Document:

<PAGE>

                                    ANTEGREN

                DEVELOPMENT AND MARKETING COLLABORATION AGREEMENT

                                     BETWEEN

               BIOGEN, INC. AND ELAN PHARMA INTERNATIONAL LIMITED

                                 AUGUST 15, 2000

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.
<PAGE>

Exhibit A      Alpha 4 Integrin
Exhibit B      Financial Planning, Accounting and Reporting for the Elan/Biogen
               Antegren Development and Marketing Collaboration Agreement
Exhibit C      Development Plan
Exhibit D      Letter Agreement with Lonza
Exhibit E              ***
Exhibit F      Press Release

Schedule 1.4         Description of Antegren
Schedule 1.9         Biogen Patents
Schedule 1.28        Current Clinical Trials
Schedule 1.35        Elan In-Licenses
Schedule 1.37        Elan Patents
Schedule 4.6(c)      Elan's Pre-Effective Date Development Costs
Schedule 4.8         Third Party Research Agreements
Schedule 7.1(b)(i)   Elan's Commitments to Third Party Contract Manufacturers
Schedule 7.1(b)(ii)  Existing Inventory
Schedule 11.5(a)     Existing Oppositions/Interferences

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

                                      -i-
<PAGE>

                                    ANTEGREN

                DEVELOPMENT AND MARKETING COLLABORATION AGREEMENT

     This Antegren Development and Marketing Collaboration Agreement (the
"Agreement") is entered into on this 15th day of August, 2000 by and between
BIOGEN, INC., a Massachusetts corporation, and its Affiliates ("Biogen") and
ELAN PHARMA INTERNATIONAL LIMITED, an Irish private limited company, and shall
be effective as of the HSR Clearance Date or, if no filing is to be made under
the HSR Act, then it shall be effective on the date set forth above (in either
case, the "Effective Date"). Biogen and Elan (as defined below) may each be
referred to herein individually as a "Party" and collectively as the "Parties".

                                    RECITALS

     1. Each Party has an interest in the preclinical and clinical development
of immunoglobulins and antibodies as means of inhibiting the activity of Alpha-4
Integrin (as defined below), a subunit of an alpha-beta heterodimeric
transmembrance glycoprotein implicated in the development of certain diseases,
including multiple sclerosis and inflammatory bowel disease.

     2. Elan has identified a therapeutic with potential value in treating
disease conditions associated with Alpha-4 Integrin, known as Antegren (as
defined below) which is currently in Phase II clinical trials.

     3. By combining their substantial experience and expertise, the Parties
wish, for the exclusive and mutual benefit of both, to work collaboratively to
expedite the development, regulatory approval, and commercialization of
Antegren.

     4. By working together, the Parties wish to reduce cost barriers to
research and development that each would face if acting individually, and to
enable each Party to build and support additional sales, marketing and
promotional expertise that may eventually expand their respective capabilities
with respect to other products.

     5. The Parties believe that a series of collaborations will lower their
costs, expedite the drug approval and delivery process, establish an effective
and efficient manufacturing and distribution system for Antegren, and be the
most efficient and cost effective way of promoting the therapeutic while
expanding each Party's presence in pharmaceuticals markets.

     6. Nothing in the Agreement is intended to limit the right or ability of
each Party independently to conduct research on other products, including other
therapeutics that may be identified for multiple sclerosis and inflammatory
bowel disease, or to manufacture, distribute, market, or promote such other
products.

<PAGE>

     7. Elan and Biogen each wish to grant to the other certain exclusive
licenses under each Party's respective intellectual property rights to permit
the other Party to participate in exclusive and mutually beneficial
collaborative development, marketing, co-promotion and sales efforts for
Antegren and to maintain an exclusive collaboration with respect to the Licensed
Products covered by this Agreement.

                                    AGREEMENT

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Parties,
intending to be legally bound, agree as follows:

                                   ARTICLE 1.
                                   DEFINITIONS

     The following capitalized terms, whether used in the singular or the
plural, shall have the following meanings as used in this Agreement unless
otherwise specifically indicated:

     1.1 "AFFILIATE(S)" shall mean, with respect to any person or entity, any
other person or entity which controls, is controlled by or is under common
control with such person or entity. A person or entity shall be regarded as in
control of another entity if it owns or controls, directly or indirectly, (i) in
the case of corporate entities at least fifty percent (50%) (or the maximum
ownership interest permitted by law) of the equity securities in the subject
entity entitled to vote in the election of directors and, (ii) in the case of an
entity that is not a corporation, at least fifty percent (50%) (or the maximum
ownership interest permitted by law) of the equity securities or other ownership
interests with the power to direct the management and policies of such subject
entity or entitled to elect the corresponding management authority, provided,
however, that the term "Affiliate" shall not include subsidiaries or other
entities in which a Party or its Affiliates owns a majority of the ordinary
voting power necessary to elect a majority of the board of directors or other
governing board, but is restricted from electing such majority by contract or
otherwise, until such time as such restrictions are no longer in effect.

     1.2 "ALPHA-4 INTEGRIN" shall mean any of those alpha-beta heterodimeric
transmembrane glycoproteins known as integrins where the alpha subunit chain has
the composition known as alpha-4, including, without limitation, the composition
of matter characterized on Exhibit A hereto.

     1.3 "ANNUAL WORKPLAN/BUDGET" shall mean the detailed schedule of
Development activities prepared by the Joint Project Team which sets out the
schedule, nature, and allocation of responsibilities of each Party for
Development work and the agreed upon budget for such activities. The Annual
Workplan/Budget shall be prepared by the Joint Project Team, subject to approval
by the JSC, as specified in Section 4.2.

                                       3
<PAGE>

     1.4 "ANTEGREN" shall mean the Licensed Product which is the subject of the
Current Clinical Trials and which is more fully characterized on Schedule 1.4.

     1.5 "ANTEGREN TRADEMARK" shall mean U.S. Registration No. 2,063,937, the
international equivalence thereof or such other trademark, mark or source
designating mark and foreign equivalents as may be agreed to by the JCT and
approved by the JSC for use in connection with Antegren.

     1.6 "ANTICIPATED PHASE III START DATE" shall mean September 2001, provided,
however, that if the technology transfer agreement referenced in Section 7.1(a)
of this Agreement has not been executed by July 21, 2000, the Anticipated Phase
III Start Date shall be such later date as reflects each day of delay until
execution of that agreement.

     1.7 "Biogen Cost" shall mean Biogen's Estimated Per Unit COGs plus Biogen's
Estimated Per Unit Distribution Costs.

     1.8 "Biogen Know-how" shall mean any and all Know-how which is within the
Control of Biogen as of the Effective Date or during the Term of this Agreement,
and (a) is useful for a Party to perform its tasks under this Agreement, the
Development Plan, any associated Annual Workplan/Budget, the Commercialization
Plan, any associated Annual Commercialization Plan/Budget or (b) is otherwise
useful to Promote, market, use, Develop, Commercialize, manufacture, sell or
import Licensed Products in the Field.

     1.9 "Biogen Patents" shall mean any and all Patents that are Controlled by
Biogen as of the Effective Date or during the Term of this Agreement and (i)
that claim Know-how that is necessary or useful to research, Develop, make, use
or sell Licensed Products in the Field or (ii) that claim Licensed Product or
any uses of Licensed Product in the Field or (iii) which otherwise would, but
for this Agreement, be infringed by the Development, manufacturing and/or
Commercialization activities of Elan performed under this Agreement. The term
"Biogen Patents" shall also include Biogen's interest in any Collaboration
Invention Patent Rights and in any Patents owned jointly by the Parties as
provided hereunder. "Biogen Patents" known to be existing as of the date hereof
are listed in Schedule 1.9.

     1.10 "Biogen Percentage" shall mean the percentage specified as the Biogen
Percentage under Section 6.1, as adjusted pursuant to Sections 4.7. The initial
Biogen Percentage shall be *** .

     1.11 "Blocking Third Party Intellectual Property" shall mean, in the
Territory, on a country-by-country basis, a valid patent or patent application
in such country owned or otherwise controlled by a Third Party, in the absence
of a license to which, the Development, manufacture and/or Commercialization of
Antegren or, as

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

                                       4
<PAGE>

applicable, other Licensed Product would infringe such patent or a patent that
issues from such patent application.

     1.12 "Bulk Supplies" shall mean bulk supplies of Licensed Product in a
suitable form, as specified under this Agreement or under any manufacturing
agreement between the Parties, ready for fill and finish.

     1.13 "Calendar Quarter" shall mean the respective periods of three
consecutive calendar months ending on March 31, June 30, September 30 or
December 31, for so long as this Agreement is in effect.

     1.14 "Change of Control" shall mean any of the following: (a) the sale or
disposition of all or substantially all of the assets of a Party or its direct
or indirect parent corporation to a Third Party, (b) the acquisition by a Third
Party which constitutes one person, as such term is used in Section 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
together with any such person's "affiliates" or "associates", as such terms are
defined in the Exchange Act, other than an employee benefit plan (or related
trust) sponsored or maintained by a Party or any of its Affiliates, of more than
50% of the outstanding shares of voting capital stock of a Party or its direct
or indirect parent corporation, or (c) the merger or consolidation of a Party or
its direct or indirect parent corporation with or into another corporation,
other than, in the case of this clause (c), an acquisition or a merger or
consolidation of a Party or its direct or indirect parent corporation in which
holders of shares of the voting capital stock of the Party or its direct or
indirect parent corporation, as the case may be, immediately prior to the
acquisition, merger or consolidation will have at least fifty percent (50%) of
the ownership of voting capital stock of the acquiring Third Party or the
surviving corporation in such merger or consolidation, as the case may be,
immediately after the merger or consolidation.

     1.15 "Clinical Supplies" shall mean supplies of Licensed Product in
suitable form, whether manufactured by Lonza or by Biogen, as specified under
this Agreement or under any manufacturing agreement between the Parties,
manufactured in compliance with GMP, if required given the intended use, and
ready to be used for the conduct of pre-clinical and/or human clinical trials of
a Licensed Product in the Field by the Parties pursuant to the Development Plan
and Annual Workplan/Budget.

     1.16 "Clinical Trial Application" shall mean an effective Notice of a
Claimed Investigational New Drug Exemption, as defined in Title 21 of the Code
of Federal Regulations, on file with the FDA before the commencement of clinical
trials of Licensed Products in humans, or any comparable filing with any
relevant regulatory agencies or other governmental entities in any country in
the Territory.

     1.17 "Collaboration Invention" shall mean all Inventions Controlled by
either Party, either alone or jointly with the other Party, which Inventions are
made (meaning that they are conceived during the Term and experimentation has
been initiated during the Term) by either Party's employees, agents or
subcontractors in the performance of such Party's obligations under this
Agreement, regardless of whether such

                                       5
<PAGE>

Collaboration Inventions are made solely by such Party's employees, agents or
subcontractors or jointly with the employees, agents or subcontractors of the
other Party.

     1.18 "Collaboration Invention Patent Rights" shall mean Patents which are
Controlled by either Party and which claim Collaboration Inventions.

     1.19 "Combination Product" shall mean a product containing both the
Licensed Product and one or more other active ingredients in addition to the
Licensed Product where the other active ingredients have independent
prophylactic or therapeutic effect when used alone to treat the disease or
indication for which the Combination Product is labeled, whether the Licensed
Product and the other active ingredients are together in a physical mixture or
packaged and priced together as a single product.

     1.20 "Combination Product Amount" shall mean the following: in the event a
Licensed Product is sold in the form of a Combination Product, Gross Sales or,
as applicable, Royalty-Bearing Sales for such Combination Product for purposes
of this Agreement will be determined by multiplying actual Gross Sales or, as
applicable, Royalty-Bearing Sales of such Combination Product by *** , where A
is the invoice price of the Licensed Product, if sold separately, and B is the
invoice price of any other active component or components in the combination, if
sold separately, in each case in the same country and in the same dosage as in
the Combination Product. If, on a country-by-country basis, the other active
component or components in the combination are not sold separately in such
country, Gross Sales or, as applicable, Royalty-Bearing Sales, shall be
calculated by multiplying actual Gross Sales, or as, applicable, Royalty-Bearing
Sales, of such Combination Product by *** where A is the invoice price of the
Licensed Product if sold separately, and C is the invoice price of the
Combination Product, in each case in the same country and in the same dosage as
in the Combination Product. If, on a country-by-country basis, the Licensed
Product component of the Combination Product is not sold separately in such
country, but the other active component or components are sold separately, Gross
Sales or, as applicable, Royalty-Bearing Sales, shall be calculated by
multiplying actual Gross Sales or, as applicable, Royalty-Bearing Sales, of such
Combination Product by *** where B is the invoice price of the other active
component or components, if sold separately, and C is the invoice price of the
Combination Product, in each case in the same country and in the same dosage as
in the Combination Product. If, on a country-by-country basis, neither the
Licensed Product nor the other active component or components of the Combination
Product is sold separately in such country, Gross Sales, or, as applicable,
Royalty Bearing Sales, for such Combination Product shall be *** .

     1.21 "Commercialization" shall mean any and all activities constituting
importing, marketing, distributing, offering for sale and selling a Licensed
Product in the Field and shall include but not be limited to Promotion as well
as activities required to

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

                                       6
<PAGE>

fulfill ongoing regulatory obligations, including adverse event reporting. When
used as a verb, "Commercialize" shall mean to engage in Commercialization.

     1.22 "Commercially Reasonable and Diligent Efforts" shall mean the level of
effort and resources normally used by a Party for a product or compound owned by
it or to which it has rights, which is of similar market potential and at a
similar stage in its development or product life, taking into account, without
limitation, with respect to Licensed Product issues of safety and efficacy,
product profile, the proprietary position of Licensed Product, the then current
competitive environment for the Licensed Product and the likely timing of the
Licensed Product's entry into the market, the regulatory environment and status
of Licensed Product, and other relevant scientific, technical and commercial
factors. Without limiting the foregoing, Commercially Reasonable and Diligent
Efforts as it applies to the Development of Licensed Products hereunder shall
mean adherence to the activities and time lines (to the extent adherence to such
activities and time lines is controllable by the Party responsible for
performing such activities) set forth in the then most current version of the
Development Plan and its associated Annual Workplan/Budget, subject to delays
caused by issues of safety and efficacy and other technical and scientific
issues that may arise or by any other factor outside of the reasonable control
of the responsible Party. Notwithstanding the foregoing, to the extent that the
performance of a Party's responsibilities hereunder is adversely affected by the
other Party's failure to perform its responsibilities hereunder, such Party
shall not be deemed to have failed to use its Commercially Reasonable and
Diligent Efforts in performing such responsibilities.

     1.23 "Commercially Significant Indication" shall mean, with respect to each
Licensed Product, the use of the Licensed Product for the treatment, diagnosis
or prevention of a specific disease or medical condition in humans where, with
respect solely to such specific disease or medical condition, there is a valid
technical rationale for use of Licensed Product in such indication and the peak
sales of Licensed Product alone or as part of a Combination Product (using a
Combination Product Amount-type adjustment), as evidenced by appropriate market
research, are expected to be equal to or greater than *** per annum in the
United States. *** APPROXIMATELY 8 LINES OMITTED ***

     1.24 "Commercial Supplies" shall mean supplies of Licensed Product in
suitable final packaged form, as specified under any manufacturing agreement
between the Parties, manufactured in compliance with GMP, and ready to be
offered for commercial sale for use in the Field in the Territory by Biogen
and/or Elan, and/or their Affiliates, or permitted licensees or sublicensees.

     1.25 "Control" shall mean the possession by a Party of the ability to grant
access to, the right to use, or a license or sublicense, in each case as
provided for in this Agreement, without violating the terms of any agreement or
other arrangement with any Third Party existing at the time such Party would be
required hereunder to grant the other

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

                                       7
<PAGE>

Party such access or license or sublicense. "Controlled" shall mean the past
tense of Control.

     1.26 "Co-Promotion" shall mean to Promote jointly a Licensed Product
through Biogen, Elan, their Affiliates, and their respective sales forces, under
a single trademark in the applicable country in the Territory.

     1.27 "Cost of Goods Manufactured For Sale" shall have the meaning set forth
in Exhibit B.

     1.28 "Current Clinical Trials" shall mean the clinical trials underway as
of the Effective Date, as more fully described in Schedule 1.28.

     1.29 "Development" shall mean all activities performed by or on behalf of
either Party pursuant to the Development Plan and each Annual Workplan/Budget
with respect to a Licensed Product in the Field and in the Territory from March
1, 2000 until Regulatory Approval of a Licensed Product is obtained for the
indication under study. "Development" shall include, without limitation, all
activities related to preclinical testing, test method development and stability
testing, toxicology, formulation, process development, manufacturing scale-up,
qualification and validation, quality assurance/quality control, clinical
studies, regulatory affairs, statistical analysis and report writing, market
research and development and all other pre-approval activities, each to the
extent performed pursuant to the Development Plan and an Annual Workplan/Budget.
When used as a verb, "Develop" shall mean to engage in Development.

     1.30 "Development Costs" shall have the meaning defined in Exhibit B.

     1.31 "Development Plan" shall mean the comprehensive plan for (i) the
Development of Antegren or, as applicable, any other Licensed Product,
including, but not limited to activities designed to generate the preclinical,
process development/manufacturing scale-up, clinical and regulatory information
required for filing Drug Approval Applications in the Territory and (ii) the
preparation and submission of Drug Approval Applications. An initial Development
Plan is attached hereto as Exhibit C and incorporated herein, but may be
modified pursuant to Section 4.2, and thereafter will be updated at least
annually by the Joint Project Team, as approved by the JSC, as specified in
Section 4.2. Subject to Section 4.7, the Development budget included as part of
an Annual Workplan/Budget for a particular calendar year shall, within the
limitations provided for in Section 4.6(d), constitute the maximum costs to be
incurred thereunder during such calendar year for Development work, unless such
budget is modified by the Joint Project Team, as approved by the JSC, in
accordance with the terms of this Agreement.

     1.32 "Distribution Costs" shall have the meaning defined in Exhibit B.

     1.33 "Drug Approval Application" shall mean an application to a Regulatory
Authority for Regulatory Approval of Licensed Product.

                                       8
<PAGE>

     1.34 "Elan" shall mean Elan Pharma International Limited, an Irish private
limited company, and those Affiliates which Elan Pharma International Limited
designates to carry out its rights and obligations under this Agreement.

     1.35 "Elan In-Licenses" shall mean the licenses listed on Schedule 1.35,
each one an "Elan In-License".

     1.36 "Elan Know-how" shall mean any and all Know-how which is within the
Control of Elan or any of its Affiliates as of the Effective Date or during the
Term of this Agreement, and (a) is useful for a Party to perform its tasks under
this Agreement, the Development Plan, any associated Annual Workplan/Budget, the
Commercialization Plan, any associated Annual Commercialization Plan/Budget or
(b) is otherwise useful to Promote, market, use, Develop, Commercialize,
manufacture, sell or import Licensed Products in the Field.

     1.37 "Elan Patents" shall mean any and all Patents that are Controlled by
Elan or any of its Affiliates as of the Effective Date or during the Term of
this Agreement and (i) that claim Know-how that is necessary or useful to
research, Develop, make, use or sell Licensed Products in the Field or (ii) that
claim Licensed Product or any uses of Licensed Product in the Field or (iii)
which otherwise would, but for this Agreement, be infringed by the Development,
manufacturing and/or Commercialization activities of Biogen performed under this
Agreement. The term "Elan Patents" shall also include Elan's interest in any
Collaboration Invention Patent Rights and in any Patents owned jointly by the
Parties as provided hereunder. "Elan Patents" known to be existing as of the
date hereof are listed in Schedule 1.37.

     1.38 "Elan Percentage" shall mean the percentage specified as the Elan
Percentage under Section 6.1, as adjusted pursuant to Sections 4.7. The initial
Elan Percentage shall be *** .

     1.39 "Enhancing Third Party Intellectual Property" shall mean, in the
Territory, on a country-by-country basis, a valid patent or patent application
in such country owned or otherwise Controlled by a Third Party, that covers an
invention, which if utilized by the Parties under this Agreement would
facilitate the Development, manufacture or Commercialization of Antegren, or, as
applicable, other Licensed Product and/or could materially enhance the
commercial value of any Licensed Product. For purposes of clarity, Enhancing
Third Party Intellectual Property shall not include Blocking Third Party
Intellectual Property.

     1.40 "Estimated Net Selling Price" as applicable to sales of Commercial
Supplies by Biogen to Elan in any quarter shall mean an amount equal to total
Net Sales for the preceding Calendar Quarter divided by the number of units of
Licensed Product sold by Elan, its Affiliates and permitted sublicensees during
such preceding Calendar Quarter, subject to adjustment, as determined by the
JCT, to reflect any known trends

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

                                       9
<PAGE>

with respect to the Calendar Quarter for which the calculation is being made. If
at the time Estimated Net Selling Price is being calculated, Licensed Product
has not yet been launched or has not been on the market for a full quarter, the
JCT shall determine Estimated Net Selling Price based on any total Net Sales and
number of units sold data then available or, if none, a good faith estimate of
anticipated total Net Sales and number of units forecasted to be sold for the
quarter in which launch is anticipated. If the JCT determines to adjust the
frequency of re-calculation of Transfer Price under Section 7.1(e) to other than
a quarterly basis, the references to quarterly amounts in this definition shall
be changed to reflect the period determined by the JCT to be used for the
calculation of Transfer Price.

     1.41 "Estimated Per Unit COGs" as applicable to sales of Commercial
Supplies by Biogen to Elan in any quarter shall mean an amount equal to Biogen's
Cost of Goods Manufactured For Sale for the number of units sold by Elan, its
Affiliates and permitted sublicensees during the preceding Calendar Quarter
divided by the number of units sold during such previous Calendar Quarter,
subject to any adjustment, as determined by the JCT, to reflect any known trends
with respect to the Calendar Quarter for which the calculation is being made. If
at the time the Estimated Per Unit COGs calculation is being made, Licensed
Product has not yet been launched or has not been on the market for a full
quarter, the JCT shall determine Estimated Per Unit COGs based on any Cost of
Goods Manufactured For Sale data then available. If the JCT determines to adjust
the frequency of re-calculation of Transfer Price under Section 7.1(e) to other
than a quarterly basis, the references to quarterly amounts in this definition
shall be changed to reflect the period determined by the JCT to be used for the
calculation of Transfer Price.

     1.42 "Estimated Per Unit Distribution Costs" for a Party as applicable to
sales of Commercial Supplies by Biogen to Elan in any quarter shall mean an
amount equal to such Party's allocable Distribution Costs for the preceding
Calendar Quarter divided by the number of units of Licensed Product sold by
Elan, its Affiliates and permitted sublicensees during such preceding Calendar
Quarter, subject to adjustment, as determined by the JCT, to reflect any known
trends with respect to the Calendar Quarter for which the calculation is being
made. If at the time the Estimated Per Unit Distribution Costs calculation is
being made, Licensed Product has not yet been launched or has not been on the
market for a full quarter, the JCT shall determine Estimated Per Unit
Distribution Costs based on any Distribution Costs and number of units sold data
then available or, if none, a good faith estimate of anticipated Distribution
Costs and number of units forecasted to be sold for the calendar quarter in
which launch is anticipated. If the JCT determines to adjust the frequency of
re-calculation of Transfer Price under Section 7.1(e) to other than a quarterly
basis, the references to quarterly amounts in this definition shall be changed
to reflect the period determined by the JCT to be used for the calculation of
Transfer Price.

     1.43 "Estimated Selling Proceeds" shall mean the Estimated Net Selling
Price less Elan's Estimated Per Unit Distribution Costs.

     1.44 "EU" shall mean the European Union and its member nations as existing
at the relevant point in time.

                                       10
<PAGE>

     1.45 "FDA" shall mean the United States Food and Drug Administration and
any successor agency.

     1.46 "FD&C Act" shall mean the U.S. Food, Drug and Cosmetic Act, 21
C.F.R.(Section)210 et seq. and the regulations promulgated thereunder, as the
same may be amended from time to time.

     1.47 "Field" shall mean the diagnosis, treatment or prevention of any
medical or disease condition in humans, including, without limitation, multiple
sclerosis or inflammatory bowel disease.

     1.48 "First Commercial Sale" shall mean, in each country in the Territory,
the first sale by Biogen, Elan, or their Affiliates or permitted sublicensees of
a Licensed Product to a Third Party after the required Regulatory Approval to
sell such Licensed Product in that country has been granted by the relevant
Regulatory Authority. A Licensed Product sale shall be deemed to occur on the
earlier of (a) the date the Licensed Product is shipped, or (b) the date of the
invoice to the purchaser of the Licensed Product.

     1.49 "FTE" shall mean a total of forty-seven (47) weeks or 1880 hours per
year of work on the Development, manufacturing or Commercialization of a
Licensed Product carried out by employees of a Party having the appropriate
relevant expertise to conduct such activities.

     1.50 "FTE Rate" shall mean the applicable rate per FTE to be applied by the
Parties under this Agreement as set forth in Exhibit B.

     1.51 "GCP" shall mean "Good Clinical Practice" or "GCP". Good Clinical
Practice or GCP shall mean the then current standards for clinical trials for
pharmaceuticals, as set forth in the FD&C Act and applicable regulations
promulgated thereunder, as amended from time to time, and such standards of good
clinical practice as are required by the Regulatory Authorities of the EU and
other organizations and governmental agencies in countries in which the Licensed
Products are intended to be sold, to the extent such standards are not less
stringent than United States GCP, provided that a Party shall not be held to any
standards of good clinical practice that are different than those standards
required by the United States and the EU unless such standards have been
specifically identified and approved for implementation by the Joint Project
Team.

     1.52 "GLP" shall mean the then current standards for laboratory activities
for pharmaceuticals, as set forth in the FD&C Act and applicable regulations
promulgated thereunder, as amended from time to time, and such standards of good
laboratory practice as are required by the Regulatory Authorities of the EU.

     1.53 "GMP" or "cGMP" shall mean the regulatory requirements for current
good manufacturing practices promulgated by the FDA under the FD&C Act and under
the Public Health Service Act, Biological Products, 21 C.F.R. (Sections) 600-610
("PHS Act"), and the regulations promulgated thereunder, as the same may be
amended from time to time, and such standards of good manufacturing practice as
are required by the

                                       11
<PAGE>

Regulatory Authorities of the EU and other organizations and governmental
agencies in countries in which the Licensed Products are intended to be
manufactured or sold, to the extent such standards are not less stringent than
United States GMP, provided that a Party shall not be held to any standards
required by countries outside the United States and EU unless such standards
have been identified and approved for implementation by the Joint Project Team.

     1.54 "Gross Sales" shall have the meaning defined in Exhibit B.

     1.55 "HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended, and the rules and regulations promulgated thereunder.

     1.56 "HSR Clearance Date" shall mean the earliest date on which the Parties
have actual notice that all applicable waiting periods under the HSR Act with
respect to the transactions contemplated hereunder have expired or have been
terminated.

     1.57 "Invention" shall mean any discovery or other finding that directly
relates to a Licensed Product, the Development of any Licensed Product, any
method of making a Licensed Product or any method of using a Licensed Product or
any uses of Licensed Product in the Field.

     1.58 "Joint Commercialization Team" or "JCT" shall mean that body
established pursuant to Section 3.3 below.

     1.59 "Joint Patent Committee" or "JPC" shall mean that subcommittee of the
Joint Project Team established pursuant to Section 3.4 below.

     1.60 "Joint Project Team" or "JPT" shall mean that body established
pursuant to Section 3.2 below.

     1.61 "Joint Steering Committee" or "JSC" shall mean that committee
established pursuant to Section 3.1 below.

     1.62 "Know-how" shall mean all data, Inventions, methods, proprietary
information, processes, trade secrets, techniques and technology of a Party
(including Confidential Information as defined in Article 10 below), whether
patentable or not but which are not generally known, which directly relate to
Licensed Products or to the manufacture, testing or use of Licensed Product and
are Controlled by such Party as of the Effective Date or hereafter during the
Term of this Agreement, including, but not limited to, discoveries, formulae,
materials, including biological materials, practices, methods, knowledge,
know-how, processes, experience, test data (including pharmacological,
toxicological and clinical information and test data), analytical and quality
control data, marketing, pricing, distribution, cost and sales data or
descriptions. "Know-how" may be made prior to the Effective Date or during the
Term, solely by employees of Elan, solely by employees of Biogen, jointly by
employees of Elan and Biogen, or by Elan or Biogen employees jointly with a
Third Party.

                                       12
<PAGE>

     1.63 "Licensed Product" shall mean any formulation (as determined from time
to time in accordance with this Agreement) containing as an active constituent
*** APPROXIMATELY 9 LINES OMITTED *** The term Licensed Product shall, as
applicable, include Antegren. A Licensed Product approved for several different
indications shall be considered a single Licensed Product.

     1.64 "Licensed Product Promotional Materials" shall mean all Sales
Representative training materials and all written, printed, graphic, electronic,
audio or video matter related to the marketing or Promotion of a Licensed
Product, including, but not limited to, journal advertisements, sales visual
aids, direct mail, direct-to-consumer advertising, internet postings, broadcast
advertisements, and sales reminder aids (e.g., scratch pads, pens and other such
items) intended for use or used by a Party in connection with any Promotion.

     1.65 "Lonza" shall mean Lonza Biologics plc.

     1.66 "Major Market Country" shall mean any of the *** .

     1.67 "Marketing Costs" shall have the meaning defined in Exhibit B.

     1.68 "Net Sales" shall have the meaning defined in Exhibit B.

     1.69 "Patent(s)" shall mean any and all patents, patent applications and
any patents issuing therefrom, worldwide together with any extensions,
registrations, confirmations, supplemental protection certificates and other
like forms of patent term extensions, reissues, continuations, divisions,
continuations-in-part, reexaminations, substitutions or renewals thereof.

     1.70 "Patent Costs" shall have the meaning defined in Exhibit B.

     1.71 "Percentage" as to Elan shall mean the Elan Percentage and as to
Biogen shall mean the Biogen Percentage.

     1.72 "Phase I Clinical Trial" shall mean studies in humans to obtain
initial data regarding the safety of Licensed Product.

     1.73 "Phase II Clinical Trial" shall mean studies in humans of the safety,
dose range and efficacy of a Licensed Product which are conducted after Phase I
Clinical Trial of such Licensed Product.

     1.74 "Phase III Clinical Trial" shall mean one or more controlled studies
in humans of the efficacy and safety of a Licensed Product, which is
prospectively designed to demonstrate statistically whether the Licensed Product
is safe and effective for use in a particular indication, in a manner intended
to be sufficient to obtain

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

                                       13
<PAGE>

Regulatory Approval to market that Licensed Product and which the Joint Project
Team designates as a Phase III Clinical Trial.

     1.75 "Phase IV Clinical Trial" shall mean any clinical trial in an
indication to be conducted after a Regulatory Approval in such indication which
was mandated by the applicable Regulatory Authority as a condition of such
Regulatory Approval.

     1.76 "Post-Approval Clinical Trial" shall mean any clinical trial in an
indication, other than a Phase III Clinical Trial or Phase IV Clinical Trial, to
be conducted after a Regulatory Approval for such indication.

     1.77 "Pre-Marketing Expenses" shall have the meaning defined in Exhibit B.

     1.78 "Product Trademark" shall have the meaning set forth in Section
5.3(c).

     1.79 "Promotion" shall mean those activities, including, without
limitation, detailing normally undertaken by a pharmaceutical company's sales
force to implement marketing plans and strategies aimed at encouraging the
appropriate use of a particular Licensed Product in a specific indication. When
used as a verb, "Promote" shall mean to engage in such activities.

     1.80 "Regulatory Approval" shall mean any approvals (including pricing and
reimbursement approvals), licenses, registrations or authorizations of any
federal, state or local regulatory agency, department, bureau or other
governmental entity, necessary for the marketing and sale of a Licensed Product
in a regulatory jurisdiction.

     1.81 "Regulatory Authority" shall mean any national (e.g., the FDA),
supra-national (e.g., the European Commission, the Council of the European
Union, or the European Agency for the Evaluation of Medicinal Products
("EMEA")), regional, state or local regulatory agency, department, bureau,
commission, council or other governmental entity in any jurisdiction of the
world involved in the granting of Regulatory Approval for Antegren or, as
applicable, other Licensed Product.

     1.82 Reimbursable Commercial Costs" shall mean Premarketing Expenses,
Marketing Costs, Sales Costs, Other Out-of-Pocket Costs and Ongoing Development
Expense.

     1.83 "Royalty-Bearing Sales" shall mean, with respect to a License
Agreement (as defined in Section 14.2(d)), the gross amounts charged for sales
of Licensed Products by a Party, its Affiliates (which, solely for purposes of
this definition and Section 14.3 and any License Agreement, shall,
notwithstanding the proviso in the definition of Affiliates under Section 1.1,
include any subsidiaries or other entities in which the Party or its Affiliates
owns a majority of the ordinary voting power necessary to elect a majority of
the board of directors or other governing board, whether or not such Party or
Affiliate is restricted from electing such majority by contract or otherwise)

                                       14
<PAGE>

and/or its sublicensees, as appropriate, to Third Parties, less the sum of (a)
and (b) where (a) is a provision for (i) reasonable trade, cash and quantity
discounts (other than price discounts granted at time of invoice and which are
already reflected in the determination of the amount charged), (ii) credits or
allowances actually given or made for rejection or return of, previously sold
products or for rebates or retroactive price reductions (including Medicaid,
Medicare, government, commercial and similar types of rebates), (iii) taxes,
duties or other governmental charges levied on or measured by the billing amount
(excluding income and franchise taxes), as adjusted for rebates and refunds,
(iv) charges actually incurred for freight and insurance directly related to the
distribution of the Licensed Product (excluding amounts reimbursed by Third
Party customers), (v) reasonable credits or allowances actually given or made
for wastage replacement and (vi) reasonable allowances for bad debt; and (b) is
a periodic adjustment of the provision determined in (a) to reflect amounts
actually incurred for (i), (ii), (iii), (iv), (v) and (vi). Royalty-Bearing
Sales for Combination Products shall be based on the Combination Product Amount.
A "sale" of a Licensed Product is deemed to occur upon the earlier to occur of
the date the Licensed Product is shipped or the date of the invoice to the
purchaser of the Licensed Product.

     1.84 "Sales Costs" shall have the meaning set forth in Exhibit B.

     1.85 "Sales Representative" shall mean an employee of either Party or its
Affiliates or permitted sublicensees or, as applicable, employee of a contract
sales organization: (a) who is responsible for contacting customers and others
who can buy or influence the buying decision with respect to the applicable
Licensed Product in the applicable country in the Territory, and (b) whose
success at such activities is a significant factor in the ongoing employment of
the individual.

     1.86 "Sample" shall mean a unit of a Licensed Product that is not intended
to be sold and is intended to promote the sale of such Licensed Product. When
used as a verb, "Sample" shall mean to provide Samples to health care providers.

     1.87 "Territory" shall mean every country, territory, possession or other
political subdivision of the world.

     1.88 "Third Party" shall mean any entity other than Elan or Biogen or their
Affiliates.

     1.89 "Third Party License" shall mean any agreement with a Third Party for
a license under Blocking Third Party Intellectual Property or Enhancing Third
Party Intellectual Property entered into by a Party during the Term of this
Agreement pursuant to Sections 8.3 or 11.9.

     1.90 "Third Party License Fees" shall mean license fees, royalties and
other amounts paid to any Third Party under a Third Party License or an Elan
In-License after the Effective Date.

                                       15
<PAGE>

     1.91 "Transfer Price" *** .

     1.92 "United States" or "U.S." shall mean the United States of America, its
territories and possessions, and the Commonwealth of Puerto Rico.

     1.93 Additional Definitions. Each of the following definitions are found in
the body of this Agreement as indicated:

                                                                     Section
   "ACQUIRED PARTY"                                                  14.7(a)
   "AMA"                                                             5.4(e)
   "AMA GUIDELINES"                                                  5.4(e)
   "ANNUAL COMMERCIALIZATION PLAN/BUDGET"                            5.1(c)
   "CLINICAL MANUFACTURING AGREEMENT"                                7.1(c)
   "CLINICAL RESUPPLY CAMPAIGN"                                      Exhibit C
   "COLLABORATION AGREEMENT"                                         4.8
   "COMMERCIAL MANUFACTURING AND SUPPLY AGREEMENT"                   7.1(e)
   "COMMERCIALIZATION PLAN"                                          5.1(c)
   "COMMERCIALIZATION TEAM LEADER"                                   3.3
   "CONFIDENTIAL INFORMATION"                                        10.1
   "CONTRACT SALES ORGANIZATION" OR "CSO"                            5.1(d)
   "COST OF CAPITAL CHARGE"                                          Exhibit B
   "DESIGNATED PARTY"                                                5.1(b)
   "DEVELOPMENT COST PROJECT ACCOUNT"                                4.6(b)
   "DISTRIBUTION ACTIVITIES"                                         5.6
   "DISTRIBUTING PARTY"                                              5.6
   "DIVESTED ASSETS"                                                 14.8
   "DIVESTING PARTY"                                                 14.8
   "EXCLUDED INDICATION"                                             4.7(a)
   "FUNCTIONAL CURRENCY"                                             Exhibit B
   "INCLUDED INITIAL PERIOD COSTS"                                   4.6(c)
   "INITIAL PERIOD"                                                  4.6(c)
   "LICENSE AGREEMENT"                                               14.2(d)
   "LICENSING PARTY"                                                 14.2(d)
   "LOSSES"                                                          15.1(a)
   "MATERIAL TRANSFER AGREEMENT"                                     4.8
   "NOMINATED PRICE"                                                 14.7(b)
   "NON-ACQUIRED PARTY"                                              14.7(a)
   "ONGOING DEVELOPMENT EXPENSES"                                    Exhibit B
   "OTHER OUT-OF-POCKET COSTS"                                       Exhibit B
   "OUTSIDE THE SCOPE INVENTIONS                                     11.1(b)
   "PhRMA"                                                           5.4(e)
   "PhRMA CODE"                                                      5.4(e)

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

                                       16
<PAGE>

   "PROJECT TEAM LEADER"                                             3.2
   "RECONCILIATION STATEMENT"                                        Exhibit B
   "SALES RETURNS AND ALLOWANCES"                                    Exhibit B
   "SPLIT ADJUSTMENT OR SPLIT ADJUSTED BASIS"                        14.1(b)(i)
   "TERM"                                                            14.1(a)
   "THIRD PARTY RESEARCH AGREEMENTS"                                 4.8
   "VALUATION"                                                       14.7(c)
   "VALUATION PRICE"                                                 14.7(c)

                                   ARTICLE 2.
                           SCOPE OF THE COLLABORATION

     2.1 Collaboration Goals. Pursuant and subject to the terms of this
Agreement, within the Field and the Territory, the Parties agree to: (a) engage
in Development activities with the goal of obtaining Regulatory Approval for
Antegren or, as applicable, other Licensed Product, as soon as reasonably
practicable, in one or more Commercially Significant Indications in each Major
Market Country where it makes commercial sense to do so given the size of the
potential market and the safety and efficacy profile of Licensed Product and (b)
engage in Commercialization of Antegren, or, as applicable, other Licensed
Product, with the goal of optimizing the profit available to each Party. For
purposes of clarity, it is understood by the Parties that the JCT may decide
that it does not make commercial sense for the Parties to Develop or
Commercialize Licensed Product in a particular Major Market Country in a given
indication. Each Party agrees to use Commercially Reasonable and Diligent
Efforts in performing its tasks and responsibilities and in conducting all
activities ascribed or assigned to it under this Agreement, the then current
Development Plan, any Annual Work Plan/Budget, the then current
Commercialization Plan and any Annual Commercialization Plan/Budget. Each Party
shall cooperate with and provide reasonable support to the other Party in
performing its activities with respect to the Development and Commercialization
work contemplated hereunder. Each Party agrees, during the Term, to Develop,
manufacture, Commercialize and Promote Licensed Products only under the terms of
this Agreement. The Parties' intent is to Develop, Commercialize, manufacture
and Promote Antegren or, as applicable, other Licensed Product, as expeditiously
as reasonably practicable with the resources and responsibilities allocated
between the Parties on the basis of each Party's respective capabilities and
availability of adequate capacities, either internally or through such
subcontractors as are customarily used by a Party. Unless otherwise specified in
this Agreement, the guiding principles to be followed by the JSC, the Joint
Project Team and the JCT are as follows: achieve synergy and avoid duplication
of resources; maximize the profitability of Antegren or, as applicable, other
Licensed Product, over its life; and utilize, to the extent practicable, the
then-prevailing infrastructure and expertise of each Party with respect to
specific Development activities and any specific indication and utilize, on a
country-by-country basis, to the extent practicable, the then-prevailing
commercial infrastructure, expertise and track record of each Party in promoting
sales of disease modifying agents in the applicable disease area and for other
Commercialization activities. The Parties shall

                                       17
<PAGE>

apply a standard of reasonableness and fairness to each Party and, subject to
the specific terms of this Agreement, shall strive to balance the legitimate
interests and concerns of both Parties, with the goal of realizing the economic
potential of Licensed Product and allowing both Parties to benefit from the
realization of such potential and share in the profitability of Licensed
Product.

     2.2 Exclusive Relationship. Except as expressly set forth in this
Agreement, it is understood and agreed by the Parties that, during the Term, the
Parties shall work exclusively with each other to research, Develop, manufacture
and Commercialize Licensed Products in the Field solely in accordance with the
terms of this Agreement. During the Term of this Agreement, for so long as
Antegren or, as applicable, other Licensed Product, is being researched,
Developed, manufactured and/or Commercialized under this Agreement, neither
Party shall, alone or in collaboration with or through the grant of any rights
to any Third Party, research, Develop, make, import, export, distribute, offer
for sale, or otherwise Commercialize or Develop Antegren or, as applicable,
other Licensed Product, for use as a therapeutic, diagnostic or prophylactic,
except as otherwise permitted under this Agreement. Notwithstanding anything in
this Agreement to the contrary, either Party shall be free to work alone or with
Third Parties to research, develop, manufacture and/or commercialize any product
that is not a Licensed Product in or outside the Field, including any
composition of matter, therapeutic approach or means of treatment based upon
inhibition of Alpha-4 Integrin which is not a Licensed Product. Prior to
entering into a collaboration with a Third Party after the date hereof to
research, develop, manufacture and/or commercialize any composition of matter,
therapeutic approach or means of treatment based upon inhibition of Alpha-4
Integrin with a protein product which is not a Licensed Product, Elan shall
first offer to Biogen the opportunity to include such composition of matter,
therapeutic approach or means of treatment in the mutual and exclusive
collaboration set forth in this Agreement.

                                   ARTICLE 3.
                         MANAGEMENT OF THE COLLABORATION

     3.1 Joint Steering Committee.

         (a) Establishment of Joint Steering Committee. Within thirty (30) days
of the Effective Date, the Parties will establish a Joint Steering Committee, or
JSC, to oversee and manage the Development and Commercialization activities
contemplated by this Agreement and to be implemented by the Joint Project Team
and Joint Commercialization Team. The JSC will be composed of three (3)
representatives of each Party who shall be appointed (and may be replaced at any
time) by such Party on written notice to the other Party in accordance with this
Agreement. At least two (2) of such representatives from Elan and Biogen,
respectively, shall be a vice-president or more senior officer of such Party and
at least one (1) other of such representatives shall be an individual of
suitable authority and seniority who has significant experience or expertise in
biopharmaceutical drug research, development, commercialization or marketing.
Any member of the JSC may designate a substitute of equal experience and
seniority to attend and perform the functions of that member at any meeting of
the JSC.

                                       18
<PAGE>

The JSC will meet at least four times each year during the Term of this
Agreement, or at any other frequency agreed by the JSC.

               (b) Joint Steering Committee Responsibilities. In addition to its
general responsibilities to oversee and coordinate the Development of Licensed
Products according to the Development Plan and each Annual Workplan/Budget, to
oversee and coordinate the Commercialization of Licensed Products in the
Territory according to the Commercialization Plan and each Annual
Commercialization Plan/Budget and to ensure a regular flow of information
between the Parties, the JSC shall, subject to the terms of this Agreement:

         (I) direct the overall strategy, timing, goals and direction of the
     Development activities specified hereunder and provide direction to the
     Joint Project Team as provided herein;

         (II) review and approve global regulatory and clinical strategies;

         (III) approve the Development Plan and each Annual Workplan/Budget,
     including the division of responsibilities of each Party, and the annual
     budgets and multiyear expense forecasts formulated by the Joint Project
     Team and any material modifications or material amendments to or
     substantial departures from any of the foregoing;

         (IV) review and approve activities related to manufacturing and/or the
     supply of Clinical Supplies or Commercial Supplies, other than activities
     related specifically to Biogen's day-to-day manufacturing operations or to
     Biogen's facilities;

         (V) determine whether completion of a certain activity has, or has not,
     met the criteria for payment of milestones hereunder;

         (VI) determine whether or not the Parties should undertake to Develop a
     Licensed Product other than Antegren and whether or not the Parties should
     proceed with or continue Development in a particular indication, subject to
     Section 4.7;

         (VII) serve as the first forum for attempted settlement of disputes or
     disagreements that are unresolved by the Joint Project Team or Joint
     Commercialization Team and any subteams or subcommittees of such committee
     or of the JSC, unless otherwise indicated in this Agreement;

         (VIII) subject to Article 5, approve a Commercialization Plan and each
     Annual Commercialization Plan/Budget, including but not limited to the
     allocation of responsibilities between the Parties, or as applicable, one
     or more Third Parties, in each country covered thereunder, annual marketing
     and sales budgets, the price range, managed care contract strategies, and
     Phase IV clinical support (including scope and strategic direction) as well
     as any material

                                       19
<PAGE>

     modifications or material amendments to or any substantial departures from
     any of the foregoing;

         (IX) review estimates of sales and expenses on a country by country and
     Licensed Product by Licensed Product basis;

         (X) review and approve the determinations of the Joint Project Team
     with respect to the calculations of the presence or absence of a
     Commercially Significant Indication;

         (XI) review and approve patent strategy and, to the extent applicable,
     litigation strategy; and

         (XII) perform such other functions as are allocated to it under the
     other provisions of this Agreement or as appropriate to further the
     purposes of this Agreement as determined by the Parties.

               (c) Joint Steering Committee Chairpersons; Procedures; Decisions.
The JSC shall have a single Chairperson with customary duties and a Secretary
who is not a member of the JSC. The Secretary shall send notices and the agendas
for all regular JSC meetings. Elan shall designate the initial Chairperson and
Biogen shall designate the initial Secretary. The following year, Biogen shall
designate the Chairperson and Elan shall designate the Secretary, and thereafter
the Parties shall alternate with one Party designating the Chairperson for a
year and the other Party appointing the Secretary for that year. With respect to
the approval or ratification of the decisions or recommendations of the Joint
Project Team or the JCT or approval of the Development Plan, the
Commercialization Plan, each Annual Workplan/Budget and each Annual
Commercialization Plan/Budget or any amendments or modifications thereto, unless
at least one representative of the JSC requests that the matter be placed to a
vote, all such decisions or recommendations presented to the JSC shall be
considered approved or ratified as presented if no objection is made by any
member of the JSC at that time, provided that it is clear to the members of the
JSC that the action being sought from the JSC is approval or ratification. The
location of regularly scheduled JSC meetings shall alternate between the offices
of the Parties (which in the case of Elan shall mean its offices in South San
Francisco), unless otherwise agreed. Meetings may be held telephonically and
shall be effective only if at least one (1) representative of each Party is in
attendance or participating in the meeting. Decisions of the JSC shall be made
by unanimous vote. The senior most attending or participating representative of
each Party on the JSC shall have the right to vote on behalf of any members of
the JSC from such Party not attending or participating in the meeting. The
Secretary shall attend all meetings and record in the minutes in sufficient
detail the discussion and decisions of the JSC. Such minutes shall be circulated
to the Parties promptly following the meeting for review, comment and
distribution.

               (d) Authority. The Parties agree that, in voting on matters as
described in this Article 3, it shall be conclusively presumed that each voting
member of the JSC has the authority and approval of such member's respective
senior management

                                       20
<PAGE>

in casting his or her vote and that decisions of the JSC made in accordance with
this Article 3 shall be binding upon each of the Parties; provided, however,
that the JSC shall not have the authority to amend or modify this Agreement.

               (e) JSC Reports. Before each meeting of the JSC, either the
Parties, the JPT or the JCT, or any subcommittee, as applicable, will provide
the members of the JSC with written copies of all materials they intend to
present at the JSC meeting. The JSC may also request at any time specific data
or information related to Development or Commercialization activities or that a
written report be prepared in advance of any meeting summarizing certain
material data and information arising out of the conduct of the Development or
Commercial activities and the Party or appropriate committee or team to whom
such request is made shall promptly provide to the other Party or JSC such
report, data or information.

               (f) Appointment of Subteams or Subcommittees. The JSC shall be
empowered to create such subteams or subcommittees of itself as it may deem
appropriate or necessary. Each such subteam or subcommittee shall report to the
JSC, who shall have authority to approve or reject recommendations or actions
proposed thereby subject to the terms of this Agreement.

               (g) Dispute Resolution. Issues coming before the JSC that require
action, approval or resolution and for which the JSC is unable to reach
agreement on a mutually acceptable action, approval or resolution shall be
resolved by the Parties under the terms of Article 16 below.

     3.2 Joint Project Team.

               (a) Establishment of Joint Project Team. Within thirty (30) days
of the Effective Date, the Parties will establish a single Joint Project Team to
coordinate and implement all activities with respect to the Development of
Licensed Products in the Field and in the Territory, including, without
limitation, the Development of Antegren, within the budgets approved under each
associated Annual Workplan/Budget, including pre-clinical research, clinical
research, manufacturing, the strategy for and content of Drug Approval
Applications, and post-approval studies. The Joint Project Team shall consist of
such number of representatives of each Party as are reasonably necessary to
accomplish the goals of the Joint Project Team hereunder. Where possible, the
Joint Project Team shall be composed of an equal number of representatives from
each Party. Such representatives will include individuals with expertise and
responsibilities in the areas of activity testing, toxicology, preclinical
development, clinical development, process sciences, manufacturing, regulatory
affairs, drug safety, product development, quality, marketing and intellectual
property, as appropriate to the stage of Development of Antegren or, as
applicable, other Licensed Products. One such representative from each Party
shall be designated as that Party's "Project Team Leader" to act as the primary
Joint Project Team contact for that Party. Together, the Project Team Leaders
will be jointly responsible for managing the Joint Project Team. Each Project
Team Leader will be responsible for ensuring that his/her Party's Joint Project
Team members carry out the activities assigned them under the Development Plan
and each Annual Workplan/Budget.

                                       21
<PAGE>

Either Party may replace any or all of its representatives at any time upon
written notice to the other Party. Any member of the Joint Project Team may
designate a substitute to attend and perform the functions of that member at any
meeting of the Joint Project Team. The Joint Project Team shall be empowered to
create such subteams or subcommittees as it may deem appropriate or necessary.
Each such subteam or subcommittee, including the Joint Patent Committee, subject
to Section 3.4, shall report to the Joint Project Team, which shall have
authority to approve or reject recommendations or actions proposed thereby,
subject to the terms of this Agreement. The Joint Project Team will meet,
telephonically or otherwise, at least once each month, or more frequently, as
agreed by the Joint Project Team.

               (b) Joint Project Team Responsibilities. The Joint Project Team
shall be responsible, with the oversight and approval of the JSC, for
formulating and executing the specific details of the Parties' Development
collaboration, including, without limitation, preparing for and executing the
Development activities contemplated hereunder. The Joint Project Team shall
prepare the Development Plan and each associated Annual Work Plan/Budget in
accordance with Section 4.2. Except as set forth in Section 4.7, the Joint
Project Team shall also have the responsibility of selecting the criteria for
Development of Antegren or, as applicable, other Licensed Product; making
decisions regarding the design and implementation of all research programs;
selecting and designing clinical trials for all proposed indications; developing
a publication and scientific symposia strategy and a calendar of key scientific
and clinical meetings; conducting market research and development activities
prior to formation of Joint Commercialization Team; devising the content of and
filing strategy for all Clinical Trial Applications and Drug Approval
Applications; through the representatives on the Joint Project Team with
regulatory expertise, coordinating interactions with Regulatory Authorities and,
along with the Joint Commercialization Team, developing and implementing
standard operating procedures for adverse event reporting and compliance with
other regulatory requirements in the Territory, consistent with Article 13;
through the Joint Patent Committee, coordinating patent and trademark-related
activities, subject to Section 3.4; and implementing other activities necessary
to the successful completion of the collaboration and for exchanging information
and facilitating cooperation and coordination between the Parties as they
exercise their respective rights and meet their respective obligations under
this Agreement. In addition to such other reports as required by the JSC, the
Joint Project Team shall submit to the JSC its written determinations of all
Commercially Significant Indications for Antegren or, as applicable, other
Licensed Product, as such determinations are made, and a determination of its
recommendations as to the priority among such indications and the priority among
the countries within the Territory in which the Joint Project Team expects to
seek Regulatory Approval of Antegren, or, as required, other Licensed Product.
The Joint Project Team will be responsible for all other activities assigned to
it by the JSC.

               (c) Joint Project Team Decision-making. Decisions of the Joint
Project Team shall be made by unanimous vote of the Project Team Leaders. If the
Joint Project Team is unable to resolve a dispute regarding any issue, such
dispute shall be resolved in accordance with Article 16.

                                       22
<PAGE>

               (d) Ceasing of Joint Project Team Operations. The Joint Project
Team will cease operations and have no further function hereunder on the date on
which the Parties are no longer engaging in Development of any Licensed
Product(s) in the Territory.

               (e) Annual Production Requirements. The Joint Project Team shall
be responsible for submitting annual Antegren or, as applicable, other Licensed
Product, production requirement reports as part of each Annual Workplan/Budget.
Such report shall include a non-binding forecast of requirements for Clinical
Supplies and placebo for the Territory for the then current year and the
following two (2) years, and any other related information which the Joint
Project Team determines to include.

               (f) Accounting/Financial Reporting. Each Party will appoint a
representative with expertise in the areas of accounting, cost allocation,
budgeting and financial reporting to the Joint Project Team. Such
representatives shall provide services to and consult with the Joint Project
Team in order to address the financial, budgetary and accounting issues which
arise in connection with the Development Plan, each Annual Workplan/Budget and
the Financial Planning, Accounting and Reporting Procedures attached hereto as
Exhibit B, and updates thereto. Each representative may designate a substitute
to perform such functions, or may be replaced at any time by the represented
Party by providing notice thereof to the other Party.

     3.3 Joint Commercialization Team.

               (a) FORMATION OF THE JCT. At the earlier of either one (1) year
prior to the expected first commercial sale or Antegren or, as applicable, other
Licensed Product or ninety (90) days after the start of any Phase III Clinical
Trial for Antegren or, as applicable, other Licensed Product, a Joint
Commercialization Team, or JCT, will be formed, comprised of an equal number of
representatives of each Party, the total number of which will be between three
(3) and five (5). Each member of the JCT will be an individual with experience
in the commercialization and marketing of pharmaceutical products. The Project
Team Leader of the Joint Project Team for each Party may also be one of the
representatives for such Party on the JCT. One representative from each Party on
the JCT shall be designated as that Party's "Commercialization Team Leader" to
act as the primary JCT contact for that Party. Together, the Commercialization
Team Leaders will be jointly responsible for managing the JCT. Each
Commercialization Team Leader will be responsible for insuring that his/her
Party's JCT members carry out the activities assigned them under the
Commercialization Plan and each Annual Commercialization Plan/Budget. Either
Party may replace any or all of its representatives on the JCT at any time upon
written notice to the other Party. Any member of the JCT may designate a
substitute to attend and perform the functions of that member at any meeting of
the JCT. The JCT will meet, telephonically or otherwise, at least once each
month, or more frequently, as agreed by the JCT.

               (b) Responsibilities of JCT. The JCT shall, during the
Development of Antegren or, as applicable, other Licensed Product, coordinate
with the Joint Project Team those activities deemed necessary for a successful
Commercialization

                                       23
<PAGE>

of Licensed Product in the Territory upon Regulatory Approval. The JCT shall be
responsible for preparing the Commercialization Plan and each Annual
Commercialization Plan/Budget in accordance with Section 5.1, for overseeing and
implementing the activities contemplated thereunder and under Article 5 and for
coordinating with the Joint Project Team in developing and implementing standard
operating procedures for adverse event reporting and compliance with regulatory
requirements in the Territory, consistent with Article 13.

               (c) JCT Decision-making. Decisions of the Joint Commercialization
Team shall be made by unanimous vote of the Commercialization Team Leaders. If
the Joint Commercialization Team is unable to resolve a dispute regarding any
issue, such dispute shall be resolved in accordance with Article 16.

               (d) Annual Production Requirements. The Joint Commercialization
Team shall be responsible for submitting annual Antegren or, as applicable,
other Licensed Product, commercial production requirement reports as part of
each Annual Commercialization Plan/Budget. Such report shall include a
non-binding forecast of requirements for Commercial Supplies for the Territory
for the then current year and the following two (2) years, and any other related
information which the JCT determines to include.

               (e) Accounting/Financial Reporting. Each Party will appoint a
representative with expertise in the areas of accounting, cost allocation,
budgeting and financial reporting to the Joint Commercialization Team. Such
representatives shall provide services to and consult with the Joint
Commercialization Team in order to address the financial, budgetary and
accounting issues which arise in connection with the Commercialization Plan,
each Annual Commercialization Plan/Budget and the Financial Planning, Accounting
and Reporting Procedures attached hereto as Exhibit B, and updates thereto. Each
representative may designate a substitute to perform such functions, or may be
replaced at any time by the represented Party by providing notice thereof to the
other Party.

     3.4 Joint Patent Committee. Within thirty (30) days after the Effective
Date, Biogen and Elan shall establish a "Joint Patent Committee" or "JPC", as a
subcommittee of the Joint Project Team, to oversee and direct the continued
prosecution of Elan Patents and Biogen Patents and the preparation and filing of
Collaboration Invention Patent Rights, subject to the terms of Article 11. The
JPC shall be comprised of one (1) senior patent attorney from each Party as
appointed by such Party. A Party may replace its representative from time to
time upon written notice to the other Party. The JPC shall exist until the
termination of this Agreement, provided that at such time as the Joint Project
Team no longer exists, the JPC shall become a subcommittee of the Joint
Commercialization Team. All decisions of the JPC shall be unanimous, and in the
event that a decision cannot be reached by the JPC, the matter shall be referred
to the Joint Project Team. In the event that the Joint Project Team is unable to
reach a decision with respect to any such matter, then such matter shall be
resolved in accordance with Article 16.

                                       24
<PAGE>

     3.5 Meetings of Chief Executive Officers. The Chief Executive Officers
(CEOs) of Biogen and Elan Corporation, plc, or their designated direct-reporting
representative, shall meet two (2) times per year during the term of this
Agreement, unless otherwise agreed upon in writing by the Parties. In such
meetings, the CEOs shall review the progress of the collaboration and shall
discuss any current issues of the collaboration with the intent of proposing
resolutions for such issues. Meetings, including without limitaiton, special
meetings called pursuant to Section 16.1 shall alternate between the offices of
the Parties, unless otherwise agreed by the CEOs or their respective
representatives, or may be held telephonically or by videoconference.

                                   ARTICLE 4.
                                   DEVELOPMENT

     4.1 Development Efforts. Through the Joint Project Team, Elan and Biogen
each agree to collaborate exclusively and diligently with each other in the
Development of Antegren or, as applicable, other Licensed Products in the Field
and to use Commercially Reasonable and Diligent Efforts to Develop and bring
Antegren or, as applicable, other Licensed Product, to market in the Field in
Commercially Significant Indications as deemed appropriate by the Joint Project
Team. The Parties agree to cooperate with each other in carrying out the
Development Plan and each Annual Workplan/Budget. Development activities will,
to the extent practicable, utilize the then-prevailing development
infrastructure and expertise of each Party in a given activity or with respect
to a specific Commercially Significant Indication. All activities to be
undertaken in the performance of the Development Plan and each Annual
Workplan/Budget shall be carried out by employees of the Parties and/or their
respective Affiliates, provided, however, that if either Party is able to
reasonably demonstrate, and the Joint Project Team agrees, that it would be in
the best interests of both Parties for the responsible Party to contract with
one (1) or more Third Parties to perform certain tasks under the Development
Plan, then, the Party responsible for such task may enter into a contract with a
Third Party to perform such task, which such Third Party and contract shall be
subject to the prior written approval of the Joint Project Team. In determining
whether to utilize the services of any Third Party in conducting activities
under the Development Plan, the Parties shall consider, inter alia, what would
be the most efficient and cost-effective means for accomplishing the proposed
activity, any relevant intellectual property issues that may impede a Third
Party's ability to perform the proposed activity or that may warrant limiting
the performance of the proposed activity to one of the Parties, and other
relevant factors. The responsibility for performing clinical studies will be
assigned to Biogen, Elan and/or approved Third Party contractors selected by the
Joint Project Team in accordance with this Section 4.1.

     4.2 Development Plan and Responsibilities

               (a) Initial Development Plan. The Parties have attached as part
of Exhibit C hereto an initial Development Plan, the goals of which are: (i) the
Development (including further clinical testing) of Antegren as required to
obtain Regulatory Approval for one or more Commercially Significant Indications
in each Major Market Country (other than Japan which shall be addressed in
subsequent updates)

                                       25
<PAGE>

as promptly as commercially and technically practicable, or as otherwise deemed
appropriate by the Joint Project Team; (ii) the acquisition of Regulatory
Approval for Antegren in a manner sufficient to allow the commercial promotion,
marketing and sale of Antegren in those countries of the Territory where it
makes commercial sense to do so given the size of the potential market and other
relevant factors; (iii) the identification, selection and Development of
additional Licensed Products if appropriate and (iv) the formation and transfer
to Biogen of the information and capabilities necessary to manufacture and
supply Clinical Supplies and Commercial Supplies of Antegren, or, as applicable,
other Licensed Product, for such Development and Commercialization, including,
but not limited to, the initial transfer of manufacturing Know-how by Elan and
Lonza to Biogen in accordance with Section 7.1 and the timeline for such
transfer set forth in the Development Plan.

               (b) Initial Annual Workplan/Budget. The Joint Project Team shall,
within sixty (60) days of the execution date, prepare a draft of an Annual
Workplan/Budget for 2000, specifying in detail the Development activities to be
performed during the year, designation of which Party is responsible for each
task, staffing levels (which levels shall be reasonably necessary for the
attainment of the Development goals, as applicable), any approved use of Third
Party contractors required to carry out such activities, a budget setting forth
the estimated expenditures required to carry out such activities and a timeline
for completion of such activities. Should the Joint Project Team determine that
a specific activity would be best undertaken by a Third Party contractor, the
Joint Project Team shall indicate which Party shall manage such Third Party
contractor. The final Annual Workplan/Budget for 2000 shall be approved by the
JSC by the end of August 2000.

               (c) Yearly Updates and Subsequent Annual Workplans/Budget. The
Joint Project Team shall, on an annual basis, update the Development Plan to
reflect any changes necessary given the progress and the results of the
Development work as of such date or any change in strategy, timelines, or long
range plans going forward. In addition, prior to the start of each year, the
Joint Project Team shall prepare an Annual Workplan/Budget which shall specify
in detail the Development activities to be performed during such year,
designation of which Party is responsible for each task, staffing levels (which
levels shall be reasonably necessary for the attainment of the Development
goals, as applicable), any approved use of Third Party contractors required to
carry out such activities, a budget setting forth the estimated expenditures
required to carry out such activities, a timeline for completion of such
activities and annual production requirements, as specified in Section 3.2(e).
Should the Joint Project Team determine that a specific activity would best be
undertaken by a Third Party contractor, the Joint Project Team shall indicate
which Party shall manage such Third Party contractor. Each update to the
Development Plan and adoption of each Annual Workplan/Budget under this
paragraph and any modifications and updates under paragraph (d) below shall
automatically be deemed to constitute an amendment to Exhibit C upon JSC
approval and ratification of the meeting minutes related thereto, and shall not
constitute an obligation of either Party until such approval and ratification.
The schedule for yearly updates to the Development Plan and the drafting and
approval of each Annual Workplan/Budget commencing with the Year 2001, is as
follows:

                                       26
<PAGE>

<TABLE>
<CAPTION>
                              EVENT                                  TIMING
                              -----                                  ------
<S>                                                                <C>
     Yearly Development Plan update by the Joint Project Team        May 15

     Draft of Annual Workplan/Budget for each year together          September 15 of prior year
           with any necessary updates to the Development
           Plan prepared by Joint Project Team

     Approval of Development Plan update and Annual                  Meeting of JSC next following date when
           Workplan/Budget by JSC                                    the plans are available
</TABLE>

               (d) Interim and Annual Workplan/Budget Modifications and Updates.
The Joint Project Team shall review each Annual Workplan/Budget on a quarterly
basis during the course of each year to review actual activities and
expenditures compared to plan and to determine if any changes are necessary
given the progress and the results of the Development work as of such date.
Other interim modifications to each Annual Workplan/Budget during the course of
the year may also be adopted by the Joint Project Team, as necessary, but shall
be subject to the approval of the JSC if material. All changes to any Annual
Workplan/Budget shall be subject to review and approval of the JSC where such
modifications exceed the authority delegated to the Joint Project Team by the
JSC or under this Agreement.

               (e) Responsibilities. Consistent with its responsibilities under
this Agreement, the Development Plan and each Annual Workplan/Budget, each Party
agrees to use Commercially Reasonable and Diligent Efforts to:

         (I) transfer to the other Party all Know-how in such Party's possession
     that the Joint Project Team deems useful for the Development of Antegren
     or, as applicable, other Licensed Products, including but not limited to
     preclinical data, assays and associated materials, protocols and
     procedures, provided that, notwithstanding anything in this Agreement to
     the contrary, the initial transfer of Know-how from Elan to Biogen shall
     include, but shall not be limited to, all manufacturing Know-how, as
     specified in Section 7.1, reasonable quantities of Antegren for research,
     Development and manufacturing scale-up work, all existing preclinical data,
     regulatory filings, and all existing clinical trial protocols and data, to
     the extent such Know-how is not already in Biogen's possession;

         (II) in accordance with the Development Plan and any associated Annual
     Workplan/Budget, conduct or, as applicable, assist the other Party to
     conduct, all relevant studies, including human clinical studies for
     Antegren or, as applicable, other Licensed Products; and

         (III) in accordance with the Development Plan and any associated Annual
     Workplan/Budget and Section 4.4, make or, as applicable, assist the other
     Party in making, all filings with and supporting all communications with
     the

                                       27
<PAGE>

     relevant regulatory agencies or other governmental entities necessary to
     conduct such studies or to seek Regulatory Approvals for Antegren, or as
     required, other Licensed Products.

     4.3 Clinical Trials. The Parties will conduct clinical trials for Licensed
Products in accordance with the Development Plan and each Annual
Workplan/Budget. Except to the extent otherwise required by relevant regulatory
agencies or other governmental entities, there shall be one Clinical Trial
Application in each country for all clinical trials for each distinct Licensed
Product. All clinical data and reports related to clinical trials for Licensed
Products shall be jointly owned by the Parties, and each Party shall have full
use, for any purpose consistent with this Agreement, of all such data and
reports related to clinical trials for Licensed Products. All data, database
information and reports from such clinical trials for Licensed Products shall be
centralized and held at a location to be chosen by the Joint Project Team, with
a duplicate set available to each Party for deposit at a site of its own
selection.

     4.4 Clinical Trial Applications, Drug Approval Applications, Package Labels
and Inserts.

               (a) The Joint Project Team shall determine which Party shall be
responsible for filing all Clinical Trial Applications. Notwithstanding the
foregoing, Elan shall continue to hold the existing INDs with respect to
Antegren, provided that, within twelve (12) months after the Effective Date the
Joint Project Team shall reconsider the assignment of responsibility for the
existing INDs based on the allocation of related clinical responsibilities.
Unless the JSC determines that it would be more efficient for one Party to file
and hold Drug Approval Applications and Regulatory Approvals worldwide, Elan
shall, with the oversight of the Joint Project Team, be responsible for filing
Drug Approval Applications and seeking Regulatory Approvals for Licensed
Products worldwide except in North America and Japan, and Biogen shall, with the
oversight of the Joint Project Team, be responsible for filing Drug Approval
Applications and seeking Regulatory Approvals in North America. The JSC shall
allocate responsibility for filing and holding Drug Approval Applications and
Regulatory Approvals for Licensed Product in Japan, provided that such filing
shall be subject to the oversight of the Joint Project Team. Notwithstanding the
foregoing, in the event that the Joint Project Team determines to cease
development of Licensed Product in IBD but continues development in MS, Elan
shall assume responsibility for filing Drug Approval Applications and seeking
Regulatory Approvals for Licensed Product worldwide, subject to the oversight of
the Joint Project Team. The Party responsible for filing a Clinical Trial
Application or Drug Approval Application in a given jurisdiction (the "Filing
Party") shall also comply with all regulatory obligations in such jurisdiction
arising from any of the foregoing, subject to the terms of this Agreement. The
Filing Party shall use Commercially Reasonable and Diligent Efforts in
performing the activities contemplated under this Agreement, and shall perform
such activities with the oversight of the Joint Project Team and in accordance
with the Development Plan and each Annual Workplan/Budget. Prior to submitting
any Clinical Trial Application or Drug Approval Application, the Parties,
through the Joint Project Team, shall consult and cooperate in preparing such
filings, their content and scope. Each Party shall have the right to review

                                       28
<PAGE>

and comment on all Clinical Trial Applications and Drug Approval Applications in
accordance with specific timelines or other arrangements agreed upon by the
Joint Project Team, and no such filing shall be made unless the Joint Project
Team has approved the form and content of the filing. Unless otherwise required
by relevant Regulatory Authorities, all regulatory documents shall be
centralized and held at a location to be chosen by the Joint Project Team, with
a duplicate set provided to each Party for deposit at a site of its own
selection. Unless otherwise specified by the Joint Project Team and subject to
the terms of this Agreement, the Filing Party shall own all regulatory
submissions, including all Clinical Trial Applications, Drug Approval
Applications and associated government licenses, approvals, and certificates for
Licensed Products in the Territory. Notwithstanding the foregoing, in any
jurisdiction, including the EU, in which, based on the written opinion of an
attorney of the Parties' mutual selection who is expert in the applicable laws
or regulations of the jurisdiction at issue or based on consultation with the
applicable Regulatory Authority, the Parties determine that formation of a joint
venture entity or entities to hold the applicable Drug Approval Applications or
other governmental licenses, approvals or certificates for Licensed Products is
the sole means by which the names of both Parties may appear on the label of a
Licensed Product and/or the applicable Licensed Product Promotional Materials,
the Parties, upon the written request of either Party, shall form and transfer
ownership of the applicable Drug Approval Applications or other governmental
licenses, approvals or certificates for Licensed Products to such joint venture
entity or entities. Prior to any transfer under this Section 4.4(a), the Parties
shall negotiate in good faith as to the necessity of the formation of such an
entity or entities and shall consider in preference thereto all commercially
reasonable alternatives. Each and every entity formed pursuant to this Section
4.4(a) shall be constituted in a form mutually acceptable to both Parties, shall
be jointly owned and controlled by the Parties and shall undertake no business
other than holding the applicable Drug Approval Applications or other
governmental licenses, approvals, or certificates for Licensed Products. The
Parties agree to take all commercially reasonably steps required to eliminate or
minimize the tax effects on either Party arising out of the formation of any
entity or entities pursuant to this Section 4.4(a).

               (b) The Filing Party shall not transfer title or otherwise
attempt in any manner to dispose of any Clinical Trial Applications or Drug
Approval Applications or other government licenses, approvals or certificates
for Licensed Products in the Territory, or otherwise impair the other Party's
rights in such filings, or other government licenses, approvals or certificates.

               (c) The Filing Party shall provide the other Party with a copy of
any material documents or reports to be filed with the FDA or any other
Regulatory Authority under this Agreement. The Joint Project Team shall approve
all such material documents or reports prior to filing. Other communications and
interactions of either Party with Regulatory Authorities related to Licensed
Product shall be subject to the terms of Section 4.5.

               (d) The Parties will include on all package labels and inserts
for Licensed Products sold in the Territory the names and logos of both Elan and
Biogen with equal prominence, to the extent permitted by the applicable
Regulatory Authorities.

                                       29
<PAGE>

To the extent the names and logos of both Elan and Biogen cannot, without
violating applicable law, be included with equal prominence on package labels
and inserts in a particular country under the current terms of this Agreement,
the Parties shall discuss in good faith possible modifications to the terms of
this Agreement that would allow the inclusion of both logos in compliance with
applicable law.

               (e) The content and language of the proposed package insert, and
all changes thereto, including without limitation, all safety-related package
insert changes for Licensed Product shall be agreed upon by the Joint Project
Team prior to submission to the applicable Regulatory Authority.

     4.5 Regulatory Meetings and Communications.

               (a) For each country in the Territory, unless the Joint Project
Team otherwise specifies, the Parties shall be jointly responsible for
conducting meetings and discussions related to Licensed Products with the
Regulatory Authorities in each country of the Territory. Each Party shall be
given the opportunity to have one or more of its representatives participate in
all substantive discussions and meetings with Regulatory Authorities which
relate to Licensed Products, including, but not limited to, with respect to any
Drug Approval Applications.

               (b) The Joint Project Team, through its members with regulatory
and drug safety expertise, shall develop processes and procedures for the
conduct and reporting to the Parties of telephone communications and written
correspondence with Regulatory Authorities in the Territory related to Licensed
Product. To the extent either Party receives material written or oral
communication from the FDA or any other Regulatory Authority relating to
Licensed Products, the Party receiving such communication shall notify the other
Party and provide a copy of any written communication to the other Party as soon
as reasonably practicable.

               (c) Within sixty (60) days after the Effective Date, the Parties'
respective regulatory affairs or other applicable departments, including the
members of the Joint Project Team with regulatory and drug safety expertise,
shall meet and agree upon processes and procedures to recommend to the Joint
Project Team for sharing information needed to support each Party's respective
regulatory responsibilities, including without limitation, development of
appropriate safety databases relating to Antegren, or, as applicable, other
Licensed Products. The processes and procedures adopted by the Joint Project
Team under this Section for sharing of information and adverse event reporting
shall be consistent with Article 13.

               (d) The Parties shall cooperate in good faith with respect to the
conduct of any inspections by any Regulatory Authority of a Party's site and
facilities related to Licensed Products, and each Party shall at a minimum be
given the opportunity to attend the summary, or wrap up, meeting related to
Licensed Products with such Regulatory Authority at the conclusion of such site
inspection. Each Party shall consider the attendance of the other Party at any
such regulatory inspections, but shall not be obligated to accept the other
Party's attendance at such inspections if such attendance

                                       30
<PAGE>

would result in the disclosure to the other Party of confidential information or
trade secrets unrelated to the Licensed Products.

     4.6 Development Costs.

               (a) Payment of Development Costs. All Development Costs, except
those otherwise specifically excluded under this Section 4.6 and in Section 4.7
of this Agreement, for activities conducted under this Agreement, including
without limitation all Development Costs related to physical product development
and manufacturing, preclinical studies and clinical studies, shall be shared
between Biogen and Elan as provided below and in accordance with the Financial
Planning, Accounting and Reporting Procedures attached hereto as Exhibit B, so
that Biogen bears *** of such costs and Elan bears *** of such costs, provided
that such costs were part of an Annual Workplan/Budget or were otherwise
approved by the JSC. There shall be a Reconciliation Statement, prepared by the
finance representatives of the Parties on the Joint Project Team as set forth in
Exhibit B, of such costs which are to be shared and which are incurred during a
reporting period by each Party, in accordance with Section A.2.2 of Exhibit B,
with a payment by one Party to the other, within thirty (30) days of receipt of
the Reconciliation Statement, to the extent necessary so that each Party bears
its appropriate percentage of such shared Development Costs.

               (b) Development Cost Accounts. Subject to the limitations set
forth in this Section 4.6 and in Section 4.7, each Party shall charge all
Development Costs so incurred by it or its Affiliates on its books and records
to enable the tracking of expenses incurred in connection with the Development
Plan and each Annual Workplan/Budget (each, a "Development Cost Project
Account"). Within fourteen (14) business days after the end of each Calendar
Quarter, each Party shall submit to the other Party a written summary of all
expenses charged to its Development Cost Project Account during such Calendar
Quarter, which summary shall be accompanied by reasonable supporting
documentation for such expenses.

               (c) Initial Period Costs. Notwithstanding anything in this
Agreement to the contrary, during the period commencing on March 1, 2000 and
ending on December 31, 2000 (the "Initial Period"), the Development Costs to be
shared by the Parties under Section 4.6 (a) shall include solely ***
APPROXIMATELY 7 LINES OMITTED ***, as set forth in the Annual Workplan/Budget
for 2000 (collectively "Included Initial Period Costs"). All other Development
Costs incurred during the Initial Period shall be borne by the Party incurring
such costs and shall be excluded from the Development Costs to be shared by the
Parties under Section 4.6(a). The Parties further agree that the Development
Costs charged by Elan to its Development Cost Project Account for out-of-pocket
costs related to goods and services provided or activities performed by Third
Parties for the period from March 1, 2000 until the date of this Agreement shall
not exceed the amounts set forth in Schedule 4.6(c).

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

                                       31
<PAGE>

               (d) Expense Limitations. The expenses charged by either Party to
its Development Cost Project Account in accordance with this Agreement for any
year shall not be in an amount in excess of *** of the amount included for the
total expenditures in the then current Development Plan and Annual
Workplan/Budget, as appropriate, unless the Joint Project Team recommends and
the JSC approves such excess expenses. If actual costs of implementing an Annual
Work Plan/Budget or the Development Plan are expected to vary by more than ten
percent (10%) from the amounts budgeted for expenditure during the relevant
period, the Joint Project Team will revise, as applicable, the Annual
Workplan/Budget or Development Plan and submit it in writing, with an
explanation of the variance and the reasons therefore, for approval to the JSC.
If the JSC does not approve the variance, the amount by which the actual costs
exceed *** of the budgeted costs shall be borne by the Party that incurred the
costs.

               (e) Third Party License Fees. Until such date as Antegren, or as
applicable, other Licensed Product, is Commercialized in the Territory the
Parties *** of any Third Party License Fees relating thereto. The Party paying
any Third Party License Fee shall invoice the other Party for its share of such
Third Party License Fee within sixty (60) days after the date of payment. The
Party receiving such invoice shall reimburse the other Party for its share of
such Third Party License Fees within forty-five (45) days after receiving the
invoice therefor. After the date when Antegren, or as applicable, other Licensed
Product, is Commercialized in the Territory, Third Party License Fees shall be
treated as "Other Out of Pocket Costs" under Exhibit B.

               (f) Records and Audits. During the term of this Agreement, each
Party shall keep and maintain accurate and complete records showing the expenses
incurred by it in performing its activities under the Development Plan and each
Annual Workplan/Budget during the three (3) preceding calendar years, which
books and records shall be in sufficient detail such that Development Costs can
accurately be determined. Each Party shall have audit rights with respect to
such records of the other Party as set forth in paragraph A.6 of Exhibit B.

     4.7 Development Opt-Out.

               (a) Every Commercially Significant Indication shall be considered
as a potential indication for the Development of Licensed Products by the Joint
Project Team. In the event a Party desires to pursue a Commercially Significant
Indication, other than MS or IBD, for Development, the other Party may, by
providing a written notice to the Party desiring to proceed, cause any
Development Costs associated solely and exclusively with such Commercially
Significant Indication (an "Excluded Indication") to be exempted from the
provisions of Section 4.6 of this Agreement. For any Excluded Indication, the
Party desiring to proceed may continue, at its own cost and within its sole
control, to Develop such Excluded Indication. The Party proceeding with
Development in an Excluded Indication shall keep the Joint Project Team
reasonably informed of the plan for Development, the progress of Development
activities and the

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

                                       32
<PAGE>

results obtained from Development activities in the Excluded Indication. In
addition, notwithstanding anything in this Agreement to the contrary, the Party
proceeding with Development in an Excluded Indication shall consult with the
Joint Project Team and consider in good faith the input of the Joint Project
Team with respect to any decision or action related to Development of Licensed
Product in the Excluded Indication to the extent such decision or action may
have an impact on the Parties' ability to proceed with Development of Licensed
Product in another indication or on the Parties' ability to obtain Regulatory
Approval for Licensed Product in another indication or which may result in
material safety concerns or other issues being raised that might materially
adverse affect the value of Licensed Product in other indications.

               (b) The Party desiring to proceed in an Excluded Indication shall
be responsible for preparing the Drug Approval Application for such Excluded
Indication, provided that the filing shall be subject to the approval of the
Joint Project Team under the terms of Section 4.4, and shall actually be filed
by the Party responsible for regulatory filings under Section 4.4(a).

               (c) For each Excluded Indication Developed by a Party, commencing
upon the date of First Commercial Sale in a Major Market Country with respect to
the Excluded Indication, the other Party shall have its Percentage reduced by
*** from its then current level. Should a Party whose Percentage is subject to
reduction pursuant to this Section 4.7 Develop Licensed Product in a different
Excluded Indication, then, on a matching basis, the reduction shall cease upon
the date of First Commercial Sale in a Major Market Country in such different
Excluded Indication. Additionally, with respect to each Excluded Indication,
should a Party whose Percentage is subject to reduction pay, within *** of the
First Commercial Sale with respect to such Excluded Indication, to the other
Party an amount equal to *** of the total Development Costs related to such
Excluded Indication which but for Section 4.7(a) would have been charged to the
developing Party's Development Cost Account under Section 4.6, the reduction
specified hereunder as a result of such Excluded Indication shall thereafter
become *** . In no event shall the cumulative effect of this Section 4.7 be to
reduce a Party's Percentage by an amount more than *** . Where on Party's
Percentage is reduced pursuant to the operation of this Section 4.7(c), there
shall be a corresponding and equal increase in the other Party's Percentage.

     4.8 Third Party Research Agreements.

               (a) Biogen acknowledges that, as of the Effective Date, Elan has
certain existing material transfer agreements and collaboration agreements
involving use of Licensed Product with academic investigators or governmental
research institutions ("Third Party Research Agreements"). The Third Party
Research Agreements involving transfer of Antegren executed during the last
three (3) years are as listed in Schedule 4.8. Each Party acknowledges that the
other Party is required to fulfill its respective commitments under such Third
Party Research Agreements. Such commitments may

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

                                       33
<PAGE>

include providing investigators with research quantities of Antegren or, as
applicable, other Licensed Product for research purposes. Each Party agrees
that, to the extent required by the applicable Third Party Research Agreement,
the other Party may continue its existing commitments under such Third Party
Research Agreements for up to one year from the Effective Date, or as agreed
upon by the Joint Project Team, so long as no such commitments hinder a Party's
ability to fulfill its responsibilities under the Development Plan or any Annual
Workplan/Budget. Consistent with the responsibilities set forth in this
Agreement, and with the consent of the appropriate Third Party, if required,
each Party agrees promptly to provide the other Party with all data, reports and
information related to the Licensed Product in the Field that such Party
receives under such Third Party Research Agreements. After the Effective Date,
the Parties shall, through the Joint Project Team, agree upon and coordinate
subsequent Third Party material transfer and collaboration agreements with
academic or governmental research institutions related to Development of
Licensed Product or involving the use of Licensed Product, and amendments or
extensions of the existing Third Party Research Agreements in a manner so as to
conserve the available quantities of the Parties' research materials and to
avoid compromise of the Parties' abilities to fulfill their responsibilities
under the Development Plan or any Annual Workplan/Budget and with a view toward
maintaining access to relevant intellectual property rights. Any such subsequent
Third Party agreements shall be in a form of a "Material Transfer Agreement"
and/or a "Collaboration Agreement" to be agreed upon by the Parties.

               (b) In the event that any Third Party Research Agreement, or any
Material Transfer Agreement or Collaboration Agreement entered into after the
Effective Date results in an invention or know-how made, jointly or solely, by a
Third Party that relates to Licensed Products, the Joint Project Team shall
determine whether a license (exclusive or non-exclusive) should be obtained
under the rights of such Third Party to such invention or know-how in accordance
with Section 11.9. If the invention or know-how resulting from the Third Party
Research Agreement or Material Transfer Agreement or Collaboration Agreement has
applicability outside the scope of this Agreement, and both Parties desire to
have access to such invention or know-how for uses outside the scope of this
Agreement, the Parties shall ensure that they each have the opportunity to
separately license the rights to such invention or know-how.

     4.9 Transfer of Materials. During the collaboration hereunder, the Parties
anticipate that each Party will transfer certain of its proprietary materials to
the other Party. Each Party agrees that it will use such materials of the other
Party only for the purposes of the collaboration hereunder, and will not
transfer such materials to any Third Party without the consent of the other
Party except as expressly permitted under this Agreement. Each Party shall have
the right to use proprietary materials made or assembled by either Party during
and in furtherance of the collaboration hereunder, and which are directly
related to Licensed Product solely for the purposes of the collaboration
hereunder, including without limitation, the right to transfer such material to
Third Parties, with consent of the JPT, under the form of Material Transfer
Agreement or Collaboration Agreement agreed upon by the Parties pursuant to
Section 4.8(a) above or as otherwise specifically approved as part of an Annual
Workplan/Budget.

                                       34
<PAGE>

     4.10 COMPLIANCE WITH GLP/GCP AND APPLICABLE LAWS. In performing Development
activities, each Party shall comply with all applicable laws, regulations and
professional standards. In particular, but without limiting the foregoing, all
of the Development activities, including all tasks specified by the Development
Plan and any associated Annual Workplan/Budget, shall be performed in accordance
with GLP or GCP, to the extent applicable. With respect to any facility or site
at which a Party conducts Development pursuant to this Agreement, including,
where commercially reasonable and within the control of the other Party, Third
Party facilities or sites, each Party shall have the right, at its expense, upon
reasonable written notice and during normal business hours, to inspect such site
and facility and any records relating thereto as is reasonably necessary to
verify the other Party's compliance with the terms of this Agreement relating to
GLP and GCP. Such inspection shall be subject to the confidentiality provisions
of this Agreement. Each Party agrees to, to the maximum extent possible, to
include in any agreement with a Third Party relating to such facilities and
sites a clause permitting the other Party to exercise its rights under this
Section 4.10.

                                   ARTICLE 5.
                       COMMERCIALIZATION IN THE TERRITORY

     5.1 Joint Commercialization Efforts.

               (a) EFFORTS. Elan and Biogen each agree to: (a) collaborate
exclusively and diligently in the Commercialization of Antegren or, as
applicable, other Licensed Products in the Field and (b) use Commercially
Reasonable and Diligent Efforts to Commercialize Antegren or, as applicable,
other Licensed Product, promptly and in such a manner as to optimize the
profitability of Licensed Product for both Parties. Except as otherwise set
forth in this Article 5, all activities shall be undertaken by the Parties in
accordance with the Commercialization Plan and Annual Commercialization
Plan/Budget developed under Section 5.1(c) and all sales shall be made under a
single brand name and trademark, using professional sales representatives who
are employees of the Parties.

               (b) APPOINTMENT OF DESIGNATED PARTY. Guided by the principles set
forth in Section 2.1, for each indication, the Joint Commercialization Team
shall appoint a Party as the "Designated Party" under this Agreement to play the
primary role in marketing and sales activities in such indication as described
in Sections 5.3 and 5.4. The formal designation of a Designated Party for an
indication shall occur no later than sixty (60) days after the start of the
Phase III Clinical Trial of Licensed Product in such indication. Notwithstanding
anything in this Agreement to the contrary, the following shall apply with
respect to the appointment of a Designated Party: (i) *** shall be the
Designated Party for IBD, (ii) *** shall be the Designated Party for MS, (iii)
the Party that bears the costs, as incurred, for Development of an Excluded
Indication shall be the Designated Party for such indication and (iv) unless the
JSC determines that it does not make sense to do so, the JCT shall appoint the
Parties as

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

                                       35
<PAGE>

Designated Party for those indications not covered by clauses (i), (ii) or (iii)
above on an alternating basis.

               (c) COMMERCIALIZATION PLAN/ANNUAL COMMERCIALIZATION PLAN/BUDGET.
Within one hundred eighty (180) days after its creation, the JCT shall prepare,
and submit to the JSC for approval, a rolling multiyear (not less than three (3)
years) plan for Commercializing Antegren or, as applicable, any other additional
Licensed Product in the Territory (the "Commercialization Plan").
Notwithstanding anything in this Agreement to the contrary, the Designated Party
for an indication shall be responsible for proposing the sections of the
Commercialization Plan related to such indication, provided that the proposal is
subject to the review and approval of the full JCT and, ultimately, the approval
of the JSC. The Commercialization Plan shall include a comprehensive market
development, marketing, sales, supply and distribution strategy for each
Licensed Product in the Territory. The Commercialization Plan shall be updated
by the JCT by May 15 of each year and submitted for approval by the JSC at its
meeting next following the date on which the updated plan is available. Each
updated Commercialization Plan shall address no less than the three (3) upcoming
years. Not later than sixty (60) days after the filing of the first Drug
Approval Application for a Licensed Product in the Territory, the JCT shall
prepare an annual commercialization plan and budget (the "Annual
Commercialization Plan/Budget"). Notwithstanding anything in this Agreement to
the contrary, the Designated Party for an indication shall be responsible for
proposing the sections of the Annual Commercialization Plan/Budget related to
such indication and all periodic updates thereto, provided that the proposal is
subject to the review and approval of the full JCT and, ultimately, the approval
of the JSC. The first such Annual Commercialization Plan/Budget shall cover the
remainder of the calendar year in which such Licensed Product is anticipated to
be approved plus the first full calendar year thereafter. On or before September
15 of each year thereafter, the JCT shall prepare an Annual Commercialization
Plan/Budget for the upcoming year, together with any necessary updates to the
Commercialization Plan, and shall submit such Annual Commercialization
Plan/Budget and such updates to the JSC for approval at the meeting of the JSC
next following the date when such plan is available. Each Annual
Commercialization Plan/Budget shall be based on the then current
Commercialization Plan and, taking into account the provisions of this Article 5
and the other terms of this Agreement, shall include a comprehensive market
development, marketing, customer support, sales, supply and distribution
strategy, a detailed plan for implementation of such strategy, designation of
which Party is responsible for each activity, including a description of which
audiences and distribution channels each Party shall devote its respective
Promotion efforts towards, the personnel and other resources to be devoted by
each Party to such efforts, the number and positioning of details and the type
and level of other sales force activities to be performed by each Party, as well
as market and sales forecasts and forecasts of related operating expenses for
the Licensed Product in each country of the Territory, annual production
requirements as set forth in Section 3.3(d) and budgets for all projected
Commercialization expenses. The JCT shall divide responsibilities, where
appropriate, with the intent that, in general, Sales Representatives from only
one Party will call on any individual customer. In preparing and updating the
Commercialization Plan and each Annual Commercialization Plan/Budget, the JCT
will take into consideration factors such as market conditions, regulatory
issues and

                                       36
<PAGE>

competition as well as the other provisions of this Article 5 and the other
terms and conditions of this Agreement.

               (d) CONTRACT SALES ORGANIZATION. Notwithstanding the foregoing,
if the Joint Commercialization Team recommends, and the JSC agrees, that it
would be in the best interest of both Parties for one or both of the Parties to
contract with one (1) or more Third Parties who, by agreement, performs selling
activities (a "Contract Sales Organization") to perform all or part of such
Party's sales efforts hereunder, then such Party may enter into a contract with
such Contract Sales Organization to perform such activities, which such Contract
Sales Organization and contract shall be subject to the prior written approval
of the JSC. The Parties may also agree to appoint one or more Third Party
distributors to assist in Commercialization efforts as specified in Section
5.4(c).

     5.2 PRICING. On a periodic basis, as agreed upon by the JCT, both Parties
shall conduct studies relating to the optimal pricing and reimbursement
strategies on a country-by-country, or as applicable, regional basis. Such
studies shall be presented to the JCT and any recommendations by either Party
relating to pricing and reimbursement strategies shall be submitted to the JCT
in order to permit it to prepare the Commercialization Plan and each Annual
Commercialization Plan/Budget. Based on such information and recommendations,
the JCT shall establish a recommended price range, on a country by country
basis, including a pricing and discounting strategy. The price range will
contain an upper and lower price. The Parties may take various considerations
into account in establishing the upper and lower price. In setting the lower end
of the price range, factors to be considered by the Parties will include *** .
In setting the upper end of the price range, factors to be considered by the
Parties will include *** . Notwithstanding anything in this Agreement to the
contrary, *** APPROXIMATELY 5 LINES OMITTED ***, the Parties agree to negotiate
in good faith an alternative arrangement which would provide equivalent economic
benefit to *** . In the event *** becomes the Distributing Party in any country,
the Parties shall discuss in good faith modifications to the terms of this
Agreement *** .

     5.3 Marketing Responsibilities/Marketing Materials.

               (a) Role of Designated Party in Marketing. The Designated Party
in any indication shall have the primary role, with the other Party's
participation, and subject to the approval of the JCT, in (i) preparing annual
marketing plans and overall marketing and promotional platforms and campaigns
for the market for such indication, including allocation for sales and marketing
personnel in such indication between the Parties; (ii) implementing marketing
activities (including those related to product launch) for Antegren or, as
applicable, other Licensed Product, with respect to such indication; (iii) the
design of Licensed Product Promotional Materials; and (iv) proposing patient
assistance programs. The non-Designated Party shall have the right,

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

                                       37
<PAGE>

through the JCT, to provide input to the Designated Party with respect to
marketing and product launch activities for Licensed Product in the designated
indication in the Territory, including, without limitation, input into the
design of Licensed Product Promotional Material in accordance with procedures
established by the JCT which shall include review and approval of such materials
by the applicable review or clearance committees of both the Designated Party
and the non-Designated Party. The role of the Designated Party in sales efforts
is described in Section 5.4.

               (b) Pre-Marketing Expenses. On a country by country basis, before
Regulatory Approval in such country of the Territory, the Pre-Marketing Expenses
incurred by the Parties with respect to such Licensed Product in anticipation of
obtaining Regulatory Approval of such Licensed Product in such country shall be
*** by the Parties, consistent with plans and budgets established in the
Development Plan and associated Annual Workplan/Budget or the Commercialization
Plan or any Annual Commercialization Plan/Budget. As such Pre-Marketing Expenses
are incurred they shall be paid for by the Party incurring such expenses,
subject to reimbursement as set forth in Exhibit B.

               (c) Product Trademarks. Antegren shall be sold in the Territory
under the Antegren Trademark as selected by the JCT with the advice and counsel
of the JPC. As applicable, all other Licensed Products shall be sold in the
Territory under trademarks selected by the JCT and approved by the JSC with the
advice and counsel of the JPC (the "Product Trademarks"). The term "Product
Trademarks" shall also include any servicemarks selected by the JCT for use in
connection with services related to Antegren, or, as applicable, other Licensed
Product. The JCT shall use its best efforts to select a worldwide Product
Trademark for each Licensed Product. In the event of a Third Party challenge of
the Parties right to commercialize Licensed Product under the Antegren Trademark
or selected Product Trademark, the JPC shall consider the grounds for such
challenge and recommend to the JCT a course of action in the affected market
based on an assessment of the legal merits of such Third Party claim. The
foregoing procedure shall also be followed in the event of an objection to the
Antegren Trademark or selected Product Trademark raised by a Regulatory
Authority that is reviewing a Drug Approval Application.

               (d) Party Name on Licensed Product Promotional Materials. With
respect to Licensed Product Promotional Materials, to the extent such Licensed
Product Promotional Materials identify or otherwise make reference to either of
the Parties, Elan and Biogen shall both be presented and described with equal
prominence and emphasis as having joined and participated in the development and
joint commercialization of Antegren or, as applicable, other Licensed Product,
as permitted by the applicable laws and regulations of each country in which
such Licensed Product Promotional Materials are to be presented. The manner in
which the trademarks and business name of the Parties is to be presented on the
Licensed Product Promotional

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

                                       38
<PAGE>

Material shall be subject to prior review and approval of the JCT, with the
advice and counsel of the JPC.

     5.4 Sales Efforts in the Territory.

               (a) Sales Representatives. The sales force of the Designated
Party for an indication shall be primarily responsible for Promoting and
marketing Licensed Product in such indication in the Territory. Notwithstanding
the foregoing, in its proposed Annual Commercialization Plan/Budget for an
indication, the Designated Party shall provide that no less than *** of those
total sales effort resources used in interactions with customers in each of the
U.S. and the EU which are to be furnished directly by the parties shall be
provided by the non-Designated Party to the extent that such Party has the
appropriate resources. The foregoing shall not apply if the JSC, in an
affirmative decision, determines that such allocation would create undue
operational inefficiencies. If the JSC does not make such an affirmative
decision or is deadlocked, the foregoing *** allocation shall apply. The
non-Designated Party shall have the right, through the JCT, to provide input to
the Designated Party with respect to sales efforts for Licensed Product in the
designated indication in the Territory. Where it makes commercial sense to do so
given the size of the potential market or based on other commercial factors,
upon the recommendation of the Designated Party for an indication, the JCT may
decide to allocate sole responsibility for Promotion and marketing activities in
some countries to one Party on a country by country basis. Sales Representatives
of both Parties shall only use Licensed Product Promotional Materials that have
been designed by the applicable Designated Party and approved by the JCT, unless
the JCT otherwise determines. In the event that the Licensed Product has failed
in either IBD or MS, but succeeds in the other indication and at such time
Licensed Product is not being developed for any other Commercially Significant
Indication, the JSC shall consider in good faith a request of the non-Designated
Party, if made eighteen (18) months prior to the anticipated date of launch of
the Licensed Product in the designated indication, to increase its allocation of
the total sales force effort under the preceding sentence from *** to *** . The
JSC shall grant such a request if it makes a specific determination that (i) the
increased participation by the non-Designated Party in the sales force effort in
the applicable indication will add value to the profitability of the Licensed
Product and (ii) that such added value outweighs any additional operational
costs and/or complexity arising out of such additional participation. If the JSC
does not make an affirmative decision to permit the non-Designated Party to
increase its sales force effort as provided for in the preceding two sentences
or is deadlocked, the *** allocation shall continue to apply, notwithstanding
anything in this Agreement to the contrary.

               (b) Sales Representative Training. Each Party Promoting Antegren
or, as applicable, other Licensed Product, in any country in the Territory shall
supervise and maintain such competent and qualified Sales Representatives as may
be required to fulfill its Promotion responsibilities under the Annual
Commercialization

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

                                       39
<PAGE>

Plan/Budget. With respect to each country in the Territory, the Sales
Representatives of the Parties shall be jointly trained by the Parties, as
agreed upon by the JCT and approved by the JSC. Each Party shall periodically
provide additional training, in accordance with the training requirements and
training programs and using training materials approved by the JCT, to each of
its Sales Representatives engaging in Promotion activities hereunder.

               (c) Use of Third Party Distributors. The JCT shall determine in
which countries, if any, the Parties shall appoint Third Party distributors. The
Distributing Party shall be responsible for entering into the agreement with the
Third Party distributor, provided that the distributor and the form of the
distribution agreement must be approved in advance by the JSC.

               (d) Sales Forecasts. The Designated Party for an indication shall
be responsible for preparing monthly 24-month rolling sales forecasts and
manufacturing resource plans for such indication.

               (e) Co-Promotion Compliance Responsibilities. Each Party
Promoting a Licensed Product in the U.S. shall in all material respects conform
its practices and procedures relating to such Promotion to the FD&C Act, the PHS
Act, the Pharmaceutical Research and Manufacturers of America ("PhRMA") Code of
Pharmaceutical Marketing Practices (the "PhRMA Code") and the American Medical
Association ("AMA") Guidelines on Gifts to Physicians from Industry (the "AMA
Guidelines"), as the same may be amended from time to time, and promptly notify
the other Party of and provide the other Party with a copy of any material
correspondence or other reports with respect to the Promotion of a Licensed
Product submitted to or received from the FDA, PhRMA or the AMA relating to the
FD&C Act, the PHS Act, the PhRMA Code, or the AMA Guidelines. Outside of the
U.S., the Parties shall in all material respects conform their practices and
procedures relating to such Promotion to the applicable laws, rules and
regulations of the applicable country in the Territory, and similarly provide
the other Party with a copy of comparable correspondence or other reports as
applicable in such country. Each Party shall cause each of its employees,
representatives and agents, including, without limitation, each of its Sales
Representatives, to do nothing which such Party knows or reasonably should know
would jeopardize the goodwill or reputation of either Party or Antegren, or, as
applicable, other Licensed Product.

               (f) Labeling Claims. Each Party shall limit the claims of safety
and efficacy that such Party or its sales force makes for a Licensed Product in
the Territory to those that are consistent with the approved labeling for such
Licensed Product in such country of the Territory. Neither Party may add, delete
or modify claims of efficacy or safety in its Promotion of any Licensed Product
in the Territory nor make any other changes in Promotion materials, Licensed
Product Promotional Materials and literature approved by the JCT unless the
change is approved by the JCT. Each Party shall be fully responsible for
disseminating accurate information regarding any Licensed Product to its Sales
Representatives based on approved labeling and information provided by the JCT.

                                       40
<PAGE>

               (g) Samples. No Sampling of Licensed Product shall occur unless
the JCT has approved a Sampling program. If the JCT determines that a Sampling
program is advisable, each Party's Sales Representatives shall follow the
procedures for Sampling agreed upon by the JCT and shall perform Sampling in
compliance with all applicable laws and regulations.

     5.5 CUSTOMER SERVICE. As part of its Commercialization Plan and each Annual
Commercialization Plan/Budget, the JCT shall develop a strategy and procedures
for customer support services, on a country by country basis, including the
integration of such services with marketing and sales activities of both
Parties, the logistics, order entry and invoicing activities of the Distributing
Party and the ongoing regulatory obligations and information collection
activities of the Parties as specified in this Agreement. The JCT shall, based
on the recommendation of the relevant Designated Party as to customer support in
a particular indication, allocate responsibility for customer support services
between the Parties in such a way as to balance the goal of providing
consistent, high quality support with the goal of utilizing, to the extent
practicable, the then-prevailing infrastructure and expertise of each Party in a
given activity or with respect to a specific indication.

     5.6 DISTRIBUTION ACTIVITIES. Notwithstanding anything in this Agreement to
the contrary, *** shall be the "Distributing Party" in each country of the
Territory unless the Joint Commercialization Team recommends, with the approval
of the JSC, that *** assume such responsibilities in a country. The Distributing
Party in a country shall be responsible for processing orders, pick, pack and
ship operations, order delivery, invoicing and collection activities and any
other distribution activities that are allocated to the Distributing Party in
the Commercialization Plan and an Annual Commercialization/Budget (collectively,
"Distribution Activities"). All Distribution Activities shall be performed by
the Distributing Party in accordance with the Commercialization Plan and an
Annual Commercialization/Budget using employees and facilities of the
Distributing Party or using a Third Party or Third Parties approved by the JCT
under a contract approved by the JCT.

     5.7 RECALLS. Decisions with respect to recalls, withdrawals or corrections
of Licensed Product related to manufacturing or product quality issues shall be
handled in accordance with the Clinical Supply Agreement and the Commercial
Supply Agreement. The JSC shall have decision-making authority with respect to
issuing all other recall, market withdrawal or correction of any Licensed
Product in the Territory. The members of the JSC for each Party shall delegate
their authority under this Section to the appropriate executive officers in
their respective regulatory departments who shall develop appropriate standard
operating procedures with respect to recalls. To the extent regulatory
timeframes or public safety considerations require immediate action, a telephone
conference of the JSC's designees under this Section shall be called within the
required timeframe to consider the action and make a decision. Each Party shall
notify the other Party promptly (and in any event within twenty-four (24) hours
of receipt of

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

                                       41
<PAGE>

written notice) if any Licensed Product is alleged or proven to be the subject
of a recall, market withdrawal or correction in any country in the Territory.
Once a recall or withdrawal decision has been made under this Section, the
Distributing Party, under the direction of the JCT and the designees of the JSC,
shall be responsible for handling and implementing such recalls and market
withdrawals of any Licensed Product in the Territory, provided that such
activities be performed in accordance with standard operating procedures
approved by the JCT and the JSC. The other Party will make available to the
Distributing Party, upon request, all of the other Party's pertinent records
that the Distributing Party may reasonably request to assist it in effecting any
recall or market withdrawals. The Parties shall share equally all costs of a
recall or marketing withdrawal in the Territory in accordance with a budget for
such activities to be agreed upon by the JCT and approved by the JSC. A Party
shall have no obligation to reimburse or otherwise compensate the other Party
for any lost profits or income that may arise in connection with any such recall
or market withdrawal. Any investigation conducted in connection with a Licensed
Product recall shall be undertaken jointly by the Parties under the direction of
the JSC.

     5.8 Marketing Rights.

               (a) Single Party Promotion. The Parties hereby agree that in the
event that only one Party plans to Promote a Licensed Product in any country or
countries in the Territory, then such Party may request good faith negotiations
with the other Party to obtain a potential royalty-bearing license in such
country or countries to replace the economic terms of this Agreement therefor,
where the royalty rate for such a license would place the non-Promoting Party in
the same economic position as expected by the economic terms of this Agreement
for sales of such Licensed Product in such country or countries. Nothing herein,
however, shall obligate either Party to enter into such a license agreement in
such event.

               (b) Both Parties. The Parties hereby agree that in the event that
neither Party will Promote a Licensed Product in any country or countries in the
Territory, then the Parties shall promptly meet in an attempt to determine
whether to appoint a Third Party distributor under 5.4(c) or whether the best
approach is to license the marketing and sales rights for such Licensed Product
in such country or countries. If the Parties choose to license rights, they
either will mutually agree upon a royalty rate for such license that is
approximately equivalent to each Party's anticipated economic return hereunder
expected for sales of such Licensed Product in such country or countries, or
agree upon the mechanism for otherwise sharing the economic return from Licensed
Products as provided under this Agreement in such country or countries.

                                   ARTICLE 6.
                          CONSIDERATION/COST ALLOCATION

                                       42
<PAGE>

     6.1 PERCENTAGE. Subject to the adjustments set forth in Section 4.7, the
Biogen Percentage shall be *** and the Elan Percentage shall be *** for Net
Sales of Licensed Products in the Territory under *** on an annual basis. When
Net Sales of Licensed Product are, on average, for four (4) Calendar Quarters,
in excess of *** per Calendar Quarter, then Elan, at its sole discretion, within
thirty (30) days of the end of that Calendar Quarter, may make a first single
payment (the "First Tier Payment") to Biogen of *** . If Elan remits the First
Tier Payment to Biogen, the Percentages applicable when Net Sales are in excess
of *** , but less than *** on an annual basis, will continue to be *** as the
Elan Percentage and *** as the Biogen Percentage, subject to the adjustments set
forth in Section 4.7. Should Elan elect not to make the First Tier Payment, the
Percentages applicable when Net Sales are in excess of *** on an annual basis
shall be adjusted such that the Biogen Percentage is *** and the Elan Percentage
is *** , subject to further adjustment as set forth in Section 4.7. If Elan has
remitted to Biogen the First Tier Payment and, thereafter, Net Sales of Antegren
or, as applicable, other Licensed Product, on average, for four (4) Calendar
Quarters, are in excess of *** per Calendar Quarter, then Elan, at its sole
discretion, within thirty (30) days of the end of that Calendar Quarter, may
make a second single payment (the "Second Tier Payment") to Biogen of *** . If
Elan remits the Second Tier Payment to Biogen, the Percentages applicable when
Net Sales are in excess of *** on an annual basis will continue to be *** as the
Biogen Percentage and *** as the Elan Percentage, subject to the adjustments set
forth in Section 4.7. Should Elan elect not to make the Second Tier Payment and
having made the First Tier Payment, the Percentages applicable when Net Sales
are in excess of *** on an annual basis shall be adjusted such that the Biogen
Percentage is *** and the Elan Percentage is *** , subject to further adjustment
as set forth in Section 4.7.

     6.2 REIMBURSABLE COMMERCIAL COST SHARING. The Parties shall split
Reimbursable Commercial Costs in accordance with the Parties' respective
Percentages, and in accordance with the procedures described in the Financial
Planning, Accounting and Reporting Procedures attached hereto as Exhibit B.
There shall be a Reconciliation Statement, prepared by the finance
representatives of the Parties on the JPT or Joint Commercialization Team as set
forth in Exhibit B, of such costs which are to be shared and which are incurred
during a reporting period by each Party, in accordance with Section A.2.2 of
Exhibit B, with a payment by one Party to the other, within thirty (30) days of
receipt of the Reconciliation Statement, to the extent necessary so that each
Party bears its appropriate Percentage of such shared Reimbursable Commercial
Costs.

     Elan shall be entitled to credits against its share of Reimbursable
Commercial Costs otherwise owed to Biogen under this Section in the amount of
*** and any additional amounts set forth below upon occurrence of the
corresponding triggering event. The credits may be applied only after First
Commercial Sale of

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

                                       43
<PAGE>

Licensed Product in MS, if any. Elan may not apply credits of more than *** in
any one (1) year.

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
                                  Event                                                 Credit Amount
                                  -----                                                 -------------
-------------------------------------------------------------------------------------------------------------------
<S>                                                                                   <C>
Biogen's initiation of the Clinical Resupply Campaign following                           $        ***
successful production at 200 liter scale
-------------------------------------------------------------------------------------------------------------------
Biogen's conduct of the Clinical Resupply Campaign in accordance with the                 $        ***
Development Plan and satisfactory completion of comparability protocols
such that there is sufficient Clinical Supplies for Phase III Clinical
Trials in MS and Crohn's disease as currently contemplated such that
unrestricted enrollment in the trials could begin by the Anticipated
Phase III Start Date (even if such trials do not actually begin by such
date)
-------------------------------------------------------------------------------------------------------------------
</TABLE>

     6.3 UPFRONT FEE. On the Effective Date, Biogen shall pay Elan an up-front
fee of fifteen million dollars ($15,000,000) to reimburse Elan for research and
development expenditures previously incurred by Elan. The payment set forth in
this Section 6.3 shall not be refundable or creditable and shall not be subject
to or create future performance obligations on the part of either Biogen or
Elan. The terms of this up-front fee are separate and distinct from the other
terms of this Agreement.

     6.4 MILESTONE PAYMENTS TO ELAN. Biogen shall pay to Elan the following
milestone payments, each such payment being due and payable one time only and
within thirty (30) days after the occurrence of the corresponding triggering
event.

<TABLE>
<CAPTION>
    -------------------------------------------------------------------------------------------
                         Event                           Payment To Elan By Biogen
                         -----                           -------------------------
    -------------------------------------------------------------------------------------------
    <S>                                                  <C>
                  ***                                    $           ***
    -------------------------------------------------------------------------------------------
      ***  APPROXIMATELY 5 LINES OMITTED  ***
                                                         $           ***
    -------------------------------------------------------------------------------------------
</TABLE>

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

                                       44
<PAGE>

<TABLE>
<CAPTION>
    -------------------------------------------------------------------------------------------
                         Event                           Payment To Elan By Biogen
                         -----                           -------------------------
    -------------------------------------------------------------------------------------------
    <S>                                                  <C>
      ***   APPROXIMATELY 15 LINES OMITTED ***
                                                         $           ***
    -------------------------------------------------------------------------------------------
      ***   APPROXIMATELY 5 LINES OMITTED   ***
                                                         $           ***
    -------------------------------------------------------------------------------------------
      ***   APPROXIMATELY 5 LINES OMITTED  ***
                                                         $           ***
    -------------------------------------------------------------------------------------------
      ***   APPROXIMATELY 5 LINES OMITTED ***
                                                         $           ***
    -------------------------------------------------------------------------------------------
</TABLE>

Each of the milestone payments set forth in this Section 6.4 are payable only
once, and shall be not be refundable or creditable or subject to or create any
future performance obligations on the part of either Biogen or Elan. The terms
of the milestones are separate and distinct from the other terms of this
Agreement.

     6.5 RECORDS OF NET SALES AND COMMERCIALIZATION COSTS. Each Party will
maintain complete and accurate records which are relevant to costs, expenses,
sales and payments used to determine payments to be made under this Agreement
and such records shall be open during reasonable business hours for a period of
three (3) years from creation of individual records for examination at the other
Party's expense and not more often than once each year by an independent
certified public accountant selected by the other Party as described in A.6 of
Exhibit B. Any records or accounting information received from the other Party
shall be Confidential Information for purposes of Article 10. Results of any
such audit shall be provided to both Parties, subject to Article 10.

                                   ARTICLE 7.
                             MANUFACTURE AND SUPPLY

     7.1 Manufacture of Licensed Products.

         (a) Technology Transfer. Elan will ensure that a letter agreement
regarding technology transfer agreement with Lonza, in the form attached to this
Agreement as Exhibit D, is in effect by the execution date of this Agreement.
Commencing on the Effective Date, Elan shall commence transfer of manufacturing
Know-how from Elan and Lonza to Biogen, and shall use Commercially Reasonable
and Diligent Efforts to ensure that such technology transfer is completed within
sixty (60) days of the Effective Date.

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

                                       45
<PAGE>

         (b) Existing Supplies and Commitments. Elan's sole current
manufacturing commitments are with the third party contract manufacturers as set
forth in Schedule 7.1(b)(i). The Parties will initially use Elan's existing
Clinical Supplies of Antegren and the quantities of Antegren currently scheduled
to be manufactured by Elan's contract manufacturer for preclinical, and, as
determined by the Joint Project Team, for clinical trial uses. Elan's existing
inventory of Clinical Supplies is described in Schedule 7.1(b)(ii). The JPT
shall determine whether to have Elan instruct Lonza to complete the manufacture
of six to nine batches of Antegren in 2000 and 2001, and Elan shall comply with
such instruction.

         (c) Clinical Supplies. Biogen shall be responsible for scale-up of the
manufacturing process for Licensed Product at Biogen's facility, and preparation
for the production of Clinical Supplies. Commencing at such time as the
technology transfer and manufacturing scale-up processes at Biogen have been
completed and the FDA has granted any approvals and licenses required for
Licensed Product manufactured by Biogen to be used in clinical trials, Biogen
shall supply Clinical Supplies of Antegren for the completion of human clinical
trials in the Territory, subject to the terms of a "Clinical Manufacturing
Agreement" to be entered into by the Parties within sixty (60) days of the
Effective Date in a form to be mutually agreed upon by the Parties. Once
Clinical Supplies are available from Biogen, the Joint Project Team shall
determine from which source of Licensed Product preclinical and clinical needs
will be filled.

         (d) Costs Associated with Clinical Supplies *** of Biogen's Cost of
Goods Manufactured For Sale for manufacture and supply of Clinical Supplies
incurred after the execution date shall be included as Development Costs.

         (e) Commercial Supplies. Biogen shall be responsible for establishing a
commercial manufacturing process, and supplying Commercial Supplies of Antegren,
or applicable, other Licensed Product at the scale and in the amounts required
to meet worldwide demand for Licensed Product subject to oversight of the JSC
with respect to plans and forecasts. Within ninety (90) days after initiation of
a Phase III Clinical Trial of Licensed Product, the Parties will enter into a
"Commercial Manufacturing and Supply Agreement" in a form to be mutually agreed
upon by the Parties. The executed Commercial Supply Agreement shall contain
terms and provisions identical or not less favorable than the applicable
provisions of this Agreement. The termination provisions in the Commercial
Supply Agreement shall be identical to those provisions related to continuation
of supply after termination contained in Article 14. The purchase price to be
paid by Elan for Commercial Supplies provided by Biogen under the Commercial
Manufacturing and Supply Agreement shall be the applicable Transfer Price as
defined under this Agreement, provided, however, that the purchase price of any
unit of Commercial Supplies to be distributed as Samples shall be *** . The
Transfer Price shall be calculated on a quarterly basis, or on a such other
basis as the JCT shall determine. The Transfer Price shall be paid within thirty
(30) days after such Commercial Supplies are delivered to Elan or its designee.

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

                                       46
<PAGE>

         (f) Decision-making. Notwithstanding anything in this Agreement to the
contrary, Biogen shall have final decision-making authority solely with respect
to issues directly related to physical product development, process development
and day-to-day manufacturing of Licensed Product, provided that such decisions
are made in good faith and are consistent with the plans and forecasts for
Licensed Product approved by the JSC. For purposes of clarity, it is understood
by the Parties that strategic decisions related to physical product development,
process development, and manufacturing shall be made by the JSC.

         (g) Use of Third Party Suppliers. In the event that Biogen desires to
use a Third Party to perform any part of manufacturing of Commercial Supplies,
the JSC shall first consider whether Elan has the ability, capability and desire
to perform such manufacturing operations, and, if so and if the Parties are able
to agree on terms that are acceptable to both Parties, the Parties shall amend
this Agreement and the Commercial Manufacturing and Supply Agreement to cover
the manufacturing operations to be performed by Elan.

     7.2 PAYMENTS TO BIOGEN. Upon occurrence of the events specified below, Elan
shall make the corresponding payment to Biogen to reimburse Biogen for
manufacturing-related expenditures incurred by Biogen. The payments shall not be
refundable or creditable and shall not be subject to or create future
performance obligations on the part of either Biogen or Elan. The terms of these
payments are separate and distinct from the other terms of this Agreement.

------------------------------------------------------------------------------
                     Event                         Credit Amount
                     -----                         -------------
------------------------------------------------------------------------------
   ***
                                                   $           ***
------------------------------------------------------------------------------
   ***
                                                   $           ***
------------------------------------------------------------------------------
   ***
                                                   $           ***
------------------------------------------------------------------------------
   ***   APPROXIMATELY 8 LINES OMITTED  ***
                                                   $           ***

------------------------------------------------------------------------------

     7.3 ALTERNATIVE MANUFACTURING. To the extent relevant activities are
contained in the Development Plan and Annual Workplan/Budget, Elan shall have

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

                                       47
<PAGE>

primary responsibility for completing the evaluation of the economic viability
of manufacturing Licensed Product through the introduction of genetic material
into a goat. If recommended by the Joint Project Team and approved by the JSC,
as part of an Annual Workplan/Budget, Elan may enter into contracts with such
Third Parties as may be approved by the Joint Project Team in order to evaluate
the transgenic means of production referred to in this Section 7.3. Elan's costs
associated with this Section 7.3 shall, where included within an Annual
Workplan/Budget, be chargeable as Development Costs. If the JSC, upon the
recommendation of the Joint Project Team, decides to pursue the transgenic means
of production for Clinical Supplies or Commercial Supplies, the Parties shall
negotiate in good faith appropriate adjustments to this Agreement.

     7.4 COMPLIANCE WITH GMP. All of the manufacturing activities with respect
to Clinical Supplies intended for use in humans and Commercial Supplies shall be
performed in accordance with GMP. With respect to any facility or site at which
a Party conducts manufacturing pursuant this Agreement, including, where
commercially reasonable and within the control of the other Party, Third Party
facilities or sites, each Party shall have the right, at its expense, upon
reasonable written notice and during normal business hours, to inspect such site
and facility and any records relating thereto as is reasonably necessary to
verify the other Party's compliance with the terms of this Agreement relating to
GMP. Such inspection shall be subject to the confidentiality provisions of this
Agreement. Each Party agrees to, to the maximum extent possible, to include in
any agreement with a Third Party relating to its facilities and sites a clause
permitting the other Party to exercise its rights under this Section 7.4.

                                   ARTICLE 8.
                                    LICENSES

     8.1 LICENSE TO ELAN WITHIN THE FIELD IN THE TERRITORY. Subject to the terms
and conditions of this Agreement, including, without limitation, Article 6,
Biogen hereby grants to Elan a worldwide royalty-free license, without the
right, except as otherwise provided for herein, to sublicense, under the Biogen
Patents and Biogen Know-how in the Field to develop, make, have made, use,
market, sell, distribute, export, import, offer for sale, have sold, or have
distributed or imported Licensed Products in the Territory. The license granted
to Elan hereunder, in any country, shall be co-exclusive with Biogen. Biogen
agrees not to grant to any Third Party any license rights under Biogen Patents
and/or Biogen Know-how to develop, make, have made, use, sell, offer for sale,
have sold and/or import Licensed Products except as otherwise permitted under
this Agreement.

     8.2 LICENSE TO BIOGEN WITHIN THE FIELD IN THE TERRITORY. Subject to the
terms and conditions of this Agreement, including, without limitation Article 6,
Elan hereby grants to Biogen a worldwide royalty-free license, without the
right, except as otherwise provided for herein, to sublicense, under the Elan
Patents and Elan Know-how in the Field to develop, make, have made, use, market,
sell, distribute, export, import, offer for sale, have sold, or distributed or
imported Licensed Products in the Territory. The license granted to Biogen
hereunder, in any country, shall be co-exclusive with Elan. Elan agrees not to
grant to any Third Party any license rights under Elan Patents and/or

                                       48
<PAGE>

Elan Know-how to develop, make, have made, use, sell, offer for sale, have sold
and/or import Licensed Products except as otherwise permitted under this
Agreement.

     8.3 UNBLOCKING LICENSES. In the event that the Development activities of a
Party, or authorized Third Party, under this Agreement and/or the manufacture
and/or Commercialization of Licensed Products in the Territory would, during the
term of this Agreement, misappropriate any know-how and/or infringe any patent
rights Controlled by the other Party that are not covered by the licenses and
sublicenses granted to in Sections 8.1 and/or 8.2, each Party hereby grants to
the other Party, to the extent such Party is legally able to do so, a worldwide,
non-exclusive, non-royalty bearing license, under such know-how and patent
rights, to enable the licensed Party perform its obligations under this
Agreement and to manufacture and/or Commercialize Licensed Products in the
Territory in accordance with the licenses and sublicenses granted in Sections
8.1 and 8.2 of this Agreement.

     8.4 RIGHT TO GRANT LICENSES/SUBLICENSES. Subject to Section 10.2, if
pursuant to this Agreement, the JSC approves the utilization of one or more
Third Parties to perform certain tasks in the conduct of the Development Plan
and Annual Workplan/Budget, the Commercialization Plan, the Annual
Commercialization Plan/Budget, or the manufacture of Clinical Supplies or
Commercial Supplies, the Party entering into a contract with such Third Party
for the performance of such services, may, as part of such contract, grant to
such Third Party a nonexclusive, nontransferable license or sublicense, as
applicable, without the right to grant sublicenses, under the Elan Patents, Elan
Know-how, Biogen Patents or Biogen Know-how, as applicable, only to the extent
and only for so long as such license or sublicense is necessary for such Third
Party to perform such tasks. All such contracts and sublicenses entered into by
either Party with any such Third Party shall be subject to the prior written
approval of the JSC with the prior review of each Party's legal department,
which approval shall not be unreasonably withheld or delayed.

     8.5 *** SUBLICENSE. The Parties agree to comply with the obligations set
forth in the ***

     8.6 ELAN IN-LICENSES. Elan shall not terminate or amend the Elan
In-Licenses without the prior written consent of Biogen.

                                   ARTICLE 9.
                           TRADEMARKS AND SERVICEMARKS

     9.1 PRODUCT TRADEMARKS. Each Party agrees to sell Antegren solely in
connection with the Antegren Trademark chosen by the JCT with the advice and
counsel of the JPC pursuant to Section 5.3(c). All other Licensed Products shall
be sold in the Territory under the Product Trademarks chosen by the JCT, with
the advice and counsel of the JPC as described in Section 5.3(c) above. The
Distributing Party, in coordination

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

                                       49
<PAGE>

with, and subject to the review and approval of, the JCT and the JPC, shall be
responsible for the preparation, prosecution and maintenance of applications
related to the Antegren Trademark and Product Trademarks in each country in the
Territory in which it is the Distributing Party, which such Antegren Trademark
and Product Trademarks shall be owned by such Distributing Party, subject to the
terms of this Agreement. Each Distributing Party, subject to the terms of
Section 9.3, shall grant to the other Party a royalty-free, nontransferable,
non-assignable, fully paid up, license to use the Antegren Trademark and the
Product Trademarks as contemplated by this Agreement. The costs of the
preparation, prosecution and maintenance of such Product Trademark applications
and Product Trademarks shall be included in Other Out of Pocket Costs pursuant
to Exhibit B to the extent such costs are included in the Development
Budget/Plan or the Commercialization Plan.

     9.2 PARTY TRADEMARKS ON LICENSED PRODUCT PROMOTIONAL MATERIALS. All
Licensed Product Promotional Materials used by either Party in Promoting in the
Territory shall contain (a) the Biogen trademarks, corporate name and logo as
may be provided by Biogen to Elan from time to time and (b) the Elan trademarks,
corporate name and logo as may be provided by Elan to Biogen from time to time,
in positions of equivalent prominence and emphasis, subject to Sections 5.3(d)
and 9.4.

     9.3 Trademark Licenses.

               (a) In order to enable each Party to perform its obligations as
set forth in Section 9.2 above, Biogen hereby grants to Elan a non-assignable,
non-exclusive, royalty-free right and license to use the BIOGEN trademark as
specified by Biogen and as modified by Biogen from time to time (the "BIOGEN
trademark"), and Elan hereby grants to Biogen a non-assignable, non-exclusive,
royalty-free right and license to use the ELAN trademark as specified by Elan
and as modified by Elan from time to time (the "ELAN trademark") in the
Territory solely in connection with the Licensed Product Promotional Materials
and labeling for Licensed Products.

               (b) Elan hereby grants to Biogen a royalty-free, fully paid up,
co-exclusive license to use the Antegren Trademark in the Territory for the
Development, Promotion, and manufacturing and Commercialization activities
provided for in this Agreement and each Party shall grant to each other a
royalty-free, fully paid up, co-exclusive license to use the Product Trademarks
in the Territory for the Development, Promotion, and Commercialization and
manufacturing activities provided for in this Agreement.

               (c) The trademark licenses granted under this Section 9.3 shall
be sublicensable to the extent and pursuant to the express terms and conditions
permitted under Section 8.4 above. Unless otherwise agreed, each such
sublicensee shall be subject to all of the obligations of the licensing or
sublicensing Party. Furthermore, the licenses set forth in this Section 9.3
shall expire as to any terminating Party under Section 14.2 or breaching Party
in the event of termination under Section 14.4 or non-purchasing Party under
Section 14.1(b), 14.7, or 14.8, and any license rights under Section 9.3(b)
shall become exclusive to the non-terminating or non-breaching Party or the
purchasing Party,

                                       50
<PAGE>

as the case may be, immediately upon termination of this Agreement; provided,
however, each Party (to the extent permitted under this Agreement to sell
Licensed Products after termination) shall thereafter have a reasonable period,
not to exceed *** following such termination, within which to use the existing
inventory of such Licensed Product Promotional Materials and labeling containing
any trademarks of the other Party. Upon a termination pursuant to Section 14.2
or 14.4 below or a purchase under Sections 14.1(b), 14.7 or 14.8 below, the
non-terminating Party or non-breaching Party or the purchasing Party,
respectively, shall thereafter be relieved of its obligations to display the
other Party's trademarks on such Licensed Product Promotional Materials and
labeling printed following such termination or purchase and, upon the exhaustion
of any existing inventory of Licensed Product promotional materials and labeling
following such termination, the license granted to the non-terminating Party or
non-breaching Party or the purchasing Party, as the case may be, under Section
9.3(a) shall terminate.

     9.4 TRADEMARK USE REQUIREMENTS. Prior to the use thereof, each Party shall
provide to the other Party, through the Joint Project Team or the JCT or their
designees and the JPC, a prototype of any Licensed Product Promotional Materials
or labeling for Licensed Products which contain the other Party's trademarks
(including any Product Trademark) for the purposes of the other Party's review
of the manner in which its trademarks are used therein. The reviewing Party
shall notify the other Party within ten (10) business days after delivery of
such prototype, whether the reviewing Party approves or disapproves of the
manner of such use and, in the case of disapproval, the specific reasons
therefor and an acceptable alternative. In the event the reviewing Party fails
to so notify the other Party within such ten (10) business day period, the
reviewing Party shall be deemed to have approved of the manner of such use. In
the event the reviewing Party disapproves of the manner of such use and the
Parties are unable to reach agreement regarding the manner of such use, such
dispute shall be resolved by the Parties in accordance with Article 16 below.
Each Party shall permit one or more authorized representatives of the other
Party, on reasonable prior notice, at reasonable intervals, during normal
business hours and subject to normal safety and security procedures, to inspect
and examine from time to time, Licensed Product Promotional Materials and
labeling for Licensed Products and the records of such Party that are directly
related to use of the other Party's trademarks, or to use of such Licensed
Product Promotional Materials or labeling. Notwithstanding the above, the
Parties shall not have the right to so inspect Licensed Product Promotional
Materials and labeling for Licensed Products more often than once in any
calendar year, unless a Party is in breach of this Section 9.4, in which case
the other Party shall have the right to so inspect such materials and records
with respect to such breach.

     9.5 INFRINGEMENT OF TRADEMARKS. Each Party shall notify the JCT promptly
upon learning of any actual, alleged or threatened infringement of any
trademark, service mark or trade dress right applicable to a Licensed Product in
the Territory, or of any unfair trade practices, trade dress imitation, passing
off of counterfeit

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

                                       51
<PAGE>

goods, or like offenses in the Territory. Upon learning of such offenses from a
Party regarding such potential or actual violation, the JPC shall confer with
the Parties as to which Party and counsel should be assigned to defend the
applicable rights. Subject to the overview of the JPC, the Party defending the
Product Trademark or Antegren Trademark, as the case may be, shall take all
reasonable and appropriate steps to protect, defend and maintain the Product
Trademark and Antegren Trademark for use by the Parties in the Territory in
connection with Antegren or, as applicable, other Licensed Product. The Parties
shall cooperate in good faith with respect to all enforcement actions hereunder,
and each Party shall notify the other Party promptly of all substantive
developments with respect to such enforcement actions, including, but not
limited to, all material filings, court papers and other related documents. Each
Party shall consider the timely given, reasonable comments and advice of the
other Party with respect to the strategy employed and submissions made relative
to any such enforcement actions, and any disagreements shall be brought to the
attention of the JSC for resolution.

     9.6 COSTS OF DEFENSE OF TRADEMARKS. All of the costs, expenses and legal
fees in bringing, maintaining and prosecuting any action approved by the JPC to
protect or defend the Antegren Trademark or, as applicable, Product Trademark in
the Territory, and any recovery, shall be included in the Other Out of Pocket
Costs pursuant to Exhibit B.

                                  ARTICLE 10.
                                 CONFIDENTIALITY

     10.1 CONFIDENTIALITY. Except to the extent expressly authorized by this
Agreement or otherwise agreed in writing, the Parties agree that, for the Term
of this Agreement and for five (5) years thereafter, the receiving Party shall
keep confidential and shall not publish or otherwise disclose or use for any
purpose other than as permitted under this Agreement any Know-how and other
information and materials furnished to it by the other Party pursuant to this
Agreement (collectively, "Confidential Information"), except to the extent that
it can be established by the receiving Party that such Confidential Information:

               (a) was already known to the receiving Party, other than under an
     obligation of confidentiality, at the time of disclosure by the other
     Party;

               (b) was generally available to the public or otherwise part of
     the public domain at the time of its disclosure to the receiving Party;

               (c) became generally available to the public or otherwise part of
     the public domain after its disclosure and other than through any act or
     omission of the receiving Party in breach of this Agreement;

               (d) was disclosed to the receiving Party, other than under an
     obligation of confidentiality, by a Third Party who had no obligation to
     the disclosing Party not to disclose such information to others; or

                                       52
<PAGE>

               (e) was subsequently developed by the receiving Party without use
     of the Confidential Information as demonstrated by competent written
     records.

     10.2 AUTHORIZED DISCLOSURE. Each Party may disclose Confidential
Information of the other Party hereunder to the extent such disclosure is
reasonably necessary in filing or prosecuting patent applications, prosecuting
or defending litigation, making filings with Regulatory Authorities related to
Licensed Product, or complying with applicable governmental regulations,
provided that in making any such disclosure of the other Party's Confidential
Information it will, except where impracticable for necessary disclosures, for
example in the event of medical emergency, give reasonable advance notice to the
other Party of such disclosure requirement and, except to the extent
inappropriate in the case of patent applications, will use its reasonable
efforts to secure confidential treatment of such Confidential Information
required to be disclosed. In addition, each Party shall be entitled to disclose,
under a binder of confidentiality containing provisions substantially as
protective as those of this Article 10 to the extent reasonably practicable,
Confidential Information of the other Party to its Affiliates, consultants,
clinical investigators, potential sublicensees and other Third Parties only for
any purpose provided for in this Agreement. Nothing in this Article 10 shall
restrict any Party from using for any purpose any Information developed by it
during the course of the collaboration hereunder except as otherwise set forth
in Section 10.5 and 10.6 and except that results of Development work related to
Licensed Product, including but not limited to clinical trials of Licensed
Product shall not be disclosed to any Third Party unless pursuant to a
publication under Section 10.5, a press release under Section 10.6 or to
Affiliates, consultants, clinical investigators, potential sublicensees and
other Third Parties under an obligation to the disclosing Party to maintain the
confidentiality of such Information and provided such Information is furnished
for a purpose contemplated under this Agreement.

     10.3 SURVIVAL. This Article 10 shall survive the termination or expiration
of this Agreement for a period of five (5) years.

     10.4 TERMINATION OF PRIOR AGREEMENT. This Agreement supersedes the
Confidentiality Agreement between the Parties dated January 21, 1998, as
modified by side letters exchanged between the Parties on February 4, 2000, but
only insofar as such Confidentiality Agreement relates to the subject matter of
this Agreement. All Confidential Information (as defined in such Confidentiality
Agreement) exchanged between the Parties under such Confidentiality Agreement
relating to the subject matter of this Agreement shall be deemed Confidential
Information hereunder and shall be subject to the terms of this Article 10.

     10.5 PUBLICATIONS. The Joint Project Team will determine the overall
strategy for publication of results of clinical trials of Licensed Product and
publication in support of such Licensed Products in the Territory. Except as
required by law, each Party agrees that it shall not publish or present the
results of Development work related to Licensed Product, including but not
limited to, studies or clinical trials carried out by such Party as part of the
collaboration under this Agreement without the opportunity

                                       53
<PAGE>

for prior review by the other Party and the approval of the Joint Project Team,
Joint Commercialization Team or the JSC, as the case may be. Each Party shall
provide to the other Party the opportunity to review any of the submitting
Party's proposed abstracts, manuscripts or presentations (including information
to be presented verbally) which relate to the Licensed Products or their use
(including any proposed Third Party publication submitted to the submitting
Party for review) at least thirty (30) days prior to their intended presentation
or submission for publication, and such submitting Party agrees, upon written
request from the other Party, not to submit such abstract or manuscript for
publication or to make such presentation until the other Party is given up to
forty-five (45) days from the date of such written request to seek appropriate
patent protection for any material in such publication or presentation which it
reasonably believes is patentable. Once such abstracts, manuscripts or
presentations have been reviewed by each Party and have been approved for
publication by the Joint Project Team, the Joint Commercialization Team, or the
JSC, as the case may be, the same abstracts, manuscripts or presentations do not
have to be provided again to the other Party for review for a later submission
for publication. Expedited reviews for abstracts or poster presentations may be
arranged if mutually agreeable to the Parties. Each Party also shall have the
right to require that its Confidential Information that may be disclosed in any
such proposed publication or presentation be deleted prior to such publication
or presentation. In the event that either Party submits any manuscript or other
publication relating to Antegren or other Licensed Product, it will consider and
acknowledge the contributions of the other Party, including, as appropriate,
co-authorship.

     10.6 PUBLICITY REVIEW. The Parties agree that the public announcement of
the execution of this Agreement shall be in the form of a draft press release
attached to this Agreement as Exhibit F, and thereafter each Party shall be
entitled to make or publish any public statement consistent with the contents
thereof. Thereafter, Elan and Biogen will jointly discuss and agree, based on
the principles of Section 10.5 and this Section 10.6, on any statement to the
public regarding this Agreement or any aspect or term of this Agreement or any
results of Development work subject in each case to disclosure otherwise
required by law or regulation as determined in good faith by each Party. The
principles to be observed by Elan and Biogen in such public disclosures will be:
accuracy, the requirements for confidentiality under Article 10, the advantage a
competitor of Elan or Biogen may gain from any public statements under this
Section 10.6, and the standards and customs in the biotechnology and
pharmaceutical industries for such disclosures by companies comparable to Elan
and Biogen. The terms of this Agreement may also be disclosed to (a) government
agencies where and to the extent required by law (and with appropriate requests
made for confidential treatment), including filings required to be made by law
with the Securities and Exchange Commission, the New York Stock Exchange, or any
national securities exchange, (b) a Party's accountants or lawyers, or (c) Third
Parties with the prior written consent of the other Party, which consent shall
not be unreasonably withheld, so long as such disclosure is made under a binder
of confidentiality (in the case of Third Parties), so long as highly sensitive
terms and conditions such as financial terms are extracted from the Agreement or
not disclosed upon the request of the other Party and the disclosing Party gives
reasonable advance notice of the disclosure and the circumstances requiring the
disclosure.

                                       54
<PAGE>

                                   ARTICLE 11.
              OWNERSHIP OF INTELLECTUAL PROPERTY AND PATENT RIGHTS

     11.1 Ownership of Intellectual Property.

               (a) Collaboration Inventions. All Know-how and Collaboration
Inventions arising hereunder which constitute joint inventions by employees of
Elan and Biogen will be owned jointly by Elan and Biogen, and each Party shall
retain an undivided one-half interest in and to such Know-how and Collaboration
Inventions, including, without limitation, any patents resulting therefrom, with
full ownership rights in and to any field and including the right to license and
sublicense, subject to the provisions of Sections 8.1 and 8.2 above. The laws of
the U.S. with respect to joint ownership of inventions shall apply in all
jurisdictions giving force and effect to this Agreement. Each Party shall solely
own all Collaboration Inventions arising under, in furtherance of, and as a
direct result of, that Party's activities under this Agreement which are made
(meaning that they are conceived prior to or during the Term and experimentation
has been initiated in the course of the activities contemplated hereunder)
solely by its employees or jointly with a Third Party, subject to Sections 8.1,
8.2 and 8.3 above and, with respect to inventions for which patent applications
are filed, subject to the provisions of Section 11.4(c) below.

               (b) Other Inventions. During the Term of this Agreement, and
during the course of, in furtherance of, and as a direct result of the
collaboration hereunder, inventions may be made (meaning that they are conceived
prior to or during the Term and experimentation has been initiated in the course
of the activities contemplated hereunder) by employees of either Party, solely
or jointly, which are not Collaboration Inventions as defined herein and do not
relate directly to any Licensed Product or use of Licensed Product in the Field
("Outside the Scope Invention"). Elan shall own all such Outside the Scope
Inventions made (meaning that they are conceived prior to or during the Term and
experimentation has been initiated in the course of the activities contemplated
hereunder) solely by its employees or jointly by its employee and a Third Party,
and Biogen shall own all such Outside the Scope Inventions made (meaning that
they are conceived prior to or during the Term and experimentation has been
initiated in the course of the activities contemplated hereunder) solely by its
employees or jointly by its employee and a Third Party, in each case such
Elan-owned and Biogen-owned Outside the Scope Inventions shall be subject to the
provisions of Sections 8.1, 8.2 and 8.3 above, to the extent applicable. All
such Outside the Scope Inventions made (meaning that they are conceived prior to
or during the Term and experimentation has been initiated in the course of the
activities contemplated hereunder) jointly by employees of Elan and Biogen will
be jointly owned by Elan and Biogen, subject to Sections 8.1, 8.2 and 8.3. Each
Party, at its sole discretion and responsibility, may file, prosecute and
maintain patent applications and patents covering its solely owned Outside the
Scope Inventions. For such Outside the Scope Inventions which are made jointly
by employees of Elan and Biogen, the Parties shall, though the JPC, jointly
decide on a patent application filing and prosecution strategy.

                                       55
<PAGE>

               (c) Inventorship Procedure. The JPC shall within a reasonable
time after the Effective Date establish a mutually agreeable procedure for
determining inventorship of Collaboration Inventions, provided that such
determination shall be made in accordance with applicable United States laws
relating to inventorship. All such determinations shall be documented to ensure
that any divisional or continuation patent applications reflect appropriate
inventorship and that inventions and patent rights are assigned to the
appropriate party.

     11.2 DISCLOSURE OF PATENTABLE INVENTIONS. In addition to the disclosures
required under Article 13 below, each Party shall provide to the other Party any
invention disclosure submitted in the normal course of its business which
discloses a Collaboration Invention. Such invention disclosures shall be
provided to the other Party within thirty (30) days after the Party determines
that an invention has been made. In the event patent applications are not filed
on such invention disclosures by either Party, such invention disclosures shall
be considered Know-how hereunder.

     11.3 PATENT DUE DILIGENCE. Promptly after the Effective Date, each Party
shall disclose to the other Party any patents or patent applications and
corresponding file histories Controlled by the disclosing Party, as well as any
Third Party patents or patent applications known to it, that claim or disclose
Licensed Products, methods for their use, or processes relating to the
manufacture thereof, and are relevant to the collaboration established
hereunder. Each Party agrees to bring to the attention of the other Party in a
timely manner any Third Party patent or patent application it discovers, or has
discovered, and which relates to, and may materially affect, the operations to
be conducted by or on behalf of the Parties under the collaboration. The cost of
any freedom to operate searches and analyses with respect to Licensed Products,
to the extent approved by the JPC, will be chargeable to the collaboration as
Other Out of Pocket Costs, and the Parties will agree on an allocation of
responsibilities between themselves regarding such searches and analyses.

     11.4 Patent Filings.

         (a) Elan Patents. Decisions as to whether to file, prosecute and
maintain, and in which countries to do so along with other strategic decisions
relating thereto, shall be made by the Joint Patent Committee with respect to
those Elan Patents which relate specifically to Licensed Product or the use of
Licensed Product or the manufacture of Licensed Product, and by Elan with
respect to all other Elan Patents. For purposes of clarity, it is understood
that strategic decisions related to those Elan Patents that cover additional
matter beyond that which relates specifically to Licensed Product are to be made
by Elan. Elan shall use diligent efforts to prepare, file, prosecute and
maintain all of the Elan Patents which are licensed hereunder, using patent
counsel that is reasonably acceptable to Biogen. Solely with respect to any Elan
Patents which relate specifically to Licensed Products or the use or manufacture
of Licensed Product, Elan shall consult with the Joint Patent Committee on all
material decisions related to preparation, filing, prosecution and maintenance
of such Elan Patents, and shall use diligent efforts to implement the decisions
made by the Joint Patent Committee. Elan shall give Biogen an opportunity to
review and comment upon the text of the applications

                                       56
<PAGE>

relating to any and all Elan Patents before filing, shall consult with Biogen
with respect to such application, and shall supply Biogen with a copy of the
applications as filed, together with notice of its filing date and serial number
whether such Elan Patents are filed prior to or after the Effective Date, as
well as full copies of the prosecution history for those Elan Patents filed
prior to the Effective Date. Elan shall keep Biogen advised of the status of the
actual and prospective patent filings relating to any Elan patents and shall
give Biogen an opportunity to review and comment on any material filing or
correspondence proposed to be sent to any patent office. Elan shall also notify
Biogen of the grant of any Elan Patents. Any disputes between the Parties
related to the preparation, filing, prosecution and maintenance of any Elan
Patents which relate specifically to Licensed Product or the use or manufacture
of Licensed Product shall be brought to the attention of the Joint Patent
Committee. Elan shall not cease the prosecution and/or maintenance of any Elan
Patents in any country or elect not to file a patent application unless Biogen
agrees to such action.

         (b) Biogen Patents. Decisions as to whether to file, prosecute and
maintain, and in which countries to do so, along with other strategic decisions
relating thereto, shall be made by the Joint Patent Committee with respect to
those Biogen Patents which relate specifically to Licensed Product or the use of
Licensed Product or the manufacture of Licensed Product, and by Biogen with
respect to all other Biogen Patents. For purposes of clarity, it is understood
that strategic decisions related to those Biogen Patents that cover additional
matter beyond that which relates specifically to Licensed Product are to be made
by Biogen. Biogen shall use diligent efforts to prepare, file, prosecute and
maintain all of the Biogen Patents which are licensed hereunder, using patent
counsel that is reasonably acceptable to Elan. Solely with respect to any Biogen
Patents which relate specifically to Licensed Products or the use or manufacture
of Licensed Product, Biogen shall consult with the Joint Patent Committee on all
material decisions related to the preparation, filing, prosecution and
maintenance of such Biogen Patents, and shall use diligent efforts to implement
the decisions of the Joint Patent Committee. Biogen shall give Elan an
opportunity to review and comment upon the text of the applications related to
any and all Biogen Patents before filing, shall consult with Elan with respect
to such application, and shall supply Elan with a copy of the applications as
filed, together with notice of its filing date and serial number whether such
Biogen Patents are filed prior to or after the Effective Date, as well as full
copies of the prosecution history for those Biogen Patents filed prior to the
Effective Date. Biogen shall keep Elan advised of the status of the actual and
prospective patent filings related to any Biogen Patents and shall give Elan an
opportunity to review and comment on any material filing or correspondence
proposed to be sent to any patent office. Biogen shall also notify Elan of the
grant of any Biogen Patents. Any disputes between the Parties related to the
preparation, filing, prosecution and maintenance of any Biogen Patents which
relate specifically to Licensed Product or the use or manufacture of Licensed
Product shall be brought to the attention of the Joint Patent Committee. Biogen
shall not cease the prosecution and/or maintenance of any such Biogen Patents in
any country or elect not to file a patent application unless Elan agrees to such
action. Notwithstanding the foregoing, Biogen shall be under no obligation to
share with Elan, nor to cooperate with the JPC, on any Biogen Patents that are
being challenged by Elan in a court or administrative proceeding.

                                       57
<PAGE>

         (c) Collaboration Inventions. Upon the identification of a
Collaboration Invention, the JPC shall (i) promptly discuss such Collaboration
Invention, (ii) promptly discuss the desirability of filing a United States
patent application covering such Collaboration Invention, as well as any foreign
counterparts, (iii) make the final decision with respect to any such filings as
soon as practicable, and (iv) designate the Party to be responsible for the
supervision of the preparation, filing and prosecution of such patent
application by outside patent counsel reasonably acceptable to the JPC which
such responsible Party shall, unless the Collaboration Invention is jointly
owned by the Parties, be the Party which owns such Collaboration Invention. Such
outside patent counsel shall be instructed to act in the best interests of both
Parties taking into consideration their relative interests under this Agreement.
The Party responsible for the preparation, filing, prosecution and maintenance
of Collaboration Invention Patent Rights shall consult with the Joint Patent
Committee on all material decisions related to the preparation, filing,
prosecution and maintenance of such Collaboration Invention Patent Rights, and
shall use diligent efforts to implement the decisions of the Joint Patent
Committee. The Party responsible for the preparation, filing and prosecution of
Collaboration Invention Patent Rights shall provide the other Party with a copy
of any patent application related to such Collaboration Invention Patent Rights
prior to filing such applications in any jurisdiction for review and comment by
the other Party, shall consult with the other Party with respect to such
application, and shall supply the other Party with notice of its filing date and
serial number. The Party responsible for each patent application shall keep the
other Party advised of the status of the actual and prospective patent filings,
including, without limitation, the grant of any Collaboration Invention Patent
Rights, and shall provide advance copies of any official filings or
correspondence related to the filing, prosecution and maintenance of such patent
filings for review and comment by the other Party. Any disputes between the
Parties related to the preparation, filing, prosecution and maintenance of
Collaboration Invention Patent Rights shall be brought to the attention of the
JPC for resolution. The Party responsible for a patent application shall not
cease the prosecution and/or maintenance of any such Collaboration Invention
Patent Rights in any country or elect not to file a patent application unless
the JPC agrees to such action. Subject to (i) the grant of licenses to Biogen
and Elan under Article 8, and (ii) the exclusivity provisions of Section 2.3,
each Party shall be free to exploit its Collaboration Invention Patent Rights
within the Territory without restriction. Anything in this Agreement to the
contrary notwithstanding, a Party may choose to file, prosecute and maintain
solely-owned Collaboration Inventions using its own internal patent attorneys.

         (d) Patent Term Extensions. The Parties shall cooperate, if necessary
and appropriate, with each other in gaining patent term extensions, including
without limitation, supplementary protection certificates and any other
extensions that are now or become available in the future wherever applicable to
Patents covering Licensed Products. The Parties shall, if necessary and
appropriate, use reasonable efforts to agree upon a joint strategy relating to
patent term extensions, but, in the absence of mutual agreement with respect to
any extension issue, a patent shall be extended if either Party elects to extend
such patent. All filings for such extension shall be made by the Party to whom
the patent is assigned, provided, however, that in the event that the Party to
whom the patent is assigned elects not to file for an extension, such Party
shall (i) inform the

                                       58
<PAGE>

other Party of its intention not to file and (ii) grant the other Party the
right to file for such extension.

         (e) Patent Filing Costs. All costs and expenses incurred after the
Effective Date of filing, prosecuting, maintaining and extending those Elan
Patents or Biogen Patents which related specifically to Licensed Product or to
the manufacture or use of Licensed Product and all Collaboration Invention
Patent Rights shall be treated as Other Out of Pocket Costs and shall be shared
by the Parties as part of Reimbursable Commercial Costs in accordance with their
respective Percentages as set forth in Section 6.2. Notwithstanding the
foregoing, any expenses related to those Elan Patent Rights or Biogen Patent
Rights that are not specifically related to Licensed Products shall not be
shared by the Parties.

     11.5 Patent Interferences.

               (a) Oppositions/Interferences Between The Parties. With respect
to those interferences/oppositions listed on Schedule 11.5(a) and in the event
that an interference is declared by the U.S. Patent and Trademark Office or an
opposition exists between one or more patents or patent applications owned
solely by Elan that are relevant to the collaboration, and one or more patents
or patent applications owned solely by Biogen that are relevant to the
collaboration, or any of the above and one or more patents or patent
applications owned jointly by the Parties pursuant to the collaboration, and
such declared interference or opposition does not involve any patents or patent
applications owned by a Third Party, then the Parties shall in good faith
establish within thirty (30) days hereof or of the declaration of such
interference or opposition or such other time as agreed upon a mutually
agreeable process to resolve such interference or oppositions in a reasonable
manner in conformance with all applicable legal standards, but which prejudices
neither Party nor diminishes the value of the Patents at issue therein, provided
that, notwithstanding anything in this Section to the contrary, Elan shall
withdraw its opposition to those claims of Biogen's EU use patent applicable to
Alpha 4 Integrin antibodies and shall not institute any other opposition to such
claims. Nothing in this Section 11.5(a) shall cause either Party to settle or
withdraw an interference or opposition other than as to a patent claim
specifically covering a Licensed Product, its manufacture or use.

               (b) Oppositions/Interferences With Third Parties. Other than as
set forth in Section 11.5(a), all decisions relating to interferences or
oppositions with respect to Collaboration Invention Patent Rights, including,
without limitation, whether to initiate such interferences, whether to file
oppositions, appropriate settlement strategy, along with other strategic
decisions relating thereto, shall be made by the JPC. Each party shall control
and have sole discretion, after consultation with the other Party and
consideration in good faith of the other Party's comments, with respect to all
decisions relating to interferences and oppositions relating to all species of
intellectual property covered by this Agreement other than Collaboration
Invention Patent Rights.

               (c) Oppositions/Interferences Costs. The Parties shall share the
costs of any opposition or interference proceedings relating solely to
Collaboration

                                       59
<PAGE>

Invention Patent Rights. No other costs arising out of any interference or
opposition shall be shared between the Parties.

     11.6 INITIAL FILINGS IF MADE OUTSIDE OF THE U.S. The Parties agree to use
reasonable efforts to ensure that any patent filed outside of the U.S. prior to
a U.S. filing will be in a form sufficient to establish the date of original
filing as a priority date for the purposes of a subsequent U.S. filing.

     11.7 Enforcement Rights.

               (a) Notification of Infringement. If either Party learns of any
infringement or threatened infringement by a Third Party of Elan Patents, Biogen
Patents or Collaboration Invention Patent Rights owned solely or jointly by the
other Party, such Party shall promptly notify the other Party and shall provide
such other Party with available evidence of such infringement.

               (b) ENFORCEMENT.

         (I) BIOGEN PATENTS. Within a reasonable time prior to Biogen bringing
     any action or proceeding with respect to infringement of any of the Biogen
     Patents, including any Collaboration Invention Patent Rights owned solely
     by Biogen, the Parties shall consult with the JPC to determine the best way
     for the Parties to proceed. If Elan elects, prior to the commencement of
     any such action (or as otherwise agreed), to join Biogen in such action
     because of the significance of the action to the future commercialization
     prospects for Licensed Products, the costs of patent enforcement shall be
     included in Other Out of Pocket Costs, and recovery from any settlement or
     judgment shall be shared by the Parties in accordance with their respective
     Percentages. Alternatively, if Elan decides by the date of commencement of
     any such action not to join Biogen in such action, Biogen shall have the
     right, but not the obligation, to institute, prosecute and control, at its
     own expense, any action or proceeding with respect to infringement of any
     of the Biogen Patents, by counsel of its own choice, and Elan shall have
     the right, at its own expense, to be represented in any such action by
     counsel of its own choice. Any damages or other monetary awards recovered
     from settlement or judgment from an action to enforce a patent owned solely
     by Biogen for which Biogen paid its own expense under the preceding
     sentence shall be allocated first to reimburse the costs and expenses of
     Biogen, then to reimburse the costs and expenses, if any, of Elan, and any
     amounts remaining shall be paid to Biogen.

         (II) ELAN PATENTS. Within a reasonable time prior to Elan bringing any
     action or proceeding with respect to infringement of any of the Elan
     Patents, including any Collaboration Invention Patent Rights owned solely
     by Elan, the Parties shall consult with one another to determine the best
     way for the Parties to proceed. If Biogen elects, prior to the commencement
     of any such action (or as otherwise agreed), to join Elan in such action
     because of the significance of the action to the future commercialization
     prospects for Licensed Products, the costs of patent enforcement shall be
     included in Other Out of Pocket Costs and

                                       60
<PAGE>

     recovery from any settlement or judgment shall be shared by the Parties in
     accordance with their respective Percentages. Alternatively, if Biogen
     decides by the date of commencement of any such action not to join Elan in
     such action, Elan shall have the right, but not the obligation, to
     institute, prosecute and control at its own expense any action or
     proceeding with respect to infringement of any of the Elan Patents, by
     counsel of its own choice, and Biogen shall have the right, at its own
     expense, to be represented in any such action by counsel of its own choice.
     Any damages or other monetary awards recovered from settlement or judgment
     from an action to enforce a patent owned solely by Elan for which Elan paid
     its own expense under the preceding sentence shall be allocated first to
     reimburse the costs and expenses of Elan, then to reimburse the costs and
     expenses, if any, of Biogen and any amounts remaining shall be paid to
     Elan.

         (III) JOINTLY-OWNED PATENTS. In the event of an infringement of a
     Patent jointly-owned by the Parties, the JSC, with the advice and counsel
     of the JPC, shall decide the best way for the Parties to proceed. If one
     Party brings any such action or proceeding, as approved by the JSC, the
     other Party agrees to be joined as a party plaintiff if necessary to
     prosecute the action or proceeding and to give the first Party reasonable
     assistance and authority to file and prosecute the suit. The costs of
     patent enforcement to enforce any such jointly-owned Patents shall be
     included in Other Out of Pocket Costs and recovery from any settlement or
     judgment shall be shared by the Parties in accordance with their respective
     Percentages.

               (c) Settlement with a Third Party. The Party that solely brings
suit to enforce a given Elan Patent, Biogen Patent or Collaboration Invention
Patent Right shall also have the right to control settlement of such claim;
provided, however, that if one Party controls, no settlement shall be entered
into without the written consent of the other Party. If there is no agreement
between the Parties regarding such settlement, then the dispute will be resolved
pursuant to Article 16 below. If the dispute is not resolved pursuant to Article
16, then the case may not be settled.

     11.8 Third Party Patents.

               (a) Third Party Claims -- Course Of Action. If any of the
Development, Commercialization or manufacturing activities actually conducted or
to be conducted under this agreement become known to a Party hereto or are
alleged by a Third Party to infringe a Third Party's Patent, misappropriate a
Third Party's trade secret or violate a Third Party's trademark or other
intellectual property, the Party becoming aware of such allegation shall
promptly notify the other Party thereof, in writing, reasonably detailing the
claim.

               (b) Negotiation With A Third Party. Under the circumstances
described in paragraph (a), the JSC shall determine which Party, if any, shall
negotiate with said Third Party for a suitable license or assignment and execute
such license or assignment, provided, however, that such Party shall enter into
no such agreement unless it has first obtained the other Party's written
approval of the terms of such agreement,

                                       61
<PAGE>

including the amounts of any royalties or payments, which approval shall not be
unreasonably withheld. If such negotiation results in a consummated agreement
approved by both Parties, the executing Party shall make all payments to the
Third Party and such payments shall be deemed Third Party License Fees for
purposes of this Agreement and the paying Party shall be reimbursed for payment
of such fees in accordance with Section 4.6(e) or as part of Reimbursable
Commercial Costs under Section 6.2.

               (c) Third Party Suit. If a Third Party sues a Party (the "Sued
Party") alleging that the Sued Party's or the Sued Party's sublicensees'
Development, manufacture or Commercialization activities hereunder infringe or
will infringe said Third Party's patent or misappropriate said Third Party's
trade secret or Third Party's trademark or other intellectual property, then
upon the Sued Party's request and in connection with the Sued Party's defense of
any such Third Party suit, the other Party shall provide reasonable assistance
to the Sued Party for such defense and shall join such suit if deemed a
necessary party. The Sued Party shall keep the other Party, if such other Party
has not joined in such suit, reasonably informed on a quarterly basis, in person
or by telephone, prior to and during the pendency of any such suit. The Sued
Party shall not admit the invalidity of any Patent nor settle any such suit,
without written consent of the other Party, which consent shall not be
unreasonably withheld. The Parties shall equally share in the reasonable
litigation expenses, including settlement costs, royalties paid in settlement of
any such suit, and the payment of any damages to the Third Party, other than
Third Party License Fees which shall be paid pursuant to Section 4.6(e) or as
part of Reimbursable Commercial Costs under Section 6.2.

     11.9 Third Party Licenses.

               (a) In General. If either Party believes that there exists Third
Party intellectual property that constitutes Blocking Third Party Intellectual
Property or Enhancing Third Party Intellectual Property, as the case may be, it
shall notify the JPC. The JPC shall then determine whether or not such Third
Party intellectual property constitutes Blocking Third Party Intellectual
Property or Enhancing Third Party Intellectual Property, as the case may be. If
the determination of the JPC is affirmative, the Joint Project Team or the Joint
Commercialization team, as the case may be, shall determine whether, on what
terms (economic or otherwise), and by which Party (the "Licensing Party") such
Blocking Third Party Intellectual Property or Enhancing Third Party Intellectual
Property, as the case may be, shall be licensed for the purposes of this
Agreement. Prior to entering into a license agreement with respect to such
Blocking Third Party Intellectual Property or Enhancing Third Party Intellectual
Property, as the case may be, the Licensing Party shall submit the proposed
license agreement to the JSC for approval. If the JSC approves the proposed
license agreement, the Licensing Party shall enter into such license agreement
and shall pay the Third Party License Fees due thereunder, subject to
reimbursement in accordance with Section 4.6(e) or as part of Reimbursable
Commercial Costs under Section 6.2. Any agreement entered into pursuant to this
Section 11.9(a) and any Elan In-License or other agreements between a Party and
any Third Party existing as of the Effective Date and relating to Elan Patents,

                                       62
<PAGE>

Elan Know-how, Biogen Patents or Biogen Know-how, shall not be amended without
prior written consent of the JSC.

               (b) Failure To Obtain License. If, within one hundred eighty
(180) days after a Licensing Party has been instructed by the Joint Project Team
or the Joint Commercialization Team, pursuant to Section 11.9(a), to attempt to
enter into a license agreement with respect to Blocking Third Party Intellectual
Property or Enhancing Third Party Intellectual Property, as the case may be, it
is determined by the JSC that no license is obtainable on commercially
reasonably terms despite a good faith attempt by such Licensing Party to obtain
such license, then (a) neither Party shall practice the Third Party intellectual
property that was the subject of the proposed license agreement and (b) in the
case of Blocking Third Party Intellectual Property only, neither Party shall
proceed with the Development, Manufacture and/or Commercialization of any
Licensed Product, as the case may be, to the extent doing so would infringe such
Blocking Third Party Intellectual Property.

               (c) Failure To Reach Agreement. If the JPC is unable to reach a
determination under Section 11.9(a) with respect to whether Third Party
intellectual property constitutes Blocking Third Party Intellectual Property or
Enhancing Third Party Intellectual Property, as the case may be, then such issue
shall be presented to the JSC for determination. If the JSC is unable to resolve
such issue, or is unable to reach a determination under Section 11.9(a) or this
Section 11.9(c) with respect to any issue relating to a proposed license
agreement, then such issue shall be evaluated in accordance with the procedures
set forth in Article 16. If such issue cannot be resolved pursuant to Article
16, then (a) neither Party shall enter into a license agreement with respect to,
nor practice, the Third Party intellectual property that is the subject of the
unresolved dispute and (b) in the case of Blocking Third Party Intellectual
Property only, neither Party shall proceed with the Development, Manufacture
and/or Commercialization of a Licensed Product, as the case may be, to the
extent that at least one of the Parties believes such activities would infringe
such Blocking Third Party Intellectual Property.

                                  ARTICLE 12.
                         REPRESENTATIONS AND WARRANTIES

     12.1 REPRESENTATIONS AND WARRANTIES. Each of the Parties hereby represents
and warrants as of the Effective Date as follows:

         (a) This Agreement is a legal and valid obligation binding upon such
     Party and enforceable in accordance with its terms. The execution, delivery
     and performance of the Agreement by such Party does not conflict with any
     agreement, instrument or understanding, oral or written, to which it is a
     party or by which it is bound, nor violate any law or regulation of any
     court, governmental body or administrative or other agency having
     jurisdiction over it.

         (b) Such Party has not, and during the Term of the Agreement will not,
     grant any rights to any Third Party which would conflict with the rights
     granted to the other Party hereunder.

                                       63
<PAGE>

         (c) That such Party has the right to grant the licenses granted herein.

         (d) It has no knowledge of any communication from a Third Party
     alleging that the Development, manufacture or Commercialization of Licensed
     Products has violated or would violate any of the intellectual property
     rights owned or controlled by such Third Party.

         (e) All of its employees and officers have executed agreements
     requiring assignment to the Party of all inventions made during the course
     of and as a result of their association with such Party and obligating the
     individual to maintain as confidential the confidential information of such
     Party.

         (f) To its knowledge, none of the data or information given to the
     other Party regarding Antegren is untrue or inaccurate. To its knowledge,
     there is no other data or information necessary to make the data and
     information provided to the other Party regarding Antegren complete and not
     misleading.

         (g) To its knowledge, there are no third party patents that would be or
     might be infringed by the Development, manufacture, use or sale of Licensed
     Product other than those that have been brought to the attention of the
     other Party.

     12.2 ELAN REPRESENTATION REGARDING LONZA. Elan represents and warrants that
the copy of the Lonza Supply Agreement, as amended through Amendment 17,
supplied to Biogen is a true and accurate copy of the sole agreement in effect
between Elan and Lonza related to Licensed Product as of the Effective Date,
other than the letter agreement described in Section 7.1 and its attachments.

                                   ARTICLE 13.
                 INFORMATION AND ADVERSE DRUG EVENTS AND REPORTS

     13.1 INFORMATION. Biogen and Elan will disclose and make available to each
other in a timely manner all preclinical, clinical, regulatory, commercial and
other information concerning Licensed Products and constituting Know-how,
including, without limitation, all Know-how relevant to the joint promotion of
Licensed Products, known by Biogen or Elan at any time during the Term of this
Agreement. Each Party will use Commercially Reasonable and Diligent Efforts to
disclose to the other Party all significant information directly related to
Licensed Products promptly after it is learned or its significance is
appreciated. Notwithstanding the foregoing, neither Party shall be obligated to
disclose to the other Party confidential information about its products other
than Licensed Product.

     13.2 COMPLAINTS. Each Party shall maintain a record of all non-medical and
medical product-related complaints it receives with respect to any Licensed
Product. Each Party shall notify the other Party of any complaint received by it
in sufficient detail and in accordance with the timeframes and procedures for
reporting established by the Joint Project Team and the Joint Commercialization
Team, and in any event in sufficient time to allow the Party that holds the
applicable regulatory filing to comply with any and

                                       64
<PAGE>

all regulatory requirements imposed upon it in any country. The Party that holds
the applicable regulatory filing in a particular country shall investigate and
respond to all such complaints in such country with respect to any Licensed
Product as soon as reasonably practicable. All such responses shall be made in
accordance with the procedures established by the Joint Project Team and the
Joint Commercialization Team. The Party responsible for responding to such
complaint shall promptly provide the other Party a copy of any such response.

     13.3 ADVERSE DRUG EVENTS. Each Party will be responsible for the safety
surveillance and pharmacovigilance regulatory obligations with respect to the
Licensed Product in those territories where it is the sponsor of non-clinical or
clinical development, including but not limited to animal toxicology or
pharmacology studies, or where it is the license holder of the Licensed
Product's Regulatory Approval. Each Party shall provide to the responsible Party
under this Section with data on all adverse drug experience reports related to
Licensed Product in each case in accordance with procedures established by the
Joint Project Team or the Joint Commercialization Team or pursuant to an adverse
event reporting agreement entered into by the Parties. Elan and Biogen agree to
fulfill all their safety surveillance and pharmacovigilance regulatory
obligations with respect to the Licensed Product. Where a joint venture entity
is created by the Parties to be the license holder of the Licensed Product's
Regulatory Approval, the joint venture shall designate one of the Parties to
coordinate safety surveillance and pharmacovigilance activities. The Parties
agree that the groups responsible for the safety surveillance and
pharmacovigilance of the Licensed Product at each company shall meet within
sixty (60) days following the Effective Date to develop detailed procedures
regarding the format, timing, and content of the safety information to be
exchanged between the Parties, and shall meet periodically thereafter to update
the procedures.

                                  ARTICLE 14.
                              TERM AND TERMINATION

     14.1 Term and Purchase Terms Upon Expiration.

               (A) TERM. This Agreement shall commence as of the Effective Date.
Unless sooner terminated as provided in this Article 14 and except as provided
in Sections 14.1(b) and 14.7 below, the remaining provisions of this Agreement
relating to activities in the Territory shall continue in effect until *** after
the date of the First Commercial Sale of a Licensed Product in a Major Market
Country (the "Term").

               (B) PURCHASE TERMS UPON EXPIRATION.

         (I) Except as otherwise specified herein in the case of early
     termination of this Agreement, upon the expiration of the Term of this
     Agreement, either Party may propose that it purchase the other Party's
     interest in

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

                                       65
<PAGE>

     this Agreement *** . Notice of a Party's desire to purchase the other
     Party's interest shall be given to the non-purchasing Party at least
     eighteen (18) months prior to the end of the Term. *** APPROXIMATELY 16
     LINES OMITTED *** A closing on the purchase of the interest of one Party by
     the other Party shall take place upon expiration of the Term of this
     Agreement. If neither Party desires to purchase the other Party's interest,
     the Parties shall agree to extend this Agreement, including this provision,
     for a mutually agreed upon additional term.

         (II) In the event of a purchase under this Section (b) the following
     shall apply: (i) the non-purchasing Party shall have no further rights
     under the licenses provided to it under Article 8, (ii) the non-purchasing
     Party shall assign to the purchasing Party the non-purchasing Party's
     rights and obligations under any then existing licenses to Blocking Third
     Party Intellectual Property and Enhancing Third Party Intellectual Party
     for Licensed Products, (iii) the non-purchasing Party shall be deemed to
     have granted to the purchasing Party an exclusive worldwide license, with
     the right to grant sublicenses, under the non-purchasing Party's rights and
     interests in all Elan Patents and Elan Know-how (in the case of purchase by
     Biogen) or Biogen Patents and Biogen Know-how (in the case of purchase by
     Elan) solely to develop, use, make, have made, sell, have sold and import
     Licensed Products in the Field in the Territory. The non-purchasing Party
     shall retain all rights and interest in its own Patents and Know-how with
     respect to all products other than Licensed Products. In the event of a
     purchase under this paragraph (b), the non-purchasing Party shall, at the
     expense of the purchasing Party, transfer to the other Party ownership of
     any regulatory submissions (including, without limitation, all Clinical
     Trial Applications and Drug Approval Applications) and Regulatory Approvals
     then in its name for all Licensed Product, and shall notify the appropriate
     Regulatory Authorities and take any other action reasonably necessary to
     effect such transfer of ownership. If ownership of a regulatory submission
     or Regulatory Approval cannot be transferred to the purchasing Party in any
     country, the non-purchasing Party shall grant to the purchasing Party a
     permanent, exclusive and irrevocable right of access and reference to such
     regulatory submissions and Regulatory Approvals for Licensed Product in
     such country. If such right of access and reference is not sufficient to
     permit the purchasing Party to develop, make, market, use or sell Licensed
     Product, the non-purchasing Party shall provide the purchasing Party with
     the complete data package that the non-purchasing Party used in regulatory
     submissions in such country in order to allow the purchasing Party to
     receive Regulatory Approval in its own name. In the event of a purchase
     under this Section, the non-purchasing Party shall assign to the purchasing
     Party, at the expense of the purchasing Party, all of non-purchasing
     Party's right, title and interest in the Antegren Trademark and any Product
     Trademarks owned by non-purchasing Party, subject to the terms and
     conditions in Section 9.4 above.

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

                                       66
<PAGE>

     14.2 Voluntary Termination by Either Party.

               (a) So long as such Party is not in breach of its obligations
hereunder, either Party shall have the right to terminate this Agreement upon
providing at least sixty (60) days' prior written notice to the other Party. In
the event of termination under this Section 14.2, the following shall apply: (i)
the terminating Party shall have no further rights under the licenses provided
to it under Article 8, (ii) the terminating Party shall assign to the
non-terminating Party the terminating Party's rights and obligations under any
then existing licenses to Blocking Third Party Intellectual Property and
Enhancing Third Party Intellectual Party for Licensed Products, (iii) the
terminating Party shall be deemed to have granted to the non-terminating Party
an exclusive worldwide license, with the right to grant sublicenses, under the
terminating Party's rights and interests in all Elan Patents and Elan Know-how
(in the case of termination by Elan) or Biogen Patents and Biogen Know-how (in
the case of termination by Biogen) solely to develop, use, make, have made,
market, sell, have sold and import Licensed Products in the Field in the
Territory. The terminating Party shall retain all rights and interest in its own
Patents and Know-how with respect to all products other than Licensed Products.
A termination under this Section shall not relieve the terminating Party of any
of its obligations to share in the Development Costs scheduled to be paid
(meaning current obligations have been incurred and amounts are to be actually
paid in the period) prior to the effective date of such termination under the
then current Annual Workplan/Budget. In the event of termination under this
Section, the terminating Party shall, at its cost, transfer to the other Party
ownership of any regulatory submissions (including, without limitation, all
Clinical Trial Application's and Drug Approval Applications) and Regulatory
Approvals then in its name for all Licensed Product, and shall notify the
appropriate Regulatory Authorities and take any other action reasonably
necessary to effect such transfer of ownership. If ownership of a regulatory
submission or Regulatory Approval cannot be transferred to the non-terminating
Party in any country, the terminating Party shall grant to the non-terminating
Party a permanent, exclusive and irrevocable right of access and reference to
such regulatory submissions and Regulatory Approvals for Licensed Product in
such country. If such right of access and reference is not sufficient to permit
the non-terminating Party to file a Drug Approval Application and receive
Regulatory Approval or to develop, make, market, use or sell Licensed Product,
the terminating Party shall provide the non-terminating Party with the complete
data package that the terminating Party used in regulatory submissions in such
country in order to allow the non-terminating Party to file such Drug Approval
Applications and receive Regulatory Approval in its own name. In the event that
Biogen terminates this Agreement pursuant to this Section 14.2(a), Biogen shall
assign to Elan, without cost to Elan, all of Biogen's right, title and interest
in the Product Trademarks owned by Biogen, subject to the terms and conditions
in Section 9.4 above. In the event that Elan terminates this Agreement pursuant
to this Section 14.2(a), Elan shall assign to Biogen, without cost to Biogen,
all of Elan's right, title and interest in the Antegren Trademark and other
Product Trademarks owned by Elan, subject to the terms and conditions in Section
9.4 above.

               (b) In the event of termination of this Agreement by Biogen under
this Section 14.2, the royalty payment obligations of Elan, shall be as follows:

                                       67
<PAGE>

         (III) If Biogen terminates this Agreement prior to the date of
     enrollment of the first patient in the first Phase III Clinical Trial for a
     chronic indication, Elan shall pay to Biogen a royalty of ***

         (IV) If Biogen terminates this Agreement on or after the date set forth
     in Section 14.2(b)(i) above, but before the date of the First Commercial
     Sale of a Licensed Product in a Major Market Country after a Regulatory
     Approval of the use of a Licensed Product in a chronic indication, Elan
     shall pay to Biogen a royalty of ***

         (V) If Biogen terminates this Agreement on or after the date of the
     First Commercial Sale of a Licensed Product in a Major Market Country after
     a Regulatory Approval of the use of a Licensed Product in a chronic
     indication, Elan shall pay to Biogen a royalty of ***

               (c) In the event of termination of this Agreement by Elan under
this Section 14.2, the royalty payment obligations of Biogen, shall be as
follows:

         (I) If Elan terminates this Agreement prior to the date of enrollment
     of the first patient in the first Phase III Clinical Trial for a chronic
     indication, Biogen shall pay to Elan a royalty of ***

         (II) If Elan terminates this Agreement on or after the date set forth
     in Section 14.2(c)(i) above, but before the First Commercial Sale of a
     Licensed Product in a Major Market Country after a Regulatory Approval of
     the use of a Licensed Product in a chronic indication, Biogen shall pay to
     Elan a royalty of ***

         (III) If Elan terminates this Agreement on or after the date of the
     First Commercial Sale of a Licensed Product in a Major Market Country after
     a Regulatory Approval of the use of a Licensed Product in a chronic
     indication, Biogen shall pay to Elan ***

               (d) Prior to the effective date of such termination by one Party
pursuant to this Section 14.3, the Parties shall enter into a definitive license
agreement ("License Agreement") granting to the non-terminating Party (the
"Licensing Party") an exclusive, worldwide, sublicensable license under all the
terminating Party's rights and interests in Elan Patents and Elan Know-how (in
the case of termination by Elan) and Biogen Patents and Biogen Know-how (in the
case of termination by Elan) to develop, make, have made, use, market,
distribute, import, offer for sale, sell and have sold Licensed Product in the
Field, in consideration of the non-terminating Party paying royalties on
Royalty-Bearing Sales of Licensed Product sold by the non-terminating Party and
its Affiliates and sublicensees, at the royalty rate applicable under Section
14.2(a) or 14.2(b) above. Such License Agreement shall contain all of the
provisions described in

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

                                       68
<PAGE>

this Section 14.2, the terms described in Section 14.3 below, the definitions
set forth in this Agreement above with respect to Royalty-Bearing Sales and the
other defined terms, and such other terms and conditions that are customary for
similar types of transactions.

               (e) In the event that Biogen terminates this Agreement prior to
initiation of the first Phase III Clinical Trial of Licensed Product, Biogen's
sole obligation with respect to manufacture and supply of Licensed Product under
this Agreement and the Clinical Supply Agreement shall be *** In the event of
termination by either Party pursuant to this Section 14.2 after initiation of
the first Phase III Clinical Trial, in addition to the obligations specified
under paragraph (a) above, the terminating Party shall *** , in order to allow
the other Party to find an alternate source of supply. The sole and exclusive
amount to be paid by the non-terminating Party for supplies of Licensed Product
under the preceding sentence during the period after termination shall be as
follows:

     Period following termination                     Amount to be Paid
     ----------------------------                     -----------------
     Up to      ***                                         ***
                ***    months                               ***

                ***    to     ***                           ***

               months

                ***    to     ***                           ***

              months

                ***    to                                   ***
                ***    months

     In the event the terminating Party is obligated to continue to supply
Licensed Product under this Agreement, the other Party shall use Reasonable
Commercial and Diligent Efforts to identify one or more viable suppliers *** of
termination and to transfer manufacturing operations as soon as commercially
reasonable within the aforementioned *** time frame.

     In addition to the foregoing obligations, the terminating Party agrees to
(i) make its personnel and other resources reasonably available to the other
Party as necessary to effect an orderly transition of manufacturing, Development
and/or Commercialization responsibilities, with the fully-loaded cost of such
personnel and resources to be borne by the non-terminating Party after the
effective date of termination; (ii) for a reasonable period of time *** continue
to assist in a transition of responsibilities to the non-terminating party; and
(iii) transfer copies of all relevant information, files or data

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

                                       69
<PAGE>

containing Know-how to the non-terminating party. Notwithstanding anything in
the foregoing to the contrary, if the terminating Party is the supplying Party,
the terminating Party will agree to perform technology transfer activities for a
period of up to *** following execution by the non-terminating Party of an
agreement with a new supplier, subject to the payment of costs as set forth in
the preceding sentence.

               (f) Upon any termination under this Section 14.2, the Parties
shall have no further rights or obligations under this Agreement except as set
forth in this Section 14.2 and in Sections 14.3, 14.9 and 14.10.

     14.3 Termination License Agreement Provisions.

     The License Agreement to be entered into between the Parties pursuant to
Section 14.2 above or Sections 5.8 or 14.6 below shall contain the following
terms and conditions in addition to those customary in license agreements in the
biotechnology industry:

         (a) Date of Sale. The sales of Licensed Products shall be deemed to
     occur on the earlier of: (i) the date the Licensed Product is shipped; or
     (ii) the date of the invoice to the purchaser of the Licensed Product.

         (b) Royalties. Royalties shall be paid on Royalty-Bearing Sales of
     those Licensed Product sold by the licensee Party, its Affiliates and
     sublicensees in each calendar quarter and which (i) incorporate Know-how of
     the Party granting the license or (ii) the manufacture, use, offer for
     sale, sale or importation of which would, but for the licenses granted
     herein, infringe a valid claim of an issued patent within any Patents owned
     or controlled by the Party granting such royalty-bearing license hereunder.

         (c) One Royalty. The obligation to pay royalties under the License
     Agreement shall be imposed only once with respect to the same unit of
     Licensed Product, at the highest royalty rate applicable, regardless of the
     number of patents and patent applications pertaining thereto.

         (d) Royalty Payments. Royalty payments shall be made to the licensor
     Party or its designee quarterly within forty-five (45) days following the
     end of each calendar quarter for which royalties are due. Each royalty
     payment shall be accompanied by a report, described in subsection (j)
     below, summarizing the Royalty-Bearing Sales during the relevant calendar
     quarter. All royalty payments not made when due shall bear interest,
     calculated from the date such payment was due, at the rate of two percent
     (2%) over the prime rate of interest as published in the weekly Federal
     Reserve H.15 Bulletin, or any successor bulletin thereto.

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

                                       70
<PAGE>

         (e) Term of Royalty Obligations. The licensee Party shall pay royalties
     to the licensor Party hereunder as to each Licensed Product in each country
     worldwide for the later of: (i) the expiration of the last to expire of any
     issued Patent owned or controlled by the licensor Party that covers such
     Licensed Product in such country or in the country of manufacture; or (ii)
     *** from the date of First Commercial Sale of such Licensed Product in such
     country following Regulatory Approval. Upon expiration of the royalty term
     for a Licensed Product in a country as described above, the licensee Party
     shall thereafter have an exclusive, paid-up irrevocable license to make,
     have made, use, market, sell, offer for sale, have sold and import such
     Licensed Product in that country.

         (f) Mode of Payment. All payments due shall be made in U.S. dollars via
     wire transfer of immediately available funds, or by such other commercially
     reasonable means as may be designated by the licensor Party, and shall be
     made where directed by the licensor Party from time to time. Royalty
     payments due on Royalty-Bearing Sales in countries or jurisdictions outside
     the U.S. shall be made in U.S. dollars, after being converted by the
     licensee Party into U.S. dollars at the rate of exchange for such country's
     or jurisdiction's currency in U.S. dollars as listed in The Wall Street
     Journal on the last business day of the calendar quarter in which such
     sales were made.

         (g) Taxes. If laws, rules or regulations require withholding of income
     taxes or other taxes imposed upon payments made to the licensor Party, the
     licensee Party shall make such withholding payments as required and
     subtract such withholding payments from the payments otherwise to be paid.

         (h) Blocked Currency. In each country where the local currency is
     blocked and cannot be removed from the country, royalties shall continue to
     be accrued in such country and Royalty-Bearing Sales in such country shall
     continue to be reported, but such royalties will not be paid until they may
     be removed from the country or at licensor Party's request, shall be paid
     in the local currency into a local bank designated by the licensor Party
     for the account of the licensor Party. If such royalties are accrued, then
     at such time as the licensee Party is able to remove currency from such
     country it shall also remove and pay the royalties accrued on the licensor
     Party's behalf.

         (i) Records. Any Party making royalty payments under the License
     Agreement, and its Affiliates and sublicensees, shall keep full, true and
     accurate books of account containing all particulars which may be necessary
     for the purpose of showing Royalty-Bearing Sales. Such books of account
     shall be kept at the principal place of business of such Party, its
     Affiliates or sublicensees, as the case may be. Such books and the
     supporting data shall be open at all reasonable times, for three (3)
     calendar years following the end of the calendar

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

                                       71
<PAGE>

     year to which they pertain, to the inspection of an independent public
     accountant selected by the reviewing Party and reasonably acceptable to the
     other Party for the purpose of verifying Royalty-Bearing Sales under the
     License Agreement, subject to the provisions of subsection (k) below.

         (j) Reports. Along with the royalty payments due under the License
     Agreement, a Party making royalty payments hereunder shall deliver to the
     receiving Party a true and accurate report, which sets forth such
     particulars of the business conducted by the paying Party, its Affiliates
     and sublicensees during such preceding calendar quarter as are pertinent to
     an accounting for Royalty-Bearing Sales and deductible expenses. Such
     reports shall include at least the following: (i) the total gross sales of
     Licensed Products occurring during that calendar quarter, (ii) the
     allowable deductions therefrom, (iii) the total Royalty-Bearing Sales of
     Licensed Products occurring during that calendar quarter and (iv) the
     calculation of royalties, if any, due thereon pursuant to the License
     Agreement.

         (k) Auditing. At the request and expense of a Party receiving payments
     under the License Agreement, the other Party (and its Affiliates and
     sublicensees) shall permit an independent certified public accountant
     selected by the reviewing Party and reasonably acceptable to the Party
     being reviewed, to examine, not more than once in any four (4) consecutive
     calendar quarters during the term of the License Agreement, but including
     one post-termination audit, such books of account and records under
     subsection (i) above as may be necessary to: (i) determine the correctness
     of any report or payment made under the License Agreement; or (ii) obtain
     information as to any payment or reimbursement due for any relevant period
     in the case of the paying Party's failure to report, pay or reimburse
     pursuant to the License Agreement. Any such accountant shall enter into a
     confidentiality agreement with both Parties substantially similar to the
     confidentiality provisions of this Agreement limiting the disclosure and
     use of such information to the purposes germane to this subsection (k).
     Such examination shall be made at reasonable times during regular business
     hours and upon at least twenty (20) business days' prior notice. If such
     accountant reasonably determines that the royalties payable under the
     License Agreement have been, for any calendar year in total, understated by
     the paying Party, such paying Party shall immediately pay all understated
     royalties, together with interest on such royalties from the date accrued
     at a rate of two percent (2%) over the prime rate of interest as published
     in the weekly Federal Reserve H.15 Bulletin, or any successor bulletin
     thereto, and shall pay the reasonable costs of the examination if such
     paying Party has understated such royalties by more than the greater of
         ***    .

         (l) Payments to or Reports by Affiliates and Sublicensees. Any payment
     required under any provision of the License Agreement to be made

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

                                       72
<PAGE>

     to either Party or any report required to be made by any Party shall be
     made to or by an Affiliate or sublicensee of that Party if designated by
     that Party as the appropriate recipient or reporting entity.

     14.4 Termination for Breach.

               (a) Material Breach. If either Party materially breaches this
Agreement at any time, which breach is not cured within sixty (60) days of
written notice thereof from the non-breaching Party (or if such breach is not
susceptible of cure within such period, the breaching Party is not making
diligent good faith efforts to cure such breach), the non-breaching Party shall
have the right to terminate this Agreement. Upon such termination, the Parties
shall have no further rights or obligations under this Agreement except as set
forth in Sections 14.4(b), 14.5, 14.9 and 14.10 below. The Parties acknowledge
and agree that failure to exercise any right or option with respect to any
Licensed Product or to take any action expressly within the discretion of a
Party shall not be deemed to be material breach hereunder.

               (b) Breaching Party Obligations. In the event of termination by a
Party due to material breach by the other Party, in addition to the obligations
specified in Section 14.6(a), the breaching Party shall: (i) remain responsible
for its share of Development Costs scheduled to be paid (meaning current
obligations have been incurred and amounts are to be actually paid in the
period) during the period ending *** following termination under the Annual
Workplan/Budget in effect on the effective date of termination, (ii) make its
personnel and other resources reasonably available to the other Party as
necessary to effect an orderly transition of Development and/or
Commercialization responsibilities, with the reasonable cost of such personnel
and resources to be borne by the non-breaching Party after the effective date of
termination; (iii) for a reasonable period of time *** , assist in the
transition of responsibilities to the non-breaching Party; and (iv) transfer all
relevant information, files or data to the non-breaching Party. Notwithstanding
anything in the foregoing to the contrary, if the breaching Party is the
supplying Party, the breaching Party will agree to perform technology transfer
activities for a period of up to *** following execution by the non-breaching
Party of an agreement with a new supplier, subject to the payment of costs as
set forth in the preceding sentence. In the event that Elan terminates this
Agreement as a result of breach by Biogen prior to initiation of the first Phase
III Clinical Trial of Licensed Product, Biogen's sole obligation with respect to
manufacture and supply of Licensed Product under this Agreement and the Clinical
Supply Agreement shall be to *** . In the event of termination by either Party
pursuant to this Section 14.4 after initiation of the first Phase III Clinical
Trial, in addition to the obligations specified under paragraph (a) above, the
breaching Party shall remain responsible for supplying the amounts of Antegren
or, as applicable, other Licensed Product, it was obligated to supply at the
time of such termination (consistent with then current forecasts) for a
reasonable period of time, *** in order to allow the other Party to find an
alternate source of supply. The sole and exclusive amount to be

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

                                       73
<PAGE>

paid by the non-breaching Party for supplies of Licensed Product under the
preceding sentence during the period after termination shall be as follows:

     Period following termination                     Amount to be Paid
     ----------------------------                     -----------------
     Up to      ***           months                       ***
                ***           months                       ***
                ***           months                       ***

         In the event the breaching Party is obligated to continue to supply
Licensed Product under this Agreement, the other Party shall use Reasonable
Commerical and Diligent Efforts to identify one or more viable suppliers *** of
termination and to transfer manufacturing operations as soon as commercially
reasonable within the aforementioned *** time frame.

     14.5 Effect of Termination for Breach.

               (a) If either Party terminates this Agreement pursuant to Section
14.4 above the following shall apply: (i) the breaching Party shall have no
further rights under the licenses granted to it under Article 8; (ii) the
breaching Party shall assign to the non-breaching Party the breaching Party's
rights and obligations under any then existing licenses to Blocking Third Party
Intellectual Property and Enhancing Third Party Intellectual Property for
Licensed Products; and (iii) the breaching Party shall be deemed to have granted
to the non-breaching Party an exclusive, sublicensable, license in the Territory
under the Elan Patents and Elan Know-how (where Elan is the breaching Party) and
the Biogen Patents and Biogen Know-how (where Biogen is the breaching Party) to
develop, make, have made, use, market, sell, offer for sale, have sold or import
Licensed Products in the Field in the Territory. In the event of termination
under this Section, the breaching Party shall, at its cost, transfer to the
non-breaching Party ownership of any regulatory submissions related to Licensed
Product (including, without limitation, all Clinical Trial Applications and Drug
Approval Applications) and Regulatory Approvals then in its name to the
non-breaching Party, and shall notify the appropriate Regulatory Authorities and
take any other action reasonably necessary to effect such transfer of ownership.
If ownership of a regulatory submission or Regulatory Approval cannot be
transferred to the non-breaching Party in any country, the breaching Party shall
grant to the non-breaching Party a permanent, exclusive and irrevocable right of
access and reference to such regulatory submission and Regulatory Approvals for
Licensed Product in such country. If such right of access and reference is not
sufficient to permit the non-breaching Party to file a Drug Approval Application
and receive Regulatory Approval or to develop, make, market, use or sell
Licensed Product, the breaching Party shall provide

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

                                       74
<PAGE>

the non-breaching Party with the complete data package that the breaching Party
used in regulatory submissions in such country in order to allow the
non-breaching Party to file such Drug Approval Applications and to receive
Regulatory Approval in its own name. If the non-breaching Party sells a Licensed
Product under the license granted in this Section 14.5 that would, but for the
license granted herein, infringe a claim of the Patents of the breaching Party,
the non-breaching Party shall pay to the breaching Party a royalty equal to ***
the applicable royalty determined by reference to Section 14.2(b) or (c) as if
the breaching Party had terminated this Agreement under the terms of a License
Agreement to be entered into between the Parties consistent with Section
14.2(d).

               (b) If this Agreement terminates pursuant to Section 14.4, the
breaching Party shall assign to the non-breaching Party all of its right, title
and interest in the Antegren Trademark and the other Product Trademarks.

     14.6 BANKRUPTCY. Either Party may, in addition to any other remedies
available to it by law or in equity, terminate this Agreement by written notice
to the other Party in the event the other Party shall have become bankrupt, or
shall have made an assignment for the benefit of its creditors or there shall
have been appointed a trustee or receiver of the other Party or for all or a
substantial part of its property or any case or proceeding shall have been
commenced or other action taken by or against the other Party in bankruptcy or
seeking reorganization, liquidation, dissolution, winding-up, arrangement,
composition or readjustment of its debts or any other relief under any
bankruptcy, insolvency, reorganization or other similar act or law of any
jurisdiction now or hereafter in effect and any such event shall have continued
for sixty (60) days undismissed, unbonded and undischarged. All rights and
licenses granted under to this Agreement by one Party to the other Party are,
and shall otherwise be deemed to be, for purposes of Section 365(n) of the
Bankruptcy Code, licenses of rights to "intellectual property" as defined under
Section 101 (56) of the Bankruptcy Code. The Parties agree that the licensing
Party under this Agreement shall retain and may fully exercise all of its rights
and elections under the Bankruptcy Code in the event of a bankruptcy by the
other Party as if the other Party were the terminating Party under Section 14.2.
The Parties further agree that in the event of the commencement of a bankruptcy
proceeding by or against one Party under the Bankruptcy Code, the other Party
shall be entitled to complete access to any such intellectual property
pertaining to the rights granted in the licenses hereunder of the Party by or
against whom a bankruptcy proceeding has been commenced and all embodiments of
such intellectual property.

     14.7 Provisions For Change Of Control.

               (a) Change Of Control Notice. A Party subject to a Change of
Control (the "Acquired Party") shall provide, where possible, written notice to
the other Party (the "Non-Acquired Party") at least sixty (60) days prior to the
Change of Control or, if earlier, as soon as the impending Change of Control can
be disclosed to the Non-

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

                                       75
<PAGE>

Acquired Party. Within fifteen (15) days of the receipt of a written notice
pursuant to this Section 14.7(a), the Chief Executive Officer of each Party
shall meet to discuss the impact of any proposed Change of Control upon the
collaboration and the commercial value of the Licensed Products and to discuss
the possible nature of the relationship with the combined entity.

               (b) Certain Acquisition Rights Upon Change Of Control. In the
event of a Change of Control, the Non-Acquired Party shall have the right,
exercisable in accordance with this Section, to purchase the interest of the
Acquired Party under this Agreement. Within thirty (30) days after receipt of
the written notice required pursuant to Section 14.7(a), the Non-Acquired Party
must give written notice to the Acquired Party of its own election to either (i)
continue it obligations under this Agreement after the Change of Control or (ii)
exercise its right to purchase the interest of the Acquired Party after the
Change of Control. In determining whether to exercise its option to purchase the
Acquired Party's interest in this Agreement, among other matters selected in its
sole discretion, the non-Acquired Party shall consider any proposed post-Change
of Control strategies and plans, commitments or guarantees respecting the
Licensed Product presented by the Acquired Party. Notwithstanding the foregoing,
the ultimate decision of whether to exercise its right under this Section will
be at the sole discretion of the non-Acquired Party. In the event the
Non-Acquired Party exercises its election to purchase the interest of the
Acquired Party under this Agreement, the Parties shall *** APPROXIMATELY 15
LINES OMITTED ***

               (c) *** APPROXIMATELY 21 LINES omitted ***

               (d) Closing. Closing on the sale of Party's interest under this
section shall take place within thirty (30) days of the determination under this
Section as to the price and which Party will be the purchaser.

               (e) Rights and Obligations. The rights and obligations of each
Party in the event of a purchase of a Party's interest under this Section shall
be those specified under Section 14.1(b)(ii).

               (f) Confirmation. Within thirty (30) days after receipt of notice
from the Non-Acquired Party of its interest to continue under the Agreement
after a Change of Control, the Acquired Party shall provide to the Non-Acquired
Party written confirmation reasonably satisfactory to the Non-Acquired Party to
the effect that after such Change of Control, the Acquired Party will continue
to meet its obligations under this Agreement and will commit to maintain
sufficient resources in performing work under this Agreement consistent with the
terms of this Agreement and the then current Development Plan, Annual
Workplan/Budget or Commercialization Plan, and Annual Commercialization
Plan/Budget, as applicable.

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

                                       76
<PAGE>

     14.8 DISPOSITION UPON DIVESTITURE. If any governmental agency requires
either Party (the "Divesting Party") (including, but not limited to pursuant to
a consent decree) to divest its interest to any Licensed Products or this
Agreement (the "Divested Asset(s)"), the Divesting Party shall provide written
notice of such a requirement to the other Party within thirty (30) days of its
first notice of such a condition that has been made final. The other Party shall
have the right to purchase the Divesting Party's interest in the Divested
Asset(s) for fair consideration. *** APPROXIMATELY 13 LINES OMITTED *** The
rights and obligations of each Party in the event of a purchase of a Party's
interest under this Section shall be those specified under Section 14.1(b)(ii).

     14.9 SURVIVING RIGHTS. Except as modified above in Sections 14.1 (b), 14.2,
5.8, 14.4, 14.5 and 14.7, the obligations and rights of the Parties under
Articles 10, 12, and 15 and Sections 8.6, 11.1, 11.2, 11.3, 11.4, and 14.10 of
this Agreement will survive termination or expiration of this Agreement (in the
case of Article 10 for the periods set forth therein).

     14.10 ACCRUED RIGHTS, SURVIVING OBLIGATIONS. Expiration or termination of
this Agreement shall not relieve the Parties of any obligation accruing before
such expiration or termination. Any expiration or early termination of this
Agreement shall be without prejudice to the rights of either Party against the
other accrued or accruing under this Agreement before termination, including,
without limitation, the obligation to receive payments with respect to Licensed
Product(s) sold before such termination.

                                  ARTICLE 15.
                                 INDEMNIFICATION

     15.1 Indemnification in the Territory.

               (a) Each Party hereby agrees to save, defend and hold the other
Party and its agents and employees harmless from and against any and all losses,
damages, liabilities, settlements, penalties, fines, costs and expenses
(including, without limitation, reasonable attorneys' fees and expenses)
(collectively, the "Losses") resulting directly or indirectly from the use,
handling, storage, sale or other disposition of Licensed Products sold or used
in the Territory by the indemnifying Party, its Affiliates, agents or
sublicensees, but only to the extent such Losses *** of the indemnifying Party
or its employees and agents and do not also *** of the Party seeking
indemnification. Any other Losses resulting directly or indirectly from the
manufacture, use, handling, storage, sale or other disposition of Licensed
Products in the Territory *** at the time such claim is finally determined,
whether by judgment, award, decree or settlement.

               (b) In the event that either Party receives notice of a claim
with respect to a Licensed Product in the Territory, such Party shall inform the
other Party as

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

                                       77
<PAGE>

soon as reasonably practicable. The Parties shall confer on how to respond to
the claim and how to handle the claim in an efficient manner.

               (c) In the event that a Party is seeking indemnification under
Section 15.1 (a), it shall inform the indemnifying Party of a claim as soon as
reasonably practicable after it receives notice of the claim, shall permit the
indemnifying Party to assume direction and control of the defense of the claim
(including the right to settle the claim solely for monetary consideration),
shall cooperate as requested (at the expense of the indemnifying Party) in the
defense of the claim, and shall not settle or compromise the claim without the
express written consent of the indemnifying Party.

     15.2 INSURANCE. Beginning on the date that the first Licensed Product is
first administered in a human clinical trial in any country in the Territory,
Elan and Biogen shall each procure and maintain, at its own cost, the following
insurance coverages:

         (a) Commercial General Liability, including coverage for products and
     completed operations (maintained for a period of at least *** years after
     the expiration or termination of this Agreement) and contractual liability
     (including coverage for advertising and personal injury). The policy shall
     have a limit of no less than *** each occurrence.

         (b) Foreign Local Coverage: Where required by law, foreign local
     coverages in an amount that, at a minimum, satisfies the legal requirements
     of that jurisdiction.

         (c) Policy Conditions: All policies under (a) and (b) above shall:

         (I) be written by insurance companies with an A.M. Best's rating of
     A:VIII or higher; and

         (II) provide that coverage under such policy shall not be suspended,
     voided, canceled, non-renewed, reduced in scope or limits below *** ,
     except after thirty (30)-days written notice has been given to the other
     Party.

     Each Party shall name the other Party as an additional insured under such
coverages and shall provide to the other Party a copy of the corresponding
certificate of insurance reflecting such coverages.

                                  ARTICLE 16.
                               DISPUTE RESOLUTION

     16.1 DISPUTES. The Parties recognize that disputes as to certain matters
may from time to time arise during the Term of this Agreement which relate to
either

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

                                       78
<PAGE>

Party's rights and/or obligations hereunder. It is the objective of the Parties
to establish procedures to facilitate the resolution of disputes arising under
this Agreement in an expedient manner by mutual cooperation and without resort
to litigation. To accomplish this objective, the Parties agree to follow the
procedures set forth in this Article 16 if and when a dispute arises under this
Agreement. Unless otherwise specifically recited in this Agreement, disputes
among members of the Joint Project Team, the JCT, or the Joint Patent Committee
will be resolved by submission to the JSC. Such submission shall occur within
twenty (20) days of the date of the last meeting at which the Joint Project
Team, the JCT or the Joint Patent Committee, as the case may be, was unable to
resolve the issue. The JSC will hear the disputed matter in as timely a manner
as possible. If the JSC is unable to reach a decision, such matter shall be
referred for resolution to the Chief Executive Officer, Biogen and the Chief
Executive Officer, Elan Corporation, plc (or such other officer exercising the
duties of such office). In the event that a dispute is not resolved by the Chief
Executive Officers within thirty (30) days of being requested by a Party to
resolve the dispute and the dispute solely relates to physical product
development, process development and/or manufacturing of Licensed Product,
Biogen shall have final decision-making authority but will make such decision in
good faith and consistent with Section 7.1(f); otherwise the matter shall be
referred to mediation under Section 16.2.

     16.2 MEDIATION. If a dispute arises between the Parties, and if such
dispute cannot be resolved pursuant to Section 16.1 above, the Parties agree to
try in good faith to resolve any dispute, controversy or claim (except as to any
issue relating to intellectual property) arising out of or relating to this
Agreement, or the breach, termination, or invalidity thereof, by non-binding
mediation administered by the American Arbitration Association in accordance
with its commercial mediation rules. Unless otherwise mutually agreed upon by
the Parties, the mediation proceedings shall be conducted in New York. The
Parties agree that they shall share equally the cost of the mediation, including
filing and hearing fees, and the cost of the mediator(s). Each Party will bear
its own attorneys' fees and associated costs and expenses.

     16.3 ARBITRATION. If the Parties are unable to resolve a dispute through
mediation under Section 16.2, they shall enter into arbitration under the terms
of this Section. Within ten (10) days of delivery of notice from one Party to
the other requesting arbitration under this Section, each Party shall select one
expert in the field of drug development if the dispute relates to Development or
drug commercialization if the dispute relates to Commercialization, to serve on
an arbitration panel to decide the issue. The expert selected by a Party shall
not be a past or present employee of or consultant to such Party or of any
Affiliate of such Party. The members of the panel selected by the Parties shall,
within five (5) days of their selection, select a third member to serve on the
panel who shall not be a past or present employee of or consultant to either
Party. If the members of the panel selected by the Parties cannot, within ten
(10) days of their selection, agree on a third member, the Parties shall request
that the American Arbitration Association ("AAA") select the third member who
shall not be a past or present employee of or consultant of either Party or of
any Affiliate of either Party. Each Party shall then have fifteen (15) days to
submit to the panel and to the other Party a written response presenting such
Party's position on the issue. The panel shall, within fifteen

                                       79
<PAGE>

(15) days after receipt of both Parties responses, hold a joint meeting on the
issue at which each Party will have an opportunity to make a presentation and to
respond to the other Party's presentation. Within fifteen (15) days of the
conclusion of the meeting, the panel shall render its decision in writing. The
decision of the panel shall be binding on both Parties. Each Party shall bear
its own costs in connection with the arbitration proceedings, including the
costs of the panel member selected by it. The costs of the third panel member
will be shared equally. The arbitration shall be held in the United States and
conducted under the rules of the AAA, except as otherwise expressly provided in
this Section.

     16.4 MATTERS TO PROCEED TO COURT . Notwithstanding the foregoing, any
dispute relating to the determination of validity of a Party's Patents or other
issues relating solely to a Party's intellectual property and any dispute
asserting breach of this Agreement or of the representations and warranties made
hereunder shall be submitted exclusively to the federal court in New York, and
the Parties hereby consent to the jurisdiction and venue of such court.

                                  ARTICLE 17.
                                  MISCELLANEOUS

     17.1 ASSIGNMENT. Neither this Agreement nor any right or obligation
hereunder may be assigned or delegated, in whole or part, by either Party
without the prior express written consent of the other, except as expressly set
forth below in this Section 17.1. Notwithstanding the foregoing, either Party
may assign this Agreement and its rights and delegate its obligations hereunder
to any of its Affiliates or, with the written consent of the other Party which
such consent shall not be unreasonably withheld, to a Third Party in connection
with the transfer or sale of all or substantially all of its business relating
to the subject matter of this Agreement (provided that any such assignment to a
Third Party shall be deemed a Change in Control of the assigning Party for
purposes of Section 14).

     17.2 LEGAL COMPLIANCE. Each Party shall comply in all material respects
with all laws, rules and regulations applicable to the conduct of its business
in the Territory pursuant to this Agreement.

     17.3 RETAINED RIGHTS. Nothing in this Agreement shall limit in any respect
the right of either Party to conduct research and development with respect to,
or market, any products that do not constitute Licensed Products in or outside
the Field using such Party's own technology.

     17.4 FORCE MAJEURE. Neither Party shall lose any rights hereunder or be
liable to the other Party for damages or losses on account of failure of
performance by the defaulting Party if the failure is occasioned by government
action, war, fire, explosion, flood, strike, peril of the sea, lockout, embargo,
act of God, or any other cause beyond the control and without the fault or
negligence of the defaulting Party, provided that the Party claiming force
majeure has exerted all reasonable efforts to avoid or remedy such force
majeure; provided, however, that in no event shall a Party be required to settle
any labor

                                       80
<PAGE>

dispute or disturbance. Such excuse shall continue as long as the condition
preventing the performance continues. Upon cessation of such condition, the
affected Party shall promptly resume performance hereunder. Each Party agrees to
give the other Party prompt written notice of the occurrence of any such
condition, the nature thereof, and the extent to which the affected Party will
be unable to perform its obligations hereunder. Each Party further agrees to use
all reasonable efforts to correct the condition as quickly as possible and to
give the other Party prompt written notice when it is again fully able to
perform its obligations.

     17.5 FURTHER ACTIONS. Each Party agrees to execute, acknowledge and deliver
such further instruments, and to do all such other acts, as may be necessary or
appropriate in order to carry out the purposes and intent of this Agreement.

     17.6 NO RIGHT TO USE NAMES. Except as otherwise provided herein, no right,
express or implied, is granted by this Agreement to use in any manner the name
"Elan," "Biogen" or any other trade name or trademark of a Party or its
Affiliates in connection with the performance of this Agreement.

     17.7 NOTICES. All notices hereunder shall be in writing and shall be deemed
given if delivered personally or by facsimile transmission (receipt verified),
telexed, mailed by registered or certified mail (return receipt requested),
postage prepaid, or sent by express courier service, to the Parties at the
following addresses (or at such other address for a Party as shall be specified
by like notice; provided, that notices of a change of address shall be effective
only upon receipt thereof).

     IF TO ELAN,
     ADDRESSED TO:       ELAN PHARMA INTERNATIONAL LIMITED

                         WIL House Shannon Business Park
                         Shannon, County Clare
                         Ireland

                         Attention:      President
                         Telephone:      353-61-362-533
                         Telecopy:       353-61-362-010

                         with a copy to Elan Pharmaceuticals, Inc.
                         Attention:      President
                         Telephone:      (650) 877-0900
                         Telecopy:       (650) 553 7165

     IF TO BIOGEN,
     ADDRESSED TO:       BIOGEN INC.
                         14 Cambridge Center
                         Cambridge, MA 02142
                         Attention:      Vice President - Business and Market
                                           Development

                                       81
<PAGE>

                         Telephone:      (617) 679-2000
                         Fax:            (617) 679-2804

                         with a copy to: Vice President - General Counsel
                         Telephone:      (617) 679-2000
                         Fax:            (617) 679-2838

     17.8 WAIVER. Except as specifically provided for herein, the waiver from
time to time by either of the Parties of any of their rights or their failure to
exercise any remedy shall not operate or be construed as a continuing waiver of
the same or of any other of such Party's rights or remedies provided in this
Agreement. Except as set forth in Article 16, nothing in this Agreement shall be
construed to limit in any way either Party's rights and remedies in the event of
breach by the other Party of any term of this Agreement or the failure of any
representation or warranty by the other Party to be true and accurate when made.

     17.9 SEVERABILITY. If any term, covenant or condition of this Agreement or
the application thereof to any Party or circumstance shall, to any extent, be
held to be invalid or unenforceable, then (a) the remainder of this Agreement,
or the application of such term, covenant or condition to Parties or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby and each term, covenant or condition of this
Agreement shall be valid and be enforced to the fullest extent permitted by law;
and (b) the Parties hereto covenant and agree to renegotiate any such term,
covenant or application thereof in good faith in order to provide a reasonably
acceptable alternative to the term, covenant or condition of this Agreement or
the application thereof that is invalid or unenforceable, it being the intent of
the Parties that the basic purposes of this Agreement are to be effectuated.

     17.10 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with, the laws of the State of New York without giving effect to
principles of conflict of laws.

     17.11 AMBIGUITIES. Ambiguities, if any, in this Agreement shall not be
construed against any Party, irrespective of which Party may be deemed to have
authorized the ambiguous provision.

     17.12 HEADINGS. All headings are for reference purposes only and shall not
in any way affect the meaning or interpretation of this Agreement.

     17.13 COUNTERPARTS. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     17.14 ENTIRE AGREEMENT. This Agreement, including all Exhibits attached
hereto which are hereby incorporated herein by reference, sets forth all the
covenants, promises, agreements, warranties, representations, conditions and
understandings between the Parties hereto with respect to the subject matter
hereof and,

                                       82
<PAGE>

except as otherwise set forth herein, supersedes and terminates all prior
agreements and understandings between the Parties. There are no covenants,
promises, agreements, warranties, representations, conditions or understandings,
either oral or written, between the Parties with respect to the subject matter
hereof other than as set forth herein and therein. No subsequent alteration,
amendment, change or addition to this Agreement shall be binding upon the
Parties hereto unless reduced to writing and signed by the respective authorized
officers of the Parties.

     17.15 INDEPENDENT CONTRACTORS. Both Parties are independent contractors
under this Agreement. Nothing herein contained shall be deemed to create an
employment, agency, joint venture or partnership relationship between the
Parties or any of their agents or employees, or any other legal arrangement that
would impose liability upon one Party for the act or failure to act of the other
Party. Neither Party shall have any express or implied power to enter into any
contracts or commitments or to incur any liabilities in the name of, or on
behalf of, the other Party, or to bind the other Party in any respect
whatsoever.

                    [This space is intentionally left blank.]

                                       83
<PAGE>

     IN WITNESS WHEREOF, the Parties have executed this Agreement in duplicate
originals by their proper officers as of the date and year first above written.

ELAN PHARMA INTERNATIONAL LIMITED             BIOGEN, INC.

By: /s/ David J. Hurley                      By: /s/ James C. Mullen
   -----------------------------                -----------------------------

Name:  David J. Hurley                          Name:  James C. Mullen

Title: Director                                 Title: President and Chief
                                                       Executive Officer

                                       84
<PAGE>

EXHIBIT A

Alpha 4 Integrin

                      *** APPROXIMATELY 5 LINES OMITTED ***

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

<PAGE>

EXHIBIT B

                  FINANCIAL PLANNING, ACCOUNTING AND REPORTING
             FOR THE ELAN/BIOGEN ANTEGREN DEVELOPMENT AND MARKETING
                                  COLLABORATION
                                    AGREEMENT

     This Exhibit B to the Antegren Development and Marketing Collaboration
Agreement (the "Agreement") dated as of June 30,2000, between Elan Pharma
International Limited and Biogen, Inc. ("Biogen") covers financial planning,
accounting policies and procedures to be followed in determining Development
Costs and Reimbursable Commercial Costs as well as in determining the applicable
Transfer Price pursuant to the Agreement.

     For such purpose, this Exhibit B sets forth the principles for reporting
actual results and budgeted plans in the Territory, the frequency of reporting,
the use of a single "Functional Currency" (as defined in A.3 below) and the
methods of determining payments to the Parties, auditing of accounts and other
matters.

     This Exhibit B also provides agreed upon definitions of financial terms
applicable to the Parties for purposes of the Agreement. All capitalized terms
used herein without definition shall have the meanings ascribed thereto in the
Agreement and, where applicable, the further definitions contained herein.
References in this Exhibit B to a "Party" or "Parties" shall be construed to
mean Biogen or Elan, as the case may be, and in every case shall be deemed to
include a Party's Affiliates or permitted sublicensees under the Agreement.

     The contents of this Exhibit B are hereby incorporated into the Agreement
and are governed by the terms and conditions of the Agreement, including the
confidentiality provisions set forth therein. Notwithstanding anything in this
Agreement to the contrary, no cost, expense, amount or sum allocable or
chargeable to the Parties' activities hereunder shall be allocated or charged
more than once. Unless otherwise specifically authorized by the Parties or this
Agreement, all costs, expenses, amounts or sums to be charged or allocated by
one Party to the other Party hereunder shall not be so chargeable or allocable
unless they are both directly related to the Parties' collaboration under this
Agreement and are reasonable and customary with respect to the global
pharmaceutical industry considering the respective size and activities of the
two Parties.

A.       DEFINITIONS, REPORT AND RECONCILIATION
A.1.     DEFINITIONS

     A.1.1. "ALLOCABLE OVERHEAD" shall mean costs incurred by a Party or for its
account which are attributable to a Party's facilities and occupancy costs and
its information systems, human relations and purchasing functions and which are
allocated to company departments based on space occupied or headcount or other
activity-based method consistently applied by a Party, or a standard rate if
agreed to by the Parties. Allocable Overhead shall not include any costs
attributable to general corporate activities including, by way of example,
executive management, investor relations, business development, legal affairs
and finance.

<PAGE>

     A.1.2. "COST OF GOODS MANUFACTURED FOR SALE" shall mean a Party's costs to
produce Clinical Supplies and/or Commercial Supplies of Licensed Product to the
extent that such costs could be included as an inventory cost under U.S. GAAP
plus the Cost of Capital Charge.

     A.1.3. "COST OF CAPITAL CHARGE" shall mean a cost of capital charge
intended to allow the manufacturer to recover its cost of capital on those
capital assets (direct and indirect) used in the manufacture and production of
Licensed Product, based on percentage utilization of the facility in the
manufacture of Licensed Product, as determined under U.S. GAAP, which shall be
sufficient to provide a *** cost of capital rate of return on the gross book
value of the asset over the life of the asset, provided, however, that the base
of total capital assets on which the Cost of Capital Charge is calculated shall
not exceed *** . For purposes of this Section A. 1.3, direct assets are those
assets within and including the building where manufacturing takes place and/or
directly used in the manufacturing process. Indirect assets include those assets
used to support or facilitate manufacturing facilities, but not directly
involved in the manufacturing process.

     A.1.4. "DEVELOPMENT COSTS" shall mean the costs and expenses associated
with Development activities actually incurred by Biogen or Elan from March 1,
2000 through the later of (a) the date of the last Regulatory Approval obtained
(including thereafter costs to maintain or expand such Regulatory Approval) in
the Territory, or (b) the date of termination of Development of the final
indication for which Regulatory Approval is to be sought in the Territory,
provided that, with respect to the Initial Period, only Included Initial Period
Costs, as defined in Section 4.6(c), shall be included. The costs and expenses
associated with Development activities shall include those costs required to
obtain, maintain and/or expand the authorization and/or ability to manufacture,
formulate, fill, ship and/or sell Licensed Product in commercial quantities to
Third Parties in the Territory. "Development Costs" shall also include, but are
not limited to, costs of research or Development, including costs of studies on
the toxicological, pharmacological, metabolical or clinical aspects of a
Licensed Product conducted internally or by individual investigators or
consultants and necessary for the purpose of obtaining, maintaining and/or
expanding marketing approval of a Licensed Product, process development, process
improvement and scale-up and recovery costs (including plant costs), validation
costs, including qualification lots, the manufacture of Clinical Supplies of
Licensed Product, costs for preparing, submitting, reviewing or developing data
or information for the purpose of submission to a governmental authority to
obtain, maintain and/or expand manufacturing and/or marketing approval of a
Licensed Product and costs of marketing studies related to Licensed Product.
"Development Costs" shall also include expenses for data management, statistical
designs and studies, document preparation, and other administration expenses
associated with the clinical testing program. In determining "Development Costs"
chargeable under this Agreement, each Party will use its respective project
accounting systems, and will

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

                                       2
<PAGE>

review and approve its respective project accounting systems and methodologies
with the other Party. The Parties hereby agree that efforts of the employees of
a Party or its Affiliates in performing its activities hereunder shall be
charged as Development Costs at the applicable FTE Rate. Notwithstanding
anything in this Section A. 1.4 to the contrary, only those Development Costs
that are contemplated by the Development Plan and an Annual Workplan/Budget or
were otherwise approved by the JSC shall be chargeable by a Party as Development
Costs with any cost overruns treated in the manner set forth in Section 4.6(d)
of the Agreement. All payments made by a Party to a Third Party in connection
with the performance of its activities under the Development Plan and an Annual
Workplan/Budget shall be charged as Development Costs at such Party's actual
out-of-pocket cost. The costs of manufacturing Clinical Supplies of Licensed
Product shall be charged as Development Cost in an amount equal to *** of the
Cost of Goods Manufactured for Sale for such manufacture and supply. Except to
the extent included in Cost of Goods Manufactured for Sale under the preceding
sentence, expenses incurred by each Party for equipment, materials and supplies
utilized in performing its activities under the Development Plan and an Annual
Workplan/Budget shall not be separately charged as Developments Costs, except
for those expenses incurred by a Party, with the prior written consent of the
JSC as set forth in the Development Plan and Annual Workplan/Budget, in the
purchase or making of equipment, materials or supplies (other than common
laboratory supplies, e.g., pipettes, test tubes, petri dishes, reagents, and the
like) that are to be used exclusively in connection with the performance of such
Party's activities under a Development Plan and an Annual Workplan/Budget (e.g.,
laboratory animals, placebo supplies, etc.), which expenses shall be charged as
Developments Cost at such Party's actual out-of-pocket expense incurred in
purchasing or making such equipment, materials or supplies.

     A.1.5. "DISTRIBUTION COSTS" shall mean the FTE costs and other costs
specifically identifiable or allocable to the distribution of Licensed Product
by a Party and described in an Annual Commercialization Plan/Budget including
order entry, billing, shipping, credit and collection and other such activities
as approved by the JCT. For purposes of this definition, FTE costs shall be
charged at the applicable FTE Rate.

     A.1.6. "GROSS SALES" shall mean the gross amount invoiced by either Party
or their Affiliates or permitted sublicensees for sales of a Licensed Product to
Third Parties in the Territory, subject to adjustment under Section 1.20 with
respect to Combination Products.

     A.1.7. "MARKETING COSTS" shall mean the FTE costs and other costs of
marketing, promotion, advertising, including, without limitation, costs for
preparing and reproducing detailing aids, Licensed Product Promotional Materials
and other promotional materials, costs of professional education, product
related public relations, relationships with opinion leaders and professional
societies, market research (before and after product approval), healthcare
economics studies, Post-Approval Clinical Trials,

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

                                       3
<PAGE>

and other similar activities directly related to the Licensed Products, in each
case as approved by the JCT as part of the Commercialization Plan and an Annual
Commercialization Plan/Budget Such costs will include both internal FTE costs
and outside services and expenses (e.g., consultants, agency fees, meeting
costs, etc.). "Marketing Costs" shall also include activities related to
obtaining reimbursement from payers, costs of sales and marketing data, the
costs of manufacturing and distributing Samples to the extent a Sampling Program
has been approved by the JCT and all activities reasonably related thereto.
"Marketing Costs" will specifically exclude the costs of activities which
promote either Party's business as a whole without being product specific (such
as corporate image advertising) and costs already included as Sales Costs. For
purposes of this definition, FTE costs shall be charged at the applicable FTE
Rate.

     A.1.8. "NET SALES" shall mean Gross Sales of a Licensed Product less
applicable Sales Returns and Allowances.

     A.1.9. "ONGOING DEVELOPMENT EXPENSE" shall mean FTE costs and other costs
and expenses borne by either Party with respect to Phase IV Clinical Trials
approved by the JCT and other expenses approved by the JCT associated with
market positioning of a Licensed Product to the extent not otherwise included
within Development Costs, Marketing Costs or Sales Costs. For purposes of this
definition, FTE costs shall be charged at the applicable FTE Rate.

     A.1.10. "OTHER OUT OF POCKET COSTS" shall mean other operating expenses
paid to Third Parties which are not part of Development Costs, Distribution
Costs or other Reimbursable Commercial Costs, but are considered and approved by
the Joint Project Team, the JCT and/or JSC as expenses for purposes of the cost
sharing arrangements under the Agreement. Other Out-of-Pocket Costs shall be
limited to the following:

     -   Third Party License Fees (other than those related to the manufacture
         of Licensed Product which are to be included as part of Fully Absorbed
         Standard Costs)

     -   Patent Costs and trademark costs (as limited by Articles 9 and 11 of
         the Agreement)

     -   product liability insurance to the extent the Parties obtain a joint
         policy

     -   indemnification costs (as defined in Article 15 of the Agreement)

     -   other (to be approved by JSC)

     A.1.11. "PATENT COSTS" shall mean the fees and expenses paid to outside
legal counsel and experts, and filing and maintenance expenses, incurred after
the Effective Date, in connection with the establishment and maintenance of
Collaboration Patent Rights and under Patents covering any Licensed Product (to
the extent to be shared by the Parties under the Agreement), including, to the
extent specified in Article 11 of the Agreement, costs of patent interference,
reexamination, reissue, opposition and revocation proceedings.

                                       4
<PAGE>

     A.1.12. "PRE-MARKETING EXPENSES" shall mean FTE costs and those
out-of-pocket expenses incurred on a country-by-country basis and
region-by-region basis, by either Party, other than Development Costs, before
Regulatory Approval of Antegren or, as applicable, other Licensed Product, in
such country, directly attributable to the carrying out of such Party's
obligations under the Commercialization Plan or an Annual Commercialization
Plan/Budget, as applicable, in preparation for Commercialization in such
country. Such expenses may include, without limitation, costs incurred for
professional education, Commercialization-related public relations,
relationships with opinion leaders and professional societies, market research,
health care economics studies, amounts paid Third Parties by a Party at
reasonable rates pre-approved by the JSC, and establishment of the supply chain
for the distribution and sale in such country, each to the extent allocable to
Licensed Product and as described in the then current Commercialization Plan and
an Annual Commercialization Plan/Budget. For purposes of this definition, FTE
costs shall be charged at the applicable FTE Rate.

     A.1.13. "REIMBURSABLE COMMERCIAL COSTS" shall mean Distribution Costs,
Marketing Costs, ongoing, Development Expense, Other Out of Pocket Costs and
Sales Costs.

     A.1.14. "SALES COSTS" shall mean FTE costs and other costs approved by the
JCT as part of the Commercialization Plan and an Annual Commercialization
Plan/Budget and specifically identifiable to sales of Licensed Product in the
Territory. Sales Costs shall include costs associated with Sales Representatives
and training of the Sales Representatives, sales meetings, details, sales call
reporting, work on managed care accounts, costs related to customer service and
other sales and customer service-related expenses. Sales Costs will not include
start-up costs associated with either Party's sales force, including recruiting,
relocation and other similar costs. For purposes of this definition, FTE costs
shall be charged at the applicable FTE Rate.

     A.1.15. "SALES RETURNS AND ALLOWANCES" shall mean the sum of (a) and (b),
where: (a) is a provision, determined by a Party under U.S. GAAP for sales of
Licensed Products in the Territory for (i) trade, cash and quantity discounts on
Licensed Products (other than price discounts granted at the time of invoicing
and which are already included in the determination of Gross Sales), (ii)
credits or allowances given or made for rejection or return of, and for
uncollectible amounts on, previously sold Licensed Products or for rebates or
retroactive price reductions (including Medicare, Medicaid and similar types of
rebates and chargebacks), (iii) taxes, duties or other governmental charges
levied on or measured by the billing amount for Licensed Products, as adjusted
for rebates and refunds, (iv) charges for freight and insurance directly related
to the distribution of Licensed Products, to the extent included in Gross Sales,
and (v) credits for allowances given or made for wastage replacement, indigent
patient and any other sales programs agreed to by the Parties for Licensed
Products; and (b) is a periodic adjustment of the provision determined in (a) to
reflect amounts actually incurred by a Party in the Territory for items (i),
(ii), (iii), (iv) and (v) in clause (a). The provision allowed in clause (a) and
adjustments made in clause (b) (if any) will be reviewed by the Joint
Commercialization Team and approved by the JSC.

                                       5
<PAGE>

     It is the intention of the Parties that the interpretation of these
definitions in this Exhibit B will be consistent with generally accepted
accounting principles ("GAAP") in the U.S. If necessary, a Party will make the
appropriate adjustments to the financial information it supplies under the
Agreement to conform to the above format of reporting results of operation.

     A.2.1. REPORTING

     Each Party shall report to the other Party forecasts, budgets and actual
results of operations related to the following:

     Development Costs
     Premarketing Expenses
     Marketing Costs
     Sales Costs
     Ongoing Development Expenses
     Other Out of Pocket Costs
     Gross Sales
     Net Sales
     Distribution Costs
     Sales Returns and Allowances
     Number of units sold
     Cost of Goods Manufactured for Sale

     Reporting by each Party will be performed as follows:

Reporting Event               Frequency             Timing of
---------------               ---------             ---------
Submission
Actuals                       Quarterly             Calendar Quarter end + 14
                                                    business days

Forecasts                     Quarterly             One month following
Calendar
(four quarter
rolling - by month)                                 Quarter end

Preliminary Budgets           Annually
                              September 15
(one year - by month)

Reporting Event               Frequency             Timing of Submission
---------------               ---------             --------------------
Final Budgets                 Annually              October 31
(one year - by month)

Long Range Plan               Annually              May 15
(current year plus 2 years)

                                       6
<PAGE>

     In addition to the foregoing, beginning upon first launch if Licensed
Product, on a monthly basis, the Distributing Party will supply the other Party
with each month's Distribution Costs number of units sold and Gross Sales and
Net Sales of Licensed Products in units, local currency and U.S. dollars (using
the month-end rate for conversion for such month as shown in The Wall Street
Journal) by country in the Territory according to the Distributing Party's sales
reporting system, which shall be consistent with the definitions herein. Each
such report shall be provided as early as possible, but no later than five (5)
days after the last day of the month in question, and shall separately provide
monthly and year-to-date cumulative figures.

     The financial representatives from the Parties will meet as appropriate but
at least quarterly to review and approve the following:

     -   actual results

     -   forecasts

     -   budgets

     -   inventory levels

     -   Sales Returns and Allowances

     -   other financial matters, including but not limited to each Party's
         methodologies for charging costs and allocating Sales Representatives
         to activities related to Licensed Product for determination of actuals,
         forecasts, budgets and long range plans and the results of applying
         such methodologies.

     Costs included in Cost of Goods Manufactured For Sale are not subject to
JSC approval as long as they are consistent with the definitions.

     A.2.2. RECONCILIATION STATEMENTS. Within fourteen (14) business days
following the end of a Calendar Quarter, each Party shall submit to the other
Party its report of actual results as outlined above (including a summary of
charges and credits allocated to its Development Cost Project Account as
referred to in Section 4.6(b)). Expenses charged by either Party as Development
Costs or Reimbursable Commercial Costs shall not exceed *** of the amount
included for the total expenditure in the then current Development Plan, Annual
Workplan/Budget, Commercialization Plan or Annual Commercialization Plan/Budget,
as the case may be, unless the Joint Project Team or JCT, as appropriate,
recommends, and the JSC approves such excess expense.

     The financial representatives from each Party on the Joint Project Team or
the Joint Commercialization Team, as applicable, shall be responsible for,
within twenty one (21) days following the end of a Calendar Quarter, preparing a
statement ("Reconciliation Statement") in a format agreed to by the Parties
showing each Party's results, the calculations of Development Cost sharing under
Section 4.6, the calculation of Reimbursable Commercial Cost sharing under
Section 6.2, the application of credits available under Section 6.2, and any
cash settlement required. The Reconciliation

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

                                       7
<PAGE>

Statement and reports of actual results compared to budget will be sent to the
Joint Project Team or JCT, as applicable, within twenty one (21) days following
the end of a Calendar Quarter. After approval by the Joint Project Team or JCT,
as applicable, the Joint Project Team or JCT will forward the Reconciliation
Statement to the JSC for its information or approval in the case of a dispute.
The Reconciliation Statement shall be provided to the JSC thirty days prior to
the date upon which the JSC shall meet to approve the Reconciliation Statement,
if approval is being sought. Reconciliation Statements shall be made by Elan or
Biogen in the manner set forth in Section A.5.

A.3. "FOREIGN EXCHANGE"

     The "Functional Currency" for accounting for Gross Sales, Net Sales,
Development Costs and Reimbursable Commercial Costs will be U.S. dollars. Except
as the Parties otherwise mutually agree, for billing and reporting, the
statement of operations will be translated into U.S. dollars at the rate of
exchange listed in The Wall Street Journal on the last business day of the
applicable calendar quarter, except for sales which will be translated using the
average monthly rate of exchange listed in The Wall Street Journal. If, due to
restrictions or prohibitions imposed by national or international authority,
payments cannot be made as provided in this Section A.3, the Parties shall
consult with each other with a view towards finding a prompt and acceptable
solution, and the paying Party will deal with such monies as the other Party may
lawfully direct at no additional out-of-pocket expense to the paying Party.

A.4. AUDITS AND INTERIM REVIEWS

     Either Party shall have the right to request that a nationally recognized,
independent accounting firm to be mutually agreed upon by the Parties and that
is not either Party's independent accounting firm perform an audit or interim
review of the other Party's books as they relate to the collaboration in order
to express an opinion regarding such Party's compliance with generally accepted
accounting principles. Such audits or review will be conducted at the expense of
the requesting Party.

     Either Party shall have the right to request that a nationally recognized,
independent accounting firm to be mutually agreed upon by the Parties and that
is not either Party's independent accounting firm perform an audit of the other
Party's books of accounts for the sole purpose of verifying compliance with the
Agreement. Upon thirty (30) days prior written notice from a Party (the
"Auditing Party"), the other Party (the "Audited Party") shall permit an
independent certified public accounting firm of nationally recognized standing
to be mutually agreed upon by the Parties and that is not either Party's
independent accounting firm, to examine the relevant books and records of the
Audited Party and its Affiliates as may be reasonably necessary to verify the
reports and information submitted by the Audited Party and the accuracy of any
reconciliation report. An examination by a Party under this Section shall occur
not more than once in any calendar year and shall be limited to the pertinent
books and records for any calendar year ending not more than *** before the date
of the request. The accounting

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

                                       8
<PAGE>

firm shall be provided access to such books and records at the Audited Party's
facility(ies) where such books and records are normally kept and such
examination shall be conducted during the Audited Party's normal business hours.
The Audited Party may require the accounting firm to sign a standard
non-disclosure agreement with terms that are not inconsistent with the terms of
this Agreement before providing the accounting firm access to the Audited
Party's facilities or records. Upon completion of the audit, the accounting firm
shall provide both Biogen and Elan a written report disclosing whether the
reports submitted by the Audited Party are correct or incorrect and the specific
details concerning any discrepancies. No other information shall be provided to
the Auditing Party. If the accountant determines that, based on errors in the
reports so submitted, any report prepared in accordance with the Agreement is
incorrect, the Parties shall promptly revise the report and the associated
reconciliation report and any additional amount owed by one Party to the other
shall be paid within thirty (30) days after receipt of the accountant's report,
along with interest at the lesser of (i) the annualized interest rate of two
percent (2%) over the prime rate then in effect at Fleet Bank or (ii) the
highest rate permitted by applicable law from the date that such additional
amount should have first been paid, provided, however, that no such interest
shall be payable if the errors leading to the reconciliation report being
incorrect were in the reports provided by the Party to receive such additional
amount. Additionally, if the accountant determines that the reports submitted by
the Audited Party overstate the Audited Party's share by more than *** , the
Audited Party shall reimburse the Auditing Party for the expenses incurred by
the Auditing Party in conducting the audit.

 A.5.     PAYMENTS BETWEEN THE PARTIES

     Based upon the Reconciliation Statement, as approved by the Joint Project
Team, the JCT or the JSC, as applicable, there shall be a cash settlement
between the Parties no later than sixty (60) days after the end of each Calendar
Quarter. In the event any payment is made after the date specified in the
preceding sentence, the paying Party shall increase the amount otherwise due and
payable by adding interest thereon, computed at the rate of prime (in effect at
Fleet Bank) plus two percent (2%). If laws, rules or regulations require
withholding of income taxes or other taxes imposed upon payments made by one
Party to the other Party, the payor Party shall make such withholding payments
as required and subtract such withholding payments from the payments otherwise
to be made. The payor Party shall submit appropriate proof of payment of the
withholding taxes to the payee Party within a reasonable period of time and
shall cooperate with the payee Party in the event such Party claims exemption
from such withholding, for example by providing copies of receipts of payment of
such withheld tax or other documents reasonably available to the payor Party.

A.6. COSTS OF BUILDING INVENTORY NECESSARY FOR LAUNCH

     The JCT shall agree on an inventory build-up plan for build-up of
Commercial Supplies of Licensed Product in advance of launch on a country by
country

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

                                       9
<PAGE>

basis. Elan shall purchase a percentage of pre-launch inventory prior to launch,
in accordance with the inventory build-up schedule approved by the JCT, based on
the intent of the Parties that they *** in the risk of the inventory build-up.

B. FTE METHODOLOGY

B.1. ACCOUNTING FOR DEVELOPMENT COSTS AND REIMBURSABLE COMMERCIAL COSTS

     All Development Costs, Pre-marketing Expenses, Marketing Costs, Sales
Costs, Distribution Costs, Ongoing Development Expenses and Other Out of Pocket
Costs will be based on the appropriate costs definition stated in Section A.1 of
this Exhibit B.

     Each Party shall report Development Costs and Ongoing Development Expenses
in a manner consistent with its project cost system (which shall track FTEs by
functional area and by quarter) or using such other system as such Party applies
with respect to its internal programs and which has been reviewed with the Joint
Project Team. In general, these project cost systems shall report actual and/or
allocable time spent on specific projects, apply the FTE Rates, determined in
the manner specified below, capture actual and/or allocable costs of specific
projects and allocate other expenses to projects. For Pre-marketing Expenses,
Marketing Costs, Sales Costs and Distribution Costs and Other Out of Pocket
Costs the Parties will allocate costs based on spending in the relevant
departments or applying such other allocation methodology as such Party uses
with respect to other products, and which shall be approved by the Joint
Commercialization Team.

B.2. FTE RATE

     The FTE Rate for both Parties for the remainder of 2000 will be *** .
Thereafter, the JSC will set FTE Rates for each year in connection with approval
of the applicable Annual Workplan/Budget for such year. FTE Rates will be set in
a manner which fairly reflects the direct costs of each Party for the Direct
Functional Groups specified below:

Direct Functional Groups
------------------------

     A.   Research & Development shall include the following:
          o     Research
          o     Project Management
          o     Preclinical
          o     Market Development
          o     Product Development/QA
          o     Medical Research/Medical Operations/Clinical
          o     Regulatory Affairs/Drug Safety

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

                                       10
<PAGE>

          o     Manufacturing (not including production of Clinical and
          Commercial
                Supplies which will use the Production FTE Rate)

     B.   Sales & Marketing shall include the following
          o     Sales
          o     Marketing
          o     Customer Service

Total budgeted expenses incorporated in the FTE Rate shall include and be
-------------------------------------------------------------------------
limited to:
-----------

          o     Salary, Overtime & Benefits
          o     Other Personnel Costs
          o     General Lab Supplies
          o     Office Supplies
          o     IS Hardware & Software
          o     Maintenance & Repairs
          o     Communications
          o     Travel & Entertainment

                                       11
<PAGE>

EXHIBIT C

          *** EXHIBIT C HAS BEEN OMITTED IN ITS ENTIRETY (20 PAGES) ***

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

<PAGE>

EXHIBIT D

           *** EXHIBIT D HAS BEEN OMITTED IN ITS ENTIRETY (1 PAGE) ***

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

<PAGE>

EXHIBIT E                  ***

          *** EXHIBIT E HAS BEEN OMITTED IN ITS ENTIRETY (41 PAGES) ***

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

<PAGE>

EXHIBIT F

                              FOR IMMEDIATE RELEASE
                              ---------------------

INVESTORS:
----------

Contact:     MARY ANSALDI                   Contact:   EMER REYNOLDS
(U.S.)       Elan Corporation, plc          (Europe)   Elan Corporation, plc
             Ph:  212-407-5740                         Ph:  353-1-709-4080
                  800-252-3526                              800 28352600
             mansaldi@elancorp.com                     ereynolds@elancorp.com

Contact:     KATHRYN BLOOM                             ELIZABETH WOO
             Biogen, Inc.                              Biogen, Inc
             Ph:  617-679-2851                         617-679-2822
             Kathryn_Bloom@biogen.com                  Elizabeth_Woo@biogen.com

MEDIA
-----
Contact:     MAX GERSHENOFF
             Elan Corporation, plc
             Ph:  212-407-5740
             mgershenoff@elancorp.com

                  ELAN AND BIOGEN TO COLLABORATE ON DEVELOPMENT
               AND COMMERCIALIZATION OF ANTEGREN(TM)(NATALIZUMAB)

     - First of New Class of Agents Currently in Phase II Clinical Trials -

Dublin, Ireland/ Cambridge, MA, July __, 2000 - Elan Corporation, plc (NYSE:
ELN) ("Elan") and Biogen, Inc. (NASDAQ/BGEN) ("Biogen") today announced a
worldwide, exclusive collaboration to develop, manufacture and commercialize
Antegren(TM) (natalizumab), a humanized monoclonal antibody currently nearing
completion of Phase II clinical testing for Multiple Sclerosis (MS) and Crohn's
Disease. Antegren(TM) represents the first of a new class of agents with
potential uses in a variety of inflammatory and non-inflammatory diseases.

<PAGE>

Under the terms of the agreement, Elan and Biogen and will work together to
develop, manufacture and commercialize Antegren(TM). They will share costs for
ongoing development activities and economic benefits from Antegren(TM)
commercialization. The financial details of the agreement were not released, but
they include upfront and milestone payments that recognize the value each party
brings to the collaboration. The agreement is subject to clearance under the
Hart Scott Rodino Act.

Donal Geaney, Elan's chairman and chief executive officer, said, "We are
delighted to have concluded arrangements with Biogen to collaborate in the
development, manufacture and eventual commercialization of Antegren(TM). We
believe that the technology and skills available from the two combined company's
will be highly synergistic in the challenges of completing the development and
successful introduction of this truly important product."

James C. Mullen, Biogen's chief executive officer, said, "We are very pleased to
be working with Elan on this very promising late-stage development product.
Inflammation is an area of great interest to us and one in which we have
considerable scientific and commercial strengths. We believe Antegren(TM) has
potential in a number of indication, and, in particular, may provide a strong
opportunity to introduce another disease-modifying therapy for the MS and
Crohn's Disease communities."

Antegren(TM) is a humanized monoclonal antibody and the first in a new class of
potential therapeutics designed to block cell adhesion to blood vessel walls and
subsequent migration of some white blood cells into tissue. VLA-4 is found on
most types of activated white blood cells. It may be useful in the treatment of
a range of inflammatory and non-inflammatory diseases.

Antegren(TM) demonstrated promising results in Phase II studies in MS reported
during 1999 and encouraging data in separate trials with Crohn's Disease and
Ulcerative Colitis patients.

Elan is a world leader in drug delivery and in the discovery, development and
marketing of products and services in neurology, oncology and pain management.
Elan's principal research and manufacturing facilities are in Ireland, the
United States and Israel. Elan shares trade on the New York, London and Dublin
Stock Exchanges.

                                       2
<PAGE>

Biogen, Inc., winner of the 1998 U.S. National Medal of Technology, is a
biopharmaceutical company principally engaged in discovering and developing
drugs for human healthcare through genetic engineering. Headquartered in
Cambridge, MA, the Company's revenues are generated from U.S. and European sales
of AVONEX(R) (Interferon beta-la) for treatment of relapsing forms of multiple
sclerosis, and from the worldwide sales by licensees of a number of products,
including alpha interferon and hepatitis B vaccines and diagnostic products.
Biogen's research and development activities are focused on novel products for
multiple sclerosis, inflammatory, respiratory, kidney and cardiovascular
diseases and in developmental biology and gene therapy. For copies of press
releases and additional information about the Company, please consult Biogen's
Homepage on the World Wide Web at http://www.biogen.com.

The statements in this press release that are not historical facts are
forward-looking statements that involve risks and uncertainties including,
without limitation, risks associated with the inherent uncertainty of
pharmaceutical research, product development and commercialization, the impact
of competitive products and patents, and other risks and uncertainties,
including those detailed from time to time in periodic reports. Actual results
may differ from the forward-looking statements.

                                      # # #

                                       3
<PAGE>

SCHEDULE 1.4

        *** SCHEDULE 1.4 HAS BEEN OMITTED IN ITS ENTIRETY (7 PAGES) ***

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

<PAGE>

SCHEDULE 1.9

        *** SCHEDULE 1.9 HAS BEEN OMITTED IN ITS ENTIRETY (7 PAGES) ***

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

<PAGE>

SCHEDULE 1.28

       *** SCHEDULE 1.28 HAS BEEN OMITTED IN ITS ENTIRETY (10 PAGES) ***

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

<PAGE>

SCHEDULE 1.35

        *** SCHEDULE 1.35 HAS BEEN OMITTED IN ITS ENTIRETY (1 PAGE) ***

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

<PAGE>

SCHEDULE 1.37

        *** SCHEDULE 1.37 HAS BEEN OMITTED IN ITS ENTIRETY (6 PAGES) ***

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

<PAGE>

SCHEDULE 4.6(c)

         *** SCHEDULE 1.4 HAS BEEN OMITTED IN ITS ENTIRETY (1 PAGE) ***

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

<PAGE>

SCHEDULE 4.8

None

<PAGE>

SCHEDULE 7.1(b)(i)

      *** SCHEDULE 7.1(b)(i) HAS BEEN OMITTED IN ITS ENTIRETY (1 PAGE) ***

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

<PAGE>

SCHEDULE 7.1(b)(ii)

     *** SCHEDULE 7.1(b)(ii) HAS BEEN OMITTED IN ITS ENTIRETY (3 PAGES) ***

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.

<PAGE>

SCHEDULE 11.5(a)

       *** SCHEDULE 11.5(a) HAS BEEN OMITTED IN ITS ENTIRETY (1 PAGE) ***

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.<PAGE>

================================================================================

                            ASSET PURCHASE AGREEMENT

                                  by and among

                              ELAN CORPORATION, PLC
                           ELAN PHARMACEUTICALS, INC.
                              ELAN OPERATIONS, INC.
                                ELAN CANADA, INC.

                                       and

                                   ENZON, INC.

                           dated as of October 1, 2002

================================================================================

<PAGE>

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

                                    ARTICLE I

                                   DEFINITIONS

Section 1.01.   Defined Terms..................................................1
Section 1.02.   Construction of Certain Terms and Phrases.....................17

                                   ARTICLE II

                           PURCHASE AND SALE OF ASSETS

Section 2.01.   Purchase and Sale of Assets at the Closing....................17
Section 2.02.   Assignability and Consents....................................20

                                   ARTICLE III

                            ASSUMPTION OF LIABILITIES

Section 3.01.   Assumption of Liabilities.....................................21

                                   ARTICLE IV

                           PURCHASE PRICE AND PAYMENT

Section 4.01.   Purchase Price................................................24
Section 4.02.   Allocation of Purchase Price..................................24
Section 4.03.   Payment of Sales, Use and Other Taxes.........................24
Section 4.04.   Closing Date Inventory Value Adjustments......................25

                                    ARTICLE V

                                     CLOSING

Section 5.01.   Time and Place................................................26
Section 5.02.   Deliveries at Closing.........................................26
Section 5.03.   Deliveries Relating to the Plant..............................27

                                   ARTICLE VI

              REPRESENTATIONS AND WARRANTIES OF THE ELAN COMPANIES

Section 6.01.   Organization, Etc.............................................28
Section 6.02.   Authority of the Elan Companies...............................29

                                       -i-

<PAGE>

                                                                            Page
                                                                            ----

Section 6.03.   Consents and Approvals........................................29
Section 6.04.   Non-Contravention.............................................29
Section 6.05.   Contracts.....................................................30
Section 6.06.   Intellectual Property Rights..................................30
Section 6.07.   Employee Matters..............................................32
Section 6.08.   Litigation....................................................33
Section 6.09.   Environmental Matters.........................................33
Section 6.10.   Compliance with Law...........................................34
Section 6.11.   Inventory.....................................................36
Section 6.12.   Brokers.......................................................36
Section 6.13.   Title to and Sufficiency of Transferred Assets................36
Section 6.14.   Financial Information.........................................36
Section 6.15.   Certain Personal Property.....................................36
Section 6.16.   Non-Real Estate Leases........................................37
Section 6.17.   Insurance.....................................................37
Section 6.18.   Customers and Suppliers.......................................37
Section 6.19.   Operation of the Business; Description of the Business........37
Section 6.20.   Plant Matters.................................................38
Section 6.21.   No Other Warranties...........................................39

                                   ARTICLE VII

       REPRESENTATIONS AND WARRANTIES OF THE ACQUIROR

Section 7.01.   Corporate Organization........................................40
Section 7.02.   Authority of the Acquiror.....................................40
Section 7.03.   Consents and Approvals........................................40
Section 7.04.   Non-Contravention.............................................40
Section 7.05.   Litigation....................................................41
Section 7.06.   Brokers.......................................................41
Section 7.07.   Financial Capability..........................................41
Section 7.08.   No Other Warranties...........................................41

                                  ARTICLE VIII

                            COVENANTS OF THE PARTIES

Section 8.01.   Preservation of Purchased Assets; Limitations on
                  Distribution................................................41
Section 8.02.   Commercially Reasonable Efforts...............................42
Section 8.03.   Cooperation...................................................42
Section 8.04.   Risk of Loss..................................................44
Section 8.05.   Access........................................................44
Section 8.06.   Public Announcements; Confidentiality.........................46
Section 8.07.   Corporate Names...............................................47
Section 8.08.   Product Trademarks............................................48

                                      -ii-
<PAGE>

                                                                            Page
                                                                            ----

Section 8.09.   Regulatory Matters............................................49
Section 8.10.   Employee Matters..............................................49
Section 8.11.   Bulk Transfer Laws............................................52
Section 8.12.   Covenant Not to Compete.......................................52
Section 8.13.   Oversight Committee...........................................53
Section 8.14.   Medical Inquiries and Complaints..............................54
Section 8.15.   Insurance.....................................................55
Section 8.16.   Further Assurances............................................55
Section 8.17.   No Solicitation...............................................55
Section 8.18.   Incentive Compensation........................................55
Section 8.19.   Expenses......................................................56
Section 8.20.   HSR Act Filing................................................56
Section 8.21.   Indiana Disclosure Document...................................57
Section 8.22.   Rights In Japan...............................................57
Section 8.23.   Construction of Certain Provisions............................58

                                   ARTICLE IX

  CONDITIONS TO THE OBLIGATIONS OF THE ELAN COMPANIES FOR
                                   THE CLOSING

Section 9.01.   Representations, Warranties and Covenants.....................58
Section 9.02.   No Actions or Proceedings.....................................58
Section 9.03.   Consents......................................................58
Section 9.04.   Elan Shareholder Approval.....................................58

                                    ARTICLE X

   CONDITIONS TO THE OBLIGATIONS OF THE ACQUIROR FOR THE
                                     CLOSING

Section 10.01.  Representations, Warranties and Covenants.....................59
Section 10.02.  No Actions or Proceedings.....................................59
Section 10.03.  Consents......................................................59
Section 10.04.  No Adverse Effect.............................................59
Section 10.05.  Audited Financial Statements..................................59
Section 10.06.  Elan Shareholders Meeting.....................................59

                               ARTICLE XI

                             INDEMNIFICATION

Section 11.01.  Survival of Representations, Warranties, Covenants, Etc.......60
Section 11.02.  Indemnification...............................................60
Section 11.03.  Limitations...................................................63

                                     -iii-
<PAGE>

                                                                            Page
                                                                            ----

                               ARTICLE XII

                       TERMINATION AND ABANDONMENT

Section 12.01.  Methods of Termination........................................64
Section 12.02.  Procedure upon Termination....................................65
Section 12.03.  Specific Performance..........................................65
Section 12.04.  Other Remedies................................................65
Section 12.05.  Effect of Certain Terminations................................66

                              ARTICLE XIII

                              MISCELLANEOUS

Section 13.01.  Notices.......................................................66
Section 13.02.  Entire Agreement..............................................67
Section 13.03.  Waiver........................................................67
Section 13.04.  Amendment.....................................................67
Section 13.05.  Third Party Beneficiaries.....................................67
Section 13.06.  Assignment; Binding Effect....................................68
Section 13.07.  Headings......................................................68
Section 13.08.  Severability..................................................68
Section 13.09.  Governing Law.................................................68
Section 13.10.  Expenses......................................................68
Section 13.11.  Counterparts..................................................68
Section 13.12.  Schedules, Exhibits and Other Agreements......................68

Exhibit A    -    Form of License Agreement
Exhibit B    -    Form of Product Supply Agreement
Exhibit C    -    Form of Myocet Supply Agreement
Exhibit D    -    Form of Interim Services Agreement
Exhibit E    -    Form of Trademark Assignment Agreement
Exhibit F    -    Form of Canadian Trademark Agreement
Exhibit G    -    Form of Patent Assignment Agreement
Exhibit H    -    Form of Bill of Sale

                                      -iv-
<PAGE>

                            ASSET PURCHASE AGREEMENT

         This Asset Purchase Agreement (this "Agreement") is made and entered
into as of October 1, 2002, by and among Enzon, Inc., a Delaware corporation
(the "Acquiror"), and Elan Corporation, plc, a public limited company organized
under the laws of Ireland (the "Elan Parent"), Elan Pharmaceuticals, Inc., a
Delaware corporation ("EPI"), Elan Operations, Inc., a Delaware corporation
("EOI"), and Elan Canada, Inc., a Canadian corporation ("ECI" and, together with
Elan Parent, EPI and EOI, the "Elan Companies").

                                    RECITALS

         This Agreement sets forth the terms and conditions upon which the
Acquiror is purchasing the Purchased Assets (defined below) and assuming the
Assumed Liabilities (defined below) of the Elan Companies from the Elan
Companies, and the Elan Companies are selling the Purchased Assets (defined
below) and transferring the Assumed Liabilities (defined below) of the Elan
Companies to the Acquiror.

                                    AGREEMENT

         In consideration of the premises and the mutual covenants and promises
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, the parties agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

         Section 1.01. Defined Terms. As used in this Agreement, the following
defined terms shall have the meanings described below:

         "Accountants" means an accounting firm of national reputation
(excluding each of the Acquiror's and the Elan Companies' respective regular
outside accounting firms) as may be mutually acceptable to the Acquiror and the
Elan Companies; provided, however, that in the event that the Acquiror and the
Elan Companies are unable to agree on such an accounting firm within ten (10)
days, then the accounting firm shall be selected by lot.

         "Accounts Receivable" means all trade accounts and notes receivable and
other miscellaneous receivables of the Business, including those that are not
evidenced by instruments or invoices, existing as of the Closing Date.

         "Acquiror" has the meaning set forth in the Preamble to this Agreement.

         "Acquiror Adverse Effect" means an effect or condition that
individually or when taken together with all other effects or conditions of like
nature would individually or in the aggregate or would be reasonably expected to
have individually or in the aggregate a material adverse effect on the business,
assets, results of operations or financial condition of the Acquiror taken as a
whole.

<PAGE>

         "Acquiror Disclosure Schedule" has the meaning set forth in the
preamble to Article VII.

         "Acquiror's Defined Contribution Plan" has the meaning set forth in
Section 8.10(c).

         "Acquiror Governmental Consents" has the meaning set forth in Section
7.03

         "Acquiror Severance" has the meaning set forth in Section 8.10(f).

         "Acquisition Proposal" has the meaning set forth in Section 8.17.

         "Action or Proceeding" means any action, suit, proceeding, arbitration,
Order, inquiry, hearing, assessment with respect to fines or penalties or
litigation (whether civil, criminal, administrative or investigative) commenced,
brought, conducted or heard by or before, or otherwise involving, any
Governmental or Regulatory Authority.

         "Adverse Effect" means an effect or condition that individually or when
taken together with all other effects or conditions of like nature would
individually or in the aggregate (i) or would be reasonably expected to have
individually or in the aggregate a material adverse effect on the business,
assets, results of operations or financial condition of the Business taken as a
whole or (ii) result in a material diminution in the capacity or capability of
the Plant to manufacture and supply the Acquiror with finished and saleable
Product, which is reasonably expected to continue for a period greater than the
period which is likely to be covered by the saleable Finished Product Inventory
on hand plus six weeks, based on Finished Product Inventory consumption and
sales rates over the preceding 180 days.

         "Affiliate" means, with respect to any Person, any other Person which
Controls, is Controlled by or is under common Control with such Person.

         "Agreement" has the meaning set forth in the Preamble hereto.

         "Applicable Period" has the meaning set forth in Section 8.12(a).

         "Assets or Properties" of any Person means all assets and properties of
any kind, nature, character and description (whether real, personal or mixed,
whether tangible or intangible, whether absolute, accrued, contingent, fixed or
otherwise and wherever situated), including the goodwill related thereto,
operated, owned or leased by such Person, including cash, cash equivalents,
accounts and notes receivable, chattel paper, documents, instruments, general
intangibles, equipment, inventory, goods and intellectual property.

         "Assumed Contracts" has the meaning set forth in Section 2.01(a)(iii).

         "Assumed Liabilities" has the meaning set forth in Section 3.01(a).

         "Bill of Sale" means the Bill of Sale conveying certain assets of the
Business from the Elan Companies to the Acquiror and its Affiliates, a form of
which is attached as Exhibit H.

                                      -2-
<PAGE>

         "Books and Records" means the Product Books and Records and the
Manufacturing Process and Plant Books and Records.

         "Business" means the research, development, manufacture, distribution,
marketing, sale and promotion of the Product and, to the extent applicable,
Current Product Improvements in the Territory.

         "Business Day" means a day other than Saturday, Sunday or any day on
which commercial banks located in New York are authorized or obligated by Law to
close.

         "Business Employees" has the meaning set forth in Section 8.10(a).

         "Canadian Sales Force Employees" has the meaning set forth in Section
8.10(a).

         "Canadian Trademark Assignment Agreement" means the Canadian Trademark
Assignment Agreement to be dated as of the Closing Date by and between the
Acquiror and EPI, a form of which is attached hereto as Exhibit F.

         "Chargeback" means, with respect to the Product, an amount paid to a
wholesaler for the Product after such Product has been resold by that wholesaler
for less than the wholesaler's acquisition cost.

         "Charter Documents" has the meaning set forth in Section 6.01.

         "Closing" has the meaning set forth in Section 5.01.

         "Closing Date" has the meaning set forth in Section 5.01.

         "Closing Date Inventory Value" means the value of all Product
Inventory, Finished Non-Product Inventory, Work-In-Progress Non-Product
Inventory, and Raw Material Non-Product Inventory as of the Closing Date, each
valued in the following fashion: (i) with respect to all Finished Non-Product
Inventory, Finished Product Inventory, Work-In-Progress Non-Product Inventory
and Work-In-Progress Product Inventory, at standard cost, calculated in
accordance with the Elan Companies' historical accounting practices, and (ii)
with respect to Raw Material Non-Product Inventory and Raw Material Product
Inventory, at actual cost.

         "Closing Date Inventory Value Adjustment" means the Closing Date
Inventory Value minus $8 million.

         "Closing Date Inventory Value Statement" has the meaning set forth in
Section 4.04(a).

         "Code" means the Internal Revenue Code of 1986, as amended.

         "Competing Product" has the meaning set forth in Section 8.12(a).

                                      -3-
<PAGE>

         "Confidential Information" has the meaning set forth in Section
8.06(b).

         "Confidentiality Agreement" has the meaning set forth in Section
8.06(c).

         "Contracts" means any and all binding commitments, contracts, purchase
orders, leases, licenses, easements, permits (excluding Governmental Permits),
instruments, commitments, arrangements, undertakings, practices or other
agreements, whether written or oral.

         "Control" means:

         (a) ownership (directly or indirectly) of at least fifty percent (50%)
     of the shares or stock entitled to vote for the election of directors in
     the case of a company or corporation; or

         (b) the ability otherwise to direct and control the actions of a
     Person, other than a company or a corporation; or

         (c) with respect to Product Intellectual Property, the possession
     (whether by ownership or license or sublicense and other than pursuant to
     this Agreement) of the ability to grant intellectual property rights,
     except as limited by the agreements set forth on Schedule 1.01(a).

         "Copyrights" means, in the Territory, copyrights, whether registered or
unregistered, and, if any, applications in the Marketing Materials Product Books
and Records, all Finished Product Inventory, all Plant Software Products, Plant
Embedded Controls, Plant Custom Software (including documentation and related
object and source codes) and all Manufacturing Process and Plant Books and
Records.

         "Corporate Names" has the meaning set forth in Section 8.07(c).

         "Current" means the existing, prepared, made or being made, tested or
being tested, or physically reduced to practice or contained in an invention
disclosure form prior to or as of the Closing Date.

         "Damages" has the meaning set forth in Section 11.02(a).

         "Database" means all data and other information necessary for the
operation of or predominantly used in the Business that is recorded, stored,
transmitted and retrieved in electronic form.

         "Default" means (a) a breach, default or violation, (b) the occurrence
of an event that with or without the passage of time or the giving of notice, or
both, would constitute a breach, default or violation or cause an Encumbrance to
arise, or (c) with respect to any Contract, the occurrence of an event that with
or without the passage of time or the giving of notice, or both, would give rise
to a right of termination, renegotiation or acceleration or a right to receive
Damages or a payment of penalties.

                                      -4-
<PAGE>

         "DEL" means the Drug Establishment License for the Product, a license
required for all businesses in Canada engaged in fabrication,
packaging/labeling, importation, distribution, wholesaling and testing as
defined in the Food and Drug Regulations passed pursuant to the FDA Act.

         "Development Contracts" has the meaning set forth in Section
2.01(a)(i).

         "DIN" means the drug identification number assigned by Health Canada
which is required to be located on the label of prescription and
over-the-counter drug products that have been evaluated by Health Canada and
approved for sale in Canada.

         "Distribution Contracts" has the meaning set forth in Section
2.01(a)(iii).

         "ECI" has the meaning set forth in the Preamble to this Agreement.

         "Elan Companies" has the meaning set forth in the Preamble to this
Agreement.

         "Elan Disclosure Schedule" has the meaning set forth in the preamble to
Article VI.

         "Elan Governmental Consents" has the meaning set forth in Section
6.03(a).

         "Elan Parent" has the meaning set forth in the Preamble to this
Agreement.

         "Elan Shareholders Meeting" has the meaning set forth in Section 8.02.

         "Elan Third Party Consents" has the meaning set forth in Section
6.03(b).

         "Elan's 401(k) Plan" has the meaning set forth in Section 8.10(c).

         "Employee Benefit Plans" means the Pensions Plans, Welfare Plans and
any other benefit arrangements, obligations or practices, including employment
agreements, severance policies or agreements, executive compensation
arrangements, incentive arrangements, bonus plans, stock option plans, stock
purchase plans or any plans providing benefits or payments in the event of a
change of ownership or control, providing benefits to one or more present or
former employees or independent contractors of the Business that are sponsored
or contributed to by EPI or its Affiliates.

         "Encumbrance" means any mortgage, pledge, assessment, security
interest, deed of trust, lease, lien, levy, license, restriction on
transferability, defect in title, charge or other encumbrance of any kind, or
any conditional sale or title retention agreement or other agreement to give any
of the foregoing in the future.

         "Environment" means all air, surface water, groundwater or land,
including land surface or subsurface, including all fish, wildlife, biota and
all other natural resources.

         "Environmental Claim" means any and all administrative or judicial
actions, suits, Orders, claims, liens, written notices, written notices of
violations, written notices of investigations, complaints, requests for
information or other written communication, whether criminal or civil,

                                      -5-
<PAGE>

pursuant to or relating to any applicable Environmental Law by any Person based
upon, alleging, asserting or claiming any actual or potential (i) violation of
or liability under any Environmental Law, (ii) violation of any Environmental
Permit or (iii) liability for investigatory costs, cleanup costs, removal costs,
remedial costs, response costs, natural resource damages, property damage,
personal injury, medical monitoring costs or expenses, fines or penalties
arising out of, based on, resulting from or related to the presence, Release, or
threatened Release into the Environment, of any Hazardous Materials at any
location, including at any off-Site location to which Hazardous Materials were
sent for handling, storage, treatment or disposal.

         "Environmental Clean-up Site" means any location that is listed or
proposed for listing on the National Priorities List, the Comprehensive
Environmental Response, Compensation and Liability Information System, or on any
similar state list of sites requiring investigation or cleanup under, or that is
the subject of any pending or, to the Knowledge of Elan Companies threatened,
action, suit, proceeding or investigation related to or arising from any alleged
violation.

         "Environmental Damages" has the meaning set forth in Section
11.02(a)(iii).

         "Environmental Law" means any and all federal, state, local, provincial
and foreign, civil and criminal laws, statutes, common law doctrines,
ordinances, Orders, codes, rules, regulations, judgments, decrees, injunctions
or agreements with any Governmental or Regulatory Authority, relating to
pollution or the protection of health and the Environment, or worker health and
safety, including those relating to the handling, use, generation, treatment,
storage, transportation, disposal, manufacture, distribution, formulation,
packaging, labeling or Release of Hazardous Materials, including: the Clean Air
Act, 42 U.S.C.(Section) 7401 et seq.; the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C.(Section) 9601 et seq.; the
Federal Water Pollution Control Act, 33 U.S.C.(Section) 1251 et seq.; the
Hazardous Materials Transportation Act, 49 U.S.C.(Section) 1801 et seq.; the
Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C.(Section) 136 et
seq.; the Resource Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S.C.
(Section) 6901 et seq.; the Toxic Substances Control Act, 15 U.S.C. (Section)
2601 et seq.; the Occupational Safety & Health Act of 1970, 29 U.S.C.(Section)
651 et seq.; the Oil Pollution Act of 1990, 33 U.S.C.(Section) 2701 et seq.; and
the Safe Drinking Water Act of 1974, 42 U.S.C.(Section) 300(f) et seq.

         "Environmental Permits" means any federal, state, local, provincial or
foreign permits, licenses, approvals, consents or authorizations required by any
Governmental or Regulatory Authority under any Environmental Law.

         "EOI" has the meaning set forth in the Preamble to this Agreement.

         "EPI" has the meaning set forth in the Preamble to this Agreement.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

         "Excluded Assets" has the meaning set forth in Section 2.01(b).

         "Excluded Liabilities" has the meaning set forth in Section 3.01(c).

                                      -6-
<PAGE>

         "Excluded Tax Liability" has the meaning set forth in Section
3.01(c)(ii).

         "Excluded Technology" has the meaning set forth in the License
Agreement.

         "Expiration Date" has the meaning set forth in Section 11.01.

         "FDA" means the United States Food and Drug Administration and its
Canadian counterpart, Health Canada, or any successors thereto.

         "FDA Act" means the U.S. Food, Drug and Cosmetic Act of 1938, as
amended from time to time, and its Canadian counterpart, the Food and Drugs Act
(Canada), as they may be superseded or amended from time to time.

         "Financial Information" has the meaning set forth in Section 6.14.

         "Finished Inventory" means all inventory of finished pharmaceutical
product (but not any works in progress or materials used in the manufacture of
finished pharmaceutical Product that is formulated, lableded or otherwise
intended for use, sale or offer for sale whether held at a location or facility
of the Elan Companies or any Affiliate thereof (or of any other Person on behalf
of the Elan Companies or any Affiliate thereof) or in transit to or from the
Elan Companies or any Affiliate thereof (or any such other Person). For the
purposes of this Agreement, "Finished Inventory" shall be deemed to include
samples of finished pharmaceutical product designated for use in promoting
pharmaceutical product and that are not intended to be sold, consistent with FDA
requirements.

         "Finished Non-Product Inventory" means all Finished Inventory of any
pharmaceutical product produced at the Plant other than Product owned as of the
Closing Date by the Elan Companies or any Affiliate thereof.

         "Finished Product Inventory" means all Finished Inventory of Product
owned or controlled as of the Closing Date by the Elan Companies or any
Affiliate thereof.

         "Governmental or Regulatory Authority" means any court, tribunal,
arbitrator, authority, agency, commission, department, ministry, official or
other instrumentality of the United States, Canada, Ireland or other country, or
any supra-national organization, or any foreign or domestic province, state,
county, city or other political subdivision.

         "Governmental Permits" means all governmental permits, licenses,
registrations, certificates of occupancy, approvals and other governmental
authorizations necessary for the operation of the Business and the Plant.

         "Hazardous Material" means petroleum, petroleum hydrocarbons or
petroleum products, petroleum by-products, radioactive materials, asbestos or
asbestos-containing materials, gasoline, diesel fuel, pesticides, radon, urea
formaldehyde, lead or lead-containing materials, polychlorinated biphenyls; and
any other chemicals, materials, substances, contaminants or wastes regulated
under any Environmental Law.

                                      -7-
<PAGE>

         "Hired Employee" has the meaning set forth in Section 8.10(a).

         "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, together with any rules or regulations promulgated thereunder.

         "Immaterial Lease" has the meaning set forth in Section 6.16.

         "IND" means (a) (i) an Investigational New Drug Application, as defined
in the U.S. Federal Food, Drug and Cosmetic Act, as amended, and the regulations
promulgated thereunder, that is required to be filed with the FDA before
beginning clinical testing of a product in human subjects, or any successor
application or procedure and (ii) any Canadian counterpart of a U.S.
Investigational New Drug Application, including an Investigational New Drug
Submission, made pursuant to Division 8 of the Food and Drugs Act Regulations
(Canada), and (b) all supplements and amendments that may be filed with respect
to the foregoing.

         "Indemnification Claim Notice" has the meaning set forth in Section
11.02(c).

         "Indemnified Party" has the meaning set forth in Section 11.02(c).

         "Indemnitees" has the meaning set forth in Section 11.02(c).

         "Indiana Disclosure Document" has the meaning set forth in Section
8.21.

         "Interim Services Agreement" means the Interim Services Agreement to be
dated as of the Closing Date by and between the Acquiror, EPI and ECI, a form of
which is attached hereto as Exhibit D.

         "Irish Mergers Act" means the Mergers and Takeovers (Control) Acts
1978-1996 (Ireland).

         "Japanese Rights" has the meaning set forth in Section 8.22.

         "Knowledge" with respect to (i) the Elan Companies, means the knowledge
following reasonable investigation of the officers, directors or senior managers
of the Elan Parent, EPI or EOI with responsibility for, or supervision of, the
relevant matters and (ii) the Acquiror, means the knowledge following reasonable
investigation of the officers, directors or senior managers of the Acquiror with
responsibility for supervision of the relevant matters.

         "Know-How" has the meaning attributed thereto in the License Agreement.

         "Labeling" shall be as defined in Section 201(m) of the Federal Food,
Drug and Cosmetic Act, 21 U.S.C. (Section) 321(m), and any Canadian counterpart
thereof in the Territory, including the Product label, packaging and package
inserts accompanying the Product, and any other written, printed, or graphic
materials accompanying the Product, including, but not limited to, patient
instructions or patient indication guides.

                                      -8-
<PAGE>

         "Law" means any federal, state, provincial or local law, statute or
ordinance, or any rule or regulation promulgated by any Governmental or
Regulatory Authority.

         "Liability" means any, direct or indirect, liability, obligation,
claim, deficiency, guarantee or commitment of any kind or nature (whether known
or unknown, asserted or unasserted, absolute or contingent, accrued or
unaccrued, liquidated or unliquidated, or due or to become due), including any
liability for Taxes.

         "License Agreement" means the License Agreement to be dated as of the
Closing Date by and between the Acquiror and EPI, a form of which is attached
hereto as Exhibit A.

         "Manufacturing Process and Plant Books and Records" means copies of all
files, documents, instruments, papers, books and records, whether on paper or in
electronic form in a Database (but if in electronic format, not including any
related software) owned or Controlled by the Elan Companies or their respective
Affiliates and necessary for or to the extent related to the manufacture,
supply, formulation, Labeling or packaging of Product or a Current Product
Improvement intended for use, sale or offer for sale in the Territory, including
(a) any pricing lists, vendor lists or financial data necessary for or to the
extent related to the manufacture of Product or a Current Product Improvement
intended for use, sale or offer for sale in the Territory, (b) any documentation
relating to raw materials used in the manufacture of Product (or any components
thereof) or a Current Product Improvement intended for use, sale or offer for
sale in the Territory, or to the suppliers of such raw materials, and (c) any
batch records, flow diagrams, quality control or quality assurance records and
data, standard operating procedures, internal good manufacturing practices,
audits or assessments, correspondence with any Governmental or Regulatory
Authority and any Product Registrations, manuals and other manufacturing process
reports or documentation to the extent related to the Plant or to Product or a
Current Product Improvement intended for use, sale or offer for sale in the
Territory, but excluding any such items set forth on Schedule 1.01(b) of the
Elan Disclosure Schedule that (i) any applicable Law prohibits their transfer,
(ii) any transfer thereof would subject the Elan Companies or any of their
respective Affiliates to any Liability or (iii) are tax files, documents,
instruments, papers, books and records.

         "Manufacturing Process and Plant Registrations" means (i) the approvals
or registrations, which have been received by the Elan Companies as of the date
of this Agreement, or which are received by the Elan Companies after the date of
this Agreement but before the Closing Date, for the Plant and/or the equipment
or process(es) used to manufacture Product or a Current Product Improvement
intended for use, sale or offer for sale in the Territory (including all Drug
Master Files), and (ii) all dossiers, reports, data and other written materials
filed as part of such approvals or registrations, or maintained by the Elan
Companies and to the extent related to such approvals or registrations.

         "Marketing Authorizations" has the meaning set forth in Section
8.03(b).

         "Marketing Materials" means those items of advertising and promotional
materials and literature owned or controlled by the Elan Companies or their
respective Affiliates as of the Closing to the extent used in the advertising
and promotion of Product in the Territory.

                                      -9-
<PAGE>

         "Medicaid Rebate" means any rebate paid to any Governmental or
Regulatory Authority in respect of the Product.

         "Myocet Supply Agreement" means the Myocet(R) Toll Manufacturing and
Supply Agreement by and between Elan Pharma International Limited and the
Acquiror, a form of which is attached hereto as Exhibit C.

         "NDA" means a New Drug Application for any product, as appropriate,
requesting permission to place a drug on the market in accordance with 21 C.F.R.
Part 314, and all supplements or amendments filed pursuant to the requirements
of the FDA, including all documents, data and other information concerning a
product which are reasonably necessary for FDA approval to market a product in
the United States and any Canadian counterpart of a New Drug Application,
including a New Drug Submission made pursuant to Division 8 of the Food and
Drugs Act Regulations (Canada).

         "Net Sales Revenue" means gross amounts actually received, less any
applicable discounts, allowances, credits, chargebacks, rebates, taxes, duties,
freight and insurance charges and provisions for product returns.

         "NOC" means the notice of compliance issued by Health Canada notifying
a sponsor that the New Drug Submission has been evaluated by Health Canada and
that the product has been determined to comply with the applicable provisions of
Division 8 of the Food and Drugs Act Regulations (Canada).

         "Non-Assignable Asset" has the meaning set forth in Section 2.02(a).

         "Non-Real Estate Leases" has the meaning set forth in Section 6.16.

         "Notice" with respect to a party means notice actually received by an
officer, director or senior manager of Elan Parent or EPI, in the case of the
Elan Companies, or of Acquiror, in the case of Acquiror, in each case with
responsibility in the relevant area, or delivered in accordance with the terms
of the document, Law or Order pursuant to which such notice was given.

         "Notice of Objection" has the meaning set forth in Section 4.04(b).

         "Off-the-Shelf Software" means any application software that the Elan
Companies license for use in the Business, in any individual case, under a
license with a maximum payment obligation of less than $10,000.

         "Order" means any writ, judgment, decree, injunction or similar order,
including consent orders, of any Governmental or Regulatory Authority (in each
such case whether preliminary or final).

         "Ordinary Course of Business" means such action that is consistent with
the past practices of the Business (including with respect to quantity and
frequency).

         "Oversight Committee" has the meaning set forth in Section 8.13(a).

                                      -10-
<PAGE>

         "Parents" means Elan Parent and Acquiror.

         "Patent Assignment Agreement" means the Patent Assignment Agreement to
be dated as of the Closing Date by and between the Acquiror and EPI, a form of
which is attached hereto as Exhibit G.

         "Patent Rights" has the meaning attributed thereto in the License
Agreement.

         "Pension Plans" means "employee pension benefit plans" as defined in
Section 3(2) of ERISA.

         "Permitted Encumbrance" means, collectively, (a) Encumbrances for Taxes
or assessments which are not delinquent or are being contested in good faith by
appropriate proceedings, (b) statutory, warehousemen's and carriers' liens and
other similar Encumbrances arising in the ordinary course for obligations which
are not delinquent, and (c) the rights, if any, of third parties appearing in
product advertisements for the Product being transferred as part of the
Purchased Assets that are set forth on Schedule 1.01(c).

         "Person" means any natural person, corporation, general partnership,
limited partnership, limited liability company, proprietorship, joint venture,
other business organization, trust, entity, union, association or Governmental
or Regulatory Authority.

         "Plant" means the manufacturing plant and land located at 6925 Guion
Road, Indianapolis, Indiana 46268-2582 and all buildings, fixtures,
improvements, facilities or other structures located on such land and
appurtenances thereto, as described on Schedule C of the title insurance
commitment issued by Fidelity National Title Insurance Company of New York (File
No. 02-PHI-1328GD) and such other real property interest owned or ground teased
by the Elan Companies and their Affiliate contiguous to the above-described
property.

         "Plant Assets" has the meaning set forth in Section 2.01(a)(xiii).

         "Plant Contracts" has the meaning set forth in Section
2.01(a)(xiii)(D).

         "Plant Custom Software" means any computer software that has been
developed or designed exclusively or predominantly for use in the Plant, but not
including any accounting, finance or other software used by the Elan Companies
and their Subsidiaries generally in the operation of their business.

         "Plant Embedded Control" means any microprocessor, microcontroller,
smart instrumentation or other sensor, driver, monitor, robotic or other device
necessary for the operation of or predominantly used in the Plant that contains
a semiconductor, memory circuit, BIOS, PROM or other microchip, but not
including any such device used by the Elan Companies and their Subsidiaries
generally in the operation of their business.

         "Plant Employees" has the meaning set forth in Section 8.10(a).

                                      -11-
<PAGE>

         "Plant Liabilities" has the meaning set forth in Section 3.01(b).

         "Plant Licenses and Permits" has the meaning set forth in Section
2.01(a)(xiii)(M).

         "Plant Permitted Encumbrances" means those items listed on Schedule
1.01(d) hereto and statutory liens for real estate Taxes or other governmental
charges or assessments not yet due and payable.

         "Plant Personal Property" has the meaning set forth in Section
2.01(a)(xiii)(C).

         "Plant Reports and Plans" has the meaning set forth in Section
2.01(xiii)(L).

         "Plant Software Products" means (i) any computer software products
sold, distributed or marketed by the Elan Companies, other than Off-the-Shelf
Software, necessary for the operation of or predominantly used in the Plant, and
(ii) all computer operating, security or programming software that is owned by
or licensed to the Elan Companies and necessary for the operation of or
predominantly used in the Plant or that has been developed or designed for or is
in the process of being developed or designed for use and that is necessary for
the operation of or predominantly used in the Plant, but not including any
accounting, finance or other software used by the Elan Companies and their
Subsidiaries generally in the operation of their business.

         "Post-November 15 Adjustment" shall mean the greater of (a) (i) the Net
Sales Revenue of Product between November 15, 2002 and the Closing Date or
December 15, 2002, whichever is earlier (such Net Sales Revenue, "Post-November
15 Net Product Sales"), the product of (x) the number of weeks (or fraction
thereof) between November 15, 2002 and the Closing Date or December 31, 2002,
whichever is earlier, and (y) $1.5 million minus (ii) and (b) zero.

         "Pre-Closing Net Product Sales" has the meaning set forth in Section
4.01(b).

         "Pre-Closing Tax Date Period" means all taxable periods ending on or
before the Closing Date and the portion ending on the Closing Date of any
taxable period that includes (but does not end on) the Closing Date.

         "Pre-November 15 Adjustment" shall mean the product of (i) $1.5 million
and (ii) the number of weeks (or fraction thereof) between the Closing Date and
November 15, 2002.

         "Price Protection Payment" means any amount to be paid to a wholesaler
of the Product as a result of a decrease in the market price of such Product
after such Product has been sold to the wholesaler.

         "Product" shall mean that pharmaceutical product currently approved by
the U.S. Food and Drug Administration pursuant to NDA No. 50-724 or approved by
Health Canada pursuant to a NOC and issued DIN 02231950 and marketed in the
United States and Canada under the trademark ABELCET.

                                      -12-
<PAGE>

         "Product Books and Records" means copies of all files, documents,
instruments, papers, books and records, whether on paper or in electronic form
in a Database (but if in electronic format, not including any related software),
owned or Controlled by the Elan Companies or their respective Affiliates and
necessary for or to the extent related to the development of the Product or a
Current Product Improvement or the sale, marketing or distribution of the
Product or a Current Product Improvement in the Territory, including (a) all
market research, marketing plans, media plans, advertising, customer marketing
records, call lists or similar materials, pricing lists, current and prospective
customer lists and records, including principal contacts, addresses, telephone
numbers, purchasing history and payment information, and promotional and
marketing books and records, (b) any documentation evidencing or embodying the
Product Intellectual Property, and (c) any documentation to the extent related
to investigations being conducted with respect to the Product or a Current
Product Improvement, including pursuant to a Development Contract, or to the
receipt or maintenance of regulatory approvals for the Product or a Current
Product Improvement in the Territory (including study protocols, study plans,
pre-clinical and clinical study test results and data, and investigator and
study site lists and contact reports), but excluding any such items set forth on
Schedule 1.01(e) of the Elan Company Disclosure Schedule that (i) any applicable
Law prohibits their transfer, (ii) any transfer thereof would subject the Elan
Companies or any of their respective Affiliates to any Liability or (iii) are
tax files, documents, instruments, papers, books and records.

         "Product Improvement" shall mean any (a) line extension of the Product;
(b) new indication of the Product; (c) composition or matter or article of
manufacture consisting essentially of a chemical derivative of Amphotericin B;
(d) pharmaceutical combination containing the Product and another active
ingredient; (e) new formulations or new dosage forms comprising a lipid or
liposomal combination or formulation of Amphotericin B; (f) other combinations
or formulations comprising Amphotericin B, or any chemical derivatives thereof,
with respect to which the Elan Companies or their Affiliates are conducting or
have conducted clinical or pre-clinical research prior to the date hereof
(including any aerosol formulations of or combination products with Amphotericin
B); and/or (g) the making, having made, using, selling, offering for sale or
importing of such compositions of matter or articles of manufacture constituting
any of the foregoing. Product Improvements shall not include any composition of
matter or article of manufacture which contains or is made or manufactured using
any Excluded Technology.

         "Product Intellectual Property" means the Copyrights, the Product
Patent Rights, the Product Know-How and the Product Trademarks.

         "Product Inventory" means the Finished Product Inventory, Raw Material
Product Inventory and Work-In-Progress Product Inventory.

         "Product Know-How" means the Product Specific Know-How and the Product
Related Know-How.

         "Product License Agreements" has the meaning set forth in Section
2.01(a)(ii).

         "Product Patent Rights" has the meaning attributed thereto in the
License Agreement.

                                      -13-
<PAGE>

         "Product Registrations" means (i) the approvals or registrations which
have been received by the Elan Companies as of the date of this Agreement, or
which are received by the Elan Companies after the date of this Agreement but
before the Closing Date, for the investigation, sale, distribution and/or
marketing of the Product or a Current Product Improvement in the Territory
(including any NDAs, INDs, NOCs and DINs), and (ii) all dossiers, reports, data
and other written materials filed as part of such approvals or registrations, or
maintained by the Elan Companies and relating to such approvals or
registrations.

         "Product Related Intellectual Property" has the meaning attributed
thereto in the License Agreement.

         "Product Related Know-How" has the meaning attributed thereto in the
License Agreement.

         "Product Related Patent Rights" has the meaning attributed thereto in
the License Agreement.

         "Product Specific Intellectual Property" has the meaning attributed
thereto in the License Agreement.

         "Product Specific Know-How" has the meaning attributed thereto in the
License Agreement.

         "Product Specific Patent Rights" has the meaning attributed thereto in
the License Agreement.

         "Product Supply Agreement" shall mean the Abelcet(R) Manufacturing and
Supply Agreement to be dated as of the Closing Date by and between Elan Pharma
International Limited and the Acquiror, a form of which is attached hereto as
Exhibit B.

         "Product Trademarks" means the trademarks and trademark registrations
and registration applications for the Product in the Territory, any associated
logos and any Internet domain names in the Territory including such trademarks
or any portions thereof, in each case to the extent Controlled by the Elan
Companies or their Affiliates, including those trademarks, trademark
registrations and registration applications, logos and Internet domain names
identified on Schedule 1.01(f) hereto (the "Scheduled Product Trademarks") but
not including any Corporate Names.

         "PROMDAS" has the meaning set forth in the License Agreement.

         "Purchase Price" has the meaning set forth in Section 4.01(a)(i).

         "Purchased Assets" has the meaning set forth in Section 2.01(a).

         "Raw Material Inventory" means all materials used in the manufacture of
a finished pharmaceutical Product that is formulated, labeled or otherwise
inteneded for use, sale or offer for sale, whether held at a location or
facility of the Elan Companies or any Affiliate thereof (or of any

                                      -14-
<PAGE>

other Person on behalf of the Elan Companies or any Affiliate thereof) or in
transit to or from the Elan Companies or any Affiliate thereof (or any such
other Person).

         "Raw Material Non-Product Inventory" means all Raw Material Inventory
of any pharmaceutical product produced at the Plant other than Product owned as
of the Closing Date by the Elan Companies or any Affiliate thereof.

         "Raw Material Product Inventory" means all Raw Material Inventory of
Product owned or controlled as of the Closing Date by the Elan Companies or any
Affiliate thereof.

         "Real Estate Leases" has the meaning set forth in Section 6.20(g).

         "Registrations" means the Product Registrations and the Manufacturing
Process and Plant Registrations.

         "Related Agreements" means each agreement whose form is set forth as an
Exhibit to this Agreement.

         "Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing or
migration of a Hazardous Material into the Environment.

         "Sales Force Employees" has the meaning set forth in Section 8.10(a).

         "Scheduled Product Patent Rights" means those Product Patent Rights
specifically scheduled on Schedule A and B of the License Agreement.

         "Second Ampho B Source" has the meaning set forth in Section 8.03(e).

         "Service Contracts" has the meaning set forth in Section 6.20(h).

         "Site" means any of the real properties, including all soil, subsoil,
surface waters and groundwater thereat and improvements thereon, currently or
previously owned, leased or operated by the Elan Companies in connection with
the Product or the Purchased Assets, any predecessors of the Elan Companies in
connection with the Product or the Purchased Assets, or any entities previously
owned by the Elan Companies in connection with the Product or the Purchased
Assets, including the Plant.

         "Subsidiary" of a Person means any entity Controlled by that Person.

         "Supply Agreements" means the Product Supply Agreement and the Myocet
Supply Agreement.

         "Supply Contracts" has the meaning set forth in Section
2.01(a)(xiii)(H).

                                      -15-
<PAGE>

         "Taxes" means all of the following in connection with the operations of
the Business or the Plant or the transactions contemplated hereby: (i) any net
income, alternative or add-on minimum tax, gross income, gross receipts, sales,
use, value added, ad valorem, transfer, franchise, profits, license, excise,
severance, stamp, occupation, premium, property, environmental or windfall
profit tax, capital tax, customs duty or other tax, governmental fee or other
like assessment imposed by any governmental, regulatory or administrative entity
or agency responsible for the imposition of any such tax (domestic or foreign);
(ii) any Liability for the payment of any amounts of the type described in (i)
as a result of being a member of any affiliated, consolidated, combined, unitary
or other group for any Taxable period; and (iii) any Liability for the payment
of any amounts of the type described in (i) or (ii) as a result of any express
or implied obligation to indemnify any other Person.

         "Tax Return" means any return, declaration, report, claim for refund or
information return or statement filed with a Governmental or Regulatory
Authority relating to Taxes, including any schedule or attachment thereto, and
including any amendment thereof.

         "Termination Date" has the meaning set forth in Section 12.01(b).

         "Territory" means the United States of America, Canada, Puerto Rico and
any territory or possession of the United States of America or Canada.

         "Third Party Accounting Firm" has the meaning set forth in Section
4.04(b).

         "Third-Party Claim" has the meaning set forth in Section 11.02(d).

         "Trademark Assignment Agreement" means the Trademark Assignment
Agreement to be dated as of the Closing Date by and between the Acquiror and
EPI, a form of which is attached hereto as Exhibit E.

         "Transferred Assets" means the Purchased Assets, together with all
assets conveyed, assigned, transferred, licensed or sublicensed by the Elan
Companies or their Affiliates to the Acquiror or its Affiliates pursuant to the
Related Agreements.

         "WARN Act" means the Workers Adjustment and Retraining Notification Act
of 1988.

         "Welfare Plans" means "welfare benefit plans" as defined in Section
3(1) of ERISA.

         "Work-In-Progress Inventory" means all works in progress of a finished
pharmaceutical product, whether held at a location or facility of the Elan
Companies or any Affiliate thereof (or of any other Person on behalf of the Elan
Companies or any Affiliate thereof) or in transit to or from the Elan Companies
or any Affiliate thereof (or any such other Person).

         "Work-In-Progress Non-Product Inventory" means all Work-In-Progress
Inventory of any pharmaceutical product produced at the Plant other than Product
owned as of the Closing Date by the Elan Companies or any Affiliate thereof.

                                      -16-
<PAGE>

         "Work-In-Progress Product Inventory" means all Work-In-Progress
Inventory of Product owned or controlled as of the Closing Date by the Elan
Companies or any Affiliate thereof.

         Section 1.02. Construction of Certain Terms and Phrases. Unless the
context of this Agreement otherwise requires: (a) words of any gender include
each other gender; (b) words using the singular or plural number also include
the plural or singular number, respectively; (c) the terms "hereof," "herein,"
"hereby" and derivative or similar words refer to this entire Agreement; (d) the
terms "Article" or "Section" refer to the specified Article or Section of this
Agreement; (e) the term "or" has, except where otherwise indicated, the
inclusive meaning represented by the phrase "and/or"; and (f) the term
"including" means "including without limitation." Whenever this Agreement refers
to a number of days, such number shall refer to calendar days unless Business
Days are specified.

                                   ARTICLE II

                           PURCHASE AND SALE OF ASSETS

         Section 2.01. Purchase and Sale of Assets at the Closing. (a) Subject
to the terms and conditions of this Agreement, at the Closing, the Elan
Companies shall, jointly and severally, transfer and deliver to the Acquiror or
one or more designated Subsidiaries of Acquiror, and the Acquiror or one or more
designated Subsidiaries of Acquiror shall acquire and accept from the Elan
Companies, all of the Elan Companies' right, title and interest, in and to the
following assets free and clear of all Encumbrances, other than Permitted
Encumbrances (collectively the "Purchased Assets"):

         (i) rights and obligations of the Elan Companies under each of the
     Contracts for the development of aerosol formulations, combinations,
     therapies, comparative trials, and safety studies for the Product or a
     Current Product Improvement, by way of assignment and/or subcontract, in
     each case as set forth on Schedule 2.01(a)(i) (the "Development
     Contracts"); it being understood that the rights and obligations of the
     Elan Companies under the Development Contracts are to be transferred at the
     Closing from the Elan Companies to the Acquiror, and the Elan Companies
     retain all rights to all data, information and any intellectual property
     for use outside of the Territory;

         (ii) rights of the Elan Companies under each of the Contracts relating
     to the license of intellectual property and the performance of related
     research services, by way of assignment and/or sublicense, in each case as
     set forth on Schedule 2.01(a)(ii) (the "Product License Agreements"); it
     being understood that the rights and obligations of the Elan Companies
     under the Product License Agreements are to be divided at the Closing
     between the Elan Companies and the Acquiror so that Acquiror acquires and
     assumes all such rights and obligations within the Territory, and the Elan
     Companies retain all such rights and obligations for use outside of the
     Territory;

         (iii) all rights of the Elan Companies under the Contracts for
     distribution of the Product in the Territory, by way of assignment and/or
     subcontract, in each case as set forth on Schedule 2.01(a)(iii) (the
     "Distribution Contracts" and, together with the Development

                                      -17-
<PAGE>

     Contracts, the Product License Agreements, the Contracts responsive to
     Section 2.01(a)(xii), the Plant Contracts and the Supply Contracts, the
     "Assumed Contracts");

         (iv) all Marketing Materials;

         (v) all Product Books and Records;

         (vi) all Finished Product Inventory and Finished Non-Product Inventory;

         (vii) the license and/or ownership rights to all Product Intellectual
     Property, as set forth in the License Agreement, the Trademark Assignment
     Agreement, the Canadian Trademark Assignment Agreement and the Patent
     Assignment Agreement;

         (viii) all Copyrights;

         (ix) all Product Registrations;

         (x) all legally transferable rights under Governmental Permits;

         (xi) all rights related to any prepaid expenses of or predominantly
     related to the Business;

         (xii) any other assets and Contracts set forth on Schedule
     2.01(a)(xii); and

         (xiii) the following assets (the "Plant Assets"):

               (A) the Plant;

               (B) security deposits and assignments of all security deposits,
         if any, with respect to the Plant (but not the Plant Employees),
         leases, lease guaranties, assignment of leases and lease guaranties;

               (C) all fixed assets, fixtures, vehicles, trailers, leasehold
         improvements, tooling, machinery, equipment, furniture, furnishings,
         appliances, signs, tools, and other personal property and all plumbing,
         heating, air conditioning, security, mechanical, electrical and all
         other systems and equipment and all component parts thereof, owned by
         Elan Companies and located in, or attached to, or used at the Plant
         (collectively, "Plant Personal Property");

               (D) all service contracts, maintenance contracts, operating
         contracts, listing agreements, commission agreements, equipment leases,
         warranties and/or guaranties, agreements relating to the construction
         of any unfinished improvements and like contracts and agreements
         necessary for the operation of the Plant or relating predominantly to
         the Plant, including those listed on Schedule 2.01(a)(xiii)(D)
         (collectively, "Plant Contracts") and the assignments or subcontract of
         all Plant Contracts;

                                      -18-
<PAGE>

               (E) all Plant Software Products, Plant Embedded Controls and
         Plant Custom Software (including documentation and related object and
         source codes);

               (F) all legally transferable Governmental Permits necessary for
         the operation of the Plant;

               (G) all manufacturing, warehouse and office supplies used
         predominantly in the Plant;

               (H) the Contracts for the supply of raw materials and relating
         predominantly to the manufacturing, packaging, labeling or storage of
         Product, by way of assignment or subcontract, in each case as set forth
         on Schedule 2.01(a)(xiii)(H) (the "Supply Contracts");

               (I) all rights related to any prepaid expenses of or related
         predominantly to the Plant;

               (J) all Manufacturing Process and Plant Books and Records;

               (K) all Manufacturing Process and Plant Registrations;

               (L) (a) preliminary, final and proposed building plans and
         specifications (including "as built" plans and drawings) and any and
         all other plans and specifications for the Plant, (b) surveys, grading
         plans, topographical maps, architectural and structural drawings and
         engineering, soils, seismic, environmental, geologic and architectural
         reports, studies and tests relating to the Plant, and (c) lock
         combinations, keys, passwords, operating manuals and technical data
         relating to the Plant ((a), (b), and (c) collectively, "Plant Reports
         and Plans");

               (M) all legally transferable rights under (a) licenses, permits,
         approvals, including building inspection approvals, variances, special
         use permits, certificates of occupancy, subdivision maps and
         entitlements issued, approved or granted by any Governmental or
         Regulatory Authority necessary for the operation of the Plant, (b)
         development rights, covenants, conditions and restrictions, reciprocal
         easement agreements and rights, area easement agreements and rights and
         other common or planned development agreements and rights necessary for
         the operation of the Plant and (c) other Governmental Permits relating
         to the Plant ((a), (b) and (c) collectively, "Plant Licenses and
         Permits");

               (N) all Raw Material Product Inventory, Raw Material Non-Product
         Inventory, Work-in-Progress Product Inventory and Work-in-Progress
         Non-Product Inventory; and

                                      -19-
<PAGE>

               (O) all other Assets or Properties and Contracts necessary for
         the operation or ownership of the Plant and/or the Plant Personal
         Property, except as set forth on Schedule 2.01(a)(xiii)(M).

         (b) Notwithstanding anything to the contrary contained in this
Agreement, from and after the Closing, the Elan Companies shall retain all of
their right, title and interest in and to the following assets (the "Excluded
Assets"):

         (i) all cash and cash equivalents of the Elan Companies or any of their
     respective Affiliates;

         (ii) all Accounts Receivables of the Elan Companies or any of their
     respective Affiliates;

         (iii) the Corporate Names, except as expressly provided in Section
     8.07; and

         (iv) any refund or credit of Taxes attributable to any Pre-Closing Tax
     Period.

         (c) Notwithstanding anything to the contrary contained in this
Agreement, the Elan Companies may retain, at their expense, archival copies of
all Assumed Contracts, Plant Contracts, Supply Contracts, Books and Records,
Marketing Materials and other documents or materials conveyed hereunder;
provided, however, that the Elan Companies shall maintain such items in
accordance with the provisions of Section 8.06.

         Section 2.02. Assignability and Consents. (a) Notwithstanding anything
to the contrary contained in this Agreement, if the sale, assignment, transfer,
conveyance or delivery or attempted sale, assignment, transfer, conveyance or
delivery to the Acquiror of any Contract, Plant Contracts, Supply Contracts, the
Plant Personal Property and the Governmental Permits is (i) prohibited by any
applicable Law or (ii) would require any authorizations, approvals, consents or
waivers from a third Person or Governmental or Regulatory Authority and such
authorizations, approvals, consents or waivers shall not have been obtained
prior to the applicable Closing Date (each a "Non-Assignable Asset"), and in
either case, the Closing shall proceed, but the Closing shall not constitute the
sale, assignment, transfer, conveyance or delivery of Non-Assignable Asset, and
this Agreement shall not constitute a sale, assignment, transfer, conveyance or
delivery of such Contract unless and until such authorization, approval, consent
or waiver is obtained; provided that if any of the Purchased Assets set forth on
Schedule 2.02 shall constitute Non-Assignable Assets, the Acquiror shall have
the right not to consummate the Closing, but shall have no such right with
regard to any other Non-Assignable Assets. In the event that the Closing occurs
without the sale, assignment, transfer, conveyance or delivery of any
Non-Assignable Asset, then the Elan Companies shall continue to use commercially
reasonable efforts to obtain any Elan Third Party Consent or novation after the
Closing Date, and the Acquiror shall cooperate with the Elan Companies in any
economically feasible arrangement to the Elan Companies to provide that the
Acquiror shall receive the interest of the Elan Companies in the benefits under
such Non-Assignable Asset until such time as such Elan Third Party Consent or
novation shall have been obtained, and the Elan Companies shall cooperate with
the Acquiror in any such economically feasible arrangement, including
performance

                                      -20-
<PAGE>

by the Elan Companies as agent if economically feasible to the Elan Companies,
and that the Acquiror shall be liable to the Elan Companies in a fashion
economically equivalent to what the Acquiror's Liabilities would be under the
Non-Assignable Asset if it were assigned; provided, that the Acquiror shall only
be so liable to the Elan Companies to the extent that it correspondingly
receives benefits under such economically feasible arrangement.

         (b) The Elan Companies shall pay and discharge, and shall indemnify and
hold harmless the Acquiror and its Affiliates from and against, any and all
out-of-pocket costs of cooperation with Elan Companies seeking to obtain or
obtaining the Elan Third Party Consents whether before or after the Closing
Date. Once authorization, approval or waiver of or consent for the sale,
assignment, transfer, conveyance or delivery of any such Contract not sold,
assigned, transferred, conveyed or delivered at the applicable Closing is
obtained, the Elan Companies shall assign, transfer, convey and deliver such
Contract to the Acquiror at no additional cost to the Acquiror. Notwithstanding
anything to the contrary contained in this Agreement, the Acquiror shall not
assume any Liabilities under a Non-Assignable Asset until it has been assigned
to the Acquiror; provided, that the Acquiror will be liable to the Elan
Companies for performing its obligations under the economically feasible
arrangements described in Section 2.02(a); and provided, further, that the
Acquiror shall only be so liable to the Elan Companies to the extent that it
correspondingly receives benefits under such economically feasible arrangement.

                                   ARTICLE III

                            ASSUMPTION OF LIABILITIES

         Section 3.01. Assumption of Liabilities. (a) Subject to the terms and
conditions of this Agreement, as of the Closing Date, the Acquiror agrees to
assume, satisfy, perform, pay and discharge each of the following Liabilities
(the "Assumed Liabilities"):

         (i) all Liabilities arising out of any product liability, breach of
     warranty or similar claim for injury to person or property asserted on or
     after the Closing Date, which resulted from the use or misuse of the
     Product sold on or after the Closing Date (including all proceedings
     relating to any such liabilities);

         (ii) all Liabilities of the Elan Companies under the Assumed Contracts,
     but only to the extent such Liabilities arise from any event, circumstance
     or condition occurring in a period (or portion thereof) after the Closing;

         (iii) all Liabilities arising out of the return of the Product sold on
     or after the Closing Date, which are claimed on or after the Closing Date;

         (iv) all Liabilities arising out of any Chargebacks, Medicaid Rebates,
     Price Protection Payments or any other post-sale rebates, refunds, price
     adjustments or other similar credits or liabilities relating to the Product
     either (A) sold on or prior to the Closing Date which are claimed on or
     after the Closing Date, and that are based on practices introduced on or
     after the Closing Date or (B) sold after the Closing Date;

                                      -21-
<PAGE>

         (v) all Liabilities for Taxes arising out of or relating to, directly
     or indirectly, the Purchased Assets (including the Product) or the
     ownership, sale or lease of any of the Purchased Assets, other than the
     Excluded Tax Liabilities, and other than all liabilities for transfer Taxes
     for which the Acquiror is responsible pursuant to Section 4.03;

         (vi) all Liabilities arising out of user or other similar fees payable
     to the FDA or other Governmental or Regulatory Authority to the extent that
     such fees are payable on account of the operation of the Business on or
     after the Closing Date (and to the extent that the Elan Companies have paid
     any such fee prior to the Closing Date, the Acquiror shall promptly
     reimburse Elan Companies for such payment); and

         (vii) all other Liabilities arising out of or relating to, directly or
     indirectly, the Purchased Assets (including the Product), the ownership,
     sale or lease of any of the Purchased Assets, or any Assumed Liabilities,
     but only to the extent such Liabilities arise from any event, circumstance
     or condition occurring in a period (or portion thereof) after the Closing.

         (b) Subject to the terms and conditions of this Agreement, the Acquiror
also agrees to assume, satisfy, perform, pay and discharge each of the following
Liabilities (the "Plant Liabilities," which shall also constitute Assumed
Liabilities):

         (i) all Liabilities of the Elan Companies under the Plant Contracts and
     the Supply Contracts, but only to the extent such Liabilities arise from
     any event, circumstances or condition occurring in a period (or portion
     thereof) after the Closing;

         (ii) all Liabilities for Taxes directly arising out of or relating to
     the Plant Assets (including the Plant) or the ownership, sale or lease of
     any of the Plant Assets, other than the Excluded Tax Liabilities and other
     than all Liabilities for transfer Taxes for which the Elan Companies are
     responsible pursuant to Section 4.03; and

         (iii) all other Liabilities arising out of or relating to, directly or
     indirectly, the Plant Assets (including the Plant), the ownership, sale or
     lease of any of the Plant Assets, or any of the Plant Liabilities, but only
     to the extent such Liabilities arise from or with respect to any event,
     circumstance or condition occurring in a period (or portion thereof) after
     the Closing.

         (c) Notwithstanding anything contained in this Agreement to the
contrary, from and after the Closing Date, the Elan Companies shall retain all
of the following Liabilities ("Excluded Liabilities"):

         (i) accounts payable and Liabilities of the Elan Companies or any of
     their respective Affiliates for materials and services with respect to the
     manufacture of the Product or a Current Product Improvement incurred prior
     to the Closing Date;

         (ii) any Tax payable with respect to any business, assets, property or
     operation of the Elan Companies or any member of any affiliated group of
     which the Elan Companies are a

                                      -22-
<PAGE>

     member (including any Taxes relating to or arising out of the Purchased
     Assets or the operation of the Business) for any Pre-Closing Tax Period,
     other than any transfer Tax for which the Acquiror is responsible pursuant
     to Section 4.03 ("Excluded Tax Liability");

         (iii) any Liability of the Elan Companies or any of their respective
     Affiliates arising out of or relating to any Excluded Asset;

         (iv) all Liabilities arising out of any product liability, patent
     infringement, breach of warranty or similar claim for injury to person or
     property which resulted from the use or misuse of the Product sold prior to
     the Closing Date (including all proceedings relating to any such
     liabilities);

         (v) all Liabilities arising out of the return, government seizures,
     field corrections, withdrawals or recalls of the Product sold prior to the
     Closing Date, which are claimed prior to, on or after the Closing Date;

         (vi) all Liabilities arising out of any Chargebacks, Medicaid Rebates,
     Price Protection Payments or any other post-sale rebates, refunds, price
     adjustments or other similar credits or Liabilities relating to the
     Product, which are claimed prior to, on or after the Closing Date and based
     on practices introduced prior to the Closing Date;

         (vii) any federal, state, local or foreign income or other Tax payable
     with respect to the Business, the Purchased Assets or other properties or
     operations of the Elan Companies or any member of any affiliated group of
     which the Elan Companies are, or have been, a member for a period prior to
     the Closing Date;

         (viii) Liabilities arising from or pursuant to any Contracts as to
     which an Elan Third Party Consent is not obtained by the Closing Date
     regardless of whether the Acquiror waives delivery of such Elan Third Party
     Consent;

         (ix) any Liabilities to give credits or take other remedial actions for
     defective goods or services based upon Product sold prior to the Closing
     Date;

         (x) any Liabilities with respect to any litigation or other claims to
     the extent arising from any event, circumstance or condition occurring or
     alleged to have occurred on or before the Closing Date;

         (xi) any Liability with respect to the employees or independent
     contractors of the Elan Companies or their Affiliates, including any
     Liability with respect to the Employee Benefit Plans and any Liability with
     respect to the employment of Business Employees or the Canadian Sales Force
     Employees by the Elan Companies or any of their Affiliates;

         (xii) any Liabilities for severance or other obligations arising out of
     the termination of Business Employees, Canadian Sales Force Employees or
     any other former

                                      -23-
<PAGE>

     employees of the Elan Companies or their Affiliates by the Elan Companies
     or their Affiliates; and

         (xiii) all Liabilities arising out of user or other similar fees
     payable to the FDA or other Governmental or Regulatory Authority to the
     extent that such fees are payable on account of the operation of the
     Business prior to the Closing Date; and

         (xiv) any other Liability of the Elan Companies or any of their
     Affiliates that is not specifically listed as an Assumed Liability under
     this Section 3.01.

                                   ARTICLE IV

                           PURCHASE PRICE AND PAYMENT

         Section 4.01. Purchase Price. (a) As consideration for the Purchased
Assets, at the Closing, the Acquiror shall:

         (i) deliver or cause to be delivered to the Elan Companies the sum of
     $370 million, payable on the Closing Date by electronic funds transfer of
     immediately available funds to the accounts of such entities as are
     designated by the Elan Companies not less than two Business Days prior to
     the Closing Date (the "Purchase Price"); and

         (ii) assume the Assumed Liabilities.

         (b) At the Closing, the Purchase Price shall be (i) decreased by the
lesser of (x) the dollar amount of Net Sales Revenue of Product in the Territory
by the Elan Companies from the date of this Agreement until the earlier of the
Closing Date and November 15, 2002("Pre-Closing Net Product Sales") and (y) $10
million, (ii) if the Closing Date shall be earlier than November 15, 2002, the
Purchase Price shall also decreased by the Pre-November 15 Adjustment. If the
Closing Date shall be later than November 15, 2002, decreased by the
Post-November 15 Adjustment.

         Section 4.02. Allocation of Purchase Price. The Purchase Price shall be
allocated among the Purchased Assets in accordance with Section 1060 of the
Code, and the Acquiror and the Elan Companies agree (a) to report the sale and
purchase of the Purchased Assets for Tax purposes in accordance with such
allocations and (b) not to take any position inconsistent with such allocations
on any of their respective tax returns. The Elan Companies shall initially
determine and send written notice to the Acquiror of the allocation of the
Closing Purchase Price within 60 days following the execution of this Agreement.
The Acquiror will be deemed to have accepted such allocation unless it provides
written notice of disagreement to the Elan Companies within 10 days of receipt
of the Elan Companies' notice of allocation. If the Acquiror provides such
notice of disagreement to the Elan Companies, the parties shall proceed in good
faith to determine the allocation in dispute. If within 10 days after the Elan
Companies receive the Acquiror's notice of disagreement the parties have not
reached agreement, the Accountants shall be engaged to determine the final
allocation in dispute. The Elan Companies and the Acquiror shall share equally
the fees of such Accountants.

                                      -24-
<PAGE>

         Section 4.03. Payment of Sales, Use and Other Taxes. The Elan
Companies, on the one hand, and the Acquiror, on the other hand, shall share
equally all sales, use, transfer, value added and other related Taxes, if any,
arising out of the sale by the Elan Companies and their respective Affiliates of
the Purchased Assets to the Acquiror pursuant to this Agreement; provided,
however, that the Elan Companies shall pay all Indiana gross income taxes in the
form of tax stamps to be attached to the deed transferring the Plant at Closing
to the Marion County Treasurer's Office at the time of recording such deed at
Closing.

         Section 4.04. Closing Date Inventory Value Adjustments. (a) As promptly
as practicable, but in any event not later than 30 days after the Closing, the
Elan Companies shall prepare and deliver to the Acquiror a statement calculating
the Closing Date Inventory Value (the "Closing Date Inventory Value Statement").

         (b) During the 30 day period immediately following the Acquiror's
receipt of the Closing Date Inventory Value Statement, the Acquiror shall be
permitted to review the Elan Companies' books and records reasonably necessary
to the preparation of the Closing Date Inventory Value Statement. The Closing
Date Inventory Value Statement shall become final and binding upon the Acquiror
and the Elan Companies at the end of such 30 day period, unless the Acquiror
objects to the Closing Date Inventory Value Statement, in which case it shall
send written notice (the "Notice of Objection") to the Elan Companies within
such period, setting forth in specific detail the basis for its objection and
its proposal for any adjustments to the Closing Date Inventory Value Statement.
If a timely Notice of Objection is received by the Elan Companies, then the
Closing Date Inventory Value Statement shall become final and binding (except as
provided below with respect to resolution of disputes) on the Elan Companies and
the Acquiror on the first to occur of (x) the date the Elan Companies and the
Acquiror resolve in writing any differences they have with respect to the
matters specified in the Notice of Objection and (y) the date all matters in
dispute are finally resolved in writing by the Third Party Accounting Firm (as
defined), in each case as provided below. The Elan Companies and the Acquiror
shall seek in good faith to reach agreement as to any such proposed adjustment
or that no such adjustment is necessary within 10 days following receipt of the
Notice of Objection. If agreement is reached in writing within such 10 day
period as to all proposed adjustments, or that no adjustments are necessary, the
parties shall revise the Closing Date Inventory Value Statement accordingly. If
the Elan Companies and the Acquiror are unable to reach agreement within 10 days
following receipt of the Notice of Objection, then such certified public
accounting firm of national reputation other than the auditors of the Elan
Companies and the Acquiror as agreed upon by the Elan Companies and the Acquiror
(the "Third Party Accounting Firm") shall be engaged at that time to review the
Closing Date Inventory Value Statement, and shall make a determination as to the
resolution of any adjustments. The determination of the Third Party Accounting
Firm shall be delivered as soon as practicable following engagement of the Third
Party Accounting Firm, but in no event more than 30 days thereafter, and shall
be final, conclusive and binding upon the Elan Companies and the Acquiror and
the parties shall revise the Closing Date Inventory Value Statement accordingly.
The Elan Companies, on the one hand, and the Acquiror, on the other hand, shall
each pay one-half of the cost of the Third Party Accounting Firm. Within 10 days
of the date on which the Closing Date Inventory Value Statement becomes final
and binding on the Elan Companies and the Acquiror, the Acquiror shall pay the
Elan Companies the Closing Date Inventory Value Adjustment to

                                      -25-
<PAGE>

the Elan Companies, if positive, and the Elan Companies shall pay the Closing
Date Inventory Value Adjustment to the Acquiror, if negative.

                                    ARTICLE V

                                     CLOSING

         Section 5.01. Time and Place. Unless this Agreement is earlier
terminated pursuant to Article XII, the closing of the transactions contemplated
by Sections 2.01(a) and 3.01(a) of this Agreement, including the purchase and
sale of the Purchased Assets and the assumption of the Assumed Liabilities (the
"Closing"), shall take place as promptly as practicable, but no later than five
Business Days following satisfaction or waiver of the conditions set forth in
Articles IX and X, at 10:00 a.m. at the offices of Cahill Gordon & Reindel, 80
Pine Street, New York, New York 10005, unless another time or place shall be
agreed to by the parties (the "Closing Date").

         Section 5.02. Deliveries at Closing.

         (a) Closing Deliveries by the Elan Companies. At the Closing, the Elan
Companies shall deliver or cause to be delivered to the Acquiror:

         (i) the Bill of Sale;

         (ii) an original of each of the Related Agreements, executed by the
     Elan Companies party thereto, and copies of all documents required to be
     delivered by the Elan Companies pursuant to the Related Agreements;

         (iii) an unredacted, fully executed copy of each of the Assumed
     Contracts;

         (iv) the Product Registrations;

         (v) assignment and assumption agreements and/or subcontracts, as
     applicable, in form and substance reasonably acceptable to the Elan
     Companies and the Acquiror, assigning to the Acquiror all rights of the
     Elan Companies in and to the Assumed Contracts;

         (vi) copies of all Elan Governmental Consents set forth on Schedule
     5.02(a)(vi) (to the extent available in writing) and Elan Third Party
     Consents;

         (vii) a FIRPTA affidavit for EOI as required by Section 1445 of the
     Code for EOI;

         (viii) executed releases of any Encumbrances that are identified on
     Schedule 5.02(a)(viii); and

         (ix) a certificate signed by an officer of Elan Parent certifying as to
     the amount of Pre-Closing Net Product Sales and, if the Closing shall occur
     after November 15, 2002, Post-November 15 Net Product Sales.

                                      -26-
<PAGE>

         In addition, the Elan Companies shall use their commercially reasonable
efforts to deliver such other instruments and documents of conveyance and
transfer as shall be necessary and effective to transfer and assign to, and vest
in, the Acquiror all of the Elan Companies' right, title and interest in and to
the Purchased Assets and such other respective agreements and other documents,
instruments and certificates in addition to good standing certificates,
certified resolutions, receipts and such other items as may be reasonably
requested by the Acquiror. Simultaneously with such deliveries, all such
commercially reasonable steps will be taken by the Elan Companies as may be
required to put the Acquiror in actual possession and operating control of the
Purchased Assets.

         Furthermore, the Elan Companies shall use their commercially reasonable
efforts to obtain and deliver all approvals, consents and actions of, filings
with and notices to any Governmental or Regulatory Authority necessary (x) to
permit the Elan Companies to perform their obligations under this Agreement and
(y) for the parties to consummate the transactions contemplated hereby, as are
required under any Contract to which the Elan Companies are a party or by which
any of the respective Purchased Assets are bound.

         (b) Closing Deliveries by the Acquiror. At the Closing, the Acquiror
will deliver or cause to be delivered to the Elan Companies:

         (i) the Purchase Price in immediately available funds by wire transfer
     to an account or accounts that shall have been designated by the Elan
     Companies not less than two Business Days prior to the Closing Date;

         (ii) an original of each of the Related Agreements, executed by the
     Acquiror or its Affiliates party thereto, and copies of all documents
     required to be delivered by the Acquiror or its Affiliates pursuant to the
     Related Agreements;

         (iii) such instruments of assumption and other instruments or
     documents, in form and substance reasonably acceptable to the Elan
     Companies and the Acquiror, as may be necessary to effect the Acquiror's
     assumption of the Assumed Liabilities; and

         (iv) copies of all the Acquiror Governmental Consents (to the extent
     available in writing) set forth on Schedule 5.02(b)(iv).

         Additionally, the Acquiror shall use its commercially reasonable
efforts to deliver such other respective agreements and other documents,
instruments and certificates in addition to good standing certificates,
certified resolutions and such other items as may be reasonably requested by the
Elan Companies.

         Section 5.03. Deliveries Relating to the Plant.

         (a) Deliveries by the Elan Companies. At the Closing, the Elan
Companies shall deliver or cause to be delivered to the Acquiror the following
with respect to the Plant:

                                      -27-
<PAGE>

         (i) a special warranty deed including warranties against grantor's
     acts, bill of sale, FIRPTA affidavit of EOI, general assignment, vendor's
     and title affidavits, tenant notices, and all documents reasonably
     requested by the Acquiror's title company in connection with the purchase
     of the Plant;

         (ii) copies of all consents required to be obtained from, or filings
     required to be made with, any Governmental or Regulatory Authority or other
     Person in connection with the Plant Assets (to the extent available in
     writing);

         (iii) an original of each of the Plant Contracts and the Supply
     Contracts;

         (iv) all the Plant Personal Property; and

         (v) ALTA owner's title insurance policies issued by a national title
     insurance company selected by Acquiror at regular rates (at Acquiror's
     expense) insuring Acquiror's fee simple title to the Plant, free and clear
     of all Encumbrances excepting only Plant Permitted Encumbrances, on the
     Plant and containing such affirmative insurance as the Acquiror may
     reasonably request.

         Additionally, the Elan Companies shall use their commercially
reasonable efforts to deliver such other respective agreements and other
documents, instruments and certificates in addition to good standing
certificates, certified resolutions, receipts and such other items as may be
reasonably requested by the Acquiror.

         (b) Prorations. Real estate Taxes, personal property Taxes, if
applicable, and water and sewer rents and charges (if any) against the Plant for
the year or quarter in which the Closing is held, shall be apportioned on a per
diem basis between the Acquiror and the Elan Companies as of the date of the
Closing, and all Tax adjustments shall be based on the fiscal year used by the
Taxing authority. Utility charges and other current charges in connection with
the Plant shall be apportioned in the same manner.

         (c) Deliveries by the Acquiror. The Acquiror shall use its commercially
reasonable efforts to deliver or cause to be delivered to the Elan Companies
such instruments of assumption and other instruments or documents, in form and
substance reasonably acceptable to the Elan Companies and the Acquiror, as may
be necessary to effect the Acquiror's assumption of the Plant Liabilities.

                                   ARTICLE VI

              REPRESENTATIONS AND WARRANTIES OF THE ELAN COMPANIES

         Each Elan Company represents and warrants, jointly and severally, to
the Acquiror as of (i) the date hereof and (ii) the Closing Date, except as to
certain representations and warranties which expressly speak as of a date
certain, which shall speak as of such date, subject to such exceptions as are
specifically disclosed in the disclosure schedule (referencing the appropriate

                                      -28-
<PAGE>

Sections hereof) supplied by the Elan Companies to the Acquiror and dated as of
the date hereof (the "Elan Disclosure Schedule"), as follows:

         Section 6.01. Organization, Etc. Each Elan Company is duly organized,
validly existing and, where applicable, in good standing under the laws of such
Elan Company's jurisdiction of organization and has all requisite power and
authority to own its assets and carry on the Business as currently conducted by
it. Each Elan Company is duly authorized to conduct its business and is in good
standing in each jurisdiction where such qualification is required, except for
any jurisdiction where failure to so qualify could not reasonably be expected to
have an Adverse Effect. The certificate of incorporation, bylaws or other
similar governing instruments and organizational documents (the "Charter
Documents") of the Elan Companies that have been delivered to the Acquiror on or
prior to the date hereof are effective under applicable Laws and are current,
correct and complete.

         Section 6.02. Authority of the Elan Companies. Each Elan Company has
all necessary corporate power and authority and has taken all actions necessary
to enter into this Agreement and to execute and deliver the Related Agreements
to which it is or will be a party and carry out the transactions contemplated
hereby and by the Related Agreements to which it is or will be a party. The
governing body of each Elan Company has taken all action required by Law and the
Charter Documents of each Elan Company and otherwise to be taken by it to
authorize (a) the execution and delivery of this Agreement and the Related
Agreements to which it is or will be a party and (b) the consummation of the
transactions contemplated hereby and by the Related Agreements to which it is or
will be a party. This Agreement has been duly and validly executed and delivered
by each Elan Company and, when executed and delivered by the Acquiror, will
constitute a legal, valid and binding obligation of each Elan Company
enforceable against it in accordance with its terms. When executed and delivered
by each Elan Company and each Affiliate to which it is a party and by the
Acquiror, each Related Agreement will constitute a legal, valid and binding
obligation of each Elan Company and each Affiliate to which it is a party
enforceable against it in accordance with its terms.

         Section 6.03. Consents and Approvals. (a) Schedule 6.03(a) of the Elan
Disclosure Schedule sets forth a complete and accurate list (the "Elan
Governmental Consents") of all material consents, waivers, approvals, Orders,
permits or authorizations of, or registrations, declarations, payments or
filings with, any Governmental or Regulatory Authority that are required by
(including those that are required by applicable Law or any court order) or with
respect to the Elan Companies or their respective Affiliates in connection with
the execution and delivery of this Agreement and the Related Agreements by the
Elan Companies or the performance of their respective obligations hereunder.

         (b) Schedule 6.03(b) of the Elan Disclosure Schedule sets forth a
complete and accurate list (the "Elan Third Party Consents") of all material
consents, waivers, approvals, or authorizations of, or notices to, any third
party (other than a Governmental or Regulatory Authority) that are required by
or with respect to the Elan Companies or their respective Affiliates in
connection with the execution and delivery of this Agreement and the Related
Agreements by the Elan Companies or the performance of their respective
obligations hereunder and thereunder.

                                      -29-
<PAGE>

         Section 6.04. Non-Contravention. The execution and delivery by the Elan
Companies of this Agreement does not, and the performance by them of their
respective obligations under this Agreement and the Related Agreements and the
consummation of the transactions contemplated hereby will not, except as would
not have an Adverse Effect:

         (a) conflict with or result in a violation or breach of any of the
     terms, conditions or provisions of the Charter Documents of any Elan
     Company;

         (b) conflict with or result in a violation or breach of any term or
     provision of any Law applicable to any Elan Company, the Business or the
     Purchased Assets; or

         (c) conflict with or result in a breach or Default (or an event which,
     with notice or lapse of time or both, would constitute a breach or Default
     in any material respect) under any Assumed Contract.

         Section 6.05. Contracts. Schedule 6.05 of the Elan Disclosure Schedule
sets forth a complete and correct list of each Contract to which each Elan
Company or any of its Affiliates is a party that is material to the research,
development, manufacture, marketing, sale or distribution of the Product or a
Current Product Improvement, or to the ownership and/or operation of the Plant,
and provides for aggregate annual payments, or has a value in excess, of
$10,000. The Elan Companies have delivered to the Acquiror complete and correct
copies of all such Contracts. Each of the Assumed Contracts is in effect and
constitutes a legal, valid and binding agreement, enforceable in accordance with
its terms, of the Elan Company party to such contract; and each Elan Company has
performed all of its required obligations under, and is not in violation or
breach of or Default under, each such Contract. To the Knowledge of the Elan
Companies, the other parties to such Contracts are not in violation or breach of
or in Default under any such Contract.

         Section 6.06. Intellectual Property Rights. (a) The Product
Intellectual Property set forth in Schedule 6.06(a) of the Elan Disclosure
Schedule constitutes all of the Product Patent Rights, schedulable Copyrights,
Scheduled Product Trademarks and schedulable Product Know-How that are necessary
to the operation of the Business as has been and is now being conducted. As of
the Closing Date, EPI owns or Controls all of the Product Intellectual Property
set forth on Schedule 6.06(a).

         (b) To the Elan Companies' Knowledge, the operation of the Business, in
the Territory, as has been and is now being conducted, does not presently
infringe or misappropriate the Patent Rights or Know-How of any Person and
neither any Elan Company, nor any Affiliates thereof, has received any written
notice from any Person, or has Knowledge of, any actual or threatened claim or
assertion to the contrary or of any facts or alleged facts which are likely to
serve as the basis for any such claim or assertion.

         (c) Any necesssary registration, maintenance and renewal fees due in
connection with the Scheduled Product Patent Rights and Scheduled Product
Trademarks have been paid in a timely manner and all necessary documents and
certificates in connection with the Scheduled Product Patent Rights and
Scheduled Product Trademarks have, for the purposes of maintaining such

                                      -30-
<PAGE>

Scheduled Product Patent Rights and Scheduled Product Trademarks, been filed in
a timely manner with the relevant Governmental or Regulatory Authorities.

         (d) The Product Intellectual Property set forth on Schedule 6.06(a) is
free and clear of all Encumbrances except Permitted Encumbrances, and no Person
other than the Elan Companies, including any current or former employee or
consultant of the Elan Companies, has any proprietary, commercial or other
interest in any of the Product Trademarks, Product Patent Rights, scheduled
Copyrights, or material Product Know-How. There are no existing agreements,
options, commitments, or rights with, of or to any Person to acquire or obtain
any rights to, any of the Product Trademarks, Product Patent Rights, scheduled
Copyrights or material Product Know-How.

         (e) EPI has the unrestricted right to assign, transfer and/or grant to
the Acquiror all rights in the Product Patent Rights and Scheduled Product
Trademarks that are being assigned, transferred and/or granted to the Acquiror
under this Agreement and the Related Agreements, in each case free of any rights
or claims of any Person and without payment of any royalties, license fees or
other amounts to any Person.

         (f) None of the Product Patent Rights are invalid and all are
subsisting and enforceable. None of the Product Patent Rights is currently
involved in any interference, reissue, reexamination, or opposition proceeding,
and neither any Elan Company, nor any of its Affiliates, has received any
written notice from any Person, or has Knowledge, of any actual or threatened
claim or assertion to the contrary, or of any facts or alleged facts which are
likely to serve as a basis for any such claim or assertion.

         (g) Solely as it relates to the Product or a Current Product
Improvement or the manufacture of the Product or a Current Product Improvement,
to the Knowledge of the Elan Companies, there are no blocking Patent Rights
owned or under the control of any Person that are not being licensed or assigned
to Acquiror hereunder.

         (h) To the Knowledge of the Elan Companies, there is no unauthorized
use, infringement or misappropriation of any of the Product Patent Rights or
material Product Know-How by any Person, including any current or former
employee or consultant of the Elan Companies, nor is there any material breach
of any license, sublicense or other Contract authorizing any Person to use such
Product Patent Rights or material Product Know-How.

         (i) There are no Actions or Proceedings (including any inventorship
challenges) pending or to the Knowledge of the Elan Companies threatened with
respect to any of the Scheduled Product Patent Rights nor have any such Actions
or Proceedings been brought during the past five (5) years. Schedule 6.06(i)
sets forth any and all settlements or agreements reached with respect to any
such Actions or Proceedings.

         (j) Solely as it relates to the Product or a Current Product
Improvement or the manufacture of the Product or a Current Product Improvement,
the Elan Companies have not entered into any Contract (i) granting any Person
the right to bring infringement actions with respect to, or otherwise to enforce
rights with respect to, any of the Product Intellectual Property, or (ii)
expressly

                                      -31-
<PAGE>

agreeing to indemnify any Person against any charge of infringement of any of
the Product Intellectual Property.

         (k) The Elan Companies have not entered into any Contract granting any
Person the right to control the prosecution of any of the Scheduled Product
Patent Rights.

         (l) None of the Scheduled Product Trademarks is or has been the subject
of any opposition, cancellation, abandonment or similar proceeding, and
neither any Elan Company, nor any of its Affiliates, has received any written
notice from any Person, or has Knowledge, of any actual or threatened claim or
assertion to the contrary, or of any facts or alleged facts which are likely to
serve as a basis for any such claim or assertion.

         (m) To the Knowledge of the Elan Companies, there are no trademarks or
trademark registrations or applications of any Person that are interfering or
potentially interfering with the Scheduled Product Trademarks or any other
material Product Trademarks.

         (n) The Elan Companies have taken reasonable and customary measures to
maintain and protect, as applicable, the confidentiality of the Product Patent
Rights and material Product Know-How.

         (o) The Elan Companies have taken reasonable and customary measures,
with respect to marking the Scheduled Product Trademarks and material Copyrights

         (p) All current and former employees and consultants of the Elan
Companies who are or have been substantively involved in the design, review,
evaluation or development of the inventions embodied in the Product Trademarks,
Product Patent Rights, Copyrights or the material Product Know-How have executed
written Contracts or are otherwise obligated to protect the confidential status
and value thereof and to vest in the Elan Companies or their Affiliates
exclusive ownership of such Product Trademarks, Product Patent Rights or
material Product Know-How. The Elan Companies have provided the Acquiror with
true, correct and complete copies of all such Contracts and, to the Knowledge of
the Elan Companies, no such employee or consultant is in default under the terms
of any such Contract.

         (q) The employment by Acquiror of the Sales Force Employees or Canadian
Sales Force Employees who are material to the marketing of the Product or a
Current Product Improvement or Plant Employees who are material to the operation
of the Plant will, to the Knowledge of the Elan Companies, not be prohibited by
or cause the breach of any Contract with a Person that restricts or limits the
scope or type of work which, as applicable, the material Sales Force Employees,
Canadian Sales Force Employees or Plant Employees were engaged in as of the
Closing Date.

         (r) The Elan Companies, its Affiliates and its sublicensees have not
applied or utilized PROMDAS to formulate any composition of matter or article of
manufacture comprising Amphotericin B.

                                      -32-
<PAGE>

         (s) This Section 6.06 contains the only representations and warranties
of the Elan Companies regarding Product Intellectual Property in this Agreement
and the Related Agreements and no other provision hereof or thereof shall be
construed to contain any such representation or warranty.

         Section 6.07. Employee Matters. Schedule 6.07 of the Elan Disclosure
Schedule sets forth the names and titles of and current annual base salary or
hourly rate for each Business Employee and each Canadian Sales Force Employee,
together with a statement of the full amount and nature of any other
remuneration, whether in cash or kind, paid to each such person during the most
recent fiscal year or payable to each such person in the future, including the
bonuses accrued for each such person and the vacation and severance benefits to
which each such person is entitled.

         Section 6.08. Litigation. Except as would not have an Adverse Effect,
there are no Actions or Proceedings pending or threatened in writing or, to the
Knowledge of the Elan Companies, threatened orally against or in connection with
(i) the Purchased Assets or the Business; (ii) this Agreement or any Related
Agreement; or (iii) the transactions contemplated by this Agreement or any
Related Agreement. No Elan Company is subject to any Order that could reasonably
be expected to materially impair or delay the ability of such Elan Company to
perform its obligations hereunder or is in Default with respect to any court
order applicable to the Purchased Assets.

         Section 6.09. Environmental Matters. (a) Except as would not have an
Adverse Effect, the Elan Companies have obtained and hold all necessary
Environmental Permits required in connection with the Product, a Current Product
Improvement and the Purchased Assets.

         (b) Except as would not have an Adverse Effect, the Elan Companies are
in compliance with all terms, conditions and provisions of all applicable (i)
Environmental Permits, and (ii) Environmental Laws.

         (c) None of the Elan Companies has received any written notice
regarding any requirement proposed for adoption or implementation under any
Environmental Law applicable to the Product, a Current Product Improvement or
the Purchased Assets.

         (d) None of the Elan Companies has been advised in writing by any
Governmental or Regulatory Authority of any actual or potential change in the
status or terms and conditions of any Environmental Permit required for the
Product or the Purchased Assets either prior to or upon its renewal.

         (e) There are no pending or, to the Knowledge of the Elan Companies,
threatened Environmental Claims against the Elan Companies in connection with
the Product, a Current Product Improvement or the Purchased Assets, and the Elan
Companies are not aware of any facts or circumstances which would reasonably be
expected to form the basis for any Environmental Claim, which would have an
Adverse Effect, against the Elan Companies in connection with the Product, a
Current Product Improvement, Purchased Assets or any Site.

         (f) Except as would not reasonably be expected to give rise to an
Environmental Claim against the Elan Companies which would have an Adverse
Effect (i) no Releases of Hazardous

                                      -33-
<PAGE>

Materials have occurred at, from, in, to, on or under the Plant since June 30,
2000 and, to the Knowledge of the Elan Companies, prior to June 30, 2000 and
(ii) to the Knowledge of the Elan Companies no Hazardous Materials are present
in, on or migrating to or from any Site.

         (g) To the Knowledge of the Elan Companies, neither the Elan Companies,
any predecessor of the Elan Companies, nor any entity previously owned by the
Elan Companies, has transported or arranged for the treatment, storage, disposal
or transportation of any Hazardous Material in connection with operations at any
Site to any off-Site location, which would reasonably be expected to result in
an Environmental Claim against the Elan Companies which would have an Adverse
Effect.

         (h) To the Knowledge of the Elan Companies, no Site is a current or
proposed Environmental Clean-up Site.

         (i) There are no Encumbrances (other than Permitted Encumbrances)
imposed pursuant to any Environmental Law on any Site, and to the Knowledge of
Elan Companies, there are no facts, circumstances, or conditions that would
reasonably be expected to result in the imposition of Encumbrances under any
Environmental Law on any Site.

         (j) There are no (i) underground storage tanks, active or abandoned;
(ii) polychlorinated biphenyl-containing equipment; or (iii) friable asbestos
material at the Plant.

         (k) To the Knowledge of the Elan Companies, there have been no
environmental or health and safety investigations, studies, audits (internal or
by a third party consultant), tests or other analyses (including sampling
reports) (collectively, "Environmental Reports") which are in the possession of
the Elan Companies or their agents or representatives with respect to any Site
or any of the Purchased Assets, which have not been made available to the
Acquiror or its agents or representatives prior to execution of this Agreement,
and all such Environmental Reports so made available to the Acquiror or its
agents or representatives are listed in Schedule 6.09(k).

         (l) This Section 6.09 contains the only representations and warranties
of the Elan Companies regarding environmental matters in this Agreement and the
Related Agreements and no other provision hereof or thereof shall be construed
to contain any such representation or warranty.

         Section 6.10. Compliance with Law. (a) Except as would not have an
Adverse Effect, the Business is conducted by the Elan Companies and their
respective Affiliates in compliance with all applicable Law including the Social
Security Act, the rules and regulations and policies of the U.S. Department of
Health and Human Services, and all public health and safety provisions of state
Law and regulations, permits, governmental licenses, registrations, approvals,
concessions, franchises, authorizations, orders, injunctions and decrees and
applicable laws, including the FDA Act.

         (b) Except as would not have an Adverse Effect, all governmental
licenses, permits, registrations, Product Registrations, approvals, concessions,
franchises and authorizations principally employed in, or necessary to the
ongoing conduct of, the Business are in full force and effect.

                                      -34-
<PAGE>

         (c) Except as would not have an Adverse Effect, since June 30, 2000, no
Governmental or Regulatory Authority has served Notice on the Elan Companies or
any of their respective Affiliates that the Business (as of the date of this
Agreement) or the Transferred Assets were or are in violation of any Law or the
subject of any investigation.

         (d) Except as would not have an Adverse Effect, since June 30, 2000,
none of the Elan Companies or any of their respective Affiliates has received
written notice from any Governmental or Regulatory Authority that there are any
circumstances currently existing which would reasonably be expected to lead to
any loss of or refusal to renew any material governmental licenses, permits,
registrations, Product Registrations, approvals, concessions, franchises and
authorizations relating to the Product or the Transferred Assets on terms less
advantageous to the Elan Companies and their respective Affiliates than the
terms of those governmental licenses, permits, registrations, Product
Registrations, approvals, concessions, franchises and authorizations currently
in force.

         (e) (i) Except as would not have an Adverse Effect, the Business is
conducted in compliance with all applicable Laws in connection with the
preparation and submission to the FDA of each of the INDs or NDAs relating to
the Product or a Current Product Improvement (if any), and each of the INDs or
NDAs relating to the Product or a Current Product Improvement (if any) has been
approved by, and none of the Elan Companies or any of their respective
Affiliates has received any written Notice, or otherwise has Knowledge of any
facts, which have, or reasonably should have, led the Elan Companies to believe
that any of the INDs or NDAs relating to the Product or a Current Product
Improvement are not currently in good standing with, the FDA. The Elan Companies
or its Affiliates have filed with the FDA all required notices, supplemental
applications and annual or other reports, including adverse experience reports,
with respect to each IND or NDA relating to the Product or a Current Product
Improvement. With respect to the Product, the applicant of each IND or NDA
relating to the Product or a Current Product Improvement, and all Persons
performing operations covered by the application acted in compliance with 21
U.S.C. (Section) 355 or 357, 21 C.F.R. Parts 312 or 314 et seq., respectively,
and all terms and conditions of such applications and Division 8 of the Food and
Drugs Act Regulations (Canada).

         (ii) To the Knowledge of the Elan Companies or any of their Affiliates,
no Governmental or Regulatory Authority (including the FDA) has commenced or
threatened to initiate any action to withdraw the Product Registrations or
request the recall of the Product, or commenced or threatened to initiate any
action to enjoin production of the Product at any facility in the Territory, nor
have the Elan Companies or any of their Affiliates received any Notice to such
effect since June 30, 2000.

         (iii) All manufacturing operations conducted by the Elan Companies and
their respective Affiliates since June 30, 2000 relating to the manufacturing of
the Product have been conducted in compliance in all material respects with Good
Manufacturing Practices, 21 C.F.R. Parts 210 and 211 and the applicable
provisions of Division 2 of the Food and Drugs Act Regulations (Canada).

                                      -35-
<PAGE>

         (iv) The Elan Companies and their respective Affiliates have delivered
to the Acquiror copies of all (A) reports of FDA Form 483 inspection
observations, (B) establishment inspection reports, (C) warning letters, and (D)
other documents that assert ongoing lack of compliance in any material respect
with any applicable laws or regulatory requirements (including those of the
FDA), in each case to the extent received since June 30, 2000 by the Elan
Companies or any of the Elan Companies' Affiliates from the FDA or any other
Governmental or Regulatory Authority relating to the Product and/or arising out
of the conduct of the Business.

         (v) None of the Business Employees or Canadian Sales Force Employees,
nor any agents of the Elan Companies employed in the Business or at the Plant,
have been disqualified or debarred by the FDA for any purpose, or been charged
with or convicted under United States or Canadian federal Law for conduct
relating to the development or approval, or otherwise relating to the regulation
of any drug product under the Generic Drug Enforcement Act of 1992, the FDA Act
or any other relevant Law.

         (vi) To the Knowledge of the Elan Companies, no employees or agents of
the Elan Companies or any of their Affiliates have made an untrue statement of a
material fact to any Governmental or Regulatory Authority with respect to the
Product or a Current Product Improvement (whether in any submission to such
Governmental or Regulatory Authority or otherwise), or failed to disclose a
material fact required to be disclosed to any Governmental or Regulatory
Authority with respect to the Product or a Current Product Improvement.

         Section 6.11. Inventory. All of the Finished Product Inventory (a) is
good, issuable and merchantable in the Ordinary Course of Business, (b) was
produced or manufactured in accordance with the specifications for such Product
as set forth in the applicable Product Registrations and in compliance with
applicable Law and (c) has at least a 12 month shelf life. The Elan Companies at
Closing will have good and marketable title to the Inventory free and clear of
any Encumbrances other than Permitted Encumbrances.

         Section 6.12. Brokers. The Acquiror has no, and will have no,
obligation to pay any brokers (including real estate brokers), finders,
investment bankers, financial advisors or similar fees in connection with this
Agreement or the transactions contemplated hereby by reason of any action taken
by or on behalf of the Elan Companies.

         Section 6.13. Title to and Sufficiency of Transferred Assets. The Elan
Companies have good title to, or a valid and subsisting leasehold, license or
other contractual interest in or right to use, the tangible personal property
included in the Transferred Assets, subject to no Encumbrances (other than
Permitted Encumbrances). All tangible personal property (other than Product
Inventory) included in the Transferred Assets (including the Plant Assets) are
suitable for the purposes for which they are used, in good working condition,
reasonable wear and tear excepted, and are free from any known defects. The
Transferred Assets constitute all of the assets, Contracts, Governmental
Permits, rights and services required for the continued operation of the
Business by the Acquiror as operated by the Elan Companies during the past 12
months.

                                      -36-
<PAGE>

         Section 6.14. Financial Information. The Elan Companies delivered to
the Acquiror correct and complete copies of certain unaudited financial
information regarding the sales of the Product (the "Financial Information").
The Financial Information accurately presents the information for the periods
indicated, based upon the accounting principles, and subject to the limitations,
set forth on Schedule 6.14.

         Section 6.15. Certain Personal Property. Schedule 6.15 is a complete
schedule of all fixed assets of the Elan Companies necessary for the operation
of the Plant or for the proper functioning of the Sales Force Employees or the
Canadian Sales Force Employees, describing all items of tangible personal
property with a value of at least $25,000. All of such personal property
included on Schedule 6.15 is usable in the Ordinary Course of Business and
conforms in all material respects and will conform with any applicable Laws
relating to its construction, use and operation. Except for those items subject
to the Non-Real Estate Leases, no Person other than the Elan Companies owns any
vehicles, equipment or other tangible assets located on the Plant necessary for
the operation of the Plant or for the proper functioning of the Sales Force
Employees or the Canadian Sales Force Employees. Such assets set forth on
Schedule 6.15 are suitable for the purposes for which such assets are currently
used or are held for use and are in good working condition, subject to normal
wear and tear, and there are no facts or conditions affecting such assets that
interfere in any material respect with the operation of the Business.

         Section 6.16. Non-Real Estate Leases. Schedule 6.16 lists all tangible
assets and property necessary for the operation of the Plant or for the proper
functioning of the Sales Force Employees or the Canadian Sales Force Employees
(other than real property) that are possessed by an Elan Company under an
existing lease, including all trucks, automobiles, forklifts, machinery,
equipment, furniture and computers, except for any lease under which the
aggregate annual payments are less than $25,000 (each, an "Immaterial Lease").
Schedule 6.16 also lists the leases under which such assets and property listed
in Schedule 6.16 are possessed. All of such leases (excluding Immaterial Leases)
are referred to herein as the "Non-Real Estate Leases."

         Section 6.17. Insurance. Schedule 6.17 lists all policies or binders of
insurance held by or on behalf of the Elan Companies or their Affiliates and
relating to or covering risks of the Business, specifying with respect to each
policy the insurer, the amount of the coverage, the type of insurance, the risks
insured, the expiration date, the policy number and any pending claims
thereunder. These policies of insurance and the amounts of coverage on the
Purchased Assets are reasonable and customary in the industry and in relation to
the nature of the Purchased Assets. There is no Default with respect to any such
policy or binder, nor has there been any failure to give any notice or present
any claim under any such policy or binder in a timely fashion or in the manner
or detail required by the policy or binder. There is no Notice of non-renewal or
cancellation with respect to, or disallowance of any claim under, any such
policy or binder that has been received by the Elan Companies or their
Affiliates.

         Section 6.18. Customers and Suppliers. EPI has used reasonable business
efforts to maintain, and currently maintains, good working relationships with
all of the customers and suppliers of the Business. Schedule 6.18 specifies for
the year ending December 31, 2001 the names of the customers that were, in the
aggregate, the 20 largest customers in terms of dollar value of Products,

                                      -37-
<PAGE>

sold by the Business. None of such customers has given EPI Notice terminating,
canceling or threatening to terminate or cancel any Contract or relationship
with EPI relating to the Business. Schedule 6.18 also specifies for the year
ending December 31, 2001 the names of the suppliers of Amphotericin B, DMSO,
MeCl2 and lipids. None of such suppliers has given EPI Notice terminating,
canceling or threatening to terminate or cancel any Contract or relationship
with such EPI relating to the Business.

         Section 6.19. Operation of the Business; Description of the Business.
Since June 30, 2000 (a) the Business has been conducted only through EPI, EOI,
ECI and their respective predecessors and not through any other divisions or any
direct or indirect Subsidiary or Affiliate of EPI, EOI or ECI and (b) no part of
the Business has been operated by any Person other than EPI, EOI, ECI or their
respective predecessors. No Person other than EPI, EOI or ECI owns or possesses
any material Assets or Properties that have been used in the Business, other
than Persons who have granted to EPI, EOI, ECI or their respective predecessors
leasehold interests in or valid licenses to use other Assets or Properties used
in the Business pursuant to Contracts that are listed on Schedule 6.19. Neither
EPI, EOI or ECI nor any Subsidiary or Affiliate of EPI, EOI or ECI engages in
research, development, manufacture, distribution, marketing, sale or promotion
of Competitive Products in the Territory other than in the Business.

         Section 6.20. Plant Matters.

         (a) Title. EOI has good fee simple title to the Plant, free and clear
of all Encumbrances, except for Plant Permitted Encumbrances. The Plant
constitutes all of the real property necessary to manufacture the Product.

         (b) Regulatory Compliance. The Plant and the Elan Companies' operation
thereof materially comply with all applicable federal, state and local Laws,
regulations, codes, Orders, ordinances, rules, regulations and statutes and any
restrictive covenants applicable to the Plant. The Elan Companies have received
no written Notice from any Governmental or Regulatory Authority of any
violations of any federal, state or local Law, regulation or ordinance affecting
any portion of the Plant. The current zoning classification of the Plant is
I-2-S, and the current use of the Plant is legal.

         (c) Public Improvements. No assessment for public improvements has been
made with respect to the Plant which remains unpaid, including those for
construction of sewer, water, electric, gas or steam lines and mains, streets,
sidewalks and curbing. The Elan Companies know of no public improvements, which
have been ordered to be made or which have not heretofore been completed,
assessed and paid for.

         (d) No Mechanics' Liens. No material labor has been or will be
performed or material furnished for the Plant (i) for which the Elan Companies
have not heretofore fully paid, or (ii) for which a mechanic's or materialman's
lien or liens, or any other lien, can be claimed by any Person.

                                      -38-
<PAGE>

         (e) Condition of Improvements. The improvements included in the Plant
are (i) fit for their intended purposes, (ii) in good working order and
condition (wear and tear excepted), and (iii) in compliance in all material
respects with all applicable Laws.

         (f) Utilities. The Plant is served by public utilities and services in
the surrounding community, including police and fire protection, public
transportation, refuse removal, public education, and enforcement of safety
codes which are adequate in relation to the premises and location on which the
Plant is located. The Plant is serviced by public water and sewer systems which
are adequate in relation to the improvements and location on which the Plant is
located. All liquid and solid waste disposal, septic and sewer systems located
at the Plant are in good and safe condition and repair and in material
compliance with all applicable Laws.

         (g) Real Estate Leases. Attached hereto as Schedule 6.20(g) is a true,
correct and complete list of all leases, if any, for any portion of the Plant
(collectively, the "Real Estate Leases" and individually a "Real Estate Lease"),
identifying for each tenant the name, rent, amount of security deposit, prepaid
rent, lease commencement and termination dates, renewal options, option rent,
any rent escalation provisions and provisions pertaining to reimbursement for
operating costs and real estate taxes. All of the Real Estate Leases are in full
force and effect and there are no defaults thereunder. There are no leases,
tenancies, licenses or other rights of occupancy or use for any portion of the
Plant. No tenant has or has claimed any claim, offset, right of recoupment or
defense against the landlord under its Lease or otherwise. All obligations of
the landlord required to be performed under all Real Estate Leases prior to the
Closing Date, have been and will be fully performed by the Elan Companies. No
tenant has any option or right of first refusal to purchase all or any portion
of the Plant. The copies of the Real Estate Leases delivered to the Acquiror
prior to the date of this Agreement are true, correct and complete, and there
are no understandings, representations, warranties or promises with any of the
tenants which are not fully set forth in the copies of the Real Estate Leases
which have been delivered to the Acquiror.

         (h) Service Contracts. There are no management, service, equipment,
supply, maintenance or concession agreements with respect to or affecting the
Plant that will remain in effect after the sale of the Plant to the Acquiror
(the "Service Contracts"). The Elan Companies shall perform all of their
obligations under the Service Contracts through the date that the Plant is sold
to the Acquiror. The copies of the Service Contracts delivered to the Acquiror
prior to the date of this Agreement are true, correct and complete, and there
are no written understandings, representations, warranties, or promises with any
of the contractors that are not fully set forth in the copies of the Service
Contracts that have been delivered to the Acquiror.

         (i) Condemnation; Other Government Action. The Elan Companies have not
received any written Notice of any condemnation Action or Proceeding or other
Action or Proceeding in the nature of eminent domain with respect to the Plant,
and no such proceedings are threatened in writing or to the Elan Companies'
Knowledge, orally. The Elan Companies have received no written Notice of, nor do
they have any Knowledge of, any pending or threatened Action or Proceeding
relating to (i) zoning changes or (ii) increase in tax assessment. If the Elan
Companies receive any such written Notice or learn of any such Action or
Proceeding, the Elan Companies shall immediately notify the Acquiror in writing
of same. In the event of any such taking or threatened taking, Elan

                                      -39-
<PAGE>

Companies shall assign to Acquiror all of their right, title and interest in all
proceeds and awards payable in respect to such taking.

         (j) Flood Plain. The Plant is not located within a "flood plain area"
as defined by the United States government pursuant to the Flood Disaster
Protection Act of 1973, as amended.

         Section 6.21. No Other Warranties. EXCEPT FOR THE REPRESENTATIONS AND
WARRANTIES EXPRESSLY SET FORTH IN THIS AGREEMENT OR THE RELATED AGREEMENTS, THE
ELAN COMPANIES DISCLAIM ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, WITH REGARD TO
THE PRODUCT AND THE PRODUCT IMPROVEMENTS, THE TRANSFERRED ASSETS AND THE
BUSINESS, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE AND NON-INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS.

                                   ARTICLE VII

                 REPRESENTATIONS AND WARRANTIES OF THE ACQUIROR

         The Acquiror represents and warrants to the Elan Companies as of (i)
the date hereof and (ii) the Closing Date, except as to certain representations
and warranties which expressly speak as of a date certain, which shall speak as
of such date, subject to such exceptions as are specifically disclosed in the
disclosure schedule (referencing the appropriate Sections hereof) supplied by
the Acquiror to the Elan Companies and dated as of the date hereof (the
"Acquiror Disclosure Schedule") as follows: Section 7.01. Corporate
Organization. The Acquiror is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and has all requisite
corporate power and authority to own its assets and carry on its business as
currently conducted by it. The Acquiror is duly authorized to conduct its
business and is in good standing in each jurisdiction where such qualification
is required, except for any jurisdiction where failure to so qualify could not
reasonably be expected, individually or in the aggregate, to have a material
adverse effect on the Acquiror.

         Section 7.02. Authority of the Acquiror. The Acquiror has all necessary
power and authority and has taken all actions necessary to enter into this
Agreement and to carry out the transactions contemplated hereby. The Board of
Directors of the Acquiror has taken all action required by Law, its Charter
Documents, Bylaws or other organizational documents or otherwise to be taken by
it to authorize the execution and delivery of this Agreement by the Acquiror and
the consummation of the transactions contemplated hereby. This Agreement has
been duly and validly executed and delivered by the Acquiror and, when executed
and delivered by each Elan Company, will constitute a legal, valid and binding
obligation of the Acquiror enforceable against it in accordance with its terms.
When executed and delivered by each Elan Company and each Affiliate to which it
is a party and by the Acquiror, each Related Agreement will constitute a legal,
valid and binding obligation of the Acquiror enforceable against it in
accordance with its terms.

                                      -40-
<PAGE>

         Section 7.03. Consents and Approvals. Schedule 7.03 sets forth a
complete and accurate list of all material consents, notices, waivers,
approvals, Orders or authorizations of, or registrations, declarations or
filings with, any Governmental or Regulatory Authority that are required by the
Acquiror in connection with the execution and delivery of this Agreement by the
Acquiror or the performance of its obligations hereunder (the "Acquiror
Governmental Consents").

         Section 7.04. Non-Contravention. The execution and delivery by the
Acquiror of this Agreement does not, and the performance by it of its
obligations under this Agreement and the consummation of the transactions
contemplated hereby will not, except as would not have an Acquiror Adverse
Effect:

         (a) conflict with or result in a violation or breach of any of the
     terms, conditions or provisions of the Charter Documents of the Acquiror;

         (b) assuming the receipt of all consents, waivers, approvals, Orders or
     authorizations of Governmental and Regulatory Authorities required to be
     obtained by the Acquiror and the making of all registrations, declarations
     or filings with Governmental and Regulatory Authorities required to be made
     by the Acquiror, conflict with or result in a violation or breach of any
     term or provision of any Law applicable to the Acquiror; or

         (c) conflict with or result in a breach or Default (or an event which,
     with notice or lapse of time or both, would constitute a breach or Default)
     under, or result in the termination or cancellation of, or accelerate the
     performance required by, or result in the creation or imposition of any
     Encumbrance upon any Contract to which the Acquiror is a party or by which
     the Acquiror or any of its assets is bound.

         Section 7.05. Litigation. Except as would not have an Acquiror Adverse
Effect, there are no Actions or Proceedings pending or threatened in writing, or
to the Knowledge of the Acquiror threatened orally, against, relating to,
affecting or arising in connection with (i) this Agreement or any Related
Agreement or (ii) the transactions contemplated by this Agreement. The Acquiror
is not subject to any Order that could reasonably be expected to materially
impair or delay the ability of the Acquiror to perform its obligations
hereunder.

         Section 7.06. Brokers. The Elan Companies have no, and will have no,
obligation to pay any brokers, finders, investment bankers, financial advisors
or similar fees in connection with this Agreement or the transactions
contemplated hereby by reason of any action taken by or on behalf of the
Acquiror.

         Section 7.07. Financial Capability. As of the date of this Agreement,
the Acquiror and its subsidiaries have at least $400 million of cash, cash
equivalents and marketable securities with a maturity of less than one year.
Prior to the Closing, the Acquiror shall not permit such assets to fall below
$400 million, unless otherwise agreed to in writing with the Elan Parent.

         Section 7.08. No Other Warranties. EXCEPT FOR THE WARRANTIES EXPRESSLY
SET FORTH IN THIS AGREEMENT OR THE RELATED AGREEMENTS,

                                      -41-
<PAGE>

THE ACQUIROR DISCLAIMS ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS OR
IMPLIED, WITH REGARD TO THE SUBJECT MATTER OF SUCH AGREEMENTS, INCLUDING
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND
NON-INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS.

                                  ARTICLE VIII

                            COVENANTS OF THE PARTIES

         Section 8.01. Preservation of Purchased Assets; Limitations on
Distribution. (a) Except as otherwise contemplated by this Agreement or the
Related Agreements, from the date of this Agreement until the Closing Date,
without the prior written consent of the Acquiror (which consent shall not be
unreasonably withheld), the Elan Companies (i) shall not, and shall cause their
respective Affiliates not to, lease, license, mortgage, pledge or subject to any
Encumbrance any Purchased Asset and (ii) shall not, and shall cause their
respective Affiliates not to, transfer or grant any rights or options in or to
any of the Purchased Assets (other than Product Inventory).

         (b) In furtherance of and in addition to subsection (a), none of the
Elan Companies shall (i) except in the Ordinary Course of Business incur any
Liability which would be an Assumed Liability, (ii) except as contemplated by
this Agreement or the Related Agreements enter into, amend, modify, terminate
(partially or completely), grant any waiver under or give any consent with
respect to any Contract which would be an Assumed Liability or incur any
Liability which would be an Assumed Liability outside the Ordinary Course of
Business unless the executory obligation on the part of such Elan Company in any
such individual case is less than $10,000, (iii) violate, breach or Default
under, or take or fail to take any action that (with or without notice or lapse
of time or both) would constitute a violation or breach of, or a Default under
any term or provision of any material Contract, (iv) other than pursuant to or
in connection with its financing arrangements with its lenders create any
Encumbrance on any of the Purchased Assets, (v) except in the Ordinary Course of
Business, alter the salaries or other compensation payable to any Business
Employee or Canadian Sales Force Employee or (vi) sell Product in the Territory
other than in the Ordinary Course of Business and, to the extent the Closing has
not occurred by November 15, 2002, generate more than $1.5 million per week (or
fraction thereof) of Net Sales Revenue from such date. Each Elan Company shall
maintain and service the Purchased Assets consistent with past practice and use
its best commercially reasonable efforts to preserve intact the Business as it
is currently organized.

         Section 8.02. Commercially Reasonable Efforts. Following the date
hereof, each of the parties hereto shall use its commercially reasonable efforts
to take, or cause to be taken, all action, or to do, or cause to be done, all
things necessary, proper or advisable under applicable Laws to consummate and
make effective the transactions contemplated by this Agreement and to cause the
conditions to the obligations of the other party hereto to consummate the
transactions contemplated hereby to be satisfied at the Closing, including (i)
obtaining all consents and approvals of all Persons and Governmental or
Regulatory Authorities and removing any injunctions or other Encumbrances, other
than Permitted Encumbrances, on the Purchased Assets, impairments or delays the
obtaining or removal of which are necessary, proper or advisable to the
consummation of the transactions

                                      -42-
<PAGE>

contemplated by this Agreement and (ii) commercially reasonable efforts by Elan
Parent to prepare and disseminate to its shareholders a "Class 1 Circular" in
accordance with the requirements of the UK Listing Authority and the Dublin
Stock Exchange for the solicitation of the approval by Elan Parent's
shareholders of the transactions contemplated by this Agreement and the Related
Agreements, and to duly and promptly convene a meeting of such shareholders (the
"Elan Shareholders Meeting") for the purpose of voting on such approval and to
seek such shareholder approval.

         Section 8.03. Cooperation. (a) Following the date hereof, each party
shall cooperate fully with the other in preparing and promptly filing all
notices, applications, submissions, reports and other instruments and documents
that are necessary, proper or advisable under applicable Laws to consummate and
make effective the transactions contemplated by this Agreement, including the
Elan Companies' cooperation in the efforts of the Acquiror to obtain any
consents and approvals of any Governmental or Regulatory Authority required for
the Acquiror to be able to own the Purchased Assets. In any event, Elan
Companies shall have filed transfer letters with FDA for all Product
Registrations and for all Manufacturing Process and Plant Registrations no later
than five days after the Closing Date.

         (b) Following the date hereof, each party shall cooperate with and take
commercially reasonable actions required by Governmental or Regulatory
Authorities to permit the Elan Companies and their Affiliates outside the
Territory and the Acquiror and its Affiliates inside the Territory to obtain all
consents, approvals, registrations, certificates, permits, licenses or other
approvals of applicable Governmental or Regulatory Authorities required, (i) in
the case of the Elan Companies and their Affiliates, to export the Product from
the Territory and to import, market, promote, sell and distribute the Product in
any and all jurisdictions outside the Territory ("Marketing Authorizations") and
(ii) in the case of the Acquiror and its Affiliates, to market, promote, sell
and distribute the Product in the Territory. Such assistance may include
providing reasonable data, technical information, or other information owned or
controlled by such party and required by Governmental or Regulatory Authority to
obtain or maintain the Marketing Authorizations or Product Registrations, as the
case may be. Each party shall instruct its employees and financial advisors to
provide such cooperation to the other, it being understood that the requesting
party shall reimburse the responding party promptly for reasonable and necessary
out-of-pocket expenses incurred by the responding party in complying with any
such request by or on behalf of the requesting party.

         Solely with respect to the manufacture of the Product in the United
States, and additionally with respect to the Elan Companies, their Affiliates
and their sublicensees, solely as required by applicable law for any Marketing
Authorizations, each party hereby grants reference rights under all Product
Registrations, including, without limitation, any Drug Master File for the
Product to the Elan Companies, their Affiliates and their sublicensees or the
Acquiror, its Affiliates and their sublicensees and agrees to rights of
reference or their regulatory equivalent, as the case may be, and agrees to
execute or cause its Affiliates, sublicensees or agents to execute any necessary
authorization letters as may be reasonably required.

         (c) All rights afforded to the Elan Companies or their Affiliates under
this Section 8.03(b) and (c) are freely transferable, in whole or in part, with
that portion or the business,

                                      -43-
<PAGE>

assets or rights transferred by the Elan Companies or their Affiliates to which
such rights relate. Except as where such a change is not likely to cause the
Elan Companies or their Affiliates a material impact on a Product Registration
or Marketing Authorization or the right to make or have made provided for in the
License Agreement, the Acquiror shall not, without first consulting with the
Elan Companies where practical, make any material change in the Drug Master File
or the Product Registrations or Marketing Authorizations relating to the
Chemistry, Manufacturing and Control filings made as of the Closing Date. The
Elan Companies shall be provided ninety (90) days prior notice of any such
change.

         (d) The Elan Companies shall use commercially reasonable efforts (and
the Acquiror shall cooperate with the Elan Companies) to take all steps required
under the Food and Drugs Act (Canada) to ensure that the DEL is maintained in
full force and effect, including causing the holder of the DEL to prepare and
file an application to amend the DEL as a result of the transactions
contemplated by this Agreement and the Related Agreements, and to cause the
holder of the DEL to make all required filings and notices to Health Canada of
any changes to information previously reported to Health Canada arising out of
transactions contemplated by this Agreement and the Related Agreements.

         (e) Notwithstanding anything in this Agreement to the contrary, the
Elan Companies shall fully provide to Acquiror, and shall cause their
accountants to fully cooperate, at Acquiror's expense, in providing Acquiror on
or prior to the Closing, such audited financial statements for the three most
recent fiscal years concerning the Product, the Business, the Plant or such
other audited financial information as may be required by applicable Law to be
disclosed or reported by Acquiror concerning the Product, the Business, the
Plant or as may be reasonably requested by Acquiror in connection therewith.

         Commencing upon the date of this Agreement, in a reasonably prompt
manner and, working together, the parties shall identify an alternative supplier
of Amphotericin B and the Acquiror, at its sole cost and expenses shall take
such steps that are customary and reasonable in the industry to validate and
qualify such supplier as a supplier of Amphotericin B in each country outside of
the Territory where the Elan Companies have launched Abelcet (a "Second Ampho B
Source"). After the Acquiror has discharged its obligation in the prior
sentence, the Elan Companies shall, in a reasonably prompt manner and with
respect to each country outside of the Territory in which the Elan Companies
have launched Abelcet and at its sole cost and expense, obtain those approvals,
or as applicable waivers, required by applicable local Law as may be required to
permit the use of the Second Ampho B Source as a source of raw materials for
Abelcet in each country outside of the Territory in which the Elan Companies
have launched Abelcet. Between the date of the execution of this Agreement and
two (2) days prior to the Closing Date, the parties shall agree upon a schedule
for the validation and qualification of the Second Ampho B Source with respect
to each country outside of the Territory in which Elan has launched Abelcet. The
Aquiror and the Elan Companies shall consult with each other and shall provide
regular reports on the status of their respective activities under this
paragraph.

         (f) Notwithstanding anything herein to the contrary, none of the
parties may rely on the failure of any condition set forth in Article IX or
Article X, as applicable, to be satisfied if such

                                      -44-
<PAGE>

failure was caused by such party's failure to use its reasonable efforts to
consummate the transactions contemplated by this Agreement and the Related
Agreements, as required by and subject to this Section 8.03.

         Section 8.04. Risk of Loss. The Elan Companies shall bear all risk of
loss with respect to the Plant and the Plant Assets unless and until the Closing
occurs. If the Plant, the Plant Assets, or any part thereof, is damaged or
destroyed by fire, or other casualty prior to the Closing, then the Acquiror
shall have the right to receive assignment of all insurance proceeds, including
any applicable deductible.

         Section 8.05. Access. (a) From the date hereof until the Closing, Elan
Companies shall permit Acquiror and its representatives to have access, during
regular business hours and upon reasonable advance Notice, to the Transferred
Assets that will be transferred at the Closing and any associated aspects of the
Business and shall provide Acquiror with all assistance, information and data
reasonably requested by Acquiror in connection with Acquiror's rights and
obligations under Section 8.10 hereof, and shall permit the Sales Force
Employees, Canadian Sales Force Employees and Plant Employees to cooperate with
Acquiror in connection therewith, all subject to reasonable rules and
regulations of Elan Companies and any applicable Laws. Elan Companies shall
instruct their respective employees, counsel and financial advisors to cooperate
with Acquiror in its investigation of the Business, it being understood that
Acquiror shall reimburse Elan Companies promptly for reasonable and necessary
out of pocket expenses incurred by Elan Companies in complying with any such
request by or on behalf of Acquiror.

         (b) Upon the reasonable request of Elan Companies, Acquiror shall at
all times following the Closing, to the extent permitted by Law, grant to Elan
Companies and their respective representatives the right, during normal business
hours and upon reasonable prior Notice, to inspect and copy the Books and
Records and other documents in Acquiror's possession to the extent pertaining to
the operation of the Business prior to the Closing Date for Tax purposes and in
connection with Actions or Proceedings involving third parties (except as
otherwise stated in Section 8.05(c) below). Elan Companies shall maintain all
such Books and Records, and any information derived therefrom, as confidential
information of Acquiror in accordance with the provisions of Section 8.06 of
this Agreement.

         (c) Following the date hereof, each of the parties agrees to use
commercially reasonable efforts to keep and maintain all Books and Records and
other documents in existence on the Closing. Acquiror further agrees to make its
personnel and those of its Affiliates reasonably available to the other parties
or their respective representatives to the extent such access is reasonably
related to any Excluded Assets, or is otherwise reasonably necessary to comply
with the terms of this Agreement or to comply with any applicable Law, it being
understood that the parties requesting access shall reimburse the other party
promptly for its reasonable and necessary out-of-pocket expenses incurred in
complying with any such request.

         (d) Elan Companies agree to make personnel of Elan Companies or their
Affiliates reasonably available to Acquiror or its respective representatives to
the extent such access is reasonably related to any Purchased Assets, or is
otherwise reasonably necessary for Acquiror to

                                      -45-
<PAGE>

comply with the terms of this Agreement or to comply with any applicable Law, it
being understood that Acquiror shall reimburse Elan Companies promptly for their
reasonable and necessary out-of-pocket expenses incurred in complying with any
such request by or on behalf of Acquiror.

         (e) Acquiror, from time to time prior to the Closing, shall have the
right to inspect and investigate the Plant and audit and copy all existing
books, records, surveys, plans and all other materials relating to the Plant,
perform surveys, make engineering studies and perform whatever tests and
evaluations of the Plant as Acquiror may elect, all either independently or
through agents, representatives or contractors of Acquiror's choosing; provided,
however, that such actions shall not include the right to conduct any sampling
or testing, including, without limitation, sampling or testing of soil, surface
water, ground water or wastes or perform any other intrusive acts. Such
investigation by Acquiror may include: (i) matters relating to governmental and
other legal requirements with respect to the Plant, including taxes,
assessments, zoning, use permit requirements and building codes; (ii) compliance
with zoning, land use, building, environmental and other statutes, rules, or
regulations applicable to the Plant; (iii) the operation, management and
physical condition of the Plant, including the interior, the exterior, the
square footage of the improvements, the structure, the roof, the paving, the
utilities, and all other physical, functional and other aspects of the Plant;
and (iv) all matters relating to the income and operating or capital expenses of
the Plant and all related financial matters. In connection with any entry by
Acquiror or any of its agents, employees or contractors onto the Plant, Acquiror
shall give Elan Companies reasonable advance Notice of such entry and shall
conduct such entry and any inspections so as to reasonably minimize interference
with the business conducted therein.

         (f) At the Closing, Elan Companies shall deliver to Acquiror all
necessary photo-ready art (or its substantial equivalent) for all Marketing
Materials, and for all packaging and labeling for the Product in the Territory,
including all related artwork and inserts.

         Section 8.06. Public Announcements; Confidentiality. (a) Each of the
Elan Companies and the Acquiror agrees that, prior to the Closing, it and its
representatives shall keep the facts surrounding the negotiation of this
Agreement and the transactions contemplated hereby, any disclosures made herein
and hereunder, confidential and shall not disclose such information to any other
Person, except for its advisors, accountants, attorneys, consultants and agents
with a need to know and who agree to maintain the confidentiality of such
information, through a press release or otherwise (except as necessary to carry
out the terms of this Agreement or to the extent such information becomes public
information or generally available to the public through no fault of such party
or its Affiliates) without the prior written consent of the other party, unless
such party has been advised by counsel that disclosure is required to be made
under applicable Law or the requirements of a national securities exchange or
another similar regulatory body.

         (b) Each party shall not, and shall require that its Affiliates and its
and their distributors do not, use or reveal or disclose to third parties any
Confidential Information without first obtaining the written consent of the
other party, except as may be reasonably necessary in performing such party's
obligations or exercising such party's rights under this Agreement.
Notwithstanding the foregoing, each party may disclose any Confidential
Information to its Advisors and Affiliates and its and their distributors on a
need-to-know basis only, and such party shall be responsible for such

                                      -46-
<PAGE>

Persons' compliance with the provisions of this paragraph with respect thereto.
Each party shall take, and shall require its Advisors and Affiliates and its and
their distributors to take, reasonable steps to prevent any unauthorized use or
disclosure of any Confidential Information. The foregoing obligations in this
Section 8.06 shall not apply to information which (i) is or becomes a matter of
public knowledge through no fault of a party or any Person to whom such party
provided such information, (ii) is reasonably required to be disclosed in
connection with obtaining or maintaining Patent Rights or regulatory approvals
for the Product or a Current Product Improvement, or (iii) is required by Law to
be disclosed, provided that the disclosing party uses reasonable efforts to give
the other party advance written notice of such required disclosure in sufficient
time to enable the other party to seek confidential treatment for such
information, and provided further that the disclosing party limits the
disclosure to that information which is required to be disclosed. As used
herein, "Confidential Information" means all Know-How and any proprietary or
trade secret information or data relating to the Product or a Current Product
Improvement or such other information that either party identifies to the other
in writing as confidential.

         (c) From and after the date hereof until the Closing, the provisions of
the confidentiality agreement dated as of August 16, 2002 between the Elan
Parent and the Acquiror (the "Confidentiality Agreement") shall apply to any
information disclosed to the Acquiror pursuant to this Agreement or any Related
Agreement, or otherwise in connection with the transactions contemplated hereby,
except as otherwise provided by this Agreement (including Sections 8.05 and
8.10). Following the Closing, the Confidentiality Agreement will terminate in
its entirety, with no further obligation on the part of any party thereto. In
addition, the transactions contemplated by the Agreement shall not constitute a
breach or violation of the terms of the Confidentiality Agreement.

         Section 8.07. Corporate Names. (a) Except as set forth in this Section
8.07, Acquiror shall promptly, and in any event within 120 days after the
Closing Date, complete the revision of all advertising and promotional materials
and literature relating to the Product (i) to delete all references to the
Corporate Names and (ii) to delete all references to Elan Companies' or their
respective Affiliates' customer service address or phone number; provided,
however, that for a period of 120 days from the Closing Date Acquiror may
continue to distribute advertising and promotional materials and literature that
use the Corporate Names, addresses or phone numbers to the extent that such
advertising and promotional materials and literature exist on the Closing Date;
and provided, further, that the Corporate Names may remain on any advertising
and promotional materials and literature to the extent required by Law or any
Governmental or Regulatory Authority for any reason, including due to the fact
that one of the Elan Companies is the manufacturer of the Product. Subject to
the terms and conditions herein, Elan Companies hereby grant a non-exclusive
license to Acquiror and its Affiliates to use the Corporate Names on all
advertising and promotional materials and literature for the Product (including
any Promotional Materials), to the extent specified herein. Acquiror will
destroy its inventory of any remaining advertising and promotional materials and
literature in its possession bearing the Corporate Names, address, or phone
number, which Corporate Names, address and phone numbers are not deleted
pursuant to Section 8.07(a)(i) and (ii), within 140 days after the Closing Date.
In no event shall Acquiror use any of the Corporate Names after the Closing in
any manner or for any purpose different from the use of such Corporate Names by
Elan Companies during the 90-day period immediately preceding the Closing.

                                      -47-
<PAGE>

         (b) Acquiror shall be entitled to continue to use the existing Labeling
and packaging for the Product until such time as Acquiror has prepared and filed
with the appropriate regulatory authorities, and such authorities approve, if
required, new Labeling that does not contain references to the Corporate Names;
provided, however, that, if Acquiror does not prepare within 120 days after the
Closing Date final specifications for the revised Labeling and packaging for the
Product, including all necessary photo-ready art (or its substantial equivalent)
reflecting such modification, the right of Acquiror described in this sentence
shall terminate 120 days after the Closing Date. Subject to the terms and
conditions herein, Elan Companies hereby grant a non-exclusive right and license
to Acquiror to use the Corporate Names on Labeling and packaging for the Product
to the extent specified herein.

         (c) "Corporate Names" means the trademark "Elan," the Elan corporate
logo, and trade names of the Elan Companies, including the word "Elan" together
with variations and derivatives thereof and any other logos, symbols or
trademarks, trade names or service marks of the Elan Companies or their
respective Affiliates, but excluding the Product Trademarks.

         (d) The Elan Companies retain and shall retain all right, title and
interest in and to the Corporate Names. Acquiror expressly acknowledges that the
Elan Companies own the Corporate Names, and agrees that it will not attack,
dispute or contest the validity of or ownership of the Corporate Names, or any
registrations issued or issuing with respect thereto. Acquiror further agrees
that all use of the Corporate Names by Acquiror or its Affiliates shall be for
the benefit of Elan Companies and the goodwill accrued in connection with its
use of the Corporate Names shall accrue to Elan Parent and/or Elan Companies as
appropriate. In the event Acquiror acquires any rights relating to the Corporate
Names for any reason, Acquiror agrees to assign, at no cost, all such rights,
together with any related goodwill, to Elan Parent or Elan Companies as
appropriate. Acquiror shall use commercially reasonable efforts not to do any
act which should reasonably be expected to endanger, destroy or similarly affect
the value of the goodwill pertaining to the Corporate Names and further agrees
that it will use commercially reasonable efforts to maintain the same quality of
the Product as used by Elan Companies in the operation of the Business as of the
Closing for any Product sold under the Corporate Names. Acquiror will at any
time execute any documents reasonably required by Elan Companies to confirm Elan
Companies' ownership of all such rights in the Corporate Names. Acquiror shall
not use in connection with the Product, or allow any of its Affiliates to use in
connection with the Product, any other trademark or trade name which is similar
to or substantially similar to or so nearly resembles the Corporate Names as to
be likely to cause deception or confusion.

         Section 8.08. Product Trademarks. (a) Acquiror shall retain all right,
title and interest in and to the Product Trademarks in the Territory, and Elan
Companies shall retain all right, title and interest in and to any foreign
counterparts to the Product Trademarks outside of the Territory. Each party
expressly acknowledges that the other party owns its respective trademarks
relating to the Product and agrees that it will not attack, dispute or contest
the validity of such other party's ownership of such trademarks, or any
registrations issued or issuing with respect thereto. Each party shall use its
commercially reasonable efforts not to do any act which should reasonably be
expected to endanger, destroy or similarly affect the value of the goodwill
pertaining to the other party's trademarks relating to the Product and further
agrees that it will use commercially reasonable efforts

                                      -48-
<PAGE>

to maintain the same quality of the Product as used by Elan Companies in the
operation of the Business as of the Closing for any Product sold under such
trademarks. Each party shall not use in connection with the Product, or allow
any of its Affiliates to use in connection with the Product, any other trademark
or trade name which is similar to or substantially similar to or so nearly
resembles such trademarks as to be likely to cause deception or confusion.

         (b) The parties shall cooperate with each other and use commercially
reasonable efforts to protect their respective trademarks used in connection
with the Product from infringement by third parties. Without limiting the
foregoing, each party shall promptly notify the other party of any known,
threatened or suspected infringement, imitation or unauthorized use of or unfair
competition relating to such trademarks. Each party shall reasonably cooperate
with the other party in any action taken by the other party to enforce, or
defend, its respective rights in such trademarks, at the expense of such other
party.

         (c) Acquiror shall be solely responsible for determining the uses of
any Internet domain names included within the Product Trademarks in the
Territory. Elan Companies shall be solely responsible for determining the uses
of any Internet domain names not included in the Product Trademarks and outside
the Territory.

         Section 8.09. Regulatory Matters. (a) From and after the transfer by
Elan Companies to Acquiror of each Registration pursuant to the terms hereof,
Acquiror shall be solely responsible and liable for (i) taking all actions,
paying all fees and conducting all communication with the appropriate
Governmental or Regulatory Authority required by Law in respect of such
Registration, including preparing and filing all reports (including adverse drug
experience reports) with the appropriate Governmental or Regulatory Authority,
(ii) taking all actions and conducting all communication with third parties in
respect of the Product sold pursuant to such Registration (whether sold before
or after transfer of such Registration), including responding to all complaints
in respect thereof, including complaints related to tampering or contamination,
and (iii) investigating all complaints and adverse drug experiences in respect
of the Product sold pursuant to such Registration (whether sold before or after
transfer of such Registration).

         (b) Each of the parties shall make its facilities relating to the
Product available at reasonable times during normal business hours or as
otherwise required by Law for inspection by representatives of applicable
Governmental or Regulatory Authorities. Each of the parties shall notify the
other party within five days following receipt of any Notice of any FDA or other
Governmental or Regulatory Authority inspection, investigation or other inquiry,
or other material governmental Notice, involving the sale, manufacture or use of
the Product including any Notice that (a) raises any material concern regarding
the safety or efficacy, or manufacturing, of any raw materials, active
ingredients or the Product; (b) raises any material concern regarding FDA's or
any other Governmental or Regulatory Authority's acceptance of any data or
information submitted with respect to the Product, requests any additional data
or information with respect to the Product, or suggests that requests for
additional data or information may be forthcoming; (c) asserts a potential
material liability for either party to a third party arising in connection with
the Product; (d) asserts suspected or actual Product tampering or contamination
or other material problems with respect to the Product, (e) is reasonably likely
to lead to a recall or market withdrawal of the Product in any country; or (f)

                                      -49-
<PAGE>

concerns any on-going or potential FDA or other Governmental or Regulatory
Authority investigation, inspection, detention, seizure or injunction involving
the Product, including the receipt of any warning letter or untitled letter
relating to the Product. The parties shall cooperate with each other during any
such inspection, investigation or other inquiry. The parties shall discuss any
response to observations or notifications received in connection with any such
inspection, investigation or other inquiry and each party shall give the other
party an opportunity to comment upon any proposed response before it is made.
Each of the parties shall provide the other party with copies of all
correspondence received by it from, or filed by it with, any Governmental or
Regulatory Authority to the extent pertaining to the Product and/or its
distribution, marketing, sale or promotion.

         (c) Notwithstanding the foregoing or the joint written procedures, the
Acquiror shall exclusively have the right to determine regulatory strategies in
the Territory, and Elan Companies shall have such exclusive rights outside the
Territory.

         Section 8.10. Employee Matters. (a) As of the Closing Date, Acquiror
shall offer to employ on an at-will basis each of the sales force employees
selected pursuant to the selection procedures set forth on Schedule 8.10 (the
"Sales Force Employees") and each Plant employee set forth on Schedule 8.10 (the
"Plant Employees" and, together with the Sales Force Employees, the "Business
Employees"), in each case at a total cash compensation or hourly rate not less
than the total cash compensation or hourly rate then applicable to such employee
immediately prior to the Closing; provided, however, that the total cash
compensation or hourly rate in effect immediately before the Closing Date for
each Business Employee shall not be greater than the total cash compensation or
hourly rate set forth on Schedule 6.07 of the Elan Disclosure Schedule with
respect to such Business Employee. Each Business Employee who becomes employed
by Acquiror is herein referred to as a "Hired Employee". Elan Companies shall
reasonably permit representatives of the Acquiror to communicate and meet with
each prospective Hired Employee prior to the Closing Date for purposes of
recruitment and retention of such Hired Employee and other human
resources-related activities in preparation for Acquiror's acquisition of the
Business and the Plant, and the Elan Companies shall permit management-level
Plant Employees to cooperate with Acquiror on a reasonable basis for such
purposes.

         (b) Effective as of the Closing Date, all Hired Employees shall cease
participation in all Employee Benefit Plans.

         (c) Effective as of the date of hire by Acquiror (which date of hire of
any Hired Employee shall be the Closing Date unless such Hired Employee has
requested that such date of hire be a later date not more than two weeks from
the Closing Date), Hired Employees or Canadian Sales Force Employees who are
participants in the Elan 401(k) Savings Plan or a Canadian equivalent plan
(including a registered retirement savings plan) ("Elan's 401(k) Plan") shall
cease to be eligible for any future contributions to Elan's 401(k) Plan except
with respect to compensation from Elan Companies prior to the Closing Date and
as provided under Elan's 401(k) Plan, and shall be entitled to a distribution of
their account balances under Elan's 401(k) Plan in accordance with such plan and
as permitted by the Code. Hired Employees who receive an eligible rollover
distribution (within the meaning of Section 402(f)(2) of the Code, including a
direct rollover distribution with the meaning of Section 401(a)(31) of the Code)
from Elan's 401(k) Plan shall, subject to the provisions of Section

                                      -50-
<PAGE>

402 of the Code, be permitted to make a rollover contribution to a defined
contribution plan of Acquiror ("Acquiror's Defined Contribution Plan"). Such
rollover contribution may not include promissory notes for loans made to Hired
Employees under the terms of Elan's 401(k) Plan.

         (d) For purposes of eligibility and vesting, Acquiror shall, with
respect to vacation and 401(k) plans or Canadian equivalent plan (including an
equivalent registered retirement savings plan) maintained by Acquiror after the
Closing Date (if applicable to the Hired Employee or Canadian Sales Force
Employee), credit each Hired Employee or Canadian Sales Force Employee with all
service credited to the employee under Elan Companies' corresponding plan,
policy, program or arrangement applicable to such employee as of the Closing
Date; provided, however, that there will be no duplication by Acquiror of any
benefits provided by Elan Companies.

         (e) Hired Employees who shall have accepted as of the Closing Date
employment with Acquiror shall be eligible to enroll in a health plan determined
by the Acquiror as of the Closing Date without (i) any waiting periods, (ii) any
evidence of insurability, (iii) application of any pre-existing physical or
mental condition restrictions, or (iv) deductibles or co-pays, except to the
extent that such waiting periods, evidence of insurability, pre-existing mental
or physical condition restrictions, or deductibles or co-pays would apply under
EPI's Welfare Plans and be permitted by law. Elan Companies shall retain
responsibility for all payment of benefits under its medical benefit plan to
Hired Employees for claims incurred prior to the date of hire by Acquiror.
Acquiror shall be responsible for claims for medical benefits incurred on or
after the date of hire by Acquiror by Hired Employees under Acquiror's medical
benefit plan applicable to the Hired Employees. For purposes of the preceding
sentences, a claim shall be deemed to have been incurred on the date on which
medical or other treatment or service was rendered and not the date of inception
of the related illness or injury or the date of submission of a claim related
thereto. Acquiror's medical benefit plan shall provide that any medical expenses
incurred before the date of hire by Acquiror by a Hired Employee (and his or her
dependents) during the calendar year including the date of hire by Acquiror
shall be taken into account for purposes of satisfying the applicable
deductible, coinsurance and maximum out-of-pocket provisions of the Acquiror's
medical benefit plan.

         (f) Acquiror and Elan Companies expressly acknowledge and agree that
Acquiror shall be obligated, in respect of any Hired Employee terminated by the
Acquiror (i) for any reason on or after the date of hire, to pay all
Liabilities, including any liability triggered under any severance plans,
programs and agreements of Acquiror relating to Hired Employees under statute or
common law ("Acquiror Severance"), any liability relating to the violation of
any anti-discrimination law, and any employment compensation or
government-mandated benefits relating to the termination of any Hired Employees
on or after the date of hire by Acquiror, including under the WARN Act, the
Employment Standards Act (Ontario) or the common law and (ii) without cause
between and including the date of hire and six months following the Closing
Date, to pay all Liabilities that the Elan Companies would have been required to
pay under the Elan U.S. Severance Plan had the Elan Companies retained such
Hired Employee on or after the Closing Date and terminated such Hired Employee
on the date terminated by the Acquiror; provided, however that (i) such Hired
Employee was an active employee of the Elan Companies on the date of hire by the
Acquiror, (ii) such Hired Employee's employment terminated because of death,
retirement, resignation or job abandonment and (iii) such Hired Employee
executes a valid waiver and release in substantially the same form as the

                                      -51-
<PAGE>

Waiver and Release Agreement (as defined in the Elan U.S. Severance Plan) which
remains unrevoked by such Hired Employee for the seven-day revocation period.
Nothing in this Section 8.10 shall be construed as limiting the Acquiror's right
to terminate any Hired Employee at any time, with or without cause. Elan
Companies shall have no liability or obligation with respect to Acquiror
Severance for Hired Employees.

         (g) Acquiror shall be responsible for all liabilities, obligations,
costs, claims, proceedings and demands, under the WARN Act, the Employment
Standards Act (Ontario), the common law or any state or provincial plant closing
or notification law, or similar law in other jurisdictions, arising out of, or
relating to, any actions taken by Acquiror or its Affiliates on or after the
date of hire by Acquiror or arising out of the fact that Acquiror does not offer
employment to certain Business Employees.

         (h) .(i) Prior to the end of the one (1) year period following the
Closing, ECI shall provide appropriate notice in writing to its Canadian sales
force personnel for the Product ("Canadian Sales Force Employees") set forth on
Schedule 8.10(h) regarding the termination of their employment at the end of the
one (1) year period. ECI shall provide the Canadian Sales Force Employees with
appropriate termination notice or pay in lieu of notice, as required under the
provisions of the Employment Standards Act, 2000 and any other notice or pay in
lieu of notice as may be required at common law. At the end of the one (1) year
period, ECI will provide each member of the sales force personnel with an
appropriate record of employment. Elan Parent and its Affiliates remain
responsible regarding any and all liability, including liability under the
Ontario Employment Standards Act, 2000, the Human Rights Code and at common law
arising as a result of the employment of the Canadian sales force personnel with
Elan and its Affiliates and/or their termination.

         (ii) At or prior to the end of such one (1) year period, the Acquiror
shall offer employment to all the Canadian Sales Force Employees (or such other
employees who are ECI's Canadian sales force personnel for the Product at the
end of such period), up to a maximum of six (6) such individuals. The Acquiror
will offer employment to such persons at such compensation and on such terms as
the Acquiror deems appropriate and will provide each such hired person with such
benefits, holidays, vacation days, incentive pay and bonus programs as the
Acquiror deems appropriate; provided, however, that the total cash compensation
offered to such persons shall be no less than the total cash compensation they
are receiving from ECI as of the date of termination of their employment by
Elan, less any increases in such compensation during the immediately preceding
twelve (12) month period that are outside of the Ordinary Course of Business.
Elan Parent and its Affiliates will fully cooperate with the Acquiror in its
extension of such offers of employment and shall not prevent, discourage or
entice, directly or indirectly, any of the Canadian Sales Force Employees to
reject such offers of employment.

         Section 8.11. Bulk Transfer Laws. The Acquiror hereby waives compliance
by the Elan Companies and their respective Affiliates with the provisions of any
so-called "bulk transfer law" of any jurisdiction in connection with the sale of
the Purchased Assets to the Acquiror. The Elan Companies will defend, indemnify
and hold harmless the Acquiror for any Liabilities it suffers as a result of
such "bulk transfer laws" or such waiver in accordance with Section 11.02(a).

                                      -52-
<PAGE>

         Section 8.12. Covenant Not to Compete. (a) For the period from the date
hereof until ten (10) years following the Closing Date (the "Applicable
Period"), neither Parent nor any of their Subsidiaries, or its or their
respective successors or assigns or any of its or their respective agents acting
on their behalf, shall engage, license or assist another to engage in the
marketing, distribution or sale in the Territory, in the case of Elan Parent and
its Subsidiaries, or outside the Territory, in the case of the Acquiror and its
Subsidiaries, of any Product or Product Improvement (each, a "Competing
Product"). Notwithstanding the foregoing sentence, if either Parent or any of
their Subsidiaries signs a definitive agreement with respect to a merger or
acquisition by which such Person would acquire rights (other than residual
financial rights) in a Competing Product at any time during the Applicable
Period, then such Person (or the entity which acquired such Person or into which
such Person has merged) shall have 12 months from the closing of such definitive
agreement to divest itself of such rights in the Competing Product (unless the
other Party agrees in writing that such divestiture is not required) and, during
such 12 month period, the manufacture, promotion, marketing and/or sale of such
Competing Product shall not be in violation of this Section 8.12. In the case of
divestiture under the preceding sentence, such divestiture can occur by either
(x) an outright sale of all rights in Competing Product to a third party, or (y)
an out-license to a third party (exclusive as to the applicable Parent and its
Subsidiaries, except that the applicable Parent and its Subsidiaries may
continue manufacturing the Competing Product for the licensee for a reasonable
period of time) of the right to make, have made, use, sell, offer for sale and
import such Competing Product; provided, however, that the applicable Parent and
its Subsidiaries may only retain residual financial rights to such Competing
Product and must not exercise or have the ability to exercise any role or
influence in any manner over the performance of any clinical trials with respect
to such Competing Product, or the sale, offering for sale or other promotion of
such Competing Product.

         (b) In addition, no Elan Company will solicit any Hired Employee of the
Acquiror or its Subsidiaries for the purpose of having any such employee
terminate his or her employment with the Acquiror or its Subsidiaries for a
period of two years following the Closing Date.

         (c) If a court determines that the foregoing restrictions are too broad
or otherwise unreasonable under applicable Law, including with respect to time
or space, the court is hereby requested and authorized by the parties to revise
the foregoing restriction to include the maximum restrictions allowable under
applicable Law. Each of the parties acknowledges, however, that this Section
8.12 has been negotiated by the parties and that the geographical and time
limitations on activities, are reasonable in light of the circumstances
pertaining to the parties.

         (d) The terms of this Section 8.12 (subject to Section 8.12(f)) shall
apply to each Parent's respective Affiliates to the same extent as if they were
parties hereto, and each Parent shall take whatever actions are within its
control to cause any such other Persons to adhere to the terms of this Section
8.12.

         (e) In the event of any breach or threatened breach by of any provision
of this Section 8.12, the other party shall be entitled to injunctive or other
equitable relief restraining such party from competing or soliciting in
violation of this Section. Such relief shall be in addition to and

                                      -53-
<PAGE>

not in lieu of any other remedies that may be available, including an action for
the recovery of Damages.

         (f) For the avoidance of doubt, if any Person acquires Control of
either Parent, whether by stock purchase, merger or other transaction, no
provision of this Section 8.12 shall apply to such acquiror and its Affiliates
other than such Parent and its Subsidiaries but this Section 8.12 shall continue
to apply to such Parent and its Subsidiaries; provided that such Parent and its
Subsidiaries may transfer drug delivery technologies or any other assets to such
acquiror even if such acquiror uses such assets in a Competing Product, so long
as the drug delivery technologies or other assets transferred by such Parent and
its Subsidiaries do not themselves comprise a Competing Product.

         Section 8.13. Oversight Committee. (a) Promptly after the Closing Date,
the parties shall form an oversight committee for the Product (the "Oversight
Committee"). The principal purpose of the Oversight Committee shall be to: (i)
create a forum enabling the parties to review and exchange information with
respect to Phase I through IV clinical trial strategies and activities inside
and outside of the Territory; (ii) review and share results and data that may be
obtained in clinical trials sponsored by either party; (iii) review their
respective development strategies and protocols for ongoing and anticipated
clinical studies; (iv) monitor each other's regulatory strategies and activities
for the Product and create standard operating procedures regarding regulatory
compliance for the Product; (v) review each other's public data and reports
arising from and generated in connection with the commercialization of the
Product; (vi) review and coordinate the activities of each party in relation to
the manufacture and supply of key chemical components and the Product; (vii)
coordinate marketing activities with respect to the Product inside and outside
the Territory; (viii) keep each other informed of any issues or events which
impact or relate to the Product; (ix) provide a forum for resolving strategic
differences between the parties; and (x) have such other responsibilities as may
be mutually agreed upon by the parties from time to time.

         (b) In no event shall either party have any obligation to participate
in any clinical trial initiatives of the other party, or to modify clinical
trial initiatives in response to the other party, and any sharing of costs for,
or dedication of personnel to, any joint efforts shall require the unanimous
written approval of all members of the Oversight Committee, and any proposal
resulting from joint action made by either party that would result in costs
incurred by the other party shall be subject to prior written approval of all
members appointed by either party to the Oversight Committee.

         (c) The Oversight Committee shall be composed of four persons, with
each party being entitled to designate two individuals. The initial members
shall be designated by each party in writing promptly following execution of
this Agreement. Each party may change its designated members at any time upon
advance written notice to the other party. The Oversight Committee shall be
chaired by a representative of the Elan Companies during the twelve months
following the Closing Date and in each year thereafter the chairmanship shall
alternate between one of the Acquiror's representatives and one of the Elan
Companies' representatives.

                                      -54-
<PAGE>

         (d) The Oversight Committee shall meet as soon as practicable after the
Closing Date and upon either party's reasonable request thereafter, but in any
event at least twice per year. Unless otherwise agreed, all meetings shall be
conducted in the United States and shall alternate between the business offices
of each of the parties or, if mutually agreed, shall be conducted by
teleconference or video conference. Minutes for all such meetings shall be
prepared by a designated representative of one of the parties and shall be
subject to review and approval by the other party. All such minutes and any
other information presented or exchanged at such meetings shall be maintained as
Confidential Information of the disclosing party in accordance with the
provisions of Section 8.06 of this Agreement. Subject to the terms and
conditions of this Section 8.13, decisions of the Oversight Committee shall be
made by a unanimous vote of a quorum of its members. A quorum shall require at
least one representative of each party. Each party shall bear the costs and
expenses of its designated members that are incurred in connection with the
Oversight Committee meetings.

         Section 8.14. Medical Inquiries and Complaints. The parties will
negotiate in good faith to jointly develop written procedures for the
administration of, and response to, medical inquiries or complaints concerning
the Product by consumers, physicians, pharmacists and other health care
professionals, as soon as practicable, but such written procedures shall be in
place no later than 30 days after the Closing Date. Each party shall use
commercially reasonably efforts to comply with the provisions thereof with
respect to the Product. Notwithstanding the foregoing or the joint written
procedures, the Acquiror shall exclusively have the right to determine how to
respond to medical inquiries and complaints in the Territory and Elan Companies
shall have such exclusive right outside the Territory.

         Section 8.15. Insurance. (a) From the date of this Agreement until the
Closing Date, the Elan Companies shall keep the Plant adequately insured at all
times by financially sound and reputable insurers and maintain such other
insurance, to such extent and against such risks, including fire and other risks
insured against by extended coverage, as is customary with companies in the same
or similar businesses operating in the same or similar locations.

         (b) For so long as each party distributes any Product in or outside of
the Territory and for five years thereafter, such party shall maintain at its
sole cost and expense, product liability insurance (including any self-insured
arrangements) in amounts and with deductibles that are reasonable and customary
in the pharmaceutical industry for companies of comparable size and activities
in the relevant country. Such product liability insurance or self-insured
arrangements shall insure against all liability, including without limitation
personal injury, physical injury, or property damage arising out of the
manufacture, sale, distribution, or marketing of the Product. Each party shall
provide written proof of the existence of such insurance to the other party upon
request.

         Section 8.16. Further Assurances. (a) On and after the Closing Date,
the Elan Companies shall from time to time, at the request of the Acquiror,
execute and deliver, or cause to be executed and delivered, such other
instruments of conveyance and transfer and take such other actions as the
Acquiror may reasonably request, in order to more effectively consummate the
transactions contemplated hereby and to vest in the Acquiror good and marketable
title to the Purchased Assets (including assistance in the collection or
reduction to possession of any of the Purchased Assets).

                                      -55-
<PAGE>

         (b) On and after the Closing Date, the Acquiror shall from time to
time, at the request of the Elan Companies, take such actions as the Elan
Companies may reasonably request, in order to more effectively consummate the
transactions contemplated hereby, including the Acquiror's assumption of the
Assumed Liabilities.

         Section 8.17. No Solicitation. From and after the date hereof and up to
and including the Termination Date without the prior written consent of the
Acquiror, no Elan Company will authorize or permit any representative or
employee of any Elan Company to (i) directly or indirectly, solicit, initiate or
encourage (including by way of furnishing information) or take any other action
to facilitate knowingly any inquiries or the making of any proposal that
constitutes or may reasonably be expected to lead to an Acquisition Proposal
from any Person, (ii) engage in any discussion or negotiations relating thereto
or (iii) accept any Acquisition Proposal. If any Elan Company receives any such
inquiries, offers or proposals it shall promptly notify the Acquiror orally and
in writing of such event. As used herein, "Acquisition Proposal" means any
proposal or offer (other than pursuant to this Agreement) to acquire in any
manner an ownership interest in any part of the Business, Product or Plant.

         Section 8.18. Incentive Compensation. Any bonus or other incentive
compensation due any employee or consultant of the Business as of the Closing
Date, as a result of the transactions contemplated hereby or otherwise, shall be
paid by the applicable Elan Company to such Persons immediately prior to the
Closing Date.

         Section 8.19. Expenses. Except as otherwise provided herein, the Elan
Companies shall pay all of the legal, accounting, finders and bankers fees and
other expenses incurred by any Elan Company in connection with the transactions
contemplated hereby, and the Acquiror shall pay all of the legal, accounting,
finders and bankers fees and other expenses incurred by the Acquiror in
connection with the transactions contemplated hereby.

         Section 8.20. HSR Act Filing. (a) The Acquiror and the Elan Companies
shall each: (i) take promptly all actions necessary to make the filing required
of such party or any of its Affiliates under the HSR Act and Irish Mergers Act
within five Business Days after the date hereof, (ii) comply at the earliest
practicable date with any request for additional information or documentary
material received by such party or any of its Affiliates from the Federal Trade
Commission or the Antitrust Division of the Department of Justice pursuant to
the HSR Act and from equivalent Irish Governmental or Regulatory Authorities
pursuant to the Irish Mergers Act and (iii) cooperate with the other parties in
connection with any filing under the HSR Act and Irish Mergers Act and in
connection with resolving any investigation or other inquiry concerning the
transactions contemplated under this Agreement commenced by either the Federal
Trade Commission or the Antitrust Division of the Department of Justice or state
attorneys general or any equivalent Irish Governmental or Regulatory Authority.
Each of the Elan Companies, on one hand, and the Acquiror, on the other hand,
shall be responsible for its own legal fees for preparing its portion of the HSR
Act and Irish Mergers Act filings.

         (b) In furtherance and not in limitation of the other covenants of the
parties contained herein, each party shall use commercially reasonable efforts
to resolve such objections, if

                                      -56-
<PAGE>

any, as may be asserted with respect to the consummation of the transactions
contemplated hereby under any antitrust Law. If any administrative, judicial or
legislative Action or Proceeding is instituted (or threatened to be instituted)
challenging the sale and purchase of any of the Purchased Assets or any other
transaction as violative of any antitrust Law, each party shall cooperate and
use commercially reasonable efforts vigorously to contest and resist any such
Action or Proceeding, and to have vacated, lifted, reversed or overturned any
decree, judgment, injunction or other Order that is in effect and that
restricts, prevents or prohibits consummation of the sale and purchase of the
Purchased Assets or any other transaction contemplated under this Agreement.

         (c) Each party shall promptly inform the other parties of any material
communication received by such party from the Federal Trade Commission, the
Antitrust Division of the Department of Justice or any other Governmental or
Regulatory Authority regarding any of the transactions contemplated under this
Agreement. Each party shall advise the other parties promptly of any
understandings, undertakings or agreements that such party proposes to make or
enter into with the Federal Trade Commission, the Antitrust Division of the
Department of Justice or any other Governmental or Regulatory Authority in
connection with the transactions contemplated under this Agreement.

         Section 8.21. Indiana Disclosure Document. Prior to the Closing Date,
the Elan Companies agree to undertake all activities necessary to comply with
Indiana's Responsible Property Transfer Law, Ind. Code 13-25-3-1, and the
regulations promulgated thereunder, including the delivery by the Elan Companies
to the Acquiror at least seven days prior to the Closing Date, unless otherwise
agreed to in writing by Acquiror, of a disclosure document that is in the form
set forth in Section 7 of the Indiana Responsible Property Transfer Law, Ind.
Code 13-25-3-7, and which provides the information elicited on such form
(hereinafter, the "Indiana Disclosure Document"). The Elan Companies shall
assume sole responsibility, including all costs and expenses related thereto,
for (i) recording the Indiana Disclosure Document in the office of the county
recorder of the county in which the Plant is located and (ii) filing a copy of
the Indiana Disclosure Document with the Indiana Department of Environmental
Management. The Elan Companies shall provide Acquiror with proof of such
recording and filing.

         Section 8.22. Rights In Japan. If and when the Pre-Conditions of
Transfer are satisfied, the Elan Companies covenant that they and their
Affiliates shall transfer to the Acquiror their entire right, title and interest
in and to, and their rights to make, have made, sell, offer to sell, use, and
import, the Product, Current Product Improvement or Product Improvement in Japan
(the "Japanese Rights"). The Acquiror acknowledges and covenants that (i) any
transfer is and shall be on an "as is" basis; (ii) the Elan Companies make no
representations and warranties of any kind with respect to any transfer arising
out this Section 8.22; (iii) the Acquiror, in the event the Pre-Conditions of
Transfer are met and the transfer of the Japanese Rights occurs, shall bear, and
shall hold the Elan Companies and their Affiliates harmless for, any costs and
expenses arising out of the Acquiror's obtaining the equivalent of Product
Registrations in Japan for the use, manufacture, marketing, selling,
distribution or commercialization of the Product, Current Product Improvement or
Product Improvement in Japan; and (iv) the failure of the parties to consummate
the transfer shall not be a basis for reduction of the Purchase Price or create
any right of the Acquiror to seek damages, offset any amounts against the
Purchase Price or seek any indemnification under the provisions of Article

                                      -57-
<PAGE>

XI. Any transfer shall be effectuated and documented by the execution of written
agreements customary for such transfers, provided, however, that such
documentation shall among other provisions contain intellectual property and
non-compete provisions consistent with this Agreement and shall not contain
provisions inconsistent with the requirements of this Section 8.22. The term
"Pre-Conditions of Transfer" shall mean that the Elan Companies have the
authority to undertake the transfer of rights, title and interest contemplated
by this Section 8.22 without breaching any contractual obligation to a Third
Party existing as of the date hereof (provided that the Elan Companies and their
Affiliates shall exercise commercially reasonable efforts to promptly satisfy
the Pre-Conditions of Transfer) and that such transfer can be undertaken without
the Elan Companies or their Affiliates incurring a material and adverse
financial cost unless the Acquiror undertakes to, and promptly does, reimburse
such cost. In the event the Pre-Conditions of Transfer are satisfied or can be
satisfied by such date, the Elan Companies and the Acquiror covenant to complete
and close any transfer within ninety (90) days after the Closing Date; provided
that if such closing shall not have occurred within such period, either party
shall have the option to extend this period for four successive 90-day periods,
and in any event during such periods or thereafter the Elan Companies and their
Affiliates shall not transfer the Japanese Rights to any other Person.

         Section 8.23. Construction of Certain Provisions. To the extent that
any provision of any Related Agreement is inconsistent with any provision of
Sections 8.05, 8.06 or 8.09, such provision of such Related Agreement shall
govern and shall supersede such provision of Section 8.05, 8.06 or 8.09, as the
case may be, to the extent so inconsistent.

                                   ARTICLE IX

                    CONDITIONS TO THE OBLIGATIONS OF THE ELAN
                            COMPANIES FOR THE CLOSING

         The obligation of the Elan Companies to effect the Closing is subject
to the satisfaction (or waiver by the Elan Companies), at or before the Closing,
of each of the following conditions:

         Section 9.01. Representations, Warranties and Covenants. All
representations and warranties of the Acquiror contained in this Agreement or
any Related Agreement (i) which are not qualified by materiality and/or Acquiror
Adverse Effect shall be true and correct in all material respects and (ii) which
are qualified by materiality and/or Acquiror Adverse Effect shall be true in all
respects, in each case on and as of the Closing Date as though given on and as
of such date, (excluding for such purpose any representations and warranties
that are by their terms given only as of a specific date,) and the Acquiror
shall have performed in all material respects all agreements and covenants
required by this Agreement or any Related Agreements to be performed by it prior
to or on the Closing Date, and the Elan Companies shall have received a
certificate to such effect dated the Closing Date and executed by a duly
authorized officer of the Acquiror.

         Section 9.02. No Actions or Proceedings. No Orders prohibiting the
transactions contemplated hereby shall have been instituted or threatened and
not settled or otherwise terminated. No Law shall have been enacted, entered,
promulgated or enforced by any Governmental or

                                      -58-
<PAGE>

Regulatory Authority that is in effect and has the effect of making the purchase
and sale of the Purchased Assets illegal or otherwise prohibiting the
consummation of such purchase and sale. The parties shall have received any
clearance that may be required under the HSR Act and the Irish Mergers Act.

         Section 9.03. Consents. All Elan Governmental Consents set forth on
Schedules 6.03(a) and the Acquiror Governmental Consents set forth on Schedule
7.03 shall have been obtained or made, as the case may be.

         Section 9.04. Elan Shareholder Approval. Elan Parent's shareholders
shall have approved the proposal to approve the transactions contemplated by
this Agreement and the Related Agreements at the Elan Shareholders Meeting.

                                    ARTICLE X

                  CONDITIONS TO THE OBLIGATIONS OF THE ACQUIROR
                                 FOR THE CLOSING

         The obligation of the Acquiror to effect the Closing is subject to the
satisfaction (or waiver by the Acquiror), at or before the Closing, of each of
the following conditions:

         Section 10.01. Representations, Warranties and Covenants. All
representations and warranties of the Elan Companies contained in this Agreement
(other than those set forth in Section 6.09 and 6.20 and any other
representations and warranties as they relate to the Plant Assets or Plant
Employees) or any Related Agreement (i) which are not qualified by materiality
and/or Adverse Effect shall be true and correct in all material respects and
(ii) which are qualified by materiality and/or Adverse Effect shall be true in
all respects, in each case on and as of the Closing Date as though given on and
as of such date (excluding for such purpose any representations and warranties
that are by their terms given only as of a specific date), and the Elan
Companies shall have performed in all material respects all agreements and
covenants required by this Agreement or any Related Agreement to be performed by
them prior to or on the Closing Date, and the Acquiror shall have received a
certificate to such effect dated the Closing Date and executed by a duly
authorized officer of each Elan Company.

         Section 10.02. No Actions or Proceedings. No Orders prohibiting the
transactions contemplated hereby shall have been instituted or threatened and
not settled or otherwise terminated. No Law shall have been enacted, entered,
promulgated or enforced by any Governmental or Regulatory Authority that is in
effect and has the effect of making the purchase and sale of the Purchased
Assets illegal or otherwise prohibiting the consummation of such purchase and
sale. The parties shall have received any clearance that may be required under
the HSR Act and the Irish Mergers Act.

         Section 10.03. Consents. All Elan Governmental Consents and Elan Third
Party Consents set forth on Schedules 6.03(a) and (b) and Acquiror Governmental
Consents set forth on Schedule 7.03 shall have been obtained or made, as the
case may be, and, in the case of Elan Third-

                                      -59-
<PAGE>

Party Consents set forth on Schedule 2.02, shall be at specified royalty rates
no less favorable than the rates paid by the Elan Companies and reasonably
satisfactory to on the other terms substantially similar to the current
agreements with the Elan Companies and the Acquiror.

         Section 10.04. No Adverse Effect. Subsequent to the date hereof, no
Adverse Effect shall have occurred.

         Section 10.05. Audited Financial Statements. The Acquiror shall have
received the audited financial statements and information referred to in Section
8.03(d) hereof.

         Section 10.06. Elan Shareholders Meeting. Elan Parent's shareholders
shall have approved the proposal to approve the transactions contemplated by
this Agreement and the Related Agreements at the Elan Shareholders Meeting.

                                   ARTICLE XI

                                 INDEMNIFICATION

         Section 11.01. Survival of Representations, Warranties, Covenants, Etc.
The representations, warranties, covenants and agreements of the Elan Companies
or the Acquiror contained in this Agreement and the Related Agreements (other
than the Supply Agreement) shall survive the Closing Date and remain in full
force and effect thereafter until December 31, 2003 (the "Expiration Date").
Notwithstanding the foregoing, however:

         (a) any claim with respect to a breach of Section 6.09 shall not expire
     until December 31, 2004;

         (b) any claim with respect to a breach of a representation or warranty
     relating to title to the Product Intellectual Property, Product
     Registrations and the Plant shall not expire until December 31, 2005; and

         (c) any claim based upon a breach of a covenant or an agreement
     contained in this Agreement or any Related Agreement to be performed after
     the Closing Date (except the Supply Agreements) which shall not expire and
     shall continue in perpetuity.

         So long as an Indemnified Party gives an Indemnification Claim Notice
for a claim on or before the Expiration Date or the applicable date set forth in
Section 11.01(a)-(c), such Indemnified Party shall be entitled to pursue its
rights to indemnification. Indemnification pursuant to Section 11.02 shall be
the exclusive contract right and remedy for damages of the Indemnified Parties
for any losses arising under this Agreement or Related Agreements based upon
breach of representation or warranty or upon a claim under Section 11.02(a)(iii)
hereof.

         Section 11.02. Indemnification.

         (a) By the Elan Companies. Subject to Sections 11.01 and 11.03, from
and after the Closing, the Elan Companies shall jointly and severally indemnify,
reimburse, defend and hold

                                      -60-
<PAGE>

harmless the Acquiror, its Affiliates and their respective officers, directors,
employees, agents, successors and assigns from and against any and all costs,
losses, damages, including natural resource damages, fines, penalties,
judgments, lawsuits, deficiencies, claims and expenses (including reasonable
fees and disbursements of attorneys and other professionals, including
third-party consultants and, to the extent allowable at Law, medical monitoring
costs and expenses) of every kind and nature incurred (collectively, the
"Damages") arising out of, resulting from or incident to (i) any breach of a
representation, warranty, covenant or agreement of an Elan Company made in this
Agreement or the Related Agreements (except Section 6.09), (ii) any Excluded
Liabilities (except Environmental Damages), and (iii) any Damages arising under
any Environmental Law ("Environmental Damages") based on any of the following
occurring on or prior to the Closing Date: (A) the presence, Release or
threatened Release of Hazardous Materials at, from, in, to, on or under any
Site; (B) any violation of an Environmental Law in connection with the Product,
the Purchased Assets or the operation of the Plant; (C) the transportation,
treatment, storage, or disposal of Hazardous Materials by or on behalf of the
Elan Companies, any predecessors or affiliates of the Elan Companies or any
entities previously owned by the Elan Companies in connection with the Product,
the Purchased Assets or the operations of the Plant; (D) a breach of a
representation or warranty in Section 6.09; or (E) the items listed on Schedule
11.02(a)(iii)(E), in each case to the extent incurred for actions (conducted in
a commercially reasonable manner) required by applicable Environmental Laws for
the existing use of the property or asset involved and based on a claim
(including a notice of violation) asserted by a third party, including a
Governmental or Regulatory Authority, and only to the extent any Environmental
Damages are not attributable to the acts or omissions of an Indemnified Party,
including without limitation, the conduct of any soil, surface water or
groundwater investigation not required to be undertaken by applicable
Environmental Laws; provided, that indemnification under this Section
11.02(a)(iii) for Environmental Damages shall be the exclusive remedy available
to any Indemnified Party and all other statutory or other rights to recover any
Environmental Damages shall hereby be waived. The requirement for a third-party
claim shall not apply to actions required under applicable Environmental Laws to
cure any non-compliance for the items on Schedule 11.02(a)(iii)(E). After the
Closing Date, the Acquiror shall have the right to control the conduct of such
actions relating to such matters set forth on Schedule 11.02(a)(iii)(E) to the
extent permitted by Law, including negotiation with governmental regulators,
subject to prior approval by the Elan Companies (which approval shall not be
unreasonably withheld); any expenses incurred by Acquiror with respect to such
actions for which indemnification will be sought shall be subject to the prior
approval of the Elan Companies, which approval shall not be unreasonably
withheld or delayed, except to the extent that the Acquiror is required to take
immediate action pursuant to applicable Environmental Laws by a Governmental or
Regulatory Authority.

         (b) By the Acquiror. Subject to Sections 11.01 and 11.03, from and
after the Closing, the Acquiror shall indemnify, defend and hold harmless each
Elan Company, its Affiliates and their respective officers, directors,
employees, agents, successors and assigns from and against any and all Damages
incurred in connection with, arising out of, resulting from or incident to (i)
any breach of a representation, warranty, covenant or agreement of the Acquiror
made in this Agreement or the Related Agreements, (ii) the use by the Acquiror
and its Affiliates of the Marketing Materials or (iii) any Assumed Liabilities.

                                      -61-
<PAGE>

         (c) Procedure for Claims. The indemnified party shall give the
indemnifying party prompt written notice (an "Indemnification Claim Notice") of
any Damages or discovery of fact upon which such indemnified party intends to
base a request for indemnification under Section 11.02(a) or Section 11.02(b).
Failure to give any such notice shall not constitute a waiver of any right to
indemnification or reduce in any way the indemnification available hereunder,
except to the extent such failure to notify directly increases the amount to be
indemnified hereunder. Each Indemnification Claim Notice must contain a
description of the claim and the nature and amount of such Damages (to the
extent that the nature and amount of such Damages are known at such time). The
indemnified party shall furnish promptly to the indemnifying party copies of all
papers and official documents received in respect of any Damages. All
indemnification claims in respect of a party, its Affiliates or their respective
directors, officers, employees and agents (collectively, the "Indemnitees" and
each an "Indemnitee") shall be made solely by such party to this Agreement (the
"Indemnified Party").

         (d) Third Party Claims. The obligations of an indemnifying party under
this Section 11.02 with respect to Damages arising from claims of any third
party that are subject to indemnification as provided for in Section 11.02(a) or
Section 11.02(b) (a "Third Party Claim") shall be governed by and be contingent
upon the following additional terms and conditions:

         (i) At its option, the indemnifying party may assume the defense of any
     Third Party Claim by giving written notice to the Indemnified Party within
     thirty (30) days after the indemnifying party's receipt of an
     Indemnification Claim Notice. The assumption of the defense of a Third
     Party Claim by the indemnifying party shall not be construed as an
     acknowledgment that the indemnifying party is liable to indemnify any
     Indemnitee in respect of the Third Party Claim, nor shall it constitute a
     waiver by the indemnifying party of any defenses it may assert against any
     Indemnitee's claim for indemnification. Upon assuming the defense of a
     Third Party Claim, the indemnifying party may appoint as lead counsel in
     the defense of the Third Party Claim any legal counsel selected by the
     indemnifying party, provided that in the event that a conflict of interest
     arises between the indemnifying party and its Indemnified Party such that
     such legal counsel cannot represent both the indemnifying party and the
     Indemnified Party, the Indemnitee may retain its own legal counsel at the
     expense of the indemnifying party and the indemnifying party and its
     counsel shall cooperate with the Indemnified Party and its counsel, as may
     be reasonably requested. In the event the indemnifying party assumes the
     defense of a Third Party Claim, the Indemnified Party shall immediately
     deliver to the indemnifying party all original notices and documents
     (including court papers) received by any Indemnitee in connection with the
     Third Party Claim. Except as set forth above, should the indemnifying party
     assume the defense of a Third Party Claim, the indemnifying party shall not
     be liable to the Indemnified Party or any other Indemnitee for any legal
     expenses subsequently incurred by such Indemnified Party or other
     Indemnitee in connection with the analysis, defense or settlement of the
     Third Party Claim.

         (ii) Without limiting Section 11.02(d)(i), any Indemnitee shall be
     entitled to participate in, but not control, the defense of such Third
     Party Claim and to employ counsel of its choice for such purpose; provided,
     however, that such employment shall be at the Indemnitee's own expense,
     except as described above, unless (A) the employment thereof has

                                      -62-
<PAGE>

     been specifically authorized by the indemnifying party in writing, or (B)
     the indemnifying party has failed to assume the defense and employ counsel
     in accordance with Section 11.02(d)(i) (in which case the Indemnified Party
     shall control the defense).

         (iii) With respect to any Damages relating solely to the payment of
     money damages in connection with a Third Party Claim and that will not
     result in the Indemnitee's or the Indemnified Party's becoming subject to
     injunctive or other relief or otherwise adversely affect the business or
     reputation of the Indemnitee or the Indemnified Party in any manner, and as
     to which the indemnifying party shall have acknowledged in writing the
     obligation to indemnify the Indemnitee hereunder, the indemnifying party
     shall have the sole right to consent to the entry of any judgment, enter
     into any settlement or otherwise dispose of such Damages, on such terms as
     the indemnifying party, in its sole discretion, shall deem appropriate,
     provided that, as a result of or in connection with any such settlement
     each Indemnitee or Indemnified Party shall receive a full release with
     respect to such claim. With respect to all other Damages in connection with
     Third Party Claims, where the indemnifying party has assumed the defense of
     the Third Party Claim in accordance with Section 11.02(d)(i), the
     indemnifying party shall have authority to consent to the entry of any
     judgment, enter into any settlement or otherwise dispose of such Damages;
     provided that it obtains the prior written consent of the Indemnified Party
     (which consent shall not be unreasonably withheld or delayed). The
     indemnifying party shall not be liable for any settlement or other
     disposition of Damages by an Indemnitee or Indemnified Party that is
     reached without the written consent of the indemnifying party. Regardless
     of whether the indemnifying party chooses to defend or prosecute any Third
     Party Claim, no Indemnitee or Indemnified Party shall admit any liability
     with respect to, or settle, compromise or discharge, any Third Party Claim
     without the prior written consent of the indemnifying party.

         (iv) Regardless of whether the indemnifying party chooses to defend or
     prosecute any Third Party Claim, the Indemnified Party and each
     indemnifying party shall, and shall cause each other Indemnitee or
     Affiliate of any such indemnifying party, as applicable, to, cooperate in
     the defense or prosecution thereof and shall furnish such records,
     information and testimony, provide such witnesses and attend such
     conferences, discovery proceedings, hearings, trials and appeals as may be
     reasonably requested in connection therewith. Such cooperation shall
     include access during normal business hours afforded to the indemnifying
     party or Indemnified Party, as applicable, to, and reasonable retention by
     each such Person of, records and information that are reasonably relevant
     to such Third Party Claim, and making each such Person and other employees
     and agents available on a mutually convenient basis to provide additional
     information and explanation of any material provided hereunder, and the
     indemnifying party shall reimburse each such Person for all its reasonable
     out-of-pocket expenses in connection therewith.

         (e) Effect of Investigation or Knowledge. Any claim by the Acquiror or
its Affiliates or any of their respective directors, officers, employees or
agents for indemnification shall not be adversely affected by any investigation
by or opportunity to investigate afforded to the Acquiror, nor shall such a
claim be adversely affected by the Acquiror's Knowledge on or before the Closing
Date of any breach of the type specified in this Section 11.02 or of any state
of facts that may

                                      -63-
<PAGE>

give rise to such a breach. The waiver of any condition based on the accuracy of
any representation or warranty, or on the performance of or compliance with any
covenant or obligation, will not adversely affect the right to indemnification,
payment of Damages or other remedy based on such representations, warranties,
covenants or obligations.

         Section 11.03. Limitations. (a) In no event shall the Elan Companies or
the Acquiror be liable for any Damages pursuant to a claim based upon a
representation or warranty and pursuant to Section 11.02(a)(i) or 11.02(b)(i) or
for Environmental Damages pursuant to Section 11.02(a)(iii), as applicable,
unless and until (i) the individual claim giving rise to any Damages exceeds
$25,000, in which case the Elan Companies or the Acquiror, as applicable, shall
be liable for all Damages arising from such claim, (ii) except for claims
pursuant to Section 11.02(a)(iii)(E), the aggregate amount of all such Damages
exceeds $2.5 million, in which case the Elan Companies or the Acquiror, as
applicable, shall be liable for all such Damages only in excess of such amount,
and then (iii) not for any amount in excess of $75 million for all claims made
under such Sections 11.02(a)(i) or 11.02(b)(i) and for all claims made under
Section 11.02(a)(iii) except claims made under Section 11.02(a)(iii)(E), as
applicable, in the aggregate.

         (b) The amount of any Damages recoverable by a party under Section
11.02 shall be reduced by (i) the amount of any actual Tax benefits received by
the Indemnified Party within three years from the Closing Date that result from
the Liability that gave rise to such indemnity and (ii) the amount of any
insurance proceeds paid to the indemnified party relating to such claim.

         (c) THE INDEMNIFICATION OBLIGATIONS OF THE PARTIES HERETO SHALL NOT
EXTEND TO SPECIAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES, INCLUDING BUSINESS
INTERRUPTION OR LOST PROFITS, OR PUNITIVE DAMAGES.

                                   ARTICLE XII

                           TERMINATION AND ABANDONMENT

         Section 12.01. Methods of Termination. Prior to the Closing, the
transactions contemplated herein may be terminated and/or abandoned at any time:

         (a) by mutual written agreement of the Elan Companies and the Acquiror;

         (b) by the Elan Companies if the Closing shall not have occurred by
     December 15, 2002 (the "Termination Date"); provided, that the right to
     terminate the Agreement pursuant to this Section 12.01(b) shall not be
     available to the Elan Companies, if their failure to perform in all
     material respects any of their obligations under this Agreement or any
     Related Agreement results in the failure of the Closing to occur by such
     time;

         (c) by the Acquiror if the Closing shall not have occurred by the
     Termination Date; provided, that the right to terminate the Agreement
     pursuant to this Section 12.01(c) shall not be available to the Acquiror if
     its failure to perform in all material respects any of its obligations
     under this Agreement or any Related Agreement results in the failure of the

                                      -64-
<PAGE>

     Closing to occur by such time; provided, further, that if the sole reason
     that the Closing has not occurred by the Termination Date is that the Elan
     Companies have failed to obtain all Elan Third Party Consents, then the
     Elan Companies may, by written notice to Acquiror, request extension of
     such termination date one or more times but in no event may Elan Companies
     extend this termination date beyond January 31, 2003;

         (d) by either the Elan Companies or the Acquiror if there shall be in
     effect any Law that prohibits the Closing or if the Closing would violate
     any non-appealable Order;

         (e) by either the Elan Companies or the Acquiror if the other party has
     breached any material obligation hereunder that remains uncured for a
     period of 30 days, unless such breach is not capable of cure, in which
     event the non-breaching party may terminate immediately;

         (f) by the Elan Companies, for any breach by the Acquiror of Section
     7.07; or

         (g) by either the Elan Companies or the Acquiror if the shareholders of
     Elan Parent shall not have rejected the proposal to the transactions
     contemplated by this Agreement and the Related Agreements by January 31,
     2003 at the Elan Shareholder Meeting; or

         (h) by the Acquiror if there is any material breach by the Elan
     Companies of the obligations set forth in Section 8.17 or if the Elan
     Parent board of directors withdraws its recommendation of this Agreement or
     the transactions contemplated hereby or by the Related Agreements.

         Section 12.02. Procedure upon Termination. In the event of termination
and abandonment under Section 12.01, written notice thereof shall forthwith be
given to the other party, and the transactions contemplated by this Agreement
shall be terminated and abandoned, without further action by the parties hereto.
If the transactions contemplated by this Agreement are terminated and/or
abandoned as provided herein:

         (a) each party, if requested, will redeliver all documents, work papers
     and other material of the other party and its Affiliates relating to the
     transactions contemplated hereby, whether so obtained before or after the
     execution hereof, to the party furnishing the same; and

         (b) no party hereto and none of their respective directors, officers,
     stockholders, Affiliates or Controlling Persons shall have any further
     liability or obligation to any other party to this Agreement, except that
     (i) nothing in this Section 12.02 shall prejudice any rights, claims, or
     causes of action that may have accrued hereunder or with respect hereto
     prior to the date of such termination, including for breach of this
     Agreement (whether based upon the termination or otherwise) and (ii) the
     provisions of Article XIII shall survive any termination of this Agreement.

                                      -65-
<PAGE>

         Section 12.03. Specific Performance. The parties acknowledge that the
transactions contemplated hereby are unique and specifically identifiable.
Accordingly, the parties further agree and stipulate that, if the Closing does
not occur because of the willful failure of the Elan Companies, on the one hand,
or the Acquiror, on the other hand, to perform their respective obligations
hereunder, (a) monetary damages and any other remedy at law will not be
adequate, (b) the non-defaulting party shall be entitled to specific performance
as the remedy for such breach, (c) each party agrees to waive any objection to
the remedy of specific performance, (d) each party agrees that the granting of
specific performance by any court will not be deemed to be harsh or oppressive
to the party who is ordered specifically to perform its obligations under this
Agreement and (e) in connection with any action for specific performance, the
prevailing party shall be entitled to reasonable attorneys' fees and other costs
of prosecuting or defending such action.

         Section 12.04. Other Remedies. The right to seek specific performance
hereunder shall not preclude any party to seek any other remedy at law or in
equity.

         Section 12.05. Effect of Certain Terminations. In the event that (1)
this Agreement is terminated by (i) the Elan Companies pursuant to Section
12.01(b), (ii) the Acquiror pursuant to Section 12.01(e), or (iii) either the
Elan Companies or the Acquiror pursuant to Section 12.01(g) or (h) and (2) the
Elan Companies or their Affiliates shall have entered into a definitive
agreement regarding a transaction with a party unaffiliated with the Acquiror
involving a sale of the Business (whether alone or together with other assets of
the Elan Companies) within 12 months of the date of termination of this
Agreement, then the Elan Companies shall, as a condition to the consummation of
such transaction contemplated by Section 12.05(2), pay Acquiror or its designee
a fee equal to $18 million (the "Termination Fee"), payable by wire transfer of
immediately available funds in United States dollars.

                                  ARTICLE XIII

                                  MISCELLANEOUS

         Section 13.01. Notices. All notices, requests and other communications
hereunder must be in writing and will be deemed to have been duly given only if
delivered personally against written receipt or by facsimile transmission with
answer back confirmation or mailed (postage prepaid by certified or registered
mail, return receipt requested) or by nationally recognized overnight courier
that maintains records of delivery to the parties at the following addresses or
facsimile numbers:

         If to the Acquiror to:

               Enzon, Inc.
               685 Routes 202/206
               Bridgewater, NJ
               Facsimile:  (908) 541-8838
               Attention:  CEO

                                      -66-
<PAGE>

         With copies to:

               Enzon, Inc.
               685 Routes 202/206
               Bridgewater, NJ
               Facsimile:  (908) 541-8838
               Attention:  General Counsel

         If to the Elan Companies to:

               Elan Corporation, plc
               Lincoln House
               Lincoln Place
               Dublin 2, Ireland
               Facsimile:  (353-1) 709-4124
               Attention:  Colin Sainsbury

         With copies to:

               Elan Pharmaceuticals, Inc.
               7475 Lusk Boulevard
               San Diego, CA 92121
               Facsimile:  (858) 457-7807
               Attention:  Vice President, Legal Affairs

               Cahill Gordon & Reindel
               80 Pine Street
               New York, NY  10005
               Facsimile:  (212) 269-5420
               Attention:  William M. Hartnett, Esq.

All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given upon
receipt, (ii) if delivered by facsimile to the facsimile number as provided in
this Section, be deemed given upon receipt by the sender of the answer back
confirmation and (ii) if delivered by mail in the manner described above or by
overnight courier to the address as provided in this Section, be deemed given
upon receipt (in each case regardless of whether such notice, request or other
communication is received by any other Person to whom a copy of such notice,
request or other communication is to be delivered pursuant to this Section). Any
party from time to time may change its address, facsimile number or other
information for the purpose of notices to that party by giving notice specifying
such change to the other parties hereto in accordance with the terms of this
Section.

         Section 13.02. Entire Agreement. This Agreement (and all Exhibits and
Schedules attached hereto and all other documents delivered in connection
herewith) supersedes all prior discussions and agreements among the parties with
respect to the subject matter hereof and contains

                                      -67-
<PAGE>

the sole and entire agreement among the parties hereto with respect to the
subject matter hereof, except the Confidentiality Agreement, which shall remain
in effect until the Closing, at which time it will expire.

         Section 13.03. Waiver. Any term or condition of this Agreement may be
waived at any time by the party that is entitled to the benefit thereof, but no
such waiver shall be effective unless set forth in a written instrument duly
executed by or on behalf of the party waiving such term or condition. No waiver
by any party hereto of any term or condition of this Agreement, in any one or
more instances, shall be deemed to be or construed as a waiver of the same or
any other term or condition of this Agreement on any future occasion. All
remedies, either under this Agreement or by law or otherwise afforded, will be
cumulative and not in the alternative.

         Section 13.04. Amendment. This Agreement may be amended, supplemented
or modified only by a written instrument duly executed by each party hereto.

         Section 13.05. Third Party Beneficiaries. The terms and provisions of
this Agreement are intended solely for the benefit of each party hereto and
their respective successors or permitted assigns and it is not the intention of
the parties to confer third party beneficiary rights upon any other Person,
except as achieved through the indemnification clause set forth in Section
11.02.

         Section 13.06. Assignment; Binding Effect. Neither this Agreement nor
any right, interest or obligation hereunder may be assigned by any party hereto
without the prior written consent of the other party hereto and any attempt to
do so will be void, except that an indemnified party under Article XI may assign
any of its rights, benefits or obligations hereunder, by operation of law or
otherwise, (a) to any of its Affiliates, provided such indemnified party
continues to be responsible for all of its obligations hereunder, or (b) to a
Person that (i) purchases all or substantially all of the assets being conveyed
hereunder or (ii) merges with Acquiror or the indemnified party or (c) to the
lenders of Acquiror and its successors or assigns. This Agreement is binding
upon, inures to the benefit of and is enforceable by the parties hereto and
their respective successors and permitted assigns.

         Section 13.07. Headings. The headings used in this Agreement have been
inserted for convenience of reference only and do not define or limit the
provisions hereof.

         Section 13.08. Severability. If any provision of this Agreement is held
to be illegal, invalid or unenforceable under any present or future law, and if
the rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (i) such provision will be fully
severable, (ii) this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof,
(iii) the remaining provisions of this Agreement will remain in full force and
effect and will not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom, and (iv) in lieu of such illegal,
invalid or unenforceable provision, there will be added automatically as a part
of this Agreement a legal, valid and enforceable provision as similar to the
terms of such illegal, invalid or unenforceable provision as may be possible and
reasonably acceptable to the parties herein.

                                      -68-
<PAGE>

         Section 13.09. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO
CONTRACTS EXECUTED AND PERFORMED IN SUCH STATE, WITHOUT GIVING EFFECT TO
CONFLICTS OF LAWS PRINCIPLES.

         Section 13.10. Expenses. Except as otherwise provided in this
Agreement, each party hereto shall pay its own expenses and costs incidental to
the preparation of this Agreement and to the consummation of the transactions
contemplated hereby.

         Section 13.11. Counterparts. This Agreement may be executed in any
number of counterparts and by facsimile, each of which will be deemed an
original, but all of which together will constitute one and the same instrument.
A facsimile copy shall be a sufficient proof of signature, without it being
necessary to produce the original copy.

         Section 13.12. Schedules, Exhibits and Other Agreements. The Exhibits,
Schedules, other agreements, certificates and notices specifically referred to
herein, and delivered pursuant hereto, are an integral part of this Agreement.
Any disclosure that is made in any of the Schedules or certificates delivered
pursuant to this Agreement shall be deemed responsive only as to the section as
to which it expressly modifies as indicated on the relevant Schedule.

                         [SIGNATURES ON FOLLOWING PAGE]

                                      -69-
<PAGE>

         IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto all as of the date first above written.

                                     ELAN CORPORATION, PLC

                                     By: /s/ KEVIN INSLEY
                                         ---------------------------------------
                                         Name: Kevin Insley
                                         Title: Authorised Signatory

                                     ELAN PHARMACEUTICALS, INC.

                                     By: /s/ LISABETH F. MURPHY
                                         ---------------------------------------
                                         Name: Lisabeth F. Murphy
                                         Title: Vice President and Secretary

                                     ELAN OPERATIONS, INC.

                                     By: /s/ PAUL V. BREEN
                                         ---------------------------------------
                                         Name: Paul V. Breen
                                         Title: President and CEO

                                     ELAN CANADA, INC.

                                     By: /s/ LISABETH F. MURPHY
                                         ---------------------------------------
                                         Name: Lisabeth F. Murphy
                                         Title: Secretary

                                     ENZON, INC.

                                     By: /s/ ARTHUR HIGGINS
                                         ---------------------------------------
                                         Name: Arthur Higgins
                                         Title: Chairman and CEO

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00055-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00055-of-00352.parquet"}]]