formulation in capsule form containing 25 mg and 50 mg of Milnacipran (the “IR Formulation”), and
                               (b)        
the slow release formulation covered by Pierre Fabre Patents containing 120 mg of Milnacipran (the “SR Formulation”).
           1.28         “Licensed Technology” shall mean the Pierre Fabre Patents and the Pierre Fabre
Know-How.
           1.29         “Licensed Territory” shall mean the United States of
America, its territories and possessions and Canada and, if extended pursuant to Section 2.2, countries that are members of the European Union and Japan.
           1.30         “Losses” shall have the meaning set forth in Section 15.1(a).
           1.31         “Major European Countries” shall mean the United Kingdom, France, Italy, Germany, Spain
and Scandinavia (Denmark, Finland, Norway and Sweden).
           1.32         “Manufacturing
Know-How” shall mean all data, Information and know-how in the possession of Pierre Fabre prior to the Effective Date or developed or acquired by or for Pierre Fabre during the License Term relating to the manufacture of the
API.
           1.33         “Maximum Sub-licensee Payment Amount” shall mean any and all
Sub-licensee Payments up to and including [...***...] in the aggregate.
           1.34        
“Milnacipran” shall mean the substance known as milnacipran.
           1.35        
“Minimum Sales” shall have the meaning set forth in Section 5.3(b).
           1.36        
“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.
           1.37        
“Negotiation Period” shall have the meaning set forth in Section 2.1(b).
           1.38       “Net Selling Price” shall mean on a country by country basis the price invoiced by Pierre
Fabre or Cypress, as applicable, or their respective Affiliates or sub-licensees from a Third Party which is not an Affiliate or sub-licensee of the selling party (unless such Affiliate or sub-licensee is the final user of and does not further sell
such product, in which case the amount billed therefor shall be deemed to be the amount that would be billed to a Third Party in an arm’s-length transaction) for sales of any Licensed Product to such Third Parties less the following items, as
allocable to such Licensed Product: (i) trade discounts, credits or allowances, (ii) credits or allowances additionally granted upon returns, rejections or recalls (except where any such recall arises out of Pierre Fabre’s or Cypress’ or
its Affiliate’s or sub-licensee’s gross negligence, willful misconduct or fraud), (iii) freight, shipping and insurance charges, (iv) taxes,
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Required
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  duties or other governmental tariffs (other than income taxes) and (v) government mandated rebates. “Average Net Selling Price” shall mean the weighted
average Net Selling Price of the Licensed Product in the Licensed Territory or in the Rest of the World as applicable. “Net Sales” shall mean the amount equal to the total units invoiced by Pierre Fabre or Cypress, as
applicable or their respective Affiliates or sub-licensees from a Third Party which is not an Affiliate or sub-licensee of the selling party at the actual Net Selling Price.
                    1.39        “New Salts” shall mean any
variant of the hydrochloride salt form of Milnacipran resulting from the chemical substitution of the chloride counterion.
                     1.40        “Option Period” shall have
the meaning set forth in Section 4.4.
                     1.41        “Original Notice” shall have
the meaning set forth in Section 2.1(b).
                     1.42        “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.
                     1.43        “Phase II Clinical Trials”
shall mean those trials on sufficient numbers of patients that are designed to establish the safety and biological activity of a drug for its intended use, and to define warnings, precautions and adverse reactions that are associated with the drug
in the dosage range to be prescribed, as further defined in Federal Regulation 21 C.F.R. 312.21.
                     1.44        “Phase III Clinical Trials”
shall mean those trials on sufficient numbers of patients that are designed to establish that a drug is safe and efficacious for its intended use, and to define warnings, precautions and adverse reactions that are associated with the drug in the
dosage range to be prescribed, and supporting Regulatory Approval of such drug or label expansion of such drug, as further defined in Federal Regulation 21 C.F.R. 312.21.
                     1.45        “Pierre Fabre Know-How”
shall mean Information that is controlled by Pierre Fabre or its Affiliates (with the right to license or sublicense) that is not covered by the Pierre Fabre Patents but is related to the API or the Licensed Product. The Pierre Fabre Know-How
includes, without limitation, the Information described on Exhibit A. Pierre Fabre Know-How shall exclude Manufacturing Know-How, subject to the terms of the Supply Agreement.
                     1.46        “Pierre Fabre Patents” shall
mean all Patents controlled by Pierre Fabre or any of its Affiliates (with the right to license or sublicense) that are necessary or useful for the development, manufacture, commercialization or use of Milnacipran and the Licensed Product in the
Licensed Territory. The Pierre Fabre Patents include, without limitation, the Patents set forth on Exhibit B.
                     1.47        “Reference Period” shall
have the meaning set forth in Section 5.3(b).
                     1.48        “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

5.

  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.
                     1.49        “Rest
of the World” shall mean the entire world excluding the Licensed Territory.
                     1.50        “Second Reference Period”
shall have the meaning set forth in Section 5.3(b).
                     1.51        “Selection Criteria” shall
have the meaning set forth in Section 4.3.
                     1.52        “SNRI product” shall mean
any serotonin norepinephrine reuptake inhibitor product, meaning an agent whose sole mode of action (including major metabolites) is through the selective reuptake inhibition of the two monoamines, serotonin (5-HT) and norepinephrine (NA). The sole
mode of action means a low binding affinity (>1000nM) on standard assays for dopamine D1- and D2 class; serotonergic 1, 2, and 3 class; adrenergic alpha and beta; cholinergic nicotinic and muscarinic; glutamatergic AMPA, Kainate, NMDA, and
metabotropic; and histaminegic 1- and 2-class receptors. The agent should also not effect MAO-A and –B enzyme activity. The IC50 or KI of in vivo reuptake inhibition for NA and 5-HT must be both <1000nM, while the selectivity ratio for 5-HT
and NA (i.e., IC50 or KI of 5-HT in vivo reuptake inhibition divided by that of NA) must range between 0.2 and 5. Similarly, the IC50 of KI of in vivo reuptake inhibition for dopamine must be >1000 nM, with a selectivity ratio for dopamine vs. NA
or 5-HT of >50. Finally, the agent must not effect the release of the amines, including 5-HT, NA and dopamine.
                     1.53        “Sub-licensee Payments”
shall mean any license payments or milestone payments received by Cypress or any of its Affiliates from any sub-licensee with respect to the Licensed Product, but excluding any amounts received from such sub-licensee (a) as royalty payments, (b) as
payments for any research and development funding, (c) for securities of Cypress issued to such sub-licensee or (d) as a bona fide loan.
                     1.54        “Supply Agreement” shall
have the meaning set forth in Section 7.4.
                     1.55        “Steering Committee” shall
have the meaning set forth in Section 9.1.
                     1.56        “Third Party” shall mean any
entity other than Cypress or Pierre Fabre or an Affiliate of Cypress or Pierre Fabre.
                     1.57        “Trademark License Agreement”
shall mean the Trademark License Agreement between Cypress and Pierre Fabre as of the Effective Date.
                     1.58        “Trademarks” shall have the
meaning set forth in the Trademark License Agreement dated as of the Effective Date between Cypress and Pierre Fabre.
                     1.59        “Trial Period” shall have
the meaning set forth in Section 5.3(b).
                     1.60        “Valid Claim” shall mean (a)
a claim of an issued Patent included within the Cypress Patents or the Cypress Formulation Patents, which has not (i) expired or been canceled, (ii) been declared invalid by an unreversed and unappealable decision of a court or other
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  appropriate body of competent jurisdiction, (iii) been admitted to be invalid or unenforceable through reissue, disclaimer or otherwise, or (iv) been abandoned, or (b) a claim under a
pending application for a Patent under the Cypress Patents or the Cypress Formulation Patents.
                     1.61.        “Warrant Agreement” shall
mean the Warrant Agreement that is contemplated by Section 2.4 and entered into between Pierre Fabre and Cypress within five business days of execution of this Agreement.
 2.                 LICENSE GRANTS
                      2.1          License Grant by Pierre
Fabre.
                                    
 (a)        Pierre Fabre hereby grants to Cypress during the License Term, an exclusive license, with the right to sublicense, under the Licensed Technology to develop, register, use, distribute, sell,
offer for sale, have sold and import the Licensed Product in the Licensed Territory in the Field. Pierre Fabre further grants Cypress a license to use Pierre Fabre Know-How and Pierre Fabre Patents, to the extent necessary to formulate or have the
API formulated into Bulk Licensed Product and package Bulk Licensed Product into Finished Licensed Product, solely for sale of Licensed Product in the Licensed Territory.
                                    
 (b)        Cypress shall have the right to sub-license the rights granted under Section 2.1 above after due consultation with Pierre Fabre; provided, that, should Cypress decide to appoint a
sub-licensee for the development, registration, marketing and sale of the Licensed Product in the Field in the Licensed Territory, then Cypress shall provide Pierre Fabre with written notice thereof (the “Original Notice”)
and hereby grants Pierre Fabre a right of first discussion to take such license if at that time, Pierre Fabre has an Affiliate in the Licensed Territory, and upon Pierre Fabre’s request, shall enter into good faith negotiations with Pierre
Fabre to grant Pierre Fabre marketing rights to the Licensed Product in the Field in the Licensed Territory. If Pierre Fabre does not notify Cypress of its interest in sublicensing the Licensed Product, in the Licensed Territory in the Field within
30 days from receipt of the Original Notice, then Cypress shall be free to appoint a Third Party as sub-licensee for the development, registration, marketing and sale of the Licensed Product in the Field in the Licensed Territory. In the event that
Pierre Fabre is interested in obtaining such a license, it shall notify Cypress in writing within 30 days after receipt of the Original Notice whereupon the parties shall negotiate in good faith for up to two months (the “Negotiation
Period”) from the date of the Original Notice. If the parties fail to enter into a definitive agreement granting Pierre Fabre such rights within such two-month negotiation period despite mutual efforts made by both parties to reach an
agreement, it shall be deemed to constitute rejection by Pierre Fabre of such right and then Cypress shall be free to appoint a Third Party as sub-licensee pursuant to the sublicense rights granted pursuant to Section 2.1(a) above. Pierre Fabre
shall have no rights under this Section 2.1(b) if the Negotiation Period expires without Cypress and Pierre Fabre entering into a definitive agreement.
                                    
 (c)        When selecting a sub-licensee, Cypress shall give appropriate consideration to the following, whether such sub-licensee has proven capabilities in clinical development, registrations and
marketing of pharmaceutical drugs in the Licensed Territory and whether such sub-licensee will bring significant valuable skills, assets and resources to
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  successfully develop and register the Licensed Product in a timely manner and to maximize its commercial potential in the Field in the Licensed Territory.
                                    
 (d)        Any sub-license granted by Cypress under this Agreement will provide the sub-license gross margins on the Licensed Product that are consistent with industry standards based on the stage of
development of the Licensed Product and designed to enable the commercial success of the Licensed Product, each as determined at the time such sub-license is negotiated.
                                    
 (e)        It shall be Cypress’ sole responsibility to ensure that the sub-licensee(s) fully comply with all the terms and conditions described in this Agreement, the Trademark License Agreement
and the Supply Agreement, specifically including, but not limited to, the requirements in Section 5.2 regarding launch, promotion and distribution of the Licensed Product, Section 5.3(a) regarding sales forecasts of the Licensed Product and Section
5.3(b) regarding certain Minimum Sales.
                     2.2          Extension of the Licensed
Territory.   On an indication-by-indication basis, in the event that Pierre Fabre or any of its Affiliates or licensees does not submit an application (in a reasonably acceptable format) for Regulatory Approval of a Licensed Product in
the applicable indication within the Field in either (1) all the Major European Countries and Japan, or (2) the European Union and Japan, and have in place a commercialization plan for such Licensed Product in the applicable indication within the
Field in these territories within [...***...] after Cypress files an NDA for any Licensed Product in the applicable indication within the Field in the United States (so long as such NDA filing includes data and information that is sufficient
for filing in the applicable territories described above), the Licensed Territory will automatically be extended with respect to the applicable indication within the Field to include the European Union and Japan (the “Extended
Territory”), subject to existing exclusive license rights already granted by Pierre Fabre to Third Parties as of the date of this Agreement as set forth on Exhibit F. In the event that the Licensed Territory is extended under
this Section 2.2, Pierre Fabre will retain the following rights:
                                    
 (a)        a right to supply Cypress with Bulk Licensed Product or Finished Licensed Product for the Extended Territory as long as the Bulk Licensed Product and the Finished Licensed Product embodies a
Pierre Fabre formulation, subject to Section 7 and the Supply Agreement;
                                    
 (b)        a right to co-market the Licensed Product in the applicable indication within the Field under a different trademark from the Trademark in any of those territories within the European Union in
which it then has active sales and marketing sales forces for any product; and
                                    
 (c)        a right to co-market the Licensed Product in the applicable indication within the Field in Japan through a local Japanese partner under a trademark different from the Trademark.
                      2.3          Rights
Retained by Pierre Fabre.  Pierre Fabre shall retain the following rights:
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                      (a)       the exclusive
worldwide right under the Licensed Technology to make and have made API;
                     (b)       the exclusive worldwide right under the Licensed
Technology to make and have made the Licensed Product using the IR Formulation and/or the SR Formulation for the Rest of the World; and
                     (c)       the exclusive right under the Licensed Technology to
use, distribute, sell, offer for sale, have sold and import the Licensed Product in the Rest of the World in the Field.
          2.4      Issuance of Common Stock and Warrants to Purchase Common Stock.   In partial consideration for the rights granted to
Cypress by Pierre Fabre under this Agreement, Cypress shall issue Pierre Fabre 1,000,000 shares of its Common Stock pursuant to the Equity Investment Agreement and a warrant to purchase 300,000 shares of its Common Stock pursuant to the Warrant
Agreement.
 3.     DEVELOPMENT AND REGISTRATION
          3.1      Development Activities - transfer and obtaining of the IND.   Cypress shall use commercially reasonable efforts to
develop the Licensed Product in the Licensed Territory at its own expense, and in accordance with the initial development plan, which is summarized on Exhibit C, as may be amended from time to time (subject to Steering Committee approval of
items in Section 9.2(d)). Cypress shall also use commercially reasonable efforts to achieve the following events with respect to a Licensed Product in FMS in the United States by the time set forth opposite each such event; provided that the
timelines described below set forth on the following assumptions:
                     (a)        The timelines below will be subject to adjustment as
determined by the Steering Committee if any formulation other than the IR Formulation and the SR Formulation is used. The timelines for the following events begin on the first day following the IND Clearance Date:
                     (b)        Commencement of Phase II Clinical Trial within
[...***...] after the IND Clearance Date.
                     (c)        Commencement of Phase III Clinical Trial within
[...***...] after the IND Clearance Date.
                     (d)        NDA filing both in the United States and Canada
within [...***...] after the IND Clearance Date.
          3.2      Transfer of all INDs in Extended Territory.  
If the Licensed Territory is extended pursuant to Section 2.2, Pierre Fabre will promptly transfer to Cypress, all INDs for Milnacipran, if any, filed by Pierre Fabre with respect to the applicable indication within the Field in any other
countries in the Licensed Territory as requested by Cypress.
          3.3      Registration Activities.   In conducting
registration activities, Cypress shall use commercially reasonable efforts to obtain in a timely manner NDA approvals and subsequently
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  all additional necessary price and reimbursement approvals by the health/regulatory authorities of the Licensed Territory; provided, however  that the parties acknowledge that
such price and reimbursement approvals may not be granted. Cypress shall also keep Pierre Fabre fully informed of the registration process through the Steering Committee and upon request of Pierre Fabre, shall allow Pierre Fabre representatives to
participate in substantive meetings with the health/regulatory authorities of the Licensed Territory, if permitted by such health/regulatory authorities.
          3.4      Pre-marketing Activities.   During the development of the Licensed Product and until Cypress commences commercialization
of the Licensed Product in the Field, Cypress shall conduct pre-marketing activities as determined by Cypress with input from the Steering Committee to ensure successful launch of the Licensed Product in the Licensed Territory.
          3.5      Employee of Pierre Fabre.   Pierre Fabre may delegate one of its employees to work at Cypress’ offices for as long
as mutually agreeable between Cypress and Pierre Fabre. Such employee shall be integrated into the Cypress team responsible for development of the Licensed Product, and involved in coordination of the development and registration activities between
Pierre Fabre and Cypress for the Licensed Product. Cypress and Pierre Fabre shall mutually determine the nature and scope of the work to be accomplished by such employee, and such employee shall be subject to periodic performance evaluations to be
made jointly by Cypress and Pierre Fabre. All costs in connection with the employment of such employee, including, without limitation, salary (including all payroll tax withholdings), fringe benefits (including medical, dental, life, disability,
workers’ compensation or other insurance coverage provided by Pierre Fabre), all employment-related taxes, costs incurred in obtaining a work visa, if necessary, and any other costs incident to such employee’s employment, will be directly
paid by Pierre Fabre. Cypress will provide office space and job-related equipment for such employee and such employee shall agree to be subject to Cypress’ standard policies and procedures while at Cypress’ facilities.
          3.6      Commercially reasonable efforts.   As used in Section 3, the term “commercially reasonable
efforts” shall mean that the parties shall conform to trade standards of diligence in fulfilling their obligations under this Section 3, consistent with those used in the pharmaceutical industry for the research and development of
compounds having comparable commercial potential.
 4.     RIGHT TO USE AND LICENSE CERTAIN INFORMATION
AND PATENTS
          4.1      Access to Information and Patents.   Cypress Information
derived from Cypress and its Affiliates’ or permitted sub-licensees’ development, marketing and other permitted activities under and during the License Term with respect to the Licensed Product and all intellectual property rights in
connection therewith, if any, including, without limitation, Cypress Patents shall be the sole property of Cypress or of its Affiliates or sub-licensees. Cypress shall, through the Steering Committee pursuant to Section 9.2 and as provided in
Section 11.2, regularly provide Pierre Fabre with up-dated information regarding Cypress Information, Cypress Formulations, Cypress Patents, Cypress Formulation Patents and development of New Salts. In addition, to the extent that Cypress deems
necessary, it will facilitate any discussions between Pierre Fabre and any sub-licensee.
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           4.2      License Grant by Cypress on Cypress Product.
                     (a)        Subject to the terms and conditions of this
Agreement, with respect to Cypress Information applicable to an indication within the Field provided to Pierre Fabre under Section 4.1, Cypress hereby grants to Pierre Fabre a royalty-bearing, exclusive license, with the right to sublicense,
under the Cypress Patents claiming such Cypress Information, and to use such Cypress Information, in each case to develop, register, manufacture, use, distribute, sell, offer for sale and have sold the Cypress Product in the Rest of the World in
such indication within the Field, subject to Section 2.2.
                     (b)        In consideration of the license granted under
Section 4.2(a), Pierre Fabre shall pay Cypress a royalty of [...***...] on Net Sales by Pierre Fabre and its Affiliates and sub-licensees (determined in accordance with Section 4.2(b)(iii) or (iv), as applicable, on a
country-by-country and indication-by-indication basis in the Rest of the World as follows:
                                 (i)   
     [...***...] of such royalty will be payable if, and only if, Pierre Fabre or any of its Affiliates or sub-licensees can use United Stated Phase III Clinical Trials data included in the Cypress Information with respect
to an indication as data for a pivotal study for such indication in the applicable country in the Rest of the World to file and obtain registration, without Pierre Fabre or its Affiliates or sub-licensees being required to conduct an additional
pivotal study in such country to confirm the efficacy in the applicable indication. The royalty under this Section 4.2(b)(i) shall be payable for the 10 year period after the first commercial sale of the Cypress Product by Pierre Fabre or any
of its Affiliates or sub-licensees in the applicable indication in the applicable country; and
                                 (ii)   
    [...***...] of such royalty will be payable beginning on the first commercial sale of the Cypress Product by Pierre Fabre or any of its Affiliates or sub-licensees for the applicable indication in the applicable country
and continuing (A) until expiration of the last to expire Valid Claim within the Cypress Patents covering the use of Cypress Product for the applicable indication in the applicable country, or (B) alternatively, if no such Valid Claim
exists, for the duration of the exclusivity resulting from data protection for the Cypress Information applicable to such indication in the applicable country; provided, however, that if a Third Party (other than any Affiliate or sub-licensee
of Pierre Fabre) sells in a country of the Rest of the World a product containing Milnacipran in an applicable indication, and the market share held by the Third Party for such indication in the applicable country is at least [...***...] for
two consecutive quarters, then the [...***...] royalty shall no longer be due, either in respect of a Valid Claim or on the basis of data protection exclusivity, with respect to the applicable indication and the applicable country starting
from the date after the end of second quarter during which such Third Party’s market share is at least [...***...].
                       
         (iii)      For each country in which Pierre Fabre or any of its Affiliates or sub-licensees are selling Licensed Product prior to and continuing on the date
of the first sale of Cypress Product in such country, for the term beginning on the date of the first sale of Cypress Product and ending [...***...] later, the royalty payment due to Cypress under Sections 4.2(b)(i) and (ii) in each given
country will be calculated by multiplying the royalty rate by the amount by which (A) the aggregate [...***...] exceeds (B) the [...***...].
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                                  (iv)   
    For (A) each country in which Pierre Fabre and its Affiliates and sub-licensees do not have existing sales of Licensed Product on the date of the first sale of Cypress Product in such country and (B) each country in which
Pierre Fabre or any of its Affiliates or sub-licensee(s) were selling Licensed Product on the date of the first sale of Cypress Product in such country, following the date that is [...***...] after the date of the first sale of Cypress
Product, an expert in market analysis of pharmaceutical products will be appointed (the “Administrator”) by mutual written agreement of Pierre Fabre and Cypress who will determine on an annual basis, or less frequently as
determined by mutual written agreement of Pierre Fabre and Cypress, the applicable percentages of the market for sales of Licensed Product and Cypress Product which are attributable to indications covered by Cypress Information and Cypress Patents.
The royalty payment due to Cypress under Sections 4.2(b)(i) and (ii) in each given country will be calculated by multiplying the [...***...] by the product of (x) the [...***...] by (y) the [...***...]. Each determination of
the Administrator shall be final and binding on both Cypress and Pierre Fabre. Cypress and Pierre Fabre shall each bear its own attorney’s fees, costs, and disbursements arising out of such process, and shall pay an equal share of the fees and
costs of the Administrator.
                     (c)       All
provisions of Section 10 apply to this Section 4.2 as though the term “Cypress Product” were contained in Section 10. The defined terms, “Net Selling Price” and Net Sales,” shall apply to this Section 4.2 as though the term
“Cypress Product” were contained in such definitions.
                     (d)       Cypress agrees to use commercially reasonable efforts
to obtain from Third Parties that generate data and Information using the IR Formulation or the SR Formulation on behalf of Cypress, the right to include such data and Information in the Cypress Information and to sub-license any Patents licensed to
Cypress by such Third Party that claim such data and Information and are necessary or useful for the development, manufacture, commercialization or use of Milnacipran and Cypress Product in the Rest of the World.
          4.3      Cypress Proprietary Formulations.   Pierre Fabre agrees that the license granted to Cypress pursuant to Section 2.1
provides Cypress with the right to develop Cypress Formulations. The Steering Committee will establish business and technical criteria (“Selection Criteria”) to be used by Cypress in determining whether a Cypress Formulation
should be used instead of the IR Formulation or SR Formulation. Should the IR Formulation or SR Formulation fail to conform to the Selection Criteria, and in the event that Cypress decides to develop any Cypress Formulation, Cypress will then notify
Pierre Fabre of such Cypress Formulations, and the parties will negotiate in good faith the grant by Cypress of an exclusive license under the Cypress Formulation Patents to Pierre Fabre, its Affiliates and sub-licensees to register, market and sell
such Cypress Formulations for the Rest of the World on commercially reasonable terms, provided that the royalty to be paid by Pierre Fabre in consideration of the rights granted in Section 4.2 shall be included in the overall economic discussion.
Cypress or its Affiliates or sub-licensees will own and control any intellectual property claiming Cypress Formulations, including, without limitation, the Cypress Formulation Patents.
          4.4      New Salts.   Pierre Fabre agrees that the license granted to Cypress pursuant to Section 2.1 includes the right for
Cypress to develop New Salts. In the event that Cypress decides to develop any New Salts, Cypress will then notify Pierre Fabre of such New Salts and
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  beginning on the date of such notification and ending [...***...] later (the “Option Period”), Cypress will grant to Pierre Fabre an exclusive option to
license such New Salts. During the Option Period, the parties will negotiate in good faith the terms and conditions of the grant by Cypress of an exclusive license to Pierre Fabre, its Affiliates and sub-licensees to register, market and sell such
New Salts under the applicable Patents controlled by Cypress (with the right to license or sublicense) for the Rest of the World on commercially reasonable terms. Cypress or its Affiliates or sub-licensees will own and control any intellectual
property claiming any New Salts. Cypress agrees to consult with Pierre Fabre regarding supply of New Salts.
 5.     TRADEMARK- MARKETING - SALES
PROMOTION - NON COMPETITION
          5.1      Trademark - Trade dress
Marking.   In the Licensed Territory, the Licensed Product will be sold by Cypress, its Affiliates and sub-licensees exclusively under the Trademark. Terms and conditions of use of the Trademark by Cypress, its Affiliates and
sub-licensees are set forth in the Trademark License Agreement. The Licensed Product will be marketed by Cypress and its permitted sub-licensees in the Licensed Territory under Cypress or Cypress sub-licensees trade dress which shall include the
notice “Licensed from PIERRE FABRE” in a legible manner on all packaging, leaflets, documents, congress materials and generally in association with the reference to the Licensed Product and the Trademark, so far as this is
acceptable under applicable laws and regulations in the Licensed Territory.
          5.2      Responsibility for Launch, Promoting
and Distributing the Licensed Product.   Cypress and its permitted sub-licensees shall be solely responsible for the launch, promotion and distribution of the Licensed Product in the Licensed Territory. All costs associated therewith
shall be borne by Cypress and its permitted sub-licensees. The launch of the Licensed Product by Cypress or its permitted sub-licensee shall take place within no more than six months following NDA Approval in each country of the Licensed Territory.
No later than the NDA filing for the Licensed Product in the United States, Cypress shall prepare and submit to the Steering Committee for review and comments a three years rolling marketing and commercial plan for the Licensed Product in the Field
in the Licensed Territory which will include marketing strategy, sales forecasts, minimum sales efforts and promotional commitments and such plan shall be amended from time to time.
          5.3      Sales Forecasts and Minimum Sales.   During the License Term, Cypress commits to procure sales, create a demand and
continuously develop the sales of the Licensed Product in the Field in the Licensed Territory in the most effective manner and by all suitable and adequate means.
                     (a)       Sales Forecasts.   No later than NDA filing
for the Licensed Product in the United States, Cypress and Pierre Fabre will discuss sales forecasts to be achieved by Cypress and its permitted sub-licensee with the Licensed Product in the Field in the Licensed Territory during the License Term.
Such sales forecasts will be based on factors determined by Cypress in consultation with the Steering Committee, including factors such as, projected sales of the Licensed Product in the Field, price positioning, foreseeable market trends and
competition.
                     (b)       Minimum
Sales.
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    (i)         In the event that Cypress and its permitted sub-licensee fail to reach at least [...***...] of the sales forecasts of Licensed Product agreed pursuant to section
5.3(a) (the “Minimum Sales”) during [...***...] consecutive years and Cypress has otherwise met its obligations with respect to the minimum sales efforts set forth in the marketing plan such as marketing, promotional
and sales force investments as approved by the Steering Committee, then Cypress shall have [...***...] within which to try to meet the Minimum Sales. If at the end of such [...***...], Cypress has not achieved the Minimum Sales, then
Pierre Fabre will have the option in its sole discretion to convert the exclusive license granted under Section 2.1 to a non exclusive license; provided, however, that Cypress shall first have the option to maintain the rights granted
under section 2.1 for one non renewable additional period of one year (the “Trial Period”) by paying to Pierre Fabre a compensation corresponding to [...***...] of the difference between the Minimum Sales agreed for
such [...***...] period (the “Reference Period”) and the actual sales achieved by Cypress and its sub-licensees during the Reference Period valued at [...***...] of the Average Net Selling Price. The payment of
the above compensation shall be made by Cypress within [...***...] following the end of the Reference Period. If at the end of the Trial Period, Cypress has again not achieved the Minimum Sales, then Pierre Fabre shall have the option in its
sole discretion to convert the exclusive license granted under Section 2.1 to a non exclusive license or to terminate this Agreement.
                                     
    (ii)        In the event that Cypress and its permitted sub-licensee fail to reach the Minimum Sales during [...***...] consecutive years and Cypress has not otherwise met its
obligations with respect to the minimum sales efforts set forth in the marketing plan, then Pierre Fabre will have the option in its sole discretion to convert the exclusive license granted under Section 2.1 to a non exclusive license or to
terminate this Agreement; provided, however, Cypress shall first have the option to maintain the rights granted under Section 2.1 for a Trial Period as defined in the above paragraph (i) by paying to Pierre Fabre compensation
corresponding to the difference between the Minimum Sales agreed for such [...***...] (the “Second Reference Period”) and the actual sales achieved by Cypress and its sub-licensees during that Second Reference Period
valued at [...***...] of the Average Net Selling Price The payment of the above compensation shall be made by Cypress within [...***...] following the end of the Second Reference Period. If at the end of the Trial Period, Cypress has
again not achieved the Minimum Sales, then Pierre Fabre shall have the option in its sole discretion to convert the exclusive license granted under Section 2.1 to a non exclusive license or to terminate this Agreement.
                     5.4         Non Competition.   For the term of
this Agreement, Cypress, its Affiliates and its permitted sub-licensees shall not register, market or sell any other [...***...] in the Licensed Territory in the Field unless otherwise agreed by Pierre Fabre.
 SECTION 6.       UP FRONT FEES, MILESTONE AND ROYALTY PAYMENTS
                     6.1         Up-Front fees and milestones
payments.   As partial consideration for Pierre Fabre’s entering into this Agreement with Cypress and for the rights granted to Cypress on the Licensed Technology, Cypress shall pay to Pierre Fabre the following up-front fees and
milestone payments:
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                      6.2         Up Front
Fees.   Cypress shall pay to Pierre Fabre $750,000 within 15 days following the Effective Date (Pierre Fabre acknowledges that is has received such payment). In addition, within 15 days following the IND Clearance Date, Cypress shall
pay Pierre Fabre $750,000 (Pierre Fabre acknowledges that is has received such payment). The up front fees shall not be refundable to Cypress.
                     6.3         Milestone Payments.   Within 15 days
following the first occurrence of each of the events set forth below, Cypress shall pay to Pierre Fabre the one-time milestone payments set forth below (whether such milestone is achieved by Cypress or by its sub-licensee):

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

                     The milestone
payments shall not be refundable to Cypress.
                     6.4
        Royalties.   As further consideration for the rights and licenses hereby granted to Cypress in respect of the Licensed Technology, Cypress shall pay Pierre Fabre the following royalty
payments:
                                    (a)
       In consideration of the Pierre Fabre Patents, a royalty of [...***...] on the Net Sales of the Licensed Product made by Cypress, its Affiliates or sub-licensees in the Licensed Territory from the date
of the first commercial sale until the last to expire of the Pierre Fabre Patents covering the Licensed Product, including the manufacturing process of Milnacipran or the formulation of the Licensed Product.
                                    (b)
       In consideration for the Pierre Fabre Know-How, a royalty of [...***...] on the Net Sales of the Licensed Product made by Cypress, its Affiliates or sub-licensees in the Licensed Territory from the
date of the first commercial sale of the Licensed Product until the 10th anniversary of the date of the first commercial sale of the License Product.
                                    (c)
        In consideration for the Trademarks, a royalty described in the Trademark License Agreement.
                     6.5         Royalty on Sub-Licensee Payments.   If
Cypress grants a sub-license to a Third Party of the rights granted to Cypress under Section 2.1, Cypress agrees to pay to Pierre Fabre [...***...] of all Sub-licensee Payments; provided that, any amount paid by Cypress to Pierre Fabre
above the Maximum Sub-licensee Payment Amount shall be credited against future milestone payments and/or royalty payments owed by Cypress to Pierre Fabre under this Agreement and shall be carried forward to any subsequent years as applicable. Any
amount
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  owed and to be paid by Cypress to Pierre Fabre as aforesaid will be paid within [...***...] from the end of each calendar quarter during which Cypress receives a Sub-licensee
Payment.
 7.           SUPPLY OF API AND TRANSFER
PRICE
                     7.1         Supply by
Pierre Fabre.   Pierre Fabre agrees that it will manufacture and supply to Cypress and its sub-licensees such quantities of API as requested by Cypress and/or its sub-licensees pursuant to the forecasts provided pursuant to Section 7.5
and the Supply Agreement to cover their total market needs for the Licensed Territory. The parties agree that from the Effective Date until the end of the tenth calendar year following the first date of launch of the first Licensed Product in the
Licensed Territory, subject to the provisions of this Section 7.1 and Section 7.2 (the “Supply Term”), Pierre Fabre will be the exclusive supplier to Cypress of the API and Cypress agrees that during the Supply Term, it and
its sub-licensees shall purchase all of their requirements for API from Pierre Fabre for clinical trials, samples and commercial sales. Pierre Fabre shall remain the exclusive supplier of API for Cypress as long as there is no generic competition in
the Licensed Territory taking at least a [...***...] market share of the Licensed Product in the Field during [...***...]. Should any such generic competition appear in the Licensed Territory, then Pierre Fabre will remain Cypress’
exclusive supplier of API, as long a Pierre Fabre can supply API to Cypress at a price no greater than [...***...] more than the price charged by a Third Party generic supplier of API. In the event Pierre Fabre is not able to provide the API
at a price no greater than [...***...] more than the price charged by a Third Party generic supplier, Cypress and its sub-licensees may purchase API from Third Party suppliers; provided that the API supplied by such Third Party complies
with API Specifications as defined in the Supply Agreement. Cypress agrees that in the [...***...] preceding the date on which the Supply Term will automatically expire, it will discuss potentially extending the Supply Term; provided
that Cypress shall have no obligation to extend the Supply Term and; provided further that such discussion shall not occur in the event Cypress and/or its sub-licensees begins purchasing API from a generic supplier pursuant to the terms
of this Section 7.1 or in the event Cypress qualifies a second supplier pursuant to the terms of Section 7.2.
                     7.2           Second Supplier.   Cypress
shall have the right to qualify a second supplier in the event that Pierre Fabre has not qualified a second manufacturing site for API (which can be either a second workshop located in the Gaillac facilities or a sub-contractor manufacturing site)
or has not constituted a safety stock of API (the amount of which will be defined in the Supply Agreement) at a certain deadline to be mutually agreed in the Supply Agreement. In such a case, Cypress agrees that it will not activate the second
supplier unless Pierre Fabre is unable to supply Cypress with the requested quantities of API as determined in the Supply Agreement.
                     7.3           Transfer Price.   For API
supplied by Pierre Fabre for clinical trials, samples or commercial purposes, Cypress will pay to Pierre Fabre a transfer price, equal to [...***...] per kilogram. Such transfer price will be revised by Pierre Fabre on an annual basis,
beginning on January 1, 2004, according to the French INSEE index of consumer prices (indice INSEE des prix à la consommationa France- Ensemble Ménages (265 postes) catégorie hors tabac), the base index being that of January
2003. Payments pursuant to this Section 7.2 will be made by Cypress to Pierre Fabre within 60 days of the date of invoice.

		
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                      7.4          
Supply Agreement.   Cypress and Pierre Fabre agree that within four months of the date of this Agreement, that they will enter into a purchase and supply agreement with respect to API in accordance with the terms set forth in this
Section 7 (the “Supply Agreement”).
                     7.5
          Forecasts and Purchase Orders.   Within [...***...] following the Effective Date, Cypress will provide to Pierre Fabre a forecast of its estimated requirements of API and
proposed delivery dates for API for the following [...***...] period, which forecast shall be updated by Cypress each month thereafter. The API requirements for the [...***...] of each rolling [...***...] forecast shall be a
binding purchase order, and the API requirements for the [...***...] of each such forecast shall be a non-binding purchase order.
                     7.6           Delivery and Acceptance.  
Pierre Fabre agrees to deliver the API in such quantities and on such delivery dates as are specified in Cypress’ binding purchase orders. Pierre Fabre shall ship the API to Cypress or to the address that Cypress designates at Cypress’
expense. The shipping and packaging method used will be at the discretion of Pierre Fabre, but should be sufficient to ensure that the quantities of API will meet the API Specifications as defined in the Supply Agreement. Deliveries shall be made
Ex-Works Pierre Fabre’s facility (ICC Incoterms 2000) and shall be shipped to Cypress’ address as set forth in this Agreement, or as otherwise directed by Cypress in writing.
                     7.7         Specifications; Testing.   Pierre Fabre
will perform standard analytical testing that is mutually acceptable to the parties on each lot of API prior to shipment. Pierre Fabre shall provide a Certificate of Analysis to Cypress or its designated agent with each shipment of the API supplied
hereunder. Such Certificate of Analysis shall certify with respect to each shipment and lot (identified by batch or lot number): (a) the quantity of the shipment, and (b) that the API delivered was manufactured in accordance with the API
Specifications and in conformance with current good manufacturing practices (cGMPs), as well as any further information required by the relevant regulatory authorities that Cypress may have previously notified Pierre Fabre is necessary. Cypress
shall be under no obligation to accept any shipment of the API without an accompanying Certificate of Analysis.
                     7.8         Acceptance and Rejection.
                                    (a)
        Within 60 days of receipt of the API at Cypress’ facilities or such other destination as may be designated by Cypress, Cypress or its agent shall perform such samplings and tests as are appropriate to
determine whether the API meets the API Specifications. If Cypress rejects any shipment of API, Cypress shall within such 60-day period inform Pierre Fabre of its refusal to accept the lot(s), and the reasons therefor; otherwise Cypress shall be
deemed to have accepted the lots.
                                    (b)
        Promptly following any notice of rejection of API by Cypress, Pierre Fabre and Cypress agree to mutually determine whether the rejected API conformed to the API Specifications. If Cypress and Pierre
Fabre cannot agree after a period of 60 days, they shall select a mutually acceptable independent laboratory to perform tests on representative samples from the rejected portion of the shipment. The results of such tests shall be binding upon
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                                     (c)
        If it is determined with or without reference to an independent laboratory that the rejected API was non-conforming, Pierre Fabre shall at Cypress’ election, either make a replacement delivery free
of any additional charge, or reimburse Cypress the purchase price, including freight and insurance (if the purchase price had actually been paid by Cypress) for the rejected API. Rejected API shall be returned to Pierre Fabre or disposed of at
Pierre Fabre’s expense in accordance with Pierre Fabre’s instructions, in which case Cypress shall deliver to Pierre Fabre an appropriate certificate of destruction.
                     7.9         Manufacture of API   Pierre Fabre will
manufacture API in accordance with the API Specifications, cGMPs and other applicable rules and regulations of the FDA and other governmental or regulatory agencies with jurisdiction over the manufacture, use or sale of the API, as then in effect.
Pierre Fabre will be responsible for manufacturing issues related to regulatory compliance. The parties shall promptly notify each other of any new instructions or specifications required by the FDA, and of other applicable United States rules and
regulations. The parties shall confer with each other with respect to the best means to comply with such requirements and shall allocate any costs of implementing such changes on an equitable basis.
                     7.10        Access to Pierre Fabre Facility.   Pierre
Fabre will provide Cypress with reasonable access, during business hours upon reasonable prior notice, to Pierre Fabre’s facilities where API is manufactured to review Pierre Fabre’s manufacturing operations and assess its compliance with
cGMPs and quality assurance standards and the opportunity to discuss any manufacturing issues with Pierre Fabre’s manufacturing and management personnel.
                     7.11        Manufacture of the Licensed Product.

                                   (a)
        Pierre Fabre agrees that it will provide Cypress with reasonable assistance in securing a Third Party manufacturer to produce Bulk Licensed Product on behalf of Cypress if the Bulk Licensed Product uses
the IR Formulation or the SR Formulation, it being understood that it shall be Cypress’ sole responsibility to enter into a manufacturing agreement with such Third Party manufacturer.
                                    (b)
        Cypress shall use due care in the manufacturing, packaging and control of the Licensed Product and shall be responsible for observing quality standards and specifications set forth in the Supply
Agreement, as well as cGMP and relevant regulations of the Licensed Territory with respect to manufacturing, packaging, quality control, storage and sale of ethical pharmaceuticals.
                                   (c) 
       Cypress shall permit Pierre Fabre and/or its authorized representative to inspect Cypress or the Third Party manufacturer premises where the Licensed Product is manufactured, packaged and stored, at reasonable
times and upon reasonable notice.
 SECTION 8.           ADVERSE EVENTS
                     8.1         Obligation to Provide Notice of Adverse
Event.   Pierre Fabre and Cypress shall keep each other informed on all reports of adverse events (hereinafter AE) coming to their knowledge assumed to be related to the Licensed Product, regardless of the origin of such reports. The
terms “reports” shall also include publications in journals or other media.
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           8.2          Notice of Adverse Event. Reports on such AE which according to the
informing party’s careful professional evaluation may negatively affect the efficacy versus toxicity of the Licensed Product or may have consequences regarding the Licensed Product information (e.g. labeling, data sheets, package inserts) or
may require immediate safety measures (such as special information/warnings to the medical profession, patients, authorities or withdrawal of the Licensed Product) shall be forwarded to the other party hereof without delay after having become known.
The same shall apply in case of reports on AE’s being both serious and unexpected (i.e. not specified in the Licensed Product information). Information on all other reported AE’s shall be provided according to the procedure described in
Exhibit D hereto and made a part hereof.
          8.3          Procedure for Providing Notice of Adverse
Event. The informing party may, and is invited to give its professional evaluation of such reports, in particular with regard to suspected, causality, either together with such information or at a later date. The aforementioned information shall
be addressed to the individuals indicated in Section 6.2 of Exhibit D, or to such other address as may thereafter be provided by either party.
          8.4
          Meeting Regarding Adverse Events. In addition to the mutual exchange of AE information, via mail or telefax, meetings will be held upon mutual agreement of the parties, for purposes of
discussing AE issues such as regarding the mutual exchange of AE information as defined in mutually agreed procedures. An agenda of any said meetings shall be forwarded by Pierre Fabre to Cypress one month prior to the date of such meetings. All
reports to be provided by and to Cypress hereunder shall be in the English language.
 9.      STEERING COMMITTEE
           9.1          Establishment of Steering Committee. The parties have established a committee (the
“Steering Committee”), which shall perform the functions provided in this Section 9. The Steering Committee shall consist of four persons (or such other number as mutually agreed by the parties), with an equal number of
members designated by each of Pierre Fabre and Cypress. Each Steering Committee member shall have experience appropriate for the activities to be conducted by the Steering Committee. The Steering Committee shall meet at such times and such places as
shall be determined from time to time by Pierre Fabre and Cypress, but in any event, not less than twice in each calendar year. Members of the Steering Committee may participate in meetings of the Steering Committee in person or by conference
telephone call. A quorum for the conduct of business by the Steering Committee shall consist of one member designated by Pierre Fabre and one member designated by Cypress. The members designated by Pierre Fabre shall collectively have one vote, and
the members designated by Cypress shall collectively have one vote. All actions and decisions by the Steering Committee shall require unanimous approval at a meeting at which a quorum is present, which shall be set forth in minutes of the
proceedings of the Steering Committee, or unanimous written consent setting forth the actions or decisions taken. Expenses incurred by a member of the Steering Committee in connection with the activities of the Steering Committee will be borne by
the party that designated such member.
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            9.2           Steering Committee Functions. The Steering Committee shall
have the authority to conduct the following activities and such other activities as may be agreed to in writing by the parties:
                          (a)        Monitor the progress
and results of research and development conducted by Cypress, it Affiliates and sub-licensees with respect to the Licensed Product;
                          (b)         Review and discuss any
material modification to the Development Plan for the Licensed Product attached hereto as Exhibit C;
                          (c)         Review and discuss the
marketing plan for the Licensed Product proposed by Cypress and any material modification to such marketing plan;
                          (d)        Approve the Selection
Criteria as described in Section 4.3 and any modification thereto, and approve the provisions in the marketing plan for the Licensed Product that establish annual Minimum Sales of Licensed Product and minimum sales efforts with respect to Licensed
Product or any modification to such provisions in the marketing plan (the “Approval Items”). Once approved by the Steering Committee, any modification or agreement regarding the Approval Items shall be included by the parties
into an amendment to this Agreement.
                          (e)        Coordinate mutual
marketing and promotional activities of the parties with respect to the Licensed Products.
                          (f)        Review information
regarding Cypress Information, Cypress Formulations, Cypress Patents, Cypress Formulation Patents and New Salts provided by Cypress.
                          (g)         Review the
publications according to the provisions of Section 13.4
           9.3         Dispute Resolution. If the Steering
Committee is unable to decide or resolve an issue with respect to any Approval Item, the issue shall be referred to the Chief Executive Officers of Pierre Fabre and Cypress. Such officers of the parties shall meet promptly thereafter and shall
negotiate in good faith to resolve such issue, and if advisable shall refer the matter to a mutually agreed independent expert. If they cannot resolve the issue within 30 days of commencing such negotiations, the provisions of Section 16.1 shall
apply. If the Steering Committee is unable to decide or resolve an issue with respect to any matter other than any Approval Item, the issue shall be referred to the Chief Executive Officers of Pierre Fabre and Cypress. Such officers of the parties
shall meet promptly thereafter and shall negotiate in good faith to resolve such issue. If they cannot resolve the issue within 30 days of commencing such negotiations, the Chief Executive Officer of Cypress shall have the final tie-breaking
vote.
 10.      PAYMENT; RECORDS; AUDITS
             10.1        Payment; Reports. Royalty payments and reports for the sale of Licensed Product shall be calculated
and reported for each calendar quarter. All payments due to a party under this Agreement shall be paid within 60 days of the end of each calendar quarter, unless otherwise specifically provided herein. Each payment of royalties shall be accompanied
by a 
 20.

  report of Net Sales of Licensed Products in sufficient detail to permit confirmation of the accuracy of the payment made, including, without limitation and on a country-by-country
basis, the number of Licensed Product sold, the gross sales and Net Sales of Licensed Product, the royalty, in United States dollars or in Euro as applicable, payable, the method used to calculate the payment and the exchange rates used.

            10.2          Exchange Rate; Manner and Place of Payment. All payments hereunder due and
payable by Pierre Fabre to Cypress shall be payable in United States dollars. All payments hereunder due and payable by Cypress to Pierre Fabre shall be payable in Euros. With respect to each quarter, for countries other than the United States,
whenever conversion of payments from any foreign currency shall be required, such conversion shall be made at the rate of exchange reported in The Wall Street Journal, Western Edition, on the last business day of the applicable quarter. All
payments owed under this Agreement shall be made by wire transfer to a bank and account designated in writing by the party entitled to receive such payment, unless otherwise specified in writing by such party.
             10.3          Withholding of Taxes. The party receiving payments under this Agreement will pay any and
all taxes levied on account of such payment. If any taxes are required to be withheld by the paying party, it will (a) deduct such taxes from the remitting payment, (b) timely pay the taxes to the proper taxing authority, and (c) send
proof of payment to the other party and certify its receipt by the taxing authority within 60 days following such payment.
             10.4
         Records and Audits.  During the period during which a party is entitled to receive payments from the other party under this Agreement and for a period of five years thereafter, the selling
party shall keep complete and accurate records pertaining to gross sales and Net Sales of the Licensed Products, including the expenses incurred by the selling party in sufficient detail to permit the other party to confirm the accuracy of all
payments due hereunder. During the License Term and for a period of five years thereafter, Cypress further agrees to keep complete and accurate records pertaining to Sub-licensee Payments in sufficient detail to permit Pierre Fabre to confirm the
accuracy of all payments due to Pierre Fabre pursuant to Section 6.5. A party shall have the right to cause an independent, certified public accountant reasonably acceptable to the other party to audit such records to confirm Net Sales and the
corresponding payments and payments with respect to Sub-licensee Payments for a period covering not more than the preceding three years. Such audits may be exercised during normal business hours upon reasonable prior written notice to the audited
party. Prompt adjustments shall be made by the parties to reflect the results of such audit. The party causing such audit shall bear the full cost of such audit unless such audit discloses a variance of more than 5% from the amount of the Net Sales
or corresponding payments due under this Agreement. Pierre Fabre shall bear the cost of any audit of the Sub-licensee Payments, unless such audit discloses a variance of more than 5% from the amount of the Sub-licensee Payments due to Pierre Fabre
under Section 6.5. 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
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  such payments may be paid by depositing funds in the currency in which accrued to the other party account in a bank acceptable to such other party in the country whose currency is
involved.
 11.     INTELLECTUAL PROPERTY
            11.1         Patent Prosecution and Maintenance of the Pierre Fabre Patents. Pierre Fabre shall be responsible
for prosecution and maintenance of all Pierre Fabre Patents at Pierre Fabre’s sole expense. Pierre Fabre shall consider in good faith the requests and suggestions of Cypress with respect to strategies for prosecuting the Pierre Fabre Patents in
the Licensed Territory. Pierre Fabre shall keep Cypress informed of progress with regard to the prosecution, maintenance, enforcement and defense of the Pierre Fabre Patents by providing Cypress of copies of official actions, amendments and
responses with respect to such prosecution. In the event that Pierre Fabre desires to abandon any Pierre Fabre Patent in the Licensed Territory, Pierre Fabre shall provide reasonable prior written notice to Cypress of such intention to abandon and
provide Cypress an opportunity to discuss with Pierre Fabre the possibility of assuming responsibility for such Pierre Fabre Patent. If Cypress assumes responsibility for any Pierre Fabre Patent, such Patent shall be assigned to Cypress and shall no
longer be included in the Pierre Fabre Patents subject to this Agreement.
            11.2        Patent
Prosecution and Maintenance of the Cypress Patents and the Cypress Formulation Patents. Cypress or its sub-licensees shall be responsible for prosecution and maintenance of all Cypress Patents and Cypress Formulation Patents at their sole
expense. Cypress shall consider in good faith the requests and suggestions of Pierre Fabre with respect to strategies for prosecuting the Cypress Patents and Cypress Formulation Patents in the Rest of the World. Cypress shall keep Pierre Fabre
informed of progress with regard to the prosecution, maintenance, enforcement and defense of the Cypress Patents and Cypress Formulation Patents by providing Pierre Fabre of copies of official actions, amendments and responses with respect to such
prosecution. In the event that Cypress desires to abandon any Cypress Patent in the Rest of the World, Cypress shall provide reasonable prior written notice to Pierre Fabre of such intention to abandon and provide Pierre Fabre an opportunity to
discuss with Cypress the possibility of assuming responsibility for such Cypress Patent. If Pierre Fabre assumes responsibility for any Cypress Patent, such Patent shall be assigned to Pierre Fabre and shall no longer be included in the Cypress
Patents subject to this Agreement.
            11.3        Cooperation of the Parties. Each party agrees to
cooperate fully in the prosecution of the Pierre Fabre Patents, the Cypress Patents and the Cypress Formulation Patents under this Agreement.
            11.4        Infringement by Third Parties of the Pierre Fabre Patents. Pierre Fabre and Cypress shall promptly notify
the other in writing of any alleged or threatened infringement or any challenge to the validity of the Pierre Fabre Patents or any challenge to Pierre Fabre’s ownership of or Cypress’ and/or its licensees’ right to use, the Pierre
Fabre Patents of which they become aware. Both parties shall use their best efforts in cooperating with each other to terminate such infringement without litigation. Pierre Fabre shall have the sole right to bring and control any action or
proceeding with respect to infringement of any of the Pierre Fabre Patents at its own expense and by counsel of its own choice. With respect to infringement of any of the Pierre Fabre Patents in the Licensed Territory, if Pierre Fabre fails to bring
an action or 
 22.

   proceeding within (a) 60 days following the notice of alleged infringement or (b) 10 days before the time limit, if any, set forth in the appropriate laws and regulations for the
filing of such actions, whichever comes first, Cypress shall have the right to bring and control any such action at its own expense and by counsel of its own choice, and Pierre Fabre shall have the right, at its own expense, to be represented in any
such action by counsel of its own choice. In the event a party brings an infringement action, the other party shall cooperate fully, including if required to bring such action, the furnishing of a power of attorney. Neither party shall have the
right to settle any infringement litigation under this Section 11.4 relating to the Pierre Fabre Patents without the prior written consent of the other party. Except as otherwise agreed to by the parties as part of a cost-sharing arrangement,
any recovery realized as a result of such litigation, after reimbursement of any litigation expenses of Pierre Fabre and Cypress, shall be retained by the party that brought and controlled such litigation.
           11.5        Infringement by Third Parties of the Cypress Patents or the Cypress Formulation Patents. Pierre Fabre and
Cypress shall promptly notify the other in writing of any alleged or threatened infringement or any challenge to the validity of the Cypress Patents and the Cypress Formulation Patents or any challenge to Cypress’ ownership of the Cypress
Patents and the Cypress Formulation Patents of which they become aware. Both parties shall use their best efforts in cooperating with each other to terminate such infringement without litigation. Cypress shall have the sole right to bring and
control any action or proceeding with respect to infringement of any of the Cypress Patents and the Cypress Formulation Patents at its own expense and by counsel of its own choice. With respect to infringement of any of the Cypress Patents in the
Rest of the World, if Cypress fails to bring an action or proceeding within (a) 60 days following the notice of alleged infringement or (b) 10 days before the time limit, if any, set forth in the appropriate laws and regulations for the filing
of such actions, whichever comes first, Pierre Fabre shall have the right to bring and control any such action at its own expense and by counsel of its own choice, and Cypress shall have the right, at its own expense, to be represented in any such
action by counsel of its own choice. In the event a party brings an infringement action, the other party shall cooperate fully, including if required to bring such action, the furnishing of a power of attorney. Neither party shall have the right to
settle any infringement litigation under this Section 11.5 relating to the Cypress Patents without the prior written consent of the other party. Except as otherwise agreed to by the parties as part of a cost-sharing arrangement, any recovery
realized as a result of such litigation, after reimbursement of any litigation expenses of Pierre Fabre and Cypress, shall be retained by the party that brought and controlled such litigation. 
           11.6         Infringement of Third Party Rights. Each party shall promptly notify the other in writing of any
allegation by a Third Party that the activity of either of the parties pursuant to this Agreement infringes or may infringe the intellectual property rights of such Third Party. Cypress shall have the first right to control any defense of any such
claim alleging that the sale of Licensed Products in the Field infringes any Third Party rights in the Licensed Territory, at its own expense and by counsel of its own choice, and Pierre Fabre shall have the right, at its own expense, to be
represented in any such action by counsel of its own choice. If Cypress fails to proceed in a timely fashion with regard to such defense, Pierre Fabre shall have the right to control any such defense of such claim at its own expense and by counsel
of its own choice, and Cypress shall have the right, at its own expense, to be represented in any such action by counsel of its own choice. Pierre Fabre shall have the first right to control any defense of any such claim
 23.

   alleging that the manufacture of API or Licensed Products infringes any Third Party rights in the Licensed Territory, at its own expense and by counsel of its own choice, and Cypress
shall have the right, at its own expense, to be represented in any such action by counsel of its own choice. If Pierre Fabre fails to proceed in a timely fashion with regard to such defense, Cypress shall have the right to control any such defense
of such claim at its own expense and by counsel of its own choice, and Pierre Fabre shall have the right, at its own expense, to be represented in any such action by counsel of its own choice. Pierre Fabre shall have the sole right to control any
defense of any such claim alleging infringement of any Third Party rights outside the Licensed Territory, at its own expense and by counsel of its own choice. Neither party shall have the right to settle any patent infringement litigation under this
Section 11.6 relating to the manufacture or commercialization of Licensed Products in the Licensed Territory without the consent of such other party.

		
	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.

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

 
                       (a)         Ownership of Licensed Technology.  
Pierre Fabre owns or otherwise has adequate rights to the Licensed Technology and has the right to grant to Cypress the exclusive license granted under Section 2.1 hereof and such license does not conflict with or violate the terms of any
agreement between Pierre Fabre and any Third Party.
 
 24.

                       (b)         Notice of
Proceedings.   Pierre Fabre has informed Cypress that to its knowledge, there is no administrative or judicial proceedings contesting the inventorship, ownership, validity or enforceability of any element of the Licensed
Technology.
                      (c)         Patent
Infringement.   As of the Effective Date, (i) to Pierre Fabre’s knowledge, the practice of the Licensed Technology to develop or commercialize Licensed Product does not infringe any patents of any Third Party, and
(ii) Pierre Fabre has not received any written notice or communication alleging that the practice of the Pierre Fabre Patents infringes or may infringe any patent of any Third Party.
                      (d)         IND for Milnacipran.   There are no liens
or encumbrances with respect to the IND for Milnacipran filed with the FDA in the United States (No. 37,072). Pierre Fabre has not received any written notice or communication indicating that the IND for Milnacipran filed with the FDA in the United
States has been or may be terminated.
            12.3   Pierre Fabre Covenant.   During the due-diligence process carried
out by Cypress prior to the Effective Date, Pierre Fabre has disclosed to Cypress all Pierre Fabre Know-How requested by Cypress and has continued and will continue after the Effective Date to disclose and provide to Cypress all information in the
possession of Pierre Fabre or its Affiliates requested by Cypress.
  13.     CONFIDENTIALITY; PUBILICATION
            13.1   Confidentiality.   Except to the extent expressly authorized by this Agreement or otherwise agreed in writing by the parties,
the parties agree that, during the License Term and for [...***...] thereafter, the receiving party shall keep confidential and shall not publish or otherwise disclose and shall not use for any purpose other than as expressly provided for in
this Agreement any confidential information (including, without limitation, Information) furnished to it by the other party pursuant to this Agreement (collectively, “Confidential Information”). Each party may use such
Confidential Information only to the extent required to accomplish the purposes of this Agreement. Each party will use at least the same standard of care as it uses to protect proprietary or confidential information of its own to ensure that its
employees, agents, consultants and other representatives do not disclose or make any unauthorized use of the Confidential Information. Each party will promptly notify the other upon discovery of any unauthorized use or disclosure of the Confidential
Information.
            13.2   Exceptions.   Confidential Information shall not include any information which the receiving
party can prove by competent written evidence:
                       (a)
        is now, or hereafter becomes, through no act or failure to act on the part of the receiving party, generally known or available;
                       (b)         is known by the receiving party at the time
of receiving such information, as evidenced by its records;
                       (c)
        is hereafter furnished to the receiving party by a Third Party, as a matter of right and without restriction on disclosure;
 25.
 *Confidential Treatment Requested 

                        (d)         is
independently discovered or developed by the receiving party without the use of Confidential Information belonging to the disclosing party; or
           
           (e)         is the subject of a written permission to disclose provided by the disclosing party.
            13.3   Authorized Disclosure.   Each party may disclose Confidential Information belonging to the other party to the extent such
disclosure is reasonably necessary in the following instances:
                       (a)
        prosecuting Patents and Trademarks;
            
          (b)         regulatory filings;
            
          (c)         prosecuting or defending litigation;
                       (d)         complying with applicable court orders or
governmental regulations; and
                       (e)
        disclosure to Affiliates, sub-licensees, employees, consultants, agents or other Third Parties in connection with due diligence or similar investigations by such Third Parties, in each case who agree to be
bound by similar terms of confidentiality and non-use at least equivalent in scope to those set forth in this Section 13.
          Notwithstanding the
foregoing, in the event a party is required to make a disclosure of the other party’s Confidential Information pursuant to this Section 13.3, it will, except where impracticable, give reasonable advance notice to the other party of such
disclosure and use efforts to secure confidential treatment of such information at least as diligent as such party would use to protect its own confidential information, but in no event less than reasonable efforts. In any event, the parties agree
to take all reasonable action to avoid disclosure of Confidential Information hereunder. The parties will consult with each other on the provisions of this Agreement to be redacted in any filings made by the parties with the Securities and Exchange
Commission or as otherwise required by law.
            13.4   Publications.   Each party to this Agreement recognizes that
the publication of papers containing results of and other information regarding development of the Licensed Product in the Field (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 any such paper is submitted for publication, the party proposing publication shall deliver a complete copy to the other party at least 45 days prior to submitting the paper to a publisher. The other party shall
review any such paper and give its comments to the publishing party within 30 days of the delivery of such paper to the other party. With respect to oral presentation materials, the other party shall make reasonable efforts to expedite review of
such materials, and
 
 26.

  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   Publicity.   It is understood that the parties intend to issue a joint press release announcing the execution of this
Agreement and agree that each party may desire or be required to issue subsequent press releases relating to 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 which
have already been publicly disclosed in accordance herewith.
 14.   TERM AND TERMINATION
            14.1   Term.   The term of this Agreement shall commence on the Effective Date and continue until the later of (i) the expiration of
the last to expire of the Pierre Fabre Patents or (ii) 10 years after the first commercial sale of a Licensed Product, unless earlier terminated pursuant to Section 14.2 or 14.3 (the “License Term”).
            14.2   Termination for Cause.
            
         (a)         Termination by Either Party. A party shall have the right to terminate this Agreement upon 90 days’ prior written notice to the other
upon the occurrence of any of the following:
                          
          (i)         Upon or after the bankruptcy, insolvency, dissolution or winding up of the other party (other than a dissolution or winding up for the
purpose of reconstruction or amalgamation); or if a party admits in writing its inability to pay its debts as they become due; or
            
                        (ii)        Upon or after the breach of any material provision of
this Agreement by the other party if the breaching party has not cured such breach within the 90 day period following written notice of termination by the non-breaching party.

 27.

                       (b)         Termination by
Pierre Fabre.   Pierre Fabre shall have the right to terminate this Agreement upon 90 days prior notice to Cypress in the following events:
                                     (i)
        Cypress (itself and with its sub-licensees) terminates at any time all development activities of, or the subsequent marketing of the Licensed Product or withdraws the Licensed Product from the market in the
Licensed Territory for any reason and such termination or withdrawal is irrevocable; provided, that, if such termination or withdrawal is expected to be temporary or is otherwise subject to cure, then Cypress (itself and with its
sub-licensees) shall be given the ability to resume development or marketing activities and Pierre Fabre will not have a right to terminate this Agreement under this Section 14.2(b)(i) as long as Cypress (itself and with its sub-licensees) is using
commercially reasonable efforts to cure such withdrawal or termination providing that such period shall not exceed 12 months from the date of termination of the development activities or withdrawal of the Licensed Product;
                                     (ii)
       Cypress shall challenge or contest Pierre Fabre Patents rights;
           
                         (iii)         Upon a Change in Control (as defined in Section
16.6(b)) in which the Third Party acquiror is developing or marketing an [...***...] in the Field in the Licensed Territory the sale of which [...***...] would have a significant adverse effect on the sale of Licensed Product in the
Licensed Territory within the first five years after the closing of the Change in Control, then Pierre Fabre may terminate this Agreement upon written notice to Cypress or its successor in interest within 30 days after the closing of the Change in
Control, with the consequences of such termination as set forth in Sections 14.3(b)(ii), 14.4 and 14.5; or
               
                     (iv)        Pierre Fabre exercises the option to terminate this Agreement in case of
Cypress’ failure to achieve the Minimum Sales, as indicated in Section 5.3(b).
            14.3   Effect of Expiration - Termination;
Surviving Obligations.
                      (a)         Upon
expiration of the License Term, all rights under this Agreement shall automatically terminate, except as follows, and subject to the provisions of Section 14.4:
                                     (i)
        Cypress shall have the perpetual royalty free right to continue to use Pierre Fabre Know-How in the Licensed Territory under this Agreement;
                                     (ii)
       Pierre Fabre shall have the right to use for the Rest of the World (x) Cypress Information and Cypress Patents in consideration of the [...***...] royalty to be paid, during the term described in
Section 4.2(b), provided that on a country by country basis, upon expiration of the term described in Section 4.2(b), Pierre Fabre shall have a fully paid-up license to continue using Cypress Information in such country, (y) Cypress
Formulations and Cypress Formulation Patents according to the license terms agreed between Cypress and Pierre Fabre pursuant to Section 4.3, and (z) the unrestricted perpetual right to use Pierre Fabre Know-How;
                                     (iii)
        Cypress’ right to continue to use the Trademark shall be governed by the Trademark License Agreement; and
 28.
 *Confidential Treatment Requested 

                                
      (iv)       Cypress’ commitment to purchase all its requirements of API shall be governed by the Supply Agreement.
                     (b)           Upon early termination of this
Agreement (“Early Termination”) pursuant to Sections 14.2(a) and 14.2(b), the following shall apply:
             
                       (i)        Early Termination by Cypress pursuant to Sections 14.2(a)(i)
and (ii), then:
  
                                        
     (1)        Cypress’ right to continue its license under the Licensed Technology owned or acquired by Pierre Fabre prior to the effective date of Early Termination shall
survive subject to the fulfillment by Cypress of all its financial obligations resulting from this Agreement and the Trademark License Agreement; and
                                     
           (2)        Pierre Fabre’s right to use the Cypress Information and Cypress Formulations, and Cypress Patents, Cypress Formulation Patents
and New Salts, if licensed by Pierre Fabre, outside the Licensed Territory shall terminate.
             
                       (ii)        Early Termination by Pierre Fabre pursuant to Section 14.2(a)
or 14.2(b), then Cypress and its sub-licensees (subject to Section 14.3(b)(iii)) shall have no more rights under this Agreement and shall return to Pierre Fabre all Licensed Technology and assign to Pierre Fabre all Cypress Information and Cypress
Formulations controlled by Cypress including any rights and obligations granted by a Third Party to Cypress on a Cypress Formulation, except that Cypress may retain one copy for purposes of determining its obligations hereunder. Pierre Fabre shall
then have the worldwide right to use Cypress Information and the Cypress Patents controlled by Cypress in consideration of a [...***...] royalty payment to be paid during the term described in Section 4.2(b), provided that on a country by country
basis, upon expiration of the term described in Section 4.2(b), Pierre Fabre shall have a fully paid-up license to continue using Cypress Information in such country.
                                    (iii)
        Early termination by Pierre Fabre pursuant to Section 14.2(a)(i), then any sublicenses granted under Section 2.1 shall survive the termination of the License Term and become direct licenses from Pierre
Fabre under this Agreement.
                     (c)
       Expiration or Early Termination of this Agreement shall not relieve the parties of any obligation accruing prior to such expiration or termination. Except as set forth below or elsewhere in this
Agreement, the obligations and rights of the parties under Sections 8, 10.4, 13.1, 13.2, 13.3, 14.3, 14.5, 15.1, 15.2 and 16.1 shall survive expiration or termination of this Agreement. The obligations and rights of the parties under Sections 4.2
and 10 shall survive expiration of this Agreement, to the extent provided in Sections 14.3(a)(ii) and 14.3(b)(ii).
                     (d)        Within 30 days following the expiration or Early
Termination of this Agreement, each party shall deliver to the other party any and all Confidential Information of the other party in its possession, except as provided in Section 14.3 herein above.
                     (e)        All licenses granted under 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
 29.
 *Confidential Treatment Requested 

  licensee under this Agreement will retain and may fully exercise all of its rights and elections under the US Bankruptcy Code.
            14. 4      Exercise of Right to Terminate.  The use by either party hereto of a termination right provided for
under this Agreement shall not give rise to the payment of damages or any other form of compensation or relief to the other party with respect thereto.
            14. 5      Damages; Relief.  Termination of this Agreement shall not preclude either party from claiming any
other damages, compensation or relief that it may be entitled to upon such termination.

		
	15.  	INDEMNIFICATION

 
            15.1     
Indemnification.      
                           (a)         Cypress hereby
agrees to save, defend, indemnify and hold harmless Pierre Fabre and its officers, directors, employees, consultants and agents from and against any and all losses, damages, liabilities, expenses and costs, including reasonable legal expense and
attorneys’ fees (“Losses”), to which Pierre Fabre may become subject as a result of any claim, demand, action or other proceeding by any Third Party to the extent such Losses arise directly out of (i) the material breach
by Cypress of any representation or warranty under Section 12, or (ii) the development, manufacture, use, handling, storage, sale or other disposition of any Licensed Product by Cypress, its Affiliates or sub-licensees, except to the extent such
Losses result from the gross negligence or willful misconduct of Pierre Fabre.
                            (b)        Pierre
Fabre hereby agrees to save, defend, indemnify and hold harmless Cypress and its officers, directors, employees, consultants and agents from and against any and all Losses to which Cypress may become subject as a result of any claim, demand, action
or other proceeding by any Third Party to the extent such Losses arise directly out of (i) the material breach by Pierre Fabre of any representation or warranty under Section 12, (ii) the defective Know-How or API supplied by Pierre Fabre, its
Affiliates or sub-licensees under this Agreement, except to the extent such Losses result from the gross negligence or willful misconduct of Cypress or (iii) the development, manufacture, use, handling, storage, sale or other disposition of any
Licensed Product or Cypress Product by Pierre Fabre, its Affiliates or sub-licensees in the Rest of the World, except to the extent such losses result from the gross negligence or willful misconduct of Cypress.
                            (c)        Except for
amounts payable under Sections 4.2, 4.4, 4.5, 6, 7 and 13, neither party makes any other warranties express or implied, except as set forth herein and neither party shall be liable to the other party for special, consequential or incidental damages
in connection with this Agreement or any license granted hereunder.
            15. 2       Control of
Defense.  In the event a party seeks indemnification under Section 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
 30.

  solely for monetary consideration), and shall cooperate as requested (at the expense of the Indemnifying Party) in the defense of the claim.
            15. 3      Insurance.
                          (a)       During the License Term and so
long as Pierre Fabre is selling Cypress Product, Pierre Fabre, at its own expense, shall maintain product liability insurance in amount consistent with industry standards for claims and actions that might be taken against it in connection with this
Agreement. Pierre Fabre shall provide a certificate of insurance evidencing such coverage.
                          (b)       During the License Term, Cypress,
at its own expense, shall maintain product liability insurance (or self-insure) in amount consistent with industry standards for claims and actions that might be taken against it in connection with this Agreement. Cypress shall provide a certificate
of insurance (or evidence of self-insurance) evidencing such coverage.

		
	16.  	GENERAL PROVISIONS

 
            16.
1      Governing Law and Venue.  This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of New York excluding its conflicts of laws
principles. Each party irrevocably submits to the jurisdiction and venue of New York and any such court in any such action or proceeding and irrevocably waives any objection thereto.
            16. 2       Entire Agreement; Modification.  This Agreement is both a final
expression of the parties’ agreement and a complete and exclusive statement with respect to all of its terms. The Exhibits referred to in this Agreement are incorporated herein and made a part of this Agreement by this reference. This Agreement
supersedes all prior and contemporaneous agreements and communications, whether oral, written or otherwise, concerning any and all matters contained herein, including the Restated License Agreement dated November 13, 2001 between Cypress and Pierre
Fabre. No rights or licenses with respect to any intellectual property of either party are granted or deemed granted hereunder or in connection herewith, other than those rights expressly granted in this Agreement. No trade customs, courses of
dealing or courses of performance by the parties shall be relevant to modify, supplement or explain any term(s) used in this Agreement. This Agreement may not be modified or supplemented by any purchase order, change order, acknowledgment, order
acceptance, standard terms of sale, invoice or the like. This Agreement may only be modified or supplemented in a writing expressly stated for such purpose and signed by the parties to this Agreement.
            16. 3       Relationship Between the Parties.  The parties’ relationship, as
established by this Agreement, is solely that of independent contractors. This Agreement does not create any partnership, joint venture or similar business relationship between the parties. Neither party is a legal representative of the other party,
and neither party can assume or create any obligation, representation, warranty or guarantee, express or implied, on behalf of the other party for any purpose whatsoever.
 31.

             16. 4      Non-Waiver.   The failure of a party
to insist upon strict performance of any provision of this Agreement or to exercise any right arising out of this Agreement shall neither impair that provision or right nor constitute a waiver of that provision or right, in whole or in part, in that
instance or in any other instance. Any waiver by a party of a particular provision or right shall be in writing, shall be as to a particular matter and, if applicable, for a particular period of time and shall be signed by such party.

           16. 5      Assignment.   Except as expressly provided hereunder, neither this Agreement
nor any rights or obligations hereunder may be assigned or otherwise transferred by either party without the prior written consent of the other party (which consent shall not be unreasonably withheld); provided, however, that either
party may assign this Agreement and its rights and obligations hereunder without the other party’s consent in connection with the transfer or sale of all or substantially all of the business of such party to which this Agreement relates to a
Third Party, whether by merger, sale of stock, sale of assets or otherwise; provided, that, any assignment made by Cypress shall be made in full compliance with the provisions of Section 16.6 “Change of
Control.” In the event of such transaction, however, intellectual property rights of the acquiring party to such transaction (if other than one of the parties to this Agreement) shall not be included in the technology licensed
hereunder. The rights and obligations of the parties under this Agreement shall be binding upon and inure to the benefit of the successors and permitted assigns of the parties. Any assignment not in accordance with this Agreement shall be
void.
            16. 6      Change of Control.
                            (a)         In the
event of a proposed Change in Control (as described below), Cypress shall provide Pierre Fabre with prior notice of at least 10 business days of such proposed Change in Control. If Pierre Fabre reasonably determines that the Third Party acquiror in
such Change in Control is not likely to comply with the terms of this Agreement, Pierre Fabre may request reasonable assurances from such Third Party acquiror regarding its intent to comply with the terms of this Agreement by providing written
notice of such request within five business days after the date of the notice from Cypress. If Pierre Fabre does not make such request within such period, this Agreement will remain in full force and effect. If Pierre Fabre makes such request within
such period, then (a) if such Third Party acquiror provides Pierre Fabre reasonable assurances in writing of its intent to comply with the terms of this Agreement no later than the closing of the Change in Control, then this Agreement will remain in
full force and effect, and (b) if such Third Party acquiror does not provide Pierre Fabre reasonable assurances in writing of its intent to comply with the terms of this Agreement by the closing of the Change in Control, then Pierre Fabre may
terminate this Agreement upon written notice to Cypress or its successor in interest within 30 days after the closing of the Change in Control, with the consequences of such termination as set forth in Sections 14.3(b)(ii), 14.4 and 14.5.

                           (b)        
As used herein, “Change in Control” means (i) a sale, lease or other disposition of all or substantially all of the assets of Cypress; (ii) a merger or consolidation of Cypress in which the holders of
Cypress’ outstanding voting stock immediately prior to such transaction own, immediately after such transaction, securities representing less than 50% of the voting power of Cypress or Cypress’ parent or, if Cypress is not the surviving
entity, any other entity surviving such transaction or the surviving entity’s parent; or (iii) an acquisition by any
 32.

  person, entity or group within the meaning of Section 13(d) or 14(d) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”),
or any comparable successor provisions (excluding any employee benefit plan, or related trust, sponsored or maintained by Cypress or any entity controlled by Cypress) of the beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Exchange Act, or comparable successor rule) of securities of Cypress representing at least 50% of the combined voting power entitled to vote in the election of Directors; provided, however, that clause (ii) of this Section 16.6(b) shall not
apply to a merger effected exclusively for the purpose of changing the domicile of Cypress or the name of Cypress.
            16.
7      No Third Party Beneficiaries.  This Agreement is neither expressly nor impliedly made for the benefit of any party other than those executing it.
            16. 8      Severability.   If, for any reason, any part of this Agreement is adjudicated invalid,
unenforceable or illegal by a court of competent jurisdiction, such adjudication shall not affect or impair, in whole or in part, the validity, enforceability or legality of any remaining portions of this Agreement. All remaining portions shall
remain in full force and effect as if the original Agreement had been executed without the invalidated, unenforceable or illegal part.
            16. 9      Notices.  Any notice to be given under this Agreement must be in writing and delivered
either in person, by any method of mail (postage prepaid) requiring return receipt, or by overnight courier or facsimile confirmed thereafter by any of the foregoing, to the party to be notified at its address(es) given below, or at any address such
party has previously designated by prior written notice to the other. Notice shall be deemed sufficiently given for all purposes upon the earlier of: (a) the date of actual receipt; (b) if mailed, three calendar days after the date of postmark; or
(c) if delivered by overnight courier or by facsimile, the next business day the overnight courier regularly makes deliveries or on the day after the facsimile has been sent.

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

 

			
	 	Pierre Fabre Médicament	 
	 	45, place Abel-Gance	 
	 	92654 Boulogne cedex	 
	 	France	 
	 	Attention: Chief Executive Officer	 
	 	Telephone: [...***...]	 
	 	Facsimile: (33) 1 49 10 01 44	 

		
	 	 
	 	with a copy to: 

 

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

 
 33.
 *Confidential Treatment Requested 

           If to Cypress, notices must be addressed to:

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

 

		
	                                    
  with a copy to:	 
	 	 
	 	Cooley Godward llp
	 	4401 Eastgate Mall
	 	San Diego, CA 92121
	 	Attention: Kay Chandler
	 	Telephone:  (858) 550-6000
	 	Facsimile:  (858) 550-6420

          16.10     Force
Majeure.    Except for the obligation to make payment when due, each party shall be excused from liability for the failure or delay in performance of any obligation under this Agreement by reason of any event beyond such party’s
reasonable control including but not limited to Acts of God, fire, flood, explosion, earthquake, or other natural forces, war, civil unrest, accident, destruction or other casualty, any lack or failure of transportation facilities, any lack or
failure of supply of raw materials, any strike or labor disturbance, or any other event similar to those enumerated above. Such excuse from liability shall be effective only to the extent and duration of the event(s) causing the failure or delay in
performance and provided that the party has not caused such event(s) to occur. Notice of a party’s failure or delay in performance due to force majeure must be given to the other party within 10 calendar days after its occurrence. All delivery
dates under this Agreement that have been affected by force majeure shall be tolled for the duration of such force majeure. In no event shall any party be required to prevent or settle any labor disturbance or dispute. Notwithstanding the foregoing,
should the event(s) of force majeure suffered by a party extend beyond a three month period, the other party may then terminate this Agreement by written notice to the non-performing party, with the consequences of such termination as set forth in
Sections 14.3, 14.4 and 14.5.
          16.11     Legal Fees.   If any party to this Agreement resorts
to any legal action or arbitration in connection with this Agreement, the prevailing party shall be entitled to recover reasonable fees of attorneys and other professionals in addition to all court costs and arbitrator’s fees which that party
may incur as a result.
          16.12      Interpretation.
                          (a)         Captions &
Headings.  The captions and headings of clauses contained in this Agreement preceding the text of the articles, sections, subsections and paragraphs hereof are inserted solely for convenience and ease of reference only and shall
not constitute any part of this Agreement, or have any effect on its interpretation or construction.
 34.

                           (b)
        Singular & Plural.   All references in this Agreement to the singular shall include the plural where applicable, and all references to gender shall include both genders and the
neuter.
                          (c)
        Articles, Sections & Subsections.   Unless otherwise specified, references in this Agreement to any article shall include all sections, subsections, and paragraphs in such article;
references in this Agreement to any section shall include all subsections and paragraphs in such sections; and references in this Agreement to any subsection shall include all paragraphs in such subsection.
                          (d)        
Days.   All references to days in this Agreement shall mean calendar days, unless otherwise specified.
                          (e)        
Ambiguities.   Ambiguities and uncertainties in this Agreement, if any, shall not be interpreted against either party, irrespective of which party may be deemed to have caused the ambiguity or uncertainty to exist.
          16.13      Counterparts.   This Agreement may be executed in one or more counterparts, each of which shall be deemed an original
document, and all of which, together with this writing, shall be deemed one instrument.
 35.

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

					
	PIERRE FABRE MEDICAMENT	 	CYPRESS BIOSCIENCE, INC.
	 	 	 	 	 
	By:	 /s/  ROCH DOLIVEUX
 	 	By:	  /s/ JAY KRANZLER
 
		
 	 		
 
	Name:	 Roch DOLIVEUX	 	Name:	Jay Kranzler
		
 	 		
 
	Title:	President and CEO	 	Title:	 CEO
		
 	 		
 

  
 SIGNATURE
PAGE TO RESTATED LICENSE AGREEMENT  
 

    
 EXHIBIT A
 Pierre Fabre Know-How
 [...***...]
 *Confidential Treatment Requested

  EXHIBIT B
 Patents held by Pierre Fabre

		
	I°- US Patents	 

		
	Base Patent (active principle)	 
	 	 
	     Ref. US 4 478 836	 
	       Applied June 22, 1982	 
	       Granted October 23, 1984	 
	       Terminates on May 22, 2002	 

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

	 	 
	S.R. Formulation	 
	 	 
	     Ref:   09/254 014	 
	       Applied August 26, 1997	 
	       In process	 
	Expected termination date of 2017	 
	 	 
	II°- Canadian Patents	 

		
	Milnacipran Patent	 
	 	 
	    Ref:   n°405 651	 
	       Applied:   June 22, 1982	 
	       Granted April 1, 1986 n° 1 202 639  	 
	       Terminates:   April 1, 2003	 

	 	 
	Process Patent	 
	 	 
	    Ref:   n° 507 320	 
	       Applied: April 23, 1986	 
	       Granted March 3, 1990 n° 1 266 486	 
	       Terminates:   March 6, 2007	 
	 	 
	    Ref:   n° 2 006 464	 
	       Applied::   December 21, 1989	 
	       Terminates:   December 21, 2009	 

  SR Formulation Patent
      French patent n ° 96 10528 applied on August 28, 1996

      PCT extension to Canada : August 26, 1997 
      terminates on August 26, 2017
 

  EXHIBIT C
 [...***...]
 * Confidential Treatment
Requested
 

  EXHIBIT D

	STANDARD OPERATING PROCEDURE
TO BE USED IN THE INFORMATION EXCHANGES RELATED TO
SAFETY AND TOLERABILITY OF MEDICINAL PRODUCTS 

 SUMMARY
 1 – APPLICABILITY
 2 – LANGUAGE – CONTACT PEOPLE
 3
– TRANSMISSION DURING MARKETING (except clinical trial)

	 	          3.1         Principles

	 	          3.2         Report frequency

	 	                3.2.1       Serious adverse reactions (SADRs)

	 	                3.2.2       Non serious adverse reactions

	 	                3.2.3       Periodic safety update reports (PSUR)

	 	                3.2.4       Modifications of the SPC safety-related paragraphs

 
 4 – TRANSMISSIONS DURING CLINICAL TRIALS
 5 – OTHER TRANSMISSIONS OF INFORMATION
 6
– DEFINITIONS - APPENDICES

	 	          6.1         DEFINITIONS

	 	          6.2         LIST OF CONTACT PEOPLE

	 	          6.3         APPENDICES

 

           The purpose of this Standard Operating Procedure is to allow the best transmission of the data related to tolerability and safety
of the medicinal products listed below between the interested parties signatory to this Agreement :

		
	 	- in agreement with the regulations imposed to each partner,
		
	 	- in agreement with the international recommendations in force.

 
          It relates to the exchanges
between the partners’ pharmacovigilance structures, during either clinical trials or product marketing.
 It is not intended to describe the methods of collection and transmission of information inside
each firm, organized by specific S.O.P.
 It is strictly limited to pharmacovigilance activities, without prejudice to any decisions likely to occur as a result of information exchanges involving other
structures than the pharmacovigilance departments. It does not take into account the requirements imposed by the regulations of the competent regulatory authorities to the Pharmacovigilance department of each partner; this is particularly pertinent
to the time frame of data transmission subjected to reporting. Each laboratory is responsible for the expedited reporting to the appropriate health authorities.
 1 –
APPLICABILITY 

		
	 	This Standard Operating Procedure describes the information transmission methods, related to the safety and tolerability of the Product(s), resulting from spontaneous notifications made between the partners’
pharmacovigilance structures during the therapeutic use, through either periodic reports or notifications of serious adverse events during clinical trials, whatever the origin.

 
 2 – LANGUAGE – CONTACT PEOPLE

		
	 	The transmitted documents must be drafted in English. The technical terms used correspond to the meaning specified in 6.1 (definitions).

 

		
	 	The list with the details of all professionals working with each partner, concerned by the implementation of this procedure are given in appendix 6.3. Each partner must spontaneously update this list in the event of
any modification (and specify its date).

 
 3 – TRANSMISSION DURING MARKETING   (except clinical trial)
 3.1      PRINCIPLES 

		
	 	It relates to adverse reactions which are notified spontaneously to the firms by the health-care professionals or the patients, reported by the health authorities or described in the literature and which are
supposed to be related to the medicinal product.

 
 

	 	 
	 	In the case of drug marketed under different name by each partner in the same country, each partner takes into account the information relating to the adverse reactions of their own product. The INN notifications
are the licensee’s responsibility.

		
	 	For the adverse reactions described in the literature, each partner takes into account the information related to the adverse reactions of its own product. The INN publications are the partner’s responsibility
operating in the country of origin of the publication (or in the country where the review has its first address if this information is not specified).
		
		The case reports from the literature are sent together with a copy of the publication, which does not need a translation in English (if this later is not written in this common language).

3.2      REPORT FREQUENCY

	 	 	 
	 	3.2.1 	Serious adverse reactions (SADRs)

 

		
	 	The SADRs are sent by fax to the partner using a CIOMS form within ten calendar days following their notification. 
		This time is reduced to five calendar days following notification of a death.
	 	The follow-up information of these SADRs, including death information, is faxed within ten calendar days upon reception. Partners can request for precise details or further information concerning the current files
at any time.

	 	 	 
	 	3.2.2 	Non serious adverse reactions 

	 	 
	 	Adverse reactions not considered to be serious are the subject of information from the partner using CIOMS forms transmitted on a monthly basis, accompanied by a summary table (line listing).
	 	 The partners can request for precise details or further information concerning the current files at any time.

	 	 	 
	 	3.2.3. 	Periodic safety update reports (PSUR)

	 	 
	 	Within the framework of a licensing or distribution agreement to be established between both partners, the PSUR periodicity must be dealt with and a calendar must be set up, anticipating notably the possible
integration of international Global PSURs and national PSURs of the medicinal product, according to its definition.

	 	 
	 	According to this calendar provisions (taking into account the regulatory periodicities) each partner, as either the Marketing Authorisation holder or the national licensee, addresses a copy of the report to the
other party at the time of sending it to the appropriate health authorities.

	 	 
	 	The PSUR calendar between both parties is revised if Marketing Authorisation modifications can justify a new periodicity.

	 	 
	 	The PSUR planning is attached to the contract in appendix 6.3 to the present exhibit.

 

		
	 	 
	 	 Additional regulatory reports required by a health authority are also transmitted to the partner at the same time that they are sent to the requiring health authority

			
	 	 
	 	3.2.4.	 Modifications of the SPC safety-related paragraphs

		
	 	 
	 	The partners inform themselves about any modification made to the safety-related paragraphs in the SPC of the Product(s). This information is made prior to draft the regulatory report of the modification, in order to
make them coordinated, if necessary.

 4 –  TRANSMISSIONS DURING CLINICAL TRIALS 

		
	 	Each partner informs by fax the other party of any serious adverse event (SAE) occurring during a clinical trial carried out with the Product(s) under development and of which he is the sponsor.

		
	 	 
	 	This information is sent using a CIOMS form or even a SAE report form within ten calendar days upon reception of the information by the pharmacovigilance department.

		
	 	 
	 	The follow-up reports are exchanged according to the same procedures, and the evolution is documented until the concerned patient’s recovery or stabilisation.

		
	 	 
	 	SAE information is sent without systematically breaking the blind.
 Any information related to the result of a possible breaking of the blind is sent to the partner. 
 The case reports, after breaking the blind
at the end of the study, are sent to the partner according to a list of attribution.

		
	 	 
	 	The sender pharmacovigilance department may send the final clinical trial report to the partner, as soon as available, if the latter requests it.

		
	 	 
	 	Should any questions be raised by the authorities, they will be answered by the partner identified as the trial sponsor.

 5
– OTHER TRANSMISSIONS OF INFORMATION 

		
	5.1  	 The pharmacovigilance team can agree to communicate significant documents such as expert reports, updated investigator brochure, scientific documentations, etc. even if this is not necessarily envisaged by this
document.

		
	 	 
	5.2 	 It is up to the pharmacovigilance departments to discuss at any moment about the exchanged information.

   6 – DEFINITIONS -  APPENDICES

		
	6.1 	 DEFINITIONS 

		
	 	 
	 	Reference : Volume 9 of the Rules Governing Medicinal Products in the European Union Standard terminology

		
	 	 
	•	 ADVERSE EVENT (OR ADVERSE EXPERIENCE) (AE)

		
	 	 
	 	An undesirable experience occurring following administration of a medicinal product. An adverse event does not necessarily have a causal relationship with the treatment.

		
	 	 
	•	 ADVERSE REACTION / ADVERSE DRUG REACTION (ADR) 

		
	 	 
	 	Adverse reaction means a response to a medicinal product which is noxious and unintended and which occurs at doses normally used in man for the prophylaxis, diagnosis or therapy of disease or for the restoration,
correction or modification of physiological function.

		
	 	 
	 	Adverse drug reaction in this context is considered as synonymous with adverse reaction and suspected adverse drug reaction.

		
	 	 
	 	A reaction, contrary to an event, is characterised by the fact that a causal relationship between the drug and the occurrence is suspected, i.e. judged possible by the reporting or a reviewing health-care
professional. If a reaction is spontaneously reported by a health-care professional, this usually implies a positive judgement from the reporter unless the reporter explicitly gives a negative judgement on the causal relationship.

		
	 	 
	•	 UNEXPECTED ADVERSE REACTION

		
	 	 
	 	Unexpected Adverse Reaction means an adverse reaction, the nature, severity or outcome of which is not consistent with the Summary of Product Characteristics.

		
	 	 
	 	It also includes class-related reactions which are mentioned in the SPC but which are not specifically described as occurring with this product.

		
	 	 
	 	For products authorised nationally, the relevant SPC is that approved by the competent authority in the member state to which the reaction is being reported.

		
	 	 
	 	For centrally authorised products, the relevant SPC is the SPC authorised by the European Commission.

		
	 	 
	•	 LISTED ADVERSE DRUG REACTION

		
	 	 
	 	An adverse reaction whose nature, severity, specificity and outcome are consistent with the information in the company core safety information (CCSI).

		
	 	 
	•	 UNLISTED ADVERSE DRUG REACTION

		
	 	 
	 	An adverse reaction which is not specifically included as a suspected adverse effect in the company core safety information (CCSI). This includes an adverse reaction whose nature, severity, specificity or outcome is
not consistent with the information in the CCSI. It also 

 

		
	 	 
	 	includes class-related reactions which are mentioned in the CCSI but which are not specifically described as occurring with this product.

		
	 	 
	•	 REPORTABLE ADVERSE REACTION - MINIMUM INFORMATION

		
	 	 
	 	A reportable adverse drug reaction (ADR) requires the following minimum information:

			
	 	 	 
	 	a) 	 an identifiable health-care professional reporter -
 The reporter can be identified by either name or initials, or address or qualification (e.g. physician, dentist, pharmacist, nurse).

			
	 	 	 
	 	b) 	 an identifiable patient - 
 The patient can be identified by initials or patient number, or date of birth (or age information if date of birth not available) or sex. The information should be as complete
as possible.

			
	 	 	 
	 	c) 	 at least one suspected substance/medicinal product

			
	 	 	 
	 	d) 	 at least one suspected adverse reaction. 
 The minimum information is the smallest amount of information required for the submission of a report and every effort should be made to obtain and submit further
information when it becomes available.

		
	 	 
	•	 SERIOUS ADVERSE DRUG REACTION (SADR)

		
	 	 
	 	Serious adverse reaction means an adverse reaction which results in death, is life-threatening, requires inpatient hospitalisation, or prolongation of existing hospitalisation, results in persistent or significant
disability or incapacity, or is a congenital anomaly/birth defect.

 

		
	 	It also includes serious adverse clinical consequences associated with use outside the terms of the Summary of Product Characteristics (SPC) (including, for example, prescribed doses higher than those recommended),
overdoses or abuse.

		
	 	 
	 	Medical judgement should be exercised in deciding whether a reaction is serious in other situations. Important adverse reactions that are not immediately life-threatening or do not result in death or hospitalisation
but may jeopardise the patient should be considered as serious.

		
	 	 
	•	 SUSARS

		
	 	 
	 	Suspected unexpected serious adverse reactions

		
	 	 
	•	 SPONTANEOUS REPORT OR SPONTANEOUS NOTIFICATION

		
	 	 
	 	A communication to a company, regulatory authority or other organisation that describes a suspected adverse drug reaction in a patient given one or more medicinal products and which does not derive from a
study.

		
	 	 
	•	 COMPANY CORE DATA SHEET (CCDS) 

 

		
	 	 
	 	A document prepared by the marketing authorisation holder (MAH) containing, in addition to safety information, material relating to indications, dosing, pharmacology and other information concerning the
product.

		
	 	 
	•	 COMPANY CORE SAFETY INFORMATION (CCSI)

 

		
	 	All relevant safety information contained in the company core data sheet (CCDS) prepared by the marketing authorisation holder (MAH) and which the MAH requires to be listed in all countries where the company markets
the drug, except when the local regulatory authority specifically requires a modification. It is the reference information by which listed and unlisted are determined for the purpose of periodic reporting for marketed products, but not by which
expected and unexpected are determined for expedited reporting.

		
	 	 
	•	 INTERNATIONAL BIRTH DATE (IBD)

		
	 	 
	 	The date of the first marketing authorisation for a medicinal product granted to the marketing authorisation holder (MAH) in any country in the world.

 OTHER DEFINITIONS

		
	 	 
	•	 MEDICINAL PRODUCT

		
	 	 
	 	Any medicine prepared in advance, marketed under a specific denomination and with a particular packaging.

		
	 	 
	•	 IMPUTABILITY

		
	 	 
	 	Valuation of the relationship between an adverse event (or adverse experience) and a medicinal product.

		
	 	 
	 	They can be valued using different scales according to the country.

		
	 	 
	 	PIERRE FABRE MÉDICAMENT uses a 6-degree scale, I4 highly probable, I3 Probable, I2 Possible, I1 Doubtful, I0 not related, I9 Unknown/not available.

		
	 	 
	 	The adverse reactions concerned by the present procedure are those whose relationship corresponds to one of the 4 degrees above-mentioned I1, I2, I3, I4.

		
	 	 
	•	 PERIODIC SAFETY UPDATE REPORT (PSUR)

		
	 	 
	 	Report drafted by a pharmaceutical firm, as the AMM holder and\or the licensee, concerning a marketed medicinal product. This report analyses the information obtained on this product relating to its safety in human
in a place and a period of time determined by the regulations. The PSURs are drafted according to a typical plan detailed in the ICH procedures.

 

  6.2      LIST OF CONTACT PEOPLE

		
	 	PIERRE FABRE MEDICAMENT - PHARMACOVIGILANCE 
 Attn: Mr. J.P. DEMAREZ 
 45 Place Abel Gance 
 92654 BOULOGNE Cedex - FRANCE - 
 Tel :
[...***...] 
 Fax : (33) 1.49.10.80.90 
 E-mail: jean.paul.demarez@pierre-fabre.com

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

 
 6.3       APPENDICES 
 Appendix n° 1. Serious Adverse Event In Clinical Trial. (Page 1 and 2)

Appendix n° 2. Suspect Adverse Reaction Report.(Claim Form) (Page 1) 
 Appendix n° 3. Planning of PSURs
  
 *Confidential Treatment Requested

  EXHIBIT E
 Cypress Patents
 [...***...]

 
 *Confidential Treatment Requested

  EXHIBIT F
 [...***...]
  
 *Confidential Treatment RequestedEquity Investment Agreement

  EQUITY INVESTMENT AGREEMENT
 Exhibit 10.2
          THIS EQUITY INVESTMENT AGREEMENT (the “Agreement”) is made as of June 6, 2003
(the “Effective Date”), by and between CYPRESS BIOSCIENCE, INC., a Delaware corporation having an address of 4350 Executive Drive, Suite 325, San Diego, CA 92121, U.S.A.
(“Cypress”), and PIERRE FABRE MÉDICAMENT, organized under the25 laws of France having an address of 45, place Abel-Gance, 92654 Boulogne cedex, France
(“Pierre Fabre”).
 RECITALS
          WHEREAS, Cypress and Pierre Fabre have entered into the Second Restated License Agreement (the “Restated License Agreement”),
dated as of May 30, 2003;
          WHEREAS, in partial consideration for Pierre Fabre’s execution of the Restated License Agreement,
Cypress wishes to issue to Pierre Fabre 1,000,000 shares of Common Stock (the “Common Stock”) of Cypress, on the terms and subject to the conditions set forth in this Agreement; and
          WHEREAS, in partial consideration for Pierre Fabre’s execution of the Restated License Agreement, Cypress is also issuing to Pierre Fabre
warrants to purchase up to 300,000 shares of Common Stock of Cypress pursuant to the terms of the Warrant to Purchase Common Stock (the “Warrant Agreement”) being entered into of even date herewith.
 AGREEMENT
          In consideration of the mutual covenants contained in this Agreement, and
for other good and valuable consideration, the receipt of which is hereby acknowledged, Cypress and Pierre Fabre hereby agree as follows:
          1.      ISSUANCE OF THE SHARES.   On the Effective Date, Cypress will issue to Pierre Fabre,
1,000,000 shares of Common Stock of Cypress (the “Shares”). The value of each Share shall be equal to the average of the closing bid price of the Common Stock as reported by the National Association of Securities Dealers,
Inc. Automated Quotations System for the 10 days immediately preceding the Effective Date.
          2.      CLOSING
AND DELIVERY.
                    2.1
        Closing.   The closing of the purchase and sale of the Shares (the “Closing”) shall be held at the offices of Cooley Godward LLP, 4401 Eastgate Mall, San Diego,
California 92121-9109 on the Effective Date.

                     2.2         Delivery.
  Within two business days of the Closing, or sooner if possible, Cypress shall deliver to Pierre Fabre the stock certificates registered in the name of Pierre Fabre, and/or in such nominee name(s) as designated in writing by Pierre Fabre,
representing the Shares. On the date of Closing, Cypress shall deliver to Pierre Fabre a certificate of an officer of Cypress having attached thereto resolutions approved by the Board of Directors authorizing the transactions contemplated
hereby.
           3.       REPRESENTATIONS, WARRANTIES AND COVENANTS OF
CYPRESS.     Cypress hereby represents and warrants as of the Effective Date to, and covenants to, Pierre Fabre as follows:
                     3.1         Due Incorporation and
Qualification.     Cypress is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware. Cypress has full corporate power and authority to own, lease and operate its
properties and to conduct its business as currently conducted. Cypress is qualified to do business and is in good standing as a foreign corporation in each jurisdiction in which the nature of the activities conducted by it or the character of the
properties owned or leased by it makes such qualification necessary and the failure to so qualify would have a material adverse effect on its business.
                     3.2         Corporate Power; Authorization.
     Cypress has all requisite corporate power, and has taken all requisite corporate action, to execute and deliver this Agreement and the Warrant Agreement, issue the Shares and the securities to be issued under the Warrant
Agreement and carry out and perform all of its obligations under this Agreement. Each of this Agreement and the Warrant Agreement constitutes a legal, valid and binding obligation of Cypress, enforceable in accordance with its terms, except (i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting the enforcement of creditors’ rights generally, and (ii) as limited by equitable principles generally, including any specific
performance. As of the Closing, the execution and delivery of this Agreement and the Warrant Agreement and the performance and compliance with the provisions hereof and thereof will not (a) conflict with, or result in a breach or violation of, the
terms of the Amended and Restated Certificate of Incorporation, as amended, or Bylaws of Cypress, (b) conflict with, or result in a breach or violation of, any provision of, or constitute a default (or an event which with notice or lapse of
time or both could become a default) under, or result in the imposition of any lien, security interest, charge, claim or encumbrance upon any property or assets of Cypress pursuant to, any material agreement or instrument to which Cypress is a
party, as identified in the exhibit list to Cypress’ Annual Report on Form 10-K for the year ended December 31, 2002, or (c) result in a violation of any law, rule, regulation, order, judgment or decree applicable to Cypress or to
which any material portion of the property or asset of Cypress is bound; except, in each case, where such conflict, breach, violation or default or imposition of such lien, security interest, charge, claim or encumbrance would not have a material
adverse effect on Cypress. The execution of this Agreement and the Warrant Agreement do not require approval by the stockholders of Cypress under The Nasdaq SmallCap Market rules.
                     3.3         Valid Issuance.      The Shares,
when issued in compliance with the provisions of this Agreement, will be validly issued, fully paid and nonassessable and free from all taxes, liens and charges with respect to the issuance thereof, and will not be issued in violation of any
preemptive right.
 2.

                       3.4         Governmental
Consents.   No consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal, state, or local governmental authority on the part of Cypress is required in connection
with the consummation of the transactions contemplated by this Agreement and the Warrant Agreement, except for the filing of a Form D pursuant to Regulation D promulgated by the Securities and Exchange Commission (the “SEC”)
and compliance with the securities and blue sky laws in the applicable states in which securities are being offered and sold under this Agreement and the Warrant Agreement, which compliance will be effected in accordance with such laws.

                     3.5         Offering Valid.   Assuming the
accuracy of the representations and warranties of Pierre Fabre contained in Section 4 hereof, the offer and issuance of the Shares will be exempt from the registration requirements of the Securities Act of 1933, as amended (the
“Securities Act”).
                      3.6
        SEC Documents, Financial Statements.   Cypress has timely filed all reports, forms, statements and other documents required to be filed by it with the SEC since January 1, 2000, pursuant
to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (the “SEC Documents”). As of their respective dates, the SEC Documents complied in all material
respects with the requirements of the Exchange Act or the Securities Act, as the case may be, and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed
with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not
misleading. As of their respective dates, the financial statements of Cypress included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with
respect thereto. Such financial statements have been prepared in accordance with United States generally accepted accounting principles, consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial
statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may not include footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of
Cypress as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments).
                      3.7         Capitalization.   The authorized capital
stock of Cypress consists of (i) 60,000,000 shares of Common Stock, par value $0.02 per share, of which there are issued and outstanding on the date hereof 17,305,609 shares, and (ii) 15,000,000 shares of preferred stock, par value $0.02 per share,
of which no shares are issued and outstanding on the date hereof. The capitalization table provided by Cypress to Pierre Fabre on June 6, 2003 is complete and accurate in all material respects as of the Effective Date.
          4.        REGISTRATION RIGHTS.
                      4.1         Definitions.   As used in Section 4 of
this Agreement the following terms shall have the following respective meanings:
 3.

                      “Holder” means any person or entity owning of record
Registrable Securities that have not been sold to the public or any assignee of record of such Registrable Securities in accordance with Section 4.9 hereof.
                     “Register,” “registered,” and “registration” refer to a
registration effected by preparing and filing a registration statement in compliance with the Securities Act, and the declaration or ordering of effectiveness of such registration statement or document.
                     “Registrable Securities” means (i) the Shares and the Warrant Shares; and (ii) any Common
Stock of Cypress issued as (or issuable upon the conversion or exercise of any warrant, right or other security which is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, such above-described
securities. Notwithstanding the foregoing, Registrable Securities shall not include any securities sold by a person to the public either pursuant to a registration statement or Rule 144 or sold in a private transaction in which the
transferor’s rights under Section 4 of this Agreement are not assigned.
            
        “Registration Expenses” shall mean all expenses incurred by Cypress in complying with Section 4.2 hereof, including, without limitation, all registration and filing fees, printing
expenses, reasonable fees and disbursements of counsel for Cypress, blue sky fees and expenses and the expense of any special audits incident to or required by any such registration (but excluding the compensation of regular employees of Cypress
which shall be paid in any event by Cypress).
                     “Selling Expenses” shall
mean all underwriting discounts and selling commissions applicable to the sale and all fees and disbursements of counsel for the Holders in connection with such sale.
                     “Warrant Shares” means Common Stock issued under the Warrant Agreement.
                     4.2         Form S-3 Registration.   After 18 months
following the Effective Date, in case Cypress shall receive from Pierre Fabre a written request or requests that Cypress effect a registration on Form S-3 (or any successor to Form S-3) or any similar short-form registration statement and any
related qualification or compliance with respect to all or a part of the Registrable Securities owned by Pierre Fabre, and provided that, for any such request with respect to any Registrable Securities that include any Shares, the quarterly
trading volume of Common Stock during the three months prior to such request was less than one million shares, Cypress will:
                     (a)          promptly give written notice of the
proposed registration, and any related qualification or compliance, to all other Holders of Registrable Securities;
                     (b)          permit Pierre Fabre to select the
underwriter(s) and/or manager(s) to administer the offering of such Registrable Securities; and
                     (c)          as soon as practicable, effect such
registration and all such qualifications and compliances as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of Pierre Fabre’s Registrable Securities as are specified in such
 4.

   request; provided, however, that Cypress shall not be obligated to effect any such registration, qualification or compliance pursuant to this Section 4.2:
                                    (i)
        if Form S-3 (or any successor or similar form) is not available for such offering by Pierre Fabre;
                                    (ii)
       if Pierre Fabre, together with the holders of any other securities of Cypress permitted by Pierre Fabre to be included in such registration, propose to sell Registrable Securities and such other securities
(if any) at an aggregate price to the public of less than five hundred thousand dollars ($500,000);
                                   (iii)
        if within thirty (30) days of receipt of a written request from Pierre Fabre pursuant to Section 4.2(a), Cypress gives notice to the Holders of Cypress’ intention to make a public offering within
ninety (90) days;
                                   (iv)
       if Cypress shall furnish to the Holders a certificate signed by the Chairman of the Board of Directors of Cypress stating that in the good faith judgment of the Board of Directors of Cypress, it would be
seriously detrimental to Cypress and its stockholders for such Form S-3 registration to be effected at such time, in which event Cypress shall have the right to defer the filing of the Form S-3 registration statement for a period of not more than
ninety (90) days after receipt of the request of Pierre Fabre under this Section 4.2; provided, that such right to delay a request shall be exercised by Cypress not more than once in any twelve (12) month period;
                                   (v)
        if (A) with respect to the Shares, Cypress has already effected one (1) registration on Form S-3 pursuant to this Section 4.2 with respect to Registrable Securities that include any Shares, and (B) with
respect to the Warrant Shares, Cypress has already effected one (1) registration on Form S-3 pursuant to this Section 4.2 with respect to Registrable Securities that include any Warrant Shares; or
                                 (vi)
       in any particular jurisdiction in which Cypress would be required to qualify to do business or to execute a general consent to service of process in effecting such registration, qualification or
compliance.
        Subject to the foregoing, Cypress shall file a Form S-3 registration statement covering the Registrable Securities and other securities so requested to
be registered as soon as practicable after receipt of the request or requests of Pierre Fabre.
                     4.3       Expenses of Registration.   Except as
specifically provided herein, all Registration Expenses incurred in connection with any registration under Section 4.2 shall be borne by Pierre Fabre. If the Registration Expenses incurred in connection with a registration under Section 4.2 exceed
$28,000, Cypress shall bear such Registration Expenses in excess of $28,000 up to a maximum of $15,000, and Pierre Fabre and Cypress shall each bear fifty percent (50%) of the remainder of any such Registration Expenses that exceed $43,000. All
Selling Expenses incurred in connection with any registrations hereunder, shall be borne by the holders of the securities so registered pro rata on the basis of the number of shares so registered.
 5.

                      4.4         Obligations of
Cypress. Whenever required to effect the registration of any Registrable Securities, Cypress shall, as expeditiously as reasonably possible:
                             
      (a)        Prepare and file with the SEC a registration statement with respect to such Registrable Securities and use all reasonable efforts to cause such registration
statement to become effective, and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep such registration statement effective for up to one (1) year or, if earlier, until the Holder or Holders have
completed the distribution related thereto.
                                   (b) 
       Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement.
                                   (c) 
       Furnish to the Holders such number of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as they may reasonably
request in order to facilitate the disposition of Registrable Securities owned by them.
                                   (d) 
       Use all reasonable efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by
the Holders, provided that Cypress shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions.
                                   (e) 
       In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter(s) of such offering. Each
Holder participating in such underwriting shall also enter into and perform its obligations under such an agreement.
                                   (f) 
       Notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any
event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing.
                                   (g) 
       Furnish, at the request of a majority of the Holders participating in the registration, on the date that such Registrable Securities are delivered to the underwriters for sale, if such securities are being
sold through underwriters, or, if such securities are not being sold through underwriters, on the date that the registration statement with respect to such securities becomes effective, (i) an opinion, dated as of such date, of the counsel
representing Cypress for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering, addressed to the underwriters, if any, and (ii) a letter dated as of such date, from the
independent certified public accountants of Cypress, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the underwriters, if any.
 6.

                                    (h) 
       Notwithstanding the foregoing, if, at any time following the effectiveness of the Registration Statement, Cypress shall have determined that it may be required to disclose any material corporate development,
Cypress may suspend the effectiveness of the Registration Statement until such time as an amendment to the Registration Statement has been filed by Cypress and declared effective by the SEC or until such time as Cypress has filed an appropriate
report with the SEC pursuant to the Exchange Act, which suspension shall be concluded as quickly as reasonably possible by Cypress consistent with advice of counsel (a “Suspension Period”), by giving notice to the Holders participating in
the registration. Each Holder agrees that, upon receipt of any notice from Cypress of a Suspension Period, such Holder will not sell any Shares pursuant to the Registration Statement until (i) such Holder is advised in writing by Cypress that
the use of the applicable prospectus may be resumed, (ii) such Holder has received copies of any additional or supplemental or amended prospectus, if applicable, and (iii) such Holder has received copies of any additional or supplemental
filings which are incorporated or deemed to be incorporated by reference in such prospectus.
                     4.5        Termination of Registration Rights.  
All registration rights granted to a Holder under this Section 4 shall terminate and be of no further force and effect upon the earliest of: (i) the sale of all of the Registrable Securities pursuant to a Form S-3 registration statement filed under
Section 4.2, and (ii) the date that all Registrable Securities held by and issuable to such Holder (and its affiliates) may be sold under Rule 144 during any ninety (90) day period.
                     4.6        Furnishing Information.   It shall be
a condition precedent to the obligations of Cypress to take any action pursuant to Section 4.2 that the selling Holders shall furnish to Cypress such information regarding themselves, the Registrable Securities held by them and the intended method
of disposition of such securities as shall be required to effect the registration of their Registrable Securities.
                     4.7        Delay of Registration.   No Holder
shall have any right to obtain or seek an injunction restraining or otherwise delaying any such registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 4.

                    4.8        Indemnification.   In the
event any Registrable Securities are included in a registration statement under Section 4.2:
                                   (a) 
       To the extent permitted by law, Cypress will indemnify and hold harmless each Holder, the partners, officers, directors and legal counsel of each Holder, any underwriter (as defined in the Securities Act) for
such Holder and each person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages, expenses (including attorney fees) or liabilities (joint or several) to
which they may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any of the following
statements, omissions or violations (collectively a “Violation”) by Cypress: (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to
 7.

  make the statements therein not misleading, or (iii) any violation or alleged violation by Cypress of the Securities Act, the Exchange Act, any state securities law or any rule or
regulation promulgated under the Securities Act, the Exchange Act or any state securities law in connection with the offering covered by such registration statement; and Cypress will reimburse each such Holder, partner, officer or director,
underwriter or controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided however, that the indemnity agreement contained
in this Section 4.8(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of Cypress, which consent shall not be unreasonably withheld, nor shall
Cypress be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly
for use in connection with such registration by such Holder, partner, officer, director, underwriter or controlling person of such Holder.
                              (b)     
   To the extent permitted by law, each Holder will, if Registrable Securities held by such Holder are included in the securities as to which such registration, qualifications or compliance is being effected, indemnify and hold harmless
Cypress, each of its directors, its officers, and legal counsel and each person, if any, who controls Cypress within the meaning of the Securities Act, any underwriter and any other Holder selling securities under such registration statement or any
of such other Holder’s partners, directors or officers or any person who controls such Holder, against any losses, claims, damages, expenses (including attorney fees), or liabilities (joint or several) to which Cypress or any such director,
officer, counsel, controlling person, underwriter or other such Holder, or partner, director, officer or controlling person of such other Holder may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as
such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written
information furnished by such Holder under an instrument duly executed by such Holder and stated to be specifically for use in connection with such registration; and each such Holder will reimburse any legal or other expenses reasonably incurred by
Cypress or any such director, officer, counsel, controlling person, underwriter or other Holder, or partner, officer, director or controlling person of such other Holder in connection with investigating or defending any such loss, claim, damage,
liability or action if it is judicially determined that there was such a Violation; provided, however, that the indemnity agreement contained in this Section 4.8(b) shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld; provided further, that in no event shall any indemnity under this Section 4.8 exceed the proceeds from the
offering received by such Holder.
                               (c)     
   Promptly after receipt by an indemnified party under this Section 4.8 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any
indemnifying party under this Section 4.8, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires,
jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however,
 8.

  that an indemnified party shall have the right to retain its own counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by
the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement of any such action, if materially prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under
this Section 4.8, but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 4.8.
                               (d)     
   If the indemnification provided for in this Section 4.8 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any losses, claims, damages or liabilities referred to herein, the
indemnifying party, in lieu of indemnifying such indemnified party thereunder, shall to the extent permitted by applicable law contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability in
such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the Violation(s) that resulted in such loss, claim, damage or liability, as well
as any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by a court of law by reference to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission; provided, that in no event shall any contribution by a Holder hereunder exceed the proceeds from the offering received by such Holder.
                               (e)     
   The obligations of Cypress and Holders under this Section 4.8 shall survive completion of any offering of Registrable Securities in a registration statement. No indemnifying party, in the defense of any such claim or litigation, shall,
except with the consent of each indemnified party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release
from all liability in respect to such claim or litigation.
                             4.9    Assignment of Registration
Rights.   The rights to cause Cypress to register Registrable Securities pursuant to this Section 4 (and related obligations) may be assigned by Pierre Fabre to a subsidiary or affiliate or, with the prior written consent of Cypress,
which shall not be unreasonably withheld, to a third party that acquires Registrable Securities; provided, however, (A) the transferor shall, within ten (10) days after such transfer, furnish to Cypress written notice of the name and address of such
transferee or assignee and the securities with respect to which such registration rights are being assigned and (B) such transferee shall agree to be subject to all restrictions set forth in this Agreement. Any assignee of rights under this Section
4.9 may not further assign such rights.
 9.

                      5.    REPRESENTATIONS, WARRANTIES
AND COVENANTS OF PIERRE FABRE.     Pierre Fabre represents and warrants to, and covenants with, Cypress that:
                             5.1       
Accredited Investor.   Pierre Fabre is knowledgeable, sophisticated and experienced in making, and is qualified to make, decisions with respect to investments in shares presenting an investment decision like that involved in the
issuance of the Shares, and has requested, received, reviewed and considered all information Pierre Fabre deems relevant in making an informed decision with respect to the investment in the Shares. Pierre Fabre is an “accredited investor”
within the meaning of Rule 501 of Regulation D promulgated under the Securities Act.
                            5.2        Acquisition of the
Shares for Personal Account.   Pierre Fabre is acquiring the Shares pursuant to this Agreement in the ordinary course of its business and for its own account for investment only and at the time of such acquisition, with no present
intention of distributing any of such Shares and without any arrangement or understanding with any other persons regarding the distribution of such Shares. Pierre Fabre also represents that the entire legal and beneficial interests of the Shares
Pierre Fabre is acquiring is being acquired for, and will be held for, its account only.
                           5.3        Shares Are Not
Registered.
                                     
   (a)        Pierre Fabre understands that the Shares have not been registered under the Securities Act. Pierre Fabre realizes that the basis for the exemption may not be present if,
notwithstanding its representations, Pierre Fabre has a present intention of acquiring the securities for a fixed or determinable period in the future, selling (in connection with a distribution or otherwise), granting any participation in, or
otherwise distributing the securities. Pierre Fabre has no such present intention.
                                     
   (b)        Pierre Fabre recognizes that the Shares must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is
available. Pierre Fabre recognizes that Cypress has no obligation to register the Shares of Cypress except as contemplated by Section 4, or to comply with any exemption from such registration.
                                     
   (c)        Pierre Fabre is aware that the Shares may not be sold pursuant to Rule 144 adopted under the Securities Act unless certain conditions are met, including, among other things, the
existence of a public market for the shares, the availability of certain current public information about Cypress, the resale following the required holding period under Rule 144 and the number of shares being sold during any three month period not
exceeding specified limitations.
                        
 5.4        Disposition of the Shares.
                                     
    (a)        Pierre Fabre further agrees not to make any disposition of all or any part of the Shares in any event unless and until Pierre Fabre shall have notified Cypress of the
proposed disposition and shall have furnished Cypress with a detailed statement of the circumstances surrounding the proposed disposition (except for dispositions under Rule 144, in which case Pierre Fabre need only state that a disposition under
Rule 144 is being made), and if
 10.

  reasonably requested by Cypress, Pierre Fabre shall have furnished Cypress with an opinion of counsel, reasonably satisfactory to Cypress, for Pierre Fabre to the effect that such
disposition will not require registration of such Shares under the Securities Act or any applicable state securities laws; provided that it is agreed that Cypress will not require opinions of counsel for transactions made pursuant to Rule 144,
except in unusual circumstances.
                                     
    (b)        Pierre Fabre understands and agrees that all certificates evidencing the shares to be issued to Pierre Fabre may bear the following legend:

		
	 	THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL SATISFACTORY TO CYPRESS THAT SUCH REGISTRATION IS NOT REQUIRED.

 
                          5.5        Authority and Binding
Obligation.   Pierre Fabre has full right, power, authority and capacity to enter into this Agreement and to consummate the transactions contemplated hereby and has taken all necessary action to authorize the execution, delivery and
performance of this Agreement. Upon the execution and delivery of this Agreement by Pierre Fabre, this Agreement shall constitute a valid and binding obligation of Pierre Fabre, enforceable in accordance with its terms.
                          5.6        Independent
Counsel.   Pierre Fabre understands that Cypress has not provided any legal, tax or investment advice and that independent legal counsel has reviewed this Agreement on Pierre Fabre’s behalf. Pierre Fabre has consulted such legal,
tax and investment advisors as it, in its sole discretion, has deemed necessary or appropriate in connection with entering into this Agreement.
                          5.7        “Market
Stand-Off” Agreement.   If requested by the representative of the underwriters of Common Stock (or other securities) of Cypress, Pierre Fabre shall not sell or otherwise transfer or dispose of any Common Stock (or other
securities) of Cypress held by Pierre Fabre for a period specified by the representative of the underwriters, in any case not to exceed 180 days following any registered offering of the Common Stock of Cypress, or such shorter period as is imposed
by such representative on the officers, directors or other stockholders of Cypress. Cypress may impose stop-transfer instructions with respect to the shares of Common Stock (or other securities) subject to the foregoing restriction until the end of
said periods. The underwriters of Cypress’s stock are intended third party beneficiaries of this Section 4.7 and shall have the right, power and authority to enforce the provisions hereof as though they were a party hereto.
                 6.     Miscellaneous.
                         6.1        Rule 144 Reporting.  
With a view to making available to Pierre Fabre the benefits of certain rules and regulations of the SEC which may permit the sale of the Registrable Securities to the public without registration, Cypress agrees to use commercially
reasonable
 11.

  efforts to make and keep public information available, as those terms are understood and defined in SEC Rule 144 or any similar or analogous rule promulgated under the Securities Act;
and file with the SEC, in a timely manner, all reports and other documents required of Cypress under the Exchange Act.
                        6.2        Notices.   All notices
required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed telex or facsimile if sent during normal business hours of the
recipient, if not, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight
courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to Cypress and Pierre Fabre at the addresses listed in the introductory paragraph, or at such other address as Cypress or Pierre Fabre may
designate by 10 days advance written notice to the other party hereto.
                      
 6.3        Waivers and Amendments.   Neither this Agreement nor any provision hereof may be changed, waived, discharged, terminated, modified or amended except upon the written consent
of Cypress and Pierre Fabre.
                      
 6.4        Headings.   The headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be part of this
Agreement.
                        6.5       
Severability.   In case any provision contained in this Agreement should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any
way be affected or impaired thereby.
                      
 6.6        Counterparts.   This Agreement may be executed in two or more counterparts, each of which shall constitute an original, but all of which, when taken together, shall
constitute but one instrument, and shall become effective when one or more counterparts have been signed by each party hereto and delivered to the other parties.
                        6.7        Successors and Assigns.
  Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto.
                        6.8        Entire Agreement.  
This Agreement, the Warrant Agreement and the Restated License Agreement constitute the entire understanding of the parties with respect to the subject matter hereof and thereof and supercede all related prior or contemporaneous oral
communications, agreements or discussions with respect to the subject matter hereof or thereof. Each such agreement must be read, interpreted, and applied with the others and together they constitute one business transaction.
                        6.9        Payment of Fees and Expenses.
  Each of Cypress and Pierre Fabre shall bear its own expenses and legal fees incurred on its behalf with respect to this Agreement and the transactions contemplated hereby. If any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable
 12.

  attorney’s fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled.
 13.

                  IN WITNESS WHEREOF, the parties
hereto have caused this Agreement to be executed by their duly authorized representatives as of the day and year first above written.

			
	 	 	 
	 	CYPRESS BIOSCIENCE INC.	
 
	 	 	 
	 	 	 
	 	By:	 /s/ JAY KRANZLER
 
	 	 	
 
	 	Name:	 Jay D. Kranzler
 
	 	 	
 
	 	Title:	 CEO
 
	 	 	
 
	 	 	 
	 	 	 
	 	PIERRE FABRE MÉDICAMENT	 
	 	 	 
	 	 	 
	 	By:	 /s/  R. DOLIVEUX
 
	 	 	
 
	 	Name:	  R. DOLIVEUX
 
	 	 	
 
	 	Title:	 President and CEO

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