<PAGE>

                                                                    Exhibit 10.2


                                                             EXECUTION COPY (V5)
                                                                            JDOA

                                            ***TEXT OMITTED AND FILED SEPARATELY
                                                CONFIDENTIAL TREATMENT REQUESTED
                                          UNDER 17 C.F.R. SECTIONS 200.80(B)(4),
                                                            200.83 AND 240.24B-2

                                                                    29 June 2001


            SUBSCRIPTION, JOINT DEVELOPMENT AND OPERATING AGREEMENT



                            ELAN CORPORATION, PLC.



                       ELAN INTERNATIONAL SERVICES, LTD.



                               SAFESCIENCE, INC.



                                      AND



                            SAFESCIENCE NEWCO, LTD.

                                       1
<PAGE>

                                     INDEX
                                     -----

CLAUSE 1   DEFINITIONS

CLAUSE 2   BUSINESS

CLAUSE 3   REPRESENTATIONS AND WARRANTIES

CLAUSE 4   AUTHORIZATION AND CLOSING

CLAUSE 5   DIRECTORS; STEERING COMMITTEE

CLAUSE 6   THE BUSINESS PLAN AND REVIEWS

CLAUSE 7   RESEARCH AND DEVELOPMENT

CLAUSE 8   COMMERCIALIZATION

CLAUSE 9   OWNERSHIP OF INTELLECTUAL PROPERTY RIGHTS

CLAUSE 10  INTELLECTUAL PROPERTY RIGHTS

CLAUSE 11  CROSS LICENSING/EXPLOITATION OF NEWCO INTELLECTUAL PROPERTY OUTSIDE
           THE FIELD

CLAUSE 12  REGULATORY MATTERS/CLINICAL TRIALS

CLAUSE 13  MANUFACTURING

CLAUSE 14  TECHNICAL SERVICES AND ASSISTANCE

CLAUSE 15  AUDITORS, BANKERS, ACCOUNTING REFERENCE DATE; SECRETARY

CLAUSES 16 TRANSFER OF SHARES; RIGHTS OF FIRST OFFER; TAG ALONG RIGHTS

CLAUSE 17  MATTERS REQUIRING SHAREHOLDERS' APPROVAL

CLAUSE 18  DISPUTES

                                       2
<PAGE>

CLAUSE 19  TERMINATION

CLAUSE 20  SHARE RIGHTS

CLAUSE 21  CONFIDENTIALITY

CLAUSE 22  COSTS

CLAUSE 23  GENERAL

                                       3
<PAGE>

THIS SUBSCRIPTION, JOINT DEVELOPMENT AND OPERATING AGREEMENT dated 29 June 2001
and effective as of the Closing Date (as defined below)

BETWEEN:

(1)  ELAN CORPORATION, PLC., a public limited company incorporated under the
     laws of Ireland, and having its registered office at Lincoln House, Lincoln
     Place, Dublin 2, Ireland;

(2)  ELAN INTERNATIONAL SERVICES, LTD., a Bermuda exempted limited liability
     company incorporated under the laws of Bermuda, and having its registered
     office at Clarendon House, 2 Church St., Hamilton, Bermuda ("EIS");

(3)  SAFESCIENCE, INC. a corporation duly incorporated and validly existing
     under the laws of the State of Nevada and having its principal place of
     business at Park Square Building, 31 St. James Avenue, 8th Floor, Boston,
     Massachusetts 02116, United States of America; and

(4)  SAFESCIENCE NEWCO, LTD. a Bermuda exempted limited liability company
     incorporated under the laws of Bermuda, and having its registered office at
     Clarendon House, 2 Church St., Hamilton, Bermuda ("Newco").


RECITALS:

A.   Newco desires to issue and sell to SafeScience, and SafeScience desires to
     purchase from Newco, for aggregate consideration of $7,500,000, 6,000
     Newco's common Shares, par value $1.00 per share (the "Common Shares").

     Additionally, Newco desires to issue and sell to the Shareholders (as
     defined below), and the Shareholders desire to purchase from Newco, for
     aggregate consideration of $7,500,000 apportioned between them as set forth
     herein, 6,000 Newco's preference Shares, par value $1.00 per share (the
     "Preference Shares"), allocated 3,612 Shares to SafeScience for aggregate
     consideration of $4,515,000 and 2,388 Shares to EIS for aggregate
     consideration of $2,985,000.

B.   As of the Closing Date, Elan Corp, has entered into the Elan License
     Agreement, and SafeScience has entered into the SafeScience License
     Agreement, in connection with the license to Newco of the Elan Intellectual
     Property and the SafeScience Intellectual Property, respectively (each as
     defined below).

C.   Elan and SafeScience have agreed to co-operate in the research and
     development of the Products (as defined below) based on their respective
     technologies.

                                       4
<PAGE>

D.   Elan and SafeScience have agreed to enter into this Agreement for the
     purpose of recording the terms and conditions regulating their relationship
     with each other, with respect to the Licensed Technologies, and with Newco.


NOW IT IS HEREBY AGREED AS FOLLOWS:

                                   CLAUSE 1

                                  DEFINITIONS

1.1  In this Agreement, the following terms shall, where not inconsistent with
     the context, have the following meanings respectively:

     "Affiliate" shall mean any corporation or entity controlling, controlled by
     or under the common control of Elan or SafeScience or any third party, as
     the case may be, excluding, in the case of Elan, an Elan JV.  For the
     purpose of this definition, (i)"control" shall mean direct or indirect
     ownership of [...***...] or more of the stock or shares entitled to vote
     for the election of directors; and (ii) Newco shall not be an Affiliate of
     Elan, Elan Corp, or EIS, nor shall Elan, Elan Corp, or EIS be an Affiliate
     of Newco.

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

     "Board" shall mean the board of directors of Newco.

     "Business" shall mean the business specified in the Business Plan.

     "Business Plan" shall mean the business plan and program of development to
     be agreed by Elan and SafeScience pursuant to Clause 6, with respect to the
     research and development of the Products that shall contain, among other
     things, to the extent practicable, the research and development objectives,
     desired Product specifications, clinical indications, preliminary clinical
     trial designs (Phase I/II), development timelines, budgeted costs and the
     relative responsibilities of SafeScience and Elan as it relates to the
     implementation of the R&D Plan.

     "Certificate of Designations" shall mean that certain certificate of
     designations, preferences and rights of Series A, B, and C Shares of
     SafeScience issued on the Closing Date.

     "Closing Date" shall mean the Initial Closing Date.

                                       5
<PAGE>

     "Common Share Equivalents" shall mean any options, warrants, rights or any
     other securities convertible, exercisable or exchangeable, in whole or in
     part, for or into Common Shares.

     "Compounds" shall mean SafeScience's human therapeutic drug GBC-590, the
     structure of which is described in Schedule 1, such derivatives or analogs
     thereof, or other compounds which are approved in writing by the Steering
     Committee, in accordance with Clause 2.4 hereof.

     "Definitive Documents" shall mean this Agreement, the Elan License
     Agreement, the SafeScience License Agreement, the SafeScience Securities
     Purchase Agreement, the Registration Rights Agreements, the Certificate of
     Designations and associated documentation of even date herewith, by and
     between SafeScience, Elan, EIS and Newco, as applicable.

     "Development Funding" shall have the meaning set forth in Clause 6.

     "Directors" shall mean, at any time, the directors of Newco.

     "EIS Director" shall have the meaning set forth in Clause 5.

     "EIS Exchange Right" has the meaning assigned to such term in the
     Certificate of Designations in effect on the Closing Date.

     "EIS/Newco Option" shall have the meaning set forth in Clause 8.

     "Elan" shall mean Affiliates and subsidiaries of Elan Corp within the
     division of Elan Corp carrying on business as Elan Pharmaceutical
     Technologies.  For the avoidance of doubt, "Elan" shall exclude the
     Excluded Entities.

     "Elan Improvements" has the meaning assigned thereto in the Elan License
     Agreement.

     "Elan Intellectual Property" has the meaning assigned thereto in the Elan
     License Agreement.

     "Elan JV" shall mean an entity that Elan and a third party (i) establish or
     have established, (ii) take shareholdings in or have a right to take
     shareholdings in, and (iii) grant certain licenses in and to certain
     intellectual property rights for the purpose of implementing a strategic
     alliance.

     "Elan License Agreement" shall mean the license agreement between Elan and
     Newco, of even date herewith, attached hereto in Schedule 1.

     "Encumbrance" shall mean any liens, charges, encumbrances, equities,
     claims, options, proxies, pledges, security interests, or other similar
     rights of any nature.

                                       6
<PAGE>

     "EPIL" shall mean Elan Pharma International Limited, a private limited
     company incorporated under the laws of Ireland.

     "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.

     "Excluded Entities" shall mean The Liposome Company, Inc. and its
     subsidiaries; Axogen Limited; Neuralab Limited; Dura Pharmaceuticals, Inc.
     and its subsidiaries; and Affiliates (present or future) of Elan Corp
     within the division of Elan Corp carrying on business as Elan
     Pharmaceuticals which incorporates, inter alia, Elan Pharma International,
     Ltd. (only to the extent that it is the owner of patents, know-how or other
     intellectual property or technology invented and/or developed within the
     division of Elan Corp carrying on business as Elan Pharmaceuticals), Athena
     Neurosciences, Inc., Elan Pharmaceuticals, Inc. and  Elan Europe Limited.

     "FDA" shall mean the United States Food and Drug Administration or any
     other successor agency in the USA.

     "Field" shall mean the prevention and treatment of oncology indications in
     humans.

     "Financial Year" shall mean each year commencing on January 1 (or in the
     case of the first Financial Year, the Closing Date) and expiring on
     December 31 of each year.

     "Fully Diluted Common Shares" shall mean all of the issued and outstanding
     Common Shares of the Shareholders, assuming the conversion, exercise or
     exchange of all outstanding Common Share Equivalents.

     "Initial Formulation" shall have the meaning as such term is defined in
     Clause 2.3.

     "Initial Closing Date" shall have the meaning as such term is defined in
     Section 1(a) of the SafeScience Securities Purchase Agreement.

     "Initial Indication" shall have the meaning as such term is defined in
     Clause 2.3.

     "Initial Mode of Administration" shall have the meaning as such term is
     defined in Clause 2.3.

     "License Agreements" shall mean the Elan License Agreement and the
     SafeScience License Agreement.

     "Licensed Technologies" shall mean, collectively, the Elan Intellectual
     Property and the SafeScience Intellectual Property.

     "Newco Intellectual Property" shall mean all rights to patents, know-how
     and other intellectual property arising out of the conduct of the Project
     by any person,

                                       7
<PAGE>

     including any technology acquired by Newco from a third party that does not
     constitute Elan Intellectual Property or SafeScience Intellectual Property.

     For the avoidance of doubt (i) any preclinical and clinical data and/or
     toxicity, stability and pharmacological data generated pursuant to the
     Project shall constitute Newco Intellectual Property; and (ii) any patent
     application filed by Newco, or by Elan or SafeScience on behalf of Newco,
     and any patent issued pursuant thereto, covering a Product shall constitute
     Newco Intellectual Property.

     "Newco Bye-Laws" shall mean the Memorandum of Association and Bye-Laws of
     Newco.

     "Participant" shall mean SafeScience or Elan, as the case may be, and
     "Participants" shall mean both of the Participants together.

     "Party" shall mean Elan, SafeScience, or Newco, as the case may be, and
     "Parties" shall mean all such parties together.

     "Person" shall mean an individual, partnership, corporation, limited
     liability company, business trust, joint stock company, trust,
     unincorporated association, joint venture, governmental entity or authority
     or other entity of whatever nature.

     "Permitted Transferee" shall mean any Affiliate or subsidiary of Elan, EIS,
     or SafeScience, to whom this Agreement may be assigned, in whole or in
     part, pursuant to the terms hereof or in the case of Elan, EIS, a special
     purpose financing entity created by Elan or EIS.

     "Product" shall mean the Initial Formulation and Initial Mode of
     Administration of the Compound in the Field, and such other formulations
     and modes of administration of the Compound as may be agreed to by the
     Steering Committee in accordance with Clause 2.4.

     "Project" shall mean all activity as undertaken by or on behalf of Newco in
     order to develop the Products in accordance with the Business Plan.

     "Registration Rights Agreements" shall mean the Registration Rights
     Agreements of even date herewith relating to Newco and SafeScience,
     respectively.

     "Regulatory Application" shall mean any regulatory application or any other
     application for marketing approval for a Product, which Newco will file in
     any country of the Territory, including any supplements or amendments
     thereto.

     "Regulatory Approval" shall mean the final approval to market a Product in
     any country of the Territory, and any other approval which is required to
     launch the Product in the normal course of business.

                                       8
<PAGE>

     "RHA" shall mean any relevant government health authority (or successor
     agency thereof) in any country of the Territory whose approval is necessary
     to market a Product in the relevant country of the Territory.

     "R&D Plan" shall mean the program of work, including the budget, agreed by
     the Steering Committee as part of the Business Plan that relates to the
     formulation, biopharmaceutical and Phase II clinical development of the
     Products and such further research and development work as may be agreed by
     the Steering Committee from time to time.

     "R&D Program(s)" shall mean any research and development program(s)
     commenced by Newco pursuant to the Project.

     "R&D Term" shall mean the period beginning on the Closing Date and ending
     on the date which is second anniversary thereof.

     "SafeScience" shall mean SafeScience, Inc., a Nevada corporation and its
     Affiliates.

     "SafeScience Directors" has the meaning set forth in Clause 5.

     "SafeScience Improvements" has the meaning assigned thereto in the
     SafeScience License Agreement.

     "SafeScience Intellectual Property" has the meaning assigned thereto in the
     SafeScience License Agreement.

     "SafeScience License Agreement" shall mean the license agreement between
     SafeScience and Newco, of even date herewith, attached hereto in Schedule
     2.

     "SafeScience Securities Purchase Agreement" shall mean that certain
     securities purchase agreement, dated June 22, 2001, by and between
     SafeScience and EIS.

     "Securities Act" shall mean the Securities Act of 1933, as amended.

     "Shares" shall mean the Common Shares and Preference Shares of Newco.

     "Shareholder" shall mean any of EIS, SafeScience, any Permitted Transferee,
     or any other Person who subsequently becomes bound by this Agreement as a
     holder of the Shares, and "Shareholders" shall mean all of the Shareholders
     together.

     "Technological Competitor of Elan" shall have the meaning as such term is
     defined in the Elan License Agreement.

     "Term" shall mean the term of this Agreement.

                                       9
<PAGE>

     "Territory" shall mean all of the countries of the world.

     "United States Dollar" and "US$" and "$" shall mean the lawful currency of
     the United States of America.

1.2  In addition, the following definitions have the meanings in the Clauses
     corresponding thereto, as set forth below.


     Definition                          Clause

     "AAA"                                  18.4
     "Alternative Compound"                  2.4
     "Alternative Indication"                2.4
     "Buyout Option"                        19.4
     "Closing"                               4.2
     "Common Shares"                     Recital
     "Confidential Information"             21.1
     "Co-sale Notice"                       16.4
     "Expert"                               18.3
     "Initial Formulation"                   2.3
     "Initial Indication"                    2.3
     "Initial Mode of Administration"        2.3
     "Notice of Exercise"                   16.3
     "Notice of Intention"                  16.3
     "Offered Shares"                       16.3
     "Offer Price"                          16.3
     "Preference Shares"                 Recital
     "Proposing Participant"                19.4
     "Proposing Participant Price:          19.6
     "Purchase Price"                       19.6
     "Recipient Participant"                19.4
     "Recipient Participant Price"          19.6
     "Remaining Shareholders"               16.4
     "Relevant Event"                       19.2
     "Selling Shareholder"                  16.3
     "Steering Committee"                  5.2.1
     "Tag-Along Right"                      16.4
     "Transaction Proposal"                 16.3
     "Transfer"                             16.1
     "Transferee Terms"                     16.4
     "Transferring Shareholder"             16.4


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

                                       10
<PAGE>

1.4  Unless the context otherwise requires, reference to a recital, article,
     paragraph, provision, clause or schedule is to a recital, article,
     paragraph, provision, clause or schedule of or to this Agreement.

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

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

1.7  Unless the context or subject otherwise requires, references to words in
     one gender include references to the other genders.

1.8  Capitalized terms used but not defined herein shall have the meanings
     assigned thereto in the Definitive Documents, if defined therein.


                                   CLAUSE 2

                                   BUSINESS

2.1  The primary objective of the Agreement is to regulate the business of the
     development, testing and registration of Products in the Territory and to
     achieve such other objectives as are set forth in this Agreement.  The
     focus of the Business will be the development of the Products using the
     Elan Intellectual Property, the SafeScience Intellectual Property and the
     Newco Intellectual Property to agreed-upon specifications and timelines.

2.2  The central management and control of Newco shall be exercised in Bermuda
     and shall be vested in the Directors and such Persons as they may delegate
     the exercise of their powers. The majority of the Board shall be resident
     in Bermuda. The Parties shall use their best endeavors to ensure the sole
     residence of Newco in Bermuda, all meetings of the Directors are held in
     Bermuda or other jurisdictions outside the United States, and generally to
     ensure that Newco is treated as resident for taxation purposes in Bermuda
     and Newco is liable to taxation in Bermuda and not in any other
     jurisdiction.

2.3  The initial formulation of the Compound shall be a [...***...] formulation
     ("Initial Formulation") and the initial mode of administration for the
     Compound shall be [...***...] (the "Initial Mode of Administration"). The
     Steering Committee shall use reasonable efforts to select an indication
     within the Field for the next phase of clinical trials for the Compound
     within 90 days of the Closing Date or such other period as may be agreed by
     SafeScience and Elan in writing (the "Initial Indication").

                                       11
<PAGE>

2.4  The Steering Committee may determine, by unanimous agreement, that any R&D
     Program commenced as part of the Project in respect of the Compound and/or
     the Initial Indication should be terminated where the Compound fails to
     meet agreed specifications in respect of the Initial Indication or where
     the R&D Program reveals scientific or technical or intellectual property
     issues which would have a material adverse effect on the development and
     commercialization of the Compound in the Field in the Territory.

     In either such event, the Steering Committee shall review in good faith the
     possibility of (a) undertaking clinical development for an alternative
     indication within the Field ("Alternative Indication") to be mutually
     agreed to by SafeScience and Elan or (b) in-licensing to Newco an
     alternative compound or alternative compounds from SafeScience, or in-
     licensing or acquiring the rights from one or more third parties to an
     alternative compound or alternative compounds ("Alternative Compound").
     The selection of an Alternative Compound and/or Alternative Indication
     shall have regard to the following criteria:

     2.4.1  the market potential of the Alternative Compound and the most
            appropriate indication within the Field in the Territory and/or the
            market potential of the Alternative Indication in the Territory, as
            the case may be, including consideration of the current and
            anticipated competition, as estimated by the Steering Committee;

     2.4.2  the development cost of the Alternative Compound in the Field and/or
            the Alternative Indication in the Territory, as estimated by the
            Steering Committee;

     2.4.3  the results of regulatory and intellectual property due diligence
            primarily focused on determining whether there are any regulatory or
            intellectual property issues which might impact the development and
            marketing of the Alternative Compound and/or the Alternative
            Indication in the Field in the Territory; and

     2.4.4  whether the Alternative Compound and/or Alternative Indication is
            subject to contractual obligations of Elan or SafeScience existing
            at the date of nomination, which would restrict the conduct by Newco
            of an R&D Program in the Field in the Territory or the ability of
            Newco to commercialize the Alternative Compound in the Field in the
            Territory and/or the Alternative Indication in the Territory.

     If the Steering Committee should agree to (i) in-license to Newco an
     Alternative Compound from SafeScience or from a third party; and/or (ii)
     select an Alternative Indication, the Parties shall agree upon the mode of
     administration for the relevant Alternative Compound and/or Alternative
     Indication and discuss in

                                       12
<PAGE>

     good faith whether any amendments are required to the Definitive Documents
     as a result of such approval.

     The Steering Committee shall prioritize the R&D Programs with respect to
     the Compounds approved hereunder.

2.5  If EIS and SafeScience determine, in their respective sole discretion, that
     the Initial Formulation and the Initial Mode of Administration together
     with (i) the Compound or Alternative Compound; and (ii) the Initial
     Indication or Alternative Indication, has successfully completed Phase
     II/III clinical trials and has otherwise demonstrated adequate efficacy,
     then upon the unanimous vote of the Steering Committee, Newco shall
     commence development of an appropriate oral formulation for the Compound
     with respect to such indication within the Field, selected and approved by
     the Steering Committee.

                                  [...***...]




                                   CLAUSE 3

                        REPRESENTATIONS AND WARRANTIES

3.1  Representations and Warranties of Newco: Newco hereby represents and
     ---------------------------------------
     warrants to each of the Shareholders as follows, as of the Closing Date:

     3.1.1  Organization:  Newco is an exempted company duly organized, validly
            -------------
            existing under the laws of Bermuda, and has all the requisite
            corporate power and authority to own and lease its properties, to
            carry on its business as presently conducted and as proposed to be
            conducted.

     3.1.2  Capitalization:  The authorized capital Shares of Newco consists of
            ---------------
            6,000 Common Shares and 6,000 Preference Shares. Prior to the
            Closing Date, no shares of capital stock of Newco have been issued.

     3.1.3  Authorization:  The execution, delivery and performance by Newco of
            --------------
            this Agreement, including the issuance of the Shares, have been duly
            authorized by all requisite corporate actions; this Agreement has
            been duly executed and delivered by Newco and is the valid and
            binding obligation of Newco, enforceable against Newco in accordance
            with its terms except as limited by applicable bankruptcy,
            insolvency, reorganization and other laws of general application
            affecting the enforcement of creditors' rights generally, and except
            as enforcement of rights to indemnity and contribution hereunder may
            be limited by United States federal or state securities laws or
            principles of public policy. The Shares, when issued as

                                       13
<PAGE>

            contemplated hereby, will be validly issued and outstanding, fully
            paid and non-assessable and not subject to pre-emptive or any other
            similar rights of the Shareholders or others.

     3.1.4  No Conflicts:  The execution, delivery and performance by Newco of
            ------------
            this Agreement, the issuance, sale and delivery of the Shares, and
            compliance with the provisions hereof by Newco, will not:

            (i)   violate any provision of applicable law, statute, rule or
                  regulation applicable to Newco or any ruling, writ,
                  injunction, order, judgment or decree of any court,
                  arbitrator, administrative agency or other governmental body
                  applicable to Newco or any of its properties or assets;

            (ii)  conflict with or result in any breach of any of the terms,
                  conditions or provisions of, or constitute (with notice or
                  lapse of time or both) a default (or give rise to any right of
                  termination, cancellation or acceleration) under the Newco
                  Bye-Laws or any material contract to which Newco is a party,
                  except where such violation, conflict or breach would not,
                  individually or in the aggregate, have a material adverse
                  effect on Newco; or

            (iii) result in the creation of, any Encumbrance upon any of the
                  properties or assets of Newco.

     3.1.5  Approvals:  No permit, authorization, consent or approval of or by,
            ---------
            or any notification of or filing with, any Person is required in
            connection with the execution, delivery or performance of this
            Agreement by Newco. Newco has full authority to conduct its business
            as contemplated in the Business Plan and the Definitive Documents.

     3.1.6  Disclosure:  This Agreement does not contain any untrue statement
            -----------
            of a material fact or omit to state any material fact necessary to
            make the statements contained herein not misleading. Newco is not
            aware of any material contingency, event or circumstance relating to
            its business or prospects, which could have a material adverse
            effect thereon, in order for the disclosure herein relating to Newco
            not to be misleading in any material respect.

     3.1.7  No Business; No Liabilities: Newco has not conducted any business or
            ----------------------------
            incurred any liabilities or obligations prior to the Closing Date,
            except solely in connection with its organization and formation.

3.2  Representations and Warranties of the Shareholders:  Each of the
     ---------------------------------------------------
     Shareholders hereby severally but not jointly represents and warrants to
     Newco as follows, as of the Closing Date:

                                       14
<PAGE>

     3.2.1  Organization:  Such Shareholder is a corporation duly organized and
            ------------
            validly existing under the laws of its jurisdiction of organization
            and has all the requisite corporate power and authority to own and
            lease its respective properties, to carry on its respective business
            as presently conducted and to carry out the transactions
            contemplated hereby.

     3.2.2  Authority:  Such Shareholder has full legal right, power and
            ----------
            authority to enter into this Agreement and to perform its
            obligations hereunder, which have been duly authorized by all
            requisite corporate action. This Agreement is the valid and binding
            obligation of such Shareholder, enforceable against it in accordance
            with its terms except as limited by applicable bankruptcy,
            insolvency, reorganization and other laws of general application
            affecting the enforcement of creditors' rights generally, and except
            as enforcement of rights to indemnity and contribution hereunder may
            be limited by United States federal or state securities laws or
            principles of public policy.

     3.2.3  No Conflicts:  The execution, delivery and performance by such
            ------------
            Shareholder of this Agreement, purchase of the Shares, and
            compliance with the provisions hereof by such Shareholder will not:

            (i)   violate any provision of applicable law, statute, rule or
                  regulation known by and applicable to such Shareholder or any
                  ruling, writ, injunction, order, judgment or decree of any
                  court, arbitrator, administrative agency or other governmental
                  body applicable to such Shareholder or any of its properties
                  or assets;

            (ii)  conflict with or result in any breach of any of the terms,
                  conditions or provisions of, or constitute (with notice or
                  lapse of time or both) a default (or give rise to any right of
                  termination, cancellation or acceleration) under the charter
                  or organizational documents of such Shareholder or any
                  material contract to which such Shareholder is a party, except
                  where such violation, conflict or breach would not,
                  individually or in the aggregate, have a material adverse
                  effect on such Shareholder; or

            (iii) result in the creation of, any Encumbrance upon any of the
                  properties or assets of such Shareholder.

     3.2.4  Approvals:  No permit, authorization, consent or approval of or by,
            ----------
            or any notification of or filing with, any Person is required in
            connection with the execution, delivery or performance of this
            Agreement by such Shareholder, other than the consent of Wayne State
            University and the Barbara Ann Karmanos Cancer Institute, which
            SafeScience hereby represents and warrants has been granted as of
            the Closing Date.

                                       15
<PAGE>

     3.2.5  Investment Representations:  Such Shareholder is sophisticated in
            --------------------------
            transactions of this type and capable of evaluating the merits and
            risks of its investment in Newco. Such Shareholder has not been
            formed solely for the purpose of making this investment and such
            Shareholder is acquiring the Common Shares and Preference Shares for
            investment for its own account, not as a nominee or agent, and not
            with the view to, or for resale in connection with, any distribution
            of any part thereof. Such Shareholder understands that the Shares
            have not been registered under the Securities Act or applicable
            state and foreign securities laws by reason of a specific exemption
            from the registration provisions of the Securities Act and
            applicable state and foreign securities laws, the availability of
            which depends upon, among other things, the bona fide nature of the
            investment intent and the accuracy of such Shareholders'
            representations as expressed herein. Such Shareholder understands
            that no public market now exists for any of the Shares and that
            there is no assurance that a public market will ever exist for such
            Shares.


                                   CLAUSE 4

                           AUTHORIZATION AND CLOSING

4.1  Newco has authorized the issuance to (i) EIS of 2,388 Preference Shares and
     (ii) SafeScience of 6,000 Common Shares and 3,612 Preference Shares,
     issuable as provided in Clause 4.3 hereof.

4.2  SafeScience and EIS hereby subscribe for the number of Shares set forth in
     Clause 4.1 and shall pay to Newco in consideration therefor, by wire
     transfer of immediately available funds (to a bank account established by
     Newco in connection with Completion) the subscription amounts each as
     provided in Clause 4.4.1.

4.3  The closing (the "Closing") shall take place at the offices of Reitler
     Brown, LLC at 800 Third Avenue, New York, New York 10022 on the Closing
     Date or such other places if any, as the Parties may agree and shall occur
     contemporaneously with the closing under the SafeScience Securities
     Purchase Agreement.

4.4  At the Closing, each of the Shareholders shall take or (to the extent
     within its powers) cause to be taken the following steps at Directors and
     shareholder meetings of Newco, or such other meetings, as appropriate:

     4.4.1  Newco shall issue and sell to EIS, and EIS shall purchase from
            Newco, upon the terms and subject to the conditions set forth
            herein, 2,388 Preference Shares for an aggregate purchase price of
            $2,985,000;

                                       16
<PAGE>

            Newco shall issue and sell to SafeScience, and SafeScience shall
            purchase from Newco, upon the terms and conditions set forth herein,
            (i) 6,000 Common Shares for an aggregate purchase price of
            $7,500,000 and (ii) 3,612 Preference Shares for an aggregate
            purchase price of $4,515,000;

     4.4.2  the Parties shall execute and deliver to each other, as applicable,
            certificates in respect of the Common Shares and Preference Shares
            described above and any other certificates, resolutions or documents
            which the Parties shall reasonably require;

     4.4.3  the adoption by Newco of Newco Bye-Laws;

     4.4.4  the appointment of Kevin Insley, Bradley J. Carver, John W. Burns,
            Graham Wood and Warren Cabral as Directors of Newco; and

     4.4.5  the resignation of all directors and the secretary of Newco holding
            office prior to the execution of this Agreement and delivery of
            written confirmation under seal by each Person so resigning that he
            has no claim or right of action against Newco and that Newco is not
            in any way obligated or indebted to him.

4.5  Exemption from Registration:
     ----------------------------

     The Shares will be issued under an exemption or exemptions from
     registration under the Securities Act.  Accordingly, the certificates
     evidencing the Shares issued to SafeScience shall, upon issuance, contain
     the following legend:

     THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
     UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
     SECURITIES LAWS OF A STATE OR OTHER JURISDICTION AND MAY NOT
     UNDER ANY CIRCUMSTANCES BE SOLD, TRANSFERRED, OR OTHERWISE
     DISPOSED OF (OTHER THAN TO AN AFFILIATE OF THE ORIGINAL
     HOLDER OR AS OTHERWISE PERMITTED IN THE AGREEMENT PURSUANT
     TO WHICH THEY WERE ISSUED) EXCEPT PURSUANT TO (i) AN
     EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
     AND ANY APPLICABLE STATE SECURITIES OR BLUE SKY LAWS, OR
     (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE SECURITIES
     ACT (OR ANY SIMILAR RULE UNDER THE SECURITIES ACT RELATING
     TO THE DISPOSITION OF SECURITIES) OR (III) THE CORPORATION
     SHALL HAVE RECEIVED AN OPINION OF COUNSEL FOR THE HOLDER OF
     THESE SECURITIES REASONABLY SATISFACTORY TO THE

                                       17
<PAGE>

     CORPORATION THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT
     OR APPLICABLE STATE SECURITIES LAWS.

4.6  Newco shall use reasonable efforts to file any documents that require
     filing with the Registrar of Companies in Bermuda within the prescribed
     time limits.  EIS and SafeScience shall provide all reasonable cooperation
     to Newco in relation to the matters set forth in this Clause 4.6.

4.7  In the event that EIS exercises the EIS Exchange Right, Newco and the
     Participants shall, immediately upon such exercise, take all necessary
     steps to ensure that EIS obtains full legal right, title and interest in
     and to the Preference Shares covered thereby.

     The Parties acknowledge that such Shares have been pledged to EIS pursuant
     to the SafeScience Securities Purchase Agreement and that EIS has physical
     possession of such Shares.  Upon exercise by EIS of the EIS Exchange Right,
     EIS shall be entitled to take full legal ownership of, and title to, such
     Shares, in accordance with the applicable provisions of the SafeScience
     Securities Purchase Agreement.


                                   CLAUSE 5

                         DIRECTORS; STEERING COMMITTEE

5.1  Directors:
     ---------

     5.1.1  Prior to the exercise of the EIS Exchange Right, the Board shall be
            composed of five Directors.

            SafeScience shall have the right to nominate four directors of Newco
            ("SafeScience Directors"), provided that at least two such directors
            shall be residents of Bermuda, and EIS shall have the right to
            nominate one Director of Newco ("EIS Director") which Director, save
            as further provided herein, shall only be entitled to 15% of the
            votes of the Board.

            In the event that the EIS Exchange Right is exercised by EIS within
            2 years following the Closing Date, the EIS Director shall only be
            entitled to 15% of the votes of the Board until the expiry of 2
            years from the Closing Date.

            In the event that the EIS Exchange Right is exercised by EIS at any
            time after two years following the Closing Date, or upon the expiry
            of 2 years following the Closing Date where the EIS Exchange Right
            has been exercised by EIS within 2 years following the Closing Date,
            each of

                                       18
<PAGE>

            SafeScience and EIS shall cause the Board to be reconfigured so that
            an equal number of Directors shall be designated by EIS and
            SafeScience and that each of the Directors shall have equal voting
            power.

     5.1.2  If EIS removes the EIS Director, or SafeScience removes any of the
            SafeScience Directors, EIS or SafeScience, as the case may be, shall
            indemnify the other Shareholder against any claim by such removed
            Director arising from such removal.

     5.1.3  The Directors shall meet not less than three times in each Financial
            Year and all Board meetings shall be held in Bermuda to the extent
            required pursuant to the laws of Bermuda or to ensure the sole
            residence of Newco in Bermuda.

     5.1.4  At any such meeting, the presence of the EIS Director and at least
            two of the SafeScience Directors shall be required to constitute a
            quorum and, subject to Clause 17 hereof, the affirmative vote of a
            majority of the Directors present at a meeting at which such a
            quorum is present shall constitute an action of the Directors. In
            the event of any meeting being inquorate, the meeting shall be
            adjourned for a period of seven days. A notice shall be sent to the
            EIS Director and the SafeScience Directors specifying the date, time
            and place where such adjourned meeting is to be held and reconvened.

     5.1.5  On the Closing Date, SafeScience may appoint one of the SafeScience
            Directors to be the chairman of Newco. The chairman of Newco shall
            hold office until the earlier of:

            (i)   the first meeting of the Board following the exercise by EIS
                  of the EIS Exchange Right, where the EIS Exchange Right has
                  been exercised by EIS after two years following the Closing
                  Date; or

            (ii)  the first meeting of the Board following the expiry of 2 years
                  following the Closing Date where the EIS Exchange Right has
                  been exercised by EIS within 2 years following the Closing
                  Date

            (in each case the "Chairman Status Board Meeting")

            After the Chairman Status Board Meeting, each of EIS and
            SafeScience, beginning with EIS at the Chairman Status Board
            Meeting, shall have the right, exercisable alternatively, of
            nominating one Director to be chairman of Newco for a term of one
            year.

            If the chairman is unable to attend any meeting of the Board held
            prior to the Chairman Status Board Meeting, the SafeScience
            Directors shall be entitled to appoint another SafeScience Director
            to act as chairman in his place at the meeting.

                                       19
<PAGE>

            If the chairman of Newco is unable to attend any meeting of the
            Board held after the Chairman Status Board Meeting, the Directors
            shall be entitled to appoint another Director to act as chairman of
            Newco in his place at the meeting.

     5.1.6  In case of an equality of votes at a meeting of the Board, the
            chairman of Newco shall be entitled to only one vote as any other
            director and shall not be entitled to a second or casting vote. In
            the event of continued deadlock, the Board shall resolve the
            deadlock pursuant to the provisions set forth in Clause 18.


5.2  Steering Committee
-----------------------

     5.2.1  Newco's board of directors shall appoint a steering committee (the
            "Steering Committee") to consist initially of four members, two of
            whom shall be nominated by EIS and two of whom shall be nominated by
            SafeScience, and each of whom shall be entitled to one vote, whether
            or not present at any Steering Committee meeting. Decisions of the
            Steering Committee shall require approval of at least one EIS
            nominee on the Steering Committee and one SafeScience nominee on the
            Steering Committee. Each of EIS and SafeScience shall be entitled to
            remove any of their nominees to the Steering Committee and appoint a
            replacement therefor. The number of members of the Steering
            Committee may be altered if agreed to by a majority of the directors
            of Newco; provided that, each of EIS and SafeScience shall be
            entitled to appoint an equal number of members to the Steering
            Committee.

     5.2.2  The Steering Committee shall be responsible for, among other things:

            5.2.2.1  devising, implementing and reviewing strategy for the
                     Project.

            5.2.2.2  designing that portion of the Business Plan that relates to
                     the Project;

            5.2.2.3  establishing a joint Project team consisting of an equal
                     number of team members from EIS and SafeScience, including
                     one Project leader from each of EIS and SafeScience; and

            5.2.2.4  implementing such portion of the Business Plan that relates
                     to the Project.

     5.2.3  In the event of any dispute amongst the Steering Committee that
            remains unresolved for a period of 15 days or such other period as
            may be agreed to by the Steering Committee, the dispute will be
            referred to a designated senior officer of each of Elan and
            SafeScience, and thereafter, in the event

                                       20
<PAGE>

            of continued deadlock, pursuant to the deadlock provisions set forth
            in Clause 18.


                                   CLAUSE 6

                         THE BUSINESS PLAN AND REVIEWS

6.1  The Directors shall meet together as soon as reasonably practicable after
     the Closing Date and shall agree upon and approve the Business Plan for the
     current Financial Year within 90 days of the Closing Date.

6.2  The Business Plan shall be subject to ongoing review by the Directors and
     the approval of the EIS Director and the SafeScience Directors on a
     quarterly basis.

6.3  It is estimated that Newco will require [...***...], to commence and
     continue the development of the Products (the "Development Funding").

     Subject to Clause 6.4, during the R&D Term, EIS and SafeScience may provide
     to Newco, by way of an unconditional gift to Newco, as contributed surplus
     or loan, as may be agreed to by both EIS and SafeScience, up to an
     aggregate maximum amount [...***...], such Development Funding to be
     provided, in whole or in part, by EIS and SafeScience on a pro rata basis,
     based on their respective equity interests in Newco, at the time of each
     such Development Funding, on a fully-diluted basis.

6.4  Neither Participant shall be obliged to provide Development Funding to
     Newco in the absence of quarterly approval of the Business Plan and a
     determination by each Participant, in its sole discretion, that Development
     Funding shall be provided for the development of the Products.


                                   CLAUSE 7

                         RESEARCH AND DEVELOPMENT WORK


7.1  Subject to the provisions of Clause 6.3 and Clause 6.4, each of Elan and
     SafeScience may, at its respective discretion, provide research and
     development services to Newco, at the request of Newco and as articulated
     in the Business Plan, in furtherance of the development of the Products and
     cultivation of patent rights and know-how related to the Elan Intellectual
     Property, SafeScience Intellectual Property and Newco Intellectual
     Property.

7.2  Subject to Clause 7.3, the cost of any research and development work
     undertaken by Elan and/or SafeScience shall be calculated based on a rate
     of [...***...] per

                                       21
<PAGE>

     FTE (Full Time Equivalent Employee Rate) per year (an FTE being the
     equivalent of [...***...] hours per year per employee).

     Research and development work that is sub-contracted by Elan or SafeScience
     to third-party providers shall be charged by Elan or SafeScience to Newco
     at the amount invoiced by the relevant third party provider.

     The cost charged by Elan and/or SafeScience to Newco in respect of the
     provision by Elan and/or SafeScience to Newco of any clinical trial
     supplies pursuant to the Project shall be agreed by the Parties as soon as
     practicable in advance of supply to Newco.

7.3  Newco shall pay SafeScience and Elan for any research and development work
     carried out by them on behalf of Newco at the end of each month during the
     R&D Program, subject to the proper vouching of research and development
     work and expenses. An invoice shall be issued to Newco by SafeScience or
     Elan, as applicable, by the 15/th/ day of the month following the month in
     which work was performed.

7.4  Elan and SafeScience shall permit Newco or its duly authorized
     representative on reasonable notice and at any reasonable time during
     normal business hours to have access to inspect and audit the accounts and
     records of Elan or SafeScience and any other book, record, voucher, receipt
     or invoice relating to the calculation or the cost of the R&D Program and
     to the accuracy of the reports which accompanied them.

     Any such inspection of Elan's or SafeScience's records, as the case may be,
     shall be at the expense of Newco, except that if such inspection reveals an
     overpayment in the amount paid to Elan or SafeScience, as the case may be,
     for the R&D Program hereunder in any Financial Year of 5% or more of the
     amount due to Elan or SafeScience, as the case may be, then the expense of
     such inspection shall be borne solely by Elan or SafeScience, as the case
     may be, instead of by Newco.

     Any surplus over the sum properly payable by Newco to Elan or SafeScience,
     as the case may be, shall be paid promptly by Elan or SafeScience, as the
     case may be, to Newco.

     If such inspection reveals a deficit in the amount of the sum properly
     payable to Elan or SafeScience, as the case may be, by Newco, Newco shall
     pay the deficit to Elan or SafeScience, as the case may be.


                                    CLAUSE 8

                               COMMERCIALIZATION

                                       22
<PAGE>

8.1  [...***...] Newco shall diligently pursue the research, development and
     prosecution of the Product, as provided in the Business Plan.


8.2  At such time as Newco notifies Elan in writing that Newco in good faith
     intends to commercialize a Product, EIS shall have a first option to
     negotiate the terms of any agreement for the commercialization of such
     Product, which option shall be exercised [...***...] of Elan's receipt of
     such written notification from Newco (the "EIS/Newco Option"). If EIS
     elects to enter into such negotiations, the Parties shall, on an exclusive
     negotiations basis, negotiate in good faith the terms of the agreement for
     the commercialization of such Product by EIS.

     If, despite good faith negotiations, EIS and Newco do not reach agreement
     within 120 days from EIS' exercise of the EIS/Newco Option, then Newco
     shall be free for a period of [...***...] thereafter to enter into
     negotiations with a third party (other than a Technological Competitor of
     Elan) to agree to terms upon which the third party would commercialize the
     Product in the Territory, provided that such terms when taken as a whole,
     are not more favorable to the third party than the principal terms of the
     last written proposal offered by Newco to EIS or by EIS to Newco, as the
     case may be.

     If Newco has not entered into an agreement with a third party within the
     [...***...] period described above, the EIS/Newco Option shall be deemed to
     have re-commenced upon the same terms as set forth herein.


                                    CLAUSE 9

                   OWNERSHIP OF INTELLECTUAL PROPERTY RIGHTS

9.1  The Parties acknowledge and agree to be bound by the provisions of Clause 3
     of the License Agreements, which set forth the agreement between the
     Parties in relation to the ownership of the Elan Intellectual Property, the
     SafeScience Intellectual Property and the Newco Intellectual Property
     respectively.


                                   CLAUSE 10

                         INTELLECTUAL PROPERTY RIGHTS


10.1 Patent Prosecution and Maintenance:
     -----------------------------------

     10.1.1  Elan, at its sole discretion [...***...], may:

                                       23
<PAGE>

             (1)  secure the grant of any patent applications within the Elan
                  Intellectual Property in the Field;

             (2)  file and prosecute patent applications on patentable
                  inventions and discoveries relating to the same;

             (3)  defend all such applications against third party oppositions;
                  and

             (4)  maintain in force any issued letters patent relating to the
                  same.

             Elan shall have the right in its discretion to control such filing,
             prosecution, defense and maintenance, provided that Newco and
             SafeScience at their request shall be provided with copies of all
             documents relating to such filing, prosecution, defence and
             maintenance in sufficient time to review such documents and comment
             thereon prior to filing.

     10.1.2  SafeScience, at its sole discretion [...***...], may:

             (1)  secure the grant of any patent applications within the
                  SafeScience Intellectual Property in the Field;

             (2)  file and prosecute patent applications on patentable
                  inventions and discoveries relating to the same;

             (3)  defend all such applications against third party oppositions;
                  and

             (4)  maintain in force any issued letters patent that relate to the
                  same.

             SafeScience shall have the right in its discretion to control such
             filing, prosecution, defense and maintenance provided that Elan and
             Newco at their request shall be provided with copies of all
             documents relating to such filing, prosecution, defense and
             maintenance in sufficient time to review such documents and comment
             thereon prior to filing.

     10.1.3  All results of research and development pursuant to the Project
             shall be promptly disclosed by each Party to the Steering
             Committee.

             The Steering Committee shall review on an ongoing basis whether
             such results constitute SafeScience Intellectual Property, Elan
             Intellectual Property or Newco Intellectual Property having regard
             to the provisions of this Agreement and the License Agreements.

             In the event that the disclosing Party informs the other Parties
             that it does not intend to file patent applications on disclosed
             patentable inventions and discoveries, or maintain issued patents
             which are SafeScience Intellectual Property or Elan Intellectual
             Property, as the case may be, that

                                       24
<PAGE>

             relate to the Products or the Field in one or more countries in the
             Territory or fails to file such an application within a reasonable
             period of time, Newco or the other Party (other than the disclosing
             party) may request such disclosing Party to file and prosecute such
             patent application(s) at Newco's expense.

             The disclosing Party shall comply with such request unless the
             disclosing party believes such request is without merit.

     10.1.4  Newco, at its sole discretion [...***...], may:

             (1)  secure the grant of any patent applications within the Newco
                  Intellectual Property in the Field;

             (2)  file and prosecute patent applications on patentable
                  inventions and discoveries relating to the same;

             (3)  defend all such applications against third party oppositions;
                  and

             (4)  maintain in force any issued letters patent that relate to the
                  same.

             Newco shall have the right in its discretion to control such
             filing, prosecution, defense and maintenance provided that Elan and
             SafeScience at their request shall be provided with copies of all
             documents relating to such filing, prosecution, defense and
             maintenance in sufficient time to review such documents and comment
             thereon prior to filing.

     10.1.5  In the event that Newco informs both Elan and SafeScience that it
             does not intend to file an application on disclosed patentable
             inventions and discoveries or maintain any issued patent within the
             Newco Intellectual Property, Elan shall have the right to file and
             prosecute such patent applications on inventions which relate
             predominantly to the Elan Intellectual Property, and SafeScience
             shall have the right to file and prosecute and maintain such patent
             applications on inventions which relate predominantly to the
             SafeScience Intellectual Property, and Elan and SafeScience agree
             to negotiate in good faith on the course of action to be taken with
             respect to Newco Intellectual Property that relates equally to both
             Elan Intellectual Property and SafeScience Intellectual Property.

     10.1.6  Each Participant shall notify the Steering Committee in a timely
             manner of any decision to abandon a pending or issued patent or
             otherwise fail to take such actions as enumerated in Clause 10.1.1
             or 10.1.2, as applicable, relating to the Compounds, the Products,
             or the Field. The other Party (that is SafeScience in the case that
             Elan proposes to abandon; and Elan in the case that SafeScience
             proposes to abandon) shall have the option of requesting that Elan,
             in the case of the Elan Patents, or SafeScience, in the

                                       25
<PAGE>

          case of the SafeScience Patents, (i) continue the prosecution or
          maintenance of such pending or issued patent with respect to the Elan
          Patents or the SafeScience Patents, as the case may be, at Newco's
          expense; or (ii) take such actions as enumerated in Section 10.1.1 or
          10.1.2, as applicable; provided that such decision with respect to
          either (i) or (ii), as the case may be, is commercially reasonable.

10.2 Enforcement:
     ------------

     10.2.1  The Parties shall promptly inform each other in writing of any
             actual or alleged unauthorized use of Elan Intellectual Property,
             the SafeScience Intellectual Property or the Newco Intellectual
             Property by a third party of which it becomes aware and provide the
             others with any available evidence of such unauthorized use.

     10.2.2  At its option, as the case may be, Elan or SafeScience shall have
             the first option to enforce its rights at its own expense and for
             its own benefit against any unauthorized use of its respective
             intellectual property (the Elan Intellectual Property or the
             SafeScience Intellectual Property, as the case may be) in the
             Field.

             At the enforcing party's request, the other Parties shall cooperate
             with such action.

             Should Elan or SafeScience decide not to enforce its rights under
             the Elan Intellectual Property or the SafeScience Intellectual
             Property respectively, against such unauthorized use in the Field,
             within a reasonable period but in any event within 20 days after
             receiving written notice of such actual or alleged unauthorized
             use, Newco or the other Party (other than the Party deciding not to
             enforce its rights) may in its discretion request the respective
             intellectual property owner to initiate such proceedings in Newco's
             name, [...***...] for Newco's benefit. Elan or SafeScience, as the
             case may be, shall cooperate in bringing such action on Newco's
             behalf unless Elan or SafeScience believe in good faith that such
             an action is without merit.

             Alternatively, Elan or SafeScience may agree to enforce either or
             both such Party's intellectual property in their joint names and
             shall reach agreement as to the proportion in which they shall
             share the proceeds of any such action, and the expense of any costs
             not recovered,

     10.2.3  Newco shall have the first right but not the obligation to bring
             suit or otherwise take action against any alleged infringement of
             the Newco Intellectual Property or alleged unauthorized use of the
             Newco Intellectual Property.

                                       26
<PAGE>

             In the event that Newco takes such action, Newco shall do so at its
             own cost and expense and all damages and monetary award recovered
             in or with respect to such action shall be the property of Newco.

             Newco shall keep Elan and SafeScience informed of any action in a
             timely manner so as to enable SafeScience and Elan to provide input
             in any such action and Newco shall reasonably take into
             consideration any such input.

             At Newco's request, the Parties shall co-operate with any such
             action at Newco's cost and expense.

     10.2.4  In the event that Newco does not bring suit or otherwise take
             action against an infringement of any Newco Intellectual Property
             or misappropriation of the Newco Intellectual Property:

          (1)  if only one Participant determines to pursue such suit or take
               such action at its own cost and expense, it shall be entitled to
               all damages and monetary award recovered in or with respect to
               such action; and

          (2)  if the Participants pursue such suit or action jointly outside of
               Newco, they shall negotiate in good faith an appropriate
               allocation of costs, expenses and recovery amounts. At the
               Participants' request, Newco shall co-operate with any such
               action at the Participants' cost and expense.

10.3  Defense:
      --------

     10.3.1  In the event that a claim is or proceedings are threatened or
             brought against Newco by a third party alleging that the
             manufacture, sale, distribution or use of a Product in the
             Territory or use of the Elan Intellectual Property, the SafeScience
             Intellectual Property, or Newco Intellectual Property, as the case
             may be, infringes the intellectual property rights of such third
             party, Newco shall promptly advise the other Parties of such threat
             or suit.

     10.3.2  Save in respect of claims by Newco against either Participant or by
             a third party against Newco where there has been a breach of
             representation or warranty under the Elan License Agreement or the
             SafeScience License Agreement, by Elan or SafeScience,
             respectively, and, in the case of SafeScience, any claim of
             infringement or proceeding based on infringement brought against
             Elan or Newco by any third party arising in connection with the
             Platt and Wayne State Agreements for which SafeScience shall
             indemnify, defend and hold harmless Elan and Newco, as set forth
             below, Newco shall indemnify, defend and hold harmless Elan or
             SafeScience, as the case may be, against all actions, losses,
             claims, demands, damages,

                                       27
<PAGE>

             costs and liabilities (including reasonable attorneys fees)
             relating directly or indirectly to all such claims or proceedings,
             provided that Elan or SafeScience, as the case may be, shall not
             acknowledge to the third party or to any other person the validity
             of any claims of such a third party, and shall not compromise or
             settle any claim or proceedings referred to in Clause 10.3.1
             relating thereto without the prior written consent of Newco, not to
             be unreasonably withheld or delayed.

             Notwithstanding anything in this Agreement or the License
             Agreements to the contrary, SafeScience shall indemnify, defend and
             hold harmless Elan and Newco against all actions, losses, claims,
             demands, damages, costs and liabilities (including reasonable
             attorneys fees) relating directly or indirectly to all claims of
             infringement or proceedings based on infringement brought by any
             third party against Elan or Newco arising in connection with the
             Platt and Wayne State Agreements.

     10.3.3  At its option, Elan or SafeScience, as the case may be, may elect
             to take over the conduct of such proceedings from Newco provided
             that Newco's indemnification obligations shall continue; the costs
             of defending such claim shall be borne by [...***...] and such
             Party shall not compromise or settle any such claim or proceeding
             without the prior written consent of Newco, such consent not to be
             unreasonably withheld or delayed.


                                   CLAUSE 11

              CROSS LICENSING/EXPLOITATION OF NEWCO INTELLECTUAL
                          PROPERTY OUTSIDE THE FIELD

11.1 Solely for the purposes of, and only to the extent necessary, to enable
     Elan to conduct research and development work on behalf of Newco, Newco
     hereby grants to Elan a non-exclusive, worldwide, royalty-free, fully paid-
     up license for the Term:

     11.1.1  to use the Newco Intellectual Property in the Field; and

     11.1.2  subject to the terms and conditions of the SafeScience License
             Agreement and the Elan License Agreement, a sublicense to use the
             SafeScience Intellectual Property and the Elan Intellectual
             Property in the Field.

11.2 Solely for the purposes of, and only to the extent necessary, to enable
     SafeScience to conduct research and development work on behalf of Newco,
     Newco hereby grants to SafeScience a non-exclusive, worldwide, royalty-
     free, fully paid-up license for the Term:

     11.2.1  to use the Newco Intellectual Property in the Field; and

                                       28
<PAGE>

     11.2.2  subject to the terms and conditions of the Elan License Agreement
             and the SafeScience License Agreement, a sublicense to use the Elan
             Intellectual Property and the SafeScience Intellectual Property in
             the Field.

11.3 Elan and/or SafeScience shall be entitled to exploit the Newco Intellectual
     Property outside the Field subject to the Parties negotiating a license
     agreement in good faith pursuant to which Newco will grant to Elan and/or
     SafeScience, as the case may be, a license under the Newco Intellectual
     Property outside the Field (which license agreement shall provide, inter
     alia, whether the license of Newco Intellectual Property will be exclusive
     or non-exclusive). The financial terms of the said license agreement shall
     be negotiated by the Parties with reference to, inter alia, the following
     criteria:

     11.3.1  the amount of monies expended by Newco in developing the Newco
             Intellectual Property;

     11.3.2  the materiality of the contribution of the Newco Intellectual
             Property by comparison to the further research and development work
             to be conducted, and the materiality of the contribution of the
             Elan Intellectual Property and the SafeScience Intellectual
             Property;

     11.3.3  the financial return likely to be earned by Elan or SafeScience, as
             the case may be, from the proposed exploitation outside the Field;
             and

     11.3.4  the impact of the proposed exploitation of the Newco Intellectual
             Property outside the Field on the exploitation of the Newco
             Intellectual Property within the Field.

                                   CLAUSE 12

                       REGULATORY MATTERS/CLINICAL TRIALS

12.1 Newco shall keep the other Parties promptly and fully advised of Newco's
     regulatory activities, progress and procedures.  Newco shall inform the
     other Parties of any dealings it shall have with an RHA, and shall furnish
     the other Parties with copies of all correspondence relating to the
     Products.  The Parties shall collaborate to obtain any required Regulatory
     Approval of the RHA to market the Products.

12.2 Subject to Clause 12.5, Newco shall, at its own cost, file, prosecute and
     maintain any and all Regulatory Applications for the Products in the
     Territory in accordance with the Business Plan.

12.3 Subject to Clause 12.5, any and all Regulatory Approvals obtained hereunder
     for any Product shall remain the property of Newco, provided that Newco
     shall allow

                                       29
<PAGE>

     Elan and SafeScience access thereto to enable Elan and SafeScience to
     fulfill their respective obligations and exercise their respective rights
     under this Agreement and shall authorize Elan and SafeScience to reference
     Newco's Regulatory Approvals to the extent necessary for Elan's and
     SafeScience's regulatory purposes relating specifically to the Project.
     Newco shall maintain such Regulatory Approvals at its own cost.

12.4 It is hereby acknowledged that there are inherent uncertainties
     involved in the registration of pharmaceutical products with an RHA insofar
     as obtaining approval is concerned and such uncertainties form part of the
     business risk involved in undertaking the form of commercial collaboration
     as set forth in this Agreement.

12.5 The DMF (Drug Master File) and, without prejudice to Newco's rights under
     Clause 12.3, all regulatory approvals and other regulatory actions relating
     to [...***...] shall be processed by and be the property of Elan and at all
     times held in Elan's sole name. Elan will authorize Newco to reference
     Elan's DMF, as described herein, with the FDA or other RHA to the extent
     necessary for Newco's regulatory purposes.

     The DMF (Drug Master File) and, without prejudice to Newco's rights under
     Clause 12.3, all regulatory approvals and other regulatory actions relating
     to [...***...] shall be processed by and be the property of SafeScience and
     at all times held in SafeScience's sole name. SafeScience will authorize
     Newco to reference SafeScience's DMF, as described herein, with the FDA or
     other RHA to the extent necessary for Newco's regulatory purposes.

12.6 The Steering Committee shall, by unanimous agreement, be responsible for
     determining Newco's strategy as regards the conduct of any clinical trials
     with respect to the development of the Product. Any agreement between Newco
     and Elan or SafeScience, as the case may be, or between Newco and any
     independent third party relating to the conduct of any clinical trial in
     support of the development of the Product shall require the prior approval
     in writing of Elan and SafeScience.

12.7 For the avoidance of doubt, where Elan or SafeScience commences any
     clinical trial with respect to the development of the Product (the
     "Clinical Trial Co-ordinator"), such Clinical Trial Co-ordinator will
     indemnify the other Parties hereto (for the avoidance of doubt, including
     Elan or SafeScience, as the case may be) against any claims, losses or
     damages arising against any such other Party hereto in connection with any
     such clinical trial with respect to the development of the Product.

     Each Clinical Trial Co-ordinator shall effect and maintain comprehensive
     general liability insurance in respect of all clinical trials and other
     activities performed by such Clinical Trial Co-ordinator on behalf of
     Newco.

                                       30
<PAGE>

     The Participants and Newco shall ensure that the industry standard
     insurance policies shall be in place for all activities to be carried out
     by Newco.


                                   CLAUSE 13

                                 MANUFACTURING

13.1 SafeScience shall have the first right to manufacture and supply, and/or
     subcontract the manufacture and supply, the Compound and the Product with
     respect to the Initial Formulation and Initial Mode of Administration. EIS
     shall have the first right to manufacture and supply, and/or subcontract
     the manufacture and supply, of the Product with respect to any oral
     formulation of the Product.

     Any such supply agreement (including a quality agreement) shall be
     negotiated and agreed to by Newco and EIS or SafeScience, as the case may
     be, not later than the date of completion of Phase II (as such term is
     commonly used in connection with FDA applications) of the R&D Plan.  The
     terms of said supply agreement shall be negotiated in good faith on
     standard industry and commercial terms.

     If EIS or SafeScience, as the case may be, does not exercise its right
     hereunder to manufacture and supply, and/or subcontract the manufacture and
     supply of the Compound or the Product, then Newco shall be free to enter
     into negotiations with a third party (other than a Technological Competitor
     of Elan) to agree to terms upon which the third party would be licensed
     [...***...] to manufacture the relevant Product in the Territory, which
     terms when taken as a whole, are not more favorable to the third party than
     the principal terms of the last written proposal offered by Newco to EIS or
     SafeScience, as the case may be, or by EIS or SafeScience, as the case may
     be, to Newco, as the case may be.

13.2 Subject to the provisions of Clause 13.1, Newco shall be responsible for
     manufacturing, or having manufactured, all quantities of Products required
     for the development and commercialization of Products for use in the Field.



                                   CLAUSE 14

                       TECHNICAL SERVICES AND ASSISTANCE


     Whenever commercially and technically feasible, Newco shall contract with
     SafeScience or Elan, as the case may be, to perform such other services as
     Newco may require, other than those specifically dealt with hereunder or in
     the License

                                       31
<PAGE>

     Agreements. In determining which Party should provide such services, the
     Steering Committee shall take into account the respective infrastructure,
     capabilities and experience of Elan and SafeScience. There shall be no
     obligation upon either of SafeScience or Elan to perform such services.



                                   CLAUSE 15

            AUDITORS, BANKERS, ACCOUNTING REFERENCE DATE; SECRETARY

Unless otherwise agreed by the Participants and save as may be provided to the
contrary herein:

15.1 the auditors of Newco shall be Arthur Anderson, LLP;

15.2 the bankers of Newco shall be Bank of Bermuda or such other bank as may be
     mutually agreed from time to time;

15.3 the accounting reference date of Newco shall be December 31st in each
     Financial Year; and

15.4 the secretary of Newco shall be Joan Barnes or such other Person as may be
     appointed by the Directors from time to time.


                                   CLAUSE 16

                              TRANSFERS OF SHARES;
                     RIGHT OF FIRST OFFER; TAG ALONG RIGHTS

General:
--------

16.1 Until such time as the Common Shares shall be registered pursuant to the
     Exchange Act and be publicly traded in an established securities market, no
     Shareholder shall, directly or indirectly, sell or otherwise transfer
     (each, a "Transfer") any Shares held by it except in accordance with the
     terms of this Agreement.

     Newco shall not, and shall not permit any transfer agent or registrar for
     any Shares to, transfer upon the books of Newco any Shares from any
     Shareholder to any transferee except in accordance with this Agreement.

     Any purported transfer not in compliance with this Agreement shall be void.

                                       32
<PAGE>

     During the R&D Term, no Shareholder shall, directly or indirectly, sell or
     otherwise Transfer any of its legal and/or beneficial interest in the
     Shares held by it to any other Person. After completion of the R&D Term, a
     Shareholder may Transfer Shares provided such Shareholder complies with the
     provisions of Clauses 16.2, 16.3 and 16.4.

     Notwithstanding anything contained herein to the contrary, at all times,
     (i) EIS and/or SafeScience shall have the right to Transfer any Shares to
     their Affiliates provided, however, that such assignment does not result in
     adverse tax consequences for any other Parties and does not violate
     applicable securities laws; and (ii) EIS shall have the right and option to
     exercise the EIS Exchange Right.

     Either Participant shall have the right to Transfer any Shares to a special
     purpose financing or similar entity established by SafeScience, Elan or
     EIS; provided, that such Affiliates or other Permitted Transferee to which
     such legal and/or beneficial interest in the Shares have been transferred
     shall agree to be bound by all the provisions of this Agreement.

16.2 No Shareholder shall, except with the prior written consent of the other
     Shareholders, create or permit to subsist any Encumbrance over, or grant
     any option or other rights 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.

16.3 Rights of First Offer:
     ----------------------

     If at any time following the expiration of the R&D Term, a Shareholder
     wishes to Transfer any Shares owned by it (a "Selling Shareholder"), in any
     transaction (other than a Transfer to an Affiliate or subsidiary or in the
     case of EIS to a special purpose financing or similar entity established by
     EIS), the Selling Shareholder shall deliver prior written notice of its
     wish to Transfer (a "Notice of Intention") to Newco and to the Shareholders
     who are not the Selling Shareholder (the "Non-Selling Shareholder") setting
     forth its wish to make such Transfer, and specifying:

     (1)  the name of the proposed transferee, and the number and class of
          Shares proposed to be transferred (the "Offered Shares"); and

     (2)  the price at which such Selling Shareholder proposes to Transfer the
          Offered Shares (the "Offer Price") and other applicable terms and
          conditions.

     The "Right of First Offer" provided for in this Clause 16.3 shall be
     subject to the "Tag Along Rights" provided by Clause 16.4.

     Upon receipt of the Notice of Intention, the Non-Selling Shareholders shall
     have the right to purchase at the Offer Price and on the other applicable
     terms and

                                       33
<PAGE>

     conditions specified in the Notice of Intention the Offered Shares,
     exercisable by the delivery of notice to the Selling Shareholder (the
     "Notice of Exercise"), with a copy to Newco, within 30 business days from
     the date of receipt of the Notice of Intention.

     If no such Notice of Exercise has been delivered by the Non-Selling
     Shareholders within such 10 business day period, or such Notice of Exercise
     does not relate to all of the Offered Shares covered by the Notice of
     Intention, then the Selling Shareholder shall be entitled to Transfer all
     of the Offered Shares to a third party within 45 business days after the
     delivery of such Notice of Intention on such terms as are contained in the
     Notice of Intention, which shall be no more favorable to the third party
     than those presented to the Non-Selling Shareholders.

     If the Selling Shareholder does not sell the Offered Shares to a third
     party on such terms as are contained in the Notice of Intention, which
     shall be no more favorable to the third party than those presented to the
     Non-Selling Shareholder within such 45 business day period, the Offered
     Shares shall again be subject to the Right of First Offer set forth in
     Clause 16.3.

     In the event that any of the Non-Selling Shareholders exercises their right
     to purchase all of the Offered Shares hereunder, the Selling Shareholder
     shall sell all of the Offered Shares to such Non-Selling Shareholders, in
     the amounts on the terms set forth in the Notice of Intention.

     In the event that more than one of the Non-Selling Shareholders wish to
     purchase the Offered Shares, the Offered Shares shall be allocated to such
     Shareholders on the basis of their pro rata equity interests in Newco.

     The rights and obligations of each of the Shareholders pursuant to the
     Right of First Offer provided herein shall terminate upon the date that the
     Common Shares are registered under Section 12(b) or 12(g) of the Exchange
     Act.

     At the closing of any Transfer of Shares subject to this Clause 16.3, the
     Selling Shareholder shall deliver certificates evidencing the Offered
     Shares, accompanied by written instruments of transfer in a form reasonably
     satisfactory to the Non-Selling Shareholders duly executed by the Selling
     Shareholder, and such other customary documents as shall be necessary in
     connection therewith.

16.4 Tag Along Rights:
     -----------------

     In the event the Non-Selling Shareholders do not elect to purchase all the
     Offered Shares pursuant to Clause 16.3, a Shareholder (the "Transferring
     Shareholder") shall not Transfer any Shares in any transaction unless the
     terms and conditions of such Transfer shall include an offer to the other
     Shareholders (the "Remaining Shareholders") to sell Shares at the same
     price and on the same terms and

                                       34
<PAGE>

     conditions as the Transferring Shareholder has agreed to sell its Shares
     (the "Tag Along Right").

     In the event that a Transferring Shareholder proposes to Transfer any
     Shares in a transaction subject to this Clause 16.4, the Transferring
     Shareholder shall notify the Remaining Shareholders in writing of each such
     proposed Transfer, specifying:

     (1)  the name of the proposed transferee and the number and class of Shares
          proposed to be transferred;

     (2)  the proposed price and other applicable terms and conditions (the
          "Transferee Terms"); and

     (3)  that the proposed transferee has been informed of the Tag Along Right
          provided for in this Clause 16.4, and the total number of Shares the
          proposed transferee has agreed to purchase from the Transferring
          Shareholder in accordance with the terms hereof.

     The Tag Along Right may be exercised by each of the Remaining Shareholders
     by delivery of a written notice to the Transferring Shareholder (the "Co-
     sale Notice") within 30 business days following receipt of the aforesaid
     notice.

     The Co-sale Notice shall state the number of Shares owned by such Remaining
     Shareholder which the Remaining Shareholder wishes to include in such
     Transfer; provided however, that without the written consent of the
     Transferring Shareholder, the amount of such securities belonging to the
     Remaining Shareholder included in such Transfer may not be greater than
     such Remaining Shareholder's percentage beneficial ownership of Fully
     Diluted Common Shares, multiplied by the total number of Fully Diluted
     Common Shares to be sold by the Transferring Shareholder and all Remaining
     Shareholders.

     Upon receipt of a Co-sale Notice, the Transferring Shareholder shall be
     obliged to transfer all the Shares set forth in the Co-sale Notice to the
     transferee on the Transferee Terms; provided however, that the Transferring
     Shareholder shall not consummate the purchase and sale of any Shares
     hereunder if the transferee does not purchase all such Shares specified in
     all Co-sale Notices.

     If no Co-sale Notice has been delivered to the Transferring Shareholder
     prior to the expiration of the aforesaid 30 day period, and if the
     provisions of this Clause 16 have been complied with in all respects, the
     Transferring Shareholder shall have the right for a period of 45 business
     days to Transfer Shares to a third party on the Transferee Terms without
     further notice to any other party, but after such 45 business day period,
     no such Transfer may be made without again giving notice to the Remaining
     Shareholders of the proposed Transfer and complying with the requirements
     of this Clause 16.4.

                                       35
<PAGE>

     At the closing of any Transfer of Shares subject to this Clause 16.4, the
     Transferring Shareholder and any Remaining Shareholder (if applicable)
     shall deliver certificates evidencing such Shares, accompanied by written
     instruments of transfer in a form reasonably satisfactory to the Non-
     Selling Shareholders duly executed by the Transferring Shareholder and the
     Remaining Shareholder (if applicable), and such other customary documents
     as shall be necessary in connection therewith.

     Notwithstanding the foregoing, this Clause 16.4 shall not apply to any sale
     of Common Shares pursuant to an effective registration statement under the
     Securities Act in a bona fide public offering where such Shares are quoted
     on an established securities market.


                                   CLAUSE 17

                    MATTERS REQUIRING SHAREHOLDERS' APPROVAL

17.1 In consideration of SafeScience and Elan agreeing to enter into the
     License Agreements, the Parties hereby agree that Newco shall not without
     the prior approval in writing of EIS and SafeScience:

     17.1.1  make a material Newco determination outside the ordinary course of
             business, including, among other things, acquisitions or
             dispositions of intellectual property and licenses or sublicenses;
             enter into joint ventures and similar arrangements, as they relate
             to the Licensed Technologies;

     17.1.2  issue any unissued Shares or unissued Common Share Equivalents, or
             create or issue any new shares (including a split of the Shares) or
             Common Share Equivalents, except as expressly permitted by the
             Newco Bye-Laws;

     17.1.3  alter any rights attaching to any class of shares in the capital of
             Newco or alter the Newco Bye-Laws;

     17.1.4  consolidate, sub-divide or convert any of Newco's share capital or
             in any way alter the rights attaching thereto;

     17.1.5  dispose of all or substantially all of the assets of Newco;

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

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

                                       36
<PAGE>

     17.1.8  subject to Clause 23.14, assign, license or sub-license any of the
             Elan Intellectual Property, SafeScience Intellectual Property,
             Newco Intellectual Property;

     17.1.9  amend or vary the terms of the SafeScience License Agreement or the
             Elan License Agreement;

     17.1.10 save as otherwise provided in Clause 12, permit a person other than
             Newco to own a Regulatory Approval relating to the Product(s);

     17.1.11 approve, or amend or vary, the Business Plan or the Newco budget,
             as they relate to the Licensed Technologies;

     17.1.12 alter the number of Directors;

     17.1.13 change the domicile of Newco from Bermuda;

     17.1.14 register any Shares of Newco with any governmental authority for
             public trading in any securities market;

     17.1.15 declare or pay any dividend or make any distribution, directly or
             indirectly, with respect to its Shares; or, save in connection with
             EIS' exercise of the EIS Exchange Right, sell, exchange, deliver,
             redeem, purchase or otherwise acquire or dispose of its Shares;
             and

     17.1.16 adopt or register or use any trade name, trademark or service mark
             on behalf of Newco in respect of the License Agreements

                                   CLAUSE 18

                                    DISPUTES

18.1 Should any dispute or difference arise between Elan and SafeScience, or
     between Elan or SafeScience and Newco, during the period that this
     Agreement is in force, then any Party may forthwith give notice to the
     other Parties that it wishes such dispute or difference to be referred to a
     designated senior officer of each of Elan and SafeScience.

18.2 In any event of a notice being served in accordance with Clause 18.1, each
     of the Participants shall within 14 days of the service of such notice
     prepare and circulate to the designated senior officer of each of Elan and
     SafeScience 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
     designated senior officers of each of Elan and SafeScience who shall
     endeavor to resolve the dispute.  If designated senior

                                       37
<PAGE>

     officers of each of Elan and SafeScience agree upon a resolution or
     disposition of the matter, they shall each sign a statement which sets out
     the terms of their agreement. The Participants agree that they shall
     exercise the voting rights and other powers available to them in relation
     to Newco to procure that the agreed terms are fully and promptly carried
     into effect.

18.3 In the event the designated senior officers of each of Elan and SafeScience
     are unable to resolve a dispute or difference within 60 days of its being
     referred to them under Clause 18.1, the following procedures shall apply:

     18.3.1  If the dispute relates to the interpretation of this Agreement or
             any other Definitive Document or the compliance of the Parties with
             their legal obligations thereunder, or the ownership of any
             intellectual property, the provisions of Clause 23.9.2 shall
             govern.

     18.3.2  If the dispute does not relate specifically to the interpretation
             of this Agreement or any other Definitive Document or the
             compliance of the Parties with their legal obligations thereunder,
             or the ownership of any intellectual property, the provisions of
             Clause 18.4 shall govern. For the avoidance of doubt, disputes
             relating to the decisions of the Steering Committee and operations
             and business of Newco shall be governed by Clause 18.4.

18.4 The designated senior officers of each of Elan and SafeScience shall, if
     they are unable to resolve a dispute or difference described in Clause
     18.3.2 within sixty (60) days of such referral, and if so agreed to by Elan
     and SafeScience, refer the matter to an independent expert in
     pharmaceutical product development and marketing (including clinical
     development and regulatory affairs) jointly selected by the designated
     senior officers of each of Elan and SafeScience (the "Expert").

     In the event the designated senior officers of each of Elan and SafeScience
     cannot agree upon the designation of the Expert, the Participants shall
     request the American Arbitration Association ("AAA"), sitting in the City
     of New York to select the Expert.  In each case, the Expert shall be
     selected having regard to his suitability to determine the particular
     dispute or difference on which the Expert is being requested to determine.
     Unless otherwise agreed between the designated senior officers of each of
     Elan and SafeScience, the following rules shall apply to the appointment of
     the Expert.  The fees of the AAA and the Expert shall be shared equally by
     the Participants. The Expert shall be entitled to inspect and examine all
     documentation and any other material which the Expert may consider to be
     relevant to the dispute. The Expert 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 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

                                       38
<PAGE>

     stipulation as soon as practicable but in any event within four weeks from
     the reference of the dispute or difference to him.

18.5 Any determination by the Expert of a dispute or difference shall not be
     binding on the Parties.


                                   CLAUSE 19

                                  TERMINATION

19.1 Subject to Clause 19.11, this Agreement shall govern the operation and
     existence of Newco until

     19.1.1  terminated by written agreement of all Parties hereto; or

     19.1.2  otherwise terminated in accordance with this Clause 19.

19.2 For the purpose of this Clause 19, a "Relevant Event" is committed by a
     Participant if:

     19.2.1  it commits a material breach of its representations, warranties or
             obligations under this Agreement and fails to cure it within 60
             days of being specifically required in writing to do so by the
             other Participant; provided, however, that if the breaching
             Participant has proposed a course of action to cure the breach and
             is acting in good faith to cure same but has not cured the breach
             by the 60th day, such period shall be extended by such period as is
             reasonably necessary to permit the breach to be cured, provided
             that such period shall not be extended by more than an additional
             90 days, unless otherwise agreed in writing by the Parties; or

     19.2.2  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 within 30 days; or

     19.2.3  it is unable to pay its debts in the normal course of business; or

     19.2.4  it ceases 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 Participant (such
             consent not to be unreasonably withheld); or

     19.2.5  the appointment of a liquidator, receiver, administrator, examiner,
             trustee or similar officer of such Participant or over all or
             substantially all of its assets under the law of any applicable
             jurisdiction, including without limitation, the United States of
             America, Bermuda or Ireland; or

                                       39
<PAGE>

     19.2.6  an application or petition for bankruptcy, corporate re-
             organization, composition, administration, examination, arrangement
             or any other procedure similar to any of the foregoing under the
             law of any applicable jurisdiction, including without limitation,
             the United States of America, Bermuda or Ireland, is filed, and is
             not discharged within 60 days, or a Participant 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.

19.3 If either Participant commits a Relevant Event, the other Participant
     shall be entitled, within three months of the occurrence of the Relevant
     Event, to require the defaulting Participant (the "Recipient Participant")
     to sell on reasonable terms of payment to the non-defaulting Participant
     (the "Proposing Participant") all (but not less than) of the Shares, held
     or beneficially owned by the Recipient Participant for an amount equal to
     [...***...]  of the fair market value of the Shares of the Recipient
     Participant (the "Buyout Option").

19.4 The Proposing Participant shall notify the Recipient Participant of the
     exercise of the Buyout Option, no later than 30 business days prior to the
     proposed exercise thereof, by delivering written notice to the Recipient
     Participant stating that the Buyout Option is exercised and the price at
     which the Proposing Participant is willing to purchase the Shares of the
     Recipient Participant.

19.5 In the event that the Participants do not agree upon a purchase price for
     the Shares within five business days following the receipt by the Recipient
     Participant of written notice from the Proposing Participant pursuant to
     Clause 19.4 above, Elan and SafeScience shall jointly select an independent
     US-based arbitrator who is knowledgeable of the
     pharmaceutical/biotechnology industry and if Elan and SafeScience are
     unable to jointly select such arbitrator within 15 business days, the
     Proposing Participant may contact the AAA, sitting in New York City and
     request that such independent US-based arbitrator be appointed within 10
     business days.  The AAA shall endeavor to select an arbitrator who is
     technically knowledgeable in the pharmaceutical/biotechnology industry (and
     who directly, indirectly and through his affiliates, has no business
     relationship with, or shareholding in, either the Proposing Participant or
     the Recipient Participant).  Promptly upon being notified of the
     arbitrator's appointment, the Proposing Participant and the Recipient
     Participant shall submit to the arbitrator details of their assessment of
     the fair market value for the Shares of the Recipient Participant together
     with such information as they think necessary to validate their assessment.
     The arbitrator shall notify the Recipient Participant of [...***...] of the
     fair market value assessed by the Proposing Participant (the "Proposing
     Participant Price") and shall notify the Proposing Participant [...***...]
     of the fair market value assessed by the Recipient Participant (the
     "Recipient Participant Price").  The Proposing Participant and the
     Recipient Participant shall then be entitled to make further submissions to
     the arbitrator within five

                                       40
<PAGE>

      business days explaining why the Recipient Participant Price or the
      Proposing Participant Price, as the case may be, is unjustified. The
      arbitrator shall thereafter meet with the Proposing Participant and the
      Recipient Participant and shall thereafter choose either the Recipient
      Participant Price or the Proposing Participant Price (but not any other
      price) as the purchase price for the Shares (the "Purchase Price") on the
      basis of which price the arbitrator determines to be closer to [...***...]
      of the fair market value for the Shares of the Recipient Participant. In
      determining the fair market value of the Shares, the arbitrator shall
      consider factors, including, but not limited to, the market price for the
      Shares, if such Shares are publicly traded; the market-price of shares of
      similar companies; and the assets and liabilities of Newco and the
      prospects of Newco. The arbitrator shall use his best efforts to determine
      the Purchase Price within 30 business days of his appointment. The
      Proposing Participant and the Recipient Participant shall bear the costs
      of the arbitrator equally provided that the arbitrator may, in his
      discretion, allocate all or a portion of such costs to one Party. Any
      decision of the arbitrator shall be final and binding.

19.6  The Proposing Participant shall purchase the Shares of the Recipient
      Participant by delivery of the Purchase Price in cash no later than the
      15th business day following determination of the Purchase Price by the
      Expert.

19.7  The Shares of the Recipient Participant so transferred shall 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 and
      restrictions attaching thereto.

19.8  If the Proposing Participant exercises the Buyout Option, both parties
      will negotiate in good faith to agree to additional reasonable provisions
      and/or amendments to the License Agreements to protect the intellectual
      property rights of the Recipient Party.

19.9  Upon the exercise of the Buyout Option and payment of the Purchase Price
      to the Recipient Participant, Clauses 5, 6, 7, 8, 11, 12, 13, 16, 17 and
      20 shall have no further force and effect on the Parties and the Parties
      shall review in good faith such other provisions of this Agreement should
      no longer have any force and effect.

19.10 If either Participant commits a Relevant Event, the other Shareholder
      shall have in addition to all other legal and equitable rights and
      remedies hereunder, the right to terminate this Agreement upon 30 days'
      written notice.

19.11 In the event of a termination of the Elan License Agreement and/or the
      SafeScience License Agreement, both parties will negotiate in good faith
      to determine whether this Agreement should be terminated.

19.12 Subject to Clause 19.9, The provisions of Clauses 1 (Definitions); 3
      (Representations); Clause 5 (Directors; Steering Committee); 9 (Ownership
      of

                                       41
<PAGE>

     Intellectual Property); 10 (Intellectual Property Rights); 12 (Regulatory
     Matters); 16 (Transfers of Shares); 17 (Matters Requiring Shareholders'
     Approval); 18 (Disputes); 19 (Termination); 20 (Share Rights); 21
     (Confidentiality); 22.2 (Costs) and 23 (General) shall survive the
     termination of this Agreement under this Clause 19; all other terms and
     provisions of this Agreement shall cease to have effect upon the
     termination of this Agreement.

                                   CLAUSE 20

                                  SHARE RIGHTS

The provisions regulating the rights and obligations attaching to the Common
Shares and the Preference Shares are set out in the Newco Bye-laws.


                                   CLAUSE 21

                                CONFIDENTIALITY

21.1 The Parties agree that it will 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 proprietary information relating to the
     Field, the Products, processes, services and business of the disclosing
     Party.

     The foregoing shall be referred to collectively as "Confidential
     Information".

21.2 Any Confidential Information disclosed by the disclosing 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.

21.3 Save as otherwise specifically provided herein, each Party shall disclose
     Confidential Information of the other Party only to those employees,
     representatives and agents requiring knowledge thereof in connection with
     fulfilling 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 relating to
     Confidential Information and their duties hereunder and to obtain their
     agreement hereto as a condition of receiving Confidential Information.

     Each Party shall exercise the same standard of care as it would itself
     exercise in relation to its own confidential information (but in no event
     less than a reasonable standard of care) to protect and preserve the
     proprietary and confidential nature of the Confidential Information
     disclosed to it by the other Party.

                                       42
<PAGE>

     Each Party shall promptly, upon request of the other Party, return all
     documents and any copies thereof containing Confidential Information
     belonging to, or disclosed by, such other Party.

21.4 Any breach of this Clause 21 by any person informed by one of the Parties
     is considered a breach by the Party itself.

21.5 Confidential Information shall be deemed not to include:

     21.5.1  information which is in the public domain;

     21.5.2  information which is made public through no breach of this
             Agreement;

     21.5.3  information which is independently developed by a Party, as
             evidenced by such Party's records;

     21.5.4  information that becomes available to a receiving Party on a non-
             confidential basis, whether directly or indirectly, from a source
             other than another Party hereto, which source did not acquire this
             information on a confidential basis.

21.6 The receiving Party will be entitled to disclose Confidential Information
     which the receiving Party is required to disclose pursuant to:

     21.6.1  a valid order of a court or other governmental body; or

     21.6.2  any other requirement of law;

     provided that if the receiving Party becomes legally required to disclose
     any Confidential Information hereunder, the receiving Party shall give the
     disclosing Party prompt notice of such fact to enable the disclosing Party
     to seek a protective order or other appropriate remedy concerning any such
     disclosure.

     The receiving Party shall fully co-operate with the disclosing Party in
     connection with the disclosing Party's efforts to obtain any such order or
     other remedy.

     If any such order or other remedy does not fully preclude disclosure, the
     receiving Party shall make such disclosure only to the extent that such
     disclosure is legally required.

21.7 The provisions relating to confidentiality in this Clause 21 shall remain
     in effect during the term of this Agreement, and for a period of 7 years
     following the expiration or earlier termination of this Agreement.

21.8 The Parties agree that the obligations of this Clause 21 are necessary and
     reasonable in order to protect the Parties' respective businesses, and each
     Party

                                       43
<PAGE>

     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.

     The Parties agree that any such violation or threatened violation shall
     cause irreparable injury to a Party and that, in addition to any other
     remedies that may be available, in law and equity or otherwise, each Party
     shall be entitled to seek injunctive relief against the threatened breach
     of the provisions of this Clause 21, or a continuation of any such breach
     by the other Party, specific performance and other equitable relief to
     redress such breach together with damages and reasonable counsel fees and
     expenses to enforce its rights hereunder.



                                   CLAUSE 22

                                     COSTS

22.1 Each Shareholder shall bear its own legal and other costs incurred in
     relation to preparing and concluding this Agreement and the Definitive
     Documents.

22.2 All other costs, legal fees, registration fees and other expenses relating
     to the transactions contemplated hereby, including the costs and expenses
     incurred in relation to the incorporation of Newco, shall be borne by
     Newco.


                                   CLAUSE 23

                                    GENERAL

23.1 Exclusion of liability:
     -----------------------

     Notwithstanding anything to the contrary in this Agreement, no Party shall
     be liable to any other Party by reason of any representation or warranty,
     condition or other term or any duty of common law, or under the express
     terms of this Agreement, for any consequential, special or incidental or
     punitive loss or damage (whether for loss of current or future profits,
     loss of enterprise value or otherwise) and whether occasioned by the
     negligence of the respective Parties, their employees or agents or
     otherwise.

23.2 Good Faith:
     -----------

     Each of the Parties agrees to act reasonably in giving effect to the
     provisions of this Agreement.

23.3 Further Assurance:
     ------------------

                                       44
<PAGE>

     At the request of any of the Parties, the other Party or Parties shall (and
     shall use reasonable efforts to procure that any other necessary parties
     shall) execute and perform all such documents, acts and things as may
     reasonably be required subsequent to the signing of this Agreement for
     assuring to or vesting in the requesting Party the full benefit of the
     terms hereof.

23.4 No Representation:
     ------------------

     Each of the Parties hereto hereby acknowledges that in entering into this
     Agreement it has not relied on any representation or warranty except as
     expressly set forth herein or in any document referred to herein.

23.5 Force Majeure:
     --------------

     Neither Party to this Agreement shall be liable for delay in the
     performance of any of its obligations hereunder if such delay is caused by
     or results from causes beyond its reasonable control, including without
     limitation, acts of God, strikes, acts of war (whether war be declared or
     not), insurrections, riots, civil commotions, strikes, lockouts or other
     labor disturbances or intervention of any relevant government authority,
     but any such delay or failure shall be remedied by such Party as soon as
     practicable.

23.6 Relationship of the Parties:
     ----------------------------

     Nothing contained in this Agreement is intended or is to be construed to
     constitute Elan/EIS and SafeScience as partners, or Elan/EIS as an employee
     or agent of SafeScience, or SafeScience as an employee or agent of
     Elan/EIS.

     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 another
     Party or to bind another Party to any contract, agreement or undertaking
     with any third party.

23.7 Counterparts:
     -------------

     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.

23.8 Notices:
     --------

     Any notice to be given under this Agreement shall be sent in writing in
     English by registered or recorded delivery post or reputable overnight
     courier or telefaxed to:

     Elan at:

                                       45
<PAGE>

     Lincoln House Lincoln Place Dublin 2, Ireland
     Attention:   Vice President & General Counsel
     Elan Pharmaceutical Technologies,
     a division of Elan Corporation, plc
     Telephone:   353-1-709-4000
     Fax:         353-1-709-4124

     and

     Elan International Services, Ltd.
     102 St. James Court
     Flatts, Smiths FL04
     Bermuda
     Attention:   President
     Telephone:   441-292-9169
     Fax:         441-292-2224


     SafeScience at:

     Park Square Building
     31 St. James Avenue, 8th Floor
     Boston, MA 02116
     USA

     Attention:   President
     Telephone:   (617) 422-0674
     Fax:         (617) 422-0675

     with a copy to:

     McDermott, Will & Emery
     50 Rockefeller Plaza
     New York, New York 10020-1605

     Attention:   Cheryl V. Reicin
     Telephone    (212) 547-5400
     Fax:         (212) 547-5444

     Newco at:

     Clarendon House,
     2 Church St.,
     Hamilton,
     Bermuda
     Attention:   Secretary

                                       46
<PAGE>

     Telephone:   441 292 9169
     Fax:  441 292 2224

     with a copy to:

     SafeScience at:

     Park Square Building
     31 St. James Avenue, 8th Floor
     Boston, MA 02116
     USA

     Attention:   President
     Telephone:   (617) 422-0674
     Fax:         (617) 422-0675

     with a copy to:

     McDermott, Will & Emery
     50 Rockefeller Plaza
     New York, New York 10020-1605

     Attention:   Cheryl V. Reicin
     Telephone    (212) 547-5400
     Fax:         (212) 547-5444


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

     Any notice sent by mail shall be deemed to have been delivered within 7
     business days after dispatch or delivery to the relevant courier and any
     notice sent by telefax shall be deemed to have been delivered upon
     confirmation of receipt. Notices of change of address shall be effective
     upon receipt.  Notices by telefax shall also be sent by another method
     permitted hereunder.

23.9 Governing Law
     -------------

     23.9.1 This Agreement shall be governed by and construed in accordance with
            the laws of the State of New York.

     23.9.2 In the event that a dispute regarding the matters described in
            Clause 18.3.1 is not resolved pursuant to the provisions of Clause
            18.1, the Parties agree to consider other dispute resolution
            mechanisms including mediation.

                                       47
<PAGE>

       23.9.3 In the event that the Parties fail to agree on a mutually
              acceptable dispute resolution mechanism within 10 days of either
              Party's demand for such alternative dispute resolution under
              Clause 23.9.2, or in the event that the dispute is not resolved
              pursuant to any dispute resolution mechanism agreed by the Parties
              under Clause 23.9.2 within 6 months, save as otherwise agreed by
              the Parties, the dispute shall be finally settled by a court of
              competent jurisdiction For the purposes of this Agreement the
              parties submit to the exclusive jurisdiction of the courts of the
              State and Federal Courts located in the State, City and County of
              New York.

23.10  Severability:
       -------------

       If any provision in this Agreement is deemed to be invalid, illegal, void
       or unenforceable under any law that is applicable hereto:

       23.10.1 such provision will be deemed amended to conform to applicable
               laws so as to be valid and enforceable; or

       23.10.2 if it cannot be so amended without materially altering the
               intention of the Parties, it will be deleted, and the validity,
               legality and enforceability of the remaining provisions of this
               Agreement shall not be impaired or affected in any way.

23.11  Amendments:
       -----------

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

23.12  Waiver:
       -------

       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.

23.13  Assignment:
       -----------

       None of the Parties shall be permitted to assign its rights or
       obligations hereunder without the prior written consent of the other
       Parties except as follows:

       23.13.1 Elan, EIS and/or SafeScience shall have the right to assign their
               rights and obligations hereunder to their Affiliates provided,
               however, that such assignment does not result in adverse tax
               consequences for any other Parties.

                                       48
<PAGE>

       23.13.2 Elan and EIS shall have the right to assign their rights and
               obligations hereunder to a special purpose financing or similar
               entity established by Elan or EIS.

23.14  Assignment of Newco Intellectual Property:
       ------------------------------------------

       Upon one month's prior notice in writing from Elan to Newco and
       SafeScience, Newco shall assign the Newco Intellectual Property from
       Newco to a wholly-owned subsidiary of Newco to be incorporated in
       Ireland, upon the prior written consent of SafeScience, which consent
       shall not be unreasonably withheld, conditioned, or delayed, which
       company shall be newly incorporated to facilitate such assignment.

23.15  Whole Agreement:
       ----------------

       This Agreement (including the Schedules attached hereto) and the
       Definitive Documents set forth all of the agreements and understandings
       between the Parties with respect to the subject matter hereof, and
       supersede and terminate all prior agreements and understandings between
       the Parties with respect to the subject matter hereof. There are no
       agreements or understandings with respect to the subject matter hereof,
       either oral or written, between the Parties other than as set forth in
       this Agreement and the Definitive Documents.

       In the event of any ambiguity or conflict arising between the terms of
       this Agreement and those of the Newco Bye-Laws, the terms of this
       Agreement shall prevail except with respect to the rights and obligations
       attaching to the Common Shares and the Preference Shares, where the Newco
       Bye-Laws shall prevail.

       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 any of
       the Parties unless specifically referred to, and solely to the extent
       provided herein. In the event of a conflict between the provisions of
       this Agreement and the provisions of the License Agreements, the terms of
       this Agreement shall prevail unless this Agreement specifically provides
       otherwise.

23.16  Successors:
       -----------

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

                                       49
<PAGE>

                                  Schedule 1
                                  ----------

                            Elan License Agreement
                            ----------------------

                                       50
<PAGE>

                                  Schedule 2
                                  ----------

                         SafeScience License Agreement
                         -----------------------------

                                       51
<PAGE>

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the day
first set forth above.

                                 SIGNED

                                 BY: /s/ Colin Sainsbury
                                    -------------------------------
                                 for and on behalf of
                                 Elan Corporation, plc.



                                 SIGNED

                                 BY: /s/ Kevin Insley
                                    -------------------------------
                                 for and on behalf of
                                 Elan International Services, Ltd.



                                 SIGNED

                                 BY: /s/ Bradley J. Carver
                                    -------------------------------
                                 for and on behalf of
                                 SafeScience, Inc.



                                 SIGNED

                                 BY: /s/ Kevin Insley
                                    -------------------------------
                                 for and on behalf of
                                 SafeScience Newco, Ltd.

                                       52