<PAGE>
                                                                   EXHIBIT 10.10

                          STRATEGIC ALLIANCE AGREEMENT

      This AGREEMENT, having a date of August 19, 2003, is made by and among, on
the one hand, F.HOFFMANN-LA ROCHE LTD, a Swiss corporation having its principal
place of business at Grenzacherstrasse 124, CH-4070, Basel, Switzerland and
HOFFMANN-LA ROCHE INC., a New Jersey corporation, having its principal place of
business at 340 Kingsland Street, Nutley, New Jersey 07110 (collectively
"Roche") and, on the other hand, MEMORY PHARMACEUTICALS CORP., a Delaware
corporation, having its principal place of business at 100 Philips Parkway,
Montvale, New Jersey 07645 ("Memory").

                                  INTRODUCTION

1.    Memory has a development program relating to the neuronal nicotinic
      alpha-7 receptor (the "Program"), and owns related intellectual property
      rights.

2.    Roche has expertise in the research, development, manufacture and
      commercialization of pharmaceutical products.

3.    Roche desires to secure rights to further develop and commercialize
      products developed and to be developed pursuant to the Program.

4.    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 agree as
      follows:

                             ARTICLE 1. DEFINITIONS

As used in this Agreement, the following terms, whether used in the singular or
plural, shall have the following meanings:

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 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 16.1.

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.


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1.4   "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.

1.5   "Composition of Matter Claim" means, for a given Product in a given
      country of the Territory, a Valid Claim of a Memory Patent Right that
      Covers the molecule per se of the compound that is included in such
      Product, in whole or as a component thereof, as an active ingredient of
      such Product.

1.6   "Cover" (including the variations such as "Covered", "Coverage" or
      "Covering") shall mean that the making, using, offering for sale, selling
      or importing 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.

1.7   "Effective Date" means the date that all conditions subsequent under
      Section 16.1 have occurred.

1.8   "End of Phase I" means the date that all Phase I clinical trials have been
      completed.

1.9   "End of Phase IIa" means the date that all Phase IIa clinical trials have
      been completed.

1.10  "Europe" means the United Kingdom, Germany, Italy, France and Spain.

1.11  "Field" means prophylaxis and treatment of diseases, in all indications,
      for either human or veterinary use.

1.12  "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.

1.13  "IND" means an Investigational New Drug Application filed with the US Food
      and Drug Administration ("FDA") for human clinical testing of a drug.

1.14  "Initiation of Phase I" means the date that a human is first dosed with a
      Product in a Phase I clinical trial.

1.15  "Initiation of Phase IIa" means the date that a patient is first dosed
      with a Product in a Phase IIa clinical trial.

1.16  "Initiation of Phase III" means the date that a patient is first dosed
      with a Product in a Phase III clinical trial.

1.17  "Invention" means an invention that is made in the conduct of the
      Strategic Alliance.

1.18  "JLT" means the committee organized and operating as provided in Article
      7.

1.19  "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.

1.20  "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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1.21  "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 in such country.

1.22  "License Exercise Period" means, with respect to any Product, except as
      otherwise provided in Section 4.6, 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 Product.

1.23  "License Rights Maintenance Fees" means, with respect to any Product, the
      payments by Roche to Memory pursuant to Section 4.4 hereof.

1.24  "Major Market Countries" means the US, Canada, Japan and Europe.

1.25  "Memory Compound" means any compound which is a nicotinic alpha-7 agonist
      with respect to which (i) Memory has commenced a Phase I human clinical
      trial within five (5) years after the Effective Date or (ii) Roche has
      designated pursuant to Section 2.2 or Section 4.6 hereof.

1.26  "Memory Know-How" means all Know-How that Memory owns, or otherwise has
      the right to grant the licenses herein, during the Agreement Term.

1.27  "Memory Patent Rights" means all Patent Rights that Memory owns, or
      otherwise has the right to grant the licenses herein, during the Agreement
      Term.

1.28  "NDA" means a New Drug Application filed with the FDA, or its foreign
      equivalent, for a drug.

1.29  "NDA Filing" means for a given Product, the date that an NDA is filed for
      the Product.

1.30  "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 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).


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      "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."

1.31  "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.

1.32  "Other Indication" means any indication other than a Neurological
      Indication or a Psychiatric Indication.

1.33  "Party" means Roche and/or Memory.

1.34  "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.

1.35  "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.

1.36  "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.

1.37  "Phase IIa" means one or more Phase II trials (at least one of which
      trials was conducted in a Major Market Country) collectively designed to
      demonstrate (a) in the case of a Neurological Indication, safety and
      tolerability in the target population, and (b) in the case of a
      Psychiatric Indication, clinical proof of concept.

1.38  "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.

1.39  "Product" means any and all products that include, in whole or as a
      component thereof, a Memory Compound.

1.40  "Psychiatric Indication" means schizophrenia (including management of the
      manifestations of symptoms of schizophrenia), depression, bipolar
      disorders, anxiety and ADHD.

1.41  "Regulatory Approval" means any approvals (including pricing and
      reimbursement approvals), licenses, registrations or authorizations of any
      national or international or local regulatory agency,


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      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.

1.42  "Roche Patent Rights" means all Patent Rights that Roche owns, or
      otherwise has the right to grant the licenses herein, during the Agreement
      Term.

1.43  "ROW Territory" means all countries and territories other than the US.

1.44  "Strategic Alliance" means discovery and development by Memory of
      pharmaceuticals acting against nicotinic alpha-7 receptor and development
      and commercialization of such pharmaceuticals by Roche and Memory, as
      contemplated by this Agreement.

1.45  "Territory" means all countries and territories in the world.

1.46  "Third Party" means a person or entity other than (i) Memory or any of its
      Affiliates, or (ii) Roche or any of its Affiliates.

1.47  "US" means the United States of America and its possessions and
      territories, including Puerto Rico.

1.48  "Valid Claim" means a claim in any (i) unexpired and issued Memory 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
      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, during the
      License Exercise Period, Roche shall have the right with respect to each
      Product to obtain a sole and exclusive license, including the right to
      grant sublicenses pursuant to Section 2.3, under the Memory Patent Rights
      and to use the Memory Know-How, to make, use, offer for sale, sell and
      import such Product in the Territory for use in the Field (each, a
      "License"). The right of Roche to obtain a License 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 a Neurological Indication or a Psychiatric
      Indication. If Roche exercises such right as provided 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 and import 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 not related to the making, using, offering for
      sale, selling or importing Products in the Territory for use in the Field.

2.2   Designation of Additional Compounds. In the event that, as of the date
      that is [*] years after the Effective Date, there are fewer than [*]
      Memory Compounds for either a Neurological Indication or a Psychiatric
      Indication with respect to which Memory has commenced the Initiation of
      Phase I, then Roche shall have the right to designate as Memory Compounds
      additional compounds


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      which are nicotinic alpha-7 agonists in preclinical development by Memory,
      up to the number of compounds fewer than [*] as to which Memory has then
      not commenced the Initiation of Phase I. For example, if Memory has
      commenced the Initiation of Phase I with respect to one (1) Product for a
      Neurological Indication and one (1) Product for a Psychiatric Indication
      at the end of such [*] year period, then Roche shall have the right to
      designate as Memory Compounds up to [*] additional compounds which are
      nicotinic alpha-7 agonists in preclinical development by Memory. If Roche
      desires to exercise such right, Roche shall give written notice thereof to
      Memory and Memory shall provide to Roche, for evaluation purposes only,
      all test results, data (e.g., in vivo data, safety data and
      structure-activity relationship data) and applicable Memory Patent Rights
      relating to up to [*] compounds which are nicotinic alpha-7 agonists in
      preclinical development by Memory as may be selected by Roche. Within the
      sixty (60) day period following receipt by Roche of such items, Roche may
      designate such additional compounds, up to the number of compounds it is
      permitted to designate pursuant to this Section 2.2.

      After Roche has designated one or more such compounds as Memory Compounds,
      Memory may elect either to (i) continue development of such Memory
      Compound through the End of Phase IIa and be entitled to receive all
      License Rights Maintenance Fees with respect thereto, as and when provided
      in Section 4.4 hereof, or (ii) have Roche assume all preclinical and
      clinical development of such Memory Compound(s) and pay all costs related
      thereto, in which case the License Rights Maintenance Fees otherwise
      payable by Roche with respect to such Memory Compound(s) shall be reduced
      by [*] percent ([*]), the events for payments by Roche specified in
      Section 4.4 shall not include the delivery of any data or reports and
      Roche shall have a License to such Memory Compound(s) as provided in
      Section 2.1 effective as of the date Roche assumes the preclinical and
      clinical development of such Memory Compound.

2.3   Restrictions on Third Party Rights. Memory shall not grant any license or
      rights to a Third Party with respect to any compound that is a nicotinic
      alpha-7 agonist 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 to such
      compound.

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 or import
      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.

      Notwithstanding the above, 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 Product (i) in a Major Market Country, except upon the
      prior written approval of Memory, which approval Memory shall not
      unreasonably withhold and (ii) in the US, except upon the prior written
      approval of Memory so long as Memory has a co-promotion right for such
      Product, which approval may be granted or withheld by Memory in its sole
      discretion.

      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


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      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 each
      Product in the US, on a Product-by-Product basis, in accordance with the
      provisions of Exhibit A hereto. Within forty-five (45) days after the end
      of Phase II with respect to each 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 each 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 a 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 Product, the Parties shall negotiate in good faith and
      enter into a Co-Promotion Agreement consistent with terms set forth in
      Exhibit A 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 and/or 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 and/or Product in accordance with Section
      16.5.

                              ARTICLE 3. DILIGENCE

3.1   Diligence. Memory shall use reasonable diligence in proceeding with the
      development of Products through the End of Phase IIa, except for (i)
      compounds designated by Roche as Memory Compounds with respect to which
      Roche has assumed all preclinical and clinical development pursuant to
      Section 2.2hereof and (ii) Products with respect to which Roche has
      exercised its rights pursuant to Section 4.6 hereof. Roche shall use
      reasonable diligence in proceeding with the development of each Product,
      including obtaining required Regulatory Approvals, manufacturing,
      marketing and sale of such Product in the Major Market Countries, from and
      after the date Roche obtains the License related thereto.

      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 a
      Neurological Indication or a Psychiatric Indication as the compounds for
      which Roche has obtained a License, 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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      During the [*] year period after the Effective Date, Memory agrees to
      devote at least [*] FTEs to the Strategic Alliance. During the [*] year
      period after the Effective Date, Memory shall use reasonable diligence to
      characterize and advance development of nicotinic alpha-7 agonist
      compounds for Alzheimer's disease and schizophrenia, but such diligence
      shall be not less than Memory's diligence to develop nicotinic alpha-7
      agonist compounds for other specific disease states.

      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 Memory 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   [*]

      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.

                          ARTICLE 4. PAYMENT TO MEMORY

4.1   Technology Access Fee. Roche shall pay Memory a technology access fee of
      ten million dollars ($10,000,000), which shall be non-refundable and
      non-creditable, and due and payable on or before the later of twenty (20)
      days after the Effective Date or five (5) days after the closing of the
      purchase by Roche of Memory's Series Roche Preferred Stock as provided in
      Section 4.2 hereof.

4.2   Purchase of Series Roche Preferred Stock. Contemporaneous with the
      execution of this Agreement, Roche shall execute a Securities Purchase
      Agreement to purchase from Memory shares of Memory's Series Roche
      Preferred Stock in the aggregate amount of ten million dollars
      ($10,000,000), based on a purchase price of $3.60 per share, upon the
      terms and conditions set forth in the Securities Purchase Agreement
      attached as Exhibit B hereto.

4.3   Research and Development Support. Roche shall pay to Memory a total of six
      million dollars (US $6,000,000) for research and development support,
      which amount shall be non-refundable and non-creditable, and which will be
      due and payable in eight (8) equal quarterly installments of seven hundred
      fifty thousand dollars (US $750,000) per installment, each installment due
      and


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<PAGE>
      payable within thirty (30) days after (i) the first day of each calendar
      quarter after the Effective Date and (ii) receipt by Roche of an invoice
      for such sums.


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4.4   Payments to Maintain Roche License Rights.

      (a)   Neurological Indications. 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 such Product, the
            following non-refundable and non-creditable payments upon the first
            occurrence of the following events for such Product if such Product
            contains a different Memory Compound then any Memory Compound
            contained in the Product for which any payment has been made under
            Section 4.4(b):

<TABLE>
<CAPTION>
                          EVENT                                   PAYMENT (MIO US$)
                          -----                                   -----------------
<S>                                                               <C>
[*] (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]

[*] (or foreign equivalent) for a Neurological Indication              [*]***
and delivery of the data and reports specified in
Schedule 1
</TABLE>

--------
*     Based upon this event occurring on or before [*]. If this event occurs
      after such date, the payment shall be reduced to [*] dollars ($[*]).

**    Based upon this event occurring on or before [*]. If this event occurs
      after such date, the payment shall be reduced to [*] dollars ($[*]).

***   If any Product is for a Neurological Indication other than Alzheimer's
      disease, then the payment shall be reduced to [*] dollars ($[*]).


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      (b)   Psychiatric Indications. 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 such Product, the
            following non-refundable and non-creditable payments upon the first
            occurrence of the following events for such Product if such Product
            contains a different Memory Compound than any Memory Compound
            contained in a Product for which any payment has been made under
            Section 4.4(a):

<TABLE>
<CAPTION>
                          EVENT                                   PAYMENT (MIO US$)
                          -----                                   -----------------
<S>                                                               <C>
[*] (or foreign equivalent) for 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

[*] (or foreign equivalent) for a Psychiatric Indication              [*]***
and delivery of the data and reports specified in
Schedule 1
</TABLE>

            Each payment in Section 4.4 (a) and 4.4 (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 for each
            Product, for the first occurrence of a respective event, regardless
            of how many times the event may be subsequently achieved with such
            Product.

            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.

      (c)   Reduction of Milestone Payments. Notwithstanding anything to the
            contrary contained in this Section 4.4, if within [*] of Memory's
            receipt of a payment pursuant to Section (a) or (b) with respect to
            the [*] for a Product for a Neurological Indication or a Psychiatric
            Indication, Memory otherwise would be entitled to receive a payment
            upon the occurrence of the same or any other event set forth in
            Section (a) or (b) for another Product for a Neurological Indication
            or a Psychiatric Indication, respectively, the amount of such
            payment shall be reduced by [*] percent ([*]%).

      (d)   Limitation on Payment Reductions. Notwithstanding anything to the
            contrary contained in this Section 4.4, in no event shall the
            payment by Roche to Memory with respect to the occurrence of the [*]
            be less than [*] dollars ($[*]) for a Product for a Neurological
            Indication or [*] dollars ($[*]) for a Product for a Psychiatric
            Indication.

4.5   Development Event Based Payments.

----------
*     Based upon this event occurring on or before [*]. If this event occurs
      after such date, the payment shall be reduced to [*] dollars ($[*]).

**    Based upon this event occurring on or before [*]. If this event occurs
      after such date, the payment shall be reduced to [*] dollars ($[*]).

***   If any Product is for a Psychiatric Indication other than schizophrenia,
      then the payment shall be reduced to [*] dollars ($[*]).


                     [*] CONFIDENTIAL TREATMENT IS REQUESTED
<PAGE>
      (a)   Neurological Indications. Roche shall pay to Memory with respect to
            such Product the following non-refundable and non-creditable
            payments upon the first occurrence of the following events for such
            Product if such Product contains a different Memory Compound than
            any Memory Compound contained in a Product for which any payment has
            been made under Section 4.4(b) or 4.4(c):

<TABLE>
<CAPTION>
                 EVENT                                             PAYMENT (MIO US$)
                 -----                                             -----------------
<S>                                                                <C>
[*] (or a foreign equivalent) for a Neurological                         [*]
Indication

[*] for a Neurological Indication                                        [*]

[*] for a Neurological Indication                                        [*]
</TABLE>

      (b)   Psychiatric Indications. Roche shall pay to Memory with respect to
            such Product the following non-refundable and non-creditable
            payments upon the first occurrence of the following events for such
            Product if such Product contains a different Memory Compound than
            any Memory Compound contained in a Product for which any payment has
            been made under Section 4.4(a) or 4.4(c):

<TABLE>
<CAPTION>
                      EVENT                                       PAYMENT (MIO US$)
                      -----                                       -----------------
<S>                                                               <C>
[*] (or foreign equivalent) for a Psychiatric Indication                 [*]

[*] for a Psychiatric Indication                                         [*]

[*] for a Psychiatric Indication                                         [*]
</TABLE>

      (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 Product if such Product contains a
            different Memory Compound than any Memory Compound contained in a
            Product for which any payment has been made under Sections 4.4(a) or
            4.4(b):

<TABLE>
<CAPTION>
                           EVENT                                   PAYMENT (MIO US$)
                           -----                                   -----------------
<S>                                                                <C>
[*] (or foreign equivalent) for an Other Indication                      [*]

[*] for an Other Indication                                              [*]

[*] for an Other Indication                                              [*]
</TABLE>

            Each payment in Section 4.5(a) and 4.5(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 for each
            Product, for the first occurrence of a respective event, regardless
            of how many times the event may be subsequently achieved with such
            Product.

            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.


                     [*] CONFIDENTIAL TREATMENT IS REQUESTED
<PAGE>
4.6   Early Exercise of Rights. If, at any time after the Initiation of Phase I
      with respect to a Product for a Neurological Indication or a Psychiatric
      Indication and prior to the earlier of the [*] related thereto and the
      date that is five (5) years after the Effective Date, Roche desires to
      obtain the license rights as described in Section 2.1 hereof with respect
      to a compound for a Neurological Indication or Psychiatric Indication, (i)
      Roche shall give written notice thereof to Memory and (ii) Memory shall
      provide to Roche, during any calendar year, for evaluation purposes only,
      all test results, data (e.g., in vivo data, safety data and
      structure-activity relationship data) and applicable Memory Patent Rights
      relating to up to [*] compounds which are nicotinic alpha-7 agonists in
      preclinical development by Memory as may be selected by Roche. Within the
      sixty (60) day period following receipt by Roche of such items with
      respect to each compound, Roche may designate such compound to obtain a
      License to such compound. Roche shall then pay to Memory a one-time
      payment of [*] percent ([*]%) all unpaid License Rights Maintenance Fees
      with respect to such Product; and thereupon Roche shall obtain a License
      with respect to such Product. Thereafter, Roche shall pay to Memory the
      remaining [*] percent ([*]%) of the License Rights Maintenance Fees with
      respect to such Product as and when provided in Section 4.4, except the
      events for payments by Roche specified in Section 4.4 shall not include
      the delivery of any data or reports. From and after the date of such
      notice, Roche shall be responsible for and pay all costs and expenses
      relating to the continued development of such Product, including obtaining
      all Regulatory Approvals with respect thereto.

      In the event that, within [*] years after the Effective Date, Memory has
      not [*] with respect to any Product, Roche shall thereafter have the right
      pursuant to this Section 4.6 to have Memory provide to Roche, during any
      calendar year, for evaluation purposes only, all test results, data (e.g.,
      in vivo data, safety data and structure-activity relationship data) and
      applicable Memory Patent Rights relating to an unlimited number of
      compounds which are nicotinic alpha-7 agonists in preclinical development
      by Memory as may be selected by Roche. Within the sixty (60) day period
      following receipt by Roche of such items with respect to each compound,
      Roche may designate such compound to obtain a License to such compound.
      Roche shall then pay to Memory the License Rights Maintenance Fees with
      respect to such Product as and when provided in Section 4.4, except the
      events for payments by Roche specified in Section 4.4 shall not include
      the delivery of any data or reports. From and after the date of such
      notice, Roche shall be responsible for and pay all costs and expenses
      relating to the continued development of such Product, including obtaining
      all Regulatory Approvals with respect thereto.

                              ARTICLE 5. ROYALTIES

5.1   Royalties. Roche shall pay to Memory the following payments for a given
      Product having a Regulatory Approval for a Neurological Indication, based
      upon the Net Sales of such Product, which such Net Sales shall be subject
      to adjustment as provided in this Article 5. Such royalty payments shall
      be calculated by multiplying the following percentages by the following
      annual Net Sales of such Product (all Net Sales amounts in $ US million):

<TABLE>
<CAPTION>
ANNUAL NET SALES                     PERCENT (%) OF NET SALES
----------------                     ------------------------
<S>                                  <C>
      [*]                                       [*]
      [*]                                       [*]
      [*]                                       [*]
      [*]                                       [*]
</TABLE>


                     [*] CONFIDENTIAL TREATMENT IS REQUESTED
<PAGE>
      By way of illustration, assume in calendar year 2012 that (i) Net Sales of
      the Product total $[*] and (ii) no adjustments or deductions to payments
      under this Article 5 apply. The royalties due and payable by Roche to
      Memory for such Net Sales would be $[*], calculated as follows:

<TABLE>
<CAPTION>
                             APPLICABLE SALES-BASED        AMOUNT PAYABLE (IN
NET SALES (IN MILLIONS)        PAYMENT PERCENTAGE              MILLIONS)
-----------------------        ------------------              ---------
<S>                          <C>                           <C>
         US$[*]                       [*]%                       US$[*]
         US$[*]                       [*]%                       US$[*]
         US$[*]                       [*]%                       US$[*]
         US$[*]                       [*]%                       US$[*]
         US$[*]                                                  US$[*]
</TABLE>

5.2   Roche shall pay to Memory the following payments for a given Product
      having a Regulatory Approval for a Psychiatric Indication, based upon the
      Net Sales of such Product, which such Net Sales shall be subject to
      adjustment as provided in this Article 5. Such royalty payments shall be
      calculated by multiplying the following percentages by the following
      annual worldwide Net Sales of such Product (all Net Sales amounts in $ US
      million):

<TABLE>
<CAPTION>
 ANNUAL NET SALES                   PERCENT (%) OF NET SALES
 ----------------                   ------------------------
<S>                                 <C>
       [*]                                     [*]
       [*]                                     [*]
       [*]                                     [*]
       [*]                                     [*]
</TABLE>

5.3   Roche shall pay to Memory royalties for given Product having a Regulatory
      Approval for an Other Indication, in an amount equal to [*] of the
      royalties payable for a 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. Notwithstanding anything to
      the contrary contained in Section 5.1 hereof, in the event that a 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 the 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 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 another indication, the royalties payable by Roche shall be based upon
      Net Sales of such Product in the Territory as if all of such Net Sales
      occurred for the Psychiatric Indication; and (iii) multiple Other
      Indications, then the royalties payable by Roche to


                     [*] CONFIDENTIAL TREATMENT IS REQUESTED
<PAGE>
      Memory shall be equal to [*] of the royalties payable under the royalty
      schedule for a 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 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 only [*] 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 only [*] 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 [*] or [*] 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 by greater
      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 entitled to any
      deduction from payments due and payable to Memory under this Agreement.


                     [*] CONFIDENTIAL TREATMENT IS REQUESTED
<PAGE>
5.9   Bonus Payment. 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 first Product having Regulatory Approval for a
      Neurological Indication:

<TABLE>
<CAPTION>
                    EVENT                                             PAYMENT (US$)
                    -----                                             -------------
<S>                                                                   <C>
Net Sales exceed [*] dollars ($[*]) for a full calendar                    [*]
year (Jan. 1 - Dec. 31) during the Agreement Term

Net Sales exceed [*] dollars ($[*]) for a full calendar                    [*]
year (Jan 1 - Dec 31) during the Agreement Term
</TABLE>

      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 first Product having a Regulatory Approval for a Psychiatric
      Indication:

<TABLE>
<CAPTION>
                        EVENT                                        PAYMENT (US$)
                        -----                                        -------------
<S>                                                                  <C>
Net Sales exceed [*] dollars ($[*]]) for a full calendar                 [*]
year (Jan. 1 - Dec. 31) during the Agreement Term

Net Sales exceed [*] dollars ($[*]) for a full calendar                  [*]
year (Jan. 1 - Dec. 31) during the Agreement Term
</TABLE>

      Each payment in this Section 5.9 shall be due and payable by Roche within
      sixty (60) days after occurrence of the applicable event. Notwithstanding
      anything to the contrary, payment shall be made pursuant to this Section
      5.9 with respect to a Product for a Neurological Indication or a
      Psychiatric Indication only if such Product contains a different Memory
      Compound than any Memory Compound contained in a Product for which payment
      previously has been made pursuant to this Section 5.9.

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. In no event shall any adjustments pursuant to
      Sections 5.6, 5.7 and 5.8 result in Memory receiving royalties for a given
      calendar quarter pursuant to Sections 5.1, 5.2 and 5.3 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


                     [*] CONFIDENTIAL TREATMENT IS REQUESTED
<PAGE>
      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.

      (b)   Whenever calculation of Net Sales requires conversion from any
            foreign currency, Roche shall convert the amount of Net Sales 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.


                     [*] CONFIDENTIAL TREATMENT IS REQUESTED
<PAGE>
6.3   Taxes.

      (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, employed by Memory and at Memory's
            own expense, to perform such appropriate audit procedures.

      (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


                     [*] CONFIDENTIAL TREATMENT IS REQUESTED
<PAGE>
            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

7.1   The Strategic Alliance. The Parties hereby establish a Strategic Alliance
      with respect to the development of Products and the determination of
      licensing rights with respect thereto.

7.2   Joint Liaison Team. A Joint Liaison Team ("JLT") shall govern the research
      and development activities of the Strategic Alliance, including preparing
      development plans, supervising ongoing research and development
      activities, recommending actions in response to unforeseen events,
      supervising the transition of development and manufacturing 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).

      (a)   Organization. The JLT shall consist of five (5) members, two (2)
            members to be designated by Roche and three (3) members to be
            designated by Memory. 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 JLT and designate a
            replacement at any time by giving prior written notice of the
            withdrawal and identifying the replacement to the other Party. The
            chairperson of the JLT shall be from Memory.

      (b)   Meetings. The JLT shall hold semi-annual meetings 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, one of the
            semi-annual meetings per year 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 JLT.

      (c)   Decision-Making. Decisions of the JLT shall be by consensus, with
            each Party having one collective vote. If the JLT 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


                     [*] CONFIDENTIAL TREATMENT IS REQUESTED
<PAGE>
            Executives"). If the Alliance Executives are unable to resolve any
            such matter after good faith discussions, then the final decision
            shall rest with Memory.

      (d)   Dissolution. The JLT automatically shall be dissolved upon the end
            of the last to expire License Exercise Period, unless the Parties
            otherwise agree in writing.

7.3   Research and Development Activities. Subject to the provisions of Section
      3.1 and the oversight of the JLT, Memory shall conduct, at its cost except
      as provided in Section 4.3 those research and development activities
      through the End of Phase IIa with respect to the Products that Memory
      deems necessary or appropriate.

      During the five (5) year period after the Effective Date, Memory shall
      obtain the prior written consent of Roche (which consent shall not be
      unreasonably withheld) before Memory shall commence the Initiation of
      Phase I with respect to more than [*] nicotinic alpha-7 agonist compounds.

7.4   Progress Reports. Within fifteen (15) days after the end of each calendar
      quarter, Memory shall prepare and deliver to Roche a written progress
      report for the JLT summarizing in reasonable detail the results to date of
      the Strategic Alliance, although Memory shall have no obligation to
      disclose any compound structures until the Initiation of Phase I with
      respect to such compound, except for Memory's obligation to provide such
      information to Roche pursuant to Section 2.2 or Section 4.6 hereof. In
      addition, upon request, Roche shall have the right to receive copies of
      the raw data from all test results of nicotinic alpha-7 agonist compounds.
      After each meeting, the JLT shall prepare a report summarizing the
      discussions held and conclusions reached and setting forth plans for the
      Strategic Alliance for the next six (6) months.

                         ARTICLE 8. CLINICAL DEVELOPMENT

8.1   Development. Memory, at its sole cost except as provided in Section 2.5,
      shall pursue clinical development of each Product through the date that
      Roche obtains a License with respect to such Product and, subject to the
      provisions of Section 3.1 hereof and oversight of the JLT, shall have sole
      control of all such clinical development activities. Roche, at its sole
      cost except as provided in Section 2.5, shall (1) pursue clinical
      development of each Product from and after the date that Roche obtains a
      License with respect to such Product and, subject to the provisions of
      Section 3.1 hereof and oversight of the DRT, be responsible for all such
      clinical development activities, and (2) obtain all government and health
      authority approvals which are required for Products to be manufactured and
      offered for sale in the Territory, including authorizations as may be
      required for the production, importation, pricing, reimbursement, and sale
      of Products in the Territory.

8.2   Development Review Team.

      (a)   Development Review Team Membership. For a given Product, no later
            than sixty (60) days after the End of Phase IIa for a Product, the
            Parties shall establish a Development Review Team (the "DRT")
            consisting of up to three (3) representatives from Roche and one (1)
            representative of Memory. Each Party may select alternative
            representatives to replace its DRT members selected by such Party as
            necessary, and may have other representatives attend meetings of the
            DRT in addition to the representatives of the Team. All guidance
            provided by the DRT shall be based upon the majority opinion of the
            DRT.

      (b)   DRT Meetings and Responsibilities. No less than two times per year
            for so long as the DRT contemplates clinical development of a Memory
            Compound in the Territory for the


                     [*] CONFIDENTIAL TREATMENT IS REQUESTED
<PAGE>
            purpose of obtaining Regulatory Approval in a country of the
            Territory. Roche shall organize meetings of the DRT.

            At its meetings, the DRT shall conduct a peer review of Roche's
            development of Products in the Territory and shall provide Roche
            with strategic guidance with respect to Roche's development of
            Products in the Territory.

            Roche shall report to the DRT on all significant clinical and
            regulatory issues relating to Products, and the DRT shall make
            recommendations and provide strategic guidance with respect to such
            issues.

      (c)   Costs. Each party shall be responsible for bearing its own costs
            related to the DRT.

                         ARTICLE 9. REGULATORY APPROVALS

Memory, at its sole cost, except as provided in Section 4.3, shall pursue all
Regulatory Approvals in the Territory related to each Product through the date
that Roche obtains a License with respect to such Product. Roche, at its sole
cost, shall pursue all Regulatory Approvals in the Territory related to each
Product from and after the date that Roche obtains a License with respect to
such Product, including the preparation and filing of applications for
Regulatory Approvals, as well as any or all governmental approvals required to
manufacture, or have manufactured, and sell Products. Roche shall be responsible
for pursuing, compiling and submitting all regulatory filing documentation, and
for interacting with regulatory agencies, for all Products in all countries in
the Territory. Roche or its Affiliates shall own and file all regulatory filings
and Regulatory Approvals for all Products in all countries of the Territory.

Roche shall supply Memory with a copy of all material communications related to
Product to or from the regulatory agencies for all Major Market Countries. Upon
request of Memory, Roche shall supply Memory with a copy of all such
communications in all countries.

Roche, at its sole cost, shall report to appropriate authorities in accordance
with local requirements all adverse events related to use of Products worldwide.
Adverse events related to the use of Product worldwide shall be in a single
database, centralized, held and owned by Roche. Roche shall notify Memory of
material adverse events related to Products.

                       ARTICLE 10. MANUFACTURE AND SUPPLY

10.1  Clinical Supplies of Product. Memory shall supply at its own cost all
      clinical supply of each Product and placebo 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. Roche shall supply at
      its own cost all clinical supply of each Product and placebo to be used in
      the Territory from and after the date that Roche obtains a License with
      respect to such Product and during the remainder of the Agreement Term,
      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 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.


                     [*] CONFIDENTIAL TREATMENT IS REQUESTED



<PAGE>
                          ARTICLE 11. COMMERCIALIZATION

Except as expressly set forth in Section 2.5, Roche, at its own expense, shall
have sole responsibility and decision making authority for the marketing,
promotion, sale and distribution of Product in the Territory. During the
Agreement Term, upon written request of Memory not to exceed once per year,
Roche will fully inform Memory regarding the commercialization of Products in
the Territory by Roche, its Affiliates and sublicensees.

                             ARTICLE 12. TRADEMARKS

Roche shall own worldwide all trademarks on and in connection with Products, and
shall, at its cost, be responsible for procurement, maintenance and enforcement
of all worldwide trademarks registration on and in connection with Products.

        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. Memory shall require all of its employees, consultants and
      agents to assign all inventions related to Products made by them to
      Memory.

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 pursuant to Section
            2.1 hereof, Memory shall have no obligation to consult Roche with
            respect to prosecution or maintenance of any Memory Patent Rights.
            However, Memory shall have an obligation to keep Roche informed
            generally as to the status of any pending patent applications and
            issued patents. Memory will provide Roche with updates as to the
            status of Memory's patent prosecution on a regular basis (but no
            less than once per quarter).

      (c)   Memory Prosecution Obligations After Roche Exercise. After Roche has
            exercised its right to obtain a License pursuant to Section 2.1
            hereof, Roche shall reimburse Memory, on a patent-by-patent basis,
            as to any Memory Patent Rights Covering the Product for which Roche
            has exercised its right to a License 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.

            If Roche obtains a License with respect to any Patent Rights
            Covering a Product, then:

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<PAGE>

            (A)   Memory shall use reasonable efforts to consult with Roche as
                  to the Handling of any 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.

            (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 the 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.

                     [*] CONFIDENTIAL TREATMENT IS REQUESTED
<PAGE>

            (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)   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 assign to Roche such patent application or patent in such
                  country, and Roche may thereafter continue to prosecute and
                  maintain the patent filing in the country, at Roche's own cost
                  and in Roche's name, to the extent Roche desires to do so.

            (M)   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.

13.3  Prosecution Costs. Memory shall be solely responsible for payment of the
      reasonable costs to Handle the Memory Patent Rights, except as otherwise
      provided in Section 13.2 above.

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, 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 by a Third Party making,
      using, offering for sale, selling, or importing a compound which

                     [*] CONFIDENTIAL TREATMENT IS REQUESTED
<PAGE>

      is a nicotinic alpha-7 agonist or a product containing a compound which is
      a nicotinic alpha-7 agonist (collectively "NA7 Infringement").

      After Roche has exercised its right to obtain a License with respect to a
      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 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. If Roche
      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, Memory shall have the right to bring and control
      any such action at its 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.

      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.

      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. Prior to Roche exercising its right to
      obtain a License with respect to the 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. After Roche has exercised its
      right to obtain a License with respect to the 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) if Memory has exercised its co-promotion right with respect
      to such Product, Memory shall receive [*]% of the lost profits for such
      Product and Roche shall receive the remaining [*]%; or (ii) if Memory has
      not exercised its co-promotion right with respect to such Product, 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.

                     [*] CONFIDENTIAL TREATMENT IS REQUESTED
<PAGE>

      Prior to Roche obtaining a License with respect to the Product which is
      the subject of such suit or action, Memory shall have the sole right to
      control any settlement and all negotiations relating thereto. After Roche
      has exercised its right to obtain a License with respect to the Product
      which is the subject of suit or action, the Initiating Party 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 of such
      certification. Prior to Roche exercising its right to obtain a License
      which respect to a Product, then Memory shall have the sole right to
      enforce Memory Patent Rights Covering such Product. After Roche has
      exercised its right to obtain a License with respect to a Product, then
      Roche shall have the right to enforce Memory 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.

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

with copies of all notices relating to U.S. cases to:

            Hoffmann-La Roche Inc.
            340 Kingsland Street
            Nutley, New Jersey 07110
            Attn: Chief Patent Counsel

All notices provided under this Article 13 to Memory shall be given to:

            Memory Pharmaceutical Corp.
            100 Philips Parkway
            Montvale, New Jersey 07645
            Attn: Head of Business Development

With copies of all notices to:

            Millen, White, Zelano and Branigan, P.C.

                     [*] CONFIDENTIAL TREATMENT IS REQUESTED
<PAGE>

            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 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.

      (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 compounds of the Program identified by Memory to
            Roche and would prevent Roche from selling such Memory Compound 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 Mistatements. 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, and to the actual knowledge of such senior executives
            such information does not contain any untrue statement of material
            fact or omit to state a material fact; (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

                     [*] CONFIDENTIAL TREATMENT IS REQUESTED
<PAGE>

      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. 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 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 [*] 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

      (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

                     [*] CONFIDENTIAL TREATMENT IS REQUESTED
<PAGE>

            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) disclosure to
            competitors could be expected to have a material adverse effect on
            the commercial value 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 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.

                        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

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<PAGE>

      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 and import
      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 have the right to terminate this Agreement as
      a result of such nonpayment until resolution of the dispute.

16.4  Roche's Right to Terminate.

      (a)   Roche shall have the unilateral right to elect not to maintain its
            license rights with respect to any Product pursuant to Section 2.1
            hereof, on a Product-by-Product basis, upon the occurrence of each
            event described in Section 4.4 hereof with respect to such Product.
            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 such
            Product, and this Agreement shall terminate with respect to such
            Product and Roche shall have no

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<PAGE>

            further obligation to make any payments pursuant to Sections 4.4 and
            4.5 and Article 5 hereof relating to such Product.

      (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.

16.5  Consequences of Termination.

      Upon (a) any termination of this Agreement in its entirety pursuant to
      Section 16.2, (b) termination of this Agreement by Roche of this Agreement
      in its entirety or in a region or country or in respect of a Product
      pursuant to Section 16.4 hereof, or (c) 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 or Product, respectively) shall
      terminate on the effective date of termination. In the event of any such
      termination, the following shall apply.

      (a)   Roche shall, upon Memory's written request, assign and transfer 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 the Product, all of Roche's right, title and
            interest in and to (i) all trademarks and trademark applications
            used or intended for use specifically for the relevant Product(s),
            (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 Product(s), 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 Product(s) and (iv) all rights relating to
            the infringement of Memory Patent Rights and Joint Patent Rights,
            related to and necessary for the commercialization of the relevant
            Product(s). Without limiting the generality of the preceding
            sentence, Memory shall, upon such transfer, have the right to
            disclose such filings, approvals and data to (i) governmental
            agencies of the country or region to the extent required or
            desirable to secure government approval for the development,
            manufacturing or sale of Product in the country or region, (ii)
            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 Product in the country or
            region, and (iii) Third Parties to the extent reasonably necessary
            or desirable to market Product in the country or region. All such
            filings, approvals and data transferred to Memory pursuant to this
            Section 16.4 shall be deemed to be Memory Confidential Information.

      (b)   In addition, for a given 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

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            Memory the right to obtain a sole and exclusive, royalty bearing
            license, under Roche Patent Rights and Roche Know-How Covering the
            Product and Roche trademarks used or intended for use in connection
            with the sale of Product, to make, have made, use, offer for sale,
            sell and import such Product(s) 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
            (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 Product(s), 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 Product(s) quality and specifications
            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 Product(s) manufacturing activities 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 the
            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 be
      completed in a manner that will permit Memory to continue without
      interruption the business of developing, manufacturing, marketing and
      selling the Product(s).

16.6  Royalty and Payment Obligations. Termination of this Agreement by either
      Party for 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). However,
      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
      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 February 8, 2004, 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.

16.8  Survival of Obligations. Section 2.3, Article 6, 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.

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<PAGE>

                             ARTICLE 17. ARBITRATION

Any dispute, controversy or claim ("Dispute") arising out of or in relation to
this Agreement, or the breach, termination or invalidity thereof, that cannot be
settled amicably by the Parties after a good faith discussion to resolve the
Dispute by the appropriate officers of the Parties, shall be submitted by either
Party to arbitration conducted in accordance with the rules then in effect of
the American Arbitration Association ("AAA"). Arbitration shall take place in
Newark, New Jersey and shall be conducted by three (3) arbitrators, one of whom
shall be designated by each Party, and the third selected by the other two (2)
arbitrators, all within the time limits established by the then existing rules
of the AAA. If the two (2) designated arbitrators are unable to agree upon a
third arbitrator by two (2) months after submission of the matter to
arbitration, the AAA shall select such third arbitrator within three (3) months
of such original submission. The written decision of the arbitrators shall be
final and binding on the parties and may be enforced in any court having
jurisdiction over the Parties or their current assets. The award rendered by the
arbitrators shall include the cost of arbitration, reasonable attorneys' fees
and reasonable costs for expert and other witnesses, and in the event of a
termination, in whole or in part, a transition procedure, including the
performance of transition services by Roche, so as to maintain the value of the
assets being transferred to Memory and, to the extent contemplated by Section
16.4, permit Memory to conduct the business being transferred to it. The parties
shall be entitled to discovery as provided in the Federal Rules of Civil
Procedure then in effect in the District of New Jersey. If the issues in dispute
involve scientific or technical matters, at least one of the arbitrators chosen
hereunder shall have educational training and/or experience sufficient to
demonstrate a reasonable level of knowledge in the Field and pharmaceutical drug
development. Notwithstanding the preceding provisions of this Article 17, with
respect to any breach or threatened breach of this Agreement of Section 15.1,
16.4 or any other provision where a Party would not be appropriately compensated
by the payment of money, a party has a right to seek injunctive relief from any
court of competent jurisdiction to enjoin such breach or threatened breach
and/or to seek specific performance.

In the event of a Dispute, a Party shall have no right to toll or delay any
obligation in this Agreement unrelated to the Dispute as a result of the
Dispute. By way of example, if Roche owes Memory $5,000,000 and claims a
$2,000,000 payment is not due by reason of breach of Memory, then Roche shall
pay the $5,000,000, and the parties will resolve such $2,000,000 Dispute
pursuant to Article 17.

                            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

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<PAGE>

            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 other than Roche,
            sublicensees and each of their distributors, representatives or
            anyone in privity therewith (but only to the extent same is a
            consequence of Section 2.5, 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. In the event of any such claim against the Roche
            Indemnified Parties by an Independent 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  Publicity. Neither Party shall originate any publicity, news release or
      other public announcement, written or oral, relating to this Agreement,
      including its terms, without the prior approval of the other Party except
      solely to the extent a Party reasonably believes same is otherwise
      required by law. Such approval shall not be unreasonably withheld. Each
      Party shall to the extent consistent with applicable laws and regulations
      limit the disclosure of the financial terms set forth in this Agreement
      (such as by requesting confidential treatment of such terms in documents
      required to be filed with the US Securities and Exchange Commission).

18.3  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.

18.4  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.

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<PAGE>

18.5  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.

18.6  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 other address as the addressee shall have specified in a written
      notice actually received by the addresser.

      If to Memory:

            Memory Pharmaceuticals Corp.
            100 Philips Parkway
            Montvale, New Jersey 07645
            Attn: Head of Business Development

      and

            Sills Cummis Radin Tischman Epstein & Gross, P.A.
            One Riverfront Plaza
            Newark, New Jersey 07102
            Attn: Ira A. Rosenberg, Esq.

      If to Roche:

            F. Hoffmann-La Roche Ltd
            Grenzacherstrasse 124
            CH-4070
            Basel, Switzerland
            Attn: Legal Department

      and

            Hoffmann La-Roche Inc.
            340 Kingsland Street
            Nutley, NJ  07110
            Attn.: Corporate Secretary

18.8  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.

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<PAGE>

18.9  Entire Agreement. This Agreement and the Schedules hereto (which 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.

18.10 Headings. The headings contained in this Agreement are for convenience of
      reference only and shall not be considered in construing this Agreement.

18.11 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.

18.12 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, 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 void.

18.13 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 18.12.

18.14 Non-Solicitation. Each party agrees that, during the period from the
      Effective Date to the date that is two (2) years after the Effective Date,
      it shall not directly or indirectly solicit the services (by way of
      employment or otherwise), or employ or otherwise engage the services, of
      any of the other Party's personnel involved in the Strategic Alliance
      (including, without limitation, any member of the JLT, any subteam or the
      DRT). Roche agrees that, during such two (2) year period and for a period
      of one (1) year thereafter, it shall not directly or indirectly solicit
      the services (by way of employment or otherwise), or employ or otherwise
      engage the services, of any member of senior management of Memory
      (including, without limitation, any Director, Associate Director or
      Assistant Director or any higher-ranking personnel of Memory).

18.15 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.

18.6  Counterparts. This Agreement may be executed 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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<PAGE>


      IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed in their names by their properly and duly authorized officers or
representatives as of the dates below written.

MEMORY PHARMACEUTICALS CORP.      HOFFMANN-LA ROCHE INC.


By: /s/ Tony Scullion             By: Dennis E. Burns
    --------------------------        -----------------------------------------

Title: Chief Executive Officer    Title: VP, Global Head of Business Development
       -----------------------           --------------------------------------


                                  F. HOFFMANN-LA ROCHE LTD


                                  By: /s/ Brad Bolzon
                                      -----------------------------------------

                                  Title: EVP, Business Development Licensing
                                         & Alliances
                                         --------------------------------------


                                  By: [Illegible]
                                      -----------------------------------------

                                  Title: VP, Global Head Licensing
                                         --------------------------------------


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<PAGE>

                                   SCHEDULE 1

                                DATA AND REPORTS

[*]




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<PAGE>

                                    EXHIBIT A

                 HEADS OF AGREEMENT FOR CO-PROMOTION OF PRODUCT

1     MEMORY ELECTION TO CO-PROMOTE. Memory shall have the right to elect to
      co-promote each Product in the US, 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. Within forty-five (45) days
      after the end of Phase II with respect to each 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 each
      Product by giving written notice thereof to Roche within forty-five (45)
      days after receipt of the items described in the immediately preceding
      sentence.

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 first approved co-promotion indication in the Co-Promotion
      Territory. Memory shall have the right to terminate the Co-Promotion
      Agreement with respect to any Product if the Net Sales thereof in the US
      are less than an amount for which a co-promotion arrangement for such
      Product would be financially practicable and profitable.

4.    ASSIGNABILITY. Memory may not assign its co-promotion rights without
      Roche's express written consent.

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, 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 all Regulatory Approvals in the US to market and
      sell a Product for a Neurological Indication or a Psychiatric Indication
      and an Other Indication and is the subject of co-promotion by Memory, 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, Memory will be responsible for (i) carrying out
      [*] percent ([*]%) of the Product detailing and (ii) [*] percent ([*]%) of
      the marketing costs of such Product in the US; and Memory shall be
      entitled to receive from Roche [*] percent ([*]%) of the gross profits
      from the sale of such Product in the US. For avoidance of doubt, the
      marketing costs referred to in Section 5(ii) hereto do not include any
      direct cost of Roche field force; by way of example, but not limitation,

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<PAGE>

      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, 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 ([*]%). Furthermore, in
      order to exercise its right to co-promote a Product, Memory must make 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 final, approved Phase III development plan (including budget).

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 must provide at least [*] percent ([*]%) of
      the total promotional effort in a given calendar year as established by
      number and type of details in accordance with the Co-Promotion Plan.
      Memory may not subcontract its field sales force to fulfill its
      co-promotion obligations.

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. Memory shall have an obligation to report adverse events to
      Roche 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.

13.   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.

                     [*] CONFIDENTIAL TREATMENT IS REQUESTED
<PAGE>


                                    EXHIBIT B

                          SECURITIES PURCHASE AGREEMENT


                     [*] CONFIDENTIAL TREATMENT IS REQUESTED