Exhibit 10.1

DEVELOPMENT AGREEMENT

This Development Agreement (this “Agreement”) is entered into as of December 19,
2005 (the “Effective Date”) by and between MEMORY Pharmaceuticals Corp., a
Delaware corporation (“MEMORY”), with offices at 100 Philips Parkway, Montvale,
New Jersey 07645, and The Stanley Medical Research Institute, a nonprofit
organization (“SMRI”), having offices at 5430 Grosvenor Lane, Suite 200,
Bethesda, Maryland 20814.

Recitals

Whereas, MEMORY is focused on developing innovative drugs for the treatment of
debilitating central nervous system (CNS) disorders such as schizophrenia and
bipolar disorder;

Whereas, SMRI is the world’s leading nonprofit organization that supports
research on the causes and treatment of schizophrenia and bipolar disorder, both
through its own laboratories and support of researchers worldwide; and

Whereas, SMRI desires to support the further development and commercialization
of the Compound (as defined below) in order to accelerate the introduction of a
novel therapy for the benefit of bipolar patients worldwide by providing a
maximum of $3.2 million for development of the Compound.

Now, Therefore, in consideration of the foregoing and the covenants and premises
contained in this Agreement, the parties agree as follows:

  1.   Definitions. As used herein, the following terms shall have the following
meanings:

1.1. “Affiliate” shall mean any company or entity controlled by, controlling, or
under common control with a party hereto and shall include any company or entity
of which greater than fifty percent (50%) of the voting stock or participating
profit interest of which is owned or controlled, directly or indirectly, by a
party, and any company or entity which owns or controls, directly or indirectly,
greater than fifty percent (50%) of the voting stock of a party.

1.2. “Applicable Rate” shall mean the greater of prime plus [*] percent ([*]%)
or [*] percent ([*]%) per annum, compounded quarterly.

1.3. “Common Stock” shall have the meaning set forth in Section 4.1(a).

1.4. “Compound” shall mean MEM1003 as used in schizophrenia or bipolar disorder,
a CNS-optimized dihydropyridine that is a neuronal L-type calcium channel
modulator.

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1.5. “Confidential Information” shall mean all information disclosed by a party
to the other pursuant to this Agreement including, without limitation,
manufacturing, marketing, financial, personnel, scientific and other business
information and plans, and the material terms of this Agreement, whether in
oral, written, graphic or electronic form.

1.6. “Development Advisory Committee” or “DAC” shall mean the committee formed
pursuant to Section 3.1.

1.7. “Development Plan” shall mean the plan for conducting the Development
Program, including a budget, prepared by MEMORY on an annual basis during the
Development Term, as may be amended from time to time by MEMORY pursuant to
Section 2.2.

1.8. “Development Program” shall mean the research and development program with
respect to the Compound conducted during the Development Term.

1.9. “Development Program Inventions” shall mean, collectively, (i) all
inventions, improvements and discoveries, whether or not patentable, made,
conceived or first reduced to practice in the course of work conducted in the
Development Program that is actually funded by SMRI hereunder, if any, whether
solely by employees or contractors of SMRI, solely by employees or contractors
of MEMORY, or jointly by employees or contractors of SMRI and MEMORY, and
(ii) all patents, patent applications and copyrights that claim or cover such
inventions, improvements or discoveries.

1.10. “Development Program Results” shall mean all data and results generated in
the course of work conducted in the Development Program that is actually funded
by SMRI hereunder.

1.11. “Development Term” shall mean the period ending upon the earlier of
(i) completion of the Development Program, or (ii) three (3) years following the
Effective Date, as may be extended for additional, consecutive one (1) year
periods by written agreement of the parties.

1.12. “Disclosing Party” shall have the meaning provided in Section 8.1.

1.13. [*]

1.14. “First Commercial Sale” of a MEMORY Product shall mean the first sale for
use or consumption of such MEMORY Product in a country after Regulatory Approval
has been granted by the governing health regulatory authority of such country.
Sale to an Affiliate or Licensee shall not constitute a First Commercial Sale
unless the Affiliate or Licensee is the end user of the MEMORY Product.

1.15. “First Maximum” shall have the meaning provided in Section 4.2(c)(1).

1.16. “Fourth Maximum” shall have the meaning provided in Section 4.2(c)(4).

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1.17. “Indemnitee” shall have the meaning provided in Section 9.1.

1.18. “Licensee” shall mean any Third Party who has obtained a license to sell
MEMORY Products from MEMORY.

1.19. “License Grant” shall have the meaning provided in Section 6.2(a).

1.20. “MEMORY Product” shall mean any product containing the Compound that
receives Regulatory Approval and is commercialized by MEMORY or its Affiliates
or Licensees, including all formulations and modes of administration thereof for
schizophrenia or bipolar disorder.

1.21. “MEMORY Proprietary Information” means all Development Program Inventions
and all patents, patent applications, copyrights, trademarks, trade secrets,
know-how and other intellectual property rights related thereto, owned or
licensable by MEMORY.

1.22. “Net Sales” shall mean, with respect to any MEMORY Product, the amount
invoiced for the sale of such MEMORY Product by MEMORY and its Affiliates or its
Licensees, as applicable, to Third Parties which are not Affiliates or
sublicensees of the selling party, unless such Affiliates or sublicensees are
the end users of such MEMORY Product in which case the amount billed therefor
shall be deemed to be the amount that would be invoiced to a Third Party in an
arm’s length transaction, less:

(a) cash discounts and/or quantity discounts allowed;

(b) credits and allowances for returns, rejections and recalls;

(c) charges for freight, insurance and transportation specifically included in
the amount invoiced;

(d) sales and use taxes, duties or other governmental tariffs and other similar
taxes incurred and government mandated rebates; and

(e) accruals for estimated wholesaler chargebacks, contract rebates and bid
rebates and Medicaid and other similar government mandated rebates as MEMORY may
be required to pay from time to time, all of which shall be determined in
accordance with MEMORY’s standard accounting methods.

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1.23. “Receiving Party” shall have the meaning provided in Section 8.1.

1.24. “Regulatory Approval” shall mean any and all approvals (including price
and reimbursement approvals), licenses, registrations, or authorizations of the
United States or European Union or any country, federal, state or local
regulatory agency, department, bureau or other government entity that is
necessary for the manufacture, use, storage, import, transport and/or sale of a
product in a given jurisdiction.

1.25. “Royalty Term” shall mean the period of time commencing on the First
Commercial Sale of any MEMORY Product and ending upon the termination of
MEMORY’s payment obligations under Section 4.2 or [*], whichever is earlier.

1.26. “Second Maximum” shall have the meaning set forth in Section 4.2(c)(2).

1.27. “Securities Purchase Agreement” means the Securities Purchase Agreement in
the form attached hereto as Exhibit A to be entered into between SMRI and
MEMORY.

1.28. “Strategic Alliance” shall mean an agreement entered into by MEMORY with a
Third Party with respect to the development of the Compound, but excluding an
agreement with a Third Party with respect to only the manufacturing, sale and/or
promotion of the Compound and/or MEMORY Products or for the transfer or sale of
all or substantially all of the business of MEMORY to which this Agreement
relates to an Affiliate or Third Party, whether by merger, sale of stock, sale
of assets or otherwise.

1.29. “Term” shall have the meaning set forth in Section 10.1.

1.30. “Third Maximum” shall have the meaning set forth in Section 4.2(c)(3).

1.31. “Third Party” shall mean any entity other than SMRI or MEMORY or an
Affiliate of SMRI or MEMORY.

  2.   Development Program.

2.1. Development Program. During the Development Term, MEMORY shall use
commercially reasonable efforts to conduct the Development Program in accordance
with the Development Plan and the terms of this Agreement. The initial
Development Plan will be completed by MEMORY and presented to the DAC within
thirty (30) days of the Effective Date.

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2.2. Amendments to the Development Plan. MEMORY may amend the Development Plan
from time to time in its sole discretion. Prior to finalizing any such amendment
to the Development Plan which materially reduces funding for development of the
Compound or materially extends the timeline for development of the Compound,
MEMORY shall provide the proposed amendment to the members of the DAC and SMRI,
and the DAC and SMRI shall have fifteen (15) days from the date the DAC and SMRI
receive such proposed amendment to review and provide MEMORY comments on such
proposed amendment. MEMORY shall consider any such input in good faith when
finalizing such amendment and shall distribute the finalized amendment to the
DAC and SMRI. In the event that SMRI reasonably believes that the finalized
amendment will have a material adverse effect on the development of the
Compound, SMRI may notify the DAC and MEMORY in writing of such belief, which
notice shall include in reasonable detail the basis for such belief, provided
that such notice is given within fifteen (15) days of receipt of the final
amendment. If SMRI provides such notice within such fifteen (15) day period,
SMRI may delay or withhold payment of any funding due under this Agreement
pending resolution of the issue in accordance with this Section 2.2. Within
fifteen (15) days after receipt of such notice from SMRI (or such longer period
as agreed by MEMORY and SMRI), each member of the DAC shall provide notice in
writing to MEMORY of whether it approves the final amendment as proposed, or
not. If a majority of the members of the DAC approve the amendment as proposed,
MEMORY may proceed with the amendment and this Agreement shall continue in
effect. If a majority of the members of the DAC do not approve the amendment as
proposed, MEMORY may, in its sole discretion, proceed with the amendment;
provided, however, that if MEMORY proceeds with the amendment, SMRI shall have
the right to terminate this Agreement pursuant to Section 10.4.

2.3. Clinical Trial Registration. MEMORY shall register each clinical trial to
be conducted pursuant to the Development Program with (i) SMRI’s quarterly trial
reporting system and (ii) if and to the extent required by law, the US FDA’s
www.ClinicalTrial.gov website.

2.4. Clinical Trials Addendum. The “Addendum For Clinical Trials Involving Human
Subjects,” a copy of which is annexed hereto as Exhibit B, is hereby
incorporated with and into this Agreement.

  3.   Governance.

3.1. Development Advisory Committee. Promptly after the Effective Date, the
parties will form a Development Advisory Committee comprised of [*] of MEMORY,
who shall initially be [*], [*] of SMRI, who shall initially be [*], and two
(2) third party advisors mutually agreed upon by MEMORY and SMRI. One (1) member
of the DAC shall be selected to act as the chairperson of the DAC, with each
chairperson acting for a term of twelve (12) months. The chairperson shall be
selected by MEMORY. The DAC shall review the data and activities of the
Development Program and monitor the progress of development in relation to the
Development Plan. The DAC shall meet on a semi-annual basis or at such other
frequency as the DAC agrees. The parties shall agree upon the time and place of
meetings. A reasonable number of additional representatives of a party may
attend meetings of the DAC. [*].

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3.2. Information and Reports. Except as otherwise provided in this Agreement,
MEMORY will make available and disclose to SMRI and each member of the DAC all
results of the work conducted pursuant to the Development Plan prior to and in
preparation for DAC meetings and/or SMRI payments hereunder.

  4.   Fees and Payments.

4.1. Funding.

(a) On the Effective Date, SMRI shall purchase from MEMORY, and MEMORY shall
issue and sell to SMRI, 440,367 shares of MEMORY’s common stock, par value of
$.001 per share (the “Common Stock”), and warrants to purchase an additional
154,128 shares of Common Stock, for an aggregate purchase price of $960,000, on
and subject to the terms and conditions set forth in the Securities Purchase
Agreement.

(b) Subject to the terms and conditions set forth herein, in consideration for
the rights granted to SMRI hereunder, SMRI shall pay by check to MEMORY the
following amounts in cash within thirty (30) days of receipt of reports,
including the final study report, on the following events in support of the
Development Program:

      Event   Amount
[*]
[*]
[*]no later than December 31, 2007
  [*]
[*]
[*]

(c) MEMORY shall spend all amounts paid to MEMORY by SMRI under this Section 4.1
on the Development Program. MEMORY shall refund to SMRI any amounts that are
advanced by SMRI under Section 4.1(b) that are not expended in support of the
Development Program prior to December 31, 2007, together with interest thereon
at the Applicable Rate from the date such funds were advanced by SMRI.

(d) If MEMORY fails to [*] on or prior to December 31, 2007, then not later than
January 31, 2008 MEMORY shall refund to SMRI all amounts that are advanced by
SMRI under Section 4.1(b), together with interest thereon at the Applicable Rate
from the date such funds were advanced by SMRI.

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4.2. Royalty Payments.

(a) Royalty Payments by MEMORY. Subject to MEMORY having received the initial
$960,000 payment when due under Section 4.1(b), MEMORY shall pay to SMRI during
the Royalty Term, a royalty of (A) [*] percent ([*]) of annual Net Sales of
MEMORY Products by MEMORY and its Affiliates, and (B) [*] percent ([*]) of
royalty payments received by MEMORY from Licensees on sales of MEMORY Products
by such Licensees. Royalties on Net Sales shall be calculated based on the
year-to-date sales and shall be paid quarterly.

(b) Sublicensee Payments. If, prior to the end of the Term, MEMORY licenses to a
Third party rights to any Development Program Invention, MEMORY shall pay to
SMRI [*] percent ([*]) of any cash fees or other payments actually received by
MEMORY from such Third party for such license, excluding (i) royalties on the
sale of the MEMORY Product, (ii) amounts specifically allocated to research and
development for, or to the manufacture or supply of the Compound or the MEMORY
Product, (iii) amounts that MEMORY is required to repay (e.g., a loan), and
(iv) amounts received in exchange for securities of MEMORY.

(c) Maximum Payment Amount.

(1) In the event that MEMORY makes total payments to SMRI under this Section 4.2
of at least [*] percent ([*]) of the total amount SMRI has paid to MEMORY under
Section 4.1(b) (the “First Maximum”) prior to the [*] anniversary of the
Effective Date, MEMORY’s obligation to make payments to SMRI pursuant to this
Section 4.2 shall terminate. At any time prior to the [*] anniversary of the
Effective Date, MEMORY may make a lump sum cash payment to SMRI equaling the
amount by which the First Maximum exceeds the total amount already paid to SMRI
under this Section 4.2, and upon receipt of such payment by SMRI, MEMORY’s
obligation to make payments to SMRI pursuant to this Section 4.2 shall
terminate.

(2) In the event that MEMORY makes total payments to SMRI under this Section 4.2
of at least [*] percent ([*]) of the total amount SMRI has paid to MEMORY under
Section 4.1(b) (the “Second Maximum”) prior to the [*] anniversary of the
Effective Date, MEMORY’s obligation to make payments to SMRI pursuant to this
Section 4.2 shall terminate. At any time after the [*] anniversary of the
Effective Date and prior to the [*] anniversary of the Effective Date, MEMORY
may make a lump sum cash payment to SMRI equaling the amount by which the Second
Maximum exceeds the total amount already paid to SMRI under this Section 4.2,
and upon receipt of such payment by SMRI, MEMORY’s obligation to make payments
to SMRI pursuant to this Section 4.2 shall terminate.

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(3) In the event that MEMORY makes total payments to SMRI under this Section 4.2
of at least [*] percent ([*]) of the total amount SMRI has paid to MEMORY under
Section 4.1(b) (the “Third Maximum”) prior to the [*] anniversary of the
Effective Date, MEMORY’s obligation to make payments to SMRI pursuant to this
Section 4.2 shall terminate. At any time after the [*] anniversary of the
Effective Date and prior to the [*] anniversary of the Effective Date, MEMORY
may make a lump sum cash payment to SMRI equaling the amount by which the Third
Maximum exceeds the total amount already paid to SMRI under this Section 4.2,
and upon receipt of such payment by SMRI, MEMORY’s obligation to make payments
to SMRI pursuant to this Section 4.2 shall terminate.

(4) In the event that MEMORY makes total payments to SMRI under this Section 4.2
of at least [*] percent ([*]) of the total amount SMRI has paid to MEMORY under
Section 4.1(b) (the “Fourth Maximum”) prior to the [*] anniversary of the
Effective Date, MEMORY’s obligation to make payments to SMRI pursuant to this
Section 4.2 shall terminate. At any time after the [*] anniversary of the
Effective Date and prior to the [*] anniversary of the Effective Date, MEMORY
may make a lump sum cash payment to SMRI equaling the amount by which the Fourth
Maximum exceeds the total amount already paid to SMRI under this Section 4.2,
and upon receipt of such payment by SMRI, MEMORY’s obligation to make payments
to SMRI pursuant to this Section 4.2 shall terminate.

  5.   Payments; Records; Audits.

5.1. Payment; Reports. Royalty payments due under Section 4.2 and reports for
the sale of MEMORY Products by MEMORY and its Affiliates and royalty payments
received by MEMORY from Licensees on sales of MEMORY Products shall be
calculated and reported for each calendar quarter. All royalty payments due to
SMRI under Section 4.2 shall be paid within sixty (60) days of the end of each
calendar quarter. Each payment of royalties shall be accompanied by a report of
Net Sales of MEMORY Products in sufficient detail to permit confirmation of the
accuracy of the royalty payment made, including, without limitation, the number
of each MEMORY Product sold by MEMORY and its Affiliates, the gross sales and
Net Sales of such MEMORY Products sold by MEMORY and its Affiliates in U.S.
dollars, the

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exchange rates used, the royalty payments received by MEMORY from Licensees on
the sale of MEMORY Products, and any other information necessary to determine
the appropriate amount of royalties due under Section 4.2. MEMORY will keep
complete and accurate records pertaining to such calculation to permit SMRI to
confirm the accuracy of royalty payments due hereunder. MEMORY shall pay SMRI
interest at the Applicable Rate on any payments pursuant to Section 4.2(a) that
are not timely paid by MEMORY to SMRI.

5.2. Exchange Rate; Manner and Place of Payment. All payments hereunder shall be
payable in U.S. dollars. With respect to each quarter, for countries other than
the United States, whenever conversion of payments from any foreign currency
shall be required, such conversion shall be made at an exchange rate equal to
the weighted average of the rates of exchange for the currency of the country
from which payments are payable as published by The Wall Street Journal, Western
U.S. Edition, during the calendar quarter for which a payment is due. All
payments owed under this Agreement shall be made by check payable to the order
of the payee, unless otherwise specified by such payee.

5.3. Records and Audits. On thirty (30) days’ prior written notice, SMRI shall
have the right to have an independent certified public accountant inspect the
books and records of MEMORY and/or its Affiliates and/or its Licensees, no more
than once per fiscal year during usual business hours for the sole purpose of
and only to the extent necessary to verify the completeness and accuracy of the
records and payments made under this Agreement. Such examination with respect to
any fiscal year shall not take place later than two (2) years following the end
of such fiscal year. The accountant shall inform SMRI only if there has been an
underpayment or an overpayment or misappropriation of payments, and if so, the
amount thereof. The expense of any such inspection shall be borne by SMRI;
provided, however, that, if the inspection discloses an underpayment in excess
of ten percent (10%), then MEMORY shall pay the out of pocket costs of such
audit.

5.4. Withholding of Taxes. Any withholding of taxes levied by tax authorities
outside the United States on the payments hereunder shall be borne by the party
receiving such payment and deducted by the party making such payment from the
sums otherwise payable by it hereunder for payment to the proper tax
authorities. The parties agree to cooperate with each other in the event a party
claims exemption from such withholding or seeks deductions under any double
taxation or other similar treaty or agreement from time to time in force, such
cooperation to consist of providing receipts of payment of such withheld tax or
other documents reasonably available.

5.5. Exchange and Royalty Rate Controls. If at any time legal restrictions
prevent the prompt remittance of part or all royalties with respect to any
country where any MEMORY Product is sold, payment shall be made through such
lawful means or methods as MEMORY may determine. When in any country the law or
regulations prohibit both the transmittal and deposit of royalties on sales in
such a country, royalty payments shall be suspended for as long as such
prohibition is in effect, and as soon as such prohibition ceases to be in
effect, all royalties

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that would have been obligated to be transmitted or deposited, but for the
prohibition, shall forthwith be deposited or transmitted promptly to the extent
allowable, as the case may be. If any royalty rate specified in this Agreement
should exceed the permissible rate established in any country, the royalty rate
for sales in such country shall be adjusted to the highest legally permissible
or government-approved rate.

  6.   Intellectual Property Rights.

6.1. Intellectual Property.

(a) SMRI hereby acknowledges that, as between the parties, other than as
provided for herein, MEMORY owns all right, title and interest in and to all
MEMORY Proprietary Information and that, except to the extent expressly provided
herein, no right or license in any of the MEMORY Proprietary Information is
granted to SMRI hereunder.

(b) MEMORY agrees to use commercially reasonable efforts to cause any principal
investigator or institution with which it contracts to conduct work in the
Development Program to assign to MEMORY all ownership rights in Development
Program Inventions and Development Program Results. MEMORY shall notify SMRI
promptly in writing of each Development Program Invention that it owns, if any,
and any other information reasonably requested pertaining thereto. Subject to
Sections 6.1(c) and 10.6, MEMORY hereby assigns to SMRI all of its right, title
and interest to each Development Program Invention and all Development Program
Results that it owns, if any.

(c) Subject to the terms and conditions of this Agreement, including without
limitation, Section 8, SMRI hereby grants to MEMORY a perpetual, irrevocable,
fully paid, worldwide exclusive license (with the right to sublicense) to any
and all Development Program Inventions (including, without limitation, those
assigned to SMRI by MEMORY) for all purposes. In addition, SMRI expressly agrees
that MEMORY may use, disclose and reference any and all such Development Program
Results in any manner whatsoever and that such rights are perpetual and
irrevocable. Notwithstanding the foregoing, SMRI reserves the right to use such
Development Program Inventions and Development Program Results only for its own
internal, nonprofit, non-commercial, purposes or as expressly permitted by
Section 8.5 and for no other purposes whatsoever, without any further payment
obligations or liability to MEMORY. MEMORY shall take all appropriate steps,
including obtaining any necessary assignments from individual inventors (whether
any principal investigator(s) or others), to ensure that MEMORY has all
necessary rights to grant to SMRI the rights set forth in this Section 6.1(c).

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(d) Upon termination by Bayer AG of the License Agreement dated June 2001
between Bayer AG and MEMORY (the “Bayer License Agreement”), as contemplated by
Section 7.7 thereof, MEMORY shall have the right to disclose to Bayer AG all
data and results obtained by MEMORY under the Development Program and further to
transfer to Bayer AG free of charge all right, title and interest in such data
and results, including inventions, if Bayer AG is interested in proceeding with
the development and/or marketing of MEM1003, as required under Section 7.7 of
the Bayer License Agreement.

6.2. License to SMRI.

(a) If MEMORY has decided to terminate all efforts to develop and commercialize
the MEMORY Product in the United States for any reason other than scientific
reasons, including termination of (i) its own research, development and/or
commercialization activities, (ii) the research, development and/or
commercialization activities of any Affiliate, licensee or transferee and (iii)
its efforts to identify any licensee or transferee of rights to the MEMORY
Product in the United States, MEMORY shall promptly notify SMRI in writing of
such pending termination. If SMRI notifies MEMORY in writing within sixty
(60) days after the date of such notice from MEMORY that it is interested in
obtaining rights to develop and commercialize the MEMORY Product in the United
States and has the resources, itself or together with a Third Party, to develop
and commercialize the MEMORY Product in the United States, then (1) MEMORY will
undertake commercially reasonable efforts to obtain standby rights to the MEMORY
Product in the United States from Bayer AG entitling MEMORY to license the
MEMORY Product to SMRI as contemplated by this Section 6.2, and (2) MEMORY and
SMRI will negotiate in good faith for a period of sixty (60) days (or such
longer period as agreed in writing by the parties) the grant to SMRI of an
exclusive license (with the right to grant sublicenses), under those patent
rights or other intellectual property rights owned or licensed (with the right
to further sublicense) by MEMORY as of such time, which are necessary to
develop, make, use, sell, offer for sale or import the MEMORY Product in the
United States, to develop, make, use, sell, offer for sale and import the MEMORY
Product in the United States (the “License Grant”).

(b) If the parties do enter into an agreement providing for the License Grant
following good faith negotiation pursuant to Section 6.2(a), then, to the extent
the following items are within MEMORY’s control and can be provided without
breach of any obligation to or agreement with any Third Party, MEMORY shall
provide SMRI with copies of all preclinical and clinical data and study results,
investigational new drug application(s) (INDs) filed with the Food and Drug
Administration pursuant to Part 312 of Title 21 of the U.S. Code of Federal
Regulations, including any amendments thereto) and other regulatory filings,
studies, information and materials relating to the development and
commercialization of the MEMORY Product generated by or on behalf of MEMORY
(including pharmacology, toxicology, formulation and stability studies).

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(c) If SMRI does not provide notice of its interest to MEMORY within the initial
sixty (60) day period under Section 6.2(a), or if SMRI does provide such notice
within such period, but the parties do not enter into an agreement providing for
the License Grant within the negotiation period specified in Section 6.2(a),
then MEMORY shall have no further obligations, and SMRI shall have no further
rights under this Section 6.2.

6.3. Patent Abandonment. MEMORY shall notify SMRI in writing of its intent to
abandon any patent or patent application owned by MEMORY that is related to the
Compound and/or any Development Program Invention or MEMORY Proprietary
Information (including abandonment for failure to pay any required fees), other
than in the ordinary course of patent prosecution, at least thirty (30) days
prior to effectuating any such abandonment. If SMRI wishes to take title to the
applicable patent and/or patent application and to maintain the issued patent or
continue the prosecution of the patent application at SMRI’s own expense, then
SMRI shall so notify MEMORY in writing within thirty (30) days after its receipt
of the notice of intent to abandon from MEMORY. Upon receipt by MEMORY of such
notice from SMRI, MEMORY will undertake commercially reasonable efforts to
obtain standby rights to the subject patent or patent application in the United
States from Bayer AG entitling MEMORY to assign such patent or patent
application to SMRI as contemplated by this Section 6.3. If MEMORY obtains such
rights from Bayer AG, then MEMORY shall thereupon assign the subject patent or
patent application to SMRI; provided, however, that SMRI, upon the request of
MEMORY, shall grant to MEMORY (a) a non-exclusive, irrevocable, royalty-free,
non-sublicensable and non-transferable (except as permitted by Section 12.7)
right to use such patent and/or patent application for MEMORY’s own, internal,
non-commercial uses, or (b) subject to SMRI’s right to use the patent and/or
patent application (and/or any invention(s) claimed in such patent and/or patent
application) for its own internal research purposes, the first right to
negotiate with SMRI, in good faith, the terms of an exclusive license to develop
and commercialize any invention(s) claimed in such patent and/or patent
application; provided, further, that if SMRI and MEMORY do not enter into such a
written agreement within ninety (90) days following MEMORY’s assignment of the
rights to the subject patent and/or patent application to SMRI, then SMRI shall
be free to license the rights to develop and commercialize any invention(s)
claimed in such patent and/or patent application to one or more Third Parties.

6.4. Third Party Development. So long as the royalty payment obligations of
MEMORY have not been terminated in accordance with Section 4.2(b), if MEMORY
enters into any agreement with a Third Party granting such Third Party rights to
develop or commercialize the Compound or MEMORY Product, MEMORY shall use its
best efforts to ensure that such agreement provides that, in the event that such
Third Party decides to terminate or abandon all efforts to develop and
commercialize the MEMORY Product in the United States, all rights to
intellectual property of MEMORY, which are necessary to develop, make, use,
sell, offer for sale or import the MEMORY Product in the United States, that are
licensed to such Third Party by

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MEMORY under such agreement will revert to MEMORY so that MEMORY may comply with
the provisions of Sections 6.1, 6.2 and 6.3 with respect to such intellectual
property rights to the extent Sections 6.1, 6.2 and 6.3 apply. MEMORY will
notify SMRI in the event that it enters into any such agreement with a Third
Party granting such Third Party rights to develop or commercialize the Compound
or MEMORY Product.

6.5. Patent Prosecution. The filing and prosecution of all United States and
foreign patent applications and maintenance of all United States and foreign
patents that constitute Development Program Inventions shall be the
responsibility of MEMORY at its sole expense.

  7.   Representations and Warranties.

7.1. Representations and Warranties. Each party represents to the other that as
of the Effective Date:

(a) Corporate Power. It is duly organized and validly existing under the laws of
its state of incorporation or formation, and has full power (corporate or
otherwise) and authority to enter into this Agreement and to carry out the
provisions hereof;

(b) Due Authorization. It is duly authorized to execute and deliver this
Agreement and to perform its obligations hereunder, and the person or persons
executing this Agreement on its behalf has been duly authorized to do so by all
requisite action (corporate or otherwise); and

(c) Binding Agreement. This Agreement is legally binding upon it and enforceable
in accordance with its terms. The execution, delivery and performance of this
Agreement by it does not conflict with any agreement, instrument or
understanding, oral or written, to which it is a party or by which it may be
bound, nor violate any material law or regulation of any court, governmental
body or administrative or other agency having jurisdiction over it.

7.2. Disclaimers.

(a) Except as specifically set forth in this Agreement, NEITHER PARTY MAKES ANY
REPRESENTATIONS AND WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED.

(b) MEMORY EXPRESSLY DISCLAIMS ANY WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO
(i) THE SUCCESS OF THE DEVELOPMENT PROGRAM AND (ii) THE SAFETY, USEFULNESS OR
SUCCESSFUL COMMERCIALIZATION OF THE COMPOUND OR ANY MEMORY PRODUCT.

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  8.   Confidentiality; Publication.

8.1. Confidentiality. Except to the extent expressly authorized by this
Agreement or otherwise agreed in writing by the parties, the parties agree that,
during the Term and for the five (5) year period immediately following the Term,
each party (the “Receiving Party”) shall keep confidential and shall not publish
or otherwise disclose and shall not use for any purpose (other than as expressly
provided for in this Agreement) any Confidential Information furnished to it by,
or otherwise belonging to, the other party (the “Disclosing Party”) pursuant to
this Agreement. Each party may use Confidential Information of the other party
only to the extent required to accomplish the purposes of this Agreement. The
Receiving Party will use at least the same standard of care as it uses to
protect proprietary or confidential information of its own to ensure that its
employees, agents, consultants and other representatives do not disclose or make
any unauthorized use of such proprietary or confidential information. Each party
will promptly notify the other upon discovery of any unauthorized use or
disclosure of the other party’s Confidential Information.

8.2. Exceptions. The obligations of confidentiality and non-use contained in
Section 8.1 will not apply to the extent it can be established by the Receiving
Party by competent written proof that such Confidential Information:

(a) is now, or hereafter becomes, through no act or failure to act on the part
of the Receiving Party, generally known or available;

(b) is known by the Receiving Party at the time of receiving such information,
other than under confidentiality, as evidenced by its records;

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

(d) is independently developed by the Receiving Party without the aid,
application or use of Confidential Information of the Disclosing Party; or

(e) is the subject of a written permission to disclose provided by the
Disclosing Party.

8.3. Terms of Agreement. The parties agree that this Agreement and the terms
hereof will be considered Confidential Information of both parties.
Notwithstanding the foregoing, either party may disclose such terms as are
required to be disclosed under strictures of confidentiality for fund raising or
financing efforts to investors and lenders and potential investors and lenders
or as otherwise required pursuant to applicable law, and with respect to MEMORY,
to bona fide potential licensees.

8.4. Authorized Disclosure. Each party may disclose Confidential Information
belonging to the other party to the extent such disclosure is reasonably
necessary in the following instances:

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(a) regulatory filings;

(b) prosecuting or defending litigation;

(c) complying with applicable court orders or governmental regulations; and

(d) disclosure to Affiliates, licensees, employees, consultants, agents or other
Third Parties in connection with due diligence or similar investigations by such
Third Parties, in each case who agree to be bound by similar terms of
confidentiality and non-use at least equivalent in scope to those set forth in
this Section 8.

Notwithstanding the foregoing, in the event a party is required to make a
disclosure of the other party’s Confidential Information pursuant to this
Section 8.4, it will seek to secure confidential treatment of such information
at least as diligently as such party would use to protect its own Confidential
Information. The parties will consult with each other on the provisions of this
Agreement to be redacted in any filings made by the parties with the Securities
and Exchange Commission or as otherwise required by law.

8.5. Publications. SMRI may publish a summary of work performed by MEMORY under
the Development Program in SMRI’s annual reports and on SMRI’s website;
provided, however, that MEMORY shall have until the earlier of such time as
MEMORY or its designee publishes the results of such work and eighteen
(18) months after completion of such work to file patents before SMRI may
publish a summary of such work, unless MEMORY provides written consent to the
publication. In no event will SMRI disclose or use any Confidential Information
of MEMORY in such publication without MEMORY’s prior written consent, which may
not be unreasonably withheld; provided, however, that MEMORY acknowledges that,
in order to preserve its tax-exempt status, SMRI must be able to publish a
summary of work performed under the Development Program, and MEMORY will work in
good faith with SMRI to reach agreement upon the summary of such work to be
published by SMRI and will not unreasonably withhold its consent to the
inclusion of Confidential Information of MEMORY contained in such summary.
MEMORY shall be free to publish papers regarding the Development Program without
the prior written consent of SMRI and shall use commercially reasonable efforts
to publicize SMRI’s monetary contribution to the Development Program in any such
papers.

  9.   Indemnification.

9.1. Indemnification. MEMORY shall indemnify, defend and hold harmless SMRI, its
Affiliates and their respective directors, officers, employees and agents
(including, without limitation, the SMRI Development Advisory Committee
representative) (each, an “Indemnitee”), from and against any and all Third
Party claims, suits, demands, liabilities, damages, losses, costs, penalties,
fines and expenses (including court costs and the reasonable fees of attorneys
and other professionals) to the extent arising out of or resulting from:

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(a) MEMORY’s breach of any of its representations, warranties, covenants and/or
obligations under this Agreement;

(b) The negligence or willful misconduct of MEMORY or its Affiliates and/or
their respective directors, officers, employees, agents or representatives (or
any of them), in connection with MEMORY’s performance of its obligations under
this Agreement; and/or

(c) Any tort claims of personal injury (including death) relating to or arising
out of any such injury sustained as the result of, or in connection with, the
Development Program;

except that such indemnification obligation under this Section 9.1 shall not
apply to the extent such Third Party claims, suits, demands, liabilities,
damages, losses, costs, penalties, fines and expenses are proven to arise out of
or result from the negligence or willful misconduct of any Indemnitee or the
breach by SMRI of any of its representations, warranties, covenants and/or
obligations under this Agreement.

9.2. Procedures for Indemnification. Promptly after receipt by an Indemnitee of
notice of the commencement of any action, suit or proceeding, such Indemnitee
shall, if a claim for indemnification in respect thereof is to be made against
MEMORY, deliver to MEMORY written notice of the commencement thereof, and MEMORY
shall have the right to assume and manage the defense thereof (with counsel
reasonably satisfactory to MEMORY and such Indemnitee), including the right to
settle, compromise and/or litigate with respect to any such claim (but only
after obtaining SMRI’s prior written consent with respect to any proposed
settlement, compromise or litigation); provided, however, that MEMORY shall not
be required to obtain SMRI’s prior written consent in connection with any
proposed settlement, compromise or litigation if, in connection with and
following any such settlement, compromise or litigation, SMRI has (a) no
liability (monetary or otherwise), (b) not waived any of its rights and (c) not
admitted to any wrongdoing or guilt.

9.3. Advance Payment of Expenses; Complete Indemnification. The expenses of an
Indemnitee incurred in defending a civil or criminal action, suit or proceeding
shall be paid by MEMORY as they are incurred and in advance of the final
disposition of the action, suit or proceeding, upon receipt of an undertaking by
or on behalf of the Indemnitee to repay the amount if it is ultimately
determined by a court of competent jurisdiction that such Indemnitee is not
entitled to be indemnified by MEMORY. All costs and expenses incurred by an
Indemnitee in connection with enforcement of Section 9.1 also shall be
reimbursed by MEMORY.

9.4. Insurance. MEMORY will maintain at its own expense, with a reputable
insurance carrier, product liability insurance in an amount consistent with
industry standards during the term of this Agreement and will name SMRI as an
additional insured with respect to such insurance. MEMORY will provide SMRI with
a certificate of insurance evidencing such coverage.

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  10.   Term and Termination.

10.1. Term of the Agreement. The term of this Agreement (the “Term”) shall
commence on the Effective Date and continue until the expiration of the Royalty
Term, unless earlier terminated pursuant to Sections 10.2, 10.3, 10.4 or 10.5 or
extended by mutual written agreement of the parties.

10.2. Termination by Mutual Agreement. The parties may at any time terminate
this Agreement by written agreement executed by both SMRI and MEMORY.

10.3. Termination by MEMORY. MEMORY may terminate this Agreement with thirty
(30) days’ prior written notice to SMRI in the event that MEMORY (a) enters into
a Strategic Alliance or (b) transfers or sells all or substantially all of the
business of MEMORY to which this Agreement relates to an Affiliate or Third
Party, whether by merger, sale of stock, sale of assets or otherwise.

10.4. Termination by SMRI.

(a) SMRI may terminate this Agreement with thirty (30) days’ prior written
notice to MEMORY in the event that SMRI: (i) disagrees with any amendment to the
Development Plan proposed by MEMORY and not approved by a majority of the
members of the DAC as contemplated by Section 2.2; or (ii) in good faith, based
on information provided by the DAC, believes that reasonable progress on the
Development Program is not occurring in accordance with the Development Plan.
Prior to any termination under this Section 10.4(a), SMRI agrees to meet with
the DAC and MEMORY to discuss potential improvements to the Development Program
and/or Development Plan in an attempt to prevent SMRI’s termination of this
Agreement pursuant to this Section 10.4(a).

(b) SMRI may terminate this Agreement with thirty (30) days’ prior written
notice in the event that MEMORY: (i) abandons the Development Program; or
(ii) decides to enter into a Strategic Alliance; provided, however, that SMRI
shall have the right to apply future payments due under Section 4.1 to other
related research being conducted by MEMORY as mutually agreed to by the parties
in lieu of terminating this Agreement under this Section 10.4(b).

10.5. Termination for Cause. Each party shall have the right to terminate this
Agreement upon sixty (60) days’ prior written notice to the other upon the
occurrence of any of the following:

(a) Upon or after the bankruptcy, insolvency, dissolution or winding up of the
other party (other than a dissolution or winding up for the purpose of
reconstruction or amalgamation); or

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(b) Upon or after the breach of any material provision of this Agreement by the
other party if the breaching party has not cured such breach within the sixty
(60) day period following written notice of termination by the non-breaching
party.

10.6. Effect of Termination or Expiration; Surviving Obligations. Expiration or
termination of this Agreement shall not affect any rights or obligations of
either party accruing prior to such expiration or termination. Upon expiration
or termination of this Agreement, all rights and obligations of the parties
under this Agreement shall terminate, except that (a) the terms of Sections 1,
5.3, 6.1, 7, 8, 9.1, 9.2, 9.3, 10.6, 11 and 12 of this Agreement shall survive
any expiration or termination of this Agreement and (b) if this Agreement is
terminated by MEMORY under Section 10.3 or by SMRI under Section 10.4 or 10.5
after MEMORY has received the initial $960,000 payment when due under
Section 4.1(b), the terms of Section 4.2, 5, 6.2, 6.3, 6.4 and 9.4 shall survive
such termination until the expiration of the Royalty Term. Promptly after
expiration or termination of this Agreement, except as otherwise provided in
this Section 10.6, each party shall return or dispose of any Confidential
Information of the other party in the accordance with the instructions of such
other party.

  11.   Governing Law; Dispute Resolution.

11.1. Governing Law. 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.

11.2. Dispute Resolution. Except with respect to matters pertaining to
injunctive relief, in the event of any dispute, the parties shall refer such
dispute to the Chief Executive Officer of MEMORY and the Executive Director of
SMRI for attempted resolution by good faith negotiations within sixty (60) days
after such referral is made. During such period of good faith negotiations, any
applicable time periods under this Agreement shall be tolled. In the event such
executives are unable to resolve such dispute within such sixty (60) day period,
the parties shall submit their dispute 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.

11.3. Jurisdiction and Venue. Except as provided in Section 11.2 above, 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.

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  12.   General Provisions.

12.1. Notices. All notices required or permitted to be given under this
Agreement shall be in writing and shall be mailed by registered or certified
mail, Federal Express or other nationally recognized overnight delivery service,
addressed to the signatory to whom such notice is required or permitted to be
given and transmitted by facsimile to the number indicated below. All notices
shall be deemed to have been given when mailed, as evidenced by the postmark at
the point of mailing, or faxed.

         
 
  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

         
 
  MEMORY Pharmaceuticals Corp.

 
  100 Philips Parkway
 
  Montvale, New Jersey 07645

All notices to MEMORY shall be
  Attn: Head of Business Development

addressed as follows:
  Fax: (858) 558-2872

with a copy to:
  Covington & Burling

 
  1330 Avenue of the Americas
 
  New York, NY 10019

 
  Attn: Ellen B. Corenswet

 
  Fax: (646) 441-9256

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.

12.2. Force Majeure. No party shall be liable for any delay or failure of
performance (other than payment obligations) to the extent such delay or failure
is caused by circumstances beyond its reasonable control and that by the
exercise of due diligence it is unable to prevent, provided that the party
claiming excuse uses its commercially reasonable efforts to overcome the same.

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12.3. Entirety of Agreement. This Agreement (and the exhibits attached hereto)
embodies the entire, final and complete agreement and understanding between the
parties and replaces and supersedes all prior discussions and agreements between
them with respect to its subject matter. No modification or waiver of any terms
or conditions hereof shall be effective unless made in writing and signed by a
duly authorized officer of each party.

12.4. Non-Waiver. The failure of a party in any one or more instances to insist
upon strict performance of any of the terms and conditions of this Agreement
shall not constitute a waiver or relinquishment, to any extent, of the right to
assert or rely upon any such terms or conditions on any future occasion.

12.5. Disclaimer of Agency or Partnership. Neither party is, or will be deemed
to be, the legal representative or agent of the other, nor shall either party
have the right or authority to assume, create, or incur any third party
liability or obligation of any kind, express or implied, against or in the name
of or on behalf of another except as expressly set forth in this Agreement. In
addition, neither party shall be deemed to be a member of a partnership with the
other party, nor shall SMRI be deemed to be a “Sponsor” (as defined by the Food
and Drug Administration) of any clinical trial for an MEMORY Product.

12.6. Severability. If a court of competent jurisdiction declares any provision
of this Agreement invalid or unenforceable, or if any government or other agency
having jurisdiction over either MEMORY or SMRI deems any provision to be
contrary to any laws, then that provision shall be severed and the remainder of
the Agreement shall continue in full force and effect. To the extent possible,
the parties shall revise such invalidated provision in a manner that will render
such provision valid without impairing the parties’ original intent.

12.7. Assignment. Except as expressly provided hereunder, neither this Agreement
nor any rights or obligations hereunder may be assigned or otherwise transferred
by either party without the prior written consent of the other party (which
consent shall not be unreasonably withheld); provided, however, that MEMORY may
assign this Agreement and its rights and obligations hereunder without SMRI’s
consent in connection with the transfer or sale of all or substantially all of
the business of such party to which this Agreement relates to an Affiliate or
Third Party, whether by merger, sale of stock, sale of assets or otherwise;
provided further that SMRI may assign its right to receive payments under this
Agreement to a taxable wholly owned subsidiary of SMRI without MEMORY’s consent.
The rights and obligations of the parties under this Agreement shall be binding
upon and inure to the benefit of the successors and permitted assigns of the
parties. Any assignment not in accordance with this Agreement shall be void.

12.8. Headings. The headings contained in this Agreement are inserted for
reference only and shall not be deemed a part of the text hereof.

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12.9. Limitation of Liability. EXCEPT FOR AMOUNTS PAYABLE UNDER SECTION 4 AND
LIABILITY FOR BREACH OF CONFIDENTIALITY, NO PARTY SHALL BE LIABLE TO ANOTHER FOR
INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY DAMAGES, INCLUDING BUT
NOT LIMITED TO LOST PROFITS, ARISING FROM OR RELATING TO ANY BREACH OF THIS
AGREEMENT, REGARDLESS OF ANY NOTICE OF THE POSSIBILITY OF SUCH DAMAGES.

12.10. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be an original and all of which shall constitute together
the same document.

12.11. Public Disclosure. Except for such disclosure as is deemed necessary, in
the reasonable judgment of a party, to comply with applicable laws or
regulations, no public announcement, news release, public statement or
publication relating to the existence of this Agreement, or the terms hereof,
will be made without the other party’s prior written approval, which approval
shall not be unreasonably withheld. The parties agree that they will use
reasonable efforts to coordinate the initial announcement or press release
relating to the existence of this Agreement so that such initial announcement or
press release is made within forty-five (45) days of the Effective Date.

12.12. Expenses. Each party shall pay all costs and expenses that it incurs with
respect to the negotiation, execution, delivery and performance of this
Agreement and the transactions contemplated hereby; provided, however, that
MEMORY shall reimburse the reasonable fees of and expenses of counsel for SMRI
in connection with the negotiation, execution and delivery of this Agreement and
the Securities Purchase Agreement, not to exceed in the aggregate, [*] without
the prior written consent of MEMORY.

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In Witness Whereof, the parties hereto have duly executed this Development
Agreement.

MEMORY Pharmaceuticals Corp.

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

The Stanley Medical Research Institute

By: /s/ Michael Knable
Name: Michael Knable, D.O.
Title: Executive Director

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Exhibit A

FORM OF SECURITIES PURCHASE AGREEMENT

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Exhibit B

ADDENDUM FOR CLINICAL TRIALS INVOLVING HUMAN SUBJECTS

MEMORY acknowledges that SMRI is not a sponsor of any clinical trials involving
human subjects. MEMORY shall comply with all applicable foreign, federal, state
and local laws, statutes, regulations, rules and requirements of all applicable
governmental or administrative authorities in the conduct of any clinical trials
involving human subjects relating to the Development Program (“Clinical Trials”)
and the performance of this Addendum for Clinical Trials Involving Human
Subjects, including without limitation all such laws, statutes, regulations,
rules and requirements concerned with or related to the testing, safety,
efficacy, reliability, manufacture, sale or marketing of pharmaceuticals,
medical products, biologics or biopharmaceuticals.

In particular, MEMORY shall, and shall require each study site where a Clinical
Trial is conducted (each, a “Site”) or those investigators who will personally
conduct or supervise the Clinical Trials at each Site (collectively, the
“Principal Investigators”) to agree to comply, as applicable (a) with
promulgated US Food and Drug Administration (FDA) rules and regulations relating
to the testing and development of new drugs and/or new applications of existing
drugs when applicable, (b) with all relevant Department of Health and Human
Services rules and regulations regarding the protection of human subjects in
clinical trials when human subjects are involved, including, but not limited to
those regarding informed consent, and (c) with the Helsinki Declaration and
other applicable local laws relating to clinical trials when such trials are
conducted outside the United States. MEMORY agrees, and agrees to require the
Sites and the Principal Investigators, to conduct the Clinical Trials according
to standards of Good Clinical Practice.

In addition to compliance with all existing applicable foreign, federal, state
and local law regarding informed consent and disclosure in connection with
medical research and testing, MEMORY shall require the Sites and Principal
Investigators to include in the consents or disclosure, and shall separately
disclose to SMRI information provided by each Site and Principal Investigator:
1) if the Principal Investigator, the Principal Investigator’s spouse and
dependent children collectively have, at any point since the time the Principal
Investigator began participating in the Development Program, an equity
(ownership) interest, including stock options, shares, American Depository
Receipts or other shareholder interest, exceeding US$50,000.00 equivalent in
MEMORY, 2) if the Principal Investigator, the Principal Investigator’s spouse,
dependent children and any of the Principal Investigator’s affiliated
institutions have, since the time the Principal Investigator began participating
as a Principal Investigator in the Development Program, collectively received
non-Development Program-related payments exceeding the cumulative value of
US$25,000.00 from MEMORY, and 3) any other financial relationship that could be
material to a subject’s decision to participate in the Development Program.

In Clinical Trials involving subjects with mental disorders, (i) MEMORY shall
take such additional measures as may be reasonably necessary or desirable to
ensure that all subjects have the capacity to consent to participation in the
Clinical Trial, and (ii) MEMORY shall cause each Principal Investigator to
closely monitor such subjects during critical periods before, during and for an
appropriate period after the clinical investigation when a subject may pose an
increased risk to himself or others due to the conditions of the Clinical Trial.

MEMORY agrees not to permit a firm or individual whom the FDA has debarred,
disqualified, or restricted to participate in the Development Program, provided
MEMORY may reasonably rely on the representations and covenants of the
applicable Site and/or Principal Investigator with respect to their respective
adherence to such requirement. MEMORY will require that each Site and/or Private
Investigator that participates in the Development Program to carry appropriate
levels of professional liability insurance. MEMORY shall take appropriate steps
to inform the Sites and Principal Investigators of the relevant obligations of
MEMORY under this Addendum, and of such Sites’ and Principal Investigators’
respective obligations under applicable foreign, federal, state and local law.

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