<PAGE>

                                                                    EXHIBIT 10.1


                                ESCROW AGREEMENT

     This Escrow Agreement (the "Agreement") dated November 29, 2001 is by and
among Endorex Corporation, a Delaware corporation ("Parent"), the stockholders
(the "Stockholders") of Corporate Technology Development, Inc., a Delaware
corporation (the "Company"), and Peter O. Kliem, as the representative of the
Stockholders (the "Stockholder Representative", and, collectively with Parent
and the Stockholders, the "Parties"), and Wells Fargo Bank Minnesota, National
Association, a national banking association (the "Escrow Agent"). All
capitalized terms not otherwise defined herein shall have the meaning ascribed
to such terms in the Merger Agreement (as hereinafter defined).

                                    RECITALS

  WHEREAS, Parent, Roadrunner Acquisition, Inc., a Delaware corporation and a
wholly-owned subsidiary of Parent ("Merger Sub"), and the Company have entered
into that certain Agreement and Plan of Merger and Reorganization dated as of
July 31, 2001 (the "Merger Agreement") pursuant to which Merger Sub will be
merged with and into the Company, with the Company becoming a wholly-owned
subsidiary of Parent (the "Merger"); and

  WHEREAS, pursuant to Section 8.2 of the Merger Agreement, the Parties are
placing in escrow certain securities and the Escrow Agent is willing to hold and
distribute such securities in accordance with the instructions of the Parties,
the Escrow Agent and the Parties agree as follows:

                                    AGREEMENT

                              ARTICLE 1: Directions

  1.1 Escrowed Property: The Parties will deposit with the Escrow Agent the
property described in the attached Schedule A (collectively referred to as the
                                   ----------
"Escrowed Property").

  1.2 Instructions: The Escrow Agent shall hold, invest, if applicable, and
disburse the Escrowed Property pursuant to the instructions set forth in the
attached Schedules B and C.
         -----------------

  1.3 Investments: The Escrow Agent is not responsible or liable for any
diminution of principal or any interest penalty on the Escrowed Property,
whatsoever, for any reason.

  1.4 Assignment of Interest: The assignment, transfer, conveyance or
hypothecation of any right, title or interest in and to the Escrowed Property
(referred to under this Section 1.4 as the "Assignment") shall be binding upon
the Escrow Agent upon delivery of notice to the Escrow Agent of the Assignment
and payment to the Escrow Agent of all of its fees in connection with the
Assignment; provided that the Escrow Agent has given its written consent to the
Assignment, which shall not be unreasonably withheld.

<PAGE>

                   ARTICLE 2: Compensation of the Escrow Agent

The Parties agree, jointly and severally, to pay the Escrow Agent:

       a. Its fees, charges, and expenses for all reasonable and necessary
          services rendered by it in the performance of its obligations under
          this Agreement as set forth in the attached Schedule D; and
                                                      ----------

       b. With the prior written approval of Parent and the Stockholder
          Representative, which shall not be unreasonably withheld, reasonable
          compensation for services rendered in connection with this Agreement
          but not expressly provided for in this Agreement and reimbursement for
          those reasonable expenses incurred by the Escrow Agent in rendering
          such services, including but not limited to court costs and reasonable
          attorneys' fees incurred in the event of any dispute among the parties
          to this Agreement.

The Escrow Agent shall have first and prior lien upon the Escrowed Property to
secure the payments described under paragraphs (a) and (b) of this Article 2. If
any such payment is not timely received by the Escrow Agent from the appropriate
party or parties, the Parties authorize the Escrow Agent to deduct such payment
from the Escrowed Property.

                  ARTICLE 3: Provisions Concerning Escrow Agent

     3.1  Authority of Parties: The Escrow Agent shall be under no duty or
obligation to ascertain the identity, authority and/or rights of the Parties or
their agents.

     3.2  Other Agreements: The Escrow Agent is not a party to, or bound by, any
agreement between the Parties other than this Agreement, whether or not a copy
and/or original of such agreement is held as Escrowed Property. Accordingly, the
Escrow Agent shall have no duty to know or determine the performance or
nonperformance of any provision of any such agreement between the Parties.

     3.3  Deposited Instruments and/or Funds: The Escrow Agent assumes no
responsibility for the validity or sufficiency of any instrument held as
Escrowed Property, except as expressly and specifically set forth in this
Agreement.

     3.4  Late Payment or Performance: The Escrow Agent may accept any payment
or performance called for under this Agreement after the date such payment or
performance is due, unless subsequent to such date, but prior to the actual date
of payment or performance, the Escrow Agent is instructed in writing by the
Parties not to accept such payment or performance.

     3.5  Escheat: The Parties are aware that Escrowed Property which is
abandoned may escheat to the state. The Escrow Agent shall have no liability to
the Parties, their respective heirs, legal representatives, successors and
assigns should any of the Escrowed Property become escheatable or escheat by
operation of law.

     3.6  Non-Liability: The Escrow Agent shall not be liable for any act it may
do or omit to do as Escrow Agent while acting in good faith and in the exercise
of its prudent

<PAGE>

judgment. Any act done or omitted by the Escrow Agent pursuant to the advice of
its attorneys shall be conclusive evidence of such good faith. The Escrow Agent
shall have the right to consult with counsel at the reasonable expense of the
Parties whenever any question arises concerning this Agreement and shall incur
no liability for any delay reasonably required to obtain such advice of counsel.
The Escrow Agent shall not be liable for the outlawing of any right permitted or
given under the instructions set forth in Schedules B and C and/or in any
                                          -----------------
document deposited under this Agreement pursuant to any Statute of Limitations
or by reason of laches. The Escrow Agent shall have no further responsibility to
any or all of the Parties following a complete distribution of the Escrowed
Property pursuant to this Agreement. The Escrow Agent shall not incur any
liability with respect to any action taken or omitted to be taken in reliance
upon any document, including any written notice or instructions provided for in
this Agreement. In performing its obligations hereunder, the Escrow Agent shall
be entitled to presume, without inquiry, the due execution and validity and
effectiveness of all documents it receives.

     3.7  Indemnification: The Parties agree, jointly and severally, to
indemnify and hold harmless the Escrow Agent from any liability, or reasonable
costs or expenses, including but not limited to reasonable attorneys' fees,
incurred by reason of accepting this Agreement and/or Escrowed Property.

     3.8  Disagreements: If any disagreement or dispute arises between the
Parties to this Agreement concerning the meaning or validity of any provision
under this Agreement or concerning any other matter relating to this Agreement,
the Escrow Agent:

       a. Shall be under no obligation to act, except under process or order of
          court, or until it has been adequately indemnified to its full
          satisfaction, and shall sustain no liability for its failure to act
          pending such process or court order or indemnification; and

       b. May deposit, in its sole and absolute discretion, the Escrowed
          Property or that portion of the Escrowed Property it then holds with a
          court of competent jurisdiction, and to interplead the Parties. Upon
          such deposit and filing of interpleader, the Escrow Agent shall be
          relieved of all liability as to the Escrowed Property and shall be
          entitled to recover from the Parties its reasonable attorneys' fees
          and other reasonable costs incurred in commencing and maintaining such
          action. The Parties by signing this Agreement submit themselves to the
          jurisdiction of such court. In no event shall the institution of such
          interpleader action impair the rights of the Escrow Agent described in
          Section 3.6 of this Agreement.

          ARTICLE 4: Representations and Warranties of the Stockholders

     4.1  Representations and Warranties of the Stockholders: Each Stockholder
hereby represents and warrants to Parent and each other Stockholder as follows:

       a. Such Stockholder has the legal capacity and right and all other
          necessary power and authority necessary to enter into this Agreement
          and any document or

<PAGE>

            instrument to be executed and delivered by Stockholder pursuant
            hereto or pursuant to the Merger Agreement, including, without
            limitation, the Voting Agreement and the Affiliate Agreement, if
            applicable (the "Stockholder Documents"), to perform his/her/its
            obligations under the Stockholder Documents, and to consummate the
            transactions contemplated by the Stockholder Documents.

       b.   The execution, delivery and performance of the Stockholder
            Documents, and the consummation of the transactions contemplated by
            the Stockholder Documents, will not (i) conflict with or violate any
            statute, law, ordinance, rule, regulation, judgment, decree, order,
            injunction, writ, permit or license applicable to such Stockholder
            or by which any property or asset of such Stockholder is bound or
            affected, or (ii) constitute a violation of, or a breach or default
            (or an event which with the giving of notice or lapse of time or
            both could reasonably be expected to become a default) under, or
            conflict with, or require any consent under (other than a violation
            or default that has been waived or a consent that has been
            obtained), any term or provision of any note, bond, mortgage,
            instrument, contract, permit, franchise, commitment, indenture,
            lease, license, or other agreement or obligation to which such
            Stockholder is a party or by which any property or asset of such
            Stockholder is bound or affected.

       c.   The Stockholder Documents constitute valid and binding obligations
            of such Stockholder, enforceable in accordance with their terms,
            except to the extent that such enforceability may be limited by
            bankruptcy, insolvency, and similar laws affecting the rights and
            remedies of creditors generally, and by general principles of equity
            and public policy; and the Stockholder Documents, when executed and
            delivered in accordance with the provisions thereof, shall be valid
            and binding obligations of such Stockholder, enforceable in
            accordance with their terms (with the aforesaid exceptions).

       d.   As of the Effective Time, such Stockholder (i) will hold of record
            and beneficially own the number and class of shares of Company
            capital stock set forth next to such Stockholder's name in Section
            2.2 of the Company Disclosure Schedule, free and clear of any
            restrictions on transfer (other than any restrictions under the Act
            and state securities laws), taxes, security interests, charges,
            liens, encumbrances, options, warrants, purchase rights, contracts,
            commitments, equities, claims, and demands, and (ii) will not be a
            party to any option, warrant, call, right, purchase right or other
            contract, commitment or agreement (other than the Merger Agreement)
            that could require such Stockholder to deliver, sell, transfer or
            otherwise dispose of any capital stock of the Company or to any
            voting trust, proxy or other agreement or understanding with respect
            to the voting of any capital stock of the Company (other than the
            Voting Agreement, if applicable).

     4.2    Representations and Warranties of Non-Individual Stockholders: Each
Stockholder that is not a natural person hereby represents and warrants to
Parent and to each other Stockholder as follows:

<PAGE>

       a. Such Stockholder is duly organized, validly existing, and in good
          standing under the laws of the jurisdiction in which it is organized.
          Such Stockholder has the corporate, partnership, limited liability
          company or other power and authority to enter into the Stockholder
          Documents, to perform its obligations under the Stockholder Documents,
          and to consummate the transactions contemplated by the Stockholder
          Documents.

       b. Such Stockholder has taken all corporate, partnership, limited
          liability company or other action necessary for it to enter into the
          Stockholder Documents, to perform its obligations under the
          Stockholder Documents, and to consummate the transactions contemplated
          by the Stockholder Documents.

       c. The execution, delivery and performance of the Stockholder Documents,
          and the consummation of the transactions contemplated by the
          Stockholder Documents, will not constitute a violation of, or a breach
          or default under, or conflict with, or require any consent under
          (other than a violation or default that has been waived or a consent
          that has been obtained), any term or provision of the certificate or
          articles of incorporation or bylaws, partnership agreement,
          certificate or articles of formation, limited liability company
          agreement or other charter or formation documents of such Stockholder.

                ARTICLE 5: Additional Agreements of Stockholders

     5.1  Release of Parent, Merger Sub, the Company and their Officers and
Directors: Each Stockholder, for good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged and intending to be legally bound,
in order to induce Parent and Merger Sub to consummate the Merger and thereby
exchange shares of Parent Common Stock for such Stockholder's shares of Company
Stock, hereby releases and forever discharges the Company, Merger Sub and Parent
and each of their respective individual, joint or mutual, past, present and
future agents, directors, officers, employees, consultants, advisors,
affiliates, stockholders, controlling persons, subsidiaries, successors and
assigns (individually, a "Releasee" and collectively, "Releasees") from any and
all claims, demands, causes of action, obligations, debts and liabilities
whatsoever, whether known or unknown, suspected or unsuspected, both at law or
in equity, which such Stockholder or any of his, her or its affiliates now has,
have ever had or may hereafter have against the respective Releasees arising
contemporaneously with or prior to the Effective Time or on account of or
arising out of any matter, cause or event occurring contemporaneously with or
prior to the Effective Time (other than any rights to indemnification or
reimbursement from the Company pursuant to its Certificate of Incorporation or
Bylaws from former officers and directors of the Company) whether or not
relating to claims pending on, or asserted after, the Effective Time; provided,
however, that nothing contained herein shall operate to release any obligations
of the Company, Merger Sub and Parent or the Stockholders arising under the
Merger Agreement. Such Stockholder hereby irrevocably covenants to refrain from,
directly or indirectly, asserting any claim or demand, or commencing,
instituting or causing to be commenced, any proceeding of any kind against any
Releasee, based upon any matter purported to be released hereby.

<PAGE>

         Each Stockholder that is a resident of the State of California
expressly waives any and all rights that they may have under any statute or
common-law principle that would limit the effect of the releases to those claims
actually known or suspected to exist at the time of execution of this Agreement,
including but not limited to the provisions of Section 1542 of the California
Civil Code, to the extent deemed applicable (notwithstanding that this Agreement
does not provide for the application of the California law), which provides as
follows: "[a] general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing the release,
which if known by him must have materially affected his settlement with the
debtor."

         5.2 Appointment of Stockholder Representative: The Stockholders hereby
appoint the Stockholder Representative as the representative of the
Stockholders. The Stockholder Representative shall have full power and authority
to represent the Stockholders and their successors and assigns with respect to
all matters arising under this Agreement, including, without limitation, the
amendment or waiver of any provision of this Agreement, and all action taken by
the Stockholder Representative hereunder, pursuant to authority granted herein,
shall be binding upon each Stockholder and their successors and assigns as if
expressly ratified and confirmed in writing by each of them. Without limiting
the generality of the foregoing, the Stockholder Representative shall have full
power and authority, on behalf of all the Stockholders and their successors, to
interpret all the terms and provisions of this Agreement, to negotiate and
compromise any dispute which may arise under this Agreement, to sign any
releases or other documents with respect thereto, and to retain such counsel and
consultants as appropriate and necessary to carry out his duties under this
Agreement.

         The Stockholder Representative, or any successor hereafter appointed,
may resign and shall be discharged of his duties hereunder upon the appointment
of a successor Stockholder Representative as hereinafter provided. In case of
such resignation, or in the event of the death or inability to act of the
Stockholder Representative, a successor shall be named by a majority of the
remaining Stockholders. Each such successor Stockholder Representative shall
have all the power, authority, rights and privileges hereby conferred upon the
original Stockholder Representative, and the term "Stockholder Representative"
as used herein shall be deemed to include each such successor Stockholder
Representative.

         The Stockholders shall indemnify and hold harmless the Stockholder
Representative from and against any direct or indirect demand, claim, payment,
obligation, action or cause of action, assessment, loss, liability, cost or
expense, including without limitation, penalties, interest on any amount payable
to a third party as a result of the foregoing, and any legal or other expense
reasonably incurred in connection with investigating or defending any claim or
action, whether or not resulting in any liability, and any amount paid in
settlement of any claim or action, incurred in connection with the performance
of his duties hereunder, including the advancement of expenses incurred in
connection with investigating or defending any claim or action.

         The Stockholder Representative is authorized to take the actions set
forth in this Agreement on behalf of the Stockholders, and Parent and Escrow
Agent shall have no liability to the Stockholders for any act or failure to act
of the Stockholder Representative. Parent and the Escrow Agent shall be entitled
to rely upon any act of the Stockholder Representative as an act of the
Stockholders pursuant to this Agreement.

<PAGE>

                    ARTICLE 6: General Terms and Conditions

         6.1 Extension of Benefits: All of the terms of this Agreement shall be
binding upon, and inure to the benefit of, and be enforceable by, the respective
heirs, legal representatives, successors and assigns of all of the parties to
this Agreement.

         6.2 Governing Law: This Agreement shall be construed and enforced in
accordance with the laws of the State of Delaware without regard to the law of
conflicts thereof.

         6.3 Notices: All notices, requests, demands and other communications
required under this Agreement shall be in writing and shall be deemed to have
been duly given if delivered personally, the next business day if delivered by
commercial delivery service or by reputable overnight courier, the third
business day if mailed by registered or certified mail (return receipt
requested), or the day of transmission if a business day or, if not, the next
business day thereafter, if sent via facsimile (with confirmation of receipt) to
the parties at the addresses set forth below the signature blocks on the
signature pages of this Agreement; provided, however, that all notices,
requests, demands and other communications required under this Agreement to be
given to any Stockholder shall be given to the Stockholder Representative at the
address set forth below the signature block for the Stockholder Representative
on the signature pages of this Agreement. It shall be the responsibility of the
Parties to notify each other and the Escrow Agent in writing of any name or
address changes. This Section 6.3 shall govern this Agreement except as
otherwise provided in Section 1 of Schedule B to this Agreement.
                                   ----------

         6.4 Entire Agreement: This Agreement sets forth the entire agreement
and understanding of the parties to this Agreement with respect to the subject
matter hereof.

         6.5 Amendment: This Agreement may be amended, modified, superseded,
rescinded or canceled only by a written instrument executed by Parent, the
Stockholder Representative and the Escrow Agent.

         6.6 Waivers: The failure of any party to this Agreement at any time or
times to require performance of any provision under this Agreement shall in no
manner affect the right at a later time to enforce the same performance. A
waiver by any party to this Agreement of any such condition or breach of any
term, covenant, representation or warranty contained in this Agreement, in any
one or more instances, shall neither be construed as a further or continuing
waiver of any such condition or breach nor a waiver of any other condition or
breach of any other term, covenant, representation or warranty contained in this
Agreement.

         6.7 Headings: The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall in no way restrict or
otherwise modify any of the terms or provisions of this Agreement.

         6.8 Counterparts: This Agreement may be executed in one or more
counterparts, each of which when executed shall be deemed to be an original, and
such counterparts shall together constitute one and the same instrument.

         6.9 Resignation or Removal of Escrow Agent: The Escrow Agent may resign
at any time by furnishing written notice of its resignation to the Parties. The
Parties may remove

<PAGE>

the Escrow Agent at any time by furnishing to the Escrow Agent a joint written
notice of its removal. Such resignation or removal, as the case may be, shall be
effective upon delivery of such notice.


                                    * * * * *

<PAGE>

         IN WITNESS WHEREOF, the Parties to this Agreement have each caused this
Agreement to be duly executed and delivered as of the date first written above.

                                             PARENT:

                                             ENDOREX CORPORATION


                                             /s/ Michael S. Rosen
                                             ------------------------------
                                             By:  Michael S. Rosen
                                             Its: President and Chief
                                                  Executive Officer



                                             Address:
                                             Endorex Corporation
                                             28101 Ballard Drive, Suite F
                                             Lake Forest, Illinois 60045
                                             Attn: Michael Rosen
                                                   President
                                             Telephone: (847) 573-8990
                                             Fax: (847) 573-9285

                                             with a copy to:

                                             Brobeck, Phleger & Harrison, LLP
                                             370 Interlocken Boulevard
                                             Fifth Floor
                                             Broomfield, Colorado 80021
                                             Attn: Richard R. Plumridge, Esq.
                                             Telephone: (303) 410-2000
                                             Fax: (303) 410-2199

<PAGE>

                                    STOCKHOLDER REPRESENTATIVE:


                                    /s/ Peter O. Kliem
                                    ---------------------------------
                                    PETER O. KLIEM


                                    Address:

                                    750 Main Street
                                    Cambridge, MA 02139
                                    Telephone: (617) 621-9575
                                    Facsimile: (617) 621-9574



                                    STOCKHOLDERS:
                                    [Signatures of Certain Stockholders of CTD]

<PAGE>

         The Escrow Agent, by affixing its signature below, hereby acknowledges
receipt of the Escrowed Property described in Schedule A and agrees to hold,
                                              ----------
administer, and dispose of the Escrowed Property in accordance with the terms,
conditions, and instructions of this Agreement, including those set forth in
Schedules B and C.
-----------------

                                         ESCROW AGENT:

                                         WELLS FARGO BANK MINNESOTA, NATIONAL
                                         ASSOCIATION, as Escrow Agent



                                         /s/ Robert L. Reynolds
                                         -----------------------------------
                                         By: Robert L.Reynolds
                                             -------------------------------
                                         Title: Vice President
                                               -----------------------------

                                             Wells Fargo Bank Minnesota, N.A.
                                             213 Court Street, Suite 902
                                             Middletown, CT 06457
                                             Telephone: (860)-704-6216
                                             Fax: (860) 704-6219

<PAGE>

                                   Schedule A


                                    Deposits

1,350,000 shares of common stock, $.001 par value per share ("Common Stock"), of
Endorex Corporation, a Delaware corporation

<PAGE>

                                   Schedule B


                                  Instructions

     1. If Parent requests indemnification from the Stockholders pursuant to its
rights under Section 8.4 of the Merger Agreement, then Parent shall notify the
Escrow Agent in writing of such request, the number of shares of Common Stock
requested for indemnification, the calculation of such number of shares pursuant
to Article 8 of the Merger Agreement and disbursement instructions
("Indemnification Notice"). The Escrow Agent shall, within five business days of
receipt of an Indemnification Notice, provide a copy of such Indemnification
Notice to the Stockholder Representative, and, ten business days after the
Stockholder Representative is deemed pursuant to Section 6.3 of this Agreement
to have received such Indemnification Notice from the Escrow Agent, disburse to
Parent from the Escrowed Property the number of shares of Common Stock requested
by Parent in such Indemnification Notice, unless prior to the date of
disbursement the Escrow Agent receives written notice from the Stockholder
Representative disputing in good faith ("Dispute Notice") Parent's right to all
or part of the shares of Common Stock set forth in the Indemnification Notice
("Disputed Shares").

     2. If the Stockholder Representative issues a Dispute Notice pursuant to
Section 1 above, then the Escrow Agent shall continue to hold all Disputed
Shares until receipt of written instructions jointly executed by Parent and the
Stockholder Representative or receipt of an order of any court directing the
disbursement of the Disputed Shares, and shall disburse the Disputed Shares in
accordance with such joint instructions or court order.

     3. On or promptly after March 31, 2002, the Escrow Agent shall disburse to
the Stockholder Representative the portion of the Escrowed Property in the names
and the amounts set forth under Section 1 of Schedule C, less (i) any Disputed
                                             ----------
Shares, which shall be disbursed as provided in Section 2 above, and (ii) any
shares set forth in any Indemnification Notice that the Stockholder
Representative is deemed pursuant to Section 6.3 of this Agreement to have
received no more than ten business days prior to such disbursement and for which
the Escrow Agent has not received a Dispute Notice, which amounts shall be
disbursed as provided in Section 1 above and, if applicable, Section 2 above
(all such shares in clause (i) and (ii) being referred to herein as "Holdback
Shares"). Distributions of Escrowed Property for Stockholders pursuant to this
Section 3 shall be reduced pro rata among the Stockholders based upon the
distribution of Escrowed Property set forth in Section 1 of Schedule C by an
                                                            ----------
aggregate number of shares equal to the number of Holdback Shares; provided,
                                                                   --------
however, that no fractional shares shall be disbursed for any Stockholder
-------
pursuant to this Section 3 and the Escrow Agent shall make such adjustments in
such pro rata reduction as are necessary for the disbursement of only whole
shares of the Escrowed Property for any Stockholder.

     4. On or promptly after September 30, 2002, the Escrow Agent shall disburse
to the Stockholder Representative the portion of the Escrowed Property in the
names and the amounts set forth under Section 2 of Schedule C, less any Holdback
                                                   ----------
Shares, which shall be disbursed as provided in Sections 1 and 2 above, as
applicable. For purposes of this Section 4, Holdback Shares shall not include
Holdback Shares withheld from disbursement under Section 3.

<PAGE>

Distributions of Escrowed Property for Stockholders pursuant to this Section 4
shall be reduced pro rata among the Stockholders based upon the distribution of
Escrowed Property set forth in Section 2 of Schedule C by an aggregate number of
                                            ----------
shares equal to the number of such Holdback Shares; provided, however, that no
                                                    --------  -------
fractional shares shall be disbursed for any Stockholder pursuant to this
Section 4 and the Escrow Agent shall make such adjustments in such pro rata
reduction as are necessary for the distribution of only whole shares of the
Escrowed Property for any Stockholder.

     5. On or promptly after March 31, 2003, the Escrow Agent shall disburse to
the Stockholder Representative the portion of the Escrowed Property in the names
and the amounts set forth under Section 3 of Schedule C, less any Holdback
                                             ----------
Shares, which shall be disbursed as provided in Sections 1 and 2 above, as
applicable. For purposes of this Section 5, Holdback Shares shall not include
Holdback Shares withheld from disbursement under Sections 3 and 4. Distributions
of Escrowed Property for Stockholders pursuant to this Section 5 shall be
reduced pro rata among the Stockholders based upon the distribution of Escrowed
Property set forth in Section 3 of Schedule C by an aggregate number of shares
                                   ----------
equal to the number of such Holdback Shares; provided, however, that no
                                             --------  -------
fractional shares shall be disbursed to any Stockholder pursuant to this Section
5 and the Escrow Agent shall make such adjustments in such pro rata reduction as
are necessary for the issuance of only whole shares of the Escrowed Property for
any Stockholder.

     6. Notwithstanding the provisions of Sections 1, 2, 3, 4 or 5 above, if
Parent and the Stockholder Representative jointly execute a written notice to
the Escrow Agent providing the Escrow Agent with disbursement instructions for
all or part of the Escrowed Property, the Escrow Agent shall disburse the
portion of the Escrowed Property referred to in such notice in accordance with
the instructions contained in such notice.

     7. The Stockholders shall have the full and unqualified right and power to
exercise any voting, consent and other rights with respect to the Escrowed
Property and to cause the Escrow Agent to tender all or part of the Escrowed
Property pursuant to a tender offer or exchange offer and neither the Escrow
Agent nor Parent shall have any duty, right or privilege to exercise any such
rights. The Escrow Agent shall exercise all such rights of the Stockholders as
directed by a certificate of the Stockholder Representative. All property
received by the Escrow Agent pursuant to a tender offer or exchange offer for
the Escrowed Property shall become Escrowed Property.

     8. In the event of any transaction wherein dividends, cash or other
property which is or will be apportioned to the Escrowed Property are
distributed in respect of the Escrowed Property, the Escrow Agent shall take all
steps necessary to obtain such cash or other property, including presenting the
Escrowed Property for exchange, conversion or other disposition, and the Parties
will execute such certificates, instruments or other documents as may be
requested by the Escrow Agent of such cash or other property. All such property
received by the Escrow Agent shall become Escrowed Property and shall be
disbursed with, and to the Party receiving, the Escrowed Property to which such
property was apportioned.

     9. The Parties hereby authorize the Escrow Agent to apply to the transfer
agent for the Common Stock for any division of certificates evidencing Escrowed
Property which may be

<PAGE>

required in connection with the distribution of Escrowed Property pursuant to
this Schedule B to the Agreement.
     ----------

     10. The Escrow Agent shall not, and is not authorized to convey, transfer
or distribute the Escrowed Property except as set forth in this Schedule B to
                                                                ----------
the Agreement.

<PAGE>

                                   Schedule C

                                  Distributions

1.   Common Stock to be distributed by the Escrow Agent to the Stockholder
     Representative on or promptly after March 31, 2002 pursuant to Section 3 of
     Schedule B:
     ----------

<TABLE>
<CAPTION>
Stockholder Name                                                                      Number of shares of Common Stock
<S>                                                                                   <C>
TVM Medical Ventures GmbH & Co. KG                                                                101,537
Nomura Bank (Switzerland) Ltd.                                                                     90,255
Paul Capital Partners V, L.P.                                                                      67,120
Imprimus Investors LLC                                                                             37,606
Bristol Rittenhouse Investments, L.P.                                                              37,606
Kendall Investments, LLC                                                                           18,803
IMS Global Investments X Ltd.                                                                      18,803
Richard J. Stern                                                                                   15,042
Stern Joint Venture, L.P.                                                                          15,042
Wolfson Equities                                                                                   15,042
Lindsay A. Rosenwald, M.D.                                                                         13,162
Concordia Partners                                                                                 11,282
C. Benveniste-Schuler                                                                              11,282
Drax Holdings, L.P.                                                                                 9,401
Bernard Selz                                                                                        9,401
Michael Steinhardt                                                                                  9,401
Keys Foundation, Curacro                                                                            9,401
Albert Reichmann                                                                                    7,521
James D. Stern                                                                                      7,521
Paul Capital Partners V (Domestic Annex Fund) L.P.                                                  5,648
Robert I. Falk                                                                                      3,760
G&G Enterprises                                                                                     3,760
Gibert Goldstein, Paul Shapiro, Trustees, UIT Howard Gittis Dated 12/23/88                          3,760
Caxton Partners                                                                                     3,760
Jeffrey S. Silverman                                                                                3,760
The Holding Company                                                                                 3,760
Seju Suzuki                                                                                         3,760
Cass & Co.Magnum Capital Growth Fund                                                                3,760
Yoshimasa Yamazaki                                                                                  3,760
Asahi Iron Foundry Co., Ltd.                                                                        3,760
Richard Vogel                                                                                       3,760
Maidenhair Investments, N.V.                                                                        3,760
Paul Capital Partners V International, L.P.                                                         2,444
Leonard J. Adams                                                                                    1,880
Wayne Saker                                                                                         1,880
Amram Kass P.C. Money Purchase Plan                                                                 1,880
David A. Braver                                                                                     1,880
Amram Kass PC Defined Benefit Pension Plan                                                          1,880
David A. Wolf                                                                                       1,880
Tis Prager                                                                                          1,316
Bruno Widmer                                                                                        1,316
Karen Cook, IRA (KC)                                                                                  940
Jack Hirschfield                                                                                      470
Paramount Capital Drug Development Holdings LLC                                                    50,922
Steve H. Kanzer                                                                                    11,418
Nicholas Bodor                                                                                      5,061
Kenneth U. Johnson                                                                                  5,061
Rivki Rosenwald                                                                                     4,960
Biotechnology Solutions, LLC                                                                        3,191
Nicholas Stergiopoulos                                                                              1,528
Wayne L. Rubin                                                                                      1,518
Michael Weiss                                                                                       1,518
Peter and Donna Kash                                                                                1,012
David R. Walner                                                                                     1,012
Huntington Street Company                                                                           1,012
</TABLE>



<PAGE>

<TABLE>
<CAPTION>
Stockholder Name                                                                      Number of shares of Common Stock
<S>                                                                                   <C>
June Street Company                                                                                 1,012
Rivki Rosenwald Custodian f/b/o Doni Rosenwald                                                      1,012
Rivki Rosenwald Custodian f/b/o Joshy Rosenwald                                                     1,012
Rivki Rosenwald Custodian f/b/o Demi Rosenwald                                                      1,012
Rivki Rosenwald Custodian f/b/o Davy Rosenwald                                                      1,012
Kash Family Foundation                                                                                810
Joseph E. Edelman                                                                                     759
Sarah E. Laut                                                                                         713
Michael Ferrari                                                                                       713
Blossom Rosenwald                                                                                     688
Seth Rosenwald                                                                                        688
Jon Rosenwald                                                                                         688
William Kanzer                                                                                        607
Gary Kanzer                                                                                           607
Donna Lozito                                                                                          222
American Friends of Hebron Yeshiva in Jerusalem                                                       202
Fred Mermelstein                                                                                      202
Lauren S. Fischer                                                                                     172
John Knox                                                                                             172
David M. Tanen                                                                                        172
Evan S. Borak                                                                                         172
Hope Viggiani                                                                                         101
Robert Klein                                                                                          101
Howard Schain                                                                                         101
John Pappadimitropoulos                                                                                50
</TABLE>

2.   Common Stock to be distributed by the Escrow Agent to the Stockholder
     Representative on or promptly after September 30, 2002 pursuant to Section
     4 of Schedule B:
          ----------

<TABLE>
<CAPTION>
Stockholder Name                                                                       Number of shares of Common Stock
<S>                                                                                    <C>
TVM Medical Ventures GmbH & Co. KG                                                                50,769
Nomura Bank (Switzerland) Ltd.                                                                    45,128
Paul Capital Partners V, L.P.                                                                     33,560
Imprimus Investors LLC                                                                            18,803
Bristol Rittenhouse Investments, L.P.                                                             18,803
Kendall Investments, LLC                                                                           9,401
IMS Global Investments X Ltd.                                                                      9,401
Richard J. Stern                                                                                   7,521
Stern Joint Venture, L.P.                                                                          7,521
Wolfson Equities                                                                                   7,521
Lindsay A. Rosenwald, M.D.                                                                         6,581
Concordia Partners                                                                                 5,641
C. Benveniste-Schuler                                                                              5,641
Drax Holdings, L.P.                                                                                4,701
Bernard Selz                                                                                       4,701
Michael Steinhardt                                                                                 4,701
Keys Foundation, Curacro                                                                           4,701
Albert Reichmann                                                                                   3,761
James D. Stern                                                                                     3,761
Paul Capital Partners V (Domestic Annex Fund) L.P.                                                 2,824
Robert I. Falk                                                                                     1,880
G&G Enterprises                                                                                    1,880
Gibert Goldstein, Paul Shapiro, Trustees, UIT Howard Gittis Trust                                  1,880
Caxton Partners                                                                                    1,880
Jeffrey S. Silverman                                                                               1,880
The Holding Company                                                                                1,880
Seju Suzuki                                                                                        1,880
Cass & Co.Magnum Capital Growth Fund                                                               1,880
Yoshimasa Yamazaki                                                                                 1,880
Asahi Iron Foundry Co., Ltd.                                                                       1,880
Richard Vogel                                                                                      1,880
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
Stockholder Name                                                                      Number of shares of Common Stock
<S>                                                                                   <C>
Maidenhair Investments, N.V.                                                                       1,880
Paul Capital Partners V International, L.P.                                                        1,222
Leonard J. Adams                                                                                     940
Wayne Saker                                                                                          940
Amram Kass P.C. Money Purchase Plan                                                                  940
David A. Braver                                                                                      940
Amram Kass PC Defined Benefit Pension Plan                                                           940
David A. Wolf                                                                                        940
Tis Prager                                                                                           658
Bruno Widmer                                                                                         658
Karen Cook, IRA (KC)                                                                                 470
Jack Hirschfield                                                                                     235
Paramount Capital Drug Development Holdings LLC                                                   25,461
Steve H. Kanzer                                                                                    5,709
Nicholas Bodor                                                                                     2,530
Kenneth U. Johnson                                                                                 2,530
Rivki Rosenwald                                                                                    2,480
Biotechnology Solutions, LLC                                                                       1,596
Nicholas Stergiopoulos                                                                               764
Wayne L. Rubin                                                                                       759
Michael Weiss                                                                                        759
Peter and Donna Kash                                                                                 506
David R. Walner                                                                                      506
Huntington Street Company                                                                            506
June Street Company                                                                                  506
Rivki Rosenwald Custodian f/b/o Doni Rosenwald                                                       506
Rivki Rosenwald Custodian f/b/o Joshy Rosenwald                                                      506
Rivki Rosenwald Custodian f/b/o Demi Rosenwald                                                       506
Rivki Rosenwald Custodian f/b/o Davy Rosenwald                                                       506
Kash Family Foundation                                                                               405
Joseph E. Edelman                                                                                    379
Sarah E. Laut                                                                                        357
Michael Ferrari                                                                                      357
Blossom Rosenwald                                                                                    344
Seth Rosenwald                                                                                       344
Jon Rosenwald                                                                                        344
William Kanzer                                                                                       304
Gary Kanzer                                                                                          304
Donna Lozito                                                                                         111
American Friends of Hebron Yeshiva in Jerusalem                                                      101
Fred Mermelstein                                                                                     101
Lauren S. Fischer                                                                                     86
John Knox                                                                                             86
David M. Tanen                                                                                        86
Evan S. Borak                                                                                         86
Hope Viggiani                                                                                         50
Robert Klein                                                                                          50
Howard Schain                                                                                         50
John Pappadimitropoulos                                                                               25
</TABLE>

3.   Common Stock to be distributed by the Escrow Agent to the Stockholder
     Representative on or promptly after March 31, 2003 pursuant to Section 5 of
     Schedule B:
     ----------

<TABLE>
<CAPTION>
Stockholder Name                                                                     Number of shares of Common Stock
<S>                                                                                  <C>
TVM Medical Ventures GmbH & Co. KG                                                                50,769
Nomura Bank (Switzerland) Ltd.                                                                    45,128
Paul Capital Partners V, L.P.                                                                     33,560
Imprimus Investors LLC                                                                            18,804
Bristol Rittenhouse Investments, L.P.                                                             18,804
Kendall Investments, LLC                                                                           9,402
IMS Global Investments X Ltd.                                                                      9,402
Richard J. Stern                                                                                   7,522
</TABLE>


<PAGE>

<TABLE>
<CAPTION>
Stockholder Name                                                                Number of shares of Common Stock
<S>                                                                             <C>
Stern Joint Venture, L.P.                                                                        7,522
Wolfson Equities                                                                                 7,522
Lindsay A. Rosenwald, M.D.                                                                       6,581
Concordia Partners                                                                               5,641
C. Benveniste-Schuler                                                                            5,641
Drax Holdings, L.P.                                                                              4,701
Bernard Selz                                                                                     4,701
Michael Steinhardt                                                                               4,701
Keys Foundation, Curacro                                                                         4,701
Albert Reichmann                                                                                 3,761
James D. Stern                                                                                   3,761
Paul Capital Partners V (Domestic Annex Fund) L.P.                                               2,825
Robert I. Falk                                                                                   1,881
G&G Enterprises                                                                                  1,881
Gibert Goldstein, Paul Shapiro, Trustees, UIT Howard Gittis Trust                                1,881
Caxton Partners                                                                                  1,881
Jeffrey S. Silverman                                                                             1,881
The Holding Company                                                                              1,881
Seju Suzuki                                                                                      1,881
Cass & Co.Magnum Capital Growth Fund                                                             1,881
Yoshimasa Yamazaki                                                                               1,881
Asahi Iron Foundry Co., Ltd.                                                                     1,881
Richard Vogel                                                                                    1,881
Maidenhair Investments, N.V.                                                                     1,881
Paul Capital Partners V International, L.P.                                                      1,223
Leonard J. Adams                                                                                   941
Wayne Saker                                                                                        941
Amram Kass P.C. Money Purchase Plan                                                                941
David A. Braver                                                                                    941
Amram Kass PC Defined Benefit Pension Plan                                                         941
David A. Wolf                                                                                      941
Tis Prager                                                                                         658
Bruno Widmer                                                                                       658
Karen Cook, IRA (KC)                                                                               470
Jack Hirschfield                                                                                   235
Paramount Capital Drug Development Holdings LLC                                                 25,462
Steve H. Kanzer                                                                                  5,710
Nicholas Bodor                                                                                   2,531
Kenneth U. Johnson                                                                               2,531
Rivki Rosenwald                                                                                  2,480
Biotechnology Solutions, LLC                                                                     1,596
Nicholas Stergiopoulos                                                                             765
Wayne L. Rubin                                                                                     760
Michael Weiss                                                                                      760
Peter and Donna Kash                                                                               506
David R. Walner                                                                                    506
Huntington Street Company                                                                          506
June Street Company                                                                                506
Rivki Rosenwald Custodian f/b/o Doni Rosenwald                                                     506
Rivki Rosenwald Custodian f/b/o Joshy Rosenwald                                                    506
Rivki Rosenwald Custodian f/b/o Demi Rosenwald                                                     506
Rivki Rosenwald Custodian f/b/o Davy Rosenwald                                                     506
Kash Family Foundation                                                                             405
Joseph E. Edelman                                                                                  380
Sarah E. Laut                                                                                      357
Michael Ferrari                                                                                    357
Blossom Rosenwald                                                                                  345
Seth Rosenwald                                                                                     345
Jon Rosenwald                                                                                      345
William Kanzer                                                                                     304
Gary Kanzer                                                                                        304
Donna Lozito                                                                                       112
American Friends of Hebron Yeshiva in Jerusalem                                                    102
Fred Mermelstein                                                                                   102
Lauren S. Fischer                                                                                   86
John Knox                                                                                           86
David M. Tanen                                                                                      86
Evan S. Borak                                                                                       86
</TABLE>

<PAGE>


Stockholder Name                                Number of shares of Common Stock

Hope Viggiani                                                    51
Robert Klein                                                     51
Howard Schain                                                    51
John Pappadimitropoulos                                          26




<PAGE>

                                   Schedule D

                                Escrow Agent Fees