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                   [MEMORY PHARMACEUTICALS CORP. LETTERHEAD]


March 3, 2005


Joseph Donabauer

Dear Mr. Donabauer:

         We are pleased to provide you with the terms and conditions of your
recent promotion to the position of Vice President & Controller. We look forward
to you continuing to be a part of our team, and are confident that you will
contribute significantly to the value of our organization. The terms of your
promotion by the Company are as follows.

         1. Position. Your position will be Vice President & Controller, based
out of the Company's offices currently located in Montvale, New Jersey, and you
will report directly to the Company's Chief Executive Officer unless otherwise
directed by the CEO. As Vice President & Controller, you will be part of the
Company's senior management team. In addition to performing duties and
responsibilities associated with the position of Vice President & Controller,
from time to time the Company may assign you other duties and responsibilities
and/or may assign you to a different location.

         As a full-time employee of the Company, you will be expected to devote
your full business time and energies to the business and affairs of the Company.
Your performance will be reviewed formally after six months of employment and
annually thereafter at the end of each calendar year.

         2. Starting Date/Nature of Relationship. Your promotion shall be
effective as of December 14, 2004. No provision of this letter shall be
construed to create an express or implied employment contract for a specific
period of time. Either you or the Company may terminate the employment
relationship at any time and for any reason, by giving at least thirty (30)
days' prior written notice to the other party.

         3. Compensation.

         (a) Effective January 1, 2005, your initial salary will be at the
bi-weekly rate of $6,923.08 (annualized at $180,000).

         (b) You will be eligible to receive annual bonus payments dependent on
the performance of the Company and your individual performance, subject to the
discretion of the Board of Directors. Effective January 1, 2005, your target
bonus will be equal to twenty-five percent (25%) of your base salary, assuming
the achievement of such Company and individual performance objectives.

         (c) Upon termination for any reason, the Company will pay you within
two weeks of such termination, your current base salary earned through the
termination date, plus accrued vacation, if any,
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MEMORY PHARMACEUTICALS CORP.


and other benefits or payments, if any, to which you are entitled. In the event
that you are terminated by the Company without "Cause" (as hereinafter defined),
then the Company will continue to pay you your bi-weekly rate in effect at the
time of termination and provide and pay the Company's portion of your medical
insurance for a period of six (6) months. Further, for the period commencing
seven months following such termination and ending twelve months after such
termination, the Company will continue to pay you your bi-weekly rate in effect
at the time of termination and provide and pay the Company's portion of your
medical insurance, except that such severance payments made to you during this
period will be reduced by all 1099 and W-2 income earned or received by you
during such period, including income earned or received from consulting services
or temporary employment, and the Company's payments for your medical insurance
will terminate when you have such coverage through any new employer before the
end of the twelve month period following your termination. The Company will
reconcile such payments with you quarterly, and any additional payments owed to
you by the Company, and any payments owed to the Company by you, will be paid
respectively within two weeks following such reconciliation period. The Company
will not be obligated to continue any such payments to you under this paragraph
3(d) in the event you materially breach the terms of the Confidentiality
Agreement (as defined below). Notwithstanding any termination of your employment
(with or without Cause), you shall continue to be bound by the provisions of the
Confidentiality Agreement.

         (d) For the purposes of this Section 3, "Cause" shall include (i) your
conviction of a felony, either in connection with the performance of your
obligations to the Company or otherwise, which adversely affects your ability to
perform such obligations or materially adversely affects the business
activities, reputation, goodwill or image of the Company, (ii) your willful
disloyalty, deliberate dishonesty, breach of fiduciary duty, (iii) your breach
of the terms of this Agreement, or your failure or refusal to carry out any
material tasks assigned to you by the Company in accordance with the terms
hereof, which breach or failure continues for a period of more than thirty (30)
days after your receipt of written notice thereof from the Company, (iv) the
commission by you of any act of fraud, embezzlement or deliberate disregard of a
rule or policy of the Company known to you or contained in a policy and
procedure manual provided to you which results in material loss, damage or
injury to the Company, or (v) the material breach by you of any of the
provisions of the Confidentiality Agreement.

         4. Benefits. You will be entitled as an employee of the Company to
receive such benefits as are generally provided its employees and executives and
for which you are eligible in accordance with Company policy as in effect from
time to time. The Company retains the right to change, add or cease any
particular benefit relating to its employees and executives generally. At this
time, the Company is offering a benefit program, consisting of medical, dental,
life and short/long term disability insurance, as well as a 401(k) retirement
plan and flexible spending plan. You will be eligible for eleven paid holidays,
four floating holidays and four (4) weeks paid vacation per year. You will
accrue additional vacation days in accordance with Company policy

         5. Confidentiality. The Company considers the protection of its
confidential information and proprietary materials to be very important.
Therefore, the Confidentiality and Non-Competition Agreement you entered into
with the Company, dated as of June 17, 2002 (the "Confidentiality Agreement"),
shall remain in full force and effect. You agree that nothing contained in this
amendment or in this letter shall be deemed to alter your status as an "at-will"
employee.

         6. General.

         (a) This letter, when executed, together with the Confidentiality
Agreement will constitute our entire agreement as to your employment by the
Company and will supersede any prior agreements or understandings, whether in
writing or oral.

         (b) This letter shall be governed by the law of the State of New
Jersey.


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MEMORY PHARMACEUTICALS CORP.


         Please sign the enclosed additional copy of this letter, which
execution will evidence your agreement with the terms set forth herein and
therein, and return it to the Company.



MEMORY PHARMACEUTICALS CORP.


By: /s/ Tony Scullion
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    Name:  Tony Scullion
    Title: Chief Executive Officer



ACCEPTED AND AGREED:


/s/ Joseph M. Donabauer
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Joseph M. Donabauer


Date: March 3, 2005


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