Exhibit 10.2

SECURITIES PURCHASE AGREEMENT

This Securities Purchase Agreement, dated as of December 19, 2005 (this
“Agreement”), between Memory Pharmaceuticals Corp., a Delaware corporation (the
“Company”), and The Stanley Medical Research Institute, a nonprofit organization
(the “Purchaser”).

Introduction

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

The Purchaser desires to purchase and the Company desires to sell, upon the
terms and conditions stated in this Agreement, $960,000 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 Purchaser 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 the Purchaser, and the Purchaser will purchase from the
Company, 440,367 shares of Common Stock (the “Shares”) and 154,128 warrants (the
“Warrants”) to purchase shares of Common Stock (the Shares, the Warrants and the
Warrant Shares (as defined below) are referred to collectively as the
“Securities”). The total purchase price for the Securities shall be $960,000
(the “Purchase Price”). The purchase price for each Share and the related
Warrant shall be $2.18 , which is the sum of (i) $2.13, the closing bid price of
the Common Stock as reported on Nasdaq (symbol “MEMY”), as the 4:00 p.m., EST,
closing bid price on the date hereof (the “Stock Purchase Price”), and (ii)
$0.05. For each one Share purchased by the 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 $2.62, which represents 120% of the Stock Purchase
Price, pursuant to a Warrant substantially in the form attached as Exhibit A
hereto.

Section 1.2 Payment. At the Closing, the Purchaser will pay the aggregate
Purchase Price by check payable to the order of the Company. At or promptly
following the Closing, the Company will instruct its transfer agent to deliver a
stock certificate(s) to the Purchasers representing the Shares and will deliver
a Warrant(s) to purchase the Warrant Shares against delivery of the Purchase
Price on the Closing Date.

Section 1.3 Closing Date. The closing of the transaction contemplated by this
Agreement will take place on the date of this Agreement or such other date as
the parties may agree (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 Purchaser.

ARTICLE II
Representations and Warranties of the Company

The Company hereby represents and warrants to the Purchaser 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
September 30, 2005, consisted of 100,000,000 shares of Common Stock, of which
37,213,883 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 and validly issued and are fully paid and nonassessable. Options
and warrants to purchase an aggregate of 9,768,181 shares of Common Stock were
outstanding as of September 30, 2005. Except as disclosed in or contemplated by
the SEC Documents or this Agreement, 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.

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 September 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 September 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   [Reserved]
Section 2.14
  [Reserved]

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. Other than as disclosed in the SEC
Documents or as set forth in this Agreement, no person has the right to require
the Company to register any securities for sale under the Securities Act. 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 the 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 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 transactions
that are not required to be disclosed, 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
Representations and Warranties of the Purchaser

The Purchaser represents and warrants to the Company, 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 Accredited Investor. The Purchaser is an “accredited investor” as
defined in Rule 501(a) of Regulation D promulgated under the Securities Act.

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 the Purchaser or its
representatives or counsel shall modify, amend or affect the 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 a
purchaser that can afford the loss of its 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 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; (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 fifteen (15) Business Days following the delivery by the 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 fifteen (15) 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 fifteen (15) 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 State of [Maryland].

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.

ARTICLE IV
Covenants

     
Section 4.1
  [Reserved]1
 
   
Section 4.2
  [Reserved]
 
   
Section 4.3
  [Reserved]
 
   
Section 4.4
  [Reserved]

Section 4.5 Sales by Purchaser. The 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.
The Purchaser will not 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 [Reserved]

Section 4.8 “Market Stand-Off” Agreement. The Purchaser hereby agrees that it
will not, without the prior written consent of the managing underwriter, during
the period commencing on the date of the filing of any registration statement
under the Securities Act for the sale of any of the Company’s securities to the
public pursuant to an underwritten public offering (each, a “Public Offering”)
and ending on the date specified by the Company and the managing underwriter
(such period not to exceed ninety (90) days) (i) lend, offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock (whether such shares or any such securities are then owned by the
Purchaser or are thereafter acquired), or (ii) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of the Common Stock, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of Common
Stock or other securities, in cash or otherwise; provided however, that the
Purchaser’s agreement under this Section 4.8 shall only be effective in
connection with a particular Public Offering if (x) all persons including shares
of Common Stock in such Public Offering and (y) all of the Company’s officers,
directors, and holders of at least 5% of the outstanding Common Stock (or
securities convertible into at least 5% of the Common Stock) also enter into
agreements to such effect. The underwriters in connection with any such Public
Offering are intended third-party beneficiaries of this Section 4.8 and shall
have the right, power and authority to enforce the provisions hereof as though
they were a party hereto. The Purchaser further agrees to execute such
agreements as may be reasonably requested by the underwriters in any Public
Offering that are consistent with this Section 4.8 or that are necessary to give
further effect thereto. In order to enforce this Section 4.8, the Company may
impose stop-transfer instructions with respect to the Registrable Securities of
the Purchaser (and the shares or securities of every other person subject to the
foregoing restriction) until the end of such period.

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 Warrant(s) to the 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.

(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. The
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 B hereto.

(e) Transfer Agent Instructions. The Company shall have delivered to its
transfer agent irrevocable instructions to issue to the Purchaser one or more
certificates representing the 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.

ARTICLE VI
Registration Rights

Section 6.1 Incidental Registration. If the Company at any time proposes to
register any of its securities under the Securities Act for sale to the public,
whether for its own account or for the account of other security holders or both
(except with respect to registration statements on Forms S-4, S-8 or any
successor to such forms or another form not available for registering the
Registrable Securities for sale to the public), each such time it will promptly
give written notice to all Holders of the Registrable Securities of its
intention so to do. Upon the written request of any such Holder, received by the
Company within 20 days after the giving of any such notice by the Company, to
register any or all of its Registrable Securities, the Company will use its best
efforts to cause the Registrable Securities as to which registration shall have
been so requested to be included in the securities to be covered by the
registration statement proposed to be filed by the Company, all to the extent
requisite to permit the sale or other disposition by the Holder (in accordance
with its written request) of such Registrable Securities so registered. If the
registration of which the Company gives notice is for a registered public
offering involving an underwriting, the Company shall so advise the Holders of
Registrable Securities as a part of the written notice given pursuant to this
Section 6.1. In such event, the right of any Holder of Registrable Securities to
registration pursuant to this Section 6.1 shall be conditioned upon such
Holder’s participation in such underwriting to the extent provided herein. All
Holders of Registrable Securities proposing to distribute their securities
through such underwriting shall (together with the Company and the other
shareholders distributing their securities through such underwriting) enter into
an underwriting agreement in customary form with the underwriter or underwriters
selected for underwriting by the Company. Notwithstanding any other provision of
this Section 6.1, if the underwriter determines that marketing factors require a
limitation on the number of shares to be underwritten, the Company shall so
advise all holders of securities requesting registration of any limitations on
the number of shares to be underwritten, and the number of shares that are
entitled to be included in the registration and underwriting shall be allocated
(i) first, to the Company with respect to shares of Common Stock being sold for
its own account; (ii) second, to holders of capital stock of the Company that is
being registered pursuant to either (A) that certain Registration Rights
Agreement dated as of July 22, 1998, between the Company and the Trustees of
Columbia University in the City of New York or (B) that certain Fourth Amended
and Restated Investor Rights Agreement dated as of September 11, 2003, among the
Company and the other parties thereto, as amended, and (iii) third, to Holders
of Registrable Securities under this Agreement requesting registration in
proportion, as nearly as practicable, to the respective amounts of securities
owned by them. Notwithstanding the foregoing provisions, the Company may
withdraw any registration statement referred to in this Section 6.1 without
thereby incurring any liability to the Holders of Registrable Securities. If any
holder of Registrable Securities disapproves of the terms of any such
underwriting, it may elect to withdraw therefrom by written notice to the
Company and the underwriter. Any Registrable Securities or other securities
excluded or withdrawn from such underwriting shall be withdrawn from such
registration.

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 [Reserved].

Section 6.4 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 and shall, at its expense,
as applicable:

(a) use its commercially reasonable efforts to keep any Registration Statement
free of any material misstatements or omissions;

(b) advise the Holders:

(i) within two Business Days when a Registration Statement or any amendment
thereto has been filed with the SEC and when any 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 any 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 any 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 in any Registration Statement 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 any Registration Statement or the related 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 any 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,
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.

1 Note: This is covered by Section 6.8.

1

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 a 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 a 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) If a Registration Statement is no longer effective, 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 that 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.

2

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.

Section 6.11 Termination of Registration Rights. The rights set forth in this
Article IV shall terminate, as to any Holder, when the Registrable Securities
held by such Holder (together with any Affiliate of such Holder with whom such
Holder must aggregate its sales under SEC Rule 144) could be sold without
restriction under SEC Rule 144(k) within a ninety (90) day period.

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.

“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.

“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).

“Purchaser” means the Stanley Medical Research Institute and its 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 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” means any registration statement covering Registrable
Securities that is effective at any time under the Securities Act, provided,
however, that for purposes of Section 6.7(g) only, “Registration Statement,”
shall mean any registration statement covering Registrable Securities that was
declared effective under the Securities Act.

“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
shall be governed by the laws of the State of New York as such laws are applied
to contracts entered into or to be performed entirely within such state. Except
with respect to matters pertaining to injunctive relief, any dispute between the
parties hereto shall be subject to binding arbitration before a retired Maryland
Circuit Court Judge at J.A.M.S./Endispute located in Montgomery County,
Maryland, such arbitration to be conducted pursuant to the J.A.M.S./Endispute
procedure rules for commercial disputes then in effect. The award of the
arbitrator shall include an award of reasonable attorneys’ fees and costs to the
prevailing party. Except as provided in the next preceding sentence, any claim
or controversy arising out of or related to this Agreement or any breach hereof
(including claims for injunctive relief) shall be adjudicated in the state and
federal courts in Montgomery County having jurisdiction over disputes arising in
the State of Maryland, and the parties hereby consent to the jurisdiction and
venue of such courts.

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 party 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:

         
 
  Stanley Medical Research Institute

 
  5430 Grosvenor Lane, Suite 200
 
  Bethesda, MD 20814

All notices to SMRI shall be
  Attn: Dr. Michael Knable, DO

addressed as follows:
  Fax: (301) 571-0769

with a copy to:
  Fleischman and Walsh, L.L.P.

 
  1919 Pennsylvania Avenue, N.W
 
  Suite 600

 
  Washington, DC 20006

 
  Attn: Sean P. McGuinness

 
  Fax: (202) 265-5706

     
All notices to MEMORY shall
be addressed as follows:
  MEMORY Pharmaceuticals Corp.
100 Philips Parkway
Montvale, New Jersey 07645
Attn: Vice President, Business
Development
Fax: (858) 558-2872
 
   
 
   
 
   
with a copy to:
  Covington & Burling
1330 Avenue of the Americas
New York, NY 10019
Attn: Ellen B. Corenswet
Fax:

Any party may, by written notice to the other, designate a new address or fax
number to which notices to the party giving the notice shall thereafter be
mailed or faxed. Each party will provide ten days’ advance written notice to the
other party 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 permitted assigns. The
Company will not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Purchaser, and the Purchaser may not
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.

3

Section 8.8 Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto, their respective permitted successors and
assigns, 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 the
other 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 either 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 Purchaser. The Company therefore
agrees that the Purchaser is entitled to seek temporary and permanent injunctive
relief in any such case. The 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. The 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 Purchaser herein shall survive for a
period of one year following the date hereof.

[Remainder of this page intentionally left blank.]

4

In Witness Whereof, the parties hereto have caused this Securities Purchase
Agreement to be executed by their duly authorized representatives as of the date
first written above.

Memory Pharmaceuticals Corp.

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

The Stanley Medical Research Institute

By /s/ Michael Knable
Title Executive Director

5