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AMENDED AND RESTATED
STRATEGIC ALLIANCE AGREEMENT
 (Nicotinic Alpha-7 Program)
  among
  F. Hoffmann-La Roche Ltd
  and Hoffmann-La Roche Inc.
  and
  Memory Pharmaceuticals Corp.




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Table of Contents
 PageARTICLE 1.
    
    DEFINITIONS
    
    
    1ARTICLE 2.
    
    GRANTS
    
    
    8ARTICLE 3.
    
    DILIGENCE
    
    
    10ARTICLE 4.
    
    PAYMENTS TO MEMORY
    
    
    13ARTICLE 5.
    
    ROYALTIES
    
    
    13ARTICLE 6.
    
    PAYMENT, REPORTING, AUDITING
    
    
    18ARTICLE 7.
    
    GOVERNANCE; STRATEGIC ALLIANCE
    
    
    20ARTICLE 8.
    
    INTENTIONALLY OMITTED
    
    
    24ARTICLE 9.
    
    CLINICAL DEVELOPMENT AND REGULATORY MATTERS
    
    
    24ARTICLE 10.
    
    MANUFACTURE AND SUPPLY
    
    
    26ARTICLE 11.
    
    COMMERCIALIZATION
    
    
    26ARTICLE 12.
    
    TRADEMARKS
    
    
    26ARTICLE 13.
    
    OWNERSHIP OF INTELLECTUAL PROPERTY AND PATENT RIGHTS
    
    
    26ARTICLE 14.
    
    REPRESENTATIONS AND WARRANTIES
    
    
    33ARTICLE 15.
    
    CONFIDENTIAL INFORMATION
    
    
    35ARTICLE 16.
    
    TERM AND TERMINATION
    
    
    38ARTICLE 17.
    
    ARBITRATION
    
    
    43ARTICLE 18.
    
    MISCELLANEOUS
    
    
    43
  SCHEDULE 1
    
    COMPOUND 3454 DATA AND REPORTSSCHEDULE 2
    
    INTENTIONALLY OMITTEDSCHEDULE 3
    
    [*]GUIDELINES FOR COMPOUNDSSCHEDULE 4
    
    END OF PHASE I CRITERIAEXHIBIT A
    
    WORKPLANEXHIBIT B
    
    PAYMENTS WITH RESPECT TO 3454 PRODUCTSEXHIBIT C
    
    PAYMENTS WITH RESPECT TO MEMORY PRODUCTSEXHIBIT D
    
    PAYMENTS WITH RESPECT TO COLLABORATION PRODUCTSEXHIBIT E
    
    ROYALTIES WITH RESPECT TO 3454 PRODUCTSEXHIBIT F
    
    ROYALTIES WITH RESPECT TO MEMORY PRODUCTS
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EXHIBIT G
    
    ROYALTIES WITH RESPECT TO COLLABORATION PRODUCTSEXHIBIT H
    
    INTENTIONALLY OMITTEDEXHIBIT I
    
    MEMORY PATENT RIGHTSEXHIBIT J
    
    MEMORY PATENT RIGHTS PRIMARILY APPLICABLE TO MEMORY SCREENING TECHNOLOGYEXHIBIT K
    
    HEADS OF AGREEMENT FOR CO-PROMOTION OF 3454 PRODUCTEXHIBIT L
    
    INCLUDED ROCHE COMPOUNDS
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AMENDED AND RESTATED STRATEGIC ALLIANCE AGREEMENT
 Roche Memory Agreement
 INTRODUCTION
 1.
    
    Memory has a research and development program relating to the neuronal nicotinic alpha-7
receptor (Memorys Program), and owns related intellectual property rights.2.
    
    Roche has a research and development program relating to the neuronal nicotinic alpha-7
receptor, and owns related intellectual property rights (Roches Program and
together with Memorys Program, the Program).3.
    
    Roche has expertise in the research, development, manufacture and commercialization of
pharmaceutical products.4.
    
    Memory and Roche previously entered into a Strategic Alliance Agreement dated August 19, 2003
with respect to Memorys Program (the Original Strategic Alliance Agreement) and
Memory and Roche desire to amend and restate the Original Strategic Alliance Agreement in its
entirety.5.
    
    In consideration of the mutual covenants and promises contained in this Agreement and other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
Memory and Roche hereby amend and restate the Original Strategic Alliance Agreement in its
entirety and agree as follows:
 Article 1. Definitions
  1.1
    
    Affiliate means (a) a business entity which owns, directly or indirectly, at least
fifty percent (50%) of the voting shares or other means of control of a Party; or (b) a
business entity in which at least fifty percent (50%) of the voting shares or other means of
control are owned by a Party, either directly or indirectly; or (c) a business entity, the
majority ownership of which is directly or indirectly common to the majority ownership of a
Party. Anything to the contrary in this paragraph notwithstanding, [*]a Delaware
corporation, shall not be deemed an Affiliate of Roche unless Roche provides written notice to
Memory of its desire to include [*]as an Affiliate of Roche. Notwithstanding
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the preceding provisions, once an entity ceases to be an Affiliate, then such entity shall,
without any further action, cease to have any rights, including license and sublicense
rights, under this Agreement that it has by reason of being an Affiliate.If [*]does not agree to be bound by the terms and conditions of this Agreement, then [*]
shall have none of the rights and obligations of an Affiliate of Roche under this Agreement,
and [*]shall be treated as a Third Party under this Agreement and, accordingly, Roche may
not grant a sublicense to [*]except as provided in Section 2.4 hereof.1.2
    
    Agreement Term means the term of this Agreement, more fully described in Section
16.2.1.3
    
    Bioequivalent Product means, with respect to a given Product sold in a given
country of the Territory by Roche, its Affiliate or sublicensee, a product sold by a Third
Party in such country containing the same or similar compound (or an acid, salt or ester
thereof) as such Product.1.4
    
    Change of Control means (i) the sale, lease, exchange, transfer or other
disposition (including, without limitation, by merger, consolidation or otherwise) of assets
constituting all or substantially all of the assets of the company and its subsidiaries, taken
as a whole, to a person (or entity) or group of persons (or entities) acting together, (ii)
any merger, consolidation or other business combination or refinancing or recapitalization of
the company as a result of which the voting securities of the continuing or surviving entity
issued in respect of the companys voting securities outstanding immediately prior to the
transaction represent less than [*]% of the total issued and outstanding voting securities of
the continuing or surviving entity immediately following such transaction, (iii) any
transaction or series of transactions in or as a result of which any person (as that term is
defined in Sections 3(a)(9) or 13(d) of the Securities Exchange Act of 1934, as amended (the
1934 Act)) becomes the beneficial owner (as that term is defined in Rule 13d-3 under the
1934 Act), directly or indirectly, of securities of the company representing [*]% or more of
the total voting power represented by the companys then outstanding voting securities, and
(iv) whether by virtue of an actual or threatened proxy contest (including a consent
solicitation) or any merger, reorganization, consolidation or similar transaction persons who
are directors of the company immediately prior to such proxy contest or the execution of the
agreement pursuant to which such transaction is consummated (other than a director whose
initial assumption of office was in connection with a prior actual or threatened proxy
contest) cease to constitute [*]of the Board of Directors of the company or any successor
entity immediately following such proxy contest or the consummation of such transaction.1.5
    
    Collaboration Compound means (a) a compound (or a prodrug or metabolite thereof)
other than a Memory Compound or Compound 3454, which is: (i) a nicotinic alpha-7 agonist [*]
that is conceived, acquired or Controlled by either Party prior to the date hereof and (ii)
has previously been demonstrated by either Party to have Threshold Activity prior to the
Effective Date or during the Extended Period [*]or (b) a compound (or a prodrug or metabolite
thereof), other than a Memory Compound or Compound
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3454, which is: (i) a nicotinic alpha-7 agonist [*]is conceived, acquired or Controlled by
either party after the date hereof and prior to the end of the Extended Period and (ii)
demonstrated by either Party to have Threshold Activity prior to the end of the Extended
Period.1.6
    
    Collaboration Patent Rights means all Patent Rights other than Memory Patent Rights
that Memory and/or Roche owns or Controls during the Agreement Term that Cover any
Collaboration Compound and/or relating to any other invention conceived, acquired or
Controlled by either Party during the Extended Period.1.7
    
    Collaboration Product means any pharmaceutical product that includes, in whole or
as a component, a Collaboration Compound as an active ingredient thereof.1.8
    
    Combination Product means any product containing both a pharmaceutically active
agent which causes it to be considered a Product and one or more other pharmaceutically active
agents which are not Products.1.9
    
    Composition of Matter Claim means, for a given Product in a given country of the
Territory, a Valid Claim of a Memory Patent Right and/or a Collaboration Patent Right that
Covers the molecule per se of any compound that is included in such Product, in whole or as a
component thereof, as an active ingredient of such Product.1.10
    
    Compound means any Memory Compound, Collaboration Compound or, from and after the
date that Roche obtains a License to Compound 3454 pursuant to Section 2.1 hereof, Compound
3454.1.11
    
    Compound 3454 means the compound developed by Memory, designated as compound 3454
[*].1.12
    
    Control (including the variations such as Controls or Controlled) means with
respect to a Party and as to any material, data, information or intellectual property right,
that such Party owns, co-owns or has a license to such material, data, information or
intellectual property right and has the ability to grant access a license, or a sublicense to
such material, data, information or intellectual property right to the other Party and its
Affiliates and Sublicensees for use or application as provided herein, without violating an
agreement with, or infringing any rights of, a Third Party.1.13
    
    Cover (including the variations such as Covered, Coverage or Covering) shall
mean that the making, using, offering for sale, selling, importing or exporting of a given
product would infringe a claim of a Patent Right in the absence of a License under such Patent
Right. The determination of whether a product is Covered by a particular Patent Right shall
be made on a country-by-country basis.1.14
    
    Effective Date means the date that all conditions subsequent under Section 16.1
have occurred provided that if Section 16.1 is inapplicable, Effective Date means the date on
which this Agreement was last executed by Memory or Roche.1.15
    
    End of Phase I means the date that all Phase I clinical trials have been completed.
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1.16
    
    End of Phase IIa means the date that all Phase IIa clinical trials have been
completed.1.17
    
    Europe means the United Kingdom, Germany, Italy, France and Spain.1.18
    
    Event means any of the events listed in Section 5.9 hereof and Exhibits B through G
hereto with respect to which payments are required to be made by Roche to Memory as provided
therein.1.19
    
    Extended Period means the period commencing on the Effective Date and ending on the
later of (a) the date that is six (6) months after the end of the Strategic Alliance Term and
(b) March 31, 2008.1.20
    
    Field means prophylaxis and treatment of diseases, in all indications, for either
human or veterinary use.1.21
    
    FTE means a full-time equivalent scientific person year, consisting of a total of
1840 hours per year of scientific work on an annualized basis, in the conduct of the Program.1.22
    
    Included Roche Compounds means the compounds listed on Exhibit L [*].1.23
    
    IND means an Investigational New Drug Application filed with the US Food and Drug
Administration (FDA) for human clinical testing of a drug.1.24
    
    Indication means a Neurological Indication, a Psychiatric Indication or an Other
Indication.1.25
    
    Initiation of Phase I means the date that a human is first dosed with a Product in
a Phase I clinical trial.1.26
    
    Initiation of Phase IIa means the date that a patient is first dosed with a Product
in a Phase IIa clinical trial.1.27
    
    Initiation of Phase III means the date that a patient is first dosed with a Product
in a Phase III clinical trial.1.28
    
    Invention means an invention that is made in the conduct of the Strategic Alliance.1.29
    
    Joint Patent Rights means all Patent Rights that Memory and Roche jointly own, or
otherwise jointly have the right to grant the licenses herein, during the Agreement Term.1.30
    
    JSC means the committee organized and operating as provided in Article 7.1.31
    
    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 useful for the discovery, manufacture, development or commercialization of
Product in the Territory.
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1.32
    
    Launch means, with respect to a Product in a country of the Territory, the date of
the first commercial sale by Roche, its Affiliate or its sublicensee of the given Product in
the given country after Regulatory Approval, if any, in such country.1.33
    
    License Exercise Period means, with respect to Compound 3454, the sixty (60) day
period immediately following the later of the End of Phase IIa or the date of delivery by
Memory to Roche of the data and reports specified in Schedule 1 related to such Compound 3454.1.34
    
    License Rights Maintenance Fees means, with respect to any Product, the payments by
Roche to Memory pursuant to Section 4.4 hereof.1.35
    
    Major Market Countries means the US, Canada, Japan and Europe.1.36
    
    Memory Compound means any compound which is a nicotinic alpha-7 agonist [*](a) (i)
the composition of matter of which is Covered in the United States by any of the Memory Patent
Rights as of the Effective Date or (ii) that is listed in a letter of even date from Memory to
Roche and (b) demonstrated by either Party to have Threshold Activity prior to the Effective
Date or during the Extended Period provided that Compound 3454 is not a Memory Compound.1.37
    
    Memory Know-How means all Know-How that Memory owns or Controls during the Extended
Period and thereafter, to the extent necessary for the discovery, manufacture, development,
making use, sale or commercialization of Product in the Territory, during the Agreement Term.1.38
    
    Memory Patent Rights means all Patent Rights that Memory owns, or otherwise has the
right to grant the licenses herein, (a) as of the Effective Date, and listed in Exhibit I
hereto, (b) that Covers a Memory Compound during the Agreement Term or (c) if Roche exercises
the License to Compound 3454, that Covers Compound 3454 during the Agreement Term.1.39
    
    Memory Product means any pharmaceutical product that includes, in whole or as a
component, any Memory Compound as an active ingredient thereof.1.40
    
    NDA means a New Drug Application filed with the FDA, or its foreign equivalent, for
a drug.1.41
    
    NDA Filing means for a given Product, the date that an NDA is filed for the
Product.1.42
    
    Net Sales and the related term Adjusted Gross Sales mean:Adjusted Gross Sales means the amount of gross sales of the Product invoiced by Roche, its
Affiliates and its sub-licensees to independent third parties less deductions of returns and
return reserves (such reserves consistent with Generally Accepted Accounting Principles)
(including allowances actually given for spoiled, damaged, out-dated, rejected, returned
Product sold, withdrawals and recalls), rebates to the extent consistently applied by Roche
to its products (price reductions, rebates to social and
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welfare systems, charge backs and charge back reserves (such reserves consistent with
Generally Accepted Accounting Principles), cash sales incentives (but only to the extent it
is a sales related deduction which is accounted for within Roche on a product-by-product
basis)), government mandated rebates and similar types of rebates (e.g., P.P.R.S, Medicaid,
each as consistently applied by Roche to its products), volume (quantity) discounts, each as
consistently applied by Roche to its products, taxes (value added or sales taxes, government
mandated exceptional taxes and other taxes directly linked to the gross sales amount), it
being understood that income and capital gains taxes are not the type of taxes contemplated
as a deduction in this definition of Adjusted Gross Sales.Net Sales means, for the US, the amount calculated by subtracting from the amount of
Adjusted Gross Sales a lump sum deduction of [*]percent ([*]%) of Adjusted Gross Sales in
lieu of those sales related deductions which are not accounted for within Roche on a product
by product basis (e.g. outward freights, postage charges, transportation insurance,
packaging materials for dispatch of goods, custom duties, bad debt, discounts granted later
than at the time of invoicing, and cash discounts).Net Sales means, for the ROW Territory, the amount calculated by subtracting from the
amount of Adjusted Gross Sales a lump sum deduction of [*]percent ([*]%) of Adjusted Gross
Sales in lieu of those sales related deductions which are not accounted for within Roche on
a product by product basis (e.g. outward freights, postage charges, transportation
insurance, packaging materials for dispatch of goods, custom duties, bad debt, discounts
granted later than at the time of invoicing, and cash discounts).Notwithstanding the foregoing, amounts received by Roche, its Affiliates and sublicensees
for the sale of Product among Roche, its Affiliates or sublicensees for resale shall not be
included in the computation of Adjusted Gross Sales and Net Sales.1.43
    
    Neurological Indication means prophylaxis or treatment of Alzheimers disease
(including management of psychotic symptoms of Alzheimers disease), prophylaxis or treatment
of mild cognitive impairment (MCI) or treatment of vascular dementia.1.44
    
    Other Indication means any indication other than a Neurological Indication or a
Psychiatric Indication.1.45
    
    Party means Roche and/or Memory.1.46
    
    Patent Right means all rights under any patent or patent application in any country
of the Territory, including any substitution, extension or supplementary protection
certificate, reissue, reexamination, renewal, division, continuation or continuations-in-part
thereof, relating to the discovery, manufacture, development or commercialization of nicotinic
alpha-7 agonist [*]compounds in the Territory.1.47
    
    Phase I means the first phase of human clinical trials of a drug required by the US
FDA to gain evidence of safety in volunteers, as described in 21 CFR Part 312, as it may be
amended.
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1.48
    
    Phase II means the second phase of human clinical trials of a drug required by the
US FDA to gain evidence of efficacy in the target population, determine optimal dosage, and
obtain expanded evidence of safety for Product(s), as described in 21 CFR Part 312, as it may
be amended.1.49
    
    Phase IIa means one or more Phase IIa trials (at least one of which is conducted in
a Major Market Country) collectively designed to demonstrate preliminary proof of clinical
efficacy using medically recognized surrogate markers or end points.1.50
    
    Phase IIb means one or more Phase IIb trials (at least one of which trials was
conducted in a Major Market Country) collectively designed to demonstrate efficacy of a
pharmaceutical product in a target population and/or to establish the optimal dosing regimen
for such product.1.51
    
    Phase III means the third phase of human clinical trials of a drug required by the
US FDA to gain evidence of efficacy in the target population, and obtain expanded evidence of
safety for Product(s), as described in 21 CFR Part 312, as it may be amended.1.52
    
    Product means any and all products that include, in whole or as a component
thereof, a Memory Compound, Collaboration Compound or, after Roche obtains a License to
Compound 3454 pursuant to Section 2.1 hereof, Compound 3454, as an active ingredient thereof.1.53
    
    Psychiatric Indication means schizophrenia (including management of the
manifestations of symptoms of schizophrenia), depression, bipolar disorders, anxiety and ADHD.1.54
    
    [*]means, with respect to any Compound, [*].1.55
    
    [*]means, with respect to any Compound, [*].1.56
    
    Regulatory Approval means any approvals (including pricing and reimbursement
approvals), licenses, registrations or authorizations of any national or international or
local regulatory agency, department, bureau or other governmental entity, necessary for the
manufacture and sale of a Product in the Field in a regulatory jurisdiction in the Territory.1.57
    
    Roche Patent Rights means all Patent Rights that Roche owns, or otherwise has the
right to grant the licenses herein, during the Agreement Term.1.58
    
    ROW Territory means all countries and territories other than the US.1.59
    
    Strategic Alliance means discovery and development by Memory and/or Roche and its
Affiliates of pharmaceuticals acting against nicotinic alpha-7 receptor and development and
commercialization of such pharmaceuticals by Roche and/or Memory, as provided for in this
Agreement.
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1.60
    
    Strategic Alliance Term means the period commencing on the Effective Date and
ending on December 31, 2007, as such period may be extended by mutual agreement of the Parties
in writing.1.61
    
    Territory means all countries and territories in the world.1.62
    
    Third Party means a person or entity other than (i) Memory or any of its
Affiliates, or (ii) Roche or any of its Affiliates.1.63
    
    Threshold Activity means [*].1.64
    
    3454 Product means any pharmaceutical product that includes, in whole or as a
component, the Compound 3454 as an active ingredient thereof.1.65
    
    US means the United States of America and its possessions and territories,
including Puerto Rico.1.66
    
    Valid Claim means a claim in any (i) unexpired and issued Memory Patent Right or
Collaboration Patent Right that has not been disclaimed, revoked or held invalid by a final
unappealable decision of a court of competent jurisdiction or government agency or (ii)
pending patent application that is a Memory Patent Right or Collaboration Patent Right, which
application has been on file with the applicable patent office for no more than ten (10) years
and for which there has been reasonably consistent activity to advance to issuance of a
patent.
 Article 2. Grants
 2.1
    
    Grants. Subject to the terms and conditions of this Agreement, Memory hereby grants
to Roche a sole and exclusive license, including the right to grant sublicenses pursuant to
Section 2.4, under the Memory Patent Rights and Memorys interest in the Collaboration Patent
Rights and to use the Memory Know-How, to make, use, offer for sale, sell, import and export
all Products other than Compound 3454 in the Territory for use in the Field. Subject to the
terms and conditions of this Agreement, during the License Exercise Period, Roche shall have
the right with respect to Compound 3454 to obtain a sole and exclusive license, including the
right to grant sublicenses pursuant to Section 2.3, under the Memory Patent Rights and
Memorys interest in the Collaboration Patent Rights and to use the Memory Know-How, to make,
use, offer for sale, sell, import and export such Compound 3454 and 3454 Products in the
Territory for use in the Field (a License). In addition, subject to the terms and
conditions of this Agreement, Memory hereby grants to Roche a non-exclusive license, including
the right to grant sublicenses pursuant to Section 2.4, under any additional patent rights
that Memory Controls to the extent necessary to make, use, offer for sale, sell, import and
export (i) all Products other than Compound 3454 in the Territory for use in the Field and
(ii) if Roche exercises the right to obtain the license for Compound 3454, Compound 3454. The
right of Roche to obtain a License to Compound 3454 as provided in this Section 2.1 shall be
exercisable by Roche giving written notice to Memory and making or having made payment to
Memory of all License Rights Maintenance Fees for such Product under Section 4.4 with respect
to a License for a Product for an Indication. If Roche exercises such right as provided
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herein, Memory shall be deemed to have granted such License hereunder without any
requirement for further action by or on behalf of either Party.Nothing in this Agreement grants to Roche any right or license to use Memory Know-How for
any purpose other than to make, use, offer for sale, sell, import and export Products in the
Territory for use in the Field. Further, nothing in this Agreement shall limit the right of
Memory to use Memory Know-How for any purpose other than the making, using, offering for
sale, selling, importing or exporting Products in the Territory for use in the Field.2.2
    
    Intentionally Omitted.2.3
    
    Restrictions on Third Party Rights. Memory shall not grant any license or rights to
a Third Party with respect to Compound 3454 or itself commercialize Compound 3454 unless and
until Roche has declined or failed to exercise its right to obtain a License to such compound
pursuant to Sections 2.1 and 16.4(a) hereof. In the event that Roche so declines or fails to
exercise its right to obtain a License to such compound, Memory shall be free to license or
grant any rights to a Third Party with respect Compound 3454 and/or itself commercialize
Compound 3454.2.4
    
    Sublicense Rights. The rights and licenses granted to Roche under Section 2.1 shall
include the right to grant sublicenses to its Affiliates and Third Parties under such rights
and licenses, in whole or in part, solely to the extent necessary to make, use, offer for
sale, sell, import or export Products in the Territory for use in the Field. If Roche grants
such a sublicense, Roche shall ensure that all of the applicable terms and conditions of this
Agreement shall apply to the Affiliate or Third Party sublicensee to the same extent as they
apply to Roche for all purposes. Roche assumes full responsibility for the performance of all
obligations and observance of all terms so imposed on such Affiliate or Third Party
sublicensee and will itself account to Memory for all payments due under this Agreement by
reason of such sublicense.Roche shall not sublicense its rights to offer a Memory Product for sale or sell a Memory
Product in a Major Market Country [*]without the prior written consent of Memory which
shall not be unreasonably withheld. With respect to any 3454 Product, Roche shall not have
the right to sublicense the rights granted to Roche under Section 2.1 to any Third Party
with respect to any 3454 Product, except upon the prior written approval of Memory, which
approval Memory shall not unreasonably withhold.Any sublicense may, at the written election of Memory, continue in full force and effect
after the termination of any of the underlying licenses granted herein to Roche (the
foregoing shall apply to a termination in whole or in part of such underlying licenses).
Upon the licenses granted herein to Roche becoming fully paid up pursuant to Section
16.1(b), any and all sublicenses granted by Roche similarly shall become fully paid up as to
Memory.2.5
    
    Memory Co-Promotion Right. Memory shall have the right to co-promote in the US each
Product containing Compound 3454, in accordance with the provisions of Exhibit K
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hereto. Within forty-five (45) days after the end of Phase II with respect to any such
Product, Roche shall provide Memory with (i) the results and analysis of Phase II studies,
and (ii) Roches then final, approved Phase III development plan (including budget). Memory
shall exercise its co-promotion right with respect to any such Product by (a) giving written
notice thereof to Roche within forty-five (45) days after receipt of the items described in
the immediately preceding sentence, and (b) making a one-time payment to Roche in the amount
of [*]percent ([*]%) of Roches budgeted Phase III global development costs for such
Product as set forth in Roches then final, approved Phase III development plan (including
budget). If Memory exercises its right to co-promote any such Product in the US, the
royalties otherwise payable by Roche to Memory hereunder with respect to the Net Sales of
such Product in the US shall be reduced by [*]percent ([*]%). Upon Memorys exercise of
its co-promotion right with respect to any such Product, the Parties shall negotiate in good
faith and enter into a Co-Promotion Agreement consistent with terms set forth in Exhibit K
hereto.2.6
    
    Requirement to Divest. If Roche is required by a relevant government authority in a
given country of the Territory to divest rights to a Memory Compound, Compound 3454, 3454
Product, and/or a Memory Product with respect to which Roche has not commenced the Initiation
of Phase III, then Roche shall use its reasonable best efforts to obtain authority to fulfill
such requirement by returning rights to Memory to the Memory Compound, Compound 3454, 3454
Product and/or Memory Product, as the case may be, in accordance with Section 16.5.
 Article 3. Diligence
 3.1
    
    Diligence. Memory shall use reasonable diligence in proceeding with the development
of Compound 3454 through the End of Phase IIa. Roche shall use reasonable diligence in
proceeding in the Major Market Countries with the development [*]of at least one Compound
[*].Reasonable diligence as used in this Agreement shall mean the same standard of effort as
used by the Parties, or in any case not less than common in the industry taken as a whole
for similarly situated companies for the activities to be undertaken pursuant to this
Agreement, including, in the case of Roche, the development, clinical testing,
manufacturing, marketing and sale of a product which (i) must receive regulatory approval in
Major Market Countries and (ii) has similar potential for an Indication as the compounds for
which Roche has obtained a license hereunder, taking into account scientific, business and
marketing and return on investment considerations. It is understood that such compound
potential may change from time to time based upon changing scientific, business and
marketing and return on investment considerations. The Parties also acknowledge that, even
within the Major Market Countries, Roche and its Affiliates do not always seek to market
their own products in every such country or seek to obtain regulatory approval in every such
country or for every potential indication or every compound that has potential for an
indication. As a result, the exercise by Roche of reasonable diligence is to be determined
by judging its efforts taken as a whole.
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If either Party believes in good faith that the other Party has failed to utilize reasonable
diligence as required by this Section 3.1, then such Party may give the other Party written
notice of such alleged failure, identifying the nicotinic alpha-7 agonist [*]compound or
Product (if known) and giving specific detailed reasons of such allegation. Within sixty
(60) days following the other Partys receipt of any such notice (Response
Period), the other Party shall have the right to provide such Party with a written
response specifying, in reasonable detail, how it has used reasonable diligence as required
hereby.If the other Party has failed to provide within the Response Period a written response, in
reasonable detail, indicating the manner in which it is in compliance with its obligations
under this Section 3.1 or in which it has remedied any breach thereof, or the other Party
has failed within the Response Period to remedy any breach of its obligations under this
Section 3.1, then the non-defaulting Party shall have the right to terminate this Agreement,
in whole or in part, as described in this Section 3.1, upon written notice to such Party
effective as of the end of the Response Period.In the event of a dispute between the Parties with respect to whether either Party has
complied with its obligation under this Section 3.1, then such dispute shall be resolved in
accordance with Article 17. The consequences of any termination under this Section 3.1 are
set forth in Section 16.5 and Article 17.3.2
    
    Effect of Merger on Diligence.
 (a)
    
    Acquisition of Roche. If (i) substantially all of the pharmaceutical
business of Roche becomes merged or acquired or (ii) Roche acquires substantially all
of the pharmaceutical business of an entity having an average annual pharmaceutical
preclinical research expenditure in excess of [*]dollars (US $[*]) per year, then at
any time during the period from a public announcement by Roche of its intention to
effect such merger or acquisition (each such transaction described in clauses (i) and
(ii) being hereinafter called a Transaction) through [*]after the closing of
such Transaction, Memory shall have the right to request in writing to the Head of
Global Pharmaceuticals of Roche a status of and future plans for the progress of
development and commercialization of Products (Status Request). This right
may be exercised by Memory not more than [*].If, following a Status Request, Memory believes in good faith that Roche has failed
to progress development and commercialization of Products solely because of the
Transaction, then Memory may give Roche written notice of such alleged failure,
identifying the Product and region at issue and giving specific detailed reasons of
such allegation. Within [*]days following Roches receipt of any such notice from
Memory (Status Response Period), Roche shall have the right to provide
Memory with a written response specifying, in reasonable detail, how the Transaction
per se has not had any negative impact on such development and commercialization
progress.If Roche has failed to provide within the Status Response Period a written response,
in reasonable detail, indicating the manner in which development and
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commercialization of Products has not failed to progress solely because of the
Transaction or in which it has remedied any such failure, or Roche has failed within
the Status Response Period to remedy any such failure to progress, then Memory shall
have the right to terminate this Agreement, in whole or in part, as described below
in this Section 3.2, upon written notice to Roche effective as of the end of the
Status Response Period. Memory shall have the right to terminate this Agreement as
to any region described in Section 16.4(b) if development and commercialization of
the Products has failed to progress solely because of the Transaction with respect
to the Products (taken as a whole) in such region. Memory shall have the right to
terminate this Agreement in the Territory with respect to any Product if development
and commercialization of such Product has failed to progress solely because of the
Transaction in at least two of the three regions described in Section 16.4(b).
Memory shall have the right to terminate this Agreement in its entirety if
development and commercialization of the Products (taken as a whole) has failed to
progress solely because of the Transaction in at least two of the three regions
described in Section 16.4(b). The Parties confirm and agree that nothing in this
Section 3.2 limits the obligations of Roche or the rights of Memory under Section
3.1.(b)
    
    Change of Control of Memory. Upon a Change of Control of Memory, Roche
shall have the right to terminate Memorys participation in the Strategic Alliance, as
provided in Section 7.5(g) hereof provided that any such termination shall not in any
manner terminate, reduce or otherwise modify any of Memorys rights to royalty and
event payments hereunder. In addition, upon a Change of Control of Memory, Roche shall
have the right to terminate Memorys participation in Phase I studies and all other
work or activities pursuant to Articles 7 and 9 of this Agreement; provided that (i)
any such termination shall not in any manner terminate, reduce or otherwise modify any
of Memorys rights to royalty and milestone payments hereunder and (ii) Roche shall
complete any Phase I studies then in process.
 Article 4. Payments to Memory
 4.1
    
    Intentionally Omitted.4.2
    
    Intentionally Omitted.4.3
    
    Intentionally Omitted.4.4
    
    Payments With Respect to Certain Events. Roche shall pay to Memory, in order to
maintain its License rights pursuant to Section 2.1 and the other provisions of this Agreement
with respect to Compound 3454 and to reimburse Memory for previously incurred research
expenditures, and with respect to certain development based Events, the non-refundable and
non-creditable payments set forth in Exhibit B hereto upon the first occurrence of the Events
relating to Compound 3454 described therein. With respect to each Memory Product and each
Collaboration Product, Roche shall pay to Memory, the
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non-refundable and non-creditable payments set forth in Exhibit C and Exhibit D hereto,
respectively, upon the first occurrence of the Events listed therein for such Product.Each payment required pursuant to this Section 4.4 shall be due and payable by Roche within
sixty (60) days after occurrence of the applicable Event. Roche will make each of such
payments only once for each Product, regardless of the number of Indications for which such
Product may be developed or the subject of any Regulatory Approvals.For the avoidance of doubt, the Parties confirm and agree that no amount payable under this
Article 4 shall reduce any royalties payable under Article 5.
 Article 5. Royalties
 5.1
    
    Royalties. Roche shall pay to Memory the percentage of Net Sales of any 3454
Products, Memory Products and Collaboration Products as set forth in Exhibit E, Exhibit F and
Exhibit G hereto, respectively. Such royalty payments shall be calculated by multiplying the
percentages set forth in such Exhibit by the annual Net Sales of such Product (all Net Sales
amounts in $ US million) set forth in such Exhibit and shall be subject to adjustment as
provided in this Article 5.5.2
    
    Intentionally Omitted.5.3
    
    Adjustment Related to Other Indications of 3454 Products. Roche shall pay to Memory
royalties for a given 3454 Product having a Regulatory Approval for an Other Indication, in an
amount equal to [*]of the royalties otherwise payable for such 3454 Product having a
Regulatory Approval for a Neurological Indication based upon the Net Sales of such Product,
which royalty rate shall be subject to adjustment as provided in this Article 5.5.4
    
    Adjustment Related to Multiple Indications of 3454 Products. Notwithstanding
anything to the contrary contained in Sections 5.1 or 5.2 hereof, in the event that a given
3454 Product has a Regulatory Approval for more than one indication, Roche shall pay royalties
to Memory based upon the royalty schedule providing the highest applicable royalty rates for
which a Regulatory Approval has been obtained in a Major Market Country. Specifically, if any
such 3454 Product is approved for (i) a Neurological Indication in a Major Market Country and
for another indication other than a Psychiatric Indication, the royalties payable by Roche to
Memory shall be based upon Net Sales of such 3454 Product in the Territory as if all of such
Net Sales occurred for such Neurological Indication; (ii) a Psychiatric Indication in a Major
Market Country and for an Other Indication, the royalties otherwise payable by Roche shall be
based upon Net Sales of such 3454 Product in the Territory as if all of such Net Sales
occurred for the Psychiatric Indication; and (iii) multiple Other Indications only, then the
royalties payable by Roche to Memory shall be equal to [*]of the royalties otherwise payable
under the royalty schedule for a 3454 Product approved for a Neurological Indication.5.5
    
    Term of Royalty Payments. Roche shall calculate and make royalty payments to Memory
under this Article 5 commencing on Launch in any country. The Net Sales of a given country
shall be included for purposes of calculating royalties under this Section until the later of
(a) expiration of the last to expire of Composition of Matter Claim in
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such country and (b) ten (10) years from the Launch of such Product in such country. With
respect to the ten (10) year period, the EU will be considered as one country.5.6
    
    Adjustments Related to Valid Claims. For a given Product, if in, or with respect to,
a country of the Territory no Valid Claim Covers such Product, then Roche may calculate
royalties for such Product using [*]percent ([*]%) of the amount Roche would have used for
such country to calculate royalties for such Product if a Valid Claim Covered such Product in
such country unless prior to ten years from the Launch of such Product in, or with respect to,
such country (EU considered as one country) a Valid Claim Covering such Product exists in, or
with respect to, such country in which case Roche shall resume calculating royalties using [*]
percent ([*]%) of such amount.5.7
    
    Adjustments Related to Third Party Competition. For a given Product in a given
calendar quarter, if in a country of the Territory (a) a Third Party is selling Bioequivalent
Product, and (b) Roche has an obligation to make payments under this Agreement with respect to
Net Sales of the given Product in such country, and (c) a Valid Claim Covers the given Product
in such country and (d) in such country, sales of units of Bioequivalent Products in aggregate
total at least [*]percent ([*]%) of the aggregate sales of units of Bioequivalent Products
and Products as measured at the end of such calendar quarter, and (e) Roche has, if it is
reasonable under the circumstances, brought in the country and continued to diligently
prosecute a patent infringement suit under any relevant Composition of Matter Claims against
the Third Party or another in privity, then Roche shall have the right to calculate royalties
with respect to such calendar quarter by including [*]percent ([*]%) of the amount Roche
would have otherwise included for such country to calculate sales-based payments if no
Bioequivalent Product existed in such country.5.8
    
    Adjustments Related to Third Party Payments. Roche or its Affiliate shall pay and be
responsible for the entire consideration owed to any Third Party pursuant to the terms of any
existing or future patent licensing agreement relating to a Product. Roche shall have the
right to deduct a maximum of [*]percent ([*]%) of the consideration actually paid by Roche or
its Affiliate to a Third Party (other than [*]) with respect to any license under a patent
which Covers the molecule per se of the compound which is the nicotinic alpha-7 agonist [*]
that is included in a given Product, from payments otherwise due and payable by Roche to
Memory under this Agreement. In no event as a result of this Section 5.8 shall Roche reduce
the royalties owed to Memory under this Article 5 such that the royalties payable pursuant to
this Article 5 for such Product are less than [*]percent ([*]%)of Net Sales in the Territory
for a given calendar quarter (and Roche shall be entitled to accumulate amounts not permitted
to be deducted in a prior period and deduct such amounts in a future period).Notwithstanding the above, (i) any payment owed under an agreement between Memory and The
Trustees of Columbia University dated July 22, 1998, as it may be amended, shall be the sole
responsibility of Memory, and (ii) any payment owed under any agreement between Roche or its
Affiliate and any Third Party entered into prior to the Effective Date shall be the sole
responsibility of Roche, for which Roche shall not be
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entitled to any deduction from payments due and payable to Memory under this Agreement.5.9
    
    Bonus Payment.
 (a)
    
    With Respect to 3454 Products. Roche shall pay to Memory a one-time,
non-refundable and non-creditable amount after the first occurrence of the following
Event with respect to the 3454 Product if it receives Regulatory Approval for a
Neurological Indication:
 Event
    
    
    Payment (US$)Net Sales exceed [*]for a full calendar year (Jan. 1 - Dec.
31 (during the Agreement Term
    
    
    [*]Net Sales exceed [*]for a full calendar year (Jan 1 - Dec
31) during the Agreement Term
    
    
    [*]
 Roche shall pay to Memory a one-time, non-refundable and non-creditable amount after
the first occurrence of the following event with respect to the 3454 Product if it
receives Regulatory Approval for a Psychiatric Indication:
 Event
    
    
    Payment (US$)Net Sales exceed [*]for a full calendar year (Jan. 1 -
Dec. 31) during the Agreement Term
    
    
    [*]Net Sales exceed [*]for a full calendar year (Jan. 1 -
Dec. 31) during the Agreement Term
    
    
    [*]
 Each payment in this Section 5.9(a) shall be due and payable by Roche within sixty
(60) days after occurrence of the applicable Event. If a 3454 Product receives
Regulatory Approval for both a Neurological Indication and a Psychiatric Indication,
then bonus payments will be due and payable only once for the first Indication for
which a bonus Event in this Section 5.9(a) is achieved. [*].(b)
    
    With Respect to Memory Products. Roche shall pay to Memory a one-time,
non-refundable and non-creditable amount after the first occurrence of the following
Event with respect to each Memory Product having Regulatory Approval for any
Indication:
 Event
    
    
    Payment (US$)Net Sales exceed [*]for a full calendar year (Jan. 1 - Dec.
31 (during the Agreement Term
    
    
    [*]
 Each payment in this Section 5.9(b) shall be due and payable by Roche within sixty
(60) days after occurrence of the applicable Event.
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(c)
    
    With Respect to Collaboration Products. Roche shall pay to Memory a
one-time, non-refundable and non-creditable amount after the first occurrence of the
following Event with respect to each Collaboration Product having Regulatory Approval
for any Indication:
 Event
    
    
    Payment (US$)Net Sales exceed [*]for a full calendar year (Jan. 1 - Dec.
31 (during the Agreement Term
    
    
    [*]
 Each payment in this Section 5.9(c) shall be due and payable by Roche within sixty
(60) days after occurrence of the applicable Event.
 5.10
    
    Combination Products. In the event Roche or its Affiliates intend to sell a
Combination Product, the Parties shall meet approximately one (1) year prior to the
anticipated commercial launch of such Combination Product to negotiate in good faith and agree
to an appropriate adjustment to Net Sales to reflect the relative significance and value
(including consideration of relative market share, sales potential and price potential) of the
Product and the other pharmaceutically active agent(s) contained in the Combination Product.
If, after good faith negotiations (not to exceed ninety (90) days), the Parties cannot agree
to an appropriate adjustment, Net Sales shall equal Net Sales of the Combination Product
multiplied by a fraction, the numerator of which is the reasonable fair market value of the
Product and the denominator (including consideration of relative market share, sales potential
and price potential) of which is the reasonable fair market value (including consideration of
relative market share, sales potential and price potential) in the aggregate of all
pharmaceutically active agents contained in the Combination Product.5.11
    
    Mechanisms for Adjustments. Notwithstanding anything to the contrary in this
Agreement, in no event shall any adjustments, individually or in the aggregate, pursuant to
Sections 5.6, 5.7 and 5.8 result in Memory receiving royalties for a given calendar quarter
pursuant to Section 5.1 in an amount less than [*]percent ([*]%) of the amounts set forth
therein as if no adjustment(s) had been made. If Roche obtains a license to a compound which
is a nicotinic alpha-7 agonist [*]from a Third Party and includes such compound in a Product,
as a result of which the Product becomes a Combination Product, Roche shall not be entitled to
an adjustment pursuant to Section 5.8 as a result of such license.
 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
immediately available funds in accordance with instruction or instructions from the
Party being paid.
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(b)
    
    Whenever calculation of Net Sales or any other payment pursuant to this
Agreement requires conversion from any foreign currency, Roche shall convert the amount
of Net Sales or any other payment pursuant to this Agreement in foreign currencies as
computed in Roches central Swiss Francs Sales Statistics for the countries concerned,
using for internal foreign currency translation Roches then current standard practices
actually used on a consistent basis in preparing its audited financial statements.(c)
    
    For sublicensees in a country, when calculating the Net Sales, the sublicensee
shall report to Roche the amount of such sales within thirty (30) days from the end of
the reporting period, after having converted each applicable monthly sales in foreign
currency into Swiss Francs using the average rate of exchange published in the Wall
Street Journal (or some other source agreed upon by the Parties for any particular
country) for each respective month of the reporting period.
 6.2
    
    Payments. After the Launch of the Product in any country of the Territory, Roche
shall calculate royalty payments set forth in Article 5 quarterly as of March 31, June 30,
September 30 and December 31 (each being the last day of a reporting period). Roche shall pay
such payments quarterly within sixty (60) days after the end of each reporting period in which
Net Sales occur during the Agreement Term.With each such payment, Roche shall deliver to Memory the following information split
between the US and the ROW Territory:
 (a)
    
    Adjusted Gross Sales for each Product;(b)
    
    Net Sales for each Product;(c)
    
    the royalty payments due to Memory for the reporting period;
 If Memory reasonably requests additional information relating to gross sales of the Products
in the Major Market Countries, deductions therefrom to calculate Adjusted Gross Sales or Net
Sales and/or adjustments thereto, Roche agrees to provide such information to Memory within
a reasonable time, provided, that Memory shall have the rights to exercise such requests not
more than once during any period of twelve (12) consecutive months.In the event Roche does not pay Memory any amounts due under this Agreement, including
pursuant to Articles 4 and 5, within the applicable time period set forth herein, without
limiting Memorys rights under Article 16, such payment shall bear interest, to the extent
permitted by applicable law, at the rate of interest (prime rate) as published from time to
time in the weekly Federal Reserve H.15 bulletin (or a successor or similar publication)
plus [*]% for the applicable period calculated on the number of days such a payment is
overdue.6.3
    
    Taxes.
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(a)
    
    Memory shall pay all applicable taxes levied on Memory under this Agreement.(b)
    
    If provision is made in law or regulation of any country for withholding of
taxes of any type, levies on Memory or other charges against Memory with respect to any
amounts payable under this Agreement to Memory, Roche shall promptly pay such tax, levy
or charge for and on behalf of Memory to the proper governmental authority, and shall
promptly furnish Memory with receipt of such payment. Roche shall have the right to
deduct any such tax, levy or charge actually paid from payment due Memory or be
promptly reimbursed by Memory if no further payments are due Memory. Each Party agrees
to assist the other Party in claiming exemption from such deductions or withholdings
under double taxation or similar agreement or treaty from time to time in force and in
minimizing the amount required to be so withheld or deducted.
 6.4
    
    Blocked Countries. If by reason of law Roche is unable to convert to U.S. Dollars a
portion of the amount due by Roche under this Agreement, then Roche shall notify Memory in
writing and, upon written request from Memory, Roche shall pay to Memory such portion, in the
currency of any other country designated by Memory and legally available to Roche.6.5
    
    Accounting.
 (a)
    
    Roche shall maintain and cause its Affiliates and sublicensees to maintain
books of account containing all particulars that may be necessary for the purpose of
calculating all payments under this Agreement. Such books of account shall be kept at
their principal place of business. Memory shall have the right to engage Roches
independent, certified public accountant to perform, on behalf of Memory, an audit of
such books and records of Roche and its Affiliates and sublicensees as is necessary to
confirm any amounts payable to Memory under this Agreement for the period or periods
requested by Memory and the correctness of any report or payments made under this
Agreement.(b)
    
    Such audits shall be conducted during normal business hours upon reasonable
prior written notice from Memory (minimum of thirty (30) days) in such a manner as to
not unnecessarily interfere with Roches normal business activities, and shall include
results of no more than three (3) preceding calendar years prior to audit notification.(c)
    
    Such audit shall not occur more frequently than once per calendar year nor more
frequently than once with respect to records covering any specific period of time.
Notwithstanding the preceding, if Memory reasonably believes, after reviewing
information received from Roches independent public accountant, that an additional
audit is appropriate to address an apparent discrepancy between Roches returns and
other information as is necessary for reporting hereunder, Memory shall have the right,
by an audit specialty firm reasonably acceptable to Roche and employed by Memory and at
Memorys own expense, to perform such appropriate audit procedures.
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(d)
    
    The use of all information, data, documents and abstracts referred above shall
be for the sole purpose of verifying statements or compliance with this Agreement,
shall be treated as Roche Confidential Information subject to Article 15 of this
Agreement and, except in the event of a dispute between the Parties regarding amounts
payable hereunder or the results of any audit, need not be retained more than three (3)
years from the end of the calendar year to which each shall pertain. Audit results
shall be shared by Roche and Memory.(e)
    
    If any audit hereunder reveals an underpayment, Roche shall promptly make up
such underpayment. If any audit hereunder reveals an overpayment, Memory shall
promptly reimburse such overpayment. Memory shall bear the full cost of any audit
under this Section 6.5, unless such audit discloses an underpayment by Roche of more
than [*]percent ([*]%) of the amount owed hereunder if Net Sales exceeds [*]dollars
($[*]) in the Territory for the calendar year, or [*]percent ([*]%) of the amount owed
hereunder if Net Sales are equal to or less than [*]dollars ($ [*])in the Territory
for the calendar year, in which case Roche shall bear the full cost of such audit as
performed by Roches independent, certified public accountant and any audit specialty
firm employed by Memory, together with interest on any such underpayment from the date
otherwise due through the date of payment at the rate set forth in Section 6.2.(f)
    
    The failure of Memory to request verification of any payment calculation during
which corresponding records are required to be retained under this Section 6.5 shall be
considered acceptance of such reporting by Memory.
 Article 7. Governance; Strategic Alliance
 7.1
    
    The Strategic Alliance. The Parties hereby continue their Strategic Alliance with
respect to the development of Products and the determination of licensing rights with respect
thereto.7.2
    
    Joint Steering Committee. Subject to Section 7.2(e), a Joint Steering Committee
(JSC) shall govern the research and development of Products, including
prioritization of compounds for research and development, approving research plans and
development plans (and updates and modifications thereof), supervising ongoing research and
development activities, recommending actions in response to unforeseen events, supervising the
transition of development, manufacturing and regulatory activities from Memory to Roche and
development of preclinical and clinical strategies (including clinical candidate selection,
the commencement of the Initiation of Phase I and the Initiation of Phase IIa). Neither Party
shall conduct activities with respect to Compounds outside the scope of the Workplan pursuant
to Exhibit A unless approved by the JSC. On a quarterly basis during the Strategic Alliance
Term and promptly after the end of the Extended Period, the JSC shall specify what Compounds
have met the Threshold Activity.
 (a)
    
    Organization. The JSC shall consist of six (6) members, three (3)
members to be designated by Roche and three (3) members to be designated by Memory.
Each
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Party may add additional members to the JSC. At least one (1) of each Partys three
(3) members of the JSC shall not be members of such Partys Working Team, as defined
pursuant to Section 7.2(b). A JSC member may not be a member of more than one
Working Team. As appropriate, other employee representatives of the Parties may
attend JSC meetings, subject to the reasonable approval of the other Party. Each
Party shall notify the other Party of the member(s) designated by such Party, in
writing, within thirty (30) days after the Effective Date. Any Party may withdraw
the designation of any of its members of the JSC and designate a replacement at any
time by giving prior written notice of the withdrawal and identifying the
replacement to the other Party. [*].The JSC is authorized to establish separate
subcommittees from time to time, provided that the decision-making process
established in Section 7.2(d) shall continue to apply.(b)
    
    Working Teams. Each Party shall appoint members to working teams
(Working Teams), such as a research team and a development team. The Working
Teams will be responsible for delivering a plan for research and/or development
activities to the JSC for their review, modification and approval pursuant and subject
to Section 7.2(d). Further, any issues that are not resolved by the Working Teams
shall be submitted to the JSC for resolution pursuant and subject to Section 7.2(d).
The Working Teams shall be cooperative bodies that will work together and have meetings
as appropriate.(c)
    
    Meetings. The JSC shall hold quarterly meetings during the Extended
Period and thereafter shall hold semi-annual meetings during the balance of the
Agreement Term, on mutually agreeable dates, with the location of the meetings to
alternate between Memory and Roche, or their Affiliates, facilities. The frequency
and location of such meetings may be modified by mutual agreement of the Parties.
Notwithstanding the foregoing, at least one (1) of the quarterly meetings per year and
one (1) of the semi-annual meetings shall be held in person and the remaining meetings
may be held by videoconference. Each Party shall pay its own expenses associated with
the meeting. Each Party may, in its discretion, invite non-member employees to attend
meetings of the JSC.(d)
    
    Decision-Making. Decisions of the JSC shall be by consensus, with each
Party having one collective vote. If the JSC is unable to decide a matter by
consensus, the Parties shall refer such matter for resolution to the Head of Global
Research or the Head of Global Development on behalf of Roche and the Chief Scientific
Officer of Memory (Alliance Executives). If the Alliance Executives are
unable to resolve any such matter after good faith discussions, then the final decision [*].(e)
    
    Roche Development Team. With respect to each Product for which there
has been an Initiation of Phase IIb, [*].Memory shall discuss with Roche the proposed
status and development and provide comments with respect thereto.
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(f)
    
    Minutes. Within thirty (30) days after each meeting of the JSC, the
chairperson shall prepare or cause to be prepared written minutes of such meeting and
circulate the same to each member of the JSC.(g)
    
    Dissolution of the JSC. The JSC shall decide when it expects that no
Product will thereafter proceed to Initiation of Phase III and the JSC will then
dissolve provided that the JSC shall be reconstituted if the Parties do agree that
there will thereafter be an Initiation of Phase III with respect to a Product.
 7.3
    
    Research and Development Activities. Subject to the provisions of Section 3.1 and
the oversight of the JSC, with respect to each Product other than Compound 3454, Memory or
Roche, consistent with their responsibilities pursuant to this Agreement and Section 3.1,
shall conduct, at its cost (except as otherwise provided in this Agreement), those research
and development activities required pursuant to this Agreement and the Workplan. Subject to
the provisions of Section 3.1 and in consultation with the JSC, Memory shall conduct, at its
cost except as provided in this Agreement, those research and development activities through
the End of Phase IIa for Compound 3454 that Memory deems necessary or appropriate.7.4
    
    Progress Reports. Within fifteen (15) days after the end of each calendar quarter
through [*],Memory shall prepare and deliver to Roche a written progress report for the JSC
summarizing in reasonable detail the results to date of the [*]. In addition, upon request,
Roche shall have the right to receive copies of the raw data from all test results of [*].7.5
    
    The Strategic Alliance.
 (a)
    
    Subject to the terms and conditions of this Agreement, the Parties agree to
conduct a Strategic Alliance in accordance with Section 3.1 hereof and the Workplan set
forth as Exhibit A to this Agreement.(b)
    
    For calendar year 2006, Roche shall pay to Memory the sum of one million seven
hundred fifty thousand dollars (US $1,750,000), which amount shall be non-refundable
and non-creditable, and which will be due and payable in two (2) equal installments of
eight hundred seventy-five thousand dollars (US $875,000) per installment. Such
installments shall be due and payable within thirty (30) days after (1) April 1, 2006
and July 1, 2006 and (2) receipt by Roche of an invoice for such sums.(c)
    
    In the event that the JSC determines [*]has been satisfied [*]Roche shall pay
to Memory the sum of three million Swiss Francs (CHF 3,000,000) for FTE funding, which
amount shall be non-refundable and non-creditable [*]. Notwithstanding any other
provision in this Article 7 to the contrary, Memory has the right to terminate its
research and development obligations after March 31, 2007 pursuant to this Article 7
and the Workplan if, prior to March 31, 2007, Roche has not committed to provide Memory
with such funding of three million Swiss Francs (CHF 3,000,000) for calendar year 2007
[*].(d)
    
    [*]
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(e)
    
    Once a Compound has achieved [*], the Parties shall design and Roche shall fund
[*]for such Compound, and [*]Notwithstanding the above, Memory shall supply Memory
Compound designated as 63908 for purposes of conducting GLP toxicology studies with
respect thereto, and [*].(f)
    
    If a Compound achieves [*].(g)
    
    In the event that there is a Change of Control of Memory during the Strategic
Alliance Term, Roche shall have the right, exercisable by giving at least sixty (60)
days prior written notice to Memory, to terminate Memorys involvement in the
Strategic Alliance and participation in the JSC and thereupon Memory shall have no
further research or development obligations in connection with the Strategic Alliance.
Upon such termination, Memory shall promptly transfer to Roche all data and other
information related to the Strategic Alliance, including but not limited to Memory
Compounds, Collaboration Compounds, and Compound 3454 (if Roche has exercised its
License thereto), of the same type and nature as more fully described in Section
16.5(a)(ii) and (iii). Notwithstanding any such termination by Roche, this Agreement
and the remaining obligations of Memory and Roche shall continue, including, but not
limited to, Roches payment obligations pursuant to Articles 4 and 5 and funding
obligations pursuant to Section 7.5(b). [*].
 Article 8. Intentionally Omitted
 Article 9. Clinical Development and Regulatory Matters
 9.1
    
    Clinical Development. Memory, at its sole cost, shall pursue clinical development of
Compound 3454 through the earlier of the End of Phase IIa or the date that Roche obtains a
License with respect to 3454 Products pursuant to Section 2.1 hereof. Notwithstanding the
provisions of Section 3.1 hereof but in consultation with the JSC, Memory shall have sole
control of all such clinical development activities for Compound 3454. If a Compound achieves
[*]. The End of Phase I Criteria is set forth in Schedule 4. From and after the End of Phase I with respect to such Compound, and from and after
Roche obtains a License with respect to 3454 Products, Roche shall be responsible for clinical
development of the Compound, subject to the provisions of Section 3.1 and the oversight of the
JSC (during its existence), and all related costs.9.2
    
    Regulatory Matters. Memory, at its sole cost, shall be responsible for all
regulatory activities in the Territory related to 3454 Products through the earlier of the End
of Phase IIa or the date that Roche obtains a License with respect to such 3454 Products
pursuant to Section 2.1 hereof, and upon Roche obtaining such License with respect to such
3454 Products, Roche, at its sole cost, shall thereafter be responsible for all regulatory
activities in the Territory relating to 3454 Products. Memory, at its sole cost, shall
prepare and file all regulatory applications and documents, including, for example, an
Investigational New Drug (IND) application (or foreign equivalent in consultation with
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Roche) with respect to each Compound that has achieved [*] and has been approved for
clinical development by the JSC. Following the End of Phase I, Roche, at its sole cost,
shall be responsible for the preparation and filing of all regulatory applications and
documentation for Regulatory Approvals with respect to such Compounds. With respect to such
Compounds, Memory shall transfer to Roche all regulatory applications and documentation in
accordance with the procedures established by the JSC pursuant to Section 7.2, but in any
event no later than promptly after the [*]. After such transfer by Memory, Roche shall own
all regulatory filings and Regulatory Approvals for all Products in all countries of the
Territory.
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Article 10. Manufacture and Supply
 10.1
    
    Clinical Supplies of Product for GLP toxicology and Clinical Studies. Memory shall
supply at its own cost all clinical supply of Compound 3454 and placebo related to Compound
3454 to be used in the Territory through the date that Roche obtains a License with respect to
such Product, either by itself or through a Third Party. Memory, at its sole cost, shall be
responsible for the manufacture of each Compound through [*] with respect thereto. After any
such Compound has achieved [*], Roche, at its sole cost, shall be responsible for
manufacturing scale up and the manufacture and supply of Compound as required for clinical
development, except that Roche shall manufacture and supply Memory with Memorys requirements
of such Compound for Phase I clinical trials and Memory shall reimburse Roche at Roches
direct cost of manufacture thereof. Notwithstanding the above, Memory shall supply Memory
Compound designated as 63908 for purposes of conducting Phase I studies with respect thereto,
and Roche shall have no obligation to reimburse Memory for the cost of manufacture. Roche
shall supply at its own cost all clinical supply of each Product and all clinical supply of
each placebo for each Product to be used in the Territory, either by itself or through a Third
Party. Roches requirements for supplying Product necessary to fill orders for sales for any
particular calendar quarter shall take precedence over providing clinical supplies of the
Product to Memory for that calendar quarter. The Parties shall cooperate in all reasonable
respects relating to the transition of manufacturing activities from Memory to Roche (for
example, Roche will need Memory to continue to provide clinical supplies of the Product for
Compound 3454 during this transition period).10.2
    
    Commercial Supply. Roche shall be solely and exclusively responsible at its own
expense for the manufacture and supply of Product for sale in the Territory, either by itself
or through Third Parties.
 Article 11. Commercialization
  Article 12. Trademarks
  Article 13. Ownership of Intellectual Property and Patent Rights
 13.1
    
    Ownership of Intellectual Property. Ownership of any Patent Rights developed in the
course of the Strategic Alliance shall be determined in accordance with United States federal
law. Memory shall own all Inventions having as inventors only employees, consultants or
agents of Memory or its Affiliate. Roche shall own all Inventions having
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as inventors only employees, consultants or agents of Roche
or its Affiliate. Inventions having as inventors at least
one employee, consultant or agent of Roche and at least one
employee, consultant or agent of Memory shall be owned
jointly by the Parties. Each of Memory and Roche shall
require all of its employees, consultants and agents to
assign all inventions related to Products made by them to
it.13.2
    
    Patent Prosecution and Maintenance.
 (a)
    
    General. Memory shall have the right, but not the obligation, to
prepare, file, prosecute (including interference and opposition proceedings) and
maintain (including interferences, re-examination and opposition proceedings)
(collectively, Handle) the Memory Patent Rights. [*]Should Memory decide that it does not desire to Handle a Memory Patent Right in a
given country, it shall provide written notice to Roche thereof no less than sixty
(60) days prior to the date when the Memory Patent Right would become abandoned in
such country. After receiving such notice, Roche may, but is not obligated, to
Handle the Memory Patent Right in such country.(b)
    
    Memory Prosecution Obligations Prior to Roche Exercise. Prior to Roche
exercising its right to obtain a License to 3454 Products, Memory shall have no
obligation to consult Roche with respect to prosecution or maintenance of any Memory
Patent Rights to the extent such Memory Patent Right solely or primarily affects
Compound 3454. However, Memory shall have an obligation to keep Roche informed
generally as to the status of any pending patent applications and issued patents
relating to Compound 3454. Memory will provide Roche with updates as to the status of
Memorys patent prosecution as to Compound 3454 on a regular basis (but no less than
once per quarter).(c)
    
    Memory Prosecution Obligations After Roche Exercise. With respect to
Compound 3454, after Roche has exercised its right to obtain a License to 3454 Products
pursuant to Section 2.1 hereof, Roche shall reimburse Memory, on a patent-by-patent
basis, as to any Memory Patent Rights Covering the 3454 Products, for fifty percent
(50%) of any reasonable and documented external costs for Handling such patent or
patent application incurred after the date Roche obtained such License.(d)
    
    Memory Prosecution Obligations Relating to Memory Patent Rights. With
respect to Memory Patent Rights Covering a Product, subject to Section 13.2(b):
 (A)
    
    Memory shall use reasonable efforts to consult with Roche as to
the Handling of any such Memory Patent Rights in sufficient time (for example,
thirty (30) days for instances where actions are due within three (3) months of
a communication from a Patent Office) before any action is due to allow Roche
to provide comments thereon, which comments Memory must reasonably consider if
provided to Memory at least thirty (30) days before such action is due.
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(B)
    
    Memory shall promptly notify and consult with Roche regarding
any priority patent application (Invention Priority Application)
Covering such Product before filing said application.(C)
    
    Memory shall promptly prepare and send to Roche a draft of the
Invention Priority Application for Roches comment and approval, which shall be
provided within thirty (30) days after receipt of such draft Invention Priority
Application (Comment Period).(D)
    
    After reasonably considering Roches comments, Memory shall
file the Invention Priority Application. If Roche fails to provide comments on
a draft within the Comment Period, Memory shall be free to file the Application
at the end of the Comment Period or later.(E)
    
    Within nine (9) months after the filing of an Invention
Priority Application, Memory shall provide Roche a written list of countries
(Country List) in which Memory intends to file patent applications
that claim priority from the given Invention Priority Application. Roche, as
promptly as practicable, shall notify Memory in writing of those countries on
the Country List and any additional countries (Additional Countries)
where Roche requests that patent applications be filed. In turn, Memory
promptly shall notify Roche if it agrees with the filing of applications in
such Additional Countries selected by Roche.(F)
    
    Memory shall file patent applications at least in those
countries where Roche and Memory agree to the filing of patent applications
(Mutually Agreed to Countries) as well as in Additional Countries
selected by Roche that are not within the Mutually Agreed to Countries,
provided that Roche shall reimburse Memory for the reasonable external
prosecution costs in the Additional Countries. Memory shall have the option of
filing an international application designating at least the Mutually Agreed to
Countries, to be followed by national filings in the desired countries.(G)
    
    Memory shall be responsible for the filing and prosecution of
the patent applications and the maintenance of the granted patents as to the
Mutually Agreed to Countries. Memory and Roche each will pay fifty percent
(50%) of the reasonable external costs relating to the preparation, filing and
prosecution of the patent applications and the maintenance of the granted
patents.(H)
    
    As to those countries where Roche and Memory do not agree to
the filing of patent applications, the Party requesting the filing in said
country shall be responsible for all costs relating to the filing and
prosecution of the patent applications and the maintenance of the granted
patents in said countries.
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(I)
    
    Should Roche not respond to Memory within thirty (30) days
after the date Memory provides the Country List, then Memory shall be free to
initiate patent filings, at Memorys sole expense and discretion, in the
countries Memory has selected or still selects.(J)
    
    Memorys failure to notify Roche to the contrary within thirty
(30) days after the date upon which Roche notifies Memory of the Additional
Countries will be deemed an agreement on the part of Memory to file patent
applications in all such Additional Countries and to pay fifty percent (50%) of
the reasonable external costs associated with such filings.(K)
    
    If, in a country, at any time, Roche decides not to continue
funding the prosecution of a patent application or maintenance of a patent
under this Section 13.2, Roche shall notify Memory in writing (Withdrawal
Notice), and Roche shall be relieved from paying any further expenses with
regard to the patent filing in the country. After receiving the Withdrawal
Notice, Memory may but is not obligated, at its sole expense and discretion, to
continue to prosecute and maintain the patent filing in the country.(L)
    
    With respect to a Memory Compound that achieves [*]with
respect to Memory Patent Rights that are intended to Cover such Memory
Compound.(M)
    
    If, in a country, at any time, Memory decides not to continue
the prosecution of a patent application or maintenance of a patent under this
Section 13.2, and such patent application or patent is not one as to which
Roche has already sent a Withdrawal Notice, then Memory shall notify Roche in
writing no less than sixty (60) days prior to the date when the patent
application or patent would become abandoned in such country. At Roches
written request and no cost to Memory, Memory shall then permit Roche to
prosecute and maintain such patent application or patent in such country, at
Roches own cost, to the extent Roche desires to do so [*].(N)
    
    For the Mutually Agreed to Countries and Additional Countries,
Memory shall consult with Roche as to the prosecution and maintenance of all
patent applications and patents claiming Inventions in sufficient time (for
example, thirty (30) days for instances where actions are due within three (3)
months of a communication from a Patent Office) before any action is due to
allow Roche to provide comments thereon, which comments Memory must reasonably
consider.(O)
    
    With respect to any Collaboration Patent Rights in existence
during the Strategic Alliance Term, each of [*].
 13.3
    
    Screening Patent Rights. Notwithstanding the provisions of Section 13.2 hereof [*].
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13.4
    
    Cooperation. The Parties agree to cooperate in the preparation, prosecution and
maintenance of all patent applications filed under Article 13, including obtaining and
executing necessary powers of attorney and assignments by the named inventors, providing
relevant technical reports to Memory concerning the invention disclosed in such patent
application, obtaining execution of such other documents which shall be needed in the filing
and prosecution of such patent applications, discussing in good faith foreign filing strategy,
obtaining patent term extensions, Supplementary Protection Certificates or similar foreign
equivalent types of rights, and, as requested, updating each other regarding the status of
such patent applications.13.5
    
    Infringement. Each Party shall promptly provide written notice to the other Party
during the Agreement Term of any known infringement or suspected infringement of any Memory
Patent Right or Collaboration Patent Right by a Third Party making, using, offering for sale,
selling, importing or exporting a compound which is a nicotinic alpha-7 agonist [*]or a
product containing a compound which is a nicotinic alpha-7 agonist [*] (collectively NA7
Infringement).With respect to each Product Roche shall have the first right to bring and control any
action or proceeding with respect to NA7 Infringement relating to a Memory Patent Right or
Collaboration Patent Right Covering such Product at Roches own expense and by counsel of
its own choice, and Memory shall have the right, at its own expense, to be represented in
any such action by counsel of its own choice. Prior to Roches exercising its right to
obtain a License with respect to 3454 Products pursuant to Section 2.1 hereof, Memory shall
have the first right to bring and control any action or proceeding with respect to NA7
Infringement relating to a Memory Patent Right Covering any such 3454 Product at Memorys
own expense and by counsel of its own choice, and Roche shall have the right, at its own
expense, to be represented in any such action by counsel of its own choice. If the Party
with the right to bring and control a proceeding fails to bring any such action or
proceeding with respect to NA7 Infringement within (a) [*]days following the notice of
alleged infringement or (b) [*]days before the time limit, if any, set forth in the
appropriate laws and regulations for the filing of such actions, whichever comes first, the
other Party shall have the right to bring and control any such action at its own expense and
by counsel of its own choice, and the Party that had the initial right to bring and control
any action or proceeding shall have the right, at its own expense, to be represented in any
such action by counsel of its own choice.A Party that elects to bring and control an infringement action pursuant to this Section
13.5 shall provide prompt written notice to the other Party of any such suit commenced or
action taken by such Party.Upon written request, the Party bringing suit or taking action (Initiating Party)
shall keep the other Party informed of the status of any such suit or action and shall
provide the other Party with copies of all substantive documents and communications filed in
such suit or action. The Initiating Party shall have the sole and exclusive right to select
counsel for any such suit or action.
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The Initiating Party shall, except as provided below, pay all expenses of the suit or
action, including, without limitation, the Initiating Partys attorneys fees and court
costs. With respect to 3454 Products, prior to Roche exercising its right to obtain a
License with respect to such 3454 Product that is the subject of the suit or action, Memory
shall pay attorneys fees and court costs and shall be entitled to retain any damages,
settlement fees or other consideration received as a result of such suit or action. With
respect to any other Product which is the subject of such suit or action, the Parties
attorneys fees and court costs in connection with any such suit or action shall be deducted
from any damages, settlement fees or other consideration received as a result of such suit
or action and the balance thereof shall belong to the Initiating Party, except to the extent
such damages, settlement fees or other consideration are attributable to lost profits with
respect to Products in the Territory, in which case the Parties shall share in such recovery
as follows: (i) in the case of any 3454 Product where Roche has exercised its right to
obtain a License with respect to 3454 Products pursuant to Section 2.1 hereof and Memory has
exercised its co-promotion right with respect thereto, Memory shall receive [*]percent
([*]%) of the lost profits for such 3454 Product and Roche shall receive the remaining [*]
percent ([*]%) or (ii) in any other case, Memory shall receive the royalty that it would
have pursuant to Article 5 had the infringing sales been made by the Parties, and Roche
would receive the balance of the recovery.If the Initiating Party believes it reasonably necessary, upon written request to the other
Party, the other Party shall join as a party to the suit or action but shall be under no
obligation to participate except to the extent that such participation is required as the
result of its being a named party to the suit or action. At the Initiating Partys written
request, the other Party shall offer reasonable assistance to the Initiating Party at no
charge to the Initiating Party except for reimbursement of reasonable out-of-pocket expenses
incurred by the other Party in rendering such assistance. The other Party shall have the
right to participate and have its own representation in any such suit or action at its own
expense.Prior to Roche obtaining a License with respect to any 3454 Product which is the subject of
such suit or action, Memory shall have the sole right to control any settlement and all
negotiations relating to any such suit or action. After Roche has exercised its right to
obtain a License with respect to any 3454 Product which is the subject of suit or action,
Roche shall have the right to control settlement; provided, however, that no settlement
shall be entered into without the written consent of the other Party, not to be unreasonably
withheld.For the avoidance of doubt, Memory shall have the right, but not the obligation, to bring
and control any action or proceeding with respect to any Memory Patent Right relating to
infringement other than NA7 Infringement, at its own expense, without obligation or notice
to Roche.13.6
    
    Hatch-Waxman. Notwithstanding anything to the contrary, should a Party receive a
certification for a Product pursuant to the Drug Price Competition and Patent Term Restoration
Act of 1984 (Public Law 98-417), as amended, or its equivalent in a country other than the US,
then such Party shall immediately provide the other Party with a copy
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of such certification. Prior to Roche exercising its right to obtain a License which
respect to 3454 Products pursuant to Section 2.1 hereof, Memory shall have the sole right to
enforce Memory Patent Rights (determined as if the 3454 Compound is a Compound) Covering any
such 3454 Products. With respect to each Product, Roche shall have the right to enforce
Memory Patent Rights and Collaboration Patent Rights Covering such Product; and Roche shall
have [*]days from the date on which it receives or provides a copy of such certification to
provide written notice to Memory (H-W Suit Notice) whether Roche will bring suit,
at its expense, within a [*]day period from the date of such certification. Should such
[*]day period expire without Roche bringing suit or providing such H-W Suit Notice, then
Memory shall be free to immediately bring suit in its name. If Roche brings suit, at
Roches written request, Memory agrees to be named as a party to such suit.
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13.7
    
    Patent Notices. All notices provided under this Article 13 to Roche shall be given
to:F. Hoffmann-La Roche Ltd
Grenzacherstrasse 124
CH-4070 Basel, Switzerland
Attn:   Head, Patent Law
  Hoffmann-La Roche Inc.
340 Kingsland Street
Nutley, New Jersey 07110
Attn:   Chief Patent Counsel
  Memory Pharmaceutical Corp.
100 Philips Parkway
Montvale, New Jersey 07645
Attn: Head of Business Development
  Millen, White, Zelano and Branigan, P.C.
Arlington Courthouse, Plaza I
2200 Clarendon Blvd, Suite 1400
Arlington, Virginia 22201
Attn: Anthony Zelano, Esq.
 Article 14. Representations and Warranties
 14.1
    
    Representations and Warranties of Both Parties. Each Party warrants and represents
to the other Party that it has the full right and authority to enter into this Agreement and
that it is not aware of any impediment which would inhibit its ability to perform the terms
and conditions imposed on it by this Agreement.14.2
    
    Representations and Warranties of Memory.
 (a)
    
    Corporate Action. Memory represents and warrants to Roche that all
corporate 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 all obligations of Memory hereunder has been taken and this
Agreement constitutes the legal and binding obligation of Memory, enforceable against
Memory in accordance with its terms.(b)
    
    No Conflict. Memory represents and warrants to Roche that the
execution of this Agreement and the performance of the transactions contemplated by
this
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Agreement by Memory will not conflict with or result in a breach of any of the
terms, conditions or provisions of, or constitute a default under any agreement or
other instrument to which Memory is a party or by which it or any of its property is
bound.(c)
    
    Right to Grant Licenses. Memory represents and warrants to Roche that
it has the right to grant Roche the licenses and sublicenses that Memory hereby grants
to Roche under this Agreement. Memory also represents and warrants that, to the best
of its knowledge, the list of Memory Patent Rights set forth on Exhibit I, together
with the [*]list attached to and referred to in the letter dated the date hereby
between the parties, constitute a complete list of nicotinic alpha-7 agonists [*]that
are owned or Controlled by Memory on the date hereof.(d)
    
    Third Party Patent Infringement. Memory represents and warrants that
as of the Effective Date, to its actual knowledge of its senior executives, after
consultation with patent counsel, there is no issued patent right owned or controlled
by any Third Party which Covers the lead Memory Compounds of the Memory Program
identified by Memory to Roche or Compound 3454 and would prevent Roche from selling
such Memory Compound or Compound 3454 in any country of the Territory. As of the date
hereof, the Memory Patent Rights in existence as of the Effective Date are owned
exclusively by Memory; and Memorys senior executives, after consultation with patent
counsel, have no actual knowledge of any information that would, in their opinion,
render invalid and/or unenforceable Composition of Matter Claims for the lead compounds
of the Program in such Memory Patent Rights.(e)
    
    No Material Misstatements. Memory warrants and represents to Roche
that (i) its senior executives have not intentionally failed to disclose any
information actually known to them which in their reasonable opinion, would be material
to Roche entering into this Agreement, with the intent to deceive or defraud Roche, and
to the actual knowledge of its senior executives any information actually disclosed to
Roche in connection with this Agreement does not contain any untrue statement of
material fact or omit to state a material fact, with the intent to deceive or defraud
Roche; (ii) it has provided correct and complete copies of all documents furnished to
Roche.
 14.3
    
    Representations and Warranties of Roche. Roche represents and warrants to Memory
that all corporate action on the part of Roche, its officers, directors and stockholders
necessary for (i) the authorization, execution and delivery of this Agreement and (ii) the
performance of all obligations of Roche hereunder has been taken and this Agreement
constitutes the legal and binding obligation of Roche, enforceable against Roche in accordance
with its terms. Roche also represents and warrants that, to the best of its knowledge, the
list of Included Roche Compounds set forth on Exhibit L constitutes a [*].The execution of
this Agreement and the performance of the transactions contemplated by this Agreement by Roche
will not conflict with or result in a breach of any of the terms, conditions or provisions of,
or constitute a default under any agreement
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or other instrument to which Roche is a party or by which it or any of its property is
bound.14.4
    
    Disclaimer. THE FOREGOING REPRESENTATIONS AND WARRANTIES ARE IN LIEU OF ALL OTHER
REPRESENTATIONS AND WARRANTIES NOT EXPRESSLY SET FORTH HEREIN. MEMORY AND ROCHE DISCLAIM ALL
OTHER REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS OR IMPLIED, WITH RESPECT TO EACH OF
THEIR RESEARCH, DEVELOPMENT AND COMMERCIALIZATION EFFORTS HEREUNDER, INCLUDING, WITHOUT
LIMITATION, WHETHER THE PRODUCTS CAN BE SUCCESSFULLY DEVELOPED OR MARKETED, THE ACCURACY,
PERFORMANCE, UTILITY, RELIABILITY, TECHNOLOGICAL OR COMMERCIAL VALUE, COMPREHENSIVENESS,
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE WHATSOEVER OF THE PRODUCTS. IN NO EVENT
SHALL EITHER MEMORY OR ROCHE BE LIABLE FOR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL
DAMAGES ARISING 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
this Agreement, the Parties will be sharing proprietary information (Confidential
Information) with each other. Except as permitted by this Agreement, each Party shall
and shall cause its Affiliates to treat Confidential Information received from the other Party
as it treats its own proprietary information. In particular, it shall not disclose, divulge
or otherwise communicate such Confidential Information to Third Parties, or use it for any
purpose except pursuant to and in order to carry out its obligations under this Agreement
during the Agreement Term and for a period of five (5) years thereafter; provided that, each
Party (i) may disclose the Confidential Information to such of its directors, officers,
employees, Affiliates, consultants, subcontractors, sublicensees or agents to the extent
reasonably necessary to carry out its obligations under this Agreement, and (ii) hereby agrees
to exercise every reasonable precaution to prevent 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 any
Confidential Information which:
 (a)
    
    was known or used by the Receiving Party or its Affiliates prior to its date of
disclosure to the Receiving Party or its Affiliates by the Disclosing Party or its
Affiliates, as evidenced by the prior written records of the Receiving Party or its
Affiliates; or(b)
    
    either before or after the date of the disclosure to the Receiving Party or its
Affiliates, is lawfully disclosed to the Receiving Party or its Affiliates by a Third
Party rightfully in possession of the Confidential Information; or
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(c)
    
    either before or after the date of the disclosure to the Receiving Party or its
Affiliates, becomes published or generally known to the public through no fault or
omission on the part of the Receiving Party or its Affiliates, but such inapplicability
applies only after such information is published or becomes generally known; or(d)
    
    is independently developed by the Receiving Party or its Affiliates without
reference to or 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 its Affiliates to comply with applicable securities or other laws, to defend or
prosecute litigation or to comply with governmental regulations, provided that, the
Receiving Party or its Affiliates uses all reasonable efforts to provide prior written
notice of such disclosure to the Disclosing Party or its Affiliates and to take
reasonable and lawful actions to avoid or limit such disclosure; or(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 or financial source executes a confidentiality
agreement which is at least as restrictive as the provisions of this Article 15.
 15.3
    
    Exceptions. The restrictions set forth in this Article 15 shall not prevent either
Party from (i) preparing, filing, prosecuting or maintaining a patent application or its
resulting patents related to a Product in accordance with the terms of this Agreement or (ii)
disclosing Confidential Information to governmental agencies to the extent required or
desirable to secure government approval for the development or marketing of a Product.15.4
    
    Publications. During the Agreement Term, the following provisions shall apply with
respect to the disclosure in scientific journals, publications or scientific presentations by
any Party relating to any scientific work performed as part of the Strategic Alliance:
 (a)
    
    A Party (the Publishing Party) shall provide the other Party with a
copy of any proposed publication relating to the work performed and/or the results
achieved in the conduct of the Strategic Alliance at least forty-five (45) days prior
to submission for publication so as to provide such other Party an opportunity to
recommend any changes it reasonably believes are necessary to preserve the Confidential
Information belonging in whole or in part to such other Party, 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 forty-five (45) days of receipt of the copy of the proposed publication,
that such publication in its reasonable judgment (i) contains an Invention for which
the other Party reasonably desires patent protection or (ii) constitutes disclosure of
any Confidential Information, the Publishing Party shall prevent such publication or
delay such publication for a mutually agreeable period of time. In the case of
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Inventions, a delay shall be for a period reasonably sufficient to permit the timely
preparation and filing of a patent application(s) or application(s) on the
Invention, and in no event less than ninety (90) days from the date of Notice.(c)
    
    Notwithstanding the above, each Party shall only issue external media and
investor communications, including press releases related to the activities
contemplated by this Agreement that have either (i) been approved by the other Party or
(ii) are required to be issued by such Party as a matter of law as determined by such
Partys legal counsel. Except as set forth in Section 15.4(d), the Party issuing the
external media or investor communication shall provide the other Party with a copy of
the press release or external communication at least two (2) weeks prior to its
intended publication or communication for the other Partys review. During such
period, the other Party shall (i) approve the draft press release or communication and
permit the party issuing the press release to issue the press release, (ii) contact the
Party issuing the press release or communication to discuss modification to the draft
press release or communication, or (iii) contact the Party issuing the press release or
communication and disapprove the press release or communication. Except as set forth
in Section 15.4(d), if the other Party asks for modification, then the Party issuing
the press release or communication shall either make such modification or work with the
other Party to arrive at a press release or communication that the other Party
approves.(d)
    
    Nothing in this Agreement shall impair either Partys compliance with any
requirements of: (i) governmental agencies to the extent required or desirable to
secure government approval for the development, manufacture or sale of Product in the
Territory (ii) the Securities and Exchange Commission or the national securities
exchange or other stock market on which such Partys securities are traded, (iii) or
any other applicable law. In connection with any filing by either Party of a copy of
this Agreement with the Securities and Exchange Commission (or the national securities
exchange or other stock market on which such Partys securities are traded), the filing
Party shall endeavor to obtain confidential treatment of economic and trade secret
information. Reasonably in advance of any filing under this Section (whether or not
this Agreement is included in the filing), the filing Party shall provide to the other
Party a copy of the proposed filing to the extent it relates to this Agreement and the
Parties shall work cooperatively in good faith, taking into consideration the other
Partys suggestions, regarding the information for which the filing Party will seek to
obtain confidential treatment. However, in the event of any disagreements that cannot
be amicably resolved, the Party which is making the filing shall, together with input
from their own legal counsel, have the ultimate authority to make the filing in the
fashion in which it feels the filing must be made.
 [*] CONFIDENTIAL TREATMENT REQUESTED
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Article 16. Term and Termination
 16.1
    
    Conditions Subsequent. If the Hart-Scott-Rodino Antitrust Improvements Act of 1976
(the HSR Act) applies to the transactions contemplated by this Agreement, the
effectiveness of this Agreement and the transactions contemplated hereunder shall be subject
to and shall be contingent upon the satisfaction under the following condition subsequent to
the execution of this Agreement. The condition subsequent shall be the earlier to occur of
(i) approval of the transaction by the Federal Trade Commission or the appropriate US
anti-trust authorities or (ii) the expiration or termination of all applicable waiting
periods, requests for information (and any extensions thereof) under the HSR Act.Subject to the terms and conditions of this Agreement, each Party shall use all reasonable
efforts to take, or cause to be taken, all reasonable actions and to do, or cause to be
done, all things necessary and appropriate to satisfy the condition subsequent and to
consummate the transactions contemplated by this Agreement in accordance with the terms
hereof.Each Party shall cooperate with the other Party in the preparation, execution and filing of
all documents that are required or permitted to be filed on or before the Effective Date for
the purpose of consummating this transaction, including, filings pursuant to the
Hart-Scott-Rodino Antitrust Improvements Act of 1976. Each Party shall bear its own costs
with respect to preparing, executing and filing such documents.16.2
    
    Agreement Term. The Agreement Term shall commence on the Effective Date and end,
unless earlier terminated upon the mutual agreement of the Parties or in accordance with the
provisions of this 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, if any, the Licenses granted to Roche by Memory under this Agreement to make,
have made, use, offer for sale, sell, import and export Products shall be fully paid-up.16.3
    
    Termination for Breach. (a) Each Party (Non-Breaching Party) shall be
entitled to terminate this Agreement by written notice to the other Party (Breaching
Party) in the event that the Breaching Party is in default of any of its material
obligations hereunder and fails to remedy such default within sixty (60) days (thirty (30)
days for payment defaults) after provision of written notice thereof by the Non-Breaching
Party. Any such notice shall specifically state that the Non-Breaching Party intends to or
reserves the right to terminate this 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
shall be the date sixty (60) days after provision of written notice thereof by the
Non-Breaching Party.In the event Roche does not pay any full payment by reason of a good faith dispute as to
whether such payment is due pursuant to the terms of this Agreement, Memory shall not
 [*] CONFIDENTIAL TREATMENT REQUESTED
 36




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have the right to terminate this Agreement as a result of such nonpayment until resolution
of the dispute.16.4
    
    Right to Terminate.
 (a)
    
    Roche shall have the unilateral right to elect not to maintain its license
rights with respect to Compound 3454 upon the occurrence of each Event described in
Section 1 of Exhibit B hereto with respect to such Compound 3454. Roche may exercise
such right by giving written notice thereof to Memory within thirty (30) days after the
occurrence of such Event. In the event Roche exercises such right, Roche shall not
have any obligation to make the payment to Memory related to such Event and shall not
have the right to obtain a License with respect to 3454 Products, and this Agreement
shall terminate with respect to Compound 3454 and 3454 Products and Roche shall have no
further obligation to make any payments pursuant to Section 4.4 and Article 5 hereof
relating to Compound 3454 or 3454 Products.(b)
    
    Roche shall have the unilateral right to terminate this Agreement on a
region-by-region basis (the regions being North America (US and Canada), Europe and
Asia)) or Product-by-Product, either on a worldwide basis or as to North America (US
and Canada) only or ex-North America only, at any time by providing six (6) months
prior written notice to Memory; provided, however, that if the Parties do not agree as
to a proposed sublicense for which Memory has withheld consent, Roche shall have a
unilateral right to terminate this Agreement for the territory to which such proposed
sublicense relates. Notwithstanding the preceding sentence, if there has been a launch
of a Product in a Major Market Country, then such prior notice must be for twelve (12)
months. The effective date of termination under this Section shall be the date six (6)
months (or twelve (12) months as the case may be) after Roche provides such written
notice to Memory.(c)
    
    [*]
 16.5
    
    Consequences of Termination.Upon (i) any termination of this Agreement in its entirety pursuant to Section 16.2, Section
16.3 (but only in the case of termination by Memory by reason of breach of this Agreement by
Roche) or Section 16.4(b), (ii) termination of this Agreement by Roche in its entirety or in
a region or country or in respect of a Memory Product or 3454 Product pursuant to Section
16.4 hereof, or (iii) termination of this Agreement by Memory in its entirety or in a region
pursuant to Article 3, any and all rights and licenses of any kind or nature granted by
Memory to Roche under this Agreement (or, as applicable, with respect to termination of this
Agreement as to a country, region, Memory Product or 3454 Product, respectively) shall
terminate on the effective date of termination. For the purposes of this Section 16.5, in
the event of any such termination, the following shall apply.
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(a)
    
    Roche shall, upon Memorys written request, assign and transfer (or, with
respect to termination of this Agreement as to any country or region, exclusively
license) to Memory, or its Affiliates as requested by Memory, at no expense to Memory,
or its Affiliates, and free of any liens, pledges or security interests other than
those incurred in the commercialization of any Memory Product or 3454 Product, all of
Roches right, title and interest in and to the relevant Memory Products or 3454
Product, together with an assignment of (or, with respect to termination of this
Agreement as to any country or region, an exclusive license relating to such country or
region) (i) all trademarks and trademark applications used or intended for use
specifically for the relevant Memory Product(s) or 3454 Product, (ii) all regulatory
filings (such as INDs and drug master files), Regulatory Approvals, and clinical trial
agreements (to the extent assignable and not cancelled) for the relevant Memory
Product(s) or 3454 Product, and (iii) all data, including clinical data, materials and
information of any kind or nature whatsoever, in Roches possession or in the
possession of its Affiliates or its or their respective agents related to the relevant
Memory Compounds and/or Compound 3454 and/or Memory Product(s) and/or 3454 Product and
(iv) all rights relating to the infringement of Memory Patent Rights and/or
Collaboration Patent Rights, related to and necessary for the commercialization of the
relevant Memory Product(s) or 3454 Product . Without limiting the generality of the
preceding sentence, Memory shall, upon such transfer (or exclusive license, as
appropriate), have the right to disclose such filings, approvals and data to (x)
governmental agencies of the country or region to the extent required or desirable to
secure government approval for the development, manufacturing or sale of such Memory
Products or 3454 Product in the country or region, (y) Third Parties acting on behalf
of Memory, its Affiliates or sublicensees, to the extent reasonably necessary or
desirable for the development, manufacture, or sale of such Memory Products or 3454
Product in the country or region, and (z) Third Parties to the extent reasonably
necessary or desirable to market such Memory Products or 3454 Product in the country or
region. All such filings, approvals and data may be transferred to Memory pursuant to
this Section 16.4 by a reference database and shall be deemed to be Memory Confidential
Information. In addition, Roche may retain access to the transfer database or a copy
of all of such filings, approvals and data for archival purposes.(b)
    
    In addition, for a given Memory Product, 3454 Product and country or region so
terminated, or for the Territory in the case of termination of this Agreement in its
entirety, Roche hereby grants to Memory the right to obtain a sole and exclusive,
royalty bearing license, under Collaboration Patent Rights and Roche Know-How Covering
such Memory Product or 3454 Product and Roche trademarks used or intended for use in
connection with the sale of such Memory Product or 3454 Product, to make, have made,
use, offer for sale, sell, import and export such Memory Product(s) or 3454 Product in
such country, region or the Territory, as applicable. Memory shall exercise such right
by giving written notice thereof to Roche within sixty (60) days after the date of
termination. In consideration of such license, Memory shall pay Roche reasonable
milestones and royalties consistent with industry practices as may be mutually agreed
upon by the Parties
 [*] CONFIDENTIAL TREATMENT REQUESTED
 38




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(such royalties not to exceed [*]percent ([*]%) of Net Sales); and if the Parties
are unable to agree upon such financial terms, such matter shall be resolved by
arbitration in accordance with Article 17.(c)
    
    Roche shall supply, or cause to be supplied, to Memory, upon Memorys written
request, Memory or its licensees clinical and/or commercial requirements of such
Memory Compounds or Compound 3454 [*]pursuant to a supply agreement to be negotiated
in good faith by the parties, provided that (i) such requirements shall be supplied to
Memory or its licensee at Roches direct manufacturing costs and allocation of
manufacturing overhead, and (ii) Roches supply obligation shall not continue for more
than [*]years after such termination, and (iii) Roche shall maintain the same quality
and specifications relating to such Memory Compounds, Compound 3454, Memory Product(s)
and 3454 Product(s) as immediately prior to notice of termination, and (iv) as to other
terms, such agreement shall be reasonably consistent with Roches other arms length
supply agreements, and (v) Memory shall use reasonable best efforts to effect a
transfer as soon as practicable of manufacturing activities relating to such Memory
Compounds, Compound 3454, Memory Product(s) and 3454 Product(s) from Roche to another
supplier. In addition, Roche shall also transfer to Memory and its designated supplier
a manufacturing transfer package that will enable Memory or such designated supplier to
manufacture such Memory Compounds, Compound 3454, Memory Product(s) or 3454 Product(s)
in a timely manner.
 Roche shall take prompt actions, including the execution of such instruments, agreements and
documents, as are necessary or desirable to effect the foregoing. It is agreed such
transfers and actions shall commence as soon as practicable and shall be completed [*]in a
manner that will permit Memory to continue without interruption the business of developing,
manufacturing, marketing and selling such Memory Product(s) or 3454 Products.Upon any termination of this Agreement in whole or in part, [*].Upon any termination [*]Roches license under Section 2.1 with respect to Memory Compounds
and Memory Products shall terminate. [*].Upon [*]termination [*]Memory shall [*]have the right to negotiate with Roche for not
more [*]an assignment of [*]rights to any Collaboration Products and/or to obtain the sole and
exclusive, royalty bearing
license under the Collaboration Patent Rights and Roche Know-How Covering such Collaboration
Product(s) and Roche trademarks used or intended for use in connection with the sale of such
Collaboration Product(s)[*].16.6
    
    Royalty and Payment Obligations. Notwithstanding anything contained in this
Agreement to the contrary except Section 16.4(a), termination of this Agreement by either
Party for any reason will not release Roche from any obligation to pay royalties or make any
payments to Memory which were accrued prior to the effective date of termination (including
for sales made and Events achieved under Article 4, prior to the date of termination) or with
respect to any Collaboration Compounds, and Collaboration
 [*] CONFIDENTIAL TREATMENT REQUESTED
 39




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Products (and, to the extent the Licenses to Compound 3454 and 3454 Products survive,
Compound 3454 and/or any 3454 Products) in the amounts, at the times and in the manner set
forth in this Agreement as if this Agreement had not terminated, in whole or in part,
provided that the obligations under Section 13.2(O) shall not survive with respect to any
non-accrued obligations. However, except as is otherwise provided in this Agreement,
termination of this Agreement by either Party for any reason will release Roche from any
obligation to pay royalties or make any payments to Memory with respect to any Memory
Products and 3454 Products which would have otherwise become accrued after the effective
date of termination.16.7
    
    Termination for Failure to Satisfy the Condition Subsequent. Either Party may
terminate this Agreement in its entirety, upon ten (10) days prior written notice to the other
Party if the condition subsequent under Section 16.1 has not been fulfilled by December 31,
2006, in which case, upon termination there shall be no liabilities for obligations on the
part of either party except that Article 15 shall survive such termination and except for any
breach of Section 16.1, and the provisions of the Original Strategic Alliance Agreement shall
remain in full force and effect.16.8
    
    Survival of Obligations. Article 6, Section 13.1, Section 13.5, Section 13.6,
Section 13.7, Article 14, Article 15, Section 16.5, Section 16.6, Section 16.8, Article 17 and
Article 18, and any definitions used in such Section or Article, shall survive the termination
of this Agreement in its entirety. Except for obligations which clearly are not intended to
continue in respect of a partial termination (including the diligence obligation, and except
as provided in Section 16.6, royalty obligations), with respect to the region, country or
Product terminated, all obligations in this Agreement shall survive a partial termination.
 Article 17. Arbitration
 Dispute AAA
 [*] CONFIDENTIAL TREATMENT REQUESTED
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]
  Article 18. Miscellaneous
 18.1
    
    Indemnification.
 (a)
    
    Roche agrees to defend Memory and the other Memory Indemnified Parties at
Roches cost and expense, 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, fees or expenses arising out of or
otherwise relating to (i) activities of Roche and its Affiliates in the conduct of the
Strategic Alliance, (ii) the development, manufacture, use, offer for sale, sale or
other disposition of any Product by Roche, its Affiliates or sublicensees, and each of
their distributors, representatives or anyone in privity therewith, or (iii) the gross
negligence or willful misconduct of Roche, its Affiliates or sublicensees. In the
event of any such claim against the Memory Indemnified Parties by a Third Party, Memory
shall promptly notify Roche in writing of the claim (provided that any failure or delay
to notify shall not excuse any obligations of Roche except to the extent Roche is
actually prejudiced thereby) and Roche shall solely manage and control, at its sole
expense, the defense of the claim and its settlement provided further that Roche shall
not settle any such claim, if such settlement may have an adverse effect on Memory,
without the prior written consent of Memory, which consent shall not be unreasonably
withheld. The Memory Indemnified Parties shall cooperate with Roche and may, at their
option and expense, be represented in any such action or proceeding. Roche shall not
be liable for any litigation costs or expenses incurred by the Memory Indemnified
Parties without Roches written authorization.(b)
    
    Memory agrees to defend Roche and the other Roche Indemnified Parties at
Memorys cost and expense, and will indemnify and hold Roche and its directors,
officers, employees and agents (the Roche Indemnified Parties) harmless from
and against any claims, losses, costs, damages, fees and expenses arising out of any
claim, arising out of or otherwise relating to (i) activities of Memory in the conduct
of the Strategic Alliance, (ii) the development, manufacture, use, offer for sale, sale
or other disposition of any Product by Memory, its Affiliates, licensees
 [*] CONFIDENTIAL TREATMENT REQUESTED
 41




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other than Roche, sublicensees and each of their distributors, representatives or
anyone in privity therewith (a Roche Responsible Person) (but only to the
extent same is a consequence of Article 3 and/or Article 16), and (iii) the gross
negligence or willful misconduct of Memory, its Affiliates, licensees, distributors,
representatives or anyone in privity therewith other than a Roche Responsible
Person. In the event of any such claim against the Roche Indemnified Parties by a
Third Party, Roche shall promptly notify Memory in writing of the claim (provided
that any failure or delay to notify shall not excuse any obligation of Memory except
to the extent Memory is actually prejudiced thereby) and Memory shall solely manage
and control, at its sole expense, the defense of the claim and its settlement
provided further that Memory shall not settle any such claim if such settlement may
have an adverse effect on Roche without the prior written consent of Roche, which
consent shall not be unreasonably withheld. The Roche Indemnified Parties shall
cooperate with Memory and may, at their option and expense, be represented in any
such action or proceeding. Memory shall not be liable for any litigation costs or
expenses incurred by the Roche Indemnified Parties without Memorys written
authorization.
 18.2
    
    Force Majeure. Neither Party to this Agreement shall be responsible to the other
Party for nonperformance or delay in performance of the terms or conditions of this Agreement
due to acts of God, acts of governments, war, riots, strikes, accidents in transportation, or
other causes beyond the reasonable control of such Party, but such force majeure shall toll
any and all obligations and time periods for so long as such force majeure continues.18.3
    
    Bankruptcy. All licenses (and to the extent applicable rights) granted under or
pursuant to this Agreement by Memory to Roche are, and shall otherwise be deemed to be, for
purposes of Section 365(n) of Title 11, US Code (the Bankruptcy Code), licenses of
rights to intellectual property as defined under Section 101(60) of the Bankruptcy Code.
Unless Roche elects to terminate this Agreement under Article 16, the Parties agree that
Roche, as a licensee or sublicensee of such rights under this Agreement, shall retain and may
fully exercise all of its rights and elections under the Bankruptcy Code, subject to the
continued performance of its obligations under this Agreement.18.4
    
    Governing Law. This Agreement shall be governed by and interpreted in accordance
with the laws of New Jersey, without giving effect to principles of conflicts of law.18.5
    
    Waiver. The waiver by a Party of a breach or a default of any provision of this
Agreement by the other Party shall not be construed as a waiver of any succeeding breach of
the same or any other provision, nor shall any delay or omission on the part of a Party to
exercise or avail itself of any right, power or privilege that it has or may have hereunder
operate as a waiver of any right, power or privilege by such Party.18.6
    
    Notices. Any notice or other communication in connection with this Agreement must be
in writing and may be given by any of the following methods: (i) personal delivery against a
signed receipt; (ii) registered or certified mail, postage prepaid, return receipt requested;
or (iii) by overnight delivery service which obtains a signed receipt. Notice shall be
effective when delivered to the addressee at the address listed below or such
 [*] CONFIDENTIAL TREATMENT REQUESTED
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other address as the addressee shall have specified in a written notice actually received by
the addresser.If to Memory:
 
 and
 
 If to Roche:
 
 and
 
 18.7
    
    No Agency. Nothing herein shall be deemed to constitute either Party as the agent or
representative of the other Party. Each Party shall be an independent contractor, not an
employee or partner of the other Party. Each Party shall be responsible for the conduct of
activities at its own facilities and for any liabilities resulting therefrom. Neither Party
shall be responsible for the acts or omissions of the other Party, and neither Party will have
authority to speak for, represent or obligate the other Party in any way without prior written
authority from the other Party.18.8
    
    Entire Agreement. This Agreement and the Exhibits and Schedules hereto (which
Exhibits and Schedules are deemed to be a part of this Agreement for all purposes) contain the
full understanding of the Parties with respect to the subject matter hereof and supersede all
prior understandings and writings relating thereto. No waiver, alteration or modification of
any of the provisions hereof shall be binding unless made in writing and signed by the
Parties.
 [*] CONFIDENTIAL TREATMENT REQUESTED
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18.9
    
    Headings. The headings contained in this Agreement are for convenience of reference
only and shall not be considered in construing this Agreement.18.10
    
    Severability. In the event that any provision of this Agreement is held by a court
of competent jurisdiction to be unenforceable because it is invalid or in conflict with any
law of any relevant jurisdiction, the validity of the remaining provisions shall not be
affected, and the Parties shall negotiate a substitute provision that, to the extent possible,
accomplishes the original business purpose. During the period of such negotiation, and
thereafter if no substituted provision is agreed upon, any such provision which is enforceable
in part but not in whole shall be enforced to the maximum extent permitted by law.18.11
    
    Assignment. Neither this Agreement nor any of the rights or obligations hereunder
may be assigned by either Party without the prior written consent of the other Party, except
to an Affiliate of the assigning Party or to any other party who acquires all or substantially
all of the pharmaceutical business of the assigning Party by merger, sale of assets or
otherwise, subject to Roches rights pursuant to Sections 3.2(b) and 7.5(g) and so long as
such Affiliate or other party agrees in writing to be bound by the terms of this Agreement.
Notwithstanding the preceding, if Memory assigns its rights and/or obligations under this
Agreement to a party who acquires all or substantially all of the pharmaceutical business of
Memory by merger, sale of assets or otherwise, then Memorys rights under Section 2.4 shall
become null and void18.12
    
    Successors and Assigns. Except as otherwise provided herein, this Agreement shall
be binding upon and inure to the benefit of the Parties hereto and their successors and
permitted assigns under Section 18.11. To the extent a Party has the right to terminate this
Agreement in connection with a Change of Control, the preceding sentence shall not in any
manner affect or reduce such Partys right to terminate.18.13
    
    Intentionally Omitted.18.14
    
    Interpretation. The words include, includes and including shall be deemed to
be followed by the phrase without limitation. All references herein to Articles, Sections,
and Schedules shall be deemed references to Articles and Sections of, and Schedules to, this
Agreement unless the context shall otherwise require. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in accordance with
international accounting standards (IAS), as in effect from time to time. Unless
the context otherwise requires, countries shall include territories.18.15
    
    Counterparts. This Agreement may be executed by fax and in any number of
counterparts, each of which shall be deemed an original but all of such together shall
constitute one and the same instrument.
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MEMORY PHARMACEUTICALS CORP.
    
    HOFFMANN-LA ROCHE INC.By:
    
    /s/ James R. Sulat
    
    By:
    
    /s/ Dennis E. BurnsTitle:
    
    Chief Executive Officer
    
    Title:
    
    Vice President,Global Head of Business DevelopmentF. HOFFMANN-LA ROCHE LTDBy:
    
    /s/ Stefan ArnoldTitle:
    
    Deputy DirectorBy:
    
    /s/ Dr. Peter HugTitle:
    
    Executive Vice President,Pharma Partnering
 [*] CONFIDENTIAL TREATMENT REQUESTED
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Schedule 1
 Compound 3454 Data and Reports
  [*] CONFIDENTIAL TREATMENT REQUESTED




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SCHEDULE 2
 Intentionally Omitted
 [*] CONFIDENTIAL TREATMENT REQUESTED




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Schedule 3
 [*] Guidelines for Compounds
 [*]
 [*] CONFIDENTIAL TREATMENT REQUESTED




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SCHEDULE 4
 End of Phase I Criteria
 [*]
 [*] CONFIDENTIAL TREATMENT REQUESTED




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EXHIBIT A
 Workplan
 [*]
 [*] CONFIDENTIAL TREATMENT REQUESTED




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EXHIBIT B
Payments With Respect to 3454 Products
 1.
    
    Payments to Maintain Roche License Rights with respect to 3454 Products.
 (a)
    
    Neurological Indications. Roche shall pay to Memory, in order to
maintain its license rights with respect to 3454 Products pursuant to Section 4.4 of
the Agreement and the other provisions of the Agreement with respect to such 3454
Products, the following non-refundable and non-creditable payments upon the first
occurrence of the following Events for such any such 3454 Product.
 Event
    
    
    Payment (mio US$)[*](or foreign equivalent) for a Neurological Indication
and delivery of the data and reports specified in
Schedule 1
    
    
    [*][*](or foreign equivalent) for a Neurological
Indication and delivery of the data and reports
specified in Schedule 1
    
    
    [**]
 (b)
    
    Psychiatric Indications. Roche shall pay to Memory, in order to
maintain its license rights with respect to 3454 Products pursuant to Section 4.4 of
this Agreement and the other provisions of the Agreement with respect to such 3454
Products, the following non-refundable and non-creditable payments upon the first
occurrence of the following Events for any such 3454 Product.
 Event
    
    
    Payment (mio US$)[*](or foreign equivalent) for a Psychiatric Indication
and delivery of the data and reports specified in
Schedule 1
    
    
    [*][*](or foreign equivalent) for a Psychiatric Indication
and delivery of the data and reports specified in
Schedule 1
    
    
    [*+]
 Each payment in Section 1(a) and 1(b) shall be due and payable by Roche within sixty
(60) days after occurrence of the applicable Event. Roche will make each of such
payments only once.
 
 *
    
    If any Product is for a Neurological
indication other than Alzheimers Disease, then the payment shall be [*].+
    
    If any Product is for a Psychiatric
Indication other than schizophrenia, then the payment shall be [*]. [*] CONFIDENTIAL TREATMENT REQUESTED




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For the avoidance of doubt, the Parties confirm and agree that no amount payable
under Section 4.4 of the Agreement or this Exhibit B or any of the other Exhibits
thereto shall reduce any royalties payable under Article V of the Agreement or any
of the other Exhibits thereto.
 2.
    
    Development Event Based Payments.
 (a)
    
    Neurological Indications. Roche shall pay to Memory with respect to
any 3454 Product the following non-refundable and non-creditable payments upon the
first occurrence of the following Events for such 3454 Product:
 Event
    
    
    Payment (mio US$)[*](or a foreign equivalent) for a Neurological
Indication
    
    
    [*][*]for a Neurological Indication
    
    
    [*][*]for a Neurological Indication
    
    
    [*]
 (b)
    
    Psychiatric Indications. Roche shall pay to Memory with respect to any
3454 Product the following non-refundable and non-creditable payments upon the first
occurrence of the following Events for such 3454 Product:
 Event
    
    
    Payment (mio US$)[*](or foreign equivalent) for a Psychiatric Indication
    
    
    [*][*]for a Psychiatric Indication
    
    
    [*][*]for a Psychiatric Indication
    
    
    [*]
 (c)
    
    Other Indications. Roche shall pay to Memory the following
non-refundable, non-creditable payments upon the first occurrence of the following
Events for a 3454 Product:
 Event
    
    
    Payment (mio US$)[*](or foreign equivalent) for an Other Indication
    
    
    [*][*]for an Other Indication
    
    
    [*][*]for an Other Indication
    
    
    [*]
 [*] CONFIDENTIAL TREATMENT REQUESTED




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Each payment in Section 2(a), 2(b) and 2(c) shall be due and payable by Roche within
sixty (60) days after occurrence of the applicable Event. Roche will make each of
such payments only once.For the avoidance of doubt, the Parties confirm and agree that no amount payable
under Section 4.4 of the Agreement or this Exhibit B or any of the other Exhibits
thereto shall reduce any royalties payable under Article 5 of the Agreement or any
of the other Exhibits thereto.
 [*] CONFIDENTIAL TREATMENT REQUESTED




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EXHIBIT C
Payments with respect to Memory Products
  Event
    
    
    Payment (mio US$)[*](or a foreign equivalent) for any Indication
    
    
    [*][*](or a foreign equivalent) for any Indication
    
    
    [*][*](or a foreign equivalent) for any Indication
    
    
    [*][*](or a foreign equivalent) for any Indication
    
    
    [*][*]for any Indication
    
    
    [*][*]for any Indication
    
    
    [*]
   [*] CONFIDENTIAL TREATMENT REQUESTED




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EXHIBIT D
Payments with respect to Collaboration Products
  Event
    
    
    Payment (mio US$)[*](or a foreign equivalent) for any Indication
    
    
    [*][*](or a foreign equivalent) for any Indication
    
    
    [*][*](or a foreign equivalent) for any Indication
    
    
    [*][*](or a foreign equivalent) for any Indication
    
    
    [*][*]for any Indication
    
    
    [*][*]for any Indication
    
    
    [*]
   [*] CONFIDENTIAL TREATMENT REQUESTED




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##### 



EXHIBIT E
Royalties with respect to 3454 Products
 1.
    
    Royalties for Neurological Indications. Roche shall pay to Memory the following
payments for a given 3454 Product having a Regulatory Approval for a Neurological Indication,
based upon the Net Sales of such 3454 Product, which such Net Sales shall be subject to
adjustment as provided in Article 5 of the Agreement and this Exhibit E. Such royalty
payments shall be calculated by multiplying the following percentages by the following annual
Net Sales of such 3454 Product (all Net Sales amounts in $ US million):
 Annual Net Sales
    
    
    Percent (%) of Net Sales> 0 - < [*]
    
    
    [*]>
[*] - < [*]
    
    
    [*]> [*]- < [*]
    
    
    [*]> [*]
    
    
    [*]
 By way of illustration, assume in calendar year 2012 that (i) Net Sales of the 3454 Product
total $ [*]and (ii) no adjustments or deductions to payments under Article 5 of the
Agreement or this Exhibit E apply. The royalties due and payable by Roche to Memory for
such Net Sales would be $ [*], calculated as follows:
 ApplicableNet Sales (in
    
    
    Sales-Based Payment
    
    
    Amount Payable (inmillions)
    
    
    Percentage
    
    
    millions)US$ [*]
    
    
    [*]%
    
    
    US$ [*]US$ [*]
    
    
    [*]%
    
    
    US$ [*]US$ [*]
    
    
    [*]%
    
    
    US$ [*]US$ [*]
    
    
    [*]%
    
    
    US$ [*]Total
    
    
    
    
    
    US$ [*]
 2.
    
    Royalties for Psychiatric Indications. Roche shall pay to Memory the following
payments for a given 3454 Product having a Regulatory Approval for a Psychiatric Indication,
based upon the Net Sales of such 3454 Product, which such Net Sales shall be subject to
adjustment as provided in Article 5 of the Agreement and this Exhibit E. Such royalty
payments shall be calculated by multiplying the following percentages by the following annual
worldwide Net Sales of such 3454 Product (all Net Sales amounts in $ US million):
 Annual Net Sales
    
    
    Percent (%) of Net Sales> 0 - < [*]
    
    
    [*]> [*]- < [*]
    
    
    [*]>
[*]- < [*]
    
    
    [*]> [*]
    
    
    [*]
 [*] CONFIDENTIAL TREATMENT REQUESTED




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##### 



EXHIBIT F
Royalties with respect to Memory Products
  Annual Net Sales
    
    
    Percent (%) of Net Sales> 0 - < [*]
    
    
    [*]>
[*]- < [*]
    
    
    [*]> [*]
    
    
    [*]
 [1,700,000,000] $ [165 million],
 ApplicableNet Sales (in
    
    
    Sales-Based Payment
    
    
    Amount Payable (inmillions)
    
    
    Percentage
    
    
    millions)US$[*]
    
    
    [*]%
    
    
    US$[*]US$[*]
    
    
    [*]%
    
    
    US$[*]US$[*]
    
    
    [*]%
    
    
    US$[*]Total
    
    
    
    
    
    US$[*]
 [*] CONFIDENTIAL TREATMENT REQUESTED




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##### 



EXHIBIT G
Royalties with respect to Collaboration Products
  Annual Net Sales
    
    
    Percent (%) of Net Sales> 0 - < [*]
    
    
    [*]> [*]- < [*]
    
    
    [*]> [*]
    
    
    [*]
 [*] [*],
 ApplicableNet Sales (in
    
    
    Sales-Based Payment
    
    
    Amount Payable (inmillions)
    
    
    Percentage
    
    
    millions)US$[*]

    
    
    [*]%
    
    
    US$[*]US$[*]
    
    
    [*]%
    
    
    US$[*]US$[*]
    
    
    [*]%
    
    
    US$[*]Total
    
    
    
    
    
    US$[*]
 [*] CONFIDENTIAL TREATMENT REQUESTED




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##### 



EXHIBIT H
Intentionally Omitted
 [*] CONFIDENTIAL TREATMENT REQUESTED




---



##### 



EXHIBIT I
Memory Patent Rights
 [*]
 [*] CONFIDENTIAL TREATMENT REQUESTED




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##### 



EXHIBIT J
Memory Patent Rights Primarily Applicable
to Memory Screening Technology
 [*]
 [*] CONFIDENTIAL TREATMENT REQUESTED




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##### 



EXHIBIT K
Heads of Agreement for Co-Promotion
of 3454 Product
 Memory Election to Co-Promote
 Co-Promotion Territory
 Term and Termination
 Assignability
 Additional Indications [*] [*]
  [*] CONFIDENTIAL TREATMENT REQUESTED




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##### 



Financials [*] [*] [*] [*] [*] ([*] [*] [*] [*] [*]
 Governance
 Memorys Obligations [*] [*]
 Roches Obligations and Authority
 Non-Solicitation
 Reporting Provisions
 [*] CONFIDENTIAL TREATMENT REQUESTED




---



##### 



Indemnification
 Full Agreement
 [*] CONFIDENTIAL TREATMENT REQUESTED




---



##### 



EXHIBIT L
Included Roche Compounds


[*]


[*] CONFIDENTIAL TREATMENT REQUESTED