<PAGE>

                              EMPLOYMENT AGREEMENT

         EMPLOYMENT AGREEMENT ("Agreement"), made as of June 30, 1998, by and
between CADUS PHARMACEUTICAL CORPORATION, a Delaware corporation, having its
principal place of business at 777 Old Saw Mill River Road, Tarrytown, New York
10591-6705 (the "Corporation"), and CHARLES WOLER, an individual of French
nationality with an address at 176 Boulevard Bineau, 92200 Neuilly/seine, France
(the "Executive").

                                   WITNESSETH:

         WHEREAS, the Corporation desires to provide for the Executive's
employment as President and Chief Executive Officer for a term of three years,
with an option year at the Corporation's election, subject to the terms and
provisions of the Agreement; and

         WHEREAS, the Executive desires to accept such employment, subject to 
the terms and provisions of the Agreement; and

         WHEREAS, the Corporation and the Executive mutually desire to provide 
for the grant of certain stock options;


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          NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the receipt of
which is mutually acknowledged, the Corporation and the Executive (individually
a "party" and together the "parties") agree as follows:

         1. Terms of Employment. The Corporation shall employ the Executive, and
the Executive shall accept employment, as President and Chief Executive Officer
of the Corporation. The Executive's employment by the Corporation pursuant to
the terms of this Agreement shall commence on the Effective Date. The
undersigned members of the Compensation Committee of the Board of Directors
shall use their best efforts to have the Executive appointed or elected to the
Board of Directors. Subject to Section 4 hereof, the Executive's employment by
the Corporation shall continue in full force and effect until the earlier to
occur of the third anniversary of the Effective Date (the "Scheduled Termination
Date") or the date on which the Executive is terminated or resigns from the
Corporation pursuant to Section 4 hereof (the "Actual Termination Date").
Notwithstanding the foregoing, the Corporation shall have the option to extend
the period of the Executive's employment hereunder for one year, by furnishing
written notice to the Executive at least 90 days prior to the initial Scheduled
Termination Date, in which case the Scheduled Termination Date shall thereafter
be the fifth anniversary of the Effective Date.

         2. Full Time Commitment. During the period of employment hereunder, the
Executive, except as hereinafter provided, shall devote his full business time
and efforts to the business and affairs of the Corporation, use his best efforts
to promote the business of the



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Corporation, hold the offices in the Corporation (or in any subsidiary
corporation or other business entity controlled by the Corporation (a
"Subsidiary")) to which from time to time he may be elected or appointed
(provided, however, that the Executive shall not be entitled to additional
compensation for serving as a director of the Corporation or any Subsidiary if
so elected), and perform such duties as shall be assigned to him by the Board of
Directors of the Corporation. The Executive shall take such steps as are
necessary to enable him to complete a Form I-9 upon the Effective Date, to be
filed with the United States immigration authorities, and shall take such other
steps as are necessary to enable him to become, and continue to be, employed
hereunder on a full time basis in the United States. Notwithstanding anything
herein to the contrary, nothing shall preclude the Executive or his spouse from
serving on the boards of directors of a reasonable number of other corporations
or the boards of a reasonable number of trade associations and/or charitable
organizations; engaging in charitable activities and community affairs; and
managing his or her personal investments and affairs; provided, however, that,
in the case of the Executive, such activities do not materially interfere with
the proper performance of his duties and responsibilities as the Corporation's
President and Chief Executive Officer.

         3. Base Salary. The Corporation shall compensate the Executive for the
services to be rendered by him hereunder, including all services to be rendered
as an officer or director of the Corporation (or any Subsidiary), by paying the
Executive a base salary at the rate of $300,000 per annum for the first year of
the Executive's employment hereunder, $330,000 per annum for the second year of
the Executive's employment hereunder, $360,000 per annum for the third year of
the Executive's employment hereunder and, if the Corporation exercises its
option to


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extend the Executive's employment hereunder pursuant to the last sentence of
Section 1 hereof, $400,000 per annum for the fourth year of the Executive's
employment hereunder. Such salary shall be paid at regular intervals in
accordance with the usual salary payment practices of the Corporation, but not
less frequently than semi-monthly. Furthermore, the Executive shall be entitled
to such bonuses, if any, as the Compensation Committee of the Board of
Directors, in its sole discretion, may determine from time to time.

         4.    Termination of Employment.

         (a)   If the Executive's employment terminates for any reason 
whatsoever prior to the Scheduled Termination Date, the Corporation shall pay to
the Executive within ten days of such termination the salary specified in
Section 3 hereof earned through the Actual Termination Date.

         (b)   In the event that

         (i)   the Executive's employment is terminated by the Corporation 
               without "cause" (as hereinafter defined in Section 4(f));

         (ii)  the Executive terminates his employment with the Corporation
               within 18 months after a "Change of Control" (as hereinafter
               defined in Section 4(g)) and prior to the Scheduled Termination 
               Date and after the Executive is assigned any duties or 
               responsibilities that are inconsistent with his position, duties,


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               responsibilities or status on the Effective Date, or his
               reporting responsibilities or titles in effect on the
               Effective Date hereof are changed; or

         (iii) the Executive terminates his employment with the Corporation
               within 3 months of a material change in the Executive's
               position, duties or responsibilities with respect to his
               employment with the Corporation or a change in the Executive's
               principal place of work by more than 75 miles and more than 50
               miles from the Executive's principal residence, without the
               Executive's prior written consent;

(each termination event described in clauses (i) through (iii), above, being
hereinafter referred to as a "Section 4(b) Termination Event") then in addition
to any payment which may be due pursuant to Section 4(a), the Corporation shall
pay to the Executive, within ten days of such termination, an amount equal to
the amount of base salary which would have been payable to the Executive if the
Executive had remained employed under the terms of the Agreement from the Actual
Termination Date to the earlier of (i) the second anniversary of the Actual
Termination Date or (ii) the Scheduled Termination Date, and all unvested stock
options granted to the Executive will immediately vest as of the date of
termination.

         (c)   The Executive shall be entitled only to the payments
described in Section 4(a) hereof if the Executive voluntarily terminates his
employment prior to the Scheduled Termination Date for any reason other than a
Section 4(b) Termination Event.



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         (d)   If the Executive fails for any reason to continue to be
able to be lawfully employed in the United States on a full time basis, his
employment hereunder shall terminate immediately and he shall be entitled only
to the payments described in Section 4(a) hereof. In no event shall any such
termination be construed as a Section 4(b) Termination Event.

         (e)   If the Executive's employment terminates, whether or not
on account of a Section 4(b) Termination Event, the Executive shall be under no
obligation to seek other employment and there shall be no offset against amounts
due the Executive under this Agreement, if any, on account of any remuneration
attributable to any subsequent employment that he may obtain.

         (f)   For purposes of this Agreement, "cause" shall mean

               (i)    the commission of a crime by the Executive which
                      constitutes a felony;

               (ii)   the Executive's commission of any fraud,
                      misappropriation or willful misconduct which causes
                      material injury to the Corporation; or

               (iii)  the reckless disregard by the Executive of the
                      substantial performance of his duties hereunder and his


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                      failure to cure such breach within ten days after
                      notice thereof from the Corporation.

         (g)   For purposes of this Agreement, a "Change of Control"
               shall be deemed to have occurred when

               (i)    any "person" (as such term is used in Sections 3(a)(9) 
                      and 13(d)(3) of the Securities Exchange Act of 1934, as 
                      amended (the "Exchange Act")) or group, other than 
                      Carl C. Icahn and his affiliates, is or becomes the 
                      beneficial owner, directly or indirectly, of securities 
                      of the Corporation representing 25% or more of the 
                      combined voting power of the then outstanding securities 
                      of the Corporation (assuming the conversion of all 
                      outstanding convertible preferred stock of the 
                      Corporation);

               (ii)   a majority of the persons who are elected to the
                      Board of Directors of the Corporation were not 
                      placed in nomination for that office by the Board of
                      Directors; or

               (iii)  the Corporation combines with another company and the
                      shareholders of the Corporation hold less than 50% of
                      the total of all voting shares  outstanding or to be

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                      outstanding as a result of the combination or the
                      Corporation's directors constitute less than a majority of
                      the Board of Directors of the combined entity.

         5.    Noncompetition. Except as approved in writing by the Board of
Directors of the Corporation, during the period from the Effective Date through
the Scheduled Termination Date, and for a further continuous period thereafter
ending on the first anniversary of the Actual Termination Date if the Actual
Termination Date is within one year of the Scheduled Termination Date, the
Executive shall not:

               (a) Engage in or carry on, directly or indirectly, either 
for himself or as a member of a partnership or as a stockholder, investor,
lender, officer or director of a corporation (other than the Corporation), or as
an employee or agent of, or consultant or advisor to, any person, partnership,
corporation, joint venture or enterprise (other than the Corporation), or in any
capacity on behalf of any trust or other organization or entity, any business in
competition with (as defined below) any business then carried on by the
Corporation as long as any like business is carried on by the Corporation or by
any person, corporation, partnership, trust or other organization or entity
deriving title to the good will of such business, directly or indirectly, from
the Corporation; provided, however, that nothing herein contained shall prevent
the Executive from purchasing not more than 3% of the amount of any class of
securities of any publicly owned company, the securities of which are listed on
a national securities exchange or registered pursuant to Section 12(g) of the
Exchange Act. The Executive may make investments, without restriction on amount,
in non-competitive private businesses. For the purposes of this Section

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5(a), the term "any business then carried on by the Corporation" shall mean
yeast based genetics, or any other area of research or production which is a
significant business activity of the Corporation during the twelve (12) month
period prior to the Executive's Actual Termination Date, but in no event shall
such term be interpreted to mean the entire field of biotechnology; or

               (b) Solicit, raid, entice, induce or attempt to persuade any
person that presently is, or at any time during the term of employment hereunder
shall be (or, in the case of termination, is at the time of termination), an
employee of the Corporation to become employed by any person, firm, partnership,
corporation or other enterprise or entity, and the Executive shall not approach
any such employee for such purpose or authorize the taking of such actions by
any other person, firm, partnership, corporation or other enterprise or entity
in taking such action.

         6.    Assignment of Rights; Confidentiality.

               (a) The Executive hereby sells, assigns and transfers to the
Corporation all of his right, title and interest in and to all inventions,
discoveries, improvements and copyrightable subject matter (the "rights") which
during the term of this Agreement are made or conceived by him, alone or with
others, and which are within or arise out of any general field of the
Corporation's business or arise out of any work he performs or information he
receives regarding the business of the Corporation while employed by the
Corporation. The Executive shall fully disclose to the Corporation as promptly
as available all information known or possessed by him concerning the rights
referred to in the preceding sentence, and upon request by the Corporation and
without any further remuneration in any form to him by the Corporation, but at
the expense

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of the Corporation, execute all applications for patents and for copyright
registration, assignments thereof and other instruments and do all things which
the Corporation may deem necessary to vest and maintain in it the entire right,
title and interest in and to all such rights.

               (b) The Executive agrees that, during or at any time after the
termination of this Agreement, he shall not divulge, furnish or make accessible
to any person, corporation, partnership, trust or other organization or entity,
any information, trade secrets, technical data or know-how relating to the
business, business practices, methods, attorney-client communications, pending
or contemplated acquisitions or other transactions, products, processes,
equipment or any confidential or secret aspect of the business of the
Corporation without the prior written consent of the Corporation, unless such
information shall have become public knowledge or shall have become known
generally to competitors of the Corporation through sources other than the
Executive.

         7.    Enforcement of Noncompetition and Confidentiality Provisions. The
following provisions shall apply to the covenants contained in Sections 5 and 6
hereof:

               (a) The covenants contained in Sections 5 and 6 shall apply 
world-wide.

               (b) Without limiting the right of the Corporation to pursue all
other legal and equitable remedies, including recovery of damages, available for
violation by the Executive of the covenants contained in Sections 5 and 6
hereof, the Corporation shall be entitled to specific performance of its rights
under such Sections. The Executive agrees that monetary damages

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would not be adequate compensation for any loss incurred by the Corporation by
reason of a breach by him of the provisions of Section 5 or 6 hereof, and that
the Corporation would sustain irreparable harm and therefore further agrees that
the Corporation shall be entitled to injunctive relief to prevent any such
breach or any continuing breach thereof.

               (c) Each party intends and agrees that if, in any action or 
proceeding before any arbitrator, court or agency legally empowered to enforce
the covenants contained in Sections 5 and 6 hereof, any term, restriction,
covenant or promise contained therein is found to be unreasonable and
accordingly unenforceable, then such term, restriction, covenant or promise
shall be deemed modified to the extent necessary to make it enforceable by such
arbitrator, court or agency.

         8.    Benefits and Reimbursable Expenses.

               (a) The Executive shall be entitled to participate in any 
medical, dental, life insurance, retirement, pension, profit sharing or other
benefit plans that the Corporation has or may establish and maintain for the
benefit of employees of the Corporation. The Executive shall be entitled to
reasonable vacations during each year of his employment hereunder, consistent
with the policies of the Corporation with respect to vacations, and the
Corporation shall provide the Executive with reasonable perquisites suitable to
the office in the Corporation which he holds.

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               (b) The Executive shall be reimbursed for all business travel 
and other expenses incidental to the performance of services hereunder in
accordance with the usual practices of the Corporation, such reimbursement to be
made within a reasonable time not to exceed thirty (30) days after the Executive
submits written invoices and receipts evidencing such expenses and the purposes
for which the same were incurred.

               (c) The Corporation shall advance to the Executive $12,000 on the
Effective Date and an additional $12,000 on the thirtieth day following the
Effective Date, for expenses incurred by the Executive for housing within the
United States during the first six months of his employment hereunder. Within a
reasonable time, and not later than nine months after the Effective Date, the
Executive shall submit written evidence of such housing expenses to the
Corporation. If the Executive's substantiated housing expenses for the six month
period are less than $24,000, he shall repay the difference to the Corporation.

               (d) The Corporation shall pay or reimburse the Executive for 
legal costs incurred by the Executive in obtaining the necessary U.S.
immigration papers to allow the Executive and his spouse and children to reside
in the United States, and to permit the Executive to perform his duties
hereunder within the United States, during the term of this Agreement.

               (e) The Corporation will arrange for, or at the Corporation's 
election shall reimburse the Executive for the reasonable cost of, moving his
furniture, household effects and personal property from his current residence in
France to the United States, and the Corporation will reimburse Executive for
reasonable expenses associated with the move, including real estate

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agent, legal and other fees associated with the sale of the residence in France,
and legal and other closing costs associated with the purchase of a residence in
the New York area if the purchase occurs within one year of the Effective Date.
Reimbursable expenses shall not include mortgage points associated with the
financing of a residence or the taxes, if any, resulting from being reimbursed
for moving expenses. Any reimbursement under this Subsection (e) shall be made
within a reasonable time not to exceed thirty days after the Executive submits
written invoices or receipts. The total amount payable by the Corporation under
this Subsection (e), whether by direct payment or by reimbursement to the
Executive, shall not exceed $50,000. If the Executive voluntarily terminates his
employment under the Agreement (other than as a result of a Section 4(b)
Termination Event) within one year of the last payment under this Subsection
(e), the amounts paid (directly or as reimbursements by the Corporation under
this Subsection (e)) shall be considered a loan and shall be payable by the
Executive to the Corporation within thirty (30) days of his Actual Termination
Date.

         9.    Stock Options.

               (a) The Corporation, acting by the Compensation Committee of 
the Board of Directors ("Compensation Committee"), hereby agrees to grant the
Executive, as of the Effective Date, under the Corporation's 1996 Incentive Plan
(the "1996 Option Plan") or otherwise, the following stock option:

                           a stock option to purchase 425,000 shares of the
                           Corporation's common stock with a per share exercise


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                           price equal to the fair market value of a share of
                           the Corporation's common stock (as determined under
                           the 1996 Stock Option Plan) as of the Effective Date,
                           such option to vest with respect to one-third of the
                           shares on the first anniversary of the Effective
                           Date, and the balance to vest in 24 equal monthly
                           installments commencing on the first day of the month
                           following the first anniversary of the Effective
                           Date. 

For the purposes of this Agreement, an option shall become exercisable when it
is vested.

               (b) With respect to all stock options to be granted to the
Executive pursuant to the terms hereof, the Compensation Committee agrees that 
if the Executive so requests at the time of exercise, the Compensation Committee
will permit the Executive to exercise any or all such options by borrowing the
exercise price from the Corporation and using the proceeds thereof to exercise
the options, subject to the terms and conditions of Section 5.6 of the Option
Plan.

         10.   Withholding. All payments required to be made by the Corporation
hereunder to the Executive shall be subject to the withholding of such amounts
relating to taxes and other governmental assessments as the Corporation may
reasonably determine it should withhold pursuant to any applicable law, rule or
regulation.

         11.   Entire Agreement. This Agreement sets forth the entire agreement
and

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understanding between the parties and supersedes all proposals, commitments,
writings, negotiations, discussions, agreements and understandings, oral or
written, of every kind and nature between them concerning the subject matter
hereof (other than the 1996 Option Plan or any other employee stock option plan
which may be adopted during the term of the Agreement (together, the "Option
Plans"), any option agreement granted under the Option Plans or otherwise, and
the terms of any employee benefit plan covering the Executive).

         12.   Amendments and Waivers. This Agreement may not be amended or
otherwise modified except in a writing signed by both parties hereto. No
discharge of the terms hereof shall be deemed valid unless by full performance
by the parties or by a writing signed by the parties. A waiver by any party of
any breach or violation of this Agreement shall not be deemed or construed as a
waiver of any other breach or violation hereof. No failure to exercise or delay
in exercising any right of any party pursuant to this Agreement shall operate as
a modification of the rights of the party vis a vis the other party, or shall be
construed as a waiver of the said right.

         13.   Notices. All notices, requests, demands and other communications
provided for by this Agreement shall be in writing (excluding telecopier,
electronic mail or similar writing) and shall be deemed to have been given at
the time when mailed in any general or branch office of the United States Postal
Service, enclosed in a registered or certified postpaid envelope, or sent by
Federal Express or other similar overnight courier service, addressed to the
address of the parties stated above or to such changed address as such party may
have fixed by notice.

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         14.   Successors. This Agreement shall inure to the benefit of and be
binding upon the Corporation, its successors and assigns, including without
limitation any corporation which may acquire all or substantially all of the
Corporation's assets and business or with or into which the Corporation may be
consolidated or merged, and the Executive, his heirs, executors, administrators
and legal representatives, provided that the obligations of the Executive
hereunder may not be delegated.

         15.   Governing Law. This Agreement shall be governed by and 
construed in accordance with the laws of the State of New York governing
contracts to be made and performed therein without giving effect to principles
of conflicts of law.

         16.   Currency. All references to dollars hereunder shall refer to the
lawful currency of the United States of America, and all payments or
reimbursements payable under the Agreement shall be made in such currency.

         17.   Severability. Should any part, term, condition or provision 
hereof or the application thereof be declared illegal, invalid or otherwise
unenforceable or in conflict with any other law by a court of competent
jurisdiction, the validity of the remaining parts, terms, conditions or
provisions of this Agreement shall not be affected thereby, and the illegal,
invalid or unenforceable portions of this Agreement shall be and hereby are
redrafted to conform with applicable law, while leaving the remaining portions
of this Agreement intact, except to the extent necessary to conform to the
redrafted portions hereof.

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         18.   Mediation and Arbitration; Litigation.

               (a) Any dispute relating to this Agreement, other than any
dispute relating to the provisions of Section 5, 6 or 7 hereof, shall be
submitted to mediation in accordance with the WIPO (World Intellectual Property
Organization) Mediation Rules. The mediation shall be held in New York City,
N.Y. and shall be in the English language. 

If, and to the extent that, any such dispute has not been settled pursuant to
the mediation within 90 days of the commencement of mediation, it shall, upon
the filing of a Request for Arbitration by either party, be referred to and
finally determined by Arbitration in accordance with the WIPO Expedited
Arbitration rules. Alternatively, if, before the expiration of the said period
of 90 days, either party fails to participate or to continue to participate in
the mediation, the dispute shall, upon the filing of a Request for Arbitration
by the other party, be referred to and finally determined by Arbitration in
accordance with the WIPO Expedited Arbitration Rules. In either case, the
arbitration shall be held in New York City, N.Y. and shall be in the English
language. The dispute referred to arbitration shall be decided in accordance
with the laws of the State of New York.

               (b) Any action or proceeding brought to enforce or interpret the
provisions of Section 5, 6 or 7 of this Agreement, or to determine or resolve
any claim or controversy arising under Section 5, 6 or 7 hereof, shall be
brought in a court of competent jurisdiction in the State of New York. Both
parties agree to waive their right to a jury trial in any such action or
proceeding, and such waiver shall be irrevocable.

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               (c) The Corporation will pay or reimburse the Executive for all 
costs and expenses (including court costs and attorney's fees) incurred by
Executive as a result of any claim, action or proceeding arising out of, or
challenging the validity, or enforceability of, this Agreement or any provision
hereof, but only if the Executive is the prevailing party with respect to such
claim, action or proceeding.

         19.   Review by Executive. The Executive acknowledges that he has
carefully reviewed the terms of this Agreement and that he has not relied on the
Corporation or its counsel and that this Agreement fairly and accurately
reflects the terms of his employment by the Corporation.

         20.   Headings. The headings of the sections contained in this 
Agreement are for convenience only and shall not be deemed to control or affect
the meaning or construction of any provision of this Agreement.

         21.   Counterparts. This Agreement may be executed in two or more
counterparts.

         22.   Effective Date and Survival of Certain Provisions. 

               (a) This Agreement shall become effective as of a date (the
"Effective Date") to be agreed upon in writing by the Corporation and the
Executive, and shall continue in effect through the earlier of the Actual
Termination Date or the Scheduled Termination Date. If the Agreement does not
become effective on or before 150 days after the date first set forth in this
Agreement (the expiration of said 150-day period being herein referred to as the
"Cancellation

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Date"), then except as is otherwise provided in this Section 22, the Agreement
shall be null and void, ab initio.

               (b) The parties may agree in writing to extend the date by
which the Agreement must become effective pursuant to Subsection (a), provided
that any such extension shall be for no more than thirty days from the
Cancellation Date, as it may have been previously extended.

               (c) Notwithstanding anything set forth in this Agreement to
the contrary, following the execution of the Agreement by the Corporation and
the Executive, the Corporation shall pay for or reimburse the Executive for the
reasonable costs and expenses of a one week relocation visit to New York City,
including round-trip business class airfare, lodging and meals and local travel
expenses, for the Executive and his spouse. The Corporation may, at its election
arrange for all or any part of the travel and lodging associated with the visit
The Executive shall be entitled to take the one week relocation visit prior to
the Effective Date (but not after the Cancellation Date, as the same may have
been extended) and the Executive shall be entitled to reimbursement for
out-of-pocket expenses pursuant to this Subsection (c) whether or not the
Agreement becomes effective or becomes null and void. The Executive shall be
entitled to reimbursement for such expenses within a reasonable time not to
exceed thirty days after the Executive submits written invoices and receipts
evidencing such expenses.

               (d) Sections 4, 5, 6 and 7 shall survive the termination of
the Agreement to the extent provided therein.

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          IN WITNESS WHEREOF, each of the parties hereto has executed this 
Agreement as of the date first above written.

                                 CADUS PHARMACEUTICAL CORPORATION

                                 By: The Compensation Committee of the Board
                                      of Directors

                                 /s/ Harold First
                                 -----------------------------------------
                                     Harold First, Member


                                 /s/ Nicole Vitullo
                                 -----------------------------------------
                                     Nicole Vitullo, Member


                                 /s/ Jack Wasserman
                                 -----------------------------------------
                                     Jack Wasserman, Member

                                 EXECUTIVE:

                                 /s/ Charles Woler
                                 -----------------------------------------
                                     Charles Woler


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