AMENDED AND RESTATED STRATEGIC ALLIANCE AGREEMENT

Page

DEFINITIONS

1

GRANTS

8

DILIGENCE

10

PAYMENTS TO MEMORY

13

ROYALTIES

13

PAYMENT, REPORTING, AUDITING

18

GOVERNANCE; STRATEGIC ALLIANCE

20

INTENTIONALLY OMITTED

24

CLINICAL DEVELOPMENT AND REGULATORY MATTERS

24

MANUFACTURE AND SUPPLY

26

COMMERCIALIZATION

26

TRADEMARKS

26

OWNERSHIP OF INTELLECTUAL PROPERTY AND PATENT RIGHTS

26

REPRESENTATIONS AND WARRANTIES

33

CONFIDENTIAL INFORMATION

35

TERM AND TERMINATION

38

ARBITRATION

43

MISCELLANEOUS

43

COMPOUND 3454 DATA AND REPORTS

INTENTIONALLY OMITTED

[*] GUIDELINES FOR COMPOUNDS

END OF PHASE I CRITERIA

WORKPLAN

PAYMENTS WITH RESPECT TO 3454 PRODUCTS

PAYMENTS WITH RESPECT TO MEMORY PRODUCTS

PAYMENTS WITH RESPECT TO COLLABORATION PRODUCTS

ROYALTIES WITH RESPECT TO 3454 PRODUCTS

ROYALTIES WITH RESPECT TO MEMORY PRODUCTS

ROYALTIES WITH RESPECT TO COLLABORATION PRODUCTS

INTENTIONALLY OMITTED

MEMORY PATENT RIGHTS

MEMORY PATENT RIGHTS PRIMARILY APPLICABLE TO MEMORY SCREENING TECHNOLOGY

HEADS OF AGREEMENT FOR CO-PROMOTION OF 3454 PRODUCT

INCLUDED ROCHE COMPOUNDS

1.

Memory has a research and development program relating to the neuronal nicotinic alpha-7 receptor (“ Memory’s Program ”), and owns related intellectual property rights.

2.

Roche has a research and development program relating to the neuronal nicotinic alpha-7 receptor, and owns related intellectual property rights (“ Roche’s Program ” and together with Memory’s Program, the “ Program ”).

3.

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

4.

Memory and Roche previously entered into a Strategic Alliance Agreement dated August 19, 2003 with respect to Memory’s Program (the “ Original Strategic Alliance Agreement ”) and Memory and Roche desire to amend and restate the Original Strategic Alliance Agreement in its entirety.

5.

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 hereby amend and restate the Original Strategic Alliance Agreement in its entirety and agree as follows:

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 16.2.

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.

1.4

“ Change of Control ” means (i) the sale, lease, exchange, transfer or other disposition (including, without limitation, by merger, consolidation or otherwise) of assets constituting all or substantially all of the assets of the company and its subsidiaries, taken as a whole, to a person (or entity) or group of persons (or entities) acting together, (ii) any merger, consolidation or other business combination or refinancing or recapitalization of the company as a result of which the voting securities of the continuing or surviving entity issued in respect of the company’s voting securities outstanding immediately prior to the transaction represent less than [*] % of the total issued and outstanding voting securities of the continuing or surviving entity immediately following such transaction, (iii) any transaction or series of transactions in or as a result of which any “person” (as that term is defined in Sections 3(a)(9) or 13(d) of the Securities Exchange Act of 1934, as amended (the “1934 Act”)) becomes the “beneficial owner” (as that term is defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of securities of the company representing [*] % or more of the total voting power represented by the company’s then outstanding voting securities, and (iv) whether by virtue of an actual or threatened proxy contest (including a consent solicitation) or any merger, reorganization, consolidation or similar transaction persons who are directors of the company immediately prior to such proxy contest or the execution of the agreement pursuant to which such transaction is consummated (other than a director whose initial assumption of office was in connection with a prior actual or threatened proxy contest) cease to constitute [*] of the Board of Directors of the company or any successor entity immediately following such proxy contest or the consummation of such transaction.

1.5

“ Collaboration Compound ” means (a) a compound (or a prodrug or metabolite thereof) other than a Memory Compound or Compound 3454, which is: (i) a nicotinic alpha-7 agonist [*] that is conceived, acquired or Controlled by either Party prior to the date hereof and (ii) has previously been demonstrated by either Party to have Threshold Activity prior to the Effective Date or during the Extended Period [*] or (b) a compound (or a prodrug or metabolite thereof), other than a Memory Compound or Compound

3454, which is: (i) a nicotinic alpha-7 agonist [*] is conceived, acquired or Controlled by either party after the date hereof and prior to the end of the Extended Period and (ii) demonstrated by either Party to have Threshold Activity prior to the end of the Extended Period.

1.6

“ Collaboration Patent Rights ” means all Patent Rights other than Memory Patent Rights that Memory and/or Roche owns or Controls during the Agreement Term that Cover any Collaboration Compound and/or relating to any other invention conceived, acquired or Controlled by either Party during the Extended Period.

1.7

“ Collaboration Product ” means any pharmaceutical product that includes, in whole or as a component, a Collaboration Compound as an active ingredient thereof.

1.8

“ 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.

1.9

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

1.10

“ Compound ” means any Memory Compound, Collaboration Compound or, from and after the date that Roche obtains a License to Compound 3454 pursuant to Section 2.1 hereof, Compound 3454.

1.11

“ Compound 3454 ” means the compound developed by Memory, designated as “compound 3454” [*].

1.12

“ Control ” (including the variations such as “Controls” or “Controlled”) means with respect to a Party and as to any material, data, information or intellectual property right, that such Party owns, co-owns or has a license to such material, data, information or intellectual property right and has the ability to grant access a license, or a sublicense to such material, data, information or intellectual property right to the other Party and its Affiliates and Sublicensees for use or application as provided herein, without violating an agreement with, or infringing any rights of, a Third Party.

1.13

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

1.14

“ Effective Date ” means the date that all conditions subsequent under Section 16.1 have occurred provided that if Section 16.1 is inapplicable, Effective Date means the date on which this Agreement was last executed by Memory or Roche.

1.15

“ End of Phase I ” means the date that all Phase I clinical trials have been completed.

1.16

“ End of Phase IIa ” means the date that all Phase IIa clinical trials have been completed.

1.17

“ Europe ” means the United Kingdom, Germany, Italy, France and Spain.

1.18

“ Event ” means any of the events listed in Section 5.9 hereof and Exhibits B through G hereto with respect to which payments are required to be made by Roche to Memory as provided therein.

1.19

“ Extended Period ” means the period commencing on the Effective Date and ending on the later of (a) the date that is six (6) months after the end of the Strategic Alliance Term and (b) March 31, 2008.

1.20

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

1.21

“ 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.

1.22

“ Included Roche Compounds ” means the compounds listed on Exhibit L [*] .

1.23

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

1.24

“ Indication ” means a Neurological Indication, a Psychiatric Indication or an Other Indication.

1.25

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

1.26

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

1.27

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

1.28

“ Invention ” means an invention that is made in the conduct of the Strategic Alliance.

1.29

“ 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.

1.30

“ JSC ” means the committee organized and operating as provided in Article 7.

1.31