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                                                                   Exhibit 10.35

                              EMPLOYMENT AGREEMENT


                  This Employment Agreement (the "Agreement") is entered into by
and between Versicor Inc., a Delaware corporation (the "Company"), and Zhengyu
Yuan (the "Executive"), as of the 28th day of July 2000.

                  WHEREAS, the Board of Directors of the Company (the "Board")
has determined that it is in the best interests of the Company and its
stockholders to assure that the Company will have the continued service of the
Executive, and the Board therefore desires to provide the Executive with
compensation and benefits arrangements that satisfy the expectations of the
Executive and that are competitive with those of other corporations; and

                  WHEREAS, the Board also desires to assure that the Executive's
services will be available notwithstanding the possibility, threat or occurrence
of a Change of Control (as defined below) of the Company, and the Board believes
it is imperative to diminish the inevitable distraction of the Executive by
virtue of the personal uncertainties and risks created by a pending or
threatened Change of Control and to encourage the Executive's full attention and
dedication to the Company in the event of any threatened or pending Change of
Control.

                  NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto,
intending to be legally bound, do hereby agree as follows:

I.       EMPLOYMENT PERIOD.

                  The Company hereby agrees to continue the Executive in its
employ, and the Executive hereby agrees to remain in the employ of the Company
subject to the terms and conditions of this Agreement, for the period commencing
on the date the Securities and Exchange Commission declares effective the
Company's Form S-1 ("Effective Date") and ending on the third anniversary of
such date (the "Employment Period"); provided, however, that commencing on the
date one year after the Effective Date, and on each annual anniversary of the
Effective Date (such date and each annual anniversary thereof shall be
hereinafter referred to as the "Renewal Date"), unless previously terminated,
the Employment Period shall be automatically extended so as to terminate three
years from such Renewal Date, unless at least 60 days prior to the Renewal Date
the Company shall give notice to the Executive that the Employment Period shall
not be so extended.

II.      DUTIES.

                  A.       During the Employment Period, the Executive shall
serve as Director, Biochemistry & HTS of the Company, and shall have such other
duties and responsibilities as the Board of Directors of the Company shall
determine from time to time.

                  B.       During the Employment Period, the Executive agrees to
devote substantially all of his time, energy and ability to the business of the
Company. Nothing herein shall prevent the Executive, upon approval of the Board
of Directors of the Company, from serving as a director or trustee of other
corporations or businesses that are not in competition


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with the business of the Company or in competition with any present or future
affiliate of the Company, provided such service does not materially interfere
with the Executive's duties hereunder.

III.     COMPENSATION.

                  A.       BASE SALARY. The Company will pay to the Executive a
base salary at the rate of $136,905 per year. Such salary shall be earned
monthly and shall be payable in periodic installments no less frequently than
monthly in accordance with the Company's customary practices. Amounts payable
shall be reduced by standard withholding and other authorized deductions. The
Company will review the Executive's salary at least annually. The Company may in
its discretion increase the Executive's salary but it may not reduce it during
the term of this Agreement. Any increase in the Executive's salary shall not
serve to limit or reduce any other obligation to the Executive under this
Agreement.

                  B.       ANNUAL BONUS, INCENTIVE, SAVINGS AND RETIREMENT
PLANS. The Executive shall be entitled to participate in all annual bonus,
incentive, stock incentive, savings and retirement plans, defined contribution
plans, practices, policies and programs applicable generally to other executives
of the Company.

                  C.       WELFARE BENEFIT PLANS. The Executive and/or his
family, as the case may be, shall be eligible for participation in and shall
receive all benefits under welfare benefit plans, practices, policies and
programs provided by the Company (including, without limitation, medical,
prescription, dental, disability, salary continuance, executive life, group
life, accidental death and travel accident insurance plans and programs) to the
extent such plan, practices, and programs are applicable generally to executives
of the Company.

                  D.       EXPENSES. The Executive shall be entitled to receive
prompt reimbursement for all reasonable employment expenses incurred by him in
accordance with the policies, practices and procedures as in effect generally
with respect to other executives of the Company.

                  E.       FRINGE BENEFITS. The Executive shall be entitled to
fringe benefits in accordance with the plans, practices, programs and policies
as in effect generally with respect to other executives of the Company.

                  F.       VACATION. The Executive shall be entitled to paid
vacation time in accordance with the plans, policies, programs and practices as
in effect with respect to other executives of the Company.

                  G.       PLAN AMENDMENTS. The Company reserves the right to
modify, suspend or discontinue any and all of its executive plans, practices,
policies and programs at any time without recourse by the Executive so long as
such action is taken generally with respect to other similarly situated
executives and does not single out the Executive.


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IV.      TERMINATION.

                  A.       DEATH OR DISABILITY. The Executive's employment shall
terminate automatically upon the Executive's death. If the Company determines in
good faith that a Disability of the Executive has occurred (as Disability is
defined below), it may give to the Executive written notice in accordance with
Section XIV of its intention to terminate the Executive's employment. In such
event, the Executive's employment with the Company shall terminate effective on
the 30th day after receipt of such notice by the Executive (the "Disability
Effective Date"), provided that, within the 30 days after such receipt, the
Executive shall not have returned to full-time performance of his duties. For
purposes of this Agreement, "Disability" shall mean the absence of the Executive
from his duties with the Company on a full-time basis (1) for a period of three
consecutive months as a result of incapacity due to mental or physical illness
that is determined to be total and permanent by a physician selected by the
Company or its insurers and acceptable to the Executive or his legal
representative (such agreement as to acceptability not to be withheld
unreasonably) or (2) for shorter periods aggregating 180 or more business days
in any twelve (12) month period. "Incapacity" as used herein shall be limited
only to such Disability which substantially prevents the Company from availing
itself of the services of the Executive or substantially impairs the Executive's
ability to perform services to the standard reasonably expected by the Company
for the Executive's office.

                  B.       CAUSE, ETC. The Company also may at any time, before
or after a Change in Control, terminate the Executive's employment for "Cause."
For purposes of this Agreement, "Cause" shall mean that the Company, acting in
good faith based upon the information then known to the Company, determines that
the Executive has: (1) repeatedly failed to perform in a material respect his
obligations under the Agreement without proper reason and has not cured such
failure in a reasonable time after receiving notice from the Company, (2)
willfully engaged in illegal conduct or gross misconduct that is materially
injurious to the Company, or (3) breached the provisions of Section VI
(Confidential Information) of this Agreement. Section VI will continue in effect
in the event that the Executive's employment is terminated for Cause.

                  For purposes of this provision, no act or failure to act, on
the part of the Executive, shall be considered "willful" unless it is done, or
omitted to be done, by the Executive in bad faith or without reasonable belief
that the Executive's action or omission was in the best interests of the
Company. Any act, or failure to act, based upon authority given pursuant to a
resolution duly adopted by the Board or upon the instructions of the Chief
Executive Officer or a senior officer of the Company or based upon the advice of
counsel for the Company shall be conclusively presumed to be done, or omitted to
be done, by the Executive in good faith and in the best interests of the
Company. No termination of the Executive for Cause will be effective unless
adopted pursuant to a resolution duly adopted by the affirmative vote of not
less than a majority of the entire membership of the Board at a meeting of the
Board called and held for such purpose, and communicated to the Executive by
written notice that explains the basis on which Cause has been found.


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                  C.       OBLIGATIONS OF THE COMPANY UPON TERMINATION.

                  1.       DEATH OR DISABILITY. If the Executive's employment is
terminated by reason of the Executive's Death or Disability, this Agreement
shall not be subject to any further extension pursuant to Section I hereof.

                  2.       CAUSE, ETC. If the Executive's employment is
terminated by the Company pursuant to Section IV-B, this Agreement shall
terminate without further obligations to the Executive other than for (a)
payment of the sum of the Executive's annual base salary through the date of
termination and any accrued vacation pay to the extent not theretofore paid,
which shall be paid to the Executive or his estate or beneficiary, as
applicable, in a lump sum in cash within 30 days of the Date of Termination; (b)
payment of any compensation previously earned and deferred by the Executive
(together with any accrued interest or earnings thereon), which shall be paid to
the Executive or his estate or beneficiary at the times provided in, and
pursuant to terms of, the plan or agreement under which such compensation was
deferred; and (c) payment to the Executive or his estate or beneficiary, as
applicable, any amounts due pursuant to the terms of any applicable welfare
benefit plans. The payments described in clauses (a) and (b) shall hereinafter
be referred to as the "Accrued Obligations." If it is subsequently determined
that the Company did not have the right to terminate the Executive under Section
IV-B, then the Company's decision to terminate shall be deemed to have been made
under Section IV-C-3 and the amounts payable thereunder shall be the only
amounts the Executive may receive for his termination.

                  3.       OTHER. If the Company breaches this Agreement by
terminating the Executive's employment other than pursuant to Sections IV-A or
IV-B, the Company shall pay to the Executive by cashier's check immediately upon
the Executive's termination of employment with the Company an amount equal to
three times the sum of (1) the amount of the highest annual base salary paid to
the Executive during the three most recent calendar years ending prior to the
year in which the Change in Control occurs and (2) the amount of the highest
bonus (or bonuses) paid to the Executive for any calendar year ending prior to
the year in which the Change in Control occurs. This payment shall be in
addition to the timely payment of the Accrued Obligations. The Executive shall
have no duty to mitigate damages and none of the payments provided in this
Section IV-C-3 shall be reduced by any amounts earned or received by Executive
from a third party at any time.

                  4.       EXCLUSIVE REMEDY. The Executive agrees that the
payments contemplated by this Agreement shall constitute the exclusive and sole
remedy for any termination of his employment and the Executive covenants not to
assert or pursue any other remedies, at law or in equity, with respect to any
termination of employment.

                  D.       NOTICE OF TERMINATION. Any termination by the Company
for Cause, or by the Executive for Good Reason, shall be communicated by Notice
of Termination to the other party hereto given in accordance with Section XIV of
this Agreement. For purposes of this Agreement, a "Notice of Termination" means
a written notice which (1) indicates the specific termination provision in this
Agreement relied upon, (2) to the extent applicable, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive's employment under the provision so indicated and (3) if the Date
of Termination (as


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defined below) is other than the date of receipt of such notice, specifies
the termination date (which date shall be not more than thirty days after the
giving of such notice). The failure by the Executive or the Company to set
forth in the Notice of Termination any fact or circumstance which contributes
to a showing of Good Reason or Cause shall not waive any right of the
Executive or the Company, respectively, hereunder or preclude the Executive
or the Company, respectively, from asserting such fact or circumstance in
enforcing the Executive's or the Company's rights hereunder.

                  E.       DATE OF TERMINATION. "Date of Termination" means (1)
if the Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified therein, as the case may be, (2) if the Executive's
employment is terminated by the Company other than for Cause or Disability, the
Date of Termination shall be the date on which the Company notifies the
Executive of such termination and (3) if the Executive's employment is
terminated by reason of Death or Disability, the Date of Termination shall be
the date of death of the Executive or the Disability Effective Date, as the case
may be.

V.       CHANGE IN CONTROL.

                  A.       CHANGE OF CONTROL PAYMENTS. Notwithstanding anything
to the contrary in this Agreement, if a Change in Control (as defined below) of
the Company occurs during the term of this Agreement, and if within two years
following such Change in Control either the Company terminates the Executive's
employment without Cause, or if the Executive terminates his employment for Good
Reason (as defined below), the Company shall pay to the Executive by cashier's
check immediately upon the Executive's termination of employment with the
Company an amount equal to two times the sum of (1) the amount of the highest
annual base salary paid to the Executive during the two most recent calendar
years ending prior to the year in which the Change in Control occurs and (2) the
amount of the highest bonus (or bonuses) paid to the Executive for any calendar
year ending prior to the year in which the Change in Control occurs. This
payment shall be in lieu of the payment otherwise payable under Section
IV-C-3(a), but shall be in addition to the timely payment of the Accrued
Obligations. In addition, the Company shall continue to provide all benefits
under the welfare benefit plans as set forth in Section III-C until the earlier
of (1) the Executive's receipt of benefits substantially similar in scope and
nature from another employer or (2) three years after the most recent Renewal
Date. The Executive shall have no duty to mitigate damages and none of the
payments provided in this Section V-A shall be reduced by any amounts earned or
received by the Executive from a third party at any time. Notwithstanding
anything to the contrary in this Section V, if, in connection with a Change in
Control transaction, the Executive voluntarily enters a new written employment
agreement with the Company or its successor, the Executive may no longer rely
upon the provisions of this Section V.

                  B.       CERTAIN ADDITIONAL PAYMENTS.

                  1.       Notwithstanding anything in this Agreement to the
contrary and except as set forth below, in the event it shall be determined that
any payment or distribution by the Company or its affiliates to or for the
benefit of the Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise, but
determined


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without regard to any additional payments required under this Section V-B) (a
"Payment") would be subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code or any interest or penalties are incurred by the
Executive with respect to such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), then the Executive shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such that after payment by the
Executive of all taxes (including any interest or penalties imposed with
respect to such taxes), including, without limitation, any income taxes (and
any interest and penalties imposed with respect thereto) and Excise Tax
imposed upon the Gross-Up Payment, the Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
Notwithstanding the foregoing provisions of this Section V-B-1, if it shall
be determined that the Executive is entitled to a Gross-Up Payment, but that
the Payments do not exceed 110% of the greatest amount (the "Reduced Amount")
that could be paid to the Executive such that the receipt of Payments would
not give rise to any Excise Tax, then no Gross-Up Payment shall be made to
the Executive and the Payments, in the aggregate, shall be reduced to the
Reduced Amount.

                  2.       Subject to the provisions of Section V-B-3, all
determinations required to be made under this Section V-B, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination, shall be made
by PricewaterhouseCoopers LLP or such other certified public accounting firm as
may be designated by the Executive (the "Accounting Firm") which shall provide
detailed supporting calculations both to the Company and the Executive within 15
business days of the receipt of notice from the Executive that there has been a
Payment, or such earlier time as is requested by the Company. In the event that
the Accounting Firm is serving as accountant or auditor for the individual,
entity or group effecting the Change of Control, the Executive shall appoint
another nationally recognized accounting firm to make the determinations
required hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall
be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to
this Section V-B, shall be paid by the Company to the Executive within five days
of the receipt of the Accounting Firm's determination. Any determination by the
Accounting Firm shall be binding upon the Company and the Executive. As a result
of the uncertainty in the application of Section 4999 of the Code at the time of
the initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments that will not have been made by the Company should have been
made ("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section V-B-3 and the Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Executive.

                  3.       The Executive shall notify the Company in writing of
any claim by the Internal Revenue Service that, if successful, would require the
payment by the Company of the Gross-Up Payment. Such notification shall be given
as soon as practicable but no later than ten business days after the Executive
is informed in writing of such claim and shall apprise the Company of the nature
of such claim and the date on which such claim is requested to be paid. The
Executive shall not pay such claim prior to the expiration of the 30-day period
following the date on which it gives such notice to the Company (or such shorter
period ending on the date that


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any payment of taxes with respect to such claim is due). If the Company
notifies the Executive in writing prior to the expiration of such period that
it desires to contest such claim, the Executive shall:

                  (a)      give the Company any information reasonably requested
by the Company relating to such claim,

                  (b)      take such action in connection with contesting such
claim as the Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with respect to
such claim by an attorney reasonably selected by the Company,

                  (c)      cooperate with the Company in good faith in order
effectively to contest such claim, and

                  (d)      permit the Company to participate in any proceedings
relating to such claim;

                  provided, however, that the Company shall bear and pay
directly all costs and expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify and hold the
Executive harmless, on an after-tax basis, for any Excise Tax or income tax
(including interest and penalties with respect thereto) imposed as a result of
such representation and payment of costs and expenses. Without limitation on the
foregoing provisions of this Section V-B-3, the Company shall control all
proceedings taken in connection with such contest and, at its sole option, may
pursue or forgo any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at its
sole option, either direct the Executive to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and the Executive agrees
to prosecute such contest to a determination before any administrative tribunal,
in a court of initial jurisdiction and in one or more appellate courts, as the
Company shall determine; provided, however, that if the Company directs the
Executive to pay such claim and sue for a refund, the Company shall advance the
amount of such payment to the Executive, on an interest-free basis and shall
indemnify and hold the Executive harmless, on an after-tax basis, from any
Excise Tax or income tax (including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any imputed income with
respect to such advance; and further provided that any extension of the statute
of limitations relating to payment of taxes for the taxable year of the
Executive with respect to which such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore, the Company's control of
the contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.

                  4.       If, after the receipt by the Executive of an amount
advanced by the Company pursuant to Section V-B-3, the Executive becomes
entitled to receive any refund with respect to such claim, the Executive shall
(subject to the Company's complying with the requirements of Section V-B-3)
promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If, after the


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receipt by the Executive of an amount advanced by the Company pursuant to
Section V-B-3, a determination is made that the Executive shall not be entitled
to any refund with respect to such claim and the Company does not notify the
Executive in writing of its intent to contest such denial of refund prior to the
expiration of 30 days after such determination, then such advance shall be
forgiven and shall not be required to be repaid and the amount of such advance
shall offset, to the extent thereof, the amount of Gross-Up Payment required to
be paid.

                  C.       DEFINITIONS.  For purposes of this Section V:

                  1.       A "Change in Control" of the Company means any of the
following:

                  (a)      Approval by the stockholders of the Company of the
dissolution or liquidation of the Company;

                  (b)      Approval by the stockholders of the Company of an
agreement to merge or consolidate, or otherwise reorganize, with or into one or
more entities that are not subsidiaries or other affiliates, as a result of
which less than 50% of the outstanding voting securities of the surviving or
resulting entity immediately after the reorganization are, or will be, owned,
directly or indirectly, by stockholders of the Company immediately before such
reorganization (assuming for purposes of such determination that there is no
change in the record ownership of the Company's securities from the record date
for such approval until such reorganization and that such record owners hold no
securities of the other parties to such reorganization, but including in such
determination any securities of the other parties to such reorganization held by
affiliates of the Company);

                  (c)      Approval by the stockholders of the Company of the
sale of substantially all of the Company's business and/or assets to a person or
entity which is not a subsidiary or other affiliate; or

                  (d)      Any "person" (as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934 (the "Exchange Act") but
excluding any person described in and satisfying the conditions of Rule
13d-1(b)(1) thereunder), becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing more than 40% of the combined voting power of the Company's
then outstanding securities entitled to then vote generally in the election of
directors of the Company; or

                  (e)      During any period not longer than two consecutive
years, individuals who at the beginning of such period constituted the Board of
Directors of the Company cease to constitute at least a majority thereof, unless
the election, or the nomination for election by the Corporation's stockholders,
of each new Board member was approved by a vote of at least three-fourths of the
Board members then still in office who were Board members at the beginning of
such period (including for these purposes, new members whose election or
nomination was so approved).

                  2.       "Good Reason" shall mean, without obtaining the
Executive's prior written consent thereto, (a) an adverse and significant change
in the Executive's position, duties, responsibilities, or status with the
Company, (b) a change in the Executive's office location to a


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point more than 35 miles from the Executive's office immediately prior to a
Change in Control; (c) the taking of any action by the Company to eliminate
benefit plans without providing substitutes which, in overall, provide a
substantially similar aggregate value of benefits, to reduce benefits
thereunder or to substantially diminish the aggregate value of incentive
awards or other fringe benefits, (d) any reduction in the Executive's base
salary, (e) any purported termination by the Company of the Executive's
employment other than as expressly permitted by this Agreement, or (f) any
breach of this Agreement by the Company. "Good Reason" shall also mean and
include, without limitation, any termination by the Executive of his
employment with the Company at any time within one year following a Change in
Control, whether with or without reason.

VI.      CONFIDENTIAL INFORMATION.

                  A.       The Executive shall hold in a fiduciary capacity for
the benefit of the Company all secret or confidential information, knowledge or
data relating to the Company or any of its affiliated companies, and their
respective businesses, which shall have been obtained by the Executive during
his employment by the Company and which shall not be or become public knowledge
(other than by acts by the Executive or his representatives in violation of this
Agreement). After termination of the Executive's employment with the Company, he
shall not, without the prior written consent of the Company, or as may otherwise
be required by law or legal process, communicate or divulge any such
information, knowledge or data to anyone other than the Company and those
designated by it; PROVIDED, however, that the Executive will not be so bound if
following a Change in Control the Executive is terminated without Cause or if
the Executive terminates his employment for Good Reason.

                  B.       The Executive agrees that all lists, materials,
books, files, reports, correspondence, records, and other documents ("Company
material") used, prepared, or made available to the Executive, shall be and
shall remain the property of the Company. Upon the termination of employment or
the expiration of this Agreement, all Company materials shall be returned
immediately to the Company, and the Executive shall not make or retain any
copies thereof.

VII.     SUCCESSORS.

                  A.       This Agreement is personal to the Executive and shall
not, without the prior written consent of the Company, be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.

                  B.       This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns and any such successor
or assignee shall be deemed substituted for the Company under the terms of this
Agreement for all purposes. As used herein, "successor" and "assignee" shall
include any person, firm, corporation or other business entity which at any
time, whether by purchase, merger or otherwise, directly or indirectly acquires
the stock of the Company or to which the Company assigns this Agreement by
operation of law or otherwise.


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VIII.    WAIVER.

                  No waiver of any breach of any term or provision of this
Agreement shall be construed to be, nor shall be, a waiver of any other breach
of this Agreement. No waiver shall be binding unless in writing and signed by
the party waiving the breach.

IX.      MODIFICATION.

                  This Agreement may not be amended or modified other than by a
written agreement executed by the Executive and the Company.

X.       SAVINGS CLAUSES.

                  A.       If any provision of this Agreement or the application
thereof is held invalid, the invalidity shall not affect other provisions or
applications of the Agreement which can be given effect without the invalid
provisions or applications and to this end the provisions of this Agreement are
declared to be severable.

                  B.       If any provision of this Agreement would, in the
written opinion of the Company's independent accountants, prevent or
substantially interfere with the Company's ability to receive pooling treatment
in any business combination, the offending provision will be deemed severed from
this Agreement and the other provisions of this Agreement shall not be affected.

XI.      COMPLETE AGREEMENT.

                  This instrument constitutes and contains the entire agreement
and understanding concerning Executive's employment and other subject matters
addressed herein between the parties, and supersedes and replaces all prior
negotiations and all agreements proposed or otherwise, whether written or oral,
concerning the subject matter hereof. This is an integrated agreement.

XII.     GOVERNING LAW.

                  This Agreement shall be deemed to have been executed and
delivered within the State of California, and the rights and obligations of the
parties hereunder shall be construed and enforced in accordance with, and
governed by, by the laws of the State of California without regard to principles
of conflict of laws.

XIII.    CONSTRUCTION.

                  The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect.

XIV.     COMMUNICATIONS.

                  All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered in person, by telecopy, telex or


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equivalent form of written telecommunication or if sent by registered or
certified mail, return receipt requested, postage prepaid, as follows:

      To Company:               Versicor Inc.
                                34790 Ardentech Ct.
                                Fremont, California  94555
                                Attention:  Corporate Secretary

      With copy to:             O'Melveny & Myers LLP
                                Embarcadero Center West
                                275 Battery Street, 26th Floor
                                San Francisco, California  94111
                                Attention:  Peter T. Healy

      To Executive:             Zhengyu Yuan
                                35645 Beeching Lane
                                Fremont, California  94536

                  Either party may change the address at which notice shall be
given by written notice given in the above manner. All notices required or
permitted hereunder shall be deemed duly given and received on the date of
delivery, if delivered in person or by telex, telecopy or other written
telecommunication on a regular business day and within normal business hours or
on the fifth day next succeeding the date of mailing, if sent by certified or
registered mail.

XV.      EXECUTION.

                  This Agreement is being executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. Photographic copies of such signed
counterparts may be used in lieu of the originals for any purpose.

XVI.     LEGAL COUNSEL.

                  The Executive and the Company recognize that this is a legally
binding contract and acknowledge and agree that they have had the opportunity to
consult with legal counsel of their choice.

XVII.    SURVIVAL.

                  The provisions of this Agreement shall survive the term of
this Agreement to the extent necessary to accommodate full performance of all
such terms.

                  [Remainder of page intentionally left blank]


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


VERSICOR INC.:                                   EXECUTIVE:

By:  /s/ George F. Horner III                    By:  /s/ Zhengyu Yuan
     -----------------------------                    -------------------------

Name:  George F. Horner III                      Name:  Zhengyu Yuan

Title:  President and CEO


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