Exhibit 10.1

Securities Purchase Agreement, dated as of September 21, 2005 (this
“Agreement”), among Memory Pharmaceuticals Corp., a Delaware corporation (the
“Company”), and the Purchasers listed on Exhibit A hereto, together with their
permitted transferees (each, a “Purchaser” and collectively, the “Purchasers”).

Introduction

The Company and the Purchasers are executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by
Section 4(2) of the Securities Act.

The Purchasers desire to purchase and the Company desires to sell, upon the
terms and conditions stated in this Agreement, up to a maximum of $31,000,000 of
the Company’s common stock, par value $.001 per share (the “Common Stock”) and
warrants to purchase Common Stock of the Company.

The capitalized terms used herein and not otherwise defined have the meanings
given them in Article 7.

In consideration of the premises and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and the Purchasers (severally and not jointly)
hereby agree as follows:

ARTICLE I

Purchase and Sale of Securities

Section 1.1 Purchase and Sale of Securities. At the Closing, the Company will
issue and sell to each Purchaser, and each Purchaser will, severally and not
jointly, purchase from the Company the number of shares of Common Stock (the
“Shares”) and the number of warrants (the “Warrants”) to purchase shares of
Common Stock set forth opposite such Purchaser’s name on Exhibit A hereto (the
Shares, the Warrants and the Warrant Shares (as defined below) are referred to
collectively as the “Securities”). The purchase price for each Share and the
related Warrant shall be $1.90 (the “Purchase Price”), which is the sum of (i)
$1.85, the closing bid price of the Common Stock as reported on Nasdaq (symbol
“MEMY”), as the 4:00 p.m., EDT, closing bid price on September 20, 2005 (the
“Stock Purchase Price”), and (ii) $0.05. For each one Share purchased by a
Purchaser, such Purchaser shall receive a Warrant to purchase 0.35 of a share of
Common Stock at an exercise price per share equal to $2.22, which represents
120% of the Stock Purchase Price, pursuant to a Warrant substantially in the
form attached as Exhibit B hereto.

Section 1.2 Payment. Unless otherwise agreed with a Purchaser, at the Closing,
each Purchaser will pay the aggregate Purchase Price set forth opposite its name
on Exhibit A hereto by wire transfer of immediately available funds in
accordance with wire instructions provided by the Company to the Purchasers
prior to the Closing. At or promptly following the Closing, the Company will
instruct its transfer agent to credit each Purchaser the number of Shares set
forth on Exhibit A (and, upon request, will deliver stock certificates to the
Purchasers representing the Shares) and will deliver Warrants to purchase the
Warrant Shares against delivery of the aggregate Purchase Price on the Closing
Date.

Section 1.3 Closing Date. The closing of the transaction contemplated by this
Agreement will take place on or about September 23, 2005 (the “Closing Date”)
and the closing (the “Closing”) will be held at the offices of Covington &
Burling, 1330 Avenue of the Americas, New York, New York 10019 or at such other
time and place as shall be agreed upon by the Company and the Purchasers
hereunder of a majority in interest of the Securities.

ARTICLE II

Representations And Warranties Of The Company

The Company hereby represents and warrants to the Purchasers that:

Section 2.1 Organization and Qualification. The Company is duly incorporated,
validly existing and in good standing under the laws of the State of Delaware,
with corporate power and authority to conduct its business as currently
conducted as disclosed in the SEC Documents. The Company is duly qualified to do
business and is in good standing in every jurisdiction in which the nature of
the business conducted by it or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as
the case may be, would not reasonably be expected to have a Material Adverse
Effect.

Section 2.2 Authorization; Enforcement. The Company has all requisite corporate
power and authority to enter into and to perform its obligations under this
Agreement, to consummate the transactions contemplated hereby and to issue the
Securities in accordance with the terms hereof. The execution, delivery and
performance of this Agreement by the Company and the consummation by it of the
transactions contemplated hereby (including the issuance of the Securities) have
been duly authorized by the Company’s Board of Directors and no further consent
or authorization of the Company, its Board of Directors, or its stockholders is
required. This Agreement has been duly executed by the Company and constitutes a
legal, valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, or moratorium or similar laws
affecting creditors’ and contracting parties’ rights generally and except as
enforceability may be subject to general principles of equity and except as
rights to indemnity and contribution may be limited by state or federal
securities laws or public policy underlying such laws.

Section 2.3 Capitalization. The authorized capital stock of the Company, as of
June 30, 2005, consisted of 100,000,000 shares of Common Stock, of which
21,008,961 shares were issued and outstanding and 5,000,000 shares of blank
check Preferred Stock, $0.001 par value per share, none of which have been
designated. All of the issued and outstanding shares of Common Stock have been
duly authorized, validly issued, fully paid, and nonassessable. Options and
warrants to purchase an aggregate of 3,661,073 shares of Common Stock were
outstanding as of June 30, 2005. Except as disclosed in or contemplated by the
SEC Documents, the Company does not have outstanding any options to purchase, or
any preemptive rights or other rights to subscribe for or to purchase, any
securities or obligations convertible into, or any contracts or commitments to
issue or sell, shares of its capital stock or any such options, rights,
convertible securities or obligations other than options granted under the
Company’s stock option plans and its employee stock purchase plan. The Company’s
Second Amended and Restated Certificate of Incorporation, as amended (the
“Certificate of Incorporation”), as in effect on the date hereof, and the
Company’s Amended and Restated Bylaws (the “Bylaws”) as in effect on the date
hereof, are each filed as exhibits to the SEC Documents.

Section 2.4 Issuance of Securities. The Shares and all of the shares of Common
Stock issuable upon exercise of the Warrants (the “Warrant Shares”) are duly
authorized and, upon issuance in accordance with the terms of this Agreement
(and in case of the Warrant Shares, the Warrants), will be validly issued, fully
paid and non-assessable and will not be subject to preemptive rights or other
similar rights of stockholders of the Company.

Section 2.5 No Conflicts; Government Consents and Permits. (a) The execution,
delivery and performance of this Agreement by the Company and the consummation
by the Company of the transactions contemplated hereby (including the issuance
of the Securities) will not (i) conflict with or result in a violation of any
provision of its Certificate of Incorporation or Bylaws or require the approval
of the Company’s stockholders, (ii) violate or conflict with, or result in a
breach of any provision of, or constitute a default under, any agreement,
indenture, or instrument to which the Company is a party, or (iii) result in a
violation of any law, rule, regulation, order, judgment or decree (including
United States federal and state securities laws and regulations and regulations
of any self-regulatory organizations to which the Company or its securities are
subject) applicable to the Company, except in the case of clauses (ii) and (iii)
only, for such conflicts, breaches, defaults, and violations as would not
reasonably be expected to have a Material Adverse Effect.

(b) The Company is not required to obtain any consent, authorization or order
of, or make any filing or registration with, any court or governmental agency or
any regulatory or self regulatory agency in order for it to execute, deliver or
perform any of its obligations under this Agreement in accordance with the terms
hereof, or to issue and sell the Securities in accordance with the terms hereof
other than such as have been made or obtained, and except for the registration
of the Shares and Warrant Shares under the Securities Act pursuant to Section 6
hereof, any filings required to be made under federal or state securities laws,
and any required filings or notifications regarding the issuance or listing of
additional shares with Nasdaq.

(c) The Company has all franchises, permits, licenses, and any similar authority
necessary for the conduct of its business as now being conducted by it, except
for such franchise, permit, license or similar authority, the lack of which
would not reasonably be expected to have a Material Adverse Effect. The Company
has not received any written notice of any proceeding relating to revocation or
modification of any such franchise, permit, license, or similar authority except
where such revocation or modification would not reasonably be expected to have a
Material Adverse Effect.

Section 2.6 SEC Documents, Financial Statements. The Company has timely filed
all reports, schedules, forms, statements and other documents required to be
filed by it with the SEC since April 5, 2004, pursuant to the reporting
requirements of the Exchange Act (all of the foregoing filed prior to the
Closing Date and all exhibits included therein and financial statements and
schedules thereto and documents (other than exhibits) incorporated by reference
therein, being hereinafter referred to herein as the “SEC Documents”). As of
their respective dates, the SEC Documents complied as to form 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. The Financial Statements have been prepared in
accordance with accounting principles generally accepted in the United States,
consistently applied, during the periods involved (except (i) as may be
otherwise indicated in the Financial Statements or the notes thereto, or (ii) in
the case of unaudited interim statements, to the extent they may not include
footnotes, may be condensed or summary statements or may conform to the SEC’s
rules and instructions for Reports on Form 10-Q) and fairly present in all
material respects the consolidated financial position of the Company as of the
dates thereof and the consolidated results of its operations and cash flows for
the periods then ended (subject, in the case of unaudited statements, to normal
and recurring year-end audit adjustments). All material agreements that were
required to be filed as exhibits to the SEC Documents under Item 601 of
Regulation S-K (collectively, the “Material Agreements”) to which the Company is
a party, or the property or assets of the Company or are subject, have been
filed as exhibits to the SEC Documents. All Material Agreements are valid and
enforceable against the Company in accordance with their respective terms,
except (i) as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or moratorium or similar laws affecting creditors’
rights generally, and (ii) as enforceability may be subject to general
principles of equity and except as rights to indemnity and contribution may be
limited by state or federal securities laws or public policy underlying such
laws. The Company is not in breach of or default under any of the Material
Agreements, and to the Company’s knowledge, no other party to a Material
Agreement is in breach of or default under such Material Agreement, except in
each case, for such breaches or defaults as would not reasonably be expected to
have a Material Adverse Effect. The Company has not received a notice of
termination of any of the Material Agreements.

Section 2.7 Absence of Litigation. As of the date hereof, there is no action,
suit, proceeding or investigation before or by any court, public board,
government agency, self-regulatory organization or body pending or, to the
Company’s knowledge, threatened against the Company that if determined adversely
to the Company would reasonably be expected to have a Material Adverse Effect.
There has not been, and to the knowledge of the Company, there is not pending,
any investigation by the SEC involving the Company or any current or former
director or officer of the Company. The Company has not received any stop order
or other order suspending the effectiveness of any registration statement filed
by the Company under the Exchange Act or the Securities Act and, to the
Company’s knowledge, the SEC has not issued any such order.

Section 2.8 Intellectual Property Rights. To the Company’s knowledge, the
Company owns or possesses, or believes it can obtain on reasonable terms,
licenses or sufficient rights to use all patents, patent applications, patent
rights, inventions, know-how, trade secrets, trademarks, trademark applications,
service marks, service names, trade names and copyrights necessary to enable it
to conduct its business as conducted as of the date hereof (the “Intellectual
Property”). To the Company’s knowledge, the Company has not infringed the
intellectual property rights of third parties and no third party, to the
Company’s knowledge, is infringing the Intellectual Property, in each case,
which could reasonably be expected to result in a Material Adverse Effect.
Except as disclosed in the SEC Documents, there are no material options,
licenses or agreements relating to the Intellectual Property, nor is the Company
bound by or a party to any material options, licenses or agreements relating to
the patents, patent applications, patent rights, inventions, know-how, trade
secrets, trademarks, trademark applications, service marks, service names, trade
names or copyrights of any other person or entity. As of the date hereof, there
is no material claim or action or proceeding pending or, to the Company’s
knowledge, threatened, that challenges the right of the Company with respect to
any Intellectual Property.

Section 2.9 Placement Agents. The Company has taken no action that would give
rise to any claim by any person for brokerage commissions, placement agent’s
fees or similar payments relating to this Agreement or the transactions
contemplated hereby, except for dealings with the Placement Agents, whose
commissions and fees will be paid by the Company.

Section 2.10 Investment Company. The Company is not and, after giving effect to
the offering and sale of the Securities, will not be an “investment company” as
such term is defined in the Investment Company Act of 1940, as amended (the
“Investment Company Act”). The Company shall conduct its business in a manner so
that it will not become subject to the Investment Company Act.

Section 2.11 No Material Adverse Change. Since June 30, 2005, except as
described or referred to in the SEC Documents and except for cash expenditures
in the ordinary course of business, there has not been a Material Adverse
Effect. Since June 30, 2005, (i) there has not been any dividend or distribution
of any kind declared, set aside for payment, paid or made by the Company on any
class of capital stock, (ii) the Company has not sustained any material loss or
interference with the Company’s business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor disturbance or
dispute or any action, order or decree of any court or arbitrator or
governmental or regulatory authority, and (iii) the Company has not incurred any
liabilities except in the ordinary course of business.

Section 2.12 Nasdaq National Market. The issued and outstanding shares of Common
Stock are listed on Nasdaq, and, to the Company’s knowledge, there are no
proceedings to revoke or suspend such listing. The Company is in compliance in
all material respects with the requirements of Nasdaq for continued listing of
the Common Stock thereon and any other Nasdaq listing and maintenance
requirements.

Section 2.13 Acknowledgment Regarding Purchasers’ Purchase of Securities. The
Company acknowledges and agrees that each of the Purchasers is acting solely in
the capacity of an arm’s length purchaser with respect to this Agreement and the
transactions contemplated hereby. The Company further acknowledges that no
Purchaser is acting as a financial advisor or fiduciary of the Company (or in
any similar capacity with respect to the Company) with respect to this Agreement
and the transactions contemplated hereby and any advice given by any Purchaser
or any of their respective representatives or agents to the Company in
connection with this Agreement and the transactions contemplated hereby is
merely incidental to such Purchaser’s purchase of the Securities. The Company
further represents to each Purchaser that the Company’s decision to enter into
this Agreement has been based upon the independent evaluation of the
transactions contemplated hereby by the Company and its representatives.

Section 2.14 Accountants. KPMG LLP, who will express their opinion with respect
to the audited financial statements and schedules to be included as a part of
the Registration Statement prior to the filing of the Registration Statement,
are independent accountants as required by the Securities Act.

Section 2.15 Insurance. The Company is insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as
the Company believes are prudent and customary for a company (i) in the
businesses and location in which the Company is engaged, (ii) with the resources
of the Company, and (iii) at a similar stage of development as the Company. The
Company has not received any written notice that the Company will not be able to
renew its existing insurance coverage as and when such coverage expires. The
Company believes it will be able to obtain similar coverage at reasonable cost
from similar insurers as may be necessary to continue its business.

Section 2.16 Foreign Corrupt Practices. Since January 1, 2004, neither the
Company, nor to the Company’s knowledge, any director, officer, agent, employee
or other person acting on behalf of the Company has, in the course of its
actions for, or on behalf of, the Company (i) used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expenses relating
to political activity; (ii) made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds;
(iii) violated or is in violation of in any material respect any provision of
the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any
unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful
payment to any foreign or domestic government official or employee.

Section 2.17 Private Placement. Neither the Company nor any person acting on its
or their behalf, has, directly or indirectly, made any offers or sales of any
security or solicited any offers to buy any security, under any circumstances
that would require registration of the Securities under the Securities Act.

Section 2.18 No Registration Rights. No person has the right to (i) prohibit the
Company from filing the Registration Statement or (ii) other than as disclosed
in the SEC Documents, require the Company to register any securities for sale
under the Securities Act by reason of the filing of the Registration Statement.
The granting and performance of the registration rights under this Agreement
will not violate or conflict with, or result in a breach of any provision of, or
constitute a default under, any agreement, indenture or instrument to which the
Company is a party.

Section 2.19 Taxes. The Company has filed (or has obtained an extension of time
within which to file) all necessary federal, state and foreign income and
franchise tax returns and has paid all taxes shown as due on such tax returns,
except where the failure to so file or the failure to so pay would not
reasonably be expected to have a Material Adverse Effect.

Section 2.20 Real and Personal Property. The Company has good and marketable
title to, or has valid rights to lease or otherwise use, all items of real and
personal property that are material to the business of the Company free and
clear of all liens, encumbrances, claims and defects and imperfections of title
except those that (i) do not materially interfere with the use of such property
by the Company or (ii) would not reasonably be expected to have a Material
Adverse Effect.

Section 2.21 Application of Takeover Protections. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby will
not impose any restriction on any Purchaser, or create in any party (including
any current stockholder of the Company) any rights, under any share acquisition,
business combination, poison pill (including any distribution under a rights
agreement), or other similar anti-takeover provisions under the Company’s
charter documents or the laws of its state of incorporation.

Section 2.22 No Manipulation of Stock. The Company has not taken, nor will it
take, directly or indirectly any action designed to stabilize or manipulate of
the price of the Common Stock or any security of the Company to facilitate the
sale or resale of any of the Shares.

Section 2.23 Related Party Transactions. Except with respect to the transactions
(i) that are not required to be disclosed and (ii) contemplated hereby to the
extent any director or an affiliate of any director purchases Securities
hereunder, all transactions that have occurred between or among the Company, on
the one hand, and any of its officers or directors, or any affiliate or
affiliates of any such officer or director, on the other hand, prior to the date
hereof have been disclosed in the SEC Documents.

ARTICLE III

Purchaser’s Representations And Warranties

Each Purchaser represents and warrants to the Company, severally and not
jointly, with respect to itself and its purchase hereunder, that:

Section 3.1 Investment Purpose. The Purchaser is purchasing the Securities for
its own account and not with a present view toward the public sale or
distribution thereof and has no intention of selling or distributing any of such
Securities or any arrangement or understanding with any other persons regarding
the sale or distribution of such Securities except in accordance with the
provisions of Article 6 and except as would not result in a violation of the
Securities Act. The Purchaser will not, directly or indirectly, offer, sell,
pledge, transfer or otherwise dispose of (or solicit any offers to buy, purchase
or otherwise acquire or take a pledge of) any of the Securities except in
accordance with the provisions of Article 6 or pursuant to and in accordance
with the Securities Act.

Section 3.2 Questionnaires. The Stock Certificate and Warrant Questionnaire and
the Registration Statement Questionnaire submitted by Purchaser to the Company
in connection with its purchase of the Securities was accurate and correct when
delivered and is accurate and correct as of the date hereof.

Section 3.3 Reliance on Exemptions. The Purchaser understands that the
Securities are being offered and sold to it in reliance upon specific exemptions
from the registration requirements of United States federal and state securities
laws and that the Company is relying upon the truth and accuracy of, and the
Purchaser’s compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Purchaser set forth herein in order to
determine the availability of such exemptions and the eligibility of the
Purchaser to acquire the Securities.

Section 3.4 Information. The Purchaser has been furnished with all relevant
materials relating to the business, finances and operations of the Company
necessary to make an investment decision, and materials relating to the offer
and sale of the Securities, that have been requested by the Purchaser,
including, without limitation, the Company’s SEC Documents, and the Purchaser
has had the opportunity to review the SEC Documents. The Purchaser has been
afforded the opportunity to ask questions of the Company. Neither such inquiries
nor any other investigation conducted by or on behalf of such Purchaser or its
representatives or counsel shall modify, amend or affect such Purchaser’s right
to rely on the truth, accuracy and completeness of the SEC Documents and the
Company’s representations and warranties contained herein.

Section 3.5 Acknowledgement of Risk. (a) The Purchaser acknowledges and
understands that its investment in the Securities involves a significant degree
of risk, including, without limitation, (i) the Company remains a development
stage business with limited operating history and requires substantial funds in
addition to the proceeds from the sale of the Securities; (ii) an investment in
the Company is speculative, and only Purchasers who can afford the loss of their
entire investment should consider investing in the Company and the Securities;
(iii) the Purchaser may not be able to liquidate its investment;
(iv) transferability of the Securities is extremely limited; (v) in the event of
a disposition of the Securities, the Purchaser could sustain the loss of its
entire investment; and (vi) the Company has not paid any dividends on its Common
Stock since inception and does not anticipate the payment of dividends in the
foreseeable future. Such risks are more fully set forth in the SEC Documents;

(b) The Purchaser is able to bear the economic risk of holding the Securities
for an indefinite period, and has knowledge and experience in financial and
business matters such that it is capable of evaluating the risks of the
investment in the Securities; and

(c) The Purchaser has, in connection with the Purchaser’s decision to purchase
Securities, not relied upon any representations or other information (whether
oral or written) other than as set forth in the representations and warranties
of the Company contained herein, and the Purchaser has, with respect to all
matters relating to this Agreement and the offer and sale of the Securities,
relied solely upon the advice of such Purchaser’s own counsel and has not relied
upon or consulted any counsel to the Placement Agents or counsel to the Company.

Section 3.6 Governmental Review. The Purchaser understands that no United States
federal or state agency or any other government or governmental agency has
passed upon or made any recommendation or endorsement of the Securities or an
investment therein.

Section 3.7 Transfer or Resale. The Purchaser understands that:

(a) the Securities have not been and are not being registered under the
Securities Act (other than as contemplated in Article 6) or any applicable state
securities laws and, consequently, the Purchaser may have to bear the risk of
owning the Securities for an indefinite period of time because the Securities
may not be transferred unless (i) the resale of the Securities is registered
pursuant to an effective registration statement under the Securities Act, as
contemplated in Article 6; (ii) the Purchaser has delivered to the Company an
opinion of counsel (in form, substance and scope reasonably satisfactory to the
Company) to the effect that the Securities to be sold or transferred may be sold
or transferred pursuant to an exemption from such registration; or (iii) the
Securities are sold or transferred pursuant to Rule 144;

(b) any sale of the Securities made in reliance on Rule 144 may be made only in
accordance with the terms of Rule 144 and, if Rule 144 is not applicable, any
resale of the Securities under circumstances in which the seller (or the person
through whom the sale is made) may be deemed to be an underwriter (as that term
is defined in the Securities Act) may require compliance with some other
exemption under the Securities Act or the rules and regulations of the SEC
thereunder; and

(c) except as set forth in Article 6, neither the Company nor any other person
is under any obligation to register the resale of the Shares or the Warrant
Shares under the Securities Act or any state securities laws or to comply with
the terms and conditions of any exemption thereunder.

Section 3.8 Legends. (a) The Purchaser understands the certificates representing
the Securities will bear a restrictive legend in substantially the following
form (and a stop-transfer order may be placed against transfer of the
certificates for such Securities):

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES. THE SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER APPLICABLE SECURITIES LAWS, OR
UNLESS OFFERED, SOLD, PLEDGED, HYPOTHECATED OR TRANSFERRED PURSUANT TO AN
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS. THE
COMPANY SHALL BE ENTITLED TO REQUIRE AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED TO THE EXTENT THAT SUCH OPINION
IS REQUIRED PURSUANT TO THAT CERTAIN SECURITIES PURCHASE AGREEMENT UNDER WHICH
THE SECURITIES WERE ISSUED.

(b) The Purchaser may request that the Company remove, and the Company agrees to
authorize the removal of any legend from the Shares and Warrant Shares
(i) following any sale of the Shares or Warrant Shares pursuant to an effective
Registration Statement or Rule 144, or (ii) if such Shares or Warrant Shares are
eligible for sale under Rule 144(k). Following the time a legend is no longer
required for the Shares or Warrant Shares hereunder, the Company will, no later
than five Business Days following the delivery by a Purchaser to the Company or
the Company’s transfer agent of a legended certificate representing such
securities, deliver or cause to be delivered to such Purchaser a certificate
representing such securities that is free from all restrictive and other
legends. If unlegended certificates are not delivered to such Purchaser within
such five Business Day period, the Company shall pay such Purchaser liquidated
damages in an amount equal to 1.0% of the aggregate Purchase Price of the Shares
or Warrant Shares evidenced by such certificate for each 30 day period (or
portion thereof) beyond such five Business Days that the unlegended certificates
have not been so delivered.

Section 3.9 Authorization; Enforcement. The Purchaser has the requisite power
and authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The Purchaser has taken all necessary action to authorize
the execution, delivery and performance of this Agreement. Upon the execution
and delivery of this Agreement, this Agreement shall constitute a valid and
binding obligation of the Purchaser enforceable in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ and contracting
parties’ rights generally and except as enforceability may be subject to general
principles of equity and except as rights to indemnity and contribution may be
limited by state or federal securities laws or public policy underlying such
laws.

Section 3.10 Residency. The Purchaser is a resident of the jurisdiction set
forth immediately below such Purchaser’s name on the signature pages hereto.

Section 3.11 No Short Sales. Between the time the Purchaser learned about the
Offering and the public announcement of the Offering, the Purchaser has not
engaged in any short sales or similar transactions with respect to the Common
Stock, nor has the Purchaser, directly or indirectly, caused any Person to
engage in any short sales or similar transactions with respect to the Common
Stock.

Section 3.12 Acknowledgements Regarding Placement Agent. The Purchaser
acknowledges that the Placement Agents are acting as the exclusive placement
agents on a “best efforts” basis for the Securities being offered hereby and
will be compensated by the Company for acting in such capacity. The Purchaser
represents that (i) the Purchaser was contacted regarding the sale of the
Securities by the Placement Agent (or an authorized agent or representative
thereof) with whom the Purchaser entered into a confidentiality agreement and
(ii) no Securities were offered or sold to it by means of any form of general
solicitation or general advertising.

ARTICLE IV

Covenants

Section 4.1 Reporting Status. The Company’s Common Stock is registered under
Section 12 of the Exchange Act. During the Registration Period (or within the
periods permitted under Rule 12b-25 of the Exchange Act), the Company will
timely file with the SEC all reports required to be so filed under the Exchange
Act, and the Company will not terminate its status as an issuer required to file
reports under the Exchange Act even if the Exchange Act or the rules and
regulations thereunder would permit such termination.

Section 4.2 Expenses. The Company and each Purchaser is each severally and not
jointly liable for, and each will pay, its own expenses incurred in connection
with the negotiation, preparation, execution and delivery of this Agreement,
including, without limitation, attorneys’ and consultants’ fees and expenses.

Section 4.3 Financial Information. The financial statements of the Company to be
included in any documents filed with the SEC will be prepared in accordance with
accounting principles generally accepted in the United States, consistently
applied (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, may be condensed or summary
statements or may conform to the SEC’s rules and instructions for Reports on
Form 10-Q), and will fairly present in all material respects the consolidated
financial position of the Company and consolidated results of its operations and
cash flows as of, and for the periods covered by, such financial statements
(subject, in the case of unaudited statements, to normal and recurring year-end
audit adjustments).

Section 4.4 Securities Laws Disclosure; Publicity. On or before 9:30 a.m., New
York local time, on September 22, 2005 the Company shall issue a press release
announcing the signing of this Agreement and describing the material terms of
the transactions contemplated by this Agreement. On or before September 26,
2005, the Company shall file a Current Report on Form 8-K with the SEC
describing the terms of the transactions contemplated by this Agreement and
including as an exhibit to such Current Report on Form 8-K this Agreement, in
the form required by the Exchange Act. The Company shall not otherwise publicly
disclose the name of any Purchaser, or include the name of any Purchaser in any
filing with the Commission (other than the Registration Statement and any
exhibits to filings made in respect of this transaction in accordance with
periodic filing requirements under the Exchange Act) or any regulatory agency,
without the prior written consent of such Purchaser, except to the extent such
disclosure is required by law or regulations, in which case the Company shall
provide the Purchasers with prior notice of such disclosure.

Section 4.5 Sales by Purchasers. Each Purchaser will sell any Securities held by
it in compliance with applicable prospectus delivery requirements, if any, or
otherwise in compliance with the requirements for an exemption from registration
under the Securities Act and the rules and regulations promulgated thereunder.
No Purchaser will make any sale, transfer or other disposition of the Securities
in violation of federal or state securities laws.

Section 4.6 Reservation of Common Stock. The Company shall reserve and keep
available at all times during which the Warrants remain exercisable, free of
preemptive rights, a sufficient number of shares of Common Stock for the purpose
of enabling the Company to issue Warrant Shares pursuant to this Agreement.

Section 4.7 Pledge of Securities. The Company acknowledges and agrees that the
Securities may be pledged by a Purchaser in connection with a bona fide margin
agreement or other loan or financing arrangement that is secured by the
Securities. The pledge of Securities shall not be deemed to be a transfer, sale
or assignment of the Securities hereunder, and no Purchasers effecting a pledge
of the Securities shall be required to provide the Company with any notice
thereof or otherwise make any delivery to the Company pursuant to this
Agreement; provided that a Purchaser and its pledgee shall comply with the
provisions of this Agreement in order to effect a sale, transfer, or assignment
of any such Securities to such pledgee. At the expense of the Purchaser pledging
such Securities, the Company hereby agrees to execute and deliver such
documentation as pledgee of the Securities may reasonably request in connection
with a pledge of the Securities to such pledgee by a Purchaser.

ARTICLE V

Conditions To Closing

Section 5.1 Conditions to Obligations of the Company. The Company’s obligation
to complete the purchase and sale of the Securities and deliver such stock
certificate(s) and Warrants to each Purchaser is subject to the fulfillment or
waiver as of the Closing Date of the following conditions:

(a) Receipt of Funds. The Company shall have received immediately available
funds in the full amount of the purchase price for the Shares and Warrants being
purchased hereunder as set forth opposite such Purchaser’s name on Exhibit A
hereto.

(b) Representations and Warranties. The representations and warranties made by
each Purchaser in Article 3 shall be true and correct in all material respects
as of the Closing Date.

(c) Covenants. All covenants, agreements and conditions contained in this
Agreement to be performed by the Purchasers on or prior to the Closing Date
shall have been performed or complied with in all material respects.

(d) Blue Sky. The Company shall have obtained all necessary blue sky law permits
and qualifications, or secured exemptions therefrom, required by any state for
the offer and sale of the Securities.

(e) Absence of Litigation. No proceeding challenging this Agreement or the
transactions contemplated hereby, or seeking to prohibit, alter, prevent or
materially delay the Closing, shall have been instituted or be pending before
any court, arbitrator, governmental body, agency or official.

(f) No Governmental Prohibition. The sale of the Securities by the Company shall
not be prohibited by any law or governmental order or regulation.

(g) No Stop Order. No stop order or suspension of trading shall have been
imposed by Nasdaq, the SEC or any other governmental or regulatory body with
respect to public trading in the Common Stock.

Section 5.2 Conditions to Purchasers’ Obligations at the Closing. Each
Purchaser’s obligation to complete the purchase and sale of the Shares and
Warrants is subject to the fulfillment or waiver as of the Closing Date of the
following conditions:

(a) Representations and Warranties. The representations and warranties made by
the Company in Article 2 shall be true and correct in all material respects as
of the Closing Date.

(b) Covenants. All covenants, agreements and conditions contained in this
Agreement to be performed by the Company on or prior to the Closing Date shall
have been performed or complied with in all material respects.

(c) Blue Sky. The Company shall have obtained all necessary blue sky law permits
and qualifications, or secured exemptions therefrom, required by any state or
foreign or other jurisdiction for the offer and sale of the Shares.

(d) Legal Opinion. The Company shall have delivered to such Purchaser an
opinion, dated as of the Closing Date, from Covington & Burling, counsel to the
Company, in substantially the form attached hereto as Exhibit C hereto.

(e) Transfer Agent Instructions. The Company shall have delivered to its
transfer agent irrevocable instructions to issue to such Purchaser or in such
nominee name(s) as designated by such Purchaser in writing such number of Shares
set forth opposite such Purchaser’s name on Exhibit A hereto or, if requested by
the Purchaser, one or more certificates representing such Shares, and Warrants
to purchase the Warrant Shares.

(f) Absence of Litigation. No proceeding challenging this Agreement or the
transactions contemplated hereby, or seeking to prohibit, alter, prevent or
materially delay the Closing, shall have been instituted or be pending before
any court, arbitrator, governmental body, agency or official.

(g) No Governmental Prohibition. The sale of the Shares by the Company shall not
be prohibited by any law or governmental order or regulation.

(h) No Stop Order. No stop order or suspension of trading shall have been
imposed by Nasdaq, the SEC or any other governmental or regulatory body with
respect to public trading in the Common Stock.

(i) Minimum Aggregate Investment. The Company shall have received at the Closing
at least $30,000,000 of aggregate proceeds from the sale of Shares and Warrants
hereunder.

ARTICLE VI

Registration Rights

Section 6.1 Filing of Registration Statement. As soon as reasonably practicable,
but in no event later than 30 days after the Closing Date (the “Filing Date”),
the Company shall file a registration statement covering the resale of the
Registrable Securities (as defined in Section 7.1) on a registration statement
(the “Registration Statement”) with the SEC and effect the registration,
qualifications or compliances (including, without limitation, the execution of
any required undertaking to file post-effective amendments, appropriate
qualifications or exemptions under applicable blue sky or other state securities
laws and appropriate compliance with applicable securities laws, requirements or
regulations) as promptly as possible after the filing thereof, but in any event
prior to the date which is 90 days after the Closing Date. The Registration
Statement will be on Form S-3; provided that if Form S-3 is not available for
use by the Company on the Filing Date, then the Registration Statement will be
on such form as is then available.

Section 6.2 Expenses. All Registration Expenses incurred in connection with any
registration, qualification, exemption or compliance pursuant to Section 6.1
shall be borne by the Company. All Selling Expenses relating to the sale of
securities registered by or on behalf of any Holder shall be borne by such
Holder.

Section 6.3 Registration Defaults. The Company further agrees that, in the event
that the Registration Statement (i) has not been filed with the SEC within
30 days after the Closing Date, (ii) has not been declared effective by the SEC
within 90 days after the Closing Date, or (iii) after the Registration Statement
is declared effective by the SEC, is suspended by the Company or ceases to
remain continuously effective as to all Registrable Securities for which it is
required to be effective, other than, in each case, within the time period(s)
permitted by Section 6.7(b) (each such event referred to in clauses (i),
(ii) and (iii), (a “Registration Default”)), for any thirty-day period (a
“Penalty Period”) during which the Registration Default remains uncured (which
initial thirty-day period shall commence on the fifth Business Day after the
date of such Registration Default if such Registration Default has not been
cured by such date), the Company shall pay to each Purchaser 1% of such
Purchaser’s aggregate purchase price of his or her Shares and Warrants for each
Penalty Period during which the Registration Default remains uncured; provided,
however, that if a Purchaser fails to provide the Company with any information
that is required to be provided in the Registration Statement with respect to
such Purchaser as set forth herein, then the commencement of the Penalty Period
described above shall be extended until two Business Days following the date of
receipt by the Company of such required information; provided further that the
amount payable to any Holder hereunder for any partial Penalty Period shall be
prorated for the number of actual days during such Penalty Period during which a
Registration Default remains uncured. The Company shall deliver said cash
payment to the Purchaser by the fifth Business Day after the end of such Penalty
Period. If the Company fails to pay said cash payment to the Purchasers in full
by the fifth Business Day after the end of such Penalty Period, the Company will
pay interest thereon at a rate of 10% per annum (or such lesser maximum amount
that is permitted to be paid by applicable law) to the Purchasers, accruing
daily from the date such liquidated damages are due until such amounts, plus all
such interest thereon, are paid in full.

Section 6.4 Registration Period Covenants. In the case of the registration,
qualification, exemption or compliance effected by the Company pursuant to this
Agreement, the Company shall, upon reasonable request, inform each Holder as to
the status of such registration, qualification, exemption and compliance. At its
expense during the Registration Period the Company shall:

(a) except for such times as the Company is permitted hereunder to suspend the
use of the prospectus forming part of the Registration Statement, use its
commercially reasonable efforts to keep such registration, and any
qualification, exemption or compliance under state securities laws that the
Company determines to obtain, continuously effective with respect to a Holder,
and to keep such Registration Statement free of any material misstatements or
omissions, until the earlier of the following: (i) the second anniversary of the
Closing Date or (ii) the date all Shares and Warrant Shares held by such Holder
may be sold under Rule 144 during any 90 day period. The period of time during
which the Company is required hereunder to keep the Registration Statement
effective is referred to herein as the “Registration Period.”

(b) advise the Holders:

(i) within two Business Days when the Registration Statement or any amendment
thereto has been filed with the SEC and when the Registration Statement or any
post-effective amendment thereto has become effective;

(ii) within five Business Days of any request by the SEC for amendments or
supplements to the Registration Statement or the prospectus included therein or
for additional information;

(iii) within five Business Days of the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement or the initiation of
any proceedings for such purpose;

(iv) within five Business Days of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Registrable
Securities included therein for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and

(v) within five Business Days of the occurrence of any event that requires the
making of any changes in the Registration Statement or the prospectus so that,
as of such date, the statements therein are not misleading and do not omit to
state a material fact required to be stated therein or necessary to make the
statements therein (in the case of the prospectus, in the light of the
circumstances under which they were made) not misleading;

(c) use its commercially reasonable efforts to obtain the withdrawal of any
order suspending the effectiveness of any Registration Statement as soon as
reasonably practicable;

(d) promptly deliver to each such Holder, without charge, as many copies of the
prospectus included in such Registration Statement and any amendment or
supplement thereto as such Holder may reasonably request in writing; and the
Company consents to the use, consistent with the provisions hereof, of the
prospectus or any amendment or supplement thereto by each of the selling Holders
of Registrable Securities in connection with the offering and sale of the
Registrable Securities covered by the prospectus or any amendment or supplement
thereto;

(e) if a Holder so requests in writing, deliver to each Holder, without charge,
(i) one copy of the following documents, other than those documents available
via EDGAR: (A) its annual report to its stockholders, if any (which annual
report shall contain financial statements audited in accordance with generally
accepted accounting principles in the United States of America by a firm of
certified public accountants of recognized standing), (B) if not included in
substance in its annual report to stockholders, its annual report on Form 10-K
(or similar form), (C) its definitive proxy statement with respect to its annual
meeting of stockholders, (D) each of its quarterly reports to its stockholders,
and, if not included in substance in its quarterly reports to stockholders, its
quarterly report on Form 10-Q (or similar form), and (E) a copy of the full
Registration Statement (the foregoing, in each case, excluding exhibits); and
(ii) if explicitly requested, all exhibits excluded by the parenthetical to the
immediately preceding clause (E);

(f) prior to any public offering of Registrable Securities pursuant to any
Registration Statement, promptly take such actions as may be necessary to
register or qualify or obtain an exemption for offer and sale under the
securities or blue sky laws of such United States jurisdictions as any such
Holders reasonably request in writing, provided that the Company shall not for
any such purpose be required to qualify generally to transact business as a
foreign corporation in any jurisdiction where it is not so qualified or to
consent to general service of process in any such jurisdiction, and do any and
all other acts or things reasonably necessary or advisable to enable the offer
and sale in such jurisdictions of the Registrable Securities covered by such
Registration Statement;

(g) upon the occurrence of any event contemplated by Section 6.4(b)(v) above,
except for such times as the Company is permitted hereunder to suspend the use
of the prospectus forming part of the Registration Statement, the Company shall
use its commercially reasonable efforts to as soon as reasonably practicable
prepare a post-effective amendment to the Registration Statement or a supplement
to the related prospectus, or file any other required document so that, as
thereafter delivered to purchasers of the Registrable Securities included
therein, the prospectus will not include any untrue statement of a material fact
or omit to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;

(h) otherwise use its commercially reasonable efforts to comply in all material
respects with all applicable rules and regulations of the SEC which could affect
the sale of the Registrable Securities;

(i) use its commercially reasonable efforts to cause all Registrable Securities
to be listed on each securities exchange or market, if any, on which equity
securities issued by the Company have been listed;

(j) use its commercially reasonable efforts to take all other steps necessary to
effect the registration of the Registrable Securities contemplated hereby and to
enable the Holders to sell Registrable Securities under Rule 144;

(k) provide to each Purchaser and its representatives, if requested, the
opportunity to conduct a reasonable inquiry of the Company’s financial and other
records during normal business hours and make available on reasonable prior
notice and during normal business hours its officers, directors and employees
for questions regarding information which such Purchaser may reasonably request
in order to fulfill any due diligence obligation on its part; and

(l) permit a single counsel for the Purchasers to review the Registration
Statement and all amendments and supplements thereto, within two Business Days
prior to the filing thereof with the Commission;

provided that, in the case of clauses (k) and (l) above, the Company shall not
be required (A) to delay the filing of the Registration Statement or any
amendment or supplement thereto as a result of any ongoing diligence inquiry by
or on behalf of a Holder or to receive any comments to the Registration
Statement or any amendment or supplement thereto by or on behalf of a Holder if
such inquiry or comments would require or result in a delay in the filing of
such Registration Statement, amendment or supplement, as the case may be, or
(B) to provide, and shall not provide, any Purchaser or its representatives with
material, non-public information unless such Purchaser agrees to receive such
information and enters into a written confidentiality agreement with the Company
in a form reasonably acceptable to the Company.

Section 6.5 Certain Limitations. The Holders shall have no right to take any
action to restrain, enjoin or otherwise delay any registration pursuant to
Section 6.1 hereof as a result of any controversy that may arise with respect to
the interpretation or implementation of this Agreement.

Section 6.6 Indemnity. (a) To the extent permitted by law, the Company shall
indemnify each Holder and each person controlling such Holder within the meaning
of Section 15 of the Securities Act, with respect to which any registration that
has been effected pursuant to this Agreement, against all claims, losses,
damages and liabilities (or action in respect thereof), including any of the
foregoing incurred in settlement of any litigation, commenced or threatened
(subject to Section 6.6(c) below), arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in the
Registration Statement, prospectus, any amendment or supplement thereof, or
other document incident to any such registration, qualification or compliance or
based on any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in light of the circumstances in which they were made, or any
violation by the Company of any rule or regulation promulgated by the Securities
Act applicable to the Company and relating to any action or inaction required of
the Company in connection with any such registration, qualification or
compliance, and will reimburse each Holder and each person controlling such
Holder, for reasonable legal and other out-of-pocket expenses reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability or action as incurred; provided that the Company will not be
liable in any such case to the extent that any untrue statement or omission or
allegation thereof is made in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Holder for use in
preparation of such Registration Statement, prospectus, amendment or supplement;
provided further that the Company will not be liable in any such case where the
claim, loss, damage or liability arises out of or is related to the failure of
such Holder to comply with the covenants and agreements contained in this
Agreement respecting sales of Registrable Securities, and except that the
foregoing indemnity agreement is subject to the condition that, insofar as it
relates to any such untrue statement or alleged untrue statement or omission or
alleged omission made in the preliminary prospectus but eliminated or remedied
in the amended prospectus on file with the SEC at the time the Registration
Statement becomes effective or in the amended prospectus filed with the SEC
pursuant to Rule 424(b) or in the prospectus subject to completion under
Rule 434 of the Securities Act, which together meet the requirements of Section
10(a) of the Securities Act (the “Final Prospectus”), such indemnity shall not
inure to the benefit of any such Holder or any such controlling person, if a
copy of the Final Prospectus furnished by the Company to the Holder for delivery
was not furnished to the person or entity asserting the loss, liability, claim
or damage at or prior to the time such furnishing is required by the Securities
Act and the Final Prospectus would have cured the defect giving rise to such
loss, liability, claim or damage.

(b) Each Holder will severally, and not jointly, indemnify the Company, each of
its directors and officers, and each person who controls the Company within the
meaning of Section 15 of the Securities Act, against all claims, losses, damages
and liabilities (or actions in respect thereof), including any of the foregoing
incurred in settlement of any litigation, commenced or threatened (subject to
Section 6.6(c) below), arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in the Registration
Statement, prospectus, or any amendment or supplement thereof, incident to any
such registration, or based on any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in light of the circumstances in which they
were made, and will reimburse the Company, such directors and officers, and each
person controlling the Company for reasonable legal and any other expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, liability or action as incurred, in each case to the
extent, but only to the extent, that such untrue statement or omission or
allegation thereof is made in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the Holder for use in
preparation of the Registration Statement, prospectus, amendment or supplement;
provided that the indemnity shall not apply to the extent that such claim, loss,
damage or liability results from the fact that a current copy of the prospectus
was not made available to the person or entity asserting the loss, liability,
claim or damage at or prior to the time such furnishing is required by the
Securities Act and the Final Prospectus would have cured the defect giving rise
to such loss, claim, damage or liability. Notwithstanding the foregoing, a
Holder’s aggregate liability pursuant to this subsection (b) shall be limited to
the net amount received by the Holder from the sale of the Registrable
Securities giving rise to such claims, losses, damages and liabilities (and
actions in respect thereof).

(c) Each party entitled to indemnification under this Section 6.6 (the
“Indemnified Party”) shall give notice to the party required to provide
indemnification (the “Indemnifying Party”) promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party (at its expense) to assume the defense of any such
claim or any litigation resulting therefrom; provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld or delayed), and the Indemnified Party may participate
in such defense at such Indemnified Party’s expense; provided further that the
failure of any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this Agreement, unless
such failure is materially prejudicial to the Indemnifying Party in defending
such claim or litigation. An Indemnifying Party shall not be liable for any
settlement of an action or claim effected without its written consent (which
consent will not be unreasonably withheld or delayed). No Indemnifying Party, in
its defense of any such claim or litigation, shall, except with the consent
(such consent not to be unreasonably withheld or delayed) of the 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.

(d) If the indemnification provided for in this Section 6.6 is held by a court
of competent jurisdiction to be unavailable to an Indemnified Party or is
insufficient to hold such Indemnified Party harmless with respect to any loss,
liability, claim, damage or expense referred to therein, then the Indemnifying
Party shall contribute to the amount paid or payable by such Indemnified Party
as a result of such loss, liability, claim, damage or expense 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
statements or omissions which resulted in such loss, liability, claim, damage or
expense as well as any other relevant equitable considerations. The relative
fault of the Indemnifying Party and of the Indemnified Party shall be determined
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. Notwithstanding the foregoing,
a Holder’s aggregate liability pursuant to this subsection (d) shall be limited
to the net amount received by the Holder from the sale of Registrable Securities
giving rise to such loss, liability, claim, damage or expense (or actions in
respect thereof) less all other amounts paid as damages in respect thereto.

Section 6.7 Additional Covenants and Agreements of the Holders. (a) Each Holder
agrees that, upon receipt of any notice from the Company of the happening of any
event requiring the preparation of a supplement or amendment to a prospectus
relating to Registrable Securities so that, as thereafter delivered to the
Holders, such prospectus shall not contain an untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, each Holder will
forthwith discontinue disposition of Registrable Securities pursuant to the
Registration Statement and prospectus contemplated by Section 6.1 until its
receipt of copies of the supplemented or amended prospectus from the Company
and, if so directed by the Company, each Holder shall deliver to the Company all
copies, other than permanent file copies then in such Holder’s possession, of
the prospectus covering such Registrable Securities current at the time of
receipt of such notice.

(b) Each Holder shall suspend, upon request of the Company, any disposition of
Registrable Securities pursuant to the Registration Statement and prospectus
contemplated by Section 6.1 during no more than two periods of no more than 30
calendar days each during any 12-month period to the extent that the Board of
Directors of the Company determines in good faith that the sale of Registrable
Securities under the Registration Statement would be reasonably likely to cause
a violation of the Securities Act or Exchange Act.

(c) As a condition to the inclusion of its Registrable Securities, each Holder
shall furnish to the Company such information regarding such Holder and the
distribution proposed by such Holder as the Company may reasonably request in
writing, including completing a Registration Statement questionnaire in the form
provided by the Company, or as shall be required in connection with any
registration referred to in this Article 6.

(d) Each Holder hereby covenants with the Company (i) not to make any sale of
the Registrable Securities without effectively causing the prospectus delivery
requirements under the Securities Act to be satisfied, and (ii) if such
Registrable Securities are to be sold by any method or in any transaction other
than on a national securities exchange, Nasdaq or in the over-the-counter
market, in privately negotiated transactions, or in a combination of such
methods, to notify the Company at least five Business Days prior to the date on
which the Holder first offers to sell any such Registrable Securities.

(e) Each Holder acknowledges and agrees that the Registrable Securities sold
pursuant to the Registration Statement are not transferable on the books of the
Company unless the stock certificate submitted to the transfer agent evidencing
such Registrable Securities is accompanied by a certificate reasonably
satisfactory to the Company to the effect that (i) the Registrable Securities
have been sold in accordance with such Registration Statement and (ii) the
requirement of delivering a current prospectus has been satisfied.

(f) Each Holder agrees not to take any action with respect to any distribution
deemed to be made pursuant to such Registration Statement which would constitute
a violation of Regulation M under the Exchange Act or any other applicable rule,
regulation or law.

(g) At the end of the Registration Period, the Holders shall discontinue sales
of shares pursuant to such Registration Statement upon receipt of notice from
the Company of its intention to remove from registration the shares covered by
such Registration Statement which remain unsold, and such Holders shall notify
the Company of the number of shares registered which remain unsold immediately
upon receipt of such notice from the Company.

Section 6.8 Additional Covenants and Agreements of the Company. With a view to
making available to the Holders the benefits of certain rules and regulations of
the SEC which at any time permit the sale of the Registrable Securities to the
public without registration, so long as the Holders still own Registrable
Securities, the Company shall use its reasonable best efforts to:

(a) make and keep public information available, as those terms are understood
and defined in Rule 144 under the Securities Act, at all times;

(b) file with the SEC in a timely manner all reports and other documents
required of the Company under the Exchange Act; and

(c) so long as a Holder owns any Registrable Securities, furnish to such Holder,
upon any reasonable request, a written statement by the Company as to its
compliance with Rule 144 under the Securities Act, and of the Exchange Act, a
copy of the most recent annual or quarterly report of the Company, and such
other reports and documents of the Company as such Holder may reasonably request
in availing itself of any rule or regulation of the SEC allowing a Holder to
sell any such securities without registration.

Section 6.9 Assignment of Registration Rights. The rights to cause the Company
to register Registrable Securities granted to the Holders by the Company under
Section 6.1 may be assigned by a Holder in connection with a transfer by such
Holder of all or a portion of its Registrable Securities, provided, however,
that (i) such transfer complies with all applicable securities laws; (ii) such
Holder gives prior written notice to the Company; and (iii) such transferee
agrees in writing to comply with the terms and provisions of this Agreement, and
has provided the Company with a completed Registration Statement Questionnaire
in such form as is reasonably requested by the Company. Except as specifically
permitted by this Section 6.9, the rights of a Holder with respect to
Registrable Securities as set out herein shall not be transferable to any other
Person, and any attempted transfer shall cause all rights of such Holder therein
to be forfeited.

Section 6.10 Waiver of Registration Rights. The rights of any Holder under any
provision of this Article 6 may be waived (either generally or in a particular
instance, either retroactively or prospectively and either for a specified
period of time or indefinitely) or amended by an instrument in writing signed by
Holders holding not less than a majority of the Registrable Securities
(including Warrant Shares issuable upon exercise of the Warrants); provided,
however, that no consideration shall be offered or paid to any person to amend
or consent to a waiver or modification of any provision of this Section 6 unless
the same consideration also is offered to all Holders of Registrable Securities.

ARTICLE VII

Definitions

Section 7.1 Definitions. The following capitalized terms have the following
meanings:

“Affiliate” means, with respect to any Person (as defined below), any other
Person controlling, controlled by or under direct or indirect common control
with such Person (for the purposes of this definition “control,” when used with
respect to any specified Person, shall mean the power to direct the management
and policies of such person, directly or indirectly, whether through ownership
of voting securities, by contract or otherwise; and the terms “controlling” and
“controlled” shall have meanings correlative to the foregoing).

“Business Day” means a day Monday through Friday on which banks are generally
open for business in New York City.

“Bylaws” has the meaning set forth in Section 2.3.

“Certificate of Incorporation” has the meaning set forth in Section 2.3.

“Closing” has the meaning set forth in Section 1.3.

“Closing Date” has the meaning set forth in Section 1.3.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Filing Date” has the meaning set forth in Section 6.1.

“Final Prospectus” has the meaning set forth in Section 6.6(a).

“Financial Statements” means the financial statements of the Company included in
the SEC Documents.

“Holder” means any person holding Registrable Securities or any person to whom
the rights under Article 6 have been transferred in accordance with Section 6.9
hereof.

“Indemnified Party” has the meaning set forth in Section 6.6(c).

“Indemnifying Party” has the meaning set forth in Section 6.6(c).

“Intellectual Property” has the meaning set forth in Section 2.8.

“Material Adverse Effect” means a material adverse effect on (a) the business,
operations, assets, financial condition or prospects of the Company, taken as a
whole, or (b) the ability of the Company to perform its obligations pursuant to
the transactions contemplated by this Agreement.

“Nasdaq” means The Nasdaq National Market.

“Offering” means the private placement of the Company’s Securities contemplated
by this Agreement.

“Penalty Period” has the meaning set forth in Section 6.3.

“Person” means any person, individual, corporation, limited liability company,
partnership, trust or other nongovernmental entity or any governmental agency,
court, authority or other body (whether foreign, federal, state, local or
otherwise).

“Placement Agents” means, collectively, Banc of America Securities LLC and
Fortis Securities Inc.

“Purchasers” mean the Purchasers whose names are set forth on the signature
pages of this Agreement, and their permitted transferees.

“Purchase Price” has the meaning set forth in Section 1.1.

“register,” “registered” and “registration” refer to the registration effected
by preparing and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of the effectiveness of such
registration statement.

“Registrable Securities” means (i) the Shares and (ii) the Warrant Shares;
provided, however, that securities shall only be treated as Registrable
Securities if and only for so long as they (A) have not been disposed of
pursuant to a registration statement declared effective by the SEC, (B) have not
been sold in a transaction exempt from the registration and prospectus delivery
requirements of the Securities Act so that all transfer restrictions and
restrictive legends with respect thereto are removed upon the consummation of
such sale or (C) are held by a Holder or a permitted transferee pursuant to
Section 6.9.

“Registration Default” has the meaning set forth in Section 6.3.

“Registration Expenses” means all expenses incurred by the Company in complying
with Section 6.1 hereof, including, without limitation, all registration,
qualification and filing fees, printing expenses, escrow fees, fees and expenses
of counsel for the Company, blue sky fees and expenses and the expense of any
special audits incident to or required by any such registration (but excluding
the fees of legal counsel for any Holder).

“Registration Statement” has the meaning set forth in Section 6.1.

“Registration Period” has the meaning set forth in Section 6.4(a).

“Rule 144” means Rule 144 promulgated under the Securities Act, or any successor
rule.

“SEC” means the United States Securities and Exchange Commission.

“SEC Documents” has the meaning set forth in Section 2.6.

“Securities” has the meaning set forth in Section 1.1.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations thereunder, or any similar successor statute.

“Selling Expenses” means all selling commissions applicable to the sale of
Registrable Securities and all fees and expenses of legal counsel for any
Holder.

“Shares” has the meaning set forth in Section 1.1.

“Warrant Shares” has the meaning set forth in Section 2.4.

“Warrants” has the meaning set forth in Section 1.1.

Section 7.2 Certain Interpretations. Except where expressly stated otherwise in
this Agreement, the following rules of interpretation apply to this Agreement:
(i) “or” is not exclusive and “include”, “includes” and “including” are not
limiting; (ii) definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms; (iii) references to an
agreement or instrument mean such agreement or instrument as from time to time
amended, modified or supplemented; (iv) references to a Person are also to its
permitted successors and assigns; (v) references to an “Article”, “Section”,
“Subsection”, “Exhibit” or “Schedule” refer to an Article of, a Section or
Subsection of, or an Exhibit or Schedule to, this Agreement; and (vi) words
importing the masculine gender include the feminine or neuter and, in each case,
vice versa.

ARTICLE VIII

Governing Law; Miscellaneous

Section 8.1 Governing Law; Jurisdiction; Waiver of Jury Trial. This Agreement
will be governed by and interpreted in accordance with the laws of the State of
New York without regard to the principles of conflict of laws. Each of the
parties hereto irrevocably submits and consents to the exclusive jurisdiction of
the courts of the State of New York located in New York County and the United
States District Court for the Southern District of New York for the purpose of
any suit, action, proceeding or judgment relating to or arising out of this
Agreement and the transactions contemplated hereby. Each party hereto
irrevocably waives any objection to the laying of venue of any such suit, action
or proceeding brought in such courts and irrevocably waives any claim that any
such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A
TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS
THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

Section 8.2 Counterparts; Signatures by Facsimile. This Agreement may be
executed in two or more counterparts, all of which are considered one and the
same agreement and will become effective when counterparts have been signed by
each party and delivered to the other parties. This Agreement, once executed by
a party, may be delivered to the other parties hereto by facsimile transmission
of a copy of this Agreement bearing the signature of the party so delivering
this Agreement.

Section 8.3 Headings. The headings of this Agreement are for convenience of
reference only, are not part of this Agreement and do not affect its
interpretation.

Section 8.4 Severability. If any provision of this Agreement is invalid or
unenforceable under any applicable statute or rule of law, then such provision
will be deemed modified in order to conform with such statute or rule of law.
Any provision hereof that may prove invalid or unenforceable under any law will
not affect the validity or enforceability of any other provision hereof.

Section 8.5 Entire Agreement; Amendments. This Agreement (including all
schedules and exhibits hereto) and any confidentiality agreement entered into
between the Company and a Purchaser (which confidentiality agreement shall
continue to be in full force and effect) constitutes the entire agreement among
the parties hereto with respect to the subject matter hereof and thereof. There
are no restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein or therein. This Agreement supersedes all prior
agreements and understandings among the parties hereto with respect to the
subject matter hereof. No provision of this Agreement may be waived or amended
other than by an instrument in writing signed by the party to be charged with
enforcement. Any amendment or waiver effected in accordance with this
Section 8.5 shall be binding upon each holder of any Securities purchased under
this Agreement at the time outstanding (including securities into which such
Securities are convertible and for which such Securities are exercisable), each
future holder of all such securities, and the Company.

Section 8.6 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 email, telex or facsimile if
sent during normal business hours of the recipient, if not, then on the next
business day, (c) five days after having been sent by registered or certified
mail, return receipt requested, postage prepaid, or (d) one business day after
deposit with a nationally recognized overnight courier, specifying next day
delivery, with written verification of receipt. The addresses for such
communications are:

      If to the Company: Memory Pharmaceuticals Corp.

     
100 Philips Parkway
Montvale, NJ 07645
 

 
    Attn: Vice President — Legal Affairs

 
   
With a copy to:
  Covington & Burling

1330 Avenue of the Americas

New York, NY 10019

Attn: Ellen B. Corenswet

If to a Purchaser: To the address set forth immediately below such Purchaser’s
name on the signature pages hereto. Each party will provide ten days’ advance
written notice to the other parties of any change in its address.

Section 8.7 Successors and Assigns. This Agreement is binding upon and inures to
the benefit of the parties and their successors and assigns. The Company will
not assign this Agreement or any rights or obligations hereunder without the
prior written consent of the Purchasers, and no Purchaser may assign this
Agreement or any rights or obligations hereunder without the prior written
consent of the Company, except as permitted in accordance with Section 6.9
hereof.

Section 8.8 Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto, their respective permitted successors and assigns
and the Placement Agents, and is not for the benefit of, nor may any provision
hereof be enforced by, any other person.

Section 8.9 Further Assurances. Each party will do and perform, or cause to be
done and performed, all such further acts and things, and will execute and
deliver all other agreements, certificates, instruments and documents, as
another party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

Section 8.10 No Strict Construction. The language used in this Agreement is
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party.

Section 8.11 Equitable Relief. The Company recognizes that if it fails to
perform or discharge any of its obligations under this Agreement, any remedy at
law may prove to be inadequate relief to the Purchasers. The Company therefore
agrees that the Purchasers are entitled to seek temporary and permanent
injunctive relief in any such case. Each Purchaser also recognizes that, if it
fails to perform or discharge any of its obligations under this Agreement, any
remedy at law may prove to be inadequate relief to the Company. Each Purchaser
therefore agrees that the Company is entitled to seek temporary and permanent
injunctive relief in any such case.

Section 8.12 Survival of Representations and Warranties. Notwithstanding any
investigation made by any party to this Agreement, all representations and
warranties made by the Company and the Purchasers herein shall survive for a
period of one year following the date hereof.

Section 8.13 Independent Nature of Purchasers’ Obligations and Rights. The
obligations of each Purchaser under this Agreement are several and not joint
with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser under this Agreement. Nothing contained herein and no action taken by
any Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as
a partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert or as
a group, or are deemed affiliates (as such term is defined under the Exchange
Act) with respect to such obligations or the transactions contemplated by this
Agreement. Each Purchaser shall be entitled to independently protect and enforce
its rights, including without limitation the rights arising out of this
Agreement, and it shall not be necessary for any other Purchaser to be joined as
an additional party in any proceeding for such purpose.

[Signature Page Follows]

1

In Witness Whereof, the undersigned Purchasers and the Company have caused this
Agreement to be duly executed as of the date first above written.

Memory Pharmaceuticals Corp.

By: /s/ James R. Sulat
Name: James R. Sulat
Title: President and Chief Executive Officer

Purchaser

(investor name)

By:

(signature)

(print name and title)

Address:

Facsimile:

2

EXHIBIT A

SCHEDULE OF PURCHASERS

                                              Aggregate Purchase Purchaser  
Shares   Warrants   Price
Oxford Bioscience Partners II (Annex) L.P.
    526,316       184,210     $ 1,000,000.40  
Oxford Bioscience Partners IV L.P.
    2,605,437       911,902     $ 4,950,330.30  
mRNA Fund II L.P.
    26,142       9,149     $ 49,669.80  
Special Situations Fund III, LP
    1,684,211       589,473     $ 3,200,000.90  
Special Situations Cayman Fund, LP
    421,053       147,368     $ 800,000.70  
Special Situations Private Equity Fund LP
    789,474       276,315     $ 1,500,000.60  
Special Situations Life Sciences Fund LP
    263,158       92,105     $ 500,000.20  
SF Capital Partners Ltd.
    1,578,948       552,631     $ 3,000,001.20  
Venrock Associates
    323,684       113,289     $ 614,999.60  
Venrock Associates II, L.P.
    465,789       163,026     $ 884,999.10  
Anthony B. Evnin
    184,211       64,473     $ 350,000.90  
Alta California Partners II, L.P.
    259,875       90,956     $ 493,762.50  
Alta California Partners II, L.P. — New Pool
    526,316       184,210     $ 1,000,000.40  
Alta Embarcadero Partners II, LLC
    3,283       1,149     $ 6,237.70  
SRB Greenway Capital, L.P.
    42,684       14,939     $ 81,099.60  
SRB Greenway Capital (QP), L.P.
    297,948       104,281     $ 566,101.20  
SRB Greenway Offshore Operating Fund L.P.
    27,790       9,726     $ 52,801.00  
Walker Smith Capital, L.P.
    17,947       6,281     $ 34,099.30  
Walker Smith Capital (QP) L.P.
    103,105       36,086     $ 195,899.50  
Walker Smith International Fund, Ltd.
    142,105       49,736     $ 269,999.50  
Capital Ventures International
    527,000       184,450     $ 1,001,300.00  
Adviesbeheer GIMV Life Sciences NV
    78,947       27,631     $ 149,999.30  
GIMV NV
    447,369       156,579     $ 850,001.10  
GLS LP Investment 1 Limited
    526,316       184,210     $ 1,000,000.40  
Smithfield Fiduciary LLC
    526,316       184,210     $ 1,000,000.40  
RAQ, LLC
    157,895       55,263     $ 300,000.50  
Aries Domestic Fund, L.P.
    210,000       73,500     $ 399,000.00  
Aries Domestic Fund II, L.P.
    36,842       12,894     $ 69,999.80  
Aries Master Fund II
    121,579       42,552     $ 231,000.10  
RHP Master Fund, Ltd.
    526,316       184,210     $ 1,000,000.40  
Enable Growth Partners L.P.
    340,000       119,000     $ 646,000.00  
Enable Opportunity Partners L.P.
    54,736       19,157     $ 103,998.40  
WPG-Farber Fund, L.P.
    154,000       53,900     $ 292,600.00  
WPG-Farber QP Fund, L.P.
    59,675       20,886     $ 113,382.50  
WPG-Farber Institutional Fund L.P.
    51,425       17,998     $ 97,707.50  
WPG-Farber Overseas, L.P.
    9,900       3,465     $ 18,810.00  
D3 LifeScience Ltd.
    131,579       46,052     $ 250,000.10  
D3 LifeScience Select Ltd.
    131,579       46,052     $ 250,000.10  
Southridge Partners LP
    263,158       92,105     $ 500,000.20  
Kings Road Investments, Ltd.
    263,158       92,105     $ 500,000.20  
 
                       
 
                  Aggregate Purchase
Purchaser
  Shares   Warrants   Price
 
                       
Nite Capital LP
    157,895       55,263     $ 300,000.50  
Keyes / Sulat Revocable Trust
    157,895       55,263     $ 300,000.50  
Walter Gilbert
    52,632       18,421     $ 100,000.80  
Anthony Scullion
    39,474       13,815     $ 75,000.60  
David A. Lowe
    26,316       9,210     $ 50,000.40  
Michael E. Meyers
    26,316       9,210     $ 50,000.40  
Robert I. Kriebel
    5,000       1,750     $ 9,500.00  
Banc of America Strategic Investments Corporation
    591,491       207,021     $ 1,123,832.90  
Fortis Securities LLC
    147,873       51,755     $ 280,958.70  
Total
    16,112,158       5,639,232     $ 30,613,100.20  

3

THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED OR THE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES. THE SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER APPLICABLE SECURITIES LAWS OR
UNLESS OFFERED, SOLD, PLEDGED, HYPOTHECATED OR TRANSFERRED PURSUANT TO AN
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS. THE
COMPANY SHALL BE ENTITLED TO REQUIRE AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED TO THE EXTENT THAT AN OPINION IS
REQUIRED PURSUANT TO THE AGREEMENT UNDER WHICH THE SECURITIES WERE ISSUED.

MEMORY PHARMACEUTICALS CORP.

WARRANT TO PURCHASE COMMON STOCK

No. W-     September 23, 2005

Void After September 22, 2010

This Certifies That, for value received,      , with its principal office at
     , or its successors and permitted assigns (the “Holder”), is entitled to
subscribe for and purchase at the Exercise Price (defined below) from Memory
Pharmaceuticals Corp., a Delaware corporation, with its principal office at 100
Philips Parkway, Montvale, New Jersey 07645 (the “Company”) up to      shares of
the common stock of the Company, par value $.001 per share (the “Common Stock”),
subject to adjustment as provided herein. This Warrant is one of a series of
Warrants being issued pursuant to the terms of the Securities Purchase
Agreement, dated September 21, 2005, among the Company and the original Holder
of this Warrant and the other parties named therein (the “Purchase Agreement”).
Capitalized terms not otherwise defined herein shall have the respective
meanings ascribed to such terms in the Purchase Agreement.

1. Definitions. As used herein, the following terms shall have the meanings
ascribed to them below:

(a) “Exercise Period” shall mean the period commencing 180 days after the date
hereof and ending September 22, 2010 at 5:00 p.m., unless sooner exercised or
terminated as provided below.

(b) “Exercise Price” shall mean $2.22 per share, subject to adjustment pursuant
to Section 5 below.

(c) “Warrant Shares” shall mean the shares of the Common Stock issued upon
exercise of this Warrant, subject to adjustment pursuant to the terms herein,
including but not limited to adjustment pursuant to Section 5 below.

2. Exercise of Warrant.

2.1 Method of Exercise. The rights represented by this Warrant may be exercised
in whole or in part at any time during the Exercise Period, by delivery of the
following to the Company at its address set forth above (or at such other
address as it may designate by notice in writing to the Holder):

(a) an executed Notice of Exercise in the form attached hereto;

(b) payment of the Exercise Price either (i) in cash or by check or wire
transfer of immediately available funds, or (ii) pursuant to a Cashless
Exercise, as described below; and

(c) this Warrant.

Upon the exercise of the rights represented by this Warrant, shares of Common
Stock shall be issued for the Warrant Shares so purchased, and shall be
registered in the name of the Holder or persons affiliated with the Holder, if
the Holder so designates, within a reasonable time after the rights represented
by this Warrant shall have been so exercised and shall be issued in certificate
form and delivered to the Holder, if so requested.

The person in whose name any Warrant Shares are to be issued upon exercise of
this Warrant shall be deemed to have become the holder of record of such shares
on the date on which this Warrant was surrendered and payment of the Exercise
Price was made, irrespective of the date of issuance of the shares of Common
Stock, except that, if the date of such surrender and payment is a date when the
stock transfer books of the Company are closed, such person shall be deemed to
have become the holder of such shares at the close of business on the next
succeeding date on which the stock transfer books are open.

2.2 Cashless Exercise. Notwithstanding any provisions herein to the contrary,
if, at any time during the Exercise Period, the Current Market Price (as defined
below) of one share of Common Stock is greater than the Exercise Price (at the
date of calculation as set forth below), in lieu of exercising this Warrant by
payment of cash, the Holder may exercise this Warrant by a cashless exercise by
surrender of this Warrant at the principal office of the Company together with
the properly endorsed Notice of Exercise and the Company shall issue to the
Holder a number of shares of Common Stock computed using the following formula:

         
 
  X = Y (B-A)  

 
             

 
       
Where:
  B
X =  
the number of shares of Common Stock to be issued to the Holder.

      Y = the number of shares of Common Stock purchasable upon exercise of all
of the Warrant or, if only a portion of the Warrant is being exercised, the
portion of the Warrant being exercised.

     
A =
B =
  the Exercise Price.
the Current Market Price of one share of Common Stock.

      “Current Market Price” means on any particular date:

(a) if the Common Stock is traded on the Nasdaq SmallCap Market or the Nasdaq
National Market, the average of the closing prices of the Common Stock on such
market over the five trading days ending immediately prior to the applicable
date of valuation;

(b) if the Common Stock is traded on any registered national stock exchange but
is not traded on the Nasdaq SmallCap Market or the Nasdaq National Market, the
average of the closing prices of the Common Stock on such exchange over the five
trading days ending immediately prior to the applicable date of valuation

(c) if the Common Stock is traded over-the-counter, but not on the Nasdaq
SmallCap Market, the Nasdaq National Market or a registered national stock
exchange, the average of the closing bid prices over the 30-day period ending
immediately prior to the applicable date of valuation; and

(d) if there is no active public market for the Common Stock, the value thereof,
as determined in good faith by the Board of Directors of the Company upon due
consideration of the proposed determination thereof by the Holder.

2.3 Partial Exercise. If this Warrant is exercised in part only, the Company
shall, upon surrender of this Warrant, execute and deliver, within 10 days of
the date of exercise, a new Warrant evidencing the rights of the Holder, or such
other person as shall be designated in the Notice of Exercise, to purchase the
balance of the Warrant Shares purchasable hereunder. In no event shall this
Warrant be exercised for a fractional Warrant Share, and the Company shall not
distribute a Warrant exercisable for a fractional Warrant Share. Fractional
Warrant Shares shall be treated as provided in Section 6 hereof.

2.4 Delivery. Certificates for shares purchased hereunder shall be transmitted
by the transfer agent of the Company to the Holder by crediting the account of
the Holder’s prime broker with the Depository Trust Company through its Deposit
Withdrawal Agent Commission system if the Company is a participant in such
system (and so long as the legend may be removed in accordance with
Section 3.8(b) of the Purchase Agreement), and otherwise by physical delivery to
the address specified by the Holder in the Notice of Exercise.

3. Covenants of the Company.

3.1 Covenants as to Warrant Shares. The Company covenants and agrees that if at
any time during the Exercise Period the number of authorized but unissued shares
of Common Stock shall not be sufficient to permit exercise of this Warrant, the
Company will take such corporate action as may, in the opinion of its counsel,
be necessary to increase its authorized but unissued shares of Common Stock (or
other securities as provided herein) to such number of shares as shall be
sufficient for such purposes.

3.2 No Impairment. Except and to the extent as waived or consented to by the
Holder or otherwise in accordance with Section 10 hereof, the Company will not,
by amendment of its Certificate of Incorporation (as such may be amended from
time to time), or through any means, avoid or seek to avoid the observance or
performance of any of the terms to be observed or performed hereunder by the
Company, but will at all times in good faith assist in the carrying out of all
the provisions of this Warrant and in the taking of all such action as may be
necessary or appropriate in order to protect the exercise rights of the Holder
against impairment.

3.3 Notices of Record Date. In the event of any taking by the Company of a
record of the holders of any class of securities for the purpose of determining
the holders thereof who are entitled to receive any dividend (other than a cash
dividend which is the same as cash dividends paid in previous quarters) or other
distribution, the Company shall mail to the Holder, at least ten days prior to
the date specified herein, a notice specifying the date on which any such record
is to be taken for the purpose of such dividend or distribution.

4. Representations of Holder.

4.1 Acquisition of Warrant for Personal Account. The Holder represents and
warrants that it is acquiring the Warrant and the Warrant Shares solely for its
account and not with a present view toward the public or distribution of said
Warrant or Warrant Shares or any part thereof and has no intention of selling or
distributing said Warrant or Warrant Shares or any arrangement or understanding
with any other persons regarding the sale or distribution of said Warrant or,
except in accordance with the provisions of Article 6 of the Purchase Agreement,
the Warrant Shares, and except as would not result in a violation of the
Securities Act. The Holder will not, directly or indirectly, offer, sell,
pledge, transfer or otherwise dispose of (or solicit any offers to buy, purchase
or otherwise acquire or take a pledge of) the Warrant except in accordance with
the Securities Act and will not, directly or indirectly, offer, sell, pledge,
transfer or otherwise dispose of (or solicit any offers to buy, purchase or
otherwise acquire or take a pledge of) the Warrant Shares except in accordance
with the provisions of Article 6 of the Purchase Agreement or pursuant to and in
accordance with the Securities Act.

4.2 Securities Are Not Registered.

(a) The Holder understands that the offer and sale of the Warrant or the Warrant
Shares have not been registered under the Securities Act on the basis that no
distribution or public offering of the stock of the Company is to be effected.
The Holder realizes that the basis for the exemption may not be present if,
notwithstanding its representations, the Holder 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. The Holder has no
such present intention.

(b) The Holder recognizes that the Warrant and the Warrant Shares must be held
indefinitely unless they are subsequently registered under the Securities Act or
an exemption from such registration is available. The Holder recognizes that the
Company has no obligation to register the Warrant or, except as provided in the
Purchase Agreement, the Warrant Shares, or to comply with any exemption from
such registration.

(c) The Holder is aware that neither the Warrant nor the Warrant Shares may 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 the Company, 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. Holder is aware that any such sale made in
reliance on Rule 144, if Rule 144 is available, may be made only in accordance
with the terms of Rule 144.

4.3 Disposition of Warrant and Warrant Shares.

(a) The Holder understands that the Warrants and the Warrant Shares have not
been and are not being registered under the Securities Act (other than as
contemplated in Article 6 of the Purchase Agreement) or any applicable state
securities laws and, consequently, the Purchaser may have to bear the risk of
owning the Warrant and the Warrant Shares for an indefinite period of time
because such securities may not be transferred unless (i) the resale of such
securities is registered pursuant to an effective registration statement under
the Securities Act; (ii) the Holder has delivered to the Company an opinion of
counsel (in form, substance and scope reasonably satisfactory to the Company) to
the effect that the Warrants or Warrant Shares to be sold or transferred may be
sold or transferred pursuant to an exemption from such registration; or (iii)
such securities are sold or transferred pursuant to Rule 144

(b) The Holder understands and agrees that all certificates evidencing the
Warrant Shares to be issued to the Holder may bear a legend in substantially the
following form:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES. THE SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER APPLICABLE SECURITIES LAWS, OR
UNLESS OFFERED, SOLD, PLEDGED, HYPOTHECATED OR TRANSFERRED PURSUANT TO AN
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS. THE
COMPANY SHALL BE ENTITLED TO REQUIRE AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED TO THE EXTENT THAT SUCH OPINION
IS REQUIRED PURSUANT TO THAT CERTAIN SECURITIES PURCHASE AGREEMENT UNDER WHICH
THE SECURITIES WERE ISSUED.

5. Adjustment of Exercise Price. In the event of changes in the outstanding
Common Stock of the Company by reason of stock dividends, split-ups,
recapitalizations, reclassifications, combinations or exchanges of shares,
separations, reorganizations, liquidations, or the like (other than as set forth
in Section 7), the number and class of shares available under the Warrant in the
aggregate and the Exercise Price shall be correspondingly adjusted to give the
Holder, on exercise for the same aggregate Exercise Price, the total number,
class, and kind of shares as the Holder would have owned had the Warrant been
exercised prior to the event and had the Holder continued to hold such shares
until after the event requiring adjustment. The form of this Warrant need not be
changed because of any adjustment in the number, class, and kind of shares
subject to this Warrant. The Company shall promptly provide a certificate from
its Chief Executive Officer notifying the Holder in writing of any adjustment in
the Exercise Price and/or the total number, class, and kind of shares issuable
upon exercise of this Warrant, which certificate shall specify the Exercise
Price and number, class and kind of shares under this Warrant after giving
effect to such adjustment.

6. Fractional Shares. No fractional shares shall be issued upon the exercise of
this Warrant as a consequence of any adjustment pursuant hereto. All Warrant
Shares (including fractions) issuable upon exercise of this Warrant may be
aggregated for purposes of determining whether the exercise would result in the
issuance of any fractional share. If, after aggregation, the exercise would
result in the issuance of a fractional share, the Company shall, in lieu of
issuance of any fractional share, pay the Holder otherwise entitled to such
fraction a sum in cash equal to the product resulting from multiplying the fair
market value of the Common Stock on the date of exercise of the Warrant by such
fraction.

7. Certain Events. In the event of, at any time during the Exercise Period, any
capital reorganization, or any reclassification of the capital stock of the
Company (other than a change in par value or from par value to no par value or
no par value to par value or as a result of a stock dividend or subdivision,
split-up or combination of shares), or the consolidation or merger of the
Company with or into another corporation (other than a merger solely to effect a
reincorporation of the Company into another state), in each case, in which the
stockholders of the Company immediately prior to such capital reorganization,
reclassification, consolidation or merger, will hold less than a majority of the
outstanding shares of the Company or resulting corporation immediately after
such capital reorganization, reclassification, consolidation or merger, or the
sale or other disposition of all or substantially all of the properties and
assets of the Company and its subsidiaries, taken as a whole, in its entirety to
any other person, other than sales or other dispositions that do not require
stockholder approval (each, an “Event”), then, as a condition of such Event,
lawful and adequate provision shall be made whereby each Holder shall thereafter
have the right to purchase and receive upon the basis and upon the terms and
conditions herein specified and in lieu of the Warrant Shares immediately
theretofore issuable upon exercise of the Warrant, such shares of stock,
securities or assets as would have been issuable or payable with respect to or
in exchange for a number of Warrant Shares equal to the number of Warrant Shares
immediately theretofore issuable upon exercise of the Warrant, had such Event
not taken place, and in any such case appropriate provision shall be made with
respect to the rights and interests of each Holder to the end that the
provisions hereof (including, without limitation, provision for adjustment of
the Exercise Price) shall thereafter be applicable, as nearly equivalent as may
be practicable in relation to any shares of stock, securities or assets
thereafter deliverable upon the exercise hereof. The Company shall not effect
any such Event unless prior to or simultaneously with the consummation thereof
the successor corporation (if other than the Company) resulting from such
consolidation or merger, or the corporation purchasing or otherwise acquiring
such assets or other appropriate corporation or entity shall assume the
obligation to deliver to the Holder, at the last address of the Holder appearing
on the books of the Company, such shares of stock, securities or assets as, in
accordance with the foregoing provisions, the Holder may be entitled to
purchase, and the other obligations under this Warrant. The provisions of this
Section 7 shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, sales, transfers or other
dispositions.

8. No Stockholder Rights. This Warrant in and of itself shall not entitle the
Holder to any voting rights or other rights as a stockholder of the Company.

9. Lost, Stolen, Mutilated or Destroyed Warrant. If this Warrant is lost,
stolen, mutilated or destroyed, the Company may, on such terms as to indemnity
or otherwise as it may reasonably impose (which shall, in the case of a
mutilated Warrant, include the surrender thereof), issue a new Warrant of like
denomination and tenor as the Warrant so lost, stolen, mutilated or destroyed.
Any such new Warrant shall constitute an original contractual obligation of the
Company, whether or not the allegedly lost, stolen, mutilated or destroyed
Warrant shall be at any time enforceable by anyone.

10. Modifications and Waiver. This Warrant and any provision hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the Company and (i) Purchasers holding Warrants representing a
majority of the number of Warrant Shares then issuable upon exercise of the then
unexercised Warrants, provided, however, that such modification, amendment or
waiver is made with respect to all unexercised Warrants issued pursuant to the
Purchase Agreement and does not adversely affect the Holder without adversely
affecting all holders of Warrants in a similar manner; or (ii) the Holder.

11. Notices, etc. 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 email, telex or facsimile if
sent during normal business hours of the recipient, if not, then on the next
business day, (c) five days after having been sent by registered or certified
mail, return receipt requested, postage prepaid, or (d) one business day after
deposit with a nationally recognized overnight courier, specifying next day
delivery, with written verification of receipt. All communications shall be sent
to the Company at the address listed on the signature page and to the Holders at
the addresses on the Company records, or at such other address as the Company or
Holder may designate by ten days’ advance written notice to the other party
hereto.

12. Acceptance. Receipt of this Warrant by the Holder shall constitute
acceptance of and agreement to all of the terms and conditions contained herein.

13. Governing Law. This Warrant and all rights, obligations and liabilities
hereunder shall be governed by the laws of the State of New York without regard
to the principles of conflict of laws. The Company and the Holder each
irrevocably submit and consent to the exclusive jurisdiction of the courts of
the State of New York located in New York County and the United States District
Court for the Southern District of New York for the purpose of any suit, action,
proceeding or judgment relating to or arising out of this Warrant. The Company
and the Holder each irrevocably waive any objection to the laying of venue of
any such suit, action or proceeding brought in such courts and irrevocably waive
any claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum. THE COMPANY AND EACH HOLDER WAIVE ANY
RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS WARRANT
AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

14. Descriptive Headings. The descriptive headings of the several paragraphs of
this Warrant are inserted for convenience only and do not constitute a part of
this Warrant. The language in this Warrant shall be construed as to its fair
meaning without regard to which party drafted this Warrant.

15. Severability. The invalidity or unenforceability of any provision of this
Warrant in any jurisdiction shall not affect the validity or enforceability of
such provision in any other jurisdiction, or affect any other provision of this
Warrant, which shall remain in full force and effect.

[Signature Page Follows]

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In Witness Whereof, the Company has caused this Warrant to be executed by its
duly authorized officer as of September 23, 2005.

      Memory Pharmaceuticals Corp.

 
   
By:
 

 
   
Name:
 

 
   
Title:
 

 
   
Address:
  100 Philips Parkway
Montvale, NJ 07645

Attention: President and Chief Executive Officer

Facsimile: (201) 802-7190

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NOTICE OF EXERCISE

TO: Memory Pharmaceuticals Corp.

(1) The undersigned hereby elects to (check one box only):

• purchase      shares of the Common Stock of Memory Pharmaceuticals Corp. (the
“Company”) pursuant to the terms of the attached Warrant, and tenders herewith
payment of the exercise price in full for such shares, together with all
applicable transfer taxes, if any.

• purchase the number of shares of Common Stock of the Company by cashless
exercise pursuant to the terms of the Warrant as shall be issuable upon cashless
exercise of the portion of the Warrant relating to      shares, and shall tender
payment of all applicable transfer taxes, if any.

(2) Please issue a certificate or certificates representing said shares of
Common Stock in the name of the undersigned or in such other name as is
specified below:

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

(Name)

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

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

(Address)

(3) The undersigned represents that (i) the aforesaid shares of Common Stock are
being acquired for the account of the undersigned for investment and not with a
view to, or for resale in connection with, the distribution thereof and that the
undersigned has no present intention of distributing or reselling such shares;
(ii) the undersigned is aware of the Company’s business affairs and financial
condition and has acquired sufficient information about the Company to reach an
informed and knowledgeable decision regarding its investment in the Company;
(iii) the undersigned is experienced in making investments of this type and has
such knowledge and background in financial and business matters that the
undersigned is capable of evaluating the merits and risks of this investment and
protecting the undersigned’s own interests; (iv) the undersigned is aware that
the aforesaid shares of Common Stock may not be sold pursuant to Rule 144
adopted under the Securities Act unless certain conditions are met and until the
undersigned has held the shares for the number of years prescribed by Rule 144,
that among the conditions for use of the Rule is the availability of current
information to the public about the Company and the Company has not made such
information available and has no present plans to do so; and (v) the undersigned
agrees not to make any disposition of all or any part of the aforesaid shares of
Common Stock unless and until there is then in effect a registration statement
under the Securities Act covering such proposed disposition and such disposition
is made in accordance with said registration statement, or the undersigned has
provided the Company with an opinion of counsel satisfactory to the Company,
stating that such registration is not required.

     
(Date)
  (Signature)
(Print name)
 
   

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