OFFER OF EMPLOYMENT

May 3, 2005

Mr. James R. Sulat

Dear Jim:

We are pleased to inform you that both the Board of Directors (the “Board”) and management team of Memory Pharmaceuticals Corp. (the “Company”) are impressed with your experience and accomplishments, and would like to extend an offer to you to join the Company as President and Chief Executive Officer. We look forward to you joining our team, and are confident that you will contribute significantly to the value of our organization. We are therefore pleased to provide you with the terms of your anticipated employment by the Company.

1.  Position . Your position will be President and Chief Executive Officer, based out of the Company’s offices currently located in Montvale, New Jersey, and will report directly to the Company’s Chairman and the Board. You will be elected to the Board as soon as reasonably practicable following your Start Date (as defined below).

As a full-time employee of the Company, you will be expected to devote your full business time and energies to the business and affairs of the Company. You agree not to engage in any activities outside of the scope of your employment that would detract from, or interfere with, the fulfillment of your responsibilities or duties under this letter agreement. You agree that you will not serve as a director or the equivalent position of any company or entity, and will not render services of a business, professional or commercial nature to any other person or firm, except for not-for-profit entities, without the prior written consent of the Board.

Your performance will be reviewed formally after six (6) months of employment and annually thereafter at the end of each calendar year. You acknowledge that a performance review does not guarantee a salary increase.

2.  Starting Date/ Nature of Relationship . It is expected that your employment will start on May 6, 2005 or such other date as we may mutually agree (the “Start Date”). No provision of this letter agreement shall be construed to create an express or implied employment contract for a specific period of time. Either you or the Company may terminate the employment relationship at any time and for any reason, by giving at least thirty (30) days’ prior written notice to the other party. The Company in its sole discretion may elect to terminate your employment immediately or during such thirty (30) day notice period, but in this event you will continue to receive an amount equal to your base salary, less applicable deductions, that you otherwise would have received during the balance of such thirty (30) day notice period.

3. Compensation .

(a) Your initial base salary will be at the bi-weekly rate of $15,192.31, less applicable deductions (annualized at $395,000).

(b) Effective as of the Start Date, you will receive stock options to purchase 500,000 shares of the Company’s Common Stock, which will be in the form of incentive stock options, to the extent permissible under applicable law, and the balance will be in the form of non-qualified stock options. Such stock options (i) will entitle you to purchase the Company’s Common Stock at the closing price per share of the Company’s Common Stock on the NASDAQ on the option grant date, as determined by the Board, in accordance with the Company’s 2004 Stock Incentive Plan, as amended from time to time (the “Incentive Plan”) and (ii) shall vest in quarterly increments over a period of four (4) years as described in the standard form of Stock Option Agreement, which you agree to execute and deliver to the Company on or before the Start Date.

(c) You will also be entitled to a subsequent grant of stock options not later than January 31, 2006, which will be in the form of incentive stock options to the extent permissible under applicable law, and the balance will be in the form of non-qualified stock options. Such stock options (i) will entitle you to purchase the Company’s Common Stock at the closing price per share of the Company’s Common Stock on the NASDAQ on the option grant date, as determined by the Board, in accordance with the Incentive Plan and (ii) shall vest in quarterly increments over a period of four (4) years as described in the standard form of Stock Option Agreement, which you agree to execute and deliver to the Company on or before the option grant date. Such subsequent grant of stock options shall be made as follows:

(i) if, at the Company’s 2005 Annual Meeting, shareholders of the Company approve (x) an increase in the number of shares of the Company’s Common Stock available for options to be granted under the Incentive Plan and (y) a waiver of Section 4.1(d) of the Incentive Plan (collectively, the “Incentive Plan Proposal”), then you will receive stock options to purchase 525,000 shares of the Company’s Common Stock (the “Subsequent Grant”), which shares shall be granted on the next day following registration with the SEC of the shares of the Common Stock underlying the Subsequent Grant; or

(ii) if, the shareholders of the Company do not approve the Incentive Plan Proposal, then you will receive stock options to purchase 500,000 shares of the Company’s Common Stock (the “Reduced Subsequent Grant”), which shares shall be granted on the next day following registration with the SEC of the shares of the Common Stock underlying the Reduced Subsequent Grant, which shall occur no later than January 31, 2006.

(d) You will be eligible to receive an annual bonus dependent on the performance of the Company and your individual performance, subject to the discretion of the Board. Your target bonus will be equal to thirty-five percent (35%) of your base salary, assuming the achievement of such Company and individual performance objectives. The actual amount paid, if any, shall be determined by the Board in its sole discretion.

(e) Upon termination of your employment for any reason, the Company will pay you, within two (2) weeks of such termination, your current base salary earned through the termination date, plus accrued vacation, if any, and other benefits or payments, if any, to which you are entitled. In the event your employment is terminated by the Company without “Cause” (as defined below) or by you for “Good Reason” (as defined below), then the Company will continue for a period of twelve (12) months to (i) pay you your bi-weekly rate in effect at the time of termination, less applicable deductions, (ii) provide and pay the Company’s portion of your medical and dental insurance, and (iii) pay you in monthly installments one-twelfth (1/12) of your average annual bonuses for the previous three (3) calendar years (or such shorter period if you have not been employed for three (3) calendar years). In addition, if your employment is terminated by the Company without Cause or by you for Good Reason (other than the termination of your employment as described in the immediately succeeding sentence), you will be entitled to accelerated vesting of twenty-five percent (25%) of your unvested stock options as of the date of such termination of your employment. If within three (3) months prior to, or within eighteen (18) months after, the occurrence of a Change of Control (as defined below), your employment is either terminated by the Company without Cause or you terminate your employment with the Company upon the occurrence of any of the events described in Section 3(g) (ii) – (v) below, your unvested stock options will become fully vested. Upon the occurrence of the accelerated vesting of your stock options as described in the preceding two (2) sentences, (i) with respect to your incentive stock options, such options must be exercised by you within ninety (90) days after the termination of your employment and (ii) with respect to your non-qualified stock options, such options must be exercised by you on or before the date that is the later to occur of (i) ninety (90) days after the date of termination of your employment or (ii) January 15 ^th of the calendar year immediately succeeding the date of termination of your employment. The Company will not be obligated to continue any such payments to you or accelerate vesting of your stock options under this paragraph 3(e) in the event you materially breach the terms of this letter agreement or the Confidentiality Agreement (as defined below). Notwithstanding any termination of your employment for any reason (with or without Cause or for Good Reason), you will continue to be bound by the provisions of the Confidentiality Agreement.

All payments and benefits provided pursuant to this paragraph 3(e) shall be conditioned upon your execution and non-revocation of a general release substantially in the form attached hereto as Exhibit A at the time of termination. Your refusal to execute a general release shall constitute a waiver by you of any and all benefits referenced in this paragraph 3(e). The Company will not be obligated to continue any such payments to you under this paragraph 3(e) in the event you materially breach the terms of this letter agreement or the Confidentiality Agreement.

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

(g) For the purpose of this paragraph 3, the termination of your employment for “Good Reason” shall mean the termination by you of your employment with the Company (i) within eighteen (18) months after a “Change in Control” (as defined below) or the sale of a majority of the assets, obligations, or business of the Company (whether by merger, sale of stock or otherwise), (ii) within three (3) months after a material diminution in your responsibilities (provided that such diminution is not in connection with the termination of your employment for Cause), (iii) within three (3) months after you no longer report to the Board or cease to be a member of the Board (other than as a result of any act or circumstance relating to your inability, failure or refusal to serve as a member of the Board), (iv) within three (3) months of your principal work location changing to be more than fifty (50) miles from the Company’s principal offices or (v) within three (3) months after the reduction by the Company of the amount of your base salary, unless such reduction is pursuant to a plan and as a consequence the base salaries of the Company’s executives are reduced generally. The Company shall notify you, within sixty (60) days of receipt of your notice of intent to terminate your employment for Good Reason if the Company disagrees with your intent to terminate under this paragraph. For the purposes of this letter agreement, “Change of Control” shall be deemed to have occurred if the Company is consolidated with or acquired by another entity in a merger, sale of all or substantially all of the Company’s assets or shares of stock or otherwise (excluding (A) transactions solely for the purpose of reincorporating the Company in a different jurisdiction or recapitalizing or reclassifying the Company’s stock, or (B) any merger or consolidation in which the shareholders of the Company immediately prior to such merger or consolidation continue to own at least a majority of the outstanding voting securities of the Company or the surviving entity after such merger of consolidation).

4.  Benefits . You will be entitled as an employee of the Company to receive such benefits as are generally provided its employees and executives and for which you are eligible in accordance with Company policy as in effect from time to time. The Company retains the right to change, add or cease any particular benefit relating to its employees and executives generally. At this time, the Company is offering a benefit program, consisting of medical, dental, life and short/long term disability insurance, as well as a 401(k) retirement plan and flexible spending plan. You will be eligible for eleven (11) paid holidays, four (4) floating holidays and four (4) weeks paid vacation per year, which will be pro-rated for the 2005 calendar year based on the Start Date. You will accrue additional vacation days in accordance with Company policy.

5.  Indemnification . The Company will indemnify you in connection with any legal proceedings related thereto, including after your employment with the Company.

6.  Confidentiality . The Company considers the protection of its confidential information and proprietary materials to be very important. Therefore, as a condition of your employment, you will be required to execute and deliver to the Company, on or before the Start Date, the Confidentiality and Noncompetition Agreement substantially in the form of Exhibit B attached hereto (the “Confidentiality Agreement”).

7. General .

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

(b) This letter agreement shall be subject to and contingent upon the satisfactory results of the Company’s due diligence, such as a medical examination, satisfactory reference, background and education verification.

(c) This letter agreement and the Company’s obligations hereunder shall be subject to review and approval by the Board and the Compensation Committee thereof.

(d) This letter agreement shall be governed by the law of the State of New Jersey. In the event of any legal proceedings relating to this letter agreement and/or the subject matter thereof, the parties consent to the exclusive jurisdiction of the courts located in the State of New Jersey. THE PARTIES HEREBY EXPRESSLY WAIVE THEIR RIGHT TO HAVE A JURY TRIAL.

You may accept this offer of employment and the terms thereof by signing the enclosed additional copy of this letter agreement and the Confidentiality Agreement and the Stock Option Agreement, which execution will evidence your agreement with the terms set forth herein and therein, and returning them to the Company.

This offer of employment will expire on May 5, 2005, unless accepted by you prior to such date. We look forward to you joining our team, and we believe that your skills will compliment those of our existing management team, and that you will make a significant contribution to Memory’s growth. We look forward to your prompt response to this offer letter.

Sincerely,
MEMORY PHARMACEUTICALS CORP.

Date: May 3, 2005

1

EXHIBIT A

FORM OF GENERAL RELEASE OF CLAIMS

GENERAL RELEASE OF CLAIMS

For and in consideration of the payments and other benefits described in the letter agreement dated as of May 3 2005 (the “Letter Agreement”) by and between Memory Pharmaceuticals Corp. (the “Company”), and James R. Sulat (“Employee”) and for other good and valuable consideration, Employee hereby releases the Company and its respective divisions, operating companies, affiliates, subsidiaries, parents, branches, predecessors, successors, assigns, officers, directors, trustees, employees, agents, shareholders, administrators, representatives, attorneys, insurers and fiduciaries, past, present and future (the “Released Parties”), from any and all claims of any kind arising out of or related to Employee’s employment with the Company, Employee’s separation from employment with the Company or derivative of Employee’s employment, which Employee now has or may have against the Released Parties, whether known or unknown to Employee, by reason of facts which have occurred on or prior to the date that Employee has signed this General Release of Claims. Such released claims include, without limitation, any alleged violation of the Age Discrimination in Employment Act, as amended, the Older Worker Benefits Protection Act; Title VII of the Civil Rights of 1964, as amended; Sections 1981 through 1988 of Title 42 of the United States Code; the Civil Rights Act of 1991; the Equal Pay Act; the Americans with Disabilities Act; the Rehabilitation Act; the Family and Medical Leave Act; the Fair Labor Standards Act; the Employee Retirement Income Security Act of 1974, as amended; the Worker Adjustment and Retraining Notification Act; the National Labor Relations Act; the Fair Credit Reporting Act; the Occupational Safety and Health Act; the Uniformed Services Employment and Reemployment Act; the Employee Polygraph Protection Act; the Immigration Reform Control Act; the retaliation provisi