**Exhibit 10.1****AMENDED AND RESTATED****LICENSE AGREEMENT****between****NPS Allelix Corp.****and****Memory Pharmaceuticals Corp.****[*] CONFIDENTIAL TREATMENT IS REQUESTED**
 

 
Table of Contents             Page   ARTICLE 1 Definitions  3   ARTICLE 2 License Grants  7   ARTICLE 3 Diligence  8   ARTICLE 4 Payments to NPS  9   ARTICLE 5 Royalties  10   ARTICLE 6 Payment, Reporting, Auditing  12   ARTICLE 7 Pre-Clinical Development  14   ARTICLE 8 Clinical Development  14   ARTICLE 9 Regulatory Affairs  15   ARTICLE 10 Manufacture and Supply  15   ARTICLE 11 Commercialization  16   ARTICLE 12 Trademarks  16   ARTICLE 13 Ownership of Intellectual Property and Patent Rights  16   ARTICLE 14 Representations and Warranties  20   ARTICLE 15 Confidential Information  21   ARTICLE 16 Term and Termination  23   ARTICLE 17 Arbitration  26   ARTICLE 18 Miscellaneous  27    Schedule A    33   Schedule B    35   Schedule C    36   Schedule D    38   **[*] CONFIDENTIAL TREATMENT IS REQUESTED**
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**AMENDED AND RESTATED LICENSE AGREEMENT**     This AMENDED AND RESTATED LICENSE AGREEMENT (the “Agreement”), entered into as of April 20,2007 (the “Execution Date”), and having an effective date of October 15, 2003 (the “EffectiveDate”), is between, NPS ALLELIX CORP., an Ontario corporation having it principal place of businessat 6850 Goreway Drive, Mississauga, Ontario L4V 1V7 Canada (“NPS”) and MEMORY PHARMACEUTICALSCORP., a Delaware corporation, having its principal place of business at 100 Philips Parkway,Montvale, New Jersey 07645 (“Memory”).**Introduction**1. Each of NPS and Memory has discovered compounds active as 5-HT6 receptor antagonists and ownsrelated intellectual property rights.2. Memory has expertise in the research and development of pharmaceutical products, and desiresto develop and commercialize products containing compounds active as 5-HT6 receptorantagonists.3. NPS and Memory have previously entered into a License Agreement dated October 15, 2003relating to 5-HT6 receptor antagonists (the “Original License Agreement”) and NPS and Memorynow desire to amend and restate the Original License Agreement in its entirety.4. In consideration of the mutual covenants and promises contained in this Agreement and othergood and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,NPS and Memory agree to amend and restate the Original License Agreement as follows:**ARTICLE 1****DEFINITIONS**As used in this Agreement, the following terms, whether used in the singular or plural, shall havethe following meanings:     1.1 “Affiliate” means (a) a business entity which owns, directly or indirectly, at least fiftypercent (50%) of the voting shares or other means of control of a Party; or (b) a business entityin which at least fifty percent (50%) of the voting shares or other means of control are owned by aParty, either directly or indirectly; or (c) a business entity, the majority ownership of which isdirectly or indirectly common to the majority ownership of a Party. Notwithstanding the preceedingprovisions, once an entity ceases to be an Affiliate, then such entity shall, without any furtheraction, cease to have any rights, including license and sublicense rights, under this Agreementthat it has by reason of being an Affiliate.     1.2 “Agreement Term” means the term of this Agreement, more fully described in Section 16.1.**[*] CONFIDENTIAL TREATMENT IS REQUESTED**
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     1.3 “Bioequivalent Product” means, with respect to a given Product or Memory Product sold in agiven country of the Territory by Memory, its Affiliate or sublicensee, a product sold by a ThirdParty in such country containing **[*]**, as the case may be, as such Product or Memory Product, as thecase may be.     1.4 “Combination Product” means any product containing both (a) an NPS Compound and/or aMemory Compound which causes it to be considered a Product and/or Memory Product, and (b) one ormore other pharmaceutically active agents that are not Products or Memory Products.     1.5 “Cover” (including the variations such as “Covered”, “Coverage” or “Covering”) shall meanthat the making, using, offering for sale, selling, importing, or exporting of a given productwould infringe a claim of a Patent Right in the absence of a license under such Patent Right. Thedetermination of whether a product is Covered by a particular Patent Right shall be made on acountry-by-country basis.     1.6 “Effective Date” means October 15, 2003.     1.7 “Field” shall mean prophylaxis and treatment of diseases, in all indications, for eitherhuman or veterinary use.     1.8 “IND” means an Investigational New Drug Application filed with the United States Food andDrug Administration (“FDA”) for human clinical testing of a drug.     1.9 “Initiation of Phase I” means the date that a human is first dosed by or on behalf ofMemory, its Affiliate or sublicensee with a Product or Memory Product, as the case may be, in aPhase I clinical trial or foreign equivalent.     1.10 “Initiation of Phase II” means the date that a patient is first dosed by or on behalf ofMemory, its Affiliate or sublicensee with a Product or Memory Product, as the case may be, in aPhase II clinical trial or foreign equivalent.     1.11 “Initiation of Phase III” means the date that a patient is first dosed by or on behalf ofMemory, its Affiliate or sublicensee with a Product or Memory Product, as the case may be, in aPhase III clinical trial or foreign equivalent.     1.12 “Launch” means, with respect to a Product or Memory Product, as the case may be, in acountry of the Territory, the date of the first commercial sale by Memory, its Affiliate or itssublicensee of the given Product or Memory Product in the given country after Regulatory Approvalin such country.     1.13 “Major Market Countries” means **[*].**     1.14 “Memory Compound” means any 5-HT6 receptor antagonist for which Memory as of theEffective Date or during the term of this Agreement has rights, by reason of its own conception ofsuch antagonist, and are Covered by Memory Patent Rights, but are not covered by the NPS PatentRights. A list of the Memory Compounds is set forth in Schedule A hereto, as shall be updated fromtime-to-time.**[*] CONFIDENTIAL TREATMENT IS REQUESTED**
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     1.15 “Memory Patent Rights” means all Patent Rights that Memory owns relating to 5-HT6receptor antagonists as listed in Schedule B as updated from time-to-time, including (a) anypatents issuing from any such patent applications listed in Schedule B and (b) any divisionalapplications, continuation applications, continuation-in-part applications, substitutions,extensions, supplementary protection certificates, reissues, reexaminations, renewals or the likerelated to the patents and patent applications listed in Schedule B.     1.16 “Memory Product” means any pharmaceutical product that includes, in whole or as acomponent, any Memory Compound as an active ingredient thereof.     1.17 “NPS Compound” means any 5-HT6 receptor antagonist for which NPS as of the Effective Datehas rights, whether by reason of its own conception of such antagonist, or under agreement with aThird Party, and are Covered by NPS Patent Rights. NPS Compounds shall include any 5-HT6 receptorantagonist for which Memory during the term of this Agreement has rights by reason of its ownconception of such antagonist and which also is Covered by the NPS Patent Rights. A list of theNPS Compounds is set forth in Schedule C hereto, as shall be updated from time-to-time.     1.18 “NPS Know-How” means data, knowledge and information, including materials, samples,chemical manufacturing data, toxicological data, pharmacological data, preclinical data, assays,platforms, formulations, specifications, quality control testing data, that are necessary or usefulfor the discovery, manufacture, development or commercialization of Product or Memory Product inthe Territory. NPS Know-How does not include the 5-HT6 receptor nor the non-exclusive license NPSobtained from NIH regarding the 5-HT6 receptor.     1.19 “NPS Patent Rights” means all Patent Rights that NPS owns, or otherwise has the right togrant the licenses herein relating to 5-HT6 receptor antagonists as listed in Schedule D as updatedfrom time-to-time, including (a) any patents issuing from any such patent applications listed inSchedule D and (b) any divisional applications, continuation applications, continuation-in-partapplications, substitutions, extensions, supplementary protection certificates, reissues,reexaminations, renewals or the like related to the patents and patent applications listed inSchedule D. NPS Patent Rights do not include NPS’ non-exclusive license from NIH to the 5-HT6receptor patents.     1.20 “NDA” means a New Drug Application filed with the FDA, or its foreign equivalent, for adrug.     1.21 “NDA Approval” means for a given Product or Memory Product, the date that the FDA, or itsforeign equivalents, approves the NDA for the marketing of the Product or Memory Product.     1.22 “Net Sales” shall mean the amount of gross sales of the Product or Memory Product, as thecase may be, invoiced by Memory, its Affiliates and its sub-licensees to independent third parties(which are, e.g., distributors, pharmacies, etc.) less deductions of returns (including allowancesactually given for spoiled, damaged, out-dated, rejected, returned Product or Memory Product sold,withdrawals and recalls), rebates to the extent consistently applied by Memory to its products(price reductions, rebates to social and welfare systems, charge backs, cash sales incentives (butonly to the extent it is a sales related deduction which is**[*] CONFIDENTIAL TREATMENT IS REQUESTED**
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accounted for within Memory on a product-by-product basis)), government mandated rebates andsimilar types of rebates (e.g., P.P.R.S, Medicaid, each as consistently applied by Memory to itsproducts), volume (quantity) discounts, each as consistently applied by Memory to its products,taxes (value added or sales taxes, government mandated exceptional taxes and other taxes directlylinked to the gross sales amount), it being understood that income and capital gains taxes are notthe type of taxes contemplated as a deduction in this definition of Net Sales.          Notwithstanding the foregoing, amounts received by Memory, its Affiliates and sublicensees forthe sale of Product or Memory Product among Memory, its Affiliates or sublicensees for resale shallnot be included in the computation of Net Sales.     1.23 “Party” and “Parties” means NPS or Memory, or both, as applicable.     1.24 “Patent Right” means all rights under any patent or patent application in any country ofthe Territory, including any substitution, extension or supplementary protection certificate,reissue, reexamination, renewal, division, continuation or continuations-in-part thereof.     1.25 “Phase I” means the first phase of human clinical trials of a drug required by the USFDA, or similar regulatory body, to gain evidence of safety and determine optimal dosage forProduct(s) or Memory Product(s), as the case may be. For the US FDA, it is described in 21 CFRPart 312, as it may be amended.     1.26 “Phase II” means the second phase of human clinical trials of a drug required by the USFDA, or similar regulatory body, to gain evidence of efficacy in the target population, determineoptimal dosage, and obtain expanded evidence of safety for Product(s) or Memory Product(s), as thecase may be. For the US FDA, it is described in 21 CFR Part 312, as it may be amended.     1.27 “Phase III” or “Pivotal Phase” means the third phase of human clinical trials of a drugrequired by the US FDA, or similar regulatory body, to gain evidence of efficacy in the targetpopulation, and obtain expanded evidence of safety for Product(s) or Memory Product(s), as the casemay be. For the US FDA, it is described in 21 CFR Part 312, as it may be amended.     1.28 “Pre-Clinical Candidate” shall be an NPS Compound that Memory designates within 18(eighteen) months of receipt of NPS Compounds and NPS Compound intermediates from NPS, which NPShas in stock.     1.29 “Product” means any and all products for humans or animals that include, in whole or as acomponent thereof, a NPS Compound.     1.30 “Regulatory Approval” means any approvals (including pricing and reimbursementapprovals), licenses, registrations or authorizations of any national or international or localregulatory agency, department, bureau or other governmental entity, necessary for the manufactureand sale of a Product or Memory Product, as the case may be, in the Field in a regulatoryjurisdiction in the Territory by Memory, its Affiliate or sublicensee.     1.31 “Territory” means all countries and territories in the world.**[*] CONFIDENTIAL TREATMENT IS REQUESTED**
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     1.32 “Third Party” means a person or entity other than (i) NPS or any of its Affiliates, or(ii) Memory or any of its Affiliates.     1.33 “US” means the United States of America and its possessions and territories, includingPuerto Rico.     1.34 “Valid Claim” means a claim in any (i) unexpired and issued patent under NPS PatentRights or Memory Patent Rights, as the case may be, that has not been disclaimed, revoked or heldinvalid by a final unappealable decision of a court of competent jurisdiction or government agencyor (ii) pending patent application under NPS Patent Rights or Memory Patent Rights, as the case maybe.**ARTICLE 2****LICENSE GRANTS**     2.1 License Grants. Subject to the terms and conditions of this Agreement, NPS grants toMemory the sole and exclusive license, even with respect to NPS other than as provided in Sections16.5(c) or (d), including the right to grant sublicenses pursuant to Section 2.2, under the NPSPatent Rights and to use the NPS Know-How, to make, have made, use, have used, offer for sale,sell, import, export, register and/or market Products and/or Memory Products in the Territory foruse in the Field.          Nothing in this Agreement grants to Memory any right or license to use NPS Know-How for anypurpose other than to make, have made, use, have used, offer for sale, sell, import, export,register and/or market Products and/or Memory Products in the Territory for use in the Field.     2.2 Sublicense Rights.               (a) The rights and licenses granted to Memory under Section 2.1 shall include the right togrant sublicenses to its Affiliates and Third Parties under such rights and licenses, in whole orin part, solely to the extent necessary to make, have made, use, have used, offer for sale, sell,import, export, register, and/or market Products and/or Memory Products in the Territory for use inthe Field. If Memory grants such a sublicense, Memory shall ensure that all of the applicableterms and conditions of this Agreement shall apply to the Affiliate or Third Party sublicensee tothe same extent as they apply to Memory for all purposes. Memory assumes full responsibility forthe performance of all obligations and observance of all terms so imposed on such Affiliate orThird Party sublicensee and will itself account to NPS for all payments due under this Agreement byreason of such sublicense.               (b) Intentionally Omitted.               (c) Intentionally Omitted.               (d) Any sublicense may, at the written election of NPS, continue in full force and effectafter the termination of any of the underlying licenses granted herein to Memory. Upon thelicenses granted herein to Memory becoming fully paid up pursuant to**[*] CONFIDENTIAL TREATMENT IS REQUESTED**
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     Section 16.1, any and all sublicenses granted by Memory similarly shall become fully paid up as to NPS.**ARTICLE 3****DILIGENCE**     3.1 Diligence. Memory shall use reasonable diligence in proceeding with the development,including: pursuing a clinical candidate; conducting safety and efficacy trials; obtaining requiredRegulatory Approvals; manufacturing; marketing; and sale of Products and/or Memory Products, atMemory’s option, in the Major Market Countries.          Reasonable diligence as used in this paragraph shall mean the same standard of effort as usedby Memory, or in any case not less than common in the industry taken as a whole, in the research,development, clinical testing, manufacturing, marketing and sale of a product which (i) mustreceive regulatory approval in Major Market Countries and (ii) has similar potential as the Productor Memory Product, as the case may be, taking into account scientific, business and marketing andreturn on investment considerations. It is understood that such Product or Memory Productpotential may change from time to time based upon changing scientific, business, marketing andreturn on investment considerations. The Parties also acknowledge that, even within the MajorMarket Countries, Memory (and its Affiliates) does not always seek to market its own products inevery such country or seek to obtain regulatory approval in every such country or for everypotential indication. As a result, the exercise by Memory of reasonable diligence is to bedetermined by judging its efforts taken as a whole in the following regions on a region-by-regionbasis (the regions being **[*]**).
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          In the event of a dispute between the Parties with respect to whether Memory has complied withits obligation under this Section 3.1, then such dispute shall be resolved in accordance withArticle 17. The consequences of any termination under this Section shall be as set forth inSections 16.3(e), 16.5 and Article 17.**ARTICLE 4****PAYMENTS TO NPS**     4.1 Milestones. Memory shall pay NPS $**[*]**(**[*]**dollars) upon **[*]**.          Notwithstanding the above, for each NPS Compound and Memory Compound, Memory shall pay NPS thefollowing milestones for Products and Memory Products being developed by Memory, which shall benon-refundable and non-creditable, and due and payable as follows:               Event Payment (US$)   A. (i) **[*]**         $**[*]****[*] CONFIDENTIAL TREATMENT IS REQUESTED**
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               Event Payment (US$)     (ii) **[*]**         $**[*]**     (iii) **[*]**         $**[*]**     (iv) **[*]**         $**[*]**   B. (i) **[*]**         $**[*]**     (ii) **[*]**         $**[*]**     (iii) **[*]**         $**[*]**          Each payment in this Section 4.1 shall be due and payable by Memory within **[*]**days afteroccurrence of the applicable event, with the exception of **[*]**events, in which the payments shallbe due and payable by Memory within **[*]**days after occurrence of the **[*]**event. Notwithstandinganything to the contrary, Memory will make each of such payments only once, for each NPS Compoundand/or Memory Compound for a given indication upon the first occurrence of a respective event,regardless of how many times the event may be achieved. For the avoidance of doubt, if a productconstitutes both a Product and a Memory Product, each such payment shall be due only once withrespect to such product.          In the event a milestone payment for a given event for a given NPS Compound or Memory Compoundand indication becomes due, and Memory has not made payment for such NPS Compound or MemoryCompound in such indication for a milestone listed prior to the milestone payment due, then Memoryshall pay the milestone that is due and all prior listed milestones that were not previously paid.          The costs Memory incurred for the validation of the patents in European countries for Europeanpatent application no. **[*]**or no. **[*]**pursuant to Section 13.2(b)(v) (which costs totaled, in theaggregate, $**[*]**) will be directly subtracted from owed milestone payments, starting with the **[*]**and including subsequent milestones due until validation costs incurred by Memory equals withheldmilestones. For the avoidance of doubt, as a result of such subtraction, (a) Memory has not andshall not be required to make payment of the **[*]**, and (b) the milestone payment due with respect tothe **[*]**shall be reduced from $**[*]**to $**[*]**. As set forth in Section13.2(b)(iii), Memory shall not incur or be required to pay any additional costs in connection withthe validation of the patents in European countries for European patent application no. **[*]**or no.**[*]**and, accordingly, no further subtraction beyond the subtraction described in the immediatelypreceding sentence shall be applied.     4.2 Upfront Payment. Upon execution and delivery of the Agreement, Memory shall pay to NPS aone-time nonrefundable payment in the amount of fifty thousand dollars ($50,000.00).**[*] CONFIDENTIAL TREATMENT IS REQUESTED**
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**ARTICLE 5****ROYALTIES**     5.1 Royalties.               (a) Memory shall pay to NPS a royalty payment of **[*]**% (**[*]**percent) for a given Product orMemory Product sold by Memory or its sublicensee having a Regulatory Approval, based upon the NetSales of such Product or Memory Product, as the case may be, which such Net Sales shall be subjectto adjustment as provided in this Article 5. For the avoidance of doubt, if a product constitutesboth a Product and a Memory Product, each such payment shall be due only once with respect to suchproduct.               (b) Intentionally Omitted.     5.2 Term of Royalty Payments. Memory shall calculate and make royalty payments to NPS underthis Article 5 commencing on Launch in any country. The Net Sales of a given country shall beincluded for purposes of calculating royalties under this Section, in the case of a Product or aMemory Product, for a period of ten (10) years after Launch of such Product or Memory Product insuch country, and upon the expiration of this ten (10) year period, the licenses granted hereunderby NPS shall be fully paid-up and irrevocable.     5.3 Adjustments Related to Third Party Competition. For a given Product or Memory Product ina given calendar quarter, if in a country of the Territory (a) a Third Party is sellingBioequivalent Product, and (b) Memory has an obligation to make payments under this Agreement withrespect to Net Sales of the given Product or Memory Product in such country, and (c) a Valid ClaimCovers the given Product or Memory Product in such country and (d) in such country, sales of unitsof Bioequivalent Products in aggregate total at least **[*]**percent (**[*]**%) of the aggregate sales ofunits of (A) Bioequivalent Products and (B) Products or Memory Products, as the case may be, asmeasured at the end of such calendar quarter, and (e) Memory has, if it is reasonable under thecircumstances, brought in the country and continued to diligently prosecute a patent infringementsuit against the Third Party selling the Bioequivalent Product or another in privity, then Memoryshall have the right to calculate royalties with respect to such calendar quarter by including only**[*]**percent (**[*]**%) of the amount Memory would have otherwise included for such country to calculatesales-based payments if no Bioequivalent Product existed in such country.     5.4 Adjustments Related to Third Party Payments. Memory shall be responsible for payment ofthe entire consideration owed to any Third Party pursuant to the terms of any existing or futurepatent licensing agreement entered into by Memory relating to the Product or Memory Product, as thecase may be. Memory shall have the right to deduct a maximum of **[*]**percent (**[*]**%) of theconsideration actually paid by Memory or its Affiliate to a Third Party with respect to a licenseunder a patent which Covers an NPS Compound or Memory Compound, from payments otherwise due andpayable by Memory to NPS under this Agreement.     5.5 Combination Products. In the event Memory, or its sublicensees, or its Affiliates intendto sell a Combination Product, the Parties shall meet approximately one (1) year prior tothe anticipated commercial launch of such Combination Product to negotiate in good faith and**[*] CONFIDENTIAL TREATMENT IS REQUESTED**
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agree to an appropriate adjustment to Net Sales to reflect the relative significance and value ofthe Product or Memory Product, as the case may be, and the other pharmaceutically active agent(s)contained in the Combination Product. If, after good faith negotiations (not to exceed **[*]**), theParties cannot agree to an appropriate adjustment, Net Sales shall equal **[*].**However, in no eventshall NPS receive less than **[*]**percent (**[*]**%) of the royalties it would receive for sale of theProduct or Memory Product, as the case may be, if it were not in a Combination Product.     5.6 Certain Sublicensee Payments. In the event that Memory grants a sublicense tocommercialize a Product or Memory Product under the NPS Patent Rights to a Third Party, Memoryshall pay to NPS, within **[*]**days after receipt thereof by NPS from such sublicensee, an amountequal to **[*]**. Notwithstanding anything contained herein to the contrary, the aggregate amountspaid by Memory to NPS pursuant to this Section 5.6 **[*]**shall in no event exceed $**[*]**.**ARTICLE 6****PAYMENT, REPORTING, AUDITING**     6.1 Currency and Conversion.               (a) All payments under this Agreement shall be in U.S. Dollars by wire transfer of immediatelyavailable funds in accordance with instruction or instructions from the Party being paid.               (b) Whenever calculation of Net Sales requires conversion from any foreign currency, Memoryshall convert the amount of its monthly Net Sales in foreign currencies for the countriesconcerned, using for internal foreign currency translation the monthly average rate of exchangepublished in the Wall Street Journal (or some other source agreed upon by the Parties for anyparticular country).               (c) For sublicensees in a country, when calculating the Net Sales, the sublicensee shallreport to Memory the amount of such sales within thirty (30) days from the end of the reportingperiod, after having converted each applicable monthly sales in foreign currency into US Dollarsusing the average rate of exchange published in the Wall Street Journal (or some other sourceagreed upon by the Parties for any particular country) for each respective month of the reportingperiod.     6.2 Payments. After the Launch of the Product or Memory Product in any country of theTerritory, Memory shall calculate royalty payments set forth in Article 5 **[*]**as of **[*]**. Memoryshall pay such payments **[*]**within **[*]**days after the end of each reporting period in which NetSales occur during the Agreement Term.          **[*]**days after the end of each reporting period, Memory shall deliver to NPS the followinginformation split among **[*]**and rest of world:               (a) Net Sales for each Product and Memory Product; and               (b) the royalty payments due to NPS for the reporting period.**[*] CONFIDENTIAL TREATMENT IS REQUESTED**
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          If NPS reasonably requests additional information relating to gross sales of the Products andMemory Products in the Major Market Countries, deductions therefrom to calculate Net Sales and/oradjustments thereto, Memory agrees to provide such information to NPS within a reasonable time,provided, that NPS shall have the rights to exercise such requests not more than **[*]**.          In the event Memory does not pay NPS any amounts due under this Agreement, including pursuantto Articles 4 and 5, within the applicable time period set forth herein, without limiting NPS’srights under Article 16, such payment shall bear interest, to the extent permitted by applicablelaw, at the rate of interest **[*]**from time to time, for the applicable period calculated on thenumber of days such a payment is overdue.     6.3 Taxes.               (a) NPS shall pay all applicable taxes levied on NPS under this Agreement.               (b) If provision is made in law or regulation of any country for withholding of taxes of anytype, levies on NPS or other charges against NPS with respect to any amounts payable under thisAgreement to NPS, Memory shall promptly pay such tax, levy or charge for and on behalf of NPS tothe proper governmental authority, and shall promptly furnish NPS with receipt of such payment.Memory shall have the right to deduct any such tax, levy or charge actually paid from payment dueNPS or be promptly reimbursed by NPS if no further payments are due NPS. Each Party agrees toassist the other Party in claiming exemption from such deductions or withholdings under doubletaxation or similar agreement or treaty from time to time in force and in minimizing the amountrequired to be so withheld or deducted.     6.4 Blocked Countries. If by reason of law Memory is unable to convert to U.S. Dollars aportion of the amount due by Memory under this Agreement, then Memory shall notify NPS in writingand, upon written request from NPS, Memory shall pay to NPS such portion, in the currency of anyother country designated by NPS and legally available to Memory.     6.5 Accounting.               (a) Memory shall maintain and cause its Affiliates and sublicensees to maintain books ofaccount containing all particulars that may be necessary for the purpose of calculating allpayments under this Agreement. Such books of account shall be kept at their principal place ofbusiness. NPS shall have the right to engage an independent, certified public accountant toperform, on behalf of NPS, an audit of such books and records of Memory and its Affiliates andsublicensees as is necessary to confirm any amounts payable to NPS under this Agreement for theperiod or periods requested by NPS and the correctness of any report or payments made under thisAgreement.               (b) Such audits shall be conducted during normal business hours upon reasonable prior writtennotice from NPS (minimum of thirty (30) days) in such a manner as tonot unnecessarily interfere with Memory’s normal business activities, and shall includeresults of no more than three (3) preceding calendar years prior to audit notification.**[*] CONFIDENTIAL TREATMENT IS REQUESTED**
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               (c) Such audit shall not occur more frequently than **[*]**nor more frequentlythan **[*]**with respect to records covering any specific period of time.               (d) The use of all information, data, documents and abstracts referred above shall be for thesole purpose of verifying statements or compliance with this Agreement, shall be treated as MemoryConfidential Information subject to Article 15 of this Agreement and, except in the event of adispute between the Parties regarding amounts payable hereunder or the results of any audit, neednot be retained more than **[*]**years from the end of the calendar year to which each shall pertain.Audit results shall be shared by Memory and NPS.               (e) If any audit hereunder reveals an underpayment, Memory shall promptly make up suchunderpayment. In the event that any audit performed reveals an underpayment for a **[*]**payment inexcess of **[*]**percent (**[*]**%) of the amount actually paid, such underpayment shall bear interest,to the extent permitted by applicable law, at the rate of interest **[*]**from time to time plus **[*]**percent (**[*]**%), for the applicable period calculated on the number of days such a payment isoverdue. If any audit hereunder reveals an overpayment, NPS shall promptly reimburse suchoverpayment. **[*].**               (f) The failure of NPS to request verification of any payment calculation during whichcorresponding records are required to be retained under this Section 6.5 shall be consideredacceptance of such reporting by NPS.**ARTICLE 7****PRE-CLINICAL DEVELOPMENT**     7.1 Memory, at its sole cost, shall pursue further pre-clinical development of anyPre-clinical Candidate and other preclinical candidates selected by it.     7.2 **[*]**.**ARTICLE 8****CLINICAL DEVELOPMENT**Memory, at its sole cost and option, shall (1) pursue clinical development of Product(s) and/orMemory Product(s), and (2) obtain all Regulatory Approvals which are required for such Product(s)and/or Memory Product(s) to be manufactured, developed, marketed and sold in the Territory. Duringthe Agreement Term, Memory shall provide NPS with an **[*]**summary report on or before **[*]**describingthe development of the NPS Compounds and/or Memory Compounds by Memory, its Affiliates, andsublicensees.In particular, Memory shall in such **[*]**reports, provide NPS with a written report describing thethen current status and plan, if applicable, for the development of an NPS Compound/Product and/orMemory Compound/Memory Product. Said report may be in summary form but shall becomprehensive and shall include at least (a) the name and location of each Affiliate orsub-licensee which is then conducting, or during the preceding period has conducted any licensedactivity or which is involved in any research or development utilizing NPS Compound/Product**[*] CONFIDENTIAL TREATMENT IS REQUESTED**
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and/orMemory Compound/Memory Product, (b) a reasonable summary of the status of each such research ordevelopment activity and of the plan for the same for the following calendar year without therequirement to report any experimental results and details thereof, and (c) any informationconcerning the timing of initiation of all clinical and important pre-clinical studies.**ARTICLE 9****REGULATORY AFFAIRS**Memory, at its sole cost, shall pursue all regulatory affairs in the Territory related to Productand/or Memory Product, at Memory’s option, including the preparation and filing of applications forRegulatory Approval, as well as any or all governmental approvals required to manufacture, or havemanufactured, market and sell such Products and/or Memory Products. Memory shall be responsible forpursuing, compiling and submitting all regulatory filing documentation, and for interacting withregulatory agencies, for all such Products and/or Memory Products in all countries in theTerritory. Memory, its sublicensees, or its Affiliates shall own and file all regulatory filingsand obtain all Regulatory Approvals for all Products and/or Memory Products in all countries of theTerritory.Memory, at its sole cost, shall report to appropriate authorities in accordance with localrequirements all adverse events related to use of Products and/or Memory Products worldwide.Adverse events related to the use of Product and/or Memory Product worldwide shall be in a singledatabase for each Product and/or Memory Product, centralized, held and owned by Memory.**ARTICLE 10****MANUFACTURE AND SUPPLY**     10.1 Clinical Supplies of Product and/or Memory Product. Memory shall supply at its own costall clinical supply of NPS Compounds, Memory Compounds, Product(s) and/or Memory Product(s) andplacebo to be used in the Territory during the Agreement Term, either by itself, or through a ThirdParty.     10.2 Commercial Supply. Memory shall be solely and exclusively responsible at its ownexpense for the manufacture and supply of Product and/or Memory Product for sale in the Territory,either by itself or through Third Parties.**ARTICLE 11****COMMERCIALIZATION**     11.1 Responsibilities of Memory. Except as expressly set forth in Sections 16.5(c) and16.5(d) Memory, at its own expense, shall have sole responsibility and decision making authorityfor the marketing, promotion, sale and distribution, if any, of Product and/or Memory Product inthe Territory. During the Agreement Term, Memory shall provide NPS **[*]**with **[*]**summaryreport describing the commercialization of Products and/or Memory Products in the Territory byMemory, its Affiliates and sublicensees including the name and location of each Affiliate orsub-**[*] CONFIDENTIAL TREATMENT IS REQUESTED**
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licensee which is involved in the commercialization of Product and/or Memory Product and areasonable summary of the pricing, sales and marketing activity in the Territory for the previouscalendar year and the following calendar year.**ARTICLE 12****TRADEMARKS**Memory shall own worldwide all trademarks on and in connection with Products and Memory Products,and shall, at its cost, be responsible for procurement, maintenance and enforcement of allworldwide trademarks registration on and in connection with Products and Memory Products.**ARTICLE 13****OWNERSHIP OF INTELLECTUAL PROPERTY AND PATENT RIGHTS**     13.1 Ownership of Intellectual Property.          Memory shall require all of its employees to assign all inventions related to Products and/orMemory Products made by them to Memory, and Memory shall own such inventions. Within sixty (60)days after the Execution Date, NPS shall file in the respective patent offices for recordation theappropriate name changes for all U.S. patents, foreign patents, U.S. patent applications andallowed foreign patent applications under the NPS Patent Rights to NPS.     13.2 NPS Patent Rights Prosecution and Maintenance.               (a) NPS Patent Rights. Promptly after the **[*]**, but in any event within **[*]**, NPS shall deliverto Memory all records, correspondence, and other information not in Memory’s possession that isrequired to prepare, file, prosecute (including interference and opposition proceedings) andmaintain (including interferences, re-examination, and opposition proceedings) (collectively“Handle”) the NPS Patent Rights. During the foregoing **[*]**day period, the Parties jointly shalldevelop and implement a transfer plan, including identifying all such records, correspondence andinformation, transferring the patent files from NPS’ patent counsel to Memory’s patent counsel (asselected by Memory in its sole discretion) and segregating and storing under NPS’ control, withaccess rights by Memory, all applicable laboratory notebooks and other records, correspondence andinformation relevant to the ability of Memory to Handle the NPS Patent Rights. Memory shall havethe right, but not the obligation, to Handle the NPS Patent Rights. Memory shall use reasonableefforts to consult with NPS as to how Memory will Handle the NPS Patent Rights in sufficient timebefore any action is due to allow NPS to provide comments thereon, which comments Memory mustreasonably consider if provided to Memory at least **[*]**days before such action is due.                    Should Memory decide that it does not desire to Handle a patent or patent application underNPS Patent Rights in a given country, it shall provide written notice toNPS thereof no less than **[*]**days prior to the date when the patent or patent applicationunder NPS Patent Rights would become abandoned in such country. After receiving such notice, NPS**[*] CONFIDENTIAL TREATMENT IS REQUESTED**
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may, but is not obligated, to Handle the patent or patent application under NPS Patent Rights insuch country.               (b) Patent Costs.                    (i) As of the Effective Date, **[*]**. For the avoidance of doubt, Memory and NPS acknowledge andagree that Memory has previously reimbursed NPS for costs incurred by NPS for Handling the patentsand patent applications under the NPS Patent Rights from the period of eighteen (18) months afterthe Effective Date. Within forty-five (45) days after the end of the **[*]**day period referred to inthe first sentence of Section 13.2(a), NPS shall cause to be prepared and submitted to Memory afinal bill that sets forth all reasonable patent costs and expenses payable by Memory pursuant tothis Section 13.2(b). Except as set forth in such final bill (or as otherwise may be mutuallyagreed upon by the Parties in writing), Memory shall have no further obligation or liability to NPSwith respect to such patent costs and expenses.                    (ii) For a given patent or patent application under NPS Patent Rights in a given country forwhich **[*].**At **[*]**request, **[*]**shall advise to the specific reasons for such decision. **[*]**may,in its sole discretion, continue to Handle such patent or patent application under NPS PatentRights in such country, **[*]**. If, however, a Valid Claim of such patent under NPS Patent RightsCovers a Product in such country in which Memory Launches the Product, **[*]**to Handle such patent orpatent application under NPS Patent Rights with respect to such country.                    (iii) The Parties acknowledge that pursuant to the terms of the Original Agreement (a) Memorywas required to pay the costs of validation of the patents in European countries for Europeanpatent application no. **[*]**and no. **[*]**up to the first **$[*]**(**[*]**dollars) for both applicationscombined, (b) for costs exceeding the first $**[*]**(**[*]**dollars) to a maximum of the first $**[*]**(**[*]**dollars) for both applications combined, Memory and NPS agreed to **[*]**, (c) Memory agreed to pay thecosts exceeding the first **$[*]**(**[*]**dollars) for both applications combined, and (d) Memory, at itssole discretion, selected the countries for validation, which included at the minimum for bothEuropean patent applications, **[*].**For the avoidance of doubt, Memory and NPS each acknowledge andagree that Memory has previously paid all costs required to be paid by it pursuant to Section13.2(b)(v) of the Original Agreement (which costs totaled, in the aggregate, $**[*]**) and that Memoryshall not incur or be required to make any further payment in connection with such matters, exceptfor annuity costs.                    (iv) Intentionally Omitted.                    (v) Intentionally Omitted.     13.3 Cooperation. The Parties agree to cooperate in the preparation, prosecution andmaintenance of all patent applications filed under Section 13.2, including obtaining and executingnecessary powers of attorney and assignments by the named inventors, providing relevant technicalreports to the filing Party concerning the invention disclosed in such patent application,obtaining execution of such other documents which shall be needed in the filing andprosecution of such patent applications, discussing in good faith foreign filing strategy,and, as requested, updating each other regarding the status of such patent applications.**[*] CONFIDENTIAL TREATMENT IS REQUESTED**
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     13.4 Infringement. Each Party shall promptly provide written notice to the other Party duringthe Agreement Term of any known infringement or suspected infringement of any patent or patentapplication under NPS Patent Rights by a Third Party (hereinafter “Infringement”). Each Partyshall promptly provide written notice to the other Party during the Agreement Term of any knowninfringement or suspected infringements of any patent or patent application under NPS Patent Rightsby a Third Party making, using, offering for sale, selling, or importing a 5-HT6 receptorantagonist or a product containing a 5-HT6 receptor antagonist (hereinafter “5-HT6 Infringement”).          Memory shall have the first right to bring and control any action or proceeding with respectto such 5-HT6 Infringement **[*]**and by counsel of its own choice, and NPS shall have the right, **[*]**,to be represented in any such action by counsel of its own choice. If Memory fails to bring anysuch action or proceeding with respect to 5-HT6 Infringement within (a) **[*]**days following thenotice of alleged infringement or (b) **[*]**days before the time limit, if any, set forth in theappropriate laws and regulations for the filing of such actions, whichever comes first, NPS shallhave the right, but not the obligation, to bring and control any such action **[*]**and by counsel ofits own choice, and Memory shall have the right, **[*]**, to be represented in any such action bycounsel of its own choice.          A Party that elects to bring and control an infringement action pursuant to this Section 13.4shall provide prompt written notice to the other Party of any such suit commenced or action takenby such Party.          Upon written request, the Party bringing suit or taking action (“Initiating Party”) shall keepthe other Party informed of the status of any such suit or action and shall provide the other Partywith copies of all substantive documents and communications filed in such suit or action. TheInitiating Party shall have the sole and exclusive right to select counsel for any such suit oraction.          The Initiating Party shall, except as provided below, **[*]**          If the Initiating Party believes it reasonably necessary, upon written request to the otherParty, the other Party shall join as a party to the suit or action but shall be under no obligationto participate except to the minimal extent that such participation is required as the result ofits being a named party to the suit or action and provided the Initiating Party provides **[*].**Atthe Initiating Party’s written request, the other Party shall offer reasonable assistance to theInitiating Party at no charge to the Initiating Party except for **[*].**The other Party shall havethe right to participate and have its own representation in any such suit or action at its ownexpense.          The Initiating Party shall have the right to control settlement; provided, however, that nosettlement shall be entered into without the written consent of the other Party, not to beunreasonably withheld.     13.5 Patent Infringement Suit by Third Party. In the event Memory is named or joined as aparty in a suit or action for patent infringement because of its exercise of a license grantedunder the Agreement, Memory shall defend the suit **[*]**.**[*] CONFIDENTIAL TREATMENT IS REQUESTED**
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     13.6 Hatch-Waxman. Notwithstanding anything to the contrary, should a Party receive acertification for a Product pursuant to the Drug Price Competition and Patent Term Restoration Actof 1984 (Public Law 98-417), as amended, or its equivalent in a country other than the UnitedStates of America, then such Party shall immediately provide the other Party with a copy of suchcertification. Memory shall have twenty-five (25) days from the date on which it receives orprovides a copy of such certification to provide written notice to NPS (“H-W Suit Notice”) whetherMemory will bring suit, **[*]**, within a forty-five (45) day period from the date of suchcertification. Should such twenty-five (25) day period expire without Memory bringing suit orproviding such H-W Suit Notice, then NPS shall be free to immediately bring suit in its name. IfMemory brings suit, at Memory’s written request, NPS agrees to be named as a party to such suit.At the initiating Party’s written request, **[*].**The other Party shall have the right toparticipate and have its own representation in any such suit or action **[*].**     13.7 Memory Patent Rights. For the avoidance of doubt, during and after the termination ofthis Agreement, Memory shall own the Memory Compounds, Memory Products, Memory Patent Rights andall inventions related to the Memory Compounds, Memory Products and/or Covered by the Memory PatentRights and, except as specifically provided in this Agreement, does not grant any license, interestor other right with respect thereof to NPS. Memory shall have the right, but not the obligation,at its expense, to Handle the Memory Patent Rights and/or to bring and control an action orproceeding with respect to any Memory Patent Rights, at its own expense, without obligation ornotice to NPS.**ARTICLE 14****REPRESENTATIONS AND WARRANTIES**     14.1 Representations and Warranties of Both Parties.               (a) Each Party warrants and represents to the other Party that it has the full right andauthority to enter into this Agreement and that it is not aware of any impediment which wouldinhibit its ability to perform the terms and conditions imposed on it by this Agreement.     14.2 Representations and Warranties of NPS.               (a) Corporate Action. NPS represents and warrants to Memory that all corporate action on thepart of NPS, its officers, directors and stockholders necessary for (i) the authorization,execution and delivery of this Agreement and (ii) the performance of all obligations of NPShereunder has been taken and this Agreement constitutes the legal and binding obligation of NPS,enforceable against NPS in accordance with its terms.               (b) No Conflict. NPS represents and warrants to Memory that the execution of this Agreementand the performance of the transactions contemplated by this Agreement by NPS will not conflictwith or result in a breach of any of the terms, conditions orprovisions of, or constitute a default under any agreement or other instrument to which NPS isa party or by which it or any of its property is bound.**[*] CONFIDENTIAL TREATMENT IS REQUESTED**
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               (c) Right to Grant Licenses. NPS represents and warrants to Memory that it has the right togrant Memory the licenses and sublicenses that NPS hereby grants to Memory under this Agreement.NPS represents and warrants to Memory that to the best of its knowledge all Patent Rights owned orcontrolled by NPS that are directed to 5-HT6 selective receptor antagonists are included inSchedule D.               (d) No Material Misstatements. NPS warrants and represents to Memory that to the best of itsknowledge (i) it has not intentionally failed to disclose any information which would be materialto Memory entering into this Agreement; and (ii) it has provided correct and complete copies of alldocuments furnished to Memory.               (e) NPS Development of 5-HT6 Receptor Antagonists. NPS warrants and represents that it doesnot have an active program to develop 5-HT6 receptor antagonists nor does it, as of the EffectiveDate and as of the Execution Date, have any plans to pursue such a program.     14.3 Representations and Warranties of Memory. Memory represents and warrants to NPS that allcorporate action on the part of Memory, its officers, directors and stockholders necessary for (i)the authorization, execution and delivery of this Agreement and (ii) the performance of allobligations of Memory hereunder has been taken and this Agreement constitutes the legal and bindingobligation of Memory, enforceable against Memory in accordance with its terms. The execution ofthis Agreement and the performance of the transactions contemplated by this Agreement by Memorywill not conflict with or result in a breach of any of the terms, conditions or provisions of, orconstitute a default under any agreement or other instrument to which Memory is a party or by whichit or any of its property is bound.     14.4 Disclaimer. THE FOREGOING REPRESENTATIONS AND WARRANTIES ARE IN LIEU OF ALL OTHERREPRESENTATIONS AND WARRANTIES NOT EXPRESSLY SET FORTH HEREIN. NPS AND MEMORY DISCLAIM ALL OTHERREPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS OR IMPLIED, WITH RESPECT TO EACH OF THEIR RESEARCH,DEVELOPMENT AND COMMERCIALIZATION EFFORTS HEREUNDER, INCLUDING, WITHOUT LIMITATION, WHETHER THEPRODUCTS OR MEMORY PRODUCTS CAN BE SUCCESSFULLY DEVELOPED OR MARKETED, THE ACCURACY, PERFORMANCE,UTILITY, RELIABILITY, TECHNOLOGICAL OR COMMERCIAL VALUE, COMPREHENSIVENESS, MERCHANTABILITY ORFITNESS FOR ANY PARTICULAR PURPOSE WHATSOEVER OF THE PRODUCTS OR MEMORY PRODUCTS. IN NO EVENTSHALL EITHER NPS OR MEMORY BE LIABLE FOR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGESARISING OUT OF THIS AGREEMENT BASED ON CONTRACT, TORT OR ANY OTHER LEGAL THEORY.**ARTICLE 15****CONFIDENTIAL INFORMATION**     15.1 Treatment of Confidential Information. In carrying out rights and obligations under thisAgreement, the Parties will be sharing proprietary information (“Confidential**[*] CONFIDENTIAL TREATMENT IS REQUESTED**
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Information”) witheach other. Except as permitted by this Agreement, each Party shall and shall cause its Affiliatesto treat Confidential Information received from the other Party as it treats its own proprietaryinformation. In particular, it shall not disclose, divulge or otherwise communicate suchConfidential Information to Third Parties, or use it for any purpose except pursuant to and inorder to carry out its obligations under this Agreement during the Agreement Term and for a periodof **[*]**years thereafter; provided that, each Party (i) may disclose the Confidential Information tosuch of its directors, officers, employees, Affiliates, consultants, subcontractors, sublicenseesor agents (hereinafter “Other Parties”) to the extent reasonably necessary to carry out itsobligations under this Agreement, provided such Other Parties are bound to confidentiality termsequivalent to those herein and (ii) hereby agrees to exercise every reasonable precaution toprevent and restrain the unauthorized disclosure or use of Confidential Information.     15.2 Release from Restrictions. The provisions of Section 15.1 shall not apply to anyConfidential Information which:               (a) was known or used by the party receiving the Confidential Information (“Receiving Party”)or its Affiliates prior to its date of disclosure to the Receiving Party or its Affiliates by theparty disclosing the Confidential Information (“Disclosing Party”) or its Affiliates, as evidencedby the prior written records of the Receiving Party or its Affiliates, provided such ReceivingParty did not know of such Confidential Information through confidential provisions with NPS orAffiliates; or               (b) either before or after the date of the disclosure to the Receiving Party or itsAffiliates, is lawfully disclosed to the Receiving Party or its Affiliates by a Third Partyrightfully in possession of the Confidential Information; or               (c) either before or after the date of the disclosure to the Receiving Party or itsAffiliates, becomes published or generally known to the public through no fault or omission on thepart of the Receiving Party or its Affiliates, but such inapplicability applies only after suchinformation is published or becomes generally known; or               (d) is independently developed by the Receiving Party or its Affiliates without reference toor reliance upon any Confidential Information of the Disclosing Party or its Affiliates; or               (e) is reasonably determined to be required to be disclosed by the Receiving Party or itsAffiliates to comply with applicable securities or other laws, to defend or prosecute litigation orto comply with governmental regulations, provided that, the Receiving Party or its Affiliates usesall reasonable efforts to provide prior written notice of such disclosure to the Disclosing Partyor its Affiliates and to take reasonable and lawful actions to not be required to disclose and/orminimize the degree of such disclosure.               (f) is disclosed to a Party’s financial sources or potential acquirors of its stock or assets(directly or indirectly) so long as, with respect to a potential purchase the potential acquirer orfinancial source executes a confidentiality agreement which is at least asrestrictive as the provisions of this Article 15 (with the exception of the term of theobligations set forth in this Article 15, which shall be at least **[*]**years).**[*] CONFIDENTIAL TREATMENT IS REQUESTED**
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     15.3 Exceptions. The restrictions set forth in this Article 15 shall not prevent either Partyfrom (i) preparing, filing, prosecuting or maintaining a patent application or its resultingpatents related to a Product or Memory Product in accordance with the terms of this Agreement or(ii) disclosing Confidential Information to governmental agencies to the extent required ordesirable to secure Regulatory Approvals for a Product or Memory Product.     15.4 Publications. During the Agreement Term, the following provisions set forth insubsections (a) and (b) below shall apply with respect to the disclosure in scientific journals,publications or scientific presentations by any Party relating to any scientific work relating toNPS Compounds, and in the case of Memory Compounds the provisions of subsection (c) set forth belowshall apply:               (a) A Party (the “Publishing Party”) shall provide the other Party with a copy of any proposedpublication relating to the work performed and/or the results achieved in the conduct of thedevelopment of a NPS Compound at least **[*]**days prior to submission for publication so as toprovide such other Party an opportunity to recommend any changes it reasonably believes arenecessary to preserve the Confidential Information belonging in whole or in part to such otherParty, and the incorporation of such recommended changes shall not be unreasonably refused;               (b) If such other Party in writing notifies (“Notice”) the Publishing Party, within **[*]**daysof receipt of the copy of the proposed publication, that such publication in its reasonablejudgment (i) contains an Invention for which the other Party reasonably desires patent protectionor (ii) disclosure to competitors could reasonably be expected to have a material adverse effect onthe commercial value of any Confidential Information, the Publishing Party shall prevent suchpublication or delay such publication for a mutually agreeable period of time. In the case ofInventions, a delay shall be for a period reasonably sufficient to permit the timely preparationand filing of a patent application(s) or application(s) on the Invention, and in no event less than**[*]**days from the date of Notice.               (c) Memory solely shall initiate all proposed publications relating to the work performedand/or the results achieved in the conduct of the development of a Memory Compound, will provideNPS with a copy of such proposed publication at least **[*]**days prior to the submission of thepublication, and shall reasonably consider comments by NPS before disclosure.**ARTICLE 16****TERM AND TERMINATION**     16.1 Agreement Term. The Agreement Term shall commence on the Effective Date and end, unlessearlier terminated upon the mutual agreement of the Parties or in accordance with the provisions ofthis Article 16, on the date of expiration of all royalty and other payment obligations (the“Expiration Date”) under this Agreement. Upon the occurrence of the Expiration Date, the licensegranted under this Agreement to make, have made, use, have used,offer for sale, sell, import, export, register and/or market Products and/or Memory Productsshall be fully paid-up.**[*] CONFIDENTIAL TREATMENT IS REQUESTED**
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     16.2 Termination for Breach. Each Party (“Non-Breaching Party”) shall be entitled toterminate this Agreement by written notice to the other Party (“Breaching Party”) in the event thatthe Breaching Party is in default of any of its material obligations hereunder (other than adefault by Memory of its obligations pursuant to Article 3 hereof, which shall be governed solelyby Section 16.3(e) below) and fails to remedy such default within **[*]**days (**[*]**) days for paymentdefaults) after provision of written notice thereof by the Non-Breaching Party. Any such noticeshall specifically state that the Non-Breaching Party intends to or reserves the right to terminatethis Agreement in the event that the Breaching Party shall fail to timely remedy the default.          The effective date of termination under this Section for breach of a material obligation shallbe the date **[*]**days after provision of written notice thereof by the Non-Breaching Party.          In the event Memory does not pay any full payment by reason of a good faith dispute as towhether such payment is due pursuant to the terms of this Agreement, NPS shall not have the rightto terminate this Agreement as a result of such nonpayment until resolution of the dispute pursuantto Article 17.     16.3 NPS’s Right to Terminate.               (a) Intentionally Omitted.               (b) Intentionally Omitted.               (c) Intentionally Omitted.               (d) Intentionally Omitted.               (e) In the event that both Memory is in default of Article 3 hereof and Memory fails to remedysuch default and failure within **[*]**after provision of written notice thereof by NPS, then NPSshall have the unilateral right to terminate the Agreement **[*]**. The effective date of terminationshall be **[*]**days after **[*]**.     16.4 Memory’s Right to Terminate. In the event that Memory determines it has a scientificand/or technical problem relating to the development and/or Regulatory Approval of NPS Compound,Memory Compound, Product and/or Memory Product, or an economic and/or business problem relating tothe development, Regulatory Approval, and/or marketing of any NPS Compound, Memory Compound,Product and/or Memory Product, Memory shall have the unilateral right to terminate this Agreementupon written notice to NPS. The effective date of termination will be **[*]**days after provision ofwritten notice by Memory.     16.5 Consequences of Termination. Upon any termination of this Agreement in its entiretypursuant to Sections 16.1—16.4, or termination of this Agreement by NPS in its entirety, therights and licenses of any kind or nature granted by NPS to Memory under this Agreementshall terminate on the effective date of termination. In the event of any such termination,the following shall apply:**[*] CONFIDENTIAL TREATMENT IS REQUESTED**
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               (a) Memory shall, upon NPS’s written request, assign and transfer to NPS, or its Affiliates asrequested by NPS, at no expense to NPS, or its Affiliates, and free of any liens, pledges orsecurity interests other than those incurred in the commercialization of the Product, all ofMemory’s right, title and interest in and to (i) all trademarks and trademark applications used orintended for use specifically for the relevant Product(s), (ii) all regulatory filings (such asINDs and drug master files), Regulatory Approvals, and clinical trial agreements (to the extentassignable and not cancelled) for the relevant Product(s), and (iii) all data, including clinicaldata, materials and information of any kind or nature whatsoever, in Memory’s possession or in thepossession of its Affiliates or sub-licensees, or its or their respective agents, related to therelevant Product(s), (iv) all rights relating to the infringement of NPS Patent Rights, related tothe relevant Product(s) and (v) all patents/patent applications filed, owned or controlled byMemory, its Affiliates or sublicensees Covering the Product(s). Without limiting the generality ofthe preceding sentence, NPS shall, upon such transfer, have the right to disclose such filings,approvals and data to (i) governmental agencies of the country or region to the extent required ordesirable to secure government approval for the development, manufacturing, marketing or sale ofProduct in the country or region, (ii) Third Parties acting on behalf of NPS, its Affiliates orsublicensees, to the extent reasonably necessary or desirable for the development, manufacture,marketing or sale of Product in the country or region, and (iii) Third Parties to the extentreasonably necessary or desirable to develop, manufacture, market, or sell Product in the countryor region. All such filings, approvals, patents/patent applications, proceedings, rights and datatransferred to NPS pursuant to this Section 16.5 shall be deemed to be NPS ConfidentialInformation.               (b) Upon NPS’s written request, Memory shall supply, or cause to be supplied, to NPS, itsAffiliates or its licensee’s the clinical and/or commercial supplies of Product(s), pursuant to asupply agreement to be negotiated in good faith by the Parties, provided that (i) such requirementsshall be supplied to NPS, its Affiliates or its licensee at Memory’s direct manufacturing costs andallocation of manufacturing overhead, and (ii) Memory’s supply obligation shall not continue formore than **[*]**after such termination, and (iii) Memory shall maintain the same Product(s) qualityand specifications as immediately prior to notice of termination, and (iv) as to other terms, suchagreement shall be reasonably consistent with Memory’s other arm’s length supply agreements, and(v) NPS shall use reasonable best efforts to effect a transfer as soon as practicable of Product(s)manufacturing activities from Memory to another supplier. In addition, Memory shall also transferto NPS and its designated supplier a manufacturing transfer package that will enable NPS or suchdesignated supplier to manufacture the Product(s) in a timely manner.               (c) Subject to Section 16.5(d), in the event any NPS Compound or Product is commercialized byNPS or its licensee, which NPS Compound or Product has completed **[*]**, then NPS shall pay a Royaltyon Net Sales of Products of **[*]**for the longer of **[*]**years from first Launch or end of patentprotection in a country. Thereafter, the license is fully paid up and irrevocable.               (d) In the event any NPS Compound or Product is commercialized by NPS or its licensee, whichNPS Compound or Product has completed **[*]**, in lieu of the amount set forth in Section 16.5(c), thenNPS shall pay a Royalty on Net Sales of Products of **[*]**for the**[*] CONFIDENTIAL TREATMENT IS REQUESTED**
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longer of **[*]**years from first Launch or end of patent protection in a country. Thereafter,the license is fully paid up and irrevocable.               (e) If, upon termination of this Agreement by NPS pursuant to Section 16.3, NPS notifiesMemory in writing that NPS desires to obtain a license with respect to the Memory Compounds, NPSshall have the right to negotiate with Memory for not more than **[*]**days the right to obtain suchlicense, provided that Memory’s only obligation shall be to negotiate in good faith (but, byexample, not to reach agreement).               (f) Memory shall take prompt actions, including the execution of such instruments, agreementsand documents, as are necessary or desirable to effect its obligations described in Sections16.(4)(a) and (b). It is agreed such transfers and actions shall be completed in a manner thatwill permit NPS to continue without interruption the business of developing, manufacturing,marketing and selling the Product(s).     16.6 Royalty and Payment Obligations. Termination of this Agreement by either Party for anyreason will not release a Party from any obligation to pay royalties or make any payments, whichwere accrued prior to the effective date of termination (including for sales made and eventsachieved under Article 4, prior to the date of termination). However, except as specificallyprovided in the immediately following sentence, termination of this Agreement by either Party forany reason will release a Party from any obligation to pay royalties or make any payments, whichwould have otherwise become accrued after the effective date of termination. Solely upontermination by NPS of this Agreement pursuant to Section 16.2 or Section 16.3 or by Memory of thisAgreement pursuant to Section 16.4, Memory’s obligation to make royalty payments with respect toMemory Products (but not, for the avoidance of doubt, with respect to Products) which would haveotherwise terminated from and after the effective date of termination pursuant to Section 16.2,Section 16.3 or Section 16.4, as the case may be, shall continue as provided in the Agreement.     16.7 Survival of Obligations. Section 2.2(d), Article 6 (except for Section 6.2), Section13.1, Section 13.7, Article 15, Section 16.5, Section 16.6, Section 16.7, Article 17, Article 18,and any definitions used in such Section of Article, shall survive the termination of thisAgreement in its entirety.**ARTICLE 17****ARBITRATION**Any dispute, controversy or claim (“Dispute”) arising out of or in relation to this Agreement, orthe breach, termination or invalidity thereof, that cannot be settled amicably by the Parties aftera good faith discussion to resolve the Dispute by the appropriate officers of the Parties, shall besubmitted by either Party to arbitration conducted in accordance with the rules then in effect ofthe American Arbitration Association (“AAA”). Arbitration shall take place in Newark, New Jerseyand shall be conducted by three (3) arbitrators, one of whom shall be designated by each Party, andthe third selected by the other two (2) arbitrators, all within the time limits established by thethen existing rules of the AAA. If the two (2) designated arbitrators are unable to agree upon athird arbitrator by two (2) months after submission of the matter to arbitration, the AAA shallselect such third arbitrator within three (3) months of such original submission. The written**[*] CONFIDENTIAL TREATMENT IS REQUESTED**
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decision of the arbitrators shall be made within one (1) year of the selection of the thirdarbitrator and shall be final and binding on the parties and may be enforced in any court havingjurisdiction over the Parties or their current assets. The award rendered by the arbitrators shallinclude the cost of arbitration, reasonable attorneys’ fees and reasonable costs for expert andother witnesses, and in the event of a termination a transition procedure, including theperformance of transition services by Memory, so as to maintain the value of the assets beingtransferred to NPS and, to the extent contemplated by Section 16.5, permit NPS to conduct thebusiness being transferred to it. The parties shall be entitled to discovery as provided in theFederal Rules of Civil Procedure. If the issues in dispute involve scientific or technicalmatters, at least one of the arbitrators chosen hereunder shall have educational training and/orexperience sufficient to demonstrate a reasonable level of knowledge in the Field andpharmaceutical drug development. Notwithstanding the preceding provisions of this Article 17,with respect to any breach or threatened breach of this Agreement of Section 15.1, 16.2 or anyother provision where a Party would not be appropriately compensated by the payment of money, aparty has a right to seek injunctive relief from any court of competent jurisdiction to enjoin suchbreach or threatened breach and/or to seek specific performance.In the event of a Dispute, a Party shall have no right to toll or delay any obligation in thisAgreement unrelated to the Dispute as a result of the Dispute. By way of example, if Memory owesNPS $2,000,000 and claims a $1,000,000 payment is not due by reason of breach of NPS, then Memoryshall pay the $2,000,000, and the parties will resolve such $1,000,000 Dispute pursuant to Article17.**ARTICLE 18****MISCELLANEOUS**     18.1 Indemnification.               (a) Memory agrees to defend NPS and the other NPS Indemnified Parties at Memory’s cost andexpense, and will indemnify and hold NPS and its directors, officers, employees and agents (the“NPS Indemnified Parties”) harmless from and against any claims, losses, costs, damages, fees orexpenses arising out of or otherwise relating to (i) activities of Memory and its Affiliates orsublicensees in the conduct of the License, (ii) the development, manufacture, use, offer for sale,sale or other disposition of any Product by Memory, its Affiliates or sublicensees, and each oftheir distributors, representatives or anyone in privity therewith, or (iii) the gross negligenceor willful misconduct of Memory, its Affiliates, sublicensees, distributors, representatives oranyone in privity therewith. In the event of any such claim against the NPS Indemnified Parties bya Third Party, NPS shall promptly notify Memory in writing of the claim (provided that any failureor delay to notify shall not excuse any obligations of Memory except to the extent Memory isactually prejudiced thereby) and Memory shall solely manage and control, at its sole expense, thedefense of the claim and its settlement provided further that Memory shall not settle any suchclaim, if such settlement may have an adverse effect on NPS, without the prior written consent ofNPS, which consent shall not be unreasonably withheld. The NPS Indemnified Parties shall cooperatewith Memory and may, at their option and expense, be represented in any such action or proceeding.Memory shall not be**[*] CONFIDENTIAL TREATMENT IS REQUESTED**
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liable for any litigation costs or expenses incurred by the NPS Indemnified Parties withoutMemory’s written authorization.               (b) NPS agrees to defend Memory and the other Memory Indemnified Parties at NPS’s cost andexpense, and will indemnify and hold Memory and its directors, officers, employees and agents (the“Memory Indemnified Parties”) harmless from and against any claims, losses, costs, damages, feesand expenses arising out of any claim, arising out of or otherwise relating to (i) activities ofNPS in the conduct of the License, (ii) the development, manufacture, use, offer for sale, sale orother disposition of any Product by NPS, its Affiliates, licensees other than Memory, sublicenseesand each of their distributors, representatives or anyone in privity therewith, and (iii) the grossnegligence or willful misconduct of NPS, its Affiliates, licensees, distributors, representativesor anyone in privity therewith. In the event of any such claim against the Memory IndemnifiedParties by an Independent Third Party, Memory shall promptly notify NPS in writing of the claim(provided that any failure or delay to notify shall not excuse any obligation of NPS except to theextent NPS is actually prejudiced thereby) and NPS shall solely manage and control, at its soleexpense, the defense of the claim and its settlement provided further that NPS shall not settle anysuch claim if such settlement may have an adverse effect on Memory without the prior writtenconsent of Memory, which consent shall not be unreasonably withheld. The Memory IndemnifiedParties shall cooperate with NPS and may, at their option and expense, be represented in any suchaction or proceeding. NPS shall not be liable for any litigation costs or expenses incurred by theMemory Indemnified Parties without NPS’s written authorization.     18.2 Each Party shall to the extent consistent with applicable laws and regulations limit thedisclosure of the financial terms set forth in this Agreement (such as by requesting confidentialtreatment of such terms in documents required to be filed with the US Securities and ExchangeCommission). Neither Party shall originate any publicity, news release, or other publicannouncement (with the exception of disclosures in scientific journals, publications, or scientificpresentations that will be controlled by Section 15.4), written or oral, relating to this Agreement(including without limitation, the terms of this Agreement) without the prior approval of the otherParty (such approval not to be unreasonably withheld) except solely to the extent a Partyreasonably believes same is otherwise required by law. In the event prior approval is not providedwithin **[*]**days of notice of the publicity, the Party originating the publicity may proceed withthe publicity.     18.3 Force Majeure. Neither Party to this Agreement shall be responsible to the other Partyfor nonperformance or delay in performance of the terms or conditions of this Agreement due to actsof God, acts of governments, war, riots, strikes, accidents in transportation, or other causesbeyond the reasonable control of such Party, but such force majeure shall toll any and allobligations and time periods for so long as such force majeure continues.     18.4 Bankruptcy. All licenses (and to the extent applicable rights) granted under or pursuantto this Agreement by NPS to Memory are, and shall otherwise be deemed to be, for purposes ofSection 365(n) of Title 11, US Code (the “Bankruptcy Code”), licenses of rights to “intellectualproperty” as defined under Section 101(60) of the Bankruptcy Code. Unless Memory elects toterminate this Agreement under Article 16, the Parties agree that Memory, as a licensee orsublicensee of such rights under this Agreement, shall retain and may fully exercise**[*] CONFIDENTIAL TREATMENT IS REQUESTED**
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all of its rights and elections under the Bankruptcy Code, subject to the continuedperformance of its obligations under this Agreement.     18.5 Governing Law. This Agreement shall be governed by and interpreted in accordance with thelaws of New Jersey without giving effect to principles of conflicts of law.     18.6 Waiver. The waiver by a Party of a breach or a default of any provision of this Agreementby the other Party shall not be construed as a waiver of any succeeding breach of the same or anyother provision, nor shall any delay or omission on the part of a Party to exercise or avail itselfof any right, power or privilege that it has or may have hereunder operate as a waiver of anyright, power or privilege by such Party.     18.7 Notices. Any notice or other communication in connection with this Agreement must be inwriting and may be given by any of the following methods: (i) personal delivery against a signedreceipt; (ii) registered or certified mail, postage prepaid, return receipt requested; or (iii) byovernight delivery service which obtains a signed receipt. Notice shall be effective whendelivered to the addressee at the address listed below or such other address as the addressee shallhave specified in a written notice actually received by the addresser.     If to Memory:               Memory Pharmaceuticals Corp.