Agreement                              1                     LION Bioscience AG
--------------------------------------------------------------------------------














                   SOFTWARE LICENSE AND DISTRIBUTION AGREEMENT
                   -------------------------------------------






                                     between


                   THE EUROPEAN MOLECULAR BIOLOGY LABORATORY,
                        AN INTERGOVERNMENTAL INSTITUTION,
           REPRESENTED BY THE DIRECTOR GENERAL PROF. DR. FOTIS KAFATOS
                Meyerhofstra(beta)e 1, 69012 Heidelberg, GerMANY
                         -called "Licensor" hereinafter-


                                       and





                       LION BIOSCIENCE AKTIENGESELLSCHAFT,
                                Waldhofer Str.98
                            69123 Heidelberg, Germany
                        represented by its managing board
                           (Contract Number ATP-0047)
                           -called "LION" hereinafter-

<PAGE>

Agreement                              2                     LION Bioscience AG
--------------------------------------------------------------------------------
                                    RECITALS

WHEREAS, the parties have entered into an Agreement on September 15, 1998, as
amended by the Annex Agreement, dated July 20, 2001, between the parties, (the
,,SRS Agreement");

WHEREAS, the parties have concluded that certain provisions of the SRS Agreement
should be revised; the parties wish to alter and amend some of the provisions of
the SRS Agreement in particular the provisions concerning the payment of
royalties by LION;

WHEREAS, the parties wish to continue their cooperation concerning SRS with this
Software License and Distribution Agreement (the ,,Contract");

WHEREAS, the parties intend that their cooperation concerning SRS shall from now
on be governed exclusively by this Contract, which shall supersede the SRS
Agreement as provided below;

WHEREAS, Licensor has created and therefore has the right to license certain
products and related documentation; and

WHEREAS, LION is in the business of bioinfomatics and itself owns the right to
certain software products used in connection with its business;

         NOW, THEREFOR, LION and Licensor agree that Licensor shall grant to
LION certain licenses and render certain services as defined below.

<PAGE>

Agreement                              3                     LION Bioscience AG
--------------------------------------------------------------------------------

SS. 1      DEFINITIONS
The following terms listed on the left have the exclusive meaning as defined on
the right, if not otherwise stated in this contract:



         a) Academic Institution        Public funded non-profit organization,
                                        which has research and/or education as
                                        its primary objective, e.g. the
                                        University of Heidelberg. Public
                                        administration authorities such as but
                                        not limited to, e.g. the Police ,TUV, or
                                        the European Patent Office shall not be
                                        considered to be Academic Institutions.

         b) Application                 Any software or hardware or a
                                        combination of the two developed by LION
                                        or any third party by order of LION
                                        which incorporates elements of
                                        Licensor`s Products.

         c) Affiliate                   A corporation or other entity which
                                        controls, is controlled by, or is under
                                        common control of another entity. A
                                        corporation or other entity shall be
                                        deemed to control another corporation or
                                        entity if it owns, directly or
                                        indirectly, more than fifty percent
                                        (50%) of the voting shares or other
                                        interest or has the power to elect more
                                        than half the directors, of such other
                                        corporation or entity.

         d) Contract                    This agreement including EXHIBITS and
                                        formal changes and additions, including
                                        additions to EXHIBITS.

         e) Effective Date              The date when this Contract has been
                                        executed by both parties.

         f) Intellectual Property       Rights All patents, patent applications,
                                        trademark applications, copyrights,
                                        trademarks, trade secrets and all other
                                        intellectual property rights recognized
                                        by the law of each applicable
                                        jurisdiction.

         g) Licensor                    The European Molecular Biology
                                        Laboratory as described in the heading
                                        and EMBL's Affiliates.

         h)                             Licensor Products Licensor's software
                                        products as specified in EXHIBIT A., all
                                        versions up to and including version 5.1
                                        of the computer program SRS, and all
                                        associated versions of the programming


<PAGE>

Agreement                              4                     LION Bioscience AG
--------------------------------------------------------------------------------

                                        language IKARUS, and their respective
                                        source code, Updates, Upgrades,
                                        Materials and related documentation,
                                        whether released before or after the
                                        Effective Date of this Contract.

         i) LION                        LION bioscience Aktiengesellschaft and
                                        Affiliates.

         j) LION's Products              Software products and related
                                        documentation, which are owned or
                                        distributed by LION, including without
                                        limitation derivative works of Licensor
                                        Products

         k) Materials                   All documentation relating to the
                                        Licensor Products, including without
                                        limitation administrator`s
                                        documentation, user documentation,
                                        frequently asked questions and update
                                        history, all programmer notes,
                                        annotations, compilers, and development
                                        documentation l) Non-academic Third
                                        Party Any third party which is not an
                                        Academic Institution

         m) SRS Disclosure Letter       A letter by Licensor to LION attached
                                        hereto as Exhibit D, setting forth in
                                        reasonable detail the meaning of and
                                        Licensor's underlying intent with
                                        respect to, the provisions concerning
                                        use of Licensor Products set forth in
                                        any README files associated with
                                        Licensor Products.

         n) Update                      Error corrections and bug fixes created
                                        on or after the Effective Date by either
                                        Licensor or any agent of Licensor.

         o) Upgrade                     Any enhancement or addition of
                                        functionalities on or after the
                                        Effective Date created by Licensor or
                                        any agent of Licensor.

<PAGE>

                          SS. 2 SUBJECT OF THE CONTRACT

(1)      Subject of this Contract are Licensor Products, including in particular
         all versions of the computer program SRS of Licensor up to and
         including version 5.1, as listed in EXHIBIT A, and all exploitation
         rights for Licensor Products, in particular this computer program, as
         granted to LION pursuant to ss.ss. 3 et seq. of this Contract

(2)      Licensor Products comprise a data integration and retrieval system
         allowing the user to search different public domain and commercial
         databases as well as internal databases using a single search query and
         navigation interface, together with its own programming language called
         IKARUS, and serve primarily the biotechnology and pharmaceutical
         sectors for a wide range of database search and IT integration
         purposes. Further information concerning the Licensor Products are
         provided in the specifications attached in the form of EXHIBIT A.

(3)      The license grant to LION includes the use of the Materials:

                    o

         All of the Materials developed through the Effective Date of this
         Contract have already been disclosed and delivered to LION.




                               SS. 3 LICENSE GRANT


(1)      From the Effective Date, Licensor hereby grants to LION an exclusive,
         irrevocable license to use and exploit the Licensor Products, the
         Materials , and all Intellectual Property Rights pertaining to the
         Licensor Products in all fields, with no restrictions or limitations
         regarding the subject matter, for the worldwide territory and for the
         duration of the entire term of protection. LION shall in particular be
         free in its communications with third parties and in particular with
         entities active in the broader life sciences industry, to hold itself
         out as having the exclusive right to exploit all Intellectual Property
         Rights pertaining to the Licensor Products. Subject to the rights
         retained by Licensor pursuant to ss. 3(8), the use and exploitation
         rights granted to LION include but are not limited to the exclusive
         rights for any and all commercial and non-commercial purposes, to:

         (a)      permanently or temporarily, directly or indirectly, reproduce
                  in whole or in part by any means and in any form whatsoever
                  (including reproduction to the extent necessary for
                  downloading, display, running, transfer or storage of the
                  programs) Licensor Products;

         (b)      distribute Licensor Products and the work embodied therein in
                  their original form or reproduced in sections, including for
                  hire, for all tasks and editions and without any limitations
                  on the quantities involved, either in whole or in part, and
                  for all languages;

         c)       disseminate and distribute Licensor Products to the public,
                  including the right to:

                  -       record Licensor Products onto machinery or readable
                          data media such as CD-ROM, CDI, CD-Erasable, DVD,
                          microfilm, microfiche and others;

                  -       exploit Licensor Products online using systems such as
                          the internet, intranet, push and pull technologies or
                          online services, or application service providing;

                  -       disseminate Licensor Products to the public by wire or
                          wireless means, including making Licensor Products
                          available to the public in such a way that members of

<PAGE>

                          the public may access them at a place and at a time
                          individually chosen by them;

         (d)      modify and/or combine Licensor Products in whole or in part
                  and to use the modification(s) in any manner whatsoever as
                  referenced above, including the right to combine Licensor
                  Products in whole or in part with other Applications or any
                  programs and exploit these new Applications and/or programs
                  exclusively in any manner as referenced above. Such
                  modifications may in particular apply to:

                  -       the processing rights, in particular for the purpose
                          of utilization in new media such as view data,
                          teletext, databases, online exploitation, internet,
                          intranet for translation and engagement;

                  -        modifications of text and screen masks;

                  -       reworking of software, for example through translation
                          into other programming languages, set-ups for
                          bypassing software, expansion or reduction,
                          eliminating faults, continued development including
                          new functions;

                  -       development of other computer programs derived from
                          Licensor Products.

         (e)      directly or indirectly, (i) modify, port, translate,
                  transform, localize, or create derivative works of the
                  Licensor Products, or any portion thereof, including without
                  limitation the creation of any computer software application
                  or database for resale or external distribution; (ii)
                  decompile, disassemble, reverse engineer or assemble or
                  reconstruct, identify or discover any source code, the
                  structure, sequence or organization of source code underlying
                  ideas, underlying user interface techniques, algorithms,
                  databases, data sets or data of the Licensor Products by any
                  means whatsoever, or disclose any of the foregoing; (iii)
                  sell, lease, license, sublicense, copy, reproduce, market or
                  distribute the Licensor Products; (iv) provide training or
                  consulting to third parties in the use of the Licensor
                  Products; (v) remove any product identification, trademark,
                  copyright or other notices contained in or on the Licensor
                  Products; (vi) incorporate the Licensor Products into or with
                  other software.

(2)      The parties fully intend by this Contract that LION have standing as an
         "exclusive licensee" to sue commercial infringers under United States
         copyright law in its own name. In the event such standing is rejected,
         then the rights retained by Licensor in Section 3(8) will automatically
         be converted to a sublicense from LION to Licensor on the same terms
         and conditions, and the parties will promptly negotiate in good faith
         to reform any other aspects of the Contract to the extent necessary to
         convey such status to LION. In the event that due to the provisions of
         any applicable law the grant of rights contained herein can not be
         recognized as all-encompassing and comprehensive of all of Licensor's
         rights in the Licensor Products and the Intellectual Property Rights
         pertaining thereto, Licensor hereby grants LION the irrevocable right
         of first negotiation with respect to negotiating and entering into an
         exclusive licensing agreement for the exclusive right and license by
         LION to exploit such rights, and in particular with respect to any and
         all as yet unknown forms of use. If the parties are unable to come to
         an agreement about the terms and conditions for such a license
         agreement within a reasonable period of time, Licensor may commence and
         pursue negotiations with third parties about such terms and conditions.
         Prior to entering into any licensing agreement with any such third
         party, Licensor shall grant LION a right of first refusal as follows:
         Licensor shall notify LION in writing about the outcome of such
         negotiations and shall offer the same terms and conditions to LION that
         Licensor is willing to agree to with any such third party and LION
         shall be entitled to accept such terms and conditions

<PAGE>

         and enter into an exclusive license agreement with Licensor upon such
         terms and conditions no later than two (2) weeks from delivery of such
         notice.
(3)      LION shall be free to grant exclusive and non-exclusive exploitation
         rights and licenses or sublicenses with respect to Licensor Products to
         third parties or any Affiliate, either in part or in full, to third
         parties or to any Affiliate, without Licensor's prior approval or
         consent, with regard to individual utilization rights or all
         utilization rights granted with respect to Licensor Products.
(4)      LION shall be entitled to market, reproduce, distribute and sublicense
         Licensor Products under LION's trademarks.Nothing in this Contract
         confers upon Licensor any right to use LION's trademarks, trade names
         or service marks in connection with any product, service, promotion or
         publication, without the prior written approval of LION. EMBL will be
         permitted to use LION's trademarks, tradenames or service marks in
         connection with the Licensor's Product and/or upgrades and updates made
         publicly available on the EMBL/EBI server.
(5)      Nothing in this Contract confers upon LION any right to use Licensor's
         trademarks, trade names or service marks in connection with any
         product, service, promotion or publication, without the prior written
         approval of Licensor.
(6)      Licensor is prepared to grant to LION a worldwide non-exclusive license
         to any and all further Intellectual Property Rights as may be useful or
         desirable in the use of Licensor Products in accordance with this
         Contract under reasonable conditions still to be negotiated.
(7)      Prior to the Effective Date, Licensor has granted rights in Licensor
         Products to third parties, some of which that are listed in Appendix II
         of the SRS-Agreement. The parties acknowledge that other third parties
         may claim to have acquired rights in the Licensor Products, either as a
         result of downloading the software or as a result of the README file
         attached as Appendix 2A, which was included in some downloads of the
         Licensor Products. Licensor herewith exclusively authorizes LION to
         enforce on Licensor's behalf all rights of Licensor arising from
         Non-academic third party license agreements of the SRS-Agreement,
         express or implied in particular the right to terminate each third
         party license on behalf of Licensor, where permitted under applicable
         law. Additionally, Licensor herewith assigns all monetary claims it may
         have arising from violation of any of the terms of the aforementioned
         third party license agreements. Licensor makes no representation or
         warranty regarding whether any or all of the third party licenses can
         be terminated, or the procedural prerequisites for termination.
(8)      Licensor retains the following rights: (i) the right to use Licensor
         Products including Materials for Licensor's own (including but not
         limited to EBI, Hinxton, UK) scientific, internal non-commercial
         purposes; (ii) to incorporate Licensor Products in a public EMBL/EBI
         server until September 15, 2004; Licensor shall ensure, e.g. by
         appropriate technical means, that no downloading of Licensor Products
         from the EMBL/EBI server by any third party can occur; (iii) to
         incorporate Updates and Upgrades of SRS in a public EMBL/EBI server
         until September 15, 2004, whereby Licensor as well ensures, e.g. by
         appropriate technical means, that no downloading of such Updates and
         Upgrades of SRS from the EMBL/EBI server by any third party can occur.
         The rights retained under ii) and iii) shall expire on 15. Sept. 2004
         (resolutory condition -"auflosende Bedingung"). The rights retained by
         Licensor may not be assigned or sublicensed or otherwise transferred to
         any third party. Licensor shall not, under any circumstances, grant
         consciously and active any rights in Licensor Products or Materials to
         any third party after the Effective Date of this Contract. For the
         avoidance of doubt: Any use of Licensor Products through EBI is
         regarded as use by Licensor itself. Within the rights retained,
         Licensor shall not itself, or allow any parent, subsidiary, affiliate,
         agent, employee, consultant or other third party to: (a) sell, lease,
         license, sub-license, copy or reproduce for use by a third party,
         market or distribute, including without limitation by way of
         downloading from any Internet web site or FTP server in its possession
         or under its control, the Licensor Products, including any source code,
         or any modification, derivative work, translation of any of the
         Licensor Products, or any portion thereof or any program or derivative
         work of any Intellectual Property Rights relating to the Licensor
         Products; (b) provide training or consulting, whose primary focus is
         the use of any of the Licensor Products, to any Non-academic Third

<PAGE>

         Party, which has not taken a license for SRS from Lion, or enter into
         time-sharing arrangements for use of any of the Licensor Products with
         any Non-academic Third Party, which has not taken a license for SRS
         from Lion; (c) encumber or suffer to exist any lien or security
         interest on any of the Licensor Products; (d) remove any product
         identification, trademark, copyright or other notices contained in or
         on any of the Licensor Products; (e) take any action that would cause
         any of the Licensor Products to be placed in the public domain; and (f)
         incorporate any of the Licensor Products, or any portion thereof, into
         or with other software.
(9)      LION herewith grants Licensor a royalty-free, non-exclusive right to
         use, only for scientific internal non-commercial purposes according to
         LION's current standard non-exclusive license agreement in the form
         attached hereto as EXHIBIT B, a license to updates and upgrades of the
         Licensor Products made by LION beginning no later than the date on
         which such items are made available to any third party by LION. In case
         of discrepancies and contradictions between EXHIBIT B and this
         Contract, the provisions of this Contract shall prevail. The license
         granted to Licensor by LION may not be assigned or sublicensed, and it
         expires on September 15, 2004 (resolutory condition - "auflosende
         Bedingung"). LION may terminate this license under no circumstances
         before September 15, 2004 other then Licensor breaches the Agreement by
         gross negligence or willful misconduct. For the avoidance of doubt: Any
         use through EBI shall be treated as use through Licensor itself. The
         license granted by LION comprises the right of Licensor to install the
         Updates and Upgrades and upgrades and updates created by LION of the
         Licensor Products on one public EMBL/EBI server for use and access by
         any third party (for the avoidance of doubt: academic and commercial
         parties), through the publicly available internet, until the expiration
         date (September 15, 2004), whereby Licensor shall ensure, e.g. by
         appropriate technical means, that no downloading of such Updates and
         Upgrades and updates and upgrades created by LION of the Licensor
         Product from the EMBL/EBI server by any third party can occur.
(10)     Upon request by Licensor and from the Effective Date until 15 Sept.
         2004, LION further agrees, with respect to the Licensor Products as
         well as Updates and Upgrades created by LION to enter into LION's
         current standard non-exclusive academic license agreement according to
         EXHIBIT B with Academic Institutions pursuant to which LION grants
         internal use rights to SRS to Academic Institutions. This Academic
         License shall have a term starting with the Effective Date and ending
         not before 15. Sept. 2004, provided Licensor is and continues to be in
         compliance with the terms of this Contract, in particular its
         obligations to cooperate with LION.
(11)     After 15. Sept. 2004 and upon request by Licensor LION agrees, with
         respect to (i) Licensor Products and Upgrades and Updates to grant EMBL
         a free, perpetual license according to LION's then current standard
         non-exclusive academic license agreement; (ii) updates and/or upgrades
         created by LION to enter into LION's then current standard
         non-exclusive academic license agreement which governs the use of and
         availability of LION's products for Academic Institutions, provided
         Licensor is and continues to be in compliance with the terms of this
         Contract, in particular its obligations to cooperate with LION. EMBL
         shall get granted these license on upgrades and updates created by Lion
         not later then and to comparable conditions as other Academic
         Institutions.



                                 SS. 4 DELIVERY

(1)      Licensor has already delivered the Licensor Products and all of the
         Materials to LION.
(2)      Licensor shall deliver all Updates and Upgrades of Licensor Products
         and documentation Materials related thereto to LION by the same means
         promptly upon their preparation or development. Updates, Upgrades and
         improvements and the related documentation which are the subject of

<PAGE>

         ss.3(9) of this Contract, made, obtained or acquired by LION shall be
         delivered to Licensor promptly upon their preparation or development.

                           SS. 5 PRICING AND PAYMENTS

(1)      LION is and shall remain entirely free to determine, in its sole
         discretion, all prices, fees and other consideration for licenses
         granted by LION with respect to the use of Licensor Products, including
         end user prices and fees.
(2)      In consideration for the rights granted in this Contract as well as for
         any services under this Contract to be provided by Licensor, LION
         agrees to pay Licensor the following license fees, so long as Licensor
         continues to be in compliance with the terms of this Contract, in
         particular its obligations to cooperate with LION:
                  DM 85.000 (seventy five thousand), due on January 1, 2002;
                  DM 75.000 (sixty five thousand), due on January 1, 2003;
                  DM 60.000 (fifty thousand), due on January 1, 2004.

         The above fees shall constitute the entire consideration to be given by
         LION under this Contract. Licensor shall not be entitled to, and shall
         not claim, any other fees, payment or consideration under this Contract
         or the SRS Agreement. No remuneration or paying back of any payment or
         any other consideration made by LION to Licensor prior to the Effective
         Date, in particular under the previous SRS Agreement dated September
         15, 1998, or the Annex Agreement to the SRS-Agreement of July 20, 2001,
         like but not limited to, license fees or an acquisition or issuance of
         shares of stock of LION shall occur. Such payments and consideration
         shall not be affected. All amounts payable under this Contract are net
         and exclusive of any sales or V.A.T. taxes.

                              SS. 6 CONFIDENTIALITY

(1)      Except as expressly authorized herein, the parties shall keep
         confidential any and all information of a technical or non-technical
         nature concerning Licensor Products and any of LION's products,
         including the source code of Licensor Products, or concerning trade
         secrets, whether in oral, written, graphic, via electronic or in other
         form, received from the other party. Except as expressly authorized
         herein or authorized in writing by the disclosing party, such
         confidential information shall not be made available to any third party
         (other than an Affiliate of either party) in a direct or indirect way.
         The confidentiality obligations in this ss. 6 shall continue to be in
         force and effect throughout the term of this Contract and for a period
         of five (5) years after termination of this Contract.
(2)      The parties shall require their agents and sub-contractors to comply
         with the confidentiality obligations set forth herein. The
         confidentiality obligations set forth herein apply to all copies of any
         materials received from the other party.
(3)      The confidentiality obligations herein shall not apply to information
         that:

         -        is or becomes generally available to the public through no
                  fault of the receiving party;
         -        is learned by the receiving party from a third party entitled
                  to disclose it;
         -        was already known to the receiving party prior to its
                  disclosure by the disclosing party, as shown by the receiving
                  party's prior written records;
         -        was developed independently by the receiving party, as shown
                  by the receiving party's prior written records; or
         -        is required to be disclosed by legal or regulatory
                  requirements beyond the reasonable control of the disclosing
                  party, provided that any such disclosure is limited to the
                  extent reasonably necessary to comply with such requirements
                  and, to the extent reasonably predictable, is not made until
                  after the other party has been notified and given an

<PAGE>

                  opportunity to obtain a protective order from a court of
                  competent jurisdiction to protect the confidentiality of such
                  information.
(4)               LION shall be entitled to disclose the following information
                  to any third party:
         -        the terms of this Contract and the exhibits attached thereto,
                  including without limitation in connection with LION's efforts
                  to protect and enforce its rights to Licensor Products and
                  LION's products and in connection with any filings with the
                  U.S. Securities and Exchange Commission or any other
                  governmental agency or with any stock market;
         -        The SRS Disclosure Letter as well as the Annex II of the
                  "Annex Agreement to the SRS Agreement of September 15, 1998"
                  in connection with LION's efforts to protect and enforce its
                  rights to Licensor Products
         -        Any other materials the disclosure of which is, in LION's
                  judgment, necessary or warranted in connection with LION's
                  efforts to protect and enforce its rights to Licensor
                  Products.


                   SS. 7 WARRANTIES; RELEASE; INDEMNIFICATION

(1)      Licensor represents and warrants that (i)Licensor has full and
         sufficient right and title to grant the rights and/or licenses granted
         to LION under this Contract; (ii) all statements by Licensor in the SRS
         Disclosure Letter (EXHIBIT D) are true and correct.
(2)      LION agrees to waive any and all claims against Licensor arising from
         any breach or violation by Licensor or its employees of the warranties
         or any other provision or regulation set forth in the SRS Agreement and
         the Annex Agreement to the SRS-Agreement. Licensor has taken
         appropriate effort to eliminate the risk of distribution by mirror
         sites. Additionally, Licensor shall inform third parties on his
         internet pages that SRS can only be obtained through LION and that any
         use, reproduction, copying or other use of SRS is no longer permitted.

                      SS. 8 GENERAL OBLIGATION TO COOPERATE

(1)      Licensor shall provide any information gained from further development
         work on Licensor Products.
(2)      Upon request of LION, Licensor shall undertake in good faith to provide
         assistance and cooperation to LION, upon request for LION to protect
         and enforce LION's rights concerning Licensor Products under this
         Contract, including without limitation (i) enforcement or termination
         of any licenses for the Licensor Products; (ii) providing evidence in
         support of any infringement or enforcement action brought by LION
         against any third party regarding the Licensor Products, both
         informally and in connection with litigation; and (iii) providing
         active assistance in LION's efforts to persuade or judicially enjoin
         third parties from distributing or offering Licensor Products for
         download from Internet web sites or FTP servers.
(3)      Licensor hereby grants to LION the right, power and capacity to
         commence and pursue legal action, including in particular infringement
         actions, actions to enforce licenses or agreements to which Licensor or
         an Affiliate of Licensor is a party concerning Licensor Products
         licensed to Non-Academic Third Parties, in its own name without joining
         Licensor as a party in the action and Licensor hereby assigns its
         rights in action (Proze(beta)standschaft) for all such claims or
         actions in connection with Licensor Products licensed to Non-Academic
         Third Parties

<PAGE>

(4)      Licensor hereby grants to LION the exclusive right to register the
         copyright of any Licensor Products in LION's own name in any
         jurisdiction. For the purpose of the territory of the United Sates of
         America Licensor grants LION the right to claim legal title to the
         copyright in an application for copyright registration (37 CFR
         202.3(a)(1) whereby LION may appear as the copyright claimant or
         registrant.
(5)      From time to time and upon LION's request, Licensor shall confirm such
         right by written instrument as LION may reasonably request. Licensor
         shall provide LION with all reasonable assistance with respect to
         LION's efforts to register the copyright of any Licensor Products,
         including without limitation providing or preparing such information or
         materials and executing such written instruments as LION may reasonably
         request. Solely upon LION's written request, Licensor shall also
         register the copyright of any Licensor Products in Licensor's name in
         any jurisdiction if such registration is to the benefit of LION and or
         if said jurisdiction requires that the copyright holder perform the
         registration, in protecting and enforcing LION's exclusive rights to
         Licensor Products or LION's products in that jurisdiction, provided
         that LION shall bear all costs and expenses of Licensor incurred in
         such registration or its preparation. Licensor will cooperate with LION
         to an extend considered to be in compliance with its reputation in
         attempting to persuade any Academic Institution that is currently
         making SRS software version 5.1 or earlier available for download from
         the Internet to remove that version of the SRS software from all
         installed locations and, if the institution is willing to enter into a
         standard non-exclusive academic license with LION, to install a newer
         version of the SRS software for internal academic use.
(6)      Upon request by LION, Licensor shall inform each Non-academic Third
         Party specified by LION that has been granted or that has asserted a
         license or use rights to one or more Licensor Products (other than
         those listed in Appendix II of the SRS Agreement), each Non-academic
         Third Party specified by LION that has downloaded one or more Licensor
         Products from a web site or ftp server in Licensor's possession or
         under its control, that
         -        LION has held the worldwide exclusive rights to the commercial
                  use and exploitation of Licensor Products since September
                  1998, for SRS version 5.1, and since July, 2001 for earlier
                  versions;
         -        Any Non-academic Third Party licenses or use rights (other
                  than those listed in Appendix II of the SRS Agreement) for the
                  use of Licensor Products that have been granted by Licensor
                  are terminated effective immediately;
         -        Such Non-academic Third Party that has downloaded or obtained
                  or intends to download or obtain Licensor Products from any
                  Internet web site or ftp server after the effective date of
                  the SRS Agreement has no right to use such Licensor Products,
                  irrespective of any provisions in any associated README file
                  and infringes upon LION's rights, as LION has held the
                  exclusive commercial use and exploitation rights to Licensor
                  Products since such time;
         -        Non-academic users of Licensor Products should obtain a
                  license for their use from LION.
         The specific contents of such notice shall be as outlined in the SRS
         Disclosure Letter (EXHIBIT D) which is explicitly excluded from the
         confidentiality obligation under ss. 6 and may as deemed necessary by
         LION be passed on in copy to third parties.
(7)      Licensor shall deliver to LION the SRS Disclosure Letter on Licensor
         letterhead and signed by the Director General of Licensor no later than
         the Effective Date.

                           SS. 9 TERM AND TERMINATION

(1)      The term of this Contract is the term of copyright protection of
         Licensor Products. This Contract may only be terminated by LION for
         good cause. Such good cause shall exist if:
         -        Licensor breaches any material term or condition of this
                  Contract and fails to cure such breach within sixty (60) days
                  after written notice;

<PAGE>

         -        Licensor becomes the subject of a voluntary or involuntary
                  petition in bankruptcy or any proceeding relating to
                  insolvency, liquidation or composition for the benefit of
                  creditors.
(2)      Upon termination of this Contract,

                           a)      all sublicenses granted by LION prior to the
                                   effective date of any such termination shall
                                   survive;

                           b)      each party shall (except as specified in
                                   subsections c) and d), below) immediately
                                   return to the other party or (at such other
                                   party's request) destroy all confidential
                                   information disclosed by the other party that
                                   is in its possession or under its control,
                                   and will provide the disclosing party with
                                   any affidavit as to the return or destruction
                                   of such confidential 0information.

                           c)      LION shall have no right to retain Licensor
                                   Products, all data, source code, object-code,
                                   documentation and other materials related to
                                   Licensor Products.

                          d)       LION shall have no right to retain and use
                                   without restriction all of LION's
                                   Applications, Intellectual Property Rights,
                                   developments and improvements relating to
                                   Licensor Products, data, source-code,
                                   object-code, documentation and other
                                   materials related to Licensor Products.

                           e)      the licenses granted to LION herein shall
                                   remain in full force and effect.



(3)      The exercise by either party of any remedy under this Contract shall be
         without prejudice to its other remedies under this Contract or
         otherwise.

                            SS. 10 GENERAL PROVISIONS

(1)      If any provision of this Contract is found invalid or unenforceable,
         that provision shall be enforced to the maximum extent permissible, and
         the other provisions of this Contract shall remain in force.
(2)      Neither party shall be responsible for any failure to perform due to
         causes beyond its reasonable control, including, but not limited to,
         acts of God, war, riot, embargoes, acts of civil or military
         authorities, denial of or delays in processing of export license
         applications, fire, floods, earthquakes, accidents, strikes, or fuel
         crises, provided that such party gives prompt written notice thereof to
         the other party.
(2)      All notices under this Contract will be deemed given when delivered
         personally, sent by confirmed facsimile transmission, or sent by
         certified or registered mail or internationally recognized express
         courier, return receipt requested, to the address shown herein. Either
         party may change its address for notices under this Contract by giving
         written notice to the other party by the means specified in this
         Section. Addresses for notification purposes are:
(3)
LION:                                     Licensor:
         Att: Director IP and Licensing    European Molecular Biology Laboratory
         LION bioscience AG                Meyerhofstra(beta)e 1
         Waldhofer Str. 98                 Postfach 10.2209
         69123 Heidelberg                  69012 Heidelberg
         Germany                           Fax: +49 6221 387306
         Fax: +49 6221 4038501
         With a copy to LION's general counsel at the
         same address

<PAGE>

(4)      This Contract, and its formation, interpretation, validity and
         enforcement, as well as all rights of use, or rights derived from a
         right of use, also if the Contract is executed outside the Federal
         Republic of Germany or a sub-license is granted for the use outside the
         Federal Republic of Germany, shall be governed by the laws of the
         Federal Republic of Germany, provided however that application of the
         provisions of the United Nation Convention on Contracts for the
         International Sale of Goods shall be excluded and provided further that
         any assignment of claims arising from third party licenses concerning
         Licensor Products provided for in ss. 3(7) of this Contract shall be
         governed by the applicable laws of the jurisdiction which governs the
         interpretation and enforcement of such third party licenses.
(5)      The parties hereto shall endeavor to settle all disputes, controversies
         or differences that may arise between them out of or in relation to or
         in completion with this Contract amicably by mutual consultation. If a
         dispute arises from or relates to this Contract, the parties will try
         to settle the dispute in good faith within 30 days of a written request
         by either party to do so. Senior managers from each party shall
         participate in direct discussions during this time period to attempt to
         reach agreement. If the parties are unable to settle the dispute
         through these direct discussions, the parties shall attempt to settle
         the dispute through mediation administered by the World Intellectual
         Property Organization Arbitration and Mediation Center (the
         "Administrator"). The applicable Administrator's mediation rules that
         apply to commercial mediations shall govern the mediation. If all or
         any portion of a dispute is not resolved through this mediation process
         within 90 days, such dispute shall be resolved by binding arbitration
         administered by the applicable Administrator under its arbitration
         rules that apply to commercial disputes. Such dispute shall be heard
         and decided by an arbitration committee consisting of three
         arbitrators, one being appointed by each of the parties. The appointed
         arbitrators then designate the third arbitrator who will act as
         president of the arbitration committee. The third arbitrator must be
         shown to have sufficient knowledge of German Law. If both parties
         agree, the mediator involved in the parties' mediation shall serve as
         the third arbitrator on this arbitration committee. Place of
         arbitration shall be Geneva, Switzerland. The arbitration committee
         shall decide the dispute by majority vote by issuing a binding ruling
         that may include an award of damages or injunctive relief and that
         shall be final and binding on the parties. The arbitration committee's
         rulings shall not be subject to appeal to any court, and shall be
         executed without exequatur by any court of competent jurisdiction. The
         party executing on such rulings shall be entitled seek assistance from
         the competent court(s) for an exequatur if the other party fails to
         comply with the arbitration committee's rulings within sixty (60) days
         from issuance of the order. The arbitration committee shall apply the
         substantive law as specified in this Contract and the terms and
         conditions of this Contract in its rulings, including the final
         arbitration decision and ruling. The arbitration committee shall only
         award remedies or relief that is allowed by this Contract and that
         could be granted by a competent court within the Federal Republic of
         Germany. The final decision and ruling by the arbitration committee
         shall be in writing, and shall specify the factual and legal bases
         therefor.

(6)      This Contract may be executed in counterparts, each of which will be
         deemed an original, but both of which together will constitute one and
         the same instrument.
(8)      Except as provided in Section 11(1) below, this Contract and its
         exhibits comprise the complete and exclusive agreement between the
         parties with respect to the subject matter hereof, superseding and
         replacing any and all prior agreements, communications, and
         understandings (both written and oral) regarding such subject matter,
         including without limitation the SRS Agreement. This Contract may only
         be modified, or any rights under it waived, by a written document
         executed by both parties.

<PAGE>

(8)      The rights and obligations under this Contract shall be applicable to
         Licensor's Affiliates, including without limitation EBI. Licensor
         agrees that it is fully responsible for the actions of its Affiliates
         and each of its employees, agents and independent contractors and those
         of its Affiliates with respect to the performance of this Contract and
         compliance with the terms and obligations of this Contract.

                    SS. 11 SURVIVING PROVISION/NO PROSECUTION

(1)      Except as to any rights that have accrued under the SRS Agreement as of
         the Effective Date, whereby actual or potential damages claims of LION
         against Licensor arising from a breach or a violation of the SRS
         Agreement or the Annex Agreement to the SRS-Agreement shall not
         survive, this Contract shall, on the Effective Date, supersede and
         replace the SRS Agreement, and on the Effective Date, the SRS Agreement
         shall automatically terminate by mutual consent of the parties,
         provided that the provisions of the SRS Agreement set forth in EXHIBIT
         C hereto shall be incorporated in this Contract by reference and shall
         survive such termination of the SRS Agreement. Royalty payments and any
         other consideration including but not limited to equity in LION
         obtained by Licensor under the SRS Agreement dated September 15, 1998,
         or the Annex Agreement to the SRS Agreement of July 20, 2001, are not
         to be paid back or reimbursed. This Contract also supersedes and
         replaces any and all other agreements or licenses the parties may have
         entered into previously concerning Licensor Products or the SRS
         software, which are hereby terminated.
(2)      The confidentiality obligations of this Contract shall survive
         termination of this Contract and shall remain in full force and effect
         for a period of five (5) years from termination of this Contract.


<PAGE>

The parties have caused this Contract to be executed by their duly-authorized
representatives as of the Effective Date.

Executed by and on behalf of LION

Heidelberg, January 21, 2002

-------------------------------
Dr. Friedrich von Bohlen, CEO

Executed by and on behalf of Licensor

Heidelberg, January 18, 2002

--------------------------------------
Licensor - Prof. Dr. Fotis Kafatos, Director General EMBL