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                                                                    EXHIBIT 10.8

LICENSE AGREEMENT

between

Bayer AG
D-51368 Leverkusen
Germany
- hereinafter referred to as "Bayer" -

and

Memory Pharmaceuticals Corporation
100 Philips Parkway
Montvale, New Jersey  07645
U.S.A.

- hereinafter referred to as "Memory" -

RECITALS

1.    Bayer has disclosed and transferred to Memory confidential information and
      a sample of Bayer's compound Bay z 4406 under the provisions of a Secrecy
      Agreement dated August 6, 1998, as extended by Agreement dated July 2,
      1999 (the "Secrecy Agreement"), and a Confidentiality and Non-Use
      Agreement dated July 6, 1999 as extended by Agreement dated June 30, 2000,
      and as modified by an Agreement dated May 23, 2000 (the "Confidentiality
      Agreement").

2.    Memory has evaluated such Bayer compound, the patent rights and know how
      related thereto, and has been granted by Bayer an exclusive evaluation
      period under an Agreement dated May 23, 2000, amended by a Letter
      Agreement dated November 21, 2000.

3.    Memory has informed Bayer in writing that it elects to acquire an
      exclusive license from Bayer pursuant to the provisions of the Agreement
      of May 23, 2000 and its amendment of November 21, 2000.

Now, therefore, in consideration of the mutual set forth in this License
Agreement, the parties hereby agree as follows:

ARTICLE 1 - DEFINITIONS

For purposes of this Agreement, the terms defined in this Article shall have the
meanings specified below:

1.1.  "Additional Component" shall mean a component which is diagnostically
      useable or therapeutically active alone or in a combination which does not
      require Compound, and such component does not contain Compound.

1.2.  "Affiliate" shall mean a corporation or other legal entity that controls,
      is controlled by, or is under common control with such party. For purposes
      of this definition, "control means the ownership, directly or indirectly,
      of more than fifty percent (50%) of the outstanding equity securities of a

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      corporation which are entitled to vote in the election of directors or a
      more than fifty percent (50%) interest in the net assets or profits of an
      entity which is not a corporation.

1.3.  "Combination Product(s)" shall mean a Finished Product that includes the
      Compound and at least one Additional Component.

1.4.  "Compound" shall mean the Bayer compound having the code no. Bay z 4406,
      which is (+)-3-isopropyl 5-(2-methoxyethyl)
      4-(2-chloro-3-cyanophenyl)-2,6-dimethyl-1,4-dihydro-3,
      5-pyridinedicarboxylate.

1.5.  "Distributor" shall mean any business entity which has the right to
      distribute Finished Products within a country.

1.6.  "Finished Product" shall mean any and all pharmaceutical preparations
      which are in a form ready for use by an end user without further
      formulation, processing or chemical transformation, which contain
      Compound.

1.7.  "Field" shall mean the treatment of human peripheral and central nervous
      system related disorders.

1.8.  "First Commercial Sale" shall mean the initial transfer of a Finished
      Product for value and not for demonstration, testing or promotional
      purposes.

1.9.  "Know How" shall mean any and all manufacturing information, technical
      information, testing and analytic methods, results, data and
      specifications or know-how which Bayer owns or has rights to include in
      the license grant in Article 2 hereof pertaining to Compound, Finished
      Product and Field.

1.10. "IND" shall mean the application for an Investigative New Drug in the
      United States or a foreign equivalent thereof.

1.11. "Listed Country" shall mean the United States of America, Japan, Germany,
      France, Italy, United Kingdom, Canada, Mexico, Spain, The Netherlands,
      Belgium or Luxembourg.

1.12. "Major Country" shall mean the United States of America, Japan, Germany,
      France, Italy or the United Kingdom.

1.13. "NDA" shall mean a New Drug Application in the United States to obtain an
      approval to market and sell Finished Product, or a foreign equivalent
      thereof.

1.14. "Net Sales" shall mean the total gross sales (number of units shipped
      times the invoiced price per unit) of Finished Product, or, if applicable,
      Combination Product sold by Memory and/or a Sublicensee and/or a
      Distributor to Third Parties less certain deductions explained below, but
      only to the extent that such deductions are borne by Memory and/or a
      Sublicensee and not separately invoiced, and are related to Finished
      Product sold under the terms of this Agreement:

      a)    Allowances actually granted to Third Party customers such as
            ordinary and customary trade discounts, quantity discounts, cash
            discounts, rebates (including rebates to social and welfare
            systems), and sales commissions but together not more than [*]% of
            gross sales. Notwithstanding the foregoing, in the event that the
            requested allowances are

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            higher than [*]% of the gross sales in an individual country, Memory
            shall be entitled to deduct from the gross sales more than [*]%, if
            Memory produces evidence and informs Bayer respectively in writing
            that the sum of the deductions as set forth herein before is more
            than [*] %; provided, however, that such allowances are granted in
            the ordinary course of business and consistent with the business
            practices in the pharmaceutical industry.

      b)    Government mandated rebates.

      c)    Taxes and governmental charges, other than income tax. This
            deduction includes import duties, excise taxes, tariffs, use taxes,
            etc., which are imposed on Finished Product and borne by the seller
            of Finished Product.

      d)    Credits and/or allowances actually given for rejection, return or
            recall of previously sold Finished Product, but not in excess of the
            original selling price of the Finished Product rejected, returned or
            recalled.

      e)    Outbound transportation and delivery charges (including insurance
            premiums related to transportation and delivery) prepaid or allowed.

      Notwithstanding anything herein to the contrary, the following shall not
      be considered a sale of a Finished Product, or, if applicable, Combination
      Product under this Agreement: (i) the transfer of a Finished Product, or,
      if applicable, Combination Product to a Sublicensee or a Distributor for
      sale by the Sublicensee or the Distributor in a transaction that will be
      royalty bearing, regardless of whether there is an internal transfer price
      associated with the transfer; or (ii) the transfer of a Finished Product,
      or, if applicable, Combination Product to a Third Party, an Affiliate of
      Memory or a Sublicensee without consideration or for nominal consideration
      to Memory and/or the Sublicensee in connection with the development or
      testing of a Finished Product. For purposes of clarification, in the event
      of any Net Sales generated by Memory directly via an unaffiliated
      wholesaler of Finished Product or, if applicable, Combination Product and
      not through a Sublicensee, "Net Sales" shall mean, and royalties shall be
      calculated based upon, the Net Sales of Memory to the wholesalers and not
      the sales of Finished Product or, if applicable, Combination Product by
      the wholesaler to its customers.

1.15. "Patent Rights" shall mean (a) Bayer's patents and patent applications as
      specified in Annex A which is an integral part of this Agreement,
      including any patents issuing from such patent applications; (b) any
      divisional applications, continuation applications, continuation in part
      applications or substitutes, reissues, reexaminations, renewals or the
      like related to the patents and patent applications listed in Annex A; (c)
      claims of continuation in part applications and patent applications, and
      patents issued therefrom, to the extent the claims are directed to the
      subject matter specifically described in the patent rights described in
      (a) and (b) above and (d) below; and (d) all patent rights referred to in
      Art. 2.3 below.

1.16. "Royalty Period" shall mean the calendar quarter, or partial calendar
      quarter, commencing with the First Commercial Sale of any Licensed
      Product, and each calendar quarter thereafter until the obligation to pay
      royalties expires.

1.17. "Sublicensee" shall mean a Memory Affiliate or a Third Party; provided
      that such Affiliate or Third Party has received certain sublicense rights
      from Memory as set forth in Art. 2.6.

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1.18. "Third Party" shall mean any third party except Memory, a Memory
      Affiliate, Bayer or a Bayer Affiliate.

ARTICLE 2 - GRANT OF RIGHTS

2.1.  Subject to the terms and conditions set forth herein, Bayer hereby grants
      Memory a world-wide, exclusive, royalty-bearing non-transferable license
      under Patent Rights and Know How to manufacture, have manufactured, use
      and/or have used Compound in order to manufacture, have manufactured, use,
      offer for sale, have sold, import, export, register and/or market Finished
      Products within the Field.

2.2.  Memory acknowledges that its rights under Patent Rights are limited to
      those expressly granted herein, and that Memory is expressly prohibited
      from selling, transferring or otherwise making available to Third Parties
      Compound and/or Finished Products for use outside the Field.

2.3.  As far as Bayer owns or controls, at any time, patent rights not mentioned
      in Annex A, which claim Compound and/or its use in the Field, those patent
      rights shall be regarded as Patent Rights provided that manufacture sale
      or use of the Finished Product in the Field would infringe or violate
      those patent rights. The patent rights under this Art. 2.3 shall however
      not include any patent or patent application of Bayer claiming specific
      formulations possibly useful for Compound.

2.4.  Except as otherwise provided herein, the right, title and interest in the
      Patent Rights are affected by the license pursuant to Art. 2.1 only to the
      extent as such Patent Rights are claiming Compound and its use within the
      Field.

2.5.  Bayer hereby grants to Memory an option to acquire a non-exclusive,
      world-wide, non-transferable license pursuant to the terms set forth in
      this Agreement (i) under Bayer's rights belonging to the patent families
      of US-5,707,655 and/or US-5,900,425 in relation to controlled release
      formulations disclosed in such patent families and developed by Bayer for
      its Nimodipin(R) product, and, if applicable, (ii) under corresponding
      Bayer know-how; provided, however, that Memory may exercise such option
      and use such rights only for the manufacture, sale and use of Finished
      Products within the Field. No additional consideration shall be payable by
      Memory to Bayer upon exercise of such option. The option granted to Memory
      under this Art. 2.5 will automatically expire, if Memory does not exercise
      this option in writing before the end of the first clinical phase II
      trials during the development of the Finished Product in the Field.

2.6.  Memory shall have the right to grant sublicenses under the licenses and
      rights granted by Bayer to Memory under this Art. 2; provided, however,
      that Memory shall continue to be responsible for all obligations of Memory
      set forth in this License Agreement.

ARTICLE 3 - DEVELOPMENT AND MARKETING

3.1.  In consideration of the rights granted to Memory under this Agreement,
      Memory shall use commercially reasonable efforts (i) to develop (through
      research, development, marketing and/or sublicensing activities, either
      alone or in collaboration with Third Parties) Finished

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      Products, and (ii) to register and market (either alone and/or in
      collaboration with Third Parties) Finished Products in the United States,
      Japan and in four countries of the European Union which Memory shall
      select from the group consisting of Germany, France, United Kingdom, Italy
      and Spain.

3.2.  Neither Bayer nor a Bayer Affiliate shall have any obligation to provide
      Memory, a Memory Affiliate and/or a Sublicensee with any service or
      assistance as to (i) the non-clinical and clinical development of Compound
      and Finished Products, and (ii) the registration and marketing of Finished
      Products. Memory is solely responsible, and is hereby authorized by Bayer
      to contact a Third Party contractor in order to establish an ongoing
      supply of Compound which Memory needs for the non-clinical and clinical
      development of Finished Products as well as for marketing purposes. Bayer
      does not have any obligation to supply Memory with Compound.

ARTICLE 4 - PAYMENTS, RECORDS AND REPORTS

4.1.  In further consideration of the rights granted to Memory under this
      Agreement, Memory shall make the following payments to Bayer:

      (i)   0.25 Mio US $ (two hundred fifty thousand U.S. Dollars) within 30
            (thirty) days following the effective date of this Agreement;

      (ii)  0.75 Mio US $ (seven hundred fifty thousand U.S. Dollars) within 30
            (thirty) days following the first IND approval;

      (iii) [*] US $ ([*] U.S. Dollars) within 30 (thirty) days following the
            [*];

      (iv)  [*] US $ ([*] U.S. Dollars) within 30 (thirty) days following the
            [*];

      (v)   [*] US $ ([*] U.S. Dollars) within 30 (thirty) days following the
            [*]; provided that, if the [*], then this payment shall be due on
            the date that is the earlier of (a) 6 (six) months from the date of
            such [*], or (b) thirty (30) days following the [*]. If the payment
            described in this paragraph is made pursuant to (a) of this
            paragraph, then such payment shall bear interest from the date that
            is thirty (30) days following the [*] through the date of actual
            payment. Such interest shall be calculated based on the three (3)
            month LIBOR rate in effect on the business day immediately preceding
            the start of such thirty (30) day period, as reported in the Wall
            Street Journal.

      (vi)  [*] US $ ([*] U.S. Dollars) within 60 (sixty) days following the
            [*]; provided that, if the [*], then this payment shall be due on
            the date that is the earlier of (a) 6 (six) months from the date of
            such [*], or (b) sixty (60) days following the [*]. If the payment
            described in this paragraph is made pursuant to (a) of this
            paragraph, then such payment shall bear interest from the date that
            is sixty (60) days following the [*] through the date of actual
            payment. Such interests shall be calculated based on the three (3)
            month LIBOR rate in effect on the business day immediately preceding
            the start of such sixty (60) day period, as reported in the Wall
            Street Journal.

      (vii) a [*]% ([*] percent) royalty on the worldwide Net Sales proceeds
            received by Memory's Sublicensees, irrespective of the royalty
            rate(s) actually to be paid by Sublicensee(s) to Memory, if any;

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      (viii) in the event that the worldwide royalties received by Memory from
            any of its Sublicensee(s) exceeds [*]% ([*] percent), then Memory
            will pay to Bayer an additional royalty of [*]% ([*] percent) of
            such amounts in excess of [*]% ([*] percent) [example: if royalties
            received from a Sublicensee are 12%, royalties to be paid to Bayer
            would be [*]% plus [*]% of the next [*]% ([*]%), resulting in a
            total royalty rate of [*]%].

4.2.  In the event that Memory shall generate in any calendar year Net Sales of
      Finished Product directly or via a Distributor and not through a
      Sublicensee, Memory shall, in addition to the payments specified under
      Art. 4.1, pay to Bayer royalties based on such annual Net Sales as
      follows:

      -     a [*] % ([*] percent) royalty on the worldwide Net Sales during such
            calendar year generated by Memory, if such Net Sales do not exceed
            [*] US $ ([*] US Dollars);

      -     a [*]% ([*] percent) royalty on the entire worldwide Net Sales
            generated during such calendar year by Memory, if such Net Sales lie
            in a range from more than [*] US $ ([*] US Dollars) to [*] US $ ([*]
            US Dollars);

      -     a [*] % ([*] percent) royalty on the entire worldwide Net Sales
            generated during such calendar year by Memory, if such Net Sales lie
            in a range from more than [*] US $ ([*] US Dollars) to [*] US $ ([*]
            US Dollars);

      -     a [*] % ([*] percent) royalty on the entire worldwide Net Sales
            generated during such calendar year by Memory, if such Net Sales lie
            in a range from more than [*] US $ ([*] US Dollars) to [*] US $ ([*]
            US Dollars); or

      -     a [*] % ([*] percent) royalty on the entire worldwide Net Sales
            generated by Memory, if such Net Sales exceed [*] US $ ([*] US
            Dollars).

4.3.  Notwithstanding any other provision herein, in the event that Bayer does
      not have any Patent Rights affording patent protection relating to the
      manufacture, sale and use of Compound in a Listed Country, the royalties
      payable by Memory to Bayer with respect to Net Sales in such Listed
      Country shall be as follows:

      (i)   if Memory generates any Net Sales directly or via a Distributor in
            one of the Listed Countries in which Bayer does not have any Patent
            Rights affording such patent protection, then the royalties payable
            by Memory to Bayer with respect to Net Sales in this Listed Country
            shall be reduced to [*]% ([*] percent) of the royalty rates defined
            in Art. 4.2 of this Agreement;

      (ii)  if Net Sales are generated by any of Memory's Sublicensee(s) in one
            of the Listed Countries in which Bayer does not have any Patent
            Rights affording such patent protection, then the royalties payable
            by Memory to Bayer with respect to Net Sales in this Listed Country
            shall be reduced to [*]% ([*] percent); the royalty payments to be
            made by Memory according to Art. 4.1 (viii) of this Agreement, i.e.
            the royalties to be paid by Memory to Bayer if the royalties
            received by Memory from any of its Sublicensee(s) exceed [*]%, are
            however not affected by the provisions of this Art. 4.3 of this
            Agreement;

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      (iii) if Bayer does not have any Patent Right affording such patent
            protection in a country which does not belong to the Listed
            Countries, then the royalty rates for that country shall not be
            reduced.

4.4.  No multiple royalties shall be payable because any Finished Product, is
      covered by more than one Patent Right.

4.5.  In the event that a Combination Product is sold, then Net Sales of the
      Combination Product shall be calculated using one of the following
      methods:

            (a) By multiplying the Net Sales of the Combination Product during
            the applicable royalty accounting period ("accounting period") by a
            fraction, the numerator of which is the average gross selling price
            in the Major Countries of the Finished Product, and the denominator
            of which is the average gross selling price in the Major Countries
            of the Combination Product, or

            (b) In the event that no such separate sales are made of the
            Finished Product or the Combination Product in the Major Countries
            during the applicable accounting period, Net Sales for purposes of
            determining royalties payable hereunder shall be subject of
            discussions between Memory and Bayer in good faith in order to
            identify a fair and reasonable arrangement. If the parties are
            unable to resolve a dispute arising from their discussion under this
            Art. 4.5(b) within 45 days, each party shall have the right to
            initiate the Dispute Resolution Procedure as set forth in Article.
            8.8.

4.6.  Memory agrees to pay Bayer, concurrently with the delivery of the report
      set forth in Article 4.8, royalties on aggregate Net Sales during the
      prior Royalty Period at the royalty rates specified in the Articles 4.1 -
      4.5.

4.7.  On each anniversary of the effective date of this Agreement, Memory shall
      deliver to Bayer a report containing the following information with
      respect to each Sublicensee to whom Memory has transferred rights during,
      the period since the last such report or, in the case of the first such
      period since the effective date of this Agreement:

      a)    identification of the Sublicensee and the kind of rights granted to
            it;

      b)    the financial terms and conditions of the Sublicense Agreement so
            far relevant to the provisions of the Articles 4.1 - 4.3.

4.8.  Prior to the First Commercial Sale of a Finished Product, Memory agrees to
      provide biannual summary reports on the status of its research and
      development activities covered by the license granted herein. Commencing
      with the First Commercial Sale of a Finished Product in any country,
      within sixty (60) days after the conclusion of each Royalty Period Memory
      shall deliver to Bayer a report containing the following information:

      a)    gross sales of Finished Products, in each country of sale, made by
            or on behalf of Memory and/or its Sublicensees during the applicable
            Royalty Period;

      b)    calculation of Net Sales for the applicable Royalty Period in each
            country of sale, together with the exchange rates used for
            conversion; and

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      c)    calculation of the amount payable to Bayer for the applicable
            Royalty Period.

      If no royalties or other payments are due to Bayer for any Royalty Period,
      the report shall so state. Concurrent with these reports, Memory shall
      remit to Bayer any payment due for the applicable Royalty Period. The
      method of payment shall be by check or wire transfer as directed from time
      to time by Bayer. All amounts payable to Bayer under this Article 4 will
      first be calculated in the currency of sale and then converted into U.S.
      dollars in accordance with Art. 4.9, and such amounts shall be paid
      without deduction of any withholding taxes, value-added taxes, or other
      charges applicable to such payments. All reports provided to Bayer
      hereunder shall be maintained in confidence by Bayer.

4.9.  All payments due under this Agreement shall be payable in United States
      dollars. Conversion of foreign currency ("Other Currency") to U.S. dollars
      shall be made at the conversion rate existing in the United States (as
      reported in the Wall Street Journal) on the last working day of the
      applicable calendar quarter. Such payments shall be without deduction of
      exchange, collection, or other charges. In the event that any Other
      Currency shall, at the time the applicable payment by Memory to Bayer is
      due, not be convertible into U.S. dollars and freely transferable by
      reason of any governmental regulation or any moratorium, embargo, banking
      restriction or other restriction, the obligation of Memory to make payment
      of such payment shall be suspended until such time a such Other Currency
      shall be convertible into U.S. dollars and freely transferable to the
      United States.

4.10. Memory shall maintain, and shall ensure that any Sublicensee shall
      maintain, complete and accurate records of Finished Products made, used,
      or sold under this Agreement and any amounts payable to Bayer in relation
      to such Finished Products, which records shall contain sufficient
      information to permit Bayer to confirm the accuracy of any reports
      delivered to Bayer. Memory and its Sublicensees shall retain such records
      relating to a given Royalty Period for at least five (5) years after the
      conclusion of that Royalty Period, during which time Bayer shall have the
      right, at its expense, to cause an independent certified public accountant
      (who shall be subject to confidentiality obligations) to inspect such
      records during normal business hours for the sole purpose of verifying any
      reports and payments delivered under this Agreement; provided, however,
      that not more than one such audit shall be permitted during any twelve
      (12) month period. Such accountant shall not disclose to Bayer any
      information other than information relating to accuracy of reports and
      payments delivered under this Agreement and shall provide Memory with a
      copy of any report given to Bayer. The parties shall reconcile any
      underpayment or overpayment within thirty (30) days after the accountant
      delivers the results of the audit. In the event that any audit performed
      under this Article reveals an underpayment in such Royalty Period in
      excess of the greater of $[*] or [*] percent ([*] %) of the amount
      actually paid, Memory shall bear the full cost of such audit.

4.11. Any payments by Memory that are not paid on or before the date such
      payments are due under this Agreement shall bear interest at [*]
      percentage points above the base prime rate of interest most recently
      reported by The Wall Street Journal, calculated based on the number of
      days that payment is delinquent.

ARTICLE 5 - REPRESENTATIONS AND WARRANTIES

5.1.  Each party represents and warrants to the other that it has the legal
      right and power to enter into this Agreement, to extend the rights and
      licenses granted to the other in this Agreement, and to

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      fully perform its obligations hereunder, and that the performance of such
      obligations will not conflict with its charter documents or any
      agreements, contracts, or other arrangements to which it is a party.

5.2.  Bayer represents and warrants to Memory that, as of the effective date of
      this Agreement, it possesses the exclusive right, title, and interest in
      and to the Patent Rights and that it has the full legal right and power to
      enter into the obligations and grant the rights and licenses set forth in
      this Agreement. Bayer shall be responsible for and shall control the
      prosecution, grant and maintenance of all Patent Rights and shall, at
      Bayer's cost and expense, use reasonable efforts in order to prosecute and
      maintain such Patent Rights in good faith consistent with its customary
      patent policy and its reasonable business judgment, and shall in good
      faith consider the interests of Memory in so doing. Bayer will, upon
      request of Memory, provide Memory with information concerning the status
      of Patent Rights. In the event that Bayer recognizes that a patent
      protection in relation to a patent application mentioned in Annex A cannot
      be obtained, or that a granted patent is becoming nullified prior to its
      expiration, or that another event happens which might have an influence on
      the Patent Rights, Bayer shall inform Memory in writing without undue
      delay in reasonable time in advance of the event. If Bayer elects not to
      (i) file foreign or PCT applications claiming priority to a pending U.S.
      patent application within the one-year statutory period; (ii) continue
      prosecution of a patent application; or (iii) maintain any Patent Rights,
      Bayer shall so notify Memory in sufficient time for Memory to assume the
      filing, prosecution and/or maintenance of such application or patent in
      Bayer's name at Memory's expense; and thereafter Memory shall have the
      right (but not the obligation), at its expense and discretion, to file,
      prosecute or maintain any such applications or patents. Bayer agrees to
      execute, and agrees to use reasonable efforts to ensure that its employees
      shall execute, all documents necessary or useful for Memory to file,
      prosecute and/or cause the issuance of such applications. Memory shall
      have no further royalty or other obligations under this Agreement with
      respect to such patents or applications.

5.3.  Bayer represents, warrants and covenants that (i) neither Bayer nor a
      Bayer Affiliate will manufacture, use, sell, have sold, import, export,
      develop, register or market the Compound, or any product containing
      Compound as its active ingredient, or license or otherwise permit any
      Third Party to do any of the foregoing, in any case whether within or
      outside the Field, during the term of this Agreement; and (ii) at the
      effective date of this Agreement, to Bayer's actual knowledge, there are
      no claims or demands of any person, firm, corporation or entity pertaining
      to Patent Rights, and no proceedings have been instituted or are pending
      or are threatened which challenge the right of Bayer to, or involve, the
      Patent Rights.

5.4   Nothing in this Agreement shall be construed as:

      a)    a warranty or representation by Bayer as to the validity or scope of
            any patent included within the Patent Rights;

      b)    a warranty or representation that the exploitation of the Patent
            Rights or the manufacture, use or sale of compound and/or Finished
            Products is or will be free from infringement of patents of third
            parties, or is or will be technically and/or economically feasible
            or useful;

      c)    an obligation of either party to bring or prosecute actions or suits
            against Third Parties for infringement;

      d)    creating any agency, partnership, joint venture or similar
            relationship between Bayer and Memory; or

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      e)    conferring by implication, estoppel or otherwise any license,
            immunity or right under any patent of Bayer other than those
            specified in Article 2 of this Agreement.

5.4.  a)    Each party promptly shall advise the other party of any possible
            infringement of any of the Patent Rights pertaining to manufacture,
            sale and/or use of Compound by a Third Party of which such party
            becomes aware, and such party shall supply the other party with any
            evidence available pertaining to the possible infringement.

            Memory shall have the first right (but not the obligation) to defend
            the Patent Rights with respect to the manufacture, sale and/or use
            rights for Compound against infringement or interference by any
            Third Party, in its own name and/or the name of Bayer, at Memory's
            own expense, including the bringing of any legal action for
            infringement or the defending of any counterclaim of invalidity or
            action of a Third Party for declaratory judgment of non-infringement
            or interference. Memory may settle any such actions, solely at its
            own expense and through counsel of its selection; provided, however,
            that Bayer shall be entitled, in each such instance, to participate
            through counsel of its own selection, at its own expense, and any
            settlement that is reasonably likely to have an adverse effect on
            the manufacture, sale and/or use rights for Compound included in the
            Patent Rights shall not be entered into without Bayer's prior
            written consent (which consent shall not be unreasonably withheld or
            delayed). Bayer shall provide reasonable assistance to Memory, as
            requested, and Memory shall reimburse Bayer for its reasonable
            out-of-pocket expenses in connection with such requested assistance.
            Memory shall be entitled to retain any recovery obtained as a result
            of such action, whether by judgment, award, decree or settlement.

            In the event that Memory fails to initiate and prosecute or
            participate in such legal action within one hundred twenty (120)
            days, Bayer shall have the right to initiate legal action, at its
            own expense, to uphold the Patents Rights against Third Parties.
            Memory shall provide reasonable assistance to Bayer as requested,
            and Bayer shall reimburse Memory for its reasonable out-of-pocket
            expenses in-connection with any such requested assistance. Bayer may
            settle any such actions, solely at its own expense and through
            counsel of its selection; provided, however, that Memory shall be
            entitled, in each such instance, to participate through counsel of
            its own selection, at its own expense, and any settlement that is
            reasonably likely to have an adverse effect on the manufacture, sale
            and/or use rights for Compound included in the Patent Rights shall
            not be entered without Memory's prior written consent (which consent
            shall not be unreasonably withheld or delayed). Memory shall provide
            reasonable assistance to Bayer as requested, and Bayer shall
            reimburse Memory for its reasonable out-of-pocket expenses in
            connection with any such requested assistance. Bayer shall be
            entitled to retain any recovery obtained as a result of such action,
            whether by judgment, award, decree or settlement.

      b)    In any infringement suit which either party may institute to enforce
            the Patent Rights pertaining to the manufacture, sale and/or use
            rights for Compound, or in a suit for patent infringement which is
            brought by a Third Party against Memory, which Memory is required to
            defend, the other party hereto shall at the request and the expense
            of the party initiating or defending such suit, cooperate in all
            reasonable respects and, to the extent reasonably possible, have its
            employees testify when requested and make available relevant
            records, papers, information, samples, specimens and the like.

ARTICLE 6 - INDEMNIFICATION

                     [*] CONFIDENTIAL TREATMENT IS REQUESTED
<PAGE>

6.1.  Memory shall indemnify, defend, and hold harmless Bayer and its directors,
      officers, employees, managers, agents and representatives and their
      respective successors, heirs and assigns against any liability, damage,
      loss, or expense (including reasonable attorneys' fees and expenses)
      (collectively, "Losses") incurred by or imposed upon the foregoing
      indemnitees or any one of them in connection with any claims, suits,
      actions, demands, or judgments ("Claims") (i) concerning Compound,
      Finished Product, Combination Product, process or service that is made,
      used, sold or provided by Memory pursuant to any right or license granted
      under this Agreement and/or (ii) relating to or arising from any breach by
      Memory of any representation, warranty or covenant made by it in this
      Agreement.

6.2.  Bayer shall indemnify, defend and hold harmless Memory and its respective
      directors, officers, employees, managers, agents and representatives, and
      their respective successors, heirs and assigns, from and against any and
      all Losses incurred by or imposed upon the foregoing indemnitees or any of
      them in connection with any Claims relating to or arising from any breach
      by Bayer of any representation, warranty or covenant made by it in this
      Agreement.

6.3.  Any person or entity seeking indemnification under this Article 6
      (collectively, the "Indemnified Parties") shall promptly give notice to
      the party required to provide indemnification hereunder (the "Indemnifying
      Party") with respect to any Claims as to which it asserts a right to
      indemnification, and within thirty (30) days thereafter, further notify
      Indemnifying Party of the details of such Claim and the amount thereof;
      provided, however, that the failure to give such notification shall not
      relieve the Indemnifying Party from any liability that it may have
      pursuant to the provisions of this Article 6 as long as the failure to
      give such notice within such time is not prejudicial to the Indemnifying
      Party. Notice to the Indemnifying Party for the purpose of this Article 6
      shall include the filing of the service upon the Indemnifying Party of any
      legal action or any other form of actual notice. Bayer or Memory, as the
      case may be, may set off the amount of any Claim or Claims in respect of
      which such Indemnified Parties are entitled to indemnification hereunder
      against amounts otherwise due to the Memory or Bayer, as the case may be,
      hereunder. If the Indemnifying Party does not promptly and to the
      Indemnified Parties' satisfaction assume the defense of any Claim, the
      Indemnified Parties may do so at the Indemnifying Party's cost and
      expense. The Indemnifying Party may not compromise or settle any Claim
      without the prior written consent of the Indemnified Parties.

ARTICLE 7 - TERM AND TERMINATION

7.1.  This Agreement shall commence upon being signed by both parties (the
      "Effective Date") and shall remain in effect until the expiration of the
      last to expire of the Patent Rights, unless earlier terminated as provided
      in this Article. The term for payment of royalties for each Finished
      Product and, if applicable, for each Combination Product shall commence
      with the First Commercial Sale and shall end on a country by country basis
      upon either (i) the date on which the last Patent Right in such country
      expires, or (ii) ten (10) years after the First Commercial Sale of the
      Finished Product and, if applicable, Combination Product in such country,
      whichever is longer.

7.2.  In the event that Memory determines that it has a material scientific
      and/or technical problem relating to the development and/or regulatory
      approval of Compound or Finished Product in the Field, or a material
      economic and/or business problem relating to the development and/or
      regulatory approval and/or marketing of Compound or Finished Product in
      the Field, Memory may terminate this Agreement by giving 30 (thirty) days
      prior written notice thereof to Bayer,

                     [*] CONFIDENTIAL TREATMENT IS REQUESTED
<PAGE>

      setting forth the specific reason(s) for termination in detail. Bayer will
      evaluate these reasons in good faith and in case that Bayer according to
      its sole decision does not accept these reasons, it shall so notify Memory
      in writing within forty five (45) days of its receipt of Memory's notice
      and Memory and Bayer shall then enter into the Dispute Resolution
      Procedure in accordance with the provisions of Art. 8.8; provided,
      however, that Memory shall not be obligated to enter into any arbitration.
      In the event that this Dispute Resolution Procedure fails Memory may
      terminate this Agreement immediately.

7.3.  In the event that Memory fails to make timely payment of any amounts due
      to Bayer under this Agreement Bayer may terminate this Agreement upon
      thirty (30) days written notice to Memory, unless Memory pays all past-due
      amounts prior to the expiration of such thirty (30)-day notice period.

7.4.  In the event that either party commits a material breach of any of its
      obligations under this Agreement, other than that stated in Art. 7.3, and
      such party fails to remedy that breach within ninety (90) days after
      receiving written notice thereof from the other party, that other party
      may immediately terminate this Agreement upon written notice to the
      breaching party.

7.5.  Upon expiration of this Agreement pursuant to Art. 7.1, or upon
      termination of this Agreement by Memory pursuant to Art. 7.4, Memory shall
      have a fully paid up worldwide license under the terms set forth in
      Article 2 with respect to Memory's activities as to Compound and/or
      Finished Product subsequent to the date of expiration or any such
      termination.

7.6.  Upon termination of this Agreement by Memory pursuant to Art. 7.2, all
      rights and licenses granted to Memory by Bayer under this Agreement shall
      terminate immediately. If Bayer is interested to proceed with the
      development and/or marketing of Finished Product, and to use the data and
      results obtained by Memory during the development, and/or the NDA
      approvals of Memory, the parties shall negotiate reasonable terms and
      conditions under which Bayer may use Memory's data and results and/or NDA
      approvals.

7.7.  Upon termination of this Agreement by Bayer pursuant to Art. 7.3 or Art.
      7.4, all rights and licenses granted to Memory by Bayer under this
      Agreement shall terminate immediately. If Bayer is interested to proceed
      with the development and/or marketing of Finished Product, Memory shall
      disclose to Bayer all data and results obtained by Memory during the
      development, and shall further transfer free of charge the right, title
      and interest in all such data and results, including inventions, to Bayer.
      If applicable, Memory shall also assign to Bayer its NDA approvals for
      Finished Products in all countries free of charge.

7.8.  Memory agrees that, in the event that this Agreement is terminated
      pursuant to the terms, hereof, Memory shall so notify each Sublicensee
      within twenty (20) days of such termination.

7.9.  The milestones payments and the royalty payments to be made by Memory
      under Art. 4 shall not be refunded following the expiration or termination
      of this Agreement. Any milestone payment and/or royalty payment shall
      however not become due if notice of termination was given by the party
      entitled to do so prior to the due date of any such payment.

7.10. The expiration or termination of this Agreement for any reason whatsoever
      shall be without prejudice to any obligations or rights on the part of
      either party which have accrued prior to such termination, and shall not
      affect or prejudice any provision, of this Agreement which is expressly or
      by implication provided to come into effect on, or continue in effect
      after such termination.

                     [*] CONFIDENTIAL TREATMENT IS REQUESTED
<PAGE>

7.11. Unless otherwise expressly provided herein, upon expiration or termination
      of this Agreement for any reason whatsoever, neither party shall be
      entitled to claim indemnification or compensation on any ground
      whatsoever, including but not limited to loss of investment, loss of
      profit, business goodwill etc. with respect to such expiration or
      termination to the exclusion of damages caused by willful misconduct or
      gross negligence of a party hereto.

7.12. Pending the conclusion of any Dispute Resolution Procedure or arbitration
      procedure pursuant to the terms hereof, the parties shall continue to
      perform their obligations hereunder to the extent not in dispute and no
      default hereunder shall be deemed to occur until such decision is rendered
      (whereupon any party determined to be in default hereunder shall have the
      benefit of any applicable grace and/or cure periods).

ARTICLE 8 - MISCELLANEOUS

8.1.  All notices, requests, demands and other communications required or
      permitted to be given pursuant to this Agreement shall be in writing and
      shall be deemed to have been duly given upon the date of receipt if
      delivered by hand, recognized international overnight courier, confirmed
      facsimile transmission, or registered or certified mail, return receipt
      requested, postage prepaid to the following addresses or facsimile
      numbers:

      If to Memory:                        If to Bayer:

      Memory Pharmaceuticals Corp.         Bayer AG
      100 Philips Parkway                  D-51368 Leverkusen
      Montvale, New Jersey 07645 / U.S.A.  Germany
      Attention:  Chief Executive Officer  International Cooperation
                                           and Licensing
                                           Building:  Q 30
                                           (++49)-214-30 64840
      Facsimile:  (201) 802-7190

      Either party may change its designated address and facsimile number by
      notice to the other party in the manner provided in this Section.

8.2.  This Agreement shall be governed by and construed in accordance with the
      laws of the Federal Republic of Germany.

8.3.  This Agreement may not be assigned by either party without the prior
      written consent of the other party, except that either party may assign
      this Agreement to any of its Affiliates or to a successor in connection
      with the merger, consolidation, or sale of all or substantially all of its
      assets or that portion of its business pertaining to the subject matter of
      this Agreement, with prompt written notice to the other party of any such
      assignment. This Agreement shall inure to the benefit of and be binding
      upon the parties and their respective lawful successors and assigns.

8.4.  Nothing in this Agreement shall be construed so as to require the
      commission of any act contrary to law, and wherever there is any conflict
      between any provision of this Agreement and any statute, law, ordinance or
      treaty, the latter shall prevail, but in such event the affected
      provisions

                     [*] CONFIDENTIAL TREATMENT IS REQUESTED
<PAGE>

      of the Agreement shall be conformed and limited only to the extent
      necessary to bring it within the applicable legal requirements.

8.5.  This Agreement may be amended, supplemented, or otherwise modified only by
      means of a written instrument signed by both parties. Any waiver of any
      rights or failure to act in a specific instance shall relate, only to such
      instance and shall not be construed as an agreement to waive any rights or
      fail to act in any other instance, whether or not similar.

8.6.  Neither party shall be responsible to the other for any failure of delay
      in performing any of its obligations under this Agreement or for other
      non-performance hereof if such delay or non-performance is caused by any
      circumstances unavoidable or beyond the reasonable control of a party such
      as, but not limited to, strike, stoppage of labor, lockout or other labor
      trouble, fire, flood, accident, act of God or of government or of the
      public enemy of a Party ("Force Majeure").

      However, the party affected by such Force Majeure shall use its best
      reasonable efforts to avoid, remove or remedy such circumstances. Either
      party temporarily excused from performance hereunder by such circumstances
      shall resume performance with utmost dispatch when such circumstances are
      removed or remedied. Either party claiming Force Majeure as an excuse for
      delay in performance shall give the other party written notice thereof
      without undue delay as a condition of its right to invoke Force Majeure.

8.7.  The provisions of the Secrecy Agreement and the Confidentiality Agreement
      are not affected or modified by this Agreement and shall remain unchanged
      and in force. Notwithstanding the foregoing, the parties acknowledge and
      agree that Memory may contact third party contractors in order to
      establish an ongoing supply of the Compound or for other commercial
      purposes. In connection therewith, Memory may disclose Bayer's
      confidential information to such third party contractors for their use in
      connection therewith. As far as Memory is entitled to grant certain rights
      and licenses to its Affiliates and Third Parties under this Agreement,
      Memory may disclose Bayer's confidential information on a need to know
      basis to such Affiliates and Third Parties. Such Affiliates and Third
      Parties, including third party contractors, will however in any case in
      advance be bound to terms as stringent as provided under the
      Confidentiality Agreement.

8.8.  The parties recognise that disputes as to certain matters may from time to
      time arise during the term of this Agreement which relate to either
      party's rights and/or obligations hereunder. It is the objective of the
      parties to establish a procedure at the level of their executive officers
      (the "Dispute Resolution Procedure") to facilitate the resolution of
      disputes arising under this Agreement in an expedient manner by
      co-operation. To accomplish this objective, the parties agree to follow
      the procedure set forth herein, if and when the parties are unable to
      resolve a dispute within forty-five (45) days of being requested by a
      party to do so. The establishment of the Dispute Resolution Procedure
      shall not be used to override any right specifically given to a party, to
      take action or have final decision-making authority on any topic.

      If the parties are unable to resolve a dispute within forty-five (45) days
      of being requested by a Party to do so, either party may initiate the
      Dispute Resolution Procedure by written notice to the other. The
      respective executive officers designated below or their successors, shall
      then attempt to resolve the dispute by good faith negotiations within
      fifteen (15) days after such notice is received. Said designated officers
      are as follows:

                  For Bayer:  Head of Pharmaceuticals Business Group

                  For Memory: Chief Executive Officer

                     [*] CONFIDENTIAL TREATMENT IS REQUESTED
<PAGE>

      In the event that the designated executive officers are not able to
      resolve a dispute in accordance with the Dispute Resolution Procedure as
      set forth hereunder, either party may at any time after such fifteen (15)
      day period proceed with arbitration as provided hereinafter.

8.9.  All disputes arising in connection with this Agreement shall be finally
      settled under the rules of conciliation and arbitration of the
      International Chamber of Commerce by 3 (three) arbitrators appointed in
      accordance with said rules. The arbitration shall be held in the English
      Language. The arbitrators shall determine which party, or the extent to
      which each party, shall bear the costs and expenses of such arbitration.
      The place of arbitration shall be Paris, France. However, arbitration may
      only be requested for by any party following a period of thirty (30) days
      after the Dispute Resolution Procedure pursuant to Art. 8.8 has failed.
      Within this period of thirty (30) days any party may file a request for
      Conciliation to the Secretariat of the International Court of Arbitration
      of the International Chamber of Commerce to provide the possibility of
      settling such dispute in a Conciliation under the rules of conciliation of
      the International Chamber of Commerce. The other party is not obliged to
      accept such conciliation. The outcome of the Conciliation is not binding
      for any party and does not exclude any party from entering into an
      arbitration.

8.10. In the event that any provision of this Agreement shall, for any reason,
      be held to be invalid or unenforceable in any respect, such invalidity or
      unenforceability shall not affect any other provision hereof, and the
      parties shall negotiate in good faith to modify the Agreement to preserve
      (to the extent possible) their original intent.

8.11. This Agreement constitutes the entire Agreement between the parties with
      respect to the subject matter hereof and supersedes all prior agreements
      or understandings between the parties relating to the subject matter
      hereof.

IN WITNESS WHEREOF, the undersigned have duly executed and delivered this
Agreement as a sealed instrument effective as of the Effective Date.

Montvale, New Jersey
Date:  June 7, 2001
Memory Pharmaceuticals Corporation

   /s/ Joanne M. Leonard
------------------------------           -----------------
Joanne M. Leonard
Chief Financial Officer

Leverkusen, Germany
Date:  June 13, 2001
Bayer AG

   /s/ Dr. Brocks                           /s/ Dr. Kohler
------------------------------           -----------------
Dr. Brocks                               Dr. Kohler
(International Cooperations and          (Patents and Licensing)
Licensing)



                     [*] CONFIDENTIAL TREATMENT IS REQUESTED