EX-10.1*






SECOND AMENDMENT TO THE COLLABORATION AND LICENSE AGREEMENT




This SECOND AMENDMENT TO THE COLLABORATION AND LICENSE AGREEMENT (this “Second Amendment”) is
executed to be effective this 18th day of August 2005, by and between Memory Pharmaceuticals Corp.
(“Memory”), and F. Hoffmann-La Roche Ltd and Hoffmann-La Roche Inc. (collectively, “Roche”) (Memory
and Roche are hereinafter referred to individually as a “Party” and collectively as the “Parties”).
All capitalized terms used herein and not defined shall have the meanings set forth in the
Agreement (as defined below).



WHEREAS, Memory and Roche have previously entered into a Collaboration and License Agreement
dated July 29, 2002, as amended by an Amendment to the Collaboration and License Agreement dated
August 6, 2004 (the “First Amendment”) (the Agreement and First Amendment are hereinafter referred
to collectively as the “Agreement”); and



WHEREAS, the Parties wish to amend the Agreement so that the compounds MEM 1414 and MEM 1917
cease to be Memory Compounds and may be developed and commercialized by Memory, either alone or
with one or more third parties, subject to Roche’s future option rights hereunder and the other
provisions of this Second Amendment;



NOW, THEREFORE, in consideration for the foregoing promises and for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby
agree as follows:



1. Future Development of Certain Compounds. The Agreement shall be terminated with
respect to MEM 1414 and MEM 1917 only and such compounds shall cease to be Memory Compounds as of
the date hereof, subject to the option rights of Roche set forth in Section 3 of this Second
Amendment.



2. Return and Governance. Promptly after the execution of this Second Amendment,
Roche shall: (i) assign and transfer to Memory at no expense to Memory the items set forth in
Section 16.4(a) of the Agreement solely to the extent each relates to MEM 1414 and MEM 1917, free
and clear of any liens or security interests, (ii) create a shareweb of the items set forth in (i)
above for use by both Parties as reference data, and (iii) transfer existing inventory of MEM 1414
and MEM 1917 to Memory at no expense to Memory, free and clear of any liens or security interests.
Roche’s obligations pursuant to Section 16.4(c) of the Agreement shall be fulfilled and discharged
by Roche’s transfer of existing inventory of MEM 1414 and MEM 1917 to Memory as provided herein.
Promptly after the execution of this Second Amendment, each Party shall appoint an individual to
act as a liaison and to coordinate any communications that may be required or requested between the
Parties relating to MEM 1414 and MEM 1917.



3. Option Rights of Roche. Roche shall have the option (“Option”) to obtain an
exclusive license to develop and commercialize MEM 1414 and/or MEM 1917 (each, an “Option
Compound”) upon the terms set forth in this Second Amendment. Roche may exercise the Option in
accordance with the provisions of Section 4 below. If Roche exercises the Option with respect to
an Option Compound, then such Option Compound shall be deemed to be a Memory



[*] Confidential Treatment is Requested





1






Compound for purposes of the Agreement, and all provisions of the Agreement shall apply to such
Option Compound, except for those provisions that are changed by this Second Amendment. If Roche
does not exercise its Option with respect to an Option Compound, then Roche shall have no further
rights or interest and no further obligations or payments, including but not limited to royalties
or Event payments with respect to such Option Compound.



4. Exercise of Option. If Memory or a Third Party completes a Phase IIb clinical
trial of an Option Compound for a Psychiatric Indication, Neurological Indication or Other
Indication, which has generated data to support a Phase III clinical trial that Memory intends to
conduct (itself and/or together with any Third Party) unless Roche exercises its Option, then
Memory shall give prompt written notice thereof to Roche. Roche shall have fourteen (14) days
after receipt of such notice from Memory to request in writing that Memory provide Roche with a
data package for that Option Compound. Roche may request such a data package only if Roche has a
good faith interest in evaluating the data package for the purpose of determining whether to
exercise its Option. Commencing on the date that Roche receives the complete data package, Roche
shall have the right to conduct due diligence related to the Option Compound for a period of up to
ninety (90) days. Roche’s due diligence may include, but is not limited to, the following: (i) a
full clinical and manufacturing audit of Memory, at Roche’s expense, (ii) the right to request all
data, including raw data, obtained to date relating to the Option Compound, (iii) the right to
inspect Memory’s facilities and, to the extent within the reasonable control of Memory, the
facilities of its clinicians and manufacturers (and Memory agrees to use its best efforts to ensure
that Roche can inspect the facilities of such third parties), and (iv) a complete detailed report
of the Development Costs actually incurred that in Memory’s view should form the basis for the
calculation of Roche’s reimbursement to Memory of Phase II actual global Development Costs. To
exercise the Option, Roche must give written notice of exercise to Memory within ten (10) days
after Roche’s completion of its due diligence related to the Option Compound. The data package and
any and all other information provided by Memory to Roche relating to the development of MEM 1414
and MEM 1917 shall be treated by Roche as the Confidential Information of Memory in accordance with
the provisions of Article 15 of the Agreement.



5. Development Event Payments and Royalties for Option Compounds. If Roche exercises
its Option for an Option Compound, then Roche shall pay to Memory [*] percent ([*]%) of Phase II
actual global development costs (“Development Costs”) incurred prior to Roche’s exercise of its
Option by Memory or a Third Party with respect to such Option Compound. Roche shall have the right
to have an independent third party accounting firm, selected by Roche and reasonably acceptable to
Memory, audit Memory’s books and records, at Roche’s expense, to determine the actual global
Development Costs. Notwithstanding the otherwise applicable provisions of the Agreement relating
to Event payments, Roche shall pay to Memory, solely with respect to such Option Compound, [*]
percent ([*]%) of the otherwise applicable payments that are due for all Events pursuant to Section
4.3 (including regulatory and bonus Events) occurring after the Initiation of Phase III
(i.e., Roche shall have no obligation to pay any such Event payments applicable to the
Initiation of Phase III). Notwithstanding the otherwise applicable provisions of the Agreement
relating to royalty rates, Roche shall pay to Memory, solely with respect to a Product that
includes an Option Compound, a royalty at a rate of [*] percent ([*]%) of Net Sales, based on
worldwide Net Sales of such Product(s). If a Memory Compound reaches an Event under Section
4.3(a), 4.3(b), or 4.3(c) of the Agreement,



[*] Confidential Treatment is Requested





2






and Roche has paid Memory for any Event on an Option Compound under the same Section 4.3(a),
4.3(b), or 4.3(c), respectively, then the payment, if any, for such Memory Compound for any Event
under the same Section will be calculated (i) as a Second Product under Section 4.3(a) or (ii) as
not the first occurrence of the Event under Section 4.3(b), 4.3(c) or 4.3(d). Notwithstanding
anything to the contrary contained herein, upon exercise by Roche of its Option with respect to any
Option Compound, Roche shall be obligated to pay [*] percent ([*] %) of the otherwise applicable
payments with respect to any Events relating to such Option Compound calculated as (i) a First
Product under Section 4.3(a) or (ii) as the first occurrence of the Event under Section 4.3(b) or
Section 4.3(c).



6. Development Costs. Development Costs shall mean the costs actually incurred by a
Party or for its account that are specifically attributable to the Development of an Option
Compound or Product containing an Option Compound. Development Costs shall include amounts paid by
a Party to Third Parties involved in the development of an Option Compound or Product containing an
Option Compound, and all internal costs incurred by a Party in connection with the development of
an Option Compound or Product containing an Option Compound.



Notwithstanding anything to the contrary herein, Development Costs for manufacturing of
clinical supplies shall be as set forth in Article 9. Development Costs shall mean costs for the
development of research plans and programs, screening, lead optimization, in vitro and in vivo
testing, studies on the toxicological, pharmacokinetic, metabolic or clinical aspects of such
Option Compound or Product containing an Option Compound conducted internally or by individual
investigators, or consultants necessary for the purpose of obtaining and/or maintaining approval of
such Product containing an Option Compound by a government organization in a country, and costs for
preparing, submitting, reviewing or developing data or information for the purpose of a submission
to a governmental authority to obtain and/or maintain approval of Product containing an Option
Compound in a country as well as costs of process development and scale-up costs and recovery
(including plant costs).



Development Costs shall not include patent costs, pre-registration marketing costs (e.g.
trademark costs, advertising agency selection costs, pre-marketing studies), post-registration
clinical studies which are not enabling for registration of the Product containing an Option
Compound and post-registration marketing studies.



Development Costs consist of two main components, variable costs and fixed costs. Variable
costs are external costs invoiced from third parties. In determining fixed costs (primary and
secondary fixed costs), the Parties have agreed on an FTE-rate that will be charged for the
resources allocated to the programs from the functions directly operating the programs on a
fractional FTE-basis. The Parties contemplate that this rate captures total actual personnel and
fixed costs attributable to the performance of the development work under this Agreement.



All FTE expenditures shall be included in Development Costs based on a rate of $[*] per FTE. For
each calendar year after 2006, the FTE rate will be increased by [*]% compared to previous calendar
year. Time-recording will be used by all people within these functions to record actual time spent
on the development activities for the purpose of obtaining regulatory approval of Product
containing an Option Compound. For clarity, FTE time recording should be made on a fractional
basis. Each Party will also use its applicable project cost system with the purpose of tracking and
reporting costs on a project/product indication/work package level.



[*] Confidential Treatment is Requested





3






7. Memory Co-Promotion Rights. If Roche exercises the Option with respect to an
Option Compound, then Memory shall have the right to co-promote in the United States any Products
that include such Option Compound in accordance with the provisions of Sections 8 and 9 and Exhibit
A. The provisions of Sections 8 and 9 shall thereupon supercede and replace the provisions of
Section 2.3 of the Agreement with respect to such Option Compound. Such co-promotion efforts shall
be shared equally between Memory and Roche, as more fully described in Exhibit A hereto.



8. Exercise of Memory Co-Promotion Rights. Memory can exercise its co-promotion right
with respect to an Option Compound by (a) giving written notice to Roche within sixty (60) days
after Roche’s exercise of its Option, and (b) agreeing to pay [*] percent ([*]%) of Roche’s Phase
III actual global Development Costs for such Product (“Memory Development Costs”). Promptly after
Roche exercises the Option with respect to an Option Compound, Roche shall provide Memory with its
complete and correct copy of its then current internal budget, to the extent it exists, for the
estimated global Phase III Development Costs for such Option Compound, together with any other
material information then available to Roche relating to the estimated amount thereof, to assist
Memory in determining whether to exercise its co-promotion right. Memory acknowledges that the
budget and such other material information may be preliminary estimates and are subject to change.
Roche may credit the Memory Development Costs against any amount owed to Memory under the Agreement
or this Second Amendment. At the end of each quarter, Roche shall send Memory an invoice of the
Memory Development Costs and any applicable credit. Memory shall have thirty (30) days after
receipt of each quarterly invoice, to make payment of the amount owed (if any) to Roche. Memory
shall have the right to have an independent third party accounting firm, selected by Memory and
reasonably acceptable to Roche, audit Roche’s books and records once each calendar year, at
Memory’s expense, to determine Roche’s actual global Development Costs.



9. Co-Promotion Agreement. If Memory elects to co-promote any such Product in the
United States, then Memory and Roche shall negotiate in good faith to enter into a co-promotion
agreement, in accordance with the provisions of Exhibit A hereto and such other terms that are
reasonable and customary for such co-promotion arrangements in the pharmaceutical industry (the
“Co-Promotion Agreement”). If Memory and Roche do enter into the Co-Promotion Agreement, then
Roche shall be relieved of its obligation to pay royalties to Memory on Net Sales in the United
States for such Product(s) that Memory elects to co-promote during the period that Memory
co-promotes such Product. If, after the exercise by Roche of the Option with respect to an Option
Compound, Memory does not exercise its co-promotion right as provided herein or Memory and Roche do
not enter into the Co-Promotion Agreement with respect to such Option Compound, then Memory shall
be deemed not to have exercised its co-promotion right and Roche shall have the sole right to
commercialize such Option Compound (and related Products) upon the terms set forth in the Agreement
(as modified by this Second Amendment).



10. Memory Supply of Material. If Roche exercises its Option, then Roche or its
Affiliates shall have the right to manufacture their own clinical and/or commercial requirements of
Option Compound or Product containing an Option Compound or to have a Third Party



[*] Confidential Treatment is Requested





4






manufacture the clinical and/or commercial requirements. At Roche’s request, Memory shall use its
best efforts to supply Roche’s clinical requirements of the Option Compound or Product containing
such Option Compound, for Phase III clinical trials, at: (i) [*] percent ([*]%) of Memory’s Fully
Burdened Manufacturing Costs (“FBMC”), or (ii) upon the same terms available to Memory if
manufactured by a Third Party. Roche shall have the right to review any agreement between Memory
and a third party manufacturer. Roche shall also have the right to have an independent third party
accounting firm, selected by Roche and reasonably acceptable to Memory, audit Memory’s books and
records, at Roche’s expense to determine the FBMC. The Option Compound and Product(s) containing
an Option Compound shall be manufactured and supplied in accordance with all laws and regulations,
both local and national, including the principles of good manufacturing practices (“GMP”) related
to the manufacture of pharmaceutical active ingredients and their precursors set forth in the
relevant guidelines and regulations such as the GMP rules of the United States Code of Federal
Regulations (Title 21, Parts 210-211). Promptly after Roche’s exercise of its Option, Memory shall
use its best efforts to transfer the manufacturing transfer package to Roche to enable Roche, its
Affiliates or a Third Party to commence manufacture of an Option Compound or Product containing an
Option Compound in a timely manner. Following exercise by Roche of its Option and if desired by
Roche, the Parties shall negotiate in good faith the terms of a separate supply agreement pursuant
to which Memory may manufacture and supply to Roche its commercial requirements of Option Compound
or Product containing an Option Compound. For purposes of this section, FBMC shall mean the
following direct costs of manufacturing an Option Compound or Product containing an Option
Compound, determined in accordance with generally accepted accounting principles:




	 	(a)	 	Direct costs for (i) direct labor (including fringe benefits), (ii) direct
materials, (iii) direct product testing costs, (iv) third-party contract costs
required to manufacture, and (v) royalties payable by Memory to third parties in
relation with the manufacturing, formulation, use or sale of the Option Compound or
Product containing an Option Compound.






	 	(b)	 	Yield losses and Failures which go beyond what could be reasonably expected
and/or justified in this area of technology shall remain the sole costs of Memory and
will not be counted as part of the FBMC.






	 	(c)	 	FBMC shall not include any costs associated with i) process development, assay
development, scale-up, qualification lots and regulatory costs related to the
manufacturing of the Option Compound or Product containing an Option Compound which
shall be considered as part of Development Costs, ii) expired products which shall be
the sole cost of Memory.






	 	(d)	 	Failures shall mean Option Compound or Product containing an Option Compound
that does not meet the specifications, or was not manufactured or tested in accordance
with the procedures, or was not manufactured in accordance with GMPs.





[*] Confidential Treatment is Requested





5







	 	(e)	 	All overhead allocations to Option Compound or Product containing an Option
Compound should be calculated on same basis as all other products manufactured in the
same production facilities. The “cost” for purchased materials or services means the
actual amount paid therefore including the benefit of any price reductions, payment or
terms discounts, or other reimbursements, such as volume discounts, that may be
applicable to such purchases by any arrangement with the supplier.





11. Press Releases. Neither Party shall originate any publicity, news release or
other public announcement, written or oral, relating to this Second Amendment, including its terms,
or relating to another Party’s business or operations without the prior approval of the other
Party, unless a Party reasonably believes it is required to by law. Each Party shall to the extent
consistent with applicable laws and regulations limit the disclosure of the financial terms set
forth in this Second Amendment (such as by requesting confidential treatment of such terms in
documents required to be filed with the US Securities and Exchange Commission). Communications
made prior to Roche’s exercise of its Option that relate solely to MEM 1414 or MEM 1917 and do not
comment on any aspect of this Second Amendment or Roche’s business or operations need no prior
approval from Roche. Memory shall keep Roche informed of all external communications that do not
require prior approval and that are released within eighteen (18) months of the effective date of
this Second Amendment.



12. Entire Agreement. This Second Amendment, along with the Agreement and First
Amendment previously executed by the Parties, shall constitute the entire agreement between the
Parties with respect to the subject matter of the Agreement. All other terms of the Agreement
shall remain in full force and effect. To the extent that there are any inconsistencies between
the terms of the Agreement and the terms of this Second Amendment, the terms of this Second
Amendment shall prevail in effect.



REST OF PAGE INTENTIONALLY LEFT BLANK




[*] Confidential Treatment is Requested





6






IN WITNESS WHEREOF, the Parties have executed this Amendment to be effective as of the day and year
first above written.



	 	 	 
	MEMORY PHARMACEUTICALS	 	HOFFMANN-LA ROCHE INC.
	CORP.	 	 
	By: /s/ James Sulat

	 	By: /s/ Dennis Burns
	 

	 	 
	Name: James Sulat

Title: President and Chief Executive Officer

	 	Dennis Burns

Vice President

Global Head of Business Development







	 	F.	 	HOFFMANN-LA ROCHE LTD






By: /s/ Nigel Sheail




Name: Nigel Sheail




Title: Global Head of Licensing




By:/s/ Robin Breckenridge

Name: Robin Breckenridge

Title: Vice President Global Head of 

Operations and Information



[*] Confidential Treatment is Requested





7






EXHIBIT A




Heads of Agreement for Co-Promotion of Products




1. Memory Election to Co-Promote. Memory shall have the right to elect to co-promote
in the US each Product containing an Option Compound, on a Product-by-Product basis, during the
Co-Promotion Term beginning on the date of the first commercial sale of such Product in the
Co-Promotion Territory, pursuant to the terms of the Co-Promotion Agreement. Within sixty (60)
days after Roche’s exercise of its Option with respect to each such Product, Memory shall have the
right to exercise its co-promotion right with respect to each such Product by giving written notice
thereof to Roche.



2. Co-Promotion Territory. United States of America and its possessions and
territories, including Puerto Rico.



3. Term and Termination. The co-promotion term for each Product shall be for a period
of ten (10) years from the first commercialization of such Product in the US. Memory shall have
the right to terminate the co-promotion agreement with respect to any Product, if Net Sales thereof
in the US do not financially justify such a co-promotion.



4. Assignability. Memory may assign its co-promotion rights but only with Roche’s
prior written consent, which consent shall not be unreasonably withheld or delayed by Roche (and in
any event must be given or denied by Roche within thirty (30) days).



5. Additional Indications. The co-promotion by the Parties with respect to any
Product that has received a Regulatory Approval for a Neurological Indication or a Psychiatric
Indication and has been the subject of a Launch in the US shall extend to any additional
Neurological Indication or Psychiatric Indication which Roche determines to obtain the applicable
Regulatory Approvals to market and sell the Product in the US for such additional Neurological
Indication or Psychiatric Indication. In such case, Memory shall be responsible for [*] percent
([*]%) of the cost of obtaining such Regulatory Approvals in the US, including the cost of
conducting clinical trials, which shall be paid by Memory to Roche promptly after Roche obtains all
Regulatory Approvals for such Product in the US to enable Roche and Memory to market and sell such
Product in the US for such additional Neurological Indication or Psychiatric Indication.



If Roche has received Regulatory Approval in the US to market and sell a Product for an Other
Indication that is the subject of co-promotion by Memory, then the Parties shall negotiate in good
faith and agree upon an equitable adjustment to the compensation and cost-sharing provisions set
forth in the Co-Promotion Agreement, to account for the fact that Memory shall not have any right
or obligation to co-promote such Product for the Other Indication.



6. Financials. If Memory exercises its right to co-promote a Product in the
Co-Promotion Territory, then Memory or its assignee will be responsible for (i) carrying out [*]
percent ([*]%) of the Product detailing in the US and (ii) [*] percent ([*]%) of the direct and
indirect marketing and commercialization costs of such Product in the US; and Memory shall be



Exhibit A – Page




[*] Confidential Treatment is Requested



8



entitled to receive from Roche [*] percent ([*]%) of the gross profits from the Net Sales of such
Product in the US. Gross profits, for purposes of this Section 6, shall be defined as Net Sales
less commercialization costs less FBMC. For avoidance of doubt, the marketing costs referred to in
6(ii) hereto do not include any direct cost of Roche field force; by way of example, but not
limitation, marketing costs include direct to consumer advertising, professional journal
advertising and professional symposia. In addition, if Memory exercises its right to co-promote a
Product, Roche shall be relieved of its obligation to pay royalties to Memory with respect to the
Net Sales of such Product in the US during the period that Memory is co-promoting the Product.
Furthermore, in order to exercise its right to co-promote a Product, Memory must make payment to
Roche in the amount of [*] percent ([*]%) of Roche’s Phase III actual global Development Costs for
such Product. Such payment of Development Costs shall be made on a quarterly basis.



7. Governance. Within ninety (90) days after Memory’s notice to Roche that it wishes
to co-promote a Product, the Parties shall form a Joint Promotional Team (“JPT”), which will
oversee the co-promotional activities of the Parties with respect to such Product. Consistent with
prudent business practices, the JPT will discuss co-promotional activities relating to such Product
and establish mechanisms for achieving an effective co-promotion collaboration. The JPT shall be
comprised of three Roche representatives and one Memory representative, and a Roche representative
will be Chair of the JPT. Each Party shall have one collective vote, and decisions shall be made
by consensus. For avoidance of doubt, the final decision in all co-promotion matters will reside
with Roche.



8. Memory’s Obligations. Memory or its assignee must provide at least [*] percent
([*]%) of the total promotional effort in a given calendar year in the US, as established by number
and type of details in accordance with a co-promotion plan. Memory or its assignee must
demonstrate an effort to develop the commercial capability to fulfill its co-promotion obligations.
Memory or its assignee may subcontract its field sales force to fulfill its co-promotion
obligations but only with Roche’s prior written consent.



9. Roche’s Obligations and Authority. Roche shall be ultimately responsible for
establishing and modifying the terms and conditions with respect to the sale of the Product,
including, without limitation, pricing for the Product. Roche shall provide Memory, without
charge, with copies of relevant training materials regarding the detailing and promotion of the
Product. Memory shall then supply such copies of such training materials to its sales force.
Roche may elect, at its discretion, to make available sales and training personnel to assist Memory
in training Memory’s sales force to detail and promote the Product. For avoidance of doubt, each
Party has final responsibility for the adequate training of its own sales force.



10. Non-Solicitation. Neither Party shall recruit sales personnel from the other
Party.



11. Reporting Provisions. The Parties will negotiate in good faith and agree to
appropriate reporting provisions to be included in the Co-Promotion Agreement. Each Party shall
have an obligation to report adverse events to the other Party in a timely fashion.



12. Indemnification. Each Party shall indemnify the other Party for all claims
related to the marketing or promotion of the Product to the extent that such Party is negligent or
fails to promote the Product in accordance with applicable federal and state laws.



Exhibit A – Page 2




[*] Confidential Treatment is Requested





9






13. Breach. In the event of a material breach by either party of its obligations
under the Co-Promotion Agreement (which is not cured within the applicable grace and/or cure period
set forth therein), the other party shall have the right, in addition to all other rights and
remedies it may have, to terminate the Co-Promotion Agreement.



14. Full Agreement. Consistent with the terms of this Heads of Agreement, the
Co-Promotion Agreement shall contain ordinary and customary terms for an agreement in which a
pharmaceutical product of like nature is jointly co-promoted and detailed in the US, such as
insurance, additional warranties and the like.



Exhibit A – Page 3




[*] Confidential Treatment is Requested




10