<PAGE>
 
                  JOINT DEVELOPMENT AND OPERATING AGREEMENT 

  

                             ELAN CORPORATION, PLC

                      
                                      AND

                             
                              CYTOGEN CORPORATION

                              
                                      AND

                              
                              TARGON CORPORATION


                              SEPTEMBER 26, 1996
<PAGE>
 
     THIS JOINT DEVELOPMENT AND OPERATING AGREEMENT is dated September 26, 1996 
among CYTOGEN CORPORATION, a Delaware corporation, having its principal place of
business at 600 College Road East, Princeton, New Jersey 08540 (together with 
its Subsidiaries and Affiliates (each as defined below), " Cytogen"); ELAN 
CORPORATION, PLC, a public limited company incorporated under the laws of 
Ireland, having its principal place of business at Monksland, Athlone, County 
Westmeath, Ireland (together with its Subsidiaries and Affiliates, "ELAN"); and 
TARGON CORPORATION, a Delaware corporation, having its principal place of 
business at 600 College Road East, Princeton, New Jersey 08540 (the "Company"). 
Capitalized terms not otherwise defined herein are defined in Section 1.1 
hereof.

                                   RECITALS:

          A.  The Company was formed on September 25, 1996 for the purpose of 
conducting research, development and commercialization of the ATS Compounds and
the Cytogen Compounds related activities. The Company has issued 1,000,000 
shares of its Common Stock to Cytogen on the date hereof, constituting 100% of 
the Company's issued and outstanding share capital (other than the Management 
Shares). In connection with the closing of the Securities Purchase Agreement, 
Cytogen has granted to Elan International Services, Ltd. ("EIS"), a Bermuda 
corporation and wholly-owned subsidiary of Elan Corporation, plc, the Elan 
Exchange Right, as provided in the Securities Purchase Agreement. Pursuant to 
the Elan Exchange Right, the Company has granted to EIS the option to exchange 
all of the issued and outstanding shares of the Cytogen's Series A preferred 
Stock initially for 500,000 shares of Common Stock of the Company, initially
representing 50% of the share capital of the Company (other than Management
Shares), subject to adjustment as described in the Securities Purchase
Agreement.

          B.  Cytogen and Elan have agreed to cooperate in the establishment and
management of the Company for development of specific pharmaceutical compounds 
(biological and otherwise) incorporating the technologies developed by the 
Company, Cytogen, Elan and/or Advanced Therapeutic Systems, Ltd., a Bermuda 
corporation ("ATS"), and their sale and supply, and desire that such activities
be undertaken through the Company, and for this purpose Cytogen and EIS have
agreed to participate as holders of the Common Stock of the Company (in the case
of EIS, through exercise, in EIS's discretion, of the Elan Exchange Right), for
the purposes and on the terms set out in this Agreement. In connection with the
forgoing, the Company shall acquire certain Technology and, in connection
therewith, shall agree to make certain payments to Cytogen, Elan and ATS.

          C.  The Company and Cytogen and Elan desire to set forth in the 
Agreement certain provisions relating to (1) the research, development and 
commercialization work described above and (2) the operations of the business of
the Company.

<PAGE>
 
                                  AGREEMENT:

                 ACCORDINGLY, IT IS HEREBY AGREED AS FOLLOWS:


                                   ARTICLE I


                                  DEFINITIONS

     1.1.  In this Agreement, the following words and meanings shall, where not 
inconsistent with the context, have the following meanings respectively.

           "Additional Compounds" means any compound or formulation now or
hereafter owned by the Company or in which the Company has any development,
marketing or similar rights, other than the Compounds utilizing the Cytogen
Technology or the Elan Technology.

           "Affiliate" means any Person other than the Company controlling,
controlled or under the common control of Elan or Cytogen, as the case may be.
For the purpose of this definition, "control" shall mean direct or indirect
ownership of 40% or more of the stock or shares entitled to vote for the
election of directors or the ability, by contract or agreement or otherwise, to
direct the management and affairs of a Person.

           "Agreed" means agreed by all Parties and confirmed in writing.

           "Agreement" means this agreement (which expression shall be deemed to
include the Recitals, the Schedules and Appendices hereto).

           "Articles" means the certificate or articles of incorporation and 
by-laws of the Company in the form attached as Exhibit D hereto.
                                               ---------

           "ATS Compounds" means [INFORMATION OMITTED AND FILED SEPARATELY WITH
THE COMMISSION UNDER RULE 24b-2.]

           "ATS Transfer Agreement" means the agreement dated the date hereof
between ATS and the Company pursuant to which ATS has transferred the ATS
Compounds and the related Intellectual Property to the Company.

           "Business" means the business of the Company as described in Article
II and subject to the provisions of Article IV, such other business as the
Parties may agree from time to time in writing should be carried on by the
Company.

           "Business Plan" means the Company's business plan in the form
attached hereto as Exhibit A or in such other form as shall be agreed to from
                   --------- 
time to time in writing by Cytogen and Elan, in conjunction with the Research
and Development Programs, for the conduct of the Business of the Company for
each Financial Year for the duration of this Agreement, which shall include, in
particular, details of the planned research and development expenses to be

                                      -2-
 








<PAGE>
 
incurred in that Financial Year, which of the Shareholders shall be responsible 
for the relevant research and development expenditure, and how such expenses 
shall be funded.

          "Common Stock" means the common stock, $01 par value per share, of the
Company.

          "Compounds" means the ATS Compounds and the Cytogen Compounds,
together with any Additional Compounds hereafter acquired by the Company from
Cytogen, ATS, Elan or any other Person, or developed by the Company.

          "Cytogen Compounds" means the [INFORMATION OMITTED AND FILED 
SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.]

          "Cytogen Directors" means the Directors designated by Cytogen pursuant
to the terms hereof and holding office from time to time.

          "Cytogen Technology" means any intellectual property, know-how, trade
secrets, patents or patent rights or other rights relating to the Cytogen
Compounds owned by Cytogen and transferred to the Company pursuant to the
Cytogen Transfer Agreement.

          "Cytogen Transfer Agreement" means the agreement dated the date hereof
between Cytogen and the Company pursuant to which Cytogen has transferred the
Cytogen Compounds and the related Intellectual Property to the Company.

          "Directors" means the Cytogen Directors and the Elan Directors from
time to time and any other Director agreed to by the Cytogen Directors and the
Elan Directors from time to time.

          "Elan Directors" means the Directors designated by Elan pursuant to
the terms hereof and holding office from time to time.

          "Elan Exchange Right" means the right granted by Cytogen to EIS, as
set forth in the Securities Purchase Agreement, to acquire shares of Common
Stock of the Company from Cytogen, as provided for in the Securities Purchased
Agreement.

          "Elan Technology" means any intellectual property, know-how, trade
secrets, patents or patent rights or other rights relating to the ATS Compounds
owned by Elan or ATS and transferred to the Company pursuant to the ATS Transfer
Agreement.

          "FDA" means the U.S. Food and Drug Administration or any successor U.S
federal agency.

          "Field" means the [INFORMATION OMITTED AND FILED SEPARATELY WITH THE
COMMISSION UNDER RULE 24b-2.]

          "Financial Year" means initially, September 1, 1996 through December
31, 1996 and thereafter each year commencing on January 1 and expiring on
December 31 of each year.

                                      -3-
<PAGE>
 
           "Independent Third Party" means any Person other than Elan, Cytogen,
ATS or the Company, or any Affiliate of any such Person.

           "INDA" means any investigational new product application in relation
to a Product or Compound.

           "Loan" means any loan(s) advanced from time to time by any of the 
Shareholders to the Company.

           "Management Shares" means Shares issued or issuable to directors,
officers or other Persons pursuant to such plans, options, warrants,
arrangements and/or understandings as shall be satisfactory to the Shareholders.

           "NDA" means a new drug application.

           "Net Sales" means the [INFORMATION OMITTED AND FILED SEPARATELY WITH 
THE COMMISSION UNDER RULE 24b-2]

           "Party" means Elan, Cytogen or the Company, as the case may be; 
"Parties" means more than one Party.

           "Person" means an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint venture, or
other entity of whatever nature.

           "PLA" means Product License Application.

           "Prime" means the prime or base rate established from time to time by
Morgan Guaranty Trust Company in New York.

           "Product(s)" means depending on the context one or more formulations 
of the Compounds or based, in whole or in part, on the Technology and developed
by or on behalf of the Company.

           "Research and Development Programs" mean(s), depending on the
context, one or more programs of research and development work being conducted
or to be conducted by Cytogen and/or Elan for and on behalf of the Company which
have been devised by the Research Committee and approved by the Management
Committee.

           "Securities Purchase Agreement" means the Securities Purchase 
Agreement dated as of the date hereof between Cytogen and EIS, pursuant to which
Cytogen has agreed to issue to EIS and EIS has agreed to purchase from Cytogen
the securities set forth therein, including,

                                      -4-
<PAGE>
 
without limitation, the Series A Preferred Stock of Cytogen, in connection with 
which Cytogen has granted to EIS the Elan Exchange Right.

           "Shares" means any outstanding shares of Common Stock.

           "Shareholder" means Cytogen or Elan for so long as such Party or its 
Affiliates owns at least 10% of the aggregate shares or, in the case Elan, has 
the right to acquire such Shares in connection with the Elan Exchange Right; 
"Shareholders" means both of Cytogen and Elan together.

           "Subsidiary" of any Person means any other Person at least 50% of the
capital stock is owned by such first Person.

           "Supply Agreements" means one or more Manufacture and Supply 
Agreements to be entered into by Elan and/or Cytogen, on the one hand Company, 
on the other hand, pursuant to the terms hereof to facilitate commercial 
development and exploitation of Compounds or Products.

           "Technology" means, collectively, the Cytogen Technology, the Elan 
Technology and any intellectual property, know-how, trade secrets, patents or 
patent rights or other rights relating to the Compounds and, developed or 
acquired by or on behalf of the Company.

           "Territory" means all of the countries of the world.

           "Transfer Agreements" means the ATS Transfer Agreement and the
Cytogen Transfer Agreement.

     1.2.  Words importing the singular shall include the plural and vice versa.

     1.3.  Unless the context otherwise requires, reference to an article, 
paragraph, provision, clause or schedule is an article, paragraph, provision, 
clause or schedule of or to this Agreement.

     1.4.  Reference to a statute or statutory provision includes a reference to
it as from time to time  amended, extended or re-enacted.

     1.5.  The headings in this Agreement are inserted for convenience only and
do not affect its construction.


                                  ARTICLE II

                            THE COMPANY'S BUSINESS 

     2.1.  The primary object of the Company and any Subsidiaries is to carry on
the business of the Field in the Territory and to achieve the objectives set out
in this Agreement.

                                      -5-
<PAGE>
 
     2.2.   On the date hereof, as provided in Article V hereof, (a) Cytogen is
paying to the Company $20 million (the "Initial Capital"), in consideration of
all of the Shares. The Company hereby agrees that, unless consented to by the
Shareholders, it shall not issue any Shares other than Management Shares. Each
of the Shareholders agrees that it shall use its best efforts to cause the
Company to be bound by the provisions of this Agreement. Except as the
Shareholders may otherwise agree in writing and except as may be provided in
this Agreement, the Business Plan or any Supply Agreements, the Shareholders
shall exercise their powers in relation to the Company so as to ensure that the
business is carried on in a proper and prudent manner.

     2.3.   Each of Cytogen and Elan shall use all reasonable and proper means
at its disposal and within its power to maintain, extend and improve the
Business of the Company, within the limits of this Agreement, and to further the
reputation and interests of the Company.

     2.4.   The central management and control of the Company shall be exercised
at the principal place of business of the Company and shall be vested in the
Directors and such persons as they may delegate the exercise of their powers in
accordance with this Agreement. The Shareholders shall use their best endeavors
to ensure that the Company is treated as resident for taxation in such
jurisdiction as the Directors shall determine and that the right to use of the
Technology shall, to the maximum extent practicable, be owned and held by the 
Company, or its Affiliate, or its designee.

     2.5.   Each of the Shareholders hereby confirms that in the event of a
dispute arising between the Company and a Shareholder, the Directors appointed
by that Shareholder shall consent to any action or proceedings taken or
initiated by the Company against that Shareholder to resolve the dispute.


                                  ARTICLE III

                            ARTICLES OF THE COMPANY

     3.1.   In the event of any ambiguity or conflict arising between the terms
of this Agreement and those of the Company's Articles, the terms of this
Agreement shall prevail as between the Shareholders.

     3.2.   Subject to Section 3.1, each of the Parties hereto undertakes with 
each of the other Parties fully and promptly to observe and comply with the 
provisions hereof to the intent and effect that each and every provision thereof
shall be enforceable by the Parties hereto.


                                  ARTICLE IV
 
                                  WARRANTIES

     4.1.   The Company warrants to the Shareholders that the Recitals are true
and correct in every respect insofar as they relate the Company, and that prior
to the date hereof the

                                      -6-
<PAGE>
 
Company has neither traded nor incurred any liabilities or obligations of any 
nature whatsoever other than those imposed on the Company by virtue of its 
incorporation and this Agreement.

     4.2.   Elan and Cytogen each warrants and undertakes to the other that the 
Shares to be acquired by it in the Company, as provided herein, will be acquired
for its own absolute beneficial ownership and not on behalf of any other Person.

     4.3.   Elan and Cytogen each warrants and undertakes to the other (with 
respect to Elan Corporation, plc and Cytogen Corporation, respectively) that 
except as disclosed in writing to each other prior to the execution of this 
Agreement:

            (a) it is duly incorporated under the laws of its place of 
incorporation;

            (b) it has full authority and capacity to enter into and perform its
obligations under this Agreement (having obtained all requisite corporate and
governmental approvals);

            (c) it is not engaged in any litigation or arbitration, or in any 
dispute or controversy reasonably likely to lead to litigation, arbitration or 
any other proceeding, which would materially affect the validity of this 
Agreement, such Party's fulfillment of its respective obligations under this 
Agreement or the business of the Company as contemplated herein; and

            (d) that this Agreement has been fully authorized, executed and 
delivered by it and that it has full legal right, power and authority to enter 
into and perform this Agreement, which constitutes a valid and binding agreement
between the Parties.

                                   ARTICLE V

                                    CLOSING

     5.1.   The closing of the transactions contemplated hereby shall occur on
the date hereof, simultaneously with the execution and delivery of this
Agreement and the Securities Purchase Agreement, at the offices of counsel to
Elan in New York, New York, or at such other place as the Shareholders shall
agree upon.

     5.2.   At the closing, each of the parties hereto shall take or (to the 
extent that the same is within such Person's powers) cause to be taken the 
following steps at Directors' and Shareholder's meetings of the Company, or such
other meetings or closing, as appropriate:

            (a) the adoption by the Company of the Articles in the form attached
hereto as Exhibit D and the designation and appointment of the initial 
          ---------
Directors;

            (b) the consummation of the transactions contemplated by the 
Securities Purchase Agreement, including without limitation, the issuance by 
Cytogen to EIS of the common stock and Series A Preferred Stock of Cytogen 
issuable to EIS thereunder;

                                      -7-
<PAGE>
 
            (c) the issuance of the Shares to Cytogen and the appointment of the
initial Directors of the Company, as agreed to on the date hereof by Cytogen and
Elan;

            (d) the payment by Cytogen to the Company of the Initial Capital;

            (e) the execution by the Company, on the one hand, and ATS, Cytogen 
and EPRC, on the other hand, of the Transfer Agreements; and

            (f) the delivery of such additional documents and instruments, and 
opinions of counsel and other Persons, as shall be customary in the
circumstances and reasonably requested by each of the Parties.


                                  ARTICLE VI

                                 CONTRIBUTIONS

     6.1    The Shareholders and the Company acknowledge and agree that the 
financial requirements of the Company will be borne by the Company, initially 
from the Initial Capital or such other basis as may be agreed by the 
Shareholders, in their sole discretion, whether by way of providing cash or 
technical know-how.

     6.2    Cytogen has contributed to the Company on the date hereof the 
Cytogen Compounds and the Cytogen Technology (pursuant to the Cytogen Transfer 
Agreement), and ATS has contributed to the Company on the date hereof the Elan 
Technology and ATS Compounds (pursuant to the ATS Transfer Agreement).

     6.3.   The Shareholders agree that any further financing of the Company 
required in respect of any research and development expenditure to be incurred 
by the Company in excess of the contributions pursuant to Section 6.2 shall be 
borne as the Shareholders may hereafter agree; it being understood that neither 
Cytogen nor Elan shall have any obligation to contribute additional funds absent
its specific agreement in respect thereof.

                                  ARTICLE VII

             MANAGEMENT AND DIRECTION OF RESEARCH AND DEVELOPMENT

     7.1    The Company's Board of Directors initially shall consist of (a)
three Directors appointed by Cytogen, (b) three Directors appointed by Elan, and
(c) one independent Director (i.e., a Person who is not affiliated with either
Cytogen or Elan). Such provisions shall remain in effect until the earlier to
occur of the termination of this Agreement and the initial public offering of
equity securities of the Company in a registered offering under the Securities
Act of 1933 and the registration of the Common Stock under the Securities Act of
1934 (an "IPO"); provided, that at such time that Elan or Cytogen owns, directly
or indirectly, fewer than 20% of

                                      -8-
<PAGE>
 
the Shares, such Shareholder's (but not the other Shareholder's) right to 
appoint Directors shall expire.

     7.2. The Directors shall appoint a management committee (the "Management 
Committee") to exercise certain of their functions in accordance with their 
right to delegate such powers pursuant to the Articles.  The Management 
Committee will consist of two individuals, one of whom initially shall be 
nominated by Elan and one of whom initially shall be nominated by Cytogen.  Each
of the Shareholders shall be entitled to remove any of its nominees to the 
Management Committee and appoint a replacement in place of any nominee so 
removed.

     7.3. The Management Committee shall appoint a research committee (the
"Research Committee"). The Research Committee shall consist of two individuals,
one of whom initially shall be nominated by Elan and one of whom initially shall
be nominated by Cytogen. Each of the Shareholders shall be entitled to remove
its nominee to the Research Committee and appoint a replacement in place of any
nominee so removed. The number of individuals on the Research Committee shall be
altered if agreed to by the Management Committee.

     7.4. The Management Committee shall be responsible for, among other
things, devising implementing and reviewing strategy for the Business and, in 
particular, devising the Company's strategy for research and development in 
relation to the Field and to monitor and supervise the implementation of the 
Company's strategy for research and development.

     7.5. The Management Committee shall report all significant developments to 
the Directors and the Shareholders on the occurrence thereof and, in addition, 
shall report at quarterly intervals to the Directors and the Shareholders.  In 
the event of an irreconcilable dispute or deadlock among the members of the 
Management Committee, the provisions of Article XXIII shall apply.

     7.6. The Research Committee shall be responsible for the implementation of 
the Research and Development Programs for the Company and shall meet at regular 
intervals to monitor the progress of the research and development programs and 
to report on its progress to the Management Committee.  In the event of any 
dispute among the Research Committee, the Research Committee shall refer such 
dispute to the Management Committee whose decision on the dispute shall be 
binding on the Research Committee.  If the Management Committee fail to reach a 
decision, the provisions of Article XXIII shall apply.

     7.7. The Company shall, in the first instance, solicit Cytogen or Elan to 
provide such research and development services as may reasonably be required by
the Company, upon such terms and conditions as may be subsequently agreed by the
Company, on the one hand, and Cytogen or Elan, on the other hand.

     7.8. The Company shall pay Elan and Cytogen for any research and
development work carried out by them on behalf of the Company, as provided in
the Business Plan and otherwise agreed to by the Management Committee, on the
one hand, and Cytogen or Elan, on the other hand, subject to the proper vouching
of research and development work and expenses. The

                                      -9-












<PAGE>
 
payments by the Company to Elan and Cytogen shall be calculated [INFORMATION
OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.]

     7.9.   In consideration of the patent rights granted, or which hereafter
may be granted, by the Parties regarding the work to be completed hereunder in
connection with the development of the Compounds and the Products, the Company
shall pay to Cytogen and Elan the following amounts from time to time.
[INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.]

            In the event that the provisions of this Section 7.9 are 
applicable, the Company shall grant to Cytogen and Elan such audit and review
rights related to the calculation payments and challenging of such applicable
amounts as shall be reasonably customary in the pharmaceutical industry at such
time, which rights shall be set forth in a written instrument signed by the 
Company.
 
     7.10.  In no event shall Cytogen or Elan have any further or additional
liability or obligation to the Company, other than as set forth in this 
Agreement, by virtue of the payments provided for under Section 7.9.

                                     -10-



  


<PAGE>
 
                                   ARTICLE 

                           PROPERTY OWNERSHIP RIGHTS

     8.1.   The Company shall own the legal and equitable title to the
Technology, the ATS Compounds and the Cytogen Compounds. Cytogen and Elan shall
have the sole right to license the Technology outside the Field Pursuant to and
in accordance with the provisions of this Article VIII and Section 11.2.

     8.2.   In the event that Cytogen or Elan wish to exploit the Technology 
outside the Field, such Shareholder or Shareholders shall provide written 
notice to such effect to the Company. The Company shall thereafter negotiate in 
good faith with each of the Shareholders as to the terms and conditions of a 
license or licenses in respect thereof, which shall be on then customary terms 
and conditions. Such license or licenses may be in the form of non-exclusive 
licenses to each of Cytogen and Elan or appropriate cross-licenses, or on such 
other terms and conditions as the Parties shall otherwise mutually agree; it 
being understood that such work which is directly related to or in furtherance
of development of the Compounds, Products or Technology shall be the property of
the Company. Such licenses may include non-exclusive license to each Cytogen and
Elan or appropriate cross-licenses among the Parties. If the Parties are unable
to agree upon the terms of any such license, such disagreement shall be referred
to an Independent Expert, as provided in Article XXII.

                                  ARTICLE IX

                                 PATENT RIGHTS

     9.1.   The Company shall have the right to obtain and prosecute patents and
patent rights relating to the Compounds, Products and Technologies, whether 
within or outside the Field; rights outside the Field shall be governed by 
Article VIII.

                                   ARTICLE X

                                  EQUIPMENT

     10.1.  Any equipment or other assets purchased by Cytogen and/or Elan 
which is funded by the Company shall belong to the Company. The Parties shall 
appropriate arrangements as regards marking of such equipment and assets, 
insurance and bailment provisions.

                                     -11-
<PAGE>
 
                                  ARTICLE XI

                           EXPLOITATION OF PRODUCTS

     11.1.  The Company will have an exclusive entitlement to develop and/or 
exploit Products in the Field. In order to commercialize the Products the 
Company shall obtain marketing approval in such countries in the Territory as is
determined by the Business Plan. It may be necessary to file an INDA and perform
clinical testing in more than one country, and the Shareholders shall reasonably
agree on such testing.

     11.2.  In the event that the Company decides that it does not wish to 
pursue the research and development and/or commercialization of a Product, 
and either Elan or Cytogen wishes to pursue such research and development and/or
commercialization, the Company shall grant a license agreement in respect of
such Product to Elan and/or Cytogen, as the case may be; provided, that such
Product does not or will not compete in any material respect with any Product or
proposed Product. The Company and the relevant Shareholder shall negotiate in
good faith the terms of such a license agreement, which shall be on then-
commercially customary and reasonable terms and conditions.

     11.3.  The strategy for the commercialization of the Products shall be 
determined by the Management Committee, subject to the supervision of the Board 
of Directors.

                                   ARTICLE XII

                       TECHNICAL SERVICES AND ASSISTANCE

     12.1.  Whenever commercially and technically feasible, the Company shall 
offer to contract with Cytogen or Elan as the case may be to perform such other 
services as the Company may require. In determining which party should provide 
such services, the Management Committee shall in good faith take into account 
the respective infrastructure and experience of Elan and Cytogen.

     12.2.  The Company shall if appropriate conclude an administrative support 
agreement with Elan and/or Cytogen on such terms as the parties thereto shall in
good faith negotiate. The management services required shall include one or more
of the following management services which shall be requested by the Company:

            (a) accounting, financial and other services;
            
            (b) tax services;

            (c) insurance services;

            (d) human resources services;

                                     -12-
<PAGE>
 
            (e) legal and company secretarial services;

            (f) patent and related intellectual property services; and

            (g) all such other services consistent with and of the same type as 
those services to be provided pursuant to this Agreement, as may be required

            The foregoing list of services shall not be deemed exhaustive and 
may be changed from time to time upon written request by the Company.

            If Elan or Cytogen so requires, in good faith, Cytogen or Elan shall
receive, at times and for periods mutually acceptable to the parties, employees
of the other party (such employees to be acceptable to the receiving party in
the matter of qualification and competence) for instruction in respect of the
Elan Technology or the Cytogen Technology as the case may be as is necessary to
further the Research and Development Programs.

            The employees received by Elan or Cytogen, as the case may be, shall
be subject to obligations of confidentiality no stringent than those set out 
herein and such employees shall observe the rules, regulations and systems 
adopted by the party receiving the said employees for its own employees or 
visitors.

                                 ARTICLE XIII

                      MANUFACTURE AND SUPPLY ARRANGEMENTS

     13.1.  If the Company elects to finance, develop and/or exploit the 
commercial production of a Product, the Company shall enter into a Supply 
Agreement with Cytogen or Elan or any Subsidiary of either to allow for the 
commercial production of such Product on behalf of the Company. The Supply 
Agreement shall be negotiated and agreed by the Parties as contemplated by the 
Business Plan or as otherwise agreed to by the Management Committee. The terms 
of the Supply Agreements shall be on normal commercial terms, and shall be 
negotiated in good faith by the Parties thereto. The determination of which of 
Cytogen or Elan shall be offered the first opportunity to enter into a Supply 
Agreement with the Company shall be made by the Company in good faith, based 
upon the relevant facts and circumstances, including the ability of Cytogen or 
Elan to manufacture the relevant Products and provide infrastructure and Product
support, and the experience and reputation of such Party's in commercializing 
the relevant Product.

                                  ARTICLE XIV

            AUDITORS; REGISTERED OFFICE; ACCOUNTING REFERENCE DATE

     14.1.  Unless otherwise agreed by the Shareholders and save as may be 
provided to the contrary herein;

                                     -13-
<PAGE>
 
          (a)  The auditors of the Company shall be Arthur Anderson, LLP or such
other auditors as may be chosen by Cytogen, which shall be reasonably
satisfactory to Elan. Elan shall retain the right to have an audit conducted for
their own internal purposes using another accounting.

          (b)  The registered office of the Company shall be at such address as 
the Shareholders shall agree from time to time; and

          (c)  The accounting reference date of the Company shall be 31 December
in each Financial Year.

                                  ARTICLE XV

                          SHARE RIGHTS AND DIRECTORS

     15.1.  All Shares shall be identical and shall rank pari passu, be of one
class and shall carry the same voting rights, rights to appoint and remove
Directors, rights to dividends and other rights as provided in the Articles, and
be subject to the restrictions on the transfer and distribution of assets and
other provisions set forth in the Clauses and as set forth in this Agreement.

                                  ARTICLE XVI

                     PROCEEDING OF DIRECTORS AND CHAIRMAN

     16.1.  The initial Chairman shall be a Director designated by Elan.

     16.2   The Chairman designated under Section 16.1 shall retire as Chairman 
at the first Annual Stockholders Meeting of the Company. Thereafter, each 
Shareholder, beginning with Cytogen, shall have the right, exercisable 
alternatively, of nominating one of the Directors to be Chairman of the Company 
for a period of one year. The Chairman shall hold office until the termination
of the next Annual Stockholders Meeting following his appointment. If the
Chairman is unable to attend any meeting of the Board, the Directors of the same
designation shall be entitled to appoint another Director to act as Chairman in
his place at the meeting. From and after the IPO, the Chairman shall be an
individual (who may be a Director designated by either Cytogen or Elan) who
shall be approved by the Directors, and who shall remain Chairman until his
retirement or replacement by the Directors.

     16.3.  In the case of an equality of votes at a meeting of the Board of the
Company, the Chairman shall not be entitled to a second or casting vote.

     16.4.  Any Shareholder removing a Director shall be responsible for and 
shall indemnify the other Shareholder and the Company against any claim by such 
Director in respect of dismissal arising from such removal.

                                     -14-
<PAGE>
 
     16.5.  The Directors shall meet not less than four times in any year and
all Directors' meeting shall be held at such location as shall be designated by
the Board. The quorum for each such meetings shall be a majority of Directors,
including at least one Cytogen Director and at least one Elan Director. In the
event that a quorum cannot be convened as a result of the persistent refusal of
a Shareholders' Directors to attend a meeting (which period shall not exceed 10
days), the provisions of Article XXIII shall be applicable.

                                 ARTICLE XVII

                   MATTERS REQUIRING SHAREHOLDERS' APPROVAL

     17.1.  Unless otherwise agreed between the Shareholders in writing, until 
the earlier of the occurrence of the IPO and either Cytogen or Elan owning, 
directly or indirectly, fewer than 20% of the Shares (in which case, the rights
described below shall lapse only with respect to such Shareholder and not the
other Shareholder) the Shareholders shall exercise all voting rights and other
powers of control available to them in relation to the Company to procure
(insofar as they are able by the exercise of such rights and such powers) that
neither the Company nor any Subsidiary of the Company shall without the prior
approval of the Shareholders (which may be evidenced by a vote of their
designated Directors).

            (a)  engage in any activity other than the Business;

            (b)  sell the principal assets, undertaking or business of the 
Company;
          
            (c)  appoint or dismiss a Director except in accordance with the 
rights conferred on the Shareholders under Article XVII to appoint and remove a
Director;

            (d)  create any fixed or floating charge, lien (other than a lien 
arising by operation of law) or other encumbrance over the whole or any part of 
the undertaking, property or assets of the Company or of any Subsidiary, except 
for the purpose of securing the indebtedness of the Company to its bankers for 
sums borrowed in the ordinary and proper course of the Business;

            (e)  borrow any sum (except from the Company's bankers in the 
ordinary and proper course of the Business) in excess of a maximum aggregate sum
outstanding at any time of $15,000;

            (f)  make any loan or advance or give any credit (other than normal
trade credit) in excess of $15,000 to any Person, except for the purpose of 
making deposits with bankers;

            (g)  give any guarantee or indemnity to secure the liabilities or 
obligations of any Party other than those which it is usual to give in the 
ordinary course of a business similar to the Business;

            (h)  sell, transfer, lease, assign, or otherwise dispose of part of 
the undertaking, property and/or assets other than stock or assets (or any 
interest therein) which are surplus to the

                                     -15-

<PAGE>

requirements of the Company or any Subsidiary, or contract so to do where the 
value of the undertaking property and/or assets exceed $15,000;

               (i)  enter into any contract, arrangement or commitment involving
expenditure on capital account or the realization of capital assets if the
amount or the aggregate amount of such expenditure or realization by the
Company, and all of the Subsidiaries of the Company would exceed $50,000 in any
one year or in relation to any one project, and for the purpose of this
paragraph the aggregate amount payable under any agreement for hire, hire 
purchase or purchase on credit sale or conditional sale terms shall be deemed to
be capital expenditure incurred in the year in which such agreement is entered
into;

               (j)  issue any unissued shares or create or issue any new shares;

               (k)  alter any rights attaching to any class of share in the 
capital of the Company or alter the Articles;

               (l)  consolidate, sub-divide or convert any of the Company's 
share capital or in any way alter the rights attaching thereto;

               (m)  create, acquire or dispose of any Subsidiary or of any 
shares in any Subsidiary;

               (n)  enter into any partnership or profit sharing agreement with 
any Person other than arrangements with trade representatives and similar 
Persons in the ordinary course of business;

               (o)  do or permit or suffer to be done any act or thing whereby 
the Company may be wound up (whether voluntarily or compulsorily), save as 
otherwise expressly provided for in this Agreement;

               (p)  issue any debentures or other securities convertible into 
shares or debentures or any share warrants or any options in respect of Shares;

               (q)  enter into any material contract or transaction except in 
the ordinary and proper course of the Business on arm's length terms;

               (r)  acquire, purchase or subscribe for any shares, debentures, 
mortgages or securities (or any interest therein) in any company, trust or 
other body;

               (s)  adopt any employee benefit program or incentive schemes;

               (t)  engage any new employee at remuneration which could exceed 
the rate of $60,000 per annum; or

               (u)  pay any remuneration to Directors designated by either of 
them as provided in Article VII by virtue of holding such office other than 
Directors who hold executive office.

                                     -16-






<PAGE>
 
                                 ARTICLE XVIII

                         THE BUSINESS PLAN AND REVIEWS


     18.1.  The Directors and Shareholders shall meet together as soon as
reasonably practicable after the date hereof and thereafter prior to the
accounting reference date specified in Article XIV in any Financial Year to
agree and approve the Business Plan for the following Financial Year, or any
amendment or modification to the Business Plan, with at least one Director
appointed by each Shareholder concurring.

     18.2.  The Shareholders agree that the Management Committee shall submit to
the Directors on 15th May, 15th August, 15th November, and 15th February or as
soon as reasonably practicable thereafter in each Financial Year a report on the
performance of the business activities of the Company and the Directors shall
hold such meeting as may be necessary to review the performance of the Company
against the Business Plan for the relevant year of trading.


                                  ARTICLE XIX

                              REVIEW AND DURATION

     19.1.  This Agreement shall remain in force for a period of two years from
the date hereof and thereafter, subject to the written agreement of the
Shareholders, shall be renewed for successive periods of one year.

     19.2.  The Shareholders shall meet together to review the performance of
the Company not less than six months prior to the expiration of the 
initial two-year period and six months prior to the expiration of each
successive one-year period referred to in Section 19.1. If following such
review, either Shareholder determines that it does not wish or intend to renew
or extend this Agreement as aforesaid, such Shareholder shall forthwith serve
written notice of discontinuance upon the other Shareholder whereupon the
provisions of Article XXI shall apply.

     19.3.  The following provisions shall be applicable in the event of a
termination of this Agreement or failure to renew this Agreement upon an
applicable renewal date (each, a "Termination Date"):

            (a) In the event that the Termination Date shall have occurred after
EIS shall have exercised the Exchange Right (as defined in the Securities
Purchase Agreement) and, accordingly, owns Shares, the provisions of Article XXI
shall be applicable and the provisions of Section 7.9(c) hereof shall survive
such termination.

            (b) In the event that the Termination Date shall have occurred after
EIS shall have elected to convert its Series A Preferred Stock of Cytogen and,
accordingly, the Exchange Right shall have lapsed neither party shall have any
additional rights hereunder, except that the provisions of Section 7.9(c) hereof
shall survive such termination.

                                     -17-
<PAGE>
 
            (c) In the event that the Termination Date shall have occurred prior
to the time that the Exchange Right shall have been exercised and prior to the
time, if any, that the Series A Preferred Stock of Cytogen shall have been
converted into Cytogen Common Stock, as a result of Cytogen's exercise of its
right to terminate under Section 19.2 (or election not to continue the business
of the Company), the ATS Products shall be transferred to or as directed by Elan
in the manner described in the Securities Purchase Agreement and neither party
shall have any additional rights hereunder, except the provisions of Section
7.9(c) hereof shall survive such termination, but the royalty rate shall be [*]
rather than [*], of Net Sales. [INFORMATION OMITTED AND FILED SEPARATELY WITH
THE COMMISSION UNDER RULE 24b-2.]

            (d) In the event that the Termination Date shall occurred prior to
the time that the Exchange Right shall have been exercised and prior to the
time, if any, that the Series A Preferred Stock of Cytogen shall have been
converted into Cytogen Common Stock, as a result of any reason other than
described in clause (c) above, the ATS Products shall be transferred to or as
directed by Elan in the manner described in the Securities Purchase Agreement
and neither party shall have any additional rights hereunder, except that the
provisions of Section 7.9(c) hereof shall survive such termination but the
royalty rate shall be [*], rather than [*], of Net Sales. [INFORMATION OMITTED
AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.]



                                  ARTICLE XX 

                       TRANSFER OF OR CHARGING OF SHARES

     20.1.  No Shareholder shall transfer any of its Shares or Loans to any
other Person (other than to any Affiliates, in whose hands the same restriction
on further transfer shall apply) without the prior written consent of the other.

     20.2.  No Shareholder shall transfer, create or dispose of any interests in
or over any of its Shares or Loans except:

            (a) by a transfer of the entire and legal beneficial interest in all
its Shares and Loans; and

            (b) to a transferee as permitted by this Agreement.

     20.3.  No Shareholder shall, except with the prior written consent of the
other Shareholder, create or permit to subsist any pledge, lien or charge over,
or grant any option or other rights or dispose of any interest in, all or any of
the Shares held by it (other than by a transfer of such Shares in accordance
with the provisions of this Agreement) or in any Loans (or

*-INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.


                                     -18-
<PAGE>
 
part thereof) made by it to the Company unless any Person in whose favor any 
such pledge, lien, or charge is created or permitted to subsist or such option 
or rights are granted or such interest is disposed of shall be expressly 
subject to and bound by all the limitations and provisions which are embodied in
this Agreement.

                                  ARTICLE XXI

                                  REALIZATION

     21.1.  For the purpose of Article XXI "Relevant Event" is committed or 
suffered by a Shareholder if:

            (a) an event specified in Section 19.3(a) shall have occurred; or

            (b) it commits a material breach of its obligations under this 
Agreement and, in the case of a breach capable of remedy, fails to remedy it 
within 30 days of being specifically required in writing to do so by the other 
Shareholder; or

            (c) a distress, execution, sequestration or other process is levied 
or enforced upon or sued out against a material part of its property which is 
not discharged or challenged within 20 days; or

            (d) it is unable to pay its debts in the normal course of business; 
or

            (e) it ceases or threatens to cease wholly or substantially to carry
on its business, otherwise than for the purpose of a reconstruction or 
amalgamation without the prior written consent of the other Shareholder (such 
consent not to be unreasonably withheld); or

            (f) the appointment of a liquidator, receiver, administrator, 
receiver, examiner, trustee or similar officer of such Shareholder or over all 
or a substantial part of its assets;

            (g) if an application or petition for bankruptcy, corporate 
reorganization, composition, administration, examination, arrangement or any 
other procedure similar to any of the foregoing under the law of any applicable 
jurisdiction is filed and is not discharged within 30 days, or if a shareholder 
applies for or consents to the appointment of a receiver, administrator, 
examiner or similar officer of it or of all or a material part of its assets, 
rights or revenues or the assets and/or the business of a Shareholder are for 
any reason seized, confiscated or condemned; or

            (h) a Person who is not a shareholder of a Shareholder or its 
Affiliates on the date of this Agreement acquiring control of that Shareholder.

     21.2.  If either Shareholder commits or suffers a Relevant Event, the other
Shareholder shall be entitled, within three months of its becoming aware of the 
occurrence of the Relevant Event, to require the defaulting Shareholder (the 
"Recipient Shareholder") to sell to the non defaulting Shareholder (the 
"Proposing Shareholder") all (but not less than all) of the Shares held

                                     -19-
<PAGE>
 
or beneficially owned by the Recipient Shareholder. The Proposing Shareholder 
shall notify the Recipient Shareholder of the exercise of this option by 
delivering written notice to the Recipient Shareholder stating that the option 
is exercised.

     21.3.  The Recipient Shareholder will be obliged within 60 days of receipt 
of such offer to either (a) accept such offer or (b) make a written counter 
offer in which the price per share must be at least 10% higher than in the offer
received from the Proposing Shareholder. The counter offer must be an offer to 
purchase all (but not less than all) of the Shares of the Proposing Shareholder.

     21.4.  The Proposing Shareholder will be obliged within seven days from the
date on which it receives the counter offer to either (a) accept the counter 
offer or (b) make a written second counter offer in which the price per share 
must be at least 10% higher than the counter offer received from the Recipient 
Shareholder. The second counter offer must be an offer to purchase all (but not
part only) of the shares of the Recipient Shareholder.

     21.5.  The Recipient Shareholder will be obliged within seven days from the
date on which it receives the second counter offer to either (a) accept the
second counter offer, or (b) to purchase all of the shares of the Proposing
Shareholder for an amount which is 10% higher than the price per share at which
the Proposing Shareholder offered to purchase the Shares of the Recipient
Shareholder in the second counter offer. The foregoing provisions relating to
bidding in 10% higher increments, as described in this Article XXI shall
continue until one of the Shareholders has elected to discontinue bidding.

     21.6.  Time shall be of the essence and a failure to respond to an offer or
any counter offer within the permitted time period shall be deemed to constitute
acceptance of such offer or counter offer.

     21.7.  The Shareholder who has accepted or is deemed to have accepted an 
offer or counter offer made pursuant to the provisions of this Section 22 shall 
deliver to the other Shareholder within 30 days of the date of acceptance or 
deemed acceptance (or three days following the issuance of any regulatory 
consent required to effect such sale) a duly executed transfer of all its shares
in favor of the other Shareholder (or as it may direct) upon full payment of the
relevant price for such shares. The Shareholders shall each use their best 
endeavors to procure the issuance of any such regulatory consents as soon as 
possible. The shares so transferred shall be deemed to be sold by the transferor
as beneficial owner with effect from the date of such transfer free from any 
lien, charge or encumbrance with all rights attaching thereto.

     21.8.  In the alternative to the procedure set out in Sections 21.2 to 
21.7, if either Shareholder commits or suffers a Relevant Event, the other 
Shareholder shall be entitled, within three months of its becoming aware of the 
occurrence of the Relevant Event, to serve a written notice ("Warning Notice") 
on the other Shareholder stating that it intends to serve a Winding-Up Notice 
(as hereinafter defined) on the Company. A Warning Notice may be withdrawn 
before the expiry of 60 days after it has been served ("the Warning Period"). 
Within 30 days of the expiry of the Warning Period during which period the 
relevant warning notice shall not have been withdrawn, the Party serving the 
Warning Notice may at any time serve a further written notice

                                     -20-
<PAGE>

("the Winding-Up Notice") on the other Shareholder requiring that the Company be
wound up, whereupon the Shareholders shall be bound to take all such steps as 
may be necessary to wind up the Company forthwith and in an orderly and 
efficient manner.

                                 ARTICLE XXII

                             EXPERT DETERMINATION

     22.1.  Should any dispute or difference arise between Elan and Cytogen or 
between Elan or Cytogen, and the Company, during the period that this Agreement 
is in force, then either Party shall forthwith give to the other notice of such 
dispute or difference, and such dispute or difference shall be and is hereby 
referred to such expert as the Parties in dispute may agree (the "Independent 
Expert"). In the event that the parties are unable or unwilling to agree upon 
an Independent Expert, or the Independent Expert declines to accept the 
appointment or after the appointment is incapable of acting or dies, the 
Parties, in the absence of agreement on a replacement within a period of seven 
days, shall forthwith request the American Arbitration Association in New York 
City to appoint a replacement to constitute the Independent Expert. The 
Independent Expert shall act as an expert and not as an arbitrator. The fees of 
the Independent Expert shall be shared equally between the Parties in dispute. 
The Independent Expert shall be entitled to inspect and examine all 
documentation and any other material which he may consider to be relevant to the
dispute. He shall afford each Party a reasonable opportunity (in writing or 
orally) of stating reasons in support of such contentions as each Party may wish
to make relative to the matters under consideration. The Independent Expert 
shall give notice in writing of his determination to the Parties within such 
time as may be stipulated in his terms of appointment or in the absence of such 
stipulation, within two weeks from the reference of the dispute or difference to
him. Any determination by the Independent Expert of a dispute of difference 
shall be final and binding on the Parties unless written notice of rejection of 
the determination is given by one Party to the other Party within 21 days from 
the date of the relevant determination. Any such rejection shall constitute a 
"Deadlock" for the purposes of Article XXI and the rejecting Party shall be 
deemed to be Proposing Shareholder.

                                 ARTICLE XXIII

                     PROCEDURE IN THE EVENT OF A DEADLOCK

     23.1.  For the purpose of this Article XXIII a "Deadlock" means any cause 
where the Shareholder notifies the other Shareholder in writing that they 
consider an irreconcilable deadlock has arisen at Director, Shareholder or 
Management Committee level with respect to any material item or matter relating 
to the Business or the Company, and identifying the matter in dispute. A 
Deadlock may only arise relating to a material item or matter; all immaterial 
items or matters shall not give rise thereto; a material item or matter means
one that could reasonably be expected to have a material or significant effect
on the Company's business, financial condition or prospects.

                                     -21-
 



<PAGE>
 
     23.2.  In any case of Deadlock each of the Shareholders shall within 10 
days of the Deadlock arising, cause its appointees on the Board or the
Management Committee, as the case may be, to prepare and circulate to the other
Shareholder and the other Directors a memorandum or other form of statement
setting out its position on the matter in dispute and its reasons for adopting
that position. Each memorandum or statement shall be considered by the chief
executive officer of each Shareholder to which it is addressed who shall
endeavor to resolve the Deadlock. Each Shareholder agrees upon a resolution or
disposition of the matter, they shall execute a statement setting out the agreed
terms. The Shareholders shall exercise the voting rights and other powers
available to them in relation to the Company to procure that the agreed terms
are fully and promptly carried into effect.

     23.3.  If the Deadlock is not resolved or disposed of in accordance with 
Section 23.2. within 30 days after expiry of the seven-day period, or such 
longer period as the Shareholders agree in writing, and if it prevents the 
Company or a Subsidiary from continuing to achieve its business purposes, either
Shareholder may (if they have not previously done so) refer the matter to an 
expert pursuant to the provisions of Article XXII, and the provisions of Article
XXI shall otherwise be applicable.

                                 ARTICLE XXIV

                                  WINDING UP

     24.1.  In the event of the Company being wound up by way of the 
Shareholder's voluntary winding up, the Shareholders will procure that the 
liquidator is a member of the American Institute of Certified Public Accounts 
("AICPA") or member of the Bar of any state acceptable to both Shareholders, or 
in default of agreement, nominated by the President of the AICPA.

     24.2.  The Shareholders shall prove in the winding up of the Company to 
the maximum extent permitted by applicable law for all sums due or to fall due
to them respectively from the Company and shall exercise all rights of set-off
and generally do all such other acts and things as may be available to them in
order to obtain the maximum receipts and recoveries.

                                  ARTICLE XXV

                                CONFIDENTIALITY

     25.1.  The Shareholders and the Company acknowledge that it may be
necessary, from time to time, to disclose to each other confidential and
proprietary information, including without limitation, inventions, works of
authorship, trade secrets, specifications, designs, data, know-how and other
information, relating to the Field, the Products, processes, and services of the
disclosing Party.

                                     -22-



    
<PAGE>
 
     25.2.  The Shareholders and the Company agree that the information to be 
disclosed by Cytogen and Elan to the Company may include trade secrets, know-how
and other proprietary information and data regarding the Technology. It is 
agreed that the information to be disclosed by the Company to Cytogen and Elan 
may include trade secrets, know-how and other proprietary information and data 
regarding the Compounds or the Products.

     25.3.  The foregoing shall be referred to collectively as "Confidential 
Information". Any Confidential Information revealed by a Party to another Party 
shall be used by the receiving Party exclusively for the purposes of fulfilling 
the receiving Party's obligations under this Agreement, and for no other 
purpose.

     25.4.  Each Party agrees to disclose Confidential Information of another 
Party only to those employees, representatives and agents requiring knowledge 
thereof in connection with their duties directly related to the fulfilling of 
the Party's obligations under this Agreement. Each Party further agrees to 
inform all such employees, representatives and agents of the terms and 
provisions of this Agreement and their duties hereunder and to obtain their 
consent hereto as a condition of receiving Confidential Information. Each Party 
agrees that it will exercise the same degree of care and protection to preserve 
the proprietary and confidential nature of the Confidential Information 
disclosed by a Party, as the receiving Party would exercise to preserve its own 
proprietary and confidential information. Each Party agrees that it will, upon 
request of a Party, return all documents and any copies thereof containing 
Confidential Information belonging to or disclosed by, such Party.

     25.5.  Any breach of this Article XXV by any of the Persons informed by one
of the Shareholders is considered a breach by the Party itself.

          Confidential Information shall not be deemed to include:

            (a) Information that is in the public domain.

            (b) Information which is made public by the disclosing Party.

            (c) Information which is independently developed by a Party.

            (d) Information that is published or otherwise becomes part of the 
public domain without any disclosure by a Party, or on the part of a Party's 
directors, officers, agents, representatives or employees.

            (e) Information that becomes available to a Party on a 
non-confidential basis, whether directly or indirectly, from a source other than
a Party, which source, to the best of the Party's knowledge, did not acquire
this information on a confidential basis; and

            (f) Information which the receiving Party is required to disclose 
pursuant to a valid order of a court or other governmental body or any political
subdivision thereof or otherwise required by law.

                                     -23-
<PAGE>
 
     25.6.  The provisions relating to confidentiality in this Article XXV shall
remain in effect during the term of this Agreement, and for a period of seven 
years following the expiration or earlier termination of this Agreement.

     25.7.  The Shareholders agree that the obligations of this Article XXV are 
necessary and reasonable in order to protect the Shareholders' respective 
businesses, and each Party expressly agrees that monetary damages would be 
inadequate to compensate a Party for any breach by the other Party of its 
covenants and agreements set forth herein. Accordingly, the Shareholders agree 
and acknowledge that any such violation or threatened violation will cause 
irreparable injury to a Party and that, in addition to any other remedies that 
may be available, in law and equity or otherwise, any Party shall be entitled to
obtain injunctive relief against the threatened breach of the provisions of this
Article XXV, or a continuation of any such breach by the other Party, specific 
performance and other equitable relief to redress such breach together with its 
damages and reasonable counsel fees and expenses to enforce its rights 
hereunder, without the necessity of proving actual or express damages.


                                 ARTICLE XXVI

                             SHAREHOLDERS' CONSENT

     26.1.  Where this Agreement provides that any particular transaction or 
matter requires the consent, approval or agreement of any Shareholder, such 
consent, approval or agreement may be given subject to such terms and conditions
as that Shareholder may impose and any breach of such terms and conditions by 
any Persons subject thereto shall ipso facto be deemed to be a breach of the 
terms of this Agreement.


                                 ARTICLE XXVII

                                     COSTS

     27.1.  The Company shall bear the legal and other costs of the Parties 
incurred in relation to preparing and concluding this Agreement and the related 
agreements and other documents.

     27.2.  All costs, legal fees, registration fees and other expenses, 
including the costs and expenses incurred in relation to the incorporation of 
the Company, shall be borne by the Company.

                                     -24-
<PAGE>
 
                                ARTICLE XXVIII

                                    GENERAL

     28.1.  Each of the Parties hereto undertakes with the others to do all 
things reasonably within its power which are necessary or desirable to give 
effect to the spirit and intent of this Agreement and the Clauses.

     28.2.  The Parties hereto shall use their respective reasonable endeavors 
to procure that any necessary third Party shall do, execute and perform all such
further deeds, documents, assurances, acts and things as any of the Parties 
hereto may reasonably require by notice in writing to the others to carry the 
provisions of this Agreement into full force and effect.

     28.3.  Where either Shareholder is required under this Agreement to 
exercise its powers in relation to the Company to procure a particular matter or
thing such obligation shall be deemed to include an obligation to exercise its 
powers both as a Shareholder and as a Director (where applicable) of the Company
and to procure that any Director appointed by it (whether alone or jointly with 
any other Person) shall procure such matter or thing.

     28.4.  Neither Party to this Agreement shall be liable for delay in the 
performance of any of its obligations hereunder if such delay results from 
causes beyond its reasonable control, including, without limitation, acts of 
God, fires, strikes, acts of war, or intervention of any relevant government 
authority, but any such delay or failure shall be remedied by such Party as soon
as practicable.

     28.5.  Nothing contained in this Agreement is intended or is to be 
construed to constitute Elan and Cytogen as partners, or Elan as an employee of 
Cytogen, or Cytogen as an employee of Elan. No Party hereto shall have any 
express or implied right or authority to assume or create any obligations on 
behalf of or in the name of the Party or to bind the other Party to any 
contract, agreement or undertaking with any third Party.

     28.6.  This Agreement may be executed in any number of counterparts, each 
of which when so executed shall be deemed to be an original and all of which 
when taken together shall constitute this Agreement.

     28.7.  Any notice to be given under this Agreement shall be sent in writing
by registered or recorded delivery post or telecopied to:

                                     -25-
<PAGE>
 
                         Elan at:

                         Elan Corporation, plc
                         Monksland, Athlone
                         County Westmeath
                         Ireland
                         Attention: Chief Financial Officer
                         Telefax: 353-902-92427

                         copy to:

                         O'Sullivan Graev & Karabell, LLP
                         30 Rockefeller Plaza
                         New York, NY 10112
                         Attention: David Robbins, Esq.
                         Telefax: (212) 408-2420

                         Cytogen at:

                         Cytogen Corporation
                         600 College Road East
                         Princeton, New Jersey 08540-5308
                         Attention: Chief Financial Officer
                         Telefax: (609) 951-9298     

                         copy to:
                         
                         Dewey Ballantine
                         1301 Avenue of the Americas
                         New York, NY 10019
                         Attention: Frederick W. Kanner, Esq.
                         Telefax: (212) 259-6333

                         the Company at:
                    
                         Targon Corporation
                         600 College Road East
                         Princeton, New Jersey 08540
                         Attention: Chief Executive Officer
                         Telefax: (609) 951-9298

                                     -26-

<PAGE>
 
                         copy to:                             
                                                              
                         O'Sullivan Graev & Karabell, LLP     
                         30 Rockefeller Plaza                  
                         New York, NY 10112                   
                         Attention: David Robins, Esq.        
                         Telefax: (212) 408-2420              
                                                              
                         copy to:                             
                                                              
                         Dewey Ballantine                     
                         1301 Avenue of the Americas          
                         New York, NY 10019                   
                         Attention: Frederick W. Kanner, Esq. 
                         Telefax: (212) 259-6333                

or to such other address(es) as may from time to time be notified by either 
Party to the other hereunder.

          Any notice sent by mail shall be deemed to have been delivered within 
seven working days after dispatch and any notice sent by telecopy shall be 
deemed delivered within 24 hours of the time of the dispatch. Notices of change 
of address shall be effective upon receipt.

     28.8.  This Agreement shall be governed by and construed in accordance with
the laws of Delaware and the Parties agree to submit to the jurisdiction of any 
federal or state court sitting in New York City for the resolution of disputes 
hereunder.

     28.9.  If any provision in this Agreement is agreed by the Parties to be,
deemed to be or becomes invalid, illegal, void or unenforceable under any law
that is applicable hereto, (i) such provision will be deemed amended to conform
to applicable laws so as to be valid and enforceable or, if it cannot be so
amended without materially altering the intention of the Parties, it will be
deleted, with effect from the date of such agreement or such earlier date as the
Parties may agree, and (ii) the validity, legality and enforceability of the
remaining provisions of this Agreement shall not be impaired or affected in any
way.

     28.10. No amendment, modification or addition hereto shall be effective or
binding on either Party unless set forth in writing and executed by a duly 
authorized representative of both Parties.

     28.11. No waiver of any right under this Agreement shall be deemed 
effective unless contained in a written document signed by the Party charged 
with such waiver, and no waiver of any breach or failure to perform shall be 
deemed to be a waiver of any future breach or failure to perform or of any other
right arising under this Agreement.

                                     -27-
<PAGE>
 
     28.12. The section headings contained in this Agreement are included for 
convenience only and form no part of the agreement between the Parties. Except 
as otherwise provided herein, references to articles, paragraphs, clauses and 
appendices are to those contained in this Agreement.

     28.13. None of the Parties may assign their rights and obligations 
hereunder without the prior written consent of the other Parties. Elan and/or 
Cytogen shall have the right to delegate or subcontract all or any portion of 
their duties hereunder to their respective Affiliates; provided, that Elan or 
Cytogen, as the case may be, guarantees the performance by such Affiliate of the
obligations of Elan or Cytogen, as the case may be under this Agreement.

     28.14. No provision of this Agreement shall be construed so as to negate, 
modify or affect in any way the provisions of any other agreement between the
Parties unless specifically referred to, and solely to the extent provided, in
any such other agreement.

     28.15. This Agreement shall be binding upon and enure to the benefit of the
Parties hereto, their successors and permitted assigns.

                                     -28-
<PAGE>
 
          IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on
the day first set forth above.


                                  ELAN CORPORATION, PLC              
                                                                     
                                                                     
                                  By: /s/   Donal Geaney
                                     ---------------------------------
                                     Name:  Donal Geaney
                                     Title: CEO                          
                                                                     
                                                                     
                                                                     
                                  CYTOGEN CORPORATION                
                                                                     
                                                                     
                                  By: /s/   Thomas J. McKearn
                                     ---------------------------------
                                     Name:  Thomas J. McKearn
                                     Title: Chairman, President and CEO
                                                                     
                                                                     
                                  TARGON CORPORATION                 
                                                                     
                                                                     
                                  By: /s/   Michael Sember
                                      ---------------------------------
                                     Name:  Michael Sember
                                     Title: CEO and Chairman

<PAGE>
 
                               LIST OF EXHIBITS

EXHIBIT A            Business Plan of Targon Corporation

EXHIBIT B            List of ATS Compounds

EXHIBIT C            List of Cytogen Compounds

EXHIBIT D            Certificate of Incorporation and Bylaws of Targon
                     Corporation